Document:

Exhibit 4.1

 

Counterpart      of 75 Counterparts

	
 
    

 

DUKE ENERGY PROGRESS, INC.

(formerly Carolina Power & Light d/b/a Progress Energy Carolinas, Inc.)

 

TO

 

THE BANK OF NEW YORK MELLON

(formerly The Bank of New York (formerly Irving Trust Company))

 

AND

 

TINA D. GONZALEZ

(successor to Frederick G. Herbst, Richard H. West, J.A. Austin, E.J. McCabe,

G. White, D.W. May, J.A. Vaughan, Joseph J. Arney, Wafaa Orfy,

W.T. Cunningham, Douglas J. MacInnes and Ming Ryan)

 

	
 
    	
as   Trustees under Duke Energy Progress Inc.’s Mortgage and Deed of Trust, dated   as of May 1,1940
    

 

 

Eighty-second Supplemental Indenture

 

Providing among other things for

First Mortgage Bonds, Floating Rate Series, due 2017 (Ninety-third Series)

First Mortgage Bonds, 4.375% Series due 2044 (Ninety-fourth Series)

 

Dated as of March 1, 2014

	
 
    

Prepared by and Return to:

Robinson, Bradshaw & Hinson, P.A.

101 North Tryon Street, Suite 1900

Charlotte, North Carolina 28246

 

 

EIGHTY-SECOND SUPPLEMENTAL INDENTURE

 

INDENTURE, dated as of March 1, 2014, by and between DUKE ENERGY PROGRESS, INC. (formerly Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc.), a corporation of the State of North Carolina, whose post office address is 410 South Wilmington Street, Raleigh, North Carolina 27601-1748 (hereinafter sometimes referred to as the “Company”), and THE BANK OF NEW YORK MELLON (formerly The Bank of New York (formerly Irving Trust Company)), a corporation of the State of New York, whose post office address is 101 Barclay Street, New York, New York 10286 (hereinafter sometimes referred to as the “Corporate Trustee”), and TINA D. GONZALEZ (successor to Frederick G. Herbst, Richard H. West, J.A. Austin, E.J. McCabe, G. White, D.W. May, J.A. Vaughan, Joseph J. Arney, Wafaa Orfy, W.T. Cunningham, Douglas J. MacInnes and Ming Ryan), whose post office address is 10161 Centurion Parkway, Jacksonville, Florida 32256 (hereinafter sometimes referred to as the “Individual Trustee”; the Corporate Trustee and the Individual Trustee being hereinafter together sometimes referred to as the “Trustees”), as Trustees under the Mortgage and Deed of Trust, dated as of May 1, 1940 (hereinafter referred to as the “Original Mortgage” and, as supplemented from time to time by the eighty-one supplemental indentures mentioned below, by this Indenture, and by all other indentures, if any, supplemental to the Original Mortgage, hereinafter referred to as the “Mortgage”), which Original Mortgage was executed and delivered by the Company to Irving Trust Company (now The Bank of New York Mellon) and Frederick G. Herbst to secure the payment of bonds issued or to be issued under and in accordance with the provisions of the Original Mortgage, reference to which Original Mortgage is hereby made, this Indenture (hereinafter sometimes referred to as the “Eighty-second Supplemental Indenture”) being supplemental thereto:

 

WHEREAS, the Original Mortgage was recorded in various Counties in the States of North Carolina and South Carolina; and

 

WHEREAS, the Original Mortgage was indexed and cross-indexed in the real and chattel mortgage records in various Counties in the States of North Carolina and South Carolina; and

 

WHEREAS, an instrument, dated as of June 25, 1945, was executed by the Company appointing Richard H. West as Individual Trustee in succession to said Frederick G. Herbst (deceased) under the Original Mortgage, as theretofore supplemented, and by Richard H. West accepting said appointment, which instrument was recorded in various Counties in the States of North Carolina and South Carolina; and

 

WHEREAS, an instrument, dated as of December 12, 1957, was executed by the Company appointing J.A. Austin as Individual Trustee in succession to said Richard H. West (resigned) under the Original Mortgage, as theretofore supplemented, and by J.A. Austin accepting said appointment, which instrument was recorded in various Counties in the States of North Carolina and South Carolina; and

 

WHEREAS, an instrument, dated as of April 15, 1966, was executed by the Company appointing E.J. McCabe as Individual Trustee in succession to said J.A. Austin (resigned) under the Original Mortgage, as theretofore supplemented, and by E.J. McCabe accepting said

 

 

appointment, which instrument was recorded in various Counties in the States of North Carolina and South Carolina; and

 

WHEREAS, by the Seventeenth Supplemental Indenture mentioned below, the Company, among other things, appointed G. White as Individual Trustee in succession to said E.J. McCabe (resigned), and G. White accepted said appointment; and

 

WHEREAS, by the Nineteenth Supplemental Indenture mentioned below, the Company, among other things, appointed D.W. May as Individual Trustee in succession to said G. White (resigned), and D.W. May accepted said appointment; and

 

WHEREAS, by the Thirty-fifth Supplemental Indenture mentioned below, the Company, among other things, appointed J.A. Vaughan as Individual Trustee in succession to said D.W. May (resigned), and J.A. Vaughan accepted said appointment; and

 

WHEREAS, an instrument, dated as of June 27, 1988, was executed by the Company appointing Joseph J. Arney as Individual Trustee in succession to said J.A. Vaughan (resigned) under the Original Mortgage, as theretofore supplemented, and by Joseph J. Arney accepting said appointment, which instrument was recorded in various Counties in the States of North Carolina and South Carolina; and

 

WHEREAS, by the Forty-fifth Supplemental Indenture mentioned below, the Company, among other things, appointed Wafaa Orfy as Individual Trustee in succession to said Joseph J. Arney (resigned), and Wafaa Orfy accepted said appointment; and

 

WHEREAS, by the Forty-ninth Supplemental Indenture mentioned below, the Company, among other things, appointed W.T. Cunningham as Individual Trustee in succession to said Wafaa Orfy (resigned), and W.T. Cunningham accepted said appointment; and

 

WHEREAS, by the Sixty-sixth Supplemental Indenture mentioned below, the Company, among other things, appointed Douglas J. MacInnes as Individual Trustee in succession to said W.T. Cunningham (resigned), and Douglas J. MacInnes accepted said appointment; and

 

WHEREAS, by the Seventy-sixth Supplemental Indenture mentioned below, the Company, among other things, appointed Ming Ryan as Individual Trustee in succession to said Douglas J. MacInnes (resigned), and Ming Ryan accepted said appointment; and

 

WHEREAS, by the Seventy-ninth Supplemental Indenture mentioned below, the Company, among other things, appointed Tina D. Gonzalez as Individual Trustee in succession to said Ming Ryan (resigned), and Tina D. Gonzalez accepted said appointment; and

 

WHEREAS, such instruments were indexed and cross-indexed in the real and chattel mortgage records in various Counties in the States of North Carolina and South Carolina; and

 

WHEREAS, effective January 1, 2003, the Company began doing business under the name Progress Energy Carolinas, Inc., without changing the legal name of the Company; and certificates of doing business by the Company under such name were recorded in all counties in the State of North Carolina and South Carolina in which this Eighty-second Supplemental

 

2

 

Indenture is to be recorded and were filed and indexed and cross-indexed in the real property records in each of such counties; and

 

WHEREAS, effective April 29, 2013, the Company changed its name to Duke Energy Progress, Inc. and evidence of such name change was (i) recorded in all counties in the States of North Carolina and South Carolina in which this Eighty-second Supplemental Indenture is to be recorded and (ii) filed and indexed and cross-indexed in the real property records in each of such counties; and

 

WHEREAS, by the Original Mortgage, the Company covenanted that it would execute and deliver such supplemental indenture or indentures and such further instruments and do such further acts as might be necessary or proper to carry out more effectually the purposes of the Mortgage and to make subject to the lien of the Original Mortgage any property thereafter acquired intended to be subject to the lien thereof; and

 

WHEREAS, for said purposes, among others, the Company executed and delivered to the Trustees the following supplemental indentures:

 

	
Designation
    	
 
    	
Dated as of
    
	
First Supplemental   Indenture
    	
 
    	
January 1, 1949
    
	
Second Supplemental   Indenture
    	
 
    	
December 1, 1949
    
	
Third Supplemental   Indenture
    	
 
    	
February 1, 1951
    
	
Fourth Supplemental   Indenture
    	
 
    	
October 1, 1952
    
	
Fifth Supplemental   Indenture
    	
 
    	
March 1, 1958
    
	
Sixth Supplemental   Indenture
    	
 
    	
April 1, 1960
    
	
Seventh Supplemental   Indenture
    	
 
    	
November 1, 1961
    
	
Eighth Supplemental   Indenture
    	
 
    	
July 1, 1964
    
	
Ninth Supplemental   Indenture
    	
 
    	
April 1, 1966
    
	
Tenth Supplemental   Indenture
    	
 
    	
October 1, 1967
    
	
Eleventh Supplemental   Indenture
    	
 
    	
October 1, 1968
    
	
Twelfth Supplemental   Indenture
    	
 
    	
January 1, 1970
    
	
Thirteenth Supplemental   Indenture
    	
 
    	
August 1, 1970
    
	
Fourteenth Supplemental   Indenture
    	
 
    	
January 1, 1971
    
	
Fifteenth Supplemental   Indenture
    	
 
    	
October 1, 1971
    
	
Sixteenth Supplemental   Indenture
    	
 
    	
May 1, 1972
    
	
Seventeenth Supplemental   Indenture
    	
 
    	
May 1, 1973
    
	
Eighteenth Supplemental   Indenture
    	
 
    	
November 1, 1973
    
	
Nineteenth Supplemental   Indenture
    	
 
    	
May 1, 1974
    
	
Twentieth Supplemental   Indenture
    	
 
    	
December 1, 1974
    
	
Twenty-first Supplemental   Indenture
    	
 
    	
April 15, 1975
    
	
Twenty-second Supplemental   Indenture
    	
 
    	
October 1, 1977
    
	
Twenty-third Supplemental   Indenture
    	
 
    	
June 1, 1978
    
	
Twenty-fourth Supplemental   Indenture
    	
 
    	
May 15, 1979
    
	
Twenty-fifth Supplemental   Indenture
    	
 
    	
November 1, 1979
    
	
Twenty-sixth Supplemental   Indenture
    	
 
    	
November 1, 1979
    
	
Twenty-seventh   Supplemental Indenture
    	
 
    	
April 1, 1980
    

 

3

 

	
Designation
    	
 
    	
Dated as of
    
	
Twenty-eighth Supplemental   Indenture
    	
 
    	
October 1, 1980
    
	
Twenty-ninth Supplemental   Indenture
    	
 
    	
October 1, 1980
    
	
Thirtieth Supplemental   Indenture
    	
 
    	
December 1, 1982
    
	
Thirty-first Supplemental   Indenture
    	
 
    	
March 15, 1983
    
	
Thirty-second Supplemental   Indenture
    	
 
    	
March 15, 1983
    
	
Thirty-third Supplemental   Indenture
    	
 
    	
December 1, 1983
    
	
Thirty-fourth Supplemental   Indenture
    	
 
    	
December 15, 1983
    
	
Thirty-fifth Supplemental   Indenture
    	
 
    	
April 1, 1984
    
	
Thirty-sixth Supplemental   Indenture
    	
 
    	
June 1, 1984
    
	
Thirty-seventh   Supplemental Indenture
    	
 
    	
June 1, 1984
    
	
Thirty-eighth Supplemental   Indenture
    	
 
    	
June 1, 1984
    
	
Thirty-ninth Supplemental   Indenture
    	
 
    	
April 1, 1985
    
	
Fortieth Supplemental   Indenture
    	
 
    	
October 1, 1985
    
	
Forty-first Supplemental   Indenture
    	
 
    	
March 1, 1986
    
	
Forty-second Supplemental   Indenture
    	
 
    	
July 1, 1986
    
	
Forty-third Supplemental   Indenture
    	
 
    	
January 1, 1987
    
	
Forty-fourth Supplemental   Indenture
    	
 
    	
December 1, 1987
    
	
Forty-fifth Supplemental   Indenture
    	
 
    	
September 1, 1988
    
	
Forty-sixth Supplemental   Indenture
    	
 
    	
April 1, 1989
    
	
Forty-seventh Supplemental   Indenture
    	
 
    	
August 1, 1989
    
	
Forty-eighth Supplemental   Indenture
    	
 
    	
November 15, 1990
    
	
Forty-ninth Supplemental   Indenture
    	
 
    	
November 15, 1990
    
	
Fiftieth Supplemental   Indenture
    	
 
    	
February 15, 1991
    
	
Fifty-first Supplemental   Indenture
    	
 
    	
April 1, 1991
    
	
Fifty-second Supplemental   Indenture
    	
 
    	
September 15, 1991
    
	
Fifty-third Supplemental   Indenture
    	
 
    	
January 1, 1992
    
	
Fifty-fourth Supplemental   Indenture
    	
 
    	
April 15, 1992
    
	
Fifty-fifth Supplemental   Indenture
    	
 
    	
July 1, 1992
    
	
Fifty-sixth Supplemental   Indenture
    	
 
    	
October 1, 1992
    
	
Fifty-seventh Supplemental   Indenture
    	
 
    	
February 1, 1993
    
	
Fifty-eighth Supplemental   Indenture
    	
 
    	
March 1, 1993
    
	
Fifty-ninth Supplemental   Indenture
    	
 
    	
July 1, 1993
    
	
Sixtieth Supplemental   Indenture
    	
 
    	
July 1, 1993
    
	
Sixty-first Supplemental   Indenture
    	
 
    	
August 15, 1993
    
	
Sixty-second Supplemental   Indenture
    	
 
    	
January 15, 1994
    
	
Sixty-third Supplemental   Indenture
    	
 
    	
May 1, 1994
    
	
Sixty-fourth Supplemental   Indenture
    	
 
    	
August 15, 1997
    
	
Sixty-fifth Supplemental   Indenture
    	
 
    	
April 1, 1998
    
	
Sixty-sixth Supplemental   Indenture
    	
 
    	
March 1, 1999
    
	
Sixty-seventh Supplemental   Indenture
    	
 
    	
March 1, 2000
    
	
Sixty-eighth Supplemental   Indenture
    	
 
    	
April 1, 2000
    
	
Sixty-ninth Supplemental   Indenture
    	
 
    	
June 1, 2000
    
	
Seventieth Supplemental   Indenture
    	
 
    	
July 1, 2000
    
	
Seventy-first Supplemental   Indenture
    	
 
    	
February 1, 2002
    
	
Seventy-second   Supplemental Indenture
    	
 
    	
September 1, 2003
    

 

4

 

	
Designation
    	
 
    	
Dated as of
    
	
Seventy-third Supplemental   Indenture
    	
 
    	
March 1, 2005
    
	
Seventy-fourth   Supplemental Indenture
    	
 
    	
November 1, 2005
    
	
Seventy-fifth Supplemental   Indenture
    	
 
    	
March 1, 2008
    
	
Seventy-sixth Supplemental   Indenture
    	
 
    	
January 1, 2009
    
	
Seventy-seventh   Supplemental Indenture
    	
 
    	
June 18, 2009
    
	
Seventy-eighth   Supplemental Indenture
    	
 
    	
September 1, 2011
    
	
Seventy-ninth Supplemental   Indenture
    	
 
    	
May 1, 2012
    
	
Eightieth Supplemental   Indenture
    	
 
    	
March 1, 2013
    
	
Eighty-first Supplemental   Indenture
    	
 
    	
June 1, 2013
    

 

which supplemental indentures (other than said Sixty-fifth Supplemental Indenture and said Sixty-seventh Supplemental Indenture) were recorded in various Counties in the States of North Carolina and South Carolina, and were indexed and cross-indexed in the real and chattel mortgage or security interest records in various Counties in the States of North Carolina and South Carolina; and

 

WHEREAS, no recording or filing of said Sixty-fifth Supplemental Indenture in any manner or place is required by law in order to fully preserve and protect the security of the bondholders and all rights of the Trustees or is necessary to make effective the lien intended to be created by the Original Mortgage or said Sixty-fifth Supplemental Indenture; and said Sixty-seventh Supplemental Indenture was recorded only in Rowan County, North Carolina to make subject to the lien of the Mortgage certain property of the Company located in said County intended to be subject to the lien of the Original Mortgage, all in accordance with Section 42 of the Mortgage; and

 

WHEREAS, the Original Mortgage and said First through Eighty-first Supplemental Indentures (other than said Sixty-fifth and said Sixty-seventh Supplemental Indentures) were or are to be recorded in all Counties in the States of North Carolina and South Carolina in which this Eighty-second Supplemental Indenture is to be recorded; and

 

WHEREAS, in addition to the property described in the Original Mortgage, as heretofore supplemented, the Company has acquired certain other property, rights and interests in property; and

 

WHEREAS, the Company has heretofore issued, in accordance with the provisions of the Original Mortgage, as from time to time then supplemented, the following series of First Mortgage Bonds:

 

	
Series
    	
 
    	
Principal
    Amount
    Issued
    	
 
    	
Principal
    Amount
    Outstanding
    	
 
    
	
3-3/4% Series due 1965
    	
 
    	
$
    	
46,000,000
    	
 
    	
None
    	
 
    
	
3-1/8% Series due 1979
    	
 
    	
20,100,000
    	
 
    	
None
    	
 
    
	
3-1/4% Series due 1979
    	
 
    	
43,930,000
    	
 
    	
None
    	
 
    
							

 

5

 

	
Series
    	
 
    	
Principal
    Amount
    Issued
    	
 
    	
Principal
    Amount
    Outstanding
    	
 
    
	
2-7/8% Series due 1981
    	
 
    	
15,000,000
    	
 
    	
None
    	
 
    
	
3-1/2% Series due 1982
    	
 
    	
20,000,000
    	
 
    	
None
    	
 
    
	
4-1/8% Series due 1988
    	
 
    	
20,000,000
    	
 
    	
None
    	
 
    
	
4-7/8% Series due 1990
    	
 
    	
25,000,000
    	
 
    	
None
    	
 
    
	
4-1/2% Series due 1991
    	
 
    	
25,000,000
    	
 
    	
None
    	
 
    
	
4-1/2% Series due 1994
    	
 
    	
30,000,000
    	
 
    	
None
    	
 
    
	
5-1/8% Series due 1996
    	
 
    	
30,000,000
    	
 
    	
None
    	
 
    
	
6-3/8% Series due 1997
    	
 
    	
40,000,000
    	
 
    	
None
    	
 
    
	
6-7/8% Series due 1998
    	
 
    	
40,000,000
    	
 
    	
None
    	
 
    
	
8-3/4% Series due 2000
    	
 
    	
40,000,000
    	
 
    	
None
    	
 
    
	
8-3/4% Series due August 1, 2000
    	
 
    	
50,000,000
    	
 
    	
None
    	
 
    
	
7-3/8% Series due 2001
    	
 
    	
65,000,000
    	
 
    	
None
    	
 
    
	
7-3/4% Series due October 1, 2001
    	
 
    	
70,000,000
    	
 
    	
None
    	
 
    
	
7-3/4% Series due 2002
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
7-3/4% Series due 2003
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
8-1/8% Series due November 1, 2003
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
9-3/4% Series due 2004
    	
 
    	
125,000,000
    	
 
    	
None
    	
 
    
	
11-1/8% Series due 1994
    	
 
    	
50,000,000
    	
 
    	
None
    	
 
    
	
11% Series due April 15, 1984
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
8-1/2% Series due October 1, 2007
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
9-1/4% Series due June 1, 2008
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
10-1/2% Series due May 15, 2009
    	
 
    	
125,000,000
    	
 
    	
None
    	
 
    
	
12-1/4% Series due November 1, 2009
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series A
    	
 
    	
63,000,000
    	
 
    	
None
    	
 
    
	
14-1/8% Series due April 1, 1987
    	
 
    	
125,000,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series B
    	
 
    	
50,000,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series C
    	
 
    	
6,000,000
    	
 
    	
None
    	
 
    
	
11-5/8% Series due December 1, 1992
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series D
    	
 
    	
48,485,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series E
    	
 
    	
5,970,000
    	
 
    	
None
    	
 
    
	
12-7/8% Series due December 1, 2013
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series F
    	
 
    	
34,700,000
    	
 
    	
None
    	
 
    
	
13-3/8% Series due April 1, 1994
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series G
    	
 
    	
122,615,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series H
    	
 
    	
70,000,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series I
    	
 
    	
70,000,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series J
    	
 
    	
6,385,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series K
    	
 
    	
2,580,000
    	
 
    	
None
    	
 
    
	
Extendible Series due April 1, 1995
    	
 
    	
125,000,000
    	
 
    	
None
    	
 
    
	
11-3/4% Series due October 1, 2015
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
8-7/8% Series due March 1, 2016
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
8-1/8% Series due July 1, 1996
    	
 
    	
125,000,000
    	
 
    	
None
    	
 
    
	
8-1/2% Series due January 1, 2017
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    

 

6

 

	
Series
    	
 
    	
Principal
    Amount
    Issued
    	
 
    	
Principal
    Amount
    Outstanding
    	
 
    
	
9.174% Series due December 1, 1992
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
9% Series due September 1, 1993
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
9.60% Series due April 1, 1991
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
Secured Medium-Term Notes, Series A
    	
 
    	
200,000,000
    	
 
    	
None
    	
 
    
	
8-1/8% Series due November 15, 1993
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
Secured Medium-Term Notes, Series B
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
8-7/8% Series due February 15, 2021
    	
 
    	
125,000,000
    	
 
    	
None
    	
 
    
	
9% Series due April 1, 2022
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
8-5/8% Series due September 15, 2021
    	
 
    	
100,000,000
    	
 
    	
$
    	
100,000,000
    	
 
    
	
5.20% Series due January 1, 1995
    	
 
    	
125,000,000
    	
 
    	
None
    	
 
    
	
7-7/8% Series due April 15, 2004
    	
 
    	
150,000,000
    	
 
    	
None
    	
 
    
	
8.20% Series due July 1, 2022
    	
 
    	
150,000,000
    	
 
    	
None
    	
 
    
	
6-3/4% Series due October 1, 2002
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
6-1/8% Series due February 1, 2000
    	
 
    	
150,000,000
    	
 
    	
None
    	
 
    
	
7-1/2% Series due March 1, 2023
    	
 
    	
150,000,000
    	
 
    	
None
    	
 
    
	
5-3/8% Series due July 1, 1998
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
Secured Medium-Term Notes, Series C
    	
 
    	
200,000,000
    	
 
    	
None
    	
 
    
	
6-7/8% Series due August 15, 2023
    	
 
    	
100,000,000
    	
 
    	
None
    	
 
    
	
5-7/8% Series due January 15, 2004
    	
 
    	
150,000,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series L
    	
 
    	
72,600,000
    	
 
    	
72,600,000
    	
 
    
	
Pollution Control Series M
    	
 
    	
50,000,000
    	
 
    	
50,000,000
    	
 
    
	
6.80% Series due August 15, 2007
    	
 
    	
200,000,000
    	
 
    	
None
    	
 
    
	
5.95% Senior Note Series due March 1, 2009
    	
 
    	
400,000,000
    	
 
    	
None
    	
 
    
	
7.50% Senior Note Series due April 1, 2005
    	
 
    	
300,000,000
    	
 
    	
None
    	
 
    
	
Pollution Control Series N
    	
 
    	
67,300,000
    	
 
    	
67,300,000
    	
 
    
	
Pollution Control Series O
    	
 
    	
55,640,000
    	
 
    	
55,640,000
    	
 
    
	
Pollution Control Series P
    	
 
    	
50,000,000
    	
 
    	
50,000,000
    	
 
    
	
Pollution Control Series Q
    	
 
    	
50,000,000
    	
 
    	
50,000,000
    	
 
    
	
Pollution Control Series R
    	
 
    	
45,600,000
    	
 
    	
45,600,000
    	
 
    
	
Pollution Control Series S
    	
 
    	
41,700,000
    	
 
    	
41,700,000
    	
 
    
	
Pollution Control Series T
    	
 
    	
50,000,000
    	
 
    	
50,000,000
    	
 
    
	
Pollution Control Series U
    	
 
    	
50,000,000
    	
 
    	
50,000,000
    	
 
    
	
Pollution Control Series V
    	
 
    	
87,400,000
    	
 
    	
87,400,000
    	
 
    
	
Pollution Control Series W
    	
 
    	
48,485,000
    	
 
    	
None
    	
 
    
	
5.125% Series due 2013
    	
 
    	
400,000,000
    	
 
    	
None
    	
 
    
	
6.125% Series due 2033
    	
 
    	
200,000,000
    	
 
    	
200,000,000
    	
 
    
	
5.15% Series due 2015
    	
 
    	
300,000,000
    	
 
    	
300,000,000
    	
 
    
	
5.70% Series due 2035
    	
 
    	
200,000,000
    	
 
    	
200,000,000
    	
 
    
	
5.25% Series due 2015
    	
 
    	
400,000,000
    	
 
    	
400,000,000
    	
 
    
	
6.30% Series due 2038
    	
 
    	
325,000,000
    	
 
    	
325,000,000
    	
 
    
	
5.30% Series due 2019
    	
 
    	
600,000,000
    	
 
    	
600,000,000
    	
 
    
	
3.00% Series due 2021
    	
 
    	
500,000,000
    	
 
    	
500,000,000
    	
 
    
	
2.80% Series due 2022
    	
 
    	
500,000,000
    	
 
    	
500,000,000
    	
 
    
							

 

7

 

	
Series
    	
 
    	
Principal
    Amount
    Issued
    	
 
    	
Principal
    Amount
    Outstanding
    	
 
    
	
4.10% Series due 2042
    	
 
    	
500,000,000
    	
 
    	
500,000,000
    	
 
    
	
4.10% Series due 2043
    	
 
    	
500,000,000
    	
 
    	
500,000,000
    	
 
    
	
Pollution Control Series X
    	
 
    	
48,485,000
    	
 
    	
48,485,000
    	
 
    

 

which bonds are herein sometimes referred to as bonds of the First through Ninety-second Series, respectively; and

 

WHEREAS, Section 8 of the Original Mortgage, as heretofore supplemented, provides that the form of each series of bonds (other than the First Series) issued thereunder and of the coupons to be attached to coupon bonds of such series shall be established by Resolution of the Board of Directors of the Company and that the form of such series, as established by said Board of Directors, shall specify the descriptive title of the bonds and various other terms thereof, and may also contain such provisions not inconsistent with the provisions of the Mortgage as said Board of Directors may, in its discretion, cause to be inserted therein expressing or referring to the terms and conditions upon which such bonds are to be issued and/or secured under the Mortgage; and

 

WHEREAS, Section 120 of the Original Mortgage, as heretofore supplemented, provides, among other things, that any power, privilege or right expressly or impliedly reserved to or in any way conferred upon the Company by any provision of the Mortgage, whether such power, privilege or right is in any way restricted or is unrestricted, may be in whole or in part waived or surrendered or subjected to any restriction if at the time unrestricted or to additional restriction if already restricted, and the Company may enter into any further covenants, limitations or restrictions for the benefit of any one or more series of bonds issued thereunder, or the Company may cure any ambiguity contained therein, or in any supplemental indenture, or may establish the terms and provisions of any series of bonds other than said First Series, by an instrument in writing executed and acknowledged by the Company in such manner as would be necessary to entitle a conveyance of real estate to record in all of the states in which any property at the time subject to the lien of the Mortgage shall be situated; and

 

WHEREAS, the Company now desires to create two new series of bonds and to add to its covenants and agreements contained in the Original Mortgage, as heretofore supplemented, certain other covenants and agreements to be observed by it; and

 

WHEREAS, the execution and delivery by the Company of this Eighty-second Supplemental Indenture, and the terms of the bonds of the Ninety-third Series and Ninety-fourth Series, hereinafter referred to, have been duly authorized by the Board of Directors of the Company by appropriate resolutions of said Board of Directors;

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

That the Company, in consideration of the premises and of One Dollar to it duly paid by the Trustees at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in further evidence of assurance of the estate, title and rights of the

 

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Trustees and in order further to secure the payment of both the principal of and interest and premium, if any, on the bonds from time to time issued under the Mortgage, according to their tenor and effect and the performance of all the provisions of the Original Mortgage (including any instruments supplemental thereto and any modification made as in the Mortgage provided) and of said bonds, hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges, sets over and confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of the Original Mortgage, as heretofore supplemented) unto The Bank of New York Mellon and Tina D. Gonzalez, as Trustees under the Mortgage, and to their successor or successors in said trust, and to said Trustees and their successors and assigns forever, all the following described properties of the Company:

 

All electric generating plants, stations, transmission lines, and electric distribution systems, including permanent improvements, extensions or additions to or about such electrical plants, stations, transmission lines and distribution systems of the Company; all dams, power houses, power sites, buildings, generators, reservoirs, pipe lines, flumes, structures and works; all substations, transformers, switchboards, towers, poles, wires, insulators, and other appliances and equipment, and the Company’s rights or interests in the land upon which the same are situated, and all other property, real or personal, forming a part of or appertaining to, or used, occupied or enjoyed in connection with said generating plants, stations, transmission lines, and distribution systems; together with all rights of way, easements, permits, privileges, franchises and rights for or related to the construction, maintenance, or operation thereof, through, over, under or upon any public streets or highways, or the public lands of the United States, or of any State or other lands; and all water appropriations and water rights, permits and privileges; including all property, real, personal, and mixed, acquired by the Company after the date of the execution and delivery of the Original Mortgage, in addition to property covered by the above-mentioned supplemental indentures (except any herein or in the Original Mortgage, as heretofore supplemented, expressly excepted), now owned or, subject to the provisions of Section 87 of the Mortgage, hereafter acquired by the Company and wheresoever situated, including (without in anywise limiting or impairing by the enumeration of the same the scope and intent of the foregoing or of any general description contained in this Eighty-second Supplemental Indenture) all lands, power sites, flowage rights, water rights, flumes, raceways, dams, rights of way and roads; all steam and power houses, gas plants, street lighting systems, standards and other equipment incidental thereto, telephone, radio and television systems, air-conditioning systems and equipment incidental thereto, water works, steam heat and hot water plants, lines, service and supply systems, bridges, culverts, tracks, ice or refrigeration plants and equipment, street and interurban railway systems, offices, buildings and other structures and the equipment thereof; all machinery, engines, boilers, dynamos, electric and gas machines, regulators, meters, transformers, generators, motors, electrical, gas and mechanical appliances, conduits, cables, water, steam, heat, gas or other pipes, gas mains and pipes, service pipes, fittings,  valves and connections, pole and transmission lines, wires, cables, tools, implements, apparatus, furniture, chattels and choses in action; all municipal and other franchises, consents or permits; all lines for the transmission and distribution of electric current, gas, steam heat or water for any purpose including poles, wires, cables, pipes, conduits, ducts and all apparatus for use in connection therewith; all real estate, lands, easements, servitudes, licenses, permits, franchises, privileges, rights 

 

9

 

of way and other rights in or relating to real estate or the occupancy of the same and (except as herein or in the Original Mortgage, as heretofore supplemented, expressly excepted) all the right, title and interest of the Company in and to all other property of any kind or nature appertaining to and/or used and/or occupied and/or enjoyed in connection with any property hereinbefore or in the Original Mortgage, as heretofore supplemented, described.

 

TOGETHER WITH all and singular the tenements, hereditaments and appurtenances belonging or in any wise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Section 57 of the Original Mortgage, as heretofore supplemented) the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the estate, right, title and interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part and parcel thereof.

 

IT IS HEREBY AGREED by the Company that, subject to the provisions of Section 87 of the Original Mortgage, as heretofore supplemented, all the property, rights, and franchises acquired by the Company after the date hereof (except any herein or in the Mortgage, as heretofore supplemented, expressly excepted) shall be and are as fully granted and conveyed hereby and as fully embraced within the lien hereof and the lien of the Original Mortgage as if such property, rights and franchises were now owned by the Company and were specifically described herein and conveyed hereby.

 

PROVIDED THAT the following are not and are not intended to be now or hereafter granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed hereunder and are hereby expressly excepted from the lien and operation of this Eighty-second Supplemental Indenture and from the lien and operation of the Mortgage, namely:  (1) cash, shares of stock and obligations (including bonds, notes and other securities) not hereafter specifically pledged, paid, deposited or delivered under the Mortgage or covenanted so to be; (2) merchandise, equipment, materials or supplies held for the purpose of sale in the usual course of business and fuel, oil and similar materials and supplies consumable in the operation of any properties of the Company; rolling stock, buses, motor coaches, vehicles and automobiles; (3) bills, notes and accounts receivable, and all contracts, leases and operating agreements not specifically pledged under the Mortgage or this Eighty-second Supplemental Indenture or covenanted so to be; (4) electric energy and other materials or products generated, manufactured, produced or purchased by the Company for sale, distribution or use in the ordinary course of its business; (5) any property which does not constitute Property Additions, Funded Property or Funded Cash (each as defined in the Original Mortgage as supplemented) and (6) any property and rights heretofore released from the lien of the Original Mortgage, as heretofore supplemented; provided, however, that the property and rights expressly excepted from the lien and operation of the Original Mortgage, as heretofore supplemented, and this Eighty-second Supplemental Indenture in the above subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so excepted in the event and as of the date that either or both of the Trustees or a receiver or trustee shall enter upon and take possession of the Mortgaged and Pledged Property in the manner provided in Article XII of the Mortgage by reason of the occurrence of a Default as defined in said Article XII.

 

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TO HAVE AND TO HOLD all such properties, real, personal and mixed, granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed by the Company as aforesaid, or intended so to be, unto the Trustees, their successors and assigns forever.

 

IN TRUST NEVERTHELESS, for the same purposes and upon the same terms, trusts and conditions and subject to and with the same provisos and covenants as are set forth in the Original Mortgage, as heretofore supplemented, this Eighty-second Supplemental Indenture being supplemental to the Original Mortgage.

 

AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions, provisos, covenants and provisions contained in the Mortgage, as heretofore supplemented, shall affect and apply to the property hereinbefore described and conveyed and to the estate, rights, obligations and duties of the Company and the Trustees and the beneficiaries of the trust with respect to said property, and to the Trustees and their successors as Trustees of said property in the same manner and with the same effect as if the said property had been owned by the Company at the time of the execution of the Original Mortgage and had been specifically and at length described in and conveyed to the Trustees by the Original Mortgage as a part of the property therein stated to be conveyed.

 

The Company further covenants and agrees to and with the Trustees and their successor or successors in such trust under the Mortgage as follows:

 

ARTICLE I

 

NINETY-THIRD SERIES OF BONDS

 

SECTION 1.         (A)  There shall be a series of bonds designated “Floating Rate Series, due 2017” (herein sometimes referred to as the “Ninety-third Series”), each of which shall also bear the descriptive title “First Mortgage Bond”, and the form thereof, which shall be established by Resolution of the Board of Directors of the Company, shall contain suitable provisions with respect to the matters hereinafter in this Section specified.  Bonds of the Ninety-third Series shall be initially issued in the aggregate principal amount of $250,000,000 and mature on March 6, 2017 (the “Stated Maturity”), be issued as fully registered bonds in the denominations of Two Thousand Dollars and in any integral multiple of One Thousand Dollars in excess thereof and be dated as in Section 10 of the Mortgage provided, the principal of and interest on each said bond to be payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts.  If a due date for the payment of principal on the bonds of the Ninety-third Series falls on a day that is not a Business Day, then the payment of principal and interest due on that day will be made on the next succeeding Business Day, and no interest will accrue on the amounts payable for the period from and after the original due date and until the next Business Day.

 

All bonds of the Ninety-third Series shall bear interest from March 6, 2014 or the last date to which interest has been paid or duly provided for at the rates set quarterly pursuant to this Section 1(A), payable quarterly in arrears on the sixth day of March, June, September and 

 

11

 

December of each year, commencing June 6, 2014 (each such date being an “Interest Payment Date” for bonds of the Ninety-third Series; provided, however, in the event that any Interest Payment Date for the bonds of the Ninety-third Series (other than the Interest Payment Date that is the Stated Maturity of the principal of the bonds of the Ninety-third Series) would otherwise be a day that is not a Business Day, such Interest Payment Date will be postponed to the next succeeding Business Day).   Interest on the bonds of the Ninety-third Series shall be computed on the basis of the actual number of days elapsed over a 360-day year.  The term “Business Day” means any day other than a Saturday or Sunday or day on which banking institutions in The City of New York are required or authorized to close.

 

The bonds of the Ninety-third Series will bear interest for each quarterly Interest Period at a per annum rate determined by the Calculation Agent.  The interest rate applicable during each quarterly Interest Period will be equal to LIBOR on the Interest Determination Date for such Interest Period plus 20 basis points.  Promptly upon such determination, the Calculation Agent will notify the Company and the Corporate Trustee, if the Corporate Trustee is not then serving as the Calculation Agent, of the interest rate for the new Interest Period.  The interest rate determined by the Calculation Agent, absent manifest error, shall be binding and conclusive upon the beneficial owners and holders of the bonds of the Ninety-third Series, the Company and the Corporate Trustee.

 

Upon the request of a holder of the bonds of the Ninety-third Series, the Calculation Agent will provide to such holder the interest rate in effect on the date of such request and, if determined, the interest rate for the next Interest Period.

 

The accrued interest on the bonds of the Ninety-third Series for any period is calculated by multiplying the principal amount of the bonds of the Ninety-third Series by an accrued interest factor.  The accrued interest factor is computed by adding the interest factor calculated for each day in the period for which accrued interest is being calculated.  The interest factor (expressed as a decimal rounded upwards if necessary) is computed by dividing the interest rate (expressed as a decimal rounded upwards if necessary) applicable to such date by 360.

 

All percentages resulting from any calculation of the interest rate on the bonds of the Ninety-third Series will be rounded, if necessary, to the nearest one-hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 0.567845% (or .00567845) being rounded to 0.56785% (or .0056785) and 0.567844% (or .00567844) being rounded to 0.56784% (or .0056784)), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upwards).

 

For purposes of this Section 1(A), except as otherwise expressly provided or unless the context otherwise requires:

 

“Calculation Agent” means The Bank of New York Mellon, as appointed pursuant to Section 3(A) of this Eighty-second Supplemental Indenture, or its successor appointed by the Company pursuant to Article Three hereof, acting as calculation agent.

 

12

 

“Interest Determination Date” means the second London Business Day immediately preceding the first day of the relevant Interest Period.

 

“Interest Period” means the period commencing on an Interest Payment Date for the bonds of the Ninety-third Series (or, with respect to the initial Interest Period only, commencing on the original issue date for the bonds of the Ninety-third Series) and ending on the day before the next succeeding Interest Payment Date for the bonds of the Ninety-third Series.

 

“LIBOR” means, with respect to any Interest Period, the rate (expressed as a percentage per annum) for deposits in U.S. dollars for a three-month period commencing on the first day of that Interest Period and ending on the next Interest Payment Date for the bonds of the Ninety-third Series that appears on Reuters LIBOR01 Page as of 11:00 a.m. (London time) on the Interest Determination Date for that Interest Period. If such rate does not appear on the Reuters LIBOR01 Page as of 11:00 a.m. (London time) on the Interest Determination Date for that Interest Period, LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars for the Interest Period and in a principal amount of not less than $1,000,000 are offered to prime banks in the London interbank market by four major banks in the London interbank market, which may include affiliates of one or more of the underwriters of the bonds of the Ninety-third Series, selected by the Company, at approximately 11:00 a.m., London time, on the Interest Determination Date for that Interest Period. The Company will request the principal London office of each such bank to provide a quotation of its rate to the Calculation Agent. If at least two such quotations are provided, LIBOR with respect to that Interest Period will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR with respect to that Interest Period will be the arithmetic mean of the rates quoted by three major banks in New York City, which may include affiliates of one or more of the underwriters of the bonds of the Ninety-third Series, selected by the Company, at approximately 11:00 a.m., New York City time, on the Interest Determination Date for that Interest Period for loans in U.S. dollars to leading European banks for that Interest Period and in a principal amount of not less than $1,000,000. However, if fewer than three banks selected by the Company to provide quotations are quoting as described above, LIBOR for that Interest Period will be the same as LIBOR as determined for the previous Interest Period.

 

“London Business Day” means a day that is a Business Day and a day on which dealings in deposits in U.S. dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market.

 

“Reuters LIBOR01 Page” means the display designated as Reuters LIBOR01 on the Reuters 3000 Xtra (or such other page as may replace the Reuters LIBOR01 Page on that service, or such other service as may be nominated for the purpose of displaying rates or prices comparable to the London Interbank Offered rate for U.S. dollar deposits by ICE Benchmark Administration Limited (“IBA”) or its successor or such other entity assuming the responsibility of IBA or its successor in calculating the London Interbank Offered rate in the event IBA or its successor no longer does so).

 

(B)  The bonds of the Ninety-third Series shall not be redeemable prior to their maturity.

 

13

 

(C)  Subject to the provisions set forth below with respect to Ninety-third Series Global Bonds, at the option of the registered owner, any bonds of the Ninety-third Series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, The City of New York, shall be exchangeable for a like aggregate principal amount of bonds of the same series of other authorized denominations.  The bonds of the Ninety-third Series may bear such legends as may be necessary to comply with any law or with any rules or regulations made pursuant thereto or with the rules or regulations of any stock exchange or to conform to usage or agreement with respect thereto.

 

Subject to the provisions set forth below with respect to Ninety-third Series Global Bonds, bonds of the Ninety-third Series shall be transferable upon the surrender thereof for cancellation, together with a written instrument of transfer in form approved by the registrar duly executed by the registered owner or by his duly authorized attorney, at the office or agency of the Company in the Borough of Manhattan, The City of New York.

 

Upon any exchange or transfer of bonds of the Ninety-third Series, the Company may make a charge therefor sufficient to reimburse it for any tax or taxes or other governmental charge required to be paid by the Company, as provided in Section 12 of the Mortgage, but the Company hereby waives any right to make a charge in addition thereto for any exchange or transfer of bonds of said Series.

 

(D)  The bonds of the Ninety-third Series shall be issued in registered form without coupons and shall be issued initially in the form of one or more global bonds (each such global bond hereinafter sometimes referred to as a “Ninety-third Series Global Bond”) to or on behalf of The Depository Trust Company (hereinafter sometimes referred to as “DTC”), as depositary therefor, and registered in the name of such depositary or its nominee.  Any bonds of the Ninety-third Series to be issued or transferred to, or to be held by or on behalf of DTC as such depositary or such nominee (or any successor of such depositary or nominee) for such purpose shall bear the depositary legends as required or otherwise agreed to by the Corporate Trustee and the Company, and in the case of a successor depositary, such legend or legends as such depositary and/or the Company shall require and to which each shall agree, in each case such agreement to be confirmed in writing to the Corporate Trustee.  Notwithstanding any other provision in this Eighty-second Supplemental Indenture, payment of interest on the bonds of the Ninety-third Series may be made at the option of the Company by check mailed to the registered holders thereof at their registered address, and, with respect to a Ninety-third Series Global Bond, the Company may make payments of principal of and interest on such Ninety-third Series Global Bond pursuant to and in accordance with such arrangements as are agreed upon by the Company and the depositary for such Ninety-third Series Global Bond.

 

Except under the limited circumstances described below, bonds of the Ninety-third Series represented by a Ninety-third Series Global Bond or Bonds shall not be exchangeable for, and shall not otherwise be issuable as, bonds of the Ninety-third Series in definitive form. The Ninety-third Series Global Bond or Bonds described in this Section 1(D) may not be transferred except by the depositary to a nominee of the depositary or by a nominee of the depositary to the depositary or another nominee of the depositary or to a successor depositary or its nominee.

 

14

 

A Ninety-third Series Global Bond shall be exchangeable for bonds of the Ninety-third Series registered in the names of persons other than the depositary or its nominee only if (i) the depositary notifies the Company that it is unwilling or unable to continue as a depositary for such Ninety-third Series Global Bond and no successor depositary shall have been appointed by the Company within 90 days of receipt by the Company of such notification, or if at any time the depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the depositary is required to be so registered to act as such depositary and no successor depositary shall have been appointed by the Company within 90 days after it becomes aware of such cessation, (ii) a Default has occurred and is continuing with respect to the bonds of the Ninety-third Series or (iii) the Company in its sole discretion, and subject to the procedures of the depositary, determines that such Ninety-third Series Global Bond shall be so exchangeable. Any Ninety-third Series Global Bond that is exchangeable pursuant to the preceding sentence shall be exchangeable for bonds of the Ninety-third Series registered in such names as the depositary shall direct.

 

In any exchange provided in the preceding paragraph the Company shall execute, and the Corporate Trustee, upon receipt of a Company request for the authentication and delivery of bonds of the Ninety-third Series in the form of definitive certificates in exchange in whole or in part for such Ninety-third Series Global Bond or Bonds, shall authenticate and deliver, without service charge, to each person specified by the depositary, bonds of the Ninety-third Series in the form of definitive certificates of like tenor and terms in an aggregate principal amount equal to the principal amount of such Ninety-third Series Global Bond or the aggregate principal amount of such Ninety-third Series Global Bonds in exchange for such Ninety-third Series Global Bond or Bonds.  Upon the exchange of the entire principal amount of a Ninety-third Series Global Bond for bonds of the Ninety-third Series in the form of definitive certificates, such Ninety-third Series Global Bond shall be canceled by the Corporate Trustee.  Bonds of the Ninety-third Series issued in exchange for a Ninety-third Series Global Bond shall be registered in such names and in such authorized denominations as the depositary for such Ninety-third Series Global Bond, acting pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Corporate Trustee.  Provided that the Company and the Corporate Trustee have so agreed, the Corporate Trustee shall deliver such bonds of the Ninety-third Series to the persons in whose names the bonds of the Ninety-third Series are so to be registered.

 

Any endorsement of a Ninety-third Series Global Bond to reflect the principal amount thereof, or any increase or decrease in such principal amount, shall be made in such manner and by such person or persons as shall be specified in or pursuant to any applicable letter of representations or other arrangement entered into with, or procedures of, the depositary with respect to such Ninety-third Series Global Bond or in a Company request.  Subject to the terms of the Mortgage, the Corporate Trustee shall deliver and redeliver any such Ninety-third Series Global Bond in the manner and upon instructions given by the person or persons specified in or pursuant to any applicable letter of representations or other arrangement entered into with, or procedures of, the depositary with respect to such Ninety-third Series Global Bond or in any applicable Company request.  If a Company request is so delivered, any instructions by the Company with respect to such Ninety-third Series Global Bond contained therein shall be in writing but need not be accompanied by or contained in a Treasurer’s Certificate and need not be accompanied by an opinion of counsel.

 

15

 

The depositary or, if there be one, its nominee, shall be the holder of a Ninety-third Series Global Bond for all purposes under the Mortgage and the bonds of the Ninety-third Series and beneficial owners with respect to such Ninety-third Series Global Bond shall hold their interests pursuant to applicable procedures of such depositary.  The Company, the Corporate Trustee, any bond registrar, any paying agent and any other agent of the Company or the Corporate Trustee shall be entitled to deal with such depositary for all purposes of the Mortgage relating to such Ninety-third Series Global Bond (including the payment of principal and interest and the giving of instructions or directions by or to the beneficial owners of such Ninety-third Series Global Bond as the sole holder of such Ninety-third Series Global Bond and shall have no obligations to the beneficial owners thereof (including any direct or indirect participants in such depositary)).  None of the Company, the Corporate Trustee, any paying agent, any bond registrar or any other agent of the Company or the Corporate Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a beneficial owner in or pursuant to any applicable letter of representations or other arrangement or transaction entered into with, or procedures of, the depositary with respect to such Ninety-third Series Global Bond or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or for any acts or omissions of a depositary.

 

ARTICLE II

 

NINETY-FOURTH SERIES OF BONDS

 

SECTION 2.         (A)  There shall be a series of bonds designated “4.375% Series due 2044” (herein sometimes referred to as the “Ninety-fourth Series”), each of which shall also bear the descriptive title “First Mortgage Bond”, and the form thereof, which shall be established by Resolution of the Board of Directors of the Company, shall contain suitable provisions with respect to the matters hereinafter in this Section specified.  Bonds of the Ninety-fourth Series shall be initially issued in the aggregate principal amount of $400,000,000, mature on March 30, 2044, bear interest at the rate of 4.375% per annum, payable from March 6, 2014, if the date of said bonds is on or prior to September 30, 2014, or, if the date of said bonds is after September 30, 2014, from the March 30 or September 30 next preceding the date of said bonds, semi-annually on March 30 and September 30 of each year commencing on September 30, 2014, be issued as fully registered bonds in the denominations of Two Thousand Dollars and in any integral multiple of One Thousand Dollars in excess thereof and be dated as in Section 10 of the Mortgage provided, the principal of and interest on each said bond to be payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts.

 

Interest on bonds of the Ninety-fourth Series will be computed on the basis of a 360-day year comprised of twelve 30-day months.  If a due date for the payment of interest, principal or any Redemption Price (as defined below) on the bonds of the Ninety-fourth Series, falls on a day that is not a Business Day, then the payment will be made on the next succeeding Business Day, and no interest will accrue on the amounts payable for the period from and after the original due date and until the next Business Day.  The term “Business Day” means any day other than a Saturday or Sunday or day on which banking institutions in The City of New York are required or authorized to close.

 

16

 

(B)  At any time on or after September 30, 2043, the bonds of the Ninety-fourth Series shall be redeemable at the option of the Company, or with the Proceeds of Released Property (as contemplated by clause (4) of Section 61 of the Mortgage), in whole or in part and from time to time, prior to maturity, upon notice as provided in Sections 52 and 54 of the Mortgage (given by mail not less than 30 days and not more than 90 days prior to the date fixed for redemption), at a redemption price equal to 100% of the principal amount of the bonds then Outstanding to be redeemed, plus in each case accrued but unpaid interest on such principal amount to such date fixed for redemption.  At any time prior to September 30, 2043, the bonds of the Ninety-fourth Series shall be redeemable at the option of the Company, or with the Proceeds of Released Property (as contemplated by clause (4) of Section 61 of the Mortgage), in whole or in part and from time to time, upon notice as provided in Sections 52 and 54 of the Mortgage (given by mail not less than 30 days and not more than 90 days prior to the date fixed for redemption (together with the date fixed for redemption referred to in the preceding sentence, each a “Redemption Date”)), at a redemption price (hereinafter sometimes referred to as the “Make-Whole Redemption Price” and, together with the redemption price referred to in the preceding sentence, each a “Redemption Price”) equal to the greater of (i) 100% of the principal amount of the bonds then Outstanding to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on such bonds from such Redemption Date to the maturity date, computed by discounting such payments, in each case, to such 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 either case accrued but unpaid interest on such principal amount to such Redemption Date.  On and after any Redemption Date, if sufficient cash shall have been deposited with the Corporate Trustee (and/or if the Company has irrevocably directed the Corporate Trustee to apply, from moneys held by it available to be used for the redemption of bonds, sufficient cash) to redeem all of the bonds of the Ninety-fourth Series called for redemption, interest on the bonds of the Ninety-fourth Series, or the portions of them so called for redemption, shall cease to accrue.

 

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

 

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having an actual or interpolated maturity comparable to the remaining term of the bonds of the Ninety-fourth Series to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of such bonds of the Ninety-fourth Series.

 

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

 

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

 

“Reference Treasury Dealer” means each of Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, a Primary Treasury Dealer (as defined below) selected by Mitsubishi UFJ Securities (USA), Inc. and a Primary Treasury Dealer selected by SunTrust Robinson Humphrey, Inc., or their respective affiliates or successors, each of which is a primary U.S. Government securities dealer in the United States (a “Primary Treasury Dealer”); provided, however, that if any of the foregoing or their affiliates or successors shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor another Primary Treasury Dealer.

 

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

 

In case of a redemption of only a part of the bonds of the Ninety-fourth Series, absent any written agreement of the registered holders of all of the bonds of the Ninety-fourth Series satisfactory to the Corporate Trustee specifying the particular bonds of the Ninety-fourth Series to be redeemed, the Corporate Trustee shall draw by lot, according to such method as it shall deem proper in its discretion, the particular bonds of the Ninety-fourth Series, or portions of them, to be redeemed.

 

In case of any bonds of the Ninety-fourth Series called for redemption in whole or in part prior to September 30, 2043, the Company shall deliver to the Corporate Trustee promptly upon its calculation thereof, but in any event prior to the related Redemption Date, a Treasurer’s Certificate setting forth its calculation of the Make-Whole Redemption Price applicable to such redemption.  The Corporate Trustee shall be under no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in relying upon the Company’s calculation of any Make-Whole Redemption Price of the bonds of the Ninety-fourth Series.

 

In lieu of stating any Make-Whole Redemption Price, notices of redemption of the bonds of the Ninety-fourth Series called for redemption in whole or in part shall state substantially the following:  “The redemption price of the bonds to be redeemed shall equal the greater of (i) 100% of the principal amount of the bonds then Outstanding to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon from the Redemption Date to the maturity date, computed by discounting such payments, in each case, to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Eighty-second Supplemental Indenture) plus 15 basis points, plus in each case accrued but unpaid interest on the principal amount thereof called for redemption to the Redemption Date.”

 

Except as provided herein, Article X of the Mortgage shall apply to redemptions of bonds of the Ninety-fourth Series.

 

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(C)  Subject to the provisions set forth below with respect to Ninety-fourth Series Global Bonds, at the option of the registered owner, any bonds of the Ninety-fourth Series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, The City of New York, shall be exchangeable for a like aggregate principal amount of bonds of the same series of other authorized denominations.  The bonds of the Ninety-fourth Series may bear such legends as may be necessary to comply with any law or with any rules or regulations made pursuant thereto or with the rules or regulations of any stock exchange or to conform to usage or agreement with respect thereto.

 

Subject to the provisions set forth below with respect to Ninety-fourth Series Global Bonds, bonds of the Ninety-fourth Series shall be transferable upon the surrender thereof for cancellation, together with a written instrument of transfer in form approved by the registrar duly executed by the registered owner or by his duly authorized attorney, at the office or agency of the Company in the Borough of Manhattan, The City of New York.

 

Upon any exchange or transfer of bonds of the Ninety-fourth Series, the Company may make a charge therefor sufficient to reimburse it for any tax or taxes or other governmental charge required to be paid by the Company, as provided in Section 12 of the Mortgage, but the Company hereby waives any right to make a charge in addition thereto for any exchange or transfer of bonds of said Series.

 

(D)  The bonds of the Ninety-fourth Series shall be issued in registered form without coupons and shall be issued initially in the form of one or more global bonds (each such global bond hereinafter sometimes referred to as a “Ninety-fourth Series Global Bond”) to or on behalf of The Depository Trust Company (hereinafter sometimes referred to as “DTC”), as depositary therefor, and registered in the name of such depositary or its nominee.  Any bonds of the Ninety-fourth Series to be issued or transferred to, or to be held by or on behalf of DTC as such depositary or such nominee (or any successor of such depositary or nominee) for such purpose shall bear the depositary legends as required or otherwise agreed to by the Corporate Trustee and the Company, and in the case of a successor depositary, such legend or legends as such depositary and/or the Company shall require and to which each shall agree, in each case such agreement to be confirmed in writing to the Corporate Trustee.  Notwithstanding any other provision in this Eighty-second Supplemental Indenture, payment of interest on the bonds of the Ninety-fourth Series may be made at the option of the Company by check mailed to the registered holders thereof at their registered address, and, with respect to a Ninety-fourth Series Global Bond, the Company may make payments of principal of, any Redemption Price and interest on such Ninety-fourth Series Global Bond pursuant to and in accordance with such arrangements as are agreed upon by the Company and the depositary for such Ninety-fourth Series Global Bond.

 

Except under the limited circumstances described below, bonds of the Ninety-fourth Series represented by a Ninety-fourth Series Global Bond or Bonds shall not be exchangeable for, and shall not otherwise be issuable as, bonds of the Ninety-fourth Series in definitive form. The Ninety-fourth Series Global Bond or Bonds described in this Section 2(D) may not be transferred except by the depositary to a nominee of the depositary or by a nominee of the depositary to the depositary or another nominee of the depositary or to a successor depositary or its nominee.

 

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A Ninety-fourth Series Global Bond shall be exchangeable for bonds of the Ninety-fourth Series registered in the names of persons other than the depositary or its nominee only if (i) the depositary notifies the Company that it is unwilling or unable to continue as a depositary for such Ninety-fourth Series Global Bond and no successor depositary shall have been appointed by the Company within 90 days of receipt by the Company of such notification, or if at any time the depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the depositary is required to be so registered to act as such depositary and no successor depositary shall have been appointed by the Company within 90 days after it becomes aware of such cessation, (ii) a Default has occurred and is continuing with respect to the bonds of the Ninety-fourth Series or (iii) the Company in its sole discretion, and subject to the procedures of the depositary, determines that such Ninety-fourth Series Global Bond shall be so exchangeable. Any Ninety-fourth Series Global Bond that is exchangeable pursuant to the preceding sentence shall be exchangeable for bonds of the Ninety-fourth Series registered in such names as the depositary shall direct.

 

In any exchange provided in the preceding paragraph the Company shall execute, and the Corporate Trustee, upon receipt of a Company request for the authentication and delivery of bonds of the Ninety-fourth Series in the form of definitive certificates in exchange in whole or in part for such Ninety-fourth Series Global Bond or Bonds, shall authenticate and deliver, without service charge, to each person specified by the depositary, bonds of the Ninety-fourth Series in the form of definitive certificates of like tenor and terms in an aggregate principal amount equal to the principal amount of such Ninety-fourth Series Global Bond or the aggregate principal amount of such Ninety-fourth Series Global Bonds in exchange for such Ninety-fourth Series Global Bond or Bonds.  Upon the exchange of the entire principal amount of a Ninety-fourth Series Global Bond for bonds of the Ninety-fourth Series in the form of definitive certificates, such Ninety-fourth Series Global Bond shall be canceled by the Corporate Trustee.  Bonds of the Ninety-fourth Series issued in exchange for a Ninety-fourth Series Global Bond shall be registered in such names and in such authorized denominations as the depositary for such Ninety-fourth Series Global Bond, acting pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Corporate Trustee.  Provided that the Company and the Corporate Trustee have so agreed, the Corporate Trustee shall deliver such bonds of the Ninety-fourth Series to the persons in whose names the bonds of the Ninety-fourth Series are so to be registered.

 

Any endorsement of a Ninety-fourth Series Global Bond to reflect the principal amount thereof, or any increase or decrease in such principal amount, shall be made in such manner and by such person or persons as shall be specified in or pursuant to any applicable letter of representations or other arrangement entered into with, or procedures of, the depositary with respect to such Ninety-fourth Series Global Bond or in a Company request.  Subject to the terms of the Mortgage, the Corporate Trustee shall deliver and redeliver any such Ninety-fourth Series Global Bond in the manner and upon instructions given by the person or persons specified in or pursuant to any applicable letter of representations or other arrangement entered into with, or procedures of, the depositary with respect to such Ninety-fourth Series Global Bond or in any applicable Company request.  If a Company request is so delivered, any instructions by the Company with respect to such Ninety-fourth Series Global Bond contained therein shall be in writing but need not be accompanied by or contained in a Treasurer’s Certificate and need not be accompanied by an opinion of counsel.

 

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The depositary or, if there be one, its nominee, shall be the holder of a Ninety-fourth Series Global Bond for all purposes under the Mortgage and the bonds of the Ninety-fourth Series and beneficial owners with respect to such Ninety-fourth Series Global Bond shall hold their interests pursuant to applicable procedures of such depositary.  The Company, the Corporate Trustee, any bond registrar, any paying agent and any other agent of the Company or the Corporate Trustee shall be entitled to deal with such depositary for all purposes of the Mortgage relating to such Ninety-fourth Series Global Bond (including the payment of principal, the Redemption Price, if applicable, and interest and the giving of instructions or directions by or to the beneficial owners of such Ninety-fourth Series Global Bond as the sole holder of such Ninety-fourth Series Global Bond and shall have no obligations to the beneficial owners thereof (including any direct or indirect participants in such depositary)).  None of the Company, the Corporate Trustee, any paying agent, any bond registrar or any other agent of the Company or the Corporate Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a beneficial owner in or pursuant to any applicable letter of representations or other arrangement or transaction entered into with, or procedures of, the depositary with respect to such Ninety-fourth Series Global Bond or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or for any acts or omissions of a depositary.

 

ARTICLE III

 

CALCULATION AGENT FOR THE BONDS OF THE NINETY-THIRD SERIES

 

SECTION 3.                            (A)  Appointment.  Upon the terms and subject to the conditions contained herein, the Company hereby appoints The Bank of New York Mellon as the Company’s calculation agent for the bonds of the Ninety-third Series (the “Calculation Agent”) and The Bank of New York Mellon hereby accepts such appointment as the Company’s agent for the purpose of calculating the applicable interest rates on the bonds of the Ninety-third Series in accordance with the provisions set forth herein.

 

(B)  Duties and Obligations.  The Calculation Agent shall: (a) calculate the applicable interest rates on the bonds of the Ninety-third Series in accordance with the provisions set forth herein, and (b) exercise due care to determine the interest rates on the bonds of the Ninety-third Series and shall communicate the same to the Company and the Corporate Trustee (if the Corporate Trustee is not then serving as the Calculation Agent) as soon as practicable after each determination.

 

The Calculation Agent will, upon the request of a holder of the bonds of the Ninety-third Series, provide to such Holder the interest rate in effect on the date of such request and, if determined, the interest rate for the next Interest Period (as defined in Section 1(A)).

 

(C)  Terms and Conditions.  The Calculation Agent accepts its obligations set forth herein, upon the terms and subject to the conditions hereof, including the following, to all of which the Company agrees:

 

(i)                                     The Calculation Agent shall be entitled to such compensation as may be agreed upon with the Company for all services rendered by the Calculation Agent, and the Company

 

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promises to pay such compensation and to reimburse the Calculation Agent for the reasonable out-of-pocket expenses (including attorneys’ fees and expenses) incurred by it in connection with the services rendered by it hereunder upon receipt of such invoices as the Company shall reasonably require. The Company also agrees to indemnify the Calculation Agent for, and to hold it harmless against, any and all loss, liability, damage, claim or expense (including the costs and expenses of defending against any claim (regardless of who asserts such claim) of liability) incurred by the Calculation Agent that arises out of or in connection with its accepting appointment as, or acting as, Calculation Agent hereunder, except such as may result from the willful misconduct or gross negligence of the Calculation Agent or any of its agents or employees. Except as provided in the preceding sentence, the Calculation Agent shall incur no liability and shall be indemnified and held harmless by the Company for, or in respect of, any actions taken or suffered to be taken in good faith by the Calculation Agent in reliance upon (a) the written opinion or advice of counsel or (b) written instructions from the Company. The Calculation Agent shall not be liable for any error resulting from the use of or reliance on a source of information used in good faith and with due care to calculate any interest rate hereunder. The provisions of this clause (i) shall survive the payment in full of the bonds of the Ninety-third Series and the resignation or removal of the Calculation Agent.

 

(ii)  In acting under this Eighty-second Supplemental Indenture, the Calculation Agent is acting solely as agent of the Company and does not assume any obligations to or relationship of agency or trust for or with any of the beneficial owners or holders of the bonds of the Ninety-third Series.

 

(iii)  The Calculation Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted to be taken or anything suffered by it in reliance upon the terms of the bonds of the Ninety-third Series or this Eighty-second Supplemental Indenture or any notice, direction, certificate, affidavit, statement or other paper, document or communication reasonably believed by it to be genuine and to have been approved or signed by the proper party or parties.

 

(iv)  The Calculation Agent, its officers, directors, employees and shareholders may become the owners or pledgee of, or acquire any interest in, any bonds of the Ninety-third Series, with the same rights that it or they would have if it were not the Calculation Agent, and may engage or be interested in any financial or other transaction with the Company as freely as if it were not the Calculation Agent.

 

(v)   Neither the Calculation Agent nor its officers, directors, employees, agents or attorneys shall be liable to the Company for any act or omission hereunder, or for any error of judgment made in good faith by it or them, except in the case of its or their willful misconduct or gross negligence.

 

(vi)  The Calculation Agent may consult with counsel of its selection and the advice of such counsel or any opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

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(vii)  The Calculation Agent shall be obligated to perform such duties and only such duties as are herein specifically set forth, and no implied duties or obligations shall be read into this Eighty-second Supplemental Indenture against the Calculation Agent.

 

(viii)  Unless herein otherwise specifically provided, any order, certificate, notice, request, direction or other communication from the Company made or given by it under any provision of this Eighty-second Supplemental Indenture shall be sufficient if signed by any officer of the Company.

 

(ix)  The Calculation Agent may perform any duties hereunder either directly or by or through its agents or attorneys, and the Calculation Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

 

(x)  The Company will not, without first obtaining the prior written consent of the Calculation Agent, make any change to this Eighty-second Supplemental Indenture or the bonds of the Ninety-third Series if such change would materially and adversely affect the Calculation Agent’s duties and obligations hereunder or thereunder.

 

(xi)  In no event shall the Calculation Agent be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether it has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

(xii)  In no event shall the Calculation Agent be responsible or liable for any failure or delay in the performance of its obligations under this Eighty-second Supplemental Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.

 

(xiii)  Under certain circumstances, the Calculation Agent may be required to determine the interest rates on the bonds of the Ninety-third Series on the basis of quotations received from banks or other financial institutions (the “Reference Banks”) selected by the Company for the purpose of quoting such rates. The Calculation Agent shall not be responsible to the Company or any third party for any failure of the Reference Banks to fulfill their duties or meet their obligations as Reference Banks or as a result of the Calculation Agent having acted (except in the event of gross negligence or willful misconduct) on any quotation or other information given by any Reference Bank which subsequently may be found to be incorrect.

 

(D)  Qualifications.  The Calculation Agent shall be authorized by law to perform all the duties imposed upon it by this Eighty-second Supplemental Indenture, and shall at all times have a capitalization of at least $50,000,000.  The Calculation Agent may not be an affiliate of the Company.

 

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(E)  Resignation and Removal.  The Calculation Agent may at any time resign as Calculation Agent by giving written notice to the Company of such intention on its part, specifying the date on which its desired resignation shall become effective; provided, however, that such date shall never be earlier than 45 days after the receipt of such notice by the Company, unless the Company otherwise agrees in writing. The Calculation Agent may be removed at any time by the filing with it of any instrument in writing signed on behalf of the Company and specifying such removal and the date when it is intended to become effective. Such resignation or removal shall take effect upon the date of the appointment by the Company, as hereinafter provided, of a successor Calculation Agent. If within 30 days after notice of resignation or removal has been given, a successor Calculation Agent has not been appointed, the Calculation Agent may, at the expense of the Company, petition a court of competent jurisdiction to appoint a successor Calculation Agent. If at any time the Calculation Agent shall resign or be removed, or be dissolved, or if the property or affairs of the Calculation Agent shall be taken under the control of any state or federal court or administrative body because of bankruptcy or insolvency or for any other reason, then a successor Calculation Agent shall as soon as practicable be appointed by the Company by an instrument in writing filed with the predecessor Calculation Agent, the successor Calculation Agent and the Corporate Trustee. Upon the appointment of a successor Calculation Agent and acceptance by it of such appointment, the Calculation Agent so succeeded shall cease to be such Calculation Agent hereunder. Upon its resignation or removal, the Calculation Agent shall be entitled to the payment by the Company of its compensation, if any is owed to it, for services rendered hereunder and to the reimbursement of all reasonable out-of-pocket expenses (including reasonable counsel fees) incurred in connection with the services rendered by it hereunder and to the payment of all other amounts owed to it hereunder.

 

(F)  Successors.  Any successor Calculation Agent appointed hereunder shall execute and deliver to its predecessor, the Company and the Corporate Trustee an instrument accepting such appointment hereunder, and thereupon such successor Calculation Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of such predecessor with like effect as if originally named as such Calculation Agent hereunder, and such predecessor, upon payment of its charges and disbursements then unpaid, shall thereupon become obliged to transfer and deliver, and such successor Calculation Agent shall be entitled to receive, copies of any relevant records maintained by such predecessor Calculation Agent.

 

(G)  Corporate Trustee Deemed Calculation Agent Upon Certain Circumstances.  In the event that the Calculation Agent shall resign or be removed, or be dissolved, or if the property or affairs of the Calculation Agent shall be taken under the control of any state or federal court or administrative body because of bankruptcy or insolvency or for any other reason, and the Company shall not have made a timely appointment of a successor Calculation Agent, the Corporate Trustee, notwithstanding the provisions of this Article Three, shall be deemed to be the Calculation Agent for all purposes of this Eighty-second Supplemental Indenture until the appointment by the Company of the successor Calculation Agent.

 

(H)  Merger, Conversion, Consolidation, Sale or Transfer.  Any corporation into which the Calculation Agent may be merged or converted, or any corporation with which the Calculation Agent may be consolidated, or any corporation resulting from any merger,

 

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conversion or consolidation to which the Calculation Agent shall be a party or to which the Calculation Agent shall sell or otherwise transfer all or substantially all of its corporate trust assets or business shall, to the extent permitted by applicable law, be the successor Calculation Agent under this Eighty-second Supplemental Indenture without the execution or filing of any paper or any further act on the part of any of the parties hereto. Notice of any such merger, conversion or consolidation or sale shall forthwith be given to the Company and the Corporate Trustee (if the Corporate Trustee is not then serving as the Calculation Agent).

 

(I)  Notice.  Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to be given or furnished to the Calculation Agent shall be delivered in person, sent by letter or fax or communicated by telephone (subject, in the case of communication by telephone, to confirmation dispatched within 24 hours by letter or by fax) as follows:

 

The Bank of New York Mellon

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

10161 Centurion Parkway N., 2nd Floor

Jacksonville, Florida  32256

Telephone:

Fax:  (904) 645-1921

 

or to any other address of which the Calculation Agent shall have notified the Company and the Corporate Trustee (if the Corporate Trustee is not then serving as the Calculation Agent) in writing as herein provided.

 

The Calculation Agent agrees to accept and act upon instructions or directions pursuant to this Eighty-second Supplemental Indenture sent by unsecured e-mail, pdf, facsimile transmission or other similar unsecured electronic methods, provided, however, that the Calculation Agent shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing.  If the Company elects to give the Calculation Agent e-mail or facsimile instructions (or instructions by a similar electronic method) and the Calculation Agent in its discretion elects to act upon such instructions, the Calculation Agent’s understanding of such instructions shall be deemed controlling. The Calculation Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Calculation Agent’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Company agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Calculation Agent including without limitation the risk of the Calculation Agent acting on unauthorized instructions, and the risk of interception and misuse by third parties.

 

(J)  WAIVER OF JURY TRIAL.  EACH OF THE COMPANY, THE CALCULATION AGENT AND THE CORPORATE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO

 

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THIS EIGHTY-SECOND SUPPLEMENTAL INDENTURE, THE BONDS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

(K)  Calculation of Interest Rate for First Interest Period.  The Calculation Agent, at the request of the Company, has determined, prior to the date of execution and delivery of this Eighty-second Supplemental Indenture, the interest rate for the initial Interest Period for the bonds of the Ninety-third Series. In connection with such determination, the Calculation Agent shall be entitled to the same rights, protections, exculpations and immunities otherwise available to it under this Eighty-second Supplemental Indenture.

 

ARTICLE IV

 

DIVIDEND COVENANT

 

SECTION 4.                            The Company covenants and agrees that, so long as any of the bonds of the Ninety-third Series or Ninety-fourth Series remain Outstanding, the Company will not declare or pay any dividends upon its common stock (other than dividends in common stock) or make any other distributions on its common stock or purchase or otherwise retire any shares of its common stock, unless immediately after such declaration, payment, purchase, retirement or distribution (hereinafter in this Section referred to as “Restricted Payments”), and giving effect thereto, the amount arrived at by adding:

 

(a)                                 the aggregate amount of all such Restricted Payments (other than the dividend of fifty cents ($.50) per share declared on December 8, 1948 and paid on February 1, 1949 to holders of common stock) made by the Company during the period from December 31, 1948, to and including the effective date of the Restricted Payment in respect of which the determination is being made, plus

 

(b)                                 an amount equal to the aggregate amount of cumulative dividends for such period (whether or not paid) on all preferred stock of the Company from time to time outstanding during such period, at the rate or rates borne by such preferred stock, plus

 

(c)                                  an amount equal to the amount, if any, by which fifteen per centum (15%) of the Gross Operating Revenues of the Company for such period shall exceed the aggregate amount during such period expended and/or accrued on its books for maintenance and/or appropriated on its books out of income for property retirement, in each case in respect of the Mortgaged and Pledged Property and/or automotive equipment used primarily in the electric utility business of the Company (but excluding any provisions for amortization of any amounts included in utility plant acquisition adjustment accounts or utility plant adjustment accounts),

 

will not exceed the amount of the aggregate net income of the Company for said period available for dividends (computed and ascertained in accordance with sound accounting practice, on a cumulative basis, including the making of proper deductions for any deficits occurring during any part of such period), plus $3,000,000.

 

The Company further covenants and agrees that not later than May 1 of each year beginning with the year 2014 it will furnish to the Corporate Trustee a Treasurer’s Certificate

 

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stating whether or not the Company has fully observed the restrictions imposed upon it by the covenant contained in this Section 4.

 

ARTICLE V

 

CERTAIN PROVISIONS WITH RESPECT TO FUTURE ADVANCES

 

SECTION 5.                            Upon the filing of this Eighty-second Supplemental Indenture for record in all counties in which the Mortgaged and Pledged Property is located, and until a further indenture or indentures supplemental to the Mortgage shall be executed and delivered by the Company to the Trustees pursuant to authorization by the Board of Directors of the Company and filed for record in all counties in which the Mortgaged and Pledged Property is located further increasing or decreasing the amount of future advances which may be secured by the Mortgage, the Mortgage may secure future advances and other indebtedness and sums not to exceed in the aggregate $2,500,000,000, in addition to $5,443,725,000 in aggregate principal amount of bonds to be Outstanding at the time of such filing, and all such advances and other indebtedness and sums shall be secured by the Mortgage, equally, to the same extent and with the same priority, as the amount originally advanced on the security of the Original Mortgage, namely, $46,000,000, and such advances and other indebtedness and sums may be made or become owing and may be repaid and again made or become owing and the amount so stated shall be considered only as the total amount of such advances and other indebtedness and sums as may be outstanding at one time.

 

ARTICLE VI

 

MISCELLANEOUS PROVISIONS

 

SECTION 6.                            Subject to any amendments provided for in this Eighty-second Supplemental Indenture, the terms defined in the Original Mortgage, as heretofore supplemented, shall, for all purposes of this Eighty-second Supplemental Indenture, have the meanings specified in the Original Mortgage, as heretofore supplemented.

 

SECTION 7.                            The Trustees hereby accept the trusts herein declared, provided, created or supplemented and agree to perform the same upon the terms and conditions herein and in the Original Mortgage, as heretofore supplemented, set forth and upon the following terms and conditions:

 

The Trustees shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Eighty-second Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely.  In general each and every term and condition contained in Article XVI of the Original Mortgage, as heretofore supplemented, shall apply to and form part of this Eighty-second Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this Eighty-second Supplemental Indenture.

 

SECTION 8.                            Subject to the provisions of Article XV and Article XVI of the Mortgage, whenever in this Eighty-second Supplemental Indenture either of the parties hereto is named or

 

27

 

referred to, this shall be deemed to include the successors or assigns of such party, and all the covenants and agreements in this Eighty-second Supplemental Indenture contained by or on behalf of the Company or by or on behalf of the Trustees shall bind and inure to the benefit of the respective successors and assigns of such parties whether so expressed or not.

 

SECTION 9.                            Nothing in this Eighty-second Supplemental Indenture, expressed or implied, is intended, or shall be construed, to confer upon, or to give to, any person, firm or corporation, other than the parties hereto and the holders of the Outstanding bonds and coupons, any right, remedy or claim under or by reason of this Eighty-second Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements in this Eighty-second Supplemental Indenture contained by or on behalf of the Company shall be for the sole and exclusive benefit of the parties hereto, and of the holders of the Outstanding bonds and coupons.

 

SECTION 10.                     This Eighty-second Supplemental Indenture shall be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

 

[SIGNATURES ON THE FOLLOWING PAGES]

 

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The laws of South Carolina provide that in any real estate foreclosure proceeding a defendant against whom a personal judgment is taken or asked may within thirty days after the sale of the mortgaged property apply to the court for an order of appraisal.  The statutory appraisal value as approved by the court would be substituted for the high bid and may decrease the amount of any deficiency owing in connection with the transaction.  THE COMPANY HEREBY WAIVES AND RELINQUISHES THE STATUTORY APPRAISAL RIGHTS, WHICH MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED VALUE OF THE MORTGAGED PROPERTY.

 

IN WITNESS WHEREOF, Duke Energy Progress, Inc. has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by its President or one of its Vice Presidents or its Treasurer and its corporate seal to be attested by its Secretary or one of its Assistant Secretaries, and The Bank of New York Mellon has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by one of its Vice Presidents, Senior Associates or Associates and its corporate seal to be attested by one of its Vice Presidents, Senior Associates or Associates, and Tina D. Gonzalez has hereunto set her hand and seal, all as of the day and year first above written.

 

	
 
    	
DUKE ENERGY   PROGRESS, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Stephen G. DeMay
    
	
 
    	
 
    	
Stephen G. De May
    
	
 
    	
 
    	
Vice President and   Treasurer
    
	
 
    	
 
    
	
Executed, sealed and   delivered by DUKE ENERGY PROGRESS, INC. by Stephen G. De May, one of its   Vice Presidents, and attested by Robert T. Lucas III, one of its Assistant   Secretaries, in the presence of:
    	
 
    	
 
    
	
 
    	
ATTEST:
    
	
 
    	
 
    
	
 
    	
/s/ Robert T.   Lucas, III
    
	
 
    	
Robert T. Lucas III
    
	
 
    	
Assistant Secretary
    
	
 
    	
 
    
	
/s/ Delcia Dunlap
    	
 
    	
 
    
	
Delcia S. Dunlap
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Jacqueline Williams
    	
 
    	
 
    
	
Jacqueline Williams
    	
 
    
					

 

[COMPANY’S SIGNATURE PAGE]

 

[EIGHTY-SECOND SUPPLEMENTAL INDENTURE DATED AS OF MARCH 1, 2014

TO THE DUKE ENERGY PROGRESS, INC. MORTGAGE AND DEED OF TRUST

DATED AS OF MAY 1, 1940]

 

 

	
 
    	
THE BANK OF NEW YORK   MELLON,
    
	
 
    	
  as Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Francine Kincaid
    
	
 
    	
 
    	
Francine Kincaid
    
	
 
    	
 
    	
Vice President
    
	
 
    	
 
    
	
Executed, sealed and   delivered
    	
 
    
	
by THE BANK OF NEW YORK
    	
 
    
	
MELLON, as Trustee, by   Francine Kincaid,
    	
 
    
	
one of its Vice   Presidents,
    	
 
    
	
and attested by Latoya S.   Elvin,
    	
 
    
	
one of its Vice   Presidents, in the
    	
 
    
	
presence of:
    	
ATTEST:
    
	
 
    	
 
    
	
 
    	
/s/ Latoya S. Elvin
    
	
 
    	
Latoya S. Elvin
    
	
 
    	
Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Arsala Kidwari
    	
 
    	
 
    
	
Arsala Kidwai
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
./s/ Laurence J. O’Brien
    	
 
    	
 
    
	
Laurence J. O’Brien
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Tina D. Gonzalez
    
	
 
    	
TINA D. GONZALEZ, as Trustee
    
	
 
    	
 
    
	
Executed, sealed and   delivered by TINA
    	
 
    
	
D. GONZALEZ, as Trustee,   in the presence of:
    	
 
    
	
 
    	
 
    
	
/s/ Christie Leppert
    	
 
    	
 
    
	
Christie Leppert
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Geraldine Creswell
    	
 
    	
 
    
	
Geraldine Creswell
    	
 
    

 

[TRUSTEES’ SIGNATURE PAGE]

 

[EIGHTY-SECOND SUPPLEMENTAL INDENTURE DATED AS OF MARCH 1, 2014

TO THE CAROLINA POWER & LIGHT COMPANY MORTGAGE AND DEED OF TRUST

DATED AS OF MAY 1, 1940]

 

 

	
STATE OF NORTH CAROLINA
    	
)
    
	
 
    	
) SS.:
    
	
COUNTY OF MECKLENBURG
    	
)
    

 

This 5th day of March, A.D. 2014, personally came before me, PATRICIA C. ROSS, a Notary Public, STEPHEN G. DE MAY, who, being by me duly sworn, acknowledged before me that he is Vice President and Treasurer of DUKE ENERGY PROGRESS, INC., and that the seal affixed to the foregoing instrument in writing is the corporate seal of said company, and that said writing was signed and sealed by him in behalf of said corporation by its authority duly given.  And the said STEPHEN G. DE MAY acknowledged the said writing to be the act and deed of said corporation.

 

On the 5th day of March, in the year of 2014, before me personally came STEPHEN G. DE MAY, to me known, who, being by me duly sworn, did depose and say that he resides at 2023 Queens Road W, Charlotte, NC  28207-2707; that he is Vice President and Treasurer of DUKE ENERGY PROGRESS, INC., one of the corporations described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order.

 

	
 
    	
/s/ Patricia C. Ross
    
	
 
    	
Patricia C. Ross
    
	
 
    	
NOTARY PUBLIC, State of   North Carolina
    
	
 
    	
Mecklenburg County
    
	
 
    	
My Commission Expires:   October 17, 2014
    

 

	
STATE OF NORTH CAROLINA
    	
)
    
	
 
    	
) SS.:
    
	
COUNTY OF MECKLENBURG
    	
)
    

 

This 5th day March, A.D. 2014, personally came before me, PATRICIA C. ROSS, a Notary Public, ROBERT T. LUCAS III, who, being by me duly sworn, acknowledged before me that he is the Assistant Secretary of DUKE ENERGY PROGRESS, INC., and that the seal affixed to the foregoing instrument in writing is the corporate seal of said company, and that said writing was signed and attested by him on behalf of said corporation by its authority duly given.

 

On the 5th day of March, in the year of 2014, before me personally came ROBERT T. LUCAS III, to me known, who, being by me duly sworn, did depose and say that he resides at 1650 Myers Park Drive, Charlotte, NC  28207; that he is the Assistant Secretary of DUKE ENERGY PROGRESS, INC., one of the corporations described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he signed and attested his name thereto by the authority of the Board of Directors of said corporation.

 

	
 
    	
/s/ Patricia C. Ross
    
	
 
    	
Patricia C. Ross
    
	
 
    	
NOTARY PUBLIC, State of   North Carolina
    
	
 
    	
Mecklenburg County
    
	
 
    	
My Commission Expires:   October 17, 2014
    

 

 

	
STATE OF NEW YORK
    	
)
    
	
 
    	
) SS.:
    
	
COUNTY OF NEW YORK
    	
)
    

 

On March 5, 2014 before me, the undersigned, personally appeared FRANCINE KINCAID, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that she signed the same in her capacity as a Vice President of THE BANK OF NEW YORK MELLON, a New York banking corporation, as Trustee, and that by her signature on the instrument, the individual, or the person upon behalf of which the individual acted, signed the instrument.

 

I, Danny Lee, a Notary Public of the State of New York, certify that FRANCINE KINCAID personally came before me this day and acknowledged that she is a Vice President of THE BANK OF NEW YORK MELLON, a New York banking corporation, as Trustee, and that she, as Vice President, being authorized to do so, signed the foregoing on behalf of the corporation.

 

Witness my hand and official seal, this the 5th day of March, 2014.

 

	
 
    	
/s/ Danny Lee
    
	
 
    	
Danny Lee
    
	
 
    	
Notary Public, State of   New York
    
	
 
    	
No. 01LE6161129
    
	
 
    	
Qualified   in New York County
    
	
 
    	
Commission   Expires February 20, 2015
    

 

	
STATE OF NEW YORK
    	
)
    
	
 
    	
) SS.:
    
	
COUNTY OF NEW YORK
    	
)
    

 

On March 5, 2014 before me, the undersigned, personally appeared LATOYA S. ELVIN, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that she signed and attested the same in her capacity as a Vice President of THE BANK OF NEW YORK MELLON, a New York banking corporation, as Trustee, and that by her signature on the instrument, the individual, or the person upon behalf of which the individual acted, signed and attested the instrument.

 

I, Danny Lee, a Notary Public of the State of New York, certify that LATOYA S. ELVIN personally came before me this day and acknowledged that she is a Vice President of THE BANK OF NEW YORK MELLON, a New York banking corporation, as Trustee, and that she, as Vice President, being authorized to do so, signed and attested the foregoing on behalf of the corporation.

 

Witness my hand and official seal, this the 5th day of March, 2014.

 

	
 
    	
/s/ Danny Lee
    
	
 
    	
Danny Lee
    
	
 
    	
Notary Public, State of   New York
    
	
 
    	
No. 01LE6161129
    
	
 
    	
Qualified   in New York County
    
	
 
    	
Commission   Expires February 20, 2015
    

 

 

	
STATE OF FLORIDA
    	
)
    
	
 
    	
) SS.:
    
	
COUNTY OF DUVAL
    	
)
    

 

On March 5, 2014 before me, the undersigned, personally appeared TINA D. GONZALEZ, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her capacity as successor Individual Trustee, and that by her signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

 

I, Lillie C. Mariano, a Notary Public of the State of Florida, do hereby certify that TINA D. GONZALEZ, as successor Individual Trustee, personally appeared before me this day and acknowledged the due execution of the foregoing instrument.

 

Witness my hand and official seal, this the 5th of March, 2014.

 

	
 
    	
/s/ Lillie C. Mariano
    
	
 
    	
Lillie C. Mariano
    
	
 
    	
Notary Public, State of   Florida
    
	
 
    	
No. EE848169
    
	
 
    	
Commission Expires:   October 31, 2016
    

 

 

THIS SECURITY IS A NINETY-FOURTH SERIES GLOBAL BOND WITHIN THE MEANING OF THE MORTGAGE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE MORTGAGE.

 

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

 

THIS FIRST MORTGAGE BOND, 4.375% SERIES DUE 2044 MAY, UNDER CONDITIONS PROVIDED IN THE MORTGAGE, BE EXCHANGED FOR FIRST MORTGAGE BONDS, 4.375% SERIES DUE 2044 IN THE FORM OF DEFINITIVE CERTIFICATES OF LIKE TENOR AND OF AN EQUAL AGGREGATE PRINCIPAL AMOUNT, IN AUTHORIZED DENOMINATIONS, REGISTERED IN THE NAMES OF SUCH PERSONS AS THE DEPOSITARY SHALL INSTRUCT THE CORPORATE TRUSTEE. ANY SUCH EXCHANGE SHALL BE MADE UPON RECEIPT BY THE CORPORATE TRUSTEE OF A REQUEST BY DUKE ENERGY PROGRESS, INC. THEREFOR AND A WRITTEN INSTRUCTION FROM THE DEPOSITARY SETTING FORTH THE NAME OR NAMES IN WHICH THE CORPORATE TRUSTEE IS TO REGISTER SUCH FIRST MORTGAGE BONDS, 4.375% SERIES DUE 2044 IN THE FORM OF DEFINITIVE CERTIFICATES.

 

	
REGISTERED   BOND
    	
CUSIP:  26442R AB7
    

 

DUKE ENERGY PROGRESS, INC.

 

First Mortgage Bond,

4.375% Series due 2044

 

	
No. R-1
    	
$400,000,000
    

 

 

DUKE ENERGY PROGRESS, INC., a corporation of the State of North Carolina (the “Company”), for value received, hereby promises to pay to

 

Cede & Co.

 

or registered assigns, at the office or agency of the Company in the Borough of Manhattan, The City of New York,

 

FOUR HUNDRED MILLION DOLLARS ($400,000,000)

 

on March 30, 2044, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts, and to pay to the registered owner hereof interest thereon from March 6, 2014, if the date of this bond is on or prior to September 30, 2014, or, if the date of this bond is after September 30, 2014, from the March 30 or September 30 next preceding the date of this bond, at the rate of 4.375% per annum (with interest on overdue principal and overdue installments of interest payable in accordance with the terms of the Mortgage (as hereinafter defined)) in like coin or currency semi-annually at said office or agency, on March 30 and September 30 in each year until the principal of this bond shall have become due and payable (each an “Interest Payment Date”).  If the date of this bond is on or prior to September 30, 2014, such payments shall commence on September 30, 2014.

 

Any interest on this bond which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the person in whose name this bond (or one or more predecessor bonds) is registered at the close of business on the tenth calendar day next preceding such Interest Payment Date (i.e., March 20 and September 20, respectively) (each a “Regular Record Date”), provided, however, that so long as this bond is registered in the name of The Depository Trust Company, a New York corporation, its nominee or a successor depositary, the Regular Record Date shall be the close of business on the business day (as defined in the Eighty-second Supplemental Indenture mentioned below) immediately preceding such Interest Payment Date.

 

Any interest on this bond which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease to be payable to the registered holder on the relevant Regular Record Date solely by virtue of such holder having been such holder; and such interest, together with any interest thereon as provided in the Mortgage (collectively, “Defaulted Interest”), may be paid by the Company, at its election in each case, as provided in Subsection A or B below:

 

A.                                    The Company may elect to make payment of any Defaulted Interest on the bonds of this series (as defined below) to the persons in whose names such bonds (or their respective predecessor bonds) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner (a “Special Record Date”).  The Company shall notify the Corporate Trustee referred to below in writing of the amount of Defaulted Interest proposed to be paid on each bond and the date of the proposed payment (which date shall be such as will enable the Corporate Trustee to comply with the next two sentences hereof), and at the same time the

 

2

 

Company shall deposit with the Corporate Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Corporate Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Interest as in this Subsection provided and not to be deemed otherwise part of the trust estate or trust moneys.  Thereupon the Corporate Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Corporate Trustee of the notice of the proposed payment.  The Corporate Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each holder of a bond of this series at such holder’s address as it appears in the bond register not less than 10 days prior to such Special Record Date.  The Corporate Trustee may, in its discretion in the name and at the expense of the Company, cause a similar notice to be published at least once in a newspaper approved by the Company in each place of payment of the bonds of this series, but such publication shall not be a condition precedent to the establishment of such Special Record Date.  Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the persons in whose names the bonds of this series (or their respective predecessor bonds) are registered on such Special Record Date and shall no longer be payable pursuant to the following Subsection B.

 

B.                                    The Company may make payment of any Defaulted Interest on the bonds of this series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such bonds may be listed and upon such notice as may be required by such exchange, if, after notice given by the Company to the Corporate Trustee of the proposed payment pursuant to this Subsection, such payment shall be deemed practicable by the Corporate Trustee.

 

Subject to the foregoing, each bond of this series delivered under the Mortgage hereinafter mentioned upon transfer of or in exchange for or in lieu of any other bond of this series shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other bond.

 

This bond is one of an issue of bonds of the Company issuable in series and is one of a series known as its First Mortgage Bonds, 4.375% Series due 2044 (the “bonds of this series”), all bonds of all series issued and to be issued under and equally secured (except in so far as any sinking fund or other fund, established in accordance with the provisions of the Mortgage hereinafter mentioned, may afford additional security for the bonds of any particular series) by a Mortgage and Deed of Trust (together with any indenture supplemental thereto, including the Eighty-second Supplemental Indenture, dated as of March 1, 2014, the “Mortgage”), dated as of May 1, 1940, executed by the Company to The Bank of New York Mellon (formerly Irving Trust Company), as Corporate Trustee, and Tina D. Gonzalez (successor to Frederick G. Herbst), as

 

3

 

Individual Trustee.  Reference is made to the Mortgage for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds and of the Trustees in respect thereof, the duties and immunities of the Trustees and the terms and conditions upon which the bonds are and are to be secured and the circumstances under which additional bonds may be issued.  With the consent of the Company and to the extent permitted by and as provided in the Mortgage, the rights and obligations of the Company and/or the rights of the holders of the bonds and/or coupons and/or the terms and provisions of the Mortgage may be modified or altered by affirmative vote of the holders of at least 66 2/3% in principal amount of the bonds then outstanding under the Mortgage and, if the rights of one or more, but less than all, series of bonds then outstanding are to be affected, then also by affirmative vote of the holders of at least 66 2/3% in principal amount of the bonds then outstanding of each series of bonds so to be affected (excluding in any case bonds disqualified from voting by reason of the Company’s interest therein as provided in the Mortgage); provided that, without the consent of the holder hereof, no such modification or alteration, among other things, shall impair or affect the right of the holder to receive payment of the principal of and interest on this bond, on or after the respective due dates expressed herein, or permit the creation of any lien equal or prior to the lien of the Mortgage or deprive the holder of a lien on the mortgaged and pledged property.

 

The principal hereof may be declared or may become due prior to the maturity date hereinbefore named on the conditions, in the manner and at the time set forth in the Mortgage, upon the occurrence of a default as in the Mortgage provided.

 

This bond is transferable as prescribed in the Mortgage by the registered owner hereof in person, or by his duly authorized attorney, at the office or agency of the Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this bond, and thereupon a new fully registered temporary or definitive bond of the same series for a like principal amount will be issued to the transferee in exchange herefor as provided in the Mortgage.  The Company and the Trustees may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes.

 

In the manner prescribed in the Mortgage, any bonds of this series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, The City of New York, are exchangeable for a like aggregate principal amount of bonds of the same series of other authorized denominations.

 

At any time on or after September 30, 2043, the bonds of this series shall be redeemable at the option of the Company, in whole or in part and from time to time, prior to maturity, upon notice as provided in the Mortgage (given by mail not less than 30 days and not more than 90 days prior to the date fixed for redemption), at a redemption price equal to 100% of the principal amount of the bonds then outstanding to be redeemed, plus in each case accrued interest on such principal amount to such date fixed for redemption.  At any time prior to September 30, 2043, the bonds of this series shall be redeemable at the option of the Company, in whole or in part and from time to time, upon notice as provided in the Mortgage (given by mail not less than 30 days and not more than 90 days prior to the date fixed for redemption (together with the date fixed for redemption referred to in the preceding sentence, each a “Redemption Date”)), at a redemption

 

4

 

price (together with the redemption price referred to in the preceding sentence, each a “Redemption Price”) equal to the greater of (i) 100% of the principal amount of the bonds then outstanding to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on such bonds from the Redemption Date to the maturity date, computed by discounting such payments, in each case, to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Eighty-second Supplemental Indenture mentioned above) plus 15 basis points, plus in either case accrued but unpaid interest on such principal amount to the Redemption Date.  On and after any Redemption Date, if sufficient cash shall have been deposited with Corporate Trustee (and/or if the Company has irrevocably directed the Corporate Trustee to apply, from moneys held by it available to be used for the redemption of bonds, sufficient cash) to redeem all of the bonds of this series called for redemption, interest on the bonds of this series, or the portions of them so called for redemption, shall cease to accrue.  Reference is made to said Eighty-second Supplemental Indenture for the full terms of the redemption provisions applicable to the bonds of this series.

 

No recourse shall be had for the payment of the principal or any Redemption Price of or interest on this bond against any incorporator or any past, present or future subscriber to the capital stock, stockholder, officer or director of the Company or of any predecessor or successor corporation, as such, either directly or through the Company or any predecessor or successor corporation, under any rule of law, statute or constitution or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders, officers and directors being released by the holder or owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the Mortgage.

 

This bond shall not become obligatory until The Bank of New York Mellon (formerly Irving Trust Company), the Corporate Trustee under the Mortgage, or its successor thereunder, shall have signed the form of certificate endorsed hereon.

 

[Signature Page Follows]

 

5

 

IN WITNESS WHEREOF, DUKE ENERGY PROGRESS, INC. has caused this bond to be signed in its corporate name with the manual or facsimile signature of its President or one of its Vice Presidents and its corporate seal to be impressed or imprinted hereon and attested by its Secretary or one of its Assistant Secretaries.

 

 

	
 
    	
DUKE   ENERGY PROGRESS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
DATED:   March 6, 2014
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Stephen   G. De May
    
	
 
    	
 
    	
Vice   President and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
ATTEST:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Robert   T. Lucas III
    	
 
    
	
Assistant   Secretary
    	
 
    
				

 

 

CORPORATE TRUSTEE’S CERTIFICATE

 

This bond is one of the bonds, of the series herein designated, described or provided for in the within-mentioned Mortgage.

 

 

	
 
    	
THE   BANK OF NEW YORK MELLON, Corporate Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Officer
    

 

 

THIS SECURITY IS A NINETY-THIRD SERIES GLOBAL BOND WITHIN THE MEANING OF THE MORTGAGE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE MORTGAGE.

 

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

 

THIS FIRST MORTGAGE BOND, FLOATING RATE SERIES, DUE 2017 MAY, UNDER CONDITIONS PROVIDED IN THE MORTGAGE, BE EXCHANGED FOR FIRST MORTGAGE BONDS, FLOATING RATE SERIES, DUE 2017 IN THE FORM OF DEFINITIVE CERTIFICATES OF LIKE TENOR AND OF AN EQUAL AGGREGATE PRINCIPAL AMOUNT, IN AUTHORIZED DENOMINATIONS, REGISTERED IN THE NAMES OF SUCH PERSONS AS THE DEPOSITARY SHALL INSTRUCT THE CORPORATE TRUSTEE. ANY SUCH EXCHANGE SHALL BE MADE UPON RECEIPT BY THE CORPORATE TRUSTEE OF A REQUEST BY DUKE ENERGY PROGRESS, INC. THEREFOR AND A WRITTEN INSTRUCTION FROM THE DEPOSITARY SETTING FORTH THE NAME OR NAMES IN WHICH THE CORPORATE TRUSTEE IS TO REGISTER SUCH FIRST MORTGAGE BONDS, FLOATING RATE SERIES, DUE 2017 IN THE FORM OF DEFINITIVE CERTIFICATES.

 

	
REGISTERED   BOND
    	
CUSIP:  26442R AA9
    

 

DUKE ENERGY PROGRESS, INC.

 

First Mortgage Bond,

Floating Rate Series, due 2017

 

	
No. R-1
    	
$250,000,000
    

 

 

DUKE ENERGY PROGRESS, INC., a corporation of the State of North Carolina (the “Company”), for value received, hereby promises to pay to

 

Cede & Co.

 

or registered assigns, at the office or agency of the Company in the Borough of Manhattan, The City of New York,

 

TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000)

 

on March 6, 2017 (the “Stated Maturity”), in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts, and to pay to the registered owner hereof interest thereon from March 6, 2014 or the last date to which interest has been paid or duly provided for at the rates set quarterly pursuant to this bond, payable quarterly in arrears on the sixth day of March, June, September and December of each year, commencing June 6, 2014 (each such date being an “Interest Payment Date” for this bond; provided, however, in the event that any Interest Payment Date for this bond (other than the Interest Payment Date that is the Stated Maturity of the principal of this bond) would otherwise be a day that is not a Business Day, such Interest Payment Date will be postponed to the next succeeding Business Day).  Interest on this bond shall be computed on the basis of the actual number of days elapsed over a 360-day year.  The term “Business Day” means any day other than a Saturday or Sunday or day on which banking institutions in The City of New York are required or authorized to close.

 

This bond will bear interest for each quarterly Interest Period at a per annum rate determined by the Calculation Agent.  The interest rate applicable during each quarterly Interest Period will be equal to LIBOR on the Interest Determination Date for such Interest Period plus 20 basis points.  Promptly upon such determination, the Calculation Agent will notify the Company and the Corporate Trustee referred to below, if the Corporate Trustee is not then serving as the Calculation Agent, of the interest rate for the new Interest Period.  The interest rate determined by the Calculation Agent, absent manifest error, shall be binding and conclusive upon the beneficial owners and holders of this bond, the Company and the Corporate Trustee.

 

Upon the request of the holder of this bond, the Calculation Agent will provide to such holder the interest rate in effect on the date of such request and, if determined, the interest rate for the next Interest Period.

 

The accrued interest on this bond for any period is calculated by multiplying the principal amount of this bond by an accrued interest factor.  The accrued interest factor is computed by adding the interest factor calculated for each day in the period for which accrued interest is being calculated.  The interest factor (expressed as a decimal rounded upwards if necessary) is computed by dividing the interest rate (expressed as a decimal rounded upwards if necessary) applicable to such date by 360.

 

All percentages resulting from any calculation of the interest rate on this bond will be rounded, if necessary, to the nearest one-hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 0.567845% (or .00567845) being

 

2

 

rounded to 0.56785% (or .0056785) and 0.567844% (or .00567844) being rounded to 0.56784% (or .0056784)), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upwards).

 

For purposes of this bond, except as otherwise expressly provided or unless the context otherwise requires:

 

“Calculation Agent” means The Bank of New York Mellon, as appointed pursuant to Section 3(A) of the Eighty-second Supplemental Indenture referred to below, or its successor appointed by the Company pursuant to Article Three thereof, acting as calculation agent.

 

“Interest Determination Date” means the second London Business Day immediately preceding the first day of the relevant Interest Period.

 

“Interest Period” means the period commencing on an Interest Payment Date for this bond (or, with respect to the initial Interest Period only, commencing on the original issue date for this bond) and ending on the day before the next succeeding Interest Payment Date for this bond.

 

“LIBOR” means, with respect to any Interest Period, the rate (expressed as a percentage per annum) for deposits in U.S. dollars for a three-month period commencing on the first day of that Interest Period and ending on the next Interest Payment Date for this bond that appears on Reuters LIBOR01 Page as of 11:00 a.m. (London time) on the Interest Determination Date for that Interest Period. If such rate does not appear on the Reuters LIBOR01 Page as of 11:00 a.m. (London time) on the Interest Determination Date for that Interest Period, LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars for the Interest Period and in a principal amount of not less than $1,000,000 are offered to prime banks in the London interbank market by four major banks in the London interbank market, which may include affiliates of one or more of the underwriters of this bond, selected by the Company, at approximately 11:00 a.m., London time, on the Interest Determination Date for that Interest Period. The Company will request the principal London office of each such bank to provide a quotation of its rate to the Calculation Agent. If at least two such quotations are provided, LIBOR with respect to that Interest Period will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR with respect to that Interest Period will be the arithmetic mean of the rates quoted by three major banks in New York City, which may include affiliates of one or more of the underwriters of the bonds of this series (as defined below), selected by the Company, at approximately 11:00 a.m., New York City time, on the Interest Determination Date for that Interest Period for loans in U.S. dollars to leading European banks for that Interest Period and in a principal amount of not less than $1,000,000. However, if fewer than three banks selected by the Company to provide quotations are quoting as described above, LIBOR for that Interest Period will be the same as LIBOR as determined for the previous Interest Period.

 

“London Business Day” means a day that is a Business Day and a day on which dealings in deposits in U.S. dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market.

 

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“Reuters LIBOR01 Page” means the display designated as Reuters LIBOR01 on the Reuters 3000 Xtra (or such other page as may replace the Reuters LIBOR01 Page on that service, or such other service as may be nominated for the purpose of displaying rates or prices comparable to the London Interbank Offered rate for U.S. dollar deposits by ICE Benchmark Administration Limited (“IBA”) or its successor or such other entity assuming the responsibility of IBA or its successor in calculating the London Interbank Offered rate in the event IBA or its successor no longer does so).

 

Any interest on this bond which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the person in whose name this bond (or one or more predecessor bonds) is registered at the close of business on the tenth calendar day next preceding such Interest Payment Date (each a “Regular Record Date”), provided, however, that so long as this bond is registered in the name of The Depository Trust Company, a New York corporation, its nominee or a successor depositary, the Regular Record Date shall be the close of business on the business day (as defined in the Eighty-second Supplemental Indenture mentioned below) immediately preceding such Interest Payment Date.

 

Any interest on this bond which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease to be payable to the registered holder on the relevant Regular Record Date solely by virtue of such holder having been such holder; and such interest, together with any interest thereon as provided in the Mortgage (collectively, “Defaulted Interest”), may be paid by the Company, at its election in each case, as provided in Subsection A or B below:

 

A.                                    The Company may elect to make payment of any Defaulted Interest on the bonds of this series to the persons in whose names such bonds (or their respective predecessor bonds) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner (a “Special Record Date”).  The Company shall notify the Corporate Trustee referred to below in writing of the amount of Defaulted Interest proposed to be paid on each bond and the date of the proposed payment (which date shall be such as will enable the Corporate Trustee to comply with the next two sentences hereof), and at the same time the Company shall deposit with the Corporate Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Corporate Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Interest as in this Subsection provided and not to be deemed otherwise part of the trust estate or trust moneys.  Thereupon the Corporate Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Corporate Trustee of the notice of the proposed payment.  The Corporate Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date

 

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therefor to be mailed, first-class postage prepaid, to each holder of a bond of this series at such holder’s address as it appears in the bond register not less than 10 days prior to such Special Record Date.  The Corporate Trustee may, in its discretion in the name and at the expense of the Company, cause a similar notice to be published at least once in a newspaper approved by the Company in each place of payment of the bonds of this series, but such publication shall not be a condition precedent to the establishment of such Special Record Date.  Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the persons in whose names the bonds of this series (or their respective predecessor bonds) are registered on such Special Record Date and shall no longer be payable pursuant to the following Subsection B.

 

B.                                    The Company may make payment of any Defaulted Interest on the bonds of this series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such bonds may be listed and upon such notice as may be required by such exchange, if, after notice given by the Company to the Corporate Trustee of the proposed payment pursuant to this Subsection, such payment shall be deemed practicable by the Corporate Trustee.

 

Subject to the foregoing, each bond of this series delivered under the Mortgage hereinafter mentioned upon transfer of or in exchange for or in lieu of any other bond of this series shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other bond.

 

This bond is one of an issue of bonds of the Company issuable in series and is one of a series known as its First Mortgage Bonds, Floating Rate Series, due 2017 (the “bonds of this series”), all bonds of all series issued and to be issued under and equally secured (except in so far as any sinking fund or other fund, established in accordance with the provisions of the Mortgage hereinafter mentioned, may afford additional security for the bonds of any particular series) by a Mortgage and Deed of Trust (together with any indenture supplemental thereto, including the Eighty-second Supplemental Indenture, dated as of March 1, 2014, the “Mortgage”), dated as of May 1, 1940, executed by the Company to The Bank of New York Mellon (formerly Irving Trust Company), as Corporate Trustee, and Tina D. Gonzalez (successor to Frederick G. Herbst), as Individual Trustee.  Reference is made to the Mortgage for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds and of the Trustees in respect thereof, the duties and immunities of the Trustees and the terms and conditions upon which the bonds are and are to be secured and the circumstances under which additional bonds may be issued.  With the consent of the Company and to the extent permitted by and as provided in the Mortgage, the rights and obligations of the Company and/or the rights of the holders of the bonds and/or coupons and/or the terms and provisions of the Mortgage may be modified or altered by affirmative vote of the holders of at least 66 2/3% in principal amount of the bonds then outstanding under the Mortgage and, if the rights of one or more, but less than all, series of bonds then outstanding are to be affected, then also by affirmative vote of the holders of at least 66 2/3% in principal amount of the bonds then outstanding of each series of bonds so to be affected (excluding in any case bonds disqualified from voting by reason of the Company’s interest therein as provided in the Mortgage); provided

 

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that, without the consent of the holder hereof, no such modification or alteration, among other things, shall impair or affect the right of the holder to receive payment of the principal of and interest on this bond, on or after the respective due dates expressed herein, or permit the creation of any lien equal or prior to the lien of the Mortgage or deprive the holder of a lien on the mortgaged and pledged property.

 

The principal hereof may be declared or may become due prior to the maturity date hereinbefore named on the conditions, in the manner and at the time set forth in the Mortgage, upon the occurrence of a default as in the Mortgage provided.

 

This bond is transferable as prescribed in the Mortgage by the registered owner hereof in person, or by his duly authorized attorney, at the office or agency of the Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this bond, and thereupon a new fully registered temporary or definitive bond of the same series for a like principal amount will be issued to the transferee in exchange herefor as provided in the Mortgage.  The Company and the Trustees may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes.

 

In the manner prescribed in the Mortgage, any bonds of this series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, The City of New York, are exchangeable for a like aggregate principal amount of bonds of the same series of other authorized denominations.

 

The bonds of this series shall not be redeemable prior to their maturity.

 

No recourse shall be had for the payment of the principal or interest on this bond against any incorporator or any past, present or future subscriber to the capital stock, stockholder, officer or director of the Company or of any predecessor or successor corporation, as such, either directly or through the Company or any predecessor or successor corporation, under any rule of law, statute or constitution or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders, officers and directors being released by the holder or owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the Mortgage.

 

This bond shall not become obligatory until The Bank of New York Mellon (formerly Irving Trust Company), the Corporate Trustee under the Mortgage, or its successor thereunder, shall have signed the form of certificate endorsed hereon.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, DUKE ENERGY PROGRESS, INC. has caused this bond to be signed in its corporate name with the manual or facsimile signature of its President or one of its Vice Presidents and its corporate seal to be impressed or imprinted hereon and attested by its Secretary or one of its Assistant Secretaries.

 

 

	
 
    	
DUKE   ENERGY PROGRESS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
DATED:   March 6, 2014
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Stephen   G. De May
    
	
 
    	
 
    	
Vice   President and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
ATTEST:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Robert   T. Lucas III
    	
 
    
	
Assistant   Secretary
    	
 
    
				

 

 

CORPORATE TRUSTEE’S CERTIFICATE

 

This bond is one of the bonds, of the series herein designated, described or provided for in the within-mentioned Mortgage.

 

 

	
 
    	
THE   BANK OF NEW YORK MELLON, Corporate Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   OfficerExhibit 10.1

 

GREEN MOUNTAIN COFFEE ROASTERS, INC.
 2014 OMNIBUS INCENTIVE PLAN

 

1.                                      DEFINED TERMS

 

Exhibit A, which is incorporated by reference, defines the terms used in the Plan and sets forth certain operational rules related to those terms.

 

2.                                      PURPOSE

 

The Plan has been established to advance the interests of the Company and its stockholders by providing for the grant of Stock-based and other incentive Awards to those individuals described in Section 5 who contribute significantly to the strategic and performance objectives and growth of the Company.  The Plan replaces the 2006 Incentive Plan and the STIP, and, from and after the Effective Date, no new grants of awards may be made under the 2006 Incentive Plan or the STIP.

 

3.                                      ADMINISTRATION

 

The Administrator has discretionary authority, subject only to the express provisions of the Plan, to interpret the Plan; determine eligibility for and grant Awards; determine, modify or waive the terms and conditions of any Award; determine the form of settlement of Awards; prescribe forms, rules and procedures (which it may modify or waive) relating to the Plan, including (but not limited to) rules relating to sub-plans established for the purposes of satisfying applicable foreign laws, rules or regulations or qualifying for favorable tax treatment under foreign laws; and otherwise do all things necessary or appropriate to carry out the purposes of the Plan.  Determinations of the Administrator made under the Plan will be conclusive and will bind all parties.

 

4.                                      LIMITS ON AWARDS UNDER THE PLAN

 

(a)                                 Number of Shares; No Share Recycling.  Subject to adjustment as provided in Section 7, the maximum aggregate number of shares of Stock that may be delivered in satisfaction of Awards under the Plan is 8,000,000 (the “Fungible Pool Limit”), which includes 4,185,605 shares that, as of the Effective Date, are available for grant under the 2006 Incentive Plan that are hereby transferred to the Plan, and up to 1,661,205 shares, if any, that may become available for grant under the 2006 Incentive Plan after the Effective Date as a result of the forfeiture, expiration or cancellation of awards under the 2006 Incentive Plan.  Each share of Stock issued or to be issued in connection with any Award that is not a Stock Option or SAR shall be counted against the Fungible Pool Limit as 1.704 Fungible Pool Units. Stock Options and SARs shall be counted against the Fungible Pool Limit as one (1.0) Fungible Pool Unit. Up to the total number of shares available for awards to employee Participants may be issued in satisfaction of ISOs, but nothing in this Section 4(a) will be construed as requiring that any, or any fixed number of, ISOs be awarded under the Plan.  For purposes of this Section 4(a), the number of shares of Stock delivered in satisfaction of Awards will be determined (i) net of shares of Stock underlying the portion of any Award that is settled in cash or the portion of any Award that expires, terminates or is forfeited prior to the issuance of Stock thereunder, (ii) by treating as having been delivered the full number of shares covered by any portion of an Award that is 

 

 

settled in Stock (and not only the number of shares of Stock delivered in settlement) and (iii) by treating as having been delivered any shares withheld from an Award to satisfy the tax withholding obligations with respect to such Award or in payment of the exercise price of an Award requiring exercise.  In addition, shares of Stock that have been repurchased by the Company with proceeds obtained in connection with the exercise of outstanding Awards shall not be added into the pool of available shares. Any shares of Stock that again become available for grant pursuant to this Section 4(a) shall be added back to the pool of available shares.

 

(b)                                 Type of Shares.  Stock delivered by the Company under the Plan may be authorized but unissued Stock or previously issued Stock acquired by the Company and held in treasury.  No fractional shares of Stock will be delivered under the Plan.

 

(c)                                  Section 162(m) Limits.  The following additional limits will apply to Awards granted, or in the case of Cash Awards, payable to any person in any calendar year:

 

(1)                                 Awards other than Cash Awards:  1,000,000 shares of Stock.

 

(2)                                 Cash Awards:  $6,000,000.

 

In applying the foregoing limits, (i) all Awards of the specified type granted (or in the case of Cash Awards, payable) to the same person in the same calendar year will be aggregated and made subject to one limit; (ii) the share limit under clause (1) refers to the number of shares of Stock subject to those Awards.  The foregoing provisions will be construed in a manner consistent with Section 162(m), including, without limitation, where applicable, the rules under Section 162(m) pertaining to permissible deferrals of exempt awards.

 

5.                                      ELIGIBILITY AND PARTICIPATION

 

The Administrator will select Participants from among Employees and directors of, and consultants and advisors to, the Company and its Affiliates.  Eligibility for ISOs is limited to individuals described in the first sentence of this Section 5 who are employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code.  Eligibility for Stock Options other than ISOs is limited to individuals described in the first sentence of this Section 5 who are providing direct services on the date of grant of the Stock Option to the Company or to a subsidiary of the Company that would be described in the first sentence of U.S. Treasury Regulations (“Treasury Regulations”) Section §1.409A-1(b)(5)(iii)(E).

 

6.                                      RULES APPLICABLE TO AWARDS

 

(a)                                 All Awards.

 

(1)                                 Award Provisions.  The Administrator will determine the terms of all Awards, subject to the limitations provided herein.  By accepting (or, under such rules as the Administrator may prescribe, being deemed to have accepted) an Award, the Participant will be deemed to have agreed to the terms of the Award and the Plan.  Notwithstanding any provision of this Plan to the contrary, awards of an acquired company that are converted, replaced or 

 

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adjusted in connection with the acquisition may contain terms and conditions that are inconsistent with the terms and conditions specified herein, as determined by the Administrator.

 

(2)                                 Term of Plan.  No Awards may be made after ten years from the Date of Adoption, but previously granted Awards may continue beyond that date in accordance with their terms.

 

(3)                                 Transferability.  Neither ISOs nor, except as the Administrator otherwise expressly provides in accordance with the second sentence of this Section 6(a)(3), other Awards may be transferred other than by will or by the laws of descent and distribution.  During a Participant’s lifetime, ISOs (and, except as the Administrator otherwise expressly provides in accordance with the second sentence of this Section 6(a)(3), SARs and NSOs) may be exercised only by the Participant.  The Administrator may permit the gratuitous transfer (i.e., transfer not for value) of Awards other than ISOs to any transferee eligible to be covered by the provisions of Form S-8 (under the Securities Act of 1933), subject to such limitations as the Administrator may impose.

 

(4)                                 Vesting, etc.  The Administrator will determine the time or times at which an Award will vest or become exercisable and the terms on which a Stock Option or SAR will remain exercisable.  Without limiting the foregoing, the Administrator may at any time accelerate the vesting or exercisability of an Award, regardless of any adverse or potentially adverse tax or other consequences resulting from such acceleration.  Unless the Administrator expressly provides otherwise, however, the following rules will apply if a Participant’s Employment ceases:

 

(A)                               Immediately upon the cessation of the Participant’s Employment and except as provided in (B) and (C) below, each Stock Option and SAR that is then held by the Participant or by the Participant’s permitted transferees, if any, will cease to be exercisable and will terminate and all other Awards that are then held by the Participant or by the Participant’s permitted transferees, if any, to the extent not already vested will be forfeited.

 

(B)                               Subject to (C) and (D) below, all Stock Options and SARs held by the Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment, to the extent then exercisable, will remain exercisable for the lesser of (i) a period of ninety (90) days or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

 

(C)                               All Stock Options and SARs held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the Participant’s death, to the extent then exercisable, will remain exercisable for the lesser of (i) the one year period ending with the first anniversary of the Participant’s death or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

 

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(D)                               All Stock Options and SARs (whether or not exercisable) held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment will immediately terminate upon such cessation of Employment if the termination is for Cause or occurs in circumstances that in the sole determination of the Administrator would have constituted grounds for the Participant’s Employment to be terminated for Cause.

 

(5)                                 Additional Restrictions.

 

(A)                               The Administrator may cancel, rescind, withhold or otherwise limit or restrict any Award at any time if the Participant is not in compliance with all applicable provisions of the Award agreement and the Plan, if the Participant breaches any agreement with the Company or its Affiliates with respect to non-competition, non-solicitation or confidentiality, if any activity occurs that results in termination of the Participant’s Employment for Cause, or if there is a violation of any material rule or policy of the Company or other egregious or materially harmful conduct by the Participant that is detrimental to the business or reputation of the Company or its Subsidiaries, as determined in the sole discretion of the Administrator.  Without limiting the generality of the foregoing, the Administrator may recover Awards made under the Plan and payments under or gain in respect of any Award to the extent required to comply with Section 10D of the Securities Exchange Act of 1934, as amended, or any stock exchange or similar rule or company policy adopted to under said Section.  In addition, rights, payments and benefits under any Award shall be subject to repayment to, or recoupment through any clawback policy by, the Company in accordance with such policies and procedures as the Administrator may adopt from time to time.

 

(B)                               If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, if the Participant knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the Participant is one of the individuals subject to Section 304 of the Sarbanes-Oxley Act of 2002 (and not otherwise exempted), the Participant shall reimburse the Company the amount of any payment in settlement of an Award earned or accrued during the twelve-month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document not in material compliance with such financial reporting requirement.

 

(6)                                 Taxes.  The delivery, vesting and retention of Stock, cash or other property under an Award are conditioned upon full satisfaction by the Participant of all tax withholding requirements with respect to the Award.  The Administrator will prescribe such rules for the withholding of federal, state and local taxes, including social security and Medicare withholding tax (or corresponding or other taxes under applicable laws in non-U.S. jurisdictions) as it deems necessary.  In satisfaction of tax withholding requirements, the Administrator may, but need not, hold back shares of Stock from an Award or permit a Participant to tender previously owned shares of Stock (but not in excess of the minimum withholding required by law) or sell any shares of Stock contingently issued or credited by the Company for the purpose 

 

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of paying such Award or any other Award under this Plan to raise the amount necessary to satisfy applicable withholding requirements.

 

(7)                                 Dividend Equivalents, Etc.  The Administrator may provide for the payment of amounts (on terms and subject to conditions established by the Administrator) in lieu of cash dividends or other cash distributions with respect to Stock subject to an Award whether or not the holder of such Award is otherwise entitled to share in the actual dividend or distribution in respect of such Award.  Any entitlement to dividend equivalents or similar entitlements will be established and administered either consistent with an exemption from, or in compliance with, the requirements of Section 409A.  Dividends or dividend equivalent amounts payable in respect of Awards that are subject to restrictions may be subject to such limits or restrictions as the Administrator may impose including, without limitation, that dividends or dividend equivalent amounts payable in respect of Awards that are conditioned on the attainment of Performance Criterion or Criteria will only be paid if and to the extent that such Performance Criterion or Criteria have actually been attained.

 

(8)                                 Rights Limited.  Nothing in the Plan, any Award granted or any Award agreement or other agreement entered into pursuant hereto will be construed as (i) giving any person the right to continued employment or service with the Company or its Affiliates (ii) limiting in any way the right of the Company or any Affiliate to terminate a person’s Employment or service or (iii) giving any person any rights as a stockholder except as to shares of Stock actually issued under the Plan.  The loss of existing or potential profit in Awards will not constitute an element of damages in the event of termination of Employment for any reason, even if the termination is in violation of an obligation of the Company or any Affiliate to the Participant.  No Participant or other person shall have any claim to be granted an Award under the Plan, and there is no obligation for uniformity of treatment of Employees, Participants, or holders or beneficiaries of Awards under the Plan.  The terms and conditions of Awards need not be the same with respect to each recipient.  Any Award granted under the Plan shall be a one-time Award which does not constitute a promise of future grants.  The Company, in its sole discretion, maintains the right to make available future grants hereunder.

 

(9)                                 Exclusion from Pension and other Benefit Plan Computation.  Except to the extent otherwise required by applicable law and with respect to jurisdictions other than in the United States, by exercise of a Stock Option or SAR or receipt of another type of Award, (i) each Participant shall be deemed to have agreed that such Award is special incentive compensation that will not be taken into account, in any manner, as salary, compensation or bonus in determining the amount of any payment under any pension, retirement, severance, resignation, redundancy, end of service payment or other employee benefit plan of the Company or an Affiliate, and (ii) each beneficiary of a deceased Participant shall be deemed to have agreed that such Award will not affect the amount of any life insurance coverage, if any, provided by the Company or an Affiliate on the life of the Participant that is payable to the beneficiary under any life insurance plan covering Employees or directors of the Company or an Affiliate.

 

(10)                          Section 162(m). In the case of any Performance Award (other than a Stock Option or SAR) intended to qualify for the performance-based compensation exception under Section 162(m), the Administrator will establish the applicable Performance Criterion or Criteria in writing no later than ninety (90) days after the commencement of the period of service 

 

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to which the performance relates (or at such earlier time as is required to qualify the Award as performance-based under Section 162(m)) and, prior to the event or occurrence (grant, vesting or payment, as the case may be) that is conditioned on the attainment of such Performance Criterion or Criteria, will certify whether it or they have been attained.

 

(11)                          Section 16(b).  The provisions of this Plan are intended to ensure that no transaction under the Plan is subject to (and all such transactions are exempt from) the short-swing recovery rules of Section 16(b) of the Exchange Act.  Accordingly, the composition of the Administrator shall be subject to such limitations as the Board deems appropriate to permit transactions pursuant to this Plan to be exempt (pursuant to Rule 16b-3 promulgated under the Exchange Act) from Section 16(b), and no delegation of authority by the Administrator shall be permitted if such delegation would cause any such transaction to be subject to (and not exempt from) Section 16(b).  If any provision of the Plan or of any Award would otherwise frustrate or conflict with the intent expressed in this Section 6(a)(10), that provision to the extent possible shall be interpreted and deemed amended so as to avoid such conflict. To the extent there is any remaining irreconcilable conflict with this intent, the provision shall be deemed disregarded as to transactions under the Plan that are intended to be exempt under Rule 16b-3 or such other exemptive rules under Section 16.

 

(12)                          Coordination with Other Plans.  Awards under the Plan may be granted in tandem with, or in satisfaction of or substitution for, other Awards under the Plan or awards made under other compensatory plans or programs of the Company or its Affiliates.  For example, but without limiting the generality of the foregoing, awards under other compensatory plans or programs of the Company or its Affiliates may be settled in Stock (including, without limitation, Unrestricted Stock) if the Administrator so determines, in which case the shares delivered will be treated as awarded under the Plan (and will reduce the number of shares thereafter available under the Plan in accordance with the rules set forth in Section 4).  In any case where an award is made under another plan or program of the Company or its Affiliates and such award is intended to qualify for the performance-based compensation exception under Section 162(m), and such award is settled by the delivery of Stock or another Award under the Plan, the applicable Section 162(m) limitations under both the other plan or program and under the Plan will be applied to the Plan as necessary (as determined by the Administrator) to preserve the availability of the Section 162(m) performance-based compensation exception with respect thereto.

 

(13)                          Section 409A.  Each Award will contain such terms as the Administrator determines, and will be construed and administered, such that the Award either qualifies for an exemption from the requirements of Section 409A or satisfies such requirements.

 

(14)                          Fair Market Value.  In determining the fair market value of any share of Stock under the Plan, the Administrator will make the determination in good faith consistent with the rules of Section 422 and Section 409A to the extent applicable.

 

(b)                                 Stock Options and SARs.

 

(1)                                 Time And Manner Of Exercise.  Unless the Administrator expressly provides otherwise, no Stock Option or SAR will be deemed to have been exercised until the 

 

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Administrator receives a notice of exercise (in form acceptable to the Administrator), which may be an electronic notice, signed (including electronic signature in form acceptable to the Administrator) by the appropriate person and accompanied by any payment required under the Award.  A Stock Option or SAR exercised by any person other than the Participant will not be deemed to have been exercised until the Administrator has received such evidence as it may require that the person exercising the Award has the right to do so.

 

(2)                                 Exercise Price; Prohibition on Re-Pricing.  The exercise price (or the base value from which appreciation is to be measured) of each Award requiring exercise will be no less than 100% (or in the case of an ISO granted to a ten-percent shareholder within the meaning of subsection (b)(6) of Section 422, 110%) of the fair market value of the Stock subject to the Award, determined as of the date of grant, or such higher amount as the Administrator may determine in connection with the grant.  Except as contemplated by Section 7 of the Plan, the company may not, without obtaining stockholder approval, (a) amend the terms of outstanding Stock Options or SARs to reduce the exercise price or base value of such Stock Options or SARs, (b) cancel outstanding Stock Options or SARs in exchange for Stock Options or SARs with an exercise price or base value that is less than the exercise price or base value of the original Stock Options or SARs, or (c) cancel outstanding Stock Options or SARs that have an exercise price or base value greater than the fair market value of a share on the date of such cancellation in exchange for cash or other consideration.  Fair market value will be determined by the Administrator consistent with the applicable requirements of Section 422 and Section 409A.

 

(3)                                 Payment Of Exercise Price.  Where the exercise of an Award is to be accompanied by payment, payment of the exercise price will be by cash or check acceptable to the Administrator or by such other legally permissible means, if any, as may be acceptable to the Administrator.

 

(4)                                 Maximum Term.  Stock Options and SARs will have a maximum term not to exceed ten (10) years from the date of grant (or five (5) years from the date of grant in the case of an ISO granted to a ten-percent shareholder described in Section 6(b)(2) above); provided, however, that, if a Participant still holding an outstanding but unexercised NSO or SAR ten (10) years from the date of grant (or, in the case of an NSO or SAR with a maximum term of less than ten (10) years, such maximum term) is prohibited by applicable law or a written policy of the Company applicable to similarly situated employees from engaging in any open-market sales of Stock, and if at such time the Stock is publicly traded (as determined by the Administrator), the Administrator may determine, in its discretion, that the maximum term of such Award will instead be deemed to expire on the thirtieth (30th) day following the date the Participant is no longer prohibited from engaging in such open market sales.

 

7.                                      EFFECT OF CERTAIN TRANSACTIONS

 

(a)                                 Mergers, etc.  Except as otherwise provided in an Award agreement, the following provisions will apply in the event of a Change of Control Transaction:

 

(1)                                 Assumption or Substitution.  If the Change of Control Transaction is one in which there is an acquiring or surviving entity, the Administrator may (but, for the avoidance 

 

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of doubt, need not) provide (i) for the assumption or continuation of some or all outstanding Awards or any portion thereof or (ii) for the grant of new awards in substitution therefor by the acquiror or survivor or an affiliate of the acquiror or survivor.

 

(2)                                 Cash-Out of Awards.  Subject to Section 7(a)(5) below, the Administrator may (but, for the avoidance of doubt, need not) provide for payment (a “cash-out”), with respect to some or all Awards or any portion thereof, equal in the case of each affected Award or portion thereof to the excess, if any, of (A) the fair market value of one share of Stock (as determined by the Administrator in its reasonable discretion) times the number of shares of Stock subject to the Award or such portion, over (B) the aggregate exercise or purchase price, if any, under the Award or such portion (in the case of an SAR, the aggregate base value above which appreciation is measured), in each case on such payment terms (which need not be the same as the terms of payment to holders of Stock) and other terms, and subject to such conditions, as the Administrator determines.

 

(3)                                 Acceleration of Certain Awards.  Subject to Section 7(a)(5) below, the Administrator may (but, for the avoidance of doubt, need not) provide that any Award requiring exercise will become exercisable, in full or in part and/or that the delivery of any shares of Stock remaining deliverable under any outstanding Award of Stock Units (including Restricted Stock Units and Performance Awards to the extent consisting of Stock Units) will be accelerated in full or in part, in each case on a basis that gives the holder of the Award a reasonable opportunity, as determined by the Administrator, following exercise of the Award or the delivery of the shares, as the case may be, to participate as a stockholder in the Change of Control Transaction.

 

(4)                                 Termination of Awards Upon Consummation of Change of Control Transaction.  Except as the Administrator may otherwise determine in any case, upon consummation of the Change of Control Transaction, each Award outstanding as of the Change of Control Transaction will automatically terminate (and in the case of outstanding shares of Restricted Stock, will automatically be forfeited), other than Awards assumed pursuant to Section 7(a)(1) above.  With respect to any Awards that do not automatically terminate pursuant to the preceding sentence and except as the Administrator may otherwise determine, in the event that, within twelve months following a Change of Control Transaction, the Participant’s Employment is terminated by the Company or any of its Affiliates for any reason other than for Cause, all such Awards held by the Participant, to the extent then outstanding, which have not theretofore vested shall immediately vest and become exercisable and all vesting and exercisability restrictions on such award shall immediately lapse, in each case, upon such termination.  For the avoidance of doubt, if any conflict between this Plan and the Change of Control Plan should arise, the terms of this Plan shall govern.

 

(5)                                 Additional Limitations.  Any share of Stock and any cash or other property delivered pursuant to Section 7(a)(2) or Section 7(a)(3) above with respect to an Award may, in the discretion of the Administrator, contain such restrictions, if any, as the Administrator deems appropriate to reflect any performance or other vesting conditions to which the Award was subject and that did not lapse (and were not satisfied) in connection with the Change of Control Transaction.  For purposes of the immediately preceding sentence, a cash-out under Section 7(a)(2) above or acceleration under Section 7(a)(3) above will not, in and of itself, be treated as the lapsing (or satisfaction) of a performance or other vesting condition.  In the case of 

 

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Restricted Stock that does not vest and is not forfeited in connection with the Change of Control Transaction, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in connection with the Change of Control Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.

 

(b)                                 Changes in and Distributions With Respect to Stock.

 

(1)                                 Basic Adjustment Provisions.  In the event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Company’s capital structure that constitutes an equity restructuring within the meaning of FASB ASC 718, the Administrator will make appropriate adjustments to the maximum number of shares specified in Section 4(a) that may be delivered under the Plan and to the maximum share limits described in Section 4(c), and will also make appropriate adjustments to the number and kind of shares of stock or securities subject to Awards then outstanding or subsequently granted, any exercise prices relating to Awards and any other provision of Awards affected by such change.

 

(2)                                 Certain Other Adjustments.  The Administrator may also make adjustments of the type described in Section 7(b)(1) above to take into account distributions to stockholders other than those provided for in Section 7(a) and 7(b)(1), or any other event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan, having due regard for the qualification of ISOs under Section 422, the requirements of Section 409A, and for the performance-based compensation rules of Section 162(m), where applicable.

 

(3)                                 Continuing Application of Plan Terms.  References in the Plan to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 7.

 

8.                                      LEGAL CONDITIONS ON DELIVERY OF STOCK

 

The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the Plan until: (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance; and (iii) all conditions of the Award have been satisfied or waived.  The Company may require, as a condition to exercise of the Award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of the Securities Act of 1933 or any applicable state or non-U.S. securities law.  Any Stock required to be issued to Participants under the Plan will be evidenced in such manner as the Administrator may deem appropriate, including book-entry registration or delivery of stock certificates.  In the event that the Administrator determines that Stock certificates will be issued to Participants under the Plan, the Administrator may require that certificates evidencing Stock issued under the Plan bear an appropriate legend

 

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reflecting any restriction on transfer applicable to such Stock, and the Company may hold the certificates pending lapse of the applicable restrictions.

 

9.             AMENDMENT AND TERMINATION

 

The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any future grants of Awards; provided, that except as otherwise expressly provided in the Plan the Administrator may not, without the Participant’s consent, alter the terms of an Award so as to affect materially and adversely the Participant’s rights under the Award, unless the Administrator expressly reserved the right to do so at the time the Award was granted.  Any amendments to the Plan will be conditioned upon stockholder approval only to the extent, if any, such approval is required by law (including the Code and applicable stock exchange requirements), as determined by the Administrator.

 

10.          OTHER COMPENSATION ARRANGEMENTS

 

The existence of the Plan or the grant of any Award will not in any way affect the Company’s right to Award a person bonuses or other compensation in addition to Awards under the Plan.

 

11.          MISCELLANEOUS

 

(a)           Waiver of Jury Trial.  By accepting an Award under the Plan, each Participant waives any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees that any such action, proceedings or counterclaim will be tried before a court and not before a jury.  By accepting an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers.  Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit disputes arising under the terms of the Plan or any Award made hereunder to binding arbitration or as limiting the ability of the Company to require any eligible individual to agree to submit such disputes to binding arbitration as a condition of receiving an Award hereunder.

 

(b)           Limitation of Liability.  Notwithstanding anything to the contrary in the Plan, neither the Company, nor any Affiliate, nor the Administrator, nor any person acting on behalf of the Company, any Affiliate, or the Administrator, will be liable to any Participant or to the estate or beneficiary of any Participant or to any other holder of an Award by reason of any acceleration of income, or any additional tax (including any interest and penalties), asserted by reason of the failure of an Award to satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code, or otherwise asserted with respect to the Award; provided, that nothing in this Section 11(b) will limit the ability of the Administrator or the Company, in its discretion, to provide by separate express written agreement with a Participant for any payment in connection with any such acceleration of income or additional tax.

 

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Furthermore, in no event shall the Company have any liability relating to the failure or alleged failure of any Award under the Plan to comply with, or be exempt from, the requirements of Section 16(b) of the Exchange Act.

 

12.          ESTABLISHMENT OF SUB-PLANS

 

The Administrator may grant Awards to Employees of the Company and its Affiliates who reside in foreign jurisdictions.  Notwithstanding anything in the Plan to the contrary, the Administrator may, in its sole discretion: (i) amend or vary the terms of the Plan and/or Awards to conform such terms with the requirements of each jurisdiction where an Affiliate is located; (ii) amend or vary the terms of the Plan and/or Awards in each jurisdiction where an Affiliate is located as it considers necessary or desirable to take into account or to mitigate or reduce the burden of taxation and social security contributions for participants and/or the Affiliate; or (iii) amend or vary the terms of the Plan and/or Awards in each jurisdiction where an Affiliate is located as it deems necessary or desirable to meet the goals and objectives of the Plan.  The Administrator may, where it deems appropriate in its sole discretion, establish one or more sub-plans for these purposes.  The terms and conditions contained herein which are subject to variation in a jurisdiction shall be reflected in a written supplement to the Plan for such jurisdiction.  All supplements so established will be deemed to be part of the Plan, but each supplement will apply only to Participants within the affected jurisdiction (as determined by the Administrator).

 

13.          GOVERNING LAW

 

(a)           Certain Requirements of Corporate Law.  Awards will be granted and administered consistent with the requirements of applicable Delaware law relating to the issuance of stock and the consideration to be received therefor, and with the applicable requirements of the stock exchanges or other trading systems on which the Stock is listed or entered for trading, in each case as determined by the Administrator.

 

(b)           Other Matters.  Except as otherwise provided by the express terms of an Award agreement, under a sub-plan described in Section 12 or as provided in Section 13(a) above, the provisions of the Plan and of Awards under the Plan and all claims or disputes arising out of or based upon the Plan or any Award under the Plan or relating to the subject matter hereof or thereof will be governed by and construed in accordance with the domestic substantive laws of the State of Vermont without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

 

(c)           Jurisdiction.  By accepting an Award, each Participant will be deemed to (a) have submitted irrevocably and unconditionally to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the District of Vermont for the purpose of any suit, action or other proceeding arising out of or based upon the Plan or any Award; (b) agree not to commence any suit, action or other proceeding arising out of or based upon the Plan or an Award, except in the federal and state courts located within the geographic boundaries of the United States District Court for the District of Vermont; and (c)  waive, and agree not to assert, by way of motion as a defense or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-

 

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named courts that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that the Plan or an Award or the subject matter thereof may not be enforced in or by such court.

 

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EXHIBIT A

 

Definition of Terms

 

The following terms, when used in the Plan, will have the meanings and be subject to the provisions set forth below:

 

“2006 Incentive Plan”:  The Green Mountain Coffee Roasters, Inc. 2006 Incentive Plan.

 

“Administrator”:  The Compensation Committee, except that the Compensation Committee may delegate (i) to one or more of its members (or one or more other members of the Board (including the full Board)) such of its duties, powers and responsibilities as it may determine; (ii) to one or more officers of the Company the power to grant Awards to the extent permitted by Section 157(c) of the Delaware General Corporation Law; (iii) to the chief executive officer with respect to all non-executive employees, with such duties, powers and responsibilities as it may determine, provided the chief executive officer is a member of the Board; and (iv) to such Employees or other persons as it determines such ministerial tasks as it deems appropriate.  In the event of any delegation described in the preceding sentence, the term “Administrator” will include the person or persons so delegated to the extent of such delegation.

 

“Affiliate”:  Any corporation or other entity that stands in a relationship to the Company that would result in the Company and such corporation or other entity being treated as one employer under Section 414(b) and Section 414(c) of the Code.

 

“Award”:  Any or a combination of the following:

 

(i) Stock Options;

 

(ii) SARs;

 

(iii) Restricted Stock;

 

(iv) Unrestricted Stock;

 

(v)  Stock Units, including Restricted Stock Units;

 

(vi) Performance Awards;

 

(vii) Cash Awards; and

 

(viii)  Awards (other than Awards described in (i) through (vii) above) that are convertible into or otherwise based on Stock.

 

“Board”:  The Board of Directors of the Company.

 

“Cash Award”:  An Award denominated in cash.

 

“Cause”:  In the case of any Participant who is party to an employment or severance-benefit agreement that contains a definition of “Cause,” the definition set forth in such agreement

 

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will apply with respect to such Participant under the Plan.  In the case of any other Participant, “Cause” will mean, as determined by the Administrator in its reasonable judgment and sole discretion, (i) gross negligence or willful misconduct by the Participant in the performance of his or her employment duties; (ii) the Participant’s conviction of, or entering a guilty plea with respect to a felony or a misdemeanor involving moral turpitude; (iii) the Participant’s commission of an act involving personal dishonesty that results in financial, reputational, or other harm to the Company or its Affiliates; (iv) the Participant’s material breach of any term of any employment, consulting, or other service, confidentiality, intellectual property or non-competition agreement, if any, between the Participant and the Company or an Affiliate; (v) the Participant’s material violation of any rule, policy, procedure or guideline of the Company or its Affiliates; or (vi) egregious or materially harmful behavior that is detrimental to the business or reputation of the Company or its Affiliates.

 

“Change of Control Plan”:  The Green Mountain Coffee Roasters, Inc. 2008 Change-In-Control Severance Benefit Plan, as amended.

 

“Change of Control Transaction”:  Any of (i) a consolidation, merger, or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the Company’s assets, or (iii) a dissolution or liquidation of the Company.  Where a Change of Control Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) (as determined by the Administrator), the Change of Control Transaction will be deemed to have occurred upon consummation of the tender offer.  For purposes of any of the provisions of the Plan providing for the acceleration of vesting of an Award, within twelve months following a Change of Control Transaction, a Change of Control Transaction requires an ownership change such that either (i) there is a change in the composition of a majority of the members of the Board immediately prior to the consummation of the transaction or (ii) the ownership of more than 50% of the equity securities entitled to vote generally in the election of directors after the consummation of the transaction is held by Persons other than those who owned such equity securities prior to the transaction, as determined by the Board.

 

“Code”:  The U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or any successor statute as from time to time in effect.

 

“Compensation Committee”:  The Compensation and Organizational Development Committee of the Board.

 

“Company”:  Green Mountain Coffee Roasters, Inc.

 

“Date of Adoption”:  The earlier of the date the Plan was approved by the Company’s stockholders or adopted by the Board, as determined by the Committee.

 

“Effective Date”: December 6, 2013, the date the Plan was approved by the Board, subject to approval by the Company’s stockholders.

 

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“Employee”:  Any person who is employed by the Company or an Affiliate.

 

“Employment”:  A Participant’s employment or other service relationship with the Company and its Affiliates.  Employment will be deemed to continue, unless the Administrator expressly provides otherwise, so long as the Participant is employed by, or otherwise is providing services in a capacity described in Section 5 to the Company or an Affiliate.  If a Participant’s employment or other service relationship is with an Affiliate and that entity ceases to be an Affiliate, the Participant’s Employment will be deemed to have terminated when the entity ceases to be an Affiliate unless the Participant transfers Employment to the Company or its remaining Affiliates.  Notwithstanding the foregoing and the definition of “Affiliate” above, in construing the provisions of any Award relating to the payment of “nonqualified deferred compensation” (subject to Section 409A) upon a termination or cessation of Employment, references to termination or cessation of employment, separation from service, retirement or similar or correlative terms will be construed to require a “separation from service” (as that term is defined in Section 1.409A-1(h) of the Treasury Regulations) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Section 1.409A-1(h)(3) of the Treasury Regulations.  The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a “separation from service” has occurred.  Any such written election will be deemed a part of the Plan.

 

“Exchange Act”:  The Securities Exchange Act of 1934, as amended from time to time, and any successor thereto.

 

“Fungible Pool Limit”:  See Section 4(a).

 

“Fungible Pool Unit”:  the measuring unit used for purposes of the Plan, as specified in Section 4, to determine the number of shares of Stock which may be subject to Awards hereunder,  which shall consist of shares of Stock in proportions (ranging from 1.0 to 1.704) as set forth in Section 4(a).

 

“ISO”:  A Stock Option intended to be an “incentive stock option” within the meaning of Section 422.  Each Stock Option granted pursuant to the Plan will be treated as providing by its terms that it is to be an NSO unless, as of the date of grant, it is expressly designated as an ISO.

 

“NSO”:  A Stock Option that is not intended to be an “incentive stock option” within the meaning of Section 422.

 

“Participant”:  A person who is granted an Award under the Plan.

 

“Performance Award”:  An Award subject to Performance Criteria.  The Administrator in its discretion may grant Performance Awards that are intended to qualify for the performance-based compensation exception under Section 162(m) and Performance Awards that are not intended so to qualify.

 

“Performance Criteria”:  Specified criteria, other than the mere continuation of Employment or the mere passage of time, the satisfaction of which is a condition for the grant,

 

15

 

exercisability, vesting or full enjoyment of an Award.  For purposes of Awards that are intended to qualify for the performance-based compensation exception under Section 162(m), a Performance Criterion will mean an objectively determinable measure of performance relating to any or any combination of the following (measured either absolutely or by reference to an index or indices and determined either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project or geographical basis or in combinations thereof): sales; revenues; assets; expenses; earnings before or after deduction for all or any portion of interest, taxes, depreciation, or amortization, whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital or assets; one or more operating ratios; borrowing levels, leverage ratios or credit rating; market share; capital expenditures; cash flow; stock price; stockholder return; sales of particular products or services; customer acquisition or retention; acquisitions and divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split-ups and the like; reorganizations; or recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings.  A Performance Criterion and any targets with respect thereto determined by the Administrator need not be based upon an increase, a positive or improved result or avoidance of loss.  To the extent consistent with the requirements for satisfying the performance-based compensation exception under Section 162(m), the Administrator may provide in the case of any Award intended to qualify for such exception that one or more of the Performance Criteria applicable to such Award will be adjusted in an objectively determinable manner to reflect events (for example, but without limitation, acquisitions or dispositions) occurring during the performance period that affect the applicable Performance Criterion or Criteria.

 

“Plan”:  The Green Mountain Coffee Roasters, Inc. 2014 Omnibus Incentive Plan as from time to time amended and in effect.

 

“Restricted Stock”:  Stock subject to restrictions requiring that it be redelivered or offered for sale to the Company if specified conditions are not satisfied.

 

“Restricted Stock Unit”:  A Stock Unit that is, or as to which the delivery of Stock or cash in lieu of Stock is, subject to the satisfaction of specified performance or other vesting conditions.

 

“SAR”:  A right entitling the holder upon exercise to receive an amount (payable in cash or in shares of Stock of equivalent value) equal to the excess of the fair market value of the shares of Stock subject to the right over the base value from which appreciation under the SAR is to be measured.

 

“Section 409A”:  Section 409A of the Code.

 

“Section 422”:  Section 422 of the Code.

 

“Section 162(m)”:  Section 162(m) of the Code.

 

“STIP”:  Senior Executive Officer Short Term Incentive Compensation Plan

 

“Stock”:  Common stock of the Company, par value $0.10 per share.

 

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“Stock Option”:  An option entitling the holder to acquire shares of Stock upon payment of the exercise price.

 

“Stock Unit”:  An unfunded and unsecured promise, denominated in shares of Stock, to deliver Stock or cash measured by the value of Stock in the future.

 

“Unrestricted Stock”:  Stock not subject to any restrictions under the terms of the Award.

 

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