AMENDED AND RESTATED
ITC HOLDINGS CORP.
2006 LONG TERM INCENTIVE PLAN
(effective May 21, 2008)

I. GENERAL PROVISIONS

1.1 Establishment. On February 8, 2006, the Board of Directors (“Board”) of ITC
Holdings Corp. (“Corporation”) adopted the ITC Holdings Corp. 2006 Long Term
Incentive Plan (“Plan”), subject to the approval of shareholders at the
Corporation’s annual meeting of shareholders on May 17, 2006. The Board approved
the Amended and Restated Plan on March 25, 2008, subject to the approval of
shareholders at the Corporation’s annual meeting of shareholders on May 21,
2008.

1.2 Purpose. The purpose of the Plan is to (a) promote the best interests of the
Corporation and its shareholders by encouraging Employees, Non-Employee
Directors, and Consultants of the Corporation and its Subsidiaries to acquire an
ownership interest in the Corporation by granting stock-based Awards, thus
aligning their interests with those of shareholders, and (b) enhance the ability
of the Corporation to attract, motivate and retain qualified Employees,
Non-Employee Directors and Consultants. It is the further purpose of the Plan to
authorize certain Awards that will constitute performance based compensation, as
described in Code Section 162(m) and Treasury regulations promulgated
thereunder.

1.3 Plan Duration. Subject to shareholder approval, the Plan shall become
effective on May 17, 2006 and shall continue in effect until its termination by
the Board; provided, however, that no new Awards may be granted on or after
February 7, 2012.

1.4 Definitions. As used in this Plan, the following terms have the meaning
described below:

(a) “Agreement” means the written document that sets forth the terms of a
Participant’s Award.

(b) “Annual Incentive Award” means an Award that is granted in accordance with
Article VI.

(c) “Award” means any form of Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, Performance Award, Annual Incentive Award or other
incentive award granted under the Plan.

(d) “Board” means the Board of Directors of the Corporation.

(e) “Change in Control” means the occurrence of any of the following events:

(i) If any one person, or more than one person acting as a group (as defined in
Code Section 409A and IRS guidance issued thereunder), acquires ownership of
Common Stock of the Corporation that, together with stock held by such person or
group, constitutes more than fifty (50) percent of the total fair market value
or total voting power of the Common Stock of the Corporation. However, if any
one person or more than one person acting as a group, is considered to own more
than fifty (50) percent of the total fair market value or total voting power of
the Common Stock of the Corporation, the acquisition of additional stock by the
same person or persons is not considered to cause a Change in Control, or to
cause a change in the effective control of the Corporation (within the meaning
of Code Section 409A and IRS guidance issued thereunder). An increase in the
percentage of Common Stock owned by any one person, or persons acting as a
group, as a result of a transaction in which the Corporation acquires its stock
in exchange for property shall be treated as an acquisition of stock for
purposes of this Section. This paragraph applies only when there is a transfer
of stock of the Corporation (or issuance of stock of the Corporation) and stock
in such Corporation remains outstanding after the transaction.

(ii) If any one person, or more than one person acting as a group (as determined
in accordance with Code Section 409A and IRS guidance thereunder), acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of Common Stock of the
Corporation possessing thirty-five (35) percent or more of the total voting
power of the Common Stock of the Corporation; or

(iii) If a majority of members on the Corporation’s Board is replaced during any
12-month period by Directors whose appointment or election is not endorsed by a
majority of the members of the Corporation’s Board prior to the date of the
appointment or election (provided that for purposes of this paragraph, the term
Corporation refers solely to the “relevant” Corporation, as defined in Code
Section 409A and IRS guidance issued thereunder), for which no other Corporation
is a majority shareholder.

(iv) If there is a change in the ownership of a substantial portion of the
Corporation’s assets, which shall occur on the date that any one person, or more
than one person acting as a group (within the meaning of Code Section 409A and
IRS guidance issued thereunder) acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or
persons) assets from the Corporation that have a total gross fair market value
equal to or more than forty (40) percent of the total gross fair market value of
all of the assets of the Corporation immediately prior to such acquisition or
acquisitions. For this purpose, gross fair market value means the value of the
assets of the Corporation, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

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

(g) “Committee” means the Compensation Committee of the Board, or any other
committee or sub-committee of the Board, designated by the Board from time to
time, comprised solely of two or more Directors who are “Non-Employee
Directors,” as defined in Rule 16b-3 of the Exchange Act, “Outside Directors” as
defined in Code Section 162(m) and Treasury regulations thereunder, and
“Independent Directors” for purposes of the rules and regulations of the Stock
Exchange. However, the fact that a Committee member shall fail to qualify under
any of these requirements shall not invalidate any Award made by the Committee,
if the Award is otherwise validly made under the Plan. The members of the
Committee shall be appointed by, and may be changed at any time and from time to
time, at the discretion of the Board.

(h) “Common Stock” means shares of the Corporation’s authorized common stock.

(i) “Consultant” means a consultant or advisor (other than as an Employee or
member of the Board) to the Corporation or a Subsidiary; provided that such
person (1) renders bona fide services that are not in connection with the offer
and sale of the Corporation’s securities in a capital-raising transaction, and
(2) does not promote or maintain a market for the Corporation’s securities.

(j) “Corporation” means ITC Holdings Corp., a Michigan corporation.

(k) “Director” means an individual, other than an Employee, who has been elected
or appointed to serve as a Director of the Corporation.

(l) “Disability” means total and permanent disability, as defined in Code
Section 22(e); provided, however, that for purposes of a Code Section 409A
distribution event, “disability” shall be defined under Code Section 409A and
IRS guidance issued thereunder.

(m) “Dividend Equivalent” means a credit, made at the discretion of the
Committee or as otherwise provided by the Plan, to the account of a Participant
in an amount equal to the cash dividend paid on one share of Common Stock for
each share of Common Stock represented by an Award held by such Participant.
Dividend Equivalents shall not be paid on Option or Stock Appreciation Right
Awards.

(n) “Employee” means an individual who has an “employment relationship” with the
Corporation or a Subsidiary, as defined in Treasury Regulation 1.421-7(h), and
the term “employment” means employment with the Corporation, or a Subsidiary of
the Corporation.

(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto.

(p) “Fair Market Value” means for purposes of determining the value of Common
Stock on the Grant Date, the closing price of the Common Stock on the Stock
Exchange for the Grant Date. In the event that there are no Common Stock
transactions on such date, the Fair Market Value shall be determined as of the
immediately preceding date on which there were Common Stock transactions. Unless
otherwise specified in the Plan, “Fair Market Value” for purposes of determining
the value of Common Stock on the date of exercise means the closing price of the
Common Stock on the Stock Exchange for the last date preceding the exercise on
which there were Common Stock transactions.

(q) “Grant Date” means the date on which the Committee authorizes an Award, or
such later date as shall be designated by the Committee.

(r) “Incentive Stock Option” means an Option that is intended to meet the
requirements of Section 422 of the Code.

(s) “Nonqualified Stock Option” means an Option that is not an Incentive Stock
Option.

(t) “Option” means either an Incentive Stock Option or a Nonqualified Stock
Option.

(u) “Participant” means an Employee (including an Employee who is a Director),
Director or Consultant, who is designated by the Committee to participate in the
Plan.

(v) “Performance Award” means any Award of Performance Shares or Performance
Units granted pursuant to Article V.

(w) “Performance Measures” means the measures of performance of the Corporation
and its Subsidiaries used to determine a Participant’s entitlement to an Award
under the Plan. Such performance measures shall have the same meanings as used
in the Corporation’s financial statements, or, if such terms are not used in the
Corporation’s financial statements, they shall have the meaning applied pursuant
to generally accepted accounting principles, or as used generally in the
Corporation’s industry. Performance Measures shall be calculated with respect to
the Corporation and each Subsidiary consolidated therewith for financial
reporting purposes or such division or other business unit as may be selected by
the Committee. For purposes of the Plan, the Performance Measures shall be
calculated in accordance with generally accepted accounting principles, but,
unless otherwise determined by the Committee, prior to the accrual or payment of
any Award under this Plan for the same performance period and excluding the
effect (whether positive or negative) of any change in accounting standards or
any extraordinary, unusual or nonrecurring item, as determined by the Committee,
occurring after the establishment of the performance goals. Performance Measures
shall be one or more of the following, or a combination of any of the following,
on an absolute or peer group comparison, as determined by the Committee:

  •   earnings (as measured by net income, operating income, operating income
before interest, EBIT, EBITA, EBITDA, pre-tax income, or cash earnings, or
earnings as adjusted by excluding one or more components of earnings, including
each of the above on a per share and/or segment basis);

  •   revenues/net revenues;

  •   return on net revenue (as measured by net income, operating income,
operating income before interest, EBIT, EBITA, EBITDA, pre-tax income, operating
cash flow or cash earnings as a percentage of net revenue);

  •   revenue growth;

  •   cash flow;

  •   operating cash flow;

  •   free cash flow;

  •   discounted cash flow;

  •   working capital;

  •   market capitalization;

  •   cash return on investment – CRI;

  •   return on capital;

  •   return on cost of capital;

  •   shareholder value;

  •   return on equity;

  •   total shareholder return;

  •   return on investment;

  •   economic value added;

  •   return on assets/net assets;

  •   stock trading multiples (as measured vs. investment, net income, operating
income, operating income before interest, EBIT, EBITA, EBITDA, pre-tax income,
cash earnings or operating cash flow);

  •   stock price;

  •   attainment of strategic or operational initiatives;

  •   achievement of operational goals, including but not limited to safety
records, outage frequencies, and capital and maintenance projects.

(x) “Performance Share” means any grant pursuant to Article V and
Section 5.2(b)(i).

(y) “Performance Unit” means any grant pursuant to Article V and
Section 5.2(b)(ii).

(z) “Plan” means the ITC Holdings Corp. 2006 Long Term Incentive Plan, the terms
of which are set forth herein, and any amendments thereto.

(aa) “Restriction Period” means the period of time during which a Participant’s
Restricted Stock or Restricted Stock Unit is subject to restrictions and is
nontransferable.

(bb) “Restricted Stock” means Common Stock granted pursuant to Article IV that
is subject to a Restriction Period.

(cc) “Restricted Stock Unit” means a right granted pursuant to Article IV to
receive Restricted Stock or an equivalent value in cash.

(dd) “Securities Act” means the Securities Act of 1933, as amended.

(ee) “Stock Appreciation Right” means the right to receive a cash or Common
Stock payment from the Corporation, in accordance with Article III of the Plan.

(ff) “Stock Exchange” means the principal national securities exchange on which
the Common Stock is listed for trading, or, if the Common Stock is not listed
for trading on a national securities exchange, such other recognized trading
market or quotation system upon which the largest number of shares of Common
Stock has been traded in the aggregate during the last 20 days before a Grant
Date, or date on which an Option is exercised, whichever is applicable.

(gg) “Subsidiary” means a corporation or other entity defined in Code
Section 424(f).

(hh) “Substitute Awards” shall mean Awards granted or shares issued by the
Corporation in assumption of, or in substitution or exchange for, awards
previously granted, or the right or obligation to make future awards, by a
company acquired by the Corporation or any Subsidiary or with which the
Corporation or any Subsidiary combines.

(ii) “Vested” or “Vesting” means the extent to which an Award granted or issued
hereunder has become exercisable or any applicable Restriction Period has
terminated or lapsed in accordance with the Plan and the terms of any respective
Agreement pursuant to which such Award was granted or issued or has become
payable in whole or in part due to the satisfaction of performance goal(s) set
forth in any respective Agreement pursuant to which such Award was granted or
issued.

1.5 Administration.

(a) The Plan shall be administered by the Committee. The Committee shall
interpret the Plan, prescribe, amend, and rescind rules and regulations relating
to the Plan, and make all other determinations necessary or advisable for its
administration. The decision of the Committee on any question concerning the
interpretation of the Plan or its administration with respect to any Award
granted under the Plan shall be final and binding upon all Participants. No
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Award hereunder.

(b) In addition to any other powers set forth in the Plan and subject to the
provisions of the Plan, but, in the case of Awards designated as Awards under
Code Section 162(m), subject to the requirements of Code Section 162(m), the
Committee shall have the full and final power and authority, in its discretion
to:

(i) amend, modify, or cancel any Award, or to waive any restrictions or
conditions applicable to any Award or any shares acquired pursuant thereto;

(ii) subject to Code Section 409A, accelerate, continue, or defer the
exercisability or Vesting of any Award or any shares acquired pursuant thereto;

(iii) authorize, in conjunction with any applicable deferred compensation plan
of the Corporation, that the receipt of cash or Common Stock subject to any
Award under this Plan may be deferred under the terms and conditions of such
deferred compensation plan;

(iv) determine the terms and conditions of Awards granted to Participants and
whether such terms and conditions have been satisfied, including without
limitation as required in Section 7.2 of the Plan; and

(v) establish such other Awards, besides those specifically enumerated in the
Plan, which the Committee determines are consistent with the Plan’s purposes.

1.6 Participants. Participants in the Plan shall be such Employees (including
Employees who are directors of the Corporation or any of its Subsidiaries),
Directors and Consultants of the Corporation and its Subsidiaries as the
Committee in its sole discretion may select from time to time. The Committee may
grant Awards to an individual upon the condition that the individual become an
Employee, Director or Consultant of the Corporation or of a Subsidiary, provided
that the Award shall be deemed to be granted only on the date that the
individual becomes an Employee, Director or Consultants, as applicable.

1.7 Stock.

(a) The Corporation has reserved four million nine hundred fifty thousand
(4,950,000) shares of Common Stock for issuance pursuant to stock-based Awards.
Up to three million two hundred fifty thousand (3,250,000) of the reserved
shares may be granted as Awards that may be settled in shares of Common Stock
other than Options or Stock Appreciation Rights. Up to one million four hundred
thousand (1,400,000) of the reserved shares may be granted as Incentive Stock
Options under the Plan. All provisions in this Section 1.7 shall be adjusted, as
applicable, in accordance with Article IX.

(b) Each share of Common Stock subject to any Award shall be counted against the
aggregate reserved share limit in paragraph (a) above as one share.

(c) If any shares subject to any portion of an Award that is forfeited,
cancelled, or expires or otherwise terminates without issuance of such shares,
or any Award is settled for cash or otherwise does not result in the issuance of
all or a portion of the shares subject to such Award, the shares shall, to the
extent of such forfeiture, cancellation, expiration, termination, cash
settlement or non-issuance, again be available for issuance pursuant to Awards
under the Plan and shall not be counted against the other limitations in
Section 1.7(a).

(d) For the avoidance of doubt, the following shares of Common Stock, however,
may not again be made available for issuance as Awards under the Plan:
(i) shares not issued or delivered as a result of the net settlement of an
outstanding Option or Stock Appreciation Right, (ii) shares used to pay the
exercise price or withholding taxes related to an outstanding Award or
(iii) shares repurchased on the open market with the proceeds of the option
exercise price.

(e) Substitute Awards shall not reduce the shares reserved for issuance under
the Plan or authorized for grant to a Participant in any fiscal year.
Additionally, in the event that a company acquired by the Corporation or any
Subsidiary or with which the Corporation or any Subsidiary combines has shares
available under a pre-existing plan approved by shareholders and not adopted in
contemplation of such acquisition or combination, the shares available for grant
pursuant to the terms of such pre-existing plan (as adjusted, to the extent
appropriate, using the exchange ratio or other adjustment or valuation ratio or
formula used in such acquisition or combination to determine the consideration
payable to the holders of common stock of the entities party to such acquisition
or combination) may be used for Awards under the Plan and shall not reduce the
Shares authorized for issuance under the Plan; provided that Awards using such
available shares shall not be made after the date awards or grants could have
been made under the terms of the pre-existing plan, absent the acquisition or
combination, and shall only be made to individuals who were not Employees or
Directors or an affiliate of the Corporation or its Subsidiaries prior to such
acquisition or combination.

1.8 Repricing. Without the affirmative vote of holders of a majority of the
shares of Common Stock cast in person or by proxy at a meeting of the
shareholders of the Corporation at which a quorum representing a majority of all
outstanding shares is present or represented by proxy, neither the Board nor the
Committee shall approve a program providing for (a) the cancellation of
outstanding Options and/or Stock Appreciation Rights and the grant in
substitution therefore of any new Options and/or Stock Appreciation Rights under
the Plan having a lower exercise price than the Fair Market Value of the
underlying Common Stock on the original Grant Date, (b) the amendment of
outstanding Options and/or Stock Appreciation Rights to reduce the exercise
price thereof below the Fair Market Value of the underlying Common Stock on the
original Grant Date, or (c) the exchange of outstanding Options or Stock
Appreciation Rights for cash or other Awards if the exercise price per share of
such Options or Stock Appreciation Rights is less than the Fair Market Value per
share as of the date of exchange. This Section shall not be construed to apply
to “issuing or assuming a stock option in a transaction to which section 424(a)
applies,” within the meaning of Section 424 of the Code.

II. STOCK OPTIONS

2.1 Grant of Options. The Committee, at any time and from time to time, subject
to the terms and conditions of the Plan, may grant Options to such Participants
and for such number of shares of Common Stock as it shall designate. Any
Participant may hold more than one Option under the Plan and any other plan of
the Corporation or Subsidiary. The Committee shall determine the general terms
and conditions of exercise, which shall be set forth in a Participant’s
Agreement. No Option granted hereunder may be exercised after the tenth
anniversary of the Grant Date. The Committee may designate any Option granted as
either an Incentive Stock Option or a Nonqualified Stock Option, or the
Committee may designate a portion of an Option as an Incentive Stock Option or a
Nonqualified Stock Option. Unless otherwise provided in a Participant’s
Agreement, Options are intended to satisfy the requirements of Code Section
162(m) and the regulations promulgated thereunder, to the extent applicable.

2.2 Incentive Stock Options. Any Option intended to constitute an Incentive
Stock Option shall comply with the requirements of this Section 2.2. An
Incentive Stock Option only may be granted to an Employee. No Incentive Stock
Option shall be granted with an exercise price below the Fair Market Value of
Common Stock on the Grant Date nor with an exercise term that extends beyond ten
(10) years from the Grant Date. An Incentive Stock Option shall not be granted
to any Participant who owns (within the meaning of Code Section 424(d)) stock of
the Corporation or any Subsidiary possessing more than 10% of the total combined
voting power of all classes of stock of the Corporation or a Subsidiary unless,
at the Grant Date, the exercise price for the Option is at least 110% of the
Fair Market Value of the shares subject to the Option and the Option, by its
terms, is not exercisable more than five (5) years after the Grant Date. The
aggregate Fair Market Value of the underlying Common Stock (determined at the
Grant Date) as to which Incentive Stock Options granted under the Plan
(including a plan of a Subsidiary) may first be exercised by a Participant in
any one calendar year shall not exceed $100,000. To the extent that an Option
intended to constitute an Incentive Stock Option shall violate the foregoing
$100,000 limitation (or any other limitation set forth in Code Section 422), the
portion of the Option that exceeds the $100,000 limitation (or violates any
other Code Section 422 limitation) shall be deemed to constitute a Nonqualified
Stock Option.

2.3 Option Price. The Committee shall determine the per share exercise price for
each Option granted under the Plan. No Option may be granted with an exercise
price below 100% of the Fair Market Value of Common Stock on the Grant Date.

2.4 Payment for Option Shares.

(a) The purchase price for shares of Common Stock to be acquired upon exercise
of an Option granted hereunder shall be paid in full in cash or by personal
check, bank draft or money order at the time of exercise; provided, however,
that in lieu of such form of payment, unless otherwise provided in a
Participant’s Agreement, payment may be made by (i) delivery to the Corporation
of outstanding shares of Common Stock that have been held at least six
(6) months, on such terms and conditions as may be specified in the
Participant’s Agreement; (ii) by delivery to the Corporation of a properly
executed exercise notice, acceptable to the Corporation, together with
irrevocable instructions to the Participant’s broker to deliver to the
Corporation sufficient cash to pay the exercise price and any applicable income
and employment withholding taxes, in accordance with a written agreement between
the Corporation and the brokerage firm; (iii) delivery of other consideration
approved by the Committee having a Fair Market Value on the exercise date equal
to the total purchase price; (iv) other means determined by the Committee; or
(v) any combination of the foregoing.

(b) Notwithstanding the foregoing, an Option may not be exercised by delivery to
or withholding by the Corporation of shares of Common Stock to the extent that
such delivery or withholding (i) would constitute a violation of the provisions
of any law or regulation (including the Sarbanes-Oxley Act of 2002), or (ii) if
there is a substantial likelihood that the use of such form of payment would
result in adverse accounting treatment to the Corporation under generally
accepted accounting principles. Until a Participant has been issued a
certificate or certificates for the shares of Common Stock so purchased (or the
book entry representing such shares has been made and such shares have been
deposited with the appropriate registered book-entry custodian), he or she shall
possess no rights as a record holder with respect to any such shares.

III. STOCK APPRECIATION RIGHTS

3.1 Grant of Stock Appreciation Rights. Stock Appreciation Rights may be
granted, held and exercised in such form and upon such general terms and
conditions as determined by the Committee on an individual basis. A Stock
Appreciation Right may be granted to a Participant with respect to such number
of shares of Common Stock of the Corporation as the Committee may determine.
Unless otherwise provided in a Participant’s Agreement, Stock Appreciation
Rights are intended to satisfy the requirements of Code Section 162(m) and the
regulations promulgated thereunder, to the extent applicable. No Stock
Appreciation Right shall be granted with an exercise term that extends beyond
ten (10) years from the Grant Date.

3.2 Exercise Price. The Committee shall determine the per share exercise price
for each Stock Appreciation Right granted under the Plan; provided, however,
that the exercise price of a Stock Appreciation Right shall not be less than
100% of the Fair Market Value of the shares of Common Stock covered by the Stock
Appreciation Right on the Grant Date.

3.3 Exercise of Stock Appreciation Rights. A Stock Appreciation Right shall be
deemed exercised upon receipt by the Corporation of written notice of exercise
from the Participant. The Committee shall specify in a Participant’s Agreement
whether payment shall be made in cash or shares of Common Stock, or any
combination thereof.

3.4 Stock Appreciation Right Payment. Upon exercise of a Stock Appreciation
Right, a Participant shall be entitled to payment from the Corporation, in cash,
shares, or partly in each (as determined by the Committee in accordance with any
applicable terms of the Agreement), of an amount equal to the difference between
(i) the aggregate Fair Market Value on the exercise date for the specified
number of shares being exercised, and (ii) the aggregate exercise price for the
specified number of shares being exercised.

3.5 Maximum Stock Appreciation Right Amount Per Share. The Committee may, at its
sole discretion, establish (at the time of grant) a maximum amount per share
which shall be payable upon the exercise of a Stock Appreciation Right,
expressed as a dollar amount.

IV. RESTRICTED STOCK AND UNITS

4.1 Grant of Restricted Stock and Restricted Stock Units. Subject to the terms
and conditions of the Plan, the Committee, at any time and from time to time,
may grant shares of Restricted Stock and Restricted Stock Units under the Plan
to such Participants and in such amounts as it shall determine.

4.2 Restricted Stock Agreement. Each Award of Restricted Stock or Restricted
Stock Units shall be evidenced by an Agreement that shall specify the terms of
the restrictions, including the Restriction Period, or periods, the number of
Common Stock shares or units subject to the Award, the purchase price for the
shares of Restricted Stock, if any, the form of consideration that may be used
to pay the purchase price of the Restricted Stock, including those specified in
Section 2.4, and such other general terms and conditions, including performance
goal(s), as the Committee shall determine.

4.3 Transferability. Except as provided in this Article IV and Section 10.3 of
the Plan, the shares of Common Stock subject to an Award of Restricted Stock or
Restricted Stock Units granted hereunder may not be transferred, pledged,
assigned, or otherwise alienated or hypothecated until the termination of the
applicable Restriction Period or for such period of time as shall be established
by the Committee and specified in the applicable Agreement, or upon the earlier
satisfaction of other conditions as specified by the Committee in its sole
discretion and as set forth in the applicable Agreement.

4.4 Other Restrictions. The Committee shall impose such other restrictions on
any shares of Common Stock subject to an Award of Restricted Stock or Restricted
Stock Units under the Plan as it may deem advisable including, without
limitation, restrictions under applicable Federal or State securities laws, and
the issuance of a legended certificate of Common Stock representing such shares
to give appropriate notice of such restrictions (or, if issued in book entry
form, a notation with similar restrictive effect with respect to the book entry
representing such shares). The Committee shall have the discretion to waive the
applicable Restriction Period with respect to all or any part of the Common
Stock subject to an Award of Restricted Stock or Restricted Stock Units that has
not been granted under Code Section 162(m).

4.5 Voting Rights. During the Restriction Period, Participants holding issued
and outstanding shares of Common Stock subject to a Restricted Stock Award may
exercise full voting rights with respect to the Restricted Stock, whether or not
such Award has Vested.

4.6 Dividends and Dividend Equivalents.

(a) Except as set forth below or in a Participant’s Agreement, during the
Restriction Period, a Participant shall be entitled to receive all dividends and
other distributions paid with respect to issued and outstanding shares of Common
Stock subject to an Award of Restricted Stock, whether or not such Award has
Vested. If any dividends or distributions are paid in shares of Common Stock
during the Restriction Period applicable to an Award of Restricted Stock, the
dividend or other distribution shares shall be subject to the same restrictions
on transferability as the shares of Common Stock with respect to which they were
paid.

(b) The Committee, in its discretion, may provide in the Agreement evidencing
any Restricted Stock Unit that the Participant shall be entitled to receive
Dividend Equivalents with respect to the payment of cash dividends on Common
Stock having a record date prior to the date on which Restricted Stock Units
held by such Participant are settled. Such Dividend Equivalents, if any, shall
be paid by crediting the Participant with additional whole Restricted Stock
Units as of the date of payment of such cash dividends on Common Stock. The
number of additional Restricted Stock Units (rounded to the nearest whole
number) to be so credited shall be determined by dividing (i) the amount of cash
dividends paid on such date with respect to the number of shares of Common Stock
represented by the Restricted Stock Units previously credited to the
Participant, by (ii) the Fair Market Value per share of Common Stock on such
date. Such additional Restricted Stock Units shall be subject to the same terms
and conditions and shall be settled in the same manner and at the same time (or
as soon thereafter as practicable) as the Restricted Stock Units originally
subject to the Award. In the event of a dividend or distribution paid in shares
of Common Stock or any other adjustment made upon a change in the capital
structure of the Corporation as described in Article IX, appropriate adjustments
shall be made in the Participant’s Restricted Stock Unit so that it represents
the right to receive upon settlement any and all new, substituted or additional
securities or other property (other than normal cash dividends) to which the
Participant would be entitled by reason of the shares of Common Stock issuable
upon settlement of the Restricted Stock Unit, and all such new, substituted or
additional securities or other property shall be immediately subject to the same
restrictions as are applicable to the Restricted Stock Unit.

4.7 Settlement of Restricted Stock Units. If a Restricted Stock Unit is payable
in Common Stock, the Corporation shall issue to a Participant on the date on
which Restricted Stock Units subject to the Participant’s Award Vest or on such
other date determined by the Committee, in its discretion, and set forth in the
Agreement, one share of Common Stock and/or any other new, substituted or
additional securities or other property pursuant to an adjustment described in
Section 9.1 for each Restricted Stock Unit then becoming Vested or otherwise to
be settled on such date, subject to the withholding of applicable taxes.
Notwithstanding any other provision in this Plan to the contrary, any Restricted
Stock Unit, whether settled in Common Stock, cash or other property, shall be
paid no later than two and a half (2 1/2) months after the later of the end of
the fiscal or calendar year in which the Restricted Stock Unit Vests.

4.8 Restricted Stock Unit Bonus Deferral Awards. A Participant designated by the
Committee who is an insider or otherwise among a select group of highly
compensated Employees may irrevocably elect, prior to a date specified by the
Committee and in compliance with Code Section 409A, to defer receipt of any cash
bonus or cash Annual Incentive Award payable by the Corporation (subject to any
minimum or maximum limitations imposed by the Committee), which shall be
credited to the Participant in the form of Restricted Stock Units, subject to
such terms and other conditions established by the Committee as set forth in the
associated Agreement. In consideration for foregoing bonus or Annual Incentive
Award compensation, the dollar amount deferred by a Participant may be increased
by the Committee up to fifty (50) percent (or such lesser percentage specified
by the Committee), for purposes of determining the number of Restricted Stock
Units in the Participant’s Award. The electing Participant shall be credited, as
of the date specified in the Agreement, with a number of Restricted Stock Units,
equal to the amount of the deferral (increased by any Committee match), divided
by the Fair Market Value on the applicable date.

V. PERFORMANCE AWARDS

5.1 Grant of Performance Awards. The Committee, at its discretion, may grant
Performance Awards to Participants and may determine, on an individual or group
basis, the performance goal or goals to be attained pursuant to each Performance
Award.

5.2 Terms of Performance Awards.

(a) Performance Awards shall consist of rights to receive cash, Common Stock,
other property or a combination of each, if designated performance goal(s) are
achieved. The terms of a Participant’s Performance Award shall be set forth in a
Participant’s Agreement. Each Agreement shall specify the performance goal or
goals, which may include the Performance Measures, applicable to a particular
Participant or group of Participants, the period over which the targeted goal(s)
are to be attained, the payment schedule if the goal(s) are attained, and any
other general terms as the Committee shall determine and conditions applicable
to an individual Performance Award. The Committee, at its discretion, may waive
all or part of the conditions, goals and restrictions applicable to the receipt
of full or partial payment of a Performance Award that has not been granted as a
Code Section 162(m) Award.

(b) Performance Awards may be granted as Performance Shares or Performance
Units, at the discretion of the Committee. Performance Awards shall be paid no
later than two and a half (2 1/2) months after the later of the end of the
fiscal or calendar year in which the Performance Award is no longer subject to a
substantial risk of forfeiture.

(i) In the case of Performance Shares, the Participant shall receive a legended
certificate of Common Stock, restricted from transfer prior to the satisfaction
of the designated performance goals and restrictions (or shares may be issued in
book entry form with a notation having similar restrictive effect with respect
to the book entry representing such shares), as determined by the Committee and
specified in the Participant’s Agreement. Prior to satisfaction of the
performance goal(s) and restrictions, the Participant shall be entitled to vote
the Performance Shares to the extent such shares are issued and outstanding.
Further, any dividends paid on such shares during the performance period
automatically shall be reinvested on behalf of the Participant in additional
Performance Shares under the Plan, and such additional shares shall be subject
to the same performance goals and restrictions as the other shares under the
Performance Share Award.

(ii) In the case of Performance Units, the Participant shall receive an
Agreement from the Committee that specifies the performance goal(s) and
restrictions that must be satisfied before the Corporation shall issue the
payment, which may be cash, a designated number of shares of Common Stock, other
property, or a combination thereof.

              VI.    ANNUAL INCENTIVE AWARDS
 
    6.1      Grant of Annual Incentive Awards.
 
           

(a) The Committee, at its discretion, may grant Annual Incentive Awards to such
Participants as it may designate from time to time. The terms of a Participant’s
Annual Incentive Award shall be set forth in the Participant’s individual
Agreement. Each Agreement shall specify such general terms and conditions as the
Committee shall determine.

(b) The determination of Annual Incentive Awards for a given year may be based
upon the attainment of specified levels of Corporation or Subsidiary performance
as measured by pre-established, objective performance criteria determined at the
discretion of the Committee, including any or all of the Performance Measures.

(c) The Committee shall (i) select those Participants who shall be eligible to
receive an Annual Incentive Award, (ii) determine the performance period,
(iii) determine target levels of performance, and (iv) determine the level of
Annual Incentive Award to be paid to each selected Participant upon the
achievement of each performance level. The Committee generally shall make the
foregoing determinations prior to the commencement of services to which an
Annual Incentive Award relates (or within the permissible time-period
established under Code Section 162(m)), to the extent applicable, and while the
outcome of the performance goals and targets is uncertain.

6.2 Payment of Annual Incentive Awards.

(a) Annual Incentive Awards shall be paid in cash, shares of Common Stock or
other property, at the discretion of the Committee. Payments shall be made
following a determination by the Committee that the performance targets were
attained and shall be made within two and a half (21/2) months after the later
of the end of the fiscal or calendar year in which the Annual Incentive Award is
no longer subject to a substantial risk of forfeiture.

(b) The amount of an Annual Incentive Award to be paid upon the attainment of
each targeted level of performance shall equal a percentage of a Participant’s
base salary for the fiscal year, a fixed dollar amount, or such other formula,
as determined by the Committee.

VII. CODE SECTION 162(m) PERFORMANCE MEASURE AWARDS

7.1 Awards Granted Under Code Section 162(m). The Committee, at its discretion,
may designate that a Restricted Stock, Restricted Stock Unit, Performance Share,
Performance Unit or Annual Incentive Award shall be granted as a Code Section
162(m) Award. Such an Award must comply with the following additional
requirements, which shall control over any other provision that pertains to such
Award under Articles IV, V and VI.

(a) Each Code Section 162(m) Award shall be based upon the attainment of
specified levels of pre-established, objective Performance Measures that are
intended to satisfy the performance based compensation requirements of Code
Section 162(m) and the regulations promulgated thereunder. Further, at the
discretion of the Committee, an Award also may be subject to goals and
restrictions in addition to the Performance Measures.

(b) For each Code Section 162(m) Award, the Committee shall (i) select the
Participant who shall be eligible to receive a Code Section 162(m) Award,
(ii) determine the applicable performance period, (iii) determine the target
levels of the Corporation or Subsidiary Performance Measures, and (iv) determine
the number of shares of Common Stock or cash or other property (or combination
thereof) subject to an Award to be paid to each selected Participant. The
Committee shall make the foregoing determinations prior to the commencement of
services to which an Award relates (or within the permissible time period
established under Code Section 162(m)) and while the outcome of the performance
goals and targets is uncertain.

7.2 Attainment of Code Section 162(m) Goals.

(a) After each performance period, the Committee shall certify, in writing
(which writing may include the minutes for any meeting of the Committee): (i) if
the Corporation has attained the performance targets, and (ii) the number of
shares pursuant to the Award that are to become freely transferable, if
applicable, or the cash or other property payable under the Award. The Committee
shall have no discretion to waive all or part of the conditions, goals and
restrictions applicable to the receipt of full or partial payment of an Award
except in the case of the death or Disability of a Participant.

(b) Notwithstanding the foregoing, the Committee may, in its discretion, reduce
any Award based on such factors as may be determined by the Committee,
including, without limitation, a determination by the Committee that such a
reduction is appropriate in light of pay practices of competitors, or the
performance of the Corporation, a Subsidiary or a Participant relative to the
performance of competitors, or performance with respect to the Corporation’s
strategic business goals.

7.3 Individual Participant Limitations. Subject to adjustment as provided in
Section 9.1, no Participant in any one fiscal year of the Corporation may be
granted (a) Options or Stock Appreciation Rights with respect to more than two
hundred thousand (200,000) shares of Common Stock; (b) Restricted Stock or
Restricted Stock Units that are denominated in shares of Common Stock with
respect to more than one hundred thousand (100,000) shares; (c) Performance
Awards that are denominated in shares of Common Stock with respect to more than
one hundred thousand (100,000) shares; and (d) an Annual Incentive Award
denominated in shares of Common Stock with respect to more than one hundred
thousand (100,000) shares. The maximum dollar value payable to any Participant
in any one fiscal year of the Corporation with respect to Restricted Stock
Units, Performance Awards or Annual Incentive Awards that are valued in property
other than Common Stock is the lesser of three million dollars ($3,000,000) or
four (4) times the Participant’s base salary for the fiscal year. If an Award is
cancelled, the cancelled Award shall continue to be counted towards the
applicable limitations.

              VIII.   TERMINATION OF EMPLOYMENT OR SERVICES
 
    8.1     Options and Stock Appreciation Rights.
 
           

(a) If, prior to the date when an Option or Stock Appreciation Right first
becomes Vested, a Participant’s employment or services are terminated for any
reason, the Participant’s right to exercise the Option or Stock Appreciation
Right shall terminate and all rights thereunder shall cease, unless provided
otherwise in a Participant’s Agreement.

(b) If, on or after the date when an Option or Stock Appreciation Right first
becomes Vested, a Participant’s employment or services are terminated for any
reason other than death or Disability, the Participant shall have the right,
within the earlier of (i) the expiration of the Option or Stock Appreciation
Right, and (ii) three (3) months after termination of employment or services, as
applicable, to exercise the Option or Stock Appreciation Right to the extent
that it was exercisable and unexercised on the date of the Participant’s
termination of employment or services, subject to any other limitation on the
exercise of the Option or Stock Appreciation Right in effect on the date of
exercise. The Committee may designate in a Participant’s Agreement that an
Option or Stock Appreciation Right shall terminate at an earlier or later time
than set forth above.

(c) If, on or after the date when an Option or Stock Appreciation Right first
becomes Vested, a Participant’s employment or services are terminated due to
death while an Option or Stock Appreciation Right is still exercisable, the
person or persons to whom the Option or Stock Appreciation Right shall have been
transferred by will or the laws of descent and distribution, shall have the
right within the exercise period specified in the Participant’s Agreement to
exercise the Option or Stock Appreciation Right to the extent that it was
exercisable and unexercised on the Participant’s date of death, subject to any
other limitation on exercise in effect on the date of exercise. The beneficial
tax treatment of an Incentive Stock Option may be forfeited if the Option is
exercised more than one year after a Participant’s date of death.

(d) If, on or after the date when an Option or Stock Appreciation Right first
becomes Vested, a Participant’s employment or services are terminated due to
Disability, the Participant shall have the right, within the exercise period
specified in the Participant’s Agreement, to exercise the Option or Stock
Appreciation Right to the extent that it was exercisable and unexercised on the
date of the Participant’s termination of employment or services due to
Disability, subject to any other limitation on the exercise of the Option or
Stock Appreciation Right in effect on the date of exercise. If the Participant
dies after termination of employment or services, as applicable, while the
Option or Stock Appreciation Right is still exercisable, the Option or Stock
Appreciation Right shall be exercisable in accordance with the terms of
paragraph (c), above.

(e) The Committee, at the time of a Participant’s termination of employment or
services, may accelerate a Participant’s right to exercise an Option or, subject
to Code Section 409A and Section 2.1 of the Plan, may extend an Option term.

(f) Shares subject to Options and Stock Appreciation Rights that are not
exercised in accordance with the provisions of (a) through (e) above shall
expire and be forfeited by the Participant as of their expiration date and shall
become available for new Awards under the Plan as of such date.

8.2 Restricted Stock and Restricted Stock Units. If a Participant’s employment
or services are terminated for any reason, the Participant’s right to shares of
Common Stock subject to a Restricted Stock or Restricted Stock Unit Award that
are still subject to a Restriction Period automatically shall terminate and be
forfeited by the Participant (or, if the Participant was required to pay a
purchase price for the Restricted Stock, other than for the performance of
services, the Corporation shall have the option to repurchase any shares
acquired by the Participant which are still subject to the Restriction Period
for the purchase price paid by the Participant) and, subject to Section 1.6,
said shares shall be available for new Awards under the Plan as of such
termination date. Provided, however, that the Committee, in its sole discretion,
may provide in a Participant’s Agreement for the continuation of a Restricted
Stock Award or Restricted Stock Unit after a Participant’s employment or
services are terminated or may waive or, subject to Code Section 409A, change
the remaining restrictions or add additional restrictions, as it deems
appropriate. The Committee shall not waive any restrictions on a Code Section
162(m) Restricted Stock or Restricted Stock Unit Award, but the Committee may
provide in a Participant’s Code Section 162(m) Restricted Stock or Restricted
Stock Unit Agreement or otherwise that upon the Participant’s termination of
employment due to (a) death, or (b) Disability prior to the termination of the
Restriction Period, that the performance goals and restrictions shall be deemed
to have been satisfied on terms determined by the Committee.

8.3 Performance Awards. Performance Awards shall expire and be forfeited by a
Participant upon the termination of Participant’s employment or services for any
reason, and, subject to Section 1.6, shall be available for new Awards under the
Plan as of such termination date. Provided, however, that the Committee, in its
discretion, may provide in a Participant’s Agreement or, subject to Code
Section 409A, may provide otherwise for the continuation of a Performance Award
after a Participant’s employment or services are terminated or may waive or
change all or part of the conditions, goals and restrictions applicable to such
Performance Award. Notwithstanding the foregoing, the Committee shall not waive
any restrictions on a Code Section 162(m) Performance Award, but the Committee
may provide in an Participant’s Code Section 162(m) Performance Share Agreement
or otherwise that upon the Participant’s termination of employment due to
(a) death, or (b) Disability prior to the attainment of the associated
performance goals and restrictions, that the performance goals and restrictions
shall be deemed to have been satisfied on terms determined by the Committee.

8.4 Annual Incentive Awards.

(a) A Participant who has been granted an Annual Incentive Award and whose
employment or services terminate due to Disability or death prior to the end of
the Corporation’s fiscal year shall be entitled to a pro-rated payment of the
Annual Incentive Award, based on the number of full months of employment or
services, as applicable during the fiscal year. Any such prorated Annual
Incentive Award shall be paid at the same time as regular Annual Incentive
Awards and, in the event of the Participant’s death, to the Participant’s
designated beneficiary.

(b) Except as otherwise determined by the Committee in its discretion, a
Participant who has been granted an Annual Incentive Award and resigns or is
terminated for any reason (other than Disability or death), before the payment
date of an Annual Incentive Award, shall forfeit the right to the Annual
Incentive Award payment for that fiscal year.

8.5 Other Provisions. The transfer of an Employee from one corporation to
another among the Corporation and any of its Subsidiaries, or a leave of absence
under the leave policy of the Corporation or any of its Subsidiaries shall not
be a termination of employment for purposes of the Plan, unless a provision to
the contrary is expressly stated by the Committee in a Participant’s Agreement
issued under the Plan.

IX. ADJUSTMENTS AND CHANGE IN CONTROL

9.1 Adjustments. In the event of a merger, reorganization, consolidation,
recapitalization, dividend or distribution (whether in cash, shares or other
property), stock split, reverse stock split, spin-off or similar transaction or
other change in corporate structure affecting the Common Stock or the value
thereof, such adjustments and other substitutions shall be made to the Plan and
Awards as the Committee, in its sole discretion, deems equitable or appropriate,
including adjustments in the aggregate number, class and kind of securities that
may be delivered under the Plan and, in the aggregate or to any one Participant,
in the number, class, kind and option or exercise price of securities subject to
outstanding Awards granted under the Plan (including, if the Committee deems
appropriate, the substitution of similar options to purchase the shares of, or
other awards denominated in the shares of, another company, as the Committee may
determine to be appropriate in its sole discretion).

9.2 Change in Control.

(a) Notwithstanding anything contained herein to the contrary, the Committee, in
its discretion, may provide in a Participant’s Agreement or otherwise that upon
a Change in Control, any or all of the following shall occur: (i) any
outstanding Option or Stock Appreciation Right granted hereunder immediately
shall become fully Vested and exercisable, regardless of any installment
provision applicable to such Option or Stock Appreciation Right; (ii) the
remaining Restriction Period on any Shares of Common Stock subject to a
Restricted Stock or Restricted Stock Unit Award granted hereunder immediately
shall lapse and the shares shall become fully transferable, subject to any
applicable Federal or State securities laws; (iii) all performance goals and
conditions shall be deemed to have been satisfied and all restrictions shall
lapse on any outstanding Performance Awards, which immediately shall become
payable (either in full or pro-rata based on the portion of the applicable
performance period completed as of the Change in Control); (iv) all performance
targets and performance levels shall be deemed to have been satisfied for any
outstanding Annual Incentive Awards, which immediately shall become payable
(either in full or pro-rata based on the portion of the applicable performance
period completed as of the Change in Control); or (v) such other treatment as
the Committee may determine.

(b) The Committee may, in its sole discretion and without the consent of any
Participant, determine that, upon the occurrence of a Change in Control, each or
any Option or Stock Appreciation Right outstanding immediately prior to the
Change in Control shall be cancelled in exchange for a payment with respect to
each Vested share of Common Stock subject to such cancelled Option or Stock
Appreciation Right in (i) cash, (ii) stock of the Corporation or of a
corporation or other business entity a party to the Change in Control, or
(iii) other property which, in any such case, shall be in an amount having a
Fair Market Value equal to the excess of the Fair Market Value of the
consideration to be paid per share of Common Stock in the Change in Control
transaction over the exercise price per share under such Option or Stock
Appreciation Right (the “Spread”). In the event such determination is made by
the Committee, the Spread (reduced by applicable withholding taxes, if any)
shall be paid to a Participant in respect of the Participant’s cancelled Options
and Stock Appreciation Rights as soon as practicable following the date of the
Change in Control.

(c) Notwithstanding the foregoing, the Committee, in its discretion, may provide
in a Participant’s Agreement or otherwise that, if in the event of a Change in
Control the successor company assumes or substitutes for an Option, Stock
Appreciation Right, Restricted Stock, or Restricted Stock Unit payable in shares
of Common Stock, Performance Award payable in shares of Common Stock or Annual
Incentive Award payable in shares of Common Stock, then each such outstanding
Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit,
Performance Award or Annual Incentive Award shall not be accelerated as
described in Section 9.2(a). For the purposes of this Section 9.2(c), such an
Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit,
Performance Award or Annual Incentive Award shall be considered assumed or
substituted for if following the Change in Control the Award confers the right
to purchase or receive, for each share of Common Stock subject to such Option,
Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance
Award or Annual Incentive Award immediately prior to the Change in Control, the
consideration (whether stock, cash or other securities or property) received in
the transaction constituting a Change in Control by holders of shares of Common
Stock for each share held on the effective date of such transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares); provided, however, that
if such consideration received in the transaction constituting a Change in
Control is not solely common stock of the successor company, the Committee may,
with the consent of the successor company, provide that the consideration to be
received upon the exercise or vesting of such Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Award or Annual Incentive
Award, for each share of Common Stock subject thereto, shall be solely common
stock of the successor company substantially equal in fair market value to the
per share consideration received by holders of shares of Common Stock in the
transaction constituting a Change in Control. The determination of such
substantial equality of value of consideration shall be made by the Committee in
its sole discretion and its determination shall be conclusive and binding.

X. MISCELLANEOUS

10.1 Partial Exercise/Fractional Shares. The Committee may permit, and shall
establish procedures for, the partial exercise of Options and Stock Appreciation
Rights granted under the Plan. No fractional shares shall be issued in
connection with the exercise of an Option or Stock Appreciation Right or payment
of a Performance Award, Restricted Stock Award, Restricted Stock Unit, or Annual
Incentive Award; instead, the Fair Market Value of the fractional shares shall
be paid in cash, or at the discretion of the Committee, the number of shares
shall be rounded down to the nearest whole number of shares and any fractional
shares shall be disregarded.

10.2 Rights Prior to Issuance of Shares. No Participant shall have any rights as
a shareholder with respect to shares covered by an Award until the issuance of a
stock certificate for such shares (or book entry representing such shares has
been made and such shares have been deposited with the appropriate registered
book-entry custodian). No adjustment shall be made for dividends or other rights
with respect to such shares for which the record date is prior to the date the
certificate is issued except as otherwise provided in the Plan or a
Participant’s Agreement or by the Committee.

10.3 Non-Assignability; Certificate Legend; Removal.

(a) Except as described below or as otherwise determined by the Committee in a
Participant’s Agreement, no Award shall be transferable by a Participant except
by will or the laws of descent and distribution, and an Option or Stock
Appreciation Right shall be exercised only by a Participant during the lifetime
of the Participant. Notwithstanding the foregoing, a Participant may assign or
transfer an Award that is not an Incentive Stock Option with the consent of the
Committee (each transferee thereof, a “Permitted Assignee”); provided that such
Permitted Assignee shall be bound by and subject to all of the terms and
conditions of the Plan and any Agreement relating to the transferred Award and
shall execute an agreement satisfactory to the Corporation evidencing such
obligations; and provided further that such Participant shall remain bound by
the terms and conditions of the Plan.

(b) Each certificate representing shares of Common Stock subject to an Award, to
the extent a certificate is issued, shall bear the following legend:

The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of law, is subject
to certain restrictions on transfer set forth in the ITC Holdings Corp. 2006
Long Term Incentive Plan (“Plan”), rules and administrative guidelines adopted
pursuant to such Plan [and an Agreement dated      ,      ]. A copy of the Plan,
such rules [and such Agreement] may be obtained from the Vice President and
General Counsel of International Transmission Company.

If shares are issued in book entry form, a notation to the same restrictive
effect as the legend shall be placed on the Transfer Agent’s books in connection
with such shares.

(c) Subject to applicable Federal and State securities laws, issued shares of
Common Stock subject to an Award shall become freely transferable by the
Participant after all applicable restrictions, limitations, performance
requirements or other conditions have terminated, expired, lapsed or been
satisfied. Once such issued shares of Common Stock are released from such
restrictions, limitations, performance requirements or other conditions, the
Participant shall be entitled to have the legend required by this Section 10.3
removed from the applicable Common Stock certificate (or notation removed from
such book entry).

10.4 Securities Laws.

(a) Anything to the contrary herein notwithstanding, the Corporation’s
obligation to sell and deliver Common Stock pursuant to the exercise of an
Option or Stock Appreciation Right or deliver Common Stock pursuant to a
Restricted Stock Award, Restricted Stock Unit, Performance Award or Annual
Incentive Award is subject to such compliance with Federal and State laws, rules
and regulations applying to the authorization, issuance or sale of securities as
the Corporation deems necessary or advisable. The Corporation shall not be
required to sell and deliver or issue Common Stock unless and until it receives
satisfactory assurance that the issuance or transfer of such shares shall not
violate any of the provisions of the Securities Act or the Exchange Act, or the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder or those of the Stock Exchange or any stock exchange on which the
Common Stock may be listed, the provisions of any State laws governing the sale
of securities, or that there has been compliance with the provisions of such
acts, rules, regulations and laws.

(b) The Committee may impose such restrictions on any shares of Common Stock
acquired pursuant to the exercise of an Option or Stock Appreciation Right or
the grant of Restricted Stock or Restricted Stock Units or the payment of a
Performance Award or Annual Incentive Award under the Plan as it may deem
advisable, including, without limitation, restrictions (i) under applicable
Federal securities laws; (ii) under the requirements of the Stock Exchange or
any other securities exchange or recognized trading market or quotation system
upon which such shares of Common Stock are then listed or traded; and
(iii) under any blue sky or State securities laws applicable to such shares.

10.5 Withholding Taxes.

(a) The Corporation shall have the right to withhold from a Participant’s
compensation or require a Participant to remit sufficient funds to satisfy
applicable withholding for income and employment taxes upon the exercise of an
Option or Stock Appreciation Right or the lapse of the Restriction Period on a
Restricted Stock Award, Restricted Stock Unit, or the payment of a Performance
Award or Annual Incentive Award. A Participant may in order to fulfill the
withholding obligation tender previously-acquired shares of Common Stock that
have been held at least six (6) months or have shares of stock withheld from the
exercise, provided that the shares have an aggregate Fair Market Value
sufficient to satisfy in whole or in part the applicable withholding taxes. The
broker assisted exercise procedure described in Section 2.4 may also be utilized
to satisfy the withholding requirements related to the exercise of an Option. At
no point shall the Corporation withhold from the exercise of an Option more
shares than are necessary to meet the established tax withholding requirements
of federal, state and local obligations.

(b) Notwithstanding the foregoing, a Participant may not use shares of Common
Stock to satisfy the withholding requirements to the extent that (i) there is a
substantial likelihood that the use of such form of payment or the timing of
such form of payment would subject the Participant to a substantial risk of
liability under Section 16 of the Exchange Act; (ii) such withholding would
constitute a violation of the provisions of any law or regulation (including the
Sarbanes-Oxley Act of 2002); or (iii) there is a substantial likelihood that the
use of such form of payment would result in adverse accounting treatment to the
Corporation under generally accepted accounting principles.

10.6 Termination and Amendment.

(a) The Board may terminate the Plan, or the granting of Awards under the Plan,
at any time. No new Awards shall be granted under the Plan after February 7,
2012.

(b) The Board may amend or modify the Plan at any time and from time to time,
and the Committee may amend or modify the terms of an outstanding Agreement at
any time and from time to time, but no amendment or modification, without the
approval of the shareholders of the Corporation, shall (i) materially increase
the benefits accruing to Participants under the Plan; (ii) increase the amount
of Common Stock for which Awards may be made under the Plan, except as permitted
under Sections 1.7 and Article 9; or (iii) change the provisions relating to the
eligibility of individuals to whom Awards may be made under the Plan. In
addition, if the Corporation’s Common Stock is listed on a Stock Exchange, the
Board may not amend the Plan in a manner requiring approval of the shareholders
of the Corporation under the rules of the Stock Exchange without obtaining the
approval of the shareholders.

(c) No amendment, modification, or termination of the Plan or an outstanding
Agreement shall in any manner adversely affect any then outstanding Award under
the Plan without the consent of the Participant holding such Award, except as
set forth in any Agreement relating to the Award, or to bring the Plan and/or an
Award into compliance with the requirements of Code Section 409A or to qualify
for an exemption under Code Section 409A.

10.7 Code Section 409A. It is intended that Awards granted under the Plan shall
be exempt from or in compliance with Code Section 409A, and the Board reserves
the right to amend the terms of the Plan, and the Committee reserves the right
to amend any outstanding Agreement if necessary either to exempt such Award from
Code Section 409A or comply with the requirements of Code Section 409A, as
applicable. Further, Plan Participants who are “Specified Employees” (as defined
under Code Section 409A and IRS guidance issued thereunder), shall be required
to delay payment of an Award for six (6) months after separation from service to
the extent such Award is governed by Code Section 409A, and the delay is
required thereunder.

10.8 Effect on Employment or Services. Neither the adoption of the Plan nor the
granting of any Award pursuant to the Plan shall be deemed to create any right
in any individual to be retained or continued in the employment or services of
the Corporation or a Subsidiary.

10.9 Use of Proceeds. The proceeds received from the sale of Common Stock
pursuant to the Plan shall be used for general corporate purposes of the
Corporation.

10.10 Severability. If any one or more of the provisions (or any part thereof)
of this Plan or of any Agreement issued hereunder, shall be held to be invalid,
illegal or unenforceable in any respect, such provision shall be modified so as
to make it valid, legal and enforceable, and the validity, legality and
enforceability of the remaining provisions (or any part thereof) of the Plan or
of any Agreement shall not in any way be affected or impaired thereby. The Board
may, without the consent of any Participant, and in a manner determined
necessary solely in the discretion of the Board, amend the Plan and any
outstanding Agreement as the Corporation deems necessary to ensure the Plan and
all Awards remain valid, legal or enforceable in all respects.

10.11 Beneficiary Designation. Subject to local laws and procedures, each
Participant may file a written beneficiary designation with the Corporation
stating who is to receive any benefit under the Plan to which the Participant is
entitled in the event of such Participant’s death before receipt of any or all
of a Plan benefit. Each designation shall revoke all prior designations by the
same Participant, be in a form prescribed by the Corporation, and become
effective only when filed by the Participant in writing with the Corporation
during the Participant’s lifetime. If a Participant dies without an effective
beneficiary designation for a beneficiary who is living at the time of the
Participant’s death, the Corporation shall pay any remaining unpaid benefits to
the Participant’s legal representative.

10.12 Unfunded Obligation. A Participant shall have the status of a general
unsecured creditor of the Corporation. Any amounts payable to a Participant
pursuant to the Plan shall be unfunded and unsecured obligations for all
purposes. The Corporation shall not be required to segregate any monies from its
general funds, or to create any trusts, or establish any special accounts with
respect to such obligations. The Corporation shall retain at all times
beneficial ownership of any investments, including trust investments, which the
Corporation may make to fulfill its payment obligations hereunder. Any
investments or the creation or maintenance of any trust or any Participant
account shall not create or constitute a trust or fiduciary relationship between
the Committee or the Corporation and a Participant, or otherwise create any
Vested or beneficial interest in any Participant or the Participant’s creditors
in any assets of the Corporation. A Participant shall have no claim against the
Corporation for any changes in the value of any assets which may be invested or
reinvested by the Corporation with respect to the Plan.

10.13 Approval of Plan. The Plan shall be subject to the approval of the holders
of at least a majority of the votes cast at a duly held meeting of shareholders
of the Corporation held within twelve (12) months after adoption of the Plan by
the Board. No Award granted under the Plan may be exercised or paid in whole or
in part unless the Plan has been approved by the shareholders as provided
herein. If not approved by shareholders within twelve (12) months after approval
by the Board, the Plan and any Awards granted under the Plan shall be null and
void, with no further force or effect.

10.14 Governing Law. Except to the extent governed by applicable federal law,
the validity, interpretation, construction and performance of the Plan and
Agreements under the Plan, shall be governed by the laws of the State of
Michigan, without regard to its conflict of law rules.

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IN WITNESS WHEREOF, this ITC Holdings Corp. 2006 Long Term Incentive Plan, as
amended and restated, has been executed on behalf of the Corporation on this
21st day of May, 2008.

ITC HOLDINGS CORP.

By:/s/ Linda Blair
Its: Executive Vice President and Chief
Business Officer

BOARD APPROVAL: 02/08/06
SHAREHOLDER APPROVAL: 05/17/06
BOARD APPROVAL OF AMENDED AND RESTATED PLAN: 3/25/08
SHAREHOLDER APPROVAL OF AMENDED AND RESTATED PLAN: 5/21/08

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