Exhibit 10.8
FIRST AMENDMENT TO
MANAGEMENT STOCKHOLDERS’ AGREEMENT
     THIS FIRST AMENDMENT (the “Amendment”) to the Management Stockholders’
Agreement, which is effective as of September 30, 2005, among ITC Holdings
Corp., a Michigan corporation (the “Company”) and the person identified on the
signature page attached hereto (the “Management Stockholder”, and such
agreement, the “Stockholder’s Agreement”), is made effective as of the same day
as the effective date of the Stockholder’s Agreement. This First Amendment to
the terms of the Stockholder’s Agreement is effected by the Company and the
Management Stockholder in accordance with the provisions of Section 18 of the
Stockholder’s Agreement.
     Defined terms not expressly defined in this Amendment shall have the same
meanings as set forth in the Stockholder’s Agreement. The restrictions on the
effectiveness of the Stockholder’s Agreement shall apply with equal force and
effect to this Amendment.
WITNESSETH:
          WHEREAS, in connection with the Management Stockholder’s employment
with the Company, the Company has determined that it is advisable to agree to
amend the terms of the Stockholder’s Agreement solely as provided below.
          NOW, THEREFORE, The parties hereto hereby agree as follows:
Section 1. Amendments to Stockholder’s Agreement
          1.1 Section 2(a). Section 2(a), clause (x) of the Stockholder’s
Agreement is hereby deleted in its entirety and replaced with the following
clause:
          “(x) a transfer made pursuant to Section 3, 4 or 6 hereof,”
          1.2 Subsection 5(a). Section 5(a) of the Stockholder’s Agreement is
hereby deleted in its entirety and replaced with the following:
          (a) “Except as otherwise provided herein, if, prior to the fifth
anniversary of the Effective Date, the Management Stockholder is still in the
employ of the Company (and/or, if applicable, its subsidiaries) and the
Management Stockholder’s employment is terminated as a result of the death or
Permanent Disability of the Management Stockholder, then the applicable
Management Stockholder Entity shall have the right to:
          (i) With respect to the Stock, notwithstanding anything in this
Agreement to the contrary, sell or otherwise dispose of all or any portion of
the Stock other than to the Company; and

 

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          (ii) With respect to the Options, receive from the Company, on one
occasion within sixty (60) days (“the Option Exercise Period”) following the
date of the death or Permanent Disability of the Management Stockholder, in
exchange for all of the exercisable Options then held by the applicable
Management Stockholder Entities at the time of termination of the Management
Stockholder’s employment as a result of the death or Permanent Disability of the
Management Stockholder, if any, a number of shares of Stock equal to the
quotient of (x) the product of (A) the excess, if any, of the Fair Market Value
Per Share over the Option Exercise Price and (B) the number of Exercisable
Option Shares, divided by (y) the Fair Market Value Per Share, which Options
shall be terminated in exchange for such shares of stock (the “Net Settled
Stock”). In the event the foregoing value is zero or a negative number, all
outstanding exercisable Options shall be automatically terminated without any
payment in respect thereof. Notwithstanding anything to the contrary in this
Agreement, the Management Stockholder Entities may sell or otherwise dispose of
all or any portion of the Net Settled Stock other than to the Company.
Notwithstanding anything set forth in this Section 5(a) to the contrary, the
Management Stockholder Entities hereby acknowledge that their ability to sell or
otherwise dispose of all or any portion of their Stock or Net Settled Stock, as
provided above, does not constitute a waiver of, among other things, any of the
requirements otherwise imposed on the Management Stockholder Entities with
respect to the sale or other disposition of Stock set forth in Section 2 of the
Agreement.”
          1.3 Subsection 5(b). Subsection 5(b) of the Stockholder’s Agreement is
hereby deleted in its entirety and replaced with the following:
          “In the event the applicable Management Stockholder Entities intend to
exercise their rights pursuant to Section 5(a)(ii), such Management Stockholder
Entities shall send written notice to the Company, at any time during the Option
Exercise Period, of their intention to exercise the Options in the manner set
forth in Section 5(a)(ii) above and receive the Net Settled Stock (the “Option
Exercise Notice”). The completion of the exchanges of the Options for the Net
Settled Stock shall take place at the principal office of the Company on the
tenth business day after the giving of the applicable Option Exercise Notice.
The Net Settled Stock shall be delivered to the applicable Management
Stockholder Entities, both against delivery of certificates or other instruments
representing the Stock so purchased and appropriate documents canceling the
Options so terminated appropriately endorsed or executed by the applicable
Management Stockholder Entities or any duly authorized representative.“
          1.4 Subsection 5(c). Subsection 5(c) of the Stockholder’s Agreement is
hereby deleted in its entirety and replaced with the following:
          “(c) Notwithstanding anything in Section 5(a) to the contrary, if
there exists and is continuing an Event (as defined below), the Company shall
not be obligated to issue the Net Settled Stock until the Repurchase Eligibility
Date (as defined below); provided, however, that the number of Exercisable
Option Shares for purposes of calculating the Net Settled Stock payable under
this Section 5(c) shall be the number of Exercisable Option Shares specified in
the Option Exercise Notice and held by the applicable Management Stockholder
Entities at the time of delivery of an Option Exercise Notice in accordance with
Section 5(b) hereof. All Options

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exercisable as of the date of an Option Exercise Notice shall continue to be
exercisable until the issuance of Net Settled Stock pursuant to such Option
Exercise Notice, provided that to the extent any Options are exercised after the
date of such Option Exercise Notice, the number of Exercisable Option Shares for
purposes of calculating the Net Settled Stock shall be reduced accordingly.
          For purposes of this Agreement, the following terms used herein shall
have the following meanings: “Event” shall mean any default or an event of
default on the part of the Company or any subsidiary of the Company under any
loan, guarantee or other agreement under which the Company or any subsidiary of
the Company has borrowed money or if any exercise of an Option or issuance of
Net Settled Stock referred to in Section 5(a) above would result in a default or
an event of default on the part of the Company or any subsidiary of the Company
under any such agreement or if exercise of an Option or issuance of Net Settled
Stock pursuant to Section 5(a) above would not be permitted at such time under
the Michigan Business Corporation Act (the “MBCA”) or would otherwise violate
the MBCA at such time (or if the Company reincorporates in another state, the
business corporation law of such state); and “Repurchase Eligibility Date” shall
mean the first business day which is 10 calendar days after all Events have
ceased to exist.”
          1.5 Section 6. All references to the “Section 5 Repurchase Price”
contained in Section 6 of the Stockholder’s Agreement are hereby deleted and
replaced with the phrase “Fair Market Value.”
          1.6 Section 7, Definitions.
          (a) “Option Excess Price”. The definition of “Option Excess Price” as
set forth in Section 7 of the Stockholder’s Agreement is hereby deleted in its
entirety and replaced it with the following:
     “Option Excess Price” shall mean, with respect to any Option, the aggregate
amount paid or payable by the Company in respect of Exercisable Option Shares
pursuant to the applicable provision of Section 6.”
          (b) “Repurchase Calculation Date”. The definition of “Repurchase
Calculation Date” as set forth in Section 7 of the Stockholder’s Agreement is
hereby deleted in its entirety and replaced it with the following:
     “Repurchase Calculation Date” shall mean the last day of the month
preceding the later of (i) the month in which the event giving rise to the right
to repurchase occurs and (ii) the month in which the Repurchase Eligibility Date
occurs; provided, however, that for purposes of Section 5(a)(ii) of this
Agreement, the “Repurchase Calculation Date” that shall be used to determine the
Fair Market Value shall instead be the tenth business day following the giving
of the Option Exercise Notice referenced in Section 5(a)(ii) of this Agreement.”
     (c) “Repurchase Price”. The definition of “Repurchase Price” as set forth
in Section 7 of the Stockholder’s Agreement is hereby deleted in its entirety
and replaced with the following:

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     “Repurchase Price” shall mean the amount to be paid in respect of the Stock
and Options to be purchased by the Company pursuant to Section 6(a), 6(b), or
6(c), as applicable.”
     1.7 Section 10(a). Section 10(a) of the Stockholder’s Agreement is hereby
amended by deleting the phrase “Section 5(c) and” from the second sentence
contained therein.
Section 2. Miscellaneous.
          2.1 Continuing Effect of the Stockholder’s Agreement. This Amendment
shall be construed together with, and as a part of, the Stockholder’s Agreement,
but shall not constitute an Amendment of any provision of the Stockholder’s
Agreement not expressly referred to herein. Except as expressly agreed to
hereby, the provisions of the Stockholder’s Agreement are and shall remain in
full force and effect.
          2.2 Counterparts. This Amendment may be executed in two or more
counterparts, and by different parties on separate counterparts each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
          2.3 Governing Law. This Amendment shall be governed by and construed
and enforced in accordance with the laws of the State of Michigan consistent
with the Stockholder’s Agreement.
* * * * *
          IN WITNESS WHEREOF, each of the undersigned has executed this
Amendment or caused this Amendment to be executed on its behalf as of the date
first written above.

                  ITC HOLDINGS CORP.
 
           
 
  By        
 
           
 
      Name:    
 
      Title:    

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[Signature Page to First Amendment to Management Stockholder’s Agreement]

         
 
  MANAGEMENT STOCKHOLDER    
 
       
 
       
 
       [NAME]    
 
       
Date of
       
Management Stockholder’s Agreement:
       
 
       

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