Document:

exv10w33

 

Exhibit
10.33

ITC HOLDINGS CORP. EXECUTIVE GROUP

SPECIAL BONUS PLAN

AMENDMENT NO. 1

     Pursuant to Section 9.1 of the ITC Holdings Corp. Executive Group Special Bonus Plan (the
“Plan”), the ITC Holdings Corp. Board of Directors, sitting as the compensation committee of the
Board, hereby amends the Plan, effective as of August 16, 2005, as follows:

     1. Section 6.1 is amended by adding the following sentence to the end of that section:

“Notwithstanding anything to the contrary in this section and

without affecting vested rights in other Special Bonus Amounts

credited to him, Mr. Joseph Welch, the President and Chief

Executive Officer of the Company on the date the Plan was adopted,

shall have a vested right in the portion of his Special Bonus

Amounts that are based on grants made to him under the Option Plan

before (and not including) July 25, 2005 as if he were 100% vested

in all such grants.”exv10w34

 

Exhibit 10.34

[FORM OF]

IPO STOCK OPTION AGREEMENT

(NAME)

     THIS AGREEMENT, dated as of the date set forth on the signature page hereof and identified as
the “Grant Date” is made by and between ITC Holdings Corp., a Michigan corporation
(hereinafter referred to as the “Company”), and the individual whose name is set forth on
the signature page hereof, who is an employee of the Company or a Subsidiary or Affiliate of the
Company, hereinafter referred to as the “Optionee”. Any capitalized terms herein not
otherwise defined in Article I shall have the meaning set forth in the Plan (as hereinafter
defined).

     WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase shares of its
common stock (the “Common Stock”);

     WHEREAS, the Company wishes to carry out the Plan, the terms of which are hereby incorporated
by reference and made a part of this Agreement; and

     WHEREAS, the Committee, appointed to administer the Plan, has determined that it would be to
the advantage and best interest of the Company and its shareholders to grant the Option provided
for herein to the Optionee as an incentive for increased efforts during his term of office with the
Company or its Subsidiaries or Affiliates, and has advised the Company thereof and instructed the
undersigned officers to issue said Option;

     NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree
as follows:

ARTICLE I

DEFINITIONS

     Whenever the following terms are used in this Agreement, they shall have the meaning specified
below unless the context clearly indicates to the contrary.

Section 1.1.   — Cause

     “Cause” shall mean “Cause” as such term may be defined in any employment agreement between the
Optionee and the Company or any of its Subsidiaries or Affiliates, or, if there is no such
employment agreement, “Cause” shall mean: (a) the Optionee’s continued failure substantially to
perform the Optionee’s duties with the Company or any Subsidiary or Affiliate thereof (other than
as a result of total or partial incapacity due to physical or mental illness) for a period of 10
days following written notice by the Company to the Optionee of such failure, (b) dishonesty in the
performance of the Optionee’s duties with the Company or any of its Subsidiaries or Affiliates, (c)
the Optionee’s conviction of, or plea of nolo contendere to a crime constituting
(x) a felony under the laws of the United States or any state thereof or (y) a misdemeanor
involving moral turpitude, (d) the Optionee’s willful malfeasance or willful

 

 

misconduct in connection with the Optionee’s duties with the Company or any of its
Subsidiaries or Affiliates or any act or omission which is injurious to the financial condition or
business reputation of the Company or its Affiliates or (e) the Optionee’s breach of the provisions
of Section 25 of the Management Stockholder’s Agreement.

Section 1.2.   — Good Reason

     “Good Reason” shall mean “Good Reason” as defined in any employment agreement between the
Optionee and the Company or any of its Subsidiaries or Affiliates, or, if there is no such
employment agreement, “Good Reason” shall mean without the Optionee’s consent: (A) a substantial
reduction in the total value of the Optionee’s rate of annual base salary, target annual bonus, and
the aggregate employee benefits provided to the Optionee by the Company or any Subsidiary thereof;
(B) the Optionee’s job responsibility and authority are substantially diminished; and (C) the
Optionee’s work location is relocated to more than fifty (50) miles from Novi, Michigan or Ann
Arbor, Michigan; and provided, further, that “Good Reason” shall cease to exist for
an event on the 60th day following the later of its occurrence or the Optionee’s
knowledge thereof, unless the Optionee has given the Company written notice thereof prior to such
date.

Section 1.3.   — Management Stockholder’s Agreement

     “Management Stockholder’s Agreement” shall mean that certain Management Stockholder’s
Agreement between the Optionee and the Company, dated as of the date identified on the signature
page hereof, as amended from time to time.

Section 1.4.   — Option

     “Option” shall mean the Option to purchase shares of Common Stock granted under Section 2.1 of
this Agreement.

Section 1.5.   — Permanent Disability

     “Permanent Disability” shall mean “Permanent Disability” as such term may be defined in any
employment agreement between the Optionee and the Company or any of its Subsidiaries or Affiliates
or, if there is no such employment agreement, “Permanent Disability” shall mean the Optionee
becomes physically or mentally incapacitated and is therefore unable for a period of six (6)
consecutive months or for an aggregate of eight (8) months in any twelve (12) consecutive month
period, to perform the Optionee’s duties with the Company or any Subsidiary or Affiliate thereof.
Any question as to the existence of the Disability of the Optionee as to which the Optionee and the
Company cannot agree shall be determined in writing by a qualified independent physician mutually
acceptable to the Optionee and the Company. If the Optionee and the Company cannot agree as to a
qualified independent physician, each shall appoint such a physician and those two physicians shall
select a third who shall make such determination in writing. The determination of Permanent
Disability made in writing to the Company and the Optionee shall be final and conclusive for all
purposes of this Agreement (such inability is hereinafter referred to as “Permanent Disability” or
being “Permanently Disabled”).

 

 

Section 1.6.   — Plan

     “Plan” shall mean the Amended and Restated 2003 Stock Purchase and Option Plan for Key
Employees of ITC Holdings Corp. and Its Subsidiaries.

Section 1.7.   — Secretary

     “Secretary” shall mean the Secretary of the Company.

ARTICLE II

GRANT OF OPTIONS

Section 2.1.   — Grant of Options

     For good and valuable consideration, on and as of the date hereof the Company irrevocably
grants to the Optionee an Option to purchase any part or all of an aggregate of the number of
shares set forth on the signature page hereof of its Common Stock upon the terms and conditions set
forth in this Agreement.

Section 2.2.   — Exercise Price

     Subject to Section 2.4, the exercise price of the shares of Common Stock covered by the Option
shall be the price per share without commission or other charge set forth on the signature page
hereof as the “Exercise Price” (which is the Fair Market Value per share of the Common
Stock on the Grant Date).

Section 2.3.   — No Guarantee of Employment

     Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue
in the employ of the Company or any Subsidiary or Affiliate or shall interfere with or restrict in
any way the rights of the Company and its Subsidiaries or Affiliates, which are hereby expressly
reserved, to terminate the employment of the Optionee at any time for any reason whatsoever, with
or without cause, subject to the applicable provisions of, if any, the Optionee’s employment
agreement with the Company or offer letter provided by the Company to the Optionee.

Section 2.4.   — Adjustments to Option

     Subject to Sections 8 and 9 of the Plan, in the event that the outstanding shares of the stock
subject to the Option, are, from time to time, changed into or exchanged for a different number or
kind of shares of the Company or other securities by reason of a merger, consolidation,
recapitalization, reclassification, stock split, spin-off, stock dividend, combination of shares,
or other corporate event, the Committee shall make, as appropriate and equitable, an adjustment in
the number and kind of shares and/or the amount of consideration as to which or for which, as the
case may be, such Option, or portions thereof then unexercised, shall be exercisable, and the
Committee may, as it deems appropriate and equitable, pay to the Optionee a dividend in respect of
the shares of Common Stock subject to the Option, with such conditions or

 

 

limitations as the Committee may deem reasonable and necessary to preserve the economic value
of the Option. Any such adjustment made by the Committee shall be final and binding upon the
Optionee, the Company and all other interested persons.

ARTICLE III

PERIOD OF EXERCISABILITY

Section 3.1.   — Exercisability of Option

     (a) So long as the Optionee continues to be employed by the Company or any of its Subsidiaries
or Affiliates, the Option shall become exercisable pursuant to the following schedule:

	 	 	 	 	 
	 	 	Percentage of
	Date Option	 	Shares As to Which
	Becomes Exercisable	 	Option Is Exercisable
	After the first anniversary
of the Grant Date
	 	 	20	%
	 
	 	 	 	 
	After the second anniversary
of the Grant Date
	 	 	40	%
	 
	 	 	 	 
	After the third anniversary
of the Grant Date
	 	 	60	%
	 
	 	 	 	 
	After the fourth anniversary
of the Grant Date
	 	 	80	%
	 
	 	 	 	 
	After the fifth anniversary
of the Grant Date
	 	 	100	%

     (b) Notwithstanding the foregoing, the Option shall become immediately exercisable as to 100%
of the shares of Common Stock subject to such Option immediately prior to a Change of Ownership
(but only to the extent such Option has not otherwise terminated or become exercisable).

     (c) Notwithstanding the foregoing, the Option shall not become exercisable as to any
additional shares of Common Stock (which does not otherwise become exercisable in accordance with
Section 3.1(a) or (b) above) following the termination of employment of the Optionee for any reason
and any Option, which is unexercisable as of the Optionee’s termination of employment, shall be
immediately cancelled without payment therefor.

 

 

Section 3.2.   — Expiration of Option

     Except as otherwise provided in Section 5 or 6 of the Management Stockholder’s Agreement, the
Optionee may not exercise the Option to any extent after the first to occur of the following
events:

     (a) The tenth anniversary of the Grant Date; or

     (b) The first anniversary of the date of the Optionee’s termination of employment, if the
Optionee’s employment is terminated by reason of death or Permanent Disability (unless earlier
terminated as provided in Section 3.2(e) below); or

     (c) Immediately upon the date of the Optionee’s termination of employment by the Company or
its Subsidiaries or Affiliates for Cause or by the Optionee without Good Reason; or

     (d) Ninety (90) days after the date of an Optionee’s termination of employment by the Company
or any of its Subsidiaries or Affiliates without Cause (for any reason other than as set forth in
Section 3.2(b)) or by the Optionee for Good Reason (in either case unless earlier terminated as
provided in Section 3.2(e) below); or

     (e) The date the Option is terminated pursuant to Section 5 or 6 of the Management
Stockholder’s Agreement; or

     (f) If the Committee so determines pursuant to Section 9 of the Plan, the effective date of
either the merger or consolidation of the Company into another Person, or the exchange or
acquisition by another Person of all or substantially all of the Company’s assets or 80% or more of
its then outstanding voting stock, or the recapitalization, reclassification, liquidation,
dissolution or other corporate event of the Company. At least ten (10) days prior to the effective
date of such merger, consolidation, exchange, acquisition, recapitalization, reclassification,
liquidation or dissolution, the Committee shall give the Optionee notice of such event if the
Option has then neither been fully exercised nor become unexercisable under this Section 3.2.

ARTICLE IV

EXERCISE OF OPTION

Section 4.1.   — Person Eligible to Exercise

     Except as otherwise provided in the Management Stockholder’s Agreement, during the lifetime of
the Optionee, only he may exercise an Option or any portion thereof. After the death of the
Optionee, any exercisable portion of an Option may, prior to the time when an Option becomes
unexercisable under Section 3.2, be exercised by his personal representative or by any person
empowered to do so under the Optionee’s will or under the then applicable laws of descent and
distribution.

 

 

Section 4.2.   — Partial Exercise

     Any exercisable portion of an Option or the entire Option, if then wholly exercisable, may be
exercised in whole or in part at any time prior to the time when the Option or portion thereof
becomes unexercisable under Section 3.2; provided, however, that any partial
exercise shall be for whole shares of Common Stock only.

Section 4.3.   — Manner of Exercise

     An Option, or any exercisable portion thereof, may be exercised solely by delivering to the
Secretary or his office all of the following prior to the time when the Option or such portion
becomes unexercisable under Section 3.2:

     (a) Notice in writing signed by the Optionee or the other person then entitled to exercise the
Option or portion thereof, stating that the Option or portion thereof is thereby exercised, such
notice complying with all applicable rules established by the Committee;

     (b) Full payment (in cash, by check or by a combination thereof) of the Exercise Price for the
shares with respect to which such Option or portion thereof is exercised;

     (c) A bona fide written representation and agreement, in a form satisfactory to the Committee,
signed by the Optionee or other person then entitled to exercise such Option or portion thereof,
stating that the shares of Common Stock are being acquired for his own account, for investment and
without any present intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act of 1933, as amended (the “Act”), and then applicable
rules and regulations thereunder, and that the Optionee or other person then entitled to exercise
such Option or portion thereof will indemnify the Company against and hold it free and harmless
from any loss, damage, expense or liability resulting to the Company if any sale or distribution of
the shares by such person is contrary to the representation and agreement referred to above;
provided, however, that the Committee may, in its reasonable discretion, take whatever additional
actions it deems reasonably necessary to ensure the observance and performance of such
representation and agreement and to effect compliance with the Act and any other federal or state
securities laws or regulations;

     (d) Full payment to the Company of all amounts which, under federal, state or local law, it is
required to withhold upon exercise of the Option; and

     (e) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by
any person or persons other than the Optionee, appropriate proof of the right of such person or
persons to exercise the option.

Without limiting the generality of the foregoing, the Committee may require an opinion of counsel
acceptable to it to the effect that any subsequent transfer of shares acquired on exercise of an
Option does not violate the Act, and may issue stop-transfer orders covering such shares. Share
certificates evidencing stock issued on exercise of this Option shall bear an appropriate legend
referring to the provisions of subsection (c) above and the agreements herein. The written
representation and agreement referred to in subsection (c) above shall, however, not be required

 

 

if the shares to be issued pursuant to such exercise have been registered under the Act, and such
registration is then effective in respect of such shares.

Section 4.4.   — Conditions to Issuance of Stock Certificates

     The shares of stock deliverable upon the exercise of an Option, or any portion thereof, may be
either previously authorized but unissued shares or issued shares, which have then been reacquired
by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be
required to issue or deliver any certificate or certificates for shares of stock purchased upon the
exercise of an Option or portion thereof prior to fulfillment of all of the following conditions:

     (a) The obtaining of approval or other clearance from any state or federal governmental agency
which the Committee shall, in its reasonable and good faith discretion, determine to be necessary
or advisable; and

     (b) The lapse of such reasonable period of time following the exercise of the Option as the
Committee may from time to time establish for reasons of administrative convenience or as may
otherwise be required by applicable law.

Section 4.5.   — Rights as Stockholder

     Except as otherwise provided in Section 2.4 of this Agreement, the holder of an Option shall
not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any
shares purchasable upon the exercise of the Option or any portion thereof unless and until a
certificate or certificates representing such shares shall have been issued by the Company to such
holder or, if the Common Stock is listed on a national securities exchange, a book entry
representing such shares has been made by the registrar of the Company.

ARTICLE V

MISCELLANEOUS

Section 5.1.   — Administration

     The Committee shall have the power to interpret the Plan and this Agreement and to adopt such
rules for the administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the Optionee, the Company and
all other interested persons. No member of the Committee shall be personally liable for any
action, determination or interpretation made in good faith with respect to the Plan or the Option.
In its absolute discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan and this Agreement.

 

 

Section 5.2.   — Option Not Transferable

     Except as provided in the Management Stockholder’s Agreement, neither the Option nor any
interest or right therein or part thereof shall be liable for the debts, contracts or engagements
of the Optionee or his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect; provided, however, that this Section
5.2 shall not prevent transfers by will or by the applicable laws of descent and distribution.

Section 5.3.   — Notices

     Any notice to be given under the terms of this Agreement to the Company shall be addressed to
the Company in care of its Secretary, and any notice to be given to the Optionee shall be addressed
to him at the address given beneath his signature hereto. By a notice given pursuant to this
Section 5.3, either party may hereafter designate a different address for notices to be given to
him. Any notice, which is required to be given to the Optionee, shall, if the Optionee is then
deceased, be given to the Optionee’s personal representative if such representative has previously
informed the Company of his status and address by written notice under this Section 5.3. Any
notice shall have been deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.

Section 5.4.   — Titles; Pronouns

     Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement. The masculine pronoun shall include the feminine
and neuter, and the singular the plural, where the context so indicates.

Section 5.5.   — Applicability of Plan and Management Stockholder’s Agreement

     The Option and the shares of Common Stock issued to the Optionee upon exercise of the Option
shall be subject to all of the terms and provisions of the Plan and the Management Stockholder’s
Agreement, to the extent applicable to the Option and such shares. In the event of any conflict
between this Agreement and the Plan, the terms of the Plan shall control. In the event of any
conflict between this Agreement or the Plan and the Management Stockholder’s Agreement, the terms
of the Management Stockholder’s Agreement shall control.

Section 5.6.   — Amendment

     This Agreement may be amended only by a writing executed by the parties hereto, which
specifically states that it is amending this Agreement.

 

 

Section 5.7.   — Governing Law

     The laws of the State of Michigan shall govern the interpretation, validity and performance of
the terms of this Agreement regardless of the law that might be applied under principles of
conflicts of laws.

Section 5.8.   — Arbitration

     In the event of any controversy among the parties hereto arising out of, or relating to, this
Agreement which cannot be settled amicably by the parties, such controversy shall be finally,
exclusively and conclusively settled by mandatory arbitration conducted expeditiously in accordance
with the American Arbitration Association rules, by a single independent arbitrator. Such
arbitration process shall take place within 100 miles of the Detroit, Michigan metropolitan area.
The decision of the arbitrator shall be final and binding upon all parties hereto and shall be
rendered pursuant to a written decision, which contains a detailed recital of the arbitrator’s
reasoning. Judgment upon the award rendered may be entered in any court having jurisdiction
thereof. Each party shall bear its own legal fees and expenses, unless otherwise determined by the
arbitrator.

[Signatures on next page.]

 

 

[Signature page to IPO Stock Option Agreement]

     IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.

	 	 	 	 	 
	 
	 	ITC HOLDINGS CORP.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Its:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	OPTIONEE:
	 
	 	 	 	 
	 
	 	 
	 
	 	[NAME]
	 
	 	 	 	 
	 
	 	 
	 
	 	Address
	 
	 	 	 	 
	 
	 	 
	 
	 	Address

	 	 	 	 	 
	Grant Date:
	 	[DATE]
	 
	 	 	 	 
	Exercise Price:
	 	$	                                                                  	 
	 
	 	 	 	 
	Aggregate number of shares of Common Stock
for which the Option granted hereunder is
exercisable (100% of number of shares):
	 	 	                                                                  	 
	 
	 	 	 	 
	Date of Management Stockholder’s Agreement:

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