Document:

exv10w65

 

Exhibit 10.65

ITC HOLDINGS CORP.

SPECIAL BONUS PLAN

Amended and Restated

Effective November 12, 2007

 

 

ARTICLE I

INTRODUCTION

          The Plan was established effective as of June 15, 2005 by ITC Holdings Corp. for the purpose
of providing special bonuses to certain non-executive employees of ITC Holdings Corp. and its
Subsidiaries and Affiliates. Effective November 12, 2007, the Plan is amended and restated in its
entirety, to reflect: (i) that all previously awarded bonuses that had heretofore been considered
unvested under the Plan will be considered fully vested as of such date, (ii) that all such vested
amounts will be paid to the Participants as soon as practicable after such date, and (iii) that any
future bonus amounts as determined hereunder after the effective date of this amended and restated
Plan will be fully vested and paid to Participants as soon as is practicable after being awarded.

          The Plan is intended to constitute a “bonus program,” and as such is not to be considered an
“employee pension benefit plan” under or in any manner subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended. Further, the Plan is not intended to provide
for any deferral of compensation, as that term is defined under Internal Revenue Code Section 409A
(“Section 409A”), and regulations issued thereunder, and as a result is not in any manner subject
to the provisions of Section 409A.

ARTICLE II

DEFINITIONS

          The following capitalized terms used in the Plan have the respective meanings set forth in
this Article II:

     2.1. “Affiliate” shall mean with respect to any Person, any entity directly or
indirectly controlling, controlled by or under common control with such Person.

     2.2. “Beneficiary” shall mean such person or legal entity as may be designated by a
Participant under Section 5.3 to receive benefits hereunder after such Participant’s death.

     2.3. “Committee” shall mean the compensation committee of the board of directors of
the Company (or any successor entity thereto).

     2.4. “Common Stock” or “Share” shall mean common stock of the Company.

     2.5. “Company” shall mean ITC Holdings Corp., its successors and assigns.

     2.6. “Eligible Employee” shall mean an active Employee who holds outstanding Options.

     2.7. “Employee” shall mean a non-executive, who is currently employed by the Company,
or any Subsidiary or Affiliate.

     2.8. “Employer” shall mean the Company and each Subsidiary or Affiliate of the Company
designated by the Company that employs one or more Eligible Employees who have

 

 

become Participants in accordance with Article III.

     2.9. “Option Plan” shall mean the Amended and Restated 2003 Stock Purchase and Option
Plan of ITC Holdings and Its Subsidiaries, as from time to time amended.

     2.10. “Options” shall mean those outstanding, unexercised options to purchase
Common Stock granted to any Participant under the Option Plan.

     2.11. “Participant” shall mean an Eligible Employee who is selected by the Committee
to participate in the Plan.

     2.12 “Person” shall mean a person as such term is used for purposes of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended.

     2.13. “Plan” shall mean this ITC Holdings Corp. Special Bonus Plan, as amended from
time to time.

     2.14. “Plan Year” shall mean the period beginning January 1 and ending December 31 of
each calendar year.

     2.15. “Special Bonus Amount” shall mean a special bonus awarded by the Committee to
the Participant, as described in Section 4.1.

     2.16. “Subsidiary” means any corporation in an unbroken chain of corporations
beginning with the Company if each of the corporations, or group of commonly controlled
corporations, other than the last corporation in the unbroken chain then owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.

ARTICLE III

PARTICIPATION BY ELIGIBLE EMPLOYEES

     3.1 Participation. Participation in the Plan is limited to Eligible Employees. An
Eligible Employee shall be selected to participate in the Plan as determined by the Committee in
its sole discretion. This Plan is intended to be limited to a select group of non-executive
employees of the Employers. To the extent that the Committee determines that an employee no longer
qualifies as part of such a group, the Committee can provide that such employee is ineligible for
additional bonuses under the Plan.

     3.2 Continuity of Participation. A Participant who separates from service with all of
the Employers shall immediately cease active participation under the Plan. Unless otherwise
determined by the Committee, however, the separation from service of a Participant with one
Employer will not interrupt the continuity of the Participant’s active participation in the Plan
if, concurrently with such separation or as part of a coordinated transfer from one Employer to
another, the Participant is employed by one or more of the other Employers.

 

 

ARTICLE IV

AWARDS OF SPECIAL BONUS AMOUNTS

     4.1. Special Bonus Amounts. For each Plan Year, the Committee, in its sole
discretion, shall determine with respect to each Participant whether such Participant shall be
awarded a Special Bonus Amount for part or all of such Plan Year and, if so, in what amount. In
determining the amount of the Special Bonus Amount, the Committee shall among other factors give
consideration from time to time to dividends paid, or expected to be paid, on Common Stock during
such Plan Year and to the number of Options held and outstanding by each Participant during such
Plan Year. Neither of such factors, nor the fact that a Participant has been awarded a Special
Bonus Amount with respect to prior Plan Years shall in any way restrict the Committee’s discretion
with respect to the awarding of future Special Bonus Amounts. Further, the awarding and amount(s)
of such Special Bonus Amounts shall in no way, either directly or indirectly, be contingent upon or
otherwise payable on the exercise of any Option granted to any Participant under the Option Plan.

ARTICLE V

DISTRIBUTIONS

     5.1. Timing of Distribution of Special Bonus Amounts. On and after the effective date
of this amended and restated Plan, any Special Bonus Amount awarded under this Plan shall be
distributed in a lump sum payment, as soon as administratively feasible (but not later than fifteen
days), after such Special Bonus Amount becomes vested as otherwise provided in Section 6.1.

     5.2. Form of Distribution. All distributions shall be made in a single, lump sum cash
payment.

     5.3 Beneficiary Designation. Each Participant shall have a right to designate a
Beneficiary with respect to amounts payable under the Plan. A Participant may from time to time
change his designated Beneficiary without the consent of such Beneficiary by filing a new
designation in writing with the Company or its designee. If no Beneficiary designation is in
effect at the time of the Participant’s death, or if the designated Beneficiary is missing or has
predeceased the Participant, distribution shall be made to the Participant’s estate.

ARTICLE VI

VESTING

     6.1 Vesting in Special Bonus Amounts. All Participants shall immediately be
considered 100% fully vested in any Special Bonus Amounts that are first determined and awarded
under Section 4.1 on or after the effective date of this amended and restated Plan. Further, any
Special Bonus Amounts awarded before the effective date of this amended and restated Plan that have
been credited to a Participant’s Special Bonus Account (as described in the provisions of the prior
version of the Plan; along with any earnings, gains and/or losses thereon), shall become fully 100%
vested as of the effective date of this amended and restated Plan.

 

 

ARTICLE VII

FUNDING AND PARTICIPANT’S INTEREST

     7.1 The Plan shall be unfunded and the Company shall pay all distributions from its general
assets; and a Participant (or the Participant’s Beneficiary) shall have the rights of a general,
unsecured creditor against the Company for any distributions due hereunder.

ARTICLE VIII

ADMINISTRATION AND INTERPRETATION

     8.1. Administration. The Committee shall be responsible for administering the Plan.
However, the Committee may delegate its duties and powers in whole or in part as it determines. The
Committee has full discretionary authority to construe and interpret the terms and provisions of
the Plan; to adopt, alter and repeal administrative rules, guidelines and practices governing the
Plan; to perform all acts, including the delegation of its administrative responsibilities to
advisors or other persons who may or may not be employees of the Employers; and to rely upon the
information or opinions of legal counsel or experts selected to render advice with respect to the
Plan, as it shall deem advisable, with respect to the administration of the Plan.

     8.2. Interpretation. The Committee may take any action, correct any defect, supply
any omission or reconcile any inconsistency in the Plan or in any election hereunder, in the manner
and to the extent it shall deem necessary to carry the Plan into effect or to carry out the
Company’s purposes in adopting the Plan. Any decision, interpretation or other action made by the
Committee arising out of or in connection with the Plan, shall be final, binding and conclusive on
the Employers and all Eligible Employees, Participants and Beneficiaries and their respective
heirs, executors, successors and assigns. The Committee’s determinations hereunder need not be
uniform, and may be made selectively among Eligible Employees, Participants and Beneficiaries,
whether or not they are similarly situated.

ARTICLE IX

AMENDMENT AND TERMINATION

     9.1. Amendment and Termination. The Committee shall have the right, at any time, to
amend or terminate the Plan, in whole or in part, provided that such amendment or
termination shall not materially and adversely affect the accrued and vested rights of any
Participant or Beneficiary under the Plan. Notwithstanding the foregoing, the Committee shall have
the right to amend the Plan in such manner as it deems necessary to preserve all applicable laws
and/or favorable accounting treatment by the Company of the benefits provided under this Plan
(including, without limitation, to make any amendment to this Plan that would be necessary in order
to cause the Plan, in form and/or in operation, to be compliant with Section 409A, if and to the
extent it is determined that such provision applies to this Plan, and to avoid any tax thereunder
being imposed on any Participant). The Company reserves the right, in its sole discretion, to
discontinue the awarding of Special Bonus Amounts, or completely terminate the Plan at any time.

 

 

ARTICLE X

MISCELLANEOUS PROVISIONS

     10.1. Right to Employment. The adoption and maintenance of the Plan shall not be
deemed to constitute a contract between an Employer and any Eligible Employee, or to be a
consideration for, or an inducement or condition of, the employment of any individual. Nothing
herein contained, or any action hereunder, shall be deemed to give any Eligible Employee the right
to be retained in the employ of an Employer or to interfere with the right of any Employer to
terminate any Eligible Employee at any time.

     10.2. Alienation or Assignment of Benefits. Other than by will, the laws of descent
and distribution, or by appointing a Beneficiary, a Participant’s rights and interest under the
Plan shall not be assigned or transferred except as otherwise permitted by the Committee, and a
Participant’s rights to benefit payments under the Plan shall not be subject to alienation, pledge
or garnishment by or on behalf of creditors (including heirs, beneficiaries, or dependents) of the
Participant or of a Beneficiary. The Company may assign its rights and obligations under the Plan
to a Person or entity, which is a Subsidiary, Affiliate or a successor in interest to substantially
all of the business operations of the Company.

     10.3. Severability. In the event that any provision of the Plan shall be declared
illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining
provisions of the Plan but shall be fully severable, and the Plan shall be construed and enforced
as if said illegal or invalid provision had never been inserted herein.

     10.4. Right to Withhold. To the extent required by applicable law in effect at the
time a distribution is made from the Plan, the Company, any Employer or their respective agents
shall have the right to withhold or deduct from any distributions or payments hereunder any taxes
required to be withheld by federal, state or local governments prior to making any such
distributions or payments.

     10.5. Governing Law. The validity, construction, and effect of the Plan and any rules
and regulations relating to the Plan shall be determined in accordance with the laws of the State
of Michigan, without giving effect to principles of conflicts of laws to the extent not pre-empted
by federal law.

     10.6. Effective Date. The original effective date of the Plan is June 15, 2005. The
effective date of this amended and restated version of the Plan is November 12, 2007.

	 	 	 	 	 
	Date: November 12, 2007 	ITC HOLDINGS CORP.

 	 
	 	By:  	/s/ Linda H. Blair
 	 
	 	 	Linda H. Blair 	 
	 	 	Its: 	Executive Vice President and 
Chief Business Officerexv10w66

 

Exhibit 10.66

ITC HOLDINGS CORP.

EMPLOYEE STOCK PURCHASE PLAN

(Effective May 17, 2006)

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	I.      GENERAL PROVISIONS	 	 	1	 
	 
	 	 	 	 	 	 
	     1.1

	 	Establishment
	 	 	1	 
	     1.2

	 	Purpose
	 	 	1	 
	     1.3

	 	Plan Duration
	 	 	1	 
	     1.4

	 	Definitions
	 	 	1	 
	     1.5

	 	Stock
	 	 	3	 
	     1.6

	 	Administration
	 	 	3	 
	     1.7

	 	Participants
	 	 	4	 
	 
	 	 	 	 	 	 
	II.      OFFER TERMS	 	 	4	 
	 
	 	 	 	 	 	 
	     2.1

	 	Offer and Purchase Period
	 	 	4	 
	     2.2

	 	Option Price
	 	 	4	 
	     2.3

	 	Participation
	 	 	5	 
	     2.4

	 	Participation Limitations
	 	 	6	 
	     2.5

	 	Termination of Employment
	 	 	6	 
	     2.6

	 	Restrictions on Transfer
	 	 	6	 
	 
	 	 	 	 	 	 
	III.      MISCELLANEOUS	 	 	6	 
	 
	 	 	 	 	 	 
	     3.1

	 	Non-Assignability
	 	 	6	 
	     3.2

	 	Adjustments
	 	 	6	 
	     3.3

	 	Change in Control
	 	 	7	 
	     3.4

	 	Termination and Amendment
	 	 	8	 
	     3.5

	 	Rights Prior to Issuance of Shares
	 	 	 8	 
	     3.6

	 	Securities Laws
	 	 	8	 
	     3.7

	 	Delivery of Plan
	 	 	8	 
	     3.8

	 	Effect on Employment
	 	 	8	 
	     3.9

	 	Certificates
	 	 	9	 
	     3.10

	 	Use of Proceeds
	 	 	9	 
	     3.11

	 	Approval of Plan
	 	 	9	 
	     3.12

	 	Governing Law
	 	 	9	 

i 

 

ITC HOLDINGS CORP.

EMPLOYEE STOCK PURCHASE PLAN

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. Employee Stock Purchase Plan
(“Plan”), subject to approval by the shareholders of the Corporation on May 17, 2006.

     1.2 Purpose. The purpose of the Plan is (i) to promote the best interests of the
Corporation and its shareholders by encouraging Employees of the Corporation and any Subsidiaries
to acquire an ownership interest in the Corporation through the purchase of stock in the
Corporation, thus aligning their interests with those of shareholders, and (ii) to enhance the
ability of the Corporation and its Subsidiaries to attract, motivate and retain qualified
Employees. The Plan is intended to constitute an “employee stock purchase plan” under Section 423
of the Code.

     1.3 Plan Duration. Upon receipt of shareholders approval, the Plan shall commence on
May 17, 2006 and subject to earlier termination by the Board in accordance with Section 3.4, no new
Offers may be made under the Plan after February 7, 2012.

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

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

          (b) “Code” means the Internal Revenue Code of 1986, as amended from time to time.

          (c) “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

1

 

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.

          (d) “Committee” means the Compensation Committee of the Board.

          (e) “Common Stock” means shares of the Corporation’s Common Stock, as described in Section
1.5, below.

          (f) “Corporation” means ITC Holdings Corp. and, for purposes of this Plan, employment with the
Corporation shall be deemed to include employment with any Subsidiary of the Corporation.

          (g) “Election Period” means the period of time designated by the Committee when an eligible
Employee may elect to participate in one or more Purchase Periods.

          (h) “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, as applicable.

2

 

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

          (j) “Fair Market Value” means the value of Common Stock as determined in accordance with
Section 2.2.

          (k) “Offer” means the Committee’s designation of a Purchase Period available to eligible
Employees and the terms on which an option may be exercised during the applicable Purchase Period.

          (l) “Option Price” means the price, determined by the Committee, at which Common Stock subject
to an option may be purchased during a Purchase Period.

          (m) “Plan” means the ITC Holdings Corp. Employee Stock Purchase Plan, the terms of which are
set forth herein, and any amendments thereto.

          (n) “Purchase Period” means a period established by the Committee during which an eligible
Employee may exercise options granted hereunder.

          (o) “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 the first or last day of a Purchase Period, as applicable.

          (p) “Subsidiary” means any subsidiary of the Corporation, as defined in Code Section 424(f).

     1.5 Stock. The stock subject to option and purchase under the Plan shall be the
Common Stock of the Corporation, and may be either authorized and unissued shares or shares that
have been reacquired by the Corporation. The total amount of Common Stock on which options may be
granted under the Plan shall not exceed one hundred eighty thousand shares (180,000) shares,
subject to adjustment in accordance with Section 3.2. Shares of Common Stock subject to any
unexercised portion of a terminated, canceled or expired option granted under the Plan may again be
used for options under the Plan.

     1.6 Administration. The Plan shall be administered by the Committee. The Committee
may prescribe rules and regulations from time to time for the administration of the Plan and may
decide questions which may arise with respect to its interpretation or application. The decisions
of the Committee in interpreting the Plan shall be final, conclusive and binding on all persons,
including the Corporation, its Subsidiaries, Employees, and optionees. The Committee, from time to
time, shall grant to eligible Employees on a uniform basis, options to purchase Common Stock
pursuant to the terms and conditions of the Plan. In the event of insufficient shares during a
Purchase Period, the Committee shall allocate the right to purchase shares to each participant in
the same proportion that such participant’s total current base salary paid by the Corporation for
the Purchase Period bears to the total of such base salaries paid by the Corporation to all
participants during the same period. All excess funds withheld, as a result of insufficient
shares, shall be returned to the participating Employees.

3

 

     1.7 Participants. Except as provided in Section 2.4 below, any Employee who has (a)
completed six (6) full months of service with the Corporation, and (b) whose customary employment
is more than twenty (20) hours per week and five (5) or more months per calendar year at the time
of an Offer, is eligible to participate in such Offer under the Plan, in accordance with the terms
of the Plan. An Employee who meets the eligibility requirements in this Section 1.6 shall be
entitled to participate in the first Offer commencing after the eligibility requirements have been
satisfied.

II. OFFER TERMS

     2.1
Offer and Purchase Period.

          (a) The Committee shall determine the date or dates upon which one or more Offers shall be
made under the Plan. The Purchase Period pursuant to each Offer shall be three (3) months, or such
other term as the Committee shall determine prior to the commencement of an Offer, but which in no
event shall exceed twenty-seven (27) months.

          (b) To participate in an Offer, an eligible Employee must submit such enrollment forms as
shall be prescribed by the Committee (which shall include a payroll deduction authorization form)
at such time and in such manner as shall be prescribed by the Committee. The payroll deductions
authorized by a participant on a payroll deduction authorization form shall be expressed (i) as a
whole number percentage of the participant’s “base compensation” for each pay period during the
Purchase Period, or (ii) as a specified dollar amount to be withheld from a participant’s base
compensation or bonus on one or more designated payroll dates. For purposes of the Plan, a
participant’s “base compensation” for a pay period shall include the participant’s base
compensation but shall exclude commissions, bonuses, overtime, disability pay, severance pay,
moving expenses, expense reimbursements and allowances and other special payments and supplemental
compensation. A participant may not purchase more than two hundred thirty two (232) shares of
Common Stock in any three (3) month Purchase Period (proportionately adjusted upward for Purchase
Periods of more than three (3) months).

     2.2 Option Price.

          (a) The Option Price at which shares of Common Stock may be purchased under the Plan shall be
determined by the Committee at the time of the Offer but in no event shall such amount be less than
the lesser of:

	 	(i)	 	85% of the Fair Market Value of a share of
Common Stock on the date of grant of the option (first day of a
Purchase Period), or
	 
	 	(ii)	 	85% of the Fair Market Value of a share of
Common Stock on the date the option is deemed exercised pursuant to
Section 2.4(d) (last day of a Purchase Period).

          (b) For purposes of this Plan, the Fair Market Value per share shall be deemed to be the
closing price of Common Stock on the Stock Exchange for the first and last days of the Purchase
Period. In the event that there are no Common Stock transactions on either date, the

4

 

Fair Market Value shall be determined as of the immediately preceding date on which there were
Common Stock transactions.

     2.3 Participation.

          (a) An eligible Employee may elect to participate in an Offer by delivering to the Corporation
an election to participate and a payroll deduction form within the Election Period designated by
the Committee prior to the commencement of a Purchase Period. An eligible Employee’s election to
participate and payroll deduction form from the preceding Election Period automatically shall carry
over to the next Election Period unless affirmatively revoked in writing by the Employee. An
Employee who elects to participate may not authorize payroll deductions which, in the aggregate,
are more than ten percent (10%) of the Employee’s pre-tax base salary (not including overtime and
bonus payments). Only whole shares of Common Stock may be purchased under the Plan.

          (b) All Employees granted options under the Plan shall have the same rights and privileges
under the Plan, except that the number of shares each participant may purchase shall depend upon
his or her base compensation and the designated payroll deduction he or she authorizes.

          (c) Payroll deductions shall commence on the first payroll date in the Purchase Period and
shall continue until the last payroll date in the Purchase Period. An Employee may suspend payroll
deductions during a Purchase Period only at the discretion of the Corporation in the event of an
unforeseen hardship; provided, however, that payroll deductions made prior to approval of the
suspension by the Corporation shall still be used to purchase Common Stock for the Employee at the
end of the Purchase Period.

          (d) A participating Employee’s option shall be deemed to have been exercised on the last
business day of the Purchase Period.

          (e) As soon as practicable after the end of the Purchase Period, the Corporation shall deliver
to each Employee, certificates evidencing the shares of Common Stock that an Employee has purchased
(or a book entry representing such shares shall be made and the shares deposited with the
appropriate registered book-entry custodian). Any amount that has been deducted representing a
fractional share shall be applied toward the purchase of option shares in the next Purchase Period.
An Employee who does not elect to participate in the following Purchase Period shall receive a
check from the Corporation for any amount that has been deducted and represents a fractional share.
Any payroll deductions that exceed the limits set forth in Sections 2.1(b) and 2.4 shall be
returned to the participant in the amount of the excess.

          (f) The Corporation retains the right to designate an exclusive broker to handle the Common
Stock transactions under the Plan. As soon as practicable after the end of the Purchase Period,
the Corporation shall deliver to each Employee or a designated brokerage account, through a
certificate or electronic transfer, the shares of Common Stock that such Employee has purchased.
Unless otherwise determined by the Committee, any amount that has been deducted and withheld in
excess of the option price automatically shall be paid by check to

5

 

the participating Employee promptly following the end of the Purchase Period in which
withheld.

          (g) Unless otherwise determined by the Committee, no interest shall accrue or be paid on any
amounts paid by payroll deduction by any participating Employee.

     2.4 Participation Limitations. Notwithstanding any other provision of the Plan, no
Employee shall be eligible to participate in an Offer under the Plan if:

          (a) the Employee, immediately after such grant, would, in the aggregate, own and/or hold
shares of Common Stock (including all shares which may be purchased under outstanding options,
whether or not such options qualify for the special tax treatment afforded by Section 421(a) of the
Code) equal to or exceeding five percent (5%) or more of the total combined voting power or value
of all classes of capital stock of the Corporation or of its Subsidiaries; for purposes of this
limitation, the rules of section 424(d) of the Code and the regulations promulgated thereunder
(relating to attribution of stock ownership) shall apply; or

          (b) such grant would permit, under the rules set forth in Section 423 of the Code and the
regulations promulgated thereunder, the Employee’s right to purchase stock under this Plan and all
other Code Section 423 employee stock purchase plans maintained by the Corporation and its
Subsidiaries to accrue at a rate in excess of $25,000 in Fair Market Value of such stock
(determined at the time such option is granted) for each calendar year in which such option is
outstanding at any time.

     2.5 Termination of Employment. If a participating Employee ceases to be employed by
the Corporation or a Subsidiary for any reason, including but not limited to, voluntary or forced
resignation, retirement, death, disability or lay-off, the Corporation, within a reasonable time
after notice of the termination, shall issue a check to the former Employee (or executor,
administrator or legal representative, if applicable) in the aggregate amount of the Employee’s
payroll deductions that had not been applied towards the purchase of option shares as of the date
of termination.

     2.6 Restrictions on Transfer. Unless otherwise permitted by the Committee, no shares
of Common Stock purchased under the Plan shall be sold, exchanged, transferred, pledged, assigned
or otherwise disposed of for six (6) months following the close of the Purchase Period in which
acquired.

III. MISCELLANEOUS

     3.1 Non-Assignability. No option shall be transferable by a participating Employee,
and an option may be exercised during a participating Employee’s lifetime only by the Employee.
Upon the death of a participating Employee, his or her executor, administrator or other legal
representative shall receive a check from the Corporation representing the aggregate amount of the
deceased Employee’s payroll deductions that had not been applied towards the purchase of option
shares as of the date of death.

     3.2 Adjustments. In the event of a merger, reorganization, consolidation,
recapitalization, dividend or distribution (whether in cash, shares or other property), stock
split,

6

 

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 Options 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 price of securities subject to outstanding options under the Plan (including, if
the Committee deems appropriate, the substitution of similar options to purchase the shares of
another company, as the Committee may determine to be appropriate in its sole discretion). Any of
the foregoing adjustments may provide for the elimination of any fractional share which might
otherwise become subject to any option.

     3.3 Change in Control.

          (a) After any merger of one or more corporations into the Corporation in which the Corporation
shall be the surviving corporation or any share exchange in which the Corporation is a constituent
corporation, each participant shall, at no additional cost, be entitled upon the exercise of an
option, to receive (subject to any required action by shareholders), in lieu of the number of
shares of Common Stock for which such option shall then be exercisable, the consideration which
such participant would have been entitled to receive pursuant to the terms of the agreement of
merger or share exchange if at the time of such merger or share exchange such participant had been
a holder of record of a number of shares of Common Stock equal to the number of shares then
underlying the option.

          (b) In addition, in the event of a Change in Control, the Committee shall have the right to
terminate the Purchase Period as of such date, and, if so terminated, each participant shall be
deemed to have exercised, immediately prior to such merger, share exchange, acquisition or sale of
assets, his or her option to the extent payroll deductions were made prior thereto. Comparable
rights shall accrue to each participant in the event of successive Changes in Control.

          (c) Notwithstanding anything contained herein to the contrary, upon the dissolution or
liquidation of the Corporation or upon any merger or share exchange in which the Corporation is not
the surviving corporation (other than a merger with a wholly-owned subsidiary of the Corporation
formed for the purpose of changing the Corporation’s corporate domicile where the Plan is assumed
by the survivor), the Purchase Period for any option granted under this Plan shall terminate as of
the date of the aforementioned event, and each participant shall be deemed to have exercised,
immediately prior to such dissolution, liquidation, merger or share exchange, his or her option to
the extent payroll deductions were made prior thereto.

          (d) The foregoing adjustments and the manner of application of the foregoing provisions shall
be determined by the Committee in its sole discretion. Any such adjustment may provide for the
elimination of any fractional share which might otherwise become subject to an option.

7

 

     3.4 Termination and Amendment.

          (a) The Board may terminate the Plan, or the granting of options under the Plan, at any time.
No option shall be granted under the Plan after the sixth (6th) anniversary of the
adoption of the Plan by the Board.

          (b) The Board may amend or modify the Plan at any time and from time to time, but no amendment
or modification shall disqualify the Plan under Section 423 of the Code or Rule 16b-3 under the
Exchange Act without the approval of the shareholders of the Corporation.

          (c) No amendment, modification, or termination of the Plan shall adversely affect any option
granted under the Plan without the consent of the Employee holding the option.

     3.5 Rights Prior to Issuance of Shares. No participating Employee shall have any
rights as a shareholder with respect to shares covered by an option until the issuance of a stock
certificate or electronic transfer to the Employee (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 when the certificate is issued or the shares electronically
delivered to the Employee’s brokerage account.

     3.6 Securities Laws.

     3.7 (a) Anything to the contrary herein notwithstanding, the Corporation’s obligation to sell
and deliver Common Stock pursuant to the exercise of an option 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 of 1933 or the Exchange Act, or the rules and regulations of the Securities Exchange Commission
promulgated thereunder or those of any stock exchange on which the stock may be listed and 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 Board may impose such restrictions on any shares of Common Stock acquired pursuant to
the exercise of an option under the Plan as it may deem advisable, including, without limitation,
restrictions (i) under applicable federal securities laws, (ii) under the requirements of a Stock
Exchange or other recognized trading market 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. No
shares shall be issued until counsel for the Corporation has determined that the Corporation has
complied with all requirements under appropriate securities laws.

     3.8 Delivery of Plan. Each Employee who is a participant in the Plan shall have
delivered to him or her a copy of the Plan.

8

 

     3.9 Effect on Employment. Neither the adoption of the Plan nor the granting of an
option pursuant to it shall be deemed to create any right in any individual to be retained or
continued in the employment of the Corporation.

     3.10 Certificates. If certificates are issued, the Corporation shall have the right
to retain such certificates representing shares of Common Stock issued pursuant to the Plan until
such time as all conditions and/or restrictions applicable to such shares of Common Stock have been
satisfied.

     3.11 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.

     3.12 Approval of Plan. The Plan shall be subject to the approval of the holders of at
least a majority of the Common Stock of the Company present and entitled to vote at a meeting of
shareholders of the Company held within twelve (12) months after adoption of the Plan by the Board.
If not approved by shareholders within such 12-month period, the Plan and any options granted
hereunder shall become void and of no effect.

     3.13 Governing Law. This Plan shall be governed by and construed under the laws of
the State of Michigan without regard to its conflict of law provisions.

     This ITC Holdings Corp. Employee Stock Purchase Plan has been executed on behalf of the
Corporation on this the 17th day of May, 2006.

	 	 	 	 	 
	 	ITC HOLDINGS CORP.

 	 
	 	By:  	/s/ Daniel J. Oginsky
 	 
	 	 	Its: 	Vice President, General Counsel and Secretary 	 
	 	 	 	 
	 

	 	 	 
	BOARD APPROVAL:

	 	2/8/2006
	 
	 	 
	SHAREHOLDER APPROVAL:

	 	5/17/2006
	 
	 	 
	BOARD AMENDMENT:

	 	6/8/2007

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]