Document:

a10213-fortisinc2020rest

FORTIS INC.  2020 RESTRICTED SHARE UNIT PLAN  Effective as of January 1, 2020  Amended – January 1, 2022   Schedule A Amended – January 1, 2021    ARTICLE 1   PREAMBLE AND DEFINITIONS  1.1 Title  The Restricted Share Unit Plan herein, as amended or restated from time to time,  shall be called the “2020 Restricted Share Unit Plan” and is referred to herein as the “Plan”.  1.2 Purpose of the Plan  The purpose of the Plan is to (a) promote a greater alignment of interests between  the senior management of the Corporation and the shareholders of the Corporation, (b) foster the  growth and success of the business of the Corporation in accordance with its vision, (c) ensure  that management is focused on the Corporation’s primary business objectives and (d) assist the  Corporation in attracting and retaining senior management.  1.3 Defined Terms  In the Plan, the following terms have the respective meanings set out below and  grammatical variations of such terms shall have corresponding meanings:  “Administrator” means such administrator as may be appointed by the Corporation and  identified to Participants from time to time to assist in the administration of the Plan in  accordance with Section 7.1, which administrator may be the Corporation or any of its  Subsidiaries acting for the benefit of Participants;  “Affected Participant” means, in connection with a Change of Control pursuant to:   (a) clause (a) of the definition of Change of Control, each Participant; or  (b) clause (b) of the definition of Change of Control, each Participant who is an  Employee of the affected Subsidiary who ceases to be employed by the  Corporation or any of its Subsidiaries immediately following such Change of  Control;  “Applicable Exchange Rate” means in connection with any conversion to U.S. Dollars  pursuant to Section 4.1(d), 4.2, 4.3, 5.1(a), 5.1(b) or otherwise required pursuant to the  Plan, the Exchange Rate as of the Business Day immediately prior to the Grant Date of  such Restricted Share Unit or any underlying Restricted Share Unit, as applicable;  “Applicable Law” means any applicable provision of law, domestic or foreign, including,  without limitation, the Income Tax Act (Canada) and the Corporations Act (Newfoundland  and Labrador), as they may be amended, supplemented or replaced from time to time,  

 

- 2 -  together with all regulations, rules, policy statements, rulings, notices, orders or other  instruments promulgated thereunder and any applicable rules or policies of any stock  exchange;  “Blackout Period” means a period when a Participant is prohibited from trading in the  Corporation’s securities pursuant to securities regulatory requirements or the  Corporation’s written policies then applicable;  “Board” means the Board of Directors of the Corporation;  “Business Day” means any day, other than a Saturday, Sunday or statutory or civic  holiday in the Provinces of Ontario or Newfoundland and Labrador;  “Canadian Dollars” means the lawful currency of Canada;  “Change of Control” means:  (a) with respect to the Corporation, the occurrence of any one or more of the following  events:  (i) the acquisition of ownership, directly or indirectly, beneficially or of record,  by any person or combination of persons acting jointly or in concert with  each other, of Voting Securities representing more than 50% of the  aggregate ordinary voting power represented by the issued and  outstanding Voting Securities;  (ii) the sale, lease, exchange or other disposition, in a single transaction or a  series of related transactions, of assets, rights or properties of the  Corporation and/or any of its Subsidiaries which have an aggregate book  value greater than 50% of the book value of the assets, rights and  properties of the Corporation and its Subsidiaries on a consolidated basis  to any other person or entity, other than a disposition to a wholly owned  Subsidiary in the course of a reorganization of the assets of the Corporation  and its Subsidiaries;  (iii) the adoption of a resolution to wind-up, dissolve or liquidate the  Corporation;   (iv) as a result of or in connection with: (A) a contested election of Directors; or  (B) a consolidation, merger, amalgamation, arrangement or other  reorganization or acquisition involving the Corporation or any of its affiliates  and another corporation or other entity, the nominees named in the most  recent management information circular of the Corporation for election to  the Board shall not constitute a majority of the Board; or  (v) the Board adopts a resolution to the effect that a change of control of the  Corporation has occurred or is imminent; and  (b) with respect to any Subsidiary, the occurrence of any one or more of the following  events:  

 

- 3 -  (i) the acquisition of ownership, directly or indirectly, beneficially or of record,  by any person or combination of persons acting jointly or in concert with  each other, other than the Corporation or another Subsidiary (or a  combination thereof), of voting securities of such Subsidiary representing  more than 50% of the aggregate ordinary voting power represented by the  issued and outstanding voting securities of such Subsidiary;  (ii) the sale, lease, exchange or other disposition, in a single transaction or a  series of related transactions, of assets, rights or properties of such  Subsidiary which have an aggregate book value greater than 50% of the  book value of the assets, rights and properties of such Subsidiary on a  consolidated basis to any other person or entity, other than a disposition to  the Corporation or another Subsidiary (or a combination thereof) in the  course of a reorganization of the assets of such Subsidiary;  (iii) the adoption of a resolution to wind-up, dissolve or liquidate the Subsidiary;  or  (iv) the Committee determines that a change of control with respect to such  Subsidiary has occurred or is imminent;  “Committee” means the Human Resources Committee or other committee of Directors  designated by the Board from time to time to administer the Plan and consisting of not  less than three members of the Board, each of whom qualifies as independent under  section 1.4 of National Instrument 52-110 – Audit Committees and the applicable rules of  the NYSE, and where no such committee has been appointed, means the Board;  provided, however, without limiting the foregoing, that if the Corporation ceases to qualify  as a “foreign private issuer” (as defined in Rule 3b-4 under the Exchange Act), the  Committee shall be a committee of the Board comprised of not less than two directors,  and each member of the Committee shall be a “non-employee director” within the meaning  of Rule 16b-3 under the Exchange Act;  “Common Share Account” has the meaning ascribed thereto in Section 6.1(a)(i);   “Common Shares” means the common shares of the Corporation;  “Corporation” means Fortis Inc. and any successor corporation whether by arrangement,  amalgamation, merger or otherwise;  “Director” means a director of the Corporation;  “Disability” means, with respect to a Participant, the physical or mental illness of the  Participant resulting in the Participant’s absence from his or her full-time duties with the  Corporation or a Subsidiary, in respect of which the Participant commences receiving, or  is eligible to receive, long-term disability benefits under the long-term disability plan of the  Corporation or a Subsidiary, as applicable;  “Election Deadline” means, unless otherwise determined by the Committee or provided  in the Plan, the date that is 30 days prior to the Vesting Date of a Restricted Share Unit;  

 

- 4 -  “Employee” means an employee of the Corporation or a Subsidiary, and includes an  officer of the Corporation or a Subsidiary, but excludes a director of the Corporation or a  Subsidiary who is not also an employee of the Corporation or a Subsidiary;  “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended;   “Exchange Rate” means, as of a relevant date, the daily average rate of exchange of the  Bank of Canada for converting Canadian Dollars to U.S. Dollars, or if on such date a daily  average rate of exchange of the Bank of Canada is not available, the daily average rate  of exchange of the Bank of Canada on the immediately preceding day on which such  exchange rate is available;  “Executive Compensation Policy” means, as applicable, the executive compensation  policy of the Corporation in effect from time to time and any similar policy or practice of  the Corporation or any Subsidiary in effect from time to time, but only to the extent such  policy or practice applies to a Participant;  “Expiry Date” means the date designated by the Committee on which a Restricted Share  Unit will be terminated and cancelled in accordance with the Plan or, if no such date is  specified in the applicable Grant Agreement, December 31 of the third calendar year  following the calendar year that includes the Grant Date of such Restricted Share Unit;  “Good Reason” means the occurrence, after a Change of Control, of any of the  following events without the Affected Participant's written consent:   (a) a reduction in the base salary of the Affected Participant other than a general  reduction that affects all similarly situated executives in substantially the same  proportions;  (b) a reduction in the Affected Participant’s target short term incentive or long term  incentive opportunity, other than a general reduction that affects all similarly  situated executives in substantially the same manner;  (c) any failure by the Corporation or the Subsidiary, as applicable, to comply with  any material terms of the Affected Participant's employment as in effect  immediately prior to such Change of Control, other than an inadvertent failure not  occurring in bad faith and which is remedied by the Corporation or such  Subsidiary promptly after receipt of written notice thereof given by the Affected  Participant;   (d) any material adverse change in the Affected Participant’s duties, responsibilities,  authority, title, status or reporting structure as in effect immediately prior to the  Change of Control;  (e) the discontinuation or amendment of any equity incentive plan, short term  incentive plan, employee benefit plan or other material fringe benefit or  perquisite, if such discontinuation or amendment results in less favourable  treatment of the Affected Participant, in the aggregate (unless minor or  insignificant), taking into consideration any related amendment or replacement  plan, benefit or perquisite, as applicable; or   

 

- 5 -  (f) the Corporation or the Subsidiary, as applicable, requiring the Affected  Participant to be based at any office or location other than (i) within 50 kilometres  of the Affected Participant's office or location immediately prior to the Change of  Control or (ii) at any other office or location previously agreed to in writing by the  Affected Participant;  “Grant Agreement” means an agreement between the Corporation and a Participant  evidencing the grant of Restricted Share Units to such Participant, which shall be  substantially in the form of Schedule A;  “Grant Date” means the effective date of each grant of Restricted Share Units by the  Committee to a Participant, which shall be January 1 of the calendar year of such grant;  “Involuntary Employment Action” as to a Participant means the termination of the  Participant’s employment with the Corporation or a Subsidiary, as applicable, (a) by the  Corporation or the Subsidiary other than (i) as a result of the death, Disability or Retirement  of that Participant or (ii) for Just Cause, or (b) by the Participant for Good Reason;  “Just Cause” means a determination by the Board that any of the following has occurred:  (a) wilful and continued failure by the Participant to substantially perform the Participant’s  duties to the Corporation or a Subsidiary (other than any such failure resulting from his or  her incapacity due to physical or mental illness) after a demand for substantial  performance improvement has been delivered in writing to the Participant which  specifically identifies the manner in which the Participant has not substantially performed  his or her duties; (b) wilful engaging by the Participant in misconduct that is materially  injurious to the Corporation or a Subsidiary, monetarily or otherwise; (c) the conviction of  the Participant of a criminal offence involving dishonesty; or (d) any other action or  omission that would be just cause at law; provided that no act, or failure to act, on the  Participant’s part shall be considered “wilful” unless the Board determines that such act or  failure to act by the Participant was in bad faith and was not reasonably believed by the  Participant to be in the best interests of the Corporation or a Subsidiary, as applicable;  “Market Price” at any date in respect of the Common Shares means: (x) the volume  weighted average trading price of the Common Shares determined by dividing the total  value of the Common Shares traded on the TSX during the last five Trading Days  immediately preceding such date by the total volume of the Common Shares traded on  the TSX during such five Trading Days (or, if such Common Shares are not then listed  and posted for trading on the TSX, on such stock exchange on which such Common  Shares are listed and posted for trading as may be selected for such purpose by the  Board); or (y) in the event that such Common Shares are not listed and posted for trading  on any stock exchange, the Market Price shall be the fair market value of such Common  Shares as determined by the Board in its sole discretion, acting in good faith;  “NYSE” means the New York Stock Exchange or any successor thereto;   “Outside Date” has the meaning ascribed thereto in Section 10.5;  “Participant” means any Employee to whom a Restricted Share Unit has been granted in  accordance with the terms and conditions of the Plan;  

 

- 6 -  “Payout Amount” means, with respect to each Vested Unit, a cash payment equal to the  Market Price of one Common Share on the applicable Pricing Date which, for greater  certainty, (x) in the case of a U.S. Taxpayer, will be converted to U.S. Dollars using the  Applicable Exchange Rate and (y) for all other Participants, will be denominated in  Canadian Dollars;  “Payout Share” means, with respect to each Vested Unit, one Common Share;  “person” includes any individual, corporation, partnership, firm, joint venture, syndicate,  association, trust, government, governmental agency and any other form of entity or  organization;  “Plan” has the meaning ascribed thereto in Section 1.1;  “Pricing Date” means, for a Restricted Share Unit, the earlier of:  (a) the Vesting Date for that Restricted Share Unit as determined in accordance with  Section 4.1(h); and  (b) in the case of any Restricted Share Unit deemed to be redeemed by a Participant  pursuant to Section 4.2 or 5.3 of the Plan, the applicable date on which such  Restricted Share Unit is deemed to be a Vested Unit and redeemed by such  Participant,  provided that to the extent that any such date occurs during a Blackout Period, such  Pricing Date shall be extended to the tenth Business Day following the expiration of such  Blackout Period or such other date following the expiry of such Blackout Period as may  be determined by the Committee, acting reasonably;  “Restatement” has the meaning ascribed thereto in Section 8.1(a);  “Restricted Share Unit” means a notional unit evidenced by an entry on the books of the  Corporation, which represents the right of a Participant, at his or her election, subject to  the provisions of the Plan, to receive the Payout Amount or a Payout Share;  “Restricted Share Unit Account” means the account maintained for a Participant on the  books of the Corporation into which Restricted Share Units will be credited in accordance  with Section 4.1, 4.2 or 4.3 and debited in accordance with Section 4.2 or Article 5;  “Retirement” means the retirement of a Participant from employment with the Corporation  or a Subsidiary, subject to any policy, practice or requirement relating to the minimum age  and service as of the date of retirement and/or other term of service as may be stipulated  by the specific Corporation or Subsidiary at the time of retirement;  “Section 409A” has the meaning ascribed thereto in Section 10.1;   “Securities Act” has the meaning ascribed thereto in Section 6.2;  “Service” means the period of employment of the Participant by the Corporation or any of  its Subsidiaries, including service with a Subsidiary which has been acquired, directly or  indirectly, by the Corporation;  

 

- 7 -  “Share Ownership Requirements” means the share ownership requirements applicable  to certain Participants arising pursuant to any share ownership policy of the Corporation  or any similar policy of any Subsidiary in effect from time to time, but only to the extent  that such policy applies to such Participant. For greater certainty, any transitional period  that applies to a Participant under any share ownership policy of the Corporation or any  similar policy of any Subsidiary in effect from time to time shall not be taken into account  for purposes of the Plan or any determination required to be made by the Committee in  respect of a Participant pursuant to Section 4.1(f);  “Subsidiary” means a person (other than an individual) which is controlled, directly or  indirectly, by the Corporation, whether as a result of registered or beneficial ownership of  a majority of the voting securities of such person, the right to appoint a majority of the  directors of such person, a contractual arrangement or otherwise;  “Termination Date” means, in respect of (a) a Participant other than a U.S. Taxpayer, the  effective date of the termination of employment of such Participant by the Corporation or  any of its Subsidiaries, as determined by the Corporation or Subsidiary, as applicable,  subject to any period of notice of termination under employment standards legislation,  employment contract or the common law applicable to such Participant, if termination of  employment has not been by reason of Just Cause or voluntary resignation, and (b) a U.S.  Taxpayer, the date on which such Participant has been “separated from service” with the  Corporation or any of its Subsidiaries as defined under Section 409A;  “Trading Day” means any date on which the TSX is open for the trading of the Common  Shares (or, if the Common Shares are not then listed and posted for trading on such  exchange, on such other stock exchange on which the Common Shares are listed and  posted for trading as may be selected for such purpose by the Board);  “TSX” means the Toronto Stock Exchange or any successor thereto;  “U.S. Dollars” means the lawful currency of the United States of America;  “U.S. Taxpayer” means any Participant who is a citizen or permanent resident of the  United States, or is otherwise subject to taxation by the United States on a net basis;  “Vested Unit” means a Restricted Share Unit which has vested in accordance with the  terms and conditions of the Plan;  “Vesting Date” means the date on which a Restricted Share Unit vests in accordance with  the terms and conditions of the Plan; and  “Voting Securities” means the Common Shares and any other shares entitled to vote for  the election of Directors and shall include any security, whether or not issued by the  Corporation, which are not shares entitled to vote for the election of Directors but are  convertible into or exercisable or exchangeable for shares which are entitled to vote for  the election of Directors including any options or rights to purchase such shares or  securities.  1.4 Schedule  The following Schedule is attached to and forms part of the Plan:   

 

- 8 -  Schedule A - Form of Grant Agreement  ARTICLE 2   INTERPRETATION  2.1 Governing Law  The Plan shall be interpreted and enforced in accordance with the laws of the  Province of Newfoundland and Labrador and the federal laws in Canada applicable therein. The  participation of a Participant in the Plan shall be construed as acceptance of the terms and  conditions of the Plan by such Participant and as the Participant’s agreement to be bound thereby.  2.2 Severability  If any provision of the Plan is determined by a court of competent jurisdiction to be  invalid, illegal or unenforceable in any respect, all other provisions of the Plan shall nevertheless  remain in full force and effect so long as the economic or legal substance of the transactions  contemplated hereby is not affected in any manner materially adverse to the Corporation, any of  its Subsidiaries, or any Participant.  2.3 References  The division of the Plan into articles and sections and the insertion of headings are  for convenience of reference only and shall not affect the construction or interpretation of the Plan.  Words importing the singular number only shall include the plural and vice versa and words  importing the use of any gender shall include all genders.  2.4 Fractional Restricted Share Units  Subject to Section 5.1(b), fractional Restricted Share Units are permitted under the  Plan.  ARTICLE 3   ESTABLISHMENT OF THE PLAN  3.1 Establishment  The Corporation is establishing the Plan for Participants effective as at January 1,  2020.  3.2 No Additional Rights  Nothing herein contained shall be deemed to give any person the right to be  retained as an Employee or to otherwise be retained in the service of the Corporation or a  Subsidiary. Restricted Share Units are not Common Shares and will not entitle a Participant to  any shareholder rights, including, without limitation, voting rights, the right to receive dividends or  rights on liquidation, dissolution or winding-up of the Corporation.  

 

- 9 -  ARTICLE 4   RESTRICTED SHARE UNIT GRANTS  4.1 Grant of Restricted Share Units  (a) The Committee may at any time and from time to time grant Restricted Share Units  in accordance with the Executive Compensation Policy, and pursuant to a Grant Agreement  entered into in accordance with the terms hereof, to persons designated to be Participants  hereunder. Grants of Restricted Share Units and the terms thereof shall be recorded in a register  to be maintained by the Corporation, which register may be amended, supplemented or replaced  from time to time.  (b) Each Restricted Share Unit shall be granted to a Participant as a bonus in respect  of services rendered by such Participant and shall be issued in the same calendar year that such  services are rendered.  (c) The aggregate dollar amount of the Restricted Share Units granted to a Participant  on the Grant Date shall be determined by the Committee, having regard to the recommendation  of the board of directors of the Subsidiary employer of the Participant, to the extent applicable, in  accordance with the Executive Compensation Policy. For greater certainty, the aggregate dollar  amount of the Restricted Share Units granted to a Participant on the Grant Date (x) in the case of  a U.S. Taxpayer, will be denominated in U.S. Dollars and (y) for all other Participants, will be  denominated in Canadian Dollars.  (d) The number of Restricted Share Units to be granted to a Participant on the Grant  Date shall be determined by dividing (i) the aggregate dollar amount of the Restricted Share Units  granted to such Participant as determined by the Committee in accordance with Section 4.1(c) by  (ii) the Market Price of the Common Shares on the Grant Date or, to the extent that the Grant  Date occurs during a Blackout Period, the tenth Business Day following the expiration of such  Blackout Period. To the extent that the aggregate dollar value in (i) is denominated in U.S. Dollars,  the calculation to be performed pursuant to this Section 4.1(d) shall be performed following the  conversion of the aggregate dollar amount referenced in clause (i) to Canadian Dollars using the  Applicable Exchange Rate.   (e) The Committee may determine from time to time that special circumstances exist  that would reasonably justify the grant of Restricted Share Units to a Participant as compensation  in addition to any annual grant of Restricted Share Units which the Participant may otherwise  receive in accordance with this Section 4.1. Upon making such a determination, the Committee  may grant Restricted Share Units to such a Participant provided that the Restricted Share Units  comply in all other respects with the terms and conditions of the Plan. Except as provided for in  this Section 4.1(e) and Sections 4.2 and 4.3, no further Restricted Share Units shall be granted  under the Plan other than by way of annual grant by the Committee.  (f) Subject to the provisions of this Section 4.1(f), Section 4.1(i) and Section 6.2, each  Restricted Share Unit which becomes a Vested Unit pursuant to the provisions of the Plan shall  give the Participant the right to receive either the Payout Amount or a Payout Share. Except as  provided in Section 4.2 and Section 6.2, a Participant who does not satisfy his or her Share  Ownership Requirements on the Election Deadline, as determined by the Committee, shall  receive a Payout Share in respect of 50% of all of the Vested Units covered by the relevant Grant  Agreement (including, for greater certainty, all Restricted Share Units credited on such underlying  Restricted Share Units pursuant to Section 4.3) and shall not be entitled to elect to receive the  

 

- 10 -  Payout Amount in respect of such Vested Units (but shall be entitled to elect to receive the Payout  Amount or Payout Shares in respect of the other 50% of such Vested Units). A Participant who  satisfies his or her Share Ownership Requirements on the Election Deadline for a Restricted  Share Unit shall have the right to elect to receive the Payout Amount or, subject to the provisions  of Section 6.2, a Payout Share in respect of all Vested Units covered by the relevant Grant  Agreement (including, for greater certainty, all Restricted Share Units credited on such underlying  Restricted Share Units pursuant to Section 4.3). The election to receive the Payout Amount or  Payout Shares shall be made by the Participant in writing to the Administrator on or before the  Election Deadline for the applicable Restricted Share Units. For each Participant who is entitled  to elect to receive the Payout Amount or a Payout Share for Vested Units, if no election is provided  by the Participant in accordance with this Section 4.1(f), the Participant will be deemed to have  elected to receive the Payout Amount upon the vesting of his or her Restricted Share Units. Any  election to receive Payout Shares by a Participant pursuant to this Section 4.1(f) may be made in  respect of 100% of the Vested Units covered by the relevant Grant Agreement (including, for  greater certainty, all Restricted Share Units credited on such underlying Restricted Share Units  pursuant to Section 4.3) or, if made in respect of less than all such Vested Units, must be made  in respect of 50% of such Vested Units. The election or deemed election by a Participant to  receive the Payout Amount and/or Payout Shares for Vested Units covered by a Grant Agreement  is not subject to change, revision or amendment by the Participant following the applicable  Election Deadline.  (g) Notwithstanding any other provision of the Plan or a Grant Agreement, Restricted  Share Units granted under the Plan, if not redeemed or previously terminated and forfeited in  accordance with the Plan, shall terminate on and be of no further force and effect after the Expiry  Date.  (h) The Committee shall designate, at the time of grant of Restricted Share Units, the  date or dates on which all or a portion of the Restricted Share Units shall become Vested Units,  subject to any terms or conditions determined under Section 4.1(i). Unless otherwise determined  by the Committee to be earlier, and subject to Sections 4.2, 4.3, 5.2 and 5.3, the Vesting Date  shall be the third anniversary of the Grant Date in respect of any grant of Restricted Share Units.  The Committee may, subsequent to the Grant Date, but prior to the Vesting Date designated at  the time of grant, designate an earlier date for vesting of all or any portion of Restricted Share  Units then outstanding and granted to a Participant under the Plan, in which event such unvested  Restricted Share Units shall be deemed to be Vested Units on such earlier date.  (i) Subject to the terms and conditions of the Plan, the Committee may determine the  terms and conditions of any Restricted Share Units in addition to those set forth herein at the time  of grant or from time to time following the Grant Date, including any additional conditions with  respect to the vesting of Restricted Share Units, which do not conflict with the Plan. The  Committee may, subsequent to the Grant Date, waive any such term or condition or determine  that it has been satisfied. The Committee may at any time, including in the circumstances  described in Section 6.2 or as otherwise required pursuant to Applicable Law, revoke or limit the  right of a Participant to elect to receive Payout Shares in respect of Vested Units. If the Committee  accelerates the Vesting Date of Restricted Share Units it shall provide at least 10 days prior  written notice of such accelerated Vesting Date and any applicable Election Deadline to all  affected Participants in order to permit such Participants to elect to receive the Payout Amount or  Payout Shares on or before such Vesting Date in accordance with Section 4.1(f).  (j) No certificates shall be issued with respect to Restricted Share Units.  

 

- 11 -  (k) All Restricted Share Units granted hereunder shall be evidenced by a Grant  Agreement between the Corporation and the Participant substantially in the form of Schedule A  hereto.  4.2 Adjustments, Reorganizations and Change of Control  (a) In the event of any stock dividend, stock split, combination or exchange of  shares, merger, consolidation, arrangement, amalgamation, spin-off or other distribution (other  than normal cash dividends) of the Corporation’s assets to the shareholders, or any other  change affecting the Common Shares, such proportionate adjustments, if any, as the  Committee in its discretion may deem appropriate to reflect such change shall be made with  respect to the number of Restricted Share Units outstanding under the Plan. In the event the  Corporation is not the surviving entity in a merger, consolidation, arrangement, amalgamation or  other similar transaction with another entity or in the event of a liquidation or reorganization of  the Corporation, and in the absence of any surviving entity’s assumption of the Plan and the  outstanding Restricted Share Units, the Committee may in its discretion and subject to Section  4.2(b), provide for appropriate settlements of Restricted Share Units.  (b) In the event of a Change of Control, the Committee may in its discretion provide  for appropriate settlements of Restricted Share Units or for the successor or continuing entity to  either assume outstanding Restricted Share Units or substitute Restricted Share Units with new  awards (such assumed or substituted Restricted Share Units, “Replacement Awards”) on  terms determined by the Committee in its sole discretion to be substantially equivalent to the  terms of the Restricted Share Units held immediately prior to such Change of Control  (“Replaced Units”); provided that any Replacement Awards must: (i) have economic value  substantially equivalent to the value of the Replaced Units (determined at the time of the  Change of Control); (ii) relate to publicly traded equity securities; (iii) in the case of Affected  Participants who are U.S. Taxpayers, comply with the requirements of Section 409A; and  (iv) contain other terms and conditions which are, in the aggregate, no less favourable to the  Affected Participant than the Replaced Units, including terms and conditions that provide that if  there is an Involuntary Employment Action in respect of an Affected Participant within 24  months following the Change of Control, any conditions on the Affected Participant’s rights  under, or any restrictions on vesting applicable to, such Replacement Awards held by such  Affected Participant shall be waived or shall lapse, as the case may be, and any performance- based restrictions shall be deemed to have been achieved at target level performance. The  determination of whether the conditions in the preceding sentence have been satisfied will be  made by the Committee, as constituted immediately prior to the Change of Control, in its sole  discretion.  (c) Where any Restricted Share Units are settled and not assumed or substituted  with Replacement Awards pursuant to Section 4.2(b), such Restricted Share Units shall become  Vested Units and shall be redeemed on the effective date of the consummation of the  transaction(s) resulting in the Change of Control. For purposes of determining the Payout  Amount, the Market Price of such Restricted Share Units shall be calculated as of the date that  is immediately prior to the date of the Change of Control (in the case of a U.S. Taxpayer, in  each case converted to U.S. Dollars using the Applicable Exchange Rate for each underlying  Restricted Share Unit).   (d) Subject to Section 7.5, unless otherwise determined by the Committee:  

 

- 12 -  (i) where Restricted Share Units are settled in accordance with Section  4.2(c), the Corporation shall pay the Payout Amount payable in respect of  such Restricted Share Units prior to the effective time of the Change of  Control, and  (ii) where Restricted Share Units are settled in connection with an  Involuntary Employment Action in respect of a Participant within 24  months following the Change of Control, the Corporation shall pay the  Payout Amount payable in respect of such Units no later than 10  Business Days following the effective date of the Involuntary Employment  Action,   except, in each case, to the extent that later payment is required to comply with  Section 409A.  (e) For greater certainty, the limitation in Section 4.1(f) that a Participant who does  not satisfy his or her Share Ownership Requirements on the Election Deadline will receive  Payout Shares in respect of 50% of his or her Vested Units does not apply in connection with a  Change of Control or an Involuntary Employment Action within 24 months following a Change of  Control, and the Affected Participant will receive the Payout Amount in respect of all Vested  Units.  4.3 Dividend Equivalents  Each Participant’s Restricted Share Unit Account shall be credited with additional  Restricted Share Units equal to the “dividend equivalent” when a cash dividend is paid on the  Common Shares. Such “dividend equivalent” shall be equal to a fraction where the numerator is  the product of (x) the number of Restricted Share Units in such Participant’s Restricted Share Unit  Account on the date that the dividend is paid multiplied by (y) the dividend paid per Common  Share and the denominator of which is the Market Price of one Common Share calculated as of  the date that the dividend is paid. Any additional Restricted Share Units credited to a Participant’s  Restricted Share Unit Account as a “dividend equivalent” shall have a Vesting Date which is the  same as the Vesting Date for the Restricted Share Units in respect of which such additional  Restricted Share Units are credited.  ARTICLE 5   PAYMENT AND PARTICIPANT’S TERMINATION  5.1 Payment  (a) Subject to the provisions of Sections 4.2, 5.3, 6.2 and 7.5, the Participant shall be  entitled to receive, and the Corporation shall pay or deliver or cause a Subsidiary to pay or deliver,  as applicable, to the Participant, in accordance with the election (or deemed election) of such  Participant relating to such Restricted Share Units pursuant to Section 4.1(f), the Payout Amount  or the Payout Share, as applicable, in respect of each Vested Unit: (i) within 30 days of the  applicable Pricing Date; or (ii) if a Blackout Period occurs following a Pricing Date and prior to any  payment pursuant to this Section 5.1(a)(i), within 30 days of the expiry of such Blackout Period,  but in either such case not later than December 31 of the year in which the Vesting Date occurs.  Upon the Corporation having paid the Payout Amount or delivered the Payout Share in respect  of a Vested Unit, such Vested Unit in the Participant’s Restricted Share Unit Account shall be  terminated and cancelled.  

 

- 13 -  (b) Subject to the provisions of Section 7.5, if a Participant has validly elected to  receive or otherwise receives Payout Shares in respect of Restricted Share Units which have  become Vested Units, the Corporation shall deliver cash to the Administrator in an amount  sufficient and within such time period as is reasonable to permit the Administrator to: (i) purchase  such Payout Shares on the TSX or the NYSE or any other exchange on which the Common  Shares are then listed and posted for trading; and (ii) deliver Payout Shares to Participants  equivalent in number to the number of such Vested Units, within the time period required pursuant  to Section 5.1(a). No fractional Common Shares may be paid to a Participant under the Plan. In  the event that a Participant holds a fractional Vested Unit, the Participant shall be entitled to  receive, on delivery of its Payout Shares, a cash payment in respect of such fractional Vested  Unit equal to such fraction multiplied by the Market Price of one Common Share on the applicable  Pricing Date (in the case of a U.S. Taxpayer, converted to U.S. Dollars using the Applicable  Exchange Rate for the underlying Restricted Share Units).  5.2 Termination for Just Cause or by Voluntary Resignation  Notwithstanding anything else contained herein, if a Participant has ceased to be  an Employee by virtue of being terminated for Just Cause or voluntary resignation other than for  Good Reason, all unvested Restricted Share Units in such Participant’s Restricted Share Unit  Account shall be cancelled and the number of unvested Restricted Share Units in such account  shall be deemed to be zero as of the Termination Date. Following the Termination Date, such  Participant shall have no rights with respect to such cancelled Restricted Share Units or to any  further benefits under the Plan, save and except for any Payout Amount or Payout Shares due  and payable in respect of Vested Units for which the Vesting Date occurred prior to the  Termination Date and any Common Shares in such Participant’s Common Share Account.  5.3 Death, Disability or Retirement of a Participant  If a Participant ceases to be an Employee as a result of death, Disability or  Retirement:  (a) notwithstanding Section 4.1(h), but subject to Section 5.3(b), all of the Restricted  Share Units of a Participant shall become Vested Units and shall be redeemed on  the date of the death or Retirement of the Participant or on the date on which the  Participant’s employment is terminated as a result of the Disability of the  Participant;  (b) the amount payable in respect of such Restricted Share Units:  (i) where the Participant has been in Service for less than 15 years, and in the  case of Retirement, has provided the Corporation and/or any of its  Subsidiaries, as applicable, with at least 90 days’ prior written notice of  such Retirement, shall be prorated to reflect the actual period between the  Grant Date and the date the Participant ceased to be employed as a result  of death, Disability or Retirement, as the case may be; and  (ii) where the Participant has been in Service for 15 years or more, and in the  case of Retirement, has provided the Corporation and/or any of its  Subsidiaries, as applicable, with at least 90 days’ prior written notice of  such Retirement, shall be determined as if the Participant continued to be  

 

- 14 -  an Employee on the Vesting Date of each Restricted Share Unit in such  Participant’s Restricted Share Unit Account,  subject to the discretion of the Committee to determine that special circumstances  exist that reasonably justify an adjustment to the amount which would otherwise  be paid to a Participant pursuant to this Section 5.3(b); and  (c) in the case of the death of a Participant, the Participant’s designated beneficiary  or estate will be entitled to receive payment, if any, in respect of the Restricted  Share Units of the Participant in accordance with paragraph (b) above.  For greater certainty, a Participant who ceases to be employed as a result of death, Disability or  Retirement will receive the Payout Amount in respect of all Vested Units, as adjusted to the extent  required in accordance with Section 5.3(b)(i), unless the Administrator has received from the  Participant a valid election to receive Payout Shares prior to the date of termination of Service. If  a Participant retires pursuant to Section 5.3(b)(i) and validly elects to receive Payout Shares, the  number of Payout Shares to be delivered to such Participant shall be equal to the aggregate  Payout Amount in respect of such Participant’s Vested Units determined pursuant to  Section 5.3(b)(i) divided by the Market Price of one Common Share calculated as of the date of  termination.  5.4 Involuntary Termination  If a Participant ceases to be an Employee as a result of involuntary termination  other than (a) death, Disability or Retirement, (b) as a result of termination for Just Cause or  voluntary resignation, or (c) any circumstance that gives rise to the settlement of awards in  accordance with Section 4.2(d):  (a) if the Vesting Date of a Restricted Share Unit occurs after the Termination Date  such Restricted Share Unit shall be terminated and cancelled and deemed to have  zero value as of the effective date of termination; and  (b) if the Vesting Date of a Restricted Share Unit occurs on or prior to the Termination  Date, such Restricted Share Unit shall remain outstanding until paid and cancelled  in accordance with Section 5.1.  ARTICLE 6   SETTLEMENT IN COMMON SHARES  6.1 Delivery of Payout Shares  (a) In connection with the delivery of Payout Shares:  (i) any Common Shares purchased by the Administrator on a Participant’s  behalf shall be allocated by the Administrator to the Participant’s account  with the Administrator or a financial intermediary approved by the  Administrator (the “Common Share Account”). The Participant shall  receive an electronic and/or written notification following each allocation of  Payout Shares to the Participant’s Common Share Account in accordance  with the customary reporting practices of the Administrator; or  

 

- 15 -  (ii) to the extent that the Corporation or any of its Subsidiaries acts as  Administrator, the Participant will be required to open an account with a  financial intermediary approved by the Corporation, into which the  Corporation shall credit any Payout Shares payable to the Participant by  book entry, direct registration advice or other electronic evidence of share  ownership utilized by such financial intermediary. If the Participant receives  Payout Shares from the Corporation pursuant to this Section 6.1(a)(ii), the  Participant shall also receive an electronic or written notification from the  Corporation of the number of Payout Shares deposited by the Corporation  with such Participant’s financial intermediary.  (b) Any evidence of share ownership delivered by the Administrator pursuant to the  Plan shall be delivered to the Participant at the address of the Participant on record with the  Corporation or its Subsidiary, as applicable.  6.2 Compliance with U.S. Securities Law  Notwithstanding any provision of the Plan to the contrary, the delivery of Payout  Shares pursuant to the Plan will be subject to compliance with all Applicable Laws with respect to  such securities and with the requirements of any stock exchange or marketplace upon which the  Common Shares may then be listed.  Without limiting the foregoing, no Participant shall be entitled  to elect to receive (or receive) Payout Shares, and no Payout Shares shall be delivered, under  the Plan unless (a) a registration statement under the U.S. Securities Act of 1933, as amended  (the “Securities Act”), has, at the time of delivery, been filed with the U.S. Securities and  Exchange Commission and is effective with respect to the Payout Shares delivered under the  Plan or (b) in the absence of an effective registration statement under the Securities Act, Payout  Shares may be delivered to a Participant under the Plan in the sole discretion of the Corporation,  if in the opinion of legal counsel to the Corporation, (i) the Payout Shares to be delivered under  the Plan may be delivered to such Participant in accordance with the terms of an applicable  exemption from the registration requirements of the Securities Act and (ii) such Participant is  eligible to receive such Payout Shares pursuant to the applicable exemption. A PARTICIPANT IS  CAUTIONED THAT DELIVERY OF PAYOUT SHARES UPON THE VESTING OF RESTRICTED  SHARE UNITS GRANTED PURSUANT TO THE PLAN MAY NOT OCCUR UNLESS THE  FOREGOING CONDITIONS ARE SATISFIED. The inability of the Corporation to obtain from any  regulatory body having jurisdiction the authority, if any, deemed by the Corporation’s legal counsel  to be necessary for the lawful delivery of Payout Shares will relieve the Corporation of any liability  in respect of the failure to deliver such Payout Shares as to which such requisite authority has not  been obtained. As a condition to any delivery of Payout Shares, the Corporation may require the  Participant to satisfy any qualifications that may be necessary or appropriate to evidence  compliance with any Applicable Law (including any applicable exemption from the registration  requirements of the Securities Act) and to make any representation or warranty with respect to  such compliance as may be requested by the Corporation. In addition, in the sole discretion of  the Corporation, in the event that any Payout Shares will be delivered under the Plan to any  Participant pursuant to an exemption from the registration requirements of the Securities Act, the  Corporation shall be entitled to place such legends or similar restrictions on such Payout Shares  as may be required to identify such Payout Shares as “restricted securities” within the meaning  of Rule 144(a)(3) under the Securities Act, if in the opinion of legal counsel to the Corporation  such action is required under Applicable Law to comply with such exemption from registration.  From time to time, the Board, the Committee and appropriate officers of the Corporation are  authorized to take the actions necessary and appropriate to file required documents with  

 

- 16 -  governmental authorities, stock exchanges, and other appropriate Persons to permit or facilitate  the delivery of Common Shares pursuant to the Plan.  ARTICLE 7   ADMINISTRATION  7.1 Administration  The Plan shall be administered by the Committee. Among other things, the  Committee shall have full and complete authority to: (a) interpret the Plan; (b) establish, amend  and rescind any rules and regulations relating to the Plan; (c) make any other determinations that  it deems necessary or desirable for the administration of the Plan, including any determination  required to comply with Section 409A; and (d) subject to the terms of the Plan, delegate to  Employees or to third parties, including the Administrator, the whole or any part of the  administration of the Plan and determine the scope and terms and conditions of such delegation,  including the authority to prescribe rules and regulations under the Plan. The Committee may  correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner  and to the extent the Committee deems necessary or desirable. Any decisions of the Committee  in the interpretation and administration of the Plan, as described herein, shall lie within its sole  and absolute discretion and shall be final, conclusive and binding on all parties concerned and  their beneficiaries, legal representatives and successors, as applicable, and the shareholders of  the Corporation.  7.2 Unfunded Obligation  Unless otherwise determined by the Committee, the Plan will be an unfunded  obligation of the Corporation and the Corporation’s obligations hereunder shall constitute general,  unsecured obligations, payable solely out of its general assets, and no Participant or other person  shall have any right to any specific assets of the Corporation. The Corporation shall not segregate  any assets for the purpose of funding its obligations with respect to the Restricted Share Units  granted hereunder and shall not be deemed to be a trustee of any amounts to be distributed or  paid pursuant to the Plan. No liability or obligation of the Corporation under the Plan shall be  deemed to be secured by any pledge of, or encumbrance on, any property or assets of the  Corporation. To the extent any individual holds rights under the Plan, such rights (unless  otherwise determined by the Committee) shall be no greater than the rights of an unsecured  general creditor of the Corporation.  7.3 Amendment, Suspension and Termination  The Plan may be amended, suspended or terminated at any time by the Board, in  whole or in part, except as to rights already accrued by the Participants (unless such Participant  consents to any such change in writing). If the Plan is terminated, prior awards shall, at the  discretion of the Committee, either (a) become immediately payable in accordance with Section  4.2, 5.1 or 5.3, as applicable, or (b) remain outstanding and in effect in accordance with their  applicable terms and conditions.  7.4 Cost of Administration  The Corporation will be responsible for all costs relating to the administration of  the Plan.  

 

- 17 -  7.5 Withholding Taxes  If the Corporation or a Subsidiary shall be required to withhold any amounts by  reason of any federal, provincial, state or local tax rules or regulations in respect of the payment  of a Payout Amount or the delivery of Payout Shares to a Participant, the Corporation or the  Subsidiary shall be entitled to deduct and withhold such amounts from the entitlements of  Participants in respect of Vested Units, from other income of the Participant or, alternatively, the  Corporation or Subsidiary shall require the Participant to provide funds to satisfy such withholding  obligation or make other arrangements that are satisfactory to the Corporation or Subsidiary, as  the case may be.  ARTICLE 8   CLAWBACK  8.1 Clawback of Payout Amounts, Payout Shares and Restricted Share Units  Notwithstanding any other provision of the Plan, in the event of:  (a) a restatement of financial results of the Corporation or of any Subsidiary employer  of a Participant due to material non-compliance with any financial reporting  requirement under applicable laws, other than as a result of a change or  amendment in accounting principles or applicable laws (a "Restatement"); or  (b) the determination by the Committee that fraud, gross negligence or intentional  misconduct by one or more Participants has occurred, whether or not such conduct  gives rise to a Restatement,   the Committee may determine to recoup, require repayment of or cancel any compensation linked  to the financial or share performance of the Corporation paid, awarded or granted to any  Participant, including any arising pursuant to the Plan, and any profits realized from the sale of  Payout Shares by any such Participant, in each case in respect of the 12 month period following  the first public issuance or filing of the financial results that are subject of the Restatement, or if  there is no Restatement, any event of fraud, gross negligence or intentional misconduct.  ARTICLE 9   ASSIGNMENT  9.1 No Assignment  A Restricted Share Unit is personal to the Participant and is non-assignable. No  Restricted Share Unit granted hereunder shall be pledged, hypothecated, charged, transferred,  assigned or otherwise encumbered or disposed of by the Participant, whether voluntarily or by  operation of law, otherwise than by testate succession or the laws of descent and distribution,  and any attempt to do so will cause such Restricted Share Unit to be null and void. During the  lifetime of the Participant, a Restricted Share Unit shall be redeemable only by the Participant  and, upon the death of a Participant, the person to whom the rights shall have passed by testate  succession or by the laws of descent and distribution may redeem any Restricted Share Units in  accordance with the terms hereof and the Grant Agreement. For greater certainty, the limitations  imposed by this Section 9.1 do not apply in any way to Payout Shares which are held in the  Common Share Account of or have been delivered to a Participant in the Plan, however held.  

 

- 18 -  9.2 Currency  All payments under the Plan shall be made in Canadian dollars, except payments  made to Participants who are U.S. Taxpayers, which will be denominated in U.S. Dollars.  9.3 Successors and Assigns  The Plan shall be binding on all successors and assigns of the Corporation and a  Participant, including, without limitation, the estate of such Participant and the executor,  administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative  of the Participant’s creditors.  ARTICLE 10   CERTAIN RULES APPLICABLE TO U.S. TAXPAYERS  10.1 Intent  To the extent applicable to a Participant, it is intended that each Restricted Share  Unit granted under the Plan shall be exempt from or comply with the requirements of Section  409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). Notwithstanding the  foregoing, the tax treatment of the benefits provided under the Plan is not warranted or  guaranteed. Neither the Corporation, its Subsidiaries nor their respective directors, officers,  employees or advisers shall be held liable for any taxes, interest, penalties or other monetary  amounts owed by a Participant (or any other individual claiming a benefit through the Participant)  as a result of the Plan.  10.2 Separation from Service  If the Committee determines in its sole discretion that any Restricted Share Unit  granted to a Participant who is at the time of the grant, or subsequently becomes, a U.S. Taxpayer  must comply with Section 409A, references in the Plan to a termination or cessation of  employment or like terms shall mean, with respect to such U.S. Taxpayer, a “separation from  service” as defined under Section 409A.  10.3 Six-Month Delay  Notwithstanding anything in the Plan to the contrary, if at the time of a  U.S. Taxpayer’s separation from service, the Committee determines in its sole discretion (a) that  such U.S. Taxpayer is considered to be a “specified employee” within the meaning of  Section 409A and (b) that any Restricted Share Unit of such U.S. Taxpayer must comply with  Section 409A, and such Restriction Share Unit is payable upon the U.S. Taxpayer’s separation  from service, such payment shall not commence prior to the first Business Day following the date  which is six months after the U.S. Taxpayer’s separation from service (or if earlier than the end of  the six month period, the date of the U.S. Taxpayer’s death). For the avoidance of doubt, the  provisions of this Section 10.3 shall not apply to (i) any payment that becomes due on a Pricing  Date that occurs prior to the U.S. Taxpayer’s separation from service, (ii) any payment that  becomes due as a result of the U.S. Taxpayer’s death, and (iii) any payment with respect to a  Restricted Share Unit that qualifies for an exception to the requirements of Section 409A.  

 

- 19 -  10.4 Good Reason  Notwithstanding the definition of "Good Reason" in Section 1.3 of the Plan, a U.S.  Taxpayer shall not be considered to have terminated his or her employment for Good Reason  unless the termination qualifies for the safe harbor provided in Section 1.409A-1(n)(2)(ii) of the  Treasury Regulations.  10.5 Impact of Blackout Period  Notwithstanding anything in the Plan to the contrary, if the Committee determines  in its sole discretion that any Restricted Share Unit granted to a Participant who is at the time of  the grant, or subsequently becomes, a U.S. Taxpayer must comply with Section 409A and if such  Restricted Share Unit becomes a Vested Unit on or before December 31 of any year, but due to  the continuance of a Blackout Period or otherwise, the U.S. Taxpayer would not otherwise receive  the Payout Amount or Payout Share in respect of such Vested Unit pursuant to Section 4.2, 5.1,  5.3, as applicable, before March 15 of the immediately following year (the “Outside Date”), the  Corporation shall, irrespective of any election to receive a Payout Share made pursuant to  Section 4.1(f), satisfy its obligation in respect of such Vested Unit by paying the Payout Amount  in respect of such Vested Unit before the Outside Date. If the Payout Amount is paid to a U.S.  Taxpayer pursuant to this Section 10.5, such Payout Amount shall be determined using a Market  Price fixed by the Committee, acting reasonably (converted to U.S. Dollars using the Applicable  Exchange Rate for the underlying Restricted Share Units).  10.6 Risk of Forfeiture  Notwithstanding anything in the Plan to the contrary, no payment hereunder shall  be made to a U.S. Taxpayer pursuant to Section 4.2 or Article 5 in respect of any Restricted Share  Unit, including any Payout Amount or Payout Share, unless such U.S. Taxpayer is an Employee  on the date that such payment is made to such U.S. Taxpayer, except that in the case of a  U.S. Taxpayer whose employment is terminated for any reason (including death or Disability or  an Involuntary Employment Action), payment may be made to such U.S. Taxpayer at any time  before March 15th of the year immediately following the year in which such termination takes  place.  

 

    SCHEDULE A  FORM OF GRANT AGREEMENT  This agreement is entered into this _____day of _________________, 20_____,  between Fortis Inc. (the “Corporation”) and __________________________________  (the “Participant”) pursuant to the 2020 restricted share unit plan (the “Plan”) adopted by the  Corporation as on January 1, 2020, as may be amended, restated, supplemented or otherwise  modified from time to time.  Pursuant to and in accordance with the Plan and in consideration of [Cdn.$1.00 /  US$1.00] and services rendered by such Participant to the Corporation, the Corporation agrees  to grant the following restricted share units (the “Restricted Share Units”) of the Corporation to  the Participant:    Number of Restricted  Share Units  Grant Date Election Deadline Vesting Date       In addition to the terms set out in this agreement, the granting and redemption of  the Restricted Share Units are subject to the terms and conditions of the Plan, all of which are  incorporated into and form an integral part of this agreement, including the termination provisions  set forth in Article 5.  This agreement shall be binding upon and enure to the benefit of the Corporation,  its successors and assigns and the Participant and the legal representatives of his or her estate  and any other person who acquires the Participant’s rights in respect of the Restricted Share Units  by testate succession or by the laws of descent and distribution.  By executing this agreement, the Participant confirms and acknowledges that he  or she: (a) has been provided with a copy of the Plan and has reviewed the Plan, including the  termination provisions set forth in Article 5, prior to executing the agreement; (b) has been given  adequate opportunity to review and discuss the agreement and the transactions contemplated  hereby with legal counsel or other advisors, (c) has not been induced to enter into this agreement  or acquire any Restricted Share Units by expectation of employment or continued employment  with the Corporation; (d) fully understands his or her rights and obligations under this agreement  and is executing this agreement voluntarily; and (e) is bound by all of the terms and conditions of  this agreement and the Plan applicable to the Restricted Share Units.  The Participant acknowledges and agrees that he or she will not be entitled to elect  to receive the Payout Amount under the Plan and shall receive a Payout Share for 50% of the  Vested Units covered by this agreement where the Participant does not satisfy his or her Share  Ownership Requirements on the Election Deadline for the Restricted Share Units covered by this  agreement (including any Restricted Share Units credited in respect of such Restricted Share  Units pursuant to Section 4.3 of the Plan). In certain other circumstances enumerated in the Plan,  the Participant may lose the right to elect to receive Payout Shares. Any election to receive Payout  Shares must be made in respect of 50% or 100% of the Restricted Share Units covered by this  

 

- 2 -    agreement (including any Restricted Share Units credited in respect of such Restricted Share  Units pursuant to Section 4.3 of the Plan).  If no election is provided by an eligible Participant in writing to the  Administrator on or before the Election Deadline, the Participant will be deemed to have  elected to receive the Payout Amount in respect of each Vested Unit.  Notwithstanding the above, the Participant acknowledges and agrees that there  are certain circumstances, as enumerated in the Plan, pursuant to which his or her Restricted  Share Units may be cancelled or he or she may not receive a Payout Amount. Among other  things, the Participant’s right to a Restricted Share Unit or to receive a Payout Amount may be  impacted by a number of factors, including but not limited to, the termination of the Plan by the  Corporation, a clawback pursuant to Article 8 of the Plan, a Change of Control, termination or  voluntary resignation of the Participant’s employment (including termination for Just Cause and  involuntary termination) or death, Disability or Retirement of the Participant. For greater certainty,  the Participant confirms and acknowledges that he or she has: (a) reviewed and fully understands  the implications of the Plan, including: (i) Article 5 (Payment and Participant’s Termination) of the  Plan, as modified by Article 10 in the case of a U.S. Taxpayer; and (ii) Article 8 (Clawback); and  (b) been given adequate opportunity to review and discuss such provisions of the Plan with the  Corporation, independent legal counsel and any other applicable advisers.  If you are or become a U.S. Taxpayer after the date of this agreement, please contact your local  Human Resources Department.  [Remainder of page intentionally left blank.]  

 

      FORTIS INC.  by      Name:    Title:             [Participant]a10214-employmentagreeme

  4854-9934-2604.3        EMPLOYMENT AGREEMENT  Brian Slocum     This EMPLOYMENT AGREEMENT (the “Agreement”) is dated as of February  14, 2022 (the “Effective Date”) by and between ITC Holdings Corp. (the “Company”) and Brian  Slocum (the “Executive”).      WHEREAS, the Executive and the Company currently are parties to an  employment agreement dated as of December 21, 2012 governing the terms of the Executive’s  employment with the Company (the “Prior Employment Agreement”);    WHEREAS, the Company and the Executive desire to amend and restate the  terms of Executive’s employment;    WHEREAS, the Company and Executive intend that this Agreement shall  supersede in its entirety the Prior Employment Agreement, which Prior Employment Agreement  is, by this Agreement, hereby terminated in its entirety.   NOW, THEREFORE, in consideration of the premises and mutual covenants  herein and for other good and valuable consideration, and intending to be legally bound hereby,  the parties agree as follows:    1. Term.  Subject to the provisions of Section 7 of this Agreement, Executive shall  be employed by ITC Holdings Corp. (the “Company”), and any of their subsidiaries and/or  affiliates that the Board of Directors of the Company (the “Board”) shall designate (collectively,  the “Employer”) for an initial two-year period commencing on the Effective Date and ending on  February 13, 2024 (the “Initial Period) on the terms and subject to the conditions set forth in this  Agreement; provided, however, that such period of employment shall automatically be extended  for successive one-year periods (a “Renewal Period”) unless the Employer or Executive, at least  thirty (30) days prior to the end of any such period, provides written notice to the other party of  the intent not to extend such period for any additional one-year period.    2. Position.  a. Executive shall serve in the capacity of Senior Vice President.  In such  position, Executive shall have such duties and authority as the Chief Executive Officer of the  Employer (the “Chief Executive Officer”) determines from time to time.  If requested, Executive  shall also serve as a member of the Board without additional compensation.  b. Executive will devote Executive’s full business time and best efforts to the  performance of Executive’s duties hereunder and will not engage in any other business,  profession or occupation for compensation or otherwise which would conflict or interfere with  the rendition of such services either directly or indirectly, without the prior written consent of the  Chief Executive Officer; provided that nothing herein shall preclude Executive, subject to the  prior approval of the Chief Executive Officer, from accepting appointment to or continue to serve  on any board of directors or trustees of any business corporation or any charitable organization;  

 

  4854-9934-2604.3  2 provided in each case, and in the aggregate, that such activities do not conflict or interfere with  the performance of Executive’s duties hereunder or conflict with Section 8 of this Agreement.  3. Base Salary.  Employer shall pay Executive a base salary at the annual rate of  $400,000.00 payable in regular installments in accordance with the Employer’s normal payroll  practices.  Executive’s base salary shall be reviewed annually by the Chief Executive Officer and  Executive shall be entitled to such increases in Executive’s base salary, if any, as may be  determined from time to time in the sole discretion of the Chief Executive Officer.  Executive’s  annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary”.  4. Annual Bonus.  Executive shall be eligible to earn an annual bonus award in  respect of each fiscal year of Employer (an “Annual Bonus”), payable upon the Employer’s  achievement of certain performance targets established by the Board and after application of any  multipliers approved by the Board, pursuant to the terms of an incentive compensation plan  established by the Board (the “Incentive Plan”).  Executive’s target Annual Bonus for each fiscal  year of Employer shall be that percentage of the Executive’s Base Salary as the Board may  establish from time to time (the “Target Bonus”), but shall generally be sixty percent (60%) of  Executive’s Base Salary, plus any multipliers approved by the Board.  The foregoing  notwithstanding, any Annual Bonus to which Executive is entitled 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 such  Annual Bonus is no longer subject to a substantial risk of forfeiture (as defined under Section  409A of the Internal Revenue Code of 1986, as amended (the “Code”) and Internal Revenue  Service (“IRS”) guidance issued thereunder).   5. Employee Benefits and Perquisites; Business Expenses.    a. Employee Benefits.  Executive shall be entitled to participate in the  Employer’s employee benefit and retirement plans (the “ITC Plans”) as in effect from time to  time as determined by the Board, which provide certain benefits (collectively the “Employee  Benefits”) to Executive, including the following plans: (i) welfare benefit plans (including active  medical, life, disability, flexible spending accounts and other related welfare plans); (ii) fringe  benefit plans (including education assistance and adoption assistance); (iii) retiree welfare  benefit plans (medical and life insurance); (iv) qualified and non-qualified defined benefit and  defined contribution plans; and (v) vacation plans (except that there shall be limitations set on  the amount of vacation that Executive may carry forward from any given calendar year to the  next).    b. Perquisites. Executive shall also be entitled to receive such perquisites as  are generally provided to executives of the Employer from time to time, as determined by the  Board (or a compensation committee thereof).  c. Business Expenses.  Reasonable business expenses incurred by Executive  in the performance of Executive’s duties hereunder shall be reimbursed by the Employer in  accordance with the Employer’s policies; provided that such reimbursement shall in any event  occur no later than ninety (90) days after the date on which an eligible business expense is  incurred.  

 

  4854-9934-2604.3  3 6. Equity Participation.  Executive’s equity participation in the Company has been  or will be documented pursuant to some or all of the ITC Holdings Corp. 2017 Omnibus Plan,  the ITC Holdings Corp. Executive Omnibus Plan, and the Fortis, Inc. 2020 Restricted Share Unit  Plan, and any amendments thereto, or in any successor plan or plans, and in one or more award  agreements associated therewith, each as executed by the Executive, the Company, and its  shareholders, as applicable (such documents, collectively, the “Equity Documents”).  The  Company and Executive each acknowledges that the terms and conditions of the aforementioned  documents govern Executive’s acquisition, vesting, holding, sale or other disposition of  Executive’s equity in the Company, and Executive’s and the Company’s rights with respect  thereto.  7. Termination of Employment.  Executive’s employment hereunder may be  terminated by either party at any time and for any reason, subject to the applicable provisions of  this Section 7; provided that Executive will be required to give the Employer at least thirty (30)  calendar days advance written notice of any resignation of Executive’s employment (the  “Executive Notice Period”); and provided, further, that the Employer will be required to give  Executive at least ten (10) business days advance notice of a termination of Executive’s  employment by the Employer without Cause (other than in the event of Executive’s Disability)  (the “Employer Notice Period”).  With respect to either the Executive Notice Period or the  Employer Notice Period, the Employer may provide Executive with a payment equal to the Base  Salary that would otherwise be payable in respect of any portion of the Executive or Employer  Notice Period which the Employer elects to waive.  Notwithstanding any other provision of this  Agreement (and except as may otherwise be provided in the Equity Documents), the provisions  of this Section 7 shall exclusively govern Executive’s rights upon termination of employment  with the Employer.  a. By the Employer For Cause or By Executive Resignation Without Good  Reason.  i. Executive’s employment hereunder may be terminated by the  Employer for Cause (as defined below) and shall terminate automatically upon Executive’s  resignation without Good Reason.  ii. For purposes of this Agreement, “Cause” shall mean (A)  Executive’s continued failure substantially to perform Executive’s duties hereunder to the  satisfaction of the Company (other than as a result of total or partial incapacity due to physical or  mental illness) for a period of fourteen (14) calendar days following written notice by the  Employer to Executive of such failure, (B) theft, dishonesty, falsification of Company records, or  conduct amounting to a conflict of interest by Executive, (C) engagement by Executive of  conduct that could cause harm to the reputation or standing of Employer or which could impair  Executive’s ability to perform Executive’s duties for Employer, (D) Executive’s willful  malfeasance or willful misconduct in connection with Executive’s duties hereunder or any act or  omission which is injurious to the financial condition or business reputation of the Employer or  affiliates, (E) a violation by Executive of any material Employer rule, regulation, procedure or  policy, (F) while on Company premises, or while performing Executive’s job duties, possessing  or using an illegal (under federal or state law) or controlled substance or being under the  influence of, or having Executive’s performance affected by, an illegal or controlled substance,  or by alcohol, or (G) Executive’s breach of the provisions of Sections 8 or 9 of this Agreement.  

 

  4854-9934-2604.3  4 iii. If Executive’s employment is terminated by the Employer for  Cause or if Executive resigns without Good Reason (other than due to a Disability, as such term  is defined below), Executive shall be entitled to receive:  (1) any Base Salary earned through the date of termination,  payable at such time(s) as the Base Salary would otherwise be payable in accordance with the  normal payroll practices of the Employer;  (2) any Annual Bonus earned but unpaid as of the date of  termination for any previously completed fiscal year, payable in a lump sum at such time as such  Annual Bonus would normally be paid under the Incentive Plan as provided in Section 4 hereof;    (3) reimbursement for any unreimbursed business expenses  properly incurred by Executive through the date of termination, payable at such time(s) and in  accordance with the Employer’s policy prior to the date of Executive’s termination; provided  that such reimbursement shall in any event occur no later than ninety (90) days after the date on  which an eligible business expense is incurred; and  (4) such Employee Benefits, if any, as to which Executive may  be entitled under the applicable ITC Plans upon termination of employment hereunder.  The payments and benefits described in clauses (1) through (4) hereof are referred to,  collectively, as the “Accrued Rights”.  Following such termination of Executive’s employment by the Employer for Cause or  resignation by Executive without Good Reason, except as set forth in this Section 7(a)(iii),  Executive shall have no further rights to any compensation or any other benefits under this  Agreement.   b. Disability or Death.  i. Executive’s employment hereunder shall terminate upon  Executive’s death, and may be terminated by the Employer if Executive experiences a  “Disability” (as such term shall be defined from time to time under Code Section 409A).  Any  question as to the existence of the Disability of Executive as to which Executive and the  Employer cannot agree shall be determined in writing by a qualified independent physician  mutually acceptable to Executive and the Employer.  If Executive and the Employer 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 Disability made in writing to the Employer and Executive shall be final and conclusive for all  purposes of the Agreement.  ii. Upon termination of Executive’s employment hereunder for  Disability or death, Executive, Executive’s then spouse, or Executive’s estate (as the case may  be), shall be entitled to receive:  (1) the Accrued Rights; and   

 

  4854-9934-2604.3  5 (2) a pro rata portion of the Target Bonus (calculated based on  the number of days Executive was employed hereunder during the calendar year in which the  date of such termination of employment occurs, relative to the applicable full calendar year),  payable in a lump sum within fifteen (15) business days after the date of such termination of  employment.  Following Executive’s termination of employment due to death or Disability, except as set forth  in this Section 7(b)(ii), Executive shall have no further rights to any compensation or any other  benefits under this Agreement.   c. By the Employer Without Cause,  by Executive  for Good Reason, or  Non-Renewal by Employer.    i. Executive’s employment hereunder may be terminated (A) by the  Employer without Cause (which shall not include Executive’s termination of employment due to  death or Disability), (B) by Executive for Good Reason (as defined below), or (C) as the result of  non-renewel of the Initial Period or a Renewal Period, by Employer.    ii. For purposes of this Agreement, “Good Reason” means the  occurrence of any of the following without consent of Executive:   (1) any material reduction in Executive’s Base Salary;  (2) any material breach by the Employer of this Agreement;  (3) any material reduction in the status, position or  responsibilities of Executive;  (4) the long-term assignment of duties to Executive that are  materially below the level of Executive’s position and responsibilities described in this  Agreement based upon the staffing level and industry of the Employer; or  (5) the Employer requiring Executive to be principally based at  any office or location more than fifty (50) miles from Executive’s principal work location as of  the Effective Date.     Notwithstanding the foregoing, Good Reason shall not exist if (1) Executive fails to give  the Employer written notice of Executive’s intention to terminate employment with the  Employer for Good Reason within thirty (30) calendar days following Executive’s first  knowledge of any such occurrence, which notice shall identify in reasonable detail the basis  therefore, (2) within thirty (30) calendar days of receipt of notice, the Employer remedies the  occurrence alleged to constitute Good Reason, or (3)  Employer fails to timely remedy the  occurrence alleged to constitute Good Reason and  Executive has not separated from service  within thirty (30) calendar days following expiration of the Cure Period.    iii. If Executive’s employment is terminated by the Employer pursuant  to this Section 7 without Cause (other than by reason of Executive’s death or Disability), by  Executive for Good Reason, or as the result of non-renewal of the Initial Period or a Renewal  

 

  4854-9934-2604.3  6 Period, by Employer, in addition to receiving the Accrued Rights, subject to Executive’s  execution and non-revocation of a release of all claims against Employer as provided in Section  7(f), Executive shall be entitled to receive:  (1) a pro rata portion of the Target Bonus (calculated based on  the number of days Executive was employed hereunder during the calendar year in which the  date of such termination of employment occurs, relative to the applicable full calendar year),  payable based upon the Employer’s actual achievement of the performance targets for such year  as determined under and at the time that such an Annual Bonus (if any) would normally be paid  as set forth in Section 4 hereof;   (2) one or both of the following series of payments:  (I) continued payment in substantially equal installments and in  accordance with the normal payroll practices of Employer, for a  period of  two (2) years following the date of termination of  Executive’s employment hereunder, of Executive’s annual rate of  Base Salary as in effect immediately prior to such termination; and   (II) in the event that Executive’s employment is terminated  hereunder within a period beginning six (6) months before and  ending two (2) years after a Change in Control occurs, Executive  shall receive an amount equal to two (2) times the average of each  of the Annual Bonuses that were payable to Executive (including  any portion of any such Annual Bonus the receipt of which  Executive elected to defer) for the three fiscal years immediately  preceding the fiscal year in which Executive’s employment  terminates, payable in substantially equal installments and in  accordance with the normal payroll practices of Employer, over the  period during which the Executive’s Base Salary will continue to  be paid pursuant to the foregoing provisions of this Section  7(c)(iii)(2) (or, if applicable, over the remaining period during  which such Base Salary payments will be made, in the event the  Executive’s termination occurs within the six (6) month period  before any such Change in Control occurs, beginning with the first  payment due thirty (30) days after the Change in Control occurs);   (3) a stipend, to be used at Executive’s discretion, to pay health  insurance premiums, or for any other purpose, during that period ending on the earlier of (I) the  date Executive is eligible (even if Executive does not enroll) for coverage under another  employer-sponsored group health plan in connection with other employment obtained after  Executive’s termination hereunder; or (II) twelve (12) months after the date of termination of  Executive’s employment hereunder.  The stipend shall be paid to Executive each payroll period  (in accordance with the normal payroll practices of Employer, but subject to any applicable  limitations on payments to a “specified employee” within the meaning of Code Section 409A, as  set forth below) as a taxable amount equal to the sum of (III) the Employer’s portion of the  premium payments due with respect to other executives with the same coverage(s) for such  payroll period, plus (IV) such additional amount as is required to pay any income and/or payroll  

 

  4854-9934-2604.3  7 taxes due on the sum of the premium payment and the additional tax gross-up payment (as  determined by the Employer’s independent accountants, assuming that the Executive pays  income taxes at the highest applicable marginal rates for the calendar year in which such  payments are to be made); and   (4) outplacement services of a duration of up to two (2) years  from the date of termination (or until such earlier date on which Executive obtains other  employment), and at a level commensurate with Executive’s former position with the Employer,  and by a provider as determined by the Employer in good faith.    (5) The foregoing notwithstanding, in the event Executive is a  “specified employee” within the meaning of Code Section 409A and in accordance with the  involuntary “separation pay plan” exception under the Code Section 409A regulations, the total  of all amounts paid to Executive pursuant to Sections 7(c)(iii)(2) and (3) hereof (and any other  amount payable pursuant to this Section 7(c)(iii) that constitutes a payment under a  “nonqualified deferred compensation plan” within the meaning of Code Section 409A) within  the first six (6) months following such termination pursuant to this subsection shall not exceed  two times the lesser of (I) the sum of the Executive’s annualized compensation based upon the  annual rate of pay for services provided to the Employer for the calendar year preceding the  calendar year in which the termination occurs (adjusted for any increase during that year that was  expected to continue indefinitely, if the Executive had not terminated), or (II) the Code Section  401(a)(17) limit on compensation for the calendar year in which the Executive terminates.  To  the extent a portion of any such amount exceeds such limitation, the payment shall not  commence until the first business day following the date that is six months after the date of  termination of Executive’s employment hereunder (the period during which such payments may  be limited under Code Section 409A, the “409A Period”), at which time Employer shall (III) pay  to Executive, in one lump sum, an amount equal to all such amounts that would otherwise have  been payable during the 409A Period, and (IV) thereafter continue to pay the remaining unpaid  portion of any such amounts in accordance with the normal payroll practices of Employer, at the  time or through the end of the period(s) otherwise provided above in this subsection.  (6) Following Executive’s termination of employment by the  Employer without Cause (other than by reason of Executive’s death or Disability), by Executive  for Good Reason, or as the result of non-renewal of the Initial Period or a Renewal Period, by  Employer, except as set forth in this Section 7(c)(iii), Executive shall have no further rights to  any compensation or any other benefits under this Agreement.   d. Notice of Termination.  Any purported termination of employment by the  Employer or by Executive (other than due to Executive’s death) shall be communicated by  written Notice of Termination to the other party hereto in accordance with Section 13(h) hereof.   For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall  indicate the specific termination provision in this Agreement relied upon and shall set forth in  reasonable detail the facts and circumstances claimed to provide a basis for termination of  employment under the provision so indicated.  e. Board/Committee Resignation.  Upon termination of Executive’s  employment for any reason, Executive will be considered to have resigned, as of the date of such  

 

  4854-9934-2604.3  8 termination and to the extent applicable, from the Board (and any committees thereof) and the  board of directors (and any committees thereof) of any of the Company’s affiliates.    f. Execution of Release off all Claims; Non-Revocation. Upon termination  of Executive’s employment without Cause, for Good Reason, or as the result of non-renewal of  the Initial Period or a Renewal Period, by Employer, Executive agrees to execute a release (the  “Release”) of all claims against the Company, its subsidiaries, affiliates, shareholders, directors,  officers, employees, and agents, substantially in a form to be provided to Executive by Employer  at such time.  Notwithstanding anything set forth in this Agreement to the contrary, upon  termination of Executive’s employment without Cause, for Good Reason, or as the result of non- renewal of the Initial Period or a Renewal Period, by Employer, Executive shall not receive any  payments or benefits to which Executive may be entitled hereunder (other than those which by  law cannot be subject to the execution of a release) if Executive does not execute or otherwise  revokes such Release.   Subject to the foregoing, if by no later than sixty (60) days after the date  of termination of Executive’s employment without Cause, for Good Reason, or as the result of  non-renewal of the Initial Period or a Renewal Period, by Employer, Executive has (A) not  executed or has otherwise revoked such Release, or (B) Executive has executed the Release but  the applicable revocation period referred to in the preceding sentence has not lapsed, then  Executive shall in either case totally forfeit all payments and benefits to which Executive may be  entitled  under this Agreement (other than those which by law cannot be subject to the execution  of a release), but this Agreement shall otherwise remain in full force and effect.  In the event that  prior to the end of such sixty (60) day period, Executive has properly executed such Release, has  not revoked the Release, and the applicable revocation period for the Release has lapsed, and  Executive has complied with Section 9(d)(ii) and (iii), the payments and benefits due to  Executive hereunder shall commence being paid or provided with the next administratively  feasible scheduled payroll date following the end of such revocation period; provided all  payments that would otherwise have become due prior to such date shall be accumulated and  paid when the first payment is made hereunder.  The foregoing notwithstanding, in the event the  sixty (60) day period referred to in this subsection begins in one taxable year of the Executive  and ends in a second taxable year, any payments and benefits due to Executive hereunder (to the  extent required to be restricted under Code Section 409A and IRS guidance issued thereunder)  shall commence being paid or provided with the first scheduled payment date on or after the  beginning of such second taxable year.   8. Non-Solicitation; Non-Hire; Non-Interference; Non-Competition.   a. Acknowledgement.  Executive acknowledges and recognizes the highly  competitive nature of the businesses of the Employer and its affiliates and acknowledges that, in  the course of the Executive’s employment with the Company, the Executive has and will become  familiar with Confidential Information (as defined in Section 9), the restrictions in this Section 8  are necessary to protect the legitimate business interests of the Company, the covenants in this  Section 8 are reasonable with respect to duration, geographical area and scope, and the covenants  will not prevent the Executive from engaging in Executive’s profession or earning a living, and  accordingly agrees to the following:  b. Definitions.  As used in this Agreement, the terms the terms set forth  below have the following meanings:   

 

  4854-9934-2604.3  9 i. “Competitive Business” means (1) a business that (A) transmits  electricity, or (B) develops or operates transmission facilities, and/or (C) provides technology,  equipment or services related to the transmission of electricity,  (2) any other business in which  Employer engaged at any time during the last year of Executive’s employment, and (3) any  business contemplated by Employer at any time during the last year of Executive’s employment.  ii. “Customer” means any individual or entity with or through whom  Employer has done business at any time in the previous three (3) year period.    iii. “Person” means any individual, firm, partnership, joint venture,  association, corporation or other business organization, entity or enterprise whatsoever, including  any division or controlled or controlling affiliate of any Person.  iv. “Prospective Customer” means any individual or entity, with or  through whom Employer had communicated regarding doing business (however extensive or  numerous the contact(s)), during the one (1) year period prior to the last day of Executive’s  employment with Employer.   v. “Restricted Period” means the period of time during which  Executive is employed by Employer and one (1) year immediately thereafter.  vi. “Restricted Territory” means any geographical area that is within  100 miles of any geographical area where the Employer or its affiliates transmitted electricity, or  provided related technology, equipment or services, or otherwise conducted business at any time  in the previous three (3) year period.      vii. “Third Party” means by way of example and not limitation, any  Employer distributor, vendor, supplier, contractor, consultant, representative, or other entity or  individual with whom Employer does business, excluding Customers.  c. Non-Solicitation; Non-Hire; Non-Interference.  During the Restricted  Period, Executive will not, without Employer’s written consent, whether on Executive’s own  behalf or on behalf of or in conjunction with any Person, directly or indirectly:  i. solicit, or assist in soliciting, in competition with the Employer, the  business of any Customer or Prospective Customer; or  ii. solicit or encourage any Employee to leave the employment of the  Employer; or  iii. hire any Employee who was employed by the Employer as of the  last date of Executive’s employment or who left the employment of the Employer coincident  with, or within one (1) year prior to or after, the last date of Executive’s employment; or   iv. interfere with, or attempt to interfere with, business relationships  (whether formed before, during, or after the date of this Agreement) between the Employer or  any of its affiliates and any Customer, Prospective Customer, and/or Person.  

 

  4854-9934-2604.3  10 d. Non-Compete.  During the Restricted Period, Executive will not, without  Employer’s written request, whether on Executive’s own behalf or on behalf of or in conjunction  with any Person, directly or indirectly:  i. engage in a Competitive Business in the Restricted Territory;  ii. enter the employ of, or render any services to, any Person who or  which engages in a Competitive Business in the Restricted Territory; or  iii. acquire a financial interest in, or otherwise become actively  involved with, any Competitive Business, as an individual, partner, shareholder, officer, director,  principal, agent, trustee or consultant  e. Exception.  Notwithstanding anything to the contrary in this Agreement,  Executive may, directly or indirectly, own, solely as an investment, securities of any Person  engaged in a Competitive Business which are publicly traded on a national or regional stock  exchange or on the over-the-counter market if Executive (i) is not a controlling person of, or a  member of a group which controls, such person and (ii) does not, directly or indirectly, own 5%  or more of any class of securities of such Person.  f. Discretionary Extension of Restricted Period.  Employer may, in its sole  discretion, extend the Restricted Period (and thereby the non-competition provisions of this  Section 8) by one (1) additional year and, in consideration thereof, will provide Executive with  continued payment in substantially equal installments and in accordance with the normal payroll  practices of the Employer, for a period of one (1) year following the first anniversary of the last  date of Executive’s employment hereunder, of Executive’s annual rate of Base Salary as in effect  immediately prior to such date.  In the event Employer elects to exercise its discretion to extend  the Restricted Period as provided above, the Employer will notify Executive to this effect, by no  later than six (6) months after the last date of Executive’s employment.  The foregoing  notwithstanding, such extension of the Restricted Period will not result in any similar extension  of any other payments or benefits due to Executive under this Agreement.  g. Automatic Extension of Restricted Period.  In the event that Executive   breaches a restriction set forth in Section 8, the Restricted Period shall automatically toll from  the date of the first breach, and all subsequent breaches, until the resolution of the breach through  private settlement, or judicial or other action, including all appeals.    h. Modification of Restrictions.  It is expressly understood and agreed that  although Executive and the Employer consider the restrictions contained in this Section 8 to be  reasonable, if a final judicial determination is made by a court of competent jurisdiction that the  duration, geographic area, or scope contained in this Agreement is an unenforceable restriction  against Executive, the provisions of this Agreement shall not be rendered void but shall be  deemed amended to apply as to such maximum duration, geographic area and scope as such  court may judicially determine or indicate to be enforceable.  Alternatively, if any court of  competent jurisdiction finds that any restriction contained in this Agreement is unenforceable,  and such restriction cannot be amended so as to make it enforceable, such finding shall not affect  the enforceability of any of the other restrictions contained herein.  

 

  4854-9934-2604.3  11 i. Survival.  The provisions in this Section 8 shall survive the termination of  Executive’s employment for any reason.   9. Confidentiality.  a. Executive will not at any time (whether during or after Executive’s  employment with the Employer) (i) retain or use for the benefit, purposes or account of  Executive or any other Person; or (ii) disclose, divulge, reveal, communicate, share, transfer or  provide access to any Person outside the Employer (other than its professional advisers who are  bound by confidentiality obligations), any non-public, proprietary or confidential information -- including without limitation rates, trade secrets, know-how, research and development, software,  databases, inventions, processes, formulae, technology, designs and other intellectual property,  information concerning finances, investments, profits, pricing, costs, products, services, vendors,  customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising,  sales, marketing, promotions, government and regulatory activities and approvals, and attorney  client communications -- concerning the past, current or future business, activities and operations  of the Employer, its subsidiaries or affiliates and/or any third party that has disclosed or provided  any of same to the Employer on a confidential basis (“Confidential Information”) without the  prior written authorization of the Board.  b. “Confidential Information” shall not include any information that is (i)  generally known to the industry or the public other than as a result of Executive’s breach of this  covenant or any breach of other confidentiality obligations by third parties; (ii) made legitimately  available to Executive by a third party without breach of any confidentiality obligation; or (iii)  required by law to be disclosed; provided that Executive shall give prompt written notice to the  Employer of such requirement, disclose no more information than is so required, and cooperate  with any attempts by the Employer to obtain a protective order or similar treatment.    c. Except as required by law, Executive will not disclose to anyone, other  than Executive’s immediate family and legal or financial advisors, the existence or contents of  this Agreement; provided that Executive may disclose to any prospective future employer the  provisions of Sections 8 and 9 of this Agreement provided they agree to maintain the  confidentiality of such terms.  d. Upon termination of Executive’s employment with the Employer for any  reason, Executive shall (i) cease and not thereafter commence use of any Confidential  Information or intellectual property (including without limitation, any patent, invention,  copyright, trade secret, trademark, trade name, logo, domain name or other source indicator)  owned or used by the Employer, its subsidiaries or affiliates; (ii) immediately destroy, delete, or  return to the Employer, at the Employer’s option, all originals and copies in any form or medium  (including memoranda, books, papers, plans, computer files, letters and other data) in  Executive’s possession or control (including any of the foregoing stored or located in  Executive’s office, home, laptop or other computer, whether or not the Employer’s property) that  contain Confidential Information or otherwise relate to the business of the Employer, its affiliates  and subsidiaries, except that Executive may retain only those portions of any personal notes,  notebooks and diaries that do not contain any Confidential Information; and (iii) notify and fully  cooperate with the Employer regarding the delivery or destruction of any other Confidential  Information of which Executive is or becomes aware.  

 

  4854-9934-2604.3  12 e. Executive shall not improperly use for the benefit of, bring to any  premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with  the Employer any confidential, proprietary or non-public information or intellectual property  relating to a former employer or other third party without the prior written permission of such  third party.  Executive hereby indemnifies, holds harmless and agrees to defend the Employer  and its officers, directors, partners, employees, agents and representatives from any breach of the  foregoing covenant.  Executive shall comply with all relevant policies and guidelines of the  Employer, including regarding the protection of confidential information and intellectual  property and potential conflicts of interest.  Executive acknowledges that the Employer may  amend any such policies and guidelines from time to time, and that Executive remains at all  times bound by their most current version.  Notwithstanding anything set forth herein, the  Company hereby represents and warrants that the Company shall not employ the provisions of  this Section 9 in a manner that would interfere with Executive’s ability to obtain or retain any  future employment that would not or does not otherwise violate Section 8 of this Agreement.  f. Notwithstanding the foregoing, Executive acknowledges that Executive  has been advised, and Executive understands that pursuant to the Defense of Trade Secrets Act  (18 U.S.C. 1833), Executive shall not be held criminally or civilly liable under any federal or  state trade secret law for the disclosure of a trade secret that is made in confidence to a federal,  state or local government official, either directly or indirectly, or to an attorney, and is made  solely for the purpose of reporting or investigating a suspected violation of law or regulation, or  is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is  made under seal a suspected violation of the law.    g. The provisions of this Section 9 shall survive the termination of  Executive’s employment for any reason.  10. Specific Performance.  Executive acknowledges and agrees that the Employer’s  remedies at law for a breach or threatened breach of any of the provisions of Section 8 or Section  9 would be inadequate and the Employer would suffer irreparable damages as a result of such  breach or threatened breach.  In recognition of this fact, Executive agrees that, in the event of  such a breach or threatened breach, in addition to any remedies at law, the Employer, without  posting any bond, shall be entitled to cease making any payments or providing any benefit  otherwise required by this Agreement and obtain equitable relief in the form of specific  performance, temporary restraining order, temporary or permanent injunction or any other  equitable remedy which may then be available.  11. Developments.  Executive will make full and prompt disclosure to the Employer  of all inventions, discoveries, designs, developments, methods, processes, modifications,  improvements, algorithms, databases, computer programs, formulae, techniques, trade secrets,  graphics or images, audio or visual works, and other works of authorship (collectively  “Developments”), whether or not patentable or copyrightable, created, made, conceived or  reduced to practice by the Executive (alone or jointly with others) or under the Executive’s  direction during the Executive’s employment with Employer (whether under this Agreement or  any other prior or subsequent employment with Employer).  The Executive acknowledges that all  work performed by the Executive is on a “work for hire” basis, and the Executive hereby does  assign and transfer to Employer, its successors and assigns, all of the Executive’s right, title and  interest in all Developments that (i) relate to the business of Employer or any of the products or  

 

  4854-9934-2604.3  13 services being researched, developed, manufactured, marketed, provided or sold by Employer or  which may be used with such products or services; or (ii) result from tasks assigned or delegated  to the Executive by Employer; or (iii) result from the use of premises or personal property  (whether tangible or intangible) owned, leased or contracted for by Employer, and all related  patents, patent applications, trademarks and trademark applications, copyrights and copyright  applications, and other intellectual property rights in all countries and territories worldwide and  under any international conventions (“Intellectual Property Rights”).  The Executive will fully  cooperate with Employer, both during and after the Executive’s employment with Employer,  with respect to Employer securing and protecting its Intellectual Property Rights in regard to  such Developments.  If the Executive wishes to assert or clarify that something created by  Executive prior to the Executive’s employment with Employer that relates to Employer’s actual  or proposed business is not within the scope of the foregoing assignment, the Executive shall  notify Employer thereof in writing contemporaneously with signing this Agreement.   Notwithstanding the foregoing, any Developments or Intellectual Property Rights specified on  Exhibit A to this Agreement shall be excluded from the requirements of this Section 10 and shall  not be assigned to Employer.    12. Arbitration.  Except as provided in Section 10, or prohibited by applicable law,  disputes arising out of or asserting breach of this Agreement, or any statutory or common law  claim by Executive relating to Executive’s employment under this Agreement or the termination  thereof (including any tort or discrimination claim), shall be goverened by this Section 12.  The  party invoking Section 12 (the “Moving Party”) shall provide the other party (the “Non-Moving  Party”) with a Notice of Dispute, setting forth the nature of the dispute.  The parties agree to  make a good faith effort to resolve the dispute prior to arbitration.  In the event the dispute is not  resolved within ten (10) business days of receipt of the Notice of Dispute by the Non-Moving  Party, the parties will attempt to agree on a neutral arbitrator.  In the event the parties are not able  to reach agreement on a neutral arbitrator within twenty (20) business days of receipt of the  Notice of Dispute by the Non-Moving Party, the dispute shall be resolved in accordance with the  Employment Arbitration Rules of the American Arbitration Association (“AAA”), provided the  Moving Party submits the dispute to the AAA within thirty (30) business days of receipt of the  Notice of Dispute by the Non-Moving Party.  Such arbitration process shall take place within  100 miles of the Detroit, Michigan metropolitan area.       The decision of the arbitrator shall be final, conclusive, and binding on the parties to the  arbitration. A court of competent jurisdiction may enter judgment upon the arbitrator’s award.  In  any arbitration proceeding, the arbitrator shall have the authority to compel adequate discovery  for the resolution of the dispute, hear motions, and to award such relief as would otherwise be  available under applicable law in a court proceeding.  Each party shall pay for his/its own costs  and attorneys’ fees, if any.  However, if either party prevails on a statutory claim that affords  attorneys’ fees to the prevailing party, the arbitrator may award reasonable fees to the prevailing  party in accordance with applicable law.  BY AGREEING TO THIS ARBITRATION  PROCEDURE, EXECUTIVE AND COMPANY  AGREE THAT THIS ARBITRATION  PROCEDURE SHALL BE THE EXCLUSIVE MEANS OF REDRESS WITH RESPECT TO  DISPUTES GOVERENED BY THIS SECTION 12, AND HEREBY WAIVE ANY RIGHTS  EITHER MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS.    

 

  4854-9934-2604.3  14   13. Miscellaneous.  a. Governing Law.  This Agreement shall be governed by and construed in  accordance with the laws of the State of Michigan, without regard to conflicts of laws principles  thereof.  b. Entire Agreement/Amendments.  Except with respect to the matters  contained in the Equity Documents, this Agreement contains the entire understanding of the  parties with respect to the employment of Executive by the Employer.  There are no restrictions,  agreements, promises, warranties, covenants or undertakings between the parties with respect to  the subject matter herein other than those expressly set forth herein.  This Agreement may not be  altered, modified, or amended except by written instrument signed by the parties hereto.  c. No Waiver.  The failure of a party to insist upon strict adherence to any  term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or  deprive such party of the right thereafter to insist upon strict adherence to that term or any other  term of this Agreement.  d. Severability.  In the event that any one or more of the provisions of this  Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity,  legality and enforceability of the remaining provisions of this Agreement shall not be affected  thereby.  e. Assignment.  This Agreement, and all of Executive’s rights and duties  hereunder, shall not be assignable or delegable by Executive.  Any purported assignment or  delegation by Executive in violation of the foregoing shall be null and void ab initio and of no  force and effect.  This Agreement may be assigned by the Employer to a person or entity that is  an affiliate or a successor in interest to substantially all of the business operations of the  Employer.  Upon such assignment, the rights and obligations of the Employer hereunder shall  become the rights and obligations of such affiliate or successor person or entity.  f. Set Off; No Mitigation.  The Employer’s obligation to pay Executive the  amounts provided and to make the arrangements provided hereunder shall be subject to set-off,  counterclaim or recoupment of amounts owed by Executive to the Employer or its affiliates;  provided, that no such set-off in excess of $5,000 shall be made against any amount payable to  Executive pursuant to Sections 7(c)(iii)(2) or (3) hereof (or any other amount that constitutes a  payment under a “nonqualified deferred compensation plan” within the meaning of Code Section  409A).  Executive shall not be required to mitigate the amount of any payment provided for  pursuant to this Agreement by seeking other employment or otherwise and the amount of any  payment provided for pursuant to this Agreement shall not be reduced by any compensation  earned as a result of Executive’s other employment or otherwise.  g. Successors; Binding Agreement.  This Agreement shall inure to the  benefit of and be binding upon the Company, its subsidiaries and affiliates, and the Executive  and any personal or legal representatives, executors, administrators, successors, assigns, heirs,  distributees, devisees and legatees.  Further, the Company will require any successor (whether,  

 

  4854-9934-2604.3  15 direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of  the business and/or assets of the Company to assume expressly and agree to perform this  Agreement in the same manner and to the same extent that the Company would be required to  perform it if no such succession had taken place.  As used in this Agreement, “Company” shall  mean the Company and any successor to its business and/or assets which is required by this  Section 13(g) to assume and agree to perform this Agreement or which otherwise assumes and  agrees to perform this Agreement; provided, however, in the event that any successor, as  described above, agrees to assume this Agreement in accordance with the preceding sentence, as  of the date such successor so assumes this Agreement, the Company shall cease to be liable for  any of the obligations contained in this Agreement.   h. Notice.  For the purpose of this Agreement, notices and all other  communications provided for in the Agreement shall be in writing and shall be deemed to have  been duly given when delivered by hand or overnight courier or three days after it has been  mailed by United States registered mail, return receipt requested, postage prepaid, addressed to  the respective addresses set forth below in this Agreement, or to such other address as either  party may have furnished to the other in writing in accordance herewith, except that notice of  change of address shall be effective only upon receipt.  If to the Employer:  ITC Holdings Corp.  27175 Energy Way  Novi, Michigan 48377  Attention:   General Counsel  With a copy to:  Dykema Gossett PLLC  Capitol View                          201 Townsend Street, Suite 900                           Lansing, Michigan  48933  Attention:   Richard J. Aaron, Esq.    If to Executive:  To the most recent address of Executive set forth in the personnel records of the  Employer.  i. Executive Representation.  Executive hereby represents to the Employer  that the execution and delivery of this Agreement by Executive and the Employer and the  performance by Executive of Executive’s duties hereunder shall not constitute a breach of, or  otherwise contravene, the terms of any employment agreement or other agreement or policy to  which Executive is a party or otherwise bound.  j. Prior Agreements. This Agreement supercedes all prior agreements and  understandings (including, without limitation, any verbal agreements, offer letters or summaries  of principal terms pertaining to the employment of Executive by the Employer) between  

 

  4854-9934-2604.3  16 Executive and the Employer and/or its affiliates regarding the terms and conditions of  Executive’s employment with the Employer and/or its affiliates; provided, however, that the  Equity Documents shall govern the terms and conditions of Executive’s equity holdings in the  Company.  k. Cooperation.  During and after Executive’s employment, Executive shall  provide Executive’s reasonable cooperation in connection with any action or proceeding (or any  appeal from any action or proceeding) that relates to events occurring during Executive’s  employment hereunder, now in existence or which may arise or be brought in the future against  or on behalf of Employer.  The Executive’s full cooperation in connection with such claims or  actions shall include, but not be limited to, being available to meet with counsel to prepare for  discovery or trial and to act as a witness on behalf of Employer at mutually convenient times.   Executive shall also cooperate with Employer in connection with any investigation or review of  any federal, state or local regulatory authority as any such investigation or review relates to  events or occurrences that transpired during Executive’s employment.  Employer shall reimburse  the Executive at a rate of two hundred dollars and no/100 U.S. Dollars ($200.00) per hour to the  extent such cooperation is needed after Executive is no longer employed and reimburse the  Executive for any reasonable out-of-pocket expenses incurred in connection with Executive’s  performance of obligations under this Section.  This provision shall survive any termination of  this Agreement.  l. Taxes.    i. Withholding Taxes.  The Employer may withhold from any  amounts payable under this Agreement such Federal, state and local taxes as may be required to  be withheld pursuant to any applicable law or regulation, with respect to any compensation or  benefits payable or provided to Executive by Employer pursuant to this Agreement or any other  plan, arrangement or agreement with the Employer.  ii. 409A Compliance and Penalties.  All payments under this  Agreement are intended to be exempt from or in compliance with Code Section 409A, and the  provisions of this Agreement are to be construed and administered accordingly.  Further, for all  purposes under this Agreement: (A) references to “termination” of employment (or variations  thereof), shall be synonymous with the meaning given to the term “separation from service” as  provided under Code Section 409A, and IRS guidance issued thereunder; (B) no payment,  reimbursement or benefit provided to Executive in one calendar year hereunder shall affect the  provision of any such payment, reimbursement or benefit in any other calendar year; and (C) the  timing of payments and the provision of benefits under this Agreement that are contingent on  Executive executing and not revoking the Release as provided in Section 7(f), are intended to  satisfy the requirements of IRS Notices 2010-6 and 2010-80 ; and (D) each installment payment  provided hereunder is intended to be treated as a separate payment for Code Section 409A  purposes.  Notwithstanding any other provision of this Agreement (other than Section 13(l)(iii) below),  while Executive acknowledges that Employer may take actions hereunder as are required to  comply with or to minimize any potential interest charges and/or additional taxes as may be  imposed by Code Section 409A (the “409A Penalties”) with respect to any payment or benefit  due to Executive under this Agreement (including a delay in payment until the first business day  

 

  4854-9934-2604.3  17 following the end of the 409A Period, in the event Executive is a “specified employee” within  the meaning of Code Section 409A, as described in and consistent with the provisions of Section  7(c)(iii)), the parties hereby confirm that all such payments and benefits due to Executive will in  fact be made or provided (except as provided in Section 13(l)(iii) below) at the earliest time at  which it is determined either that no 409A Penalties are applicable, or that such 409A Penalties  will apply without exception.  Further, if at any time it is determined that any payment or benefit  due to Executive under this Agreement may be subject to any 409A Penalties, the Employer shall  (D) be permitted to modify the provision of such payment or benefit if such modification would  reasonably be expected to eliminate or minimize such 409A Penalties, so long as such  modification does not adversely affect, in any material respect, the economic benefit to  Executive of such payment or benefit (or otherwise result in additional 409A Penalties), or (E) to  the extent that the course of action proposed in clause (D) cannot be effected, within fifteen (15)  days after the date of such determination (but no later than the end of the calendar year following  the year in which the Executive remits the 409A Penalties involved; or such other earliest date on  which such amount can be paid as may be permitted under Code Section 409A) pay to Executive  an additional amount equal to such 409A Penalties, along with such additional amount as is  required to pay any income and/or payroll taxes due on the 409A Penalties and the additional tax  gross-up payment (as determined by the Employer’s independent accountants, assuming that the  Executive pays income taxes at the highest applicable marginal rates for the calendar year in  which the tax gross-up payment is to be made).  iii. Parachute Taxes.  In the event that the Executive shall become  entitled to payments and/or benefits provided by this Agreement or any other amounts in the  “nature of compensation” (whether pursuant to the terms of this Agreement or any other plan,  arrangement or agreement with the Employer, any person whose actions result in a change of  ownership or effective control covered by Code Section 280G(b)(2) or any person affiliated with  any Employer or such person) as a result of such change in ownership or effective control  (collectively the “Employer Payments”), and such Employer Payments would be subject to the  tax (the “Excise Tax”) imposed by Code Section 4999 (and any similar tax that may hereafter be  imposed by any taxing authority), then notwithstanding any other provision of this Agreement or  any other plan, arrangement or agreement with the Employer, the Employer shall pay and/or  provide to the Executive only that portion of the Employer Payments which are in total equal to  one dollar less than the amount of the Employer Payments that would subject the Executive to  the Excise Tax.  If the Employer Payments must be reduced pursuant to the preceding sentence,  Employer Payments shall be reduced in the following order: (A) any amounts payable to the  Executive pursuant to Section 7(c)(iii)(2); (B) any other cash amounts payable to the Executive;  (C) the value as parachute payments of the acceleration of vesting of any stock options; (D) the  value as parachute payments of the acceleration of vesting of any restricted stock; (E) the value  as parachute payments of the acceleration of vesting of any equity interest not covered by (C) or  (D) above; and (F) the value as parachute payments of any other benefits received.  The  Employer’s independent accountants, at the Employer’s expense,  shall determine whether  any of the Employer Payments are “parachute payments” within the meaning of Code Section  280G(b)(2) that would be subject to the Excise Tax, the projected amount of such Excise Tax  and any other determinations required in the preceding paragraph.  The determination of the  accountants shall be final and binding upon the Employer and the Executive; provided, that in  the event any initial determination under this subsection is subsequently modified by the  

 

  4854-9934-2604.3  18 Employer’s accountants or the IRS, Executive and Employer agree to reasonably cooperate to  resolve any matter related thereto.    In all cases, Executive shall be solely responsible for timely payment of any Excise Tax finally  determined by the IRS to be due and payable with respect to the Employer Payments (as  reduced, if applicable).  Executive shall also promptly deliver to the Company copies of any  written communications, and summaries of any verbal communications, with any taxing  authority regarding the Excise Tax covered by this subsection.  m. Counterparts.  This Agreement may be signed in counterparts, each of  which shall be an original, with the same effect as if the signatures thereto and hereto were upon  the same instrument.  n. Definition of “Change in Control.”   For purposes of this Agreement,  “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 Company 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 Company. 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 Company, 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 Company (within the meaning of Code Section 409A and IRS  guidance issued thereunder). An increase in the percentage of common stock of the Company  owned by any one person, or persons acting as a group, as a result of a transaction in which the  Company acquires its stock in exchange for property shall be treated as an acquisition of stock  for purposes of this subsection. This paragraph applies only when there is a transfer of stock of  the Company (or issuance of stock of the Company) and stock in the Company 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 Company possessing thirty-five (35)  percent or more of the total voting power of the common stock of the Company;   iii. If a majority of members on the Company’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 Company’s Board prior to the date of the appointment or election  (provided that for purposes of this paragraph, the term Company 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); or  iv. If there is a change in the ownership of a substantial portion of the  Company’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  

 

  4854-9934-2604.3  19 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 Company 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 Company immediately prior to such acquisition or acquisitions. For this  purpose, gross fair market value means the value of the assets of the Company, or the value of  the assets being disposed of, determined without regard to any liabilities associated with such  assets.   IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of  this ___ day of _____________, 2022, effective as of February 14, 2022.    ITC HOLDINGS CORP.:    EXECUTIVE:  By:_________________________________ ____________________________________         Brian Slocum  Print Name:__________________________     Its: _________________________________      

 

  4854-9934-2604.3  A-1 EXHIBIT A   LIST OF PRIOR INVENTIONS  AND ORIGINAL WORKS OF AUTHORSHIP  I have intellectual property rights in the following inventions, original works of authorship, or  other work products related to the activities of the ITC Holdings Corp.  (the “Company”) that  were created prior to my employment by the Company that I do not assign to the Company (if  none, please write "None"):  (Please note:  It is in your interest to establish  that any such inventions, expressions of or  other work products were made before your  employment by the Company.  You should not  disclose such rights, inventions or work  products in detail, but should identify them  only by the titles and dates of documents  describing them.)  Identifying Number  Title      Date   or Brief  Description  _______  No inventions or improvements  _______  Additional Sheets Attached  Date: ____________________________________________________________________  Signature of Executive: ______________________________________________________  Executive: Brian Slocum

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