Document:

EXHIBIT 10.25

 

FORM OF

EMPLOYMENT AGREEMENT

(Name)

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is dated as of March ___, 2005
(the “Effective Date”) by and
between ITC Holdings Corp. (the “Company”)
and [NAME] (the “Executive”).

[WHEREAS, the Executive and the Company currently are
parties to an employment agreement dated as of [DATE] governing the terms of
the Executive’s employment with International Transmission Company, a Michigan
corporation (“ITC”) (the “Prior
Employment Agreement”);]1

WHEREAS, in connection with the contemplated public
registration of common stock of the Company, the Company and the Executive
desire to [modify certain provisions of the Prior Employment Agreement][enter
into an agreement embodying the terms of the Executive’s employment with the
Company and International Transmission Company (“ITC”)].

NOW, THEREFORE, in consideration of the premises and
mutual covenants herein and for other good and valuable consideration, the
parties agree as follows:

1.             Term of Employment.  Subject to the
provisions of Section 7 of this Agreement, Executive shall be employed by the
Company, ITC and any of its subsidiaries that the Board of Directors of the
Company (the “Board”) shall
designate (collectively, the “Employer”)
for an initial period commencing on the Effective Date and ending on the second
anniversary thereof 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 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 of employment for any additional one-year period.  For purposes of this Agreement, the term “Employment Term” shall mean the period of
time during which Executive is employed by Employer under this Agreement.

2.     Position.

a.             During
the Employment Term, Executive shall serve as the Employer’s [POSITION].  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.             During
the Employment Term, 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

	
  1 Rahill, Blair and Schultz only.

  	
   

  

 

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; 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.  During the Employment Term, ITC shall pay
Executive a base salary at the annual rate of $[AMOUNT], payable in regular
installments in accordance with ITC’s normal payroll practices.  Executive’s base salary shall be reviewed
annually by the Board 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 Board.  Executive’s
annual base salary, as in effect from time to time, is hereinafter referred to
as the “Base Salary”.

4.     Annual Bonus.  During the Employment Term, Executive shall
be eligible to earn an annual bonus award in respect of each fiscal year of
Employer (an “Annual Bonus”),
payable upon ITC’s achievement of certain performance targets established 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 generally be 80% of Executive’s Base Salary (the “Target Bonus”).

5.     Employee Benefits and Perquisites; Business Expenses.

a.             Employee
Benefits.  During the Employment Term, Executive shall
be entitled to participate in ITC 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: (a) welfare benefit plans (including
active medical, life, disability, flexible spending accounts and other related
welfare plans); (b) fringe benefit plans (including education assistance and
adoption assistance); (c) retiree welfare benefit plans (medical and life
insurance); (d) qualified and non-qualified defined benefit and defined
contribution plans; and (e) 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), but excluding absence bank plans.

b.             Perquisites. During the
Employment Term, 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.  During
the Employment Term, reasonable business expenses incurred by Executive in the
performance of Executive’s duties hereunder shall be reimbursed by ITC in accordance
with ITC’s policies.

 

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6.     Equity Participation.  Executive’s equity participation in the
Company has been documented pursuant to the 2003 Stock Purchase and Option Plan
for Key Employees of the Company and its Subsidiaries and in a Management
Stockholder’s Agreement, Stock Option Agreement, Restricted Stock Award
Agreement and Sale Participation Agreement, 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, 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.  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 30 days advance written notice of any
resignation of Executive’s employment; 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 “Company
Notice Period”), unless the Employer provides Executive with a payment equal to
the Base Salary that would otherwise be payable in respect of any portion of
the Company 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 (other than as a result of total or partial incapacity due to
physical or mental illness) for a period of 10 days following written notice by
the Employer to Executive of such failure, (B) dishonesty in the performance of
Executive’s duties hereunder, (C) Executive’s conviction of, or plea of nolo
contendere to a crime constituting (x) a felony under the laws of the
United States or any state thereof or (y) a misdemeanor involving moral
turpitude, (D) 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 or (E) Executive’s breach of the provisions of Sections 8 or 9 of
this Agreement.

(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:

(A)             any Base Salary earned through the date of termination,
payable in a lump sum at such time as the Base Salary would otherwise be
payable in accordance with the normal payroll practices of the Employer;

 

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(B)              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
(or, if later, such other earliest date on which such amount can be paid as may
be permitted under Section 409A of the Internal Revenue Code, as amended, and
the rules and regulations promulgated thereunder (collectively, “Section 409A”));

(C)              reimbursement for any unreimbursed business expenses
properly incurred by Executive, payable at such time(s) and in accordance with
ITC policy prior to the date of Executive’s termination ((or such other
earliest date on which such expenses can be reimbursed as may be permitted
under Section 409A); and

(D)              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 (A) through (D)
hereof being referred to, collectively, as the “Accrued Rights”).

Following such termination of Executive’s employment
by the Employer for Cause or resignation by Executive, 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 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:

(A)             the Accrued Rights;

(B)              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 (or, if later, such other earliest date on
which such amount can be paid as may be permitted under Section 409A); and

 

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(C)              full and immediate vesting of any then unvested options to
purchase shares of common stock of the Company held by Executive immediately
prior to 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 or by Executive Resignation for Good Reason.

(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 his Disability) or (B) or by Executive for
Good Reason (as defined below).

(ii)  For purposes of this Agreement, “Good Reason” shall mean (A) a greater than
10% reduction in the total value of Executive’s Base Salary, Target Bonus, and
Employee Benefits; (B) Executive’s job responsibility and authority are
substantially diminished; and (C) Executive’s work location is relocated to
more than fifty (50) miles from Novi, Michigan or Ann Arbor, Michigan; and
provided, further, that “Good Reason”
shall cease to exist for an event on the 60th day following the
later of its occurrence or Executive’s knowledge thereof, unless Executive has
given the Employer written notice thereof prior to such date.

(iii)  If Executive’s employment is
terminated by the Employer without Cause (other than by reason of death or
Disability) or by Executive for Good Reason, subject to Executive’s execution
of a release of all claims against Employer, Executive shall be entitled to
receive:

(A)             the Accrued Rights;

(B)              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 full calendar year), payable
in a lump sum within fifteen (15) business days after the date of such
termination of employment (or, if later, such other earliest date on which such
amount can be paid as may be permitted under Section 409A);

(C)              continued payment
in substantially equal installments, in accordance with the normal payroll
practices of Employer, for a period of two years following the date of termination of Executive’s employment
hereunder (the “Severance Period”),
of the Executive’s annual rate of Base Salary as in effect immediately prior to
such termination (such aggregate amount, the “Severance
Payment”); provided that the amount of the Severance Payment
shall be reduced by the present value of any other cash severance or
termination benefits payable to Executive under any other plans, programs or
arrangements of the Employer or its affiliates; and provided, further,
however, that in the event Executive is a “specified employee” within
the meaning of Section 409A,

 

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payment of the Severance 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 (or such other earliest date on
which such amount can be paid as may be permitted under Section 409A) (the
period during which no such payment may be made under Section 409A, the “409A Period”), at which time Employer shall (I) pay to
Executive, in one lump sum, an amount equal to the portion of the Severance
Payment that would otherwise have been payable during the 409A Period, and (II)
thereafter continue to pay the remaining unpaid portion of the Severance
Payment in accordance with the normal payroll practices of Employer through the
end of the Severance Period as otherwise provided in this Section 7(c)(iii)(C)
above;

(D)              continued provision, during the Severance Period, of
the applicable Employee Benefits that are health and welfare benefits
(including health insurance as required to be provided by ITC pursuant to the
Consolidated Omnibus Budget Reconciliation Act), to be provided by ITC at the
same cost(s) to Executive as paid by other executives of the Employer during
such time;

(E)              in addition to the benefits provided under subsection
(D) above, [for Rahill and Blair only:
Executive shall, regardless of Executive’s age or number of years of service
with the Employer on the date of termination of employment, be deemed to have
satisfied the age and service requirements for benefit eligibility under the
ITC Retiree Welfare Plan (as in effect from time to time),][for all other Executives: 
in the event that, if Executive had remained employed with the Employer
through the end of the Severance Period, Executive would have satisfied the age
and service requirements for eligibility of benefits under the ITC Retiree
Welfare Plan (as in effect from time to time), at the end of the Severance
Period Executive shall be deemed to have satisfied such requirements,] and
shall, at such time as Executive actually achieves the age at which benefits
would otherwise be provided to a participant in such plan, be entitled to
receive benefits under such plan on the same terms and conditions as all other
plan participants who actually satisfy such requirements;  and

(F)              outplacement services of a duration of not less than
one year, and at a level commensurate with Executive’s former position with the
Company, and by a provider as determined by the Employer in good faith; provided,
however, that such services may only be provided to the extent permitted
under Section 409A.

Notwithstanding
anything set forth in Section 7(c)(iii)(E), if ITC terminates the ITC
Retiree Welfare Plan (and does not replace it with any successor plan that
provides retiree welfare benefits that are comparable to those provided under
the ITC Retiree Welfare Plan (“Retiree Benefits”)) either (x) prior to an event
giving rise to the Employer’s obligations under this Section 7(c)(iii)(E) or
(y) at any time after such event and, at such time, by operation of Section
7(c)(iii)(E) Executive would otherwise be eligible to receive the benefits
provided therein, then, in satisfaction of all obligations the Employer
would otherwise have under Section 7(c)(iii)(E), the Employer shall be
permitted to either (I) establish and maintain a plan for the purpose of

 

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providing
Executive with Retiree Benefits for so long as the Employer would otherwise be
required to provide benefits under Section 7(c)(iii)(E) or (II) at that time
(or, if later, on such other earliest date on which amounts can be paid as may
be permitted under Section 409A) pay Executive in cash a lump sum amount equal
to the Employer’s cost of otherwise providing such benefits, the amount of
which shall be determined by an enrolled actuary retained by the Employer for
such purpose.

Following
Executive’s termination of employment by the Employer without Cause (other than
by reason of Executive’s death or Disability) or Executive for Good Reason,
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 12(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; Execution of Release of all Claims.

(i)  Upon termination of Executive’s employment
for any reason, Executive agrees to resign, as of the date of such 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.

(ii)  Upon termination of Executive’s employment
for any reason, Executive agrees to execute a 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 for any reason, Executive shall not receive any payments
or benefits to which he may be entitled hereunder (other than those which by
law cannot be subject to the execution of a release) (A) if Executive revokes
such release or (B) until eight (8) days after the date Executive signs such
release (or until such other date as applicable law may provide that Executive
cannot revoke such release).

8.     Non-Competition.

a.             Executive
acknowledges and recognizes the highly competitive nature of the businesses of
the Employer and its affiliates and accordingly agrees as follows:

(i) 
During the Employment Term and (x)
in the event of a termination of Executive’s employment without Cause by
Employer (other than due to Executive’s Disability) or for Good Reason by
Executive, at all times during the Severance Period, or (y) in the event of any
termination of Executive’s employment for Cause by Employer, due to Executive’s
Disability or otherwise without Good Reason by Executive, for a period of one
year following the date Executive ceases to be employed by the Employer (the
“Restricted Period”), Executive

 

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will not, whether on
Executive’s own behalf or on behalf of or in conjunction with any person, firm,
partnership, joint venture, association, corporation or other business
organization, entity or enterprise whatsoever (“Person”), directly or indirectly solicit or assist in
soliciting in competition with the Employer, the business of any customer or
prospective customer:

(A)             with whom Executive had personal contact or dealings
on behalf of the Employer during the one-year period preceding Executive’s
termination of employment;

(B)              with whom employees reporting to Executive have had
personal contact or dealings on behalf of the Employer during the one year
immediately preceding Executive’s termination of employment; or

(C)              for whom Executive had direct or indirect
responsibility during the one year immediately preceding Executive’s
termination of employment.

(ii)  During the Restricted
Period, Executive will not directly or indirectly:

(A)             engage in any business that competes with the
business of the Employer or its affiliates (including, without limitation,
businesses which the Employer or its affiliates have specific plans to conduct
in the future and as to which Executive is aware of such planning) in any
geographical area that is within 100 miles of any geographical area where the
Employer or its affiliates manufactures, produces, sells, leases, rents,
licenses or otherwise provides its products or services (a “Competitive Business”);

(B)              enter the employ of, or render any services to, any
Person (or any division or controlled or controlling affiliate of any Person) who
or which engages in a Competitive Business;

(C)              acquire a financial interest in, or otherwise become
actively involved with, any Competitive Business, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent, trustee
or consultant; or

(D)              interfere with, or attempt to interfere with,
business relationships (whether formed before, on or after the date of this
Agreement) between the Employer or any of its affiliates and customers,
clients, suppliers, partners, members or investors of the Employer or its
affiliates.

(iii)  Notwithstanding anything to
the contrary in this Agreement, Executive may, directly or indirectly own,
solely as an investment, securities of any Person engaged in the business of
the Employer or its affiliates which are publicly traded on a national or
regional stock exchange or on the over-the-counter market if Executive
(A) is not a controlling person of, or a member of a group which controls,
such person and (B) does not, directly or indirectly, own 5% or more of
any class of securities of such Person.

 

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(iv)  During the Restricted
Period, Executive will not, whether on Executive’s own behalf or on behalf of
or in conjunction with any Person, directly or indirectly:

(A)             solicit or encourage any employee of the Employer or
its affiliates to leave the employment of the Employer or its affiliates; or

(B)              hire any such employee who was employed by the
Employer or its affiliates as of the date of Executive’s termination of
employment with the Employer or who left the employment of the Employer or its
affiliates coincident with, or within one year prior to or after, the
termination of Executive’s employment with the Employer.

(v)  During the Restricted Period,
Executive will not, directly or indirectly, solicit or encourage to cease to
work with the Employer or its affiliates any consultant then under contract
with the Employer or its affiliates.

b.             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 time or territory or any other restriction 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 time and terri­tory and to such maximum extent 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.

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 — 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

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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.

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.              The
provisions of this Section 9 shall survive the termination of Executive’s
employment for any reason.

 

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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.   Arbitration.  Except as provided in Section 10, any other
dispute arising out of or asserting breach of this Agreement, or any statutory
or common law claim by Executive relating to his employment under this
Agreement or the termination thereof (including any tort or discrimination
claim), shall be exclusively resolved by binding statutory arbitration in
accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association.  Such
arbitration process shall take place within 100 miles of the Detroit, Michigan
metropolitan area.  A court of competent
jurisdiction may enter judgment upon the arbitrator’s award.  In the event of any such dispute, all
reasonable fees and disbursements of counsel incurred by Executive shall be
reimbursed by Employer within a reasonable period of time following receipt
from Executive (or Executive’s counsel) of a final bill invoicing all such fees
and disbursements, so  long  as the arbitrator does not
determine that such dispute was based on claims made by Executive that were
frivolous or in bad faith.

12.   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.

 

11

 

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.  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, Subsidiaries, 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, 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 12(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.

39500 Orchard Hill Place

Suite 200

Novi, Michigan 48375

Attention:  
General Counsel

With a copy to:

 

12

 

Simpson Thacher
& Bartlett LLP

425 Lexington
Avenue

New York, New York
10017

Attention:   Alvin H. Brown, Esq.

 

If to Executive:

To the most recent
address of Executive set forth in Employer’s 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, [and the Prior Employment Agreement,]) between 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.  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.  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.

(ii)  409A Penalties.  Notwithstanding any other provision of this
Agreement, 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 Section 409A (the “409A Penalties”) with respect to any
payment or benefit due to Executive under this Agreement (including a delay in
payment until six months after the date of termination of Executive’s
employment hereunder, in the event Executive is a “specified employee” within
the meaning of Section 409A),
the parties hereby confirm that all such payments and benefits due to Executive
will in fact be made or provided 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 (A) 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

13

modification does not adversely
affect, in any material respect, the economic benefit to Executive of such
payment or benefit, or (B) to the extent that the course of action proposed in
clause (A) cannot be effected, within fifteen (15) days after the date of such
determination (or such other earliest date on which such amount can be paid as
may be permitted under Section 409A) pay to Executive an additional amount
equal to such Section 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 (subject to the computational rules set
forth in Section 12(b)).

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.

[Signatures on next page.]

 

14

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.

	
  ITC HOLDINGS CORP.:

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [NAME]

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				

 

15Exhibit
10.26

 

FORM OF

EMPLOYMENT AGREEMENT

(Name)

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is dated as of March ___, 2005
(the “Effective Date”) by and
between ITC Holdings Corp. (the “Company”)
and [NAME] (the “Executive”).

[WHEREAS, the Executive and the Company currently are
parties to an employment agreement dated as of [DATE] governing the terms of
the Executive’s employment with International Transmission Company, a Michigan
corporation (“ITC”) (the “Prior
Employment Agreement”);]1

WHEREAS, in connection with the contemplated public
registration of common stock of the Company, the Company and the Executive
desire to [modify certain provisions of the Prior Employment Agreement][enter
into an agreement embodying the terms of the Executive’s employment with the
Company and International Transmission Company (“ITC”)].

NOW, THEREFORE, in consideration of the premises and
mutual covenants herein and for other good and valuable consideration, the
parties agree as follows:

1.             Term of Employment.  Subject to the
provisions of Section 7 of this Agreement, Executive shall be employed by the
Company, ITC and any of its subsidiaries that the Board of Directors of the
Company (the “Board”) shall
designate (collectively, the “Employer”)
for an initial period commencing on the Effective Date and ending on the second
anniversary thereof 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 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 of employment for any additional one-year period.  For purposes of this Agreement, the term “Employment Term” shall mean the period of
time during which Executive is employed by Employer under this Agreement.

2.     Position.

a.             During
the Employment Term, Executive shall serve as the Employer’s [POSITION].  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.             During
the Employment Term, 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

1 Cyrulewski only.

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; 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.  During the Employment Term, ITC shall pay
Executive a base salary at the annual rate of $[AMOUNT], payable in regular
installments in accordance with ITC’s normal payroll practices.  Executive’s base salary shall be reviewed
annually by the Board 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 Board. 
Executive’s annual base salary, as in effect from time to time, is
hereinafter referred to as the “Base Salary”.

4.     Annual Bonus.  During the Employment Term, Executive shall
be eligible to earn an annual bonus award in respect of each fiscal year of
Employer (an “Annual Bonus”),
payable upon ITC’s achievement of certain performance targets established 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 generally be 40% of Executive’s Base Salary (the
“Target Bonus”).

5.     Employee Benefits and Perquisites; Business Expenses.

a.             Employee
Benefits.  During the Employment Term, Executive shall
be entitled to participate in ITC 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: (a) welfare benefit plans (including
active medical, life, disability, flexible spending accounts and other related
welfare plans); (b) fringe benefit plans (including education assistance and
adoption assistance); (c) retiree welfare benefit plans (medical and life
insurance); (d) qualified and non-qualified defined benefit and defined
contribution plans; and (e) 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), but excluding absence bank plans.

b.             Perquisites. During the
Employment Term, 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.  During
the Employment Term, reasonable business expenses incurred by Executive in the
performance of Executive’s duties hereunder shall be reimbursed by ITC in
accordance with ITC’s policies.

2

6.     Equity Participation.  Executive’s equity participation in the
Company has been documented pursuant to the 2003 Stock Purchase and Option Plan
for Key Employees of the Company and its Subsidiaries and in a Management
Stockholder’s Agreement, Stock Option Agreement, Restricted Stock Award
Agreement and Sale Participation Agreement, 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, 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.  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 30 days advance written notice of any
resignation of Executive’s employment; 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 “Company
Notice Period”), unless the Employer provides Executive with a payment equal to
the Base Salary that would otherwise be payable in respect of any portion of
the Company 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 (other than as a result of total or partial incapacity due to
physical or mental illness) for a period of 10 days following written notice by
the Employer to Executive of such failure, (B) dishonesty in the performance of
Executive’s duties hereunder, (C) Executive’s conviction of, or plea of nolo
contendere to a crime constituting (x) a felony under the laws of the
United States or any state thereof or (y) a misdemeanor involving moral
turpitude, (D) 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 or (E) Executive’s breach of the provisions of Sections 8 or 9 of
this Agreement.

(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:

(A)             any Base Salary earned through the date of
termination, payable in a lump sum at such time as the Base Salary would
otherwise be payable in accordance with the normal payroll practices of the
Employer;

3

(B)              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
(or, if later, such other earliest date on which such amount can be paid as may
be permitted under Section 409A of the Internal Revenue Code, as amended, and
the rules and regulations promulgated thereunder (collectively, “Section 409A”));

(C)              reimbursement for any unreimbursed business expenses
properly incurred by Executive, payable at such time(s) and in accordance with
ITC policy prior to the date of Executive’s termination ((or such other
earliest date on which such expenses can be reimbursed as may be permitted
under Section 409A); and

(D)              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 (A)
through (D) hereof being referred to, collectively, as the “Accrued Rights”).

Following such termination of Executive’s employment
by the Employer for Cause or resignation by Executive, 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 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:

(A)             the Accrued Rights;

(B)              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 (or, if later, such other earliest date on
which such amount can be paid as may be permitted under Section 409A); and

4

(C)              full and immediate vesting of any then unvested options to
purchase shares of common stock of the Company held by Executive immediately
prior to 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 or by Executive Resignation for Good Reason.

(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 his Disability) or (B) or by
Executive for Good Reason (as defined below).

(ii)  For purposes of this Agreement, “Good Reason” shall mean (A) a greater than
10% reduction in the total value of Executive’s Base Salary, Target Bonus, and
Employee Benefits; (B) Executive’s job responsibility and authority are
substantially diminished; and (C) Executive’s work location is relocated to
more than fifty (50) miles from Novi, Michigan or Ann Arbor, Michigan; and
provided, further, that “Good Reason”
shall cease to exist for an event on the 60th day following the
later of its occurrence or Executive’s knowledge thereof, unless Executive has
given the Employer written notice thereof prior to such date.

(iii)  If Executive’s employment is
terminated by the Employer without Cause (other than by reason of death or
Disability) or by Executive for Good Reason, subject to Executive’s execution
of a release of all claims against Employer, Executive shall be entitled to
receive:

(A)             the Accrued Rights;

(B)              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 full calendar year), payable
in a lump sum within fifteen (15) business days after the date of such
termination of employment (or, if later, such other earliest date on which such
amount can be paid as may be permitted under Section 409A);

(C)              continued payment
in substantially equal installments, in accordance with the normal payroll
practices of Employer, for a period of one year following the date of
termination of Executive’s employment hereunder (the “Severance Period”), of the Executive’s
annual rate of Base Salary as in effect immediately prior to such termination
(such aggregate amount, the “Severance Payment”);
provided that the amount of the Severance Payment shall be reduced by
the present value of any other cash severance or termination benefits payable
to Executive under any other plans, programs or arrangements of the Employer or
its affiliates; and provided, further, however, that in
the event Executive is a “specified employee” within the meaning of Section
409A,

5

payment
of the Severance 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 (or such other earliest date on which such amount can be
paid as may be permitted under Section 409A) (the period during which no such
payment may be made under Section 409A, the “409A Period”),
at which time Employer shall (I) pay to Executive, in one lump sum, an amount
equal to the portion of the Severance Payment that would otherwise have been
payable during the 409A Period, and (II) thereafter continue to pay the
remaining unpaid portion of the Severance Payment in accordance with the normal
payroll practices of Employer through the end of the Severance Period as
otherwise provided in this Section 7(c)(iii)(C) above;

(D)              continued provision, during the Severance Period, of
the applicable Employee Benefits that are health and welfare benefits
(including health insurance as required to be provided by ITC pursuant to the
Consolidated Omnibus Budget Reconciliation Act), to be provided by ITC at the
same cost(s) to Executive as paid by other executives of the Employer during such
time;

(E)              in addition to the benefits provided under subsection
(D) above, in the event that, if Executive had remained employed with the
Employer through the end of the Severance Period, Executive would have
satisfied the age and service requirements for eligibility of benefits under
the ITC Retiree Welfare Plan (as in effect from time to time), at the end of
the Severance Period Executive shall be deemed to have satisfied such
requirements,] and shall, at such time as Executive actually achieves the age at
which benefits would otherwise be provided to a participant in such plan, be
entitled to receive benefits under such plan on the same terms and conditions
as all other plan participants who actually satisfy such requirements;  and

(F)              outplacement services of a duration of not less than
one year, and at a level commensurate with Executive’s former position with the
Company, and by a provider as determined by the Employer in good faith; provided,
however, that such services may only be provided to the extent permitted
under Section 409A.

Notwithstanding
anything set forth in Section 7(c)(iii)(E), if ITC terminates the ITC
Retiree Welfare Plan (and does not replace it with any successor plan that
provides retiree welfare benefits that are comparable to those provided under
the ITC Retiree Welfare Plan (“Retiree Benefits”)) either (x) prior to an event
giving rise to the Employer’s obligations under this Section 7(c)(iii)(E) or
(y) at any time after such event and, at such time, by operation of Section
7(c)(iii)(E) Executive would otherwise be eligible to receive the benefits
provided therein, then, in satisfaction of all obligations the Employer
would otherwise have under Section 7(c)(iii)(E), the Employer shall be
permitted to either (I) establish and maintain a plan for the purpose of
providing Executive with Retiree Benefits for so long as the Employer would
otherwise be required to provide benefits under Section 7(c)(iii)(E) or (II) at
that time (or, if later, on such other earliest date on which amounts can be
paid as may be permitted under Section 409A) pay Executive in cash a lump sum
amount equal to the Employer’s cost of otherwise providing such

6

benefits,
the amount of which shall be determined by an enrolled actuary retained by the
Employer for such purpose.

Following
Executive’s termination of employment by the Employer without Cause (other than
by reason of Executive’s death or Disability) or Executive for Good Reason,
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 12(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; Execution of Release of all Claims.

(i)  Upon termination of Executive’s employment
for any reason, Executive agrees to resign, as of the date of such 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.

(ii)  Upon termination of Executive’s employment
for any reason, Executive agrees to execute a 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 for any reason, Executive shall not receive any payments
or benefits to which he may be entitled hereunder (other than those which by
law cannot be subject to the execution of a release) (A) if Executive revokes
such release or (B) until eight (8) days after the date Executive signs such
release (or until such other date as applicable law may provide that Executive
cannot revoke such release).

8.     Non-Competition.

a.             Executive
acknowledges and recognizes the highly competitive nature of the businesses of
the Employer and its affiliates and accordingly agrees as follows:

(i) 
During the Employment Term and for
a period of one year following the date Executive ceases to be employed by
Employer hereunder (the “Restricted
Period”), Executive will not, whether on Executive’s own behalf or
on behalf of or in conjunction with any person, firm, partnership, joint
venture, association, corporation or other business organization, entity or
enterprise whatsoever (“Person”),
directly or indirectly solicit or assist in soliciting in competition with the
Employer, the business of any customer or prospective customer:

(A)             with whom Executive had personal contact or dealings
on behalf of the Employer during the one-year period preceding Executive’s
termination of employment;

7

(B)              with whom employees reporting to Executive have had
personal contact or dealings on behalf of the Employer during the one year
immediately preceding Executive’s termination of employment; or

(C)              for whom Executive had direct or indirect
responsibility during the one year immediately preceding Executive’s
termination of employment.

(ii)  During the Restricted
Period, Executive will not directly or indirectly:

(A)             engage in any business that competes with the
business of the Employer or its affiliates (including, without limitation,
businesses which the Employer or its affiliates have specific plans to conduct
in the future and as to which Executive is aware of such planning) in any
geographical area that is within 100 miles of any geographical area where the Employer
or its affiliates manufactures, produces, sells, leases, rents, licenses or
otherwise provides its products or services (a “Competitive Business”);

(B)              enter the employ of, or render any services to, any
Person (or any division or controlled or controlling affiliate of any Person)
who or which engages in a Competitive Business;

(C)              acquire a financial interest in, or otherwise become
actively involved with, any Competitive Business, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent, trustee
or consultant; or

(D)              interfere with, or attempt to
interfere with, business relationships (whether formed before, on or after the
date of this Agreement) between the Employer or any of its affiliates and
customers, clients, suppliers, partners, members or investors of the Employer
or its affiliates.

(iii)  Notwithstanding anything to
the contrary in this Agreement, Executive may, directly or indirectly own,
solely as an investment, securities of any Person engaged in the business of
the Employer or its affiliates which are publicly traded on a national or
regional stock exchange or on the over-the-counter market if Executive
(A) is not a controlling person of, or a member of a group which controls,
such person and (B) does not, directly or indirectly, own 5% or more of
any class of securities of such Person.

(iv)  During the Restricted
Period, Executive will not, whether on Executive’s own behalf or on behalf of
or in conjunction with any Person, directly or indirectly:

(A)             solicit or encourage any employee
of the Employer or its affiliates to leave the employment of the Employer or
its affiliates; or

(B)              hire any such employee who was employed by the
Employer or its affiliates as of the date of Executive’s termination of
employment with the Employer or who left the employment of the Employer or

8

its
affiliates coincident with, or within one year prior to or after, the
termination of Executive’s employment with the Employer.

(v)  During the Restricted
Period, Executive will not, directly or indirectly, solicit or encourage to
cease to work with the Employer or its affiliates any consultant then under
contract with the Employer or its affiliates.

b.             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 time or territory or any other restriction 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 time and terri­tory and to such maximum extent 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.

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 —
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

9

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.

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.              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.

10

11.   Arbitration.  Except as provided in Section 10, any other
dispute arising out of or asserting breach of this Agreement, or any statutory
or common law claim by Executive relating to his employment under this
Agreement or the termination thereof (including any tort or discrimination
claim), shall be exclusively resolved by binding statutory arbitration in
accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association.  Such
arbitration process shall take place within 100 miles of the Detroit, Michigan
metropolitan area.  A court of competent
jurisdiction may enter judgment upon the arbitrator’s award.  In the event of any such dispute, all
reasonable fees and disbursements of counsel incurred by Executive shall be
reimbursed by Employer within a reasonable period of time following receipt
from Executive (or Executive’s counsel) of a final bill invoicing all such fees
and disbursements, so  long  as the arbitrator does not
determine that such dispute was based on claims made by Executive that were
frivolous or in bad faith.

12.   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

11

its
affiliates.  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, Subsidiaries, 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, 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 12(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.

39500 Orchard Hill Place

Suite 200

Novi, Michigan 48375

Attention:  
General Counsel

With a copy to:

Simpson Thacher
& Bartlett LLP

425 Lexington
Avenue

New York, New York
10017

Attention:   Alvin H. Brown, Esq.

 

If to Executive:

To the most recent
address of Executive set forth in Employer’s personnel records of the Employer.

12

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, [and the Prior Employment Agreement,]) between 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.  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.  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.

(ii)  409A Penalties.  Notwithstanding any other provision of this
Agreement, 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 Section 409A (the “409A Penalties”) with respect to any
payment or benefit due to Executive under this Agreement (including a delay in
payment until six months after the date of termination of Executive’s
employment hereunder, in the event Executive is a “specified employee” within
the meaning of Section 409A),
the parties hereby confirm that all such payments and benefits due to Executive
will in fact be made or provided 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 (A) 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 (B) to the extent that the course of action proposed in
clause (A) cannot be effected, within fifteen (15) days after the date of such
determination (or such other earliest date on which such amount can be paid as
may be permitted under Section 409A) pay to Executive an additional amount
equal to such Section 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 (subject to the computational rules set
forth in Section 12(b)).

m.            Counterparts. 
This Agreement may be signed in counterparts, each

13

of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

[Signatures on next page.]

14

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.

 

	
  ITC HOLDINGS CORP.:

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [NAME]

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
				

 

15

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