FIRST AMENDMENT TO
MANAGEMENT STOCKHOLDERS’ AGREEMENT
THIS FIRST
AMENDMENT (the “ Amendment ”) to the Management
Stockholders’ Agreement, which is effective as of
September 30, 2005, among ITC Holdings Corp., a Michigan
corporation (the “ Company ”) and the person
identified on the signature page attached hereto (the “
Management Stockholder ”, and such agreement, the
“ Stockholder’s Agreement ”), is made
effective as of the same day as the effective date of the
Stockholder’s Agreement. This First Amendment to the terms of
the Stockholder’s Agreement is effected by the Company and
the Management Stockholder in accordance with the provisions of
Section 18 of the Stockholder’s Agreement.
Defined terms not
expressly defined in this Amendment shall have the same meanings as
set forth in the Stockholder’s Agreement. The restrictions on
the effectiveness of the Stockholder’s Agreement shall apply
with equal force and effect to this Amendment.
WHEREAS,
in connection with the Management Stockholder’s employment
with the Company, the Company has determined that it is advisable
to agree to amend the terms of the Stockholder’s Agreement
solely as provided below.
NOW,
THEREFORE, The parties hereto hereby agree as follows:
Section 1.
Amendments to Stockholder’s Agreement
1.1
Section 2(a) . Section 2(a), clause (x) of
the Stockholder’s Agreement is hereby deleted in its entirety
and replaced with the following clause:
“(x)
a transfer made pursuant to Section 3, 4 or 6
hereof,”
1.2
Subsection 5(a). Section 5(a) of the Stockholder’s
Agreement is hereby deleted in its entirety and replaced with the
following:
(a)
“Except as otherwise provided herein, if, prior to the fifth
anniversary of the Effective Date, the Management Stockholder is
still in the employ of the Company (and/or, if applicable, its
subsidiaries) and the Management Stockholder’s employment is
terminated as a result of the death or Permanent Disability of the
Management Stockholder, then the applicable Management Stockholder
Entity shall have the right to:
(i) With
respect to the Stock, notwithstanding anything in this Agreement to
the contrary, sell or otherwise dispose of all or any portion of
the Stock other than to the Company; and
(ii) With
respect to the Options, receive from the Company, on one occasion
within sixty (60) days (“the Option Exercise Period
”) following the date of the death or Permanent Disability of
the Management Stockholder, in exchange for all of the exercisable
Options then held by the applicable Management Stockholder Entities
at the time of termination of the Management Stockholder’s
employment as a result of the death or Permanent Disability of the
Management Stockholder, if any, a number of shares of Stock equal
to the quotient of (x) the product of (A) the excess, if any,
of the Fair Market Value Per Share over the Option Exercise Price
and (B) the number of Exercisable Option Shares, divided
by (y) the Fair Market Value Per Share, which Options
shall be terminated in exchange for such shares of stock (the
“Net Settled Stock”). In the event the foregoing value
is zero or a negative number, all outstanding exercisable Options
shall be automatically terminated without any payment in respect
thereof. Notwithstanding anything to the contrary in this
Agreement, the Management Stockholder Entities may sell or
otherwise dispose of all or any portion of the Net Settled Stock
other than to the Company.
Notwithstanding
anything set forth in this Section 5(a) to the contrary, the
Management Stockholder Entities hereby acknowledge that their
ability to sell or otherwise dispose of all or any portion of their
Stock or Net Settled Stock, as provided above, does not constitute
a waiver of, among other things, any of the requirements otherwise
imposed on the Management Stockholder Entities with respect to the
sale or other disposition of Stock set forth in Section 2 of
the Agreement.”
1.3
Subsection 5(b) . Subsection 5(b) of the Stockholder’s
Agreement is hereby deleted in its entirety and replaced with the
following:
“In
the event the applicable Management Stockholder Entities
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