Attached files
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EXCEL - IDEA: XBRL DOCUMENT - ITC Holdings Corp. | Financial_Report.xls |
10-Q - FORM 10-Q - ITC Holdings Corp. | k50261e10vq.htm |
EX-32 - EX-32 - ITC Holdings Corp. | k50261exv32.htm |
EX-31.1 - EX-31.1 - ITC Holdings Corp. | k50261exv31w1.htm |
EX-31.2 - EX-31.2 - ITC Holdings Corp. | k50261exv31w2.htm |
EXHIBIT 10.93
February 1, 2011
Edward M. Rahill
1865 Hickory Valley Road
Milford, MI 48380
1865 Hickory Valley Road
Milford, MI 48380
Dear Ed:
As we have discussed, you and we have agreed that your employment with ITC Holdings Corp. and
its subsidiaries (collectively, the Company) in all capacities will be terminated, effective
March 1, 2011 (the Effective Date). This letter agreement sets forth the entire understanding
between us with respect to these matters.
1. You will continue to be covered as an employee of the Company by your Employment Agreement,
dated December 1, 2008 (the Employment Agreement), obligated to perform your duties thereunder
and entitled to receive the benefits to which you are entitled thereunder through the Effective
Date. Your employment will cease on the Effective Date. The parties obligations under Sections 6
and 8 through 12 of the Employment Agreement (as modified herein), however, shall survive the
termination of your employment; provided that, except as otherwise specifically provided in this
letter agreement, following the Effective Date you shall have no further rights to compensation or
any other benefits under the Employment Agreement and the benefits provided under this letter
agreement (except as otherwise noted herein) are in lieu of and supersede any benefits to which you
may otherwise be entitled under the Employment Agreement, including, without limitation, Section 7
thereof. The Company shall have the right to deduct from any payments made under this letter
agreement all applicable tax withholdings with regard to amounts being paid pursuant to this letter
agreement, determined in accordance with the Companys normal practices. Defined terms used in
this letter agreement that are not defined in this letter agreement shall have the meaning assigned
to them in the Employment Agreement.
2. As provided in Section 7.c. of the Employment Agreement, you will continue to receive
payment in substantially equal installments, in accordance with the normal payroll practices of the
Company, for a period of two (2) years following the Effective Date (the Severance Period), of
your annual rate of Base Salary as in effect immediately prior to the Effective Date (such
aggregate amount, the Severance Payment); provided, however, that because you are a specified
employee within the meaning of Internal Revenue Code (the 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 you within the first six (6) months following such termination
pursuant to this provision shall not exceed two times the lesser of (I) the sum of your annualized
compensation based upon the annual rate of pay for services provided to the Company for the
calendar year preceding the calendar year in which your termination occurs (adjusted for any
increase during that year that was expected to continue
indefinitely, if you had not terminated), or (II) the Code Section 401(a)(17) limit on
compensation for the calendar year in which you terminate. To the extent a portion of the
Severance Payment 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 your employment (the
period during which such payments may be limited under Code Section 409A, the 409A Period), at
which time the Company shall (III) pay to you, 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 (IV)
thereafter continue to pay the remaining unpaid portion of the Severance Payment in accordance with
the normal Company payroll practices through the end of the Severance Period as otherwise provided
in this paragraph 2.
3. As provided in Section 7.c. of the Employment Agreement, you will receive payment of your
Target Bonus for calendar year 2010 in an amount equal to the product of the Companys actual
achievement of the performance targets for 2010 multiplied by 100% of your annual rate of Base
Salary as in effect as of December 31, 2010. You will also receive payment of the Executive Bonus
Multiplier, based on the calculation of total shareholder return, if applicable. Such amounts
shall be payable in a lump sum by the Company no later than March 15, 2011. As also provided in
Section 7.c. of the Employment Agreement, if the Company actually achieves the performance targets
for 2011 as determined by the Companys Compensation Committee of the Board of Directors (the
Compensation Committee), you will receive payment of a pro rata portion of your Target Bonus for
calendar year 2011 calculated based on the number of days you were employed by the Company in 2011
relative to the full calendar year and assuming a Target Bonus of 100% of your annual rate of Base
Salary as of the Effective Date. Any such 2011 Annual Bonus shall be paid at the time that such
Annual Bonuses for 2011 (if any) are paid to the Companys executives generally (but no later than
March 15, 2012). In addition, you will be eligible to receive development bonuses (if any) paid on
the Hugo-Valliant, KETA Phase 1 and KETA Phase 2 projects. These bonuses will be paid subject to
and contingent upon approval by the Compensation Committee of bonuses upon project completion and
in-service implementation and will be calculated in the same manner and paid at the same time as
for other Company executives generally (but no later than 2 1/2 months after the end of the calendar
year in which each of such bonuses is approved), using your Base Salary as of the Effective Date
(to the extent applicable).
4. You are one hundred percent (100%) vested in and will be eligible for benefits under the
following Company retirement benefit plans: (i) the International Transmission Company Retirement
Plan Traditional, benefits will be payable in accordance with plan provisions when you attain
age 65; (ii) the International Transmission Company Executive Supplemental Retirement Plan
(ESRP), benefits will be payable in accordance with plan provisions on March 1, 2012; (iii) the
International Transmission Company Retirement Plan Cash Balance, resulting from the ESRP Shift,
benefits will be payable in accordance with plan provisions; and (iv) the ITC Savings and
Investment Plan, benefits will be payable in accordance with plan provisions.
5. The Company will pay to you the additional sum of Twenty Five Thousand Dollars
($25,000.00), in lieu of outplacement services otherwise available to you under the Employment
Agreement, and in consideration of your acknowledgements and obligations under
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this letter agreement. Such amount shall be payable in a lump sum by the Company within sixty
(60) calendar days after the Effective Date.
6. In consideration of your acknowledgements and obligations under this letter agreement, all
of the stock options from the grants made to you pursuant to the agreements dated August 16, 2006,
August 15, 2007, August 13, 2008, May 19, 2009 and May 18, 2010 (the Option Agreements) will
continue to vest according to the vesting schedules in the Option Agreements (as if you had
remained employed by the Company) and will be fully exercisable by you for three months following
each applicable vesting date. In addition, any vested options available to you as of the Effective
Date must be exercised within three months from the Effective Date. Any vested options, either
currently vested or that vest in the future, that are not exercised within the three months
following the applicable vesting date will terminate in accordance with their terms. Except as
modified by this letter agreement, the terms and conditions of the Option Agreements shall survive
and remain in effect following the Effective Date. This letter agreement shall be deemed an
amendment of the Option Agreements to the extent this letter agreement modifies any of the terms
thereof.
7. In consideration of your acknowledgements and obligations under this letter agreement, all
of the restricted stock from the grants made to you pursuant to the agreements dated August 16,
2006, August 15, 2007, August 13, 2008, May 19, 2009 and May 18, 2010 (the Restricted Stock
Agreements) will continue to vest according to the vesting schedules in the Restricted Stock
Agreements (as if you had remained employed by the Company). Except as modified by this letter
agreement, the terms and conditions of the Restricted Stock Agreements shall survive and remain in
effect following the Effective Date. This letter agreement shall be deemed an amendment of the
Restricted Stock Agreements to the extent this letter agreement modifies any of the terms thereof.
8. In consideration of the benefits granted in paragraphs 6 and 7, above, the Non-Competition
provisions in the Employment Agreement shall extend and remain in full force and effect until
December 31, 2013.
9. In consideration of your contributions to the Company, the Company will pay to you a sum
equal to the aggregate cash dividend that would be paid on the shares underlying the stock options
held by you pursuant to the 2003 Stock Purchase and Option Plan for Key Employees of ITC Holdings
Corp. and Its Subsidiaries if those shares were outstanding as of March 1, 2011. Payment will be
made in a lump sum on March 15, 2011.
10. All business expenses incurred during your employment for which you are seeking
reimbursement under the Employment Agreement must be submitted in accordance with applicable
Company policy to the Company on or before the Effective Date or the Company will have no
obligation to make such reimbursement.
11. The Company shall provide or make available to you and your spouse the Medical, Dental and
Vision coverage under the International Transmission Company Post-Retirement Welfare Plan, as in
effect and as modified from time to time. You will also be eligible for retiree life insurance
under the plan. You will be required to accept the benefits under this program in lieu of electing
Consolidated Omnibus Budget Reconciliation Act
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(COBRA) coverage under the International Transmission Company Welfare Benefit Plan for you
and your spouse.
The Company shall provide or make available to your children the Medical, Dental and Vision
coverage currently being provided under the International Transmission Company Welfare Benefit Plan
(to the extent required to be provided by COBRA), for up to twenty-four (24) months following the
Effective Date. Such coverage will be provided to your children through the International
Transmission Company Welfare Benefit Plans COBRA provisions, or through the purchase of private
insurance by the Company to the extent the plan cannot provide the continuing coverage described
herein or cannot do so on a non-discriminatory basis for tax purposes. Such coverage will be
provided at the same cost(s) to you as paid by other executives of the Company, and during that
period the Company will provide you with (i) a cash subsidy equal to the Companys portion of the
premium payments under the plan, such cash subsidy shall be payable in accordance with normal
Payroll Company payroll practices; and (ii) a tax gross-up amount equal to forty and eight-tenths
percent (40.8%) of such Company payment, such tax gross-up shall be payable in a lump sum by the
Company within sixty (60) calendar days after the Effective Date. COBRA coverage rules must be
followed in order to continue coverage under the plan, or coverage will be terminated.
In the alternative, the Company has discussed with you the possibility of amending the
International Transmission Company Post-Retirement Welfare Plan to allow for coverage of children
up to age 19. If the Company implements this Plan amendment, coverage for your dependent children
would be provided through the Plan for up to twenty-four (24) months following the Effective Date.
Such coverage will be provided at the same cost(s) to you as paid by other executives of the
Company. Plan coverage rules must be followed in order to continue coverage under the Plan, or
coverage will be terminated. After 24 months of coverage, the Plan provisions will determine any
options available for continuing coverage at your expense.
12. All Company property should be returned to the Company no later than the Effective Date.
All copies of Company documents, reports, letters, manuals and other materials (excepting only
non-Company personal letters and memorabilia) in your possession should also be turned over to the
Company by the Effective Date.
13. In consideration of the benefits being afforded to you pursuant to this letter agreement,
you agree to execute and deliver to the Company, as of the Effective Date, a general release in the
form attached hereto as Exhibit A (the General Release). You also acknowledge that no amounts
(including without limitation those amounts set forth in paragraphs 2, 3 and 5) or benefits will be
paid or provided to you pursuant to this letter agreement before the later of the date(s) set forth
above, or the tenth business day after the date on which you have delivered the executed General
Release, and further that you will not be entitled to any such payments or benefits in the event
you revoke this letter agreement or the General Release. In addition, you acknowledge (i) that you
do not have any rights or claim for benefits under the Amended and Restated ITC Holdings Corp. 2006
Long Term Incentive Plan, other than to the extent set forth in paragraphs 6 and 7, (ii) that you
are not vested in, and have no claim under or right to any payment under, the ITC Holdings Corp.
Amended and Restated 2003 Stock Purchase and Option Plan for Key Employees, the ITC Holdings Corp.
Executive Group Special Bonus Plan, the International Transmission Company Executive Deferred
Compensation Plan or any other
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Company compensation, benefit, severance, stock or option grant plans or programs, unless
specifically identified in this letter agreement, and (iii) that the General Release will
constitute confirmation of your acknowledgement in this regard and constitute a waiver of any right
to bring claims for any such payments.
14. You agree that you will not make negative, disparaging, defamatory or other unfavorable
comments regarding the Company, or any directors or employees of the Company, to any person, nor
will you take any action, directly or indirectly, to cause harm to or adversity for the Company.
You also agree not to disclose the terms of this letter agreement to any third party, except as
required by law, or as is necessary for purposes of securing counsel from your attorney or
accountant.
15. You agree not to initiate or cause to be initiated against the Company, its subsidiaries
or their respective directors, officers, employees and agents, any benefit plan maintained by the
Company or its subsidiaries and any fiduciary or administrator of any such plan, any compliance
review, investigation, or proceeding of any kind, or participate in the same, individually or as a
representative or member of a class (except as required by law), under any contract (express or
implied), tort, or any federal, state or local law or regulation.
16. You understand that you do not waive rights or claims that may arise after the Effective
Date. You understand, acknowledge and agree that you are advised to consult with an attorney prior
to executing this letter agreement. You further understand that you have been given 21 days (or
more) within which to consider this letter agreement or, if you have signed this agreement before
21 days has elapsed, you have done so voluntarily and knowingly, after consultation with and upon
the advice of your attorney.
17. You understand and agree that you may revoke this letter agreement for a period of seven
calendar days following the execution of the letter agreement. This letter agreement is not
effective until this revocation period has expired. You understand that any revocation, to be
effective, must be in writing and either (a) postmarked within seven days of execution of this
letter agreement and addressed to Linda Blair, the Companys Executive Vice President and Chief
Business Officer, or (b) hand delivered to Linda Blair within seven days of execution of this
letter agreement. You understand that if revocation is made by mail, mailing by certified mail,
return receipt requested, is recommended to show proof of mailing. If either this letter agreement
or the General Release is revoked by you, this letter agreement will be nullified and you will not
be entitled to any of the payments or benefits provided herein.
18. In agreeing to this letter agreement, you are doing so completely voluntarily and you
agree that you have not relied on any oral statements or explanations made by the Company or its
representatives.
19. This letter agreement is in full accord and satisfaction and compromise of any and all
claims you may have against the Company and is not to be construed as an admission of liability of
any kind on the part of the Company.
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20. Disputes arising under this letter agreement shall be resolved in accordance with the
procedures and provisions of Section 11 of the Employment Agreement. In addition, you acknowledge
and agree that the Companys remedies at law for your breach or threatened breach of any of the
provisions of this letter agreement would be inadequate and the Company would suffer irreparable
damages as a result of such breach or threatened breach. In recognition of this fact, you agree
that, in the event of such a breach or threatened breach, in addition to any remedies at law, the
Company, without posting any bond, shall be entitled to cease making any payments or providing any
benefit otherwise required by this letter 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. The Companys obligation to pay you the amounts
provided herein shall be subject to setoff, counterclaim and recoupment of amounts owed by you to
the Company or its affiliates.
21. Except as otherwise specifically provided herein, this letter agreement contains the
entire agreement between you and the Company. Any modification of this letter agreement must be
made in writing and signed by you and by the Company.
22. This letter agreement may be executed in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement. Signatures to this letter agreement made by a facsimile copy shall have the
same force and effect as original signatures.
23. This letter agreement and the respective rights and obligations of the parties hereunder
shall be governed by the internal laws of the State of Michigan without regard to its choice or
conflicts of law principles.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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If you understand and agree to the foregoing terms, please execute this letter agreement in
the space below and return it to the Company.
Very truly yours, ITC Holdings Corp. |
||||
By: | /s/ Joseph L. Welch | |||
Joseph L. Welch | ||||
Its: President and Chief Executive Officer | ||||
Read, understood, accepted
and agreed this 4th day of
February, 2011.
and agreed this 4th day of
February, 2011.
/s/ Edward M. Rahill | ||||
Edward M. Rahill | ||||
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Exhibit A
GENERAL RELEASE
Section 1. Release. For and in consideration of the payment of the amounts and the
provision of the benefits described in that certain letter agreement dated January, 2011 (the
Letter Agreement) pursuant to which the employment of the undersigned under that certain
Employment Agreement dated as of December 1, 2008 by and between Edward M. Rahill (the Executive)
and ITC Holdings Corp. (the Company) (the Employment Agreement) was terminated, the Executive
hereby agrees on behalf of himself, his agents, assignees, attorneys, successors, assigns, heirs
and executors, to, and the Executive does hereby, fully and completely forever release the Company
and its respective past, current and future affiliates, shareholders, predecessors and successors
and all of their respective past and/or present representatives, administrators, attorneys,
insurers and fiduciaries, in their individual and/or representative capacities (hereinafter
collectively referred to as the Company Releasees), from any and all causes of action, suits,
agreements, promises, damages, disputes, controversies, contentions, differences, judgments,
claims, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialities, covenants,
contracts, variances, trespasses, extents, executions and demands of any kind whatsoever, which the
Executive or his agents, assignees, attorneys, successors, assigns, heirs and executors ever had,
now have or may have against the Company Releasees or any of them, in law, admiralty or equity,
whether known or unknown to the Executive, for, upon, or by reason of, any matter, action,
omission, course or thing whatsoever occurring up to the date this General Release is signed by the
Executive. Without limiting the generality of the foregoing, the Executive hereby agrees on behalf
of himself, his agents, assignees, attorneys, successors, assigns, heirs and executors, to, and the
Executive does hereby, fully and completely forever release the Company Releasees and all of their
respective past and/or present officers, directors, partners, members, managing members, managers,
employees, agents, representatives, administrators, attorneys, insurers and fiduciaries, in their
individual and/or representative capacities in connection with or in relationship to the
Executives employment or other service relationship with the Company, the termination of any such
employment or service relationship and any applicable employment or compensatory arrangement with
the Company (including, without limitation, the Employment Agreement, any exhibits attached
thereto, any amendments thereto, and any other equity or employee benefit plans, programs, policies
or other arrangements), any claims of breach of contract, wrongful termination, retaliation, fraud,
defamation, infliction of emotional distress or national origin, race, age, sex, sexual
orientation, disability, medical condition or other discrimination or harassment, (such released
claims are collectively referred to herein as the Released Claims); provided that such Released
Claims shall not include any claims to enforce the Executives rights or obligations under, or with
respect to, (i) the Letter Agreement, or (ii) any indemnification provisions in the charter,
by-laws or similar organizational documents of the Company or its subsidiaries of which Executive
is a director or officer, or any directors and officers liability insurance policy thereof.
Section 2. Waiver. Notwithstanding the generality of Section 1 above, the Released
Claims include, without limitation: (i) any and all claims relating to base salary or bonus
payments or benefits pursuant to the Employment Agreement, other than those payments and benefits
specifically provided for in the Letter Agreement; (ii) any and all claims under Title VII
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of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Civil
Rights Act of 1971, the Civil Rights Act of 1991, the Fair Labor Standards Act, Employee Retirement
Income Security Act of 1974, the Americans with Disabilities Act, the Family and Medical Leave Act
of 1993, the Fair Employment and Housing Act, and any and all other federal, state or local laws,
statutes, rules and regulations pertaining to employment or otherwise; and (iii) any claims for
wrongful discharge, breach of contract, fraud, misrepresentation or any compensation claims or any
other claims under any statute, rule or regulation or under the common law, including compensatory
damages, punitive damages, attorneys fees, costs, expenses and all claims for any other type of
damage or relief.
THIS MEANS THAT, BY SIGNING THIS GENERAL RELEASE, THE EXECUTIVE WILL HAVE WAIVED ANY RIGHT THE
EXECUTIVE MAY HAVE HAD TO BRING A LAWSUIT OR MAKE ANY CLAIM AGAINST COMPANY RELEASEES BASED ON ANY
ACTS OR OMISSIONS OF COMPANY RELEASEES UP TO THE DATE OF THE SIGNING OF THIS GENERAL RELEASE.
Section 3. The Executives Representations and Warranties. The Executive represents
that he has read carefully and fully understands the terms of this General Release, and that the
Executive has been advised to consult with an attorney and has availed himself of the opportunity
to consult with an attorney prior to signing this General Release. The Executive acknowledges and
agrees that he is executing this General Release willingly, voluntarily and knowingly, of his own
free will, in exchange for the payments and benefits described in the Letter Agreement, and that he
has not relied on any representations, promises or agreements of any kind made to him in connection
with his decision to accept the terms of the General Release. The Executive further acknowledges,
understands, and agrees that his employment with the Company has terminated. The Executive
acknowledges that he has been advised that he is entitled to take at least twenty-one (21) days to
consider whether he wants to sign this General Release and that the Age Discrimination in
Employment Act gives him the right to revoke this General Release within seven (7) days after it is
signed, and the Executive understands that he will not receive any payments under the Letter
Agreement until such seven (7) day revocation period has passed and then, only if he has not
revoked this General Release or the Letter Agreement. To the extent the Executive has executed
this General Release within less than twenty-one (21) days after its delivery to him, the Executive
hereby acknowledges that his decision to execute this General Release prior to the expiration of
such twenty-one (21) day period was entirely voluntary, and taken after consultation with and upon
the advice of his attorney.
This General Release is final and binding and may not be changed or modified, except by
written agreement by both of the Company and the Executive.
/s/ Edward M. Rahill | ||||
Edward M. Rahill | ||||
Date: February 4, 2011 | ||||
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