UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 27, 2017

ITC HOLDINGS CORP.

(Exact Name of Registrant as Specified in its Charter)

Commission File Number: 001-32576

27175 Energy Way, Novi, Michigan 48377
(Address of principal executive offices) (zip code)

(248) 946-3000

(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Approval of 2017 Omnibus Plan

On February 27, 2017, the Board of Directors of ITC Holdings Corp. (the “Company”) approved the 2017 Omnibus Plan (the “Omnibus Plan”) for the Company’s executives, including the “Named Executive Officers” from the most recent Annual Report on Form 10-K (“NEOs”).  A summary of the key terms of the Omnibus Plan is set forth below.

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A copy of the Omnibus Plan will be filed as an exhibit to the Company’s next Quarterly Report on Form 10-Q.

Approval of 2017 Annual Incentive Compensation Plan

On February 27, 2017, following approval of the Omnibus Plan, the Committee approved the 2017 annual incentive plan for the Company’s executives, including the NEOs. Awards made in accordance with this plan are treated as incentive awards under the Omnibus Plan.  Goals and payout weighting under the 2017 annual incentive plan are as follows:

Our 2017 annual incentive plan also includes a bonus multiplier under which annual incentive bonus awards may be increased by as much as 100% to the extent specified targets related to our Capital Investment Plan (“CIP”), Consolidated Net Income (“CNI”) and Cash Flow Available for Distribution (“CFAD”). CIP accounts for 50% of the bonus multiplier and CNI and CFAD each account for 25% of the bonus multiplier.

A summary of the 2017 annual incentive plan will be filed as an exhibit to the Company’s next Quarterly Report on Form 10-Q.

Approval of 2017 Service-Based Unit and Performance-Based Unit Awards

On February 27, 2017, the Committee made grants of service-based units and performance-based units under the Omnibus Plan to certain employees employed on that date with a grant date of March 8, 2017.  Grants made to the NEOs are set forth in the table below.

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(1) The number of performance-based units represents the target number awarded and issued.  The actual number of units that may be earned is 200% of the target number, but only if both performance goals are met at the maximum level.

Service-Based Unit Award Agreement

The terms of the February 27, 2017 service-based unit awards are set forth in the form of service-based unit award agreement (the “SBA Agreement”), which will be filed as an exhibit to the Company’s next Form 10-Q. The SBA Agreement provides generally that the award will vest on December 31, 2019 (the “Vesting Date”) if the participant continues to be employed by the Company through the Vesting Date. Upon a termination of employment or a Change of Control, the SBA Agreement provides that the awards generally vest in accordance with the Omnibus Plan described above, except that if participant’s employment is terminated due to Retirement or an Involuntary Termination Without Cause (both as defined in the Omnibus Plan) prior to the Vesting Date, (i) one-third of the award shall be deemed to have vested if termination occurred on or after the one-year anniversary of the grant date and before the two-year anniversary, and (ii) two-thirds of the units shall be deemed to have vested if termination occurred on or after the two-year anniversary of the grant date and before the Vesting Date. Participants are entitled to dividend equivalents with respect to an award to the extent provided in the Omnibus Plan.

Performance-Based Unit Award Agreement

The terms of the February 27, 2017 performance-based units awards are set forth in a form of performance-based unit award agreement (the “PSA Agreement”), which will be filed as an exhibit to the Company’s next Form 10-Q.  The PSA Agreement provides generally that the award will vest on the Vesting Date to the extent one or more of the performance goals are met and if the participant continues to be employed by the Company through the Vesting Date.  The performance-based unit awards will become “earned” as set forth in the following table:

The “Payment Criteria Period” for the award is January 1, 2017 through December 31, 2019.  The TSR and CCNI performance measures are independent of each other; that is, if the threshold level of one performance measure is attained, units relating to that measure will be “earned” even if the threshold level of the other performance measure is not attained.  One-half of the target number of units shall be related to the TSR goal and one-half of the target number of units shall be related to the CCNI goal.

The Total Shareholder Return of Fortis and Fortis’ peer companies shall be computed in U.S. dollars as follows:

A:  Calculate the market price as of the first day of the Payment Criteria Period (if necessary, converted into U.S. dollars based on the Canadian dollar to U.S. dollar exchange rate as of beginning of year in which award is made).

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B:  Calculate the market price as of the last day of the Payment Criteria Period (if necessary, converted into U.S. dollars based on the Canadian dollar to U.S. dollar exchange rate as of beginning of year in which award is made).

C:  Calculate the total dividends paid per share of its common stock (or equivalent security) during the Payment Criteria Period (if necessary, converted into U.S. dollars based on the Canadian dollar to U.S. dollar exchange rate as of beginning of year in which award is made).

Total Shareholder Return = ((B – A) + C)/A

Fortis Total Shareholder Return will be compared to the Total Shareholder Return during the Payment Criteria Period for each of the companies in Fortis’ peer group, excluding those which are not traded on a national securities exchange at the end of the Payment Criteria Period.

Consolidated Net Income for the Company for each calendar year in the Payment Criteria Period shall be equal to net income as set forth in the Company’s audited consolidated financial statements contained in its Annual Report on Form 10-K for such year, as adjusted for certain extraordinary items and changes in return on equity, in each case in the Committee’s discretion.  Cumulative Consolidated Net Income for the Company during the Payment Criteria Period shall be the sum of the Consolidated Net Income for each of the three years in the Payment Criteria Period.

Under the terms of the PSA Agreement, performance-based units generally vest in accordance with the Omnibus Plan described above, except that if a participant’s service is terminated due to Retirement or an Involuntary Termination Without prior to the Vesting Date, (i) one-third of the award to which the participant would have been entitled if the participant had remained employee with the Company through the Vesting Date shall be deemed to have vested on the Vesting Date if termination occurred on or after the one-year anniversary of the grant date and before the two-year anniversary, and (ii) two-thirds of the award to which the participant would have been entitled if the participant had remained employed with the Company through the Vesting Date shall be deemed to have vested on the Vesting Date if termination occurred on or after the two-year anniversary of the grant date and before the Vesting Date. Participants are entitled to dividend equivalents with respect an award to the extent provided in the Omnibus Plan.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

March 3, 2017

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