Document:

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                                                                   EXHIBIT 10.38

                               AMENDMENT NO. 1 TO
                    AMENDED AND RESTATED 2003 STOCK PURCHASE
                        AND OPTION PLAN FOR KEY EMPLOYEES
                               ITC HOLDINGS CORP.

     This Amendment No. 1 to the Amended And Restated 2003 Stock Purchase And
Option Plan For Key Employees (the "Plan") of ITC Holdings Corp. (the "Company")
is made this 8th day of February, 2006 pursuant to Section 10(b) of the Plan and
shall become effective only if the 2006 Long-Term Incentive Plan is approved by
shareholders of the Company at the 2006 annual meeting of shareholders.

     The first sentence of Section 6(a) of the Plan be and hereby is amended and
restated in its entirety to read as follows:

     The number of Shares available for Grants under this Plan shall be
4,014,821 (which reflects any stock splits that occurred prior to February 8,
2006).<PAGE>
                                                                   EXHIBIT 10.39

                               ITC HOLDINGS CORP.

                          EMPLOYEE STOCK PURCHASE PLAN

                          (Effective _______ ___, 2006)

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<TABLE>
<S>                                                                            <C>
I.     GENERAL PROVISIONS                                                      1
1.1    Establishment                                                           1
1.2    Purpose                                                                 1
1.3    Plan Duration                                                           1
1.4    Definitions                                                             1
1.5    Stock.                                                                  3
1.6    Administration                                                          3
1.7    Participants                                                            4

II.    OFFER TERMS                                                             4
2.1    Offer and Purchase Period.                                              4
2.2    Option Price                                                            4
2.3    Participation                                                           5
2.4    Participation Limitations.                                              6
2.5    Termination of Employment                                               5
2.6    Restrictions on Transfer                                                6

III.   MISCELLANEOUS                                                           6
3.1    Non Assignability                                                       6
3.2    Adjustments                                                             6
3.3    Change in Control.                                                      7
3.4    Termination and Amendment                                               8
3.5    Rights Prior to Issuance of Shares                                      8
3.6    Securities Laws.                                                        8
3.7    Delivery of Plan                                                        8
3.8    Effect on Employment                                                    9
3.9    Certificates                                                            9
3.10   Use of Proceeds                                                         9
3.11   Approval of Plan                                                        9
3.12   Governing Law.                                                          9
</TABLE>

<PAGE>

                               ITC HOLDINGS CORP.

                          EMPLOYEE STOCK PURCHASE PLAN

     I. GENERAL PROVISIONS

     1.1 Establishment. On February 8, 2006, the Board of Directors ("Board") of
ITC Holdings Corp. ("Corporation") adopted the ITC Holdings Corp. Employee Stock
Purchase Plan ("Plan"), subject to approval by the shareholders of the
Corporation on May 17, 2006.

     1.2 Purpose. The purpose of the Plan is (i) to promote the best interests
of the Corporation and its shareholders by encouraging Employees of the
Corporation and any Subsidiaries to acquire an ownership interest in the
Corporation through the purchase of stock in the Corporation, thus aligning
their interests with those of shareholders, and (ii) to enhance the ability of
the Corporation and its Subsidiaries to attract, motivate and retain qualified
Employees. The Plan is intended to constitute an "employee stock purchase plan"
under Section 423 of the Code.

     1.3 Plan Duration. Upon receipt of shareholders approval, the Plan shall
commence on May 17, 2006 and subject to earlier termination by the Board in
accordance with Section 3.4, no new Offers may be made under the Plan after
February 7, 2012.

     1.4 Definitions. As used in this Plan, the following terms have the meaning
described below:

     (a) "Board" means the Board of Directors of the Corporation.

     (b) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

     (c) "Change in Control" means the occurrence of any of the following
events:

     (i) If any one person, or more than one person acting as a group (as
defined in Code Section 409A and IRS guidance issued thereunder), acquires
ownership of Common Stock of the Corporation that, together with stock held by
such person or group, constitutes more than fifty (50) percent of the total fair
market value or total voting power of the Common Stock of the Corporation.
However, if any one person or more than one person acting as a group, is
considered to own more than fifty (50) percent of the total fair market value or
total voting power of the Common Stock of the Corporation, the acquisition of
additional stock by the same person or persons is not considered to cause a
Change in Control, or to cause a change in the effective control of the
Corporation (within the meaning of Code Section 409A and IRS guidance issued
thereunder). An increase in the percentage of Common Stock owned by any one
person, or persons acting as a group, as a result of a transaction in which the
Corporation acquires its stock in exchange for property shall be treated as an
acquisition of stock for purposes of this Section. This paragraph applies only
when there is a transfer of stock of the Corporation (or issuance of stock of
the Corporation) and stock in such Corporation remains outstanding after the
transaction.

     (ii) If any one person, or more than one person acting as a group (as
determined in accordance with Code Section 409A and IRS guidance thereunder),
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership

<PAGE>

of Common Stock of the Corporation possessing thirty-five (35) percent or more
of the total voting power of the Common Stock of the Corporation; or

     (iii) If a majority of members on the Corporation's Board is replaced
during any 12-month period by Directors whose appointment or election is not
endorsed by a majority of the members of the Corporation's Board prior to the
date of the appointment or election (provided that for purposes of this
paragraph, the term Corporation refers solely to the "relevant" Corporation, as
defined in Code Section 409A and IRS guidance issued thereunder), for which no
other Corporation is a majority shareholder.

     (iv) If there is a change in the ownership of a substantial portion of the
Corporation's assets, which shall occur on the date that any one person, or more
than one person acting as a group (within the meaning of Code Section 409A and
IRS guidance issued thereunder) acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or
persons) assets from the Corporation that have a total gross fair market value
equal to or more than forty (40) percent of the total gross fair market value of
all of the assets of the Corporation immediately prior to such acquisition or
acquisitions. For this purpose, gross fair market value means the value of the
assets of the Corporation, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

     (d) "Committee" means the Compensation Committee of the Board.

     (e) "Common Stock" means shares of the Corporation's Common Stock, as
described in Section 1.4, below.

     (f) "Corporation" means ITC Holdings Corp. and, for purposes of this Plan,
employment with the Corporation shall be deemed to include employment with any
Subsidiary of the Corporation.

     (g) "Election Period" means the period of time designated by the Committee
when an eligible Employee may elect to participate in one or more Purchase
Periods.

     (h) "Employee" means an individual who has an "employment relationship"
with the Corporation or a Subsidiary, as defined in Treasury Regulation 1.421
7(h), and the term "employment" means employment with the Corporation or a
Subsidiary, as applicable.

     (i) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time and any successor rule.

     (j) "Fair Market Value" means the value of Common Stock as determined in
accordance with Section 2.2.

     (k) "Offer" means the Committee's designation of a Purchase Period
available to eligible Employees and the terms on which an option may be
exercised during the applicable Purchase Period.

     (l) "Option Price" means the price, determined by the Committee, at which
Common Stock subject to an option may be purchased during a Purchase Period.

     (m) "Plan" means the ITC Holdings Corp. Employee Stock Purchase Plan, the
terms of which are set forth herein, and any amendments thereto.

<PAGE>

     (n) "Purchase Period" means a period established by the Committee during
which an eligible Employee may exercise options granted hereunder.

     (o) "Stock Exchange" means the principal national securities exchange on
which the Common Stock is listed for trading, or, if the Common Stock is not
listed for trading on a national securities exchange, such other recognized
trading market or quotation system upon which the largest number of shares of
Common Stock has been traded in the aggregate during the last 20 days before the
first or last day of a Purchase Period, as applicable.

     (p) "Subsidiary" means any subsidiary of the Corporation, as defined in
Code Section 424(f).

     1.5 Stock. The stock subject to option and purchase under the Plan shall be
the Common Stock of the Corporation, and may be either authorized and unissued
shares or shares that have been reacquired by the Corporation. The total amount
of Common Stock on which options may be granted under the Plan shall not exceed
one hundred eighty thousand shares (180,000) shares, subject to adjustment in
accordance with Section 3.2. Shares of Common Stock subject to any unexercised
portion of a terminated, canceled or expired option granted under the Plan may
again be used for options under the Plan.

     1.6 Administration. The Plan shall be administered by the Committee. The
Committee may prescribe rules and regulations from time to time for the
administration of the Plan and may decide questions which may arise with respect
to its interpretation or application. The decisions of the Committee in
interpreting the Plan shall be final, conclusive and binding on all persons,
including the Corporation, its Subsidiaries, Employees, and optionees. The
Committee, from time to time, shall grant to eligible Employees on a uniform
basis, options to purchase Common Stock pursuant to the terms and conditions of
the Plan. In the event of insufficient shares during a Purchase Period, the
Committee shall allocate the right to purchase shares to each participant in the
same proportion that such participant's total current base salary paid by the
Corporation for the Purchase Period bears to the total of such base salaries
paid by the Corporation to all participants during the same period. All excess
funds withheld, as a result of insufficient shares, shall be returned to the
participating Employees.

     1.7 Participants. Except as provided in Section 2.4 below, any Employee who
has (a) completed six (6) full months of service with the Corporation, and (b)
whose customary employment is more than twenty (20) hours per week and five (5)
or more months per calendar year at the time of an Offer, is eligible to
participate in such Offer under the Plan, in accordance with the terms of the
Plan. An Employee who meets the eligibility requirements in this Section 1.6
shall be entitled to participate in the first Offer commencing after the
eligibility requirements have been satisfied.

     II. OFFER TERMS

     2.1 Offer and Purchase Period.

     (a) The Committee shall determine the date or dates upon which one or more
Offers shall be made under the Plan. The Purchase Period pursuant to each Offer
shall be three (3) months, or such other term as the Committee shall determine
prior to the commencement of an Offer, but which in no event shall exceed
twenty-seven (27) months.

<PAGE>

     (b) To participate in an Offer, an eligible Employee must submit such
enrollment forms as shall be prescribed by the Committee (which shall include a
payroll deduction authorization form) at such time and in such manner as shall
be prescribed by the Committee. The payroll deductions authorized by a
participant on a payroll deduction authorization form shall be expressed (i) as
a whole number percentage of the participant's "base compensation" for each pay
period during the Purchase Period, (ii) as a specified dollar amount to be
withheld from a participant's base compensation or bonus on one or more
designated payroll dates, or (iii) as a specified number of shares to be
purchased within the dollar and share limits set forth in the Plan. For purposes
of the Plan, a participant's "base compensation" for a pay period shall include
the participant's base compensation but shall exclude commissions, bonuses,
overtime, sick pay, severance pay, moving expenses, expense reimbursements and
allowances and other special payments and supplemental compensation. A
participant may not purchase more than two hundred thirty two (232) shares of
Common Stock in any three (3) month Purchase Period (proportionately adjusted
upward for Purchase Periods of more than three (3) months).

     2.2 Option Price.

     (a) The Option Price at which shares of Common Stock may be purchased under
the Plan shall be determined by the Committee at the time of the Offer but in no
event shall such amount be less than the lesser of:

     (i) 85% of the Fair Market Value of a share of Common Stock on the date of
grant of the option (first day of a Purchase Period), or

     (ii) 85% of the Fair Market Value of a share of Common Stock on the date
the option is deemed exercised pursuant to Section 2.4(d) (last day of a
Purchase Period).

     (b) For purposes of this Plan, the Fair Market Value per share shall be
deemed to be the closing price of Common Stock on the Stock Exchange for the
first and last days of the Purchase Period. In the event that there are no
Common Stock transactions on either date, the Fair Market Value shall be
determined as of the immediately preceding date on which there were Common Stock
transactions.

     2.3 Participation.

     (a) An eligible Employee may elect to participate in an Offer by delivering
to the Corporation an election to participate and a payroll deduction form
within the Election Period designated by the Committee prior to the commencement
of a Purchase Period. An eligible Employee's election to participate and payroll
deduction form from the preceding Election Period automatically shall carry over
to the next Election Period unless affirmatively revoked in writing by the
Employee. An Employee who elects to participate may not authorize payroll
deductions which, in the aggregate, are more than ten percent (10%) of the
Employee's after-tax base salary (not including overtime and bonus payments).
Only whole shares of Common Stock may be purchased under the Plan.

     (b) All Employees granted options under the Plan shall have the same rights
and privileges under the Plan, except that the number of shares each participant
may purchase shall depend upon his or her base compensation and the designated
payroll deduction he or she authorizes.

     (c) Payroll deductions shall commence on the first payroll date in the
Purchase Period and shall continue until the last payroll date in the Purchase
Period. An Employee may suspend payroll

<PAGE>

deductions during a Purchase Period only at the discretion of the Committee in
the event of an unforeseen hardship; provided, however, that payroll deductions
made prior to approval of the suspension by the Committee shall still be used to
purchase Common Stock for the Employee at the end of the Purchase Period.

     (d) A participating Employee's option shall be deemed to have been
exercised on the last business day of the Purchase Period.

     (e) As soon as practicable after the end of the Purchase Period, the
Corporation shall deliver to each Employee, certificates evidencing the shares
of Common Stock that an Employee has purchased (or a book entry representing
such shares shall be made and the shares deposited with the appropriate
registered book-entry custodian). Any amount that has been deducted representing
a fractional share shall be applied toward the purchase of option shares in the
next Purchase Period. An Employee who does not elect to participate in the
following Purchase Period shall receive a check from the Corporation for any
amount that has been deducted and represents a fractional share. Any payroll
deductions that exceed the limits set forth in Sections 2.1(b) and 2.4 shall be
returned to the participant in the amount of the excess.

     (f) The Corporation retains the right to designate an exclusive broker to
handle the Common Stock transactions under the Plan. As soon as practicable
after the end of the Purchase Period, the Corporation shall deliver to each
Employee or a designated brokerage account, through a certificate or electronic
transfer, the shares of Common Stock that such Employee has purchased. Unless
otherwise determined by the Committee, any amount that has been deducted and
withheld in excess of the option price automatically shall be paid by check to
the participating Employee promptly following the end of the Purchase Period in
which withheld.

     (g) Unless otherwise determined by the Committee, no interest shall accrue
or be paid on any amounts paid by payroll deduction by any participating
Employee.

     2.4 Participation Limitations. Notwithstanding any other provision of the
Plan, no Employee shall be eligible to participate in an Offer under the Plan
if:

     (a) the Employee, immediately after such grant, would, in the aggregate,
own and/or hold shares of Common Stock (including all shares which may be
purchased under outstanding options, whether or not such options qualify for the
special tax treatment afforded by Section 421(a) of the Code) equal to or
exceeding five percent (5%) or more of the total combined voting power or value
of all classes of capital stock of the Corporation or of its Subsidiaries; for
purposes of this limitation, the rules of section 424(d) of the Code and the
regulations promulgated thereunder (relating to attribution of stock ownership)
shall apply; or

     (b) such grant would permit, under the rules set forth in Section 423 of
the Code and the regulations promulgated thereunder, the Employee's right to
purchase stock under this Plan and all other Code Section 423 employee stock
purchase plans maintained by the Corporation and its Subsidiaries to accrue at a
rate in excess of $25,000 in Fair Market Value of such stock (determined at the
time such option is granted) for each calendar year in which such option is
outstanding at any time.

     2.5 Termination of Employment. If a participating Employee ceases to be
employed by the Corporation or a Subsidiary for any reason, including but not
limited to, voluntary or forced resignation,

<PAGE>

retirement, death, disability or lay-off, the Corporation, within a reasonable
time after notice of the termination, shall issue a check to the former Employee
(or executor, administrator or legal representative, if applicable) in the
aggregate amount of the Employee's payroll deductions that had not been applied
towards the purchase of option shares as of the date of termination.

     2.6 Restrictions on Transfer. Unless otherwise permitted by the Committee,
no shares of Common Stock purchased under the Plan shall be sold, exchanged,
transferred, pledged, assigned or otherwise disposed of for six (6) months
following the close of the Purchase Period in which acquired.

     III. MISCELLANEOUS

     3.1 Non Assignability. No option shall be transferable by a participating
Employee, and an option may be exercised during a participating Employee's
lifetime only by the Employee. Upon the death of a participating Employee, his
or her executor, administrator or other legal representative shall receive a
check from the Corporation representing the aggregate amount of the deceased
Employee's payroll deductions that had not been applied towards the purchase of
option shares as of the date of death.

     3.2 Adjustments. In the event of a merger, reorganization, consolidation,
recapitalization, dividend or distribution (whether in cash, shares or other
property), stock split, reverse stock split, spin-off or similar transaction or
other change in corporate structure affecting the Common Stock or the value
thereof, such adjustments and other substitutions shall be made to the Plan and
Options as the Committee, in its sole discretion, deems equitable or
appropriate, including adjustments in the aggregate number, class and kind of
securities that may be delivered under the Plan and; in the aggregate or to any
one Participant, in the number, class, kind and option price of securities
subject to outstanding options under the Plan (including, if the Committee deems
appropriate, the substitution of similar options to purchase the shares of
another company, as the Committee may determine to be appropriate in its sole
discretion). Any of the foregoing adjustments may provide for the elimination of
any fractional share which might otherwise become subject to any option.

     3.3 Change in Control.

          (a) After any merger of one or more corporations into the Corporation
in which the Corporation shall be the surviving corporation or any share
exchange in which the Corporation is a constituent corporation, each participant
shall, at no additional cost, be entitled upon the exercise of an option, to
receive (subject to any required action by shareholders), in lieu of the number
of shares of Common Stock for which such option shall then be exercisable, the
consideration which such participant would have been entitled to receive
pursuant to the terms of the agreement of merger or share exchange if at the
time of such merger or share exchange such participant had been a holder of
record of a number of shares of Common Stock equal to the number of shares then
underlying the option.

          (b) In addition, in the event of a Change in Control, the Committee
shall have the right to terminate the Purchase Period as of such date, and, if
so terminated, each participant shall be deemed to have exercised, immediately
prior to such merger, share exchange, acquisition or sale of assets, his or her
option to the extent payroll deductions were made prior thereto. Comparable
rights shall accrue to each participant in the event of successive Changes in
Control.

<PAGE>

          (c) Notwithstanding anything contained herein to the contrary, upon
the dissolution or liquidation of the Corporation or upon any merger or share
exchange in which the Corporation is not the surviving corporation (other than a
merger with a wholly-owned subsidiary of the Corporation formed for the purpose
of changing the Corporation's corporate domicile where the Plan is assumed by
the survivor), the Purchase Period for any option granted under this Plan shall
terminate as of the date of the aforementioned event, and each participant shall
be deemed to have exercised, immediately prior to such dissolution, liquidation,
merger or share exchange, his or her option to the extent payroll deductions
were made prior thereto.

          (d) The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its sole
discretion. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to an option.

     3.4 Termination and Amendment.

     (a) The Board may terminate the Plan, or the granting of options under the
Plan, at any time. No option shall be granted under the Plan after the sixth
(6th) anniversary of the adoption of the Plan by the Board.

     (b) The Board may amend or modify the Plan at any time and from time to
time, but no amendment or modification shall disqualify the Plan under Section
423 of the Code or Rule 16b-3 under the Exchange Act without the approval of the
shareholders of the Corporation.

     (c) No amendment, modification, or termination of the Plan shall adversely
affect any option granted under the Plan without the consent of the Employee
holding the option.

     3.5 Rights Prior to Issuance of Shares. No participating Employee shall
have any rights as a shareholder with respect to shares covered by an option
until the issuance of a stock certificate or electronic transfer to the Employee
(or book entry representing such shares has been made and such shares have been
deposited with the appropriate registered book-entry custodian). No adjustment
shall be made for dividends or other rights with respect to such shares for
which the record date is prior to the date when the certificate is issued or the
shares electronically delivered to the Employee's brokerage account.

     3.6 Securities Laws.

         (a) Anything to the contrary herein notwithstanding, the Corporation's
obligation to sell and deliver Common Stock pursuant to the exercise of an
option is subject to such compliance with federal and state laws, rules and
regulations applying to the authorization, issuance or sale of securities as the
Corporation deems necessary or advisable. The Corporation shall not be required
to sell and deliver or issue Common Stock unless and until it receives
satisfactory assurance that the issuance or transfer of such shares shall not
violate any of the provisions of the Securities Act of 1933 or the Exchange Act,
or the rules and regulations of the Securities Exchange Commission promulgated
thereunder or those of any stock exchange on which the stock may be listed and
the provisions of any state laws governing the sale of securities, or that there
has been compliance with the provisions of such acts, rules, regulations and
laws.

<PAGE>

     (b) The Board may impose such restrictions on any shares of Common Stock
acquired pursuant to the exercise of an option under the Plan as it may deem
advisable, including, without limitation, restrictions (i) under applicable
federal securities laws, (ii) under the requirements of a Stock Exchange or
other recognized trading market upon which such shares of Common Stock are then
listed or traded, and (iii) under any blue sky or state securities laws
applicable to such shares. No shares shall be issued until counsel for the
Corporation has determined that the Corporation has complied with all
requirements under appropriate securities laws.

     3.7 Delivery of Plan. Each Employee who is a participant in the Plan shall
have delivered to him or her a copy of the Plan.

     3.8 Effect on Employment. Neither the adoption of the Plan nor the granting
of an option pursuant to it shall be deemed to create any right in any
individual to be retained or continued in the employment of the Corporation.

     3.9 Certificates. If certificates are issued, the Corporation shall have
the right to retain such certificates representing shares of Common Stock issued
pursuant to the Plan until such time as all conditions and/or restrictions
applicable to such shares of Common Stock have been satisfied.

     3.10 Use of Proceeds. The proceeds received from the sale of Common Stock
pursuant to the Plan shall be used for general corporate purposes of the
Corporation.

     3.11 Approval of Plan. The Plan shall be subject to the approval of the
holders of at least a majority of the Common Stock of the Company present and
entitled to vote at a meeting of shareholders of the Company held within twelve
(12) months after adoption of the Plan by the Board. If not approved by
shareholders within such 12-month period, the Plan and any options granted
hereunder shall become void and of no effect.

     3.12 Governing Law. This Plan shall be governed by and construed under the
laws of the State of Michigan without regard to its conflict of law provisions.

     This ITC Holdings Corp. Employee Stock Purchase Plan has been executed on
behalf of the Corporation on this the 8th day of February, 2006.

ITC HOLDINGS CORP.

By: /s/ Linda Blair
    ------------------------------------
Its: /s/ Senior VP Business Strategy

BOARD APPROVAL: 02/08/06

SHAREHOLDER APPROVAL: __/ __/06

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