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SHARE-BASED COMPENSATION AND EMPLOYEE SHARE PURCHASE PLAN
 6 Months Ended
Jun. 30, 2020
Share-based Payment Arrangement [Abstract]  
SHARE-BASED COMPENSATION AND EMPLOYEE SHARE PURCHASE PLAN SHARE-BASED COMPENSATION AND EMPLOYEE SHARE PURCHASE PLAN
Long-Term Incentive Plans
In the first quarter of 2020, 288,239 PBUs and 223,082 SBUs were granted pursuant to our long-term incentive plans. Generally, each PBU and SBU granted is valued based on one share of Fortis common stock traded on the Toronto Stock Exchange, converted to U.S. dollars and settled only in cash. However, SBUs granted to the executives may settle in cash, 100% Fortis common stock, or 50% cash and 50% Fortis common stock depending on executives’ settlement elections and whether certain share ownership requirements are met. The awards are classified as liability awards and vest on the date specified in a particular grant agreement, provided the service and performance criteria, as applicable, are satisfied. The PBUs and SBUs earn dividend equivalents which are also re-measured and settled consistent with the target award at the end of the vesting period. The granted awards and related dividend equivalents have no shareholder rights.
The aggregate fair value of all outstanding PBUs and SBUs as of June 30, 2020 was $49 million and $27 million, respectively. At June 30, 2020, the total unrecognized compensation cost related to the PBUs and SBUs was $20 million and $13 million, respectively.
Employee Share Purchase Plan
We have an ESPP plan which enables ITC employees to purchase shares of Fortis common stock. Our cost of the plan is based on the value of our contribution, as additional compensation to a participating employee, equal to 10% of an employee’s contribution up to a maximum annual contribution of 1% of an employee’s base pay and an amount equal to
10% of all dividends paid on the Fortis shares allocated to an employee’s ESPP account. The cost of ITC Holdings’ contribution for each of the three and six months ended June 30, 2020 and 2019 was less than $1 million.