In March 2013 the Corporation granted 807,600 options to purchase common shares under its 2012 Stock Option Plan ("2012 Plan") at the five-day volume weighted average trading price immediately preceding the date of grant of $33.58. The options granted under the 2012 Plan are exercisable for a period not to exceed ten years from the date of grant, expire no later than three years after the termination, death or retirement of the optionee and vest evenly over a four-year period on each anniversary of the date of grant. Directors are not eligible to receive grants of options under the 2012 Plan. The fair value of each option granted was $3.91 per option.
The fair value was estimated at the date of grant using the Black-Scholes fair value option-pricing model and the following assumptions:
Dividend yield (%) 3.78Expected volatility (%) 21.4Risk-free interest rate (%) 1.31Weighted average expected life (years) 5.3
For the three months ended March 31, 2013, stock-based compensation expense of approximately $1 million was recognized ($1 million for the three months ended March 31, 2012).
7. EMPLOYEE FUTURE BENEFITS
The Corporation and its subsidiaries each maintain one or a combination of defined benefit pension plans and defined contribution pension plans, including group registered retirement savings plans, for employees. The Corporation and certain subsidiaries also offer OPEB plans for qualifying employees. The net benefit cost of providing the defined benefit pension and OPEB plans is detailed in the following tables.
Quarter Ended March 31 Defined Benefit Pension Plans OPEB Plans($ millions) 2013 2012 2013 2012----------------------------------------------------------------------------Components of net benefit cost:Service costs 8 7 2 2Interest costs 12 12 3 3Expected return on plan assets (13) (12) - -Amortization of actuarial losses 7 6 2 1Amortization of past service credits/plan amendments - - (1) (1)Regulatory adjustments (3) (1) - 1----------------------------------------------------------------------------Net benefit cost 11 12 6 6--------------------------------------------------------------------------------------------------------------------------------------------------------
For the three months ended March 31, 2013, the Corporation expensed $4 million ($4 million for the three months ended March 31, 2012) related to defined contribution pension plans.
8. OTHER INCOME (EXPENSES), NET
Quarter Ended March 31($ millions) 2013 2012----------------------------------------------------------------------------Equity component of allowance for funds used during construction ("AFUDC") 3 2Net foreign exchange gain (loss) 2 (2)Interest income 1 1Acquisition-related expenses - (4)---------------------------------------------------------------------------- 6 (3)--------------------------------------------------------------------------------------------------------------------------------------------------------
