Capital One 1999 Annual Report Download - page 56

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The amount of securities registered is limited to a $1,550,000
aggregate public offering price or its equivalent (based on the
applicable exchange rate at the time of sale) in one or more for-
eign currencies, currency units or composite currencies as shall
be designated by the Corporation. At December 31, 1999, the
Corporation had existing unsecured senior debt outstanding
under the shelf registrations of $550,000 including $125,000
maturing in 2003, $225,000 maturing in 2006, and $200,000
maturing in 2008.
Interest-bearing deposits, other borrowings and senior
notes as of December 31, 1999, mature as follows:
Interest-bearing Other
Deposits Borrowings Senior Notes Total
2000 $ 2,122,572 $ 2,317,706 $ 765,716 $ 5,205,994
2001 574,853 263,021 899,136 1,737,010
2002 283,163 56,151 565,000 904,314
2003 266,803 46,459 949,874 1,263,136
2004 473,345 295,000 768,345
Thereafter 63,073 97,129 705,822 866,024
Total $ 3,783,809 $ 2,780,466 $ 4,180,548 $ 10,744,823
note f
ASSOCIATE BENEFIT AND STOCK PLANS
The Company sponsors a contributory Associate Savings Plan
in which substantially all full-time and certain part-time associ-
ates are eligible to participate. The Company makes contribu-
tions to each eligible employee’s account, matches a portion of
associate contributions and makes discretionary contributions
based upon the Company meeting a certain earnings per share
target. The Company’s contributions to this plan were $27,157,
$16,357 and $10,264 for the years ended December 31, 1999,
1998 and 1997, respectively.
The Company has five stock-based compensation plans.
The Company applies Accounting Principles Board Opinion
No. 25, “Accounting for Stock Issued to Employees” (“APB 25”)
and related Interpretations in accounting for its stock-based
compensation plans. In accordance with APB 25, no compen-
sation cost has been recognized for the Company’s fixed stock
options, since the exercise price of all options equals or exceeds
the market price of the underlying stock on the date of grant,
nor for the Associate Stock Purchase Plan (the “Purchase
Plan”), which is considered to be noncompensatory. For the
performance-based option grants discussed below, compensa-
tion cost is measured as the difference between the exercise
price and the target stock price required for vesting and is rec-
ognized over the estimated vesting period. The Company
recognized $44,542, $70,038 and $24,772 of compensation
cost relating to its associate stock plans for the years ended
December 31, 1999, 1998 and 1997, respectively.
On April 29, 1999, the Company’s Board of Directors
approved a three-for-one stock split of the common stock of the
Corporation. The stock split was effected through a 200 percent
stock distribution on June 1, 1999, to the stockholders of record
on May 20, 1999. Consistent with the terms of the Company’s
stock-based compensation plans, the number of shares subject
to the plans and the respective exercise prices have been
adjusted accordingly and are reflected herein for all periods
presented.
SFAS No. 123, “Accounting for Stock-Based Compensation”
(“SFAS 123”) requires, for companies electing to continue to fol-
low the recognition provisions of APB 25, pro forma information
regarding net income and earnings per share, as if the recogni-
tion provisions of SFAS 123 were adopted for stock options
granted subsequent to December 31, 1994. For purposes of pro
forma disclosure, the fair value of the options was estimated at
the date of grant using a Black-Scholes option-pricing model
with the weighted average assumptions described below and is
amortized to expense over the options’ vesting period.
Year Ended December 31, 1999 1998 1997
Assumptions
Dividend yield .24% .32% .82%
Volatility factors of
expected market
price of stock 45% 40% 40%
Risk-free interest rate 5.29% 5.44% 6.27%
Expected option lives
(in years) 5.4 5.2 4.5
Pro Forma Information
Net income $ 325,701 $ 287,637 $ 186,003
Basic earnings per share $ 1.65 $ 1.46 $ 0.94
Diluted earnings per share $ 1.55 $ 1.38 $ 0.92
Under the 1994 Stock Incentive Plan, the Company has
reserved 43,112,640 common shares as of December 31, 1999,
for issuance in the form of incentive stock options, nonstatutory
stock options, stock appreciation rights, restricted stock and
incentive stock. The exercise price of each stock option issued to