Capital One 2000 Annual Report Download - page 57

Under the 1994 Stock Incentive Plan, the Company has
reserved 45,112,640 common shares as of December 31, 2000, 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 date equals
or exceeds the market price of the Company's stock on the date of
grant. Each option's maximum term is ten years. The number of
shares available for future grants was 1,221,281, 2,191,884 and
2,178,669 as of December 31, 2000, 1999 and 1998, respectively.
Other than the performance-based options discussed below,
options generally vest annually or on a fixed date over three years
and expire beginning November 2004.
In April 1999, the Company established the 1999 Stock Incen-
tive Plan. Under the plan, the Company has reserved 600,000
common shares for issuance in the form of nonstatutory stock
options. The exercise price of each stock option equals or exceeds
the market price of the Company's stock on the date of grant. The
maximum term of each option is ten years. As of December 31,
2000 and 1999, the number of shares available for future grant
was 294,800 and 283,800, respectively. All options granted under
the plan to date were granted on April 29, 1999, and expire on April
29, 2009. These options vested immediately upon the optionee's
execution of an intellectual property protection agreement with the
Company.
In May 2000, the Company’s Board of Directors approved a
special stock option grant to certain members of the Company’s
management. This grant was composed of 1,690,380 options to
all managers, excluding the Company’s Chief Executive Officer and
Chief Operating Officer, at the fair market value on the date of grant.
All options under this grant will vest ratably over three years.
In April 1999, the Company's Board of Directors approved a
stock option grant to senior management ("EntrepreneurGrant IV").
This grant was composed of 7,636,107 options to certain key man-
agers (including 1,884,435 options to the Company's Chief
Executive Officer ["CEO"] and Chief Operating Officer ["COO"]) with
an exercise price equal to the fair market value on the date of grant.
The CEO and COO gave up their salaries for the year 2001 and their
annual cash incentives, annual option grants and Senior Executive
Retirement Plan contributions for the years 2000 and 2001 in
exchange for their EntrepreneurGrant IV options. Other members of
senior management gave up all potential annual stock option grants
for 1999 and 2000 in exchange for this one-time grant. All options
under this grant will vest on April 29, 2008, or earlier if the common
stock's fair market value is at or above $100 per share for at least
ten trading days in any thirty consecutive calendar day period on or
before June 15, 2002, or upon a change of control of the Company.
These options will expire on April 29, 2009.
In June 1998, the Company's Board of Directors approved a
grant to executive officers ("EntrepreneurGrant III"). This grant con-
sisted of 2,611,896 performance-based options granted to certain
key managers (including 2,000,040 options to the Company's CEO
and COO), which were approved by the stockholders in April 1999,
at the then market price of $33.77 per share. The Company's CEO
and COO gave up 300,000 and 200,010 vested options (valued at
$8,760 in total), respectively, in exchange for their Entrepreneur-
Grant III options. Other executive officers gave up future cash
compensation for each of the next three years in exchange for the
options. These options vested in September 2000 when the mar-
ket price of the Company's stock remained at or above $58.33 for
at least ten trading days in a thirty consecutive calendar day period.
In April 1998, upon stockholder approval, a 1997 stock option
grant to senior management ("EntrepreneurGrant II") became effec-
tive at the December 18, 1997 market price of $16.25 per share.
This grant included 3,429,663 performance-based options granted
to certain key managers (including 2,057,265 options to the Com-
pany's CEO and COO), which vested in April 1998 when the market
price of the Company's stock remained at or above $28.00 for at
least ten trading days in a thirty consecutive calendar day period.
The grant also included 671,700 options that vested in full on
December 18, 2000.
In April 1999 and 1998, the Company granted 1,045,362 and
1,335,252 options, respectively, to all associates not granted
options in the EntrepreneurGrant II or EntrepreneurGrant IV. Certain
associates were granted options in exchange for giving up future
compensation. Other associates were granted a set number of
options. These options were granted at the then market price of
$56.46 and $31.71 per share, respectively, and vest, in full, on April
29, 2002, and April 30, 2001, respectively, or immediately upon a
change in control of the Company.
The Company maintains two non-associate directors stock
incentive plans, the 1995 Non-Employee Directors Stock Incentive
Plan and the 1999 Non-Employee Directors Stock Incentive Plan.
The 1995 plan originally authorized 1,500,000 shares of the Com-
pany's common stock for the automatic grant of restricted stock
and stock options to eligible members of the Company's Board of
Directors. However, in April 1999, the Company terminated the
1995 plan. The options vest after one year and their maximum term
is ten years. The exercise price of each option equals the market
price of the Company's stock on the date of grant. As of December
31, 2000, there was no outstanding restricted stock under this plan.
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