Capital One 2009 Annual Report Download - page 159

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The weighted-average grant date fair value of restricted stock granted for the years 2009, 2008 and 2007 was $17.58, $49.33 and
$64.63, respectively. The total fair value of restricted stock vesting during the years 2009, 2008 and 2007 was $41.3 million, $33.8
million and $79.6 million, respectively. At December 31, 2009 there was unrecognized compensation cost for unvested restricted
awards of $59.1 million. That cost is expected to be recognized over the next 3 years.
Cash equity units vesting during the years ended December 31, 2009, 2008, and 2007 resulted in cash payments to associates of $10.1
million, $30.1 million, and $30.1 million, respectively. These cash payments reflect the number of units vesting priced at the
Company’s stock price as of the vest date. At December 31, 2009 there was unrecognized compensation cost for unvested cash equity
units of $62.5 million, based on the average quarterly stock price. That cost is expected to be recognized over the next 3 years.
2010 CEO Grant
In January 2010, the Company’s Board of Directors approved a compensation package for the Company’s CEO. This package
included an opportunity to receive from 0% to 200% of the target number of 88,920 shares of the Company’s common stock based on
the Company’s performance over the three-year period beginning on January 1, 2010. The package also included a grant of 559,333
nonstatutory stock options at an exercise price of $36.55 per share. The options will become fully exercisable on January 27, 2013.
Upon retirement, these awards will continue to vest in accordance with the original vesting schedule. Compensation expense of $9.8
million related to these awards will be recognized in 2010. In addition, the package included an opportunity to be awarded restricted
stock units in late 2010 or early 2011 based on actual performance in 2010. Any such award will vest in full in three years and settle in
cash based on the Company’s average stock price over the twenty trading days preceding the vesting date.
2009 CEO Grant
In January 2009, the Company’s Board of Directors approved a compensation package for the Company’s CEO. This package
included an opportunity to receive from 0% to 200% of the target number of 95,239 shares of the Company’s common stock based on
the Company’s performance over the three-year period from January 1, 2009 through December 31, 2011. The package also included
a grant of 970,403 nonstatutory stock options at an exercise price of $18.28 per share. The options will become fully exercisable on
January 29, 2012. Both awards are subject to restrictions regarding sale or transfer of the shares received until the earlier of the date on
which the U.S. Treasury no longer holds any shares of the preferred stock that the Company issued under the U.S. Treasury’s
Troubled Asset Relief Program Capital Purchase Program (“CPP”) or one year after retirement from the Company. Compensation
expense of $6.0 million related to these awards was recognized in 2009.
In 2010, the Company’s Board of Directors also approved a grant of 136,799 restricted stock units in relation to the 2009
compensation package for the Company’s CEO. The award will vest in full in three years and settle in cash based on the Company’s
average stock price over the twenty trading days preceding the vesting date. The compensation expense of $5.0 million related to these
awards will be recognized in 2010.
2008 CEO Grant
In December 2007, the Company’s Board of Directors approved a compensation package for the Company’s CEO. This package
included 1,661,780 stock options which will vest upon the third anniversary date of the grant or upon departure from employment with
Capital One for reasons other than retirement. Upon retirement, these options will continue to vest in accordance with the original
vesting schedule. Compensation expense of $17.0 million for these options was recorded in 2007.
Accelerated Vesting Option Grants
Associate Stock Purchase Plan
The Company maintains an Associate Stock Purchase Plan (the “Purchase Plan”). The Purchase Plan is a compensatory plan under
ASC 718/SFAS 123(R); accordingly the Company recognized $3.7 million, $4.3 million and $5.2 million in compensation expense
for the years ended December 31, 2009, 2008 and 2007, respectively.
Under the Purchase Plan, associates of the Company are eligible to purchase common stock through monthly salary deductions of a
maximum of 15% and a minimum of 1% of monthly base pay. To date, the amounts deducted are applied to the purchase of unissued
common or treasury stock of the Company at 85% of the current market price. Shares may also be acquired on the market. An
aggregate of 8.0 million common shares has been authorized for issuance under the 2002 Associate Stock Purchase Plan, of which
3.4 million and 4.6 million shares were available for issuance as of December 31, 2009 and 2008, respectively.