Capital One 2011 Annual Report Download - page 235

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED STATEMENTS—(Continued)
A summary of 2011 activity for performance share units is presented below:
Shares
(in thousands)
Weighted-
Average
Grant Date
Fair Value
Unvested as of January 1, 2011 ........................................... 698 $37.49
Granted (1) ............................................................ 308 52.10
Vested (1) ............................................................. (457) 55.41
Forfeited and expired ................................................... (3) 21.00
Unvested as of December 31, 2011 ........................................ 546 $30.83
(1) Includes adjustments for achievement of specific performance goals for performance share units granted in prior periods.
The weighted-average grant date fair value of performance share units granted for 2011, 2010 and 2009 was
$52.10, $36.55 and $21.00, respectively. The total fair value of performance share units vesting was $22 million
in 2011; no performance share units vested in prior years. We expect to recognize the unrecognized
compensation cost for unvested performance share units of $3 million as of December 31, 2011 over the next
three years.
Cash Equity Units and Cash-Settled Restricted Stock Units
We also issue cash equity units and cash-settled restricted stock units which are recorded as liabilities as the
expense is recognized. Cash equity units and cash-settled restricted stock units are settled with a cash payment
for each unit vested equal to the average fair market value of our common stock for the 20 trading days preceding
the vesting date or the closing price on the vesting date. Cash equity units and cash-settled restricted stock units
are settled with cash and therefore are not included in common shares reserved for issuance or available for
issuance under the 2004 Plan. For cash equity units and cash-settled restricted stock units granted before 2010,
the vesting was primarily 25 percent on the first and second anniversaries of the grant date and 50 percent on the
third anniversary date. For cash equity units and cash-settled restricted stock units granted in 2010 and 2011,
vesting is primarily 33 1/3 percent per year beginning with the first anniversary of the grant date.
Cash equity units and cash-settled restricted stock units vesting in 2011, 2010 and 2009 resulted in cash
payments to associates of $81 million, $48 million, and $10 million, respectively. We expect to recognize the
unrecognized compensation cost for unvested cash equity units of $38 million as of December 31, 2011, based on
the closing price of our common stock as of that date, over the next 3 years.
Associate Stock Purchase Plan
We maintain an Associate Stock Purchase Plan (the “Purchase Plan”) which is a compensatory plan under the
accounting guidance for stock-based compensation. We recognized $6 million for the year ended December 31,
2011 and $4 million in compensation expense for each of the years ended December 31, 2010 and 2009 under the
Purchase Plan.
Under the Purchase Plan, our associates 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 our unissued common or treasury stock at 85% of the current market price. Shares may
also be acquired on the market. An aggregate of 8.0 million shares of common stock have been authorized for
issuance under the Purchase Plan, of which 1.8 million and 2.6 million shares were available for issuance as of
December 31, 2011 and 2010, respectively.
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