Capital One 2012 Annual Report Download - page 244

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
for each unit vested equal to the average fair market value of our common stock for the 20 trading days preceding
the vesting date. Cash equity units and cash-settled restricted stock units are settled in cash and therefore are not
counted against the common shares reserved for issuance or available for issuance under the 2004 Plan. The
vesting for most cash equity units and cash-settled restricted stock units is 33 1/3 percent per year beginning with
the first anniversary of the grant date, subject to the achievement of any performance conditions.
Cash equity units and cash-settled restricted stock units vesting during 2012, 2011 and 2010 resulted in cash
payments to associates of $88 million, $81 million, and $48 million, respectively. We expect to recognize the
unrecognized compensation cost for unvested cash equity units of $50 million as of December 31, 2012, based on
the closing price of our common stock as of that date, within 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 $8 million, $6 million and $4 million in
compensation expense for 2012, 2011 and 2010, respectively under the Purchase Plan.
Under the Purchase Plan, our associates are eligible to contribute between 1% and 15% of their base salary
through payroll deductions. The amounts contributed 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 open market. In 2012,
shareholders authorized an additional 10.0 million shares to be added to the previously authorized total of
8.0 million shares available for issuance under the Purchase Plan. Of the total authorized shares of 18.0 million,
as of December 31, 2012, 10.7 million shares were available for issuance on December 31, 2012. Of the total
authorized shares of 8.0 million as of December 31, 2011, 1.8 million shares were available for issuance as of
December 31, 2011.
Dividend Reinvestment and Stock Purchase Plan
In 2002, we implemented our Dividend Reinvestment and Stock Purchase Plan (“2002 DRP”), which allows
participating stockholders to purchase additional shares of our common stock through automatic reinvestment of
dividends or optional cash investments. We had 7.4 million shares available for issuance under the 2002 DRP at
both December 31, 2012 and 2011, respectively.
NOTE 17—EMPLOYEE BENEFIT PLANS
Defined Contribution Plan
We sponsor a contributory Associate Savings Plan (the “Plan”) in which all full-time and part-time associates over
the age of 18 are eligible to participate. We make non-elective contributions to each eligible associate’s account and
match a portion of associate contributions. In connection with the February 17, 2012 acquisition of ING Direct, we
became the fiduciary for the ING Direct 401(k) Savings Plan and the ING Direct Pension Plan (the “ING Plans”).
The assets of the ING Plans were merged into the Plan in January 2013. All participants of the ING Plans became
eligible to participate in the Plan effective January 1, 2013. In addition, upon closing of the 2012 U.S. card
acquisition, certain HSBC associates became eligible to participate in the Plan effective May 1, 2012.
We also sponsor a voluntary non-qualified deferred compensation plan in which select groups of employees are
eligible to participate. We make contributions to this plan based on participants’ deferral of salary, bonuses and
other eligible pay. In addition, we match participants’ excess compensation (compensation over the Internal
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