Capital One 2014 Annual Report Download - page 236

NOTE 15—STOCK-BASED COMPENSATION PLANS
Stock Plans
We have one active stock-based compensation plan available for the issuance of shares to employees, directors and
third-party service providers (if applicable). As of December 31, 2014, under the Amended and Restated 2004 Stock
Incentive plan (the “2004 Plan”), we are authorized to issue 55 million common shares in various forms, including
incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards (“RSAs”),
share-settled restricted stock units (“RSUs”), performance share awards (“PSA”), and performance share units
(“PSU”). Of this amount, 22 million shares remain available for future issuance as of December 31, 2014. The 2004
Plan permits the use of newly issued shares or treasury shares upon the settlement of options and stock-based
incentive awards, and we generally settle by issuing new shares.
We also issue cash-settled restricted stock units (and in the past issued cash equity units). These cash-settled units
are not counted against the common shares authorized for issuance or available for issuance under the 2004 Plan.
Total compensation expense recognized for stock-based compensation for 2014, 2013 and 2012 was $205 million,
$240 million and $202 million, respectively. The total income tax benefit recognized in the consolidated statements
of income for stock-based compensation for 2014, 2013 and 2012 was $77 million, $91 million and $77 million,
respectively.
Stock Options
Stock options have a maximum contractual term of ten years. Generally, the exercise price of stock options will
equal the fair market value of our common stock on the date of grant. Option vesting is determined at the time of
grant and may be subject to the achievement of any applicable performance conditions. Options generally become
exercisable over three years beginning on the first anniversary of the date of grant, however some option grants cliff-
vest on or shortly after the first or third anniversary of the grant date.
The following table presents a summary of 2014 activity for stock options and the balance of stock options
exercisable as of December 31, 2014.
Table 15.1: Summary of Stock Options Activity
Weighted-
Weighted- Average
Shares Average Remaining Aggregate
Subject to Exercise Contractual Intrinsic
(Shares in thousands, and intrinsic value in millions) Options Price Term Value
Outstanding as of January 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . 12,251 $ 57.41
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532 71.93
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,924) 67.86
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (308) 69.69
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13) 66.11
Outstanding as of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . 10,538 $ 55.87 4.0 years $ 289
Exercisable as of December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . 9,013 $ 55.49 3.3 years $ 252
The weighted-average fair value of each option granted for 2014, 2013 and 2012 was $16.39, $13.42 and $12.25,
respectively. The total intrinsic value of stock options exercised during 2014, 2013 and 2012 was $24 million, $47
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CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Capital One Financial Corporation (COF)