Summary
Capital One Financial Corporation (COF) filed an 8-K report on July 26, 2001, to disclose amendments to its previously approved "EntrepreneurGrant IV" stock option program. This program, originally granted in April 1999 to senior management, involved over 7.6 million stock options with an exercise price equal to the fair market value at the grant date. The amendments were made in response to recent market conditions, aiming to enhance executive retention and motivation without significant cost or dilution to shareholders. The primary adjustments focus on modifying the performance-based vesting criteria. While the original grant had a hurdle tied to a 20% average stock price increase over three years, the amended terms introduce new, slightly higher stock price targets for earlier vesting in 2003 and 2004. Additionally, a portion of the options held by middle management will now vest on a fixed date in 2005, irrespective of stock price performance. These changes reflect Capital One's commitment to its core compensation principles.
Key Highlights
- 1Amendment to "EntrepreneurGrant IV" stock option program impacting over 7.6 million options.
- 2Original grant was to senior management with exercise price at fair market value on grant date.
- 3Amendments are aimed at improving executive retention and motivation amidst market conditions.
- 4New vesting criteria introduced, including higher stock price targets for 2003 and 2004.
- 5A portion of options held by middle management will now vest on April 29, 2005, regardless of stock price.
- 6The company asserts these changes will not result in significant cost or additional dilution to shareholders.
- 7The exercise price of the stock options remains unchanged.