8-KMaterial AgreementsRegulation FDExhibits & Filings

CAPITAL ONE FINANCIAL CORP 8-K Report, Material Agreement (Dec 23, 2004)

Filed December 23, 2004For Securities:COFCOF-PLCOF-PICOF-PKCOF-PNCOF-PJ

Summary

This Form 8-K filing from Capital One Financial Corporation (COF) on December 23, 2004, primarily discloses the compensation package approved for its Chairman, CEO, and President, Richard D. Fairbank, for the year 2005. In lieu of salary, incentives, and retirement contributions, Mr. Fairbank was granted nonstatutory stock options to purchase 566,000 shares of common stock. The stock options have an exercise price of $82.385, reflecting the fair market value at the grant date. A key aspect of this compensation is its long-term performance orientation, with options becoming exercisable in full only on the fifth anniversary of the grant date, or earlier upon specific events like death, disability, retirement, or a change in control of the company. This structure aims to further align Mr. Fairbank's interests with those of the shareholders and to ensure the retention of a key executive.

Key Highlights

  • 1Richard D. Fairbank, CEO, granted 566,000 nonstatutory stock options for 2005 compensation.
  • 2The stock options replace salary, annual cash incentive, other long-term incentives, and retirement plan contributions for 2005.
  • 3The exercise price of the options is $82.385, equal to the fair market value on the grant date.
  • 4Options are fully exercisable only on the fifth anniversary of the grant date.
  • 5Early exercisability is triggered by death, disability, retirement, or a change in control.
  • 6The compensation structure emphasizes long-term value creation and executive retention.
  • 7Options are granted under the company's 2004 Stock Incentive Plan.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose the 2005 annual compensation package for Capital One's Chairman, CEO, and President, Richard D. Fairbank, which primarily consists of a significant stock option grant.

In 2005, Mr. Fairbank received a grant of 566,000 nonstatutory stock options to purchase Capital One common stock, in place of any salary, annual cash incentive, other cash or equity-based long-term incentives, and retirement plan contributions.

The stock options are structured for long-term alignment. They become exercisable in full on the fifth anniversary of the grant date. However, they can become fully exercisable earlier upon the occurrence of Mr. Fairbank's death, disability, retirement, or a change in control of the company.

The exercise price for the stock options is $82.385, which was the fair market value of Capital One's common stock on the date the options were granted.