FALLS CHURCH, Va., Oct 24, 2001 /PRNewswire via COMTEX/ -- Capital One
Financial Corporation (NYSE: COF) today announced it expects earnings per share
for the year ending December 31, 2002, to increase by 20 percent over 2001. This
is in line with the company's long-term objective of 20 percent annual earnings
per share growth.
"Despite the current economic uncertainty, we expect to achieve our 20 percent
earnings per share target in 2002," said Richard D. Fairbank, Capital One's
Chairman and Chief Executive Officer, in announcing this 2002 goal. "We have met
or surpassed this target every year since our IPO in 1994, and expect we can do
so in 2002."
In addition, Capital One today announced that its Board of Directors has
approved an entrepreneurial compensation program for its senior executives. This
special stock option program, known as an EntrepreneurGrant, reflects the
company's continued commitment to aligning the interests of senior management
with that of its stockholders and retaining the executive talent that has made
the company successful. With this latest EntrepreneurGrant program, the fifth of
its kind, Fairbank and Nigel W. Morris, Capital One's President and Chief
Operating Officer, have agreed to give up all salary, annual cash incentive,
annual option grants and retirement plan contributions for the years 2002 and
2003 in exchange for a one-time grant to Fairbank of options to purchase
3,456,000 shares and to Morris of options to purchase 2,304,000 shares of the
company's common stock.
As part of this EntrepreneurGrant, 2,121,000 of Fairbank's stock options and
1,414,000 of Morris' stock options will be performance-based and the remaining
stock options will vest annually in equal installments over the next three
years, or earlier upon a change in control of Capital One. The performance-based
stock options will vest if Capital One's common stock price reaches $83.87(1) by
October 18, 2004, $100.64(1) by October 18, 2005, $120.77(1) by October 18, 2006
or $144.92(1) by October 18, 2007. Each Target represents 20 percent annual
compounded stock price appreciation from October 18, 2001.
These stock options will also vest if Capital One attains cumulative earnings
per share of $5.03 over four consecutive quarters by the end of 2004,
representing 20 percent annual compounded earnings per share growth from the
company's projected earnings per share of $2.91 for the year ending December 31,
2001. In any case, the performance-based stock options will vest on October 18,
2007, or earlier upon a change of control. Capital One will not incur any
compensation expense in connection with either the performance-based or
time-based stock options.
Capital One's other senior executives (excluding Fairbank and Morris) will have
the opportunity to forego up to 50 percent of their expected annual cash
incentives for 2002 through 2004 in exchange for performance-based stock options
with the same terms as those described above. The purchase price for all of the
shares under these options will be $48.535, based on the average of the high and
low sales prices of Capital One's common stock on October 18, 2001. Eligible
executives will have until December 7, 2001 to elect to participate in the
The company cautioned that its current expectations for 2002 earnings are
forward-looking statements and actual results could differ materially from
current expectations due to a number of factors including: competition in the
credit card industry; the company's ability to access the capital markets at
attractive rates and terms to fund its operations and future growth; any
significant disruption of, or loss of public confidence in, the U.S. mail
affecting response rates or customer payments; and general economic conditions
affecting consumer income, spending, consumer bankruptcies, defaults and
charge-offs. A discussion of these and other factors can be found in Capital
One's annual reports and reports filed with the Securities and Exchange
Commission, including, but not limited to, the company's report on Form 10-K for
the year ended December 31, 2000.
Headquartered in Falls Church, Virginia, Capital One Financial Corporation
(http://www.CapitalOne.com ) is a holding company whose principal subsidiaries,
Capital One Bank and Capital One, F.S.B., offer consumer lending and deposit
products. Capital One's subsidiaries collectively had 40.1 million customers and
$38.5 billion in managed loans outstanding as of September 30, 2001, and are
among the largest providers of MasterCard and Visa credit cards in the world.
Capital One trades on the New York Stock Exchange under the symbol "COF" and is
included in the S&P 500 Index.
(1) Vesting requires the common stock to reach or exceed the vesting price for 5
trading days prior to the target vesting date
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SOURCE Capital One Financial Corporation
CONTACT: Paul Paquin, VP, Investor Relations, +1-703-205-1039 or Tatiana
Stead, Media Relations, +1-703-205-1070, both of Capital One Financial
Copyright (C) 2001 PR Newswire. All rights reserved.