Exhibit 10.1

 

CAPITAL ONE FINANCIAL CORPORATION

2004 Stock Incentive Plan

Restricted Stock Unit Award Agreement

 

No. of Restricted Stock Units: Up to 355,410

 

THIS AGREEMENT, dated May 17, 2004, between CAPITAL ONE FINANCIAL CORPORATION, a
Delaware corporation (“Capital One”), and Richard D. Fairbank (“you”), is made
pursuant and subject to the provisions of Capital One’s 2004 Stock Incentive
Plan (the “Plan”). All terms used herein that are defined in the Plan shall have
the same meaning given them in the Plan unless they are otherwise defined
herein.

 

WHEREAS, Section 4 of the Capital One Financial Corporation 1994 Stock Incentive
Plan Incentive Stock Award Agreement, dated December 15, 2003, between Capital
One and you (the “Incentive Stock Agreement”) provides that in the event the
stockholders of Capital One authorize and approve a stock incentive plan
permitting the issuance of restricted stock units prior to March 31, 2007, then
the Incentive Stock Agreement will be cancelled and replaced by an award
agreement providing for the issuance of Restricted Stock Units;

 

WHEREAS, at Capital One’s Annual Meeting held on April 29, 2004, Capital One’s
stockholders authorized and approved the Plan; and

 

WHEREAS, Article 8 of the Plan provides for the award from time to time in the
discretion of the Capital One Board of Directors’ Compensation Committee (the
“Committee”) of Restricted Stock Units, the vesting and issuance of which may be
subject to certain service, performance or other conditions as determined by the
Committee;

 

W I T N E S S E T H :

 

1. Cancellation of Incentive Agreement. Capital One and you acknowledge that,
effective as of May [    ], 2004, the Incentive Stock Agreement shall be
cancelled, including all of Capital One’s and your rights and obligations
thereunder, pursuant to the terms and conditions thereof.

 

2. Grant of Units. Pursuant and subject to the terms and conditions set forth in
this Agreement and the Plan, Capital One hereby grants to you a target award of
236,940 Restricted Stock Units and a maximum award of 355,410 Restricted Stock
Units (the “Units”).

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3. Non-Transferability. Subject to the provisions of Section 4 hereof, the right
to receive some or all of the Units and the underlying Shares related thereto
shall not be assignable or transferable, or otherwise alienated, pledged,
hypothecated or otherwise encumbered, under any circumstances. Any purported or
attempted assignment, transfer, alienation, pledge, hypothecation or encumbrance
of such rights or of the Units or the underlying Shares related thereto prior to
their issuance to you shall be null and void and shall result in the immediate
forfeiture of such rights or Units (including the underlying Shares related
thereto) and cancellation of this Agreement.

 

4. Vesting and Settlement of Units.

 

(a) Vesting. Except as provided in subsections 4(b) and 4(c) below and subject
to Section 6 below, a number of the Units shall, to the extent not previously
vested or forfeited as provided herein, vest on March 31, 2007 (the “Vesting
Date”) as set forth in Appendix A hereto based upon Capital One’s fully diluted
earnings per share compound growth rate for the three-year period from January
1, 2004 through December 31, 2006 (the “Performance Period”), compared to the
fully diluted earnings per share compound growth rate of the companies listed on
Appendix B hereto during the Performance Period, as certified by the Committee
following the end of the Performance Period. With respect to any Units which
have vested on the Vesting Date, the underlying Shares related thereto shall be
issued to you, in settlement of such vested Units, on the first day of Capital
One’s taxable year immediately following the taxable year in which your
employment with Capital One is terminated for any reason (the “Settlement
Date”).

 

All Units (including your rights thereto and to the underlying Shares related
thereto) that do not vest on or before the Vesting Date, as provided in this
Section 4, to the extent not previously forfeited as provided herein, shall
immediately be forfeited as of such date.

 

(b) Effect of Termination of Employment. Except as otherwise provided in
subsections 4(b)(i) or 4(b)(ii) below, upon your termination of employment with
Capital One for any reason prior to the end of the Performance Period, all Units
(including your rights thereto and to the underlying Shares related thereto), to
the extent not previously vested as provided herein, shall immediately be
forfeited as of the date of such termination.

 

(i) If your employment with Capital One terminates due to your death or
Disability prior to the end of the Performance Period, then 236,940 Units will
immediately vest on the date of your death or Disability, as applicable, and,
subject to Section 6 below, the underlying Shares related thereto will be issued
to you, your estate, or the person or persons to whom the rights under this
Agreement shall have passed by will or the laws of descent or distribution, in
settlement of such vested Units, on the Settlement Date. The remaining unvested
Units (including your rights thereto and to the underlying Shares related
thereto) shall immediately be forfeited as of the date of your death or
Disability, as applicable;

 

(ii) If your employment with Capital One terminates due to your Retirement prior
to the end of the Performance Period, then the number of Units which will vest
on the Vesting Date will be equal to the product of (x) the number of Units that
would have vested had you remained employed until the end of the

 

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Performance Period, determined in accordance with Section 4(a) above, and (y) a
fraction, the numerator of which is the number of days from January 1, 2004
through the date of your Retirement and the denominator of which is 1095. The
remaining unvested Units (including your rights thereto and to the underlying
Shares related thereto) shall immediately be forfeited as of the Vesting Date.
All Units which vest pursuant to this Section 4(b)(ii) shall be settled, subject
to Section 6 below, in Shares issued to you on the Settlement Date.

 

For purposes of this Section 4, it shall not be considered a termination of
employment if you are placed by Capital One or any Subsidiary on military or
sick leave or such other type of leave of absence that the Committee in its sole
discretion considers as continuing the employment relationship intact.

 

(c) Effect of Change of Control. If a Change of Control of Capital One occurs
prior to the end of the Performance Period, then 236,940 Units shall, to the
extent not previously forfeited as provided herein, immediately vest and,
subject to Section 6 below, the underlying Shares related thereto will be issued
to you, in settlement of such vested Units, as soon as reasonably practicable
following the date of such Change of Control and the remaining unvested Units
(including your rights thereto and to the underlying Shares related thereto)
shall immediately be forfeited as of the date of such Change of Control.
Notwithstanding anything herein to the contrary, in the event a Change of
Control of Capital One occurs during the period commencing on the Vesting Date
and ending on the Settlement Date, subject to Section 6 below, the Shares
underlying such vested Units shall be issued to you, in settlement of such
vested Units, as soon as reasonably practicable following the date of such
Change of Control.

 

(d) Acceleration of Settlement. Notwithstanding anything herein to the contrary,
the Committee may accelerate the date of settlement of any Units granted
hereunder which have vested pursuant to Section 4(a) or 4(b) hereof.

 

5. Modification and Waiver. Except as provided in the Plan and this Agreement
with respect to determinations of the Board or the Committee and subject to the
Committee’s right to amend the Plan, neither this Agreement nor any provision
hereof can be changed, modified, amended, discharged, terminated or waived
orally or by any course of dealing or purported course of dealing, but only by
an agreement in writing signed by you and Capital One; provided, that changes,
modifications and amendments not detrimental to you may be made in writing
signed only by Capital One. No such agreement shall extend to or affect any
provision of this Agreement not expressly changed, modified, amended,
discharged, terminated or waived or impair any right consequent on such a
provision. The waiver of or failure to enforce any breach of this Agreement
shall not be deemed to be a waiver or acquiescence in any other breach thereof.

 

6. Tax Withholding. If you become subject to withholding under applicable tax
laws, you agree to pay Capital One the amount required to be withheld by one or
more of the following methods:

 

  (a) by cash or check payment;

 

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  (b) if the Units have vested and the underlying Shares related thereto have
been issued to you pursuant to Section 4 hereof, by instructing the Plan
administrator to sell that number of Shares having a Fair Market Value equal to
the amount required to be withheld and to deliver the proceeds thereof to
Capital One; or

 

  (c) by such other methods as Capital One may make available from time to time.

 

7. Changes in Capital Structure. In the event of changes in the capital
structure of Capital One or other corporate events or transactions, appropriate
adjustments in the number of the Units and the underlying Shares related thereto
issuable to you, the performance conditions set forth in Section 4(a) hereof, or
both, shall be made, as provided in Article 4 of the Plan or as the Committee in
its sole discretion otherwise deems appropriate.

 

8. Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Virginia, excluding any conflicts or choice of law rule or
principle.

 

9. Conflicts. In the event of any conflict between the provisions of the Plan as
in effect on the Date of Grant and the provisions of this Agreement, the
provisions of the Plan shall govern. All references herein to the Plan shall
mean the Plan as in effect on the date hereof.

 

10. Bound by Plan. In consideration of the grant of the Units, you agree that
you will comply with such conditions as the Board and the Committee may impose
on the Units and the underlying Shares related thereto and be bound by the terms
of the Plan.

 

11. Binding Effect. This Agreement shall be binding upon, enforceable against,
and inure to the benefit of you and your legatees, distributees and personal
representatives, and Capital One and its successors and assigns.

 

You represent that you are familiar with the terms of the Plan and have had the
opportunity to ask questions and receive answers concerning the terms and
conditions of this Agreement and the Units and the underlying Shares related
thereto. As a condition of this award and your right to receive the Units and
the underlying Shares related thereto, you must sign this Agreement and return
at least one copy to Capital One’s Human Resources Department. By doing so, you
confirm the accuracy of the statement set forth in the first sentence of this
paragraph and evidence your acceptance of and agreement to be bound by the terms
of this Agreement and the Plan.

 

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IN WITNESS WHEREOF, CAPITAL ONE FINANCIAL CORPORATION has caused this Agreement
to be signed on its behalf, and you have affixed your signature hereto.

 

CAPITAL ONE FINANCIAL CORPORATION

By:

 

/s/ Stanley Westreich

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Stanley Westreich

   

/s/ Richard D. Fairbank

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Richard D. Fairbank

 

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APPENDIX A

 

VESTING OF UNITS

 

Percentile

Rank Vs. Peer

Group 3-Yr

EPS Growth

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   % of Target
Award Paid

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    Number of
Units

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100

   150.0 %   355,400

99

   148.0 %   350,660

98

   146.0 %   345,930

97

   144.0 %   341,190

96

   142.0 %   336,450

95

   140.0 %   331,710

94

   138.0 %   326,970

93

   136.0 %   322,230

92

   134.0 %   317,490

91

   132.0 %   312,750

90

   130.0 %   308,020

89

   128.0 %   303,280

88

   126.0 %   298,540

87

   124.0 %   293,800

86

   122.0 %   289,060

85

   120.0 %   284,320

84

   118.0 %   279,580

83

   116.0 %   274,850

82

   114.0 %   270,110

81

   112.0 %   265,370

80

   110.0 %   260,630

79

   108.0 %   255,890

78

   106.0 %   251,150

77

   104.0 %   246,410

76

   102.0 %   241,680

75

   100.0 %   236,940

74

   98.0 %   232,200

73

   96.0 %   227,460

72

   94.0 %   222,720

71

   92.0 %   217,980

70

   90.0 %   213,240

69

   88.0 %   208,500

68

   86.0 %   203,770

67

   84.0 %   199,030

66

   82.0 %   194,290

65

   80.0 %   189,550

64

   78.0 %   184,810

63

   76.0 %   180,070

62

   74.0 %   175,330

61

   72.0 %   170,600

60

   70.0 %   165,860

59

   68.0 %   161,120

58

   66.0 %   156,380

57

   64.0 %   151,640

56

   62.0 %   146,900

55

   60.0 %   142,160

54

   58.0 %   137,430

53

   56.0 %   132,690

52

   54.0 %   127,950

51

   52.0 %   123,210

50

   50.0 %   118,470

49

   49.0 %   116,100

48

   48.0 %   113,730

47

   47.0 %   111,360

46

   46.0 %   108,990

45

   45.0 %   106,620

44

   44.0 %   104,250

43

   43.0 %   101,890

42

   42.0 %   99,520

41

   41.0 %   97,150

40

   40.0 %   94,780

39

   39.0 %   92,410

38

   38.0 %   90,040

37

   37.0 %   87,670

36

   36.0 %   85,300

35

   35.0 %   82,930

34

   34.0 %   80,560

33

   33.0 %   78,190

32

   32.0 %   75,820

31

   31.0 %   73,450

30

   30.0 %   71,080

29

   29.0 %   68,720

28

   28.0 %   66,350

27

   27.0 %   63,980

26

   26.0 %   61,610

25

   25.0 %   59,240

24 and below

   0.0 %   0

 

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APPENDIX B

 

COMPARATOR GROUP

 

American Express Co.

Bank of America Corp.

Bank One Corp.

BB&T Corporation

Charter One Financial Inc.

Citigroup Inc.

Countrywide Financial Corp.

Dell Inc.

Fannie Mae

Fifth Third Bancorp

Fleetboston Financial Corp.

Freddie Mac

International Business Machines Corp.

Johnson & Johnson

JP Morgan Chase & Co.

KeyCorp

MBNA Corp.

Mellon Financial Corp.

Merck & Co. Inc.

Merrill Lynch & Co. Inc.

Metris Companies Inc.

Microsoft Corp.

National City Corp.

PepsiCo Inc.

PNC Financial Services Group

Providian Financial Corp.

SLM Corp.

SunTrust Banks Inc.

Synovus Financial Corp.

U.S. Bancorp

Wachovia Corp.

Washington Mutual Inc.

Wells Fargo & Company

 

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