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Capital One Announces 3-for-1 Stock Split, New Entrepreneurial Compensation Program and 17th Consecutive Quarterly Dividend

April 30, 1999 at 8:58 AM EDT
  FALLS CHURCH, Va., April 30 /PRNewswire/ -- The Board of Directors of
Capital One Financial Corporation (NYSE: COF) yesterday approved a
three-for-one stock split of the company's common stock and approved a new
entrepreneurial compensation program.  "The stock split and other Board
actions reflect the tremendous performance of the company and its stock price
over the past few years," said Richard D. Fairbank, Capital One's Chairman and
Chief Executive Officer.  "We hope the stock split will make stock ownership
more accessible to a broader group of stockholders -- including Capital One
associates -- and enhance our recruiting efforts."
    The three-for-one stock split will be in the form of a 200 percent stock
distribution, or two-share stock dividend, to be distributed on June 1, 1999,
to stockholders of record on May 20, 1999.  The split will increase the
outstanding number of Capital One shares from approximately 65 million to
195 million.  The company's Preferred Stock purchase rights under the
November 16, 1995 Rights Agreement will be adjusted to reflect the stock
    In addition, the company approved a change to its Shareholder Rights Plan
to adjust the exercise price of the Rights to reflect the current stock price.
Under the Rights Plan, if any person or group acquires beneficial ownership of
15 percent of the company's common stock, holders of Rights (other than the
15 percent holder) will be entitled to buy the company's stock with a market
value of $1,200 for $600 (before adjusted to reflect the stock split).
    Also at yesterday's meeting, the Board of Directors approved a special
stock option program, known as EntrepreneurGrant.  This entrepreneurial
compensation program reflects the company's continued commitment to aligning
the interests of senior management with that of stockholders.  With this
latest EntrepreneurGrant program, the company's two top executives have given
up all remaining compensation through the year 2001.  Mr. Fairbank and Nigel
Morris, President and Chief Operating Officer, gave up one additional year's
salary and two additional years of annual cash incentive, annual option
grants, and Senior Executive Retirement Plan (SERP) contributions, in exchange
for a one-time option grant.  These are performance-based options that vest
early if the stock price reaches $300 at anytime on or before June 15, 2002,
and in any case, in nine years or upon a change of control, regardless of the
stock price.  Mr. Fairbank will receive an option to purchase 376,887 shares
and Mr. Morris will receive an option to purchase 251,258 shares of the
company's common stock.
    The company's senior managers (141, excluding Messrs. Fairbank and Morris)
are also able to participate in this program, by electing to give up all
annual stock option grants for the next two years, in exchange for the
EntrepreneurGrant.  These options are subject to the same vesting conditions
as described above.
    To meet the accelerated performance-based target, the stock price must be
at or above the $300 target on at least ten trading days in any thirty
calendar-day period.  Executives will have until June 15, 1999 to make their
elections.  The purchase price for all the shares under these option grants is
$169-3/8 per share, based on the average of the high and low of the company's
common stock on April 29, 1999.  The performance target, the purchase price
and number of shares will be adjusted to reflect the stock split.
    Capital One also announced a quarterly dividend of $.08 per share payable
May 20, 1999, to stockholders of record as of May 13, 1999.  The dividend will
be paid prior to the split.  This is the company's seventeenth consecutive
quarterly dividend since it became an independent company on February 28,
1995.  Dividends declared by the company are eligible for direct reinvestment
in the company's common stock under its Dividend Reinvestment and Stock
Purchase Plan.  For additional plan information, stockholders should contact
First Chicago Trust Company of New York at 800-446-2617.

    Headquartered in Falls Church, Virginia, Capital One Financial Corporation
( ) is a holding company whose principal subsidiaries,
Capital One Bank and Capital One, F.S.B., offer consumer lending products.
Capital One's subsidiaries collectively had 18.0 million customers and
$17.4 billion in managed loans outstanding as of March 31, 1999, 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.  Capital One recently ranked #41 in
Fortune's list of "Best Companies to Work For" and #15 best performer in
Business Week's rating of the S&P 500.

SOURCE  Capital One Financial Corporation