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THE NASDAQ OMX group,  INC.

BOARD COMPENSATION POLICY

Amended and Restated on October 17, 2013 | 

 

PURPOSE& STATEMENT Of POLICY

Annual Non-Employee Director (“Director”) compensation consists of the following
elements, each of which is discussed further below: (i) annual retainer, (ii)
annual equity award, (iii) board and committee meeting fees, (iv) annual
committee chair fees (for certain committees) and (v) annual committee member
fees (for certain committees).

Director compensation will be based on a compensation year in connection with
the annual meeting of stockholders (the “Annual Meeting”). This enables
Directors to receive equity immediately following election and appointment to
the Board at the Annual Meeting. 

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APPLICABILITY& SCOPE

This Policy is applicable to all non-employee Directors of The NASDAQ OMX Group,
Inc. 

ANNUAL RETAINER

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Annual Retainer compensation will be equal to a total value of $80,000 for each
Director, other than the Chairman of the Board.

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For the Chairman of the Board, Annual Retainer compensation will be equal to a
total value of $180,000 for the 2013 compensation year and $205,000 for the 2014
compensation year.

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Directors may annually elect to receive the Annual Retainer compensation in
cash, equity or two portions of cash and equity in percentages specified by the
Director.  If selected, the equity portion of the annual retainer will be paid
in the form of equity awards permitted under The NASDAQ OMX Group, Inc. Equity
Incentive Plan (the “Equity Plan”) to be awarded automatically on the date of
the Annual Meeting immediately following the election of the Board.  Each
Director will have

 

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the opportunity to make this election during the thirty (30) day period
preceding the Annual Meeting. If the Director declines to make an election, the
entire Annual Retainer will be paid in cash.

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The cash portion selected will be paid semi-annually in arrears, in equal
installments, no later than the fifteenth day of the third month following the
end of the semi-annual period; provided, however, that a Director will have a
right to receive a cash payment for any given period only if that person serves
as a Director during all or a portion of that period, with the cash payment for
the period being prorated in the case of a person who serves as a Director
during only a portion of a period (other than on account of death or
disability).    

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The equity portion selected will be paid in accordance with the “Policies and
Procedures Relating to Equity Grants” below. 

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A  Director appointed after the annual shareholders meeting will be eligible to
receive a prorated share of the Annual Retainer compensation. Such a Director
may elect to receive the Annual Retainer compensation in cash, equity or two
portions of cash or equity in percentages specified by the Director. Any equity
portion will be paid retroactively on the date of the next Annual Meeting. Any
cash portion will be paid semi-annually in arrears.

 

ANNUAL EQUITY AWARD

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All Directors will receive an additional annual equity award of a type permitted
under the Equity Plan, such as Restricted Stock Units, in the amount of $115,000
per annum.

 

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The annual equity award will be granted to each Director automatically on the
date of the Annual Meeting immediately following the Director’s election and
appointment to the Board.

 

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The annual equity award will be paid in accordance with the “Policies and
Procedures Relating to Equity Grants” below.

 

BOARD AND COMMITTEE MEETING FEES

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Each Director will receive a fee of $1,500 for each Board and Committee meeting
attended.

 

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Each Director may elect to receive Board and Committee meeting fees in cash or
equity. Fees paid in cash will be paid semi-annually in arrears.  Fees paid in
equity will be paid annually in arrears on the date of the Annual Meeting and in
accordance with the “Policies and Procedures Relating to Equity Grants” below. 

 

ANNUAL COMMITTEE CHAIR FEES (FOR CERTAIN COMMITTEES)

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The Chairperson of each of the Audit and Management Compensation Committees will
receive an Annual Chair Fee of $25,000.

 

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The Chairperson of the Nominating & Governance Committee will receive an Annual
Chair Fee of $15,000.

 

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In 2013, the Annual Chair fees will be paid in cash. Beginning in 2014, each
Chairperson may elect to receive the Annual Chair fees in cash or equity. The
Annual Chair fees will be paid at the beginning of the annual compensation year
in connection with the Annual Meeting.  Fees paid in equity will be paid in
accordance with the “Policies and Procedures Relating to Equity Grants” below. 

 

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ANNUAL COMMITTEE MEMBER FEES (FOR CERTAIN COMMITTEES)

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Each Non-Chair Member of the Audit and Management Compensation Committees will
receive an annual membership fee of $5,000.

 

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In 2013, the Annual Committee Member fees will be paid in cash. Beginning in
2014, each Non-Chair Member may elect to receive the Annual Committee Member
fees in cash or equity.  The Annual Committee Member fees will be paid at the
beginning of the annual compensation year in connection with the Annual Meeting.
Fees paid in equity will be paid in accordance with the “Policies and Procedures
Relating to Equity Grants” below. 

 

 

POLICIES AND PROCEDURES RELATING TO EQUITY GRANTS

GENERAL

 

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All Director equity will be granted under the Equity Plan.

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Calculation of the number of shares of equity to be awarded to Directors will be
valued at 100% of face value and based on the closing price of NASDAQ OMX’s
common stock on the date of the grant. Equity awards are non-transferable and
must be issued to the Director.     

VESTING

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Any equity awards paid as retroactive compensation (e.g., for Board and
Committee meeting fees) will vest immediately. All other equity awards will vest
100% one (1) year from the date of the grant. Equity awards will also vest upon
the scheduled expiration of a Director’s term, if such term is not renewed.

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Upon a Director’s resignation (other than for death or disability) prior to the
end of the Director’s term, equity awards will be forfeited.

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Upon termination of a Director for “Misconduct,” all equity awards will be
forfeited without further consideration to the Director.

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Upon termination of a Director on account of his death or disability, Equity
Awards will vest.

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Shortly after vesting, vested shares will appear in the Director’s account at
E*Trade. To view this information, a Director may log directly onto his or her
online E*Trade account athttps://us.etrade.com/e/t/user/login_sp. Additionally,
a Director may contact E*Trade’s Executive Services Team at 1.866.987.2339 or
via email at executiveservices@etrade.com

EQUITY AGREEMENTS, SHARE RESTRICTIONS & VOTING RIGHTS

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Equity awards will be evidenced by an Equity Award Agreement to be entered into
with each Director.

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Once vested, shares will be freely tradeable. NASDAQ OMX does not have a
repurchase right or obligation.

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Trading in NASDAQ OMX shares, however, is subject to the Director and Executive
Officers Trading Policy and to any contractual restrictions on transfer, such as
lock-up agreements, that may be applicable.

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NASDAQ OMX BOARD COMPENSATION PROGRAM|    3

 

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REPORTING AND DISCLOSURE

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SEC Form 4s (Change in Beneficial Ownership) must be filed by each Director with
the SEC within 2 business days of equity grants.  The Director may request
NASDAQ OMX’s assistance with the preparation and filing of Form 4s and other
Section 16 reports by providing a completed Power of Attorney and CIK/CCC Code,
if the Director has a CIK/CCC Code currently assigned.

 

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Equity will be reflected as stock owned by Directors, if required, in the
Beneficial Ownership Table of the NASDAQ OMX Proxy and will be disclosed under
the general Director compensation section of the Proxy.

STOCK OWNERSHIP GUIDELINES FOR DIRECTORS

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Stock ownership guidelines for Directors of NASDAQ OMX are as follows.

Value of Shares Owned

5x annual cash retainer

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New Directors are expected to meet the applicable level of ownership within four
years of their election to the Board of Directors.

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The value of shares owned will be calculated based upon NASDAQ OMX’s average
closing common stock price for a 90 day period prior to the date on which the
Director is expected to meet the applicable level of stock ownership.

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Shares that count toward meeting the stock ownership guidelines include:

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Shares owned outright (e.g., shares obtained upon option exercise, shares
purchased in the open market, etc.)

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Shared ownership (e.g., shares owned or held in trust by immediate family)

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Vested and unvested restricted shares

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Shares that do not count toward meeting the stock ownership guidelines:

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Vested stock options

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Unvested stock options

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Once an applicable guideline threshold has been attained, the Director is
expected to continuously retain sufficient share ownership to meet the guideline
for as long as the Director is subject to the Stock Ownership Guidelines.

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There may be instances where an exception to the guidelines is necessary or
appropriate, including in cases where the satisfaction of the guidelines would
place a severe hardship on the Director. In such cases, the Chairman of the
Board will make a final determination as to whether an exception to the Stock
Ownership Guidelines, in whole or in part, will be granted.

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