NASDAQ OMX Group (NDAQ)

Background

On April 22, 2005, we sold and issued $205.0 million aggregate principal amount of Series A Notes to Norway SPV and amended and issued $240.0 million aggregate principal amount of Series B Notes to the H&F Entities. The H&F Entities and the SLP Entities are managing members of Norway SPV’s parent. See Proposal I for a discussion of the Series A Notes and Series B Notes. The Series A Notes and Series B Notes (collectively, the “New Notes”) are convertible into 14,137,931 and 16,551,724 shares of common stock, respectively, subject to adjustment, in general, for any stock split, dividend, combination, recapitalization or other similar event. As of August 5, 2005, the Series A Notes (excluding related warrants) represented approximately 14.8% of our outstanding common stock on an as-converted basis and the Series B Notes (excluding related warrants) represented approximately 16.9% of our outstanding common stock on an as-converted basis. In connection with the issuance of the New Notes, we agreed to use our best efforts to seek Holder approval of an amendment to the Certificate of Incorporation (the “Voting Charter Amendment”) that would permit the holders of the New Notes to vote on an as-converted basis on all matters on which Holders have the right to vote, subject to the 5% voting limitation in the Certificate of Incorporation (the “5% Limitation”). The Voting Charter Amendment would be similar to a provision in our Certificate of Incorporation granting voting rights to the Old Notes that expired upon exchange of the Old Notes for the Series B Notes.

Currently, the 5% Limitation provides that a holder of common stock, preferred stock or Old Notes may not cast votes in excess of 5% of the total voting power of Nasdaq’s outstanding shares entitled to vote on the matter. The 5% Limitation does not apply, however, to (i) NASD until such time as it controls 5% or less of our outstanding shares or notes entitled to vote on the election of a majority of the Board of Directors, and (ii) any person that the Nasdaq Board exempts, in accordance with certain restrictions on the Nasdaq Board’s discretion, from the limitation prior to the time that such person beneficially owns more than 5% of Nasdaq’s voting securities. These restrictions prevent the Nasdaq Board from granting a waiver for a registered broker or dealer and its Affiliates (as defined in the Certificate of Incorporation) or an individual that is subject to a statutory disqualification under Section 3(a)(39) of the Securities Exchange Act of 1934 (the “Exchange Act”). In addition, the Certificate of Incorporation currently provides that in the event that the Nasdaq Board approves an exemption from the 5% Limitation for any person (other than an exemption granted in connection with a strategic market alliance), we would grant a similar waiver from the 5% Limitation for the H&F Entities.