NASDAQ OMX Group (NDAQ)

Severance

Except as described below in the case of a change in control of the company and in certain circumstances under the 2007 employment agreement with Mr. Greifeld, we are not obligated to pay severance or other enhanced benefits to any named executive officer upon termination of his or her employment. However, the management compensation committee has the ability to pay severance benefits in its discretion. For a summary of a severance package we may offer to a named executive officer in the event of termination of employment, see “Executive Compensation—Potential Payments upon Termination or Change in Control.” Severance decisions do not influence the management compensation committee’s other decisions regarding compensation as these other decisions are focused on motivating our executives to remain with NASDAQ OMX and contribute to our future success.

As the company completed its transition to a public company and adopted an acquisition strategy, the management compensation committee and the board of directors approved change in control agreements in 2005 for each executive not previously covered by such an agreement (the letter agreements). In structuring these letter agreements, the management compensation committee evaluated comparable change in control severance arrangements offered by other companies in the financial services industry and considered the size of the severance package the committee might approve in other contexts. Similarly, Mr. Greifeld’s 2007 employment agreement contains change in control severance provisions. These agreements are intended to provide management stability and to reduce any reluctance on the part of executives to pursue potential transactions that may enhance the value of our stockholders’ investments.

The management compensation committee believes that the terms for triggering payment are reasonable and that some of the terms are more restrictive in several important ways than change in control agreements at many other companies. For example, under the letter agreements, a severance payment is only available if termination of employment (“other than for cause” if by NASDAQ OMX or for “good reason” if by the executive) occurs

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within one year following a “change in control” of the company or in certain situations within 180 days prior to a change in control. For Mr. Greifeld, a severance payment is available only if termination of employment occurs within two years following a change in control. The letter agreements and Mr. Greifeld’s 2007 employment agreement use what is known as a “double trigger,” meaning that a payment is activated only upon the occurrence of both a change in control of the company and a loss of employment. This is unlike a “single trigger” arrangement that pays out severance benefits immediately upon a change in control regardless of employment status. Benefits under these agreements will be provided only if NASDAQ OMX is the target organization. In addition, a change in control under these agreements is limited to situations where the acquirer obtains a majority of NASDAQ OMX’s voting securities or the current members of our board of directors (or their approved successors) cease to constitute a majority of the board. Finally, the agreements do not modify or otherwise change the terms of the executive’s outstanding equity awards.

Severance

Except as described below in the case of a change in control of the company and in certain circumstances under the employment agreements with Messrs. Greifeld and Knight, we are not obligated to pay severance or other enhanced benefits to the named executive officers upon termination of their employment. However, the management compensation committee has the ability to pay severance benefits in its discretion. For a summary of a severance package we may offer to a named executive officer in the event of termination of employment, please see “Executive Compensation—Potential Payments upon Termination or Change-in-Control.” Severance decisions do not influence the management compensation committee’s other decisions regarding compensation as these other decisions are focused on motivating our executives to remain with Nasdaq and contribute to our future success.

As Nasdaq completed its transition to a public company, and adopted an acquisition strategy, the management compensation committee and the board of directors approved change in control agreements in 2005 for each executive not previously covered by such an agreement (CIC Agreement). In structuring these agreements, the management compensation committee evaluated comparable change in control severance offered by some other companies in the financial industry and considered the size of the severance package the committee might approve in other contexts, as discussed in the preceding paragraph. Similarly, Mr. Greifeld’s amended and restated employment agreement and Mr. Knight’s employment agreement contain change in control provisions. These agreements are intended to provide management stability and to reduce any reluctance of senior management to pursue potential transactions that may enhance the value of our stockholders’ investments.

The management compensation committee believes that the terms for triggering payment are reasonable and that some of the terms are more restrictive in several important ways than change in control agreements at many other companies. For example, under the CIC Agreements, a severance payment is only available if termination (“other than for cause” if by Nasdaq or for “good reason” if by the executive) occurs within one year following a “change in control” of the company or in certain situations within 180 days prior to a change in control. For Mr. Greifeld, a severance payment is available only if termination occurs within two years following a change in control. The CIC Agreements and Mr. Greifeld’s employment agreement use what is known as a “double trigger,” meaning that a payment is activated only upon the occurrence of both a change in control and a loss of employment. This is unlike a “single trigger” arrangement that pays out severance benefits immediately upon a

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change in control regardless of employment status. Benefits under these agreements will only be provided if Nasdaq is the target organization. In addition, a change in control under these agreements is limited to situations where the acquirer obtains a majority of Nasdaq’s voting securities or the current members of our board of directors (or their approved successors) cease to constitute a majority of the board. Finally, the agreements do not modify or otherwise change the terms of the executive’s outstanding equity awards.

Mr. Knight’s employment agreement was executed in 2000 and contains provisions that are triggered if Nasdaq terminates his employment without “cause” or Mr. Knight terminates his employment “for good reason.” “Good reason” includes a reduction in Mr. Knight’s position, duties or authority or Nasdaq’s failure to secure agreement of any successor entity that he will continue in his position. These provisions are discussed in “Executive Compensation—Potential Payments upon Termination or Change-in-Control.”

Severance

Except as outlined below in the case of a change in control of the company and in certain circumstances under Mr. Greifeld’s employment agreement, Nasdaq is not obligated to pay severance or other enhanced benefits to named executive officers upon termination of their employment. However, the management compensation committee has the ability to pay severance benefits in its discretion. For a summary of a severance package we might offer a named executive officer in the event of termination, please see “Executive Compensation—Potential Payments upon Termination or Change-in-Control.”

As Nasdaq completed transition to a public company, and adopted an acquisition strategy, the management compensation committee and the board of directors approved change in control agreements in 2005 for each executive not previously covered by such an agreement. Similarly, Mr. Greifeld’s amended and restated employment agreement contains change in control provisions. These agreements are intended to provide management stability and to reduce any reluctance of senior management to pursue potential transactions that may enhance the value of our stockholders’ investments. In designing such agreements, management presented the management compensation committee with comparable change in control severance offered by a representative sampling of our peer companies.

The management compensation committee believes that the terms for triggering payment are reasonable and that the terms are more restrictive in several important ways than change in control agreements at many peer companies. For example, for the named executive officers other than Mr. Greifeld, the severance payment is only available if termination (for “cause” if by Nasdaq or for “good reason” if by the executive) occurs within one year following a “change in control” of the company or in certain situations within 180 days prior to a change in control. For Mr. Greifeld, payment is triggered only in situations where termination occurs within two years after a change in control. All of these agreements (including Mr. Greifeld’s) use what is known as a “double trigger” as it is only activated upon the occurrence of both a change in control and a loss of employment. This is unlike a “single trigger” plan that pays out severance benefits immediately upon a change in control. Benefits under these agreements will only be provided where Nasdaq is the target organization. In addition, a change in control is limited to situations where the acquirer obtains a majority of Nasdaq’s voting securities or the current members of our board of directors (or their approved successors) cease to constitute a majority of the board. Finally, the agreements do not change the terms of the executive’s outstanding equity awards.

In setting the size of severance benefits under the change in control agreements, the management compensation committee considered the size of the severance package the committee might approve in other contexts, as discussed above in the first paragraph of this section.