We have a share-based compensation program that provides our board of directors broad discretion in creating employee equity incentives. Share-based awards, or equity awards, include employee stock options, restricted stock (which includes awards and units), and performance share units, or PSUs. Grants of equity awards are designed to reward employees for their long-term contributions and provide incentives for them to remain with us. For accounting purposes, we consider PSUs to be a form of restricted stock. Restricted stock is generally time-based and vests over three- to five-year periods beginning on the date of the grant. Stock options are also generally time-based and expire ten years from the grant date. Stock option and restricted stock awards generally include performance-based accelerated vesting features based on achievement of specific levels of corporate performance. If NASDAQ OMX exceeds the applicable performance parameters, the grants vest on the third anniversary of the grant date, if NASDAQ OMX meets the applicable performance parameters, the grants vest on the fourth anniversary of the grant date, and if NASDAQ OMX does not meet the applicable performance parameters, the grants vest on the fifth anniversary of the grant date.

PSUs are based on performance measures that impact the amount of shares that each recipient will receive upon vesting. PSUs are granted at the fair market value of our stock on the grant date and compensation cost is recognized over the performance period and, in certain cases, an additional vesting period. For each grant of PSUs, an employee may receive from 0% to 150% of the target amount granted, depending on the achievement of performance measures. We report the target number of PSUs granted, unless we have determined that it is more likely than not, based on the actual achievement of performance measures, that an employee will receive a different amount of shares underlying the PSUs, in which case we report the amount of shares the employee is likely to receive.

In March 2011, we granted non-qualified stock options and/or restricted stock to most active employees. Both the stock options and restricted stock granted included a performance-based accelerated vesting feature based on achievement of specific levels of corporate performance, as described above.

During the first nine months of 2011, certain executive officers received grants of a target amount of 632,368 PSUs. Of these PSUs granted, 100,000 units are subject to a three year performance period and vest at the end of the performance period. The remaining 532,368 units are subject to a one year performance period and generally will vest ratably on an annual basis on December 31, 2012 through December 31, 2014.

During 2010, certain executive officers received grants of PSUs which were subject to a one year performance period. These grants exceeded the applicable performance parameters. As a result, an additional 19,142 units were considered granted in February 2011.

See "Summary of Stock Option Activity" and "Summary of Restricted Stock and PSU Activity" below for further discussion.

As of September 30, 2011, we had approximately 6.1 million shares of common stock authorized for future issuance under our equity incentive plan.

The following table shows the total share-based compensation expense resulting from equity awards and the 15.0% discount for the ESPP for the three and nine months ended September 30, 2011 and 2010 in the Condensed Consolidated Statements of Income:

We estimated the fair value of stock option awards using the Black-Scholes valuation model with the following assumptions:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2011 ⁽¹⁾		2010			2011			2010
Expected life (in years)		—		5			5			5
Weighted-average risk free interest rate		—		1.70	%		2.16	%		2.27	%
Expected volatility		—		32.0	%		27.0	%		32.0	%
Dividend yield		—		—			—			—
Weighted-average fair value at grant date	$	—	$	5.96		$	7.06		$	6.36

⁽¹⁾	We did not grant any stock option awards during the three months ended September 30, 2011.

Our computation of expected life is based on historical exercise patterns. The interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. Our computation of expected volatility is based on a market-based implied volatility. Our credit facilities limit our ability to pay dividends. Before our credit facilities were in place, it was not our policy to declare or pay cash dividends on our common stock.

A summary of stock option activity for the nine months ended September 30, 2011 is as follows:


	Number of Stock Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)		(in millions)
Outstanding at January 1, 2011		10,112,842		$	16.92		5.7	$	89

Granted ⁽¹⁾		1,267,430			25.28
Exercised		(926,171	)		9.35
Forfeited or expired		(380,208	)		26.73

Outstanding at September 30, 2011		10,073,893		$	18.30		5.7	$	71

Exercisable at September 30, 2011		5,312,827		$	13.85		3.4	$	64

⁽¹⁾	Primarily reflects our company-wide equity grant issued in March 2011, which includes a performance-based accelerated vesting feature based on achievement of specific levels of corporate performance, as described above.

We received net cash proceeds of $1 million from the exercise of 58,459 stock options for the three months ended September 30, 2011 and received net cash proceeds of $9 million from the exercise of 926,171 stock options for the nine months ended September 30, 2011. We received net cash proceeds of $1 million from the exercise of 129,308 stock options for the three months ended September 30, 2010 and received net cash proceeds of $3 million from the exercise of 381,997 stock options for the nine months ended September 30, 2010. We present excess tax benefits from the exercise of stock options, if any, as financing cash flows.

The aggregate intrinsic value in the above table represents the total pre-tax intrinsic value (i.e., the difference between our closing stock price on September 30, 2011 of $23.14 and the exercise price, times the number of shares) based on stock options with an exercise price less than NASDAQ OMX's closing price of $23.14 as of September 30, 2011, which would have been received by the option holders had the option holders exercised their stock options on that date. This amount can change based on the fair market value of our common stock. The total number of in-the-money stock options exercisable as of September 30, 2011 was 4.2 million.

As of September 30, 2010, 5.9 million outstanding stock options were exercisable and the weighted-average exercise price was $10.99.

Total fair value of stock options vested was $1 million for the three months ended September 30, 2011, immaterial for the three months ended September 30, 2010, $2 million for the nine months ended September 30, 2011, and $1 million for the nine months ended September 30, 2010. The total pre-tax intrinsic value of stock options exercised was $1 million for both the three months ended September 30, 2011 and 2010, $15 million for the nine months ended September 30, 2011, and $4 million for the nine months ended September 30, 2010.

At September 30, 2011, $15 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.7 years.

The following table summarizes our restricted stock and PSU activity for the nine months ended September 30, 2011:


	Restricted Stock					PSUs
	Number of Awards			Weighted- Average Grant Date Fair Value		Number of Awards			Weighted- Average Grant Date Fair Value
Unvested balances at January 1, 2011		2,759,091		$	22.00		1,098,629		$	24.25
Granted		1,378,531	⁽ ¹ ⁾		25.32		651,510	⁽² ⁾		25.15
Vested		(321,834	)		24.39		(67,057	)		35.94
Forfeited		(394,922	)		22.24		(149,128	)		28.07

Unvested balances at September 30, 2011		3,420,866		$	23.15		1,533,954		$	23.75

⁽¹⁾	Restricted stock granted in 2011 primarily reflects our company-wide equity grant issued in March 2011, which includes a performance-based accelerated vesting feature based on achievement of specific levels of corporate performance, as described above.

⁽²⁾	PSUs granted in 2011 primarily reflect awards issued to certain executive officers, as described above.

At September 30, 2011, $57 million of total unrecognized compensation cost related to restricted stock and PSUs is expected to be recognized over a weighted-average period of 1.9 years.