Stock-Based Compensation

The following table summarizes non-cash compensation expense and capitalized non-cash compensation for the three and nine months ended September 30, 2014 and 2013 (dollars in millions):



	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014			2013
Outperform Stock Options	$	2	$	2		$	6		$	18
Restricted Stock Units and Shares	10		10			22			31
Performance Restricted Stock Units	4		—			7			—
401(k) Match Expense	6		6			18			19
Restricted Stock Unit Bonus Grant	—		12			(5		)	41
Management Incentive and Retention Plan	—		1			—			7
	22		31			48			116
Capitalized Non-Cash Compensation	—		(1		)	—			(1		)
	$	22	$	30		$	48		$	115

The Company capitalizes non-cash compensation for those employees directly involved in the construction of the network, installation of services for customers or the development of business support systems.

As of September 30, 2014, there were approximately 2 million outperform Stock Options ("OSOs") outstanding. As of September 30, 2014, there were approximately 4 million non-vested restricted stock, restricted stock units ("RSUs") and performance restricted stock units ("PRSUs") outstanding. The Company's Management Incentive and Retention Plan was completed in the first quarter 2014. In addition, as of September 30, 2014, there were approximately 9 thousand non-qualified stock options outstanding.

Effective April 2014, the Company's Board of Directors approved the Restricted Stock Unit and Performance Restricted Stock Unit Master Award Agreement ("the Agreement"), which provides for the ability to award participants PRSUs instead of the historical award of OSOs. While OSOs that were granted prior to 2014 will remain outstanding until their settlement, no additional OSOs will be granted. PRSUs are designed to provide participants with a long-term stake in the Company’s success with both retention and performance components. Under the Agreement, a participant becomes vested in a number of PRSUs based on the Company's achievement of specified levels of financial performance during the performance period set forth in the applicable award letter issued pursuant to the Agreement, so long as the participant remains continuously employed by the Company until the applicable scheduled vesting date, subject to certain change in control provisions as outlined in the Agreement. The performance objective is based on the Company’s financial performance measures. Participants will be entitled to an award within a range of 50% at a minimum achievement level and 200% at a maximum achievement level.