Exhibit 10.8

         
 
       
 
       

  o   Optionee’s Copy

  o   Company’s Copy

COSTAR GROUP, INC.
1998 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT

To                     :

          CoStar Group, Inc. (the “Company”) has granted you an option (the
“Option”) under the CoStar Group, Inc. 1998 Stock Incentive Plan (the “Plan”) to
purchase                                 shares (the “Shares”) of common stock
of the Company (the “Common Stock”), at                      per share (the
“Exercise Price”). The date of grant is
                                        .

          This Option is subject in all respects to the applicable provisions of
the Plan, a copy of the current form of which is attached, except as otherwise
noted. By signing this agreement (the "Agreement”), you acknowledge receiving
the Plan. This Agreement incorporates the Plan by reference and specifies other
applicable terms and conditions. All terms not defined by this Agreement have
the meanings given in the Plan. The Compensation Committee of the Company’s
Board of Directors (or other administrator of the Plan, the “Administrator”) may
adjust the number of Shares and the Exercise Price from time to time under the
Plan. Subject to the terms of the Plan, the Option is intended to be an
[incentive/non-qualified] stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”).

          In addition to the terms, conditions, and restrictions set forth in
the Plan, the following terms, conditions, and restrictions apply to the Option:

(1) The schedule for exercising the Option is as follows, subject to Section
(3) below on expiration:

  a.   You may exercise the Option on the following schedule:

  i.   One Quarter, on or after the first anniversary of the date of grant;    
ii.   One Half, on or after the second anniversary of the date of grant;    
iii.   Three Quarters, on or after the third anniversary of the date of grant;  
  iv.   Fully, on or after the fourth anniversary of the date of grant.

 

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[The vesting schedule may vary for different employees based on the
recommendation of the Compensation Committee.]

  b.   The Option will become immediately exercisable in full upon the
occurrence of a Change in Control as defined in the Plan.     c.   The
Administrator may, in its sole discretion, accelerate the time at which you may
exercise part or all of the Option.

(2)   Subject to this Agreement and the Plan, you may exercise the Option only
by written notice to the Company on or before the date the Option expires. Each
such notice must:

  a.   state the election to exercise the Option and the number of Shares with
respect to which you are exercising the Option;     b.   be signed by you or, if
you have died or become disabled, by the party entitled to exercise the Option;
    c.   contain such representations as the Company reasonably requires; and  
  d.   be accompanied by a cashier’s or certified check in the amount of the
Exercise Price payable to the order of the Company, or, to the extent the Plan
and the Administrator permit, by Common Stock of the Company with a Fair Market
Value equal to all or part of the Exercise Price (with any balance paid by cash
or check), for the Shares with respect to which the Option is being exercised;
provided, however, that you may not surrender (turn in) Common Stock of the
Company as payment unless you have held such stock for more than six months
before the surrender. Alternatively, your notice may direct the Company to send
the share certificates to be issued under this Option to a licensed broker
acceptable to the Company as your agent in exchange for the broker’s tendering
to the Company cash (or acceptable cash equivalents) equal to the Exercise
Price, for the Shares with respect to which the Option is being exercised, as
part of a cashless exercise.

          For all purposes of the Plan, the date of exercise will be the date on
which you have delivered the notice and any required payment to the Company.

(3)   The Option will expire no later than the close of business on
                                         (ten years from the date of grant).

          Unless the Administrator determines otherwise at any time, you will
forfeit any unexercised portions of the Option (whether or not then exercisable)
upon the first to occur of:

  (i)   the Option’s expiration under the preceding sentence,

 

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  (ii)   the 90th day after your resignation (for other than Disability),    
(iii)   the 90th day after the Company terminates your employment (for other
than Disability),     (iv)   in the event of the termination of your employment
for Disability (as determined by the Administrator), the earlier of (I) the
first anniversary of your termination of employment and (II) 30 days after you
cease to have a Disability,     (v)   the first anniversary of your date of
death, and     (vi)   the date you violate any covenant not to compete in effect
between you and the Company.

(4)   The Company may postpone issuing and delivering any Shares for so long as
the Company determines to be necessary or advisable to satisfy the following:

  a.   completing or amending any registration or qualification of the Shares or
satisfying any exemption from registration under any Federal or state law, rule,
or regulation;     b.   complying with any requests for representations under
the Plan;     c.   receiving proof satisfactory to the Company that a person
seeking to exercise the Option after your death or disability is authorized and
entitled to exercise the Option; and     d.   satisfying any federal, state, or
local tax withholding obligations.

(5) If, at the time the Company should issue you Shares because of your exercise
of the Option, no current registration statement under the Securities Act of
1933 (the “Act”) covers such issuance, you must, before the Company will issue
such Shares to you:

  a.   represent to the Company, in form satisfactory to the Company’s counsel,
that you are acquiring the Shares for your own account and not with a view to
reselling or distributing the Shares; and     b.   agree that you may not sell,
transfer, or otherwise dispose of the Shares issued to you under the Option
unless:

  i.   a registration statement under the Act is effective at the time of
disposition with respect to the Shares sold, transferred, or otherwise disposed
of; or

 

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  ii.   the Company has received an opinion of counsel or other information and
representations satisfactory to it to the effect that registration under the Act
is not required by reason of Rule 144 under the Act or otherwise.

(6) To the extent the Plan provides, if you are then an employee or director and
the Company (i) dissolves or liquidates or sells substantially all of its assets
to another corporation, (ii) merges, consolidates, or reorganizes in a manner in
which the Company is not the surviving corporation, or (iii) takes part in any
other Substantial Corporate Change (as defined in the Plan), then, at the sole
discretion of the Board and to the extent the law permits, the Option will:

  (I)   be or become exercisable in full before such event and then terminate or
    (II)   continue in full force and effect and, if applicable, the surviving
corporation or an affiliate of the surviving corporation will be required to
assume the Option and/or substitute a similar option or award in place of the
Option.

Subject to the preceding paragraph, if any change is made in the Common Stock,
without the Company’s receiving consideration (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure, or other transaction
not involving the Company’s receipt of consideration), the Board will adjust the
Option as to the class(es) and number of shares and price per share of
securities subject to the Option, with the Board’s adjustments being final,
binding, and conclusive. The conversion of any convertible securities of the
Company will not be treated as a “transaction not involving the Company’s
receipt of consideration.”

(7) You may not exercise the Option if issuing the Shares would violate any
applicable federal or state securities laws or other laws or regulations.

(8) Nothing in this Agreement restricts the right of the Company or any of its
affiliates to terminate your employment at any time, with or without cause. The
termination of employment, whether by the Company or any of its affiliates or
otherwise, and regardless of the reason therefor, has the consequences provided
for under the Plan and any applicable employment or severance agreement.

(9) You understand and agree that you will not be deemed for any purpose to be a
stockholder of the Company with respect to any of the Shares unless and until
they have been issued to you after your exercise of this Option and payment for
the Shares.

(10) At the time of exercise, the Company will round down any fractional Shares
but will not make any cash or other payments in settlement of fractional shares
eliminated by rounding. If you have not then exercised the Option in full, the
Company will carry forward the fractional Shares rather than eliminating them.

 

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(11) You understand and agree that the existence of this Option will not affect
in any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations, or other
changes in the Company’s capital structure or its business or any merger or
consolidation of the Company, or any issuance of bonds, debentures, preferred or
other stocks with preference ahead of or convertible into, or otherwise
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

(12) The laws of the State of Delaware will govern all matters relating to this
Agreement, without regard to the principles of conflict of laws.

(13) Any notice you give to the Company (including notice of exercise of all or
part of the Option) must be in writing and either hand-delivered or mailed to
the Corporate Secretary of the Company (or to the Chief Financial Officer if
either you would receive the notice or the position is vacant). If mailed, it
should be sent by certified mail and be addressed to the foregoing executive at
the Company’s then corporate headquarters. Any notice given to you will be
addressed to you at your address as reflected on the personnel records of the
Company. You and the Company may change the address for notice by like notice to
the other. Notice will be deemed to have been duly delivered when
hand-delivered, or, if mailed, on the day such notice is postmarked.

(14) Wherever a conflict may arise between the terms of this Agreement and the
terms of the Plan, the terms of the Plan will control.

             

          COSTAR GROUP, INC.
 
  By:                  
 
           

      Name:    

           
 
           

      Title:    

           

ACKNOWLEDGMENT

          I acknowledge receipt of a copy of the attached Plan. I represent that
I have read and am familiar with the Plan’s terms. I accept the Option subject
to all of the terms and provisions of this Agreement and of the Plan under which
it is granted, as the Plan may be amended in accordance with its terms. I agree
to accept as binding, conclusive, and final all decisions or interpretations of
the Administrator concerning any questions arising under the Plan with respect
to the Option.

 

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  Signature of Optionee    
 
       

          No one may sell, transfer, or distribute this Option or the securities
that may be purchased upon exercise of this Option without an effective
registration statement relating thereto or a satisfactory opinion of counsel
satisfactory to the Company or other information and representations
satisfactory to the Company that such registration is not required.