nqso2007agrmt_w-dir.htm


    Exhibit
10.11


    
      

      

    

                                                                                      
 ̈      Grantee’s Copy

                                                                                      
 ̈      Company's Copy

    COSTAR
GROUP, INC.

    2007
STOCK INCENTIVE PLAN

    NONQUALIFIED
STOCK OPTION AGREEMENT

    


    


    To
«Name»:

    


    CoStar
Group, Inc. (the "Company") has granted you a
nonqualified stock option (the "Option") under the CoStar
Group, Inc. 2007 Stock Incentive Plan, as amended from time to time (the "Plan"), to purchase
«NoShares» shares (the "Shares") of common stock of
the Company (the "Common
Stock"), at «Price» per share (the "Exercise
Price").  The date of grant is «DateofGrant».

    


    This
Option is subject in all respects to the applicable provisions of the Plan, a
copy of which is attached, except as otherwise noted.  By signing this
agreement (the "Agreement"), you acknowledge
that you have received and read the Plan.  This Agreement incorporates
the Plan by reference and specifies other applicable terms and
conditions.  All capitalized 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 with respect to your Option from
time to time in accordance with the Plan.

    


    This
Option is not intended to be an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended, and will be interpreted
accordingly.

    


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

    


    
      	
              (1)

            	
              Vesting.  The
      schedule for exercising the Option is as follows, subject to the
      expiration provisions set forth in Section 3
  below:

            


    

    


    
      	
              a.  

            	
              You
      may exercise the Option on the following
  schedule:

            


    

    


    [Set
forth vesting schedule.]

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    No
portion of the Option that is unexercisable at your termination of employment,
consultancy, directorship or other position making you an eligible participant
under the Plan will thereafter become exercisable, unless the Administrator
determines otherwise.

    


    
      	
              b.  

            	
              The
      Option will become immediately exercisable in full upon the occurrence of
      a Change in Control.

            


    

    


    “Change in Control” means the
occurrence of any one or more of the following events:

    


    
      	
              i.  

            	
              a
      Person (as the term person is used for purposes of Section 13(d) or 14(d)
      of the Securities Exchange Act of 1934, as amended) (other than the
      Company, any Company subsidiary, any Company benefit plan, or any
      underwriter temporarily holding securities for an offering of such
      securities) acquires ownership of more than 80% of the undiluted total
      voting power of the Company’s then outstanding securities eligible to vote
      to elect members of the Board (the “Company Voting
      Securities”);

            


    

    


    
      	
              ii.  

            	
              consummation
      of a merger, consolidation or reorganization of the Company with or into
      any other entity, unless the holders of the Company Voting Securities
      outstanding immediately before such consummation, together with any
      trustee or other fiduciary holding securities under a Company benefit
      plan, hold securities that represent immediately after such merger or
      consolidation at least 20% of the combined voting power of the then
      outstanding voting securities of either the Company or the other surviving
      entity or its parent; or

            


    

    


    
      	
              iii.  

            	
              the
      stockholders of the Company approve (A) a plan of complete liquidation or
      dissolution of the Company or (B) an agreement for the Company’s sale or
      disposition of all or substantially all of the Company’s assets, and such liquidation,
      dissolution, sale or disposition is
consummated.

            


    

    


    Even if
other tests are met, a Change of Control has not occurred under any
circumstances in which the Company files for bankruptcy protection or is
reorganized following a bankruptcy filing.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    The
provisions of Section 4 will also apply if the Change in Control is a
Substantial Corporate Change (as defined in those provisions).

    


    
      	
              c.  

            	
              The
      Administrator may, in its sole discretion, accelerate the time at which
      you may exercise part or all of the
Option.

            


    

    


    
      	
              d.  

            	
              The
      vesting period and/or exercisability of the Option may be adjusted by the
      Administrator to reflect the decreased level of employment or other
      applicable service during any period in which you are on an approved leave
      of absence or employed or providing applicable services on a less than
      full time basis, provided, that the Administrator may take into
      consideration any accounting consequences to the
  Company.

            


    

    


    
      	
              (2)  

            	
              Exercise.  Subject
      to this Agreement and the Plan, unless the Administrator determines
      otherwise, you may exercise the Option only by a written “Notice of
      Exercise” to the Company or its designee on a form specified by the
      Company on or before the date the Option expires.  Unless the
      Administrator determines otherwise, each such Notice
  must:

            


    

    


    
      	
              a.  

            	
              state
      your 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 payment of the Exercise Price in full through one, or a
      combination, of the following payment methods, which method(s) shall be
      indicated in the Notice of
Exercise:

            


    

    


    
      	
              i.  

            	
              cashier's
      or certified check in the amount of the Exercise Price payable to the
      order of the Company;

            


    

    


    
      	
              ii.  

            	
              direction
      to the Company through your Notice of Exercise 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;

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              iii.  

            	
              unless
      the Administrator determines otherwise, by surrender to the Company of
      shares of Common Stock with a Fair Market Value on the date of exercise
      equal to all or part of the Exercise Price (with any balance paid by cash
      or check or, unless the Administrator determines otherwise, deducted from
      salary or other amounts payable to you), for the Shares with respect to
      which the Option is being exercised; provided, however, that
      you may not surrender (turn in) previously held or owned Common Stock of
      the Company as payment unless you have held such stock for more than six
      months before the surrender.  For purposes hereof, the date of
      exercise shall be the date of delivery of (A) the duly executed Notice of
      Exercise and (B) the
      shares tendered for payment of the Exercise
  Price;

            


    

    


    
      	
              iv.  

            	
              unless
      the Administrator determines otherwise, attestation of ownership of Common
      Stock and issuance of a net number of shares upon Option exercise;
      or

            


    

    


    
      	
              v.  

            	
              unless
      the Administrator determines otherwise, by the Company withholding from
      the shares of Common Stock otherwise issuable to you upon the exercise of
      the Option (or portion thereof) the whole number of shares with a Fair
      Market Value on the date of exercise equal to all or part of the Exercise
      Price (rounded down, with any balance paid by cash or check or, unless the
      Administrator determines otherwise, deducted from salary or other amounts
      payable to you on such date of exercise).  For purposes hereof,
      the date of exercise shall be the date of delivery of the duly executed
      Notice of Exercise.

            


    

    


    The
Company shall not be obligated to issue any shares of Common Stock until you
have paid the total Exercise Price for that number of shares of Common Stock you
have elected to purchase.  Shares of Common Stock will be issued as
soon as is practical after exercise.

    


    
      	
              (3)  

            	
              Expiration.  The
      Option will expire no later than the close of business on «ExpirationDate»
      (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:

    


    
      	
              a.  

            	
              the
      Option's expiration under the preceding
  sentence,

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
              b.  

            	
              the
      90th day after your resignation, including retirement (for any reason
      other than disability),

            


    

    


    
      	
              c.  

            	
              the
      90th day after the Company terminates your employment or other applicable
      service (for any reason other than
disability),

            


    

    


    
      	
              d.  

            	
              in
      the event of the termination of your employment or other applicable
      service to the Company for disability (as determined by the
      Administrator), the earlier of (i) the first anniversary of the
      termination of your service and (ii) 30 days after you cease to have a
      disability, where, for purposes of this Agreement, “disability” means the
      inability to engage in any substantial gainful activity by reason of any
      medically determinable physical or mental impairment that can be expected
      to result in death or that has lasted or can be expected to last for a
      continuous period of not less than twelve
  months,

            


    

    


    
      	
              e.  

            	
              the
      first anniversary of your date of death,
and

            


    

    


    
      	
              f.  

            	
              the
      date you violate any covenant not to compete, nonsolicitation covenant or
      similar covenant in effect between you and the
  Company.

            


    

    


    The Administrator, in its sole
discretion, will determine all questions of whether particular terminations or
leaves of absence are terminations of employment or other applicable service for
purposes of this Agreement.

    


    
      	
              (4)  

            	
              Substantial Corporate
      Change.  Upon a Substantial Corporate Change, any portion
      of this Option that is unexercised will terminate unless provision is made
      in writing in connection with such transaction
  for:

            


    

    


    
      	
              a.  

            	
              assumption
      or continuation of outstanding Options;
or

            


    

    


    
      	
              b.  

            	
              the
      substitution for such Options, with appropriate adjustments as to the
      number and kind of shares of stock and prices, in which event the Option
      will continue in the manner and under the terms so
    provided.

            


    

    


    Unless
the Board determines otherwise, if an Option would otherwise terminate pursuant
to the preceding sentence, you will have the right, at such time before the
consummation of the transaction causing such termination as the Board reasonably
designates, to exercise any unexercised portions of the Option, whether or not
previously exercisable.

    


    A “Substantial Corporate Change”
means the occurrence of any one or more of the following events:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              i.  
      

            	
              a
      Person (as the term person is used for purposes of Section 13(d) or 14(d)
      of the Securities Exchange Act of 1934, as amended) (other than the
      Company, any Company subsidiary, any Company benefit plan, or any
      underwriter temporarily holding securities for an offering of such
      securities) acquires ownership of 100% of the combined voting power of all
      classes of stock of the Company;

            


    

    


    
      	
              ii.  

            	
              merger,
      consolidation or reorganization of the Company with or into one or more
      entities in which the Company is not the surviving corporation (other than
      a merger or consolidation with a wholly owned subsidiary, a
      reincorporation of the Company in a different jurisdiction or other
      transaction in which there is no substantial change in the stockholders of
      the Company or their relative stock
holdings);

            


    

    


    
      	
              iii.  

            	
              merger,
      consolidation or reorganization of the Company in which the Company is the
      surviving corporation, but after which the stockholders of the Company
      immediately prior to such merger (other than any stockholder that merges,
      or which owns or controls another corporation that merges, with the
      Company in such merger) cease to own their shares or other equity interest
      in the Company;

            


    

    


    
      	
              iv.  

            	
              the
      liquidation or dissolution of the Company;
or

            


    

    


    
      	
              v.  

            	
              the
      sale or disposition of all or substantially all of the Company’s
      assets.

            


    

    


    
      	
              (5)  

            	
              Taxes.  All
      taxes, if any, in respect of the Option or any payments to you hereunder
      shall be solely your responsibility and shall be paid by
    you.

            


    

    


    
      	
              (6)  

            	
              Company Postponement
      of Delivery.  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;

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
              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.

            


    

    


    
      	
              (7)  

            	
              Compliance with
      Securities Laws.

            


    

    


    
      	
              a.  

            	
              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:

            


    

    


    
      	
              i.  

            	
              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

            


    

    


    
      	
              ii.  

            	
              agree
      that you may not sell, transfer, or otherwise dispose of the Shares issued
      to you under the Option unless:

            


    

    


    
      	
               
      

            	
              A.
        

            	
              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

            


    

    


    
      	
               
      

            	
              B.  
      

            	
              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.

            


    

    


    
      	
              b.  

            	
              Notwithstanding
      anything herein to the contrary, you may not exercise the Option, and the
      Company shall not be obligated to deliver any shares of Common Stock,
      during any period when the Company determines that the exercisability of
      the Option or the delivery of shares hereunder would violate any
      applicable federal or state securities laws or other laws or
      regulations.

            


    

    


    
      	
              (8)  

            	
              Restrictions on
      Resales.  The Company may impose such restrictions,
      conditions or limitations as it determines appropriate as to the timing
      and manner of any resales by you or other subsequent transfers by you of
      any shares of Common Stock issued as a result of the exercise of the
      Option, including without limitation (a) restrictions under an insider
      trading policy, (b) restrictions designed to delay and/or coordinate the
      timing and manner of sales by you and other optionholders and
      (c) restrictions as to the use of a specified brokerage firm for such
      resales or other transfers.

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              (9)  

            	
              Not an Employment
      Contract.  Nothing in this Agreement restricts the right
      of the Company or any of its affiliates to terminate your employment or
      other service at any time, with or without cause.  The
      termination of employment or service, whether by the Company or any of its
      affiliates or otherwise, and regardless of the reason therefore, has the
      consequences provided for hereunder, under the Plan and under any
      applicable employment, severance or other
  agreement.

            


    

    


    
      	
              (10)  

            	
              Non-Transferability of
      Option.  You may not assign or transfer the Option to
      anyone other than by will or the laws of descent and distribution and the
      Option shall be exercisable only by you during your
      lifetime.  The Company may cancel the Option if you attempt to
      assign or transfer it in a manner inconsistent with this Section
      10.

            


    

    


    
      	
              (11)  

            	
              Limitation of
      Interest.  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.  Neither you
      (individually or as a member of a group) nor any beneficiary or other
      person claiming under or through you shall have any right, title,
      interest, or privilege in or to any shares of Common Stock allocated or
      reserved for the purpose of the Plan or subject to this Agreement except
      as to such shares of Common Stock, if any, as shall have been issued to
      such person upon exercise of the Option or any part of
  it.

            


    

    


    
      	
              (12)  

            	
              No Fractional
      Shares.  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.

            


    

    


    
      	
              (13)  

            	
              No Limitation on
      Company Actions.  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.

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
              (14)  

            	
              General.

            


    

    


    
      	
              a.  

            	
              This
      Agreement and the Plan constitute the entire understanding between you and
      the Company regarding the Option.  Any prior agreements,
      commitments or negotiations concerning the Option are
      superseded.

            


    

    


    
      	
              b.  

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

            


    

    


    
      	
              c.  

            	
              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 may change the address for notice by like notice
      to the Company.  Notice will be deemed to have been duly
      delivered when hand-delivered, or, if mailed, two business days after such
      notice is postmarked.

            


    

    


    
      	
              d.  

            	
              As
      a condition of this Option, you, on behalf of yourself, your heirs,
      successors and personal representatives ("you and your
      successors"), agree that any dispute or disagreement which may
      arise hereunder shall be decided by the Administrator.  You and
      your successors 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, and you and your
      successors hereby explicitly waive any right to judicial
      review.

            


    

    


    
      	
              e.  

            	
              In
      the event that any provision of this Agreement is declared to be illegal,
      invalid or otherwise unenforceable by a court of competent jurisdiction,
      such provision shall be reformed, if possible, to the extent necessary to
      render it legal, valid and enforceable, or otherwise deleted, and the
      remainder of the terms hereunder shall not be affected except to the
      extent necessary to reform or delete such illegal, invalid or
      unenforceable provision.

            


    

    


    
      	
              f.  

            	
              This
      Agreement shall inure to the benefit of and be binding upon the parties
      hereto and their respective permitted heirs, beneficiaries, successors and
      assigns.

            


    

    


    
      	
              g.  

            	
              The
      headings preceding the text of the sections hereof are inserted solely for
      convenience of reference, and shall not constitute a part of this
      Agreement, nor shall they affect its meaning, construction or
      effect.

            


    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              h.  

            	
              All
      questions arising under the Plan or under this Agreement shall be decided
      by the Administrator in its total and absolute
  discretion.

            


    

    


    
      	
              i.  

            	
              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:   ______________________________

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    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.

    


    


    


    Date:                                                                           ____________________________________

                                                                                       
Signature
of Grantee/Participant

    


    


    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 an opinion of counsel satisfactory to the Company
or other information and representations satisfactory to the Company that such
registration is not required.

     

    
 

    
      
        
        

      

      
        11