[X]	No fee required.

[   ]	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)	Title of each class of securities to which transaction applies:

(2)	Aggregate number of securities to which transaction applies:

(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

(4)	Proposed maximum aggregate value of transaction:

(5)	Total fee paid:

[   ]	Fee paid previously with preliminary materials.

[   ]	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1)	Amount previously paid:

(2)	Form, schedule or registration statement no.:

(3)	Filing party:

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(4)	Date filed:

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1.	To elect the eight directors named in the Proxy Statement to hold office until the next Annual Meeting of Stockholders, or until their respective successors are elected and qualified;

2.	To approve the CoStar Group, Inc. 2016 Stock Incentive Plan;

3.	To approve the CoStar Group, Inc. 2016 Cash Incentive Plan;

4.	To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2016;

5.	To approve, on an advisory basis, the Company’s executive compensation; and

6.	To transact any other business properly presented before the Annual Meeting.

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1.	By Internet (www.proxyvote.com): You may vote over the Internet by following the instructions provided in the Notice or, if you receive a complete set of proxy materials by U.S. mail, by following the instructions on the proxy card.

2.	By Telephone: If you receive a complete set of proxy materials by U.S. mail, you may vote by telephone by following the instructions on your proxy card.

3.	By Mail: If you receive a complete set of proxy materials by U.S. mail, you may complete, sign and return the accompanying proxy card in the postage-paid envelope provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

4.	In Person: If you are a stockholder as of the Record Date, you may vote in person at the Annual Meeting. Submitting a proxy will not prevent a stockholder from attending the Annual Meeting, revoking his or her earlier-submitted proxy or voting in person.

•	Your shares will be voted in accordance with your instructions.

•

If you sign, date and return the proxy card and there are any items for which you do not provide instructions, your shares will be voted in accordance with the Board’s recommendations as follows: “FOR” election of each of the director nominees, “FOR” approval of the 2016 Stock Incentive Plan, “FOR” approval of the 2016 Cash Incentive Plan, “FOR” ratification of the independent registered public accounting firm, and “FOR” approval of the advisory resolution on executive compensation.

•	Delivering to the Corporate Secretary written notice that you are revoking your proxy;

•	Submitting a properly executed proxy bearing a later date; or

•	Attending the Annual Meeting and voting in person. If you are not the owner of record, but rather hold your shares through a broker or bank, you should take appropriate steps to obtain a legal proxy from the owner of record if you wish to attend and vote at the Annual Meeting.

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•	Industry Expertise. We seek directors with experience in the commercial real estate, data provider and technology industries. Experience in those areas is valuable in understanding our growth and development efforts, as well as the market segments in which we operate.

•	Financial Expertise. We believe that an understanding of accounting and financial reporting processes is important because it assists our directors in understanding, advising and overseeing our investing activities, financial reporting and internal controls. We measure our operating performance by reference to financial targets. We expect all of our directors to be financially knowledgeable.

•

Mergers & Acquisitions Experience. We have grown over the years in part through mergers & acquisitions activity and believe directors who have a background in mergers & acquisitions transactions can provide insight into developing and implementing strategies for growing our operations through business combinations and also provide relevant input regarding our business strategy. Relevant experience in this area includes experience identifying and valuing proposed transactions, analyzing the ‘fit’ of a proposed acquisition target with the Company’s strategy, and integrating acquired companies with our existing operations.

•	Business Development. We expect to continue to grow organically by identifying and developing new services and new markets for our services. Directors who have expertise in business development can provide insight into developing and implementing strategies for growing our business organically.

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•

Public Company Board and Management Experience. Directors who have served on other public company boards and/or as executives of other public companies can offer advice and insight with regard to the dynamics and operation of a board of directors, the relationship between a board and the CEO and other management personnel, and an understanding of good corporate governance practices and risk management.

•	Leadership Experience. Directors who have served in a leadership capacity or as executives at other companies provide valuable operational insight and can help the Board operate efficiently and effectively.

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•	No discounted options may be granted;

•	No repricing of stock options or stock appreciation rights without shareholder approval;

•	Minimum vesting periods;

•	Awards are subject to potential reduction, cancellation, forfeiture or other clawback in certain circumstances;

•	Annual limit on equity that may be awarded to non-employee directors;

•	Awards under the 2016 Stock Incentive Plan may qualify as “performance-based compensation” under Section 162(m) of the Tax Code (defined below); and

•	No evergreen feature.

•	Interpret and administer the 2016 Stock Incentive Plan;

•	Make rules and regulations relating to the administration of the 2016 Stock Incentive Plan; and

•	Make any other determinations and take any other action that it deems necessary or desirable for the administration of the 2016 Stock Incentive Plan.

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•

If the sales price exceeds the exercise price of the ISO, the participant will recognize capital gain equal to the excess, if any, of the sales price over the fair market value of the shares on the date of exercise, and the participant will recognize ordinary income equal to the excess, if any, of the lesser of the sales price or the fair market value of the shares on the date of exercise over the exercise price of the ISO; or

•	If the participant’s sales price is less than the exercise price of the ISO, the participant will recognize a capital loss equal to the excess of the exercise price of the ISO over the sales price of the shares.

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•	Link executive compensation with the achievement of overall corporate goals,

•	Encourage and reward superior performance, and

•	Assist the Company in attracting, motivating and retaining talented executives.

•

Performance Focus and Multi-Year Performance Metric. The executive compensation program consists of annual grants of restricted stock (with the value of grant determined based on the achievement of a financial goal over the prior fiscal year) and options that vest over time and a grant of performance-based restricted stock that vests based on achievement of a three-year cumulative financial goal that is subject to adjustment based on the Company’s total stockholder return (“TSR”) over the three-year period. The performance-based restricted stock grant provides for:

◦	A three-year, cumulative revenue goal in order to align executive compensation with long-term stockholder value; and

◦	A measure of stockholder return, whereby the shares earned, if any, as a result of the Company’s Achievement of the revenue goal will be positively or negatively adjusted based on the Company’s three-year TSR relative to the three-year TSR of the companies included within the Russell 1000 index, in order to align executive compensation with long-term stockholder returns.

•	Distinct Performance Metrics for the Annual and Long-Term Incentive Plans. The annual awards of cash incentives and restricted stock are based on distinct earnings metrics. Further, the three-year performance-based restricted stock awards are based on a separate and distinct revenue metric.

•	Equity Grant Values Evaluated Against Peer Companies. The Compensation Committee generally strives to set target equity award values within +/- 15% of the median peer values to avoid potential payouts that could be multiple times higher than the median of the executives’ respective peers.

•	We do not have guaranteed minimum payment levels for executives’ cash incentives or performance-based equity awards.

•	We do not provide material perquisites to our executive officers.

•	We do not have the ability to reprice options without stockholder approval.

•	Our executive officers and directors are subject to rigorous stock ownership policies, which require them to own no less than a minimum value of Company common stock.

•	We have a clawback policy that allows the Company to recover incentive awards from executives in certain circumstances if the Company has to restate its financial results.

•	Our Compensation Committee regularly retains an independent compensation consultant to advise the Compensation Committee on evolving best practices on executive compensation and with respect to the Company’s compensation peer group.

•	We seek and value stockholder feedback on our executive compensation program.

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•	Timely identify the material risks that the Company faces,

•	Communicate necessary information with respect to material risks to senior executives and, as appropriate, to the Board or relevant Board Committee,

•	Implement appropriate and responsive risk management strategies consistent with the Company’s risk profile, and

•	Integrate risk management into Company decision-making.

•	A review of CoStar’s compensation programs, policies and practices;

•	Program analysis to identify risk and risk control related to the programs; and

•	Determinations as to the sufficiency of risk identification, the balance of potential risk to potential reward and risk control.

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•	Overseeing the Company’s compensation structure, policies and programs for executive officers and assessing whether the compensation structure establishes appropriate incentives for the executive officers;

•

Reviewing and approving corporate goals and objectives relevant to the compensation of the Chief Executive Officer and other executive officers of the Company, evaluating those executive officers’ performance in light of their goals and setting their compensation levels based on the Compensation Committee’s evaluation and, with respect to the other executives, the recommendations of the CEO and CFO;

•	Approving stock options and other stock incentive awards for executive officers;

•	Reviewing and approving the design of benefit plans pertaining to executive officers;

•	Reviewing and recommending employment agreements for executive officers;

•	Approving, amending or modifying the terms of any compensation or benefit plan that does not require stockholder approval;

•	Reviewing the compensation of directors for service on the Board and its committees and recommending changes in compensation to the Board; and

•

Reviewing and discussing with management the Company’s compensation discussion and analysis and related disclosures required to be included in the Company’s annual report and proxy statement, recommending to the Board whether the compensation discussion and analysis should be included in the annual report and proxy statement, and overseeing publication of an annual executive compensation report in the Company’s annual report and proxy statement.

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(1)	The Company reimburses all directors for reasonable travel and out-of-pocket expenses incurred in connection with their duties as directors, including attendance at meetings.

(2)

Annual equity awards are granted on the date of the first regular Board meeting following the date of the annual meeting of stockholders, are payable in the form of restricted stock, are valued at the grant date, and vest in equal, annual installments over a 4-year period from the date of grant as long as the director is still serving on our Board on the respective vesting date. The number of shares of restricted stock granted pursuant to each such restricted stock grant to the directors is determined by dividing the total dollar amount awarded by the closing price of the Company’s common stock on the date of grant.

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(1)	This column shows the amount of cash compensation earned in 2015 for Board and Committee service.

(2)

This column shows the aggregate grant date fair value of shares of restricted stock granted in 2015 to each non-employee director, computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 718, “Compensation – Stock Compensation”. Each non-employee director received one grant of restricted stock on September 9, 2015 for his service on the Board and any committees, as applicable. Generally, the grant date fair value is the amount the Company expenses in its financial statements over the awards’ vesting period and is based on the closing price of our common stock on the date of grant, which was $177.39 on September 9, 2015.

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(1)	Age determined as of June 1, 2016.

(2)	Years of service include the current year of service.

(3)	Includes all years of service with the Company, although not consecutive.

(4)	Includes years of service with acquired companies.

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•	The individuals listed in the Summary Compensation Table in this Proxy Statement (whom we refer to collectively in this Proxy Statement as the “named executive officers”);

•	Each of our directors and director nominees;

•	Each person we know to be the beneficial owner of more than 5% of our outstanding common stock (based upon Schedule 13D and Schedule 13G filings with the SEC, which can be reviewed for further information on each such beneficial owner’s holdings); and

•	All of our current executive officers and current directors as a group.

(1)

Unless otherwise noted, each listed person’s address is c/o CoStar Group, Inc., 1331 L Street, NW, Washington, DC 20005. Beneficial ownership, as determined in accordance with Rule 13d-3 under the Exchange Act, includes sole or shared power to vote or direct the voting of, or to dispose or direct the disposition of shares, as well as the right to acquire beneficial ownership within 60 days of April 1, 2016, through the exercise of an option or otherwise. Except as indicated in the footnotes to the table and to the extent authority is shared by spouses under applicable law, we believe that the persons named in the table have sole voting and dispositive power with respect to their reported shares of common stock. The use of * indicates ownership of less than 1%. As of April 1, 2016, the Company had 32,500,289 shares of common stock outstanding.

(2)	Includes 2,882 shares of restricted stock that are subject to vesting restrictions.

(3)	Includes 215,219 shares issuable upon options exercisable within 60 days of April 1, 2016, as well as 67,754 shares of restricted stock that are subject to vesting restrictions.

(4)	Consists of 12,770 shares of restricted stock that are subject to vesting restrictions.

(5)	Consists of 8,366 shares issuable upon options exercisable within 60 days of April 1, 2016.

(6)	Includes 3,908 shares of restricted stock that are subject to vesting restrictions.

(7)	Includes 32,333 shares issuable upon options exercisable within 60 days of April 1, 2016, as well as 18,014 shares of restricted stock that are subject to vesting restrictions.

(8)	Includes 2,400 shares issuable upon options exercisable within 60 days of April 1, 2016, as well as 20,010 shares of restricted stock that are subject to vesting restrictions.

(9)	Includes 2,882 shares of restricted stock that are subject to vesting restrictions.

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(10)	Includes 6,000 shares held by Mr. Haber’s spouse and excludes 25,880 shares held by Mr. Haber’s adult sons for which Mr. Haber disclaims beneficial ownership. Also includes 2,848 shares of restricted stock that are subject to vesting restrictions.

(11)	Includes 3,003 shares of restricted stock that are subject to vesting restrictions

(12)	Includes 2,910 shares of restricted stock that are subject to vesting restrictions.

(13)	Includes 2,803 shares of restricted stock that are subject to vesting restrictions.

(14)

Number of shares beneficially owned is as of December 31, 2015 and is based on a Schedule 13G/A filed by Baron Capital Group, Inc. (“BCG”), BAMCO INC. (“BAMCO”), Baron Capital Management, Inc. (“BCM”) and Ronald Baron on February 16, 2016. BCG and Ronald Baron both had sole voting and sole dispositive power with respect to no shares, shared voting power with respect to 2,669,266 shares, and shared dispositive power with respect to 2,875,266 shares. BAMCO had sole voting and sole dispositive power with respect to no shares, shared voting power with respect to 2,402,445 shares, and shared dispositive power with respect to 2,608,445 shares. BCM had sole voting and sole dispositive power with respect to no shares, shared voting and shared dispositive power with respect to 266,821 shares. BAMCO and BCM are subsidiaries of BCG. Ronald Baron owns a controlling interest in BCG. The address of the reporting persons is 767 Fifth Avenue, 49th Floor, New York, NY 10153.

(15)

Number of shares beneficially owned is as of December 31, 2015 and is based on a Schedule 13G filed by Janus Capital Management on February 16, 2016. The reporting person had sole voting and sole dispositive power with respect to 1,844,073 shares, and shared voting and shared dispositive power with respect to 21,400 shares. The address of the reporting person is 151 Detroit Street, Denver, CO 80206.

(16)

Number of shares beneficially owned is as of December 31, 2015 and is based on a Schedule 13G/A filed by The Vanguard Group on February 10, 2016. The reporting person had sole voting power with respect to 23,819 shares, shared voting power with respect to 1,900 shares, sole dispositive power with respect to 2,067,787 shares, and shared dispositive power with respect to 23,786 shares. The address of the reporting person is 100 Vanguard Boulevard, Malvern, PA 19355.

(17)

Number of shares beneficially owned is as of December 31, 2015 and is based on a Schedule 13G filed by Wellington Management Group LLP (“Management Group”), Wellington Group Holdings LLP (“Holdings”), Wellington Investment Advisors Holdings LLP (“IA Holdings”), and Wellington Management Company LLP (“Management Company”) on February 11, 2016. Management Group, Holdings and IA Holdings had sole voting and sole dispositive power with respect to no shares, shared voting power with respect to 2,484,410 shares, and shared dispositive power with respect to 3,058,832 shares. Management Company had sole voting and sole dispositive power with respect to no shares, shared voting power with respect to 2,406,562 shares and shared dispositive power with respect to 2,855,787 shares. Management Group is the parent holding company of certain holding companies. IA Holdings controls directly or indirectly Management Company. IA Holdings is owned by Holdings, and Holdings is owned by Management Group. The address of the reporting persons is c/o Wellington Management Company LLP, 280 Congress Street, Boston, MA 02210.

(18)	Includes 249,952 shares issuable upon options exercisable within 60 days of April 1, 2016, as well as 135,876 shares of restricted stock that are subject to vesting restrictions. The number of all current executive officers and directors as a group does not include Brian J. Radecki or Scott L. Yinger.

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(1)

Consists of the following plans: the 1998 Plan, the 2007 Plan and the Company’s Employee Stock Purchase Plan. The Company’s 1998 Plan and the Company’s 2007 Plan provide for various types of awards, including options and restricted stock grants. In April 2007, the Company’s Board of Directors adopted the 2007 Plan, subject to stockholder approval, which was obtained on June 7, 2007. The 2007 Plan was amended in June 2010, June 2011 and June 2012. Stockholders approved these amendments on June 2, 2010, June 2, 2011, and June 5, 2012, respectively. All shares of common stock that were authorized for issuance under the 1998 Plan that, as of June 7, 2007, remained available for issuance under the 1998 Plan (excluding shares subject to outstanding awards) were rolled into the 2007 Plan and, as of that date, no shares of common stock remained available for issuance pursuant to new awards under the 1998 Plan. The 1998 Plan continues to govern unexercised and unexpired awards issued under the 1998 Plan prior to June 7, 2007. The Employee Stock Purchase Plan was adopted by the Board of Directors on April 17, 2006, and approved by the Company’s stockholders on June 8, 2006. The Employee Stock Purchase Plan was later amended by the Board of Directors on July 1, 2006, January 1, 2010, and April 6, 2015. The first two amendments to the Employee Stock Purchase Plan approved on July 1, 2006 and January 1, 2010, were ministerial in nature and were not subject to stockholder approval. On April 6, 2015, the Board of Directors approved the amended and restated Employee Stock Purchase Plan to increase the number of shares authorized for issuance under that plan. The Amended and Restated Employee Stock Purchase Plan was approved by the Company’s stockholders on June 3, 2015.

(2)	Includes 307 shares of common stock subject to restricted stock unit awards that vest over time. The actual number of shares issued with respect to these awards depends on whether the vesting conditions are met.

(3)	Does not include restricted stock unit awards.

(4)	Includes 104,029 shares of common stock available for future issuance under the Company’s stockholder-approved Employee Stock Purchase Plan, which amount includes 455 shares subject to purchase during the then-current purchase period.

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•	Link executive compensation with the achievement of overall corporate goals

•	Encourage and reward superior performance

•	Maintain competitive compensation levels in order to attract, motivate and retain talented executives

•	Align executives’ interests with those of the Company’s stockholders

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(1)

Mr. Yinger was not an executive officer when the 2015 executive cash incentive plan was approved by the Committee and did not participate in the executive cash incentive plan in 2015. Mr. Yinger remained subject to the cash incentive plan approved by his manager prior to his appointment as Interim CFO, pursuant to which he was entitled to earn up to 45% of his base pay subject to achievement of individual, subjective goals.

(2)	Mr. Linnington’s incentive cash compensation opportunity for 2015 consists entirely of potential commission payments based on achievement of Company-based performance objectives described below.

(1)	Named executive officers could receive between 0% and 200% credit for the Adjusted EBITDA component of their annual cash incentive award, depending upon actual Adjusted EBITDA achieved in 2015. Credit for performance between threshold and target and between target and maximum are determined by linear interpolation. No credit is given for performance below

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(1)	As discussed above, Mr. Florance’s 2015 annual cash incentive award is based solely on corporate performance goals.

(2)

Mr. Radecki’s Company financial goals and individual goals were given equal weight for 2015 similar to 2014, which reflects the Company’s emphasis on achievement of strategic and operational goals targeted to the Company’s growth and integration of acquired entities, as well as overall earnings and Mr. Radecki’s role with respect to the operations of the Company as a whole. Mr. Radecki served as the Company’s CFO until August 3, 2015, at which time he remained an employee of the Company and was compensated at a level commensurate with his position as Executive Vice President. Mr. Radecki did not receive a cash incentive payment for 2015 performance as he no longer served as an executive officer at the end of the fiscal year.

(3)

Mr. Yinger was not an executive officer when the 2015 executive cash incentive plan was approved by the Committee and did not participate in the executive cash incentive plan in 2015. Mr. Yinger remained subject to the cash incentive plan approved by his manager prior to his appointment as Interim CFO, pursuant to which he was entitled to earn up to 45% of his base pay subject to achievement of individual, subjective goals. As a result of achievement of his individual subjective goals, Mr. Yinger received a cash award equal to $116,355 for 2015.

(4)	Mr. Carchedi’s Company financial goals and individual goals were given equal weight for 2015 similar to 2014, which reflects the Company’s emphasis on achievement of strategic and operational goals targeted to the Company’s growth and integration of acquired entities, as well as overall earnings and Mr. Carchedi’s role with respect to the operations of the Company as a whole.

(5)	As indicated above, the Committee determined that Mr. Linnington’s potential commission payments, based on a percentage of the Company’s U.S. net new subscription contracts for information and marketplace services, balance out his overall compensation package, and therefore he is not eligible for a cash incentive award in 2015 apart from the commission plan.

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•	The Committee believes that options have a performance-based element because the option holder realizes value only if the stockholders also realize value – if the price of the Company’s common stock has increased from the grant date at the time the option is exercised.

•	In contrast, restricted stock awards have value when they vest regardless of the stock price, so they have retention value even if the Company’s common stock price declines or stays flat.

•	Grants of performance shares that vest based on achievement of a long-term performance goal also provide a long-term or multi-year performance measurement encouraging executives to achieve sustained growth, increasing executives’ focus on longer-term financial goals and further linking executives’ interests with those of our stockholders.

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(1)	Named executive officers could receive between 0% and 200% credit for the non-GAAP net income goal, depending upon actual non-GAAP net income achieved in 2014. Credit for performance between threshold and target and between target and maximum are determined by linear interpolation. No credit is given for performance below threshold and credit is capped at 200% of target.

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(1)	The number of shares granted is determined by dividing the earned award value by the fourth quarter 2014 average daily price ($161.56), rounded up to the nearest 100 shares.

(2)

Mr. Yinger was not an executive officer when the executive long-term equity incentive awards were granted in March 2015. Mr. Yinger was granted an equity award of 944 shares of restricted stock on May 28, 2015, in connection with the Company’s annual equity grants to managers and key employees. These shares of restricted stock vest in equal, annual installments over four years. The grant date fair value is $200,109.12, computed in accordance with FASB ASC Topic 718 pursuant to SEC rules.

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(1)

Calculated by multiplying the target award value by 2 (to take into account the potential for the maximum 200% credit) and the result by 1.2 (to take into account the potential +20% TSR adjustment). The amounts reported in this table under “3-year Performance Stock Award Values” differ from the grant date fair values for these awards reported in the “Summary Compensation Table” and the “Grants of Plan-Based Awards” table in this Proxy Statement, which are computed in accordance with FASB ASC Topic 718 pursuant to SEC rules.

(2)	The maximum number of shares was determined by dividing the target award value by the fourth quarter 2014 average daily price ($161.56), rounding up to the nearest 100 shares, then multiplying that number by 2 (to take into account the potential for the maximum 200% credit) and the result by 1.2 (to take into account the potential +20% TSR adjustment).

(3)	Mr. Yinger was not an executive officer when the three-year performance stock awards were granted in March 2015.

(1)

The number of shares granted is determined by dividing the option award value by Willis Towers Watson’s assessed value per option calculated using the Black-Scholes model, rounded up to the nearest 100 shares. The amounts reported in this table under “Option Award Values” differ from the grant date fair values for these awards reported in the “Summary Compensation Table” and the “Grants of Plan-Based Awards” table in this Proxy Statement.

(2)	Mr. Yinger was not an executive officer when the stock option awards were granted in March 2015.

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•	40% options;

•	40% performance-based restricted stock granted based on achievement of non-GAAP net income performance objectives and subject to a three-year vesting term; and

•	20% performance shares earned based on a three-year cumulative revenue performance objective and adjustment based on achievement of total stockholder return relative to TSR of companies within the Russell 1000.

(1)	Mr. Radecki resigned as Chief Financial Officer in 2015, and therefore was not eligible for the equity grants awarded in March 2016.

(2)	Mr. Yinger was not an executive officer in March 2016, and therefore was not eligible for the equity grants awarded at that time.

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(1)	Named executive officers could receive between 0% and 200% credit for the non-GAAP net income goal, depending upon actual non-GAAP net income achieved in 2015. Credit for performance between threshold and target and between target and maximum are determined by linear interpolation. No credit is given for performance below threshold and credit is capped at 200% of target.

(1)	The number of shares granted is determined by dividing the earned award value by the fourth quarter 2015 average daily price ($199.01), rounded up to the nearest 100 shares.

(2)	Mr. Radecki resigned as Chief Financial Officer in 2015, and therefore was not eligible for the equity grants awarded in March 2016.

(3)	Mr. Yinger was not an executive officer in March 2016, and therefore was not eligible for the equity grants awarded at that time.

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•	Oversees the Company’s compensation structure, policies and programs for executive officers and assesses whether the compensation structure establishes appropriate incentives for the executive officers;

•	Annually reviews and approves corporate goals and objectives relevant to CEO’s and other executive officers’ compensation;

•	Determines and sets compensation levels based on the Compensation Committee’s evaluation and, with respect to the other executives, the recommendations of the CEO;

•	Approves stock options and other stock incentive awards for executive officers;

•	Reviews and approves the design of benefit plans pertaining to executive officers;

•	Reviews and recommends employment agreements for executive officers;

•	Approves, amends or modifies the terms of any compensation or benefit plan that does not require stockholder approval;

•	Reviews the compensation of Directors for service on the Board and its committees and recommends changes in compensation to the Board; and

•	Reviews and discusses with management the Company’s compensation discussion and analysis and related disclosures required to be included in the Company’s annual report and proxy statement.

•	Updated the Company’s peer group;

•	Provided the Compensation Committee with a compensation analysis with respect to the competitiveness of the Company’s executive compensation programs; and

•	Conducted a market study of executive compensation practices to ensure that the Company’s compensation programs are reasonable and competitive.

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•	Supports the Compensation Committee by making recommendations and providing analyses and meets with Willis Towers Watson to discuss compensation initiatives and competitive practices;

•	The Chief Executive Officer is responsible for conducting an annual performance evaluation of each of the NEOs; and

•	Based on performance and competitive benchmarking reports, the CEO makes recommendations to the Compensation Committee for the compensation of the other NEOs.

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(1)

This column shows the aggregate grant date fair value of the awards granted in the years shown, computed in accordance with FASB ASC Topic 718 pursuant to SEC rules, including the grant date fair value of the maximum number of shares that could be issued pursuant to the three-year performance-based restricted stock awards granted in 2014 and 2015, which vest based on achievement of a three-year cumulative revenue goal for the three-year period commencing January 1 of the year of grant and running through December 31 of the third year following the date of grant (i.e. January 1, 2014 – December 31, 2016 for the 2014 grants and January 1, 2015 – December 31, 2017 for the 2015 grants) and are subject to adjustment based on the Company’s TSR over the respective three-year performance period. These amounts reflect the Company’s accounting expense and do not correspond to the actual value that will be realized by the named executive officers. Additional information regarding the size of the awards is set forth in the notes to the “Grants of Plan Based Awards” and “Outstanding Equity Awards” tables. Assumptions used in calculating the fair value for awards granted in 2015 are described in Note 15 to the audited financial statements in the Company’s Annual Report on Form 10-K for the period ended December 31, 2015. For additional information on the stock awards, see the “Equity Incentive Plan” discussion within the section titled “Compensation Discussion and Analysis” of this Proxy Statement.

(2)

Except as specifically noted otherwise in footnote 7 with respect to Mr. Linnington, this amount represents the annual cash incentive earned under the Company’s annual incentive bonus plan based on the executive’s achievement of individual and Company financial goals. These bonuses are awarded and paid in the following year after actual financial results are determined for the year for which performance was measured. For additional information regarding the annual cash incentives paid for 2015 performance, see the “2015 Annual Cash Incentive Program” discussion within the section titled “Compensation Discussion and Analysis” of this Proxy Statement.

(3a)	Pursuant to the CoStar Realty Information, Inc. 401(k) Plan (a defined contribution plan available generally to employees of the Company) (the “401(k) Plan”), for the 2015 plan year, Mr. Florance contributed a portion of his annual compensation and

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(3b)

Pursuant to the 401(k) Plan, for the 2015 plan year, Mr. Radecki contributed a portion of his annual compensation and CoStar made a matching contribution in the amount of $10,600. In 2015, the employer contribution was capped at the executive’s contribution amount up to a maximum of four percent of the executive’s gross pay. Mr. Radecki received a retirement gift valued at $19,556 and a tax gross up of $20,273 on the retirement gift, which was reported as income for tax purposes.

(3c)

Pursuant to the 401(k) Plan, for the 2015 plan year, Mr. Yinger contributed a portion of his annual compensation and CoStar made a matching contribution in the amount of $10,600. In 2015, the employer contribution was capped at the executive’s contribution amount up to a maximum of four percent of the executive’s gross pay. Mr. Yinger received a tax gross up of $1,619 on certain employee incentives or gifts and of $359 on his employment service award, each of which was reported as income for tax purposes.

(3d)

Pursuant to the 401(k) Plan, for the 2015 plan year, Mr. Carchedi contributed a portion of his annual compensation and CoStar made a matching contribution in the amount of $10,600. In 2015, the employer contribution was capped at the executive’s contribution amount up to a maximum of four percent of the executive’s gross pay. Mr. Carchedi received a tax gross up of $2,945 on certain employee incentives or gifts, which was reported as income for tax purposes.

(3e)

Pursuant to the 401(k) Plan, for the 2015 plan year, Mr. Linnington contributed a portion of his annual compensation and CoStar made a matching contribution in the amount of $10,600. In 2015, the employer contribution was capped at the executive’s contribution amount up to a maximum of four percent of the executive’s gross pay. Mr. Linnington received an aggregate of $21,017 of perquisites or personal benefits in 2015, including employee incentives and gifts incidental to business meetings, trips, transactions and events, and family accompaniment while on business travel. Mr. Linnington also received a tax gross up of $5,229 on certain business travel reported as income for tax purposes, a tax gross up of $5,229 in connection with family travel expenses, and a tax gross up of $2,670 in connection with certain employee incentives or gifts reported as income for tax purposes.

(4)	Mr. Radecki resigned as the Company’s Chief Financial Officer effective August 3, 2015, at which time he remained an employee of the Company and was compensated at a level commensurate with his position as Executive Vice President. Mr. Radecki did not receive a cash incentive payment for 2015 performance as he no longer served as an executive officer at the end of the fiscal year.

(5)

Mr. Yinger served as Interim Chief Financial Officer commencing August 3, 2015. Prior to that appointment, Mr. Yinger served as Vice President, Finance at a compensation level commensurate with that position. Mr. Yinger was not an executive officer when the executive long-term equity incentive awards were granted in 2015 and the 2015 executive cash incentive plan was approved by the Committee and did not participate in the executive cash incentive plan in 2015. Mr. Yinger remained subject to the cash incentive plan approved by his manager prior to his appointment as Interim Chief Financial Officer.

(6)	Mr. Linnington was appointed as an executive officer of the Company in June 2014.

(7)	This amount represents the quarterly commission payments paid to Mr. Linnington for performance in 2015, which are based on the Company’s monthly net new subscription contract amounts.

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(1)

Amounts shown in these columns are possible amounts payable under the Company’s cash incentive plan for 2015. The actual cash payments made in 2016 for 2015 performance under the Company’s cash incentive plan are reported in the Summary Compensation table above. The Company’s cash incentive plan in effect for 2015 is described more fully in the section titled “Compensation Discussion and Analysis—2015 Annual Cash Incentive Program” within this Proxy Statement.

(2)

Amounts shown in these columns are the possible number of shares that may vest pursuant to the three-year performance-based restricted stock awards granted in March 2015 under the Company’s 2007 Plan, which vest based on achievement of a three-year cumulative revenue goal for the period from January 1, 2015 through December 31, 2017 and are subject to adjustment based on the Company’s TSR over the three-year performance period. See the section titled “Compensation Discussion and Analysis—2015 Multi-Year Performance Shares for a description of the material terms of these awards.

(3)

Amounts shown in this column represent restricted stock awards granted to named executive officers in 2015 in respect of achievement of 2014 non-GAAP net income goals, except with respect to (a) Mr. Yinger who was not an executive officer when the executive long-term equity incentive awards were granted in 2015 and instead received an equity award of 944 shares on May 28, 2015, in connection with the Company’s annual equity grants to managers and key employees, which award vests in equal, annual installments over four years, and (b) with respect to Mr. Yinger’s service award of three shares granted on June 7, 2015 in connection with his 5th anniversary of employment with the Company pursuant to the Company’s service award program which grants anniversary awards to all employees on the same terms on every five-year anniversary. The closing price of the Company’s common stock on May 28, 2015 was $211.98, and the closing price of the Company’s common stock on June 7, 2015 was $210.15. All service award grants are fully vested upon grant, but are subject to a one-year holding period.

(4)	Amounts shown in this column represent stock options granted to named executive officers in 2015 that vest in equal, annual installments over three years after the date of grant.

(5)	The exercise price is the closing price of our common stock on the date of grant, as reported on the Nasdaq Global Select Market.

(6)	The amounts shown in this column represent the grant date fair value of each equity award computed in accordance with FASB ASC Topic 718 pursuant to SEC rules. For a discussion of the assumptions used in calculating the fair value of each equity

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(7)

Amount shown represents the grant date fair value computed in accordance with FASB ASC Topic 718 pursuant to SEC rules of the maximum number of shares that could be issued pursuant to the three-year performance-based restricted stock awards, which vest based on achievement of a three-year cumulative revenue goal for the period from January 1, 2015 through December 31, 2017 and are subject to adjustment based on the Company’s TSR over the three-year performance period. For a discussion of the assumptions used in calculating the fair value of each equity award see Note 15 to the audited financial statements in the Company’s Annual Report on Form 10-K for the period ended December 31, 2015.

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(1)

The dates of grant of each named executive officer’s stock option awards outstanding as of December 31, 2015 are set forth in the table above, and the vesting dates for each stock option award can be determined based on the vesting schedules described in this footnote. The stock option granted on July 16, 2009 became exercisable in installments of 25 percent on the first four anniversaries of the date of grant. All other awards of stock options in the table above are exercisable in installments of one third on the first three anniversaries of the date of grant, assuming continued employment.

(2)	Market value based on the closing price of the Company’s common stock as of December 31, 2015 of $206.69 per share.

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(3)

Represents the maximum number of shares that could be issued pursuant to the three-year performance-based restricted stock awards, which vest based on achievement of a three-year cumulative revenue goal. The revenue goal for the grants made in 2015 are for the period from January 1, 2015 through December 31, 2017 and are subject to adjustment based on the Company’s TSR over the three-year performance period. The revenue goal for the grants made in 2014 are for the period from January 1, 2014 through December 31, 2016 and are subject to adjustment based on the Company’s TSR over the three-year performance period.

(4a)	As of December 31, 2015, Mr. Florance held (i) 11,200 shares of restricted stock, which vested in their entirety on March 11, 2016, (ii) 10,267 shares of restricted stock, which vest in equal installments on February 28, 2016 and 2017, and (iii) 18,900 shares of restricted stock, which vest in equal installments on March 5, 2016, 2017 and 2018.

(4b)	As of December 31, 2015, Mr. Radecki held (i) 2,700 shares of restricted stock, which vested in their entirety on March 11, 2016, (ii) 3,400 shares of restricted stock, which vest in equal installments on February 28, 2016 and 2017, and (iii) 8,200 shares of restricted stock, which vest in equal installments on March 5, 2016, 2017 and 2018.

(4d)	As of December 31, 2015, Mr. Carchedi held (i) 2,400 shares of restricted stock, which vested in their entirety on March 11, 2016, (ii) 3,400 shares of restricted stock, which vest in equal installments on February 28, 2016 and 2017, and (iii) 5,000 shares of restricted stock, which vest in equal installments on March 5, 2016, 2017 and 2018.

(4e)	As of December 31, 2015, Mr. Linnington held (i) 7,123 shares of restricted stock, which vest in equal installments on September 11, 2016, 2017 and 2018, and (ii) 4,300 shares of restricted stock, which vest in equal installments on March 5, 2016, 2017 and 2018.

(1)

With respect to shares of common stock sold upon exercise (on the date acquired), the value was calculated by multiplying the difference between the sale price per share and the exercise price per share by the number of shares sold and aggregating all such sales during 2015. With respect to shares of common stock held upon exercise, the value was calculated by multiplying the difference between the closing price of our common stock on the date of exercise and the exercise price per share by the number of shares acquired and aggregating all such exercises during 2015.

(2)	Calculated by multiplying the number of shares acquired upon vesting by the closing price of our common stock on the vesting date.

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(1)

Consists of the values realizable by the named executive officers with respect to unvested stock options (that are in-the-money) and restricted stock under the Company’s 1998 and 2007 Plans in the event of a change of control or substantial corporate change, as defined in the plans and described above, as of December 31, 2015, which values are summarized in the table below. The intrinsic value of the stock options was calculated by multiplying the number of shares underlying the unvested options by the difference between the exercise price of each unvested option and the closing price of the Company’s common stock ($206.69) on December 31, 2015, excluding options with an exercise price greater than the closing price on December 31, 2015. The intrinsic value of the restricted stock was calculated using the closing price of the Company’s common stock on December 31, 2015 ($206.69).

(2)

Includes base salary for one year ($695,000), bonus for 2015 ($1,390,000), and the immediate vesting of all unvested stock options ($2,506,875). The value of stock option vesting included in this amount was calculated by multiplying the number of unvested options by the difference between the exercise price of each unvested option and the closing price of the Company’s common stock ($206.69) on December 31, 2015, excluding options with an exercise price greater than the closing price on December 31, 2015.

(3)	Consists of the cash incentive bonus for 2015.

(4)

Mr. Florance’s employment agreement provides for a termination payment if there is an acquisition or change of control of the Company and Mr. Florance terminates his employment within one year after that event. Assuming, for these purposes, that those conditions are met as of December 31, 2015, Mr. Florance would be entitled to the amount set forth, which includes base salary for one year ($695,000), his cash incentive bonus for 2015 ($1,390,000), the immediate vesting of all unvested stock options ($2,506,875) and all unvested restricted stock ($12,659,142) under the respective stock incentive plans, and an estimated gross-up payment to cover taxes assessed under Section 4999 of the Tax Code ($1,364,365). The value of stock option vesting included in this amount was calculated by multiplying the number of unvested options by the difference between the exercise price of each unvested option and the closing price of the Company’s common stock ($206.69) on December 31, 2015, excluding options with an exercise price greater than the closing price on December 31, 2015. The value of the restricted stock was calculated by multiplying the number of outstanding restricted shares by the closing price of the Company’s common stock on December 31, 2015 ($206.69).

(5)	Mr. Linnington’s offer of employment provides for a termination payment equal to six months base salary if his employment is involuntarily terminated by the Company for any reason other than cause, subject to his execution of a release.

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1.	Purpose

2.	Definitions

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4.	Effective Date and Termination of Plan

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5.	Common Shares Subject to the Plan and to Awards

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8.	Restricted Stock and Restricted Stock Units

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10.	Conditions and Restrictions Upon Securities Subject to Awards

11.	Adjustment of and Changes in the Stock

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12.	Qualifying Performance-Based Compensation

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14.	Compliance with Laws and Regulations

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15.	Withholding

16.	Administration of the Plan

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18.	Miscellaneous

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I.	Introduction.

II.	Definitions.

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(i)

from the tenth (10th) trading day preceding through the tenth (10th) trading day following the date on which the consolidated accounts or annual corporate accounts of the Company are made public, and from the date on which the governing bodies of the Company have knowledge of information which, if made public, would have a significant impact on the market price of the Common Shares through the tenth (10th) trading day after such information has been made public; or

(ii)	or such other black-out periods applicable to the sale of Common Shares under US legislation or imposed by the Company which provides protection against insider trading comparable to that provided by Section L. 225-197-1 of the French Commercial Code.

III.	Eligibility to Participate and Limitations.

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IV.	Conditions of the Restricted Stock Awards.

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V.	Adjustments to Common Shares.

VI.	Death or Disability.

VII.	Reporting Obligations and Withholding.

VIII.	Interpretation.

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IX.	Employment Rights.

X.	Language.

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1.	Purpose. The purpose of this Plan is to provide certain employees of CoStar Group, Inc. and its Affiliates with incentive compensation based upon the level of achievement of financial, business and/or other performance criteria. This Plan is intended to permit the payment of Cash Incentives that may qualify as performance-based compensation under Code Section 162(m).

2.	Definitions.

(a)	“Affiliate” means (i) any entity that, directly or indirectly, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest.

(b)	“Board” means the Board of Directors of the Company.

(c)	“Cash Incentive” means a cash payment made pursuant to this Plan with respect to a particular Performance Period, determined pursuant to Section 8 below.

(d)

“Cash Incentive Formula” means as to any Performance Period, the formula established by the Committee pursuant to Section 6 in order to determine the Cash Incentive amounts, if any, to be paid to Participants based upon the level of achievement of targeted goals for the selected Performance Measures. The formula may differ from Participant to Participant or business group to business group. The Cash Incentive Formula shall be of such a nature that an objective third party having knowledge of all the relevant facts could determine whether targeted goals for the Performance Measures have been achieved.

(e)	“Code” means the Internal Revenue Code of 1986, as amended.

(f)	“Committee” means the Compensation Committee of the Board or any subcommittee thereof formed by the Compensation Committee for the purpose of acting as the Committee hereunder. For purposes of satisfying the requirements of Code Section 162(m) and the regulations thereunder, the Committee is intended to consist solely of “outside directors” as such term is defined in Code Section 162(m).

(g)	“Company” means CoStar Group, Inc., a Delaware corporation.

(h)	“Fiscal Year” means the calendar year.

(i)	“Officer” means an officer of the Company or its Affiliates.

(j)	“Participant” means an Officer.

(k)	“Performance-Based Compensation” means compensation that qualifies as “performance-based compensation” within the meaning of Code Section 162(m).

(l)

“Performance Measure” means any one or more of the following performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a region, business unit, Affiliate or business segment, either individually, alternatively or in any combination, and measured either on an absolute basis or relative to a pre-established target, to a previous period’s results or to a designated comparison group, in each case as specified by the

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(m)	“Performance Period” means any Fiscal Year or such other period as determined by the Committee.

(n)	“Plan” means this CoStar Group, Inc. 2016 Cash Incentive Plan.

(o)

“Predetermination Date” means, for a Performance Period, (i) the earlier of 90 days after commencement of the Performance Period or the expiration of 25% of the Performance Period, provided that the achievement of targeted goals under the selected Performance Measures for the Performance Period is substantially uncertain at such time; or (ii) such other date on which a performance goal is considered to be pre-established pursuant to Code Section 162(m).

3.	Eligibility. The individuals eligible to participate in this Plan for a given Performance Period shall be Officers.

4.	Plan Administration.

(a)

The Plan shall be administered by the Committee. The Committee shall have full power and authority, subject to the provisions of the Plan and subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board, to: (i) select the Participants to whom Cash Incentives may from time to time be paid hereunder; (ii) determine the terms and conditions, not inconsistent with the provisions of the Plan, of each Cash Incentive; (iii) determine the time when Cash Incentives will be granted and paid and the Performance Period to which they relate; (iv) certify the achievement of Performance Measures and the maximum amount of the Cash Incentive payable for each Participant in respect of Performance Periods; (v) determine whether payment of Cash Incentives may be deferred by Participants as provided in Section 8(b); (vi) interpret and administer the Plan and any instrument or agreement entered into in connection with the Plan; (vii) correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Cash Incentive award in the manner and to the extent that the Committee shall deem desirable to carry it into effect; (viii) establish such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.

(b)	Decisions of the Committee shall be final, conclusive and binding on all persons or entities, including the Company, any Affiliate, any Participant and any person claiming any benefit or right under an award or under the Plan.

(c)

Notwithstanding the foregoing, to the extent consistent with Code Section 162(m), the Committee may delegate the responsibility for administering the Plan, subject to such limitations as the Committee deems appropriate. All references in the Plan to the "Committee" shall be, as applicable, to the Committee or any other committee or officer to whom the Board or the Committee has delegated authority to administer the Plan.

5.	Term. This Plan shall be effective upon its approval at the Company’s 2016 annual stockholders meeting. Once approved by the Company's stockholders, this Plan shall continue until the earlier of (i) a termination under Section 9 of this Plan, (ii) the date any stockholder approval requirement under Code Section 162(m)

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6.	Cash Incentives. Prior to the Predetermination Date for a Performance Period, the Committee shall designate or approve in writing, the following:

(d)	Applicable Cash Incentive Formula for each Participant, which may be for an individual Participant or a group of Participants.

7.	Determination of Amount of Cash Incentive.

(a)

Calculation. After the end of each Performance Period, the Committee shall certify in writing (to the extent required under Code Section 162(m)) the extent to which the targeted goals for the Performance Measures applicable to each Participant for the Performance Period were achieved or exceeded. The Cash Incentive for each Participant shall be determined by applying the Cash Incentive Formula to the level of actual performance that has been certified by the Committee. Notwithstanding any contrary provision of this Plan, the Committee, in its sole discretion, may eliminate or reduce the Cash Incentive payable to any Participant below that which otherwise would be payable under the Cash Incentive Formula. The aggregate Cash Incentive(s) payable to any Participant during any Fiscal Year shall not exceed $10 Million.

(b)

Right to Receive Payment. Each Cash Incentive under this Plan shall be paid solely from general assets of the Company and its Affiliates. This Plan is unfunded and unsecured; nothing in this Plan shall be construed to create a trust or to establish or evidence any Participant’s claim of any right to payment of a Cash Incentive other than as an unsecured general creditor with respect to any payment to which he or she may be entitled.

8.	Payment of Cash Incentives.

(a)	Timing of Distributions. The Company and its Affiliates shall distribute amounts payable to Participants as soon as is administratively practicable following the determination and written

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(b)

Payment. The payment of a Cash Incentive, if any (as determined by the Committee at the end of the Performance Period), with respect to a specific Performance Period requires that the employee be an active employee on the Company’s or its Affiliate’s payroll on the last day of each applicable Performance Period, subject to the terms of any employment agreements in effect prior to the effective date of this Plan and the following:

i.	Leave of Absence or Non-Pay Status. A Participant may receive a Cash Incentive while on an approved leave of absence or non-pay status. Such Cash Incentive shall be prorated in a manner that the Committee determines in it sole discretion.

ii.

Disability, Workforce Restructuring, Voluntary Severance Incentive Program, Divestiture or Retirement. To the extent permitted by Code Section 162(m), a Participant who terminates due to disability, participation in a workforce restructuring or voluntary severance incentive program, divestiture or retirement under the Company’s retirement policies may receive a prorated Cash Incentive to the extent the Cash Incentive would have been paid had the Participant remained actively employed. The method in which a Cash Incentive is prorated shall be determined by the Committee in its sole discretion.

iii.	Death. The estate of a Participant who dies prior to the end of a Performance Period or after the end of a Performance Period but prior to payment may receive a Cash Incentive or prorated Cash Incentive. The method in which a Cash Incentive is prorated shall be determined by the Company in its sole discretion.

(c)

Change in Status. A Participant who has a change in status that results in being ineligible to participate in this Plan or eligible in more than one variable pay plan, including this Plan, in a Performance Period may receive a prorated Cash Incentive, if any (as determined by the Committee at the end of the Performance Period), under this Plan. The method in which a Cash Incentive is prorated shall be determined by the Company in its sole discretion.

(d)

Code Section 409A. The Cash Incentives payable under the Plan are intended to be excluded from coverage under Code Section 409A pursuant to the “short-term deferral rule.” However, to the extent that any Cash Incentive under the Plan is subject to Code Section 409A, the terms and administration of such Cash Incentive shall comply with the provisions of such Section, applicable IRS guidance and good faith reasonable interpretations thereof, and, to the extent necessary to achieve compliance, shall be modified, replaced, or terminated at the discretion of the Committee.

9.

Amendment and Termination. The Committee may amend, modify, suspend or terminate this Plan or any Cash Incentive granted hereunder, in whole or in part, at any time, including the adoption of amendments deemed necessary or desirable to correct any defect or to supply omitted data or to reconcile any inconsistency in this Plan or in any Cash Incentive granted hereunder; provided, however, that no amendment, alteration, suspension or discontinuation shall be made which would increase the amount of compensation payable pursuant to such Cash Incentive.

10.	Withholding. Distributions pursuant to this Plan shall be subject to all applicable taxes and contributions required by law to be withheld in accordance with procedures established by the Company.

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11.	No Additional Participant Rights.

(a)	No individual or Participant shall have any claim to be granted any Cash Incentive under the Plan, and the Company has no obligation for uniformity of treatment of Participants under the Plan.

(b)

Furthermore, nothing in the Plan or any Cash Incentive granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Affiliate or limit in any way the right of the Company or any Affiliate to terminate a Participant's employment or other relationship at any time, with or without cause.

12.	Successors. All obligations of the Company or its Affiliates under the Plan with respect to Cash Incentives shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all the business and/or assets of the Company.

13.	Nonassignment. The rights of a Participant under this Plan shall not be assignable or transferable by the Participant except by will or the laws of descent and distribution, except to the extent a Participant designates one or more beneficiaries on a Company-approved form who may receive payment under the Plan after the Participant's death.

14.

Severability. If any provision of the Plan or any Cash Incentive is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Cash Incentive under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee's determination, materially altering the intent of the Plan or the Cash Incentive, such provision shall be stricken as to such jurisdiction, person or Cash Incentive, and the remainder of the Plan and any such Cash Incentive shall remain in full force and effect.

15.	Governing Law. The Plan, all Cash Incentives granted hereunder and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Delaware without giving effect to principles of conflicts of law.

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