form_8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported): June 7, 2007
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COSTAR
GROUP, INC.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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0-24531
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52-2091509
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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2
Bethesda Metro Center, Bethesda, Maryland
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20814
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (301) 215-8300
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Not
Applicable
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(Former
name or former address, if changed since last
report.)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
At
the 2007 Annual Meeting of
shareholders of CoStar Group, Inc. (the “Company”) held on June 7, 2007, the
shareholders of the Company approved the CoStar Group, Inc. 2007 Stock Incentive
Plan (the “2007 Plan”), which had previously been adopted by the Company’s Board
of Directors subject to shareholder approval. A brief description of
the material terms and conditions of the 2007 Plan is set forth
below. The following description of the 2007 Plan is qualified in its
entirety by reference to the complete text of the 2007 Plan, which is attached
as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference
herein.
The
2007 Plan replaced the Company’s
1998 Stock Incentive Plan (the “1998 Plan”), which was scheduled to expire on
May 8, 2008. No further awards will be made under the 1998 Plan;
however, the 1998 Plan will continue to govern unexercised and unexpired awards
previously granted under the 1998 Plan.
Plan
Administration.
The
2007
Plan is administered by the Compensation Committee of the Company's board of
directors, which Committee is composed of individuals who are “non-employee
directors” (as that term is defined under Rule 16b-3 of the Securities
Exchange Act of 1934, as amended) and “outside directors” (within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”)). All of the members of the Compensation Committee are independent as
defined under Rule 4200(a)(15) of the NASD’s Listing Standards for
NASDAQ-listed companies. The Compensation Committee has authority to, among
other things:
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Interpret
and administer the 2007 Plan;
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Make
rules and regulations relating to the administration of the 2007
Plan;
and
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Make
any other determinations and take any other action that it deems
necessary
or desirable for the administration of the 2007
Plan.
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Decisions
of the Committee or another person delegated responsibilities under the 2007
Plan shall be final, conclusive and binding on all persons.
Stock
Subject to the 2007 Plan.
The
2007
Plan authorizes the issuance of up to 1.0 million shares of common stock,
plus (1) 121,894 shares, which represents the number of shares that were
authorized for issuance under our 1998 Plan that, as of June 7, 2007, were
available for issuance under the 1998 Plan (not including any shares that were
subject to, as of June 7, 2007, outstanding awards under the 1998 Plan or
any Shares that prior to June 7, 2007 were issued pursuant to awards
granted under the 1998 Plan) and (2) up to an additional 1,484,133 shares
which are currently subject to outstanding awards under the 1998 Plan as of
June 7, 2007, but that on or after such date cease for any reason to be
subject to such awards (other than by reason of exercise or
settlement of the awards to the extent they are exercised for or settled in
vested and nonforfeitable shares). If any shares that are subject to an award
under the 2007 Plan are forfeited, are cancelled, expire, lapse or otherwise
terminate without the issuance of such shares or are retained by the Company
in
payment of the exercise price or tax withholding obligations related to the
award, those shares will again be available for grant under the 2007 Plan.
Further, any shares of common stock delivered to the Company in payment or
satisfaction of the exercise price or tax withholding obligations related to
the
award will be available for grant under the 2007 Plan. The shares
issued under the 2007 Plan may consist, in whole or in part, of authorized
but
unissued shares or shares reacquired by the Company.
Limitations.
Subject
to adjustment as provided in the 2007 Plan, no participant shall be eligible
to
receive in any one calendar year awards relating to more than
200,000 shares of the Company's common stock.
Eligibility.
The
2007
Plan permits awards to employees, officers, consultants and directors of the
Company and its subsidiaries.
Types
of Awards.
The
2007
Plan provides for the grant of options (including non-statutory options), stock
appreciation rights, restricted stock, and restricted stock units.
Options. Incentive
stock options and nonqualified stock options may be granted under the 2007
Plan,
either alone or in combination with other awards. The terms of any option grant
generally are determined by the Compensation Committee. The price at which
a
share may be purchased under an option may not be less than the fair market
value of a share on the date the option is granted. Fair market value generally
means the closing price for the Company’s Common Stock on the NASDAQ National
Market on the date of grant. The 2007 Plan provides that the Compensation
Committee shall establish the term of each option, which in no case shall exceed
a period of ten years from the date of grant.
Stock
Appreciation Rights. Stock appreciation rights entitle a
participant to receive payment from the Company in an amount determined by
multiplying the difference between the fair market value of the shares on the
date of exercise and the fair market value on the date of grant by the number
of
shares subject to the award. The terms of any grant of stock appreciation rights
generally are determined by the Compensation Committee. Stock appreciation
rights may be granted in tandem with an option or alone. The grant price of
a
tandem stock appreciation right is equal to the exercise price of the related
option, and the grant price of a freestanding stock appreciation right is equal
to the fair market value of the common stock on the grant date.
Restricted
Stock and Restricted Stock Units. Restricted stock and
restricted stock units reflect a right to receive shares of stock upon the
satisfaction of certain terms, conditions and restrictions. Both may be issued
under the 2007 Plan on such terms and conditions as the 2007 Plan permits and
generally are subject to terms determined by the Compensation Committee.
Restricted stock and restricted stock unit awards may be paid in cash, stock
or
a combination of cash and stock. Participants holding restricted stock or
restricted stock units may be permitted to receive dividends paid with respect
to underlying shares or dividend equivalents, as determined by the
Committee. Unless otherwise determined by the Compensation Committee,
holders of restricted stock may exercise full voting rights with respect to
those shares. Holders of restricted stock units shall have no voting
rights with respect to the shares underlying such units until the shares of
common stock are reflected as issued and outstanding on the Company’s stock
ledger.
No
Discount Stock Options.
Stock
options and stock appreciation rights must be priced at or above the fair market
value of the stock on the date of grant.
No
Repricing.
The
repricing of stock options or stock appreciation rights is prohibited. This
applies to both direct and indirect repricings.
Maximum
Term.
A
stock
option or stock appreciation right may not have a term longer than ten
years.
Minimum
Vesting Period.
Except
upon a change in control of the Company or the death or disability of the
grantee, no award of restricted stock or restricted stock units that vests
based
solely on continued service (and not performance) shall vest earlier than three
years from the date of grant and no award of restricted stock or restricted
stock units that vests based on achievement of performance criteria shall vest
earlier than one year from the date of grant.
Performance
Goals.
Awards
under the 2007 Plan may be made subject to the attainment of performance goals
relating to one or more business criteria within the meaning of
Section 162(m) of the Code, including one or more of the
following:
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(1)
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cash
flow (before or after dividends),
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(2)
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earnings
or earnings per share (including earnings before interest, taxes,
depreciation and amortization),
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(5)
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total
stockholder return,
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(6)
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return
on capital or investment (including return on total capital, return
on
invested capital, or return on
investment),
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(7)
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return
on assets or net assets,
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(8)
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market
capitalization,
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(9)
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economic
value added,
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(10)
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debt
leverage (debt to capital),
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(12)
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income
or net income,
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(14)
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operating
profit or net operating profit,
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(15)
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operating
margin or profit margin,
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(16)
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return
on operating revenue,
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(17)
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cash
from operations,
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(19)
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operating
revenue, or
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(20)
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customer
service (collectively, the “Performance
Criteria”).
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Any
Performance Criteria may be used to measure the performance of the Company
as a
whole or with respect to any business unit or subsidiary of the Company, either
individually, alternatively or in any combination, and may be measured either
annually or cumulatively over a period of years, on an absolute basis or
relative to a pre-established target, to previous period results or to a
designated comparison group, in each case as specified by the Compensation
Committee. The Compensation Committee shall appropriately adjust any evaluation
of performance under the Performance Criteria to exclude the following items:
the effects of charges for restructurings, discontinued operations,
extraordinary items and all items of gain, loss or expense determined to be
extraordinary or unusual in nature or related to the acquisition or disposal
of
a segment of a business or related to a change in
accounting
principle all as determined in accordance with standards established by opinion
No. 30 of the Accounting Principles Board (APA Opinion No. 30) or
other applicable or successor accounting provisions, as well as the cumulative
effect of accounting changes, in each case as determined in accordance with
generally accepted accounting principles or identified in the Company’s
financial statements or notes to the financial statements. The Compensation
Committee may appropriately adjust any evaluation of performance under a
qualifying Performance Criteria to exclude any of the following events that
occurs during a performance period: (1) asset write-downs,
(2) litigation, claims, judgments or settlements, (3) the effect of
changes in tax law or other such laws or provisions affecting reported results,
(4) accruals for reorganization and restructuring programs and
(5) expenses for any amounts for payment under the 2007 Plan or any other
compensation arrangement maintained by the Company.
Tax
Withholding.
The
Company may specify the terms and conditions on which any award recipient must
satisfy any tax obligations occurring under federal, state, local or foreign
law, and may withhold issuance of any shares of common stock until such terms
and conditions are met. The Committee may permit tax withholding
obligations to be satisfied through mandatory or elective sale of shares of
common stock; by having the Company withhold a portion of the shares of common
stock that would otherwise be issued to the grantee upon exercise of an option
or vesting of an award; or by tendering shares of common stock previously
acquired by the grantee.
Assignability.
Awards
granted under the 2007 Plan are generally not transferable or assignable, except
by will or the laws of descent and distribution. However, participants may
be
permitted to assign or transfer an award to the extent allowed by the
Compensation Committee in its discretion and subject to Section 422 of the
Code.
Adjustments.
The
number and kind of securities available for issuance under the 2007 Plan
(including under any awards then outstanding), and the limits on the number
and
kind of securities that may be issued under the 2007 Plan, shall be equitably
adjusted by the Compensation Committee to reflect any reorganization,
reclassification, combination of shares, stock split, reverse stock split,
spin-off, dividend or distribution of securities, property or cash (other than
regular, quarterly cash dividends), or any other equity restructuring
transaction, as that term is defined in Statement of Financial Accounting
Standards No. 123 (revised). Such adjustment may be designed
to
comply
with Section 425 of the Code or, except as otherwise expressly provided in
the 2007 Plan, may be designed to treat the securities available under the
2007
Plan and subject to awards as if they were all outstanding on the record
date
for such event or transaction or to increase the number of such securities
to
reflect a deemed reinvestment in securities of the amount distributed to
the
Company’s stockholders. The terms of any outstanding award under the 2007 Plan
shall also be equitably adjusted by the Compensation Committee as to price,
number or kind of securities subject to such award, vesting, and other terms
to
reflect the foregoing events, which adjustments need not be uniform as between
different awards or different types of awards.
In
the
event there are any other change in the Company’s common stock, by reason of a
change of control, other merger, consolidation or otherwise in circumstances
that do not involve an equity restructuring transaction, as that term is defined
in Statement of Financial Accounting Standards No. 123 (revised), then the
Compensation Committee shall determine the appropriate adjustment, if any,
to be
effected. In addition, in the event of such change described in this paragraph,
the Compensation Committee may accelerate the time or times at which any award
under the 2007 Plan may be exercised and may provide for cancellation of such
accelerated awards that are not exercised within a time prescribed by the
Compensation Committee in its sole discretion.
There
is
no right to purchase fractional shares that result from any adjustment in awards
under the 2007 Plan. In case of any such adjustment, the shares of common stock
subject to the award shall be rounded down to the nearest whole
share.
Change
in Control.
The
Compensation Committee shall have the discretion, exercisable at any time before
a sale, merger, consolidation, reorganization, liquidation, dissolution or
change in control of the Company, to take such action as it determines to be
necessary or advisable with respect to awards under the 2007 Plan.
Amendment
and Termination.
Unless
sooner terminated as provided in the 2007 Plan, the 2007 Plan shall terminate
on
April 26, 2017. Termination will not affect grants and awards then
outstanding.
Deferral.
The
Compensation Committee may permit or require a participant to defer receipt
of
the payment of any award of restricted stock or restricted stock units to the
extent permitted by Section 409A of the Code.
Effective
Date.
The
2007
Plan was effective as of April 26, 2007, subject to the approval by the
Company’s stockholders, which was obtained on June 7, 2007.
Item
9.01. Financial Statements and Exhibits.
Exhibit
No. Description
Exhibit
99.1 CoStar
Group, Inc. 2007 Stock Incentive Plan
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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COSTAR
GROUP, INC.
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By:
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Date:
June 13, 2007
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/s/
Brian J.
Radecki
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Name: Brian
J. Radecki
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Title: Chief
Financial Officer
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Exhibit
Index
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Exhibit
99.1
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CoStar
Group, Inc. 2007 Stock Incentive
Plan
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