CSGP DEF 14A Report ended June 3, 2020

[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:

(4)	Date Filed:

---

---

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 ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2020 ;

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

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

---

---

---

---

1.	By Internet:

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

3.	By Mail: If you receive a complete set of proxy materials by U.S. mail, 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.

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

•

If you sign, date and return your 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” the election of each of the director nominees, “FOR” ratification of the independent registered public accounting firm, and “FOR” the approval of the advisory resolution to approve executive compensation.

•	Delivering to the Corporate Secretary at our principal executive office written notice that you are revoking your proxy;

•	Submitting a properly executed proxy bearing a later date;

•	Voting again online before the meeting at www.proxyvote.com; or

•	Before the electronic polls close, submitting a later-dated vote online during the Annual Meeting, via the Internet, at www.virtualshareholdermeeting.com/CSGP2020.

---

---

---

---

---

---

---

(1)	Audit fees include fees in connection with CoStar’s: (1) annual consolidated financial statements; (ii) quarterly interim financial information; (iii) statutory audits required internationally; (iv) business acquisitions and (iv) S-8 registration statements.

---

---

---

---

•	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 philosophy, programs, policies and practices;

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

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

---

---

---

(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 around the anniversary of 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.

---

(1)	This column shows the amount of cash compensation earned in 2019 for Board and Committee service.

(2)

This column shows the aggregate grant date fair value of shares of restricted stock granted in 2019 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 19, 2019 for his or her 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 award's vesting period and is based on the closing price of our common stock on the date of grant, which was $598.61 on September 19, 2019.

---

(1)	Mr. Musslewhite and Ms. Sams were appointed as directors of the Company in December 2019 and did not receive any restricted stock grants for the portion of the year during which they served on the Board.

---

(1)	Age determined as of June 1, 2020.

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

(3)	Includes years of service with acquired companies.

---

---

---

•	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 current directors;

•	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, 2020, 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, 2020, the Company had 36,751,214 shares of common stock outstanding.

(2)	Includes 1,268 shares of restricted stock that are subject to vesting restrictions.

(3)	Includes 129,887 shares issuable upon options exercisable within 60 days of April 1, 2020, as well as 63,941 shares of restricted stock that are subject to vesting restrictions.

(4)	Includes 10,433 shares issuable upon options exercisable within 60 days of April 1, 2020, as well as 20,028 shares of restricted stock that are subject to vesting restrictions.

(5)	Includes 7,033 shares issuable upon options exercisable within 60 days of April 1, 2020, as well as 11,794 shares of restricted stock that are subject to vesting restrictions.

(6)	Includes 5,599 shares issuable upon options exercisable within 60 days of April 1, 2020, as well as 13,767 shares of restricted stock that are subject to vesting restrictions.

(7)	Includes 1,171 shares of restricted stock that are subject to vesting restrictions.

---

(8)	Includes 1,268 shares of restricted stock that are subject to vesting restrictions.

(10)	Includes 1,279 shares of restricted stock that are subject to vesting restrictions.

(11)	Includes 1,229 shares of restricted stock that are subject to vesting restrictions.

(12)

Number of shares beneficially owned is as of December 31, 2019 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 14, 2020. BCG and Ronald Baron each had sole voting and sole dispositive power with respect to no shares, shared voting power with respect to 2,201,220 shares, and shared dispositive power with respect to 2,272,767 shares. BAMCO had sole voting and sole dispositive power with respect to no shares, shared voting power with respect to 2,075,390 shares, and shared dispositive power with respect to 2,146,937 shares. BCM had sole voting and sole dispositive power with respect to no shares, shared voting and shared dispositive power with respect to 125,830 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, 49 th Floor, New York, NY 10153.

(14)

Number of shares beneficially owned is as of December 31, 2019 and is based on a Schedule 13G/A filed by T. Rowe Price Associates, Inc. on February 14, 2020. The reporting person had sole voting power with respect to 1,450,867, sole dispositive power with respect to 4,314,177 shares, and shared voting and shared dispositive power with respect to no shares. The address of the reporting person is 100 E. Pratt Street, Baltimore, MD 21202.

(15)

Number of shares beneficially owned is as of December 31, 2019 and is based on a Schedule 13G/A filed by The Vanguard Group on February 12, 2020. The reporting person had sole voting power with respect to 29,286 shares, shared voting power with respect to 9,739 shares, sole dispositive power with respect to 3,299,307 shares, and shared dispositive power with respect to 35,518 shares. The address of the reporting person is 100 Vanguard Boulevard, Malvern, PA 19355.

(16)	Includes 152,952 shares issuable upon options exercisable within 60 days of April 1, 2020, as well as 117,069 shares of restricted stock that are subject to vesting restrictions.

(1)	Consists of the following plans: the 2007 Plan, the 2016 Plan, and the Company’s Employee Stock Purchase Plan.

(2)

Consists of the Company’s MSPP. The MSPP was approved by the Board of Directors on December 7, 2017 and was not subject to approval by the Company's stockholders. The MSPP provides selected employees of the Company the opportunity to defer a portion of their bonus and commission compensation, and enables the Company to align management and shareholder interests, through awards of Deferred Stock Units (“DSUs”), with an aggregate grant date value equal to the deferred compensation, issued under the MSPP and awards of matching restricted stock units issued under the 2016 Plan. DSUs issued under the MSPP are fully vested at grant and are settled upon the earliest of (i) four years after the date of grant; (ii) the participant’s death; (iii) the participant’s disability; (iv) the participant’s separation from service from the Company, or (v) a change in control (as defined in the MSPP) of the Company. Matching RSUs vest four years after the date of grant, subject to the participant’s continued employment through that date, or upon a change in control of the Company that occurs prior to such date.

---

(3)	Includes 8,020 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.

(4)	Does not include restricted stock unit awards.

(5)	Includes 50,123 shares of common stock available for future issuance under the Company’s stockholder-approved Employee Stock Purchase Plan, which amount includes 317 shares subject to purchase during the then-current purchase period.

---

---

---

---

(1)	Net Income achieved for year end 2019 was adjusted down by $10.8 million for a litigation-related settlement in accordance with and pursuant to the terms of the Company's 2016 Stock Incentive Plan. No adjustment was made to the target goal for year end 2019.

(2)	Net Income achieved for year end 2018 was adjusted up by $1.8 million for litigation-related expenses in accordance with and pursuant to the terms of the Company's 2016 Stock Incentive Plan.

(3)

Definition for EBITDA and a reconciliation of the 2019 actual EBITDA set out above to its GAAP-basis result can be found in footnote 14 to the financial statements included in the Company’s Annual Report on Form 10-K filed with the Commission on February 26, 2020 (the “Company’s 2019 Annual Report”). EBITDA is also defined below under the subsection titled “2019 Annual Cash Incentive Program” within the section titled “Compensation Discussion and Analysis” of this Proxy Statement.

(4)	EBITDA achieved for year end 2018 was adjusted up by $2.2 million for litigation-related expenses in accordance with and pursuant to the terms of the executive annual cash incentive plan.

*	The Long-Term Performance-Based Restricted Stock awards are subject to vesting based on achievement of a three-year cumulative revenue goal and are subject to adjustment based on the Company’s total stockholder return over the same period.

---

---

---

---

---

---

•	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

---

---

---

---

---

---

(1)

Named executive officers could receive between 0% and 200% credit for the EBITDA component of their annual cash incentive award, depending upon actual EBITDA achieved in 2019 . 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. The percent credited for the EBITDA component of the award (as shown in the table) is then multiplied by the weighting applicable to the financial goal component of the cash incentive award for each named executive officer.

---

---

---

(1)	As discussed above, Mr. Florance’s 2019 annual cash incentive award is based solely on corporate performance goals.

(2)	The weighting for Mr. Wheeler's Company financial and individual goals was adjusted slightly to give a little more weight to his individual, subjective goals given the Company's current objectives, while retaining focus on the Company's overall earnings pursuant to his role as the Chief Financial Officer.

(3)	The Committee increased the weighting of Mr. Linnington's sales goals in 2019 and removed the EBITDA goal to increase the focus on sales of the Company's information services, which reflects his role as head of sales of the Company. The Committee also added subjective goals to round out Mr. Linnington's objectives as the executive managing the sales force.

(4)	The weighting for Ms. Ruggles' Company financial and individual goals was set consistent with the prior year and reflects the Company's continued emphasis on overall earnings. As such, Ms. Ruggles' Company financial goal was given a little more weight than her individual, subjective goals for 2019.

---

•	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.

---

---

---

(1)	Named executive officers could receive between 0% and 200% credit for the net income goal, depending upon actual net income achieved in 2018. Credit for performance between target and maximum is determined by linear interpolation. For 2018, no credit is given for performance below target and credit is capped at 200% of target.

(2)	The net income goals and actual achievement have been adjusted for litigation-related expenses in accordance with and pursuant to the terms of the stock incentive plan. The adjustments did not impact the payout.

---

(1)	The number of shares granted is determined by dividing the earned award value by the fourth quarter 2018 average daily price ($365.29), rounded up to the nearest 100 shares.

---

(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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 2018 average daily price ($365.29), 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).

---

(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.

---

(1)	Named executive officers could receive between 0% and 200% credit for the net income goal, depending upon actual net income achieved in 2019 . Credit for performance between target and maximum is determined by linear interpolation. For 2019, no credit is given for performance below target and credit is capped at 200% of target.

(2)	The net income actual achievement has been adjusted down by $10.8 million for a litigation-related settlement in accordance with and pursuant to the terms of the stock incentive plan.

---

(1)	The number of shares granted is determined by dividing the earned award value by the fourth quarter 2019 average daily price ($583.84), rounded up to the nearest 100 shares.

---

•	Reviewed 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;

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

•	Conducted an assessment of potential risk factors associated with the design and administration of the Company’s executive compensation programs.

---

•	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 other NEOs; and

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

---

---

---

(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 2017 , 2018 and 2019 , 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, 2017 – December 31, 2019 for the 2017 grants; January 1, 2018 – December 31, 2020 for the 2018 grants; and January 1, 2019 – December 31, 2021 for the 2019 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 2019 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, 2019 . For additional information on the stock awards, see the “Equity Incentive Compensation” discussion within the section titled “Compensation Discussion and Analysis” of this Proxy Statement.

(2)

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/or 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 2019 performance, see the “2019 Annual Cash Incentive Program” discussion within the section titled “Compensation Discussion and Analysis” of this Proxy Statement. In addition, this amount includes a

---

(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 2019 plan year, Mr. Florance contributed a portion of his annual compensation and CoStar made a matching contribution in the amount of $11,200. In 2019 , the employer contribution was capped at the executive’s contribution amount up to a maximum of four percent of the executive’s gross pay. Includes $15,338 of incremental costs associated with personal use of the Company aircraft by Mr. Florance and guests accompanying Mr. Florance during the year ended December 31, 2019.  For purposes of the "Summary Compensation Table," we determined the incremental cost by calculating an hourly variable rate for variable costs such as fuel and hourly engine program costs for the aircraft and multiplied that result by the hours flown for personal use, then added one-time, variable costs incurred while using the corporate aircraft for personal use, such as catering and crew travel expenses.  Since the aircraft is used primarily for business travel, the calculation does not include the fixed costs that do not change based on usage, such as crew salaries, hangar storage costs and cost of maintenance not related to trips. The Company paid $1,112 in annual premiums to maintain a $1 million life insurance policy for the benefit of Mr. Florance.

(3b)	Pursuant to the 401(k) Plan, for the 2019 plan year, Mr. Wheeler contributed a portion of his annual compensation and CoStar made a matching contribution in the amount of $11,200. In 2019 , the employer contribution was capped at the executive’s contribution amount up to a maximum of four percent of the executive’s gross pay.

(3c)

Pursuant to the 401(k) Plan, for the 2019 plan year, Mr. Linnington contributed a portion of his annual compensation and CoStar made a matching contribution in the amount of $11,200. In 2019 , 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 a tax gross up of $7,883 on those travel expenses which was reported as income for tax purposes, and a tax gross up of $432 on his employment service award, which was reported as income for tax purposes.

(3d)

Pursuant to the 401(k) Plan, for the 2019 plan year, Ms. Ruggles contributed a portion of her annual compensation and CoStar made a matching contribution in the amount of $11,200. In 2019 , the employer contribution was capped at the executive’s contribution amount up to a maximum of four percent of the executive’s gross pay. Ms. Ruggles received a tax gross up of $1,800 on her employment service award, which was reported as income for tax purposes.

---

(1)

Amounts shown in these columns are possible amounts payable under the Company’s annual executive cash incentive plan for 2019 . The actual cash payments made in 2020 for 2019 performance under the Company’s annual executive cash incentive plan are reported in the Summary Compensation table above. The Company’s annual executive cash incentive plan in effect for 2019 is described more fully in the section titled “Compensation Discussion and Analysis—2019 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 February 2019 under the Company’s 2016 Plan, which vest based on achievement of a three-

---

(3)

Amounts shown in this column represent restricted stock and restricted stock unit awards granted to named executive officers in 2019 , including (a) grants on February 7, 2019 in respect of achievement of 2018 net income goals, (b) restricted stock units granted on March 15, 2019 in connection with the Company's MSPP, (c) Mr. Linnington's service award of one share granted on June 2, 2019 in connection with his fifth 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, and (d) Ms. Ruggle's service award of four shares granted on November 1, 2019 in connection with her twentieth anniversary of employment with the Company pursuant to the same service award program. The closing prices of the Company’s common stock on February 7, 2019, March 15, 2019, June 2, 2019 and November 1, 2019 were $398.15, $469.13, $509.64 and $548.12, respectively. 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 2019 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 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, 2019 .

(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, 2019 through December 31, 2021 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, 2019 .

---

---

(1)

The dates of grant of each named executive officer’s stock option awards outstanding as of December 31, 2019 are set forth in the table above. The grants awarded on March 2, 2017 and February 28, 2018 are exercisable in installments of one third on the last day of the month during which the first three anniversaries of the date of grant fall, assuming continued employment. The grants awarded on February 7, 2019, are exercisable in installments of one third on the 15 th day of the month during which the first three anniversaries of the date of grant fall, assuming continued employment.

(2)	Market value based on the closing price of the Company’s common stock as of December 31, 2019 of $598.30 per share.

(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 2019 are for the period from January 1, 2019 through December 31, 2021 and the awards are subject to adjustment based on the Company’s TSR over the three-year performance period. The revenue goal for the grants made in 2018 are for the period from January 1, 2018 through December 31, 2020 and the awards are subject to adjustment based on the Company’s TSR over the three-year performance period. The revenue goal for the grants made in 2017 are for the period from January 1, 2017

---

(4a)

As of December 31, 2019 , Mr. Florance held (i) 6,267 shares of restricted stock, which vest in their entirety on March 31, 2020, (ii) 10,467 shares of restricted stock, which vest in equal installments on February 28, 2020 and 2021, (iii) 15,400 shares of restricted stock, which vest in equal installments on February 15, 2020, 2021 and 2022, and (iv) 1,213 shares of restricted stock units, which vest in their entirety on March 15, 2023.

(4b)

As of December 31, 2019 , Mr. Wheeler held (i) 3,193 shares of restricted stock, which vest in their entirety on January 11, 2020, (ii) 2,567 shares of restricted stock, which vest in their entirety on March 31, 2020, (iii) 3,667 shares of restricted stock, which vest in equal installments on February 28, 2020 and 2021, (iv) 4,400 shares of restricted stock, which vest in equal installments on February 15, 2020, 2021 and 2022, and (iv) 1,225 shares of restricted stock units, which vest in their entirety on March 15, 2023.

(4c)	As of December 31, 2019 , Mr. Linnington held (i) 2,067 shares which vest in their entirety on March 31, 2020, (ii) 2,067 shares of restricted stock, which vest in equal installments on February 28, 2020 and 2021, and (iii) 2,700 shares of restricted stock, which vest in equal installments on February 15, 2020, 2021 and 2022.

(4d)

As of December 31, 2019 , Ms. Ruggles held (i) 61 shares of restricted stock, which vest in their entirety on May 27, 2020, (ii) 555 shares of restricted stock, which vest in their entirety on December 31, 2020, (iii) 1,221 shares of restricted stock, which vest in equal installments on March 31, 2020 and 2021, (iv) 2,200 shares of restricted stock, which vest in equal installments on February 28, 2020 and 2021, (v) 2,700 shares of restricted stock, which vest in equal installments on February 15, 2020, 2021 and 2022, and (vi) 283 shares of restricted stock units, which vest in their entirety on March 15, 2023.

(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 2019 . 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 2019 .

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

---

(1)

These contributions were made by deferring a portion of the 2018 annual cash incentive award under our MSPP and represent the value of deferred stock units purchased in 2019 based on the closing share price of our common stock on the purchase date. All of the amounts shown in this column were included as compensation in the "Summary Compensation Table" for 2018 in accordance with SEC rules because they represent a portion of the annual cash incentive award earned for 2018 performance that would have been paid out in 2019 if the deferral election had not been made.

(2)

Total aggregate balance calculated as the sum of the number of deferred stock units held as of December 31, 2019, multiplied by $598.30, the closing stock price of our common stock on December 31, 2019. The following amounts included in this column have been reported in the "2019 Summary Compensation Table" for 2018: Mr. Florance — $569,055, Mr. Wheeler —$574,684, Mr. Linnington—$0, and Ms. Ruggles—$132,764.

---

---

---

(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 2007 and 2016 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, 2019 , 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 ($598.30) on December 31, 2019 , excluding options with an exercise price greater than the closing price on December 31, 2019 . The intrinsic value of the restricted stock was calculated using the closing price of the Company’s common stock on December 31, 2019 ($598.30).

(2)

Includes base salary for one year ($800,000), bonus for 2019 ($1,666,627), and the immediate vesting of all unvested stock options ($14,277,517). 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 ($598.30) on December 31, 2019 , excluding options with an exercise price greater than the closing price on December 31, 2019 .

(3)	Consists of the cash incentive bonus for 2019 .

(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, 2019 , Mr. Florance would be entitled to the amount set forth, which includes base salary for one year ($800,000), his cash incentive bonus for 2019 ($1,666,627), the immediate vesting of all unvested stock options ($14,277,517) and all unvested restricted stock ($42,208,270) under the respective stock incentive plans, and an estimated gross-up payment to cover taxes assessed under Section 4999 of the Tax Code ($22,173,467). 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 ($598.30) on December 31, 2019 , excluding options with an exercise price greater than the closing price on December 31, 2019 . 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, 2019 ($598.30).

(5)

Mr. Wheeler’s offer of employment provides for a termination payment if his employment is involuntarily terminated by the Company without cause or by Mr. Wheeler for good reason, subject to his execution of a release. Assuming for these purposes that those conditions are met as of December 31, 2019 , Mr. Wheeler would be entitled to the amount set forth, which includes six months base salary ($235,000) and his cash incentive bonus for 2019 ($587,900).

(6)	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.

---

---

---

---

---