Exhibit 10.1

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement, dated as of May 7, 2009, is made by and between
NIC Inc., a Delaware corporation (the “Corporation”), and                     
(the “Indemnitee”).

 

RECITALS

 

A.                                   The Corporation recognizes that competent
and experienced persons are increasingly reluctant to serve or to continue to
serve as directors or officers of corporations unless they are protected by
comprehensive liability insurance or indemnification, or both, due to increased
exposure to litigation costs and risks resulting from their service to such
corporations, and due to the fact that the exposure frequently bears no
reasonable relationship to the compensation of such directors and officers;

 

B.                                     The statutes and judicial decisions
regarding the duties of directors and officers are often difficult to apply,
ambiguous, or conflicting, and therefore fail to provide such directors and
officers with adequate, reliable knowledge of legal risks to which they are
exposed or information regarding the proper course of action to take;

 

C.                                     The Corporation and Indemnitee recognize
that plaintiffs often seek damages in such large amounts and the costs of
litigation may be so enormous (whether or not the case is meritorious), that the
defense and/or settlement of such litigation is often beyond the personal
resources of directors and officers and the exposure from such litigation
frequently bears no reasonable relationship to the compensation of such
directors and officers;

 

D.                                    The Corporation believes that it is unfair
for its directors and officers to assume the risk of huge judgments and other
expenses which may occur in cases in which the director or officer received no
personal profit and in cases where the director or officer was not culpable;

 

E.                                      The Corporation, after reasonable
investigation, has determined that the liability insurance coverage presently
available to the Corporation may be inadequate in certain circumstances to cover
all possible exposure for which Indemnitee should be protected.  The Corporation
believes that the interests of the Corporation and its stockholders would best
be served by a combination of such insurance and the indemnification by the
Corporation of the directors and officers of the Corporation;

 

F.                                      The Corporation’s Bylaws require the
Corporation to indemnify its directors and officers to the fullest extent
permitted by the Delaware General Corporation Law (the “DGCL”). The Bylaws
expressly provide that the indemnification provisions set forth therein are not
exclusive, and contemplate that contracts may be entered into between the
Corporation and its directors and officers with respect to indemnification;

 

G.                                     Section 145 of the DGCL (“Section 145”),
under which the Corporation is organized, empowers the Corporation to indemnify
its officers, directors, employees and agents by agreement and to indemnify
persons who serve, at the request of the Corporation, as the

 

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directors, officers, employees or agents of other corporations or enterprises,
and expressly provides that the indemnification provided by Section 145 is not
exclusive;

 

H.                                    Section 102(b)(7) of the DGCL allows a
corporation to include in its certificate of incorporation a provision limiting
or eliminating the personal liability of a director for monetary damages in
respect of claims by shareholders and corporations for breach of certain
fiduciary duties, and the Corporation has so provided in its Certificate of
Incorporation that each Director shall be exculpated from such liability to the
maximum extent permitted by law;

 

I.                                         The Corporation desires to provide
the Indemnitee with specific contractual assurances of the Indemnitee’s rights
to full indemnification against litigation risks and reasonable expenses
(regardless, among other things, of any amendment to or revocation of the
Certificate of Incorporation and Bylaws or any change in the ownership of the
Corporation or the composition of its Board of Directors) and, to the extent
insurance is available, the coverage of the Indemnitee under the Corporation’s
directors’ and officers’ liability insurance policies;

 

J.                                        The Board of Directors has determined
that contractual indemnification as set forth herein is not only reasonable and
prudent but also promotes the best interests of the Corporation and its
stockholders;

 

K.                                    The Corporation desires and has requested
Indemnitee to serve or continue to serve as a director or officer of the
Corporation free from undue concern for unwarranted claims for damages arising
out of or related to such services to the Corporation; and

 

L.                                      Indemnitee is willing to serve, continue
to serve or to provide additional service for or on behalf of the Corporation on
the condition that he is furnished the indemnity provided for herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:

 

Section 1.                                            Certain Definitions. For
purposes of this Agreement, the following definitions shall apply:

 

(a)                                  The term “Proceeding” shall be broadly
construed and shall include, without limitation, the investigation, preparation,
prosecution, defense, settlement, arbitration and appeal of, and the giving of
testimony in, any threatened, pending or completed claim, action, suit,
proceeding, or arbitration, whether civil, criminal, administrative,
investigative, appellate or arbitral, and whether formal or informal.

 

(b)                                 The phrase “by reason of the fact that
Indemnitee is or was a director or officer of the Corporation, or is or was
serving at the Corporation’s request as a director, officer, employee or agent
of any Other Enterprise”, or any substantially similar phrase, shall be broadly
construed and shall include, without limitation, any actual or alleged act or
omission to act.

 

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(c)                                  The term “Expenses” shall be broadly and
reasonably construed and shall include, without limitation, all direct and
indirect expenses, costs or charges of any type or nature whatsoever (including,
without limitation, all attorneys’ fees and related disbursements, appeal bonds,
other out-of-pocket costs and reasonable compensation for time spent by
Indemnitee for which Indemnitee is not otherwise compensated by the Corporation
or any third party, provided that the rate of compensation and estimated time
involved is approved by the Corporation’s Board of Directors, which approval
shall not be unreasonably withheld, conditioned or delayed), actually and
reasonably incurred by Indemnitee in connection with the investigation,
preparation, prosecution, defense, settlement, arbitration or appeal of, or the
giving of testimony in, a Proceeding or establishing or enforcing a right to
indemnification under this Agreement, the Corporation’s Certificate of
Incorporation or Bylaws, Section 145 of the General Corporation Law of the State
of Delaware or otherwise.

 

(d)                                 The terms “judgments, fines and amounts paid
in settlement” shall be broadly construed and shall include, without limitation,
all direct and indirect payments of any type or nature whatsoever (including,
without limitation, all penalties and amounts required to be forfeited or
reimbursed to the Corporation), as well as any penalties or excise taxes
assessed on a person with respect to an employee benefit plan.

 

(e)                                  The term “Corporation” shall include,
without limitation and in addition to the resulting corporation, any constituent
corporation or any Other Enterprise (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, and employees or agents, so that any person who is or was a director
or officer of such constituent corporation or Other Enterprise, or is or was
serving at the request of such constituent corporation as a director, officer,
employee or agent of any Other Enterprise, shall stand in the same position
under the provisions of this Agreement with respect to the resulting or
surviving corporation as he or she would have with respect to such constituent
corporation or Other Enterprise as if its separate existence had continued.

 

(f)                                    The term “Other Enterprise” shall
include, without limitation, any other corporation, partnership, joint venture,
trust or employee benefit plan.

 

(g)                                 The phrase “serving at the request of the
Corporation”, or any substantially similar phrase, shall include, without
limitation, any service as a director or officer of the Corporation which
involves services as a director, officer, employee or agent with respect to any
Other Enterprise, including any employee benefit plan.

 

(h)                                 A person who acted in good faith and in a
manner such person reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner “not opposed to the best interests of the Corporation” as referred to in
this Agreement.

 

(i)                                     The term “defense” shall include
investigations of any Proceeding, appeals of any Proceeding and defensive
assertion of any cross -claim or counterclaim.

 

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(j)                                     The term “Independent Counsel” means a
law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent:  (i) the Corporation or Indemnitee in any matter material
to either such party (other than with respect to matters concerning Indemnitee
under this Agreement, or of other indemnitees under similar indemnification
agreements), or (ii) any other party to the Proceeding giving rise to a claim
for indemnification hereunder.  Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Corporation or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement.  The Corporation agrees to
pay the reasonable fees of the Independent Counsel arising out of or relating to
this Agreement or its engagement pursuant hereto.

 

(k)                                  The term “Change of Control” means (i) an
acquisition by any person (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of
beneficial ownership of twenty percent (20%) or more of the combined voting
power of the Corporation’s then outstanding voting securities; (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Corporation and any new director whose
election by the Board of Directors or nomination for election by the
Corporation’s stockholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or (iii) the
consummation of a merger or consolidation involving the Corporation if the
stockholders of the Corporation, immediately before such merger or
consolidation, do not own, immediately following such merger or consolidation,
more than eighty percent (80%) of the combined voting power of the outstanding
voting securities of the resulting entity in substantially the same proportion
as their ownership of voting securities immediately before such merger or
consolidation, (iv) the consummation of the sale or other disposition of all or
substantially all of the assets of the Corporation, (v) approval by the
stockholders of the Corporation of a complete liquidation or dissolution of the
Corporation or (vi) the occurrence of any other event of a nature that would be
required to be reported in response to either Item 5.01 of Form 8-K or Item
6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form promulgated under the Exchange Act), whether or not the
Corporation is then subject to such reporting requirement.  Notwithstanding the
foregoing, a Change of Control shall not be deemed to occur solely because
twenty percent (20%) or more of the then outstanding voting securities is
acquired by (i) a trustee or other fiduciary holding securities under one or
more employee benefit plans maintained by the Corporation or any of its
subsidiaries or (ii) any entity that, immediately prior to such acquisition, is
owned directly or indirectly by the stockholders of the Corporation in the same
proportion as their ownership of shares in the Corporation immediately prior to
such acquisition.

 

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Section 2.                                            Indemnification.

 

(a)                                  Subject to Sections 4, 6 and 8 of this
Agreement, to the fullest extent not prohibited by the laws of the State of
Delaware, as the same now exists or may hereafter be amended (but only to the
extent any such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior
to such amendment), the Corporation shall indemnify, defend and hold harmless,
Indemnitee if Indemnitee was or is a party or is threatened to be made a party
to, or a witness of, or is otherwise involved in, any Proceeding by reason of
the fact that Indemnitee is or was or has agreed to serve as a director or
officer of the Corporation, or is or was serving at the Corporation’s request as
a director, officer, employee or agent of any Other Enterprise, or by reason of
any action taken or alleged to have been taken, or omitted to be taken or
alleged to be omitted to be taken, in such capacity.

 

(b)                                 The indemnification provided by this
Section 2 shall be from and against Expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with such Proceeding, but shall only be provided if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with respect
to any criminal Proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful.

 

(c)                                  Notwithstanding the foregoing provisions of
this Section 2, in the case of any Proceeding by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that
Indemnitee is or was a director or officer of the Corporation, or is or was
serving at the Corporation’s request as a director, officer, employee or agent
of any Other Enterprise, no indemnification shall be made in respect of any
claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Corporation unless, and only to the extent that, the Delaware
Court of Chancery or the court in which such Proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such Expenses which the Delaware Court of Chancery or
such other court shall deem proper.

 

(d)                                 The termination of any Proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that Indemnitee did
not act in good faith and in a manner which Indemnitee reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any criminal Proceeding, had reasonable cause to believe that Indemnitee’s
conduct was unlawful.

 

Section 3.                                            Successful Defense;
Partial Indemnification. To the extent that Indemnitee has been successful on
the merits or otherwise in defense of any Proceeding referred to in Section 2
hereof or in defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against Expenses actually and reasonably incurred in connection
therewith.  For purposes of this Agreement and without limiting the foregoing,
if any Proceeding is disposed of, on the merits or otherwise (including a
disposition without prejudice), without (i) the disposition being adverse to
Indemnitee, (ii) an adjudication that Indemnitee was liable to the Corporation,
(iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication
that Indemnitee did not act in good faith and in a manner Indemnitee reasonably
believed to be in or not opposed to the best interests of the Corporation, and
(v) with respect to any criminal Proceeding, an

 

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adjudication that Indemnitee had reasonable cause to believe Indemnitee’s
conduct was unlawful, Indemnitee shall be considered for the purposes hereof to
have been wholly successful with respect thereto. 

 

If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Corporation for some or a portion of the Expenses,
judgments, fines or amounts paid in settlement actually and reasonably incurred
by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding, or in
defense of any claim, issue or matter therein, and any appeal therefrom but not,
however, for the total amount thereof, the Corporation shall nevertheless
indemnify Indemnitee for the portion of such Expenses, judgments, fines or
amounts paid in settlement to which Indemnitee is entitled.  Any necessary
determination regarding allocation or apportionment of Expenses between
successful and unsuccessful claims, issues or matters shall be made by the
person, persons or entity empowered or selected under Section 4(a) to determine
whether Indemnitee is entitled to indemnification.

 

Section 4.                                            Determination That
Indemnification Is Proper.

 

(a)                                  Any indemnification hereunder shall (unless
otherwise ordered by a court) be made by the Corporation unless a determination
is made that indemnification of such person is not proper in the circumstances
because he or she has not met the applicable standard of conduct set forth in
Section 2(b) hereof. Any such determination shall be made (i) by a majority vote
of the directors who are not parties to the Proceeding in question
(“disinterested directors”), even if less than a quorum, (ii) by a majority vote
of a committee of disinterested directors designated by majority vote of
disinterested directors, even if less than a quorum, (iii) by a majority vote of
a quorum of the outstanding shares of stock of all classes entitled to vote on
the matter, voting as a single class, which quorum shall consist of stockholders
who are not at that time parties to the Proceeding in question, (iv) by
Independent Counsel, or (v) by a court of competent jurisdiction; provided,
however, that following a Change of Control of the Corporation, any
determinations, whether arising out of acts, omissions or events occurring prior
to or after the Change of Control of the Corporation, shall be made by
Independent Counsel selected in the manner described in Section 4(b).  Such
Independent Counsel shall determine as promptly as practicable whether and to
what extent Indemnitee would be permitted to be indemnified under applicable law
and shall render a written opinion to the Corporation and to Indemnitee to such
effect.

 

(b)                                 If the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 4(a) hereof, the Independent Counsel shall be selected as provided in
this Section 4(b).  The Independent Counsel shall be selected by the Board of
Directors.  Indemnitee may, within ten (10) days after such written notice of
selection shall have been given, deliver to the Corporation, as the case may be,
a written objection to such selection; provided, however, that such objection
may be asserted only on the ground that the Independent Counsel so selected does
not meet the requirements of “Independent Counsel” as defined in Section 1 of
this Agreement, and the objection shall set forth with particularity the factual
basis of such assertion.  Absent a proper and timely objection, the person so
selected shall act as Independent Counsel.  If a written objection is made in
proper form, the Independent Counsel selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit.  If, within twenty (20) days after

 

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submission by Indemnitee of a written request for indemnification pursuant to
Section 6(a) hereof, no Independent Counsel shall have been selected and not
objected to, either the Corporation or Indemnitee may petition the Court of
Chancery of the State of Delaware or other court of competent jurisdiction for
resolution of any objection which shall have been made by the Indemnitee to the
Corporation’s selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the court or by such other person as
the court shall designate, and the person with respect to whom all objections
are so resolved or the person so appointed shall act as Independent Counsel
under Section 4(a) hereof.  The Corporation shall pay any and all reasonable
fees and expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 4(a) hereof, and the Corporation
shall pay all reasonable fees and expenses incident to the procedures of this
Section 4(b) regardless of the manner in which such Independent Counsel was
selected or appointed.

 

Section 5.                                            Advance Payment of
Expenses; Notification and Defense of Claim.

 

(a)                                  In the event that the Corporation does not
assume the defense pursuant to Section 5(c) of any Proceeding of which the
Corporation receives notice under this Agreement, any Expenses incurred by
Indemnitee in defending a Proceeding, or in connection with an enforcement
action pursuant to Section 6(b), shall be paid by the Corporation to Indemnitee
in advance of the final disposition of such Proceeding as soon as practicable
but in any event no later than twenty (20) days after receipt by the Corporation
of (i) a statement or statements from Indemnitee requesting such advance or
advances from time to time, and (ii) an undertaking by or on behalf of
Indemnitee to repay such amount or amounts, only if, and to the extent that,
there is a final judicial determination (as to which all rights of appeal
therefrom have been exhausted or lapsed) that Indemnitee is not entitled to be
indemnified by the Corporation as authorized by this Agreement or otherwise. 
Such undertaking shall be accepted without reference to the financial ability of
Indemnitee to make such repayment. Advances shall be unsecured and
interest-free.  Notwithstanding the foregoing, the obligation of the Corporation
to advance Expenses pursuant to this Section 5, its Certificate of
Incorporation, its Bylaws or otherwise, shall be subject to the condition that,
if, when and to the extent that the Corporation determines that Indemnitee would
not be permitted to be indemnified under applicable law, the Corporation shall
be reimbursed within sixty (60) days of such determination, by Indemnitee (who
hereby agrees to reimburse the Corporation) for such amounts previously paid by
the Corporation pursuant to this Section 5; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Corporation that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to reimburse the Corporation
for any advance of Expenses until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or lapsed).

 

(b)                                 Promptly after receipt by Indemnitee of
notice of the commencement of any Proceeding, Indemnitee shall, if a claim
thereof is to be made against the Corporation hereunder, notify the Corporation
of the commencement thereof.  The failure to promptly notify the Corporation of
the commencement of the Proceeding, or Indemnitee’s request for indemnification,
will not relieve the Corporation from any liability that it may have to

 

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Indemnitee hereunder, except to the extent the Corporation is prejudiced in its
defense of such Proceeding as a result of such failure.

 

(c)                                  In the event the Corporation shall be
obligated to pay the Expenses of Indemnitee with respect to a Proceeding as
provided in this Agreement, its Certificate of Incorporation, its Bylaws or
otherwise, the Corporation, if appropriate, shall be entitled to assume the
defense of such Proceeding, with counsel reasonably acceptable to Indemnitee,
upon the delivery to Indemnitee of written notice of its election to do so. 
After delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Corporation, the Corporation will not be liable
to Indemnitee under this Agreement for any fees of counsel subsequently incurred
by Indemnitee with respect to the same Proceeding, provided that (i) Indemnitee
shall have the right to employ Indemnitee’s own counsel in such Proceeding at
Indemnitee’s expense and (ii) if (1) the employment of counsel by Indemnitee has
been previously authorized in writing by the Corporation, (2) counsel to the
Corporation or Indemnitee shall have reasonably concluded that there may be a
conflict of interest or position, or reasonably believes that a conflict is
likely to arise, on any significant issue between the Corporation and Indemnitee
in the conduct of any such defense, (3) after a Change of Control, the
employment of counsel by Indemnitee has been approved by the Independent Counsel
or (4) the Corporation shall not, in fact, have employed counsel to assume the
defense of such Proceeding, then the fees and expenses of Indemnitee’s counsel
shall be at the expense of the Corporation, except as otherwise provided by this
Agreement.  The Corporation shall not be entitled, without the consent of
Indemnitee, to assume the defense of any claim brought by or in the right of the
Corporation or as to which counsel for the Corporation or Indemnitee shall have
reasonably made the conclusion provided for in clause (2) of the proviso in the
immediately preceding sentence.

 

(d)                                 Notwithstanding any other provision of this
Agreement to the contrary, to the extent that Indemnitee is, by reason of
Indemnitee’s corporate status with respect to the Corporation or any Other
Enterprise which Indemnitee is or was serving or has agreed to serve at the
request of the Corporation, a witness or otherwise participates in any
Proceeding at a time when Indemnitee is not a party in the Proceeding, the
Corporation shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
therewith.

 

Section 6.                                            Procedure for
Indemnification.

 

(a)                                  To obtain indemnification (other than as
provided otherwise herein) under this Agreement, Indemnitee shall promptly
submit to the Corporation a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification.  The Corporation shall, promptly upon receipt of
such a request for indemnification, advise the Board of Directors in writing
that Indemnitee has requested indemnification.

 

(b)                                 The determination whether to grant
Indemnitee’s indemnification request (whether made by the Board of Directors or
one of its committees, Independent Counsel, or the Corporation’s stockholders)
shall be made promptly, and in any event within sixty (60) days

 

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following receipt of a request for indemnification pursuant to Section 6(a). The
right to indemnification as granted by Section 2 of this Agreement shall be
enforceable by Indemnitee in any court of competent jurisdiction if the
Corporation denies such request, in whole or in part, or fails to respond within
such sixty-day (60) period.  It shall be a defense to any such action (other
than an action brought to enforce a claim for the advance of Expenses under
Section 5 hereof where the required undertaking, if any, has been received by
the Corporation) that Indemnitee has not met the standard of conduct set forth
in Section 2 hereof, but the burden of proving such defense by clear and
convincing evidence shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors or one of its committees, its
Independent Counsel, and its stockholders) to have made a determination prior to
the commencement of such action that indemnification of Indemnitee is proper in
the circumstances because Indemnitee has met the applicable standard of conduct
set forth in Section 2 hereof, nor the fact that there has been an actual
determination by the Corporation (including its Board of Directors or one of its
committees, its Independent Counsel, and its stockholders) that Indemnitee has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that Indemnitee has or has not met the applicable standard
of conduct.  The Indemnitee’s Expenses incurred in connection with successfully
establishing Indemnitee’s right to indemnification, in whole or in part, in any
such Proceeding or otherwise shall also be indemnified by the Corporation.

 

(c)                                  The Indemnitee shall be presumed to be
entitled to indemnification under this Agreement upon submission of a request
for indemnification pursuant to this Section 6, and the Corporation shall have
the burden of proof in overcoming that presumption in reaching a determination
contrary to that presumption.  Such presumption shall be used as a basis for a
determination of entitlement to indemnification unless the Corporation overcomes
such presumption by clear and convincing evidence.

 

(d)                                 The knowledge and/or actions, or failure to
act, of any director, officer, agent or employee of the Corporation shall not be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.

 

Section 7.                                            Insurance and Subrogation.

 

(a)                                  The Corporation represents that it
currently has in effect the following policy or policies of director and officer
liability insurance (the “Insurance Policies”) which names or covers Indemnitee
as an insured:

 

Insurer

 

Policy No.

 

Amount

 

Deductible

 

[Polices listed]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)                                 So long as Indemnitee shall continue to
serve as a director or officer of the Corporation, or shall continue at the
request of the Corporation to serve as a director or officer, employee or agent
of any Other Enterprise, and thereafter so long as Indemnitee shall be subject
to any possible claim or is a party or is threatened to be made a party to any
Proceeding, by reason of the fact that Indemnitee is or was a director or
officer of the Corporation, or is or was

 

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serving in any of said other capacities at the request of the Corporation, the
Corporation shall be required to maintain the Insurance Policies in effect or to
obtain policies of directors’ and officers’ liability insurance from established
and reputable insurers with coverage in at least the amount or amounts as
prescribed by the Insurance Policies and which provides the Indemnitee with
substantially the same rights and benefits as the Insurance Policies, and which
coverage, rights and benefits shall, in any event, be as favorable to Indemnitee
as are accorded to the most favorably insured of the Corporation’s directors or
officers, as the case may be (“Comparable D&O Insurance”) unless, in the
reasonable business judgment of the Board of Directors of the Corporation as it
may exist from time to time, either (i) the premium cost for such Insurance
Policies or Comparable D&O Insurance is disproportionate to the amount of
coverage provided, or (ii) the coverage provided by such Insurance Policies or
Comparable D&O Insurance is so limited by exclusions that there is insufficient
benefit provided by such director and officer liability insurance; provided,
however, that in the event that the Board of Directors makes such a
determination, the Corporation shall provide notice to Indemnitee no less than
ninety (90) days prior to the lapse or termination of coverage under the
Insurance Policies or Comparable D&O Insurance.

 

(c)                                  If, at the time of the receipt of a notice
of a claim pursuant to the terms hereof, the Corporation has director and
officer liability insurance in effect, the Corporation shall give prompt notice
of the commencement of such claim, and any Proceeding in which such claim is
asserted, to the insurers in accordance with the procedures set forth in the
respective policies.  The Corporation shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such claim or Proceeding in accordance with the
terms of such policies.  The failure or refusal of any such insurer to pay any
such amount shall not affect or impair the obligations of the Corporation under
this Agreement.

 

(d)                                 In the event of any payment by the
Corporation under this Agreement, the Corporation shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee with
respect to any insurance policy, who shall execute all papers required and take
all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce
such rights in accordance with the terms of such insurance policy.  The
Corporation shall pay or reimburse all Expenses actually and reasonably incurred
by Indemnitee in connection with such subrogation.

 

(e)                                  The Corporation shall not be liable under
this Agreement to make any payment of amounts otherwise indemnifiable hereunder
(including, but not limited to, Expenses, judgments, fines, ERISA excise taxes
or penalties, and amounts paid in settlement) if and to the extent that
Indemnitee has otherwise actually received such payment under the Corporation’s
Certificate of Incorporation or Bylaws, or any insurance policy, contract,
agreement or otherwise.

 

(f)                                    The Corporation’s obligation to indemnify
or advance Expenses hereunder to Indemnitee who is or was serving at the request
of the Corporation as a director, officer, employee or agent of any Other
Enterprise shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from such Other Enterprise.

 

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Section 8.                                            Limitation on
Indemnification.  Notwithstanding any other provision herein to the contrary,
the Corporation shall not be obligated pursuant to this Agreement:

 

(a)                                  Claims Initiated by Indemnitee. To
indemnify or advance expenses to Indemnitee with respect to a Proceeding (or
part thereof) initiated by Indemnitee, except with respect to a Proceeding
brought to establish or enforce a right to indemnification (which shall be
governed by the provisions of Sections 6(b) and 8(b) of this Agreement), unless
such Proceeding (or part thereof) was authorized or consented to by the Board of
Directors of the Corporation or the Proceeding was commenced following a Change
of Control.

 

(b)                                 Action for Indemnification. To indemnify
Indemnitee for any Expenses incurred by Indemnitee with respect to any
Proceeding instituted by Indemnitee to enforce or interpret this Agreement,
unless Indemnitee is successful in establishing Indemnitee’s right to
indemnification in such Proceeding, in whole or in part, or unless and to the
extent that the court in such Proceeding shall determine that, despite
Indemnitee’s failure to establish his or her right to indemnification,
Indemnitee is entitled to indemnity for such Expenses; provided, however, that
nothing in this Section 8(b) is intended to limit the Corporation’s obligation
with respect to the advancement of Expenses to Indemnitee in connection with any
such Proceeding instituted by Indemnitee to enforce or interpret this Agreement,
as provided in Section 5 hereof.

 

(c)                                  Certain Statutory Violations. To indemnify
Indemnitee on account of any Proceeding with respect to which final judgment is
rendered against Indemnitee for (i) payment or an accounting of profits arising
from the purchase or sale by Indemnitee of securities in violation of
Section 16(b) of the Exchange Act or any similar successor statute, or (ii) any
reimbursement of the Corporation by the Indemnitee of any bonus or other
incentive-based or equity-based compensation or of any profits realized by the
Indemnitee from the sale of securities of the Corporation, as required in each
case under the Exchange Act (including any such reimbursements that arise from
an accounting restatement of the Corporation pursuant to Section 304 of the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the
Corporation of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 306 of the Sarbanes-Oxley Act).

 

(d)                                 Non-compete and Non-disclosure.  To
indemnify Indemnitee in connection with Proceedings or claims involving the
enforcement of non-compete and/or non-disclosure agreements or the non-compete
and/or non-disclosure provisions of employment, consulting or similar agreements
the Indemnitee may be a party to with the Corporation, or any subsidiary of the
Corporation or any Other Enterprise.

 

Section 9.                                            Mutual Acknowledgement. 
Both the Corporation and the Indemnitee acknowledge that in certain instances,
federal law or applicable public policy may prohibit the Corporation from
indemnifying its directors, officers, employees, agents or fiduciaries under
this Agreement or otherwise.  The Indemnitee understands and acknowledges that
the Corporation has undertaken or may be required in the future to undertake
with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Corporation’s right under public policy to indemnify the Indemnitee.

 

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Section 10.                                      Certain Settlement Provisions. 
The Corporation shall have no obligation to indemnify Indemnitee under this
Agreement for amounts paid in settlement of any Proceeding without the
Corporation’s prior written consent, which shall not be unreasonably withheld,
conditioned or delayed; provided, however, that if a Change of Control has
occurred, the Corporation shall be liable for indemnification of Indemnitee for
amounts paid in settlement if the Independent Counsel has approved the
settlement.  The Corporation shall not settle any Proceeding in any manner that
would impose any fine or other obligation on Indemnitee without Indemnitee’s
prior written consent, which shall not be unreasonably withheld, conditioned or
delayed.

 

Section 11.                                      Savings Clause. If any
provision or provisions of this Agreement shall be invalidated on any ground by
any court of competent jurisdiction, then the Corporation shall nevertheless
indemnify Indemnitee as to Expenses, judgments, fines and amounts paid in
settlement with respect to any Proceeding, including an action by or in the
right of the Corporation, to the full extent permitted by any applicable portion
of this Agreement that shall not have been invalidated and to the full extent
permitted by applicable law.

 

Section 12.                                      Contribution.  In order to
provide for just and equitable contribution in circumstances in which the
indemnification provided for herein is held by a court of competent jurisdiction
to be unavailable to Indemnitee in whole or in part, it is agreed that, in such
event, the Corporation shall, to the fullest extent permitted by law, contribute
to the payment of Indemnitee’s Expenses, judgments, fines and amounts paid in
settlement with respect to any Proceeding, or any claims, issues or matters in
such Proceeding, in an amount that is just and equitable in the circumstances,
taking into account, among other things, contributions by other directors and
officers of the Corporation or others pursuant to indemnification agreements or
otherwise; provided, that, without limiting the generality of the foregoing,
such contribution shall not be required where such holding by the court is due
to (i) the failure of Indemnitee to meet the standard of conduct set forth in
Section 2 hereof, or (ii) any limitation on indemnification set forth in
Section 7(e), 8, 9 or 10 hereof.

 

Section 13.                                      Form and Delivery of
Communications.  All notices and other communications given or made pursuant to
this Agreement shall be in writing and shall be deemed effectively given: 
(i) upon personal delivery to the party to be notified, (ii) if sent via
facsimile, upon confirmation of facsimile transfer or, if sent via electronic
mail, upon confirmation of delivery when directed to the relevant electronic
mail address, if sent during normal business hours of the recipient, or if not
sent during normal business hours of the recipient, then on the recipient’s next
business day, (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.  All communications shall be
sent to the address, facsimile number or electronic mail address set forth
below, or to such other address, facsimile number or electronic mail address as
may have been furnished hereafter to Indemnitee by the Corporation or to the
Corporation by Indemnitee, as the case may be.

 

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If to the Corporation:

 

Attn:  General Counsel (legal notice)

Facsimile:  (913) 498-3472

Electronic Mail Address:

 

If to Indemnitee:

 

 

Section 14.                                      Nonexclusivity.  The provisions
for indemnification, advancement of Expenses and contribution set forth in this
Agreement shall not be deemed exclusive of any other rights which Indemnitee may
have under any provision of law, the Corporation’s Certificate of Incorporation
or Bylaws, in any court in which a Proceeding is brought, the vote of the
Corporation’s stockholders or disinterested directors, other agreements or
otherwise, and Indemnitee’s rights hereunder shall continue after Indemnitee has
ceased acting as a director or officer of the Corporation, or ceased serving at
the Corporation’s request as a director, officer, employee or agent of any Other
Enterprise, and shall inure to the benefit of the heirs, executors,
administrators and legal representatives of Indemnitee.  However, no amendment
or alteration of the Corporation’s Certificate of Incorporation or Bylaws or any
other agreement shall adversely affect the rights provided to Indemnitee under
this Agreement.

 

Section 15.                                      Enforcement.  The Corporation
shall be precluded from asserting in any judicial Proceeding that the procedures
and presumptions of this Agreement are not valid, binding and enforceable.  The
Corporation agrees that its obligations set forth in this Agreement are unique
and special, and that failure of the Corporation to comply with the provisions
of this Agreement will cause irreparable and irremediable injury to Indemnitee,
for which a remedy at law will be inadequate.  As a result, in addition to any
other right or remedy Indemnitee may have at law or in equity with respect to
breach of this Agreement, Indemnitee shall be entitled to injunctive or
mandatory relief directing specific performance by the Corporation of its
obligations under this Agreement.

 

Section 16.                                      Interpretation of Agreement. 
It is understood that the parties hereto intend this Agreement to be interpreted
and enforced so as to provide indemnification of, and advancement of Expenses
and contribution to, Indemnitee to the fullest extent now or hereafter permitted
by law.

 

Section 17.                                      Entire Agreement.  This
Agreement and the documents expressly referred to herein constitute the entire
agreement between the parties hereto with respect to the matters covered hereby,
and any other prior or contemporaneous oral or written understandings or
agreements with respect to the matters covered hereby are expressly superseded
by this Agreement.

 

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Section 18.                                      Modification and Waiver.  No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar) nor shall such waiver constitute
a continuing waiver.

 

Section 19.                                      Successor and Assigns.  All of
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the parties hereto and their
respective successors, assigns, heirs, executors, administrators and legal
representatives.  The Corporation shall require and cause any direct or indirect
successor (whether by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporation, by written
agreement in form and substance reasonably satisfactory to Indemnitee, expressly
to assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform if no such succession
had taken place.  This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as a director, officer, employee, agent of
fiduciary (as applicable) of the Corporation or of any Other Enterprise.

 

Section 20.                                      Service of Process and Venue. 
For purposes of any Proceedings to enforce this Agreement, the Corporation and
Indemnitee hereby irrevocably and unconditionally (i) agree that any Proceeding
arising out of or in connection with this Agreement shall be brought only in the
Chancery Court of the State of Delaware (the “Delaware Court”), and not in any
other state or federal court in the United States of America or any court in any
other country, (ii) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any Proceeding arising out of or in connection
with this Agreement, (iii) irrevocably appoint, to the extent such party is not
otherwise subject to service of process in the State of Delaware, CT Corporation
as its agent in the State of Delaware as such party’s agent for acceptance of
legal process in connection with any such Proceeding against such party with the
same legal force and validity as if served upon such party personally within the
State of Delaware, (iv) waive any objection to the laying of venue of any such
Proceeding in the Delaware Court, and (v) waive, and agree not to plead or to
make, any claim that any such Proceeding brought in the Delaware Court has been
brought in an improper or inconvenient forum.

 

Section 21.                                      Governing Law.  This Agreement
shall be governed exclusively by and construed according to the laws of the
State of Delaware, as applied to contracts between Delaware residents entered
into and to be performed entirely within Delaware.  If a court of competent
jurisdiction shall make a final determination that the provisions of the law of
any state other than Delaware govern indemnification of, or advancement of
Expenses or contribution to, its officers and directors by the Corporation, then
the indemnification, advancement of Expenses and contribution provided under
this Agreement shall in all instances be enforceable to the fullest extent
permitted under such law, notwithstanding any provision of this Agreement to the
contrary.

 

Section 22.                                      Employment Rights. Nothing in
this Agreement is intended to create in Indemnitee any right to employment or
continued employment.

 

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Section 23.                                      Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed to be
an original and all of which together shall be deemed to be one and the same
instrument, notwithstanding that both parties are not signatories to the
original or same counterpart.

 

Section 24.                                      Headings. The section and
subsection headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.

 

Section 25.                                      Section 409A. It is intended
that any indemnification payment or advancement of Expenses made hereunder shall
be exempt from Section 409A of the Internal Revenue Code of 1986, as amended,
and the guidance issued thereunder (“Section 409A”) pursuant to Treasury
Regulation Section 1.409A-1(b)(10).  Notwithstanding the foregoing, if any
indemnification payment or advancement of Expenses made hereunder shall be
determined to be “nonqualified deferred compensation” within the meaning of
Section 409A, then (i) the amount of the indemnification payment or advancement
of Expenses during one taxable year shall not affect the amount of the
indemnification payments or advancement of Expenses during any other taxable
year, (ii) the indemnification payments or advancement of Expenses must be made
on or before the last day of the Indemnitee’s taxable year following the year in
which the expense was incurred, and (iii) the right to indemnification payments
or advancement of Expenses hereunder is not subject to liquidation or exchange
for another benefit.

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
parties hereto to be effective as of the date first above written.

 

 

 

NIC INC.

 

 

 

 

 

By

 

 

Name:

 

Title:

 

 

 

 

 

INDEMNITEE:

 

 

 

 

 

 

By

 

 

Name:

 

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