Exhibit 10.2


 


NIC
INC. 2006 AMENDED AND RESTATED

STOCK OPTION AND INCENTIVE PLAN


 


Stock
Option Agreement


 


1.             Grant of Option. NIC Inc., a Colorado corporation (the “Company”),
hereby grants to the Optionee named in the Certificate of Stock Option Grant
(the “Certificate”), an option to purchase (the “Option”) the total number of
shares subject to the Option (the “Shares”) set forth in the Certificate at the
Grant Price per share set forth in the Certificate subject to the terms and
provisions of this Stock Option Agreement (the “Agreement”) and of the
Certificate and the NIC Inc. 2006 Amended and Restated Stock Option and
Incentive Plan (the “Plan”), which are incorporated herein by reference. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Agreement. By accepting the Option, the Optionee (and
any person to whom the Option is transferred) acknowledges that the Plan has
been made available to him or her.


 


If designated in the
Certificate as an Incentive Stock Option, the Option is intended to qualify as
an Incentive Stock Option as defined in Code Section 422. Nevertheless, to the
extent that it exceeds the $100,000 rule of Code Section 422(d), the Option
shall be treated as a Non-Qualified Stock Option. If designated in the
Certificate as a Non-Qualified Stock Option, the Option is not intended to
qualify as an Incentive Stock Option under Code Section 422.


 


The Company seeks to
provide a means by which the Company, through the grant of the Option to the
Optionee may retain the Optionee’s services and motivate the Optionee to exert
his or her best efforts on behalf of the Company and any Affiliate.


 


2.             Terms and Conditions.


 


(a)           Grant Expiration Date. The Option shall expire on the Grant Expiration
Date provided in the Certificate. The Optionee is responsible for taking any
and all actions as may be required to exercise the Option in a timely manner,
and for properly executing any documents as may be required for the exercise of
the Option in accordance with such rules and procedures established from time
to time under the Plan. The Company has no duty to notify the Optionee (or any
person to whom the Option is transferred) of the expiration of the Option. By
accepting the Option, the Optionee (and any person to whom the Option is
transferred) acknowledges that the information regarding the procedures and
requirements for the exercise of the Option has been made available to him or
her.


 


(b)           Exercise of Option During
Continuous Employment. Subject to
the provisions of this Agreement, the Option may be exercised by the Optionee
in installments as provided in the Certificate, rounded to the next lowest
integer in the case of any fractional share.


 


To the extent not
exercised, an installment shall accumulate and be exercisable, in whole or in
part, in any subsequent period but not later than the Grant Expiration Date
provided in Section 2(a) of this Agreement. When the right to exercise any
installment accrues, the Shares included in that installment may be purchased
at that time or from


 


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time thereafter
during the Option period ending on the Grant Expiration Date provided in
Section 2(a) of this Agreement.


 


An exercise of any part
of the Option shall be accompanied by a written notice to the Company as
provided in Section 5 of this Agreement and specifying the number of Shares as
to which the Option is being exercised.


 


(c)           Exercise Upon Termination of
Employment or Relationship as a Director or Consultant.


 


Death. In the event that the Optionee’s
Continuous Status as an Employee, Director or Consultant terminates due to his
or her death, the Option may be exercised by the Optionee’s estate or by any
other person who acquired the Option by reason of the death of the Optionee
within the 12 months immediately following his or her death and to the extent
that the Optionee was entitled to exercise the Option at the date of his or her
death; provided, however, that the Option may not be exercised after the Grant
Expiration Date provided in Section 2(a) of this Agreement.


 


Disability. If the Optionee’s Continuous
Status as an Employee, Director or Consultant terminates due to his or her
disability (as defined in Code Section 22(e)(3)), the Option may be exercised
by the Optionee within the 12 months immediately following such termination and
to the extent that the Optionee was entitled to exercise the Option at the date
of his or her termination due to his or her disability; provided, however, that
the Option may not be exercised after the Grant Expiration Date provided in
Section 2(a) of this Agreement.


 


Other Termination of Relationship. If the
Optionee’s Continuous Status as an Employee, Director or Consultant terminates
other than by death or due to disability and other than involuntarily for cause
or voluntarily by the Optionee, the Optionee’s right to exercise the Option may
be exercised within the 30 days immediately following such termination and to
the extent that the Optionee was entitled to exercise the Option at the date
his or her termination; provided, however, that the Option may not be exercised
after the Grant Expiration Date provided in Section 2(a) of this Agreement.


 


If the Optionee’s
Continuous Status as an Employee, Director or Consultant is voluntarily
terminated by the Optionee or involuntarily terminated for cause, the Optionee’s
right to exercise the Option shall immediately terminate and any then
unexercised portion of the Option shall be immediately canceled.


 


For purposes of this
Agreement, the term “cause” shall mean, with respect to any Optionee, (a) cause
as defined in the employment agreement with the Company or any subsidiary
thereof to which the Optionee is a party or, if none, (b) the occurrence of any
of the following events:


 


(i)            the willful and continued failure by the Optionee
to substantially perform his or her duties with the Company or any subsidiary
thereof on a full-time basis (other than any such failure resulting from total
or partial incapacity due to physical or mental illness) after a written 


 


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demand for substantial performance is
delivered to the Optionee by the Board, which demand identifies the manner in
which the Board believes that he or she has not substantially performed such
duties;


 


(ii)           the willful engaging by the Optionee in conduct
which is significantly injurious to the Company or to any subsidiary of the
Company, monetarily or otherwise, after a written demand for cessation of such
conduct is delivered to the Optionee by the Board, which demand specifically
identifies the manner in which the Board believes that the Optionee has engaged
in such conduct and the injury to the Company or to a subsidiary of the Company
resulting therefrom;


 


(iii)          the commission by the Optionee of an act or acts
constituting a crime involving moral turpitude;


 


(iv)          the breach by the Optionee of one or more
covenants, if any, in an agreement to which the Optionee and the Company are
parties;


 


(v)           violation by the Optionee of Company policy; or


 


(vi)          the commission by the Optionee of a significant
act of dishonesty, deceit or breach of fiduciary duty in the performance of the
Optionee’s duties with the Company or with any subsidiary of the Company.


 


For purposes of clauses
(i) and (ii) of this definition, no act, or failure to act, on the part of an
Optionee shall be deemed to be willful unless knowingly done, or omitted to be
done, by the Optionee not
in good faith and without a reasonable belief that such action or omission was
in the best interests of the Company or of a subsidiary of the Company.


 


(d)           Payment of Grant Price Upon
Exercise. At the time of any
purchase of Shares under the Option, the Grant Price for such Shares as set
forth in the Certificate shall be paid by the Optionee in full to the Company.
The Optionee may pay the Grant Price in whole or in part by any of the
following methods:


 


(i)            cash or by check made payable to the Company;


 


(ii)           by delivery to the Company of certificates
representing the number of Shares then owned by the Optionee, the Fair Market
Value of which equals the purchase price of the Shares purchased pursuant to
the Option, properly endorsed for transfer to the Company; provided, however,
that Shares used for this purpose must have been held by the Optionee for such
minimum period of time as may be established from time to time by the
Committee; and provided further that the Fair Market Value of any Shares
delivered in payment of the purchase price upon exercise of the Options shall
be the Fair Market Value as of the exercise date, 


 


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which shall be the date of delivery of the
certificates for the Shares used as payment of the Option Grant Price;


 


In lieu of actually surrendering to the
Company the stock certificates representing the number of Shares then owned by
the Optionee, the Optionee may submit to the Company a statement affirming
ownership by the Optionee of such number of Shares (together with such evidence
of ownership as the Company may require) and request that such Shares, although
not actually surrendered, be deemed to have been surrendered by the Optionee as
payment of the exercise price;


 


(iii)          by authorizing a third party to sell a sufficient
portion of the Shares acquired upon the exercise of the Option and remit to the
Company the portion of the sale proceeds sufficient to pay the Grant Price and
any tax withholding resulting from such exercise that is not paid by the
Optionee in cash or by check; or


 


(iv)          any combination of the consideration provided in
the foregoing subsections (i), (ii) and (iii).


 


(e)           Nontransferability. The Option shall not be transferable other than by
a will of the Optionee or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the Optionee only by the Optionee or his
attorney-in-fact or conservator, unless the Option is an Incentive Stock Option
and such exercise by the attorney-in-fact or the conservator of the Optionee
would disqualify the Option as such under Code Section 422.


 


(f)            Adjustments in Event of Change in
Common Stock. If any change is
made in the Shares subject to the Option, without the receipt of consideration
by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Option will be appropriately
adjusted in the class(es) and number of shares and price per share of stock of
those subject Shares in such manner as the Board may deem equitable to prevent
substantial dilution or enlargement of the rights granted to the Optionee;
provided, however, that no such adjustment shall cause the Company to issue a
fractional share under the Option. Such adjustments shall be final, binding and
conclusive. (The conversion of any convertible securities of the Company shall
not be treated as a transaction not involving the receipt of consideration by
the Company.)


 


(g)           No Rights as a Shareholder. The Optionee shall have no rights as a shareholder
with respect to any Shares subject to the Option prior to the date of issuance
to him or her of a certificate or certificates for such Shares.


 


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(h)           No Rights to Continued
Relationship. The Option shall
not confer upon the Optionee any right with respect to continuance of
employment by the Company or by an Affiliate, nor shall it interfere in any way
with the right of his or her employer to terminate his or her employment at any
time.


 


The Option shall not
confer upon the Optionee any right with respect to continuance of a
directorship of the Company or of an Affiliate, nor shall it interfere in any
way with the right of the shareholders to remove him or her as a director at
any time.


 


The Option shall not
confer upon the Optionee any right with respect to continuance of any
consulting arrangement with the Company or any Affiliate, nor shall it
interfere in any way with the right of the Company or an Affiliate, as the case
may be, to terminate any such arrangement.


 


(i)            Sale of the Company. In the event of a dissolution, liquidation or sale
of all or substantially all of the assets of the Company, or that the Company
is not the surviving corporation in any merger, consolidation, or
reorganization, then the Option shall be canceled as of the effective date of
such transaction; provided, however, the Board shall give at least 30 days’
written notice of the transaction to the Optionee and during the period
beginning the Optionee receives the notice and ending on the date of the
transaction, the Optionee shall have the right to exercise all or any part of
the unexercised portion of the Option (without regard to employment
requirements or any installment exercise limitations) (the “Accelerated Amount”);
provided further that no part of the Option may be exercised after the Grant
Expiration Date provided in Section 2(a) of this Agreement. If the Option is an
Incentive Stock Option, the Accelerated Amount under this Section shall remain
exercisable as an Incentive Stock Option under Code Section 422 only to the
extent that the $100,000 dollar limitation of Code Section 422(d) is not
exceeded. To the extent that such dollar limitation is exceeded, the
Accelerated Amount shall be exercisable as a Non-Qualified Stock Option.


 


(j)            Compliance with Other Laws and
Regulations. The Option and the
obligation of the Company to sell and deliver Shares hereunder, shall be
subject to all applicable federal and state laws, rules, and regulations, and
to such approvals by any government or regulatory agency as may be required.
The Company shall not be required to issue or deliver any certificates for
Shares prior to the completion of any registration or qualification of such
Shares under any federal or state law, or any rule or regulation of any
governmental body which the Company shall, in its sole discretion, determine to
be necessary or advisable.


 


To the extent applicable,
it is intended that this Agreement and the Plan comply with the provisions of
Section 409A of the Code. This Agreement and the Plan shall be administered in
a manner consistent with this intent, and any provision that would cause this
Agreement or the Plan to fail to satisfy Section 409A of the Code shall have no
force or effect until amended to comply with Section 409A of the Code (which
amendment may be retroactive to the extent permitted by Section 409A of the
Code and may be made by the Company without the consent of the Optionee).


 


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(k)           Withholding Taxes. The Optionee agrees to make appropriate
arrangements with the Company or Affiliate, as the case may be, for the
satisfaction of all federal, state and local income and employment tax
withholding requirements applicable to the exercise of the Option. No Shares
will be delivered pursuant to the exercise of the Option until the Optionee, or
any other person to whom the Option is transferred, has made acceptable
arrangements for these withholding requirements. Unless denied by the
Committee, the Optionee may elect to pay all minimum required amounts of tax
withholding, or any part thereof, by electing to transfer to the Company, or
have withheld from any shares otherwise eligible to be delivered under this
Agreement, shares of Common Stock having a value equal to the minimum amount
required to be withheld under federal, state or local law or such lesser amount
as may be elected by the Optionee. The value of shares of Common Stock to be
transferred to the Company shall be the fair market value of the shares on the
date that the amount of tax to be withheld is to be determined (the “Tax Date”),
as determined by the Company. Any such elections by the Optionee to have shares
of Common Stock withheld for this purpose will be subject to the following
restrictions:


 


(i)            All elections must be made prior to the Tax Date;


 


(ii)           All elections shall be irrevocable; and


 


(iii)          If the Optionee is an officer or director of the
Company within the meaning of Section 16 of the Securities Exchange Act of 1934
(“Section 16”), the Optionee must satisfy the requirements of such Section 16
and any applicable rules thereunder with respect to the use of Common Stock to
satisfy such tax withholding obligation.


 


3.             Investment Representation. The Company may require that the Optionee furnish
to the Company, as a condition of exercising or acquiring stock underlying the
Option, (a) written assurances satisfactory to the Company, or counsel for
the Company, as to the Optionee’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company, or counsel for the Company, who is knowledgeable and
experienced in financial and business matters, and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Option; and (b) written assurances satisfactory to the
Company, or counsel for the Company, stating that the Optionee is acquiring the
stock subject to the Option for the Optionee’s own account and not with any
present intention of selling or otherwise distributing the stock underlying the
Option. The Company may (a) restrict the transferability of the stock
underlying the Option and require a legend to be endorsed on the certificates
representing such stock, as appropriate to reflect resale restrictions, if any,
imposed by the Board pursuant to the Option when granted, or as appropriate to
comply with any applicable state or federal securities laws, rules or
regulations; and (b) condition the exercise of the Option or the issuance
and delivery of stock underlying the Option upon the listing, registration or
qualification of such stock upon a securities exchange or quotation system or
under applicable securities laws. The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if
(a) the issuance of stock upon the exercise of the Option has been
registered under a then currently effective registration statement under the
Securities Act, or (b) as to any 


 


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particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Option as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the
transfer of the stock.


 


4.             Optionee Bound by the Plan. The Optionee agrees to be bound by all the terms
and provisions of the Plan. To the extent that the terms of this Agreement are
inconsistent with the terms of the Plan, the terms of the Plan shall govern.
The captions used in the Certificate, this Agreement, and the Plan are inserted
for convenience and shall not be deemed a part of the Option for construction
or interpretation.


 


This Agreement, the
Certificate, and the Plan shall be construed in accordance with the laws of the
State of Colorado, without regard to the conflict of laws principles.


 


5.             Notices. Any notice to the Company or the Board that is
required to be made under the terms of the Agreement or under the terms of the
Plan shall be addressed to the Company in care of its president at 12 Corporate
Woods, 10975 Benson Street, Suite 390, Overland Park, Kansas 66210. Any notice
that is required to be made to the Optionee under the terms of the Agreement or
under the terms of the Plan shall be addressed to him or her at the address
indicated in the Certificate unless the Optionee notifies the Company of his or
her address change in writing as provided in this Section 5 in which case the
notice shall be addressed to the Optionee at his or her new address. A notice
under this Section 5 shall be deemed to have been given or delivered upon
personal delivery or upon deposit in the United States mail, by registered or
certified mail, postage prepaid and properly addressed as provided in this
Section.


 


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