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 


 

















 


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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