**Exhibit10.53**

**SEPARATIONAND SEVERANCE AGREEMENT**

**AND RELEASEOF CLAIMS**

Thepurpose of this Agreement is to set forth the terms and provisions of aseverance agreement agreed to between Eric J. Bur (hereinafter “Employee”) andEmployee’s former employer, NIC Inc., a Colorado corporation, its parents,subsidiaries, affiliates and related companies (hereinafter referred tocollectively as “Employer” or “Company”), in connection with the terminationand severance of the Employee’s employment from Employer and to waive andrelease any claims by the Employee against the Employer.

Inconsideration of the mutual promises and agreements herein contained, theEmployee and Employer agree as follows:

A.                                 *Separation from Employment*.**Employee shall hereby be deemed to have voluntarily separated from hisposition of employment with Employer, effective August 15, 2007. Employeeacknowledges that all base compensation due the employee, including salary andaccrued but unused vacation due Employee, has been agreed to be paid through August15, 2007, at the Employer’s regular payroll intervals of June 29, July 13, July31 and August 15, 2007.

B.            *Paymentsby Employer.*

1.                                      The Employer will pay the Employee theadditional gross amount of $202,175.48, less all deductions required by law, asa severance payment (the “Severance Payment”). The Severance Payment shall bemade on July 13, 2007. Employer shall furnish Employee with a copy of thecalculation of the deductions made from such gross amount at the time ofpayment of the Severance Payment.

2.                                       The Employee shall be entitled to allbenefits upon termination for which he is qualified in accordance with thevarious benefit plans in existence at the time of termination, including butnot limited to the right to have his 2007 tranche of restricted stock vest atits regularly scheduled time at the end of July, 2007, and his last tranche ofstock options vest on the scheduled date of August 1, 2007, and the right toexercise and sell or retain those vested shares and exercised options betweenAugust 2 and August 15, 2007, in accordance with the Employer’s Insider TradingPolicy and federal law. In addition, he will be entitled to have his COBRApremiums paid through December 31, 2007 following his termination ofemployment. Employee may inform Employer at the notice address listed herein,should he desire to terminate COBRA premium payments earlier than the end ofthe period described in this paragraph.

3.                                       The Employee, in exchange for the SeverancePayment provided under this Agreement, freely and voluntarily agrees to theWaiver and Release set forth below. Employee acknowledges that the SeverancePayment is consideration in addition to anything of value to which the Employeeis already entitled.

----

4.                                    The Employee acknowledges that the SeverancePayment provided under paragraph 1 above is being made under the Company’sSeverance Policy and that this Agreement memorializes each party’s obligationsunder that Severance Policy. Employee further acknowledges that, to the extentthat Employer is providing Employee with payments or benefits beyond those setforth in the Company’s Severance Policy, Employer, in providing such paymentsor benefits, docs not intend to establish any policy or practice thereby.

C.                                 *Waiver and Release of Claims byEmployee*. Except for theobligations created under this Agreement, Employee, on behalf of Employee andEmployee’s heirs, personal representatives, successors and assigns,(collectively the “Employee Releasors”), hereby jointly and severally fully andforever release, acquit and discharge Employer and its successors, partners,employees, agents, and any related party which includes all subsidiaries,affiliates, and parent corporations or entitles, their respective heirs,personal representatives, successors and assigns (each an “Employee Releasee”and collectively the “Employee Releasees”), of and from any and all claims,counterclaims and causes of action whatsoever which the Employee Releasors,jointly and severally, ever had, now have, or hereafter can, shall or may haveagainst the Employee Releasees, jointly and severally, arising out of or inconnection with the Employee’s employment with the Employer, including thetermination of said employment. This release includes, but is not limited to:all claims based on Employee’s employment by and termination from Employerincluding all claims arising under or in connection with any U.S. federal,state and municipal law, including without limitation, the Age DiscriminationAct of 1967, as amended; the Americans with Disabilities Act of 1990, asamended; Title VII of the Civil Rights Act of 1964, as amended; the CivilRights Act of 1991, as amended; the Civil Rights Acts of 1866 and 1871, asamended; the Equal Pay Act; the Fair Labor Standards Act; the Family andMedical Leave Act; the National Labor Relations Act; the Occupational Safetyand Health Act, the Older Workers Benefit Protection Act of 1990; theRehabilitation Act of 1973, Executive Order 11246; the Employee RetirementIncome Security Act of 1974, as amended; and the common law of the state inwhich the Employee was employed and/or performed work, for tort, breach ofexpress or implied employment contract, wrongful discharge, intentionalinfliction of emotional distress, and defamation or injuries incurred on thejob or incurred as a result of loss of employment. Employee understands andagrees that he is waiving and releasing any and all claims that he now hasagainst the Employer, regardless of their nature or origin, and the fact that suchclaim is not listed in the paragraph above does not mean that such claim is notincluded in this Agreement. Employee expressly covenants not to sue Employerfor any claims, whether known or unknown, arising from Employee’s employmentrelationship with Employer or any claims existing as of this date.

D.                                *Reaffirmation ofNon-Disclosure Obligations*. Employeeacknowledges that during the course of Employee’s employment and as a conditionof employment or continued employment, Employee undertook certainnon-disclosure obligations, which prohibit Employee from disclosing or usingany confidential and/or proprietary information to which Employee had accessduring his Employment, and which are incorporated herein by reference.  Employee acknowledges that his non-disclosureobligations continue and

----

that nothing containedherein is intended to modify or abrogate those obligations; provided however,that Employee is expressly permitted to have contact with those investmentanalysts with whom he interacted while Chief Financial Officer of Employer, forthe exclusive purposes of discussing his voluntary separation (but not thespecific terms of this Agreement pursuant to paragraph 1, or any other detailsof the Employer) and reaffirming the contents of the Employer-issued pressrelease of June 27, 2007 regarding Employee’s departure.

E.                                  *Non-CompetitionObligations.*Employeeacknowledges that Employee and Employer entered into certain agreement(s) whichprevent Employee from competing with Employer following his separation fromemployment, which agreement(s) is incorporated herein by reference. Employeeacknowledges his continuing obligations under said agreement(s) and furtheracknowledges that nothing contained herein is intended to modify or abrogatethose obligations.

F.                                  *No Assignment.*As of the date of the signing of thisAgreement, the Employee represents that he has made no assignment of any claimsagainst any persons or organizations described as Releasors in paragraph Cabove.

G.                                  *Older Worker BenefitProtection Act Requirements*. Employeehereby acknowledges that he has been given a copy of this document, and that hehas been informed in writing that he has up to twenty-one (21) calendar days inwhich to consider whether he will sign this Agreement. He also acknowledgesthat he has been informed that he should consult with an attorney beforesigning this Agreement. Employee acknowledges that he has been informed that hemay also revoke Employee’s acceptance of this Agreement and waiver of claims bydelivering a letter of revocation to **NIC Inc.,Attention: President (LEGAL NOTICE), 10540 S. Ridgeview Road, Olathe, KS 66061,**within seven days of the date he has signed this Agreement. Heunderstands that this Agreement will not become effective until the eighth dayfollowing Employee’s signing of this Agreement. He understands and intends thatin the event that he does not revoke acceptance of this Agreement within theseven-day period described in this paragraph, this Agreement and the releasescontained herein will be legally binding and enforceable on Employee, his heirs,administrators, and assigns. The Employee further acknowledges that he will receivethe Severance Pay only upon expiration of the seven (7) day time period describedabove, and at the company’s next regularly-scheduled pay period following the expirationof any revocation period herein.

H.                                *Modification of EntireAgreement*. This Agreement may bemodified by a writing duly signed by the Employee and Employer. It is furtherunderstood and agreed that this is the entire agreement between the parties,and that no promises, representations, understandings, or warranties have beenmade by any party respecting the subject of this Agreement, and that all suchagreements are contained herein.

I.                                     *Confidentiality.*The Employer and Employee agree from the dateof the execution of this Agreement, that they shall maintain theconfidentiality of the existence and terms of this Agreement, and will notdisclose same except as required by law or for internal business

----

reasonsof the Employer, and except to the extent the Employee is required to disclosesame to his immediate family, or to those persons necessary for the preparationand filing of tax returns, or for the seeking of and consultation with legalcounsel. Employee shall advise such persons that the terms of this Agreementare confidential and must be treated as such by these persons.

J.                                      *Return of Employer Property*. The Employee agrees to and by Employee’ssignature below acknowledges that he has returned all proprietary informationof the Employer including business records, client files, documents, reports,communications, working papers, computer software, email, and other datacontent of any computer to the Employer. Employee further acknowledges that hehas returned all property and equipment of the Employer, including keys, creditcards, phone cards, access control cards, PDAs, cell phones and any otherCompany property that was in Employee’s possession as of the date of separationfrom employment.

K.                                  *Effective Date*. Except as provided above, this Agreementshall become effective upon the signing by both Employer and Employee, with aneffective date that is the date of its execution by the later of Employer ofEmployee.

L.                                     *Severability.*In the event that any provision of thisAgreement is held to be contrary to any statute or law, or otherwiseunenforceable, the remaining provisions of this Agreement shall be enforced tothe fullest extent practicable. As used in this Settlement Agreement, the term “and”means “and/or”, the singular includes the plural and the masculine includes thefeminine and neuter.

M.                               *No Admission*. The parties agree that the facts recited inthis Agreement are recited only for purposes of this document, and are notintended by the parties for use, nor shall they

----

be used as admissions orstipulations admissible in any other litigation, and that by entering into thisAgreement, the Employer does not establish any policy or practice thereby.
|        | “Employee” |
|--------|----------------------|
|   |                 |
|   |                 |
|   | [ILLEGIBLE]          | 6/27/07 |
|   |                 | Date |
|   | “Employer” |
|   |                 |
|   |                 |
|   | By                   | [ILLEGIBLE] | 6/27/07 |
|   |                 |   | Date |

 
| Country of Johnson | ) |   |   |
|--------------------|---|--------|--------|
|               | ) |   | ss.    |
| State of Kansas    | ) |   |   |

 

Before me, the undersigned notary, on 6-27-,2007, came Eric J. Bur, who provided to me satisfactory proof of his identity,and who signed and acknowledged the above signature to be his own.
| (seal)               |                             |
|----------------------|----------------------------------|
| [LOGO]               | Notary Public -  State of Kansas | /s/ Jennifer A.  Stolper |   |
| JENNIFER A.  STOLPER | Notary                           |
| My Appl. Exp.        | 4-22-2011                        |   | My commission  expires: | 4-22-2011 |   |
|                      |                                  |  |  |  |  |  |  |

 

 

 

----