Document:

a50165356_ex10-19.htm

 

Exhibit 10.19

NIC Sales Commission Plan

Senior Vice President of Business Development

Objective

The objective of any NIC  Sales Commission Plan, including this one (the "Plan"), is to fairly compensate employees who contribute significantly to securing significant profitable  contracts (“Contract”) that advance NIC's growth.

General Parameters

The Plan generally provides that NIC Inc. (the "Company" or "NIC") will pay commissions based upon a percentage of the operating income earned under a Contract over the initial term (not including renewal options), subject to the terms and conditions of this Plan and the terms and conditions established hereunder relating to each such Contract.  Due to the potential for significant variance in Contract values and financial risk, NIC, in its sole discretion, may establish a minimum total commission or maximum total commission that may be paid for any specific Contract opportunity.

Plan Term

The Plan covers new Contracts closed on or after September 12, 2012.

Plan Participants

The Chief Executive Officer ("CEO") will make a recommendation to the Compensation Committee of the Board of Directors, as to whether the Senior Vice President of Business Development ("SVP") may be considered for commission payments under the Plan. The determination of the specific percentage of Contract operating income commission recommendation for each Contract is at the discretion of the CEO and the actual percentage is at the discretion of the Compensation Committee.

Determination of Operating Income

Operating income will be determined in accordance with standard NIC accounting policy and is equal to the amount reported monthly in the standard NIC financial statements.  The initial estimate of Contract operating income will be mutually agreed to among the Finance, Sales and Operations divisions.  Disputes regarding the initial estimate of Contract operating income will be escalated to the CEO for final determination. The CEO's determination will be final and binding.

Approval by Compensation Committee of the Board of Directors

The CEO will present the recommendation for SVP commission payments to the NIC Board’s Compensation Committee no later than the next regularly scheduled meeting following the collection of the initial month’s primary funding source revenues for the respective Contract, for approval.

 

 

  

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Timing of Commission Payments

Except as otherwise provided herein, the timing of commission payments shall be as set forth in this section. 50% of the total estimated commission from the first three years of the Contract will be paid within 30 days following Compensation Committee approval.  The remaining 50% of the commission from the first three years of the Contract will be divided into three payments as follows:

First anniversary date of initial commission payment – 20%

Second anniversary date – 20%

Third anniversary date – 10%

Commission payments will be adjusted at least annually based on actual financial results and updated financial forecasts.   If the initial term of the Contract is longer than three years, the commission for the remaining term of the Contract will be paid on each successive anniversary date. The SVP must be employed by NIC on each payment date to receive payment.

Discretionary Payment

NIC, in its sole discretion, reserves the right to administer, interpret, modify, or cancel, at any time, any element of the Plan including, but not limited to bonuses, commissions, or incentive factors or objectives as set forth in this document.  For example, given the risk profile of the particular opportunity, NIC may fix the amount of the total commission, or may reduce the percentage payout of the initial commission payment or subsequent commission payments. The CEO and Compensation Committee may establish additional terms and conditions applicable to each Contract in their sole discretion.

No incentive will be considered as compensation under any employee benefit plan of NIC, except as may be otherwise provided in such employee benefit plan or by law.

No commission will be paid if the SVP does not follow sales policies, procedures or processes, develops an unsatisfactory working relationship with the prospect or customer, or is no longer employed by NIC at the time a commission payment is scheduled to be made.

No portion of a commission will be considered earned until the Contract is properly signed and the initial month’s revenues from the primary funding source have been collected by NIC.

Additional Terms

No Effect on Employment at Will. This Plan does not constitute any type of employment contract, either expressed or implied. This Plan is not intended to, nor does it in any way, detract from the at-will relationship of the parties. Nothing contained in the Plan will give any employee the right to be retained in the employment of the Company or affect the right of the Company to terminate the employment of any employee.

 

  

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Dispute Resolution.  Disagreements or disputes between NIC and the SVP arising out of or relating to interpretation of the Plan shall be submitted to the CEO (or designate) for resolution. The CEO (or designate) shall decide the issue in his or her sole discretion. Such decision will be final and binding.

Other Commissions.  Commissions for Contracts that are not identified within this Plan will be administered at the sole discretion of the CEO, with approval by the Compensation Committee.

Amendment and Termination.  The Plan may be amended or discontinued by the Compensation Committee at any time without prior notification to participants.  However, no amendment may adversely affect commissions under the Plan with respect to a Contract after the collection of the initial month’s primary funding source revenues for the respective Contract, except as expressly provided herein.

Adjustment.  The Compensation Committee maintains sole discretion to adjust commissions under the Plan downward for legitimate and reasonable performance reasons. The Compensation Committee will, to the extent permitted by law, have the sole and absolute authority to make retroactive adjustments to any commissions paid to participants where the payment was predicated upon the achievement of erroneous financial or strategic business results, or where the participant engaged in intentional misconduct that increased his/her commission. Where applicable, NIC may seek to recover any amount determined to have been inappropriately received by a participant under the Plan.

 

Compliance.  The Compensation Committee may obtain such agreements or undertakings, if any, as the Compensation Committee may deem necessary or advisable to assure compliance with any law or regulation of any governmental authority.  The Plan and any commission award made 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.

  

Limitation on Liability.  No member of the Board or Compensation Committee, nor any officer or employee of NIC acting on behalf of the Board or Compensation Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan. 

 

Rights under Plan.  The interests of participants under the Plan are not subject to claims, indebtedness, attachment, execution, garnishment, or other legal or equitable process.  Participant interests under the Plan may not be transferred or assigned, other than by will or by the laws of descent and distribution.  If the Participant attempts to alienate, assign, pledge, hypothecate, or otherwise dispose of commission awards or other rights under the Plan, except as provided for in this Plan, or in the event of any levy, attachment, execution, or similar process upon the right or interest conferred by this Plan, the Board may terminate the participant’s commission awards and rights by notice to the participant, and it shall thereupon become null and void.

 

 

  

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Clawback. By participating in the Plan, each participant is deemed to have acknowledged that any amount paid pursuant to the Plan may be subject to certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) that will require the Company to recover certain amounts of commission paid to certain executive officers by reason of any element by which the commission is determined under this plan that becomes involved in an accounting restatement, if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirements under any applicable securities laws.  By participating in the Plan, each participant agrees and consents to any forfeiture or required recovery or reimbursement obligations of the Company with respect to any compensation paid that is forfeitable or recoverable by the Company pursuant to Dodd-Frank and in accordance with any Company policies and procedures adopted by the Committee in order to comply with Dodd Frank, as the same may be amended from time to time.

Ethical and Legal Standard

 

	 	1.	No employee may pay, offer to pay or give any of their incentive compensation or any other money to any agent, customer or representative of the customer or any other person as an inducement or reward for assistance in making a sale.
	 	 	 
	 	2.	Gifts and entertainment above a nominal amount shall not be given to customers, agents or representatives except in accordance with current NIC's policies and procedures.
	 	 	 
	 	3.	No NIC employee shall enter into any understanding, agreement, plan or scheme, express or implied, formal or informal, with any competitor in regard to prices, terms, or conditions of sales, distribution, territories or customers, nor engage in any other conduct which in the opinion of NIC's legal counsel creates any violations of any municipal, state or federal law or regulation or is contrary to any NIC policy.
	 	 	 
	 	4.	Any failure to adhere to NIC's ethical and legal standards or of other generally recognized ethical and legal business standards will subject an employee to revocation of any commission paid in the past or potentially payable in the future, or of other compensation as provided by this or any other agreement to which the employee might otherwise be entitled. In addition, any such infraction will subject the employee to disciplinary action, up to and including termination.

 

Confidentiality.  This agreement is deemed confidential to the Company, except as otherwise required by law.

 

4a50165356_ex10-20.htm

 

  Exhibit 10.20

 

NIC Profit Sharing and Incentive Program

Senior Vice President of Business Development

 

NIC Inc. (the "Company" or "NIC") is committed to increasing stockholder value through profitable growth and operational execution.  Superior performance by NIC’s management-level employees is essential to achieve these goals, so the Company has established incentive pay programs to attract and retain talented, highly-qualified managers and executives.  By creating a set of common goals and incentives for reaching those goals, we endeavor to meet and exceed the expectations of our stockholders and government partners.  The Company believes a strong emphasis on incentive pay/pay-for-performance assists in accomplishing that goal.

 

The Compensation Committee of the NIC Board of Directors has approved the recommendation of the Chief Executive Officer for a new compensation program for the Corporate Senior Vice President Executive Officer ("SVP-EO") beginning in 2012.  The basic structure of the new program consists of the following:

 

	
  

	
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base salary,

	
  

	
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short-term incentive (i.e., annual cash bonus)—explained below,

	
  

	
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a long-term, equity-based service longevity component that includes annual restricted stock grants---explained below, and

	
  

	
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a commission bonus plan—explained in a separate document.

This compensation program is not intended to bind the Company until compensation described herein is approved or awarded by the Compensation Committee or the Board of Directors.

ANNUAL CASH INCENTIVE COMPONENT

The annual cash incentive component is intended to be funded and accrued at the corporate level, and paid only if NIC achieves its annual operating income guidance to the investment community as originally published or fixed (excluding updated guidance during the year).

The definition of operating income is consistent with that term defined in generally accepted accounting principles.  At the NIC level, operating income is to be derived directly from the face of the consolidated statements of income included in the Company’s Annual Report on Form 10-K for the applicable annual period.  If NIC achieves its annual operating income guidance to the investment community, the annual cash incentive for the SVP-EO will be a percentage of base salary as of May 1 of the performance year, which percentage is recommended by the Chief Executive Officer ("CEO") to, and approved by, the Compensation Committee.

  

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LONG-TERM, EQUITY-BASED SERVICE LONGEVITY COMPONENT

The long-term, equity-based service longevity component provides for annual restricted stock grants for continuous service with the Company.

The annual amount of service-based restricted stock to be awarded will be a percentage of annual base salary as of May 1 of the performance year, which percentage is recommended by the CEO to, and approved by, the Compensation Committee.  These awards vest ratably over a four-year service period following the date of grant, and there are no other performance components tied to the award other than continued employment with the Company over the service period.

ADDITIONAL PROGRAM TERMS AND CONDITIONS

 

Discretionary Payment

NIC, in its sole discretion, reserves the right to administer, interpret, modify, or cancel, at any time, this program or any element of this program including, but not limited to performance criteria, weighting percentages or other incentive factors as set forth in this document.  For example, program structure and performance criteria may be recommended for modification by the CEO to, and approved by, the Compensation Committee.

Except as otherwise may be required by an applicable law, an employee must be employed by NIC on the date of award to receive payment (or become vested in any restricted stock) under this program.  To the extent that any applicable law requires that a payment be made regardless of the employee being an employee on the date of such payment, such payment will in all circumstances be made, if at all, no later than March 15th of the calendar year following the calendar year in which the employee's right to receive the payment became no longer subject to a "substantial risk of forfeiture" within the meaning of section 409A of the Internal Revenue Code.

Additional Terms

No Effect on Employment at Will. This program does not constitute any type of employment contract, either expressed or implied. This program is not intended to, nor does it in any way detract from the at-will relationships of the parties. Nothing contained in this program will give any employee the right to be retained in the employment of the Company or affect the right of the Company to terminate the employment of any employee.

Dispute Resolution.  Disagreements or disputes between NIC and any person arising out of or relating to interpretation of this program shall be submitted to the CEO for a recommended resolution, to be reviewed by the Compensation Committee for approval. Any such determination shall be final and binding.

 

 

  

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Adjustment.  The Compensation Committee maintains sole discretion to adjust incentive payment under the Plan downward for legitimate and reasonable performance reasons. The Compensation Committee will, to the extent permitted by law, have the sole and absolute authority to make retroactive adjustments to any compensation paid where the payment was predicated upon the achievement of erroneous financial or strategic business results, or where the SVP-EO engaged in intentional misconduct that increased his compensation. Where applicable, NIC may seek to recover any amount determined to have been inappropriately received by the SVP-EO.

 

Compliance.  The Compensation Committee may obtain such agreements or undertakings, if any, as the Compensation Committee may deem necessary or advisable to assure compliance with any law or regulation of any governmental authority.  The program and any compensation approved pursuant to the program 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.

  

Limitation on Liability.  No member of the Board or Compensation Committee, nor any officer or employee of NIC acting on behalf of the Board or Compensation Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the program. 

Clawback. Any amount approved and paid under the program may be subject to certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) that will require the Company to recover certain amounts of incentive compensation paid to certain executive officers in connection with certain financial performance information that becomes involved in an accounting restatement, if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirements under any applicable securities laws.

Ethical and Legal Standard

Any failure to adhere to NIC's Code of Conduct and Business Ethics will subject an employee to revocation of any award made but not paid, or potentially payable in the future, or of other compensation as provided by this or any other program to which the employee might otherwise be entitled. In addition, any such infraction will subject the employee to disciplinary action, up to and including termination.

Confidentiality

This program is deemed confidential by the Company except as otherwise required by law.

 

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