Document:

a50960096ex10_2.htm

Exhibit 10.2

 

NIC Incentive Pay Program

Senior Vice President of Business Development

(as amended on October 9, 2014)

 

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 approved the recommendation of the Chief Executive Officer for the compensation program for the Corporate Senior Vice President for Business Development ("SVPBD") beginning in 2013.  The basic structure of the program consists of the following:

 

	 ●	 base salary – in accordance with the Employment Agreement (as defined below),
	 	 
	 ●	 short-term incentive (i.e., annual cash bonus)—explained below,
	 	 
	 ●	 a long-term, equity-based service longevity component that includes annual restricted stock grants---explained below, and
	 	 
	 ●	 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 SVPBD 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.

 

LONG-TERM, EQUITY-BASED SERVICE LONGEVITY COMPONENT

 

The long-term, equity-based service longevity component provides for annual restricted stock grants under the Company's stockholder-approved equity compensation plan 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.  As reflected in the restricted stock award agreement, 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 last day of the applicable performance year to receive payment under this program and must be employed on the applicable vesting date to vest in any restricted stock.  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 Separate Employment Agreement. The SVPBD currently has a written Key Employee Agreement dated Feb. 5, 2013 (the "Employment Agreement"), which was approved by the Compensation Committee and signed by the CEO.  This program is supplemental to that Employment Agreement and does not in itself constitute any type of employment contract, either expressed or implied.  Nothing contained in the program will give the SVPBD rights in addition to those in the Employment Agreement to be retained in the employment of NIC nor is this program intended to affect the right of NIC to terminate SVPBD pursuant to the Employment Agreement.

 

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.

 

Adjustment.  The Compensation Committee maintains sole discretion to adjust incentive payment under this program 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 SVPBD 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 SVPBD.

 

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.a50960096ex10_3.htm

Exhibit 10.3

NIC INC. 2014 AMENDED AND RESTATED

 STOCK COMPENSATION PLAN

 

Restricted Stock Agreement

 

NIC Inc., a Delaware corporation (the "Company"), seeks to provide a means by which the Company, through the grant of the Shares (as defined below) to [executive name] ("Grantee"), may retain the Grantee’s services and motivate the Grantee to exert his or her best efforts on behalf of the Company and any Affiliate;

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties agree as follows:

 

1.             Grant of Restricted Stock. The Company hereby grants to Grantee, as of [date] (the “Grant Date”) [number] shares of the Company’s $0.0001 par value Common Stock (the “Shares”), subject to the restrictions, terms, conditions and other provisions of this Restricted Stock Agreement (the “Agreement”) and of the NIC Inc. 2014 Amended and Restated Stock Compensation Plan (the “Plan”), which restrictions, terms, conditions and other provisions are incorporated herein by this reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Agreement.

 

Following the lapse of all restrictions and the compliance with all terms and conditions set forth in this Agreement and the Plan (subject to any adjustment to the number of Shares as provided in Section 3 hereof), a certificate for the Shares granted pursuant to this Agreement will be issued to Grantee or in lieu of a certificate, the Shares issued to Grantee pursuant to this Agreement may be registered as book entry shares with the Company's transfer agent. Notwithstanding the foregoing, in the event of separation or termination of the Grantee’s employment with the Company for any reason, including as a result of the Grantee’s retirement, death or disability, all unreleased, restricted Shares shall be forfeited upon such separation or termination.

 

2.             Restrictions.

 

(a)           No Shares shall be released from restrictions until the anniversary of the Grant Date specified on Exhibit A  and compliance with any other conditions specified on Exhibit A  of this Agreement, subject to earlier release pursuant to the terms of this Agreement (the “Release Date”).

 

(b)           From the date of this Agreement until the Release Date, Grantee shall not sell, assign, exchange, transfer, pledge, hypothecate or otherwise dispose of or encumber any of the Shares.

 

3.             Terms and Conditions.

 

(a)           Adjustments in Event of Change in Common Stock. If any change is made in the Shares, 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 number of Shares 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 Grantee; provided, however, that no such adjustment shall cause the Company to issue a fractional share. 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.)

 

(b)          Rights as a Stockholder. Subject to the terms of this Agreement, the Grantee shall have all the rights and privileges of a stockholder of the Company while the Shares are subject to stop-transfer instructions, or otherwise held in escrow, including the right to vote and to receive dividends (if any).

 

  

  

  

 

(c)           No Rights to Continued Relationship. The Shares shall not confer upon the Grantee 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 Shares shall not confer upon the Grantee 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 stockholders to remove him or her as a director at any time.

 

The Shares shall not confer upon the Grantee 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.

 

(d)           Compliance with Other Laws and Regulations. This Agreement 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 either be exempt from or 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 Grantee).

 

(e)            Withholding Taxes. The Grantee 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 lapse of restrictions on the Shares. No certificates representing Shares will be delivered until the Grantee has made acceptable arrangements for these withholding requirements. Unless denied by the Committee, the Grantee 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 Grantee. 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 Grantee 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 Grantee is an officer or director of the Company within the meaning of Section 16 of the Securities Exchange Act of 1934 (“Section 16”), the Grantee 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.

 

4.             Investment Representation. The Company may require that the Grantee furnish to the Company, as a condition of acquiring stock hereunder, (a) written assurances satisfactory to the Company, or counsel for the Company, as to the Grantee’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 acquiring the Shares; and (b) written assurances satisfactory to the Company, or counsel for the Company, stating that the Grantee is acquiring the stock for the Grantee’s own account and not with any present intention of selling or otherwise distributing the stock. The Company may (a) restrict the transferability of the stock 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 or as appropriate to comply with any applicable state or federal securities laws, rules or regulations; and (b) condition the issuance and delivery of stock 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 has been registered under a then currently effective registration statement under the Securities Act, or (b) as to any 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 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.

 

 

  

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5.             Grantee Bound by the Plan. The Grantee 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 this Agreement, and the Plan are inserted for convenience and shall not be deemed a part of the Agreement for construction or interpretation.

 

6.             Governing Law. This Agreement and the Plan shall be construed in accordance with the laws of the State of Delaware, without regard to the conflict of laws principles.

 

7.             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 Compensation Committee Chairman at 25501 West Valley Parkway, Suite 300, Olathe, Kansas 66061, with a copy to its General Counsel at the same address.  Any notice that is required to be made to the Grantee under the terms of the Agreement or under the terms of the Plan shall be addressed to him or her at the address indicated below:

 

 

 

unless the Grantee notifies the Company of his or her address change in writing as provided in this Section 7 in which case the notice shall be addressed to the Grantee at his or her new address. A notice under this Section 7 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 7.

 

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