o
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Preliminary Proxy Statement
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o
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Confidential, for Use of the Commission Only (as Permitted by Rule 14a-6(e)(2))
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Definitive Additional Materials
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Soliciting Material under § 240.14a-12
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x
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No fee required.
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o
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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o
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Fee paid previously with preliminary materials.
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o
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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1.
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Elect the Company's nominees as directors;
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2.
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Consider and cast an advisory vote upon the compensation of the Company's named executive officers as disclosed in these materials;
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3.
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Consider and cast an advisory vote upon whether the advisory vote upon the compensation of the Company's named executive officers should be held every one, two or three years;
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4.
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Consider and vote upon the ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the year ending December 31, 2011; and
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5.
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Transact such other business as may properly come before the Annual Meeting or any adjournments or postponements of the Annual Meeting.
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VOTING PROCEDURES AND RELATED MATTERS
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1
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STRUCTURE AND PRACTICES OF THE BOARD OF DIRECTORS
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5
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DIRECTOR COMPENSATION
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10
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REPORT OF THE AUDIT COMMITTEE
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13
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ELECTION OF DIRECTORS (ITEM 1 ON PROXY CARD)
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14
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EXECUTIVE COMPENSATION
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16
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REPORT OF THE COMPENSATION COMMITTEE
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16
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COMPENSATION DISCUSSION AND ANALYSIS
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16
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COMPENSATION TABLES
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27
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SUMMARY COMPENSATION TABLE (1)
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27
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GRANTS OF PLAN-BASED AWARDS IN FISCAL 2010
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31
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OUTSTANDING EQUITY AWARDS AT 2010 FISCAL YEAR-END
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32
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OPTION EXERCISES AND STOCK VESTED IN FISCAL 2010
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34
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EXECUTIVE OFFICERS
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35
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EMPLOYMENT AGREEMENTS AND SEVERANCE PAYMENTS
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36
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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39
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ADVISORY VOTE ON EXECUTIVE COMPENSATION (ITEM 2 ON PROXY CARD)
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40
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ADVISORY VOTE ON FREQUENCY OF AN ADVISORY VOTE ON EXECUTIVE COMPENSATION (ITEM 3 ON PROXY CARD)
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41
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RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (ITEM 4 ON PROXY CARD)
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42
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SUBMISSION OF STOCKHOLDER PROPOSALS
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43
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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43
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
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43
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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44
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OTHER BUSINESS
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45
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2.
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FOR the compensation paid to the Company's named executive officers, as disclosed in these materials;
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3.
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In favor of holding an advisory vote on the compensation of the Company's named executive officers every "3 YEARS"; and
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4.
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FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the year ending December 31, 2011.
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·
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delivering a written notice to the NIC Corporate Secretary bearing a date later than the date on your proxy stating that you would like to revoke your proxy;
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·
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completing, executing and delivering a new, later dated proxy card for the same shares prior to the deadline specified on the proxy card and following the instructions on the proxy card;
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·
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logging onto the Internet website specified on your proxy card in the same manner you would do to submit your proxy electronically or by calling the telephone number specified on your proxy card (in each case if you are eligible to do so) prior to the deadline specified on the proxy card and following the instructions on the proxy card; or
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·
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attending the Annual Meeting and voting in person. Your attendance alone will not revoke your proxy.
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Audit
Committee
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Compensation
Committee
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Corporate Governance and
Nominating Committee
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||
Art N. Burtscher, Chairman
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Alexander C. Kemper, Chairman
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William M. Lyons, Chairman
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Daniel J. Evans
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Art N. Burtscher
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Art N. Burtscher
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Alexander C. Kemper
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Daniel J. Evans
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Daniel J. Evans
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William M. Lyons
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William M. Lyons
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Alexander C. Kemper
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Pete Wilson
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Pete Wilson
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Pete Wilson
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Bankrate (RATE)
|
Online Resources (ORCC)
|
CyberSource (CYBS)
|
Perficient (PRFT)
|
ePlus (PLUS.PK)
|
S1 (SONE)
|
Goldleaf Financial Solutions (GFSI)
|
SupportSoft (SPRT)
|
Imergent (IIG)
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Tier Technologies (TIER)
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Keynote Systems (KEYN)
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Vocus (VOCS)
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Omniture (OMTR)
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WebMD Health (WBMD)
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Director Compensation in Fiscal 2010 (1)
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||||||||||||||||
Name
(a)
|
Fees Earned or Paid in Cash ($)
(b)
|
Stock Awards ($)(2)
(c)
|
All Other Compensation ($)
(g)
|
Total ($)
(h)
|
||||||||||||
Art N. Burtscher (3)
|
43,000 | 60,000 | 11,307 | 114,307 | ||||||||||||
Daniel J. Evans (4)
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38,000 | 60,000 | 11,307 | 109,307 | ||||||||||||
Ross C. Hartley (5)
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28,000 | 60,000 | 12,771 | 100,771 | ||||||||||||
Alexander C. Kemper (6)
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40,500 | 60,000 | 11,777 | 112,277 | ||||||||||||
William M. Lyons (7)
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40,500 | 60,000 | 3,519 | 104,019 | ||||||||||||
Pete Wilson (8)
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38,000 | 60,000 | 11,307 | 109,307 |
(1)
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The Option Awards, Non-Equity Incentive Plan Compensation and Change in Pension Value and Nonqualified Deferred Compensation Earnings columns have been omitted from the Director Compensation table because the Company does not provide director compensation in any of these categories.
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(2)
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Amounts reported in the Stock Awards column represent the aggregate grant date fair value of such awards, computed in accordance with FASB ASC Topic 718. However, these amounts do not include an estimate of forfeitures related to time-based vesting conditions, and assume that the non-employee director will perform the requisite service to vest in the award. For assumptions used in determining these values, refer to Note 11 of the Company's financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission. The grant date fair value does not reflect dividends payable on unvested shares of restricted stock. The value of dividends paid on unvested shares of restricted stock, is reported in the All Other Compensation column and not in the Stock Awards column.
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(3)
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All Other Compensation for Mr. Burtscher consists of a cash dividend equivalent of $0.30 per share on 19,520 unvested shares of restricted stock paid by the Company in February 2010 and a cash dividend equivalent of $0.25 per share on 21,802 unvested shares of restricted stock paid by the Company in December 2010.
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(i)
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2,000 unvested service-based restricted shares, which vest in two equal annual installments beginning on February 4, 2011;
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(ii)
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4,033 unvested service-based restricted shares, which vest in two equal annual installments beginning on May 6, 2011;
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(iii)
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7,854 unvested service-based restricted shares, which vest in three equal annual installments beginning on May 5, 2011; and
|
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(iv)
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7,915 unvested service-based restricted shares, which vest in four equal annual installments beginning on May 4, 2011.
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(4)
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All Other Compensation for Governor Evans consists of a cash dividend equivalent of $0.30 per share on 19,520 unvested shares of restricted stock paid by the Company in February 2010 and a cash dividend equivalent of $0.25 per share on 21,802 unvested shares of restricted stock paid by the Company in December 2010.
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(i)
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2,000 unvested service-based restricted shares, which vest in two equal annual installments beginning on February 4, 2011;
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(ii)
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4,033 unvested service-based restricted shares, which vest in two equal annual installments beginning on May 6, 2011;
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(iii)
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7,854 unvested service-based restricted shares, which vest in three equal annual installments beginning on May 5, 2011; and
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(iv)
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7,915 unvested service-based restricted shares, which vest in four equal annual installments beginning on May 4, 2011.
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(5)
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All Other Compensation for Mr. Hartley consists of a cash dividend equivalent of $0.30 per share on 19,520 unvested shares of restricted stock paid by the Company in February 2010, a cash dividend equivalent of $0.25 per share on 21,802 unvested shares of restricted stock paid by the Company in December 2010 and health and dental insurance premiums paid by the Company totaling $1,464. In February 2010, Mr. Hartley elected to participate in a COBRA Plan for up to 18 months, under our self-insured health plan that an insurance provider administers
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(i)
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2,000 unvested service-based restricted shares, which vest in two equal annual installments beginning on February 4, 2011;
|
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(ii)
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4,033 unvested service-based restricted shares, which vest in two equal annual installments beginning on May 6, 2011;
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(iii)
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7,854 unvested service-based restricted shares, which vest in three equal annual installments beginning on May 5, 2011; and
|
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(iv)
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7,915 unvested service-based restricted shares, which vest in four equal annual installments beginning on May 4, 2011.
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(6)
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All Other Compensation for Mr. Kemper consists of a cash dividend equivalent of $0.30 per share on 20,334 unvested shares of restricted stock paid by the Company in February 2010 and a cash dividend equivalent of $0.25 per share on 22,709 unvested shares of restricted stock paid by the Company in December 2010.
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(ii)
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2,000 unvested service-based restricted shares, which vest in two equal annual installments beginning on February 4, 2011;
|
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(iii)
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4,033 unvested service-based restricted shares, which vest in two equal annual installments beginning on May 6, 2011;
|
|
(iv)
|
7,854 unvested service-based restricted shares, which vest in three equal annual installments beginning on May 5, 2011; and
|
|
(v)
|
7,915 unvested service-based restricted shares, which vest in four equal annual installments beginning May 4, 2011.
|
(7)
|
All Other Compensation for Mr. Lyons consists of a cash dividend equivalent of $0.30 per share on 3,160 unvested shares of restricted stock paid by the Company in February 2010 and a cash dividend equivalent of $0.25 per share on 10,285 unvested shares of restricted stock paid by the Company in December 2010.
|
|
(i)
|
2,370 unvested service-based restricted shares, which vest in three equal annual installments beginning August 6, 2011; and
|
|
(ii)
|
7,915 unvested service-based restricted shares, which vest in four equal annual installments beginning on May 4, 2011.
|
(8)
|
All Other Compensation for Governor Wilson consists of a cash dividend equivalent of $0.30 per share on 19,520 unvested shares of restricted stock paid by the Company in February 2010 and a cash dividend equivalent of $0.25 per share on 21,802 unvested shares of restricted stock paid by the Company in December 2010.
|
|
(i)
|
2,000 unvested service-based restricted shares, which vest in two equal annual installments beginning on February 4, 2011;
|
|
(ii)
|
4,033 unvested service-based restricted shares, which vest in two equal annual installments beginning on May 6, 2011;
|
|
(iii)
|
7,854 unvested service-based restricted shares, which vest in three equal annual installments beginning on May 5, 2011; and
|
|
(iv)
|
7,915 unvested service-based restricted shares, which vest in four equal annual installments beginning on May 4, 2011.
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Name
|
Age
|
Position
|
||
Harry H. Herington
|
51
|
Chairman of the Board and Chief Executive Officer
|
||
Art N. Burtscher
|
60
|
Lead Independent Director
|
||
Daniel J. Evans
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85
|
Director
|
||
Ross C. Hartley
|
63
|
Director
|
||
Alexander C. Kemper
|
45
|
Director
|
||
William M. Lyons
|
55
|
Director
|
||
Pete Wilson
|
77
|
Director
|
Name
|
Title
|
|
Harry H. Herington
|
Chairman of the Board and Chief Executive Officer
|
|
Stephen M. Kovzan
|
Chief Financial Officer
|
|
William F. Bradley, Jr.
|
Chief Operating Officer and General Counsel
|
|
Robert W. Knapp
|
Executive Vice President
|
|
·
|
review the Company's executive compensation program and provide critical feedback;
|
|
·
|
assess executive pay within the context of peer group comparisons; and
|
|
·
|
provide management with the necessary information and design alternatives to develop short- and long-term incentive plans.
|
|
·
|
While individual executives may be above or below targeted pay positioning for each pay component, aggregate positioning in comparison to market should be the primary focus;
|
|
·
|
Similarly, while each pay component was compared to market, management's primary focus was on the total value of the compensation programs for each executive relative to market; and
|
|
·
|
Finally, Mercer compiled pay data for the five highest-paid executives among identified peer companies (see list of companies below). This data was then aggregated for each peer company to arrive at a "cost of management" figure. These aggregate data were used to understand the relative positioning of the Company's executive pay levels.
|
Bankrate (RATE)
|
Online Resources (ORCC)
|
CyberSource (CYBS)
|
Perficient (PRFT)
|
ePlus (PLUS.PK)
|
S1 (SONE)
|
Goldleaf Financial Solutions (GFSI)
|
SupportSoft (SPRT)
|
Imergent (IIG)
|
Tier Technologies (TIER)
|
Keynote Systems (KEYN)
|
Vocus (VOCS)
|
Omniture (OMTR)
|
WebMD Health (WBMD)
|
|
·
|
Operating income - 50% weighting
|
|
·
|
Total revenues - 25% weighting
|
|
·
|
Cash flow return on invested capital (“CFROIC”) - 25% weighting
|
Performance Levels | ||||||
Performance Criteria
|
Threshold
|
Target
|
Maximum
|
|||
Operating income
|
90% of budget
|
Budget
|
110% of budget
|
|||
Total revenue
|
95% of budget
|
Budget
|
105% of budget
|
|||
Cash flow return on invested capital (excluding income taxes)
|
40%
|
45%
|
50%
|
Year ended December 31, 2010 | ||||||||||||
Performance Criteria
|
Actual
|
Target
|
% of Target
|
|||||||||
Operating income
|
$ | 29,398,114 | $ | 29,698,040 | 99% | |||||||
Total revenue
|
$ | 161,533,859 | $ | 167,481,903 | 96% | |||||||
Cash flow return on invested capital (excluding income taxes)
|
55% | 45% | 122% |
Name
|
2010 Annual Cash Incentive Payout
|
|
Harry H. Herington
|
$197,846
|
|
Stephen M. Kovzan
|
$135,368
|
|
William F. Bradley, Jr.
|
$135,368
|
|
Robert W. Knapp
|
$135,368
|
Name
|
Service-Based Restricted Shares
|
|
Harry H. Herington
|
28,158 shares
|
|
Stephen M. Kovzan
|
16,055 shares
|
|
William F. Bradley, Jr.
|
16,055 shares
|
|
Robert W. Knapp
|
16,055 shares
|
|
·
|
Operating income growth (three-year compound annual growth rate, or CAGR) - 25% weighting
|
|
·
|
Total revenue growth (three-year CAGR) - 25% weighting
|
|
·
|
Cash flow return on invested capital (excluding income taxes) (three-year average) - 50% weighting
|
Performance Levels
|
||||||
Performance Criteria
|
Threshold
|
Target
|
Maximum
|
|||
Operating income growth (three-year CAGR)
|
15%
|
20%
|
25%
|
|||
Total revenue growth (three-year CAGR)
|
15%
|
20%
|
25%
|
|||
Cash flow return on invested capital (excluding income taxes) (three-year average)
|
45%
|
50%
|
55%
|
Name
|
Performance-Based Restricted Shares Granted (1)
|
||
Harry H. Herington
|
53,970 shares
|
||
Stephen M. Kovzan
|
24,083 shares
|
||
William F. Bradley, Jr.
|
24,083 shares
|
||
Robert W. Knapp
|
24,083 shares
|
||
(1)
|
Represents the maximum number of performance-based restricted shares able to be earned by the NEO at the end of the three-year performance period ending December 31, 2012 pursuant to the terms of the long-term incentive plan. The actual number of shares earned will be based on the Company's performance as indicated above over the three-year period ending December 31, 2011. No shares will be vested if threshold performance is not achieved, and no additional shares will be vested for performance in excess of the superior level.
|
Performance Levels
|
Three-Year Actual Results
|
|||||||
Performance Criteria
|
Threshold
|
Target
|
Superior
|
Actual
|
% of Target
|
|||
Operating income (three-year CAGR)
|
15%
|
20%
|
25%
|
22.2%
|
111%
|
|||
Total revenue (three-year CAGR)
|
15%
|
20%
|
25%
|
23.5%
|
118%
|
|||
Cash flow return on invested capital (three-year average)
|
15%
|
20%
|
25%
|
41.5%
|
207%
|
Name
|
Restricted Shares Vested
|
Dividend Shares Earned
|
Total Shares
|
|||
Harry H. Herington
|
66,834
|
8,408
|
75,242
|
|||
Stephen M. Kovzan
|
30,870
|
3,883
|
34,753
|
|||
William F. Bradley, Jr.
|
30,870
|
3,883
|
34,753
|
|
·
|
Review and update the peer group, if necessary, used to benchmark executive and non-employee director compensation levels and practices;
|
|
·
|
Perform a comparative assessment of compensation for NIC’s executives and non-employee directors against the peer group and broader market;
|
|
·
|
Review existing executive change-in-control provisions included in employment agreements and equity-based incentive agreements and provide perspective as to their reasonableness and appropriateness in a broader market context; and
|
|
·
|
Provide input on the Company’s considerations related to the potential near-term introduction of stock ownership requirements for executives and non-employee directors.
|
Blackbaud Inc. (BLKB)
|
Move Inc. (MOVE)
|
Blackboard Inc. (BBBB)
|
Online Resources Corp. (ORCC)
|
DealerTrack Holdings Inc. (TRAK)
|
Perficient Inc. (PRFT)
|
Dice Holdings Inc. (DHX)
|
S1 Corp. (SONE)
|
EPIQ Systems Inc.(EPIQ)
|
Tier Technologies Inc. (TIER)
|
Internet Brands Inc. (INET)
|
Tyler Technologies Inc. (TYL)
|
Knot Inc. (KNOT)
|
Vocus Inc. (VOCS)
|
LoopNet Inc. (LOOP)
|
|
·
|
Base salaries were between the 25th and 50th market percentiles;
|
|
·
|
Target total annual cash (i.e., base salaries and annual cash incentive) is generally at or below 25th market percentiles;
|
|
·
|
Total annual compensation, inclusive of long-term, equity based incentives, is at or below 25th market percentiles; and
|
|
·
|
The “gap to market” is most significant for NIC’s Chief Executive Officer.
|
|
·
|
Non-employee directors: four (4) times annual cash retainer
|
|
·
|
Chief Executive Officer: six (6) times annual base salary
|
|
·
|
All other NEOs: three (3) times annual base salary
|
SUMMARY COMPENSATION TABLE (1)
|
|||||||||||||||
Name and
Principal Position
|
Year
|
Salary ($)
|
Bonus ($)(2)
|
Stock Awards ($)(3)
|
Non-Equity Incentive Plan Compensation ($)(4)
|
All Other Compensation (Including Perquisites) ($)(5)
|
Total ($)
|
||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(f)
|
(g)
|
(i)
|
|||||||||
Harry H. Herington (6)
|
2010
|
390,450
|
-
|
387,779
|
197,846
|
193,981
|
1,170,056
|
||||||||
Chairman of the Board and
|
2009
|
380,000
|
50,000
|
477,149
|
231,727
|
107,429
|
1,246,305
|
||||||||
Chief Executive Officer
|
2008
|
374,583
|
-
|
631,313
|
169,100
|
39,621
|
1,214,617
|
||||||||
Stephen M. Kovzan (7)
|
2010
|
267,150
|
-
|
209,952
|
135,368
|
103,230
|
715,700
|
||||||||
Chief Financial Officer
|
2009
|
260,000
|
50,000
|
244,978
|
158,550
|
58,438
|
771,966
|
||||||||
2008
|
259,167
|
-
|
737,564
|
115,700
|
25,733
|
1,138,164
|
|||||||||
William F. Bradley, Jr. (8)
|
2010
|
267,150
|
-
|
209,952
|
135,368
|
88,221
|
700,691
|
||||||||
Chief Operating Officer,
|
2009
|
260,000
|
50,000
|
244,978
|
158,550
|
53,743
|
767,271
|
||||||||
General Counsel and
|
2008
|
259,167
|
-
|
305,564
|
115,700
|
12,876
|
693,307
|
||||||||
Secretary
|
|||||||||||||||
Robert W. Knapp (9)
|
2010
|
267,150
|
100,000
|
209,952
|
135,368
|
69,006
|
781,476
|
||||||||
Executive Vice President
|
2009
|
259,792
|
50,000
|
244,978
|
158,550
|
37,076
|
750,396
|
||||||||
(1)
|
The "Option Awards" and "Change in Pension Value and Non-qualified Deferred Compensation Earnings" columns have been omitted from the Summary Compensation Table because the Company did not grant any stock option awards to the named executive officers in the years presented and does not provide a pension program.
|
(2)
|
Amounts for 2009 consist of discretionary bonuses awarded by the Compensation Committee to all named executive officers for the successful acquisition of certain eGovernment contracts in the state of Texas in May 2009. Amount for 2010 consists of a sales commission awarded by the Compensation Committee and earned by Mr. Knapp prior to his appointment as a NEO for the successful award to the Company of a new seven-year contract with the state of Texas, commencing on January 1, 2010, to manage the state’s official government portal.
|
(3)
|
Amounts reported in the Stock Awards column represent the aggregate grant date fair value of such awards, computed in accordance with FASB ASC Topic 718. Amounts for 2008 have been recomputed using the same methodology in accordance with Securities and Exchange Commission rules. Pursuant to Securities and Exchange Commission rules, the amounts shown reflect the probable outcome of performance conditions that affect the vesting of awards granted to the named executive officers. However, these amounts do not include an estimate of forfeitures related to time-based vesting conditions, and assume that the named executive officer will perform the requisite service to vest in the award. For assumptions used in determining these values, refer to Note 11 of the Company's financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission. For additional information regarding stock awards for the named executive officers, refer to the "Grants of Plan-Based Awards in Last Fiscal Year" and "Outstanding Equity Awards at Fiscal Year End" tables included in this Proxy Statement beginning on page 31. The grant date fair value does not reflect dividends payable on unvested shares of service-based or performance-based restricted stock. The value of dividends paid on such restricted stock is reported in the All Other Compensation column and not in the Stock Awards column.
|
(4)
|
For 2010, amount consists of compensation earned in 2010, based on the Company's fiscal 2010 financial performance, but paid in 2011 under the Company's annual cash incentive plan. Compensation earned equaled approximately 51% of the named executive officer's base salary as of May 2010. For 2009, amount consists of compensation earned in 2009, based on the Company's fiscal 2009 financial performance, but paid in 2010 under the Company's annual cash incentive plan. Compensation earned equaled 61% of the named executive officer's base salary as of May 2009. For 2008, amount consists of compensation earned in 2008, based on the Company's fiscal 2008 financial performance, but paid in 2009 under the Company's annual cash incentive plan. Compensation earned equaled 45% of the named executive officer's base salary as of May 2008. For additional information regarding the Company's annual cash incentive plan, refer to the Compensation Discussion and Analysis section of this Proxy Statement beginning on page 16.
|
(5)
|
All Other Compensation includes (i) the dollar amount of cash dividends declared during the four-year service period on unvested shares subject to a service-based restricted stock award during each year and (ii) the dollar amount of any cash dividend declared on shares subject to each outstanding performance-based restricted stock award during each year, based upon the maximum number of shares which may become vested under the performance-based restricted stock award. Under each award agreement relating to the performance-based restricted stock awards, the actual dividend is payable to the named executive officer in the form of shares of Company common stock at the end of the three-year performance period for each award, but only to the extent the underlying shares have vested. At the end of the three-year performance period and on the date some or all of the shares are vested under the award, a pro rata number of notional dividend shares will be converted into an equivalent number of dividend shares earned and shall be paid to the named executive officers based upon the actual number of underlying shares vested during the performance period. No dividends or dividend equivalents are paid on any performance-based restricted stock awards during the three-year performance period. The dollar amount of the dividends declared on service-based and performance-based restricted stock awards (based upon the assumed maximum vesting) for each named executive officer is described in Notes 6 through 9 below. The amounts shown do not reflect any forfeitures at the end of the respective performance period of dividends previously declared on shares of performance-based restricted stock (and disclosed in the table).
|
(6)
|
In February 2010, the Compensation Committee increased Mr. Herington’s base salary by approximately 3%, from $380,000 to $391,400, as an approximate cost-of-living adjustment.
In February 2008, the Compensation Committee increased Mr. Herington's base salary from $315,000 to $380,000 in conjunction with his appointment to Chief Executive Officer.
|
|
•
|
Cash dividend equivalent of $0.30 per share on 100,606 unvested shares of service-based restricted stock paid by the Company in February 2010 – $30,182;
|
|
•
|
Cash dividend equivalent of $0.25 per share on 80,590 unvested shares of service-based restricted stock paid by the Company in December 2010 – $20,148;
|
|
•
|
Dividend equivalent of $0.30 per share on the maximum number of shares which may be vested under the performance-based restricted stock awards granted in 2008, 2009 and 2010 (see Note 5 above) – $62,313 (based upon the cash dividend declared in February 2010);
|
|
•
|
Dividend equivalent of $0.25 per share on the maximum number of shares which may be vested under the performance-based restricted stock awards granted in 2008, 2009 and 2010 (See Note 5 above) – $51,928 (based upon the cash dividend declared in December 2010);
|
|
•
|
Leased vehicle and associated maintenance and fuel paid by the Company – $20,200;
|
|
•
|
Company 401(k) matching funds earned in 2010 – $8,250; and
|
The maximum grant date fair value of performance-based restricted stock awarded to Mr. Herington (which did not include dividends which may be paid on such restricted stock) was $450,110 in 2010 and $437,100 in both 2009 and 2008 assuming the highest level of performance conditions was achieved, while the amounts reported in the Stock Awards column reflect the probable outcome of performance conditions. For additional information regarding Mr. Herington's compensation, refer to the discussion under the Compensation Discussion and Analysis section of this Proxy Statement beginning on page 16.
|
|
(7)
|
In February 2010, the Compensation Committee increased Mr. Kovzan’s base salary by approximately 3%, from $260,000 to $267,800, as an approximate cost-of-living adjustment.
In February 2008, the Compensation Committee increased Mr. Kovzan's base salary from $250,000 to $260,000 and awarded Mr. Kovzan a grant of restricted stock totaling 60,000 shares in connection with his promotion to Chief Financial Officer in August 2007. The Board inadvertently failed to approve a restricted stock grant to Mr. Kovzan at the time of his promotion, as the Company was undergoing an external competitive assessment of the Company's executive compensation program during 2007. The closing market price of the Company's Common Stock on the February 4, 2008 grant date was $7.20. The grant vests in four equal annual installments beginning on February 4, 2009.
|
|
•
|
Cash dividend equivalent of $0.30 per share on 84,334 unvested shares of service-based restricted stock paid by the Company in February 2010 – $25,300;
|
|
•
|
Cash dividend equivalent of $0.25 per share on 74,811 unvested shares of service-based restricted stock paid by the Company in December 2010 –$18,703; and
|
|
•
|
Dividend equivalent of $0.30 per share on the maximum number of shares which may be vested under the performance-based restricted stock awards granted in 2008, 2009 and 2010 (see Note 5 above) – $27,806 (based upon the cash dividend declared in February 2010);
|
|
•
|
Dividend equivalent of $0.25 per share on the maximum number of shares which may be vested under the performance-based restricted stock awards granted in 2008, 2009 and 2010 (See Note 5 above) – $23,171 (based upon the cash dividend declared in December 2010);
|
The maximum grant date fair value of performance-based restricted stock awarded to Mr. Kovzan (which did not include dividends which may be paid on such restricted stock) was $200,850 in 2010 and $195,000 in both 2009 and 2008 assuming the highest level of performance conditions was achieved, while the amounts reported in the Stock Awards column reflect the probable outcome of performance conditions. For additional information regarding Mr. Kovzan's compensation, refer to the discussion under the Compensation Discussion and Analysis section of this Proxy Statement beginning on page 16.
|
(8)
|
In February 2010, the Compensation Committee increased Mr. Bradley’s base salary by approximately 3%, from $260,000 to $267,800, as an approximate cost-of-living adjustment.
In February 2008, the Compensation Committee increased Mr. Bradley's base salary from $250,000 to $260,000.
|
|
•
|
Cash dividend equivalent of $0.30 per share on 56,104 unvested shares of service-based restricted stock paid by the Company in February 2010 – $16,831;
|
|
•
|
Cash dividend equivalent of $0.25 per share on 44,811 unvested shares of service-based restricted stock paid by the Company in December 2010 – $11,203;
|
|
•
|
Dividend equivalent of $0.30 per share on the maximum number of shares which may be vested under the performance-based restricted stock awards granted in 2008, 2009 and 2010 (see Note 5 above) – $27,806 (based upon the cash dividend declared in February 2010);
|
|
•
|
Dividend equivalent of $0.25 per share on the maximum number of shares which may be vested under the performance-based restricted stock awards granted in 2008, 2009 and 2010 (See Note 5 above) – $23,171 (based upon the cash dividend declared in December 2010);
|
|
•
|
Company 401(k) matching funds earned in 2010 – $8,250; and
|
The maximum grant date fair value of performance-based restricted stock awarded to Mr. Bradley (which did not include dividends which may be paid on such restricted stock) was $200,850 in 2010 and $195,000 in both 2009 and 2008 assuming the highest level of performance conditions was achieved, while the amounts reported in the Stock Awards column reflect the probable outcome of performance conditions. For additional information regarding Mr. Bradley's compensation, refer to the discussion under the Compensation Discussion and Analysis section of this Proxy Statement on page 16.
|
(9)
|
In February 2010, the Compensation Committee increased Mr. Knapp’s base salary by approximately 3%, from $260,000 to $267,800, as an approximate cost-of-living adjustment.
On February 3, 2009, the Board of Directors of the Company appointed Mr. Knapp to the position of Executive Vice President, with an annual base salary of $260,000. Mr. Knapp had previously served as the Company's Vice President of Portal Operations.
|
|
•
|
Cash dividend equivalent of $0.30 per share on 54,871 unvested shares of service-based restricted stock paid by the Company in February 2010 – $16,461;
|
|
•
|
Cash dividend equivalent of $0.25 per share on 42,641 unvested shares of service-based restricted stock paid by the Company in December 2010 – $10,660;
|
|
•
|
Dividend equivalent of $0.30 per share on the maximum number of shares which may be vested under the performance-based restricted stock awards granted in 2008, 2009 and 2010 (see Note 5 above) – $17,823 (based upon the cash dividend declared in February 2010);
|
|
•
|
Dividend equivalent of $0.25 per share on the maximum number of shares which may be vested under the performance-based restricted stock awards granted in 2008, 2009 and 2010 (See Note 5 above) – $14,852 (based upon the cash dividend declared in December 2010);
|
|
•
|
Company 401(k) matching funds earned in 2010 – $8,250; and
|
The maximum grant date fair value of performance-based restricted stock awarded to Mr. Knapp (which did not include dividends which may be paid on such restricted stock) was $200,850 in 2010 and $195,000 in 2009 assuming the highest level of performance conditions was achieved, while the amount reported in the Stock Awards column reflects the probable outcome of performance conditions. For additional information regarding Mr. Knapp's compensation, refer to the discussion under the Compensation Discussion and Analysis section of this Proxy Statement beginning on page 16.
|
Name
|
Grant Date
|
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
All Other Stock Awards: Number of Shares of Stock or Units
(#)(3)
|
Grant Date Fair Value of Stock and Option Awards
($)(4)
|
|||||
Threshold
($)(1)
|
Target
($)(1)
|
Maximum
($)(1)
|
Threshold
(#)(2)
|
Target
(#)(2)
|
Maximum
(#)(2)
|
|||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(l)
|
|
Harry H. Herington
|
2-1-10
|
97,850
|
195,700
|
293,550
|
-
|
-
|
-
|
-
|
-
|
|
2-1-10
|
-
|
-
|
-
|
14,079
|
28,158
|
53,970
|
-
|
-
|
||
2-1-10
|
-
|
-
|
-
|
-
|
-
|
-
|
28,158
|
234,840
|
||
Stephen M. Kovzan
|
2-1-10
|
66,950
|
133,900
|
200,850
|
-
|
-
|
-
|
-
|
-
|
|
2-1-10
|
-
|
-
|
-
|
8,028
|
16,055
|
24,083
|
-
|
-
|
||
2-1-10
|
-
|
-
|
-
|
-
|
-
|
-
|
16,055
|
133,900
|
||
William F. Bradley, Jr.
|
2-1-10
|
66,950
|
133,900
|
200,850
|
-
|
-
|
-
|
-
|
-
|
|
2-1-10
|
-
|
-
|
-
|
8,028
|
16,055
|
24,083
|
-
|
-
|
||
2-1-10
|
-
|
-
|
-
|
-
|
-
|
-
|
16,055
|
133,900
|
||
Robert W. Knapp
|
2-1-10
|
66,950
|
133,900
|
200,850
|
-
|
-
|
-
|
-
|
-
|
|
2-1-10
|
-
|
-
|
-
|
8,028
|
16,055
|
24,083
|
-
|
-
|
||
2-1-10
|
-
|
-
|
-
|
-
|
-
|
-
|
16,055
|
133,900
|
(1)
|
Represents a grant pursuant to the Company's 2010 annual cash incentive plan that will be paid out to each named executive officer if certain Company financial performance criteria are satisfied. The Compensation Committee determined a "target" performance level for the Company for each of three performance criteria (operating income, total revenue and cash flow return on invested capital). Performance of the Company at the target level will result in an annual cash incentive that is 50% of the named executive officer's base salary. The Committee also determined a range of possible cash incentives above and below target performance, ranging from 25% of base salary for achieving "threshold" performance to 75% of base salary for achieving "superior" performance. For amounts between the threshold and target levels or between the target and superior levels, straight line interpolation will be used. No payments are awarded under the plan if threshold performance is not achieved, and no additional payments are awarded for performance in excess of the superior level. Annual incentive payments equaling approximately 51% of base salary will be paid to Messrs. Herington, Kovzan, Bradley and Knapp in early 2011 based on the Company's actual 2010 financial performance in relation to the performance criteria and performance levels included in the annual cash incentive plan for 2010. Under the plan, the Committee retains sole discretion to reduce or eliminate an executive's bonus to reflect either (i) the executive's performance or (ii) unanticipated factors. For additional information regarding the Company's 2010 annual cash incentive plan, refer to the Compensation Discussion and Analysis section of this Proxy Statement beginning on page 16.
|
(2)
|
Represents a grant of performance-based restricted stock on February 1, 2010 pursuant to the Company's 2010 long-term equity incentive plan that will vest in whole or in part on February 1, 2013 if certain Company financial performance criteria are satisfied. The plan provides for annual grants of restricted stock tied to three-year performance periods. A new three-year period is intended to begin each year. At the end of each three-year period, executives receive a number of shares per a pre-defined schedule of threshold, target and superior Company performance. The three-year performance period for this grant is the three-year period ending December 31, 2012. Each level of performance is associated with a pre-defined payout, expressed as a percentage of base salary. The amount of restricted stock to be awarded at the end of each three-year performance period to the Chief Executive Officer for Company performance at the target levels is 60% of the executive's base salary, and the amount to be awarded to the other named executive officers for Company performance at target levels is 50% of each executive's annual base salary. The plan incorporates a range of possible equity incentives above and below target performance. For the Chief Executive Officer, this range is from 30% of base salary for achieving threshold performance to 115% of base salary for achieving superior performance. For the other named executive officers, this range is from 25% of base salary for achieving threshold performance to 75% of base salary for achieving superior performance. For each performance measure, no shares are awarded if threshold performance is not achieved, and no additional shares are awarded for performance in excess of the superior level. For amounts between the threshold and target levels or between the target and superior levels, straight line interpolation, rounded up to the next whole share, will be used to determine the portion of the award that becomes vested. The named executive officers have the opportunity to receive dividend equivalents for any cash dividend declared during the three-year performance period on shares subject to a performance-based restricted stock award, which dividend equivalents are payable in the form of shares of Company common stock, based upon the pro rata number of shares earned and vested under each performance-based restricted stock award. Such cash dividend amount shall be divided by the fair value of the Company’s common stock on the dividend payment date to determine the maximum number of notional shares to be awarded. At the end of the three-year performance period and on the date some or all of the shares are paid under the agreement, a pro rata number of notional dividend shares will be converted into an equivalent number of dividend shares and paid to the executive officers based upon the actual number of underlying shares vested during the performance period. No dividend equivalents are paid on any performance-based restricted stock awards during the three-year performance period. Such dividend shares are not included in the calculation of the estimated future payouts under equity incentive plan awards. For additional information regarding the Company's 2010 long-term, equity-based incentive plan, refer to the Compensation Discussion and Analysis section of this Proxy Statement beginning on page16.
|
(3)
|
Represents a grant of service-based restricted stock on February 1, 2010 to each named executive officer pursuant to the Company's 2010 long-term, equity-based incentive plan. The amount of restricted stock awarded to the Chief Executive Officer was 60% of the executive's base salary, and the amount of restricted stock awarded to the other named executive officers was 50% of each executive's base salary. The number of shares granted was based upon the closing market price of the Company's Common Stock on February 1, 2010 of $8.34 per share. The grant vests in four equal annual installments beginning on February 1, 2011. For additional information regarding the Company's long-term, equity-based incentive plan, refer to the Compensation Discussion and Analysis section of this Proxy Statement beginning on page 16.
|
(4)
|
Represents the aggregate grant date fair value of such awards, computed in accordance with FASB ASC Topic 718. For assumptions used in determining these values, refer to Note 11 of the Company's financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission. The grant date fair value did not reflect future dividends which might be paid on unvested shares of service-based or performance-based restricted stock. The value of dividends declared on such restricted stock is reported in the All Other Compensation column of the Summary Compensation Table.
|
Option Awards
|
Stock Awards
|
||||||||||
Name
|
Number of Securities Underlying
Unexercised Options
(#)
Exercisable
|
Number of Securities Underlying
Unexercised Options
(#)
Unexercisable
|
Equity
Incentive Plan Awards:
Number of Securities Underlying
Unexercised Unearned
Options
(#)
|
Option Exercise Price
($)
|
Option
Expiration Date
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1)
|
Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units or Other
Rights That
Have Not
Vested
(#)
|
Equity
Incentive Plan Awards:
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)
|
||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
||
Harry H. Herington (2)
|
-
|
-
|
-
|
-
|
-
|
80,590
|
782,529
|
207,710
|
2,016,864
|
||
Stephen M. Kovzan (3)
|
-
|
-
|
-
|
-
|
-
|
74,811
|
726,415
|
92,685
|
899,971
|
||
William F. Bradley, Jr. (4)
|
-
|
-
|
-
|
-
|
-
|
44,811
|
435,115
|
92,685
|
899,971
|
||
Robert W. Knapp (5)
|
-
|
-
|
-
|
-
|
-
|
42,641
|
414,044
|
59,409
|
576,861
|
(1)
|
The closing sales price per share of the Company's Common Stock on December 31, 2010, was $9.71.
|
(2)
|
At December 31, 2010, Mr. Herington directly owned the following unvested restricted stock awards:
|
(i)
|
2,000 shares of service-based restricted stock, which vest in two remaining equal annual installments beginning on February 4, 2011;
|
(ii)
|
19,454 shares of service-based restricted stock, which vest in two remaining equal annual installments beginning on March 4, 2011;
|
(iii)
|
30,978 shares of service-based restricted stock, which vest in three remaining equal annual installments beginning on February 3, 2011;
|
(iv)
|
28,158 shares of service-based restricted stock, which vest in four remaining equal annual installments beginning February 1, 2011;
|
(v)
|
74,573 performance-based restricted stock awards (the maximum number of shares which may be vested at the end of the three-year performance period ending December 31, 2010, excluding 9,380 dividend shares, which is the maximum number of dividend shares payable for such awards based upon cash dividends declared on or prior to December 31, 2010) issued pursuant to an equity incentive plan which will vest in part or all on March 4, 2011, if certain Company financial performance criteria are satisfied;
|
(vi)
|
79,167 performance-based restricted stock awards (the maximum number of shares which may be vested at the end of the three-year performance period ending December 31, 2011, excluding 9,958 dividend shares, which is the maximum number of dividend shares payable for such awards based upon cash dividends declared on or prior to December 31, 2010) issued pursuant to an equity incentive plan which will vest in part or all on February 3, 2012, if certain Company financial performance criteria are satisfied; and
|
(vii)
|
53,970 performance-based restricted stock awards (the maximum number of shares which may be vested at the end of the three-year performance period ending December 31, 2012, excluding 3,537 dividend shares, which is the maximum number of dividend shares payable for such awards based upon cash dividends declared on or prior to December 31, 2010) issued pursuant to an equity incentive plan which will vest in part or all on February 1, 2013, if certain Company financial performance criteria are satisfied.
|
(3)
|
At December 31, 2010, Mr. Kovzan owned the following unvested restricted stock awards:
|
(i)
|
30,000 shares of unvested service-based restricted stock, which vest in two remaining equal annual installments beginning on February 4, 2011;
|
(ii)
|
11,092 shares of unvested service-based restricted stock, which vest in two remaining equal annual installments beginning on March 4, 2011;
|
(iii)
|
17,664 shares of unvested service-based restricted stock, which vest in three remaining equal annual installments beginning on February 3, 2011;
|
(iv)
|
16,055 shares of unvested service-based restricted stock, which vest in four remaining equal annual installments beginning on February 1, 2011;
|
(v)
|
33,276 performance-based restricted stock awards (the maximum number of shares which may be vested at the end of the three-year performance period ending December 31, 2010, excluding 4,185 dividend shares, which is the maximum number of dividend shares payable for such awards based upon cash dividends declared on or prior to December 31, 2010) issued pursuant to an equity incentive plan which will vest in part or all on March 4, 2011, if certain Company financial performance criteria are satisfied;
|
(vi)
|
35,326 performance-based restricted stock awards (the maximum number of shares which may be vested at the end of the three-year performance period ending December 31, 2011, excluding 4,444 dividend shares, which is the maximum number of dividend shares payable for such awards based upon cash dividends declared on or prior to December 31, 2010) issued pursuant to an equity incentive plan which will vest in part or all on February 3, 2012, if certain Company financial performance criteria are satisfied; and
|
(vii)
|
24,083 performance-based restricted stock awards (the maximum number of shares which may be vested at the end of the three-year performance period ending December 31, 2012, excluding 1,578 dividend shares, which is the maximum number of dividend shares payable for such awards based upon cash dividends declared on or prior to December 31, 2010) issued pursuant to an equity incentive plan which will vest in part or all on February 1, 2013, if certain Company financial performance criteria are satisfied.
|
(4)
|
At December 31, 2010, Mr. Bradley owned the following unvested restricted stock awards:
|
(i)
|
11,092 shares of unvested service-based restricted stock, which vest in two remaining equal annual installments beginning on March 4, 2011;
|
(ii)
|
17,664 shares of unvested service-based restricted stock, which vest in three remaining equal annual installments beginning on February 3, 2011;
|
(iii)
|
16,055 shares of unvested service-based restricted stock, which vest in four remaining equal annual installments beginning on February 1, 2011;
|
(iv)
|
33,276 performance-based restricted stock awards (the maximum number of shares which may be vested at the end of the three-year performance period ending December 31, 2010, excluding 4,185 dividend shares, which is the maximum number of dividend shares payable for such awards based upon cash dividends declared on or prior to December 31, 2010) issued pursuant to an equity incentive plan which will vest in part or all on March 4, 2011, if certain Company financial performance criteria are satisfied;
|
(v)
|
35,326 performance-based restricted stock awards (the maximum number of shares which may be vested at the end of the three-year performance period ending December 31, 2011, excluding 4,444 dividend shares, which is the maximum number of dividend shares payable for such awards based upon cash dividends declared on or prior to December 31, 2010) issued pursuant to an equity incentive plan which will vest in part or all on February 3, 2012, if certain Company financial performance criteria are satisfied; and
|
(vi)
|
24,083 performance-based restricted stock awards (the maximum number of shares which may be vested at the end of the three-year performance period ending December 31, 2012, excluding 1,578 dividend shares, which is the maximum number of dividend shares payable for such awards based upon cash dividends declared on or prior to December 31, 2010) issued pursuant to an equity incentive plan which will vest in part or all on February 1, 2013, if certain Company financial performance criteria are satisfied.
|
(5)
|
At December 31, 2010, Mr. Knapp owned the following unvested restricted stock awards:
|
(i)
|
3,039 shares of unvested service-based restricted stock, which vest on February 4, 2011;
|
(ii)
|
5,883 shares of unvested service-based restricted stock, which vest in two remaining equal annual installments beginning on July 28, 2011;
|
(iii)
|
17,664 shares of unvested service-based restricted stock, which vest in three remaining equal annual installments beginning on February 3, 2011;
|
(iv)
|
16,055 shares of unvested service-based restricted stock, which vest in four remaining equal annual installments beginning on February 1, 2011;
|
(v)
|
35,326 performance-based restricted stock awards (the maximum number of shares which may be vested at the end of the three-year performance period ending December 31, 2011, excluding 4,444 dividend shares, which is the maximum number of dividend shares payable for such awards based upon cash dividends declared on or prior to December 31, 2010) issued pursuant to an equity incentive plan which will vest in part or all on February 3, 2012, if certain Company financial performance criteria are satisfied; and
|
(vi)
|
24,083 performance-based restricted stock awards (the maximum number of shares which may be vested at the end of the three-year performance period ending December 31, 2012, excluding 1,578 dividend shares, which is the maximum number of dividend shares payable for such awards based upon cash dividends declared on or prior to December 31, 2010) issued pursuant to an equity incentive plan which will vest in part or all on February 1, 2013, if certain Company financial performance criteria are satisfied.
|
Option Awards
|
Stock Awards
|
|||||||
Name
|
Number of Shares Acquired on Exercise (#)
|
Value Realized on Exercise (1)
($)
|
Number of Shares Acquired on Vesting
(#)
|
Value Realized on Vesting (1)
($)
|
||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||
Harry H. Herington
|
-
|
-
|
31,342
|
247,300
|
||||
Stephen M. Kovzan
|
-
|
-
|
30,410
|
244,352
|
||||
William F. Bradley, Jr.
|
-
|
-
|
17,180
|
134,327
|
||||
Robert W. Knapp
|
-
|
-
|
18,117
|
145,309
|
(1)
|
The "value realized" on exercise of a stock option is calculated based on the difference between the per share closing market price for our common stock on the date of exercise and the exercise price of the option multiplied by the number of options exercised. The "value realized" on vesting of a restricted stock award is calculated based on the per share closing market price for our common stock on the vesting date of the award multiplied by the number of shares vested.
|
Name
|
Age
|
Positions with the Company
|
||
Stephen M. Kovzan
|
42
|
Chief Financial Officer
|
||
William F. Bradley, Jr.
|
56
|
Chief Operating Officer, General Counsel and Secretary
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Robert W. Knapp
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42
|
Executive Vice President
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Shares Beneficially Owned(1)
|
||||||||
Number
|
Percentage(2)
|
|||||||
Named Executive Officers and Directors
|
||||||||
Ross C. Hartley (3)
|
3,147,602 | 4.9 | % | |||||
William F. Bradley, Jr. (4)
|
1,440,952 | 2.2 | % | |||||
Harry H. Herington (5)
|
1,057,987 | 1.6 | % | |||||
Stephen M. Kovzan (6)
|
142,942 | * | ||||||
Robert W. Knapp (7)
|
79,301 | * | ||||||
Art N. Burtscher (8)
|
192,791 | * | ||||||
Daniel J. Evans (9)
|
133,534 | * | ||||||
Pete Wilson (10)
|
75,794 | * | ||||||
Alexander C. Kemper (11)
|
36,579 | * | ||||||
William M. Lyons (12)
|
24,075 | * | ||||||
All executive officers and directors as a group (10 persons)(13)
|
6,331,557 | 9.8 | % | |||||
5% Stockholders
|
||||||||
BlackRock, Inc. (14)
40 East 52nd Street
New York, New York 10022
|
5,664,547 | 8.7 | % | |||||
Brown Capital Management, Inc. (15)
1201 N. Calvert Street
Baltimore, Maryland 21202
|
5,362,330 | 8.3 | % | |||||
*Less than 1%
|
(1)
|
This table is based upon information supplied by officers, directors, principal stockholders and the Company's transfer agent, and contained in Schedules 13D and 13G filed with the SEC. Unless otherwise noted in the footnotes to this table, the Company believes each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 64,873,675 shares of the Company's Common Stock outstanding as of March 7, 2011, adjusted as required by the rules promulgated by the SEC.
|
(2)
|
For purposes of determining percentages of shares beneficially owned, the Company does not include in the number of outstanding shares those shares subject to performance-based restricted awards which are not scheduled to vest within 60 days of March 7, 2011, because the holders of such shares have no voting or disposition rights with respect to the shares. All shares subject to service-based restricted stock awards, which have voting rights, are included in outstanding shares.
|
(3)
|
Shares beneficially owned by Mr. Hartley include 22,051 shares directly owned, 2,928,757 shares owned by Ross C. Hartley Family Investments LLC, 175,992 shares held in a trust for the benefit of Mr. Hartley's son for which Mr. Hartley is the trustee and 20,802 shares of unvested service-based restricted stock. In his Schedule 13D filings with the SEC, Mr. Hartley reported that he and his spouse have shared voting and dispositive power over the shares held by Ross C. Hartley Family Investments LLC and that his spouse holds a majority of the voting interest in Ross C. Hartley Family Investments LLC.
|
(4)
|
Shares beneficially owned by Mr. Bradley include 1,440,952 shares directly owned, including 42,155 shares of unvested service-based restricted stock.
|
(5)
|
Shares beneficially owned by Mr. Herington include 1,057,987 shares directly owned, including 75,103 shares of unvested service-based restricted stock and 27,758 shares held for the benefit of Mr. Herington's minor children.
|
(6)
|
Shares beneficially owned by Mr. Kovzan include 142,942 shares directly owned, including 57,155 shares of unvested service-based restricted stock.
|
(7)
|
Shares beneficially owned by Mr. Knapp include 79,301 shares directly owned, including 45,531 shares of unvested service-based restricted stock.
|
(8)
|
Shares beneficially owned by Mr. Burtscher include 192,791 shares directly owned, including 20,802 shares of unvested service-based restricted stock.
|
(9)
|
Shares beneficially owned by Governor Evans include 133,534 shares directly owned, including 20,802 shares of unvested service-based restricted stock.
|
(10)
|
Shares beneficially owned by Governor Wilson include 75,794 shares directly owned, including 20,802 shares of unvested service-based restricted stock.
|
(11)
|
Shares beneficially owned by Mr. Kemper include 36,579 shares directly owned, including 21,709 shares of unvested service-based restricted stock.
|
(12)
|
Shares beneficially owned by Mr. Lyons include 24,075 shares directly owned including 10,285 shares of unvested service-based restricted stock.
|
(13).
|
Shares held by all executive officers and directors as a group include 335,146 shares of unvested service-based restricted stock
|
(14)
|
Based on information set forth in the Schedule 13G filed with the Securities and Exchange Commission on February 7, 2011. According to the Schedule 13G, shares beneficially owned by BlackRock, Inc. include 5,664,547 shares owned by various investment advisory clients of BlackRock, Inc. which is deemed to be a beneficial owner of those shares pursuant to Rule 13d-3 under the Exchange Act due to its discretionary power to make investment decisions over such shares for its clients and its ability to vote such shares.
|
(15)
|
Based on information set forth in Amendment No. 2 to the Schedule 13G filed with the Securities and Exchange Commission on February 7, 2011. According to the Schedule 13G, as amended, shares beneficially owned by Brown Capital Management, Inc. include 5,362,330 shares owned by various investment advisory clients of Brown Capital Management, Inc., which is deemed to be a beneficial owner of those shares pursuant to Rule 13d-3 under the Exchange Act due to its discretionary power to make investment decisions over such shares for its clients and its ability to vote such shares.
|
|
"RESOLVED, that the compensation paid to the Company's named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED."
|
|
·
|
a significant component of our compensation program incentivizes long-term performance and a three-year vote cycle will allow stockholders to better judge our compensation program relative to our long-term performance – for example, certain of the restricted stock awards granted to our named executive officers include performance-based vesting conditions tied to our growth in operating income and revenues and cash flow return on invested capital over a three-year measurement period;
|
|
·
|
our compensation program aligns the interests of our management with long-term stockholder interests and a three-year vote cycle is more consistent with this strategy – for example, (i) all of the service-based restricted stock awards granted to our named executive officers vest in annual increments over four years, (ii) as described above, the performance-based restricted stock awards granted to our named executive officers are subject to a three-year performance measurement schedule and (iii) each of our named executive officers and directors must comply with our stock ownership policy;
|
|
·
|
a three-year advisory vote cycle provides the Board of Directors sufficient time to carefully consider the results of the advisory vote regarding the compensation of our named executive officers and to design and implement any desired changes to our compensation program based upon the outcome of such vote;
|
|
·
|
an executive compensation study is typically conducted every three years by a consultant hired by the Compensation Committee; and
|
|
·
|
a three-year advisory vote cycle will provide our stockholders sufficient time to evaluate the effectiveness of the short- and long-term components of our compensation program and our performance.
|
2010
|
2009
|
|||||||
Audit fees
|
$ | 825,000 | $ | 766,000 | ||||
Audit-related fees
|
204,000 | 487,000 | ||||||
Tax fees
|
254,000 | 161,000 | ||||||
All other fees
|
- | - | ||||||
Total fees
|
$ | 1,283,000 | $ | 1,414,000 |
|
(1)
|
Prior to entering into the Related Person Transaction (a) the Related Person, (b) the director, executive officer, nominee or beneficial owner who is an immediate family member of the Related Person, or (c) the business unit or function/department leader responsible for the potential Related Person Transaction shall provide notice to the Corporate Governance and Nominating Committee (the "Committee") of the facts and circumstances of the proposed Related Person Transaction, including certain information specified in the Policy. The Committee will assess whether the proposed transaction is a Related Person Transaction for purposes of this policy.
|
|
(2)
|
If the Committee determines that the proposed transaction involves an aggregate amount in excess of $120,000 and is a Related Person Transaction, the proposed Related Person Transaction shall be submitted to the Committee for consideration at the next Committee meeting or, in those instances in which the Committee, in consultation with the Chief Executive Officer or the Chief Financial Officer, determines that it is not practicable or desirable for NIC to wait until the next Committee meeting, to the Chair of the Committee (who will possess delegated authority to act between Committee meetings).
|
|
(3)
|
The Committee, or where submitted to the Chair, the Chair, shall consider all of the relevant facts and circumstances available to the Committee or the Chair. No member of the Committee shall participate in any review, consideration or approval of any Related Person Transaction with respect to which such member or any of his or her immediate family members is the Related Person. The Committee (or the Chair) shall approve only those Related Person Transactions that are in, or are not inconsistent with, the best interests of NIC and its stockholders, as the Committee (or the Chair) determines in good faith.
|
|
(4)
|
The Chair of the Committee shall report to the Committee at the next Committee meeting any approval under this policy pursuant to delegated authority.
|
(1)
|
If the transaction is pending or ongoing, it will be submitted to the Committee or Chair of the Committee promptly, and the Committee or Chair shall consider all of the relevant facts and circumstances available to the Committee or the Chair. The Committee shall not ratify any Related Person Transaction that is not in the best interests of the Company and its stockholders. Based on this analysis, the Committee or the Chair shall evaluate all options, including but not limited to ratification, amendment or termination of the Related Person Transaction; and
|
(2)
|
If the transaction is completed, the Committee or Chair shall evaluate the transaction, taking into account all of the relevant facts and circumstances available to the Committee or Chair, to determine if rescission of the transaction and/or any disciplinary action is appropriate, and shall request an evaluation of NIC's controls and procedures to ascertain the reason the transaction was not submitted to the Committee or Chair for prior approval and whether any changes to these procedures are recommended.
|
25501 WEST VALLEY PARKWAY
SUITE 300
OLATHE, KS 66061
|
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