CHARTER OF THE CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

Purpose:

The purpose of the Corporate Governance and Nominating Committee (the "Committee") of the Board of Directors (the "Board") of NIC Inc. (the "Company"), is to (i) determine the slate of director nominees for election to the Company's Board and to recommend to the Board individuals to fill vacancies occurring between annual meetings of shareholders and to recommend individuals for nomination as members of the standing committees of the Board; and (ii) develop and recommend to the Board a set of corporate governance principles applicable to the Company. The Committee shall report to the Board on a regular basis and not less than once per year.

Composition:

The Committee will be comprised solely of "independent directors," i.e., those directors who are neither officers nor employees of the Company or its subsidiaries nor have a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, and each of whom is otherwise "independent" under the rules of the Nasdaq Stock Market, Inc. Candidates to fill subsequent vacancies in the Committee shall be appointed by the Board based on nominations by the Committee. The members of the Committee will serve at the discretion of the Board. The Committee shall designate one member of the Committee as its chairperson.

Duties and Responsibilities:

The operation of the Committee will be subject to the provisions of the Bylaws of the Company and the general corporation law of the state of the Company's incorporation, each as in effect from time to time. The following are the duties and responsibilities of the Committee and may be modified by the Board from time to time:

1. To make recommendations to the Board from time to time as to changes that the Committee believes to be desirable to the size of the Board or any committee thereof.
2. To identify individuals believed to be qualified to become Board members, and to determine the nominees to stand for election as directors at the annual meeting of shareholders or, if applicable, at a special meeting of shareholders. In the case of a vacancy in the office of a director (including a vacancy created by an increase in the size of the Board), the Committee shall recommend a nominee to fill such vacancy either through appointment by the Board or through an election by the shareholders. In nominating candidates the Committee shall take into consideration such factors as it deems appropriate. These factors may include judgment, skill, diversity, experience with businesses and other organizations of a comparable size, the interplay of the candidate's experience with that of the other Board members, and the extent to which a candidate would be a desirable addition to the Board and any Committees of the Board. The Committee may consider candidates proposed by management or by shareholders, but is not limited to such candidates.
3. To develop and recommend to the Board standards to be applied in making determinations as to the absence of relationships between the Company and its subsidiaries and a director which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
4. To identify Board members qualified to fill vacancies on any committee of the Board and to recommend that the Board appoint the identified member or members to the respective committee, taking into account any factors set forth in such committee's charter and any other factors the Committee deems appropriate.
5. In the case of a director nominee to fill a Board vacancy created by an increase in the size of the Board, make a recommendation to the Board as to the class of directors in which the individual should serve.
6. To establish procedures for the Committee to exercise oversight of the evaluation of the Board and management.
7. To review and approve any exceptions or waivers made to the Company code of conduct and its underlying policies involving directors or executive staff members.
8. To develop and recommend to the Board a set of corporate governance principles applicable to the Company and to review those principles at least once per year.
9. To prepare and issue the evaluation required under "Performance Evaluation" below.
10. Any other responsibilities expressly delegated to the Committee by the Board from time to time relating to the nomination of Board and committee members or governance issues.

Meetings:

The Committee will meet in person or telephonically at least once per year at a time and place determined by the Committee chairperson, with further meetings to occur, or actions to be taken by unanimous written consent, when deemed necessary or desirable by the Committee or its chairperson. The Chief Executive Officer, Chairman of the Board, Secretary, and Chief Financial Officer may attend any meeting or meetings of the Committee, except for portions of the meetings where such presence would be inappropriate, as determined by the Committee or its chairperson. The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.

Performance Evaluation:

The Committee shall produce and provide to the Board on an annual basis a performance evaluation of the Committee's performance of its duties under this charter. The evaluation shall also include any recommendations to improve the charter of the Committee. The performance evaluation shall be conducted in such a manner as the Committee deems appropriate. Any member of the Committee may present the evaluation to the Board either orally or in writing.

Resources and Authority:

The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain, terminate, and approve the fees and other retention terms of special counsel or other experts or consultants, as it deems appropriate, without seeking approval of the Board or management. With respect to consultants or search firms used to identify director candidates, this authority shall be vested solely in the Committee.

Minutes and Reports:

Minutes of each meeting will be kept and distributed to each member of the Committee, members of the Board who are not members of the Committee and the Secretary of the Company. The chairperson of the Committee (or any acting chairperson in the absence of the chairperson) will report to the Board at least once per year, or whenever so requested by the Board.
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