EGOV NIC Inc

Filed by the Registrant ☒      Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

March 17, 2021

Dear Stockholders of NIC Inc.:

You are cordially invited to attend a Special Meeting (which we refer to as the “Special Meeting”) of the stockholders of NIC Inc. (which we refer to as “NIC,” “we,” “us,” “our,” and the “Company”). The Special Meeting will be held virtually via the Internet on April 19, 2021 beginning at 11:00 a.m. Central Time. As part of our precautions regarding the COVID-19 (coronavirus) pandemic, we are sensitive to the public health and travel concerns that our stockholders may have, as well as any quarantines or other protocols that governments may impose. As a result, the Special Meeting will be held in a virtual meeting format only via live webcast. There will not be a physical meeting location. You will be able to attend the Special Meeting online and vote your shares electronically by visiting http://www.virtualshareholdermeeting.com/EGOV2021SM (which we refer to as the “Special Meeting website”).

At the Special Meeting, you will be asked to consider and vote upon (1) a proposal to adopt the Agreement and Plan of Merger, dated as of February 9, 2021, as may be amended from time to time (which we refer to as the “merger agreement”), by and among NIC, Tyler Technologies, Inc. (which we refer to as “Tyler”) and Topos Acquisition, Inc. (which we refer to as “Merger Sub”), which is a wholly-owned subsidiary of Tyler, pursuant to which Merger Sub will merge with and into NIC (which we refer to as the “merger”), and NIC will continue as the surviving corporation and a wholly-owned subsidiary of Tyler, (2) a non-binding advisory proposal to approve specified compensation that may be paid or become payable to NIC’s named executive officers in connection with the merger and contemplated by the merger agreement (which we refer to as the “compensation advisory proposal”) and (3) a proposal to approve one or more adjournments of the Special Meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to constitute a quorum or to approve the proposal to adopt the merger agreement (which we refer to as the “adjournment proposal”).

If the merger is completed, you will be entitled to receive $34.00 in cash, without interest and less applicable withholding taxes, for each share of NIC common stock, par value $0.0001 per share (which we refer to as “NIC common stock”), you own (unless you have properly exercised your appraisal rights with respect to such shares).

The board of directors of NIC (which we refer to as the “NIC board of directors”) has unanimously (1) determined that the terms of the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair to, and in the best interests of, NIC and its stockholders, (2) approved the execution and delivery by NIC of the merger agreement, the performance by NIC of its covenants and agreements contained in the merger agreement and the consummation of the merger and other transactions contemplated by the merger agreement upon the terms and subject to the conditions set forth in the merger agreement, (3) recommended that the stockholders of NIC adopt the merger agreement, and (4) directed that the adoption of the merger agreement be submitted to a vote of NIC stockholders. The NIC board of directors unanimously recommends that you vote (a) “FOR” the proposal to adopt the merger agreement, (b) “FOR” the compensation advisory proposal and (c) “FOR” the adjournment proposal.

All NIC stockholders of record at the close of business on March 16, 2021, the record date for the Special Meeting, are welcome to attend the Special Meeting via the Special Meeting website. Every stockholder’s vote is important to us, so it is important that your shares are represented at the Special Meeting whether or not you plan to attend via the Special Meeting website. To ensure that you will be represented, please promptly vote by submitting the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. You will also be able to attend the Special Meeting online and vote your shares electronically by visiting the Special Meeting website. If you plan to attend the Special Meeting, you will need the 16-digit control number included on your proxy card or voting instruction form that is accompanied by your proxy materials. If you attend the Special Meeting and vote via the Special Meeting website, your vote will revoke any proxy that you have previously submitted. If you hold your shares in street name, you should instruct your broker, bank or other nominee how to vote in accordance with the voting instruction form you will receive from your broker, bank or other nominee.

The enclosed proxy statement provides detailed information about the Special Meeting, the merger agreement and the merger. A copy of the merger agreement is attached as Annex A to the proxy statement. The proxy statement also describes the actions and determinations of the NIC board of directors in connection with its evaluation of the merger agreement and the merger. We encourage you to read the proxy statement and its annexes, including the merger agreement, carefully and in their entirety. You may also obtain more information about NIC from documents we file with the Securities and Exchange Commission (which we refer to as the “SEC”) from time to time.

Your vote is very important, regardless of the number of shares of NIC common stock that you own. We cannot consummate the merger unless the proposal to adopt the merger agreement is approved by the affirmative vote of the holders of a majority of the shares of NIC common stock issued and outstanding and entitled to vote thereon. The failure of any stockholder to vote by ballot via the Special Meeting website, to submit a signed proxy card or to grant a proxy electronically over the Internet or by telephone or an abstention from voting will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. If you hold your shares in street name, the failure to instruct your broker, bank or other nominee on how to vote your shares will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

If you have any questions or need assistance voting your shares of NIC common stock, please contact Innisfree M&A Incorporated, our proxy solicitor, by calling the toll-free number at +1 (877) 825-8621.

On behalf of the NIC board of directors, management and employees of NIC, thank you for your continued support of NIC and we appreciate your consideration of this matter.

Sincerely,

 

Harry H. Herington

Chairman and Chief Executive Officer

Neither the SEC nor any state securities regulatory agency has approved or disapproved of the transactions described in this document, including the merger, or determined if the information contained in this document is accurate or adequate. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated March 17, 2021 and, together with the enclosed form of proxy card, is first being mailed to NIC stockholders on or about March 19, 2021.

 

have the same effect as a vote “AGAINST” the compensation advisory proposal. If your shares are held in street name by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, a “broker non-vote” will arise but will have no effect on the compensation advisory proposal, so long as a quorum is otherwise present.

The affirmative vote of the holders of a majority of the issued and outstanding shares of NIC common stock that are present at the Special Meeting via the Special Meeting website or represented by proxy at the Special Meeting and entitled to vote thereon, whether or not a quorum is present, is required to vote “FOR” the adjournment proposal. An abstention from voting will have the same effect as a vote “AGAINST” the adjournment proposal. If your shares are held in street name by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, a “broker non-vote” will arise but will have no effect on the adjournment proposal.

Only stockholders of record as of the close of business on March 16, 2021, the record date for the Special Meeting, are entitled to notice of the Special Meeting and to vote at the Special Meeting or at any adjournment or postponement thereof. As required by our amended and restated bylaws, a list of stockholders entitled to vote at the Special Meeting will be available in our corporate offices located at 25501 West Valley Parkway, Suite 300, Olathe, KS 66061, during regular business hours for a period of at least 10 days before the Special Meeting and available online during the Special Meeting. If our headquarters are closed for health and safety reasons related to the COVID-19 (coronavirus) pandemic during such period, the list of stockholders will be made available for inspection upon request via email to legal@egov.com, subject to our satisfactory verification of stockholder status, and will also be made available online during the Special Meeting via the Special Meeting website.

The enclosed proxy statement provides detailed information about the Special Meeting, the merger agreement and the merger. A copy of the merger agreement is attached as Annex A to this proxy statement. This proxy statement also describes the actions and determinations of the board of directors of NIC (which we refer to as the “NIC board of directors”) in connection with its evaluation of the merger agreement and the merger. We encourage you to read this proxy statement and its annexes, including the merger agreement, carefully and in their entirety. You may also obtain more information about NIC from documents we file with the U.S. Securities and Exchange Commission from time to time. If you have any questions concerning the merger, the Special Meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your shares of NIC common stock, please contact our proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20^th Floor

New York, NY 10022

Stockholders may call toll-free: +1 (877) 825-8621

Banks and brokers may call collect: +1 (212) 750-5833

Stockholders who do not vote “FOR” the proposal to adopt the merger agreement will have the right to seek appraisal for the fair value of their shares of NIC common stock if they deliver a demand for appraisal before the vote is taken on the merger agreement and comply with all applicable requirements under Delaware law, which are summarized herein and reproduced in their entirety in Annex C to this proxy statement.

The NIC board of directors unanimously recommends that you vote (a) “FOR” the proposal to adopt the merger agreement, (b) “FOR” the compensation advisory proposal and (c) “FOR” the adjournment proposal.

By Order of the Board of Directors,

 

William Van Asselt

General Counsel and Secretary

March 17, 2021

WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING VIA THE SPECIAL MEETING WEBSITE, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE, (2) THROUGH THE INTERNET OR (3) BY MARKING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED.

You may revoke your proxy or change your vote at any time before the Special Meeting. If your shares are held in the name of a broker, bank or other nominee, please follow the instructions on the voting instruction card furnished to you by such broker, bank or other nominee, which is considered the stockholder of record, in order to vote. As a beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote the shares in your account. Your broker, bank or other nominee cannot vote on any of the proposals, including the proposal to adopt the merger agreement, without your instructions.

If you fail to return your proxy card, to grant your proxy electronically over the Internet or by telephone, or to vote by ballot via the Special Meeting website, your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting. If you are a stockholder of record, voting by ballot via the Special Meeting website will revoke any proxy that you previously submitted. If you hold your shares through a broker, bank or other nominee, you must obtain from the record holder a valid proxy issued in your name in order to vote via the Special Meeting website.

You should carefully read and consider this entire proxy statement and its annexes, including, but not limited to, the merger agreement, along with all of the documents incorporated by reference into this proxy statement, as they contain important information about, among other things, the merger and how it affects you. If you have any questions concerning the merger agreement, the merger, the Special Meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your shares of NIC common stock, please contact our proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20^th Floor

New York, NY 10022

Stockholders may call toll-free: +1 (877) 825-8621

Banks and brokers may call collect: +1 (212) 750-5833

The following questions and answers are intended to address briefly some commonly asked questions regarding the Special Meeting, the merger agreement and the transactions. These questions and answers may not address all questions that may be important to you as an NIC stockholder. Please refer to the section entitled “Summary” preceding this section and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, all of which you should read carefully.

meeting location. NIC stockholders will be able to attend the Special Meeting online and vote their shares electronically during the meeting by visiting http://www.virtualshareholdermeeting.com/EGOV2021SM, which we refer to as the “Special Meeting website.” If you plan to attend the Special Meeting via the Special Meeting website, you will need the 16-digit control number included on your proxy card or voting instruction form that is accompanied by your proxy materials.

To ensure that you will be represented, we encourage you to promptly vote by submitting the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. In certain circumstances, the Special Meeting could be adjourned to another time or place. All references in our proxy materials to the Special Meeting include any adjournment or postponement of the Special Meeting.

If you are a beneficial owner of shares held in street name and wish to vote via the Special Meeting website, you should contact your broker, bank or other nominee to obtain your specific control number and further instructions. If you are not a holder of record as of the close of business on the record date, you will be permitted to vote at the Special Meeting only if you have a valid legal proxy from a holder of record as of the close of business on the record date.

For a discussion of the factors that the NIC board of directors considered in determining to approve the execution and delivery of the merger agreement by NIC and to recommend the adoption of the merger agreement, please see the section entitled “The Merger (Proposal 1)—Recommendation of the NIC Board of Directors and Reasons for the Merger” beginning on page 36 of this proxy statement. In addition, in considering the recommendation of the NIC board of directors with respect to the merger agreement, you should be aware that some of our directors and executive officers have interests that may be different from, or in addition to, the interests of NIC stockholders generally. For a discussion of these interests, please see the section entitled “The Merger (Proposal 1)—Interests of NIC Directors and Executive Officers in the Merger” beginning on page 51 of this proxy statement.

As of the close of business on the record date, there were 67,905,010 shares of NIC common stock issued and outstanding, and entitled to vote at the Special Meeting. Each share of NIC common stock issued and outstanding as of the close of business on the record date will be entitled to one vote on each matter submitted to a vote at the Special Meeting.

If you submit a proxy but fail to provide voting instructions or abstain on any of the proposals listed on the proxy card, your shares will be counted for the purpose of determining whether a quorum is present at the Special Meeting.

If your shares are held in street name by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, these shares will not be counted for purposes of determining whether a quorum is present for the transaction of business at the Special Meeting.

In the event that a quorum is not present at the Special Meeting, we expect to adjourn or postpone the Special Meeting until we solicit enough proxies to obtain a quorum.

Beneficial Owner. If you are a beneficial owner of shares held in street name, under applicable stock exchange rules the broker, bank or other nominee that holds your shares may generally vote on routine proposals but cannot vote without instructions on non-routine matters unless they have discretionary authority. None of the proposals to be voted on at the Special Meeting are considered routine proposals. As a result, if the broker, bank or other nominee that holds your shares does not receive instructions from you on how to vote your shares, a “broker non-vote” will occur. Therefore, we urge you to give voting instructions to your broker. Shares represented by such “broker non-votes” will not be counted as present at the Special Meeting or represented by proxy in determining whether there is a quorum. A “broker non-vote” will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. Your abstention will have no effect on the compensation advisory proposal or the adjournment proposal.

The directors and executive officers of NIC have interests in the merger that may be different from, or in addition to, the interests of NIC stockholders generally. These interests are described in more detail in the section entitled “The Merger (Proposal 1)—Interests of NIC Directors and Executive Officers in the Merger” beginning on page 51 of this proxy statement.

At the effective time, each outstanding NIC restricted stock award that vests solely based on the achievement of performance goals will automatically vest in full and be cancelled and converted into the right to receive, with respect to each share of NIC common stock subject to such NIC restricted stock award (as determined in accordance with the applicable award agreement), the merger consideration, less all applicable withholding and other authorized deductions.

At the effective time, each assumed RSA will be assumed by Tyler and converted into a Tyler restricted stock award on the same terms and conditions (including those relating to accelerated vesting upon a termination of employment in connection with or following the effective time) as applicable to such assumed RSA immediately prior to the effective time, as converted into a number of shares of Tyler common stock of equivalent value at the effective time.

No NIC restricted stock awards have been granted to any director, executive officer or employee of NIC between the date of the merger agreement and the date of this proxy statement.

NIC would remain a public company, and shares of NIC common stock would continue to be registered under the Exchange Act, as well as listed and traded on Nasdaq. In the event that the merger agreement is terminated, in certain specified circumstances, the termination fee will be due and payable by NIC to Tyler. See the sections entitled “The Merger Agreement—Termination Fee” beginning on page 78 of this proxy statement and “The Merger Agreement—Effect of Termination” beginning on page 78 of this proxy statement.

Please note, however, that only your last-dated proxy will count. Attending the Special Meeting without taking one of the actions described above will not in itself revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy card or by sending a written notice of revocation to NIC, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by NIC before the Special Meeting (such new proxy cards or written notices of revocation received by or with our last mail delivery before the Special Meeting begins will be counted).

If you hold your shares in street name through a broker, bank or other nominee, you will need to follow the instructions provided to you by your broker, bank or other nominee in order to revoke your proxy or submit new voting instructions. You may also revoke your proxy by obtaining your specific control number and further instructions from your broker, bank or other nominee that holds the shares of record and voting your shares via the Special Meeting website.

The requisite number of shares to approve the compensation advisory proposal is a majority of the shares of NIC common stock issued and outstanding and that are present or represented by proxy at the Special Meeting and entitled to vote thereon. A quorum is a majority of the shares of NIC common stock issued and outstanding. An

abstention from voting will have the same effect as a vote “AGAINST” the compensation advisory proposal. If your shares are held in street name by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, a “broker non-vote” will arise but will have no effect on the compensation advisory proposal, so long as a quorum is otherwise present.

The requisite number of shares to approve the adjournment proposal is a majority of shares of NIC common stock issued and outstanding and that are present or represented by proxy at the Special Meeting and entitled to vote thereon, whether or not a quorum is present. An abstention from voting will have the same effect as a vote “AGAINST” the adjournment proposal. If your shares are held in street name by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, a “broker non-vote” will arise but will have no effect on the adjournment proposal.

Only shares of NIC common stock that are issued and outstanding as of the close of business on the record date are eligible to be voted on each of the three proposals and will be counted for purposes of determining whether a quorum is present at the Special Meeting.

The record date for stockholders entitled to vote at the Special Meeting is March 16, 2021. If you transfer your shares of NIC common stock after the record date but before the closing, unless you have granted a “legal proxy” to the purchaser as part of the transfer, you will have the right to vote at the Special Meeting, although you will have transferred your right to receive the merger consideration in the merger.

submit a written demand for appraisal to NIC before the vote on the proposal to adopt the merger agreement and such stockholder must not vote or otherwise submit a proxy in favor of the adoption of the merger agreement. Failure to comply exactly with the procedures and requirements specified under the DGCL will result in the loss of appraisal rights. The discussion of appraisal rights contained in this proxy statement is not a full summary of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL that is attached as Annex C to this proxy statement. For additional information, see the section entitled “Appraisal Rights” beginning on page 87 of this proxy statement. Because of the complexity of the DGCL relating to appraisal rights, if you are considering exercising your appraisal rights, we encourage you to seek the advice of your own legal counsel.

Each NIC stockholder is urged to read the discussion in the section entitled “The Merger (Proposal 1)—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 55 of this proxy statement.

Because particular circumstances may differ, we recommend that you consult your own tax advisor to determine the U.S. federal income tax consequences relating to the merger in light of your own particular circumstances and any consequences arising under any state, local or non-U.S. tax laws or tax treaties.

Innisfree M&A Incorporated

501 Madison Avenue, 20^th Floor

New York, NY 10022

Stockholders may call toll-free: +1 (877) 825-8621

Banks and brokers may call collect: +1 (212) 750-5833

If your broker, bank or other nominee holds your shares, you should also call your broker, bank or other

nominee for additional information.

This proxy statement contains “forward-looking statements” within the meaning of the U.S. federal securities laws. Such statements include statements concerning anticipated future events and expectations that are not historical facts. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “plan,” “predict,” “project,” “forecast,” “guidance,” “goal,” “objective,” “prospects,” “possible” or “potential,” by future conditional verbs such as “assume,” “will,” “would,” “should,” “could” or “may,” or by variations of such words or by similar expressions or the negative thereof. All forward-looking statements included in this proxy statement are based upon information available to us as of the filing date of this proxy statement, and, except to the extent required by applicable law, we undertake no obligation to update any of these forward-looking statements for any reason. You should not place undue reliance on forward-looking statements. The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by these statements. Important factors that could cause actual results to differ materially from those contained in any forward-looking statement include the factors identified in NIC annual report on Form 10-K for the year ended December 31, 2020, under the heading “Risk Factors,” as updated from time to time by NIC quarterly reports on Form 10-Q and other documents of NIC on file with the SEC or in this proxy statement filed with the SEC by NIC, and the following factors:

Consequently, all of the forward-looking statements we make in this proxy statement are qualified by the information contained or incorporated by reference herein, including, but not limited to, (1) the information contained under this heading and (2) the information contained under the heading “Risk Factors” and information in our consolidated financial statements and notes thereto included in our most recent filing on Form 10-K and subsequent periodic and interim report filings (see “Where You Can Find Additional Information” beginning on page 93 of this proxy statement). No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.

NIC Inc.

25501 West Valley Parkway, Suite 300

Olathe, KS 66061

Telephone: (844) 944-3468

NIC Inc. is a leading digital government solutions and payments company, serving more than 7,100 federal, state and local government agencies across the nation. With headquarters in Olathe, Kansas, and offices in more than 30 states, NIC partners with government to deliver user-friendly digital services that make it easier and more efficient to interact with government – providing valuable conveniences such as applying for unemployment insurance, submitting business filings, renewing licenses, accessing information and making secure payments without visiting a government office.

NIC is a Delaware corporation and NIC common stock trades on Nasdaq under the symbol “EGOV. Our principal executive offices are located at 25501 West Valley Parkway, Suite 300, Olathe, KS 66061 and our telephone number is (844) 944-3468.

Additional information about NIC is contained in our public filings, which are incorporated by reference herein. See “Where You Can Find Additional Information” beginning on page 93 of this proxy statement.

Tyler Technologies, Inc.

5101 Tennyson Parkway

Plano, TX 75024

Telephone: (972) 713-3700

Tyler Technologies, Inc. provides integrated software and technology services to the public sector. Tyler’s end-to-end solutions empower local, state, and federal government entities to operate more efficiently and connect more transparently with their constituents and with each other. By connecting data and processes across disparate systems, Tyler’s solutions are transforming how clients gain actionable insights that solve problems in their communities. Tyler has more than 27,000 successful installations across more than 11,000 sites, with clients in all 50 states, Canada, the Caribbean, Australia, and other international locations.

Tyler is a Delaware corporation and its stock is traded on the New York Stock Exchange under the symbol “TYL.” Tyler’s principal executive offices are located at 5101 Tennyson Parkway, Plano, TX 75024 and its telephone number is (972) 713-3700.

Topos Acquisition, Inc.

5101 Tennyson Parkway

Plano, TX 75024

Telephone: (972) 713-3700

Topos Acquisition, Inc. is a Delaware corporation formed for the sole purpose of completing the merger with NIC. Merger Sub is a wholly-owned subsidiary of Tyler. Merger Sub has engaged in no other business to date except for activities pursuant to or in connection with the merger agreement, the merger and the other transactions. Upon completion of the merger, Merger Sub will merge with and into NIC and will cease to exist. Merger Sub’s principal executive offices are located at 5101 Tennyson Parkway, Plano, TX 75024 and its telephone number is (972) 713-3700.

We are furnishing this proxy statement to NIC stockholders as part of the solicitation of proxies by the NIC board of directors for use at the Special Meeting or any adjournment or postponement thereof. This proxy statement provides NIC stockholders with the information they need to know to be able to vote or instruct their vote to be cast at the Special Meeting or any adjournment or postponement thereof.

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the NIC board of directors for use at the Special Meeting to be held virtually via the Internet on April 19, 2021 beginning at 11:00 a.m. Central Time or at any adjournment or postponement thereof. NIC has chosen to hold the Special Meeting solely by means of remote location (via the Internet) and not in a physical location given the current public health impacts of COVID-19 (coronavirus) and our desire to promote the health and safety of NIC stockholders, as well as NIC directors, officers, employees and other constituents.

Only individuals who were NIC stockholders as of the close of business on the record date and their authorized representatives may attend the Special Meeting. If you plan to attend the Special Meeting, you will need the 16-digit control number included on your proxy card or voting instruction form that is accompanied by your proxy materials. If you are a beneficial owner of shares held in street name and wish to vote via the Special Meeting website, you should contact your broker, bank or other nominee to obtain your specific control number and further instructions. To ensure that you will be represented, even if you plan to attend the Special Meeting via the Special Meeting website, we encourage you to promptly vote by submitting the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. If you attend the Special Meeting and vote by ballot via the Special Meeting website, your vote will revoke any proxy that you have previously submitted. Please contact your broker, bank or other nominee for instructions regarding obtaining your specific control number and further instructions.

This proxy statement and the enclosed form of proxy are first being mailed to NIC stockholders on or about March 19, 2021.

The primary purpose of the Special Meeting is for our stockholders to consider and vote upon the proposal to adopt the merger agreement. Our stockholders holding a majority of the shares of NIC common stock issued and outstanding at the close of business on the record date and entitled to vote thereon must adopt the merger agreement in order for the merger to occur. If our stockholders fail to adopt the merger agreement, the merger will not occur. A copy of the merger agreement is attached as Annex A to this proxy statement, and the material provisions of the merger agreement are summarized in the section of this proxy statement entitled “The Merger Agreement” beginning on page 59 of this proxy statement.

In addition, our stockholders are being asked to approve the compensation advisory proposal, which is the approval, on a non-binding advisory basis, of specified compensation that may be paid or become payable to NIC’s named executive officers in connection with the merger and contemplated by the merger agreement, the value of which is disclosed in the table entitled “Golden Parachute Compensation” and the notes accompanying that table in the section entitled “Advisory Vote on Specified Compensation (Proposal 2)” beginning on page 80 of this proxy statement.

Our stockholders are also being asked to approve the adjournment proposal, which is one or more adjournments of the Special Meeting, if necessary or appropriate, including to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to constitute a quorum or to approve the proposal to adopt the merger agreement.

At this time, we know of no other matters to be voted on at the Special Meeting. If any other matters properly come before the Special Meeting, your shares of NIC common stock will be voted in accordance with the discretion of the appointed proxy holders.

The holders of record of NIC common stock as of the close of business on March 16, 2021, the record date for the Special Meeting, are entitled to receive notice of and to vote at the Special Meeting. As of the close of business on the record date, 67,905,010 shares of NIC common stock were issued and outstanding, and entitled to vote at the Special Meeting.

The presence at the Special Meeting of the holders of a majority of the shares of NIC common stock issued and outstanding and entitled to vote, present via the Special Meeting website or represented by proxy, at the close of business on the record date will constitute a quorum. Once a share is represented at the Special Meeting, it will be counted for the purpose of determining a quorum at the Special Meeting. However, if a new record date is set for an adjourned Special Meeting, then a new quorum will have to be established. Proxies received but marked as abstentions will be included in the calculation of the number of shares considered to be present for the purpose of determining a quorum at the Special Meeting. “Broker non-votes,” described below under the section entitled “The Special Meeting—Attendance; Voting; Proxies; Revocation—Shares of NIC Common Stock Held in Street Name” beginning on page 25 of this proxy statement, will not be included in the calculation of the number of shares considered to be present for the purpose of determining a quorum at the Special Meeting.

Holders of NIC common stock are entitled to one vote on each proposal submitted to a vote at the Special Meeting for each share of NIC common stock they own at the close of business on the record date.

For NIC to complete the merger, stockholders holding a majority of the shares of NIC common stock issued and outstanding at the close of business on the record date and entitled to vote thereon must vote “FOR” the proposal to adopt the merger agreement. A failure to vote your shares of NIC common stock or an abstention from voting will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. If your shares are held in street name by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, a “broker non-vote” will arise and will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

The approval, on a non-binding advisory basis, of the compensation advisory proposal requires the affirmative vote of stockholders holding a majority of the issued and outstanding shares of NIC common stock which are present via the Special Meeting website or represented by proxy at the Special Meeting and entitled to vote thereon, so long as a quorum is present, to vote “FOR” the proposal. An abstention from voting will have the same effect as a vote “AGAINST” the compensation advisory proposal. If your shares are held in street name by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, a “broker non-vote” will arise but will have no effect on the compensation advisory proposal, so long as a quorum is otherwise present.

The affirmative vote of stockholders holding a majority of the issued and outstanding shares of NIC common stock which are present via the Special Meeting website or represented by proxy at the Special Meeting and entitled to vote thereon, whether or not a quorum is present, is required to vote “FOR” the adjournment proposal. An abstention from voting will have the same effect as a vote “AGAINST” the adjournment proposal. If your shares are held in street name by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, a “broker non-vote” will arise but will have no effect on the adjournment proposal.

At the close of business on the record date, directors and executive officers of NIC were entitled to vote 1,835,608 shares of NIC common stock, or approximately 2.7% of the shares of NIC common stock issued and outstanding on that date. We currently expect that NIC directors and executive officers will vote their shares “FOR” the proposal to adopt the merger agreement and “FOR” the other proposals to be considered at the Special Meeting, although they have no obligation to do so.

The directors and executive officers of NIC have interests in the merger that may be different from, or in addition to, the interests of NIC stockholders generally. These interests are described in more detail in the section entitled “The Merger (Proposal 1)—Interests of NIC Directors and Executive Officers in the Merger” beginning on page 51 of this proxy statement.

All holders of shares of NIC common stock as of the close of business on the record date, including stockholders of record and beneficial owners of NIC common stock registered in the street name of a broker, bank or other nominee, are invited to attend the Special Meeting via the Special Meeting website. During the Special Meeting, NIC

stockholders will be able to vote their shares. If you are a beneficial owner of shares held in street name and wish to vote via the Special Meeting website, you should contact your broker, bank or other nominee to obtain your specific control number and further instructions.

Stockholders of record who have registered in advance to attend the Special Meeting will be able to vote at the Special Meeting via the Special Meeting website. If you are a beneficial owner of shares held in street name and wish to vote at the Special Meeting via the Special Meeting website, you should contact your broker, bank or other nominee to obtain your specific control number and further instructions.

To ensure that your shares of NIC common stock are voted at the Special Meeting, we recommend that you provide voting instructions promptly by proxy, even if you plan to attend the Special Meeting via the Special Meeting website.

If you are a stockholder of record, you may provide voting instructions by proxy using one of the following methods:

If you submit a signed proxy card or submit your proxy by telephone or the Internet, but do not specify how you want to vote your shares on a particular proposal, then the proxy holders will vote your shares in accordance with the recommendations of the NIC board of directors on all matters presented in this proxy statement. If you fail to return your proxy card and you are a holder of record as of the close of business on the record date, unless you attend the Special Meeting and vote via the Special Meeting website, the effect will be that your shares of NIC common stock will not be considered present at the Special Meeting for purposes of determining whether a quorum is present at the Special Meeting, will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement, will have no effect on the vote regarding the compensation advisory proposal, so long as a quorum is otherwise present, and will have no effect on the vote regarding the adjournment proposal.

If your shares of NIC common stock are held in the name of a broker, bank or other nominee, you will receive instructions from your broker, bank or other nominee as to how to vote your shares. You must follow the instructions of your broker, bank or other nominee in order for your shares of NIC common stock to be voted. Telephone and Internet voting also will be offered to stockholders owning shares through certain brokers, banks and other nominees. If your shares of NIC common stock are not registered in your own name but are held through your broker, bank or other nominee and you plan to vote your shares at the Special Meeting via the Special Meeting website, you should contact your broker, bank or other nominee to obtain your specific control number and further instructions.

In accordance with the rules of Nasdaq, brokers, banks and other nominees that hold shares of NIC common stock in street name for their customers do not have discretionary authority to vote the shares with respect to the proposal to adopt the merger agreement, the compensation advisory proposal, or the adjournment proposal. Accordingly, if brokers, banks or other nominees do not receive specific voting instructions from the beneficial owner of such shares, they may not vote such shares with respect to these proposals. Under such circumstance, a “broker non-vote” would arise. “Broker non-votes,” if any, will not be considered present at the Special Meeting for purposes of determining whether a quorum is present at the Special Meeting, will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement and will have no effect (1) so long as a quorum is otherwise present, on the compensation advisory proposal or (2) on the adjournment proposal. Thus, for shares of NIC common stock held in street name, only shares of NIC common stock affirmatively voted “FOR” the proposal to adopt the merger agreement will be counted as a vote “FOR” such proposal.

Any person giving a proxy pursuant to this solicitation has the power to revoke and change it at any time before it is voted. If you are a stockholder of record, you may revoke your proxy at any time before the vote is taken at the Special Meeting by:

Please note, however, that only your last-dated proxy will count. Attending the Special Meeting without taking one of the actions described above will not in itself revoke your proxy. If you want to revoke your proxy by mailing a new proxy card or by sending a written notice of revocation to NIC, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by NIC before the Special Meeting (such new proxy cards or written notices of revocation received by or with our last mail delivery before the Special Meeting begins will be counted).

If you hold your shares in street name through a broker, bank or other nominee, you will need to follow the instructions provided to you by your broker, bank or other nominee in order to revoke your proxy or submit new voting instructions. You may also revoke your proxy by obtaining your specific control number and further instructions from your broker, bank or other nominee and voting your shares at the Special Meeting via the Special Meeting website.

An abstention occurs when a stockholder attends a meeting, either virtually or by proxy, but abstains from voting. Abstentions will be included as shares of NIC common stock present or represented at the Special Meeting for purposes of determining whether a quorum has been achieved. Abstaining from voting will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement, the compensation advisory proposal and the adjournment proposal.

Although it is not currently expected, the Special Meeting may be adjourned or postponed if necessary or appropriate, including for the purpose of soliciting a sufficient number of proxies “FOR” the proposal to adopt the merger agreement. In the event that a sufficient number of shares of NIC common stock is present at the Special Meeting via the Special Meeting website or represented by proxy, and voted “FOR” the proposal to adopt the merger agreement at the Special Meeting such that the NIC stockholder approval will have been obtained, NIC does not anticipate that it will adjourn or postpone the Special Meeting.

The Special Meeting may be adjourned by either the chairperson of the Special Meeting or by the affirmative vote of the holders of a majority of the shares of NIC common stock that are present at the Special Meeting via the Special Meeting website or represented by proxy at the Special Meeting and entitled to vote at the Special Meeting or as otherwise permitted by law, whether or not a quorum is present. Any adjournment or postponement of the Special Meeting will allow NIC stockholders who have already sent in their proxies to revoke them at any time before their use at the Special Meeting that was adjourned or postponed.

The NIC board of directors has unanimously (1) determined that the terms of the merger agreement and the transactions contemplated by the merger agreement, including the merger, are fair to, and in the best interests of, NIC and its stockholders, (2) approved the execution and delivery by NIC of the merger agreement, the performance by

NIC of its covenants and agreements contained in the merger agreement and the consummation of the merger and other transactions contemplated by the merger agreement upon the terms and subject to the conditions set forth in the merger agreement, (3) recommended that the stockholders of NIC adopt the merger agreement, and (4) directed that the adoption of the merger agreement be submitted to a vote of NIC stockholders (which we refer to as the “NIC board recommendation”).

The NIC board of directors unanimously recommends that you vote: (a) “FOR” the adoption of the merger agreement; (b) “FOR,” on a non-binding advisory basis, the compensation proposal; and (c) “FOR” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to constitute a quorum or to approve the proposal to adopt the merger agreement at the time of the Special Meeting.

We are paying the cost for the preparation, printing and distribution of the proxy materials. We may use the services of our directors, officers and employees, without additional compensation, to solicit proxies. We will reimburse any holder of record for its reasonable expenses incurred in completing the mailing of stockholder requested proxy materials to the beneficial owners of our common stock. NIC has engaged Innisfree to assist in the solicitation of proxies for the Special Meeting. NIC estimates that it will pay Innisfree a fee of up to $45,000, plus reimbursement of certain expenses. In addition, NIC may reimburse its transfer agent, brokerage firms and other persons representing beneficial owners of shares of NIC common stock for their expenses in forwarding solicitation material to such beneficial owners.

We are permitted to send a single set of proxy materials to stockholders who share the same last name and address. This procedure is called “householding” and is designed to reduce our printing and postage costs. This means that we may send a single set of our proxy materials, containing a single copy of this proxy statement but separate proxy cards or voting instruction forms for each stockholder in your household. We will promptly deliver a separate copy of our proxy materials to you if you write or call Innisfree by telephone, toll-free at +1 (877) 825-8621, or in writing to Innisfree M&A Incorporated, 501 Madison Avenue, 20^th Floor, New York, NY 10022. Such requests by street name holders should be made through their broker, bank or other nominee.

In addition, stockholders who share a single address, but receive multiple copies of this proxy statement, may request that in the future they receive a single copy by contacting (1) NIC at NIC Inc., 25501 West Valley Parkway, Suite 300, Olathe, Kansas 66061, Attention: Corporate Secretary or by calling +1 (844) 944-3468 (if your shares are registered in your own name) or (2) your broker, bank or other nominee (if your shares are registered in their name).

You should not return any evidence of your shares of NIC common stock or send documents representing NIC common stock with the proxy card. If the merger is completed, the paying agent for the merger will send to you a letter of transmittal, if applicable, and related materials and instructions for exchanging your shares of NIC common stock.

If you have any questions concerning the merger, the Special Meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your shares of NIC common stock, please contact our proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20^th Floor

New York, NY 10022

Stockholders may call toll-free: +1 (877) 825-8621

Banks and brokers may call collect: +1 (212) 750-5833

NIC in 2018 in connection with NIC's receipt of an unsolicited indication of interest from a potential financial buyer to act as NIC’s exclusive strategic and financial advisor, and to assist NIC in connection with NIC's analysis and consideration of strategic alternatives, and has been engaged by NIC as buyside financial advisor for potential acquisition transactions since March 2019.

On October 18, 2020, Mr. Moore sent Mr. Herington an email to inform Mr. Herington that Tyler had interviewed an investment banking firm and had called a special meeting of the Tyler board of directors to inform them of Tyler’s interest in NIC. Mr. Moore’s email stated that Mr. Moore would be back in touch with Mr. Herington sometime during the week of November 9, 2020 after Tyler’s regular board meeting and quarterly earnings call. On October 20, 2020, Mr. Herington replied to Mr. Moore’s email to thank Mr. Moore for the status update and to inform him that Mr. Herington would inform the NIC board of directors of Mr. Herington’s communications with Mr. Moore at NIC’s regular board meeting on October 26, 2020.

On October 23, 2020, Mr. Moore sent Mr. Herington an email to inform Mr. Herington that the Tyler board of directors had engaged Goldman Sachs as its financial advisor. Mr. Herington replied to Mr. Moore’s email to acknowledge receipt.

On October 26, 2020, at a regular meeting of the NIC board of directors, Mr. Herington informed the NIC board of directors of Mr. Herington’s September 23, 2020 call from Mr. Moore and of their subsequent email communications. Mr. Herington also informed the NIC board of directors that he had notified Mr. Burtscher on September 24, 2020. Mr. Herington noted that Mr. Moore had not made any offer for Tyler to acquire NIC and had not communicated any price or price range as part of these communications. After discussion, the NIC board of directors determined that it would not consider any offer unless it provided an equity value in excess of $2 billion and was primarily a cash offer.

Between November 1, 2020 and November 6, 2020, Mr. Moore and Mr. Herington exchanged emails congratulating each other on each company’s recent earnings announcements.

On November 11, 2020, Mr. Moore telephoned Mr. Herington, indicating that he and the Tyler board of directors remained enthusiastic about combining the two companies. Mr. Moore indicated that he intended to send Mr. Herington a confidential non-binding proposal outlining a potential transaction, and that the proposal was based only on publicly available information. Mr. Herington responded that it was premature to provide Tyler with confidential information but that if Tyler made a proposal that was worth serious consideration, NIC would engage an investment banker and provide Tyler with confidential information pursuant to a nondisclosure agreement. Later that day, Mr. Moore sent to Mr. Herington the unsolicited proposal he had referred to in his previous communication, which presented Tyler’s non-binding indication of interest in acquiring NIC (which we refer to as the “November 11 Proposal”) in an all-stock transaction for a price of $27.25 per share, determined by a fixed exchange ratio to be established closer to signing a definitive transaction agreement.

On November 12, 2020, Mr. Herington discussed the November 11 Proposal with Mr. Burtscher, and they concluded that the November 11 Proposal did not meet the criteria established by the NIC board of directors at the October 26, 2020 board meeting for an offer to warrant consideration by the NIC board of directors. Mr. Herington then emailed Mr. Moore a letter rejecting the November 11 Proposal.

On November 13, 2020, Mr. Moore sent Mr. Herington an email thanking Mr. Herington for NIC’s response, stating that Mr. Moore continued to believe that a combination of NIC and Tyler made sense for the clients, employees and shareholders of each company, and asking if they could discuss NIC’s growth strategies. Mr. Herington responded by informing Mr. Moore that being anything other than an independent company was not part of NIC’s strategy, and that NIC’s growth strategies included tuck-in acquisitions and investing in vertical growth platforms.

On November 18, 2020, Mr. Moore sent Mr. Herington a text message indicating that he intended to send Mr. Herington a revised confidential non-binding proposal outlining a potential transaction. Mr. Herington telephoned Mr. Moore and left him a voicemail message thanking Mr. Moore for his text message and reminding Mr. Moore of their initial conversation that NIC was not seeking to be acquired by Tyler, and that while Mr. Moore’s indication of interest was intriguing, NIC was focused on executing NIC’s strategy as a stand-alone independent public company. Later that day, Mr. Moore sent to Mr. Herington the revised unsolicited proposal he had referred to in his previous communication, which presented Tyler’s non-binding indication of interest in acquiring NIC (which we refer to as the “November 18 Proposal”) in an all-stock transaction for a price of $28.75 per share, determined by a fixed exchange ratio to be established closer to signing a definitive transaction agreement. Later that day,

Mr. Herington informed Mr. Burtscher of the November 18 Proposal. After discussing the November 18 Proposal, Mr. Burtscher reaffirmed to Mr. Herington the directive of the NIC board of directors established at the October 26, 2020 board meeting. Mr. Herington then emailed Mr. Moore a letter rejecting the November 18 Proposal.

On November 19, 2020, NIC engaged Shearman & Sterling LLP (which we refer to as “Shearman & Sterling”) as NIC’s counsel in connection with corporate governance matters and a potential business combination transaction.

On November 22, 2020, Mr. Moore sent Mr. Herington an email acknowledging Mr. Herington’s November 18, 2020 voicemail message and suggesting a follow-up discussion on November 30, 2020. Mr. Herington sent Mr. Moore a reply email agreeing to have a discussion on November 30, 2020.

On November 24, 2020, Mr. Herington called a special meeting of the NIC board of directors to be held on December 3, 2020, in order for Mr. Herington to formally brief the NIC board of directors of his discussions with Mr. Moore and of the receipt of the November 11 Proposal and the November 18 Proposal. Mr. Herington then called each member of the NIC board of directors and offered to speak with them and answer any questions in advance of the December 3, 2020 meeting.

On November 29, 2020, Mr. Moore sent Mr. Herington an email outlining Mr. Moore’s vision for how the two companies would be structured after an acquisition, indicating that there would be roles for NIC’s leadership team and that Mr. Herington would have a role in Tyler’s executive management. Mr. Herington responded by informing Mr. Moore that NIC was not seeking to be acquired by Tyler, and that NIC did not consider an acquisition by Tyler as a viable possibility. Mr. Herington indicated that NIC was focused on executing NIC’s strategy as a stand-alone independent public company, including completing NIC’s 2021 business plan and budget, and that NIC had not speculated on what a potential combination would look like or on what role its leadership team would have in a combined company.

On November 30, 2020, Mr. Moore and Mr. Herington spoke by telephone as agreed on November 22, 2020. Mr. Moore stated that he continued to believe in the value that would be created by a combination of NIC with Tyler and that both companies would be stronger as a combined company. Mr. Herington responded that NIC was not seeking to be acquired by Tyler or any other company, and that the November 18 Proposal did not warrant consideration by NIC. Mr. Herington also told Mr. Moore that he found Moore’s indication of interest to be intriguing and saw the potential value that a combination of NIC with Tyler could bring to the customers of both companies, and that depending on the price a merger could potentially be in the best interest of NIC stockholders. Mr. Moore stated that Tyler was revisiting the valuation indicated by the November 18 Proposal, and asked Mr. Herington whether NIC would be willing to consider a revised proposal. Mr. Herington also told Mr. Moore that he believed that NIC’s stock price would exceed the price offered by the November 18 Proposal by NIC executing its current strategy as a stand-alone independent public company. Mr. Moore then asked Mr. Herington if he had any comment on the structure of the November 11 Proposal and the November 18 Proposal, including the all-stock consideration. Mr. Herington informed Mr. Moore that, while Mr. Herington was not interested in negotiating the terms of a proposed transaction on that call, when Mr. Herington informed the NIC board of directors of the November 11 Proposal and the November 18 Proposal the NIC board of directors had expressed concern over the Tyler price earnings multiple, which would make an all-stock proposal challenging for the NIC board of directors. Mr. Moore then indicated to Mr. Herington that Tyler was still interested in pursuing a potential transaction with NIC, and that he would work with his team to prepare a revised proposal.

On December 3, 2020, at a meeting of the NIC board of directors, Mr. Herington briefed the NIC board of directors of his discussions with Mr. Moore and of the receipt of the November 11 Proposal and the November 18 Proposal, and also briefed the NIC board of directors on his discussions with representatives of Cowen, which representatives were known to members of the NIC board of directors because of Cowen’s experience advising NIC and reputation as an independent financial advisor and as a financial advisor to technology companies. At the meeting, William Van Asselt, NIC’s general counsel, informed the NIC board of directors that Shearman & Sterling had been engaged as NIC’s counsel, and reviewed with the NIC directors their fiduciary duties both in general and in the context of their evaluation of whether to engage in discussions with Tyler regarding a potential transaction. NIC’s management shared information that had been provided by representatives of Cowen, including historical stock price premiums paid in certain acquisition transactions. The NIC board of directors discussed how to respond to future communications or offers that may be received from Tyler, what alternatives might be available to Tyler if NIC were to reject future proposals that may be made by Tyler, what other potential buyers might be interested in acquiring NIC

and whether NIC should conduct a market check of other potential buyers. The NIC board of directors then instructed Mr. Herington that any proposal from Tyler to acquire NIC for a price in excess of $30.00 per share should be brought to the NIC board of directors for consideration at a special meeting.

On December 11, 2020, Mr. Moore called Mr. Herington to inform him that Tyler would be sending a revised proposal. Following their call, Mr. Moore sent to Mr. Herington the revised unsolicited proposal, which presented Tyler’s non-binding indication of interest in acquiring NIC (which we refer to as the “December 11 Proposal”). The December 11 Proposal stated that, based on publicly available information, Tyler would acquire NIC in an all-cash transaction for a price of $31.35 per share, and that Tyler would obtain a financing commitment from Goldman Sachs. The December 11 Proposal also stated that Tyler had the flexibility to offer a mix of cash and stock consideration.

On December 12, 2020, Mr. Herington emailed Mr. Moore to acknowledge receipt of the December 11 Proposal and to inform Mr. Moore that a special meeting of the NIC board of directors had been scheduled to consider the December 11 Proposal and that Mr. Herington would respond to Mr. Moore after the board meeting.

On December 15, 2020, the NIC board of directors held a meeting to discuss the December 11 Proposal. Mr. Herington introduced the representatives of Cowen and Shearman & Sterling. Representatives of Shearman & Sterling then reviewed with the NIC board of directors the fiduciary duties of the directors under Delaware law and provided the NIC board of directors with an overview of a typical transaction process, including transaction structures, timeline and process, and the role of the board, management and advisors. Mr. Herington and the representatives of Cowen and Shearman & Sterling discussed with the NIC board of directors (1) the December 11 Proposal, (2) Mr. Herington’s discussions with Mr. Moore, (3) potential responses to the December 11 Proposal, (4) whether, when and how to conduct a market check, (5) the financial analysis that would be provided by Cowen in connection with any acquisition proposal that the NIC board of directors would be asked to consider, (6) the role of the NIC board of directors in evaluating any acquisition proposal and in negotiating any transaction, and (7) antitrust considerations. The NIC board of directors determined to obtain further information about the December 11 Proposal, including NIC’s prospects if it remained a stand-alone independent company, and requested Cowen to prepare a preliminary financial analysis of the December 11 Proposal and a list of parties that might be interested in exploring a potential strategic transaction involving NIC to contact as part of a market check for discussion at a meeting of the NIC board of directors to be held on December 30, 2020.

After the board meeting, Mr. Herington and Mr. Moore spoke by telephone and Mr. Herington informed Mr. Moore that the NIC board of directors directed NIC’s management and advisors to prepare analyses to aid the NIC board of directors in its evaluation of the December 11 Proposal, and that Mr. Herington expected to have the response of the NIC board of directors to the December 11 Proposal before the end of the year.

On December 30, 2020, the NIC board of directors held a meeting to further discuss the December 11 Proposal. Representatives of Cowen summarized the November 11 Proposal, the November 18 Proposal and the December 11 Proposal and NIC’s stock performance, including the adverse impact on NIC’s public market valuation resulting from the loss of state contracts between 2013 and 2018, and NIC’s improved performance since December 2018. Members of NIC’s management presented management’s operating model and five-year projections (which we refer to as the “projections” and as described in more detail below in the section below entitled “The Merger (Proposal 1)—Projected Financial Information” beginning on page 49 of this proxy statement) to assess the potential long-term benefits and risks to stockholders if NIC were to remain a stand-alone independent company, compared to the risks and benefits of pursuing a potential sale of NIC on the terms reflected in the December 11 Proposal. Representatives of Cowen compared management’s projections with Wall Street consensus forecasts for NIC and compared NIC’s projected revenue growth and margins for 2021 and 2022 with corresponding data for certain other companies in the vertical software, payments, government services and IT services industries. Representatives of Cowen also reviewed with the NIC board of directors its preliminary financial analysis of the December 11 Proposal. After discussion, the NIC board of directors determined, based on their collective experience and judgment, that the December 11 Proposal undervalued NIC and that the execution of NIC’s then-current strategic plan could deliver greater long-term value to NIC stockholders than the transaction contemplated by the December 11 Proposal. The NIC board of directors authorized Mr. Herington to respond to the December 11 Proposal with a counterproposal of $39.00 per share. The NIC board of directors also decided to engage Cowen as NIC’s financial advisor based on Cowen’s experience and reputation, subject to negotiation of a mutually acceptable engagement letter. Representatives from Shearman & Sterling reviewed with the NIC board of directors its fiduciary duties in connection with evaluating and responding to the December 11 Proposal, including determining whether to contact other companies that might be interested in a strategic transaction with NIC. Representatives of Cowen then reported

on their review of parties that might be potentially interested in exploring a potential strategic transaction involving NIC as part of the market check process that had been requested by the NIC board of directors at the December 15, 2020 meeting. Representatives of Cowen reported that they identified various potential financial buyers for whom NIC might meet their investment criteria, and various potential strategic buyers (including various strategic buyers backed by financial buyers) that might have a business rationale for a transaction with NIC. Representatives of Cowen then described their review of each of these potential buyers, and how they identified specifically four potential strategic buyers from the list (which we refer to as “Company A,” “Company B,” “Company C” and “Company D”) that Cowen believed would have the most compelling strategic and financial rationale for acquiring NIC, the financial wherewithal to acquire NIC and a demonstrated history of completing comparable acquisition transactions. The NIC board of directors then instructed Mr. Herington and representatives of Cowen to contact each of these four companies to determine whether any of them had any interest in pursuing a possible strategic transaction with NIC.

On December 31, 2020, Mr. Herington and Mr. Moore spoke by telephone and Mr. Herington informed Mr. Moore that the NIC board of directors met to discuss the December 11 Proposal. Mr. Herington reiterated that NIC was not actively pursuing a merger or acquisition of NIC and that NIC’s management and board of directors were confident of NIC’s future success as a stand-alone independent company. Mr. Herington also told Mr. Moore that the NIC board of directors recognized the potential value that a combination of NIC with Tyler could bring to the customers of both companies and that, depending on the price, a merger could potentially be in the best interest of NIC stockholders. Mr. Herington then shared with Mr. Moore the determination of the NIC board of directors that the December 11 Proposal undervalued NIC and presented the counterproposal of $39.00 per share. Mr. Herington also indicated that NIC would accept a mix of cash and stock consideration if Tyler were not able to pay all cash at that valuation. Mr. Moore replied that he would need to discuss NIC’s counterproposal with other Tyler executives and members of the Tyler board of directors and with representatives of Goldman Sachs before he could respond.

On January 4, 2021, Cowen and NIC entered into an engagement letter pursuant to which Cowen was engaged by NIC to act as NIC’s exclusive financial advisor in connection with a possible sale or other business combination transaction.

Also on January 4, 2021, as instructed by the NIC board of directors, representatives of Cowen contacted senior executives of Company B, Company C and Company D to determine whether any of them had any interest in pursuing a possible strategic transaction with NIC. Between January 5, 2021 and January 7, 2021, representatives of each of these companies notified representatives of Cowen that they were not interested in pursuing a possible strategic transaction with NIC. Also on January 4, Mr. Herington contacted the chief executive officer of Company A to determine whether Company A had any interest in pursuing a possible strategic transaction with NIC. The chief executive officer of Company A indicated that he was interested in having a further discussion with NIC, and Mr. Herington indicated that representatives of Cowen would follow up with Company A. Between January 4, 2021 and January 7, 2021, representatives of Cowen contacted the chief executive officer of Company A three times and, at the direction of Company A's chief executive officer, attempted to contact the chief financial officer of Company A to schedule a meeting or telephone call, but the chief financial officer of Company A did not respond to Cowen's outreach.

On January 10, 2021, Mr. Moore sent Mr. Herington a text message to arrange a call on January 11, 2021. On January 11, 2021, Mr. Herington and Mr. Moore spoke by telephone and Mr. Moore verbally responded to Mr. Herington’s December 31, 2020 counterproposal with an all-cash offer price of $32.85 per share. Mr. Moore also informed Mr. Herington that Tyler expected to receive a highly confident letter from Goldman Sachs in the next few days. Mr. Herington replied that he did not believe that Mr. Moore’s revised proposal would be acceptable to the NIC board of directors. After further discussion, Mr. Moore then proposed an offer price of $34.00 per share, acknowledging that the Tyler board of directors had not authorized him to offer that amount and that Mr. Moore would need to seek approval from the executive committee of the Tyler board of directors.

On January 12, 2021, Mr. Moore sent to Mr. Herington a revised proposal, which presented Tyler’s non-binding indication of interest in acquiring NIC (which we refer to as the “January 12 Proposal”). The January 12 Proposal stated that Tyler would acquire NIC in an all-cash transaction for a price of $34.00 per share, and that Tyler would obtain a financing commitment from Goldman Sachs. The January 12 Proposal indicated that it was Tyler’s “best and final” proposal, and stated Tyler’s belief that it represented a full and fair valuation for NIC shareholders and, if presented directly to them, would be viewed very favorably and considered in their best interests.

On January 13, 2021, the NIC board of directors held a meeting to discuss the January 12 Proposal. Representatives of Cowen summarized the market check conducted by Cowen and Mr. Herington and reviewed with the NIC board of directors Cowen’s preliminary financial analysis of the January 12 Proposal. Representatives of Cowen also described for the NIC board of directors the highly confident letter and financing commitment letter that Tyler expected to receive from Goldman Sachs. Representatives of Shearman & Sterling reviewed with the NIC board of directors the fiduciary duties of the directors under Delaware law, explained the need to consider transaction certainty, and summarized Shearman & Sterling’s regulatory analysis regarding a potential combination of NIC and Tyler. The NIC board of directors discussed the January 12 Proposal, including (1) the meaning of “best and final” and whether the January 12 Proposal was really a “best and final” offer, (2) what actions Tyler could take if NIC did not accept the January 12 Proposal, (3) whether to make another counterproposal to Tyler and the potential risks of engaging in further price negotiations, (4) the value of the January 12 Proposal to NIC stockholders, (5) the risks of remaining an independent company, including the sensitivity of NIC’s stock price to the risk of losing a material customer, (6) that the offer was all cash and did not have a stock component, so NIC stockholders did not bear the risk of any potential price decline in Tyler's common stock after a transaction was announced, (7) the possibility of changes in capital gains tax treatment under the new presidential administration, (8) that the January 12 Proposal was not expected to have a financing contingency, and that Tyler expected to receive a highly confident letter and financing commitment letter from Goldman Sachs, (9) Shearman & Sterling’s analysis of potential regulatory implications of a transaction with Tyler, (10) the timing of a potential transaction, the potential for leaks and management distraction from day to day business in a prolonged sale process, and (11) whether the January 12 Proposal represented the best value available to NIC stockholders under the current circumstances. After discussion, the NIC board of directors determined, based on their collective experience and judgment, to proceed with the January 12 Proposal, and authorized NIC to enter into a nondisclosure agreement including a standstill provision with Tyler, continue discussions with Tyler regarding the January 12 Proposal, and provide due diligence information regarding NIC to Tyler.

After the board meeting, Mr. Herington and Mr. Moore spoke by telephone and Mr. Herington informed Mr. Moore that the NIC board of directors authorized NIC to proceed with the January 12 Proposal. Mr. Herington informed Mr. Moore that the NIC board of directors wanted to understand Tyler’s timeline and requirements for entering into a definitive agreement, and to confirm that the transaction would not be subject to a financing contingency. Mr. Herington also requested that Mr. Moore introduce Shearman & Sterling to Tyler’s counsel. Following the call, Mr. Moore provided Mr. Herington with contact information for Tyler’s counsel at Munck Wilson Mandala, LLP (which we refer to as “Munck Wilson”), and representatives of Shearman & Sterling provided representatives of Munck Wilson a draft nondisclosure agreement which included a one year standstill provision. Tyler and NIC entered into the nondisclosure agreement on January 14, 2021.

On January 15, 2021, Mr. Moore sent Mr. Herington a highly confident letter from Goldman Sachs, and indicated that Tyler would provide a financing commitment letter in connection with entering into a definitive merger agreement. Mr. Moore also exchanged emails with Mr. Herington that a draft of a nonbinding letter of intent would be forthcoming from Tyler’s counsel and regarding due diligence and the scheduling of meetings between their respective management teams. On January 15, 2021, Munck Wilson sent Shearman & Sterling a proposed nonbinding letter of intent executed by Tyler. Also on January 15, 2021, representatives of Goldman Sachs provided representatives of Cowen with an initial high level due diligence request list.

On January 17, 2021, representatives of Cowen spoke by telephone with representatives of Goldman Sachs to discuss the timeline for the proposed transaction and each party’s contemplated earnings release date, due diligence, management meetings and the proposed transaction structure. At the direction of the NIC board of directors, representatives of Cowen expressed NIC’s preference for a tender offer rather than a merger because of the shorter time period between signing and closing. Based upon consultations with Tyler, representatives of Goldman Sachs expressed Tyler’s preference for a merger because it provided Tyler with more time to complete the financing for the transaction. Representatives of Goldman Sachs provided representatives of Cowen with a detailed due diligence request list and a summary of topics to be discussed in management meetings, which representatives of Cowen subsequently shared with NIC’s management.

On January 18, 2021, Mr. Van Asselt and representatives of Shearman & Sterling spoke by videoconference with Abigail Diaz, Tyler’s chief legal officer, and representatives of Munck Wilson to discuss the letter of intent proposed by Tyler, the timeline for the proposed transaction and each party’s contemplated earnings release date, due diligence and the proposed transaction structure. Representatives of Shearman & Sterling expressed NIC’s preference for a

tender offer rather than a merger because of the shorter time period between signing and closing, but that NIC would be prepared to accommodate Tyler’s preferred structure and longer timeline provided that Tyler would agree that the merger agreement would have minimal conditionality. It was ultimately determined by the parties that a nonbinding letter of intent was not necessary for the transaction, and a letter of intent was never finalized or executed by NIC.

On January 19, 2021, representatives of Tyler’s management, Goldman Sachs and Munck Wilson were provided access to a virtual data room containing materials provided in response to Tyler’s due diligence requests.

On January 21, 2021, Mr. Herington and Mr. Moore spoke by telephone to verify that the due diligence process was proceeding smoothly and to discuss the management presentations scheduled for January 22, 2021. Mr. Herington also informed Mr. Moore that NIC was evaluating a potential acquisition of a privately held company and separately that NIC was negotiating to purchase its corporate office building in Olathe, Kansas.

On January 22, 2021, the NIC board of directors met with NIC’s management, representatives of Cowen and representatives of Shearman & Sterling to discuss the status of NIC’s discussions and due diligence with Tyler.

Following the board meeting, on January 22, 2021, NIC’s management met by videoconference with Tyler’s management. At the meeting, the respective management teams discussed NIC’s business and prospects, and NIC shared with Tyler portions of the projections (as described in more detail below in the section below entitled “The Merger (Proposal 1)—Projected Financial Information” beginning on page 49 of this proxy statement). Following the management meetings on January 22, 2021, Mr. Moore sent Mr. Herington an email providing positive feedback on the management meetings held that day.

On January 23, 2021, representatives of Munck Wilson provided a draft merger agreement to representatives of Shearman & Sterling.

On January 26, 2021, Mr. Herington sent Mr. Moore a text message to congratulate Mr. Moore on Tyler being awarded a contract to provide its electronic filing solution to the Texas Office of Court Administration through 2027, followed by an exchange of text messages between Mr. Herington and Mr. Moore in which each confirmed that the discussions between NIC and Tyler were progressing smoothly and that neither party had raised any issues or concerns.

On January 29, 2021, representatives of Shearman & Sterling sent a revised draft of the merger agreement to representatives of Munck Wilson.

On January 29, 2021, the NIC board of directors met with NIC’s management, representatives of Cowen and representatives of Shearman & Sterling to discuss the status of NIC’s discussions and due diligence with Tyler. Representatives of Shearman & Sterling summarized Tyler’s financing for the proposed transaction. The NIC board of directors discussed two recent analyst reports on NIC and recent trading prices for NIC’s stock. Representatives of Shearman & Sterling reviewed with the NIC board of directors the fiduciary duties of the directors under Delaware law and provided a recap of the NIC board of directors’ process for evaluating the proposed transaction and the market check conducted by Cowen and Mr. Herington at the direction of the NIC board of directors. In response to a question from the NIC board of directors, Mr. Herington informed the NIC board of directors that Tyler had not made any statements regarding future employment for NIC’s senior management team. Mr. Herington indicated that no such conversations had taken place and then requested that the NIC board of directors authorize him to engage in discussions with Tyler regarding employment arrangements for NIC’s senior management team. The NIC board of directors provided Mr. Herington with this authorization.

On February 1, 2021, Mr. Van Asselt and representatives of Shearman & Sterling spoke by videoconference with Ms. Diaz and representatives of Munck Wilson to negotiate the merger agreement.

A regular meeting of the NIC board of directors was held on February 1, 2021. Representatives of Cowen and representatives of Shearman & Sterling were present for the portion of the meeting at which the NIC board of directors discussed the status of NIC’s discussions with Tyler. Mr. Van Asselt and representatives of Shearman & Sterling reviewed the timeline for the proposed transaction and the schedule for future meetings of the NIC board of directors and other key dates. Representatives of Shearman & Sterling reviewed the material terms of the draft merger agreement, and representatives of Cowen reviewed with the NIC board of directors an update of certain portions of Cowen’s preliminary financial analysis of the January 12 Proposal.

On February 1, 2021, Mr. Herington and Mr. Moore exchanged emails in which each confirmed that the discussions between NIC and Tyler continued to progress smoothly and to schedule a call to take place the following day.

On February 2, 2021, representatives of Munck Wilson sent a revised draft of the merger agreement to representatives of Shearman & Sterling.

On February 2, 2021, Mr. Herington and Mr. Moore spoke by telephone to discuss the progress of the discussions between NIC and Tyler, the status of Tyler’s proposed financing for the transaction, the timing of the transaction announcement, the treatment of restricted stock awards held by NIC’s non-executive directors, a comparison of each company’s employee benefit programs and employment and retention matters, including Tyler’s desire for NIC’s senior management team to assist Tyler with the transition and integration of NIC’s business through closing and to remain employed by Tyler following closing. No specific roles or responsibilities for members of NIC’s senior management team were discussed.

On February 4, 2021, Mr. Herington and Mr. Moore spoke by telephone and discussed Mr. Moore’s intention following closing to make a pool of stock incentives available to members of NIC’s senior management team to ensure a smooth transition and integration period. However, no specific roles or responsibilities for members of NIC’s senior management team were discussed.

On February 4, 2021, representatives of Munck Wilson provided representatives of Shearman & Sterling a draft of the debt commitment letter that Tyler was negotiating with representatives of Goldman Sachs.

During the period between February 4, 2021 and February 9, 2021, Mr. Van Asselt and Shearman & Sterling and Ms. Diaz and Munck Wilson negotiated the unresolved terms of the merger agreement. Representatives of Shearman & Sterling also provided Tyler and its advisors feedback on the conditions precedent to the debt commitment letter in order to align them with the closing conditions in the merger agreement.

On February 5, 2021, the NIC board of directors met with NIC’s management, representatives of Cowen and representatives of Shearman & Sterling to discuss the status of NIC’s discussions and due diligence with Tyler. Representatives of Cowen reported on the status and structure of Tyler’s financing for the proposed transaction. Representatives of Shearman & Sterling reported on the status of discussions with Munck Wilson and the anticipated timing for finalizing the merger agreement, and for signing the merger agreement and announcing the proposed transaction. Representatives of Shearman & Sterling summarized the open issues in the merger agreement negotiations, including (1) NIC’s ability to pay dividends in the ordinary course subsequent to the dividend declared at the February 1, 2021 meeting of the NIC board of directors, (2) the amount of the termination fee, (3) the ability of either party to extend the June 30, 2021 outside termination date if the transaction has not closed by such date for antitrust reasons, and (4) NIC’s ability to take certain actions between the signing and closing of the transaction. Mr. Herington then reported on his discussions with Mr. Moore regarding employment matters, including employment arrangements for NIC’s senior management team, as authorized by the NIC board of directors at the January 29, 2021 meeting.

On February 8, 2021, the NIC board of directors met with NIC’s management, representatives of Cowen and representatives of Shearman & Sterling to discuss the status of NIC’s discussions and due diligence with Tyler. Representatives of Cowen reported on the status of Tyler’s financing for the proposed transaction and on their discussions with representatives of Goldman Sachs. Representatives of Shearman & Sterling reported on the status of discussions with Munck Wilson regarding the merger agreement and the resolution of the open issues in the merger agreement negotiations that were discussed at the February 5 meeting, Tyler’s debt commitment letter, and the anticipated timing for finalizing and signing the merger agreement and for announcing the proposed transaction. Representatives of Shearman & Sterling reported that the remaining open issue in the merger agreement negotiations was the amount of the termination fee, and that Tyler’s last proposal was $68.0 million and NIC’s last proposal was $55.0 million. Representatives of Cowen provided market data benchmarking termination fees in acquisition transactions of similar size. After discussion, the NIC board of directors provided guidance on a range of termination fees that would be acceptable to the NIC board of directors. Representatives of Cowen then reviewed with the NIC board of directors Cowen’s updated preliminary financial analysis of the January 12 Proposal.

On the evening of February 9, 2021, the NIC board of directors met with NIC’s management, representatives of Cowen and representatives of Shearman & Sterling to review the terms and conditions of the proposed transaction with Tyler. Representatives of Shearman & Sterling reviewed the fiduciary duties of the directors under Delaware law and summarized the NIC board of directors’ process in evaluating the proposed transaction with Tyler. Representatives of Shearman & Sterling reported that the remaining open issue in the merger agreement negotiations, the amount of the termination fee, had been resolved by Tyler accepting NIC’s proposed fee of $55.0 million. Representatives of Shearman & Sterling reviewed with the NIC board of directors the terms and conditions of the

proposed merger agreement, the final copy of which had been provided to the NIC board of directors in advance of the meeting, and certain terms of Tyler’s debt commitment letter with representatives of Goldman Sachs. Representatives of Cowen reviewed with the NIC board of directors Cowen’s financial analysis of the proposed cash merger consideration of $34.00 per share of NIC common stock. Representatives of Cowen then delivered to the NIC board of directors Cowen’s opinion to the effect that, as of February 9, 2021 and subject to the various assumptions and limitations set forth therein, the merger consideration of $34.00 per share to be received by NIC stockholders in the merger was fair, from a financial point of view, to such stockholders. The NIC board of directors, with the advice and assistance of representatives of Cowen, Shearman & Sterling and NIC’s management, then evaluated and discussed the terms of the merger agreement and the transactions contemplated thereby. The NIC board of directors took into consideration the factors deemed relevant by the NIC board of directors, including the factors described below in the section below entitled “The Merger (Proposal 1)—Recommendation of the NIC Board of Directors and Reasons for the Merger” beginning on page 36 of this proxy statement. After discussion and consideration of the financial and other information presented, the NIC board of directors unanimously determined that the terms of the merger agreement and the transactions contemplated thereby, including the merger, were fair to, and in the best interests of, NIC and its stockholders, and approved the execution and delivery by NIC of the merger agreement, the performance by NIC of its covenants and agreements contained in the merger agreement and the consummation of the merger and the other transactions contemplated by the merger agreement upon the terms and subject to the conditions contained in the merger agreement.

At 11:59 p.m., Eastern Time, on February 9, 2021, the merger agreement and related documents were executed and delivered by each of NIC and Tyler.

On February 10, 2021, NIC and Tyler issued a joint press release announcing the execution of the merger agreement.

After considering the various factors described below, the NIC board of directors unanimously (1) determined that the terms of the merger agreement and the transactions contemplated by the merger agreement, including the merger, were fair to, and in the best interests of, NIC and its stockholders, (2) approved the execution and delivery by NIC of the merger agreement, the performance by NIC of its covenants and agreements contained in the merger agreement and the consummation of the merger and other transactions upon the terms and subject to the conditions set forth in the merger agreement, (3) recommended that the stockholders of NIC adopt the merger agreement, and (4) directed that adoption of the merger agreement be submitted to a vote of NIC stockholders.

In evaluating the merger agreement and the merger, the NIC board of directors consulted with NIC’s senior management and its outside legal and financial advisors and, in reaching its determination to recommend that NIC stockholders adopt the merger agreement, the NIC board of directors relied upon and considered numerous factors, including the material factors set forth below (the order in which the following factors appear does not reflect any relative significance):

NIC’s current and historical business, financial condition, results of operations, competitive position, strategic options and prospects, as well as NIC’s near-term and long-term standalone plan in the event NIC were to remain an independent public company, the risks and challenges associated with remaining an independent public company and the risks and uncertainties associated with the execution of the standalone plan, and the potential impact of those factors on the future trading price of NIC common stock, including risks related to:

In addition to the factors above, the NIC board of directors identified and considered a variety of risks and potentially negative factors concerning the merger, including:

The foregoing discussion of the information and factors considered by the NIC board of directors is not intended to be exhaustive, but rather includes the principal material information, factors and analyses considered by the NIC board of directors in reaching its conclusions and recommendation in relation to the merger agreement and the transactions. The NIC board of directors evaluated the various factors listed above in light of its knowledge of the business, financial condition and prospects of NIC, in consultation with NIC’s senior management and outside legal and financial advisors. The NIC board of directors did not provide a specific assessment of, quantify or otherwise assign any relative weights to, the factors considered in determining its recommendation. Instead, the NIC board of directors conducted an overall analysis of the factors and reasons described above and determined in its business judgment that, in the aggregate, the potential benefits of the merger to NIC stockholders outweighed the risks or potential negative consequences. Individual members of the NIC board of directors may have given different weight to different factors. In addition, in arriving at its recommendation, the directors of NIC were aware of the interests of certain officers and directors of NIC as described in “The Merger (Proposal 1)—Interests of NIC Directors and Executive Officers in the Merger” beginning on page 51 of this proxy statement.

NIC retained Cowen to act as its exclusive financial advisor in connection with a proposed merger involving Tyler, and to render an opinion to the NIC board of directors as to the fairness, from a financial point of view, to NIC stockholders, of the merger consideration to be received by such stockholders in the merger. On February 9, 2021, Cowen delivered its opinion to the NIC board of directors to the effect that, as of that date and subject to the various assumptions and limitations set forth therein, the merger consideration to be received by NIC stockholders in the merger was fair, from a financial point of view, to such stockholders.

The full text of the written opinion of Cowen, dated February 9, 2021, is attached as Annex B to this proxy statement and is incorporated herein by reference. NIC encourages NIC stockholders to read the opinion in its entirety for the assumptions made, procedures followed, other matters considered and limits of the review by Cowen. The summary of the written opinion of Cowen set forth herein is qualified in its entirety by reference to the full text of such opinion. Cowen’s analyses and opinion were prepared for and addressed to the NIC board of directors and are directed only to the fairness, from a financial point of view, to NIC stockholders of the merger consideration to be received by such stockholders in the merger. Cowen’s opinion is not a recommendation to any stockholder or any other person as to how to vote with respect to the merger or whether such stockholder or such person should take any other action in connection with the merger or otherwise.

In connection with its opinion, Cowen reviewed and considered such financial and other matters as Cowen deemed relevant, including, among other things:

In conducting its review and arriving at its opinion, Cowen, with NIC’s consent, assumed and relied, without independent investigation, upon the accuracy and completeness of all financial and other information provided to Cowen by NIC or which was publicly available or was otherwise reviewed by Cowen. Cowen did not undertake any responsibility for the accuracy, completeness or reasonableness of, or independent verification of, such information. Cowen relied upon, without independent verifications, the assessment of NIC’s management as to the existing products and services of NIC and the viability of, and risks associated with, the future products and services of NIC. In addition, Cowen did not conduct nor did Cowen assume any obligation to conduct any physical inspection of the properties or facilities of NIC. Cowen further relied upon NIC’s representation that all information provided to Cowen by NIC was accurate and complete in all material respects. Cowen, with NIC’s consent, assumed that the NIC forecasts were reasonably prepared by NIC’s management on bases reflecting the best currently available estimates and good faith judgments of such management as to the future performance of NIC, and that such NIC forecasts provided a reasonable basis for Cowen’s opinion. Cowen expressed no opinion as to the NIC forecasts or the assumptions on which they were made. Cowen expressly disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting Cowen’s opinion of which Cowen became aware after the date thereof.

Cowen assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of NIC since the date of the last financial statements made available to Cowen. Cowen did not make or obtain any independent evaluations, valuations or appraisals of the assets or liabilities of NIC, nor was Cowen furnished with such materials. In addition, Cowen did not evaluate the solvency or fair value of NIC, Tyler or Merger Sub under any state or federal laws relating to bankruptcy, insolvency or similar matters. Cowen’s opinion did not address any legal, tax, accounting or regulatory matters related to the merger agreement or the merger, as to which Cowen assumed that NIC and the NIC board of directors received such advice from legal, tax, accounting and regulatory advisors as each determined appropriate. Cowen’s opinion addressed only the fairness of the merger consideration to be received by NIC stockholders in the merger, from a financial point of view to such stockholders. Cowen expressed no view as to any other aspect or implication of the merger or any other agreement, arrangement or understanding entered into in connection with the merger or otherwise. Cowen’s opinion was necessarily based upon economic and market conditions and other circumstances as they existed and could be evaluated by Cowen on the date thereof. It should be understood that although subsequent developments may affect Cowen’s opinion, Cowen does not have any obligation to update, revise or reaffirm its opinion and Cowen expressly disclaimed any responsibility to do so.

Cowen has not considered any potential legislative or regulatory changes currently being considered or recently enacted by the United States or any foreign government, or any domestic or foreign regulatory body, or any changes in accounting methods or generally accepted accounting principles that may be adopted by the Securities and Exchange Commission, the Financial Accounting Standards Board, or any similar foreign regulatory body or board.

For purposes of rendering its opinion Cowen assumed in all respects material to its analysis, that the representations and warranties of each party contained in the merger agreement were true and correct, that each party would perform all of the covenants and agreements required to be performed by it under the merger agreement and that all conditions to the consummation of the merger would be satisfied without waiver thereof. Cowen also assumed that all governmental, regulatory and other consents and approvals contemplated by the merger agreement would be obtained and that in the course of obtaining any of those consents no restrictions would be imposed or waivers made that would have an adverse effect on the contemplated benefits of the merger. Cowen assumed that the merger would be consummated in a manner that complies with the applicable provisions of the Exchange Act and all other applicable state or federal statutes, rules and regulations.

It is understood that Cowen’s opinion is intended for the benefit and use of the NIC board of directors in its consideration of the financial terms of the merger. Cowen’s opinion may not be disclosed, referred to, or communicated (in whole or in part) to any third party for any purpose whatsoever except with Cowen’s prior written approval. However, Cowen’s opinion may be reproduced in full in disclosure documents relating to the merger which NIC is required to file under the Securities Exchange Act of 1934, as amended. Cowen’s opinion does not constitute a recommendation to any stockholder or any other person as to how to vote with respect to the merger or to take any other action in connection with the merger or otherwise. Cowen was not requested to opine as to, and its opinion did not in any manner address, NIC’s underlying business decision to effect the merger or the relative merits of the

merger as compared to other business strategies or transactions that might be available to NIC. In addition, Cowen was not requested to opine as to, and its opinion did not in any manner address, (1) the fairness of the amount or nature of the compensation to any of NIC’s officers, directors or employees, or class of such persons, relative to the compensation to the public stockholders of NIC, or (2) whether Tyler has sufficient cash, available lines of credit or other sources of funds to enable it to pay the merger consideration at the closing of the merger.

The following is a summary of the material financial analyses performed by Cowen in arriving at its opinion and presented to the NIC board of directors. Some of the summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data set forth in the tables without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses. Cowen performed certain procedures, including each of the financial analyses summarized below, and reviewed with the NIC board of directors and NIC’s management the assumptions on which such analyses were based and other factors, including the historical financial results of NIC and the NIC forecasts.

To provide contextual data and comparative market information, Cowen compared selected operating and financial data and multiples for NIC to the corresponding data and multiples of certain other companies that are providers of vertical software, payments, government services and IT services (which we refer to as the “selected companies”) whose securities are publicly traded and that Cowen believed, in the exercise of its professional judgment and experience, have one or more businesses or operating characteristics similar to NIC. These companies were:

The data and multiples reviewed by Cowen included the market capitalization of equity plus debt and debt-like instruments less cash (which we refer to as “enterprise value”) of each of the selected companies, as a multiple of estimated earnings before interest, taxes, depreciation and amortization (which we refer to as “EBITDA”), for calendar years 2021(which we refer to as “CY2021E”) and 2022 (which we refer to as “CY2022E”), respectively, based on Capital IQ consensus estimates, where available, or otherwise from Wall Street research analyst reports.

The following tables present the multiples of enterprise value to EBITDA, as of February 9, 2021, for the selected companies for CY2021E and CY2022E, respectively:

Note: The multiples for the following companies were excluded because they were greater than 60.0x or less than 0.0x and were determined to be not meaningful: Duck Creek Holdings, Inc., Guidewire Software, Inc., Phreesia, Inc. and Q2 Holdings, Inc.

Although the selected companies were used for comparison purposes, none of those companies is directly comparable to NIC. Accordingly, an analysis of the results of such a comparison is not purely mathematical, but instead involves complex considerations and judgments concerning differences in historical and projected financial and operating characteristics of the selected companies and other factors that could affect the public trading value of the selected companies and NIC to which they are being compared.

Based upon the information regarding the selected companies summarized above, Cowen’s experience with providers of vertical software, payments, government services and IT services and its professional judgment, Cowen applied

the selected multiple ranges set forth in the table below (which correspond to the 25th percentile and median multiples observed in Cowen’s review of the selected companies) to NIC’s estimated EBITDA, excluding stock-based compensation and non-recurring items (which we refer to as “adjusted EBITDA”), for the calendar years 2021 and 2022, respectively, each based on the NIC forecasts, to calculate an implied enterprise value reference range for NIC. Cowen then subtracted total debt and added cash and cash equivalents, each as of December 31, 2020, to derive an implied equity value reference range. The figures in the implied equity value reference range for NIC were then divided by the number of fully diluted shares outstanding to calculate a reference range of implied values per share of NIC common stock. This analysis resulted in the ranges of implied approximate per share equity value reference ranges of NIC common stock set forth in the table below, as compared to the closing price of NIC common stock of $29.81 per share as of February 9, 2021, and the merger consideration of $34.00 per share.

The data and multiples reviewed by Cowen included the implied enterprise value paid in each of the selected transactions as a multiple of EBITDA for the latest twelve months (which we refer to as “LTM”) prior to the announcement of the selected transactions, respectively. The following table presents the multiples of implied enterprise value to LTM EBITDA for the selected transactions.

Note: The multiple for the transaction involving Vertafore, Inc. was excluded because it was not available.

Based upon the information presented above, Cowen’s experience with providers of vertical software, payments, government services and IT services and its professional judgment, Cowen applied a selected multiple range of 13.7x to 16.7x (which corresponds to the median multiple observed in Cowen’s review of the selected transactions, plus or minus 1.5x) to NIC’s estimated adjusted EBITDA for calendar year 2020, based on the NIC forecasts, to calculate an implied enterprise value reference range for NIC. Cowen then subtracted total debt and added cash and cash equivalents, each as of December 31, 2020, to derive an implied equity value reference range. The figures in the implied equity value reference range for NIC were then divided by the number of fully diluted shares outstanding to calculate a reference range of implied equity values per share of NIC common stock. This analysis resulted in a range of implied approximate equity values per share of NIC common stock of $25.64 to $30.48 per share, as compared to the closing price of NIC common stock of $29.81 per share as of February 9, 2021, and the merger consideration of $34.00 per share.

Although the selected transactions were used for comparison purposes, none of those transactions is directly comparable to the merger, and none of the target companies in those transactions is directly comparable to NIC. Accordingly, an analysis of the results of such a comparison is not purely mathematical, but instead involves complex considerations and judgments concerning differences in historical and projected financial and operating characteristics of the target companies involved and other factors that could affect the acquisition value of such companies or NIC to which they are being compared.

Cowen performed a discounted cash flow analysis of NIC to derive a range of implied equity values per share of NIC common stock by calculating the net present value of NIC’s forecasted unlevered free cash flows for the calendar years ending December 31, 2021 through December 31, 2025, and the net present value of NIC’s terminal value, each based on the NIC forecasts. Taking into account the results of the selected companies analysis summarized above, Cowen calculated terminal values for NIC by applying a range of perpetuity growth rates of 2.5% to 3.5% to NIC’s estimated calendar year 2025 free cash flow. The net present values of NIC’s forecasted unlevered free cash flows and terminal values were then calculated by using discount rates ranging from 8.0% to 9.0%, which were based on an estimate of NIC’s weighted average cost of capital, and a valuation date of December 31, 2020, to determine an implied enterprise value reference range. Cowen then subtracted total debt and added cash and cash equivalents, each as of December 31, 2020, to derive an implied equity value reference range. The figures in the implied equity value reference range were then divided by the number of fully diluted shares outstanding to calculate a reference range

of implied equity values per share of NIC common stock. This analysis resulted in a range of implied approximate equity values per share of NIC common stock of $26.80 to $36.53 per share, as compared to the closing price of NIC common stock of $29.81 per share as of February 9, 2021, and the merger consideration of $34.00 per share.

Cowen also noted certain other factors with respect to NIC, which were not considered material to its financial analyses with respect to its opinion, but were referenced for informational purposes only, including, among other things, the following:

Cowen performed an illustrative analysis of the present value of the future stock price of NIC, which was designed to provide an indication of the present value of a theoretical future value of NIC as a function of NIC’s estimated next twelve months, or NTM, adjusted EBITDA and its assumed multiple of enterprise value to NTM adjusted EBITDA. In calculating the implied present value of the future price per share of NIC common stock, Cowen first calculated the implied future enterprise value of NIC by multiplying NIC’s estimated NTM adjusted EBITDA, based on the NIC forecasts, by multiples ranging from 14.6x to 16.6x, which range was selected based on Cowen’s professional judgment and experience, and corresponds to the NTM EBITDA multiple based on Wall Street research analysts’ consensus estimates for NIC’s 2021 EBITDA of 15.6x, plus or minus 1.0x. Cowen then subtracted total debt and added cash and cash equivalents, each as estimated for the end of calendar years 2021, 2022 and 2023, respectively, to derive an implied equity value reference range. The figures in the implied equity value reference range were then divided by the number of fully diluted shares estimated to be outstanding at the end of calendar years 2021, 2022 and 2023, respectively, to calculate a reference range of implied equity values per share of NIC. Cowen then discounted the implied equity values per share of NIC to present values as of December 31, 2020 using a discount rate of 8.6%, based on an estimate of NIC’s cost of equity. This analysis indicated a range of implied approximate equity values per share of NIC common stock of $28.81 to $35.52 per share, as compared to the closing price of NIC common stock of $29.81 per share as of February 9, 2021, and the merger consideration of $34.00 per share.

Cowen reviewed and analyzed, using publicly available data obtained from Thomson SDC databases and public company filings, the premiums paid in 65 public target M&A transactions of $1 to $5 billion in enterprise value from January 1, 2017 to December 31, 2020. Cowen calculated the average premium of the price paid in such transactions relative to the target company’s closing share price one day prior and four weeks prior to the announcement of the transaction. This analysis indicated the following:

Based upon the information presented above and Cowen’s professional judgment and experience, Cowen applied the reference ranges of illustrative premiums paid set forth in the table below (which correspond to the 25th percentile and 75th percentile of the premiums paid observed in Cowen’s review of public target M&A transactions described above) to the closing price for shares of NIC common stock on February 9, 2021 of $29.81 and to the closing price for shares of NIC common stock 4-weeks prior to the announcement date of the merger of $27.28. This analysis resulted in a range of implied values per share of NIC common stock set forth in the table below, as compared to the closing price of NIC common stock of $29.81 per share as of February 9, 2021, and the merger consideration of $34.00 per share.

For informational purposes only, Cowen reviewed the closing prices of the shares of NIC common stock on various days and over various periods, including based upon the volume weighted average price (which we refer to as “VWAP”) over such periods. The table below illustrates the stock prices for those days and periods and the premium implied by the merger consideration of $34.00 per share of NIC common stock to the historical share prices.

Cowen also noted that NIC’s implied enterprise value based upon the merger consideration of $34.00 per share of NIC common stock implied a premium of 15.9% to NIC’s enterprise value based on the closing price of NIC common stock of $29.81 per share as of February 9, 2021.

Cowen reviewed the trading prices of the shares of NIC common stock during the 52-week period prior to February 9, 2021, noting that the low and high intraday prices during such period ranged from $15.49 to $30.81 per share of NIC common stock.

Cowen reviewed selected public market trading price targets for the shares of NIC common stock prepared and published by equity research analysts that were publicly available as of February 9, 2021. These price targets reflect analysts’ estimates of the future public market trading price of the shares of NIC common stock at the time the price target was published. As of February 9, 2021, the undiscounted range of selected equity research analyst price targets per share of NIC common stock published during the preceding four-month period was $28.00 to $34.00. Cowen calculated the present value of this range of selected equity research analyst price targets by applying a discount rate of 8.6%, based on an estimate of NIC’s cost of equity, which resulted in a range of present values of $25.78 to $31.31 per share.

Public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for the shares of NIC common stock, and these target prices and the analysts’ earnings estimates on which they are based are subject to risk and uncertainties, including factors affecting the financial performance of NIC and future general industry and market conditions.

The summary set forth above does not purport to be a complete description of all the analyses performed by Cowen. The preparation of a fairness opinion involves various determinations as to the most appropriate and relevant methods of financial analysis and the application of these methods to the particular circumstances and, therefore, such an opinion is not readily susceptible to partial analysis or summary description. Cowen did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, notwithstanding the separate factors summarized above, Cowen believes, and has advised the NIC board of directors, that its analyses must be considered as a whole and that

selecting portions of its analyses and the factors considered by it, without considering all analyses and factors, could create an incomplete view of the process underlying its opinion. In performing its analyses, Cowen made numerous assumptions with respect to industry performance, business and economic conditions and other matters, many of which are beyond the control of NIC. These analyses performed by Cowen are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by such analyses. In addition, analyses relating to the value of businesses do not purport to be appraisals or to reflect the prices at which businesses or securities may actually be sold. Accordingly, such analyses and estimates are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors. None of NIC, Cowen or any other person assumes responsibility if future results are materially different from those projected. The analyses supplied by Cowen and its opinion were among several factors taken into consideration by the NIC board of directors in making its decision to enter into the merger agreement and should not be considered as determinative of such decision.

NIC selected Cowen to serve as its financial advisor based on Cowen’s extensive experience in NIC’s industry and familiarity with NIC’s business and strategic objectives. Cowen is a nationally recognized investment banking firm and, as part of its investment banking business, Cowen is continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. In addition, in the ordinary course of its business, Cowen and its affiliates may actively trade or hold the securities of NIC and Tyler for their own account and for the accounts of their customers, and, accordingly, may at any time hold a long or short position in such securities.

Cowen in the past has provided, currently is providing, and in the future may provide financial advisory services to NIC and has received and in the future may receive compensation for such services. During the two years preceding the date of Cowen’s opinion, Cowen and its affiliates received retainer fees from NIC for services unrelated to the merger in the amount of $225,000. During the two years preceding the date of Cowen’s opinion, Cowen and its affiliates were not engaged to provide financial advisory or other services to Tyler, and during such period Cowen did not receive any fees from Tyler. In the future Cowen may provide commercial and investment banking services to NIC and Tyler unrelated to the merger, for which services Cowen and its affiliates would expect to receive compensation.

The issuance of Cowen’s opinion was approved by Cowen’s Fairness Opinion Review Committee. Cowen did not recommend any specific amount of consideration to the NIC board of directors or NIC’s management or that any specific amount of consideration constituted the only appropriate consideration in the merger for NIC stockholders.

Pursuant to the engagement letter between Cowen and NIC, Cowen will be entitled to receive a transaction fee of approximately $20.5 million, $1.25 million of which became payable upon Cowen informing the NIC board of directors that it was prepared to render its opinion and the balance of which is payable contingent upon the consummation of the merger. Additionally, NIC has agreed to reimburse Cowen for certain of its out-of-pocket expenses, including attorneys’ fees, and has agreed to indemnify Cowen against certain liabilities, including liabilities under the federal securities laws. The terms of the fee arrangement with Cowen were negotiated at arm’s length between NIC and Cowen, and the NIC board of directors was aware of the arrangement, including the fact that a significant portion of the fee payable to Cowen is contingent upon the consummation of the merger.

NIC does not, on a routine basis, publicly disclose long-term projections as to future financial performance due to, among other reasons, the unpredictability of the underlying assumptions and estimates, though NIC has in the past provided investors with full-fiscal year financial guidance on certain financial metrics, including total revenue, adjusted EBITDA and earnings per share, which are updated when necessary during the relevant fiscal year. However, in connection with the evaluation of the proposed merger, NIC’s senior management shared certain non-public, unaudited prospective financial information prepared by it for strategic planning purposes with the NIC board of directors and with Cowen, for purposes of its financial analyses and opinion, for the fiscal year ending December 31, 2020 and the five following fiscal years ending December 31, 2025 (which we refer to as the “projections”). NIC’s senior management also provided portions of the projections to Tyler.

The projections were not prepared with a view to public disclosure and are included in this proxy statement only because such information was made available to the NIC board of directors, Cowen and Tyler as described above. The projections were not prepared with a view to compliance with generally accepted accounting principles as

applied in the United States (which we refer to as “GAAP”), the published guidelines of the SEC regarding projections and forward-looking statements or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The prospective financial information included in this proxy statement has been prepared by, and is the responsibility of, NIC’s senior management, and is subjective in many respects. The projections were, in the view of NIC’s senior management, prepared on a reasonable basis, reflected the best available estimates and judgments at the time of preparation, and presented as of the time of preparation, to the best of senior management’s knowledge and belief, the expected course of action and the expected future financial performance of NIC on a standalone basis, subject to the assumptions and limitations described in this section. Furthermore, neither NIC’s independent auditors nor any other independent accountants have audited, reviewed, examined, compiled or applied agreed-upon procedures with respect to the accompanying prospective financial information and, accordingly, assume no responsibility for, and express no opinion or other form of assurance on, such information or its achievability.

The projections are forward-looking statements. Although summaries of the projections are presented with numerical specificity, the projections reflect numerous assumptions and estimates as to future events made by NIC’s senior management, which it believes were reasonable at the time the projections were prepared, taking into account the relevant information available to management at such time. However, this information is not fact and should not be relied upon as being necessarily predictive of actual future results. Important factors may affect actual results and cause the forecasts not to be achieved. These factors include general economic conditions, accuracy of certain accounting assumptions, timing of business investments by NIC, changes in actual or projected cash flows, competitive pressures, changes in tax or other laws or regulations, and the other factors described in the section entitled “Forward-Looking Statements” beginning on page 21 of this proxy statement, the “Risk Factors” section in our 2020 Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, and the information referenced in the section entitled “Where You Can Find Additional Information” beginning on page 93 of this proxy statement. Generally, the further out the period to which the projections relate, the less predictable and more unreliable the information becomes. In addition, the projections do not take into account any circumstances or events occurring after the date that the projections were prepared. Furthermore, the projections were prepared on a standalone basis without giving effect to the merger, including the impact of negotiating or executing the merger agreement, the expenses that may be incurred in connection with consummating the merger, including the expenses payable pursuant to the merger agreement, the potential synergies that may be achieved as a result of the merger, or the effect of any business or strategic decision or action that has been or will be taken as a result of the merger agreement. As a result, there can be no assurance that the projections will be realized, and actual results may be materially better or worse than those contained in the projections. The inclusion of this information in this proxy statement should not be regarded as an indication that NIC’s senior management, the NIC board of directors, Cowen, Tyler or any other recipient of this information considered, or now considers, the projections to be material information of NIC, or necessarily predictive of actual future results, nor should it be construed as financial guidance, and it should not be relied upon as such. The summary of the projections is not included in this proxy statement in order to induce any stockholder to vote for the proposal to adopt the merger agreement or any of the other proposals to be voted on at the Special Meeting or to influence any stockholder to make any investment decision with respect to the merger, including whether or not to seek appraisal rights with respect to the shares of NIC common stock.

The projections should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding NIC contained in NIC’s public filings with the SEC. The projections were reviewed by NIC’s senior management with, and considered by, the NIC board of directors in connection with its evaluation and approval of the merger and were relied upon by Cowen for purposes of its financial analyses and opinion, as described more fully in the sections entitled “The Merger (Proposal 1)—Recommendation of the NIC Board of Directors and Reasons for the Merger” beginning on page 36 of this proxy statement and “The Merger (Proposal 1)—Opinion of Financial Advisor” beginning on page 41 of this proxy statement.

Except to the extent required by applicable federal securities laws, we do not intend, and expressly disclaim any responsibility to update or otherwise revise the forecasts to reflect circumstances existing after the date when we prepared the projections or to reflect the occurrence of future events or changes in general economic or industry conditions, even in the event that any of the assumptions underlying the projections are shown to be in error. We can give no assurance that, had our projections been prepared either as of the date of the merger agreement or as of the

date of this proxy statement, similar estimates and assumptions would be used. Neither NIC nor any of its affiliates, directors, officers, advisors or other representatives has made or makes any representation to any of our stockholders or any other person regarding the ultimate performance of NIC compared to the information contained in our projections or that our projections will be achieved.

In light of the foregoing factors and the uncertainties inherent in the projections and considering that the Special Meeting will be held several months after the projections were prepared, stockholders are cautioned not to rely on the projections included in this proxy statement.

Certain of the measures included in the projections may be considered non-GAAP financial measures, as noted below. These non-GAAP financial measures are useful to investors and management in understanding current profitability levels and liquidity that may serve as a basis for evaluating future performance and facilitating comparability of results. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by NIC may not be comparable to similarly titled amounts used by other companies. The non-GAAP financial measures used in the forecasts were relied upon by Cowen for purposes of its financial analyses and opinion and by the NIC board of directors in connection with its consideration of the merger. Financial measures provided to a financial advisor are excluded from the definition of non-GAAP financial measures and, therefore, are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure.

Below is a summary of the projections prepared by senior management of NIC and provided to the NIC board of directors and Cowen and, with respect to portions of the projections, Tyler, prior to the execution of the merger agreement. Certain estimated financial information for fiscal year 2020 was also prepared by senior management of NIC and provided to the NIC board of directors, Cowen and Tyler prior to the execution of the merger agreement.

In considering the recommendation by the NIC board of directors that NIC stockholders vote to adopt the merger agreement, stockholders should be aware that the directors and executive officers of NIC have certain interests in the merger that may be different from, or in addition to, the interests of NIC stockholders generally. The members of the NIC board of directors were aware of these interests in evaluating the merger agreement and the merger and in recommending that NIC stockholders adopt the merger agreement. These interests may present such directors and executive officers with actual or potential conflicts of interest and these interests are described in this section and the section entitled “Advisory Vote on Specified Compensation (Proposal 2)—Golden Parachute Compensation” beginning on page 80 of this proxy statement.

For the numerical disclosure in this section of this proxy statement, we have assumed a closing date of March 31, 2021. March 31, 2021 is an illustrative date used solely for purposes of this specified disclosure and is not intended to indicate that the closing will or will not occur on such date. This description and the tables below assume that NIC grants no new NIC restricted stock awards prior to the closing to NIC’s directors or executive officers.

Each NIC restricted stock award that is outstanding and held by a non-employee director of NIC will become fully vested immediately prior to the effective time and will be converted into the right to receive the merger consideration. The following table shows, with respect to each individual who served as a non-employee director of NIC at any point in time on or following January 1, 2020 and who, as of the close of business on February 26, 2021, held NIC restricted stock awards: (1) the number of NIC shares underlying NIC restricted stock awards that will remain unvested as of March 31, 2021 and (2) the total expected value of such NIC restricted stock awards as of the effective time, based on an NIC stock price of $34.00 per share.

At the effective time, each assumed RSA will be assumed by Tyler and converted into a Tyler restricted stock award on the same terms and conditions (including those relating to accelerated vesting upon a termination of employment in connection with or following the effective time) as applicable to such assumed RSA immediately prior to the effective time, as converted into a number of shares of Tyler common stock of equivalent value at the effective time.

Each outstanding NIC restricted stock award that vests solely based on the achievement of performance goals will automatically vest in full and be cancelled and converted into the right to receive, with respect to each share of NIC common stock subject to such NIC restricted stock award (as determined in accordance with the applicable award agreement), the merger consideration, less all applicable withholding and other authorized deductions. Pursuant to the applicable award agreements, and assuming a closing date of March 31, 2021, performance-based NIC restricted stock awards granted in 2021 will vest at target level performance and performance-based NIC restricted stock awards granted in 2019 and 2020 will vest based on actual performance levels, as if the applicable performance period ended on December 31, 2020.

The following table shows, with respect to each individual who served as an executive officer of NIC at any point in time on or following January 1, 2020 and who, as of the close of business on February 26, 2021, held NIC restricted stock awards: (1) the number of NIC shares underlying both time- and performance-based NIC restricted stock awards that will remain unvested as of March 31, 2021 and (2) the total expected value of such NIC restricted stock awards as of the effective time, based on an NIC stock price of $34.00 per share. For the treatment of NIC restricted stock awards under the executive officers’ employment agreements, please see the descriptions below under the heading “The Merger (Proposal 1)—Interests of NIC Directors and Executive Officers in the Merger—Treatment of NIC Restricted Stock Awards—Employment Agreements with Executive Officers.”

On February 5, 2021, William A. Van Asselt and Elizabeth Thomas each received a one-time cash bonus of $250,000, less all applicable withholding and other authorized deductions, in recognition of their contributions to NIC during the period of time that NIC was engaged in the consideration of the merger agreement.

In accordance with the merger agreement, on March 2, 2021, NIC granted cash-based retention awards in an amount equal to $250,000 per individual to each of Jayne Friedland Holland, William Van Asselt, Brian Anderson, Doug Rogers, Elizabeth Proudfit, and Elizabeth Thomas, in order to reward them for their efforts in consummating the transactions contemplated by the merger agreement and to incentivize them to continue to assist in bringing the transactions to a successful closing. Each retention bonus award will be paid in cash, less all applicable taxes and other authorized deductions, on the closing and will be contingent upon the occurrence of the closing and the executive’s continued employment with NIC on the closing date.

NIC is party to an employment agreement with each of its executive officers. Each of these employment agreements has an initial three-year term that will automatically be extended for successive three-year periods thereafter unless either NIC or the executive gives a written notice at least six months prior to the end of the applicable term.

Pursuant to each employment agreement, the executive officers have agreed to restrictions on the use of confidential information and, for a period of two years following any termination of employment, not to compete with NIC. The payment of all severance benefits is subject to the execution and non-revocation of a general release.

Each employment agreement provides for severance benefits payable to the executive officer in connection with a termination without “cause” or resignation for “good reason” (which we refer to as a “covered termination”) ending 18 months following a change in control of NIC. Under each employment agreement, severance will be payable in a lump sum amount equal to: (1) two times annual base salary then in effect, (2) two times the largest cash award received by the executive under the NIC annual incentive plan during the immediately preceding three annual incentive periods and (3) 150% of NIC’s portion of the annual costs (determined as of the date of termination) associated with providing the executive and eligible family members with medical and health benefits coverage under NIC’s group health plans. The executive officers would also be entitled to a cash payment under NIC’s annual incentive plan for the year of the covered termination based on target level performance.

The executive officer employment agreements also provide that in the event of a covered termination occurs, the outstanding NIC restricted stock awards will accelerate in full, with performance-based equity awards vesting at target level performance.

No executive officer is entitled to receive any excise tax gross-up under Sections 280G and 4999 of the Code. In the event that any payments would constitute a “parachute payment” within the meaning of Section 280G of the Code, such payments will be reduced so that no portion of the payments will be subject to the excise tax imposed by Section 4999 of the Code.

The following table shows, as of the effective time, with respect to each executive officer who served as an executive officer of NIC at any point in time on or following January 1, 2020, the value of the severance that would be payable pursuant to the employment agreements, assuming a covered termination in connection with the merger, assuming a closing date of March 31, 2021. For the estimated value of NIC restricted stock awards held by the executive officers of NIC, please see the descriptions above under the heading “Treatment of NIC Restricted Stock Awards—Treatment of NIC Restricted Stock Awards held by Executive Officers.”

As noted in the section above entitled “The Merger (Proposal 1)—Background of the Merger” beginning on page 28 of this proxy statement, prior to the signing of the merger agreement there were discussions between NIC and Tyler regarding Tyler’s desire to retain NIC’s senior management team post-closing and Tyler’s intention to make available a pool of stock incentives to members of NIC’s senior management team to ensure a smooth transition and integration period. However, as of the date of this proxy statement, none of the executive officers of NIC have entered into any agreement or understanding with Tyler regarding the potential terms of their individual employment arrangements following the consummation of the merger or the right to participate in any Tyler equity incentive compensation program.

See the section entitled “The Merger Agreement—Directors’ and Officers’ Indemnification and Insurance” beginning on page 71 of this proxy statement, for a summary of the obligations of the surviving corporation with respect to insurance indemnification of directors and executive officers after the effective time.

See the section entitled “The Merger Agreement—Employee Matters” beginning on page 74 of this proxy statement, for a summary of certain post-closing covenants related to compensation and employee benefit arrangements.

Tyler represented to NIC in the merger agreement that it will have, at the closing, access to all of the funds that are necessary for Tyler to consummate the transactions contemplated by the merger agreement, including payment of the aggregate merger consideration to NIC stockholders and all other required payments payable in connection with the transactions contemplated by the merger agreement. In connection with its entry into the merger agreement, Tyler obtained a commitment from Goldman Sachs Bank USA for a $1.6 billion 364-day senior unsecured bridge loan facility, closing of which is subject to customary conditions. Tyler expects to finance the merger using a combination of new debt and cash on Tyler’s balance sheet. The consummation of the merger is not conditioned upon Tyler’s or Merger Sub’s receipt of financing.

The following summary discusses the material U.S. federal income tax consequences of the merger to holders of shares of NIC common stock. This discussion is based on the Code, applicable Treasury regulations promulgated under the Code, administrative interpretations, judicial decisions and administrative rulings as in effect as of the date of this proxy statement, all of which may change, possibly with retroactive effect. This summary is for the general information of the holders of shares of NIC common stock only and does not purport to be a complete analysis of all potential tax effects of the merger.

This discussion addresses only the consequences of the exchange of shares of NIC common stock held as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment). It does not address all aspects of U.S. federal income taxation that may be important to an NIC stockholder in light of the NIC stockholder’s particular circumstances, or to an NIC stockholder that is subject to special rules, such as, without limitation:

For purposes of this discussion, a “U.S. holder” is a beneficial owner of shares of NIC common stock that is for U.S. federal income tax purposes:

A “non-U.S. holder” is a beneficial owner of shares of NIC common stock that is neither a U.S. holder nor a partnership (nor an entity treated as a partnership) for U.S. federal income tax purposes.

If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of NIC common stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A partner in a partnership holding shares of NIC common stock should consult its tax advisors.

This discussion of the material U.S. federal income tax consequences of the merger is not a complete description of all potential U.S. federal income tax consequences of the merger. This discussion does not address tax consequences that may vary with, or are contingent on, individual circumstances. In addition, it does not address any U.S. state or local or any non-U.S. tax consequences of the merger or the potential application of the Medicare contribution tax on net investment income. Accordingly, each NIC stockholder should consult its tax advisor to determine the particular U.S. federal, state or local or non-U.S. income or other tax consequences to it of the merger.

The receipt of the merger consideration by U.S. holders pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S. holder will recognize taxable capital gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received in the merger and (2) such U.S. holder’s adjusted tax basis in its shares of NIC common stock exchanged therefor. A U.S. holder’s adjusted tax basis in a particular share of NIC common stock generally will equal the price the U.S. holder paid for such share of NIC common stock.

If a U.S. holder’s holding period in the shares of NIC common stock surrendered in the merger is greater than one year as of the date of the merger, the capital gain or loss will be long-term capital gain or loss. Long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of a capital loss recognized in connection with the merger is subject to limitations under the Code. If a U.S. holder acquired different blocks of shares of NIC common stock at different times or different prices, such U.S. holder must determine its adjusted tax basis and holding period separately with respect to each block of shares of NIC common stock that it holds.

The receipt of the merger consideration by a non-U.S. holder pursuant to the merger will not be subject to U.S. federal income tax unless:

Gain described in the first bullet point above will be subject to tax on a net income basis in the same manner as if the non-U.S. holder were a U.S. holder (unless an applicable income tax treaty provides otherwise). Additionally, any gain described in the first bullet point above of a non-U.S. holder that is a corporation also may be subject to an additional “branch profits tax” at a 30% rate (or lower rate provided by an applicable income tax treaty). A non-U.S. holder described in the second bullet point above will be subject to tax at a rate of 30% (or a lower rate provided by an applicable income tax treaty) on any capital gain realized, which may be offset by U.S.-source capital losses recognized in the same taxable year. If the third bullet point above applies to a non-U.S. holder, capital gain recognized by such holder will be subject to tax at generally applicable U.S. federal income tax rates. We believe that we are not, and we do not anticipate becoming, a “United States real property holding corporation.” However, because the determination of whether we are a “United States real property holding corporation” depends on the fair market value of our United States real property interests relative to the fair market value of our global real property interests and other business assets, there can be no assurance that we do not currently constitute or will not become a “United States real property holding corporation.” Non-U.S. holders owning (actually or constructively) more than 5% of NIC common stock should consult their own tax advisors regarding the U.S. federal income tax consequences of the merger.

Payments of cash made in exchange for shares of NIC common stock pursuant to the merger may be subject, under certain circumstances, to information reporting and backup withholding (currently at a rate of 24%). To avoid backup withholding, a U.S. holder that does not otherwise establish an exemption should complete and return an IRS Form W-9, certifying under penalties of perjury that such U.S. holder is a “United States person” (within the meaning of the Code), that the taxpayer identification number provided is correct and that such U.S. holder is not subject to backup withholding. To avoid backup withholding, a non-U.S. holder is required to establish an exemption, for example, by completing and providing to the applicable withholding agent the appropriate IRS Form W-8 for the non-U.S. holder, in accordance with the instructions thereto.

Any amount withheld under the backup withholding rules will be allowed as a refund or credit against the U.S. federal income tax liability of an NIC stockholder, provided the required information is timely furnished to the IRS. The IRS may impose a penalty upon an NIC stockholder that fails to provide the correct taxpayer identification number.

Under the merger agreement, the merger cannot be completed until any applicable waiting period under the HSR Act has expired or been terminated. NIC and Tyler made the necessary filings with the FTC and the Antitrust Division of the DOJ on February 23, 2021, as a result of which, and as of the date of this proxy statement, the applicable waiting period under the HSR Act is scheduled to expire on March 25, 2021, at 11:59 p.m., Eastern Time, unless otherwise earlier terminated or extended if the DOJ or FTC requests additional information and documentary material.

Even after the applicable waiting period under the HSR Act expires or is terminated, the FTC and the Antitrust Division of the DOJ retain the authority to challenge the merger on antitrust grounds before or after the merger is completed. Likewise, at any time before or after the consummation of the merger, a U.S. state or a foreign governmental authority with jurisdiction over the parties could take such action under antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the merger, to rescind the merger or to seek divestiture of particular assets. Private parties also may seek to take legal action under the antitrust laws under certain circumstances. Neither NIC nor Tyler can provide assurance that any action under antitrust laws will not result in the delay or abandonment of the merger.

Under the merger agreement, NIC and Tyler are required to use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws consummate the transactions contemplated by the merger agreement as soon as practicable, including:

Notwithstanding the foregoing, none of Tyler, Merger Sub or any of Tyler’s other subsidiaries is required to, and NIC may not and may not permit any of its subsidiaries to, without the prior written consent of Tyler, become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement or order to (1) sell, license, assign, transfer, divest, hold separate or otherwise dispose of any assets, business or portion of business of NIC, the surviving corporation, Tyler, Merger Sub or any of their respective subsidiaries, (2) conduct, restrict, operate, invest or otherwise change the assets, the business or portion of the business of NIC, the surviving corporation, Tyler, Merger Sub or any of their respective subsidiaries or (3) impose any restriction, requirement or limitation on the operation of the business or portion of the business of NIC, the surviving corporation, Tyler, Merger Sub or any of their respective subsidiaries (in the case of each of clauses (1), (2) and (3), if any such action would reasonably be expected to, individually or in the aggregate, adversely impact Tyler, NIC or their respective subsidiaries in a manner or amount that is material relative to the value of NIC and its subsidiaries, taken as a whole). However, if requested by Tyler, NIC or its subsidiaries will become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any such requirement, condition, limitation, understanding, agreement or order so long as such requirement, condition, limitation, understanding, agreement or order is only binding on NIC or its subsidiaries in the event the merger is completed. In addition, Tyler, Merger Sub and NIC will use their reasonable best efforts not to take any action after the date of the merger agreement that would reasonably be expected to materially delay or prevent the obtaining of any permission, approval or consent from any governmental authority necessary to be obtained prior to completing the merger. For additional information, see the section entitled “The Merger Agreement—HSR and Other Regulatory Approvals” beginning on page 72 of this proxy statement.

If the merger is completed, NIC common stock will be de-listed from Nasdaq and de-registered under the Exchange Act. As such, following completion of the merger and such de-registration, NIC will no longer file periodic reports with the SEC on account of NIC common stock.

In connection with the merger, as of March 16, 2021, the date immediately prior to the filing date of this proxy statement, two lawsuits have been filed in the United States District Court for the District of Delaware against NIC and its directors. The lawsuits are captioned Stein v. NIC Inc., et al, No. 1:21-cv-00330 (filed on March 3, 2021) and Starks v. NIC Inc., et al, No. 1:21-cv-00335 (filed on March 4, 2021).

The complaints generally allege that the preliminary proxy statement filed by NIC on March 2, 2021 fails to disclose allegedly material information in violation of Sections 14(a) and 20(a) of the Exchange Act, and other securities laws, rules, and regulations. The alleged omissions relate to (i) certain financial projections of NIC, and (ii) NIC's financial advisor and certain of its financial analyses. The complaints seek, among other things, to enjoin NIC from consummating the merger, or in the alternative, rescission of the merger.

NIC believes that the allegations in the complaints are without merit. Additional lawsuits arising out of the merger may also be filed in the future.

Below is a summary of the material provisions of the merger agreement, a copy of which is attached to this proxy statement as Annex A and which is incorporated by reference into this proxy statement. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. We encourage you to read the merger agreement in its entirety carefully, as the rights and obligations of the parties thereto are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.

The following summary of the Agreement and Plan of Merger, dated as of February 9, 2021, by and among NIC, Tyler and Merger Sub and the copy of the merger agreement attached to this proxy statement as Annex A are intended only to provide information regarding the terms of the merger agreement. The merger agreement and the related summary are not intended to be a source of factual, business or operational information about NIC, Tyler or Merger Sub, and the following summary of the merger agreement and the copy thereof included as Annex A are not intended to modify or supplement any factual disclosure about NIC in any documents NIC has or will publicly file with the SEC. The merger agreement contains representations and warranties by, and covenants of, NIC, Tyler and Merger Sub that were made only for purposes of the merger agreement and as of specified dates. The representations, warranties and covenants in the merger agreement were made solely for the benefit of the parties to the merger agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the merger agreement instead of establishing these matters as facts, and may be subject to contractual standards of materiality or material adverse effect applicable to the contracting parties that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants contained in the merger agreement may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in NIC’s public disclosures.

Additional information about NIC may be found elsewhere in this proxy statement and in NIC’s other public filings. See the section entitled “Where You Can Find Additional Information” beginning on page 93 of this proxy statement.

The merger agreement provides that, at the effective time, Merger Sub will be merged with and into NIC, the separate corporate existence of Merger Sub will cease and NIC will continue as the surviving corporation and as a wholly-owned subsidiary of Tyler. From and after the effective time, all of the property, rights, privileges, immunities, powers, franchises, licenses and authority of NIC and Merger Sub will vest in the surviving corporation, and all of the debts, liabilities, obligations, restrictions and duties of NIC and Merger Sub will become the debts, liabilities, obligations, restrictions and duties of the surviving corporation. At the effective time, the certificate of incorporation of Merger Sub in effect immediately prior to the effective time will be the certificate of incorporation of the surviving corporation, and the bylaws of Merger Sub as in effect immediately prior to the effective time will be the bylaws of the surviving corporation, in each case, until subsequently amended.

The directors and officers of Merger Sub immediately prior to the effective time will, from and after the effective time, be the directors and officers, respectively, of the surviving corporation, until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

Under the merger agreement, the closing of the merger will take place virtually by exchange of documents and signatures at 9:00 a.m., Central Time, on the second (2^nd) business day after the satisfaction or, to the extent permitted by applicable law, waiver of the last of the conditions to the merger to be satisfied or waived, (other than any such conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of such conditions at the closing), unless another date or place is agreed to in writing by Tyler and NIC. For more information on the conditions to the merger, please see the section entitled “The Merger Agreement—Conditions to the Merger.”

As promptly as practicable on the closing date, the parties will file with the Secretary of State of the State of Delaware a certificate of merger with respect to the merger, executed in accordance with the DGCL, and make any other filings and recordings required to be made under the DGCL in connection with the merger. The merger will become effective at such date and time as the certificate of merger is filed with the Secretary of State of the State of Delaware.

At the effective time, by virtue of the merger and without any action on the part of any party or any holder of any shares of NIC common stock or any capital stock of Merger Sub: