NATIONAL RESEARCH CORPORATION

NONQUALIFIED STOCK OPTION AGREEMENT
(Associates with less than 1 year of service)

        THIS AGREEMENT, made and entered into as of this _ day of ______, ___ by and between NATIONAL RESEARCH CORPORATION, a Wisconsin corporation (the “Company”), and ________________ (the “Optionee”).

W I T N E S S E T H :

        WHEREAS, the Company has adopted the National Research Corporation 2001 Equity Incentive Plan (the “Plan”) to permit options to purchase shares of the Company’s common stock, $.001 par value (“Common Stock”), to be granted to employees of the Company and its Affiliates.

        WHEREAS, the Optionee is employed by the Company and the Company desires him or her to secure or increase his or her stock ownership in the Company in order to increase his or her incentive and personal interest in the welfare of the Company; and

        WHEREAS, the option granted under this Agreement is not intended to constitute an incentive stock option (“Nonqualified Stock Option”), as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

        NOW, THEREFORE, in consideration of the premises and of the covenants and agreements herein set forth, the parties hereby mutually covenant and agree as follows:

        1.     Grant .

            (a)     Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Optionee a Nonqualified Stock Option to purchase from the Company the number of shares of Common Stock (hereinafter referred to as the “Optioned Shares,” and the option to purchase the Optioned Shares referred to as the “Option”), in accordance with the following schedule:

        If the Optionee is not an employee of the Company or an Affiliate on the applicable Grant Date, the grant of an Option pursuant to this paragraph 1(a) on such Grant Date shall immediately terminate and be of no further force or effect.

        2.     Option Price . The price to be paid for the Optioned Shares shall be 100% of the fair market value of such stock on the Grant Date (the “Option Price”), as determined by the Board of Directors of the Company (The “Board”) or Committee.

        3.     Term . The Option shall expire five years from the date of this agreement and shall not be exercisable thereafter.

        4.     Time of Exercise . Except as otherwise provided herein, an Earned Option shall vest and become exercisable according to the following schedule:

        5.     Manner of Exercise and Payment . The Optionee may, subject to the limitations of this Agreement, exercise all or any portion of the Vested Amount by providing written notice to the Company of the Optionee’s intent to exercise the Option, delivered to the Secretary of the Company at its principal office, specifying the number of shares with respect to which the Option is being exercised, accompanied by payment for such shares: (a) in cash or its equivalent; (b) by tendering previously acquired shares of Common Stock valued at their fair market value at the time of exercise, as determined by the Board or Committee; (c) by any combination of (a) and (b); or (d) by delivery (including by facsimile) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the shares and deliver the sale or margin loan proceeds directly to the Company to pay for the Option Price.

        6.     Termination of Employment .

            (a)     If the employment of Optionee terminates by reason of death or disability, as determined by the Board or Committee, then, notwithstanding the provisions of paragraph 4, an Earned Option shall be 100% vested on the date of termination of the Optionee’s employment, and the Optionee (or his or her personal representative) may exercise the Earned Option or any portion thereof during the period of twelve (12) months after termination of the Optionee’s employment; provided , however, that neither the Option nor any portion thereof shall be exercisable after it has expired pursuant to paragraph 3 hereof.

            (b) &nbs