Exhibit 10.42

BLUCORA, INC.

NONEMPLOYEE DIRECTOR COMPENSATION PROGRAM

(effective as of January 1, 2014)

The directors of Blucora, Inc. (the “Company”) who are not employees of the
Company or its affiliates (each, an “Eligible Director” and collectively,
“Eligible Directors”) shall be entitled to receive the following cash and equity
compensation in consideration of the services provided by them as members of the
Board of Directors of the Company (the “Board”) and its committees commencing
effective as of January 1, 2014.

 

A. CASH COMPENSATION

The following provisions set forth the terms of the Company’s cash compensation
program for Eligible Directors (the “Cash Compensation Program”).

 

  1. Retainers

Eligible Directors shall be paid cash retainers as follows (the “Retainers”):

 

  •   All Eligible Directors shall receive an annual cash retainer of $20,000
(payable in equal quarterly installments of $5,000) for their services on the
Board.

 

  •   The Chairperson of the Board shall receive an additional annual cash
retainer of $25,000 (payable in equal quarterly installments of $6,250).

 

  •   The Chairperson of the Audit Committee shall receive an additional annual
cash retainer of $14,000 (payable in equal quarterly installments of $3,500).

 

  •   Each of the other members of the Audit Committee shall receive an
additional annual cash retainer of $4,000 (payable in equal quarterly
installments of $1,000).

 

  •   The Chairperson of the Compensation Committee shall receive an additional
annual cash retainer of $8,000 (payable in equal quarterly installments of
$2,000).

 

  •   Each of the other members of the Compensation Committee shall receive an
additional annual cash retainer of $3,000 (payable in equal quarterly
installments of $750).

 

  •   The Chairperson of the Nominating and Governance Committee shall receive
an additional annual cash retainer of $5,000 (payable in equal quarterly
installments of $1,250).

 

  •   Each of the other members of the Nominating and Governance Committee shall
receive an additional annual cash retainer of $2,000 (payable in equal quarterly
installments of $500).

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  •   Each member of the Mergers and Acquisitions Committee shall receive an
annual cash retainer of $4,000 (payable in equal quarterly installments of
$1,000).

The Retainers shall be paid in advance in equal quarterly installments for
services rendered during each quarter of the calendar year and shall be due and
payable as soon as practicable after the first day of the quarter in which such
services are to be rendered (i.e., as soon as practicable after
January 1, April 1, July 1 and October 1). Eligible Directors shall be entitled
to full payment for each quarter of service so long as such Eligible Directors
are serving in the capacities for which they receive such payments on the first
day of each such quarter. In the event that new directors or committee chairs or
members who are Eligible Directors are appointed or elected during the course of
any quarter, payments to any such newly elected Eligible Directors shall be
pro-rated to reflect the actual number of days served during the quarter in
which they were elected or appointed.

 

  2. Expenses

Eligible Directors shall also be reimbursed, as has been customary, for
reasonable expenses incurred in connection with travel to and from Board or
committee meetings or other functions for the benefit of the Company.

 

B. EQUITY COMPENSATION

The following provisions set forth the terms of the Company’s equity
compensation program for Eligible Directors (the “Equity Compensation Program”)
under the Restated 1996 Flexible Stock Incentive Plan, as may be amended and
restated from time to time (the “Plan”), which terms are intended to supplement,
not alter or change, the provisions of the Plan, and in the event of any
inconsistency between the terms of the Equity Compensation Program and the terms
of the Plan, the Plan shall govern.

 

  1. Initial Awards

a. On the date of each Eligible Director’s initial election or appointment to
the Board (the “Initial Appointment Date”), such Eligible Director shall
automatically receive the following initial awards (the “Initial Awards”):

 

  •   a nonqualified stock option (an “NSO”) having an initial value of $45,000
(the “Initial NSO”); and

 

  •   restricted stock units (“RSUs”) having an initial value of $105,000
(the “Initial RSUs”).

 

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b. On the Initial Appointment Date, the values of the Initial Awards, as set
forth above, shall be converted as follows:

 

  •   The value of the Initial NSO shall be converted into an appropriate
equivalent number of shares of the Company’s common stock (the “Common Stock”)
subject to the Initial NSO by (i) dividing the value of the Initial NSO by the
closing selling price of the Common Stock, as reported on the NASDAQ Global
Select Market (“NASDAQ”) on the Initial Appointment Date, or if there is no such
reported price for the Common Stock on the Initial Appointment Date, then such
price on the last preceding date for which such price exists (the “Initial
Appointment Date Closing Price”), then (ii) multiplying the result by a factor
(not to exceed 4:1) representing the difference in value between an NSO and an
RSU, under the Company’s equity valuation methodology, on the last business day
of the month immediately preceding the month in which the Initial Appointment
Date occurs or if the Initial Appointment Date occurs on the last business day
of a month, on the Initial Appointment Date, with any resulting fractional share
of Common Stock subject to the Initial NSO rounded down to the nearest whole
share.

 

  •   The value of the Initial RSUs shall be converted into the appropriate
equivalent number of Initial RSUs, with each unit (a “Unit”) of the Initial RSUs
representing the right to receive one share of Common Stock, by dividing the
value of the Initial RSUs by the Initial Appointment Date Closing Price, with
any resulting fractional Unit rounded down to the nearest whole Unit.

c. The Initial Awards shall vest according to the following schedule and be
subject to the other terms and conditions described below:

 

  •   The Initial Awards shall vest annually over three years on the anniversary
of the Initial Appointment Date, provided that the Eligible Director is a member
of the Board on such dates.

 

  •   The exercise price of the Initial NSO shall be the Initial Appointment
Date Closing Price, which is also the “fair market value” of the Common Stock on
the Initial Appointment Date.

 

  •   The Initial NSO shall expire on the seven-year anniversary of the Initial
Appointment Date, unless the Initial NSO expires sooner pursuant to its terms.

 

  •   The Initial Awards shall be subject to the terms and conditions of the
Plan and shall have such other terms as are set forth in the Company’s standard
forms of Eligible Director equity agreements in use at such time and as
appropriately modified to reflect the Initial Awards.

 

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  2. Annual Awards

a. Each year on the date of the annual meeting (the “Annual Meeting”) of the
Company’s stockholders (the “Annual Meeting Date”), each Eligible Director who
is a duly elected or appointed member of the Board immediately following the
conclusion of the Annual Meeting shall automatically receive the following
annual awards (the “Annual Awards”):

i. All Eligible Directors, including any Eligible Director who is Chairperson of
the Board and any Eligible Director who may initially have been elected or
appointed to the Board on the Annual Meeting Date, shall automatically receive:

 

  •   an NSO having an initial value of $45,000 (the “Annual Eligible Director
NSO”); and

 

  •   RSUs having an initial value of $105,000 (the “Annual Eligible Director
RSUs”).

ii. In addition, any Eligible Director who is also Chairperson of the Board
immediately following the conclusion of the Annual Meeting shall also
automatically receive:

 

  •   an NSO having an initial value of $15,000 (the “Annual Chairperson NSO”);
and

 

  •   RSUs having an initial value of $35,000 (the “Annual Chairperson RSUs”).

b. On the Annual Meeting Date, the values of the Annual Awards, as set forth
above, shall be converted as follows:

 

  •  

The values of the Annual Eligible Director NSO and the Annual Chairperson NSO
(the “Annual NSOs”) shall be converted into an appropriate equivalent number of
shares of Common Stock subject to the Annual NSOs by (i) dividing the value of
the Annual NSOs by the closing selling price of the Common Stock, as reported on
NASDAQ on the Annual Meeting Date, or if there is no such reported price for the
Common Stock on the Annual Meeting Date, then such price on the last preceding
date for which such price exists (the “Annual Meeting Date Closing Price”), then
(ii) multiplying the result by a factor (not to exceed 4:1) representing the
difference in value between an NSO and an RSU, under the Company’s equity
valuation methodology, on the last business day of the month immediately
preceding the month in which the Annual Meeting Date occurs or if the Annual
Meeting Date occurs on the last business day of a month, on the Annual Meeting
Date, with any resulting fractional share of Common Stock subject to the Annual
NSOs rounded down to the nearest whole share.

 

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  •   The values of the Annual Eligible Director RSUs and the Annual Chairperson
RSUs (the “Annual RSUs”) shall be converted into the appropriate equivalent
number of Annual RSUs, with each Unit of the Annual RSUs representing the right
to receive one share of Common Stock, by dividing the value of the Annual RSUs
by the Annual Meeting Date Closing Price, with any resulting fractional Unit
rounded down to the nearest whole Unit.

c. The Annual Awards shall vest according to the following schedule and be
subject to the other terms and conditions described below:

 

  •   The Annual Awards shall vest in full (100%) on the earlier to occur of the
one-year anniversary of the Annual Meeting Date or the date of the next Annual
Meeting, provided that, with respect to the Annual Eligible Director NSO and the
Annual Eligible Director RSUs, the Eligible Director is a member of the Board on
such dates, and with respect to the Annual Chairperson NSO and the Annual
Chairperson RSUs, the Eligible Director is Chairperson of the Board on such
dates.

 

  •   The exercise price of the Annual NSOs shall be the Annual Meeting Date
Closing Price, which is also the “fair market value” of the Common Stock on the
Annual Meeting Date.

 

  •   The Annual NSOs shall expire on the seven-year anniversary of the Annual
Meeting Date, unless the Annual NSO expires sooner pursuant to its terms.

 

  •   The Annual Awards shall be subject to the terms and conditions of the Plan
and shall have such other terms as are set forth in the Company’s standard forms
of Eligible Director equity agreements in use at such time and as appropriately
modified to reflect the Annual Awards.

d. In the event that an Eligible Director is initially elected or appointed to
the Board on any date other than the Annual Meeting Date, such Eligible Director
shall, instead, automatically receive the Annual Eligible Director NSO and the
Annual Eligible Director RSUs on the Initial Appointment Date; provided,
however, that (i) the values of the Annual Eligible Director NSO and the Annual
Eligible Director RSUs, as set forth above, shall be prorated to reflect the
number of days that such Eligible Director will serve on the Board based on a
period of time commencing as of the Initial Appointment Date and ending on the
one-year anniversary of the last preceding Annual Meeting Date (the “Prorated
Annual Awards”); (ii) the values of the Prorated Annual Awards shall be
converted on the Initial Appointment Date in the same manner as the Initial
Awards;

 

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(iii) the exercise price of the prorated Annual Eligible Director NSO (the
“Prorated Annual NSO”) shall be the Initial Appointment Date Closing Price,
which is also the “fair market value” of the Common Stock on the Initial
Appointment Date; and (iv) the Prorated Annual NSO shall expire on the
seven-year anniversary of the Initial Appointment Date, unless the Prorated
Annual NSO expires sooner pursuant to its terms. In all other respects, the
terms and conditions of the Prorated Annual Awards, including, without
limitation, the vesting schedules of the Prorated Annual Awards, shall be the
same as the Annual Awards granted on the last preceding Annual Meeting Date.

 

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