Exhibit
10.40


 


FACEBANK
GROUP, INC.


 


OUTSIDE
DIRECTOR COMPENSATION POLICY


 


FaceBank
Group, Inc. (the “Company”) believes that the granting of equity and cash compensation to the members of its
Board of Directors (the “Board,” and members of the Board, the “Directors”) represents an
effective tool to attract, retain and reward Directors who are not employees of the Company (the “Outside Directors”).
This Outside Director Compensation Policy (the “Policy”) is intended to formalize the Company’s policy
regarding cash compensation and grants of equity to its Outside Directors. Notwithstanding the foregoing, solely for purposes
of this Policy, the Company’s Executive Chairman shall be eligible for compensation under this Policy and treated as if
the Executive Chairman was an Outside Director, except that the Executive Chairman will not be eligible for an Initial Award (as
defined below) and cash payments shall be made ratably through payroll, reduced by applicable withholdings.


 


Unless
otherwise defined herein, capitalized terms used in this Policy will have the meaning given such term in the Company’s 2020
Equity Incentive Plan (the “Plan”). Each Outside Director will be solely responsible for any tax obligations
incurred by such Outside Director as a result of the equity and cash payments the Outside Director receives under this Policy.


 


This
Policy will be effective as of adoption by the Board, with such date referred to as the “Effective Date.”


 


1.
Cash Compensation 


 


Annual
Cash Retainer


 


Each
Outside Director will be paid an annual cash retainer of $45,000. There are no per-meeting attendance fees for attending Board
meetings or meetings of any committee of the Board.


 


Chair,
Committee Membership, and Committee Chair Annual Cash Retainer


 


Each
Outside Director who serves as chairman of the Board, chairman of a committee of the Board, or member of a committee of the Board
will be eligible to earn additional annual cash retainers as follows:


 


	Chair of the Board (including
    Executive Chair):	 	$	50,000	 
	 	 	 	 	 
	Chair of Audit Committee:	 	$	24,000	 
	 	 	 	 	 
	Member of Audit Committee	 	 	 	 
	(excluding Committee Chair):	 	$	10,000	 
	 	 	 	 	 
	Chair of Nominating and	 	 	 	 
	Governance Committee	 	$	10,000	 
	 	 	 	 	 
	Member of Nominating and Governance	 	 	 	 
	Committee (excluding Committee Chair):	 	$	5,000	 
	 	 	 	 	 
	Chair of Compensation Committee:	 	$	16,000	 
	 	 	 	 	 
	Member of Compensation Committee	 	 	 	 
	 	 	 	 	 
	(excluding Committee Chair):	 	$	7,500	 



 




    	 	 	 



    	 	 	 



    

 


Payment.
Each annual cash retainer under this Policy will be paid quarterly in arrears on a prorated basis to each Outside Director
who has served in the relevant capacity at any point during the immediately preceding fiscal quarter, and such payment shall be
made no later than thirty (30) days following the end of such immediately preceding fiscal quarter.


 


2.
Equity Compensation


 


Outside
Directors will be entitled to receive all types of Awards (except Incentive Stock Options) under the Plan (or the applicable equity
plan in place at the time of grant), including discretionary Awards not covered under this Policy. All grants of Awards to Outside
Directors pursuant to Section 2 of this Policy will be automatic and nondiscretionary, except as otherwise provided herein, and
will be made in accordance with the following provisions:


 


(a)
No Discretion. No person will have any discretion to select which Outside Directors will be granted any Awards under this
Policy or to determine the number of Shares to be covered by such Awards, except pursuant to Section 7 below.


 


(b)
Initial Awards. Subject to Section 11 of the Plan, effective on the date the person first becomes an Outside Director,
whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy, such Outside Director
automatically will be granted Awards with a Value (as defined below) equal to $330,000 (the “Initial Award”),
provided that the number of Shares covered by each Initial Award will be rounded down to the nearest whole Share. The Initial
Award will be comprised of either Options or Restricted Stock Units (“RSUs”). Until otherwise determined by
the Board, the Initial Award shall be in the form of an Option.


 


If
the Initial Award is an Option, the Initial Award will vest in 36 equal, monthly installments after the grant date, in each case,
provided that the Outside Director continues to serve as a Service Provider through the applicable vesting date.


 


If
the Initial Award is in the form of RSUs, such portion of the Initial Award will vest in 3 annual installments beginning with
the first anniversary after the grant date, in each case, provided that the Outside Director continues to serve as a Service Provider
through the applicable vesting date.


 


In
all cases the Initial Award will accelerate and vest upon a Change in Control, provided that the Outside Director continues to
serve as a Service Provider on the vesting date.


 


For
clarity, a Director who is an Employee who ceases to be an Employee, but who remains a Director, will not receive an Initial Award.


 


(c)
Annual Awards. Subject to Section 11 of the Plan, each Outside Director automatically will be granted a Restricted Stock
Unit Award (an “Annual Award”) with a Value of $228,000, provided that the number of Shares covered by each
Annual Award will be rounded down to the nearest whole Share, which grant will be effective on the date of each annual meeting
of stockholders (each, an “Annual Meeting”), beginning with the first Annual Meeting following the Effective
Date; provided that any Outside Director who is not continuing as a Director following the applicable Annual Meeting will not
receive an Annual Award with respect to such Annual Meeting. Further, an Outside Director will not be eligible for an Annual Award
at an Annual Meeting if he or she has not been a Director for at least 6 months prior to the applicable Annual Meeting. The Annual
Award will be comprised of either Options or RSUs. Until otherwise determined by the Board, the Annual Award shall be in the form
of an Option.


 




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Each
Annual Award will vest as to 100% of the Shares subject thereto upon the earlier of the one (1) year anniversary of the grant
date or the day prior to the Company’s next Annual Meeting occurring after the grant date, in each case, provided that the
Outside Director continues to serve as a Service Provider through the applicable vesting date.


 


The
Annual Award will accelerate and vest upon a Change in Control, provided that the Outside Director continues to serve as a Service
Provider on the vesting date.


 


(c)
Exercise Price. The per Share exercise price for all Options granted under this Policy will be one hundred percent (100%)
of the Fair Market Value on the grant date.


 


(d)
Value. To determine the number of Shares subject to an Initial Award or Annual Award, the specified Value for RSUs will
be divided by the closing trading price of a Share on the grant date, or such other methodology the Board may determine prior
to the grant of the RSUs becoming effective. To determine the number of shares subject to an Option, the number of Shares determined
in the preceding sentence will be multiplied by 2 or such other multiplier that the Board may determine prior to the grant of
an Option being effective.


 


3.
Travel Expenses


 


Each
Outside Director’s reasonable, customary and properly documented travel expenses to attend Board meetings will be reimbursed
by the Company.


 


4.
Additional Provisions


 


All
provisions of the Plan and form of award agreement approved for use under the Plan not inconsistent with this Policy will apply
to Awards granted to Outside Directors.


 


5.
Section 409A


 


In
no event will cash compensation or, or to the extent taxable to the Outside Director, travel reimbursement payments, under this
Policy be paid after the later of (a) the fifteenth (15th) day of the third (3rd) month following the end
of the Company’s fiscal year in which the compensation is earned or expenses are incurred, as applicable, or (b) the fifteenth
(15th) day of the third (3rd) month following the end of the calendar year in which the compensation is
earned or expenses are incurred, as applicable, in compliance with the “short-term deferral” exception under Section
409A of the Internal Revenue Code of 1986, as amended, and the final regulations and guidance thereunder, as may be amended from
time to time (together, “Section 409A”). It is the intent of this Policy that this Policy and all payments
hereunder be exempt from or otherwise comply with the requirements of Section 409A so that none of the compensation to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will
be interpreted to be so exempt or comply.


 


6.
Revisions


 


The
Board in its discretion may at any time change and otherwise revise the terms of the cash compensation granted under this Policy,
including, without limitation, the amount of cash and timing of unearned compensation to be paid on or after the date the Board
determines to make any such change or revision. The Board in its discretion may at any time change and otherwise revise the terms
of Awards granted under this Policy, including, without limitation, the number of Shares subject thereto, for Awards of the same
or different type granted on or after the date the Board determines to make any such change or revision. The Board in its discretion
may at any time suspend or terminate the Policy.


 




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