Exhibit 10.40

SELECTICA, INC.

COMPENSATION PROGRAM
FOR NON-EMPLOYEE DIRECTORS

EFFECTIVE
JANUARY 2, 2009



|A. | Cash Compensation
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| | 1. | Board retainer: $20,000 per year, paid in quarterly installments.
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| | 2. | Committee chair retainer: $10,000 per year ($20,000 per year for the Audit Committee chair), paid in quarterly installments. This includes the chair of a special committee.
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| | 3. | Committee member retainer (other than chair): $5,000 per year, paid in quarterly installments. Only the first committee membership counts for this purpose. Special committees
are treated like the standing committees (Audit, Compensation and Nominating).
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| | 4. | Meeting Fees:
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| | (a) | $1,000 for each meeting of the full Board attended in person.
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| | (b) | $500 for each meeting of the full Board attended by telephone.
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| | (c) | $1,000 for each meeting of a special committee attended in person.
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| | (d) | $500 for each meeting of a special committee attended by telephone.
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| | (e) | No additional compensation for meetings of standing committees.
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Meeting fees are paid quarterly, with retainers.



|B. | Equity Compensation
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| | 1. | Triennial stock option grants: Options to purchase 100,000 shares. The options become exercisable in equal installments on the first three anniversaries of the grant, with
immediate full vesting in the event of a change in control. The options will be granted by the Compensation Committee under the 1999 Equity Incentive Plan (the EIP) in conjunction with the directors initial appointment or election
to the Board and at three-year intervals thereafter (provided that the directors service continues). A director who was in office on August 1, 2006, will commence receiving these option grants on the next three-year anniversary of his or
her initial appointment or election. A director who took office after August 1, 2006, but before December 15, 2006, commenced receiving these option grants on December 15, 2006.
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In the event of a subdivision of the outstanding shares, a declaration of a dividend payable in shares or
a combination or consolidation of the outstanding shares (by reclassification or otherwise) into a lesser number of shares, a corresponding adjustment will automatically be made in the 100,000-share number described above. In the event of a
declaration of an extraordinary dividend payable in a form other than shares in an amount that has a material effect on the price of shares, a recapitalization, a spin-off or a similar occurrence, the Compensation Committee will make such
adjustments as it, in its sole discretion, deems appropriate in the 100,000-share number described above.



| | 2. | Annual restricted stock unit grants: Units equivalent to shares with a market value of $25,000. All of the units vest on the first anniversary of the grant, with immediate
full vesting in the event of a change in control. The units will be settled in the form of an equal number of shares on the first permissible trading date after they vest (or a further deferral could be elected). The units will be granted by the
Compensation Committee under the EIP in conjunction with each Annual Meeting of stockholders. However, in lieu of a grant in conjunction with the 2006 Annual Meeting of stockholders, a grant was made on December 15, 2006.
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|C. | Expenses
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The reasonable expenses incurred by
directors in connection with attendance at Board or committee meetings will be reimbursed upon submission of appropriate substantiation.



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