**Exhibit 10.3**

 

**ENERNOC, INC.**

**NON-EMPLOYEE DIRECTOR COMPENSATION POLICY**

 

The Board ofDirectors of EnerNOC, Inc. (the “Company”) has approved the followingpolicy which establishes compensation to be paid to non-employee directors ofthe Company, to provide an inducement to obtain and retain the services ofqualified persons to serve as members of the Company’s Board of Directors.  Each such director will receive ascompensation for his or her services (i) a stock option grant upon his orher initial appointment or election to the Board of Directors of the Companyand (ii) an annual fee payable in cash and/or stock, all as further setforth herein.

 

**ApplicablePersons**

 

This Policy shallapply to each director of the Company who (a) is not an employee of the Companyor any Affiliate, (b) is not associated with the Company’s principalstockholders, and (c) does not receive compensation as a consultant****to the Company or any Affiliate unlesssuch compensation is received solely for services provided as a member of theScientific Advisory Board (each, an “Outside Director”).  Affiliate shall mean a corporation which is adirect or indirect parent or subsidiary of the Company, as determined pursuantto Section 424 of the Internal Revenue Code of 1986, as amended.

 

**StockOption Grant Upon Initial Appointment or Election as a Director**

 

Number of Shares

 

Each new OutsideDirector on the date of his or her initial appointment or election to the Boardof Directors, shall be granted a non-qualified stock option to purchase suchnumber of shares of the Company’s common stock (rounded down to the nearestwhole number so that no fractional shares shall be issued) equal to thequotient of (i) $330,000 divided by (ii) the Black-Scholes value of ashare of the Company’s common stock on the date of grant.

 

Vesting Provision

 

Such option shall befully vested on the grant date.

 

Exercise Price andTerm of Option

 

Each optiongranted shall have an exercise price per share equal to the Fair Market Value(as defined in the Company’s then applicable stockholder approved stock plan(the “Stock Plan”)) of the shares of common stock of the Company on the date ofgrant of the option, have a term of ten (10) years and shall be subject tothe terms and conditions of the Stock Plan. Each such option grant shall be evidenced by the issuance of anon-qualified stock option agreement.

 

Early Terminationof Option Upon Termination of Service

 

If an OutsideDirector:

 

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a.                                       ceasesto be a member of the Board of Directors for any reason other than death ordisability, any then vested and unexercised options granted to such OutsideDirector may be exercised by the director within a period of three (3) monthsafter the date the director ceases to be a member of the Board of Directors andin no event later than the expiration date of the option; or

 

b.                                      ceasesto be a member of the Board of Directors by reason of his or her death ordisability, any then vested and unexercised options granted to such directormay be exercised by the director (or by the director’s personal representative,or the director’s survivors) within a period of one (1) year after thedate the director ceases to be a member of the Board of Directors and in noevent later than the expiration date of the option.

 

**AnnualFee**

 

Each Outside Directorshall be compensated on an annual basis for providing services to the Companyand will receive each year he or she is in office:

 

·                  afully vested non-qualified stock option to purchase such number of shares ofthe Company’s common stock (rounded down to the nearest whole number so that nofractional shares shall be issued) equal to the quotient of (i) $120,000divided by (ii) the Black-Scholes value of a share of the Company’s commonstock on the date of grant.  Each suchstock option will terminate on the earlier of ten (10) years from the dateof grant or three (3) months after the recipient ceases to serve as a director,except in the case of death or disability, in which event the option willterminate one (1) year from the date of the director’s death ordisability.  The exercise price per shareof these options will be equal to the Fair Market Value of the shares of commonstock of the Company on the date of grant of the option;

·                  a$30,000 annual cash retainer paid in quarterly installments, provided that ifan Outside Director dies, resigns or is removed during any quarter, he or sheshall be entitled to a cash payment on a pro rata basis through his or her lastday of service; and

·                  afee of $1,000 for each board meeting attended in person and a fee of $500 foreach board meeting attended by telephone or by other means of communication.

 

**BoardCommittee Compensation**

 

The chairman andmembers of the Company’s audit, compensation and nominating and governancecommittees will receive annual fees payable in quarterly installments asfollows:

 
| ** **                            | ** ** | **Chairman** | ** ** | **Other Members** | ** ** |
|---------------------------------------|------------|--------------|------------|------------------------|------------|
| Audit committee:                      |       | $            | 20,000     |                   | $          | 10,000 |   |
| Compensation  committee:              |       | $            | 15,000     |                   | $          | 7,500 |   |
| Nominating and  Governance committee: |       | $            | 10,000     |                   | $          | 5,000 |   |

 

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**Expenses**

 

Upon presentation ofdocumentation of such expenses reasonably satisfactory to the Company, eachOutside Director shall be reimbursed for his or her reasonable out-of-pocketbusiness expenses incurred in connection with attending meetings of the Boardof Directors, Committees thereof or in connection with other Board relatedbusiness.

 

**Amendments**

 

The Board ofDirectors shall review this Policy from time to time to assess whether anyamendments in the type and amount of compensation provided herein should beadjusted in order to fulfill the objectives of this Policy.

 

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