Exhibit 10.3


CLAYTON HOLDINGS, INC.


Amended
and Restated Non-Employee Directors’ Compensation Plan


Cash
Fees


Retainer:


$30,000 annually, with $7,500 payable in arrears on
the last business day of each month following the end of each calendar quarter
(the “Payment Date”) for service during such prior quarter.


Meeting Fees:


$1,000 per meeting, payable in arrears on the Payment
Date for meetings held during the prior quarter.


Conference Call and
Committee Meeting Fees:


$500 per conference call or committee meeting, payable
in arrears on the Payment Date for all conference calls and committees meeting
held during the prior quarter.


Chair Fees:


$10,000 annually for chairs of audit committee, with
$2,500 payable in arrears on the Payment Date for service during the prior
quarter.


$5,000 annually for chairs of the nominating and
corporate governance or compensation committees, with $1,250 payable in arrears
on the Payment Date for service during the prior quarter.


All
Cash Fees may be deferred
at the election of each Non-Employee Director pursuant to the Company’s
Non-Employee Directors’ Deferred Compensation Program. All deferred fees are
deemed invested in Deferred Stock Units payable in shares of common stock of
the Company when the Non-Employee Director ceases to serve on the Board.


Equity


Initial
Equity Grant for a Non-Employee Director:


On the effective date of a new director’s appointment
to the Board, such appointee shall receive a grant of restricted Deferred Stock
Units on such date (the “Initial Award”). 
The number of units to be granted in the Initial Award shall be equal to
$60,000 divided by the Closing Price (as defined below). These units shall be
fully vested on the anniversary date of such grant, subject to service on the
Board on such date.













 


Second Equity Grant for a
Non-Employee Director:


On the first anniversary of a new director receiving
the Initial Award, provided that such appointee is still serving on the Board,
such new director shall receive a grant of restricted Deferred Stock Units on
such date (the “Second Award”).  The
number of units to be granted in the Second Award shall be equal to $30,000
divided by the Closing Price, subject to a pro rata reduction for the number of
days between the grant date of the Second Award and the estimated date of the
subsequent annual meeting of the stockholders. 
These units shall be fully vested on the date of such next annual
meeting of stockholders, subject to service on the Board on such date.


Subsequent Annual Equity
Grant for each Non-Employee Director:


Each Non-Employee Director serving on the Board on the
date this Plan is adopted shall be eligible to receive the Subsequent Annual
Award (as defined below) subsequent to the 2007 annual meeting of
stockholders.  Any Non-Employee Director
first appointed to the Board after the date this Plan is adopted shall be
eligible to receive the Subsequent Annual Award after such director has
received the Initial Award and the Second Award. Each Non-Employee Director
serving on the Board on the fifth business day after each annual meeting of
stockholders, shall, once eligible in accordance with the foregoing, receive a
grant of restricted Deferred Stock Units on such date (the “Subsequent Annual
Award”).  The number of units to be
granted in the Subsequent Annual Award shall be equal to $30,000 divided by the
Closing Price.  These units shall be
fully vested on the anniversary date of grant or the date of the next annual
meeting of stockholders, whichever is earlier, subject to service on the Board
on such date.


Definition


“Closing Price” shall mean the reported closing price
of the Company’s common stock on the Nasdaq Global Market on any grant date, or
the preceding business date if there are no market quotations on such date.


*              *              *


ADOPTED BY THE BOARD OF DIRECTORS
on July 25, 2007 and amends and restates in its entirety that Non-Employee
Directors’ Compensation Plan adopted on January 30, 2007.



 2