DETECTION SYSTEMS, INC.

                     NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

                        Adopted by the Board of Directors
                                September 4, 1998

     This is a stock plan pursuant to which options to purchase the Common Stock
of Detection Systems,  Inc., a New York corporation (the "Corporation"),  may be
granted to non-employee directors of the Corporation as partial compensation for
their  service  as  directors.  This  plan  shall be  known as the  Non-Employee
Director  Stock Option Plan (the  "Plan").  The purpose of the Plan is to obtain
and retain the services of qualified persons who are not full-time  employees of
the Corporation to serve as directors.

     SECTION  1.   Administration.   The  Plan  shall  be  administered  by  the
Corporation's Board of Directors (the "Board").  The Board shall, subject to the
provisions of the Plan and Section 9 in particular, grant options under the Plan
and shall  have the power to  construe  the Plan,  to  determine  all  questions
thereunder,  and  to  adopt  and  amend  such  rules  and  regulations  for  the
administration of the Plan as it may deem desirable.

     SECTION 2. Shares  Available.  The Board shall  reserve for the purposes of
this Plan,  out of the  authorized  but  unissued  shares of Common Stock of the
Corporation,  or out of shares of Common Stock held in its  Treasury,  or partly
out of each, as shall be  determined  by the Board,  a total of 50,000 shares of
the Common Stock (or the number and kind of shares of stock or other  securities
which, in accordance with Section 7 of this Plan, shall be substituted for those
shares or to which those shares shall be adjusted).  In the event that an option
granted  under the Plan to any  non-employee  director  expires or is terminated
unexercised as to any shares covered thereby,  the shares not purchased under it
shall thereafter again be available for the purposes of this Plan.

     SECTION 3. Eligibility. Each member of the Corporation's Board of Directors
who is not a full-time  employee of the  Corporation  ("non-employee  director")
shall be eligible to receive stock options under this Plan.

     SECTION 4. Grants and Terms of  Options;  Option  Agreements.  The Board of
Directors may grant options from time to time under this Plan, provided that any
options  granted  prior  to  ratification  of  this  Plan  by the  Corporation's
shareholders  as provided in Section 8 below shall be subject to receipt of that
ratification.  The number of shares  purchasable under each option and all other
terms  and  conditions  of the  option  shall be as  determined  by the Board of
Directors,  provided  that,  unless this Plan is validly  amended as provided in
Section  9 below,  in the case of any  inconsistency  between  this Plan and the
terms and  conditions of any option,  the provisions of this Plan shall prevail.
As soon as  practicable  after  the  grant of an  option  under  the  Plan,  the
Corporation  and the  non-employee  director  shall  enter  into a Stock  Option
Agreement  evidencing the option so granted and its terms and  conditions.  That
agreement  shall be in such form,  consistent  with the Plan, as the Board shall
deem appropriate.
<PAGE>
   SECTION 5.  Exercise and Term of Options.

     (a) Options  granted under the Plan shall be exercisable as provided in the
terms of the option grant and the related Stock Option Agreement.

     (b) The  option  exercise  price of the shares of Common  Stock  subject to
options shall be 100% of the market value of the shares on the day the option is
granted.  The option price will be subject to adjustment in accordance  with the
provisions  of Section 7 of this Plan.  For  purposes  of this Plan,  the market
value of a share of Common Stock on any day shall be the closing price of such a
share on that day on the National  Association of Securities  Dealers  Automated
Quotation  System  ("NASDAQ")  or, if there is no such  price on that  day,  the
closing price of such a share on NASDAQ on the last preceding day on which there
was such a price,  except that, if the Board  determines  that NASDAQ is not the
principal  trading market system for the  Corporation's  Common Stock,  then the
market  value shall be the  reported  closing  price of the Common Stock on such
other market  system or exchange as the Board  determines  is then the principal
trading market for shares of the Corporation's Common Stock.

     (c)  Options  granted  under the Plan  shall have a term of up to ten years
from the date of the granting thereof, provided, however, that each option shall
automatically  terminate at the close of business on the 210th day after the day
on which the  non-employee  director  ceases to be a director of the Corporation
and if that day is not a regular  business  day at the  Corporation's  principal
office, then at the close of business of the next such regular business day.

     (d)  Options  granted  under  this Plan  shall not be  transferable  by the
non-employee director otherwise than by will, or if he or she dies intestate, by
the laws of descent  and  distribution  of the state of  domicile at the time of
death, and options shall be exercisable  during the director's  lifetime only by
the director.

     SECTION 6. Manner of Exercise of Option. Options granted hereunder shall be
exercised  by  the  directors  or  the  director's   executor  or  administrator
("optionee")  delivering to the  Corporation,  from time to time within the time
limits specified in Section 6 hereof, a written notice  specifying the number of
shares the optionee then desires to purchase  together with (i) check payable in
United States  currency to the order of the  Corporation  for an amount equal to
the  option  price  for  the  shares  being  purchased,  or (ii)  shares  of the
Corporation's  Common Stock owned by the optionee  duly endorsed to the order of
the  Corporation,  equal in value to the option price for such number of shares,
valued as of the close of business on the  immediately  preceding  business  day
(except  that  payment  in  shares  may,  in  whole  or in  part,  be by  way of
constructive transfer of shares in lieu of actual transfer and physical delivery
of certificates so that, to the extent of any payment by constructive  transfer,
the director will receive the number of shares being  purchased by that payment,
less the number of shares that the director is deemed to have transferred to the
Corporation in making that payment),  or (iii) any combination of the foregoing,
and such other  instruments or agreements  duly signed by the optionee as in the
opinion of counsel for the  Corporation  may be  necessary or advisable in order
that the  issuance of such number of shares  comply  with  applicable  rules and
regulations  under the Securities Act of 1933, any appropriate  state securities
laws or any  applicable  requirement of any national stock exchange or quotation
or market system on which the shares of Common Stock may then be traded. As soon
as practicable  after any such exercise of the option in whole or in part by the
optionee,  the Corporation will deliver to the optionee at the principal offices
of the Corporation, a certificate for the number of shares with respect to which
the option shall have been so  exercised,  issued in the  optionee's  name.  The
stock  certificate  shall  carry  such  appropriate  legend,  and  such  written
instructions  shall be  given to the  Corporation's  transfer  agent,  as may be
deemed  necessary or advisable by counsel to the  Corporation in order to comply
with the  requirements  of the  Securities  Act of 1933 or any state  securities
laws.
<PAGE>
     SECTION 7.  Adjustment  of Number of Shares.  If a dividend  or stock split
shall  hereinafter be declared upon the Common Stock of the Corporation  payable
in shares  of  Common  Stock of the  Corporation,  then the  number of shares of
Common Stock then subject to any  outstanding  option under the Plan, the number
of shares reserved for issuance under those outstanding  options, and the number
of shares  reserved for issuance  pursuant to the Plan but not yet covered by an
option shall be adjusted by adding to each such share the number of shares which
would be  distributable  thereon if the share had been  outstanding  on the date
fixed for determining the Shareholders entitled to receive the stock dividend or
stock split.  If the  outstanding  shares of the Common Stock of the Corporation
shall be changed into or exchanged  for a different  number or kind of shares of
stock or other  securities of the Corporation  whether  through  reorganization,
recapitalization or  reclassification,  then there shall be substituted for each
share of Common Stock subject to any  outstanding  option under the Plan and for
each share of Common Stock  reserved  for issuance  pursuant to the Plan but not
yet  covered  by an  option,  the  number  and kind of  shares of stock or other
securities into which each outstanding share of Common Stock shall be so changed
or for which each such share shall be exchanged.

     If, prior to the delivery by the  Corporation  of all the shares in respect
of which an option  has been  granted  hereunder,  a merger,  consolidation,  or
dissolution  in which the  Corporation  is not the surviving  corporation  shall
occur or a transfer of  substantially  all the assets of the  Corporation  shall
occur:

     (a)  If  provision  has  been  made  in  writing  in  connection  with  the
transaction for the assumption and  continuance of any such option  granted,  or
the  substitution  for such  option of a new option  covering  the shares of the
successor  corporation,  with  appropriate  adjustment  as to number and kind of
shares and prices, the option granted,  or the new option substituted  therefor,
as the case may be, shall continue in the manner and under the terms provided.

     (b) If provision has not been made in the  transaction  for the continuance
and  assumption of an option  granted  hereunder or for the  substitution  of an
option covering the shares of the successor  corporation,  then the holder of an
option granted  hereunder shall be entitled,  prior to the effective date of any
the transaction, to purchase the full number of shares under the option, failing
which  purchase,  any  unexercised  portion  shall be deemed  canceled as of the
effective transaction date.

     If there is any change, other than as specified above in this Section 7, in
the number or kind of outstanding  shares of Common Stock of the  Corporation or
of any stock or other securities into which the Common Stock has been changed or
for which it has been exchanged,  then  appropriate  adjustment shall be made in
the number and kind of shares  subject to and reserved for issuance  pursuant to
this Plan and as to which outstanding options or portions then unexercised shall
be exercisable,  to the end that the proportionate  interest of the holder of an
option and a prospective holder, with respect to options theretofore granted and
to be granted,  shall be  maintained  as before the  occurrence of the change or
exchange.  In the case of any such substitution or adjustment as provided for in
this  Section,  the option price for each share  covered  thereby  prior to such
substitution  or adjustment  will be the option price for all shares of stock or
other securities which shall have been substituted for the share or to which the
share has been adjusted pursuant to this Section.  No adjustment or substitution
provided  for in  this  Section  7  shall  require  the  Corporation  to  sell a
fractional share, and the total  substitution or adjustment with respect to each
option shall be limited accordingly.
<PAGE>
     SECTION 8. Effective Date and Duration of Stock Plan. The effective date of
the Plan shall be September 4, 1998, the date of its adoption by the Board.  The
duration of the Plan shall be ten years from the  effective  date.  The Plan and
all options granted hereunder prior to the Corporation's  1999 annual meeting of
shareholders  shall be subject to  ratification  by  shareholders at that or any
prior meeting.

     SECTION 9.  Amendment of the Plan. The Board shall have the right to amend,
suspend,  or terminate this Plan at any time,  except that shareholder  approval
shall be required for any amendment which:

     (a)   increases  the  maximum  number  of  shares  subject  to the Plan
(subject to Section 7 above);

     (b) changes the provisions of the Plan regarding the  determination  of the
option exercise price (subject to Section 7 above);

     (c) changes the maximum  period  during which any options may be granted or
remain outstanding; or

     (d) changes the requirements as to the class of persons eligible to receive
options.

     Termination  or  suspension  of the Plan or any  amendment of it shall not,
without the consent of a holder of an outstanding  option issued under the Plan,
affect the holder's rights under that option.



Date:    ___________________     Approved by: /s/Frank J. Ryan, Vice President