EXHIBIT 10.3

                       COGNITRONICS CORPORATION
               DIRECTORS' STOCK OPTION PLAN, AS AMENDED


1.   PURPOSE

The Directors' Stock Option Plan  (the  "Plan")  is intended  to
provide  incentives to non-employee directors and officers of
Cognitronics Corporation (the "Company") by more closely aligning
their compensation with stockholder value.

2.   ADMINISTRATION

The  Plan shall be administered by the Company's Board of Directors.

The Board  shall have authority,  subject  to  the terms  of the
Plan, to interpret the  Plan and  make  all  determinations necessary
or  advisable  for  its administration.   The Board may consult with
legal  counsel, who  may  be  counsel  to the Company, and shall  not
incur  any liability for any action taken in good faith in reliance
upon the advice  of  counsel.

3.   ELIGIBILITY

All outside directors and officers (individually "Participants",
collectively "Participants") shall be eligible to participate  in the
Plan. An outside director or officer means a director or officer who
is neither an employee of the Company nor of any subsidiary of the
Company.

4.   STOCK

The  stock as to which options may be granted shall  be the
Company's  common stock, par value $.20 per  share  ("Common Stock").
When options are exercised the Company may either  issue unissued
Common Stock or transfer issued Common Stock held in its treasury.
The total number of shares of Common Stock which may be sold  to
Participants under the Plan pursuant to options shall  not exceed
102,500  shares. If an option expires,  or  is  otherwise terminated
prior  to its exercise, the Common Stock  covered  by such  option
immediately  prior  to  such  expiration  or  other termination shall
continue to be available under the Plan.

5.   AWARDING OF OPTIONS

Options shall be awarded to Participants as follows:

     (a)       Upon the Effective Date, an option to purchase 3,000
               shares of Common Stock.

     (b)       On each August 1, an option to purchase 3,000 shares
               of Common Stock, but not to a Participant elected by
               the Board of Directors subsequent to the Annual
               Meeting of Stockholders immediately preceding such
               August 1.

     (c)       Sixty (60) days following the initial election of a
               director by the Board of Directors, an option to
               purchase a portion of the number of shares set forth
               in (b) above based on the ratio between the number of
               months the number of months between the date of such
               election and the next Annual Meeting of Stockholders
               divided by twelve (12) months.

The  "Date of Award" of an option shall be  the date on which the
option is awarded under the Plan. The award of  any option to any
Participant shall neither entitle such Participant to, nor disqualify
him from, participation in any  other plan which provides for the
issuance of Common Stock.

6.   TERMS AND CONDITIONS OF OPTIONS

Options  shall  be  evidenced by  instruments  in  form approved by
the Board. Such instruments shall conform to  the following terms and
conditions:

     (a)   Option  price.   The option price  per  share of Common
     Stock shall be the Fair Market Value of a share of Common Stock
     on the Date of Award.. "Fair Market Value"  shall  be  the
     closing  price  of  the Common Stock  recorded  on  the American
     Stock Exchange on the Date of Award or, if the Common Stock is
     not traded on such date, on the last trading day prior thereto.

     (b)   Term and exercise of options.  Each option  shall expire
     no later than the tenth anniversary of its  Date  of  Grant and
     shall become exercisable on the date one year after the Date of
     Grant.  The Board may waive any exercise conditions or
     accelerate the exercisability of the option at any time.  After
     becoming exercisable, each option shall remain exercisable until
     its expiration or  termination.  An option may be exercised from
     time to time, in whole or part, up to the total number of shares
     with respect to which it is then exercisable. Payment of  the
     purchase price will be made in such manner  as  the Board may
     provide in the option, which may include cash (including cash
     equivalents) or any  other manner  permitted by law as
     determined by the Board or any combination of the foregoing.

     (c)  Termination of Participant.  If a Participant ceases, other
     than by reason of death or retirement, to be a director or
     officer of the Company, all options awarded to him and
     exercisable  on the date of he ceases to be a director or
     officer shall terminate on the earlier of such options'
     expiration  or one year after the day he ceases to be a director
     or officer or as otherwise determined by the Board.  Any option
     not exercisable on the date of such termination shall lapse and
     be thenceforth unexercisable.

     (d)   Retirement of Participant.  If a Participant retires, all
     options held by him on the date of his retirement shall become
     exercisable on the date of his retirement and  shall terminate
     on the earlier of such option's expiration or the first
     anniversary of the day of his retirement.

     (e)   Death  of Participant.  If a Participant dies, his options
     may be exercised, to the extent of the  number of shares with
     respect to which he could have exercised on the date of his
     death,  by  his estate, personal representative or beneficiary
     who acquires the option by will or by the laws of descent and
     distribution, at any time prior to the earlier of such option's
     expiration or the first anniversary of the  Participant's death.
     On the earlier of such dates, the option shall terminate.


     (f)   Assignability.  No option shall be assignable or
     transferable by the Participant except by will or  by laws of
     descent and distribution, and during the lifetime of the
     Participant the option shall be exercisable only by him.  At the
     request of a Participant, shares of Common Stock purchased on
     exercise of an option may be issued or transferred in the name
     of the Participant and another person jointly with the right of
     survivorship.

     (g)   Other provisions.  Instruments evidencing options may
     contain such other provisions, not inconsistent with the Plan,
     as the Board deems advisable, including a requirement  that a
     Participant represent to  the  Company in writing, when an
     option is awarded, or when he receives  shares on its exercise,
     that he is accepting such option, or  receiving  such shares
     (unless they are then  covered  by  a Securities Act of 1933
     registration statement), for his  own account for investment
     only.  All certificates representing shares issued under the
     Plan may bear a legend deemed  appropriate  by  the Committee to
     confirm an exemption from the registration requirements of the
     Securities Act of 1933.

7.   CAPITAL ADJUSTMENTS

In the event of any merger, reorganization, consolidation, sale of
substantially all assets, recapitalization, stock dividend, stock
split, spin-off, distribution of assets or other change in corporate
structure affecting the Common Stock such that an adjustment is
determined by majority of the  Incumbent Directors to be appropriate,
a majority of the Incumbent Directors shall, in such a manner as it
may deem equitable in its sole discretion, substitute or adjust any
or all of (i) the aggregate number and kind of shares reserved for
issuance under the Plan, (ii) the number and kind of shares as to
which awards may be granted to any individual in any fiscal year,
(iii) the number and kind of shares subject to outstanding awards,
and (iv) the exercise price of outstanding stock options; provided,
however, that no such adjustment shall increase the aggregate value
of any outstanding award.

In addition, upon the dissolution or liquidation of the Company or
upon any reorganization, merger, or consolidation as a result of
which the Company is not the surviving corporation (or survives as a
wholly-owned subsidiary of another corporation), or upon a sale of
substantially all the assets of the Company, a majority of the
Incumbent Directors may take such action as it in its discretion
deems appropriate to (i) accelerate the time when stock options may
be exercised, (ii) cash out such stock options at or immediately
prior to the date of such event, or (iii) provide for the assumption
of outstanding stock options by surviving, successor or transferee
corporations.

The Board's determination as to which adjustments shall be made and
the extent thereof shall be final, binding and conclusive.

8.  CHANGE OF CONTROL

Notwithstanding the provisions of Section 6(b) hereof, in the event
of a Change in Control, as hereinafter defined, all options held by a
Participant shall become exercisable on the date of the Change in
Control.

"Change in Control" means an event in which:

     (a)   the stockholders of the Company approve (i) any
     consolidation or merger of the Company or any of its
     subsidiaries where the stockholders of the Company, immediately
     prior to the consolidation or merger, would not, immediately
     after the consolidation or merger, beneficially own, directly or
     indirectly, shares representing in the aggregate more than 50%
     of all votes to which all stockholders of the corporation
     issuing cash or securities in the consolidation or merger (or of
     its ultimate parent corporation, if any) would be entitled under
     ordinary circumstances to vote in an election of directors or
     where the members of the Board, immediately prior to the
     consolidation or merger, would not, immediately after the
     consolidation or merger, constitute a majority of the Board of
     Directors of the corporation issuing cash or securities in the
     consolidation or merger (or of its ultimate parent corporation,
     if any), (ii) any sale, lease, exchange or other transfer (in
     one transaction or a series of transactions contemplated or
     arranged by any person as a single plan) of all or substantially
     all of the assets of the Company or (iii) any plan or proposal
     for the liquidation or dissolution of the Company;

     (b)   persons who, as of the effective date hereof, constitute
     the entire Board (as of the date hereof the "Incumbent
     Directors") cease for any reason to constitute at least a
     majority of the Board, provided, however, that any person
     becoming a director subsequent to the date hereof whose
     election, or nomination for election by the Company's
     shareholders, is approved by a vote of at least a majority of
     the then Incumbent Directors (other than an election or
     nomination of a person whose assumption of office is the result
     of an actual or threatened election contest relating to the
     election of directors of the Company, as such terms are used in
     Rule 14a-11 under the Securities Exchange Act of 1934, as
     amended from time to time (the "Exchange Act")), shall be
     considered an Incumbent Director; or

     (c)   any "person", as such term is used in Sections 13(d) and
     14(d) of the Exchange Act (other than the Company, any of its
     subsidiaries, any employee benefit plan of the Company or any of
     its subsidiaries or any entity organized, appointed or
     established by the Company for or pursuant to the terms of such
     plan), together with all "affiliates" and "associates" (as such
     terms are defined in Rule 12b-2 under the Exchange Act) of such
     person, becomes the "beneficial  owner" or "beneficial owners"
     (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
     directly or indirectly, of securities of the Company
     representing in the aggregate 20% or more of either (i) the then
     outstanding shares of Common Stock or (ii) the combined voting
     power of all then outstanding securities of the Company having
     the right under ordinary circumstances to vote in an election of
     directors to the Board ("Voting Securities") (in either such
     case other than as a result of acquisitions of such securities
     directly from the Company).

Notwithstanding the foregoing, a "Change in Control" will not have
occurred for  purposes of clause (c) solely as the result of an
acquisition of securities by the Company which,  by reducing the
number of shares of Common Stock or other Voting Securities
outstanding, increases (i) the proportionate number of shares of
Common Stock beneficially owned by any person to 20% or more of the
shares of Common Stock then outstanding or (ii) the proportionate
voting power represented by the Voting Securities beneficially owned
by any person to 20% or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any person
referred to in clause (i) or (ii) of this sentence thereafter becomes
the beneficial owner of any additional shares of Common Stock or
other Voting Securities (other than pursuant to a stock split, stock
dividend or similar transaction), then a "Change in Control" will
have occurred for purposes of clause (c).

9.   TERM; AMENDMENT OF PLAN

The Board may discontinue the Plan at any time and may amend it from
time to time.  No amendment or discontinuation of the Plan shall
adversely affect any outstanding award without  the  Participant's
written consent. Amendments may  be  made without stockholder
approval except as required to satisfy applicable law or stock
exchange requirements.

10.  EFFECTIVE DATE

The Plan is  in accordance with a Resolution of the Board duly
adopted and approved by unanimous written consent on September 17,
1998 (the "Effective Date") and a Resolution of Stockholders on May
13, 1999 and amended by Resolutions of Stockholders on May 11, 2000
and May 17, 2001.

11.  NEW YORK STATE LAW

The Terms of the Plan shall be governed by the laws  of the State of
New York.