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:

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

2.  On each August 1 of each subsequent year, an option to purchase 6,000
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.

3.  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.

4.  On November 9, 2002, an option to purchase 5,500 shares of Common Stock.

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, May 17, 2001 and
May 8, 2003.

11.  New York State Law

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