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                                                                    EXHIBIT 10.3


                            CARDIOGENESIS CORPORATION

                           DIRECTOR STOCK OPTION PLAN

                      (Amended and Restated, January 2002)

        1.      Purpose of the Plan. The purposes of this Director Stock Option
Plan are to attract and retain the best available personnel for service as
Directors (as defined herein) of the Company, to provide additional incentive to
the Directors of the Company to serve as Directors, and to encourage their
continued service on the Board.

All options granted hereunder shall be nonstatutory stock options.

        2.      Definitions. As used herein, the following definitions shall
apply:

                (a)     "Board" means the Board of Directors of the Company.

                (b)     "Code" means the Internal Revenue Code of 1986, as
amended.

                (c)     "Common Stock" means the Common Stock of the Company.

                (d)     "Company" means CardioGenesis Corporation, formerly
known as Eclipse Surgical Technologies, Inc., a California corporation.

                (e)     "Continuous Status as a Director" means the absence of
any interruption or termination of service as a Director.

                (f)     "Director" means a member of the Board.

                (g)     "Employee" means any person, including officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a Director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.

                (h)     "Exchange Act" means the Securities Exchange Act of
1934, as amended.

                (i)     "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

                        (i)     If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation The
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing, bid, if no sales were reported) as quoted on such exchange or system
for the last market trading day prior to the time of determination, as reported
in The Wall Street Journal or such other source as the Administrator deems
reliable;

                        (ii)    If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock, shall be the mean between the high bid
and low asked prices for the Common Stock on the date of determination, as
reported in The Wall Street Journal or such other source as the Board deems
reliable, or;

                        (iii)   In the absence of an established market for the
Common Stock, the Fair Market Value thereof, shall be determined in good faith
by the Board.

                (j)     "Option" means a stock option granted pursuant to the
Plan.

                (k)     "Optioned Stock" means the Common Stock subject to an
Option.





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                (l)     "Optionee" means an Outside Director who receives an
Option.

                (m)     "Outside Director" means a Director who is not an
Employee.

                (n)     "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                (o)     "Plan" means this Director Stock Option Plan.

                (p)     "Share" means a share of the Common Stock, as adjusted
in accordance with Section 10 of the Plan.

                (q)     "Subsidiary" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.

        3.      Stock Subject to the Plan. Subject to the provisions of Section
10 of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is __________ Shares of Common Stock (the "Pool"). The
Shares may be authorized, but unissued, or reacquired Common Stock.

        If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated); provided however, that Shares that have actually been issued under
the Plan shall not be returned to the Plan and shall not become available for
future distribution under the Plan.

        4.      Administration and Grants of Options under the Plan.

                (a)     Procedure for Grants. The provisions set forth in this
Section 4(a) shall not be amended more than once every six months, other than to
comport with changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder. All grants of Options to Outside
Directors under this Plan shall be automatic and nondiscretionary and shall be
made strictly in accordance with the following provisions:

                        (i)     No person shall have any discretion to select
which Outside Directors shall be granted Options or to determine the number of
Shares to be, covered by Options granted to Outside Directors.

                        (ii)    Each Outside Director elected to the Board after
June 1, 1996, shall be automatically granted an Option to purchase 22,500
Shares.

                        (iii)   Each Outside Director shall be automatically
granted an Option to purchase 7,500 Shares (a "Subsequent Option") on the date
of such Outside Director's annual re-election to the Board, if on such date, he
or she shall have served on the Board for at least six (6) months.

                        (iv)    The terms of a First Option granted hereunder
shall be as follows:

                                (A)     the term of the First Option shall be
ten (10) years;

                                (B)     the First Option shall be exercisable
only while the Outside Director remains a Director of the Company, except as set
forth in Section 8 hereof;

                                (C)     the exercise price per Share shall be
the Fair Market Value per Share on the date of grant of the First Option; and

                                (D)     the First Option shall become
exercisable as to 1/3rd of the Shares subject to the First Option on each of the
first, second and third anniversaries of the date of grant.

                        (v)     The terms of a Subsequent Option granted
hereunder shall be as follows:



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                                (A)     the term of the Subsequent Option shall
be ten (10) years;

                                (B)     the Subsequent Option shall be
exercisable only while the Outside Director remains a Director of the Company,
except as set forth in Section 8 hereof;

                                (C)     the exercise price per Share shall be
the Fair Market Value per Share on the date of grant of the Subsequent Option;
and

                                (D)     the Subsequent Option shall become
exercisable as to all of the Shares subject to the Subsequent Option on the
first anniversary of its date of grant.

                        (vi)    In the event that any Option granted under the
Plan would cause the number of Shares subject to outstanding Options plus the
number of Shares previously purchased under Options to exceed the Pool, then the
remaining Shares available for Option grant shall be granted under Options to
the Outside Directors on a pro rata basis. No further grants shall be made until
such time, if any, as additional Shares, become available for grant under the
Plan through action of the shareholders to increase the number of Shares which
may be issued under the Plan or through cancellation or expiration of Options
previously granted hereunder.

        5.      Eligibility. Options may be granted only to Outside Directors.
All Options shall be automatically granted in accordance with the terms of
Section 4 hereof. An Outside Director who has been granted an Option may, if he
or she is otherwise eligible, be granted an additional Option or Options in
accordance with such term.

               Neither the Plan nor any Option shall confer upon an Optionee any
right to be nominated or continue to serve as a Director, nor shall they
interfere in any way with any right that the Director or the Company may have to
terminate the Directors directorship at any time.

        6.      Term of Plan. The Plan shall become effective upon the earlier
to occur of the Plan's adoption by the Board or it's approval by the
shareholders of the Company as described in Section 16 of the Plan; provided,
however, that the Plan shall be null and void if an underwritten, initial public
offering of the Company's Common Stock does not occur before April 1, 1997. This
Plan shall continue in effect until March 31, 2006 unless sooner terminated
under Section 11 of the Plan. Termination of this Plan shall not affect rights
and obligations heretofore granted under this Plan and then in effect.

        7.      Form of Consideration. The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
shall consist of (i) cash, (ii) check, (iii) promissory note, (iv) other shares
which (x) in the case of Shares acquired upon exercise of an Option, have been
owned by the Optionee for more than six (6) months on the date of surrender, and
(y) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised, (v)
delivery of a properly executed exercise notice together with such other
documentation as the Company and the broker, if applicable, shall require to
affect an exercise of the Option and delivery to the Company of the sale or loan
proceeds required to pay the exercise price, or (vi) any combination of the
foregoing methods of payment.

        8.      Exercise of Option.

                (a)     Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable at such times as are set forth in
Section 4 hereof; provided, however, that no Options shall be exercisable until
shareholder approval of the Plan in accordance with Section 16 hereof has been
obtained.

                An Option may not be exercised for a fraction of a Share.

                An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and fall payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 7 of the Plan. Until the issuance (as evidenced by the
appropriate, entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other


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rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. A share certificate for the number
of Shares so acquired shall be issued to the Optionee as soon as practicable
after exercise of the Option. No adjustment shall be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 10 of the Plan.

                Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

                (b)     Rule 16b-3. Options granted to Outside Directors must
comply with the applicable provisions of Rule 16b-3 promulgated under the
Exchange Act or any successor thereto and shall contain such additional
conditions or restrictions as may be required thereunder to qualify Plan
transactions, and other transactions by Outside Directors that otherwise could
be matched with Plan transactions, for the maximum exemption from Section 16 of
the Exchange Act.

                (c)     Termination of Continuous Status as a Director. In the
event an Optionee's Continuous Status as a Director terminates (other than upon
the Optionee's death or total and permanent disability (as defined in Section
22(e)(3) of the Code)), the Optionee may exercise his or her Option, but only
within sixty (60) days from the date of such termination, and only to the extent
that the Optionee was entitled to exercise it on the date of such termination
(but in no event later than the expiration of its ten (10) year term). To the
extent that the Optionee was not entitled to exercise an Option on the date of
such termination, and to the extent that the Optionee does not exercise such
Option (to the extent otherwise so entitled) within the time specified herein,
the Option shall terminate.

                (d)     Disability of Optionee. In the event Optionee's
Continuous Status as a Director terminates as a result of total and permanent
disability (as defined in Section 22(e)(3) of the Code) or such disability
occurs within sixty (60) days following the termination of Optionee's Continuous
Status as a Director, the Optionee may exercise his or her Option, but only
within twelve (12) months from the date of such termination, and only to the
extent that the Optionee was entitled to exercise it on the date of such
termination (but in no event later than the expiration of its ten (10) year
term). To the extent that the Optionee was not entitled to exercise an Option on
the date of termination, or if he or she does not exercise such Option (to the
extent otherwise so entitled) within the time specified herein, the Option shall
terminate.

                (e)     Death of Optionee. In the event of an Optionee's death
during or within sixty (60) days of the termination of Optionee's Continuous
Status as a Director, the Optionee's estate or a person who acquired the right
to exercise the Option by bequest or inheritance may exercise the Option, but
only within twelve (12) months following the date of death, and only to the
extent that the Optionee was entitled to exercise it on the date of death (but
in no event later than the expiration of its ten (10) year term). To the extent
that the Optionee was not entitled to exercise an Option on the date of death,
and to the extent that the Optionee's estate or a person who acquired the right
to exercise such Option does not exercise such Option (to the extent otherwise
so entitled) within the time specified herein, the Option shall terminate.

        9.      Non-Transferability of Options. The Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.

        10.     Adjustments Upon Changes in Capitalization, Dissolution, Merger,
Asset Sale or Change of Control.

                (a)     Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of Shares covered by each
outstanding Option, the number of Shares which have been authorized for issuance
under the Plan but as to which no Options have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option, the
price per Share covered by each such outstanding Option, and the number of
Shares issuable pursuant to the automatic grant provisions of Section 4 hereof
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other



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increase or decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to an Option.

                (b)     Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it shall terminate immediately prior to the
consummation of such proposed action.

                (c)     Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding option may be assumed or an
equivalent option may be substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation does not agree to assume the Option or to substitute an equivalent
option, each outstanding Option shall become fully vested and exercisable,
including as to Shares as to which it would not otherwise be exercisable. If an
Option becomes fully vested and exercisable upon a merger or sale of assets, the
Board shall notify the Optionee that the Option shall be fully exercisable for a
period of thirty (30) days from the date of such notice, and the Option shall
terminate upon the expiration of such period. For the purpose of this paragraph,
an Option shall be considered assumed if, following, the merger or sale of
assets, the Option confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares).

        11.     Amendment and Termination of the Plan.

                (a)     Amendment and Termination of the Plan. Except as set
forth in Section 4, the Board may at any time amend, alter, suspend, or
discontinue the Plan, but no amendment, alteration, suspension, or
discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act (or any other applicable law or regulation), the Company shall obtain
shareholder approval of any Plan amendment in such a manner and to such a degree
as required.

                (b)     Effect of Amendment or Termination. Any such amendment
or termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated.

                (c)     Shareholder Approval Required. Unless approved by the
holders of a majority of the shares present and entitled to vote at a duly
convened meeting of shareholders, the Company shall not: (i) grant any stock
option, including a stock appreciation right, with an exercise price that is
less than 100% of the fair market value of the underlying stock on the date of
grant; or (ii) reduce the exercise price of any stock option, including a stock
appreciation right, outstanding or to be granted in the future; cancel and
re-grant options at a lower exercise price (including entering into any "6 month
and 1 day" cancellation and re-grant scheme), whether or not the cancelled
options are put back into the available pool for grant; replace underwater
options with restricted stock in an exchange, buy-back or other scheme; or
replace any options with new options having a lower exercise price or
accelerated vesting schedule in an exchange, buy-back or other scheme. This
Section 11(c) may not be further amended or repealed without the affirmative
vote of the holders of a majority of the shares present and entitled to vote at
a duly convened meeting of shareholders.

        12.     Time of Granting Options. The date of grant of an Option shall,
for all purposes, be the date determined in accordance with Section 4 hereof.

        13.     Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the



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Exchange Act, the rules and regulations promulgated thereunder, state securities
laws, and the requirements of any stock exchange upon which the Shares may then
be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

                As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

                The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

        14.     Reservation of Shares. The Company, during the term of this
Plan, shall at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

        15.     Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.

        16.     Shareholder Approval. Continuance of the Plan shall be subject
to approval by the shareholders of the Company at or prior to the first annual
meeting of shareholders held subsequent to the granting, of an Option hereunder.
Such shareholder approval shall be obtained in the degree and manner required
under applicable state and federal law.



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