**Exhibit
      10.3**


**MATEC
          CORPORATION**
 
 **2001
          STOCK OPTION PLAN**
 
 **1.** **PURPOSE**
 
 The
          Plan
          is intended to expand and improve the profitability and prosperity of MATEC
          Corporation for the benefit of its stockholders by permitting the Corporation
          to
          grant to officers and other key employees of, and consultants and advisers
          to,
          the Corporation and its ubsidiaries, options to purchase shares of the
          Corporation's Common Stock. These grants are intended to provide additional
          incentive to such persons by offering them a greater stake in the Corporation's
          continued success. The Plan is also intended as a means of reinforcing
          the
          commonality of interest between the Corporation's stockholders and such
          persons,
          and as an aid in attracting and retaining the services of individuals of
          outstanding and specialized skills.
 
 **2.** **DEFINITIONS**
 
 For
          Plan
          purposes, except where the context otherwise indicates, the following terms
          shall have the meanings which follow:
 
 (a)
          "Agreement" shall mean a written instrument executed and delivered on behalf
          of
          the Corporation which specifies the terms and conditions of a Stock Option
          granted to a Participant.
 
 (b)
          "Beneficiary" shall mean the person or persons who may be designated by
          a
          Participant from time to time in writing to the Committee, to receive,
          if the
          Participant dies, any Option exercise rights held by the
          Participant.
 
 (c)
          "Board" shall mean the Board of Directors of the Corporation.
 
 (d)
          "Code"
          shall mean the Internal Revenue Code of 1986, as it may be amended from
          time to
          time, and the rules and regulations promulgated thereunder.
 
 (e)
          "Committee" shall mean a Committee of the Board composed of two or more
          persons
          which shall be designated by the Board to administer the Plan. Each member
          of
          the Committee, while serving as such, shall be a member of the Board and
          shall
          be a "non- employee director" within the meaning of Rule 16b-3 under the
          Securities Exchange Act of 1934.
 
 (f)
          "Common Stock" shall mean the Common Stock of the Corporation having a
          par value
          of $0.05 per share.
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(g)
        "Corporation" shall mean MATEC Corporation, a Maryland corporation.
 
 (h)
        "Employee" shall mean any person who is employed by the Corporation or any
        Subsidiary corporation.
 
 (i)
        "Exercise Price" shall mean the per share price for which a Participant upon
        exercise of a Stock Option may purchase a share of Common Stock.
 
 (j)
        "Fair
        Market Value" shall mean the value of a share of Common Stock to be determined
        by, and in accordance with procedures established by, the Committee. Such
        fair
        market value shall be deemed conclusive upon the determination of the Committee
        made in good faith. The preceding notwithstanding, so long as the Common
        Stock
        is listed on a national stock exchange, the "Fair Market Value" shall mean
        with
        respect to any given day, the mean between the highest and lowest reported
        sales
        prices of the Common Stock on the principal national stock exchange on which
        the
        Common Stock is listed, or if such exchange was closed on such day or if
        it was
        open but the Common Stock was not traded on such day, then on the next preceding
        day that the Common Stock was traded on such exchange, as reported by a
        responsible reporting service.
 
 (k)
        "Incentive Stock Option" shall mean a Stock Option which is intended to meet
        and
        comply with the terms and conditions for an "incentive stock option" as set
        forth in Section 422 of the Code, or any other form of tax qualified stock
        option which may be incorporated and defined in the Code as it may from time
        to
        time be amended.
 
 (l)
        "Non-Qualified Option" shall mean a Stock Option which does not meet the
        requirements of Section 422 of the Code or the terms of which provide that
        it
        will not be treated as an Incentive Stock Option.
 
 (m)
        "Participant" shall mean any person who is granted a Stock Option under the
        Plan.
 
 (n)
        "Plan"
        shall mean the MATEC Corporation 2001 Stock Option Plan as set forth herein
        and
        as amended from time to time.
 
 (o)
        "Stock
        Option" or "Option" shall mean a right to purchase a stated number of shares
        of
        Common Stock subject to such terms and conditions as are set forth in the
        Plan
        and an Agreement.
 
 (p)
        "Subsidiary corporation" or "Subsidiary" shall mean any corporation which
        is a
        "subsidiary corporation" of the Corporation as defined in Section 424(f)
        of the
        Code.


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**3.** **ADMINISTRATION**
 
 (a)
          The
          Committee shall administer the Plan and, accordingly, it shall have full
          power
          to grant Stock Options under the plan, to construe and interpret the Plan,
          and
          to establish rules and regulations and perform all other acts it believes
          reasonable and proper, including the authority to delegate responsibilities
          to
          others to assist in administering the Plan.
 
 (b)
          The
          determination of those eligible to receive Stock Options, and the amount,
          type
          and terms and conditions of each Stock Option shall rest in the sole discretion
          of the Committee, subject to the provisions of the Plan.
 
 (c)
          The
          Committee may permit the voluntary surrender of all or a portion of any
          Option
          granted under the Plan to be conditioned upon the granting to the Participant
          of
          a new Option for the same or a different number of shares as the Option
          surrendered, or may require such voluntary surrender as a condition precedent
          to
          a grant of a new Option to such Participant. Such new Option shall be
          exercisable at the price, during the period and in accordance with any
          other
          terms or conditions specified by the Committee at the time the new Option
          is
          granted, all determined in accordance with the provisions of the Plan without
          regard to the price, period of exercise, or any other terms or conditions
          of the
          Option surrendered.
 
 
 **4.** **COMMON
          STOCK**  **LIMITS**
 
 The
          total
          number of shares of Common Stock which may be issued on exercise of Stock
          Options shall not exceed 200,000 shares, subject to adjustment in accordance
          with Paragraph 9 of the Plan. Shares issued under the Plan may be, in whole
          or
          in part, as determined by the Committee, authorized but unissued or treasury
          shares of Common Stock. If any Options granted under the Plan shall expire
          or
          terminate without having been exercised, the shares subject to such Options
          shall be added back to the number of shares of Common Stock which may be
          issued
          on exercise of Stock Options.
 
 
 **5.** **ELIGIBILITY
          FOR PARTICIPATION**
 
 (a)
          Consistent with Plan objectives, the following persons shall be eligible
          to
          become Participants in the Plan: officers and other key Employees and
          consultants and advisers to the Corporation or any Subsidiary corporation,
          provided that members of the Board who are not Employees shall not be
          eligible.
 
 (b)
          The
          foregoing subparagraph (a) notwithstanding, Incentive Stock Options shall
          be
          granted only to officers and other key Employees, and no Incentive Stock
          Options
          shall be granted to an Employee who owns more than 10% of the Common Stock
          determined in accordance with the provisions of Section 422(b)(6) of the
          Code,
          unless the Option meets the requirements of Section 422(c)(5) of the
          Code.
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(c)
          Options shall be granted to consultants and advisers only for bona fide
          services
          rendered other than in connection with the offer or sale of
          securities.
 
 **6.** **STOCK
          OPTIONS - TERMS AND CONDITIONS**
 
 All
          Stock
          Options granted under the Plan shall be evidenced by Agreements which shall
          contain such provisions as shall be required by the Plan together with
          such
          other provisions as the Committee may prescribe, including the following
          provisions:
 
 (a) **Price** :
          The
          Committee shall establish the Exercise Price, provided, however, that in
          the
          case of an Incentive Stock Option the Exercise Price shall not be less
          than the
          Fair Market Value of a share of Common Stock on the date of the grant of
          the
          Option.
 
 (b) **Period** **:** The
          Committee shall establish the term of any Option awarded under the Plan,
          provided, however, that no Option shall be exercisable after the expiration
          of
          10 years from the date of the grant of the Option.
 
 (c) **Time
          of Exercise** :
          The
          Committee shall establish the time or times at which an Option, or portion
          thereof, shall be exercisable. The Committee, subsequent to the grant of
          an
          Option, may accelerate the date or dates on which the Option may be
          exercisable.
 
 (d) **Exercise** :
          An
          Option, or portion thereof, shall be exercised by delivery or a written
          notice
          of exercise to the Corporation together with payment of the full purchase
          price
          of the shares as to which the Option is exercised ("Purchase Price"). Payment
          may be made:
 
 (i)
          in
          United States dollars by good check, bank draft or money order payable
          to the
          order of the Corporation, or
 
 (ii)
          at
          the discretion of the Committee by the transfer to the Corporation of shares
          of
          Common Stock owned by the Participant having an aggregate Fair Market Value
          on
          the date of exercise equal to the Purchase Price or the portion thereof
          being so
          paid, or
 
 (iii)
          at
          the discretion of the Committee and subject to any restrictions or conditions
          as
          it deems appropriate (including any restrictions as may be set forth in
          Rule
          16b-3 under the Securities Exchange Act of 1934), by electing to have the
          Corporation withhold from the shares issuable upon exercise of the Option
          such
          number of shares of Common Stock as shall have an aggregate Fair Market
          Value on
          the date of exercise equal to the Purchase Price or the portion thereof
          being so
          paid, or
 
 (iv)
          at
          the discretion of the Committee by a combination of (i) and (ii) or (i)
          and
          (iii) above.
 
 The
          Committee shall determine the procedures for the use of Common Stock in
          payment
          of the Purchase Price and may impose such limitations and prohibitions
          on such
          use as it deems appropriate.
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(e) **Special
        Rules for Incentive Stock Options** :
        Notwithstanding any other provisions of the Plan, with respect to Incentive
        Stock Options granted under the Plan (in addition to any other provisions
        specifically made applicable to Incentive Stock Options), the following
        provisions will apply:
 
 (i)
        To the
        extent that the aggregate Fair Market Value (determined at the time of grant)
        of
        the shares of Common Stock with respect to which Incentive Stock Options
        (whether granted hereunder or pursuant to any other plan of the Corporation
        or a
        Subsidiary) are first exercisable by a Participant during any calendar year
        exceeds $100,000 (or such other limit as may be in effect from time to time
        under the Code), such Options shall be treated as Non-Qualified
        Options.
 
 (ii)
        Any
        Participant who disposes of shares of Common Stock acquired on the exercise
        of
        an Incentive Stock Option by sale or exchange either (a) within two years
        after
        the date of the grant of the Option under which such shares were acquired
        or (b)
        within one year after the acquisition of such shares, shall notify the
        Corporation in writing of such disposition and of the amount realized upon
        such
        disposition promptly after the disposition.
 
 
 **7.** **TERMINATION
        OF EMPLOYMENT**
 
 If
        a
        Participant holding an Option shall cease to be employed (or in the case
        of a
        Participant who is not an Employee, shall cease to be engaged) by the
        Corporation or any Subsidiary corporation by reason of death or any other
        reason
        other than voluntary quitting, discharge for cause or permanent and total
        disability as defined in Section 22(e)(3) of the Code (hereinafter called
        a
        "Disability"), as determined by the Committee, such Participant (or, if
        applicable, such Participant's Beneficiary or legal representative) may,
        but
        only within the three months next succeeding such cessation of employment
        or
        engagement, exercise such Option to the extent that such Participant would
        have
        been entitled to do so on the date of such cessation of employments or
        engagements. If a Participant holding an Option voluntarily quits or is
        discharged for cause, such Option shall terminate on the date of cessation
        of
        employment or engagement.
 
 **8.** **DISABILITY**
 
 If
        a
        Participant holding an Option shall cease to be employed (or, in the case
        of a
        Participant who is not an Employee, shall cease to be engaged) by the
        Corporation or any Subsidiary corporation by reason of a Disability, the
        Option
        shall be exercisable by such Participant or such Participant's duly appointed
        guardian or other legal representative, to the extent that such Participant
        would have been entitled to do so on the date of such cessation of employment,
        but only within one year following such cessation of employment due to said
        Disability.
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**9.** **ADJUSTMENTS**
 
 In
        the
        event of a recapitalization, stock split, stock combination, stock dividend,
        exchange of shares, or a change in the corporate structure or shares of the
        Corporation, or similar event, the Board of Directors upon recommendation
        of the
        Committee shall make appropriate adjustments in the kind or number of shares
        which may be issued upon exercise of Options and in the kind or number
        of
 shares
        issuable upon exercise of Options theretofore granted and in the exercise
        price
        of such options.
 
 
 **10.** **MERGER,
        CONSOLIDATION OR SALE OF ASSETS**
 
 If
        the
        Corporation shall be a party to a merger or consolidation or shall sell
        substantially all its assets, each outstanding Option shall pertain and apply
        to
        the securities and/or property which a holder of the number of shares of
        Common
        Stock subject to the Option immediately prior to such merger, consolidation,
        or
        sale of assets would be entitled to receive in such merger, consolidation
        or
        sale of assets.
 
 
 **11.** **AMENDMENT
        AND TERMINATION OF PLAN**
 
 (a)
        The
        Board, without further approval of the stockholders, may at any time, and
        from
        time to time, suspend or terminate the Plan in whole or in part or amend
        it from
        time to time in such respects as the Board may deem appropriate and in the
        best
        interests of the Corporation; provided, however, that no such amendment shall
        be
        made, without approval of the stockholders, to the extent such approval is
        required by applicable law, regulation or rule, or which would:
 
 (i)
        modify
        the eligibility requirements for participation in the Plan; or
 
 (ii)
        increase the total number of shares of Common Stock which may be issued pursuant
        to Stock Options, except as is provided for in accordance with Paragraph
        9 of
        the Plan.
 
 (b)
        No
        amendment, suspension or termination of this Plan shall, without the
        Participant's consent, alter or impair any of the rights or obligations under
        any Stock Option theretofore granted to the Participant under the
        Plan.
 
 (c)
        The
        Board may amend the Plan, subject to the limitations cited above, in such
        manner
        as it deems necessary to permit the granting of Stock Options meeting the
        requirements of future amendments the Plan.


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**12.** **GOVERNMENT
      AND OTHER REGULATIONS**





The
      granting of Stock Options under the Plan and the obligation of the Corporation
      to issue or transfer and deliver shares for Stock Options exercised under the
      Plan shall be subject to all applicable laws, regulations, rules and orders
      which shall then be in effect.





**13.** **MISCELLANEOUS
      PROVISIONS**





(a) **Rights
      to Continued Employment** :
      No
      person shall have any claim or right to be granted a Stock Option under the
      Plan, and the grant of an Option under the Plan shall not be construed as giving
      any Participant the right to be retained in the employ of the Corporation or
      any
      Subsidiary corporation (or to be otherwise retained in the case of a Participant
      who is not an Employee) and the Corporation expressly reserves the right at
      any
      time to dismiss a Participant with or without cause, free of any liability
      or
      any claim under the Plan, except as provided herein or in an
      Agreement.





(b) **Who
      Shall Exercise** :
      Except
      as provided by the Plan, an Incentive Stock Option shall be exercisable during
      the lifetime of the Participant to whom it is granted only by such Participant,
      and it may be exercised only if such Participant has been in the continuous
      employ of the Corporation or any Subsidiary corporation from the date of grant
      of the Option to the date of its exercise.





(c) **Non-Transferability** :
      No right
      or interest of any Participant in the Plan or an Agreement shall be assignable
      or transferable except by will or the laws of descent and distribution, and
      no
      right or interest of any Participant shall be liable for, or subject to, any
      lien, obligation or liability of such Participant; provided that in the
      discretion of the Committee a Non- Qualified Option may be made transferable
      and
      assignable on such terms and conditions as the Committee shall in its discretion
      determine.





(d) **Withholding
      Taxes** :
      The
      Corporation may require a payment to cover applicable withholding for income
      and
      employment taxes in connection with a Stock Option.





(e) **Rights
      as Stockholder** :
      A
      Participant as such shall not have any of the rights or privileges of a holder
      of Common Stock until such time as shares of Common Stock are issued or are
      transferred to the Participant upon exercise of an Option.





(f) **Plan
      Expenses** :
      Any
      expenses of administering this Plan shall be borne by the
      Corporation.





(g) **Legal
      Considerations** :
      The
      Corporation shall not be required to issue, transfer or deliver shares of Common
      Stock upon exercise of Options until all applicable legal, listing or
      registration requirements, as determined by legal counsel, have been satisfied,
      and any necessary or appropriate written representations have been given by
      the
      Participant.


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(h) **Other
        Plans** :
        Nothing
        contained herein shall prevent the Corporation from establishing other incentive
        and benefit plans in which Participants in the Plan may also
        participate.
  ( i) **No
        Warranty of Tax Effect** :
        Except
        as may be contained in any Agreement, no opinion shall be deemed to be expressed
        or warranties made as to the effect for federal, state or local tax purposes
        of
        any grants hereunder.
 
 (j) **Construction
        of Plan** :
        The
        validity, construction, interpretation, administration and effect of the
        Plan
        and of its rules and regulations, and rights relating to the Plan, shall
        be
        determined in accordance with the laws of the State of Maryland.
 
 
 **14.** **STOCKHOLDER
        APPROVAL - TERM OF PLAN**
 
 Upon
        approval by the stockholders of the Corporation, the Plan shall become
        unconditionally effective as of February 22, 2001. No Option shall be granted
        after February 21, 2011, provided, however, that the Plan and all outstanding
        Options granted under the Plan prior to such date shall remain in effect
        until
        the applicable Options have expired. If the stockholders shall not approve
        the
        Plan, the Plan shall not be effective and any and all actions taken prior
        thereto shall be null and void or shall, if necessary, be deemed to have
        been
        fully rescinded.
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