Exhibit 10.4

                              CompuDyne Corporation
                             1996 Stock Option Plan
                           for Non-Employee Directors

                                Amendment 2007-1

                  WHEREAS, CompuDyne Corporation (the "Company") maintains the
CompuDyne Corporation 1996 Stock Option Plan for Non-Employee Directors (the
"Plan"); and

                  WHEREAS, the Board of Directors of the Company (the "Board")
desires to amend the Plan to allow cashless exercises of options; and

                  WHEREAS, pursuant to Section 19 of the Plan, the Board has the
authority to adopt such an amendment to the Plan;

                  NOW, THEREFORE, the Plan is hereby amended effective August 2,
2007 , as follows:

                  8.       A definition of "Cashless Fair Market Value" is added
to Section 2 of the Plan to read as follows:

                  " `Cashless Fair Market Value' shall mean with respect to the
                  Common Stock on any day, (i) the closing sales price on the
                  immediately preceding business day of a share of Common Stock
                  as reported on the principal securities exchange on which
                  shares of Common Stock are then listed or admitted to trading,
                  or (ii) if not so reported, the closing sales price (or other
                  Nasdaq-designated daily sales price) on the immediately
                  preceding business day of a share of Common Stock as published
                  in the Nasdaq National Market Issues report in the Eastern
                  Edition of The Wall Street Journal. In the event that the
                  price of a share of Common Stock shall not be so reported or
                  furnished, the Cashless Fair Market Value of a share of Common
                  Stock shall be determined by the Committee in good faith. A
                  `business day' is any day , other than Saturday or Sunday, on
                  which the relevant market is open for trading."

                  9.       The second sentence of Section 8(a) of the Plan is
hereby deleted and replaced in full with the following:

                  "Each Option may be exercised by delivery of written notice to
                  the Company stating the number of shares to be exercised and
                  accompanied by the payment of the Option price therefor in
                  accordance with this Plan."

                  10.      Section 9 of the Plan is deleted and replaced in full
with the following:

                  "9.      Payment of the Option Exercise Price

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                           Payment of the Option exercise price may be made (i)
                  in cash or by check payable to the Company, (ii) unless
                  otherwise determined by the Committee on or after the Grant
                  Date, in shares of Common Stock duly owned by the Grantee (and
                  for which the Grantee has good title free and clear of any
                  liens and encumbrances), valued at the Cashless Fair Market
                  Value on the date of exercise or (iii) unless otherwise
                  determined by the Committee on or after the Grant Date, by
                  delivery back to the Company from the shares acquired on
                  exercise of the number of shares of Common Stock equal to the
                  exercise price, valued at the Cashless Fair Market Value on
                  the date of exercise. Nothing contained in this Plan shall
                  prevent or prohibit a Grantee from exercising his or her
                  Options under a broker-facilitated transaction pursuant to
                  which the broker remits the exercise price to the Company from
                  the proceeds of a sale transaction."

                  11.      The last sentence of Section 10 of the Plan is
deleted and replaced in full with the following:

                  "The Grantee may satisfy this requirement by remitting to the
                  Company in cash or by check the amount of such Withholding
                  Taxes, or a number of shares of Common Stock, either
                  previously owned, or acquired upon the exercise of the Option,
                  having an aggregate Cashless Fair Market Value as of the Tax
                  Date equal to the amount of such Withholding Taxes."

                  12.      All other terms and provisions of the Plan shall
remain in full forces and effect.

                  Executed this  2nd   day of        August          , 2007.
                                ------        -----------------------

                                              COMPUDYNE CORPORATION



                                              By:   /s/ Geoffrey F. Feidelberg
                                                 -------------------------------
                                                   Geoffrey F. Feidelberg
                                                   Chief Financial Officer