ARGYLE
        SECURITY, INC.

      2007
        OMNIBUS SECURITIES AND INCENTIVE PLAN

      STOCK
        OPTION AGREEMENT

      EMPLOYEE
        NON-QUALIFIED STOCK OPTION

       

      THIS
        AGREEMENT made as of_______________, 200_, by and between Argyle Security,
        Inc.,
        a Delaware corporation
        (the “Company”),
        and
        _______________ (the “Optionee”).

       

      WITNESSETH:

       

      WHEREAS,
        the Company has adopted the Argyle Security, Inc. 2007 Omnibus Securities
        and
        Incentive Plan (the “Plan”)
        for
        the benefit of its employees, nonemployee directors and consultants and the
        employees, nonemployee directors and consultants of its affiliates,
        and

       

      WHEREAS,
        the Committee has authorized the grant to the Optionee of an Option under
        the
        Plan, on the terms and conditions set forth in the Plan and as hereinafter
        provided,

       

      NOW,
        THEREFORE, in consideration of the premises contained herein, the Company
        and
        the Optionee hereby agree as follows:

       

      1. Definitions.

       

      Terms
        used in this Agreement which are defined in the Plan shall have the same
        meaning
        as set forth in the Plan.

       

      2. Grant
        of Option.

       

      The
        Committee hereby grants to the Optionee an option to purchase [insert
        #
        of
        shares] shares
        of
        the Company’s Common Stock (“Shares”)
        for an
        Option price per Share equal to [insert
        price]
        (not
        less than the Fair Market Value of a Share on the date of this Agreement)
        (the
“Option”).
        The
        Option is intended by the Committee to be a Non-Qualified Stock Option and
        the
        provisions hereof shall be interpreted on a basis consistent with such
        intent.

       

      3. Option
        Terms and Exercise Period.

       

      (a) The
        Option shall be exercised, and payment by the Optionee of the Option price
        shall
        be made, pursuant to the terms of the Plan.

       

      (b) All
        or
        any part of the Option may be exercised by the Optionee no later than the
        tenth
        (10th) anniversary of the date of this Agreement.

       

      (c) [Except
        as
        otherwise provided in Section 10,]
        this
        Agreement and the Option shall terminate on the earlier of (i) the tenth
        (10th)
        anniversary of the date of this Agreement or (ii) the date the Option is
        fully
        exercised.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4. Vesting.

       

      The
        Option shall vest and become exercisable pursuant to the following
        schedule:

       

      Insert
        Vesting Schedule/Performance Goals

       

      Notwithstanding
        the above schedule, the Optionee shall be one hundred percent (100%) vested
        in
        the Option if the Optionee’s employment with the Company shall terminate on
        account of the Optionee’s (a) Total and Permanent Disability, (b) death or (c)
        retirement upon or after attaining age sixty-five (65) with at least five
        (5)
        full years of service for the Company and/or an Affiliate. The Optionee shall
        forfeit any unvested portion of the Option upon termination of employment
        with
        the Company for any reason other than the Optionee’s Total and Permanent
        Disability, death or retirement upon or after attaining age sixty-five
        (65).

       

      5. Termination
        of Employment.

       

      Sections
        6.2., 6.4 and 6.5 of the Plan shall control.

       

      6. Restrictions
        on Transfer of Option.

       

      This
        Agreement and the Option shall not be transferable otherwise than (a) by
        will or
        by the laws of descent and distribution or (b) by gift to any Family Member
        of
        the Optionee, and the Option shall be exercisable, during the Optionee’s
        lifetime, solely by the Optionee, except on account of the Optionee’s Total and
        Permanent Disability or death, and solely by the transferee in the case of
        a
        transfer by gift to a Family Member of the Optionee.

       

      7. Exercise
        of Option.

       

      (a) The
        Option shall become exercisable at such time as shall be provided herein
        or in
        the Plan and shall be exercisable by written notice of such exercise, in
        the
        form prescribed by the Committee, to the Secretary of the Company, at its
        principal office. The notice shall specify the number of Shares for which
        the
        Option is being exercised.

       

      (b) Shares
        purchased pursuant to the Option shall be paid for in full at the time of
        such
        purchase in cash, in Shares, including Shares acquired pursuant to the Plan,
        or
        part in cash and part in Shares. Shares transferred in payment of the Option
        price shall be valued as of the date of transfer based on their Fair Market
        Value.

       

      8. Regulation
        by the Committee.

       

      This
        Agreement and the Option shall be subject to the administrative procedures
        and
        rules as the Committee shall adopt. All decisions of the Committee upon any
        question arising under the Plan or under this Agreement, shall be conclusive
        and
        binding upon the Optionee and any person or persons to whom any portion of
        the
        Option has been transferred by will, by the laws of descent and distribution
        or
        by gift to a Family Member of the Optionee.


      
        
          
          

        

        
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      9. Rights
        as a Shareholder.

       

      The
        Optionee shall have no rights as a shareholder with respect to Shares subject
        to
        the Option until certificates for Shares of Common Stock are issued to the
        Optionee.

       

      10. [Change
        of Control.

       

      Notwithstanding
        the vesting requirements contained in Section 4, upon a Change of Control,
        in
        the sole discretion of the Committee, either (a) the Option shall automatically
        become fully vested and exercisable as of the date of such Change of Control,
        or
        (b) the Option shall terminate and the Company shall, within 30 days, make
        a
        cash payment to the Optionee equal to the product of (i) the number of Shares
        set forth in Section 1, multiplied by (ii) the excess of the Fair Market
        Value
        of a Share of Common Stock immediately prior to the Change of Control over
        the
        Option price. If the Company fails to make the payment described in clause
        (b)
        of the immediately preceding sentence within 30 days following the Change
        of
        Control, the Option shall automatically become fully vested and exercisable
        as
        of the next day.

       

      For
        purposes of this Agreement, the term “Change
        of Control”
shall
        mean (i) for an Optionee who is a party to an employment agreement with the
        Company or an Affiliate which agreement provides for a definition of “Change of
        Control” therein, “Change
        of Control”
shall
        have the same meaning as provided for in such agreement, or (ii) for an
        Optionee who is not a party to such an agreement, “Change
        of Control”
shall
        mean the earliest of the following to occur:

       

      (a) The
        public announcement by the Company or any person (other than the Company,
        any
        subsidiary of the Company or any employee benefit plan of the Company or
        of any
        subsidiary of the Company) (“Person”)
        that
        such Person, who or which, together with all “affiliates” and “associates”
(within the meanings of such terms under Rule 12b-2 of the Exchange Act)
        of such
        Person, shall be the beneficial owner of fifty percent (50%) or more of the
        Company’s voting stock then outstanding;

       

      (b) The
        commencement of, or after the first public announcement of any Person to
        commence, a tender or exchange offer the consummation of which would result
        in
        any Person becoming the beneficial owner of the Company’s voting stock
        aggregating fifty percent
        (50%) or more of the Company’s then outstanding voting stock;

       

      (c) The
        announcement of any transaction relating to the Company required to be described
        pursuant to the requirements of Item 6(e) of Schedule 14A of Regulation 14A
        of
        the Securities and Exchange Commission under the Exchange Act;

       

      (d) A
        proposed change in the constituency of the Board such that, during any period
        of
        two (2) consecutive years, individuals who at the beginning of such period
        constitute the Board cease for any reason to constitute at least a majority
        thereof, unless the election or nomination for election by the shareholders
        of
        the Company of each new director was approved by a vote of at least two-thirds
        (2/3) of the directors then still in office who were members of the Board
        at the
        beginning of the period;


      
        
          
          

        

        
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      (e) The
        Company enters into an agreement of merger, consolidation, share exchange
        or
        similar transaction with any other corporation other than a transaction which
        would result in the Company’s voting stock outstanding immediately prior to the
        consummation of such transaction continuing to represent (either by remaining
        outstanding or by being converted into voting stock of the surviving entity)
        at
        least two-thirds (2/3) of the combined voting power of the Company’s or such
        surviving entity’s outstanding voting stock immediately after such
        transaction;

       

      (f) The
        Board
        approves a plan of liquidation or dissolution of the Company or an agreement
        for
        the sale or disposition by the Company (in one transaction or a series of
        transactions) of all or substantially all of the Company’s assets to a person or
        entity which is not an affiliate of the Company; or

       

      (g) Any
        other
        event which shall be deemed by a majority of the members of the Board to
        constitute a “Change of Control.”

       

      Notwithstanding
        anything to the contrary contained in this Section 10, the Board is hereby
        authorized to make any modifications to the above “Change of Control” definition
        as it determines in its sole discretion to be necessary for purposes of
        compliance with Section 409A of the Code, to the extent applicable.]

       

      11. Reservation
        of Shares.

       

      With
        respect to the Option, the Company hereby agrees to at all times reserve
        for
        issuance and/or delivery upon payment by the Optionee of the Option price,
        such
        number of Shares as shall be required for issuance and/or delivery upon such
        payment pursuant to the Option.

       

      12. Delivery
        of Share Certificates.

       

      Within
        a
        reasonable time after the exercise of the Option the Company shall cause
        to be
        delivered to the Optionee, his or her legal representative or his or her
        beneficiary, a certificate for the Shares purchased pursuant to the exercise
        of
        the Option.

       

      13. Withholding.

       

      In
        the
        event the Optionee elects to exercise the Option (or any part thereof) ,
        if the
        Company or an Affiliate shall be required to withhold any amounts by reason
        of
        any federal, state or local tax rules or regulations in respect of the issuance
        of Shares to the Optionee, the Company or Affiliate shall be entitled to
        deduct
        and withhold such amounts.

       

      14. Amendment.

       

      The
        Committee may amend this Agreement at any time and from time to time;
provided,
        however,
        that no
        amendment of this Agreement that would materially and adversely impair the
        Optionee’s rights or entitlements with respect to the Option shall be effective
        without the prior written consent of the Optionee (unless such amendment
        is
        required in order to cause the Award hereunder to qualify as “performance-based”
compensation within the meaning of Section 162 (m) of the Code and applicable
        interpretive authority thereunder).

       

      15. Plan
        Terms.

       

      The
        terms
        of the Plan are hereby incorporated herein by reference.

       

      16. Effective
        Date of Grant.

       

      The
        Option shall be effective as of the date first written above.

       

      17. Optionee
        Acknowledgment.

       

      By
        executing this Agreement, the Optionee hereby acknowledges that he or she
        has
        received and read the Plan and this Agreement and that he or she agrees to
        be
        bound by all of the terms of both the Plan and this Agreement.

       

      
        
          
            	
                    ATTEST:
                      

                  	ARGYLE
                    SECURITY, INC.
	 	 	 
	                           
	
                    By: 

                  	
                                                    

                  
	 	 	 
	 	Its:	
                                                    

                  
	 	 
	WITNESS:	 
	                            	 
	 	
                                    ,
                      Awardee 

                    [Name]

                  


          

        

      

       

      
        
          
          

        

        
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