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                                                                    EXHIBIT 10.3
 
                                AMENDMENT NO. 3
                                       TO
                                  ULTRAK, INC.
                      1988 NON-QUALIFIED STOCK OPTION PLAN
 
     This Amendment No. 3 amends the Ultrak, Inc. 1988 Non-Qualified Stock
Option Plan adopted by the Board of Directors (the "Board") of Ultrak, Inc., a
Delaware corporation (the "Company"), on April 15, 1988, as amended effective
November 1, 1991 and December 28, 1993 (the "Plan").
 
                                   WITNESSETH
 
     WHEREAS, the Plan provided that the Company may grant options to purchase
up to an aggregate of 5,000,000 shares of the Company's Common Stock, no par
value ("Common Stock"), pursuant to the Plan; and
 
     WHEREAS, Section 4(f) of the Plan provides that the number of shares of
Common Stock for which options may be granted to persons participating under the
Plan shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from the subdivision or
consolidation of shares of Common Stock; and
 
     WHEREAS, on December 17, 1993 the stockholders of the Company approved,
effective December 28, 1993, a one for six reverse stock split in the form of a
reclassification of the Company's Common Stock and, as a result, the authorized
number of shares of Common Stock under the Plan was revised from 5,000,000 to
833,334; and
 
     WHEREAS, pursuant to Section 7 of the Plan, on September 27, 1996, the
Board approved an increase in the number of authorized shares of Common Stock
under the Plan from 833,334 to 1,000,000;
 
     NOW, THEREFORE, in consideration of the foregoing, effective September 27,
1996, Section 2 of the Plan is amended to read in its entirety as follows:
 
          "2. Stock Subject to Option. Subject to adjustment as provided in
     Sections 4(h) and 4(j) hereof, Options may be granted by the Company from
     time to time to purchase up to an aggregate of 1,000,000 shares of the
     Company's authorized but unissued Common Stock, provided that the number of
     shares that may be granted to any employee under the Program shall be
     reasonable in relation to the purpose of the Program. Shares that by reason
     of the expiration of an Option or otherwise are no longer subject to
     purchase pursuant to an Option granted under the Program may be re-Optioned
     under the Program. The Company shall not be required, upon the exercise of
     any Option, to issue or deliver any shares of stock prior to the completion
     of such exemption, registration or other qualification of such shares under
     state or Federal law, rule or regulation as the Company shall determine to
     be necessary or desirable."
 
     This Amendment No. 3 to the Plan was adopted by the Board as of September
27, 1996.
 
                                                  /s/ GEORGE K. BROADY
                                            ------------------------------------
                                             George K. Broady, Chairman of the
                                                           Board,
                                                Chief Executive Officer and
                                                         President
 
                                                    /s/ TIM D. TORNO
                                            ------------------------------------
                                                     Tim D. Torno, Vice
                                                   President -- Finance,
                                                  Treasurer and Secretary