<PAGE>

                             EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of the 1st day of January, 2002 by and between Ultrak Operating, L.P., a
Texas limited partnership, ("Ultrak") and Wendy S. Diddell, (the "Executive").

                                   RECITALS

         A. The Employer desires that the Executive continue to provide
services for the benefit of the Employer and its affiliates and the Executive
desires to accept such employment with the Employer.

         B. The Employer and the Executive acknowledge that the Executive will
be a member of the senior management team of the Employer and, as such, will
participate in implementing the Employer's business plan.

         C. In the course of employment with the Employer, the Executive has
had and will continue to have access to certain confidential information that
relates to or will relate to the business of the Employer and its affiliates.

         D. The Employer desires that any such information not be disclosed to
other parties or otherwise used for unauthorized purposes.

         NOW, THEREFORE, in consideration of the above premises and the
following mutual covenants and conditions, the parties agree as follows:

         1. Employment. The Employer shall employ the Executive as its Senior
Vice President, Sales and Marketing and the Executive hereby accepts such
employment on the following terms and conditions.

         2. Duties. The Executive shall work for the Employer in a full-time
capacity. The Executive shall, during the term of this Agreement, have the
duties, responsibilities, powers, and authority of the position of Senior Vice
President, Sales and Marketing. The Executive shall report to, and follow the
direction of, the Chief Executive Officer or President of the Employer or any
other employee designated by the Chief Executive Officer or President of the
Employer. The Executive shall diligently, competently, and faithfully perform
all duties, and shall devote his entire business time, energy, attention, and
skill to the performance of duties for the Employer or its affiliates and will
use his best efforts to promote the interests of the Employer. It shall not be
considered a violation of the foregoing for the Executive to serve on
corporate, industry, civic, religious or charitable boards or committees, so
long as such activities do not significantly interfere with or present a
conflict of interest with the performance of the Executive's responsibilities
as an employee of the Employer in accordance with this Agreement.

         3. Executive Loyalty. The Executive shall devote all of his time,
attention, knowledge, and skill solely and exclusively to the business and
interests of the Employer, and the Employer shall be entitled to all benefits
and profits arising from or incident to any and all work, services, and advice
of the Executive. The Executive expressly agrees that during the term of this
Agreement, he shall not provide assistance to, as a partner, officer,
director, member, manager, stockholder, advisor, agent, employee, or in any
other form or capacity, any other business similar to that of the Employer.
The foregoing notwithstanding, except as provided for in Paragraph 9.D.(2)
below, nothing herein contained shall be deemed to prevent the Executive from
investing his money in the capital stock or other securities of any
corporation whose stock or securities are publicly-owned or are regularly
traded on any public exchange.

         4. Term of Employment. Unless sooner terminated as hereinafter
provided, this Agreement shall be entered into for a period of twelve (12)
month's (the "Initial Term"), commencing on January 1, 2002 (the "Effective
Date"). The term of employment shall be renewed automatically for successive
periods of twelve (12) month's each (a "Renewal Term") after the expiration of
the Initial Term and any subsequent Renewal Term, unless the Employer provides
the Executive, or the Executive provides the Employer, with written notice to
the contrary at least sixty (60) days prior to the end of the Initial Term or
any Renewal Term.



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     5.  Compensation.

         A.   Salary. The Employer shall pay the Executive an annual base salary
of $183,000.00 (the "Base Salary"), payable in substantially equal
installments, on a time schedule that is in accordance with the Employer's
payroll policy for executives in effect at the time. The Executive's salary
shall be subject to any payroll or other deductions as may be required to be
made pursuant to law, government order, or by agreement with, or consent of,
the Executive. The Employer will formally evaluate the Executive's performance
and communicate the results to Executive no less than once a year. Executive
will be eligible for performance-based increases in the Executive's base
salary on the same terms and conditions normally afforded executive employees
employed at Executive's level with Ultrak. The Executive's base salary will
not be reduced during the Initial Term or any subsequent Renewal Term of the
Agreement. Executive shall receive all regular costs of living and other
standard raises or salary increases, if any, provided to other executive
employees employed at Executive's level with Ultrak.

         B.   Performance Bonus. The Executive shall be entitled to receive a
bonus, if earned, to be determined according to the management bonus program
established by Employer for each of Employer's fiscal years beginning January
1, 2002 and Executive shall be entitled to participate in the Ultrak Executive
Management Stock Option Program.

         C.   Retention Bonus. The Executive is to receive $28,667, to be paid
out in January 2002, for the purpose of retention. Should the Executive
terminate her employment with Ultrak prior to the end of 2002, the Retention
Bonus is payable back to Ultrak on a pro rated basis.


         D.   Other Benefits. During the term of this Agreement, the Employer
shall:

           (1) include the Executive in any medical, dental or health
         insurance, disability or life insurance, retirement plans and other
         benefit plans or programs as partially funded and maintained by
         Ultrak for the benefit of its employees;

           (2) provide the Executive with three (3) weeks paid vacation in
         each year to be taken at a time or times reasonably agreeable to both
         the Executive and the Employer, in addition to Employer designated
         holidays and sick leave in accordance with the Ultrak policy;

           (3) provide a monthly car allowance of $300.00;

           (4) pay for reasonable professional associations, dues, educational
         seminars to maintain license status.


         E. Profit Sharing. The Executive shall not be entitled to participate
in any profit sharing program of Employer, unless otherwise determined by
Ultrak's CEO and/or Board of Directors, from time to time.

     6. Expenses. The Employer shall reimburse the Executive for all
reasonable and approved business expenses, provided the Executive submits paid
receipts or other documentation acceptable to the Employer and as required by
the Internal Revenue Service to qualify as ordinary and necessary business
expenses under the Internal Revenue Code of 1986, as amended.

     7. Termination. Notwithstanding anything in Paragraph 4 of this Agreement
to the contrary, the Executive's services shall terminate upon the first to
occur of the following events:

         A. At the end of the term of this Agreement, including any Renewal
Terms, if notice of intent not to renew was provided in accordance with
Paragraph 4.



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         B. Upon the Executive's date of death or the date the Executive
becomes Disabled (as defined herein) . For purposes of this Agreement, the
Executive is "Disabled" if the Executive, as a result of illness or
incapacity, shall be unable to perform the essential functions of his job,
with or without any reasonable accommodation required by law, for a period of
three (3) consecutive months or for any aggregate period of six (6) months in
any twelve (12) month period. A termination of the Executive's employment by
the Employer for disability shall be communicated to the Executive by written
notice and shall be effective on the tenth (10th) business day after receipt
of such notice by the Executive, unless the Executive returns to full-time
performance of his duties before such tenth (10th) business day.

         C. For "cause," on the date the Employer provides the Executive with
written notice that he is being terminated for Cause (as defined herein). For
purposes of this Agreement, "Cause" exists if the Executive:

           (1) commits any felony including, but not limited to, a felony
         involving fraud, theft, misappropriation, dishonesty, or embezzlement
         or commits any misdemeanor which in the sole discretion of Employer
         involves moral turpitude;

           (2) willfully engages in acts that he knew, or should have known in
         the exercise of reasonable care, would cause material harm to
         Employer's property, goodwill or existing business interests;
         provided, however, that no act on Executive's part shall be
         considered "willful" unless done by Executive, in Employer's sole
         discretion, without a good faith and reasonable belief that his
         actions were in the best interest of the Employer;

           (3) engages in any violation of any civil law, including but not
         limited to harassment (sexual and/or otherwise unlawful) and RICO
         laws.

           (4) continues to fail to substantially perform his previously
         identified duties, or refuses to substantially perform his previously
         identified duties, thirty (30) calendar days after written demand for
         substantial performance is delivered by the Employer specifically
         identifying the manner in which the Employer believes Executive has
         failed or refused to substantially perform his duties.

           (5) a material breach of any written Employer policies or
         procedures that are applicable to executives at Executive's level or
         higher within Ultrak, after written notice by the Employer to the
         Executive of such violation, and in the event of a procedural breach
         of any written Employer policies or procedures the failure by the
         Executive to undertake his best efforts to cure such procedural
         violation within a thirty (30) calendar day period where a cure
         within that time period is possible; provided, however, that "cause"
         will not exist if the policy violation would not normally be a
         dischargeable offense under the Employer's progressive discipline
         policies.

         D. On the date the Executive terminates his employment for any
reason, provided that the Executive shall give the Employer thirty (30) days
written notice prior to such date of his intention to terminate this
Agreement.

         E. On the date the Employer terminates the Executive's employment for
any reason, other than A-D set forth in this Paragraph 7.

         F. On the date the Executive terminates his employment for the
following (1) a "Change of Control" of the Employer (as herein defined in
paragraph 8A in conjunction with either (a) a material change in the
Executive's job duties that is inconsistent with the scope of responsibilities
described in the attached Job Description for Executive, (or) (b) a reduction
in the Executive's total compensation package, during the Initial Term or any
subsequent Renewal Term.



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     8.  Compensation Upon Termination.

         A. If the Executive's services are terminated pursuant to any of the
provisions of A, B, or E of Paragraph 7, the Executive, shall be entitled to
the Base Salary through the later of: the Executive's final date of active
employment; or the date of the Agreement's termination. The Executive shall
also be entitled to any benefits mandated under the Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA).

If the Executive's services are terminated pursuant to Paragraph 7A, 7B and/or
7E, the Executive, upon agreement to and execution of a release of claims
agreeable to Ultrak, shall be entitled to the continuation of the Base Salary
plus benefits, exclusive of vacation accrual, at the rate as set forth in
Paragraph 5A for an 18 month period (the "Severance Period"), payable on a time
schedule that is in accordance with the Employer's payroll policy for executives
in effect at the time. During the Severance Period, if the Executive becomes a
full-time employee with any company or entity other than Employer or an
affiliate of the Employer, the Employer shall only be responsible for payment to
the Executive of the amount by which the Executive's Base Salary exceeds the
Executive's Base Compensation from her new employer during the remainder of the
Severance Period.

Additionally, the Executive shall be entitled to the continuation of her Base
Salary plus Other Benefits as set forth in this Paragraph for a period of 18
months if the Executive, pursuant to Paragraph 7F, terminates her employment
following (1) a "Change of Control" of the Employer (as herein defined) in
conjunction with either (a) a material change in the Executive's job duties that
is inconsistent with the scope of responsibilities described in the attached Job
Description for Executive, (or) (b) a reduction in the Executive's total
compensation package, during the Initial Term or any subsequent Renewal Term.
The occurrence of a "Change of Control" shall mean, for purposes of this
Agreement:

         1)   an ownership change in which any person/individual or entity,
              excluding George K. Broady, his family members, affiliates or
              related parties, in one or more transactions or series of
              transactions, directly or indirectly, acquires more than 50% of
              the record and beneficial ownership in the voting stock of the
              Employer; or

         2)   the direct or indirect sale or exchange by the shareholders of
              the Employer of all or substantially all of the stock of the
              Employer; or

         3)   a merger or consolidation in which the Employer is a party; or

         4)   the sale, exchange, or transfer of all or substantially all of
              the assets of the Employer.

         B. If the Executive's services are terminated pursuant to B or F set
     forth in paragraph 7, all stock options granted to the Executive under
     the Ultrak 1988 Non-Qualified Stock Option Plan and Amendments thereto or
     the Ultrak Incentive Stock Option Plan will become immediately vested.

     9. Protective Covenants. The Executive acknowledges and agrees that by
virtue of his employment by, and relationship with Ultrak, he has acquired and
will acquire "Confidential Information", as hereinafter defined, as well as
special knowledge of the Employer's relationships with its customers and
business brokers, and that, but for his association with the Employer, the
Executive would not or will not have had access to said Confidential
Information or knowledge of said relationships. The Executive further
acknowledges and agrees (i) that the Employer has long term, near-permanent
relationships with its customers, and that those relationships were developed
at great expense and difficulty to the Employer over several years of close
and continuing involvement; (ii) that the Employer's relationships with its
customers are and will continue to be valuable, special and unique assets of
the Employer and that the identity of its customers is kept under tight
security with the Employer and cannot be readily ascertained from publicly
available materials or from materials available to the Employer's competitors;
and (iii) that the Employer has the following protectable interests that are
critical to its competitive advantage in the industry and would be of
demonstrable value in the hands of a competitor.



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     The Executive acknowledges and agrees that by virtue of his employment by
and relationship with Ultrak that Ultrak agrees to provide the Executive with
specialized training and instruction regarding Ultrak's operations, products
sold and serviced by Ultrak, as well as marketing and operational techniques
and strategies to the extent applicable to the Executive's employment with
Ultrak. This training may be provided through direct experience or otherwise.

     The Executive acknowledges and agrees that by virtue of his employment by
and relationship with Ultrak that Ultrak agrees to provide the Executive with
an interest in the growth of the goodwill of Ultrak through his employment.
Ultrak also agrees to provide expense reimbursements in accordance with Ultrak
policy, access to confidential information, and contact with customers,
contractors and vendors in order to help Ultrak develop goodwill for Ultrak.

     In return for the consideration described in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and as a condition precedent to the Employer entering
into this Agreement, and as an inducement to the Employer to do so, the
Executive hereby represents, warrants, and covenants as follows:

         A. The Executive has executed and delivered this Agreement as his
free and voluntary act, after having determined that the provisions contained
herein are of a material benefit to him, and that the duties and obligations
imposed on him hereunder are fair and reasonable and will not prevent him from
earning a comparable livelihood following the termination of his employment
with the Employer;

         B. The Executive has read and fully understands the terms and
conditions set forth herein, has had time to reflect on and consider the
benefits and consequences of entering into this Agreement, and has had the
opportunity to review the terms hereof with an attorney or other
representative, if he so chooses;

         C. The execution and delivery of this Agreement by the Executive does
not conflict with, or result in a breach of or constitute a default under, any
agreement or contract, whether oral or written, to which the Executive is a
party or by which the Executive may be bound;

         D. The Executive agrees that, during the time of his employment and
for a period of one (1) year after the termination of the Executive's
employment under Paragraph 7A, C, D, E or F, the Executive will not, except on
behalf of Employer, assist a Competing Business (as defined below) by doing
any of the following prohibited acts:

           (1) directly or indirectly, contact or solicit, or direct any one
         else to contact or solicit, any Covered Customer or Prospective
         Customer (as defined below) or Business Brokers (as defined below)
         for the purpose of selling or attempting to sell, any products and/or
         services that are the same or so similar to the products and services
         provided by the Employer to its customers that they would displace or
         reduce the volume of products or services sold by Employer to its
         customers during the term hereof. In addition, the Executive will not
         identify or disclose any such Covered Business Brokers, Covered
         Customers or Prospective Customers, or any part thereof, as being a
         business broker, customer or prospective customer of Employer to any
         person, firm, corporation, association, or other entity engaged in a
         Competing Business; or

           (2) participate in a Competing Business by supervising, or
         providing, directly or indirectly, services or assistance to a
         Competing Business in a position that involves (a) duties or
         functions that are the same or substantially similar in their purpose
         to those provided by Executive to Employer, (b) duties or functions
         that would involve input into or direction of the Competing Business'
         decisions regarding, but not limited to, marketing, product or
         service development, engineering or research and development,
         financial planning, organizational change or restructuring, customer
         solicitations, and (c) direction or control over



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         communications with Covered Customers and Prospective Customers, and
         Covered Brokers; provided, however, that nothing herein shall prevent
         Executive from directly owning less than one percent (1%) of the
         common stock of a publicly traded Competing Business or indirect
         ownership of an interest in a Competing Business through mutual funds
         or similar investment entities; or

           (3) solicit or otherwise induce, on his own behalf or on behalf of
         any other person or entity, any person who is any of the Employer's
         employees to terminate employment with the Employer; or

           (4) take any action as a consultant, advisor, officer, manager,
         agent, director, partner, independent contractor, owner, or employee
         for or on behalf of any of the Employer's business brokers,
         customers, or prospective customers to induce the Employer's business
         broker, customer or prospective customer at issue to terminate or
         reduce in any way any aspect of the Employer's ongoing sales or
         services, or other business activities with the customer, broker or
         prospective customer that the Executive is then working for; or

           (5) use any of the specialized training he has received from
         Ultrak; or

           (6) use the goodwill developed with Ultrak's customers, contractors
         and vendors.

The foregoing restrictions in Paragraphs 9D(1)-(4) apply to activities by
Executive anywhere within a fifty (50) mile radius of any office of Employer;
and at the addresses or locations where Covered Customers and Prospective
Customers and Covered Brokers are doing business at the time of the Executive's
termination from employment or during a period of six (6) months prior to the
Executive's termination from employment unless otherwise modified and agreed to
in writing and authorized by the Employer's Chief Executive Officer.

                  E. The Executive acknowledges and agrees that the scope
described above is necessary and reasonable in order to protect the Employer in
the conduct of its business and that, if the Executive becomes employed by
another employer, he shall be required to disclose the existence of this
Paragraph 9 to such employer and the Executive hereby consents to and the
Employer is hereby given permission to disclose the existence of this Paragraph
9 to such employer;

                  F. A "Competing Business," as referred to in Paragraph 9 and
its subparts, means any person or entity engaged in the business of providing
competing goods or services that are the same or similar to the goods or
services sold by Employer to its customers that they would displace or reduce
the volume of products or services sold by the Employer to its customers. A
"Covered Customer or Prospective Customer," as referred to in Paragraph 9 and
its subparts, means any person or entity that (a) hold a contract with Employer,
or requested a contract proposal, or had a contract proposal made to it by
Employer, within the previous six (6) months; and (b) that Executive either had
contact with or received confidential information about during the last six (6)
months of Executive's employment with Employer. A "Covered Broker," as referred
to in Paragraph 9 and its subparts, refers to any person or entity who, within
the preceding twelve (12) months in the ordinary course of business for that
person or entity, (a) acted as an agent or intermediary to facilitate the sale
of goods or services sold by Employer; and, (b) had contact with Executive or
was the subject of confidential information handled by the Executive.

                  G. The Executive agrees that both during his employment and
for a period of one (1) year thereafter the Executive will not, for any reason
whatsoever, use for himself or disclose to any person not employed by the
Employer any "Confidential Information" of the Employer acquired by the
Executive during his relationship with the Employer, both prior to and during
the term of this Agreement, except as otherwise provided for below. The
Executive further agrees to use Confidential Information solely for the purpose
of performing duties with the Employer and further agrees not to use
Confidential Information for his own private use or commercial purposes or in
any way detrimental to the Employer, except as otherwise provided for below. The
Executive agrees that "Confidential Information" means (1) information created
or compiled by Employer in the course of its business, including a formula,
pattern, compilation, program, product, device, method, technique, or process,
that (i) derives



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economic value (actual or potential) from not being generally known to, and
not being readily ascertainable by proper means by other persons who can
obtain economic value from its disclosure or use, and (ii) is subject to
efforts by the Employer that are reasonable under the circumstances to keep it
secret; or (2) information that was first acquired by Executive from or
through Executive's employment with Employer and that is information the
Employer indicated to the Executive should be maintained as confidential and
not disclosed to others outside the company without permission by designating
or marking it as "confidential" or through some other reasonable means of
communication. The Employer acknowledges and agrees that Confidential
Information does not include (1) information properly in the public domain, or
(2) information in the Executive's possession prior to the date of his
original employment with the Employer. Nothing herein will be construed to
preclude Executive from (i) disclosing Confidential Information to his
personal accountants, tax advisors, or legal counsel, in confidence, where
necessary for them to provide their professional services to Executive; or,
(2) where compelled to do so by law (in response to a subpoena for example);
provided, however, that if Executive believes he is compelled by law to make
such a disclosure of Confidential Information he will provide Employer as much
notice as practicable before making the disclosure.

                  H. During and after the term of employment hereunder, the
Executive will not remove from the Employer's premises any documents, records,
files, notebooks, correspondence, computer printouts, computer programs,
computer software and hardware, price lists, microfilm, or other similar
documents containing Confidential Information, including copies thereof, whether
prepared by him or others, except as his duty shall require, and in such cases,
will promptly return such items to the Employer. Upon termination of his
employment with the Employer, all such items including summaries or copies
thereof, then in the Executive's possession, shall be returned to the Employer
immediately. The Executive agrees to the return of such items, which shall be a
requirement in order for the Executive to receive, at the time of such
termination, or any time thereafter, any compensation due him pursuant to any
paragraphs hereunder or otherwise; provided, however, that Employer will not
make any withholdings or reduce the compensation due Executive under this
agreement or otherwise without first identifying the item that has not been
returned and providing Executive five (5) business days to return it.

                  I. The Executive recognizes and agrees that all ideas,
inventions, enhancements, plans, writings, and other developments or
improvements (the "Inventions") conceived by the Executive, alone or with
others, during the term of his employment, whether or not during working hours,
that are within the scope of the Employer's business operations or that relate
to any of the Employer's work or projects, are the sole and exclusive property
of the Employer. The Executive further agrees that (1) he will promptly disclose
all Inventions to the Employer and hereby assigns to the Employer all present
and future rights he has or may have in those Inventions, including without
limitation those relating to patent, copyright, trademark or trade secrets; and
(2) all of the Inventions eligible under the copyright laws are "work made for
hire." At the request of and without charge to the Employer, the Executive will
do all things deemed by the Employer to be reasonably necessary to perfect title
to the Inventions in the Employer and to assist in obtaining for the Employer
such patents, copyrights or other protection as may be provided under law and
desired by the Employer, including but not limited to executing and signing any
and all relevant applications, assignments or other instruments. The Employer
hereby notifies the Executive that the provisions of this Paragraph 9 shall not
apply to any Inventions for which no equipment, supplies, facility or trade
secret information of the Employer was used and which were developed entirely on
the Executive's own time, unless (1) the Invention relates (i) to the business
of the Employer, or (ii) to actual or demonstrably anticipated research or
development of the Employer, or (2) the Invention results from any work
performed by the Executive for the Employer;

                  J. The Executive acknowledges and agrees that all customer
lists, supplier lists, and customer and supplier information, including, without
limitation, addresses and telephone numbers, are and shall remain the exclusive
property of the Employer, regardless of whether such information was developed,
purchased, acquired, or otherwise obtained by the Employer or the Executive. The
Executive agrees to furnish to the Employer on demand at any time during the
term of this Agreement, and upon termination of this Agreement, his complete
list of the correct names and places of business and telephone numbers of all of
its customers served by him and located within any or all of the territories to
which he has been assigned, including all copies thereof wherever located. The
Executive further agrees to promptly notify the Employer of the name and address
of any new customer, and report all changes of a location of old customers, that
are not otherwise already known to the Employer, so that upon the termination of
this Agreement, the Employer will have a complete list of the correct names and
addresses of all of its



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<PAGE>



customers with which the Executive has had dealings. The Executive also agrees
to furnish to the Employer on demand at any time during the term of this
Agreement, and upon the termination of this Agreement, any other records,
notes, computer printouts, computer programs, computer software or hardware,
price lists, microfilm, or any other documents related to the Employer's
business that were maintained by Executive in the course of his employment,
including originals and copies thereof; and

                  K. It is agreed that any breach or anticipated or threatened
breach of any of the Executive's covenants contained in this Paragraph 9 will
result in irreparable harm and continuing damages to the Employer and its
business and that the Employer's remedy at law for any such breach or
anticipated or threatened breach will be inadequate and, accordingly, in
addition to any and all other remedies that may be available to the Employer at
law or in equity in such event, any court of competent jurisdiction may issue a
decree of specific performance or issue a temporary and permanent injunction,
enjoining and restricting the breach, or threatened breach, of any such
covenant, including, but not limited to, any injunction restraining the
Executive from disclosing, in whole or part, any Confidential Information.

         10. Acknowledgement of Ancillary Agreements and Consideration. The
Executive and Ultrak agree that the protective covenants set forth in this
Agreement are reasonable and necessary for the protection and enforcement of
their agreements on property rights set forth in Paragraph 9 above. The
Executive acknowledges that the Executive's agreement to be bound by the
protective covenants set forth in Paragraph 9 is a concurrent and material
inducement for Ultrak (i) to enter into the ancillary terms of this Agreement,
(ii) to initiate or continue the Executive's employment with Ultrak, and (iii)
to provide the Executive with promises and consideration set forth in this
Agreement. The Executive agrees that each agreement set forth in Paragraph 9
is an otherwise enforceable, ancillary agreement, and each is independently
sufficient to support all of the protective covenants in Paragraph 9. The
Executive agrees that these restrictions do not unreasonably restrict the
Executive's ability to earn a living after termination of the Executive's
employment. Ultrak agrees to provide the Executive the access to trade
secrets, confidential and proprietary information, or specialized training and
instruction, or the goodwill support, referred to in Paragraph 9 above within
30 days of the execution of this Agreement. This is not contingent upon
Ultrak's employment with the Employer but it is contingent upon Ultrak
complying with the protective covenants in Paragraph 9 and its subparts.

         11. Indemnification. Ultrak shall indemnify the Executive to the full
extent authorized by law in the event he is made or threatened to be made a
party to any action, suit, or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that he is or was a
director, officer or employee of Ultrak or serves or served any other
enterprise as a director, officer or employee at the request of Ultrak and in
compliance with the corporate By-Laws.

         12. Notices. Any and all notices required in connection with this
Agreement shall be deemed adequately given only if in writing and (a)
personally delivered, or sent by first class, registered or certified mail,
postage prepaid, return receipt requested, or by recognized overnight courier,
(b) sent by facsimile, provided a hard copy is sent with postage prepaid
thereon via regular mail on that date to the party for whom such notices are
intended, or (c) sent by other means at least as fast and reliable as first
class mail. A written notice shall be deemed to have been given to the
recipient party on the earlier of (a) the date it shall be delivered to the
address required by this Agreement; (b) the date delivery shall have been
refused at the address required by this Agreement; (c) with respect to notices
sent by mail or overnight courier, the date as of which the Postal Service or
overnight courier, as the case may be, shall have indicated such notice to be
undeliverable at the address required by this Agreement; or (d) with respect
to a facsimile, the date on which the facsimile is sent and receipt of which
is confirmed. Any and all notices referred to in this Agreement, or which
either party desires to give to the other, shall be addressed to his residence
in the case of the Executive, or to its principal office in the case of the
Employer.

         13. Waiver of Breach. A waiver by either party hereto of a breach of
any provision of this Agreement by the other party shall not operate or be
construed as a waiver or estoppel by the nonbreaching party of any subsequent
breach , and no waiver shall be valid unless it is contained in a signed
writing.



                                      8
<PAGE>



         14. Right to Cure/Early Resolution Conference. If either party
becomes aware of any breach of any material term of this Agreement, prior to
taking any action based upon the alleged breach, the nonbreaching party will
provide the other party written notice of the alleged breach within fourteen
(14) days from the date on which the non-breaching party became aware of the
alleged breach, and give the breaching party thirty (30) days from the date of
the written notice to undertake best efforts to cure the alleged breach ("the
right to cure period"). Failure by the nonbreaching party to provide written
notice and an opportunity to cure will waive any right of the nonbreaching
party to assert the alleged breach at a later time. Within fourteen (14) days
after the expiration of the right to cure period, if the breaching party has
not undertaken its best efforts to cure the alleged breach, the nonbreaching
party will notify the breaching party of this failure and request, in writing,
a meeting to discuss resolution of any disputes between the parties (the
"Early Resolution Conference"). Provided, however, that Ultrak may at any time
independently pursue the remedies specifically provided in Paragraph 9(K).

         15. Resolution of Disputes. In the event there is a dispute between
the parties arising from any breach or alleged breach of this Agreement or as
to the Executive's termination or compensation or as to any allegation that
Ultrak has violated any of the Executive's employment, civil or other rights
under any laws, statutes or constitutional provisions, and the provisions of
Paragraph 14 have been unsuccessful to resolve the dispute, the parties agree
that the suit will be subject to the mediation and binding arbitration
provisions set forth in Attachment A. The parties agree to execute the Policy
for Resolution of Disputes set forth in Exhibit A in conjunction with and upon
execution of this Agreement.

         16. Assignment. The Executive acknowledges that the services to be
rendered by him are unique and personal. Accordingly, the Executive may not
assign any of his rights or delegate any of his duties or obligations under
this Agreement. The rights and obligations of the Employer under this
Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Employer so long as the successor or assign of
the Employer provides Executive employment in a position that is the same, or
reasonably similar, in its responsibilities, compensation, benefits, and other
terms and conditions.

         17. Entire Agreement. This Agreement sets forth the entire and final
agreement and understanding of the parties and contains all of the agreements
made between the parties with respect to the subject matter hereof. This
Agreement supersedes any and all other agreements, either oral or in writing,
between the parties hereto, with respect to the subject matter hereof. No
change or modification of this Agreement shall be valid unless in writing and
signed by the Employer and the Executive.

         18. Severability. If any provision of this Agreement shall be found
invalid or unenforceable for any reason, in whole or in part, then such
provision shall be deemed modified, restricted, or reformulated to the extent
and in the manner necessary to render the same valid and enforceable, or shall
be deemed excised from this Agreement, as the case may require, and this
Agreement shall be construed and enforced to the extent necessary to protect
the interests of both parties hereto, as if such provision had been originally
incorporated herein as so modified, restricted, or reformulated or as if such
provision had not been originally incorporated herein, as the case may be. The
parties further agree to seek a lawful substitute for any provision found to
be unlawful; provided, that, if the parties are unable to agree upon a lawful
substitute, the parties desire and request that a court or other authority
called upon to decide the enforceability of this Agreement modify those
restrictions in this Agreement that, once modified, will result in an
agreement that is enforceable to the extent necessary to protect the interests
of both parties hereto.

         19. Headings. The headings in this Agreement are inserted for
convenience only and are not to be considered a construction of the provisions
hereof.

         20. Execution of Agreement. This Agreement may be executed in several
counterparts, each of which shall be considered an original, but which when
taken together, shall constitute one agreement.

         21: Recitals. The recitals to this Agreement are incorporated herein
as an integral part hereof and shall be considered as substantive and not
prefatory language.



                                      9
<PAGE>



         22. Expenses. In any action brought by either the Executive or the
Employer to enforce any of the provisions of this Agreement, all expenses
incurred by the party in connection with such actions, including reasonable
attorneys' fees, shall be borne by that party.

         23. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas.



                                      10
<PAGE>



         IN WITNESS WHEREOF, the parties have set their signatures on the date
first written above.

EMPLOYER:                                           EXECUTIVE:




By: _________________________                       By:_________________________
    Peter Beare                                        Wendy S. Diddell
Title: President


 ______________________________________
|                                      |
|   WITNESS:                           |
|                                      |
|                                      |
|   By:________________________        |
|                                      |
|   Print Name: _________________      |
|                                      |
|                                      |
|______________________________________|














                                      11
<PAGE>



                                   EXHIBIT A

                       POLICY FOR RESOLUTION OF DISPUTES
                       ---------------------------------


A.       Agreement to Arbitrate.

         In the event that any employment dispute arises between Ultrak and the
Executive, the parties involved will make all efforts to resolve any such
dispute through informal means as outlined in Paragraph 14 of the Employment
Agreement between Ultrak and the Executive. If these informal attempts at
resolution fail and if the dispute arises out of or is related to the
termination of employment, compensation of the Executive, or any alleged
unlawful discrimination, or violation of any law, Ultrak and the Executive shall
submit the dispute to final and binding arbitration. Provided, however, that
Ultrak may at any time pursue the remedies specifically provided in Paragraph
9(K) of the Employment Agreement between Ultrak and the Executive.

         By accepting or continuing employment with Ultrak, the Executive agrees
that arbitration is the exclusive remedy for all such arbitrable disputes other
than the remedies specifically provided in Paragraph 9(K) of the Employment
Agreement between Ultrak and the Executive; with respect to such disputes, no
other action may be brought in court or any other forum (except actions to
compel arbitration hereunder). THIS POLICY AND AGREEMENT TO ARBITRATE IS A FULL
AND COMPLETE WAIVER OF THE PARTIES' RIGHTS TO A CIVIL COURT ACTION FOR ANY
DISPUTES RELATING TO COMPENSATION, TERMINATION OF EMPLOYMENT, ANY CLAIMS
WHATSOEVER RELATED TO ANY EMPLOYMENT AGREEMENT, ALLEGED OR ACTUAL VIOLATION OF
ANY LAWS, RULES, REGULATIONS OR STATUTES RELATED TO THE EMPLOYMENT OF THE
EXECUTIVE, OR ANY ALLEGED OR ACTUAL UNLAWFUL DISCRIMINATION, WHICH INCLUDES
SEXUAL OR OTHER UNLAWFUL HARASSMENT. ONLY AN ARBITRATOR, NOT A JUDGE OR JURY,
WILL DECIDE SUCH DISPUTES.

         Employment disputes arising out of or related to termination of
employment or alleged unlawful discrimination, which includes sexual or other
unlawful harassment, shall include, but not be limited to, the following:
alleged violations of federal, state, and/or local constitutions, statutes, or
regulations; claims based on any purported breach of contractual obligations;
and claims based on any purported breach of duty arising in tort, including
violations of public policy. Disputes related to injuries covered by workers'
compensation and unemployment compensation and the Employee Retirement Income
Security Act of 1974 (ERISA) are not arbitrable hereunder.

B.       Attempt at Informal Resolution of Disputes (Mediation).

         Prior to submission of any dispute to arbitration, Ultrak and the
Executive shall attempt to resolve the dispute informally through mediation.
Ultrak and the Executive will select a mediator from a list provided by the
American Arbitration Association or other recognized dispute resolution provider
that will assist the parties in attempting to reach a settlement or bind the
parties. The mediator may make settlement suggestions to the parties but shall
not have the power to impose a settlement upon them. If the dispute is resolved
in mediation, the matter shall be deemed closed upon execution of a document
memorializing the resolution and signed by both parties. If the dispute is not
resolved in mediation and goes to the next step (binding arbitration), any
proposals or compromises suggested by either of the parties or the mediator
shall not be referred to or have any bearing on the arbitration procedure. The
mediator cannot also serve as the arbitrator in the subsequent proceeding unless
all parties expressly agree in writing. Ultrak shall bear the full costs of the
mediator's fees and any reasonable costs associated with the mediation
proceedings.

C.       Request for Arbitration.

         1.     Arbitration Procedures.



                                      12
<PAGE>



     The Executive or his/her representative must submit a "Request for
Arbitration" in writing to the President of Ultrak within one (1) year or the
statutory period required under Federal and/or Texas State law of (i) the
termination of employment (including resignation), (ii) the incident giving
rise to the dispute or claim, or, (iii) in the case of unlawful
discrimination, including sexual or other unlawful harassment, the alleged
conduct. This time limitation will not be extended for any reason and shall
not be subject to tolling, equitable or otherwise. If the "Request for
Arbitration" is not submitted in accordance with the aforementioned time
limitations, the Executive will not be able to bring his/her claim to this or
any other forum. The Executive can obtain a "Request for Arbitration" form
from the President of Ultrak or submit his/her own "Request for Arbitration"
form, as long as it clearly states "Request for Arbitration" and includes the
following information:

         a.    A factual description of the dispute in sufficient detail to
               advise the parties of the nature of the dispute;
         b.    The date when the dispute first arose;
         c.    The names, work locations, telephone numbers of any co-workers
               or supervisors with knowledge of the dispute; and
         d.    The relief requested by the party.

     Ultrak will respond in a timely manner to any "Request for Arbitration,"
initiated by the Executive so that the parties can begin the process of
selecting an arbitrator. Such response may include any counterclaims that
Ultrak chooses to bring against the Executive.

     2.  Selection of the Arbitrator.

         All disputes will be resolved by a single arbitrator. The arbitrator
will be mutually selected by Ultrak and the Executive. If the parties cannot
agree on an arbitrator, then a list of seven (7) arbitrators, experienced in
employment matters, shall be provided by the American Arbitration Association.
The arbitrator will be selected by the parties who will alternately strike
names from the list. The last name remaining on the list will be the
arbitrator selected to resolve the dispute. Upon selection, the arbitrator
shall set an appropriate time, date and place for the arbitration, after
conferring with the parties to the dispute.

     3.  Arbitrator's Authority.

         The arbitrator shall have the powers enumerated below:

              a.    Ruling on motions regarding discovery, and ruling on
                    procedural and evidentiary issues arising during the
                    arbitration;

              b.    Issuing protective orders on the motion of any party or
                    third party witness (such protective orders may include,
                    but not be limited to, sealing the record of the
                    arbitration, in whole or in part (including discovery
                    proceedings and motions, transcripts, and the decision and
                    award), to protect the privacy or other constitutional or
                    statutory rights of parties and/or witnesses); and

              c.    Determining only the issue(s) submitted to him/her (the
                    issue(s) must be identified in the "Request for
                    Arbitration" or counterclaims, and any issue(s) not so
                    identified in those documents shall be deemed to be and
                    is/are outside the scope of the arbitrator's jurisdiction,
                    and any award involving those issue(s) shall be subject to
                    a motion to vacate).

     4.  Pleadings.

              a.    A copy of the "Request for Arbitration" shall be forwarded
                    to the arbitrator within five (5) calendar days of his/her
                    selection.



                                      13
<PAGE>



              b.    Within ten (10) calendar days following submission of the
                    Executive's "Request for Arbitration" to the arbitrator,
                    Ultrak shall respond in writing to the "Request for
                    Arbitration" to the arbitrator by answer and/or demurrer.
                    The answer or demurrer shall be served on the arbitrator
                    and the Executive.

              c.    The answer to the "Request for Arbitration" shall include
                    the following information:

                    (1)   A response, by admission or denial, to each claim
                          set forth in the "Request for Arbitration";

                    (2)   All affirmative defenses asserted by Ultrak to each
                          claim; and

                    (3)   All counterclaims Ultrak asserts against the
                          Executive and any related third party claims.

              d.    If Ultrak contends that some or all of the Executive's
                    claims set forth in the "Request for Arbitration" are
                    barred as a matter of law, it may respond by demurrer
                    setting forth the legal authorities in support of its
                    position. If Ultrak demurs to less than the entire
                    "Request for Arbitration," Ultrak must answer those claims
                    to which it does not demur at the same time that it
                    submits its demurrer.

              e.    The Executive shall have twenty (20) calendar days to
                    oppose Ultrak's demurrer. Any opposition must be in
                    writing and served on the arbitrator and Ultrak.

              f.    If Ultrak's answer alleges a counterclaim, within twenty
                    (20) days of service of the answer, the Executive shall
                    answer and/or demur to the counterclaim in writing and
                    serve the answer and/or demurrer on the arbitrator and
                    Ultrak. If the Executive demurs to any counterclaim,
                    Ultrak shall have twenty (20) calendar days from its
                    receipt of the demurrer to submit a written opposition to
                    the demurrer to the Executive and the arbitrator.

              g.    The arbitrator shall rule on demurrer(s) to any claims
                    and/or counterclaims within fifteen (15) calendar days of
                    service of the moving and opposition papers.

              h.    If any demurrer is overruled, the moving party must answer
                    those claims to which it demurred within five (5) calendar
                    days of the arbitrator's ruling. The answer must be served
                    on the arbitrator and the opposing party.

              i.    When all claims and counterclaims have been answered, the
                    arbitrator shall set a time and place for hearing which
                    shall be no earlier than three (3) months from the day on
                    which the parties are notified of the date of hearing and
                    no late than twelve (12) months from the date on which the
                    arbitrator sets the date of the hearing.

              j.    The above rules apply whether the arbitration is initiated
                    by the Executive or by Ultrak. Should arbitration be
                    initiated by Ultrak, the Executive shall have all rights
                    of response, demand and counterclaim, and otherwise as
                    outlined above.


5.       Discovery.

         The discovery process shall proceed and be governed as follows:



                                      14
<PAGE>



              a.    Parties may obtain discovery by any of the following
                    methods:

                    (1)   Depositions upon oral examination, one (1) per side
                          as of right, with more permitted if leave is
                          obtained from the arbitrator;

                    (2)   Written interrogatories, up to a maximum combined
                          total of (20), with the responding party having
                          twenty (20) days to respond;

                    (3)   Request for production of documents or things or
                          permission to enter upon land or other property for
                          inspection, with the responding party having twenty
                          (20) days to produce the documents and allow entry
                          or to file objections to the request; and

                    (4)   Physical and mental examination, in accordance with
                          the Federal Rule of Civil Procedure 35(a).

              b.    Any motion to compel production, answers to
                    interrogatories or entry onto land or property must be
                    made to the arbitrator within fifteen (15) days of receipt
                    of objections.

              c.    All discovery requests shall be submitted no less than
                    sixty (60) days before the hearing date.

              d.    The scope of discoverable evidence shall be in accordance
                    with Federal Rule of Civil Procedure 26(b)(1).

              e.    The arbitrator shall have the power to enforce the
                    aforementioned discovery rights and obligations by the
                    imposition of the same terms, conditions, consequences,
                    liabilities, sanctions, and penalties as can or may be
                    imposed in like circumstances in a civil action by a
                    federal court under the Federal Rules of Civil Procedure,
                    except the power to order the arrest or imprisonment of a
                    person.

    6.   Hearing Procedure.

         The hearing shall proceed according to the American Arbitration
Association's Rules with the following amendments:

         a.   The arbitrator shall rule at the outset of the arbitration on
              procedural issues that bear on whether the arbitration is
              allowed to proceed.

         b.   Each party has the burden of proving each element of its claim
              or counterclaims, and each party has the burden of proving any
              of its affirmative defenses.

         c.   In addition to, or in lieu of, closing arguments, either party
              shall have the right to present post-hearing briefs, and the due
              date for exchanging post-hearing briefs shall be mutually agreed
              on by the parties and the arbitrator.

    7.   Substantive Law.

         The applicable substantive law shall be the law of the State of Texas
or federal law. If both federal and state law speak to a cause of action, the
Executive shall have the right to elect his/her choice of law. However, choice
of law in no way affects the procedural aspects of the arbitration, which are
exclusively governed by the provisions of this Policy.



                                      15
<PAGE>



    8.   Opinion and Award.

         The arbitrator shall issue a written opinion and award, in
conformance with the following requirements:

         a.   The opinion and award must be signed and dated by the
              arbitrator.

         b.   The arbitrator's opinion and award shall decide all issues
              submitted.

         c.   The arbitrator's opinion and award shall set forth the legal
              principles supporting each part of the opinion.

         d.   The arbitrator shall have the same authority to award remedies
              and damages as provided to a judge and/or jury under parallel
              circumstances.

    9.   Fees and Costs.

         Fees and costs shall be allocated in the following manner:

         a.   Each party shall be responsible for its own attorneys' fees,
              except as provided by law;



                                      16
<PAGE>



         b.   Ultrak shall bear the full cost of the arbitrator's fees and any
              costs associated with the facilities for the arbitration.

         c.   Ultrak and the Executive shall each bear an equal one-half of
              any court reporters' fees, assuming both parties want a
              transcript of the proceeding. If one party elects not to receive
              a transcript of the proceedings, the other party will bear all
              of the court reporters' fee. However, such an election must be
              made when the arrangements for the court reporter are being
              made.

         d.   Each party shall be responsible for its costs associated with
              discovery.

D.       Severability.

                  In the event that any provision of this Policy is determined
         by a court of competent jurisdiction to be illegal, invalid or
         unenforceable to any extent, such term or provision shall be enforced
         to the extent permissible under the law and all remaining terms and
         provisions of this Policy shall continue in full force and effect.



         IN WITNESS WHEREOF, the parties have set their signatures on the date
first written above.


  EMPLOYER:                                             EXECUTIVE:




  By:_______________________                            By:_____________________
     Peter Beare,                                           Wendy S. Diddell
  Title: President





                                      17