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                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered into as
of the 1st day of June, 1999, by and between Ultrak Operating, L.P., a Texas
limited partnership, ("ULTRAK") and Tim D. Torno (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 Vice
President-Finance, Chief Financial Officer 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 Vice
President-Finance, Chief Financial Officer, as detailed in the attached "JOB
DESCRIPTION" for the position of Vice President-Finance, Chief Financial
Officer, which is incorporated herein. The Executive shall report to, and follow
the direction of, the Chief Executive Officer ("CEO") or President of the
Employer or any other employee designated by the CEO 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


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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 one (1) year (the
"INITIAL TERM"), commencing on January 1, 1999 (the "EFFECTIVE DATE"). The term
of employment shall be renewed automatically for successive periods of one (1)
year 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.

         5. Compensation.

            A. Salary. The Employer shall pay the Executive an annual base
salary of $187,200.04 (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 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,
1999, and Executive shall be entitled to participate in the Ultrak Annual
Incentive Stock Option Program.


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            C. 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 four (4) 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, or taxes; and,


            D. 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.

            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.


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            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.


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         8. Compensation Upon Termination.

            A. If the Executive's services are terminated pursuant to any of the
provisions 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).

In addition to the Base Salary and benefits as set forth in Paragraph 8A, 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 a 12
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 an employee with or
provides, consulting services for pay to any company or entity other than
Employer or an affiliate of 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 his new employer during the
remainder of the Severance Period.

Additionally, the Executive shall be entitled to the continuation of his Base
Salary plus Other Benefits as set forth in this Paragraph if the Executive,
pursuant to Paragraph 7D, terminates his employment following (1) a "CHANGE OF
CONTROL" of the Employer (as herein defined), (2) 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 (3) a reduction in
the Executive's total compensation package, during the Initial 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 A,B,D, or
E set forth in paragraph 7, all stock options granted to the Executive under the
Ultrak 1988 Non-


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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.

         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


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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, or E, 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 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


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                    (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


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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 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


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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 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


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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.


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         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.

         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.


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<PAGE>   13


         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.

         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.


                                       13
<PAGE>   14


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

EMPLOYER:                                      EXECUTIVE:


By: /s/ George K. Broady                       By:  /s/ Tim D. Torno
    --------------------------                      -------------------------
    George K. Broady                                Tim D. Torno
    Title: Chief Executive Officer                  Print Name: Tim D. Torno


WITNESS:


By:  Mark L. Weintrub

Print Name: Mark L. Weintrub



                                       14
<PAGE>   15


                                    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


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<PAGE>   16


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.

         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


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<PAGE>   17


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.

                    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



                                       17
<PAGE>   18

                         (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.


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<PAGE>   19


         5.    Discovery.

               The discovery process shall proceed and be governed as follows:

                    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.

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<PAGE>   20

               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.

         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;


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<PAGE>   21


                    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: /s/ George K. Broady                      BY: /s/ Tim D. Torno
    --------------------                          ----------------
    George K. Broady,                             Tim D. Torno
    Title: Chief Executive Officer                Print Name: Tim D. Torno




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