ULTRAK INC, DEF 14A, 1995-05-26

ULTRAK INC
DEF 14A, 1995-05-26
ELECTRICAL APPARATUS & EQUIPMENT, WIRING SUPPLIES

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.1a-11(c) or
Section 240.1a-12

ULTRAK, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)

ULTRAK, INC.
------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (check the appropriate box):

[ ] $125 per Exchange Act Rules 0-11(c)(l)(ii), 14a-6(i)(I), or
14a-6(j)(2)
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11

1) Title of each class of securities to which
transaction applies:

2) Aggregate number of securities to which transaction
applies:

3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11(1):

4) Proposed maximum aggregate value of transaction:

[ X ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.

1) Amount previously paid: $125

2) Form, Schedule or Registration Statement No.:
Schedule 14A

3) Filing Party: Ultrak, Inc.

4) Date Filed: April 6, 1995

- -------------------

(1) Set forth amount on which the filing is calculated and state how it was
determined.
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ULTRAK, INC.
1220 CHAMPION CIRCLE, SUITE 100
CARROLLTON, TEXAS 75006

April 28, 1995

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders
of Ultrak, Inc. to be held at 3000 Thanksgiving Tower, Dallas, Texas 75201 at
9:00 a.m., Dallas time, on Thursday, May 25, 1995.

The attached Notice of Annual Meeting and Proxy Statement fully
describe the formal business to be transacted at the Meeting, which includes
voting on a proposal to change the Company's state of incorporation from
Colorado to Delaware, the election of five directors and the approval of
independent certified public accountants of the Company.

Directors and officers of the Company will be present to help host the
meeting and to respond to any questions that our shareholders may have. I hope
you will be able to attend.

The Company's Board of Directors believes that a favorable vote for
the reincorporation of the Company in the State of Delaware is in the best
interests of the Company and its shareholders and unanimously recommends a vote
"FOR" the proposal. The Company's Board of Directors believes that a favorable
vote for each person nominated to serve as a director of the Company and for
approval of Grant Thornton LLP as the firm of independent certified public
accountants to audit the accounts of the Company for the fiscal year ending
December 31, 1995 are in the best interests of the Company and its shareholders
and unanimously recommends a vote "FOR" each such director and "FOR" approval
of Grant Thornton LLP as the Company's independent certified public
accountants. Accordingly, we urge you to review the accompanying material
carefully and to return the enclosed Proxy promptly.

Please sign, date and return the enclosed Proxy without delay. If you
attend the Meeting, you may vote in person even if you have previously mailed a
Proxy.

Sincerely,

George K. Broady
Chairman of the Board
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ULTRAK, INC.
1220 CHAMPION CIRCLE, SUITE 100
CARROLLTON, TEXAS 75006

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 1995

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of Ultrak, Inc. (the "Company" or "Ultrak") will be held at 3000
Thanksgiving Tower, Dallas, Texas 75201 on Thursday, May 25, 1995 at 9:00 a.m.
Dallas, Texas time, for the following purposes:

(1) to consider and act upon a proposal to change the state of
incorporation of the Company, effective as of December 29,
1995, from Colorado to Delaware by adoption of a Plan and
Agreement of Merger (a copy of which is set forth in the Proxy
Statement) pursuant to which the Company will be merged with
and into a newly formed Delaware subsidiary wholly-owned by
the Company. The merger, if approved and made effective, will
result in important changes in the Certificate of
Incorporation and By-Laws of the Company and in the rights of
shareholders, as more fully set forth in the Proxy Statement;

(2) to elect five directors to serve until the next Annual Meeting
of Shareholders or until their respective successors are
elected and qualified;

(3) to consider and act upon a proposal to approve the selection
by the Board of Directors of Grant Thornton LLP as the firm of
independent certified public accountants to audit the accounts
of the Company for the fiscal year ending December 31, 1995;
and

(4) to transact such other business as may properly come before
the Meeting or any adjournment thereof.

The close of business on April 14, 1995 has been fixed as the record
date for determining shareholders entitled to notice of and to vote at the
Meeting or any adjournment thereof. For a period of at least ten days prior to
the Meeting, a complete list of shareholders entitled to vote at the Meeting
shall be open to the examination of any shareholder during ordinary business
hours at the offices of the Company at 1220 Champion Circle, Suite 100,
Carrollton, TX 75006.

Information concerning the matters to be acted upon at the Meeting is
set forth in the accompanying Proxy Statement.

SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING IN PERSON
ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED
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PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.

By Order of the Board of Directors,

Tim D. Torno
Secretary

Carrollton, Texas
April 28, 1995
<PAGE> 5
ULTRAK, INC.
1220 CHAMPION CIRCLE, SUITE 100
CARROLLTON, TEXAS 75006

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 1995

This Proxy Statement is being first mailed on April 14, 1995 to
shareholders of Ultrak, Inc., a Colorado corporation (the "Company" or
"Ultrak"), by the Board of Directors to solicit proxies (the "Proxies") for use
at the Annual Meeting of Shareholders (the "Meeting") to be held at 3000
Thanksgiving Tower, Dallas, Texas 75201 on Thursday, May 25, 1995, at 9:00
a.m., Dallas, Texas time or at such other time and place to which the Meeting
may be adjourned.

The purpose of the Meeting is to consider and act upon (i) a proposal
to change the state of incorporation of the Company from Colorado to Delaware
by adoption of a Plan and Agreement of Merger pursuant to which the Company
will be merged with and into a newly formed Delaware subsidiary wholly-owned by
the Company; (ii) the election of five directors; (iii) the approval of
independent certified public accountants; and (iv) such other matters as may
properly come before the Meeting or any adjournment thereof.

All shares represented by valid Proxies, unless the shareholder
otherwise specifies, will be voted FOR (i) the change of the state of
incorporation of the Company from Colorado to Delaware; (ii) the election of
the five persons named under "Election of Directors" as nominees for election
as directors of the Company; (iii) the approval of Grant Thornton LLP as the
firm of independent certified public accountants to audit the accounts of the
Company for the fiscal year ending December 31, 1995; and (iv) at the
discretion of the Proxy holders with regard to any other matters that may
properly come before the Meeting or any adjournment thereof. Where a
shareholder has appropriately specified how a Proxy is to be voted, it will be
voted accordingly.

The Proxy may be revoked at any time by providing written notice of
such revocation to the person named as proxy, by voting in person at the
Meeting or by giving a later Proxy.

RECORD DATE AND VOTING SECURITIES

The record date for determining the shareholders entitled to vote at
the Meeting will be the close of business on April 14, 1995 (the "Record
Date"), at which time the Company had issued and outstanding approximately
6,555,619 shares of Common Stock, no par value ("Common Stock"), and 195,351
shares of Series A 12% Cumulative Convertible Preferred Stock, $5.00 par value
("Series A Preferred Stock") (the Common Stock and the Series A Preferred Stock
are sometimes collectively referred to herein as the "Voting Shares"). The
Voting Shares constitute the only outstanding voting securities of the Company
entitled to be voted at the Meeting.

QUORUM AND VOTING

The presence, in person or by Proxy, of the holders of Voting Shares
holding a majority of the votes entitled to be cast is necessary to constitute
a quorum at the Meeting. Each holder of shares of Common Stock is entitled to
one vote and each holder of shares of Series A Preferred
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Stock is entitled to 16.667 votes with respect to each matter (including the
reincorporation of the Company and the election of directors) to be voted on at
the Meeting. Assuming the presence of a quorum, the affirmative vote equal to
at least a majority of the votes cast at the Meeting, in person or by Proxy, is
required for approval of the change of the state of incorporation of the
Company from Colorado to Delaware, election of directors and approval of
independent public accountants. Abstentions will be included in vote totals
and, as such, will have the same effect as a negative vote. Where nominee
recordholders do not vote on specific issues because they did not receive
specific instructions on such proposal from the beneficial owners of such
shares ("broker nonvotes"), such broker nonvotes will not be included in vote
totals and, as such, will not be considered as votes cast.

REINCORPORATION OF THE COMPANY IN DELAWARE

GENERAL

On March 10, 1995, the Board of Directors of the Company at a special
meeting approved a proposal to change the Company's state of incorporation to
Delaware effective as of December 29, 1995, and to submit such proposal to the
Company's shareholders. At the Meeting, the shareholders will be asked to
consider and act upon the proposal to change the state of incorporation of the
Company from Colorado to Delaware. This change will be accomplished by merging
the Company into Ultrak, Inc., a Delaware corporation (herein referred to as
"Ultrak-Delaware" or the "Surviving Corporation"), which is a wholly-owned
Delaware subsidiary of the Company formed solely for that purpose.

The merger of the Company into Ultrak-Delaware will be effected
pursuant to the Plan and Agreement of Merger (the "Agreement") between the
Company and Ultrak-Delaware attached hereto as Exhibit A. The Agreement
provides that, when the merger becomes effective, Ultrak-Delaware will continue
as the Surviving Corporation under the name "Ultrak, Inc." The description of
the merger contained herein accurately describes the material effect of the
merger on stockholders. For a complete description of the terms of the merger,
stockholders should refer to the Agreement.

The affirmative vote of the holders of at least a majority of the
votes represented by all outstanding shares of the Company's Common Stock and
Series A Preferred Stock (voting as a single class) entitled to vote as of the
Record Date will be required for the adoption of the merger proposal. Because
current management controls shares of Common Stock and Series A Preferred Stock
entitled to a majority of the votes to be cast, it is assured that the merger
proposal will receive the requisite vote of shareholders of the Company needed
for approval of the proposal. The Agreement provides that the Board of
Directors has the right to terminate the Agreement and abandon the merger for
any reason whatsoever notwithstanding shareholder approval.

Pursuant to the Agreement, the Board of Directors of the Company will
become the Board of Directors of the Surviving Corporation. See "Board of
Directors." The management of the Company will continue as the management of
the Surviving Corporation. The merger will not involve any change in the
business or properties of the Company. The Surviving Corporation will succeed
to all the assets and be responsible for all the liabilities of the Company,
including obligations under the Company's 1988 Nonqualified Stock Option Plan.
Although the purposes of the Surviving Corporation set forth in its Certificate
of Incorporation will permit it in the future to enter into any lawful business
activity, no change in the present business of the Company is now contemplated,
except as new developments and opportunities may occur.

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There are certain differences between the Certificate of Incorporation
and the By-Laws of the Company and the Surviving Corporation, as well as
differences in the corporate law of the States of Colorado and Delaware, which
will affect the Company and its shareholders. See "Significant Differences in
Corporate Law of Colorado and Delaware" and "Certificate of Incorporation and
By- Laws."

The Surviving Corporation is authorized to issue 20,000,000 shares of
common stock, $0.01 par value, and 2,000,000 shares of Preferred Stock, $5.00
par value, including 195,351 shares of Series A Preferred Stock. See
"Certificate of Incorporation and By-Laws." Upon the merger becoming
effective, the Company's shareholders will become shareholders of the Surviving
Corporation, and each outstanding share of Common Stock of the Company will
become one share of Common Stock of the Surviving Corporation and each
outstanding share of Series A Preferred Stock of the Company will become one
share of Series A Preferred Stock of the Surviving Corporation. The Common
Stock of the Surviving Corporation will have the same relative rights,
preferences, privileges and restrictions as the Company's Common Stock. The
Series A Preferred Stock of the Surviving Corporation will have the same
relative rights, preferences, privileges and restrictions as the Company's
Series A Preferred Stock. The merger will not cause any change in the
qualification of the Company's Common Stock on the NASDAQ National Market
System. It will not be necessary for holders of Common Stock of the Company to
exchange their existing certificates for new certificates representing Common
Stock of the Surviving Corporation. It is anticipated that delivery of the
present stock certificates of the Company will constitute "good delivery" for
transactions in shares of Common Stock of the Surviving Corporation after the
effective date of the merger.

In connection with the merger, the Company's authorized Common Stock,
no par value, will be converted into the Surviving Corporation's authorized
Common Stock, $0.01 par value.

Shareholders of the Company shall, subject to and by complying with
Section 7-113-202 of the Colorado Business Corporation Act, have the right to
object to the merger, which will result in the right to receive payment for the
fair value of their shares and the other rights and benefits provided by the
Colorado Business Corporation Act (see "Rights of Dissenting Shareholders to
Receive Payment for Shares").

The Company has reserved the right to abandon the plan of
reincorporation either before or after shareholder approval, if circumstances
arise which in the opinion of the Board of Directors make it inadvisable to
proceed.

REASONS FOR REINCORPORATION

The Board of Directors of the Company believes that the best interests
of the Company and its shareholders will be served by reincorporating in
Delaware in order to have the benefits afforded by a more flexible corporation
law. Delaware has a well- established policy of continuously reviewing and
updating its corporate laws. Consistent with this policy, the corporate laws
of Delaware are frequently revised and Delaware currently has a flexible and
modern statute governing the conduct of corporate affairs.

Thousands of corporations, including a great many of the larger
corporations in this country, are now incorporated in Delaware. The number of
corporations maintaining their domicile in Delaware over the years has resulted
in a judiciary particularly familiar with many phases of corporate matters and
a substantial body of decisions construing its laws and establishing public
policy affecting

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its corporations. Based on the well developed and predictable nature of the
Delaware corporate law, management believes that the ongoing operations and
business of the Company can be carried on to better advantage if the Company is
incorporated under the laws of Delaware. See "Significant Differences in
Corporate Law of Colorado and Delaware."

Delaware has in effect an anti-takeover statute that would, following
the reincorporation, make it difficult for a potential acquirer to effect a
takeover or change in control of the Company without management's consent and
the consent of the Company's shareholders. Accordingly, the reincorporation
will have the effect of making it more difficult to remove the existing
management of the Company. Colorado does not have a comparable statute.
Management is unaware of any person accumulating the Company's voting
securities or seeking to take control of the Company, but believes that
reincorporation in Delaware is still desirable for the reasons described above,
notwithstanding the anti-takeover effect of reincorporation. Since current
management beneficially owns approximately 28% of the Common Stock and 100% of
the Series A Preferred Stock, representing approximately 52% of the votes in
matters to be voted upon by the shareholders of the Company, the
reincorporation will not have a practical effect on the likelihood of success
of an unfriendly attempt to effect a takeover or change in control of the
Company.

BOARD OF DIRECTORS

The Agreement provides that upon the effective date of the merger the
Board of Directors of the Surviving Corporation shall be composed of those
members of the Board of Directors of the Company who are elected at the meeting
(see "Election of Directors").

CERTIFICATE OF INCORPORATION AND BY-LAWS

The Agreement provides that the Certificate of Incorporation and the
By-Laws of Ultrak-Delaware will be the Certificate of Incorporation and the
By-Laws of the Surviving Corporation. The Certificate of Incorporation and
By-Laws of the Company and the Certificate of Incorporation and By-Laws of the
Surviving Corporation are substantially similar; however, some differences do
exist. Among other things, the By-Laws of the Surviving Corporation contain
indemnification provisions, whereas the By-Laws of the Company do not address
indemnification (although the Certificate of Incorporation of each addresses
indemnification), and the By-Laws of the Surviving Corporation do not have
certain provisions contained in the By-Laws of the Company restricting the
officers of the Company from entering into certain contracts and incurring
certain indebtedness without board of director approval. See "Indemnification
of Directors and Officers." The Certificate of Incorporation and By-Laws of the
Surviving Corporation are attached hereto as Exhibits B and C, respectively.

SIGNIFICANT DIFFERENCES IN CORPORATE LAW OF COLORADO AND DELAWARE

Management is of the opinion that, except as described below (for
example, written consents of shareholders, appraisal rights of dissenting
shareholders, required vote of shareholders needed to take certain actions,
anti-takeover legislation, etc.), there are no substantial differences relating
to the rights of shareholders between the Certificate of Incorporation and
By-Laws of the Company and those of the Surviving Corporation.

There are a number of significant differences between the applicable
corporate laws of the States of Colorado and Delaware. Although no attempt has
been made to summarize all differences in the corporate laws of such states,
management believes the following to be a fair summary of the

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significant differences in the corporate laws of the States of Colorado and
Delaware which could affect the Company's shareholders:

PREEMPTIVE RIGHTS

Under Colorado corporation law, shareholders of the Company
are permitted to have preemptive rights to purchase new shares unless
prohibited in the Certificate of Incorporation; the Company's
Certificate of Incorporation does prohibit such rights. Under
Delaware corporation law, shareholders do not have such preemptive
rights unless there is a specific provision granting such rights in
the Certificate of Incorporation. The Certificate of Incorporation of
the Surviving Corporation will not contain such a provision.
Accordingly, the reincorporation will not have a practical impact on
the preemptive rights of shareholders. Management of the Company
believes that not providing for mandatory preemptive rights in the
Certificate of Incorporation of the Surviving Corporation is desirable
to afford greater flexibility in possible future financings. Although
the Board has no present plans for any financing which would give rise
to preemptive rights, satisfaction of such rights would probably
represent an undesirable impediment to the use of such financings.

EXAMINATION OF BOOKS AND RECORDS

Under Colorado corporation law, a person must have been a
shareholder for at least three months, or be the holder of record of
at least five percent of all outstanding shares of any class of stock
of a corporation in order to examine certain records of the
corporation, including the minutes of meetings of the board of
directors and board committees, accounting records and shareholder
records. Under Delaware corporation law, any shareholder with a
proper purpose may demand inspection of the records of the
corporation.

DIVIDENDS

Under Delaware corporation law, a corporation may pay
dividends to its shareholders either out of surplus (net assets in
excess of stated capital), or in case there is no surplus, out of net
profits for the then current fiscal year and the preceding fiscal
year, with certain limitations. Under Colorado corporation law,
dividends may be paid out of net assets available after providing for
satisfaction of preferential rights of shareholders whose preferential
rights are superior to those receiving the dividend.

VOTES OF SHAREHOLDERS

Colorado corporation law provides that because the Company was
in existence prior to June 30, 1994, unless the Certificate of
Incorporation provides otherwise, the vote of two-thirds of all
outstanding shares entitled to vote is required to amend the corporate
charter, to dissolve a corporation, to effect a merger or
consolidation or to sell, lease or exchange all or substantially all
of the corporation's assets. The Certificate of Incorporation of the
Company permits such actions to be taken upon vote of a majority of
the outstanding shares entitled to vote. Under Delaware corporation
law and the Certificate of Incorporation of the Surviving Corporation,
the vote of a majority of the outstanding stock entitled to vote is
required to amend the corporate charter, to dissolve a corporation, to
effect a merger or consolidation or to sell, lease or exchange all or
substantially all of the corporation's assets. Under both Colorado
and Delaware law, action by the Board of Directors, as well as the

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shareholders, is required to amend the corporate charter, effect a
merger or consolidation or the sale, lease or exchange of its assets.
Accordingly, the reincorporation will not have a practical impact on
the vote of shareholders necessary to approve significant corporate
transactions.

CUMULATIVE VOTING

Delaware corporation law permits a corporation to provide
cumulative voting by including a provision to that effect in its
Certificate of Incorporation. The Certificate of Incorporation of the
Surviving Corporation will not have a provision permitting cumulative
voting. Under Colorado corporation law, shareholders have cumulative
voting unless prohibited in the Certificate of Incorporation. The
Certificate of Incorporation of the Company currently prohibits
cumulative voting; accordingly, the reincorporation will not have a
practical impact on such rights of shareholders.

ACTION BY WRITTEN CONSENT WITHOUT A MEETING

Under Colorado corporation law, shareholders may take action
without meetings by unanimous written consent of the shareholders
entitled to vote. Under Delaware corporation law, shareholders may
take action without meetings by written consent signed by the holders
of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting
at which all shares entitled to vote thereon were present and voted.
Since Mr. Broady will own in the aggregate more than a majority of the
votes represented by the Surviving Corporation's Common Stock and
Series A Preferred Stock, he will have the power to act by written
consent to authorize any action which requires shareholder approval,
without the vote of any other shareholders.

ANTI-TAKEOVER LEGISLATION

Delaware has enacted a statute which prevents a "business
combination" between an "interested shareholder" and a Delaware
corporation for a period of three years after such shareholder became
an interested shareholder, unless certain conditions are met.
Colorado corporation law does not contain a parallel provision. The
Delaware statute defines a business combination as any merger or
consolidation, any sale, lease, exchange or other disposition of 10%
or more of a corporation's assets, or any transaction (subject to
certain exceptions) which results in the transfer of stock of a
corporation to the interested shareholder, increases his proportionate
ownership of a corporation's stock or results in such interested
shareholder receiving the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the
corporation. The Delaware statute defines an interested shareholder
as (subject to certain exceptions) any person who is the owner of 15
percent or more of the outstanding voting stock of the corporation or
a person who is an affiliate or associate of the corporation who
became the owner of 15 percent or more of the outstanding voting stock
of the corporation within the three-year period prior to the date on
which it is sought to determine whether such shareholder is
interested. A business combination is exempt from the effect of the
statute if, among other things, either (i) prior to the date the
shareholder became interested, the board of directors approved either
the business combination or the transaction that resulted in the
shareholder becoming interested, (ii) upon consummation of the
transaction that resulted in the shareholder becoming interested, such
shareholder owned at least 85 percent of the corporation's voting

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stock at the time the transaction commenced, or (iii) on or after the
date the shareholder becomes interested, the business combination is
approved by the board of directors and authorized at an annual or
special meeting of shareholders by the affirmative vote of at least
two-thirds of the outstanding voting stock not owned by the interested
shareholder.

The anti-takeover statute provides that the Certificate of
Incorporation of a Delaware corporation may provide that the
corporation expressly elects not to be governed by the statute. The
Certificate of Incorporation of the Surviving Corporation does not
include such a provision.

The effect of reincorporation in Delaware, and thereby
subjecting the Company to the anti-takeover statute, will make it more
difficult for a person who seeks to acquire control of the Company or
to effect a business combination with the Company, such as a tender
offer, to do so without management's approval, thereby making it more
difficult to remove existing management of the Company. The Delaware
statute could, therefore, potentially have an adverse impact on
shareholders who wish to participate in any such tender offer or other
transactions even where such transaction may be favorable to the
interests of shareholders.

The reincorporation could have the effect of discouraging
hostile tender offers, proxy contests or other transactions by forcing
potential acquirers to negotiate with incumbent management. The
disadvantages to shareholders of the reincorporation in Delaware
include reducing the likelihood that a hostile tender offer at a
premium over market price for the Company's shares will be made. The
reincorporation will have a practical effect on shareholders by making
it more difficult to remove existing management without such
management's approval.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

A significant effect of the reincorporation will be to broaden
the indemnification protection given to directors and officers.
Delaware permits corporations to adopt much broader rights of
indemnification for management than does Colorado. In recent years,
many corporations have found it increasingly difficult to attract and
retain qualified directors and senior management, due to the increased
risks of lawsuits and related liability. At the same time, it has
become increasingly difficult, and expensive, to obtain insurance
protecting directors and officers from such liabilities. As a result,
many corporations are utilizing expanded rights of indemnification as
a means to attract, retain and protect directors and senior
management. In the past, the Company has encountered some difficulty
in attracting and retaining qualified directors because of Colorado's
indemnification law. One current director expressed his concern about
Colorado's indemnification law before agreeing to serve as a director.
The Surviving Corporation has no present intention of entering into
separate indemnification agreements with management, but may do so in
the future.

Delaware law makes indemnification available to directors,
officers, employees and agents of a corporation, whereas Colorado law
provides indemnification only to directors (and officers who are not
directors, in certain cases) of a corporation, although a Colorado
corporation may indemnify officers, employees or agents of the
corporation who are not directors if provided for by its articles of
incorporation, by-laws, a resolution of its shareholders or directors,
or in a contract. In addition, whereas Colorado's indemnification

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provisions limit indemnification rights contained in the articles of
incorporation, by-laws, resolutions or contracts to such rights as are
consistent with Colorado law, Delaware permits a corporation to
provide by agreement, by-law provision, vote of shareholders or
disinterested directors or otherwise, for indemnification of directors
and officers not otherwise provided by statute, which is a more
permissive standard. Under Colorado law, expenses can be advanced to
a director, officer or employee only upon, among other things, a
written affirmation of his good faith belief that he has met the
applicable standard of conduct for indemnification. Delaware law
contains no such requirements. Delaware law, unlike Colorado law,
also expressly permits indemnification and advancement of expenses to
former officers, employees or agents of the corporation who were not
directors. Colorado law requires that shareholders be given notice of
the payment of indemnification if such payment arises out of a
derivative suit. Delaware law contains no such requirement. Colorado
law limits indemnification in derivative suits to expenses only,
whereas the By-Laws of the Surviving Corporation, as permitted by
Delaware law, provide indemnification in derivative suits for fines,
judgments and amounts paid in settlement. Under Colorado law, a
director who is adjudged liable to the corporation for deriving an
improper personal benefit can only be reimbursed for expenses and only
upon a determination of a court that indemnification is proper. In
Delaware, such a director could also be indemnified for fines,
judgments and amounts paid in settlement and a court determination is
not necessary.

The Certificate of Incorporation and By-Laws of
Ultrak-Delaware, like the Certificate of Incorporation of the Company,
contain broad indemnification provisions which (i) obligate
Ultrak-Delaware to indemnify any of its officers, directors, employees
or agents for all expenses (including legal fees) and liabilities
(including fines, judgments and amounts paid in settlement) incurred
in connection with any pending or completed suit, action or
proceeding, including derivative suits; provided, however, that such
person is entitled to indemnification only if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interest of Ultrak-Delaware, and with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct
was unlawful; (ii) provides for indemnification rights for as long as
any such person shall be subject to any possible claim or threatened
suit or proceeding by reason of the fact that such person was or is a
director, officer, employee or agent of Ultrak-Delaware; (iii)
requires Ultrak-Delaware to advance expenses to any person entitled to
indemnification provided that such person undertakes to repay the
amount advanced if it is ultimately determined that he is not entitled
to indemnification; (iv) provides for the determination of whether
indemnification is proper because the requisite standard of conduct
has been met to be made by a majority vote of a quorum of directors
who were not parties to such action, suit or proceeding, or by
independent legal counsel or by the shareholders of Ultrak-Delaware;
and (v) provides that such charter and by-law provisions shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may legally be entitled.
Differences include, the Certificate of Incorporation of the Company
requires the unanimous vote of each class of shares entitled to vote
to amend the indemnification provision of the Certificate of
Incorporation, while the Certificate of Incorporation of
Ultrak-Delaware contains no such provision. Further, the Certificate
of Incorporation of Ultrak-Delaware provides that a written request
for indemnification should be responded to within 60 days. No such
provision exists in the Certificate of Incorporation of the Company.

8
<PAGE> 13
To the knowledge of management of the Company, no actions are
pending or threatened which would affect in any way the rights of any
person entitled to indemnification, whether under Colorado or Delaware
law.

DISSOLUTION

Under Colorado corporation law and the Company's Certificate
of Incorporation, the Company can voluntarily dissolve upon its board
of directors adopting a resolution setting forth a proposal to
dissolve which proposal is approved by a majority of the shareholders
entitled to vote thereon. Under Delaware law, a corporation can
voluntarily dissolve if its board of directors and a majority of the
shareholders entitled to vote thereon approve the dissolution, or
without approval of the board of directors if all the shareholders
entitled to vote approve the dissolution.

LIABILITY OF DIRECTORS

Under Delaware law, directors are jointly and severally liable
to a corporation for willful or negligent violations of statutory
provisions relating to the purchase or redemption of a corporation's
own shares or the payment of dividends, for a period of six years from
the date of such unlawful act. A director who was either absent or
dissented from the taking of such action may exonerate himself from
liability by causing his dissent to be entered in the corporation's
minutes. Under Colorado law, directors are jointly and severally
liable to the corporation if they vote for or assent to acts which
violate statutory provisions relating to the purchase of a
corporation's own shares, the payment of dividends, the distribution
of assets in liquidation or any loans or guarantees made to a
director, until the repayment thereof. Under Colorado law, there is
no express standard of conduct which can protect a director from
liability nor any express statute of limitations with respect to any
such illegal acts by a director, as there are under Delaware law, and
directors are not liable as long as they did not vote for or assent to
any of the illegal acts. Colorado law, unlike Delaware law, allows a
director who was present at a meeting which approved an illegal act to
avoid liability, even if he does not register his dissent in the
minutes of the meeting, by voting against the illegal act.

RIGHTS OF DISSENTING SHAREHOLDERS

Shareholders of the Company are presently entitled under
Colorado corporation law to receive payment for their shares if they
dissent from certain corporate actions, such as mergers,
consolidations or sales of all or substantially all of the Company's
assets. Under Delaware corporation law, there is no such right to
receive payment in a sale of assets and there is no such right to
receive payment in a merger or consolidation under the following
circumstances. The Common Stock of the surviving corporation in the
merger or consolidation must be listed on a national securities
exchange or held of record by 2,000 or more persons and the only
consideration that the shareholders may receive in the merger or
consolidation is stock of the corporation resulting from the merger or
consolidation or stock of a listed company with 2,000 or more
shareholders and cash in lieu of fractional shares.

9
<PAGE> 14
RIGHT OF DISSENTING SHAREHOLDERS TO RECEIVE PAYMENT FOR SHARES

The following is a summary of appraisal rights available to
shareholders of the Company, which summary is not intended to be a complete
statement of the applicable Colorado law. For more detailed information with
respect to such appraisal rights see Article 113 of the Colorado Business
Corporation Act, set forth in its entirety as Exhibit D hereto.

Any shareholder of the Company wishing to dissent from the merger and
obtain cash payment for his shares must file with the Company, prior to the
vote on the merger, a written notice of his intention to demand that he be paid
fair compensation for his shares if the merger is effectuated and must refrain
from voting his shares in approval of the merger.

If the merger is approved by the required vote at the Meeting, the
Company will mail within ten days after the consummation of the merger a notice
to all shareholders who gave due notice of intention to demand payment and who
refrained from voting, providing instructions as to how to obtain payment for
their shares. A shareholder who fails to demand payment or fails to deposit
his certificate for payment within 30 days of mailing of such notice by the
Company will have no right to receive payment for his shares but will retain
all other rights of a shareholder of the Company and will become a stockholder
of the Surviving Corporation on the consummation of the Merger.

Immediately upon effectuation of the merger or upon receipt of demand
for payment, if the merger has already been effectuated, the Company will remit
(the "Remittance") to a dissenter who has made demand and who has deposited his
certificates the amount which the Company estimates to be the fair value of the
shares, with accrued interest, if any. The Remittance will be accompanied by
certain financial information of the Company and a statement regarding the
Company's estimate of the fair value of the shares, together with a notice of
the dissenter's rights to demand supplemental payment and a copy of the
appraisal provisions of the Colorado Business Corporation Act.

If the Company fails to remit payment for the dissenter's shares as
required by the preceding paragraph or if the dissenter believes that the
amount remitted is less than the fair value of his shares or that the interest
is not correctly determined, he may, within thirty days after the date of
mailing of the Remittance, mail to the Company his own estimate of the value of
the shares or of the interest and demand payment of the deficiency. If he
fails to do so, he shall be entitled to no more than the Remittance.

If the Company's calculation and the dissenting shareholder's
calculation of fair value for the shares remains unsettled, the Company shall
file in an appropriate court, within sixty days of the dissenting shareholder's
request for payment, a petition requesting that the fair value of the shares
and interest thereon be determined by the court. Dissenters who have not
settled their demands will be entitled to participate in such proceeding. If
the Company fails to file a petition as provided in this paragraph, each
dissenter who has made a demand and who has not already settled his claim
against the Company shall be paid by the Company the amount demanded by him
with interest and may sue therefor in an appropriate court.

EFFECTIVE DATE OF THE MERGER

Subject to the satisfaction of the conditions of the merger, it is
contemplated that the merger will be made effective as of December 29, 1995.

10
<PAGE> 15
FEDERAL INCOME TAX CONSEQUENCES

Under current Federal income tax law, the Company, Ultrak-Delaware and
the shareholders of the Company who do not exercise their rights as dissenting
shareholders pursuant to Section 7-113-102 of the Colorado Business Corporation
Act will not, by reason of the merger, realize any gain or loss which will be
recognized for Federal income tax purposes. With respect to each dissenting
shareholders's shares of Common Stock, immediately after the merger (i) the tax
basis of such shares will equal the tax basis of such shareholder's shares
immediately before the merger and (ii) the holding period for such shares will
include the shareholder's holding period for the shares before the merger. Any
gain or loss realized by shareholders of the Company who exercise their rights
to appraisal will be recognized for Federal income tax purposes. Generally,
such recognized gain or loss will be equal to the difference between a
shareholder's tax basis in his shares and the amount he receives for his
shares. However, if a dissenting shareholder continues to own an interest in
the Surviving Corporation, directly or indirectly, after the merger then the
amount received upon exercise of appraisal rights might be taxed as a dividend.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors unanimously recommends that the shareholders
vote in favor of the merger since it believes that the changes resulting from
the merger will be in the best interests of the Company and its shareholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ADOPTION OF THE PLAN AND
AGREEMENT OF MERGER.

11
<PAGE> 16
ELECTION OF DIRECTORS

There are five directors to be elected for terms expiring at the
Company's Annual Meeting of Shareholders in 1996 or until their respective
successors are elected and qualified. The persons nominated for election as
director are listed below. Each of the nominees has indicated his willingness
to serve as a member of the Board of Directors if elected; however, in case any
nominee shall become unavailable for election to the Board of Directors for any
reason not presently known or contemplated, the Proxy holders will have
discretionary authority in that instance to vote the Proxy for a substitute.

GEORGE K. BROADY, age 56, is Chairman of the Board, Chief Executive
Officer and President of the Company. Mr. Broady became Chairman of the Board,
President and Chief Executive Officer in March 1991. Prior to that date, Mr.
Broady was actively involved as Owner and President of Geneva Merchant Bankers
of Dallas, Texas. Until December 1987, Mr. Broady was chairman and chief
executive officer of Network Security Corporation, a company that he founded in
1970. Network Security Corporation and the publicly-held stock of its
controlled subsidiary was sold to Inspectorate International, a Swiss company,
in 1987 for $165 million. Mr. Broady received his BS (cum laude) from Iowa
State University in 1960. Mr. Broady devotes substantially all of his
executive time to the Company.

JAMES D. PRITCHETT, age 48, is a Director, the Executive Vice
President and Chief Operating Officer of the Company. Mr. Pritchett joined
the Company in September 1988 as Chief Operating Officer. He was promoted to
Executive Vice President in October 1991. From October 1, 1980 to September 1,
1988, Mr. Pritchett was executive vice president and chief operating officer of
Booth, Inc., Carrollton, Texas, a manufacturer of electronic equipment. Mr.
Pritchett received his Bachelor of Science Degree in Mechanical Engineering
from the University of Texas at Arlington in 1969, and his Masters in
Mechanical Engineering in 1972 from Southern Methodist University, Dallas,
Texas. Mr. Pritchett was appointed to the Board of Directors on August 14,
1989. From 1969 to 1972, he was an engineer with LTV Aerospace and from 1972
to 1978 he was product manager for Thermalloy, Inc. He was a research and
development engineer with Glitech, Inc. from 1978 to 1980.

WILLIAM C. LEE, age 55, has been the Senior Vice President of the
Annuity Board of the Southern Baptist Convention of Dallas, Texas, a $4.5
billion dollar pension and insurance management company, since July 1991. Mr.
Lee served as Managing Director of Geneva Merchant Bankers of Dallas, Texas
from 1989 until 1991 and as an executive officer and director of several major
southwestern banking companies for the prior 27 years. Mr. Lee earned his BBA
from Texas A & M University in 1962 and his MBA from Southern Methodist
University in 1966. Mr. Lee is a CPA in the State of Texas and a member of the
American Institute of CPAs, the Texas Society of CPAs, the Financial Executives
Institute and the American Institute of Image Management.

CHARLES C. NEAL, age 36, has been President of Chas. A. Neal & Company
of Miami, Oklahoma, a company which owns interests in oil and gas properties
and in various corporations in several industries, including banking, since
1989. From 1985 to 1989, Mr. Neal was with Merrill Lynch & Co. in New York
City, performing investment banking, general corporate finance and mergers and
acquisitions services for a variety of clients. Mr. Neal is also a director of
several privately held companies. Mr. Neal received his BA in Economics in
1981 from the University of Oklahoma and a JD/MBA from the University of
Chicago Law School and Graduate School of Business in 1985.

12
<PAGE> 17
ROBERT F. SEXTON, age 60, has been President of Bakery Associates,
Inc. of Dallas, Texas, a company which brokers bakery packaging goods, since
1983. From 1973 to 1983, Mr. Sexton was Executive Vice President and a
director of Campbell Taggart, Inc. of Dallas, Texas, one of the nation's
largest baking companies. Campbell Taggart was listed on the New York Stock
Exchange prior to its acquisition by Anheuser Busch in 1982. Mr. Sexton is
also a director of Republic Gypsum Company, a corporation which manufactures
and distributes paperboard. Mr. Sexton earned his BBA in industrial management
in 1956 from the University of Texas.

BOARD OF DIRECTORS AND COMMITTEES

In June 1994, the Company established the Audit Committee of the Board
of Directors. The Audit Committee, composed of Messrs. Lee and Neal, is
responsible for (i) reviewing the scope of, and the fees for, the annual audit
of the Company, (ii) reviewing with the independent auditors the Company's
corporate accounting practices and policies, (iii) reviewing with the
independent auditors their final report, (iv) reviewing with independent
auditors overall accounting and financial controls and (v) being available to
the independent auditors during the year for consultation purposes. The Audit
Committee met twice in 1994.

In June 1994, the Company also established the Compensation Committee
of the Board of Directors. The Compensation Committee, composed of Messrs.
Lee, Neal and Pritchett, is responsible for determining the nature and amount
of compensation for the executive officers of the Company, and for granting
stock options under the Company's stock option plan. The Compensation
Committee met three times in 1994.

During 1994, there were three regular meetings and one special meeting
of the Board of Directors, and all directors of the Company attended at least
75% of all meetings of the Board of Directors and each of the committees on
which they served.

13
<PAGE> 18
DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
George K. Broady 56 Chairman of the Board, Chief Executive
Officer and President

James D. Pritchett 48 Director, Executive Vice President and Chief
Operating Officer

Tim D. Torno 38 Vice President-Finance, Secretary, Treasurer
and Chief Financial Officer
</TABLE>

See "Election of Directors" for business experience information
concerning Messrs. Broady and Pritchett.

Tim D. Torno, Vice President-Finance, Secretary, Treasurer and Chief
Financial Officer. Mr. Torno has been the Secretary, Treasurer and Chief
Financial Officer of the Company since August 23, 1988. From May 1980 to
August 19, 1988, Mr. Torno was employed by KPMG Peat Marwick in Denver, New
York, and Corpus Christi, Texas, in various capacities including senior
manager. Mr. Torno received a BBA in Accounting (cum laude) from Texas A & M
University, College Station, Texas, in 1979 and a Masters of Business
Administration (with honors) in 1993 from the University of Phoenix, Denver,
Colorado. Mr. Torno is a CPA in the States of Texas and Colorado, and is a
member of the American Institute of CPAs and the Texas Society of CPAs. He
serves on the Executive Board of the Distribution Resources Company Users
Group.

14
<PAGE> 19
EXECUTIVE COMPENSATION

The following summary sets forth all annual and long-term compensation
paid or accrued to the Company's Chief Executive Officer and each of the
Company's executive officers earning in excess of $100,000 during 1994 for
services rendered to the Company during the fiscal years ended December 31,
1994, 1993 and 1992.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------- ----------------------
AWARDS
----------------------
SECURITIES
NAME AND OTHER RESTRICTED UNDERLYING
PRINCIPAL ANNUAL STOCK OPTIONS/ ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION AWARDS SARS (1) COMPENSATION(2)
--------- ---- ------ ----- ------------ ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
George K. Broady, 1994 $ 240,000 $ 54,750 - - - $1,613
Chief Executive
Officer and 1993 $ 212,762 - - - - $1,104
President
1992 $ 100,000 - - - - -

James D. 1994 $ 164,000 $ 61,200 - - - $2,737
Pritchett,
Executive Vice 1993 $ 154,078 $ 38,094 - - - $1,799
President
1992 $ 125,000 $ 48,202 - - - $ 792

-
Tim D. Torno, 1994 $ 105,000 $ 36,000 - - - $1,872
Vice President-
Finance, 1993 $ 86,400 $ 23,700 - - 20,833 $1,322
Secretary,
Treasurer and 1992 $ 75,674 - - - - $ 426
Chief Financial
Officer
</TABLE>

(1) SARs is defined as stock appreciation rights.
(2) Company's contribution to employee's 401(k).

15
<PAGE> 20
OPTION/SAR GRANTS

There were no individual grants of stock options (whether or not in tandem with
SARs) and freestanding SARs made during 1994 to the named executive officers.

The Company adopted a Nonqualified Stock Option Plan (the "Plan") on
April 15, 1988. The Plan (amended November 1, 1991 and December 28, 1993)
relates to a total of 833,333 shares of Common Stock. Options to purchase such
shares may be issued to full-time employees, including officers, chosen by the
Company's Board of Directors (which has delegated such authority to the
Compensation Committee). The options vest based upon full-time employment with
the Company at the rate of 20% per year over a five-year period. The options
expire ten years from the date of grant. The option exercise price is based
upon the approximate current value of the Company's Common Stock on the date of
grant. Options which are vested may be exercised at any time thereafter and
prior to the expiration of the option.

The options may be exercised for the entire amount of optioned shares
granted in the event (i) the optionee dies or becomes disabled, (ii) the
Company is merged, consolidated or reorganized, (iii) the Company is dissolved
or liquidated, (iv) substantially all property and assets of the Company are
sold, (v) if more than 50% ownership of the Company is transferred, or (vi) if
the employee is terminated, but not for cause, and his written employment
agreement so provides. Further, if an employee is dismissed for cause,
unexercised options to the extent vested may be exercised for 30 days before
automatically expiring.

As of December 31, 1994, options relating to 532,959 shares were
outstanding at exercise prices ranging from $1.20 per share to $7.50 per share.
Of the total options, options to purchase 313,851 shares were subject to
options held by the three executive officers of the Company. The option
exercise price is set by the Board of Directors on the date of grant near or at
the then verifiable market price of the Company's Common Stock. During 1994,
47,500 options were granted to employees of the Company at the then market
price. During 1994, 600 options were exercised by two employees. In 1994,
14,167 options which had been granted to one former employee were cancelled.

16
<PAGE> 21
OPTION/SAR GRANTS, EXERCISES AND HOLDINGS

There were no exercises of stock options (or tandem SARs) and
freestanding SARs during 1994 by each of the named executive officers. The
unexercised options owned by the named executive officers as of December 31,
1994 are presented below:

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED IN-
UNEXERCISED THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SHARES VALUE AT 12/31/94 AT 12/31/94
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE # ($) UNEXERCISABLE UNEXERCISABLE
---- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
George K. Broady - - 83,311/ $413,639/
55,540 275,756

James D. Pritchett - - 110,000/ $557,499/
6,666 22,498

Tim D. Torno - - 39,167/ $186,563/
16,166 27,187
</TABLE>

REPORT ON REPRICING OF OPTIONS/SARS

There were no adjustments or amendments during 1994 to the exercise
price of any stock options or SARs previously awarded to any of the named
executive officers.

LONG-TERM INCENTIVE PLAN (LTIP) AWARDS

There were no awards made to named executive officers during 1994 under
any LTIP. However, the Company has adopted a policy to compensate its
executive officers and key employees with annual bonuses. Essentially the
policy is to evaluate, on an annual basis, each officer's or key employee's
entitlement, if any, to a bonus. The Compensation Committee, in its sole
discretion, may award a bonus of up to 50% of an employee's base salary, based
on achievement of certain operating goals, asset management, employee
development and improvement in other areas considered important and valuable to
the Company. For 1994 an executive officer bonus pool was established based on
the weighted average of the bonuses earned by all of the Company's sales
managers. Once the executive officer bonus pool was designated, bonuses were
awarded to officers based on subjective, informal criteria applied by the
Compensation Committee.

EMPLOYEE BENEFIT PLANS

The Company does not sponsor any defined benefit or actuarial plans.
However, the Company does sponsor a 401(k) plan for all eligible employees
whereby the Company matched 30% during 1994 of the employees's contribution up
to 6% of the employee's base salary. In 1994, Messrs. Broady, Pritchett and
Torno received $1,613, $2,737 and $1,872, respectively, in matching 401(k)
contributions under the program.

17
<PAGE> 22
During 1994, the Company provided a medical insurance program for its
full-time employees of which it paid 50% of the premium. As of December 31,
1994, the Company did not have any life insurance or any defined benefit
retirement or pension plans for its employees, officers or directors other than
a keyman life insurance policy on George K. Broady in the amount of $1.0
million.

The Company has a policy that all loans from the Company or its
subsidiaries to its officers, directors and key employees or their affiliates
must be approved by a majority of disinterested directors. There were no loans
to officers, directors and/or key employees or their affiliates during 1994.

COMPENSATION OF DIRECTORS

Each director of the Company serves until the next annual meeting of
the Company's shareholders or until his successor is elected and qualified.
Each independent director receives a fee of $1,000 for each Board of Directors'
meeting and $500 for each committee meeting attended, and officers and
directors are generally reimbursed for out-of-pocket expenses incurred in
connection with attendance at Board of Directors and committee meetings.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

Messrs. James D. Pritchett, Executive Vice President of the Company and
Tim D. Torno, Secretary-Treasurer and Chief Financial Officer, have written
employment agreements with the Company with varying terms and provisions. The
Company has no termination of employment or change-in-control arrangements,
except as to the substantive effect of Mr. Broady's stock ownership.

Mr. Pritchett's employment agreement, entered into in 1988, provides
for a two year term, but automatically extends for one year periods. Mr.
Torno's employment agreement was also entered into in 1988, but was replaced
with a new agreement in 1990, which is for a one year term but automatically
extends for one year periods. The employment agreements set Mr. Pritchett and
Mr. Torno's base salaries at $90,000 and $80,000, respectively, however, the
Board of Directors and, most recently, the Compensation Committee have decided
to compensate the two at higher rates.

The employment agreements also contain standard provisions relating to
the employee being entitled to participation in the Company's 1988 Nonqualified
Stock Option Plan and participation in a bonus program. The agreements provide
that the employee is to be reimbursed for reasonable expenses incurred in
connection with the Company's business and certain relocation expenses. The
agreements further provide for standard paid vacations, other health and
accident coverage and insurance benefits.

The Company may terminate the employment agreements if the employee
commits a breach of the agreement, is convicted of a criminal offense, becomes
bankrupt, grossly neglects the performance of his duties or becomes chemically
addicted to alcohol, drugs or any controlled substance. If terminated by the
Company for any of those reasons, it is considered cause, and upon termination
for cause, all benefits, including all stock options previously granted to the
employee, are cancelled and rendered null and void. In the event the Company
terminates the employee without cause, then all options become exercisable for
the full amount of the optioned shares and the employee is entitled to receive
all compensation he would otherwise have been entitled to receive under the
terms of the agreement and all other benefits. If the employee terminates the
agreement

18
<PAGE> 23
for any reason, he is entitled to exercise only those options which have been
fully vested at the time of termination and he must exercise them within 30
days of the date of termination.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

In June 1994, the Board of Directors created a Compensation Committee
of the Board of Directors. William C. Lee, Charles C. Neal and James D.
Pritchett are members of the Compensation Committee. Messrs. Lee and Neal are
independent directors. Mr. Pritchett is the Executive Vice President and
Chief Operating Officer of the Company. Prior to the creation of the
Compensation Committee, the entire Board of Directors, then composed of George
K. Broady and Mr. Pritchett, established executive salaries. Mr. Broady is
the Chairman of the Board, Chief Executive Officer and President of the
Company.

Since July 1993, the Company has provided Veravision, Inc.
("Veravision") with a working capital line of credit in return for interest on
the borrowed funds and warrants to purchase Veravision's capital stock. On
December 30, 1994, Mr. Broady, the Chairman of the Board, Chief Executive
Officer and President of the Company, guaranteed the repayment of certain
indebtedness of Veravision to the Company. Prior to the Company making the
line of credit available to Veravision, Mr. Broady had no relationship with
Veravision. Prior to Mr. Broady's guarantee, Veravision had granted the
Company warrants to purchase 59% of Veravision's capital stock on a
fully-diluted basis. Mr. Broady guaranteed certain amounts due under notes
made by Veravision to the Company. At December 31, 1994, the amount guaranteed
by Mr. Broady was approximately $470,000 and the total amount of indebtedness
of Veravision to the Company was $900,000. In consideration of his guaranty,
the Company transferred warrants to purchase approximately 30% of Veravision's
capital stock to Mr. Broady. Should the amount covered by Mr. Broady's
guaranty increase, the Company would be obligated to transfer warrants to
purchase additional shares of Veravision stock to Mr. Broady. Veravision is a
supplier of certain dental camera products to the Company. Purchases by the
Company of Veravision products in 1994 totaled $875,000. At present, Mr.
Broady's only relationship with Veravision is in his capacity as a guarantor of
certain debt owed to the Company by Veravision (as described above) and as the
holder of warrants to acquire approximately 30% of Veravision's stock. Mr.
Broady is neither an officer nor director of Veravision.

During 1994 the Company made purchases of approximately $265,000 from
Ultrak Electronics Limited, a Hong Kong corporation of which Mr. Broady owns
30% of the outstanding capital stock. The Company believes that the purchases
were made at prices and on terms at least as favorable to the Company as those
which could have been obtained in an arm's length transaction with an
unaffiliated party.

19
<PAGE> 24
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Prior to June 1994, the Company did not have a Compensation Committee.
Consequently, the base salary and the bonus criteria for each of the Company's
executive officers for 1994 were established by the Company's Board of
Directors. At that time, the Company's Board of Directors consisted of George
K. Broady and James D. Pritchett. Compensation of the Chief Executive Officer
was determined by the Company's Board of Directors using subjective, informal
criteria, which were loosely based on the Company's performance and using
limitations provided in the Company's Loan Agreement with Petrus Fund, L.P.
The increase in salaries and bonuses for the named executive officers from 1993
to 1994, was determined by arriving at an appropriate base salary for the Chief
Executive Officer based on a survey published by a big six accounting firm and
then determining the other officers' base salary based on a subjectively
determined percentage of the Chief Executive Officer's salary.

The Board of Directors created the Compensation Committee of the Board
of Directors in June 1994 comprised of Charles C. Neal, William C. Lee and
James D. Pritchett. The Compensation Committee views executive compensation as
consisting of three main components: base salary and benefits, annual
incentives and long-term incentives. The Compensation Committee's objective is
to attract, retain and motivate executive officers through this combination to
achieve strategic and financial objectives to create value for the shareholders
of Ultrak. The Compensation Committee is in the process of creating a total
compensation package which will determine compensation primarily on
performance-based, objective criteria, such as net income, net income per
share, return on equity and returns to shareholders through long-term
appreciation of the Company's stock. The Compensation Committee would like to
encourage ownership of Ultrak stock by the executive officers and to tie a
large portion of the executive officers' compensation to the performance of the
Company's stock and hence to align executive officers' interests more closely
with shareholders' interests. The Compensation Committee also wants to have a
discretionary component to reward exceptional individual achievement.

Since June 1994, the Compensation Committee has undertaken a thorough
review of the Company's current levels of executive compensation in light of
the Compensation Committee's policy objectives. This review included a
comprehensive survey of compensation in comparable companies, as well as
analysis of specific Ultrak plans. In its review the Compensation Committee
relied heavily on information provided by Towers Perrin, a nationally
recognized expert in compensation, and, to a lesser extent, on other publicly
available surveys. Based on this review, the Compensation Committee concluded
that the executive officers of the Company were undercompensated in 1994 by
comparison with companies of similar size, industry and performance (the
companies analyzed have no relationship with the peer group used in the
performance graph). To rectify this, the Compensation Committee has adjusted
the base salaries of the executive officers for 1995 to bring such salaries
closer to the median salaries for such positions in comparable companies. In
addition, the Compensation Committee has, effective in 1995, revised the annual
bonus program to make it more dependent on the achievement of the budgeted net
income before taxes of the Company. For 1994, an executive officer bonus pool
was established based on the weighted average of the bonuses earned by all of
the Company's sales managers. Once the executive officer bonus pool was
designated, bonuses were awarded to officers based on subjective, informal
criteria applied by the Compensation Committee. The Compensation Committee has
also requested the officers of the Company to recommend a long-term incentive
program for the Company which is based on objective criteria and which
encourages long-term ownership by executive officers of Ultrak stock.

20
<PAGE> 25
Charles C. Neal
George K. Broady
William C. Lee
James D. Pritchett

PERFORMANCE GRAPH

The following chart compares the cumulative total shareholder return on
the Company's Common Stock during the five fiscal years ended December 31, 1994
with the cumulative total return on the NASDAQ market index and a peer group
index. The peer group consists of all of the publicly-traded companies with
the same two digit SIC code (wholesale trade - durable goods). A listing of
the companies in the peer group can be obtained without charge by writing
Ultrak, Inc., 1220 Champion Circle, Suite 100, Carrollton, Texas 75006,
Attention: Investors Relations. The Company relied upon information provided
by the University of Chicago Center for Research in Securities Prices with
respect to the peer group stock performance. The Company did not attempt to
validate the information supplied to it other than to review it for
reasonableness. The comparison assumes $100 was invested on December 29, 1989
in the Company's Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends, if any. Adjustments have been made to give
retroactive effect to the December 1993 one-for-six reverse stock split.

21
<PAGE> 26

[PERFORMANCE GRAPH]

<TABLE>
<CAPTION>
CRSP TOTAL RETURNS
INDEX FOR: 12/29/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
------------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ultrak, Inc. 100.0 34.8 160.9 143.5 165.2 165.2

Nasdaq Stock Market 100.0 84.9 136.3 158.6 180.9 176.9
(US Companies)

NASDAQ Stocks (SIC 100.0 91.3 155.8 159.6 207.1 180.6
5000-5099 US
Companies)
</TABLE>

22
<PAGE> 27
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT

The following table sets forth certain information concerning the beneficial
ownership of the Company's Common Stock and Series A Preferred Stock as of
December 31, 1994 by (i) each person who is known to the Company to own
beneficially more than five percent of the outstanding shares of Common Stock
or the outstanding shares of Series A Preferred Stock of the Company and their
address, (ii) each executive officer and director, (iii) each nominee for
director and (iv) all executive officers and directors as a group.

Common Stock (1) Series A Preferred Stock (1)
-------------------------- --------------------------------
Shares Percentage Shares Percentage
------ ---------- ------ ----------
<S> <C> <C> <C> <C>
George K. Broady 2,313,229(2) 32.83% 195,351(6) 100%
Chairman of the Board,
Chief Executive Officer
and President
1220 Champion Circle
Suite 100
Carrollton, Texas 75006

James D. Pritchett 136,396(3) 2.05% -0- -0-
Executive Vice President,
Chief Operating Officer
and Director

William C. Lee, 26,667 * -0- -0-
Director

Charles C. Neal, 154,908(4) 2.36% -0- -0-
Director

Robert F. Sexton 103,066(5) 1.57% -0- -0-
Nominee

Tim D. Torno 39,457(6) * -0- -0-
Secretary, Treasurer and
Chief Financial Officer

All executive officers and 2,670,657(2)(7) 37.12% 195,351(8) 100%
directors as a group
(five persons)
</TABLE>

- -----------------

(1) Except as otherwise indicated, the persons named in the table possess
sole voting and investment power with respect to all shares shown as
beneficially owned.

(2) Includes 166,667 shares held by a trust for the benefit of members of
Mr. Broady's extended family, of which Mr. Broady serves as sole
trustee, 83,311 shares of Common Stock issuable upon exercise of stock
options and 406,981 shares issuable upon conversion of shares of
Series A Preferred Stock owned by Mr. Broady. Mr. Broady disclaims
beneficial ownership of the shares of Common Stock owned by the trust.

23
<PAGE> 28
(3) Includes 110,000 shares of Common Stock issuable upon exercise of
options held by Mr. Pritchett.

(4) Comprised of 9,650 shares owned by Pantheon, Incorporated, a
corporation owned by Mr. Neal and his wife, and 145,258 shares owned
by Chas. A. Neal & Company, a corporation of which Mr. Neal is
President.

(5) Includes 5, 556 shares owned by Mr. Sexton's wife.

(6) Includes 39,167 shares of Common Stock issuable upon exercise of
options held by Mr. Torno.

(7) Includes options to purchase an aggregate of 149,167 shares held by
Messrs. Pritchett and Torno.

(8) The Series A Preferred Stock has 16.667 votes per share. Through
ownership of Common and Series A Preferred Stock, over 50% of the
voting power of all of the outstanding capital stock is held by Mr.
Broady.

* less than 1%

CERTAIN TRANSACTIONS

During 1994 the Company made purchases of approximately $265,000 from
Ultrak Electronics Limited, a Hong Kong corporation of which Mr. Broady owns
approximately 30% of the capital stock. The Company believes that the terms of
these purchases were made at prices and on terms at least as favorable to the
Company as those which could have been obtained in an arm's length transaction
with an unaffiliated party.

24
<PAGE> 29
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS

Grant Thornton LLP has served as independent certified public
accountants to audit the accounts of the Company for the fiscal year ending
December 31, 1994. If the shareholders of the Company do not approve such
appointment, the Board of Directors will not appoint the firm as auditors for
the fiscal year ending December 31, 1995. Representatives of Grant Thornton
LLP are expected to be present at the Meeting with the opportunity to make a
statement if they desire to do so and to be available to respond to appropriate
questions.

OTHER BUSINESS

The Board of Directors knows of no matter other than those described
herein that will be presented for consideration at the Meeting. However,
should any other matters properly come before the Meeting or any adjournment
thereof, it is the intention of the persons named in the accompanying Proxy to
vote in accordance with their best judgment in the interest of the Company.

SHAREHOLDER PROPOSALS

Shareholders may submit proposals on matters appropriate for
shareholder action at subsequent annual meetings of the Company consistent with
Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended.
For such proposals to be considered for inclusion in the Proxy Statement and
Proxy relating to the 1996 Annual Meeting of Shareholders, such proposals must
be received by the Company not later than January 16, 1996. Such proposals
should be directed to Ultrak, Inc., 1220 Champion Circle, Suite 100,
Carrollton, Texas 75006, Attention: Secretary.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors and persons who own more than 10% of the
Common Stock or securities convertible into Common Stock, to file with the
Securities and Exchange Commission ("SEC") and the NASDAQ National Market
System reports of ownership and reports of changes in ownership in the Common
Stock and securities convertible into Common Stock of the Company. Such
officers, directors and greater than 10% shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.

To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no other
reports were required during its fiscal year ended December 31, 1994, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% shareholders were complied with.

MISCELLANEOUS

All costs incurred in the solicitation of Proxies will be borne by the
Company. In addition to the solicitation by mail, officers and employees of
the Company may solicit Proxies by telephone, telegraph or personally, without
additional compensation. The Company may also make arrangements with brokerage
houses and other custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of shares of Common Stock held
of record by such persons, and the Company may reimburse such brokerage houses
and other custodians, nominees and fiduciaries for their out-of-pocket expenses
incurred in connection therewith.

25
<PAGE> 30
The Company's Annual Report for the fiscal year ended December 31,
1994 (the "Annual Report"), accompanies this Proxy Statement. The Annual
Report is not to be deemed part of this Proxy Statement.

By Order of the Board of Directors,

Tim D. Torno
Secretary

Carrollton, Texas
April 28, 1995

26
<PAGE> 31
EXHIBIT A

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger is executed as of__________________,
1995, by and between Ultrak, Inc., a Colorado corporation ("Parent"), and
Ultrak, Inc., a Delaware corporation ("Subsidiary").

WITNESSETH:

WHEREAS, the authorized capital stock of Subsidiary consists of
20,000,000 shares of Common Stock, $0.01 par value ("Subsidiary Common Stock"),
and 2,000,000 shares of Preferred Stock, $5.00 par value ("Subsidiary Preferred
Stock"), 195,351 shares of which have been designated Series A 12% Cumulative
Convertible Preferred Stock ("Subsidiary Series A Preferred Stock"), of which
1,000 shares of Subsidiary Common Stock are issued and outstanding and owned by
Parent; and

WHEREAS, the authorized capital stock of Parent consists of 20,000,000
shares of Common Stock, no par value ("Parent Common Stock") and 2,000,000
shares of Preferred Stock, $5.00 par value ("Parent Preferred Stock"), 195,351
shares of which have been designated Series A 12% Cumulative Convertible
Preferred Stock ("Parent Series A Preferred Stock"), of which approximately
6,560,000 shares of Parent Common Stock and 195,351 shares of Parent Series A
Preferred Stock are issued and outstanding; and

WHEREAS, the respective boards of directors and shareholders of Parent
and Subsidiary deem it to be desirable and in the best interest of the
respective corporations that the two corporations merge into a single
corporation (the "Merger"), and, pursuant to resolutions duly adopted, such
boards of directors and shareholders have approved and adopted this Agreement;

NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements and covenants contained herein, the parties hereto agree as follows:

ARTICLE I

Section 1.1. In accordance with the provisions of the Colorado
Business Corporation Act and the Delaware General Corporation Law at the
Effective Time (defined below) of the Merger, Parent shall be merged into
Subsidiary, which shall be the surviving corporation (in its capacity as such
surviving corporation Subsidiary is hereinafter sometimes referred to as the
"Surviving Corporation", and Parent and Subsidiary are hereinafter sometimes
referred to collectively as the "Constituent Corporations"), and as such
Subsidiary shall continue to be governed by the laws of the State of Delaware.

Section 1.2. The Merger shall become effective on December 29, 1995
or such later date as the Articles of Merger, executed, adopted and approved in
accordance with the Delaware General Corporation Law, shall have been filed
with the Secretary of State of Delaware. The time when the Merger shall become
effective is herein called the "Effective Time." The actions described above

<PAGE> 32
shall be conclusive evidence, for all purposes of this Agreement, of compliance
with all conditions precedent.

Section 1.3. Except as may otherwise be set forth herein, at the
Effective Time, the corporate existence and identity of Subsidiary, with all
its purposes, powers, franchises, privileges, rights and immunities shall
continue under the laws of the State of Delaware, unaffected and unimpaired by
the Merger, and the corporate existence and identity of Parent, with all its
purposes, powers, franchises, privileges, rights and immunities, shall be
merged with and into Subsidiary and the Surviving Corporation shall be vested
fully therewith, and the separate corporate existence and identity of Parent
shall thereafter cease, except to the extent continued by applicable law. At
the Effective Time, the Surviving Corporation shall have the following rights
and obligations:

(a) The Surviving Corporation shall have all the rights,
privileges, immunities and powers, and shall be subject to all of the
duties and liabilities, of a corporation organized under the laws of
the State of Delaware.

(b) The Surviving Corporation shall succeed to, without
other transfer, and shall possess and enjoy, all of the rights,
privileges, immunities, powers, purposes and franchises, of both a
public and private nature, of the Constituent Corporations and all
property, real, personal and mixed, and all debts due to either of the
Constituent Corporations on whatever account and all other choses in
action, and every other interest of or belonging to either of the
Constituent Corporations shall be deemed to be transferred to and
vested in the Surviving Corporation without further act or deed, and
shall thereafter be the property of the Surviving Corporation as they
were of the respective Constituent Corporations, and the title to any
real estate vested by deed or otherwise in either of said Constituent
Corporations shall not revert or be in any way impaired by reason of
the Merger.

(c) The Surviving Corporation shall thenceforth be
responsible and liable for all debts, liabilities, obligations and
duties of either of the Constituent Corporations, and any claim
existing or action or proceeding pending by or against either
Constituent Corporation may be prosecuted as if the Merger had not
occurred, or the Surviving Corporation may be substituted in its
place. Neither the rights of creditors nor any liens upon the
property of either Constituent Corporation shall be impaired by the
Merger.

Section 1.4. If at any time the Surviving Corporation shall deem or
be advised that any further transfers, assignments, conveyances, assurances in
law or other acts or things are necessary or desirable to vest or confirm in
the Surviving Corporation the title to any property or assets of either of the
Constituent Corporations, each Constituent Corporation and its proper officers
and directors shall execute and deliver any and all such proper transfers,
assignments, conveyances and assurances in law, and shall do all other acts and
things as are necessary or proper to vest or confirm title to such property and
assets in the Surviving Corporation and to otherwise carry out the purposes and
intent of this Agreement.

ARTICLE II

Section 2.1. The Certificate of Incorporation of Subsidiary in effect
at the Effective Time shall constitute the Articles of Incorporation of the
Surviving Corporation until amended, altered or repealed in the manner provided
by law.

2
<PAGE> 33
Section 2.2. The By-Laws of Subsidiary in effect at the Effective
Time shall be the By-Laws of the Surviving Corporation, until amended, altered
or repealed.

Section 2.3. The directors of Subsidiary at the Effective Time shall
be the directors of the Surviving Corporation and shall hold office in
accordance with the By-Laws of the Surviving Corporation until the next annual
meeting of shareholders of the Surviving Corporation or until their respective
successors are elected and qualified.

Section 2.4. The officers of Subsidiary at the Effective Time shall
be the officers of the Surviving Corporation and shall hold office subject to
the Bylaws of the Surviving Corporation.

ARTICLE III

Section 3.1. At the Effective Time, the manner of exchanging the
outstanding Common Stock of the Constituent Corporations shall be as follows:

(a) Each share of Parent Common Stock outstanding
immediately prior to the Effective Time, except all shares of Parent
Common Stock held by Parent in its treasury, which shall be cancelled
and no shares issued in respect thereof, shall, at the Effective Time,
by virtue of the Merger and without action on the part of the holder
thereof, be converted into one share of the Subsidiary Common Stock.

(b) Each share of Parent Series A Preferred Stock
outstanding immediately prior to the Effective Time shall, at the
Effective Time, by virtue of the Merger and without action on the part
of the holder thereof, be converted into one share of the Subsidiary
Series A Preferred Stock, which is identical in all respects,
including rights, preferences and designations, to the Parent Series A
Preferred Stock.

(c) Each share of Subsidiary Common Stock outstanding
immediately prior to the Effective Time shall, at the Effective Time,
by virtue of the Merger and without any action on the part of the
holder thereof, be cancelled and returned to the status of authorized
but unissued stock of the Surviving Corporation.

(d) No fractional shares of Subsidiary Common Stock or
Subsidiary Series A Preferred Stock and no certificates or scrip
certificates therefor shall be issued.

(e) All of the shares of Subsidiary Common Stock and
Subsidiary Series A Preferred Stock, when delivered pursuant to the
provisions of this Agreement, shall be validly issued, fully paid and
nonassessable.

(f) If any stock certificate evidencing shares of
Subsidiary Common Stock and/or Subsidiary Series A Preferred Stock is
requested to be issued in a name other than that in which the
surrendered Parent stock certificate is registered, it shall be a
condition of such issuance that the surrendered stock certificate
shall be properly endorsed in blank or otherwise in proper form for
transfer and that the person requesting such exchange pay to the
Surviving Corporation any applicable transfer or other taxes or
establish to the satisfaction of the Surviving Corporation that any
such tax has been paid or is not payable.

3
<PAGE> 34

ARTICLE IV

Section 4.1. This Agreement may be executed by the parties hereto in
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one instrument.

Section 4.2. Subject to applicable law, this Agreement may be
amended, modified or supplemented only by written agreement of Parent and
Subsidiary at any time prior to the Effective Time.

Section 4.3. This Agreement may be terminated at any time prior to
the Effective Time by mutual agreement of the parties hereto.

IN WITNESS WHEREOF, each of the Constituent Corporations has caused
this Agreement to be executed on its behalf by its respective officers hereunto
duly authorized as of the date first above written.

ULTRAK, INC.
a Colorado corporation

By:
-------------------------------
George K. Broady, President

ULTRAK, INC.,
a Delaware corporation

By:
-------------------------------
George K. Broady, President

4
<PAGE> 35
EXHIBIT B

CERTIFICATE OF INCORPORATION
OF
ULTRAK, INC.

1. The name of the Corporation is Ultrak, Inc.

2. The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, Corporation Trust Center, in
the City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust
Company.

3. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the
General Corporation Law of Delaware.

4. Capital Stock

A. Common Stock.

The aggregate number of common shares which this
Corporation shall have authority to issue is Twenty Million
(20,000,000) shares with a par value of One Cent ($0.01) each,
which shares shall be designated "Common Stock".

B. Preferred Stock.

The aggregate number of preferred shares which this
Corporation shall have authority to issue is Two Million
(2,000,000) shares with a par value of Five Dollars ($5.00) each,
which shares shall be designated "Preferred Stock". Included in
such number of shares of Preferred Stock are 195,351 shares which
have been designated as "Series "A" 12% Cumulative Convertible
Preferred Stock," the rights and preferences of which are set
forth in full or referred to in paragraph H of this Article 4.

Shares of Preferred Stock may be issued from time to
time in one or more series, each such series to have distinctive
serial designations (other than a designation containing the term
"Series A") as shall be determined in the resolution or
resolutions providing for the issue of such Preferred Stock from
time to time adopted by the Board of Directors pursuant to
authority so to do which is hereby vested in the Board of
Directors, which resolutions shall be filed with the Secretary of
State of the State of Delaware as required by law.

Each series of Preferred Stock as shall be established
by the Board of Directors

(a) may have such number of shares;

(b) may have such voting powers, full or limited, or
may be without voting powers;

<PAGE> 36
(c) may be subject to redemption at such time or times
and at such prices;

(d) may be entitled to receive dividends (which may be
cumulative or noncumulative) at such rate or rates, on such
conditions, from such date or dates, and at such times, and
payable in preference to, or in such relation to, the dividends
payable on any other class or classes or series of stock;

(e) may have such rights upon the dissolution of, or
upon any distribution of the assets of, the Corporation;

(f) may be made convertible into, or exchangeable for,
shares of any other class or classes or of any other series of
the same or any other class or classes of stock of the
Corporation at such price or prices or at such rates of exchange,
and with such adjustments;

(g) may be entitled to the benefit of a sinking fund
or purchase fund to be applied to the purchase or redemption of
shares of such series in such amount or amounts;

(h) may be entitled to the benefit of conditions and
restrictions upon the creation of indebtedness of this
Corporation or any subsidiary, upon the issue of any additional
stock (including additional shares of such series or of any other
series), and upon the payment of dividends or the making of other
distributions on, and the purchase, redemption or other
acquisition by this Corporation or any subsidiary of any
outstanding stock of this Corporation; and

(i) may have such other relative, participating,
optional or other special rights, qualifications, limitations or
restrictions thereof;

all as shall be stated in said resolution or resolutions
providing for the issue of such Preferred Stock.

C. Treasury Shares.

Shares of any series of Preferred Stock which have been
redeemed (whether through the operation of a sinking fund or
otherwise) or purchased by the Corporation, or which, if
convertible or exchangeable, have been converted into or
exchanged for shares of stock of any other class or classes,
shall have the status of authorized and unissued shares of
Preferred Stock and may be reissued as a part of the series of
which they were originally a part or may be reclassified and
reissued as part of a new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors or as part
of any other series of Preferred Stock, all subject to the
conditions or restrictions on issuance set forth in the
resolution or resolutions adopted by the Board of Directors
providing for the issue of any series of Preferred Stock and to
any filing required by law.

2
<PAGE> 37
D. Dividends.

Dividends in cash, property or shares of the
Corporation may be paid upon the Common Stock as and when
declared by the Board of Directors, out of funds of the
Corporation to the extent and in the manner permitted by law,
except that no Common Stock dividend shall be paid for any year
unless the holders of Preferred Stock, if any, shall receive the
maximum allowable Preferred Stock dividend for such year
applicable to each respective series, plus any required dividends
accumulated from prior years.

E. Distribution Upon Liquidation.

Except as otherwise provided by the resolution or
resolutions of the Board of Directors providing for the issue of
any series of Preferred Stock, upon any liquidation, dissolution
or winding up of the Corporation, and after paying or adequately
providing for the payment of all its obligations, the remainder
of the assets of the Corporation shall be distributed, either in
cash or in kind, first pro rata to the holders of Preferred Stock
until the required amount to be distributed to the Preferred
Stock has been distributed, and the remainder pro rata to the
holders of the Common Stock.

F. Voting.

Each outstanding share of Common Stock shall be
entitled to one vote. Cumulative voting shall not be allowed in
the election of directors of the Corporation. Except as provided
in paragraph H of this Article 4 with respect to Series A
Cumulative Convertible Preferred Stock, shares of Preferred Stock
shall not be entitled to any vote, except as required by law, in
which case each share of Preferred Stock shall be entitled to one
vote, or except as otherwise provided by the resolution or
resolutions of the Board of Directors providing for the issue of
any series of the Preferred Stock.

G. Preemptive Rights.

Except as otherwise provided by the resolution or
resolutions of the Board of Directors providing for the issue of
any series of Preferred Stock, no holder of any shares of the
Corporation, whether now or hereafter authorized, shall have any
preemptive or preferential right to acquire any shares or
securities of the Corporation, including shares or securities
held in the treasury of the Corporation.

H. Series A 12% Cumulative Convertible Preferred Stock.

One Hundred Ninety-five Thousand Three Hundred
Fifty-one (195,351) shares of the Corporation's Preferred Stock
shall be designated as "Series "A" 12% Cumulative Convertible
Preferred Stock" (the "Series A Preferred Stock") and shall have
the rights and preferences set forth or referred to in this
paragraph H. Certain other capitalized terms used in this
paragraph H are defined in subparagraph 7 of this paragraph H.

3
<PAGE> 38
1. Dividends.

(a) When and as declared by the Board of
Directors of the Corporation and to the extent
permitted under the General Corporation Law of
Delaware, the Corporation will pay preferential
dividends to the holders of Series A Preferred Stock.
Except as otherwise provided herein, dividends on each
share of Series A Preferred Stock will accrue
cumulatively at the rate of $0.15 per fiscal quarter to
and including the earlier of (i) the date on which the
Redemption Price of such share is paid if such share is
redeemed, or (ii) the date on which such share is
converted or (iii) the date upon which any dissolution,
liquidation or winding up of the Corporation is
effected. Dividends will be payable on each March 31,
June 30, September 30 and December 31. All dividends
will accrue whether or not such dividends have been
declared and whether or not there are profits, surplus
or other funds of the Corporation legally available for
the payment of dividends. The date on which the
Corporation initially issues any share of Series A
Preferred Stock will be deemed to be its "date of
issuance" regardless of the number of times a transfer
of such share is made on the stock records maintained
by or for the Corporation and regardless of the number
of certificates which may be issued to evidence such
share.

(b) To the extent not paid on each March
31, June 30, September 30 and December 31, all
dividends which have accrued on each share of Series A
Preferred Stock then outstanding during the three-
month period ending upon such date will be added to the
Liquidation Value of such share and will remain a part
thereof until such dividends are paid.

(c) If at any time the Corporation pays
less than the total amount of dividends then accrued
with respect to the Series A Preferred Stock, such
payment will be distributed among the holders of the
Series A Preferred Stock so that an equal amount will
be paid with respect to each outstanding share of
Series A Preferred Stock.

2. Liquidation.

Upon any liquidation, dissolution or
winding up of the Corporation, the holders of Series A
Preferred Stock will be entitled to be paid, before any
distribution or payment is made upon any other equity
securities of the Corporation, an amount in cash equal
to the sum of the aggregate Liquidation Value of all
shares of Series A Preferred Stock outstanding, and the
holders of Series A Preferred Stock will not be
entitled to any further payment. If upon any such
liquidation, dissolution or winding up, the assets of
the Corporation to be distributed among the holders of
the Series A Preferred Stock are insufficient to permit
payment to such holders of the aggregate amount which
they are entitled to be paid, then the entire assets to
be distributed will be distributed ratably among such
holders based upon the aggregate Liquidation Value of
the Series A Preferred Stock held by such holder. The
Corporation will mail written notice of such
liquidation, dissolution or winding up, not less than
60 days prior to the payment date stated therein, to
each record holder of

4
<PAGE> 39
Series A Preferred Stock. Neither the consolidation or
merger of the Corporation into or with any other
Corporation or Corporations, nor the sale or transfer
by the Corporation of all or any part of its assets,
nor the reduction of the capital stock of the
Corporation, will be deemed to be a liquidation,
dissolution or winding up of the Corporation within the
meaning of this subparagraph b.

3. Redemptions.

(a) Upon resolution of the Board of
Directors, the Corporation may redeem shares of Series
A Preferred Stock. For each such share which may be
redeemed, if any, the Corporation will be obligated to
pay to the holder thereof the Redemption Price.

(b) In the event of redemption the
Corporation will mail, unless waived by the holders,
written notice (the "Notice of Redemption") of each
such redemption to each record holder not less than 10
days prior to the date on which such redemption is to
be made. Upon mailing any Notice of Redemption, the
Corporation will become obligated (i) to redeem from
each holder the number of shares of Series A Preferred
Stock, as stated in the Notice of Redemption, to be
redeemed from such holder, and (ii) to send each record
holder a cashier's or certified check in an amount
equal to the Redemption Price of such number of shares
of Series A Preferred Stock at least five business days
prior to the date specified for redemption in the
notice. Upon receipt of such check, the record holder
of the shares of Series A Preferred Stock to be
redeemed will become obligated to surrender the
certificates representing such number of shares on or
before the date specified for redemption in the Notice
of Redemption. In case fewer than the total number of
shares represented by any certificate are redeemed, a
new certificate representing the number of unredeemed
shares will be issued to the record holder thereof in
such holder's or such holder's nominee's name, without
cost to such holder.

(c) No share of Series A Preferred Stock
is entitled to any dividends accruing after redemption.
On redemption all rights of the holder of such share
will cease, and such share will not be deemed to be
outstanding.

(d) Any shares of Series A Preferred
Stock which are redeemed or otherwise acquired by the
Corporation will be cancelled and will not be reissued,
sold or transferred.

(e) Neither the Corporation nor any
Subsidiary will redeem or otherwise acquire any Series
A Preferred Stock, except as expressly authorized
herein or pursuant to a purchase offer made pro rata to
all holders of Series A Preferred Stock on the basis of
the number of shares of such class owned by each such
holder.

5
<PAGE> 40
4. Conversion.

(a) Any holder of Series A Preferred
Stock may convert all or any of such shares held by
such holder into shares of Common Stock at any time
prior to redemption as referred to in subparagraph 3(a)
of this paragraph 6, after receipt of Notice of
Redemption. The number of shares of Common Stock which
any such holder will receive in return for the shares
converted by such holder will be 2.083.

(b) Each conversion of Series A Preferred
Stock will be deemed to have been effected as of the
close of business on the date on which the certificate
or certificates representing the shares of Series A
Preferred Stock to be converted have been surrendered
at the principal office of the Corporation. At such
time as such conversion has been effected, the rights
of the holder of such Series A Preferred Stock as such
holder will cease and the Person or Persons in whose
name or names any certificate or certificates for
shares of Common Stock are to be issued upon such
conversion will be deemed to have become the holder or
holders of record of the shares of Common Stock
represented thereby.

(i) a certificate or certificates
representing the number of shares of
Common Stock issuable by reason of such
conversion in such name or names and such
denomination or denominations as the
converting holder has specified;

(ii) payment in an amount equal
to all accrued dividends with respect to
such shares of Series A Preferred Stock
converted, which have not been paid prior
thereto; and

(iii) a certificate representing
any shares of Series A Preferred Stock
which were represented by the certificate
or certificates delivered to the
Corporation in connection with such
conversion but which were not converted.

(d) If for any reason the Corporation is
unable to pay any accrued dividends on the Series A
Preferred Stock being converted, the Corporation will
pay such dividends to the converting holder as soon
thereafter as funds of the Corporation are legally
available for such payment and such obligation will be
evidenced by the Corporation's promissory note payable
to such holder and bearing interest at the prime rate
of interest at the United Bank of Denver, N.A., or a
successor thereto, as in effect during the time such
note is outstanding.

(e) The issuance of certificates for
shares of Common Stock upon conversion of Series A
Preferred Stock will be made without charge to the
holders of such Series A Preferred Stock for any
issuance tax in respect thereof

6
<PAGE> 41
or other cost incurred by the Corporation in connection
with such conversion and the related issuance of shares
of Common Stock.

(f) The Corporation will not close its
books against the transfer of Series A Preferred Stock
or of Common Stock issued or issuable upon conversion
of Series A Preferred Stock in any manner which
interferes with the timely conversion of Series A
Preferred Stock.

(g) The Conversion Price for the Common
Stock will be $2.40 per share of Common Stock and will
not be subject to adjustment except as otherwise
specifically set forth herein.

(h) Prior to the consummation of any
Organic Change, the Corporation will make appropriate
provisions (in form and substance satisfactory to the
holders of a majority of the Series A Preferred Stock
then outstanding) to insure that each of the holders of
Series A Preferred Stock will thereafter have the right
to acquire and receive in lieu of or in addition to the
shares of Common Stock immediately theretofore
acquirable and receivable upon the conversion of such
holder's Series A Preferred Stock, such shares of
stock, securities or assets as such holder would have
received in connection with such Organic Change if such
holder had converted his Series A Preferred Stock
immediately prior to such Organic Change. In any such
case appropriate provisions (in form and substance
satisfactory to the holders of a majority of the Series
A Preferred Stock then outstanding) will be made to
insure that the provisions of this subparagraph 4(h)
will thereafter be applicable to Series A Preferred
Stock (including, in the case of any such
consolidation, merger or sale in which the successor
Corporation or purchasing Corporation is other than the
Corporation, an immediate adjustment of the Conversion
Price to the value for the Common Stock reflected by
the terms of such consolidation, merger or sale, and a
corresponding immediate adjustment in the number of
shares of Common Stock acquirable and receivable upon
conversion of Series A Preferred Stock, if the value so
reflected is less than the Conversion Price in effect
immediately prior to such consolidation, merger or
sale). The Corporation will not effect any such
consolidation, merger or sale, unless prior to the
consummation thereof, the successor corporation (if
other than the Corporation) resulting from such
consolidation or merger or the corporation purchasing
such assets assumes by written instrument (in form
reasonably satisfactory to the holders of a majority of
the Series A Preferred Stock then outstanding), the
obligation to deliver to each such holder such shares
of stock, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled
to acquire.

(i) If the Corporation subdivides (by any
stock split, stock dividend or otherwise) one or more
classes of its outstanding shares of Common Stock into
a greater number of shares, the Conversion Price in
effect immediately prior to such subdivision will be
proportionately reduced, and if the Corporation
combines (by reverse stock split or otherwise) one or
more classes of its outstanding shares of Common Stock
into a smaller number of shares, the

7
<PAGE> 42
Conversion Price in effect immediately prior to such
combination will be proportionately increased.

(j) The Corporation will send written
notice to all holders of Series A Preferred Stock at
least 20 days prior to the date on which the
Corporation closes its books or takes a record for
determining rights to vote with respect to any Organic
Change, dissolution or liquidation. The Corporation
will also give to the holders of shares of Series A
Preferred Stock at least 30 days prior written notice
of the date on which any Organic Change, dissolution or
liquidation will take place.

5. Voting Rights.

Holders of shares of Series A Preferred
Stock will be entitled to vote on all matters which are
or may be submitted to a vote of shareholders of the
Corporation permitted under the laws of the State of
Delaware. Each share, until redeemed or converted,
shall have voting rights equal to 16.667 shares of
Common Stock. Holders of the shares of Series A
Preferred Stock shall further have the same rights
accorded to holders of Common Stock on all matters
relating to the voting of such Common Stock provided by
the laws of the State of Delaware.

6. Purchase Rights.

If at any time the Corporation grants,
issues or sells any options, convertible securities or
rights to purchase stock, warrants, securities or other
property pro rata to the record holders of Common Stock
(the "Purchase Rights"), then each holder of Series A
Preferred Stock will be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate
Purchase Rights which such holder could have acquired
if such holder had held the number of shares of Common
Stock acquirable upon conversion of such holder's
Series A Preferred Stock immediately before the date on
which a record is taken for the grant, issuance or sale
of such Purchase Rights, or, if no such record is
taken, the date as of which the record holders of
Common Stock are to be determined for the grant, issue
or sale of Purchase Rights.

7. Definitions.

"Conversion Price" means $2.40, subject to
adjustment as provided in subparagraph 4(i) of this
paragraph H.

"Liquidation Value" of any share of Series
A Preferred Stock as of any particular date will be
equal to $5.00 plus any unpaid dividends on such share
of Series A Preferred Stock; and, in the event of any
liquidation, dissolution or winding up of the
Corporation or the redemption of such share of Series A
Preferred Stock, unpaid dividends on such share of
Series A Preferred Stock, regardless of whether they
have become payable, will be added to the Liquidation
Value of such share of Series A Preferred Stock, on the
payment date in any liquidation, dissolution or winding
up, or on the

8
<PAGE> 43
Redemption Date, as the case may be, accrued to the
close of business on such payment date or Redemption
Date.

"Organic Change" means any capital
reorganization, reclassification, consolidation, merger
or any sale of all or substantially all of the
Corporation's assets to another Person which is
effected in such a way that holders of Common Stock are
entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect
to or in exchange for Common Stock.

"Redemption Date" as to any share of
Series A Preferred Stock means the date specified in
the Notice of any Redemption provided that no such date
will be a Redemption Date unless the applicable
Redemption Price is actually paid in full on or before
such date, and if not so paid in full, the Redemption
Date will be the date on which such Redemption Price is
fully paid. If, however, the full Redemption Price is
not paid on the Redemption Date solely because a holder
has not surrendered his certificate(s) at the
Corporation's principal office as provided in
subparagraph 3(b) of this paragraph H, then as to such
holder the date specified herein for the scheduled
redemption shall be the Redemption Date.

"Person" means an individual, a
partnership, a joint venture, a corporation, a trust,
an unincorporated organization or a government or any
department or agency thereof.

"Redemption Price" means an amount equal
to the Liquidation Value.

"Subsidiary" means any corporation of
which shares of stock having at least a majority of the
ordinary voting power in electing the board of
directors, is, at the time as of which any
determination is being made, owned by the Corporation
either directly or indirectly through one or more
Subsidiaries.

8. Miscellaneous

(a) The Corporation will keep at its
principal office a register for the registration of
Series A Preferred Stock. Upon the surrender of any
certificate representing Series A Preferred Stock at
such place, the Corporation will, at the request of the
record holder of such certificate, execute and deliver
(at the Corporation's expense) a new certificate or
certificates in exchange therefor representing in the
aggregate the number of shares represented by the
surrendered certificate. Each such new certificate
will be registered in such name and will represent such
number of shares of Series A Preferred Stock as is
requested by the holder of the surrendered certificate
and will be substantially identical in form to the
surrendered certificate, and dividends will accrue on
the Series A Preferred Stock represented by such new
certificate from the date to which dividends have been
fully paid on such Series A Preferred Stock represented
by the surrendered certificate.

9
<PAGE> 44
(b) Upon receipt of evidence and an
agreement to indemnify reasonably satisfactory to the
Corporation (an affidavit of the registered holder,
without bond, will be satisfactory) of the ownership
and the loss, theft, destruction or mutilation of any
certificate evidencing one or more shares of Series A
Preferred Stock the Corporation will (at its expense)
execute and deliver in lieu of such certificate a new
certificate representing the number of shares of Series
A Preferred Stock represented by such lost, stolen,
destroyed or mutilated certificate, and dividends will
accrue on the Series A Preferred Stock represented by
such new certificate from the date to which dividends
have been fully paid on such lost, stolen, destroyed or
mutilated certificate.

(c) Amendments, modifications or waivers
of any of the terms hereof will be binding and
effective if the prior written consent of holders of at
least 75% of the Series A Preferred Stock outstanding
at the time such action is taken is obtained; provided
that no such action will change (i) the rate of or the
manner in which dividends on the Series A Preferred
Stock accrue or the times at which such dividends
become payable or the amount payable on redemption of
the Series A Preferred Stock, unless the prior written
consent of the holders of at least 90% of the Series A
Preferred Stock then outstanding is obtained, (ii)
except as set forth in subparagraph 4(i) of this
paragraph 8, the Conversion Price of the Series A
Preferred Stock or the number of shares or class of
stock into which the Series A Preferred Stock is
convertible, unless the prior written consent of the
holders of at least 90% of the Series A Preferred Stock
then outstanding is obtained or (iii) the percentage
required to approve any change described in clauses (i)
and (ii) above, unless the prior written consent of the
holders of at least 90% of the Series A Preferred Stock
then outstanding is obtained; and provided further that
no such change in the terms hereof may be accomplished
by merger or consolidation of the Corporation with
another corporation unless the Corporation has obtained
the prior written consent of the holders of the
applicable percentage of the Series A Preferred Stock.

(d) All notices referred to herein,
except as otherwise expressly provided, will be hand
delivered or mailed by registered or certified mail,
return receipt requested, postage prepaid, and will be
deemed to have been given when so hand delivered or
mailed.

(e) The Board of Directors shall not have
any authority to increase the number of authorized
shares of Series A Preferred Stock.

(f) Except as expressly authorized in
this paragraph H, the shares of Series A Preferred
Stock, and the holders thereof, shall be subject to the
provisions of paragraphs C, D, E, F, and G of this
Article 4.

10
<PAGE> 45
5. The name and mailing address of the incorporator is:

Timothy K. Skipworth
Gardere & Wynne, L.L.P.
Suite 3000
1601 Elm Street
Dallas, Texas 75201.

6. The number of directors of the Corporation shall be fixed in the
manner provided in the Bylaws of the Corporation, and until
changed in the manner provided in the Bylaws shall be five (5).
The names and mailing addresses of the persons who are to serve
as directors until the first annual meeting of shareholders or
until their successors are elected and qualified are as follows:

<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
George K. Broady 1220 Champion Circle, Suite 100
Carrollton, Texas 75006

William C. Lee 1220 Champion Circle, Suite 100
Carrollton, Texas 75006

Charles C. Neal 1220 Champion Circle, Suite 100
Carrollton, Texas 75006

James D. Pritchett 1220 Champion Circle, Suite 100
Carrollton, Texas 75006

Robert F. Sexton 1220 Champion Circle, Suite 100
Carrollton, Texas 75006
</TABLE>

7. Indemnification

A. Actions Other Than by or in the Right of the Corporation

The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action
by or in the right of the Corporation), by reason of the fact
that he is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise (all of such persons being hereafter referred to in
this Article as a "Corporate Functionary"), against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement or conviction, or upon
a plea of nolo

11
<PAGE> 46
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation or, with respect to any
criminal action or proceeding, that he had reasonable cause to
believe that his conduct was unlawful.

B. Actions by or in the Right of the Corporation.

The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the
fact that he is or was a Corporate Functionary against expenses
(including attorneys' fees) judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit, if he
acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Corporation,
except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation, unless and only to the
extent that the Court of Chancery or the court in which such
action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.

C. Determination of Right to Indemnification.

Any indemnification under paragraphs A or B of this
Article 7 (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a
determination that indemnification of the Corporate Functionary
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs A or B of this
Article 7. Such determination shall be made (i) by a majority
vote of the directors who are not parties to such action, suit or
proceeding, even though less than a quorum, or (ii) if there are
no such directors, or if such directors so direct, by independent
legal counsel in a written opinion or (iii) by the shareholders.

D. Right to Indemnification.

Notwithstanding the other provisions of this Article 7,
to the extent that a Corporate Functionary has been successful on
the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraphs A or B of this Article 7
(including the dismissal of a proceeding without prejudice or the
settlement of a proceeding without admission of liability), or in
defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith.

E. Prepaid Expenses.

Expenses incurred by a Corporate Functionary in
defending a civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the Corporation in
advance of the final disposition of such action, suit or
proceeding, upon receipt of an undertaking by or on behalf of the
Corporate Functionary to repay such amount if it

12
<PAGE> 47
shall ultimately be determined he is not entitled to be
indemnified by the Corporation as authorized in this Article 7.

F. Right to Indemnification upon Application; Procedure
upon Application.

Any indemnification of a Corporate Functionary under
paragraphs B, C or D, or any advance of expenses under paragraph
E, of this Article 7 shall be made promptly upon, and in any
event within 60 days after, the written request of the Corporate
Functionary, unless with respect to applications under paragraphs
B, C, or D of this Article 7, a determination is reasonably and
promptly made by a majority vote of the directors who are not
parties to such action, suit or proceeding, even though less than
a quorum, that such Corporate Functionary acted in a manner set
forth in such paragraphs as to justify the Corporation in not
indemnifying or making an advance of expenses to the Corporate
Functionary. If there are no such directors, the Board of
Directors shall promptly direct that independent legal counsel
shall decide whether the Corporate Functionary acted in a manner
set forth in such paragraphs as to justify the Corporation's not
indemnifying or making an advance of expenses to the Corporate
Functionary. The right to indemnification or advance of expenses
granted by this Article 7 shall be enforceable by the Corporate
Functionary in any court of competent jurisdiction if the Board
of Directors or independent legal counsel denies his claim, in
whole or in part, or if no disposition of such claim is made
within 60 days. The expenses of the Corporate Functionary
incurred in connection with successfully establishing his right
to indemnification, in whole or in part, in any such proceeding
shall also be indemnified by the Corporation.

G. Other Rights and Remedies.

The indemnification and advancement of expenses
provided by or granted pursuant to this Article 7 shall not be
deemed exclusive of any other rights to which any person seeking
indemnification and/or advancement of expenses may be entitled
under any other provision of this Certificate of Incorporation,
or any agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office, and shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a
Corporate Functionary and shall inure to the benefit of the
heirs, executors and administrators of such a person. Any repeal
or modification of this Certificate of Incorporation or relevant
provisions of the General Corporation Law of Delaware and other
applicable law, if any, shall not affect any then existing rights
of a Corporate Functionary to indemnification or advancement of
expenses.

H. Insurance.

Upon resolution passed by the Board of Directors, the
Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his
status as such, whether or not

13
<PAGE> 48
the Corporation would have the power to indemnify him against
such liability under the provisions of this Article 7 or the
General Corporation Law of Delaware.

I. Mergers.

For purposes of this Article 7, references to "the
Corporation" shall include, in addition to the resulting or
surviving corporation, constituent corporations (including any
constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have
had power and authority to indemnify its directors, officers,
employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation or is
or was serving at the request of such constituent corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise shall stand
in the same position under the provisions of this Article 7 with
respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate
existence had continued.

J. Savings Provision.

If this Article 7 or any portion hereof shall be
invalidated on any ground by a court of competent jurisdiction,
the Corporation shall nevertheless indemnify each Corporate
Functionary as to expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement with respect to
any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including a grand jury proceeding or
action or suit brought by or in the right of the Corporation, to
the full extent permitted by any applicable portion of this
Article 7 that shall not have been invalidated.

8. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of
Incorporation, in the manner prescribed by statute, and all
rights conferred upon shareholders herein are granted subject to
this reservation.

9. A director of the Corporation shall not, to the fullest extent
permitted by the General Corporation Law of Delaware as the same
exists or may hereafter be amended, be liable to the Corporation
or its shareholders for monetary damages for breach of his or her
fiduciary duty to the Corporation or its shareholders.

10. No contract or other transaction between the Corporation and one
or more of its directors or any other corporation, firm,
association or entity in which one or more of its directors are
directors or officers or are financially interested shall be
either void or voidable solely because of such relationship or
interest or solely because such directors are present at the
meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction or
solely because their votes are counted for such purpose if:

(a) The fact of such relationship or
interest is disclosed or known to the Board of
Directors or committee which authorizes, approves or
ratifies the contract or transaction by a vote or
consent sufficient for the purpose without counting the
votes or consents of such interested directors; or

14
<PAGE> 49
(b) The fact of such relationship or
interest is disclosed or known to the shareholders
entitled to vote and they authorize, approve or ratify
such contract or transaction by vote or written
consent; or

Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such
contract or transaction.

The undersigned, being the incorporator named above, for the
purpose of forming a corporation pursuant to the General Corporation Law of
Delaware, does make this certificate, hereby declaring and certifying that this
is his act and deed and the facts herein stated are true, and accordingly has
hereunto set his hand this ____ day of _____________, 19__.

----------------------------------
Timothy K. Skipworth

15
<PAGE> 50
EXHIBIT C

BY-LAWS

ULTRAK, INC.

(A DELAWARE CORPORATION)

<PAGE> 51

TABLE OF CONTENTS

<TABLE>
<S> <C>
ARTICLE I

OFFICES

Section 1. Registered Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Other Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II

MEETINGS OF SHAREHOLDERS

Section 1. Time and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Notice of Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 4. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 5. Notice of Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 6. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 7. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 8. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 9. List of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 10. Inspectors of Votes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 11. Actions Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE III

BOARD OF DIRECTORS

Section 1. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2. Number, Qualification, and Term of Office . . . . . . . . . . . . . . . . . 3
Section 3. Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4. Removal of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 5. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

MEETINGS OF THE BOARD OF DIRECTORS

Section 6. Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 7. Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 8. Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 9. Special Meetings; Notice . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 10. Quorum and Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 11. Remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

COMMITTEES OF DIRECTORS

Section 12. Executive Committee; How Constituted and Powers . . . . . . . . . . . . . . 5
</TABLE>

<PAGE> 52
<TABLE>
<S> <C> <C>
Section 13. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 14. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 15. Quorum and Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 16. Other Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 17. Alternate Members of Committees . . . . . . . . . . . . . . . . . . . . . . 6
Section 18. Minutes of Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

GENERAL

Section 19. Actions Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 20. Presence at Meetings by Means of Communications Equipment . . . . . . . . . 7

ARTICLE IV

NOTICES

Section 1. Type of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2. Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3. When Notice Unnecessary . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE V

OFFICERS

Section 1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2. Election or Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3. Salaries of Elected Officers . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5. Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6. President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7. Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 8. Assistant Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 9. Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 10. Assistant Secretaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 11. Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 12. Assistant Treasurers . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 13. Controller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 14. Assistant Controllers . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE VI

INDEMNIFICATION

Section 1. Actions Other Than by or in the Right of the Corporation . . . . . . . . . 11
Section 2. Actions by or in the Right of the Corporation . . . . . . . . . . . . . . . 11
Section 3. Determination of Right to Indemnification . . . . . . . . . . . . . . . . . 11
Section 4. Right to Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5. Prepaid Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>

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<TABLE>
<S> <C> <C>
Section 6. Right to Indemnification upon Application; Procedure upon
Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7. Other Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9. Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 10. Savings Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE VII

CERTIFICATES REPRESENTING STOCK

Section 1. Right to Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2. Facsimile Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3. New Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4. Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6. Registered Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . 14

ARTICLE VIII

GENERAL PROVISIONS

Section 1. Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2. Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3. Annual Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4. Checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6. Corporate Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE IX
AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>

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ARTICLE I

OFFICES

Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle, State of
Delaware.

Section 2. Other Offices. The Corporation may also have offices
at such other place or places, both within and without the State of Delaware,
as the Board of Directors may from time to time determine or the business of
the Corporation may require.

ARTICLE II

MEETINGS OF SHAREHOLDERS

Section 1. Time and Place of Meetings. All meetings of the
shareholders for the election of directors shall be held at such time and
place, either within or without the State of Delaware, as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting. Meetings of shareholders for any other purpose may be held at such
time and place, within or without the State of Delaware, as shall be stated in
the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2. Annual Meetings. Annual meetings of shareholders
shall be held on such date and at such time as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting, at
which meeting the shareholders shall elect by a plurality vote a Board of
Directors and transact such other business as may properly be brought before
the meeting.

Section 3. Notice of Annual Meetings. Written notice of the
annual meeting, stating the place, date, and hour of the meeting, shall be
given to each shareholder of record entitled to vote at such meeting not less
than 10 or more than 50 days before the date of the meeting.

Section 4. Special Meetings. Special meetings of the
shareholders for any purpose or purposes, unless otherwise prescribed by
statute or by the Certificate of Incorporation, may be called at any time by
order of the Board of Directors and shall be called by the President, the Board
of Directors or at the request in writing of the holders of not less than ten
percent (10%) of the voting power represented by all the shares issued,
outstanding and entitled to be voted at the proposed special meeting, unless
the Certificate of Incorporation provides for a different percentage, in which
event such provision of the Certificate of Incorporation shall govern. Such
request shall state the purpose or purposes of the proposed special meeting.
Business transacted at any special meeting of shareholders shall be limited to
the purposes stated in the notice.

Section 5. Notice of Special Meetings. Written notice of a
special meeting, stating the place, date, and hour of the meeting and the
purpose or purposes for which the meeting is called, shall be given to each
shareholder of record entitled to vote at such meeting not less than 10 or more
than 50 days before the date of the meeting, except that if the authorized
shares are to be increased, at least 30 days notice shall be given.

Section 6. Quorum. Except as otherwise provided by statute or
the Certificate of Incorporation, the holders of stock having a majority of the
voting power of the stock entitled to be

<PAGE> 55
voted thereat, present in person or represented by proxy, shall constitute a
quorum for the transaction of business at all meetings of the shareholders.
If, however, such quorum shall not be present or represented at any meeting of
the shareholders, the shareholders entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting from time to
time without notice (other than announcement at the meeting at which the
adjournment is taken of the time and place of the adjourned meeting) until a
quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified. If the
adjournment is for more than 30 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, notice of the adjourned meeting shall
be given to each shareholder of record entitled to vote at the meeting.

Section 7. Organization. At each meeting of the shareholders,
the Chairman of the Board or the President, determined as provided in Article V
of these By-Laws, or if those officers shall be absent therefrom, another
officer of the Corporation chosen as chairman present in person or by proxy and
entitled to vote thereat, or if all the officers of the Corporation shall be
absent therefrom, a shareholder holding of record shares of stock of the
Corporation so chosen, shall act as chairman of the meeting and preside
thereat. The Secretary, or if he shall be absent from such meeting or shall be
required pursuant to the provisions of this Section 7 to act as chairman of
such meeting, the person (who shall be an Assistant Secretary, if an Assistant
Secretary shall be present thereat) whom the chairman of such meeting shall
appoint, shall act as secretary of such meeting and keep the minutes thereof.

Section 8. Voting. Except as otherwise provided in the
Certificate of Incorporation, each shareholder shall, at each meeting of the
shareholders, be entitled to one vote in person or by proxy for each share of
stock of the Corporation held by him and registered in his name on the books of
the Corporation on the date fixed pursuant to the provisions of Section 5 of
Article VII of these By-Laws as the record date for the determination of
shareholders who shall be entitled to notice of and to vote at such meeting.
Shares of its own stock belonging to the Corporation or to another corporation,
if a majority of the shares entitled to vote in the election of directors of
such other corporation is held directly or indirectly by the Corporation, shall
not be entitled to vote. Any vote by stock of the Corporation may be given at
any meeting of the shareholders by the shareholder entitled thereto, in person
or by his proxy appointed by an instrument in writing subscribed by such
shareholder or by his attorney thereunto duly authorized and delivered to the
Secretary of the Corporation or to the secretary of the meeting; provided,
however, that no proxy shall be voted or acted upon after three years from its
date, unless said proxy shall provide for a longer period. Each proxy shall be
revocable unless expressly provided therein to be irrevocable and unless
otherwise made irrevocable by law. At all meetings of the shareholders all
matters, except where other provision is made by law, the Certificate of
Incorporation, or these By-Laws, shall be decided by the vote of a majority of
the votes cast by the shareholders present in person or by proxy and entitled
to vote thereat, a quorum being present. Unless demanded by a shareholder of
the Corporation present in person or by proxy at any meeting of the
shareholders and entitled to vote thereat, or so directed by the chairman of
the meeting, the vote thereat on any question other than the election or
removal of directors need not be by written ballot. Upon a demand of any such
shareholder for a vote by written ballot on any question or at the direction of
such chairman that a vote by written ballot be taken on any question, such vote
shall be taken by written ballot. On a vote by written ballot, each ballot
shall be signed by the shareholder voting, or by his proxy, if there be such
proxy, and shall state the number of shares voted.

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Section 9. List of Shareholders. It shall be the duty of the
Secretary or other officer of the Corporation who shall have charge of its
stock ledger, either directly or through another officer of the Corporation
designated by him or through a transfer agent appointed by the Board of
Directors, to prepare and make, at least 10 days before every meeting of the
shareholders, a complete list of the shareholders entitled to vote thereat,
arranged in alphabetical order, and showing the address of each shareholder and
the number of shares registered in the name of each shareholder. Such list
shall be open to the examination of any shareholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least 10 days
before said meeting, either at a place within the city where said meeting is to
be held, which place shall be specified in the notice of said meeting, or, if
not so specified, at the place where said meeting is to be held. The list
shall also be produced and kept at the time and place of said meeting during
the whole time thereof, and may be inspected by any shareholder of record who
shall be present thereat. The stock ledger shall be the only evidence as to
who are the shareholders entitled to examine the stock ledger, such list or the
books of the Corporation, or to vote in person or by proxy at any meeting of
shareholders.

Section 10. Inspectors of Votes. At each meeting of the
shareholders, the chairman of such meeting may appoint two Inspectors of Votes
to act thereat, unless the Board of Directors shall have theretofore made such
appointments. Each Inspector of Votes so appointed shall first subscribe an
oath or affirmation faithfully to execute the duties of an Inspector of Votes
at such meeting with strict impartiality and according to the best of his
ability. Such Inspectors of Votes, if any, shall take charge of the ballots,
if any, at such meeting and, after the balloting thereat on any question, shall
count the ballots cast thereon and shall make a report in writing to the
secretary of such meeting of the results thereof. An Inspector of Votes need
not be a shareholder of the Corporation, and any officer of the Corporation may
be an Inspector of Votes on any question other than a vote for or against his
election to any position with the Corporation or on any other question in which
he may be directly interested.

Section 11. Actions Without a Meeting. Any action required to be
taken at any annual or special meeting of shareholders of the Corporation, or
any action which may be taken at any annual or special meeting of shareholders,
may be taken without a meeting, without prior notice, and without a vote if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereat were present and voted. Prompt notice of
the taking of the corporate action without a meeting by less than unanimous
written consent shall be given to those shareholders who have not consented in
writing.

ARTICLE III

BOARD OF DIRECTORS

Section 1. Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors, which shall have and may exercise
all such powers of the Corporation and do all such lawful acts and things as
are not by statute, the Certificate of Incorporation, or these By-Laws directed
or required to be exercised or done by the shareholders.

Section 2. Number, Qualification, and Term of Office. The
number of directors which shall constitute the whole Board of Directors shall
not be less than two (2). Within the limits above specified, the number of
directors which shall constitute the whole Board of Directors shall be
determined by resolution of the Board of Directors. Directors need not be
shareholders. The

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directors shall be elected at the annual meeting of the shareholders, except as
provided in Sections 4 and 5 of this Article III, and each director elected
shall hold office until the annual meeting next after his election and until
his successor is duly elected and qualified, or until his death or retirement
or until he resigns or is removed in the manner hereinafter provided. Directors
shall be elected by a plurality of the votes of the shares present in person or
represented by proxy and entitled to vote on the election of directors at any
annual or special meeting of shareholders. Such election shall be by written
ballot.

Section 3. Resignations. Any director may resign at any time by
giving written notice of his resignation to the Corporation. Any such
resignation shall take effect at the time specified therein, or if the time
when it shall become effective shall not be specified therein, then it shall
take effect immediately upon its receipt by the Secretary. Unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.

Section 4. Removal of Directors. Any director may be removed,
either with or without cause, at any time, by the affirmative vote by written
ballot of a majority in voting interest of the shareholders of record of the
Corporation entitled to vote, given at an annual meeting or at a special
meeting of the shareholders called for that purpose. The vacancy in the Board
of Directors caused by any such removal shall be filled by the shareholders at
such meeting or, if not so filled, by the Board of Directors as provided in
Section 5 of this Article III.

Section 5. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the annual meeting next after their election and until their successors are
elected and qualified, unless sooner displaced. If there are no directors in
office, then an election of directors may be held in the manner provided by
statute.

MEETINGS OF THE BOARD OF DIRECTORS

Section 6. Place of Meetings. The Board of Directors of the
Corporation may hold meetings, both regular and special, either within or
without the State of Delaware.

Section 7. Annual Meetings. The first meeting of each newly
elected Board of Directors shall be held immediately following the annual
meeting of shareholders, and no notice of such meeting to the newly elected
directors shall be necessary in order legally to constitute the meeting,
provided a quorum shall be present. In the event such meeting is not held
immediately following the annual meeting of shareholders, the meeting may be
held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors, or as
shall be specified in a written waiver signed by all of the directors.

Section 8. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and at such place as shall
from time to time be determined by the Board of Directors.

Section 9. Special Meetings; Notice. Special meetings of the
Board of Directors may be called by the Chairman of the Board, the President,
or the Secretary on 48 hours' notice to each director, either personally or by
telephone or by mail, telegraph, telex, cable, wireless, or other form of
recorded communication; special meetings shall be called by the President or on
the written

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request of any director. Notice of any such meeting need not be given to any
director, however, if waived by him in writing or by telegraph, telex, cable,
wireless, or other form of recorded communication, or if he shall be present at
such meeting.

Section 10. Quorum and Manner of Acting. At all meetings of the
Board of Directors, a majority of the directors at the time in office (but not
less than one-third of the whole Board of Directors) shall constitute a quorum
for the transaction of business, and the act of a majority of the directors
present at any meeting at which a quorum is present shall be the act of the
Board of Directors, except as may be otherwise specifically provided by statute
or by the Certificate of Incorporation. If a quorum shall not be present at
any meeting of the Board of Directors, the directors present thereat may
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum shall be present. A director of the Corporation
who is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as the Secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered mail to the Secretary of the Corporation after such
adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.

Section 11. Remuneration. The Board of Directors may at any time
and from time to time by resolution provide that a specified sum shall be paid
to any director of the Corporation, either as his annual remuneration as such
director or member of any committee of the Board of Directors or as
remuneration for his attendance at each meeting of the Board of Directors or
any such committee. Further, the Corporation shall reimburse each director for
any expenses paid by him on account of his attendance at any meeting. Nothing
in this Section 11 shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving remuneration therefor.

COMMITTEES OF DIRECTORS

Section 12. Executive Committee; How Constituted and Powers. The
Board of Directors may in its discretion, by resolution passed by a majority of
the whole Board of Directors, designate an Executive Committee consisting of
one or more of the directors of the Corporation. Subject to the provisions of
Section 141 of the General Corporation Law of the State of Delaware, the
Certificate of Incorporation, and these By-Laws, the Executive Committee shall
have and may exercise, when the Board of Directors is not in session, all the
powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation, and shall have the power to authorize
the seal of the Corporation to be affixed to all papers which may require it;
but the Executive Committee shall not have the power to fill vacancies in the
Board of Directors, the Executive Committee, or any other committee of
directors or to elect or approve officers of the Corporation. The Executive
Committee shall have the power and authority to authorize the issuance of
common stock and grant and authorize options and other rights with respect to
such issuance. The Board of Directors shall have the power at any time, by
resolution passed by a majority of the whole Board of Directors, to change the
membership of the Executive Committee, to fill all vacancies in it, or to
dissolve it, either with or without cause.

Section 13. Organization. The Chairman of the Executive
Committee, to be selected by the Board of Directors, shall act as chairman at
all meetings of the Executive Committee and the Secretary shall act as
secretary thereof. In case of the absence from any meeting of the Executive

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Committee of the Chairman of the Executive Committee or the Secretary, the
Executive Committee may appoint a chairman or secretary, as the case may be, of
the meeting.

Section 14. Meetings. Regular meetings of the Executive
Committee, of which no notice shall be necessary, may be held on such days and
at such places, within or without the State of Delaware, as shall be fixed by
resolution adopted by a majority of the Executive Committee and communicated in
writing to all its members. Special meetings of the Executive Committee shall
be held whenever called by the Chairman of the Executive Committee or by any
member of the Executive Committee then in office. Notice of each special
meeting of the Executive Committee shall be given by mail, telegraph, telex,
cable, wireless, or other form of recorded communication or be delivered
personally or by telephone to each member of the Executive Committee not later
than the day before the day on which such meeting is to be held. Notice of any
such meeting need not be given to any member of the Executive Committee,
however, if waived by him in writing or by telegraph, telex, cable, wireless,
or other form of recorded communication, or if he shall be present at such
meeting; and any meeting of the Executive Committee shall be a legal meeting
without any notice thereof having been given, if all the members of the
Executive Committee shall be present thereat. Subject to the provisions of
this Article III, the Executive Committee, by resolution adopted by a majority
of the whole Executive Committee, shall fix its own rules of procedure.

Section 15. Quorum and Manner of Acting. A majority of the
Executive Committee shall constitute a quorum for the transaction of business,
and the act of a majority of those present at a meeting thereof at which a
quorum is present shall be the act of the Executive Committee.

Section 16. Other Committees. The Board of Directors may, by
resolution or resolutions passed by a majority of the whole Board of Directors,
designate one or more other committees consisting of one or more directors of
the Corporation, which, to the extent provided in said resolution or
resolutions, shall have and may exercise, subject to the provisions of Section
141 of the Delaware General Corporation Law, and the Certificate of
Incorporation and these By-Laws, the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation, and
shall have the power to authorize the seal of the Corporation to be affixed to
all papers which may require it; but no such committee shall have the power to
fill vacancies in the Board of Directors, the Executive Committee, or any other
committee or in their respective membership, to appoint or remove officers of
the Corporation, or to authorize the issuance of shares of the capital stock of
the Corporation, except that such a committee may, to the extent provided in
said resolutions, grant and authorize options and other rights with respect to
the common stock of the Corporation pursuant to and in accordance with any plan
approved by the Board of Directors. Such committee or committees shall have
such name or names as may be determined from time to time by resolution adopted
by the Board of Directors. A majority of all the members of any such committee
may determine its action and fix the time and place of its meetings and specify
what notice thereof, if any, shall be given, unless the Board of Directors
shall otherwise provide. The Board of Directors shall have power to change the
members of any such committee at any time to fill vacancies, and to discharge
any such committee, either with or without cause, at any time.

Section 17. Alternate Members of Committees. The Board of
Directors may designate one or more directors as alternate members of the
Executive Committee or any other committee, who may replace any absent or
disqualified member at any meeting of the committee, or if none be so
appointed, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.

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Section 18. Minutes of Committees. Each committee shall keep
regular minutes of its meetings and proceedings and report the same to the
Board of Directors at the next meeting thereof.

GENERAL

Section 19. Actions Without a Meeting. Unless otherwise
restricted by the Certificate of Incorporation or these By-Laws, any action
required or permitted to be taken at any meeting of the Board of Directors or
of any committee thereof may be taken without a meeting, if all members of the
Board of Directors or committee, as the case may be, consent thereto in writing
and the writing or writings are filed with the minutes of proceedings of the
Board of Directors or the committee.

Section 20. Presence at Meetings by Means of Communications
Equipment. Members of the Board of Directors, or of any committee designated
by the Board of Directors, may participate in a meeting of the Board of
Directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting conducted pursuant
to this Section 20 shall constitute presence in person at such meeting.

ARTICLE IV

NOTICES

Section 1. Type of Notice. Whenever, under the provisions of
any applicable statute, the Certificate of Incorporation, or these By-Laws,
notice is required to be given to any director or shareholder, it shall not be
construed to mean personal notice, but such notice may be given in writing, in
person or by mail, addressed to such director or shareholder, at his address as
it appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to directors may also be given in
any manner permitted by Article III hereof and shall be deemed to be given at
the time when first transmitted by the method of communication so permitted.

Section 2. Waiver of Notice. Whenever any notice is required to
be given under the provisions of any applicable statute, the Certificate of
Incorporation, or these By-Laws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto, and transmission of a
waiver of notice by a director or shareholder by mail, telegraph, telex, cable,
wireless, or other form of recorded communication may constitute such a waiver.

Section 3. When Notice Unnecessary. Whenever, under the
provisions of the Delaware General Corporation Law, the Certificate of
Incorporation or these By-Laws, any notice is required to be given to any
shareholder, such notice need not be given to the shareholder if:

(a) notice of two consecutive annual meetings and all notices of
meetings held during the period between those annual meetings,
if any, or

(b) all (but in no event less than two) payments (if sent by first
class mail) of distributions or interest on securities during
a 12-month period,

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have been mailed to that person, addressed at his address as shown on the
records of the Corporation, and have been returned undeliverable. Any action
or meeting taken or held without notice to such a person shall have the same
force and effect as if the notice had been duly given. If such a person
delivers to the Corporation a written notice setting forth his then current
address, the requirement that notice be given to that person shall be
reinstated.

ARTICLE V

OFFICERS

Section 1. General. The elected officers of the Corporation
shall be a President, a Secretary and a Treasurer. The Board of Directors may
also elect or appoint a Chairman of the Board, one or more Vice Presidents, one
or more Assistant Vice Presidents, one or more Assistant Secretaries, a
Treasurer, one or more Assistant Treasurers, a Controller, one or more
Assistant Controllers, and such other officers and agents as may be deemed
necessary or advisable from time to time, all of whom shall also be officers.
Two offices may be held by the same person.

Section 2. Election or Appointment. The Board of Directors at
its annual meeting shall elect or appoint, as the case may be, the officers to
fill the positions designated in or pursuant to Section 1 of this Article V.
Officers of the Corporation may also be elected or appointed, as the case may
be, at any other time.

Section 3. Salaries of Elected Officers. The salaries of all
elected officers of the Corporation shall be fixed by the Board of Directors.

Section 4. Term. Each officer of the Corporation shall hold his
office until his successor is duly elected or appointed and qualified or until
his earlier resignation or removal. Any officer may resign at any time upon
written notice to the Corporation. Any officer elected or appointed by the
Board of Directors or the Executive Committee may be removed at any time by the
affirmative vote of a majority of the whole Board of Directors. Any vacancy
occurring in any office of the Corporation by death, resignation, removal, or
otherwise may be filled by the Board of Directors or the appropriate committee
thereof.

Section 5. Chairman of the Board. The Chairman of the Board, if
one be elected, shall be the chief executive officer of the Corporation and
shall preside when present at all meetings of the Board of Directors and, with
the approval of the President, may preside at meetings of the shareholders. He
shall advise and counsel the President and other officers of the Corporation,
and shall exercise such powers and perform such duties as shall be assigned to
or required of him from time to time by the Board of Directors.

Section 6. President. In the absence of a Chairman of the
Board, the President shall be the ranking and chief executive officer of the
Corporation and shall have the duties and responsibilities, and the authority
and power, of the Chairman of the Board. The President shall be the chief
operating officer of the Corporation and, subject to the provisions of these
By-Laws, shall have general supervision of the affairs of the Corporation and
shall have general and active control of all its business. He shall preside,
when present, at all meetings of shareholders, except when the Chairman of the
Board presides with the approval of the President and as may otherwise be
provided by statute, and, in the absence of any other person designated thereto
by these By-Laws, at all meetings of the Board of Directors. He shall see that
all orders and resolutions of the Board of

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Directors and the shareholders are carried into effect. He shall have general
authority to execute bonds, deeds, and contracts in the name of the Corporation
and affix the corporate seal thereto; to sign stock certificates; to cause the
employment or appointment of such employees and agents of the Corporation as
the proper conduct of operations may require, and to fix their compensation,
subject to the provisions of these By-Laws; to remove or suspend any employee
or agent who shall have been employed or appointed under his authority or under
authority of an officer subordinate to him; to suspend for cause, pending final
action by the authority which shall have elected or appointed him, any officer
subordinate to the President; and, in general, to exercise all the powers and
authority usually appertaining to the chief operating officer of a corporation,
except as otherwise provided in these By-Laws.

Section 7. Vice Presidents. In the absence of the President or
in the event of his inability or refusal to act, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President and, when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. The Vice Presidents shall perform such other duties and have such
other powers as the Board of Directors or the President may from time to time
prescribe.

Section 8. Assistant Vice Presidents. In the absence of a Vice
President or in the event of his inability or refusal to act, the Assistant
Vice President (or in the event there shall be more than one, the Assistant
Vice Presidents in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their appointment) shall
perform the duties and exercise the powers of that Vice President, and shall
perform such other duties and have such other powers as the Board of Directors,
the President, or the Vice President under whose supervision he is appointed
may from time to time prescribe.

Section 9. Secretary. The Secretary shall attend all meetings
of the Board of Directors and all meetings of the shareholders and record all
the proceedings of the meetings of the Corporation and of the Board of
Directors in a book to be kept for that purpose and shall perform like duties
for the Executive Committee or other standing committees when required. He
shall give, or cause to be given, notice of all meetings of the shareholders
and special meetings of the Board of Directors, and shall perform such other
duties as may be prescribed by the Board of Directors or the President, under
whose supervision he shall be. He shall have custody of the corporate seal of
the Corporation, and he, or an Assistant Secretary, shall have authority to
affix the same to any instrument requiring it, and when so affixed, it may be
attested by his signature or by the signature of such Assistant Secretary. The
Board of Directors may give general authority to any other officer to affix the
seal of the Corporation and to attest the affixing by his signature. The
Secretary shall keep and account for all books, documents, papers, and records
of the Corporation, except those for which some other officer or agent is
properly accountable. He shall have authority to sign stock certificates and
shall generally perform all the duties usually appertaining to the office of
the secretary of a corporation.

Section 10. Assistant Secretaries. In the absence of the
Secretary or in the event of his inability or refusal to act, the Assistant
Secretary (or, if there shall be more than one, the Assistant Secretaries in
the order designated by the Board of Directors, or in the absence of any
designation, then in the order of their appointment) shall perform the duties
and exercise the powers of the Secretary and shall perform such other duties
and have such other powers as the Board of Directors, the President, or the
Secretary may from time to time prescribe.

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Section 11. Treasurer. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and
shall render to the President and the Board of Directors, at its regular
meetings or when the Board of Directors so requires, an account of all his
transactions as Treasurer and of the financial condition of the Corporation.
If required by the Board of Directors, he shall give the Corporation a bond
(which shall be renewed every six years) in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement, or removal from
office, of all books, papers, vouchers, money, and other property of whatever
kind in his possession or under his control belonging to the Corporation. The
Treasurer shall be under the supervision of the Vice President in charge of
finance, if one is so designated, and he shall perform such other duties as may
be prescribed by the Board of Directors, the President, or any such Vice
President in charge of finance.

Section 12. Assistant Treasurers. The Assistant Treasurer or
Assistant Treasurers shall assist the Treasurer, and in the absence of the
Treasurer or in the event of his inability or refusal to act, the Assistant
Treasurer (or in the event there shall be more than one, the Assistant
Treasurers in the order designated by the Board of Directors, or in the absence
of any designation, then in the order of their appointment) shall perform the
duties and exercise the powers of the Treasurer and shall perform such other
duties and have such other powers as the Board of Directors, the President, or
the Treasurer may from time to time prescribe.

Section 13. Controller. The Controller, if one is appointed,
shall have supervision of the accounting practices of the Corporation and shall
prescribe the duties and powers of any other accounting personnel of the
Corporation. He shall cause to be maintained an adequate system of financial
control through a program of budgets and interpretive reports. He shall
initiate and enforce measures and procedures whereby the business of the
Corporation shall be conducted with the maximum efficiency and economy. If
required, he shall prepare a monthly report covering the operating results of
the Corporation. The Controller shall be under the supervision of the Vice
President in charge of finance, if one is so designated, and he shall perform
such other duties as may be prescribed by the Board of Directors, the
President, or any such Vice President in charge of finance.

Section 14. Assistant Controllers. The Assistant Controller or
Assistant Controllers shall assist the Controller, and in the absence of the
Controller or in the event of his inability or refusal to act, the Assistant
Controller (or, if there shall be more than one, the Assistant Controllers in
the order designated by the Board of Directors, or in the absence of any
designation, then in the order of their appointment) shall perform the duties
and exercise the powers of the Controller and perform such other duties and
have such other powers as the Board of Directors, the President, or the
Controller may from time to time prescribe.

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ARTICLE VI

INDEMNIFICATION

Section 1. Actions Other Than by or in the Right of the
Corporation. The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise (all of such persons being hereafter
referred to in this Article as a "Corporate Functionary"), against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding, if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful.

Section 2. Actions by or in the Right of the Corporation.
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action
or suit by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he is or was a Corporate Functionary against
expenses (including attorneys' fees) judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit, if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests
of the Corporation, except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the Corporation, unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.

Section 3. Determination of Right to Indemnification. Any
indemnification under Sections 1 or 2 of this Article VI (unless ordered by a
court) shall be made by the Corporation only as authorized in the specific case
upon a determination that indemnification of a Corporate Functionary is proper
in the circumstances because he has met the applicable standard of conduct set
forth in Sections 1 or 2 of this Article VI. Such determination shall be made
(i) by a majority vote of the directors who are not parties to such action,
suit, or proceeding, even though less than a quorum, or (ii) if there are no
such directors, or if such directors so direct, by independent legal counsel in
a written opinion or (iii) by the shareholders.

Section 4. Right to Indemnification. Notwithstanding the other
provisions of this Article VI, to the extent that a Corporate Functionary has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Sections 1 or 2 of this Article VI (including the
dismissal of a proceeding without prejudice or the settlement of a proceeding
without admission of liability), or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.

Section 5. Prepaid Expenses. Expenses incurred by a Corporate
Functionary in defending a civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the

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Corporation in advance of the final disposition of such action, suit or
proceeding, upon receipt of an undertaking by or on behalf of the Corporate
Functionary to repay such amount if it shall ultimately be determined he is not
entitled to be indemnified by the Corporation as authorized in this Article VI.

Section 6. Right to Indemnification upon Application; Procedure
upon Application. Any indemnification of a Corporate Functionary under
Sections 2, 3 or 4, or any advance of expenses under Section 5, of this Article
VI shall be made promptly upon, and in any event within 60 days after, the
written request of the Corporate Functionary, unless with respect to
applications under Sections 2, 3 or 5 of this Article VI, a determination is
reasonably and promptly made by the Board of Directors by a majority vote of
the directors who are not parties to such action, suit or proceeding, even
though less than a quorum, that such Corporate Functionary acted in a manner
set forth in such Sections as to justify the Corporation in not indemnifying or
making an advance of expenses to the Corporate Functionary. If there are no
such directors, the Board of Directors shall promptly direct that independent
legal counsel shall decide whether the Corporate Functionary acted in a manner
set forth in such Sections as to justify the Corporation's not indemnifying or
making an advance of expenses to the Corporate Functionary. The right to
indemnification or advance of expenses granted by this Article VI shall be
enforceable by the Corporate Functionary in any court of competent jurisdiction
if the Board of Directors or independent legal counsel denies his claim, in
whole or in part, or if no disposition of such claim is made within 60 days.
The expenses of the Corporate Functionary incurred in connection with
successfully establishing his right to indemnification, in whole or in part, in
any such proceeding shall also be indemnified by the Corporation.

Section 7. Other Rights and Remedies. The indemnification and
advancement of expenses provided by or granted pursuant to this Article VI
shall not be deemed exclusive of any other rights to which any person seeking
indemnification and/or advancement of expenses may be entitled under any other
provision of these By-Laws, or any agreement, vote of shareholders or
disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Corporate Functionary and shall inure to the
benefit of the heirs, executors, and administrators of such a person. Any
repeal or modification of these By-Laws or relevant provisions of the Delaware
General Corporation Law and other applicable law, if any, shall not affect any
then existing rights of a Corporate Functionary to indemnification or
advancement of expenses.

Section 8. Insurance. Upon resolution passed by the Board of
Directors, the Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article VI or the Delaware General Corporation Law.

Section 9. Mergers. For purposes of this Article VI, references
to "the Corporation" shall include, in addition to the resulting or surviving
corporation, constituent corporations (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent

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corporation or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position under
the provisions of this Article VI with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if
its separate existence had continued.

Section 10. Savings Provision. If this Article VI or any portion
hereof shall be invalidated on any ground by a court of competent jurisdiction,
the Corporation shall nevertheless indemnify each Corporate Functionary as to
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit, proceeding or investigation,
whether civil, criminal or administrative, including a grand jury proceeding or
action or suit brought by or in the right of the Corporation, to the full
extent permitted by any applicable portion of this Article VI that shall not
have been invalidated.

ARTICLE VII

CERTIFICATES REPRESENTING STOCK

Section 1. Right to Certificate. Every holder of stock in the
Corporation shall be entitled to have a certificate, signed by, or in the name
of the Corporation by, the Chairman of the Board, the President or a Vice
President and by the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by him in the Corporation. If the
Corporation shall be authorized to issue more than one class of stock or more
than one series of any class, the powers, designations, preferences, and
relative, participating, optional, or other special rights of each class of
stock or series thereof and the qualifications, limitations, or restrictions of
such preferences or rights shall be set forth in full or summarized on the face
or back of the certificate which the Corporation shall issue to represent such
class or series of stock; provided, that, except as otherwise provided in
Section 202 of the Delaware General Corporation Law, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the Corporation shall issue to represent such class or series of stock a
statement that the Corporation will furnish without charge to each shareholder
who so requests the powers, designations, preferences, and relative,
participating, optional, or other special rights of each class of stock or
series thereof and the qualifications, limitations, or restrictions of such
preferences or rights.

Section 2. Facsimile Signatures. Any of or all the signatures
on the certificate may be facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent, or registrar at the
date of issue.

Section 3. New Certificates. The Board of Directors may direct
a new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation and alleged to have been
lost, stolen, or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost, stolen, or destroyed.
When authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim

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that may be made against the Corporation with respect to the certificate
alleged to have been lost, stolen, or destroyed or the issuance of such new
certificate.

Section 4. Transfers. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation, or authority to
transfer, it shall be the duty of the Corporation, subject to any proper
restrictions on transfer, to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction upon its books.

Section 5. Record Date. The Board of Directors may fix in
advance a date, not preceding the date on which the resolution fixing the
record date is adopted, and

(i) not more than 50 days nor less than 10 days preceding
the date of any meeting of shareholders, as a record
date for the determination of the shareholders
entitled to notice of, and to vote at, any such
meeting and any adjournment thereof,

(ii) not more than 10 days after the date on which the
resolution fixing the record date is adopted, as a
record date in connection with obtaining a consent of
the shareholders in writing to corporate action
without a meeting, or

(iii) not more than 50 days before the date for payment of
any dividend or distribution, or the date for the
allotment of rights, or the date when any change, or
conversion or exchange of capital stock shall go into
effect, or the date on which any other lawful action
shall be taken, as the record date for determining
the shareholders entitled to receive payment of any
such dividend or distribution, or to receive any such
allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of
capital stock or other lawful action of the
corporation,

and in such case such shareholders and only such shareholders as shall be
shareholders of record on the date so fixed shall be entitled to such notice
of, and to vote at, any such meeting and any adjournment thereof (provided,
however, that the Board of Directors may fix a new record date for an adjourned
meeting), or to give such consent, or to receive payment of such dividend or
distribution, or to receive such allotment of rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of any stock on the
books of the corporation after any such record date fixed as aforesaid. If the
Board of Directors does not order the stock transfer books closed, or fix in
advance a record date, as above provided, then the record date for the
determination of shareholders entitled to notice of, or to vote at any meeting
of shareholders, or any adjournment thereof, or entitled to receive payment of
any dividend, or for the determination of shareholders for any proper purpose
shall be 30 days prior to the date on which the particular action requiring
such determination of shareholders is to be taken.

Section 6. Registered Shareholders. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books
as the owner of shares to receive dividends, and to vote as such owner, and to
hold liable for calls and assessments a person registered on its books as the
owner of shares, and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not provided by the laws of the State of Delaware.

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ARTICLE VIII

GENERAL PROVISIONS

Section 1. Dividends. Dividends upon the capital stock of the
Corporation, if any, subject to the provisions of the Certificate of
Incorporation, may be declared by the Board of Directors (but not any committee
thereof) at any regular or special meeting, pursuant to law. Dividends may be
paid in cash, in property, or in shares of the capital stock, subject to the
provisions of the Certificate of Incorporation.

Section 2. Reserves. Before payment of any dividend, there may
be set aside out of any funds of the Corporation available for dividends such
sum or sums as the Board of Directors from time to time, in their absolute
discretion, thinks proper as a reserve or reserves to meet contingencies, or
for equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for such other purpose as the Board of Directors shall think
conducive to the interest of the Corporation, and the Board of Directors may
modify or abolish any such reserve in the manner in which it was created.

Section 3. Annual Statement. The Board of Directors shall
present at each annual meeting, and at any special meeting of the shareholders
when called for by vote of the shareholders, a full and clear statement of the
business and condition of the Corporation.

Section 4. Checks. All checks or demands for money and
promissory notes of the Corporation shall be signed by such officer or officers
or such other person or persons as the Board of Directors may from time to time
prescribe.

Section 5. Fiscal Year. The fiscal year of the Corporation
shall be determined by the Board of Directors.

Section 6. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization,
and the word "Delaware." The seal may be used by causing it or a facsimile
thereof to be impressed, affixed, reproduced, or otherwise.

ARTICLE IX

AMENDMENTS

These By-Laws may be altered, amended, or repealed or new By-Laws may
be adopted by the Board of Directors at any regular meeting of the Board of
Directors or at any special meeting of the Board of Directors if notice of such
alteration, amendment, repeal, or adoption of new By-Laws be contained in the
notice of such special meeting.

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CERTIFICATION

I, Tim D. Torno, Secretary of the Corporation, hereby certify that the
foregoing is a true, accurate and complete copy of the By-Laws of Ultrak, Inc.
adopted by its Board of Directors as of ______________, 1995.

-------------------------------------
Tim D. Torno, Secretary

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EXHIBIT D

ARTICLE 113

DISSENTERS' RIGHTS

PART I

RIGHT OF DISSENT--PAYMENT FOR SHARES

7-113-101 DEFINITIONS.--For purposes of this article:

(1) "Beneficial shareholder" means the beneficial owner of shares
held in a voting trust or by a nominee as the record shareholder.

(2) "Corporation" means the issuer of the shares held by a
dissenter before the corporate action, or the surviving or acquiring domestic
or foreign corporation, by merger or share exchange of that issuer.

(3) "Dissenter" means a shareholder who is entitled to dissent
from corporate action under section 7-113-102 and who exercises that right at
the time and in the manner required by part 2 of this article.

(4) "Fair value," with respect to a dissenter's shares, means the
value of the shares immediately before the effective date of the corporate
action to which the dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action except to the extent that
exclusion would be inequitable.

(5) "Interest" means interest from the effective date of the
corporate action until the date of payment, at the average rate currently paid
by the corporation on its principal bank loans or, if none, at the legal rate
as specified in section 5-12-101, C.R.S.

(6) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares
that are registered in the name of a nominee to the extent such owner is
recognized by the corporation as the shareholder as provided in section
7-107-204.

(7) "Shareholder" means either a record shareholder or a
beneficial shareholder.

7-113-102 RIGHT TO DISSENT.--(1) A shareholder, whether or
not entitled to vote, is entitled to dissent and obtain payment of the fair
value of his or her shares in the event of any of the following corporate
actions:

(a) Consummation of a plan of merger to which the corporation is a
party if:

(I) Approval by the shareholders of that corporation is required
for the merger by section 7-111-103 or 7-111-104 or by the articles of
incorporation, or

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(II) The corporation is a subsidiary that is merged with its parent
corporation under section 7-111-104;

(b) Consummation of a plan of share exchange to which the
corporation is a party as the corporation whose shares will be acquired.

(c) Consummation of a sale, lease, exchange, or other disposition
of all, or substantially all, of the property of the corporation for which a
shareholder vote is required under section 7-112-102(1); and

(d) Consummation of a sale, lease, exchange, or other disposition
of all, or substantially all, of the property of an entity controlled by the
corporation if the shareholders of the corporation were entitled to vote upon
the consent of the corporation to the disposition pursuant to section
7-112-102(2).

(2) A shareholder, whether or not entitled to vote, is entitled to
dissent and obtain payment of the fair value of the shareholder's shares in the
event of:

(a) An amendment to the articles of incorporation that materially
and adversely affects rights in respect of the shares because it:

(I) Alters or abolishes a preferential right of the shares; or

(II) Creates, alters, or abolishes a right in respect of redemption
of the shares, including a provision respecting a sinking fund for their
redemption or repurchase; or

(b) An amendment to the articles of incorporation that affects
rights in respect of the shares because it:

(I) Excludes or limits the right of the shares to vote on any
matter, or to cumulate votes, other than a limitation by dilution through
issuance of shares or other securities with similar voting rights; or

(II) Reduces the number of shares owned by the shareholder to a
fraction of a share or to scrip if the fractional share or scrip so created is
to be acquired for cash or the scrip is to be voided under section 7-106-104.

(3) A shareholder is entitled to dissent and obtain payment of the
fair value of the shareholder's shares in the event of any corporate action to
the extent provided by the bylaws or a resolution of the board of directors.

(4) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this article may not challenge the corporate action
creating such entitlement unless the action is unlawful or fraudulent with
respect to the shareholder or the corporation.

7-113-103 DISSENT BY NOMINEES AND BENEFICIAL OWNERS.--(1) A
record shareholder may assert dissenters' rights as to fewer than all the
shares registered in the record shareholder's name only if the record
shareholder dissents with respect to all shares beneficially owned by any one
person and causes the corporation to receive written notice which states such

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dissent and the name, address, and federal taxpayer identification number, if
any, of each person on whose behalf the record shareholder asserts dissenters'
rights. The rights of a record shareholder under this subsection (1) are
determined as if the shares as to which the record shareholder dissents and the
other shares of the record shareholder were registered in the names of
different shareholders.

(2) A beneficial shareholder may assert dissenters' rights as to
the shares held on the beneficial shareholder's behalf only if;

(a) The beneficial shareholder causes the corporation to receive
the record shareholder's written consent to the dissent not later than the time
the beneficial shareholder asserts dissenters' rights; and

(b) The beneficial shareholder dissents with respect to all shares
beneficially owned by the beneficial shareholder.

(3) The corporation may require that, when a record shareholder
dissents with respect to the shares held by any one or more beneficial
shareholders, each such beneficial shareholder must certify to the corporation
that the beneficial shareholder and the record shareholder or record
shareholders of all shares owned beneficially by the beneficial shareholder
have asserted, or will timely assert, dissenters' rights as to all such shares
as to which there is no limitation on the ability to exercise dissenters'
rights. Any such requirement shall be stated in the dissenters' notice given
pursuant to section 7-113-203.

PART 2

PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS

7-113-201 NOTICE OF DISSENTERS' RIGHTS.--(1) If a proposed
corporate action creating dissenters' rights under section 7-113-102 is
submitted to a vote at a shareholders' meeting, the notice of the meeting shall
be given to all shareholders, whether or not entitled to vote. The notice
shall state that shareholders are or may be entitled to assert dissenters'
rights under this article and shall be accompanied by a copy of this article
and the materials, if any, that under articles 101 to 117 of this title, are
required to be given to shareholders entitled to vote on the proposed action at
the meeting. Failure to give notice as provided by this subsection (1) to
shareholders not entitled to vote shall not affect any action taken at the
shareholders' meeting for which the notice was to have been given.

(2) If a proposed corporate action creating dissenters' rights
under section 7-113-102 is authorized without a meeting of shareholders
pursuant to section 7-107-104, any written or oral solicitation of a
shareholder to execute a writing consenting to such action contemplated in
section 7-107-104 shall be accompanied or preceded by a written notice stating
that shareholders are or may be entitled to assert dissenters' rights under
this article, by a copy of this article, and by the materials, if any, that,
under articles 101 to 117 of this title, would have been required to be given
to shareholders entitled to vote on the proposed action if the proposed action
were submitted to a vote at a shareholders' meeting. Failure to give notice as
provided by this subsection (2) to shareholders not entitled to vote shall not
affect any action taken pursuant to section 7-107-104 for which the notice was
to have been given.

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7-113-202 NOTICE OF INTENT TO DEMAND PAYMENT.--(1) If a
proposed corporate action creating dissenters' rights under section 7-113-102
is submitted to a vote at a shareholders' meeting, a shareholder who wishes to
assert dissenters' rights shall:

(a) Cause the corporation to receive, before the vote is taken,
written notice of the shareholder's intention to demand payment for the
shareholder's shares if the proposed corporate action is effectuated; and

(b) Not vote the shares in favor of the proposed corporate action.

(2) If a proposed corporate action creating dissenters' rights
under section 7-113-102 is authorized without a meeting of shareholders
pursuant to section 7-107-104, a shareholder who wishes to assert dissenters'
rights shall not execute a writing consenting to the proposed corporate action.

(3) A shareholder who does not satisfy the requirements of
subsection (1) or (2) of this section is not entitled to demand payment for the
shareholder's shares under this article.

7-113-203 DISSENTERS' NOTICE.--(1) If a proposed corporate
action creating dissenters' rights under section 7-113-102 is authorized, the
corporation shall give a written dissenters' notice to all shareholders who are
entitled to demand payment for their shares under this article.

(2) The dissenters' notice required by subsection (1) of this
section shall be given no later than ten days after the effective date of the
corporate action creating dissenters' rights under section 7-113-102 and shall:

(a) State that the corporate action was authorized and state the
effective date or proposed effective date of the corporate action;

(b) State an address at which the corporation will receive payment
demands and the address of a place where certificates for certificated shares
must be deposited;

(c) Inform holders of uncertificated shares to what extent
transfer of the shares will be restricted after the payment demand is received;

(d) Supply a form for demanding payment, which form shall request
a dissenter to state an address to which payment is to be made;

(e) Set the date by which the corporation must receive the payment
demand and certificates for certificated shares, which date shall not be less
than thirty days after the date the notice required by subsection (1) of this
section is given;

(f) State the requirement contemplated in section 7-113-103 (3),
if such requirement is imposed; and

(g) Be accompanied by a copy of this article.

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7-113-204 PROCEDURE TO DEMAND PAYMENT.--(1) A shareholder who
is given a dissenters' notice pursuant to section 7- 113-203 and who wishes to
assert dissenters' rights shall, in accordance with the terms of the
dissenters' notice:

(a) Cause the corporation to receive a payment demand, which may
be the payment demand form contemplated in section 7- 113-102(2)(d), duly
completed, or may be stated in another writing; and

(b) Deposit the shareholder's certificates for certificated shares.

(2) A shareholder who demands payment in accordance with
subsection (1) of this section retains all rights of a shareholder, except the
right to transfer the shares, until the effective date of the proposed
corporate action giving rise to the shareholder's exercise of dissenters'
rights and has only the right to receive payment for the shares after the
effective date of such corporate action.

(3) Except as provided in section 7-113-207 or 7-113-209(1)(b),
the demand for payment and deposit of certificates are irrevocable.

(4) A shareholder who does not demand payment and deposit the
Shareholder's share certificates as required by the date or dates set in the
dissenters' notice is not entitled to payment for the shares under this
article.

7-113-205 UNCERTIFICATED SHARES.-- (1) Upon receipt of a
demand for payment under section 7-113-204 from a shareholder holding
uncertificated shares, and in lieu of the deposit of certificates representing
the shares, the corporation may restrict the transfer thereof.

(2) In all other respects, the provisions of section 7-113-204
shall be applicable to shareholders who own uncertificated shares.

7-113-206 PAYMENT.--(1) Except as provided in section
7-113-208, upon the effective date of the corporate action creating dissenters'
rights under section 7-113-102 or upon receipt of a payment demand pursuant to
section 7-113-204, whichever is later, the corporation shall pay each dissenter
who complied with section 7-113-204, at the address stated in the payment
demand, or if no such address is stated in the payment demand, at the address
shown on the corporation's current record of shareholders for the record
shareholder holding the dissenter's shares, the amount the corporation
estimates to be the fair value of the dissenter's shares, plus accrued
interest.

(2) The payment made pursuant to subsection (1) of this section
shall be accompanied by:

(a) The corporation's balance sheet as of the end of its most
recent fiscal year or, if that is not available, the corporation's balance
sheet as of the end of a fiscal year ending not more than sixteen months before
the date of payment, an income statement for that year, and, if the corporation
customarily provides such statements to shareholders, a statement of changes in
shareholders' equity for that year and a statement of cash flow for that year,
which balance sheet and statements shall have been audited if the corporation
customarily provides audited financial statements to shareholders, as well as
the latest available financial statements, if any, for the interim or full-year
period, which financial statements need not be audited;

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<PAGE> 75
(b) A statement of the corporation's estimate of the fair value of
the shares;

(d) A statement of the dissenter's right to demand payment under
section 7-113-209; and

(e) A copy of this article.

7-113-207 FAILURE TO TAKE ACTION.--(1) If the effective date
of the corporate action creating dissenters' rights under section 7-113-102
does not occur within sixty days after the date set by the corporation by which
the corporation must receive the payment demand as provided in section
7-113-203, the corporation shall return the deposited certificates and release
the transfer restrictions imposed on uncertificated shares.

(2) If the effective date of the corporate action creating
dissenters' rights under section 7-113-102 occurs more than sixty days after
the date set by the corporation by which the corporation must receive the
payment demand as provided in section 7- 113-203, then the corporation shall
send a new dissenters' notice, as provided in section 7-113-203, and the
provisions of sections 7-113-204 to 7-113-209 shall again be applicable.

7-113-208 SPECIAL PROVISIONS RELATING TO SHARES ACQUIRED AFTER
ANNOUNCEMENT OF PROPOSED CORPORATE ACTION.--(1) The corporation may, in or
with the dissenters' notice given pursuant to section 7-113-203, state the date
of the first announcement to news media or to shareholders of the terms of the
proposed corporate action creating dissenters' rights under section 7-113-102
and state that the dissenter shall certify in writing, in or with the
dissenter's payment demand under section 7-113-204, whether or not the
dissenter (or the person on whose behalf dissenters' rights are asserted)
acquired beneficial ownership of the shares before that date. With respect to
any dissenter who does not so certify in writing, in or with the payment
demand, that the dissenter or the person on whose behalf the dissenter asserts
dissenters' rights acquired beneficial ownership of the shares before such
date, the corporation may, in lieu of making the payment provided in section
7-113-206, offer to make such payment if the dissenter agrees to accept it in
full satisfaction of the demand.

(2) An offer to make payment under subsection (1) of this section
shall include or be accompanied by the information required by section
7-113-206(2).

7-113-209 PROCEDURE IF DISSENTER IS DISSATISFIED WITH PAYMENT
OR OFFER.--(1) A dissenter may give notice to the corporation in writing of
the dissenter's estimate of the fair value of the dissenter's shares and of the
amount of interest due and may demand payment of such estimate, less any
payment made under section 7-113-206, or reject the corporation's offer under
section 7-113-208 and demand payment of the fair value of the shares and
interest due, if:

(a) The dissenter believes that the amount paid under section
7-113-206 or offered under section 7-113-208 is less than the fair value of the
shares or that the interest due was incorrectly calculated;

(b) The corporation fails to make payment under section 7-113-206
within sixty days after the date set by the corporation by which the
corporation must receive the payment demand; or

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<PAGE> 76
(c) The corporation does not return the deposited certificates or
release the transfer restrictions imposed on uncertificated shares as required
by section 7-113-207(1).

(2) A dissenter waives the right to demand payment under this
section unless the dissenter causes the corporation to receive the notice
required by subsection (1) of this section within thirty days after the
corporation made or offered payment for the dissenter's shares.

PART 3

JUDICIAL APPRAISAL OF SHARES

7-113-301 COURT ACTION.--(1) If a demand for payment under
section 7-113-209 remains unresolved, the corporation may, within sixty days
after receiving the payment demand, commence a proceeding and petition the
court to determine the fair value of the shares and accrued interest. If the
corporation does not commence the proceeding within the sixty-day period, it
shall pay to each dissenter whose demand remains unresolved the amount
demanded.

(2) The corporation shall commence the proceeding described in
subsection (1) of this section in the district court of the county in this
state where the corporation's principal office is located or, if it has no
principal office in this state, in the district court of the county in which
its registered office is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic
corporation merged into, or whose shares were acquired by, the foreign
corporation was located.

(3) The corporation shall make all dissenters, whether or not
residents of this state, whose demands remain unresolved parties to the
proceeding commenced under subsection (2) of this section as in an action
against their shares, and all parties shall be served with a copy of the
petition. Service on each dissenter shall be by registered or certified mail,
to the address stated in such dissenter's payment demand, or if no such address
is stated in the payment demand, at the address shown on the corporation's
current record of shareholders for the record shareholder holding the
dissenter's shares, or as provided by law.

(4) The jurisdiction of the court in which the proceeding is
commenced under subsection (2) of this section is plenary and exclusive. The
court may appoint one or more persons as appraisers to receive evidence and
recommend a decision on the question of fair value. The appraisers have the
powers described in the order appointing them, or in any amendment to such
order. The parties to the proceeding are entitled to the same discovery rights
as parties in other civil proceedings.

(5) Each dissenter made a party to the proceeding commenced under
subsection (2) of this section is entitled to judgment for the amount, if any,
by which the court finds the fair value of the dissenter's shares, plus
interest, exceeds the amount paid by the corporation, or for the fair value,
plus interest, of the dissenter's shares for which the corporation elected to
withhold payment under section 7-113-208.

7-113-302 COURT COSTS AND COUNSEL FEES.-- (1) The court in an
appraisal proceeding commenced under section 7-311-301 shall determine all
costs of the proceeding, including the reasonable compensation and expenses of
appraisers appointed by the court. The court shall assess the costs against
the corporation; except that the court may assess costs against all or some of

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<PAGE> 77
the dissenters, in amounts the court finds equitable, to the extent the court
finds the dissenters acted arbitrarily, vexatiously, or not in good faith in
demanding payment under section 7-113-209.

(2) The court may also assess the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds equitable:

(a) Against the corporation and in favor of any dissenters if the
court finds the corporation did not substantially comply with the requirements
of part 2 of this article; or

(b) Against either the corporation or one or more dissenters, in
favor of any other party, if the court finds that the party against whom the
fees and expenses are assessed acted arbitrarily, vexatiously, or not in good
faith with respect to the rights provided by this article.

(3) If the court finds that the services of counsel for any
dissenter were of substantial benefit to other dissenters similarly situated,
and that the fees for those services should not be assessed against the
corporation, the court may award to said counsel reasonable fees to be paid out
of the amounts awarded to the dissenters who were benefitted.

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<PAGE> 78
ULTRAK, INC.

The undersigned herby (i) acknowledges receipt of the Notice dated April 28,
1995 of the Annual Meeting of Shareholders of Ultrak, Inc. (the "Company") to
be held at 3000 Thanksgiving Tower, Dallas, Texas 75201, on Thursday, May 25,
1995 at 9:00 a.m., Dallas, Texas time, and the Proxy Statement in connection
therewith; and (ii) appoints George K. Broady and Tim D. Torno, and each of
them, the undersigned's proxies with full power of substitution, for and in the
name, place and stead of the undersigned, to vote upon and act with respect to
all of the shares of Common Stock and Preferred Stock of the Comapny standing
in the name of the undersigned or with respect to which the undersigned is
entitled to vote and act, at the meeting and at any adjournment thereof, and
the undersigned directs that his proxy be voted as fololows:

(a) Proposal to change the state of incorporation of the Company, effective
as of December 29, 1995, from Colorado to Delaware and adopt a Plan and
Agreement of Merger pursuant to which the Company will be merged with
and into a newly formed Delaware subsidiary wholly-owned by the Comapny.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(b) Proposal to elect five directors to serve until the next Annual Meeting
of Shareholders or until their respective successors are elected and
qualified.

[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to
(except as marked to the contrary) vote for all nominees
listed below

Directors: George K. Broady, James D. Pritchett, William C. Lee,
Charles C. Neal and Robert F. Sexton

(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)

________________________________________________________________________________

(c) Proposal to approve the selection by the Board of Dirctors of Grant
Thornton as the firm of independent certified public accountants to
audit the accounts of the Company for the fiscal year ending December
31, 1995.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(d) In the discretion of the proxies on any other matter that may properly
come before the meeting or any adjournment thereof.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)

- --------------------------------------------------------------------------------

(CONTINUED FROM OTHER SIDE)

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED. UNLESS
OTHERWISE MARKED, THIS PROXY WILL BE VOTED FOR THE MATTERS SPECIFICALLY
REFERRED TO ABOVE.

If more than one of the proxies named above shall be present in person or by
substitute at the meeting or any adjournement thereof, both of the proxies so
present and voting, either in person or by substitute, shall exercise all of
the proxies hereby given.

The undersigned hereby revokes any proxy or proxies heretofore given to vote
upon or act with respect to such Common Stock and Preferred Stock and hereby
ratifies and confirms all that the proxies, their sustitutes, or any of them
may lawfully do by virtue hereof.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.

________________________________________

Dated: _________________________________
Please date this Proxy and sign your
name exactly as it appears heron. Where
there is more than one owner, each
should sign. When signing as an
attorney, administrator, executor,
guardian or trustee, please add your
title as such. If executed by a
corporation, the Proxy should be
signed by a duly authorized officer.

Please date, sign and mail this proxy
card in the enclosed envelope. No
postage is required.