<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
ULTRAK, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) 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 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] 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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[ULTRAK PICTURE]
NOTICE OF 1997 ANNUAL MEETING
PROXY STATEMENT
<PAGE> 3
ULTRAK, INC.
1220 CHAMPION CIRCLE, SUITE 100
CARROLLTON, TEXAS 75006
April 25, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Meeting") of Ultrak, Inc. (the "Company") to be held at 3000 Thanksgiving
Tower, Dallas, Texas 75201 at 9:00 a.m., Dallas, Texas time, on Friday, May 23,
1997.
The attached Notice of Annual Meeting and Proxy Statement fully describe
the formal business to be transacted at the Meeting, which includes the
election of six directors, the approval of an amendment to the Ultrak, Inc.
1988 Non-Qualified Stock Option Plan (the "1988 Plan"), the approval of the
Ultrak, Inc. Incentive Stock Option Plan (the "1997 Plan") 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 stockholders may have. I hope
you will be able to attend.
The Company's Board of Directors believes that a favorable vote for each
person nominated to serve as a director of the Company, for approval of the
amendment to the 1988 Plan to increase the number of shares issuable under the
1988 Plan from 833,334 to 1,000,000, for approval of the 1997 Plan 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, 1997 are in the best interests of the Company and its stockholders
and unanimously recommends a vote "FOR" each such director, "FOR" approval of
the amendment to the 1988 Plan, "FOR" approval of the 1997 Plan 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,
/s/ GEORGE K. BROADY
George K. Broady
Chairman of the Board
<PAGE> 4
ULTRAK, INC.
1220 CHAMPION CIRCLE, SUITE 100
CARROLLTON, TEXAS 75006
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 23, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Ultrak, Inc. (the "Company" or "Ultrak") will be held at 3000
Thanksgiving Tower, Dallas, Texas 75201 on Friday, May 23, 1997 at 9:00 a.m.
Dallas, Texas time, for the following purposes:
(1) to elect six directors to serve until the next Annual Meeting of
Stockholders or until their respective successors are elected and
qualified;
(2) to approve an amendment to the Ultrak, Inc. 1988 Non-Qualified Stock
Option Plan that would increase the number of shares issuable under
the plan from 833,334 to 1,000,000;
(3) to approve the Ultrak, Inc. Incentive Stock Option Plan;
(4) 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, 1997; and
(5) to transact such other business as may properly come before the
Meeting or any adjournment thereof.
The close of business on March 31, 1997 has been fixed as the record date
for determining stockholders 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 stockholders entitled to vote at the Meeting shall
be open to the examination of any stockholder 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.
STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING IN PERSON ARE
URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
/s/ TIM D. TORNO
Tim D. Torno
Secretary
Carrollton, Texas
April 25, 1997
<PAGE> 5
ULTRAK, INC.
1220 CHAMPION CIRCLE, SUITE 100
CARROLLTON, TEXAS 75006
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 23, 1997
This Proxy Statement is being first mailed on or about April 18, 1997 to
stockholders of Ultrak, Inc., a Delaware corporation (the "Company" or
"Ultrak"), by the Board of Directors to solicit proxies (the "Proxies") for use
at the Annual Meeting of Stockholders (the "Meeting") to be held at 3000
Thanksgiving Tower, Dallas, Texas 75201 on Friday, May 23, 1997, 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) the election of
six directors; (ii) the approval of an amendment to the Ultrak, Inc. 1988
Non-Qualified Stock Option Plan ("1988 Plan"); (iii) the approval of the
Ultrak, Inc. Incentive Stock Option Plan ("1997 Plan"); (iv) the approval of
independent certified public accountants; and (v) such other matters as may
properly come before the Meeting or any adjournment thereof.
All shares represented by valid Proxies, unless the stockholder otherwise
specifies, will be voted (i) FOR the election of the six persons named under
"Election of Directors" as nominees for election as directors of the Company;
(ii) FOR the approval of the amendment to the 1988 Plan to increase the number
of shares issuable under the 1988 Plan from 833,334 to 1,000,000; (iii) FOR the
approval of the 1997 Plan; (iv) FOR 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, 1997; and (v) 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 stockholder 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 stockholders entitled to vote at the
Meeting will be the close of business on March 31, 1997 (the "Record Date"), at
which time the Company had issued and outstanding 14,083,650 shares of Common
Stock, $0.01 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 per share of Common Stock and each holder of shares of Series A
Preferred Stock is entitled to 16.667 votes per share of Series A Preferred
Stock with respect to each matter (including 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 the election of directors and approval of
independent certified public accountants and the affirmative vote equal to at
least a majority of all of the outstanding Voting Shares, in person or by
Proxy, is required for approval of the amendment to the 1988 Plan and approval
of the 1997 Plan. 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.
<PAGE> 6
ELECTION OF DIRECTORS
There are six directors to be elected for terms expiring at the Company's
Annual Meeting of Stockholders in 1998 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 58, became Chairman of the Board, President and
Chief Executive Officer of the Company in March 1991. From 1988 to 1991, Mr.
Broady was the President and owner of Geneva Merchant Bankers of Dallas, Texas.
Prior to 1988, Mr. Broady was Chairman and Chief Executive Officer of Network
Security Corporation, a company that he founded in 1970. Mr. Broady received
his Bachelor of Science degree (cum laude) from Iowa State University in 1960.
James D. Pritchett, age 50, joined the Company in September 1988 as Chief
Operating Officer. He became a Director of the Company in August 1989 and
became Executive Vice President in October 1991. From October 1980 to September
1988, Mr. Pritchett was Executive Vice President and Chief Operating Officer of
Booth, Inc., 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 of Science degree in Mechanical
Engineering in 1972 from Southern Methodist University.
William C. Lee, age 57, became a Director of the Company in May 1994. Mr.
Lee has been the Chief Financial Officer of the Annuity Board of the Southern
Baptist Convention, a pension and insurance management company, since July
1991. Mr. Lee served as a Managing Director of Geneva Merchant Bankers of
Dallas, Texas from 1989 until 1991. Mr. Lee earned his Bachelor of Business
Administration degree from Texas A & M University in 1962 and his Masters of
Business Administration degree from Southern Methodist University in 1966 and
is a Certified Public Accountant.
Charles C. Neal, age 38, became a Director of the Company in May 1994. Mr.
Neal 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. Mr. Neal received his Bachelor of
Arts degree in Economics from the University of Oklahoma in 1981 and a Juris
Doctor/Masters of Business Administration degree from the University of Chicago
Law School and Graduate School of Business in 1985.
Robert F. Sexton, age 62, became a Director of the Company in May 1995.
Mr. Sexton has been President of Bakery Associates, Inc., 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., a baking
company. Mr. Sexton is also a director of Republic Group, Inc., a New York
Stock Exchange-listed manufacturer and distributor of paperboard. Mr. Sexton
earned his Bachelor of Business Administration degree in Industrial Management
in 1956 from the University of Texas.
Roland Scetbon, age 51, became a Director of the Company in September
1996. Mr. Scetbon was elected as Ultrak's Vice President-European Operations in
early 1997. Mr. Scetbon was one of the two principal owners of Groupe Bisset,
s.a. ("Bisset") and has served as President and Managing Director of Bisset
since the Company purchased it in September 1996. Prior to that time, Mr.
Scetbon had been associated with Bisset since 1966, most recently serving as
President. Mr. Scetbon's election as a Director of the Company was in
conjunction with the acquisition of Bisset.
2
<PAGE> 7
BOARD OF DIRECTORS AND COMMITTEES
The Company has an Audit Committee and a Compensation Committee to assist
the Board of Directors.
The Audit Committee, composed of Messrs. Lee, Neal and Sexton, 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 the 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 two times in 1996.
The Compensation Committee, composed of Messrs. Lee, Neal and Sexton, 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 plans. The Compensation Committee met four times in
1996.
During 1996, there were three regular meetings and six special meetings 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.
3
<PAGE> 8
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
George K. Broady ............... 58 Chairman of the Board, Chief Executive
Officer and President
James D. Pritchett ............. 50 Executive Vice President,
Chief Operating Officer and Director
Tim D. Torno ................... 40 Vice President-Finance, Secretary,
Treasurer and Chief Financial Officer
Anne De Greef-Safft ............ 34 Vice President-Marketing
Albert J. Gold ................. 65 Vice President-Sales
Jeffrey D. Blum ................ 34 Vice President-Professional Security
A. Neal Cooper ................. 37 Vice President-Research and
Development
</TABLE>
- ---------------
See "Election of Directors" for business experience information concerning
Messrs. Broady and Pritchett.
Tim D. Torno has been the Vice President-Finance, Secretary, Treasurer and
Chief Financial Officer of the Company since August 1988. From May 1980 to
August 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 Bachelor of Business Administration degree in Accounting (cum
laude) from Texas A & M University in 1979 and a Masters of Business
Administration degree (with honors) in 1993 from the University of Phoenix,
Denver, Colorado and is a Certified Public Accountant.
Anne De Greef-Safft has been the Vice President-Marketing of the Company
since July 1996. Ms. De Greef-Safft joined the Company in December 1995 as its
Managing Director of Marketing. Ms. De Greef-Safft was employed as Director of
Marketing and Sales of C-Power Products, Inc. of Dallas, Texas from 1993 to
December 1995. From 1990 to 1993, Ms. De Greef-Safft was a Senior Market
Development Engineer for Rogers Corp. of Rogers, Connecticut. She received her
Bachelor of Science and Master of Science degree in Electronics Engineering
(with Distinction) from the University of Louvain, Belgium in June 1985 and a
Master of Business Administration degree (Summa Cum Laude) from Babson College
in May 1995. Ms. De Greef-Safft speaks fluent Dutch, French and German in
addition to English.
Albert J. Gold has been the Vice President-Sales of the Company since
1993. Mr. Gold joined the Company in June 1991 as Managing Director of National
Accounts. Mr. Gold was employed as Vice President-Sales and Marketing of Koyo
International, Inc. of America, based in New York, from 1977 to 1991. Mr. Gold
has served as Co-Founder and Executive Vice President of the Closed Circuit
Television Manufacturers Association. Prior to 1977, Mr. Gold had a long career
with CBS.
Jeffrey D. Blum has been the Vice President-Professional Security of the
Company since joining the Company in July 1995. Mr. Blum was employed by
Presearch, Inc., based in Virginia, as Program Director from 1987 to June 1995,
where he was responsible for engineering, marketing and sales. Mr. Blum holds
one patent. Mr. Blum received his Bachelor of Science in Industrial Engineering
from Lehigh University in 1984 and he currently serves as a Director of the
Security Industry Association.
A. Neal Cooper has been the Vice President-Research and Development of the
Company since January 1997. Mr. Cooper joined the Company in September 1994 as
Managing Director of Product Development. Mr. Cooper was employed by Texas
Instruments of Dallas from 1980 to September 1994 where he last served as
Manager of Systems Development for the Image Sensor Products Division of the
Semiconductor Group. Mr. Cooper holds five patents and has over ten patents
pending. Mr. Cooper received his Bachelor of Science in Electrical Engineering
from Southern Methodist University in 1985.
4
<PAGE> 9
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 1996 for
services rendered to the Company during the fiscal years ended December 31,
1996, 1995 and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION 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, 1996 $289,440 $237,067 - - - $2,286
Chief Executive
Officer and 1995 $268,000 - - - 50,000 $2,179
President
1994 $240,000 $ 84,000 - - - $1,613
James D. Pritchett, 1996 $213,864 $175,146 - - - $3,800
Executive Vice
President 1995 $198,000 - - - 37,500 $3,657
1994 $164,000 $ 57,400 - - - $2,737
Tim D. Torno 1996 $149,040 $122,072 - - - $2,327
Vice President-
Finance, 1995 $138,000 - - - 18,750 $2,296
Secretary,
Treasurer and 1994 $105,000 $ 36,750 - - - $1,872
Chief Financial
Officer
</TABLE>
- ---------------
(1) SARs are defined as stock appreciation rights.
(2) Company's contribution to employee's 401(k).
5
<PAGE> 10
STOCK OPTION PLANS
The Company maintains the 1988 Plan and, subject to Stockholder approval,
the 1997 Plan. See "Proposal For Amendment of Ultrak, Inc. 1988 Non-Qualified
Stock Option Plan" and "Proposal to Approve Ultrak, Inc. Incentive Stock Option
Plan" for complete descriptions of the 1988 Plan and the 1997 Plan,
respectively.
OPTION/SAR GRANTS, EXERCISES AND HOLDINGS
There were no exercises of stock options (or tandem SARs) and freestanding
SARs during 1996 by the named executive officers. The unexercised options
owned by the named executive officers as of December 31, 1996 are presented
below:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED IN-
UNEXERCISED THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SHARES VALUE AT 12/31/96 AT 12/31/96
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE # ($) UNEXERCISABLE UNEXERCISABLE
------------------ ----------- -------- -------------- ------------------
<S> <C> <C> <C> <C>
George K Broady - - 148,851/40,000 $4,183,737/994,800
James D. Pritchett - - 124,166/30,000 $3,493,590/746,100
Tim D. Torno - - 93,750/23,333 $1,466,388/627,207
</TABLE>
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 40% during 1996 of the employee's contribution up
to 6% of the employee's base salary. In 1996, Messrs. Broady, Pritchett and
Torno received $2,286, $3,800 and $2,327, respectively, in matching 401(k)
contributions under the program.
During 1996, the Company provided a medical insurance program for its
full-time employees of which it paid 60% of the premium. As of December 31,
1996, the Company did not have any life insurance or any defined benefit
retirement or pension plans for its employees, officers or directors.
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 1996.
COMPENSATION OF DIRECTORS
Each director of the Company serves until the next annual meeting of the
Company's stockholders or until his successor is elected and qualified. Each
non-employee director receives an annual fee $16,500, 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, Vice President-Finance, Secretary, Treasurer and Chief Financial
Officer of the Company, 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.
6
<PAGE> 11
Mr. Pritchett's employment agreement, entered into in 1995, provides for a
two year term, but automatically extends for one year periods. Mr. Torno's
employment agreement was also entered into in 1995 and provides for a one year
term but automatically extends for one year periods. The employment agreements
originally set Mr. Pritchett's and Mr. Torno's base salaries at $198,000 and
$138,000, respectively, however, the Board of Directors may decide to
compensate the two at higher rates.
The employment agreements also contain standard provisions relating to the
employee being entitled to participation in the 1988 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 unexercised stock options previously
granted to the employee, are cancelled and rendered null and void. If the
Company terminates the employee without cause, then all unexercised 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 for a period
of 18 months for Mr. Pritchett and a period of one year for Mr. Torno. If the
employee terminates the agreement for any reason, he is entitled to exercise
only those options which are 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
William C. Lee, Charles C. Neal and Robert F. Sexton are members of the
Compensation Committee of the Board of Directors. Each of Messrs. Lee, Neal and
Sexton is a non-employee director.
7
<PAGE> 12
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has furnished the following report on the
Company's executive compensation program. The report describes the Compensation
Committee's compensation policies applicable to the Company's executive
officers and provides specific information regarding the Chief Executive
Officer's compensation. The Compensation Committee of the Board of Directors of
the Company is comprised of Charles C. Neal, William C. Lee and Robert F.
Sexton, all of whom are non-employee directors.
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 stockholders of
Ultrak. The Compensation Committee has created 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 stockholders 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, hence to align executive
officers' interests more closely with stockholders' interests. The Compensation
Committee also wants to have a discretionary component to reward exceptional
individual achievement.
The Compensation Committee believes that Mr. Broady, as Chief Executive
Officer, significantly and directly influences the Company's overall
performance. Accordingly, the Compensation Committee uses base salary and
benefits, annual incentives and long-term incentives to retain and motivate Mr.
Broady and evaluates Mr. Broady's compensation in light of the Company's and
his performance. The Compensation Committee awarded Mr. Broady options to
purchase 10,000 shares of Common Stock in early 1997. These shares, in addition
to the shares granted under the 1997 Plan, were in recognition of his crucial
role in 1996 in the Company's growth in revenues and net income, the
consummation of two successful public offerings of the Company's Common Stock
and agreements for some and consummation of other important acquisitions.
The Compensation Committee reviewed the salaries and bonuses of the
executive officers in 1996. It examined the salaries and bonuses of executive
officers at other companies of a similar size. In its review, the Compensation
Committee relied heavily on information provided by Towers Perrin, a nationally
recognized expert in compensation. The Compensation Committee also reviewed the
performance of executive officers and the Company in 1996. The Compensation
Committee considered the Company's growth in revenues and net income, the
consummation of two successful public offerings of the Company's Common Stock
and agreements for some and consummation of other important acquisitions. To
remain competitive by moving the salary and annual bonus to the median of pay
of other similarly sized companies and to reward individual and Company
achievements in 1996, the Compensation Committee thus decided to increase the
base salaries of the top three executive officers by approximately 20% for
1997.
As additional consideration for the Company's results in 1996, the
Compensation Committee recommended bonuses to the Company's top executive
officers equal to approximately 80% of their base salaries. These bonuses were
based on a formula which compensated the executive officers for the Company
achieving and exceeding budgeted net income for 1996.
The Compensation Committee also proposed the 1997 Plan, which is a
formula-based stock option plan designed to reward the executive officers and
other key employees for the Company's performance. The Compensation Committee
believes the 1997 Plan will provide long term incentives to the executive
officers and other key employees, help attract, retain and motivate these
people and increase value for the Company's stockholders. See "Proposal to
Approve Ultrak, Inc. Incentive Stock Option Plan" for a description of the 1997
Plan.
Charles C. Neal
William C. Lee
Robert F. Sexton
8
<PAGE> 13
PERFORMANCE GRAPHS
The following chart compares the cumulative total stockholder return on
the Company's Common Stock during the five fiscal years ended December 31, 1996
with the cumulative total return on the Nasdaq Stock Market index and a
self-determined peer group. The self-determined peer group consists of ten
companies actively competing with the Company in the security industry. The
Company chose to use the self-determined peer group rather than the peer group
composed of all publicly-traded companies with the same two digit SIC code
(wholesale trade - durable goods) used in prior years because the Company
believes that the self-determined peer group is more indicative of the
Company's competition in the security industry.
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 31, 1991 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.
9
<PAGE> 14
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR ULTRAK, INC.
Prepared by the Center for Research in Security Prices
Produced on 02/03/97 including data to 12/31/96
[GRAPH]
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
--------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
100.0 89.2 102.7 102.7 92.8 439.5
100.0 116.4 133.6 130.6 184.7 227.2
100.0 127.3 179.8 186.7 168.9 176.1
</TABLE>
Companies in the Self-Determined Peer Group
CHECKPOINT SYSTEMS INC COHU INC
KNOGO NORTH AMERICA INC LO JACK CORP
MAGAL SECURITY SYSTEMS LTD PITTWAY CORP DEL
ROLLINS INC SENSORMATIC ELECTRONICS CORP
VICON INDUSTRIES INC VIDEO SENTRY CORP
NOTES:
A. The lines represent monthly index levels derived from compounded
daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/91.
10
<PAGE> 15
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS 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, 1996 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.
<TABLE>
<CAPTION>
Common Stock (1) Series A Preferred Stock (1)
--------------------- ----------------------------
Shares Percentage Shares Percentage
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
George K. Broady(2) 2,190,435 15.2% 195,351 100.0%
Pilgram Baxter & Associates, Ltd.(3) 1,098,700 7.9% -- --
James D. Pritchett(4) 161,996 1.2% -- --
Roland Scetbon(5) 131,944 1.0% -- --
Tim D. Torno(6) 53,750 * -- --
Anne De Greef-Safft 1,590 * -- --
Albert J. Gold(7) 21,667 * -- --
Jeffrey D. Blum(8) 4,500 * -- --
A. Neal Cooper(9) 5,000 * -- --
William C. Lee 29,667 * -- --
Charles C. Neal(10) 156,909 1.1 -- --
Robert F. Sexton(11) 103,066 * -- --
All executive officers and directors 2,860,524 19.6% 195,351 100.0%
as a group (seven persons)(12)
</TABLE>
- ---------------
* less than 1%
(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,
148,851 shares issuable upon exercise of stock options currently
exercisable or exercisable within 60 days and 406,981 shares issuable upon
conversion of shares of the Series A Preferred Stock owned by Mr. Broady.
Mr. Broady disclaims beneficial ownership of the shares of Common Stock
owned by the trust. Mr. Broady owns all 195,351 outstanding shares of
Series A Preferred Stock and each share of Series A Preferred Stock has
16.667 votes on all matters submitted to a vote of stockholders. Through
his ownership of Common Stock and the Series A Preferred Stock, Mr. Broady
controls approximately 28.6% of the voting power of all outstanding shares
of capital stock. Mr. Broady's address is 1220 Champion Circle, Suite 100,
Carrollton, Texas 75006.
(3) Pilgrim Baxter & Associates, Ltd.'s address is 11255 Drummer Lane, Suite
300, Wayne, Pennsylvania 19087.
(4) Includes 124,167 shares issuable upon exercise of stock options currently
exercisable or exercisable within 60 days held by Mr. Pritchett.
(5) All of the shares are owned by Frida, S.A., a corporation owned by Mr.
Scetbon.
(6) Includes 53,750 shares issuable upon exercise of stock options currently
exercisable or exercisable within 60 days held by Mr. Torno.
(7) Includes 13,167 shares issuable upon exercise of stock options currently
exercisable or exercisable within 60 days held by Mr. Gold, 6,000 shares
owned by his wife and 2,500 shares owned jointly by his wife and daughter.
11
<PAGE> 16
(8) Includes 2,000 shares issuable upon exercise of stock options currently
exercisable or exercisable within 60 days held by Mr. Blum.
(9) Includes 2,000 shares issuable upon exercise of stock options currently
exercisable or exercisable within 60 days held by Mr. Cooper.
(10) Comprised of 9,650 shares owned by Pantheon, Incorporated, a corporation
owned by Mr. Neal and his wife, and 147,259 shares owned by Chas. A. Neal
& Company, a corporation of which Mr. Neal is President.
(11) Includes 5,556 shares owned by Mr. Sexton's wife.
(12) Includes options to purchase an aggregate of 343,935 shares held by
Messrs. Broady, Pritchett, Torno, Gold, Blum and Cooper.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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, 1996, the amount guaranteed by Mr. Broady was approximately
$470,000 and the total amount of indebtedness of Veravision to the Company was
$1,000,000. 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 1996 totaled
approximately $1,399,000. 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. In December 1996, Veravision entered into
an agreement with a subsidiary of the Company pursuant to which Veravision will
merge into such subsidiary and become a wholly owned subsidiary of the Company.
During 1996 the Company made purchases of approximately $427,000 from
Ultrak Electronics Limited, a Hong Kong corporation of which Mr. Broady owns
approximately 49% 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.
In September 1996, the Company acquired all of the outstanding share
capital of Bisset for $5.0 million in cash, 289,855 shares of Common Stock,
$2.5 million in deferred consideration payable in cash and Common Stock and up
to an additional $2.5 million payable in cash and Common Stock, if certain
pre-tax income levels are attained by Bisset over a one-year period beginning
July 1, 1996. Roland Scetbon, a director of the Company, was one of the owners
of Bisset and was elected as a director in conjunction with the acquisition of
Bisset.
12
<PAGE> 17
PROPOSAL FOR AMENDMENT TO
ULTRAK, INC. 1988 NON-QUALIFIED STOCK OPTION PLAN
The Company maintains the 1988 Plan, covering an aggregate of 833,334
shares of Common Stock of the Company. The Company adopted the 1988 Plan on
April 15, 1988, which has been amended on November 1, 1991 and December 28,
1993. On September 27, 1996, the Board of Directors unanimously approved an
amendment to the 1988 Plan that would increase the number of shares available
under the 1988 Plan from 833,334 to 1,000,000 and recommended that the
amendment be submitted to the stockholders of the Company. If the proposal to
amend the 1988 Plan receives stockholder approval, the number of shares
issuable under the 1988 Plan will be increased from 833,334 to 1,000,000.
DESCRIPTION OF 1988 PLAN
Pursuant to the 1988 Plan, options to purchase shares of Common Stock may
be issued to full-time employees, including officers, chosen by the
Compensation Committee of the Board of Directors. 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, 1996, options to purchase 658,775 shares were
outstanding at exercise prices ranging from $1.20 per share to $28.75 per
share. Of the total options, options to purchase 420,101 shares were subject to
options held by the three executive officers of the Company. The option
exercise price is set by the Compensation Committee of the Board of Directors
on the date of grant near or at the then verifiable market price of the
Company's Common Stock. During 1996, 47,000 options were granted to employees
of the Company at the then market price. During 1996, 21,850 options were
exercised by 10 employees and options to purchase 33,250 shares were cancelled.
RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
Approval of the proposed amendment to the 1988 Plan requires the
affirmative vote equal to at least a majority of all of the outstanding Voting
Shares, in person or by Proxy. The Board of Directors recommends that the
stockholders vote FOR the approval of the amendment to the 1988 Plan.
13
<PAGE> 18
PROPOSAL TO APPROVE
ULTRAK, INC. INCENTIVE STOCK OPTION PLAN
The Board of Directors has established the 1997 Plan, subject to the
approval of the stockholders, pursuant to which options may be granted to
eligible employees and the non-employee directors of the Company for the
purchase of an aggregate of 400,000 shares of Common Stock of the Company.
Employees eligible under the 1997 Plan are the executive officers and such
other management employees determined by the Compensation Committee each year.
To be eligible for an option grant for a fiscal year, an otherwise eligible
employee or director must be employed by the Company or serve as a director by
January 1 of that year. The 1997 Plan is a formula-based plan administered by
the Compensation Committee. The Compensation Committee may grant either
nonqualified stock options or incentive stock options, as defined by the
Internal Revenue Code of 1986, as amended (the "Code").
Options are granted under the 1997 Plan based on the Company achieving one
or more of the following considerations for the fiscal year: (i) Economic Value
Added ("EVA"), the primary component of which is the amount of net income for
the year which exceeds a hurdle or target amount of return on stockholders'
equity, (ii) Market Value Added ("MVA"), the primary component of which is the
increase in the market value for the fiscal year of the Company as measured by
the price of its Common Stock or (iii) Budget Achievement ("Budget"), the
primary component of which is the Company's ability to meet and exceed its
approved financial budget for the fiscal year. Prior to March 31 of each fiscal
year, the Compensation Committee will determine the percentage that each of the
above considerations represents in the determination of grants under the 1997
Plan, which percentages must aggregate to 100%, and the maximum number of
options that can be granted based on the fiscal year's performance ("Option
Pool"), which cannot exceed 1% of the outstanding Common Stock of the Company.
Prior to March 31 of each fiscal year, the Compensation Committee will
determine the percentage that each eligible employee and non-employee director
is eligible to receive from the Option Pool.
<TABLE>
<CAPTION>
ULTRAK, INC.
INCENTIVE STOCK OPTION PLAN (1)
NAME AND POSITION DOLLAR VALUE ($) NUMBER OF UNITS
- ----------------- ---------------- ---------------
<S> <C> <C>
George K. Broady ................................. 356,115 20,795
Chairman of the Board, Chief
Executive Officer and President
James D. Pritchett ............................... 267,082 15,596
Executive Vice President
and Chief Operating Officer
Tim D. Torno ..................................... 166,181 9,704
Vice President-Finance, Secretary,
Treasurer and Chief Financial Officer
Executive officers as a group .................... 789,377 46,095
Non-executive directors as a group(2) ............ -- --
Non-executive officers and employees as a group... 1,584,679 92,536
</TABLE>
- ---------------
(1) Subject to stockholder approval of the 1997 Plan, on April 1, 1997, the
Compensation Committee granted options to purchase an aggregate of 138,631
shares of Common Stock, at an exercise price of $17.125 per share. The
grants were based on the following percentages established by the
Compensation Committee for 1996: (a) EVA percentage, 25%; (b) MVA
percentage, 75%; and (c) Budget percentage, 0%.
(2) Pursuant to the terms of the 1997 Plan, the non-employee directors of the
Company were not eligible for option grants based on the Company's 1996
performance but are eligible to receive grants for future years.
The 1997 Plan requires that the purchase price under each stock option
must not be less than 100% of the fair market value of the Company's Common
Stock at the time of the grant of the option. No incentive stock option,
however, may be granted to an employee who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Company ("Ten
Percent Stockholder Employee") unless the option price is at least 110% of the
fair market value of the Company's Common Stock at the date of the grant.
14
<PAGE> 19
There is no limit on the fair market value of incentive stock options that
may be granted to an employee in any calendar year, but no employee may be
granted incentive stock options that first become exercisable during a calendar
year for the purchase of stock with an aggregate fair market value (determined
as of the date of grant of each option) in excess of $100,000. An incentive
stock option (or an installment thereof) counts against the annual limitation
only in the year it first becomes exercisable.
The option exercise period for options granted under the 1997 Plan is ten
years from the date the options are granted. No incentive stock option,
however, may be granted to a Ten Percent Stockholder Employee unless the option
period is limited to five years. Options become exercisable in annual
installments of 20% on each anniversary of the date of grant. All installments
that become exercisable are cumulative and may be exercised at any time after
they become exercisable until the option expires. Options are not assignable.
Full payment for shares purchased upon exercise of an option must be made
at the time of exercise, and no shares may be issued until full payment is
made. The 1997 Plan provides that an option agreement may include a provision
permitting an optionee the right to tender previously owned shares of the
Company's Common Stock in partial or full payment for shares to be purchased on
exercise of an option. Unless sooner terminated by action of the Board of
Directors, the 1997 Plan will terminate on January 28, 2007 and no options may
thereafter be granted under the 1997 Plan.
The 1997 Plan contains antidilution provisions applicable in the event of
increase or decrease in the number of outstanding shares of the Company,
effected by any stock dividend, stock split, share combination, exchange of
shares, recapitalization, merger, consolidation, separation, reorganization,
liquidation, or the like, of or by the Company.
The Board of Directors may at any time amend or discontinue the 1997 Plan
except that it may not, without stockholder approval, (i) materially increase
the number of securities that may be issued under the 1997 Plan or (ii)
materially modify the requirements of eligibility for participation in the 1997
Plan.
TAX STATUS OF STOCK OPTIONS
Pursuant to the 1997 Plan, the Compensation Committee may provide for an
option to qualify either as an incentive stock option or nonqualified option.
INCENTIVE STOCK OPTIONS. All stock options that qualify under the rules of
Section 422 of the Code will be entitled to incentive stock option treatment.
To receive incentive stock option treatment, an optionee must not dispose of
the acquired stock within two years after the option is granted or within one
year after the shares are transferred to the optionee. In addition, the
individual must have been an employee of the Company for the entire time from
the date of granting of the option until three months (one year if the employee
is disabled) before the date of the exercise. The requirement that the
individual be an employee and the two-year and one-year holding periods are
waived in the case of death of the employee. If all such requirements are met,
no tax will be imposed upon the exercise of the option, and any gain upon sale
of stock will be entitled to capital gain treatment. The employee's gain on
exercise (the excess of fair market value at the time of exercise over the
exercise price) of an incentive stock option is a tax preference item and,
accordingly, is included in the computation of alternative minimum taxable
income.
If an employee does not meet the two-year and one-year holding
requirements (a "disqualifying disposition"), but does meet all other
requirements, income tax will be imposed at the time of sale of the stock. In
such event, the employee's gain on exercise will be treated as ordinary income
rather than capital gain and the Company will get a corresponding deduction at
the time of sale. Any remaining gain on sale will be short-term or long-term
capital gain, depending on the holding period of the stock. If the amount
realized on the disqualifying disposition is less than the value at the date of
exercise, the amount includible in gross income, and the amount deductible by
the Company, will equal the excess of the amount realized on the sale or
exchange over exercise price.
NONQUALIFIED STOCK OPTIONS. Generally, an optionee will not recognize
income for federal income tax purposes upon the grant of an option. On exercise
of such option, however, the optionee will recognize ordinary income in an
amount equal to the excess of the fair market value of the shares on the date
of exercise over the option price of such shares, and the Company will be
allowed a federal income tax deduction equal to the amount of ordinary income
recognized by the optionee at the time of such recognition by the optionee.
The foregoing statements are based upon present federal income tax laws
and regulations and are subject to change if the tax laws and regulations, or
interpretations thereof, are changed.
15
<PAGE> 20
RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
Approval of the 1997 Plan requires the affirmative vote equal to at least
a majority of all of the outstanding Voting Shares, in person or by Proxy. If
the requisite vote of the stockholders is not obtained, the 1997 Plan and all
then outstanding options will become null and void. The Board of Directors
recommends that the stockholders vote FOR the approval and ratification of the
1997 Plan.
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,
1996. If the stockholders 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, 1997. Approval of the appointment of Grant Thornton LLP
requires the affirmative vote equal to at least a majority of the votes cast at
the Meeting in person or by Proxy. 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.
STOCKHOLDER PROPOSALS
Stockholders may submit proposals on matters appropriate for stockholder
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 1998 Annual Meeting of Stockholders, such proposals must be
received by the Company not later than January 23, 1998. 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
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% stockholders 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, 1996, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% stockholders were complied with, except that Mr. Scetbon was
late in filing a Form 3 on his election to the Board of Directors and Messrs.
Gold, Blum and Cooper and Ms. De Greef-Safft were late in filing a Form 3 upon
their election as executive officers.
16
<PAGE> 21
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.
The Company's Annual Report for the fiscal year ended December 31, 1996
(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,
/s/ TIM D. TORNO
Tim D. Torno
Secretary
Carrollton, Texas
April 25, 1997
17
<PAGE> 22
[ULTRAK LOGO]
1220 Champion Circle, Suite 100
Carrollton, TX 75006
Tel: (972) 280-9675
Fax: (972) 280-9357
<PAGE> 23
APPENDIX A
[NOT PART OF PROXY STATEMENT]
AMENDMENT NO. 3
TO
ULTRAK, INC.
1988 NON-QUALIFIED STOCK OPTION PLAN
This Amendment No. 3 amends the Ultrak, Inc. 1988 Non-Qualified Stock
Option Plan adopted by the Board of Directors (the "Board") of Ultrak, Inc., a
Delaware corporation (the "Company"), on April 15, 1988, as amended effective
November 1, 1991 and December 28, 1993 (the "Plan").
WITNESSETH
WHEREAS, the Plan provided that the Company may grant options to purchase
up to an aggregate of 5,000,000 shares of the Company's Common Stock, no par
value ("Common Stock"), pursuant to the Plan; and
WHEREAS, Section 4(f) of the Plan provides that the number of shares of
Common Stock for which options may be granted to persons participating under the
Plan shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from the subdivision or
consolidation of shares of Common Stock; and
WHEREAS, on December 17, 1993 the stockholders of the Company approved,
effective December 28, 1993, a one for six reverse stock split in the form of a
reclassification of the Company's Common Stock and, as a result, the authorized
number of shares of Common Stock under the Plan was revised from 5,000,000 to
833,334; and
WHEREAS, pursuant to Section 7 of the Plan, on September 27, 1996, the
Board approved an increase in the number of authorized shares of Common Stock
under the Plan from 833,334 to 1,000,000;
NOW, THEREFORE, in consideration of the foregoing, effective September 27,
1996, Section 2 of the Plan is amended to read in its entirety as follows:
"2. Stock Subject to Option. Subject to adjustment as provided in
Sections 4(h) and 4(j) hereof, Options may be granted by the Company from
time to time to purchase up to an aggregate of 1,000,000 shares of the
Company's authorized but unissued Common Stock, provided that the number of
shares that may be granted to any employee under the Program shall be
reasonable in relation to the purpose of the Program. Shares that by reason
of the expiration of an Option or otherwise are no longer subject to
purchase pursuant to an Option granted under the Program may be re-Optioned
under the Program. The Company shall not be required, upon the exercise of
any Option, to issue or deliver any shares of stock prior to the completion
of such exemption, registration or other qualification of such shares under
state or Federal law, rule or regulation as the Company shall determine to
be necessary or desirable."
This Amendment No. 3 to the Plan was adopted by the Board as of September
27, 1996.
/s/ GEORGE K. BROADY
------------------------------------
George K. Broady, Chairman of the
Board,
Chief Executive Officer and
President
/s/ TIM D. TORNO
------------------------------------
Tim D. Torno, Vice
President -- Finance,
Treasurer and Secretary
<PAGE> 24
APPENDIX B
[NOT PART OF PROXY STATEMENT]
ULTRAK, INC.
INCENTIVE STOCK OPTION PLAN
On January 29, 1997, the Board adopted the following Incentive Stock
Option Plan:
1. PURPOSE. The purpose of the Plan is to provide key
employees and non-employee directors with a proprietary interest in the
Company through the granting of Incentive Options and Nonqualified
Options which will
(a) increase the interest of the key employees and non-
employee directors in the Company's welfare;
(b) furnish an incentive to the key employees and non-
employee directors to continue their services for
the Company; and
(c) provide a means through which the Company may
attract able persons to enter its employ or serve
on the Board.
2. ADMINISTRATION. The Plan shall be administered by the
Committee.
3. PARTICIPANTS. Each Year the Committee shall determine the
particular key employees of the Company and its Subsidiaries and non-
employee directors of the Company to whom options, if any, are to be
granted for that Year, and who will, upon such grant, become
participants in the Plan. For purposes of the Plan, "key employees"
means all executive officers and such other management employees as
determined by the Committee each Year. An otherwise eligible employee
or director must be employed by the Company or a Subsidiary or serving
on the Board by January 1 of a Year to be eligible to be granted an
option for that Year. An Incentive Option may not be granted to a
director who is not an employee of the Company or one of its
Subsidiaries.
4. STOCK OWNERSHIP LIMITATION. No Incentive Option may be
granted to an employee who owns more than 10% of the voting power of all
classes of
<PAGE> 25
stock of the Company or its Parent or Subsidiaries. This limitation
will not apply if the option price is at least 110% of the fair market
value of the stock at the time the Incentive Option is granted and the
Incentive Option is not exercisable more than five years from the date
it is granted.
5. SHARES SUBJECT TO PLAN. The Committee may not grant
options under the Plan for more than 400,000 shares of Common Stock of
the Company, but this number may be adjusted to reflect, if deemed
appropriate by the Committee, any stock dividend, stock split, share
combination, recapitalization, or the like, of or by the Company.
Shares to be optioned and sold may be made available from either
authorized but unissued Common Stock or Common Stock held by the Company
in its treasury. Shares that by reason of the expiration of an option
or otherwise are no longer subject to purchase pursuant to an option
granted under the Plan may be re-offered under the Plan.
6. LIMITATION ON AMOUNT. The aggregate fair market value
(determined at the time of grant) of the shares of Common Stock which
any employee is first eligible to purchase in any Year by exercise of
Incentive Options granted under the Plan and all incentive stock option
plans of the Company or its Parent or Subsidiaries shall not exceed
$100,000. For this purpose, the fair market value (determined at the
respective date of grant of each option) of the stock purchasable by
exercise of an Incentive Option (or an installment thereof) shall be
counted against the $100,000 annual limitation for an employee only for
the Year such stock is first purchasable under the terms of the option.
The total number of shares of Common Stock subject to options granted
for any Year, if any, including to any individual participant, shall not
exceed one
-2-
<PAGE> 26
percent of the aggregate number of shares of Common Stock outstanding as
of the Date of Grant of options for such Year.
7. DETERMINATION OF GRANTS AND ALLOTMENT OF SHARES. Each key
employee and non-employee director of the Company determined by the
Committee to be eligible pursuant to Section 3 for a Year shall be
granted an option, effective as of the Date of Grant for that Year, to
purchase a number of shares of Common Stock to be determined pursuant to
this Section 7 based on or more of Economic Value Added (EVA)
considerations, Market Value Added (MVA) considerations and budget
achievement considerations as described herein.
(a) Annual Number of Shares to be Granted Based on EVA
Considerations. Options in the amounts determined
hereunder shall be granted pursuant to this subsection (a)
to the eligible key employees and non-employee directors
for a Year if the EVA threshold is met that Year. The EVA
threshold for a Year shall be met if the net income after
taxes of the Company for that Year exceeds the EVA hurdle
amount established for that Year and such excess amount
shall be referred to as "EVA." The EVA hurdle amount for
a Year shall be equal to the average stockholder equity of
the Company for the Year multiplied by the EVA hurdle rate
for that Year. The average stockholder equity of the
Company for a Year shall be determined by adding the
stockholder equity of the Company as of the first day of
the Year to the stockholder equity of the Company as of
the last day of the Year, determined by excluding the
proceeds of any stock offering and the effects of any
acquisitions, if any, during that Year, and dividing that
sum by two. If the EVA threshold is met for a Year, the
number of shares of Common Stock to be granted pursuant to
this subsection (a) for that Year shall be determined by
multiplying the EVA for that Year by the EVA factor
established for that Year and then dividing that product
by the adjusted market value of the Common Stock and then
multiplying that quotient by the EVA percentage
established for that Year. The adjusted market value of
the Common Stock for a Year shall be equal to the closing
price per share of the Common Stock on the Date of Grant
for such Year multiplied by the Black-Scholes discount
factor established for that Year.
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<PAGE> 27
(b) Establishing EVA Considerations for a Year. Except
for the 1996 Year of the Plan, the Committee shall
determine the EVA hurdle rate, the EVA factor, the EVA
percentage, and the Black-Scholes discount factor for a
Year prior to March 31 of the Year and shall set forth all
such determinations in its minutes. For the 1996 Year,
the EVA hurdle rate shall be 15%, the EVA factor shall be
25%, the EVA percentage shall be 25% and the Black-Scholes
discount factor shall be 50%.
(c) Allocation of Shares Granted Under Subsection (a).
The number of shares granted under subsection (a) for a
Year shall be allocated among the eligible key employees
and non-employee directors for that Year based on the
percentage established for each such participant by the
Committee for that Year. Except for the 1996 Year of the
Plan, the Committee shall establish the respective
percentage for each such participant prior to March 31 of
the Year and the aggregate of all such percentages shall
equal 100%.
(d) Annual Number of Shares to be Granted Based on MVA
Considerations. Options in the amounts determined
hereunder shall be granted pursuant to this subsection (d)
to the eligible key employees and non-employee directors
for a Year if the MVA threshold is met for that Year. The
MVA threshold for a Year shall be met if the excess of the
average closing price of the Common Stock of the Company
for the month of December of that Year over the average
closing price of the Common Stock of the Company for the
month of December of the preceding Year exceeds the MVA
hurdle amount established for that Year and such excess
amount shall be referred to as "per share MVA." The MVA
hurdle amount for a Year shall be equal to the average
closing price of the Common Stock of the Company for the
month of December of the preceding Year multiplied by the
MVA hurdle rate for that Year. If the MVA threshold is
met for a Year, the number of shares of Common Stock to be
granted pursuant to this subsection (d) for that Year
shall be determined by multiplying the per share MVA for
that Year by the number of shares of Common Stock of the
Company outstanding as of the Date of Grant (excluding any
shares of Common Stock issued since the prior Date of
Grant pursuant to any stock offering or acquisition by the
Company) and multiplying that product by the MVA factor
established for that Year and then dividing that product
by the adjusted market value of the Common Stock and then
multiplying that quotient by the MVA percentage for that
Year. The adjusted market value of the Common Stock for a
Year shall be equal to the closing price per share of the
Common Stock on the Date of Grant for such Year multiplied
by the Black-Scholes discount factor established for that
Year.
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<PAGE> 28
(e) Establishing MVA Considerations for a Year. Except
for the 1996 Year of the Plan, the Committee shall
determine the MVA hurdle rate, the MVA factor, the MVA
percentage, and the Black-Scholes discount factor for a
Year prior to March 31 of the Year and shall set forth all
such determinations in its minutes. For the 1996 Year,
the MVA hurdle rate shall be 15%, the MVA factor shall be
5%, the MVA percentage shall be 75%, and the Black-Scholes
discount factor shall be 50%.
(f) Allocation of Shares Granted Under Subsection (d).
The number of shares granted under subsection (d) for a
Year shall be allocated among the eligible key employees
and non-employee directors for that Year based on the
percentage established for each such participant by the
Committee for that Year. Except for the 1996 Year of the
Plan, the Committee shall establish the respective
percentage for each such participant prior to March 31 of
the Year and the aggregate of all such percentages shall
equal 100%.
(g) Annual Number of Shares to be Granted Based on
Budget Achievement Considerations. Commencing with the
1997 Year of the Plan, options in the amounts determined
hereunder shall be granted pursuant to this subsection (g)
to the eligible key employees and non-employer directors
for a Year if the budget threshold is met for that Year.
The budget threshold for a Year shall be met if the
Company budget approved for that Year by the board of
directors is met or exceeded. If the budget threshold is
met for a Year, the number of shares of Common Stock to be
granted pursuant to this subsection (g) for that Year
shall be equal to 50% of the allocable pool for that Year
(the "allocable pool percentage"). The allocable pool for
a Year shall be equal to one percent of the aggregate
number of shares of Common Stock outstanding as of the
Date of Grant of options for such Year multiplied by the
budget percentage for that Year. If the budget threshold
for year is exceeded, the allocable pool percentage for
that Year shall be increased by 5% for each percentage
point (rounded to the nearest whole percentage) that the
actual performance of the Company for the Year exceeds the
budget for the Year (up to a maximum of 100% if the budget
is exceeded by 10%).
(h) Establishing Budget Considerations for a Year.
Except for the 1997 Year of the Plan, the Committee shall
determine the budget percentage for a Year prior to March
31 of the Year and shall set forth such determination in
its minutes. For the 1997 Year, the budget percentage
shall be 75%.
(i) Allocations of Shares Granted Under Subsection (g).
The number of shares granted under subsection (g) for a
Year shall be allocated among
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<PAGE> 29
the eligible key employees and non-employee directors for
that Year based on the percentage established for each
such participant by the Committee for that Year. Except
for the 1997 Year of the Plan, the Committee shall
establish the respective percentage for each participant
prior to March 31 of the Year and the aggregate of all
such percentages shall equal 100%.
The grant of an option to a key employee or non-employee director shall
not be deemed either to entitle the key employee or director to, or to
disqualify the key employee or director from, participation in any other
grant of options under the Plan.
8. GRANT OF OPTIONS. The Committee is authorized to grant
Incentive Options and Nonqualified Options under the Plan. All options
under the Plan shall be automatically granted as provided in Section 7.
The grant of options shall be evidenced by stock option agreements
containing such terms and provisions as are approved by the Committee,
but not inconsistent with the Plan, including provisions that may be
necessary to assure that any option that is intended to be an Incentive
Option will comply with Section 422 of the Internal Revenue Code of
1986, as amended. The Company shall execute stock option agreements
upon instructions from the Committee. The Plan shall be submitted to
the Company's stockholders for approval. The Committee may grant
options under the Plan prior to the time of stockholder approval, which
options will be effective when granted, but if for any reason the
stockholders of the Company do not approve the Plan prior to one year
from the date of adoption of the Plan by the Board, all options granted
under the Plan will be terminated and of no effect, and no option may be
exercised in whole or in part prior to such stockholder approval.
A stock option agreement may provide that the participant may
request approval from the Committee to exercise an option or a portion
thereof by tendering shares of
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<PAGE> 30
Common Stock at the fair market value per share on the date of exercise
in lieu of cash payment of the exercise price.
9. OPTION PRICE. The option price for all options to be
granted for a Year shall be equal to the average of the high and low
price per share of the Common Stock (or 110% of such amount as required
by Section 4) on the Date of Grant for such Year.
10. OPTION PERIOD. Except as provided in Section 4 hereof,
the Option Period will begin on the Date of Grant of the option and will
terminate on the tenth anniversary of that date.
11. EXERCISE OF OPTION. Options granted under the Plan shall
become exercisable in five cumulative annual installments of 20% of the
total optioned shares beginning on the first anniversary of the Date of
Grant of the option, and succeeding anniversaries thereafter. If an
installment covers a fractional share, such installment will be rounded
off to the next highest share, except the final installment, which will
be for the balance of the total optioned shares. In no event may an
option be exercised or shares be issued pursuant to an option if any
requisite action, approval or consent of any governmental authority of
any kind having jurisdiction over the exercise of options shall not have
been taken or secured.
12. RIGHTS IN EVENT OF DEATH OR DISABILITY. If a participant
dies or becomes (disabled within the meaning of Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended) prior to expiration of his
right to exercise an option in accordance with the provisions of his
stock option agreement without having totally exercised the option, the
option may be exercised, to the extent of the total remaining
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<PAGE> 31
shares that have not been purchased by exercise by the participant prior
to the date of his death or disability, (i) in the case of death, by the
participant's estate or by the person who acquired the right to exercise
the option by bequest or inheritance or by reason of the death of the
participant, or (ii) in the case of disability, by the participant or
his personal representative; provided, however, in either case that the
option is exercised prior to the date of its expiration or one year from
the date of the participant's death or disability, whichever first
occurs. The date of disability of a participant shall be determined by
the Committee.
13. RIGHTS IN EVENT OF TERMINATION OF EMPLOYMENT. If a
participant's employment with the Company and its Subsidiaries or
service as a non-employee director of the Company terminates without
cause (as defined below) prior to expiration of his right to exercise an
option in accordance with the provisions of his stock option agreement
without having totally exercised the option, the option may be
exercised, to the extent of the shares with respect to which the option
could have been exercised by the participant on the date his employment
or service as a director terminates, prior to the date of its expiration
or 30 days from the date his employment or directorship terminates,
whichever first occurs. If a participant's employment with the Company
and its Subsidiaries or service as a non-employee director of the
Company is terminated with cause prior to expiration of his right to
exercise an option in accordance with the provisions of his stock option
agreement without having totally exercised the option, the option shall
terminate as of the effective date his employment or service as a
director is terminated. For purposes of the Plan, a participant's
employment or service as a director
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<PAGE> 32
shall be deemed terminated with cause if the Company terminates his
employment or directorship because of (i) a material breach by the
participant of any of the terms of his employment contract, if any, (ii)
his conviction for fraud or embezzlement, or because he has conducted
himself in any way punishable as a felony, (iii) his engaging in conduct
constituting or exhibiting malfeasance, gross negligence, gross
incompetence or moral turpitude, or (iv) his suffering from drug or
alcohol abuse or addiction that could, in the opinion of the Board,
materially impair his ability to perform his duties or injure the
assets, properties, operations or business reputation of the Company.
14. PAYMENT. Full payment for shares purchased upon
exercising an option shall be made in cash or by check or by tendering
shares of Common Stock at the fair market value per share at the time of
exercise, or on such other terms as are set forth in the applicable
option agreement. No shares may be issued until full payment of the
purchase price therefor has been made, and a participant will have none
of the rights of a stockholder until shares are issued to him. In
addition, the participant shall tender payment of the amount as may be
requested by the Company, if any, for the purpose of satisfying its
liability to withhold federal, state or local income or other taxes
incurred by reason of the exercise of an option.
15. CAPITAL ADJUSTMENTS AND REORGANIZATIONS; ANTIDILUTION.
The number of shares of Common Stock covered by each outstanding option
granted under the Plan and the option price may be adjusted to reflect,
as deemed appropriate by the Committee, any stock dividend, stock split,
share combination, exchange of shares,
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<PAGE> 33
recapitalization, merger, consolidation, separation, reorganization,
liquidation or the like, of or by the Company.
In the event the Company shall be a party to any merger,
consolidation or corporate reorganization, as the result of which the
Company shall be the surviving corporation the rights and duties of the
participants holding options and the Company shall not be affected in
any manner. In the event the Company shall sell all or substantially
all of its assets or shall be a party to any merger, consolidation or
corporate reorganization, as the result of which the Company shall not
be the surviving corporation, or in the event any other person or entity
may make a tender or exchange offer for stock of the Company whereby
such other person or entity would own more than 50% of the outstanding
Common Stock of the Company (the surviving corporation, purchaser, or
tendering corporation being collectively referred to as the "Purchaser,"
and the transaction being collectively referred to as the
"Transaction"), then the Company may, at its election, (a) reach an
agreement with the Purchaser that the Purchaser will assume the
obligations of the Company under each option; (b) reach an agreement
with the Purchaser that the Purchaser will convert each option into an
option of at least equal value as to stock of the Purchaser; or (c) not
later than twenty days prior to the effective date of such Transaction,
notify each participant holding an option that his option is accelerated
and afford to the participant a right for ten days after the date of
such notice to exercise any then unexercised portion of the option
whether or not such option shall then be exercisable according to its
terms. Within such ten-day period, each such participant may exercise
any portion of such option as he may desire and deposit with the Company
the requisite
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<PAGE> 34
cash to purchase in full and not in installments the Common Stock
thereby exercised (or comply with Section 14, if applicable, with
respect to exercising the option by tendering shares of Common Stock in
lieu of each payment for the optioned shares being purchased), in which
case the Company shall, prior to the effective date of the Transaction,
issue all Common Stock thus exercised, which shall be treated as issued
stock for purposes of the Transaction.
16. NON-ASSIGNABILITY. Options may not be transferred other
than by will or by the laws of descent and distribution. During a
participant's lifetime, options granted to a participant may be
exercised only by the participant or by his personal representative as
provided in Section 12.
17. INTERPRETATION. The Committee shall interpret the Plan
and shall prescribe such rules and regulations in connection with the
operation of the Plan as it determines to be advisable for the
administration of the Plan. The Committee may rescind and amend its
rules and regulations.
18. AMENDMENT OR DISCONTINUANCE. The Plan may be amended or
discontinued by the Board without the approval of the stockholders of
the Company, except that any amendment that would (a) materially
increase the number of securities that may be issued under the Plan or
(b) materially modify the requirements of eligibility for participation
in the Plan must be approved by the stockholders of the Company.
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<PAGE> 35
19. EFFECT OF PLAN. Neither the adoption of the Plan nor any
action of the Board or the Committee shall be deemed to give any key
employee or non-employee director any right to be granted an option to
purchase Common Stock of the Company or any other rights except as may
be evidenced by the stock option agreement, or any amendment thereto,
duly authorized by the Committee and executed on behalf of the Company
and then only to the extent and on the terms and conditions expressly
set forth therein. Nothing in this Plan shall be construed as
conferring upon any participant the right to continue as an employee,
officer or director.
20. TERM. Unless sooner terminated by action of the Board,
this Plan will terminate on January 28, 2007. The Committee may not
grant options under the Plan after that date, but options granted before
that date will continue to be effective in accordance with their terms.
21. APPLICABLE LAW. This Plan shall be construed in
accordance with and governed by the laws of the State of Texas.
22. DEFINITIONS. For the purpose of this Plan, unless the
context requires otherwise, the following terms shall have the meanings
indicated:
(a) "Board" means the Board of Directors of the
Company.
(b) "Committee" means the Compensation Committee of the
Board.
(c) "Common Stock" means the Common Stock which the
Company is currently authorized to issue or may in
the future be authorized to issue (as long as the
common stock varies from that currently authorized,
if at all, only in amount of par value).
(d) "Company" means Ultrak, Inc., a Delaware
corporation.
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<PAGE> 36
(e) "Date of Grant" means for any Year the April 1st of
the next Year.
(f) "Incentive Option" means an option granted under
the Plan which meets the requirements of Section
422 of the Internal Revenue Code of 1986, as
amended.
(g) "Nonqualified Option" means an option granted under
the Plan which is not intended to be an Incentive
Option.
(h) "Option Period" means the period during which an
option may be exercised.
(i) "Parent" means any corporation in an unbroken chain
of corporations ending with the Company if, at the
time of granting of the option, each of the
corporations other than the Company owns stock
possessing 50% or more of the total combined voting
power of all classes of stock in one of the other
corporations in the chain.
(j) "Plan" means this Incentive Stock Option Plan, as
amended from time to time.
(k) "Subsidiary" means any corporation in an unbroken
chain of corporations beginning with the Company
if, at the time of the granting of the option, each
of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all
classes of stock in one of the other corporations
in the chain, and "Subsidiaries" means more than
one of any such corporations.
(l) "Year" means the calendar year.
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<PAGE> 37
ULTRAK, INC.
PROXY CARD
The undersigned hereby (i) acknowledges receipt of the Notice dated April 25,
1997 of the Annual Meeting of Stockholders of Ultrak, Inc. (the "Company") to
be held at 3000 Thanksgiving Tower, Dallas, Texas 75201, on Friday, May 23,
1997 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 Company 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 follows:
(a) Proposal to elect six directors to serve until the next Annual Meeting of
Stockholders or until their respective successors are elected and qualified.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary) nominees listed below
Directors: George K. Broady, James D. Pritchett, William C. Lee, Charles
C. Neal, Robert F. Sexton and Roland Scetbon.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
(b) Proposal to approve the amendment to the Ultrak, Inc. 1988 Non-Qualified
Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) Proposal to approve the Ultrak, Inc. Incentive Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) 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,
1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) 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)
<PAGE> 38
(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 adjournment 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 substitutes, or any of them
may lawfully do by virtue hereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
Signature:_____________________________
Printed Name:__________________________
Dated:_________________________________
Please date this Proxy and sign your
name exactly as it appears hereon.
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.
