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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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SCHEDULE 14D-9
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SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934

HOLMES PROTECTION GROUP, INC.
(Name of Subject Company)

HOLMES PROTECTION GROUP, INC.
(Name of Person(s) Filing Statement)

COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)

436419105

(CUSIP Number of Class of Securities)

GEORGE V. FLAGG
PRESIDENT AND CHIEF EXECUTIVE OFFICER
HOLMES PROTECTION GROUP, INC.
440 NINTH AVENUE
NEW YORK, NEW YORK 10001
(212) 760-0630
(Name, Address and Telephone Number of Person Authorized to
Receive Notice and Communications on Behalf of the Person(s) Filing Statement)

COPIES TO:
CORNELIUS T. FINNEGAN, III, ESQ.
WILLKIE FARR & GALLAGHER
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
(212) 821-8000

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ITEM 1. SECURITY AND SUBJECT COMPANY.

The name of the subject company is Holmes Protection Group, Inc., a Delaware
corporation (the "Company"), and the address of the principal executive offices
of the Company is 440 Ninth Avenue, New York, New York 10001. The title of the
class of equity securities to which this Statement relates is the common stock,
par value $.01 per share (the "Common Stock"), of the Company.

ITEM 2. TENDER OFFER OF PURCHASER.

This Statement relates to the tender offer disclosed in a Tender Offer
Statement on Schedule 14D-1 dated January 6, 1998 (the "Schedule 14D-1") of T9
Acquisition Corp., a Delaware corporation ("Purchaser"), to purchase all of the
outstanding shares ("Shares") of Common Stock at a price of $17.00 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated January 6, 1998 (the "Offer to Purchase")
and the related Letter of Transmittal and any supplement thereto (which together
constitute the "Offer"). The Offer is being made pursuant to an Agreement and
Plan of Merger dated as of December 28, 1997 (the "Merger Agreement") among the
Company, Tyco International Ltd., a Bermuda company ("Tyco"), and Purchaser,
which is an indirect wholly owned subsidiary of Tyco.

According to the Schedule 14D-1, the address of the principal executive
office of Tyco is The Gibbons Building, 10 Queen Street, Hamilton HM11 Bermuda,
and the address of the principal executive office of Purchaser is One Tyco Park,
Exeter, New Hampshire 03833.

ITEM 3. IDENTITY AND BACKGROUND.

(a) The name and business address of the Company, which is the person filing
this Statement, are set forth in Item 1 above.

(b)(i) Certain contracts, agreements, arrangements or understandings between
the Company or its affiliates and certain of its directors and executive
officers are, except as noted below, described in the sections entitled
"Compensation of Directors," "Security Ownership of Certain Beneficial Owners
and Management," "Executive Compensation," "Certain Relationships and Related
Transactions," "Employment Agreements" and "Compensation Committee Report to
Stockholders" in the Company's Proxy Statement for its 1997 Annual Meeting of
Stockholders held on May 22, 1997 (the "Proxy Statement"). A copy of the
relevant sections of the Proxy Statement has been filed with the Securities and
Exchange Commission (the "Commission" or the "SEC") as Exhibit 1 to this
Statement and is incorporated herein by reference. Except as described herein
(including in Schedule II hereto) or incorporated by reference herein, to the
knowledge of the Company, as of the date hereof there exists no material
contract, agreement, arrangement or understanding and no actual or potential
conflict of interest between the Company or its affiliates and (i) the Company's
executive officers, directors or affiliates or (ii) Tyco or Purchaser or the
executive officers, directors or affiliates of Tyco or Purchaser.

(ii) The Merger Agreement.

The following is a summary of certain portions of the Merger Agreement and
is qualified in its entirety by reference to the Merger Agreement, a copy of
which has been filed with the Commission as Exhibit 2 to this Statement.
Capitalized terms not otherwise defined below shall have the meanings set forth
in the Merger Agreement.

THE OFFER. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, the Purchaser will purchase all Shares
validly tendered pursuant to the Offer. The Merger Agreement provides that,
without the written consent of the Company, the Purchaser will not (i) decrease
the Per Share Amount or

change the form of consideration payable in the Offer, (ii) decrease the number
of Shares sought in the Offer, (iii) amend or waive satisfaction of the
condition (the "Minimum Condition") that at least 51% of all shares of Common
Stock outstanding, on a fully diluted basis, shall have been tendered and not
withdrawn in the Offer or (iv) impose additional conditions to the Offer or
amend any other term of the Offer in any manner adverse to the holders of
Shares, except that if on the initially scheduled Expiration Date all conditions
to the Offer shall not have been satisfied or waived, the Purchaser may, from
time to time, in its sole discretion, extend the Expiration Date. The Merger
Agreement provides that if, immediately prior to the Expiration Date, as it may
be extended, the Shares tendered and not withdrawn pursuant to the Offer equal
less than 90% of the outstanding Common Stock, the Purchaser may extend the
Offer for a period not to exceed 10 business days.

THE MERGER. The Merger Agreement provides that, following the consummation
of the Offer and subject to the terms and conditions thereof, at the effective
time of the Merger (the "Effective Time") the Purchaser shall be merged with and
into the Company and, as a result of the Merger, the separate corporate
existence of the Purchaser shall cease, and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and an indirect subsidiary
of Tyco.

The respective obligations of Tyco and the Purchaser, on the one hand, and
the Company, on the other hand, to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions: (i) Tyco or the Purchaser or their affiliates shall have consummated
the Offer, unless such failure to purchase is a result of a breach of Tyco's or
the Purchaser's obligations under the Merger Agreement, (ii) the Merger, the
Merger Agreement and the transactions contemplated thereby (the "Company
Proposals") shall have been approved by the requisite vote of the stockholders,
if required by applicable law, in order to consummate the Merger, (iii) no
order, statute, rule, regulation, executive order, stay, decree, judgment or
injunction shall have been enacted, entered, promulgated or enforced by any
court or other governmental authority which prohibits or prevents the
consummation of the Merger which has not been vacated, dismissed or withdrawn
prior to the Effective Time, and (iv) all consents of any governmental authority
required for the consummation of the Merger and the transactions contemplated by
the Merger Agreement shall have been obtained other than those consents the
failure to obtain which will not have a material adverse effect on the business,
assets, condition (financial or other), liabilities or results of operations (a
"Material Adverse Effect") of the Surviving Corporation and its subsidiaries
taken as a whole.

At the Effective Time of the Merger, (i) each issued and outstanding Share
(other than Shares that are held by stockholders properly exercising dissenters'
rights under Delaware law) shall be canceled and extinguished and be converted
into the right to receive the highest per Share amount paid in the Offer (the
"Per Share Amount") in cash payable to the holder thereof, without interest,
(ii) each Share held in the treasury of the Company and each Share owned by Tyco
or any direct or indirect wholly owned subsidiary of Tyco immediately before the
Effective Time shall be canceled and extinguished, and no payment or other
consideration shall be made with respect thereto and (iii) the shares of
Purchaser common stock outstanding immediately prior to the Merger shall be
converted into 1,000 shares of the common stock of the Surviving Corporation
which shares shall constitute all of the issued and outstanding capital stock of
the Surviving Corporation and shall be owned by an indirect subsidiary of Tyco.

THE COMPANY'S BOARD OF DIRECTORS. The Merger Agreement provides that
promptly upon the purchase by Tyco of Shares pursuant to the Offer (and provided
that the Minimum Condition has been satisfied), Tyco shall be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board of Directors of the Company as will give Tyco, subject to compliance with
Section 14(f) of the Securities Exchange Act, representation on the Board of
Directors of the Company equal to at least that number of directors which equals
the product of the total number of directors on the Board of Directors of the
Company (giving effect to the directors appointed or elected pursuant to this
sentence and including current directors serving as officers of the Company)
multiplied by the percentage that the aggregate number of Shares beneficially
owned by Tyco or any affiliate of Tyco (including such Shares as

are accepted for payment pursuant to the Offer, but excluding Shares held by the
Company) bears to the number of Shares outstanding. At such time, if requested
by Tyco, the Company will also cause each committee of the Board of Directors of
the Company to include persons designated by Tyco constituting the same
percentage of each such committee as Tyco's designees are of the Board of
Directors of the Company. The Company shall, upon request by Tyco, promptly
increase the size of the Board of Directors of the Company or exercise
reasonable best efforts to secure the resignations of such number of directors
as is necessary to enable Tyco's designees to be elected to the Board of
Directors of the Company in accordance with the terms of this section and to
cause Tyco's designees so to be elected; PROVIDED, HOWEVER, that, in the event
that Tyco's designees are appointed or elected to the Board of Directors of the
Company, until the Effective Time the Board of Directors of the Company shall
have at least two directors who are directors on the date of the Merger
Agreement and each of whom is neither an officer of the Company nor a designee,
shareholder, affiliate or associate (within the meaning of the federal
securities laws) of Tyco (such directors, the "Independent Directors"); PROVIDED
FURTHER, that if no Independent Directors remain, the other directors shall
designate one person to fill one of the vacancies who shall be neither an
officer of the Company nor a designee, shareholder, affiliate or associate of
Tyco, and such person shall be deemed to be an Independent Director for purposes
of the Merger Agreement. Notwithstanding anything in the Merger Agreement to the
contrary, prior to the Effective Time, the affirmative vote of a majority of the
Independent Directors shall be required to (i) amend or terminate the Merger
Agreement on behalf of the Company, (ii) exercise or waive any of the Company's
rights or remedies thereunder, (iii) extend the time for performance of Tyco's
obligations thereunder, (iv) take any other action by the Company in connection
with the Merger Agreement required to be taken by the Board of Directors of the
Company or (v) amend the Company's Certificate of Incorporation or the Company's
Bylaws, each as in effect on December 28, 1997.

STOCKHOLDERS' MEETING. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger, duly call, give
notice of, convene and hold a special meeting of its stockholders as promptly as
practicable following the consummation of the Offer for the purpose of voting
upon the Company Proposals. The Merger Agreement provides that the Company will,
if required by applicable law in order to consummate the Merger, prepare and
file with the Commission and, when cleared by the Commission, will mail to
stockholders, a proxy statement in connection with a meeting of the Company's
stockholders to vote upon the Company Proposals, or an information statement, as
appropriate, satisfying all requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act").

If Purchaser acquires at least a majority of the outstanding shares of
Common Stock, it will have sufficient voting power to approve the Merger, even
if no other stockholder votes in favor of the Merger.

The Merger Agreement provides that in the event that Tyco or the Purchaser
acquires at least 90% of outstanding shares of Common Stock, pursuant to the
Offer or otherwise, Tyco, the Purchaser and the Company will take all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of stockholders of the
Company, in accordance with Delaware law.

OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES. The Merger Agreement provides
that each of the Company and Tyco shall take all reasonable actions necessary to
provide that all then outstanding options to purchase Shares, whether or not
then exercisable or vested (i) under the Company's 1996 Stock Incentive Plan and
(ii) if and to the extent required by the terms of the Company Option Plans (as
hereinafter defined) other than the Company's 1996 Stock Incentive Plan, under
such other Company Option Plans, shall become fully exercisable and vested upon
the consummation of the Offer. Holders of options under the Company Option Plans
("Company Options") that become fully exercisable and vested upon the
consummation of the Offer in accordance with the provisions of the preceding
sentence will have a period of sixty days following the consummation of the
Offer to surrender their options to the Company in exchange for cash equal to
the excess of (A) the aggregate value of the Shares underlying the options,

based on the Per Share Amount, over (B) the aggregate exercise price for the
Shares underlying the options. Each of the Company and Tyco shall take all
reasonable actions necessary to provide that, upon consummation of the Merger,
all then outstanding Company Options, whether or not then exercisable or vested
if and to the extent so provided in the applicable Company Option Plan, shall be
converted into the right to receive, at the election of the holder, either (1)
in cash, the aggregate value of the Shares underlying the options, based on the
Per Share Amount, less the aggregate exercise price for the Shares underlying
the options, or (2) options, exercisable on the same terms and conditions as the
surrendered options (except that the option received in exchange shall be
immediately exercisable) to acquire that number of common shares, par value
$.20, of Tyco ("Tyco Shares") determined by multiplying, in the case of each
option, (a) the number of Shares for which the surrendered option was
exercisable immediately prior to the Effective Time by (b) a fraction, the
numerator of which is the Per Share Amount and the denominator of which is the
closing price per Tyco Share on the New York Stock Exchange on the trading day
immediately preceding the Closing Date. The exercise price per Tyco Share for
each new option issued pursuant to the foregoing clause (2) shall be an amount
equal to the aggregate exercise price for the Shares underlying the surrendered
option divided by the number of Tyco Shares for which such new option is
exercisable. "Company Option Plans" shall mean the Company's Amended and
Restated Senior Executives' Option Plan, the Company's 1992 Directors' Option
Plan and the Company's 1996 Stock Incentive Plan.

The Merger Agreement provides that each of the Company and Tyco shall take
all reasonable actions necessary so that the warrants expiring August 30, 2002
(except as otherwise provided therein) to purchase 166,666 shares of Company
Stock at a price of $9.75 per Share, subject to adjustment (the "Bank
Warrants"), shall be exercisable, from and after the Effective Time, for an
amount of cash equal in the aggregate to the Per Share Amount multiplied by the
number of Shares for which such warrants were exercisable immediately prior to
the Effective Time. Each of the Company and Tyco shall take all reasonable
actions necessary so that the warrants expiring August 13, 2002 to purchase
203,033 shares of Company Stock at a price of $10.16 per Share, subject to
adjustment, and the warrants expiring August 1 2004 to purchase 685,714 shares
of Company Stock at a price of $4.58 per Share, subject to adjustment
(collectively, the "Other Warrants" and, with the Bank Warrants, the "Company
Warrants"), shall be exercisable, from and after the Effective Time, at the
election of the holder as provided in the applicable Other Warrant, for either
(i) an amount of cash equal in the aggregate to the Per Share Amount multiplied
by the number of Shares for which such warrants were exercisable immediately
prior to the Effective Time or (ii) a number of Tyco Shares equal to the product
of (A) the number of Shares for which such warrants were exercisable immediately
prior to the Effective Time and (B) a fraction, the numerator of which is the
Per Share Amount and the denominator of which is the Current Market Price (as
defined in the applicable Other Warrant) of the Tyco Shares on the trading day
immediately preceding the Closing Date. The exercise price per Tyco Share under
each Other Warrant, as adjusted pursuant to the foregoing clause (ii), shall be
an amount equal to the aggregate exercise price for the Shares for which such
warrant was exercisable prior to such adjustment divided by the number of Tyco
Shares for which such warrant is exercisable as a result of such adjustment.
Notwithstanding the forgoing provisions, any holder exercising Company Warrants
for cash in accordance with the provisions of this paragraph shall not be
required to pay the exercise price thereof and instead may receive in the
aggregate upon exercise the difference between (A) the Per Share Amount
multiplied by the number of Shares for which such warrants were exercisable
immediately prior to the Effective Time and (B) the aggregate exercise price for
the Shares underlying such warrants.

The Merger Agreement provides that each of the Company and Tyco shall take
all reasonable actions necessary so that the Company's Subordinated Convertible
Debentures convertible into 24,810 shares of Company Stock, subject to
adjustment (the "Company Debentures"), shall be convertible, from and after the
Effective Time, into an amount of cash equal to the product of the number of
Shares into which such Company Debentures were convertible immediately prior to
the Effective Time multiplied by the Per Share Amount.

INTERIM OPERATIONS; COVENANTS. Pursuant to the Merger Agreement, the
Company has agreed that, except as expressly contemplated or provided by the
Merger Agreement or in the Company Disclosure Letter delivered by the Company to
Tyco and the Purchaser in connection with the Merger Agreement or agreed to in
writing by Tyco, after the date of execution of the Merger Agreement, and prior
to the Effective Time, (i) the Company shall conduct, and it shall cause the
Company Subsidiaries to conduct, its or their businesses in the ordinary course
and consistent with past practice, and the Company shall, and it shall cause the
Company Subsidiaries to, use its or their reasonable best efforts to preserve
substantially intact its business organization, to keep available the services
of its present officers and employees and to preserve the present commercial
relationships of the Company and the Company Subsidiaries with persons with whom
the Company or the Company Subsidiaries do significant business and (ii) without
limiting the generality of the foregoing, neither the Company nor any of the
Company Subsidiaries will:

(A) amend or propose to amend its Certificate of Incorporation or Bylaws in
any material respect;

(B) authorize for issuance, issue, grant, sell, pledge, dispose of or
propose to issue, grant, sell, pledge or dispose of any shares of, or any
options, warrants, commitments, subscriptions or rights of any kind to acquire
or sell any shares of, the capital stock or other securities of the Company or
any of the Company Subsidiaries, including, but not limited to, any securities
convertible into or exchangeable for shares of stock of any class of the Company
or any of the Company Subsidiaries, except for (a) the issuance of shares
pursuant to the exercise of Company Options outstanding on the date of the
Merger Agreement in accordance with their present terms, (b) the issuance of
shares upon the exercise of Company Warrants, or conversion of the Company
Debentures, outstanding on the date of the Merger Agreement in accordance with
their present terms and (c) the issuance of not more than an aggregate of 15,000
shares of Company Stock to the sellers under the agreements pursuant to which
the Company acquired certain businesses to the extent required pursuant to the
terms of such agreements;

(C) split, combine or reclassify any shares of its capital stock or declare,
pay or set aside any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock, other than
dividends or distributions to the Company or a subsidiary of the Company, or
directly or indirectly redeem, purchase or otherwise acquire or offer to acquire
any shares of its capital stock or other securities;

(D) create, incur or assume any indebtedness for borrowed money or issue any
debt securities, except pursuant to the Company's bank credit agreement, or make
any loans (except as provided in paragraph (E) (b) below);

(E) other than in the ordinary course of business consistent with past
practice, (a) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, indirectly, contingently or otherwise) for the
obligations of any person (other than the Company or a Company Subsidiary); (b)
make any capital expenditures (it being understood that the acquisition of the
stock or substantially all the assets of any other person shall not be deemed a
"capital expenditures" for these purposes) or make any advances or capital
contributions to, or investments in, any other person (other than to a Company
Subsidiary); (c) voluntarily incur any material liability or obligation
(absolute, accrued, contingent or otherwise); or (d) sell, transfer, mortgage,
pledge or otherwise dispose of, or encumber, or agree to sell, transfer,
mortgage, pledge or otherwise dispose of or encumber, any assets or properties,
real, personal or mixed, material to the Company and the Company Subsidiaries
taken as a whole other than to secure debt permitted under paragraph (D);

(F) increase in any manner the compensation of any of its officers or
employees (other than, except with respect to employees who are executive
officers or directors, in the ordinary course of business consistent with past
practice) or enter into, establish, amend or terminate any employment,
consulting, retention, change in control, collective bargaining, bonus or other
incentive compensation, profit sharing, health or other welfare, stock option or
other equity, pension, retirement, vacation, severance, deferred compensation or
other compensation or benefit plan, policy, agreement, trust, fund or
arrangement with,

for or in respect of, any stockholder, officer, director, employee, consultant
or affiliate other than, in any such case referred to above, as may be required
by Law or as required pursuant to the terms of agreements in effect on the date
of the Merger Agreement and other than arrangements with new employees (other
than employees who will be officers of the Company) hired in the ordinary course
of business consistent with past practice and providing for compensation (other
than equity-based compensation) and other benefits consistent with those
provided for similarly situated employees of the Company as of the date hereof;

(G) alter through merger, liquidation, reorganization, restructuring or in
any other fashion the corporate structure or ownership of any subsidiary or the
Company;

(H) except as may be required as a result of a change in law or as required
by the SEC, change any of the accounting principles or practices used by it;

(I) make any material tax election or settle or compromise any material
income tax liability;

(J) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business and consistent with past practice of liabilities reflected or
reserved against in, or contemplated by, the financial statements (or the notes
thereto) of the Company or incurred in the ordinary course of business
consistent with past practice;

(K) except to the extent necessary for the exercise of its fiduciary duties
by the Board of Directors of the Company as set forth in, and consistent with
the provisions of the Merger Agreement described below under "NO SOLICITATION,"
waive, amend or allow to lapse any term or condition of any confidentiality or
"standstill" agreement to which the Company or any subsidiary is a party; or

(L) take, or agree in writing or otherwise to take, any of the foregoing
actions or any action which would make any of the representations or warranties
of the Company contained in the Merger Agreement untrue or incorrect in any
material respect at or prior to the Effective Time.

NO SOLICITATION. The Merger Agreement provides that the Company shall, and
shall cause its officers, directors, employees, representatives and agents to,
immediately cease any discussions or negotiations with any parties that may be
ongoing with respect to a Company Takeover Proposal (as hereinafter defined).
The Company shall not, nor shall it permit any of its subsidiaries to, nor shall
it authorize or permit any of its officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries to, directly or
indirectly, (i) solicit, initiate or encourage (including by way of furnishing
information), or take any other action designed or reasonably likely to
facilitate, any inquiries or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any Company Takeover Proposal or (ii)
participate in any discussions or negotiations regarding any Company Takeover
Proposal; PROVIDED, HOWEVER, that if, at any time prior to the Effective Time,
the Board of Directors of the Company determines in good faith, with the advice
of outside counsel, that the failure to do so could reasonably be determined to
be a breach of its fiduciary duties to the Company's stockholders under
applicable law, the Company may (and may authorize or permit any of the other
persons referred to above in this paragraph to), in response to a Company
Takeover Proposal, and subject to compliance with the second succeeding
paragraph), (x) furnish information with respect to the Company or its
subsidiaries to any person pursuant to a confidentiality agreement similar in
form to that between an affiliate of Tyco and the Company and (y) participate in
discussions or negotiations regarding such Company Takeover Proposal. "Company
Takeover Proposal" means any inquiry, proposal or offer, in each case not
solicited in violation of the Merger Agreement, from any person or persons
relating to any direct or indirect acquisition or purchase of a substantial
amount of the assets of the Company and its subsidiaries or 10% or more of any
class of equity securities of the Company or any Company Subsidiary, any tender
offer or exchange offer that if consummated would result in any person or group
of related persons beneficially owning 10% or more of any class of equity
securities of the Company or any Company

Subsidiary or any merger, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any Company Subsidiary, other than the transactions contemplated by
the Merger Agreement.

Except as set forth in this section, neither the Board of Directors of the
Company nor any committee thereof shall (i) withdraw or modify, or indicate
publicly its intention to withdraw or modify, in a manner adverse to Tyco, the
approval or recommendation by such Board of Directors or such committee of the
Offer or the Company Proposals, (ii) approve or recommend, or indicate publicly
its intention to approve or recommend, any Company Takeover Proposal or (iii)
cause the Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, a "Company Acquisition
Agreement") related to any Company Takeover Proposal. Notwithstanding the
foregoing, in the event that prior to the Effective Time the Board of Directors
of the Company determines in good faith, with the advice of outside counsel,
that the failure to do so could reasonably be determined to be a breach of its
fiduciary duties to the Company's stockholders under applicable law, the Board
of Directors of the Company may (subject to this and the following sentences)
(x) withdraw or modify its approval or recommendation of the Offer or the
Company Proposals or (y) approve or recommend a Company Superior Proposal (as
hereinafter defined) or terminate the Merger Agreement (and concurrently with or
after such termination, if it so chooses, cause the Company to enter into any
Company Acquisition Agreement with respect to any Company Superior Proposal),
but in each of the cases set forth in this clause (y), only at a time that is
after the third business day following Tyco's receipt of written notice advising
Tyco that the Board of Directors of the Company has received a Company Superior
Proposal and, in the case of any previously received Company Superior Proposal
that has been materially modified or amended, such modification or amendment and
specifying the material terms and conditions of such Company Superior Proposal,
modification or amendment (PROVIDED that such material terms shall not be deemed
to include the identity of the person or persons making such Company Superior
Proposal). A "Company Superior Proposal" means any bona fide proposal, not
solicited in violation of the Merger Agreement, made by a third party or third
parties to acquire, directly or indirectly, for consideration consisting of cash
and/or securities, more than 50% of the combined voting power of the Shares then
outstanding or all or substantially all the assets of the Company and otherwise
on terms which the Board of Directors of the Company determines in its good
faith judgment (based on the advice of its advisors) to be more favorable to the
Company's stockholders than the Offer and the Merger (taking into account all
factors relating to such proposed transaction deemed relevant by the Board of
Directors of the Company, including, without limitation, the financing thereof,
the proposed timing thereof and all other conditions thereto).

In addition to the obligations of the Company set forth in the two preceding
paragraphs, the Company shall promptly advise Tyco orally and in writing of any
request for information, or for access to information, or of any Company
Takeover Proposal and the material terms and conditions of such request or
Company Takeover Proposal or any amendment or modification thereto (PROVIDED
that such material terms shall not be deemed to include the identity of the
person or persons making such request or Company Takeover Proposal).

Nothing in the foregoing provisions shall prohibit the Company from taking
and disclosing to its stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders if, in the good faith judgment of the Board of Directors
of the Company, with the advice of outside counsel, failure so to disclose could
be determined to be a breach of its fiduciary duties to the Company's
stockholders under applicable law; PROVIDED, HOWEVER, that neither the Company
nor its Board of Directors nor any committee thereof shall, except as permitted
by the second preceding paragraph, withdraw or modify, or indicate publicly its
intention to withdraw or modify, its position with respect to the Offer or the
Company Proposals or approve or recommend, or indicate publicly its intention to
approve or recommend, a Company Takeover Proposal.

INDEMNIFICATION AND INSURANCE. From and after the Effective Time, the
Surviving Corporation shall indemnify and hold harmless all past and present
officers and directors (the "Indemnified Parties") of the Company and of its
subsidiaries to the full extent such persons may be indemnified by the Company
pursuant to Delaware law, the Company's Certificate of Incorporation and Bylaws,
as each is in effect on the date of the Merger Agreement, for acts and omissions
(x) arising out of or pertaining to the transactions contemplated by the Merger
Agreement or arising out of the Offer Documents or (y) otherwise with respect to
any acts or omissions occurring or arising at or prior to the Effective Time and
shall advance reasonable litigation expenses incurred by such persons in
connection with defending any action arising out of such acts or omissions,
PROVIDED that such persons provide the requisite affirmations and undertaking,
as set forth in applicable provisions of the Delaware Code.

In addition, Tyco will provide, or cause the Surviving Corporation to
provide, for a period of not less than six years after the Effective Time, the
Company's current directors and officers an insurance and indemnification policy
that provides coverage for events occurring or arising at or prior to the
Effecting Time (the "D&O Insurance") that is no less favorable than the existing
policy or, if substantially equivalent insurance coverage is unavailable, the
best available coverage; PROVIDED, HOWEVER, that Tyco and the Surviving
Corporation shall not be required to pay an annual premium for the D&O Insurance
in excess of 300% of the annual premium currently paid by the Company for such
insurance, but in such case shall purchase as much such coverage as possible for
such amount.

The Merger Agreement provides that the foregoing provisions are intended to
benefit the Indemnified Parties and shall be binding on all successors and
assigns of Tyco, Purchaser, the Company and the Surviving Corporation. In the
Merger Agreement, Tyco has agreed to guarantee the performance by the Surviving
Corporation of the indemnified obligations set forth therein, which guaranty is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the bankruptcy or insolvency of the Surviving Corporation
or any other person. The Indemnified Parties shall be intended third-party
beneficiaries of the foregoing provisions on indemnification and insurance.

REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Tyco and the
Purchaser with respect to, among other things, its organization, capitalization,
authority relative to the Merger, financial statements, public filings, conduct
of business, employee benefit plans, intellectual property, employment matters,
compliance with laws, tax matters, litigation, environmental matters, material
contracts, brokers' fees, real property, insurance, undisclosed liabilities,
information in the Proxy Statement and the absence of any Material Adverse
Effect on the Company since December 31, 1996, except as disclosed.

TERMINATION; FEES. The Merger Agreement provides that it may be terminated
at any time prior to the Effective Time, whether before or after approval of the
stockholders of the Company described therein:

(a) by mutual written consent of Tyco and the Company;

(b) by either Tyco or the Company if any governmental authority shall
have issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the consummation of the
transactions contemplated by the Merger Agreement and such order, decree or
ruling or other action shall have become final and nonappealable;

(i) the Company shall have breached or failed to perform in any
material respect any of its covenants or other agreements contained in
the Merger Agreement, which breach or failure to perform is incapable of
being cured or has not been cured within five days after the giving of
written notice thereof to the Company (but not later than the expiration
of the 20 business day period for which the Offer will be initially
open);

(ii) any representation or warranty of the Company shall not have been
true and correct in all material respects when made;

(iii) any representation or warranty of the Company shall cease to be
true and correct in all material respects at any later date as if made on
such date (other than representations and warranties made as of a specified
date) other than as a result of a breach or failure to perform by the
Company of any of its covenants or agreements under the Merger Agreement;

PROVIDED, that the right to terminate the Merger Agreement pursuant to the
provisions described in this clause (c) shall not be available to Tyco if
Purchaser or any other affiliate of Tyco shall acquire shares of Common Stock
pursuant to the Offer;

(d) by Tyco if (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Tyco its
approval or recommendation of the Offer or any of the Company Proposals or
shall have approved or recommended any Company Takeover Proposal or (ii) the
Board of Directors of the Company or any committee thereof shall have
resolved to take any of the foregoing actions;

(e) by either Tyco or the Company if the Offer shall have expired or been
terminated without any Shares being purchased thereunder by Purchaser as a
result of a failure of any of the conditions thereto set forth in the Merger
Agreement;

(f) by either the Company or Tyco if either (x) as the result of the
failure of the Minimum Condition or any of the other conditions thereto set
forth in the Merger Agreement, the Offer shall have terminated or expired in
accordance with its terms without Purchaser having purchased any Shares
pursuant to the Offer or (y) the Offer shall not have been consummated on or
before March 31, 1998, PROVIDED that the right to terminate this Agreement
pursuant to the provisions described in this clause (f) shall not be
available to any party whose failure to perform any of its obligations under
the Merger Agreement results in the failure of the Offer to be consummated
by such time;

(g) by the Company if Tyco or Purchaser shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in the Merger Agreement, which
breach or failure to perform is incapable of being cured or has not been
cured within 5 days after the giving of written notice thereof to Tyco; or

(h) by the Company in accordance with the provisions of the Merger
Agreement described above under "NO SOLICITATION"; PROVIDED that the right
to terminate the Merger Agreement pursuant to the provisions described in
this clause (h) shall not be available (x) if the Company has breached in
any material respect its obligations under the provisions described above
under "NO SOLICITATION", or (y) if the Company shall fail to pay when due
the fees and expenses provided for in the Merger Agreement.

The Company agrees that if the Merger Agreement is terminated pursuant
to

(i) the provisions described in clause (d) above;

(ii) the provisions described in clause (h) above; or

(iii) the provisions described in clause (f) above, and, with respect to
this clause (iii), at the time of such termination any person, entity or
group (as defined in Section 13(d)(3) of the Exchange Act) (other than Tyco
or any of its affiliates or any person identified in the Company's Proxy
Statement dated April 30, 1997 and who has executed a Stockholder Agreement
with Tyco and Purchaser, PROVIDED that such person has not breached the
terms of such Stockholder Agreement) shall have become the beneficial owner
of more than 20% of the outstanding shares of Company Stock and such person,
entity or group (or any affiliate of such person, entity or group)
thereafter (x) shall make a Company Takeover Proposal and, in the case of a
consensual transaction with the Company, shall substantially have negotiated
the terms thereof, at any time on or prior to the date which is six months

after such termination of the Merger Agreement, and (y) shall consummate
such Company Takeover Proposal at any time on or prior to the date which is
one year after termination of the Merger Agreement, in the case of a
consensual transaction, or six months after termination of the Merger
Agreement, in the case of a non-consensual transaction, in each case with a
value per share of Company Stock of at least $17.00 (with appropriate
adjustments for reclassifications of capital stock, stock dividends, stock
splits, reverse stock splits and similar events);

then the Company shall pay to Tyco the sum of (a) $3.5 million, as promptly as
practicable but in no event later than two business days following termination
of the Merger Agreement pursuant to the provisions described in clause (d) or
(h) above, or, in the case of clause (iii) of this paragraph, upon consummation
of such Company Takeover Proposal.

The Company further agrees that if the Merger Agreement is terminated
pursuant to the provisions described in clause (c)(i) above,

(A) the Company will pay to Tyco, as promptly as practicable but in no
event later than two business days following termination of the Merger
Agreement, the amount of all documented and reasonable costs and expenses
incurred by Tyco, Purchaser and their affiliates (including but not limited
to fees and expenses of counsel and accountants and out-of-pocket expenses
(but not fees) of financial advisors) in an aggregate amount not to exceed
$350,000 in connection with the Merger Agreement or the transactions
contemplated hereby ("Tyco Expenses"); and

(B) in the event that the Company consummates a Company Takeover
Proposal (whether or not solicited in violation of the Merger Agreement)
within one year from the date of termination of the Merger Agreement, the
sum of $3.5 million, less the amount of any payment made pursuant to the
preceding clause (i), which payment shall be made not later than two
business days following consummation of such Company Takeover Proposal.

The Company further agrees that if the Merger Agreement is terminated
pursuant to the provisions described in clause (c)(ii) above, the Company will
pay to Tyco, as promptly as practicable but in no event later than two business
days following termination of the Merger Agreement, the Tyco Expenses.

GUARANTEE. Tyco has guaranteed the payment by Purchaser of the Per Share
Amount and any other amounts payable by Purchaser pursuant to the Merger
Agreement and has agreed to cause Purchaser to perform all of its other
obligations under the Merger Agreement in accordance with its terms.

In connection with the execution and delivery of the Merger Agreement, HP
Partners L.P. ("HP"), which, to the knowledge of the Company, owns 1,515,816
shares of Common Stock (as well as warrants to acquire 685,714 Shares), entered
into a Stockholder Agreement with Tyco, Purchaser and the Company, pursuant to
which HP has agreed to tender its shares of Common Stock in the Offer and has
granted to Tyco a proxy, effective for as long as the Stockholder Agreement has
not terminated, to vote such shares, at any meeting or other proceeding of
stockholders of the Company, in opposition to any proposal by a third party
involving a merger, sale of assets or similar transaction with the Company. The
Stockholder Agreement will remain in effect for as long as the Merger Agreement
has not been terminated in accordance with its terms.

The foregoing is a summary of certain provisions of the Stockholder
Agreement and is qualified in its entirety by reference to the Stockholder
Agreement, a copy of which has been filed with the Commission as Exhibit 3 to
this Statement.

ITEM 4. THE SOLICITATION OR RECOMMENDATION.

(A) RECOMMENDATION OF BOARD OF DIRECTORS; BACKGROUND

In early September 1997, George V. Flagg, President and Chief Executive
Officer of the Company, contacted the Company's financial advisor, J.P. Morgan
Securities Inc. ("J.P. Morgan"), to discuss potential strategic alternatives for
the Company. At that time, Mr. Flagg requested that J.P. Morgan prepare a
presentation for the Board of Directors of the Company outlining potential
strategic alternatives for the Company.

On September 25, 1997, representatives of J.P. Morgan made a presentation to
the Board of Directors of the Company concerning possible strategic directions
the Company could take relative to maximizing shareholder value, including,
among others, the possible sale or merger of the Company. After representatives
of J.P. Morgan were excused from the meeting, the Board of Directors unanimously
voted to engage J.P. Morgan to explore a possible sale of the Company or other
alternatives and to advise the Board of Directors in connection with such
matters. On October 1, 1997, the Company entered into an agreement with J.P.
Morgan pursuant to which J.P. Morgan was engaged to explore strategic
alternatives for the Company.

At the request of the Company, J.P. Morgan began contacting prospective
purchasers in early October, based upon a list of parties developed by J.P.
Morgan in consultation with the Company. On October 14, 1997, Tyco and J.P.
Morgan, solely as the Company's representative, executed a confidentiality
agreement.

Beginning in early October, the Company and representatives of J.P. Morgan
received a number of inquiries from third parties concerning the Company. A
number of these parties executed confidentiality agreements and received
descriptive memoranda regarding the Company. On November 3, 1997, in response to
the initial contacts, J.P. Morgan received a letter from a party containing a
non-binding indication of interest to purchase for cash the assets and assume
certain liabilities of the Company for an equivalent per Share amount that was
less than the $17.00 per Share amount to be paid in the Offer and the Merger. A
representative of J.P. Morgan called a representative of the party to inform the
party that because its offer reflected an inadequate value for the Company, the
Company would not be able to engage in further discussions unless the party
improved its proposal.

On November 3, 1997, Tyco submitted a non-binding indication of interest to
purchase all of the outstanding shares of Common Stock for between $17.50 and
$19.50 per share for cash. Based on its preliminary indication of interest, Tyco
was invited to attend a presentation by the Company's management and review data
room contents on November 13 and November 14, 1997.

On November 12, 1997, the Company reported a net loss of $1,517,000 ($0.24
per share) for the third quarter ended September 30, 1997, compared to a net
loss of $712,000 ($0.15 per share) for the 1996 third quarter. (Such net loss
amount for the quarter ended September 30, 1997 does not reflect the restatement
of the Company's financial statements referred to below.) Concurrent with the
earnings release, the Company announced that it was not in compliance with
certain of the financial covenants of its bank credit agreement, but that the
banks had waived such non-compliance for the periods prior to or ending on
October 31, 1997. In addition, a public announcement was made by the Company
that the Company had retained J.P. Morgan to help it explore strategic
alternatives as part of its overall business review aimed at maximizing
shareholder value, including the possible sale or merger of the Company.

On November 21, 1997, Tyco submitted a written non-binding proposal for the
acquisition of the Company at $19.625 per share in cash, subject to customary
break-up fees, an exclusive period until November 26, at 6:00 p.m. EST and a
lock-up of certain "inside" shareholders. After discussions among
representatives of J.P. Morgan, the Company's Chairman, William P. Lyons, and
its President and Chief Executive Officer, George V. Flagg, the Company
determined to enter into negotiations with Tyco and Tyco was furnished with a
draft agreement and plan of merger on November 21, 1997.

In response to a pending registration statement filed by the Company with
the SEC, the Company received a letter from the Staff of the Division of
Corporation Finance of the SEC (the "SEC Staff") on November 24, 1997 requesting
the Company to restate its financial statements with respect to the recognition
of certain revenues realized in connection with the installation of security
systems for customers, consistent with the method used by the Company prior to
an accounting change adopted in 1995. The SEC Staff also requested that the
Company depreciate its Company-owned equipment installed at its customers'
premises over the life of the related security services contract, and not over
an average estimated life, and write off the undepreciated capitalized costs of
such equipment at the time any such contract is terminated.

On November 26, 1997, the Board of Directors of the Company held a
telephonic meeting to consider Tyco's proposal. All of the Company's directors
participated in the meeting. At the meeting, the Board of Directors of the
Company reviewed Tyco's proposal and a draft of the merger agreement with the
Company's executive officers, outside legal counsel and representatives of J.P.
Morgan. The Board of Directors of the Company heard presentations by its outside
legal counsel with respect to the terms of the proposal and a draft of the
merger agreement and by representatives of J.P. Morgan with respect to the
financial terms of the proposal. The Board of Directors unanimously approved
proceeding with negotiations for a transaction with Tyco. Later that same day
Tyco informed J.P. Morgan that it was unable to proceed with its acquisition
proposal until Tyco had had an opportunity to review the Company's October
operating results and until the Company had resolved the comments of the SEC
Staff. On December 1, 1997, representatives of Tyco met with management of the
Company to discuss the letter from the SEC Staff and the Company's results of
operations for October, which were below certain projections that had been
furnished to Tyco. During the period through December 18, 1997, Tyco and the
Company continued discussions concerning matters related to the acquisition
proposal.

Following receipt of the letter from the SEC Staff, the Company and its
legal and financial advisors had discussions with the SEC Staff relating to the
issues raised in the letter. On December 16, 1997, the Company filed a Form 8-K
with the SEC stating that the Company did not expect to be in compliance with
the financial covenants in its bank credit agreement for November and December
1997. The Company also stated that it did not have any remaining loan
availability under the credit agreement and provided information with regard to
certain contingencies.

On or about December 17, 1997, the SEC Staff notified the Company that it
would accept the Company's proposal relative to the restatement of the Company's
financial statements with respect to the recognition of installation revenues
and to commission a study regarding the Company's policy of utilizing an average
12-year life in its composite depreciation method for equipment installed at
customers' premises. On December 18, 1997, representatives of J.P. Morgan called
representatives of Tyco to convey this information. On December 19, 1997,
representatives of the Company, its outside legal counsel and J.P. Morgan
provided additional information to Tyco regarding the SEC matters.

Following the Company's resolution of these matters with the SEC Staff, Tyco
contacted J.P. Morgan on December 19, 1997 and indicated a willingness to
acquire all of the outstanding shares of the Company for $16.00 per share in
cash. After further discussions with J.P. Morgan and the Company, Tyco indicated
a willingness to increase its offer to $17.00 per share in cash on December 23,
1997 and to reduce the amount of the proposed termination fee payable by the
Company in the event that the Company should, in accordance with the provisions
of the Merger Agreement, enter into a transaction with a third party that would
offer the Company's stockholders greater value than the Offer and the Merger.

On December 23, 1997, the Board of Directors of the Company held a
telephonic meeting to discuss Tyco's revised proposal and the status of
negotiations. All but one of the Board members participated in the meeting. At
the meeting, the Board of Directors reviewed the proposal with the Company's
executive officers and representatives of J.P. Morgan. While no formal action
was taken, members of the Board

indicated that they would support the proposal subject to substantial conclusion
of negotiations for the Merger Agreement.

On December 26, 1997, the Board of Directors of the Company held a
telephonic meeting to consider the Offer, the Merger and the Merger Agreement.
All but one of the Board members participated in the meeting. At the meeting,
the Board of Directors of the Company reviewed the Offer, the Merger and the
Merger Agreement with the Company's executive officers, the Company's outside
legal counsel and representatives of J.P. Morgan. The Board of Directors of the
Company heard presentations by its outside legal counsel with respect to the
terms of the proposed offer, the Merger and the Merger Agreement, and outside
legal counsel advised the Board that negotiations for the Merger Agreement were
substantially complete. The Board of Directors also heard a presentation by
representatives of J.P. Morgan with respect to the financial terms of the
proposed Offer and the Merger. The Board of Directors, with the participation of
the representatives of J.P. Morgan, reviewed again the alternatives for the
Company discussed during the Board's September meeting.

At the conclusion of its presentation, representatives of J.P. Morgan
delivered the oral opinion of J.P. Morgan to the Board of Directors of the
Company (subsequently confirmed in writing) that, as of such date, the
consideration proposed to be paid to the stockholders of the Company pursuant to
the Merger Agreement in the Offer and the Merger was fair, from a financial
point of view, to such holders.

Based upon such discussions, presentations and opinion, the Board of
Directors, by the unanimous vote of all directors present, (i) approved the
Offer and the Merger and the execution of the Merger Agreement substantially in
the form presented to it and (ii) determined to recommend that the Company's
stockholders accept the Offer and tender their Shares and approve the Merger and
the Merger Agreement.

Counsel for Tyco and the Company conducted additional negotiations
concerning the Merger Agreement on December 26 prior to the Company's Board
meeting and completed final negotiations on the document on December 28, 1997.
The Merger Agreement and the Stockholder Agreement were executed by the
respective parties on December 28, 1997. A joint press release announcing the
execution of the Merger Agreement was released by the parties prior to the
opening of the financial markets on December 29, 1997.

(B) REASONS FOR RECOMMENDATIONS OF BOARD OF DIRECTORS

In reaching its conclusions and recommendations described above, the Board
of Directors considered a number of factors, including the following:

(i) The Company's business, financial condition, results of operations,
assets, liabilities, business strategy and prospects, as well as various
uncertainties associated with those prospects. In particular, the Board of
Directors considered the financial condition of the Company, including the
significant working capital constraints affecting the Company, the Company's
need for additional financing and its recent defaults and prospective
defaults under its bank credit agreement.

(ii) The Company's existing competition in the industry in which it
operates and future competition in its major service/product lines, the
relative size of the other participants in the industry in which it operates
and the available capital and resources of such other participants as
compared to the available capital and resources of the Company.

(iii) The oral opinion (subsequently confirmed in writing) of J.P.
Morgan, the Company's financial advisor, that, as of the date thereof and
based upon and subject to various considerations and assumptions set forth
therein, the consideration to be paid to the Company's stockholders pursuant
to the Merger Agreement in the Offer and the Merger is fair, from a
financial point of view, to such stockholders. A copy of the opinion
rendered by J.P. Morgan to the Company's Board of Directors, setting forth
the procedures followed, the matters considered, the scope of the review
undertaken and

the assumptions made by J.P. Morgan in arriving at its opinion, is attached
hereto as Schedule I and is incorporated herein by reference. Stockholders
are urged to read such opinion in its entirety.

(iv) The financial analysis performed by J.P. Morgan, which indicated,
among other things, that based upon a discounted cash flow analysis of the
projections prepared by management of the Company, a comparable company
analysis and a comparable acquisition analysis, the Offer and the Merger
would be reasonably likely to provide the Company's stockholders with value
superior to alternative strategies, including maintenance of the Company as
a stand-alone entity.

(v) The number and quality of the indications of interest received by
the Company and J.P. Morgan since the Company retained J.P. Morgan to assist
it in exploring strategic alternatives to maximize shareholder value,
including the potential sale or merger of the Company.

(vi) The historical and current market prices of the Company's Common
Stock.

(vii) The fact that the Offer would not be subject to a financing
condition.

(viii) The alternatives to the Offer and the Merger available to the
Company, including, without limitation, continuing to maintain the Company
as an independent company.

(ix) The fact that the Offer and Merger is a stock transaction with cash
consideration, thus eliminating corporate taxation that would be triggered
in an asset sale and any uncertainties in valuing the consideration to be
received by the Company's stockholders.

(x) The financial and other terms and conditions of the Offer, the
Merger and the Merger Agreement, including, without limitation, the facts
that the terms of the Merger Agreement will not prevent other third parties
from making certain bona fide proposals subsequent to execution of the
Merger Agreement, will not prevent the Board of Directors from determining,
in the exercise of its fiduciary duties in accordance with the Merger
Agreement, to provide information to and engage in negotiations with such
third parties and will permit the Company, subject to the non-solicitation
provisions and the payment of the termination fee discussed above, to enter
into a transaction with a third party that would be more favorable to the
Company's stockholders than the Offer and the Merger.

(xi) The structure of the transaction, which is designed, among other
things, to result in receipt by the holders of Shares at the earliest
practicable time of the consideration to be paid in the Offer and the fact
that the consideration to be paid in the Offer and the Merger is the same.

(xii) The likelihood that the Offer and the Merger would be consummated.

The foregoing discussion of the information and factors considered and given
weight by the Board of Directors is not intended to be exhaustive. In view of
the variety of factors considered in connection with its evaluation of the Offer
and the Merger, the Board of Directors did not find it practicable to, and did
not, quantify or otherwise assign relative weights to, the specific factors
considered in reaching its determination. In addition, individual members of the
Board of Directors may have given different weights to different factors.

ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.

In October 1997, the Company retained J.P. Morgan to render financial
advisory services and assist the Company with respect to its consideration of
financial alternatives for the Company, including a possible sale of the
Company. Pursuant to its engagement letter with J.P. Morgan, the Company paid
J.P. Morgan an initial fee of $150,000 and has agreed to pay J.P. Morgan (a) a
fee, described below, upon consummation of a sale of the Company or other
transaction and (b) in the event that neither such fee nor the alternate
transaction fee, described below, are payable within nine months of the
initiation date of the engagement, a fee of $100,000.

The fee referred to in clause (a) above would be in an amount equal to (i)
0.75% of the portion of the value of the transaction up to $150 million, plus
(ii) 1.00% of the portion of the transaction value in excess of $150 million but
less than or equal to $180 million plus (iii) 1.25% of the portion of the
transaction value in excess of $180 million; provided that the initial fee of
$150,000 and the $100,000 fee referred to in clause (b) above (to the extent
paid) would be deducted from the fee referred to in clause (a).

The alternate transaction fee referred to in clause (b) above would be
$500,000, payable upon the occurrence, with the consent of the Company, of any
of the following events: another person acquires from the Company (x) Common
Stock representing 20% or more but less than a majority of the Common Stock
calculated on a fully-diluted basis or (y) assets of the Company representing
20% or more but less than a majority of the Company's book value.

The Company has also agreed to reimburse J.P. Morgan's reasonable expenses,
including the fees and disbursements of its counsel, and to indemnify and defend
J.P. Morgan and certain related persons against certain liabilities in
connection with the engagement.

Except as disclosed herein, neither the Company nor any person acting on its
behalf currently intends to employ, retain or compensate any other person to
make solicitations or recommendations to security holders on its behalf
concerning the Offer or the Merger.

ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.

(a) No transactions in Shares have been effected during the past 60 days by
the Company or, to the best of the Company's knowledge, by any executive
officer, director, subsidiary or affiliate of the Company.

(b) To the best of the Company's knowledge, each executive officer, director
and affiliate of the Company currently intends to tender to Purchaser all Shares
over which such person has sole dispositive power as of the expiration date of
the Offer.

ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.

(a) Except as set forth above or in Item 3(b) or (c) or 4(a) above, no
negotiation is being undertaken or is underway by the Company in response to the
Offer which relates to or would result in: (1) an extraordinary transaction such
as a merger or reorganization involving the Company; (2) a purchase, sale or
transfer of a material amount of assets by the Company; (3) a tender offer for
or other acquisition of securities by or of the Company; or (4) any material
change in the present capitalization or dividend policy of the Company.

(b) Except as described above or in Item 3(b) or (c) or 4(a) above, there
are no transactions, Board of Directors resolutions, agreements in principle or
signed contracts in response to the Offer that relate to or would result in one
or more of the events referred to in Item 7(a) above.

ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.

(a) The Information Statement attached as Schedule II hereto is being
furnished in connection with the possible designation by Tyco, pursuant to the
Merger Agreement, of certain persons to be appointed to the Board of Directors
other than at a meeting of the Company's stockholders, as described in Item 3(b)
above.

(b) SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW

As a Delaware corporation, the Company is subject to Section 203 ("Section
203") of the Delaware General Corporation Law. Under Section 203, certain
"business combinations" between a Delaware corporation whose stock is publicly
traded or held of record by more than 2,000 stockholders and an

"interested stockholder" are prohibited for a three-year period following the
date that such a stockholder became an interested stockholder, unless (i) the
corporation has elected in its original certificate of incorporation not to be
governed by Section 203 (the Company did not make such an election), (ii) the
transaction in which the stockholder became an interested stockholder or the
business combination was approved by the board of directors of the corporation
before the other party to the business combination became an interested
stockholder, (iii) upon consummation of the transaction that made it an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the commencement of the
transaction (excluding voting stock owned by directors who are also officers or
held in employee benefit plans in which the employees do not have a confidential
right to tender or vote stock held by the plan) or (iv) the business combination
was approved by the board of directors of the corporation and ratified by 66
2/3% of the voting stock which the interested stockholder did not own. The term
"business combination" is defined generally to include mergers or consolidations
between a Delaware corporation and an "interested stockholder," transactions
with an "interested stockholder" involving the assets or stock of the
corporation or its majority-owned subsidiaries and transactions which increase
an "interested stockholder's" percentage ownership of stock. The term
"interested stockholder" is defined generally as a stockholder who, together
with affiliates and associates, owns (or, within three years prior, did own) 15%
or more of a Delaware corporation's voting stock.

In accordance with the Merger Agreement and Section 203, the Company's Board
of Directors approved the Offer and the Merger and, therefore, the restrictions
of Section 203 are inapplicable to the Offer and the Merger.

ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.

Exhibit 1 Excerpts from the Company's Proxy Statement for its 1997 Annual Meeting of
Stockholders held on May 22, 1997.
Exhibit 2 Agreement and Plan of Merger, dated as of December 28, 1997, among Holmes
Protection Group, Inc., Tyco International Ltd. and T9 Acquisition Corp..
Exhibit 3 Stockholder Agreement, dated as of December 28, 1997, among Tyco International
Ltd., T9 Acquisition Corp., HP Partners LP and Holmes Protection Group, Inc.
Exhibit 4 Letter to Stockholders of the Company, dated January 6, 1998.*
Exhibit 5 Joint Press Release of Holmes Protection Group, Inc. and Tyco International Ltd.,
dated December 29, 1997.
Exhibit 6 Opinion of J.P. Morgan Securities Inc.*

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

* Included in copies mailed to stockholders

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

HOLMES PROTECTION GROUP, INC.

Dated: January 6, 1998 By: /s/ GEORGE V. FLAGG
-----------------------------------------
Name: George V. Flagg
Title: President and Chief Executive
Officer

SCHEDULE I
[Letterhead of J.P. Morgan Securities Inc.]
[LOGO]
December 26, 1997

The Board of Directors
Holmes Protection Group, Inc.
440 Ninth Avenue
New York, NY 10001

Attention: William P. Lyons
Chairman

Gentlemen:

You have requested our opinion as to the fairness, from a financial point
of view, to the stockholders of Holmes Protection Group, Inc. (the
"Company) of the consideration proposed to be paid to such stockholders
in connection with the proposed Tender Offer (as hereinafter defined) and
subsequent merger (the "Merger") of the Company with T9 Acquisition Corp.
(the "Sub"), a wholly owned subsidiary of Tyco International Ltd. (the
"Buyer"). We understand that pursuant to an Agreement and Plan of Merger
(the "Agreement") to be entered into among the Company, the Buyer and the
Sub, the Sub will commence a tender offer (the "Tender Offer") for all of
the outstanding shares of the common stock of the Company, par value $.01
per share (the "Shares"), at a price of $17.00 per Share, net to the
seller in cash, to be followed by the Merger of the Company with the Sub
pursuant to which the Company will become a wholly owned subsidiary of
the Buyer and each outstanding Share (other than Shares owned by the
Buyer, the Sub or any direct or indirect wholly owned subsidiaries of the
Buyer, or any of the Company's direct or indirect wholly owned
subsidiaries, Shares held in the treasury of the Company or Shares as to
which dissenter's rights are perfected) will be converted into the right
to receive $17.00 in cash.

In arriving at our opinion, we have reviewed (i) a draft of the
Agreement; (ii) certain publicly available information concerning the
Company and of certain other companies engaged in businesses comparable
to those of the Company, and the reported market prices for certain other
companies' securities deemed comparable; (iii) publicly available terms
of certain transactions involving companies comparable to the Company and
the consideration received for such companies; (iv) current and
historical market prices of the Shares of the Company; (v) the financial
statements of the Company for the fiscal year ended December 31, 1996,
the financial statements of the Company for the period ended September
30, 1997, the draft Form 10-K/A of the Company for the fiscal year ended
December 31, 1996 and the draft Form 10-Q/A of the Company for each of
the quarterly periods ended September 30, 1997, June 30, 1997, and March
31, 1997 which drafts, among other things, included the restatement of
the Company's financial statements; (vi) certain agreements with respect
to outstanding indebtedness or obligations of the Company; (vii) certain
internal financial analyses and forecasts prepared by management of the
Company; and (viii) the terms of other business combinations that we
deemed relevant.

[LOGO]

In addition, we have held discussions with certain members of the senior
management of the Company with respect to certain aspects of the proposed
Tender Offer and Merger, the past and current business operations of the
Company, the financial condition and future prospects and operations of
the Company, and certain other matters we believed necessary or
appropriate to our inquiry. We have reviewed such other financial studies
and analyses and considered such other information as we deemed
appropriate for the purposes of this opinion.

In addition, we note that a public announcement was made by the Company
on November 12, 1997 that the Company had retained J.P. Morgan & Co. to
assist the Company in exploring strategic alternatives as part of an
overall review of its business strategy aimed at maximizing shareholder
value, including the possible sale or merger of the Company.

In giving our opinion, we have relied upon and assumed, without
independent verification, the accuracy and completeness of all
information that was publicly available or was furnished to us by the
Company or otherwise reviewed by us, and we have not assumed any
responsibility or liability therefor. We have not conducted any valuation
or appraisal of any assets or liabilities of the Company, nor have any
such valuations or appraisals been provided to us. In relying on
financial analyses and forecasts provided to us, we have assumed that
they have been reasonably prepared based on assumptions reflecting the
best currently available estimates and judgments by the Company's senior
management as to the expected future results of operations and financial
condition of the Company. We have also assumed that the Tender Offer, the
Merger and the other transactions contemplated by the Agreement will be
consummated as provided in the Agreement. We have relied as to all legal
matters relevant to rendering our opinion upon the advice of counsel.

Our opinion is necessarily based on economic, market and other conditions
as in effect on, and the information made available to us as of, the date
hereof. It should be understood that subsequent developments may affect
this opinion and that we do not have any obligation to update, revise, or
reaffirm this opinion.

We have acted as financial advisor to the Company with respect to the
proposed Tender Offer and Merger and will receive a fee from the Company
for our services. We will also receive an additional fee if the proposed
Tender Offer is consummated. Our affiliate, Morgan Guaranty Trust Company
of New York, acts as agent bank for the Buyer on a revolving credit
facility and we have acted as lead and co-lead manager for the Buyer on
several debt offerings and an equity offering, respectively. In the
ordinary course of their businesses, our affiliates may actively trade
the debt and equity securities of the Company or the Buyer for their own
account or for the accounts of customers and, accordingly, they may at
any time hold long or short positions in such securities.

On the basis of and subject to the foregoing, it is our opinion as of the
date hereof that the consideration to be paid to the holders of Shares
pursuant to the Merger Agreement in the proposed Tender Offer and Merger
is fair, from a financial point of view, to such holders.

[LOGO]

This letter is provided to the Board of Directors of the Company in
connection with and for the purposes of its evaluation of the Merger.
This opinion does not constitute a recommendation to any stockholder of
the Company as to whether or not such stockholder should tender Shares
pursuant to the Tender Offer or how such stockholder should vote with
respect to the Merger. This opinion may not be disclosed, referred to, or
communicated (in whole or in part) to any third party for any purpose
whatsoever except with our prior written consent in each instance. This
opinion may be reproduced in full in any proxy or information statement
or Solicitation/ Recommendation Statement on Schedule 14D-9 mailed to
stockholders of the Company but may not otherwise be disclosed publicly
in any manner without our prior written approval and must be treated as
confidential.

Very truly yours,

J.P. MORGAN SECURITIES INC.

By: /s/ NICHOLAS B. PAUMGARTEN
-----------------------------------------------

Name: Nicholas B. Paumgarten

Title: Managing Director

SCHEDULE II

HOLMES PROTECTION GROUP, INC.
440 NINTH AVENUE
NEW YORK, NEW YORK 10001

INFORMATION PURSUANT TO SECTION 14(F)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER

The following information is being furnished to holders of the common stock,
par value $.01 per share ("Common Stock"), of Holmes Protection Group, Inc., a
Delaware corporation (the "Company"), in connection with the possible
designation by Tyco International Ltd., a Bermuda company ("Tyco"), of at least
a majority of the members of the Board of Directors of the Company pursuant to
the terms of an Agreement and Plan of Merger, dated as of December 28, 1997 (the
"Merger Agreement"), by and among the Company, Tyco and T9 Acquisition Corp., a
Delaware corporation and an indirect wholly owned subsidiary of Tyco
("Purchaser"). THIS INFORMATION IS BEING PROVIDED SOLELY FOR INFORMATIONAL
PURPOSES AND NOT IN CONNECTION WITH A VOTE OF THE COMPANY'S STOCKHOLDERS.

The Merger Agreement provides that promptly following the purchase of any
Shares pursuant to the Offer, Tyco may request that the Company take all actions
necessary to cause persons designated by Tyco to become directors of the Company
(the "Tyco Designees") so that the total number of directorships held by such
persons is proportionate to the percentage calculated by dividing (i) the number
of Shares accepted for payment pursuant to the Offer plus Shares beneficially
owned by Tyco or any affiliate thereof by (ii) the total number of Shares
outstanding; provided that prior to the consummation of the Merger, the Board of
Directors of the Company (the "Board of Directors") shall always have at least
two members who are neither officers of the Company nor designees, shareholders
or affiliates of Tyco. The Company has also agreed to increase the size of the
Board of Directors or exercise reasonable best efforts to secure the resignation
of existing directors so as to enable Tyco's designees to be elected to the
Board of Directors in accordance with such provisions.

The information contained in this Schedule II concerning Tyco and Purchaser
has been furnished to the Company by Tyco, and the Company assumes no
responsibility for the accuracy or completeness of any such information.

VOTING SECURITIES OF THE COMPANY

As of December 28, 1997, there were issued and outstanding 6,310,034 shares
of Common Stock, each of which entitles the holder to one vote.

BOARD OF DIRECTORS, TYCO DESIGNEES
AND EXECUTIVE OFFICERS

BOARD BIOGRAPHICAL INFORMATION

The persons named below are the current members of the Board of Directors.
The following sets forth as to each director his age (as of December 28, 1997),
principal occupation and business experience, the period during which he has
served as a director and the expiration of his term as a director.

EXPIRATION
NAME AGE DIRECTOR SINCE OF TERM AS DIRECTOR
- ------------------------------------------------------------------------ --- --------------- ---------------------

Pierre Besuchet(2)...................................................... 64 1991 1998
Daniel T. Carroll(1)(2)................................................. 71 1996 1998
George V. Flagg......................................................... 56 1996 1996
Lawrence R. Glenn(1)(3)................................................. 59 1996 1996
Mark S. Hauser(3)....................................................... 40 1994 1997
William P. Lyons(1)(2).................................................. 56 1994 1997
David Jan Mitchell(1)(3)................................................ 36 1994 1997
Edward L. Palmer(1)(2).................................................. 80 1992 1996

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

(1) Member of Audit Committee.

(2) Member of Compensation Committee.

(3) Member of Retirement Benefits Committee.

The following is a brief summary of the background of each director of the
Company:

PIERRE BESUCHET. Mr. Besuchet has been the President of Gerant des
Fortunes, a Swiss investment management company, since 1983. He is also a
non-executive director of Faisal Finance (Switzerland) S.A., a Swiss investment
firm.

DANIEL T. CARROLL. Since 1982, Mr. Carroll has been the Chairman of The
Carroll Group, a management consulting company. He is also a director of A.M.
Castle & Co., American Woodmark Corporation, Aon Incorporated, Comshare, Inc.,
DeSoto, Inc., Diebold Incorporated, Oshkosh Truck Corporation, Wolverine World
Wide, Inc. and Woodhead Industries Inc.

GEORGE V. FLAGG. Mr. Flagg joined the Company on January 8, 1996 as
President and Chief Executive Officer. Prior thereto, from September 1985 to
December 1995, Mr. Flagg served in various executive capacities at The National
Guardian Corporation, a security alarm services company ("National Guardian"),
serving as President (from May 1986 to December 1995) and Chief Executive
Officer (from May 1991 to December 1995).

LAWRENCE R. GLENN. Since 1995, Mr. Glenn has been Chairman of J.W. Goddard
and Company, a privately owned investment company dealing in real estate,
corporate finance and financial advisory services. Mr. Glenn is the retired
former Chairman of the Credit Policy Committee of Citicorp and Citibank, N.A. He
is also a director of First Bank of Americas and Gerber Childrenswear Holdings,
Inc.

MARK S. HAUSER. Mr. Hauser was elected Vice Chairman of the Board of
Directors in May 1995. He is the founder and, since 1991, has been a Managing
Director of Tamarix Capital Corporation, a New York-based private investment
banking firm. Prior thereto, Mr. Hauser was a Managing Director at Hauser,
Richards & Co. and Ocean Capital Corporation, private international investment
banking firms. He is also a director of ICC Technologies, Inc. and EA
Industries, Inc.

WILLIAM P. LYONS. Mr. Lyons was elected Chairman of the Board of Directors
in May 1995. He has been President and Chief Executive Officer of William P.
Lyons and Co., Inc., a private investment firm,

since 1975. From 1992 to 1995, Mr. Lyons served as Chairman of JVL Corp., a
pharmaceutical manufacturer, and from 1988 to 1991, he served as Chairman and
Chief Executive Officer of Duro-Test Corporation, a manufacturer of specialty
lighting products. Mr. Lyons was an adjunct Professor of Management and Law at
Yale University from 1973 to 1989. Mr. Lyons is also a director of Lydall, Inc.,
Video Lottery Technologies, Inc. and DeSoto, Inc.

DAVID JAN MITCHELL. Since January 1991, Mr. Mitchell has been President of
Mitchell & Company, Ltd., a New York-based private merchant banking company he
founded. Since March 1992, Mr. Mitchell has been a partner of Pertherton Capital
Corporation, a privately held real estate investment company. From April 1988 to
December 1990, Mr. Mitchell served as a managing principal and a director of
Rodman & Renshaw, Inc., a publicly traded investment banking and brokerage firm.
Mr. Mitchell also serves as a director of Kellstrom Industries, Inc. and Bogen
Communications International.

EDWARD L. PALMER. Mr. Palmer is the retired Chairman of the Executive
Committee of Citicorp and Citibank, N.A. Mr. Palmer's current directorships
include Devon Group, Inc., SunResorts Ltd. N.V., FondElec Group, Energy Services
International Corporation and IRI International Corporation. Mr. Palmer has also
served on the board of directors of several U.S. and international corporations.

The Company is party to the following agreements which entitle certain
stockholders to nominate members of the Board of Directors: (i) the Exchange
Agreement, dated as of December 18, 1991, as amended (the "Exchange Agreement"),
with a group of insurance companies and other institutions (the "Institutions"),
including John Hancock Mutual Life Insurance Company and The Mutual Life
Insurance Company of New York, and (ii) the Investment Agreement, dated as of
June 29, 1994 (the "Investment Agreement"), with HP Partners L.P. ("HP
Partners"). Based on their aggregate percentage share ownership, the
Institutions currently have a right to nominate two directors. Messrs. Palmer
and Glenn were initially nominated by the Institutions and appointed to the
Board of Directors on November 30, 1992 and February 8, 1996, respectively, in
accordance with the terms of the Exchange Agreement. HP Partners currently has a
right to nominate three directors. Messrs. Hauser, Lyons and Mitchell were
nominated by HP Partners and elected to the Board of Directors on July 29, 1994
in accordance with the terms of the Investment Agreement. HP Partners previously
had the right to nominate four directors. However, as a result of the Company's
public offering of Common Stock in September 1996, the number of directors HP
Partners was entitled to nominate to the Board of Directors was reduced from
four to three. In connection therewith, William Spier (a former director who was
appointed to the Board of Directors by HP Partners) resigned from the Board of
Directors on September 30, 1996. Messrs. Hauser, Mitchell and Spier are
stockholders and directors of the general partner of HP Partners and Messrs.
Mitchell and Spier are also limited partners of HP Partners. See "Security
Ownership of Certain Beneficial Owners and Management" and "Certain
Relationships and Related Transactions."

INFORMATION CONCERNING TYCO DESIGNEES

Tyco has informed the Company that it will select the Tyco Designees from
among L. Dennis Kozlowski (age 51), Joshua M. Berman (age 59), Jerry R. Boggess
(age 53), David B. Brownell (age 54), Robert P. Mead (age 47), Richard J. Meelia
(age 47), Barbara S. Miller (age 47), M. Brian Moroze (age 54) and Mark H.
Swartz (age 37), each of whom is a director or executive officer of Tyco,
certain subsidiaries of Tyco or the Purchaser. Information concerning the Tyco
Designees is contained in Annex I and Annex II to the Offer to Purchase, a copy
of which is being mailed to the Company's stockholders together with this
Schedule 14D-9. The information in such Annexes is incorporated herein by
reference. In addition to the information concerning Mr. Kozlowski in such
Annexes, Mr. Kozlowski is a director of Applied Power, Inc., Raytheon Company
and RJR Nabisco Holdings Corp. Tyco has also informed the Company that each of
such directors and executive officers has consented to act as a director of the
Company, if so designated. It is expected that none of the Tyco Designees will
receive any compensation for services performed in his or her capacity as a
director of the Company.

COMMITTEES OF THE BOARD OF DIRECTORS; BOARD OF DIRECTORS MEETINGS

The Board of Directors has established an audit, a compensation and a
retirement benefits committee to assist it in the discharge of its
responsibilities. The principal responsibilities of each committee and the
members of each committee are described in the succeeding paragraphs. The
Company's Board of Directors held nine meetings during the year ended December
31, 1997. The Board of Directors does not have a nominating committee. This
function is performed by the Board of Directors. All Directors attended at least
75% of the meetings held by the Board of Directors and by the committees on
which they served during 1997.

The AUDIT COMMITTEE currently consists of Messrs. Carroll, Glenn (Chairman),
Lyons, Mitchell and Palmer. The Audit Committee held two meetings during 1997.
The Audit Committee reviews the scope and results of the audit and other
services performed by the Company's independent accountants.

The COMPENSATION COMMITTEE currently consists of Messrs. Besuchet, Carroll
(Chairman), Lyons and Palmer. The Compensation Committee held two meetings
during 1997. This Committee establishes objectives for the Company's senior
executive officers and sets the compensation of directors, executive officers
and other employees of the Company. It is also charged with the administration
of the Company's employee benefit plans, including stock options plans.

The RETIREMENT BENEFITS COMMITTEE currently consists of Messrs. Glenn,
Hauser (Chairman) and Mitchell. The Retirement Benefits Committee held one
meeting during 1997. The Retirement Benefits Committee provides oversight for
the Company's pension and retirement benefit plans.

COMPENSATION OF DIRECTORS

Each non-employee director receives an annual director's fee of $15,000
(except for the Chairman who receives an annual fee of $25,000) and a fee of
$750 per day for attending, in person or by telephone, meetings of the Board of
Directors and $250 per day for attending in person, or by telephone, meeting of
committees of the Board of Directors. Non-employee directors are reimbursed for
their reasonable expenses incurred in connection with attendance at or
participation in such meetings. In addition, under the Holmes Protection Group,
Inc. 1996 Stock Incentive Plan (the "1996 Plan"), each non-employee director who
was a director of the Company on December 4, 1995 was granted an option to
purchase 25,000 shares of Common Stock. Messrs. Glenn and Carroll were each
granted an option to purchase 25,000 shares of Common Stock on February 8, 1996
and June 27, 1996, respectively, at the time of their respective appointments to
the Board of Directors. Additionally, under the terms of the 1996 Plan, each
director, other than a director first elected within twelve months prior to the
1997 Annual Meeting, will be granted an option to purchase 1,000 shares of
Common Stock immediately following each Annual Stockholders Meeting.

Directors who are employees of the Company receive no additional
compensation for their services as directors. However, such directors are
reimbursed for their reasonable expenses incurred in connection with attendance
at or participation in meetings of the Board of Directors or committees of the
Board of Directors.

After the consummation of the Merger, it is expected that the Company's
Board of Directors will act to appoint new members to the Audit, Compensation
and Retirement Benefits Committees. To the Company's knowledge, no decision has
been made by the Tyco Designees regarding the membership of any such committees
of the Board.

EXECUTIVE OFFICERS

Executive officers serve at the discretion of the Board of Directors. The
following table sets forth certain information concerning the executive officers
of the Company (as of December 28, 1997) who are

expected to serve in such capacity until the consummation of the Merger (none of
whom has a family relationship with any other executive officer):

NAME POSITION AGE
- -------------------------- ------------------------------------------------------------------------------- ---------

George V. Flagg........... President and Chief Executive Officer 56
James L. Boehme........... Executive Vice President--Sales and Marketing 49
Dennis M. Stern........... Senior Vice President, General Counsel and Secretary 56
Glenn C. Riker............ Senior Vice President--Human Resources and Assistant Secretary 52
Lawrence R. Irving........ Vice President--Finance 41

The following is a brief summary of the background of each executive officer
of the Company:

GEORGE V. FLAGG. Mr. Flagg joined the Company on January 8, 1996 as
President and Chief Executive Officer. Prior thereto, from September 1985 to
December 1995, Mr. Flagg served in various executive capacities at National
Guardian, serving as President (from May 1986 to December 1995) and Chief and
Executive Officer (from May 1991 to December 1995).

JAMES L. BOEHME. Mr. Boehme was appointed Executive Vice President--Sales
and Marketing of the Company on January 8, 1996. Prior thereto, from March 1988
to December 1995, Mr. Boehme served in various executive capacities at National
Guardian, serving as Senior Vice President, Sales and Marketing (from June 1994
to December 1995) and Vice President, Sales and Marketing (from January 1990 to
June 1994).

DENNIS M. STERN. Mr. Stern joined the Company in December 1996 as Senior
Vice President, General Counsel and Secretary. Prior thereto, from December 1995
to December 1996, Mr. Stern was engaged in the private practice of law and
associated with the law firm of Buchanan Ingersoll. From March 1983 to December
1995, Mr. Stern served in various executive capacities with National Guardian,
serving as Executive Vice President, General Counsel and Secretary from August
1984 to December 1995.

GLENN C. RIKER. Mr. Riker has been with the Company since December 1989,
starting as Director of Human Resources and currently serving as Senior Vice
President of Human Resources and Assistant Secretary. Prior to joining the
Company, Mr. Riker was Vice President of Human Resources at Atlas Copco North
America, Inc., a manufacturer of industrial equipment.

LAWRENCE R. IRVING. Mr. Irving joined the Company in May 1996 as Vice
President--Finance. From July 1995 to April 1996, Mr. Irving served as
Controller, and then as Vice President-Finance and Treasurer, respectively, of
Centennial Security Holdings, Inc., a security alarm services company. Prior
thereto, from April 1987 to June 1995, Mr. Irving served as Assistant
Controller, and then as Assistant Vice President/ Assistant Controller, of
National Guardian.

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information with respect to the beneficial
ownership, as of December 28, 1997, of the Common Stock by (i) any person known
by the Company to beneficially own more than 5% of the outstanding Common Stock;
(ii) each director of the Company; (iii) the Company's Chief Executive Officer
and each of the four most highly compensated executive officers (collectively,
the "Named Officers") whose total salaries and bonuses exceeded $100,000 for
services rendered to the Company during the last fiscal year; and (iv) all
directors and executive officers of the Company as a group, including the Named
Officers. All share and warrant amounts and related exercise prices have been
adjusted to give effect to the one-for-fourteen reverse stock split of the
Common Stock completed on March 27, 1995. On December 28, 1997, there were
6,310,034 shares of Common Stock issued and outstanding.

NUMBER OF SHARES
OF COMMON STOCK
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED(1) PERCENTAGE OWNERSHIP(1)
- ------------------------------------------------------------------- -------------------- -------------------------

HP Partners L.P.(2)................................................ 2,201,600 31.1%
c/o HP Management, Inc.
444 Madison Avenue, 38th Floor
New York, New York 10022

John Hancock Mutual Life Insurance Company(2)...................... 639,594 10.0%
John Hancock Place
P.O. Box 111
Boston, Massachusetts 02117

The Mutual Life Insurance Company of New York(2)................... 399,905 6.3%
1740 Broadway
New York, New York 10019

TJS Partners, L.P.(2).............................................. 399,000 6.3%
52 Vanderbilt Avenue
5th Floor
New York, New York 10017

Stephen Feinberg................................................... 744,166 11.8%
950 Third Avenue, 20th Floor
New York, New York 10022

Pierre Besuchet(3)(6)(7)........................................... 45,048 *

James L. Boehme(6)(7).............................................. 108,750 1.7%

Daniel T. Carroll(6)(7)............................................ 27,000 *

George V. Flagg(6)(7).............................................. 167,000 2.6%

Lawrence R. Glenn(6)(7)(8)......................................... 27,000 *

Mark S. Hauser(4)(6)(7)............................................ 2,202,600 31.5%

Laurence R. Irving(6)(7)........................................... 12,500 *

William P. Lyons(4)(6)(7).......................................... 2,306,600 32.7%

David Jan Mitchell(4)(6)(7)........................................ 2,205,600 31.5%

Edward L. Palmer(6)(7)(8).......................................... 27,464 *

Dennis M. Stern(6)(7).............................................. 12,500 *

Glenn C. Riker(5)(7)............................................... 4,000 *

All directors and executive officers as a group 2,742,862 37.1%
(12 persons)(3)(4)(5)(6).........................................

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

* Represents less than 1% of outstanding Common Stock.

(1) Each director and executive officer has sole voting and investment power
with respect to the shares beneficially owned, except as otherwise noted in
the footnotes to this table. For purposes of this table, a person or group
of persons is deemed to have "beneficial ownership" of any shares of Common
Stock which such person has the right to acquire on or within 60 days of
December 28, 1997. For purposes of computing the percentage of outstanding
Common Stock held by each person or group of persons named above, any shares
which such person has the right to acquire on or within 60 days after
December 28, 1997 are deemed to be outstanding, but are not deemed to be
outstanding for the purpose of computing the percentage ownership of any
other person.

(2) Includes shares issuable upon the exercise of warrants having a current
exercise price of $10.16 per share, as follows: John Hancock Mutual Life
Insurance Company and affiliates--71,893; and The Mutual Life Insurance
Company of New York and affiliates--44,953. With respect to HP Partners,
includes 685,714 shares of Common Stock issuable upon the exercise of
warrants having a current exercise price of $4.58 per share. The information
in the foregoing table and in this note is based on the Company's records
and on either a Schedule 13D or a Schedule 13G filed with the Securities and
Exchange Commission by each of the following stockholders and dated as
indicated: HP Partners, dated January 20, 1995; John Hancock Mutual Life
Insurance Company, dated January 16, 1996; The Mutual Life Insurance Company
of New York, dated March 2, 1995; TJS Partners, L.P., dated June 17, 1996;
and Stephen Feinberg, dated August 20, 1997. The Schedule 13D filed by TJS
Partners, L.P. states that TJS Management, L.P., TJS Corporation and Thomas
J. Salvatore may be deemed to own beneficially the shares owned beneficially
by TJS Partners, L.P.

(3) Excludes vested options to purchase 17,884 shares of Common Stock granted to
Mr. Besuchet under the Company's 1992 Directors' Option Plan (the "Directors
Plan"). Grants of stock options are no longer permitted under the Directors
Plan. Such options have a current exercise price of $13.97 per share;
however, they become exercisable only if the price per share of the Common
Stock on the Nasdaq National Market is not less than $24.45 for 30
consecutive trading days. Such condition had not been met as of December 28,
1997.

(4) Includes 1,515,886 shares of Common Stock and warrants to purchase 685,714
shares of Common Stock owned by HP Partners. Messrs. Hauser, Mitchell and
Spier (a former director of the Company) are stockholders and directors of
the general partner of HP Partners, and Messrs. Mitchell and Spier are also
limited partners of HP Partners. Messrs. Hauser, Mitchell and Spier are also
the sole stockholders of the special limited partner of HP Partners which is
entitled to various rights relating to 285,714 of the partnership's
warrants. Pursuant to HP Partners' partnership agreement, Mr. Lyons has an
arrangement to participate in any economic benefit which Mr. Spier obtains
as a result of Mr. Spier's shareholding interest in such general partner.
See "Certain Relationships and Related Transactions."

(5) Includes vested options granted under the 1996 Plan to Mr. Riker to purchase
4,000 shares of Common Stock. Excludes options granted to Mr. Riker under
the 1992 Senior Executives' Option Plan (the "Executives Plan") and the 1996
Plan which have not yet vested to purchase 2,657 and 6,000 shares of Common
Stock, respectively.

(6) Includes vested options granted under the 1996 Plan to each of Messrs.
Besuchet, Carroll, Glenn, Hauser, Lyons, Mitchell, Palmer, Flagg, Boehme,
Irving and Stern to purchase 26,000, 25,000, 26,000, 1,000, 46,000, 1,000,
26,000, 109,000, 108,750, 12,500 and 12,500 shares of Common Stock,
respectively. Excludes options granted under the 1996 Plan which have not
yet vested to each of Messrs. Flagg, Boehme, Irving and Stern to purchase
124,000, 93,000, 25,000 and 25,000 shares of Common Stock, respectively.

(7) The address of such stockholder is: c/o Holmes Protection Group, Inc., 440
Ninth Avenue, New York, New York 10001-1695.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth a summary of annual and long-term
compensation earned by or paid to the Named Officers for services rendered to
the Company during each of the last three fiscal years:

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------------
------------------------------------ SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
SALARY BONUS COMPENSATION OPTIONS/ SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)(1)
- ------------------------------------- --------- ---------- --------- ------------- ------------------ -------------

George V. Flagg...................... 1995 $ -- $ -- $ -- -- $ --
President and Chief Executive 1996 196,154 -- 12,750 260,000(2) 4,763
Officer 1997 200,000 -- 13,000 25,000(5) 4,750

James L. Boehme...................... 1995 $ -- $ -- $ -- -- $ --
Executive Vice President-- Sales 1996 147,115 -- 12,750 195,000(2) 4,748
and Marketing 1997 157,500 -- 13,000 18,750(5) 4,750

Dennis M. Stern...................... 1995 $ -- $ -- $ -- -- $ --
Senior Vice President and General 1996 11,667 -- 1,083 25,000(5) --
Counsel 1997 140,000 -- 13,000 12,500 2,100

Glenn C. Riker....................... 1995 $ 91,260 $ 20,716 $ 13,000 -- $ 3,476
Senior Vice President-- Human 1996 93,445 9,125 13,000 10,000(3) 3,691
Resources 1997 100,000 -- 13,000 -- 2,885

Lawrence R. Irving................... 1995 $ -- $ -- $ -- -- $ --
Vice President--Finance 1996 68,654 20,000 31,800 25,000(4) --
1997 120,000 -- 10,400 12,500(5) 3,600

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

(1) Represents matching contributions by the Company under the Company's 401(k)
Plan. 100% of accrued matching contributions become vested on the first
anniversary of employment and are fully vested thereafter.

(2) Represents a grant of stock options made in January 1996 under the 1996
Plan.

(3) Represents a grant of stock options made in November 1996 under the 1996
Plan.

(4) Represents a grant of stock options made in May 1996 under the 1996 Plan.

(5) Represents a grant of stock options made in May 1997 under the 1996 Plan.

The Company has agreed to pay to each of Dennis M. Stern and Lawrence R.
Irving a bonus, equal to 50% of such officer's 1997 base compensation, for
extraordinary services in connection with proposed restructuring or sale
alternatives for the Company. Such fees would be payable upon consummation of
such transaction, including the Offer.

All information under "Executive Compensation" herein relating to stock
options (except for those granted under the 1996 Plan) and related exercise and
hurdle prices have been adjusted to give effect to the one-for-fourteen reverse
stock split of the Common Stock effected on March 27, 1995.

The following table contains information concerning the grant of stock
options made to the Named Officers during the fiscal year ended December 31,
1997 under the Executives Plan or the 1996 Plan:

OPTION/SAR GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS
---------------------------------------------------

NUMBER OF PERCENT OF
SECURITIES TOTAL OPTION/SARS EXERCISE OR MARKET
UNDERLYING GRANTED TO BASE PRICE ON
OPTIONALS/SARS EMPLOYEES IN PRICE GRANT DATE
NAME GRANTED (#) FISCAL YEAR ($/SH) ($/SH)
- ------------------------------------------------ --------------- --------------------- --------------- -----------
George V. Flagg................................. 25,000 10.5% $ 13.75 $ 13.75
James L. Boehme................................. 18,750 7.9% $ 13.75 $ 13.75
Dennis M. Stern................................. 12,500 5.3% $ 13.75 $ 13.75
Lawrence R. Irving.............................. 12,500 5.3% $ 13.75 $ 13.75

POTENTIAL
REALIZABLE VALUE
AT ASSUMED
ANNUAL
RATES OF
STOCK PRICE
APPRECIATION FOR
OPTION TERM(1)
----------------------

NAME EXPIRATION DATE 5% 10%
- -------------------------------------------------------------------- --------------- ---------- ----------
George V. Flagg..................................................... 5/23/2007 $ 216,183 $ 547,849
James L. Boehme..................................................... 5/23/2007 $ 162,137 $ 410,887
Dennis M. Stern..................................................... 5/23/2007 $ 108,091 $ 273,925
Lawrence R. Irving.................................................. 5/23/2007 $ 108,091 $ 273,925

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

(1) Amounts indicated under the "Potential Realizable Value" columns above have
been calculated by multiplying the market price on the date of grant by the
annual appreciation rate shown (compounded for the term of the options),
subtracting the exercise price per share and multiplying the gain per share
by the number of shares covered by the options.

Except as disclosed above, no other grants of stock options were made in the
fiscal year ended December 31, 1997 to any of the Named Officers. No stock
options were exercised by any of the Named Officers during the fiscal year ended
December 31, 1997, except as set forth below:

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES

VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS AT
SHARES ACQUIRED VALUE AT FISCAL YEAR-END (#) FISCAL YEAR-END ($)
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
- --------------------------- --------------- ------------ -------------------------- --------------------------

George V. Flagg............ 52,000 $ 455,000 57,000/176,000(3) $ 526,452/$1,282,746
James L. Boehme............ 12,000 $ 141,000 69,750/132,000(3) $ 687,197/$962,059
Glenn C. Riker............. 6,197 $ 64,883 2,000/10,657(2)(3) $ 9,656/$63,994
Lawrence R. Irving......... -- -- 12,500/25,000(3) $ 90,976/$165,702
Dennis M. Stern............ -- -- 12,500/25,000(3) $ 55,976/$103,203

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

(1) Based upon the per share closing price on December 29, 1997 ($16.83).

(2) Options were granted pursuant to the Executives Plan.

(3) Options were granted pursuant to the 1996 Plan.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In 1994, Mr. William Spier, a former director of the Company who resigned on
September 30, 1996, entered into an agreement with PremiTech Corporation
("PremiTech"), which is a limited partner of HP Partners, to acquire PremiTech's
limited partnership interest for approximately $2,000,000, at the option of
PremiTech, in the event that PremiTech did not enter into an agreement for the
provision of information technology services to the Company. Such information
technology agreement was subsequently executed on April 4, 1995, thereby
terminating PrimiTech's option to sell its interest in HP Partners to Mr. Spier.

Pursuant to HP Partners' partnership agreement, Mr. Lyons has an arrangement
to participate in any economic benefit which Mr. Spier obtains as a result of
Mr. Spier's shareholding interest in such general partner.

On December 5, 1995, each of Messrs. Hauser, Lyons, Mitchell and Spier were
granted options under the 1996 Plan, subject to stockholder approval of the 1996
Plan, to purchase 15,000, 60,000, 30,000 and 15,000 shares of Common Stock,
respectively, at an exercise price of $5.56 per share. Such grants were made in
recognition of the extraordinary services that each of these individuals
provided to the Company in connection with the management transition and
reorganization that occurred during 1995. The 1996 Plan was approved by
stockholders in December 1996 at the Company's 1996 Annual Meeting of
Stockholders.

EMPLOYMENT AGREEMENTS

Mr. Flagg is employed by the Company pursuant to an employment agreement
dated January 8, 1996, which expires on December 31, 1998, but continues
year-to-year thereafter unless terminated in accordance with its terms. Mr.
Flagg's employment agreement provides for an annual base salary of no less than
$200,000. Mr. Boehme is employed by the Company pursuant to an employment
agreement dated January 8, 1996, which expires on December 31, 1998, but
continues year-to-year thereafter unless terminated in accordance with its
terms. Mr. Boehme's employment agreement provides for an annual base salary of
no less than $150,000. Mr. Irving is employed by the Company pursuant to an
employment agreement dated May 13, 1996, which expires on December 31, 1998, but
continues year-to-year thereafter unless terminated in accordance with its
terms. Mr. Irving's employment agreement provides for an annual base salary of
no less than $105,000. Mr. Stern is employed by the Company pursuant to an
employment agreement dated as of December 2, 1996, which expires on December 31,
1998, but continues year-to-year thereafter unless terminated in accordance with
its terms. Mr. Stern's employment agreement provides for an annual base salary
of no less than $140,000. The salaries provided under all of these employment
agreements may be increased at the discretion of the Board of Directors or the
Compensation Committee thereof. Under the terms of Messrs. Flagg's, Boehme's,
Irving's and Stern's respective employment agreements, options were granted to
purchase shares of Common Stock under the 1996 Plan (260,000 shares in the case
of Mr. Flagg, 195,000 shares in the case of Mr. Boehme and 25,000 shares each in
the case of Messrs. Irving and Stern). Messrs. Flagg, Boehme, Irving and Stern
are also provided with certain other benefits and perquisites pursuant to their
respective employment agreements. Upon termination of employment with the
Company, Messrs. Flagg, Boehme, Irving and Stern are each subject to a non-
compete period of six months.

In accordance with Messrs. Flagg's, Boehme's, Irving's and Stern's
respective employment agreements, upon a termination of employment by the
Company for reasons other than (i) "Cause," (ii) "Disability" (each as defined
in such employment agreements), or (iii) death, or adjudicated incompetency, the
Company will be obligated to pay to each of Messrs. Flagg, Boehme, Irving and
Stern the greater of 12 months' base salary or base salary for the balance of
the remaining term of the respective employment agreement, and to maintain
certain benefits. Upon termination of employment by the Company within 12 months
of a "Change-of-Control Event" (as defined below), Messrs. Flagg, Boehme, Irving
and Stern shall each be entitled to receive their respective base salaries and
certain other benefits for an additional period of 12 months. As defined in
Messrs. Flagg's, Boehme's, Irving's and Stern's respective employment
agreements, a "Change-of-Control Event" means the consummation of (i) a proxy
contest for control of the Board of Directors resulting in the person or entity
or group of affiliated persons or entities (collectively, a "Control Group")
initiating such proxy contest electing a majority of the members of the Board of
Directors; (ii) the purchase by a Control Group of the Common Stock or other
securities of the Company which, when aggregated with any other securities of
the Company then held by such Control Group, gives such Control Group
"beneficial ownership" (as defined in Rule 13d-3 promulgated under the Exchange
Act) of securities representing more than 50% of the combined voting power of
the Company; or (iii) any such transaction that the Board of Directors shall
have favorably recommended to stockholders of the Company at any time prior to
its consummation, and such recommendation shall not have been withdrawn.

Mr. Riker was employed by the Company pursuant to an employment agreement
dated October 12, 1994, which expired on December 31, 1996, and which provided
for an annual base salary of $91,260. On September 2, 1997 the Company entered
into a letter agreement with Mr. Riker providing for certain severance benefits
in the event of a termination of employment as a result of a "Change of Control
Event". In such event Mr. Riker would be entitled to receive two years base
salary and certain additional benefits.

Upon the occurrence of a "Change-of-Control Event," the Company's maximum
aggregate salary payment obligation would be $1,435,000. Such amount is
calculated by combining the 1997 base salaries of each of Messrs. Flagg, Boehme,
Irving, Stern and Riker for a period of 24 months.

For information with regard to bonuses to be paid to Messrs. Stern and
Irving in connection with proposed restructuring or sale alternatives for the
Company, see "Executive Compensation" herein.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the Company's fiscal year ended December 31, 1997, the Compensation
Committee of the Board of Directors consisted of Messrs. Besuchet, Carroll,
(Chairman), Mitchell and Palmer. None of these individuals has ever served as an
officer or an employee of the Company (other than by reason of the officer
status conferred upon the Chairman of the Board of Directors pursuant to the
By-Laws). In addition, no executive officer of the Company has ever served (i)
as a member of the compensation committee or equivalent of another entity, one
of whose executive officers served on the Compensation Committee, (ii) a
director of another entity, one of whose executive officers served on the
Compensation Committee, or (iii) a member of the compensation committee or
equivalent of another entity, one of whose executive officers served as a
director of the Company.

COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS

The Compensation Committee establishes compensation policies and practices
for the Company, outlines objectives for the Company's executive officers and
sets the compensation of the executive officers, certain highly compensated
employees and the Board of Directors. Additionally, the Compensation Committee
is charged with the administration of the Company's employee benefit plans,
including stock option plans.

GENERAL POLICIES REGARDING COMPENSATION OF EXECUTIVE OFFICERS

The Company's executive compensation policies are designed to attract and
retain superior management and professional talent, to motivate those
individuals to maximize shareholder value and to reward those individuals with
increases in base salary, bonuses when performance objectives are achieved and
appropriate stock options. Together these components link each executive's
compensation directly to individual and Company performance. The initial base
salary and terms of bonuses for certain executive officers are contained in the
employment agreements described under the caption "Employment Agreements".

SALARY. Individual base salaries reflect the level of responsibility, the
experience and training required and the executive's ability to contribute to
the Company's success. Salaries are reviewed at least annually and are increased
on the recommendation of the Chief Executive Officer to the Compensation
Committee, which is empowered to take final action. The base salaries specified
in each executive's employment agreement may from time to time be adjusted,
subject to the minimum salary levels specified therein.

BONUSES. In 1996, the Company established the 1996 Incentive Compensation
Plan (the "Incentive Plan") which is designed to reward executive officers and
certain other employees for exceptional performance. The actual awards under the
Incentive Plan are recommended by a senior management committee, including the
Chief Executive Officer, and approved by the Compensation Committee. The bonus
opportunity for eligible participants is based on their level of responsibility,
their performance and the performance by the Company. Bonus awards for eligible
participants range from 15% to 50% of their base salaries. The Company does not
expect that any awards under this Plan will be granted to the Named Officers for
the fiscal year ended December 31, 1997.

In addition to bonus payments under the Incentive Plan, the Chief Executive
Officer may from time to time recommend, subject to the Compensation Committee's
approval, additional discretionary bonus payments to certain executive officers
based on exceptional individual performance and unique contributions to the
Company.

STOCK OPTIONS. The Compensation Committee believes that continued use of
stock options is an effective mechanism for long-term incentive compensation of
executive officers and certain other employees. Such compensation, the
Compensation Committee believes, effectively links the actions of these officers
and employees to the interests of stockholders and is critical to the Company's
remaining competitive in its compensation practices. Accordingly, the Company
adopted the 1996 Plan. As a result of stockholder approval of the 1996 Plan in
December 1996, no further grants will be made under the Executives Plan.

COMPENSATION LIMITATIONS. In 1993, the Internal Revenue Code was amended to
limit the deductibility of compensation paid to certain executives in excess of
$1 million. Compensation not subject to the limitation includes certain
compensation payable solely because an executive attains performance goals. The
Company's compensation deduction for a particular executive's total
compensation, including compensation realized from the exercise of stock
options, will be limited to $1 million. The Compensation Committee believes that
the compensation paid by the Company in the fiscal year ended December 31, 1997
will not result in any material loss of tax deductions for the Company.

COMPENSATION OF THE CHIEF EXECUTIVE OFFICER

Mr. Flagg's annual base salary for the fiscal year ended December 31, 1996
was determined by the terms of his employment agreement, dated January 8, 1996.
The Compensation Committee believes that the compensation earned by Mr. Flagg in
1996 pursuant to his employment agreement was appropriate in light of Mr.
Flagg's substantial contribution to improving the efficiency of the Company's
operations and his efforts toward positioning the Company's business for future
growth. Among other things, Mr. Flagg's contribution and efforts were
instrumental in effecting an over 10% reduction in selling, general and
administration expenses of the Company in 1996 as compared to 1995, securing a
new, two-year, $25 million credit facility for the Company, initiating and
implementing a strategic acquisition strategy, enhancing and expanding the
Company's national accounts program and promoting and executing the Company's
public offering of Common Stock in September 1996.

Mr. Flagg's annual base salary under his employment agreement remained the
same for the fiscal year ended December 31, 1997. Mr. Flagg was awarded
additional stock options in 1997 in further consideration of his performance
with respect to matters referred to in the preceding paragraph and his
performance generally in 1997.

Members of the Compensation Committee

Pierre Besuchet
Daniel T. Carroll (Chairman)
William P. Lyons
Edward L. Palmer

PERFORMANCE GRAPH(1)

The Company's Common Stock traded on the London Stock Exchange from 1984
through March 24, 1995. From March 27, 1995 through September 20, 1996, the
Common Stock traded on the Nasdaq SmallCap Market. Since September 23, 1996, the
Common Stock has traded on the Nasdaq National Market.

The graph below compares the cumulative total shareholder return on the
Common Stock since March 27, 1995 (the date the Common Stock began trading on
Nasdaq SmallCap Market) through November 28, 1997, with the cumulative
stockholder return of (a) the total return on the University of Chicago's Center
for Research on Security Prices ("CRSP") Total Return Index for the Nasdaq Stock
Market (U.S. Companies) and (b) a "Peer Group Index." Total return values were
calculated based on the assumption of $100 invested and on cumulative total
return values assuming reinvestment of dividends. The Peer Group is based on a
selection of companies operating in the security alarm monitoring industry and
is comprised of Protection One, Inc., Borg-Warner Security, Response USA, Inc.
and AlarmGuard Holdings Inc. The Peer Group Index weighs the constituent
companies' stock performance on the basis of market capitalization measured on
March 27, 1995. The stock price performance shown on the graph below is not
necessarily indicative of future price performance.

COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG HOLMES PROTECTION GROUP, INC., CRSP TOTAL RETURN INDEX FOR
THE NASDAQ STOCK MARKET (U.S. COMPANIES) AND A PEER GROUP INDEX
(in dollars)

[GRAPH]

CRSP Total Returns Index for: 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96 11/28/97
- ------------------------------------------------------ ----------- ----------- ----------- ----------- ----------- -----------

Holmes Protection Group, Inc. 72.3 246.8 314.9
Nasdaq Stock Market (US Companies) 81.2 93.2 91.1 128.8 158.4 197.5
Self-Determined Peer Group 210.9 254.5 125.5 175.5 151.5 253.6

Companies in the Self-Determined Peer Group

ALARMGUARD HOLDINGS INC. BORG WARNER SECURITY CORP.

PROTECTION ONE INC. RESPONSE USA INC.

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 3/27/95.
- ------------------------
(1) The materials contained in this Information Statement and under the caption
"Performance Graph" are not "soliciting material," are not deemed filed with
the Securities and Exchange Commission and are not to be incorporated by
reference in any filing of the Company under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, whether made
before or after the date of this Information Statement and irrespective of
any general incorporation provision contained therein.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who beneficially own more than ten percent of a registered class of the
Company's equity securities, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and persons who
beneficially own more than ten percent of a registered class of the Company's
equity securities are required by the regulations of the Securities and Exchange
Commission 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 the fiscal year ended December 31, 1997, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.