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Rule 424(b)(3)
File No. 33-99220
PROSPECTUS SUPPLEMENT
dated February 7, 1997
to
Prospectus dated January 11, 1996
The cover page of the accompanying Prospectus and the
information contained therein under the caption "Plan of Distribution" are
hereby amended and supplemented as follows:
Holders of shares covered by this Prospectus may from
time to time offer and sell the shares covered by this Prospectus by
or for their respective accounts at prices and on terms to be
determined at the time of sale, to purchasers directly or through
underwriters, brokers, dealers, or agents, who may receive
compensation in the form of underwriting discounts, concessions or
commissions. From time to time the holders of shares covered by this
Prospectus may engage in short sales, short sales versus the box, puts
and calls and other transactions in securities of Protection One, or
derivatives thereof, and may sell and redeliver shares covered by this
Prospectus in connection therewith. To the extent required, the
purchase price, the name of any such underwriter, dealer or agent and
the applicable underwriter's discount, dealer's purchase price or
agent's commission with respect to a particular offering, if any, will
be set forth in an accompanying supplement to this Prospectus.
Holders of shares covered by this Prospectus and all
broker-dealers and agents, if any, that participate in a distribution
of any of such shares may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, in which event all
discounts, concessions or commissions, if any, received by such
brokers, dealers, agents or underwriters and all profits, if any, on
the resale of shares covered by this Prospectus and purchased by them
may be deemed to be underwriting commissions or discounts under the
Securities Act. The aggregate net proceeds to the holders of shares
covered by this Prospectus from the sale of such shares will be the
purchase price of such shares, less all commissions, if any, and other
expenses of issuance and distribution not borne by Protection One.
The information contained in the accompanying Prospectus on page 18
with respect to the number of shares of Common Stock beneficially owned by
Morgan Stanley Group Inc., the number of shares of Common Stock that may from
time to time be offered and sold by Morgan Stanley & Co. Incorporated and the
number and percentage of outstanding shares of Common Stock to be owned by
Morgan Stanley & Co. Incorporated after any such offering is hereby amended and
supplemented, based upon information provided by Morgan Stanley Group Inc., as
follows:
Morgan Stanley & Co. Incorporated ("MS&Co.") is a wholly owned
subsidiary of Morgan Stanley Group Inc. Morgan Stanley Group Inc.,
through its affiliates, was the beneficial owner (as such term is
defined in Rule 13d-3 of the Rules and Regulations of the Exchange
Act) on January 23, 1997 of 171,593 shares of Common Stock and
warrants to purchase an additional 244,400 shares (subject to
adjustment) of Common Stock. MS&Co. may from time to time offer for
sale some or all of the shares of Common Stock that may be issued upon
the exercise of 61,600 of the Warrants, or 61,600 shares (subject to
adjustment) of Common Stock.
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In May 1995, MS&Co., an affiliate of Morgan Stanley Venture
Partners L.P., the sole general partner of Morgan Stanley Venture
Capital Fund L.P. ("MSVCF"), acted as dealer-manager for Monitoring's
tender offer for the $50 million principal amount of Monitoring's 12%
Series B Senior Subordinated Notes due 2003 then outstanding; in
addition, MS&Co. together with another investment banker (the
"Placement Agents") acted as initial purchasers of an aggregate of
$166 million principal amount of the Discount Notes and the Warrants,
which notes and warrants were subsequently resold by the Placement
Agents pursuant to Rule 144A to a number of financial institutions.
MS&Co. received from the Company a fee of $125,000 for MS&Co.'s
services as dealer-manager and compensation of approximately $3.5
million in connection with the Rule 144A transaction. Pursuant to a
Prospectus dated July 12, 1995 and the related Prospectus Supplement
dated February 7, 1997 relating to an aggregate 1,071,957 shares of
Common Stock offered by certain stockholders, including 126,000 shares
(subject to adjustment) of Common Stock offered by MS&Co., certain of
the shares of Common Stock underlying the warrants issued by
Protection One on November 3, 1993 were registered by Protection One
with the Commission for resale.
MS&Co. was the managing underwriter of an offering made
pursuant to a registration statement dated February 6, 1996 filed by
Protection One with the Commission for an underwritten public offering
of 2,500,000 shares of Common Stock offered by Protection One and an
aggregate of 1,500,000 shares offered by certain stockholders,
including 382,447 shares offered by MSVCF. MS&Co. received
underwriting discounts and commissions of approximately $880,000 as
managing underwriter of the public offering.
In addition, MS&Co. was the managing underwriter of a public
offering made pursuant to a registration statement dated September 16,
1996 by Monitoring of $90 million principal amount of 6 3/4%
Convertible Senior Subordinated Notes due 2003, which notes are
convertible into Common Stock and are unconditionally guaranteed by
Protection One. MS&Co. received underwriting discounts and
commissions aggregating $2,173,500 (including fees and commissions
resulting from the underwriters' purchase of all of the additional
notes available from Monitoring under the offering to cover
over-allotments) as managing underwriter of the public offering.
Andrew C. Cooper, a Principal of MS&Co., was formerly a member
of Protection One's Board of Directors.
All capitalized terms used but not defined in this Prospectus
Supplement are used as defined in the accompanying Prospectus.
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