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                                                                   EXHIBIT 10.39

                     SECURITY ASSOCIATES INTERNATIONAL, INC.
                          EMPLOYEE STOCK PURCHASE PLAN


1.       PURPOSE

         The purpose of the Security Associates International, Inc. Employee
Stock Purchase Plan is to provide eligible Employees of Security Associates
International, Inc., and its Affiliates with an opportunity to acquire a
proprietary interest in the Company through the purchase of Common Stock of the
Company on a payroll deduction basis. It is believed that participation in the
ownership of the Company will be to the mutual benefit of the eligible Employees
and the Company. It is intended that this Plan shall constitute an "employee
stock purchase plan" within the meaning of Section 423 of the Internal Revenue
Code of 1986, as amended. The provisions of the Plan shall, accordingly, be
construed so as to extend and limit participation in a manner consistent with
the requirements of Code Section 423.

2.       DEFINITIONS

         Unless otherwise specified or unless the context otherwise requires,
the following terms, as used in this Plan, have the following meanings. Wherever
appropriate, words used in the singular shall be deemed to include the plural
and vice versa, and the masculine gender shall be deemed to include the feminine
gender.

         (a) ACCOUNT means the funds accumulated with respect to an Employee as
         a result of deductions from his paycheck for the purpose of purchasing
         Common Stock under the Plan. The funds allocated to an Employee's
         Account shall remain the property of the Employee at all times prior to
         the purchase of the Common Stock, but may be commingled with the assets
         of the Company and used for general corporate purposes. Except as
         otherwise set forth herein, no interest shall be paid or accrued on any
         funds accumulated in the Accounts of Employees.

         (b) AFFILIATE means a corporation, as defined in Section 424(f) of the
         Code, that is a parent or subsidiary of the Company, direct or
         indirect.

         (c) BOARD means the Board of Directors of the Company.

         (d) CODE means the Internal Revenue Code of 1986, as amended.

         (e) COMMITTEE means the committee to which the Board delegates the
         power to act under or pursuant to the provisions of the Plan, or the
         Board if no committee is selected.

         (f) COMMON STOCK means the shares of common stock of the Company, $.001
         par value.

         (g) COMPANY means Security Associates International, Inc., a Delaware
         corporation, and any corporate successor to all or substantially all of
         the assets or voting stock of the Company.


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         (h) COMPENSATION means the compensation paid to an Employee by the
         Company during a payroll period for federal income tax purposes, as
         reported on an Employee's Form W-2 (or comparable reporting form) for
         income tax withholding purposes.

         (i) EFFECTIVE DATE means the date the Plan is adopted by, and made
         effective by, the Board, subject to the limitations of Section 16.

         (j) EMPLOYEE means any person who is employed by the Company or an
         Affiliate on a regular full-time or part-time basis. A person shall be
         considered employed on a regular full-time or part-time basis if he is
         customarily employed for more than twenty (20) hours per week.

         (k) OFFERING DATE means the date on which the Committee grants
         Employees the option to purchase shares of Common Stock.

         (l) OFFERING PERIOD means the period between the Offering Date and the
         Purchase Date.

         (m) PURCHASE DATE means the date on which the Committee purchases the
         shares of Common Stock, which date shall be the last day of an Offering
         Period.

         (n) PARTICIPANT means an Employee who elects to participate in the
         Plan.

         (o) PLAN means the Security Associates International, Inc. Employee
         Stock Purchase Plan.

3.       ELIGIBILITY

         All Employees of the Company and, if designated by the Board, any
Affiliate, who are employed by the Company and/or such designated Affiliate
shall be eligible to participate in the Plan on the first Offering Date
coincident with or next following the Employee's first day of employment with
the Company or an Affiliate.

4.       ADMINISTRATION

         The Plan shall be administered by the Committee, which shall consist of
not less than two (2) members of the Board. Subject to the provisions of the
Plan, the Committee shall be vested with full authority to make, administer, and
interpret such rules and regulations as it deems necessary to administer the
Plan, and any determination, decision, or action of the Committee in connection
with the construction, interpretation, administration, and application of the
Plan shall be final, conclusive, and binding upon all Participants and any and
all persons claiming under or through any Participant. Notwithstanding anything
to the contrary in the Plan, the Committee shall have the discretion to modify
the terms of the Plan with respect to Participants who reside outside of the
United States or who are employed by a subsidiary of the Company that has been
formed under the laws of any foreign country, if such modification is necessary
in order to conform such terms to the requirements of local laws.


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5.       STOCK

         (a) The Common Stock to be sold to Participants under the Plan may, at
         the election of the Company, be either treasury shares, shares acquired
         on the open market, and/or shares originally issued for such purpose.
         The aggregate number of shares of Common Stock that shall be made
         available for purchase under the Plan shall not exceed one million
         (1,000,000) shares, subject to adjustment upon changes in
         capitalization of the Company as provided in subparagraph (b) below. In
         the event any purchase right granted under the Plan expires or
         terminates for any reason without having been exercised in full or
         ceases for any reason to be exercisable in whole or in part, the
         unpurchased shares subject thereto will again be available for purchase
         by Employees upon the exercise of purchase rights. If the total number
         of shares that otherwise would have been acquired under the Plan on any
         Purchase Date exceeds the number of shares of Common Stock then
         available under the Plan, the Company shall make a pro rata allocation
         of the shares remaining available in as nearly a uniform manner as
         shall be practicable and as it shall determine to be equitable. In such
         event, the payroll deductions to be made pursuant to the Participants'
         authorizations shall be reduced accordingly, or refunded to the
         Participants, as the case may be, and the Company shall give written
         notice of such reduction or refund to each affected Participant.

         (b) Appropriate adjustments in the aggregate number of shares of Common
         Stock that shall be made available for purchase under the Plan shall be
         made to give effect to any stock splits, stock dividends, or other
         similar changes in the capitalization of the Company occurring after
         the Effective Date. The establishment of the Plan shall not affect in
         any way the right or power of the Company to make adjustments,
         reclassifications, reorganizations, or changes in its capital or
         business structure or to merge, consolidate, dissolve, liquidate, sell,
         or otherwise transfer all or any part of its business or assets.
         Adjustments under this Section 5 shall be made in the sole discretion
         of the Committee, and its decision shall be binding and conclusive.

         (c) A Participant shall not have any interest in shares covered by his
         authorized payroll deduction until shares of Common Stock are acquired
         for his Account.

6.       PARTICIPATION

         (a) Each Employee may become a Participant in the Plan by authorizing a
         payroll deduction on a form provided by the Committee. Such
         authorization shall become effective on the Offering Date following the
         delivery of the authorization form to the Committee (or its designated
         representative); provided, (i) that the Employee is eligible under
         Section 3 to participate in the Plan on such day and (ii) that if the
         authorization form is delivered to the Committee later than 4:00 P.M.
         C.S.T. on the last business day prior to the first day of the Offering
         Date, it shall not be effective and a new authorization form must be
         delivered to elect to participate in a subsequent Offering Period.

         (b) At the time an Employee files his authorization for a payroll
         deduction, he shall elect to have deductions made from each paycheck
         that he receives, such deductions to continue until the Participant
         withdraws from the Plan or otherwise becomes ineligible to participate
         in the Plan. Authorized payroll deductions shall be for a minimum of
         one 

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         percent (1%) and a maximum of fifteen percent (15%) of the
         Participant's Compensation. The deduction rate so authorized shall
         continue in effect through the Offering Period and each succeeding
         Offering Period, subject to the following: (i) a Participant may, at
         any time during any Offering Period, reduce his rate of payroll
         deduction by filing a new authorization form with the Company, which
         shall become effective as soon as practicable after it is filed; and
         (ii) a Participant may increase the rate of his payroll deduction
         effective as of any subsequent Offering Date by filing a new
         authorization form with the Committee by 4:00 p.m. C.S.T. on the last
         business day prior to the next Offering Date.

         (c) All Compensation deductions made for a Participant shall be
         credited to his Account. Except as may otherwise be provided by the
         Committee under Section 4, a Participant may not make any separate cash
         payment into his Account.

7.       PURCHASE OF SHARES

         (a) On the date when a Participant's authorization form for a deduction
         becomes effective, and on each Offering Date thereafter, he shall be
         deemed to have been granted an option to purchase as many full shares
         of Common Stock as he will be able to purchase with the Compensation
         deductions credited to his Account during the payroll periods within
         the applicable Offering Period for which the Compensation deductions
         are made.

         (b) The purchase price for the shares of Common Stock to be purchased
         with payroll deductions from the Participant shall be equal to
         eighty-five percent (85%) (or such other amount as the Committee shall
         authorize, but in no event less than eighty-five percent (85%)) of the
         "fair market value" of a share of Common Stock on the Offering Date.
         Fair market value shall be defined as the closing sales price of the
         Common Stock on the largest national securities exchange on which such
         Common Stock is listed on the Offering Date. If the Common Stock is not
         then listed on any such exchange, the fair market value shall be the
         closing sales price if such is reported or otherwise the mean between
         the closing "Bid" and the closing "Ask" prices, if any, as reported in
         the National Association of Securities Dealers Automated Quotation
         System ("NASDAQ") for the date of valuation, or if none, on the most
         recent trade date thirty (30) days or less prior to the date of
         valuation for which such quotations are reported. If the Common Stock
         is not then listed on any such exchange or quoted in NASDAQ, the fair
         market value shall be the mean between the average of the "Bid" and the
         average of the "Ask" prices, if any, as reported in the National Daily
         Quotation Service for the date of valuation, or, if none, for the most
         recent trade date thirty (30) days or less prior to the date of
         valuation for which such quotations are reported. If the fair market
         value cannot be determined under the preceding three sentences, it
         shall be determined in good faith by the Committee.

8.       TIME OF PURCHASE

         From time to time, the Committee shall grant to each Participant an
option to purchase shares of Common Stock in an amount equal to the number of
shares of Common Stock that the accumulated payroll deductions to be credited to
his Account during the Offering Period may purchase at the applicable purchase
price. Each Offering Period shall be for a period of twenty-

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seven (27) months' duration. Each Participant who elects to purchase shares of
Common Stock hereunder shall be deemed to have exercised his option
automatically on such date of purchase. Administrative and commission costs on
purchases shall be paid by the Company. The Committee shall cause to be
delivered periodically to each Participant a statement showing his aggregate
Compensation deductions for the Offering Period, the price per share paid for
the shares of Common Stock purchased for him during the Offering Period, and the
amount of cash, if any, remaining in his Account at the end of the Offering
Period.

         As soon as practicable following the Purchase Date, the Company shall
deliver to the Participant a certificate representing the number of shares of
Common Stock purchased for the Participant's Account. All of the cash deposits
in his Account shall be paid to him promptly after receipt of notice of
withdrawal, with interest at the rate of 3-1/2%, compounded annually. Shares of
Common Stock to be delivered to a Participant under the Plan shall be registered
in the name of the Participant or, if the Participant so directs in writing to
the Committee, in the name of the Participant and such person(s) as may be
designated by the Participant, to the extent permitted by applicable law, and
delivered to the Participant as soon as practicable after the request for a
withdrawal.

9.       CESSATION OF PARTICIPATION

         A Participant may cease participation in the Plan at any time by
notifying the Committee in writing of his intent to cease his participation. If
such notice is received by the Committee the Company shall distribute to the
Participant all of his accumulated payroll deductions, with interest at the rate
of 3-1/2%, compounded annually. If any Participant ceases participation in the
Plan, no further Compensation deductions shall be made on his behalf after the
effective date of his cessation, except in accordance with a new authorization
form filed with the Committee as provided in Section 6. Upon ceasing
participation in the Plan, a Participant shall not be permitted to reenter the
Plan until six (6) months have elapsed from the date his cessation becomes
effective.

10.      INELIGIBILITY

         An Employee must be employed by the Company or an Affiliate on the
Purchase Date in order to participate in the purchase for that Offering Period.
If an option expires without first having been exercised, all funds credited to
the Participant's Account shall be refunded, with interest at the rate of
3-1/2%, compounded annually. If a Participant becomes ineligible to participate
in the Plan at any time, all Compensation deductions made on behalf of the
Participant that have not been used to purchase shares of Common Stock shall be
paid to the Participant within sixty (60) days after the Committee determines
that the Participant is not eligible to participate in the Plan.

11.      DESIGNATION OF BENEFICIARY

         A Participant may file a written designation of a beneficiary who shall
receive any shares of Common Stock (or remaining Compensation deductions)
credited to the Participant's Account under the Plan in the event of such
Participant's death prior to delivery to him of the certificates for such shares
(or remaining Compensation deductions). The designation of a beneficiary may be
changed by the Participant at any time by written notice given in accordance
with rules and 

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procedures established by the Committee. Upon the death of a Participant, and
upon receipt by the Company of proof of the identity and existence, at the
Participant's death, of a beneficiary validly designated by him under the Plan,
the Company shall deliver such shares of Common Stock (or remaining Compensation
deductions) to such beneficiary. In the event of the death of the Participant,
and in the absence of a beneficiary validly designated under the Plan who is
living at the time of such Participant's death, the Company shall deliver such
shares (or remaining Compensation deductions) to the executor or administrator
of the estate of the Participant, or if no such executor or administrator has
been appointed, the Company, in its sole discretion, may deliver such shares (or
remaining Compensation deductions) to the Participant's spouse or to any one or
more dependents or relatives of the Participant, or to such other person or
persons as the Company may designate on behalf of the estate of such deceased
Participant.

12.      TRANSFERABILITY

         Neither Compensation deductions credited to a Participant's Account nor
any rights with regard to Plan participation or the right to purchase shares of
Common Stock under the Plan may be assigned, transferred, pledged, or otherwise
disposed of in any way by a Participant other than by will or the laws of
descent and distribution; provided, however, that shares of Common Stock
purchased on behalf of a Participant and left in his Account shall be subject to
his absolute control. Any attempted assignment, transfer, pledge, or other
disposition shall be void and without effect.

13.      AMENDMENT OR TERMINATION

         The Board may, without further action on the part of the stockholders
of the Company, at any time amend the Plan in any respect, or terminate the
Plan, except that it may not:

         (a) Permit the sale of more shares of Common Stock than are authorized
         under Section 5;

         (b) Change the class of Affiliates whose Employees are eligible to
         participate in the Plan; or

         (c) Effect a change inconsistent with Section 423 of the Code or the
         regulations issued thereunder.

14.      NOTICES

         All notices or other communications by a Participant under or in
connection with the Plan shall be deemed to have been duly given when received
in writing by the Chief Financial Officer of the Company or when received in the
form specified by the Committee at the location and by the person designated by
the Committee for the receipt thereof.

15.      LIMITATIONS

         Notwithstanding any other provisions of the Plan:

         (a) The Company intends that this Plan shall constitute an employee
         stock purchase plan within the meaning of Section 423 of the Code. Any
         provisions required to be 

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         included in the Plan under said Section, and under regulations issued
         thereunder, are hereby included as though set forth in the Plan at
         length.

         (b) No Employee shall be entitled to participate in the Plan if,
         immediately after the grant of an option hereunder, the Employee would
         own stock possessing five percent (5%) or more of the total combined
         voting power or value of all classes of stock of the Company or an
         Affiliate. For purposes of this Section 15, stock ownership shall be
         determined under the rules of Section 424(d) of the Code and stock that
         the Employee may purchase under outstanding options shall be treated as
         stock owned by the Employee.

         (c) No Employee shall be permitted to purchase Common Stock hereunder
         if his right and option to purchase Common Stock under this Plan and
         under all other employee stock purchase plans (as defined in Section
         423 of the Code) of the Company or any Affiliates would result in an
         entitlement to purchase Common Stock in any one (1) calendar year in
         excess of a fair market value of $25,000 (determined at the time of
         grant).

         (d) All Employees shall have the same rights and privileges under the
         Plan, except that the amount of Common Stock that may be purchased
         pursuant to the Plan shall bear a uniform relationship to an Employee's
         Compensation. All rules and determinations of the Committee shall be
         uniformly and consistently applied to all persons in similar
         circumstances.

         (e) Nothing in the Plan shall confer upon any Employee the right to
         continue in the employment of the Company or any Affiliate or affect
         the right that the Company or any Affiliate may have to terminate the
         employment of such Employee.

         (f) No Participant shall have any right as a stockholder unless and
         until certificates for shares of Common Stock are issued to him or
         allocated to his Account.

         (g) If under any provision of the Plan that requires a computation of
         the number of shares of Common Stock to be purchased, the number so
         computed is not a whole number of shares of Common Stock, such number
         of shares of Common Stock shall be rounded down to the next whole
         number.

         (h) The Plan is intended to provide shares of Common Stock for
         investment and not for resale. The Company does not, however, intend to
         restrict or influence any Participant in the conduct of his own
         affairs. A Participant, therefore, may sell shares of Common Stock
         purchased under the Plan at any time he chooses, subject to compliance
         with any applicable federal or state securities laws or any applicable
         Company restriction or blackout periods; provided, however, that
         because of certain federal tax requirements, each Participant shall
         agree, by entering the Plan:

             (i) promptly to give the Company notice of any shares of Common
             Stock disposed of within two (2) years after the date of grant of
             the applicable option, or within one (1) year of the Purchase Date,
             and the number of such shares disposed of (a "disqualifying
             disposition");

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             (ii) that the Company may withhold, pursuant to Code ss.ss. 3102,
             3301, and 3402, from his wages and other cash compensation paid to
             him in all payroll periods following in the same calendar year, any
             additional taxes the Company may become liable for in respect of
             amounts includable in his income as additional compensation as a
             result of a disqualifying disposition of Common Stock acquired
             under the Plan, or as a result of the acquisition of Common Stock
             under the Plan; and

             (iii) that he shall repay the Company any amount of additional
             taxes the Company may become liable for in respect of amounts
             includable in his income as additional compensation as a result of
             a disqualifying disposition of Common Stock acquired under the
             Plan, or as a result of the acquisition of Common Stock under the
             Plan, that cannot be satisfied by withholding from the wages and
             other cash compensation paid to him by the Company.


         (i) This Plan is intended to comply in all respects with applicable law
         and regulations, including with respect to Participants who are
         officers or directors for purposes of Section 16 of the Securities
         Exchange Act of 1934, as amended from time to time, Rule 16b-3 of the
         Securities and Exchange Commission. In case any one or more provisions
         of this Plan shall be held invalid, illegal, or unenforceable in any
         respect under applicable law and regulations (including Rule 16b-3),
         the validity, legality, and enforceability of the remaining provisions
         shall not in any way be affected or impaired thereby and the invalid,
         illegal, or unenforceable provision shall be deemed null and void;
         however, to the extent permitted by law, any provision that could be
         deemed null and void shall first be construed, interpreted, or revised
         retroactively to permit this Plan to be construed in compliance with
         all applicable law (including Rule 16b-3), so as to further the intent
         of this Plan. Notwithstanding anything herein to the contrary, with
         respect to Participants who are officers and directors for purposes of
         Section 16(b) of the Securities Exchange Act of 1934, as amended from
         time to time, and if required to comply with the rules promulgated
         thereunder, such Participants shall not be permitted to direct the sale
         of any Common Stock purchased hereunder until at least six (6) months
         have elapsed from the date of a purchase, unless the Committee
         determines that the sale of the Common Stock otherwise satisfies the
         then current Rule 16b-3 requirements.

16.      EFFECTIVE DATE AND APPROVALS

         The Plan shall become effective at a time when:

         (a) the Plan has been adopted by the Board; and

         (b) a registration statement on Form S-8 under the Securities Act of
         1933, as amended, has become effective with respect to the Plan; and

         (c) the Committee has notified the eligible Employees that they may
         commence participation in the Plan; and

         (d) the Plan is approved by the holders of a majority of the
         outstanding shares of Common Stock of the Company, which approval must
         occur within the period ending 

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         twelve (12) months after the date the Plan is adopted by the Board. In
         the event such stockholder approval is not obtained, the Plan shall
         terminate and have no further force or effect, and all amounts
         collected from the Participants during any initial Offering Period(s)
         hereunder shall be refunded.

Unless sooner terminated by the Board, or as set forth above, the Plan shall
terminate upon the earlier of (i) the tenth (10th) anniversary of the adoption
of the Plan by the Board, or (ii) the date on which all shares available for
issuance under the Plan shall have been sold under the Plan.

17.      APPLICABLE LAW

All questions pertaining to the validity, construction, and administration of
the Plan shall be determined in conformity with the laws of Illinois, to the
extent not inconsistent with Section 423 of the Code and the regulations
thereunder.

Adopted the 13th day of November, 1998.

 

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