<PAGE>
 
                                                                   EXHIBIT 10.23

















 
                               PINKERTON'S, INC.
                               -----------------
                                        
                      SUPPLEMENTAL RETIREMENT INCOME PLAN
                      -----------------------------------
                                        
                     AS RESTATED, EFFECTIVE JANUARY 1, 1996
                     --------------------------------------
                                        
<PAGE>
 
                               TABLE OF CONTENTS
                               -----------------
<TABLE>

     <S>                                                        <C> 
      I.  PLAN HISTORY AND FEATURES...........................   1 
                                                                   
     II.  DEFINITIONS.........................................   2 
                                                                   
          2.1       "Age".....................................   2 
                                                                   
          2.2       "Anniversary Date"........................   2 
                                                                   
          2.3       "Beneficiary".............................   2 
                                                                   
          2.4       "Benefit".................................   3 
                                                                   
          2.5       "Board"...................................   3 
                                                                   
          2.6       "Employee"................................   3 
                                                                   
          2.7       "Employer"................................   3 
                                                                   
          2.8       "Employment"..............................   3 
                                                                   
          2.9       "Final Average Monthly Compensation"......   4 
                                                                   
          2.10      "Grandfathered Benefit"...................   4 
                                                                   
          2.11      "Normal Benefit Form".....................   5 
                                                                   
          2.12      "Normal Retirement Age"...................   5 
                                                                   
          2.13      "Participant".............................   5 
                                                                   
          2.14      "Plan"....................................   5 
                                                                   
          2.15      "Plan Administrator"......................   6 
                                                                   
          2.16      "Plan Year"...............................   6 
                                                                   
          2.17      "Retirement"..............................   6 
                                                                   
          2.18      "Vested"..................................   6 
                                                                   
          2.19      "Years of Service"........................   6 
                                                                   
          2.20      "Years of Participation"..................   6  
</TABLE>
<PAGE>
 
<TABLE> 

     <S>                                                        <C>       
    III.  EMPLOYEE PARTICIPATION..............................   7 
                                                                   
          3.1  Requirements for Participation.................   7 
                                                                   
     IV.  BENEFITS............................................   8 
                                                                   
          4.1      Benefits on Retirement.....................   8 
                                                                   
          4.2      Benefit Formula............................   9 
                                                                   
          4.3      Pre-Retirement Death Benefits..............  11 
                                                                   
          4.4      Suspension of Benefits.....................  12 
                                                                   
      V.  FUNDING OF BENEFITS.................................  13 
                                                                   
          5.1      Source of Funds............................  13 
                                                                   
     VI.  VESTING.............................................  14 
                                                                   
          6.1      Vesting....................................  14 
                                                                   
          6.2      Forfeiture Events..........................  15 
                                                                   
          6.3      Vesting upon a Change of Control...........  15 
                                                                   
    VII.  ADMINISTRATION OF THE PLAN..........................  20 
                                                                   
          7.1      Duties of the Plan Administrator...........  20 
                                                                   
          7.2      Claims Procedure...........................  21 
                                                                   
          7.3      Arbitration Procedure......................  24 
                                                                   
          7.4      Effect of Plan Administrator Action........  28 
                                                                   
          7.5      Administrative Committee...................  29 
                                                                   
   VIII.  AMENDMENT AND TERMINATION OF THE PLAN...............  30 
                                                                   
          8.1      Amendment/Termination......................  30  
</TABLE>
<PAGE>
 
<TABLE>
     <S>                                                        <C>
     IX.  MISCELLANEOUS PROVISIONS............................  31

          9.1      Payments...................................  31 
                                                                   
          9.2      Termination of Employment..................  32 
                                                                   
          9.3      Alienation.................................  32 
                                                                   
          9.4      Duty to Provide Data.......................  33 
                                                                   
          9.5      Limitation on Rights of Employees..........  34 
                                                                   
          9.6      Governing Law..............................  34 
                                                                   
          9.7      Plurals....................................  35 
                                                                   
          9.8      Titles.....................................  35 
                                                                   
          9.9      References.................................  35 
                                                                   
APPENDIX I....................................................  36 
                                                                   
APPENDIX II...................................................  38 
                                                                   
SCHEDULE I ...................................................  39  
</TABLE> 
<PAGE>
 
                               PINKERTON'S, INC.
                               -----------------
                                        
                      SUPPLEMENTAL RETIREMENT INCOME PLAN
                      -----------------------------------
                                        
                     AS RESTATED, EFFECTIVE JANUARY 1, 1996
                     --------------------------------------
                                        



                                   ARTICLE I
                                   ---------
                                        
                           PLAN HISTORY AND FEATURES
                           -------------------------


     California Plant Protection adopted this Plan, effective October 1, 1987.
Pinkerton's, Inc. assumed sponsorship of this Plan when California Plant
Protection was merged into it.  The Plan was amended and restated in its
entirety as of April 26, 1990 and again as of March 29, 1991, amended in certain
particulars as of October 1, 1991 and again as of May 21, 1993, and again
amended and restated in its entirety as of May 1, 1994.  The plan was further
amended as of February 15, 1995, on May 31, 1995 (as of May 31, 1994) and as of
May 31, 1995.  In addition, with respect to four specific individuals, the
benefits of the Plan were modified in 1994 as evidenced by confidential written
agreements between these individuals and Pinkerton's, Inc.

     Effective January 1, 1996, this document restates this Plan in its
entirety.  This document shall govern all persons' rights under the Plan,
whether accrued before or after January 1, 1996.  A confidential Appendix to the
Plan sets forth the provisions of the written agreements by and between the four
specific individuals and Pinkerton's, Inc. as referenced above.

     This Plan is an unfunded retirement plan that benefits a select group of
management and highly compensated employees.

                                       1
<PAGE>
 
While the Plan is subject to the Employee Retirement Income Security Act of
1974, it is not intended to be a qualified retirement plan under applicable
provisions of the Internal Revenue Code or similar provisions of state law.


                                   ARTICLE II
                                   ----------
                                  DEFINITIONS
                                  -----------

     The following terms, when capitalized, shall have the meanings specified
below unless the context clearly indicates to the contrary.

2.1  "Age" shall mean the age of the person as of his or her last birthday.
      ---                                                                  

2.2  "Anniversary Date" shall mean the last day of the Plan Year.
      ----------------                                           

2.3  "Beneficiary" shall mean a person or entity entitled to receive benefits
      -----------                                                            
upon a Participant's death.  A Participant may designate, revoke and redesignate
a Beneficiary or Beneficiaries in a written form acceptable to the Plan
Administrator, which shall be effective upon delivery to and acceptance by the
Plan Administrator.  Spousal consent to the designation of a Beneficiary other
than the Participant's spouse is required to the extent the Participant's
Benefit would be considered community property.  When the Participant dies, his
or her Beneficiary shall be the Beneficiary or Beneficiaries properly designated
by the Participant surviving when distributions are due to commence.  If no
designated Beneficiary or Beneficiaries are then alive, the Participant's
Beneficiary shall be the Participant's surviving spouse, or, if none, the
Participant's

                                       2
<PAGE>
 
estate.  If a Beneficiary dies after receiving the first payment the Beneficiary
is due under the Plan, the remaining amounts payable to the Beneficiary shall be
paid to the Beneficiary's estate, except as the Participant may have otherwise
provided in his or her written designation of beneficiary.

2.4  "Benefit" shall mean the benefit to which the Participant in question is
      -------                                                                
then entitled under Section 4.1, provided it is Vested under Article VI.

2.5  "Board" shall mean the Board of Directors of Pinkerton's, Inc.
      -----                                                        

2.6  "Employee" shall mean an individual who renders services to the Employer as
      --------                                                                  
a common law employee or officer, as determined by the Plan Administrator.

2.7  "Employer" shall mean Pinkerton's, Inc. and any other company which adopts
      --------                                                                 
the Plan, any successor entity which continues the Plan or such companies
collectively.

2.8  "Employment" shall mean the period during which an individual is an
      ----------                                                        
Employee.  Employment with a predecessor to or affiliate of the Employer shall
be treated as Employment with the Employer, unless otherwise specified by the
Plan Administrator.  Employment shall commence on the day the individual first
performs services for the Employer as an Employee and shall terminate on the day
such services for the Employer cease, as determined under Section 9.2.  If a
Participant has more than one period of Employment, only the most recent period
of Employment shall be taken into account for any Plan purpose, except as
otherwise specified by the Plan Administrator in a written notice

                                       3
<PAGE>
 
to the Participant and except as provided in Section 4.4(a).

2.9  "Final Average Monthly Compensation" shall mean one-sixtieth of a
      ----------------------------------                              
Participant's total "earnings" (as defined below) paid (or accrued, in the case
of annual incentive plan awards) during the five year period ending on his or
her last day of Employment.  If the individual was an Employee for less than
five years, his or her "Final Average Monthly Compensation" shall mean the
Participant's total "earnings" (as defined below), paid (or accrued, in the case
of annual incentive plan awards) in his or her number of full months of
Employment dividied by such number of full months of Employment.  A
Participant's "earnings" shall mean the Participant's regular base salary and
annual incentive plan award, determined in accordance with the following special
rules:

     (a)  Except as provided in subsection (b), an Employee's earnings shall not
include severance pay, sign-on bonuses, commissions, incentive compensation
(other than annual incentive plan awards), pay in lieu of vacations,
reimbursements or other expense allowances, options, phantom stock, company car
or car allowances, employee benefits, deferred compensation, fringe benefits,
moving expenses, or payments or benefits similar to any of the foregoing.

     (b)  Notwithstanding subsection (a), a Participant's earnings shall include
amounts that would otherwise have been "earnings" under this Section if the
Participant had not made a salary reduction election under a cash or deferred,
cafeteria or similar plan of the Employer.

2.10 "Grandfathered Benefit" shall mean the dollar amount of the
      ---------------------                                     

                                       4
<PAGE>
 
monthly vested benefit to which the Participant in question was entitled as of
April 30, 1994, under the Plan as then in effect, as conclusively set forth on
Schedule I hereto.  This amount shall not increase because of subsequent
increases in Final Average Monthly Compensation or Years of Participation.  A
Participant's Grandfathered Benefit shall be payable in the Normal Benefit Form
commencing upon the later of (A) termination of Employment with the Employer, or
(B) attainment of the earlier of age fifty-five (55) or age fifty (50) and
completion of twenty (20) Years of Participation.

2.11 "Normal Benefit Form" shall mean the normal form of benefit under the Plan,
      -------------------                                                       
which shall consist of monthly payments to the Participant commencing as of the
first day of the calendar month coincident with or next following the
Participant's Retirement and ending with the payment for the calendar month in
which the Participant dies, with the provision that, if the Participant dies
before having received one hundred eighty (180) monthly payments, the
Participant's Beneficiary shall continue receiving such monthly payments until a
total of one hundred eighty (180) monthly payments have been made to either the
Participant or his or her Beneficiary.

2.12 "Normal Retirement Age" shall mean the first day of the month following the
      ---------------------                                                     
month in which the Participant reaches age sixty-two (62).

2.13 "Participant" shall mean any Employee who is included in the Plan pursuant
      -----------                                                              
to Article III and any current or former Employee who has a Vested Benefit.

2.14 "Plan" shall mean this document, including Schedule I and
      ----                                                    

                                       5
<PAGE>
 
the Appendices hereto.  The Appendices are on file in the office of the
President and Chief Executive Officer of Pinkerton's, Inc., and shall only be
made available to Participants identified in each Appendix, except as the Plan
Administrator otherwise authorizes.

2.15 "Plan Administrator" shall mean Pinkerton's, Inc., acting through the
      ------------------                                                  
Administrative Committee appointed pursuant to Section 7.5.

2.16 "Plan Year" shall mean a twelve (12) consecutive month period beginning
      ---------                                                             
January 1st and ending December 31st.

2.17 "Retirement" shall mean the commencement of benefit payments to a
      ----------                                                      
Participant in accordance with Section 4.1 on or after his or her termination of
Employment.

2.18 "Vested" shall mean that a Participant's Benefit has become nonforfeitable,
      ------                                                                    
as more fully provided in Article VI, subject to the exceptions set forth in
Section 6.2.

2.19 "Years of Service" shall mean years of Employment, pro rated to the nearest
      ----------------                                                          
1/12th year.

2.20 "Years of Participation" shall mean the Plan Years in which an Employee
      ----------------------                                                
completes twelve (12) full months as a Participant; however, for any Plan Year
in which an Employee completes less than twelve (12) full months as a
Participant, Years of Participation shall be calculated as a fraction, the
numerator of which shall be the number of full months of Participation as a
Participant during the Plan Year and the denominator of which shall be twelve
(12), subject to the following special rules:

                                       6
<PAGE>
 
     (a) If the Employee became a Participant before April 1, 1991, his or her
Years of Participation shall be determined based on the number of Years of
Service since the individual became an Employee.

     (b) In no event shall any period after a Participant ceases actively
participating in the Plan ever be taken into account in determining his or her
Years of Participation.

     (c) In the event of termination of Employment before the date upon which
his or her benefit can first commence, any fractional Year of Participation the
Participant may have shall be rounded down to the next lowest whole number.

     (d) If a Participant works to or past the date upon which his or her
Benefit can first commence, any fractional Year of Participation the Participant
may have shall be taken into account in calculating the Participant's Benefit.
Hence, for example, if the Participant has 14.25 Years of Participation, in
applying the formula in Section 4.2, 14.25 Years of Participation will be taken
into account.



                                  ARTICLE III
                                  -----------
                             EMPLOYEE PARTICIPATION
                             ----------------------

3.1  Requirements for Participation
     ------------------------------

     Only a select group of management or highly compensated employees may
participate in this Plan.  The Plan Administrator, acting with the approval of
the Board, shall determine which

                                       7
<PAGE>
 
Employees shall be Participants and when their active participation in this Plan
shall begin or end.  In order to actively participate in this Plan and begin or
continue accruing benefits under the Plan, an Employee must sign such
participation agreements as may from time to time may be prescribed by the Plan
Administrator.  If a Participant's active participation under the Plan ceases
for any reason, the amount of his or her Benefit under Section 4.1 shall be
determined as if the Participant terminated Employment on the date his or her
active participation ceased.


                                   ARTICLE IV
                                   ----------
                                    BENEFITS
                                    --------

4.1  Benefit on Retirement
     ---------------------

     (a)  A current Employee who has a Vested Benefit and who has attained age
fifty-five (55) may elect Retirement, except that, if the individual has a
Grandfathered Benefit and has not attained age fifty-five (55), he or she may
elect Retirement after attaining both age fifty (50) and completing twenty (20)
Years of Participation.  A Retirement election must be made in advance, by
written notice to the Plan Administrator in accordance with procedures it
specifies.  A former Employee shall be deemed to have retired on the earliest
date upon which he or she could have elected Retirement if still an Employee.
Commencing at Retirement, Benefits shall be paid in the Normal Benefit Form in
the amount determined under Subsection (b).

     (b) A Participant's Benefit shall be the greater of (1) the dollar amount
determined under Section 4.2 to the extent Vested,

                                       8
<PAGE>
 
reduced by .00416667 for each full calendar month (approximately five percent
(5%) per year) in which the benefit commencement date precedes the calendar
month in which the Participant attains his or her Normal Retirement Age or (2)
his or her Grandfathered Benefit.

4.2  Benefit Formula
     ---------------

     (a)  The monthly benefit of a Participant commencing at Normal Retirement
Age in the Normal Benefit Form shall be equal to two percent (2%) or three and
one-half percent (3.5%) of the Participant's Final Average Monthly Compensation
for each Year of Participation, whichever percentage the Plan Administrator,
with the consent of the Board, specifies as applying to the Participant.  A
Participant's maximum benefit under the preceding sentence shall be forty
percent (40%) of his or her Final Average Monthly Compensation if the
Participant is accruing benefits at the two percent (2%) benefit accrual rate or
fifty-two and one-half percent (52.5%) of his or her Final Average Monthly
Compensation if the Participant is accruing benefits at the three and one-half
percent (3.5%) benefit accrual rate.  The benefit determined under this
Subsection shall then be reduced by the offsets in Subsection (d).

     (b)  If the Plan Administrator changes the benefit accrual percentage
applicable to a Participant, the Participant's benefit under this Section 4.2
shall be determined by multiplying each benefit accrual percentage by the Years
of Participation completed while the benefit accrual percentage was applicable,
adding the results and then multiplying that sum by the Participant's Final
Average Monthly Compensation.  The maximum benefit limitations of Subsection (a)
shall then be applied as follows:

                                       9
<PAGE>
 
If the Participant's rate of benefit accrual is raised from two percent (2%) to
three and one-half percent (3.5%), his or her benefit under this Section shall
not thereafter exceed fifty-two percent (52%) of the Participant's Final Average
Monthly Compensation.  If the Participant's rate of benefit accrual is lowered
to two percent (2%) from three and one half percent (3.5%), his or her benefit
under this Section shall not thereafter exceed the greater of forty percent
(40%) of the Participant's Final Average Monthly Compensation or the benefit to
which the Participant would have been entitled under this Section had his or her
Employment terminated immediately before the change in accrual rates went into
effect.  Any benefit determined under this Subsection shall then be reduced by
the offsets in Subsection (d).

     (c)  See Section 3.1 for the method of determining the benefit of a
Participant whose active participation in the Plan ceases for any reason.

     (d)  A Participant's benefit under this Section shall be reduced (but not
below zero) by the actuarial equivalent of all of the following amounts (such
actuarial equivalents to be determined by an Enrolled Actuary retained by the
Plan Administrator, using the methods and assumptions that both the Plan
Administrator and the Enrolled Actuary determine to be appropriate):

          (i)  Any employer-provided pension or similar benefits (whether paid
before or after the Participant's benefit goes into pay status under this Plan)
accrued while employed for another company during periods for which the
Participant was given past service credit for benefit accrual purposes under
this Plan;

                                       10
<PAGE>
 
          (ii)  Except as otherwise provided by the Plan Administrator, the
amount of any judgment, arbitration award, settlement or similar payment the
Employer is obligated to pay the Participant on account of or related to a
dispute arising in connection with his or her termination of Employment, whether
paid before or after the Participant's Benefit goes into pay status.

4.3  Pre-Retirement Death Benefits
     -----------------------------

     If a Participant dies with a Vested Benefit before benefit payments from
the Plan commence, the Participant's Beneficiary shall be entitled to a monthly
payment for one hundred eighty (180) months.  A Participant's Benefit shall
become one hundred percent (100%) Vested if the Participant dies while still an
Employee.  The monthly amount payable to the Beneficiary shall be determined
under Subsection (a) or (b), whichever is applicable.

     (a)  If the Participant dies after his or her Benefit could have commenced
under Section 4.1, the monthly payment to the Beneficiary shall be equal in
amount to the monthly payment the Participant would have received if his or her
Benefit had commenced just before the Participant died.

     (b)  If the Participant dies before his or her Benefit could commence under
Section 4.1, the monthly payment to the Beneficiary shall be determined as
follows:  The Benefit that would have been payable to the Participant had he or
she ceased active participation in the Plan on the date of death and thereafter
commenced receiving benefits on the earliest allowable date under Section 4.1
shall be determined.  The resulting amount shall then be reduced actuarially (by
an enrolled actuary

                                       11
<PAGE>
 
selected by the Plan Administrator using the methods and assumptions that both
the Plan Administrator and the enrolled actuary determine to be appropriate) by
the cost of commencing the death benefit before the earliest date upon which the
Participant's Benefit could have commenced.

4.4  Suspension of Benefits
     ----------------------

     (a)  If a Participant's benefit has commenced and the Participant again
becomes an Employee, the Participant's benefit shall cease to be payable.
Thereafter, his or her rights under this Plan shall be determined as if he or
she had never previously commenced benefits, except that, if the Participant's
benefit had first commenced before age sixty-two (62), it shall be actuarially
reduced (but not below the dollar level previously in pay status) by the value
of all benefit payments previously made, as determined by an enrolled actuary
selected by the Plan Administrator, using the methods and assumptions that both
the Plan Administrator and the enrolled actuary determine to be appropriate.  If
a Participant dies while his or her Benefit is suspended under Subsection (a),
the pre-retirement death benefit payable under Section 4.3 shall be the Benefit
that would have been payable to the Participant, as determined in accordance
with this Section, if he or she had retired on his or her date of death, but the
one hundred eighty (180) monthly death benefit payments due under Section 4.3
shall be reduced by the number of benefit payments the Participant received
prior to his or her death.

     (b)  No amounts shall be paid under this Plan to a Participant while that
Participant is engaged in "Other Employment" as defined below, without the Plan
Administrator's

                                       12
<PAGE>
 
written consent.  A Benefit suspended under this subsection shall recommence
when the Participant's Other Employment ends.  "Other Employment" shall mean the
rendering of full or part-time services as an employee, consultant, officer or
director to any company (other than the Employer or an affiliate), but only if
such services commenced after April 30, 1994.  The Plan Administrator shall
consent to a Participant's Other Employment if the Participant furnishes
information reasonably required by the Plan Administrator and, on the basis of
that information, the Plan Administrator determines that the Other Employment
will not aid an entity which is in competition with the Employer or its
affiliates.  If the facts change, or if the Participant refuses to furnish any
additional information that the Plan Administrator requests, the Plan
Administrator may revoke a consent it has previously given.  If a Participant
dies while his or her Benefit is suspended for Other Employment under this
Subsection (b), the Participant's Beneficiary shall receive a monthly payment in
the amount the Participant was receiving prior to the suspension of his or her
Benefit until a total of one hundred eighty (180) monthly payments have been
made in the aggregate to both the Participant and his or her Beneficiary.  If a
Participant dies while engaged in Other Employment (with or without the Plan
Administrator's consent) but before his or her Benefit commences, the pre-
retirement death benefit provided for in Section 4.3 shall be payable.


                                   ARTICLE V
                                   ---------
                               FUNDING OF BENEFIT
                               ------------------

5.1  Source of Funds
     ---------------

          All benefits under this Plan shall be paid by the

                                       13
<PAGE>
 
Employer out of its general assets except to the extent the Employer establishes
other funding mechanisms.


                                   ARTICLE VI
                                   ----------
                                    VESTING
                                    -------

6.1  Vesting
     -------

          Grandfathered Benefits are one hundred percent (100%) Vested.  A
Participant's Benefit under Section 4.2 shall become one hundred percent (100%)
Vested upon completion of five (5) Years of Participation; provided that if the
                                                           --------            
Employee was a grade level 14 (or above) employee prior to becoming a
Participant, was eligible to participate in the Employer's District Managers'
Insurance Bonus Plan (the "DMIBP") as of the date he or she became a
Participant, and ceased to be eligible to participate in or accrue benefits
under the DMIBP as of the date he or she became a Participant, then, for the
sole purpose of determining when the Participant's Benefit has Vested and not
for the purpose of determining the amount of the Participant's Benefit, his or
her completion of five (5) Years of Participation shall be determined based upon
the number of months since the Employee first became both a grade level 14 (or
above) employee and eligible to participate in the DMIBP.  For the purpose of
this Section 6.1, an Employee becomes eligible to participate in the DMIBP as of
the date from which the three (3) years of service with Employer, required by
Section 3(a) of the DMIBP to enter the DMIBP, begins being counted by Employer.
Even if Vested, a Benefit shall be subject to forfeiture under Section 6.2.

                                       14
<PAGE>
 
6.2  Forfeiture Events
     -----------------

     The unvested portion of a Participant's Benefit shall be forfeited upon
termination of Employment.  In addition, a Participant's Benefit, whether or not
Vested, shall be forfeited to the extent specified by the Board, if the Board
determines that the Participant, while an Employee, committed (1) any act of
civil or criminal fraud that causes serious harm to the Employer or any
affiliate; (2) any act involving the personnel or property of the Employer or
any affiliate (or of any of their customers, clients or suppliers) which likely
constitutes a felony (whether or not the Employee is indicted or convicted of
such felony); or (3) any violation of the Employer's policies on ethical
business conduct or similar matters which causes or is likely to cause
significant harm to the Company.

6.3  Vesting upon a Change of Control
     --------------------------------

     (a)  If a "Change in Control" of the Employer occurs, as defined in
Subsection (b) below a Participant's Benefit shall become one hundred percent
(100%) Vested if, within the two (2) year period following the date of the
Change of Control, the Plan is terminated or the Participant is discharged or
laid off.

     (b)  A "Change in Control" shall be deemed to have occurred on and after
the effective date of this Plan Restatement, upon the occurrence of any of the
following events:

          (i)  the acquisition by any individual, entity or group (a "Person"),
including any "person" within the meaning of Sections 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), of
beneficial ownership within the meaning of Rule 13d-3 promulgated under the
Exchange

                                       15
<PAGE>
 
Act, of twenty percent (20%) or more of either (A) the then outstanding shares
of Common Stock of the Company (the "Outstanding Company Common Stock") or (B)
the combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that the following acquisitions
                             -----------------                                 
shall not constitute a Change in Control:  (1) any acquisition directly from the
Company (excluding any acquisition resulting from the exercise of a conversion
or exchange privilege in respect of outstanding convertible or exchangeable
securities), (2) any acquisition by the Company, (3) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, (4) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation involving the
Company, if, immediately after such reorganization, merger or consolidation,
each of the conditions described in clauses (A), (B) and (C) of subsection (iii)
of this definition shall be satisfied, (5) any purchase of Outstanding Company
Common Stock by any Person that on April 20, 1994 owned more than twenty percent
(20%) of the Outstanding Company Common Stock (a "Substantial Holder") if the
number of shares purchased, when added to all other shares of Outstanding
Company Common Stock purchased by such Substantial Holder after April 20, 1994,
is less than ten percent (10%) of the Outstanding Company Common Stock, or (6)
upon the death of a Substantial Holder, the transfer (a) by testamentary
disposition or the laws of intestate succession to the estate or the legal
beneficiaries or heirs of such Substantial Holder, or (b) by the provisions of
any living trust to the named current income beneficiaries thereof as of April
20, 1994, of Outstanding Company Common Stock beneficially owned by such
Substantial Holder at the time of his death; and

                                       16
<PAGE>
 
provided further that, for purposes of clause (2), if any Person (other than the
----------------                                                                
Company or any employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company) shall become the
beneficial owner of twenty percent (20%) or more of the Outstanding Company
Common Stock or twenty percent (20%) or more of the Outstanding Company Voting
Securities by reason of an acquisition by the Company and such Person shall,
after such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Company Common Stock or any additional
Outstanding Voting Securities and such beneficial ownership is publicly
announced, such additional beneficial ownership shall constitute a Change of
Control;

          (ii)  individuals who, as of the date following the Company's 1994
Annual Meeting of Shareholders, constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least sixty-six and two-thirds percent
(66-2/3%) of such Board; provided, however, that any individual who becomes a
                         -----------------                                   
director of the Company subsequent to such date whose election,   or nomination
for election by the Company's stockholders, was approved by the vote of at least
sixty-six and two-thirds percent (66-2/3%) of the directors then comprising the
Incumbent Board shall be deemed to have been a member of the Incumbent Board;
and provided, further, that no individual who was initially elected as a
    -----------------                                                   
director of the Company as a result of an actual or threatened election contest,
as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act, or any other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board shall be deemed to
have been a member of the Incumbent Board;

                                       17
<PAGE>
 
          (iii)  approval by the stockholders of the Company and the subsequent
completion of a reorganization, merger or consolidation unless, in any such
case, immediately after such reorganization, merger or consolidation, (A) more
than sixty percent (60%) of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation and more
than sixty percent (60%) of the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals or entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation and in substantially the same proportions relative to each other
as their ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be, (B) no Person (other than the
Company or any employee benefit plan (or related trust) sponsored or maintained
by the Company or the corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company), or any Person
which beneficially owned, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, twenty percent (20%) or more of the
Outstanding Company Common Stock or the Outstanding Company Voting Securities,
as the case may be) beneficially owned, directly or indirectly, twenty percent
(20%) or more of the then outstanding shares of common stock of such corporation
or twenty percent (20%) or more of the combined voting power of the then
outstanding securities of such corporation entitled to vote generally in the
election of directors and (C) at least sixty-six and two-thirds percent (66-
2/3%) of the members of the board of directors of the corporation

                                       18
<PAGE>
 
resulting from such reorganization, merger or consolidation where members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such reorganization, merger or consolidation; or

          (iv)  approval by the stockholders of the Company and the subsequent
completion of (A) a plan of complete liquidation or dissolution of the Company
or (B) the sale or other disposition of all or substantially all of the assets
of the Company other than to a corporation with respect to which, immediately
after such sale or other disposition, (1) more than sixty percent (60%) of the
then outstanding shares of common stock thereof and more than sixty percent
(60%) of the combined voting power of the then outstanding securities thereof
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities immediately
prior to such sale or other disposition and in substantially the same
proportions relative to each other as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (2) no Person (other
than the Company, any employee benefit plan (or related trust) sponsored or
maintained by the Company or such corporation (or any corporation controlled by
the Company) and any Person which beneficially owned, immediately prior to such
sale or other disposition, directly or indirectly, twenty percent (20%) or more
of the Outstanding Company Common Stock or the Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly,
twenty percent (20%) or more of the then

                                       19
<PAGE>
 
outstanding shares of common stock thereof or twenty percent (20%) or more of
the combined voting power of the then outstanding securities thereof entitled to
vote generally in the election of directors and (3) at least sixty-six and two-
thirds percent (66-2/3%) of the members of the board of directors thereof were
members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale or other disposition.


                                  ARTICLE VII
                                  -----------
                           ADMINISTRATION OF THE PLAN
                           --------------------------

7.1  Duties of the Plan Administrator
     --------------------------------

     The Plan Administrator shall be responsible for the general administration
and management of the Plan.  The Plan Administrator shall have all powers and
duties necessary to fulfill its responsibilities, including, but not limited to,
the following powers and duties:

     (a)  To interpret the Plan as it, in its discretion, determines to be
appropriate;

     (b)  To determine all questions relating to the right of any person to
receive benefits;

     (c)  To determine the amount and kind of benefits payable to Participants
and their Beneficiaries;

     (d)  To administer the claims procedure set forth in Section 7.2;

                                       20
<PAGE>
 
     (e)  To exercise all other powers or duties granted to the Plan
Administrator by other provisions of the Plan;

     (f)  To provide the Board with recommendations as to which Employees should
participate in the Plan and the benefit accrual rates that should apply to them;
and

     (g)  To recommend to the Board any amendments to the Plan which the Plan
Administrator determines to be appropriate or necessary.

7.2  Claims Procedure
     ----------------

     (a)  Normally, a Participant or Beneficiary need not present a formal claim
in order to qualify for rights or benefits under this Plan.  However, if any
such person (a "Claimant") does not believe that he or she will receive the
benefits to which the person is entitled or believes that the Plan is not being
operated properly or that his or her legal rights have been or are being
violated with respect to the Plan, the Claimant must file a formal claim under
the procedures set forth in this Section.  A formal claim must be filed within
six (6) months of the date upon which the Claimant (or his or her predecessor in
interest) first knew (or should have known) of the facts upon which the claim is
based, unless the Plan Administrator, in writing, consents otherwise.  The
procedures in this Section shall apply to all claims that any person has with
respect to the Plan.

     (b)  A claim by any person shall be presented to the Plan Administrator in
writing.  A claims official appointed by the Plan Administrator shall, within
ninety (90) days of

                                       21
<PAGE>
 
receiving the claim, consider the claim and issue his or her determination
thereon in writing to the Claimant, his or her representative and the Plan
Administrator.  The claims official may extend the determination period for up
to an additional ninety (90) days by giving the Claimant written notice.  With
the written consent of the Claimant, the determination period can be extended
further.  If the claim is granted, the benefits or relief the Claimant seeks
will be provided.

     (c)  If the claim is wholly or partially denied, the claims official shall,
within ninety (90) days (or such longer period as described above), provide the
Claimant with written notice of the denial, setting forth, in a manner
calculated to be understood by the Claimant,

          (i)  the specific reason or reasons for the denial;

          (ii)  specific references to pertinent Plan provisions on which the
denial is based;

          (iii)  a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation of why the
material or information is necessary, and

          (iv)  an explanation of the Plan's claim review procedure.

If the claims official fails to respond to the claim in a timely manner, the
Claimant may treat the claim as having been denied by the claims official.

     (d)  Each Claimant shall have the opportunity to appeal in

                                       22
<PAGE>
 
writing the claims official's denial of a claim to a review official designated
by the Plan Administrator (which may be a person, a committee or the Plan
Administrator) for a full and fair review.  A Claimant must request review of a
denied claim within sixty (60) days after receipt by the Claimant of written
notice of denial of his or her claim or within sixty (60) days after such
written notice was due, if the written notice was not sent.  In connection with
the review proceeding, the Claimant or his or her duly authorized representative
may review pertinent documents and may submit issues and comments in writing.
The Claimant may only present evidence and theories during the review which the
Claimant presented during the claims procedure, except for information which the
claims official requested the Claimant to provide to perfect the claim (See
Subsection (c)(iii)).  Any claims which the Claimant does not in good faith
pursue through the review stage of the procedure shall be treated as having been
irrevocably waived.

     (e)  The Plan Administrator may adopt procedures pursuant to which claims
shall be reviewed and may, in its discretion, adopt different procedures for
different claims without being bound by past actions.  Any procedures adopted,
however, shall be designed to afford a Claimant a full and fair review of his or
her claim.

     (f)  The decision by the review official upon review of a claim shall be
made not later than sixty (60) days after the written request for review is
received by the Plan Administrator, unless special circumstances require an
extension of time for processing, in which case a decision shall be rendered as
soon as possible, but not later than one hundred twenty (120) days after receipt
of the request for review, unless the Claimant agrees to a greater extension of
that deadline.

                                       23
<PAGE>
 
     (g)  The decision on review shall be in writing and shall include specific
reasons for the decision written in a manner calculated to be understood by the
Claimant, with specific references to the pertinent Plan provisions on which the
decision is based.

     (h)  If a Claimant pursued his or her claim through the review stage of the
claims procedure and the claim was denied (or the review official failed to
decide the claim on a timely basis, in which case it shall be deemed denied),
the Claimant will be permitted to appeal the denial by arbitration pursuant to
Section 7.3 of the Plan.  In no event shall any claim to which this procedure
applies be subject to resolution by any means (such as in a court of law) other
than by this claims procedure or arbitration under Section 7.3.

     (i)  This Section shall apply to a claim notwithstanding any failure by the
Plan Administrator or his delegates to follow the procedures in this Section
with respect to the claim.  However, an arbitrator reviewing such a claim may
permit a Claimant to present additional evidence or theories if the arbitrator
determines that the Claimant was precluded from presenting them during the claim
and review procedures due to procedural errors of the Plan Administrator or its
delegates.

7.3  Arbitration Procedure
     ---------------------

     (a)  If a Claimant's appeal is denied, his or her sole remaining remedy
shall be to appeal the matter to an impartial arbitrator.  Arbitration shall be
in accordance with the

                                       24
<PAGE>
 
Employment Dispute Resolutions Rules of the American Arbitration Association
(the "AAA") before an arbitrator who is familiar with employee benefit matters
and who is licensed to practice law in the State in which the arbitration is
convened (the "Arbitrator"). The Arbitrator shall be selected in the following
manner from a list of eleven (11) arbitrators drawn by the AAA from its panel of
labor and employment arbitrators: Each party shall designate all arbitrators on
the list whom they find acceptable; the Arbitrator shall be chosen by alternate
striking from the list of arbitrators acceptable to both parties, with the party
who did not initiate the arbitration striking first. If only one arbitrator is
acceptable to both parties, he or she shall be the Arbitrator. If none of the
arbitrators are acceptable to both parties, a new panel of arbitrators shall be
obtained from the AAA and the selection process shall recommence. The
arbitration shall take place in or near the city in which the Claimant is or was
last employed by the Employer, or, in which the Plan is principally
administered, whichever is specified by the Plan Administrator, or in such other
location as may be acceptable to both the Claimant and the Plan Administrator.
The Arbitrator shall apply federal law. The Arbitrator shall have the exclusive
authority to resolve any factual or legal claim relating to the Plan or relating
to the interpretation, applicability or enforceability of this arbitration
provision, including, but not limited to, any claim that all or any part of this
provision is void or voidable. The arbitration shall be final and binding upon
all parties.

     (b)  The Claimant must submit a request for arbitration to the Plan
Administrator within sixty (60) days of receipt of the written denial of his or
her appeal (or within sixty (60) days of the date he or she should have received
that determination).

                                       25
<PAGE>
 
     (c)  The Claimant and the Plan shall equally share the fees and costs of
the Arbitrator.  Each party shall pay its own costs and attorneys' fees, if any.
The Arbitrator, in his or her discretion, may award reasonable attorneys' fees
to the prevailing party.

     (d)  The Claimant must deposit with the Plan Administrator one-half (1/2)
of the anticipated fees and costs of the Arbitrator, as reasonably determined by
the Plan Administrator before the arbitration.  At least two (2) weeks before
delivering his or her decision, the Arbitrator shall send his or her final bill
for fees and costs to the Plan Administrator for payment.  The Plan
Administrator shall apply the amount deposited by the Claimant to pay the
Claimant's share of the Arbitrator's fees and costs and shall return any surplus
deposit after all fees and costs have been billed by the Arbitrator.  If
Claimant's deposit is exhausted, Claimant shall be billed for any remaining fees
and costs Claimant owes.  Failure to pay any amount or deposit any amount within
seven (7) days after the Claimant has actual knowledge of the bill shall
constitute the Claimant's irrevocable election to withdraw Claimant's
arbitration request and abandon his or her claim.

     (e)  At least thirty (30) days before the arbitration hearing, the parties
must exchange lists of witnesses, including any expert witness, and copies of
all exhibits intended to be used at the hearing.  The Claimant may not present
any evidence, facts, arguments or theories at the arbitration which were not
pursued in the appeal, except pursuant to Section 7.2(i) or in response to new
evidence, facts, arguments or theories presented on behalf of the Plan.

                                       26
<PAGE>
 
     (f)  The Plan Administrator shall submit to the Arbitrator a certified copy
of the record upon which the review official's decision was made.  The
Arbitrator may grant the Claimant's appeal, in whole or in part, only if the
Arbitrator determines that its grant is justified because (1) the review
official was in error upon an issue of law, (2) the review official acted
arbitrarily or capriciously in denying the appeal, or (3) the review official's
findings of fact, if applicable, were not supported by substantial evidence.

     (g)  The Arbitrator shall have jurisdiction to hear and rule on pre-hearing
disputes and is authorized to hold pre-hearing conferences by telephone or in
person as the Arbitrator deems necessary.  The Arbitrator shall apply the
Federal Rules of Evidence and shall have the authority to entertain a motion to
dismiss or a motion for summary judgment by any party and shall apply the
standards governing such motions under the Federal Rules of Civil Procedure.
The Arbitrator shall render an award and opinion in the form typically rendered
in labor arbitrations.  The results of the arbitration, unless otherwise agreed
to by the parties or ordered by the Arbitrator on motion, shall not be
confidential and may be reported by any news agency or legal publisher or
service.

     (h)  Either party may (1) designate one expert witness, (2) take the
deposition of one individual and the other party's expert witness, (3) propound
requests for production of documents to any party, (4) subpoena witnesses and
documents for the arbitration, but only as to the discovery permitted in this
paragraph (or any additional discovery permitted by the Arbitrator on a showing
of substantial need), (5) arrange for a court reporter to provide a stenographic
record of the

                                       27
<PAGE>
 
proceedings at the party's own cost (6) upon request at the close of the
hearing, be given leave to file a post-hearing brief within the time limit
established by the Arbitrator and (7) bring an action in any court of
appropriate jurisdiction to compel arbitration under this provision and to
enforce an arbitration award.

     (i)  If any part of these arbitration procedures are void and
unenforceable, in whole or in part, that shall not affect the validity of the
remainder of the procedures.

     (j)  No party has the right to sue in any federal or state court with
respect to any matter to which the Plan's claim or arbitration procedure
applies, except as provided in Subsection (h).

     (k)  To be entitled to any benefit under this Plan, the Claimant must agree
to these arbitration provisions, which agreement shall be presumed unless the
Claimant asserts otherwise, in which case the Claimant shall not be entitled to
any benefits under the Plan.

7.4  Effect of Plan Administrator Action
     -----------------------------------

     The Plan shall be interpreted by the Plan Administrator and all its
delegates and agents in accordance with the terms of the Plan and their intended
meanings, but interpretations of the Plan document, as in effect prior to
January 1, 1996, shall not be thereafter applicable and such prior
interpretations shall not be used in any arbitration or other legal proceeding.
The Plan Administrator and all its delegates or agents shall have the discretion
to make any findings of fact needed in the administration of the Plan, and shall
have the discretion to

                                       28
<PAGE>
 
interpret or construe ambiguous, unclear or implied (but omitted) terms in any
fashion they deem to be appropriate in their sole judgment.  The validity of any
such finding of fact, interpretation, construction or decision shall not be
given de novo review if challenged in court, by arbitration or in any other
      -------                                                              
forum, and shall be upheld unless clearly arbitrary or capricious.  To the
extent the Plan Administrator or its delegate or agent has been granted
discretionary authority under the Plan, the Plan Administrator's or such
delegate's or agent's prior exercise of such authority shall not obligate it to
exercise its authority in a like fashion thereafter.  If, due to errors in
drafting, any Plan provision does not accurately reflect its intended meaning,
as demonstrated by consistent interpretations or other evidence of intent, or as
determined by the Plan Administrator in its sole and exclusive judgment, the
provision shall be considered ambiguous and shall be interpreted by the Plan
Administrator and its delegates and agents in a fashion consistent with its
intent, as determined by the Plan Administrator in its reasonable discretion.
The Plan may be amended retroactively to cure any such ambiguity.  This Section
may not be invoked by any person to require the Plan to be interpreted in a
manner which is inconsistent with its interpretation by the Plan Administrator.
All actions taken and all determinations made in good faith by the Plan
Administrator or its delegates and agents shall be final and binding upon all
persons claiming any interest in or under the Plan.

7.5  Administrative Committee
     ------------------------

     (a)  The Plan Administrator is Pinkerton's, Inc., acting through the
Administrative Committee that serves pursuant to this Section.

                                       29
<PAGE>
 
     (b)  The Administrative Committee shall consist of those members of the
Board who then serve on the Board's Compensation Committee, augmented by one
officer of Pinkerton's, Inc., appointed by, and serving at the pleasure of the
Compensation Committee and who shall have no voting rights.

     (c)  Any action of the Administrative Committee shall be taken pursuant to
a majority vote of a quorum of its members or its full membership.  Any action
of the Administrative Committee may also be taken pursuant to the written
consent of a majority of its members and their action shall constitute the
action of the Administrative Committee and be as binding as if all members had
joined in the action.  A quorum of the Administrative Committee shall consist of
a majority of its members.  The secretary of the Administrative Committee may
execute any certificate or other written direction on behalf of the
Administrative Committee.

     (d)  A member of the Administrative Committee shall not vote or act upon
any matter which specifically relates to such person as a Participant or in
which the member has an interest which may affect such member's best judgment.


                                  ARTICLE VIII
                                  ------------
                     AMENDMENT AND TERMINATION OF THE PLAN
                     -------------------------------------

8.1  Amendment/Termination
     ---------------------

     (a)  The Board reserves the right, in its nonfiduciary settlor capacity, at
any time to amend or terminate the Plan prospectively or retroactively (by a
formal, written and explicit

                                       30
<PAGE>
 
instrument), but not in a way which would reduce any Vested Benefit's present
value (as determined by an Enrolled Actuary selected by the Plan Administrator
using the methods and assumptions that both the Plan Administrator and Enrolled
Actuary determine to be appropriate).  For example, the Board could at any time
terminate the Plan, and in connection with that termination, satisfy all benefit
obligations by causing the Employer to pay each Participant or Beneficiary the
lump sum present value of his or her Vested Benefit.

     (b)  No Plan amendment, unless it expressly provides otherwise, shall be
applied retroactively to increase the Benefit or Vested percentage of a former
Participant whose Employment terminated before the date the amendment became
effective.  However, in every other respect, all rights under the Plan shall be
determined under the terms of the Plan as in effect at the time the
determination is made.


                                   ARTICLE IX
                                   ----------
                            MISCELLANEOUS PROVISIONS
                            ------------------------

9.1  Payments
     --------

     (a)  In the event any amount becomes payable under the Plan to a minor or a
person who, in the sole judgment of the Plan Administrator, is considered to be
unable to give a valid receipt for the payment by reason of physical or mental
condition, the Plan Administrator may direct that payment be made to any person
found by the Plan Administrator, in its sole judgement, to have assumed the care
of the person in question.  Any payment made pursuant to such a finding shall
constitute payment by the Plan

                                       31
<PAGE>
 
and result in a full release and discharge of the Plan Administrator, the
Employer and their officers, directors, employees, agents, owners and
representatives.

     (b)  Payment of benefits to the person entitled thereto may be sent by
first class mail, address correction requested, to the last known address on
file with the Plan Administrator.  If, within six (6) months from the date of
issuance of the payment, the payment letter cannot be delivered to the person
entitled thereto or the payment has not been negotiated, the payment shall be
treated as forfeited.

     (c)  Taxes shall be withheld from each payment made under the Plan to the
extent required by applicable law.

9.2  Termination of Employment
     -------------------------

     A person's Employment shall terminate upon the first to occur of his or her
resignation from or discharge by the Employer or his or her death or Retirement.
A person's Employment shall not terminate on account of an authorized leave of
absence, sick leave or vacation, or on account of a military leave or a direct
transfer between Employers.  However, failure to return to work upon expiration
of any leave of absence, sick leave or vacation or within the time period
allowed under applicable personnel policies of the Employer shall be considered
a resignation effective as of the expiration of such leave of absence, sick
leave or vacation.

9.3  Alienation
     ----------

     The rights of a Participant or Beneficiary under the Plan

                                       32
<PAGE>
 
shall not be subject to any claim or any creditor nor to attachment or
garnishment or other legal process by any creditor.  A Participant or
Beneficiary shall not have the right to alienate, anticipate, commute, pledge,
encumber or assign any of the benefits or payments or proceeds which the
individual may expect to receive, contingently or otherwise, under the Plan.
The provision of this Section shall not preclude any assignment or alienation
expressly permitted under applicable pension plan law or other provisions of the
Plan.

9.4  Duty to Provide Data
     --------------------

     (a)  Every person with an interest in the Plan or claiming benefits under
the Plan shall furnish the Plan Administrator on a timely and accurate basis
with such documents, evidence or information as it considers necessary or
desirable for the purpose of administering the Plan.  This includes completing
insurance applications and submitting to medical examinations, if required by
the Plan Administrator.  The Plan Administrator may deny the accrual or benefits
or postpone the payment of benefits (without accrual of interest) until such
information and such documents have been furnished.

     (b)  Every person claiming a benefit under this Plan shall give written
notice to the Plan Administrator of his or her postal address and each change of
postal address.  Any communication, statement or notice addressed to such a
person at his or her latest post office address as filed with the Plan
Administrator will, on deposit in the United States mail with postage prepaid,
be as binding upon such person for all purposes of the Plan as if it had been
received, whether actually received or not.  If a person fails to give notice of
his or her correct

                                       33
<PAGE>
 
address, the Plan Administrator, the Employer and the delegates and agents shall
not be obliged to search for, or to ascertain, his or her whereabouts.

9.5  Limitation on Rights of Employees
     ---------------------------------

     The Plan is strictly a voluntary undertaking on the part of the Employer
and shall not constitute a contract between the Employer and any Employee, or
consideration for, or an inducement or condition of, the employment of any
Employee.  Except as otherwise required by statute, nothing contained in the
Plan shall give any Employee the right to be retained in the service of the
Employer or to interfere with or restrict the right of the Employer, which is
hereby expressly reserved, to discharge or retire any Employee at any time for
any reason not prohibited by statute, without the Employer being required to
show cause for the termination.  Except as otherwise required by statute,
inclusion under the Plan will not give any Employee any right or claim to any
benefit hereunder except to the extent such right has specifically become fixed
under the terms of the Plan.  The doctrine of substantial performance shall have
no application to Employees, Participants, or Beneficiaries.  Each condition and
provision including numerical items, has been carefully considered and
constitutes the minimum limit on performance which will give rise to the
applicable right.

9.6  Governing Law
     -------------

     The Plan shall be interpreted, administered and enforced in accordance with
federal law.  To the extent that state law is applicable, however, the laws of
the State of California shall apply.

                                       34
<PAGE>
 
9.7. Plurals
     -------

     Where the context so indicates, the singular shall include the plural and
vice versa.

9.8  Titles
     ------

     Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.

9.9  References
     ----------

     Unless the context clearly indicates to the contrary, a reference to a Plan
provision, statute, regulation or document shall be construed as referred to any
subsequently enacted, adopted or executed counterpart.

Executed at Encino, California as of the   1st   day of
                                        ---------
January           199 6  
-----------------    ----.

                         PINKERTON'S, INC.


                         By: /s/ Thomas W. Wathen                 
                            ----------------------------------
                            Chairman of the Board of Directors



                         By: /s/ Denis R. Brown                 
                            -------------------------------------
                            President and Chief Executive Officer

                                       35
<PAGE>
 
                                   APPENDIX I
                                   ----------

          This Appendix sets forth special provisions that relate to the
individuals identified below, notwithstanding anything in the Plan to the
contrary:

Provisions Relating to Denis R. Brown
-------------------------------------

1.   Mr. Brown's Benefit under Section 4.1 shall be Fifty-Two and one/half
     percent (52.5%) of his Final Average Monthly Compensation, which shall be
     determined solely on the basis of his "Executive's Base Salary" and his
     "Incentive Compensation", as such terms are defined in his Employment
     Agreement dated April 20, 1994. In determining Mr. Brown's Final Average
     Monthly Compensation, Incentive Compensation shall be taken into account as
     if paid on the last day of the Pinkerton's, Inc. fiscal year in which it
     accrued and only to the extent it does not exceed one-half of the
     Executive's Base Salary paid to Mr. Brown during that fiscal year.

2.   Notwithstanding Section 6.1, Mr. Brown's Benefit under the Plan shall vest
     as follows, so long as Mr. Brown remains an Employee:

<TABLE> 
<CAPTION> 

          Date                      Vested Percentage
          ----                      -----------------
          <S>                       <C> 
          April 19, 1999            20%
          August 7, 1999            46.667%
          August 7, 2000            73.334%
          August 7, 2001            100%
</TABLE> 

3.   In applying Section 4.3 (relating to pre-retirement death benefits) with
     respect to Mr. Brown, paragraph 1 of this Appendix shall be applied as if
     Mr. Brown's Benefit were thirty-five percent (35%) of his Final Average
     Monthly Compensation

4.   Wherever the term "Change of Control" appears in the Plan, when applied to
     Mr. Brown, the definition of "Change of Control" in Section 3.01 of Mr.
     Brown's employment agreement with Pinkerton's, Inc. dated as of April 20,
     1994, shall be used.

Provisions Relating to Thomas W. Wathen
---------------------------------------

1.   Mr. Wathen's Benefit under Section 4.1 of the Plan shall be $25,000 per
     month commencing on the first day of the calendar month following the date
     he ceases to be the President and Chief Executive Officer and an employee
     of Pinkerton's, Inc.

                                       36
<PAGE>
 
2.   Mr. Wathen's Benefit shall be one hundred percent (100%) under Section 6.1,
     except that Mr. Wathen's Benefit shall be forfeited under the circumstances
     set forth in Sections 8.01(c) and 9.01 of his Personal Services Agreement
     with the Company, as in effect on May 1, 1994.

Provisions relating to C. Michael Carter
----------------------------------------

1.   Commencing on September 27, 1999 (i.e., the fifth anniversary of the
                                       ---                               
     effective date of Mr. Carter's participation in the Plan), Mr. Carter shall
     be deemed, for purposes of calculating benefits under the Plan, to have
     completed 1.8 Years of Participation for each year or partial year during
     which he is a Participant in the Plan following September 27, 1999.  As a
     result of the foregoing, following September 27, 1999, Mr. Carter's
     effective accrual rate under the Plan shall be 6.3 percent.

2.   Section 4.3 of the Plan (relating to pre-retirement death benefits) shall
     be applied as if Mr. Carter's Benefit were thirty-five percent (35%) of his
     Final Average Monthly Compensation.

3.   Wherever the term "Change of Control" appears in the Plan, when applied to
     Mr. Carter, the definition of "Change of Control" in Appendix B to Mr.
                                                          ----------       
     Carter's employment agreement with Pinkerton's, Inc. dated December 9,
     1994, shall be used.

Provisions relating to James P. McCloskey
-----------------------------------------

1.   Commencing on October 4, 1999 (i.e., the fifth anniversary of the effective
                                    ----                                        
     date of Mr. McCloskey's participation in the Plan), Mr. McCloskey shall be
     deemed, for purposes of calculating benefits under the Plan, to have
     completed 2.96 Years of Participation for each year or partial year during
     which he is a Participant in the Plan following October 4, 1999.  As a
     result of the foregoing, following October 4, 1999, Mr. McCloskey's
     effective accrual rate under the Plan shall be 10.35 percent.

2.   Section 4.3 of the Plan (relating to pre-retirement death benefits) shall
     be applied as if Mr. McCloskey's Benefit were thirty-five percent (35%) of
     his Final Average Monthly Compensation.

3.   Wherever the term "Change of Control" appears in the Plan, when applied to
     Mr. McCloskey, the definition of "Change of Control" in Appendix B to Mr.
                                                             ----------       
     McCloskey's employment agreement with Pinkerton's, Inc. dated December 9,
     1994, shall be used.

                                   Appendix I Approved by the Board of Directors
                                                            on December 11, 1996

                                       37
<PAGE>
 
                                  APPENDIX II
                                  -----------
                                        

          This Appendix sets forth special provisions that relate to the
individual identified below, notwithstanding anything in the Plan to the
contrary:

Provision relating to Don W. Walker
-----------------------------------

1.   Commencing on January 13, 1997 (i.e., the fifth anniversary of the
                                     ----                              
     effective date of Mr. Walker's participation in the Plan), Mr. Walker's
     Benefit shall be as follows:

<TABLE> 
<CAPTION> 

          Date                      Benefit
          ----                      -------
          <S>                       <C>           
          January 13, 1997          26.250%
          January 13, 1998          30.625%
          January 13, 1999          35.000%
          January 13, 2000          39.375%
          January 13, 2001          43.700%
          January 13, 2002          48.125%
          January 13, 2003          52.500% 
</TABLE> 


                                  Appendix II Approved by the Board of Directors
                                                         as of December 11, 1996

                                       38
<PAGE>
 
                                   SCHEDULE I
                                   ----------
                             GRANDFATHERED BENEFITS
                             ----------------------
<TABLE>
<CAPTION>
 
Current or Former                              Annual
Employee                                       Grandfathered Benefit
--------                                       ---------------------
<S>                                            <C>
Gerard Brown                                   $51,295
George C. Davis                                $35,128
Maurice Dispennett                             $34,018
Bruce Menzies                                  $31,236
Kevin B. O'Connor                              $30,599
Peter C. Sawyers                               $     0
Billy L. Stephens                              $71,636 
</TABLE> 

                                       39