Document:

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                                                                  Exhibit 10(vv)

                        CLEVELAND-CLIFFS INC NONEMPLOYEE
                          DIRECTORS' COMPENSATION PLAN

         The Cleveland-Cliffs Inc Nonemployee Directors' Compensation Plan
("Plan") is effective as of July 1, 1996, subject to approval of shareholders at
the 1996 annual meeting.

                             ARTICLE I. DEFINITIONS

         Whenever the following terms are used in this Plan they shall have the
meanings specified below unless the context clearly indicates to the contrary:

          (a) "Account": A Deferred Fee Account and/or a Deferred Share Account,
     as the context may require.

          (b) "Accounting Date": December 31 of each year and the last day of
     each calendar quarter.

          (c) "Accounting Period": The quarterly period beginning on the date
     immediately following an Accounting Date and ending the next following
     Accounting Date.

          (d) "Administrator": The Board Affairs Committee of the Board or any
     successor committee designated by the Board.

          (e) "Beneficiary": The person or persons (natural or otherwise)
     designated pursuant to Section 7.7.

          (f) "Board": The Board of Directors of the Company.

          (g) "Change of Control": The meaning set forth in Section 3.1(b).

          (h) "Code": The Internal Revenue Code of 1986, as amended.

          (i) "Company": Cleveland-Cliffs Inc or any successor or successors
     thereto.

          (j) "Declared Rate": The Moody's Corporate Average Bond Yield as
     adjusted on the first business day of January, April, July and October or
     such other rate as the Administrator shall determine from time to time.

          (k) "Deferral Commitment": An agreement made by a Director in a
     Participation Agreement to have all or a specified portion of his or her
     Fees, Required Retainer Shares and/or Voluntary Shares deferred under the
     Plan for a specified period in the future.

          (l) "Deferral Period": The Plan Year for which a Director has elected
     to defer all or a portion of his or her Fees, Required Retainer Shares
     and/or Voluntary Shares.

          (m) "Deferred Fees": The Fees credited to a Director's Deferred Fee
     Account pursuant to Articles IV and V and payable to a Director pursuant to
     Article VII.

          (n) "Deferred Fee Account": The account maintained on the books of the
     Company for each Director pursuant to Article V.

          (o) "Deferred Shares": The Required Retainer Shares and Voluntary
     Shares credited to a Director's Deferred Share Account pursuant to Articles
     IV and VI and payable to a Director pursuant to Article VII.

          (p) "Deferred Share Account": The account maintained on the books of
     the Company for each Director pursuant to Article VI.

          (q) "Director": An individual duly elected or chosen as a Director of
     the Company who is not also an employee of the Company or any of its
     subsidiaries.
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          (r) "Fair Market Value": With respect to a Share, the last reported
     closing price for a Share on the New York Stock Exchange (or any
     appropriate over-the-counter market if the Shares are no longer listed on
     such Exchange) for a day specified herein for which such fair market value
     is to be calculated, or if there was no sale of Shares so reported for such
     day, on the most recently preceding day on which there was such a sale.

          (s) "Fees": The portion of the annual Retainer and other Director
     compensation payable in cash.

          (t) "Participation Agreement": The agreement submitted by a Director
     to the Administrator in which a Director may specify an amount of Voluntary
     Shares, or may elect to defer receipt of all or any portion of his or her
     Fees, Required Retainer Shares and/or Voluntary Shares for a specified
     period in the future.

          (u) "Plan": The Plan set forth in this instrument as it may from time
     to time be amended.

          (v) "Plan Year": The 12-month period beginning January 1 and ending
     December 31.

          (w) "Prior Plan": The Company's existing Plan for Deferred Payment of
     Directors' Fees originally adopted in 1981.

          (x) "Restricted Shares": Shares automatically awarded pursuant to
     Section 3.1 as to which neither the substantial risk of forfeiture nor the
     restrictions on transfer referred to in Section 3.1 hereof have expired.

          (y) "Retainer": The portion of a Director's annual compensation that
     is payable without regard to number of Board or committee meetings attended
     or committee positions.

          (z) "Required Retainer Shares": An amount, payable in Shares,
     constituting 50% of a Director's Retainer.

          (aa) "Rule 16b-3": Rule 16b-3 promulgated under the Securities
     Exchange Act of 1934 (or any successor rule to the same effect), as in
     effect from time to time.

          (bb) "Settlement Date": The date on which a Director terminates as a
     Director. Settlement Date shall also include with respect to any Deferral
     Period the date prior to the date of termination as a Director selected by
     a Director in a Participation Agreement for distribution of all or a
     portion of the Fees, Required Retainer Shares and Voluntary Shares deferred
     during such Deferral Period as provided in Section 7.3.

          (cc) "Shares": The Company's fully paid, non-assessable Common
     Shares, par value $1.00 per share. Shares may be shares of original
     issuance or treasury shares or a combination of the foregoing.

          (dd) "Voluntary Shares": The meaning set forth in Section 3.2(b).

                               ARTICLE II. PURPOSE

         The purpose of this Plan is to provide for the award of Restricted
Shares to Directors and for the payment to Directors of at least one-half of the
Retainer earned by them for services as Directors in Shares in order to further
align the interests of Directors with the shareholders of the Company and
thereby promote the long-term success and growth of the Company. In addition,
the Plan is intended to provide Directors with opportunities to invest
additional amounts of their compensation payable for services as a Director in
Shares and defer receipt of any or all of such compensation, other than
Restricted Shares.

ARTICLE III.        RESTRICTED SHARES, REQUIRED RETAINER SHARES
                    AND VOLUNTARY SHARES

            3.1      AUTOMATIC AWARDS OF RESTRICTED SHARES.

              (a) Restricted Shares shall be automatically awarded to Directors
     as follows:

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                  (i) Each individual who is first elected or appointed to the
     Board as a Director after June 30, 1995 and before July 1, 1996 shall
     be awarded 1,000 Restricted Shares on July 1, 1996.

                  (ii) Each individual who is first elected or appointed to the
     Board as a Director on or after July 1, 1996 shall be awarded 1,000
     Restricted Shares on July 1 of the following year.

              (b) The Restricted Shares may not be assigned, exchanged, pledged,
     sold, transferred or otherwise disposed of by a Director, except to the
     Company, and shall be subject to forfeiture as herein provided until the
     earliest to occur of the following ("Vesting Event"): (a) the fifth
     anniversary of the date of award; (b) a Change of Control (as defined
     below); or (c) death or permanent disability. Any purported transfer in
     violation of the provisions of this paragraph shall be null and void, and
     the purported transferee shall obtain no rights with respect to such
     Restricted Shares. For purposes of this Section 3.1, "Change of Control"
     shall mean the occurrence of any of the following events:

                  (i) The Company shall merge into itself, or be merged or
         consolidated with, another corporation and as a result of such merger
         or consolidation less than 70% of the outstanding voting securities of
         the surviving or resulting corporation shall be owned in the aggregate
         by the former shareholders of the Company as the same shall have
         existed immediately prior to such merger or consolidation;

                  (ii) The Company shall sell or otherwise transfer all or
         substantially all of its assets to any other corporation or other legal
         person, and immediately after such sale or transfer less than 70% of
         the combined voting power of the outstanding voting securities of such
         corporation or person is held in the aggregate by the former
         shareholders of the Company as the same shall have existed immediately
         prior to such sale or transfer;

                  (iii) A person, within the meaning of Section 3(a)(9) or of
         Section 13(d)(3) (as in effect on the date hereof) of the Securities
         Exchange Act of 1934, shall become the beneficial owner (as defined in
         Rule 13d-3 of the Securities and Exchange Commission pursuant to the
         Securities and Exchange Act of 1934) of 30% or more of the outstanding
         voting securities of the Company (whether directly or indirectly); or

                  (iv) During any period of three consecutive years, individuals
         who at the beginning of any such period constitute the Board of
         Directors of the Company cease, for any reason, to constitute at least
         a majority thereof, unless the election, or the nomination for election
         by the shareholders of the Company, of each Director first elected
         during any such period was approved by a vote of at least one-third of
         the Directors of the Company who are Directors of the Company on the
         date of the beginning of any such period.

              (c) All of the Restricted Shares shall be forfeited by a Director
     who is terminated before a Vesting Event; PROVIDED, HOWEVER, if service as
     a Director is terminated by the Company owing to removal as a Director
     without cause before the fifth anniversary of the date of an award, a
     portion of the Restricted Shares covered by such award that then remain
     forfeitable shall become freely transferable and nonforfeitable as follows:
     that number of Restricted Shares shall become freely transferable and
     nonforfeitable which bears the same ratio to the total number of Restricted
     Shares subject to such award that then remain forfeitable and would have
     become forfeitable at the Vesting Date as the number of full months from
     the date of award to the date of termination of such service bears to 60,
     and the balance of the Restricted Shares subject to such award shall be
     forfeited to the Company.

              (d) Unless otherwise directed by the Administrator, all
     certificates representing Restricted Shares shall be held in custody by the
     Company until the occurrence of a Vesting Event. As a condition to each
     award of Restricted Shares, unless otherwise determined by the
     Administrator, each Director shall have delivered to the Company a stock
     power, endorsed in blank, relating to the Restricted Shares covered by such
     award. After the occurrence of a Vesting Event, assuming no event has
     occurred that would effect a forfeiture of a Director's Restricted Shares,
     a certificate or certificates evidencing unrestricted ownership of such
     Shares shall be delivered to the Director.

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                3.2      REQUIRED RETAINER SHARES AND VOLUNTARY SHARES.

              (a) RETAINER. Commencing with the Retainer for the third
     Accounting Period during 1996, 50% of the Retainer established by the Board
     from time to time shall be payable in cash and 50% of such Retainer shall
     be payable as Required Retainer Shares payable on January 1 of the
     following year (unless deferred in accordance with this Plan).

              (b) VOLUNTARY SHARES. Prior to the commencement of any calendar
     quarter, a Director may elect by the filing of a Participation Agreement to
     have up to 100% of his or her Fees for such quarter paid by the Company in
     the form of Voluntary Shares and in lieu of the cash payment. Such
     Participation Agreement must be filed as a one-time election. Such
     election, unless subsequently terminated, shall apply to a Director's Fees
     for the remainder of the current Plan Year and each subsequent Plan Year.
     Once an election has been terminated another election may not be made.

              (c) ISSUANCE OF SHARES. On January 1 of each year beginning with
     January 1, 1997, the Company shall issue (i) to each Director a number of
     Required Retainer Shares equal to 50% of such Director's Retainer for each
     Accounting Period during the prior Plan Year divided by the Fair Market
     Value per Share on the first day of such Accounting Period and (ii) to each
     Director who has made an election under Section 3.2(b) a number of
     Voluntary Shares for each such Accounting Period equal to the portion of
     such Director's Fees in excess of 50% of such Director's Retainer for such
     Accounting Period that such Director has elected to receive as Voluntary
     Shares for such Accounting Period divided by the Fair Market Value per
     Share on the first day of such Accounting Period (less, in each case, the
     portion of the Required Retainer Shares and Voluntary Shares the Director
     elected to defer under Section 4.3). To the extent that the application of
     the foregoing formula would result in the issuance of fractional Shares, no
     fractional Shares shall be issued, but instead, the Company shall maintain
     two separate non-interest-bearing accounts for each Director, which
     accounts shall be credited with the amount of any Required Retainer Shares
     or Voluntary Shares, as the case may be, not convertible into whole Shares,
     which amounts shall be combined with Required Retainer Shares and Voluntary
     Shares, respectively, which are paid for the next following Plan Year. When
     whole Shares are issued by the Company to the Director on January 1, the
     amounts in such accounts shall be reduced by that amount which (when added
     to the Required Retainer Shares and Voluntary Shares for such Director for
     such quarter) results in the issuance of the maximum number of Shares to
     such Director. The Company shall pay any and all fees and commissions
     incurred in connection with the payment of Required Retainer Shares and
     Voluntary Shares to a Director in Shares.

             ARTICLE IV.      DEFERRAL OF FEES, REQUIRED RETAINER SHARES
                              AND VOLUNTARY SHARES

         4.1 DEFERRAL OF FEES. A Director may elect to defer all or a specified
percentage of his or her Fees, and may change such percentage by filing a
Participation Agreement with the Administrator, which shall be effective as of
the first day of the Plan Year which commences after the date such Participation
Agreement is filed with the Administrator.

         4.2 CREDITING OF DEFERRED FEES. The portion of a Director's Fees that
is deferred pursuant to a Deferral Commitment shall be credited promptly
following each Plan Year to the Director's Deferred Fee Account as of the date
the corresponding non-deferred portion of his or her Fees would have been paid
to the Director.

         4.3 DEFERRAL OF REQUIRED RETAINER SHARES AND VOLUNTARY SHARES. A
Director may elect to defer all or a specified percentage of his or her Required
Retainer Shares and his or her Voluntary Shares, and may change such percentage
by filing a Participation Agreement with the Administrator, which shall be
effective as of the first day of the Plan Year which commences after the date
such Participation Agreement is filed with the Administrator.

         4.4 CREDITING OF DEFERRED SHARES. The portion of a Directors Required
Retainer Shares and Voluntary Shares that is deferred pursuant to a Deferral
Commitment shall be credited promptly following each Plan Year to the Director's
Deferred Share Account as of the date the corresponding non-deferred portion of
his or her Required Retainer Shares and Voluntary Shares would have been issued
to the Director.

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         4.5 WITHHOLDING TAXES. If the Company is required to withhold any
taxes or other amounts from a Director's Deferred Fees or Deferred Shares
pursuant to any state, Federal or local law, such amounts shall, to the extent
possible, be deducted from the Director's Fees or Required Retainer Shares or
Voluntary Shares before such amounts are credited as described in Sections 4.2
and 4.4 above. Any additional withholding amount required shall be paid by the
Director to the Company as a condition of crediting his or her Accounts.

                         ARTICLE V. DEFERRED FEE ACCOUNT

         5.1 DETERMINATION OF DEFERRED FEE ACCOUNT. On any particular date, a
Director's Deferred Fee Account shall consist of the aggregate amount credited
thereto pursuant to Section 4.2, plus any interest credited pursuant to Section
5.2, minus the aggregate amount of distributions, if any, made from such
Deferred Fee Account.

         5.2 CREDITING OF INTEREST. Each Deferred Fee Account to which Fees have
been credited in dollar amounts shall be increased by the amount of interest
earned since the immediately preceding Accounting Date. Interest shall be
credited at the Declared Rate as of each Accounting Date based on the average
daily balance of the Director's Deferred Fee Account since the immediately
preceding Accounting Date, but after the Deferred Fee Account has been adjusted
for any contributions or distributions to be credited or deducted for such
period. Interest for the period prior to the first Accounting Date applicable to
a Deferred Fee Account shall be prorated.

         5.3 ADJUSTMENTS TO DEFERRED FEE ACCOUNTS. Each Director's Deferred Fee
Account shall be immediately debited with the amount of any distributions under
the Plan to or on behalf of the Director or, in the event of his or her death,
his or her Beneficiary.

         5.4 STATEMENTS OF DEFERRED FEE ACCOUNTS. As soon as practicable after
the end of each Plan Year, a statement shall be furnished to each Director or,
in the event of his or her death, to his or her Beneficiary showing the status
of his or her Deferred Fee Account as of the end of the Accounting Period, any
changes in such Account since the end of the immediately preceding Accounting
Period, and such other information as the Administrator shall determine.

         5.5 VESTING OF DEFERRED FEE ACCOUNT. A Director shall be 100% vested in
his or her Deferred Fee Account at all times.

                       ARTICLE VI. DEFERRED SHARE ACCOUNT

         6.1 DETERMINATION OF DEFERRED SHARE ACCOUNT. On any particular date, a
Director's Deferred Share Account shall consist of the aggregate number of
Deferred Shares credited thereto pursuant to Section 4.4, plus any dividend
equivalents credited pursuant to Section 6.2, minus the aggregate amount of
distributions, if any, made from such Deferred Share Account.

         6.2 CREDITING OF DIVIDEND EQUIVALENTS. Each Deferred Share Account
shall be credited as of the end of each Accounting Period with additional
Deferred Shares equal in value to the amount of cash dividends paid by the
Company during such Accounting Period on that number of Shares equivalent to the
number of Deferred Shares in such Deferred Share Account during such Accounting
Period. The dividend equivalents shall be valued by dividing the dollar value of
such dividend equivalents by the Fair Market Value on the Accounting Date next
following the dividend payment date. Until a Director or his or her Beneficiary
receives his or her entire Deferred Share Account, the unpaid balance thereof
credited in Deferred Shares shall be credited with dividend equivalents as
provided in this Section 6.2.

         6.3 ADJUSTMENTS TO DEFERRED SHARE ACCOUNTS. Each Director's Deferred
Share Account shall be immediately debited with the amount of any distributions
under the Plan to or on behalf of the Director or, in the event of his or her
death, his or her Beneficiary.

         6.4 STATEMENTS OF DEFERRED SHARE ACCOUNTS. As soon as practicable after
the end of each Plan Year, a statement shall be furnished to each Director or,
in the event of his or her death, to his or her Beneficiary showing the status
of his or her Deferred Share Account as of the end of the Accounting Period, any
changes

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in such Account since the end of the immediately preceding Accounting Period,
and such other information as the Administrator shall determine.

         6.5 VESTING OF DEFERRED SHARE ACCOUNT. A Director shall be 100% vested
in his or her Deferred Share Account at all times.

                      ARTICLE VII. DISTRIBUTION OF BENEFITS

         7.1 SETTLEMENT DATE. A Director, or in the event of such Director's
death, his or her Beneficiary shall be entitled to all or a portion of the
balance in such Director's Deferred Fee Account and Deferred Share Account, as
provided in this Article VII, following such Director's Settlement Date or
Dates.

         7.2 AMOUNT TO BE DISTRIBUTED. The amount to which a Director, or in the
event of such Director's death, his or her Beneficiary is entitled in accordance
with the following provisions of this Article VII shall be based on the
Director's adjusted balances in his or her Deferred Fee Account and Deferred
Share Account determined as of the Accounting Date coincident with or next
following his or her Settlement Date or Dates.

         7.3 IN-SERVICE DISTRIBUTION. A Director may irrevocably elect to
receive a pre-termination distribution of all or any specified percentage of his
or her Deferred Fees or Deferred Shares for any Plan Year on or commencing not
earlier than the beginning of the third Plan Year following the Plan Year such
Fees and Shares otherwise would have been payable. A Director's election of a
pre-termination distribution shall be made in a Participation Agreement filed
for the Plan Year as provided in Section 4.1 or Section 4.3. A Director shall
elect irrevocably to receive such Deferred Fees and/or Deferred Shares as a
pre-termination distribution under one of the forms provided in Section 7.4 or
Section 7.5.

         7.4 FORM OF DISTRIBUTION -- DEFERRED FEES. As soon as practicable after
the end of the Accounting Period in which a Director's Settlement Date occurs,
but in no event later than thirty days following the end of such Accounting
Period, the Company shall distribute or cause to be distributed, to the Director
the balance of the Director's Deferred Fee Account as determined under Section
7.2, under one of the forms provided in this Section 7.4. Notwithstanding the
foregoing, if elected by the Director, the distribution of all or a portion of
the Director's Deferred Fee Account may be made or may commence at the beginning
of the Plan Year next following his or her Settlement Date. In the event of a
Director's death, the balance of his or her Deferred Fee Account shall be
distributed to his or her Beneficiary in a lump sum.

         Distribution of a Director's Deferred Fee Account shall be made in one
of the following forms as elected by the Director:

                  (a) by payment in cash in a single lump sum;

                  (b) by payment in cash in not greater than ten annual
         installments; or

                  (c) a combination of (a) and (b) above.  The Director shall
         designate the percentage payable under each option.

The Director's election of the form of distribution shall be made by written
notice filed with the Administrator at least one year prior to the Director's
voluntary retirement as a Director. Any such election may be changed by the
Director at any time and from time to time without the consent of any other
person by filing a later signed written election with the Administrator;
provided that any election made less than one year prior to the Director's
voluntary termination as a Director shall not be valid, and in such case payment
shall be made in accordance with the Director's prior election.

         The amount of cash to be distributed in each installment shall be equal
to the quotient obtained by dividing the Director's Deferred Fee Account balance
as of the date of such installment payment by the number of installment payments
remaining to be made to or in respect of such Director at the time of
calculation.

         If a Director fails to make an election in a timely manner as provided
in this Section 7.4, distribution shall be made in cash in a lump sum.

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         7.5 FORM OF DISTRIBUTION -- DEFERRED SHARES. As soon as practicable
after the end of the Accounting Period in which a Director's Settlement Date
occurs, but in no event later than thirty days following the end of such
Accounting Period, the Company shall distribute or cause to be distributed, to
the Director a number of Shares equal to the number of Deferred Shares in the
Director's Deferred Share Account as determined under Section 7.2, under one of
the forms provided in this Section 7.5. Notwithstanding the foregoing, if
elected by the Director, the distribution of all or a portion of the Director's
Deferred Share Account may be made or may commence at the beginning of the Plan
Year next following his or her Settlement Date. In the event of a Director's
death, the number of Shares equal to the number of Deferred Shares in his or her
Deferred Share Account shall be distributed to his or her Beneficiary in a
single distribution.

         Distribution of a Director's Deferred Share Account shall be made in
one of the following forms as elected by the Director:

              (a) by payment in Shares or cash in a single distribution;

              (b) by payment in Shares or cash in not greater than ten annual
     installments; or

              (c) a combination of (a) and (b) above. The Director shall
     designate the percentage payable under each option.

The Director's election of the form of distribution shall be made by written
notice filed with the Administrator at least one year prior to the Director's
voluntary retirement as a Director. Any such election may be changed by the
Director at any time and from time to time without the consent of any other
person by filing a later signed written election with the Administrator;
provided that any election made less than one year prior to the Director's
voluntary termination as a Director shall not be valid, and in such case payment
shall be made in accordance with the Director's prior election.

         The number of Shares to be distributed in each installment shall be
equal to the quotient obtained by dividing the number of Deferred Shares in the
Director's Deferred Share Account as of the date of such installment payment by
the number of installment payments remaining to be made to or in respect of such
Director at the time of calculation. Fractional Shares shall be rounded down to
the nearest whole Share, and such fractional amount shall be re-credited as a
fractional Deferred Share in the Director's Deferred Share Account.

         If a Director elects payment in a single distribution in cash, the
amount of the payout shall be equal to the Fair Market Value of the Deferred
Shares in the Director's Deferred Share Account on the Settlement Date. If such
Director elects payout in installments in cash, an amount equal to the Fair
Market Value of the Deferred Shares in the Director's Deferred Share Account on
the Settlement Date shall be transferred to the Director's Deferred Fee Account
pending distribution.

         If a Director fails to make an election in a timely manner as provided
in this Section 7.5, distribution of the Director's Deferred Share Account shall
be made in Shares in a single distribution.

         7.6 SPECIAL DISTRIBUTIONS. Notwithstanding any other provision of this
Article VII, a Director may elect to receive a distribution of part or all of
his or her Deferred Fee Account and/or Deferred Share Account in one or more
distributions if (and only if) the amount in the Director's Deferred Fee Account
and/or the number of the Shares in the Director's Deferred Share Account subject
to such distribution is reduced by 10 percent. Any distribution made pursuant to
such an election shall be made within sixty days of the date such election is
submitted to the Administrator. The remaining 10 percent of the portion of the
electing Director's Deferred Fee Account and/or Deferred Share Account subject
to such distribution shall be forfeited.

         7.7 BENEFICIARY DESIGNATION. As used in the Plan the term "Beneficiary"
means:

                  (a) The person last designated as Beneficiary by the Director
         in writing on a form prescribed by the Administrator;

                  (b) If there is no designated Beneficiary or if the person so
         designated shall not survive the Director, such Director's spouse; or

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                  (c) If no such designated Beneficiary and no such spouse is
         living upon the death of a Director, or if all such persons die prior
         to the distribution of the Director's balance in his or her Deferred
         Fee Account and Deferred Share Account, then the legal representative
         of the last survivor of the Director and such persons, or, if the
         Administrator shall not receive notice of the appointment of any such
         legal representative within one year after such death, the heirs-at-law
         of such survivor shall be the Beneficiaries to whom the then remaining
         balance of such Accounts shall be distributed (in the proportions in
         which they would inherit his or her intestate personal property).

Any Beneficiary designation may be changed from time to time by the filing of a
new form. No notice given under this Section 7.7 shall be effective unless and
until the Administrator actually receives such notice.

         7.8 FACILITY OF PAYMENT. Whenever and as often as any Director or his
or her Beneficiary entitled to payments hereunder shall be under a legal
disability or, in the sole judgment of the Administrator, shall otherwise be
unable to apply such payments to his or her own best interests and advantage,
the Administrator in the exercise of its discretion may direct all or any
portion of such payments to be made in any one or more of the following ways:
(i) directly to him or her; (ii) to his or her legal guardian or conservator; or
(iii) to his or her spouse or to any other person, to be expended for his or her
benefit; and the decision of the Administrator, shall in each case be final and
binding upon all persons in interest.

             ARTICLE VIII. ADMINISTRATION, AMENDMENT AND TERMINATION

         8.1 ADMINISTRATION. The Plan shall be administered by the
Administrator. The Administrator shall have such powers as may be necessary to
discharge its duties hereunder. The Administrator may, from time to time,
employ, appoint or delegate to an agent or agents (who may be an officer or
officers of the Company) and delegate to them such administrative duties as it
sees fit, and may from time to time consult with legal counsel who may be
counsel to the Company. The Administrator shall have no power to add to,
subtract from or modify any of the terms of the Plan, or to change or add to any
benefits provided under the Plan, or to waive or fail to apply any requirements
of eligibility for a benefit under the Plan. No member of the Administrator
shall act in respect of his or her own Deferred Fee Account or his or her own
Deferred Share Account. All decisions and determinations by the Administrator
shall be final and binding on all parties. No member of the Administrator shall
be liable for any such action taken or determination made in good faith. All
decisions of the Administrator shall be made by the vote of the majority,
including actions and writing taken without a meeting. All elections, notices
and directions under the Plan by a Director shall be made on such forms as the
Administrator shall prescribe.

         8.2 AMENDMENT AND TERMINATION. The Board may alter or amend this Plan
from time to time or may terminate it in its entirety; PROVIDED, HOWEVER, that
no such action shall, without the consent of a Director, affect the rights in
any Shares issued or to be issued to such Director, in any Deferred Shares in a
Director's Deferred Share Account or in any amounts in a Director's Deferred Fee
Account; and further provided, that, without further approval by the
shareholders of the Company no such action shall (a) increase the total number
of Shares available for issuance under this Plan specified in Article X or (b)
otherwise cause Rule 16b-3 to become inapplicable to this Plan.

                        ARTICLE IX. FINANCING OF BENEFITS

         9.1 FINANCING OF BENEFITS. The Shares and benefits payable in cash
under the Plan to a Director or, in the event of his or her death, to his or her
Beneficiary shall be paid by the Company from its general assets. The right to
receive payment of the Shares and benefits payable in cash represents an
unfunded, unsecured obligation of the Company. No person entitled to payment
under the Plan shall have any claim, right, security interest or other interest
in any fund, trust, account, insurance contract, or asset of the Company which
may be responsible for such payment.

         9.2 SECURITY FOR BENEFITS. Notwithstanding the provisions of Section
9.1, nothing in this Plan shall preclude the Company from setting aside Shares
or funds in trust ("Trust") pursuant to one or more trust agreements between a
trustee and the Company. However, no Director or Beneficiary shall have any
secured

                                       8
<PAGE>   9

interest or claim in any assets or property of the Company or the Trust and all
Shares or funds contained in the Trust shall remain subject to the claims of the
Company's general creditors.

                        ARTICLE X. SHARES SUBJECT TO PLAN

         10.1 SHARES SUBJECT TO PLAN. Subject to adjustment as provided in this
Plan, the total number of Shares which may be issued under this Plan shall be
50,000.

         10.2 ADJUSTMENTS. In the event of any change in the outstanding Shares
by reason of (a) any stock dividend, stock split, combination of shares,
recapitalization or any other change in the capital structure of the Company,
(b) any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of rights or warrants to purchase securities, or (c) any other
corporate transaction or event having an effect similar to any of the foregoing,
the number and kind of shares specified in Article III, the number or kind of
Shares that may be issued under the Plan as specified in Article X and the
number of Deferred Shares in a Director's Deferred Share Account shall
automatically be adjusted so that the proportionate interest of the Directors
shall be maintained as before the occurrence of such event. Such adjustment
shall be conclusive and binding for all purposes with respect to the Plan.

                             ARTICLE XI. PRIOR PLANS

         11.1 1992 INCENTIVE EQUITY PLAN. No further options shall be issued to
the Directors under Section 8 of the Company's 1992 Incentive Equity Plan on or
after July 1, 1996.

         11.2 PLAN FOR DEFERRED PAYMENT OF DIRECTOR'S FEES. Upon the approval of
this Plan by the shareholders of the Company, the Prior Plan shall be
discontinued, except that any amount remaining payable to former Directors in
the Prior Plan shall be paid in accordance with its terms. Participants in the
Prior Plan who are currently Directors shall be covered by this Plan and the
bookkeeping entries representing Shares theretofore credited to the account of
any current Director in the Prior Plan prior to such discontinuance shall be
transferred to a Deferred Share Account for such Director. Any deferral election
by a Director in force under the Prior Plan shall continue in effect in
accordance with its terms.

                         ARTICLE XII. GENERAL PROVISIONS

         12.1 INTERESTS NOT TRANSFERABLE; RESTRICTIONS ON SHARES AND RIGHTS TO
SHARES. No rights to Shares or other benefits payable in cash shall be assigned,
pledged, hypothecated or otherwise transferred by a Director or any other
person, voluntarily or involuntarily, other than (i) by will or the laws of
descent and distribution, or (ii) pursuant to a domestic relations order meeting
the definition of a qualified domestic relations order under the Code. No person
shall have any right to commute, encumber, pledge or dispose of any other
interest herein or right to receive payments hereunder, nor shall such interests
or payments be subject to seizure, attachment or garnishment for the payments of
any debts, judgments, alimony or separate maintenance obligations or be
transferable by operation of law in the event of bankruptcy, insolvency or
otherwise, all payments and rights hereunder being expressly declared to be
nonassignable and nontransferable.

         12.2 GOVERNING LAW. The provisions of this Plan shall be governed by
and construed in accordance with the laws of the State of Ohio.

         12.3 WITHHOLDING TAXES. To the extent that the Company is required to
withhold Federal, state or local taxes in connection with any component of a
Director's compensation in cash or Shares, and the amounts available to the
Company for such withholding are insufficient, it shall be a condition to the
receipt of any Shares that the Director make arrangements satisfactory to the
Company for the payment of the balance of such taxes required to be withheld,
which arrangement may include relinquishment of the Shares. The Company and a
Director may also make similar arrangements with respect to payment of any other
taxes derived from or related to the payment of Shares with the respect to which
withholding is not required.

         12.4 RULE 16b-3. This Plan is intended to comply with Rule 16b-3 as in
effect prior to May 1, 1991. The Administrator may, however, elect at any time
to have some other version of Rule 16b-3 apply if permitted by

                                       9
<PAGE>   10
applicable law. If at any time Rule 16b-3 as promulgated on February 8, 1991 or
at any later date shall become applicable to the Plan, if necessary for
acquisition of Shares under the Plan to continue to be exempt under Rule 16b-3,
no election to have Fees paid in Shares shall become effective pursuant to
Section 3.2(b) hereof until 6 months after such election is made. In addition,
the Board may make such other changes in the terms or operation of the Plan as
may then be necessary or appropriate to comply with such Rule, including,
without limitation, by eliminating any restriction originally included in the
Plan to comply with Rule 16b-3 that may no longer be required. Without limiting
the generality of the foregoing, the Board may change the number of Restricted
Shares to be awarded under Section 3.1 from time to time if such change would
not cause Directors participating in the Plan to cease to be "disinterested
persons" within the meaning of Rule 16b-3, and the Board may provide for annual
election of Voluntary Shares pursuant to Section 3.2 if such election would be
permitted by Rule 16b-3.

         12.5 MISCELLANEOUS. Headings are given to the sections of this Plan
solely as a convenience to facilitate reference. Such headings, numbering and
paragraphing shall not in any case be deemed in any way material or relevant to
the construction of this Plan or any provisions thereof. The use of the singular
shall also include within its meaning the plural, and vice versa.

                                       10<PAGE>   1
                                                                   Exhibit 10.60

                               FOURTH AMENDMENT TO

                   PROVISIONAL WAIVER AND STANDSTILL AGREEMENT

         THIS FOURTH AMENDMENT to Provisional Waiver and Standstill Agreement
(this "Fourth Amendment") is made and entered into as of the 31st day of
January, 2001, by the Lenders party to the Credit Agreement identified below and
FIRST UNION NATIONAL BANK, as Agent for the Lenders, and RURAL/METRO
CORPORATION, a corporation organized under the laws of Delaware (the
"Borrower").

                              Statement of Purpose

         Pursuant to the Provisional Waiver and Standstill Agreement dated as of
March 14, 2000 (as amended, restated, supplemented or otherwise modified, the
"Waiver Agreement"), the Borrower, the Agent and the Lenders, each a party to
the Amended and Restated Credit Agreement dated as of March 16, 1998 (as amended
by the First Amendment dated as of June 30, 1998 and as further amended,
restated, supplemented or otherwise modified, the "Credit Agreement"), agreed to
waive the Acknowledged Defaults provisionally for a period of 30 days after
March 14, 2000 and to defer the exercise of remedies during such period, subject
to the express terms and provisions of the Waiver Agreement.

         Pursuant to the First Amendment to the Provisional Waiver and
Standstill Agreement dated as of April 13, 2000 (the "First Amendment"), the
Borrower, the Lenders and the Agent agreed, among other things, to continue to
waive the Acknowledged Defaults provisionally until July 14, 2000, or earlier if
certain other specified events occur, and to continue negotiations with the
Agent and the Lenders to amend or otherwise restructure the Credit Agreement.

         Pursuant to the Second Amendment to the Provisional Waiver and
Standstill Agreement dated as of July 14, 2000 (the "Second Amendment"), the
Borrower, the Lenders and the Agent agreed, among other things, to further
continue to waive the Acknowledged Defaults provisionally until October 16,
2000, or earlier if certain other specified events occur, and to further
continue negotiations with the Agent and the Lenders to amend or otherwise
restructure the Credit Agreement.

         Pursuant to the Third Amendment to the Provisional Waiver and
Standstill Agreement dated as of October 16, 2000 (the "Third Amendment"), the
Borrower, the Lenders and the Agent agreed, among other things, to further
continue to waive the Acknowledged Defaults provisionally until January 31,
2001, or earlier if certain other specified events occur, and to further
continue negotiations with the Agent and the Lenders to amend or otherwise
restructure the Credit Agreement. The Borrower, the Agent and the Lenders are
continuing to negotiate but
<PAGE>   2
have not yet reached an agreement on such amendment or restructuring and the
Borrower has, therefore, requested an additional period of time in which to
continue such negotiations.

         The Lenders and the Agent are willing to continue to waive the
Acknowledged Defaults provisionally for an additional period of time and to
defer the exercise of remedies in respect of the Acknowledged Defaults during
such period subject to the express terms and provisions of this Fourth
Amendment. This Fourth Amendment shall be deemed to be one of the Loan Documents
under and pursuant to the Credit Agreement.

         NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

         1.       Effect of Amendment and Acknowledgments by Borrower. Except as
expressly amended hereby, the Third Amendment, the Second Amendment, the First
Amendment, the Waiver Agreement, the Credit Agreement and each other Loan
Document, shall be and remain in full force and effect. The amendments granted
in this Fourth Amendment are specific and limited and shall not constitute a
modification, acceptance or waiver of any other provision of the Third
Amendment, the Second Amendment, the First Amendment, the Waiver Agreement, the
Credit Agreement, the other Loan Documents or any other document or instrument
entered into in connection therewith, or a future modification, acceptance or
waiver of the provisions set forth therein. For avoidance of doubt, but in no
way limiting the scope and breadth of the previous sentences in this paragraph,
each Credit Party hereby reaffirms each of the acknowledgments and agreements
made by it in Sections 1 (except as expressly amended in Paragraph 3(a) below),
6 and 7 of the Waiver Agreement as if each such acknowledgment and agreement was
made as of the date hereof.

         2.       Capitalized Terms. All capitalized undefined terms used in
this Fourth Amendment shall have the meanings assigned thereto in the Waiver
Agreement.

         3.       Amendment of Waiver Agreement. The Waiver Agreement shall be
hereby amended as follows:

         a.       Section 1 shall hereby be amended by deleting paragraph 1(c)
and replacing it in its entirety with the following:

                  "(c)     The Loans outstanding as of the date hereof are in an
         amount equal to $144,336,415.00 (the "Existing Loans") and the L/C
         Obligations outstanding as of the date hereof are in an amount equal to
         $6,515,000.00 (the "Existing L/C Obligations", and together with the
         Existing Loans, the "Existing Extensions of Credit") and no Credit
         Party has any defense or right of offset with respect to such amounts."
<PAGE>   3
         b.       Section 2 shall hereby be amended by deleting Section 2 and
replacing it in its entirety with the following:

                  "Provisional Waiver and Limited Deferral. The Lenders and the
         Agent respectively agree to waive the Acknowledged Defaults
         provisionally and to defer the exercise of any rights or remedies
         arising by reason of Events of Default that have occurred solely as a
         result of the occurrence of the Acknowledged Defaults until that date
         (as so extended and as may be further extended, the "Waiver Maturity
         Date") which is the earliest to occur of: (a) April 15, 2001; (b) the
         occurrence of any Event of Default other than (i) the Acknowledged
         Defaults or (ii) any breach of the financial covenants that are the
         subject of the Acknowledged Defaults as of the fiscal quarters ending
         March 31, 2000, June 30, 2000, September 30, 2000, December 31, 2000
         and March 31, 2001; (c) any Event of Default (as such term is defined
         in the Senior Note Indenture (as defined below)) that shall have
         occurred under the Indenture dated as of March 16, 1998, by and among
         the Borrower, the subsidiaries acting as Guarantors thereto, and U.S.
         Bank National Association, a national banking association, successor to
         the First National Bank of Chicago, as Trustee (the "Senior Note
         Indenture"); or (d) the breach of any of the further conditions or
         agreements provided in the Waiver Agreement as amended by the First
         Amendment, the Second Amendment, the Third Amendment and this Fourth
         Amendment, it being agreed that the breach of any such further
         condition or agreement shall constitute an immediate Default and Event
         of Default under the Credit Agreement."

         c.       Section 4 shall hereby be amended by adding the following
paragraph 4(m) to the end of Section 4:

                  "(m)     A definitive term sheet providing for the repayment
and/or restructuring of the Existing Extensions of Credit shall have been
executed by the Borrower, the Guarantors, the Agent and the Lenders by no later
than the close of business on February 20, 2001."

         4.       Release. Each Credit Party, on behalf of itself and any Person
claiming by, through, or under such Credit Party, acknowledges that it has no
claim, counterclaim, setoff, action or cause of action of any kind or nature
whatsoever ("Claims") against all or any of the Agent, the Lenders or any of the
Agent's or the Lenders' directors, officers, employees, agents, attorneys,
financial advisors, accountants, legal representatives, successors and assigns
(the Agent, the Lenders and their directors, officers, employees, agents,
attorneys, financial advisors, accountants, legal representatives, successors
and assigns are jointly and severally referred to as the "Lender Group"), that
directly or indirectly arise out of or are based upon or in any manner connected
with any "Prior Event" (as defined below), and each Credit Party, on behalf of
itself and any Person claiming by, through or under such Credit Party, hereby
releases the Lender Group from any liability whatsoever should any Claims
nonetheless exist. As used herein the term "Prior Event" means any transaction,
event, circumstances, action, failure to act or occurrence of any sort or type,
whether known or unknown, which occurred, existed, was taken, permitted or begun
prior to the execution of this Fourth Amendment and occurred, existed, was
taken, permitted or begun in accordance with, pursuant to or by virtue of any
terms of this Fourth Amendment, the transactions referred to herein, any Loan
Document or oral or written agreement
<PAGE>   4
relating to any of the foregoing, including without limitation any approval or
acceptance given or denied.

         5.       Representations and Warranties. By its execution hereof, the
Borrower hereby certifies on behalf of itself and the other Credit Parties that
each of the representations and warranties set forth in the Credit Agreement and
the other Loan Documents is true and correct as of the date hereof as if fully
set forth herein, and that as of the date hereof no Default or Event of Default
(other than Events of Default occurring as a result of the occurrence of the
Acknowledged Defaults) has occurred and is continuing. Additionally, the
Borrower represents and warrants that, since July 14, 2000, no event which has
had, or could reasonably be expected to have, a Material Adverse Effect has
occurred, except as previously disclosed in writing to the Agent (which includes
any public disclosures made in Borrower's press releases or filings with the
Securities and Exchange Commission, provided that such press releases and
filings were provided to SSL for the benefit of the Agent).

         6.       Conditions. The effectiveness of this Fourth Amendment shall
be conditioned upon the following:

         a.       The following documents shall have been duly authorized and
executed by the parties thereto, shall be in full force and effect and no
default shall exist thereunder, and the Borrower shall have delivered original
counterparts thereof to the Agent:

                  (i)      this Fourth Amendment, duly executed and delivered by
                           the Credit Parties, the Agent and the Lenders
                           constituting Required Lenders;

                  (ii)     a cash flow projection (the "Cash Flow Projection")
                           for the Borrower and its Subsidiaries for each week
                           up through and including April 15, 2001 which shall
                           be attached hereto as Exhibit "A" and which shall be
                           in the form and substance satisfactory to the Lender
                           Financial Consultant; and

                  (iii)    such other documents, certificates and instruments as
                           the Agent reasonably requests.

         b.       The Borrower shall have paid all outstanding fees and
expenses, to the extent that the Borrower has received an invoice for such fees
and expenses, through the date hereof of Stroock & Stroock & Lavan LLP and the
Lender Financial Consultant.

         c.       The Borrower shall have made a payment of five hundred
thousand ($500,000.00) dollars to the Agent and the Lenders in respect of
accrued and unpaid Deferred Interest.

         7.       Governing Law. THE WAIVER AGREEMENT, AS AMENDED BY THE FIRST
AMENDMENT, THE SECOND AMENDMENT, THE THIRD AMENDMENT AND AS AMENDED HEREIN, AND
EACH OTHER LOAN DOCUMENT, UNLESS OTHERWISE EXPRESSLY SET FORTH THEREIN, SHALL BE
GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
<PAGE>   5
STATE OF NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW
PRINCIPLES THEREOF.

         8.       Miscellaneous.

         a.       Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Agent for the ratable benefit of Lenders pursuant to
the Waiver Agreement, as amended by the First Amendment, the Second Amendment,
the Third Amendment and as amended herein, the Notes or any other Loan Document
which payments or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds repaid, the Obligations or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if such
payment or proceeds had not been received by the Agent.

         b.       Arbitration.

                           (i) Binding Arbitration. Upon demand of any party,
                  whether made before or after institution of any judicial
                  proceeding, any dispute, claim or controversy arising out of,
                  connected with or relating to the Waiver Agreement, as amended
                  by the First Amendment, the Second Amendment, the Third
                  Amendment and as amended herein, the Notes or any other Loan
                  Documents ("Disputes"), between or among parties to this
                  Fourth Amendment, the Notes or any other Loan Document shall
                  be resolved by binding arbitration as provided herein.
                  Institution of a judicial proceeding by a party does not waive
                  the right of that party to demand arbitration hereunder.
                  Disputes may include, without limitation, tort claims,
                  counterclaims, claims brought as class actions, claims arising
                  from Loan Documents executed in the future, or claims
                  concerning any aspect of the past, present or future
                  relationships arising out or connected with the Loan
                  Documents. Arbitration shall be conducted under and governed
                  by the Commercial Financial Disputes Arbitration Rules (the
                  "Arbitration Rules") of the American Arbitration Association
                  (the "AAA") and Title 9 of the U.S. Code. All arbitration
                  hearings shall be conducted in Charlotte, North Carolina. The
                  expedited procedures set forth in Rule 51, et seq., of the
                  Arbitration Rules shall be applicable to claims of less than
                  $1,000,000. All applicable statutes of limitation shall apply
                  to any Dispute. A judgment upon the award may be entered in
                  any court having jurisdiction. The panel from which all
                  arbitrators are selected shall be comprised of licensed
                  attorneys. The single arbitrator selected for expedited
                  procedure shall be a retired judge from the highest court of
                  general jurisdiction, state or federal, of the state where the
                  hearing will be conducted. The arbitrators shall be appointed
                  as provided in the Arbitration Rules.

                           (ii) Preservation of Certain Remedies.
                  Notwithstanding the preceding binding arbitration provisions,
                  the Agent and the Lenders preserve, without diminution,
                  certain remedies that the Agent and the Lenders may employ or
                  exercise freely, either alone, in conjunction with or during a
                  Dispute. The Agent and the Lenders shall have and hereby
                  reserve the right to proceed in any court of proper
<PAGE>   6
                  jurisdiction or by self help to exercise or prosecute the
                  following remedies: (A) all rights to foreclose against any
                  real or personal property or other security by exercising a
                  power of sale granted in the Loan Documents or under
                  applicable law or by judicial foreclosure and sale, (B) all
                  rights of self help including peaceful occupation of property
                  and collection of rents, set off, and peaceful possession of
                  property and (C) obtaining provisions or ancillary remedies
                  including injunctive relief, sequestration, garnishment,
                  attachment, appointment of receiver and in filing an
                  involuntary bankruptcy proceeding. Preservation of these
                  remedies does not limit the power of any arbitrator to grant
                  similar remedies that may be requested by a party in a
                  Dispute.

         c.       Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE AGENT, EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER
PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THE WAIVER AGREEMENT,
AS AMENDED BY THE FIRST AMENDMENT, THE SECOND AMENDMENT, THE THIRD AMENDMENT AND
AS AMENDED HEREIN, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.

         d.       Survival of Terms of Agreement. The waivers, agreements,
covenants, representations and warranties of each Credit Party in the Waiver
Agreement, as amended by the First Amendment, the Second Amendment, the Third
Amendment and as amended herein, shall survive the Waiver Maturity Date.

         e.       Side Letter. The letter from the Borrower to the Agent dated
July 17, 2000 that was executed in connection with the Second Amendment shall
remain in full force and effect and shall be a Loan Document.

         9.       Counterparts. This Fourth Amendment may be executed in
separate counterparts, each of which when executed and delivered is an original
but all of which taken together constitute one and the same instrument.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
<PAGE>   7
         IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be duly executed as of the date and year first above written.

                                      BORROWER:

                                      RURAL/METRO CORPORATION, a Delaware
                                      corporation

                                      By: /s/  John S. Banas III
                                          ------------------------------------
                                           John S. Banas III
                                           Senior Vice President

                            [Signature pages follow.]
<PAGE>   8
                                      LENDERS:

                                      FIRST UNION NATIONAL BANK,
                                      as Agent and Lender

                                      /s/  Ron R. Ferguson
                                          ------------------------------------
                                           Ron R. Ferguson
                                           Senior Vice President
<PAGE>   9
                                      FLEET BANK, N.A., as Lender

                                      /s/  Vincent Pitts
                                          ------------------------------------
                                           Vincent Pitts
                                           Vice President
<PAGE>   10
                                      OAKTREE CAPITAL MANAGEMENT, LLC, as
                                      general partner and/or investment manager
                                      of certain funds and accounts it manages.

                                      By:/s/
                                          ------------------------------------
                                          Name:
                                               -------------------------------
                                          Title:
                                                ------------------------------
<PAGE>   11
                                      ABN AMRO BANK NV, as Lender

                                      By:/s/
                                          ------------------------------------
                                          Name:
                                               -------------------------------
                                          Title:
                                                ------------------------------
<PAGE>   12
                                      WELLS FARGO BANK, as Lender

                                      /s/  Sylvia N. Kargas
                                          ------------------------------------
                                           Sylvia N. Kargas
                                           Vice President
<PAGE>   13
                                      GENERAL ELECTRIC CAPITAL
                                           CORPORATION, as Lender

                                      /s/  William S. Richardson
                                          ------------------------------------
                                           William S. Richardson
                                           Duly Authorized Signatory
<PAGE>   14
                                      BANK OF AMERICA NATIONAL TRUST AND
                                           SAVINGS ASSOCIATION, as Lender

                                      /s/  Robert J. Likos
                                          ------------------------------------
                                           Robert J. Likos
                                           Vice President
<PAGE>   15
                                      BNP PARIBAS, as Lender

                                      /s/  Alain Louel
                                          ------------------------------------
                                           Alain Louel
                                           Managing Director

                                      /s/  Kathryn B. Quinn
                                          ------------------------------------
                                           Kathryn B. Quinn
                                           Vice President
<PAGE>   16
By execution hereof, the undersigned Subsidiary Guarantors hereby acknowledge
and agree to the terms hereof; hereby reaffirm their respective obligations
under the Subsidiary Guaranty and the Intercompany Subordination Agreement;
acknowledge that the Guaranty Obligations with respect to the Subsidiary
Guaranty include the obligations under this Fourth Amendment; acknowledge that
the Senior Debt as defined in and with respect to the Intercompany Subordination
Agreement include the obligations under this Fourth Amendment; and hereby agree
that the terms of the Subsidiary Guaranty shall remain in full force and effect
notwithstanding any event or condition which has occurred.

ACCEPTED AND AGREED TO AS OF JANUARY 31, 2001.

AID AMBULANCE AT VIGO COUNTY, INC., an Indiana corporation, AMBULANCE TRANSPORT
SYSTEMS, INC., a New Jersey corporation, AMERICAN LIMOUSINE SERVICE, INC., an
Ohio corporation, ARROW AMBULANCE, INC., an Idaho corporation, BEACON
TRANSPORTATION, INC., a New York corporation, COASTAL EMS, INC., a Georgia
corporation, CORNING AMBULANCE SERVICE INC., a New York corporation, DONLOCK,
LTD., a Pennsylvania corporation, E.M.S. VENTURES, INC., a Georgia corporation,
EMS VENTURES OF SOUTH CAROLINA, INC., a South Carolina corporation, EASTERN
AMBULANCE SERVICE, INC., a Nebraska corporation, EASTERN PARAMEDICS, INC., a
Delaware corporation, GOLD CROSS AMBULANCE SERVICES, INC., a Delaware
corporation, GOLD CROSS AMBULANCE SERVICE OF PA., INC., an Ohio corporation,
KEEFE & KEEFE, INC., a New York corporation, KEEFE & KEEFE AMBULETTE, LTD., a
New York corporation, LASALLE AMBULANCE INC., a New York corporation, MEDI-CAB
OF GEORGIA, INC., a Delaware corporation, MEDICAL EMERGENCY DEVICES AND SERVICES
(MEDS), INC., an Arizona corporation, MEDICAL TRANSPORTATION SERVICES, INC., a
South Dakota corporation, MEDSTAR EMERGENCY MEDICAL SERVICES, INC., a Delaware
corporation, MERCURY AMBULANCE SERVICE, INC., a Kentucky corporation, METRO CARE
CORP., an Ohio corporation, MO-RO-KO, INC., an Arizona corporation, MULTI CAB
INC., a New Jersey corporation, MULTI-CARE INTERNATIONAL, INC., a New Jersey
corporation, MULTI-CARE MEDICAL CAR SERVICE, INC., a New Jersey corporation,
MULTI-HEALTH CORP., a Florida corporation, MYERS AMBULANCE SERVICE, INC., an
Indiana corporation, NATIONAL AMBULANCE & OXYGEN SERVICE, INC., a New York
corporation, NORTH MISS. AMBULANCE SERVICE, INC., a Mississippi corporation,
PROFESSIONAL MEDICAL SERVICES, INC., an Arkansas corporation, RISC AMERICA
ALABAMA FIRE SAFETY SERVICES, INC., a Delaware corporation, RMFD OF NEW JERSEY,
INC., a Delaware corporation, R/M MANAGEMENT CO., INC., an Arizona corporation,
R/M OF MISSISSIPPI, INC., a Delaware corporation, R/M OF TENNESSEE G.P., INC., a
Delaware corporation, R/M OF TENNESSEE L.P., INC., a Delaware corporation, R/M
OF TEXAS G.P., INC., a Delaware corporation, R/M PARTNERS, INC., a Delaware
corporation, RMC CORPORATE CENTER, L.L.C., an Arizona limited liability company,
By: RURAL/METRO CORPORATION, an Arizona corporation, Its Member, RURAL/METRO
ARGENTINA, L.L.C., an Arizona limited liability company, By: RURAL/METRO
INTERNATIONAL, INC., a Delaware corporation, Its Member, RURAL/METRO BRASIL,
L.L.C., an Arizona limited liability company, By: RURAL/METRO INTERNATIONAL,
INC., a Delaware corporation, Its Member, RURAL/METRO CANADIAN HOLDINGS, INC., a
Delaware corporation, RURAL/METRO COMMUNICATIONS SERVICES, INC., a Delaware
corporation, RURAL/METRO CORPORATION, an Arizona corporation, RURAL/METRO
CORPORATION OF FLORIDA, a Florida corporation, RURAL/METRO CORPORATION OF
TENNESSEE, a Tennessee corporation, RURAL/METRO FIRE DEPT., INC., an Arizona
corporation, RURAL/METRO HOSPITAL SERVICES, INC., a Delaware corporation

                                       By: /s/  John S. Banas III
                                           ------------------------------------
                                                John S. Banas III
                                                Secretary
<PAGE>   17
RURAL/METRO INTERNATIONAL, INC., a Delaware corporation, RURAL/METRO LOGISTICS,
INC., a Delaware corporation, RURAL/METRO MID-ATLANTIC, INC., a Delaware
corporation, RURAL/METRO MID-SOUTH, L.P., a Delaware limited partnership, By:
R/M OF TENNESSEE G.P., INC., a Delaware corporation, Its General Partner,
RURAL/METRO OF ALABAMA, INC., a Delaware corporation, RURAL/METRO OF ARGENTINA,
INC., a Delaware corporation, RURAL/METRO OF ARKANSAS, INC., a Delaware
corporation, RURAL/METRO OF ARLINGTON, INC., a Delaware corporation, RURAL/METRO
OF BRASIL, INC., a Delaware corporation, RURAL/METRO OF CALIFORNIA, INC., a
Delaware corporation, RURAL/METRO OF CENTRAL ALABAMA, INC., a Delaware
corporation, RURAL/METRO OF CENTRAL COLORADO, INC., a Delaware corporation,
RURAL/METRO OF CENTRAL OHIO, INC., a Delaware corporation, RURAL/METRO OF
COLORADO, a Delaware corporation, RURAL/METRO OF GEORGIA, INC., a Delaware
corporation, RURAL/METRO OF GREATER SEATTLE, INC., a Washington corporation,
RURAL/METRO OF INDIANA, INC., a Delaware corporation, RURAL/METRO OF INDIANA,
L.P., a Delaware limited partnership, By: THE AID AMBULANCE COMPANY, INC., a
Delaware corporation, Its General Partner, RURAL/METRO OF INDIANA II, L.P., a
Delaware limited partnership, By: THE AID AMBULANCE COMPANY, INC., a Delaware
corporation, Its General Partner, RURAL/METRO OF KENTUCKY, INC., a Delaware
corporation, RURAL/METRO OF MISSISSIPPI, INC., a Delaware corporation,
RURAL/METRO OF NEBRASKA, INC., a Delaware corporation, RURAL/METRO OF NEVADA,
INC., a Delaware corporation, RURAL/METRO OF NEW YORK, INC., a Delaware
corporation, RURAL/METRO OF NORTH FLORIDA, INC., a Florida corporation,
RURAL/METRO OF NORTH TEXAS, L.P., By: R/M OF TEXAS G.P., INC., a Delaware
corporation, Its General Partner, RURAL/METRO OF NORTHERN OHIO, INC., a Delaware
corporation, RURAL/METRO OF OHIO, INC., a Delaware corporation, RURAL/METRO OF
OREGON, INC., a Delaware corporation, RURAL/METRO OF ROCHESTER, INC., a New York
corporation, RURAL/METRO OF SAN DIEGO, INC., a California corporation,
RURAL/METRO OF SOUTH CAROLINA, INC., a Delaware corporation, RURAL/METRO OF
SOUTH DAKOTA, INC., a Delaware corporation, RURAL/METRO OF SOUTHERN OHIO, INC.,
an Ohio corporation, RURAL/METRO OF TENNESSEE, L.P., a Delaware limited
partnership, By: R/M OF TENNESSEE G.P., INC., a Delaware corporation, Its
General Partner, RURAL/METRO OF TEXAS, INC., a Delaware corporation, RURAL/METRO
OF TEXAS, L.P., a Delaware limited partnership, By: R/M OF TEXAS G.P., INC., a
Delaware corporation, Its General Partner, RURAL/METRO PROTECTION SERVICES,
INC., an Arizona corporation, RURAL/METRO TEXAS HOLDINGS, INC., a Delaware
corporation, SW GENERAL, INC., an Arizona corporation, SIOUX FALLS AMBULANCE,
INC., a South Dakota corporation, SOUTH GEORGIA EMERGENCY MEDICAL SERVICES,
INC., a Georgia corporation, SOUTHWEST AMBULANCE AND RESCUE OF ARIZONA, INC., an
Arizona corporation, SOUTHWEST AMBULANCE OF CASA GRANDE, INC., an Arizona
corporation, SOUTHWEST AMBULANCE OF TUCSON, INC., an Arizona corporation,
SOUTHWEST GENERAL SERVICES, INC., an Arizona corporation, THE AID AMBULANCE
COMPANY, INC., a Delaware corporation, THE AID COMPANY, INC., an Indiana
corporation, TOWNS AMBULANCE SERVICE, INC., a New York corporation, VALLEY FIRE
SERVICE, INC., a Delaware corporation, W & W LEASING COMPANY, INC., an Arizona
corporation

                                          By: /s/  John S. Banas III
                                              ---------------------------------
                                                   John S. Banas III
                                                   Secretary
<PAGE>   18
                                    EXHIBIT A

                          FORM OF CASH FLOW PROJECTION

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