SEC Info - Pinkertons Inc - DEF 14A

SEC Info

Home

My Interests

Help

Please Sign In

Pinkertons Inc · DEF 14A · For 4/24/97

Filed On 3/24/97 · SEC File 0-03017 · Accession Number 898430-97-1122

  As Of               Filer                 Filing     On/For/As Docs:Pgs              Issuer               Agent

 3/24/97  Pinkertons Inc                    DEF 14A     4/24/97    1:25                                     Donnelley R R & S..05/FA

Definitive Proxy Solicitation Material · Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Notice and Proxy Statement                 25    131K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) C. Michael Carter Directors' Compensation Gerald D. Murphy J. Kevin Murphy Long-term incentive plan Robert H. Smith Security Ownership of Certain Beneficial Owners
1	1st Page
3	C. Michael Carter
5	Security Ownership of Certain Beneficial Owners
11	Directors' Compensation
18	Long-term incentive plan
19	Gerald D. Murphy
"	J. Kevin Murphy
"	Robert H. Smith

DEF 14A 1st Page of 25 TOC Top Previous Next Bottom Just 1st
Sponsored Ads...

================================================================================

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

PINKERTON'S, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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

(2) Aggregate number of securities to which transaction applies:

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

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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

(4) Proposed maximum aggregate value of transaction:

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

(5) Total fee paid:

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

[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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

(2) Form, Schedule or Registration Statement No.:

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

(3) Filing Party:

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

(4) Date Filed:

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

Notes:

DEF 14A 2nd Page of 25 TOC 1st Previous Next Bottom Just 2nd

[LOGO OF PINKERTON'S, INC.]

WORLD SUPPORT CENTER
15910 Ventura Boulevard
Suite 900
Encino, CA 91436-2810

March 24, 1997

To Our Stockholders:

You are cordially invited to attend the Annual Meeting of Stockholders of
Pinkerton's, Inc. on Thursday, April 24, 1997, at 2:00 p.m. local time. The
meeting will be held at the Westwood Marquis Hotel and Gardens, 930 Hilgard
Avenue, Los Angeles, California.

At the meeting, stockholders will be asked to vote for the election of three
directors for a term of three years, to approve an annual incentive plan for
the President and Chief Executive Officer and to ratify the appointment of the
Company's independent auditors.

We hope you will be able to attend the Annual Meeting personally. Your vote
is important. To ensure that your shares are represented, even if you plan to
attend the meeting in person, we ask that you complete, date, sign and return
the enclosed proxy card in the accompanying envelope today.

Stockholders of record at the close of business on March 5, 1997 will be
entitled to vote at the meeting. A copy of the Company's Annual Report for the
fiscal year ended December 27, 1996 is being delivered herewith to each
stockholder of the Company.

We sincerely appreciate your interest in Pinkerton and look forward to seeing
you on Thursday, April 24, 1997.

Sincerely,

/s/ Thomas W. Wathen /s/ Denis R. Brown

Thomas W. Wathen Denis R. Brown
Chairman of the Board President and Chief
Executive Officer

DEF 14A 3rd Page of 25 TOC 1st Previous Next Bottom Just 3rd

PINKERTON'S, INC.
15910 VENTURA BOULEVARD
SUITE 900
ENCINO, CALIFORNIA 91436-2810

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

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 1997

----------------
To the Stockholders of
PINKERTON'S, INC.

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Pinkerton's, Inc. (the "Company") will be held at the Westwood Marquis Hotel
and Gardens, 930 Hilgard Avenue, Los Angeles, California on Thursday, April
24, 1997, at 2:00 p.m. local time, to consider and vote on the following
proposals, as more fully described in the attached Proxy Statement:

1. To elect three directors of the Company for a term of three years;

2. To approve a performance-based annual incentive compensation plan for
the President and Chief Executive Officer of the Company;

3. To ratify the selection of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ending December 26, 1997; and

4. To consider and transact such other business as may properly come
before the Annual Meeting.

Stockholders of the Company of record at the close of business on March 5,
1997 are entitled to receive notice of and to vote at the Annual Meeting or at
any adjournment thereof.

The Company's 1996 Annual Report to Stockholders and the Company's Proxy
Statement relating to actions to be taken at the Annual Meeting are enclosed
with this notice. The Annual Report is not incorporated in, and is not
considered a part of, the proxy solicitation material.

ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. YOU ARE URGED
TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT TODAY IN THE
ENCLOSED ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. IF YOU ATTEND
THE MEETING AND WISH TO DO SO, YOU MAY VOTE YOUR SHARES IN PERSON IF YOU
FOLLOW THE PROCEDURE IN THE PROXY STATEMENT, EVEN IF YOU HAVE SIGNED AND
RETURNED YOUR PROXY CARD.

By Order of the Board of Directors

/s/ C. Michael Carter

C. Michael Carter
Corporate Secretary
Encino, California
March 24, 1997

DEF 14A 4th Page of 25 TOC 1st Previous Next Bottom Just 4th

PINKERTON'S, INC.
15910 VENTURA BOULEVARD
SUITE 900
ENCINO, CALIFORNIA 91436-2810

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

PROXY STATEMENT

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

SOLICITATION

This Proxy Statement is furnished in connection with the solicitation of the
enclosed proxy by the Board of Directors of Pinkerton's, Inc. (the "Company")
for use at the Annual Meeting of Stockholders of the Company to be held on
Thursday, April 24, 1997, at 2:00 p.m. local time, at the Westwood Marquis
Hotel and Gardens, 930 Hilgard Avenue, Los Angeles, California, or at any
adjournment of such meeting. The Proxy Statement and the enclosed form of
proxy are first being sent to stockholders on or about March 24, 1997. The
cost of solicitation of proxies for the Annual Meeting, including reasonable
expenses of brokers and others for forwarding proxy materials to beneficial
owners of shares, will be paid by the Company. Solicitation will be made
primarily by mail, and may also be made by any form of telecommunication by
officers or by other employees of the Company.

The shares represented by the enclosed proxy will be voted at the Annual
Meeting in accordance with the instructions contained therein if properly
executed and delivered. If no choice is specified, shares represented by
properly executed and delivered proxies will be voted in accordance with the
recommendations of the Board of Directors set forth herein and, with respect
to any other item of business that may come before the Annual Meeting, in
accordance with the best judgment of the proxy holders. Any stockholder
executing a proxy has the power to revoke it at any time before it is voted by
filing either a written notice of revocation or a duly executed proxy bearing
a later date with the Corporate Secretary of the Company at 15910 Ventura
Boulevard, Suite 900, Encino, California 91436-2810. Proxies may also be
revoked by any stockholder present at the Annual Meeting who elects to vote
his or her shares in person after giving the Secretary of the Annual Meeting
notice in writing that the proxy is revoked.

VOTING INFORMATION

Only stockholders of record at the close of business on March 5, 1997 are
entitled to receive notice of and to vote at the Annual Meeting. On the record
date, 8,363,355 shares of the Company's Common Stock, par value $.001 per
share (the "Common Stock"), were outstanding and eligible to vote. The holders
of Common Stock on the record date are entitled to one vote for each share of
Common Stock held upon all matters to be considered at the Annual Meeting, or
at any adjournment thereof.

A majority of the outstanding shares of Common Stock must be represented in
person or by proxy at the Annual Meeting to constitute a quorum for the
transaction of business. The stockholders present at a duly called or held
meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave
less than a quorum. In the absence of a quorum at any meeting or any
adjournment thereof, a majority in voting interest of the stockholders present
in person or by proxy and entitled to vote thereat or, in the absence
therefrom of all the stockholders, any officer entitled to preside at or to

DEF 14A 5th Page of 25 TOC 1st Previous Next Bottom Just 5th

act as secretary of such meeting may adjourn such meeting from time to time.
At any such adjourned meeting at which a quorum is present, any business may
be transacted which might have been transacted at the meeting as originally
called.

The holders of Common Stock do not have the right to cumulative voting. An
affirmative vote of a majority of the shares present in person or by proxy and
entitled to vote thereat and thereon is required for approval of each proposal
submitted to stockholders for consideration, other than the election of
directors. With regard to the election of directors, votes may be cast in
favor or withheld. The three nominees for director receiving the highest
number of votes cast by stockholders entitled to vote for the election of
directors will be elected. Proxies will be received and tabulated by the
registrar and transfer agent for the Common Stock. Votes cast in person at the
meeting will be tabulated by an election inspector appointed by the Company.
Abstentions and "broker non-votes" are each included in the determination of
the number of shares present and voting, with each tabulated separately.
Abstentions are counted in tabulations of the votes cast on proposals
presented to the stockholders, whereas broker non-votes are not counted for
purposes of determining whether a proposal has been approved.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table and notes thereto set forth certain information
regarding the beneficial ownership of Common Stock, as of March 5, 1997 unless
otherwise indicated, by all those known by the Company to be beneficial owners
of more than five percent of its Common Stock.

· Download Table

NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF COMMON
OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED STOCK OUTSTANDING
------------------- ------------------------- -----------------

Thomas W. Wathen(1).......... 2,773,536 33.1
15910 Ventura Blvd.
Suite 900
Encino, CA 91436
Southeastern Asset
Management, Inc.(2)......... 858,400 10.3
6075 Poplar Avenue
Suite 900
Memphis, TN 38119
Tweedy, Browne Company
L.P./TBK Partners, L.P./
Vanderbilt Partners,
L.P.(3)..................... 602,560 7.2
52 Vanderbilt Avenue
New York, NY 10017

--------
(1) Mr. Wathen is Chairman of the Board of Directors of the Company. The
Thomas W. Wathen Trust (the "Trust") and the Thomas W. Wathen Charitable
Remainder Unitrust (the "Unitrust") hold of record 2,707,554 shares and
44,482 shares of Mr. Wathen's Common Stock, respectively. The Trust, which
is revocable, and the Unitrust, which is irrevocable, were established for
the sole benefit of Mr. Wathen during his lifetime. Mr. Wathen has sole
voting and investment power with respect to all shares shown as
beneficially owned, subject to community property laws where applicable.
Also included are 21,500 shares of Common Stock issuable under options
exercisable currently or within sixty days.
(2) As of December 31, 1996, based on public filings. According to public
filings, Southeastern Asset Management, Inc., an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940, has
sole voting and dispositive power over 436,400 of such shares, sole
dispositive and no voting power over 52,000 of such shares, and shared
voting and dispositive power over 370,000 of such shares.

DEF 14A 6th Page of 25 TOC 1st Previous Next Bottom Just 6th

(3) As of July 25, 1996, based on public filings. According to public filings,
Tweedy, Browne Company L.P., TBK Partners, L.P. and Vanderbilt Partners
L.P. disclaim membership in a "group" within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended. According to
public filings, Tweedy, Browne Company L.P., a broker-dealer and
investment advisor registered with the Securities and Exchange Commission,
has sole voting and dispositive power over 505,295 of such shares and no
voting power and sole dispositive power over 69,665 of such shares, TBK
Partners, L.P. has sole voting and dispositive power over 15,500 of such
shares, and Vanderbilt Partners, L.P. has sole voting and dispositive
power over 12,100 of such shares.

SECURITY OWNERSHIP OF MANAGEMENT

The following table and notes thereto set forth certain information
regarding the beneficial ownership of the Company's Common Stock as of March
5, 1997 by each of the current directors and nominees of the Company, the
current executive officers named in the Summary Compensation Table, and by all
directors and current executive officers of the Company as a group. Unless
otherwise indicated, the persons named in the table below have sole voting and
investment power with respect to all securities shown as beneficially owned by
them, subject to community property laws where applicable. An asterisk denotes
beneficial ownership of less than one percent.

· Download Table

AMOUNT AND PERCENT OF
NAME OR NUMBER OF NATURE OF SHARES COMMON STOCK
PERSONS IN GROUP BENEFICIALLY OWNED OUTSTANDING
----------------- ------------------ ------------

Thomas W. Wathen......................... 2,773,536(1) 33.1
Denis R. Brown........................... 223,750(2) 2.6
C. Michael Carter........................ 25,500(3) *
James P. McCloskey....................... 26,500(4) *
Don W. Walker............................ 43,494(5) *
Michael A. Stugrin....................... 750(6) *
Peter H. Dailey.......................... 15,500(7) *
John A. Gavin............................ 11,000(6) *
James R. Mellor.......................... -- --
Gerald D. Murphy......................... 16,703(8) *
J. Kevin Murphy.......................... 13,600(9) *
Robert H. Smith.......................... 14,000(10) *
William H. Webster....................... 11,000(6) *
All directors and executive officers as a
group (16 persons)...................... 3,183,083(11) 36.3

--------
(1) See footnote (1) under "Security Ownership of Certain Beneficial Owners."
(2) Includes 216,250 shares subject to options exercisable currently or
within sixty days.
(3) Includes 24,500 shares subject to options exercisable currently or within
sixty days. Mr. Carter has shared voting and investment power with
respect to 1,000 of such shares.
(4) Includes 24,500 shares subject to options exercisable currently or within
sixty days.
(5) Includes 30,500 shares subject to options exercisable currently or within
sixty days.
(6) Consists of shares subject to options exercisable currently or within
sixty days.
(7) Includes 14,500 shares subject to options exercisable currently or within
sixty days.
(8) Includes 16,000 shares subject to options exercisable currently or within
sixty days.
(9) Includes 13,500 shares subject to options exercisable currently or within
sixty days.
(10) Includes 11,000 shares subject to options exercisable currently or within
sixty days. Mr. Smith has shared voting and investment power with respect
to 3,000 of such shares.
(11) Includes 402,750 shares subject to options exercisable currently or
within sixty days. See footnote (1) under "Security Ownership of Certain
Beneficial Owners."

DEF 14A 7th Page of 25 TOC 1st Previous Next Bottom Just 7th

1998 STOCKHOLDER PROPOSALS

Any proposal that a stockholder intends to present at the Company's 1998
annual meeting of stockholders must be received by the Company at its
principal executive office not later than November 24, 1997 to be considered
for inclusion in the Company's proxy materials for that meeting. To ensure
prompt receipt of the stockholder proposals by the Company, the proposals
should be sent by certified mail, return receipt requested, to Pinkerton's,
Inc., 15910 Ventura Boulevard, Suite 900, Encino, California 91436-2810,
Attention: Corporate Secretary. Submission by a stockholder of a proposal does
not guarantee its inclusion in the proxy material. Proposals must comply with
the Company's By-Laws and federal proxy rules and any applicable state rules
relating to stockholder proposals to be included in the Company's 1998 proxy
solicitation material.

PROPOSAL 1--ELECTION OF DIRECTORS

NOMINEES FOR ELECTION

The Certificate of Incorporation of the Company divides the Board of
Directors into three classes as nearly equal in number as possible, and the
members of each class are elected for a term of three years. One class of
directors is elected annually. The Board of Directors currently has nine
members, three of whom are Class III Directors with terms expiring at this
year's Annual Meeting, namely, John A. Gavin, Robert H. Smith and Thomas W.
Wathen. The Company's By-Laws provide that the Board shall have nine members.
Accordingly, at this year's Annual Meeting, three directors are to be elected
as Class III Directors to serve for three-year terms expiring at the Company's
Annual Meeting of Stockholders in 2000 and until their successors are elected
and qualified, subject, however, to prior death, resignation, retirement,
disqualification or removal from office.

Each of the three nominees, John A. Gavin, Robert H. Smith and Thomas W.
Wathen, is an incumbent director and has consented to continue to serve as a
director if elected. If at the time of the Annual Meeting any of such nominees
should be unable or should decline to serve, the discretionary authority
provided in the proxies received will be exercised to vote for a substitute
nominee or nominees as designated by the Board of Directors, unless otherwise
instructed. The Board of Directors has no reason to believe that any nominee
will be unable or unwilling to serve.

The three nominees to the Board of Directors receiving the highest number of
votes cast by stockholders entitled to vote at the Annual Meeting will be
elected.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION
OF JOHN A. GAVIN, ROBERT H. SMITH AND THOMAS W. WATHEN AS CLASS III DIRECTORS,
AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED "FOR" THIS
PROPOSAL UNLESS A VOTE AGAINST THE PROPOSAL OR AN ABSTENTION IS SPECIFICALLY
INDICATED.

BIOGRAPHICAL INFORMATION OF NOMINEES

John A. Gavin (65) has been a director of the Company since April 1993. Mr.
Gavin is the founder and is currently Chairman of Gamma Services, Inc., an
international venture capital and consulting firm. Mr. Gavin is also serving
as a Managing Director of Hicks, Muse, Tate & Furst (Latin America) and as a
director of Atlantic Richfield Corporation, Dresser Industries, Wirekraft
Holdings Corp., Krause's Furniture Co. and the Hotchkis & Wiley Funds. From
1987 to 1990, Mr. Gavin served as President of Univisa Satellite
Communications, a Spanish-speaking broadcast communications network, and from
1986 to 1987 he was a Vice President of Atlantic

DEF 14A 8th Page of 25 TOC 1st Previous Next Bottom Just 8th

Richfield Corporation. In 1981, Mr. Gavin was appointed Ambassador to Mexico
by President Reagan and served in this capacity until 1986. Mr. Gavin was also
U.S. Advisor to the Secretary General of the Organization of American States
from 1961 through 1974. He remains a consultant to the U.S. State Department.
Mr. Gavin is Chairman of the Compensation Committee and a member of the
Nominating and Strategic Planning and Marketing Committees of the Company's
Board of Directors.

Robert H. Smith (61) has been a director of the Company since April 1993.
Mr. Smith is currently a Managing Director of Smith & Crowley, Inc., an
investment banking firm specializing in banks. He serves as a director of
Edison International, J. G. Boswell Co., Oasis Residential, Inc., Altris
Software, Inc. and Marine National Bank. From 1961 to 1992, Mr. Smith served
in numerous managerial positions with Security Pacific National Bank and
Security Pacific Corporation. From 1991 until April 1992, he served as
Chairman of the Board and Chief Executive Officer of Security Pacific
Corporation and Chairman of the Board of Security Pacific National Bank. Mr.
Smith also served during 1992 as a member of the Board and President and Chief
Operating Officer of BankAmerica Corporation and Bank of America NT & SA. Mr.
Smith is Chairman of the Auditing Committee and a member of the Compensation
Committee of the Company's Board of Directors.

Thomas W. Wathen (67) joined California Plant Protection, Inc. ("CPP") in
1963 and served on a full-time basis as President, Chief Executive Officer and
Chairman of the Board of CPP from 1964 to January 1988. Since the acquisition
of "old" Pinkerton's, Inc. by CPP (through merger) in January 1988, Mr. Wathen
has served as President (until October 1990 and from July 1992 until April
1994), Chief Executive Officer (until April 1994) and Chairman of the Board of
the Company. For the five years prior to joining CPP, Mr. Wathen served as a
security representative for North American Aviation and as a security director
for RCA and Mattel Toys. From 1951 to 1958, Mr. Wathen served as an industrial
security officer for the United States Air Force and special agent for the
Department of Defense. Mr. Wathen is Chairman of the Nominating Committee and
a member of the Strategic Planning and Marketing Committee of the Company's
Board of Directors.

BIOGRAPHICAL INFORMATION OF CONTINUING DIRECTORS

Denis R. Brown (57) was elected the President and Chief Executive Officer
and a director (currently, Class II) of the Company in April 1994. Prior to
joining the Company, Mr. Brown served at Concurrent Computer Corporation as
Chairman of the Board and Chief Executive Officer from April 1992 until August
1993, as Chairman of the Board, President and Chief Executive Officer from
July 1991 until April 1992, and as Vice Chairman of the Board, President and
Chief Executive Officer from September 1990 until July 1991. Mr. Brown served
as President and Chief Executive Officer of Penn Central Industries Group from
May 1985 until January 1990. Prior to joining Penn Central, Mr. Brown spent 15
years with ITT Corporation, serving as Corporate Vice President and Group
Executive of the Defense Space Group and as President of the Defense
Communications Division. Mr. Brown is also serving as a director of Farr
Company, a producer and distributor of filters and filtration systems, and
CalMat Co., a construction materials supplier and property development and
management company. Mr. Brown is a member of the Strategic Planning and
Marketing Committee of the Company's Board of Directors.

Peter H. Dailey (66) has been a director (currently, Class II) of the
Company since February 1990. Mr. Dailey is the Chairman and Chief Executive
Officer of Memorex Telex N.V., the Chief Executive Officer of Memorex Telex
Corporation and the Chairman of Enniskerry Financial, Ltd., a private
investment company. In October 1996, Memorex Telex Corporation filed for
reorganization under Chapter 11 of the United States Bankruptcy Code.
Previously, Mr. Dailey was Vice Chairman, director and principal stockholder
of the Interpublic Group of Companies, a holding company for advertising
agencies. Mr. Dailey also is a director of Chicago Title and Trust Company,
Jacobs Engineering Group, Inc., Sizzler International, and The Wirthlin Group.
Mr. Dailey has served as Ambassador to Ireland and as Special Presidential
Envoy to NATO countries

DEF 14A 9th Page of 25 TOC 1st Previous Next Bottom Just 9th

for intermediate nuclear weapons negotiations. Mr. Dailey also served as a
member of the eleven-member Presidential Advisory Committee on Arms Control
and Disarmament. He was appointed by President Reagan and reaffirmed by
President Bush in the same capacity. From 1985 to 1988, he served in the
Central Intelligence Agency as Counselor to William Casey, Director of Central
Intelligence. He also served as the principal media strategist in the election
campaigns of President Nixon in 1972, President Reagan in 1980, and the
primary campaign of President Ford in 1976. In 1984, he served as Senior
Advisor to the re-election campaign of President Reagan. Prior to government
service, he was a director of Walt Disney Productions and Cement Roadstone
Corporation PLC of Ireland. Mr. Dailey is a member of the Audit and Nominating
Committees of the Company's Board of Directors.

James R. Mellor (66) has been a director (currently, Class II) of the
Company since December 1996. Mr. Mellor is the Chairman and Chief Executive
Officer of General Dynamics. He became President and Chief Operating Officer
in 1991 and President and Chief Executive Officer in 1993, and was elected
Chairman in 1994. Mr. Mellor has served at General Dynamics as a director
since 1981. He also served as Executive Vice President--Commercial Systems and
Corporate Planning from 1981 to 1982, then as Executive Vice President--
Corporate Planning and International until 1983, then as Executive Vice
President for Marine, Business Systems and Corporate Planning until 1986, and
then as Executive Vice President--Marine, Land Systems and International until
1991. Before joining General Dynamics, Mr. Mellor was President and Chief
Operating Officer of AM International, Inc. and a director there since 1977.
Prior to that he spent 18 years with Litton Industries in a variety of
management and engineering positions. Mr. Mellor also serves as a director of
U.S. Surgical Corporation, Bergen Brunswig Corporation, the Kerr Group and
Computer Sciences Corporation. As of February 1997, Mr. Mellor is a member of
the Compensation Committee of the Board of Directors.

Gerald D. Murphy (69) has been a director (currently, Class I) of the
Company or of its predecessor corporation since 1975. Mr. Murphy is Chairman
of the Board and Chief Executive Officer of ERLY Industries, Inc. (formerly
Early California Industries), a publicly-held company that owns Comet Rice,
Inc., Sierra Wine Company and Chemonics Industries, Inc. Mr. Murphy is also
Chairman of the Board of Directors of American Rice, Inc. and has served as a
director for Sizzler, Inc., Wynn's International, Inc. and Leisure Technology,
Inc. Mr. Murphy was a member of the Compensation Committee of the Company's
Board of Directors throughout 1996 and through February 1997, after which he
became a member of the Audit Committee instead.

J. Kevin Murphy (70) has been a director (currently, Class I) of the Company
since October 1990. Mr. Murphy is currently a business consultant to various
companies. He serves as a director of Health Systems International, Inc. and
as a member of the Board of Trustees of St. Mary College in Leavenworth,
Kansas. He served as Vice Chairman and a director of Qual-Med, Inc. from 1990
to February 1994. Mr. Murphy was President of 655 Associates, Inc., a crisis
management and management consulting firm from 1985 to 1991. He is a past
president of Purolator Courier Corporation and Trailways, Inc. Mr. Murphy is
Chairman of the Strategic Planning and Marketing Committee and a member of the
Compensation Committee of the Company's Board of Directors.

William H. Webster (73) has been a director (currently, Class I) of the
Company since August 1992 and a partner of the law firm of Milbank, Tweed,
Hadley & McCloy since September 1991. Judge Webster is a director of Anheuser-
Busch Companies, Inc., Maritz, Inc., TLC Beatrice International Holdings, Inc.
and Next WAVE Telecom, Inc. From May 1987 to September 1991, he served as the
Director of Central Intelligence and directed the Central Intelligence Agency.
From February 1978 to May 1987, Judge Webster served as the Director of the
Federal Bureau of Investigation. In 1970, Judge Webster was appointed a Judge
of the United States District Court for the Eastern District of Missouri, and
in 1973 was elevated to the United States Court of Appeals for the Eighth
Circuit. Judge Webster is a member of the Audit and Nominating Committees of
the Company's Board of Directors.

DEF 14A 10th Page of 25 TOC 1st Previous Next Bottom Just 10th

CORPORATE GOVERNANCE

The Board of Directors, which held a total of six meetings in 1996, is
currently composed of nine members. If all the nominees are elected by the
stockholders at the Annual Meeting, the composition of the Board will be seven
directors whose principal occupation or employment is and has been outside the
Company, one director who is currently an executive officer of the Company and
one director who is a past President and Chief Executive Officer of the
Company.

In addition to membership on the Board, every director served on one or more
of four Committees of the Board in 1996, except for James R. Mellor, who
joined the Board in December 1996. The directors spend a considerable amount
of time preparing for Board and Committee meetings and, in addition, are
called upon for their counsel between meeting dates. In 1996, each director
attended at least 75% of the total of the meetings of the Board and the
Committees of which he was a member, except Mr. Dailey, who attended 60% of
such meetings.

As permitted under Delaware Law and the Certificate of Incorporation and By-
Laws of the Company, the Board of Directors has established and delegated
certain authority and responsibility to four standing committees: the Audit
Committee; the Compensation Committee; the Nominating Committee; and the
Strategic Planning and Marketing Committee. The Board annually reviews the
authority and responsibility delegated to each Committee at the organizational
meeting of the full Board immediately following the annual meeting of the
Company's stockholders. The table below shows current Committee membership. An
asterisk denotes Chairman of the Committee.

· Download Table

AUDIT COMPENSATION STRATEGIC PLANNING AND
COMMITTEE COMMITTEE NOMINATING COMMITTEE MARKETING COMMITTEE
--------------- --------------- -------------------- ----------------------

Peter H. Dailey John A. Gavin* Peter H. Dailey Denis R. Brown
Gerald D. Murphy James R. Mellor John A. Gavin John A. Gavin
Robert H. Smith* J. Kevin Murphy Thomas W. Wathen* J. Kevin Murphy*
William H. Webster Robert H. Smith William H. Webster Thomas W. Wathen

The principal responsibilities of the Audit Committee include the review of
all financial statements and notes thereto contained in public filings and
releases, matters pertaining to the selection, compensation, independence and
examination of the Company by its independent accountants, internal accounting
controls and procedures, including the performance of the Company's Internal
Audit Department and the capital uses and needs of the Company. The Audit
Committee held five meetings during 1996.

The annual and long-term compensation of the Company's Named Officers (as
defined hereinafter) and Corporate Vice Presidents is determined by the
Compensation Committee. The Committee also has oversight of the incentive
compensation plans and benefit programs for the Company's officers,
administers the Company's stock incentive plans, and with a member of
management administers the Company's Supplemental Retirement Income Plan (the
"SRIP"). The Committee is comprised entirely of outside, independent
directors. The Committee also has responsibility for management development
and succession programs. The Compensation Committee met six times during 1996.

The Nominating Committee identifies, examines and recommends to the full
Board those candidates it believes possess the professional expertise and
demonstrated excellence and integrity to be nominated as directors to fill
vacancies on the Board, newly created directorships and expired terms of
directors. The Nominating Committee would also review any nomination for the
Board made by a stockholder. Under the Company's By-Laws, a stockholder may
nominate a person for election to the Board by sending the Corporate

DEF 14A 11th Page of 25 TOC 1st Previous Next Bottom Just 11th

Secretary written notice 50 to 75 days in advance of the annual meeting, or
within ten days following the public disclosure or notice to stockholders of
the annual meeting if such disclosure or notice is less than 60 days in
advance of the meeting. The stockholder's notice must include certain
information prescribed by the By-Laws to be valid. The Committee also makes
recommendations to the Board regarding its committees and their membership
(other than the Committee's own membership) and chairmanship (except the
Compensation Committee elects its own chairman). The Nominating Committee met
twice during 1996.

The Strategic Planning and Marketing Committee oversees the development and
implementation of the Company's ongoing five-year strategic plans and reviews
and discusses with management significant developments within the sales and
marketing area. The Committee reviews Company achievement of strategic
objectives and compares actual performance to plan and examines potential
strategic alliances for the Company through joint ventures, business
combinations and similar means. The Strategic Planning and Marketing Committee
held four meetings in 1996.

DIRECTORS' COMPENSATION

Non-employee directors receive a quarterly fee of $5,500, plus a quarterly
fee of $750 for each Committee chairmanship they hold. Non-employee directors
also receive $1,000 per Board meeting attended (in person or by telephone)
and, for Board Committee members, per Committee meeting attended (in person or
by telephone). In addition, the Company reimburses directors for all
reasonable travel and lodging expenses incurred in connection with attending
meetings. The Company also provides a supplemental health care program and
business travel accident insurance for the benefit of its senior executives
and its outside directors.

The 1995 Pinkerton Performance and Equity Incentive Plan (the "Performance
Plan") provides that, commencing with the 1995 annual meeting of stockholders
of the Company, on the day of each annual meeting of stockholders during the
term of the plan, each Director who is not an employee of the Company (a "Non-
Employee Director") shall be granted a non-qualified stock option to purchase
3,000 shares of Common Stock, provided that the Non-Employee Director
continues in office after said annual meeting. Each such stock option will
have a term of ten years and will not be exercisable until such Non-Employee
Director has completed one full year of service as a Non-Employee Director
with the Company after the date on which the option was granted. The price per
share of Common Stock to be paid by the Non-Employee Director will equal the
fair market value of one share of Common Stock on the date the stock option is
granted and the purchase price of the shares of Common Stock as to which such
an option is exercised must be paid only in cash. Each director other than Mr.
Brown and Mr. Mellor was granted such a stock option on April 26, 1996.

The Performance Plan also provides that each Non-Employee Director may elect
to receive any or all of his or her annual retainer as a director in the form
of Common Stock. The election must be in writing and must be delivered to the
Corporate Secretary of the Company at least six months and one business day
before the services are rendered giving rise to such compensation. The total
number of shares of Common Stock granted to a Non-Employee Director who elects
to forego fees will be determined by dividing the amount of the deferral by
the fair market value on the last business day of the quarter in which such
fees would have been paid in the absence of an election.

In connection with Mr. Wathen's retirement as the Company's President and
Chief Executive Officer in April 1994, the Company and Mr. Wathen entered into
a personal services agreement that initially continues through the annual
meeting of stockholders to be held in the year 2000, and shall be extended at
that time automatically through April 20, 2004 unless the Board of Directors
unanimously resolves not to extend the agreement. The agreement also provides
for termination upon Mr. Wathen's resignation, death or disability or

DEF 14A 12th Page of 25 TOC 1st Previous Next Bottom Just 12th

by the Company with or without cause. The agreement provides for the payment
to Mr. Wathen of $100,000 per year for service in his capacity as Chairman of
the Board (reduced by any director's fees otherwise payable to him by the
Company) and at least $200,000 per year for services as a consultant to the
Company. Mr. Wathen is also eligible to receive annual cash bonuses in the
discretion of the Board of Directors and to participate, to the same extent as
other non-employee members of the Board, in any stock option awards to
directors. The personal services agreement also entitles Mr. Wathen to use a
Company owned or financed automobile, to use Company office space and support
staff, to receive certain specified term life and medical insurance coverage,
to obtain reimbursement for reasonable business expenses incurred while on
Company business and, in the discretion of the Board of Directors, to
participate in other Company benefit programs maintained from time to time.
The personal services agreement calls for the payment to Mr. Wathen of an
annual retirement benefit payable in monthly installments of $25,000 for life
(provided that, if Mr. Wathen should die before a total of 180 monthly
payments shall have been made, the balance of such 180 payments shall continue
to be paid to Mr. Wathen's designated beneficiary) and, to the extent
practicable, must be made under and in accordance with the terms of the SRIP.
Unless the personal services agreement is terminated by the Company for
certain specified causes, Mr. Wathen will continue to receive such retirement
benefits. Under the personal services agreement, Mr. Wathen has demand and
"piggy-back" registration rights with respect to his holdings of Common Stock.

DEF 14A 13th Page of 25 TOC 1st Previous Next Bottom Just 13th

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the annual and long-term compensation for
services in all capacities to the Company for the three fiscal years ended
December 27, 1996, December 29, 1995 and December 30, 1994 of the Chief
Executive Officer, and each of the other four most highly compensated
executive officers (the "Named Officers").

· Enlarge/Download Table

LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------- ------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION UNDERLYING COMPENSATION
POSITION YEAR ($) ($) ($)(1) OPTIONS(#) ($)(2)
------------------ ---- ------- ------- ------------ ------------ ------------

Denis R. Brown*......... 1996 613,750 625,000 717 45,000 36,511
President and CEO 1995 566,826 283,250 603 -- 30,022
1994 376,534 188,267 106,177 285,000 64,687

C. Michael Carter*...... 1996 266,964 189,700 189 20,000 4,322
Executive Vice Presi- 1995 250,000 91,875 53,491 -- 29,653
dent, General Counsel 1994 63,462 22,212 12,412 45,000 624
and Corporate
Secretary

James P. McCloskey*..... 1996 266,158 189,000 183 20,000 11,826
Executive Vice Presi- 1995 250,000 92,969 44,950 -- 32,459
dent and Chief 1994 56,731 19,856 426 45,000 468
Financial Officer

Don W. Walker........... 1996 307,303 214,988 133 20,000 1,590
Executive Vice Presi- 1995 274,997 93,844 26,590 -- 4,116
dent, North American 1994 214,480 15,000 4,155 45,000 25,714
Operations

Michael A. Stugrin**.... 1996 143,077 66,156 19 3,000 708
Corporate Vice Presi- 1995 80,481 34,706 5,169 -- 464
dent, Strategic
Planning and Marketing

--------
* Amounts shown for 1994 are for employment during part of 1994.
** Not an executive officer prior to 1995. Amounts shown for 1995 are for
employment during part of 1995.
(1) The amounts shown represent reimbursement of personal income taxes payable
by such executive officer as a result of certain expenses paid and certain
benefits provided by the Company to such executive officer.
(2) The amounts shown for 1996 represent payments made under the Company's
executive medical expense reimbursement plan and, for Mr. Brown, $23,891
of premiums for disability insurance and $9,110 of premiums for
supplemental life insurance.

DEF 14A 14th Page of 25 TOC 1st Previous Next Bottom Just 14th

STOCK OPTIONS

The following tables contain information relating to grants of stock options
under the 1995 Pinkerton Performance and Equity Incentive Plan during fiscal
1996 to the Named Officers and the value at year end of options held by the
Named Officers.

OPTION GRANTS IN LAST FISCAL YEAR

· Enlarge/Download Table

INDIVIDUAL GRANTS
-------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SHARES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION -----------------------------
NAME GRANTED(1) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ---------- ------------ -------------- ---------- ------------- ---------------

Denis R. Brown.......... 45,000 20.5 18.50 2/15/06 523,555 1,326,790
C. Michael Carter....... 20,000 9.1 18.50 2/15/06 232,691 589,685
James P. McCloskey...... 20,000 9.1 18.50 2/15/06 232,691 589,685
Don W. Walker........... 20,000 9.1 18.50 2/15/06 232,691 589,685
Michael A. Stugrin...... 3,000 1.4 18.50 2/15/06 34,904 88,453

--------
(1) Options granted in 1996 vest over four years in equal installments.
(2) Calculated as a projected stock price, less the exercise price. The
projected stock price is calculated assuming that the stock price at the
date of grant appreciates at the indicated rate, compounded annually, over
the term of the option.

OPTION VALUES AT DECEMBER 27, 1996

· Download Table

NUMBER
OF SHARES VALUE
UNDERLYING OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DEC. 27, 1996(#) DEC. 27, 1996($)
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE(1)
---- ---------------- -------------------

Denis R. Brown....................... 133,750/196,250 1,079,375/1,468,125
C. Michael Carter.................... 15,750/49,250 143,625/376,375
James P. McCloskey................... 15,750/49,250 122,625/344,875
Don W. Walker........................ 21,750/53,250 121,125/353,875
Michael A. Stugrin................... 0/3,000 0/19,500

--------
(1) Computed based upon the difference between aggregate fair market value and
aggregate exercise price. The closing market price of the Common Stock on
December 27, 1996 was $25.00.

RETIREMENT PLAN

The Company maintains a Supplemental Retirement Income Plan (the "SRIP"),
which was substantially modified as of May 1, 1994 to simplify its terms and
benefit formulas. The SRIP establishes two retirement benefit levels: (i) a
benefit at age 62 of 3.5% of final five-year average compensation for each
full year of participation, up to a maximum of 52.5% (the "Level 1 Benefit");
and (ii) a benefit at age 62 of 2% of final five-year average compensation for
each full year of participation, up to a maximum of 40% (the "Level 2
Benefit"). The Level 1 Benefit applies to certain participants, generally
executive officers, including the Named

DEF 14A 15th Page of 25 TOC 1st Previous Next Bottom Just 15th

Officers, and the Level 2 Benefit applies to all other participants. An
employee must be recommended by the SRIP's administrative committee and
approved by the Board of Directors in order to participate in the SRIP. The
plan is not a qualified retirement plan under Section 401 of the Internal
Revenue Code.

Vesting of benefits under the SRIP normally occurs when a participant has
five years of SRIP participation. A participant's vested benefit under the
previous version of the SRIP as of April 30, 1994 (his or her "grandfathered
benefit") will not be reduced because of changes to the SRIP. A SRIP
participant with a grandfathered benefit will get the greater of the SRIP
benefit or his or her grandfathered benefit. A participant will receive his or
her full retirement benefit upon termination of employment after attaining age
62 or a reduced benefit upon termination of employment prior to age 62, but in
no event less than the grandfathered benefit. Subject to certain benefit
suspension provisions, a participant (or a participant's beneficiary) will
receive his or her retirement benefit for life or 180 months, whichever is
longer. Upon death prior to retirement, a participant's beneficiary will
receive a monthly payment for 180 months.

The following table shows the estimated annual Level 1 Benefit and Level 2
Benefit payable under the SRIP upon retirement at age 62 with representative
compensation and years of service credited to the participant.

ESTIMATED ANNUAL RETIREMENT BENEFITS

· Download Table

YEARS OF SERVICE
-------------------------------------------------------------
LEVEL 1 BENEFITS LEVEL 2 BENEFITS
FINAL FIVE YEAR -------------------------- ----------------------------------
AVERAGE COMPENSATION 5 10 15* 5 10 15 20*
-------------------- -------- -------- -------- ------- -------- -------- --------

$100,000 $ 17,500 $ 35,000 $ 52,500 $10,000 $ 20,000 $ 30,000 $ 40,000
200,000 35,000 70,000 105,000 20,000 40,000 60,000 80,000
300,000 52,500 105,000 157,500 30,000 60,000 90,000 120,000
400,000 70,000 140,000 210,000 40,000 80,000 120,000 160,000
500,000 87,500 175,000 262,500 50,000 100,000 150,000 200,000
600,000 105,000 210,000 315,000 60,000 120,000 180,000 240,000
700,000 122,500 245,000 367,500 70,000 140,000 210,000 280,000
800,000 140,000 280,000 420,000 80,000 160,000 240,000 320,000

--------
* Amounts represent maximum benefit possible for applicable level of benefit
and compensation.

The annual compensation used in the benefits calculation includes the
amounts earned as salary and bonus as shown above in the Summary Compensation
Table. Messrs. Brown, Carter, McCloskey, Walker and Stugrin are participants
in the SRIP and have two, two, two, five and one credited years of service for
purposes of the SRIP, respectively. However, the benefits of Messrs. Brown,
Carter, McCloskey and Walker are governed by amendments to the SRIP described
below. Retirement benefits are computed without regard to the withholding of
Social Security and related taxes.

During fiscal 1993, the SRIP was amended to provide that Mr. Wathen's
retirement benefit shall be $25,000 per month for life, as described above
under "Directors' Compensation."

During fiscal 1994, the SRIP was amended to provide that: (i) Mr. Brown's
retirement benefit under the SRIP will be 52.5% of his "final average monthly
compensation" as defined in his employment agreement described below under
"Agreements with Certain Officers," and that his benefit will vest, so long as
he remains an employee of the Company: 20%, 46.667%, 73.334% and 100% on April
19, 1999, August 7, 1999, August 7, 2000 and August 7, 2001, respectively, and
(ii) with respect to Mr. Carter and Mr. McCloskey, following

DEF 14A 16th Page of 25 TOC 1st Previous Next Bottom Just 16th

September 27, 1999 and October 4, 1999, respectively, their annual benefit
accrual rate under the SRIP will be 6.3% and 10.35%, respectively. The
amendment results in Messrs. Brown, Carter and McCloskey attaining the 52.5%
maximum Level 1 Benefit at age 62.

During fiscal 1996, the SRIP was amended to provide that Mr. Walker's annual
benefit accrual rate under the SRIP will be 5.25% in 1997 and 4.375%
thereafter. This amendment results in Mr. Walker attaining the 52.5% maximum
Level 1 Benefit at age 62.

The SRIP has no plan assets. The Company has purchased life insurance
policies on the lives of certain individual executives as an investment that
it may use to provide pre-retirement death benefits and retirement benefits.

EMPLOYMENT AGREEMENTS WITH CERTAIN OFFICERS

The Company has an employment agreement with Mr. Brown that continues until
August 7, 2001 and is automatically renewed annually thereafter until
terminated by Mr. Brown or the Company or until the annual meeting of
stockholders to be held in the year 2005. The Company will pay Mr. Brown a
base salary of $550,000 per annum, subject to increase from time to time in
the discretion of the Board of Directors. The agreement also provides that Mr.
Brown will have a target annual incentive bonus of 50% of base salary tied to
the achievement of certain Company financial and operational performance
objectives established annually by the Board at the outset of each fiscal
year; and that Mr. Brown's actual annual incentive bonus will decrease or
increase, up to a maximum percentage of base salary, depending on the
Company's actual performance compared to such objectives, in accordance with
formulas provided in the agreement. The Company and Mr. Brown amended the
agreement to raise the maximum percentage of base salary achievable from 75%
to 100%, effective for 1996 and thereafter. The amendment also provides that
Mr. Brown's annual incentive bonus plan will continue for fiscal 1997 and
thereafter only if approved by the stockholders.

Mr. Carter's and Mr. McCloskey's employment agreements with the Company
provide for a base salary of at least $250,000 per annum and a target annual
incentive bonus equal to 35% of base salary, all of which are subject to
annual review by the Board of Directors.

The employment agreements of Mr. Brown, Mr. Carter and Mr. McCloskey provide
that if such executive officer is terminated other than for death, disability,
retirement, cause or within one year following a change in control, as defined
in the agreements, the executive officer will receive a lump-sum cash payment
equal to the executive's then current annual salary or, in the case of Mr.
Brown, his then current annual salary multiplied by the greater of two or the
number of years left from the term of his employment agreement. If the
employment of such executive officer is terminated following a change in
control, he will receive, subject to limitation by tax regulations in certain
circumstances, a lump-sum cash payment equal to two times (or in the case of
Mr. Brown, 2.99 times) the sum of the executive's then current annual salary
plus the amount of his bonus for the most recently completed fiscal year (or
in the case of Mr. Brown, the most recently completed fiscal year for which a
bonus was earned). In 1995, the Board approved a Severance Plan for Executive
Vice Presidents that applies to Executive Vice Presidents that do not have
other severance arrangements with the Company and that are designated by the
Compensation Committee as entitled to the benefits of the plan. The benefits
provided by the plan are substantially the same as those described above for
Messrs. Carter and McCloskey. Mr. Walker is the only executive officer
designated as entitled to the benefits of the plan.

In October 1995, the Board also approved a Severance Plan for Corporate Vice
Presidents that applies to Corporate Vice Presidents that do not have other
severance arrangements with the Company and that are

DEF 14A 17th Page of 25 TOC 1st Previous Next Bottom Just 17th

designated by the Compensation Committee as entitled to the benefits of the
plan. The plan provides that if such executive officer is terminated
involuntarily other than for "cause", as such term is defined in the plan, the
executive officer will receive severance compensation, payable in
installments, equivalent to the continuation of the officer's monthly base
salary in effect on the termination date for six months thereafter; and the
Company will continue the officer's health plan benefits until the earlier of
six months after termination or the officer becomes employed. Mr. Stugrin is
one of the three Corporate Vice Presidents designated as entitled to the
benefits of the plan.

REPORT ON EXECUTIVE COMPENSATION
BY THE COMPENSATION COMMITTEE

The Company's Compensation Committee was established in 1988 and is
comprised entirely of independent outside members of the Company's Board of
Directors. The Committee reviews and approves each element of the executive
compensation program and assesses the overall effectiveness and
competitiveness of the program. In addition, the Committee administers the key
provisions of the executive compensation program according to the objectives
of the base salary program, annual incentive plan and long-term incentive
plan, and administers the Company's stock incentive plans. The Compensation
Committee also reviews with the Board in detail all aspects of compensation
for the Chief Executive Officer.

The Company has retained the services of Towers Perrin, a compensation
consulting firm, to assist the Company and the Committee in the review of the
compensation program and the performance of the Committee's other duties.

The remainder of this report consists of a statement about the Company's
executive compensation philosophy, a description of the key provisions of the
Company's executive compensation program and a specific discussion relating to
the compensation of the Company's President and Chief Executive Officer, Denis
R. Brown.

Any concerns of stockholders regarding executive compensation should be
addressed to the Company's Corporate Secretary.

COMPENSATION PHILOSOPHY

The goals of the executive compensation program are to enable the Company to
attract, motivate and retain the executive talent needed to support, implement
and reinforce the Company's strategic and business plans and to maximize the
returns to its stockholders.

The philosophy of the Company is to provide a compensation program that is
designed to reward achievement of the Company's goals and to provide total
compensation opportunities that are competitive when compared with those of
similar-size companies in service industries.

KEY PROVISIONS OF THE EXECUTIVE COMPENSATION PROGRAM

Base salaries. Base salaries are targeted at the 50th percentile for
comparable positions at similar-size companies. To make this comparison, the
Company refers to broad compensation surveys of the service industry and
general compensation surveys. In determining salaries and future increases,
the Company also considers factors such as individual performance,
departmental performance, current responsibilities and any changes therein,
individual salary history and inflation. The Company believes that its current
base salaries are generally consistent with its base salary objectives.

DEF 14A 18th Page of 25 TOC 1st Previous Next Bottom Just 18th

Annual incentive plan. The principal objective of the annual incentive plan
is to establish annual incentive targets that will bring the level of total
annual cash compensation (i.e., base salary plus annual incentive award) to
the 50th percentile for comparable positions at similar-size companies. The
plan allows for performance above target that could bring the level of total
annual cash compensation above this percentile. To make this comparison, the
Company refers to the same companies and surveys that are used to assess base
salaries. The Company believes that its current annual incentive targets are
generally consistent with its annual incentive objectives.

Each executive has a target bonus that is expressed as a percentage of base
salary. The target bonuses of the Executive Vice Presidents and the Corporate
Vice Presidents are 35% and 25% of annual base salary, respectively. Of the
target bonus amount, 75% of such amount is based on Company performance and
25% is based on individual performance. To measure Company performance for
fiscal 1996, the Committee established a net income goal as the sole
performance criteria for executives. To measure individual performance, the
Company and each employee establish specific, measurable objectives to achieve
during the year, the accomplishment of which determines individual performance
for bonus purposes. Achievement by the Company of 100% of its net income goal
and achievement by the employee of 100% of his or her specific objectives
would result in the employee receiving 100% of the target bonus amount for the
employee.

Depending on the Company's and the individual's actual performance, the
actual bonus paid to the individual ranges from 0% to 200% of the individual's
target bonus. Company performance below a certain minimum percentage of the
net income goal would result in no bonus being paid with respect to the
Company performance portion of an employee's target bonus. Above such minimum
performance level, from 50% to 200% of the Company performance portion would
be paid to an employee, depending on how the actual Company performance
compares to the pre-established goal. If the Company has any net income, then
from 0% to 200% of the individual performance portion would be paid to an
employee, depending on how the employee's performance compares to his or her
pre-established objectives and possible subjective considerations.

The bonus for fiscal 1996 for each executive officer other than Mr. Brown
was determined in accordance with the plan described above. Because the
Company's actual net income significantly exceeded the pre-established net
income goal for 1996, and because some executive officers achieved greater
than 100% of their specific objectives, executive officers received more than
100% of their target bonuses for 1996. Mr. Brown's compensation is discussed
in the final section of this report.

Long-term incentive plan. The Company has maintained stock award plans,
currently the 1995 Pinkerton Performance and Equity Incentive Plan (the "Stock
Plan"), to offer opportunities for stock ownership that are competitive with
those at similar-size companies and that promote the alignment of management
and stockholder interests. The Committee established executive stock ownership
guidelines whereby, within five years from guideline implementation, the Chief
Executive Officer would possess Company stock with a market value equal to
four times annual base salary, Executive Vice Presidents would possess Company
stock with a market value equal to three times annual base salary, and
Corporate Vice Presidents would possess Company stock with a market value
equal to two times annual base salary. In 1994, consistent with these
guidelines, the Committee approved a stock option grant schedule that
establishes a range of annual option grants to be considered for each position
eligible for options, with actual grants within such range to be determined on
the basis of individual performance. When evaluating option grants, the
Committee considers, among other factors, the effect of stock options on the
Company's per share value. The Compensation Committee has requested that
Towers Perrin recommend in 1997 revisions to the current guidelines in order
to ensure their competitiveness and may act in 1997 upon appropriate
recommendations.

DEF 14A 19th Page of 25 TOC 1st Previous Next Bottom Just 19th

Internal Revenue Code Section 162(m). Internal Revenue Code Section 162(m)
does not allow the Company to take a tax deduction for certain types of
compensation in excess of $1,000,000 paid to a Named Officer. "Performance-
based" compensation (as defined by Section 162(m)) is not subject to Section
162(m) limitations. The Company's current compensation levels would not allow
any executive other than Mr. Brown, the President and Chief Executive Officer,
to exceed $1,000,000 of compensation subject to the Section 162(m)
limitations. Because the Company's actual net income in fiscal 1996
significantly exceeded the pre-established net income goal for 1996, Mr.
Brown's bonus for 1996 resulted in Mr. Brown receiving more than $1,000,000 of
compensation subject to the Section 162(m) limitations. If the stockholders
approve the annual incentive compensation plan for the President and Chief
Executive Officer of the Company, then Mr. Brown's future bonuses should not
count towards the $1,000,000 limit because they would be "performance-based"
compensation, and his salary and other (non-bonus) compensation subject to the
Section 162(m) limitations should not exceed $1,000,000.

The Company will consider the impact of Section 162(m) in making
compensation decisions for executive officers, but the Company cannot make
assurances that it will not pay compensation for which it cannot take a tax
deduction. The Stock Plan and the annual incentive compensation plan for the
President and Chief Executive Officer have been designed to constitute
"performance-based" compensation. However, due to ambiguities in Section
162(m) and uncertainties regarding its interpretation, no assurances can be
given that compensation intended to be "performance-based" compensation will
in fact be deductible if it should, together with any other compensation paid
to any Named Officer, exceed $1,000,000.

CEO COMPENSATION

Based on the Company's evaluation of Mr. Brown's performance in 1995, the
Board increased Mr. Brown's salary for 1996 to $625,000 starting in March
1996. Such performance evaluation was based on Mr. Brown's achievement in 1995
of pre-established objectives and subjective considerations.

For 1996, Mr. Brown's employment agreement provided a bonus plan that is
very similar to the Company's annual incentive plan described above. Under Mr.
Brown's bonus plan, his target bonus is 50% of annual base salary and is based
entirely on Company performance. Company performance for purposes of Mr.
Brown's bonus was measured using, as the sole performance criteria, the same
net income goal established for the Company's annual incentive plan.
Achievement by the Company of 100% of its net income goal would result in Mr.
Brown receiving his target bonus of 50% of salary. As long as Company
performance exceeded a certain percentage of the net income goal, then from
25% to 100% of Mr. Brown's annual base salary would be earned as his bonus,
depending on how the actual Company performance compared to the pre-
established goal. For 1996, Mr. Brown received under this plan a bonus of
$625,000, or 100% of annual base salary, since the Company significantly
exceeded the pre-established net income goal.

Mr. Brown participates in the Stock Plan. In 1996 he was granted options to
purchase 45,000 shares of Common Stock of the Company in accordance with the
stock option grant schedule described above in "Long-term incentive plan" and
based on his performance evaluation for 1995.

Compensation Committee in 1996

John A. Gavin, Chairman

Gerald D. Murphy

J. Kevin Murphy

Robert H. Smith

DEF 14A 20th Page of 25 TOC 1st Previous Next Bottom Just 20th

PERFORMANCE GRAPH

The following graph illustrates the performance of the cumulative total
return to the holders of the Common Stock in comparison to the cumulative
total return (assuming dividend reinvestment) of companies on the Standard and
Poor's 500 Stock Index and the Standard and Poor's Services
(Commercial/Consumer) Index.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG PINKERTON'S, INC., THE S & P 500 INDEX
AND THE S & P SERVICES (COMMERCIAL/CONSUMER) INDEX

[GRAPH APPEARS HERE]

* ASSUMING $100 INVESTED IN STOCK
OR INDEX ON DECEMBER 31, 1991,
REINVESTMENT OF DIVIDENDS, AND
FISCAL YEAR ENDING DECEMBER 31.

LEGEND

· Download Table

Index Description 12/91 12/92 12/93 12/94 12/95 12/96
----------------- ----- ----- ----- ----- ----- -----

PINKERTON'S, INC. 100 65 61 61 61 79

S&P 500 Stocks 100 108 118 120 165 203

S&P Services
(Commercial/Consumer) 100 99 96 88 119 123

NOTE: Last trading day of the month is used.

DEF 14A 21st Page of 25 TOC 1st Previous Next Bottom Just 21st

PROPOSAL 2--APPROVAL OF THE ANNUAL INCENTIVE COMPENSATION PLAN
FOR THE PRESIDENT AND CHIEF EXECUTIVE OFFICER

The Company's Board of Directors and Denis R. Brown, the President and Chief
Executive Officer of the Company, have amended Mr. Brown's employment
agreement to provide that Mr. Brown's annual incentive bonus plan as described
in the agreement (the "CEO Annual Incentive Plan") will continue for fiscal
1997 and thereafter only if approved by the stockholders. The CEO Annual
Incentive Plan is intended to qualify as "performance-based" compensation
under Internal Revenue Code Section 162(m) so that any compensation paid under
the plan would be fully deductible regardless of the amount of other
compensation paid to Mr. Brown for the applicable fiscal year.

The CEO Annual Incentive Plan is intended to promote and advance the
interests of the Company and its stockholders by providing the President and
Chief Executive Officer with an annual incentive target that is comparable to
similar-size companies, that rewards managerial performance and that
strengthens the mutuality of interests between the President and Chief
Executive Officer and the Company's stockholders by using performance criteria
designed to promote the achievement of important corporate goals.

The CEO Annual Incentive Plan provides that the Compensation Committee of
the Board of Directors will establish in advance of each fiscal year one or
more corporate goals that relate to the Company's financial and operational
performance. The achievement of 100% of the goals in the fiscal year would
result in Mr. Brown receiving his full target bonus of 50% of his annual base
salary. A lesser or greater amount than the target bonus may be earned
depending on how the actual performance of the Company compares to the pre-
established goals, according to the formulas provided in the plan, up to a
maximum bonus of 100% of salary. Because this maximum is expressed as a
percentage of salary, the actual maximum dollar amount that could be paid will
change year to year as Mr. Brown's salary changes. Therefore, the plan also
provides that in any event the maximum dollar amount payable to Mr. Brown
under the plan for a fiscal year will not exceed $1,250,000.

The corporate goals to be used by the Compensation Committee for the CEO
Annual Incentive Plan shall be any measurable goal relating to the Company's
financial or operational performance, including without limitation: any
measure of earnings (including earnings before interest, taxes and
amortization), any measure of income (such as net income, income before taxes,
operating income or net operating income), any measure of profit (such as
gross profit, operating profit or net operating profit), revenue, any measure
of return (such as return on equity, return on capital, return on assets, or
return on net assets), cash flow, market share, any balance sheet or statement
of operations item, or any operational goal (such as employee retention,
client retention or overtime expense). Such corporate goals may be established
on a per-share basis, for the Company on an individual or consolidated basis,
or for a particular region, subsidiary, division or service. For any fiscal
year, one or more corporate goals may be established for the CEO Annual
Incentive Plan, in any combination and with any alternative goals that the
Compensation Committee considers appropriate.

VOTE REQUIRED

Approval of the CEO Annual Incentive Plan for Mr. Brown requires the
affirmative vote of a majority of the shares of Common Stock present or
represented by proxy and entitled to vote at the Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THIS PROPOSAL
AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED FOR THIS
PROPOSAL UNLESS A VOTE AGAINST THE PROPOSAL OR AN ABSTENTION IS SPECIFICALLY
INDICATED.

DEF 14A 22nd Page of 25 TOC 1st Previous Next Bottom Just 22nd

PROPOSAL 3--RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

The Board of Directors has selected, on the advice of its Audit Committee,
the independent accounting firm of KPMG Peat Marwick LLP to serve as its
auditors for the fiscal year ending December 26, 1997. KPMG Peat Marwick LLP
has served as the Company's independent auditors since 1983.

One or more representatives of KPMG Peat Marwick LLP are expected to be
present at the Annual Meeting. They will have an opportunity to make a
statement if they so desire, and will be available to respond to appropriate
questions during the Annual Meeting.

Ratification of the selection of KPMG Peat Marwick LLP requires the
affirmative vote of a majority of the shares of Common Stock present or
represented by proxy and entitled to vote at the Annual Meeting.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Each director, officer and other designated employee of the Company who is
subject to Section 16 of the Securities Exchange Act of 1934, and each other
person who owns beneficially more than 10% of the Common Stock, is required by
Section 16(a) of that Act to report to the Securities and Exchange Commission
by a specified date his or her ownership of and transactions in the Common
Stock. Copies of such reports on Forms 3, 4 and 5 must also be provided to the
Company. Based on the Company's review of the copies of such forms and
amendments thereto it has received and written representations from certain
reporting persons that they were not required to file Forms 5 for fiscal 1996,
the Company believes that all such forms were filed on a timely basis during
fiscal 1996.

OTHER BUSINESS

As of the date of this Proxy Statement, the Board of Directors is not aware
of any matters that are to be presented for action at the Annual Meeting other
than those set forth herein. Should any other matter requiring a vote of the
stockholders come before the Annual Meeting, or any adjournment thereof, the
proxy holders named in the enclosed form of proxy will vote the shares
represented thereby in accordance with their best judgment and discretion.

DEF 14A 23rd Page of 25 TOC 1st Previous Next Bottom Just 23rd

ANNUAL REPORT

Any stockholder, upon request, may obtain without charge, a copy of the
Company's Annual Report on Form 10-K, without exhibits, as filed with the
Securities and Exchange Commission. The Company will also furnish to any
stockholder, upon request, a copy of any exhibit to the Company's Annual
Report on Form 10-K, upon the payment of a fee representing the Company's
actual cost of reproduction and handling. Requests should be in writing and
directed to Pinkerton's, Inc., 15910 Ventura Boulevard, Suite 900, Encino,
California 91436-2810, Attention: Corporate Secretary.

By Order of the Board of Directors

/s/ C. Michael Carter

C. Michael Carter
Corporate Secretary

Encino, California
March 24, 1997

DEF 14A 24th Page of 25 TOC 1st Previous Next Bottom Just 24th

PINKERTON'S, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 1997 ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, APRIL 24, 1997

The undersigned stockholder of Pinkerton's, Inc., a Delaware
corporation, hereby appoints Denis R. Brown, C. Michael Carter and James P.
McCloskey, or any of them, as proxies and attorneys-in-fact, with full power of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 1997 Annual Meeting of Stockholders of Pinkerton's, Inc., to
be held on April 24, 1997, at 2:00 p.m. local time, at the Westwood Marquis
Hotel and Gardens, 930 Hilgard Avenue, Los Angeles, California, and at any
adjournment thereof, and to vote all shares of Common Stock that the undersigned
would be entitled to vote if then and there personally present, on the matters
set forth on the reverse side hereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO CONTRARY DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.

Proposals 1, 2 and 3 are made by Pinkerton's, Inc.

The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, dated March 24, 1997.

(Continued, and to be dated and signed on the reverse side.)

PINKERTON'S, INC.
P.O. BOX 11212
NEW YORK, N.Y. 10203-0212

DEF 14A Last Page of 25 TOC 1st Previous Next Bottom Just 25th

1. ELECTION OF THE FOLLOWING NOMINEES:

FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS [ ]
listed below. [ ] for all nominees listed below. [ ]

Nominees For Class III Directors: John A. Gavin, Robert H. Smith and Thomas W.
Wathen
(INSTRUCTION: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below.)

*Exceptions
--------------------------------------------------------------------

2. PROPOSAL TO APPROVE THE ANNUAL INCENTIVE COMPENSATION PLAN FOR THE PRESIDENT
AND CHIEF EXECUTIVE OFFICER.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

3. PROPOSAL TO RATIFY THE SELECTION OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS FOR FISCAL YEAR 1997.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE SUCH SHARES WITH
RESPECT TO THE TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE ANNUAL MEETING

Check here if you plan to [ ] Address Change [ ]
attend the meeting. and/or Comments

NOTE: Signatures must correspond exactly with the name(s) shown on the
attached label. Each joint owner should sign. Executors, administrators,
trustees, guardians and other persons signing in a representative capacity
should give full titles. If a corporation, please sign in full corporate name
by an authorized officer. If a partnership, please sign in partnership name
by an authorized person. PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY IN
THE ENCLOSED REPLY ENVELOPE WHETHER YOU PLAN TO ATTEND THE MEETING OR NOT. IF
YOU DO ATTEND, YOU MAY VOTE IN PERSON IF YOU SO DESIRE.

Dated: 1997
---------------------------

---------------------------------------
Signature of Stockholder

Votes MUST be indicated (X) in Black or Blue Ink. [X]

PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.

DEF 14A	1st Page of 25	TOC	Top	Previous	Next	Bottom	Just 1st

DEF 14A	2nd Page of 25	TOC	1st	Previous	Next	Bottom	Just 2nd

DEF 14A	3rd Page of 25	TOC	1st	Previous	Next	Bottom	Just 3rd

DEF 14A	4th Page of 25	TOC	1st	Previous	Next	Bottom	Just 4th

DEF 14A	5th Page of 25	TOC	1st	Previous	Next	Bottom	Just 5th

DEF 14A	6th Page of 25	TOC	1st	Previous	Next	Bottom	Just 6th

DEF 14A	7th Page of 25	TOC	1st	Previous	Next	Bottom	Just 7th

DEF 14A	8th Page of 25	TOC	1st	Previous	Next	Bottom	Just 8th

DEF 14A	9th Page of 25	TOC	1st	Previous	Next	Bottom	Just 9th

DEF 14A	10th Page of 25	TOC	1st	Previous	Next	Bottom	Just 10th

DEF 14A	11th Page of 25	TOC	1st	Previous	Next	Bottom	Just 11th

DEF 14A	12th Page of 25	TOC	1st	Previous	Next	Bottom	Just 12th

DEF 14A	13th Page of 25	TOC	1st	Previous	Next	Bottom	Just 13th

DEF 14A	14th Page of 25	TOC	1st	Previous	Next	Bottom	Just 14th

DEF 14A	15th Page of 25	TOC	1st	Previous	Next	Bottom	Just 15th

DEF 14A	16th Page of 25	TOC	1st	Previous	Next	Bottom	Just 16th

DEF 14A	17th Page of 25	TOC	1st	Previous	Next	Bottom	Just 17th

DEF 14A	18th Page of 25	TOC	1st	Previous	Next	Bottom	Just 18th

DEF 14A	19th Page of 25	TOC	1st	Previous	Next	Bottom	Just 19th

DEF 14A	20th Page of 25	TOC	1st	Previous	Next	Bottom	Just 20th

DEF 14A	21st Page of 25	TOC	1st	Previous	Next	Bottom	Just 21st

DEF 14A	22nd Page of 25	TOC	1st	Previous	Next	Bottom	Just 22nd

DEF 14A	23rd Page of 25	TOC	1st	Previous	Next	Bottom	Just 23rd

DEF 14A	24th Page of 25	TOC	1st	Previous	Next	Bottom	Just 24th

DEF 14A	Last Page of 25	TOC	1st	Previous	Next	Bottom	Just 25th

Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This DEF 14A Filing	Date	First	Last	Other Filings

	4/30/94	15
	5/1/94	14
	12/30/94	13
	12/29/95	13
	4/26/96	11
	7/25/96	6
	12/27/96	2	14	10-K405
	12/31/96	5
	3/5/97	2	6
Filed On / Filed As Of	3/24/97	2	24
For The Period Ended	4/24/97	2	24
	11/24/97	7
	12/26/97	3	22	10-K405
	4/19/99	15
	8/7/99	15
	9/27/99	16
	10/4/99	16
	8/7/0	15
	8/7/1	15	16
	4/20/4	11

Top				List All Filings

Filing Submission - Alternative Formats (Word / Rich Text, HTML, Plain Text, SGML, XML, et al.)

Pinkertons Inc · DEF 14A · For 4/24/97

Filed On 3/24/97 · SEC File 0-03017 · Accession Number 898430-97-1122

Definitive Proxy Solicitation Material · Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Definitive Proxy Solicitation Material · Schedule 14A
Filing Table of Contents