UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date
of Report (date of earliest event reported): September 15, 2008
FEDERAL SIGNAL CORPORATION
(Exact name of Company as specified in its charter)
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| Delaware
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1-6003
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36-1063330 |
| (State or other jurisdiction
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(Commission
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(I.R.S. Employer |
| of incorporation)
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File Number)
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Identification No.) |
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| 1415 West 22ndStreet
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60523 |
| Oak Brook, Illinois
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(Zip Code) |
| (Address of principal executive offices) |
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(630) 954-2000
(Company’s telephone number, including area code)
Not applicable
(Former name or former address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the Company under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
(b) James
E. Goodwin’s last day as the interim Chief Executive Officer and President
of Federal Signal Corporation (the “Company”) was September 15, 2008. Mr. Goodwin has
been a director of the Company since 2005 and will continue to serve on the Company’s Board of
Directors.
(c) On September 15, 2008, the Board of Directors of the Company appointed William H.
Osborne as the Chief Executive Officer and President of the Company.
Beginning in 1990, Mr. Osborne, 48, held various positions with Ford Motor Company and its
affiliates. In 2008, Mr. Osborne was selected to serve as the President and Chief Executive Officer of Ford
of Australia. Prior to that time, from 2005 to 2008, Mr. Osborne served as the President and Chief
Executive Officer of Ford of Canada and from 2003 to 2005, Mr. Osborne served as the Executive
Director, Pickup Truck and Commercial Vehicles, North American Truck Business of Ford Motor
Company. Mr. Osborne has no familial relationships with any of the Company’s directors or
executive officers and has no business relationships with the Company that are required to be
disclosed under Item 404(a) of Regulation S-K.
In connection with Mr. Osborne’s appointment, the Company entered into an employment agreement
(the “Employment Agreement”) with Mr. Osborne, a copy of which is filed herewith as Exhibit 10.1.
The Employment Agreement has an initial term ending on December 31, 2010 and thereafter renews for
successive three-year periods. Set forth below is a brief description of the material terms of the
Employment Agreement. The following description is qualified in its entirety by reference to the
Employment Agreement.
Annual Base Salary: Mr. Osborne will be paid a minimum annual base salary of
$650,000.
Annual Incentive Bonus: Mr. Osborne will be provided an opportunity to earn an annual
cash incentive bonus under the Company’s Management Incentive Plan or a subsequent plan. For 2008,
Mr. Osborne’s annual cash incentive bonus target has been set at 90% of his annual base salary.
Any bonus payable to Mr. Osborne for his 2008 service to the Company will be pro-rated to reflect
the term of his actual employment with the Company.
Equity Awards: On Mr. Osborne’s first day of employment, September 15, 2008, Mr.
Osborne received the equity award grants listed below in the form of non-qualified stock options,
restricted stock and performance-based restricted stock units under the Company’s 2005 Executive
Incentive Compensation Plan:
A non-qualified stock option for 75,137 shares of the Company’s common stock at an exercise
price of $14.93 per share (i.e., the closing price of the Company’s common stock as reported by the
New York Stock Exchange on September 15, 2008). The option will vest and become exercisable as to
one-third of the shares subject thereto on each of September 15, 2009, 2010 and 2011.
A restricted stock award for 24,559 shares of the Company’s common stock that will fully vest
on September 15, 2011.
A performance-based restricted stock unit award for 20,991 shares of the Company’s common
stock. Vesting of the performance-based restricted stock units as to a number of shares of common
stock of the Company is tied to the attainment of three-year performance metrics relative to the
Company’s designated peer group for the performance period beginning on January 1, 2008 and ending
on December 31, 2010.
Savings Restoration Plan Credit: On September 15, 2008, the Company established an
account in Mr. Osborne’s name under the Company’s Savings Restoration Plan and credited $200,000 to
the account. So long as Mr. Osborne is employed by the Company on September 15 in each subsequent
year, the Company will be obligated to credit Mr. Osborne’s Savings Restoration Plan account in an
additional amount of $200,000 on each such date for a period of nine years. All amounts credited
to Mr. Osborne’s account will vest over three years at the rate of one-third of the amount in each
year.
Other Compensation Components: Until Mr. Osborne attains permanent housing, the
Company has agreed to reimburse Mr. Osborne for his moving costs and reasonable temporary living
expenses. Mr. Osborne is also entitled to receive a signing bonus and housing allowance in the
total amount of $500,000 upon his purchase of a permanent residence in the Chicago, Illinois
metropolitan area. Further, to the extent that Mr. Osborne is required to re-pay a retention bonus
from his former employer, the Company will reimburse Mr. Osborne in an amount not to exceed
$263,000.
Termination and Severance: If the Company terminates Mr. Osborne’s employment
without Cause or he resigns for Good Reason (as such terms are defined in the Employment Agreement)
on or prior to September 15, 2010, Mr. Osborne will receive, in addition to his accrued and unpaid
salary and a pro-rated annual cash incentive bonus target through the date of termination, an
amount equal to two times his annual base salary paid in equal monthly installments over a period
of two years, and one times his annual cash incentive bonus target paid in equal monthly
installments over a period of one year. If the Company terminates Mr. Osborne’s employment without
Cause or he resigns for Good Reason after September 15, 2010, Mr. Osborne will receive, in addition
to his accrued and unpaid salary and a pro-rated annual cash incentive bonus target through the
date of termination, an amount equal to one times the sum of his annual base salary plus his annual
cash incentive bonus target paid in equal monthly installments over a period of one year. Mr.
Osborne and his covered dependents will also continue to receive health benefits for up to 18
months following the date of termination at the same coverage level and cost to Mr. Osborne as in
effect prior to his termination.
Termination and Severance Upon a Change in Control: If the Company terminates Mr.
Osborne’s employment without Cause or he resigns for Good Reason within 24 months following a
Change in Control of the Company (as defined in the Employment Agreement), Mr. Osborne will
receive, in addition to his accrued and unpaid salary and a pro-rated annual cash incentive bonus
target, an amount equal to two times the sum of his annual base salary and annual cash incentive
bonus target. Mr. Osborne and his covered dependents will also continue to receive health benefits
for up to 36 months following the date of termination at the same coverage level and cost to Mr.
Osborne as in effect prior to his termination. Additionally, in this case, Mr. Osborne’s equity
awards will become immediately exercisable or vested and all restrictions on such equity awards
will immediately lapse, the Company will have an obligation to fund a trust in an amount equal to
100% of the amounts necessary to satisfy its liabilities under the Savings Restoration Plan, and
the Company will also have an obligation to vest and cash-out all
outstanding cash-based long-term
incentive awards held by Mr. Osborne. Mr. Osborne is also
entitled to receive outplacement services in an amount not to exceed $50,000. The Employment Agreement also
contains limitations on Mr. Osborne’s competing with the Company and soliciting employees of the
Company following termination of his employment. In the event the Company terminates Mr. Osborne’s
employment without Cause or he resigns for Good Reason within 24 months following a Change in
Control of the Company, as consideration for the non-compete covenant contained in the Employment
Agreement, Mr. Osborne will also receive an amount equal to one times the sum of his annual base
salary and annual cash incentive bonus target.
The Employment Agreement also provides that in the event any Change-in-Control payment
provided by the Company to or for the benefit of Mr. Osborne is subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code, the Company will make an additional payment to Mr.
Osborne that will be sufficient, after giving effect to all taxes, interest and penalties with
respect to such payment, to make Mr. Osborne whole for all taxes (including income taxes) imposed
under Section 4999 of the Internal Revenue Code.