FEDERAL SIGNAL CORP /DE/ (Form: 10-Q, Received: 04/30/2010 14:51:10)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-6003

Federal Signal Corporation

(Exact name of Company as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		36-1063330 (I.R.S. Employer Identification No.)

1415 West 22nd Street
Oak Brook, IL 60523
(Address of principal executive offices) (Zip code)

(630) 954-2000
(Company’s telephone number including area code)

Not applicable
(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the Company has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Company was required to submit and post such files). Yes þ No o

Indicate by check mark whether the Company is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer þ

Non-accelerated filer o
(Do not check if a smaller reporting company)

Smaller reporting company o

Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the Company’s classes of common stock, as of the latest practicable date.


Title
Common Stock, $1.00 par value		49,898,416 shares outstanding at April 13, 2010

FEDERAL SIGNAL CORPORATION
INDEX TO FORM 10-Q


		Page
Part I. Financial Information

Item 1.	Financial Statements		3

	Condensed Consolidated Statements of Operations for the Three Months Ended
	March 31, 2010 and 2009 (unaudited)		4

	Condensed Consolidated Balance Sheets as of March 31, 2010 and
	December 31, 2009 (unaudited)		5

	Condensed Consolidated Statement of Shareholders' Equity for the Three Months Ended
	March 31, 2010 (unaudited)		6

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended
	March 31, 2010 and 2009 (unaudited)		7

	Notes to Condensed Consolidated Financial Statements (unaudited)		8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of
	Operations		20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		25

Item 4.	Controls and Procedures		25

Part II. Other Information

Item 1.	Legal Proceedings		25

Item 1A.	Risk Factors		25

Item 5.	Other Information		25

Item 6.	Exhibits		30

Signature			31
Exhibit Index			30

Part I. Financial Information

Item 1. Financial Statements

FORWARD-LOOKING STATEMENTS

This Form 10-Q, reports filed by Federal Signal Corporation and subsidiaries (“the Company”) with the Securities and Exchange Commission (“SEC”) and comments made by management may contain words such as “may,” “will,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “project,” “estimate” and “objective” or the negative thereof or similar terminology concerning the Company’s future financial performance, business strategy, plans, goals and objectives. These expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning the Company’s possible or assumed future performance or results of operations and are not guarantees. While these statements are based on assumptions and judgments that management has made in light of industry experience as well as perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances, they are subject to risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different.

These risks and uncertainties, some of which are beyond the Company’s control, include the cyclical nature of the Company’s industrial, municipal, government and commercial markets; availability of credit and third-party financing for customers; the Company’s ability to achieve expected savings from integration, synergy and other cost-control initiatives; volatility in securities trading markets; economic downturns; risks associated with suppliers, dealers and other partner alliances; changes in cost competitiveness including those resulting from foreign currency movements; technological advances by competitors; increased competition and pricing pressures in the markets served by the Company; the ability of the Company to expand into new geographic markets and to anticipate and meet customer demands for new products and product enhancements; increased warranty and product liability expenses; compliance with environmental and safety regulations; restrictive debt covenants; disruptions in the supply of parts or components from sole source suppliers and subcontractors; domestic and foreign governmental policy change; unforeseen developments in contingencies such as litigation, protection and validity of patent and other intellectual property rights; retention of key employees; and general changes in the competitive environment. These risks and uncertainties include, but are not limited to, the risk factors described under “Risk Factors” in the Company’s Annual Report on Form 10-K, Form 10-Qs and other filings with the SEC. These factors may not constitute all factors that could cause actual results to differ materially from those discussed in any forward-looking statement. The Company operates in a continually changing business environment and new factors emerge from time to time. The Company cannot predict such factors nor can it assess the impact, if any, of such factors on its financial position or results of operations. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results. The Company disclaims any responsibility to update any forward-looking statement provided in this Form 10-Q.

ADDITIONAL INFORMATION

The Company makes its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, other reports and information filed with the SEC and amendments to those reports available, free of charge, through its Internet website (http://www.federalsignal.com) as soon as reasonably practical after it electronically files or furnishes such materials to the SEC. All of the Company’s filings may be read or copied at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, DC 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-202-551-8090. The SEC maintains an Internet website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically.

FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)


	Three months ended March 31,
	2010			2009
($ in millions, except per share data)
Net sales	$	166.6		$	184.7
Costs and expenses
Cost of sales		(124.9	)		(138.1	)
Selling, general and administrative		(39.6	)		(42.3	)
Acquisition related costs		(2.6	)		—
Restructuring charges		(0.3	)		—

Operating (loss) income		(0.8	)		4.3
Interest expense		(2.9	)		(3.3	)
Other expense, net		(0.9	)		(1.0	)

Loss before income taxes		(4.6	)		—
Income tax benefit		1.4			0.2

(Loss ) income from continuing operations		(3.2	)		0.2
(Loss) gain from discontinued operations and disposal, net of income tax expense of $0.1, and $0.4, respectively		(0.4	)		0.8

Net (loss) income	$	(3.6	)	$	1.0


COMMON STOCK DATA:
Basic and diluted (loss) earnings per share:
Loss from continuing operations	$	(0.06	)	$	—
(Loss) gain from discontinued operations and disposal		(0.01	)		0.02

(Loss) earnings per share	$	(0.07	)	$	0.02


Weighted average common shares outstanding:
Basic		49.2			47.9
Diluted		49.2			48.0

Cash dividends per share of common stock	$	0.06		$	0.06

See notes to condensed consolidated financial statements.

FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)


	March 31,			December 31,
($ in millions)	2010			2009
ASSETS
Current assets
Cash and cash equivalents	$	12.3		$	21.1
Accounts receivable, net of allowances for doubtful accounts of $2.3 million and $2.5 million, respectively		120.2			120.2
Inventories		115.8			112.1
Other current assets		27.1			26.0

Total current assets		275.4			279.4
Properties and equipment, net		65.8			65.5
Other assets
Goodwill		376.7			319.6
Intangible assets, net of accumulated amortization		102.2			52.7
Deferred tax assets		14.7			17.5
Deferred charges and other assets		3.4			1.7

Total assets of continuing operations		838.2			736.4
Assets of discontinued operations		8.3			8.5

Total assets	$	846.5		$	744.9

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	7.9		$	—
Current portion of long-term borrowings and capital lease obligations		42.1			41.9
Accounts payable		48.8			45.2
Customer deposits		12.1			10.4
Accrued liabilities
Compensation and withholding taxes		17.7			20.8
Other		49.4			48.1

Total current liabilities		178.0			166.4
Long-term borrowings and capital lease obligations, less current portion		252.5			159.7
Long-term pension liabilities		39.3			39.6
Deferred gain		23.7			24.2
Other long-term liabilities		12.3			12.2

Total liabilities of continuing operations		505.8			402.1
Liabilities of discontinued operations		12.9			14.1

Total liabilities		518.7			416.2
Shareholders’ equity
Common stock, $1 par value per share, 90.0 million shares authorized, 50.8 million and 49.6 million shares issued, respectively		50.8			49.6
Capital in excess of par value		104.4			93.8
Retained earnings		233.8			240.4
Treasury stock, 0.9 million and 0.8 million shares at cost, respectively		(15.8	)		(15.8	)
Accumulated other comprehensive loss		(45.4	)		(39.3	)

Total shareholders’ equity		327.8			328.7

Total liabilities and shareholders’ equity	$	846.5		$	744.9

See notes to condensed consolidated financial statements.

FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (unaudited)


	Common		Capital in								Accumulated
	Stock		Excess of								Other
	Par		Par		Retained			Treasury			Comprehensive
($ in millions)	Value		Value		Earnings			Stock			Loss			Total
Balance at December 31, 2009	$	49.6	$	93.8	$	240.4		$	(15.8	)	$	(39.3	)	$	328.7
Net loss						(3.6	)								(3.6	)
Foreign currency translation												(7.2	)		(7.2	)
Unrealized losses on derivatives, net of tax expense of $0.04 million												(0.1	)		(0.1	)
Change in unrecognized losses related to pension benefit plans, net of tax benefit of $0.5 million												1.2			1.2
Shares issued for acquisition		1.2		9.0											10.2
Cash dividends declared						(3.0	)								(3.0	)
Share based payments:
Stock awards and options				1.5											1.5
Excess tax benefit on share based payment				0.1											0.1

Balance at March 31, 2010	$	50.8	$	104.4	$	233.8		$	(15.8	)	$	(45.4	)	$	327.8

See notes to condensed consolidated financial statements.

FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited )


	Three months ended March 31,
($ in millions)	2010			2009
Operating activities:
Net (loss) income	$	(3.6	)	$	1.0
Adjustments to reconcile net (loss) income to net cash (used for) provided by operating activities:
Loss (gain) on discontinued operations and disposal		0.4			(0.8	)
Loss on joint venture		—			0.9
Depreciation and amortization		4.2			3.8
Stock-based compensation expense		1.5			1.1
Pension contributions		—			(0.5	)
Changes in other assets and liabilities, exclusive of the effects of businesses acquired and disposed		(11.6	)		1.2

Net cash (used for) provided by continuing operating activities		(9.1	)		6.7
Net cash (used for) provided by discontinued operating activities		(0.5	)		1.1

Net cash (used for) provided by operating activities		(9.6	)		7.8

Investing activities:
Purchases of properties and equipment		(3.2	)		(3.9	)
Proceeds from sales of properties, plant and equipment		0.7			—
Payments for acquisitions, net of cash acquired		(97.3	)		—

Net cash used for continuing investing activities		(99.8	)		(3.9	)
Net cash provided by discontinued investing activities		—			3.0

Net cash used for investing activities		(99.8	)		(0.9	)

Financing activities:
Increase (decrease) in debt outstanding under revolving credit facilities		96.2			(6.4	)
Proceeds on short-term borrowings		7.5			—
Payments on short-term borrowings		—			(11.4	)
Proceeds on long-term borrowings		—			6.3
Payments on long-term borrowings		(2.6	)		—
Cash dividends paid to shareholders		(3.0	)		(2.9	)
Other, net		—			0.2

Net cash provided by (used for) continuing financing activities		98.1			(14.2	)
Net cash used for discontinued financing activities		(0.3	)		(6.4	)

Net cash provided by (used for) financing activities		97.8			(20.6	)

Effects of foreign exchange rate changes on cash		2.8			—


Decrease in cash and cash equivalents		(8.8	)		(13.7	)
Cash and cash equivalents at beginning of period		21.1			23.4

Cash and cash equivalents at end of period	$	12.3		$	9.7

See notes to condensed consolidated financial statements.

FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Federal Signal Corporation and subsidiaries (the “Company”) included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to ensure the information presented is not misleading. These condensed consolidated financial statements have been prepared in accordance with the Company’s accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2009 and should be read in conjunction with the consolidated financial statements and the notes thereto.

In the opinion of the management of the Company, the information contained herein reflects all adjustments necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods. Such adjustments are of a normal recurring nature. The operating results for the three month periods ended March 31, 2010 are not necessarily indicative of the results to be expected for the full year of 2010.

The Company assessed events occurring subsequent to March 31, 2010 through the date of the filing for potential recognition and disclosure in the consolidated financial statements. No events have occurred that would require adjustment to or disclosure in the consolidated financial statements.

The Company reports its interim quarterly periods on a 13-week basis ending on a Saturday with the fiscal year ending on December 31. For presentation, the Company uses “March 31, 2010” to refer to its financial position as of April 3, 2010 and its results of operations and cash flows for the 13-week period ended April 3, 2010.

Certain balances in 2009 have been reclassified to conform to the 2010 presentation. Included with reclassifications are restatements for discontinued operations.

In December 2007, the FASB issued revised guidance under ASC 805 related to accounting for business combinations. The Company has applied the provisions of this guidance prospectively to business combinations for which the acquisition date occurred on or after January 1, 2009.

In October 2009, the FASB amended guidance relating to multiple-deliverable revenue arrangements and certain arrangements that include software elements. The revised guidance requires entities to allocate revenue in an arrangement using estimated selling prices of the delivered goods and services based on a selling price hierarchy. The amendments eliminate the residual method of revenue allocation and require revenue to be allocated using the relative selling price method. Tangible products are removed from the scope of software revenue guidance and guidance is provided on determining whether software deliverables in an arrangement that includes a tangible product are covered by the scope of the software revenue guidance. The amended guidance should be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with early adoption permitted. The Company has not adopted the revised guidance and is currently evaluating the impact on the Company’s consolidated results of operations or financial condition.

No other new accounting pronouncements issued or effective during the first three months of 2010 has had or is expected to have a material impact on the consolidated financial statements.

2. ACQUISITIONS

On March 5, 2010, the Company acquired all of the issued and outstanding common shares of Sirit Inc. and subsidiaries (“Sirit”) for total cash consideration of CDN $77.1 million (USD $74.9 million). Sirit designs, develops and manufactures radio frequency identification device technology for applications such as tolling, electronic vehicle registration, parking and access control, cashless payments, supply chain management and asset tracking solutions. The acquisition of Sirit supports the Company’s long-term strategy by creating growth opportunities and revenue synergies. The results of Sirit, which have been included in the Company’s condensed consolidated financial statements since March 5, 2010, included net sales and operating losses

of $1.9 million and $(0.7) million, respectively. The results of Sirit are included within the “Other” business segment.

On March 2, 2010, the Company acquired all of the equity interests in VESystems, LLC and subsidiaries (“VESystems”) for an aggregate purchase price of $34.8 million. The consideration transferred consisted of cash in the amount of approximately $24.6 million and an aggregate of 1,220,311 shares of Federal Signal common stock with an acquisition date fair value of $10.2 million. VESystems designs, develops and deploys advanced software applications and customer management systems and services for the electronic toll collection and port industries. The acquisition of VESystems supports the Company’s long-term strategy by creating growth opportunities and revenue synergies. The results of VESystems, which have been included in the Company’s condensed consolidated financial statement since March 2, 2010, included net sales and operating losses of $1.5 million and $(0.5) million, respectively. The results of VESystems are included within the “Other” business segment.

The Company accounted for both transactions using the acquisition method of accounting. The following table summarizes the preliminary allocation of the purchase price to the net assets of Sirit and VESystems, and the resultant goodwill which represents synergies of combining the businesses.


($ in millions)	Sirit		VESystems
Total fair value of consideration transferred	$	74.9	$	34.8
Total fair value of net assets acquired		30.5		17.0

Acquisition-related goodwill (1)	$	44.4	$	17.8


(1)		The Company recorded this Goodwill within the “Other” segment and is currently evaluating the amount of goodwill that is deductible for tax purposes.

In connection with the acquisitions, the Company incurred $2.6 million of direct acquisition-related costs in the three month period ended March 31, 2010. These costs are included within “Acquisition related costs” in the condensed consolidated statements of operations.

The following table summarizes the preliminary fair value of assets acquired and liabilities assumed from Sirit and VESystems as of their respective acquisition dates:


	Sirit		VESystems
($ in millions)	At March 5, 2010		At March 2, 2010
Assets
Cash	$	2.4	$	0.2
Inventory		2.6		—
Receivables		2.0		2.0
Intangible assets		37.1		16.1
Fixed assets		1.6		0.1
Other assets		0.4		0.5

Total assets acquired	$	46.1	$	18.9


Liabilities
Accounts payable	$	4.9	$	0.7
Capital leases		0.7		—
Accrued liabilities and other liabilities		7.0		1.2
Deferred revenue		0.6		—
Deferred tax, net		2.4		—

Total liabilities assumed		15.6		1.9

Net assets acquired	$	30.5	$	17.0

The following table summarizes the preliminary fair value of amortizable and indefinite-lived intangible assets as of their respective acquisition dates:


	Sirit at				VESystems at
	March 5, 2010				March 2, 2010
			Estimated useful				Estimated useful
($ in millions)	Fair Value		life (in years)		Fair Value		life (in years)
Amortizable intangible assets:
Customer relationships	$	18.0		18	$	9.5		17
Technology		12.1		9		4.9		16
Non-compete		2.9		5		0.4		5

Total amortizable intangible assets	$	33.0			$	14.8
Indefinite-lived intangibles:
Trade name	$	4.1			$	1.3

Total intangible assets	$	37.1			$	16.1

The above estimated fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the acquisition date and the subsequent filing of this Form 10-Q. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, however the Company is awaiting the finalization of a third party valuation to finalize those fair values. Thus, the preliminary measurements of fair value set forth above are subject to change. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable, but no later than one year from the acquisition date.

Pro forma condensed combined financial information

The following unaudited pro forma condensed combined financial information presents the results of operations of the Company as they may have appeared if the closing of Sirit and VESystems, presented in the aggregate, had been completed on January 1, 2010 and January 1, 2009.


	Three Months Ended March 31,
($ in millions, except per share data)	2010			2009
	(unaudited)
Net sales	$	175.6		$	195.6
Loss from continuing operations		(1.4	)		(0.7	)
Loss from continuing operations — per basic and diluted share	$	(0.03	)	$	(0.01	)

The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and does not indicate the actual financial results of the Company had the closing of Sirit and VESystems been completed on January 1, 2010 and January 1, 2009, respectively, nor is it indicative of the results of operations in future periods. Included in the unaudited pro forma combined financial information for the quarters ended March 31, 2010 and March 31, 2009 were pro forma adjustments to reflect the results of operations of Sirit and VESystems as well as the impact of amortizing certain acquisition accounting adjustments such as amortizable intangible assets. The pro forma condensed financial information does not indicate the impact of possible business model changes nor does it consider any potential impacts of current market conditions, expense efficiencies or other factors.

Diamond Consulting Services Ltd.

On December 9, 2009, the Company acquired all voting equity interests of Diamond Consulting Services Ltd. (“Diamond”) for total consideration of approximately $13.5 million in cash and deferred payments in future years of up to $3.2 million. Diamond specializes in vehicle classification systems for tolling and other Intelligent Transportation Systems. The acquisition supports the Company’s long-term strategy by creating growth opportunities and revenue synergies. The balance sheet and statement of operations are included in the Safety and Security Systems Segment.

As of December 31, 2009, preliminary fair values were assigned to the net assets acquired and liabilities assumed, resulting in estimated goodwill of $9.5 million and a preliminary fair value of intangible assets of $7.0 million. Although the purchase accounting for this acquisition is not yet complete, the Company has recognized certain measurement period adjustments related to a deferred tax liability, fair value of intangible assets and additional consideration of $0.4 million paid to the seller. The net effect of these measurement period adjustments decreased the Company’s estimate of goodwill by $0.1 million and intangible assets by $0.5 million.

3. INVENTORIES

Inventories are summarized as follows ($ in millions) :


	March 31,		December 31,
	2010		2009
Raw materials	$	56.4	$	53.9
Work in progress		27.9		28.0
Finished goods		31.5		30.2

Total inventories	$	115.8	$	112.1

4. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table provides the changes in carrying value of goodwill by operating segment through the three months ended March 31, 2010 ($ in millions):


			Goodwill from 2010		Other Adjustments
	At December 31,		Acquisitions		Including Currency			At March 31,
	2009		(Note 2)		Translations			2010
Environmental Solutions	$	120.4	$	—	$	—		$	120.4
Fire Rescue		34.7		—		(0.7	)		34.0
Safety & Security		164.5		—		(4.4	)		160.1
Other (See Note 12)		—		62.2		—			62.2

Total	$	319.6	$	62.2	$	(5.1	)	$	376.7

The following table provides the gross carrying value and accumulated amortization for each major class of intangible assets ($ in millions):


			March 31, 2010							December 31, 2009
	Average		Gross					Net		Gross					Net
	Useful Life		Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	(Years)		Value		Amortization			Value		Value		Amortization			Value
Amortized Intangible Assets:
Developed software		6	$	25.5	$	(17.7	)	$	7.8	$	25.2	$	(17.0	)	$	8.2
Patents		8		1.6		(0.5	)		1.1		0.7		(0.5	)		0.2
Customer relationships		13		46.6		(4.6	)		42.0		19.0		(4.2	)		14.8
Technology		11		21.7		(1.4	)		20.3		5.6		(1.2	)		4.4
Other		5		5.6		(1.2	)		4.4		1.8		(1.1	)		0.7

Total				101.0		(25.4	)		75.6		52.3		(24.0	)		28.3

Unamortized Intangible Assets:
Trade name				26.6		—			26.6		24.4		—			24.4


Total			$	127.6	$	(25.4	)	$	102.2	$	76.7	$	(24.0	)	$	52.7

Amortization expense for the three month periods ended March 31, 2010 and 2009 totaled $1.4 million and $1.4 million, respectively. The Company estimates that the aggregate amortization expense will be $8.5 million in 2010, $9.6 million in 2011, $8.5 million in 2012, $7.0 million in 2013, $6.5 million in 2014 and $36.9 million thereafter.

5. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

At March 31, 2010, the Company was party to interest rate swap agreements with financial institutions in which the Company pays interest at a fixed rate and receives interest at variable LIBOR rates. These interest rate swap agreements are designated as cash flow hedges and terminate throughout 2010.

The Company manages the volatility of cash flows caused by fluctuations in currency rates by entering into foreign exchange forward contracts and options. These derivative instruments may be designated as cash flow hedges that hedge portions of the Company’s anticipated third-party purchases and forecasted sales denominated in foreign currencies. The Company also enters into foreign exchange contracts that are not intended to qualify for hedge accounting, but are intended to offset the effect on earnings of foreign currency movements on short and long term intercompany transactions. Gains and losses on these derivative instruments are recorded through earnings.

For assets and liabilities measured at fair value on a recurring basis, the Company uses an income approach to value the assets and liabilities for outstanding derivative contracts, which include interest rate swap and foreign currency forward contracts. The income approach consists of a discounted cash flow model that takes into account the present value of future cash flows under the terms of the contracts using current market information as of the reporting date, such as prevailing interest rates and foreign currency spot and forward rates. The following table provides a summary of the fair values of assets and liabilities ($ in millions):

Fair Value Measurements at March 31, 2010

Quoted Prices in Active

Significant Other

Significant

Markets for Identical

Observable Inputs

Unobservable Inputs

Total

Assets (Level 1)

(Level 2)

(Level 3)

Assets

Derivatives

0.9

—

0.9

—

Fair Value Measurements at March 31, 2010

Quoted prices in Active

Significant Other

Significant

Markets for Identical

Observable Inputs

Unobservable Inputs

Total

Assets (Level 1)

(Level 2)

(Level 3)

Liabilities

Derivatives

1.0

—

1.0

—

At March 31, 2010 and December 31, 2009, the fair value of the Company’s derivative instruments was recorded as follows ($ in millions) :


	Asset Derivatives			Liability Derivatives
	March 31, 2010			March 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Interest rate contracts		$	—	Other accrued liabilities	$	0.2
Foreign exchange	Other current assets		0.1	Other accrued liabilities		0.6

Total derivatives designated as hedging instruments			0.1			0.8

Derivatives not designated as hedging instruments:
Foreign exchange	Accounts receivable, net		0.8	Accounts payable		0.2

Total derivatives not designated as hedging instruments			0.8			0.2

Total derivatives		$	0.9		$	1.0


	Asset Derivatives			Liability Derivatives
	December 31, 2009			December 31, 2009
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Interest rate contracts				Other accrued liabilities	$	0.5
Foreign exchange	Other current assets	$	—	Other accrued liabilities		0.1

Total derivatives designated as hedging instruments			—			0.6

Derivatives not designated as hedging instruments:
Foreign exchange	Accounts receivable, net		—	Other accrued liabilities		0.4

Total derivatives not designated as hedging instruments			—			0.4

Total derivatives		$	—		$	1.0

The effect of derivative instruments on the condensed consolidated statement of operations for the three months ended March 31, 2010, was as follows ($ in millions) :


				Location of Gain/(Loss)
	Amount of Gain/(Loss)			Reclassified from	Amount of Gain Reclassified
Derivatives in Cash Flow	Recognized in OCI on			Accumulated OCI into	from Accumulated OCI into
Hedging Relationships	Derivative (Effective Portion)			Income (Effective Portion)	Income (Effective Portion)
Interest rate contracts	$	0.3		Interest expense	$	0.1
Foreign exchange		—		Net sales		—
Foreign exchange		(0.5	)	Other income (expense), net		—

Total	$	(0.2	)		$	0.1


Derivatives Not Designated as	Location of Gain Recognized in	Amount of Gain Recognized in
Hedging Instruments	Income on Derivative	Income on Derivative
Foreign exchange	Other income (expense)	$	1.0

Total		$	1.0

At March 31, 2010 and December 31, 2009, accumulated other comprehensive loss associated with interest rate swaps and foreign exchange contracts qualifying for hedge accounting treatment was $0.8 million and $0.7 million, net of income tax effects, respectively. The Company expects $1.0 million of pre-tax net loss on cash flow hedges that are reported in accumulated other comprehensive loss as of March 31, 2010, to be reclassified into earnings within the next 12 months as the respective hedged transactions affect earnings.

The following table summarizes the carrying amounts and fair values of the Company’s financial instruments as follows ($ in millions) :


	March 31, 2010					December 31, 2009
	Notional		Fair			Notional		Fair
	Amount		Value			Amount		Value
Short-term debt	$	7.9	$	7.9		$	—	$	—
Long-term debt*		296.7		296.0			204.1		205.0
Interest rate contracts		70.0		(0.2	)		70.0		(0.5	)
Foreign exchange		52.4		0.1			24.1		(0.5	)


*		Long term debt includes financial service borrowings for all periods presented, which is included in discontinued operations.

The carrying value of short-term debt approximates fair value due to its short maturity. The fair value of long-term debt is based on interest rates that are currently available to us for issuance of debt with similar terms and remaining maturities.

6. DEBT

Short-term borrowings consisted of the following ($ in millions):


	March 31,		December 31,
	2010		2009
Line of credit	$	0.5	$	—
Other foreign lines of credit		7.4		—

Total short-term borrowings	$	7.9	$	—

Long-term borrowings consisted of the following ($ in millions):


	March 31			December 31
	2010			2009
Revolving Credit Facility	$	180.1		$	85.0
Alternative Currency Facility (within Revolving Credit Facility)		14.5			16.2
10.79% Unsecured Private Placement note with annual installments of $10.0 million due 2010-2011		11.3			11.4
10.60% Unsecured Private Placement note with annual installments of $7.1 million due 2010-2011		8.1			8.1
8.93% Unsecured Private Placement note with annual installments of $8.0 million due 2010-2012		14.8			14.8
9.24% Unsecured Private Placement note due 2012		42.7			42.7
Unsecured Private Placement note, floating rate (5.32% and 2.35% at March 31, 2010 and December 31, 2009, respectively) due 2010-2013		21.3			21.3
Subsidiary Loan Agreement		2.0			3.2
Capital Lease Obligations		0.7			—

		295.5			202.7
Unamortized balance of terminated fair value interest rate swaps		1.2			1.4

		296.7			204.1
Less current maturities, excluding financial services activities		(42.1	)		(41.9	)
Less financial services activities — borrowings (included in discontinued operations)		(2.1	)		(2.5	)

Total long-term borrowings, net	$	252.5		$	159.7

As of March 31, 2010, €10.7 million (or $14.5 million), was drawn on the Alternative Currency Facility, a supplemental agreement under the Second Amended Credit Agreement and $180.1 million was drawn directly under the Second Amended Credit Agreement for a total of $194.6 million drawn under the Second Amended Credit Agreement leaving available borrowings of $55.4 million not including $30.5 million of capacity used for existing letters of credit.

At March 31, 2010, $7.4 million was drawn against the Company’s foreign lines of credit which provide for borrowings up to $17.7 million.

The outstanding unsecured fixed Private Placement Notes’ coupon interest rates increased by 3% from December 31, 2009 as a result of the Company’s private placement debt rating not improving by one rating level on or before April 1, 2010.

7. INCOME TAXES

The Company’s effective tax rate on the loss from continuing operations was a 30.4% benefit for the three month period ended March 31, 2010. The 30.4% rate includes benefits for foreign tax effects. In the comparable three month period ended March 31, 2009, the Company recorded a $0.2 million tax benefit primarily related to the resolution of an IRS audit of the 2006 tax year and the benefit of research and development tax credits.

In connection with the acquisitions of Sirit and VESystems, the Company acquired certain net operating loss carry-forwards. The estimated acquired U.S. NOL is $24.4 million. The estimated acquired Canadian NOL is $3.8 million (USD).

The Company’s unrecognized tax benefits were $4.9 million at January 1, 2010 of which $4.7 million are tax benefits that if

recognized, would reduce the annual effective tax rate. The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. Interest and penalties amounting to $0.8 million and $0.1 million, respectively, are included in the consolidated balance sheet at March 31, 2010. The Company expects the unrecognized tax benefits to decrease by $0.8 million over the next 12 months. In the three months ended March 31, 2010, the Company’s unrecognized tax benefits did not change.

8. POSTRETIREMENT BENEFITS

The components of the Company’s net periodic pension expense for its defined benefit pension plans are summarized as follows ($ in millions) :


	U.S. Benefit Plans						Non-U.S. Benefit Plan
	Three months ended						Three months ended
	March 31,						March 31,
	2010			2009			2010			2009
Interest on obligation	$	2.0		$	2.1		$	0.8		$	0.6
Amortization of actuarial loss		0.9			0.5			0.2			0.3
Less: Expected return on plan assets		(2.2	)		(2.3	)		(0.8	)		(0.6	)

Net postretirement pension expense	$	0.7		$	0.3		$	0.2		$	0.3

During the three month period ended March 31, 2010, no contribution to the pension plans were made. During the comparable prior period, the Company contributed 1.1 million shares of the Company’s common stock held in treasury to the U.S. pension plan. The stock was valued at $4.4 million based upon prices in the open market at the contribution date. In addition, the Company contributed $0.5 million during the three months ended March 31, 2009 to its non-U.S. defined benefit plan.

9. (LOSS) EARNINGS PER SHARE

(Loss) earnings per share — basic is computed by dividing income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period. (Loss) earnings per share — diluted reflects the potential dilution that could occur if options issued under stock-based compensation awards were exercised and converted into common stock. For the three month period ended March 31, 2010, options to purchase 1.4 million shares of the Company’s common stock had exercise prices that were greater than the average market price of those shares during the respective reporting periods. For the three months ended March 31, 2009, options to purchase 1.3 million shares of the Company’s common stock had exercise prices that were greater than the average market price of those shares during the respective reporting periods. As a result, these shares are excluded from the (loss) earnings per share calculation as they are anti-dilutive.

The following is a reconciliation of net (loss) income to (loss) earnings per share — basic and diluted — for the three months ended March 31, 2010 and 2009:

Computation of (Loss) Earnings per Common Share
(in millions, except per share data)


	2010			2009
(Loss) income from continuing operations	$	(3.2	)	$	0.2
(Loss) gain from discontinued operations and disposal, net of tax		(0.4	)		0.8

Net (loss) income	$	(3.6	)	$	1.0


Average shares outstanding — basic		49.2			47.9
Dilutive effect of stock options and other		—			0.1

Diluted shares outstanding		49.2			48.0


Loss from continuing operations per share
Basic	$	(0.06	)	$	—

Diluted	$	(0.06	)	$	—


	2010			2009
Loss (gain) from discontinued operations per share
Basic	$	(0.01	)	$	0.02

Diluted	$	(0.01	)	$	0.02

Earnings (loss) per share
Basic	$	(0.07	)	$	0.02

Diluted	$	(0.07	)	$	0.02

10. COMMITMENTS, CONTINGENCIES AND WARRANTIES

The Company issues product performance warranties to customers with the sale of its products. The specific terms and conditions of these warranties vary depending upon the product sold and country in which the Company conducts business, with warranty periods generally ranging from one to ten years. The Company estimates the costs that may be incurred under its basic limited warranty and records a liability in the amount of such costs at the time the sale of the related product is recognized. Factors that affect the Company’s warranty liability include the number of units under warranty from time to time, historical and anticipated rates of warranty claims and costs per claim. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

Changes in the Company’s warranty liabilities in the three month periods ended March 31, 2010 and 2009 were as follows ($ in millions):


	2010			2009
Balance at December 31	$	6.2		$	5.8
Provisions to expense		2.1			2.9
Actual costs incurred		(2.0	)		(2.6	)

Balance at March 31	$	6.3		$	6.1

The Company retained an environmental consultant to conduct an environmental risk assessment at its Pearland, Texas facility. While the Company has not completed the risk assessment analysis, it appears probable the site will require remediation. A reasonable estimate of the range of costs to remediate the site is $0.7 million to $2.4 million, depending upon the remediation approach and other factors. As of March 31, 2010 and December 31, 2009 $0.7 million is included in other accrued liabilities within the Safety and Security Systems Group. The Company’s estimate may change in the near term as more information becomes available; however the costs are not expected to have a material adverse effect on the Company’s results of operations, financial position or liquidity.

11. LEGAL PROCEEDINGS

The Company is subject to various claims, other pending and possible legal actions for product liability and other damages and other matters arising out of the conduct of the Company’s business. The Company believes, based on current knowledge and after consultation with counsel, that the outcome of such claims and actions will not have an adverse effect on the Company’s consolidated financial position or results of operations. However, in the event of unexpected future developments, it is possible that the ultimate resolution of such matters, if unfavorable, could have a material adverse effect on the Company’s results of operations.

The Company’s subsidiary Bronto Skylift, a manufacturer of aerial lifts which is headquartered in Finland, was named in a lawsuit in France, in connection with an accident which occurred in 2006. The incident occurred at a fairgrounds in Pau, France where the National Conference of Firefighters was held, and involved the fatal fall of an individual from the demonstration cage of one of Bronto Skylift’s vehicles. Bronto Skylift is named in the lawsuit along with two individuals, one of whom is a consultant for Bronto Skylift. The case was referred to the Court of Corrections (criminal court). In March 2010 the Court of Corrections fined Bronto Skylift 60,000 euros in connection with the accident, and through its counsel, Bronto Skylift is appealing that decision. Claims for indemnity have been filed against Bronto Skylift by various individuals in connection with the incident.

The Company has been sued by firefighters seeking damages claiming that exposure to the Company’s sirens has impaired their hearing and that the sirens are therefore defective. There were 33 cases filed during the period 1999-2004, involving a total of 2,443 plaintiffs pending in the Circuit Court of Cook County, Illinois. The trial of the first 27 of these plaintiffs’ claims began on March 18, 2008 and ended on April 25, 2008, when a Cook County jury returned a unanimous verdict in

favor of the Company. An additional 40 firefighter plaintiffs were selected for trial to begin on January 5, 2009. Plaintiffs’ counsel later moved to reduce the number of plaintiffs from 40 to 9. Trial of these nine plaintiffs began on February 6, 2009 and concluded on February 20, 2009 with a verdict returned against the Company and for the plaintiffs in varying amounts totaling $0.4 million. The Company is appealing this verdict. All trials previously scheduled in Cook County during 2009 and 2010 are stayed pending the result of this appeal. Since February 20, 2009, the Company is aware of six additional cases that have been filed in Cook County, involving 299 plaintiffs.

The Company has also been sued on this issue outside of the Cook County venue. With the exception of matters on appeal, Federal Signal is currently a defendant in 55 hearing loss lawsuits in Philadelphia, Pennsylvania, involving a total of 55 firefighter plaintiffs. The first trial involving one of these plaintiffs began on February 16, 2010 and ended on March 2, 2010, when the jury returned a verdict for the plaintiff. In particular, the jury found that the Company’s siren was not defectively designed, but that the Company negligently constructed the siren. The jury awarded damages in the amount of $100,000 which was subsequently reduced to $75,000. The Company plans to appeal this verdict. Another trial, involving 10 Philadelphia firefighter plaintiffs, is scheduled to begin on June 14. Thereafter, three additional trials, involving 10 plaintiffs each, are scheduled to begin during the second and third quarters of 2010. During the course of the current Philadelphia litigation, five cases have been dismissed. In four of these cases, the Company paid nominal sums which included reimbursement of expenses, to obtain dismissals. One case has been dismissed pursuant to motion filed by the Company. Four cases in the Supreme Court of Kings County, New York were dismissed on January 25, 2008 after the court granted the Company’s motion to dismiss which eliminated all claims pending in New York. The court subsequently denied reconsideration of its ruling. On appeal, the Court affirmed the trial court’s dismissal of these cases. All plaintiffs who have filed hearing loss cases against the Company in other jurisdictions have dismissed their claims. Plaintiffs’ attorneys have threatened to file additional lawsuits. The Company intends to vigorously defend all of these lawsuits. The Company successfully defended approximately 41 similar cases in Philadelphia, Pennsylvania in 1999 resulting in a series of unanimous jury verdicts in favor of the Company.

Federal Signal’s ongoing negotiations with CNA over insurance coverage on these claims have resulted in reimbursements of a portion of the Company’s defense costs. In the three month period ended March 31, 2009, the Company recorded $0.6 million of reimbursements from CNA as a reduction of corporate operating expenses. No reimbursements were recorded in the three month period ended March 31, 2010.

12. SEGMENT INFORMATION

The following is a description of the Company’s reporting segments:

Safety and Security Systems segment manufactures and supplies comprehensive systems and products that law enforcement, fire rescue and emergency medical services, campuses, military facilities and industrial sites use to protect people and property.

Environmental Solutions segment manufactures and supplies a full range of street sweeper and vacuum loader vehicles and high-performance water blasting equipment for municipal and industrial customers. Products are also manufactured for the newer markets of hydro-excavation, glycol recovery and surface cleaning. Products are sold under the Elgin, Vactor, Guzzler and Jetstream brand names.

Fire Rescue segment is a manufacturer and designer of sophisticated, vehicle-mounted, aerial platforms for fire fighting, rescue, electric utility and industrial uses. End customers include fire departments, industrial fire services, electric utilities and maintenance rental companies for applications such as fire fighting and rescue, transmission line maintenance, and installation and maintenance of wind turbines. The group’s telescopic/articulated aerial platforms are designed in accordance with various regulatory codes and standards, such as European Norms (EN), National Fire Protection Association (NFPA) and American National Standards Institute (ANSI).

Other consists of the Company’s acquisitions made during the first quarter of 2010. In March 2010, the Company acquired Sirit which designs, develops and manufactures radio frequency identification device technology for applications such as tolling, electronic vehicle registration, parking and access control, cashless payments, supply chain management and asset tracking solutions. Also in March 2010, the Company acquired VESystems, which designs, develops and deploys advanced software applications and customer management systems and services for the electronic toll collection and port industries.

It is expected that during the second quarter of 2010, the Company will form Federal Signal Technologies Group (“FSTech”), a new operating segment that focuses on automated solutions for the Intelligent Transportation Systems and public safety markets and other applications that leverage our technologies and process and service expertise. FSTech will provide technology platforms and services to customers in the areas of electronic toll collection, automated license plate recognition (“ALPR”), electronic vehicle registration, parking and access control, cashless payment solutions, congestion charging, traffic management, site security solutions and supply chain systems.

Corporate contains those items that are not included in our other segments.

The following table summarizes the Company’s operating income (loss) by segment. The results for the interim periods are not necessarily indicative of results for a full year. Selected financial information is as follows:


	Safety
	and									Corporate
	Security		Fire		Environmental					and
($ in millions)	Systems		Rescue		Solutions		Other			Eliminations			Total
Three Months Ended March 31, 2010:
Net sales	$	68.3	$	24.8	$	70.1	$	3.4		$	—		$	166.6
Operating income (loss)		4.1		0.8		3.7		(1.2	)		(8.2	)		(0.8	)

Three Months Ended March 31, 2009:
Net sales		70.8		32.5		81.4		—			—			184.7
Operating income (loss)		4.9		2.4		3.0		—			(6.0	)		4.3

As of March 31, 2010:
Total assets	$	366.9	$	139.7	$	197.7	$	125.2		$	17.0		$	846.5
As of December 31, 2009:
Total assets	$	372.8	$	141.9	$	191.7	$	—		$	38.5		$	744.9

13. RESTRUCTURING

In July 2009, the Company began an initiative to consolidate a number of manufacturing and distribution operations into the Company’s University Park, Illinois plant collectively known as the Footprint restructuring plan (“Footprint”). The Company expects all of these actions will be completed in the 2010 calendar year. During the first quarter of 2010, the Company recorded approximately $0.3 million in costs associated with the Footprint initiative within our Safety and Security Group. There were no changes to the total estimate of charges at March 31, 2010, as disclosed in the Company’s Form 10-K for the year ended December 31, 2009 of $2.6 million.

In December 2008, the Company announced an objective to reduce salaried personnel costs. There were no changes to the estimate of charges at March 31, 2010.

The following presents an analysis of the restructuring reserves included in other accrued liabilities as of December 31, 2009 and March 31, 2010:


($ in millions)	Severance			Other		Total
Balance as of December 31, 2009	$	0.8		$	0.5	$	1.3
Charges to selling, general and administrative expenses		0.1			0.2		0.3
Cash payments		(0.2	)		—		(0.2	)

Balance as of March 31, 2010	$	0.7		$	0.7	$	1.4

14. COMPREHENSIVE LOSS

Comprehensive loss for the three month periods ended March 31, 2010 and 2009 were as follows:


($ in millions)	2010			2009
Net (loss) income	$	(3.6	)	$	1.0
Foreign currency translation		(7.2	)		(2.4	)
Unrealized (loss) gain or derivatives		(0.1	)		0.3
Change in unrecognized losses related to pension benefit plans, net of tax		1.2			0.4

Comprehensive loss	$	(9.7	)	$	(0.7	)

15. DISCONTINUED OPERATIONS

2010

During the first quarter of 2010, the Company recorded approximately $0.4 million in costs and expenses related to the Pauluhn discontinued operation.

2009

During 2009 the Company discontinued both Ravo Holdings B.V. and Pauluhn. In the first quarter of 2009 the Company recorded income on discontinued operations of $0.8 million.

The following table presents the operating results of the Company’s discontinued operations for the three month periods ended March 31, 2010 and 2009:


	Three months ended March 31,
($ in millions)	2010			2009

Net sales	$	—		$	18.8
Costs and expenses		(0.5	)		(17.6	)

Loss (income) before income taxes		(0.5	)		1.2
Income tax expense (benefit)		0.1			(0.4	)

(Loss) income on discontinued operations	$	(0.4	)	$	0.8

The following table shows an analysis of assets and liabilities of discontinued operations as of March 31, 2010 and December 31, 2009:


	March 31,		December 31,
($ in millions)	2010		2009
Current assets	$	1.4	$	1.4
Long-term assets		4.6		4.5
Financial service assets, net		2.3		2.6

Total assets of discontinued operations	$	8.3	$	8.5


Current liabilities	$	0.8	$	0.8
Long-term liabilities		10.0		10.8
Financial service liabilities		2.1		2.5

Total liabilities of discontinued operations	$	12.9	$	14.1

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial Condition of Operations (“MD&A”) is designed to provide information that is supplemental to, and shall be read together with the consolidated financial statements and the accompanying notes contained in the Annual Report on Form 10-K for the year ended December 31, 2009. Information in MD&A is intended to assist the reader in obtaining an understanding of the consolidated financial statements, information about the Company’s business segments and how the results of those segments impact the Company’s results of operations and financial condition as a whole, and how certain accounting principles affect the Company’s consolidated financial statements. The Company’s results for interim periods are not necessarily indicative of annual operating results.

The Company is a leading global manufacturer and supplier of (i) safety, security and communication equipment, (ii) street sweepers and other environmental vehicles and equipment and (iii) vehicle-mounted, aerial platforms for fire fighting, rescue, electric utility and industrial uses. We also are a designer and supplier of technology-based products and services for the public safety and Intelligent Transportation System markets. In addition, we sell parts and tooling and provide service and repair, equipment rentals and training as part of a comprehensive offering to our customer base. We operate 19 manufacturing facilities in 7 countries and provide our products and integrated solutions to municipal, governmental, industrial and commercial customers throughout the world.

Consolidated Results of Operations

The following information summarizes our consolidated statements of operations and illustrates the key financial indicators used to assess our consolidated financial results ($ in millions, except per share data):


	Three months ended March 31,
	2010			2009			Change
Net sales	$	166.6		$	184.7		$	(18.1	)
Cost of sales		(124.9	)		(138.1	)		13.2

Gross profit		41.7			46.6			(4.9	)
Operating expenses		(39.6	)		(42.3	)		2.7
Acquisition related costs		(2.6	)		—			(2.6	)
Restructuring charges		(0.3	)		—			(0.3	)

Operating (loss) income		(0.8	)		4.3			(5.1	)
Interest expense		(2.9	)		(3.3	)		0.4
Other expense, net		(0.9	)		(1.0	)		0.1
Income tax benefit		1.4			0.2			1.2

(Loss) income from continuing operations		(3.2	)		0.2			(3.4	)
(Loss) gain from discontinued operations and disposal, net of tax		(0.4	)		0.8			(1.2	)

Net (loss) income	$	(3.6	)	$	1.0		$	(4.6	)

Other data:
Operating margin		(0.5	%)		2.3	%		(2.8	%)
Loss per share — continuing operations	$	(0.0	6)	$	—		$	(0.0	6)
Orders	$	198.3		$	159.4		$	38.9

Net sales decreased 10% or $18.1 million in the first quarter of 2010 compared to the same quarter of 2009 as a direct result of a decrease in volume related to a low order backlog at the end of 2009, which resulted from the global economic recession which reduced overall demand for the Company’s products across most market segments. Despite the significant drop in volume, gross profit margins were virtually flat at 25.0% in 2010 versus 25.2% in 2009 due to the impact of favorable product mix as well as cost reduction and other initiatives.

Operating income in the first three months of 2010 declined by $5.1 million compared to the same period in 2009. The decline is primarily due to lower sales volume, direct acquisition related costs of $2.6 million and restructuring costs of $0.3 million, partially offset by lower spending in manufacturing costs and operating expenses, as well as favorable product mix.

Interest expense decreased $0.4 million in the first quarter of 2010 compared to $3.3 million in the same quarter of last year due to lower interest rates and lower average borrowing levels in 2010.

The Company’s unrecognized tax benefits were $4.9 million at January 1, 2010 of which $4.7 million are tax benefits that if recognized, would reduce the annual effective tax rate. The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. Interest and penalties amounting to $0.8 million and $0.1 million, respectively, are included in the consolidated balance sheet at March 31, 2010. The Company expects the unrecognized tax benefits to decrease by $0.8 million over the next 12 months. In the three months ended March 31, 2010, the Companies unrecognized tax benefits did not change.

Loss from continuing operations was $3.2 million for the first quarter of 2010 versus income of $0.2 million for the comparable period in 2009 is due to lower operating income as described above offset by the benefits of lower interest expense, a higher tax benefit and slightly lower other expense, net.

For the quarter ended March 31, 2010, a loss on discontinued operations and disposals of $0.4 million was recorded primarily relating to an additional expense from the sale of Pauluhn. For the three month period ended March 31, 2009 a gain on discontinued operations and disposals of $0.8 million was recorded which relates to income from the Ravo and Pauluhn operations.

For the quarter ended March 31, 2010, diluted (loss) earnings per share from continuing operations was $(0.06) compared to $(0.00) for the first quarter of 2009. Diluted (loss) earnings per share from discontinued operations decreased to $(0.01) for the quarter ended March 31, 2010 from $0.02 in the comparable period in 2009.

Orders and Backlog

Orders in 2010 increased 25% from the first quarter of 2009 as the U.S and global markets continue their recovery from the recession. U.S. and non-U.S. orders increased from March 31, 2010 to March 31, 2009 by 22% and 29%, respectively.

U.S. municipal and government orders in the first quarter of 2010 increased 9% from the prior year’s quarter primarily as a result of the increase in sewer cleaner trucks of $4.9 million, street sweepers of $2.6 million and ALPR cameras of $0.8 million.

U.S. industrial orders are up 44% or $14.7 million over the prior year as markets begin to recover from the recession. The primary drivers of the year over year increase were vacuum trucks of $5.6 million, waterblasters of $2.7 million, street sweepers of $1.6 million and the addition of $2.2 million from the Sirit and VESystems acquisitions. Safety and Security Systems Group orders were up $1.6 million with amber and industrial products driving the year over year increase.

Non-U.S. orders increased $19.1 million over the prior year. Fire Rescue Group orders were up $10.9 million with strength in the fire-lift market. Safety and Security Group orders were up $6.1 million primarily as a result of a large European police order. Environmental Solutions Group orders were up $2.1 million.

Backlog of $222.7 million at March 31, 2010 (including backlog associated with the 2010 acquisitions) decreased 15% and increased 31% from March 31, 2009 and December 31, 2009, respectively.

Safety and Security Systems

The following table summarizes the Safety and Security Systems Group operating results for the three month period ended March 31, 2010 and 2009, respectively ($ in millions):


	Three months ended March 31,
	2010			2009			Change
Orders	$	76.9		$	71.2		$	5.7
Net sales		68.3			70.8			(2.5	)
Operating income		4.1			4.9			(0.8	)
Operating margin		6.0	%		6.9	%		(0.9	%)

Orders increased 8% from the first quarter of 2009 as the U.S. and global markets continue their recovery from the recession. Non-U.S. orders increased 19% mainly attributed to a large European police order. U.S. orders were essentially flat year over year, with strong ALPR and industrial orders partially offset by lower municipal orders

Net sales decreased 4% or $2.5 million compared to the first quarter of 2009 resulting from a lower backlog at the end of 2009 which was partially offset by a favorable foreign currency translation of $1.2 million and strong ALPR demand.

Operating income and margins decreased in the first quarter of 2010 from the comparable period in 2009 primarily as a result of lower sales volume and restructuring charges.

Fire Rescue

The following table summarizes the Fire Rescue Group’s operating results for the three month periods ended March 31, 2010 and 2009, respectively ($ in millions):


	Three months ended March 31,
	2010			2009			Change
Orders	$	31.7		$	20.8		$	10.9
Net sales		24.8			32.5			(7.7	)
Operating income		0.8			2.4			(1.6	)
Operating margin		3.2	%		7.4	%		(4.2	%)

Orders increased 52% from the first quarter of 2009 with increased demand in the Company’s fire-lift market. Market demand for the Company’s products was recovering in all regions. Demand for the industrial market continues to lag as a result of the global economic recession.

Net sales decreased by 24% in the first quarter with declines in both fire-lift and industrial products compared to the prior year due to the combination of strong 2009 fourth quarter shipments and weak backlog as of December 31, 2009. Additionally, a Finnish port workers strike in March 2010 affected receiving of materials and delivery of units and disrupted operations.

Operating income decreased $1.6 million from the first quarter of 2009 as result of lower volumes and less favorable mix offset by reduced operating expenses. The port workers strike had approximately a $0.5 million negative effect on operating income.

Environmental Solutions

The following table summarizes the Environmental Solutions Group’s operating results for the three month periods ended March 31, 2010 and 2009, respectively ($ in millions):


	Three months ended March 31,
	2010			2009			Change
Total orders	$	87.7		$	67.4		$	20.3
Net sales		70.1			81.4			(11.3	)
Operating income		3.7			3.0			0.7
Operating margin		5.3	%		3.7	%		1.6	%

Orders of $87.7 million in the first quarter of 2010 were 30% above the prior year quarter driven by increased demand in all markets and regions. Industrial orders were up 71%, or $10.8 million driven primarily by an increase in vacuum trucks of $5.6 million and waterblasters of $2.7 million. Municipal and government orders were up $7.3 million with sewer cleaner trucks up $4.9 million and street sweepers up $2.6 million. Non-U.S. orders were up $2.1 million for the quarter.

Net sales decreased 14% compared to the first quarter in 2009. The sales decrease is primarily the result of a lower backlog at the end of 2009, which resulted in a decline in sales of sewer cleaner trucks and street sweepers of $11.6 million and $1.8 million, respectively, offset partially by sales of waterblasters which were up $3.1 million for the quarter.

Operating income was up $0.7 million to $3.7 million for the quarter as a result of sales of higher margin sweeper units, higher volumes in the water blaster segment and reduced operating expenses, offset by lower sewer cleaner volumes.

Other

In March 2010, the Company acquired all of the issued and outstanding common shares of both Sirit and VESystems.

The following table summarizes the Sirit and VESystems operating results for the three month period ended March 31, 2010 ($ in millions):


	Three months ended
	March 31, 2010
Orders	$	2.2
Net sales		3.4
Operating loss		(1.2	)
Operating margin		(35.3	%)

Corporate Expenses

Corporate expenses were up $2.2 million over the prior year primarily as a result of $2.6 million in costs related to acquired businesses in the first quarter of 2010 and $0.7 million of increased post-retirement expense. Partially offsetting the increase was a decline in legal fees associated with the Company’s hearing loss litigation of $0.7 million as a result of timing of trials and $0.6 million associated with the costs for the 2009 proxy contest initiated by an activist shareholder.

Seasonality of Company’s Business

Certain of the Company’s businesses are susceptible to the influences of seasonal buying or delivery patterns. The Company’s businesses which tend to have lower sales in the first calendar quarter compared to other quarters as a result of these influences are street sweeping, fire rescue products, outdoor warning, emergency signaling products and parking systems.

Financial Position, Liquidity and Capital Resources

The Company utilizes its operating cash flow and available borrowings under its revolving credit facility for working capital needs of its operations, capital expenditures, strategic acquisitions of companies operating in markets related to those already served, pension contributions, debt repayments, share repurchases and dividends.

The following table summarizes the Company’s cash flows for the three month periods ended March 31, 2010 and 2009, respectively ($ in millions):


	Three months ended
	March 31,
	2010			2009
Operating (use of) cash flow	$	(9.6	)	$	7.8
Proceeds from sale of properties, plant and equipment		0.7			—
Capital expenditures		(3.2	)		(3.9	)
Payments for acquisitions, net of cash acquired		(97.3	)		—
Proceeds from discontinued investing activities		—			3.0
Borrowing activity, net		101.1			(11.5	)
Payments for discontinued financing activities		(0.3	)		(6.4	)
Dividends		(3.0	)		(2.9	)
Other, net		2.8			0.2

Decrease in cash and cash equivalents	$	(8.8	)	$	(13.7	)

Cash flow used for operating activities for the first three months of 2010 decreased $17.4 million from the prior year period, primarily reflecting lower earnings on reduced sales from continuing operations and a lower reduction in working capital in the first quarter of 2010 compared to the same period in 2009.

In the first quarter of 2010, the Company acquired two businesses that will be key components to the continuing development of the Company’s Intelligent Transportation Systems strategy. VESystems was acquired for $34.8 million, of which $24.6 million was a cash payment. Sirit was acquired for CDN $77.1 million (USD $74.9 million), all of which was cash. The acquisitions were funded with the Company’s existing cash balances and debt drawn against the availability of the Company’s $250 million of revolving credit facility. In addition to the use of cash and debt, the Company issued 1.2 million shares of Federal Signal Corporation common stock to fund a portion of the cost of purchasing VESystems.

Debt, net of cash, as a percentage of capitalization was 47.0% at March 31, 2010, versus 35.5% at the end of 2009. The change was primarily due to the increase in debt drawn on the Company’s $250 million revolving credit facility to fund the two acquisitions in the first quarter of 2010.

At March 31, 2010, $194.6 million was drawn against the Company’s revolving credit facility and matures April 25, 2012. Borrowings under the facility bear interest, at the Company’s option, at the Base Rate or LIBOR, plus an applicable margin. The applicable margin ranges up to 0.75% for Base Rate borrowings and 1.00% to 2.00% for LIBOR borrowings depending on the Company’s total indebtedness to capital ratio. At March 31, 2010, the Company’s applicable margins over LIBOR and Base Rate borrowings were 1.50% and 0.25%, respectively.

The Company’s revolving credit facility and private placement notes contain certain financial covenants for each fiscal quarter end. For the Second Amended Credit Agreement and each of the Private Placement Note Agreements, covenants include a maximum debt-to-capitalization ratio, an interest expense coverage ratio and a minimum net worth requirement. At March 31, 2010, all of the Company’s retained earnings were free of any restrictions and the Company was in compliance with the financial covenants and agreements. The Company expects to be in compliance with its covenants for the balance of the year.

At March 31, 2010, $7.4 million was drawn against the Company’s foreign lines of credit which provide for borrowings up to $17.7 million.

Given the Company’s cash position and debt structure, the Company has not experienced any material liquidity issues. The Company has $39.4 million of private placement principal debt payments due over the next twelve months. The Company expects that with its existing liquidity and the opportunities available to raise capital in the near term, notwithstanding adverse market conditions, it will meet all of its anticipated needs for liquidity during the next twelve months and for the foreseeable future.

The Company is required to assess on an on-going basis, events or circumstances that may trigger an evaluation of goodwill for impairment, and test for impairment annually should no triggering event indicate the need for analysis in the interim. The Company’s practice is to group goodwill by operating segment. There have been no events identified as a triggering event since the Company’s annual impairment testing was performed in the fourth quarter of 2009.

Contractual Obligations and Commercial Commitments

Short-term borrowings increased $7.9 million at March 31, 2010 from $0 million at December 31, 2009 primarily due to partially fund the purchase of two acquired businesses in the first quarter of 2010. Total long-term borrowings increased to $295.5 million at March 31, 2010 from $202.7 million at December 31, 2009. See the Financial Condition, Liquidity and Capital Resources section of this report for more information.

Changes to the Company’s accrual for product warranty claims in the first three months of 2010 is discussed in Note 10.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

See Item 7A, Quantitative and Qualitative Disclosures about Market Risk , of our Annual Report on Form 10-K for the year ended December 31, 2009. There has been no significant changes in our exposure to market risk since December 31, 2009.

Item 4. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, the Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of March 31, 2010. We completed our acquisitions of VESystems, LLC and Sirit Inc. on March 2, 2010 and March 5, 2010, respectively. As permitted by the U.S. Securities and Exchange Commission, management’s assessment as of March 31, 2010 did not include the internal control of VESystems, LLC and Sirit Inc., which are included in our condensed consolidated financial statements as of March 31, 2010. VESystems, LLC constituted $36.6 million and $34.4 million of total and net assets, respectively, as of March 31, 2010 and $1.5 million and $(0.5) million of net sales and net loss, respectively, for the three-month period then ended. Sirit, Inc. constituted $88.5 million and $83.6 million of total and net assets, respectively, as of March 31, 2010 and $1.9 million and $(0.8) million of net sales and net loss, respectively, for the three-month period then ended.

Based on that evaluation, which excluded an assessment of internal control over financial reporting of the acquired operations of VESystems, LLC and Sirit, Inc., the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2010. As a matter of practice, the Company’s management continues to review and document internal controls and procedures for financial reporting. From time to time, the Company may make changes aimed at enhancing the effectiveness of the controls and to ensure that the systems evolve with the business. During the quarter ended March 31, 2010, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

The information is set forth in Note 11 of the condensed consolidated financial statements included in Part I of this Form 10-Q are incorporated herein by reference.

Item 1A. Risk Factors

Risks Related to Our Business

Our financial results are subject to considerable cyclicality.

Our ability to be profitable depends heavily on varying conditions in the United States government and municipal markets and the overall United States economy. The industrial markets in which we compete are subject to considerable cyclicality, and move in response to cycles in the overall business environment. Many of our customers are municipal governmental agencies, and as a result, we are dependent on municipal government spending. Spending by our municipal customers can be affected by local political circumstances, budgetary constraints, and other factors. The United States government and municipalities depend heavily on tax revenues as a source of their spending and, accordingly, there is a historical correlation, of a one or two year lag between the overall strength of the United States economy and our sales to the United States government and municipalities. Therefore, downturns in the United States economy are likely to result in decreases in demand for our products. During previous economic downturns, we experienced decreases in sales and profitability, and we expect our business to remain subject to similar economic fluctuations in the future.

The execution of our growth strategy is dependent upon the continued availability of credit and third-party financing arrangements for our customers.

The economic downturn has resulted in tighter credit markets, which could adversely affect our customers’ ability to secure the financing necessary to proceed or continue with purchases of our products and services. Our customers’ or potential

customers’ inability to secure financing for projects could result in the delay, cancellation or down-sizing of new purchases or the suspension of purchases already under contract, which could cause a decline in the demand for our products and services and negatively impact our revenues and earnings.

Failure to keep pace with technological developments may adversely affect our operations.

We are engaged in an industry which will be affected by future technological developments. The introduction of products or processes utilizing new technologies could render our existing products or processes obsolete or unmarketable. Our success will depend upon our ability to develop and introduce on a timely and cost-effective basis new products, applications and processes that keep pace with technological developments and address increasingly sophisticated customer requirements. We may not be successful in identifying, developing and marketing new products, applications and processes and product or process enhancements. We may experience difficulties that could delay or prevent the successful development, introduction and marketing of product or process enhancements or new products, applications or processes. Our products, applications or processes may not adequately meet the requirements of the marketplace and achieve market acceptance. Our business, operating results and financial condition could be materially and adversely affected if we were to incur delays in developing new products, applications or processes or product or process enhancements or if our products do not gain market acceptance.

Our efforts to develop new products and services or enhance existing products and services involve substantial research, development and marketing expenses, and the resulting new or enhanced products or services may not generate sufficient revenues to justify the expense.

We place a high priority on developing new products and services, as well as enhancing our existing products and services. As a result of these efforts, we may be required to expend substantial research, development and marketing resources, and the time and expense required to develop a new product or service or enhance an existing product or service are difficult to predict. We may not succeed in developing, introducing or marketing new products or services or product or service enhancements. In addition, we cannot be certain that any new or enhanced product or service will generate sufficient revenue to justify the expense and resources devoted to this product diversification effort.

We have international operations that are subject to foreign economic and political uncertainties.

Our business is subject to fluctuations in demand and changing international economic and political conditions which are beyond our control. During 2009, approximately 44% of our net sales were to customers outside the United States, with approximately 31% of our net sales being supplied from overseas operations. We expect a significant and increasing portion of our revenues and profits to come from international sales for the foreseeable future. Operating in the international marketplace exposes us to a number of risks, including abrupt changes in foreign government policies and regulations, restrictive domestic and international trade regulations, U.S. laws applicable to foreign operations, such as the Foreign Corrupt Practices Act (FCPA), political, religious and economic instability, local labor market conditions, the imposition of foreign tariffs and other trade barriers and, in some cases, international hostilities. To the extent that our international operations are affected by unexpected and adverse foreign economic and political conditions, we may experience project disruptions and losses which could significantly reduce our revenues and profits. Additionally, penalties for non-compliance with laws applicable to international business and trade, such as FCPA, could negatively impact our business.

Some of our contracts are denominated in foreign currencies, which result in additional risk of fluctuating currency values and exchange rates, hard currency shortages and controls on currency exchange. Although currency exposure is hedged in the short term, over the longer term changes in the value of foreign currencies could increase our U.S. dollar costs for, or reduce our U.S. dollar revenues from, our foreign operations. Any increased costs or reduced revenues as a result of foreign currency fluctuations could adversely affect our profits.

We operate in highly competitive markets.

The markets in which we operate are highly competitive. The intensity of this competition, which is expected to continue, can result in price discounting and margin pressures throughout the industry and adversely affects our ability to increase or maintain prices for our products. In addition, certain of our competitors may have lower overall labor or material costs. In addition, our contracts with municipal and other governmental customers are in some cases awarded and renewed through

competitive bidding. We may not be successful in obtaining or renewing these contracts, which could be harmful to our business and financial performance.

Our ability to operate effectively could be impaired if we fail to attract and retain key personnel.

Our ability to operate our businesses and implement our strategies depends, in part, on the efforts of our executive officers and other key employees. In addition, our future success will depend on, among other factors, our ability to attract and retain qualified personnel, including finance personnel, research professionals, technical sales professionals and engineers. The loss of the services of any key employee or the failure to attract or retain other qualified personnel could have a material adverse effect on our business or business prospects.

We rely on access to financial markets to finance a portion of our working capital requirements and support our liquidity needs. Access to these markets may be adversely affected by factors beyond our control, including turmoil in the financial services industry, volatility in securities trading markets and general economic downturns.

We draw upon our revolving credit facility and our operating cash flow to fund working capital needs, capital expenditures, strategic acquisitions, pension contributions, debt repayments, share repurchases and dividends. Market disruptions such as those recently experienced in the United States and abroad have materially impacted liquidity in the credit and debt markets, making financing terms for borrowers less attractive and in certain cases resulting in the unavailability of certain types of financing. Continued uncertainty in the financial markets may negatively impact our ability to access additional financing or to refinance our revolving credit facility or existing debt arrangements on favorable terms or at all, which could negatively affect our ability to fund current and future operations as well as future acquisitions and development. These disruptions may include turmoil in the financial services industry, unprecedented volatility in the markets where our outstanding securities trade, and general economic downturns in the areas where we do business. If we are unable to access financing at competitive rates, or if our short-term or long-term borrowings costs dramatically increase, our ability to finance our operations, meet our short-term debt obligations and implement our operating strategy could be adversely affected.

We are subject to a number of restrictive debt covenants.

Our revolving credit facility and other debt instruments contain certain restrictive debt covenants and other customary events of default that may hinder our ability to continue operating or to take advantage of attractive business opportunities. These restrictive covenants include, among other things, an interest coverage ratio of 3.0:1.0 in all quarters and a maximum debt-to-total-capitalization ratio of 0.5:1.0. Our ability to comply with these restrictive covenants may be affected by the other factors described in this “Risk Factors” section and other factors outside our control. Failure to comply with one or more of these restrictive covenants may result in an event of default. Upon an event of default, if not waived by our lenders, our lenders may declare all amounts outstanding as due and payable. If we are unable to comply with the restrictive covenants in the future, we would be required to obtain further modifications from our lenders or secure another source of financing. If our current lenders accelerate the maturity of our indebtedness, we may not have sufficient capital available at that time to pay the amounts due to our lenders on a timely basis. In addition, these restrictive covenants may prevent us from engaging in transactions that benefit us, including responding to changing business and economic conditions and taking advantage of attractive business opportunities.

We may incur material losses and costs as a result of product liability, warranty, recall claims or other lawsuits or claims that may be brought against us.

We are exposed to product liability and warranty claims in the normal course of business in the event that our products actually or allegedly fail to perform as expected or the use of our products results, or is alleged to result, in bodily injury and/or property damage. Accordingly, we could experience material warranty or product liability costs in the future and incur significant costs to defend against these claims. We carry insurance and maintain reserves for product liability claims. However, we cannot assure you that our insurance coverage will be adequate if such claims do arise, and any liability not covered by insurance could have a material adverse impact on our results of operations and financial position. A future claim could involve the imposition of punitive damages, the award of which, pursuant to state laws, may not be covered by insurance. In addition, warranty or other claims are not typically covered by insurance coverage. Any product liability or warranty issues may adversely impact our reputation as a manufacturer of high quality, safe products and may have a material adverse effect on our business.

We have been sued by firefighters seeking damages claiming that exposure to our sirens has impaired their hearing and that the sirens are therefore defective. Currently, there are 94 cases pending against us involving a total of over 2,000 plaintiffs. The trial of the first of these plaintiffs’ claims occurred in 2008 and the jury returned a unanimous verdict in our favor. However, in two trials occurring in 2009 and 2010, verdicts were returned against us and for the plaintiffs in varying amounts totaling approximately $520,000. We are appealing the unfavorable verdicts and intend to vigorously defend all of these lawsuits. We are engaged in ongoing negotiations with our insurance carrier over insurance coverage on these claims. Our negotiations have resulted in reimbursement of a portion, but not all, of our defense costs. In addition, we are subject to other claims and litigation from time to time as further described in the notes to our consolidated financial statements.

We may be unsuccessful in our future acquisitions, if any, which may have an adverse effect on our business.

Our long-term strategy includes expanding into adjacent markets through selective acquisitions of companies, complementary technologies and organic growth in order to enhance our global market position and broaden our product offerings. This strategy may involve the acquisition of companies that, among other things, enable us to build on our existing strength in a market or that give us access to proprietary technologies that are strategically valuable or allows us to leverage our distribution channels. In connection with this strategy, we could face certain risks and uncertainties in addition to those we face in the day-to-day operations of our business. We also may be unable to identify suitable targets for acquisition or make acquisitions at favorable prices. If we identify a suitable acquisition candidate, our ability to successfully implement the acquisition would depend on a variety of factors, including our ability to obtain financing on acceptable terms. In addition, our acquisition activities could be disrupted by overtures from competitors for the targeted companies, governmental regulation and rapid developments in our industry that decrease the value of a target’s products or services.

Acquisitions involve risks, including those associated with the following:

	•		integrating the operations, financial reporting, disparate technologies and personnel of acquired companies;

	•		managing geographically dispersed operations;

	•		diverting management’s attention from other business concerns;

	•		entering markets or lines of business in which we have either limited or no direct experience; and

	•		potentially losing key employees, customers and strategic partners of acquired companies.

We also may not achieve anticipated revenue and cost benefits. Acquisitions may not be accretive to our earnings and may negatively impact our results of operations as a result of, among other things, the incurrence of debt, one time write-offs of goodwill and amortization expenses of other intangible assets. In addition, future acquisitions could result in dilutive issuances of equity securities.

We may not realize the expected benefits of our recent acquisitions because of integration difficulties and other challenges.

The success of our recent acquisitions of Sirit, Inc., VESystems, LLC and Diamond Consulting Services, Ltd. will depend, in part, on our ability to timely and efficiently realize the anticipated benefits from integrating those businesses with our existing businesses. Factors that could affect our ability to achieve the anticipated benefits from our recent acquisitions include:

	•		failure to implement our business plan for the combined businesses;

	•		unanticipated issues in integrating manufacturing, logistics, information, communications and other systems;

	•		failure of the acquired businesses to perform in accordance with our expectations;

	•		failure to achieve anticipated synergies between our existing businesses and the acquired businesses;

	•		unanticipated changes in applicable laws and regulations;

	•		failure to retain key employees;

	•		operating risks inherent in the respective businesses of Sirit, VESystems and Diamond;

	•		the impact on our internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002;

	•		liabilities of the acquired businesses that were not known at the time of the acquisition; and

	•		other unanticipated issues, expenses and liabilities.

If we cannot successfully integrate the acquired businesses on a reasonable timeframe, we may not be able to realize the potential benefits anticipated from the acquisitions, and our financial condition, results of operations, and cash flows could be materially and adversely affected.

We have substantially increased our leverage in order to finance our recent acquisitions, and we are subject to restrictive covenants that will affect our ability to engage in business transactions.

To finance our recent acquisitions of Sirit and VESystems, we borrowed $84.6 million of additional money and had $304.6 million of indebtedness as of March 31, 2010. Increased indebtedness may reduce our flexibility to respond to changing business and economic conditions or fund capital expenditures or working capital needs because we will require additional funds to service our indebtedness. In addition, financial and other covenants we have with our lenders will limit our ability to incur additional indebtedness, make investments, pay dividends and engage in other transactions, and the leverage may cause potential lenders to be less willing to loan funds to us in the future. Our failure to comply with these covenants could result in an event of default that, if not waived or cured, could result in the acceleration of all our indebtedness.

Our recently acquired businesses may have liabilities which are not known to us.

As a result of our recent acquisitions, we have assumed liabilities associated with the acquired businesses. There may be liabilities that we failed, or were unable, to discover in the course of performing due diligence investigations on the acquired businesses. We cannot assure you that our rights to indemnification from sellers of the acquired businesses to us will be sufficient in amount, scope or duration to fully offset the possible liabilities associated with the businesses or property acquired. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business.

We may be required to recognize impairment charges for our goodwill and other indefinite lived intangible assets.

In accordance with generally accepted accounting principles, we periodically assess our goodwill and other indefinite lived intangible assets to determine if they are impaired. Significant negative industry or economic trends, disruptions to our business, unexpected significant changes or planned changes in the use of our assets and market capitalization declines may result in impairments to goodwill and other long lived assets. Future impairment charges could significantly affect our results of operations in the periods recognized. Impairment charges would also reduce our consolidated shareholders’ equity and increase our debt-to-total-capitalization ratio, which may result in an event of default under our revolving credit facility and other debt instruments. Upon an event of default, if not waived by our lenders, our lenders may declare all amounts outstanding as due and payable.

The costs associated with complying with environmental and safety regulations could lower our margins.

We, like other manufacturers, continue to face heavy governmental regulation of our products, especially in the areas of the environment and employee health and safety. Complying with environmental and safety requirements has added and will continue to add to the cost of our products, and could increase the capital required. While we believe that we are in compliance in all material respects with these laws and regulations, we may be adversely impacted by costs, liabilities or claims with respect to our operations under existing laws or those that may be adopted. These requirements are complex, change frequently and have tended to become more stringent over time. Therefore, we could incur substantial costs, including cleanup costs, fines and civil or criminal sanctions as a result of violation of, or liabilities under, environmental laws and safety regulations.

The inability to obtain raw materials, component parts, and/or finished goods in a timely and cost-effective manner from suppliers would adversely affect our ability to manufacture and market our products.

We purchase raw materials and component parts from suppliers to be used in the manufacturing of our products. In addition, we purchase certain finished goods from suppliers. Changes in our relationships with suppliers, shortages, production delays or work stoppages by the employees of such suppliers could have a material adverse effect on our ability to timely manufacture and market products. In addition, increases in the costs of purchased raw materials, component parts or finished goods could result in manufacturing interruptions, delays, inefficiencies or our inability to market products. In

addition, our profit margins would decrease if prices of purchased raw materials, component parts or finished goods increase and we are unable to pass on those increases to our customers.

Disruptions within our dealer network could adversely affect our business.

We rely on a national and global dealer network to market certain of our products and services. A disruption in our dealer network within a specific local market could temporarily have an adverse impact on our business within the affected market. In addition, the loss or termination of a significant number of dealers could cause difficulties in marketing and distributing our products and have an adverse effect on our business, operating results or financial condition.

Item 5. Other Information.

On April 30, 2010, the Company issued a press release announcing its financial results for the three months ended March 31, 2010. The full text of the press release is included as Exhibit 99.1 to this Form 10-Q.

Item 6. Exhibits

Exhibit 31.1 — CEO Certification under Section 302 of the Sarbanes-Oxley Act
Exhibit 31.2 — CFO Certification under Section 302 of the Sarbanes-Oxley Act
Exhibit 32.1 — CEO Certification of Periodic Report under Section 906 of the Sarbanes-Oxley Act
Exhibit 32.2 — CFO Certification of Periodic Report under Section 906 of the Sarbanes-Oxley Act
Exhibit 99.1 — Press Release dated April 30, 2010
Exhibit 10.1 — Executive Change-in-Control Severance Agreement Tier 1
Exhibit 10.2 — Executive Change-in-Control Severance Agreement Tier 2
Exhibit 10.3 — Manfred Rietsch Employment Agreement

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Federal Signal Corporation
Date: April 30, 2010	By:	/s/ William G. Barker, III
		William G. Barker, III
		Senior Vice President and Chief Financial Officer

Exhibit 10.1

Federal Signal Corporation
Executive Change-in-Control Severance Agreement Tier 1

THIS EXECUTIVE CHANGE-IN-CONTROL SEVERANCE AGREEMENT is made, entered into, and is effective this day of (hereinafter referred to as the “Effective Date”), by and between Federal Signal Corporation (the “Company”), a Delaware corporation, and (the “Executive”).

WHEREAS, the Executive is employed by the Company and will develop considerable experience and knowledge of the business and affairs of the Company concerning its policies, methods, personnel, and operations; and

WHEREAS, the Company is desirous of assuring insofar as possible, that it will continue to have the benefit of the Executive’s services, and the Executive is desirous of having such assurances; and

WHEREAS, the Company recognizes that circumstances may arise in which a Change in Control of the Company occurs, through acquisition or otherwise, thereby causing uncertainty of employment without regard to the Executive’s competence or past contributions. Such uncertainty may result in the loss of the valuable services of the Executive to the detriment of the Company and its shareholders; and

WHEREAS, both the Company and the Executive are desirous that any proposal for a Change in Control or acquisition will be considered by the Executive objectively and with reference only to the business interests of the Company and its shareholders; and

WHEREAS, the Executive will be in a better position to consider the Company’s best interests if the Executive is afforded reasonable security, as provided in this Agreement, against altered conditions of employment which could result from any such Change in Control or acquisition.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

Article 1. Definitions

Wherever used in this Agreement, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:

	(a)		“ Agreement ” means this Executive Change-in-Control Severance Agreement.

	(b)		“ Base Salary ” means, at any time, the then regular annual rate of pay which the Executive is receiving as annual salary, excluding amounts: (i) received under short-term or long-term incentive or other bonus plans, regardless of whether or not the amounts are deferred, or (ii) designated by the Company as payment toward reimbursement of expenses.

	(c)		“ Beneficial Owner ” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

	(d)		“ Board ” means the Board of Directors of the Company.

	(e)		“ Cause ” shall be determined solely by the Committee in the exercise of good faith and reasonable judgment, and shall mean the occurrence of any one or more of the following:

(i)

The Executive’s willful and continued failure to substantially perform his duties with the Company (other than any such failure resulting from the Executive’s Disability), after a

written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Committee believes that the Executive has not substantially performed his duties, and the Executive has failed to remedy the situation within fifteen (15) business days of such written notice from the Company; or

	(ii)		The Executive’s conviction of a felony; or

	(iii)		The Executive’s willful engaging in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise. However, no act or failure to act on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the action or omission was in the best interests of the Company.

(f)

“ Change in Control ” of the Company shall mean the occurrence of any one (1) or more of the following events:

	(i)		Any Person (other than the Company, or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, and any trustee or other fiduciary holding securities under an employee benefit plan of the Company or such proportionately owned corporation), is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing forty percent (40%) or more of the combined voting power of the Company’s then outstanding securities;

	(ii)		During any period of not more than twenty-four (24) consecutive months, individuals who at the beginning of such period constitute the Board of Directors of the Company, and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

	(iii)		The consummation of a merger or consolidation of the Company with any other corporation, other than: (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than sixty percent (60%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires more than forty percent (40%) of the combined voting power of the Company’s then outstanding securities; or

	(iv)		The Company’s stockholders approve a plan or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction or series of transactions having a similar effect).

	(g)		“ Code ” means the Internal Revenue Code of 1986, as amended.

	(h)		“ Committee ” means the Compensation Committee of the Board of Directors of the Company, or, if no Compensation Committee exists, then the full Board of Directors of the Company, or a committee of Board members, as appointed by the full Board to administer this Agreement.

	(i)		“ Company ” means Federal Signal Corporation, a Delaware corporation (including any and all subsidiaries), or any successor thereto as provided in Article 9 herein.

	(j)		“ Disability ” or “ Disabled ” shall have the meaning ascribed to such term in the Executive’s governing long-term disability plan, or if no such plan exists, means entitled to receive Social Security disability benefits.

	(k)		“ Effective Date ” means the date this Agreement is approved by the Board, or such other date as the Board shall designate in its resolution approving this Agreement, and as specified in the opening sentence of this Agreement.

	(l)		“ Effective Date of Termination ” means the date on which a Qualifying Termination occurs, as provided in Section 2.2 herein, which triggers the payment of Severance Benefits hereunder.

	(m)		“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

	(n)		“ Good Reason ” means, without the Executive’s express written consent, the occurrence after a Change in Control of the Company of any one (1) or more of the following, which results in a material negative change in the Executive’s employment relationship with the Company:

	(i)		The assignment of the Executive to duties materially inconsistent with the Executive’s authorities, duties, responsibilities, and status (including offices, titles, and reporting requirements) as an executive and/or officer of the Company, or a material reduction or alteration in the nature or status of the Executive’s authorities, duties, or responsibilities from those in effect as of ninety (90) calendar days prior to the Change in Control, other than an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Executive;

	(ii)		The Company’s requiring the Executive to be based at a location in excess of fifty (50) miles from the location of the Executive’s principal job location or office immediately prior to the Change in Control; except for required travel on the Company’s business to an extent substantially consistent with the Executive’s then present business travel obligations;

	(iii)		A reduction by the Company of the Executive’s Base Salary in effect on the Effective Date hereof, or as the same shall be increased from time to time;

	(iv)		The failure of the Company to continue in effect any of the Company’s short- and long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices, or other compensation arrangements in which the Executive participates unless such failure to continue the plan, policy, practice, or arrangement pertains to all plan participants generally; or the failure by the Company to continue the Executive’s participation therein on substantially the same basis, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants, as existed immediately prior to the Change in Control of the Company;

	(v)		The failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform the Company’s obligations under this Agreement, as contemplated in Article 9 herein; and

	(vi)		A material breach of this Agreement by the Company which is not remedied by the Company within thirty (30) business days of receipt of written notice of such breach delivered by the Executive to the Company.

Unless the Executive becomes Disabled, the Executive’s right to terminate employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness.. Executive must notify the Company within ninety (90) days of the existence of the Good Reason condition, and the Company shall have thirty (30) days to remedy the conditions.

	(o)		“ Notice of Termination ” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

	(p)		“ Person ” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

	(q)		“ Qualifying Termination ” means the Executive’s separation from service (as defined in Section 409A of the Code and the applicable regulations) due to any of the events described in Section 2.2 herein, the occurrence of which triggers the payment of Severance Benefits hereunder.

	(r)		“ Severance Benefits ” mean the payment of severance compensation as provided in Section 2.3 herein.

Article 2. Severance Benefits

2.1 Right to Severance Benefits . The Executive shall be entitled to receive from the Company Severance Benefits as described in Section 2.3 herein, if there has been a Change in Control of the Company and, if within twenty-four (24) calendar months thereafter the Executive’s employment with the Company shall end for any reason specified in Section 2.2 herein as being a Qualifying Termination.

The Executive shall not be entitled to receive Severance Benefits if he is terminated for Cause, or if his employment with the Company ends due to death, Disability, or a voluntary termination of employment for reasons other than as specified in Section 2.2(b) herein.

No Executive shall be entitled to receive duplicative severance benefits under any other Company-related plans or programs if benefits are triggered hereunder.

2.2 Qualifying Termination . The Executive’s separation from service (as defined in Section 409A of the Code and applicable regulations) within twenty-four (24) calendar months after a Change in Control of the Company shall constitute a Qualifying Termination and shall trigger the payment of Severance Benefits to the Executive under this Agreement under the following circumstances:

	(a)		The Company’s involuntary termination of the Executive’s employment without Cause; and

	(b)		The Executive’s voluntary employment termination for Good Reason.

For purposes of this Agreement, a Qualifying Termination shall not include a termination of employment by reason of death, Disability, or the Executive’s voluntary termination for reasons other than as specified in Section 2.2(b) herein, or the Company’s involuntary termination for Cause.

2.3 Description of Severance Benefits . In the event the Executive becomes entitled to receive Severance Benefits, as provided in Sections 2.1 and 2.2 herein, the Company shall pay to the Executive and provide him with the following Severance Benefits, subject to the limitations set forth in Section 5.1 herein :

(a)

Upon a Qualifying Termination, a lump-sum amount equal to the Executive’s accrued but unpaid Base Salary, accrued vacation pay, unreimbursed business expenses, and all other items earned by and owed to the Executive through and including the Effective Date of Termination.

	(b)		Upon a Qualifying Termination, a lump-sum amount equal to the Executive’s then current annual target bonus opportunity, established under the annual bonus plan in which the Executive is then participating, for the bonus plan year in which the Executive’s Effective Date of Termination occurs, multiplied by a fraction the numerator of which is the number of full completed months in the year from January 1 through the Effective Date of Termination, and the denominator of which is twelve (12). This payment will be in lieu of any other payment to be made to the Executive under the annual bonus plan in which the Executive is then participating for the plan year.

	(c)		Upon a Qualifying Termination, a lump-sum amount equal to 1.99 multiplied by the sum of the following: (i) the higher of: (A) the Executive’s annual rate of Base Salary in effect upon the Effective Date of Termination, or (B) the Executive’s annual rate of Base Salary in effect on the date of the Change in Control; and (ii) the Executive’s annual target bonus opportunity established under the annual bonus plan in which the Executive is then participating for the bonus plan year in which the Executive’s Effective Date of Termination occurs.

	(d)		Upon a Qualifying Termination, a lump-sum amount equal to one (1) multiplied by the sum of the following: (i) the higher of: (A) the Executive’s annual rate of Base Salary in effect upon the Effective Date of Termination, or (B) the Executive’s annual rate of Base Salary in effect on the date of the Change in Control; and (ii) the Executive’s annual target bonus opportunity established under the annual bonus plan in which the Executive is then participating for the bonus plan year in which the Executive’s Effective Date of Termination occurs. Such amount shall be in consideration for the Executive entering into a noncompete agreement as described in Article 4 herein.

	(e)		Upon a Qualifying Termination, vesting and cash-out of any and all outstanding cash-based long-term incentive awards held by the Executive, as granted to the Executive by the Company as a component of the Executive’s compensation. The cash-out shall be in a lump-sum amount equal to the target award level established for each award, multiplied by a fraction the numerator of which is the full number of completed days in the preestablished performance period as of the Effective Date of termination, and the denominator of which is the full number of days in the entire performance period (i.e., typically thirty-six (36) months). This payment will be in lieu of any other payment to be made to the Executive under these long-term performance-based award plans.

	(f)		Upon the occurrence of a Change in Control, an immediate full vesting and lapse of all restrictions on any and all outstanding equity-based long-term incentives, including but not limited to stock options and restricted stock awards held by the Executive. This provision shall override any conflicting language contained in the Executive’s respective award agreements.

	(g)		Upon the occurrence of a Change in Control, the Company shall, as soon as possible, but in no event longer than thirty (30) calendar days following the occurrence of a Change in Control, make an irrevocable contribution to the then current trust in effect for purposes of holding assets to assist the Company in satisfying its liabilities under the Federal Signal Corporation Supplemental Savings and Investment Plan (the “Deferred Compensation Plan”) or successor thereto in an amount that is sufficient (taking into account the trust assets, if any, resulting from prior contributions) to fund the trust in an amount equal to but no less than one hundred percent (100%) of the amount necessary to pay the Executive the benefits to which such Executive would be entitled pursuant to the terms of the aforementioned Deferred Compensation Plan.

	(h)		Upon a Qualifying Termination, continuation for thirty-six (36) months of the Executive’s medical insurance coverage. The benefit shall be provided by the Company to the Executive beginning immediately upon the Effective Date of Termination. Such benefit shall be provided to the Executive at the same coverage level and cost to the Executive as in effect immediately

			prior to the Executive’s Effective Date of Termination. Any COBRA health benefit continuation coverage provided to Executive shall run concurrently with the aforementioned thirty-six (36) month period.

			The value of such medical insurance coverage shall be treated as taxable income to Executive to the extent necessary to comply with Sections 105(h) and 409A of the Code. For purposes of 409A of the Code, any payments of continued health benefits that are made during the applicable COBRA continuation period (even if the Executive does not actually receive COBRA coverage for the entire applicable period), are exempt from the requirements of Code Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9)(v)(B). The right to continue coverage beyond the applicable COBRA continuation period is not subject to liquidation or exchange for another benefit. Notwithstanding the above, this medical insurance benefit shall be discontinued prior to the end of the stated continuation period in the event the Executive receives a substantially similar benefit from a subsequent employer, as determined solely by the Committee in good faith. For purposes of enforcing this offset provision, the Executive shall be deemed to have a duty to keep the Company informed as to the terms and conditions of any subsequent employment and any corresponding benefit earned from such employment, and shall provide, or cause to provide, to the Company in writing correct, complete, and timely information concerning the same.

2.4 Termination for Total and Permanent Disability . Following a Change in Control, if the Executive’s employment is terminated with the Company due to Disability, the Executive’s benefits shall be determined in accordance with the Company’s retirement, insurance, and other applicable plans and programs then in effect.

2.5 Termination for Death . Following a Change in Control, if the Executive’s employment with the Company is terminated by reason of his death, the Executive’s benefits shall be determined in accordance with the Company’s retirement, survivor’s benefits, insurance, and other applicable programs then in effect.

2.6 Termination for Cause or by the Executive Other Than for Good Reason . Following a Change in Control, if the Executive has a separation from service (as defined in Section 409A of the Code and the applicable regulations) either due to: (i) termination by the Company for Cause; or (ii) voluntary termination by the Executive for reasons other than as specified in Section 2.2(b) herein, the Company shall pay the Executive his accrued but unpaid Base Salary at the rate then in effect, accrued vacation, and other items earned by and owed to the Executive through the Executive’s separation from service, plus all other amounts to which the Executive is entitled under any compensation plans of the Company at the time such payments are due, and the Company shall have no further obligations to the Executive under this Agreement.

2.7 Notice of Termination . Any termination of the Executive’s employment by the Company for Cause or by the Executive for Good Reason shall be communicated by Notice of Termination to the other party.

Article 3. Form and Timing of Severance Benefits

3.1 Form and Timing of Severance Benefits . The Severance Benefits described in Sections 2.3(a), 2.3(b), 2.3(c), 2.3(d), and 2.3(e) herein shall be paid in cash to the Executive in a single lump sum as soon as practicable following the Effective Date of Termination, but in no event beyond ten (10) calendar days from such date.

3.2. Internal Revenue Code Section 409A. The Plan is intended to comply with the American Jobs Creation Act of 2004, Code Section 409A, and related guidance.

(a) Notwithstanding anything to the contrary set forth in this Agreement, any Severance Benefits paid (i) within 2- ¹ / 2 months of the end of the Company’s taxable year containing the Executive’s severance from employment, or (ii) within 2- ¹ / 2 months of the Executive’s taxable year containing the severance from employment shall be exempt from the requirements of Section 409A of the Code, and shall be paid in accordance with this Article 3. Severance Benefits subject to this Section 3.2(a) shall be treated and shall be deemed to be an entitlement to a separate payment within the meaning of Section 409A of the Code and the regulations thereunder.

(b) To the extent Severance Benefits are not exempt from Section 409A under Section 3.2(a) above, any Benefits paid in the first 6 months following the Executive’s severance from employment that are equal to or less than the lesser of the amounts described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and (2) shall be exempt from Section 409A and shall be paid in accordance with this Article 3. Severance Benefits subject to this Section 3.2(b) shall be treated and shall be deemed to be an entitlement to a separate payment within the meaning of Section 409A of the Code and the regulations thereunder.

(c) To the extent Severance Benefits are not exempt from Section 409A under Sections 3.2(a) or (b) above, any Benefits paid equal to or less than the applicable dollar amount under Section 402(g)(1)(B) of the Code for the year of severance from employment shall be exempt from Section 409A in accordance with Treasury Regulation Section 1.409A-1(b)(9)(v)(D) and shall be paid in accordance with this Article 3. Severance Benefits subject to this Section 3.2(c) shall be treated and shall be deemed to be an entitlement to a separate payment within the meaning of Section 409A of the Code and the regulations thereunder.

(d) To the extent Severance Benefits are not exempt from Section 409A pursuant to Sections 3.2(a), (b) or (c) above, and to the extent the Executive is a “specified employee” (as defined below), payments due to the Executive under Section 6 shall begin no sooner than six months after the Executive’s severance from employment (other than for Death) ; provided, however, that any payments not made during the six (6) month period described in this Section 3.2(d) due to the 6-month delay period required under Treasury Regulation Section 1.409A-3(i)(2) shall be made in a single lump sum as soon as administratively practicable after the expiration of such six (6) month period, with interest thereon , and the balance of all other payments required under this Agreement shall be made as otherwise scheduled in this Agreement. Notwithstanding anything herein to the contrary, and subject to Code Section 409A, to the extent the following rules should apply to the Executive in connection with payments made hereunder, payment shall not be made or commence as a result of the Executive’s Effective Date of Termination to any Executive who is a key employee (defined below) before the date that is not less than six months after the Executive’s Effective Date of Termination. For this purpose, a key employee includes a “specified employee” (as defined in Code Section 409A(a)(2)(B)) during the entire 12-month period determined by the Company ending with the annual date upon which key employees are identified by the Company, and also including any Executive identified by the Company in good faith with respect to any distribution as belonging to the group of identified key employees, to a maximum of 200 such key employees, regardless of whether such Executive is subsequently determined by the Company, any governmental agency, or a court not to be a key employee. The identification date for determining key employees shall be each December 31 (and the new key employee list shall be updated and effective each subsequent April 1).

(e) For purposes of this Section 3.2, any reference to severance of employment or termination of employment shall mean a “separation from service” as defined in Treasury Reg. Section 1.409A-1(h). For purposes of this Agreement, the term “specified employee” shall have the meaning set forth in Treasury Reg. Section 1.409A-1(i). The determination of whether the Executive is a “specified employee” shall be made by the Company in good faith applying the applicable Treasury regulations.

3.3 Withholding of Taxes . The Company shall withhold from any amounts payable under this Agreement all federal, state, city, or other taxes as legally shall be required.

Article 4. Noncompetition and Confidentiality

In the event of a Change in Control, as provided in Article 1 paragraph (f) herein, the following shall apply:

(a)

Noncompetition . During the term of this Agreement and, if longer, for a period of eighteen (18) months after the Effective Date of Termination, the Executive shall not: (i) directly or indirectly act in concert or conspire with any person employed by the Company in order to engage in or prepare to engage in or to have a financial or other interest in any business or any activity which he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on; or (ii) serve as an employee, agent, partner, shareholder, director or consultant for, or in any other capacity participate, engage, or have a financial or other interest in any business or any activity which he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on (provided, however, that notwithstanding anything

to the contrary contained in this Agreement, the Executive may own up to two percent (2%) of the outstanding shares of the capital stock of a company whose securities are registered under Section 12 of the Securities Exchange Act of 1934).

	(b)		Confidentiality . The Company has advised the Executive and the Executive acknowledges that it is the policy of the Company to maintain as secret and confidential all Protected Information (as defined below), and that Protected Information has been and will be developed at substantial cost and effort to the Company. All Protected Information shall remain confidential permanently and no Executive shall at any time, directly or indirectly, divulge, furnish, or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Executive’s employment with the Company), nor use in any manner, either during the term of employment or after termination, at any time, for any reason, any Protected Information, or cause any such information of the Company to enter the public domain.

			For purposes of this Agreement, “Protected Information” means trade secrets, confidential and proprietary business information of the Company, and any other information of the Company, including, but not limited to, customer lists (including potential customers), sources of supply, processes, plans, materials, pricing information, internal memoranda, marketing plans, internal policies, and products and services which may be developed from time to time by the Company and its agents or employees, including the Executive; provided, however, that information that is in the public domain (other than as a result of a breach of this Agreement), approved for release by the Company or lawfully obtained from third parties who are not bound by a confidentiality agreement with the Company, is not Protected Information.

	(c)		Nonsolicitation . During the term of this Agreement and, if longer, for a period of eighteen (18) months after the Effective Date of Termination, the Executive shall not employ or retain or solicit for employment or arrange to have any other person, firm, or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee or consultant of the Company.

	(d)		Cooperation . Executive agrees to cooperate with the Company and its attorneys in connection with any and all lawsuits, claims, investigations, or similar proceedings that have been or could be asserted at any time arising out of or related in any way to Executive’s employment by the Company or any of its subsidiaries.

	(e)		Nondisparagement . At all times, the Executive agrees not to disparage the Company or otherwise make comments harmful to the Company’s reputation.

	(f)		Judicial Interpretation. It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that any restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply to the maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

	(g)		Injunctive Relief and Additional Remedy. The Executive acknowledges that the injury that would be suffered by the Company as a result of a breach of the provisions of this Agreement would be irreparable and that an award of monetary damages to the Company for such a breach would be an inadequate remedy. Consequently, the Company will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Agreement, and the Company will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s rights under this Article

or any other remedies of the Company, if the Executive breaches any of the provisions of this Article, the Company will have the right to recover any amounts paid to the Executive under subsection 2.3(d) of this Agreement.

Article 5. Reduction of Severance Benefits in the Event of an Excise Tax Due

5.1 Events Triggering Reduction of Severance Benefits . If any portion of the Severance Benefits or any other payment under this Agreement, or under any other agreement with, or plan of the Company (in the aggregate, “Total Payments”) would constitute an “excess parachute payment,” such that a golden parachute excise tax is due, the Company will make no additional payments to the Executive to cover the cost of such excise tax (a “Gross-Up Payment”) and the aggregate amount of Severance Payments payable to the Executive under this Agreement, or any other agreement with or plan of the Company, shall be reduced to the largest amount which would both (i) not cause any excise tax to be payable by the Executive, and (ii) not cause any of the Severance Payments to become nondeductible by the Company by reason of Section 280G of the Code (or any successor provision thereto).

For purposes of this Agreement, the term “excess parachute payment” shall have the meaning assigned to such term in Section 280G of the Code, and the term “excise tax” shall mean the tax imposed on such excess parachute payment pursuant to Sections 280G and 4999 of the Code.

5.2 Procedures in the Event of a Reduction in Severance Benefits. If there is a determination that the Severance Benefits payable to the Executive must be reduced pursuant to Section 5.1, the Company shall promptly give the Executive notice to that effect and a copy of the detailed calculation thereof and of the amount that must be reduced. The Executive may then elect, at the Executive’s sole discretion, which and how much of the various Severance Benefits shall be eliminated or reduced as long as after the Execuitive’s election the aggregate present value of the Severance Benefits equals the largest amount that would both (i) not cause any excise tax to be payable by the Executive, and (ii) not cause any Severance Payment to become nondeductible by the Company by reason of Section 280G of the Code (or any successor provision thereto). The Executive will advise the Company in writing of the Executive’s election under this Section 5.2 within ten (10) days of the Executive’s receipt of the notice under this Section 5.2 from the Company. If no election is made by the Executive within the ten-day period, the Company may election which and how much of the Severance Benefits shall be eliminated or reduced as long as after the Company’s election the aggregate present value of the Severance Payments equals the largest amount that would both (i) not cause any excise tax to be paid by the Executive, and (ii) not cause and Severance Payments to become nondeductible by the Company by reason of Section 289G of the Code (or any successor provision thereof). For purposes of this Section 5.2, present value shall be determined in accordance with Section 280G(d)(4) of the Code.

Article 6. The Company’s Payment Obligation

6.1 Payment Obligations Absolute . The Company’s obligation to make the payments and the arrangements provided for herein shall be absolute and unconditional, and shall not be affected by any circumstances including, without limitation, any offset, counterclaim, recoupment, defense, or other right which the Company may have against the Executive or anyone else. All amounts payable by the Company hereunder shall be paid without notice or demand. Each and every payment made hereunder by the Company shall be final, and the Company shall not seek to recover all or any part of such payment from the Executive or from whomsoever may be entitled thereto, for any reasons whatsoever.

The Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of this Agreement, and the obtaining of any such other employment shall in no event effect any reduction of the Company’s obligations to make the payments and arrangements required to be made under this Agreement, except to the extent provided in Section 2.3(h) herein.

6.2 Contractual Rights to Benefits . This Agreement establishes and vests in the Executive a contractual right to the benefits to which he is entitled hereunder. However, nothing herein contained shall require or be deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any funds or other assets, in trust or otherwise, to provide for any payments to be made or required hereunder, except to the extent provided in Section 2.3(g) herein.

Article 7. Term of Agreement

This Agreement will commence on the Effective Date and shall continue in effect for three (3) full years. However, at the end of such three (3) year period and, if extended, at the end of each additional year thereafter, the term of this Agreement shall be extended automatically for one (1) additional year, unless either party delivers written notice six (6) months prior to the end of such term, or extended term, stating that the Agreement will not be extended. In such case, the Agreement will terminate at the end of the term, or extended term, then in progress.

However, in the event of a Change in Control of the Company, the term of this Agreement shall automatically be extended for two (2) years from the date of the Change in Control.

Article 8. Dispute Resolution

Any dispute or controversy between the parties arising under or in connection with this Agreement shall be settled by arbitration.

The arbitration proceeding shall be conducted before a panel of three (3) arbitrators sitting in a location selected by the Executive within fifty (50) miles from the location of the Executive’s principal place of employment, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the award of the arbitrators in any court having competent jurisdiction.

All expenses of such litigation or arbitration, including the reasonable fees and expenses of the legal representative for the Executive, and necessary costs and disbursements incurred as a result of such dispute or legal proceeding, and any prejudgment interest, shall be borne by the Company.

Article 9. Successors

9.1 Successors to the Company . The Company shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) of all or a significant portion of the assets of the Company by agreement, in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. Regardless of whether such agreement is executed, this Agreement shall be binding upon any successor in accordance with the operation of law and such successor shall be deemed the “Company” for purposes of this Agreement.

9.2 Assignment by the Executive . This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive dies while any amount would still be payable to him hereunder had he continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s beneficiary designated under the Company’s life insurance plan, or, if there is no such beneficiary, to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.

Article 10. Miscellaneous

10.1 Employment Status . This Agreement is not, and nothing herein shall be deemed to create, an employment contract between the Executive and the Company or any of its subsidiaries. The Executive acknowledges that the rights of the Company remain wholly intact to change or reduce at any time and from time to time his compensation, title, responsibilities, location, and all other aspects of the employment relationship, or to discharge him prior to a Change in Control (subject to such discharge possibly being considered a Qualifying Termination pursuant to Section 2.2).

10.2 Entire Agreement . This Agreement contains the entire understanding of the Company and the Executive with respect to the subject matter hereof. In addition, the payments provided for under this Agreement in the event of the Executive’s termination of employment shall be in lieu of any severance benefits payable under any severance plan, program, or policy of the Company to which he might otherwise be entitled.

the Executive at the last address he has filed in writing with the Company or, in the case of the Company, at its principal offices.

10.4 Execution in Counterparts . This Agreement may be executed by the parties hereto in counterparts, each of which shall be deemed to be original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart.

10.5 Conflicting Agreements . This Agreement completely supersedes any and all prior change-in-control agreements or understandings, oral or written, entered into by and between the Company and the Executive, with respect to the subject matter hereof, and all amendments thereto, in their entirety. Further, the Executive hereby represents and warrants to the Company that his entering into this Agreement, and the obligations and duties undertaken by him hereunder, will not conflict with, constitute a breach of, or otherwise violate the terms of, any other employment or other agreement to which he is a party, except to the extent any such conflict, breach, or violation under any such agreement has been disclosed to the Board in writing in advance of the signing of this Agreement.

Notwithstanding any other provisions of this Agreement to the contrary, if there is any inconsistency between the terms and provisions of this Agreement and the terms and provisions of Company-sponsored compensation and welfare plans and programs, the Agreement’s terms and provisions shall completely supersede and replace the conflicting terms of the Company-sponsored compensation and welfare plans and programs, where applicable.

10.6 Severability . In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. Further, the captions of this Agreement are not part of the provisions hereof and shall have no force and effect.

Notwithstanding any other provisions of this Agreement to the contrary, the Company shall have no obligation to make any payment to the Executive hereunder to the extent, but only to the extent, that such payment is prohibited by the terms of any final order of a federal or state court or regulatory agency of competent jurisdiction; provided, however, that such an order shall not affect, impair, or invalidate any provision of this Agreement not expressly subject to such order.

10.7 Modification . No provision of this Agreement may be modified, waived, or discharged unless such modification, waiver, or discharge is agreed to in writing and signed by the Executive and by a member of the Board, as applicable, or by the respective parties’ legal representatives or successors.

10.8 Applicable Law . To the extent not preempted by the laws of the United States, the laws of Delaware shall be the controlling law in all matters relating to this Agreement without giving effect to principles of conflicts of laws.

IN WITNESS WHEREOF, the parties have executed this Agreement on this day of , .

ATTEST

Federal Signal Corporation



By:		,
	Compensation Committee of the Board of Directors



Executive

Exhibit 10.2

Federal Signal Corporation
Executive Change-in-Control Severance Agreement Tier 2

THIS EXECUTIVE CHANGE-IN-CONTROL SEVERANCE AGREEMENT is made, entered into, and is effective this day of March (hereinafter referred to as the “Effective Date”), by and between Federal Signal Corporation (the “Company”), a Delaware corporation, and (the “Executive”). This Agreement supersedes any applicable previously existing change-in-control severance agreement between the Company and the Executive.

WHEREAS, the Executive is employed by the Company and has considerable experience and knowledge of the business and affairs of the Company concerning its policies, methods, personnel, and operations; and

WHEREAS, the Company is desirous of assuring insofar as possible, that it will continue to have the benefit of the Executive’s services, and the Executive is desirous of having such assurances; and

Article 1. Definitions

Wherever used in this Agreement, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:

	(a)		“ Agreement ” means this Executive Change-in-Control Severance Agreement.

	(b)		“ Base Salary ” means, at any time, the then regular annual rate of pay which the Executive is receiving as annual salary, excluding amounts: (i) received under short-term or long-term incentive or other bonus plans, regardless of whether or not the amounts are deferred, or (ii) designated by the Company as payment toward reimbursement of expenses.

	(c)		“ Beneficial Owner ” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

	(d)		“ Board ” means the Board of Directors of the Company.

	(e)		“ Cause ” shall be determined solely by the Committee in the exercise of good faith and reasonable judgment, and shall mean the occurrence of any one or more of the following:

(i)

The Executive’s willful and continued failure to substantially perform his duties with the Company (other than any such failure resulting from the Executive’s Disability), after a

	(ii)		The Executive’s conviction of a felony; or

	(iii)		The Executive’s willful engaging in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise. However, no act or failure to act on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the action or omission was in the best interests of the Company.

(f)

“ Change in Control ” of the Company shall mean the occurrence of any one (1) or more of the following events:

	(i)		Any Person (other than the Company, or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, and any trustee or other fiduciary holding securities under an employee benefit plan of the Company or such proportionately owned corporation), is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing forty percent (40%) or more of the combined voting power of the Company’s then outstanding securities;

	(ii)		During any period of not more than twenty-four (24) consecutive months, individuals who at the beginning of such period constitute the Board of Directors of the Company, and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

	(iii)		The consummation of a merger or consolidation of the Company with any other corporation, other than: (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than sixty percent (60%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires more than forty percent (40%) of the combined voting power of the Company’s then outstanding securities; or

	(iv)		The Company’s stockholders approve a plan or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction or series of transactions having a similar effect).

	(g)		“ Code ” means the Internal Revenue Code of 1986, as amended.

	(h)		“ Committee ” means the Compensation Committee of the Board of Directors of the Company, or, if no Compensation Committee exists, then the full Board of Directors of the Company, or a committee of Board members, as appointed by the full Board to administer this Agreement.

	(i)		" Company ” means Federal Signal Corporation, a Delaware corporation (including any and all subsidiaries), or any successor thereto as provided in Article 9 herein.

	(j)		" Disability ” or “ Disabled ” shall have the meaning ascribed to such term in the Executive’s governing long-term disability plan, or if no such plan exists, means entitled to receive Social Security disability benefits.

	(k)		" Effective Date ” means the date this Agreement is approved by the Board, or such other date as the Board shall designate in its resolution approving this Agreement, and as specified in the opening sentence of this Agreement.

	(l)		" Effective Date of Termination ” means the date on which a Qualifying Termination occurs, as provided in Section 2.2 herein, which triggers the payment of Severance Benefits hereunder.

	(m)		" Exchange Act ” means the Securities Exchange Act of 1934, as amended.

	(n)		" Good Reason ” means, without the Executive’s express written consent, the occurrence after a Change in Control of the Company of any one (1) or more of the following, which results in a material negative change in the Executive’s employment relationship with the Company:

	(i)		The assignment of the Executive to duties materially inconsistent with the Executive’s authorities, duties, responsibilities, and status (including offices, titles, and reporting requirements) as an executive and/or officer of the Company, or a material reduction or alteration in the nature or status of the Executive’s authorities, duties, or responsibilities from those in effect as of ninety (90) calendar days prior to the Change in Control, other than an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Executive;

	(ii)		The Company’s requiring the Executive to be based at a location in excess of fifty (50) miles from the location of the Executive’s principal job location or office immediately prior to the Change in Control; except for required travel on the Company’s business to an extent substantially consistent with the Executive’s then present business travel obligations;

	(iii)		A reduction by the Company of the Executive’s Base Salary in effect on the Effective Date hereof, or as the same shall be increased from time to time;

	(iv)		The failure of the Company to continue in effect any of the Company’s short- and long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices, or other compensation arrangements in which the Executive participates unless such failure to continue the plan, policy, practice, or arrangement pertains to all plan participants generally; or the failure by the Company to continue the Executive’s participation therein on substantially the same basis, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants, as existed immediately prior to the Change in Control of the Company;

	(v)		The failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform the Company’s obligations under this Agreement, as contemplated in Article 9 herein; and

	(vi)		A material breach of this Agreement by the Company which is not remedied by the Company within thirty (30) business days of receipt of written notice of such breach delivered by the Executive to the Company.

	(o)		“ Notice of Termination ” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

	(p)		“ Person ” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

	(q)		“ Qualifying Termination ” means the Executive’s separation from service (as defined in Section 409A of the Code and the applicable regulations) due to any of the events described in Section 2.2 herein, the occurrence of which triggers the payment of Severance Benefits hereunder.

	(r)		“ Severance Benefits ” mean the payment of severance compensation as provided in Section 2.3 herein.

Article 2. Severance Benefits

No Executive shall be entitled to receive duplicative severance benefits under any other Company-related plans or programs if benefits are triggered hereunder.

	(a)		The Company’s involuntary termination of the Executive’s employment without Cause; and

	(b)		The Executive’s voluntary employment termination for Good Reason.

(a)

	(b)		Upon a Qualifying Termination, a lump-sum amount equal to the Executive’s then current annual target bonus opportunity, established under the annual bonus plan in which the Executive is then participating, for the bonus plan year in which the Executive’s Effective Date of Termination occurs, multiplied by a fraction the numerator of which is the number of full completed months in the year from January 1 through the Effective Date of Termination, and the denominator of which is twelve (12). This payment will be in lieu of any other payment to be made to the Executive under the annual bonus plan in which the Executive is then participating for the plan year.

	(c)		Upon a Qualifying Termination, a lump-sum amount equal to one and one-half (1.5) multiplied by the sum of the following: (i) the higher of: (A) the Executive’s annual rate of Base Salary in effect upon the Effective Date of Termination, or (B) the Executive’s annual rate of Base Salary in effect on the date of the Change in Control; and (ii) the Executive’s annual target bonus opportunity established under the annual bonus plan in which the Executive is then participating for the bonus plan year in which the Executive’s Effective Date of Termination occurs.

	(d)		Upon a Qualifying Termination, a lump-sum amount equal to one-half (0.5) multiplied by the sum of the following: (i) the higher of: (A) the Executive’s annual rate of Base Salary in effect upon the Effective Date of Termination, or (B) the Executive’s annual rate of Base Salary in effect on the date of the Change in Control; and (ii) the Executive’s annual target bonus opportunity established under the annual bonus plan in which the Executive is then participating for the bonus plan year in which the Executive’s Effective Date of Termination occurs. Such amount shall be in consideration for the Executive entering into a noncompete agreement as described in Article 4 herein.

	(e)		Upon a Qualifying Termination, vesting and cash-out of any and all outstanding cash-based long-term incentive awards held by the Executive, as granted to the Executive by the Company as a component of the Executive’s compensation. The cash-out shall be in a lump-sum amount equal to the target award level established for each award, multiplied by a fraction the numerator of which is the full number of completed days in the preestablished performance period as of the Effective Date of termination, and the denominator of which is the full number of days in the entire performance period (i.e., typically thirty-six (36) months). This payment will be in lieu of any other payment to be made to the Executive under these long-term performance-based award plans.

	(f)		Upon the occurrence of a Change in Control, an immediate full vesting and lapse of all restrictions on any and all outstanding equity-based long-term incentives, including but not limited to stock options and restricted stock awards held by the Executive. This provision shall override any conflicting language contained in the Executive’s respective award agreements.

	(g)		Upon the occurrence of a Change in Control, the Company shall, as soon as possible, but in no event longer than thirty (30) calendar days following the occurrence of a Change in Control, make an irrevocable contribution to the then current trust in effect for purposes of holding assets to assist the Company in satisfying its liabilities under the Federal Signal Corporation Supplemental Savings and Investment Plan (the “Deferred Compensation Plan”) or successor thereto in an amount that is sufficient (taking into account the trust assets, if any, resulting from prior contributions) to fund the trust in an amount equal to but no less than one hundred percent (100%) of the amount necessary to pay the Executive the benefits to which such Executive would be entitled pursuant to the terms of the aforementioned Deferred Compensation Plan.

	(h)		Upon a Qualifying Termination, continuation for thirty-six (36) months of the Executive’s medical insurance coverage. The benefit shall be provided by the Company to the Executive beginning immediately upon the Effective Date of Termination. Such benefit shall be provided

			to the Executive at the same coverage level and cost to the Executive as in effect immediately prior to the Executive’s Effective Date of Termination. Any COBRA health benefit continuation coverage provided to Executive shall run concurrently with the aforementioned thirty-six (36) month period.

			The value of such medical insurance coverage shall be treated as taxable income to Executive to the extent necessary to comply with Sections 105(h) and 409A of the Code. For purposes of 409A of the Code, any payments of continued health benefits that are made during the applicable COBRA continuation period (even if the Executive does not actually receive COBRA coverage for the entire applicable period), are exempt from the requirements of Code Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9)(v)(B). The right to continue coverage beyond the applicable COBRA continuation period is not subject to liquidation or exchange for another benefit. Notwithstanding the above, this medical insurance benefit shall be discontinued prior to the end of the stated continuation period in the event the Executive receives a substantially similar benefit from a subsequent employer, as determined solely by the Committee in good faith. For purposes of enforcing this offset provision, the Executive shall be deemed to have a duty to keep the Company informed as to the terms and conditions of any subsequent employment and any corresponding benefit earned from such employment, and shall provide, or cause to provide, to the Company in writing correct, complete, and timely information concerning the same.

Article 3. Form and Timing of Severance Benefits

3.2. Internal Revenue Code Section 409A. The Plan is intended to comply with the American Jobs Creation Act of 2004, Code Section 409A, and related guidance.

Article 3. Severance Benefits subject to this Section 3.2(a) shall be treated and shall be deemed to be an entitlement to a separate payment within the meaning of Section 409A of the Code and the regulations thereunder.

3.3 Withholding of Taxes . The Company shall withhold from any amounts payable under this Agreement all federal, state, city, or other taxes as legally shall be required.

Article 4. Noncompetition and Confidentiality

In the event of a Change in Control, as provided in Article 1 paragraph (f) herein, the following shall apply:

(a)

			in any other capacity participate, engage, or have a financial or other interest in any business or any activity which he knows (or reasonably should have known) to be directly competitive with the business of the Company as then being carried on (provided, however, that notwithstanding anything to the contrary contained in this Agreement, the Executive may own up to two percent (2%) of the outstanding shares of the capital stock of a company whose securities are registered under Section 12 of the Securities Exchange Act of 1934).

	(b)		Confidentiality . The Company has advised the Executive and the Executive acknowledges that it is the policy of the Company to maintain as secret and confidential all Protected Information (as defined below), and that Protected Information has been and will be developed at substantial cost and effort to the Company. All Protected Information shall remain confidential permanently and no Executive shall at any time, directly or indirectly, divulge, furnish, or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Executive’s employment with the Company), nor use in any manner, either during the term of employment or after termination, at any time, for any reason, any Protected Information, or cause any such information of the Company to enter the public domain.

			For purposes of this Agreement, “Protected Information” means trade secrets, confidential and proprietary business information of the Company, and any other information of the Company, including, but not limited to, customer lists (including potential customers), sources of supply, processes, plans, materials, pricing information, internal memoranda, marketing plans, internal policies, and products and services which may be developed from time to time by the Company and its agents or employees, including the Executive; provided, however, that information that is in the public domain (other than as a result of a breach of this Agreement), approved for release by the Company or lawfully obtained from third parties who are not bound by a confidentiality agreement with the Company, is not Protected Information.

	(c)		Nonsolicitation . During the term of this Agreement and, if longer, for a period of eighteen (18) months after the Effective Date of Termination, the Executive shall not employ or retain or solicit for employment or arrange to have any other person, firm, or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee or consultant of the Company.

	(d)		Cooperation . Executive agrees to cooperate with the Company and its attorneys in connection with any and all lawsuits, claims, investigations, or similar proceedings that have been or could be asserted at any time arising out of or related in any way to Executive’s employment by the Company or any of its subsidiaries.

	(e)		Nondisparagement . At all times, the Executive agrees not to disparage the Company or otherwise make comments harmful to the Company’s reputation.

	(f)		Judicial Interpretation. It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that any restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply to the maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

	(g)		Injunctive Relief and Additional Remedy. The Executive acknowledges that the injury that would be suffered by the Company as a result of a breach of the provisions of this Agreement would be irreparable and that an award of monetary damages to the Company for such a breach would be an inadequate remedy. Consequently, the Company will have the right, in addition to any other rights it

may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Agreement, and the Company will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s rights under this Article or any other remedies of the Company, if the Executive breaches any of the provisions of this Article, the Company will have the right to recover any amounts paid to the Executive under subsection 2.3(d) of this Agreement.

Article 5. Reduction of Severance Benefits in the Event of an Excise Tax Due

Article 6. The Company’s Payment Obligation

or other assets, in trust or otherwise, to provide for any payments to be made or required hereunder, except to the extent provided in Section 2.3(g) herein.

Article 7. Term of Agreement

However, in the event of a Change in Control of the Company, the term of this Agreement shall automatically be extended for two (2) years from the date of the Change in Control.

Article 8. Dispute Resolution

Any dispute or controversy between the parties arising under or in connection with this Agreement shall be settled by arbitration.

Article 9. Successors

Article 10. Miscellaneous

10.3 Notices . All notices, requests, demands, and other communications hereunder shall be sufficient if in writing and shall be deemed to have been duly given if delivered by hand or if sent by registered or certified mail to the Executive at the last address he has filed in writing with the Company or, in the case of the Company, at its principal offices.

IN WITNESS WHEREOF, the parties have executed this Agreement on this day of , .

ATTEST

Federal Signal Corporation

By: ,

Compensation Committee of the Board of Directors

Executive

Exhibit 10.3

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”), dated as of , 2010 (the “Effective Date”), is entered into by and between Federal Signal Corporation, a Delaware corporation and any of its parents, subsidiaries and affiliates as may employ Employee from time to time (“Employer”) and Manfred Rietsch.(“Employee”).

W I T N E S S E T H:

WHEREAS , Employer desires to employ Employee, and Employee desires to enter the employment of Employer on the terms and subject to the conditions set forth in this Agreement;

NOW, THEREFORE , for and in consideration of the mutual promises, covenants and obligations contained herein, Employer and Employee agree as follows:

ARTICLE 1: EMPLOYMENT AND DUTIES:

1.1 Employer agrees to employ Employee, and Employee agrees to be employed by Employer, beginning as of the Effective Date and continuing through the second anniversary of the Effective Date (the “Term”) subject to the terms and conditions of this Agreement.

1.2 Beginning as of the Effective Date, Employee shall be employed by Employer performing substantially the same duties and responsibilities that he performed as Chief Executive Officer of VESystems under such title as may be determined by Employer in its sole discretion (hereinafter the “Position”). Employee shall report to a corporate officer or manager designated by the Chief Executive Officer of Employer (the “CEO”) and shall have such duties and authority commensurate with his skills and experience as shall be determined from time to time by Employer that are: (i) agreed to in writing by Employee; or (ii) reasonably compatible with the duties and authority of persons serving in a similar employment position with similar employers. Employee agrees to serve in the assigned position or in such other capacities commensurate with his skills and experience as may be reasonably requested from time to time by Employer, as long as such other capacities are: (i) agreed to in writing by Employee; or (ii) not substantially different from the originally assigned position. Employee agrees to perform diligently and to the reasonable best of Employee’s abilities, and in a trustworthy, businesslike and efficient manner, the duties and services pertaining to the Position as reasonably determined by Employer, as well as such additional or different duties and services appropriate to such positions.

1.3 Employee shall at all times comply with and be subject to such policies and procedures not inconsistent with this Agreement as Employer may establish from time to time, including, without limitation, Employer’s Company Policy for Business Conduct (the “Code of Business Conduct”).

1.4 Employee shall, during the period of Employee’s employment by Employer, devote Employee’s full business time and energy to the performance of Employee’s duties hereunder and to the business and affairs of Employer. During the period of Employee’s employment, Employee

may not engage, directly or indirectly, in any other business, profession, investment, or activity for compensation or otherwise that in the good faith business determination of the CEO would materially interfere with Employee’s performance of Employee’s duties hereunder, is materially contrary to the interest of Employer or any of its parents, subsidiaries, divisions or other affiliates (including but not limited to VESystems Corporation and VESystems, LLC) (each an “Employer Entity”, or collectively, the “Employer Entities”), or requires any significant portion of Employee’s business time. The foregoing notwithstanding, the parties recognize and agree that Employee may engage in passive personal investments and other business activities that do not materially conflict with the business and affairs of the Employer Entities or materially interfere with Employee’s performance of his duties hereunder. Employee may not serve on the board of directors of any entity other than an Employer Entity and charitable nonprofit organizations during the Term without prior approval therefor from the CEO or the CEO’s designee, which approval shall not be unreasonably withheld. Employee shall be permitted to retain any compensation received for approved service, including approved service on any unaffiliated corporation’s board of directors.

1.5 Employee acknowledges and agrees that Employee owes a fiduciary duty of loyalty, fidelity, and allegiance to act at all times in the best interests of Employer and the other Employer Entities and to do no act which would, directly or indirectly, injure Employer Entities’ business, interests, or reputation. It is agreed that any direct interest in, connection with, or benefit from activities, particularly commercial activities, which interest might materially adversely affect Employer, or any other known Employer Entity, involves a possible conflict of interest. In keeping with Employee’s fiduciary duties to Employer, Employee agrees that Employee shall not become involved in a conflict of interest with Employer or any other Employer Entity, or upon discovery thereof, allow such a conflict to continue without obtaining a waiver of such conflicts from Employer. Moreover, Employee shall not engage in any activity that might reasonably involve a possible conflict of interest without first obtaining approval in accordance with the Code of Conduct. . Nothing contained in this Agreement shall be construed to preclude the transfer of Employee’s employment to another Employer Entity (“Subsequent Employer”) as of, or at any time after, the Effective Date and no such transfer shall be deemed to be a termination of employment for purposes of Article 3 hereof unless it involves a substantial elimination of responsibilities or benefits; provided, however, that, effective with such transfer, all of Employer’s obligations hereunder shall be assumed by and be binding upon, and all of Employer’s rights hereunder shall be assigned to, such Subsequent Employer and the defined term “Employer” as used herein shall thereafter be deemed amended to mean such Subsequent Employer. Except as otherwise provided above, all of the terms and conditions of this Agreement, including without limitation, Employee’s rights and obligations, shall remain in full force and effect following such transfer of employment, subject to the terms and conditions of Article 3.

1.6 Employee hereby represents, warrants and agrees that (i) Employee has the full power to enter into this Agreement and perform the services required of Employee as an employee of Employer; (ii) in the course of performing services as an employee of Employer, Employee will not knowingly violate the terms or conditions of any known agreement between Employee and any third party or knowingly, infringe or wrongfully appropriate, any patents, copyrights, trade secrets or other intellectual property rights of any person or entity anywhere in the world; (iii) Employee has not and will not disclose or use during his employment by Employer any confidential

information that Employee acquired as a result of any previous employment or consulting arrangement that is subject to an obligation of confidentiality; and (iv) Employee has disclosed to Employer in writing (see Exhibit A ) any and all continuing business obligations to others that require Employee not to disclose any information to Employer.

ARTICLE 2: COMPENSATION AND BENEFITS:

2.1 Employee’s base salary beginning upon the Effective Date of employment shall be $218,000.00 per annum, based on a calendar year (the “Base Salary”), which shall be paid in accordance with Employer’s standard payroll practice.

2.2 Employee shall be eligible to participate in Employer’s Short Term Incentive Bonus program, pursuant to the terms and conditions of that program as implemented in the Employer’s sole discretion.

2.3 Employer shall pay or reimburse Employee for all actual, reasonable and customary expenses incurred by Employee in the course of his employment; provided that such expenses are incurred and accounted for in accordance with Employer’s applicable policies and procedures.

2.4 While employed by Employer, Employee shall be allowed to participate, on the same basis generally as other employees of Employer, in all general employee benefit plans and programs, including improvements or modifications of the same, which on the Effective Date or thereafter are made available by Employer to all or substantially all of Employer’s similarly situated employees. Such benefits, plans, and programs shall include, without limitation, medical, health, and dental care, life insurance, disability protection, qualified and non-qualified retirement plans and stock option plans. Except as specifically provided in this Agreement, nothing in this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans or programs that are provided to similarly situated employees pursuant to the terms and conditions of such benefit plans and programs.

2.5 Notwithstanding anything to the contrary in this Agreement, it is specifically understood and agreed that Employer shall not be obligated to institute, maintain, or refrain from changing, amending, or discontinuing any incentive, deferred compensation, employee benefit or stock or stock option program or plan, so long as such actions are prospective and not retroactive and are similarly applicable to covered employees generally.

2.6 Employer shall withhold from any compensation, benefits or amounts payable under this Agreement all federal, state, city, or other taxes as may be required pursuant to any law or governmental regulation or ruling.

2.7 Employee is entitled to four (4) weeks paid vacation per year (prorated for partial years), to be taken at times mutually acceptable to Employee and Employer, and to such paid holidays as are observed by Employer from time to time. Vacation benefits will be administered according to Employer’s applicable practices and procedures, and subject to applicable law.

ARTICLE 3: TERMINATION OF EMPLOYMENT AND EFFECTS OF SUCH TERMINATION:

3.1 After the conclusion of the Term, Employee’s employment with Employer shall continue on an at-will basis; terminable by either party, for any reason, with two weeks’ notice, or payment in lieu thereof, unless a different period of time is agreed upon in writing by the parties.

3.2 Employer may terminate this Agreement before the end of the Term for Cause, or due to Employee’s death or Disability. Employee may terminate this Agreement before the end of the Term for Good Reason.

3.3 “Cause” shall mean the occurrence of any one or more of the following:

	(a)		The Employee’s failure to substantially perform his duties with the Employer after written notice of such failure and a reasonable opportunity to cure following written notice; or

	(b)		The Employee’s conviction of a felony; or

	(c)		The Employee’s willful engaging in conduct that is demonstrably and materially injurious to the Employer, monetarily or otherwise. However, no act or failure to act on the Employee’s part shall be deemed “willful” unless done, or omitted to be done, by the Employee not in good faith and without reasonable belief that the action or omission was in the best interests of the Employer; or

	(d)		The Employee’s material breach of Employer policies, including but not limited to the Code of Business Conduct.

3.4 “Disability” shall have the meaning ascribed to such term in the Employer’s governing long-term disability plan, or if no such plan exists, shall mean entitled to receive Social Security disability benefits.

3.5 “Good Reason” means, without the Employee’s express written consent, the occurrence of any one (1) or more of the following , which results in a material negative change in the Employee’s employment relationship with the Employer:

(a)

The assignment of the Employee to duties materially inconsistent with the Employee’s authorities, duties, responsibilities, and status (including offices, titles, and reporting requirements) as [insert title of Employee] of the Employer, or a material reduction or alteration in the nature or status of the Employee’s authorities, duties, or responsibilities from those in effect as of the date of this Agreement, other than an insubstantial and inadvertent act that is remedied by the Employer promptly after receipt of notice thereof given by the Employee;

	(b)		The Employer’s requiring the Employee to be based at a location in excess of fifty (50) miles from the location of the Employee’s principal job location or office as of the date of this Agreement without Employee’s consent; except for required travel on the Employer’s business to an extent substantially consistent with the Employee’s then present business travel obligations;

	(c)		A reduction by the Employer of the Employee’s compensation under this Agreement or as the same shall be increased from time to time;

	(d)		The failure of the Employer to continue in effect any of the Employer’s short- and long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices, or other compensation arrangements in which the Employee participates unless such failure to continue the plan, policy, practice, or arrangement pertains to all plan participants generally; or the failure by the Employer to continue the Employee’s participation therein on substantially the same basis, both in terms of the amount of benefits provided and the level of the Employee’s participation relative to other participants, as of the date of this Agreement;

	(e)		The failure of the Employer to obtain a satisfactory agreement from any successor to the Employer to assume and agree to perform the Employer’s obligations under this Agreement; and

	(f)		A material breach of this Agreement by the Employer which is not remedied by the Employer within thirty (30) business days of receipt of written notice of such breach delivered by the Employee to the Employer.

Unless the Employee becomes Disabled, the Employee’s right to terminate employment for Good Reason shall not be affected by the Employee’s incapacity due to physical or mental illness. The Employee must notify the Employer within ninety (90) days of the existence of the Good Reason condition, and the Employer shall have thirty (30) days to remedy the conditions.

3.6 If Employer terminates this Agreement or the employment hereunder prior to the end of the Term without Cause or for reason other than death or Disability, or Employee terminates this Agreement or the employment hereunder for Good Reason, Employee shall be eligible to receive those benefits set forth in Employer’s Executive General Severance Plan in effect at the time of such termination, subject to the terms and conditions of that plan, as administered by the Employer in its sole discretion.

3.7 Employee agrees that all disputes relating to Employee’s employment or termination of employment shall be resolved as provided in Section 6.6 hereof. Nothing contained in this Article 3 shall be construed to be a waiver by Employee of any benefits accrued for or due Employee under any employee benefit plan (as such term is defined in Employee Retirement Income Security Act of 1974, as amended) maintained by Employer.

3.8 Termination of the employment relationship does not terminate those obligations imposed by this Agreement, including, without limitation, Employee’s obligations under Article 4 and Article 5, which are continuing obligations for the duration of the Term, or as agreed to in Article 4 and Article 5.

3.9 The payment of any monies to Employee under this Agreement after the date of termination of employment does not constitute an offer or a continuation of employment of Employee. In no event, shall Employee represent or hold himself out to be an employee of Employer after the date of termination of employment with Employer. Except where Employer is lawfully required to withhold any federal, state, or local taxes, Employee shall be responsible for any and all federal, state, or local taxes that arise out of any payments to Employee hereunder.

3.10 During any period during which the Base Salary is being paid to Employee under this Agreement after the date of termination, Employee shall provide to Employer reasonable levels of assistance to Employer in answering questions concerning the business of Employer, transition of responsibility, or litigation, provided that all out of pocket expenses of Employee reasonably incurred, or to be incurred, in connection with such assistance is fully and promptly advanced or reimbursed (at the option of Employee) by Employer.

ARTICLE 4: OWNERSHIP AND PROTECTION OF INTELLECTUAL PROPERTY AND CONFIDENTIAL INFORMATION:

4.1 All information, ideas, concepts, improvements, innovations, developments, methods, processes, designs, analyses, drawings, reports, discoveries, and inventions, whether patentable or not or reduced to practice, which are conceived, made, developed or acquired by Employee, individually or in conjunction with others, which reasonably relate to the business, products or services of Employer or the other Employer Entities (including, without limitation, all such information relating to corporate opportunities, research, financial and sales data, pricing and trading terms, evaluations, opinions, interpretations, acquisition prospects, the identity of customers or their requirements, the identity of key contacts within the customer’s organizations or within the organization of acquisition prospects, or marketing and merchandising techniques, prospective names, marks, and any copyrightable work, trade mark, trade secret or other intellectual property rights (whether or not composing confidential information)), and all writings or materials of any type embodying any of such items shall constitute “Work Product.” All Work Product conceived, made, developed or acquired during Employee’s employment by Employer or any of the other Employer Entities, both before and after the date hereof (whether during business hours or otherwise and whether on Employer’s premises or utilizing Employer’s equipment, supplies, facilities or trade secrets, or otherwise) (“Employer Work Product”) shall be the sole and exclusive property of Employer or other Employer Entity, as the case may be, and shall be treated as “work for hire.” Employee has attached hereto as Exhibit A , a list describing all Work Product conceived, made, developed or acquired prior to Employee’s employment by Employer or any of the other Employer Entities that may reasonably relate to the business, products or services of Employer or the other Employer Entities. If no such list is attached, Employee represents and warrants that there is no such Work Product.

4.2 Employee shall promptly and fully disclose all Employer Work Product to Employer and shall cooperate and perform all actions reasonably requested by Employer (whether during or after the Term of employment) to establish, confirm and protect Employer’s right, title and interest in such Employer Work Product. Without limiting the generality of the foregoing, Employee agrees to reasonably assist Employer, at Employer’s expense, to secure Employer’s rights in the Employer Work Product in any and all countries, including the execution by Employee of all applications and all other instruments and documents which Employer shall deem necessary in order to apply for and obtain rights in such Employer Work Product and in order to assign and convey to Employer the sole and exclusive right, title and interest in and to such Employer Work Product. If Employer is unable because of Employee’s mental or physical incapacity or for any other reason (including Employee’s refusal to do so after request therefor is made by Employer) to secure Employee’s signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Employer Work Product belonging to or assigned to Employer pursuant to Section 4.1 above, then Employee by this Agreement irrevocably designates and appoints Employer and its duly authorized officers and agents as Employee’s agent and attorney-in-fact to act for and in Employee’s behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of patents or copyright registrations thereon with the same legal force and effect as if executed by Employee, but for no other purpose, however Employee will not be required to incur any costs associated with such efforts. Employee agrees not to apply for or pursue any application for any United States or foreign patents or copyright registrations covering any Employer Work Product other than pursuant to this Section in circumstances where such patents or copyright registrations are or have been or are required to be assigned to Employer.

Employer and Employee acknowledge that the provisions of this Agreement requiring assignment of Employer Work Product to Employer do not apply to any Work Product which qualifies fully under the provisions of Section 2870 of the California Labor Code and that such provisions of this Agreement do apply to any Employer Work Product that does not qualify under the provisions of Section 2870 of the California Labor Code. This obligation to assign Work Product does not apply to an invention that Employee developed entirely on his or her own time without using Employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) relate at the time of conception or reduction to practice of the invention to Employer’s business, or actual or demonstrably anticipated research or development of Employer; or (2) result from any work performed by Employee for Employer.

4.3 Employee acknowledges that the businesses of Employer and the other Employer Entities are highly competitive and that their strategies, business plans methods, books, records, and documents, their technical and proprietary information concerning their products, equipment, services, and processes, procurement procedures and pricing techniques, their know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, the names of and other information (such as credit and financial data) concerning their customers, vendors, licensors, employees and business affiliates, and all Employer Work Product, all comprise confidential business information and trade secrets which are valuable, special, and unique assets which Employer or the other Employer Entities use in their business to

obtain a competitive advantage over their competitors. Employee further acknowledges that protection of such confidential business information and trade secrets against unauthorized disclosure and use is of critical importance to Employer and the other Employer Entities in maintaining their competitive position. Employee acknowledges that by reason of Employee’s duties to and association with Employer and the other Employer Entities, Employee has had and will have access to and has and will become informed of such confidential business information which is a competitive asset of Employer and the other Employer Entities. Employee hereby agrees that Employee will not, at any time during or for a period of two years after his or her employment by Employer, make any unauthorized disclosure of any such confidential business information or make any unauthorized disclosure of any trade secrets of Employer or the other Employer Entities, or make any use thereof, except in the carrying out of his or her employment responsibilities hereunder. Employee shall take all reasonably necessary steps to safeguard such confidential business information and protect it against disclosure, misappropriation, misuse, loss and theft. Confidential business information shall not include information in the public domain (but only if the same becomes part of the public domain through a means other than a disclosure prohibited hereunder). The above notwithstanding, a disclosure shall not be unauthorized if (i) it is required by law or by a court of competent jurisdiction or (ii) it is in connection with any judicial, arbitration, dispute resolution or other legal proceeding in which Employee’s legal rights and obligations as an employee or under this Agreement are at issue; provided, however, that Employee shall, to the extent practicable and lawful in any such events, give prior notice to Employer of his or her intent to disclose any such confidential business information in such context so as to allow Employer or other Employer Entity an opportunity (which Employee will not oppose) to obtain such protective orders or similar relief with respect thereto as may be deemed appropriate by Employer.

4.4 All written materials, records, and other documents made by, or coming into the possession of, Employee during the period of Employee’s employment by Employer which contain or disclose confidential business information or trade secrets of Employer or the other Employer Entities, or which relate to Employer Work Product described in Section 4.1 above (collectively, “Confidential Documents”), shall be and remain the property of Employer, or the other Employer Entities, as the case may be. Upon termination of Employee’s employment by Employer, for any reason, Employee promptly shall deliver the Confidential Documents, and all copies thereof, to Employer, as well as any and all other computer programs (including without limitation source and object code versions), devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, flow charts, blue prints, sketches, materials, equipment, other documents or property, or reproductions of any of the aforementioned items belonging to any of Employer, the other Employer Entities, and their respective successors and assigns.

ARTICLE 5: CERTAIN COVENANTS:

5.1 In consideration of the compensation to be paid to Employee under this Agreement, Employee acknowledges that in the course of Employee’s employment with Employer and the other Employer Entities, Employee has prior to the Effective Date, and will during the Term of employment, become familiar with Employer’s and the other Employer Entities’ trade secrets, business plans and business strategies and with other confidential business information concerning

Employer and the other Employer Entities, including without limitation all Employer Work Product, and that Employee’s services have been and shall be of special, unique and extraordinary value to Employer and the other Employer Entities. Employee also acknowledges that in the course of his employment he will have access to Employer’s relationships and goodwill with its customers, distributors, suppliers and employees. Employee agrees that, during the twelve (12) month period immediately following the earlier of termination of employment or the Term, Employee will promptly advise Employer, in writing, before entering into any employment or advisory relationship with any person or entity other than Employer or any other Employer Entities.

5.2 During the period of Employee’s employment by any of the Employer Entities and the two year period after Employee’s employment by any of the Employer Entities terminates, Employee will not knowingly solicit or induce any person who is or was employed by any of the Employer Entities for the two-year period preceding Employee’s termination (a) to interfere with the activities or businesses of any Employer Entity or (b) to discontinue his or her employment with any of the Employer Entities.

5.3 During the period of Employee’s employment by any of the Employer Entities and the two year period after Employee’s employment by any of the Employer Entities terminates, Employee will not knowingly, directly or indirectly, influence or attempt to influence any customers, distributors, vendors, licensors or suppliers of any of the Employer Entities with whom Employee had contact during his employment to divert their business to any competitor of any Employer Entity or in any way interfere with the relationship between any such customer, distributor, vendor, licensor or supplier and any Employer Entity.

5.4 Employee understands that the provisions of Sections 5.1, 5.2 and 5.3 hereof may limit his ability to earn a livelihood in a business similar to the business in which he is currently involved, but as a member of the management group of Employer he nevertheless agrees and hereby acknowledges that (i) such provisions do not impose a greater restraint than is necessary to protect the goodwill or other business interests of the Employer Entities; (ii) such provisions contain reasonable limitations as to time, scope of activity, and geographical area to be restrained; and (iii) the consideration provided hereunder, including without limitation, any amounts or benefits provided under Article 3 hereof, is sufficient to compensate Employee for the restrictions contained in Section 5.1, 5.2 and 5.3 hereof. In consideration of the foregoing and in light of Employee’s education, skills and abilities, Employee agrees that he will not assert that, and it should not be considered that, any provisions of Section 5.1, 5.2 or 5.3 otherwise are void, voidable or unenforceable or should be voided or held unenforceable.

5.5 If, at the time of enforcement of Articles 4 or 5 of this Agreement, a court shall hold that the duration, scope, or area restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall be allowed and directed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. Employee acknowledges that Employee has access to Employer’s confidential business information and his services are unique to the Employer

Entities. Employee therefore agrees that the remedy at law for any breach by him of any of the covenants and agreements set forth in Articles 4 and 5 will be inadequate and that in the event of any such breach, Employer may, in addition to the other remedies which may be available to it at law, apply to any court of competent jurisdiction to obtain specific performance and/or injunctive relief prohibiting the breach of such covenants and agreements and to enforce, or prevent any violations of, the provisions of this Agreement. In addition, in the event of an alleged breach or violation by Employee of this Article 5, the applicable duration of restraint set forth in this Article shall be tolled until such breach or violation has been cured.

5.6 Each of the covenants of this Article 5 are given by Employee as part of the consideration for this Agreement and as an inducement to Employer to enter into this Agreement and accept the obligations hereunder.

ARTICLE 6: MISCELLANEOUS:

6.1 For purposes of this Agreement, the terms “affiliate” or “affiliated” means an entity or entities in which Employer has a greater than 50% or more direct or indirect equity interest or entity or entities that have a greater than 50% or more direct or indirect equity interest in Employer.

6.2 For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when received by or tendered to Employee, Employer, as applicable, by pre-paid courier or by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:


		If to Employer :		Federal Signal Corporation
				1415 W. 22nd Street
				Suite 1100
				Oak Brook IL 60523
				Attn: Jennifer L. Sherman, General Counsel
				Facsimile: (866) 229-4459

		with a copy to :		Bartlit Beck Herman Palenchar & Scott LLP
				1899 Wynkoop Street, Suite 800
				Denver, Colorado 80202
				Attn: James L. Palenchar
				Facsimile: (303) 592-3140

		If to Employee:		To his last known personal residence

6.3 Except to the extent governed by the laws of other States, this Agreement shall be governed by and construed and enforced, in all respects in accordance with; the law of the State of Illinois, without regard to principles of conflicts of law, unless preempted by federal law, in which

case federal law shall govern; provided, however, that the rules of the American Arbitration Association shall govern in all respects with regard to the resolution of disputes hereunder.

6.4 No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

6.5 It is a desire and intent of the Employer and Employee that the terms, provisions, covenants, and remedies contained in this Agreement shall be enforceable to the fullest extent permitted by law. If any such term, provision, covenant, or remedy of this Agreement or the application thereof to any person, association, or entity or circumstances shall, to any extent, be construed to be invalid or unenforceable in whole or in part, then such term, provision, covenant, or remedy shall be construed in a manner consistent with the intent of this Agreement so as to permit its enforceability under the applicable law to the fullest extent permitted by law. In any case, the remaining provisions of this Agreement or the application thereof to any person, association, or entity or circumstances other than those to which they have been held invalid or unenforceable, shall remain in full force and effect.

6.6 It is the mutual intention of the parties to have any dispute concerning this Agreement resolved out of court. Accordingly, the parties agree that any such dispute shall, as the sole and exclusive remedy, be submitted for resolution pursuant to binding arbitration to be held in Chicago, Illinois, in accordance with the employment arbitration rules (except as modified below) of the American Arbitration Association and with the Expedited Procedures thereof (collectively, the “Rules”); provided, however, that Employee or Employer, on its own behalf and on behalf of any of the other Employer Entities, shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any breach or the continuation of any breach of the provisions of this Agreement and Employee or Employer, as the case may be, hereby consents that such restraining order or injunction may be granted without the necessity of the other party posting any bond. Each of the parties hereto agrees that such arbitration shall be conducted by a single arbitrator selected in accordance with the Rules; provided that such arbitrator shall be experienced in deciding cases concerning the matter which is the subject of the dispute. Each of the parties agrees that the award shall be made in writing no more than 30 days following the end of the proceeding. Any award rendered by the arbitrator, as well as the arbitrator’s determination of which party or parties and in what amount(s) the costs and fees of the arbitrator shall be borne, shall be final and binding and judgment may be entered on it in any court of competent jurisdiction. Each of the parties hereto agrees to treat as confidential the results of any arbitration (including, without limitation, any findings of fact and/or law made by the arbitrator) and not to disclose such results to any unauthorized person.

6.7 This Agreement shall be binding upon and inure to the benefit of Employer, its successors in interest, or any other person, association, or entity which may hereafter acquire or succeed to all or substantially all of the business assets of Employer by any means, whether indirectly or directly, and whether by purchase, merger, consolidation, or otherwise. No such assignment shall relieve Employer or Employee of any of its obligations under this Agreement.

Employee’s rights and obligations under this Agreement are personal and such rights, benefits, and obligations of Employee shall not be voluntarily or involuntarily assigned, alienated, or transferred by Employee, whether by operation of law or otherwise, without the prior written consent of Employer, other than in the case of death or permanent disability of Employee.

6.8 This Agreement replaces and merges any previous agreements and discussions pertaining to the subject matter covered herein. This Agreement constitutes the entire agreement of the parties with regard to the terms of Employee’s employment, termination of employment and severance benefits, and contains all of the covenants, promises, representations, warranties, and agreements between the parties with respect to such matters. Each party to this Agreement acknowledges that no representation, inducement, promise, or agreement, oral or written, has been made by either party with respect to the foregoing matters which is not embodied herein, and no agreement, statement, or promise relating to the employment of Employee by Employer that is not contained in this Agreement shall be valid or binding. Any modification of this Agreement will be effective only if it is in writing and signed by each party whose rights hereunder are affected thereby.

6.9 The provisions of this Agreement will be administered, interpreted and construed in a manner intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the regulations issued thereunder or any exception thereto (or disregarded to the extent such provision cannot be so administered, interpreted, or construed). If the Employer determines in good faith that any amounts to be paid to Employee under this Agreement are subject to Section 409A of the Code, then the Employer may, to the extent necessary, adjust the form and/or the timing of such payments as determined to be necessary or advisable to be in compliance with Section 409A. If any payment must be delayed to comply with Section 409A, then the deferred payment will be paid at the earliest practicable date permitted by Section 409A. Notwithstanding any provision of this agreement to the contrary, Employee acknowledges and agrees that the Employer shall not be liable for, and nothing provided or contained in this agreement will be construed to obligate or cause the Employer to be liable for, any tax, interest or penalties imposed on Employee related to or arising with respect to any violation of Section 409A.

[Signature page follows.]

IN WITNESS WHEREOF , Employer and Employee have duly executed this Agreement in multiple originals to be effective on the Effective Date.


FEDERAL SIGNAL CORPORATION.
By:
	Name:	Jennifer L. Sherman
	Title:	General Counsel


	EMPLOYEE

	Manfred Rietsch

EXHIBIT A

LIST OF PRIOR WORK PRODUCT


		IDENTIFYING NO.
TITLE	DATE OF CREATION	OR BRIEF DESCRIPTION

Exhibit 31.1

CEO Certification Under Section 302 of the Sarbanes-Oxley Act

I, William H. Osborne, certify that:

	1.		I have reviewed this quarterly report on Form 10-Q of Federal Signal Corporation;

	2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

	3.		Based on my knowledge, the financial statements and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report;

	4.		The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Company and have:

	a.		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b.		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.		Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.		Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors:

	a.		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

	b.		Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: April 30, 2010



	/s/ William H. Osborne
	William H. Osborne
	President and Chief Executive Officer

Exhibit 31.2

CFO Certification under Section 302 of the Sarbanes-Oxley Act

I, William G. Barker III, certify that:

	1.		I have reviewed this quarterly report on Form 10-Q of Federal Signal Corporation;

	2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

	3.		Based on my knowledge, the financial statements and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report;

	4.		The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Company and have:

	a.		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b.		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.		Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.		Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

	a.		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

	b.		Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: April 30, 2010



	/s/ William G. Barker, III
	William G. Barker, III
	Senior Vice President and Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Federal Signal Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William H. Osborne, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)		the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)		the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 30, 2010



	/s/ William H. Osborne
	William H. Osborne
	President and Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Federal Signal Corporation and will be retained by Federal Signal Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Federal Signal Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William G. Barker III, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)		the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)		the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 30, 2010



	/s/ William G. Barker, III
	William G. Barker, III
	Senior Vice President and Chief Financial Officer

Exhibit 99.1

News From

REGENCY TOWERS, 1415 W. 22ND ST., OAK BROOK, ILLINOIS 60523

FOR IMMEDIATE RELEASE

Federal Signal Corporation Announces First Quarter Results

—Highlights—

•

Q1 orders for existing businesses +23% vs. 2009

•

Orders up for third consecutive quarter; +14% sequentially over Q4 2009

•

Order backlog for existing businesses increased $25 million since Q4 2009

•

Completed acquisitions of Sirit and VESystems

•

Acquisition-related costs and low 2009 year-end backlog result in a Q1 EPS loss from continuing operations of $(0.06)

Oak Brook, Ill., April 30, 2010 — Federal Signal Corporation (NYSE: FSS) reported a loss from continuing operations of $(3.2) million, or a loss of $(0.06) per share, for the first quarter of 2010 on revenue of $167 million. For the same period of 2009 on revenue of $185 million, the Company was breakeven. The year-over-year first quarter income decline was primarily due to lower sales volume, resulting from a lower order backlog and a port workers’ strike in Finland that impacted shipments for our Bronto skylift business, and acquisition costs of $2.6 million partially offset by lower manufacturing and operating expenses, as well as favorable product mix. The Company recorded a net loss including discontinued operations of $(3.6) million in the first quarter of 2010, compared to net income of $1.0 million in the prior year period.

Year-to-date operating cash flow from continuing operations for the first quarter 2010 was a usage of cash of $(9.1) million, as a result of the net loss and a reduction in accrued compensation and other expenses and accrued taxes.

In the quarter, the Company acquired Sirit, a leading manufacturer of RFID technology solutions, and VESystems, which provides software and services to facilitate financial transactions related to electronic toll collection.

William H. Osborne, president and chief executive officer, stated, “Although we reported a slight loss in the quarter, there were several exciting developments for Federal Signal. We saw a 23% increase in new orders for our existing businesses, and these strong orders will drive revenue growth as we move beyond the first quarter. We saw increases in orders in each of our key customer segments – U.S. municipal and government orders were up 9% versus last year, domestic industrial orders increased by 38% and orders from our international customers were 29% higher. We expect to see order growth for our existing businesses throughout 2010. The improving revenue environment will enable us to leverage our recent and ongoing cost reduction initiatives and drive improved profits as we move forward.”

Mr. Osborne continued, “In addition, we completed two key acquisitions which have significantly strengthened our growth platforms in the public safety and intelligent transportation markets. The Sirit and VESystems acquisitions will align with three of our existing businesses – the recently acquired Diamond Consulting Services, plus our PIPS ALPR camera and parking

systems businesses – to form a new operating group called Federal Signal Technologies, or “FSTech” for short. We believe FSTech has potential for significant growth in revenue and profits by capitalizing on the developing global market for intelligent transportation, such as open road tolling and electronic vehicle registration.”

GROUP RESULTS

Safety and Security Systems

First Quarter:

	•		Orders increased 8% from the first quarter of 2009 as the U.S. and global markets continued their recovery from the recession. Non-U.S. orders increased 19% mainly attributed to a large police order for lightbars and sirens. U.S. orders were essentially flat year over year, with strong ALPR and industrial orders partially offset by lower orders in other domestic market segments.

	•		Net sales decreased 4% or $2.5 million compared to the first quarter of 2009 resulting from a lower backlog at the end of 2009 which was partially offset by a favorable foreign currency translation of $1.2 million and strong ALPR demand.

	•		Operating income and margins decreased in the first quarter of 2010 from the comparable period in 2009 primarily as a result of lower sales volume and restructuring activities.

Fire Rescue

First Quarter:

	•		Orders increased 52% from the first quarter of 2009 with increased demand in the Company’s global fire-lift market. Market demand for the Company’s products was recovering in all regions.

	•		Net sales decreased by 24% in the first quarter with declines in both the fire-lift and industrial products compared to the prior year due to the combination of strong 2009 fourth quarter shipments and weak backlog as of December 31, 2009. Additionally, a Finnish port workers strike in March 2010 affected receiving of materials and delivery of units and disrupted operations.

	•		Operating income decreased $1.6 million from the first quarter of 2009 as a result of lower volumes and less favorable mix offset by reduced operating expenses. The port workers’ strike had approximately a $0.5 million negative effect on operating income.

Environmental Solutions

First Quarter:

•

Orders of $87.7 million in the first quarter of 2009 were 30% above the prior year quarter driven by increased demand in all markets and regions. Industrial orders were up 71%, or $10.8 million driven primarily by an increase in vacuum trucks of $5.6 million and waterblasters of $2.7 million. Municipal orders were up $7.3 million with sewer cleaner trucks up $4.9 million and street sweepers up $2.6 million. Non-U.S. orders were up $2.1 million for the quarter.

	•		Net sales decreased 14% compared to the first quarter in 2009. The sales decrease is the result of a lower year-end backlog for vacuum trucks and street sweepers, which declined $11.6 million and $1.8 million, respectively, offset partially by sales of waterblasters which were up $3.1 million for the quarter.

	•		Operating income was up $0.7 million to $3.7 million for the quarter as a result of sales of higher margin sweeper units, higher volumes in the waterblaster segment, and reduced operating expenses.

CORPORATE & OTHER

First Quarter:

	•		In March 2010, the Company acquired all of the issued and outstanding common shares of both Sirit and VESystems. For the quarter ended March 31, 2010, net sales were $3.4 million. Total operating loss for the first quarter of 2010 was $1.2 million.

	•		Corporate expenses were up $2.2 million over the prior year primarily as a result of $2.6 million in costs related to the acquired businesses in the first quarter of 2010 and $0.7 million of increased post-retirement expense. Partially offsetting those increases was a decline in legal fees associated with the Company’s hearing loss litigation of $0.7 million as a result of timing of trials and $0.6 million associated with the costs for the 2009 proxy contest initiated by an activist shareholder.

	•		Interest expense decreased $0.4 million in the first quarter of 2010 compared to $3.3 million in the same quarter of last year due to lower interest rates and lower average borrowing levels in 2010.

CONFERENCE CALL

Federal Signal will host its first quarter conference call on Friday, April 30th, 2010 at 10:30 a.m. Eastern Time. The call will last approximately one hour. The call may be accessed over the internet through Federal Signal’s website at http://www.federalsignal.com. A replay will be available on Federal Signal’s website shortly after the call.

About Federal Signal

Federal Signal Corporation (NYSE: FSS) enhances the safety, security and well-being of communities and workplaces around the world. Founded in 1901, Federal Signal is a leading global designer and manufacturer of products and total solutions that serve municipal, governmental, industrial and institutional customers. Headquartered in Oak Brook, Ill., with manufacturing facilities worldwide, the Company operates three groups: Safety and Security Systems, Environmental Solutions and Fire Rescue. For more information on Federal Signal, visit: http:// www.federalsignal.com .

This release contains unaudited financial information and various forward-looking statements as of the date hereof and we undertake no obligation to update these forward-looking statements regardless of new developments or otherwise. Statements in this release that are not historical are forward-looking statements. Such statements are subject to various risks and uncertainties that could cause actual results to vary materially from those stated. Such risks and uncertainties include but are not limited to: economic conditions in various regions, product and price competition, supplier and raw material prices, foreign currency exchange rate changes, interest

rate changes, increased legal expenses and litigation results, legal and regulatory developments and other risks and uncertainties described in filings with the Securities and Exchange Commission.

INVESTOR CONTACT: William Barker, +1.630.954.2000, wbarker@federalsignal.com

# # # # #

CONSOLIDATED STATEMENTS OF OPERATIONS


	YTD			YTD
	March, 31			March, 31
	2010			2009
Quarter March 31:
($ in millions, except per share data)

Net Sales	$	166.6		$	184.7
Costs and expenses
Cost of sales		(124.9	)		(138.1	)
Selling, general and administrative		(39.6	)		(42.3	)
Acquisition related costs		(2.6	)		—
Restructuring charges		(0.3	)		—

Operating (loss) income		(0.8	)		4.3
Interest expense		(2.9	)		(3.3	)
Other expense, net		(0.9	)		(1.0	)

Loss before income taxes		(4.6	)		—
Income tax benefit		1.4			0.2

(Loss) income from continuing operations		(3.2	)		0.2
(Loss) gain from discontinued operations and disposal, net of income tax expense of $0.1, and $0.4, respectively		(0.4	)		0.8

Net (loss) income	$	(3.6	)	$	1.0


Gross margin		25.0	%		25.2	%
Operating margin		(0.5	%)		2.3	%
Effective tax rate		(30.4	%)	NM

Basic and diluted (loss) earnings per share:
Loss from continuing operations	$	(0.06	)	$	—
(Loss) gain from discontinued operations and disposal		(0.01	)		0.02

(Loss) earnings per share	$	(0.07	)	$	0.02


Average common shares outstanding		49.2			47.9


	YTD			YTD
	March, 31			March, 31
	2010			2009
Group results:
($ in millions)
Safety and Security Systems Group:
Orders	$	76.9		$	71.2
Net Sales		68.3			70.8
Operating Income		4.1			4.9
Operating Margin		6.0	%		6.9	%
Backlog	$	41.5		$	48.3

Fire Rescue Group:
Orders	$	31.7		$	20.8
Net Sales		24.8			32.5
Operating Income		0.8			2.4
Operating Margin		3.2	%		7.4	%
Backlog	$	72.2		$	128.4

Environmental Solutions Group:
Orders	$	87.7		$	67.4
Net Sales		70.1			81.4
Operating Income		3.7			3.0
Operating Margin		5.3	%		3.7	%
Backlog	$	81.4		$	84.7

Other:
Orders	$	2.2		$	—
Net Sales		3.4			—
Operating Loss		(1.2	)		—
Operating Margin		(35.3	%)		—
Backlog	$	27.6		$	—

Corporate operating expenses	$	(8.2	)	$	(6.0	)


Total Operating (Loss) Income	$	(0.8	)	$	4.3

FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


	March, 31			December 31
	2010			2009
($ in millions)
ASSETS

Current assets
Cash and cash equivalents	$	12.3		$	21.1
Accounts receivable, net of allowances for doubtful accounts of $2.3 million and $2.5 million, respectively		120.2			120.2
Inventories		115.8			112.1
Other current assets		27.1			26.0

Total current assets		275.4			279.4
Properties and equipment, net		65.8			65.5
Other assets

Goodwill		376.7			319.6

Intangible assets, net of accumulated amortization		102.2			52.7

Deferred tax assets		14.7			17.5
Deferred charges and other assets		3.4			1.7

Total assets of continuing operations		838.2			736.4

Assets of discontinued operations		8.3			8.5

Total assets	$	846.5		$	744.9


LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities
Short-term borrowings	$	7.9		$	—
Current portion of long-term borrowings and capital lease obligations		42.1			41.9

Accounts payable		48.8			45.2

Customer deposits		12.1			10.4
Accrued liabilities

Compensation and withholding taxes		17.7			20.8

Other		49.4			48.1


Total current liabilities		178.0			166.4
Long-term borrowings and capital lease obligations, less current portion		252.5			159.7

Long-term pension liabilities		39.3			39.6

Deferred gain		23.7			24.2

Other long-term liabilities		12.3			12.2


Total liabilities of continuing operations		505.8			402.1

Liabilities of discontinued operations		12.9			14.1


Total liabilities		518.7			416.2

Shareholders’ equity
Common stock, $1 par value per share, 90.0 million shares authorized, 50.8 million and 49.6 million shares issued, respectively		50.8			49.6

Capital in excess of par value		104.4			93.8

Retained earnings		233.8			240.4

Treasury stock, 0.9 and 0.8 million shares at cost, respectively		(15.8	)		(15.8	)

Accumulated other comprehensive loss		(45.4	)		(39.3	)


Total shareholders’ equity		327.8			328.7

Total liabilities and shareholders’ equity	$	846.5		$	744.9


Supplemental data:
Debt	$	302.5		$	201.6

Debt-to-capitalization ratio:		0.48			0.38

Net Debt/Cap Ratio		0.47			0.35

FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	For the Quarter Ended
	March 31,
	2010			2009
	($ in millions)
Operating activities:
Net (loss) income	$	(3.6	)	$	1.0
Adjustments to reconcile net (loss) income to net cash (used for) provided by operating activities:
Loss (gain) on discontinued operations and disposal		0.4			(0.8	)
Loss on joint venture		—			0.9
Depreciation and amortization		4.2			3.8
Stock based compensation expense		1.5			1.1
Pension contributions		—			(0.5	)
Changes in other assets and liabilities, exclusive of the effects of businesses acquired and disposed		(11.6	)		1.2

Net cash (used for) provided by continuing operating activities		(9.1	)		6.7
Net cash (used for) provided by discontinued operating activities		(0.5	)		1.1

Net cash (used for) provided by operating activities		(9.6	)		7.8

Investing activities:
Purchases of properties and equipment		(3.2	)		(3.9	)
Proceeds from sale of properties, plant and equipment		0.7			—
Payments for acquisitions, net of cash acquired		(97.3	)		—

Net cash used for continuing investing activities		(99.8	)		(3.9	)
Net cash provided by discontinued investing activities		—			3.0

Net cash used for investing activities		(99.8	)		(0.9	)

Financing activities:
Increase (decrease) in debt outstanding under revolving credit facilities		96.2			(6.4	)
Proceeds on short-term borrowings		7.5			—
Payments on short-term borrowings		—			(11.4	)
Proceeds on long-term borrowings		—			6.3
Payments on long-term borrowings		(2.6	)		—
Cash dividends paid to shareholders		(3.0	)		(2.9	)
Other, net		—			0.2

Net cash provided by (used for) continuing financing activities		98.1			(14.2	)
Net cash used for discontinued financing activities		(0.3	)		(6.4	)

Net cash provided by (used for) financing activities		97.8			(20.6	)

Effects of foreign exchange rate changes on cash		2.8			—


Decrease in cash and cash equivalents		(8.8	)		(13.7	)
Cash and cash equivalents at beginning of period		21.1			23.4

Cash and cash equivalents at end of period	$	12.3		$	9.7