Exhibit 10.1
FEDERAL SIGNAL CORPORATION
RELEASE AND SEVERANCE AGREEMENT
This Release and Severance Agreement (the “Agreement”) will confirm the
understanding of Federal Signal Corporation and William H. Osborne (“Employee”)
in connection with the termination of Employee’s employment with Federal Signal
Corporation (the “Company”) and his resignation from the Company’s and any of
its subsidiaries’ Boards of Directors. We have reached Agreement upon the
following arrangements.
The effective date of Employee’s resignation as President and Chief Executive
Officer of the Company and as a director of the Company’s and any of its
subsidiaries’ Boards of Directors, which resignations will be treated for all
purposes as a separation from service (as defined in Section 409A of the
Internal Revenue Code of 1986, as amended, and applicable regulations) with the
Company without cause, will be October 29, 2010 (the “Separation Date”). The
Company agrees to pay Employee the following severance benefits (“Severance
Benefits”) upon his resignation, which will be identical to those severance
benefits Employee would be entitled to receive if his separation from service
was deemed to be a termination of employment by the Company without “Cause”
pursuant to Employee’s Amended and Restated Employment Agreement, dated
December 31, 2008 (the “Restated Employment Agreement”):

  1)   the lump-sum cash payment on or before November 28, 2010 of any accrued
and unpaid salary owed to Employee plus any accrued and unpaid days off and
unreimbursed business expenses owed to Employee, less any applicable taxes
including federal, state and local employment withholding taxes that are payable
in connection with this amount.     2)   the cash payment in 12 consecutive
monthly installments of $110,500 on or prior to the tenth (10th) day of each
month beginning in the month of November 2010 and ending in the month of
October 2011, the aggregate of such monthly payments being an amount (i.e.,
$1,326,000) equal to the sum of (i) Employee’s current Base Salary ($663,000),
and (ii) Employee’s target annual bonus for 2010 ($663,000), less any applicable
taxes including federal, state and local employment withholding taxes that are
payable in connection with this amount.     3)   the lump-sum cash payment on or
before November 28, 2010 of $548,564.38, which is the amount equal to Employee’s
unpaid 2010 target short-term incentive plan bonus (i.e., $663,000) prorated by
dividing the number of days in 2010 that Employee was employed by the Company
(i.e., 302) by 365, less any applicable taxes including federal, state and local
employment withholding taxes that are payable in connection with this amount.

The Company will also continue Employee’s automobile allowance at the current
rate of $1,150 per month for 12 consecutive months beginning in the month of
November 2010 and ending in the month of October 2011. Such payments will be
made on or prior to the tenth (10th) day of each month.
In addition, the Company agrees to pay on Employee’s behalf up to $50,000 in
executive outplacement services to one or more firms chosen by Employee and
acceptable to the Company provided that such expenses are incurred no later than
December 31, 2011. Such expenses shall be reimbursed as soon as practical after
an expense report is completed and submitted to the Company for approval;
provided such expense report must be received by the Company no later than
December 31, 2012.

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The Company also agrees to continue any applicable medical, dental and
prescription drug insurance coverage that Employee, his spouse and other
dependents are enrolled on Employee’s Separation Date for 18 months following
the Separation Date at the same coverage levels and cost to Employee as were in
effect on Employee’s Separation Date pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended (COBRA) (the “COBRA Rate”). In order to
be eligible for this benefit, Employee must complete all necessary documentation
within the prescribed time period after the Separation Date. The Company will
reimburse Employee on a monthly basis in an amount equal to the difference
between the COBRA Rate and the premium rate for these benefits as is in effect
for Employee as of the Separation Date. Employee will receive notification from
and shall make monthly COBRA premium payments to Hewitt Associates “Your Benefit
Resource” in accordance with Hewitt’s applicable administrative procedures. If
Employee fails to make COBRA payments, Employee’s COBRA coverage will be
cancelled. Notwithstanding the foregoing, during the eighteen (18) months the
Company is obligated to continue the medical, dental and prescription drug
benefits under the terms of this Paragraph, such benefits shall be discontinued
immediately if any required premium is not paid in full on time, Employee
becomes covered under another group health plan, Employee becomes entitled to
Medicare benefits (under Part A, Part B, or both), or the Company ceases to
provide any group health plan for its employees. Continuation may also be
terminated if for any reason the plan providing such coverage would terminate
coverage of a participant or an eligible dependent.
Employee understands that as a condition of receiving these Severance Benefits
under this Agreement, Employee is required to sign the general waiver and
release in the form included in this Agreement no later than twenty one
(21) days after this Agreement is delivered to Employee. No Severance Benefits
will be paid to Employee until the release contained herein becomes irrevocable
in accordance with its terms. Employee further understands that any vacation pay
or other wages due to Employee (with appropriate employment taxes withheld) will
be paid regardless of whether Employee signs the general waiver and release
contained herein and the receipt of such vacation pay and wages is in no way
contingent upon the signing of this Agreement. Nothing herein shall change or
have an effect on any wages, pension, retirement or other employee benefits
Employee may be entitled to under any Company retirement or benefit programs.
Any monies owed the Company by Employee may be deducted from the monies and the
Severance Benefits in accordance with applicable law. The Severance Benefits
shall not be considered or counted as “compensation” for purposes of any of the
Company’s welfare or pension benefit plans which provide benefits based, in any
part, on compensation.
The Company makes this Agreement to avoid the cost of defending any possible
lawsuit. Employee acknowledges that by making this Agreement the Company does
not admit that it has done anything improper or wrong. Employee understands that
he has a period of twenty one (21) days to review and consider this Agreement
before signing it. He may use as much of this 21-day period as he wishes in
making his decision. Employee further acknowledges that he may revoke the signed
Agreement within seven (7) days after its signing. Any such revocation must be
in writing and received by Jennifer Sherman in the Legal Department at Federal
Signal Corporation in Oak Brook, Illinois within the seven (7) day period.
Payment of the Severance Benefits described above will only be paid after this
Agreement becomes binding, which takes place when the revocation period runs out
seven (7) days after the date of Employee’s signature.
Employee is strongly encouraged to consult with an attorney before signing this
Agreement, however, whether he does so or not is his decision. Employee
acknowledges that he has been advised that he should be represented by an
attorney throughout the negotiation of the terms of this Agreement.

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In addition, Employee and/or the Company agree to the following terms and
conditions:

  1.   General Release.

     (a) Employee, on behalf of himself and his heirs, executors,
administrators, attorneys and assigns, hereby waives, releases and forever
discharges the Company and its subsidiaries, divisions and affiliates, whether
direct or indirect, its and their joint ventures and joint venturers (including
its and their respective directors, officers, employees, shareholders, partners
and agents, past, present, and future), and each of its and their respective
successors and assigns (hereinafter collectively referred to as “Releasees”),
from any and all known or unknown actions, causes of action, claims or
liabilities of any kind which have been or could be asserted against the
Releasees arising out of or related to Employee’s employment with and/or
separation from employment with the Company and/or any of the other Releasees,
Employee’s resignation as a director from the Company’s or any of its
subsidiaries’ respective Boards of Directors, and/or any other occurrence up to
and including the date that Employee signs this Agreement, including but not
limited to:
1. claims, actions, causes of action or liabilities arising under Title VII of
the Civil Rights Act, as amended, the Civil Rights Act of 1871, the Civil Rights
Act of 1991, the Age Discrimination in Employment Act, as amended (“ADEA”), the
Employee Retirement Income Security Act, as amended, the Rehabilitation Act, as
amended, the Americans with Disabilities Act, the Family and Medical Leave Act
(to the extent permitted by law), the Vietnam Era Veterans Readjustment
Assistance Act, the Sarbanes-Oxley Act of 2002, and/or any other federal, state,
municipal, or local employment discrimination statutes (including, but not
limited to, claims based on age, sex, attainment of benefit plan rights, race,
religion, national origin, marital status, sexual orientation, ancestry,
harassment, parental status, handicap, disability, retaliation, and veteran
status); and/or
2. claims, actions, causes of action or liabilities arising under any other
federal, state, municipal, or local statute, law, ordinance or regulation;
and/or
3. any other claim whatsoever including, but not limited to, claims for
severance pay under any voluntary or involuntary severance/separation plan,
policy or program maintained by the Releasees, claims for attorney’s fees,
claims based upon breach of contract, wrongful termination, defamation,
intentional infliction of emotional distress, tort, personal injury, invasion of
privacy, violation of public policy, negligence and/or any other common law,
statutory or other claim whatsoever arising out of or relating to his employment
with and/or separation from employment with the Company and/or any of the other
Releasees.
Employee understands and agrees that he is releasing the Company from any and
all claims by which he is giving up the opportunity to recover any compensation,
damages, or any other form of relief in any proceeding brought by him or on his
behalf. Notwithstanding the foregoing, this Agreement is not intended to operate
as a waiver of any retirement or pension benefits that are vested, the
eligibility and entitlement to which shall be governed by the terms of the
applicable plan. Nor shall this Agreement operate to waive or bar any claim or
right which, by express or unequivocal terms of law, may not under any
circumstances be waived or barred. Moreover, this Agreement shall not operate to
waive rights, causes of action or claims under the ADEA if those rights, causes
of action or claims arise after the date Employee signs this Agreement. Nor
shall this Agreement preclude Employee from challenging the validity of the
Agreement under the ADEA.

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     (b) The Company hereby waives, releases and forever discharges any and all
known and unknown actions, causes of action, claims or liabilities of any kind
the Company may now or in the future have against Employee in any way arising
out of, based upon or relating to (i) Employee’s employment or directorships
with the Company or any of its subsidiaries, or the termination of or
resignation from such employment or directorships, (ii) any promise, policy,
agreement, action or conduct of Employee to date, or (iii) any fact occurring
prior to this date, except for rights, claims, causes of action and claims for
liability against Employee in any way based any fraud or willful misconduct by
Employee (“Retained Claims”). Notwithstanding anything contained herein to the
contrary, this release does not include (and the Company does not release) any
Retained Claims, any claim for breach of this Agreement or any confidentiality,
non-solicitation or non-competition agreement signed by Employee, or any claims
arising out of actions or omissions after the date of this Agreement.
     2. Covenant Not to Sue. Except for those claims, causes of action or rights
explicitly excluded from release in Paragraph 1 above, Employee agrees that he
will never file or accept anything of value from a lawsuit concerning any claim,
issue, or matter relating to or arising out of employment with the Company, the
cessation of employment or directorships, the compensation or benefits payable
in connection with employment or directorships or termination of employment or
directorships, or any other interaction with the Company prior to the parties’
execution of this Agreement. Should Employee violate any aspect of this
Paragraph, Employee agrees: (a) that the lawsuit is null and void, and must be
summarily withdrawn and/or dismissed; (b) to pay all costs, expenses, and
damages incurred by the Company in responding to or as a result of any lawsuit
brought by Employee that breaches this Agreement, including reasonable
attorneys’ fees; (c) to pay all costs and expenses incurred by the Company in
seeking enforcement of this Agreement, including reasonable attorneys’ fees; and
(d) to return the Severance Benefits paid pursuant to this Agreement, less $500,
within fourteen (14) days of written demand by the Company. In the event this
reimbursement provision is triggered, Employee agrees that the remaining
provisions of this Agreement shall remain in full force and effect.
     3. Further Release and Acknowledgment. To the extent permitted by law,
Employee further waives his right to any monetary recovery should any federal,
state, or local administrative agency pursue any claims on his behalf arising
out of or related to his employment or directorships with and/or separation from
employment or directorships with the Company and/or any of the other Releasees.
Employee also acknowledges that he has not suffered any on-the-job injury for
which he has not already filed a claim. Employee acknowledges and agrees that
the Company’s provision of the Severance Benefits to him and his signing of the
Agreement does not in any way indicate that Employee has any viable claims
against the Company or that the Company has or admits any liability to Employee
whatsoever.

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     4. No Reinstatement. To the extent permitted by law, Employee further
waives, releases, and discharges Releasees from any reinstatement rights which
he has or could have.
     5. Non-Disparagement, Confidentiality, Cooperation, Non-Competition and
Non-Solicitation. Employee will not make any legally impermissible statements or
representations that disparage, demean, or impugn the Company, including without
limitation any legally impermissible statements impugning the personal or
professional character of any current or former director, officer, employee or
consultant for the Company. The Company will not make any legally impermissible
statements or representations that disparage, demean, or impugn Employee,
including without limitation any legally impermissible statements impugning the
personal or professional character of Employee.
Employee agrees from and after the Separation Date to keep strictly confidential
the existence and terms of this Agreement, and further agrees that he will not
disclose them to any person or entity, other than to his immediate family, his
attorney, and his financial advisor, or except as may be required by law. In
addition, Employee will keep confidential any confidential and/or proprietary
information and trade secrets of or relating to the Company or any of its
subsidiaries and affiliates (and includes information the disclosure of which
might be injurious to those companies), including but not limited to
confidential information concerning personnel of the Company or any of its
subsidiaries or affiliates, confidential financial information, customer or
customer prospect information, confidential information concerning temporary
staffing candidates, employees and personnel, employee and customer lists and
data, methods and formulas for estimating costs and setting prices, research
results (such as marketing surveys or trials), confidential software,
enhancements and developments, cost data (such as billing, equipment and
programming), cost projection models, compensation information and models,
business or marketing plans or strategies, new products or marketing strategies,
deal or business terms, budgets, vendor names, programming operations,
information on proposed acquisitions or dispositions, actual performance
compared to budgeted performance, long-range plans, results of internal
analyses, computer programs and programming information, techniques and designs,
internal valuations of the Company’s assets and trade secrets.
Employee acknowledges that after his Separation Date, he shall not represent
himself to be an employee of the Company nor take any action which may bind the
Company with regard to any customer, supplier, vendor or any other party with
whom Employee has had contact while performing his duties as an employee or
consultant of the Company.
Employee further agrees that for a period of eighteen (18) months following
Employee’s Separation Date, Employee will not, without the prior written consent
of the Company, engage directly or indirectly (as an officer, employee, agent,
partner, director, consultant, independent contractor, or in any other capacity)
in any business or enterprise which is in competition with the Company or its
successors or assigns. A business or enterprise will be deemed to be in
competition with the Company if the business or enterprise or its subsidiaries
is engaged or provides services or products of a type which at Employee’s
Separation Date are marketed, sold or provided by the Company or any of its
subsidiaries or affiliates (including but not limited to any product or service
which the Company or any such other entity is developing) within any state
within the United States of America or any country where the Company or any such
subsidiary or affiliate then provides or markets (or at the Separation Date, has
taken substantial steps toward providing or marketing) any service or product..
This non-compete provision does not prevent Employee from making passive
investments, not to exceed 5%, in any enterprise where Employee’s services or
advice is not required or provided.

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For a period of eighteen (18) months following Employee’s Separation Date,
Employee further agrees that he will not, directly or indirectly, solicit the
employment of, recruit, employ, hire, cause to be employed or hired, entice away
or establish a business with any then-current officer, office manager, staffing
coordinator or other supervisory or non-managerial personnel who are employed in
a clerical or maintenance position or any such person who was employed by the
Company or its subsidiaries or affiliates within the twelve (12) months
immediately prior to Employee’s Separation Date and Employee will not suggest to
or discuss with any such employee the discontinuation of the employee’s status
or employment with the Company or its subsidiaries or affiliates or such
employee’s employment or participation in any activity in competition with the
Company or any of its subsidiaries or affiliates.
Employee further agrees from and after the Separation Date to make himself
available to the Company and its legal counsel to provide reasonable cooperation
and assistance to the Company with respect to areas and matters in which
Employee was involved during his employment with the Company, including any
threatened or actual investigation, regulatory matter and/or litigation
concerning the Company, and to provide to the Company, if requested, information
and counsel relating to ongoing matters of interest to the Company. To the
extent that the Company requests such cooperation and assistance of Employee,
the Company will compensate Employee at the rate of $250 per hour for the time
spent by Employee in rendering such cooperation and assistance. The Company will
take into consideration Employee’s personal and business commitments, will give
Employee as much advance notice as reasonably possible, and ask that Employee be
available at such time or times as are reasonably convenient to Employee and the
Company. The Company also agrees to reimburse Employee for the actual
out-of-pocket expenses Employee incurs as a result of his complying with this
provision, subject to Employee’s submission to the Company of documentation
substantiating such expenses as the Company may require and as is consistent
with the documentation necessary and required for reimbursement of business
expenses generally by the Company.
     6. Consequences of Breach or Threatened Breach of Non-Disparagement,
Confidentiality, Cooperation, Non-Competition and Non-Solicitation Provisions.
Employee acknowledges that the provisions of Paragraph 5 are reasonable and not
unduly restrictive of his rights as an individual and warrants that as of the
date Employee signs this Agreement, Employee has not breached any of the
provisions of Paragraph 5. Employee further acknowledges that in the event that
he breaches or threatens to breach any of the provisions of Paragraph 5, such
breach or threatened breach will result in immediate and irreparable harm to the
business and goodwill of the Company and that damages, if any, and remedies at
law for such breach or threatened breach would be inadequate. The Company shall
be entitled to apply without bond for an injunction to restrain such breach or
threatened breach and for such further relief as the courts may deem just and
proper. In addition, the Company shall have the right, with prior notice to
Employee, to advise any prospective or then-current employer of Employee of the
provisions of Section 5 of this Agreement without liability so long as the
communication is truthful, correct, reasonably necessary and in compliance with
the terms of this Agreement including the non-disparagement provisions. The
Company’s right to enforce the provisions of Section 5 shall not be affected by
the existence or non-existence of any other similar agreement for any other
employee of the Company or by the Company’s failure to exercise any of its
rights under this Agreement or any other similar agreement with any other
employee. To the extent that any of the provisions of Section 5 shall be
determined to be invalid or unenforceable in any respect or to any extent, the
provision shall not be void or rendered invalid in its entirety, but instead
shall be automatically amended for such lesser term, to such lesser extent, or
in such other lesser degree as will grant the Company the maximum protection and
restrictions on Employee’s activities as permitted by applicable law in such
circumstances.

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     7. Company Property/Expenses. Employee agrees to promptly return to the
Company as soon as practicable following the Separation Date all Company
property, including, but not limited to, Company car, information technology
equipment, including Employee’s lap top computer, mobile phone or personal
communication device, documents and records and other physical or personal
property of the Company in Employee’s possession or control, and agrees not to
keep, transfer or use copies or excerpts of the foregoing items. Employee agrees
that all business expenses for which he is entitled to reimbursement will be
documented and submitted for approval on a timely basis and any final expenses
will be submitted within ten (10) days after the Separation Date.
     8. Reservation of Rights to Indemnification and Director and Officer
Liability Insurance for Actions Taken or Omitted while Employee was a Director
or Executive Officer. Employee’s right to indemnification to the fullest extent
permitted by Delaware General Corporation Law and the Company’s Certificate of
Incorporation and By-Laws for expenses (including attorney’s fees and
disbursements), judgments, fines and amounts paid in settlement actually and
reasonably incurred by Employee in connection with any proceeding arising by
reason of acts taken or omissions to act occurring while Employee was an
executive officer and/or director of the Company or an executive officer or
director of any of the Company’s subsidiaries, shall continue unabridged after
the Separation Date. In addition, Employee shall be entitled to make claim under
any director and officer liability insurance coverage that the Company may have
available from time to time for actions or omissions to act by Employee while
Employee was an executive officer or director of the Company or an executive
officer or director of any of the Company’s subsidiaries.
     9. Time to Consider Agreement. Employee acknowledges that he has been given
at least twenty-one (21) days to consider this Agreement thoroughly and he was
encouraged to consult with his personal attorney at his own expense, if desired,
before signing this Agreement. Employee further agrees that any changes made to
this Agreement will not restart the running of the 21-day period referenced
herein.
     10. Time to Revoke Agreement. Employee understands that he may revoke this
Agreement within seven (7) days after its signing and that any revocation must
be made in writing and submitted within such seven-day period to Jennifer
Sherman, General Counsel, Federal Signal Corporation, 1415 West 22nd Avenue,
Suite 1100, Oak Brook, IL 60523. Employee further understands that if he revokes
this Agreement, he shall not receive the Severance Benefits, except for the
payment of accrued and unpaid salary, accrued and unpaid days off and
unreimbursed business expenses owed to him.
     11. Consideration. Employee also understands that the Severance Benefits
(except for the accrued and unpaid salary, the accrued and unpaid days off and
the unreimbursed business expenses owed) which he will receive in exchange for
signing and not later revoking this Agreement are in addition to anything of
value to which he is already entitled.
     12. RELEASE INCLUDES UNKNOWN CLAIMS. EMPLOYEE FURTHER UNDERSTANDS THAT THIS
AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, EXCEPT FOR CLAIMS
FOR INDEMNIFICATION UNDER PARAGRAPH 8 OF THIS AGREEMENT.

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     13. Severability. Employee acknowledges and agrees that if any provision of
this Agreement is found, held or deemed by a court of competent jurisdiction to
be void, unlawful or unenforceable under any applicable statute or controlling
law, the remainder of this Agreement shall continue in full force and effect.
     14. Governing Law; Arbitration. This Agreement is deemed made and entered
into in the State of Illinois, and in all respects shall be interpreted,
enforced and governed under applicable federal law and in the event reference
shall be made to State law, the internal laws of the State of Illinois shall
apply without reference to its conflict of law provisions. Any dispute under
this Agreement shall be adjudicated by a court of competent jurisdiction in the
State of Illinois. Notwithstanding the foregoing, the parties shall have the
right and option (in lieu of litigation) to have any dispute or controversy
arising under or in connection with this Agreement settled by arbitration,
subject to the conditions and limitations set forth in Section 5.5 of Employee’s
Restated Employment Agreement, the terms of which section are incorporated by
reference into this Agreement .
     15. Knowing and Voluntary Waiver and Release. Employee further acknowledges
and agrees that he has carefully read and fully understands all of the
provisions of this Agreement and that he voluntarily enters into this Agreement
by signing this Agreement. Employee is encouraged to consult with an attorney of
his choice at his own expense prior to signing this Agreement.
     16. General Matters. Employee acknowledges and agrees that in signing this
Agreement he does not rely and has not relied on any representation or statement
by the Company or by its employees, agents, representatives, or attorneys with
regard to the subject matter, basis or effect of this Agreement.
     The language of all parts of this Agreement shall be construed according to
its fair meaning, and not strictly for or against either party. The provisions
of this Agreement shall survive any termination of this Agreement when necessary
to effect the intent and terms of this Agreement expressed herein.
     No modification of any provision of this Agreement shall be effective
unless made in writing and signed by Employee and a duly authorized member of
the Board of Directors of the Company. This Agreement shall not be assignable by
Employee.
FEDERAL SIGNAL CORPORATION

                By   /s/ James E. Goodwin    October 30, 2010    James E.
Goodwin        Chairman of the Board              /s/ William H. Osborne   
October 29, 2010  William H. Osborne             

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