Exhibit 10-H
Executive General Severance Plan
Federal Signal Corporation
November 2006

 

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Contents

         
Article 1. Establishment, Term, and Purpose
    1  
 
       
Article 2. Definitions
    1  
 
       
Article 3. Participation
    4  
 
       
Article 4. Severance Benefits
    4  
 
       
Article 5. The Company’s Payment Obligation
    6  
 
       
Article 6. Legal Remedies
    7  
 
       
Article 7. Withholding
    7  
 
       
Article 8. Noncompetition
    8  
 
       
Article 9. Successors and Assignment
    8  
 
       
Article 10. Miscellaneous
    9  

 

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Federal Signal Corporation
Executive General Severance Plan
Article 1. Establishment, Term, and Purpose
     1.1 Establishment of the Plan. Federal Signal Corporation (hereinafter
referred to as the “Company”) hereby establishes a severance plan to be known as
the “Federal Signal Corporation Executive General Severance Plan” (the “Plan”).
The Plan provides severance benefits to certain employees of the Company upon a
termination of employment from the Company, not including a termination of
employment as a result of a Change in Control of the Company. Except for the
Change-in-Control Severance Agreements entered into with certain executives, the
Plan is intended to supersede any and all plans, programs, or agreements
providing for severance-related payments.
     1.2 Term of the Plan. This Plan will commence on January 1, 2005 (the
“Effective Date”) and shall continue in effect for three (3) full calendar
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 Plan shall be
extended automatically for one (1) additional year, unless the Compensation
Committee delivers written notice six (6) months prior to the end of such term,
or extended term, to each Participant that the Plan will not be extended.
     In the event the term of the Plan is not extended for any reason, the Plan
will terminate at the end of the term, or extended term, then in progress, and
the Participant will be deemed terminated by the Company without Cause on such
date.
     1.3 Purpose of the Plan. The purpose of the Plan is to provide certain key
employees of the Company financial security in the event of a termination of
employment from the Company.
Article 2. Definitions
     Whenever used in this Plan, 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)   “Base Salary” means, at any time, the then regular annual rate of pay
which the Participant 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.     (b)   “Beneficiary”
means the persons or entities designated or deemed designated by a Participant
pursuant to Section 10.2 herein.     (c)   “Benefits Committee” means the
Benefits Planning Committee of the Company which was appointed by the
Compensation and Benefits Committee of the Company’s Board of Directors, and is
composed of certain officers or other employees of the Company.

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  (d)   “Board” means the Board of Directors of the Company.     (e)   “Cause”
shall be determined solely by the Benefits Committee except as expressly set
forth to the contrary hereinbelow), which shall have the authority to interpret
the Plan and to determine the meaning of any ambiguous Plan provisions in its
sole and absolute discretion, and shall mean the occurrence of any one or more
of the following:

  (i)   The Participant’s failure to substantially perform his duties with the
Company (other than any such failure resulting from the Participant’s
Disability), after written notice of such failure and a reasonable opportunity
to cure following written notice; or     (ii)   The Participant’s conviction of
a felony; or     (iii)   The Participant’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 Participant’s part shall be deemed
“willful” unless done, or omitted to be done, by the Participant not in good
faith and without reasonable belief that the action or omission was in the best
interests of the Company.     (iv)   The Participant’s material breach of
Company policies, including but not limited to the Company’s policy for business
conduct.

Notwithstanding anything to the contrary stated herein, in the case of the
determination of Cause involving a Participant who is a member of the Company’s
“Executive Committee” as such term is defined in the Company’s then most recent
annual report, the Benefits Committee shall assign and cede all of its
discretion and authority in the determination of Cause to the Compensation
Committee.

  (f)   “Code” means the Internal Revenue Code of 1986, as amended.     (g)  
“Compensation Committee” means the Compensation and Benefits 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.     (h)   “Company”
means Federal Signal Corporation, a Delaware corporation (including any and all
subsidiaries), or any successor thereto as provided in Article 9 herein.     (i)
  “Disability” or “Disabled” shall have the meaning ascribed to such term in the
Participant’s governing long-term disability plan, or if no such plan exists, at
the discretion of the Benefits Committee.     (j)   “Effective Date” means the
date this Plan is approved by the Board, or such other date as the Board shall
designate in its resolution approving this Plan, and as specified in the opening
sentence of this Plan.

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  (k)   “Effective Date of Termination” means the date on which a termination
occurs which triggers the payment of Severance Benefits hereunder.     (l)  
“Good Reason” means, without the Participant’s express written consent, the
occurrence of any one (1) or more of the following:

  (i)   The assignment of the Participant to duties materially inconsistent with
the Participant’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 Participant’s authorities, duties, or responsibilities from those in effect
as of the Effective Date, other than an insubstantial and inadvertent act that
is remedied by the Company promptly after receipt of notice thereof given by the
Participant;     (ii)   The Company’s requiring the Participant to be based at a
location in excess of fifty (50) miles from the location of the Participant’s
principal job location or office as of the Effective Date; except for required
travel on the Company’s business to an extent substantially consistent with the
Participant’s then present business travel obligations;     (iii)   A reduction
by the Company of the Participant’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 Participant
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 Participant’s participation therein on substantially the
same basis, both in terms of the amount of benefits provided and the level of
the Participant’s participation relative to other participants, as of the
Effective Date;     (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 Plan, 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 ten (10) business days of receipt of written
notice of such breach delivered by the Participant to the Company.

Unless the Participant becomes Disabled, the Participant’s right to terminate
employment for Good Reason shall not be affected by the Participant’s incapacity
due to physical or mental illness. The Participant’s continued employment shall
not constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason herein.

  (m)   “Notice of Termination” shall mean a written notice which shall indicate
the specific termination provision in this Plan relied upon, and shall set forth
in reasonable detail the

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      facts and circumstances claimed to provide a basis for termination of the
Participant’s employment under the provision so indicated.

  (n)   “Participant” means an executive of the Company who is named by the
Compensation Committee as a Participant in the Plan, as set forth in Article 2
herein.     (o)   “Plan” has the meaning ascribed to such term in Section 1.1
hereof.     (p)   “Severance Benefits” means the payment of severance
compensation as provided in Article 4 herein.

Article 3. Participation
     3.1 Eligible Employees. Individuals eligible to participate in the Plan
shall include all key employees of the Company, as determined by the
Compensation Committee in its sole discretion.
     3.2 Participation. Subject to the terms of the Plan, the Compensation
Committee may, from time to time, select from all eligible employees those who
shall participate in the Plan. From those selected to participate in the Plan,
the Benefits Committee shall assign each Participant to a category as follows:
Tier I Executives, Tier II Executives, or Tier III Executives.
Article 4. Severance Benefits
     4.1 Right to Severance Benefits. Subject to the provisions herein, each
Participant shall be entitled to receive from the Company Severance Benefits as
described in Section 4.2 herein, if, during the term of the Plan, the
Participant’s employment with the Company shall be terminated by the Company
without Cause, or voluntarily by the Participant for Good Reason.
     A Participant shall not be entitled to receive Severance Benefits under
Section 4.2 hereof if he or she is terminated for Cause, or if his or her
employment with the Company ends due to death, Disability, Retirement, or due to
a voluntary termination of employment by the Participant without Good Reason.
     4.2 Description of Severance Benefits. In the event that a Participant
becomes entitled to receive Severance Benefits, as provided in Section 4.1
herein, the Participant shall receive the following Severance Benefits:

  (a)   Tier I Executives: One (1.0) times the sum of: (i) the Participant’s
Base Salary; and (ii) the Participant’s target annual bonus established for the
bonus plan year in which the Participant’s Effective Date of Termination occurs.

Tier II Executives: Three-quarters (0.75) times the sum of: (i) the
Participant’s Base Salary; and (ii) the Participant’s target annual bonus
established for the bonus plan year in which the Participant’s Effective Date of
Termination occurs.
Tier III Executives: One-half (0.5) times the sum of: (i) the Participant’s Base
Salary; and (ii) the Participant’s target annual bonus established for the bonus
plan year in which the Participant’s Effective Date of Termination occurs.

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  (b)   An amount equal to the Participant’s unpaid targeted annual bonus,
established for the plan year in which the Participant’s Effective Date of
Termination occurs, multiplied by a fraction, the numerator of which is the
number of days the Participant was employed by the Company in the then existing
fiscal year through the Effective Date of Termination, and the denominator of
which is three hundred sixty-five (365).     (c)   A continuation of the welfare
benefits of medical insurance, dental insurance, and group term life insurance
for eighteen (18) months following the Effective Date of Termination. These
benefits shall be provided to Participants at the same premium cost, and at the
same coverage level, as in effect as of the Participant’s Effective Date of
Termination.

However, in the event the premium cost and/or level of coverage shall change for
all employees of the Company, the cost and/or coverage level, likewise, shall
change for each Participant in a corresponding manner.
The continuation of these welfare benefits shall be discontinued prior to the
end of the eighteen (18) month period in the event the Participant has available
substantially similar benefits from a subsequent employer, as determined by the
Benefits Committee.

  (d)   The treatment of accrued vacation days earned prior to the Effective
Date of Termination, but not taken by the Participant, shall be subject to the
treatment provided under the Company’s vacation policy.     (e)   All
outstanding long-term incentive awards shall be subject to the treatment
provided under the applicable long-term incentive plan of the Company.

     4.3 Termination Due to Disability. If a Participant’s employment is
terminated due to Disability during the term of this Plan, the Participant shall
receive his or her Base Salary and accrued vacation through the Effective Date
of Termination. All other benefits provided to the Participant shall be
determined in accordance with the Company’s disability, retirement, insurance,
and other applicable plans and programs then in effect.
     4.4 Termination Due to Death. If a Participant’s employment is terminated
by reason of death, the Participant, or where applicable, the Participant’s
Beneficiaries, shall receive the Participant’s Base Salary and accrued vacation
through the Effective Date of Termination. All other benefits provided to the
Participant or the Participant’s Beneficiaries shall be determined in accordance
with the Company’s retirement, survivor’s benefits, insurance, and other
applicable programs of the Company then in effect.

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     4.5 Termination for Cause or by a Participant Other Than for Good Reason.
If a Participant’s employment is terminated either: (a) by the Company for
Cause; or (b) by the Participant other than for Good Reason, the Company shall
pay the Participant his or her unpaid Base Salary and accrued vacation through
the Effective Date of Termination, at the rate then in effect, plus all other
amounts to which the Participant 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 Participant under this Plan.
     4.6 Notice of Termination. Any termination by the Company for Cause or by a
Participant for Good Reason shall be communicated by Notice of Termination at
least sixty (60) days prior to the date on which such termination shall be
effective.
     4.7 Form and Timing of Severance Benefits. The Severance Benefits set forth
in this Article 4 shall be made as a continuation of pay (over the applicable
severance period) through the normal payroll procedures of the Company. If, as
of the Effective Date of Termination, the Participant is a “key employee” as
that term is used in Code Section 409A (and the regulations promulgated
thereunder) then, the Severance Benefits, to the extent they are considered
deferred compensation under Section 409A or the regulations thereunder, shall
begin six (6) months following the Effective Date of Termination. Any Severance
Benefits accrued during the first six (6) months following a Participant’s
Effective Date of Termination shall be paid in a lump sum following such six
(6) month period. Any remaining Severance Benefits shall then be paid through
the normal payroll procedures of the Company.
     4.8 No Duplication of Severance. If a Participant is a party to a
change-in-control agreement with the Company, the Participant shall not be
entitled to receive a Severance Benefit under this Plan if he or she is entitled
to receive a severance benefit under the change-in-control agreement.
     4.9 Release. As a condition of receiving Severance Benefits under the Plan,
the Participant is required to sign a general release in a form acceptable to
the Benefits Committee. No Severance Benefits will be paid to a Participant
until the applicable release becomes irrevocable in accordance with its terms.
Article 5. The Company’s Payment Obligation
     5.1 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 Participants 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
Participants or from whomsoever may be entitled thereto, for any reasons
whatsoever.

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     Participants shall not be obligated to seek other employment in mitigation
of the amounts payable or arrangements made under any provision of this Plan,
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 Plan, except to the extent provided in Section
4.2(c) herein.
     5.2 Contractual Rights to Benefits. This Plan establishes and vests in each
Participant a contractual right to the benefits to which he or she 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.
Article 6. Legal Remedies
     6.1 Payment of Legal Fees. To the extent permitted by law, the Company
shall pay all legal fees, costs of litigation, prejudgment interest, and other
expenses incurred in good faith by the Participant as a result of the Company’s
refusal to provide the Severance Benefits to which the Participant becomes
entitled under this Plan, or as a result of the Company’s contesting the
validity, enforceability, or interpretation of this Plan, or as a result of any
conflict between the parties pertaining to this Plan; provided, however, that
the Company shall be reimbursed by the Participant for all such fees and
expenses in the event the Participant fails to prevail with respect to any one
material issue of dispute in connection with such legal action.
     6.2 Arbitration. Subject to the following sentences, Participants shall
have the right and option to elect (in lieu of litigation) to have any dispute
or controversy arising under or in connection with this Plan settled by
arbitration, conducted before a panel of three (3) arbitrators sitting in a
location selected by the Participant within fifty (50) miles from the location
of his job with the Company, in accordance with the rules of the American
Arbitration Association then in effect. The Participant shall not have the right
to elect to have any dispute which arises under Article 8 of this Plan settled
by arbitration, but rather, the Company or the Participant shall have the right
to institute judicial proceedings in any court of competent jurisdiction with
respect to such dispute or claim. If judicial proceedings are instituted, the
parties agree that such proceedings shall not be stayed or delayed pending the
outcome of any arbitration proceeding hereunder.
     Except as provided above for claims or disputes under Article 8, judgment
may be entered on the award of the arbitrator in any court having proper
jurisdiction. All expenses of such arbitration, including the fees and expenses
of the counsel for the Participant, shall be borne by the Company; provided,
however, that the Company shall be reimbursed by the Participant for all such
fees and expenses in the event the Participant fails to prevail with respect to
any one material issue of dispute in connection with such legal action.
Article 7. Withholding
     The Company shall be entitled to withhold from any amounts payable under
this Plan all taxes as legally shall be required (including, without limitation,
any United States federal taxes, and any other state, city, or local taxes).

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Article 8. Noncompetition
     8.1 Prohibition on Competition. Without the prior written consent of the
Company, during the term of this Plan, and for a period of one (1) year
following the payment of Severance Benefits under this Plan, Participants shall
not, as an employee or an officer, engage directly or indirectly in any business
or enterprise which is “in competition” with the Company or its successors or
assigns. For purposes of this Plan, a business or enterprise will be deemed to
be “in competition” if it is engaged in any significant business activity of the
Company or its subsidiaries within the United States of America.
     However Participants shall be allowed to purchase and hold for investment
less than two percent (2%) of the shares of any corporation whose shares are
regularly traded on a national securities exchange or in the over-the-counter
market.
     8.2 Disclosure of Information. Participants recognize that they have access
to and knowledge of certain confidential and proprietary information of the
Company which is essential to the performance of their duties as employees of
the Company. Participants will not, during or after the term of their employment
by the Company, in whole or in part, disclose such information to any person,
firm, corporation, association, or other entity for any reason or purpose
whatsoever, nor shall he or she make use of any such information for their own
purposes.
     8.3 Covenants Regarding Other Employees. During the term of this Plan, and
for a period of one (1) year following the payment of Severance Benefits under
this Plan, each Participant agrees not to attempt to induce any employee of the
Company to terminate his or her employment with the Company, accept employment
with any competitor of the Company, or to interfere in a similar manner with the
business of the Company.
Article 9. Successors and Assignment
     9.1 Successors to the Company. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
of all or substantially all of the business and/or assets of the Company or of
any division or subsidiary thereof to expressly assume and agree to perform the
Company’s obligations under this Plan in the same manner and to the same extent
that the Company would be required to perform them if no such succession had
taken place. Failure of the Company to obtain such assumption and agreement
prior to the effective date of any such succession shall be a breach of this
Plan and shall entitle Participants to compensation from the Company in the same
amount and on the same terms as they would be entitled to hereunder if they had
terminated their employment with the Company voluntarily for Good Reason. Except
for the purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Effective Date of Termination.

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     9.2 Assignment by the Participant. This Plan shall inure to the benefit of
and be enforceable by each Participant’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees. If a Participant dies while any amount would still be payable to him
or her hereunder had he or she continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Plan, to the Participant’s Beneficiary. If the Participant has not named a
Beneficiary, then such amounts shall be paid to the Participant’s devisee,
legatee, or other designee, or if there is no such designee, to the
Participant’s estate.
Article 10. Miscellaneous
     10.1 Employment Status. Except as may be provided under any other agreement
between a Participant and the Company, the employment of the Participant by the
Company is “at will” and may be terminated by either the Participant or the
Company at any time, subject to applicable law.
     10.2 Beneficiaries. Each Participant may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Participant under this Plan. Such designation must be in
the form of a signed writing acceptable to the Benefits Committee. Participants
may make or change such designations at any time.
     10.3 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the feminine
shall include the masculine, the plural shall include the singular, and the
singular shall include the plural.
     10.4 Severability. In the event any provision of this Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included. Further, the captions
of this Plan are not part of the provisions hereof and shall have no force and
effect.
     10.5 Modification. The Compensation Committee shall have unilateral
authority to approve any amendment or modification to the Plan, in its sole and
absolute discretion.
     10.6 Applicable Law. To the extent not preempted by the laws of the United
States, the laws of the state of Delaware shall be the controlling law in all
matters relating to this Plan.

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