Exhibit 10(aa)
RELEASE AND SEVERANCE AGREEMENT
This Release and Severance Agreement (the “Agreement”) will confirm the
understanding of Federal Signal Corporation and Fred H. Lietz (“Employee”) in
connection with the termination of Employee’s employment with Federal Signal
Corporation (the “Company”). We have reached Agreement upon the following
arrangements.
The effective date of Employee’s separation from employment with the Company
will be January 7, 2011 (the “Separation Date”). The Company agrees to pay
Employee the following severance benefits (“Severance Benefits”) pursuant to the
Company’s Executive General Severance Plan: (1) the sum of $355,460.00 which is
an amount equal to the sum of (i) the Employee’s Base Salary, and (ii) the
Employee’s target annual bonus; and (2) the sum of $1,948.00 which is an amount
equal to the Employee’s unpaid prorated target annual bonus for the plan year in
which the Separation Date occurs; in each case, less any applicable taxes
including federal employment withholding taxes that are payable in connection
with this amount. In accordance with IRS Code provision 409A final regulations,
this amount will be paid to Employee in a lump sum when this Agreement becomes
binding upon the expiration of the revocation period referenced below. Employee
understands that as a condition of receiving these Severance Benefits under the
Company’s Executive General Severance Plan, the Employee is required to sign the
general waiver and release in the form included in this Agreement. No Severance
Benefits will be paid to the 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 will be paid separately with
appropriate employment taxes withheld and the receipt of such 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,
including the Short Term Incentive Bonus Plan, pursuant to which payment for
2010 will be made to Employee at the same time as payments are made to active
employees. 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.
As further Severance Benefits, the Company also agrees to continue any
applicable welfare benefits of medical insurance, dental insurance and group
term life insurance (life insurance continues for Employee only) that Employee
receives for 18 months following the Separation Date at the same premium cost,
and at the same coverage level, as were in effect as of the Employee’s
Separation Date, pursuant to the terms of the Company’s Executive General
Severance Plan and COBRA, and subject to inclusion in Employee’s gross income to
the extent deemed necessary by Company to comply with the requirements of
Sections 105(h) and 409A of the Internal Revenue Code. Employee will receive
notification from and shall make monthly COBRA payments to Hewitt Associates
“Your Benefits Resource” in accordance with Hewitt’s administrative procedures,
or any successor thereto. If Employee fails to make COBRA payments, Employee’s
COBRA coverage will be cancelled. Employee must complete all necessary paperwork
within the prescribed time period in order to receive this benefit.
Notwithstanding the foregoing, during the eighteen (18) months the Company
continues the welfare benefits at the active employee rate in the event the
premium cost and/or level of

 

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coverage shall change for all employees of the Company, the cost and or coverage
level, likewise, shall change in a corresponding manner for Employee. In
addition, the continuation of these welfare benefits shall be discontinued prior
to the end of the period described above if any required premium is not paid in
full on time, the employee becomes covered under another group health plan, the
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 for any reason the plan providing such
coverage would terminate coverage of a participant or an eligible dependent.
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 wrong. Employee understands that he/she has
a period of forty-five (45) days to review and consider this Agreement before
signing it. He/She may use as much of this 45-day period as he/she wishes in
making his/her decision. Employee further acknowledges that he/she 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
begin after this Agreement becomes binding which takes place when the revocation
period runs out seven days after the date of Employee’s signature.
Employee is strongly encouraged to consult with an attorney before signing this
Agreement, however, whether he/she does so or not is his/her decision. Employee
acknowledges that he/she has been advised that he/she should be represented by
an attorney throughout the negotiation of the terms of this Agreement.
As further consideration of the Severance Benefits described above, Employee
agrees to the following terms and conditions:
     1. General Release. Employee, on behalf of himself/herself and his/her
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
and/or any other occurrence up to and including the date that Employee signs
this Agreement, including but not limited to:

  (a)   claims, actions, causes of action or liabilities arising under Title VII
of the Civil Rights Act, as amended, 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), 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,

 

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      religion, national origin, marital status, sexual orientation, ancestry,
harassment, parental status, handicap, disability, retaliation, and veteran
status); and/or     (b)   claims, actions, causes of action or liabilities
arising under any other federal, state, municipal, or local statute, law,
ordinance or regulation; and/or     (c)   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/her employment with and/or separation from employment with the Company
and/or any of the other Releasees.

Employee understands and agrees that he/she is releasing the Company from any
and all claims by which he/she is giving up the opportunity to recover any
compensation, damages, or any other form of relief in any proceeding brought by
him/her or on his/her 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.
     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/she 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, the compensation or benefits payable in
connection with employment or termination of employment, 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 Pay
pursuant to this Agreement — save $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/her right to any monetary recovery should any
federal, state, or local administrative agency pursue any claims on his/her
behalf arising out of or related to his/her employment with and/or separation
from employment with the Company and/or any of the other

 

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Releasees. Employee also acknowledges that he/she has not suffered any
on-the-job injury for which he/she has not already filed a claim. Employee
acknowledges and agrees that the Company’s provision of the severance benefits
to him/her and his/her 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.
     4. No Reinstatement. To the extent permitted by law, Employee further
waives, releases, and discharges Releasees from any reinstatement rights which
he/she has or could have.
     5. Non-Disparagement, Confidentiality, Cooperation, Non-Competition,
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.
Employee agrees from and after today to keep strictly confidential the existence
and terms of this Agreement, and further agrees that he/she will not disclose
them to any person or entity, other than to his/her immediate family, his/her
attorney, and his/her financial advisor, or except as may be required by law.
Employee acknowledges that after his/her Separation Date, he/she shall not
represent himself/herself 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/her duties
as an employee or consultant of the Company.
Employee further agrees that for a period of one (1) year following Employee’s
Separation Date, Employee will not, without the prior written consent of the
Company, engage directly or indirectly (as an employee, consultant, independent
contractor, officer, 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 if it is engaged in
any significant business activity of the Company or its subsidiaries within the
United States of America.
For a one (1) year period following Employee’s Separation Date, he/she further
agrees that he/she will not, directly or indirectly, hire away or participate or
assist in the hiring away of any person employed by the Company or its
affiliates on Employee’s Separation Date and he/she will not solicit nor
encourage any person employed by the Company or its affiliates on or after
his/her Separation Date to leave the employ of the Company or its affiliates.
Employee further agrees from and after today to make himself/herself 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/her employment, 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. The Company will, of course, 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

 

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as are reasonably convenient to Employee and the Company. The Company agrees to
reimburse Employee for the actual out-of-pocket expenses Employee incurs as a
result of his/her complying with this provision, subject to Employee’s
submission to the Company of documentation substantiating such expenses as the
Company may require.
Proprietary information, confidential business information and trade secrets
(hereinafter collectively “Confidential Information”) which became known to
Employee as an employee of the Company remains the property of the Company. Such
Confidential Information includes, but is not limited to, materials, records,
books, products, business plans, business proposals, software, personnel
information and data of the Company and its affiliates and its customers, but
excludes information which is generally known to the public or becomes known
except through Employee’s actions. Employee agrees from and after today that
he/she will not at any time, directly or indirectly, disclose Confidential
Information to any third party or otherwise use such Confidential Information
for Employee’s own benefit or the benefit of others. Also, Employee acknowledges
that he/she remains bound by the terms and conditions of the applicable
provisions of the Company’s Code of Business Conduct.
Employee acknowledges that the provisions of this Paragraph 5 are reasonable and
not unduly restrictive of his/her rights as an individual and warrants that as
of the date Employee signs this Agreement, Employee has not breached any of the
provisions of this Paragraph 5. Employee further acknowledges that in the event
that he/she breaches any of the provisions of this Paragraph 5, such 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 would be
inadequate.
     6. Consequences of Breach of Non-Disparagement, Confidentiality,
Cooperation, Non-Competition and Non-Solicitation Provisions. Employee further
acknowledges and agrees in the event that he/she breaches the provisions of
Paragraph 5 above, (a) the Company will be subject to irreparable injury and
shall be entitled to apply without bond for an injunction to restrain such
breach and for such further relief as the courts may deem just and proper,
(b) the Company shall not be obligated to continue the availability or payment
of Severance Benefits to Employee, and (c) Employee shall be obligated to pay to
the Company its costs and expenses in enforcing the Company’s non-disparagement,
confidentiality, cooperation, non-competition, non-solicitation provisions of
this Agreement and the provisions of Paragraph 5 above (including court costs,
expenses and reasonable legal fees).
     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, cell phone, information
technology equipment, 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/she is entitled to reimbursement are
documented and submitted for approval on a timely basis and any final expenses
are submitted within ten (10) days after the Separation Date.

 

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     8. Additional Information. Attached as Exhibit A to this Agreement is
information to which Employee is entitled under the ADEA.
     9. Time to Consider Agreement. Employee acknowledges that he/she has been
given at least forty-five (45) days to consider this Agreement thoroughly and
he/she was encouraged to consult with his/her personal attorney at his/her own
expense, if desired, before signing below. He/She further agrees that any
changes made to this Agreement will not restart the running of the 45-day period
referenced herein.
     10. Time to Revoke Agreement. Employee understands that he/she 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/she
revokes this Agreement, he/she shall not receive the Severance Benefits.
     11. Consideration. Employee also understands that the Severance Benefits
which he/she will receive in exchange for signing and not later revoking this
Agreement are in addition to anything of value to which he/she is already
entitled.
     12. RELEASE INCLUDES UNKNOWN CLAIMS. EMPLOYEE FURTHER UNDERSTANDS THAT THIS
AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
     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. 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, in accordance with Article 6.2 of the
Executive General Severance Plan to have any dispute or controversy arising
under or in connection with the Plan settled by arbitration, subject to the
limitations set forth in Article 6.2.
     15. Knowing And Voluntary Waiver and Release. Employee further acknowledges
and agrees that he/she has carefully read and fully understands all of the
provisions of this Agreement and that he/she voluntarily enters into this
Agreement by signing below. Employee is encouraged to consult with an attorney
of his/her choice at his/her own expense prior to signing this Agreement.
     16. General Matters. Employee acknowledges and agrees that in signing this
Agreement he/she does not rely and has not relied on any representation or
statement by the

 

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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 senior
executive of the Company. This Agreement shall not be assignable by Employee.

                             (Signature)                          (Date)       
                 (Witness)                         (Company Representative)     
     

 

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STATE OF                          )
                                             ) SS:
COUNTY OF                      )
     The undersigned, notary public in and for the above county and state,
certifies that                                         , known to me to be the
same person whose name is subscribed to the foregoing Agreement, appeared before
me in person and acknowledged signing and delivering the instrument as his/her
free and voluntary act, for the uses and purposes therein set forth.
     Dated:                     , 20     

                                          

Date Commission Expires: