exv10w3






Exhibit 10.3




Federal Signal Corporation

2005 Executive Incentive Compensation Plan (2010 Restatement)

Nonqualified Stock Option Award Agreement




     You have been selected to be a Participant in the Federal Signal Corporation 2005
Executive Incentive Compensation Plan (2010 Restatement) (the “Plan”), as specified below:



	 	 	 	 	 

	 

	 	Participant:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date of Grant:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date of Expiration:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Number of Option Shares:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Option Price:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Vesting Schedule:	 	 
	 

	 	 	 	 
	 
	 	 	 	 





     This Nonqualified Stock Option Award is subject to the terms and conditions set forth on the
following pages.



     IN WITNESS WHEREOF, the parties have caused this Award Agreement to be executed as of the Date
of Grant.



	 	 	 	 	 

	 	 	Federal Signal Corporation
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Participant:	 	 
	 

	 	 	 	 





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This document constitutes part of the prospectus covering

securities that have been registered under the Securities Act of 1933.








     THIS AWARD AGREEMENT, effective as of the Date of Grant set forth above, represents the grant
of nonqualified stock options (the “Options”) by Federal Signal Corporation, a Delaware corporation
(the “Company”), to the Participant named above, pursuant to the provisions of the Plan.



     The Plan provides a complete description of the terms and conditions governing the Options.
If there is any inconsistency between the terms of this Award Agreement and the terms of the Plan,
the Plan’s terms shall completely supersede and replace the conflicting terms of this Award
Agreement. All capitalized terms shall have the meanings ascribed to them in the Plan, unless
specifically set forth otherwise herein. The parties hereto agree as follows:



     1. Grant of Stock Options. The Company hereby grants to the Participant the number of Options
set forth above to purchase the number of shares of Company common stock (“Shares”) set forth
above, at the stated Option Price, which is one hundred percent (100%) of the Fair Market Value of
a Share on the Date of Grant, in the manner and subject to the terms and conditions of the Plan and
this Award Agreement. Subject to Section 11 herein, each Option shall be exercisable into one
Share.



     2. Exercise of Stock Options. Except as hereinafter provided, the Participant may exercise
these Options at any time after the Date of Grant, and according to the vesting schedule set forth
on the previous page, provided that no exercise may occur subsequent to the close of business on
the Date of Expiration.



     These Options may be exercised in whole or in part, but not for less than one hundred (100)
Shares at any one time, unless fewer than one hundred (100) Shares then remain subject to the
Options, and the Options are then being exercised as to all such remaining Shares.



     3. Limitations on Exercise. The Participant must exercise all rights under this Award
Agreement prior to the tenth anniversary of the Date of Grant (i.e., the Options will expire upon
the tenth anniversary). The Participant may sell the Shares acquired via these Options at any
time.



     4. Termination of Employment by Death. In the event the employment of the Participant is
terminated by reason of death, all outstanding Options not yet vested shall become immediately
fully vested and, along with all previously vested Options, shall remain exercisable at any time
prior to their expiration date, or for one (1) year after the date of death, whichever period is
shorter, by such person or persons as shall have have acquired the Participant’s rights under the
Options by will or by the laws of descent and distribution.



     5. Termination of Employment by Disability. In the event the employment of the Participant is
terminated by reason of Disability, all outstanding Options not yet vested shall become immediately
fully vested and, along with all previously vested Options, shall remain exercisable at any time
prior to their expiration date, or for one (1) year after the date that the Committee determines
the definition of Disability to have been satisfied, whichever period is



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shorter. For purposes of this Award Agreement, Disability 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 Committee.




     6. Termination of Employment by Retirement. In the event the employment of the Participant is
terminated by reason of retirement (as determined by the Committee), all outstanding Options
previously vested shall remain exercisable at any time prior to their expiration date, or for three
(3) years after the effective date of retirement, whichever period is shorter. All outstanding
Options not yet vested shall be forfeited.



     7. Termination of Employment for Other Reasons. If the employment of the Participant shall
terminate for any reason other than the reasons set forth in Sections 4 through 6 or Section 9
herein, all previously vested Options shall remain exercisable for a period of three months from
the effective date of termination. Except as set forth in Section 9, the portion of the Options
not yet vested as of the date of termination shall be forfeited. The transfer of employment of the
Participant between the Company and any affiliate or Subsidiary (or between affiliates and/or
Subsidiaries) shall not be deemed a termination of employment for purposes of this Award Agreement.
In the event of termination of employment (whether or not in breach of local labor laws), the
Company shall have the exclusive discretion to determine the date of termination of employment for
purposes of this Award. Such termination date shall be the date that the Participant is no longer
actively employed and will not be extended by any notice period mandated under local law (e.g.,
active employment would not include a period of “garden leave” or similar period pursuant to local
law).



     8. Change in Control. In the event of a Change in Control (as that term is defined in the
Company’s Change in Control Policy), the Participant’s right to exercise these Options shall
immediately vest one hundred percent (100%) as of the first date that the definition of Change in
Control has been fulfilled, and shall remain as such for the remaining term of the Options.



     9. Acceleration of Vesting of Options in the Event of Divestiture of Business Segment. In
the event that the “Business Segment” (as that term is defined in this Section below) in which the
Participant is primarily employed as of the “Divestiture Date” (as that term is defined in this
Section below) is the subject of a “Divestiture of a Business Segment” (as that term is defined in
this Section below), and such divestiture results in the termination of the Participant’s
employment with the Company and its subsidiaries for any reason, the Participant’s right to
exercise the Options subject to this Agreement shall immediately vest and the Options shall become
immediately exercisable as of the Divestiture Date as to that portion of these Options that are not
vested and exercisable as of such date. The Options shall remain exercisable as to all shares
subject thereto for a period of three months after the Divestiture Date.



     For purposes of this Agreement, the term “Business Segment” shall mean a business line which
the Company treats as a separate business segment under the segment reporting rules under generally
accepted accounting principles as used in the United States, which currently includes the
following: Safety and Security Systems Group, Fire Rescue Group, ,Environmental Solutions Group and
Federal Signal Technologies Group. Likewise, the term “Divestiture Date”



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shall mean the date that a transaction constituting a Divestiture of a Business Segment is
finally consummated.




     For purposes of this Agreement, the term “Divestiture of a Business Segment” means the
following:




	 	(a)	 	When used with reference to the sale of stock or other
securities of a Business Segment that is or becomes a separate corporation,
limited liability company, partnership or other separate business entity, the
sale, exchange, transfer, distribution or other disposition of the ownership,
either beneficially or of record or both, by the Company or one of its
subsidiaries to “Nonaffiliated Persons” (as that term is defined in this
Section below) of 100% of either (a) the then-outstanding common stock (or the
equivalent equity interests) of the Business Segment or (b) the combined voting
power of the then-outstanding voting securities of the Business Segment
entitled to vote generally in the election of the board of directors or the
equivalent governing body of the Business Segment;

	 
	 	(b)	 	When used with reference to the merger or consolidation of a
Business Segment that is or becomes a separate corporation, limited liability
company, partnership or other separate business entity, any such transaction
that results in Nonaffiliated Persons owning, either beneficially or of record
or both, 100% of either (a) the then-outstanding common stock (or the
equivalent equity interests) of the Business Segment or (b) the combined voting
power of the then-outstanding voting securities of the Business Segment
entitled to vote generally in the election of the board of directors or the
equivalent governing body of the Business Segment; or

	 
	 	(c)	 	When used with reference to the sale of the assets of the
Business Segment, the sale, exchange, transfer, liquidation, distribution or
other disposition of all or substantially all of the assets of the Business
Segment necessary or required to operate the Business Segment in the manner
that the Business Segment had been operated prior to the Divestiture Date.






     For purposes of this Agreement, the term “Nonaffiliated Persons” shall mean any persons or
business entities which do not control, or which are not controlled by or under common control
with, the Company.



     10. Restrictions on Transfer. Unless determined otherwise by the Committee pursuant to the
terms of the Plan, these Options may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and distribution. Further,
these Options shall be exercisable during the Participant’s lifetime only by the Participant or the
Participant’s legal representative.



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     11. Recapitalization. In the event there is any change in the Company’s Shares through the
declaration of stock dividends or through recapitalization resulting in stock split-ups or through
merger, consolidation, exchange of Shares, or otherwise, the Committee may, in its sole discretion,
make such adjustments to these Options that it deems necessary in order to prevent dilution or
enlargement of the Participant’s rights.



     12. Procedure for Exercise of Options. These Options may be exercised by delivery of written
notice to the Company at its executive offices, addressed to the attention of the corporate
secretary. Such notice: (a) shall be signed by the Participant or his or her legal representative;
(b) shall specify the number of Options being exercised and thus the number of full Shares then
elected to be purchased with respect to the Options; and (c) shall be accompanied by payment in
full of the Option Price of the Shares to be purchased, and the Participant’s copy of this Award
Agreement.



     The Option Price upon exercise of these Options shall be payable to the Company in full
either: (a) in cash or its equivalent (acceptable cash equivalents shall be determined at the sole
discretion of the Committee); or (b) by tendering (either by actual delivery or attestation)
previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to
the total Option Price (provided that, except as otherwise determined by the Committee, the Shares
which are tendered must have been held by the Participant for at least six (6) months prior to
their tender to satisfy the Option Price or have been purchased on the open market); or (c) by a
combination of (a) and (b).



     Subject to the approval of the Committee, the Participant may be permitted to exercise
pursuant to a “cashless exercise” procedure, as permitted under Federal Reserve Board’s Regulation
T, subject to securities law restrictions, or by any other means which the Committee, in its sole
discretion, determines to be consistent with the Plan’s purpose and applicable law.



     The Company shall deliver to the Participant evidence of book entry Shares, or upon the
Participant’s request, Share certificates in an appropriate amount based upon the number of shares
purchased under the Option. The Company shall maintain a record of all information pertaining to
the Participant’s rights under this Award Agreement, including the number of Shares for which the
Options are exercisable. If all of the Options granted pursuant to this Award Agreement have been
exercised, this Award Agreement shall be returned to the Company and canceled.



     13. Rights as a Stockholder. The Participant shall have no rights as a stockholder of the
Company with respect to the Shares subject to this Award Agreement until such time as the option
purchase price has been paid, and the Shares have been issued and delivered to him or her.



     14. Responsibility for Taxes and Withholding




Regardless of any action the Company, any of its Subsidiaries and/or the Participant’s employer
takes with respect to any or all income tax, social insurance, payroll tax, payment on account or
other tax-related items related to the Participant’s participation in the Plan and legally
applicable to the Participant (“Tax-Related Items”), the Participant acknowledges that the ultimate
liability




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for all Tax-Related Items is and remains the Participant’s responsibility and may exceed the amount
actually withheld by the Company or any of its affiliates. The Participant further acknowledges
that the Company and/or its Subsidiaries (i) make no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of the Options, including, but not
limited to, the grant, vesting or exercise of the Options , the delivery of shares of Stock, the
subsequent sale of shares acquired pursuant to such delivery and the receipt of any dividends; and
(ii) do not commit to and are under no obligation to structure the terms of any award to reduce or
eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result.
Further, if the Participant becomes subject to tax in more than one jurisdiction between the Date
of Grant and the date of any relevant taxable event, the Participant acknowledges that the Company
and/or its Subsidiaries may be required to withhold or account for Tax-Related Items in more than
one jurisdiction.




     Prior to any relevant taxable or tax withholding event, as applicable, the Participant will
pay or make adequate arrangements satisfactory to the Company and/or its Subsidiaries to satisfy
all Tax-Related Items. In this regard, the Participant authorizes the Company and/or its
Subsidiaries, or their respective agents, at their discretion, to satisfy the obligations with
regard to all Tax-Related Items by one or a combination of the following:




     (a) withholding from the Participant’s wages or other cash compensation paid to the
Participant by the Company and/or its Subsidiaries; or




     (b) withholding from proceeds of the shares of Stock acquired following exercise of the
Option either through a voluntary sale or through a mandatory sale arranged by the Company
(on the Participant’s behalf pursuant to this authorization); or




     (c) withholding in shares of Stock to be delivered upon exercise of the Option



To avoid negative accounting treatment, the Company and/or its Subsidiaries may withhold or account
for Tax-Related Items by considering applicable minimum statutory withholding amounts or other
applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholding
in shares of Stock, for tax purposes, the Participant is deemed to have been issued the full number
of shares attributable to the Options , notwithstanding that a number of shares of Stock are held
back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the
Participant’s participation in the Plan.




     Finally, the Participant shall pay to the Company and/or its Subsidiaries any amount of
Tax-Related Items that the Company and/or its Subsidiaries may be required to withhold or account
for as a result of the Participant’s participation in the Plan that are not satisfied by the means
previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the
sale of Shares, if the Participant fails to comply with the Participant’s obligations in connection
with the Tax-Related Items.



     15. Continuation of Employment. This Award Agreement shall not confer upon the Participant
any right to continuation of employment by the Company, nor shall this Award



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Agreement interfere in any way with the Company’s right to terminate the Participant’s
employment at any time.




     16. Entire Award; Modification




     This Award Agreement and the Plan constitutes the entire agreement between the parties with
respect to the terms and supersede all prior or written or oral negotiations, commitments,
representations and agreements with respect thereto. The terms and conditions set forth in this
Award Agreement may only be modified or amended in writing, signed by both parties.



     17. Governing Law and Severability




This Award Agreement shall be construed and administered in accordance with the laws of the State
of Illinois. This Award Agreement shall inure to the benefit of, and be binding upon, the
Company and the Participant and their heirs, legal representatives, successors and permitted
assigns. In the event that any one or more of the provisions or portion thereof contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, the
same shall not invalidate or otherwise affect any other provisions of this Award Agreement, and
this Award Agreement shall be construed as if the invalid, illegal or unenforceable provision or
portion thereof had never been contained herein. Subject to the terms and conditions of the Plan
and any rules adopted by the Company and applicable to this Award Agreement, which are
incorporated herein by reference, this Agreement expresses the entire understanding and agreement
of the parties hereto with respect to such terms, restrictions and limitations. Section headings
used herein are for convenience of reference only and shall not be considered in construing this
Award Agreement.




     18. Consent to Release and Transfer Data



          The Participant hereby explicitly and unambiguously consents to the collection, use and
transfer, in electronic or other form, of the Participant’s personal data by and among, as
applicable, the Company and its Subsidiaries for the exclusive purpose of implementing,
administering and managing the Participant’s participation in the Plan. The Participant
understands that the Company may hold certain personal information about the Participant,
including, but not limited to, the Participant’s name, home address and telephone number, date of
birth, social security number (or any other social or national identification number), salary,
nationality, job title, number of Options and/or shares of Stock held and the details of any other
entitlement to shares of Stock awarded, exercised, cancelled, vested, unvested or outstanding for
the purpose of implementing, administering and managing the Participant’s participation in the Plan
(the “Data”). The Participant understands that the Data may be transferred to the Company or to
any third parties assisting in the implementation, administration and management of the Plan, that
these recipients may be located in the Participant’s country or elsewhere, and that any recipient’s
country (e.g., the United States) may have different data privacy laws and protections than the
Participant’s country. The Participant understands that he or she may request a list with the
names and addresses of any potential recipients of the Data by contacting his or her local human
resources representative or the Company’s stock plan administrator. The Participant authorizes the
recipients to receive, possess, use, retain and transfer the Data, in electronic or



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other form, for the sole purpose of implementing, administering and managing the Participant’s
participation in the Plan, including any requisite transfer of such Data to a broker or other third
party assisting with the administration of Options under the Plan or with whom shares of Common
Stock acquired pursuant to the exercise or cash from the sale of such shares may be deposited.
Furthermore, the Participant acknowledges and understands that the transfer of the Data to the
Company or to any third parties is necessary for the Participant’s participation in the Plan. The
Participant understands that the Participant may, at any time, view the Data, request additional
information about the storage and processing of the Data, require any necessary amendments to the
Data or refuse or withdraw the consents herein by contacting the Participant’s local human
resources representative or the Company’s stock plan administrator in writing. The Participant
further acknowledges that withdrawal of consent may affect his or her ability to vest in or realize
benefits from the Options, and the Participant’s ability to participate in the Plan. For more
information on the consequences of refusal to consent or withdrawal of consent, the Participant
understands that he or she may contact his or her local human resources representative or the
Company’s stock plan administrator.




     19. Electronic Delivery and Acceptance




     The Participant hereby consents and agrees to electronic delivery of any documents that the
Company may elect to deliver (including, but not limited to, plan documents, prospectus and
prospectus supplements, grant or award notifications and agreements, account statements, annual and
quarterly reports, and all other forms of communications) in connection with this and any other
incentive award made or offered under the Plan. The Participant understands that, unless revoked
by giving written notice to the Company pursuant to the Plan, this consent will be effective for
the duration of the Agreement. The Participant also understands that the Participant will have the
right at any time to request that the Company deliver written copies of any and all materials
referred to above. The Participant hereby consents to any and all procedures the Company has
established or may establish for an electronic signature system for delivery and acceptance of any
such documents that the Company may elect to deliver, and agrees that the Participant’s electronic
signature is the same as, and will have the same force and effect as, the Participant’s manual
signature. The Participant consents and agrees that any such procedures and delivery may be
effected by a third party engaged by the Company to provide administrative services related to the
Plan.



     21. English Language




     The Participant acknowledges and agrees that it is the Participant’s express intent that this
Award Agreement, the Plan and all other documents, rules, procedures, forms, notices and legal
proceedings entered into, given or instituted pursuant to the Award, be drawn up in English. If
the Participant has received this Award Agreement, the Plan or any other rules, procedures, forms
or documents related to the Award translated into a language other than English, and if the meaning
of the translated version is different than the English version, the English version will control.



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22. Miscellaneous.





	 	(a)	 	This Award Agreement and the rights of the Participant
hereunder are subject to all the terms and conditions of the Plan, as the same
may be amended from time to time, as well as to such rules and regulations as
the Committee may adopt for administration of the Plan. The Committee shall
have the right to impose such restrictions on any Shares acquired pursuant to
these Options, as it may deem advisable, including, without limitation,
restrictions under applicable federal securities laws, under applicable federal
and state tax law, under the requirements of any stock exchange or market upon
which such Shares are then listed and/or traded, and under any blue sky or
state securities laws applicable to such Shares.

	 
	 	 	 	It is expressly understood that the Committee is authorized to administer,
construe, and make all determinations necessary or appropriate to the
administration of the Plan and this Award Agreement, all of which shall be
binding upon the Participant.

	 
	 	(b)	 	The Committee may terminate, amend, or modify the Plan;
provided, however, that no such termination, amendment, or modification of the
Plan may in any material way adversely affect the Participant’s vested rights
under this Award Agreement, without the written consent of the Participant.

	 
	 	(c)	 	The Company shall have the power and the right to deduct or
withhold, or require the Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes (including the
Participant’s FICA obligation), domestic or foreign, required by law to be
withheld with respect to any exercise of the Participant’s rights under this
Award Agreement.

	 
	 	 	 	The Participant may elect, subject to any procedural rules adopted by the
Committee, to satisfy the minimum statutory withholding requirement, in
whole or in part, by having the Company withhold Shares having an aggregate
Fair Market Value on the date the tax is to be determined, equal to such
minimum statutory withholding tax.

	 
	 	(d)	 	The Participant agrees to take all steps necessary to comply
with all applicable provisions of federal and state securities and tax laws in
exercising his or her rights under this Award Agreement.

	 
	 	(e)	 	This Award Agreement shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.

	 
	 	(f)	 	All obligations of the Company under the Plan and this Award
Agreement, with respect to these Options, shall be binding on any successor to
the Company, whether the existence of such successor is the result of a direct






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	 		 	or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.

	 
	 	(g)	 	To the extent not preempted by federal law, this Award
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Delaware.






23. Appendix




     Notwithstanding any provision of this Award Agreement to the contrary, this grant of this
Option and the shares of Stock acquired under the Plan shall be subject to any and all special
terms and provisions, if any, as set forth in the Appendix for the Participant’s country of
residence.




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