EXHIBIT 10.b



                           FEDERAL SIGNAL CORPORATION
                   Corporate Management Incentive Bonus Plan


The  incentive  bonus plan has been  established  to provide an incentive to key
corporate  officers and management  employees of Federal  Signal  Corporation to
attain the highest  performance  possible in each year.  The plan  provides  key
executives with an opportunity to add to their total annual compensation, if the
corporation  attains prescribed levels of return on capital and increases in net
income and the participant  fulfills agreed upon objectives during the year. The
details of the plan follow.

I.    Incentive bonus calculations

  A)  Target bonus

      A target bonus amount will be established for each plan participant in the
      plan.  This target bonus amount will be based upon a specified  percentage
      of the participant's salary.

  B)  Bonus goals

      1)  A specified  portion of the bonus  amount  will be based on  corporate
          return on  capital  (ROC).  For this  purpose,  ROC is  defined as the
          percent  of   after-tax   income   excluding   after-tax   unusual  or
          extraordinary  items (see Section  IIC3) plus interest on debt divided
          by the year's monthly average of the sum of stockholders'  equity plus
          debt.  With regard to this  portion of the bonus  determination,  each
          participant's  bonus will be subject to calculation in accordance with
          the scale on Attachment A for total corporate performance.

      2)  A  specified  portion  of  the  bonus  amount  will  be  based  on the
          corporation's  increase  in net  income  for the year  over the  prior
          year's net income.  For this  calculation,  "net income" is defined by
          generally  accepted  accounting  principles  subject to  inclusion  or
          exclusion  of unusual or  extraordinary  items as decided by the Chief
          Executive   Officer.   With  regard  to  this  portion  of  the  bonus
          determination, each participant's bonus will be subject to calculation
          in  accordance  with the scale on  Attachment  B for  total  corporate
          performance.

      3)  A specified  portion of the bonus amount is discretionary  based on an
          evaluation of the  participant's  performance  (see Section IIB). This
          part of your bonus also  constitutes  payment for any unused  vacation
          and by  accepting  the bonus  payment you waive any claims for payment
          for  unused  vacation.  With  regard  to  this  portion  of the  bonus
          determination,  each participant's  bonus will be subject to paragraph
          IIB. below.

II.   Administration

  A)  Determination of bonus award

      Following the completion of the year-end audit,  the actual bonus for each
      participant will be calculated as follows:

      1)  Multiply the applicable target bonus by the respective bonus factor as
          determined by Attachments A and B.

      2)  The  discretionary  award factor will be determined in accordance with
          IIB.  below  by the  employee's  supervisor,  which  in turn  requires
          "one-over-one"  approval.  The discretionary target bonus will then be
          multiplied by the discretionary award factor.

  B)  Determination of discretionary award

      Each participant will be evaluated against the following criteria:

      1)  General performance of the participant's responsibilities.

      2) Meeting the participant's objectives and/or priorities.

      3)  Evaluation of initiative, attitude, and dedication to the company.

      4)  Management development of self and subordinates.

      5)  Professional and personal conduct.

  C)  Other considerations

      1)  Bonus  awards  will be  paid  only to  participants  who are  actively
          employed as of the bonus payment date.

      2)  In the event of the retirement of a participant  during the management
          incentive  bonus plan year, the amount of bonus award will be based on
          the full year results  with credit for the number of completed  months
          worked as a percent of the full plan year.

      3)  Net income as used in Section IB1 will be  inclusive of any changes in
          reserves,  but will  exclude  any  capital  gains or losses  and other
          unusual gains or losses such as proceeds of fire or casualty insurance
          or changes  in  accounting  practices.  In cases of  uncertainty,  the
          decision of the Chief Executive Officer will be final.