Document:

exv10w2

Exhibit 10.2

Federal Signal Corporation

2005 Executive Incentive Compensation Plan (2010 Restatement)

Performance Based Restricted Stock Unit — Award Agreement

     You have been selected to receive a grant of Performance Based Restricted Stock Units
pursuant to the Federal Signal Corporation 2005 Executive Incentive Compensation Plan (2010
Restatement) (the “Plan”), as specified below:

     Employee:                                                            
                     

     Date of Grant:                                                           
                      

     Earnings Per Share Target:                                                             

     Earnings Per Share Threshold:                                                             

     Earnings Per Share Maximum:                                                             

     Performance Based Restricted Stock Units Granted:                     

     Performance Period: January 1, 2011 through December 31, 2011

     Vesting Period: January 1, 2011 through December 31, 2013

     This Award shall be subject to the terms and conditions prescribed in the Federal Signal
Corporation 2005 Executive Incentive Compensation Plan (2010 Restatement) and in the Federal Signal
Corporation Performance Based Restricted Stock Unit Award Agreement No. 2011 attached hereto.

This document constitutes part of the prospectus covering
securities that have been registered under the Securities Act of 1933.

     IN WITNESS WHEREOF, the parties have caused this Award Agreement to be executed on this
____________ day of __________________________.

	 	 	 	 	 

	 	 	FEDERAL SIGNAL CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	Company
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	Employee

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FEDERAL SIGNAL CORPORATION

PERFORMANCE BASED RESTRICTED STOCK UNIT

AWARD AGREEMENT NO. 2011

     The Company established the Federal Signal Corporation 2005 Executive Incentive Compensation
Plan (2010 Restatement) (the “Plan”) pursuant to which options, stock appreciation rights,
restricted stock and stock units and performance shares covering an aggregate of 7,800,000 shares
of the Stock of the Company may be granted to employees and directors of the Company and its
Subsidiaries;

     The Board of Directors of the Company, and the Administrator of the Plan appointed by the
Board of Directors, has determined that the interests of the Company will be advanced by
encouraging and enabling certain of its employees to own shares of the common stock of the Company,
and that Employee is one of those employees;

          NOW, THEREFORE, in consideration of services rendered and the mutual covenants herein
contained, the parties agree as follows:

Section 1. Definitions

          As used in this Agreement, the following terms shall have the following meanings:

          A. “Award” means the award provided for in Section 2.

          B. “Board of Directors” means the Board of Directors of the Company.

          C. “Change in Control” shall have the meaning ascribed to such term in the Plan.

          D. “Company” means Federal Signal Corporation.

          E. “Date of Grant” of Performance Based Restricted Stock Units means the date set forth on the
Award Agreement applicable those Units.

          F. “Earnings Per Share from Continuing Operations” means diluted (loss) earnings per share
from continuing operations determined in accordance with GAAP and as reported in the Company’s Form
10-K for the respective year, subject to certain discretionary adjustments as approved by the
Compensation and Benefits Committee of the Board of Directors.

          G. “Earnings Per Share Maximum” means the maximum level of Earnings Per Share from Continuing
Operations set forth in the Award Agreement.

          H. “Earnings Per Share Target” means the target level of Earnings Per Share from Continuing
Operations set forth in the Award Agreement.

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          I. “Earnings Per Share Threshold” means the threshold level of Earnings Per Share from
Continuing Operations set forth in the Award Agreement.

          J. “Employee” means the individual shown as the recipient of an award of Performance Based
Restricted Stock Units, as set forth on the Award Agreement applicable those Units.

          K. “GAAP” means U.S. generally accepted accounting principles.

          L. “Performance Based Restricted Stock Unit” means the obligation of the Company to transfer
the number of shares of Stock to Employee prescribed in Section 2, at the time provided in Section
5 of this Agreement, provided such Performance Based Restricted Stock Unit is vested at such time.

          M. “Performance Period” means the calendar year period set forth in the Award Agreement.

          N. “Permanent Disability” means Employee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not less than twelve
months.

          O. “Stock” means the common stock of the Company.

          P. “Subsidiary” means any corporation or other legal entity, other than the Company, in an
unbroken chain of entities beginning with the Company if, at the relevant date, each of such
entities, other than the last entity in the unbroken chain, owns stock possessing fifty percent or
more of the total combined voting power with respect to one of the other entities in such chain.

          Q. “Vesting Period” means the three consecutive calendar year period set forth in the Award
Agreement.

Section 2. Award

     Subject to the terms of this Agreement, the Company awarded to Employee the number of
Performance Based Restricted Stock Units set forth on the Award Agreement applicable to those
Units, effective as of the Date of Grant set forth on such instrument.

     A Performance Based Restricted Stock Unit Award entitles the Employee to receive a whole
number of shares of Stock equal to a percentage, from zero to two hundred percent, based on the
Earnings Per Share from Continuing Operations during the Performance Period, of the number of
Performance Based Restricted Stock Units that are subject to the Award, as described in this
Section.

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     If the Company’s Earnings Per Share from Continuing Operations is less than the Earnings Per
Share Threshold, the Employee shall be entitled to receive no shares of Stock with respect to the
Performance Based Restricted Stock Units subject to the Award. If the Company’s Earnings Per
Share from Continuing Operations is equal to the Earnings Per Share Threshold, the Employee shall
be entitled to receive shares of Stock equal to fifty percent (50%) of the Performance Based
Restricted Stock Units subject to the Award. If the Company’s Earnings Per Share from Continuing
Operations is equal to the Earnings Per Share Target, the Employee shall be entitled to receive
shares of Stock equal to one hundred percent (100%) of the Performance Based Restricted Stock Units
subject to the Award. If the Company’s Earnings Per Share from Continuing Operations is equal to
or greater than the Earnings Per Share Maximum, the Employee shall be entitled to receive shares of
Stock equal to two hundred percent (200%) of the Performance Based Restricted Stock Units subject
to the Award.

     If the Company’s Earnings Per Share from Continuing Operations is another amount between the
Earnings Per Share Target and, as applicable, the Earnings Per Share Threshold or the Earnings Per
Share Maximum, the Employee will receive a percentage of the Performance Based Restricted Stock
Units subject to the Award determined through straight line interpolation to Earnings Per Share
Target. For example, if the Company’s Earnings Per Share from Continuing Operations is $0.75, the
Earnings Per Share Target is $1.00 and the Earnings Per Share Threshold is $.50, the Employee shall
be entitled to receive shares of Stock equal to 75% of the Performance Based Restricted Stock Units
subject to the Award.

     This grant of Performance Based Restricted Stock Units shall not confer any right to the
Employee (or any other Employee) to be granted Performance Based Restricted Stock Units or other
Awards in the future under the Plan.

Section 3. Bookkeeping Account

     The Company shall record the number of Performance Based Restricted Stock Units granted
hereunder to a bookkeeping account for the Employee (the “Performance Based Restricted Stock Unit
Account”). The Employee’s Performance Based Restricted Stock Unit Account shall be reduced by the
number of Performance Based Restricted Stock Units, if any, forfeited in accordance with Section 4
and by the number of Performance Based Restricted Stock Units with respect to which shares of Stock
were transferred to the Employee in accordance with Section 5.

Section 4. Vesting

     Subject to the accelerated vesting provisions provided below, the Performance Based Restricted
Stock Units subject to the Award shall vest on the last day of the Vesting Period, if Employee
remains employed by the Company or its Subsidiaries through such date.

     For the avoidance of doubt, if the Company fails to achieve at least the Earnings Per Share
Threshold, the Employee shall be entitled to receive no shares of Stock with respect to the
Performance Based Restricted Stock Units subject to the Award (as described in Section 2), unless
the deemed Earnings Per Share from Continuing Operations provisions in this Section specifically
modify such result.

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     If, during the Performance Period:

          A. The Employee dies or terminates employment on account of his or her Permanent Disability,
the Performance Based Restricted Stock Units subject to the Award shall be vested, pro rata (based
on the number of full and partial months of the Employee’s employment during the Performance Period
divided by twelve), based on Earnings Per Share from Continuing Operations during the Performance
Period; or

          B. A Change in Control occurs, the Performance Based Restricted Stock Units subject to the
Award shall be vested, pro rata (based on the number of full and partial months during the
Performance Period before the date of the Change in Control, divided by twelve), and the Earnings
Per Share from Continuing Operations shall be deemed to be 100% of the Earnings Per Share Target,
regardless of actual performance.

     If, after the Performance Period but during the Vesting Period:

          A. The Employee dies or terminates employment on account of his or her Permanent Disability or
by reason of retirement (as determined by the Company, in its sole and absolute discretion), the
Performance Based Restricted Stock Units subject to the Award shall be immediately fully vested,
based on Earnings Per Share from Continuing Operations during the Performance Period; or

          B. A Change in Control occurs, the Performance Based Restricted Stock Units subject to the
Award shall be immediately fully vested, based on Earnings Per Share from Continuing Operations
during the Performance Period.

     Except as provided in 4.1 below, in the event of the termination of employment of the
Employee with the Company and its Subsidiaries for any other reason before the end of the Vesting
Period, all Performance Based Restricted Stock Units that are not vested at the time of such
termination of employment normally shall be forfeited. 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 Employee 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).

Section 4.1 Acceleration of Vesting of Shares 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 Employee 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 Employee’s
employment with the Company and its subsidiaries for any reason, the Performance Based Restricted
Stock Units subject to the Award shall be vested: (A) in the case of a Divestiture of a

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Business Segment during the Performance Period, pro rata, based on the number of full and partial
months of Employee’s employment during the Performance Period before the Divestiture Date, divided
by twelve; or (B) in the case of a Divestiture of a Business Segment after the Performance Period
but during the Vesting Period, fully. If the Divestiture Date occurs during the Performance
Period, the Earnings Per Share from Continuing Operations shall be deemed to be 100% of the
Earnings Per Share Target, regardless of actual performance. If the Divestiture Date occurs after
the Performance Period but during the Vesting Period, the Earnings Per Share from Continuing
Operations during the Performance Period shall control.

     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 GAAP,
which currently includes the following: Safety and Security Group, Fire Rescue, Environmental
Solutions Group, and Federal Signal Technologies Group. Likewise, the term “Divestiture Date”
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 a 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 (i) the then-outstanding
common stock (or the equivalent equity interests) of the Business Segment or (ii) 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 (i) the
then-outstanding common stock (or the equivalent equity interests) of the Business
Segment or (ii) 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.

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Section 5. Distribution of Shares

     Subject to the provisions below, the number of shares of Stock earned in accordance with
Section 2, determined as of the end of the Performance Period, with respect to Performance Based
Restricted Stock Units that become vested in accordance with Section 4, shall become distributable
as of the end of the Vesting Period (regardless of whether the shares vest earlier).

     If a Change in Control occurs during the Performance Period, notwithstanding anything in this
Agreement to the contrary, the number of shares of Stock earned in accordance with Section 2, with
respect to Performance Based Restricted Stock Units that become vested in accordance with Section
4, shall become distributable on the date of the Change in Control.

     If an Employee terminates employment due to a Permanent Disability during the Vesting Period,
notwithstanding anything in this Award Agreement to the contrary, the number of shares of Stock
earned in accordance with Section 2, determined as of the end of the Performance Period, with
respect to Performance Based Restricted Stock Units that become vested in accordance with Section
4, shall become distributable on the later of the Employee’s Permanent Disability date or the end
of the Performance Period (regardless of whether the shares vest earlier).

     Such shares of Stock shall be distributed as soon as administratively feasible after the date
prescribed above; but no later than the later of (a) the end of the calendar year in which the
specified date occurs; or (b) the 15th day of the third calendar month in the year
following such specified date, provided the Employee is not permitted to designate the taxable year
of the payment

Section 6. Shareholder Rights

     Employee shall not have any of the rights of a shareholder of the Company with respect to
Performance Based Restricted Stock Units, such as the right to vote or the right to dividends.

Section 7. Death Benefits

     The number of shares of Stock earned in accordance with Section 2, determined as of the end
of the Performance Period, with respect to Performance Based Restricted Stock Units that become
distributable on account of the death of an Employee during the Vesting Period, shall be payable
to the estate of the Employee upon the later of the Employee’s death or the end of the
Performance Period (regardless of whether the shares vest earlier). Actual payment will occur as
soon as administratively feasible after such shares become payable, but no later than the later of
two and one-half months after such date or the end of the calendar year in which such date
occurs.

Section 8. Units Non-Transferable

     Performance Based Restricted Stock Units awarded hereunder shall not be transferable by
Employee. Except as may be required by U.S. federal, state, foreign laws, the interests of
Employee under this Agreement are not subject to the claims of their creditors and may not be

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voluntarily or involuntarily sold, transferred, alienated, assigned, pledged, anticipated, or
encumbered. Any attempt by Employee to sell, transfer, alienate, assign, pledge, anticipate,
encumber, charge or otherwise dispose of any right to benefits payable hereunder shall be void.

Section 9. Adjustment in Certain Events

     If there is any change in the Stock by reason of stock dividends, split-ups, mergers,
consolidations, reorganizations, combinations or exchanges of shares or the like, the number of
Performance Based Restricted Stock Units credited to Employee’s Performance Based Restricted Stock
Unit Account shall be adjusted appropriately so that the number of Performance Based Restricted
Stock Units credited to Employee’s Performance Based Restricted Stock Unit Account after such an
event shall equal the number of shares of Stock a shareholder would own after such an event if the
shareholder, at the time such an event occurred, had owned shares of Stock equal to the number of
Performance Based Restricted Stock Units credited to Employee’s Performance Based Restricted Stock
Unit Account immediately before such an event.

Section 10. Responsibility for Taxes and Withholding

     Regardless of any action the Company, any of its Subsidiaries and/or the Employee’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 Employee’s participation in the Plan and legally applicable
to the Employee (“Tax-Related Items”), the Employee acknowledges that the ultimate liability for
all Tax-Related Items is and remains the Employee’s responsibility and may exceed the amount
actually withheld by the Company or any of its affiliates. The Employee 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 Performance Based
Restricted Stock Units, including, but not limited to, the grant or vesting of the Performance
Based Restricted Stock Units, the delivery of shares of Stock, the subsequent sale of shares
acquired pursuant to such delivery and the receipt of any dividends and/or dividend equivalents;
and (ii) do not commit to and are under no obligation to structure the terms of any award to reduce
or eliminate the Employee’s liability for Tax-Related Items or achieve any particular tax result.
Further, if the Employee becomes subject to tax in more than one jurisdiction between the Date of
Grant and the date of any relevant taxable event, the Employee 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 Employee will pay
or make adequate arrangements satisfactory to the Company and/or its Subsidiaries to satisfy all
Tax-Related Items. In this regard, the Employee 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 Employee’s wages or other cash compensation paid to the
Employee by the Company and/or its Subsidiaries; or

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

	 
	 	(c)	 	withholding in shares of Stock to be delivered upon settlement; or

	 
	 	(d)	 	withholding from dividend equivalent payments (payable in cash) related to the
Shares to be delivered at settlement.

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 Employee is deemed to have been issued the full number of
shares attributable to the awarded Performance Based Restricted Stock Units, 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 Employee’s participation in the Plan.

     Finally, the Employee 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 Employee’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 Employee fails to comply with the Employee’s obligations in connection with
the Tax-Related Items.

Section 11. Source of Payment

     Shares of Stock transferable to Employee, or his or her Beneficiary, under this Award
Agreement may be either Treasury shares, authorized but unissued shares, or any combination of such
stock. The Company shall have no duties to segregate or set aside any assets to secure Employee’s
right to receive shares of Stock under this Award Agreement. Employee shall not have any rights
with respect to transfer of shares of Stock under this Award Agreement other than the unsecured
right to receive shares of Stock from the Company.

Section 12. Continuation of Employment

     This Award Agreement shall not confer upon the Employee any right to continuation of
employment by the Company, nor shall this Award Agreement interfere in any way with the Company’s
right to terminate the Employee’s employment at any time.

Section 13. Amendment

     This Award Agreement may be amended by mutual consent of the parties hereto by written
agreement.

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Section 14. Governing Law & 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 Employee 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.

Section 15. Consent to Release and Transfer Data

     The Employee hereby explicitly and unambiguously consents to the collection, use and transfer,
in electronic or other form, of the Employee’s personal data by and among, as applicable, the
Company and its Subsidiaries for the exclusive purpose of implementing, administering and managing
the Employee’s participation in the Plan. The Employee understands that the Company may hold
certain personal information about the Employee, including, but not limited to, the Employee’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 Performance Based
Restricted Stock Units and/or shares of Stock held and the details of all units or any other
entitlement to shares of Stock awarded, cancelled, vested, unvested or outstanding for the purpose
of implementing, administering and managing the Employee’s participation in the Plan (the “Data”).
The Employee 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 Employee’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 Employee’s country.
The Employee 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 Employee authorizes the recipients to receive,
possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of
implementing, administering and managing the Employee’s participation in the Plan, including any
requisite transfer of such Data to a broker or other third party assisting with the administration
of Units under the Plan or with whom shares of Common Stock acquired pursuant to the vesting of the
Award units or cash from the sale of such shares may be deposited. Furthermore, the Employee
acknowledges and understands that the transfer of the Data to the Company or to any third parties
is necessary for the Employee’s participation in the Plan. The Employee understands that the
Employee may, at any time, view the Data, request additional information about the storage and
processing of the Data, require any necessary amendments to

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the Data or refuse or withdraw the consents herein by contacting the Employee’s local human
resources representative or the Company’s stock plan administrator in writing. The Employee
further acknowledges that withdrawal of consent may affect his or her ability to vest in or realize
benefits from the units, and the Employee’s ability to participate in the Plan. For more
information on the consequences of refusal to consent or withdrawal of consent, the Employee
understands that he or she may contact his or her local human resources representative or the
Company’s stock plan administrator.

Section 16. Electronic Delivery and Acceptance

     The Employee 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 Employee 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 Employee also understands that the Employee will have the right at
any time to request that the Company deliver written copies of any and all materials referred to
above. The Employee 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 Employee’s electronic signature is the same
as, and will have the same force and effect as, the Employee’s manual signature. The Employee
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.

Section 17. English Language

     The Employee acknowledges and agrees that it is the Employee’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 Employee 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.

Section 18. Appendix

     Notwithstanding any provision of this Award Agreement to the contrary, this grant of Award 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 Employee’s country of residence.

11exv10w3

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”

3

 

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.

4

 

     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

5

 

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

6

 

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

7

 

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.

8

 

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

9

 

	 		 	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.

10

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