Document:

ex103finesofferletter

 EXHIBIT 10.3    May 4, 2017  By E-Mail and Regular Mail  Mr. Robert Fines 2305 English Village Lane Mountain Brook Al 35223  Re: Offer of Employment  Dear Bob:    On behalf of Federal Signal Corporation (the “Company”), it is with great pleasure that I present you with the following offer of employment in the position of Vice President and General Manager for the group of businesses within the corporate family of Truck Bodies & Equipment International, Inc. (“TBEI”).  You will report to Jennifer Sherman, Chief Executive Officer of the Company.  We are delighted to welcome you to Federal Signal and we look forward to the addition of your expertise to our executive leadership team.   This offer is contingent upon the closing of the transaction contemplated in the Stock Purchase Agreement (the “Agreement”) between the Company and GenNx/TBEI Holdings, LLC, pursuant to which the Company has agreed to acquire all the outstanding shares of capital stock of GenNx/TBEI Intermediate Co., a Delaware corporation (“Target”), on the terms and conditions set forth in the Agreement (the “Transaction”).  In the event the Transaction does not close, this offer is null and void and shall be of no force or effect.    The precise terms of our offer are as follows:  1. Start Date.  Your employment with the Company will begin upon the closing of the Transaction (the “Start Date”).    2. Duties.   You shall perform such duties and responsibilities as are assigned or delegated to you from time to time by the Company’s Chief Executive Officer in her discretion.    3. Base Salary.  Your annual base salary will be $400,000 per year, less taxes and withholdings, and will be paid on a semi-monthly basis, unless a more frequent pay period is required by applicable state law. Your annual base salary will remain unchanged during the first three years of your employment with the Company, provided you remain an employee of the Company (or a subsidiary of the Company) in good standing, as determined by the Company, in the same or substantially similar role. Nothing in this paragraph or offer letter alters the at-will nature of your employment.      

 

Mr. Robert Fines May 4, 2017 Page 2 of 6  4. Annual Incentive Bonus.    a. You shall continue to be eligible to earn an annual cash bonus at the conclusion of TBEI’s current fiscal year on September 30, 2017, under and pursuant to the current terms of your Fiscal Year 2017 Bonus Plan with TBEI as set forth in the letter to you from Tina Albright dated November 21, 2016.  The bonus payment, if any, will not be made until after the Company’s receipt of audited financials and shall occur and no later than March 15, 2018.    b. A partial-year bonus opportunity valued at target at $40,000, less taxes and withholdings, will be defined to cover the period from October 1, 2017, to December 31, 2017, which is the end of the Company’s fiscal year. This bonus will be determined by TBEI’s performance against a financial performance target represented by an earnings metric (e.g., EBITDA, operating income). The Company will work with you in good faith to establish the performance targets.  The Company and the Compensation and Benefits Committee of its Board of Directors (“CBC”) retains final discretion to establish the precise terms of your partial-year bonus opportunity and applicable financial performance targets. In addition to satisfying applicable performance targets, you must be employed by the Company (or one of its subsidiaries) through the date on which the partial-year bonus is paid to earn and receive the partial-year bonus. The partial-year bonus will be paid in a lump sum no later than March 15, 2018.      c. Effective January 1, 2018, you will be eligible to earn an annual cash incentive bonus, which is paid through the STIP in accordance with its terms. In your current position, your target bonus shall be 50% of your annual base salary (i.e., $200,000) with a maximum bonus opportunity of 100% of your annual base salary (i.e., $400,000).   The STIP is designed to reward and motivate outstanding performance and is currently based on achievement of annual Company and individual objectives, weighted at 70% and 30% of the bonus opportunity respectively, the precise terms of which are determined in the discretion of the Company’s executive leadership team and the CBC. Generally speaking, for 2018, the Company-based financial objectives shall be determined by: (i) TBEI’s performance relative to financial performance targets represented by an earnings metric (e.g., EBITDA, operating income) established in the Company’s 2018 Annual Operating Plan (“2018 AOP”) (60% of the bonus opportunity); and (ii) the Company’s performance relative to financial performance targets established in the 2018 AOP (10% of the bonus opportunity). As stated, the remaining portion of the bonus opportunity will be determined by your individual performance against individual objectives established by the Company for 2018 in its discretion (30% of the bonus opportunity).    In addition to satisfying applicable objectives, you must be employed by the Company on the date bonuses are paid to earn a bonus under the STIP. Bonus determinations and payments are subject to the discretion and approval of the Company’s executive leadership team and the CBC and generally occur in March of the calendar year following the calendar year to which the bonus applies.   

 

Mr. Robert Fines May 4, 2017 Page 3 of 6  d. Your eligibility for an annual cash incentive bonus under the STIP in subsequent calendar years will be communicated to you in writing when such determinations are made by the Company in its discretion.    5. Long-Term Equity Incentive Awards.    a. On or near the date the Transaction closes, you will receive an initial grant of performance share units (“PSUs”) under and pursuant to the Company’s 2015 Executive Incentive Compensation Plan (“2015 EICP”). These PSUs will be subject to the terms of the 2015 EICP and an award agreement including a performance and vesting period commencing at the beginning of the first quarterly period following the date on which the Transaction closes and ending three years later (“Performance Period”). At grant, the number of PSUs you will receive will be determined by dividing $750,000 by the closing stock price of a share of Company stock on the effective date of grant. The number of PSUs earned, if any, shall be based on TBEI’s performance against cumulative financial performance targets represented by an earnings metric (e.g., EBITDA, operating income) over the Performance Period, subject to adjustment for items that are not indicative of ongoing results such as extraordinary or non-recurring items, in the discretion of the CBC. The performance targets shall be determined by the CBC in its discretion.  Attainment of 80% of the cumulative target will result in payout of 50% of the target PSUs, attainment of 100% of the cumulative target will result in payout of 100% of the target PSUs, and attainment of 120% of the cumulative target will result in payout of 200% of the target PSUs, with straight-line interpolation for performance between the same. In the event the Company terminates your employment other than for “Cause” (as that term is defined in your Amended and Restated Non- Competition and Severance Agreement dated September 30, 2015 with Crysteel Manufacturing, Inc., a subsidiary of TBEI (“Severance Agreement”)), you will be eligible to earn a pro-rata portion of the PSUs based on actual performance measured at the end of the performance period, paid in accordance with the terms of the applicable award agreement.  b. In 2018, you will be eligible to receive a long-term equity incentive award under and pursuant to the 2015 EICP, subject to the discretion and approval of the CBC. As currently structured for executives at your level, these awards are split between PSUs (50% of the award), non-qualified stock options (25% of the award), and time-based restricted stock (25% of the award) and have an aggregate grant date value of $125,000. As currently awarded to executives at your level: (a) stock options vest ratably over three years; (b) time- based restricted stock cliff vests in three years; and (c) PSUs are subject to a three-year performance and vesting period.   c. In subsequent years, incentive awards, the amount of such awards, and the terms and conditions applicable to such awards, will be made and announced in the discretion of the CBC in connection with its annual grant cycle. d. To receive the foregoing equity incentive awards, you must be employed by the Company and execute and return detailed award agreements which contain the precise terms and conditions of such awards and control in the event of any conflict with this offer letter. Award agreements will be presented to you as soon as administratively feasible prior to the 

 

Mr. Robert Fines May 4, 2017 Page 4 of 6  date of such awards and include a companion Non-Competition, Non-Solicitation, & Confidentiality Agreement (copy enclosed), the execution and return of which is required to receive the awards.   6. Stay Bonus.   Should you remain employed with the Company or a subsidiary of the Company in good standing, as determined by the Company, for a period of three years from the Start Date in the same or substantially similar position, you will be paid the sum of $250,000, less taxes and withholdings. For the avoidance of any doubt, should your employment with the Company end prior to such date for any reason or for no reason, whether initiated by the Company or you, you will not earn or be paid any portion of this bonus. In order to be eligible to earn this stay bonus you must also execute and return the enclosed Terms of Employment Agreement on or near the Start Date.  Such amount will be paid in a lump sum on the third anniversary of the Start Date (or the first business day thereafter).        7. Car Allowance.   You will receive a monthly car allowance of $750 in accordance with the Company’s policy and procedures, subject to modification from time to time in the discretion of the Company.     8. Paid Time Off.  You will continue to accrue paid vacation days under TBEI’s policy at the rate of 1.67 vacation days per month worked, up to a maximum of 20 vacation days in a calendar year for your use in that same year of accrual.  The Company encourages you to use all your vacation days. You will continue to be eligible for holidays and personal days consistent with TBEI’s policies, as the same may be modified from time to time.  The foregoing paid time off may be modified from time to time in the discretion of the Company. Unused vacation days at the end of a calendar year are forfeited, do not carry-over, and are not compensable.   9. Benefits.  Subject to the terms of the applicable benefit plan documents, you will continue to be eligible to participate in TBEI’s existing group health and welfare benefit programs. Your participation in these programs will be at cost to you equal to the rates in effect for other active employees, with no subsidy or reimbursement.  TBEI’s current benefit plans will remain in effect for the remainder of 2017. Changes made in 2018 or thereafter, if any, will be communicated during the Company’s open enrollment period, which generally occurs in November.  You also remain eligible to participate in TBEI’s 401(k) plan and any applicable successor plans in accordance with plan terms.  All benefits plans may be discontinued or modified in the discretion of the Company.  10. Severance.  You are party to the Severance Agreement. The Severance Agreement provides for the payment of certain severance pay in the event of certain specified employment termination events on or prior to September 30, 2018.  On or near the Start Date, the Severance Agreement will be amended by mutual agreement per the amendment procedures contained therein to, among other things, extend the date of September 30, 2018 to the date three years after the Start Date.  Except as so amended by mutual agreement, the Severance Agreement shall remain in full force and effect in accordance with its terms.  During the three-year period described above, you are not eligible to participate in or receive any benefits under the Company’s Executive General Severance Plan, irrespective of whether the Severance Agreement is formally amended.       

 

Mr. Robert Fines May 4, 2017 Page 5 of 6  11. Policies and Procedures.  You shall be subject to the Company’s Standard Practices and Procedures and its policies, including but not limited to its Stock Ownership Guidelines for Executives and Directors and its Insider Trading Policy (copies enclosed), as the same may be modified, amended, discontinued, and/or introduced from time to time in the discretion of the Company.  12. At-Will Employment.  This offer is for at-will employment.  This means that either you or the Company may choose to end the employment relationship at any time with or without cause, for any lawful reason or for no reason. This offer is not, nor shall it be construed to be, a guarantee or promise of employment for any specified duration.   This offer of employment, together with the grant of bonus and equity and cash incentive opportunities, and other consideration herein provided, is expressly conditioned upon you signing and adhering to the enclosed Terms of Employment Agreement and Non-Competition, Non-Solicitation, & Confidentiality Agreement, both of which include post-employment restrictions and obligations owed by you to the Company.   By signing this Agreement, you acknowledge and agree that the terms and conditions of your existing contracts and other compensation and benefit arrangements and opportunities with Target and TBEI are superseded, null, and void, unless otherwise stated herein as continuing in effect.  You further agree to the amendment of the Severance Agreement, which continues in full force and effect except as to be amended as set forth herein.    Bob, we hope you will accept this offer and we look forward to you joining our team. To accept this offer, please return this signed offer letter and the Terms of Employment Agreement to me on or before May 6, 2017. If not accepted by you on or before that date, this offer shall be considered withdrawn.    If you have any questions about this offer, please call me at 630-954-2007.  Best regards,        /s/ Shirley S. Paulson Director, Compensation and Benefits  Enclosures: Terms of Employment Agreement, Non-Competition, Non-Solicitation & Confidentiality Agreement, Stock Ownership Guidelines for Executives and Directors, Insider Trading Policy    Acceptance: I accept the offer of at-will employment and the other terms set forth above.  I further represent and warrant that there were no promises or guarantees made to me that are not contained in this offer letter.           /s/ Robert Fines                                 ____May 5, 2017_______________________ Signature      Date  

 

Mr. Robert Fines May 4, 2017 Page 6 of 6       *** As amended by the Performance Share Unit Award Agreement dated July 25, 2017 ***ex1042017nqsoawardagt

NQSO US 1/2017   EXHIBIT 10.4   _____ ___, 201__ Federal Signal Corporation  2015 Executive Incentive Compensation Plan Nonqualified Stock Option Award Agreement  You have been selected to receive this Nonqualified Stock Option Award (“Award”) pursuant to the Federal Signal Corporation 2015 Executive Incentive Compensation Plan (the “Plan”), as specified below:  Participant:  Date of Grant:  Date of Expiration:    Number of Option Shares:   Exercise Price:  Vesting Schedule:  Options shall vest at the times and in the amounts set forth below:   ___ on __/__/20__ ___ on __/__/20__ ___ on __/__/20__ [3-year ratable]    This Award is subject to the terms and conditions prescribed in the Plan and in the Federal Signal Corporation Nonqualified Stock Option Award Agreement No. 2017 attached hereto and incorporated herein. Together, this Award and the attached award agreement shall be referred to throughout each as the “Award Agreement.”      IN WITNESS WHEREOF, the parties have caused this Award Agreement to be executed as of the Date of Grant.  PARTICIPANT:  FEDERAL SIGNAL CORPORATION    By:   Print Name  Chief Executive Officer         Signature         Address  Participant agrees to execute this Award Agreement and return one copy to Mike Basili at Federal Signal Corporation, 1415 W. 22nd Street, Suite 1100, Oak Brook, IL 60523 within 45 days of the above date or forfeit the stock option award.  Note:  If there are any discrepancies in the name or address shown above, please make the appropriate corrections on this form.  

 

 NQSO US 1/2017 2  This document constitutes part of the prospectus covering securities that have been registered under the Securities Act of 1933, as amended.  FEDERAL SIGNAL CORPORATION NONQUALIFIED STOCK OPTION AWARD AGREEMENT NO. 2017  This Award Agreement, which includes the attached cover page, effective as of the Date of Grant, represents the grant of nonqualified stock options (the “Options”) by the Company to the Participant named in this Award Agreement, pursuant to the provisions of the Plan. The Company established the Plan pursuant to which, among other things, options, stock appreciation rights, restricted stock and stock units, stock bonus awards, dividend equivalents and/or performance compensation awards may be granted to eligible persons. The Plan and this Award Agreement provide 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 Board of Directors and the Committee have determined that the interests of the Company will be advanced by encouraging and enabling certain of its employees to own shares of the Stock and that Participant 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.  Certain Definitions  As used in this Award Agreement, the following terms shall have the following meanings: A. “Affiliate” means with respect to any Person, any other Person (other than an individual) that controls, is controlled by, or is under common control with such Person. The term “control,” as used in this Award Agreement, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. “Controlled” and “controlling” have meanings correlative to the foregoing.  B. “Board of Directors” means the board of directors of the Company.  C. “Code” means the Internal Revenue Code of 1986, as amended.  D. “Committee” means the Compensation and Benefits Committee of the Board of Directors or a subcommittee or other committee appointed to administer the Plan in accordance with the Plan.  E. “Company” means Federal Signal Corporation, a Delaware corporation.  F. “Date of Expiration” means the date set forth on this Award Agreement.  G. “Date of Grant” means the date set forth on this Award Agreement.  H. “Disability” shall have the meaning ascribed to that term in the Company’s long-term disability plan applicable to Participant, or if no such plan exists, at the discretion of the Committee and as determined by the Committee.  I. “Exercise Price” means the exercise price set forth on this Award Agreement.  J. “Fair Market Value” shall have the meaning set forth in the Plan.   K. “Option” means the Company’s nonqualified stock options. 

 

 NQSO US 1/2017 3   L. “Participant” means the individual shown as the recipient of an award of Options, as set forth on this Award Agreement.  M. “Person” means a “person” as such term is used for purposes of 13(d) or 14(d), or any successor section thereto, of the Securities Exchange Act of 1934, as amended, and any successor thereto.  N. “Stock” means the common stock of the Company. Section 2.  Grant of Stock Options The Company hereby grants to Participant Options to purchase the number of shares of Stock (“Shares”) set forth in this Award Agreement, at the stated Exercise Price, which is equal to one hundred percent (100%) of the closing market value of a share of Stock 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 12, each Option shall be exercisable into one Share. This grant of Options shall not confer any right to Participant (or any other participant) to be granted Options or other awards in the future under the Plan.  Section 3.  Exercise of Stock Options Except as hereinafter provided, Participant may exercise Options held by Participant at any time after the Date of Grant, provided that any such Options have vested according to the vesting schedule set forth in this Award Agreement, and provided that no exercise may occur subsequent to the close of business on the Date of Expiration. Vested Options held by Participant may be exercised in whole or in part, but not for fewer 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. To the extent that the Fair Market Value of a share of Stock exceeds the Exercise Price on the trading day immediately preceding the Date of Expiration  (the “Automatic Exercise Date”), the Company shall have the right and authority in its sole discretion to provide that any vested but unexercised Options that have not been forfeited or otherwise cancelled in accordance with the terms of this Award Agreement will be exercised automatically on Participant’s behalf on the Automatic Exercise Date using a “net exercise” method (described in Section 13 of this Award Agreement).  Such automatic exercise shall only occur if, after withholding from the delivery of the Shares the number of Shares having a Fair Market Value equal to the aggregate Exercise Price and applicable taxes, Participant will net at least one Share. Participant at all times remains responsible for all taxes associated with any such automatic exercise, notwithstanding any withholding of Shares by the Company for taxes. Participant may elect not to have these Options automatically exercised as contemplated herein by giving written notice to the Company not less than 10 days prior to the Automatic Exercise Date. Notwithstanding the foregoing, there is no guarantee that such an automatic exercise will be effected on Participant’s behalf and neither the Company nor any other party will bear any responsibility or liability if such an automatic exercise is not effected and instead, these Options expire unexercised. Accordingly, Participant bears sole responsibility for ensuring that he or she exercises any vested Options prior to the expiration thereof. By accepting these Options, Participant agrees to the automatic exercise of these Options on the terms hereof.  In its discretion, the Company may determine to cease automatically exercising options, including these Options, at any time without notice, responsibility or liability to the Participant or otherwise.   Section 4.  Option Period/Limitations on Exercise Except as set otherwise set forth in this Award Agreement, 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 if not exercised prior to that date). Participant may sell the Shares acquired via these Options at any time, subject to Company policy on insider trading and stockholding requirements. Section 5.  Termination of Employment by Death In the event the employment of 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 the Date of Expiration, or for one year after the date of death, whichever period is shorter, by 

 

 NQSO US 1/2017 4  such person or persons as shall have been named as Participant’s beneficiary(ies), or by such persons that have acquired Participant’s rights under the Options by will or by the laws of descent and distribution. Section 6.  Termination of Employment by Disability In the event the employment of 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 the Date of Expiration, or for one year after the date that the Committee determines the definition of Disability to have been satisfied, whichever period is shorter. Section 7.  Termination of Employment by Retirement In the event the employment of Participant is terminated by reason of Participant’s retirement on terms and conditions authorized in writing by the Committee, the Committee may exercise its discretion at or near  Participant’s retirement date to provide that some or 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 the Date of Expiration, or for five years after the date of retirement, whichever period is shorter. In exercising its discretion under this Section 7, the Committee shall consider whether Participant: (A) remained employed in good standing with the Company through Participant’s retirement date; (B) provided reasonable written notice to the Company of Participant’s intention to retire of no less than 12 weeks; (C) materially breached any statutory, contractual, or common law duties owed to Company or any material Company policy, including but not limited to post-employment non-competition, non-solicitation and confidentiality obligations; and (D) failed in good faith to provide to and perform for Company all reasonably requested duties and responsibilities in connection with the transition of Participant’s duties and responsibilities. In exercising its discretion, the Committee shall also consider: (1) the financial status of the Company; (2) Company performance; (3) Company stock performance; and (4) where appropriate, input from Company management. In the event the Committee does not so exercise its discretion, Participant’s termination of employment by reason of retirement shall be considered a termination of employment for other reasons and Section 8 of this Award Agreement shall govern.  Section 8.  Termination of Employment for Other Reasons If the employment of Participant shall terminate for any reason other than the reasons set forth in Sections 5, 6 or 7 herein, all previously vested Options shall remain exercisable for a period of three months from the effective date of termination. For the avoidance of doubt, termination of employment on account of a Divestiture of a Business Segment shall result in any vested Options remaining exercisable for a period of three months from the Divestiture Date. Any Options not yet vested as of the date of termination (after first taking into account the accelerated vesting provisions of Sections 5, 6, 7, and 10) shall be forfeited. The transfer of employment of Participant between the Company and any Affiliate (or between Affiliates) shall not be deemed a termination of employment for purposes of this Award Agreement.  For the avoidance of doubt, in instances involving the termination of Participant’s employment, the reason for the termination of Participant’s employment (i.e., death, Disability, retirement, for other reasons, or Divestiture of Business Segment) shall control the vesting and exercising implications. For example, Participant’s death or Disability following Participant’s termination of employment by reason of retirement shall not impact the vesting or exercising of Options which shall continue to be governed by Section 7.  Section 9.  Change-in-Control In the event Participant is employed by the Company or its Affiliates on a date when a Change-in-Control occurs, Participant’s right to exercise these Options shall become immediately fully vested as of the date of the Change-In-Control, and shall remain exercisable until the Date of Expiration; unless such right of exercisability is terminated early pursuant to Sections 5 through 8 of this Award Agreement.     Section 10.  Acceleration of Vesting of Options in the Event of Divestiture of Business Segment If the “Business Segment” (as that term is defined in this Section) in which Participant is primarily employed as of the “Divestiture Date” (as that term is defined in this Section) is the subject of a “Divestiture of a Business Segment” (as that term is defined in this Section), and such divestiture results in the termination of Participant’s employment with the Company and its Affiliates for any reason, Participant shall immediately vest in any Options subject to this Award Agreement that have not previously vested and any such Options shall become immediately exercisable as of the Divestiture Date. In accordance with Section 8 above, any Options for which 

 

 NQSO US 1/2017 5  vesting is accelerated under this Section 10, and any Options that have vested prior to the Divestiture Date, shall remain exercisable for a period of three months from the Divestiture Date. For purposes of this Award Agreement, the term “Business Segment” shall mean a business line which the Company treats as a separate operating segment under the segment reporting rules under U.S. generally accepted accounting principles, which currently includes the following: Safety and Security Systems Group and Environmental Solutions 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 Award 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 Affiliates to “Nonaffiliated Persons” (as that term is defined in this Section) of one hundred percent (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, one hundred percent (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.  For purposes of this Award 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.  Section 11.  Restrictions on Transfer Unless determined otherwise by the Committee pursuant to the terms of the Plan, these Options may not be sold, transferred, alienated, assigned, pledged, encumbered or otherwise hypothecated, other than by will or by the laws of descent and distribution. Further, these Options shall be exercisable during Participant’s lifetime only by Participant or Participant’s legal representative. Section 12.  Adjustment in Certain Events If there is any change in the Stock  by reason of stock dividends or other distribution (whether in the form of securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off, combination, repurchase or exchange of Shares or other securities of the Company, or other similar corporate transaction or event, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, the Committee may, in its sole discretion, make such adjustments to these Options that it deems necessary or appropriate and as it may deem equitable in Participant’s rights. Section 13.  Method of Exercise and Form of Payment Options that have become exercisable may be exercised by delivery of timely written notice to the Company at its executive offices, addressed to the attention of the Company’s Corporate Secretary. Such notice: (A) shall be signed by 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 (or promise to pay, as applicable) in full of the Exercise Price of the Shares to be purchased (along with an amount equal to any federal, state, local, and non-U.S. income and employment taxes required to be withheld).  

 

 NQSO US 1/2017 6  The Exercise Price shall be payable: (a) in cash, check, cash equivalent and/or shares of Stock valued at the Fair Market Value at the time the Option is exercised (including, pursuant to procedures approved by the Committee, by means of attestation of ownership of a sufficient number of shares of Stock in lieu of actual delivery of such shares to the Company); or (b) by such other method as the Committee may permit in its sole discretion, including without limitation: (i) in other property having a fair market value on the date of exercise equal to the Exercise Price, (ii) if there is a public market for the shares of Stock at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company is delivered a copy of irrevocable instructions to a stockbroker to sell the Shares otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price, or (iii) by a “net exercise” method whereby the Company withholds from the delivery of the Shares for which the Option was exercised that number of Shares having a Fair Market Value equal to the aggregate Exercise Price for the Shares for which the Option was exercised. Any fractional Shares shall be settled in cash.  The Company shall deliver to Participant evidence of book entry Shares, or upon 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 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 null and void.   Section 14.  Beneficiary Designation Participant may designate a beneficiary or beneficiaries (contingently or successively) to receive any benefits that may be payable under this Award Agreement in the event of Participant’s death and, from time to time, may change his or her designated beneficiary (a “Beneficiary”). A Beneficiary may be a trust. A Beneficiary designation shall be made in writing in a form prescribed by the Company and delivered to the Company while Participant is alive. Section 15.  Stockholder Rights 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 Exercise Price has been paid, and the Shares have been issued and delivered to Participant. Section 16.  Tax Withholding   The Company shall have the power and the right to deduct or withhold, or require Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including Participant’s FICA obligation), domestic or foreign, required by law to be withheld with respect to any exercise of Participant’s rights under this Award Agreement.  Further, the Company can withhold amounts for federal, state, local or foreign income or employment taxes in accordance with any tax withholding policy that may be adopted by the Company and is in effect from time to time with respect to equity awards under the Plan irrespective of whether the amounts to be withheld exceed the lowest tax withholding amount that could be determined for the grantee under another tax withholding method.   Participant may elect, subject to any procedural rules adopted by the Committee, to satisfy the applicable withholding tax 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 applicable withholding tax requirement. Section 17. Section 409A  This Award Agreement shall be construed consistent with the intention that it be exempt from Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”) as a stock right. However, notwithstanding any other provision of the Plan or this Award Agreement, if at any time the Committee determines that this Award (or any portion thereof) may be subject to Section 409A, the Committee shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other person for failure to do so) to adopt such amendments to the Plan or this Award Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Committee determines are necessary or appropriate either for this Award to be exempt from the application of Section 409A or to comply with the requirements of Section 409A. 

 

 NQSO US 1/2017 7  Section 18.  Continuation of Employment This Award Agreement shall not confer upon Participant any right to continuation of employment by the Company or its Affiliates, nor shall this Award Agreement interfere in any way with the Company’s or its Affiliates’ right to terminate Participant’s employment at any time. Section 19.  Entire Award; Amendment This Award Agreement and the Plan constitute the entire agreement between the parties with respect to the terms and supersede all prior 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.  Section 20.  Severability In the event any one or more of the provisions of this Award Agreement shall be held invalid, illegal or unenforceable in any respect in any jurisdiction, such provision or provisions shall be automatically deemed amended, but only to the extent necessary to render such provision or provisions valid, legal and enforceable in such jurisdiction, and the validity, legality and enforceability of the remaining provisions of this Award Agreement shall not in any way be affected or impaired thereby. Section 21.  Miscellaneous A. This Award Agreement and the rights of 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 Participant. B. The Committee may terminate, amend, or modify the Plan; provided, however, that no such termination, amendment, or modification of the Plan may materially and adversely affect Participant’s rights under this Award Agreement, without the written consent of Participant. C. 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. D. 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. E. This Award (including any proceeds, gains or other economic benefit actually or constructively received by Participant upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award) shall be subject to the provisions of any clawback policy currently or subsequently implemented by the Company to the extent set forth in such policy.  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 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, without giving effect to principles of conflict of law.    

 

 NQSO US 1/2017 8  FEDERAL SIGNAL CORPORATION NONQUALIFIED STOCK OPTION AWARD BENEFICIARY DESIGNATION  Participant:   Social Security No.:    Address:   Date of Birth:        Participant hereby designates the following individual(s) or entity(ies) as his or her beneficiary(ies) pursuant to the Federal Signal Corporation 2015 Executive Incentive Compensation Plan (Insert Name, Social Security Number, Relationship, Date of Birth and Address of Individuals and/or fully identify any trust beneficiary by the Name of the Trust, Date of Execution of the Trust, the Trustee’s Name, the address of the trust, and the employer identification number of the trust):  Primary Beneficiary(ies)     Contingent Beneficiary(ies)       Participant hereby reserves the right to change this Beneficiary Designation, and any such change shall be effective when the Participant has executed a new or amended Beneficiary Designation form, and the receipt of such form has been acknowledged by the Company, all in such manner as specified by the Company from time to time, or on a future date specified by any such new or amended Beneficiary Designation form.   IN WITNESS WHEREAS, the parties have executed this Beneficiary Designation on the date designated below.  Date:    ,                  Signature of Participant  Received:        FEDERAL SIGNAL CORPORATION   Date:    ,    By:

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