Securities and Exchange Commission
Washington, D.C. 20549
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Form 11-K
[x] Annual Report Pursuant to Section 15 (d) of the Securities Exchange Act
of 1934
For the fiscal year ended December 31, 2002
OR
[ ] Transition Report Pursuant to Section 15 (d) of the Securities Exchange
Act of 1934
Commission file number 1-6003
Federal Signal Corporation 401(K) Retirement Plan (Full
title of plans and address of plans if different from that of the issuer
named below)
Federal Signal Corporation
1415 West 22nd Street, Suite 1100
Oak Brook, Illinois 60523
--------------------------------
(Name of issuer of the securities held pursuant to the
plans and the address of its principal executive office)
Required Information
--------------------
Item 4
In lieu of the financial statements required by Items 1-3, the Plan is
submitting financial statements prepared in accordance with the financial
reporting requirements of ERISA for the years ended December 31, 2002 and
2001 and December 30, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrative Committee has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date: June 30, 2003 FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
By: /s/ Joseph J. Ross
---------------------
Joseph J. Ross
Plan Administrative Committee
By: /s/ Kim A. Wehrenberg
---------------------
Kim A Wehrenberg
Plan Administrative Committee
By: /s/ Paul J. Wittig
---------------------
Paul J. Wittig
Plan Administrative Committee
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001,
AND DECEMBER 30, 2001
CONTENTS
Page
Independent Auditor's Report 1
Statement of Net Assets Available for Benefits,
December 31, 2002 and 2001, and December 30, 2001 2
Statement of Changes in Net Assets Available for Benefits,
Year Ended December 31, 2002, One Day Ended December 31,
2001, and Year Ended December 30, 2001 3
Notes to Financial Statements,
December 31, 2002 and 2001, and December 30, 2001 4
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets Held
for Investment Purposes, December 31, 2002 9
INDEPENDENT AUDITOR'S REPORT
Plan Administrator
Federal Signal Corporation
401(k) Retirement Plan
We have audited the accompanying statement of net assets available for benefits
of Federal Signal Corporation 401(k) Retirement Plan as of December 31, 2002 and
2001, and December 30, 2001, and the related statement of changes in net assets
available for the benefits for the year ended December 31, 2002, the one day
ended December 31, 2001, and the year ended December 30, 2001. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2002 and 2001, and December 30, 2001, and the changes in net assets
available for benefits for the year ended December 31, 2002, the one day ended
December 31, 2001, and the year ended December 30, 2001, in conformity with U.S.
generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes at year end is presented for the purposes of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
PHILIP ROOTBERG & COMPANY, LLP
Chicago, Illinois
June 6, 2003
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, December 30,
Assets 2002 2001 2001
----------- ----------- -----------
Contributions receivable from:
Federal Signal Corporation $ 4,471,714 $ 4,227,198 $ 4,227,198
Participants 803,498 810,813 810,813
Dividends and interest receivable - - 497,036
Investments at fair value:
Vanguard Wellington Fund 14,483,522 14,791,764 14,840,620
Vanguard Explorer Fund 7,229,626 8,805,379 8,888,227
Vanguard Index 500 Portfolio 31,163,151 40,100,536 40,509,419
Vanguard Primecap Fund 28,008,881 37,497,010 37,872,908
Vanguard Retirement Savings Trust 49,537,397 44,955,583 44,742,395
Federal Signal Corporation common stock 28,672,576 32,432,843 33,127,416
Vanguard International Growth Fund 921,972 1,046,317 1,040,741
Vanguard Total Bond Market Index Fund 3,687,088 1,760,428 1,746,012
Participant Loan Fund 4,796,755 4,997,564 4,973,494
----------- ----------- -----------
Net Assets Available for Benefits $173,776,180 $191,425,435 $193,276,279
=========== =========== ===========
See accompanying notes to financial statements
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended One Day Ended Year Ended
December 31, December 31, December 30,
2002 2001 2001
----------- ----------- ----------
Additions
Contributions from employer $ 5,631,913 $ - $ 5,484,759
Contributions from participants 11,809,228 - 12,022,512
Transfer of assets from plan mergers - - 446,006
Interest and dividends 4,932,726 6,852 6,184,099
Net realized and unrealized gains
(losses) in fair value of investments:
Mutual funds (23,083,082) (1,201,292) (12,033,025)
Common stock (3,685,323) ( 654,690) 4,854,474
---------- --------- ----------
(4,394,538) (1,849,130) 16,958,825
---------- --------- ----------
Deductions
Withdrawals by participants (13,235,795) ( 1,714) (11,166,019)
Other ( 18,922) - ( 20,990)
----------- ---------- -----------
(13,254,717) ( 1,714) (11,187,009)
----------- ---------- -----------
Net Additions (Deductions) (17,649,255) (1,850,844) 5,771,816
Net Assets Available for Benefits -
Beginning of Period 191,425,435 193,276,279 187,504,463
----------- ----------- -----------
Net Assets Available for Benefits -
End of Period $173,776,180 $191,425,435 $193,276,279
=========== =========== ===========
See accompanying notes to financial statements
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001, and December 30, 2001
1 - Significant Accounting Policies
Basis of Accounting - The accompanying financial statements are prepared on
the accrual basis of accounting.
Estimates - The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires the plan administrator to
make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
Valuation of Investments - Shares of registered investment companies are
valued at quoted market prices which represent the net asset value of shares
held by the Federal Signal Corporation 401(k) Retirement Plan ("Plan").
Values for Federal Signal Corporation ("Company") common stock are based on
the December 31, 2002 and 2001,and December 30, 2001, closing prices.
Accounting Method - Security transactions are accounted for on the date
securities are purchased or sold (trade date). Dividend income is recorded
on the ex-dividend date. Interest income is recognized when earned. Net
realized and unrealized appreciation is recorded in the accompanying
financial statements as net realized and unrealized gains (losses) in fair
value of investments. Contributions are recognized based on payroll dates
and accrued if applicable.
Fees - Investment advisory fees for portfolio management of Vanguard Funds
are paid directly from fund earnings and will not reduce assets of the Plan.
Purchase fees, if applicable, are paid by the participants investing in
those funds which are subject to such fees.
2 - Description of Plan
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
General - The Plan is a defined contribution plan covering a majority of the
Company's employees who have three months of service. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
On April 1, 1994, the Plan sponsor adopted the Vanguard Prototype 401(k)
Savings Plan. On January 1, 2002, the Plan sponsor restated the Plan by
adopting the Vanguard Qualified Retirement Plan and Trust Defined
Contribution Basic Plan Document 01. The Plan is sponsored by the Company.
Contributions - In 2001, participants at most divisions were able to
contribute up to 15% of pretax annual compensation, as defined in the Plan,
and after-tax contributions of up to 6% of compensation, limited to a
maximum employer and employee contribution of 23% as defined in the Plan.
Commencing January 1, 2002, participants at most divisions can contribute up
to 40% of pretax annual compensation, as defined in the Plan, and after tax
contributions of up to 6%. Participants may also transfer amounts
representing distributions from other qualified defined benefit or
contribution plans. Company contributions are based on a percentage of
employee contributions or as a discretionary amount based on eligible
employee compensation and/or hours/months worked.
Effective June 1, 2002, the Plan was amended to add an employee stock
ownership feature wherein all employer contributions are invested in Company
stock. However, the participants are allowed to transfer their funds out of
Company stock at any time. The amendment also provides for the participants
to have the option of receiving Company stock dividends in cash instead of
having the dividends automatically reinvested in the Plan.
Participant Accounts - Each participant's account is credited with the
participant's contribution and allocations of (a) the Company's contribution
and (b) plan earnings and is charged with an allocation of investment
management fees and, for terminated employees, administrative expenses.
Allocations are based on participant earnings or account balances, as
defined. Forfeited balances of terminated participants' nonvested accounts
are used to reduce future Company contributions depending on the division.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
Vesting - Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the Company's matching and discretionary
contribution portion of their accounts plus actual earnings thereon is based
on years of continuous service. A participant is 100% vested after three
years of credited service, except for the participants from the Emergency
One division, who are immediately vested in the Company's discretionary
contribution. Commencing July 1, 2002, participants are immediately vested
in the dividends from Company stock that were paid to the Plan and
reinvested in Company stock at the participant's election.
Investment Options - Upon enrollment in the Plan, a participant may direct
employee contributions in 5% increments in a variety of investment choices
at Vanguard Fiduciary Trust Company ("Vanguard") including the Company's
common stock. Participants may change their investment by calling Vanguard.
Commencing July 1, 2002, all Company contributions are invested in Company
stock. The participants have the option of transferring balances from
Company stock to other investment choices without restriction.
Participant Notes Receivable - Participants may borrow from their own
contributions a minimum of $1,000 up to a maximum equal to the lesser of
$50,000 or 50% of their account balance. Loan transactions are treated as a
transfer to (from) the investment fund from (to) the participant loan fund.
Loans are required to be repaid within five years, with the exception that a
loan which is used to acquire a principal residence may be repaid within ten
years. The loans are secured by the balance in the participant's account and
bear interest at a rate of prime plus one percent. Principal and interest
are paid ratably through payroll deductions.
Payment of Benefits - Participants are eligible to receive the vested
portion of their plan account upon retirement, termination of employment, or
total and permanent disability. Payment will generally be made in a lump
sum.
Forfeited Accounts - As of December 31, 2002 and 2001, and December 30,
2001, forfeited nonvested accounts totaled $39,308, $42,889 and $43,322,
respectively. These accounts are used to reduce future employer
contributions. Also, during the years ended December 31, 2002 and December
30, 2001, employer contributions were reduced by $42,889 and $38,062,
respectively, from forfeited nonvested accounts.
3 - Non-Participant-Directed Investments
In accordance with the adoption of Statement of Position 99-3, "Accounting
for and Reporting of Certain Defined Contribution Plan Investments and Other
Disclosure Matters," the following information about net assets and the
significant components of changes in net assets available for benefits
relating to non-participant-directed investments is being disclosed:
December 31, December 30,
2002 2001 2001
Net Assets: ---------- ---------- ----------
Contribution receivable from
Federal Signal Corporation $ - $1,917,434 $1,917,434
Dividend receivable - - 82,126
Federal Signal Corporation
common stock - 9,943,315 10,062,109
---------- ---------- ----------
$ - $11,860,749 $12,061,669
========= ========== ==========
One Day
Year Ended Ended Year Ended
December 31, December 31, December 30,
2002 2001 2001
----------- ----------- -----------
Changes in Net Assets:
Contributions from employer $ 213,192 $ - $ 2,637,013
Interest and dividends 89,178 - 244,012
Net realized and unrealized
gains (losses) 510,981 ( 200,920) 1,422,373
Withdrawals by participants ( 877,033) - (1,022,056)
Reclassified to participant-
directed investments (11,797,067) - (1,381,451)
---------- --------- ---------
Net Additions (Deductions) $(11,860,749) $( 200,920) $ 1,899,891
========== ========= =========
4 - Related Party Transactions
Substantially all assets of the Plan are held in trust by Vanguard, trustee
for the Plan. Administrative and trustee fees in the amount of $167,743 and
$103,810, respectively, were paid during the years ended December 31, 2002
and December 30, 2001, by the Company.
The Plan has no reportable transactions with nonexempt parties-in-interest
as defined by the Department of Labor for the year ended December 31, 2002,
the one day ended December 31, 2001, and the year ended December 30, 2001.
5 - Plan Merger
The Company purchased the Dico Corporation in 1994 and, as a result of the
acquisition, the Dico Corporation 401(k) Plan ("Dico Plan") was effectively
merged into the Plan on December 31, 1994. The Dico Plan assets consisted of
insurance contracts that expired in 2001 and participant loans. Nationwide
Insurance Company administered the insurance contracts, participant loans
and participant accounts through October 16, 2001, at which time the assets
were transferred to the Plan's trust. On the date of the transfer, the net
assets of the Dico Plan were valued at $446,006.
6 - Income Tax Status
The Internal Revenue Service ("IRS") issued a favorable opinion letter dated
September 7, 1994, for the Vanguard Prototype 401(k) Savings Plan, which was
adopted by the Plan sponsor on April 1, 1994. The IRS issued a favorable
opinion letter dated August 22, 2001, for the Vanguard Qualified Retirement
Plan and Trust Defined Contribution Basic Plan Document 01, which was
adopted by the Plan sponsor on January 1, 2002. The IRS letters state that
the prototype plans are acceptable under the applicable sections of the
Internal Revenue Code ("IRC"). The IRS issued favorable determination
letters dated July 31, 1996, and April 1, 2003, which state that the Plan
and related trust are designed in accordance with applicable sections of the
IRC.
7 - Plan Termination
The Company has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan subject to the provisions of ERISA. In
the event of Plan termination, participants will become 100% vested in their
accounts. The Company has not expressed any intent to terminate the Plan.
However, effective April 1, 2003, the Company has discontinued the Company
contributions for the ClappDico division employees.
SUPPLEMENTAL SCHEDULE
FEDERAL SIGNAL CORPORATION 401(K) RETIREMENT PLAN Schedule 1
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD
FOR INVESTMENT PURPOSES
December 31, 2002
EIN: 36-1063330
PN: 003
(c) (e)
(b) Description of (d) Current
(a) Identity of Issue Investment Cost Value
--- ----------------- ---------------------- ---------- ----------
* Vanguard Wellington Fund Registered Investment Company $ 16,082,240 $ 14,483,522
* Vanguard Explorer Fund Registered Investment Company 9,434,994 7,229,626
* Vanguard Index 500 Portfolio Registered Investment Company 33,180,526 31,163,151
* Vanguard Primecap Fund Registered Investment Company 33,562,089 28,008,881
* Vanguard Retirement
Savings Trust Common/Collective Trust 49,537,397 49,537,397
* Federal Signal Corporation
Common Stock Common Stock 29,516,008 28,672,576
* Vanguard International
Growth Fund Registered Investment Company 1,358,528 921,972
* Vanguard Total Bond
Market Index Fund Registered Investment Company 3,597,555 3,687,088
* Participant Loan Fund Interest at Rates From 5.25% to 10.5% - 4,796,755
* A party-in-interest as defined by ERISA.