Securities and Exchange Commission
Washington, D.C. 20549
----------------------------------
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, 2003
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 the plan and address of the plan 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
plan and the address of its principal executive office)
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
INDEX TO FORM 11-K
Page
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE AS OF AND FOR
THE YEAR ENDED DECEMBER 31, 2003
Independent Auditor's Report 3
Statement of Net Assets Available for Benefits as of December 31, 2003 4
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 2003 5
Notes to Financial Statements 6
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
as of December 31, 2003 11
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2002
AND 2001 AND DECEMBER 30, 2001 AND FOR THE YEAR ENDED DECEMBER 31, 2002,
THE ONE DAY ENDED DECEMBER 31, 2001 AND THE YEAR ENDED DECEMBER 30, 2001
Independent Auditor's Report 13
Statement of Net Assets Available for Benefits as of December 31, 2002 and
2001 and December 30, 2001 14
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 2002, One Day Ended December 31, 2001, and Year Ended
December 30, 2001 15
Notes to Financial Statements 16
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
as of December 31, 2002 21
SIGNATURES 22
EXHIBIT INDEX 23
- 1 -
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULE
AS OF AND FOR
THE YEAR ENDED DECEMBER 31, 2003
- 2 -
INDEPENDENT AUDITOR'S REPORT
To the Administrative Committee
FEDERAL SIGNAL CORPORATION 401(K) RETIREMENT PLAN
We have audited the accompanying statement of net assets available for benefits
of the Federal Signal Corporation 401(k) Retirement Plan (the "Plan") as of
December 31, 2003, and the related statement of changes in net assets available
for benefits for the year then ended. 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 audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). 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 audit provides 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, 2003, and the changes in its net assets available for benefits for
the year then ended in conformity with U.S. generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements, but is required by the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. This supplemental schedule is the responsibility of
the Plan's management. The supplemental schedule has been subjected to the
auditing procedures applied in the audit 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.
/s/ MAYER HOFFMAN McCANN P.C.
Chicago, Illinois
June 4, 2004
- 3 -
FEDERAL SIGNAL CORPORATION 401(K) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2003
ASSETS
Investments, at fair value:
Vanguard Wellington Fund $ 17,987,510
Vanguard Explorer Fund 11,441,509
Vanguard 500 Index Fund 38,330,719
Vanguard PRIMECAP Fund 38,107,437
Vanguard Retirement Savings Trust 49,952,265
Federal Signal Corporation common stock 30,874,864
Vanguard International Growth Fund 1,680,037
Vanguard Total Bond Market Index Fund 4,220,422
------------
192,594,763
Participants' loans receivable 4,808,339
------------
197,403,102
------------
Receivables:
Employer contributions 4,072,580
Participants' contributions 845,914
------------
4,918,494
------------
NET ASSETS AVAILABLE FOR BENEFITS $202,321,596
============
See Notes to Financial Statements
- 4 -
FEDERAL SIGNAL CORPORATION 401(K) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 2003
ADDITIONS
Additions to net assets attributed to:
Net appreciation in fair value of investments $ 23,166,798
Transfer of assets from plan mergers 3,631,651
Interest and dividends 5,120,157
------------
31,918,606
------------
Contributions:
Employer 5,144,079
Participants 11,733,827
------------
16,877,906
------------
TOTAL ADDITIONS 48,796,512
------------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants (20,234,308)
Administrative expenses (16,788)
------------
TOTAL DEDUCTIONS (20,251,096)
------------
NET INCREASE 28,545,416
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 173,776,180
------------
NET ASSETS AVAILABLE FOR
BENEFITS - END OF YEAR $202,321,596
============
See Notes to Financial Statements
- 5 -
FEDERAL SIGNAL CORPORATION 401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF PLAN
The following description of the Federal Signal Corporation 401(k)
Retirement Plan (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 employees of Federal Signal Corporation (the "Company"). Employees are
eligible on the first day of the calendar quarter after completing three
months of service. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"). On January 1, 2002, the
Plan sponsor adopted the Vanguard Qualified Retirement Plan and Trust
Defined Contribution Basic Plan Document 01 (the "Prototype Plan"). The
Plan is sponsored by the Company.
CONTRIBUTIONS - 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 April 1, 2003,
the Company suspended its contributions for the ClappDico division
employees.
The Plan provides for 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 Plan 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 pension 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 and Victor Products divisions, who are
immediately vested in the Company's discretionary pension contribution.
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.
- 6 -
FEDERAL SIGNAL CORPORATION 401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF PLAN (CONTINUED)
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. 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 LOANS - 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 (excluding employer contributions). 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, 2003, forfeited nonvested accounts
totaled $51,201. These accounts are used to reduce future employer
contributions. Also, during the year ended December 31, 2003, employer
contributions were reduced by $34,601 from forfeited nonvested accounts.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared
under the accrual method 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.
INVESTMENT VALUATION AND INCOME RECOGNITION - Shares of mutual funds are
valued at quoted market prices which represent the net asset value of
shares held by the Plan at year end. Values for the Company's common stock
are based on the December 31, 2003, closing price.
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.
- 7 -
FEDERAL SIGNAL CORPORATION 401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PAYMENT OF BENEFITS - Benefits are recorded when paid.
FEES - Investment advisory fees for portfolio management of Vanguard funds
are paid directly from fund earnings. Purchase fees, if applicable, are
paid by the participants investing in those funds which are subject to
such fees.
(3) 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
$144,359 were paid during the year ended December 31, 2003, 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,
2003.
(4) PLAN MERGERS
Allied Tool Products, Inc. is a wholly owned subsidiary of the Company and
the sponsor of the Allied Tool Products, Inc. Profit Sharing & 401(k)
Plan (the "Allied Plan"). On August 1, 2003, the Allied Plan was merged
into the Plan. On August 28, 2003, the assets of the Allied Plan were
transferred into the Plan's trust. On the date of the transfer, the net
assets of the Allied Plan were valued at $536,391.
PCS Company is a wholly owned subsidiary of the Company and the sponsor of
the PCS Company 401(k) Plan (the "PCS Plan"). On August 1, 2003, the PCS
Plan was merged into the Plan. On August 27, 2003, the assets of the PCS
Plan were transferred into the Plan's trust. On the date of the transfer,
the net assets of the PCS Plan were valued at $1,320,637.
Leach Company is a wholly owned subsidiary of the Company and the sponsor
of the Leach Company 401(k) Plan (the "Leach Plan"). On August 1, 2003,
the Leach Plan was merged into the Plan. On August 15, 2003, the assets of
the Leach Plan were transferred into the Plan's trust. On the date of the
transfer, the net assets of the Leach Plan were valued at $1,774,623.
(5) TAX STATUS
The Internal Revenue Service ("IRS") issued a favorable opinion letter
dated August 22, 2001, for the Prototype Plan, which was adopted by the
Plan sponsor on January 1, 2002. The IRS letter states that the Prototype
Plan is 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.
- 8 -
FEDERAL SIGNAL CORPORATION 401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
(6) PLAN TERMINATION
Although it has not expressed any intent to do so, 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 would become 100% vested in their accounts.
- 9 -
SUPPLEMENTAL SCHEDULE
- 10 -
FEDERAL SIGNAL CORPORATION 401(K) RETIREMENT PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2003
EIN: 36-1063330
Plan Number: 003
(a) (b) (c) (d) (e)
Description
of investments
including maturity
date, rate of interest,
Identity of issue, borrower, collateral, par or Current
lessor, or similar party maturity value Cost value
----- --------------------------------------- ----------------------------------- -------------- ------------
* Vanguard Wellington Fund Registered Investment Company $ 16,889,400 $ 17,987,510
* Vanguard Explorer Fund Registered Investment Company 10,218,647 11,441,509
* Vanguard 500 Index Fund Registered Investment Company 32,404,756 38,330,719
* Vanguard PRIMECAP Fund Registered Investment Company 32,982,310 38,107,437
* Vanguard Retirement Savings Trust Common/Collective Trust 49,952,265 49,952,265
* Federal Signal Corporation common stock Common Stock 32,355,555 30,874,864
* Vanguard International Growth Fund Registered Investment Company 1,673,404 1,680,037
* Vanguard Total Bond Market Index Fund Registered Investment Company 4,182,936 4,220,422
* Participants' loans receivable Interest at Rates from 5.25% to 10.5% - 4,808,339
-------------- ------------
$ 180,659,273 $197,403,102
============== ============
* Party-in-interest as defined by ERISA
- 11 -
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULE
AS OF
DECEMBER 31, 2002 AND 2001
AND DECEMBER 30, 2001
AND FOR
THE YEAR ENDED DECEMBER 31, 2002,
THE ONE DAY ENDED DECEMBER 31, 2001
AND THE YEAR ENDED DECEMBER 30, 2001
- 12 -
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 the standards of the Public Company
Accounting Oversight Board (United States). 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.
/s/PHILIP ROOTBERG & COMPANY, LLP
Chicago, Illinois
June 6, 2003
- 13 -
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------------------------------------------------------
DECEMBER 31, DECEMBER 30,
-------------------------------- -------------
2002 2001 2001
---------------------------------------------------------------------------------------------------------
ASSETS
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
- 14 -
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
- 15 -
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.
- 16 -
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
DECEMBER 31, 2002 AND 2001, AND DECEMBER 30, 2001
--------------------------------------------------------------------------------
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.
- 17 -
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
DECEMBER 31, 2002 AND 2001, AND DECEMBER 30, 2001
--------------------------------------------------------------------------------
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.
- 18 -
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
DECEMBER 31, 2002 AND 2001, AND DECEMBER 30, 2001
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5 - PLAN MERGER
The Company purchased 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.
- 19 -
SUPPLEMENTAL SCHEDULE
- 20 -
FEDERAL SIGNAL CORPORATION 401(K) RETIREMENT PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD
FOR INVESTMENT PURPOSES
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DECEMBER 31, 2002
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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.
- 21 -
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.
June 28, 2004 FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
By: /s/ Robert D. Welding
----------------------------------
Robert D. Welding
Plan Administrative Committee
By: /s/ Jennifer L. Sherman
----------------------------------
Jennifer L. Sherman
Plan Administrative Committee
By: /s/ Paul J. Wittig
----------------------------------
Paul J. Wittig
Plan Administrative Committee
-22-
EXHIBIT INDEX
Exhibit
No. Description
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23.1 Consent of Independent Auditors
23.2 Consent of Independent Auditors
-23-