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, 1996
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 60521
--------------------------------
(Name of issuer of the securities held pursuant to the
plans and the address of its principal executive office)
<PAGE>
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 30, 1996 AND 1995
<PAGE>
CONTENTS
Page
Independent Auditor's Report 1
Statement of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Schedules:
1 - Line 27a - Schedule of Assets Held for Investment Purposes 8
2 - Line 27d - Schedule of Reportable Transactions 9
<PAGE>
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 30, 1996 and
1995, and the related statement of changes in net assets available for benefits
for the year ended December 30, 1996. 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 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 at
December 30, 1996 and 1995, and the changes in net assets available for benefits
for the year ended December 30, 1996, in conformity with generally accepted
accounting principles.
Our audit of the 1996 financial statements was made for the purpose of forming
an opinion on the basic financial statements taken as a whole. The accompanying
supplemental schedules are presented for the purposes of additional analysis and
are not a required part of the basic financial statements but are 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 schedules have been subjected to the auditing procedures
applied in the audit of the 1996 basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the 1996 basic
financial statements taken as a whole.
PHILIP ROOTBERG & COMPANY, LLP
Chicago, Illinois
May 21, 1997
1
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
- --------------------------------------------------------------------------------
December 30, 1996 1995
- --------------------------------------------------------------------------------
Assets
Contributions receivable from
Federal Signal Corporation $ 2,811,029 $ 1,858,051
Contribution receivable from
participants 629,866 552,580
Dividends and interest receivable 326,365 154,657
At contract value:
Investment contracts
at guaranteed rates from 5.62% to 6.93% 460,059 723,309
At fair value:
Vanguard Wellington Fund 6,190,654 3,952,754
Vanguard Explorer Fund 2,036,718 1,291,291
VMMR Prime Portfolio - 15,317
Vanguard Index 500 Portfolio 20,478,128 14,295,512
Vanguard Primecap Fund 8,985,825 5,960,819
Vanguard Investment Contract Trust 30,489,182 30,656,548
Federal Signal Corporation common stock 33,211,081 30,197,850
Participant Loan Fund 1,208,114 927,449
------------ -----------
Total Assets 106,827,021 90,586,137
Liability
Due to participants of Bassett Tool Division 630,400 -
------------ -----------
Net Assets Available for Benefits $ 106,196,621 $ 90,586,137
============ ===========
See accompanying notes to financial statements
2
<PAGE>
<TABLE>
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
- --------------------------------------------------------------------------------
<CAPTION>
Year Ended December 30, 1996
- --------------------------------------------------------------------------------
Vanguard
--------------------------------------------------------------------------
VMMR Investment
Investment Wellington Explorer Prime Index 500 Primecap Contract
Contracts Fund Fund Portfolio Portfolio Fund Trust
<S> <C> <C> <C> <C> <C> <C> <C>
Additions
Contributions from employer $ 443 $ 88,301 $ 42,119 $9,225 $ 221,616 $ 167,214 $ 507,747
Contributions from participants 735,647 369,407 - 1,717,852 1,134,490 2,318,785
Interest and dividends 34,507 460,641 119,035 568 423,667 263,117 1,779,348
Net appreciation in fair
value of investments - 419,000 87,982 - 3,466,465 1,109,682 -
------ --------- ------- ----- --------- --------- ---------
34,950 1,703,589 618,543 9,793 5,829,600 2,674,503 4,605,880
------ --------- ------- ----- --------- --------- ---------
Deductions
Withdrawals by participants (43,444) ( 317,690) (107,797) - ( 899,357) ( 232,791) (2,100,334)
Loans, net of repayments ( 7,068) ( 8,677) 792 - ( 65,171) 2,068 ( 108,396)
Transfer payable to participants of
Bassett Tool Division - - - - - - -
------ --------- ------- ------ -------- -------- --------
(50,512) ( 326,367) (107,005) - ( 964,528) ( 230,723) (2,208,730)
------ --------- ------- ------ -------- -------- ---------
Interfund Transfers (247,688) 860,678 233,889 (25,110) 1,317,544 581,226 (2,564,516)
------- --------- ------- ------ --------- -------- ---------
Net Additions (Deductions) (263,250) 2,237,900 745,427 (15,317) 6,182,616 3,025,006 ( 167,366)
Net Assets Available for Benefits -
Beginning of Year 723,309 3,952,754 1,291,291 15,317 14,295,512 5,960,819 30,656,548
------- --------- --------- ------ ---------- --------- ----------
Net Assets Available for Benefits -
End of Year $460,059 $6,190,654 $2,036,718 $ - $20,478,128 $8,985,825 $30,489,182
======= ========= ========= ====== ========== ========= ==========
(table continued)
Federal
Signal
Corporation Participant Other
Common Loan Receivables
Stock Fund (Payable) Total
<S> <C> <C> <C> <C>
Additions
Contributions from employer $1,803,463 $ - $ 77,286 $2,917,414
Contributions from participants 2,398,835 - 952,978 9,627,994
Interest and dividends 526,174 87,619 171,708 3,866,384
Net appreciation in fair
value of investments 199,406 - - 5,282,535
--------- -------- --------- ----------
4,927,878 87,619 1,201,972 21,694,327
--------- -------- --------- ----------
Deductions
Withdrawals by participants (1,665,944) ( 86,086) - (5,453,443)
Loans, net of repayments ( 92,680) 279,132 - -
Transfer payable to participants of
Bassett Tool Division - - ( 630,400) ( 630,400)
--------- --------- --------- ----------
(1,758,624) 193,046 ( 630,400) (6,083,843)
--------- --------- ---------- ----------
Interfund Transfers ( 156,023) - - -
--------- --------- ---------- ----------
Net Additions (Deductions) 3,013,231 280,665 571,572 15,610,484
Net Assets Available for Benefits -
Beginning of Year 30,197,850 927,449 2,565,288 90,586,137
---------- --------- --------- ----------
Net Assets Available for Benefits -
End of Year $33,211,081 $1,208,114 $3,136,860 $106,196,621
========== ========= ========= ===========
See accompanying notes to financial statements
</TABLE>
3
<PAGE>
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
December 30, 1996 and 1995
- --------------------------------------------------------------------------------
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
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 - Values for securities are based on the quoted
net asset value (redemption value) of the respective investment company.
Investment contracts are carried at contract value, which approximates fair
value. Values for company stock funds are based on their unit 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
gains and losses from securities transactions are computed using the
average cost method based on the beginning market value. 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
Federal Signal Corporation ("Company") 401(k) Retirement Plan ("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.
Contributions - Each year, participants may 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. Participants may also
contribute 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 participant eligible months in Plan.
4
<PAGE>
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
December 30, 1996 and 1995
- --------------------------------------------------------------------------------
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 location. 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.
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 Federal Signal
common stock. Participants may change their investment by calling Vanguard.
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 over a
longer reasonable period as determined by the plan administrator. 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.
3 - Related Party Transactions
Substantially all assets of the Plan are held in trust by the Vanguard
Group, trustee for the Plan. Administrative and trustee fees in the amount
of $106,326 and $100,867 were paid during the years ended December 30, 1996
and 1995, respectively, from the Company and Plan assets.
The Plan has no reportable transactions with nonexempt parties-in-interest
as defined by the Department of Labor for the years ended December 30, 1996
and 1995.
5
<PAGE>
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
December 30, 1996 and 1995
- --------------------------------------------------------------------------------
4 - Plan Mergers
On January 1, 1995, the Vactor Manufacturing Company 401(k) Plan was merged
into the Plan. The transferred net assets have been recognized in the
accounts of the Plan as of January 1, 1995, at their balances as previously
carried in the accounts of the Vactor Manufacturing Company 401(k) Plan.
The changes in net assets of the combined plans are included in the
accompanying statement of changes in net assets available for benefits from
January 1, 1995. A summary of the transferred net assets follows:
Investments, at fair value $2,545,110
On April 28, 1995, the Guzzler Manufacturing Company 401(k) Plan merged
into the Plan. The transferred net assets have been recognized in the
accounts of the Plan as of April 28, 1995, at their balances as previously
carried in the accounts of the Guzzler Manufacturing Company 401(k) Plan.
The changes in net assets of the combined plans are included in the
accompanying statement of changes in net assets available for benefits from
April 28, 1995. A summary of the transferred net assets follows:
Investments, at fair value $ 439,621
On December 30, 1995, the Elgin Sweeper Company Employee Stock Ownership
Plan was merged into the Plan. The transferred net assets have been
recognized in the accounts of the Plan as of December 30, 1995, at their
balances as previously carried in the accounts of the Elgin Sweeper Company
Employee Stock Ownership Plan. The changes in net assets of the combined
plans are included in the accompanying statement of changes in net assets
available for benefits from December 30, 1995. A summary of the transferred
net assets follows:
Investments, at fair value $3,731,279
On December 27, 1996, the Company sold its Bassett Tool Division to an
unrelated entity. Participant accounts were not transferred to the new
sponsor until May 6, 1997. The statements of net assets available for
benefits and changes in net assets available for benefits reflect the fair
value at December 30, 1996, of the assets transferred of $630,400.
5 - Income Tax Status
The Internal Revenue Service ("IRS") has ruled that the Vanguard Prototype
401(k) Savings Plan which was adopted by the plan sponsor qualifies under
Sections 401(a) and 501(a) of the Internal Revenue Code ("IRC") by a letter
dated September 7, 1994. The IRS has determined and informed the Company by
a letter dated July 31, 1996, that the Plan and related trust are designed
in accordance with applicable sections of the IRC.
6
<PAGE>
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
December 30, 1996 and 1995
- --------------------------------------------------------------------------------
6 - Subsequent Events
The Company purchased Victor Products USA, Inc. in 1996. The Victor
Products USA, Inc. Profit Sharing Plan, which consisted of ten
participants and net assets of $183,304, was merged into the Plan on
December 31, 1996.
7
<PAGE>
<TABLE>
401(K) RETIREMENT PLAN Schedule 1
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
- --------------------------------------------------------------------------------
December 30, 1996
- --------------------------------------------------------------------------------
EIN: 36-1063330
PN: 004
<CAPTION>
(e)
(a) (b) (c) (d) Current
Identity of Issue Description of Investment Cost Value
<S> <C> <C> <C> <C>
New England Life Unallocated Insurance Contracts (1) $ 460,059 $ 460,059
* Vanguard Investment
Contract Trust Common/Collective Trust 30,489,182 30,489,182
* Vanguard Explorer Fund Registered Investment Company 1,900,164 2,036,718
* Vanguard Primecap Fund Registered Investment Company 7,104,052 8,985,825
* Vanguard Wellington Fund Registered Investment Company 5,304,334 6,190,654
* Vanguard Index 500 Portfolio Registered Investment Company 14,212,704 20,478,128
* Federal Signal Stock Company Stock Fund 22,626,786 33,211,081
* Participant Loan Fund Interest at rates from 6% to 10.25% - 1,208,114
---------- -----------
Total $82,097,281 $103,059,761
========== ===========
(1) Guaranteed rates are 5.62% and 5.91%, maturity dates are September 30,
1997, and September 30, 1998.
</TABLE>
8
<PAGE>
<TABLE>
FEDERAL SIGNAL CORPORATION Schedule 2
401(K) RETIREMENT PLAN
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
EIN: 36-1063330
PN: 004
<CAPTION>
(h)
Current
(a) (b) (c) (d) (g) Value of Asset (i)
Identity of Description Purchase Selling Cost of on Transaction Net Gain
Party Involved of Asset Price Price Asset Date (Loss)
- ------------------ --------------------------- ------------ ------------- ----------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Vanguard Group Federal Signal Stock $ 6,199,652 $ - $ 6,199,652 $ 6,199,652 $ -
Vanguard Group Federal Signal Stock - 3,385,826 2,542,241 3,385,826 843,585
Vanguard Group Vanguard Index 500 Portfolio 4,533,874 - 4,533,874 4,533,874 -
Vanguard Group Vanguard Index 500 Portfolio - 1,817,724 1,402,984 1,817,724 414,740
Vanguard Group Vanguard Investment Contract
Trust 5,911,778 - 5,911,778 5,911,778 -
Vanguard Group Vanguard Investment Contract
Trust - 6,076,074 6,076,074 6,076,074 -
</TABLE>
9
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation, by reference, in the Registration Statement
(Form S-8 filed December 28, 1990, and its amendments) to our reports on the
latest annual reports with respect to the financial statements and schedules of
the Federal Signal Corporation 401(K) Retirement Plan included in the Annual
Report (Form 11-K) for the year ended December 30, 1996.
Chicago, Illinois
June 13, 1997
PHILIP ROOTBERG & COMPANY, LLP
