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, 1997
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)
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 30, 1997 AND 1996
CONTENTS
Page
Independent Auditor's Report 1
Statement of Net Assets Available for Benefits,
December 30, 1997 and 1996 2
Statement of Changes in Net Assets Available for Benefits, with Fund
Information,
for the Years Ended December 30, 1997 3
Notes to Financial Statements, December 30, 1997 and 1996 5
Schedules:
1 - Line 27a - Schedule of Assets Held for Investment Purposes,
December 30, 1997 8
2 - Line 27d - Schedule of Reportable Transactions,
December 30, 1997 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 30, 1997 and 1996, and the related statement of changes in net
assets available for benefits, with fund information, for the year ended
December 30, 1997. 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, 1997 and 1996, and the changes in net assets
available for benefits for the year ended December 30, 1997, in
conformity with 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 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 audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as
a whole.
PHILIP ROOTBERG & COMPANY, LLP
Chicago, Illinois
May 28, 1998
1
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
- -------------------------------------------------------------------------------
December 30, 1997 1996
- -------------------------------------------------------------------------------
Assets
Contributions receivable from:
Federal Signal Corporation $ 2,917,893 $2,811,029
Participants 727,984 629,866
Transfer of assets from Victor Products USA, Inc. 357,535 326,365
Investment at contract value:
Investment contract at guaranteed rate of 5.62% 184,219 460,059
Investments at fair value:
Vanguard Wellington Fund 8,318,922 6,190,654
Vanguard Explorer Fund 2,817,886 2,036,718
Vanguard Index 500 Portfolio 30,670,319 20,478,128
Vanguard Primecap Fund 16,466,048 8,985,825
Vanguard Retirement Savings Trust 30,502,270 30,489,182
Federal Signal Corporation common stock 28,064,641 33,211,081
Participant Loan Fund 1,601,897 1,208,114
---------- ---------
Total Assets 122,629,614 106,827,021
Liability
Due to participants of Bassett Tool Division - 630,400
---------- ---------
Net Assets Available for Benefits $122,629,614 $106,196,621
=========== ===========
See accompanying notes to financial statements
2
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS, WITH FUND INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------
Year Ended December 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------
Participant Directed
Federal
Vanguard Signal
Vanguard Vanguard Vanguard Vanguard Vanguard Retirement Corporation Partic. Other
Investment Wellington Explorer Index 500 Primecap Savings Common Loan Receivables
Contracts Fund Fund Portfolio Fund Trust Stock Fund (Payables)
Additions
Contributions from employer $ - $138,325 $ 65,513 $341,562 $254,726 $626,427 $ 304,960 $ - $ 96,568
Contributions from participants - 877,044 478,624 2,350,416 1,512,300 2,156,532 2,029,818 - 106,865
Transfer of assets from Victor
Products USA, Inc. - - - - - 183,304 - - -
Interest and dividends 19,729 702,578 293,066 623,852 588,247 1,859,262 450,443 111,371 8,425
Net appreciation (diminution)
in fair value of investment - 695,702 ( 5,311) 6,196,906 2,881,084 - (2,850,742) - -
----- ------- ------- -------- --------- --------- --------- ------ ------
19,729 2,413,649 831,892 9,512,736 5,236,357 4,825,525 ( 65,521) 111,371 211,858
----- --------- ------- -------- --------- --------- -------- ------- -------
Deductions
Withdrawals by participants (65,862) (822,904) (136,580) (1,446,481) (597,217) (1,968,707) ( 694,498) (69,842) -
Loans, net of repayments ( 125) ( 34,207) ( 19,824) (142,099) ( 24,073) ( 83,022) ( 70,550) 373,900 -
Transfer of assets to Bassett
Tool Division - ( 36,551) ( 10,841) (167,401) ( 11,573) (414,485) ( 71,258) (21,646) 630,400
Other - ( 544) ( 207) ( 1,314) ( 303) ( 3,935) ( 870) - -
------- -------- -------- ------- -------- ------- -------- ------ -------
(65,987) (894,206) (167,452) (1,757,295) (633,166) (2,470,149) (837,176) 282,412 630,400
------- -------- ------- --------- -------- -------- ------- ------- -------
Interfund Transfers (229,582) 608,825 116,728 2,436,750 2,877,032 (2,342,288) (3,320,851) - -
-------- -------- ------- --------- --------- --------- --------- ------ -------
Net Additions (Deductions) (275,840) 2,128,268 781,168 10,192,191 7,480,223 13,088 (4,223,548) 393,783 842,258
Net Assets Avail.for Benefits -
Beginning of Year 460,059 6,190,654 2,036,718 20,478,128 8,985,825 30,489,182 17,987,909 1,208,114 3,136,860
------- --------- --------- ---------- --------- ---------- ---------- --------- ---------
Net Assets Avail.for Benefits -
End of Year $184,219 $8,318,922 $2,817,886 $30,670,319 $16,466,048 $30,502,270 $13,764,361 $1,601,897 $3,979,118
======== ========= ========= ========== =========== =========== =========== ========== =========
See accompanying notes to financial statements
3
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION - Continued
- ------------------------------------------------------------------------------
Year Ended December 30, 1997
- ------------------------------------------------------------------------------
Non-Participant Directed
Federal
Signal
Corporation
Common Receivables
Stock (Payables) Total
Additions
Contributions from employer $2,035,058 $ 1,550 $3,864,689
Contributions from participants - - 9,511,599
Transfer of assets from Victor
Products USA, Inc. - - 183,304
Interest and dividends 365,508 22,744 5,045,225
Net appreciation (diminution)
in fair value of investments (2,268,741) - 4,648,898
--------- ------- ---------
131,825 24,294 23,253,715
------- ------- ----------
Deductions
Withdrawals by participants (907,676) - (6,709,767)
Loans, net of repayments - - -
Transfer of assets to Bassett
Tool Division - - ( 103,355)
Other ( 427) - ( 7,600)
---------- -------- ------------
(908,103) - (6,820,722)
------- ------- ---------
Interfund Transfers (146,614) - -
------- ------- ---------
Net Additions (Deductions) (922,892) 24,294 16,432,993
Net Assets Available for Benefits -
Beginning of Year 15,223,172 - 106,196,621
---------- ------- -----------
Net Assets Available for Benefits -
End of Year $14,300,280 $ 24,294 $122,629,614
========== ======= ===========
See accompanying notes to financial statements
4
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
December 30, 1997 and 1996
- -------------------------------------------------------------------------------
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.
5
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
December 30, 1997 and 1996
- -------------------------------------------------------------------------------
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.
Forfeited Accounts - At December 30, 1997, forfeited nonvested
accounts totaled $32,794. These accounts are used to reduce future
employer contributions. Also, in 1997, employer contributions were
reduced by $39,843 from forfeited nonvested accounts.
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 $111,560 and $106,326 were paid during the
years ended December 30, 1997 and 1996, 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, 1997 and 1996.
6
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
December 30, 1997 and 1996
- -------------------------------------------------------------------------------
4 - Mergers and Dispositions
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 liability of the fair value at December 30,
1996, of the assets transferred in 1997, of $630,400. The actual
amount transferred on May 6, 1997, including earnings to date, was
$733,755 and is reflected on the statement of changes in net assets
available for benefits for the year ended December 30, 1997.
On January 1, 1997, the Victor Products USA, Inc. Profit Sharing
Plan was merged into the Plan. The transferred net assets have been
recognized in the accounts of the Plan as of January 1, 1997, at
their balances as previously carried in the accounts of the Victor
Products USA, Inc. Profit Sharing 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, 1997.
The fair value of transferred investments was $183,304.
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 - 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 will become 100%
vested in their accounts.
7
FEDERAL SIGNAL CORPORATION Schedule 1
401(K) RETIREMENT PLAN
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
- -------------------------------------------------------------------------------
December 30, 1997
- -------------------------------------------------------------------------------
EIN: 36-1063330
PN: 004
(a)
Party-in- (e)
Interest (b) (c) (d) Current
Identification Identity of Issue Description of Investment Cost Value
* New England Life Unallocated Insurance Contracts (1) $ 184,219 $ 184,219
* Vanguard Retirement
Savings Trust Common/Collective Trust 30,502,270 30,502,270
* Vanguard Explorer Fund Registered Investment Company 2,735,126 2,817,886
* Vanguard Primecap Fund Registered Investment Company 12,195,153 16,466,048
* Vanguard Wellington Fund Registered Investment Company 7,016,095 8,318,922
* Vanguard Index 500 Portfolio Registered Investment Company 19,354,964 30,670,319
* Federal Signal Stock Company Stock Fund 23,914,599 28,064,641
* Participant Loan Fund Interest at rates from 7% to 10.04% - 1,601,897
---------- ----------
Total 95,902,426 $118,626,202
========== ===========
(1) Guaranteed rate is 5.62% and maturity date is September 30, 1998.
8
FEDERAL SIGNAL CORPORATION Schedule 2
401(K) RETIREMENT PLAN
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended December 30, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
EIN: 36-1063330
PN: 004
(h)
(g) Current
(a) (b) (c) (d) Historical Value of Asset (i)
Identity of Description Purchase Selling Cost of on Transaction Net Gain
Party Involved of Asset Price Price Asset Date (Loss)
- ------------------ -------------- ------------- ----------- -------------- -------------- ----------
Vanguard Group Federal Signal Stock $6,676,284 $ - $ - $6,676,284 $ -
Vanguard Group Federal Signal Stock - 6,703,212 5,419,444 6,703,212 1,283,768
Vanguard Group Vanguard Index 500 Portfolio 8,520,361 - - 8,520,361 -
Vanguard Group Vanguard Index 500 Portfolio - 4,525,051 3,399,284 4,525,051 1,125,767
Vanguard Group Vanguard Retirement
Savings Trust 9,018,751 - - 9,018,751 -
Vanguard Group Vanguard Retirement
Savings Trust - 9,005,660 9,005,660 9,005,660 -
Vanguard Group Vanguard Primecap Fund 6,723,474 - - 6,723,474 -
Vanguard Group Vanguard Primecap Fund - 2,124,308 1,634,639 2,124,308 489,669
9
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, 1997.
Chicago, Illinois
May 28, 1998
PHILIP ROOTBERG & COMPANY, LLP