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, 1998
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, 1998 and 1997
Contents
Page
Independent Auditor's Report 1
Statement of Net Assets Available for Benefits,
December 30, 1998 and 1997 2
Statement of Changes in Net Assets Available for
Benefits, With Fund Information,
Year Ended December 30, 1998 3
Notes to Financial Statements, December 30, 1998 and 1997 5
Schedules:
1 - Line 27a - Schedule of Assets Held for Investment
Purposes, December 30, 1998 9
2 - Line 27d - Schedule of Reportable Transactions,
Year Ended December 30, 1998 10
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, 1998 and
1997, and the related statement of changes in net assets available for benefits,
with fund information, for the year ended December 30, 1998. 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, 1998 and 1997, and the changes in net assets available for benefits
for the year ended December 30, 1998, 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
of assets held for investment purposes and reportable transactions 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
June 21, 1999
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
- --------------------------------------------------------------------------------
December 30, 1998 1997
- --------------------------------------------------------------------------------
Assets
Contributions receivable from:
Federal Signal Corporation $3,319,716 $ 2,917,893
Participants 863,542 727,984
Dividends and interest receivable 382,904 357,535
Investment at contract value:
Investment contract at guaranteed rate of 5.62% - 184,219
Investments at fair value:
Vanguard Wellington Fund 11,723,077 8,318,922
Vanguard Explorer Fund 3,358,123 2,817,886
Vanguard Index 500 Portfolio 41,456,256 30,670,319
Vanguard Primecap Fund 22,922,159 16,466,048
Vanguard Retirement Savings Trust 37,375,188 30,502,270
Federal Signal Corporation common stock 32,570,471 28,064,641
Participant Loan Fund 4,366,085 1,601,897
----------- -----------
Net Assets Available for Benefits $158,337,521 $122,629,614
=========== ===========
See accompanying notes to financial statements
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS, WITH FUND INFORMATION
- ---------------------------------------------------------------------------------------------------------------
Year Ended December 30, 1998
- ---------------------------------------------------------------------------------------------------------------
Participant Directed
Federal
Vanguard Signal
Vanguard Vanguard Vanguard Vanguard Vanguard Retirement Corporation Partic.
Investment Wellington Explorer Index 500 Primecap Savings Common Loan Other
Contracts Fund Fund Portfolio Fund Trust Stock Fund Receivables
Additions
Contributions from employer $ - $ 149,312 $ 70,986 $ 403,603 $ 323,152 $ 524,177 $ 238,303 $ - $(1,050,423)
Contributions from partic. - 1,123,158 548,514 2,982,466 2,103,646 2,092,823 1,514,308 - 135,558
Transfer of assets from plan
mergers - 1,004,141 126,226 1,037,506 525,959 1,874,285 97,005 41,039 -
Interest and dividends 8,768 1,266,302 31,234 631,465 872,361 1,976,273 393,043 255,818 10,025
Net appreciation (diminution)
in fair value of investments - ( 109,964) 19,013 8,473,413 3,584,495 - 2,532,350 - -
------ --------- ------- ---------- ---------- ---------- ---------- ------- ----------
8,768 3,432,949 795,973 13,528,453 7,409,613 6,467,558 4,775,009 296,857 ( 904,840)
------ --------- ------- ---------- ---------- ---------- ---------- ------- ----------
Deductions
Withdrawals by participants ( 403) ( 403,736) (173,450)( 1,448,383) ( 820,747) (2,775,127) ( 646,936) (199,877) -
Loans, net of repayments ( 2,705) ( 156,475) ( 63,017)( 1,023,668) ( 441,830) (644,726) ( 335,800) 2,668,221 -
Other - ( 1,027) ( 268)( 1,174) ( 1,010) ( 4,190) 11,333 ( 1,013) -
------- --------- ------- ---------- --------- --------- -------- -------- --------
( 3,108) ( 561,238) (236,735)( 2,473,225) (1,263,587) (3,424,043) ( 971,403) 2,467,331 -
------- --------- ------- ---------- --------- --------- --------- -------- --------
Interfund Transfers (189,879) 532,444 ( 19,001)( 269,291) 310,085 3,829,403 (3,892,405) - -
------- --------- ------- ---------- --------- --------- --------- -------- -------
Net Additions (Deductions) (184,219) 3,404,155 540,237 10,785,937 6,456,111 6,872,918 ( 88,799) 2,764,188 ( 904,840)
Net Assets Available for
Benefits - Beginning 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
------- --------- --------- ---------- --------- --------- --------- -------- --------
Net Assets Available for
Benefits - End of Year $ - $11,723,077 $3,358,123 $41,456,256 $22,922,159 $37,375,188 $13,675,562 $4,366,085 $3,074,278
------- --------- --------- ---------- --------- --------- --------- -------- --------
See accompanying notes to financial statements
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS, WITH FUND INFORMATION - Continued
- -------------------------------------------------------------------------------
Year Ended December 30, 1998
- -------------------------------------------------------------------------------
Non-Participant Directed
-----------------------------------------------
Federal
Signal
Corporation
Common
Stock Receivables Total
----------- ----------- ---------
Additions
Contributions from employer $2,250,669 $1,452,247 $ 4,362,026
Contributions from participants - - 10,500,473
Transfer of assets from plan mergers - - 4,706,161
Interest and dividends 477,408 15,343 5,938,040
Net appreciation (diminution)
in fair value of investments 3,221,989 - 17,721,296
---------- --------- ----------
5,950,066 1,467,590 43,227,996
---------- --------- ----------
Deductions
Withdrawals by participants (1,041,877) - (7,510,536)
Loans, net of repayments - - -
Other ( 12,204) - ( 9,553)
---------- --------- ---------
(1,054,081) - (7,520,089)
---------- --------- ---------
Interfund Transfers ( 301,356) - -
---------- --------- ---------
Net Additions (Deductions) 4,594,629 1,467,590 35,707,907
Net Assets Available for Benefits -
Beginning of Year 14,300,280 24,294 122,629,614
---------- --------- -----------
End of Year $18,894,909 $1,491,884 $158,337,521
========== ========== ===========
FEDERAL SIGNAL CORPORATION
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
December 30, 1998 and 1997
- -------------------------------------------------------------------------------
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 Federal Signal Corporation common stock are based on the
December 30, 1998 and 1997, 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 of year 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. The Plan is sponsored by the Company.
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 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 participant eligible months 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 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, 1998, forfeited nonvested accounts
totaled $36,737. These accounts are used to reduce future employer
contributions. Also, in 1998, employer contributions were reduced by $32,794
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 $88,275 were paid during the year ended December 30, 1998, 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 year ended December 30, 1998.
4 - Mergers
Effective February 27, 1998, the Technical Tooling, Inc. Retirement Savings
Plan was merged into the Plan. The transferred net assets have been
recognized in the accounts of the Plan as of February 27, 1998, as
previously carried in the accounts of the Technical Tooling, Inc. Retirement
Savings 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 February 27, 1998, and are included in the net assets
available for benefits as of December 30, 1998. The fair value of
transferred investments was $1,976,645 at February 27, 1998.
Effective September 30, 1998, the Saulsbury Fire Equipment Corp. Retirement
Plan and Trust was merged into the Plan. The transferred net assets have
been recognized in the accounts of the Plan as of September 30, 1998, as
previously carried in the accounts of the Saulsbury Fire Equipment Corp.
Retirement Plan and Trust. The changes in net assets of the combined plans
are included in the accompanying statement of changes in net assets
available for benefits from September 30, 1998, and are included in the net
assets available for benefits as of December 30, 1998. The fair value of
transferred investments was $2,729,516 at September 30, 1998.
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 - Subsequent Event
Effective December 31, 1998, the Jetstream of Houston, Inc. Profit Sharing
Plan and Trust was merged into the Plan. The transferred net assets have
been recognized in the accounts of the Plan as of December 31, 1998, as
previously carried in the accounts of the Jetstream of Houston, Inc. Profit
Sharing Plan and Trust. The fair value of transferred investments was
$791,822 at December 31, 1998.
FEDERAL SIGNAL CORPORATION Schedule 1
401(K) RETIREMENT PLAN
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
- ----------------------------------------------------------------------------------------------------------------
December 30, 1998
- ----------------------------------------------------------------------------------------------------------------
EIN: 36-1063330
PN: 004
(a)
Party-in- (e)
Interest (b) (c) (d) Current
Identification Identity of Issue Description of Investment Cost Value
- -------------- ----------------- ------------------------- ------------ ------------
* Vanguard Wellington
Fund Common/Collective Trust $ 10,758,443 $ 11,723,077
* Vanguard Explorer Fund Registered Investment Company 3,248,460 3,358,123
* Vanguard Index 500 Portfolio Registered Investment Company 24,147,540 41,456,256
* Vanguard Primecap Fund Registered Investment Company 15,956,656 22,922,159
* Vanguard Retirement
Savings Trust Registered Investment Company 37,375,188 37,375,188
* Federal Signal Corporation
Common Stock Common Stock 23,582,714 32,570,471
* Participant Loan Fund Interest at Rates From 7% to 10.04% 4,366,085 4,366,085
----------- -----------
Total $119,435,086 $153,771,359
=========== ===========
* Party-in-interest as defined by ERISA
FEDERAL SIGNAL CORPORATION Schedule 2
401(K) RETIREMENT PLAN
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
- -----------------------------------------------------------------------------------------------
Year Ended December 30, 1998
- -----------------------------------------------------------------------------------------------
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 Corporation
Common Stock $ 6,955,723 $ - $ - $ 6,955,723 $ -
Vanguard Group Federal Signal Corporation
Common Stock - 8,204,231 7,296,842 8,204,231 907,389
Vanguard Group Vanguard Index 500 Portfolio 12,162,038 - - 12,162,038 -
Vanguard Group Vanguard Index 500 Portfolio - 9,849,515 7,410,929 9,849,515 2,438,586
Vanguard Group Vanguard Retirement
Savings Trust 17,763,075 - - 17,763,075 -
Vanguard Group Vanguard Retirement
Savings Trust - 10,890,158 10,890,158 10,890,158 -
Vanguard Group Vanguard Primecap Fund 7,269,731 - - 7,269,731 -
Vanguard Group Vanguard Primecap Fund - 4,398,116 3,517,500 4,398,116 880,616
Vanguard Group Vanguard Wellington Fund 5,472,338 - - 5,472,338 -
Vanguard Group Vanguard Wellington Fund - 1,958,219 1,730,591 1,958,219 227,628
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, 1998.
PHILIP ROOTBERG & COMPANY, LLP
Chicago, Illinois
June 21, 1999