Exhibit 10V
RELEASE AND SEVERANCE AGREEMENT
This
Release and Severance Agreement (the “Agreement”) will
confirm the understanding of Federal Signal Corporation and Robert
D. Welding (with his heirs, beneficiaries, executors,
administrators, attorneys, successors and assigns, collectively
referred to herein as “Employee”) in connection with
Employee’s retirement from employment and resignation from
all directorships and other positions with Federal Signal
Corporation and any of its subsidiaries, benefit plans or trusts
associated with such benefit plans (collectively referred to herein
as the “Company”). The Company and Employee have
reached agreement upon the following arrangements.
The
effective date of Employee’s retirement from employment with
the Company will be January 1, 2008 (the “Retirement
Date”). As of the close of business on the Retirement Date,
Employee retired from and ceased his employment with the Company.
In addition, as of the close of business on December 11, 2007,
Employee resigned from all of his officer, director or other
positions (except as an employee) with the Company. The Company
agrees to treat such retirement as a termination by the Company
without “Cause” for purposes of the payment of cash
severance benefits (the “Severance Benefits”) under the
Company’s Executive General Severance Plan dated
November 2006 (the “Severance Plan”).
As a
termination by the Company without “Cause” under the
Severance Plan, the Company agrees to pay Employee the following
Severance Benefits pursuant to such plan: (1) the sum of
$1,270,395, which is an amount equal to the sum of (i) the
Employee’s current Base Salary for 2008 ( i.e. ,
$686,700), and (ii) the Employee’s target annual bonus
for 2008 ( i.e. , 85% of Base Salary, or $583,695); and
(2) the sum of $1,599, which is an amount equal to
Employee’s unpaid prorated target annual bonus for 2008,
prorated by computing a fraction, the numerator of which is the
number of days during 2008 through the Retirement Date that
Employee was employed by the Company and the denominator of which
is 365; in each case, less any applicable taxes including
federal, state or local employment withholding taxes that are
payable in connection with this amount. In accordance with IRS Code
provision 409A final regulations, this amount will be paid to
Employee as follows: (y) a one-time initial payment of
$636,000 (less applicable withholding taxes), payable on
July 2, 2008, and (z) six monthly payments of $106,000 (less
applicable withholding taxes) each on the Company’s last
regular payroll date of each month commencing in July 2008 and
continuing through December 2008.
Employee
understands that as a condition of receiving these Severance
Benefits under the Severance Plan, Employee is required to sign the
general waiver and release in the form included in this Agreement.
No Severance Benefits will be paid to Employee until the release
contained herein becomes irrevocable in accordance with its terms.
Employee further understands that any accrued but unused vacation
pay or other earned but unpaid wages due to Employee will be paid
separately with appropriate withholding taxes withheld and the
receipt of such vacation pay or wages is in no way contingent upon
Employee signing this Agreement. Nothing herein shall change or
have an effect on any wages, pension, retirement or other employee
benefits Employee may be entitled to under any Company retirement
or benefit program. Any monies owed the Company by Employee may be
deducted from the monies and the Severance Benefits, in accordance
with applicable law. The Severance Benefits shall not be considered
or counted as “compensation” for purposes of any of the
Company’s welfare or pension benefit plans which provide
benefits based, in any part, on compensation
As
further Severance Benefits, the Company also agrees to continue any
applicable welfare benefits of medical insurance, dental insurance
and group term life insurance that Employee receives for 18 months
following the Retirement Date, at the same premium cost and the
same coverage level as were in effect for Employee as of the
Retirement Date, pursuant to the terms of the Consolidated Omnibus
Budget Reconciliation Act of 1986 (COBRA). Employee must complete
all necessary paperwork within the prescribed time period in order
to receive this benefit. Employee shall make monthly COBRA
premium
payments
in advance and shall send them to the Federal Signal Corporation
office in Oak Brook, Illinois. If Employee fails to make such COBRA
payments, Employee’s COBRA coverage will be cancelled.
However, during the eighteen (18) months the Company continues
the welfare benefits, in the event the premium cost and/or level of
coverage shall change for all employees of the Company, the cost
and/or coverage level, likewise, shall change in a corresponding
manner for Employee. In addition, these welfare benefits shall be
discontinued prior to the end of the period described above if
Employee becomes covered under another group health plan, Employee
becomes entitled to Medicare benefits (under Part A,
Part B, or both), or the Company ceases to provide any group
health plan for its employees. Continuation may also be terminated
for any reason that the terms of the plan providing such coverage
would terminate coverage of a participant or an eligible
dependent.
The
Company makes this Agreement to avoid the cost of defending any
possible lawsuit. Employee acknowledges that by making this
Agreement the Company does not admit that it has done anything
wrong. Because this Agreement contains a release of claims under
the Age Discrimination in Employment Act (ADEA), Employee
understands that he has a period of twenty-one (21) days to
review and consider this Agreement before signing it. He may use as
much of this 21-day period as he wishes in making his decision.
Employee further acknowledges that he may revoke the signed
Agreement within seven (7) days after its signing. Any such
revocation must be in writing and received by the Company’s
General Counsel in the legal department at the principal offices of
Federal Signal Corporation in Oak Brook, Illinois within the seven
(7) day period. Payment of the Severance Benefits described
above will only begin after this Agreement becomes binding which
takes place when the revocation period runs out seven days
(7) after the date of Employee’s signature.
Employee
is strongly encouraged to consult with an attorney before signing
this Agreement; however, whether he does so or not is his decision.
Employee acknowledges that he has been advised that he should be
represented by an attorney throughout the negotiation of the terms
of this Agreement.
(1) General Release .
Employee hereby waives, releases and forever discharges the Company
and its subsidiaries, divisions and affiliates, whether direct or
indirect, its and their joint ventures and joint venturers
(including its and their respective directors, officers, employees,
shareholders, partners and agents, past, present and future), and
each of its and their respective successors and assigns
(hereinafter collectively referred to as “Releasees”),
from any and all known or unknown actions, causes of action, claims
or liabilities of any kind which have been or could be asserted
against the Releasees arising out of or related to Employee’s
employment with and/or retirement from his employment with the
Company and/or any of the other Releasees and/or any other
occurrence up to and including the date of this Agreement,
including but not limited to:
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(a) |
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claims, actions, causes of action or liabilities arising under
Title VII of the Civil Rights Act, as amended, the Civil Rights Act
of 1871, the Civil Rights Act of 1991, the ADEA, the COBRA, the
Employee Retirement Income Security Act, as amended, the
Rehabilitation Act, as amended, the Americans with Disabilities
Act, the Family and Medical Leave Act (to the extent permitted by
law), the Vietnam Era Veterans Readjustment Assistance Act, the
Sarbanes-Oxley Act of 2002 and/or any other federal, state,
municipal or local employment discrimination statutes (including,
but not limited to, claims based on age, sex, attainment of benefit
plan rights, race, religion, national origin, marital status,
sexual orientation, ancestry, harassment, parental status,
handicap, disability, retaliation and veteran status); and/or |
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(b) |
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claims, actions, causes of action or liabilities arising under
any other federal, state, municipal or local statute, law,
ordinance or regulation; and/or |
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(c) |
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any other claim whatsoever including, but not limited to,
claims for severance pay under any voluntary or involuntary
severance/separation plan, policy or program maintained by the
Releasees, claims for attorney’s fees, claims based upon
breach of contract, wrongful termination, defamation, intentional
infliction of emotional distress, tort, personal injury, invasion
of privacy, violation of public policy, negligence and/or any other
common law, statutory or other claim whatsoever arising out of or
relating to Employee’s employment with and/or retirement from
employment with the Company and/or any of the other Releasees; |
but
excluding claims which Employee may make under state workers’
compensation or unemployment laws, and/or any claims which by law
Employee cannot waive. Specifically excluded from this General
Release is Employee’s right to file a charge with an
administrative agency or participate in any agency investigation.
Employee is, however, waiving his right to recover money in
connection with such a charge or investigation. Employee is also
waiving his right to recover money in connection with a charge
filed by any other individual or by the Equal Employment
Opportunity Commission or any other federal or state agency.
(2) Covenant Not To Sue
. In addition to and apart from the General Release contained in
paragraph (1) above, Employee also agrees never
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