UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
Under
the
Securities Exchange Act of 1934
(Amendment
No. _____)*
Federal
Signal Corporation
(Name
of
Issuer)
Common
Stock, $1.00 par value
(Title
of
Class of Securities)
313855108
(CUSIP
Number)
Warren
B.
Kanders
c/o
Kanders & Company, Inc.
One
Landmark Square, 22nd
Floor
Stamford,
CT
06901
Copy
to:
Robert
L.
Lawrence, Esq.
Kane
Kessler, P.C.
1350
Avenue of the Americas
New
York,
NY 10019
212-541-6222
(Name,
Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
June
24,
2008
(Date
of
Event which requires Filing of this Statement)
If
the
filing person has previously filed a statement on Schedule 13G to report the
acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box
____________________
* The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities,
and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed
to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(“Act”) or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the
Notes).
|
CUSIP
No. 313855108
|
13D
|
Page
2 of
9 Pages
|
| 1 | NAMES OF REPORTING PERSONS: |
||||||||||
|
Warren
B. Kanders
|
|||||||||||
| I.R.S. IDENTIFICATION NOS. OF ABOVE
PERSONS
(ENTITIES ONLY): |
|||||||||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER
OF A GROUP
(SEE INSTRUCTIONS): |
||||||||||
| (a) o | |||||||||||
| (b) o | |||||||||||
| 3 | SEC USE ONLY: | ||||||||||
| 4 | SOURCE OF FUNDS (SEE INSTRUCTIONS): | ||||||||||
| PF | |||||||||||
| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): | ||||||||||
| o | |||||||||||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION: | ||||||||||
| United States | |||||||||||
| 7 | SOLE VOTING POWER: | ||||||||||
| NUMBER OF |
2,755,954
|
||||||||||
| SHARES | 8 | SHARED VOTING POWER: | |||||||||
| BENEFICIALLY | |||||||||||
| OWNED BY | 0 | ||||||||||
| EACH | 9 | SOLE DISPOSITIVE POWER: | |||||||||
| REPORTING | |||||||||||
| PERSON |
2,755,954
|
||||||||||
| WITH | 10 | SHARED DISPOSITIVE POWER: | |||||||||
| 0 | |||||||||||
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: | ||||||||||
|
2,755,954
|
|||||||||||
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS): | ||||||||||
| o | |||||||||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): | ||||||||||
| 5.74% | |||||||||||
| 14 | TYPE OF REPORTING PERSON (SEE INSTRUCTIONS): | ||||||||||
| IN | |||||||||||
*SEE
INSTRUCTIONS BEFORE FILLING OUT!
|
CUSIP
No. 313855108
|
13D
|
Page 3
of
9 Pages
|
Item
1. Security and Issuer.
This
Schedule 13D (“Statement”) relates to the shares of common stock, par value
$1.00 per share (the “Common Stock”), of Federal Signal Corporation, a Delaware
corporation (the “Issuer”), whose principal executive offices are located at
1415 West 22nd
Street,
Oak Brook, Illinois 60523.
Item
2. Identity and Background.
(a),
(b),
(c) and (f). This Statement is filed by Warren B. Kanders (the “Reporting
Person”), a citizen of the United States of America. The business address of the
Reporting Person is c/o Kanders & Company, Inc., One Landmark Square, 22nd
Floor, Stamford, CT 06901. The Reporting Person is President of Kanders &
Company, Inc., a private investment firm owned and controlled by the Reporting
Person.
(d)
and
(e). During the last five years, the Reporting Person has not been (i) convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors)
or (ii) a party to a civil proceeding of a judicial or administrative body
of
competent jurisdiction and as a result of such proceeding was or is subject
to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Item
3. Source and Amount of Funds or Other Consideration.
The
securities reported in this Statement as beneficially owned by the Reporting
Person were acquired with approximately $33,562,260 of personal funds of the
Reporting Person.
Item
4. Purpose of Transaction.
The
Reporting Person acquired the shares of Common Stock for his own account, and
except as described below, for investment purposes. The Reporting Person has
maintained a long-standing interest in the business of the Issuer. The Reporting
Person purchased the shares based on the Reporting Person’s belief that the
shares of Common Stock were undervalued and offered the potential for price
appreciation. The Reporting Person believes that effective leadership could
reverse the Issuer’s significant negative rate of return over the five years
ending December 31, 2007 - a period when the Russell 2000 and the S & P
Mid Cap indices have more than doubled in value.
In
December 2007, the Issuer announced the resignation of Robert Welding as the
Issuer's CEO and President, and disclosed that the Issuer has formed a search
committee (the “Search Committee”), comprised of a group of directors of the
Board of the Issuer, to begin the search for a new CEO. In early 2008, the
Reporting Person was advised that the Issuer's investment banker has recommended
the Reporting Person to the Search Committee as a viable candidate for the
CEO
position. On April 24, 2008, the Reporting Person delivered a letter (the “April
24 Letter”) to the Issuer’s board of directors (the “Board”) in which the
Reporting Person formally submitted his candidacy to serve as the Issuer’s Chief
Executive Officer. In the April 24 Letter, the Reporting Person discussed his
qualifications for the CEO position. The Reporting Person explained that, as
former Chairman of the Board and CEO of Armor Holdings, Inc. (NYSE: AH), a
company which was sold to BAE Systems, plc in July 2007 for approximately $4.5
billion, he maintained an interest in the business of the Issuer for
approximately 10 years. In the April 24 Letter, the Reporting Person included
the following information regarding his success with Armor Holdings:
|
CUSIP
No. 313855108
|
13D
|
Page 4
of
9 Pages
|
“In
January 1996, I invested in Armor Holdings, Inc., then known as American Body
Armor and Equipment, Inc., a publicly traded company listed on the NASDAQ pink
sheets, at an average cost of $0.71 per share. The Company had just emerged
from
bankruptcy, and had approximately $12,000,000 in revenues and $1,000,000 in
EBITDA in 1995. Over the next eleven plus years, the Company grew, both
organically and through acquisitions, to a diversified global manufacturer
of
protective systems for the military, government, law enforcement agencies and
commercial customers. In that time, the Company completed over 30 acquisitions,
completed numerous bank financings and public offerings and private placements
of both debt and equity securities, and became listed first on the American
and
then on the New York Stock Exchanges. At the time of the Company’s sale to BAE
Systems, plc in July 2007, at an aggregate price of $4.5 billion, or $88 per
share, it had revenues of approximately $2.2 billion and EBITDA of approximately
$280 Million for fiscal 2006, with fiscal 2007 guidance of approximately $3.5
billion in revenues.”
In
the
April 24 Letter, the Reporting Person recognized that although the Issuer was
a
leader in a number of segments in which it operates, the Issuer must confront
many formidable challenges if it is to optimize its strengths and adequately
reward the faith of its stockholders, including the following
challenges:
|
-
|
reducing
the cyclicality of its product mix;
|
|
-
|
increasing
geographic diversification;
|
|
-
|
accelerating
technological innovation to maintain the Issuer’s cutting edge technology
so that it remains competitive;
|
|
-
|
adopting
creative incentive compensation plans to attract and retain quality
executives and key personnel;
|
|
-
|
minimizing
product liability exposure; and
|
|
-
|
recapitalizing
the Issuer's capital structure that restricts the Issuer’s ability to
raise capital.
|
In
the
April 24 Letter, the Reporting Person also briefly discussed how under the
right
leadership, the Issuer’s stockholder value could be propelled to levels not
previously attained.
A
copy of
the April 24 Letter is filed as Exhibit A hereto.
On
May
15, 2008, the Reporting Person met in Chicago with all of the members of the
Search Committee. On May 19, 2008, the Reporting Person delivered a letter
(the
“May 19 Letter”) to the Search Committee expressing his appreciation for the
opportunity to personally present his credentials. In the May 19 Letter, the
Reporting Person expressed his belief that it is good corporate governance
for a
CEO to hold a significant equity interest in the company that he or she manages,
so that the CEO’s interests are totally aligned with the interests of the other
stockholders. The Reporting Person explained that he had purchased approximately
4.9% of the Issuer’s outstanding Common Stock. The Reporting Person also
promised that, if selected as Chief Executive Officer, he would commit the
energy, time and efforts to optimize the Issuer’s strengths and improve value
for all the Issuer’s constituencies. A copy of the May 19 Letter is filed as
Exhibit B hereto.
In
mid-May 2008, the Reporting Person was advised by the Search Committee through
Mr. Gregory T. Carrott of Cavoure LP, the CEO search advisor and agent engaged
by the Issuer (“Cavoure”), that he and all other candidates were required to
submit to psychological tests administered by Psychological Associates. The
Reporting Person explained that as an executive with some public persona, he
was
of course sensitive to insuring that the results of such tests be scrupulously
confidential, and their use be limited solely for the purpose of evaluating
his
candidacy. Thereafter, the Reporting Person exchanged correspondence with
Cavoure regarding the conditions of confidentiality governing the results of
interviews and psychological testing. During the exchange, the Reporting Person
explained that his schedule for June was extremely tight but that he could
set
aside the day of June 10 to be available to complete the testing
program.
|
CUSIP
No. 313855108
|
13D
|
Page 5
of
9 Pages
|
By
letter
dated May 23, 2008 from the Reporting Person to Cavoure and letter dated May
30,
2008 by Cavoure to the Reporting Person, the Reporting Person and Cavoure,
as
agent on behalf of the Issuer, established the conditions of confidentiality
governing the test results and interviews in connection with the evaluation
and
selection of the Issuer’s Chief Executive Officer as a predicate to the
Reporting Person’s agreement to submit to the tests. In the May 30 letter,
Cavoure acknowledged that the agreed principles of confidentiality “are all good
practice and the right things to do.” A copy of the Reporting Person’s letter
dated May 23, 2008 and Cavoure’s letter dated May 30, 2008, are filed as
Exhibits C and D hereto, respectively.
On
June
10, 2008, the Reporting Person presented himself to take the psychological
tests
administered by Psychological Associates. After having taken two of the proposed
tests, the representative of Psychological Associates administering the tests
presented the Reporting Person with a document styled “Assurance of
Confidentiality”, requesting that he sign it before any further testing could
proceed. The Reporting Person advised Psychological Associates of his policy
not
to sign any legal document until it had been reviewed by counsel, whereupon he
arranged for it to be sent to counsel for review during which the testing
process was halted by Psychological Associates. The Reporting Person nonetheless
offered to proceed with the testing program while this issue was being reviewed
by counsel. This offer was rejected by Psychological Associates. Upon review
of
the “Assurance of Confidentiality”, the Reporting Person’s counsel advised him
not to sign it, as it failed to incorporate the protections and safeguards
which
had been carefully negotiated and agreed with Cavoure and the
Issuer.
On
June
12, 2008, the Reporting Person delivered a letter (the “June 12 Letter”) to the
Issuer’s Board which explained the course of events at the Psychological
Associates testing center and the waste of time resulting from the refusal
of
Psychological Associates to administer the balance of the tests while counsel
attempted to resolve the language of the “Assurance of Confidentiality.” In the
June 12 Letter, the Reporting Person reiterated his commitment to the process
and reaffirmed his long-term commitment to the Issuer. The Reporting Person
indicated that having rearranged his schedule with considerable difficulty
to
make himself available to take the full day of tests on June 10, his schedule
for the rest of June was extremely tight and did not allow for a “make-up” date.
In the June 12 Letter, the Reporting Person explained that he would of course
do
everything in his power to try to accommodate a meeting in Chicago with those
members of the Board to whom he had not yet been introduced so that they could
evaluate him in person. The Reporting Person expressed his belief that the
Board
had more than sufficient information about him to evaluate his candidacy based
upon his extensive public record of achievement, interviews with the Search
Committee and rigorous background check, without the need for further
psychological tests. A copy of the June 12 Letter is filed as Exhibit E hereto.
On
June
13, 2008, Mr. James C. Janning, Chairman of the Board of the Issuer (“Mr.
Janning”), delivered a letter to the Reporting Person indicating that if the
Reporting Person would like to be considered for the position of CEO of the
Issuer, he should make arrangements again to complete the testing on or before
June 25, 2008. In the letter, Mr. Janning did not acknowledge the difficulty
in
the Reporting Person’s schedule to devote another day to retake the
psychological tests or the Reporting Person’s willingness to have completed the
testing program of June 10, the day it had been originally scheduled. A copy
of
the Issuer’s letter dated June 13, 2008 is filed as Exhibit F hereto.
|
CUSIP
No. 313855108
|
13D
|
Page 6
of
9 Pages
|
On
June
17, 2008, the Reporting Person delivered a letter to Mr. Janning (the “June 17
Letter”), whereby the Reporting Person expressed his great disappointment in the
tenor of Mr. Janning’s June 13 letter and its failure to address the issues
raised in the June 12 Letter. In the June 17 Letter, the Reporting Person
explained that by failing to address any of the circumstances surrounding the
debacle of the psychological testing program administered by Psychological
Associates on June 10, 2008, Mr. Janning's letter could be construed by the
Issuer’s stockholders as evidence of a scheme to corrupt the search process by
placing insurmountable obstacles in the path of those candidates, however
qualified, who are not favored by Mr. Janning. In the June 17 Letter, the
Reporting Person explained that viewed in the most favorable light, the failure
of the Search Committee, and its agents, Cavoure and Psychological Associates,
to coordinate the administration of the testing program on the one day that
the
Search Committee knew the Reporting Person could make available for that purpose
evidences an ineptitude that possibly explains why the Issuer’s total return to
stockholders had declined more than 35% over the five years ended December
31,
2007, while the Russell 2000, the S & P Midcap 400 and the S & P
Industrial indices have all increased by more than 200% over the same period.
The Reporting Person noted that if Mr. Janning's letter sincerely reflected
the
importance the Board places on such psychological tests as a criteria for
appointment as the Issuer’s Chief Executive Officer, the Board should publicly
announce the date on which the Acting Chief Executive Officer took the same
battery of psychological tests that the Reporting Person was being asked to
take
for a second time and the weight the Board placed on those test results in
its
decision to appoint the Acting Chief Executive Officer. The Reporting Person
expressed his belief that absent such disclosure, stockholders having a more
suspicious view of these events might believe that the public search process
was
merely intended to disguise a predetermined plan to name the Acting Chief
Executive Officer as permanent CEO. A copy of the June 17 Letter is filed as
Exhibit G hereto.
On
June
20, 2008, Mr. Janning delivered a letter (the “June 20 Letter”) to the Reporting
Person generally noting that there has been no “scheme to corrupt the search
process. Psychological testing is a routine part of many executive search
processes.” Mr. Janning insisted that if the Reporting Person is to remain a
candidate for the CEO position, he must comply with the process of the
psychological testing. A copy of the June 20 Letter is filed as Exhibit H
hereto.
On
June
24, 2008, the Reporting Person delivered a letter (the “June 24 Letter”) which
responds to Mr. Janning's June 20 Letter. In the June 24 Letter, the Reporting
Person explains that, having served as a Chairman of the Board and Chief
Executive Officer of several public companies, he understands the importance
of
process and the Board’s responsibility to recruit the best possible new CEO for
the benefit of all stockholders. However, in the June 24 Letter, the Reporting
Person discusses why he believes that the process of the Issuer's CEO selection
was tainted to unfairly prejudice his candidacy. The Reporting Person also
expresses his belief that the Issuer and its stockholders could unfortunately
lose significantly if the Board declines to consider his candidacy fairly based
upon the considerable amount of information it already has without requiring
completion of the psychological tests. The Reporting Person reiterated that
he
has a variety of ideas and recommendations for addressing the issues confronting
the Issuer and extensive experience in implementing strategies designed to
increase stockholder value. Lastly, the Reporting Person reaffirmed his interest
in the CEO position and again noted that he was prepared do everything possible
to try to accommodate a meeting in Chicago with those members of the Board
who
he has not yet met so that they may evaluate him in person. A copy of the June
24 Letter is filed as Exhibit I hereto.
The
Reporting Person is awaiting the results of the Search Committee and Board
of
the Issuer and its selection of a new CEO, and the Reporting Person will
continue to evaluate his options in regard to shares of the Common Stock.
|
CUSIP
No. 313855108
|
13D
|
Page 7
of
9 Pages
|
Other
than as set forth in this Item 4, the Reporting Person does not have any current
plans, proposals or negotiations that relate to or would result in any of the
matters referred to in paragraphs (a) through (j) of Item 4 of the Statement.
The Reporting Person intends to review his investment in the Issuer on a
continuing basis, and to the extent permitted by law, may seek to engage in
discussions with other stockholders and/or with management and the Board of
the
Issuer concerning the business, operations or future plans of the Issuer.
Depending on various factors including, without limitation, the Issuer's
financial position, the price levels of the Common Stock, conditions in the
securities markets and general economic and industry conditions, the Reporting
Person may, in the future, take such actions with respect to his investment
in
the Issuer as he deems appropriate including, without limitation, purchasing
additional Common Stock, selling Common Stock, engaging in short selling of
or
any hedging or similar transaction with respect to the Common Stock, taking
any
action to change the composition of the Board, taking any other action with
respect to the Issuer or any of its securities in any manner permitted by law
or
changing its intention with respect to any and all matters referred to in
paragraphs (a) through (j) of Item 4.
Any
description herein of the above referenced letters are qualified in their
entirety by reference to the attached Exhibits A through I.
Item
5. Interest in Securities of the Issuer.
(a),
(b)
and (c). As of June 27, 2008, the Reporting Person may be deemed to be the
beneficial owner (as that term is defined under Rule 13d-3 under the Exchange
Act of 1934, as amended) of 2,755,954 shares of Common Stock, constituting
approximately 5.74% of the outstanding shares of Common Stock (the percentage
of
shares owned being based upon 47,997,478 Common Shares outstanding as of April
13, 2008, as set forth in the Issuer’s most recent report on Form 10-Q for the
period ended March 31, 2008, filed with the Securities and Exchange Commission
on May 2, 2008), over which the Reporting Person exercises sole voting and
dispositive power.
No
transactions in the shares of Common Stock have been effected by the Reporting
Person during the last 60 days except the following transactions, each of which
was made by the Reporting Person in a broker’s transaction in the open market.
Prices do not include brokerage commissions.
|
Date
|
Number
of Shares
|
Price
Per Share
|
||
| June 27, 2008 | 125,000 |
$12.418
|
||
| June 26, 2008 | 137,600 |
$12.725
|
||
| June 26, 2008 | 32,300 |
$12.770
|
||
| June 25, 2008 | 7,835 |
$13.897
|
||
|
June
24, 2008
|
87,265
|
$13.883
|
||
|
May
23, 2008
|
15,000
|
$12.600
|
||
|
May
1, 2008
|
15,000
|
$14.066
|
||
|
April
30, 2008
|
13,600
|
$14.184
|
||
|
April
29, 2008
|
33,500
|
$14.008
|
||
|
April
28, 2008
|
2,900
|
$13.991
|
||
|
April
25, 2008
|
25,000
|
$14.051
|
||
|
April
24, 2008
|
52,000
|
$13.931
|
(d)
and
(e). Not Applicable
|
CUSIP
No. 313855108
|
13D
|
Page 8
of
9 Pages
|
Item
6. Contracts,
Arrangements, Understandings or Relationships With Respect to Securities of
the
Issuer.
There
are
no contracts, arrangements, understandings or relationships (legal or otherwise)
between the Reporting Person and any person with respect to any securities
of
the Issuer.
Item
7. Material to be Filed as Exhibits
|
Exhibit
A -
|
Letter
dated April 24, 2008 from the Reporting Person to the Issuer’s Board of
Directors.
|
|
Exhibit
B -
|
Letter
dated May 19, 2008 from the Reporting Person to the Issuer’s Board of
Directors.
|
|
Exhibit
C -
|
Letter
dated May 23, 2008 from the Reporting Person to Cavoure.
|
|
Exhibit
D -
|
Letter
dated May 30, 2008 from Cavoure to the Reporting Person.
|
|
Exhibit
E -
|
Letter
dated June 12, 2008 from the Reporting Person to the Issuer’s Board of
Directors and Members of the Chief Executive Officer Search Committee.
|
|
Exhibit
F -
|
Letter
dated June 13, 2008 from James C. Janning, Chairman of the Board
of the
Board of the Issuer, to the Reporting Person.
|
|
Exhibit
G -
|
Letter
dated June 17, 2008 from the Reporting Person to Mr. James C. Janning,
Chairman of the Board of the Board of the Issuer.
|
|
Exhibit
H -
|
Letter
dated June 20, 2008 from James C. Janning, Chairman of the Board
of the
Board of the Issuer, to the Reporting
Person.
|
|
Exhibit
I -
|
Letter
dated June 24, 2008 from the Reporting Person to Mr. James C. Janning,
Chairman of the Board of the Board of the
Issuer.
|
|
CUSIP
No. 313855108
|
13D
|
Page 9
of
9 Pages
|
SIGNATURE
After
reasonable inquiry and to the best of my knowledge and belief, the undersigned
certifies that the information set forth in this Statement is true, complete
and
correct.
Dated:
June 27, 2008
| /s/ Warren B. Kanders | ||
|
Warren
B. Kanders
|
Warren
B. Kanders
One
Landmark Square - 22nd
Floor
Stamford,
Connecticut 06901
Tel.:
(203) 552-9600
Fax:
(203) 552-9607
April
24,
2008
Via
Facsimile and Federal Express
Board
of
Directors
Federal
Signal Corporation
1415
West
22nd
Street
Oak
Brook, Illinois 60523
| Attention: |
Jennifer
L. Sherman
|
Corporate
Secretary
Ladies
and Gentlemen:
My
name
is Warren B. Kanders. I am the beneficial owner of approximately 4.9% of
the
outstanding common stock of Federal Signal Corporation (“FSS”) and am pleased to
take this opportunity to introduce myself to members of the Board.
As
former
Chairman of the Board and CEO of Armor Holdings, Inc. (NYSE: AH), a company
which we sold to BAE Systems, PLC in July, 2007 for approximately $4.5 billion,
I have maintained a long-standing interest in FSS.
In
January 1996, I invested in Armor Holdings, Inc., then known as American
Body
Armor and Equipment, Inc., a publicly traded company listed on the NASDAQ
pink
sheets, at an average cost of $0.71 per share. The Company had just emerged
from
bankruptcy, and had approximately $12,000,000 in revenues and $1,000,000
in
EBITDA in 1995. Over the next eleven plus years, the Company grew, both
organically and through acquisitions, to a diversified global manufacturer
of
protective systems for the military, government, law enforcement agencies
and
commercial customers. In that time, the Company completed over 30 acquisitions,
completed numerous bank financings and public offerings and private placements
of both debt and equity securities, and became listed first on the American
and
then on the New York Stock Exchanges. At the time of the Company’s sale to BAE
Systems, PLC in July 2007, at an aggregate price of $4.5 billion, or $88
per
share, it had revenues of approximately $2.2 billion and EBITDA of approximately
$280 million for fiscal 2006, with fiscal 2007 guidance of approximately
$3.5
billion in revenues.
April
24,
2008
Page
2 of
3
I
believe
that I can successfully utilize the same skills to enhance the value of FSS
to
its shareholders. For that reason, I formally submit my candidacy as Chief
Executive Officer and a director of FSS, which candidacy I believe has been
presented to you and endorsed by the Company’s investment bank and by the Ramius
Group, FSS’s largest stockholder. As evidence of faith in my ability to achieve
my vision for FSS and grow value for all FSS stockholders, I have invested
more
than $25 million of my personal funds in open market purchases of FSS
shares.
However,
although it is a leader in a number of segments in which it operates, FSS
must
address formidable challenges if it is to optimize its strengths and adequately
reward the faith of its stockholders:
|
-
|
reducing
the cyclicality of its product mix;
|
|
-
|
increased
geographic diversification;
|
|
-
|
accelerating
technological innovation to maintain the Company’s cutting edge technology
so that it remains competitive;
|
|
-
|
adopting
creative incentive compensation plans to attract and retain quality
executives and key personnel;
|
|
-
|
minimizing
product liability exposure; and
|
|
-
|
recapitalizing
FSS’ capital structure that restricts the Company’s ability to raise
capital, issues I have confronted and successfully addressed as
CEO of
Armor Holdings, Inc.
|
Most
urgently, I believe I can assist the Board and provide the leadership necessary
to reverse the negative rate of return the Company has delivered to shareholders
over the past five years - a period when the Russell 2000 and the S&P Midcap
indices have more than doubled in value.
I
believe
that the U.S. is undergoing a renaissance in its industrial manufacturing
base -
due in part to the decline in the U.S. dollar, and in part to increased
productivity of the American worker. FSS should seize this opportunity to
accelerate its organic growth. At the same time, current dislocations in
the
credit markets offer unique opportunities to grow through carefully targeted
acquisitions. Under the right leadership, these drivers, working in tandem,
could propel FSS’s shareholder value to levels not previously
attained.
In
the
area of corporate governance, I commend the Board for making an amicable
and
constructive settlement with the Ramius Group, resulting in the addition
of two
talented members to the Board - evidencing a spirit of cooperation rather
than
confrontation with the Company’s largest stockholder, which should benefit all
stockholders.
FSS
and
the Board are at an inflection point.
The
Board
must now focus on selecting a CEO with a proven capacity for leadership and
a
vision to carry FSS to a higher level for the benefit of all its constituencies.
I have spent virtually my entire career and business experience with companies
in the public markets. The financial rewards I have achieved for my
stockholders, and the reputation I enjoy among institutional investors,
including many who are stockholders of FSS, has earned their trust and respect.
Jennifer
L. Sherman - Corporate Secretary
April
24,
2008
Page
3 of
3
I
would
be pleased to meet with members of the CEO Search Committee and the entire
Board
at their convenience to present my credentials. I am available to assist
the
Board in whatever way it deems most appropriate to offer guidance and counsel
to
grow the Company’s business and enhance its financial performance.
I
appreciate your consideration and await your prompt response.
|
Very
truly yours,
|
|
|
/s/
Warren B. Kanders
|
|
|
Warren
B. Kanders
|
WBK/bdr
Warren
B. Kanders
One
Landmark Square - 22nd
Floor
Stamford,
Connecticut 06901
Tel.:
(203) 552-9600
Fax:
(203) 552-9607
May
19,
2008
Via
Facsimile and Federal Express
| Messrs: |
Charles
Campbell, Director
|
James
Goodwin, Director
James
Janning, Director
John
McCartney, Director
Joseph
Wright, Director
Federal
Signal Corporation
1415
West
22nd
Street
Oak
Brook, Illinois 60523
| Attention: |
Jennifer
L. Sherman
|
Corporate
Secretary
Gentlemen:
I
wish to
express my appreciation for the opportunity to personally present my credentials
to the Search Committee yesterday. I was impressed by the Committee’s dedication
as it fulfills one of the Board’s most important duties - selecting the person
with the knowledge, experience, character and vision to lead Federal Signal
Corporation to a new level of success - for its shareholders, employees,
customers and the communities in which does business.
In
discharging your duty, I ask only that you carefully consider my record of
success - as Chief Executive Officer of Armor Holdings, Inc. - a
manufacturing company whose size, customer base and product mix are similar
to
FSS’s - and prior thereto, as Chief Executive Officer and a principal
stockholder of Benson Eyecare Corporation. The value I created for stockholders
of both companies is a matter of public record.
It
is my
belief in good corporate governance that as Chief Executive Officer, I should
hold a significant equity interest in the companies I manage, so that my
interests are totally aligned with the interests of other shareholders. To
that
end, I have purchased over time approximately 4.9% of the outstanding common
stock of FSS, investing my personal funds, and intend to continue to accumulate
shares in the future irrespective of your decision as to my
candidacy.
Having
now had the opportunity to discuss my philosophy of leadership and my vision
for
the Company’s future with members of the Board, and having listened carefully to
your expectations, I am certain we can work collaboratively to reverse the
Company’s fortunes.
Federal
Signal Board of Directors
May
19,
2008
Page
2 of
2
The
path
will not be easy, the challenges are formidable. However, I can promise you
that
if selected as Chief Executive Officer, I will commit my energy, my time
and my
efforts to optimizing the Company’s strengths and improving value for all of
FSS’s constituencies. I
look
forward to this challenge.
I
would
welcome the opportunity to meet with the other members of the Board to continue
this dialogue.
|
Very
truly yours,
|
|
|
/s/
Warren B. Kanders
|
|
|
Warren
B. Kanders
|
WBK/bdr
WARREN
B.
KANDERS
One
Landmark Square
Stamford,
Connecticut 06901
May
23,
2008
Mr.
Gregory T. Carrott
Cavoure
LP
190
South
LaSalle Street, Suite 500
Chicago,
Illinois 60603
Thank
you
for your e-mail of May 21, 2008 in which you discuss certain next steps relating
to my candidacy for the CEO position at Federal Signal Corporation (the
“Company”). I am happy to participate in the interviews and testing you
describe. However, I would like confirmation that I am one of the three
finalists being considered by the Board of Directors of the Company and that
each finalist will be subjected to the same testing process.
Additionally,
as you can understand, I would like confirmation that the Company, its Board
and
each member of the Board, Messrs. Janning, Goodwin, Campbell, Gerrity, Hamada,
Jones and McCartney and Ms. Reichelderfer, agree that results of such interviews
and testing:
|
a.
|
will
be held by the Company and by each member of the Company’s Board in the
strictest confidence,
|
|
b.
|
will
be shared with me upon request,
|
|
c.
|
will
not be disclosed, directly or indirectly, by the Company, or any
officer,
director, employee or agent of the Company, to any other party
for any
reason, and upon the selection of the Company’s CEO by the Board, such
results will immediately be destroyed, and
|
|
d.
|
will
be used solely and exclusively for the purpose of evaluating and
selecting
the Company’s CEO, and for no other purpose, whether directly or
indirectly.
|
Mr.
Gregory T. Carrott
Page
2
May 23, 2008
I
would
appreciate it if you could please confirm to me in writing on behalf of the
Company and each member of the Board of Directors that the matters set forth
above and herein have been agreed to by each of the parties requested herein.
Please let me know if you have any questions. I am looking forward to the
next
round of interviews. Kind regards.
|
Very
truly yours,
|
|
|
/s/
Warren B. Kanders
|
|
|
Warren
B. Kanders
|
Warren
B. Kanders
One
Landmark Square - 22nd
Floor
Stamford,
Connecticut 06901
Tel.:
(203) 552-9600
Fax:
(203) 552-9607
June
12,
2008
Via
E-mail and Facsimile
|
Messrs:
|
James
E. Goodwin
|
Charles
R. Campbell
James
C.
Janning
John
F.
McCartney
Joseph
R.
Wright
Directors,
Members of the Chief Executive Officer Search Committee
Federal
Signal Corporation
1415
West
22nd
Street
Oak
Brook, Illinois 60523
|
Attention:
|
Jennifer
L. Sherman
|
Corporate
Secretary
Gentlemen:
On
June
10, 2008, at the request of the Chief Executive Officer Search Committee
of the
Board of Directors, I submitted to a battery of psychological tests administered
by Psychological Associates, although I personally believe such tests to
be a
less reliable marker of a candidate’s future success as CEO than the candidate’s
record of achievement. As I am sure the Committee understands, as an executive
with some public persona, I am of course sensitive to insuring that the results
of such tests be scrupulously confidential, their use limited solely for
the
purpose of evaluating my candidacy.
Therefore,
several weeks before the date scheduled for these tests, anticipating the
need
for a mutually satisfactory confidentiality agreement, I exchanged
correspondence with Gregory T. Carrott of Cavoure, the executive search firm
engaged by the Search Committee, establishing the conditions of confidentiality
governing the test results and the ground rules predicate to my agreement
to
submit to the tests. I refer you to my letter dated May 23, 2008 and Mr.
Carrott’s response dated May 30, 2008, in which he expressly acknowledged that
the principles of confidentiality upon which we agreed “are all good practice
and the right things to do.”
I
am
therefore sure you can appreciate my incredulity when, having already taken
two
of the proposed tests, the representative of Psychological Associates
administering the tests presented me with a document styled “Assurance of
Confidentiality”, requesting that I sign it before any further testing could
proceed, as this was required by Psychological Associates’
“policy”.
Jennifer
L. Sherman - Corporate Secretary
June
12,
2008
Page
2 of
2
I
politely advised her that my “policy” was not to sign any legal document until
it had been vetted by my counsel, whereupon I arranged for it to be sent
to
counsel for review during which the testing process was halted by Psychological
Associates. Indeed, at the risk of seeming presumptuous, if I were a member
of
the Search Committee, I would strongly consider rejecting any candidate for
the
position of CEO who signed such legal document without first seeking the
advice
of counsel. However, to be clear, I nonetheless offered to proceed with the
testing program while this issue was resolved by counsel. This offer was
rejected by Psychological Associates.
Upon
review of the “Assurance of Confidentiality”, my counsel advised me not to sign,
as it failed to incorporate the protections and safeguards which had been
carefully negotiated and agreed with Cavoure.
I
genuinely appreciate Jim Janning’s attempt to intercede with Psychological
Associates so that the testing could continue while counsel resolved this
matter, and his subsequent apology on behalf of the Board for the embarrassment
this may have caused me and wasted time resulting from the refusal of
Psychological Associates to administer the balance of the tests.
Although
I understand that my counsel and counsel to Psychological Associates have
now
agreed on language to resolve this issue, it is unfortunately no longer
relevant. Having rearranged my schedule with considerable difficulty to make
myself available to take the full day battery of tests on June 10, my schedule
for the rest of June is extremely tight and does not allow for a “make-up” date.
I will of course do everything in my power to try to accommodate a meeting
in
Chicago with those members of the Board to whom I have not yet had the pleasure
of being introduced so that they may evaluate me in person.
As
the
holder of almost 5% of the Company’s outstanding shares, I commend the Board to
complete its CEO search in accordance with its publicly announced goal by
the
end of June. In doing so, I believe that the Board has more than sufficient
information about me to evaluate my candidacy based upon my extensive public
record of achievement, interviews with the Search Committee and rigorous
background check, without the need for further psychological tests.
Let
me
assure you I remain committed to the process and reaffirm my interest in
the
position and my long term commitment to Federal Signal and its
shareholders.
|
Very
truly yours,
|
|
|
/s/
Warren B. Kanders
|
|
|
Warren
B. Kanders
|
WBK/bdr
Warren
B. Kanders
One
Landmark Square - 22nd
Floor
Stamford,
Connecticut 06901
Tel.:
(203) 552-9600
Fax:
(203) 552-9607
June
17,
2008
Mr.
James
C. Janning
Chairman
of the Board and
Acting
Chief Executive Officer
Federal
Signal Corporation
1415
West
22nd
Street
Oak
Brook, Illinois 60523
Dear
Mr.
Janning:
I
was
greatly disappointed in your letter of June 13, 2008. It’s tenor and substance -
or lack thereof - would have been offensive even if sent to someone to whom
you
owed no duty - much less to someone who is ostensibly under serious
consideration for the position of Chief Executive Officer and who owns almost
5%
of the Company’s outstanding shares, having invested more than $30 million of
his own finances - an investment which exceeds by more than 200% the aggregate
ownership of the Company’s entire Board of Directors.
By
failing to address any of the circumstances surrounding the debacle of the
psychological testing program administered to me by Psychological Associates
on
June 10, 2008, as described in the my letter of June 12, 2008 (a copy of
which
is attached hereto), your letter could be construed by the Company’s
shareholders as evidence of a scheme to corrupt the search process by placing
insurmountable obstacles in the path of those candidates, however qualified,
who
are not favored by you.
Insisting
that I again submit to the test program by June 25, when I have advised the
Search Committee that my schedule does not allow me to devote another day
to
retake the psychological tests is not productive. As I told you and the
representative of Psychological Associates administering the tests on June
10
and as I reiterated in my letter of June 12, I was willing to complete the
testing program on June 10, without signing the “Assurance of Confidentiality”
that was handed to me midway through the testing program, but my offer was
refused. This is all the more disturbing since I had anticipated the
confidentiality issue weeks before and, I thought, resolved it to our mutual
satisfaction by the exchange of correspondence with Cavoure, the Company’s
executive search firm, on May 23 and May 30, 2008.
Mr.
James
C. Janning
Chairman
of the Board and Acting Chief Executive Officer
June
17,
2008
Page
2 of
3
Viewed
in
the most favorable light, the failure of the Search Committee, and its agents,
Cavoure and Psychological Associates to coordinate the administration of
the
testing program on the one day that you and the Search Committee knew I could
make available for that purpose evidences an ineptitude that possibly explains
why the Company’s total return to shareholders has declined more than 35% over
the five years ended December 31, 2007, while the Russell 2000, the S & P
Midcap 400 and the S & P Industrial indices have all increased by more than
200% over the same period.
If
your
letter sincerely reflects the importance the Board places on such psychological
tests as a criteria for appointment as the Company’s Chief Executive Officer,
the Board should publicly announce the date on which you took the same battery
of psychological tests you are requiring me, and presumably all other
candidates, to take and the weight the Board placed on the test results in
naming you as acting CEO.
Absent
such disclosure, shareholders having a more suspicious view of these events
might believe that the public search process is merely intended to disguise
a
predetermined plan to appoint you as permanent CEO. I therefore suggest that
to
avoid the appearance that you are conflicted and may have a self-serving
agenda,
you issue a press release confirming that you are not a candidate to be named
permanent CEO, and that should the Board request that you accept the position,
you will decline. Further, in order to encourage the Search Committee and
the
Board to conclude the search process expeditiously, you should announce that
you
will resign as interim CEO effective August 1, 2008.
I
would
prefer to believe that the other members of the Search Committee and the
full
Board were unaware of your June 13 letter before it was sent. I therefore
repeat
my offer to meet with the full Board, or those members who have not had the
opportunity to meet me previously, in Chicago or other mutually convenient
location, so that they can evaluate me in person, both as a candidate for
the
position of Chief Executive Officer and as a nominee to serve on the Board
of
Directors. Alternatively, I invite the Board members to call me, at their
convenience, either individually or collectively, to discuss my candidacy.
Furthermore, in the interest of fairness, I believe that the Search Committee
owes a duty of full disclosure to all candidates and should disclose that
a 5%
shareholder who believes he is eminently qualified, is interested in the
CEO
position.
I
believe
my philosophy of careful analysis, patience, perseverance and execution have
been hallmarks of my success at other public companies in which I have made
a
significant investment, including Armor Holdings, Inc., a company four times
the
size of Federal Signal, and at which I have served as Chief Executive Officer
and/or Chairman - a philosophy that will serve the interests of Federal Signal
shareholders as well, whether the Board selects me as Chief Executive Officer
or
not.
Mr.
James
C. Janning
Chairman
of the Board and Acting Chief Executive Officer
June
17,
2008
Page
3 of
3
I
believe
I am entitled to and would appreciate receiving an appropriate
response.
|
Very
truly yours,
|
|
|
/s/
Warren B. Kanders
|
|
|
Warren
B. Kanders
|
WBK/bdr
| cc: |
James
E. Goodwin
|
Charles
R. Campbell
John
F.
McCartney
Joseph
R.
Wright
Robert
Gerrity
Robert
Hamada
Paul
Jones
Dennis
Martin
Brenda
Reichelderfer
Warren
B. Kanders
One
Landmark Square - 22nd
Floor
Stamford,
Connecticut 06901
Tel.:
(203) 552-9600
Fax:
(203) 552-9607
June
24,
2008
VIA
FACSIMILE AND FEDERAL EXPRESS
Mr.
James
C. Janning
Chairman
of the Board
Federal
Signal Corporation
1415
West
22nd
Street
Oak
Brook, Illinois 60523
Dear
Mr.
Janning:
In
response to your letter of June 20, 2008, having served as Chairman of the
Board
and Chief Executive Officer of several public companies, I can assure you that
I
understand the importance of process and the Board’s responsibility to recruit
the best possible new CEO for the benefit of all stockholders. However, I am
sure you can appreciate why I believe that the process was tainted to unfairly
prejudice my candidacy.
Although
psychological testing may be a routine part of some executive search processes,
it is surely not routine for a qualified candidate to be required to devote
a
second day to retake the psychological tests through no fault of the candidate.
This is especially the case after the first one was interrupted midstream by
the
test administrator to require that I sign a hitherto unseen confidentiality
agreement, after I had spent the time and effort to address confidentiality
issues with Cavoure, the Company’s executive search firm, weeks before the
scheduled test date. To make matters worse, this interruption occurred after
I
had rearranged my schedule with considerable difficulty to accommodate the
Committee’s process, and after I offered to complete the testing program on the
date originally scheduled. It has been the Search Committee and its agents
who
have deviated from the process - not me.
I
believe
that the Company and its stockholders will unfortunately lose significantly
if
the Board declines to consider my candidacy fairly based upon the considerable
amount of information it already has, without requiring completion of the
psychological tests. As I have expressed in my correspondence and in person
to
the Search Committee, I have a variety of ideas and recommendations for
addressing the issues confronting the Company and extensive experience in
implementing strategies designed to increase shareholder value.
Mr.
James
C. Janning
Chairman
of the Board and Acting Chief Executive Officer
June
24,
2008
Page
2 of
2
I
hereby
reaffirm my interest in the position and will do everything possible to try
to
accommodate a meeting in Chicago with those members of the Board whom I have
not
yet met so that they may evaluate me in person. However, if the Company and
the
Board determine that I am not the most qualified candidate, as a holder of
approximately 5% of the outstanding Common Stock of the Company, I intend to
closely monitor the performance of the Board and the new CEO in order to protect
and enhance the value of my investment.
|
Very
truly yours,
|
|
|
/s/
Warren B. Kanders
|
|
|
Warren
B. Kanders
|
WBK/bdr
|
cc:
|
James
E. Goodwin
|
Charles
R. Campbell
John
F.
McCartney
Joseph
R.
Wright
Robert
Gerrity
Robert
Hamada
Paul
Jones
Dennis
Martin
Brenda
Reichelderfer