Warren B. Kanders Calls for James C. Janning's Resignation as Chairman of the Board...

Warren B. Kanders Calls for James C. Janning's Resignation as Chairman of the
Board and Director of Federal Signal Corporation
Cites Disappointing Second Quarter Results, Flawed Sale of E-One and Tainted
CEO Search

STAMFORD, Conn., Aug. 5 /PRNewswire/ -- Warren B. Kanders, in a letter to
James C. Janning, Chairman of the Board of Federal Signal Corporation (NYSE:
FSS) called for his resignation as Chairman and as a director following FSS's
disappointing second quarter results, the flawed sale of E-One for a price
significantly below expectations, and a tainted CEO search process which has
yet to result in the selection of a new Chief Executive Officer.
Responding to Mr. Janning's allegations that Mr. Kanders' letter of July
23, 2008, which questioned the process and price for FSS's sale of E-One to a
group that included E-One management, contained "inaccuracies, innuendos, and
misrepresentations", Mr. Kanders stated:
"You claim that despite the active involvement of E-One management in the
sale - the process was nonetheless 'robust' and 'fully negotiated at arms
length.' Yet we know that bona fide, highly qualified and well financed
bidders were deliberately excluded from the process - which resulted in a
purchase price significantly below my and most analysts' expectations. Did
our Board not consider the payment of a success fee to Mr. Guile of $400,000,
plus 1% of the sale proceeds in excess of liquidation value of E-One, a
conflict of interest? The Board apparently did not see fit to obtain an
independent fairness opinion, yet FSS wrote off an additional $21M as a result
of this material transaction." Mr. Kanders called the Second Quarter
results "unacceptable", noting that:

-- "Sales were up marginally - missing consensus expectations.
-- Margins of the Safety and Security Group, FSS's most profitable
division, declined for the fourth consecutive quarter, year over year.
-- Earnings per share from continuing operations were down
precipitously -- falling 32 % year over year.
-- Overhead remains far too high after the sale of E-One; FSS's cost
cutting program is lagging."

"Even the analysts at BMO Capital Markets, the investment bank that
advised the Board on the sale of E-One, in their July 28, 2008 report,
concluded that 'given the performance over the past few quarters, our
confidence level in the Company's ability to meet its own targets and our
estimate is less than it has been in the past.' You have apparently lost all
credibility."
Observing that FSS's July 25 earnings call was "carefully orchestrated to
prevent shareholders from asking tough questions challenging management's and
the Board's performance", Mr. Kanders continued:
"FSS could have declined to have any Q&A period. Instead, after
announcing he would open the call to questions, Mr. Goodwin manipulated the
call and misled the audience by taking only powder-puff questions from
friendly analysts -- most of whom had or have investment banking relationships
with FSS. Not one question was taken from a single shareholder -- although I
know that several sought to be heard -- unsuccessfully."
Mr. Kanders, noting further that three days before the earnings call, the
Board had adopted Amended and Restated By-Laws, but made no mention of them on
the earnings call, accused the Board and management of shamefully trying to
"quietly slip them by shareholders" by burying them as an exhibit to FSS's
Second Quarter Form 10-Q.
Mr. Kanders charged that:
"Clearly, the Restated By-Laws are designed to insulate the current Board
to the maximum extent possible and limit even further the rights of unhappy
shareholders fed up with nine years of unfulfilled expectations, dismal
financial performance and a depressed stock price, by, among other things:
-- Moving the date of the annual meeting of stockholders to the Friday of
Memorial Day weekend;
-- Replacing the inspectors of election responsible for determining
contested elections from two persons 'who are not affiliated with the
Corporation' to persons who may be employees of the Corporation;
-- Lengthening the advance notice requirement for shareholders nominating
directors to the Board from 30 days prior to the Annual Meeting to a
narrow window between 90 and 120 days prior to the anniversary of the
last Annual Meeting;
-- Requiring any person nominated by a shareholder for election as a
director to furnish, in addition to the information required by the
Federal proxy rules, any information the Corporation may require,
including 'submission of a questionnaire, representation and agreement
in the form requested by the Corporation.'"

Mr. Kanders nonetheless offered to meet with a "select group of
independent directors to discuss where we go from here."
SOURCE Warren B. Kanders

Warren B. Kanders, +1-203-552-9600, wbkanders@kanders.com,
wbkanders@bloomberg.net