Federal Signal fires back at Kanders

By Lisa Kerner

Charlotte, N.C., Aug. 25 - Federal Signal Corp. sought once again to set the record straight in regards to remarks made by Warren B. Kanders, it was reported in a form 8-K filed with the Securities and Exchange Commission.

Kanders, who had been rejected as a candidate for the company's chief executive officer position, made certain allegations in a letter to Federal Signal's board of directors on Aug. 15 and contained in an Aug. 18 press release, the company said.

According to Federal Signal, an investigation did not yield any evidence to support proposed violations of any securities laws.

Federal Signal explained that its board of directors hired law firm Latham & Watkins LLP in 2003 to investigate some trading activity in the company's stock by family members of Joseph Ross, the company chairman, president and CEO at the time.

The company also noted that earlier this month, a federal jury denied former general counsel Kim Wehrenberg's motion for a new trial. In June, a federal jury ruled in favor of Federal Signal and against claims brought by Wehrenberg.

Wehrenberg had reported certain trading activity in Federal Signal's stock by family members of Ross.

The filing noted that Wehrenberg resigned as a company officer in 2004 and Ross retired in 2004.

In a prior SEC filing, Federal Signal interim president and CEO Jim Goodwin accused Kanders of mischaracterizing recent amendments made to the company's bylaws.

Goodwin explained that "in light of some significant developments in applicable statutes, regulations and court rulings," Federal Signal felt it should undertake a "wholesale review of its bylaws."

In addition, Goodwin said he addressed many of Kanders' "baseless accusations" in an Aug. 1 letter to Federal Signal employees.

It was previously reported that Kanders, a 5.7% shareholder, has also called for the resignation of Federal Signal chairman Jim Janning.

In a July schedule 13D filing with the SEC, Kanders said that under Janning's nine-year stewardship, Federal Signal has endured CEO turnover, declining sales and profitability, a crisis in employee morale and underperformance of its shares relative to its peers.

Federal Signal is an Oak Brook, Ill.-based company focused on security technology and industrial tooling.

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