<PAGE>
<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
/X/ Definitive Proxy Statement Commission Only (as permitted
/ / Definitive Additional Materials by Rule 14a-6(e)(2))
/ / Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
EMERSON ELECTRIC CO.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
- -------------------------------------------------------------------------------
(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:
- -------------------------------------------------------------------------------
(3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED
PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON WHICH THE FILING
FEE IS CALCULATED AND STATE HOW IT WAS DETERMINED):
- -------------------------------------------------------------------------------
(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
- -------------------------------------------------------------------------------
(5) TOTAL FEE PAID:
- -------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- -------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- -------------------------------------------------------------------------------
(3) Filing Party:
- -------------------------------------------------------------------------------
(4) Date Filed:
- -------------------------------------------------------------------------------
<PAGE>
<PAGE>
NOTICE OF ANNUAL MEETING OF THE
STOCKHOLDERS OF
EMERSON [logo] EMERSON ELECTRIC CO.
St. Louis, Missouri
December 15, 1998
TO THE STOCKHOLDERS OF
EMERSON ELECTRIC CO.:
The Annual Meeting of the Stockholders of Emerson Electric Co. will be held
at the office of the Company, 8000 West Florissant Avenue, St. Louis, Missouri
on Tuesday, February 2, 1999, commencing at 10:00 a.m., at which meeting only
holders of the common stock of record at the close of business on November 24,
1998, will be entitled to vote, for the following purposes:
1. To elect five directors; and
2. To transact such other and further business, if any, as lawfully may be
brought before the meeting.
EMERSON ELECTRIC CO.
By /s/ Charles F. Knight
Chairman of the Board
/s/ W. W. Withers
Secretary
EVEN THOUGH YOU MAY PLAN TO ATTEND THE MEETING IN PERSON, PLEASE EXECUTE
THE ENCLOSED PROXY AND MAIL IT PROMPTLY. SHOULD YOU ATTEND THE MEETING, YOU MAY
REVOKE YOUR PROXY AND VOTE IN PERSON. A RETURN ENVELOPE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR YOUR CONVENIENCE.
IMPORTANT
PLEASE NOTE THAT A TICKET IS REQUIRED FOR ADMISSION TO THE MEETING. IF YOU
PLAN TO ATTEND IN PERSON AND ARE A STOCKHOLDER OF RECORD, PLEASE CHECK THE BOX
ON YOUR PROXY CARD AND BRING THE TEAR-OFF ADMISSION TICKET WITH YOU TO THE
MEETING. IF YOUR SHARES ARE HELD BY SOMEONE ELSE SUCH AS A BROKER, PLEASE BRING
WITH YOU A LETTER FROM THAT FIRM OR AN ACCOUNT STATEMENT SHOWING YOU WERE A
BENEFICIAL HOLDER ON NOVEMBER 24, 1998.
<PAGE>
<PAGE>
EMERSON ELECTRIC CO.
8000 WEST FLORISSANT AVENUE, ST. LOUIS, MISSOURI 63136
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD FEBRUARY 2, 1999
This proxy statement is furnished to the stockholders of Emerson Electric
Co. in connection with the solicitation of proxies for use at the Annual
Meeting of Stockholders to be held February 2, 1999, and at all adjournments
thereof, for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders. This proxy statement and the enclosed form of proxy
are first being mailed to stockholders on or about December 15, 1998.
If you have a disability which requires accommodation at the meeting,
please call 314-553-2197; requests must be received by January 15, 1999.
Whether or not you expect to be personally present at the meeting, you are
requested to fill in, sign, date and return the enclosed form of proxy. Any
person giving such proxy has the right to revoke it at any time before it is
voted by giving notice to the Secretary of the Company. All shares represented
by duly executed proxies in the accompanying form will be voted unless proxies
are revoked prior to the voting thereof.
The close of business on November 24, 1998, has been fixed as the record
date for the determination of stockholders entitled to vote at the Annual
Meeting of Stockholders. As of the record date, there were outstanding and
entitled to be voted at such meeting 437,998,156 shares of common stock. The
holders of the common stock will be entitled to one vote for each share of
common stock held of record on the record date.
A copy of the Company's Annual Report to Stockholders for the fiscal year
ended September 30, 1998 accompanies this proxy statement.
The solicitation of this proxy is made by the Board of Directors of the
Company. The solicitation will be by mail and the expense thereof will be paid
by the Company. The Company has retained Georgeson & Company, Inc. to assist in
the solicitation of proxies at an estimated cost of $12,000 plus expenses. In
addition, solicitation of proxies may be made by telephone or telegram by
directors, officers or regular employees of the Company.
I. ELECTION OF DIRECTORS
NOMINEES AND CONTINUING DIRECTORS
The Board of Directors is divided into three classes, with the terms of
office of each class ending in successive years. Five directors of the Company
are to be elected for terms ending at the Annual Meeting in 2002, or until
their respective successors have been elected and have qualified. Certain
information with respect to the nominees for election as directors proposed by
the Company and the other directors whose terms of office as directors will
continue after the Annual Meeting is set forth below. Should any one or more of
the nominees be unable or unwilling to serve (which is not expected), the
proxies (except proxies marked to the contrary) will be voted for such other
person or persons as the Board of Directors of the Company may recommend.
<TABLE>
<CAPTION>
SHARES OF
EMERSON
SERVED AS COMMON STOCK
NAME, AGE, PRINCIPAL OCCUPATION DIRECTOR BENEFICIALLY
OR POSITION, OTHER DIRECTORSHIPS SINCE OWNED<F1><F2><F3>
-------------------------------- --------- -----------------
<S> <C> <C>
NOMINEES FOR TERMS ENDING IN 2002
D. C. Farrell, 65........................................... 1989 14,260
Retired Chairman and Chief Executive Officer of The May
Department Stores Company, operator of department stores
He is also a Director of Ralston Purina Company
2
<PAGE>
<PAGE>
<CAPTION>
SHARES OF
EMERSON
SERVED AS COMMON STOCK
NAME, AGE, PRINCIPAL OCCUPATION DIRECTOR BENEFICIALLY
OR POSITION, OTHER DIRECTORSHIPS SINCE OWNED<F1><F2><F3>
-------------------------------- --------- -----------------
<S> <C> <C>
J. A. Frates, 78............................................ 1966 28,756
Private investor
C. F. Knight, 62............................................ 1972 1,930,976
Chairman of the Board and Chief Executive Officer of
Emerson
He is also a Director of Anheuser-Busch Companies, Inc.,
The British Petroleum Company plc, International
Business Machines Corp., SBC Communications Inc.
R. B. Loynd, 71............................................. 1987 10,260
Chairman of the Executive Committee of Furniture Brands
International Inc., manufacturer and marketer of
furniture products.
He is also a Director of Converse Inc.
R. W. Staley, 63............................................ 1987<F4> 209,015
Vice Chairman of Emerson
He is also a Director of ACE Limited
TO CONTINUE IN OFFICE UNTIL 2001
J. G. Berges, 51............................................ 1997 253,943<F5>
Vice Chairman of Emerson
He is also a Director of MCN Energy Group Inc.
R. L. Ridgway, 63........................................... 1995 2,970
Former Assistant Secretary of State for Europe and Canada
She is also a Director of Bell Atlantic Corporation, The
Boeing Company, Minnesota Mining and Manufacturing
Company, RJR Nabisco Holdings Corp., Sara Lee
Corporation, Union Carbide Corporation
A. E. Suter, 63............................................. 1989<F4> 281,045
Senior Vice Chairman and Chief Administrative Officer of
Emerson
He is also a Director of Furniture Brands International
Inc.
W. M. Van Cleve, 69......................................... 1984 34,060<F5>
Partner of Bryan Cave LLP, lawyers
E. E. Whitacre, Jr., 57..................................... 1990 4,660
Chairman and Chief Executive Officer of SBC Communications
Inc., a diversified communications holding company
He is also a Director of Anheuser-Busch Companies, Inc.,
Burlington Northern Santa Fe Corporation, The May
Department Stores Company
TO CONTINUE IN OFFICE UNTIL 2000
L. L. Browning, Jr., 69..................................... 1969 468,140
Former Vice Chairman of Emerson
He is also a Director of Firstar Corporation
A. A. Busch III, 61......................................... 1985 7,660
Chairman of the Board and President of Anheuser-Busch
Companies, Inc., brewery, container manufacturer and
theme park operator
He is also a Director of General American Life Insurance
Company, SBC Communications Inc.
3
<PAGE>
<PAGE>
<CAPTION>
SHARES OF
EMERSON
SERVED AS COMMON STOCK
NAME, AGE, PRINCIPAL OCCUPATION DIRECTOR BENEFICIALLY
OR POSITION, OTHER DIRECTORSHIPS SINCE OWNED<F1><F2><F3>
-------------------------------- --------- -----------------
<S> <C> <C>
R. B. Horton, 59............................................ 1987 3,622
Chairman of Railtrack Group plc, which owns and operates
the infrastructure formerly owned by British Railways
He is also a Director of Premier Farnell plc, PartnerRe
Ltd.
G. A. Lodge, 66............................................. 1974 8,260
President of InnoCal Management, Inc., a venture capital
management company
V. R. Loucks, Jr., 64....................................... 1979<F4> 4,260
Chairman and Chief Executive Officer of Baxter
International Inc., a global manufacturer and marketer
of health care products
He is also a Director of Affymetrix, Inc., Anheuser-Busch
Companies, Inc., Dun & Bradstreet Corporation, The
Quaker Oats Company
G. W. Tamke, 51............................................. 1997 265,021
President and Chief Operating Officer of Emerson
All Directors and Executive Officers as a Group (18
persons).................................................. 3,791,616<F6>
<FN>
- -------
<F1> Beneficial ownership of Emerson common stock is stated as of September 15,
1998. The foregoing table includes all executive officers of the Company
named in the Summary Compensation Table except W. J. Galvin, who
beneficially owned 174,480 shares. Under rules of the Securities and
Exchange Commission, persons who have power to vote or dispose of
securities, either alone or jointly with others, are deemed to be the
beneficial owners of such securities. Accordingly, except in the case of
Mr. Berges shares owned separately by spouses are not included. Each
person reflected in the table has both sole voting power and sole
investment power with respect to the shares included in the table, except
as described in the footnotes below and except as follows: (i) with
respect to the following shares the person named has no investment power:
Mr. Knight-542,674; Mr. Tamke-138,516; Mr. Suter-102,858; Mr.
Berges-90,130; Mr. Galvin-72,750; Mr. Staley-20,000; and each non-employee
director-1,860; and (ii) with respect to the following shares the person
named has no voting power: Mr. Knight-5,825; Mr. Tamke-1,868; Mr.
Suter-4,091; Mr. Berges-3,536; Mr. Galvin-5,353; Mr. Staley-5,797.
<F2> Includes the following shares which such persons have or will have within
60 days after September 15, 1998, the right to acquire upon the exercise
of employee stock options: Mr. Knight-147,892; Mr. Tamke-80,014; Mr.
Suter-65,672; Mr. Berges-60,022; Mr. Galvin-35,804; Mr. Staley-11,658.
<F3> No person reflected in the table owns more than .5% of the outstanding
shares of Emerson common stock.
<F4> Mr. Staley previously served as a director of the Company from April 1978
to February 1982. Mr. Suter previously served as a director from February
to June 1987. Mr. Loucks previously served as a director from April 1974
to December 1975.
<F5> Includes 38,924 shares as to which Mr. Berges shares voting and investment
power. Includes 15,800 shares held by Mr. Van Cleve as co-trustee of three
trusts and a charitable foundation, as to which Mr. Van Cleve shares
voting and investment power and disclaims beneficial ownership.
<F6> Includes 423,508 shares of common stock which executive officers have, or
will have within 60 days after September 15, 1998, the right to acquire
upon exercise of employee stock options. Shares owned as a group repre-
sents .86% of the outstanding common stock of the Company. The shares
issuable upon exercise of options were deemed to be outstanding for
purposes of calculating the percentage of outstanding shares. The total
includes 30,006 shares held in employee accounts under the Company's
401(k) savings plans, as to which employees have investment power only.
</TABLE>
Each of the nominees and continuing directors has had the same position or
other executive positions with the same employer during the past five years,
except as follows:
Ambassador Ridgway was Co-Chair of The Atlantic Council of the United
States, a private foreign policy institute, from 1993 to 1996 and was President
of the Council from 1989 to 1993.
4
<PAGE>
<PAGE>
Mr. Farrell retired as Chairman and Chief Executive Officer of The May
Department Stores Company in April, 1998.
CERTAIN BUSINESS RELATIONSHIPS
Mr. Van Cleve is a partner and former Chairman of the law firm of Bryan
Cave LLP, which firm the Company retained in fiscal 1998 and expects to retain
in fiscal 1999.
BOARD OF DIRECTORS AND COMMITTEES
The members of the Board of Directors are elected to various committees.
The standing committees of the Board (and the respective chairmen) are:
Executive Committee (Knight), Audit Committee (Busch), Compensation and Human
Resources Committee (Loucks), Finance Committee (Horton), Pension Committee
(Lodge) and Public Policy Committee (Whitacre). The Compensation and Human
Resources Committee acts as a nominating committee and reviews new director
nominees. There were 11 meetings of the Board of Directors during fiscal 1998.
All of the incumbent directors attended at least 75% of the meetings of the
Board and committees on which they served except Mr. Loucks, who attended 70%
of such meetings.
The functions of the Audit Committee are to review the Company's reports to
stockholders with management and the independent auditors to insure that
appropriate disclosure is made; appoint the firm of independent auditors to
perform the annual audit; review and approve the scope of the independent and
internal auditors' work; review the effectiveness of the Company's internal
controls; review and approve the fees of the independent auditors and related
matters. The Committee met four times in fiscal 1998. The members of the
Committee are A. A. Busch III, Chairman, R. B. Loynd, R. L. Ridgway and W. M.
Van Cleve.
The functions of the Compensation and Human Resources Committee are to
review and approve the salaries of all officers of the Company; review and
approve all salaries above a specified level to be paid to non-officer
employees and salaries of all division presidents; grant awards under and
administer the Company's stock option and incentive shares plans; review and
approve all additional compensation plans; determine if necessary when service
by officers and directors with another entity is eligible for indemnification
under the Company's Bylaws; monitor the senior management and director
succession plans and review new director nominees; and authorize Company
contributions to benefit plans, and adopt and terminate benefit plans not the
prerogative of management. The Committee met five times in fiscal year 1998.
The members of the Committee are V. R. Loucks, Jr., Chairman, D. C. Farrell, J.
A. Frates and E. E. Whitacre, Jr.
DIRECTOR COMPENSATION
Directors who are employees of the Company do not receive any compensation
for service as directors. Each non-employee director is currently paid an
annual retainer of $30,000 plus an award of restricted shares of Company common
stock with a market value on the date of the award of $35,000 and fees of
$1,500 plus expenses for attendance at each Board meeting. Such restricted
stock does not vest and cannot be sold until the director's retirement or
earlier death or resignation. Each committee chairman is currently paid an
annual retainer of $5,000, and each committee member is paid $1,250 plus
expenses for attendance at each committee meeting.
Directors may elect to defer all or a part of such cash compensation; such
deferred amounts are credited with interest quarterly at the prime rate charged
by NationsBank, N.A. Directors in the alternative may elect to have deferred
fees converted into units equivalent to shares of Emerson common stock, and
their accounts are credited with additional units representing dividend
equivalents. All deferred fees are payable only in cash.
In addition, the Company has a Continuing Compensation Plan for
Non-Management Directors. Under this plan, a director who is not an employee of
the Company who has served as a director for at least five years will, after
the later of termination of service as a director or age 72, receive for life a
percentage of the annual fee for directors in effect at the time of termination
of service. Such percentage is 50% for five years' service and increases by 10%
for each additional year of service to 100% for ten years' or more service. In
the event that service as a director terminates because of death, the benefit
will be paid to the surviving spouse for five years.
5
<PAGE>
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's directors and executive officers are required, pursuant to
Section 16(a) of the Securities Exchange Act of 1934, to file statements of
beneficial ownership and changes in beneficial ownership of common stock of the
Company with the Securities and Exchange Commission and the New York Stock
Exchange and to furnish copies of such statements to the Company.
Based solely on a review of the copies of such statements furnished to the
Company and written representations that no other such statements were
required, the Company believes that during fiscal year 1998 its directors and
executive officers complied with all such requirements.
EXECUTIVE COMPENSATION
The following information relates to compensation received or earned by the
Company's Chief Executive Officer and each of the other five most highly
compensated executive officers of the Company for each of the last three fiscal
years of the Company.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION<F1>
---------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUT
-----------------------------------------------------------------------------------------------------
SECURITIES LONG-
OTHER UNDERLYING TERM ALL
ANNUAL RESTRICTED OPTIONS/ INCENTIVE OTHER
NAME AND FISCAL COMPENSA- STOCK SARS PLAN COMPEN-
PRINCIPAL POSITION YEAR SALARY($) BONUS($) TION($)<F2> AWARD(S)($)<F3> (#) PAYOUTS($)<F4> SATION($)<F5>
- --------------------------- ------ --------- -------- ----------- --------------- ---------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. F. Knight 1998 900,000 2,500,000 45,439 0 96,667 11,900,662 66,680
Chairman of the Board and 1997 900,000 1,100,000 48,628 0 0 0 65,301
Chief Executive 1996 900,000 1,100,000 37,462 0 0 0 64,978
Officer<F6><F7>
G. W. Tamke 1998 550,000 600,000 -- 1,136,200 0 1,814,671 31,715
President and Chief 1997 445,000 500,000 -- 0 86,264 0 27,920
Operating Officer<F7>
A. E. Suter 1998 490,000 550,000 -- 0 20,000 3,924,739 26,669
Senior Vice Chairman and 1997 490,000 510,000 -- 0 0 0 26,512
Chief Administrative 1996 490,000 510,000 -- 0 0 0 26,705
Officer<F7>
J. G. Berges 1998 375,000 475,000 -- 1,136,200 0 1,582,551 20,899
Vice Chairman<F7> 1997 315,000 425,000 -- 0 30,526 0 17,743
W. J. Galvin 1998 350,000 420,000 -- 1,136,200 0 1,413,707 17,750
Senior Vice 1997 315,000 360,000 -- 0 27,082 0 14,750
President--Finance 1996 300,000 275,000 -- 0 0 0 14,031
and Chief Financial Officer
R. W. Staley 1998 300,000 425,000 -- 0 20,000 2,046,792 16,875
Vice Chairman 1997 300,000 375,000 -- 0 0 0 16,250
1996 300,000 350,000 -- 0 0 0 15,687
<FN>
- --------
<F1> The Company's stock option plans, incentive shares plans and supplemental
executive retirement and savings investment plans generally provide for
acceleration of vesting in the event of a change in control of the
Company.
<F2> Consistent with applicable regulations, certain non-cash compensation need
not be reported.
<F3> The number of shares of restricted stock held by the named executive
officers at the end of fiscal year 1998, and the aggregate value of such
shares, are as follows: C. F. Knight, 542,674 shares having a value of
$33,781,457; G. W. Tamke, 138,516 shares having a value of $8,622,621;
A. E. Suter, 102,858 shares having a value of $6,402,911; J. G. Berges,
90,130 shares having a value of $5,610,593; W. J. Galvin, 72,750 shares
having a value of $4,528,688; R. W. Staley, 20,000 shares having a value
of $1,245,000. The Company pays dividends on restricted stock. All
restricted stock awards have a restriction period and are earned over a
period of three to ten years and vest at the end of such period; the
shares are payable only if the executive is employed with the Company
6
<PAGE>
<PAGE>
<FN>
and in good standing at the end of the restriction period. The amounts
shown in the table represent the dollar value based on the stock price per
share at award date and do not reflect any payment to the individual.
<F4> Long-term performance awards paid in fiscal year 1998 were based on the
achievement of performance objectives over a five-year period.
<F5> Includes for fiscal 1998: (a) the value of the benefit to the named
individuals of the remainder of premiums paid by the Company on behalf of
the named individuals pursuant to the Company's "split dollar" insurance
program in the following amounts: C. F. Knight-$16,680; G. W.
Tamke-$5,465; A. E. Suter-$1,669; J. G. Berges-$899 and (b) contributions
by the Company on behalf of the named individuals to the Company's matched
savings plan in the following amounts: C. F. Knight-$50,000; G. W.
Tamke-$26,250; A. E. Suter-$25,000; J. G. Berges-$20,000; W. J.
Galvin-$17,750; R. W. Staley-$16,875.
<F6> Mr. Knight has an employment agreement, which has a term expiring on
September 30, 2004, which provides a minimum annual compensation of
$900,000 during the term or as long as Mr. Knight remains a senior execu-
tive. The agreement also provides for his continued participation in the
Company's incentive and benefit plans for the balance of the term, and
vesting in the event of his death, disability or retirement or if he is no
longer serving as Chief Executive Officer. Under the terms of the
agreement, after retirement Mr. Knight will be available at management's
request to consult with the Company up to 30 days per year, for a period
of not less than 15 years and will be compensated with a daily consulting
fee based on his daily salary rate at the time of his retirement.
Consistent with Company practice toward other retired executives who serve
as consultants, he will also continue to have access to Company facilities
and services, including the Company's aircraft, car, driver, financial
planning and club memberships subject to certain conditions including not
competing with the Company.
<F7> Mr. Knight was also President until March 1997 when Mr. Tamke was elected
President and Mr. Berges was elected a Vice Chairman. In October 1997 Mr.
Tamke was named Chief Operating Officer, succeeding Mr. Suter who was
named Chief Administrative Officer.
</TABLE>
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS<F1>
---------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS/SARS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM<F2>
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION -------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 0% ($) 5% ($) 10% ($)
---- ------------ ------------ ----------- ---------- ------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
C. F. Knight............. 96,667 9.9 56.81 10/7/07 0 3,453,823 8,752,665
G. W. Tamke.............. 0 n/a n/a n/a n/a n/a n/a
A. E. Suter.............. 20,000 2.1 54.97 11/4/07 0 691,390 1,752,120
J. G. Berges............. 0 n/a n/a n/a n/a n/a n/a
W. J. Galvin............. 0 n/a n/a n/a n/a n/a n/a
R. W. Staley............. 20,000 2.1 54.97 11/4/07 0 691,390 1,752,120
All Optionees<F3><F4>.... 974,256 100.0 57.71 various 0 35 million 90 million
All Stockholders......... n/a n/a n/a n/a 0 17 billion 43 billion
Optionees' Gain as % of
All Stockholders' less than less than
Gain................... n/a n/a n/a n/a n/a 1% 1%
<FN>
- -------
<F1> Options were granted at 100% of the market price on the date of grant,
become exercisable one-third after one year from the date of grant, an
additional one-third after two years from the date of grant, and are
exercisable in full after three years from the date of grant.
<F2> The dollar amounts under these columns are the result of calculations at
0% and at the 5% and 10% rates set by the Securities and Exchange
Commission and therefore are not intended to forecast possible future
appreciation, if any, of the Company's stock price. Potential realizable
values for all stockholders are based on 438.2 million shares outstanding
at October 1, 1998 and a per share price of $62.25.
7
<PAGE>
<PAGE>
<FN>
<F3> Based on total number of options awarded in fiscal year 1998.
<F4> No gain to the optionees is possible without an increase in stock price,
which will benefit all stockholders commensurately. A zero percent stock
price appreciation will result in zero dollars for the optionee.
</TABLE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END(#) AT FY-END($)<F1>
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE (#) REALIZED ($)<F1> EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ---------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. F. Knight............ 0 0 115,670 96,667 4,418,423 450,111
G. W. Tamke............. 0 0 67,926 57,510 2,057,837 915,664
A. E. Suter............. 0 0 59,006 20,000 2,262,712 130,000
J. G. Berges............ 1,706 78,529 48,141 20,351 1,730,110 340,244
W. J. Galvin............ 0 0 26,777 18,055 802,399 301,858
R. W. Staley............ 19,008 921,293 4,992 20,000 228,072 130,000
<FN>
- -------
<F1> The values represent the difference between the exercise price of the
options and the market price of the Company's common stock on the date of
exercise and at fiscal year-end, respectively.
</TABLE>
<TABLE>
LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
<CAPTION>
ESTIMATED FUTURE
PAYOUTS UNDER
NON-STOCK
PERFORMANCE OR PRICE-BASED PLANS
NUMBER OF OTHER PERIOD
PERFORMANCE UNTIL MATURATION TARGET/MAXIMUM
NAME UNITS OR PAYOUT (# OF SHARES)
---- ----------- ---------------- -----------------
<S> <C> <C> <C>
C. F. Knight.................................... 0 n/a n/a
G. W. Tamke..................................... 0 n/a n/a
A. E. Suter..................................... 0 n/a n/a
J. G. Berges.................................... 0 n/a n/a
W. J. Galvin.................................... 0 n/a n/a
R. W. Staley.................................... 0 n/a n/a
</TABLE>
8
<PAGE>
<PAGE>
PENSION PLAN TABLE
The following table shows the annual benefits payable upon retirement at
age 65 for various compensation and years of service combinations under the
Emerson Electric Co. Retirement Plan and a related supplemental executive
retirement plan.
<TABLE>
<CAPTION>
ANNUAL RETIREMENT BENEFIT AT AGE 65 AFTER
------------------------------------------------------------------------------
AVERAGE ANNUAL 10 YEARS 15 YEARS 20 YEARS 25 YEARS 35 YEARS
COMPENSATION OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE
- -------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 600,000........................... $ 88,444 $132,665 $176,887 $ 221,109 $ 309,553
1,100,000........................... 163,444 245,165 326,887 408,609 572,053
1,600,000........................... 238,444 357,665 476,887 596,109 834,553
2,100,000........................... 313,444 470,165 626,887 783,609 1,097,053
2,600,000........................... 388,444 582,665 776,887 971,109 1,359,553
3,100,000........................... 463,444 695,165 926,887 1,158,609 1,622,053
3,600,000........................... 538,444 807,665 1,076,887 1,346,109 1,884,553
4,100,000........................... 613,444 920,165 1,226,887 1,533,609 2,147,053
</TABLE>
Retirement benefits under the plans are computed on the basis of an annuity
with five years certain, unless the participant elects another method of
payment. The benefit amounts in the Pension Plan Table above have already been
adjusted for Social Security (or any other benefits). The dollar amounts in the
salary and bonus columns of the Summary Compensation Table above are
substantially the same as the compensation covered by the plans, but deferred
bonuses may cause such amounts to vary from the amounts shown in the Summary
Compensation Table. The credited years of service covered by the plans for each
of the persons named in the Summary Compensation Table above are as follows: C.
F. Knight, 26; G. W. Tamke, 10; A. E. Suter, 19; J. G. Berges, 23; W. J.
Galvin, 26; R. W. Staley, 23. Payment of the specified retirement benefits is
contingent upon continuation of the plan in its present form until the employee
retires. The benefits of certain employees may be reduced under the Emerson
Electric Co. Retirement Plan to meet the limits of the Internal Revenue Code.
An employee who is subject to a reduction of benefits under the Internal
Revenue Code may be selected to participate in the supplemental executive
retirement plan. Participation in the supplemental plan is by award, subject to
the sole approval by the Compensation and Human Resources Committee. Of the
officers listed above, C. F. Knight, A. E. Suter, W. J. Galvin and R. W. Staley
have been selected to participate in the supplemental plan. The estimated total
retirement benefits payable at age 65 to C. F. Knight, G. W. Tamke, A. E.
Suter, J. G. Berges, W. J. Galvin, and R. W. Staley are 75%, 7%, 29%, 15%, 50%
and 33% respectively, of the dollar amounts shown in the salary and bonus
columns of the Summary Compensation Table. Payment of the retirement benefits
from the supplemental plan is contingent upon continuation of the plan in its
present form until the employee retires.
9
<PAGE>
<PAGE>
REPORT OF THE COMPENSATION AND HUMAN RESOURCES COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation and Human Resources Committee of the Board of Directors
(the "Committee"), composed of four non-employee directors, establishes and
administers the executive compensation program for the Company's top
executives. The program supports the Company's commitment to enhancing
stockholder value. It is designed to attract and retain high-quality
executives, to encourage them to make career commitments to the Company, and to
accomplish the Company's short- and long-term objectives. The executive
compensation package has uniquely served the Company's stockholders since 1977
by rewarding and motivating executives for the accomplishment of the Company's
objectives. The executive compensation program is a focused, well-defined
management tool that reinforces the Company's culture and commitment to
stockholders.
The Committee has historically viewed compensation as a total package that
includes base salary and variable short- and long-term (performance-based)
compensation. The total program is structured to deliver a significant
percentage of pay through at-risk pay programs which reward executives if the
performance of the Company warrants. Basic principles underlying the pay
programs are the following:
* Maximize stockholder value.
* Retain, reward and motivate key executives.
* Compensate for performance rather than create a sense of entitlement.
* Reward team results.
* Build executive stock ownership.
COMPONENTS OF EXECUTIVE COMPENSATION
To determine the competitive level of total compensation (including total
annual cash and long-term incentives), the Committee sets the total pay target
in a competitive compensation range as benchmarked against published survey
data and data derived through special studies of comparable industries,
including those shown in the peer group performance graph.
TOTAL ANNUAL CASH COMPENSATION: Cash compensation consists of base salary
and annual cash incentives (bonuses), with the sum of the two referred to as
"Total Cash Compensation." Currently, approximately 1,000 key executives
participate in the Total Cash Compensation program. A Total Cash Compensation
target, including base salary and incentive, is established for each executive
officer position using benchmark survey comparisons. Annual increases, if any,
are based on individual merit and Company affordability. The annual incentive
opportunity represents from 25% to 60% of total cash compensation. Payment of
the annual cash incentive portion is based on the financial performance of the
Company versus pre-established targets. The Committee annually establishes and
approves short-term financial targets which are important to the Company and
its stockholders. Typical targets include sales, earnings per share, pre-tax
earnings and net profits, return on equity, and asset management. To a lesser
degree, individual performance and potential can be a factor. The relative
importance of each target is determined each year by the Committee, and may
vary depending upon the Company's financial objectives for that year.
LONG-TERM COMPENSATION INCENTIVES: Long-term incentive awards, consisting
of performance shares, stock options and restricted stock, are a substantial
portion of the total compensation packages of certain key senior executives and
are specifically focused on the Company's longer-term objectives. Long-term
programs are paid in stock. The Company's continuing philosophy is that
executives are expected to hold the stock earned under the programs. The value
of current executive stock holdings is significant, in absolute terms and in
relation to base pay, though the Company does not establish specific ownership
targets. Long-term plan participation and size of awards are determined by the
individual's potential to make significant contributions to the Company's
financial results, level of management responsibility and individual
performance and potential.
PERFORMANCE SHARES: The performance shares plan reinforces the Company's
five-year objectives and rewards executives for achieving those objectives. The
Company has had continuing performance shares programs since 1977.
Participation in this program is limited, and only executives who can most
directly influence the Company's long-term financial success are included.
Awards are denominated in share units, with no dividend payments during
10
<PAGE>
<PAGE>
the performance period. The Committee approves the performance measures and
evaluates the performance of the Company against those measures. Historically,
the Company's five-year plans have targeted earnings per share growth
objectives and other financial measures deemed appropriate to accomplish the
Company's five-year performance targets. The final payout (paid in stock) can
range from 0% to 100% of the target award, depending upon the level of
achievement of the established financial targets.
STOCK OPTIONS: The stock option plan provides the long-term focus for a
larger group of key employees. Currently, approximately 1,700 key employees are
eligible to be considered for participation in the stock option program. Awards
are made approximately every three years and are vested one-third each year.
Options are granted at 100% of the fair market value of the Company's common
stock on the date of grant and expire ten years from the date of grant.
RESTRICTED STOCK: The restricted stock program was designed primarily to
retain key executives and potential top management of the Company while
building stock ownership, long-term equity and linking pay directly with
stockholder return. Participation has been highly selective and limited to a
very small group of executives. The Committee views this program as an
important management succession planning and retention tool. The restriction
period for most awards is ten years.
The Company's incentive compensation programs are designed to reward
executives for achievement of the Company's performance objectives. The plans,
as approved by stockholders, are designed to comply with Internal Revenue Code
Section 162(m) to ensure tax deductibility. The Committee considers it
important to retain the flexibility to design compensation programs that are in
the best interest of the Company and the stockholders.
CEO COMPENSATION
In making its decisions this year, the Committee considered the Company's
very strong performance. In fiscal year 1998, earnings per share increased
10.8% over fiscal year 1997. Over the last five years, the Company has achieved
double-digit compound annual growth rates for sales, operating profit, net
earnings, earnings per share, and dividends per share. The Committee noted that
in the past five years, the Company's compound average annual return to
stockholders was 18.9%, exceeding the performance of the Dow Jones Electrical
Components and Equipment Index, as shown in the performance graph. In fiscal
year 1998, the Company achieved its 41st consecutive year of increased earnings
and earnings per share and 42nd consecutive year of increased dividends. This
exceptional record of consistent financial performance is shared by no other
publicly-traded American industrial manufacturing firm of which the Committee
is aware. Mr. Knight has been Chief Executive Officer for 25 years of this
extraordinary record of consistency. The Committee's determinations were in
recognition of this record of exceptional performance; the continuing value of
Mr. Knight's management expertise; his insight into the Company's global
strategies, operations and markets; and his key role in the dramatic increase
in stockholder value during his term as Chief Executive Officer.
For fiscal year 1998, Mr. Knight received a base salary of $900,000 and was
awarded a bonus of $2,500,000 as the Company's financial performance for fiscal
year 1998 exceeded the target previously set by the Committee under the terms
of the Annual Incentive Plan approved by stockholders. Mr. Knight also was
awarded 96,667 stock options as part of the Company's normal cycle of stock
option awards. Mr. Knight's employment contract is described in footnote 6 to
the Summary Compensation Table.
Compensation and Human Resources Committee
V. R. Loucks, Jr., Chairman
D. C. Farrell
J. A. Frates
E. E. Whitacre, Jr.
11
<PAGE>
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the Committee members has served as an officer or employee of the
Company or a subsidiary of the Company except J. A. Frates, who was chief
executive officer of Ridge Tool Company when it was acquired by the Company in
1966 and for approximately two years thereafter.
A. E. Suter, a director and executive officer of the Company, served as a
director and member of the Executive Compensation and Stock Option Committee of
Furniture Brands International Inc. during the last fiscal year, and R. B.
Loynd, Chairman of the Executive Committee of Furniture Brands International
Inc., served as a director of the Company.
PERFORMANCE GRAPH
The following graph compares cumulative total returns (assuming
reinvestment of dividends) on the Company's common stock against the Standard &
Poor's Composite 500 Stock Index (S&P 500) and the Dow Jones Electrical
Components and Equipment Index (DJEE) for the five-year period ended September
30, 1998.
[GRAPH]
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998 CAGR<F*>
---- ---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C>
EMERSON $100 $104 $128 $165 $216 $238 18.9%
S&P 500 100 104 134 162 227 248 19.9
DJEE 100 108 126 158 210 202 15.1
<FN>
<F*>Compound Annual Growth Rate
</TABLE>
12
<PAGE>
<PAGE>
II. VOTING
The affirmative vote of a majority of the shares entitled to vote which are
present in person or represented by proxy at the 1999 Annual Meeting is
required to elect directors and to act on any other matters properly brought
before the meeting. Shares represented by proxies which are marked "withhold
authority" with respect to the election of any one or more nominees for
election as directors and proxies which are marked to deny discretionary
authority on other matters will be counted for the purpose of determining the
number of shares represented by proxy at the meeting. Such proxies will thus
have the same effect as if the shares represented thereby were voted against
such nominee or nominees and against such other matters, respectively. If a
broker indicates on the proxy that it does not have discretionary authority as
to certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
The Company knows of no other matters to come before the meeting. If any
other matters properly come before the meeting, the proxies solicited hereby
will be voted on such matters in accordance with the judgment of the persons
voting such proxies.
III. INDEPENDENT AUDITORS
KPMG Peat Marwick LLP was the auditor for the fiscal year ended September
30, 1998, and the Audit Committee has selected it as auditor for the year ending
September 30, 1999. A representative of KPMG Peat Marwick LLP will be present at
the meeting with the opportunity to make a statement and/or respond to
appropriate questions from stockholders.
IV. STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2000 Annual
Meeting scheduled to be held on February 1, 2000, must be received by the
Company by August 17, 1999 for inclusion in the Company's proxy statement and
proxy relating to that meeting. Upon receipt of any such proposal, the Company
will determine whether or not to include such proposal in the proxy statement
and proxy in accordance with regulations governing the solicitation of proxies.
In order for a stockholder to nominate a candidate for director, under the
Company's Bylaws timely notice of the nomination must be received by the
Company in advance of the meeting. Ordinarily, such notice must be received not
less than 90 nor more than 120 days before the meeting (but if the Company
gives less than 100 days' (1) notice of the meeting or (2) prior public
disclosure of the date of the meeting, then such notice must be received within
10 days after notice of the meeting is mailed or other public disclosure of the
meeting is made) or between October 3 and November 2, 1999 for the 2000 Annual
Meeting. The stockholder filing the notice of nomination must describe various
matters regarding the nominee, including such information as name, address,
occupation and shares held.
In order for a stockholder to bring other business before a stockholder
meeting, timely notice must be received by the Company within the time limits
described above. Such notice must include a description of the proposed
business, the reasons therefor, and other specified matters. These requirements
are separate from and in addition to the requirements a stockholder must meet
to have a proposal included in the Company's proxy statement. The foregoing
time limits also apply in determining whether notice is timely for purposes of
rules adopted by the Securities and Exchange Commission relating to the
exercise of discretionary voting authority.
In each case the notice must be given to the Secretary of the Company,
whose address is 8000 West Florissant Avenue, P.O. Box 4100, St. Louis,
Missouri 63136. Any stockholder desiring a copy of the Company's Bylaws will be
furnished one without charge upon written request to the Secretary.
13
<PAGE>
<PAGE>
EMERSON [logo]
EMERSON ELECTRIC CO.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned does hereby appoint C. F. KNIGHT, W. W. WITHERS, and H. M.
SMITH, or any of them, the true and lawful attorneys in fact, agents and
proxies of the undersigned to represent the undersigned at the Annual Meeting
of the Stockholders of EMERSON ELECTRIC CO., to be held on February 2, 1999,
commencing at 10:00 A.M., St. Louis Time, at the office of the Company at 8000
West Florissant Avenue, St. Louis, Missouri, and at any and all adjournments of
said meeting, and to vote all the shares of Common Stock of the Company
standing on the books of the Company in the name of the undersigned as
specified and in their discretion on such other business as may properly come
before the meeting.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
- ----------------------------------------------------------------------------
FOLD AND DETACH HERE
IT IS IMPORTANT THAT YOU VOTE, SIGN AND RETURN
THE PROXY ABOVE AS SOON AS POSSIBLE. BY
DOING SO, YOU MAY SAVE THE COMPANY THE
EXPENSE OF ADDITIONAL SOLICITATION.
<PAGE>
<PAGE>
Please mark
your vote as
indicated in
this sample /X/
MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:
1. ELECTION OF DIRECTORS
FOR WITHHOLD AUTHORITY
all nominees listed below to vote for all nominees
(except as marked to the listed below
contrary below)
/ / / /
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name on the list below.)
D. C. Farrell, J. A. Frates, C. F. Knight, R. B. Loynd, R. W. Staley
I PLAN TO ATTEND THE ANNUAL MEETING.
/ /
The undersigned hereby acknowledges receipt of Notice of said Annual Meeting
and accompanying Proxy Statement, each dated December 15, 1998.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1.
SIGNATURE SIGNATURE DATE
------------------- --------------------- --------------
(IF STOCK IS OWNED IN JOINT NAMES ALL OWNERS MUST SIGN).
- -----------------------------------------------------------------------------
FOLD AND DETACH HERE
Emerson [logo]
ADMISSION TICKET
Annual Meeting of Stockholders
Tuesday, February 2, 1999
10:00 A.M.
Emerson Electric Co. Headquarters
8000 W. Florissant Avenue
St. Louis, MO 63136
==================================
PLEASE PRESENT THIS TICKET
AT THE REGISTRATION DESK
UPON ARRIVAL
==================================
NON-TRANSFERABLE
<PAGE>
<PAGE>
EMERSON [logo]
EMERSON ELECTRIC CO.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned does hereby appoint C. F. KNIGHT, W. W. WITHERS, and H. M.
SMITH, or any of them, the true and lawful attorneys in fact, agents and
proxies of the undersigned to represent the undersigned at the Annual Meeting
of the Stockholders of EMERSON ELECTRIC CO., to be held on February 2, 1999,
commencing at 10:00 A.M., St. Louis Time, at the office of the Company at 8000
West Florissant Avenue, St. Louis, Missouri, and at any and all adjournments of
said meeting, and to vote all the shares of Common Stock of the Company
standing on the books of the Company in the name of the undersigned as
specified and in their discretion on such other business as may properly come
before the meeting.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
- ------------------------------------------------------------------------------
FOLD AND DETACH HERE
A REMINDER
We have previously sent to you proxy soliciting material relating to the
Annual Meeting of Stockholders to be held on February 2, 1999.
According to our latest records, we have not as yet received your proxy.
The time before the meeting is short and many of our shares are held in small
amounts. Your signed proxy will be helpful, whether your holding is large or
small, and will aid us in avoiding further expense and delay.
A return envelope is enclosed for your convenience.
Thank you for your cooperation.
IT IS IMPORTANT THAT YOU VOTE, SIGN AND RETURN
THE PROXY ABOVE AS SOON AS POSSIBLE. BY
DOING SO, YOU MAY SAVE THE COMPANY THE
EXPENSE OF ADDITIONAL SOLICITATION.
<PAGE>
<PAGE>
Please mark
your vote as
indicated in
this sample /X/
MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:
1. ELECTION OF DIRECTORS
FOR WITHHOLD AUTHORITY
all nominees listed below to vote for all nominees
(except as marked to the listed below
contrary below)
/ / / /
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name on the list below.)
D. C. Farrell, J. A. Frates, C. F. Knight, R. B. Loynd, R. W. Staley
I PLAN TO ATTEND THE ANNUAL MEETING.
/ /
The undersigned hereby acknowledges receipt of Notice of said Annual Meeting
and accompanying Proxy Statement, each dated December 15, 1998.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1.
SIGNATURE SIGNATURE DATE
------------------- --------------------- --------------
(IF STOCK IS OWNED IN JOINT NAMES ALL OWNERS MUST SIGN).
- -----------------------------------------------------------------------------
FOLD AND DETACH HERE
Emerson [logo]
ADMISSION TICKET
Annual Meeting of Stockholders
Tuesday, February 2, 1999
10:00 A.M.
Emerson Electric Co. Headquarters
8000 W. Florissant Avenue
St. Louis, MO 63136
==================================
PLEASE PRESENT THIS TICKET
AT THE REGISTRATION DESK
UPON ARRIVAL
==================================
NON-TRANSFERABLE
<PAGE>
<PAGE>
APPENDIX
Page 12 of the printed proxy contains a Performance Graph comparing
cumulative total returns for the five year period ended September 30, 1998.
The information contained in said graph is depicted in the table immediately
following the graph.
