<PAGE> 1
PROSPECTUS SUPPLEMENT Filed pursuant to Rule 424(b)(2)
(To Prospectus dated November 12, 1998) Registration No. 333-66865
EMERSON ELECTRIC CO. LOGO
$40,000,000
Emerson Electric Co.
FLOATING RATE NOTES DUE MAY 20, 2039
------------------------
EMERSON ELECTRIC CO. WILL PAY INTEREST ON THE NOTES AT A FLOATING RATE BASED
UPON A ONE-MONTH COMMERCIAL PAPER RATE MINUS 19 BASIS POINTS (0.19%). EMERSON
WILL PAY INTEREST ON EACH AUGUST 20, NOVEMBER 20, FEBRUARY 20 AND MAY 20,
BEGINNING AUGUST 20, 1999. EMERSON WILL NOT HAVE THE RIGHT TO REDEEM THE NOTES
BEFORE THEIR SCHEDULED MATURITY ON MAY 20, 2039. HOLDERS OF THE NOTES MAY
REQUIRE EMERSON TO REDEEM ALL OR A PORTION OF THE NOTES ON MAY 20 OF EVERY THIRD
YEAR, BEGINNING ON MAY 20, 2009, AT THE REDEMPTION PRICES SPECIFIED IN THIS
PROSPECTUS SUPPLEMENT, PLUS INTEREST ACCRUED ON THE NOTES TO THE DATE THAT
EMERSON REDEEMS THE NOTES. EMERSON WILL HAVE THE RIGHT TO SHORTEN THE MATURITY
OF THE NOTES UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT. EMERSON WILL ISSUE THE NOTES ONLY IN DENOMINATIONS OF $1,000 AND
INTEGRAL MULTIPLES OF $1,000.
------------------------
PRICE 100% AND ACCRUED INTEREST, IF ANY
------------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS COMPANY
------------ ------------- ------------
<S> <C> <C> <C>
Per Note...................................... 100.0% 1.0% 99.0%
Total......................................... $40,000,000 $400,000 $39,600,000
</TABLE>
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The Underwriter expects to deliver the Notes to the purchasers on May 20, 1999.
------------------------
MORGAN STANLEY DEAN WITTER
May 10, 1999
<PAGE> 2
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Use of Proceeds............................................. S-3
Ratio of Earnings to Fixed Charges.......................... S-3
Description of the Notes.................................... S-3
Underwriting................................................ S-7
Validity of the Notes....................................... S-8
PROSPECTUS
Where You Can Find More Information......................... 2
Information About Emerson................................... 3
Use of Proceeds............................................. 3
Ratio of Earnings to Fixed Charges.......................... 3
Description of the Debt Securities.......................... 4
Book-Entry Debt Securities.................................. 8
Plan of Distribution........................................ 9
Experts..................................................... 10
</TABLE>
------------------------
You should rely only on the information contained in this Prospectus
Supplement and the Prospectus. We have not authorized anyone to provide you with
information different from that contained in this Prospectus Supplement or the
Prospectus. We are offering to sell Notes and seeking offers to buy Notes, only
in jurisdictions where offers and sales are permitted. The information contained
in this Prospectus Supplement and the Prospectus is accurate only as of the date
of this Prospectus Supplement, regardless of the time of delivery of this
Prospectus Supplement or any sale of the Notes.
S-2
<PAGE> 3
USE OF PROCEEDS
Emerson expects to use the net proceeds from the sale of the Notes
(estimated at $39.6 million, before deducting estimated expenses of this
offering) to repay a portion of its commercial paper borrowings. Such commercial
paper was issued for general corporate purposes and working capital. As of May
10, 1999, such commercial paper had a weighted average interest rate (on a
bond-equivalent yield basis) of approximately 4.9% per annum with a weighted
average maturity of approximately 38 days.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of
the Company for the periods indicated. For purposes of computation of the ratio
of earnings to fixed charges, earnings consist of income before income taxes and
cumulative effects of changes in accounting principles plus the amount of fixed
charges. Fixed charges consist of interest expense and that portion of rental
expense deemed to represent interest.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------------- ------------
1994 1995 1996 1997 1998 1998
---- ---- ---- ---- ---- ------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............. 11.0x 9.7x 9.8x 11.3x 10.2x 8.8x
==== ==== ==== ==== ==== ===
</TABLE>
DESCRIPTION OF THE NOTES
Emerson will issue the Notes under an Indenture dated as of December 10,
1998 between Emerson and The Bank of New York, as Trustee. An Officers'
Certificate sets forth the terms of the Notes in accordance with the Indenture
and limits the Notes to $40 million aggregate principal amount. Information
about the Indenture and the general terms and provisions of the Notes is in the
accompanying Prospectus under "Description of the Debt Securities."
Emerson will issue the Notes in book-entry form, as one or more Notes
registered in the name of the nominee of The Depository Trust Company, which
will act as Depositary. Beneficial interests in book-entry Notes will be shown
on, and transfers of the Notes will be made only through, records maintained by
the Depositary and its participants. The provisions set forth under "Book-Entry
Debt Securities" in the accompanying Prospectus will apply to the Notes. The
Notes will mature on May 20, 2039, unless Emerson exercises its right to shorten
the maturity of the Notes, as described under "Conditional Right to Shorten
Maturity" below.
The Notes will be issued only in denominations of $1,000 and any integral
multiples of $1,000.
PAYMENT OF INTEREST AND PRINCIPAL
Emerson will pay interest on the Notes in immediately available funds to
the persons in whose names the Notes are registered at the close of business on
the Record Date. The "Record Date" with respect to any interest payment date
will be the date 15 calendar days prior to such interest payment date, whether
or not such date is a Business Day. The term "Business Day" means any day other
than a Saturday or Sunday or a day on which applicable law authorizes or
requires banking institutions in the City of New York, New York to close.
The Notes will bear interest from the date of issuance and will be payable
quarterly on August 20, November 20, February 20 and May 20 of each year,
commencing August 20, 1999 (with respect to the period from and including the
date of issuance to but excluding August 20, 1999) and on the maturity date
(with respect to the period from and including February 20, 2039 to but
excluding May 20, 2039). If any interest payment date would fall on a day that
is not a Business Day, such interest payment date will be postponed to the
following day that is a Business Day. If the maturity date or any earlier
repayment date of
S-3
<PAGE> 4
the Notes would fall on a day that is not a Business Day, the payment of
principal and interest will be made on the next succeeding Business Day. No
interest on such payment will accrue for the period from and after such maturity
or repayment date, as the case may be. Interest payments will be the amount of
interest accrued from and including the date the Notes are issued or from and
including the last date in respect of which interest has been paid, to but
excluding the interest payment date or maturity date or date of repayment.
The Notes will bear interest for each Interest Period (as defined below) at
a variable rate per annum based on the Commercial Paper Rate (as defined below)
for each Accrual Period (as defined below) within such Interest Period, minus a
"Spread" of 19 basis points. The "Interest Period" means each period beginning
on the date of issuance of the Notes or an interest payment date up to but
excluding the next succeeding interest payment date. The "Accrual Period" means
the period beginning on and including the date of issuance of the Notes and
ending on and excluding June 20, 1999, and thereafter each successive one-month
period beginning on and including the 20th of each month and ending on and
including the day preceding the 20th of the next month, whether or not that day
is a Business Day. Interest during each Accrual Period will accrue at the
Commercial Paper Rate, minus the Spread for such Accrual Period on the
outstanding principal amount of the Notes and on the sum of the amounts of
interest for each of the previous Accrual Periods within an Interest Period.
The Notes will bear interest at the interest rate as determined by the
Calculation Agent (as defined below) on the Calculation Date (as defined below)
and calculated with reference to the Commercial Paper Rate and the Spread for
each Accrual Period within an Interest Period. The term "Commercial Paper Rate"
means, with respect to any Interest Determination Date (as defined below), the
Bond Equivalent Yield (as defined below) of the rate on such date for commercial
paper having an index maturity of 30 days (the "Index Maturity"), as such rate
will be published in "Statistical Release H.15(519), Selected Interest Rates,"
published by the Board of Governors of the Federal Reserve System, or any
successor publication of the Board of Governors of the Federal Reserve System
("H.15(519)"), under the heading "Commercial Paper--Nonfinancial." An index
maturity of one month will be deemed equivalent to an index maturity of 30 days.
The following procedures will be followed if the Commercial Paper Rate cannot be
determined as described above:
- In the event that such rate is not published by 9:00 A.M., New York City
time, on the Calculation Date pertaining to such Interest Determination
Date, then the Commercial Paper Rate will be the Bond Equivalent Yield of
the rate on such Interest Determination Date for commercial paper of the
specified Index Maturity as published in H.15 Daily Update under the
heading "Commercial Paper--Nonfinancial."
- If by 3:00 P.M., New York City time, on such Calculation Date such rate
is not yet available in either H.15(519) or H.15 Daily Update, then the
Commercial Paper Rate will be the Bond Equivalent Yield of the arithmetic
mean of the offered rates as of 11:00 A.M., New York City time, on such
Interest Determination Date of three leading dealers of commercial paper
in The City of New York selected by the Calculation Agent (after
consultation with Emerson) for commercial paper of the specified Index
Maturity placed for an industrial issuer whose bond rating is "AA," or
the equivalent, from a nationally recognized statistical rating agency.
- If the dealers selected by the Calculation Agent are not quoting offered
rates as mentioned above, the Commercial Paper Rate with respect to such
Interest Determination Date will remain the Commercial Paper Rate then in
effect on such Interest Determination Date.
"Bond Equivalent Yield" will be a yield calculated in accordance with the
following formula:
- Bond Equivalent Yield = D X 365
--------------------- X 100
360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper
quoted on a bank discount basis and expressed as a decimal, and "M"
refers to the actual number of days in the period for which interest is
being calculated.
S-4
<PAGE> 5
The "Interest Determination Date" for each Accrual Period within each
Interest Period shall be the second Business Day next preceding such Accrual
Period. The "Calculation Date" with respect to an Interest Determination Date
shall be the tenth Business Day after such Interest Determination Date.
Interest on the Notes will be computed and paid on the basis of a 360-day
year of twelve 30-day months. Interest on the Notes will be equal to the sum of
interest amounts for each Accrual Period within that Interest Period. Interest
for an Accrual Period will be calculated in accordance with the following
formula:
Interest for Accrual Period = APA X (CPR - Spread) X T/360
where, "APA" refers to adjusted principal amount and means (i) in respect of
the first Accrual Period in an Interest Period, the principal amount of a
Note and (ii) in respect of each succeeding Accrual Period in the Interest
Period, an amount equal to the sum of (x) the outstanding principal amount
of such Note and (y) the sum of the amounts of interest for each of the
previous Accrual Periods in such Interest Period; "CPR" refers to the
applicable Commercial Paper Rate for such Accrual Period; and "T" refers to
30 with respect to each Accrual Period.
The interest rate on the Notes will in no event be higher than the maximum
rate permitted by New York law as the same may be modified by United States law
of general application.
The Calculation Agent will, upon the request of the holder of any Note,
provide the interest rate then in effect and, if determined, the interest rate
that will become effective for the next Accrual Period. The Calculation Agent is
The Bank of New York until such time as Emerson appoints a successor Calculation
Agent. All calculations made by the Calculation Agent in the absence of manifest
error shall be conclusive for all purposes and binding on Emerson and the
holders of the Notes. Emerson may appoint a successor Calculation Agent with the
written consent of the Trustee, which consent shall not be unreasonably
withheld.
SAME-DAY SETTLEMENT AND PAYMENT
The Notes will trade in the Depositary's same-day funds settlement system
until maturity or until Emerson issues the Notes in definitive form. The
Depositary will therefore require secondary market trading activity in the Notes
to settle in immediately available funds. Emerson can give no assurance as to
the effect, if any, of settlement in immediately available funds on trading
activity in the Notes.
REDEMPTION BY EMERSON
Emerson will not have the right to redeem the Notes before their scheduled
or shortened maturity. Emerson will not make any sinking fund payments.
REDEMPTION AT OPTION OF HOLDER
Each of the Notes will be redeemable at the option of the Holder, in whole
or in part, on the redemption dates and at the redemption prices (in each case
expressed as a percentage of the principal amount) set forth in the following
table:
<TABLE>
<CAPTION>
REDEMPTION
DATE PRICE
---- ----------
<S> <C>
May 20, 2009................................... 99.00%
May 20, 2012................................... 99.25%
May 20, 2015................................... 99.50%
May 20, 2018................................... 99.75%
</TABLE>
and commencing May 20, 2021 and on May 20 of every third year thereafter at 100%
of the principal amount, through and including May 20, 2039, in each case,
together with accrued and unpaid interest, if any, to the redemption date
(subject to the rights of Holders of record on the relevant record date to
receive interest due on an interest payment date).
S-5
<PAGE> 6
In order for a Note to be redeemed, the Paying Agent must receive, at least
30 but not more than 60 calendar days prior to the optional redemption date,
either the Note with the form entitled "Option to Elect Redemption" on the
reverse of the Note duly completed or a telegram, facsimile transmission or a
letter from a member of a national securities exchange or a member of the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States which must set forth
- the name of the Holder of the Note
- the principal amount of the Note
- the principal amount of the Note to be redeemed
- the certificate number or a description of the tenor and terms of the
Note
- a statement that the option to elect redemption is being exercised
thereby and
- a guarantee that the Note to be redeemed, together with the duly
completed form entitled "Option to Elect Redemption" on the reverse of
the Note will be received by the Paying Agent not later than the fifth
Business Day after the date of such telegram, facsimile transmission or
letter.
If a Holder exercises the redemption option, Emerson will deposit an amount
equal to the principal amount of such Note to be redeemed with the Trustee not
later than 2:00 p.m., on the Business Day prior to the redemption date. Such
Note shall be transferred through a book entry on the books of the Depositary to
Emerson upon receipt of notice from the Trustee that such funds, together with
accrued interest on the Note to be redeemed to the redemption date, have been
received by the Trustee. The Trustee will distribute to the Holder of record of
the redeemed Note such principal amount and accrued interest. A Holder may
exercise the redemption option for less than the entire principal amount of the
Note, but, in that event, the principal amount of the Note remaining outstanding
after redemption must be in an authorized denomination.
The transactions described above will be executed on the redemption date
through the Depositary in accordance with the procedures of the Depositary. The
accounts of participants will be debited and credited and the corresponding
Notes delivered by book-entry as necessary to effect the redemption thereof. For
further information with respect to transfers and settlement through the
Depositary, see "Book-Entry Debt Securities" in the accompanying Prospectus.
CONDITIONAL RIGHT TO SHORTEN MATURITY
Emerson intends to deduct interest paid on the Notes for United States
federal income tax purposes. However, there have been proposed federal tax law
changes over the past few years that, among other things, would have prohibited
an issuer from deducting interest payments on debt instruments with a maturity
of more than 40 years. While none of these proposals has become law, there can
be no assurance that similar legislation affecting Emerson's ability to deduct
interest paid on the Notes will not be enacted in the future or that any such
legislation would not have a retroactive effective date. As a result, there can
be no assurance that a Tax Event (as defined below) will not occur.
Upon the occurrence of a Tax Event, Emerson, without the consent of the
Holders of the Notes, will have the right to shorten the maturity of the Notes
to the minimum extent required, in the opinion of nationally recognized tax
counsel, such that, after the shortening of the maturity, interest paid on the
Notes will be deductible for United States federal income tax purposes or, if
such counsel is unable to opine definitively as to such a minimum period, the
minimum extent so required to maintain Emerson's interest deduction to the
extent deductible under current law as determined in good faith by the Finance
Committee of the Board of Directors of Emerson, after receipt of an opinion of
such counsel regarding the applicable legal standards. In such case, the amount
payable on such Notes on such new maturity date will be equal to 100% of the
principal amount of such Notes plus interest accrued on such Notes to the date
such Notes mature on such new maturity date. There can be no assurance that
Emerson would not exercise its right to shorten the maturity of the Notes on the
occurrence of such a Tax Event or as to the period by which such maturity would
be shortened. In the event that Emerson elects to exercise its right to shorten
the maturity of the Notes on the occurrence of a Tax Event, Emerson will mail a
notice to each Holder of Notes by
S-6
<PAGE> 7
first-class mail not more than 60 days after the occurrence of such Tax Event,
stating the new maturity date of the Notes. Such notice shall be effective
immediately upon mailing.
"Tax Event" means that Emerson shall have received an opinion of nationally
recognized tax counsel to the effect that, as a result of (a) any amendment to,
clarification of, or change (including any announced prospective amendment,
clarification or change) in any law, or any regulation thereunder, of the United
States, (b) any judicial decision, official administrative pronouncement,
ruling, regulatory procedure, regulation, notice or announcement, including any
notice or announcement of intent to adopt or promulgate any ruling, regulatory
procedure or regulation (any of the foregoing, an "Administrative or Judicial
Action"), or (c) any amendment to, clarification of, or change in any official
position with respect to, or any interpretation of, an Administrative or
Judicial Action or a law or regulation of the United States that differs from
the theretofore generally accepted position or interpretation, in each case of
clauses (a), (b) and (c), occurring on or after May 10, 1999, there is more than
an insubstantial increase in the risk that interest paid by Emerson on the Notes
is not, or will not be, deductible, in whole or in part, by Emerson for United
States federal income tax purposes.
NOTES USED AS QUALIFIED REPLACEMENT PROPERTY
Prospective investors seeking to treat the Notes as "qualified replacement
property" for purposes of Section 1042 of the Internal Revenue Code of 1986, as
amended (the "Code"), should be aware that Section 1042 requires the issuer to
meet certain requirements in order for the Notes to constitute qualified
replacement property. In general, qualified replacement property is a security
issued by a domestic operating corporation that did not, for the taxable year
preceding the taxable year in which such security was purchased, have "passive
investment income" in excess of 25 percent of the gross receipts of such
corporation for such preceding taxable year (the "Passive Income Test"). For
purposes of the Passive Income Test, where the issuing corporation is in control
of one or more corporations, all such corporations are treated as one
corporation (the "Affiliated Group") for the purposes of computing the amount of
passive investment income under Section 1042.
Emerson believes that less than 25 percent of its Affiliated Group's gross
receipts was passive investment income for the taxable year ended September 30,
1998. In making this determination, Emerson has made certain assumptions and
used procedures which it believes are reasonable. Emerson can give no assurance
as to whether Emerson will continue to meet the Passive Income Test. It is, in
addition, possible that the Internal Revenue Service may disagree with the
manner in which Emerson has calculated the Affiliated Group's gross receipts and
the conclusions reached herein. Prospective purchasers of the Notes are advised
to consult with their own tax advisors with respect to the application of
Section 1042 to their particular circumstances and other tax matters relating to
the Notes.
GOVERNING LAW
The Notes will be governed by and construed in accordance with the laws of
the State of New York.
UNDERWRITING
Emerson is selling the Notes to Morgan Stanley & Co. Incorporated under a
Pricing Agreement dated May 10, 1999.
Under the terms and conditions of the Pricing Agreement, if the Underwriter
takes any of the Notes, then it is obligated to take and pay for all of the
Notes.
The Notes are a new issue of securities with no established trading market.
Emerson does not intend to apply for listing of the Notes on any national
securities exchange. The Underwriter has advised Emerson that it intends to make
a market for the Notes, but it has no obligation to do so. It also may
discontinue market making at any time without providing any notice. Emerson
cannot give any assurance as to the liquidity of any trading market for the
Notes.
S-7
<PAGE> 8
The Underwriter initially proposes to offer the Notes directly to the
public at the public offering price set forth on the cover page.
Emerson has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute payments which the Underwriter may be required to make in
respect of such liabilities.
In connection with the offering of the Notes, the Underwriter may engage in
transactions that stabilize, maintain or otherwise affect the prices of the
Notes. Specifically, the Underwriter may overallot in connection with the
offering of the Notes, creating a short position in the Notes for its own
account. In addition, the Underwriter may bid for, and purchase, Notes in the
open market to cover short positions or to stabilize the price of the Notes.
Finally, the Underwriter may reclaim selling concessions allowed for
distributing the Notes in the offering, if the Underwriter repurchases
previously distributed Notes in transactions to cover short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market prices of the Notes above independent market levels. The
Underwriter is not required to engage in any of these activities and may end any
of these activities at any time.
UNDERWRITING COMPENSATION
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- --------
<S> <C> <C>
Underwriting Discounts
and Commissions paid
by the Company............................................ 1.0% $400,000
</TABLE>
Emerson estimates that it will spend approximately $85,000 for printing,
ratings agency, trustee and legal fees, and other expenses related to this
offering.
In the ordinary course of its business, the Underwriter and its affiliates
have engaged, and may in the future engage, in commercial banking and/or
investment banking transactions with Emerson and its affiliates.
VALIDITY OF THE NOTES
H. M. Smith, Esq., Emerson's Assistant Secretary and Assistant General
Counsel, will pass upon the legality of the Notes for Emerson. Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York 10017, will pass upon the
legality of the Notes for the Underwriter. Mr. Smith beneficially owns 13,088
shares of Common Stock of the Company and has options to purchase 1,000 shares.
Davis Polk & Wardwell will rely on the opinion of Mr. Smith with respect to all
matters of Missouri law. Davis Polk & Wardwell acts as counsel to Emerson from
time to time with respect to various other matters.
S-8
<PAGE> 9
LOGO
EMERSON ELECTRIC CO.
DEBT SECURITIES
------------------------------
This Prospectus describes Debt Securities which we may issue and sell at
various times:
- The Debt Securities may be debentures, notes or other unsecured
evidences of indebtedness of Emerson.
- We may issue them in one or several series.
- The total principal amount of the Debt Securities to be issued under
this Prospectus will be not more than $1,000,000,000 (or the equivalent
amount in other currencies).
- The terms of each series of Debt Securities (interest rates, maturity,
redemption provisions and other terms) will be determined at the time of
sale, and will be specified in a Prospectus Supplement which will be
delivered together with this Prospectus at the time of the sale.
We may sell Debt Securities to or through underwriters, dealers or agents.
We may also sell Debt Securities directly to investors. More information about
the way we will distribute the Debt Securities is under the heading "Plan of
Distribution." Information about the underwriters or agents who will participate
in any particular sale of Debt Securities will be in the Prospectus Supplement
relating to that series of Debt Securities.
------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED THAT
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS NOVEMBER 12, 1998.
<PAGE> 10
We have not authorized anyone to give any information or to make any
representations concerning the offering of the Debt Securities except that which
is in this Prospectus or in the Prospectus Supplement which is delivered with
this Prospectus, or which is referred to under "Where You Can Find More
Information." If anyone gives or makes any other information or representations,
you should not rely on it. This Prospectus is not an offer to sell or a
solicitation of an offer to buy any securities other than the Debt Securities
which are referred to in the Prospectus Supplement. This Prospectus is not an
offer to sell or a solicitation of an offer to buy such Debt Securities in any
circumstances in which such offer or solicitation is unlawful. You should not
interpret the delivery of this Prospectus, or any sale of Debt Securities, as an
indication that there has been no change in our affairs since the date of this
Prospectus. You should also be aware that information in this Prospectus may
change after this date.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Table Of Contents........................................... 2
Where You Can Find More Information......................... 3
Information About Emerson................................... 3
Use Of Proceeds............................................. 3
Description Of The Debt Securities.......................... 4
Book-Entry Debt Securities.................................. 8
Plan Of Distribution........................................ 9
Experts..................................................... 10
</TABLE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any of these documents at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
at the SEC's web site at http://www.sec.gov. The SEC allows us to incorporate by
reference the information we file with them, which means that we can disclose
important information to you by referring you to those documents.
The information incorporated by reference is considered to be part of this
Prospectus, and later information that we file with the SEC will automatically
update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we sell all of
the Debt Securities. This Prospectus is part of a registration statement we
filed with the SEC.
- Our Annual Report on Form 10-K for the year ended September 30, 1997.
- Our Quarterly Reports on Form 10-Q for the quarters ended December 31,
1997, March 31, 1998 and June 30, 1998.
- Our Current Reports on Form 8-K dated October 7, 1997, December 29, 1997
and October 6, 1998.
You may receive a copy of any of these filings, at no cost, by writing or
telephoning H. M. Smith, our Assistant Secretary and Assistant General Counsel,
at Emerson Electric Co., Station 2431, 8000 West Florissant Avenue, P.O. Box
4100, St. Louis, Missouri 63136, telephone 314-553-2431.
We have filed with the SEC a Registration Statement to register the Debt
Securities under the Securities Act of 1933. This Prospectus omits certain
information contained in the Registration Statement, as permitted by SEC rules.
You may obtain copies of the Registration Statement, including exhibits, as
noted in the first paragraph above.
2
<PAGE> 11
INFORMATION ABOUT EMERSON
Emerson Electric Co. was incorporated in Missouri in 1890. We were
originally engaged in the manufacture and sale of electric motors and fans. We
subsequently expanded our product lines through internal growth and
acquisitions. We are now engaged principally in the design, manufacture and sale
of a broad range of electrical, electromechanical and electronic products and
systems throughout the world. Our principal executive offices are at 8000 West
Florissant Avenue, P. O. Box 4100, St. Louis, Missouri 63136. Our telephone
number is (314) 553-2000.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement which accompanies
this Prospectus, we intend to add the net proceeds from the sale of the Debt
Securities to our general funds. We expect to use the proceeds for general
corporate purposes, including working capital, capital expenditures, and the
repayment of short-term borrowings. Before we use the proceeds for these
purposes, we may invest them in short-term investments.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of
the Company for the periods indicated. For purposes of computation of the ratio
of earnings to fixed charges, earnings consist of income before income taxes and
cumulative effects of changes in accounting principles plus the amount of fixed
charges. Fixed charges consist of interest expense and that portion of rental
expense deemed to represent interest.
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED SEPTEMBER 30, ENDED JUNE 30,
-------------------------------- --------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- --------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............. 7.5x 11.0x 9.7x 9.8x 11.3x 10.4x
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DESCRIPTION OF THE DEBT SECURITIES
This section describes some of the general terms of the Debt Securities.
The Prospectus Supplement describes the particular terms of the Debt Securities
we are offering. The Prospectus Supplement also indicates the extent, if any, to
which such general provisions may not apply to the Debt Securities being
offered.
We will issue the Debt Securities under an Indenture between us and The
Bank of New York, which is serving as Trustee. The Indenture is an exhibit to
the Registration Statement. We are summarizing certain important provisions of
the Debt Securities and the Indenture. This is not a complete description of the
important terms. You should refer to the specific terms of the Indenture for a
complete statement of the terms of the Indenture and the Debt Securities. When
we use capitalized terms which we don't define here, those terms have the
meanings given in the Indenture. When we use references to Sections, we mean
Sections in the Indenture.
GENERAL
The Debt Securities will be unsecured obligations of Emerson.
The Indenture does not limit the amount of Debt Securities that we may
issue under the Indenture, nor does it limit other debt that we may issue. We
may issue the Debt Securities at various times in different series, each of
which may have different terms.
The Prospectus Supplement relating to the particular series of Debt
Securities we are offering includes the following information concerning those
Debt Securities:
- The title of the Debt Securities.
- Any limit on the amount of the Debt Securities that we may offer.
- The price at which are offering the Debt Securities. We will usually
express the price as a percentage of the principal amount.
- The maturity date of the Debt Securities.
- The interest rate per annum on the Debt Securities. We may specify a
fixed rate or a variable rate, or we may offer Debt Securities that do
not bear interest but are sold at a substantial discount from the amount
payable at maturity.
- The date from which interest on the Debt Securities will accrue.
- The dates on which we will pay interest and the regular record dates for
determining who is entitled to receive the interest.
- If applicable, the dates on which or after which, and the prices at
which, we are required to redeem the Debt Securities or have the option
to redeem the Debt Securities.
- If applicable, any limitations on our right to defease our obligations
under the Debt Securities by depositing cash or securities.
- The amount that we would be required to pay if the maturity of the Debt
Securities is accelerated, if that amount is other than the principal
amount.
- Any additional restrictive covenants or other material terms relating to
the Debt Securities.
- Any additional Events of Default that will apply to the Debt Securities.
- If we will make payments on the Debt Securities in any currency other
than United States dollars, the currency or composite currency in which
we will make those payments. If the currency will be determined under an
index, the details concerning such index.
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PAYMENTS ON DEBT SECURITIES
We will make payments on the Debt Securities at the office or agency we
will maintain for that purpose (which will be the Corporate Trust Office of the
Trustee in New York, New York unless we indicate otherwise in the Prospectus
Supplement) or at such other places and at the respective times and in the
manner as we designate in the Prospectus Supplement. (Sections 3.1 and 3.2) As
explained under "Book-Entry Securities" below, The Depository Trust Company or
its nominee will be the initial registered Holder unless the Prospectus
Supplement provides otherwise.
FORM, DENOMINATIONS AND TRANSFERS
Unless otherwise indicated in the Prospectus Supplement:
- The Debt Securities will be in fully registered form, without coupons,
in denominations of $1,000 or any multiple thereof.
- We will not charge any fee to register any transfer or exchange of the
Debt Securities, except for taxes or other governmental charges (if
any). (Section 2.8)
ORIGINAL ISSUE DISCOUNT SECURITIES
If Debt Securities are Original Issue Discount Securities, we will offer
and sell them at a substantial discount below their stated principal amount. We
will describe Federal income tax consequences and other special considerations
applicable to any such Original Issue Discount Securities in the Prospectus
Supplement. "Original Issue Discount Security" means any security which provides
that less than the full principal amount will be due if the maturity is
accelerated or if the security is redeemed before its maturity. (Section 5.1)
INDEXED DEBT SECURITIES
We may issue Debt Securities under which the principal amount payable at
maturity or the amount of interest payable will be determined by reference to
currency exchange rates, commodity prices, equity indices or other factors. In
that case, the amount we will pay to the Holders will depend on the value of the
applicable currency, commodity, equity index or other factor at the time our
payment obligation is calculated. We will include information in the Prospectus
Supplement for those Debt Securities about how we will calculate the principal
or interest payable, and will specify the currencies, commodities, equity
indices or other factors to which the principal amount payable at maturity or
interest is linked. We will also provide information about certain additional
tax considerations which would apply to the Holders of those Debt Securities.
CERTAIN RESTRICTIONS
Unless we otherwise specify in the Prospectus Supplement, there will not be
any covenants in the Indenture or the Debt Securities that would protect you
against a highly leveraged or other transaction involving Emerson that may
adversely affect you as a holder of Debt Securities. If there are provisions
that offer such protection, they will be described in the Prospectus Supplement.
Limitations on Liens. Under the Indenture, we and our Restricted
Subsidiaries (defined below) may not issue any debt for money borrowed, or
assume or guarantee any such debt, which is secured by a mortgage on a Principal
Property (defined below) or shares of stock or indebtedness of any Restricted
Subsidiary, unless such mortgage similarly secures your Debt Securities. A
Principal Property is any manufacturing plant or manufacturing facility that we
or any Restricted Subsidiary owns, is located within the continental United
States and, in the opinion of our Board of Directors, is of material importance
to our total business that we and our Restricted Subsidiaries conduct, taken as
a whole. The above restriction will not apply to debt that is secured by:
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- mortgages on property, shares of stock or indebtedness of any
corporation that exists when it becomes a Restricted Subsidiary;
- mortgages on property that exist when we acquire the property and
mortgages that secure payment of the purchase price of the mortgaged
property;
- mortgages that secure debt which a Restricted Subsidiary owes to us or
to another Restricted Subsidiary;
- mortgages that existed at the date of the Indenture;
- mortgages on property of a company that exist when we acquire the
company;
- mortgages in favor of a government to secure debt that we incur to
finance the purchase price of the property that we mortgage; or
- extensions, renewals or replacement of any of the mortgages described
above.
A Restricted Subsidiary is a direct or indirect subsidiary of Emerson if
substantially all of its property is located in the continental United States
and if it owns any Principal Property (except a subsidiary principally engaged
in leasing or in financing installment receivables or overseas operations).
The Indenture also excepts from this limitation on liens secured debt of up
to 10% of our consolidated net tangible assets. (Section 3.6)
Limitation on Sale and Leaseback Transactions. We may not enter into sale
and leaseback transactions involving any Principal Property, except for leases
of up to three years, unless
- we could issue debt secured by the property involved (under the
limitations on liens described above) in an amount equal to the
Attributable Debt which would be calculated under the Indenture based on
the rental payments to be received, or
- we pay other debt within 90 days in an amount not less than such
Attributable Debt amount. (Section 3.7)
Restrictions on Consolidation, Merger or Sale. We may not consolidate or
merge or sell or convey all or substantially all of our assets unless (a) the
surviving corporation (if it is not Emerson) is a domestic corporation and
assumes our obligations on your Debt Securities and under the Indenture and (b)
immediately after such transactions, there is no default. (Section 9.1)
DEFEASANCE
The Indenture includes provisions allowing defeasance that we may choose to
apply to Debt Securities of any series. If we do so, we would deposit with the
Trustee or another trustee money or U. S. Government Obligations sufficient to
make all payments on those Debt Securities. If we make such a deposit with
respect to your Debt Securities, we may elect either:
- to be discharged from all our obligations on your Debt Securities,
except for our obligations to register transfers and exchanges, to
replace temporary or mutilated, destroyed, lost or stolen Debt
Securities, to maintain an office or agency in respect of the Debt
Securities and to hold moneys for payment in trust; or
- to be released from our restrictions described above relating to liens
and sale/leaseback transactions.
To establish such a trust, we must deliver to the Trustee an opinion of our
counsel that the Holders of the Debt Securities will not recognize income, gain
or loss for Federal income tax purposes as a result of such defeasance and will
be subject to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such defeasance had not occurred.
There may be additional
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provisions relating to defeasance which we will describe in the Prospectus
Supplement. (Sections 13.1, 13.2, 13.3 and 13.4)
EVENTS OF DEFAULT, NOTICE AND WAIVER
If certain Events of Default by us specified in the Indenture happen and
are continuing, either the Trustee or the Holders of 25% in principal amount of
the outstanding Debt Securities of a series may declare the principal, and
accrued interest, if any, of all securities of such series to be due and
payable. If other specified Events of Default happen and are continuing, either
the Trustee or the Holders of 25% in principal amount of the outstanding Debt
Securities of all series may declare the principal, and accrued interest, if
any, of all the outstanding Debt Securities to be due and payable. (Section 5.1)
An Event of Default in respect of any series of Debt Securities means:
- default for 30 days in payment of any interest installment;
- default in payment of principal, premium, sinking fund installment or
analogous obligation when due;
- unless stayed by litigation, default, for 90 days after notice to
Emerson by the Trustee or by the Holders of 25% in principal amount of
the outstanding Debt Securities of such series, in performance of any
other covenant in the Indenture governing such series; and
- certain events of our bankruptcy, insolvency and reorganization.
(Section 5.1)
Within 90 days after a default in respect of any series of Debt Securities,
the Trustee must give to the Holders of such series notice of all uncured and
unwaived defaults by us known to it. However, except in the case of default in
payment, the Trustee may withhold such notice if it in good faith determines
that such withholding is in the interest of such Holders. The term "default"
means, for this purpose, the happening of any Event of Default, disregarding any
grace period or notice requirement. (Section 5.11)
Before the Trustee is required to exercise rights under the Indenture at
the request of Holders, it is entitled to be indemnified by such Holders,
subject to its duty, during an Event of Default, to act with the required
standard of care. (Sections 6.1 through 6.13)
If any Event of Default has occurred, the Holders of a majority in
principal amount of the outstanding Debt Securities of any series may direct the
time, method and place of conducting proceedings for remedies available to the
Trustee, or exercising any trust or power conferred on the Trustee, in respect
of such series. (Section 5.9)
Emerson must file an annual certificate with the Trustee that it is in
compliance with conditions and covenants under the Indenture. (Section 3.5)
In certain cases, the Holders of a majority in principal amount of the
outstanding Debt Securities of a series, on behalf of the Holders of all Debt
Securities of such series, or the Holders of a majority of all outstanding Debt
Securities voting as a single class, on behalf of the Holders of all outstanding
Debt Securities, may waive any past default or Event of Default, or compliance
with certain provisions of the Indenture, but may not waive among other things
an uncured default in payment. (Sections 5.1 and 5.10)
MODIFICATION OR AMENDMENT OF THE INDENTURE
If we receive the consent of the holders of a majority in principal amount
of the outstanding Debt Securities affected, we may enter into supplemental
indentures with the Trustee that would
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- add, change or eliminate provisions in the Indenture; or
- change the rights of the Holders of Debt Securities.
However, unless we receive the consent of all of the affected Holders, we
may not enter into supplemental indentures that would with respect to the Debt
Securities of such Holders:
- change the maturity;
- reduce the principal amount or any premium;
- reduce the interest rate or extend the time of payment of interest;
- reduce any amount payable on redemption or reduce the amount of the
principal of an Original Issue Discount Security that would be payable
on acceleration;
- impair or affect the right of any Holder to institute suit for payment;
- change any right of the Holder to require repayment; or
- reduce the requirement for two-thirds approval of supplemental
indentures. (Section 8.2)
REGARDING THE TRUSTEE
The Trustee is The Bank of New York. The Trustee is a lender to us under
our revolving credit agreement. From time to time, we may enter into other
banking relationships with the Trustee.
BOOK-ENTRY DEBT SECURITIES
The Prospectus Supplement will indicate whether we are issuing the related
Debt Securities as book-entry securities. Book-entry securities of a series will
be issued in the form of one or more global notes that will be deposited with
The Depository Trust Company, New York, New York, and will evidence all of the
Debt Securities of that series. This means that we will not issue certificates
to each Holder. We will issue one or more global securities to DTC, which will
keep a computerized record of its participants (for example, your broker) whose
clients have purchased the Debt Securities. The participant will then keep a
record of its clients who own the Debt Securities. Unless it is exchanged in
whole or in part for a security evidenced by individual certificates, a global
security may not be transferred, except that DTC, its nominees and their
successors may transfer a global security as a whole to one another. Beneficial
interests in global securities will be shown on, and transfers of beneficial
interests in global notes will be made only through, records maintained by DTC
and its participants. Each person owning a beneficial interest in a global
security must rely on the procedures of DTC and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest to exercise any rights of a Holder of Debt Securities under the
Indenture.
The laws of some jurisdictions require that certain purchasers of
securities such as Debt Securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair your ability to acquire or
transfer beneficial interests in the global security.
We will make payments on each series of book-entry Debt Securities to DTC
or its nominee, as the sole registered owner and holder of the global security.
Neither Emerson, the Trustee nor any of their agents will be responsible or
liable for any aspect of DTC's records relating to or payments made on account
of beneficial ownership interests in a global security or for maintaining,
supervising or reviewing any of DTC's records relating to such beneficial
ownership interests.
DTC has advised us that, when it receives any payment on a global security,
it will immediately, on its book-entry registration and transfer system, credit
the accounts of participants with payments in amounts proportionate to their
beneficial interests in the global security as shown on DTC's records. Payments
by participants to you, as an owner of a beneficial interest in the global
security, will be governed by standing instructions and customary practices (as
is now the case with securities held for customer accounts registered in "street
name") and will be the sole responsibility of such participants.
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A global security representing a series will be exchanged for certificated
Debt Securities of that series only if (x) DTC notifies us that it is unwilling
or unable to continue as Depositary or if DTC ceases to be a clearing agency
registered under the 1934 Act and we don't appoint a successor within 90 days,
(y) we decide that the global security shall be exchangeable or (z) there is an
Event of Default under the Indenture or an event which with the giving of notice
or lapse of time or both would become an Event of Default with respect to the
Debt Securities represented by such global security. If that occurs, we will
issue Debt Securities of that series in certificated form in exchange for such
global security. An owner of a beneficial interest in the global security then
will be entitled to physical delivery of a certificate for Debt Securities of
such series equal in principal amount to such beneficial interest and to have
such Debt Securities registered in its name. We would issue the certificates for
such Debt Securities in denominations of $1,000 or any larger amount that is an
integral multiple thereof, and we would issue them in registered form only,
without coupons.
DTC has advised us that it is a limited-purpose trust company organized
under the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered under the 1934 Act. DTC was created to hold the
securities of its participants and to facilitate the clearance and settlement of
securities transactions among its participants through electronic book-entry
changes in accounts of the participants, thereby eliminating the need for
physical movement of securities certificates. DTC's participants include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations, some of whom (and/or their representatives) own
DTC. Access to DTC's book-entry system is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly. The
rules applicable to DTC and its participants are on file with the SEC. No fees
or costs of DTC will be charged to you.
PLAN OF DISTRIBUTION
We may sell Debt Securities to or through one or more underwriters or
dealers, and also may sell Debt Securities directly to other purchasers or
through agents. Such firms may also act as our agents in the sale of Debt
Securities. Only underwriters named in the Prospectus Supplement will be
considered as underwriters of the Debt Securities offered by such Supplement.
We may distribute Debt Securities at different times in one or more
transactions. We may sell Debt Securities at fixed prices, which may change, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters may receive
compensation from us or from purchasers of Debt Securities in the form of
discounts, concessions or commissions. Underwriters, dealers and agents that
participate in the distribution of Debt Securities may be deemed to be
underwriters. Discounts or commissions they receive and any profit on their
resale of Debt Securities may be considered underwriting discounts and
commissions under the Securities Act of 1933. We will identify any such
underwriter or agent, and we will describe any such compensation, in the
Prospectus Supplement.
We may agree to indemnify underwriters, dealers and agents who participate
in the distribution of Debt Securities against certain liabilities, including
liabilities under the 1933 Act. We may also agree to contribute to payments
which the underwriters, dealers or agents may be required to make in respect of
such liabilities.
We may authorize dealers or other persons who act as our agents to solicit
offers by certain institutions to purchase Debt Securities from us under
contracts which provide for payment and delivery on a future date.
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We may enter into such contracts with commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others. If we enter into such agreements concerning any series
of Debt Securities, we will indicate that in the Prospectus Supplement.
In connection with an offering of Debt Securities, underwriters may engage
in transactions that stabilize, maintain or otherwise affect the price of the
Debt Securities. Specifically, underwriters may over-allot in connection with
the offering, creating a syndicate short position in the Debt Securities for
their own account. In addition, underwriters may bid for, and purchase, Debt
Securities in the open market to cover short positions or to stabilize the price
of the Debt Securities. Finally, underwriters may reclaim selling concessions
allowed for distributing the Debt Securities in the offering if the underwriters
repurchase previously distributed Debt Securities in transactions to cover short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the Debt Securities above
independent market levels. Underwriters are not required to engage in any of
these activities and may end any of these activities at any time.
EXPERTS
The consolidated financial statements of Emerson Electric Co. and
subsidiaries as of September 30, 1997 and 1996, and for each of the years in the
three-year period ended September 30, 1997 incorporated by reference herein,
have been incorporated herein in reliance upon the report of KPMG Peat Marwick
LLP, independent certified public accountants, incorporated by reference herein
and upon the authority of said firm as experts in accounting and auditing.
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EMERSON ELECTRIC CO. LOGO
