EX-lO 3 EMPLOYMENT AGREEMENT

Exhibit 10(c) EMPLOYMENT AGREEMENT

THIS AGREEMENT made as of the 1st day of October, 1975, and amended January 9, 1987 as of the 1st day of October 1986 and October 22, 1997 as of the 1st day of October, 1997, by and between EMERSON ELECTRIC CO., a Missouri corporation ("Emerson") and CHARLES F. KNIGHT ("Employee"),

WITNESSETH THAT:

WHEREAS, Employee presently is Chairman of the Board and Chief Executive Officer of Emerson and possesses executive skills and experience which Emerson believes are of substantial value and important to the success of Emerson's business operations; and

WHEREAS, Emerson and Employee desire to provide for the terms and conditions upon which Employee will continue in the employ and service of Emerson,

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein set forth, the parties hereto agree as follows:

1. Employment and Duties. Emerson hereby employs Employee, and Employee agrees to continue in the employ of Emerson, for the term herein specified (the "Employment Term"). During the Employment Term Employee shall serve Emerson in a senior executive capacity, shall perform such duties as may be assigned to him by the Board of Directors of Emerson and shall devote his full time, attention and effort to the business and affairs of Emerson.

2. Term. Subject to Section 4 below, the Employment Term shall be initially a six (6) year period commencing October 1, 1975 and ending September 30, 1981, provided, however, that on September 30, 1976 and on each September 30 thereafter the Employment Term shall be extended automatically one (1) additional year, unless prior to September 30 of any year Emerson shall give notice to Employee in writing that the Board of Directors of Emerson has elected not to have the Employment Term extended for any further period. If such notice is given, the Employment Term shall then be limited to the balance of the year in which such notice is given plus the next succeeding five years.

The word "year" as used herein shall mean the twelve month period commencing October 1 and ending the next succeeding September 30.

3. Compensation. In consideration of his services, Employee shall receive during the Employment Term a base salary at the rate of not less than

Nine Hundred Thousand Dollars ($900,000) per year, payable in substantially equal installments in accordance with Emerson's usual paying practices, but not less frequently than monthly, and shall be eligible for annual bonus payments under Emerson's annual executive extra salary plan as determined annually by the Compensation and Human Resources Committee of the Board of Directors of Emerson, consistent with the scope of Employee's responsibilities and performance for such year. In addition, Employee shall participate in Emerson's group insurance, hospitalization, pension and other benefit plans and programs applicable generally to employees of Emerson, and in any fringe benefit programs presently existing or hereafter adopted f or the benefit of executive employees of Emerson. In the event that any of such programs require future action by the Hoard of Directors of Emerson or a Committee of such Board, as in the case of future stock option grants, Employee shall be a candidate for participation in such programs on the basis applicable to other executive employees of Emerson. Emerson may from time to time also consider the award of other forms of compensation to Employee. At the time any such award is proposed to be made, Employee shall have the right to elect to defer all or part thereof (a) until the following January 2nd, (b) to some other date certain, (c) for a stated number of years or (d) until his termination of employment, on such terms and conditions as shall be agreed at the time of such election.

4. Effect of Termination of Employment. The Employment Term and, except as provided in Section 5, Employee's right to compensation (including benefits) as provided for herein shall terminate only (a) upon the expiration of the Employment Term pursuant to Section 2, (b) if Employee shall die during the Employment Term, (c) if Employee shall voluntarily Retire (as defined below), Cd) if Employee shall voluntarily terminate his employment hereunder other than in a Retirement, or (e) if Employee's employment is terminated for cause during the Employment Term.

No termination of Employee's employment shall be deemed to have been a termination for cause unless such termination is for or on account of (i) a willful failure or refusal of Employee to perform his employment duties and obligations hereunder; (ii) any fraud, embezzlement or other dishonesty of Employee adversely affecting Emerson or any of its subsidiaries, or (iii) the conviction of Employee of a felony committed otherwise than in the performance by him of services on behalf of Emerson.

Employee's right to compensation shall not be limited or affected by any illness or disability of Employee, or on account of any accident or other event which either temporarily or permanently, or wholly or partially, shall prevent Employee from performing his employment duties hereunder.

For purposes of this agreement, Employee shall be deemed to "Retire" upon the later to occur of (i) his ceasing (with the consent or as a result of the action of the Board of Directors, other than by reason of termination for cause) to be Chief Executive Officer of Emerson and (ii) his ceasing to be Chairman of the Board of Emerson. Employee's Retirement shall be deemed voluntary if he consents in writing to both (i) and (ii) above. Employee's involuntary Retirement, including by reason of his resignation following the occurrence of either of (i) or (ii) above without his written consent, shall not constitute a willful failure of Employee to perform his employment duties hereunder and in such event the compensation of Employee (including benefits) shall continue for the balance of the Employment Term on the same basis as then in effect.

Upon Employee's Retirement he shall be entitled to immediate commencement of retirement benefits under the Emerson Supplemental Executive Retirement Plan and upon Employee's Retirement or death during the Employment Term any and all awards, participations and coverages held by or with respect to Employee under any other agreements with or plans or programs of Emerson (including without limitation any options or other stock-based compensation as well as coverage under Emerson's split dollar insurance program, but not including welfare programs of general application only to active employees of Emerson) shall become non-forfeitable, and shall be payable or settled in accordance with their terms as if Employee's employment with Emerson had not terminated (or, if earlier, upon Employee's (or his estate's or beneficiaries') recognition of taxable income in connection therewith), except to the extent Employee shall direct, or reserve the right to direct, that any payment not be made.

5. Consulting. Employee agrees that commencing upon Retirement he will provide consulting services and advice to Emerson when and as requested by the Chief Executive Officer or by the Board of Directors of Emerson until the first to occur of notice to Employee by the Board of Directors given after the fifteenth anniversary of Employee's Retirement that such services are no longer needed, Employee's death or Employee's notice to the Board of Directors of the termination of this consulting agreement (the "Consulting Term") . In no event shall such services and advice exceed 30 days per year. In consideration of such services, Emerson shall pay employee a daily consulting fee, for the days he renders such services, equal to his daily salary rate at the time of his Retirement, and shall provide Employee continued access during the Consulting Term to Emerson's facilities and services comparable to those provided to him prior to his Retirement, including club memberships, financial planning and access to Emerson's aircraft, car and driver, on the same basis as such facilities and services were provided to Employee prior to his Retirement. Emerson shall also reimburse Employee, upon the receipt of appropriate documentation, for reasonable expenses which he incurs in providing such consulting services at the request of the Chief Executive Officer or the Board of Directors of Emerson. During the Consulting Term Employee shall be an independent contractor.

6. Non-Disclosure and Non-Compete Agreements. Employee agrees that he will not disclose to any other firm or person any of Emerson's or Emerson's subsidiaries' trade secrets or any confidential information relating to its or their business. Employee further agrees that, upon the expiration of the Employment Term (but excepting any period following a termination by Emerson without cause), he will not enter the employ of, or have any material interest in, directly or indirectly, any business in this country in competition with Emerson or any of it subsidiaries, for a period of two (2) years from the date of such expiration or, if longer, at any time during the Consulting Term.

7. Miscellaneous. Neither this Agreement nor any rights hereunder shall be assignable by either party hereto.

This Agreement supersedes and replaces that certain Employment Contract between the parties hereto dated January 1, 1973.

This Agreement shall be construed and interpreted under the laws of Missouri.

IN WITNESS WHEREOF, the parties have executed this Agreement, as amended, this 22nd day of October, 1997.

EMERSON ELECTRIC CO.

By /5/ Vernon R. Loucks, Jr.

"Emerson" Chairman, Compensation and Human Resources Committee

/s/ Charles F. Knight

"Employee"

EX-lO 4 1991 STOCK OPTION PLAN

Exhibit 10(e)

EMERSON ELECTRIC CO. 1991 STOCK OPTION PLAN AS AMENDED AND RESTATED EFFECTIVE OCTOBER 1, 1997 1. Purpose of the Plan.

The Emerson Electric Co. 1991 Stock Option Plan (the "Plan") is intended as an incentive to, and to encourage ownership of the stock of Emerson Electric Co. ("Company") by certain key management employees of the Company and its subsidiaries and joint ventures. It is intended that certain options granted hereunder will qualify as Incentive Stock Options within the meaning of Section 422 of the Internal Revenue Code of 1986 as amended (the "Code") ("Incentive Stock Options") and that other options granted hereunder will not qualify as Incentive Stock Options. 2. Stock Subject to the Plan.

(a) Stock Available For Grants of Options and Stock Appreciation Rights ("SARs") . 4,000,000 shares of the Common Stock of the Company par value $1.00 (which, after taking account of the 2 for 1 split on March 10, 1997, became 8,000,000 shares of the Company par value $.50) ("Common stock") have been allocated to the Plan and will be reserved for the grant of options or SAR's under the Plan, subject to adjustment under Paragraph 16.

(b) Reservation of Shares. The Company will allocate and reserve in each calendar year, a sufficient number of shares of its Common Stock for issue upon the exercise of options or SAR's granted under the Plan.

(c) Treasury Shares. The Company may, in its discretion, use shares held in the Treasury under this Plan in lieu of authorized but unissued shares of Common Stock. If any option shall expire or terminate for any reason without having been exercised in full, the unpurchased shares subject thereto shall again be available for the purposes of the Plan. Any shares of Common Stock which are used as full or partial payment to the Company by an optionee of the purchase price upon exercise of an option shall again be available for the purposes of the Plan. 3. Administration.

The Plan shall be administered by the Committee referred to in Paragraph 4 (the "Committee") . Subject to the express provisions of the Plan, the Committee shall have plenary authority, in its discretion, to determine the individuals to whom, and the time or times at which, options and SAR's shall be granted and the number of shares to be subject to each option or SAR. In making such determinations the Committee may take into account the nature of the services rendered by the respective individuals, their present and potential contributions to the Company's success and such other factors as the Committee, in its discretion, shall deem relevant. Subject to the express

provisions of the Plan, the Committee shall also have plenary authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the terms and provisions of the respective stock option and SAR agreements (which need not be identical) and to make all other determinations necessary or advisable for the administration of the Plan. The Committee's determinations on the matters referred to in this Paragraph 3 shall be conclusive. The Committee may, in its discretion, delegate to the Chief Executive Officer of the Company (the "CEO") the authority to determine the individuals to whom, and the time or times at which and terms upon which, options and SAR's shall be granted and the number of shares to be subject to each option or SAR; provided, however, that the Committee may not delegate such authority to the CEO with respect to employees of the Company who are subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934.

The Committee.

The Committee shall at all times be constituted to comply with Rule 16b-3 under the Securities Exchange Act of 1934, or any successor Rule. The Committee shall be appointed by the Board of Directors of the Company ("Board"), which may from time to time appoint members of the Committee in substitution for members previously appointed and may fill vacancies, however caused, in the Committee. The Committee may select one of its members as its Chairman, and shall hold its meetings at such times and places as it may determine. A majority of its members shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. Any decision or determination reduced to writing and signed by a majority of the members shall be fully as effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary, shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable. 5. Eligibility.

Options (including Incentive Stock Options) and SAR's may be granted only to key management employees of the Company or its subsidiaries (as defined below) . The term "key management employees" is not limited to, but includes, officers, whether or not they are directors, and employees who are employed in positions of management, but does not include directors who are not also executive employees of the Company, or a subsidiary thereof. The term "subsidiary" shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the granting of the option or SAR, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, or such other meaning as may be hereafter ascribed to it in Section 424 of the Code.

Notwithstanding the foregoing, options which are not Incentive Stock Options and SAR's may also be granted to employees of joint ventures of the Company so long as such employees are not subject to Section 16(a) of the Securities Exchange Act of 1934 by virtue of their position with, or share holdings of, the Company. The term "joint venture" means a partnership or other business entity (other than a subsidiary) 50% or more of the profits interest of which is owned by the Company or a subsidiary. 6. Option Prices.

The purchase price of the Common Stock under each Incentive Stock Option shall not be less than 100% of the fair market value of the stock at the time of the granting of the option and the purchase price of the Common Stock under each other option shall not be less than 85% of the fair market value of the stock at the time of the granting of the option. Such fair market value shall generally be considered to be the mean between the high and low prices of the Company's Common Stock as reported on the New York Stock Exchange Composite Tape for the day the option is granted; provided, however, that the Committee may adopt any other criterion for the determination of such fair market value as it may determine to be appropriate. 7. Payment of Option Prices.

The purchase price is to be paid in full upon the exercise of the option, either (i) in cash, (ii) in the discretion of the Committee, by the tender to the Company of shares of the Common Stock of the Company, owned by the optionee and registered in his name, having a fair market value equal to the cash exercise price of the option being exercised, with the fair market value of such stock to be determined in such appropriate manner as may be provided for by the Committee or as may be required in order to comply with, or to conform to the requirements of, any applicable laws or regulations, or (iii) in the discretion of the Committee, by any combination of the payment methods specified in clauses (i) and (ii) hereof. Provided, however, that no shares of Common Stock may be tendered in exercise of an option if such shares were acquired by the optionee through the exercise of an Incentive Stock Option unless (i) such shares have been held by the optionee for at least one year and (ii) at least two years have elapsed since such Incentive Stock Option was granted. The cash proceeds of sale of stock subject to option are to be added to the general funds of the Company and used for its general corporate purposes. The shares of Common Stock of the Company received by the Company as payment of the option price are to be added to the shares of the Common Stock of the Company held in its Treasury and used for the purposes of granting options and SAR's under the Plan.

Upon exercise of an option which is not an Incentive Stock Option, the Company shall withhold sufficient shares to satisfy the Company's obligation to withhold for federal and state taxes on such exercise. 8. Option Amounts.

The maximum aggregate fair market value (determined at the time an option is granted in the same manner as provided for in Paragraph 6 hereof) of the Common Stock of the Company with respect to which Incentive Stock Options are exercisable for the first time by any optionee during any calendar year (under all plans of the Company and its subsidiaries) shall not exceed $100,000. 9. Exercise of Options.

The term of each option shall be not more than ten (10) years from the date of granting thereof or such shorter period as is prescribed in Paragraph 10 hereof. Within such limit, options will be exercisable at such time or times, and subject to such restrictions and conditions, as the Committee shall, in each instance, approve, which need not be uniform for all optionees; provided, however, that except as provided in Paragraphs 10 and 11 hereof, no option may be exercised at any time unless the optionee is then an employee of the Company or a subsidiary or joint venture and has been so employed continuously since the granting of the option. The holder of an option shall have none of the rights of a stockholder with respect to the shares subject to option until such shares shall be issued to such holder upon! the exercise of the option. 10. Termination of Employment.

Any option issued hereunder must be exercised prior to the optionee's termination of employment with the Company, a subsidiary, or a joint venture, except that if the employment of an optionee terminates with the consent and approval of the optionee's employer, the Committee in its absolute discretion may permit the optionee to exercise the option, to the extent that the optionee was entitled to exercise it at the date of such termination of employment, at any time within three (3) months after such termination, but not after ten (10) years from the date of the granting thereof. In addition, the Committee in its absolute discretion, may permit an optionee who terminates employment on account of retirement, to exercise such option, to the extent the optionee was entitled to exercise it at the date of such termination, at any time within five (5) years of the termination of employment, but not after ten (10) years from the date of the granting thereof. If an optionee terminates employment on account of disability, the optionee may exercise such option, to the extent the optionee was entitled to exercise it at the date of such termination, at any time within one (1) year of the termination of employment but not after ten (10) years from the date of the granting thereof. For this purpose a person shall be deemed to be disabled if he or she is permanently and totally disabled within the meaning of Section 422(c) (6) of the Code, which, as of the date hereof, means that he or she is unable to engage in any substantial gainful activity by reason of any medically determined physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a period of not less than twelve (12) months. A person shall be considered disabled only if he or she furnishes such proof of disability as the Committee may require. Options granted under the Plan shall not be affected by any change of employment so long as the optionee continues to be an employee of the Company or a subsidiary thereof or, in the case of SAR's or options which are not Incentive Stock Options, a joint venture of the Company. The option agreements may contain such provisions as the Committee shall approve with reference to the effect of approved leaves of absence. Nothing in the Plan or in any option granted pursuant to the Plan shall confer on any individual any right to continue in the employ of the Company or any subsidiary or joint venture or interfere in any way with the right of the Company or any subsidiary or joint venture thereof to terminate his or her employment at any time.

11. Death.

In the event of the death of an optionee under the Plan, while he or she is employed by the Company (or a subsidiary or joint venture) or within three (3) months after termination of such employment (or one (1) year in the case of the termination of employment of an optionee who is disabled as above provided or five (5) years in the case of termination of employment on account of retirement, as provided in paragraph 10 above) the option theretofore granted may be exercised, to the extent exercisable at the date of death, by a legatee or legatees under the optionee's last will, or by personal representatives or distributees, at any time within a period of one (1) year after death, but not after ten (10) years from the date of granting thereof.

12. Non-Transferability of Options.

Each option granted under the Plan shall, by its terms, be non-transferable otherwise than by will or the laws of descent and distribution and an option may be exercised, during the lifetime of an optionee, only by such optionee; provided, however, that the Committee may, in its sole discretion, permit an optionee to transfer a non-qualified stock option, or cause the Company to grant a non-qualified stock option that would otherwise be granted to a person described in Paragraph 5 (an "Eligible Optionee"), to any one or more of the following: an Eligible Optionee's descendant, spouse, descendant of a spouse, spouse of any of the foregoing, a trust established primarily for the benefit of any of the foregoing, or of such Eligible Optionee, or to an entity which is a corporation, partnership, or limited liability company (or any other similar entity) the owners of which are primarily the aforementioned persons or trusts. Any such option so transferred or granted directly to the aforementioned persons, trust or entities in respect of an Eligible Optionee shall be subject to the provisions of Paragraph 10 concerning the exercisability during the Eligible Optionee's employment. 13. Successive Option Grants.

Successive option grants may be made to any holder of options under this Plan. 14. Investment Purpose.

Each option under the Plan shall be granted only on the condition that all purchases of stock thereunder shall be for investment purposes, and not with a view to resale or distribution, except that the Committee may make such provision with respect to options granted under this Plan as it deems necessary or advisable for the release of such condition upon the registration with the Securities and Exchange Commission of Common Stock subject to the option, or upon the happening of any other contingency warranting the release of such condition. 15. Stock Appreciation Rights.

(a) Grant. The Committee, in its discretion, may grant under the Plan to key management employees, SAR's for any number of shares. Each SAR granted shall specify a time period for exercise of such SAR.

In addition, the Committee may grant to an optionee an alternative SAR for all or any part of the number of shares covered by an option. If an alternative SAR is granted, the SAP agreement-shall specify the options in respect of which the alternative SAP is granted. Any subsequent exercise of an option by the holder thereof who also holds an alternative SAP shall reduce the alternative SAR by the same number of shares as to which the option is exercised. Any exercise of the alternative SAR shall reduce the holder's option by the same number of shares as to which the SAP is exercised. An alternative SAP granted to an option holder shall specify a time period for exercise of such SAP, which time period may not extend beyond, but may be less than, the time period during which the corresponding option may be exercised. The failure of the holder of the alternative SAP to exercise such SAR within the time period specified shall not reduce the holder's option rights. The Committee may later grant to the holder of an option that is not an Incentive Stock Option an alternative SAR covering all or a portion of such shares, provided, however, that the aggregate amount of all alternative SAR's held by an option holder shall at no time exceed the total number of shares covered by such holder's unexercised options.

(b) Exercise. A SAP shall be exercised by the delivery to the Company of a written notice which shall state that the individual elects to exercise his or her SAP as to the number of shares specified in the notice and which shall further state what portion, if any, of the SAR award amount (hereinafter defined) the holder thereof requests be paid in cash and what portion, if any, the holder requests be paid in Common Stock of the Company. The Committee promptly shall cause to be paid to such holder the SAP award amount either in cash, in Common Stock of the Company, or any combination of cash and stock as it may determine, Such determination may be either in accordance with the request made by the holder of the SAP or otherwise, in the sole discretion of the Committee. The SAP award amount is (i) the excess of the price of one share of the Company's Common Stock on the date of exercise over (A) the per share price of the Company's Common Stock on the date the SAR was granted or (B) in the case of an alternative SAP, the per share option price for the option in respect of which the alternative SAP was granted multiplied by (ii) the number of shares as to which the SAR is exercised. For the purposes hereof the price of one share of the Company's Common Stock on the date of exercise and on the date of the grant shall be the mean between the high and low prices of the Company's Common Stock on the New York Stock Exchange Composite Tape on such dates provided that the Committee may adopt any other criterion for the determination of such price as it may determine to be appropriate.

(c) Other Provisions of Plan Applicable. All provisions of this Plan applicable to options granted hereunder shall apply with equal effect to SAP's. Not in limitation of the prior sentence it is expressly provided that no SAP shall be transferable otherwise than by will or the laws of descent and distribution and an SAP may be exercised, during the lifetime of the holder thereof, only by such holder.

16. Adjustments Upon Changes in Capitalization or Corporate Acquisitions.

Notwithstanding any other provisions of the Plan, the option and SAP agreements may contain such provisions as the Committee shall determine to be appropriate for the adjustment of the number and class of shares subject to each outstanding option or SAP, the option prices and SAP award amounts in the event of changes in the outstanding Common Stock by reason of stock dividends, recapitalizations, mergers, consolidations, spin-offs, split-of fs, split-ups, combinations or exchanges of shares and the like, and, in the event of any such change in the outstanding Common Stock, the aggregate number and class of shares available under the Plan and the maximum number of shares as to which options and SAP's may be granted to any individual shall be appropriately adjusted by the Committee, whose determination shall be conclusive. In the event the Company or a subsidiary enters into a transaction described in Section 424(a) of the Code with any other corporation, the Committee may grant options or SAP's to employees or former employees of such corporation in substitution of options or SAP's previously granted to them upon such terms and conditions as shall be necessary to qualify such grant as a substitution described in Section 424(a) of the Code. -

17. Amendment and Termination.

The Board, or the Committee may at any time terminate the Plan, or make such modifications of the Plan as they shall deem advisable; provided, however, that the Board or Committee may not, without further approval by the holders of Common Stock, make any modifications which, by applicable law, require such approval. No termination or amendment of the Plan may, without the consent of the optionee to whom any option or SAP shall theretofore have been granted, adversely affect the rights of such optionee under such option or SAP.

18. Effectiveness of the Plan.

The Plan became effective upon adoption by the Board on October 2, 1990 subject, however, to its further approval by the stockholders of the Company which was given on February 5, 1991 and was amended in its entirety effective June 1, 1997.

-19. Time of Granting of Options or SAP's.

An option or SAP grant under the Plan shall be deemed to be made on the date on which the Committee, by formal action of its members duly recorded in the records thereof, or the CEO, as the case may be, makes an award of an option or SAP to an eligible employee of the Company or one of its subsidiaries or joint ventures provided that such option or SAP is evidenced by a written option or SAP agreement duly executed on behalf of the Company and on behalf of the optionee within a reasonable time after the date of the Committee or CEO action.

20. Term of Plan.

This Plan shall terminate ten (10) years after the date on which it was initially approved and adopted by the Board as set forth under Paragraph 18 and no option or SAP shall be granted hereunder after the expiration of such ten-year period. Options or SAP's outstanding at the termination of the Plan shall continue in full force and effect and shall not be affected thereby.

The foregoing Amended and Restated Plan was approved and adopted by the Compensation and Human Resources Committee of the Board of Directors of the Company on November 4, 1997 effective for options granted on or after October 1, 1997.