EMERSON ELECTRIC CO.
                          2001 STOCK OPTION PLAN
 
    1. PURPOSE OF THE PLAN. The Emerson Electric Co. 2001 Stock Option Plan
(the "Plan") is intended as an incentive to, and to encourage ownership of
the stock of Emerson Electric Co. ("Company") by key employees of the
Company, its subsidiaries, or any other entity in which the Company has a
significant equity or other interest as determined by the Committee (such
other entities hereinafter referred to as "affiliates"), and outside
directors of the Company. 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 be Incentive Stock Options.
 
    2. STOCK SUBJECT TO THE PLAN.
 
        (a) Stock Available For Grants of Options and Stock Appreciation
    Rights ("SARs"). Ten million (10,000,000) shares of the Common Stock of
    the Company ("Common Stock") have been allocated to the Plan and will
    be reserved for the grant of options or SARs under the Plan, subject to
    adjustment under Paragraph 16. The maximum number of options or SARs
    which may be awarded to a participant under this Plan shall be options
    for 500,000 shares per year; provided, however, that the Chief
    Executive Officer of the Company (the "CEO") may be awarded two times
    that number per year.
 
        (b) Reservation of Shares. The Company will allocate and reserve in
    each fiscal year a sufficient number of shares of its Common Stock for
    issue upon the exercise of options or SARs granted under the Plan. The
    Company may, in its discretion, use shares held in the Treasury or
    authorized but unissued shares of Common Stock for the Plan.
 
        (c) Determination of Shares. Any shares covered by an award (or
    portion of an award) granted under the Plan, which is forfeited or
    canceled, expires or is settled in cash, shall be deemed not to have
    been delivered for purposes of determining the maximum number of shares
    available for delivery under the Plan. Any shares withheld for tax
    withholding obligations shall not be deemed to have been delivered for
    purposes of determining the maximum number of shares available for
    delivery under the Plan. If any option is exercised by tendering shares
    of Common Stock, either actually or by proof of ownership, to the
    Company as full or partial payment in connection with the exercise of
    an option under this Plan, only the number of shares issued net of the
    shares tendered shall be deemed delivered for purposes of determining
    the maximum number of shares available for delivery under the Plan. In
    addition, any shares that relate to options or SARs granted under the
    Plan which are forfeited back to the Company because of failure to meet
    an award contingency or condition shall again be available for delivery
    pursuant to new awards granted under the Plan. Further, shares issued
    under the Plan through the settlement, assumption or substitution of
    outstanding awards or through obligations to grant future awards as a
    condition of the Company acquiring another entity shall not reduce the
    maximum number of shares available for delivery under the Plan.
    Similarly, any shares that are repurchased by the Company on the open
    market or in private transactions, may be added to the aggregate number
    of shares available for delivery under the Plan, so long as the
    aggregate price paid for such repurchased shares does not exceed the
    cumulative amount received in cash by the Company for the exercise of
    options or issuance of awards granted under the Plan. In no event shall
    more than ten million (10,000,000) shares be available for granting
    Incentive Stock Options.
 
    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 SARs 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 (or
any affiliate'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 which the Committee believes necessary or advisable for the
proper administration of the Plan. The Committee's determinations on
matters relating to the Plan shall be final and conclusive on the Company
and all participants. The Committee may, in its discretion, delegate to the
CEO the authority to determine the individuals to whom, and the time or
times at which and terms upon which, options and SARs shall be granted and
the number of shares to be
 
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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 as amended (the "1934 Act").
 
    4. THE COMMITTEE. The Committee shall consist of two or more
non-employee directors as defined in Rule 16b-3 under the 1934 Act or any
successor Rule. In the event the Committee shall no longer meet the
qualification requirements set forth above, the Board of Directors of the
Company shall appoint a new committee to administer the Plan, whose members
shall cause the committee to qualify under the transaction approval
requirements of Rule 16b-3. The Committee shall have the authority to
appoint a subcommittee whose members qualify as "outside" directors under
Section 162(m) of the Code and the regulations thereunder, to administer
awards under the Plan to the extent required to meet the requirements of
Section 162(m) of the Code and the regulations thereunder.
 
    5. ELIGIBILITY. The Committee's powers and authority to award options
(including Incentive Stock Options) and SARs include, but are not limited
to, selecting individuals who are key employees of the Company,
subsidiaries, or its affiliates and outside directors of the Company,
provided, that Incentive Stock Options may only be awarded to key employees
of the Company or its subsidiaries.
 
    6. OPTION PRICES. The purchase price of the Common Stock under each
option shall not be less than 100% 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 either actually or by proof of ownership to
the Company of shares of the Common Stock of the Company, owned by the
optionee and registered in the optionee's name or held for the optionee's
benefit by a registered holder, 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 Incentive Stock Option if such shares were acquired by
the optionee through the exercise of an Incentive Stock Option or an
employee stock purchase plan described in Section 423 of the Code, unless
(i) such shares have been held by the optionee for at least one (1) year
and (ii) at least two (2) years have elapsed since such option was granted.
(The optionee may effect a "cashless exercise" of an option in lieu of
directly paying the option price in cash or shares owned by the optionee,
provided that such "cashless exercise" is facilitated through a third
party, other than the Company, in accordance with the rules and procedures
adopted by the Committee.) The cash proceeds from sales 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. Upon
exercise of an option which is not an Incentive Stock Option by an optionee
who is a reporting person under Section 16(a) of the 1934 Act, the Company
shall, as required by applicable law, withhold sufficient shares to satisfy
the Company's obligation to withhold for federal and state taxes on such
exercise, provided that prior to such exercise, the Committee may approve
in advance an alternative method of withholding. Upon exercise of an option
which is not an Incentive Stock Option by an optionee who is not a
reporting person under Section 16(a) of the 1934 Act, the Committee may, in
its discretion, in lieu of withholding cash otherwise payable to such
person, 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 the amount specified in Section 422(d) of
the Code.
 
    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 a director of the Company or an employee
of the Company, its subsidiaries or affiliates and has been so engaged or
employed continuously since the granting of
 
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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.
Notwithstanding the foregoing, in the event of a Change of Control (as
hereinafter defined) all options shall become fully exercisable. For this
purpose, a "Change of Control" shall mean:
 
        (a) The purchase or other acquisition (other than from the Company)
    by any person, entity or group of persons, within the meaning of
    Section 13(d) or 14(d) of the 1934 Act (excluding, for this purpose,
    the Company or its subsidiaries or any employee benefit plan of the
    Company or its subsidiaries), of beneficial ownership (within the
    meaning of Rule 13d-3 of the 1934 Act) of 20% or more of either the
    then-outstanding shares of Common Stock or the combined voting power of
    the Company's then-outstanding voting securities entitled to vote
    generally in the election of directors; or
 
        (b) Individuals who, as of the date of the adoption of the Plan,
    constitute the Board of Directors of the Company (the "Incumbent
    Board") cease for any reason to constitute at least a majority of the
    Board of Directors of the Company, provided that any person who becomes
    a director subsequent to the date hereof whose election, or nomination
    for election by the Company's stockholders was approved by a vote of at
    least a majority of the directors then comprising the Incumbent Board
    (other than an individual whose initial assumption of office is in
    connection with an actual or threatened election contest relating to
    the election of directors) shall be, for purposes of this paragraph,
    considered as though such person were a member of the Incumbent Board;
    or
 
        (c) Approval by the stockholders of the Company of a
    reorganization, merger, or consolidation, in each case with respect to
    which persons who were the stockholders of the Company immediately
    prior to such reorganization, merger or consolidation would not
    immediately thereafter own more than 50% of, respectively, the common
    stock and the combined voting power entitled to vote generally in the
    election of directors of the reorganized, merged or consolidated
    corporation's then-outstanding voting securities, or of a liquidation
    or dissolution of the Company or of the sale of all or substantially
    all of the assets of the Company.
 
    10. TERMINATION OF EMPLOYMENT OR SERVICE AS AN OUTSIDE DIRECTOR. Any
option issued hereunder must be exercised prior to the optionee's
termination of employment with the Company (or service as an outside
director of the Company), a subsidiary or any affiliate, except that if the
employment of an optionee (other than an outside director of the Company)
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, in the event the Company, a
subsidiary or an affiliate divests itself of all its interest in a
subsidiary or an affiliate, all outstanding options held by an optionee
employed by such divested subsidiary or affiliate may be exercised by such
optionee at any time within three (3) months after such divestiture, but
not after ten (10) years from the date on which such options were granted.
In addition, all outstanding options held by an optionee who terminates
employment (or service as an outside director of the Company) on account of
retirement (as determined by the Committee) shall be fully exercisable at
any time within five (5) years after such retirement, but not after ten
(10) years from the date on which such options were granted. If the
optionee terminates employment (or service as an outside director) 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 (or
service) 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 SARs or options which
are not Incentive Stock Options, an affiliate 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 service
as an outside director of the Company) or any subsidiary or affiliate or
interfere in any way with the right of the Company or any subsidiary or
affiliate thereof to terminate his or her employment at any time.
 
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    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 affiliate of
the Company) or while he or she is serving as an outside director of the
Company, the options or SARs held by the optionee at death shall become
fully vested immediately and may be exercised 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. In the event of
the death of an optionee within three months after termination of
employment or service as an outside director of the Company (or one (1)
year in the case of the termination (or service) of an optionee who is
disabled as above provided or five (5) years in the case of termination of
employment (or service) on account of retirement, as provided in paragraph
10 above) the option or SAR 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, trusts 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 or service as an
outside director of the Company.
 
    13. SUCCESSIVE OPTION GRANTS. Successive option grants may be made to
any holder of options under the Plan.
 
    14. REGISTRATION. Each option under the Plan shall be granted only on
the condition that the Company maintain with the Securities and Exchange
Commission a registration statement for all Common Stock that can be
purchased thereunder. In the event that the Company fails to maintain a
registration statement for this Common Stock, the right to purchase this
Common Stock through the exercise of options granted under the Plan will be
suspended immediately.
 
    15. STOCK APPRECIATION RIGHTS.
 
        (a) Grant. The Committee, in its discretion, may grant under the
    Plan a SAR 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 options. If an alternative SAR is granted,
    the SAR agreement shall specify the options in respect of which the
    alternative SAR is granted. Any subsequent exercise of specified
    options by the holder thereof shall reduce the alternative SAR by the
    same number of shares as to which the options are exercised. Any
    exercise of the alternative SAR shall reduce the holder's specified
    options by the same number of shares as to which the SAR is exercised.
    An alternative SAR granted to an option holder shall specify a time
    period for exercise of such SAR, which time period may not extend
    beyond, but may be less than, the time period during which the
    corresponding options may be exercised. The failure of the holder of
    the alternative SAR 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 shares
    covered by an alternative SAR 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 SAR 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 SAR 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 SAR 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 SAR or otherwise, in the sole
    discretion of the Committee. The SAR 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
 
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    was granted or (B) in the case of an alternative SAR, the per share
    option price for the option in respect of which the alternative SAR 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 the Plan
    applicable to options granted hereunder shall apply with equal effect
    to SARs. Not in limitation of the prior sentence, it is expressly
    provided that no SAR shall be transferable otherwise than by will or
    the laws of descent and distribution and a SAR 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 SAR 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 SAR, the option prices and SAR
exercise amounts in the event of changes in the outstanding Common Stock by
reason of stock dividends, recapitalizations, mergers, consolidations,
spin-offs, split-offs, 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 SARs may be
granted to any individual shall be appropriately adjusted by the Committee,
whose determination shall be conclusive. In the event the Company, a
subsidiary or an affiliate, enters into a transaction described in Section
424(a) of the Code with any other corporation, the Committee may grant
options or SARs to employees or former employees of such corporation in
substitution of options or SARs 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 the Committee
may not, without further approval by the holders of Common Stock, make any
modifications which, by applicable law or rule, require such approval. No
termination or amendment of the Plan may, without the consent of the
optionee to whom any option or SAR shall theretofore have been granted,
adversely affect the rights of such optionee under such option or SAR.
 
    18. EFFECTIVENESS OF THE PLAN. The Plan will become effective upon
adoption by the Board of Directors of the Company on November 6, 2001,
subject to approval of the Plan by the stockholders of the Company within
twelve (12) months of such date. Options and SARs may be granted before
such stockholder approval (but may not be exercisable before such
approval), and if such approval is not obtained, this Plan and such options
and SARs shall be void and of no force or effect.
 
    19. TIME OF GRANTING OF OPTIONS OR SARS. An option or SAR 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 SAR to an eligible
employee of the Company or one of its subsidiaries or affiliates or to an
outside director of the Company, provided that such option or SAR is
evidenced by a written option or SAR 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. The 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 SAR shall be granted hereunder
after the expiration of such ten-year period. Options or SARs outstanding
at the termination of the Plan shall continue in full force and effect and
shall not be affected thereby.
 
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    The foregoing Plan was adopted by the Board of Directors of the Company
on November 6, 2001.
 
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