Form: DEF 14A

Definitive proxy statements

December 4, 2000

DEF 14A: Definitive proxy statements

Published on December 4, 2000



SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

EMERSON ELECTRIC CO.
--------------------
(Name of Registrant as Specified in Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.

(1) Title of each class of securities to which transaction
applies:

- -------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

- -------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):

- -------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

- -------------------------------------------------------------------------------

(5) Total fee paid:

- -------------------------------------------------------------------------------

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

- -------------------------------------------------------------------------------

(2) Form, Schedule or Registration Statement No.:

- -------------------------------------------------------------------------------

(3) Filing Party:

- -------------------------------------------------------------------------------

(4) Date Filed:

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NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS

[logo]
EMERSON




St. Louis, Missouri
December 4, 2000

TO THE STOCKHOLDERS OF
EMERSON ELECTRIC CO.:

The Annual Meeting of the Stockholders of Emerson Electric Co. will be
held at the office of the Company, 8000 West Florissant Avenue, St. Louis,
Missouri on Tuesday, February 6, 2001, commencing at 10:00 a.m., at which
meeting only holders of the common stock of record at the close of business
on November 28, 2000, will be entitled to vote, for the following purposes:

1. To elect five Directors;


2. To vote upon a proposal to approve the amendment of the Restated
Articles of Incorporation to limit the liability of Directors;


3. To vote upon the stockholder proposal described in the accompanying
proxy statement, if properly presented at the meeting; and

4. To transact such other and further business, if any, as lawfully may
be brought before the meeting.

EMERSON ELECTRIC CO.

By /s/ Charles F. Knight

Chairman of the Board

/s/ W. W. Withers

Secretary

EVEN THOUGH YOU MAY PLAN TO ATTEND THE MEETING IN PERSON, PLEASE VOTE
BY TELEPHONE OR THE INTERNET, OR EXECUTE THE ENCLOSED PROXY CARD AND MAIL
IT PROMPTLY. A RETURN ENVELOPE (WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES) IS ENCLOSED FOR YOUR CONVENIENCE. TELEPHONE AND INTERNET
VOTING INFORMATION IS PROVIDED ON YOUR PROXY CARD. SHOULD YOU ATTEND THE
MEETING IN PERSON, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.

IMPORTANT

PLEASE NOTE THAT A TICKET IS REQUIRED FOR ADMISSION TO THE MEETING. IF
YOU PLAN TO ATTEND IN PERSON AND ARE A STOCKHOLDER OF RECORD, PLEASE CHECK
THE BOX ON YOUR PROXY CARD AND BRING THE TEAR-OFF ADMISSION TICKET WITH YOU
TO THE MEETING. IF YOUR SHARES ARE HELD BY SOMEONE ELSE (SUCH AS A BROKER)
PLEASE BRING WITH YOU A LETTER FROM THAT FIRM OR AN ACCOUNT STATEMENT
SHOWING YOU WERE A BENEFICIAL HOLDER ON NOVEMBER 28, 2000.


EMERSON ELECTRIC CO.

8000 WEST FLORISSANT AVENUE, ST. LOUIS, MISSOURI 63136

PROXY STATEMENT

FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD FEBRUARY 6, 2001

This proxy statement is furnished to the stockholders of Emerson
Electric Co. in connection with the solicitation of proxies for use at the
Annual Meeting of Stockholders to be held February 6, 2001, and at all
adjournments thereof, for the purposes set forth in the accompanying Notice
of Annual Meeting of Stockholders. This proxy statement and the enclosed
form of proxy are first being mailed to stockholders on or about December 4,
2000.


If you have a disability which requires accommodation at the meeting,
please call 314-553-2197; requests must be received by January 15, 2001.


REGISTERED SHAREHOLDERS CAN SIMPLIFY THEIR VOTING AND SAVE THE COMPANY
EXPENSE BY CALLING 1-800-840-1208 AND VOTING BY TELEPHONE, OR VOTING BY
INTERNET AT http://www.eproxy.com/emr/. Telephone and Internet voting
information is provided on your proxy card. A Control Number, located on
the proxy card, is designed to verify your identity and allow you to vote
your shares and confirm that your voting instructions have been properly
recorded.

If your shares are held in the name of a bank or broker, follow the
voting instructions on the form you receive from that firm. The
availability of telephone or Internet voting will depend on that firm's
voting processes.

IF YOU VOTE BY TELEPHONE OR INTERNET, IT IS NOT NECESSARY TO RETURN
YOUR PROXY CARD.

If you do not choose to vote by telephone or Internet, please return
your proxy card, properly signed, and the shares represented will be voted
in accordance with your directions. You can specify your choices by marking
the appropriate boxes on the proxy card. If your proxy card is signed and
returned without specifying choices, the shares will be voted FOR Proposals
I and II, AGAINST Proposal III and otherwise in the discretion of the
proxies. The Company knows of no reason why any of the nominees for
Director named herein would be unable to serve. In the event, however, that
any nominee named should, prior to the election, become unable to serve as
a Director, your proxy (unless designated to the contrary) will be voted
for such other person or persons as the Board of Directors of the Company
may recommend.

You may revoke your proxy at any time before it is voted (in the case
of proxy cards) by giving notice to the Secretary of the Company or by
executing a later-dated proxy. To revoke a proxy or change your vote by
telephone or Internet, you must do so by telephone or Internet (following
the directions on your proxy card) by twelve midnight Eastern time on
February 5, 2001.


The close of business on November 28, 2000, has been fixed as the
record date for the determination of stockholders entitled to vote at the
Annual Meeting of Stockholders. As of the record date, there were
outstanding and entitled to be voted at such meeting 428,857,005 shares of
common stock. The holders of the common stock will be entitled to one vote
for each share of common stock held of record on the record date.


A copy of the Company's Annual Report to Stockholders for the fiscal
year ended September 30, 2000 accompanies this proxy statement.

This proxy is solicited by the Board of Directors of the Company. The
solicitation will be by mail and the expense thereof will be paid by the
Company. The Company has retained Georgeson & Company, Inc. to assist in
the solicitation of proxies at an estimated cost of $13,000 plus expenses.
In addition, solicitation of proxies may be made by telephone or telegram
by Directors, officers or regular employees of the Company.

2


I. ELECTION OF DIRECTORS

NOMINEES AND CONTINUING DIRECTORS

The Board of Directors is divided into three classes, with the terms of
office of each class ending in successive years. Five Directors of the
Company are to be elected for terms ending at the Annual Meeting in 2004,
or until their respective successors have been elected and have qualified.
Certain information with respect to the nominees for election as Directors
proposed by the Company, as well as the other Directors whose terms of
office as Directors will continue after the Annual Meeting, is set forth
below.




SHARES OF
EMERSON
SERVED AS COMMON STOCK
NAME, AGE, PRINCIPAL OCCUPATION DIRECTOR BENEFICIALLY
OR POSITION, OTHER DIRECTORSHIPS SINCE OWNED(1)(2)(3)
-------------------------------- --------- --------------

NOMINEES FOR TERMS ENDING IN 2004

J. G. Berges, 53............................................ 1997 261,615(4)
President of Emerson

He is also a Director of MCN Energy Group Inc. and PPG
Industries, Inc.

D. N. Farr, 45.............................................. 2000(5) 127,983
Chief Executive Officer of Emerson

R. L. Ridgway, 65........................................... 1995 4,866
Former Assistant Secretary of State for Europe and Canada

She is also a Director of The Boeing Company, Minnesota
Mining and Manufacturing Company, Nabisco Holdings
Corp., Nabisco Group Holdings Corp., New Perspective
Fund, Inc., Sara Lee Corporation and Union Carbide
Corporation

W. M. Van Cleve, 71......................................... 1984 39,025(4)
Partner of Bryan Cave LLP, lawyers

E. E. Whitacre, Jr., 59..................................... 1990 6,556
Chairman and Chief Executive Officer of SBC Communications
Inc., a diversified communications holding company

He is also a Director of Anheuser-Busch Companies, Inc.,
Burlington Northern Santa Fe Corporation and The May
Department Stores Company

TO CONTINUE IN OFFICE UNTIL 2003

L. L. Browning, Jr., 71..................................... 1969 208,319
Former Vice Chairman of Emerson

A. A. Busch III, 63......................................... 1985 27,356
Chairman of the Board and President of Anheuser-Busch
Companies, Inc., brewery, container manufacturer and
theme park operator

He is also a Director of GenAmerica Corporation and SBC
Communications Inc.

Arthur F. Golden, 54........................................ 2000(5) 1,000
Partner of Davis Polk & Wardwell, lawyers

R. B. Horton, 61............................................ 1987 5,518
Retired Chairman of Railtrack Group PLC

He is also a Director of PartnerRe Ltd. and Premier
Farnell plc


3



SHARES OF
EMERSON
SERVED AS COMMON STOCK
NAME, AGE, PRINCIPAL OCCUPATION DIRECTOR BENEFICIALLY
OR POSITION, OTHER DIRECTORSHIPS SINCE OWNED(1)(2)(3)
-------------------------------- --------- --------------

G. A. Lodge, 68............................................. 1974 10,156
President of InnoCal Management, Inc., a venture capital
management company

V. R. Loucks, Jr., 66....................................... 1979(6) 6,156
Retired Chairman and Chief Executive Officer of Baxter
International Inc.

He is also a Director of Affymetrix, Inc., Anheuser-Busch
Companies, Inc., GeneSoft, Inc. and The Quaker Oats
Company

TO CONTINUE IN OFFICE UNTIL 2002

D. C. Farrell, 67........................................... 1989 16,156
Retired Chairman and Chief Executive Officer of The May
Department Stores Company

He is also a Director of Ralston Purina Company

J. A. Frates, 80............................................ 1966 30,652
Private investor

W. J. Galvin, 54............................................ 2000(5) 178,186
Executive Vice President and Chief Financial Officer of
Emerson

C. F. Knight, 64............................................ 1972 1,789,884
Chairman of the Board of Emerson(5)

He is also a Director of Anheuser-Busch Companies, Inc.,
BP Amoco p.l.c., International Business Machines
Corporation, Morgan Stanley Dean Witter & Co. and SBC
Communications Inc.

R. B. Loynd, 73............................................. 1987 12,156
Chairman of the Executive Committee of Furniture Brands
International, Inc., manufacturer and marketer of
furniture products

C. A. Peters, 45............................................ 2000(5) 131,313
Senior Executive Vice President of Emerson

All Directors and Executive Officers as a Group
(18 persons).............................................. 3,215,916(7)


- -------

(1) Beneficial ownership of Emerson common stock is stated as of September
15, 2000 except Mr. Golden, which is as of October 26, 2000. The
foregoing table includes all executive officers of the Company named in
the Summary Compensation Table. Under rules of the Securities and
Exchange Commission, persons who have power to vote or dispose of
securities, either alone or jointly with others, are deemed to be the
beneficial owners of such securities. Accordingly, except in the case
of Mr. Berges, shares owned separately by spouses are not included.
Each person reflected in the table has both sole voting power and sole
investment power with respect to the shares included in the table,
except as described in the footnotes below and except as follows: (i)
with respect to the following shares, the person named has no investment
power: Mr. Knight-298,674; Mr. Farr-54,000; Mr. Berges-74,000; Mr. Galvin-
64,000; Mr. Peters-50,000; Mr. Browning-3,162; and each other non-employee
Director-3,756; and (ii) with respect to the following shares the person
named has no voting power: Mr. Knight-8,211; Mr. Farr-2,045; Mr. Berges-
3,821; Mr. Galvin-5,713; and Mr. Peters-2,041.

(2) Includes the following shares which such persons have or will have
within 60 days after September 15, 2000, the right to acquire upon
the exercise of employee stock options: Mr. Knight-162,667;
Mr. Farr-42,662; Mr. Berges-61,158; Mr. Galvin-50,428; and
Mr. Peters-31,120.


4


(3) No person reflected in the table owns more than .5% of the outstanding
shares of Emerson common stock.

(4) Includes 38,291 shares as to which Mr. Berges shares voting and
investment power. Includes 18,869 shares held by Mr. Van Cleve as
co-trustee of three trusts and a charitable foundation, as to which
Mr. Van Cleve shares voting and investment power and disclaims beneficial
ownership.

(5) The Board of Directors appointed Messrs. Farr, Galvin and Peters as
Directors on October 11, 2000 and as members of the classes of
Directors whose terms expire in 2001, 2002 and 2002, respectively, or
until their respective successors have been elected and have qualified.
On such date, Mr. Farr also was elected the Company's Chief Executive
Officer, and Mr. Peters was elected the Company's Senior Executive Vice
President and e-business leader. Mr. Knight was also Chief Executive
Officer of Emerson until October 11, 2000. The Board of Directors
appointed Mr. Golden as a Director on November 7, 2000 to fill the
vacancy created by the retirement of Mr. A. E. Suter, the Company's
Chief Administrative Officer, who retired as a Director as of that
date.

(6) Mr. Loucks previously served as a Director from April 1974 to December
1975.

(7) Includes 423,491 shares of common stock which executive officers have,
or will have within 60 days after September 15, 2000, the right to
acquire upon exercise of employee stock options. Shares owned as a
group represents .75% of the outstanding common stock of the Company.
The shares issuable upon exercise of options were deemed to be
outstanding for purposes of calculating the percentage of outstanding
shares. The total includes 28,063 shares held in employee accounts
under the Company's 401(k) savings plans, as to which employees have
investment power only.



Each of the nominees and continuing Directors has had the same position
or other executive positions with the same employer during the past five
years, except as described in the footnotes to the above table and as
follows:

* Mr. Farrell retired as Chairman and Chief Executive Officer of The
May Department Stores Company in April 1998.

* Mr. Loucks relinquished the position of Chief Executive Officer of
Baxter International Inc. at the end of 1998 and retired as Chairman
at the end of 1999.

* Sir Robert Horton retired as Chairman of Railtrack PLC in August
1999.

CERTAIN BUSINESS RELATIONSHIPS

Mr. Van Cleve is a partner and former Chairman of the law firm of Bryan
Cave LLP, which firm the Company retained in fiscal 2000 and expects to
retain in fiscal 2001.

Mr. Golden is a partner of the law firm of Davis Polk & Wardwell, which
firm the Company retained in fiscal 2000 and expects to retain in fiscal
2001.

BOARD OF DIRECTORS AND COMMITTEES

The members of the Board of Directors are elected to various
committees. The standing committees of the Board (and the respective
chairmen) are: Executive Committee (Knight), Audit Committee (Busch),
Compensation and Human Resources Committee (Loucks), Finance Committee
(Horton), Pension Committee (Lodge) and Public Policy Committee (Whitacre).
The Compensation and Human Resources Committee acts as a nominating
committee and reviews new Director nominees. There were eleven meetings of
the Board of Directors during fiscal 2000. All of the incumbent Directors
attended at least 75% of the meetings of the Board and committees on which
they served, except Mr. Berges and Mr. Horton, who attended 71% and 67%,
respectively, of such meetings.

The functions of the Compensation and Human Resources Committee are to
review and approve the salaries of all officers of the Company; review and
approve all salaries above a specified level to be paid to non-officer
employees and salaries of all division presidents; grant awards under and
administer the Company's stock option and incentive shares plans; review
and approve all additional compensation plans; determine if necessary when
service by
5


officers and Directors with another entity is eligible for indemnification
under the Company's Bylaws; monitor the senior management and Director
succession plans and review new Director nominees; and authorize Company
contributions to benefit plans, and adopt and terminate benefit plans not
the prerogative of management. The Committee met six times in fiscal 2000.
The members of the Committee are V. R. Loucks, Jr., Chairman, D. C. Farrell,
J. A. Frates and E. E. Whitacre, Jr.

See the "Report of the Compensation and Human Resources Committee of
the Board of Directors on Executive Compensation" below.

The functions and membership of the Audit Committee are described under
"Report of the Audit Committee" below.

DIRECTOR COMPENSATION

Directors who are employees of the Company do not receive any
compensation for service as Directors. Each non-employee Director is
currently paid an annual retainer of $30,000 plus an award of restricted
shares of Company common stock with a market value on the date of the award
of $60,000 and fees of $1,500 plus expenses for attendance at each Board
meeting. Such restricted stock does not vest and cannot be sold until the
Director's retirement or earlier death or resignation. Each committee
chairman is currently paid an annual retainer of $5,000, and each committee
member is paid $1,250 plus expenses for attendance at each committee
meeting.

Directors may elect to defer all or a part of such cash compensation;
such deferred amounts are credited with interest quarterly at the prime
rate charged by Bank of America, N.A. Directors in the alternative may
elect to have deferred fees converted into units equivalent to shares of
Emerson common stock, and their accounts are credited with additional units
representing dividend equivalents. All deferred fees are payable only in
cash.

In addition, the Company has a Continuing Compensation Plan for
Non-Management Directors. Under this plan, a Director who is not an
employee of the Company who has served as a Director for at least five
years will, after the later of termination of service as a Director or age
72, receive for life a percentage of the annual cash retainer for Directors
in effect at the time of termination of service. Such percentage is 50% for
five years' service and increases by 10% for each additional year of
service to 100% for ten years' or more service. In the event that service
as a Director terminates because of death, the benefit will be paid to the
surviving spouse for five years.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Company's Directors and executive officers are required, pursuant
to Section 16(a) of the Securities Exchange Act of 1934, to file statements
of beneficial ownership and changes in beneficial ownership of common stock
of the Company with the Securities and Exchange Commission and the New York
Stock Exchange and to furnish copies of such statements to the Company.

Based solely on a review of the copies of such statements furnished to
the Company and written representations that no other such statements were
required, the Company believes that during fiscal year 2000 its Directors
and executive officers complied with all such requirements except W. M. Van
Cleve, who filed late two statements to report stock units credited on
deferred compensation.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the Company's financial reporting process
on behalf of the Board of Directors. The Committee is composed of four
independent Directors, met four times in fiscal 2000, and operates under a
written charter (Appendix A) adopted by the Board of Directors. Management
has the primary responsibility for the financial statements and the
reporting process, including the Company's systems of internal controls. In
fulfilling its oversight responsibilities, the Committee reviewed the
audited financial statements in the Annual Report on Form 10-K with
management, including a discussion of the quality and the acceptability of
the Company's financial reporting and controls.

The Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality and the acceptability of the Company's
financial reporting and such other matters as are required to be

6


discussed with the Committee under generally accepted auditing standards.
In addition, the Committee has discussed with the independent auditors
the auditors' independence from management and the Company, including the
matters in the auditors' written disclosures required by the Independence
Standards Board.

The Committee also discussed with the Company's internal and
independent auditors the overall scope and plans for their respective
audits. The Committee meets periodically with the internal and independent
auditors, with and without management present, to discuss the results of
their examinations, their evaluations of the Company's internal controls,
and the overall quality of the Company's financial reporting.

In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors that the audited financial
statements be included in the Annual Report on Form 10-K for the fiscal
year ended September 30, 2000 for filing with the Securities and Exchange
Commission. The Committee also evaluated and recommended to the Board the
reappointment of the Company's independent auditors for fiscal 2001.

Audit Committee

A. A. Busch III, Chairman
R. B. Loynd
R. L. Ridgway
W. M. Van Cleve

7


EXECUTIVE COMPENSATION


The following information relates to compensation received or earned by
the Company's Chief Executive Officer and each of the other four most highly
compensated executive officers of the Company for each of the last three
fiscal years of the Company.


SUMMARY COMPENSATION TABLE


LONG-TERM COMPENSATION(1)
-----------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUT
-------------------------------------------------------------------------------------------------
SECURITIES LONG-
OTHER UNDERLYING TERM ALL
ANNUAL RESTRICTED OPTIONS/ INCENTIVE OTHER
NAME AND FISCAL COMPENSA- STOCK SARS PLAN COMPEN-
PRINCIPAL POSITION YEAR SALARY($) BONUS($) TION($)(2) AWARD(S)($)(3) (#) PAYOUTS($)(4) SATION($)(5)
------------------ ------ --------- -------- ---------- -------------- ---------- ------------- ------------

C. F. Knight 2000 1,400,000 6,000,000 42,349 3,203,125 100,000 0 130,820
Chairman of the Board and 1999 1,200,000 3,000,000 71,000 2,371,252 0 0 111,160
Chief Executive 1998 900,000 2,500,000 45,439 0 96,667 11,900,662 66,680
Officer(6)(7)

D. N. Farr 2000 450,000 600,000 -- 0 85,000 0 20,314
Senior Executive 1999 350,000 350,000 -- 0 0 0 0
Vice President and Chief
Operating Officer(6)

J. G. Berges 2000 450,000 600,000 -- 0 100,000 0 25,575
President(6) 1999 415,000 535,000 -- 0 0 0 23,241
1998 375,000 475,000 -- 1,136,200 0 1,582,551 20,899

W. J. Galvin 2000 400,000 475,000 -- 0 85,000 0 21,250
Executive Vice 1999 375,000 450,000 -- 0 0 0 19,885
President and Chief 1998 350,000 420,000 -- 1,136,200 0 1,413,707 17,750
Financial Officer(6)

A. E. Suter 2000 515,000 575,000 -- 0 0 0 29,409
Chief Administrative 1999 515,000 575,000 -- 0 0 0 28,541
Officer 1998 490,000 550,000 -- 0 20,000 3,924,739 26,669


- --------

(1) The Company's stock option plans, incentive shares plans and
supplemental executive retirement and savings investment plans
generally provide for acceleration of vesting in the event of a change
in control of the Company.

(2) Consistent with applicable regulations, certain non-cash compensation
need not be reported.

(3) The number of shares of restricted stock held by the named executive
officers at the end of fiscal 2000, and the aggregate value of such
shares, are as follows: C. F. Knight, 298,674 shares having a value
of $20,151,176; D. N. Farr, 54,000 shares having a value of
$3,643,315; J. G. Berges, 74,000 shares having a value of $4,992,691;
W. J. Galvin, 64,000 shares having a value of $4,318,003; and
A. E. Suter, 30,000 shares having a value of $2,024,064. The Company
pays dividends on restricted stock. All restricted stock awards have a
restriction period and are earned over a period of three to ten years
and vest at the end of such period; the shares are payable only if the
executive is employed with the Company and in good standing at the end
of the restriction period. The amounts shown in the table represent the
dollar value based on the stock price per share at award date and do
not reflect any payment to the individual.

(4) Long-term performance awards paid in fiscal year 1998 were based on the
achievement of performance objectives over a five-year period.

(5) Includes for fiscal 2000: (a) the value of the benefit to the named
individuals of the remainder of premiums paid by the Company on behalf
of the named individuals pursuant to the Company's "split dollar"
insurance program in the following amounts: C. F. Knight-$20,820;
D. N. Farr-$312; J. G. Berges-$954; and A. E. Suter-$2,159; and
(b) contributions by the Company on behalf of the named individuals
to the Company's matched savings plan in the following amounts:
C. F. Knight-$110,000; D. N. Farr-$20,002; J. G. Berges-$24,625;
W. J. Galvin-$21,250; and A. E. Suter-$27,250.

8


(6) Mr. Knight was the Company's Chief Executive Officer until October 11,
2000. Mr. Farr was the Company's Senior Executive Vice President and
Chief Operating Officer until October 11, 2000, when he was elected
Chief Executive Officer. Mr. Berges was a Vice Chairman until May 1999
when he was named to his present position. Mr. Galvin was Senior Vice
President-Finance and Chief Financial Officer until February 4, 2000
when he was named to his present position.

(7) Mr. Knight has an employment agreement, which has a term expiring on
September 30, 2006, which provides a minimum annual compensation of
$900,000 during the term. The agreement also provides for his continued
participation in the Company's incentive and benefit plans for the
balance of the term, and vesting in the event of his death, disability
or retirement. Under the terms of the agreement, after retirement Mr.
Knight will be available at management's request to consult with the
Company up to 30 days per year, for a period of not less than 15 years
and will be compensated with a daily consulting fee based on his daily
salary rate at the time of his retirement. He will also continue to have
access to Company facilities and services, including the Company's
aircraft, car, driver, financial planning and club memberships if he meets
certain conditions including not competing with the Company.




OPTION/SAR GRANTS IN LAST FISCAL YEAR


INDIVIDUAL GRANTS(1)
---------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS/SARS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(2)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 0% ($) 5% ($) 10% ($)
---- ------------ ------------ ----------- ---------- ------ ------ -------

C. F. Knight............. 100,000 3.230 42.5625 03/06/2010 0 2,676,733 6,783,366

D. N. Farr............... 35,000 1.130 64.0625 10/04/2009 0 1,410,100 3,573,469
50,000 1.620 42.5625 03/06/2010 0 1,338,366 3,391,683

J. G. Berges............. 50,000 1.620 64.0625 10/04/2009 0 2,014,428 5,104,956
50,000 1.620 42.5625 03/06/2010 0 1,338,366 3,391,683

W. J. Galvin............. 35,000 1.130 64.0625 10/04/2009 0 1,410,100 3,573,469
50,000 1.620 42.5625 03/06/2010 0 1,338,366 3,391,683

A. E. Suter.............. 0 n/a n/a n/a n/a n/a n/a

All Optionees(3)(4)...... 3,095,262 100.0 46.42 various 0 90 million 229 million

All Stockholders......... n/a n/a n/a n/a 0 18 billion 46 billion

Optionees' Gain as % of
All Stockholders' Gain. n/a n/a n/a n/a n/a less than less than
1% 1%

- -------

(1) Options were granted at 100% of the market price on the date of grant.
Options which expire in 2009 become exercisable one-third after one
year from the date of grant, an additional one-third after two years
from the date of grant, and are exercisable in full after three years
from the date of grant. Options which expire in 2010 become exercisable
one-third after 19 months from the date of grant, an additional
one-third after 31 months from the date of grant, and are exercisable
in full after 43 months from the date of grant.

(2) The dollar amounts under these columns are the result of calculations
at 0% and at the 5% and 10% rates set by the Securities and Exchange
Commission and therefore are not intended to forecast possible future
appreciation, if any, of the Company's stock price. The Company did not
use an alternative formula for a grant date valuation, as the Company
is not aware of any formula which will determine with reasonable
accuracy a present value based on future unknown or volatile factors.
Potential realizable value for all stockholders is based on 427.5
million shares outstanding at October 1, 2000 and a per share price of
$67.

(3) Based on total number of options awarded in fiscal year 2000.

(4) No gain to the optionees is possible without an increase in stock
price, which will benefit all stockholders commensurately. A zero
percent stock price appreciation will result in zero dollars for the
optionee.


9



AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES


NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END(#) AT FY-END($)(1)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE (#) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- --------------- ----------- ------------- ----------- -------------

C. F. Knight............ 49,670 1,708,956 130,444 132,223 3,231,860 2,834,008
D. N. Farr.............. 0 0 30,996 85,000 838,157 1,364,536
J. G. Berges............ 0 0 44,492 100,000 1,240,807 1,415,630
W. J. Galvin............ 6,070 230,315 38,762 85,000 1,072,981 1,364,536
A. E. Suter............. 19,006 980,590 46,333 6,667 1,439,225 83,338


- -------

(1) The values represent the difference between the exercise price of the
options and the market price of the Company's common stock on the date
of exercise and at fiscal year-end, respectively.




LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR


ESTIMATED FUTURE
PAYOUTS UNDER
NON-STOCK
PERFORMANCE OR PRICE-BASED PLANS
NUMBER OF OTHER PERIOD
PERFORMANCE UNTIL MATURATION TARGET/MAXIMUM
NAME UNITS OR PAYOUT (# OF SHARES)
---- ----------- ---------------- -----------------

C. F. Knight.................................... 0 n/a n/a
D. N. Farr...................................... 0 n/a n/a
J. G. Berges.................................... 0 n/a n/a
W. J. Galvin.................................... 0 n/a n/a
A. E. Suter..................................... 0 n/a n/a


PENSION PLAN TABLE

The following table shows the annual benefits payable upon retirement
at age 65 for various compensation and years of service combinations under
the Emerson Electric Co. Retirement Plan and a related supplemental
executive retirement plan.



ANNUAL RETIREMENT BENEFIT AT AGE 65 AFTER
------------------------------------------------------------------------------
AVERAGE ANNUAL 10 YEARS 15 YEARS 20 YEARS 25 YEARS 35 YEARS
COMPENSATION OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE
- -------------- ---------- ---------- ---------- ---------- ----------

$ 600,000....................... $ 88,245 $ 132,368 $ 176,490 $ 220,613 $ 308,858
1,800,000....................... 268,245 402,368 536,490 670,613 938,858
3,000,000....................... 448,245 672,368 896,490 1,120,613 1,568,858
4,200,000....................... 628,245 942,368 1,256,490 1,570,613 2,198,858
5,400,000....................... 808,245 1,212,368 1,616,490 2,020,613 2,828,858
6,600,000....................... 988,245 1,482,368 1,976,490 2,470,613 3,458,858
7,800,000....................... 1,168,245 1,752,368 2,336,490 2,920,613 4,088,858
9,000,000....................... 1,348,245 2,022,368 2,696,490 3,370,613 4,718,858


Retirement benefits under the plans are computed on the basis of an
annuity with five years certain, unless the participant elects another
method of payment. The benefit amounts in the Pension Plan Table above have
already been adjusted for Social Security (or any other benefits). The
dollar amounts in the salary and bonus columns of the Summary Compensation
Table above are substantially the same as the compensation covered by the
plans, but deferred bonuses may cause such amounts to vary from the amounts
shown in the Summary Compensation Table.

10


The credited years of service covered by the plans for each of the persons
named in the Summary Compensation Table above are as follows: C. F. Knight,
28; D. N. Farr, 20; J. G. Berges, 25; W. J. Galvin, 28; and A. E. Suter, 21.
Payment of the specified retirement benefits is contingent upon continuation
of the plans in their present form until the employee retires.

The benefits of certain employees may be reduced under the Emerson
Electric Co. Retirement Plan to meet the limits of the Internal Revenue
Code. An employee who is subject to a reduction of benefits under the
Internal Revenue Code may be selected to participate in the supplemental
executive retirement plan. Participation in the supplemental plan is by
award, subject to the sole approval by the Compensation and Human Resources
Committee. All of the officers listed above have been selected to
participate in the supplemental plan. The estimated total retirement
benefits payable at age 65 to C. F. Knight, D. N. Farr, J. G. Berges,
W. J. Galvin and A. E. Suter are 38%, 52%, 53%, 50% and 27%, respectively,
of the dollar amounts shown in the salary and bonus columns of the Summary
Compensation Table.

REPORT OF THE COMPENSATION AND HUMAN RESOURCES COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION

The Compensation and Human Resources Committee of the Board of
Directors (the "Committee"), composed of four non-employee Directors,
establishes and administers the executive compensation program for the
Company's top executives. The program supports the Company's commitment to
enhancing stockholder value. It is designed to attract and retain
high-quality executives, to encourage them to make career commitments to
the Company, and to accomplish the Company's short- and long-term
objectives. The executive compensation package has uniquely served the
Company's stockholders since 1977 by rewarding and motivating executives
for the accomplishment of the Company's objectives. The executive
compensation program is a focused, well-defined management tool that
reinforces the Company's culture and commitment to stockholders.

The Committee has historically viewed compensation as a total package
that includes base salary and variable short- and long-term
(performance-based) compensation. The total program is structured to
deliver a significant percentage of pay through at-risk pay programs which
reward executives if the performance of the Company warrants. Basic
principles underlying the pay programs are the following:

* Maximize stockholder value.

* Retain, reward and motivate key executives.

* Compensate for performance rather than create a sense of entitlement.

* Reward team results.

* Build executive stock ownership.

COMPONENTS OF EXECUTIVE COMPENSATION

To determine the competitive level of total compensation (including
total annual cash and long-term incentives), the Committee sets the total
pay target in a competitive compensation range as benchmarked against
published survey data and data derived through special studies of
comparable industries, including those shown in the peer group performance
graph.

TOTAL ANNUAL CASH COMPENSATION: Cash compensation consists of base
salary and annual cash incentives (bonuses), with the sum of the two
referred to as "Total Cash Compensation." Currently, approximately 1,000
key executives participate in the Total Cash Compensation program. A Total
Cash Compensation target, including base salary and incentive, is
established for each executive officer position using benchmark survey
comparisons. Annual increases, if any, are based on individual merit and
Company affordability. The annual incentive opportunity represents from 25%
to 70% of Total Cash Compensation. Payment of the annual cash incentive
portion is based on the financial performance of the Company versus
pre-established targets. The Committee annually establishes and approves
short-term financial targets which are important to the Company and its
stockholders. Typical targets include sales, earnings per share, pre-tax
earnings and net profits, return on equity, and asset management. To a
lesser degree, individual performance and potential can be a factor. The
relative importance of each target is determined each year by the Committee,
and may vary depending upon the Company's financial objectives for that year.

11


LONG-TERM COMPENSATION INCENTIVES: Long-term incentive awards,
consisting of performance shares, stock options and restricted stock, are
a substantial portion of the total compensation packages of certain key
senior executives and are specifically focused on the Company's longer-term
objectives. Long-term programs are paid in stock. The Company's continuing
philosophy is that executives are expected to hold the stock earned under
the programs. The value of current executive stock holdings is significant,
in absolute terms and in relation to base pay, though the Company does not
establish specific ownership targets. Long-term plan participation and size
of awards are determined by the individual's potential to make significant
contributions to the Company's financial results, level of management
responsibility and individual performance and potential.

PERFORMANCE SHARES: The performance shares plan reinforces the
Company's five-year objectives and rewards executives for achieving those
objectives. The Company has had continuing performance shares programs
since 1977. Participation in this program is limited, and only executives
who can most directly influence the Company's long-term financial success
are included. Awards are denominated in share units with no dividend
payments during the performance period. The Committee approves the
performance measures and evaluates the performance of the Company against
those measures. Historically, the Company's five-year plans have targeted
earnings per share growth objectives and other financial measures deemed
appropriate to accomplish the Company's five-year performance targets. The
final payout (paid in stock) can range from 0% to 100% of the target award,
depending upon the level of achievement of the established financial
targets.


STOCK OPTIONS: The stock option plan provides the long-term focus for a
larger group of key employees. Currently, approximately 2,200 key employees
are eligible to be considered for participation in the stock option
program. Awards are made approximately every three years and are generally
vested one-third each year. Options are granted at 100% of the fair market
value of the Company's common stock on the date of grant and expire ten years
from the date of grant.


RESTRICTED STOCK: The restricted stock program was designed primarily
to retain key executives and potential top management of the Company while
building stock ownership, long-term equity and linking pay directly with
stockholder return. Participation has been highly selective and limited to
a very small group of executives. The Committee views this program as an
important management succession planning and retention tool. The
restriction period for most awards is ten years.

The Company's incentive compensation programs are designed to reward
executives for achievement of the Company's performance objectives. The
plans, as approved by stockholders, are designed to comply with Internal
Revenue Code Section 162(m) to ensure tax deductibility. The Committee
considers it important to retain the flexibility to design compensation
programs that are in the best interest of the Company and the stockholders.

CEO COMPENSATION

In making its decision this year, the Committee considered the
Company's strong performance, its successful repositioning for continuing
growth and profitability, its effective and seamless management transition,
and the benefits to stockholders of Mr. Knight's leadership over 27 years.

FINANCIAL PERFORMANCE: Fiscal 2000 was the 43rd consecutive year of
increased earnings and earnings per share and the 44th consecutive year of
increased dividends per share. This exceptional record of consistent
earnings and dividend growth reflects the Company's long-standing
commitment to stockholder value. Mr. Knight has been chief executive for 27
of those years, demonstrating his commitment to value creation. Over the
past five year period, earnings per share and operating cash flow have both
grown at double-digit rates.

GROWTH AND REPOSITIONING: The Committee noted the success of the
Company's internal growth initiatives, which began five years ago, combined
with the recent positioning of Emerson as a leader in the rapidly growing
market for reliable network power and connectivity for telecommunications
and the Internet. These initiatives have doubled Emerson's underlying sales
growth rate, while profitability remains among the highest in Emerson's
industries; and the Company's businesses are recognized as global leaders
in technology and engineering. The Committee also noted Emerson's
recognition for its rapidly growing expertise and success in e-business
and utilization of Internet technology to achieve economies in sourcing,
greater productivity and stronger customer relationships.

12


MANAGEMENT TRANSITION: The Committee further recognized Mr. Knight's
successful record of management development over many years, and in
particular his leadership over the past four years of Emerson's senior
management transition. In October, the Board of Directors named David N.
Farr Chief Executive Officer and a Director of Emerson. In addition,
Charles A. Peters was promoted to Senior Executive Vice President,
e-business leader and a Director; and Walter J. Galvin, Executive Vice
President and Chief Financial Officer, was named a Director. These three
individuals and President James G. Berges, who is also a Director, were
named to a new Office of the Chief Executive, positioning the Company
for a seamless management transition as Mr. Knight stepped down as chief
executive. The members of the Office of the Chief Executive, along with
the six most senior operating executives, have a total of 216 years
of experience with Emerson. The Committee noted with appreciation
Mr. Knight's willingness to continue to serve as Chairman, providing
counsel to Mr. Farr and his management team.

LONG-TERM LEADERSHIP: Finally, the Committee recognized the benefit to
the Company and its stockholders of Mr. Knight's leadership over the long
term. In his 27 years as chief executive, Emerson has evolved into one of
the leading technology-based global manufacturing companies. The Committee
attributes this leadership to a number of strategic initiatives undertaken
at his direction, including a consistently increasing investment in
technology and new product development, the continual repositioning of the
Company through acquisitions and divestitures, gaining market share through
operational excellence and international expansion, and, most recently,
increasing the Company's top-line growth rate. During Mr. Knight's tenure,
sales grew more than 16-fold, to over $15 billion in fiscal 2000; net
earnings increased 18-fold, to over $1.4 billion; and total return to
stockholders averaged 15 percent per year.

For fiscal year 2000, Mr. Knight received a base salary of $1,400,000
and was awarded a bonus of $6,000,000, as the Company's performance for
fiscal year 2000 exceeded the targets previously set by the Committee under
the terms of the Annual Incentive Plan approved by stockholders. Mr. Knight
also was awarded 50,000 shares of restricted stock and 100,000 stock
options as part of the normal cycle of stock option awards. Mr. Knight's
employment contract is described in footnote 7 to the Summary Compensation
Table.

Compensation and Human Resources Committee

V. R. Loucks, Jr., Chairman
D. C. Farrell
J. A. Frates
E. E. Whitacre, Jr.

13


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The functions and members of the Compensation and Human Resources
Committee are set forth above under "Board of Directors and Committees."
None of the Committee members has served as an officer or employee of the
Company or a subsidiary of the Company except J. A. Frates, who was Chief
Executive Officer of Ridge Tool Company when it was acquired by the Company
in 1966 and for approximately two years thereafter.


C. F. Knight, a Director and executive officer of the Company, served
as a Director of SBC Communications Inc. during the last fiscal year; and
E. E. Whitacre, Jr., a Director and executive officer of SBC Communications
Inc., served as a Director and member of the Compensation and Human Resources
Committee of the Company. A. E. Suter, an executive officer of the Company,
and a Director of the Company during the 2000 fiscal year, served as a
Director and Chairman of the Executive Compensation and Stock Option
Committee of Furniture Brands International Inc. during the last fiscal year;
and R. B. Loynd, Chairman of the Executive Committee of Furniture Brands
International Inc., served as a Director of the Company.


PERFORMANCE GRAPH

The following graph compares cumulative total returns (assuming
reinvestment of dividends) on the Company's common stock against the
Standard & Poor's Composite 500 Stock Index (S&P 500) and the Dow Jones
Electrical Components and Equipment Index (DJEE) for the five-year period
ended September 30, 2000, and the Compound Annual Growth Rate (CAGR).

[GRAPH]



- -------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 CAGR
---- ---- ---- ---- ---- ---- ----

EMERSON $100 $129 $169 $186 $193 $209 15.9%
S&P 500 100 120 169 184 236 267 21.7
DJEE 100 125 166 141 210 246 19.8
- -------------------------------------------------------------------------


14

II. PROPOSAL TO APPROVE THE AMENDMENT
OF THE RESTATED ARTICLES OF INCORPORATION
TO LIMIT THE LIABILITY OF DIRECTORS

The Board of Directors recommends that the Company's Restated Articles
of Incorporation be amended to add a provision concerning the liability of
Directors authorized by a recent amendment to the Missouri General and
Business Corporations Law. The proposed provision would limit the personal
liability of Directors for monetary damages under the circumstances
permitted by the law.

Since the 1980s, there has been a significant increase in claims, suits
and other proceedings seeking to impose liability on directors of publicly
held corporations. At the outset of this period, there was a decrease in
the availability of directors and officers liability insurance to protect
against such liability as well as reductions in the scope of such insurance
coverage. While this market has since stabilized and improved, in any
event, the cost of such coverage can be high. In recruiting new directors,
there is a concern that qualified persons might be reluctant to serve as
directors because of the liability exposure and the risk of substantial
personal expense incurred in defending lawsuits, most of which are without
merit but which are typically costly to defend. In view of the costs and
uncertainties of litigation in general, it is often deemed prudent to
settle such proceedings in which claims against a director are made.
Settlement amounts, even if immaterial to the corporation involved and
minor compared to the enormous amounts frequently claimed, often easily
exceed the personal assets of most individual director defendants. As a
result, an individual director might rationally conclude that potential
exposure to the costs and risks of proceedings in which he or she may
become involved outweighs any benefit from serving as a director of a
public corporation. This is particularly true for directors who are not
also officers or employees of the corporation concerned.

In recognition of the need to provide adequate protection to
individuals in order to persuade them to serve as directors, in 1986 the
Delaware legislature adopted an amendment to the Delaware corporation laws
allowing stockholders to limit the personal liability of directors of
Delaware corporations under some circumstances. In the subsequent years,
over thirty other states have adopted similar statutes. One published study
has reported that, as of mid-1995, at least 305 of the 434 largest publicly
owned U.S. corporations had adopted liability limiting provisions under
these statutes.

The Missouri legislature in 2000 adopted a similar statute, R.S.Mo.
Section 351.055(9). The new law allows a Missouri corporation, such as the
Company, with stockholder approval, to amend its Articles of Incorporation
to eliminate or limit the personal liability of directors to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. However, under the law no such provision may
eliminate or limit the liability of a director (a) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (b) for
acts or omissions not in subjective good faith or which involve intentional
misconduct or a knowing violation of law, (c) pursuant to provisions of the
law which make directors personally liable for unlawful dividends, or (d)
for any transaction from which the director derived an improper personal
benefit.

Although Emerson believes it has been able to recruit and retain
qualified Directors, the Board believes all appropriate steps should be
taken to protect Directors against personal liability so that qualified
persons will continue to be willing to serve. Also, the Board believes that
Directors can best exercise their business judgment in the interests of the
Company if that judgment does not subject their personal assets to claims
simply because others, with the benefit of hindsight, disagree with the
Directors' business judgment.


Accordingly, the Board is seeking stockholder approval to amend the
Company's Restated Articles of Incorporation to add a new Article 10 that
would eliminate Directors' liability to the fullest extent permitted by
Missouri law. The Company's Directors are already indemnified to the
fullest extent permitted by law pursuant to the Company's Bylaws and
indemnity agreements with each Director (which were each approved by the
stockholders in 1987). By so limiting Director liability, new Article 10
will supplement existing indemnification rights of Directors under the
Company's Bylaws and the indemnity agreements.


Although the Company has been able to obtain directors and officers
liability insurance, the Company's current policies expire periodically.
The Company believes that Article 10 may make it easier in the future to
obtain such insurance, possibly at lower premiums, particularly if the
markets for such insurance coverage should again become more difficult.

15


While, to the knowledge of the Company, the new Missouri law has not
yet been the subject of any judicial interpretation, the Company believes
that new Article 10 will be effective to limit the financial liability of
Directors for certain breaches of their duties as Directors. However,
Article 10 would not change the duties of a Director. Thus, Article 10
would have no effect on the availability of equitable remedies such as
injunction or rescission based upon a Director's breach of his or her
duties. Also, new Article 10 will only affect the monetary liability of
Directors to the Company and its stockholders.

Moreover, liabilities which may arise out of Director conduct occurring
prior to the adoption of new Article 10 would not be affected. In addition,
Article 10 would apply only to claims against Directors arising out of that
person's role as a Director, and would not apply (if such person is also an
officer) to liabilities arising out of that person's role as an officer or
in any other capacity other than as a Director.

New Article 10 is intended to provide the Company's Directors with the
maximum protection afforded by Missouri law. Thus, if future changes in the
law permit further limitation of a director's liability, such changes would
become automatically effective under Article 10.


The Company has not received any notice of any claim or proceeding to
which the new Article 10 might apply. In fact, no such action has ever
been brought against an Emerson Director. In addition, the amendment is
not being proposed in response to any specific resignation, threat of
resignation or refusal to serve by any Director or potential Director.


The Board and management recognize that if the proposed amendment is
adopted, its principal effect would be that the stockholders of the Company
will be giving up potential future rights of action against Directors for
some breaches of duty. It should be noted that the Board has a personal
interest in having the stockholders approve the proposed amendment, to the
potential detriment of the Company and its stockholders. However, given the
potential liabilities which face the directors of publicly held corporations,
the Board believes that the proposed amendment is in the best interests of
the Company and its stockholders since it should protect the Company's
ability to continue to attract and retain qualified Directors and will
reduce the Company's monetary exposure under its indemnification obligations
to Directors.

Accordingly, the following resolution will be offered at the meeting:

RESOLVED, that a new Article 10 be added to the Restated Articles of
Incorporation of the Company, as follows:

"ARTICLE 10

The liability of the Corporation's directors to the Corporation or any
of its shareholders for monetary damages for breach of fiduciary duty as a
director shall be eliminated to the fullest extent permitted under the
Missouri General and Business Corporation Law. Any repeal or modification
of this Article 10 by the shareholders of the Corporation shall not
adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification with respect to acts or
omissions occurring prior to such repeal or modification."

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
---

16


III. STOCKHOLDERS' PROPOSAL ON SEXUAL ORIENTATION

Two organizations have informed the Company that they intend to present
jointly the following proposal at the meeting:

Sexual Orientation Policy

WHEREAS: our Company has pledged its commitment to principles of
non-discrimination, but has not in its company-wide, written equal
employment opportunity policy explicitly barred discrimination based on
sexual orientation;

WHEREAS: employment discrimination and the denial of equal benefits on
the basis of sexual orientation diminishes employee morale and productivity;

WHEREAS: a National Gay and Lesbian Task Force study revealed that
between 18% and 44% of gay men and lesbians in twenty cities nationwide
have experienced some form of workplace harassment or discrimination
related to their sexual orientation;

WHEREAS: San Francisco, Atlanta and New York have adopted and other
jurisdictions are considering adopting legislation restricting business
with companies which do not guarantee equal treatment for lesbian and gay
employees;

WHEREAS: our Company has operations in and makes sales to public
institutions in states and cities, which prohibit discrimination on the
basis of sexual orientation;

WHEREAS: our Company has an interest in preventing discrimination and
resolving complaints internally to avoid costly litigation or damage to our
reputation as an equal opportunity employer;

WHEREAS: hundreds of major corporations have adopted sexual orientation
nondiscrimination policies including General Electric, General Motors,
Ford, Chrysler, Boeing, and Coca-Cola, leaving our Company behind;

WHEREAS: national polls have consistently found more than three-quarters
of Americans support equal rights in the workplace for gay men, lesbians and
bisexuals;

WHEREAS: prominent gay and lesbian political and community leaders have
proposed "The Equality Principles on Sexual Orientation" as guidelines for
corporate policies:

1. Explicit prohibitions against discrimination based on sexual
orientation will be included in the company's written employment
policy statement.

2. Discrimination against HIV-positive employees or those with AIDS
will be strictly prohibited.

3. Employee groups, regardless of sexual orientation, will be given
equal standing with other employee associations.

4. Diversity training will include sexual orientation issues.

5. Spousal benefits will be offered to domestic partners of employees,
regardless of sexual orientation, on an equal basis with those
granted to married employees.

6. Company advertising policy will bar negative sexual orientation
stereotypes and will not discriminate against advertising in
publications on the basis of sexual orientation.

7. The company will not discriminate in the sale of goods or services
on the basis of sexual orientation.

8. Written non-discrimination policies on sexual orientation must be
disseminated throughout the company. A senior company official will
be appointed to monitor compliance corporate wide.

RESOLVED: The Shareholders request the Board of Directors to amend
Emerson Electric's company-wide written equal employment opportunity policy
to bar discrimination on the basis of sexual orientation.

SUPPORTING STATEMENT: Sexual orientation discrimination is a morally
wrong and self-defeating business practice. By adopting and implementing a
clear and equitable policy, our Company will ensure a respectful and

17


supportive atmosphere for all employees and enhance its competitive edge by
joining the growing ranks of major companies guaranteeing equal opportunity
for all employees.

The Company will provide to stockholders the names and addresses of the
proponents and the number of shares of Emerson common stock held by them
promptly upon receiving an oral or written request therefor.

RECOMMENDATION OF THE BOARD OF DIRECTORS:
- -----------------------------------------

THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
-------

The Board believes that implementation of this proposal is unnecessary.
The Company maintains a formal ethics compliance program to monitor and
ensure compliance with all applicable federal, state and local laws
concerning employment policies and practices, including laws that apply to
sexual orientation. It is Emerson's practice to list as forms of harassment
in its Ethics Policy Manual only those which are specifically prohibited by
federal law. To try to name all possible examples would result in a long
list that would only divert attention from the basic need for a fully
compliant workplace.

Further, each of the Company's human resources managers receives
extensive training on acceptable employment policies and practices,
including the Company's policy that employment actions be based on merit.
Each human resources manager is specifically informed that the Company
prohibits discrimination for any reason. The Company's prohibition against
such discrimination is regularly discussed during the periodic conferences
conducted for its human resources staff.

Finally, the Company has received no indication from its employees that
discrimination on the basis of sexual orientation occurs at the Company,
nor has the Company received notice from any of its customers or suppliers
that the Company's employment policies or practices jeopardize its
relationships with those customers and suppliers. The Company is committed
to treating all of its employees consistently, regardless of sexual
orientation. The high standards met by the Company in its operating
practices, including its treatment of its employees, has been recognized by
Industry Week magazine, which recently named the Company among the "World's
100 Best-Managed Companies."

Thus, the Company has already addressed the concerns espoused in the
proposal.

FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST
-------
THIS PROPOSAL.

18


IV. VOTING

Shares may be represented by proxy at the meeting by completing and
returning the proxy card or voting by telephone or by Internet. The
affirmative vote of a majority of the shares entitled to vote which are
present in person or represented by proxy at the 2001 Annual Meeting is
required to elect directors, to approve the stockholder proposal and to act
on any other matters properly brought before the meeting. The affirmative
vote of a majority of the outstanding shares is required to approve the
amendment of the Restated Articles of Incorporation. Shares represented by
proxies which are marked or voted "withhold authority" with respect to the
election of any one or more nominees for election as Directors, proxies
which are marked or voted "abstain" on the stockholder proposal and the
proposal to approve the amendment of the Restated Articles of
Incorporation, and proxies which are marked or voted to deny discretionary
authority on other matters will be counted for the purpose of determining
the number of shares represented by proxy at the meeting. Such proxies will
thus have the same effect as if the shares represented thereby were voted
against such nominee or nominees, against approval of the stockholder
proposal, against approval of the amendment of the Restated Articles of
Incorporation and against such other matters, respectively. If a broker
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.


The Company knows of no other matters to come before the meeting. If
any other matters properly come before the meeting, the proxies solicited
hereby will be voted on such matters in the discretion of the persons
voting such proxies, except proxies which are marked to deny discretionary
authority.

V. INDEPENDENT AUDITORS

KPMG LLP was the auditor for the fiscal year ended September 30, 2000,
and the Board of Directors, upon recommendation of the Audit Committee, has
selected it as auditor for the year ending September 30, 2001. A
representative of KPMG LLP will be present at the meeting with the
opportunity to make a statement and/or respond to appropriate questions
from stockholders.

VI. STOCKHOLDER PROPOSALS

Proposals of stockholders intended to be presented at the 2002 Annual
Meeting scheduled to be held on February 5, 2002, must be received by the
Company by August 1, 2001 for inclusion in the Company's proxy statement
and proxy relating to that meeting. Upon receipt of any such proposal, the
Company will determine whether or not to include such proposal in the proxy
statement and proxy in accordance with regulations governing the
solicitation of proxies.

In order for a stockholder to nominate a candidate for Director, under
the Company's Bylaws timely notice of the nomination must be received by
the Company in advance of the meeting. Ordinarily, such notice must be
received not less than 90 nor more than 120 days before the meeting, i.e.,
between October 8 and November 7, 2001 for the 2002 Annual Meeting (but if
the Company gives less than 100 days' (1) notice of the meeting or (2)
prior public disclosure of the date of the meeting, then such notice must
be received within 10 days after notice of the meeting is mailed or other
public disclosure of the meeting is made). The stockholder filing the
notice of nomination must describe various matters regarding the nominee,
including, but not limited to, such information as name, address,
occupation and shares held.

In order for a stockholder to bring other business before a stockholder
meeting, timely notice must be received by the Company within the time
limits described above. Such notice must include a description of the
proposed business, the reasons therefor, and other specified matters. These
requirements are separate from and in addition to the requirements a
stockholder must meet to have a proposal included in the Company's proxy
statement. The foregoing time limits also apply in determining whether
notice is timely for purposes of rules adopted by the Securities and
Exchange Commission relating to the exercise of discretionary voting
authority.

In each case the notice must be given to the Secretary of the Company,
whose address is 8000 West Florissant Avenue, P.O. Box 4100, St. Louis,
Missouri 63136. Any stockholder desiring a copy of the Company's Bylaws
will be furnished one without charge upon written request to the Secretary.
A copy of the amended Bylaws will be filed as an exhibit to the Company's
Annual Report on Form 10-K for the 2000 fiscal year and will be available
at the Securities and Exchange Commission Internet site (http://www.sec.gov).

19


APPENDIX A

AUDIT COMMITTEE CHARTER

ORGANIZATION

This charter governs the operation of the Audit Committee. The
Committee shall review and reassess the adequacy of this charter at least
annually and obtain the approval of the Board of Directors for any proposed
changes to the charter. The Committee shall be appointed by the Board of
Directors and shall be comprised of at least three Directors, each of whom
has no relationship that may interfere with the exercise of their
independence from management and the Company. All Committee members shall
be financially literate, and at least one member shall have accounting or
related financial management expertise.

STATEMENT OF POLICY

The Audit Committee shall assist the Board in providing oversight
relating to the Company's financial reporting process, its systems of
internal accounting and financial controls, the internal audit process and
the annual independent audit process of the Company's annual financial
statements. In discharging its oversight role, the Committee is empowered
to investigate any matter brought to its attention with full access to all
books, records, facilities, and personnel of the Company.

Management is responsible for implementing adequate internal accounting
controls and for preparing the Company's financial statements. Further,
management and the independent auditors are responsible for planning and
conducting audits and determining that the audited financial statements are
complete, accurate and in accordance with Generally Accepted Accounting
Principles. The Committee, in carrying out its oversight responsibilities,
shall discuss with the independent auditors and management their judgment
of the quality and the acceptability of the Company's financial reporting.

RESPONSIBILITIES AND PROCESS

The following shall be the principal recurring process of the Audit
Committee in carrying out its oversight responsibilities:

Independent Auditors
--------------------

* Annually, the Committee together with the Board shall evaluate and
appoint the Company's independent auditors. The Committee shall have
a clear understanding with management and the independent auditors
that the independent auditors are ultimately accountable to the Board
and the Audit Committee. The Committee shall make recommendations and
the Board shall have the ultimate authority and responsibility to
select, evaluate and, where appropriate, replace the independent
auditors. The Committee shall receive an annual report and such other
reports as the Committee deems appropriate from the independent
auditors regarding the auditors' independence, and discuss with the
auditors such reports and the matters included in the written
disclosures required by the Independence Standards Board Standard
No. 1. If necessary, the Committee shall recommend to the Board
appropriate action to be taken with respect to the independence of
the auditors.

Internal Controls and Audit Process
-----------------------------------

The audit function is designed to provide a check that a system of
internal controls is maintained throughout the Company which protects the
assets of the Company and provides the proper authorization and recording
of transactions such that the financial information is reliable and
materially accurate; and financial statements fairly present, in all
material respects, the financial condition and results of operations of the
Company in accordance with U. S. generally accepted accounting principles.

* The Committee shall discuss with the internal auditors and the
independent auditors the overall scope and plans for their respective
audits. Also, the Committee shall discuss with management, the
internal auditors and the independent auditors the adequacy and
effectiveness of the Company's accounting and financial controls.

A-1


Further, the Committee shall meet separately with internal auditors
and the independent auditors, with and without management present,
to discuss the results of their examinations.

Annual Audit
------------

* The Committee will discuss with the independent auditors the results
of the annual audit and any other matters required to be communicated
to the Committee by the independent auditors under Statement of
Auditing Standards 61.

Financial Reporting
-------------------

* The Committee shall review with management and the independent
auditors the financial statements to be included in the Company's
Annual Report on Form 10-K. Based on these reviews, the Committee
shall annually report to the Board whether the Committee recommends
inclusion of the financial statements in the Company's Annual Report
and Form 10-K.

Proxy Report
------------

* The Committee shall prepare the report required by the rules of the
Securities and Exchange Commission to be included in the Company's
annual proxy statement.

A-2




[LOGO]
EMERSON


THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned does hereby appoint C. F. KNIGHT, W. W. WITHERS, and
H. M. SMITH, or any of them, the true and lawful attorneys in fact, agents
and proxies of the undersigned to represent the undersigned at the Annual
Meeting of the Stockholders of EMERSON ELECTRIC CO., to be held on February
6, 2001, commencing at 10:00 A.M., St. Louis Time, at the headquarters of
the Company at 8000 West Florissant Avenue, St. Louis, Missouri, and at
any and all adjournments of said meeting, and to vote all the shares of
Common Stock of the Company standing on the books of the Company in the
name of the undersigned as specified and in their discretion on such other
business as may properly come before the meeting.


(Continued, and to be signed, on the other side)



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FOLD AND DETACH HERE


[LOGO]
EMERSON

ADMISSION TICKET


ANNUAL MEETING OF STOCKHOLDERS

Tuesday, February 6, 2001
10:00 A.M.
Emerson Electric Co. Headquarters
8000 W. Florissant Avenue
St. Louis, MO 63136


======================================

PLEASE PRESENT THIS TICKET
AT THE REGISTRATION DESK
UPON ARRIVAL
NON-TRANSFERABLE
======================================



THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION Please mark
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 your vote as
AND AGAINST PROPOSAL 3. indicated in
this example /X/


MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:
---
1. ELECTION OF DIRECTORS

FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed to the right
/ / / /

(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name on the list below.)

01 J.G. Berges 02 D.N. Farr 03 R.L. Ridgway
04 W.M. Van Cleve 05 E.E. Whitacre, Jr.


MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:
---
2. PROPOSAL TO APPROVE THE AMENDMENT OF THE RESTATED ARTICLES
OF INCORPORATION TO LIMIT THE LIABILITY OF DIRECTORS

FOR AGAINST ABSTAIN
/ / / / / /


MANAGEMENT RECOMMENDS A VOTE AGAINST THE FOLLOWING:
-------
3. STOCKHOLDERS' PROPOSAL ON SEXUAL ORIENTATION

FOR AGAINST ABSTAIN
/ / / / / /



I PLAN TO ATTEND THE ANNUAL MEETING / /


The undersigned hereby acknowledges receipt of Notice of said Annual
Meeting and accompanying Proxy Statement, each dated December 4, 2000.

SIGNATURE SIGNATURE DATE
------------------- ------------------- -------
(IF STOCK IS OWNED IN JOINT NAMES ALL OWNERS MUST SIGN)

- ------------------------------------------------------------------------
FOLD AND DETACH HERE

-------------------------------------
YOU CAN VOTE IN ONE OF THREE WAYS:
-------------------------------------

1. Call toll-free 1-800-840-1208 on a touch tone telephone 24 hours a
day-7 days a week.

There is NO CHARGE to you for this call.

OR
--
2. Vote by Internet at our Internet Address: http://www.eproxy.com/emr.

OR
--
3. Mark, sign and date your proxy card and return promptly in the
enclosed envelope.

- -------------------------------------------------------------------------------
IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET, PLEASE FOLLOW THESE DIRECTIONS:

READ THE ACCOMPANYING PROXY STATEMENT.

HAVE YOUR PROXY CARD IN HAND.

You will be asked to enter your 11-digit Control Number, which is
located in the box in the lower right hand corner of this form.

YOU DO NOT NEED TO RETURN A PROXY CARD IF YOU ARE VOTING BY
TELEPHONE OR INTERNET.
- -------------------------------------------------------------------------------
THANK YOU FOR VOTING
PLEASE ADMIT:
==========================

CONTROL NUMBER

==========================