Exhibit 10(a)
Knight Amended and Restated Employment Agreement
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT by and between EMERSON ELECTRIC CO., a Missouri
corporation ("Emerson"), and CHARLES F. KNIGHT ("Employee") was first made as
of the 1st day of October, 1975, was amended January 9, 1987 as of the 1st day
of October 1986, and October 22, 1997 as of the 1st day of October, 1997, and
is hereby amended and restated this 11th day of December, 2000 as of the 6th
day of November, 2000.
WITNESSETH THAT:
WHEREAS, Employee presently is Chairman of the Board and Chief
Executive Officer of Emerson and possesses executive skills and experience
which Emerson believes are of substantial value and important to the success of
Emerson's business operations; and
WHEREAS, Emerson and Employee desire to provide for the terms
and conditions upon which Employee will continue in the employ and service of
Emerson,
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements herein set forth, the parties hereto agree as follows:
1. Employment and Duties. Emerson hereby employs Employee, and
Employee agrees to continue in the employ of Emerson, for the term herein
specified (the "Employment Term"). During the Employment Term Employee shall
serve Emerson in a senior executive capacity, shall perform such duties as may
be assigned to him by the Board of Directors of Emerson and shall devote his
full time, attention and effort to the business and affairs of Emerson.
2. Term. Subject to Section 4 below, the Employment Term shall
be initially a six (6) year period commencing October 1, 1975 and ending
September 30, 1981, provided, however, that on September 30, 1976 and on each
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September 30 thereafter the Employment Term shall be extended automatically one
(1) additional year, unless prior to September 30 of any year Emerson shall
give notice to Employee in writing that the Board of Directors of Emerson has
elected not to have the Employment Term extended for any further period. If
such notice is given, the Employment Term shall then be limited to the balance
of the year in which such notice is given plus the next succeeding five years.
The word "year" as used herein shall mean the twelve month
period commencing October 1 and ending the next succeeding September 30.
3. Compensation. In consideration of his services, Employee
shall receive during the Employment Term a base salary at the rate of not less
than Nine Hundred Thousand Dollars ($900,000) per year, payable in
substantially equal installments in accordance with Emerson's usual paying
practices, but not less frequently than monthly, and shall be eligible for
annual bonus payments under Emerson's annual executive extra salary plan as
determined annually by the Compensation and Human Resources Committee of the
Board of Directors of Emerson, consistent with the scope of Employee's
responsibilities and performance for such year. In addition, Employee shall
participate in Emerson's group insurance, hospitalization, pension and other
benefit plans and programs applicable generally to employees of Emerson, and in
any fringe benefit programs presently existing or hereafter adopted for the
benefit of executive employees of Emerson. In the event that any of such
programs require future action by the Board of Directors of Emerson or a
Committee of such Board, as in the case of future stock option grants, Employee
shall be a candidate for participation in such programs on the basis applicable
to other executive employees of Emerson. Emerson may from time to time also
consider the award of other forms of compensation to Employee. At the time any
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such award is proposed to be made, Employee shall have the right to elect to
defer all or part thereof (a) until the following January 2nd, (b) to some
other date certain, (c) for a stated number of years or (d) until his
termination of employment, on such terms and conditions as shall be agreed at
the time of such election.
4. Effect of Termination of Employment. The Employment Term
and, except as provided in Section 5, Employee's right to compensation
(including benefits) as provided for herein shall terminate only (a) upon the
expiration of the Employment Term pursuant to Section 2, (b) if Employee shall
die during the Employment Term, (c) if Employee shall voluntarily Retire (as
defined below), (d) if Employee shall voluntarily terminate his employment
hereunder other than in a Retirement, or (e) if Employee's employment is
terminated for cause during the Employment Term.
No termination of Employee's employment shall be deemed to
have been a termination for cause unless such termination is for or on account
of (i) a willful failure or refusal of Employee to perform his employment
duties and obligations hereunder; (ii) any fraud, embezzlement or other
dishonesty of Employee adversely affecting Emerson or any of its subsidiaries,
or (iii) the conviction of Employee of a felony committed otherwise than in the
performance by him of services on behalf of Emerson.
Employee's right to compensation shall not be limited or
affected by any illness or disability of Employee, or on account of any
accident or other event which either temporarily or permanently, or wholly or
partially, shall prevent Employee from performing his employment duties
hereunder.
For purposes of this agreement, Employee shall be deemed to
"Retire" upon the later to occur of (i) his ceasing (with the consent or as a
result of the action of the Board of Directors, other than by reason of
termination for cause) to be Chief Executive Officer of Emerson and (ii) his
ceasing to be Chairman of the Board of Emerson. Employee's Retirement shall be
deemed voluntary if he consents in writing to both (i) and (ii) above.
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Employee's involuntary Retirement, including by reason of his resignation
following the occurrence of either of (i) or (ii) above without his written
consent, shall not constitute a willful failure of Employee to perform his
employment duties hereunder and in such event the compensation of Employee
(including benefits) shall continue for the balance of the Employment Term on
the same basis as then in effect.
Upon Employee's Retirement he shall be entitled to immediate
commencement of retirement benefits under the Emerson Supplemental Executive
Retirement Plan and upon Employee's Retirement or death during the Employment
Term any and all awards, participation and coverages held by or with respect to
Emerson (including without limitation any options or other stock-based
compensation as well as coverage under Emerson's split dollar insurance
program, but not including welfare programs (other than medical and dental) of
general application only to active employees of Emerson) shall become non-
forfeitable, and shall be payable or settlement in accordance with their terms
as if Employee's employment with Emerson had not terminated (or, if earlier,
upon Employee's (or his estate's or beneficiaries') recognition of taxable
income in connection therewith), except to the extent Employee shall direct, or
reserved the right to direct, that any payment not be made.
5. Consulting. Employee agrees that commencing upon Retirement
he will provide consulting services and advice to Emerson when and as requested
by the Chief Executive Officer or by the Board of Directors of Emerson until
the first to occur of notice to Employee by the Board of Directors given after
the fifteenth anniversary of Employee's normal retirement date from the Board
of Directors (age 72) that such services are no longer needed, Employee's death
or Employee's notice to the Board of Directors of the termination of this
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consulting agreement (the "Consulting Term"). In no event shall such services
and advice exceed 30 days per year. In consideration of such services, Emerson
shall pay employee a daily consulting fee, for the days he renders such
services, equal to his daily salary rate at the time of his Retirement, and
shall provide Employee continued access during the Consulting Term to Emerson's
facilities and services comparable to those provided to him prior to his
Retirement, including club memberships, financial planning and access to
Emerson's aircraft, car and driver, on the same basis as such facilities and
services were provided to Employee prior to his Retirement. Emerson shall also
reimburse Employee, upon the receipt of appropriate documentation, for
reasonable expenses which he incurs in providing such consulting services at
the request of the Chief Executive Officer or the Board of Directors of
Emerson. During the Consulting Term Employee shall be an independent
contractor.
6. Non-Disclosure and Non-Compete Agreements. Employee agrees
that he will not disclose to any other firm or person any of Emerson's or
Emerson's subsidiaries' trade secrets or any confidential information relating
to its or their business. Employee further agrees that, upon the expiration of
the Employment Term (but excepting any period following a termination by
Emerson with cause), he will not enter the employ of, or have any material
interest in, directly or indirectly, any business in this country in
competition with Emerson or any of its subsidiaries, for a period of two (2)
years from the date of such expiration or, if longer, at any time during the
Consulting Term.
7. Miscellaneous. Neither this Agreement nor any rights
hereunder shall be assignable by either party hereto.
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This Agreement supersedes and replaces that certain Employment
Contract between the parties hereto dated January 1, 1973.
This Agreement shall be construed and interpreted under the
laws of Missouri. If any payments or benefits provided by Emerson to Employee
are subject to golden parachute excise tax, then Emerson shall make Employee
whole for such excise taxes on an after-tax basis. In addition, in the event of
a dispute between Emerson and Employee regarding the terms of this Agreement,
Emerson shall advance all legal fees and expenses reasonably incurred by
Employee in connection with such dispute, subject to reimbursement by Employee
if Employee's position in such dispute is determined by a court of competent
jurisdiction to have been frivolous.
IN WITNESS WHEREOF, the parties have executed this Agreement,
as amended, this 11th day of December, 2000.
EMERSON ELECTRIC CO.
/s/ V. R. Loucks, Jr.
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"Emerson"
Chairman, Compensation and Human Resources
Committee
/s/ C. F. Knight
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"Employee"
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