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Filed Pursuant to Rule 424(b)(5)
Registration No. 333-84673
(Pursuant to Rule 429, also
Registration No. 333-66865)
PRICING SUPPLEMENT NO. 1 DATED OCTOBER 21, 1999
(TO PROSPECTUS AND PROSPECTUS SUPPLEMENT
DATED SEPTEMBER 23, 1999)
[EMERSON LOGO]
EMERSON ELECTRIC CO.
MEDIUM - TERM NOTES
Designation: Floating Rate Notes Due October 26, 2039
CUSIP No.: 29101L AV2
Principal Amount (in Specified
Currency): US$64,662,000
Price to Public (Issue Price): 100.00%
Agent's Commission: 1.00%
Net Proceeds to Emerson: US$64,015,380
Trade Date: October 21, 1999
Settlement Date (Original Issue Date): October 26, 1999
Maturity Date: October 26, 2039
Base Rate: Commercial Paper Rate
Index Maturity: One month
Spread: Minus 25 basis points (.25%)
Initial Interest Rate: 5.04402%
Interest Reset Dates: The 26th day of each month, commencing November 26, 1999.
Interest Determination Dates: Two (2) Business Days prior to each Interest Reset Date.
Interest Payment Dates: Quarterly on the 26th of January, April, July and October of
each year, commencing January 26, 2000.
Conditional Right to Shorten Maturity Upon the occurrence of a Tax Event, we will have the right to shorten
the maturity of the Notes without the consent of the Holders of the
Notes, as we discuss in detail in this Pricing Supplement.
Repayment at Option of Holder: The Notes will be repayable at your option, in accordance with the
procedures described in the Prospectus Supplement, on the following
days and at the following prices:
Repayment Date Price
October 26, 2009.................................... 99.00%
October 26, 2012.................................... 99.25%
October 26, 2015.................................... 99.50%
October 26, 2018.................................... 99.75%
October 26, 2021 and on each third
anniversary thereafter to October 26, 2039.......100.00%
Agent: PaineWebber Incorporated
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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ADDITIONAL TERMS OF THE NOTES
DAY COUNT CONVENTION
Interest on the Notes will be computed and paid on the basis of the
actual number of days in each accrual period based on a 360-day year. Interest
on the Notes will be equal to the sum of interest amounts for each accrual
period within each interest period. The "accrual period" means the period
beginning on and including the date of issuance of the Notes and ending on and
excluding November 26, 1999, and thereafter each successive one-month period
beginning on and including the 26th of each month and ending on and including
the day preceding the 26th of the next month, whether or not that day is a
Business Day. The "interest period" means each period beginning on the date of
issuance of the Notes or an interest payment date and ending on and including
the day preceding the next succeeding interest payment date. Interest during
each accrual period will accrue at the Commercial Paper Rate, minus the Spread,
for such accrual period on the outstanding principal amount of the Notes and on
the sum of the amounts of interest for each of the previous accrual periods
within the same interest period. Interest on each Note for an accrual period
will be calculated in accordance with the following formula:
Interest for Accrual Period = APA x (CPR - Spread) x T/360
where,
- "APA" refers to the adjusted principal amount, which means (i) in
respect of the first accrual period in an interest period, the
outstanding principal amount of a Note and (ii) in respect of each
succeeding accrual period in the interest period, an amount equal
to the sum of (x) the outstanding principal amount of such Note
and (y) the sum of the amounts of interest for each of the
previous accrual periods in such interest period;
- "CPR" refers to the Money Market Yield of the applicable
Commercial Paper Rate for such accrual period; and
- "T" refers to the actual number of days with respect to such
accrual period.
The interest rate on the Notes will in no event be higher than the maximum rate
permitted by New York law as the same may be modified by United States law of
general application.
CONDITIONAL RIGHT TO SHORTEN MATURITY
We intend to deduct interest we pay on the Notes for United States
federal income tax purposes. However, there have been proposed federal tax law
changes over the past few years that, among other things, would have prohibited
an issuer from deducting interest payments on debt instruments with a maturity
of more than 40 years. While none of these proposals has become law, we can give
no assurance that similar legislation affecting our ability to deduct interest
paid on the Notes will not be enacted in the future or that any such legislation
would not have a retroactive effective date. As a result, we cannot assure you
that a Tax Event (as defined below) will not occur.
Upon the occurrence of a Tax Event, we will have the right to shorten
the maturity of the Notes without the consent of the Holders of the Notes. We
may shorten the maturity to the minimum extent required, in the opinion of
nationally recognized tax counsel, to allow us to deduct interest we pay on the
Notes for United States federal income tax purposes. If we cannot obtain an
opinion as to such a minimum period, the minimum extent so required to maintain
our interest deduction (to the extent interest is deductible under current law)
will be determined in good faith by the Finance Committee of the Board of
Directors of Emerson, after receipt of an opinion of such counsel regarding the
applicable legal standards. If we exercise our right to shorten the maturity of
the Notes, the amount payable on the new maturity date will be equal to 100% of
the principal amount of the Notes plus interest accrued on the Notes to the new
maturity date. We can give no assurance whether or not we would exercise our
right to shorten the maturity of the Notes upon the occurrence of a Tax Event or
as to the period by which we would shorten the maturity of the Notes. If we
elect to exercise our right to shorten the maturity of the Notes upon the
occurrence of a
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Tax Event, we will mail a notice to each Holder of Notes by first-class mail not
more than 60 days after the occurrence of the Tax Event, stating the new
maturity date of the Notes. This notice shall be effective immediately upon
mailing.
"Tax Event" means that we shall have received an opinion of nationally
recognized tax counsel to the effect that as a result of
- any amendment to, clarification of, or change (including any
announced prospective amendment, clarification or change) in any law, or any
regulation thereunder, of the United States,
- any judicial decision, official administrative pronouncement,
ruling, regulatory procedure, regulation, notice or announcement, including any
notice or announcement of intent to adopt or promulgate any ruling, regulatory
procedure or regulation, or
- any amendment to, clarification of, or change in any official
position with respect to, or any interpretation of, an administrative or
judicial action described above or a law or regulation of the United States that
differs from the then generally accepted position or interpretation,
that occurs on or after October 21, 1999, there is more than an insubstantial
increase in the risk that any portion of the interest we pay on the Notes is
not, or will not be, fully deductible by us for United States federal income tax
purposes.
NOTES USED AS QUALIFIED REPLACEMENT PROPERTY
Prospective investors seeking to treat the Notes as "qualified
replacement property" for purposes of Section 1042 of the Internal Revenue Code
of 1986, as amended, should be aware that Section 1042 requires us to meet
certain requirements in order for the Notes to constitute qualified replacement
property. In general, qualified replacement property is a security issued by a
domestic operating corporation that did not, for the taxable year preceding the
taxable year in which such security was purchased, have "passive investment
income" in excess of 25 percent of the gross receipts of such corporation for
such preceding taxable year. For purposes of this "Passive Income Test," where
the issuing corporation is in control of one or more corporations, all such
corporations are treated as one corporation, or an "Affiliated Group," for the
purposes of computing the amount of passive investment income under Section
1042.
We believe that less than 25 percent of our Affiliated Group's gross
receipts was passive investment income for the nine months ended June 30, 1999.
In making this determination, we have made certain assumptions and used
procedures which we believe are reasonable. We can give no assurance as to
whether we will continue to meet the Passive Income Test. It is, in addition,
possible that the Internal Revenue Service may disagree with the manner in which
we have calculated our Affiliated Group's gross receipts or passive investment
income and the conclusions we describe here. Prospective purchasers of the Notes
should consult with their own tax advisors with respect to the application of
Section 1042 to their particular circumstances and other tax matters relating to
the Notes.
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