Emerson Electric Co.Exhibit 10.4 to Form 8K






Exhibit 10.4





	Notice of Grant of Stock Options

 and Option Agreement 	Emerson Electric Co.

ID: xx-xxxxxxx

8000 W. Florissant Avenue

P. O. Box 4100

St. Louis, MO  63136-8506 





	NAME
ADDRESS
ADDRESS 	Option Number:
Plan:
ID:	xxxxxx
2001
xxx-xx-xxxx 









Effective xx/xx/xxxx, you have been granted a(n) Non-Qualified Stock Option to buy ____ shares of
Emerson Electric Co. (the Company) stock at $______.__ per share.


The total option price of the shares granted is $_______.__


Shares in each period will become fully vested on the date shown.


	  	Shares 	  	Vest Type 	  	Full Vest 	  	Expiration 	  


	 	
 		
 		
 		
 	




	  	xxx 	  	On Vest Date 	  	xx/xx/xxxx 	  	xx/xx/xxxx 	  
	  	xxx 	  	On Vest Date 	  	xx/xx/xxxx 	  	xx/xx/xxxx 	  
	  	xxx 	  	On Vest Date 	  	xx/xx/xxxx 	  	xx/xx/xxxx 	  















By your signature and the
Company’s signature below, you and the Company agree that these options are granted under and governed by the terms
and conditions of the Company's Stock Option Plan as amended and the Option Agreement, all
of which are attached and made a part of this document. 








	
 	 	
 
	Emerson Electric Co. 	 	Date 




	
 	 	
 
	Name	 	Date 




	 	Date: x/xx/xxxx
Time: 











NONQUALIFIED STOCK
OPTION AGREEMENT
UNDER 
EMERSON ELECTRIC CO.
2001 STOCK OPTION PLAN 



            WITNESSETH
THAT:



            WHEREAS,
the Board of Directors of the Company (“Board of Directors”) has adopted the
Emerson Electric Co. 2001 Stock Option Plan (the “Plan”) pursuant to which
options covering an aggregate of ten million (10,000,000) shares of the Common Stock of
the Company may be granted to key employees of the Company and its subsidiaries; and 



            WHEREAS,
the person to whom this option is granted (“Optionee”) is a key employee of the
Company or a subsidiary; and 



            WHEREAS,
the Company desires to grant to Optionee the option to purchase certain shares of its
stock under the terms of the Plan, which option is not intended to qualify as an incentive
stock option within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (hereinafter referred to as an “Incentive Stock Option”); and 



            WHEREAS,
Optionee agrees and acknowledges that the grant of said option is valuable consideration;
and 



            WHEREAS,
Optionee has executed the attached Notice of Grant of Stock Options and Option Agreement
(the “Notice Agreement”) verifying Optionee’s agreement to and acceptance
of all of the terms and conditions set forth herein; 



            NOW,
THEREFORE, in consideration of the premises, and of the mutual agreements hereinafter set
forth, it is covenanted and agreed as follows: 



                 1.       
          Grant Subject to Plan. This option is granted under and is expressly
          subject to, all the terms and provisions of the Plan, which terms are
          incorporated herein by reference. The Compensation and Human Resources Committee
          (“Committee”) of the Board of Directors has been appointed by the
          Board of Directors, and designated by it, as the Committee to make grants of
          options. 



                 2.       
          Grant and Terms of Option. Pursuant to action of the Committee, the
          Company hereby grants to Optionee the option to purchase all or any part of the
          number of shares of the Common Stock of the Company, par value of $.50 per share
          (“Common Stock”) set forth in the Notice Agreement for a period of ten
          (10) years from the date hereof, at the purchase price designated in the Notice
          Agreement; provided, however, the right to exercise such option shall be, and is
          hereby, restricted so that the shares to which this option relates may not be
          purchased prior to the Vesting Date assigned to each of the shares as set forth
          in the Notice Agreement. The foregoing right to exercise is subject to the
          provisions of Section 6 hereof. Notwithstanding the 






     foregoing, in the event of a
          Change of Control (as hereinafter defined) Optionee may purchase 100% of the
          total number of shares to which this option relates. In no event may this option
          or any part thereof be exercised after the expiration of ten (10) years from the
          date hereof. The purchase price of the shares subject to the option may be paid
          for (a) in cash, (b) in the discretion of the Committee, by tender,
          either actually or by attestation, to the Company of shares of Common Stock
          already owned by Optionee and registered in his name or held for his benefit by
          a registered holder, having a fair market value equal to the cash exercise price
          of the option being exercised, or (c) in the discretion of the Committee,
          by a combination of methods of payment specified in clauses (a) and (b), all in
          accordance with Paragraph 7 of the Plan. No shares of Common Stock may be
          tendered in exercise of this option if such shares were acquired by Optionee
          through the exercise of an Incentive Stock Option or an employee stock purchase
          plan described in Section 423 of the Internal Revenue Code of 1986, as amended,
          unless (a) such shares have been held by Optionee for at least one (1)
          year, and (b) at least two (2) years have elapsed since such Incentive
          Stock Option was granted. For the purposes of this Agreement, a Change of
          Control means: 



          		                (i)       
               The purchase or other acquisition (other than from the Company) by any person,
               entity or group of persons, within the meaning of Section 13(d) or 14(d) of the
               Securities Exchange Act of 1934, as amended (the “1934 Act”)
               (excluding, for this purpose, the Company or its subsidiaries or any employee
               benefit plan of the Company or its subsidiaries), of beneficial ownership
               (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 20% or
               more of either the then-outstanding shares of Common Stock or the combined
               voting power of the Company’s then-outstanding voting securities entitled
               to vote generally in the election of directors; or 



               



          		                (ii)       
               Individuals who, as of the date hereof, constitute the Board of Directors of the
               Company (the “Board” and, as of the date hereof, the “Incumbent
               Board”) cease for any reason to constitute at least a majority of the
               Board, provided that any person who becomes a director subsequent to the date
               hereof whose election, or nomination for election by the Company’s
               shareholders, was approved by a vote of at least a majority of the directors
               then comprising the Incumbent Board (other than an individual whose initial
               assumption of office is in connection with an actual or threatened election
               contest relating to the election of directors of the Company, as such terms are
               used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act)
               shall be, for purposes of this section, considered as though such person were a
               member of the Incumbent Board; or 



               



          		                (iii)       
               Approval by the stockholders of the Company of a reorganization, merger or
               consolidation, in each case with respect to which persons who were the
               stockholders of the Company immediately prior to such reorganization, merger or
               consolidation would not, immediately thereafter, own more than 50% of,
               respectively, the common stock and the combined voting power entitled to vote
               generally in the election of directors of the reorganized, merged or
               consolidated corporation’s then-outstanding voting securities, or of a
               liquidation or dissolution of the Company or of the sale of all or substantially
               all of the assets of the Company. 



               




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                 3.       
          Anti-Dilution Provisions. In the event that, during the term of this
          Agreement, there is any change in the number of shares of outstanding Common
          Stock by reason of stock dividends, recapitalizations, mergers, consolidations,
          split-offs, split-ups, combinations or exchanges of shares and the like, the
          number of shares covered by this option agreement and the price thereof shall be
          adjusted, to the same proportionate number of shares and price as in this
          original agreement. 



                 4.       
          Investment Purpose. If the shares subject to the Plan are not registered
          under the Securities Act of 1933, Optionee acknowledges that a restrictive
          legend, in substantially the following form, will be printed on the certificates
          representing the shares acquired by Optionee on exercise of all or any part of
          this option: 



	  	
“The
shares represented by this certificate have not been registered under the Securities Act
of 1933, but have been issued or transferred to the registered owner pursuant to the
exemption afforded by Section 4(2) of said Act. No transfer or assignment of these shares
by the registered owner shall be valid or effective, and the issuer of these shares shall
not be required to give any effect to any transfer or attempted transfer of these shares,
including without limitation, a transfer by operation of law, unless (a) the issuer shall
have received an opinion of its counsel that the shares may be transferred without
requirement of registration under said Act, or (b) there shall have been delivered to the
issuer a ‘no-action’ letter from the staff of the Securities and Exchange
Commission, or (c) the shares are registered under said Act.” 






                 5.       
          Non-Transferability. Neither the option hereby granted nor any rights
          thereunder or under this Agreement may be assigned, transferred or in any manner
          encumbered except by will or the laws of descent and distribution, and any
          attempted assignment, transfer, mortgage, pledge or encumbrance except as herein
          authorized, shall be void and of no effect. The option may be exercised during
          Optionee’s lifetime only by Optionee. 



                 6.       
          Termination of Employment. In the event that notice of employment
          termination is provided by Optionee, which notice shall be deemed termination of
          employment of Optionee, or in the event of the termination of employment of
          Optionee for any reason, other than by death which is subject to Section 7
          herein, the Plan shall govern whether and the extent to which the option granted
          may be exercised. For purposes of this Section, a divestiture by the Company of
          100% of its interest in Optionee’s employer shall constitute a termination
          of employment of Optionee. 



                 7.       
          Death of Optionee. In the event of the death of Optionee while Optionee
          is employed by the Company (or a subsidiary, affiliate or joint venture) or
          after termination of employment to the extent an option is still exercisable
          under Section 6 of this Agreement, the option theretofore granted may be
          exercised, to the extent exercisable at the date of death, by a legatee or
          legatees under the option holder’s last will, or by personal
          representatives or distributees, at any time within a period of one (1) year
          after death, but not after ten (10) years from the date of granting thereof. 





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                 8.       
          Shares Issued on Exercise of Option. It is the intention of the Company
          that on any exercise of this option it will transfer to Optionee shares of its
          authorized but unissued stock or transfer Treasury shares, or utilize any
          combination of Treasury shares and authorized but unissued shares, to satisfy
          its obligations to deliver shares on any exercise hereof. 



                 9.       
          Committee Administration. This option has been granted pursuant to a
          determination made by the Committee, and such Committee or any successor or
          substitute committee authorized by the Board of Directors or the Board of
          Directors itself, subject to the express terms of this option, shall have
          plenary authority to interpret any provision of this option and to make any
          determinations necessary or advisable for the administration of this option and
          the exercise of the rights herein granted, and may waive or amend any provisions
          hereof in any manner not adversely affecting the rights granted to Optionee by
          the express terms hereof. 



                 10.       
          Option Not An Incentive Stock Option. The option granted hereunder is not
          intended to be, and will not be treated as, an Incentive Stock Option. 



                 11.       
          No Contract of Employment. Nothing contained in this Agreement shall be
          considered or construed as creating a contract of employment for any specified
          period of time. The employment relationship shall continue to be at the will of
          both parties, either of which may terminate the employment relationship at any
          time for any reason. 



                 12.       
          Restrictions. 



                    
         (a)       
          During Optionee’s employment with the Company and thereafter, Optionee
          shall keep confidential, and not use or disclose to any third-parties, except as
          required for Optionee to perform Optionee’s employment responsibilities,
          any confidential, proprietary and/or trade secret information of or relating to
          the Company (“Confidential Information”). All Company records,
          documents and information obtained by or provided to Optionee, or to which
          Optionee has or had access, or otherwise made, produced or compiled by Optionee
          during Optionee’s employment with the Company, which contain any
          Confidential Information, regardless of the medium in which it is preserved, are
          the sole and exclusive property of the Company and shall be given to the Company
          at the Company’s request or upon Optionee’s departure from the
          Company. 



                    
         (b)       
          All ideas, inventions, discoveries, patents, patent applications,
          continuation-in-part patent applications, divisional patent applications,
          technology, copyrights, derivative works, trademarks, service marks,
          improvements, developments, trade secrets, other intellectual property and the
          like, which are developed, conceived, created, discovered, learned, produced
          and/or otherwise generated by Optionee, whether individually or otherwise,
          during Optionee’s employment with the Company, whether or not during
          working hours, that relate to (i) the business and/or activities of the Company
          or which may be of interest to the Company in its business, (ii) the
          Company’s anticipated research or development, or (iii) any work
          performed 



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     by Optionee for the Company, shall be the sole and exclusive property
          of the Company, and the Company shall own any and all right, title and interest
          to such. Optionee assigns and agrees to assign any and all of the foregoing to
          the Company, whenever requested to do so by the Company, at the Company’s
          expense, and Option agrees to execute any and all applications, assignments or
          other instruments which the Company deems desirable or necessary to protect such
          interests. Optionee shall prepare, keep and maintain detailed and current dated
          and witnessed records of all of Optionee’s inventions, and shall disclose
          the details of such inventions to the Company. 



                    
         (c)       
          During the term of this option, and for a period ending twelve (12) months after
          exercise of this option: (i) if Optionee breaches Optionee’s obligations
          under Section 12(a) or (b), or (ii) if Optionee, as an individual or as a
          partner, employee, agent, advisor, consultant or in any other capacity of or to
          any person, firm, corporation or other entity, directly or indirectly, carries
          on any business, or becomes involved in any business activity, competitive with
          the business of the Company or any of its divisions, subsidiaries or affiliates
          in which Optionee was employed, or hires or solicits to hire any employee of the
          Company or any of its divisions, subsidiaries or affiliates, then the option
          hereby granted shall be void and of no force or effect, and if the option hereby
          granted or any part thereof has been exercised within the preceding twelve (12)
          months, Optionee shall owe the Company the excess of the fair market value of
          the shares subject to the option (or part thereof which has been exercised) as
          of the date of such exercise, over the option price, and Optionee shall pay such
          amount to the Company at the time Optionee commits any of the aforementioned
          acts. 



                    
         (d)       
          Optionee agrees that the restrictions in this Section 12 are reasonable and
          should be fully enforceable in light of (among other things) Optionee’s
          duties and responsibilities with the Company. 



                 13.       
          Severability. Any word, phrase, clause, sentence or other provision
          hereof which violates or is prohibited by any applicable law, court decree or
          public policy shall be modified as necessary to avoid the violation or
          prohibition and so as to make this Agreement enforceable as fully as possible
          under applicable law, and if such cannot be so modified the same shall be
          ineffective to the extent of such violation or prohibition without invalidating
          or affecting the remaining provisions hereof. 



                 14.       
          Governing Law. This agreement is made in and shall be construed and
          administered in accordance with the laws of the State of Missouri, without
          regard to conflicts of law principles which might otherwise be applied. Any
          litigation arising out of, in connection with or concerning any aspect of this
          agreement shall be conducted exclusively in the State or Federal Courts in the
          State of Missouri, and Optionee hereby consents to the jurisdiction of said
          courts. 







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