What is the new compensation structure for Emerson's non-management directors?

For fiscal year 2006, non-management directors will receive an annual cash retainer of $50,000, an Emerson Restricted Stock Award valued at $90,000, and additional retainers for committee chair roles ($12,000 for Audit Committee Chairman, $8,000 for other Committee Chairmen). They will also receive attendance fees of $1,500 per Board meeting and $1,250 per Committee meeting.

What are the key changes to Emerson's Bylaws?

The Bylaws have been amended to reflect that the Chairman of the Board and CEO roles are held by one person. They also introduce the possibility of uncertificated stock shares, clarify indemnification provisions for directors and officers (including advancement of defense expenses), and remove obsolete or redundant clauses.

When do these changes to director compensation and Bylaws take effect?

The director compensation changes are effective for the fiscal year 2006, which began on October 1, 2005. The Bylaw amendments were adopted on October 4, 2005, and are effective immediately.

How does the change to uncertificated shares impact shareholders?

The ability to have uncertificated shares means that shareholders may not receive physical stock certificates. Instead, their ownership will be recorded electronically, though they are still entitled to a statement of holdings or can request a physical certificate if they prefer.

EMR 8-K: Material Agreements & Corporate Changes

Summary

Emerson Electric Co. (EMR) filed an 8-K on October 11, 2005, detailing key changes related to its corporate governance and director compensation, effective for the fiscal year beginning October 1, 2005. The company's Board of Directors approved new compensation structures for non-management directors, including increased stock awards and retainers, aiming to better align director interests with shareholders and reflect the responsibilities of committee chairs. These changes are effective for fiscal year 2006 and underscore a commitment to robust director compensation practices. Furthermore, the filing announces significant amendments to Emerson's Bylaws. These amendments streamline corporate governance by reflecting the current structure where one individual holds both Chairman and CEO positions, while also removing obsolete provisions. Notably, the Bylaws have been updated to allow for uncertificated stock shares and to clarify indemnification provisions for directors and officers, including the advancement of defense expenses as incurred. These updates demonstrate a proactive approach to modernizing corporate procedures and enhancing clarity in governance.

Key Highlights

1New non-management director compensation package approved for fiscal year 2006, including a $90,000 restricted stock award.
2Annual cash retainer for non-management directors increased to $50,000.
3Specific retainers for Audit Committee Chairman ($12,000) and other Committee Chairmen ($8,000) established.
4Meeting attendance fees set at $1,500 for Board meetings and $1,250 for Committee meetings.
5Bylaws amended to reflect a single individual serving as both Chairman of the Board and Chief Executive Officer.
6Provisions for uncertificated stock shares have been introduced, allowing for electronic record-keeping of ownership.
7Indemnification clauses for directors and officers have been clarified, including mandatory advancement of defense expenses.
8Obsolete or redundant provisions within the Bylaws have been removed to streamline corporate governance.

EMERSON ELECTRIC CO 8-K Report, Material Agreement (Oct 11, 2005)

Summary

Key Highlights

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