Business Context and Reporting Period
This Form 8-K Current Report was filed by Emerson Electric Co. on April 4, 2007. The filing discloses the departure of W. Wayne Withers, who voluntarily retired as Secretary and General Counsel effective March 15, 2007, and will retire as Executive Vice President effective November 30, 2007. Mr. Withers will serve as Executive Vice President and Special Legal Advisor until his final retirement date.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on executive compensation and retirement arrangements. Key financial terms related to Mr. Withers include:
- Consulting Fees: $43,333 per month for the first six months post-retirement; $21,666 per month for the subsequent 18 months.
- Performance Shares: Eligible for the normal payout of 60% of the 2004 Performance Share Program in November 2007. The remaining 40% (maximum 28,000 shares) is eligible for payout in November 2008.
- Restricted Stock: An unvested award of 50,000 shares will vest as scheduled in October 2009.
- Benefits: Eligibility for pension benefits, 401(k) distributions, and stock option exercise rights (up to five years post-retirement).
- Perks: Estimated value of less than $50,000 per year for leased automobile, financial planning, and club memberships during the consulting term.
Material Changes
The primary material change is the transition of leadership roles. Frank L. Steeves is identified as the new General Counsel and Secretary. Mr. Withers is transitioning from active executive management to a special legal advisor role and subsequently to a two-year consulting arrangement.
Guidance, Outlook, and Risks
The filing contains no financial guidance or outlook for the company. However, it outlines specific risks and contingencies regarding the executive agreement:
- Clawback Provisions: If Mr. Withers violates obligations (e.g., non-competition, non-solicitation, confidentiality), he will forfeit outstanding performance shares, restricted stock, and supplemental retirement benefits. The company also retains the right to recover gains from exercised stock options.
- Consulting Obligations: Mr. Withers must provide full-time consulting services for the first six months and part-time services for the remaining 18 months of the contract.
Investor Verification Checklist
- Verify the exact vesting schedule and performance conditions for the 2004 Performance Share Program to confirm the 28,000 share payout eligibility.
- Confirm the total number of outstanding stock options held by Mr. Withers to assess potential dilution or exercise activity over the next five years.
- Review the attached Exhibits 10.1 (Letter Agreement) and 10.2 (Consulting Contract) for specific non-compete definitions and geographic restrictions.
- Monitor the transition of duties to Frank L. Steeves to ensure continuity in legal and secretarial functions.