Emerson 2009 Annual Report Download - page 45

Annual Report 43
Changes in awards outstanding but not yet earned under the incentive shares plans during the year ended
September 30, 2009 follow:
     A v e R A G e G R A n t d A t e 
(s h A R e s in t h o u s A n d s )    s h A R e s f A i R v A l u e p e R s h A R e
Beginning of year 6,633 $40.79
Granted 465 $36.90
Earned/vested (74) $34.46
Canceled (55) $41.10
End of year 6,969 $40.59
The total fair value of shares earned/vested was $3, $253 and $5, respectively, under the incentive shares plans, of
which $1, $104 and $2 was paid in cash, primarily for tax withholding, in 2009, 2008 and 2007, respectively. As of
September 30, 2009, approximately 15.5 million shares remained available for award under the incentive shares plans.
Combined compensation expense for the stock option and incentive shares plans was $54, $82 and $185, for 2009,
2008 and 2007, respectively. Expense in 2007 includes the full overlap of two performance share programs during the
year (2004 awards for performance through 2007 and 2007 awards for performance through 2010). The decrease in
expense in 2008 reects a partial overlap of performance share programs, as a portion of the 2004 awards remained
outstanding during the year, and a decline in the Company’s stock price. The decrease from 2008 to 2009 reects no
performance share program overlap in 2009 and expense accrual at a lower overall performance percentage. Total
income tax benets recognized in the income statement for these compensation arrangements during 2009, 2008
and 2007 were $13, $21 and $55, respectively. As of September 30, 2009, there was $101 of total unrecognized
compensation cost related to nonvested awards granted under these plans, which is expected to be recognized over a
weighted-average period of 1.8 years.
In addition to the stock option and incentive shares plans, the Company issued 41,400 shares of restricted stock in
2009 under the restricted stock plan for non-management directors and 368,854 million shares remained available for
issuance as of September 30, 2009.

At September 30, 2009, approximately 45 million shares of common stock were reserved for issuance under the
Company’s stock-based compensation plans. During 2009, 21.0 million common shares were repurchased and
1.7 million treasury shares were issued.

The Company designs and supplies product technology and delivers engineering services in a wide range of industrial,
commercial and consumer markets around the world. The segments of the Company are organized primarily by the
nature of the products and services provided. The Process Management segment includes systems and software,
measurement and analytical instrumentation, valves, actuators and regulators, and services and solutions that provide
precision control, monitoring and asset optimization for plants that produce power or that process uids, such as
petroleum, chemicals, food and beverages, pulp and paper, and pharmaceuticals. The Industrial Automation segment
includes industrial motors and drives, power transmission and materials handling equipment, alternators, materials
joining and precision cleaning, uid power and control, and electrical distribution equipment, which are used in a wide
variety of manufacturing operations to provide integrated manufacturing solutions to our customers. The Network
Power segment designs, manufactures, installs and maintains power systems, including power conditioning and unin-
terruptible power supplies, embedded power supplies, precision cooling systems, electrical switching equipment, and
site monitoring systems for telecommunications networks, data centers and other critical applications. The Climate
Technologies segment consists of compressors, temperature sensors and controls, thermostats, ow controls, and
remote monitoring services provided to all areas of the climate control industry. The Appliance and Tools segment
includes general and special purpose motors and controls, appliances and appliance components, plumbing tools,
and storage products used in a wide variety of commercial and residential applications. The principal distribution
method for each segment is a direct sales force, although the Company also uses independent sales representatives
and distributors.
The primary income measure used for assessing segment performance and making operating decisions is earnings
before interest and income taxes. Intersegment sales approximate market prices. Accounting method differences
between segment reporting and the consolidated nancial statements include primarily management fees allocated
to segments based on a percentage of sales and the accounting for pension and other retirement plans. Gains and
losses from divestitures of businesses are included in Corporate and other. Corporate assets include primarily cash and
equivalents, pensions, investments and certain xed assets.