EXHIBIT 10.5

MANAGEMENT CONTINUITY AGREEMENT

            THIS AGREEMENT, dated as of January 1, 2005 is made by and between
Cooper Industries, Ltd., a Bermuda corporation (“Cooper”), Cooper US, Inc., a
Delaware corporation (the “Company”), and _____ (the “Executive”).

            WHEREAS, the Company is a significant subsidiary of Cooper and
Executive is employed by the Company in a key management position; and

            WHEREAS, Cooper considers it essential to the best interests of its
shareholders to foster the continued employment of key management personnel of
the Company; and

            WHEREAS, the Board recognizes that, as is the case with many
publicly held corporations, the possibility of a Change in Control exists and
that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its shareholders; and

            WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company’s management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control; and

            WHEREAS, Cooper will derive substantial direct and indirect benefit
from this Agreement as the Company’s parent and desires to guaranty the
Company’s obligations hereunder in order to induce the Executive to enter into
this Agreement;

            NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Cooper, the Company and the Executive hereby agree
as follows:

            1. Defined Terms. The definitions of capitalized terms used in this
Agreement are provided in Section 17 hereof.

            2. Term of Agreement. The Term of this Agreement shall commence on
the date hereof and shall continue in effect through December 31, 2005;
provided, however, that commencing on January 1, 2006 and each January 1
thereafter, the Term shall automatically be extended for one additional year
unless, not later than September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend the Term; and further provided,
however, that if a Change in Control shall have occurred during the Term, the
Term shall expire no earlier than twenty-four (24) months beyond the month in
which such Change in Control occurred. Notwithstanding any other provision
hereof, (a) the Term shall expire upon any termination of the Executive’s
employment prior to a Potential Change in Control and (b) the Term shall expire
(and for purposes of the application of the provisions of the Agreement, shall
be deemed to have expired) on the date (or scheduled date, as the case may be)
of the Executive’s Retirement.

            3. Company’s Covenants Summarized. In order to induce the Executive
to remain in the employ of the Company and in consideration of the Executive’s
covenants set forth

 

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in Section 4 hereof, the Company agrees, under the conditions described herein,
to pay the Executive the Severance Payments and the other payments and benefits
described herein. Except as provided in Section 9.1 hereof, no Severance
Payments shall be payable under this Agreement unless there has been (or, under
the terms of the second sentence of Section 6.1 hereof, there shall be deemed to
have been) a termination of the Executive’s employment with the Company
following a Change in Control and during the Term. This Agreement shall not be
construed as creating an express or implied contract of employment and, except
as otherwise agreed in writing between the Executive and the Company, the
Executive shall not have any right to be retained in the employ of the Company.

            4. The Executive’s Covenants. The Executive agrees that, subject to
the terms and conditions of this Agreement, in the event of a Potential Change
in Control during the Term, the Executive intends to remain in the employ of the
Company until there occurs a Change in Control.

            5. Compensation Other Than Severance Payments.

            5.1 Following a Change in Control and during the Term, during any
period that the Executive fails to perform the Executive’s full-time duties with
the Company as a result of incapacity due to physical or mental illness, the
Company shall pay the Executive’s full salary to the Executive at the rate in
effect at the commencement of any such period, together with all compensation
and benefits payable to the Executive under the terms of any compensation or
benefit plan, program or arrangement maintained by the Company during such
period, until the Executive’s employment is terminated by the Company for
Disability.

            5.2 If the Executive’s employment shall be terminated for any reason
following a Change in Control and during the Term, the Company shall pay the
Executive’s full salary to the Executive through the Date of Termination at the
rate in effect immediately prior to the Date of Termination (without giving
effect to any reduction in base salary, which reduction constitutes an event of
Good Reason) or, if higher, the rate in effect immediately prior to the Change
in Control, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of the Company’s compensation
and benefit plans, programs or arrangements as in effect immediately prior to
the Date of Termination (without giving effect to any reduction in compensation
or benefits, which reduction constitutes an event of Good Reason) or, if more
favorable to the Executive, as in effect immediately prior to the Change in
Control.

            5.3 If the Executive’s employment shall be terminated for any reason
following a Change in Control and during the Term, the Company shall pay to the
Executive the Executive’s normal post-termination compensation and benefits as
such payments become due. Such post-termination compensation and benefits shall
be determined under, and paid in accordance with, the Company’s retirement,
insurance and other compensation or benefit plans, programs and arrangements as
in effect immediately prior to the Date of Termination (without giving effect to
any adverse change in such plans, programs and arrangements, which adverse
change constitutes an event of Good Reason) or, if more favorable to the
Executive, as in effect immediately prior to the Change in Control.

            6. Severance Payments.

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            6.1 Subject to Section 6.2 hereof, if (i) the Executive’s employment
is terminated following a Change in Control and during the Term, other than
(A) by the Company for Cause, (B) by reason of death, Disability or Retirement,
or (C) by the Executive without Good Reason, then the Company shall pay the
Executive the amounts, and provide the Executive the benefits, described in this
Section 6.1 (“Severance Payments”) and Section 6.2, in addition to any payments
and benefits to which the Executive is entitled under Section 5 hereof. For
purposes of this Agreement, the Executive’s employment shall be deemed to have
been terminated following a Change in Control by the Company without Cause or by
the Executive with Good Reason, if (i) the Executive’s employment is terminated
by the Company without Cause after the occurrence of a Potential Change in
Control and prior to a Change in Control (whether or not a Change in Control
ever occurs) and such termination was at the request or direction of a Person
who has entered into an agreement with the Company the consummation of which
would constitute a Change in Control or (ii) the Executive terminates his
employment for Good Reason after the occurrence of a Potential Change in Control
and prior to a Change in Control (whether or not a Change in Control ever
occurs) and the circumstance or event which constitutes Good Reason occurs at
the request or direction of such Person.

            (A) In lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the Company shall pay to the
Executive a lump sum severance payment, in cash, equal to _______ [ ] (or, if
less, the number of full and partial years between the Date of Termination and
the Executive’s scheduled date of Retirement) times the sum of (i) the
Executive’s base annual salary as in effect immediately prior to the Date of
Termination (without giving effect to any reduction in base annual salary, which
reduction constitutes an event of Good Reason) or, if higher, in effect
immediately prior to the Change in Control, and (ii) the higher of (A) the
average annual bonus earned by the Executive pursuant to the annual bonus or
incentive plan maintained by the Company in respect of the three fiscal years
ending immediately prior to the fiscal year in which occurs the Date of
Termination (without giving effect to any reduction in bonus caused by an
adverse change in the Executive’s bonus plan participation, which adverse
constitutes an event of Good Reason) or, if higher, immediately prior to the
fiscal year in which occurs the Change in Control or (B) the Executive’s target
annual bonus for the fiscal year in which occurs the Date of Termination
(without giving effect to any reduction in bonus caused by an adverse change in
the Executive’s bonus plan participation, which adverse change constitutes an
event of Good Reason) or, if higher, the fiscal year in which occurs the Change
in Control.

            (B) For the                                          [ ] month
period (or, if less, the number of months between the Date of Termination and
the Executive’s scheduled date of Retirement) immediately following the Date of
Termination, the Company shall arrange to provide the Executive and his
dependents with life, disability, accident and health insurance benefits
substantially similar to those provided to the Executive and his dependents
immediately prior to the Date of Termination (without giving effect to any
reduction in benefits, which reduction constitutes an event of Good Reason) or,
if more favorable to the Executive, those provided to the Executive and his
dependents immediately prior to the Change in Control, at no greater cost to the
Executive than the cost to the Executive immediately prior to such date;
provided, however, that, unless the Executive consents to a different method
(after taking into account the effect of such method on the calculation of
“parachute payments” pursuant to Section 6.2 hereof), such health insurance

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benefits shall be provided through a third-party insurer. Benefits otherwise
receivable by the Executive pursuant to this Section 6.1 (B) shall be reduced to
the extent benefits of the same type are received by or made available to the
Executive during the _______ [ ] (or, if less, the number of months between the
Date of Termination and the Executive’s scheduled date of Retirement) month
period following the Executive’s termination of employment (and any such
benefits received by or made available to the Executive shall be reported to the
Company by the Executive); provided, however, that the Company shall reimburse
the Executive for the excess, if any, of the cost of such benefits to the
Executive over such cost immediately prior to the Date of Termination or, if
more favorable to the Executive, the date on which the Change in Control occurs.
If the Severance Payments shall be decreased pursuant to Section 6.2 hereof, and
the Section 6.1(B) benefits which remain payable after the application of
Section 6.2 hereof are thereafter reduced pursuant to the immediately preceding
sentence, the Company shall, no later than five (5) business days following such
reduction, pay to the Executive the least of (a) the amount of the decrease made
in the Severance Payments pursuant to Section 6.2 hereof, (b) the amount of the
subsequent reduction in these Section 6.1(B) benefits, or (c) the maximum amount
which can be paid to the Executive without being, or causing any other payment
to be, nondeductible by reason of section 280G of the Code.

            In the event the Executive receives health insurance benefits during
the _______ [ ] month period following the Date of Termination pursuant to the
foregoing provisions of this Section 6.1(B), the Executive and his or her
dependents shall continue to be eligible for health insurance benefits for up to
an additional sixty (60) months, provided however, that no benefits will be
provided (i) if health insurance benefits are available to the Executive through
another employer during such period, or (ii) after the insured individual
reaches age 65. Such health insurance benefits shall be substantially similar
to, and have no greater cost to the Executive than those in effect for the
________ [ ] month period following the Date of Termination.

            (C) Notwithstanding any provision of any annual incentive plan to
the contrary, the Company shall pay to the Executive a lump sum amount, in cash,
equal to the product of (i) the target bonus to which the Executive would have
been entitled under the Company’s annual incentive plan in respect of the year
in which the Date of Termination occurs and (ii) a fraction, the numerator of
which shall be the number of months (including fractions thereof) from the first
day of the fiscal year during which the Date of Termination occurs to the Date
of Termination, and the denominator of which shall be twelve (12); provided,
however, that if the Date of Termination occurs during the same year as the
Change in Control, the payment under this Section 6.1(C) shall be offset by any
payments received under the Company’s annual incentive plan in connection with
such Change in Control.

            (D) In addition to the retirement benefits to which the Executive is
entitled under each Pension Plan or any successor plan thereto, the Company
shall pay the Executive a lump sum amount, in cash, equal to the sum of (i) the
pay related credits the Executive would have accrued under the Salaried
Employees’ Retirement Plan of Cooper Industries and the Cooper Industries
Supplemental Excess Defined Benefit Plan; and (ii) the Company-Matching
Contributions the Executive would have accrued under the Cooper Industries
Savings and Stock Ownership Plan and the Cooper Industries Supplemental Excess
Defined Contribution Plan (the plans referred to in subsections (i) and (ii)
hereof, “The Plans”), in each case, during the

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                                         [ ] month (or, if less, the number of
months between the Date of Termination and the Executive’s scheduled date of
Retirement) period immediately following the Executive’s Date of Termination
based upon: (1) the terms and provisions of The Plans as in effect immediately
prior to the Change in Control; (2) the lump sum payment set forth in
Section 6.1(A) hereof, which lump sum shall be deemed to have been earned
ratably over such period; and (3) the assumption that the Executive was making
the maximum allowable pre-tax contributions under The Plans during such period.

            (E) The Company shall provide the Executive with outplacement
services suitable to the Executive’s position for a period of one year or, if
earlier, until the first acceptance by the Executive of an offer of employment.

            (F) Cooper shall continue to maintain officers’ indemnification
insurance for the Executive for a period of five years following the Date of
Termination, the terms and conditions of which shall be no less favorable than
the terms and conditions of the officers’ indemnification insurance maintained
by Cooper for the Executive immediately prior to the date on which the Change in
Control occurs.

            6.2 (A) Whether or not the Executive becomes entitled to the
Severance Payments, if any payment or benefit received or to be received by the
Executive in connection with a Change in Control or the termination of the
Executive’s employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any Person whose actions
result in a Change in Control or any Person affiliated with the Company or such
Person) (all such payments and benefits, including the Severance Payments, being
hereinafter called “Total Payments”) will be subject (in whole or part) to the
Excise Tax, then, subject to the provisions of subsection (B) of this
Section 6.2, the Company shall pay to the Executive an additional amount (the
“Gross-Up Payment”) such that the net amount retained by the Executive, after
deduction of any Excise Tax on the Total Payments and any federal, state and
local income and employment taxes and Excise Tax upon the Gross-Up Payment,
shall be equal to the Total Payments. For purposes of determining the amount of
the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes
at the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Executive’s
residence on the Date of Termination (or if there is no Date of Termination,
then the date on which the Gross-Up Payment is calculated for purposes of this
Section 6.2), net of the maximum reduction in federal income tax which could be
obtained from deduction of such state and local taxes.

            (B) In the event that the amount of the Total Payments does not
exceed 110% of the largest amount that would result in no portion of the Total
Payments being subject to the Excise Tax (the “Safe Harbor”), then subsection
(A) of this Section 6.2 shall not apply and the noncash Severance Payments shall
first be reduced (if necessary, to zero), and the cash Severance Benefits shall
thereafter be reduced (if necessary, to zero) so that the amount of the Total
Payments is equal to the Safe Harbor; provided, however, that the Executive may
elect to have the cash Severance Payments reduced (or eliminated) prior to any
reduction of the noncash Severance Payments.

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            (C) For purposes of determining whether any of the Total Payments
will be subject to the Excise Tax and the amount of such Excise Tax, (i) all of
the Total Payments shall be treated as “parachute payments” within the meaning
of section 280G(b)(2) of the Code, unless in the opinion of tax counsel (“Tax
Counsel”) reasonably acceptable to the Executive and selected by the accounting
firm which was, immediately prior to the Change in Control, Cooper’s independent
auditor (the “Auditor”), such other payments or benefits (in whole or in part)
do not constitute parachute payments, including by reason of section
280G(b)(4)(A) of the Code, (ii) all “excess parachute payments” within the
meaning of section 280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of
the Base Amount allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Auditor in accordance
with the principles of sections 280G(d)(3) and (4) of the Code. Prior to the
payment date set forth in Section 6.3 hereof, the Company shall provide the
Executive with its calculation of the amounts referred to in this Section 6.2(C)
and such supporting materials as are reasonably necessary for the Executive to
evaluate the Company’s calculations. If the Executive disputes the Company’s
calculations (in whole or in part), the reasonable opinion of Tax Counsel with
respect to the matter in dispute shall prevail.

            (D) In the event that (i) amounts are paid to the Executive pursuant
to subsection (A) of this Section 6.2, (ii) the Excise Tax is finally determined
to be less than the amount taken into account hereunder in calculating the
Gross-Up Payment, and (iii) after giving effect to such redetermination, the
Severance Payments are to be reduced pursuant to subsection (B) of this
Section 6.2, the Executive shall repay to the Company, within five (5) business
days following the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise
Tax and federal, state and local income and employment taxes imposed on the
Gross-Up Payment being repaid by the Executive), to the extent that such
repayment results in (i) no portion of the Total Payments being subject to the
Excise Tax and (ii) a dollar-for-dollar reduction in the Executive’s taxable
income and wages for purposes of federal, state and local income and employment
taxes) plus interest on the amount of such repayment at the rate provided in
section 1274(b)(2)(B) of the Code. In the event that (x) the Excise Tax is
determined to exceed the amount taken into account hereunder at the time of the
termination of the Executive’s employment (including by reason of any payment
the existence or amount of which cannot be determined at the time of the
Gross-Up Payment) and (y) after giving effect to such redetermination, the
Severance Payments should not have been reduced pursuant to subsection (B) of
this Section 6.2, the Company shall make an additional Gross-Up Payment in
respect of such excess and in respect of any portion of the Excise Tax with
respect to which the Company had not previously made a Gross-Up Payment (plus
any interest, penalties or additions payable by the Executive with respect to
such excess and such portion) within five (5) business days following the time
that the amount of such excess is finally determined.

            6.3 The payments provided in subsections (A), (C) and (D) of
Section 6.1 hereof and in Section 6.2 hereof shall be made not later than the
fifth day following the Date of Termination; provided, however, that if the
amounts of such payments, and the limitations on such payments set forth in
Section 6.2 hereof, cannot be finally determined on or before such

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day, the Company shall pay to the Executive on such day an estimate, as
determined in good faith by the Executive or, in the case of payments under
Section 6.2 hereof, in accordance with Section 6.2 hereof, of the minimum amount
of such payments to which the Executive is clearly entitled and shall pay the
remainder of such payments (together with interest on the unpaid remainder [or
on all such payments to the extent the Company fails to make such payments when
due] at the rate provided in section 1274(b)(2)(B) of the Code) as soon as the
amount thereof can be determined but in no event later than the thirtieth (30th)
day after the Date of Termination. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been due, such
excess shall constitute a loan by the Company to the Executive, payable on the
fifth (5th) business day after demand by the Company (together with interest at
the rate provided in section 1274(b)(2)(B) of the Code). At the time that
payments are made under this Agreement, the Company shall provide the Executive
with a written statement setting forth the manner in which such payments were
calculated and the basis for such calculations including, without limitation,
any opinions or other advice the Company has received from Tax Counsel, the
Auditor or other advisors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement).

            6.4 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing in good faith any issue
hereunder relating to the termination of the Executive’s employment, in seeking
in good faith to obtain or enforce any benefit or right provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder. Such payments shall be made within five (5) business
days after delivery of the Executive’s written request(s) for payment
accompanied with such evidence of fees and expenses incurred as the Company
reasonably may require.

            7. Termination Procedures and Compensation During Dispute.

            7.1 Notice of Termination. After a Change in Control and during the
Term, any purported termination of the Executive’s employment (other than by
reason of death) shall be communicated by written Notice of Termination from the
Company to the Executive (or in the case of a termination for Good Reason, from
the Executive to the Company) in accordance with Section 10 hereof. For purposes
of this Agreement, a “Notice of Termination” shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment under the
provision so indicated. Further, a Notice of Termination for Cause is required
to include a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of considering
such termination (after reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive’s counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive was
guilty of conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.

            7.2 Date of Termination. “Date of Termination,” with respect to any
purported termination of the Executive’s employment after a Change in Control
and during the Term, shall mean (i) if the Executive’s employment is terminated
for Disability, thirty (30) days after Notice

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of Termination is given (provided that the Executive shall not have returned to
the full-time performance of the Executive’s duties during such thirty (30) day
period), and (ii) if the Executive’s employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty (30) days (except in
the case of a termination for Cause) and, in the case of a termination by the
Executive, shall not be less than fifteen (15) days nor more than sixty
(60) days, respectively, from the date such Notice of Termination is given).

            7.3 Dispute Concerning Termination. If within fifteen (15) days
after any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be extended
until the earlier of (i) the date on which the Term ends or (ii) the date on
which the dispute is finally resolved, either by mutual written agreement of the
parties or by a final judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been perfected);
provided, that the Date of Termination shall be extended by a notice of dispute
given by the Executive only if such notice is given in good faith and the
Executive pursues the resolution of such dispute with reasonable diligence.

            7.4 Compensation During Dispute. If a purported termination occurs
following a Change in Control and during the Term and the Date of Termination is
extended in accordance with Section 7.3 hereof, the Company shall continue to
pay the Executive the full compensation in effect when the notice giving rise to
the dispute was given (including, but not limited to, salary) and continue the
Executive as a participant in all compensation, benefit and insurance plans in
which the Executive was participating when the notice giving rise to the dispute
was given, until the Date of Termination, as determined in accordance with
Section 7.3 hereof. Amounts paid under this Section 7.4 are in addition to all
other amounts due under this Agreement (other than those due under Section 5.2
hereof) and shall not be offset against or reduce any other amounts due under
this Agreement.

            8. No Mitigation. The Company agrees that, if the Executive’s
employment with the Company terminates during the Term, the Executive is not
required to seek other employment or to attempt in any way to reduce any amounts
payable to the Executive by the Company pursuant to Section 6 hereof or
Section 7.4 hereof. Further, the amount of any payment or benefit provided for
in this Agreement (other than Section 6.1(B) hereof) shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.

            9. Successors; Binding Agreement.

            9.1 In addition to any obligations imposed by law upon any successor
to Cooper or the Company, Cooper or the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of Cooper or the Company,
as the case may be, to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that Cooper or the Company would be

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required to perform it if no such succession had taken place. Failure of Cooper
or the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as the Executive would be entitled to hereunder if the
Executive were to terminate the Executive’s employment for Good Reason after a
Change in Control, except that, for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the Date of
Termination.

     9.2 This Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall
die while any amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive)
if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators of the Executive’s
estate.

     10. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive’s signature on the final
page hereof and, if to Cooper or the Company, to the address set forth below, or
to such other address as either party may have furnished to the other in writing
in accordance herewith, except that notice of change of address shall be
effective only upon actual receipt:

To the Company:
Cooper US, Inc.
P.O. Box 4446
Houston, Texas 77210-4446
Attention: Senior Vice President, Human Resources

To Cooper:
Cooper Industries, Ltd.
P.O. Box 4446
Houston, Texas 77210-4446
Attention: General Counsel

            11. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and authorized officers of Cooper and the
Company. No waiver by any party hereto at any time of any breach by another
party hereto of, or of any lack of compliance with, any condition or provision
of this Agreement to be performed by any party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. This Agreement supersedes any other agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either party; provided, however,
that this Agreement shall supersede any agreement setting forth the terms and
conditions of the Executive’s employment with the Company only in the event that
the

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Executive’s employment with the Company is terminated on or following a Change
in Control by the Company other than for Cause or by the Executive for Good
Reason. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Ohio. All references to
sections of the Exchange Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments provided for hereunder shall
be reduced to the extent necessary so that the Company may satisfy any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed. The obligations of
Cooper, the Company and the Executive under this Agreement which by their nature
may require either partial or total performance after the expiration of the Term
(including, without limitation, those under Sections 6 and 7 hereof) shall
survive such expiration.

            12. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

            13. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

            14. Settlement of Disputes; Arbitration.

            14.1 All claims by the Executive for benefits under this Agreement
shall be directed to and determined by the Board and shall be in writing. Any
denial by the Board of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the specific reasons
for the denial and the specific provisions of this Agreement relied upon. The
Board shall afford a reasonable opportunity to the Executive for a review of the
decision denying a claim and shall further allow the Executive to appeal to the
Board a decision of the Board within sixty (60) days after notification by the
Board that the Executive’s claim has been denied.

            14.2 Any further dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Houston, Texas in accordance with the rules of the American Arbitration
Association then in effect; provided, however, that the evidentiary standards
set forth in this Agreement shall apply. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction. Notwithstanding any
provision of this Agreement to the contrary, the Executive shall be entitled to
seek specific performance of the Executive’s right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.

            14.3 The Company shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing in good faith any issue
hereunder relating to the termination of Executive’s employment, or in seeking
in good faith to obtain or enforce any benefit or right provided by this
Agreement. Such payment shall be made within five (5) business days after
delivery of the Executive’s written request for payment, accompanied by such
evidence or fees and expenses incurred as the Company reasonably may require.

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            15. Termination of Prior Management Continuity Agreement. This
Agreement supercedes any Management Continuity Agreement previously executed by
Cooper Industries, Inc. and the Executive and any such previous agreement is
terminated effective as of the date hereof.

            16. Guarantee by Cooper. Cooper, as direct obligor and not merely as
a surety, absolutely and unconditionally guarantees the punctual payment,
performance and observance of each and every covenant, agreement, duty or any
other obligation of the Company under or arising out of this Agreement
(collectively, the “Guaranteed Obligations”). This is an irrevocable and
continuing guarantee of payment and performance and not merely a guarantee of
collection and shall remain in full force and effect until the Guaranteed
Obligations have been satisfied, paid and performed in full. Cooper waives any
right to require that an Executive proceed against any other person or entity or
asset liable on or securing the Guaranteed Obligations or pursue or exhaust any
other remedy whatsoever. To the fullest extent permitted by applicable law,
Cooper further waives any legal or equitable defense to the enforceability of
its obligations hereunder, and agrees that its obligations shall be absolute and
unconditional and shall not be affected or discharged by any circumstance, act
or event whatsoever (including without limitation the insolvency, voluntary or
involuntary bankruptcy, liquidation, dissolution, winding up, merger,
consolidation or reorganization of the Company), except payment and performance
in full of the Guaranteed Obligations.

            17. Definitions. For purposes of this Agreement, the following terms
shall have the meanings indicated below:

            (A) “Affiliate” shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.

            (B) “Auditor” shall have the meaning set forth in Section 6.2
hereof.

            (C) “Base Amount” shall have the meaning set forth in section
280G(b)(3) of the Code.

            (D) “Beneficial Owner” shall have the meaning set forth in Rule 13d3
under the Exchange Act.

            (E) “Board” shall mean the Board of Directors of Cooper.

            (F) “Cause” for termination by the Company of the Executive’s
employment shall mean (i) the willful and continued failure by the Executive to
substantially perform the Executive’s duties with the Company (other than any
such failure resulting from the Executive’s incapacity due to physical or mental
illness or any such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof)
after a written demand for substantial performance is delivered to the Executive
by the Board, which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the Executive’s
duties, or (ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its subsidiaries,
monetarily or otherwise. For purposes of clauses (i) and (ii) of this
definition, (x)

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no act, or failure to act, on the Executive’s part shall be deemed “willful”
unless done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive’s act, or failure to act, was in
the best interest of the Company and (y) in the event of a dispute concerning
the application of this provision, no claim by the Company that Cause exists
shall be given effect unless the Company establishes to the Board by clear and
convincing evidence that Cause exists.

            (G) A “Change in Control” shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have occurred:

            (I) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of Cooper (not including in the securities
beneficially owned by such Person any securities acquired directly from Cooper
or its Affiliates) representing 25% or more of the combined voting power of
Cooper’s then outstanding securities (other than Cooper’s Class B Common
Shares), excluding any Person who becomes such a Beneficial Owner in connection
with a transaction described in clause (i) of paragraph (III) below; or

            (II) the following individuals cease for any reason to constitute a
majority of the number of directors then serving on the Board: individuals who,
on the date hereof, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of Cooper) whose appointment
or election by the Board or nomination for election by Cooper’s shareholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended; or

            (III) there is consummated a merger or consolidation of Cooper or
any direct or indirect subsidiary of Cooper with any other corporation, other
than (i) a merger or consolidation which results in the directors of Cooper
immediately prior to such merger or consolidation continuing to constitute at
least a majority of the board of directors of Cooper, the surviving entity or
any parent thereof, or (ii) a merger or consolidation effected to implement a
recapitalization of Cooper (or similar transaction) in which no Person is or
becomes the Beneficial Owner, directly or indirectly, of securities of Cooper
(not including in the securities Beneficially Owned by such Person any
securities acquired directly from the Cooper or its Affiliates) representing 25%
or more of the combined voting power of Cooper’s then outstanding securities
(other than Cooper’s Class B Common shares); or

            (IV) the shareholders of Cooper approve a plan of complete
liquidation or dissolution of Cooper or there is consummated an agreement for
the sale or disposition by Cooper of all or substantially all of Cooper’s
assets, other than a sale or disposition by Cooper of all or substantially all
of Cooper’s assets to an entity, at least 60% of the combined voting power of
the voting securities of

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which are owned by shareholders of Cooper in substantially the same proportions
as their ownership of Cooper immediately prior to such sale.

            (H) “Code” shall mean the Internal Revenue Code of 1986, as amended
from time to time.

            (I) “Company” shall mean Cooper US, Inc. and, shall include any
successor to its business and/or assets which assumes and agrees to perform this
Agreement by operation of law or otherwise.

            (J) “Cooper” shall mean Cooper Industries, Ltd., a Bermuda
corporation and, except in determining under Section 17(G) hereof whether any
Change in Control has occurred, shall include any successor to its business
and/or assets which assumes and agrees to perform this Agreement by operation of
law or otherwise.

            (K) “Date of Termination” shall have the meaning set forth in
Section 7.2 hereof.

            (L) “Disability” shall be deemed the reason for the termination by
the Company of the Executive’s employment, if, as a result of the Executive’s
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive’s duties with the Company
for a period of six (6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within thirty (30) days
after such Notice of Termination is given, the Executive shall not have returned
to the full-time performance of the Executive’s duties.

            (M) “Exchange Act” shall mean the Securities Exchange Act of 1934,
as amended from time to time.

            (N) “Excise Tax” shall mean any excise tax imposed under section
4999 of the Code.

            (O) “Executive” shall mean the individual named in the first
paragraph of this Agreement.

            (P) “Good Reason” for termination by the Executive of the
Executive’s employment shall mean the occurrence (without the Executive’s
express written consent) after any Change in Control, or prior to a Change in
Control under the circumstances described in clauses (ii) and (iii) of the
second sentence of Section 6.1 hereof (treating all references in paragraphs
(I) through (VII) below to a “Change in Control” as references to a “Potential
Change in Control”), of any one of the following acts by Cooper or the Company,
or failures by the Company to act, unless, in the case of any act or failure to
act described in paragraph (I), (V), (VI) or (VII) below, such act or failure to
act is corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:

            (I) the assignment to the Executive of any duties inconsistent with
the Executive’s status as a senior executive officer of the Company or a
substantial adverse alteration in the nature or status of the Executive’s
responsibilities or

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reporting relationship from those in effect immediately prior to the Change in
Control;

            (II) a reduction by the Company in the Executive’s annual base
salary as in effect on the date hereof or as the same may be increased from time
to time;

            (III) the relocation of the Executive’s principal place of
employment to a location which increases the Executive’s one-way commuting
distance by more than 50 miles or the Company’s requiring the Executive to be
based anywhere other than the Executive’s principal place of employment
immediately prior to the Change in Control (or permitted relocation thereof)
except for required travel on the Company’s business to an extent substantially
consistent with the Executive’s business travel obligations immediately prior to
the Change in Control;

            (IV) the failure by the Company to pay to the Executive any portion
of the Executive’s current compensation, or to pay to the Executive any portion
of an installment of deferred compensation under any deferred compensation
program of the Company, within seven (7) days of the date such compensation is
due, unless paid by Cooper pursuant to Section 16 of this Agreement;

            (V) the failure by the Company to continue in effect any
compensation plan in which the Executive participates immediately prior to the
Change in Control which is material to the Executive’s total compensation,
including but not limited to the Stock Incentive Plan, the Amended and Restated
Management Annual Incentive Plan and the Management Incentive Compensation
Deferral Plan or any substitute plans adopted prior to the Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by the
Company to continue the Executive’s participation therein (or in such substitute
or alternative plan) on a basis not materially less favorable, both in terms of
the amount or timing of payment of benefits provided and the level of the
Executive’s participation relative to other participants, as existed immediately
prior to the Change in Control;

            (VI) the failure by the Company to continue to provide the Executive
with benefits substantially similar to those enjoyed by the Executive under any
of the Company’s pension, savings, life insurance, medical, health and accident,
or disability plans in which the Executive was participating immediately prior
to the Change in Control, the taking of any other action by the Company which
would directly or indirectly materially reduce any of such benefits or deprive
the Executive of any material fringe benefit enjoyed by the Executive at the
time of the Change in Control, or the failure by the Company to provide the
Executive with the number of paid vacation days to which the Executive is

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entitled on the basis of years of service with the Company in accordance with
the Company’s normal vacation policy in effect at the time of the Change in
Control;

            (VII) any purported termination of the Executive’s employment which
is not effected pursuant to a Notice of Termination satisfying the requirements
of Section 7.1 hereof; for purposes of this Agreement, no such purported
termination shall be effective. The Executive’s right to terminate the
Executive’s employment for Good Reason shall not be affected by the Executive’s
incapacity due to physical or mental illness. The Executive’s continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any act or failure to act constituting Good Reason hereunder; or

            (VIII) any failure of Cooper or the Company to obtain assumption of
this Agreements, as set forth in Section 9.1 hereof.

For purposes of any determination regarding the existence of Good Reason, any
claim by the Executive that Good Reason exists shall be presumed to be correct
unless the Company establishes to the Board by clear and convincing evidence
that Good Reason does not exist.

            (Q) “Gross-Up Payment” shall have the meaning set forth in
Section 6.2 hereof.

            (R) “Notice of Termination” shall have the meaning set forth in
Section 7.1 hereof.

            (S) “Pension Plan” shall mean any tax-qualified, supplemental or
excess benefit pension plan maintained by the Company and any other plan or
agreement entered into between the Executive and the Company which is designed
to provide the Executive with supplemental retirement benefits.

            (T) “Person” shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) Cooper or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of Cooper in substantially
the same proportions as their ownership of Cooper stock or (v) any individual,
entity or group whose ownership of Cooper securities is reported on Schedule 13G
pursuant to Rule 13d-1 promulgated under the Exchange Act (but only for so long
as such ownership is so reported).

            (U) “Potential Change in Control” shall be deemed to have occurred
if the event set forth in any one of the following paragraphs shall have
occurred:

            (I) Cooper enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control;

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            (II) Cooper or any Person publicly announces an intention to take or
to consider taking actions which, if consummated, would constitute a Change in
Control;

            (III) any Person becomes the Beneficial Owner, directly or
indirectly, of securities of Cooper representing 15% or more of either the then
outstanding Class A Common Shares of Cooper or the combined voting power of
Cooper’s then outstanding securities other than Cooper’s Class B Common Shares
(not including in the securities beneficially owned by such Person any
securities acquired directly from Cooper or its Affiliates); or

            (IV) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.

            (V) “Retirement” shall mean the termination of the Executive’s
employment in accordance with the Company’s mandatory retirement policy as in
effect immediately prior to the Change in Control.

            (W) “Severance Payments” shall have the meaning set forth in
Section 6.1 hereof.

            (X) “Tax Counsel” shall have the meaning set forth in Section 6.2
hereof.

            (Y) “Term” shall mean the period of time described in Section 2
hereof (including any extension, continuation or termination described therein).

            (Z) “Total Payments” shall mean those payments so described in
Section 6.2 hereof.

                      COOPER INDUSTRIES, LTD       COOPER US, INC.    
 
                   
By:
          By:        

 

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Name:
  H. John Riley, Jr.       Name:   David R. Sheil    
Title:
  Chairman and Chief       Title:   Senior Vice President,    

  Executive Officer           Human Resources and    

              Chief Administrative Officer    
 
                                                  EXECUTIVE    
 
                                Address    

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