Exhibit 10.2
(EATON LOGO) [l36487al3648701.gif]
May 8, 2009
Eaton Corporation
Eaton Center
1111 Superior Avenue
Cleveland, Ohio 44114
Award of Restricted Share Units Under the Eaton Corporation 2009 Stock Plan
The Compensation and Organization Committee (the “Committee”) of the Board of
Directors of Eaton Corporation (the “Company”) has awarded you a number of
restricted share units effective as of May 8,2009 (the “Effective Date”) under
the terms and conditions of the Company’s 2009 Stock Plan (the “Plan”).
Information concerning the number of restricted share units awarded to you (the
“Award”) is available online through the Eaton Service Center at Fidelity which
may be accessed through the Company’s website. You are required to accept the
Award online at the Eaton Service Center at Fidelity. By so accepting the Award
you acknowledge and agree as follows (this “Agreement”):
     1. Acceptance. I hereby accept the Award on the terms and conditions
provided in the Plan and this Agreement.
     2. Restricted Share Units. I acknowledge that, as of the Effective Date,
the restricted share units referred to above (the “Restricted Units” or “Units”)
have been awarded to me, contingent on the continuation of my service with the
Company with certain exceptions as provided herein. Each Restricted Unit
represents one (1) Common Share of the Company. Except as otherwise expressly
provided in this Agreement, the Restricted Units shall be forfeited and
immediately cancelled if my employment with the Company is terminated under any
circumstances, including without limitation dismissal, resignation, divestiture
of operations, death, disability or retirement; provided, however, that in the
event of my death within 12 months prior to the Vesting Date (as hereinafter
defined), the possibility of forfeiture shall immediately lapse with respect to
100% of the Restricted Units. The possibility of forfeiture shall also lapse and
100% of the Restricted Units shall vest if I have been continuously employed by
the Company or one of its subsidiaries or affiliates to the date that is three
(3) years after the Effective Date (the “Vesting Date”), or upon a Change of
Control of the Company (as defined in Paragraph 9). Within 30 days after the
lapse of the possibility of forfeiture with respect to the Restricted Units, the
Company will issue to me Common Shares of the Company equal to the number of
Restricted Units that have so vested. Notwithstanding the foregoing, to the
extent the market value of those Common Shares on the Vesting Date exceeds the
200% of the market value of an equal number of Common Shares on the Effective
Date, the number of Restricted Units with a value equal to the excess shall be
forfeited by me, and I will not be entitled to any Common Shares or other
payment with respect to those Units.

 

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If any Restricted Units are forfeited for any reason, I understand that I will
not be entitled to any issuance of Common Shares or other payment in respect of
any Restricted Units so forfeited. For purposes of this Agreement, market value
is to be determined using the closing price of the Company’s Common Shares on
the New York Stock Exchange.
The Committee reserves the right to decide, in the exercise of its sole
discretion, to what extent my leaves of absence for government or military
service, illness, temporary disability, or other reasons shall not be deemed to
be an interruption of continuous employment, and to accelerate the vesting of
any Units in its sole discretion.
     3. Non-Transferability. The Restricted Units shall be non-transferable. I
agree not to make, or attempt to make, any sale, assignment, transfer or pledge
of any Restricted Units.
     4. Reorganizations, etc. In the event of a reorganization, merger,
consolidation, reclassification, recapitalization, combination or exchange of
shares, stock split, stock dividend, rights offering or other event affecting
the Company’s Common Shares, the number of Restricted Units shall be equitably
adjusted by the Committee so as to reflect that change.
     5. Dividend Equivalents and Voting Rights. I acknowledge that there are no
voting or dividend rights associated with the Restricted Units such as those
available to holders of Common Shares of the Company.
     6. Tax Withholdings. I hereby authorize the Company to withhold from any
Common Shares or amounts otherwise payable to me, or any of my successors in
interest, such federal, state, local or foreign taxes as may be required by law
in connection with the award to me of Restricted Units or the lapse of the
possibility of forfeiture thereof. I agree that if such amounts are
insufficient, I will pay or make arrangements satisfactory to the Company for
payment of those taxes.
     7. No Rights to Continued Employment. I acknowledge that the Award does not
in any way entitle me to continued employment with the Company for the period
during which the possibility of forfeiture continues or for any other period,
and does not limit or restrict any right the Company otherwise may have to
terminate my employment.
     8. Competition by Employee. I expressly acknowledge and agree that in the
event that I voluntarily leave the employment of the Company or a subsidiary or
affiliate and within one year after the vesting of the Restricted Units enter
into an activity as employee, agent, officer, director, principal or proprietor
which, in the sole judgment of the Committee, is in competition with the Company
or a subsidiary, the amount of the total fair market value of such vested
Restricted Units as of the vesting date shall inure to the benefit of the
Company and I agree to promptly pay the same to the Company, unless the
Management Committee in its sole discretion shall determine that such action by
me is not inimical to the best interests of the Company or its affiliates or
subsidiaries.
     9. Change of Control. Notwithstanding anything in this Agreement to the
contrary, effective upon a Change of Control of the Company (as defined below),
the Restricted Units

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shall vest and the forfeiture restrictions referred to in Paragraph 2 hereof
shall lapse. For the purpose of this Agreement, a “Change of Control” shall
mean:

  A.   The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 25% or more of either (i) the then outstanding common shares of the Company
(the “Outstanding Common Shares”) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this subsection, the following acquisitions shall
not constitute a Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, or (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company; or     B.   Individuals who, as of
the date hereof, constitute the Board (the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board; provided, however, that
any individual becoming 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 two-thirds of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board; or     C.   Consummation by the Company of a reorganization,
merger or consolidation or sale or other disposition of all or substantially all
of the assets of the Company or the acquisition of assets of another corporation
(a “Business Combination”), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Common Shares and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 55% of,
respectively, the then outstanding common shares and the combined voting power
of the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Common Shares and Outstanding Company
Voting Securities, as the case may be, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such corporation resulting
from such Business Combination) beneficially owns, directly or indirectly, 25%
or more of, respectively, the then outstanding common shares of the corporation
resulting from such Business

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      Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or

  D.   Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have
occurred for the purposes of this Agreement as a result of any transaction or
series of transactions which I, or any entity in which I am a partner, officer
or more than 50% owner, initiate, if immediately following the transaction or
series of transactions that would otherwise constitute a Change of Control, I,
either alone or together with other individuals who are executive officers of
the Company immediately prior thereto, beneficially own, directly or indirectly,
more than 10% of the then outstanding common shares of the Company or the
corporation resulting from the transaction or series of transactions, as
applicable, or of the combined voting power of the then outstanding voting
securities of the Company or such resulting corporation.
     10. Miscellaneous. Unless otherwise expressly provided herein, terms
defined in the Plan shall have the same meanings when used in this Agreement.
The Committee shall have the right at any time in its sole discretion to amend,
alter, suspend, discontinue or terminate any Restricted Units without my
consent. Also, the Restricted Units shall be null and void to the extent the
grant of Restricted Units or the lapse of restrictions thereon is prohibited
under the laws of the country of my residence. The Committee may, in
circumstances determined in its sole discretion, provide for the lapse of the
above restrictions at earlier dates. The use of the masculine gender shall be
deemed to include the feminine gender. In the event of a conflict between this
Agreement and the Plan, this Agreement shall control. This Agreement represents
the entire understanding between us on the subject hereof and shall be governed
in accordance with Ohio law, without giving effect to conflict of law
principles.

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