<PAGE>

                                                                  EXHIBIT 10 (I)

                                EATON CORPORATION

                         2007 ANNUAL REPORT ON FORM 10-K

                                   ITEM 15 (B)

                              LIMITED EATON SERVICE

                     SUPPLEMENTAL RETIREMENT INCOME PLAN II

     The Limited Eaton Service Supplemental Retirement Income Plan II (herein
referred to as the "Plan"), an unfunded, nonqualified deferred compensation plan
adopted by Eaton Corporation (the "Company") on December 8, 2004, for certain of
its executives, is set forth below as amended and restated effective January 1,
2008, and such other dates as may be provided herein.

                                    ARTICLE I

                               PURPOSE OF THE PLAN

     Upon becoming employed by the Company, certain key executives may have
foregone retirement benefits from their former employer and may not be able to
earn adequate pension benefits from the Company. The Company believes that it is
in the best interest of the Company to be able to attract and retain such
mid-career executives. The purpose of the Plan is to provide each such executive
with retirement income in an amount as set forth in Article IV, and thereby
provide a total pension benefit that is comparable to the benefit the executive
would have received if he or she had not agreed to the mid-career change in
employment.

                                   ARTICLE II

                                   ELIGIBILITY

     Any executive of the Company designated by the Committee shall be eligible
to participate under the Plan (a "Participant").

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                                   ARTICLE III

                                   DEFINITIONS

     As used in the Plan the following definitions shall apply:

     "Average Final Annual Compensation." The Participant's Average Final Annual
Compensation determined as if he or she is eligible to participate under
Appendix A of the Pension Plan.

     "Board." The Board of Directors of the Company.

     "Cause." For purposes of this Plan, the Company shall have "Cause" to
terminate the Participant's employment upon (i) the willful and continued
failure by the Participant to substantially perform the Participant's duties
with the Company (other than any such failure resulting from the Participant's
incapacity due to physical or mental illness), after a demand for substantial
performance is delivered to the Participant by the Board which specifically
identifies the manner in which the Board believes that the Participant has not
substantially performed the Participant's duties, or (ii) the willful engaging
by the Participant in gross misconduct materially and demonstrably injurious to
the Company. For purposes of this definition, no act, or failure to act, on the
Participant's part shall be considered "willful" unless done, or omitted to be
done, by the Participant not in good faith and without reasonable belief that
the Participant's action or omission was in the best interest of the Company.
Notwithstanding the foregoing, the Participant's employment shall not be deemed
to have been terminated for Cause unless and until there shall have been
delivered to the Participant a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice to the Participant and an opportunity for the Participant,
together with the Participant's counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Participant was guilty of
conduct set forth above in clauses (i) or (ii) of this definition and specifying
the particulars thereof in detail.


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     "Change in Control." A "Change in Control" shall be deemed to have occurred
if (i) a tender offer shall be made and consummated for the ownership of
securities of the Company representing 25 percent or more of the combined voting
power of the Company's then outstanding voting securities, (ii) the Company
shall be merged or consolidated with another corporation and as a result of such
merger or consolidation less than 55 percent of the outstanding voting
securities of the surviving or resulting corporation shall be owned in the
aggregate by the former shareholders of the Company, other than affiliates
(within the meaning of the Securities Exchange Act of 1934 (the "Exchange Act"))
of any party to such merger or consolidation, as the same shall have existed
immediately prior to such merger or consolidation, (iii) the Company shall sell
substantially all of its assets to another corporation which is not a wholly
owned subsidiary of the Company, (iv) any "person" (as such term is used in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act) is or becomes the beneficial
owner, directly or indirectly, of securities of the Company representing 25
percent or more of the combined voting power of the Company's then outstanding
securities; or (v) during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof unless the election, or the nomination
for election by the Company's shareholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period. For purposes of the Plan, ownership of
voting securities shall take into account and include ownership as determined by
applying the provisions of Rule 13d-3(d)(1)(i) of the Exchange Act (as then in
effect).

     "Committee." The Compensation and Organization Committee of the Board.

     "Credited Service." The service credited to a Participant as "Service"
under the Pension Plan.

     "Disability." Any termination of employment which entitles the Participant
to a disability benefit under the Pension Plan.


                                        3

<PAGE>

     "Good Reason." Any termination of employment under the following
circumstances shall be for "Good Reason":

     (i) without the Participant's express written consent, the assignment to
     the Participant of any duties inconsistent with the Participant's
     positions, duties, responsibilities and status with the Company immediately
     prior to a Change in Control, or a change in the Participant's reporting
     responsibilities, titles or offices as in effect immediately prior to a
     Change in Control, or any removal of the Participant from or any failure to
     re-elect the Participant to any of such positions, except in connection
     with the termination of the Participant's employment for Cause, Disability
     or as a result of the Participant's death;

     (ii) a reduction by the Company in the Participant's base salary as in
     effect immediately prior to the Change in Control or as the same may be
     increased from time to time thereafter; or the failure by the Company to
     increase such base salary each year after a Change in Control by an amount
     which at least equals, on a percentage basis, the average annual percentage
     merit increase in the Participant's base salary during the five (5) full
     calendar years immediately preceding a Change in Control;

     (iii) a failure by the Company to continue the Participant's participation
     in the Plan, the Company's Executive Incentive Compensation Plan, Deferred
     Incentive Compensation Plan II, Executive Strategic Incentive Plan,
     Incentive Compensation Deferral Plan II, Excess Benefits Plan II and
     Supplemental Benefits Plan II, as each plan may be modified from time to
     time but substantially in the form presently in effect (collectively, the
     "Plans"), on at least the basis as in effect immediately prior to the
     Change in Control or to pay Participant any amounts earned under the Plans
     in accordance with the terms of the Plans.

     (iv) the relocation of the Company's principal executive offices to a
     location outside Cuyahoga County, Ohio, or any county adjoining Cuyahoga
     County, Ohio, or the Company's requiring the Participant to be based
     anywhere other than the Company's principal executive offices or the
     location where the Participant is based immediately


                                        4

<PAGE>

     prior to the Change in Control except for required travel on the Company's
     business to an extent substantially consistent with the Participant's
     business travel obligations in effect immediately prior to the Change in
     Control, or, in the event the Participant consents to any such relocation
     of the Company's principal executive offices, the failure by the Company to
     pay (or reimburse the Participant for) all reasonable moving expenses
     incurred by the Participant relating to a change of the Participant's
     principal residence in connection with such relocation and to indemnify the
     Participant against any loss (defined as the difference between the actual
     sale price of such residence and the higher of (a) the Participant's
     aggregate investment in such residence or (b) the fair market value of such
     residence as determined by any real estate appraiser designated by the
     Participant and reasonably satisfactory to the Company) realized in the
     sale of the Participant's principal residence in connection with any such
     change of residence;

     (v) the failure by the Company to continue in effect any benefit or
     compensation plan (including but not limited to the Plan), pension plan,
     life insurance plan, health and accident plan or disability plan in which
     the Participant is participating at the time of a Change in Control (or
     plans providing the Participant with substantially similar benefits), the
     taking of any action by the Company which would adversely affect the
     Participant's participation in or materially reduce the Participant's
     benefits under any of such plans or deprive the Participant of any material
     fringe or personal benefit enjoyed by the Participant at the time of the
     Change in Control, or the failure by the Company to provide the Participant
     with the number of paid vacation days to which the Participant is then
     entitled on the basis of years of service with the Company in accordance
     with the Company's normal vacation policy in effect immediately prior to
     the Change in Control;

     (vi) the failure of the Company to obtain the agreement by any successor
     (whether direct or indirect, by purchase, merger, consolidation or
     otherwise) to all or substantially all of the assets of the Company, by
     agreement in form and substance satisfactory to Participant, to expressly
     assume this Plan and the obligations of the Company hereunder; or


                                        5

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     (vii) any purported termination of the Participant's employment which is
     not effected pursuant to a Notice of Termination satisfying the
     requirements of a Notice of Termination as herein defined (and, if
     applicable, the definition of "Cause" as herein defined); and for purposes
     of the Plan, no such purported termination shall be effective.

     "Notice of Termination." Any termination of the Participant's employment by
the Company for Cause or Disability or by the Participant for Good Reason shall
be communicated by written Notice of Termination to the other party hereto. For
purposes of this Plan, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Plan relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Participant's employment under the provision so
indicated.

     "Pension Plan." The Pension Plan for Eaton Corporation Employees.

     "Supplement." The annual amount of retirement income payable to the
Participant in accordance with the provisions of the Plan. This amount is
calculated as follows:

     (a) the Participant's Average Final Annual Compensation, multiplied by the
     applicable percentage from Table A in Section 4.01 associated with the
     Participant's age and service, MINUS

     (b) the Participant's annual benefits payable from the (i) Pension Plan,
     (ii) the Limited Eaton Service Supplemental Retirement Income Plan, the
     Supplemental Benefits Plan, and the Excess Benefits Plan (the
     "Grandfathered Offset Benefit"), and (iii) the Supplemental Benefits Plan
     II and the Excess Benefits Plan II (collectively, the "Offset Benefits"),
     assuming payment in the form of a single life annuity based on factors and
     assumptions used for such purpose under the Pension Plan, whether or not
     payment is or can be made in such form under any of the arrangements listed
     in this paragraph (b).

The Grandfathered Offset Benefit shall be determined with reference to the
present value of the aggregate amounts to which he would have been entitled
under the arrangements listed in clause


                                        6

<PAGE>

(ii) of this paragraph (b) if the Participant had voluntarily terminated
services without Cause on December 31, 2004, and received a payment of the
benefits in the form with the maximum value available from those arrangements on
the earliest possible date allowed thereunder to receive a payment of benefits
following a termination of services. Notwithstanding the foregoing, the
Grandfathered Offset Benefit may increase to reflect the present value of the
benefits the Participant actually becomes entitled to, in the form and at the
time actually paid, determined under the terms of the arrangements listed in
clause (ii) of paragraph (b), as in effect on October 3, 2004, without regard to
any further services rendered by the Participant after December 31, 2004, or any
other events affecting the amount of or the entitlement to benefits (other than
a participant election with respect to the time or form of an available
benefit). For purposes of calculating the present value of a benefit under this
paragraph, reasonable actuarial assumptions and methods must be used.

     "Termination of Employment." The date the Participant's Service ends under
the Pension Plan.

                                   ARTICLE IV

                              AMOUNT OF SUPPLEMENT

     Section 4.01. Calculation of Supplement. The annual retirement income
payable under the Plan shall be calculated by reference to Table A below. There
is no amount under age 55 and the full percentage available is earned at
attainment of age 62.

                                     Table A

                 Percentage of Average Final Annual Compensation

<TABLE>
<CAPTION>
                       For Participants with Less Than 15 Years of Credited Service
                                                  Months
       ---------------------------------------------------------------------------------------------
Age*     0       1       2       3       4       5       6       7       8       9      10      11
----   -----   -----   -----   -----   -----   -----   -----   -----   -----   -----   -----   -----
<S>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
 55    25.0%   25.3%   25.5%   25.8%   26.0%   26.3%   26.5%   26.8%   27.0%   27.3%   27.5%   27.8%
 56    28.0%   28.3%   28.5%   28.8%   29.0%   29.3%   29.5%   29.8%   30.0%   30.3%   30.5%   30.8%
 57    31.0%   31.3%   31.5%   31.8%   32.0%   32.3%   32.5%   32.8%   33.0%   33.3%   33.5%   33.8%
 58    34.0%   34.3%   34.5%   34.8%   35.0%   35.3%   35.5%   35.8%   36.0%   36.3%   36.5%   36.8%
 59    37.0%   37.3%   37.5%   37.8%   38.0%   38.3%   38.5%   38.8%   39.0%   39.3%   39.5%   39.8%
 60    40.0%   40.2%   40.3%   40.5%   40.7%   40.8%   41.0%   41.2%   41.3%   41.5%   41.7%   41.8%
 61    42.0%   42.2%   42.3%   42.5%   42.7%   42.8%   43.0%   43.2%   43.3%   43.5%   43.7%   43.8%
 62    44.0%
</TABLE>


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<PAGE>

<TABLE>
<CAPTION>
                       For Participants with At Least 15 Years of Credited Service
                                                  Months
       ---------------------------------------------------------------------------------------------
Age*     0       1       2       3       4       5       6       7       8       9      10      11
----   -----   -----   -----   -----   -----   -----   -----   -----   -----   -----   -----   -----
<S>    <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
 55    28.5%   28.8%   29.1%   29.4%   29.7%   30.0%   30.3%   30.5%   30.8%   31.1%   31.4%   31.7%
 56    32.0%   32.3%   32.6%   32.9%   33.2%   33.5%   33.8%   34.0%   34.3%   34.6%   34.9%   35.2%
 57    35.5%   35.8%   36.1%   36.4%   36.7%   37.0%   37.3%   37.5%   37.8%   38.1%   38.4%   38.7%
 58    39.0%   39.3%   39.6%   39.9%   40.2%   40.5%   40.8%   41.0%   41.3%   41.6%   41.9%   42.2%
 59    42.5%   42.8%   43.1%   43.4%   43.7%   44.0%   44.3%   44.5%   44.8%   45.1%   45.4%   45.7%
 60    46.0%   46.2%   46.3%   46.5%   46.7%   46.8%   47.0%   47.2%   47.3%   47.5%   47.7%   47.8%
 61    48.0%   48.2%   48.3%   48.5%   48.7%   48.8%   49.0%   49.2%   49.3%   49.5%   49.7%   49.8%
 62    50.0%
</TABLE>

*    Age at Termination of Employment.

     Section 4.02. No Interest Created. Neither the Participant nor his or her
surviving spouse shall have any interest in any specific asset of the Company,
including policies of insurance. The Participant and his or her surviving spouse
or beneficiary shall have only the right to receive the benefits provided under
the Plan.

     Section 4.03. Determination of Amount. The Supplement shall be calculated
assuming that the Offset Benefits commence on the same date as the Supplement.

     Section 4.04. Form of Payment. The Supplement shall be paid to the
Participant in a single sum payment. The benefit payable shall be actuarially
adjusted by using the same actuarial factors as used under the Pension Plan for
converting the normal form of benefit to an actuarially equivalent optional
benefit.

     Section 4.05. Benefit Payment Date. The amount of the benefit payable to a
Participant under the Plan shall be calculated as of his "calculation date"
which is the first day of the month next following the date of his separation
from service (within the meaning of Section 409A of the Code, meaning that a
Participant whose level of bona fide services is permanently decreased to no
more than twenty (20) percent of the average level of bona fide services
performed over the preceding 36-month period shall incur a separation from
service for purposes of the Plan) on or after the date he has attained age 55.
Such amount shall be credited with interest based on the "applicable interest
rate" determined under Section 417(e) of the Code (in the manner used under the
Pension Plan) until his benefit payment date determined under this Section 4.05.
A Participant's benefit shall be paid on or about the first day of the third
month next following the


                                        8

<PAGE>

date of his separation from service (within the meaning of Section 409A of the
Code, as further described above) on or after the date he has attained age 55.
Notwithstanding the foregoing, in the case of a Participant who is determined by
the Company to be a "specified employee" within the meaning of Section 409A of
the Code and applicable Treasury regulations, payment shall not in any event be
made until the first business day of the month which is six (6) months after the
date of his separation from service hereunder (or, if earlier, the date of death
of the Participant). If the Participant receives payment of the benefit
hereunder before the normal benefit commencement date under the Pension Plan,
the benefit payable under Section 4.01 shall also be reduced by applying the
same factors that would be applied for such purpose under the Pension Plan. In
the event a Participant becomes entitled to an additional benefit under the Plan
after his calculation date (by reason of the additional accrual of benefits
under the Pension Plan while on long term disability, for example), the amount
of any such additional benefit shall be calculated as of December 31 of each
calendar year beginning with the year following the year in which his initial
calculation date falls and shall be paid to him within the ninety (90) day
period following.

                                    ARTICLE V

                              PAYMENT OF SUPPLEMENT

     Section 5.01. General Obligation and Vesting. The Company will pay the
Supplement to Participant in a single sum on the date determined under Section
4.05. Notwithstanding anything herein to the contrary, the Company shall have no
obligation to pay the Supplement to the Participant if the Participant
terminates employment with the Company (a) for any reason prior to age 55, or
(b) with less than ten (10) years of Credited Service unless the Participant is
age 65 at the time of termination of employment.

     Section 5.02. Death. If the Participant dies after attaining age 55 and
while employed by the Company (regardless of the Participant's Credited
Service), the Company will pay a benefit to the Participant's surviving spouse
calculated in accordance with the Plan. The surviving spouse will receive fifty
(50) percent of the benefit that would have been payable to the Participant if
the Participant had not less than ten (10) years of Credited Service and
terminated on the date of death, payable in a single sum within ninety (90) days
following the date of death.


                                        9

<PAGE>

Notwithstanding the foregoing, a Participant may elect a beneficiary other than
his or her spouse (as permitted under the Pension Plan except that no spousal
consent shall be required), with the benefit amount determined in the same
manner as for a surviving spouse and payable in a single sum within ninety (90)
days following the date of death. For this single sum calculation, the nonspouse
beneficiary shall be assumed to have the same age as the Participant. If a
Participant dies after Termination of Employment but before commencement of
benefits, the payment due to the surviving spouse or other beneficiary shall be
calculated using the method described above.

                                   ARTICLE VI

                            COVENANTS OF PARTICIPANT

     By accepting payments hereunder the Participant covenants that for a period
of three (3) years after the Participant leaves the employment of the Company,
he or she will not engage in any activities which, in the opinion of the
Company, are in competition with the Company or any of its subsidiaries without
first obtaining the written consent of the Company; provided, however, that this
provision shall not apply if, within five (5) years after a Change in Control,
the Participant's employment with the Company is terminated by the Participant
for Good Reason or by the Company without Cause.

                                   ARTICLE VII

                                LOSS OF BENEFITS

     If the Participant fails to observe or perform any of the covenants by the
Participant contained herein in any material respect, the Participant shall
forfeit all rights which he or she may have to any benefits for which provision
is made herein.

                                  ARTICLE VIII

                                  MISCELLANEOUS

     Section 8.01. Assignment. Except as otherwise provided herein, neither the
Participant nor any beneficiary for which provision is made herein shall have
the right to sell, alienate,


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<PAGE>

anticipate, assign, transfer, pledge, encumber or otherwise convey the right to
receive the Supplement.

     Section 8.02. No Contract of Employment. The Plan shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Company to discharge the Participant,
or restrict the right of the Participant to terminate his or her employment with
the Company.

     Section 8.03. Security. The rights of the Participant under the Plan shall
be solely those of an unsecured creditor of the Company. Any securities or fixed
or other assets acquired by the Company in order to be able to satisfy the
liabilities assumed by it hereunder, shall not be deemed to be held under any
trust for the benefit of the Participant or to be considered security for the
performance of the obligations of the Company but shall be, and remain, general,
unpledged, unrestricted assets of the Company.

     Section 8.04. Governing Law. The Plan shall be subject to and construed
under the laws of the State of Ohio, without giving effect to any conflicts of
laws principles thereunder.

     Section 8.05. Amendment and Termination. The Company may at any time amend
or terminate the Plan. Notwithstanding the foregoing, upon the occurrence of a
Change in Control, no amendment or termination shall, without the consent of the
Participant, alter or impair any vested rights of the Participant under the Plan
based upon the Participant's age and years of Credited Service at the time of
such amendment or termination or the manner in which amounts are to be paid to
the Participant or his or her surviving spouse or beneficiary under the Plan.

     Section 8.06. Plan Termination Preceding Change in Control. The Board shall
have the authority, in its sole discretion, to terminate the Plan and pay each
Participant's entire benefit to the Participant or, if applicable, his
Beneficiary, pursuant to an irrevocable action taken by the Board within the
thirty (30) days preceding a change in control of the Company (within the
meaning of Section 409A of the Code), provided that this Section 8.06 will only
apply to a payment under the Plan if all agreements, methods, programs, and
other arrangements sponsored


                                       11

<PAGE>

by the service recipient immediately after the time of the change in control
event with respect to which deferrals of compensation are treated as having been
deferred under a single plan within the meaning of Treasury Regulation Section
1.409A-1(c) (2) are terminated and liquidated with respect to each Participant
that experienced the change in control event, so that under the terms of the
termination and liquidation all such Participants are required to receive all
amounts of compensation deferred under the terminated agreements, methods,
programs, and other arrangements within 12 months of the date the service
recipient irrevocably takes all necessary action to terminate and liquidate the
agreements, methods, programs and other arrangements. Solely for purposes of
this Section 8.06, where the change in control event results from an asset
purchase transaction, the applicable service recipient with the discretion to
liquidate and terminate the agreements, methods, programs, and other
arrangements is the service recipient that is primarily liable immediately after
the transaction for the payment of the deferred compensation.

     Section 8.07. American Jobs Creation Act. The Plan is intended to provide
for the deferral of compensation in accordance with the provisions of Section
409A of the Code and Treasury Regulations and published guidance issued pursuant
thereto. Accordingly, the Plan shall be construed in a manner consistent with
those provisions and may at any time be amended in the manner and to the extent
determined necessary or desirable by the Company to reflect or otherwise
facilitate compliance with such provisions with respect to amounts deferred on
or after January 1, 2005, including as contemplated by Section 885(f) of the
American Jobs Creation Act of 2004.

<PAGE>

                              APPROVAL AND ADOPTION

The Limited Eaton Service Supplemental Retirement Income Plan II

as amended and restated in the form attached hereto, is hereby approved and
adopted.


-------------------------------------     Date: October 27, 2007
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