EX-10.2






Exhibit 10.2









January 28, 2009




Eaton Corporation

Eaton Center

1111 Superior Avenue

Cleveland, Ohio 44114



Award of Restricted Shares Under the Eaton Corporation 2008 Stock Plan


Eaton Corporation (the “Company”) has awarded you a number of restricted Common Shares of the
Company effective as of February 24, 2009 (the “Effective Date”) under the terms and conditions of
the Company’s 2008 Stock Plan (the “Plan”). Information concerning the number of restricted shares
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:




     1. Acceptance. You accept the Award on the terms and conditions provided in the Plan
and this Award Agreement.



     2. Restricted Shares. You acknowledge that, as of the Effective Date, this
Award has been granted to you, contingent on the occurrence of any one of the following vesting
events:




	 	a.	 	you leave service on the Company’s Board of Directors (the
“Board”) following two (2) years of continuous service as a member of the
Board; or
	 
	 	b.	 	your service on the Board ends due to your death or
disability at any time following the Effective Date; or
	 
	 	c.	 	you retire from the Board after attaining the mandatory Board
retirement date at any time following the Effective Date; or
	 
	 	d.	 	upon a Change of Control of the Company at any time following
the Effective Date.




Upon the occurrence of any one of the above events, all of the restricted shares which are the
subject of the Award (the “Restricted Shares”) shall immediately vest and become non-forfeitable.




 









 







If the Restricted Shares are forfeited for any reason, you will surrender to the Company any
certificates which you then hold evidencing such shares. You understand that you will not be
entitled to any payment in respect of the Restricted Shares so forfeited.




     3. Transferability. Until the possibility of forfeiture lapses with respect to any of
the Restricted Shares and the Restricted Shares vest, those shares shall be non-transferable. You
agree not to make, or attempt to make, any sale, assignment, transfer or pledge of any of the
Restricted Shares prior to the date on which the possibility of forfeiture with respect to such
shares lapses and the shares vest. Notwithstanding the foregoing provisions of this Paragraph 3,
you are permitted to designate one or more primary and contingent beneficiaries to whom the
restricted Shares will be transferred in the event of your death. The process for designating such
beneficiaries is available through the Eaton Service Center at Fidelity.



     4. Legends, Possession and Reorganization. You acknowledge that the certificates for
the Restricted Shares will bear a legend referring to this Agreement and to the restrictions
contained herein. You further acknowledge that the Company may elect to retain those certificates
in its possession as a means of enforcing these restrictions. 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 and class of the Restricted Shares shall be equitably adjusted so as to reflect that change.
Any new certificates for Restricted Shares shall bear the legends referred to in this Section 4.
No adjustment provided for in this Section 4 shall require the Company to sell or transfer a
fractional share.



     5. Dividends and Voting. If you are the shareholder of record on any record date for
the payment of a dividend on the Restricted Shares, you will be entitled to receive the dividend
when paid, regardless of whether or not the restrictions imposed by Section 2 have lapsed. If you
are the shareholder of record on any record date for the taking of a vote by the shareholders of
the Company, you will be entitled to vote the Restricted Shares regardless of whether or not the
restrictions imposed by Section 2 hereof have lapsed.



     6. Change of Control. 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





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	 	 	 	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 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 as a
result of any transaction or series of transactions which you, or any entity in which you are a
partner, officer or more than 50% owner, initiate, if immediately following the transaction or


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series of transactions that would otherwise constitute a Change of Control, you, either alone or
together with other individuals who are directors or 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.




     7. Miscellaneous. Unless otherwise expressly provided herein, terms defined in the
Plan shall have the same meanings when used in this Agreement. 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 the parties on the subject hereof and shall be governed in accordance with Ohio law.



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