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                                Eaton Corporation
                         2004 Annual Report on Form 10-K
                                   Item 15(c)
                                 Exhibit 10(aa)

                    EATON CORPORATION EXCESS BENEFITS PLAN II

     The Eaton Corporation Excess Benefits Plan II, an unfunded, nonqualified
deferred compensation plan adopted December 8, 2004, is set forth below.

     1. Purpose.  The purpose of the Excess Benefits Plan is to provide benefits
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in excess of the limitations under Section 415 of the Code for employees who
participate as salaried participants under a Pension Plan sponsored by the
Corporation or one of its operating subsidiaries.

     2. Definitions.  The following definitions are used throughout the Plan.
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     (a) "Benefits Committee" means the Pension Administration Committee
comprised of corporate officers.

     (b) "Board of Directors" means the Board of Directors of the Corporation.

     (c) "Change in Control" means a change in control of the Corporation,
determined in accordance the provisions of Section 409A of the Code and Treasury
Regulations and published guidance issued pursuant thereto.

     (d) "Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time.

     (e) "Committee" means the Compensation and Organization Committee of the
Board of Directors.

     (f) "Corporation" means Eaton Corporation, an Ohio corporation.

     (g) "Lump Sum Payment" has the meaning set forth in Section 7(b).
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     (h) "Participant" means a participant in the Pension Plan who is eligible
to receive benefits under the Plan. The term "Participant" shall include the
beneficiary of a deceased Participant.

     (i) "Pension Plan" means the Pension Plan for Eaton Corporation Employees
sponsored by the Corporation, which is a defined benefit plan intended to
qualify under Section 401(a) of the Code, and each other defined benefit plan
sponsored by a subsidiary of the Corporation that is intended to qualify under
section 401(a) of the Code.

     (j) "Plan" or "Excess Benefits Plan II" means the Eaton Corporation Excess
Benefits Plan II as amended from time to time.

     3. Eligibility.  A Participant who is eligible to receive a benefit under
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the Pension Plan shall also be eligible to receive a benefit in an amount
determined under Section 4.

     4. Excess Benefits.  A Participant who is eligible to receive a benefit
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under the Pension Plan shall be entitled to receive a benefit under the Plan in
an amount equal to the difference between (i) and (ii), where:

          (i) equals the aggregate amount of monthly income payable to the
     Participant under the Pension Plan on the normal benefit commencement date
     specified in the Pension Plan as determined under the normal retirement
     benefit formula of the Pension Plan before applying any provision reducing
     pension benefits because of the maximum benefit limitations under Section
     415 of the Code; and

          (ii) equals the aggregate amount of monthly income determined in
     paragraph (i) after applying the maximum benefit limitations of Section 415
     of the Code.

     Notwithstanding the foregoing, in no event shall the benefit hereunder
duplicate, in whole or in part, the benefit provided under the Eaton Corporation
Supplemental Benefits Plan, the Eaton Corporation Supplemental Benefits Plan II,
or the Eaton Corporation Excess Benefits Plan.


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     5. Vesting.  Subject to the rights of general creditors as set forth in
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Section 8 and the right of the Corporation to discontinue the Plan as provided
in Section 10(c), a Participant shall have a vested and nonforfeitable interest
in the benefit payable under Section 4 to the same extent and in the same manner
as the Participant's benefit is vested under the Pension Plan.

     6. Commencement of Benefits.  The benefit payable to a Participant under
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Section 4 shall be paid or shall begin on the first day of the month following
the later of his separation from service (within the meaning of Section 409A of
the Code) or the date he is first eligible for commencement of benefits under
the Pension Plan (whether or not he has applied for commencement of benefits
thereunder), except that in the case of a Participant who is a key employee as
defined in Section 416(i) of the Code and applicable Treasury regulations,
payment shall not in any event be made or begin until the first business day of
the month which is at least six months after the date of his separation from
service (or, if earlier, the date of death of the Participant). If the
Participant receives or begins to receive an actuarially reduced benefit before
the normal benefit commencement date under the Pension Plan, the benefit payable
under Section 4 shall also be actuarially reduced by applying the same actuarial
factors that are applied under the Pension Plan. In the event of the termination
of the Pension Plan and the distribution to a Participant of a fully-paid,
individual annuity contract or a single sum payment, payments received under
such contract or the single sum payment shall be deemed to be benefits paid
under the Pension Plan for purposes of the Plan.

     7. Form of Benefits.
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     (a) The benefit payable under Section 4 shall be paid to the Participant
either in a single sum payment or in a form of annuity available under the terms
of the Pension Plan (which forms of annuity shall be limited to an annuity for
the life of a Participant, a 120-month certain period and life annuity, a joint
and 50% surviving spouse annuity, and a joint and 100% surviving spouse


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annuity), as elected by the Participant in accordance with Treasury guidance
pursuant to Section 409A of the Code, provided that in the event no election has
been made with respect to any portion or all of a benefit payable under the
Plan, such benefit shall be paid in a single sum payment. Whether the
Participant elects an optional annuity form of benefit available under the terms
of the Pension Plan or a single sum payment, the benefit payable under Section 4
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. A Participant need not receive the benefit payable
under Section 4 in the same form as the form of benefit elected by the
Participant under the Pension Plan. Notwithstanding the foregoing, prior to
commencement of benefits a Participant may change an election from one available
form of annuity payments to another form of annuity payments, but only to the
extent permitted in Treasury regulations under Section 409A of the Code.

     (b) If the Participant has a vested interest under the Plan and dies prior
to commencement of any benefit under the Plan, the Company will pay a benefit to
the Participant's surviving spouse calculated in accordance with the Plan. This
benefit shall be calculated in the same manner provided under the Pension Plan.
Notwithstanding the foregoing, a Participant may designate 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 being determined in
the same manner as provided under the Pension Plan and payable in a lump sum
form of payment only.

     (c) Upon the date of a Change in Control, the Corporation shall make an
immediate Lump Sum Payment to each Participant.

     "Lump Sum Payment" means a single payment in cash to a Participant of his
or her vested benefit determined in accordance with Section 4, actuarially
adjusted by using the same actuarial factors as under the Pension Plan for
converting the normal form of benefit to an actuarially


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equivalent optional benefit. These payments would be based upon "final average
annual compensation" and "years of service" as they exist upon the date of the
Change in Control, and would be based upon the assumption (only for purposes of
computing this payment) that the employee would retire upon that same date (even
though the Participant might not otherwise be of retirement age).

     Notwithstanding anything herein to the contrary, no Lump Sum Payment shall
be paid to any Participant herein who ceases to be an employee of the
Corporation prior to attaining the age at which he or she is eligible to take
early retirement under the Pension Plan at his or her option.

     8. Funding of Benefits.
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     (a) The Plan shall be unfunded. All benefits payable under the Plan shall
be paid from the Corporation's general assets, and nothing contained in the Plan
shall require the Corporation to set aside or hold in trust any funds for the
benefit of a Participant, who shall have the status of a general unsecured
creditor with respect to the Corporation's obligation to make payments under the
Plan. Any funds of the Corporation available to pay benefits under the Plan
shall be subject to the claims of general creditors of the Corporation and may
be used for any purpose by the Corporation.

     (b) Notwithstanding the provisions of subsection (a), the Corporation may,
at the direction, and in the absolute discretion, of the Benefits Committee,
transfer to the trustee of one or more irrevocable domestic trusts established
in the United States for the benefit of one or more Participants assets from
which all or a portion of the benefits provided under the Plan will be
satisfied, provided that such assets held in trust shall at all times be subject
to the claims of general unsecured creditors of the Corporation and no
Participant shall at any time have a prior claim to such assets.


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     9. Administration of the Plan.  The Benefits Committee shall administer the
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Plan and shall keep a written record of this action and proceedings regarding
the Plan and all dates, records and documents relating to its administration of
the Plan. The Benefits Committee is authorized to interpret the Plan, to make,
amend and rescind such rules as it deems necessary for the proper administration
of the Plan, to make all other determinations necessary or advisable for the
administration of the Plan and to correct any defect or supply any omission or
reconcile any inconsistency in the Plan in the manner and to the extent that the
Benefits Committee deems desirable to carry the Plan into effect. The powers and
duties of the Benefits Committee shall include, without limitation, the
following:

     (a) Determining the amount of benefits payable to Participants and
authorizing and directing the Corporation with respect to the payment of
benefits under the Plan;

     (b) Construing and interpreting the Plan whenever necessary to carry out
its intention and purpose and making and publishing such rules for the
regulation of the Plan as are not inconsistent with the terms of the Plan; and

     (c) Compiling and maintaining all records it determines to be necessary,
appropriate or convenient in connection with the administration of the Plan.

     No member of the Benefits Committee shall vote on any matter relating
specifically to such member. In the event that a majority of the members of the
Benefits Committee will be specifically affected by any action proposed to be
taken (as opposed to being affected in the same manner as each other Participant
in the Plan), such action shall be taken by the Compensation Committee.

     10. Miscellaneous.
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     (a) Nothing in the Plan shall confer upon a Participant the right to
continue in the employ of the Corporation or an affiliate of the Corporation or
shall limit or restrict the right of the


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Corporation or any affiliate to terminate the employment of a Participant at any
time or without cause.

     (b) Neither the Corporation nor any Participant hereunder shall assign,
transfer or delegate this Plan or any rights or obligations hereunder except as
expressly provided herein. Without limiting the generality of the foregoing, no
right or interest under this Plan of a Participant shall be assignable or
transferable in any manner or be subject to alienation, anticipation, sale,
pledge, encumbrance or other legal process or in any manner be liable for or
subject to the debts or liabilities of any such Participant. If any Participant
shall attempt to or shall transfer, assign, alienate, anticipate, sell, pledge
or otherwise encumber his benefits hereunder or any part thereof, or if by
reason of his bankruptcy or other event happening at any time such benefits
would devolve upon anyone else or would not be enjoyed by him, then the
Corporation, acting through the Benefits Committee, in its discretion, may
terminate his interest in any such benefit to the extent the Corporation
considers necessary or advisable to prevent or limit the effects of such
occurrence. Termination shall be effected by filing a written "termination
declaration" with the Plan's records and making reasonable efforts to deliver a
copy to the Participant (the "Terminated Participant") whose interest is
adversely affected.

     As long as the Terminated Participant is alive, any benefits affected by
the termination shall be retained by the Corporation and, in the Corporation's
sole and absolute judgment, may be paid to or expended for the benefit of the
Terminated Participant, his spouse, his children or any other person or persons
in fact dependent upon him in such a manner as the Corporation shall deem
proper. Upon the death of the Terminated Participant, all benefits withheld from
him and not paid to others in accordance with the preceding sentence shall be
paid to the Terminated Participant's then living descendants, including adopted
children, per stirpes, or, if there are none then living, to his estate.
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     (c) The Plan may be amended at any time by the Benefits Committee provided
such amendment does not have the effect of increasing, directly or indirectly,
the benefit of any Participant. The Plan may also be amended or terminated by
the Board of Directors at any time, and any amendment adopted by the Board of
Directors shall supersede any prior or later amendment adopted by the Benefits
Committee that is inconsistent with the action of the Board of Directors.
Subject to the provisions of Section 10(d), no amendment shall have the effect
of decreasing or impairing a Participant's accrued benefit, including the form
of payment. No amendment may amend or modify the preceding sentence.

     (d) 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 Corporation 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. Moreover, to the extent permitted in guidance issued by the Secretary of
the Treasury and in accordance with procedures established by the Committee, a
Participant may be permitted to terminate participation in the Plan or cancel an
outstanding deferral election with regard to amounts deferred after December 31,
2004. Notwithstanding any provisions of the Plan to the contrary, no otherwise
permissible election or distribution shall be made or given effect under the
Plan that would result in taxation of any amount under Section 409A of the Code.

     (e) The Plan is intended to be an "excess benefit plan" as defined in
Section 3(36) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and exempt from the provisions of Title I of ERISA pursuant to ERISA
Section 4(b)(5). In the event the Plan does


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not qualify for the exemption under ERISA Section 4(b)(5) and it is also
determined by a court of competent jurisdiction or by an opinion of counsel that
the Plan constitutes an employee pension benefit plan within the meaning of
Section 3(2) of ERISA which is not exempt from the provisions of Sections 201,
301 and 401 of ERISA as a plan that provides benefits for "management or highly
compensated" employees within the meaning of such Sections, the Plan shall
terminate, and except for accrued benefits and benefits in pay status, no
further benefits shall accrue or be paid hereunder.

     (f) If any provision in the Plan is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
shall nevertheless continue to full force and effect without being impaired or
invalidated in any way.

     (g) The Plan shall be construed and governed in all respects in accordance
with applicable federal law and, to the extent not preempted by such federal
law, in accordance with the law of the State of Ohio.


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                              APPROVAL AND ADOPTION

The Eaton Corporation Excess Benefits Plan II, in the form attached hereto, is
hereby approved and adopted.


/s/ Susan J. Cook                       Date: December 10, 2004
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Name

Vice President- Human Resource
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Title

/s/ Earl R. Franklin
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Name

Vice President and Secretary
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Title


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