Document:

<PAGE>
                                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
        -------
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.
        -----------

     (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).
<PAGE>
     (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
        -----------
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
        ---------------
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.

                                      -2-
<PAGE>
     5. Vesting.  Subject to the rights of general creditors as set forth in
        -------
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
        ------------------------
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.
        ----------------

     (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

                                      -3-
<PAGE>
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

                                      -4-
<PAGE>
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.
        -------------------

     (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.

                                      -5-
<PAGE>
     9. Administration of the Plan.  The Benefits Committee shall administer the
        --------------------------
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.
         -------------

     (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

                                      -6-
<PAGE>
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.
          -----------

                                      -7-
<PAGE>
     (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

                                      -8-
<PAGE>
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.

                                      -9-
<PAGE>
                              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
-------------------------------------
Name

Vice President- Human Resource
-------------------------------------
Title

/s/ Earl R. Franklin
-------------------------------------
Name

Vice President and Secretary
-------------------------------------
Title

                                      -9-<PAGE>
                                Eaton Corporation
                         2004 Annual Report on Form 10-K
                                   Item 15(c)
                                 Exhibit 10(bb)

                              LIMITED EATON SERVICE

                     SUPPLEMENTAL RETIREMENT INCOME PLAN II

     Eaton Corporation (the "Company") hereby establishes a Supplemental
Retirement Income Plan II (herein referred to as the "Plan") for certain
executives of the Company designated as set forth herein. The Plan is adopted
December 8, 2004, effective January 1, 2005.

                                    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
                                   -----------

     All elected officers of the Company and any other executive of the Company
designated by the Chairman and Chief Executive Officer of the Company shall be
eligible to participate under the Plan (a "Participant").
<PAGE>
                                   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.

                                       2
<PAGE>
     "Change in Control of the Company." A "Change in Control of the Company"
      --------------------------------
shall be determined in accordance the provisions of Section 409A of the Code and
Treasury Regulations and published guidance issued pursuant thereto.

     "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.

     "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 of the Company, or a change in the
     Participant's reporting responsibilities, titles or offices as in effect
     immediately prior to a Change in Control of the Company, 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 of the Company 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 of
     the Company 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 of the Company;

                                       3
<PAGE>
     (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 of the Company 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 prior to the Change in
     Control of the Company 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 of
     the Company, 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

                                       4
<PAGE>
     Change in Control of the Company (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 of the Company, 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
     of the Company;

     (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

     (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.
      ------------

                                       5
<PAGE>
     "Supplement." The annual amount of retirement income or the lump sum
      ----------
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 Pension Plan, the
     Limited Eaton Service Supplemental Retirement Income Plan, the Supplemental
     Benefits Plan, the Supplemental Benefits Plan II, the Excess Benefits Plan,
     and the Excess Benefits Plan II (collectively, the "Offset Benefits"),
     assuming payment in the form of a single life annuity.

     "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>

                                       6
<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 Annual 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 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 (with the exception that this form
shall be available to unmarried Participants only), a 120-month certain period
and life annuity, a joint and 50% surviving spouse annuity, and a joint and 100%
surviving spouse 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 lump sum benefit, 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, provided that the joint and 50% surviving spouse
annuity shall not be reduced from the single life annuity form to reflect the
spousal coverage. A Participant need not receive the Supplement in the same form
as the form of benefit elected by the Participant under the Pension Plan.
Notwithstanding the

                                       7
<PAGE>
foregoing, a Participant may change an election from one available form of
annuity payments to another available form of annuity payments, but only to the
extent permitted in Treasury regulations under Section 409A of the Code.

     Section 4.05. Commencement of Benefits.  The benefit payable to a
                   ------------------------
Participant under the Plan shall be paid or shall begin on the first day of the
month following the later of his or her separation from service (within the
meaning of Section 409A of the Code) or the date he or she is first eligible for
commencement of benefits under the Pension Plan (whether or not he or she 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 or her separation from service (or, if earlier, the date of death of
the Participant).

                                    ARTICLE V
                              PAYMENT OF SUPPLEMENT

     Section 5.01. General Obligation.  The Company will pay the Supplement to
                   ------------------
Participant for life in equal monthly installments, commencing on the first
business day of the month following the month in which Participant retires under
the terms of the Pension Plan after attaining age 55, 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 begin until the first
business day of the month which is at least six months after the date of his or
her separation from service (or, if earlier, the date of death of the
Participant), or on the first business day of the month following the month in
which Participant's employment terminated due to Disability. 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.

                                       8
<PAGE>
     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 50% 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 either a single life
annuity or lump sum, as elected by the Participant. 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 lump sum form of payment only. For this lump
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 of
the Company, 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.

                                       9
<PAGE>
                                  ARTICLE VIII
                           AUTOMATIC LUMP SUM PAYMENT
                           --------------------------

     Section 8.01. Automatic Payment.  Except as provided below in this Article
                   -----------------
VIII, upon the date of a Change in Control of the Company, the Company shall
make an immediate Lump Sum Payment to each Participant or his or her surviving
spouse (or other beneficiary determined by the Participant), as the case may be.

     Section 8.02. Determination of Lump Sum Payment.  Lump Sum Payment means an
                   ---------------------------------
amount equal to the present value of the total number of annual payments which
otherwise would have been made under the Plan based on the assumption that the
Participant's employment with the Company has terminated as of the date of the
Change in Control of the Company and as calculated using the mortality tables
used for the Pension Plan and a rate of interest equal to "Moody's Corporate
Bond Yield Average--Monthly (Average Corporate)" as then most recently
published. In the event the Participant or the Participant's surviving spouse
has begun to receive benefit payments under the Plan prior to the date of the
Change in Control of the Company, the amount of such Lump Sum Payment shall be
equal to the present value of the remaining annual payments which otherwise
would have been made, calculated as described in this Section 8.02.

     Section 8.03. Participation after a Change in Control of the Company.  In
                   ------------------------------------------------------
the event that the Plan is not terminated after a Change in Control of the
Company, any future payment made under the Plan to a Participant who has
received a Lump Sum Payment shall be reduced by taking into account the amount
of such Lump Sum Payment in a manner determined by the Company at the time of
such Lump Sum Payment.

                                   ARTICLE IX
                                  MISCELLANEOUS
                                  -------------

     Section 9.01. 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,

                                       10
<PAGE>
anticipate, assign, transfer, pledge, encumber or otherwise convey the right to
receive the Supplement.

     Section 9.02. 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 9.03. 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 9.04. 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 9.05. 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 of the Company, 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 9.06. 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

                                       11
<PAGE>
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.
<PAGE>
EATON CORPORATION

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

Vice President - Human Resource
----------------------------------------
Title

/s/ Earl R. Franklin
----------------------------------------
Name

Vice President and Secretary
----------------------------------------
Title

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