Document:

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

                       Amendment effective January 1, 2005
                                       to
                Plan for the Deferred Payment of Directors' Fees
         (originally adopted October 23, 1985 and as restated effective
                            as of February 24, 2004)

     WHEREAS, Eaton Corporation (the "Company") presently maintains in effect
the Plan for the Deferred Payment of Directors' Fees (the "Plan") established
effective as of October 23, 1985, under an amended and restated document made
effective as of February 24, 2004;

     WHEREAS, the American Jobs Creation Act of 2004 (the "Act") included
provisions that affect the operation and tax treatment of arrangements such as
the Plan, generally effective January 1, 2005;

     WHEREAS, it is desired that amounts earned and vested under the Plan for
periods before January 1, 2005, remain subject to the law as in effect prior to
enactment of the Act and that no material modification of any kind be made to
the Plan or given effect after October 3, 2004, with respect to such amounts;
and

     WHEREAS, it is desired to amend the Plan only as it relates to deferrals
after December 31, 2004, to reflect the provisions of the Act, so as to enable
the Participants under the Plan to continue to defer some or all eligible fees
which may be payable to them for future services as a member of the Board of
Directors of the Company or as chairman or a member of any committee of the
Board;

     NOW, THEREFORE, the Plan is hereby amended in the respects hereinafter set
forth, but with respect only to amounts deferred after December 31, 2004.

1. Section 2.07 is amended to provide as follows:

2.07 "Deferred Account Balance": At any particular date, the total of all
      ------------------------
     Compensation deferred under the Plan and earnings credited thereto less the
     amount of any deferred Compensation previously paid to the Participant;
     provided that separate records shall be maintained within the Deferred
     Account Balance to reflect Compensation deferred under the Plan for periods
     ending on and before December 31, 2004 and earnings credited thereto and
     Compensation deferred under the Plan for periods ending on and after
     January 1, 2005 and earnings credited thereto.

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2. Section 2.08 is amended to provide as follows:

2.08 "Deferred Compensation Agreement": The written agreement between the
      -------------------------------
     Company and a Participant substantially in the form attached hereto as
     Exhibit A and made a part hereof, as the form of agreement may be amended
     by the Company from time to time.

3. Section 2.10 shall cease to be applicable and is amended to provide as
follows:

2.10 Reserved.

4. Section 2.19 shall cease to be applicable and is amended to provide as
follows:

2.19 Reserved.

5. A new paragraph (c) is added to Section 3.02 to provide as follows:

     (c)  The Deferred Compensation Agreement electing deferral of Compensation
          for a particular calendar year must be made as described in paragraph
          (a) not later than December 31 of the preceding calendar year.
          Beginning with Compensation earned on and after January 1, 2005, the
          Deferred Compensation Agreement shall also contain the Participant's
          election with respect to the form of payment of such amounts.

6. Paragraph (b) of Section 4.01 is amended to provide as follows:

     (b)  The Normal Plan Participation Termination Benefit shall be calculated
          by reference to the Participant's total Compensation deferred under
          the Plan and the rate or rates of interest specified in his or her
          Deferred Compensation Agreement; provided, however, that at the
          Participant's election, the Normal Plan Participation Termination
          Benefit shall be paid in a Lump Sum Payment.

7. Section 4.02 shall cease to be applicable and is amended to provide as
follows:

4.02 Reserved.

8. A new Section 4.04 is added to provide as follows:

4.04 "Limitations on Distribution": Notwithstanding any provision of the Plan to
      ---------------------------
     the contrary, Compensation deferred under the Plan shall not be distributed
     earlier than

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     (a)  separation from service as determined by the Secretary of the Treasury
          (except as provided below with respect to a key employee of the
          Company);

     (b)  the date the Participant becomes disabled (within the meaning of
          Section 409A(a)(2)(C) of the Internal Revenue Code of 1986, as amended
          (the "Code"));

     (c)  death of the Participant;

     (d)  a specified time (or pursuant to a fixed schedule) specified under the
          Plan at the date of the deferral of such Compensation;

     (e)  to the extent provided by the Secretary of the Treasury, a change in
          the ownership or effective control of the Company, or in the ownership
          of a substantial portion of the assets of the Company; or

     (f)  the occurrence of an unforeseeable emergency as defined in Section
          409A(a)(2)(B)(ii) of the Code.

     In the case of any key employee (as defined in Section 416(i) of the Code
     without regard to paragraph (5) thereof) of the Company, distributions may
     not be made before the date which is six months after the date of
     separation from service (or, if earlier, the date of death of the
     Participant).

9. Section 5.02 is amended to provide as follows:

5.02 "Amount of Survivor Benefit": The Survivor Benefit shall be an amount equal
      --------------------------
     to the Participant's Deferred Account Balance at the date of his or her
     death together with interest thereon, compounded annually, from the date
     Compensation was deferred until the date it is completely paid by the
     Company (a "Deferral Period") at a rate equal to the prime rate set forth
     in The Wall Street Journal (or any successor thereto) (hereinafter referred
        ----------------------- to as the "Prime Rate") from time to time during
     the Deferral Period. The Survivor Benefit shall be paid in a lump sum.

10. Section 5.03 is amended to provide as follows:

5.03 "Survivor Benefit After Commencement of Benefit Payments to the
      --------------------------------------------------------------
     Participant": In the event a Participant who has begun to receive benefit
     -----------
     installment payments under the Plan dies prior to full payment of his or
     her Normal Plan Participation Termination Benefit or Early Termination
     Benefit, all remaining payments due hereunder shall be made to such
     Participant's Designated Beneficiary in a lump sum.

11. Section 6.02 shall cease to be applicable and is amended to provide as
follows:

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6.02 Reserved.

12. Section 7.02 shall cease to be applicable and is amended to provide as
follows:

7.02 Reserved.

13. A new Section 8.07 is added to provide as follows:

8.07 "American Jobs Creation Act of 2004 ": 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 for Compensation deferred after December 31, 2004.
     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 and 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.

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

                                EATON CORPORATION

                             200_ STOCK OPTION GRANT
                      NON-QUALIFIED STOCK OPTION AGREEMENT
                             (NON-EMPLOYEE DIRECTOR)

Name __________________________("Optionholder")    Date of Grant _______________

Number of Shares ______________                    Option Price ________________

EATON CORPORATION, an Ohio corporation (the "Company"), hereby grants to the
Optionholder, in consideration of service by him or her as a member of the Board
of Directors of the Company (the "Board"), the option to purchase from the
Company the number of common shares of the Company with a par value of fifty
cents each (the "Common Shares") specified above from time to time during a
period which shall end at the close of business on the tenth anniversary of the
date of the granting of this option (such period being referred to as the "fixed
term of the option"), unless sooner terminated as hereinafter provided. For
purposes of the foregoing sentence, "close of business" shall mean 5:00 p.m.
Eastern Time on the day of such tenth anniversary unless that day falls on a
Saturday, Sunday or other day when the Company is not open for business, in
which case "close of business" shall mean 5:00 p.m. Eastern Time on the
immediately preceding day when the Company is open for business. This option is
subject to, and is granted in accordance with, the _____ Stock Plan (the "____
Plan"), and upon the terms and conditions herein set forth.

I.    TERMS OF EXERCISE OF OPTION

      A.    By the Optionholder While Serving as a Member of the Board.

This option shall become exercisable after a period of six months following the
date of grant, provided the Optionholder remains in continuous service as a
member of the Board for that period. The Optionholder, while serving as a member
of the Board, may exercise this option at any time after this option becomes
exercisable, but not later than the end of the fixed term of the option. The
Governance Committee of the Board (the "Committee") reserves the right to decide
to what extent leaves of absence for government service, illness, temporary
disability, or other reasons shall not be deemed to be an interruption of
continuous service. Notwithstanding the foregoing provisions of this Section I
A, this option may be exercised after service on the Board ends as provided in
Section I B below.

      B.    By the Optionholder When No Longer Serving as a Member of the Board.
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The Optionholder may not exercise this option after he or she ceases to serve as
a member of the Board, except that if the Optionholder ceases to serve as a
member of the Board after reaching the retirement age designated by the
then-current Board retirement policy or after at least ten years' service on the
Board, then he or she may exercise this option at any time after a period of six
months following the date of grant, but not later than the end of the fixed term
of the option.

I.    TERMS OF EXERCISE OF OPTION (continued)

      C.    In case of the Death of the Optionholder.

If the Optionholder is entitled to exercise this option at the date of his or
her death, then this option may be exercised during the period of 12 months
after the death of the Optionholder (but no later than the end of the fixed term
of the option) by the Optionholder's estate or by a person or persons who have
acquired the right to exercise this option by bequest or inheritance. This
option may be so exercised only as to the number of Common Shares for which it
could have been exercised at the time the Optionholder died.

      D.    Termination.

This option shall in no event be exercisable after the expiration of the fixed
term of the option, notwithstanding anything to the contrary in Sections I A, B
or C above. The option hereby granted shall be considered terminated, in whole
or in part, to the extent that it can no longer be exercised under the terms
hereof or under the terms of the 1998 Plan, for the Common Shares originally
subject to this option, or in the event the Optionholder shall fail, within 60
days after the date of the granting of this option, to deliver to the Company an
acceptance of such option executed by him or her.

      E.    Acceleration - Change in Control.

Notwithstanding anything in Section I A or B to the contrary, the outstanding
option shall become immediately exercisable for all of the Common Shares subject
to the option upon a change in control of the Company (as defined below).

For purposes of this Agreement, a "change in control of the Company" 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% 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 75 % 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% or more of the combined voting power of the Company's then
outstanding securities; or (v) during any period of two 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

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      E.    Acceleration - Change in Control. (continued)

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 this Agreement, ownership of voting securities shall take into
account and include ownership as determined by applying the provisions of Rule
13d-3(d)(1) of the Exchange Act (as then in effect).

II.   METHODS OF EXERCISING OPTION - RIGHTS AS SHAREHOLDERS

      A. This option shall be deemed exercised when the person(s) or estate
entitled to exercise it shall indicate the decision to do so, as to all or any
part of the Common Shares for which it may then be exercised, in a single
writing for each exercise delivered to the Company at its principal office and
shall at that time tender to the Company payment in full for the Common Shares
as to which the option is exercised in cash or by a check which shall be paid
upon presentment to the bank upon which drawn or, with the approval of the
Committee, by delivery to the Company of Common Shares owned by the
Optionholder, or by tender of a combination of cash (or a check as herein
described) and Common Shares. A partial exercise of this option shall not affect
the right to exercise it from time to time thereafter as to the remaining Common
Shares subject to the option.

      B. No holder of this option shall have any rights as a shareholder with
respect to any Common Shares subject to the option unless and until he or she
shall have received a certificate or certificates for such Common Shares.
Subject to compliance with all the terms and conditions hereof and of the 1998
Plan, including all rules, regulations and determinations of the Committee, the
Company shall, as promptly as possible after any exercise of this option,
deliver a certificate or certificates for an appropriate number of Common
Shares; provided, however, that no such certificate or certificates shall be so
delivered unless and until adequate provision has, in the judgment of the
Company, been made for any and all withholding taxes in respect of the exercise
of the option.

III.  TRANSFER OF OPTION

Except as otherwise provided by the Committee, this option shall not be
transferable otherwise than by will or the law of descent and distribution.

IV.   COMPLIANCE WITH LAWS, REGULATIONS AND RULES

The Company will use its best efforts to comply with all federal and state laws
and regulations, and all rules of domestic stock exchanges on which its Common
Shares may be listed, which apply to the issuance of the Common Shares subject
to this option, and to obtain such consents and approvals to such issuance which
it deems advisable from federal and state bodies having jurisdiction of such
matters. However, anything herein to the contrary notwithstanding, this option
shall not be exercisable, and the Company shall not be obliged to issue or
deliver any certificate for shares subject to this option, if such exercise,
issuance

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IV.   COMPLIANCE WITH LAWS, REGULATIONS AND RULES (continued)

or delivery would violate any such laws, regulations or rules and unless and
until such consents and approvals have been obtained. Any share certificate
issued to evidence Common Shares as to which this option is exercised may bear
such legends and statements as the Committee shall deem advisable to assure
compliance with federal and state laws and regulations.

If any person(s) or estate purporting to acquire the right to exercise this
option by bequest or inheritance shall attempt to exercise this option, the
Committee may require reasonable evidence as to the ownership of this option and
may request such consents and releases of taxing authorities, as the Committee
may deem advisable.

V.    ADJUSTMENT UPON CHANGE OF SHARES

In the event that the outstanding Common Shares shall be changed in number or
class by reason of a reorganization, merger, consolidation, reclassification,
recapitalization, combination or exchange of shares, stock split, spin off,
stock dividend, rights offering or other event affecting Common Shares, the
number and class of Common Shares subject to this option and the price per share
payable upon exercise of this option shall be equitably adjusted as determined
by the Committee so as to reflect such change. No adjustment provided for in
this Section V shall require the Company to sell or transfer a fractional share.
No exercise of any conversion rights by the holders of any of the Company's
preferred shares or serial preferred shares or convertible indebtedness
hereafter issued shall call for any adjustment under this Section V.

VI.   COMPETITION BY OPTIONHOLDER

In the event that the Optionholder within one year after exercise of any portion
of this option enters into an activity as employee, agent, officer, director,
principal or proprietor which, in the sole judgment of the Committee, is in
competition with the Company or a subsidiary, the amount by which the fair
market value per share on the date of exercise of any such portion exceeds the
option price per Common Share hereunder, multiplied by the number of Common
Shares subject to such exercised portion, shall inure to the benefit of the
Company; and the Optionholder shall pay the same to the Company, unless the
Committee in its sole discretion shall determine that such action by the
Optionholder is not inimical to the best interest of the Company or its
subsidiaries.

VII.  ENFORCEABILITY

This Agreement shall be binding upon and inure to the benefit of (1) the
Company, and its successors and assigns, and (2) the Optionholder and his or her
personal representatives, executors, administrators, legatees and distributees.

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VIII. STOCK OPTION PLAN CONTROLS

The terms and conditions of the 1998 Plan, as amended from time to time in
accordance with the provisions of Section 11 thereof, shall control the terms
and conditions of this option, and anything contained in this Agreement
inconsistent with or in violation of the terms and conditions of the 1998 Plan
shall be of no force or effect and shall not be binding upon the Company or the
Optionholder.

IX.   CONSTRUCTION

It is intended that acquisition of this option by the Optionholder shall qualify
for exemption from the provisions of Section 16(b) of the Exchange Act, and each
and every provision of this Agreement shall be construed, interpreted and
administered so that the grant of this option shall so qualify. Any provision of
this Agreement that cannot be so construed interpreted and administered shall be
of no force or effect.

X.    GOVERNING LAW

This Agreement shall be construed in accordance with the laws of the State of
Ohio, except as otherwise specifically provided herein.

                                        EATON CORPORATION

                                        By
                                           ---------------------------

                                        And by
                                               -----------------------

ACCEPTANCE OF OPTION BY
OPTIONHOLDER

Accepted by
            ---------------------------
                       Signature

Date
     ----------------------------------

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