Document:

EX-4.2

 

Exhibit 4.2

[FACE OF NOTE]

CUSIP NO.

REGISTERED FACE AMOUNT

PRINCIPAL AMOUNT

No. FL -

EATON CORPORATION

MEDIUM-TERM NOTE

(SINGLE INDEXED NOTE)

(FLOATING RATE)

          If the registered owner of this Security (as indicated below) is The Depository Trust Company
(the “Depository”) or a nominee of the Depository, this Security is a Global Security and
the following two legends apply:

          Unless this certificate is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York, New York) to the issuer or its agent for registration of
transfer, exchange or payment, and such certificate issued is registered in the name of CEDE & CO.,
or such other name as requested by an authorized representative of the Depository, ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the
registered owner hereof, CEDE & CO., has an interest herein.

          Unless and until this certificate is exchanged in whole or in part for Securities in certificated
form, this certificate may not be transferred except as a whole by the Depository to a nominee
thereof or by a nominee thereof to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor of the Depository or a nominee of such successor.

          IF APPLICABLE, THE “TOTAL AMOUNT OF OID”, “YIELD TO MATURITY” AND “INITIAL
ACCRUAL PERIOD OID” (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL BE COMPLETED SOLELY FOR
THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT (“OID”) RULES.

 

 

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	ISSUE PRICE:
	 	OPTION TO ELECT REPAYMENT:   o YES  o NO
	 
	 	 
	ORIGINAL ISSUE DATE:
	 	OPTIONAL REPAYMENT DATE[S]:
	 
	 	 
	STATED MATURITY DATE:
	 	 
	 
	 	 
	INITIAL INTEREST RATE:
	 	OPTIONAL REDEMPTION:  o YES  o NO
	 
	 	 
	BASE RATE:
	 	INITIAL REDEMPTION DATE:
	 
	 	 
	If LIBOR: o LIBOR Telerate
	 	 
	o LIBOR Reuters
	 	INITIAL REDEMPTION PERCENTAGE:
	o Other
	 	 
	Designated LIBOR Page:
	 	ANNUAL REDEMPTION PERCENTAGE REDUCTION:
	Designated LIBOR Currency:
	 	 
	 
	 	 
	INDEX MATURITY:
	 	MINIMUM DENOMINATIONS:
	 
	 	o $2,000
	SPREAD (PLUS OR MINUS):
	 	o Other:
	 
	 	 
	 
	 	SPECIFIED CURRENCY:
	SPREAD MULTIPLIER:
	 	United States Dollars:
	 
	 	o YES   o NO
	 
	 	Foreign Currency:
	 
	 	 
	CALCULATION AGENT:
	 	 
	 
	 	OPTION TO RECEIVE PAYMENTS
	 
	 	IN SPECIFIED CURRENCY
	CALCULATION DATE:
	 	OTHER THAN U.S. DOLLARS:
	 
	 	o YES   o NO
	 
	 	 
	SINKING FUND:
	 	EXCHANGE RATE AGENT:
	 
	 	 
	MAXIMUM INTEREST RATE:
	 	 
	 
	 	 
	MINIMUM INTEREST RATE:
	 	 
	 
	 	 
	INTEREST DETERMINATION DATE:
	 	ADDITIONAL AMOUNTS:
	 
	 	 
	INTEREST RESET PERIOD:
	 	DEFEASANCE:  o YES  o NO
	 
	 	 
	INTEREST RESET DATES:
	 	COVENANT DEFEASANCE:  o YES  o NO
	 
	 	 
	INTEREST PAYMENT PERIOD:
	 	INDEXED CURRENCY:
	 
	 	 
	 
	 	United States Dollars:  o YES  o NO
	INTEREST PAYMENT DATES:
	 	 
	 
	 	 
	 
	 	Foreign Currency:
	 
	 	 
	 
	 	PRINCIPAL FINANCIAL CENTER
	 
	 	 
	REGULAR RECORD DATES:
	 	BASE EXCHANGE RATE:
	 
	 	 
	TOTAL AMOUNT OF OID:
	 	 
	 
	 	DETERMINATION AGENT:
	 
	 	 
	INITIAL ACCRUAL PERIOD OID:
	 	 
	 
	 	 
	YIELD TO MATURITY:
	 	REFERENCE DEALERS:
	 
	 	1. ___
	OTHER/DIFFERENT PROVISIONS:
	 	2. ___
	 
	 	3. ___

 

 

          EATON CORPORATION, an Ohio corporation (herein referred to as the “Company”,
which term includes any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to

____________________, or registered assigns, in the Specified Currency on the Stated Maturity Date
shown above (except to the extent redeemed or repaid prior to the Stated Maturity Date), the
principal sum of _______ (the “Face Amount”), plus or minus an amount determined by the
Determination Agent (specified above) in accordance with the formula set forth below, and to pay
interest on the Face Amount as described below and on the reverse hereof.

          If the Spot Rate exceeds or equals the Base Exchange Rate, the principal amount of this
Security payable on the Maturity Date (as defined below) shall equal:

     Face Amount + (Face Amount x  Spot Rate — Base Exchange Rate)

          If the Base Exchange Rate exceeds the Spot Rate, the principal amount of this Security payable
on the Maturity Date shall equal:

     Face Amount  -  (Face Amount x  Base Exchange Rate — Spot Rate)

Base Exchange Rate

; provided, however, that in no event shall such principal amount be less than
zero.

          In making the above calculations, the (i) “Base Exchange Rate” is the exchange
rate specified as such above and (ii) “Spot Rate” is the rate at which the Specified
Currency can be exchanged for the Indexed Currency specified above (such rate stated as units of
Indexed Currency per unit of the Specified Currency) as determined on the second Exchange Rate Day,
as defined below, prior to the Maturity Date (the “Determination Date”) by the
Determination Agent based upon the arithmetic mean of the open market spot offer quotations for
such Indexed Currency (spot bid quotations for the Specified Currency) obtained by the
Determination Agent from the Reference Dealers specified above in The City of New York at 11:00
A.M., New York City time, on the Determination Date, for an amount of Indexed Currency equal to the
Face Amount of this Security multiplied by the Base Exchange Rate, in terms of the Specified
Currency for settlement on the Maturity Date. If such quotations from the Reference Dealers are
not available on the Determination Date due to circumstances beyond the control of the Company or
the Determination Agent, the Spot Rate will be determined on the basis of the most recently
available quotations from the Reference Dealers. If any of the Reference Dealers shall be

 

 

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unwilling or unable to provide the requested quotations, the Company may select other major
money center bank or banks in The City of New York, in consultation with the Determination Agent,
to act as Reference Dealer or Dealers in replacement therefor. In the absence of manifest error,
the determination by the Determination Agent of the Spot Rate and the principal amount of this
Security payable on the Maturity Date shall be final and binding on the Company, the Trustee
(referred to on the reverse hereof) and the Holder (as defined below) of this Security.

          AExchange
Rate Day@ means any day which is a Business Day in The City of New York
and, if the Specified Currency or Indexed Currency is any currency or currency unit other than U.S.
dollars, in the Principal Financial Center of the country of such Specified Currency or Indexed
Currency.

          The Company shall pay interest on the Face Amount hereof at the Interest Rate shown
above from the Original Issue Date shown above until the first Interest Reset Date shown above
following the Original Issue Date (if the first Interest Reset Date is later than the Original
Issue Date) and thereafter at the interest rate determined by reference to the Base Rate shown
above, plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if any, shown
above, or adjusted by such other formula, if any, set forth on the face hereof, until the principal
hereof is paid or made available for payment; provided, however, that the interest
rate in effect for the ten days immediately prior to the Maturity Date (as defined below) of this
Security will be that in effect on the tenth day preceding such date. The Company will pay
interest on each Interest Payment Date, if any, specified above, commencing with the first Interest
Payment Date next succeeding the Original Issue Date, and on the Stated Maturity Date, any
Redemption Date or Repayment Date (each such date being hereinafter referred to as the
“Maturity Date” with respect to the principal repayable on such date); provided,
however, that any payment of principal (or premium, if any) or interest, if any, to be made
on any Interest Payment Date or on the Maturity Date that is not a Business Day (as defined below)
shall be made on the next succeeding Business Day (except that if the Base Rate specified above is

LIBOR or EURIBOR, and such day falls in the next succeeding calendar month, such payment will be
made on the next preceding Business Day) as described on the reverse hereof. For purposes of this
Security, unless otherwise specified on the face hereof, “Business Day” means any day that
is not a Saturday or Sunday and that is neither a legal holiday nor a day on which commercial banks
are authorized or required by law, regulation or executive order to close in The City of New York;
provided, however, that, if the Specified Currency shown above is a Foreign
Currency, such day is also not a day on which commercial banks are authorized or required by law,
regulation or executive order to close in the Principal Financial Center (as defined below) of the
country issuing the Specified Currency (or, if the Specified Currency is the euro, such day is also
a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET)
System is open); provided further that, with respect to Securities as to which
LIBOR is an applicable Base Rate, such day is also a London Business Day. “London Business
Day” means a day on which commercial banks are open for business (including dealings in the
LIBOR Currency (as defined below)) in London. “Principal Financial Center” means (i) the
capital city of the country issuing the Specified

 

 

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Currency or the Indexed Currency, as the case may be, or (ii) the capital city of the country
to which the LIBOR Currency relates, as applicable, except, in the case of (i) or (ii) above, that
with respect to United States dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch
guilders, Portuguese escudos, South African rand and Swiss francs, the “Principal Financial Center”
shall be The City of New York, Sydney and (solely in the case of the Specified Currency) Melbourne,
Toronto, Frankfurt, Amsterdam, London (solely in the case of the LIBOR Currency), Johannesburg and
Zurich, respectively.

          Interest on this Security will accrue from, and including, the immediately preceding Interest
Payment Date to which interest has been paid or duly provided for (or from, and including, the
Original Issue Date if no interest has been paid or duly provided for) to, but excluding, the
applicable Interest Payment Date or the Maturity Date, as the case may be (each, an “Interest
Period”). The interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in the Indenture and subject to certain exceptions described herein
(referred to on the reverse hereof), be paid to the person (the “Holder”) in whose name
this Security (or one or more Predecessor Securities) is registered at the close of business on the
fifteenth day (whether or not a Business Day) next preceding such Interest Payment Date (a
“Regular Record Date”); provided, however, that, if this Security was
issued between a Regular Record Date and the initial Interest Payment Date relating to such Regular
Record Date, interest for the period beginning on the Original Issue Date and ending on such
initial Interest Payment Date shall be paid on the Interest Payment Date following the next
succeeding Regular Record Date to the Holder hereof on such Regular Record Date; and
provided further that interest payable on the Maturity Date will be payable to the
person to whom the principal hereof shall be payable. Any such interest not so punctually paid or
duly provided for on any Interest Payment Date other than the Maturity Date (“Defaulted
Interest”) will forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a special record date (the “Special Record Date”)
for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to the Holder of this Security not less than ten days prior to such Special Record Date, or
may be paid at any time in any other lawful manner, all as more fully provided in the Indenture.

          Unless otherwise specified above, all payments in respect of this Security will be made
in U.S. dollars regardless of the Specified Currency shown above unless the Holder hereof makes the
election described below. If the Specified Currency shown above is other than U.S. dollars, the
Exchange Rate Agent (referred to on the reverse hereof) will arrange to convert any such amounts so
payable in respect hereof into U.S. dollars in the manner described on the reverse hereof;
provided, however, that the Holder hereof may, if so indicated above, elect to
receive all or a specified portion of any payment of principal, premium, if any, and/or interest,
if any, in respect of this Security in such Specified Currency by delivery of a written request to
the corporate trust office of the Trustee in The City of New York, on or prior to the applicable
Regular Record Date or at least fifteen days prior to the Maturity Date, as the case may be. Such

 

 

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request may be in writing (mailed or hand delivered) or by cable, telex or other form of
facsimile transmission. The Holder hereof may elect to receive payment in such Specified Currency
for all principal, premium, if any, and interest payments, if any, and need not file a separate
election for each payment. Such election will remain in effect until revoked by written notice to
the Trustee, but written notice of any such revocation must be received by the Trustee on or prior
to the applicable Regular Record Date or at least fifteen days prior to the Maturity Date, as the
case may be.

          Notwithstanding the foregoing, if the Company determines that the Specified Currency is not
available for making payments in respect hereof due to the imposition of exchange controls or other
circumstances beyond the Company’s control, or is no longer used by the government of the country
issuing such currency or for the settlement of transactions by public institutions of or within the
international banking community, then the Holder hereof may not so elect to receive payments in the
Specified Currency and any such outstanding election shall be automatically suspended, until the
Company determines that the Specified Currency is again available for making such payments. If the
euro has been substituted for such Specified Currency, the Company may at its option (or shall, if
so required by applicable law) without the consent of the holder of this Security effect the
payment of principal of or premium, if any, or interest on this Security in euro in lieu of such
Specified Currency in conformity with legally applicable measures taken pursuant to, or by virtue
of, the Treaty establishing the European Community, as amended. Any payment made under such
circumstances in U.S. dollars or euros where the required payment is in a Specified Currency will
not constitute a default under the Indenture.

          In the event of an official redenomination of the Specified Currency, the obligations of the
Company with respect to payments on this Security shall be deemed, immediately following such
redenomination, to provide for payment of that amount of redenominated currency representing the
amount of such obligations immediately before such redenomination. Except as set forth above, in
no event shall any adjustment be made to any amount payable hereunder as a result of any change in
the value of the Specified Currency shown above relative to any other currency due solely to
fluctuations in exchange rates.

          Until this Security is paid in full or payment therefor in full is duly provided for, the
Company will at all times maintain a Paying Agent (which Paying Agent may be the Trustee) in The
City of New York (which, unless otherwise specified above, shall be the “Place of
Payment”). The Company has initially appointed JPMorgan Chase Bank, N.A., at its office in The
City of New York as Paying Agent.

          Unless otherwise shown above, payment of interest on this Security (other than on the
Maturity Date) will be made by check mailed to the registered address of the Holder hereof as of
the Regular Record Date; provided, however, that, if (i) the Specified Currency is
U.S. dollars and this is a Global Security (as defined on the reverse hereof) or (ii) the Specified
Currency is a

 

 

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Foreign Currency, and the Holder has elected to receive payments in such Specified Currency as
provided for above, such interest payments will be made by transfer of immediately available funds,
but only if appropriate wire transfer instructions have been received in writing by the Trustee on
or prior to the applicable Regular Record Date. Simultaneously with any election by the Holder
hereof to receive payments in respect hereof in the Specified Currency (if other than U.S.
dollars), such Holder may provide appropriate wire transfer instructions to the Trustee, and all
such payments will be made in immediately available funds to an account maintained by the payee
with a bank, but only if such bank has appropriate facilities therefor. Unless otherwise specified
above, the principal hereof (and premium, if any) and interest hereon payable on the Maturity Date
will be paid in immediately available funds upon surrender of this Security at the office of the
Trustee maintained for that purpose in the Borough of Manhattan, The City of New York (or at such
other location as may be specified above). The Company will pay any administrative costs imposed
by banks in making payments in immediately available funds but, except as otherwise provided under
Additional Amounts above, any tax, assessment or governmental charge imposed upon payments will be
borne by the Holders of the Securities in respect of which such payments are made.

          Interest on this Security, if any, will be computed on the basis of a 360-day year of twelve
30-day months.

          REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE
HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT
THIS PLACE.

 

 

          Unless the certificate of authentication hereon has been executed by the Trustee by manual
signature, this Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

          IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
facsimile corporate seal.

	 	 	 	 	 	 	 
	 	 	 	 	EATON CORPORATION
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	[CORPORATE SEAL]	 	 	 	 
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:

Title: Secretary	 	 	 	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

	 	 	 	 	 	 	 	 	 
	 	 	 	 	This is one of the Securities of the series designated therein
	 	 	 	 	referred to in the within-mentioned Indenture
	 
	 	 	 	 	 	 	 	 
	Dated:	 	 	 	JPMorgan Chase Bank, N.A.,
	 	 	 	 	 	 	as Trustee
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 
	

	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	Authorized Officer

 

 

[REVERSE OF NOTE]

EATON CORPORATION

MEDIUM-TERM NOTE

          Section 1. General. This Security is one of a duly authorized issue of securities
(herein called the “Securities”) of the Company, issued and to be issued in one or more
series under an indenture, dated as of April 1, 1994, as it may be supplemented from time to time
(herein called the “Indenture”), between the Company and JPMorgan Chase Bank, N.A.
(formerly known as Chemical Bank), Trustee (herein called the “Trustee”, which term
includes any successor trustee under the Indenture with respect to a series of which this Security
is a part), to which Indenture and all indentures supplemental thereto, reference is hereby made
for a statement of the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof limited in aggregate principal amount to U.S.$800,000,000 (or the
equivalent thereof in one or more foreign currencies) or such other principal amount as shall be
provided pursuant to the Indenture.

          Section 2. Payments. If the Specified Currency is other than U.S. dollars and the
Holder hereof fails to elect payment in such Specified Currency in accordance with the procedures
set forth on the face hereof, the amount of U.S. dollar payments to be made in respect hereof will
be determined by the Exchange Rate Agent specified on the face hereof or a successor thereto (the
“Exchange Rate Agent”) based on the highest bid quotation in The City of New York at
approximately 11:00 A.M., New York City time, on the second Business Day preceding the applicable
payment date received by the Exchange Rate Agent from three recognized foreign exchange dealers
(one of whom may be the Exchange Rate Agent) selected by the Exchange Rate Agent and approved by
the Company for the purchase by the quoting dealer of the Specified Currency for U.S. dollars for
settlement on such payment date in the aggregate amount of the Specified Currency payable to all
Holders of Securities scheduled to receive U.S. dollar payments and at which the applicable dealer
commits to execute a contract. If three such bid quotations are not available, payments will be
made in the Specified Currency.

          If the Specified Currency is other than U.S. dollars and the Holder hereof has elected
payment in such Specified Currency in accordance with the procedures set forth on the face hereof
and the Specified Currency is not available due to the imposition of exchange controls or to other
circumstances beyond the Company’s control, the Company will be entitled to satisfy its obligations
to the Holder of this Security by making such payment in U.S. dollars on the basis of the noon
buying rate in The City of New York for cable transfers of such Specified Currency as certified for
customs purposes (or, if not so certified as otherwise determined) by the Federal Reserve Bank of
New York (the “Market Exchange Rate”) as computed by the Exchange Rate Agent on the second
Business Day prior to the applicable payment date or, if the Market

 

 

 2

Exchange Rate is then not available, on the basis of the most recently available Market
Exchange Rate or as otherwise indicated above. Any payment made under such circumstances in U.S.
dollars where the required payment is in a Specified Currency will not constitute a default under
the Indenture.

          All determinations referred to above made by the Exchange Rate Agent shall be at its sole
discretion (except to the extent expressly provided that any determination is subject to approval
by the Company) and, in the absence of manifest error, shall be conclusive for all purposes and
binding on the Holder of this Security, and the Exchange Rate Agent shall have no liability
therefor.

          All currency exchange costs will be borne by the Company.

          Section 3. Interest Rate Calculations. Unless otherwise set forth on the face
hereof, the following provisions of this Section 3 shall apply to the calculation of interest on
this Security. If the first Interest Reset Date is later than the Original Issue Date, this
Security will bear interest from its Original Issue Date to the first Interest Reset Date at the
Initial Interest Rate set forth on the face hereof. Thereafter, the interest rate hereon for each
Interest Reset Period (as defined below) will be determined by reference to the Base Rate set forth
on the face hereof, as adjusted by the Spread, the Spread Multiplier or other formula, if any, set
forth on the face hereof.

          As set forth on the face hereof, this Security may also have either or both of the following:
(i) a maximum limitation, or ceiling, on the rate at which interest may accrue during any Interest
Period (as defined below) (“Maximum Interest Rate”); and (ii) a minimum limitation, or
floor, on the rate at which interest may accrue during any Interest Period (“Minimum Interest
Rate”). In addition to any Maximum Interest Rate that may be set forth on the face hereof, the
interest rate on this Security will in no event be higher than the maximum rate permitted by New
York law, as the same may be modified by United States law of general application.

          The rate of interest hereon will be reset daily, weekly, monthly, quarterly,
semiannually or annually or at another interval (each, an “Interest Reset Period”), as set
forth on the face hereof. The date or dates on which interest will be reset (each, an
“Interest Reset Date”) will be, if this Security resets (i) daily, each Business Day; (ii)
weekly, the Wednesday of each week (unless the Base Rate set forth on the face hereof is the
Treasury Rate, in which case, the Tuesday of each week (except as provided below)); (iii) monthly,
the third Wednesday of each month; (iv) quarterly, the third Wednesday of each of the four months
set forth on the face hereof; (v) semiannually, the third Wednesday of each of the two months set
forth on the face hereof; and (vi) annually, the third Wednesday of the month of each year set
forth on the face hereof; provided, however, that (a) if the first Interest Reset
Date is later than the Original Issue Date, the interest rate in effect from the Original Issue
Date to the first Interest Reset Date will be

 

 

 3

the Initial Interest Rate as set forth on the face hereof and (b) the interest rate in effect
for the ten days immediately prior to the Maturity Date will be that in effect on the tenth day
preceding the Maturity Date. If the Base Rate set forth on the face hereof is the Treasury Rate
and a Treasury auction shall fall on the Interest Reset Date for this Security, then such Interest
Reset Date shall instead be the first Business Day immediately following such Treasury auction. If
any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset
Date shall be postponed to the next succeeding Business Day, except that, if the Base Rate set
forth on the face hereof is LIBOR or EURIBOR, if such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding Business Day.

          The interest payable hereon on each Interest Payment Date and on the Maturity Date shall be
the amount of interest accrued from and including the Original Issue Date or the next preceding
Interest Payment Date in respect of which interest, if any, has been paid or duly provided for, as
the case may be, to, but excluding, the next succeeding Interest Payment Date or the Maturity Date,
as the case may be, (each such period, an “Interest Period”). If the Maturity Date falls
on a day which is not a Business Day, the payment of principal, premium, if any, and interest, if
any, with respect to the Maturity Date will be paid on the next succeeding Business Day with the
same force and effect as if made on the Maturity Date, and no interest shall accrue on the amount
so payable as a result of such delayed payment. If an Interest Payment Date other than the
Maturity Date falls on a day that is not a Business Day, such Interest Payment Date will be
postponed to the next day that is a Business Day and interest will accrue for the period of such
postponement (except if the Base Rate specified above is LIBOR or EURIBOR, and such day falls in
the next succeeding calendar month, such Interest Payment Date will be advanced to the immediately
preceding Business Day), it being understood that, to the extent this sentence is inconsistent with
Section 112 of the Indenture, the provisions of this sentence shall apply in lieu of such Section.

          Accrued interest will be calculated by multiplying the principal amount hereof by an accrued
interest factor. Such accrued interest factor will be computed by adding the interest factor
calculated for each day in the Interest Period or from the date from which accrued interest is
being calculated. The interest factor for each such day is computed by dividing the interest rate
applicable on such day by 360, if the Base Rate set forth on the face hereof is the CD Rate,
Commercial Paper Rate, EURIBOR, Federal Funds Rate, Prime Rate or LIBOR (each as described below),
or by the actual number of days in the year, if the Base Rate set forth on the face hereof is the
Treasury Rate or the CMT Rate (each as described below). The interest rate applicable to any day
that is an Interest Reset Date is the interest rate as determined, in accordance with the
procedures hereinafter set forth, with respect to the Interest Determination Date (as defined
below) pertaining to such Interest Reset Date. The interest rate applicable to any other day is
the interest rate for the immediately preceding Interest Reset Date (or, if none, the Initial
Interest Rate, as set forth on the face hereof).

 

 

 4

          All percentages resulting from any calculation with respect hereto will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of
a percentage point rounded upward (e.g., 7.123455% (or 0.07123455) being rounded to
7.12346% (or 0.0712346) and 7.123454% (or 0.07123454) being rounded to 7.12345% (or 0.0712345)) and
all currency amounts used in or resulting from such calculation will be rounded to the nearest
one-hundredth of a unit (with five one-thousandths of a unit being rounded upwards).

          Interest will be payable on, if this Security resets (i) daily, weekly or monthly, the third
Wednesday of each month; (ii) quarterly, the third Wednesday of the four months set forth on the
face hereof; (iii) semiannually, the third Wednesday of the two months set forth on the face
hereof; and (iv) annually, the third Wednesday of the month set forth on the face hereof (each, an
“Interest Payment Date”), and in each case, on the Maturity Date.

          If the Base Rate set forth on the face hereof is the CD Rate, the CMT Rate, the Commercial
Paper Rate, the Federal Funds Rate or the Prime Rate, the “Interest Determination Date”
pertaining to an Interest Reset Date for this Security will be the second Business Day immediately
preceding such Interest Reset Date; if the Base Rate set forth on the face hereof is EURIBOR (or
LIBOR when the Index Currency is euros) pertaining to an Interest Reset Date for this Security
shall be the second TARGET Settlement Day prior to such Interest Reset Date; if the Base Rate set
forth on the face hereof is LIBOR (other than for LIBOR Notes for which the Index Currency is
euros), the “Interest Determination Date” pertaining to an Interest Reset Date for this
Security will be the second London Business Day immediately preceding such Interest Reset Date
unless the Designated LIBOR Currency is British pounds sterling, in which case the “Interest
Determination Date” will be such Interest Reset Date; and if the Base Rate set forth on the face
hereof is the Treasury Rate, the “Interest Determination Date” pertaining to an Interest
Reset Date for this Security will be the day of the week in which such Interest Reset Date falls on
which Treasury bills (as defined below) would normally be auctioned. Treasury bills are usually
sold at auction on Monday of each week, unless that day is a legal holiday, in which case the
auction is usually held on the following Tuesday, except that sometimes such auction may be held on
the preceding Friday. If, as the result of a legal holiday, an auction is so held on the preceding
Friday, such Friday will be the Interest Determination Date pertaining to the Interest Reset Date
occurring in the next succeeding week.

          Unless otherwise set forth on the face hereof, the “Calculation Date”, where
applicable, pertaining to an Interest Determination Date is the earlier of (i) the tenth calendar
day after such Interest Determination Date, or if any such day is not a Business Day, the next
succeeding Business Day and (ii) the Business Day immediately preceding the applicable Interest
Payment Date or the Maturity Date, as the case may be.

          The Company will appoint and enter into an agreement with an agent (a “Calculation
Agent”) to calculate the rate of interest on the Securities of this series which bear

 

 

 5

interest at a floating rate. Unless otherwise set forth on the face hereof, JPMorgan Chase
Bank, N.A. will be the Calculation Agent. At the request of the Holder hereof, the Calculation
Agent will provide the interest rate then in effect and, if determined, the interest rate that will
become effective on the next Interest Reset Date.

          Subject to applicable provisions of law and except as specified herein, with respect to each
Interest Determination Date, the rate of interest shall be the rate determined by the Calculation
Agent in accordance with the provisions of the applicable heading below.

          Determination of CD Rate. If the Base Rate set forth on the face hereof is the CD
Rate, this Security will bear interest for each Interest Reset Period at the interest rate
calculated with reference to the CD Rate and the Spread, Spread Multiplier or other formula, if
any, set forth on the face hereof. Unless otherwise set forth on the face hereof, the “CD
Rate” means, with respect to any Interest Determination Date pertaining thereto, the rate on
such date for negotiable certificates of deposit having the Index Maturity set forth on the face
hereof as published in H.15(519) (as defined below), under the heading “CDs (secondary
market)” or, if not yet published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the CD Rate will be the rate on such Interest
Determination Date for negotiable certificates of deposit having the Index Maturity set forth on
the face hereof as published in H.15 Daily Update (as defined below), or such other recognized
electronic source used for the purpose of displaying such rate, under the caption “CDs
(secondary market)”. If by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date such rate is not yet published in H.15(519), H.15 Daily Update
or such other recognized electronic source, the CD Rate on such Interest Determination Date will be
calculated by the Calculation Agent and will be the average of the secondary market offered rates
as of 10:00 A.M., New York City time, on such Interest Determination Date, of three leading
non-bank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected
by the Calculation Agent (after consultation with the Company) for negotiable certificates of
deposit of major United States money market banks of the highest credit standing (in the market for
negotiable certificates of deposit) having a remaining maturity closest to the Index Maturity set
forth on the face hereof in a denomination of U.S. $5,000,000; provided, however,
that, if fewer than three dealers are quoting as mentioned in this sentence, the interest rate for
the period commencing on the Interest Reset Date following such Interest Determination Date will be
the interest rate in effect on such Interest Determination Date. “H.15(519)” means the
weekly statistical release designated as such, or any successor publication, published by the Board
of Governors of the Federal Reserve System. “H.15 Daily Update” means the daily update of
H.15(519), available through the world-wide web site of the Board of Governors of the Federal
Reserve System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or publication.

          Determination of Commercial Paper Rate. If the Base Rate set forth on the face
hereof is the Commercial Paper Rate, this Security will bear interest for each Interest Reset

 

 

 6

Period at the interest rate calculated with reference to the Commercial Paper Rate and the
Spread, Spread Multiplier or other formula, if any, set forth on the face hereof. Unless otherwise
set forth on the face hereof, the “Commercial Paper Rate” means, with respect to any
Interest Determination Date pertaining thereto, the Money Market Yield (calculated as described
below) of the rate on such date for commercial paper having the Index Maturity set forth on the
face hereof, as such rate shall be published in H.15(519) under the caption “Commercial Paper
 X Nonfinancial” or, if not yet published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Commercial Paper Rate shall be
the Money Market Yield of the rate on such Interest Determination Date for commercial paper having
the Index Maturity set forth on the face hereof as published in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying such rate, under the caption
“Commercial Paper X Nonfinancial”. If by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date such rate is not yet published in
H.15(519), H.15 Daily Update or such other recognized electronic source, the Commercial Paper Rate
on such Interest Determination Date shall be calculated by the Calculation Agent and shall be the
Money Market Yield of the average of the offered rates as of 11:00 A.M., New York City time, on
such Interest Determination Date of three leading dealers in U.S. dollar commercial paper in The
City of New York selected by the Calculation Agent (after consultation with the Company) for
commercial paper having the Index Maturity set forth on the face hereof placed for an industrial
issuer whose bond rating is “Aa”, or the equivalent, from a nationally recognized securities rating
agency; provided, however, that, if fewer than three dealers are quoting as
mentioned in this sentence, the interest rate for the period commencing on the Interest Reset Date
following such Interest Determination Date will be the interest rate in effect on such Interest
Determination Date.

          “Money Market Yield” shall be a yield (expressed as a percentage) calculated in
accordance with the following formula:

	 	 	 	 	 
	

	 	MONEY MARKET YIELD =
	 	  D  x  360    x  100
	

	 	 	 	   360  -  (D  x  M)

where “D” refers to the applicable per annum rate for commercial paper quoted on a bank discount
basis and expressed as a decimal; and “M” refers to the actual number of days in the Interest
Period for which interest is being calculated.

          Determination of EURIBOR Notes. If the Base Rate specified on the face hereof is
“EURIBOR”, this Security will bear interest for each Interest Reset Period at the interest rate
calculated with reference to EURIBOR and the Spread, Spread Multiplier or other formula, if any,
set forth on the face hereof. For any Interest Determination Date, EURIBOR with respect to this
Security shall be the rate for deposits in euros as sponsored, calculated and published jointly by
the European Banking Federation and ACI — The Financial Market Association, or any company
established by the joint sponsors for purposes of compiling and publishing those rates,

 

 

 7

for the Index Maturity specified on the face hereof as that rate appears on the display on
Moneyline Telerate, or any successor service, on page 248 or any other page as may replace page 248
on that service (“Telerate Page 248”) as of 11:00 a.m., Brussels time.

          The following procedures shall be followed if the rate cannot be determined as described
above:

     (i) If the above rate does not appear, the Calculation Agent shall request the
principal Euro-zone office of each of four major banks in the Euro-zone interbank market, as
selected by the Calculation Agent (after consultation with the Company), to provide the
Calculation Agent with its offered rate for deposits in euros, at approximately 11:00 a.m.,
Brussels time, on the Interest Determination Date, to prime banks in the Euro-zone interbank
market for the Index Maturity specified on the face hereof commencing on the applicable
Interest Reset Date, and in a principal amount not less than the equivalent of U.S.$1
million in euro that is representative of a single transaction in euro, in that market at
that time. If at least two quotations are provided, EURIBOR shall be the arithmetic mean of
those quotations.

     (ii) If fewer than two quotations are provided, EURIBOR shall be the arithmetic mean of
the rates quoted by four major banks in the Euro-zone interbank market, as selected by the
Calculation Agent (after consultation with the Company), at approximately 11:00 a.m.,
Brussels time, on the applicable Interest Reset Date for loans in euro to leading European
banks for a period of time equivalent to the Index Maturity specified on the face hereof
commencing on that Interest Reset Date in a principal amount not less than the equivalent of
U.S.$1 million in euro.

     (iii) If the banks so selected by the Calculation Agent are not quoting as set forth
above, the EURIBOR rate for that Interest Determination Date shall remain the EURIBOR for
the immediately preceding Interest Reset Period, or, if there was no Interest Reset Period,
the rate of interest payable shall be the Initial Interest Rate set forth on the face
hereof.

          “Euro-zone” means the region comprised of member states of the European Union that
adopt the single currency in accordance with the relevant treaty of the European Union, as amended.

          Determination of Federal Funds Rate. If the Base Rate set forth on the face
hereof is the Federal Funds Rate, this Security will bear interest for each Interest Reset Period
at the interest rate calculated with reference to the Federal Funds Rate and the Spread, Spread
Multiplier or other formula, if any, set forth on the face hereof. Unless otherwise set forth on
the face hereof, the “Federal Funds Rate” means, with respect to any Interest Determination
Date pertaining thereto, the rate on such date for federal funds as published in H.15(519) under
the caption “Federal Funds (Effective)” as such rate is displayed on Moneyline Telerate
Page 120 (or

 

 

 8

any other page as may replace such page on such service) (?Telerate Page 120”). If such
rate does not appear on Telerate Page 120 or is not yet published in H.15(519) by 3:00 P.M., New
York City time, on the Calculation Date pertaining to such Interest Determination Date, the Federal
Funds Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update,
or such other recognized electronic source used for the purpose of displaying such rate, under the
caption “Federal Funds (Effective)”. If by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date such rate does not appear on
Telerate Page 120 or is not yet published in H.15(519), H.15 Daily Update or such other recognized
electronic source, the Federal Funds Rate for such Interest Determination Date will be calculated
by the Calculation Agent and will be the average of the rates for the last transaction in overnight
Federal Funds arranged by three leading dealers of Federal Funds transactions in The City of New
York, which dealers have been selected by the Calculation Agent (after consultation with the
Company), as of 9:00 A.M., New York City time, on such Interest Determination Date;
provided, however, that, if fewer than three dealers are quoting as mentioned in
this sentence, the interest rate for the period commencing on the Interest Reset Date following
such Interest Determination Date will be the interest rate in effect on such Interest Determination
Date.

          Determination of LIBOR. If the Base Rate set forth on the face hereof is LIBOR, this
Security will bear interest for each Interest Reset Period at the interest rate calculated with
reference to LIBOR and the Spread, Spread Multiplier or other formula, if any, set forth on the
face hereof. Unless otherwise set forth on the face hereof, “LIBOR” means the rate
determined by the Calculation Agent in accordance with the following provisions:

     (i) If “LIBOR Reuters” is specified on the face hereof, LIBOR will be the average of
the offered rates for deposits in the LIBOR Currency having the Index Maturity set forth on
the face hereof on the applicable Interest Reset Date, as such rates appear on the
Designated LIBOR Page as of 11:00 A.M., London time, on that Interest Determination Date, if
at least two such offered rates appear on the Designated LIBOR Page.

     (ii) If “LIBOR Telerate” is specified on the face hereof, LIBOR will be the rate for
deposits in the LIBOR Currency having the Index Maturity set forth on the face hereof on the
applicable Interest Reset Date, as such rate appears on the Designated LIBOR Page as of
11:00 A.M., London time, on that Interest Determination Date. If such rate does not appear,
LIBOR for such Interest Determination Date will be determined as described in (iii) below.

     (iii) If the Designated LIBOR Page by its terms provides only for a single rate,
that single rate will be used regardless of whether the foregoing provisions require more
than one rate. With respect to an Interest Determination Date, if LIBOR Reuters is the
applicable method for determining LIBOR and fewer than two offered rates (or no rate, if
applicable) appear on the Designated LIBOR Page as specified in (i) above or if LIBOR

 

 

 9

Telerate is the applicable method for determining LIBOR and no rate appears on the
Designated LIBOR Page as specified in (ii) above, then LIBOR will be determined on the basis
of the offered rates at which deposits in the LIBOR Currency for the period of the Index
Maturity set forth on the face hereof on the Interest Determination Date and in a principal
amount that is representative of a single transaction in that market at that time are
offered by four major banks in the London interbank market at approximately 11:00 AM.,
London time, for the period commencing on the Interest Reset Date to prime banks in the
London interbank market. The Calculation Agent will select the four banks and request the
principal London office of each of those banks to provide a quotation of its rate for
deposits in the LIBOR Currency. If at least two quotations are provided, LIBOR for that
Interest Determination Date will be the average of those quotations. If fewer than two
quotations are provided as mentioned above, LIBOR will be the average of the rates quoted by
three major banks in the Principal Financial Center selected by the Calculation Agent at
approximately 11:00 A.M. in the Principal Financial Center, on the Interest Determination
Date for loans to leading European banks in the LIBOR Currency having the Index Maturity set
forth on the face hereof, for the period commencing on the Interest Reset Date and in a
principal amount that is representative for a single transaction in the LIBOR Currency in
that market at that time. The Calculation Agent will select the three banks referred to
above. If fewer than three banks selected by the Calculation Agent are quoting as mentioned
above, the interest rate for the period commencing on the Interest Reset Date following such
Interest Determination Date will be the interest rate in effect on such Interest
Determination Date.

     “LIBOR Currency” means the Designated LIBOR Currency specified on the face
hereof as to which LIBOR shall be calculated or, if no such currency is specified on the
face hereof, United States dollars.

     “Designated LIBOR Page” means, if “LIBOR Reuters” is specified on the face
hereof, the display on the Reuters Monitor Money Rates Service (or any successor service)
on the page specified on the face hereof (or any other page as may replace such page on such
service) for the purpose of displaying the London interbank rates of major banks for the
LIBOR Currency; or if “LIBOR Telerate” is specified on the face hereof or neither “LIBOR
Reuters” nor “LIBOR Telerate” is specified on the face hereof as the method of calculating
LIBOR, the display on Moneyline Telerate, Inc. (or any successor service,
“Telerate”) on the page specified on the face hereof (or any other page as may
replace such page on such service) for the purpose of displaying the London interbank rates
of major banks for the LIBOR Currency.

          Determination of Prime Rate. If the Base Rate set forth on the face hereof is
the Prime Rate, this Security will bear interest for each Interest Reset Period at the interest
rate calculated with reference to the Prime Rate and the Spread, Spread Multiplier or other
formula, if any, set forth on the face hereof. Unless otherwise set forth on the face hereof, the
“Prime Rate”

 

 

10

means, with respect to any Interest Determination Date pertaining thereto, the rate on such
date as published in H.15(519) under the caption “Bank Prime Loan” or, if not yet published
by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination
Date, the rate on such Interest Determination Date as published in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying such rate, under the caption “Bank
Prime Loan.”

          If the rate is not published in H.15 (519), H.15 Daily Update or another recognized electronic
source by 3:00 P.M., New York City time, on the Calculation Date, then the Calculation Agent will
determine the Prime Rate to be the average of the rates of interest publicly announced by each bank
that appears on the Reuters Screen US PRIME1 Page as that bank’s prime rate or base lending rate as
in effect for that Interest Determination Date. If at least one rate but fewer than four rates
appear on the Reuters Screen US PRIME1 Page on the Interest Determination Date, then the Prime Rate
will be the average of the prime rates or base lending rates quoted (on the basis of the actual
number of days in the year divided by a 360-day year) as of the close of business on the Interest
Determination Date by three major money center banks in the City of New York selected by the
Calculation Agent. If the banks selected by the Calculation Agent are not quoting as mentioned
above, the interest rate for the period commencing on the Interest Reset Date following such
Interest Determination Date will be the interest rate in effect on such Interest Determination
Date.

          “Reuters Screen US PRIME1 Page” means the display designated as Page “USPRIME1” on the
Reuters Monitor Money Rates Service (or any successor service, or such other page as may replace
the USPRIME1 Page on that service) for the purpose of displaying prime rates or base lending rates
of major United States banks.

          Determination of Treasury Rate. If the Base Rate set forth on the face hereof is the
Treasury Rate, this Security will bear interest for each Interest Reset Period at the interest rate
calculated with reference to the Treasury Rate and the Spread, Spread Multiplier or other formula,
if any, set forth on the face hereof. Unless otherwise set forth on the face hereof, the
“Treasury Rate” means, with respect to any Interest Determination Date pertaining thereto,
the rate for the auction of direct obligations of the United States (“Treasury bills”) held
on such Interest Determination Date having the Index Maturity set forth on the face hereof under
the caption “INVESTMENT RATE” on the display on Moneyline Telerate on page 56 (or any other page as
may replace such page on such service) (“Telerate Page 56”) or page 57 (or any other page
as may replace such page on such service) (“Telerate Page 57”) by 3:00 P.M., New York City
time, on the Calculation date for that Interest Determination Date.

          The following procedures will be followed if the Treasury Rate cannot be determined as
described above:

 

 

11

          If the rate is not published by 3:00 P.M., New York City time, on the Calculation Date, the
Treasury Rate will be the Bond Equivalent Yield of the auction rate of such Treasury bills as
published in H.15 Daily Update or such recognized electronic source used for the purpose of
displaying such rate under the caption “U.S. Government securities/ Treasury bills/Auction high.”

          If the rate is not published by 3:00 P.M., New York City time, on the Calculation Date and
cannot be determined as described in the immediately preceding paragraph, the Treasury Rate will be
the Bond Equivalent Yield of the auction rate of such Treasury bills as otherwise announced by the
United States Department of Treasury.

          If the results of the most recent auction of Treasury bills having the Index Maturity set
forth on the face hereof are not published or announced as described above by 3:00 P.M., New York
City time, on the Calculation Date, or if no auction is held on the Interest Determination Date,
then the Treasury Rate will be the Bond Yield Equivalent on such Interest Determination Date of
Treasury bills having the Index Maturity set forth on the face hereof as published in H.15(519)
under the caption “U.S. Government securities/Treasury bills/Secondary market” or, if not yet
published by 3:00 p.m., New York City time, on the related Calculation Date, the rate on such
Interest Determination Date of such Treasury Bills as published in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying such rate, under the caption “U.S.
Government securities/Treasury bills/Secondary market.”

          If such rate is not published in H.15 (519), H.15 Daily Update or another recognized
electronic source, then the Calculation Agent will determine the Treasury Rate to be the Bond Yield
Equivalent of the average of the secondary market bid rates, as of approximately 3:30 P.M., New
York City time, on the Interest Determination Date of three leading primary United States
government securities dealers for the issue of Treasury bills with a remaining maturity closest to
the Index Maturity set forth on the face hereof. The Calculation Agent will select the three
dealers referred to above.

          If fewer than three dealers are quoting as described above, the interest rate for the period
commencing on the Interest Reset Date following such Interest Determination Date will be the
interest rate in effect on such Interest Determination Date.

          “Bond Equivalent Yield” means a yield (expressed as a percentage) calculated in
accordance with the following formula:

	 	 	 	 	 	 	 
	

	 	Bond Equivalent Yield =
	 	D x N
	 	x 100
	

	 	 	 	 	 	 
	 	 	 	 	360 - (D x M)

 

 

12

where “D” refers to the applicable per annum rate for Treasury bills quoted on a bank discount
basis, “N” refers to 365 or 366, as the case may be, and “M” refers to the actual number of days in
the applicable Interest Reset Period.

          Determination of CMT Rate. If the Base Rate set forth on the face hereof is
the CMT Rate, this Security will bear interest for each Interest Reset Period at the interest rate
calculated with reference to the CMT Rate and the Spread, Spread Multiplier, or other formula, if
any, set forth on the face hereof. Unless otherwise set forth on the face hereof, the “CMT
Rate” means, with respect to any Interest Determination Date pertaining thereto, the rate
displayed on the Designated CMT Telerate Page (as defined below) under the caption “. . . Treasury
Constant Maturities . . . Federal Reserve Board Release H.15 . . . Mondays Approximately 3:45
P.M.”, under the column for the Designated CMT Maturity Index (as defined below) for (i) if the
Designated CMT Telerate Page is 7051 or any successor page, the rate on such Interest Determination
Date and (ii) if the Designated CMT Telerate Page is 7052 or any successor page, the rate for the
weekly or the monthly average, as applicable, ended immediately preceding the week or month in
which the related Interest Determination Date occurs. If such rate is no longer displayed on the
relevant page, or if not displayed by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the interest rate for such Interest
Determination Date shall be the rate for the Designated CMT Maturity Index as published in
H.15(519). If such rate is no longer published, or if not published by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such Interest Determination Date, then the interest
rate for such Interest Determination Date shall be the rate for the Designated CMT Maturity Index
(or other United States Treasury rate for the Designated CMT Maturity Index) as may then be
published by either the Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines (with the concurrence of the
Company) to be comparable to the rate formerly displayed on the Designated CMT Telerate Page and
published in H.15(519). If such information is not provided by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, then the interest rate for
such Interest Determination Date shall be calculated by the Calculation Agent and shall be a yield
to maturity, based on the arithmetic average of the secondary market closing offer side prices as
of approximately 3:30 P.M., New York City time, on such Interest Determination Date, reported by
three leading primary United States government securities dealers (each, a “Reference
Dealer”) in The City of New York, for the most recently issued direct noncallable fixed rate
obligations of the United States (“U.S. Treasury Notes”) with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. The three Reference Dealers shall be determined
by (i) the selection of five Reference Dealers by the Calculation Agent (after consultation with
the Company) and (ii) the elimination of the Reference Dealers providing the highest (or, in the
event of equality, one of the highest) and the lowest (or, in the event of equality, one of the
lowest) quotations for such Interest Determination Date. If the Calculation Agent cannot obtain
three such U.S. Treasury Note quotations, the interest rate for such Interest Determination Date
shall be calculated by the Calculation Agent

 

 

13

and shall be a yield to maturity based on the arithmetic average of the secondary market offer
side prices as of approximately 3:30 P.M., New York City time, on the Interest Determination Date
reported, according to their written records, by three Reference Dealers in The City of New York,
selected in the manner described above, for U.S. Treasury Notes with an original maturity of the
number of years that is the next highest to the Designated CMT Maturity Index and a remaining term
to maturity closest to the Designated CMT Maturity Index, which has an outstanding balance of at
least $100 million. If only three or four of such Reference Dealers are quoting as described
above, then the interest rate shall be based on the arithmetic average of the offer side prices so
obtained from all such Reference Dealers, without eliminating the Reference Dealers providing the
highest and the lowest of such quotes. If fewer than three such Reference Dealers are quoting as
described above, the interest rate for the period commencing on the Interest Reset Date following
such Interest Determination Date will be the interest rate in effect on such Interest Determination
Date. If two such U.S. Treasury Notes have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the quotes for the U.S. Treasury Note with the shorter remaining
term to maturity shall be used.

          “Designated CMT Telerate Page” means the display on Moneyline Telerate on the
page set forth on the face hereof (or any other page as may replace such page on that
service for the purpose of displaying treasury constant maturities as reported in
H.15(519)). If no such page is so specified, the Designated CMT Telerate Page shall be
7052.

          “Designated CMT Maturity Index” means the original period to maturity of the
U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified on the face
hereof with respect to which the CMT Rate will be calculated. If no such maturity is so
specified, the Designated CMT Maturity Index shall be two years.

          References herein to “U.S. dollars” or “U.S. $” or “$” are to the
currency of the United States of America.

          Section 4. Redemption. If so specified on the face hereof, the Company may at
its option redeem this Security in whole or from time to time in part in increments of $1,000
(provided that any remaining principal amount of this Security shall not be less than the Minimum
Denomination specified on the face hereof) on or after the date designated as the Initial
Redemption Date on the face hereof at 100% of the unpaid principal amount hereof or the portion
thereof redeemed (or, if this Security is a Discount Security, such lesser amount as is provided
for below) multiplied by the Initial Redemption Percentage specified on the face hereof, together
with accrued interest to the Redemption Date. Such Initial Redemption Percentage shall decline at
each anniversary of the Initial Redemption Date by an amount equal to the Annual Redemption
Percentage Reduction, if any, specified on the face hereof until the Redemption Price is 100% of
the unpaid principal amount hereof. The Company may exercise such option by causing the Trustee to
mail a notice of such redemption at least 30 but not more than 60 days

 

 

14

prior to the Redemption Date. In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof shall be issued in the name of the Holder
hereof upon the cancellation hereof. If less than all of the Securities with like tenor and terms
to this Security are to be redeemed, the Securities to be redeemed shall be selected by the Trustee
by such method as the Trustee shall deem fair and appropriate. However, if less than all the
Securities of the series with differing tenor and terms to this Security are to be redeemed then
the Company in its sole discretion shall select the particular Securities to be redeemed and shall
notify the Trustee in writing thereof at least 45 days prior to the relevant Redemption Date.

          Section 5. Repayment. If so specified on the face hereof, this Security shall be
repayable prior to the Stated Maturity Date at the option of the Holder on each applicable Optional
Repayment Date shown on the face hereof at a repayment price equal to 100% of the principal amount
to be repaid, together with accrued interest to the Repayment Date. In order for this Security to
be repaid, the Trustee must receive at least 30 but not more than 45 days prior to an Optional
Repayment Date, this Security with the form attached hereto entitled “Option to Elect
Repayment” duly completed. Any tender of this Security for repayment shall be irrevocable.
The repayment option may be exercised by the Holder of this Security in whole or in part in
increments of $1,000 (provided that any remaining principal amount of this Security shall not be
less than the Minimum Denomination specified on the hereof). Upon any partial repayment, this
Security shall be canceled and a new Security or Securities for the remaining principal amount
hereof shall be issued in the name of the Holder of this Security.

          Section 6. Discount Securities. If this Security (such Security being
referred to as a “Discount Security”) (a) has been issued at an Issue Price lower, by more
than a de minimis amount (as determined under United States federal income tax
rules applicable to original issue discount instruments), than the stated redemption price at
maturity (as defined below) hereof and (b) would be considered an original issue discount security
for United States federal income tax purposes, then the amount payable on this Security in the
event of redemption by the Company, repayment at the option of the Holder or acceleration of the
maturity hereof, in lieu of the principal amount due at the Stated Maturity Date hereof, shall be
the Amortized Face Amount (as defined below) of this Security as of the date of such redemption,
repayment or acceleration. The “Amortized Face Amount” of this Security shall be the
amount equal to the sum of (a) the Issue Price (as set forth on the face hereof) plus (b) the
aggregate of the portions of the original issue discount (the excess of the amounts considered as
part of the “stated redemption price at maturity” of this Security within the meaning of Section
1273(a)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), whether
denominated as principal or interest, over the Issue Price of this Security) which shall
theretofore have accrued pursuant to Section 1272 of the Code (without regard to Section 1272(a)(7)
of the Code) from the date of issue of this Security to the date of determination, minus (c) any
amount considered as part of the “stated redemption price at maturity” of this Security which has
been paid on this Security from the date of issue to the date of determination.

 

 

15

          Section 7. Modification and Waivers; Obligation of the Company Absolute. The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series. Such amendment may be effected under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of not less than a majority in principal
amount of all Outstanding Securities of each series affected thereby. The Indenture also contains
provisions permitting the Holders of not less than a majority in principal amount of the
Outstanding Securities of any series at the time, on behalf of the Holders of all Outstanding
Securities of such series, to waive compliance by the Company with certain provisions of the
Indenture. Provisions in the Indenture also permit the Holders of not less than a majority in
principal amount of all Outstanding Securities of any series to waive on behalf of all of the
Holders of Securities of such series certain past defaults under the Indenture and their
consequences. Any such consent or waiver shall be conclusive and binding upon the Holder of this
Security and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Security.

          The Securities are unsecured and rank pari passu with all other unsecured and
unsubordinated indebtedness of the Company.

          No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of (and premium, if any) and interest on this Security at the times, place and rate,
and in the Specified Currency herein prescribed, except as set forth in Section 2 on the reverse
hereof.

          Section 8. Defeasance and Covenant Defeasance. The Indenture contains provisions for
defeasance at any time of (a) the entire indebtedness of the Company on this Security and (b)
certain restrictive covenants and the related defaults and Events of Default, upon compliance by
the Company with certain conditions set forth therein, which provisions apply to this Security,
unless otherwise specified on the face hereof.

          Section 9. Minimum Denominations. Authorized Denominations. Unless otherwise
provided on the face hereof, this Security is issuable only in registered form without coupons in
denominations of $2,000 or any amount in excess thereof which is an integral multiple of $1,000.
If this Security is denominated in a Specified Currency other than U.S. dollars or is a Discount
Security, this Security shall be issuable in the denominations set forth on the face hereof.

          Section 10. Registration of Transfer. As provided in the Indenture and subject to
certain limitations herein and therein set forth, the transfer of this Security is registrable in
the Security Register upon surrender of this Security for registration of transfer at a Place of
Payment

 

 

16

for the series of Securities of which this Security forms a part, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Securities of this series, of like authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee or transferees.

          If the registered owner of this Security is the Depository (such a Security being referred to
as a “Global Security”), and (i) the Depository is at any time unwilling or unable to
continue as depository and a successor depository is not appointed by the Company within 90 days
following notice to the Company, or (ii) an Event of Default occurs, the Company will issue
Securities in certificated form in exchange for this Global Security. In addition, the Company may
at any time, and in its sole discretion, determine not to have Securities represented by a Global
Security and, in such event, will issue Securities in certificated form in exchange in whole for
this Global Security representing such Security. In any exchange pursuant to this paragraph, the
Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and
delivery of individual Securities of this series in exchange for this Global Security, will
authenticate and deliver individual Securities of this series in certificated form in an aggregate
principal amount equal to the principal amount of this Global Security in exchange herefor.
Securities issued in exchange for this Global Security pursuant to this paragraph shall be
registered in such names and in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall instruct the Trustee.
None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any
responsibility or liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in this Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests. For purposes of the
Indenture, this Global Security constitutes a Security issued in permanent global form. Securities
so issued in certificated form will be issued in denominations of $2,000 (or such other Minimum
Denomination specified on the face hereof) or any amount in excess thereof which is an integral
multiple of $1,000 (or such Minimum Denomination) and will be issued in registered form only,
without coupons.

          As provided in the Indenture and subject to certain limitations therein and herein set
forth, this Security is exchangeable for a like aggregate principal amount of Securities of this
series of different authorized denominations but otherwise having the same terms and conditions, as
requested by the Holder hereof surrendering the same.

          No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

          Prior to due presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Holder as the owner

 

 

17

hereof for all purposes, whether or not this Security be overdue, and none of the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

          Section 11. Events of Default. If an Event of Default with respect to the Securities
of the series of which this Security forms a part shall have occurred and be continuing, the
principal of this Security may be declared due and payable in the manner and with the effect
provided in the Indenture.

          Section 12. Defined Terms. All terms used in this Security which are defined in the
Indenture and are not otherwise defined herein shall have the meanings assigned to them in the
Indenture.

          Section 13. Governing Law. Unless otherwise specified on the face hereof, this
Security shall be governed by and construed in accordance with the law of the State of New York.

 

 

OPTION TO ELECT REPAYMENT

          The undersigned hereby irrevocably requests and instructs the Company to repay this Security
(or the portion thereof specified below), pursuant to its terms, on the “Optional Repayment
Date” first occurring after the date of receipt of the within Security as specified below (the
“Repayment Date”), at a Repayment Price equal to 100% of the principal amount thereof,
together with interest thereon accrued to the Repayment Date, to the undersigned at:

(Please Print or Type Name and Address of the Undersigned.)

          For this Option to Elect Repayment to be effective, this Security with the Option to Elect
Repayment duly completed must be received at least 30 but not more than 45 days prior to the
Optional Repayment Date (or, if such Repayment Date is not a Business Day, the next succeeding
Business Day) by the Company at its office or agency in The City of New York, which will be located
initially at the office of the Trustee at 4 New York Plaza, 15th Floor, New York, New
York 10004.

          If less than the entire principal amount of the within Security is to be repaid, specify the
portion thereof (which shall be $1,000 or an integral multiple thereof) which is to be repaid:
$                     .

          If less than the entire principal amount of this Security is to be repaid, specify the
denomination(s) of the Security(ies) to be issued for the unpaid amount ($2,000 or any integral
multiple of $1,000; provided that any remaining principal amount of this Security shall not
be less than the Minimum Denomination): $                     .

Dated:                     

 Note: The signature to this Option to Elect Repayment must correspond with
the name as written upon the face of the within Security in every particular
without alteration or enlargement or any change whatsoever.

 

 

ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations:

	 	 	 
	

	 	TEN COM  -  as tenants in common
	 
	

	 	TEN ENT  -  as tenants by the entireties
	 
	

	 	JT TEN   -  as joint tenants with right of survivorship and not as
	

	 	          tenants in common

          UNIF
GIFT MIN ACT  -  Custodian

(Cust.)                 (Minor)

                    Under Uniform Gifts to Minors Act

                                        

(State)

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, the undersigned

hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER

     IDENTIFYING NUMBER OF ASSIGNEE

                                        

          Please print or type name and address, including zip code of assignee

the within Security of EATON CORPORATION and all rights thereunder and does hereby irrevocably
constitute and appoint

                                                                                                                                                                Attorney

to transfer the said Security on the books of the within-named Company, with full power of
substitution in the premises.

Dated

SIGNATURE GUARANTEED:

	NOTICE:	 	The signature to this assignment must correspond
with the name as it appears upon the face of the Security in
every particular, without alteration or enlargement or any
change whatsoever.EX-4.3

 

Exhibit 4.3

[FACE OF NOTE]

CUSIP NO.

REGISTERED

PRINCIPAL AMOUNT

No. FX -

EATON CORPORATION

MEDIUM-TERM NOTE

(FIXED RATE)

          If the registered owner of this Security (as indicated below) is The Depository Trust Company
(the “Depository”) or a nominee of the Depository, this Security is a Global Security and
the following two legends apply:

Unless this certificate is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York, New York) to the issuer or its agent for registration of
transfer, exchange or payment, and such certificate issued is registered in the name of CEDE & CO.,
or such other name as requested by an authorized representative of the Depository, ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the
registered owner hereof, CEDE & CO., has an interest herein.

Unless and until this certificate is exchanged in whole or in part for Securities in certificated
form, this certificate may not be transferred except as a whole by the Depository to a nominee
thereof or by a nominee thereof to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor of the Depository or a nominee of such successor.

IF APPLICABLE, THE “TOTAL AMOUNT OF OID”, “YIELD TO MATURITY” AND “INITIAL
ACCRUAL PERIOD OID” (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL BE COMPLETED SOLELY FOR
THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT (“OID”) RULES.

 

 

 2

	 	 	 
	ISSUE PRICE:

	 	OPTION TO ELECT REPAYMENT: o YES o NO
	 
	 	 
	ORIGINAL ISSUE DATE:

	 	OPTIONAL REPAYMENT DATE[S]:
	 
	 	 
	STATED MATURITY DATE:

	 	MINIMUM DENOMINATION:
	

	 	o $2,000
	

	 	o Other:
	 
	 	 
	SPECIFIED CURRENCY:
	 	ADDITIONAL AMOUNTS:
	United States Dollars:

	 	 
	o YES o NO

	 	DEFEASANCE: o YES o NO
	 
	 	 
	Foreign Currency:

	 	COVENANT DEFEASANCE: o YES o NO
	 
	 	 
	EXCHANGE RATE AGENT:

	 	TOTAL AMOUNT OF OID:
	 
	 	 
	OPTION TO RECEIVE PAYMENTS IN

SPECIFIED CURRENCY OTHER THAN

	 	YIELD TO MATURITY:
	U.S. DOLLARS: o YES o NO

	 	INITIAL ACCRUAL PERIOD OID:
	 
	 	 
	INTEREST RATE:

	 	SINKING FUND:
	 
	 	 
	PRINCIPAL FINANCIAL CENTER:
	 	 
	 
	 	 
	INTEREST PAYMENT DATES IF OTHER THAN

APRIL 15 AND OCTOBER 15:
	 	 
	 
	 	 
	REGULAR RECORD DATES IF OTHER

THAN APRIL 1 AND OCTOBER 1:
	 	 
	 
	 	 
	OPTIONAL REDEMPTION: o YES o NO
	 	 
	 
	 	 
	INITIAL REDEMPTION DATE:
	 	 
	 
	 	 
	INITIAL REDEMPTION PERCENTAGE:
	 	 
	 
	 	 
	ANNUAL REDEMPTION PERCENTAGE REDUCTION:
	 	 
	 
	 	 
	OTHER/DIFFERENT PROVISIONS:
	 	 

 

 

 3

          EATON CORPORATION, an Ohio corporation (herein referred to as the “Company”,
which term includes any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to                                         , or registered assigns, the principal
sum of                                          on the Stated Maturity Date shown above (except to the extent redeemed or
repaid prior to the Stated Maturity Date) and to pay interest, if any, thereon at the Interest Rate
shown above from the Original Issue Date shown above or from the most recent Interest Payment Date
to which interest, if any, has been paid or duly provided for, semiannually on April 15 and October
15 of each year (unless other Interest Payment Dates are shown on the face hereof) (each, an
“Interest Payment Date”) until the principal hereof is paid or made available for payment
and on the Stated Maturity Date, any Redemption Date or Repayment Date (such terms are together
hereinafter referred to as the “Maturity Date” with respect to the principal repayable on
such date); provided, however, that any payment of principal (or premium, if any)
or interest, if any, to be made on any Interest Payment Date or on the Maturity Date that is not a
Business Day (as defined below) shall be made on the next succeeding Business Day with the same
force and effect as if made on such Interest Payment Date or the Maturity Date, as the case may be,
and no additional interest, if any, shall accrue on the amount so payable as a result of such
delayed payment. For purposes of this Security, unless otherwise specified on the face hereof,
“Business Day” means any day that is not a Saturday or Sunday and that is neither a legal
holiday nor a day on which commercial banks are authorized or required by law, regulation or
executive order to close in The City of New York; provided, however, that, if the
Specified Currency shown above is a foreign currency, such day is also not a day on which
commercial banks are authorized or required by law, regulation or executive order to close in the
Principal Financial Center (as defined below) of the country issuing the Specified Currency (or, if
the Specified Currency is the euro, such day is also a day on which the Trans-European Automated
Real-Time Gross Settlement Express Transfer (TARGET) System is open). “Principal Financial
Center” means the capital city of the country issuing the Specified Currency except that with
respect to United States dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch
guilders, South African rand and Swiss francs, the “Principal Financial Center” shall be The City
of New York, Sydney and (solely in the case of the Specified Currency) Melbourne, Toronto,
Frankfurt, Amsterdam, Johannesburg and Zurich, respectively.

          Any interest hereon will accrue from, and including, the immediately preceding Interest
Payment Date in respect of which interest, if any, has been paid or duly provided for (or from, and
including, the Original Issue Date if no interest has been paid or duly provided for) to, but
excluding, the succeeding Interest Payment Date or the Maturity Date, as the case may be. The
interest, if any, so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture and subject to certain exceptions described herein
(referred to on the reverse hereof), be paid to the person (the “Holder”) in whose name
this Security (or one or more Predecessor Securities) is registered at the close of business on the
April 1 or October 1 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date (unless other Regular Record Dates are specified on the face hereof) (each, a
“Regular Record Date”); provided, however, that, if this Security was
issued between a Regular Record Date and the initial Interest Payment Date relating to such Regular
Record Date, interest, if any, for the period beginning on the Original Issue Date and ending on
such initial Interest Payment Date shall be paid on the Interest Payment Date following the next
succeeding Regular Record Date to the Holder hereof on such next succeeding Regular Record Date;
and provided further that interest, if any, payable on the Maturity Date will be
payable to the person

 

 

 4

to whom the principal hereof shall be payable. Any such interest not so punctually paid or
duly provided for on any Interest Payment Date other than the Maturity Date (“Defaulted
Interest”) will forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a special record date (the “Special Record Date”)
for the payment of such Defaulted Interest to be fixed by the Trustee (referred to on the reverse
hereof), notice whereof shall be given to the Holder of this Security not less than ten days prior
to such Special Record Date, or may be paid at any time in any other lawful manner, all as more
fully provided in the Indenture.

          Unless otherwise specified above, all payments in respect of this Security will be made in
U.S. dollars regardless of the Specified Currency shown above unless the Holder hereof makes the
election described below. If the Specified Currency shown above is other than U.S. dollars, the
Exchange Rate Agent (referred to on the reverse hereof) will arrange to convert any such amounts so
payable in respect hereof into U.S. dollars in the manner described on the reverse hereof;
provided, however, that the Holder hereof may, if so indicated above, elect to
receive all or any specified portion of any payment of principal, premium, if any, and/or interest,
if any, in respect of this Security in such Specified Currency by delivery of a written request to
the corporate trust office of the Trustee in The City of New York, on or prior to the applicable
Regular Record Date or at least fifteen days prior to the Maturity Date, as the case may be. Such
request may be in writing (mailed or hand delivered) or by cable, telex or other form of facsimile
transmission. The Holder hereof may elect to receive payment in such Specified Currency for all
principal, premium, if any, and interest payments, if any, and need not file a separate election
for each payment. Such election will remain in effect until revoked by written notice to the
Trustee, but written notice of any such revocation must be received by the Trustee on or prior to
the applicable Regular Record Date or at least fifteen days prior to the Maturity Date, as the case
may be.

          Notwithstanding the foregoing, if the Company determines that the Specified Currency is not
available for making payments in respect hereof due to the imposition of exchange controls or other
circumstances beyond the Company’s control, or is no longer used by the government of the country
issuing such currency or for the settlement of transactions by public institutions of or within the
international banking community, then the Holder hereof may not so elect to receive payments in the
Specified Currency and any such outstanding election shall be automatically suspended, until the
Company determines that the Specified Currency is again available for making such payments. If
the euro has been substituted for such Specified Currency, the Company may at its option (or shall,
if so required by applicable law) without the consent of the holder of this Security effect the
payment of principal of or premium, if any, or interest on this Security in euro in lieu of such
Specified Currency in conformity with legally applicable measures taken pursuant to, or by virtue
of, the Treaty establishing the European Community, as amended. Any payment made under such
circumstances in U.S. dollars or euro where the required payment is in a Specified Currency will
not constitute a default under the Indenture.

          In the event of an official redenomination of the Specified Currency, the obligations of the
Company with respect to payments on this Security, in all cases, shall be deemed immediately
following such redenomination to provide for payment of that amount of

 

 

 5

redenominated currency representing the amount of such obligations immediately before such
redenomination. In no event shall any adjustment be made to any amount payable hereunder as a
result of any change in the value of the Specified Currency shown above relative to any other
currency due solely to fluctuations in exchange rates.

          Until this Security is paid in full or payment therefor in full is duly provided for, the
Company will at all times maintain a Paying Agent (which Paying Agent may be the Trustee) in The
City of New York (which, unless otherwise specified above, shall be the “Place of
Payment”). The Company has initially appointed JPMorgan Chase Bank, N.A., at its office in The
City of New York as Paying Agent.

          Unless otherwise shown above, payment of interest on this Security (other than on the Maturity
Date) will be made by check mailed to the registered address of the Holder hereof as of the Regular
Record Date; provided, however, that, if (i) the Specified Currency is U.S. dollars
and this is a Global Security (as defined on the reverse hereof) or (ii) the Specified Currency is
a Foreign Currency, and the Holder has elected to receive payments in such Specified Currency as
provided for above, such interest payments will be made by transfer of immediately available funds,
but only if appropriate wire transfer instructions have been received in writing by the Trustee on
or prior to the applicable Regular Record Date. Simultaneously with any election by the Holder
hereof to receive payments in respect hereof in the Specified Currency (if other than U.S.
dollars), such Holder may provide appropriate wire transfer instructions to the Trustee, and all
such payments will be made in immediately available funds to an account maintained by the payee
with a bank, but only if such bank has appropriate facilities therefor. Unless otherwise specified
above, the principal hereof (and premium, if any) and interest, if any, hereon payable on the
Maturity Date will be paid in immediately available funds upon surrender of this Security at the
office of the Trustee maintained for that purpose in the Borough of Manhattan, The City of New York
(or at such other location as may be specified above). The Company will pay any administrative
costs imposed by banks in making payments in immediately available funds but, except as otherwise
provided under Additional Amounts above, any tax, assessment or governmental charge imposed upon
payments will be borne by the Holders of the Securities in respect of which such payments are made.

          Interest on this Security, if any, will be computed on the basis of a 360-day year of twelve
30-day months.

          REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE
HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT
THIS PLACE.

          Unless the certificate of authentication hereon has been executed by the Trustee by manual
signature, this Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

 

 

 6

          IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
facsimile corporate seal.

	 	 	 	 	 	 	 
	 	 	EATON CORPORATION	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	 	 	Name:

Title:	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	 	 	Name:

Title:	 	 

[CORPORATE SEAL]

Attest:                                                             

          Name:

          Title: Secretary
 

Dated:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture

	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,

     as Trustee	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	 	 	Authorized Officer	 	 

 

 

[REVERSE OF NOTE]

EATON CORPORATION

MEDIUM-TERM NOTE

          Section 1. General. This Security is one of a duly authorized issue of securities
(herein called the “Securities”) of the Company, issued and to be issued in one or more
series under an Indenture, dated as of April 1, 1994, as it may be supplemented from time to time
(herein called the “Indenture”), between the Company and JPMorgan Chase Bank, N.A.
(formerly known as Chemical Bank), Trustee (herein called the “Trustee”, which term
includes any successor trustee under the Indenture with respect to a series of which this Security
is a part), to which Indenture and all indentures supplemental thereto, reference is hereby made
for a statement of the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, limited in aggregate principal amount to U.S.$800,000,000 (or the
equivalent thereof in one or more foreign currencies) or such other principal amount as shall be
provided pursuant to the Indenture.

          Section 2. Payments. If the Specified Currency is other than U.S. dollars and the
Holder hereof fails to elect payment in such Specified Currency in accordance with the procedures
set forth on the face hereof, the amount of U.S. dollar payments to be made in respect hereof will
be determined by the Exchange Rate Agent specified on the face hereof or a successor thereto (the
“Exchange Rate Agent”) based on the highest bid quotation in The City of New York at
approximately 11:00 A.M., New York City time, on the second Business Day preceding the applicable
payment date received by the Exchange Rate Agent from three recognized foreign exchange dealers
(one of whom may be the Exchange Rate Agent) selected by the Exchange Rate Agent and approved by
the Company for the purchase by the quoting dealer of the Specified Currency for U.S. dollars for
settlement on such payment date in the aggregate amount of the Specified Currency payable to all
holders of Securities scheduled to receive U.S. dollar payments and at which the applicable dealer
commits to execute a contract. If three such bid quotations are not available, payments will be
made in the Specified Currency.

          If the Specified Currency is other than U.S. dollars and the Holder hereof has elected payment
in such Specified Currency in accordance with the procedures set forth on the face hereof and the
Specified Currency is not available due to the imposition of exchange controls or to other
circumstances beyond the Company’s control, the Company will be entitled to satisfy its obligations
to the Holder of this Security by making such payment in U.S. dollars on the basis of the noon
buying rate in The City of New York for cable transfers of such Specified Currency as certified for
customs purposes (or, if not so certified, as otherwise determined) by the Federal Reserve Bank of
New York (the “Market Exchange Rate”) as computed by the Exchange Rate Agent on the second
Business Day prior to the applicable payment date or, if the
Market Exchange Rate is then not available, on the basis of the most recently available Market
Exchange Rate or as otherwise indicated above. Any payment made under such circumstances

 

 

2

in U.S.
dollars where the required payment is in a Specified Currency will not constitute a default under
the Indenture.

          All determinations referred to above made by the Exchange Rate Agent shall be at its sole
discretion (except to the extent expressly provided that any determination is subject to approval
by the Company) and, in the absence of manifest error, shall be conclusive for all purposes and
binding on the Holder of this Security, and the Exchange Rate Agent shall have no liability
therefor.

          All currency exchange costs will be borne by the Company.

          References herein to “U.S. dollars” or “U.S. $” or “$” are to the
currency of the United States of America.

          Section 3. Redemption. If so specified on the face hereof, the Company may at its
option redeem this Security in whole or from time to time in part in increments of $1,000 (provided
that any remaining principal amount of this Security shall not be less than the Minimum
Denomination specified on the face hereof) on or after the date designated as the Initial
Redemption Date on the face hereof at 100% of the unpaid principal amount hereof or the portion
thereof redeemed (or, if this Security is a Discount Security, such lesser amount as is provided
for below) multiplied by the Initial Redemption Percentage specified on the face hereof, together
with accrued interest, if any, to the Redemption Date. Such Initial Redemption Percentage shall
decline at each anniversary of the Initial Redemption Date by an amount equal to the Annual
Redemption Percentage Reduction, if any, specified on the face hereof until the Redemption Price is
100% of the unpaid principal amount hereof. The Company may exercise such option by causing the
Trustee to mail a notice of such redemption at least 30 but not more than 60 days prior to the
Redemption Date. In the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof. If less than all of the Securities with like tenor and terms to this
Security are to be redeemed, the Securities to be redeemed shall be selected by the Trustee by such
method as the Trustee shall deem fair and appropriate. However, if less than all the Securities of
the series with differing tenor and terms to this Security are to be redeemed, then the Company in
its sole discretion shall select the particular Securities to be redeemed and shall notify the
Trustee in writing thereof at least 45 days prior to the relevant Redemption Date.

          Section 4. Repayment. If so specified on the face hereof, this Security shall be
repayable prior to the Stated Maturity Date at the option of the Holder on each applicable Optional
Repayment Date shown on the face hereof at a repayment price equal to 100% of the principal amount
to be repaid, together with accrued interest, if any, to the Repayment Date. In order for this
Security to be repaid, the Trustee must receive at least 30 but not more than 45 days prior to an
Optional Repayment Date, this Security with the form attached hereto entitled “Option to Elect
Repayment” duly completed. Any tender of this Security for repayment shall be
irrevocable. The repayment option may be exercised by the Holder of this Security in whole or in
part in increments of $1,000 (provided that any remaining principal amount of this Security shall
not be less than the Minimum Denomination specified on the face hereof). Upon any partial
repayment, this Security shall be canceled and a new Security or Securities for the remaining
principal amount hereof shall be issued in the name of the Holder of this Security.

 

 

3

          Section 5. Discount Securities. If this Security (such a Security being referred to
as a “Discount Security”) (a) has been issued at an Issue Price lower, by more than a
de minimis amount (as determined under United States federal income tax rules
applicable to original issue discount instruments), than the stated redemption price at maturity
(as defined below) hereof and (b) would be considered an original issue discount security for
United States federal income tax purposes, then the amount payable on this Security in the event of
redemption by the Company, repayment at the option of the Holder or acceleration of the maturity
hereof, in lieu of the principal amount due at the Stated Maturity Date hereof, shall be the
Amortized Face Amount (as defined below) of this Security as of the date of such redemption,
repayment or acceleration. The “Amortized Face Amount” of this Security shall be the
amount equal to the sum of (a) the Issue Price (as set forth on the face hereof) plus (b) the
aggregate of the portions of the original issue discount (the excess of the amounts considered as
part of the “stated redemption price at maturity” of this Security within the meaning of Section
1273(a)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), whether
denominated as principal or interest, over the Issue Price of this Security) which shall
theretofore have accrued pursuant to Section 1272 of the Code (without regard to Section 1272(a)(7)
of the Code) from the date of issue of this Security to the date of determination, minus (c) any
amount considered as part of the “stated redemption price at maturity” of this Security which has
been paid on this Security from the date of issue to the date of determination.

          Section 6. Modification and Waivers; Obligation of the Company Absolute. The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series. Such amendment may be effected under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of not less than a majority in principal
amount of Outstanding Securities of each series affected thereby. The Indenture also contains
provisions permitting the Holders of not less than a majority in principal amount of the
Outstanding Securities of any series, on behalf of the Holders of all Outstanding Securities of
such series, to waive compliance by the Company with certain provisions of the Indenture.
Provisions in the Indenture also permit the Holders of not less than a majority in principal amount
of all Outstanding Securities of any series to waive on behalf of all of the Holders of Securities
of such series certain past defaults under the Indenture and their consequences. Any such consent
or waiver shall be conclusive and binding upon the Holder of this Security and upon all future
Holders of this Security and of any Security issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon
this Security.

          The Securities are unsecured and rank pari passu with all other unsecured and unsubordinated
indebtedness of the Company.

          No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of (and premium, if any) and interest, if any, on this Security at the times, place
and rate, and in the Specified Currency herein prescribed, except as set forth in Section 2 on the
reverse hereof.

 

 

4

          Section 7. Defeasance and Covenant Defeasance. The Indenture contains provisions for
defeasance at any time of (a) the entire indebtedness of the Company on this Security and (b)
certain restrictive covenants and the related defaults and Events of Default, upon compliance by
the Company with certain conditions set forth therein, which provisions apply to this Security,
unless otherwise specified on the face hereof.

          Section 8. Minimum Denomination. Authorized Denominations. Unless otherwise
provided on the face hereof, this Security is issuable only in registered form without coupons in
denominations of $2,000 or any amount in excess thereof which is an integral multiple of $1,000.
If this Security is denominated in a Specified Currency other than U.S. dollars or is a Discount
Security, this Security shall be issuable in the denominations set forth on the face hereof.

          Section 9. Registration of Transfer. As provided in the Indenture and subject to
certain limitations herein and therein set forth, the transfer of this Security is registrable in
the Security Register upon surrender of this Security for registration of transfer at a Place of
Payment for the series of Securities of which this Security forms a part, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Securities of this series, of like authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee or transferees.

          If the registered owner of this Security is the Depository (such a Security being referred to
as a “Global Security”), and (i) the Depository is at any time unwilling or unable to
continue as depository and a successor depository is not appointed by the Company within 90 days
following notice to the Company or (ii) an Event of Default occurs, the Company will issue
Securities in certificated form in exchange for this Global Security. In addition, the Company may
at any time, and in its sole discretion, determine not to have Securities represented by a Global
Security and, in such event, will issue Securities in certificated form in exchange in whole for
this Global Security. In any exchange pursuant to this paragraph, the Company will execute, and
the Trustee, upon receipt of a Company Order for the authentication and delivery of individual
Securities of this series in exchange for this Global Security, will authenticate and deliver
individual Securities of this series in certificated form in an aggregate principal amount equal to
the principal amount of this Global Security in exchange herefor. Securities issued in
exchange for this Global Security pursuant to this paragraph shall be registered in such names
and in such authorized denominations as the Depository, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. None of the Company, the Trustee,
any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership interests in this
Global Security or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. For purposes of the Indenture, this Global Security constitutes a
Security issued in permanent global form. Securities so issued in certificated form will be issued
in denominations of $2,000 (or such other denomination as shall be specified on the face hereof) or
any amount in excess thereof which is an integral multiple of $1,000 and will be issued in
registered form only, without coupons.

 

 

5

          As provided in the Indenture and subject to certain limitations therein and herein set forth,
this Security is exchangeable for a like aggregate principal amount of Securities of this series of
different authorized denominations but otherwise having the same terms and conditions, as requested
by the Holder hereof surrendering the same.

          No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

          Prior to due presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Holder as the owner hereof for
all purposes, whether or not this Security be overdue, and none of the Company, the Trustee nor
any such agent shall be affected by notice to the contrary.

          Section 10. Events of Default. If an Event of Default with respect to the Securities
of the series of which this Security forms a part shall have occurred and be continuing, the
principal of this Security may be declared due and payable in the manner and with the effect
provided in the Indenture.

          Section 11. Defined Terms. All terms used in this Security which are defined in the
Indenture and are not otherwise defined herein shall have the meanings assigned to them in the
Indenture.

          Section 12. Governing Law. Unless otherwise specified on the face hereof, this
Security shall be governed by and construed in accordance with the law of the State of New York.

 

 

OPTION TO ELECT REPAYMENT

          The undersigned hereby irrevocably requests and instructs the Company to repay this Security
(or the portion thereof specified below), pursuant to its terms, on the “Optional Repayment
Date” first occurring after the date of receipt of this Security as specified below (the
“Repayment Date”), at a Repayment Price equal to 100% of the principal amount thereof,
together with interest thereon accrued to the Repayment Date, to the undersigned at:

(Please Print or Type Name and Address of the Undersigned.)

          For this Option to Elect Repayment to be effective, this Security with the Option to Elect
Repayment duly completed must be received at least 30 but not more than 45 days prior to the
Optional Repayment Date (or, if such Repayment Date is not a Business Day, the next succeeding
Business Day) by the Company at its office or agency in The City of New York, which will be located
initially at the office of the Trustee at 4 New York Plaza, 15th Floor, New York, New
York 10004.

          If less than the entire principal amount of this Security is to be repaid, specify the portion
thereof (which shall be $1,000 or an integral multiple thereof) which is to be repaid: $                     .

          If less than the entire principal amount of the within Security is to be repaid, specify the
denomination(s) of the Security(ies) to be issued for the unpaid amount ($2,000 or any integral
multiple of $1,000; provided that any remaining principal amount of this Security shall not
be less than the Minimum Denomination): $                     .

Dated:                     

 Note: The signature to this Option to Elect Repayment must correspond with
the name as written upon the face of this Security in every particular
without alteration or enlargement or any change whatsoever.

 

 

ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations:

TEN COM  -  as tenants in common

TEN ENT  -  as tenants by the entireties

JT TEN   -  as joint tenants with right of survivorship and not as

          tenants in common

UNIF GIFT
MIN ACT  -  Custodian

                                   (Cust.)                (Minor)

Under Uniform Gifts to Minors Act
 

                                                   

(State)

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, the undersigned

hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER

               
IDENTIFYING NUMBER OF ASSIGNEE

                                                            

Please print or type name and address, including zip code of assignee

the within Security of EATON CORPORATION and all rights thereunder and does hereby irrevocably
constitute and appoint

                                                                                                                                                                Attorney

to transfer the said Security on the books of the within-named Company, with full power of
substitution in the premises.

Dated

SIGNATURE GUARANTEED:

	NOTICE:	 	The signature to this assignment must correspond with
the name as it appears upon the face of the Security in every
particular, without alteration or enlargement or any change
whatsoever.

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