Document:

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                                                                  EXHIBIT 10 (G)

                                EATON CORPORATION
                         2007 ANNUAL REPORT ON FORM 10-K
                                   ITEM 15 (B)

                    EATON CORPORATION EXCESS BENEFITS PLAN II

     The Eaton Corporation Excess Benefits Plan II, an unfunded, nonqualified
deferred compensation plan adopted December 8, 2004, is set forth below, as
amended and restated effective January 1, 2008 and such other dates as may be
provided herein.

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

     2. Definitions. The following definitions are used throughout the Plan.

     (a) "Benefits Committee" means the Pension Administration Committee
comprised of corporate officers.

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

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

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

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

     (f) "Participant" means a participant in the Pension Plan who is eligible
to receive benefits under the Plan. The term "Participant" shall include the
beneficiary of a deceased Participant.

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

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

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

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

          (i) equals the aggregate amount of monthly income payable to the
     Participant under the Pension Plan on the normal benefit commencement date
     specified in the Pension Plan as determined under the normal retirement
     benefit formula of the Pension Plan before applying any provision reducing
     pension benefits because of the provisions of the Code limiting the maximum
     amount of an employee's compensation which may be taken into account for
     purposes of calculating benefits under the Pension Plan and before applying
     the maximum benefit limitations under Section 415 of the Code; and

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

     Notwithstanding the foregoing, a Participant's benefit under the Plan shall
be reduced by the present value of the amount to which the Participant would
have been entitled under the Eaton Corporation Excess Benefits Plan ("Plan I")
if the Participant had voluntarily terminated services without cause on December
31, 2004, and received a payment of the benefits in the form with the

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maximum value available from Plan I on the earliest possible date allowed under
Plan I to receive a payment of benefits following a termination of services
(such amount being hereinafter referred to as the "Grandfathered Amount").
Notwithstanding the foregoing, the Grandfathered Amount may increase to equal
the present value of the benefit the Participant actually becomes entitled to,
in the form and at the time actually paid, determined under the terms of Plan I
(including applicable limits under the Code), as in effect on October 3, 2004,
without regard to any further services rendered by the Participant after
December 31, 2004, or any other events affecting the amount of or the
entitlement to benefits (other than a participant election with respect to the
time or form of an available benefit). For purposes of calculating the present
value of a benefit under this paragraph, reasonable actuarial assumptions and
methods must be used.

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

     6. Benefit Payment Date. The amount of the benefit payable to a Participant
under Section 4 shall be calculated as of his "calculation date" which is the
first day of the month next following (i) the date of his separation from
service (within the meaning of Section 409A of the Code, meaning that a
Participant whose level of bona fide services is permanently decreased to no
more than twenty (20) percent of the average level of bona fide services
performed over the preceding 36-month period shall incur a separation from
service for purposes of the Plan) or (ii) if later in the case of a Participant
who was accruing a benefit under Appendix A or Appendix B of the Pension Plan on
January 1, 2003, the date he attains age 55. Such amount shall be credited with
interest based on the "applicable interest rate" determined under Section 417(e)
of the Code (in the manner used under the Pension Plan) until his benefit
payment date determined under this Section

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6. A Participant's benefit shall be paid on or about the first day of the third
month next following (i) the date of his separation from service (within the
meaning of Section 409A of the Code, as further described above) or (ii) if
later in the case of a Participant who was accruing a benefit under Appendix A
or Appendix B of the Pension Plan on January 1, 2003, the date he attains age
55. Notwithstanding the foregoing, in the case of a Participant who is
determined by the Corporation to be a "specified employee" within the meaning of
Section 409A of the Code and applicable Treasury regulations, payment shall not
in any event be made until the first business day of the month which is six (6)
months after the date of his separation from service hereunder (or, if earlier,
the date of death of the Participant). If the Participant receives payment of
the benefit hereunder before the normal benefit commencement date under the
Pension Plan, the benefit payable under Section 4 shall also be reduced by
applying the same factors that would be applied for such purpose under the
Pension Plan. In the event a Participant becomes entitled to an additional
benefit under the Plan after his calculation date (by reason of the additional
accrual of benefits under the Pension Plan while on long term disability, for
example), the amount of any such additional benefit shall be calculated as of
December 31 of each calendar year beginning with the year following the year in
which his initial calculation date falls and shall be paid to him within the
ninety (90) day period following.

     7. Form of Benefit.

     (a) The benefit payable under Section 4 shall be paid to the Participant in
a single sum payment. The benefit payable under Section 4 shall be actuarially
adjusted by using the same actuarial factors as are applied under the Pension
Plan for converting the normal form of benefit to an actuarially equivalent
optional benefit.

     (b) If the Participant has a vested interest under the Plan and dies prior
to commencement of any benefit under the Plan, the Company will pay a benefit to
the Participant's

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surviving spouse in the form of a single sum within ninety (90) days following
the Participant's date of death. This benefit shall be calculated in the same
manner provided under the Pension Plan. Notwithstanding the foregoing, a
Participant may designate a beneficiary other than his or her spouse (as
permitted under the Pension Plan except that no spousal consent shall be
required), with the benefit amount being determined in the same manner as
provided under the Pension Plan and payable in a lump sum form of payment only.

     8. Funding of Benefits.

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

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

     9. Administration of the Plan. The Benefits Committee shall administer the
Plan and shall keep a written record of this action and proceedings regarding
the Plan and all dates, records and documents relating to its administration of
the Plan. The Benefits Committee is authorized to

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interpret the Plan, to make, amend and rescind such rules as it deems necessary
for the proper administration of the Plan, to make all other determinations
necessary or advisable for the administration of the Plan and to correct any
defect or supply any omission or reconcile any inconsistency in the Plan in the
manner and to the extent that the Benefits Committee deems desirable to carry
the Plan into effect. The powers and duties of the Benefits Committee shall
include, without limitation, the following:

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

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

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

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

     10. Miscellaneous.

     (a) Nothing in the Plan shall confer upon a Participant the right to
continue in the employ of the Corporation or an affiliate of the Corporation or
shall limit or restrict the right of the Corporation or any affiliate to
terminate the employment of a Participant at any time or without cause.

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     (b) Neither the Corporation nor any Participant hereunder shall assign,
transfer or delegate this Plan or any rights or obligations hereunder except as
expressly provided herein. Without limiting the generality of the foregoing, no
right or interest under this Plan of a Participant shall be assignable or
transferable in any manner or be subject to alienation, anticipation, sale,
pledge, encumbrance or other legal process or in any manner be liable for or
subject to the debts or liabilities of any such Participant.

     (c) The Plan may be amended at any time by the Benefits Committee provided
such amendment does not have the effect of increasing, directly or indirectly,
the benefit of any Participant. The Plan may also be amended or terminated by
the Board of Directors at any time, and any amendment adopted by the Board of
Directors shall supersede any prior or later amendment adopted by the Benefits
Committee that is inconsistent with the action of the Board of Directors.
Subject to the provisions of Section 10(d) and Section 10(e), no amendment shall
have the effect of decreasing or impairing a Participant's accrued benefit. No
amendment may amend or modify the preceding sentence.

     (d) The Plan is intended to provide for the deferral of compensation in
accordance with the provisions of Section 409A of the Code and Treasury
Regulations and published guidance issued pursuant thereto. Accordingly, the
Plan shall be construed in a manner consistent with those provisions and may at
any time be amended in the manner and to the extent determined necessary or
desirable by the Corporation to reflect or otherwise facilitate compliance with
such provisions with respect to amounts deferred on or after January 1, 2005,
including as contemplated by Section 885(f) of the American Jobs Creation Act of
2004.

     (e) The Board of Directors shall have the authority, in its sole
discretion, to terminate the Plan and pay each Participant's entire benefit to
the Participant or, if applicable, his Beneficiary, pursuant to an irrevocable
action taken by the Board of Directors within the thirty

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(30) days preceding or the 12 months following a change in control of the
Corporation (within the meaning of Section 409A of the Code), provided that this
Section 10(e) will only apply to a payment under the Plan if all agreements,
methods, programs, and other arrangements sponsored by the service recipient
immediately after the time of the change in control event with respect to which
deferrals of compensation are treated as having been deferred under a single
plan within the meaning of Treasury Regulation Section 1.409A-1(c) (2) are
terminated and liquidated with respect to each Participant that experienced the
change in control event, so that under the terms of the termination and
liquidation all such Participants are required to receive all amounts of
compensation deferred under the terminated agreements, methods, programs, and
other arrangements within 12 months of the date the service recipient
irrevocably takes all necessary action to terminate and liquidate the
agreements, methods, programs and other arrangements. Solely for purposes of
this Section 10(e), where the change in control event results from an asset
purchase transaction, the applicable service recipient with the discretion to
liquidate and terminate the agreements, methods, programs, and other
arrangements is the service recipient that is primarily liable immediately after
the transaction for the payment of the deferred compensation.

     (f) The Plan is intended to be an "excess benefit plan" as defined in
Section 3(36) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and exempt from the provisions of Title I of ERISA pursuant to ERISA
Section 4(b)(5). In the event the Plan does not qualify for the exemption under
ERISA Section 4(b)(5) and it is also determined by a court of competent
jurisdiction or by an opinion of counsel that the Plan constitutes an employee
pension benefit plan within the meaning of Section 3(2) of ERISA which is not
exempt from the provisions of Sections 201, 301 and 401 of ERISA as a plan that
provides benefits for "management or highly compensated" employees within the
meaning of such Sections, the Plan shall terminate, and

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except for accrued benefits and benefits in pay status, no further benefits
shall accrue or be paid hereunder.

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

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

                              APPROVAL AND ADOPTION

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

-------------------------------------   Date: October 27, 2007
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                                                                  EXHIBIT 10 (H)

                                EATON CORPORATION
                         2007 ANNUAL REPORT ON FORM 10-K
                                   ITEM 15 (B)

                  EATON INCENTIVE COMPENSATION DEFERRAL PLAN II

                            EFFECTIVE JANUARY 1, 2005

                                2008 RESTATEMENT

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EATON INCENTIVE COMPENSATION DEFERRAL PLAN II

I. PURPOSE

The Incentive Compensation Deferral Plan II (the "Plan") enables employees who
contribute significantly to the success of Eaton Corporation ("Eaton" or the
"Company") to defer receipt of awards earned under incentive compensation plans
and certain other compensation. The purpose of the Plan is to help attract and
retain highly qualified individuals, to provide an incentive to those
individuals to improve the profitability, competitiveness and growth of the
Company, and to help align their interests with those of the shareholders.

II. ELIGIBILITY

All elected officers of the Company are eligible to participate in the Plan with
respect to amounts earned under the Executive Strategic Incentive Plan or any
other Eaton incentive plan made available for deferral hereunder by the
Committee. Such other executives as determined by the Committee shall also be
eligible to participate in the Plan with respect to any amounts earned under any
Eaton incentive compensation plan made available for deferral hereunder by the
Committee.

III. DEFINITIONS

The terms used herein shall have the following meanings:

Account--A bookkeeping account established by Eaton for a Participant to which
may be credited Deferred Incentive Compensation and earnings or losses thereon.

Agreement--A written agreement between Eaton and a Participant deferring the
receipt of Incentive Compensation and indicating the term of the deferral.

Beneficiary--The person or entity designated in writing by the Participant and
delivered to the Committee. If that person or entity is not living or in
existence at the time any unpaid balance of Deferred Incentive Compensation
becomes due after the death of a Participant, the term "Beneficiary" shall mean
the Participant's estate or legal representative or any person, trust or
organization designated in such Participant's will.

Board--The Board of Directors of Eaton.

Change in Control--Shall be deemed to occur upon the occurrence of (i) a change
in the ownership of Eaton, (ii) a change in effective control of Eaton, or (iii)
a change in the ownership of a substantial portion of the assets of Eaton. For
purposes of this definition, except as provided below, a change in the ownership
of a Eaton occurs on the date that any one (1) person, or more than one (1)
person acting as a group (as defined in Treasury Regulation Section
1.409A-3(i)(5)(v)(B)), acquires ownership of stock of Eaton that, together with
stock held by such person or group, constitutes more than fifty (50) percent of
the total fair market value or total voting power of the shares of Eaton.
However, if any one (1) person, or more than one (1) person acting as a group,

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is considered to own more than fifty (50) percent of the total fair market value
or total voting power of the shares of Eaton, the acquisition of additional
shares by the same person or persons is not considered to cause a change in the
ownership of Eaton (or to cause a change in the effective control of Eaton). An
increase in the percentage of stock owned by any one (1) person, or persons
acting as a group, as a result of a transaction in which the corporation
acquires its stock in exchange for property will be treated as an acquisition of
stock for purposes hereof. This shall apply only when there is a transfer of
shares of Eaton (or issuance of shares of Eaton) and shares in Eaton remain
outstanding after the transaction. A change in the effective control of Eaton
occurs only on either of the following dates: (1) The date any one (1) person,
or more than one (1) person acting as a group, acquires (or has acquired during
the 12-month period ending on the date of the most recent acquisition by such
person or persons) ownership of shares of Eaton possessing thirty (30) percent
or more of the total voting power of the shares of the corporation; or (2) the
date a majority of members of the Board is replaced during any 12-month period
by directors whose appointment or election is not endorsed by a majority of the
members of the Board before the date of the appointment or election. A change in
the ownership of a substantial portion of the assets of Eaton occurs on the date
any one (1) person, or more than one (1) person acting as a group, acquires (or
has acquired during the 12- month period ending on the date of the most recent
acquisition by such person or persons) assets from the corporation that have a
total gross fair market value equal to or more than forty (40) percent of the
total gross fair market value of all of the assets of the corporation
immediately before such acquisition or acquisitions. For this purpose, gross
fair market value means the value of the assets of the corporation, or the value
of the assets being disposed of, determined without regard to any liabilities
associated with such assets. Application of this definition shall be further
subject to rules set forth in Treasury Regulation Section 1.409A-3(i) relating
to persons acting as a group, transfers to related persons, and certain
back-to-back arrangements.

Code--Internal Revenue Code of 1986, as it may be amended from time to time.

Committee--The Compensation and Organization Committee of the Board.

Common Share Retirement Compensation--Retirement Compensation which is converted
into share units in accordance with Article VI.

Deferred Incentive Compensation--That portion of Incentive Compensation deferred
pursuant to the Plan.

Eaton--Eaton Corporation, an Ohio corporation, and its corporate successors.

Eaton Common Shares--The common shares of Eaton.

Incentive Compensation--Any payment awarded to a Participant under any Incentive
Compensation Plan.

Incentive Compensation Plan--Any incentive compensation plan approved by either
the Board or its Compensation and Organization Committee.

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Interest Rate Retirement Compensation--Retirement Compensation which is credited
with Treasury Note Based Interest in accordance with Article VI.

Participant--An employee of Eaton who elects to defer receiving benefits under
an Incentive Compensation Plan designated by the Committee as eligible for
deferral hereunder.

Periodic Installments--Annual payments, over a period not to exceed fifteen (15)
years, as elected by the Participant in accordance with the terms of the Plan,
which are substantially equal in amount, or, in the case of Common Share
Retirement Compensation, substantially equal in the number of share units being
valued and paid or the number of Eaton Common Shares being distributed, except
that earnings attributable to periods following Retirement or Termination of
Employment shall be included with each payment. Periodic Installments are paid
on or about March 15 of each year, except as otherwise provided herein.

Plan--This Incentive Compensation Deferral Plan II pursuant to which Incentive
Compensation may be deferred for later payment.

Retirement--The Termination of Employment of a Participant who is age fifty (50)
or older and has at least ten (10) years of service with Eaton. For this
purpose, service shall be measured in the same manner as Service under the
Pension Plan for Eaton Corporation Employees.

Retirement Compensation--That portion of Incentive Compensation deferred for
payment at Retirement or in Periodic Installments commencing at Retirement.

Short-Term Compensation--That portion of Incentive Compensation deferred for
payment in accordance with Article V.

Termination of Employment--The time when a Participant shall no longer be
employed by Eaton whether by reason of Retirement, death, voluntary resignation
(with or without good reason), divestiture or closing of a business unit, plant
or facility, discharge (with or without cause), or such disability that, under
the then current employment practices of Eaton, the employment of the
Participant is terminated. Termination of Employment shall include "separation
from service" within the meaning of Section 409A of the Code, meaning that a
Participant whose level of bona fide services is permanently decreased to no
more than twenty (20) percent of the average level of bona fide services
performed over the preceding 36-month period shall incur a separation from
service for purposes of the Plan. Notwithstanding the foregoing, upon a sale or
other disposition of assets of Eaton or any of its subsidiaries to an unrelated
purchaser, Eaton reserves the right, to the extent permitted by Section 409A of
the Code, to determine whether Participants providing services to the purchaser
after and in connection with the purchase transaction have experienced a
separation from service.

Treasury Bill Interest Equivalent--A rate of interest equal to the quarterly
average yield of 13-week U.S. Government Treasury Bills.

Treasury Note Based Interest--A rate of interest equal to the average yield of
10-year U.S. Government Treasury Notes plus 300 basis points.

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IV. ELECTION TO DEFER

Section 4.01 Deferral Options

For each award period ending during or after 2005 (an "Award Period") with
respect to any plan eligible for the deferral of Incentive Compensation
hereunder, the Participant may elect to defer the receipt of all or part of his
or her Incentive Compensation as Short-Term Compensation or Retirement
Compensation. Once a Participant has made an effective election, he or she may
not thereafter change that election or change any allocation between Short-Term
Compensation or Retirement Compensation.

Section 4.02 Amount Deferred

Not less than ten (10) percent of Incentive Compensation awarded for any Award
Period may be deferred under the Plan. If a Participant elects to allocate a
portion of Incentive Compensation to both Short-Term Compensation and Retirement
Compensation, the amount allocated to each shall be not less than ten (10)
percent of the Incentive Compensation awarded for any Award Period.

Section 4.03 Election Deadline

To be in effect for an Award Period, a Participant's election must be completed,
signed and filed with the Committee on or before December 31 of the taxable year
immediately preceding the taxable year in which the services are performed,
except that in the case of any performance-based compensation within the meaning
of Treasury Regulation Section 1.409A-1(e) based on services performed over a
period of at least 12 months, such election must be made no later than six (6)
months before the end of the Award Period and otherwise in accordance with rules
and procedures established by the Committee. Moreover, in the case of the first
year in which a Participant becomes eligible to participate in the Plan, such
election may be made with respect to services performed subsequent to the
election within thirty (30) days after the date the Participant becomes eligible
to participate in the Plan. In the event that an election is made hereunder in
the Participant's first year of eligibility with respect to compensation that is
earned based on a specific performance period and after the beginning of that
performance period (but subject to the first sentence of this Section 4.03), the
election shall apply only to the compensation paid for services performed after
the election. An election will be deemed to apply to compensation paid for
services performed after the election if the election applies to no more than an
amount equal to the total amount of the compensation for the performance period
multiplied by the ratio of the number of days remaining in the performance
period after the election over the total number of dates in the performance
period.

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V. SHORT-TERM COMPENSATION

Section 5.01 Amount

If elected by a Participant, payment of the amount of Incentive Compensation
allocated to Short-Term Compensation will be deferred. Short-Term Compensation
shall be credited to the Participant on the date such amount would have been
distributed to him or her if there had been no valid deferral election by
establishing an Account in the Participant's name. Treasury Bill Interest
Equivalents shall be credited quarterly to the Participant's Short-Term
Compensation Account until such compensation is paid to the Participant.

Section 5.02 Election and Payment

Short-Term Compensation, together with credited Treasury Bill Interest
Equivalents, shall be paid to the Participant in a lump sum or in not more than
five (5) annual installments, as elected by the Participant. At the time a
Participant elects to defer receipt of Incentive Compensation as Short-Term
Compensation pursuant to Section 4.01, the Participant shall also elect with
respect to the deferral for such Award Period the time at which payment of such
amount shall be made or begin and which of the methods of payment described in
this Section 5.02 shall be used, provided that such payment may not be made
prior to March 15 of the second year following the Award Period for which the
Short-Term Compensation was credited to the Participant. Upon the death of a
Participant who has a Short-Term Compensation Account, the entire amount of his
or her Short-Term Compensation then remaining shall be distributed to the
Participant's Beneficiary in a lump sum within ninety (90) days following the
death.

VI. RETIREMENT COMPENSATION

Section 6.01 Duration

If elected by a Participant, payment of the amount of Incentive Compensation
allocated to Retirement Compensation will be deferred to Retirement, but subject
to the limitations of Section 9.02. Retirement Compensation shall be credited to
the Participant on the date such amount would have been distributed to him or
her if there had been no valid deferral election by establishing an Account in
the Participant's name. At the time a Participant elects to defer receipt of
Incentive Compensation as Retirement Compensation pursuant to Section 4.01, the
Participant shall also elect with respect to the deferral for such Award Period,
whether such amount is to be distributed in a lump sum or in the form of
Periodic Installments over a period of five (5), ten (10), or fifteen (15)
years, subject, however, to the provisions of Section 6.07. Following a
Participant's Retirement, payment to the Participant shall be made or commence
on or about March 15 of the year following the date of such Retirement, subject
to the provisions of Sections 6.07 and 9.02.

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Section 6.02 Common Share Retirement Compensation

Between fifty (50) percent and one hundred (100) percent, as elected by the
Participant, of the amount allocated to Retirement Compensation shall be
credited to Common Share Retirement Compensation, and the balance shall be
credited to Interest Rate Retirement Compensation.

Common Share Retirement Compensation shall be converted into a number of share
units based upon the average of the mean prices for Eaton Common Shares for the
twenty (20) trading days of the New York Stock Exchange during which Eaton
Common Shares were traded immediately following the end of the incentive period
in which the Incentive Compensation to be deferred was earned. Until the
Participant's Common Share Retirement Compensation is paid, on each Eaton Common
Share dividend payment date, dividend equivalents equal to the actual Eaton
Common Share dividends paid shall be credited to the share units in the
Participant's Account, and shall in turn be converted into share units utilizing
the mean Eaton Common Share price on the dividend payment date.

Upon payment of Common Share Retirement Compensation, the share units standing
to the Participant's credit shall be converted to the same number of Eaton
Common Shares for distribution to the Participant in the form of Eaton Common
Shares.

Section 6.03 Interest Rate Retirement Compensation

Retirement Compensation not credited to Common Share Retirement Compensation
shall be credited to Interest Rate Retirement Compensation. Interest Rate
Retirement Compensation shall be credited to the Interest Rate Retirement
Compensation Account, which shall earn Treasury Note Based Interest, compounded
quarterly, until paid.

Section 6.04 Periodic Installments Following Death

Upon the death of a Participant who has commenced receiving Periodic
Installments, the entire remaining amount of his or her Retirement Compensation
shall be distributed to the Participant's Beneficiary. Such distribution shall
be made in a lump sum within ninety (90) days following the death.

Section 6.05 Termination of Employment

The Retirement Compensation Account of a Participant who has a Termination of
Employment for reasons other than Retirement shall be distributed in a lump sum.
The lump sum payment shall be made within sixty (60) days following such
Termination of Employment, subject to the provisions of Section 9.02.

Section 6.06 Limited Redeferral

A Participant who has made an effective election under Section 6.01 with respect
to deferral of Retirement Compensation for payment in a lump sum following
Retirement may make a subsequent election to delay payment or commencement of
payment of such amount for a period

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of five (5) years from the date such payment would otherwise have been made,
which election may include a change in the form of payment in accordance with
the following provisions, subject to such administrative rules and procedures as
may be established by the Committee:

     (a)  the subsequent election shall not take effect until 12 months after
          the date on which it is made; and

     (b)  payment in the form of Periodic Installments over a period of five (5)
          years may be elected.

Any such subsequent election shall become irrevocable on the later of the date
when made or the date which is 12 months before the date the Participant could
first be eligible for Retirement. Notwithstanding the foregoing provisions of
this Section 6.06, no such subsequent election shall be given effect unless the
Participant has a Termination of Employment by reason of Retirement.

VII. AMENDMENT AND TERMINATION

Section 7.01 Right to Amend or Terminate

Eaton fully expects to continue the Plan but it reserves the right, except as
otherwise provided herein, at any time by action of the Committee, to modify,
amend or terminate the Plan for any reason, including adverse changes in the
federal tax laws. Notwithstanding the foregoing and subject to the provisions of
Section 9.01, upon the occurrence of a Change in Control, no amendment,
modification or termination of the Plan shall, without the consent of the
Participant, alter or impair any rights or obligations under the Plan with
respect to such Participant.

Section 7.02 American Jobs Creation Act of 2004

The Plan is intended to provide for the deferral of compensation in accordance
with the provisions of Section 409A of the Code and Treasury Regulations and
published guidance issued pursuant thereto. Accordingly, the Plan shall be
construed in a manner consistent with those provisions and may at any time be
amended in the manner and to the extent determined necessary or desirable by
Eaton to reflect or otherwise facilitate compliance with such provisions with
respect to amounts deferred on and after January 1, 2005, including as
contemplated by Section 885 (f) of the American Jobs Creation Act of 2004.
Moreover, after January 1, 2007, and on or before December 31, 2007, and to the
extent permitted by the Committee in accordance with terms set forth on an
election form provided by Eaton, a Participant may make a change in a payment
election as described in IRS Notice 2006-79, provided that with respect to an
election to change a time and form of payment made after January 1, 2007 and on
or before December 31, 2007, the election may apply only to amounts that would
not otherwise be payable in 2007 and may not cause an amount to be paid in 2007
that would not otherwise be payable in 2007.

                                      -7-

<PAGE>

VIII. ADMINISTRATION

The Plan shall be administered by the Committee. The Committee shall interpret
the provisions of the Plan where necessary and may adopt procedures for the
administration of the Plan which are consistent with the provisions of the Plan
and any rules adopted by the Committee.

Each Participant or Beneficiary must claim any benefit to which such Beneficiary
may be entitled under the Plan by a written notification to the Committee. If a
claim is denied, it must be denied within a reasonable period of time in a
written notice stating the specific reasons for the denial. The claimant may
have a review of the denial by the Committee by filing a written notice with the
Committee within sixty (60) days after the notice of the denial of his or her
claim. The written decision by the Committee with respect to the review must be
given within one hundred twenty (120) days after receipt of the written request.

The determinations of the Committee shall be final and conclusive.

IX. PAYMENTS

Section 9.01 Termination upon Change in Control. The Board shall have the
authority, in its sole discretion, to terminate the Plan and pay each
Participant's entire benefit to the Participant or, if applicable, his
Beneficiary, pursuant to an irrevocable action taken by the Board within the
thirty (30) days preceding or the 12 months following a Change in Control,
provided that this Section 9.01 will only apply to a payment under the Plan if
all agreements, methods, programs, and other arrangements sponsored by the
service recipient immediately after the time of the change in control event with
respect to which deferrals of compensation are treated as having been deferred
under a single plan within the meaning of Treasury Regulation Section
1.409A-1(c)(2) are terminated and liquidated with respect to each Participant
that experienced the change in control event, so that under the terms of the
termination and liquidation all such Participants are required to receive all
amounts of compensation deferred under the terminated agreements, methods,
programs, and other arrangements within 12 months of the date the service
recipient irrevocably takes all necessary action to terminate and liquidate the
agreements, methods, programs and other arrangements. Solely for purposes of
this Section 9.01, where the change in control event results from an asset
purchase transaction, the applicable service recipient with the discretion to
liquidate and terminate the agreements, methods, programs, and other
arrangements is the service recipient that is primarily liable immediately after
the transaction for the payment of the deferred compensation.

Section 9.02 Time of Payment

Notwithstanding any provision of the Plan to the contrary, compensation deferred
under the Plan shall not be distributed earlier than

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

                                      -8-

<PAGE>

     (b)  the date the Participant becomes disabled (within the meaning of
          Section 409A(a)(2)(C) of the Code);

     (c)  death of the Participant;

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

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

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

     (g)  termination of the Plan as described in Section 7.01 or 9.01.

In the case of any Participant who is determined by the Company to be a
"specified employee" within the meaning of Section 409A of the Code and
applicable Treasury regulations, distributions shall not in any event be made or
begin until the first business day of the month which is six (6) months after
the date of his separation from service (or, if earlier, the date of death of
the Participant) (the "permitted payment date"). In the event any payment to a
specified employee is delayed by reason of this provision, such payment
(including interest or earnings otherwise credited through the permitted payment
date) shall be made on such permitted payment date.

X. MISCELLANEOUS

Section 10.01 Adjustments

In the event of a reorganization, merger, consolidation, reclassification,
recapitalization, combination or exchange of shares, stock split, stock
dividend, rights offering or similar event affecting shares of the Company, the
Committee shall equitably adjust the limitation on the number and class of share
units which may be allocated to Participants as Common Share Retirement
Compensation, and the number of share units previously allocated to their
Accounts.

Section 10.02 Designation of Beneficiaries

Each Participant shall have the right, by written instruction to the Committee,
on a form supplied by the Committee, to designate one (1) or more primary and
contingent Beneficiaries (and the proportion to be paid to each, if more than
one is designated) to receive his or her Account balance upon his or her death.
Any such designation shall be revocable by the Participant.

                                      -9-

<PAGE>

Section 10.03 Committee Actions

All actions of the Committee hereunder may be taken with or without a meeting.
If taken without a meeting, the action shall be in writing and signed by a
majority of the members of the Committee and if taken with a meeting, a majority
of the Committee shall constitute a quorum for any such action. The
determination by the Committee as to the withholding of taxes shall be binding
upon the Participants and their Beneficiaries.

Section 10.04 Assignment

No benefit under the Plan shall be subject to anticipation, alienation, sale,
transfer or encumbrance, and any attempt to do so shall be void. No benefit
hereunder shall in any manner be liable for the debts, contracts, or liabilities
of the person entitled to such benefits. During a Participant's lifetime, rights
hereunder are exercisable only by the Participant or that person's guardian or
legal representative. Notwithstanding the foregoing, nothing in this Section
shall prohibit the transfer of any benefit by will or by the laws of descent and
distribution or (if permitted by applicable regulations under Section 16(b) of
the Securities Exchange Act of 1934) pursuant to a qualified domestic relations
order, as defined under the Code and the Employee Retirement Income Security Act
of 1974, as amended.

Section 10.05 No Funding Required

The obligations of Eaton to make payments shall be a liability of Eaton to the
Participant. Eaton shall not be required to maintain any separate fund or
reserve, or purchase or acquire life insurance on a Participant's life, or
otherwise segregate assets to assure that any particular asset of Eaton is
available to make such payments by reason of Eaton's obligations hereunder.
Nothing contained in the Plan shall be construed as creating a trust or other
fiduciary relationship between Eaton and a Participant or any other person.

Section 10.06 Certain Adjustments to Accounts

In the event that it shall be determined in accordance with any policy, program
or standard adopted by Eaton that any Incentive Compensation payable to a
Participant which has been deferred under the terms of the Plan is to be
restored to Eaton, the Account of such Participant shall be appropriately
adjusted to eliminate such deferral, and no substitution shall be provided.

Section 10.07 No Employment Contract

The Plan shall not be deemed to constitute a contract of employment between
Eaton and a Participant. Neither shall the execution of the Plan nor any action
taken by Eaton or the Committee pursuant to the Plan confer on a Participant any
legal right to be continued in any other capacity with Eaton whatsoever.

                                      -10-

<PAGE>

Section 10.08 Governing Law

The Plan shall be construed and governed in accordance with the law of the State
of Ohio to the extent not covered by Federal law.

Section 10.09 Effective Date

The Plan was adopted by the Board on December 8, 2004, effective January 1,
2005, and is amended and restated effective January 1, 2008, as set forth
herein.

                              APPROVAL AND ADOPTION

The Eaton Corporation Deferred Incentive Compensation Plan II, as amended and
restated in the form attached hereto, is hereby approved and adopted.

----------------------------------------   Date: October 27, 2007
Name

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Title

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Name

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Title

                                      -11-

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