Document:

<PAGE>

Exhibit 10(b)

                  PLAN FOR DEFERRED PAYMENT OF DIRECTORS' FEES

                   (Originally adopted in 1980 and amended and
                        restated in 1989, 1996 and 2002)

1.       Purpose of Plan. It is the purpose of this Plan for Deferred Payment of
         Directors' Fees (the "Plan") to enable each Director of Eaton
         Corporation (the "Company") to defer some or all fees which may be
         payable to the Director for future services to be performed by him as a
         member of the Board of Directors of the Company, or as a member of any
         committee thereof.

2.       Eligibility. Any Director of the Company who is separately compensated
         for his services on the Company's Board of Directors, or on any
         committee of such Board, and who is first elected to the Board prior to
         1996, shall be eligible to participate in the Plan. Directors who are
         first elected to the Board after 1995 shall not be eligible to
         participate in the Plan.

3.       Manner of Election. Any person wishing to participate in the Plan must
         file with the Vice President and Secretary of the Company at Eaton
         Center, 1111 Superior Avenue, Cleveland, Ohio 44114-2584, a written
         notice, on the Notice of Election form attached as Exhibit A, electing
         to defer payment of all or a portion of his compensation as a Director
         (an "Election"). An Election shall become effective upon the effective
         date of the Plan if filed within thirty (30) days following such date.
         Thereafter, a person for whom an Election is not in effect may elect to
         participate in the Plan as follows: (a) with respect to Directors' fees
         payable for any calendar year by filing an Election, in accordance with
         the procedure described above on or before December 31 of the preceding
         calendar year; and (b) with respect to Directors' fees payable for any
         portion of a calendar year which remains at the time of such person's
         initial election to the Office of Director of the Company, or any
         subsequent re-election if immediately prior thereto he was not serving
         as a Director, by filing an Election, in accordance with the procedure
         described above, within thirty (30) days subsequent to such election or
         re-election. An effective Election may not be revoked or modified with
         respect to Directors' fees payable for the calendar year or portion of
         a calendar year for which such Election is effective and such Election,
         unless terminated or modified as described below, shall apply to
         Directors' fees payable with respect to each subsequent calendar year.
         An effective Election may be terminated or modified for any subsequent
         calendar year by the filing, as described above, of either a new
         Election, in regard to modifications, or a Notice of Termination, on
         the form attached as Exhibit B, in regard to terminations, on or before
         December 31 immediately preceding the calendar year for which such
         modification or termination is to be effective. An effective Election
         shall also terminate on the date a person ceases to be a Director. A
         person for whom an effective Election is terminated may thereafter file
         a new Election for future calendar years for which he is eligible to
         participate in the Plan.

         Notwithstanding anything herein to the contrary, a Director may elect
         to have held and distributed in accordance with the terms and
         conditions of the 1996 Non-Employee Director Fee Deferral Plan all or
         part of his compensation which was deferred under the Plan.

                                       36

<PAGE>

4.       Compensation Account. The amount of any Directors' fees deferred in
         accordance with an Election shall be credited to a deferred
         compensation account maintained by the Company in the name of the
         Director ("Deferred Compensation Account").

5.       Adjustment of Deferred Compensation Account. As of each Accounting Date
         (as defined below), the Deferred Compensation Account for each Director
         shall be adjusted for the period elapsed since the last preceding
         Accounting Date as follows:

         (a)      First, the account shall be charged with any distribution made
                  during the period in accordance with Paragraph 7, below.

         (b)      Then, the account shall be credited with the Interest Factor
                  for that period, as defined in Paragraph 6, below.

         (c)      Finally, the account shall be credited with the amount, if
                  any, of any Director's fees deferred during that period in
                  accordance with an effective Election under Paragraph 3,
                  above.

         For purposes of this Plan, the term "Accounting Date" means each March
         31, June 30, September 30 and December 31.

6.       Interest Factor. As at any Accounting Date, the term "Interest Factor"
         means an amount, if any, determined by multiplying (i) an amount equal
         to the balance of the Director's Deferred Compensation Account as of
         the close of business on the next preceding Accounting Date by (ii) a
         percentage determined by multiplying (A) the average of the prime rates
         of interest in effect at Key Bank (or any successor thereto),
         Cleveland, Ohio, on the Accounting Date and the next preceding
         Accounting Date by (B) 1/4.

7.       Manner of Payment. A Director's deferred fees will be paid to him or,
         in the event of his death, to his designated beneficiary, in accordance
         with his Election. If a Director elects to receive payment of his
         deferred fees in installments rather than in a lump-sum, the payment
         period shall not exceed ten years following the Payment Commencement
         Date, as defined in Paragraph 8 below. The amount of any installment
         payment shall be determined by multiplying (i) the balance in the
         Director's Deferred Compensation Account on the date of such
         installment by (ii) a fraction, the numerator of which is one and the
         denominator of which is the number of remaining unpaid installments.
         The balance of the account shall be appropriately reduced in accordance
         with Paragraph 5, above, to reflect the installment payments made
         hereunder. Amounts held pending distribution pursuant to this Paragraph
         7 shall continue to be credited with the Interest Factor described in
         Paragraph 6 above.

8.       Payment Commencement Date. Payments of accounts deferred pursuant to an
         election under the Plan shall commence on March 30 of the first year of
         deferred payment selected by a Director in his Election. If a Director
         dies prior to the first year of deferred payment selected by him,
         payments shall commence on March 30 of the calendar year immediately
         following the year of his death.

9.       Beneficiary Designation. A Director may designate, in the Beneficiary
         Designation form attached as Exhibit C, any person to whom payments are
         to be made if the Director dies before receiving payment of all amounts
         due hereunder. A beneficiary designation will be effective only after
         the signed Beneficiary Designation form is filed with the Secretary of
         the Company while the Director is alive and will cancel all beneficiary
         designations signed

                                       37

<PAGE>

         and filed earlier. If the Director fails to designate a beneficiary as
         provided above, or if all designated beneficiaries of the Director die
         before the Director or before complete payment of all amounts due
         hereunder, remaining unpaid amounts shall be paid in one lump sum to
         the estate of the last to die of the Director or the Director's
         designated beneficiaries, if any.

10.      Certain Payments to Directors.

         (a)      Notwithstanding anything herein to the contrary, upon the
                  occurrence of a Termination and Change in Control, the
                  Directors shall be entitled to receive from the Company the
                  payments as provided in Section 10(c).

         (b)      Notwithstanding anything herein to the contrary, upon the
                  occurrence of a Failure to Pay, each Director covered by the
                  situation described in clause (i) of the definition of Failure
                  to Pay, or each of the Directors in the event of a situation
                  described in clause (ii) of that definition, as the case may
                  be, shall be entitled to receive from the Company the payments
                  as provided in Section 10(c).

         (c)      No later than the first to occur of (i) six months following
                  the date hereof for any current Director, (ii) a Termination
                  and Change in Control or a Failure to Pay for any current
                  Director or (iii) thirty days after the date upon which any
                  person who is not a current Director upon the date hereof
                  becomes a Director, each Director shall select one of the
                  payment alternatives set forth below with respect to that
                  portion of the Director's Deferred Compensation Account equal
                  to the full amount of the account minus the Funded Amount, and
                  with respect to that portion of the account equal to the
                  Funded Amount. The payment alternatives selected with respect
                  to the two portions of the account need not be the same. The
                  payment alternatives are as follows:

                  (I)      a lump sum payment within 30 days following the
                           Termination and Change in Control or Failure to Pay,
                           as the case may be;

                  (II)     payment in monthly, quarterly, semiannual or annual
                           payments, over a period not to exceed fifteen years,
                           as selected by the Director at the time provided in
                           the first paragraph of this Section 10(c), commencing
                           within 30 days following the Termination and Change
                           in Control or Failure to Pay, as the case may be,
                           which are substantially equal in amount, except that
                           earnings attributable to periods following
                           Termination and Change in Control or Failure to Pay
                           shall be included with each payment.

         Payment shall be made to each such Director in accordance with his
         other selected alternative as provided in Sections 10(a) and 10(b).

11.      Non-Alienability of Benefits. Neither the Director nor any beneficiary
         designated by him shall have any right to, directly or indirectly,
         alienate, assign or encumber any amount that is or may be payable
         hereunder.

12.      Administration of Plan. Full power and authority to construe, interpret
         and administer the Plan shall be vested in the Governance Committee of
         the Company's Board of Directors ("Committee"). Decisions of the
         Committee shall be final, conclusive and binding upon all parties.
         Notwithstanding the terms of an Election made by a participant
         hereunder, the Committee may, in its sole discretion, change the terms
         of such Election upon the request of

                                       38

<PAGE>

         a participant or his representative, or a participant's beneficiary or
         such beneficiary's representative, after considering the needs of the
         Company and of the participant or the participant's beneficiary.

13.      Certain Definitions.

         "Deferral Plans" - The Company's plan of the same name as this Plan and
         this Plan.

         "Failure to Pay" - The circumstances described in either (i) or (ii)
         have occurred:

                  (i)      Any Director shall have notified the Company and the
                           Trustee in writing that the Company shall have failed
                           to pay to the Director, when due, either directly or
                           by direction to the trustee of any trust holding
                           assets for the payment of benefits pursuant to the
                           Plan, at least 75% of any and all amounts which the
                           Director was entitled to receive at any time in
                           accordance with the terms of the Plan, and that such
                           amounts remain unpaid. Such notice must set forth the
                           amount, if any, which was paid to Director, and the
                           amount which the Director believes he or she was
                           entitled to receive under the Plan. The failure to
                           make such payment shall have continued for a period
                           of 30 days after receipt of such notice by the
                           Company, and during such 30-day period the Company
                           shall have failed to prove, by clear and convincing
                           evidence as determined by the Trustee in its sole and
                           absolute discretion, that such amount was in fact
                           paid or was not due and payable; or

                  (ii)     More than two Directors shall have notified the
                           Company and the Trustee in writing that they have not
                           been paid when due, either directly or by direction
                           to the Trustee, amounts to which they are entitled
                           under the Plan and that such amounts remain unpaid.
                           Each such notice must set forth the amount, if any,
                           which was paid to the Director, and the amount which
                           the Director believes he or she was entitled to
                           receive under the Plan. Within 15 days after receipt
                           of each such notice, the Trustee shall determine, on
                           a preliminary basis, whether any failure to pay such
                           Directors has resulted in a failure to pay when due,
                           directly or by direction, at least 75% of the
                           aggregate amount due to all Directors under all the
                           Deferral Plans in any tow-year period, and that such
                           amounts remain unpaid. If the Trustee determines that
                           such a failure has occurred, then it shall so notify
                           the Company and the Directors in writing within the
                           same 15 day period. Within a period of 20 days after
                           receipt of such notice from the Trustee, the Company
                           shall have failed to prove by clear and convincing
                           evidence, in the sole and absolute discretion of the
                           Trustee, that such amount was paid or was not due and
                           payable.

         "Funded Amount" - With respect to the Deferred Compensation Account of
         any Director, the value of any assets which have been placed in a
         grantor trust established by the Company to pay benefits with respect
         to that account, as determined at the time initial payments are to be
         made pursuant to the selections made by the Participants in accordance
         with Section 10(c).

         "Termination and Change in Control" - The termination of the service as
         a Director of a Director for any reason whatsoever prior to a Change in
         Control, upon a Change in Control or during the three-year period
         immediately following a Change in Control.

                                       39

<PAGE>

         "Trustee" - The trustee of any trust which holds assets for the payment
         of the benefits provided by the Plan.

14.      Governing Law. The provisions of the Plan shall be interpreted and
         construed in accordance with the laws of the State of Ohio.

15.      Effective Date and Amendment. This amendment and restatement of the
         Plan shall become effective on January 23, 2002 . The Committee may
         amend or terminate the Plan at any time; provided that no such
         amendment or termination shall adversely affect the amounts in any
         then-existing Deferred Compensation Account or the payment thereof in
         accordance with each Director's Election.

                                       40

<PAGE>

                              APPROVAL AND ADOPTION

The Plan for Deferred Payment of Directors' Fees, in the form attached hereto,
is hereby approved and adopted.

 /s/ Susan J. Cook
-----------------

                                       41<PAGE>

Exhibit 10(c)

1996 NON-EMPLOYEE DIRECTOR FEE DEFERRAL PLAN

                                   I. PURPOSE

            The 1996 Non-Employee Director Fee Deferral Plan (the "Plan")
enables each Director of Eaton Corporation ("Eaton" or the "Company") who is not
employed by the Company to defer receipt of fees that may be payable to him or
her for future services as a member of the Board of Directors of the Company
(the "Board") or as chairman or as a member of any committee of the Board. The
purpose of the Plan is to help attract and retain highly qualified individuals
to serve as members of the Company's Board of Directors and as members of
committees thereof.

                                 II. ELIGIBILITY

            All members of the Board who are not employed by the Company are
eligible to participate in the Plan with respect to amounts earned as fees for
services as a member of the Board or as chairman or a member of any committee of
the Board.

                                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 Fees and earnings or losses
thereon.

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

            Beneficiary - The person or entity designated in writing executed
and delivered by the Participant to the Committee. If that person or entity is
not living or in existence at the time any unpaid balance of Deferred Fees
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 Corporation.

This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.

                                       42

<PAGE>

            Change in Control of Eaton - Shall be deemed to occur if (i) a
tender offer shall be consummated for 25% or more of the combined voting power
of Eaton's then outstanding voting securities, (ii) Eaton shall be merged or
consolidated with another corporation and as a result less than 75% of the
outstanding voting securities of the resulting corporation shall be owned by the
former shareholders of Eaton, other than affiliates (within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act")) of any party to such
merger or consolidation, as the same shall have existed immediately prior to
such merger or consolidation, (iii) Eaton shall sell substantially all of its
assets to another corporation that is not a wholly owned subsidiary of Eaton,
(iv) any "person" (as such term is used in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act) is or becomes the beneficial owner, directly or indirectly, of 25%
or more of the combined voting power of Eaton's then outstanding securities; or
(v) during any period of two consecutive years, individuals who at the beginning
of that period constitute the Board cease to constitute at least a majority
thereof unless the election, or the nomination for election by Eaton's
shareholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period. For purposes of this Plan, ownership of voting securities shall take
into account and include ownership as determined by applying the provisions of
Rule 13d-3(d)(l)(i) of the Exchange Act (as then in effect).

            Committee - The Governance Committee of the Board or such other
committee as the Board may from time to time designate for purposes of
administration of the Plan.

            Common Share Retirement Deferred Fees - Retirement Deferred Fees
that are converted into share units in accordance with Article VI.

            Deferral Plans - This Plan and any other prior plan sponsored by the
Company pursuant to which Fees may be deferred.

            Deferred Fees - That portion of Fees deferred pursuant to the Plan.

            Eaton - Eaton Corporation, an Ohio corporation, and its subsidiaries
and successors and assigns.

            Eaton Common Shares - The common shares of Eaton Corporation with a
par value of $.50 each.

                      Failure to Pay - The circumstances described in either (i)
            or (ii) have occurred:(i) Any Participant shall have notified the
            Company and the Trustee in writing that the Company shall have
            failed to pay to the Participant, when due, either directly or by
            direction to the trustee of any trust holding assets for the payment
            of benefits pursuant to the Plan, at least 75% of any and all
            amounts which the Participant was entitled to receive at any time in
            accordance with the terms of the Plan, and that such amounts remain
            unpaid. Such notice must set forth the amount, if any, which was
            paid to the Participant by the Company, and the amount which the
            Participant believes he or she was entitled to receive under the
            Plan. The failure to make such payment shall have continued for a
            period of 30 days after receipt of such notice by the Company, and
            during such 30-day period the Company shall have failed to prove, by
            clear and convincing evidence as determined by the Trustee in its
            sole and absolute discretion, that such amount was in fact paid or
            was not due and payable; or

                                       43
<PAGE>

                      (ii) More than two Participants shall have notified the
            Company and the Trustee in writing that they have not been paid when
            due, either directly or by direction to the Trustee, amounts to
            which they are entitled under the Plan and that such amounts remain
            unpaid. Each such notice must set forth the amount, if any, which
            was paid to the Participant, and the amount which the Participant
            believes he or she was entitled to receive under the Plan. Within 15
            days after receipt of each such notice, the Trustee shall determine,
            on a preliminary basis, whether any failure to pay such Participants
            has resulted in a failure to pay when due, directly or by direction,
            at least 75% of the aggregate amount due to all Participants under
            all the Deferral Plans in any two-year period, and that such amounts
            remain unpaid. If the Trustee determines that such a failure has
            occurred, then it shall so notify the Company and the Participants
            in writing within the same 15 day period. Within a period of 20 days
            after receipt of such notice from the Trustee, the Company shall
            have failed to prove by clear and convincing evidence, in the sole
            and absolute discretion of the Trustee, that such amounts were paid
            or were not due and payable.

            Fees - Any amount payable to a Participant for services as a member
of the Board or as chairman or a member of any committee of the Board.

            Funded Amount - With respect to the Account of any Participant, the
value of any assets which have been placed in a grantor trust established by the
Company to pay benefits with respect to that Account, as determined at the time
initial payments are to be made pursuant to the selections made by the
Participants in accordance with Section 10.03.

            Interest Rate Retirement Deferred Fees - Retirement Deferred Fees
that are credited with Treasury Note Based Interest in accordance with Article
VII.

            Participant - A member of the Board who is not an employee of Eaton
and who elects to defer receipt of Fees.

            Periodic Installments - Monthly, quarterly, semiannual or annual
payments, over a period not to exceed fifteen years, as determined by the
Committee in its sole discretion, which are substantially equal in amount, or,
in the case of Common Share Retirement Deferred Fees, 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 Service as a Director shall be included with each
payment.

            Plan - This 1996 Non-Employee Director Fee Deferral Plan pursuant to
which Fees may be deferred for later payment.

            Retirement - The Termination of Service as a Director of a
Participant who is age 55 or older and who has at least ten years of service as
a member of the Board, who is age 68 or older, or who is approved by the
Committee to qualify as a retirement.

            Retirement Deferred Fees - That portion of Fees deferred for payment
at Retirement, at one year following Retirement, at two years following
Retirement or in Periodic Installments commencing after Retirement.

                                       44

<PAGE>

            Short-Term Deferred Fees - That portion of Fees deferred for payment
as determined by the Committee in accordance with Article V.

            Termination and Change in Control - The Termination of Service as a
Director of a Participant for any reason whatsoever prior to a Change in Control
if there is a subsequent Change in Control or the Termination of Service as a
Director of a Participant for any reason whatsoever during the three-year period
immediately following a Change in Control.

            Termination of Service as a Director - The time when a Participant
shall no longer be a member of the Board, whether by reason of retirement,
death, voluntary resignation, divestiture, removal (with or without cause), or
disability.

            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.

            Trustee - The trustee of any trust which holds assets for the
payment of the benefits provided by the Plan.

                                       45

<PAGE>

                              IV. ELECTION TO DEFER

            Section 4.01 Deferral Options. For each calendar year commencing
with 1997, a Participant may elect to defer the receipt of all or part of his or
her Fees as Short-Term Deferred Fees or Retirement Deferred Fees. Once a
Participant has made an effective election, he or she may not thereafter change
that election or change any allocation between Short-Term Deferred Fees or
Retirement Deferred Fees.

            Section 4.02 Amount Deferred. Not less than 10% of Fees payable for
any calendar year may be deferred under the Plan. If a Participant elects to
allocate a portion of Fees to both Short-Term Deferred Fees and Retirement
Deferred Fees, the amount allocated to each shall be not less than 10% of the
Fees payable for any calendar year.

            Section 4.03 Election Deadline. To be in effect, a Participant's
election must be completed, signed and filed with the Committee on or before
such date as is necessary to defer inclusion of the Fees in the Director's gross
income for Federal income tax purposes.

            Section 4.04 Transfers. Notwithstanding anything herein to the
contrary, a Participant may elect to have held and distributed in accordance
with the terms and conditions of the Plan all or part of his or her compensation
which was deferred under the 1980 Plan for Deferred Payment of Directors' Fees,
and any such election with respect to amounts to be held and distributed as
Retirement Deferred Fees for any Participant in payment status upon the
effective date of such election may be held only as Interest Rate Deferred Fees
if to do otherwise would be administratively impractical.

                           V. SHORT-TERM DEFERRED FEES

            If elected by a Participant, payment of the amount of Fees allocated
to Short-Term Deferred Fees will be deferred. Short-Term Deferred Fees 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 Deferred Fees Account until
such compensation is paid to the Participant. Short-Term Deferred Fees, together
with credited Treasury Bill Interest Equivalents, shall be paid to the
Participant in a lump sum or in not more than five annual installments as
determined by the Committee.

                          VI. RETIREMENT DEFERRED FEES

            Section 6.01 Duration. If elected by a Participant, payment of the
amount of Fees allocated to Retirement Deferred Fees will be deferred to
Retirement or to one year after Retirement or to two years after Retirement, but
subject to Committee discretion as to date of payment as provided herein.
Retirement Deferred Fees 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.

                                       46

<PAGE>

            Section 6.02 Common Share Retirement Deferred Fees. Between 50% and
100%, as elected by the Participant, of the amount allocated to Retirement
Deferred Fees shall be credited to Common Share Retirement Deferred Fees, and
the balance shall be credited to Interest Rate Retirement Deferred Fees.

            Common Share Retirement Deferred Fees shall be converted into a
number of share units based upon the average of the mean prices for Eaton Common
Shares for the twenty trading days of the New York Stock Exchange during which
Eaton Common Shares were traded immediately preceding the end of the calendar
quarter in which the Fees to be deferred were earned. For purposes of the Plan,
"mean price" shall be the mean of the highest and lowest selling prices for
Eaton Common Shares quoted on the New York Stock Exchange List of Composite
Transactions on the relevant trading day. 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
price for Eaton Common Shares on the dividend payment date.

            Upon payment of Common Share Retirement Deferred Fees in Eaton
Common Shares, 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.

            Upon payment of Common Share Retirement Deferred Fees in cash,
including any installment thereof in the case of Periodic Installments, the
share units required to make the cash payment shall be converted to an amount
equal to the greater of: (a) the product of the average of the mean prices for
an Eaton Common Share for the last twenty trading days of the New York Stock
Exchange during which Eaton Common Shares were traded in the month immediately
preceding the month in which the date of payment occurs, multiplied by the
number of share units then credited to the Participant's Account, or (b) if a
Change in Control of Eaton shall have occurred at any time within thirty-six
months immediately preceding the payment, the product of the number of share
units credited to the Participant's Account at the time of payment multiplied by
the highest of (i) the highest price paid for an Eaton Common Share in any
tender offer in connection with the Change in Control of Eaton; (ii) the price
received for an Eaton Common Share in any merger, consolidation or similar event
in connection with the Change in Control of Eaton; or (iii) the highest price
paid for an Eaton Common Share as reported in any Schedule 13D within the
sixty-day period immediately preceding the Change in Control of Eaton.

            Section 6.03 Interest Rate Retirement Deferred Fees. Retirement
Deferred Fees not credited to Common Share Retirement Deferred Fees shall be
credited to Interest Rate Retirement Deferred Fees. Interest Rate Retirement
Deferred Fees shall be credited to the Interest Rate Retirement Deferred Fees
Account, which shall earn Treasury Note Based Interest, compounded quarterly,
until paid.

            Section 6.04 Periodic Installments. Upon the death of a Participant
who has commenced receiving Periodic Installments, the entire remaining amount
of his or her Retirement Deferred Fees shall be distributed to the Participant's
Beneficiary. Such distributions may be made either in a lump sum or in
installments in such amounts and over such periods, not exceeding the remaining
number of annual installments from the date of death of the Participant, as the
Committee may direct in its sole discretion.

            Section 6.05 Termination of Service as a Director. The Retirement
Deferred Fees Account of a Participant whose Termination of Service as a
Director occurs for reasons other than Retirement shall be distributed in a lump
sum or in Periodic Installments, as the Committee may

                                       47

<PAGE>

determine in its sole discretion. The lump sum payment shall be made, or the
Periodic Installments shall commence, when the Committee may determine in its
sole discretion, no later than February 1 of the calendar year immediately after
the calendar year that includes the earliest of: (i) the Participant's death,
(ii) the Participant's attainment of age 55 if he or she was credited with at
least 10 years of service for Eaton (or an affiliate of Eaton), (iii) the
Participant's attainment of age 68, or (iv) the fifth anniversary of the
Participant's Termination of Service as a Director.

            Earnings shall be credited on undistributed Retirement Deferred Fees
Accounts, and annual installment payments shall be adjusted to reflect such
additional earnings, based on the remaining number of installment payments to be
distributed and based on Treasury Note Based Interest, computed quarterly.

                         VII. AMENDMENT AND TERMINATION

            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, upon the occurrence of a
Change in Control of Eaton, no amendment, modification or termination of the
Plan shall, without the consent of any particular Participant, alter or impair
any rights or obligations under the Plan with respect to that Participant.

                              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.

            After Retirement or other Termination of Service as a Director, the
Committee shall determine in its sole discretion (i) whether Retirement Deferred
Fees shall be paid in a lump sum or in Periodic Installments, (ii) the date on
which a lump sum payment will be made or Periodic Installments will commence,
which in the case of Retirement shall be not later than one year following the
date to which the deferral was made, and in the case of Termination of Service
as a Director for reasons other than Retirement shall be in accordance with
Section 6.05, (iii) whether to change the Periodic Installments or the number of
years over which they are to be paid, and (iv) whether Common Share Retirement
Deferred Fees will be paid in cash or in Eaton Common Shares. In making these
determinations, the Committee may consider the wishes and needs of the
Participant or his or her Beneficiary.

            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 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 120 days after receipt of the written request.

            The determinations of the Committee shall be final and conclusive.

             IX. TERMINATION AND CHANGE IN CONTROL - FAILURE TO PAY

                                       48

<PAGE>

            Section 9.01 Termination and Change in Control. Notwithstanding
anything herein to the contrary, upon the occurrence of a Termination and Change
in Control, the Participants shall be entitled to receive from the Company the
payments as provided in Section 9.03.

            Section 9.02 Failure to Pay. Notwithstanding anything herein to the
contrary, upon the occurrence of a Failure to Pay, each Participant covered by
the situation described in clause (i) of the definition of Failure to Pay, or
each of the Participants in the event of a situation described in clause (ii) of
that definition, as the case may be, shall be entitled to receive from the
Company the payments as provided in Section 9.03.

            Section 9.03 Payment Requirement. No later than (i) the first to
occur of six months following the date hereof, a Termination and Change in
Control or a Failure to Pay for any person who is a Participant upon such event
or (ii) the date upon which any person who is not subject to clause (i) becomes
a Participant, each Participant shall select one of the payment alternatives set
forth below with respect to that portion of the Participant's Account equal to
the full amount of the Account minus the Funded Amount, and with respect to that
portion of the Account equal to the Funded Amount. The payment alternatives
selected with respect to the two portions of the Account need not be the same.
The payment alternatives are as follows:

                           (a) a Lump Sum Payment within 30 days following the
         Termination and Change in Control or Failure to Pay, as the case may
         be;

                           (b) payment in monthly, quarterly, semiannual or
         annual payments, over a period not to exceed fifteen years, as selected
         by the Participant at the time provided in the first paragraph of this
         Section 9.03, commencing within 30 days following the Termination and
         Change in Control or Failure to Pay, as the case may be, which are
         substantially equal in amount or in the number of share units being
         valued and paid or in the number of Eaton Common Shares being
         distributed, except that earnings attributable to periods following
         Termination and Change in Control or Failure to Pay shall be included
         with each payment.

Payment of such amounts shall be made to each such Participant in accordance
with his or her selected alternative as provided in Section 9.01 and 9.02.

                                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 number of share
units previously allocated to the Accounts of Participants as Common Share
Retirement Deferred Fees.

            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 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.

            Section 10.03 Committee Actions. All actions of the Committee
hereunder may be taken with or without a meeting, as permitted by law and by the
Company's Amended Regulations.

                                       49

<PAGE>

            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. If a
Participant or Beneficiary shall become bankrupt, or attempt to anticipate,
alienate, sell, transfer or encumber any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease and terminate, and the
Committee may hold or apply the same for the benefit of the Participant or his
or her spouse, children, or other dependents, or any of them, in such manner and
in such amounts and proportions as the Committee may deem proper. During a
Participant's lifetime, rights hereunder are exercisable only by the Participant
or the Participant'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) pursuant to a
qualified domestic relations order, as defined under the Internal Revenue Code
and the Employee Retirement Income Security Act.

            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 No Contract for Services. The Plan shall not be deemed
to constitute a contract for services between Eaton and a Participant. Neither
the execution of the Plan nor any action taken by Eaton or the Committee
pursuant to the Plan shall confer on a Participant any legal right to be
continued as a member of the Board or in any other capacity with Eaton
whatsoever.

            Section 10.07 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.

                                       50

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}]]