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                                                                 EXHIBIT 10 (CC)

                                EATON CORPORATION
                         2008 ANNUAL REPORT ON FORM 10-K
                                   ITEM 15 (B)

                                EATON CORPORATION

                 SUPPLEMENTAL EXECUTIVE STRATEGIC INCENTIVE PLAN

                         (Effective as of June 25, 2008)

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                                EATON CORPORATION

                 SUPPLEMENTAL EXECUTIVE STRATEGIC INCENTIVE PLAN

1.   PURPOSE

     The purpose of the Supplemental Executive Strategic Incentive Plan (the
     "Plan") is to promote the growth and profitability of Eaton Corporation
     (the "Company") through the granting of incentives intended to motivate
     executives of the Company to achieve demanding long-term corporate
     objectives and to attract and retain executives of outstanding ability.

2.   ADMINISTRATION

     With respect to Plan participants who are senior officers of the Company
     (that is, those officers with at least 2,448 Hay Points), the Plan shall be
     administered by the Compensation and Organization Committee (the "C&O
     Committee") of the Board of Directors of the Company (the "Board"), except
     as otherwise expressly provided herein. With respect to Plan participants
     other than senior officers of the Company, the Plan shall be administered
     by the Management Committee of the Company (consisting of the Chairman and
     Chief Executive Officer, Chief Human Resources Officer and such other
     officers as may be appointed to the Management Committee from time to
     time), except as otherwise expressly provided herein. As used herein, the
     term "Committee" means either the C&O Committee or the Management
     Committee, depending upon the type of participant involved. Except as
     otherwise expressly provided herein, with respect to those participants for
     which it has administrative responsibility, the C&O Committee and the
     Management Committee shall each have complete authority to: (i) interpret
     all provisions of the Plan consistent with law; (ii) designate the
     executives to participate under the Plan; (iii) determine the incentive
     targets and performance objectives applicable to participants; (iv) adopt,
     amend and rescind general and special rules and regulations for the Plan's
     administration; and (v) make all other determinations necessary or
     advisable for the administration of the Plan.

3.   ELIGIBILITY

     Any executive of the Company designated by the Committee in its sole
     discretion shall be eligible to participate in the Plan.

4.   INCENTIVE TARGETS

     (A)  Establishment of Incentive Amounts and Conversion to Phantom Common
          Share Units

          Individual Incentive Amounts for each participant with respect to each
          Plan Award Period (as defined below) shall be determined by the
          Committee. Incentive targets will be expressed in the form of Phantom
          Common Share Units which will be determined by the Committee by: (a)
          first establishing the Individual Incentive Amount in cash for each
          participant with respect to each Award Period and (b) then dividing
          such Individual Incentive Amount by the average of the mean prices for
          the Company's common shares

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          for the first twenty (20) trading days of each Award Period. In all
          cases, the resulting Phantom Common Share Units shall be rounded up to
          the nearest 50 whole units. For purposes of the Plan, "mean price"
          shall be the mean of the highest and lowest selling prices for Company
          common shares quoted on the New York Stock Exchange on the relevant
          trading day. Notwithstanding the foregoing provisions of this Section
          4(A), the Committee may, in its sole discretion, use a different
          method for establishing incentive targets for participants under the
          Plan.

     (B)  Award Periods

          Each Award Period shall be the four-calendar year period commencing as
          of the first day of the calendar year in which the performance
          objectives are established for the Award Period as described in
          Section 4(C). A new Award Period shall commence as of the first day of
          each calendar year, unless otherwise specified by the Committee.

     (C)  Establishment of Company Performance Objectives

          As soon as practicable at the beginning of each Award Period,
          threshold, target, and maximum Company performance objectives for such
          Award Period shall be established by the Committee. Unless otherwise
          determined by the Committee in its sole discretion, performance
          objectives will be established using a CFROGC/EPS Growth Performance
          Matrix which shall use the Company's average cash flow return on gross
          capital ("CFROGC") for such period along one axis and the Company's
          cumulative earnings per share ("EPS") for such period along the second
          axis. Notwithstanding the foregoing, after a Change in Control (as
          hereinafter defined), neither the Committee nor the Board shall have
          the authority to modify performance objectives in any manner which
          could prove detrimental to the interests of the Plan's participants.

     (D)  Determination of Payments

          For each Award Period, payments ranging from 50% to 200% of the
          Phantom Common Share Units credited under Section 4(A) will be
          determined by the Committee for the attainment of performance
          objectives between either threshold and target or target and maximum.

          Final Individual Phantom Common Share Unit Awards shall be determined
          by the Committee as promptly as practicable after the completion of
          the Award Period by: (a) determining the CFROGC/EPS Growth Matrix
          Performance Percentage applicable for the Award Period (equal to (i)
          50% upon attainment of the threshold performance objective; (ii) 100%
          upon attainment of the target performance objective; and (iii) 200%
          upon attainment of the maximum performance; or the applicable
          percentage for performance between threshold and target or target and
          maximum); and (b) multiplying such percentage by the number of
          Performance Share Units credited to the participant.

          The Final Individual Phantom Common Share Unit Award shall be
          converted to cash at a market value of Company common shares as
          determined by the Committee based on the average of the mean prices
          for the Company's common shares for the final twenty (20) trading days
          of the Award Period), and distributed to the participate within ninety
          (90) days, unless the participant has made an irrevocable election to
          defer all or part of the

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          amount of his or her award pursuant to any long term incentive
          compensation deferral plan adopted by the Committee or the Company.

5.   PRORATA PAYMENTS

     A participant must be employed by the Company or one of its subsidiaries at
     the end of an Award Period in order to be entitled to a payment in respect
     to such Award Period; provided, however, that a payment, prorated for the
     participant's length of service during the Award Period, may be authorized
     by the Committee, in its sole discretion, in the event a participant's
     responsibilities change or the employment of a participant begins during
     the Award Period or terminates before the end of the Award Period due to
     death, permanent disability, normal or early retirement, closure or
     divestiture of a Company facility or any other reason. Notwithstanding the
     foregoing, upon any termination of the Plan during the term of any Award
     Period, award payments to all participants will be made, prorated for each
     participant's length of service during the Award Period prior to the date
     of Plan termination.

6.   OTHER PROVISIONS

     (A)  Adjustments upon Certain Changes

          In the event of changes to the structure or corporate organization of
          the Company's businesses which affect the participants and/or the
          performance prospects of the Company, the Committee may make
          appropriate adjustments to individual participant Incentive Targets or
          to the established performance objectives for incomplete Award
          Periods. Adjustments under this Section 6 shall be made by the
          Committee, whose determination as to what adjustments shall be made,
          and the extent thereof, shall be final, binding and conclusive.
          Notwithstanding the foregoing, after a Change in Control, neither the
          Committee nor the Board shall have the authority to change established
          Performance Objectives in any manner which could prove detrimental to
          the interests of the participant.

     (B)  Change in Control Defined

          For purposes of the Plan, a Change in Control shall be deemed to have
          occurred if:

          (i)  a tender offer shall be made and consummated for the ownership of
               25% or more of the outstanding voting securities of the Company,

          (ii) the Company shall be merged or consolidated with another
               corporation and as a result of such merger or consolidation less
               than 55% of the outstanding voting securities of the surviving or
               resulting corporation shall be owned in the aggregate by the
               former shareholders of the Company as the same shall have existed
               immediately prior to such merger or consolidation,

          (iii) the Company shall sell substantially all of its assets to
               another corporation which is not a wholly-owned subsidiary of the
               Company,

          (iv) a "person" within the meaning of Section 3(a)(9) or of Section
               13(d)(3) of the Securities Exchange Act of 1934 (as in effect on
               the effective date of the Plan)

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               shall acquire 25% or more of the outstanding voting securities of
               the Company (whether directly, indirectly, beneficially or of
               record). For purposes of the Plan, ownership of voting securities
               shall take into account and shall include ownership as determined
               by applying the provisions of Rule 13d-3 under the Securities
               Exchange Act of 1934 (as in effect on the effective date of the
               Plan), or

          (v)  during any period of two consecutive years, individuals who at
               the beginning of such period constitute the Board cease for any
               reason to constitute at least a majority thereof unless the
               election, or nomination for election by the Company'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.

     (C)  Non-Transferability

          No right to payment under the Plan shall be subject to debts, contract
          liabilities, engagements or torts of the participant, nor to transfer,
          anticipation, alienation, sale, assignment, pledge or encumbrance by
          the participant except by will or the law of descent and distribution
          or pursuant to a qualified domestic relations order.

     (D)  Compliance with Law and Approval of Regulatory Bodies

          No payment shall be made under the Plan except in compliance with all
          applicable federal and state laws and regulations including, without
          limitation, compliance with tax requirements.

     (E)  No Right to Employment

          Neither the adoption of the Plan nor its operation, nor any document
          describing or referring to the Plan, or any part thereof, shall confer
          upon any participant under the Plan any right to continue in the
          employ of the Company or any subsidiary, or shall in any way affect
          the right and power of the Company or any subsidiary to terminate the
          employment of any participant under the Plan at any time with or
          without assigning a reason therefore, to the same extent as the
          Company might have done if the Plan had not been adopted.

     (F)  Interpretation of the Plan

          Headings are given to the sections of the Plan solely as a convenience
          to facilitate reference; such headings, numbering and paragraphing
          shall not in any case be deemed in any way material or relevant to the
          construction of the Plan or any provisions thereof. The use of the
          masculine gender shall also include within its meaning the feminine.
          The use of the singular shall also include within its meaning the
          plural and vice versa.

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     (G)  Amendment and Termination

          The Committee may at any time suspend, amend or terminate the Plan.
          Notwithstanding the foregoing, upon the occurrence of a Change in
          Control, no amendment, suspension 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.

     (H)  Effective Dates of the Plan

          The Plan was adopted by the Board on and is effective as of June 25,
          2008.

                                        6EX-4(F)(118)

Exhibit 4.(f)(118)

AMENDMENT TO SECURITY AGREEMENT

     This Amendment, dated November 21, 2008, is delivered pursuant to Section 4.15 of the
Security Agreement referred to below. The undersigned hereby agrees that this Amendment may be
attached to the Third Amended and Restated Security Agreement dated as of February 7, 2006, between
the undersigned and Comerica Bank, as the Collateral Agent for the benefit of the Banks and the
Future Debt Holders referred to therein (the “Security Agreement”), and that the shares of
stock, membership interests, partnership units, notes or other instruments listed on Schedule
1 annexed hereto shall be and become part of the Collateral referred to in the Security
Agreement and shall secure payment and performance of all Benefited Obligations as provided in the
Security Agreement.

     Capitalized terms used herein but not defined herein shall have the meanings therefor provided
in the Security Agreement.

(signatures appear on the following pages)

 

 

	 	 	 	 	 
	 	CREDIT ACCEPTANCE CORPORATION

 	 
	 	By:  	/s/ Douglas W. Busk
 	 
	 	Name: 	Douglas W. Busk 	 
	 	Title:  	Treasurer 	 
	 

Signature Page to Amendment to Security Agreement

(859954)

 

 

AUTO FUNDING AMERICA OF NEVADA INC.

BUYERS VEHICLE PROTECTION PLAN, INC.

CAC LEASING, INC.

VEHICLE REMARKETING SERVICES, INC.

CREDIT ACCEPTANCE CORPORATION OF

NEVADA, INC.

CAC (TCI), LTD.

CREDIT ACCEPTANCE CORPORATION OF SOUTH DAKOTA, INC.

CAC REINSURANCE, LTD.

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Douglas W. Busk 	 
	 	Name:  	Douglas W. Busk 	 
	 	Title:  	Treasurer 	 
	 

Signature Page to Amendment to Security Agreement

(859954)

 

 

	 	 	 	 	 
	 	COMERICA BANK, as Collateral Agent

 	 
	 	By:  	/s/ Timothy J. Bishop
 	 
	 	Name:  	Timothy J. Bishop 	 
	 	Title:  	Vice President 	 
	 

Signature Page to Amendment to Security Agreement

(859954)

 

 

SCHEDULE 1

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Pledged Shares as a	 	 
	 	 	 	 	 	 	 	 	 	 	No. of Shares	 	% of Total Shares	 	Total Shares
	Issuer	 	Owner	 	Certificate No.	 	Pledged	 	Outstanding	 	Outstanding
	VSC Re Company
	 	Company	 	 	1	 	 	 	10,000	 	 	 	100	%	 	 	10,000

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