2007 Stock Option Gra - EATON CORP - 2-28-2007

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2007 Stock Option Gra - EATON CORP - 2-28-2007 Powered By Docstoc
					Exhibit 10 (k) (EATON LOGO) Eaton Corporation 2006 Annual Report on Form 10-K Item 15 (b) 2007 STOCK OPTION GRANT STOCK OPTION AGREEMENT UNDER THE 2004 STOCK PLAN OPTIONHOLDER: DATE OF GRANT: February 27, 2007 DATE OF EXPIRATION: February 27, 2017 TOTAL NUMBER OF STOCK OPTIONS: OPTION PRICE: MARKET VALUE: INCENTIVE STOCK OPTION SHARES: NON-QUALIFIED STOCK OPTION SHARES: EATON CORPORATION, an Ohio corporation (the "Company"), hereby grants to the Optionholder, in consideration of service by him or her to the Company or a subsidiary of the Company, the option to purchase from the Company the number of common shares of the Company with a par value of fifty cents each (the "Common Shares") specified above from time to time during a period which shall end at the close of business on the tenth anniversary of the date of the granting of this option (such period being referred to as the "fixed term of the option"), unless sooner terminated as hereinafter provided. For purposes of the foregoing sentence, "close of business" shall mean 4:00 p.m. Eastern Time on the day of the tenth anniversary. However, if that day falls on a Saturday, Sunday or other day when the principal stock exchange for the Common Shares is closed for trading, "close of business" shall mean 4:00 p.m. Eastern Time on the nearest preceding day when that stock exchange is open for trading. This option is subject to, and is granted in accordance with, the 2004 Stock Plan (the "2004 Plan"), and upon the terms and conditions herein set forth. I. TERMS OF EXERCISE OF OPTION A. By the Optionholder While an Employee of the Company or a Subsidiary The Optionholder may exercise this option only after he or she remains in the continuous employment of the Company for a period of one year from the date of granting of this option and only as to the number of shares which become vested as set forth below. Employment by a subsidiary shall be counted as employment by the Company. Subject to Section I. B. hereof, after one year of such continuous employment following the date of grant of this option, the Optionholder, while still so employed, may exercise this option as follows: 1. At any time after one year of such continuous employment from the date of grant, as to 33% of the Common Shares subject to this option; 2. At any time after two years of such continuous employment from the date of grant, as to an additional 33% of the Common Shares subject to this option; and

(EATON LOGO) 2007 STOCK OPTION GRANT

(EATON LOGO) 2007 STOCK OPTION GRANT I. TERMS OF EXERCISE OF OPTION (CONTINUED) A. By the Optionholder While an Employee of the Company or a Subsidiary (continued) 3. At any time after three years of such continuous employment from the date of grant, as to an additional 34% of the Common Shares subject to this option. The Compensation and Organization Committee of the Board of Directors of the Company (the "Committee") reserves the right to decide to what extent leaves of absence for government or military service, illness, temporary disability, or other reasons shall not be deemed to be an interruption of continuous employment. B. By the Optionholder When No Longer Employed by Either the Company or a Subsidiary 1. Retirement. If the Optionholder ceases to be an employee as a result of retirement on or after normal retirement age (age 65 for U.S. employees), or on or after age 50 and 10 years of service to the Company or a subsidiary (early retirement), he or she may exercise this option with respect to all Common Shares then subject to this option which are vested at the date of such retirement in accordance with the schedule set forth in Section I.A above, for a period not to exceed the shorter of the remaining term of this option or five years after the retirement date. 2. Divestiture of a Facility. If the Optionholder ceases to be an employee as a result of the divestiture of a facility where the Optionholder is employed, he or she may exercise this option with respect to all Common Shares then subject to this option, both vested and unvested, for a period not to exceed 90 days after the effective date of the divestiture. If the divestiture results in the retirement of the Optionholder (as described in Subsection B.1), then he or she may exercise this option with respect to all Common Shares then subject to this option (both vested and unvested) for a period not to exceed the shorter of the remaining term of the option or five years after the retirement date. 3. Other Terminations. If the Optionholder ceases to be an employee for any reason other than those described in Subsections B.1. or B.2., he or she may exercise this option only for the number of Common Shares which are vested at the time he or she ceased to be an employee, and he or she may exercise this option only for a period not to exceed 90 days following the termination of employment. 4. Company Discretion. In the case of a termination of an officer of the Company that is subject to Subsections B.1 or B.3, the officer may exercise this option for such number of Common Shares that is greater than the number provided by those Subsections as the Committee may authorize by acceleration of vesting or extension of the exercise period (but not beyond the ten year term of this option). In the case of the termination of employment of an employee who is not an officer of the Company that is subject to Subsections B.1 or B.2, the employee may exercise this option for such number of Common Shares greater than provided by those Subsections as the Management Compensation Committee ("Management Committee") may authorize by acceleration of vesting or extension of the exercise period (but not beyond the ten year term of this option). The Optionholder should have no expectation that the Committee or the Management Committee will take any discretionary action contemplated by this Subsection B.4.

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(EATON LOGO) 2007 STOCK OPTION GRANT B. By the Optionholder When No Longer Employed by Either the Company or a Subsidiary (continued) 5. Incentive Stock Options To receive favorable tax treatment afforded Incentive Stock Options, the Incentive Stock Option Shares must be exercised within 90 days of retirement or other termination of employment or within one year of termination of employment due to permanent and total disability. Incentive Stock Option Shares that are not exercised within those periods will, for tax purposes, be treated the same as Non-Qualified Stock Options. C. By the Optionholder After Change in Position If the Optionholder should be assigned to any position with the Company or its subsidiaries which is, in the sole and absolute discretion of the Committee, of lesser responsibility than that which is held by the Optionholder upon the date hereof, thereafter the Optionholder may exercise this option (during the term of the option) only for the number of Common Shares for which the option was exercisable at the time of such assignment or such greater number of Common Shares as determined by the Committee in the exercise of its sole and absolute discretion. D. In Case of the Death of the Optionholder Upon the death of the Optionholder, this option shall be exercisable by the Optionholder's estate, or by a person who has acquired the right to exercise this option by bequest or inheritance, (i) during the period of 12 months after the date of death (but no later than the end of the fixed term of the option) for the number of Common Shares for which the option was exercisable upon the date of death, and (ii) during such period of time, if any (but ending no later than the end of the fixed term of the option), which the Committee may determine in its sole and absolute discretion, for the number of Common Shares for which the Optionholder could have exercised this option in accordance with its terms prior to the expiration of that period of time if the Optionholder had lived. E. Term The option shall in no event be exercisable after the expiration of 10 years from the date of the granting of the option, notwithstanding anything to the contrary in Sections I. A, B, C or D above. The option hereby granted shall be considered terminated and cancelled, in whole or in part, to the extent that it can no longer be exercised under the terms hereof or under the terms of the 2004 Plan, for the Common Shares originally subject to this option, or in the event the Optionholder shall fail, within 60 days after the granting of this option, to deliver to the Company an acceptance of such option executed by him or her. II. EXERCISING OPTION--RIGHTS AS A SHAREHOLDER A. Exercise and Payment This option may be exercised only at time when the principal exchange for the Common Shares is open for business. An exercise of this option will be effective when the person or estate entitled to exercise it shall indicate the decision to do so, as to all or any part of the Common Shares for which it may then be exercised, by any method of communication expressly authorized by the Company and at the same time tenders or makes available to the Company (by any method expressly authorized by the Company) payment in full the exercise price in cash or by delivery to the Company of Common Shares owned by the Optionholder, or by tender of a combination of cash and Common Shares. A partial exercise of this option shall not affect the right to exercise it from time to time thereafter as to the remaining Common Shares subject to the option. The Company shall notify the Optionholder of the expiration date of the fixed term of this option no less than 90 days, nor more than 180 days, in advance of such expiration date.

(EATON LOGO) 2007 STOCK OPTION GRANT B. By the Optionholder When No Longer Employed by Either the Company or a Subsidiary (continued) 5. Incentive Stock Options To receive favorable tax treatment afforded Incentive Stock Options, the Incentive Stock Option Shares must be exercised within 90 days of retirement or other termination of employment or within one year of termination of employment due to permanent and total disability. Incentive Stock Option Shares that are not exercised within those periods will, for tax purposes, be treated the same as Non-Qualified Stock Options. C. By the Optionholder After Change in Position If the Optionholder should be assigned to any position with the Company or its subsidiaries which is, in the sole and absolute discretion of the Committee, of lesser responsibility than that which is held by the Optionholder upon the date hereof, thereafter the Optionholder may exercise this option (during the term of the option) only for the number of Common Shares for which the option was exercisable at the time of such assignment or such greater number of Common Shares as determined by the Committee in the exercise of its sole and absolute discretion. D. In Case of the Death of the Optionholder Upon the death of the Optionholder, this option shall be exercisable by the Optionholder's estate, or by a person who has acquired the right to exercise this option by bequest or inheritance, (i) during the period of 12 months after the date of death (but no later than the end of the fixed term of the option) for the number of Common Shares for which the option was exercisable upon the date of death, and (ii) during such period of time, if any (but ending no later than the end of the fixed term of the option), which the Committee may determine in its sole and absolute discretion, for the number of Common Shares for which the Optionholder could have exercised this option in accordance with its terms prior to the expiration of that period of time if the Optionholder had lived. E. Term The option shall in no event be exercisable after the expiration of 10 years from the date of the granting of the option, notwithstanding anything to the contrary in Sections I. A, B, C or D above. The option hereby granted shall be considered terminated and cancelled, in whole or in part, to the extent that it can no longer be exercised under the terms hereof or under the terms of the 2004 Plan, for the Common Shares originally subject to this option, or in the event the Optionholder shall fail, within 60 days after the granting of this option, to deliver to the Company an acceptance of such option executed by him or her. II. EXERCISING OPTION--RIGHTS AS A SHAREHOLDER A. Exercise and Payment This option may be exercised only at time when the principal exchange for the Common Shares is open for business. An exercise of this option will be effective when the person or estate entitled to exercise it shall indicate the decision to do so, as to all or any part of the Common Shares for which it may then be exercised, by any method of communication expressly authorized by the Company and at the same time tenders or makes available to the Company (by any method expressly authorized by the Company) payment in full the exercise price in cash or by delivery to the Company of Common Shares owned by the Optionholder, or by tender of a combination of cash and Common Shares. A partial exercise of this option shall not affect the right to exercise it from time to time thereafter as to the remaining Common Shares subject to the option. The Company shall notify the Optionholder of the expiration date of the fixed term of this option no less than 90 days, nor more than 180 days, in advance of such expiration date. 3

(EATON LOGO) 2007 STOCK OPTION GRANT II. EXERCISING OPTION--RIGHTS AS A SHAREHOLDER (CONTINUED) B. Shareholder Rights No holder of this option shall have any rights as a shareholder with respect to any Common Shares subject to the option unless and until he or she shall have received a certificate or certificates for such Common Shares. Subject to compliance with all the terms and conditions hereof and of the 2004 Plan, including all rules, regulations and determinations of the Committee, the Company shall, as promptly as possible after any exercise of this option, deliver a certificate or certificates for an appropriate number of Common Shares; provided, however, that no such certificate or certificates shall be so delivered unless and until adequate provision has, in the judgment of the Company, been made for any and all withholding taxes in respect of the exercise of the option. III. TRANSFER OF OPTION This option shall not be transferable otherwise than by will or the law of descent and distribution or to the extent permitted by rules or regulations under Section 16(b) under the Securities Exchange Act of 1934 (the "Exchange Act") and the Committee. IV. COMPLIANCE WITH LAWS, REGULATIONS AND RULES The Company will use its reasonable best efforts to comply with all federal and state laws and regulations and all rules for domestic stock exchanges on which its Common Shares may be listed, which apply to the issuance of the Common Shares subject to this option, and to obtain such consents and approvals to such issuance which it deems advisable from federal and state bodies having jurisdiction of such matters. However, anything herein to the contrary notwithstanding, this option shall not be exercisable, and the Company shall not be obligated to issue or deliver any certificate for shares subject to this option, in violation of any such laws, regulations or rules and unless and until such consents and approvals have been obtained. Any share certificate issued to evidence Common Shares as to which this option is exercised may bear such legends and statements as the Committee shall deem advisable to assure compliance with federal and state laws and regulations. If a person or an estate purporting to acquire the rights to exercise this option by bequest or inheritance shall attempt to exercise this option, the Company may require reasonable evidence as to the ownership of this option and may request such consents and releases of taxing authorities as it deems advisable. V. ADJUSTMENT UPON CHANGE OF SHARES In the event of a reorganization, merger, consolidation, reclassification, recapitalization, combination or exchange of shares, stock split, stock dividend, rights offering or other event affecting Common Shares, the number and class of Common Shares subject to this option, the price per share payable upon exercise of this option and the conditions on which this option shall become exercisable, shall be equitably adjusted by the Committee so as to reflect such change. No adjustment provided for in this Section V shall require the Company to sell or transfer a fractional share. VI. EFFECT ON EMPLOYMENT The granting of this option shall not give the Optionholder any right to be retained in the employ of the Company or any subsidiary, and shall not affect the right of the Company to terminate the employment of the Optionholder at any time with or without assigning a reason therefore to the same extent as the Company might have done if this option had not been granted. 4

(EATON LOGO)

(EATON LOGO) 2007 STOCK OPTION GRANT VII. COMPETITION BY OPTIONHOLDER In the event that the Optionholder voluntarily leaves employment of the Company or a subsidiary and within one (1) year after exercise of any portion of this option enters into an activity as employee, agent, officer, director, principal or proprietor which, in the sole judgment of the Committee, is in competition with the Company or a subsidiary, the amount by which the fair market value per share on the date of exercise of any such portion exceeds the option price per Common Share hereunder, multiplied by the number of Common Shares subject to such exercised portion, shall inure to the benefit of the Company and the Optionholder shall pay the same to the Company, unless the Committee in its sole discretion shall determine that such action by the Optionholder is not inimical to the best interest of the Company or its subsidiaries. VIII. CHANGE OF CONTROL A. Exercise of Option Notwithstanding anything in Section I.A to the contrary, effective upon a Change of Control of the Company (as defined below), this option shall become fully exercisable for 100% of the Common Shares subject to this option. B. Definition For the purpose of this Agreement, a "Change of Control" shall mean: 1. The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of either (i) the then outstanding common shares of the Company (the "Outstanding Common Shares") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection 1, the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, or (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or 2. Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or 3. Consummation by the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Shares and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 75% of, respectively, the then outstanding common shares and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, 5

(EATON LOGO)

(EATON LOGO) 2007 STOCK OPTION GRANT VIII. CHANGE OF CONTROL (CONTINUED) B. Definition (continued) 3. a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Common Shares and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 25% or more of, respectively, the then outstanding common shares of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or 4. Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. Notwithstanding the foregoing, a "Change of Control" shall not be deemed to have occurred as a result of any transaction or series of transactions which the Optionholder, or any entity in which the Optionholder is a partner, officer or more than 50% owner initiates, if immediately following the transaction or series of transactions that would otherwise constitute a Change of Control, the Optionholder, either alone or together with other individuals who are executive officers of the Company immediately prior thereto, beneficially owns, directly or indirectly, more than 10% of the then outstanding common shares of the Company or the corporation resulting from the transaction or series of transactions, as applicable, or of the combined voting power of the then outstanding voting securities of the Company or such resulting corporation. IX. ENFORCEABILITY This Agreement shall be binding upon and inure to the benefit of the Company, and its successors and assigns, and upon the personal representatives, executors, administrators, legatees and distributees of the Optionholder. X. 2004 PLAN CONTROLS The terms and conditions of the 2004 Plan, as amended from time to time in accordance with the provisions of Section 12 thereof, shall control the terms and conditions of this option, and anything contained in this Agreement inconsistent with or in violation of the terms and conditions of the 2004 Plan shall be of no force or effect and shall not be binding upon the Company or the Optionholder. The 2004 Plan and this Agreement represent the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, representations and understandings, whether written or oral. 6

(EATON LOGO) 2007 STOCK OPTION GRANT XI. CONSTRUCTION It is intended that acquisition of this option by the Optionholder shall qualify for exemption from the provisions of Section 16(b) of the Exchange Act, and each and every provision of this Agreement shall be construed, interpreted and administered so that the grant of this option, whether made to an officer or director of the Company or to any other employee of the Company or a subsidiary, shall so qualify. Any provision of this

(EATON LOGO) 2007 STOCK OPTION GRANT XI. CONSTRUCTION It is intended that acquisition of this option by the Optionholder shall qualify for exemption from the provisions of Section 16(b) of the Exchange Act, and each and every provision of this Agreement shall be construed, interpreted and administered so that the grant of this option, whether made to an officer or director of the Company or to any other employee of the Company or a subsidiary, shall so qualify. Any provision of this Agreement that cannot be so construed, interpreted and administered shall be of no force or effect. XII. GOVERNING LAW This Agreement shall be construed in accordance with the laws of the State of Ohio, except as otherwise specifically provided herein. EATON CORPORATION By -s- S. J. Cook And By -s- E. R. Franklin ACCEPTANCE OF OPTION BY OPTIONHOLDER Accepted by_____________________________ Signature Date____________________________________ 7

Exhibit 10 (s) Eaton Corporation 2006 Annual Report on Form 10-K Item 15 (b) 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:

Exhibit 10 (s) Eaton Corporation 2006 Annual Report on Form 10-K Item 15 (b) 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.

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

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 -2-

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 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

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 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. -3-

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. 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.

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. 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. -4-

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.

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. -5-

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.

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 -6-

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 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

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 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. -7-

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 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.

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 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. -8-

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.

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. 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. -9-

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. - 10 -

Exhibit 10 (w) Eaton Corporation 2006 Annual Report on Form 10-K Item 15 (b) EATON CORPORATION EXECUTIVE STRATEGIC INCENTIVE PLAN I

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. - 10 -

Exhibit 10 (w) Eaton Corporation 2006 Annual Report on Form 10-K Item 15 (b) EATON CORPORATION EXECUTIVE STRATEGIC INCENTIVE PLAN I (Originally Effective as of January 1, 1991 and Amended and Restated as of June 21, 1994, July 25, 1995, April 21, 1998, April 1, 1999, January 1, 2001 and January 23, 2007)

EATON CORPORATION EXECUTIVE STRATEGIC INCENTIVE PLAN I 1. PURPOSE The purpose of the Executive Strategic Incentive Plan I (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 Except as otherwise expressly provided herein, the Plan shall be administered by the Compensation and Organization Committee (the "Committee") of the Company's Board of Directors (the "Board") which shall consist of at least three directors of the Company selected by the Board. Except as otherwise expressly provided herein, the Committee shall 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

Exhibit 10 (w) Eaton Corporation 2006 Annual Report on Form 10-K Item 15 (b) EATON CORPORATION EXECUTIVE STRATEGIC INCENTIVE PLAN I (Originally Effective as of January 1, 1991 and Amended and Restated as of June 21, 1994, July 25, 1995, April 21, 1998, April 1, 1999, January 1, 2001 and January 23, 2007)

EATON CORPORATION EXECUTIVE STRATEGIC INCENTIVE PLAN I 1. PURPOSE The purpose of the Executive Strategic Incentive Plan I (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 Except as otherwise expressly provided herein, the Plan shall be administered by the Compensation and Organization Committee (the "Committee") of the Company's Board of Directors (the "Board") which shall consist of at least three directors of the Company selected by the Board. Except as otherwise expressly provided herein, the Committee shall 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. With respect to Award Periods beginning on or after January 1, 1998, participant incentive targets will be expressed in the form of Phantom Common Share Units which will be determined by the Committee by: (a) first establishing 2

EATON CORPORATION EXECUTIVE STRATEGIC INCENTIVE PLAN I 1. PURPOSE The purpose of the Executive Strategic Incentive Plan I (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 Except as otherwise expressly provided herein, the Plan shall be administered by the Compensation and Organization Committee (the "Committee") of the Company's Board of Directors (the "Board") which shall consist of at least three directors of the Company selected by the Board. Except as otherwise expressly provided herein, the Committee shall 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. With respect to Award Periods beginning on or after January 1, 1998, participant incentive targets will be expressed in the form of Phantom Common Share Units which will be determined by the Committee by: (a) first establishing 2

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 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 List of Composite Transactions 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

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 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 List of Composite Transactions 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. For Award Periods commencing on or after January 1, 1998, 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. Within sixty (60) days after the performance objectives have been established by the Committee, each participant will be provided with written notice of his or her established objectives. In its sole discretion, the Committee may modify previously established performance objectives due to any change in conditions, the occurrence of any events or other factors which make such objectives unsuitable. 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 3

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. For Award Periods beginning on or after January 1, 1998, Final Individual Phantom Common Share Unit Awards shall be determined by the Committee as promptly as practicable after the completion of the Award Period: (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); (b) multiplying such percentage by the number of Performance Share Units credited to the participant and (c) further multiplying the result by an Individual Performance Rating which will be a whole percentage between zero and 150% established by the Committee in its sole discretion after considering the recommendations of Company management. 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 amount of his or her award pursuant to any long term incentive compensation deferral plan adopted by the Committee or the Company.

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. For Award Periods beginning on or after January 1, 1998, Final Individual Phantom Common Share Unit Awards shall be determined by the Committee as promptly as practicable after the completion of the Award Period: (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); (b) multiplying such percentage by the number of Performance Share Units credited to the participant and (c) further multiplying the result by an Individual Performance Rating which will be a whole percentage between zero and 150% established by the Committee in its sole discretion after considering the recommendations of Company management. 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 amount of his or her award pursuant to any long term incentive compensation deferral plan adopted by the Committee or the Company. Notwithstanding any provision in this Section 4(D)to the contrary, the amount of the cash award with respect to the Chairman and Chief Executive Officer for the 2003-2006 Award Period Plan shall be limited to the amount of his award for the 2002-2005 Award Period. 5. PRORATA PAYMENTS 4

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 the employment of a participant terminates before the end of an Award Period due to death, permanent disability, normal or early retirement, closure or divestiture of an Eaton facility or any other reason. Notwithstanding the foregoing, upon any termination of the Plan by the Committee during the term of any Award Period, 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

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 the employment of a participant terminates before the end of an Award Period due to death, permanent disability, normal or early retirement, closure or divestiture of an Eaton facility or any other reason. Notwithstanding the foregoing, upon any termination of the Plan by the Committee during the term of any Award Period, 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 75% of the outstanding voting securities of the surviving or resulting corporation shall be owned in the aggregate by the former shareholders of the Company as the same 5

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) 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(d)(1)(I) 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.

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) 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(d)(1)(I) 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 6

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. (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 April 24, 1991 but the effective date of the Plan shall be January 1, 1991. The Plan was amended and restated as of June 21, 1994, July 25, 1995, April 21, 1998, April 1, 1999 and January 1, 2001 (which includes changes which affect Awards granted on or after January 1, 1998).

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. (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 April 24, 1991 but the effective date of the Plan shall be January 1, 1991. The Plan was amended and restated as of June 21, 1994, July 25, 1995, April 21, 1998, April 1, 1999 and January 1, 2001 (which includes changes which affect Awards granted on or after January 1, 1998). 7

APPROVAL AND ADOPTION The Eaton Corporation EXECUTIVE STRATEGIC INCENTIVE PLAN I, in the form attached hereto, is hereby approved and adopted. Name Date: _____________ Title Name Title 8

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 12 RATIO OF EARNINGS TO FIXED CHARGES
Year ended December 31 --------------------------------------2006 2005 2004 2003 2002 ----------------------(Millions of dollars) Income from continuing operations before income taxes

$

989

$

988

$768

$ 492

$ 384

APPROVAL AND ADOPTION The Eaton Corporation EXECUTIVE STRATEGIC INCENTIVE PLAN I, in the form attached hereto, is hereby approved and adopted. Name Date: _____________ Title Name Title 8

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 12 RATIO OF EARNINGS TO FIXED CHARGES
Year ended December 31 --------------------------------------2006 2005 2004 2003 2002 ----------------------(Millions of dollars) Income from continuing operations before income taxes Adjustments ----------Minority interests in consolidated subsidiaries Loss (income) from equity investees Interest expensed Amortization of debt issue costs Estimated portion of rent expense representing interest Amortization of capitalized interest Distributed income of equity investees Adjusted income from continuing operations before income taxes Fixed charges Interest expensed Interest capitalized Amortization of debt issue costs Estimated portion of rent expense representing interest Total fixed charges Ratio of earnings to fixed charges

$

989

$

988

$768

$ 492

$ 384

10 1 139 1 41 12 1 -----$1,194 ====== $ 139 14 1

5 1 109 1 38 12 4 -----$1,158 ====== $ 109 13 1

7 88 1 37 17 3 ---$921 ==== $ 88 7 1 38 ---$134 ==== 6.87

12 (3) 93 2 38 13 ----$ 647 ===== $ 93 7 2

14 (1) 110 2 34 13 ----$ 556 ===== $ 110 8 2 34 ----$ 154 ===== 3.61

41 -----$ 195 ====== 6.12

38 -----$ 161 ====== 7.19

38 ----$ 140 ===== 4.62

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 12 RATIO OF EARNINGS TO FIXED CHARGES
Year ended December 31 --------------------------------------2006 2005 2004 2003 2002 ----------------------(Millions of dollars) Income from continuing operations before income taxes Adjustments ----------Minority interests in consolidated subsidiaries Loss (income) from equity investees Interest expensed Amortization of debt issue costs Estimated portion of rent expense representing interest Amortization of capitalized interest Distributed income of equity investees Adjusted income from continuing operations before income taxes Fixed charges Interest expensed Interest capitalized Amortization of debt issue costs Estimated portion of rent expense representing interest Total fixed charges Ratio of earnings to fixed charges

$

989

$

988

$768

$ 492

$ 384

10 1 139 1 41 12 1 -----$1,194 ====== $ 139 14 1

5 1 109 1 38 12 4 -----$1,158 ====== $ 109 13 1

7 88 1 37 17 3 ---$921 ==== $ 88 7 1 38 ---$134 ==== 6.87

12 (3) 93 2 38 13 ----$ 647 ===== $ 93 7 2

14 (1) 110 2 34 13 ----$ 556 ===== $ 110 8 2 34 ----$ 154 ===== 3.61

41 -----$ 195 ====== 6.12

38 -----$ 161 ====== 7.19

38 ----$ 140 ===== 4.62

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 21 SUBSIDIARIES OF EATON CORPORATION Eaton is publicly held and has no parent corporation. Eaton's subsidiaries as of December 31, 2006 and the state or country in which each was organized are as follows:
Consolidated subsidiaries (A) ----------------------------Eaton MDH Company Inc. Eaton Aerospace HiTemp Inc. Aeroquip International Inc. Eaton Administration Corporation Eaton Aerospace LLC Eaton Asia Investments Corporation Eaton Aviation Corporation Eaton Aviation Products Corporation Eaton Electrical de Puerto Rico Inc. Eaton Electrical Inc. Eaton Filtration LLC Eaton Hydraulics Inc. Eaton International Corporation Eaton MDH Limited Partnership Where Organized --------------California Colorado Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 21 SUBSIDIARIES OF EATON CORPORATION Eaton is publicly held and has no parent corporation. Eaton's subsidiaries as of December 31, 2006 and the state or country in which each was organized are as follows:
Consolidated subsidiaries (A) ----------------------------Eaton MDH Company Inc. Eaton Aerospace HiTemp Inc. Aeroquip International Inc. Eaton Administration Corporation Eaton Aerospace LLC Eaton Asia Investments Corporation Eaton Aviation Corporation Eaton Aviation Products Corporation Eaton Electrical de Puerto Rico Inc. Eaton Electrical Inc. Eaton Filtration LLC Eaton Hydraulics Inc. Eaton International Corporation Eaton MDH Limited Partnership Eaton Nocadoli Holding LLC Eaton USEV Holding Company ERC Corporation Intelligent Switchgear Organization LLC Modern Molded Products, Inc. Tractech Holdings Inc. Tractech Inc. U.S. Engine Valve Vickers International Inc. Eaton Aeroquip Inc. Eaton Inoac Company Aeroquip-Vickers, Inc. Eaton Electrical IDT Inc. Eaton Leasing Corporation Eaton Power Quality S.A. Eaton Electric Systems Pty. Ltd. Eaton Finance G.P. Eaton Finance Pty. Ltd. Eaton Industries Pty. Ltd. Eaton Power Quality Pty. Ltd. Eaton Pty. Ltd. Vickers Systems Pty. Ltd. Eaton Holding G.m.b.H. Aeroquip Ltd. Aeroquip-Vickers Assurance Ltd. Eaton Holding Srl Eaton Filtration, BVBA Aeroquip-Vickers International Inc. Eaton Services Limited Saturn Insurance Company Ltd. Aeroquip do Brasil, Ltda. Eaton Ltda. Eaton Power Solutions Ltda. Senyuan International Holdings Limited Team Achieve Investments Limited Winner Hydraulics Ltd. Aeroquip-Vickers Canada, Inc. Eaton ETN Offshore, Company Eaton Power Quality, Company Eaton Yale, Company. Cutler-Hammer Company Cutler-Hammer Electrical Company Cutler-Hammer Industries Ltd. Where Organized --------------California Colorado Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Michigan Michigan Ohio Ohio Ohio Argentina Australia Australia Australia Australia Australia Australia Australia Austria Barbados Barbados Barbados Belgium Bermuda Bermuda Bermuda Brazil Brazil Brazil Cayman Islands British Virgin Islands British Virgin Islands Canada Canada Canada Canada Cayman Islands Cayman Islands Cayman Islands

Eaton Holding III Limited Georgetown Financial Services Ltd. Senyuan International Holdings Limited Changzhou Lanling Electrical Co., ltd. Changzhou Senyuan Switch Co. Ltd. Eaton (China) Investments Co., Ltd. Eaton Electrical (Suzhou) Co., Ltd. Eaton Fast Gear (Xi'an) Co., Ltd. Eaton Filtration (Shanghai) Co. Ltd. Eaton Fluid Power (Jining) Co., Ltd. Eaton Fluid Power (Shanghai) Co., Ltd. Eaton Hydraulics Systems (Jining) Co. Ltd. Eaton Industries (Shanghai) Co. Ltd Eaton Power Quality (Shanghai) Company Ltd. Eaton Senstar Automotive Fluid Connectors (Shanghai) Co., Ltd. Eaton Truck and Bus Components (Shanghai) Company, Ltd. Hangzhou Eaton Power Quality Co., Ltd. Nkt Electrical Components (Changzhou) Co., Ltd. Shanghai Eaton Engine Components Company, Ltd. Eaton Electrical S.A. Eaton Industries s.r.o. Eaton Electric ApS Eaton Holec, OY Eaton Power Quality Oy Eaton Aviation SAS Eaton Power Quality S.A. Eaton Power Solutions SAS Eaton SAS Eaton Technologies S.A. Eaton Automotive G.m.b.H. Eaton Filtration G.m.b.H. Eaton Fluid Connectors G.m.b.H Eaton Fluid Power G.m.b.H. Eaton Holding G.m.b.H. Eaton Holding Investments G.m.b.H & Co. KG Eaton Power Quality G.m.b.H Eaton Filtration Holdings G.m.b.H. Eaton Filtration Limited Eaton Power Quality Limited Team Billion Investment Limited Vickers Systems Limited Eaton Industries Private Ltd. Eaton Power Quality Private Limited Vickers Systems International Ltd. PT Fluid Sciences Batam Eaton Automotive Ltd. Tractech (Ireland) Limited Eaton Fluid Power Srl Eaton Srl Eaton Filtration Ltd. Eaton Fluid Power Limited Eaton Japan Co., Ltd. Eaton Holding S.a r.l. Eaton Holding II S.a.r.l. Eaton Holding III S.a.r.l. Eaton Electric Manufacturing Holdings Sdn. Bhd. Eaton Electric Switchgear Sdn. Bhd. Aeroquip de Mexico S. de R.L. de C.V. Eaton Controls, S. de R.L. de C.V. Eaton Electrical Mexicana S. de R.L. de C.V. Eaton Finance, S. de R.L. de C.V. Eaton Industries S. de R.L. de C.V. Eaton Molded Products S. de R.L. de C.V. Eaton Power Solutions, S. de R.L. de C.V. Eaton Truck Components, S. de R.L. de C.V. Eaton Automotive S. de R.L. de C.V. Operaciones de Maquila de Juarez S. de R.L. de C.V. Eaton Automotive B.V.

Cayman Islands Cayman Islands Cayman Islands China China China China China China China China China China China China China China China China Costa Rica Czech Republic Denmark Finland Finland France France France France France Germany Germany Germany Germany Germany Germany Germany Germany Hong Kong Hong Kong Hong Kong Hong Kong India India India Indonesia Ireland Ireland Italy Italy Japan Japan Japan Luxembourg Luxembourg Luxembourg Malaysia Malaysia Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico Netherlands

Eaton B.V. Eaton C.V.

Netherlands Netherlands

Eaton Holding III Limited Georgetown Financial Services Ltd. Senyuan International Holdings Limited Changzhou Lanling Electrical Co., ltd. Changzhou Senyuan Switch Co. Ltd. Eaton (China) Investments Co., Ltd. Eaton Electrical (Suzhou) Co., Ltd. Eaton Fast Gear (Xi'an) Co., Ltd. Eaton Filtration (Shanghai) Co. Ltd. Eaton Fluid Power (Jining) Co., Ltd. Eaton Fluid Power (Shanghai) Co., Ltd. Eaton Hydraulics Systems (Jining) Co. Ltd. Eaton Industries (Shanghai) Co. Ltd Eaton Power Quality (Shanghai) Company Ltd. Eaton Senstar Automotive Fluid Connectors (Shanghai) Co., Ltd. Eaton Truck and Bus Components (Shanghai) Company, Ltd. Hangzhou Eaton Power Quality Co., Ltd. Nkt Electrical Components (Changzhou) Co., Ltd. Shanghai Eaton Engine Components Company, Ltd. Eaton Electrical S.A. Eaton Industries s.r.o. Eaton Electric ApS Eaton Holec, OY Eaton Power Quality Oy Eaton Aviation SAS Eaton Power Quality S.A. Eaton Power Solutions SAS Eaton SAS Eaton Technologies S.A. Eaton Automotive G.m.b.H. Eaton Filtration G.m.b.H. Eaton Fluid Connectors G.m.b.H Eaton Fluid Power G.m.b.H. Eaton Holding G.m.b.H. Eaton Holding Investments G.m.b.H & Co. KG Eaton Power Quality G.m.b.H Eaton Filtration Holdings G.m.b.H. Eaton Filtration Limited Eaton Power Quality Limited Team Billion Investment Limited Vickers Systems Limited Eaton Industries Private Ltd. Eaton Power Quality Private Limited Vickers Systems International Ltd. PT Fluid Sciences Batam Eaton Automotive Ltd. Tractech (Ireland) Limited Eaton Fluid Power Srl Eaton Srl Eaton Filtration Ltd. Eaton Fluid Power Limited Eaton Japan Co., Ltd. Eaton Holding S.a r.l. Eaton Holding II S.a.r.l. Eaton Holding III S.a.r.l. Eaton Electric Manufacturing Holdings Sdn. Bhd. Eaton Electric Switchgear Sdn. Bhd. Aeroquip de Mexico S. de R.L. de C.V. Eaton Controls, S. de R.L. de C.V. Eaton Electrical Mexicana S. de R.L. de C.V. Eaton Finance, S. de R.L. de C.V. Eaton Industries S. de R.L. de C.V. Eaton Molded Products S. de R.L. de C.V. Eaton Power Solutions, S. de R.L. de C.V. Eaton Truck Components, S. de R.L. de C.V. Eaton Automotive S. de R.L. de C.V. Operaciones de Maquila de Juarez S. de R.L. de C.V. Eaton Automotive B.V.

Cayman Islands Cayman Islands Cayman Islands China China China China China China China China China China China China China China China China Costa Rica Czech Republic Denmark Finland Finland France France France France France Germany Germany Germany Germany Germany Germany Germany Germany Hong Kong Hong Kong Hong Kong Hong Kong India India India Indonesia Ireland Ireland Italy Italy Japan Japan Japan Luxembourg Luxembourg Luxembourg Malaysia Malaysia Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico Netherlands

Eaton B.V. Eaton C.V.

Netherlands Netherlands

Eaton B.V. Eaton C.V. Eaton Electric B.V. Eaton Holding B.V. Eaton Holding I B.V. Eaton Holding II B.V. Eaton Holding III B.V. Eaton Holding IV B.V. Eaton Holding International I B.V. Eaton International B.V. Hydrowa B.V. Eaton Finance N.V. Eaton Power Quality Company Vickers Systems Limited Eaton Automotive Components Spolka z o.o. Eaton Automotive Spolka z o.o. Eaton Automotive Systems Spolka z o.o. Eaton Truck Components Spolka z o.o. Eaton Madeira SGPS Ltd. Aeroquip Singapore Pte. Limited Eaton Filtration Pte. Ltd. Vickers Systems Asia Pacific Pte. Ltd. Aeroquip (South Africa) Pty. Ltd. Eaton Truck Components (Pty.) Limited Eaton Automotive Controls Limited Eaton Limited Aeroquip Iberica S.L. Eaton S.L. Productos Eaton Livia S.L. Eaton Holec, AB Eaton Power Quality AB Eaton Industries Manufacturing G.m.b.H. Modern Molded Products Limited Rubberon Technology Corporation Limited Eaton Aerospace Limited Eaton Electric, Ltd Eaton Filtration Limited Eaton Holdings, Ltd Eaton Industries Limited Eaton, Ltd Eaton LP Eaton Power Quality Ltd. Eaton Power Solutions Ltd. Ultronics, Ltd. Eaton Electrical, S.A.

Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Antilles New Zealand New Zealand Poland Poland Poland Poland Portugal Singapore Singapore Singapore South Africa South Africa South Korea South Korea Spain Spain Spain Sweden Sweden Switzerland Taiwan Thailand United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom Venezuela

(A) Other Eaton subsidiaries, many inactive, are not listed above. If considered in the aggregate, they would not be material.

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the following Registration Statements and related Prospectuses of our reports dated February 23, 2007 with respect to the consolidated financial statements of Eaton Corporation, Eaton Corporation management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting of Eaton Corporation, included in this Annual Report (Form 10-K) for the year ended December 31, 2006.
Registration Number -----------333-136292

Description ----------Eaton Corporation Incentive Compensation

Filing Date ----------August 4, 2006

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the following Registration Statements and related Prospectuses of our reports dated February 23, 2007 with respect to the consolidated financial statements of Eaton Corporation, Eaton Corporation management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting of Eaton Corporation, included in this Annual Report (Form 10-K) for the year ended December 31, 2006.
Registration Number -----------333-136292

Description ----------Eaton Corporation Incentive Compensation Deferral Plan - Form S-8 Registration Statement - 70,000 Shares Eaton Corporation - Shareholder Dividend Reinvestment and Direct Share Purchase Plan -1,000,000 Shares -Prospectus Eaton Corporation - Form S-3 Automatic Shelf Registration Statement Eaton Corporation Shareholder Dividend Reinvestment Plan - Form S-3 Registration Statement - 75,000 Shares Eaton Savings Plan - Form S-8 Registration Statement - 9,000,000 Shares Eaton Corporation Incentive Compensation Deferral Plan II - Form S-8 Registration Statement - 400,000 Shares Eaton Corporation Deferred Incentive Compensation Plan II - Form S-8 Registration Statement - 750,000 Shares 2005 Non-Employee Director Fee Deferral Plan - Form S-8 Registration Statement - 30,000 Shares Eaton Corporation Deferred Incentive Compensation Plan - Form S-8 Registration Statement - 750,000 Shares Eaton Corporation 2004 Stock Plan - Form S-8 Registration Statement - 7,000,000 Shares Eaton Corporation - Form S-3 Registration Statement - $250,000,000 of Debt Securities, Debt Warrants, Preferred Shares and Common Shares Eaton Corporation - Form S-3 Registration Statement - $47,850,000 of Common Shares

Filing Date ----------August 4, 2006

333-136291

August 4, 2006

333-130318

December 14, 2005

333-129602

November 9, 2005

333-125836

June 15, 2005

333-124129

April 18, 2005

333-124128

April 18, 2005

333-124127

April 18, 2005

333-116974

June 29, 2004

333-116970

June 29, 2004

333-106764

July 2, 2003

333-105786

June 3, 2003

333-104366

1996 Non-Employee Director Fee Deferral Plan - Form S-8 Registration Statement Eaton Savings Plan - Form S-8 Registration Statement - 5,000,000 Shares Eaton Corporation Incentive Compensation Deferral Plan - Form S-8 Registration

April 8, 2003

333-104367

April 8, 2003

333-97365

July 30, 2002

Statement 333-97373 Cutler-Hammer de Puerto Rico Inc. Retirement Savings Plan - Form S-8 Registration Statement Eaton Corporation 2002 Stock Plan - Form S-8 Registration Statement Eaton Corporation 401(k) Savings Plan - Form S-8 Registration Statement - 500,000 Shares Deferred Incentive Compensation Plan - Form S-8 Registration Statement - 375,000 Shares Eaton Corporation Executive Strategic Incentive Plan - Form S-8 Registration Statement July 30, 2002

333-97371

July 30, 2002

333-43876

August 16, 2000

333-35946

May 1, 2000

333-86389

September 2, 1999

333-77245

Eaton Corporation 401(k) Savings Plan - Form S-8 Registration Statement Eaton Corporation Share Purchase and Investment Plan - Form S-8 Registration Statement Eaton Corporation $1,400,000,000 of Debt Securities, Debt Warrants, Common Shares and Preferred Shares - Form S-3 Registration Statement (Including Post-Effective Amendment No. 1 filed on April 23, 1999 and Amendment No. 2 filed on May 11, 1999) Eaton Corporation 1998 Stock Plan - Form S-8 Registration Statement Eaton Holding Limited U.K. Savings - Related Share Option Scheme [1998] - Form S-8 Registration Statement Cutler-Hammer de Puerto Rico Company Retirement Savings Plan - Form S-8 Registration Statement Eaton 401(k) Savings Plan and Trust - Form S-8 Registration Statement Eaton Non-Employee Director Fee Deferral Plan - Form S-8 Registration Statement Eaton Incentive Compensation Deferral Plan Form S-8 Registration Statement Eaton Corporation Share Purchase and Investment Plan - Form S-8 Registration Statement Eaton Corporation Incentive Compensation Deferral Plan - Form S-3 Registration Statement Eaton Corporation $120,837,500 of Debt Securities and Debt Warrants - Form S-3 Registration Statement Eaton 1995 Stock Plan - Form S-8 Registration Statement Eaton Corporation $600,000,000 of Debt Securities, Debt Warrants, Common Shares and Preferred Shares - Form S-3 Registration Statement

April 28, 1999

333-77243

April 28, 1999

333-74355

March 12, 1999

333-62375

August 27, 1998

333-62373

August 27, 1998

333-35697

September 16, 1997

333-28869

June 10, 1997

333-23539

March 18, 1997

333-22597

March 13, 1997

333-03599

May 13, 1996

333-01365

March 1, 1996

33-64201

November 14, 1995

33-60907

July 7, 1995

33-52333

February 18, 1994

333-77245

Eaton Corporation 401(k) Savings Plan - Form S-8 Registration Statement Eaton Corporation Share Purchase and Investment Plan - Form S-8 Registration Statement Eaton Corporation $1,400,000,000 of Debt Securities, Debt Warrants, Common Shares and Preferred Shares - Form S-3 Registration Statement (Including Post-Effective Amendment No. 1 filed on April 23, 1999 and Amendment No. 2 filed on May 11, 1999) Eaton Corporation 1998 Stock Plan - Form S-8 Registration Statement Eaton Holding Limited U.K. Savings - Related Share Option Scheme [1998] - Form S-8 Registration Statement Cutler-Hammer de Puerto Rico Company Retirement Savings Plan - Form S-8 Registration Statement Eaton 401(k) Savings Plan and Trust - Form S-8 Registration Statement Eaton Non-Employee Director Fee Deferral Plan - Form S-8 Registration Statement Eaton Incentive Compensation Deferral Plan Form S-8 Registration Statement Eaton Corporation Share Purchase and Investment Plan - Form S-8 Registration Statement Eaton Corporation Incentive Compensation Deferral Plan - Form S-3 Registration Statement Eaton Corporation $120,837,500 of Debt Securities and Debt Warrants - Form S-3 Registration Statement Eaton 1995 Stock Plan - Form S-8 Registration Statement Eaton Corporation $600,000,000 of Debt Securities, Debt Warrants, Common Shares and Preferred Shares - Form S-3 Registration Statement Eaton Corporation Stock Option Plans - Form S-8 Registration Statement

April 28, 1999

333-77243

April 28, 1999

333-74355

March 12, 1999

333-62375

August 27, 1998

333-62373

August 27, 1998

333-35697

September 16, 1997

333-28869

June 10, 1997

333-23539

March 18, 1997

333-22597

March 13, 1997

333-03599

May 13, 1996

333-01365

March 1, 1996

33-64201

November 14, 1995

33-60907

July 7, 1995

33-52333

February 18, 1994

33-49393& 33-12842

March 9, 1993

/s/ Ernst & Young LLP ------------------------------------Cleveland, Ohio February 23, 2007

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 24

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That each person whose name is signed below has made, constituted and appointed, and by this instrument does make, constitute and appoint, Richard H. Fearon, Billie K. Rawot or William J. Nowak his or her true and lawful attorney, for him or her and in his or her name, place and stead to subscribe, as attorney-in-fact, his or her signature as Director or Officer or both, as the case may be, of Eaton Corporation, an Ohio corporation, to its Annual Report on Form 10-K for the year ended December 31, 2006 pursuant to the Securities Exchange Act of 1934, and to any and all amendments to that Annual Report, hereby giving and granting unto each such attorney-in-fact full power and authority to do and perform every act and thing whatsoever necessary to be done in the premises, as fully as he or she might or could do if personally present, hereby ratifying and confirming all that each such attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This Power of Attorney shall not apply to any Annual Report on Form 10-K or amendment thereto filed after December 31, 2007. IN WITNESS WHEREOF, this Power of Attorney has been signed at Cleveland, Ohio this 24th day of January, 2007.
/s/ Alexander M. Cutler ------------------------------------Alexander M. Cutler, Chairman and Chief Executive Officer; President; Principal Executive Officer; Director /s/ Richard H. Fearon ---------------------------------------Richard H. Fearon, Executive Vice President--Chief Financial and Planning Officer; Principal Financial Officer

/s/ Billie K. Rawot ------------------------------------Billie K. Rawot, Vice President and Controller; Principal Accounting Officer

* ------------------------------------Christopher M. Connor Director

* ---------------------------------------Michael J. Critelli Director

* ------------------------------------Charles E. Golden Director

* ---------------------------------------Ernie Green Director

* ------------------------------------Ned C. Lautenbach Director

* ---------------------------------------Deborah L. McCoy Director

* ------------------------------------John R. Miller Director

* ---------------------------------------Gregory R. Page Director

*

*

------------------------------------Victor A. Pelson Director

---------------------------------------Gary L. Tooker Director

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 31.1 CERTIFICATION I, Alexander M. Cutler, certify that: 1. I have reviewed this annual report on Form 10-K of Eaton Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 28, 2007 /s/ Alexander M. Cutler

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 31.1 CERTIFICATION I, Alexander M. Cutler, certify that: 1. I have reviewed this annual report on Form 10-K of Eaton Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 28, 2007 /s/ Alexander M. Cutler ---------------------------------------Alexander M. Cutler Chairman and Chief Executive Officer; President

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 31.2 CERTIFICATION I, Richard H. Fearon, certify that: 1. I have reviewed this annual report on Form 10-K of Eaton Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 28, 2007 /s/ Richard H. Fearon ---------------------------------------Richard H. Fearon Executive Vice President Chief Financial and Planning Officer

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 31.2 CERTIFICATION I, Richard H. Fearon, certify that: 1. I have reviewed this annual report on Form 10-K of Eaton Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 28, 2007 /s/ Richard H. Fearon ---------------------------------------Richard H. Fearon Executive Vice President Chief Financial and Planning Officer

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 32.1 CERTIFICATION This written statement is submitted in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. It accompanies Eaton Corporation's Annual Report on Form 10-K for the year ended December 31, 2006 ("10-K Report"). I hereby certify that, based on my knowledge, the 10-K Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C 78m), and information contained in the 10-K Report fairly presents, in all material respects, the financial condition and results of operations of Eaton Corporation and its consolidated subsidiaries.
Date: February 28, 2007 /s/ Alexander M. Cutler ---------------------------------------Alexander M. Cutler Chairman and Chief Executive Officer; President

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 32.2 CERTIFICATION This written statement is submitted in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. It accompanies Eaton Corporation's Annual Report on Form 10-K for the year ended December 31, 2006 ("10-K Report"). I hereby certify that, based on my knowledge, the 10-K Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C 78m), and information contained in the 10-K Report fairly presents, in all material respects, the financial condition and results of operations of Eaton Corporation and its consolidated subsidiaries.
Date: February 28, 2007 /s/ Richard H. Fearon ---------------------------------------Richard H. Fearon Executive Vice President Chief Financial and Planning Officer

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 32.1 CERTIFICATION This written statement is submitted in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. It accompanies Eaton Corporation's Annual Report on Form 10-K for the year ended December 31, 2006 ("10-K Report"). I hereby certify that, based on my knowledge, the 10-K Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C 78m), and information contained in the 10-K Report fairly presents, in all material respects, the financial condition and results of operations of Eaton Corporation and its consolidated subsidiaries.
Date: February 28, 2007 /s/ Alexander M. Cutler ---------------------------------------Alexander M. Cutler Chairman and Chief Executive Officer; President

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 32.2 CERTIFICATION This written statement is submitted in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. It accompanies Eaton Corporation's Annual Report on Form 10-K for the year ended December 31, 2006 ("10-K Report"). I hereby certify that, based on my knowledge, the 10-K Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C 78m), and information contained in the 10-K Report fairly presents, in all material respects, the financial condition and results of operations of Eaton Corporation and its consolidated subsidiaries.
Date: February 28, 2007 /s/ Richard H. Fearon ---------------------------------------Richard H. Fearon Executive Vice President Chief Financial and Planning Officer

EATON CORPORATION 2006 ANNUAL REPORT ON FORM 10-K ITEM 15(B) EXHIBIT 32.2 CERTIFICATION This written statement is submitted in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. It accompanies Eaton Corporation's Annual Report on Form 10-K for the year ended December 31, 2006 ("10-K Report"). I hereby certify that, based on my knowledge, the 10-K Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C 78m), and information contained in the 10-K Report fairly presents, in all material respects, the financial condition and results of operations of Eaton Corporation and its consolidated subsidiaries.
Date: February 28, 2007 /s/ Richard H. Fearon ---------------------------------------Richard H. Fearon Executive Vice President Chief Financial and Planning Officer