EATON CORP
EX-10(M)
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<TYPE>EX-10.M
<SEQUENCE>12
<FILENAME>l30233aexv10wm.txt
<DESCRIPTION>EX-10(M)
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(EATON LOGO)

                                                                  EXHIBIT 10 (M)

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

                                     [date]

                                EATON CORPORATION
                                  EATON CENTER
                              1111 SUPERIOR AVENUE
                              CLEVELAND, OHIO 44114

     AWARD OF RESTRICTED SHARES UNDER THE EATON CORPORATION 2004 STOCK PLAN

The Compensation and Organization Committee (the "Committee") of the Board of
Directors of Eaton Corporation (the "Company") has awarded you a number of
restricted Common Shares of the Company effective as of [date] (the "Effective
Date") under the terms and conditions of the Company's 2004 Stock Plan (the
"Plan"). Information concerning the number of restricted shares awarded to you
(the "Award") is available online through the Eaton Service Center at Fidelity
which may be accessed through the Company's website. You are required to accept
the Award online at the Eaton Service Center at Fidelity. By so accepting the
Award you acknowledge and agree as follows:

          1. ACCEPTANCE. You accept the Award on the terms and conditions
provided in the Plan and this Award Agreement.

          2. RESTRICTED SHARES. You acknowledge that, as of the Effective Date,
the Award has been granted to you, contingent on the continuation of your
service with the Company as provided herein. The restricted shares which are the
subject of the Award (the "Restricted Shares") shall be forfeited and shall be
immediately re-transferred to the Company if my employment with the Company is
terminated under any circumstances whatsoever, including without limitation
dismissal, resignation, divestiture of operations, death, disability or
retirement. This possibility of forfeiture shall lapse as follows:

     -    two years after the Effective Date with respect to 100% of the
          Restricted Shares

If any Restricted Shares are forfeited for any reason, you will surrender to the
Company any certificates which I then hold evidencing such shares. You
understand that you will not be entitled to any payment in respect of shares so
forfeited.

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.

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          3. TRANSFERABILITY. Until the possibility of forfeiture lapses with
respect to any of the Restricted Shares, those shares shall be non-transferable.
You agree not to make, or attempt to make, any sale, assignment, transfer or
pledge of any of the Restricted Shares prior to the date on which the
possibility of forfeiture with respect to such shares lapses.

          4. LEGENDS, POSSESSION AND REORGANIZATION. You acknowledge that the
certificates for the Restricted Shares will bear a legend referring to this
Agreement and to the restrictions contained herein. You further acknowledge that
the Company may elect to retain those certificates in its possession as a means
of enforcing these restrictions. 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
the Company's Common Shares, the number and class of the Restricted Shares shall
be equitably adjusted by the Committee so as to reflect that change. Any new
certificates for Restricted Shares shall bear the legends referred to in this
Section 4. No adjustment provided for in this Section 4 shall require the
Company to sell or transfer a fractional share.

          5. DIVIDENDS AND VOTING. If you are the shareholder of record on any
record date for the payment of a dividend on the Restricted Shares, you will be
entitled to receive the dividend when paid, regardless of whether or not the
restrictions imposed by Section 2 have lapsed. If you are the shareholder of
record on any record date for the taking of a vote by the shareholders of the
Company, you will be entitled to vote the Restricted Shares regardless of
whether or not the restrictions imposed by Section 2 hereof have lapsed.

          6. WITHHOLDINGS. You hereby authorize the Company to withhold from any
amounts otherwise payable to you, or any of my successors in interest, such
federal, state and local taxes as may be required by law in connection with the
award to you of Restricted Shares or the lapse of the possibility of forfeiture
thereof. You agree that if such amounts are insufficient, you will pay or make
arrangements satisfactory to the Company for payment of such taxes. You
understand that the Company may defer the issuance to you of a certificate
evidencing shares of Restricted Shares, or the issuance of a new certificate
evidencing the lapse of the restrictions thereon, until such payment or
provision has been made. You hereby authorize the conversion to cash by the
Company of a sufficient number of the shares of Restricted Shares to satisfy any
such withholding tax obligations.

          7. CONTINUED EMPLOYMENT. You acknowledge that this award of Restricted
Shares does not in any way entitle you to continued employment with the Company
for the period during which the possibility of forfeiture continues or for any
other period, and does not limit or restrict any right the Company otherwise may
have to terminate your employment.

          8. COMPETITION BY EMPLOYEE. You expressly acknowledge and agree that
in the event that you voluntarily leave the employment of the Company or a
subsidiary and within one year after the vesting of the Restricted Shares enter
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 of the total fair market value such vested
Restricted Shares as of the vesting date shall inure to the benefit of the
Company and you agree to promptly pay the same to the Company, unless the
Committee in its sole discretion shall determine that such action by you is not
inimical to the best interest of the Company or its subsidiaries.

          9. CHANGE OF CONTROL. Notwithstanding anything in this Agreement to
the contrary, effective upon a Change of Control of the Company (as defined
below), the Restricted Shares


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shall vest and the forfeiture restrictions referred to in Paragraph 2 hereof
shall lapse. For the purpose of this Agreement, a "Change of Control" shall
mean:

          A.   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, 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

          B.   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

          C.   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 55% 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, 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


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               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

          D.   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 you, or
any entity in which you are a partner, officer or more than 50% owner, initiate,
if immediately following the transaction or series of transactions that would
otherwise constitute a Change of Control, you, either alone or together with
other individuals who are executive officers of the Company immediately prior
thereto, beneficially own, 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.

          10. MISCELLANEOUS. Unless otherwise expressly provided herein, terms
defined in the Plan shall have the same meanings when used in this Agreement.
The use of the masculine gender shall be deemed to include the feminine gender.
In the event of a conflict between this Agreement and the Plan, this Agreement
shall control. This Agreement represents the entire understanding between the
parties on the subject hereof and shall be governed in accordance with Ohio law.


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