8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 28, 2009

EATON CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	1-1396	34-0196300
(State or other	(Commission	(I.R.S. Employer
jurisdiction of	File Number)	Identification No.)
incorporation)

Eaton Center
Cleveland, Ohio	44114
(Address of principal executive offices)	(Zip Code)

(216) 523-5000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Elections of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officer's.

     On January 28, 2009, the Board of Directors of Eaton Corporation (the “Company”) expanded the size of the Board to twelve members and elected Arthur E. Johnson to the Board to fill the vacancy thus created. Mr. Johnson, age 62, is Senior Vice President, Corporate Strategic Development with Lockheed Martin Corporation, a position he has held since December 2001. Mr. Johnson was appointed by the Company’s Board of Directors to the Governance and Audit Committees.

     Mr. Johnson currently serves on the boards of AGL Resources, Inc. and Fidelity Investments.

     Pursuant to the terms of the Company’s 2008 Stock Plan, on January 28, 2009 Mr. Johnson received an automatic grant of 1,527 restricted common shares of the Company. On the same date, each other member of the Board was also automatically granted 1,527 restricted common shares of the Company, also pursuant to the terms of the 2008 Stock Plan. All of these restricted shares vest upon leaving Board service after two (2) years of continuous service, immediately upon death or disability, upon retirement from Board service due to reaching the mandatory retirement age or upon a change of control of the Company. Mr. Johnson also will receive compensation pursuant to the Company’s standard arrangements for directors as described in its proxy statement for the 2008 Annual Meeting of Shareholders, and will be eligible to participate in the Company’s 2005 Non-Employee Director Fee Deferral Plan.

     The Company and Mr. Johnson have entered into an indemnification agreement in the same form as the Company has used with each other director and officer of the Company. The form indemnification agreement provides that, to the fullest extent permitted by law, the Company will indemnify each director or officer against expenses (including attorneys’ fees, judgments, fines and amounts paid in settlement) actually and reasonably incurred by the director or officer in connection with any claim against the director or officer as a result of the director’s service as a member of the Board of Directors or the officer’s service as an officer of the Company. The summaries of the material terms of the form indemnification agreement and the stock option agreement set forth above are qualified in their entirety by reference to the full text of such agreements. (See Exhibits 10.1 and 10.2, respectively, to this Report, which are incorporated herein by reference.) A copy of the press release issued by the Company on January 28, 2009 is included as Exhibit 99.1 to this Report and is incorporated herein by reference.

     There are no related party transactions involving Mr. Johnson that would require disclosure pursuant to S-K Item 404(a). There are no arrangements or understandings between Mr. Johnson and any other persons pursuant to which Mr. Johnson was selected as a director of the Company.

Item 9.01. Financial Statements and Exhibits.

Number	Exhibit
10.1	Form of Indemnification Agreement between the Company and each of the non-employee directors of the Company filed as Exhibit 10.1 to the Company’s Form 8-K Report filed on January 26, 2007, and incorporated herein by reference.
10.2	Form of Restricted Share Agreement pursuant to the 2008 Stock Plan.
99.1	Press Release dated January 28, 2009.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EATON CORPORATION
Date: January 28, 2009	/s/ R. H. Fearon
	R. H. Fearon
	Executive Vice President - Chief Financial and Planning Officer

EX-10.2

Exhibit 10.2

January 28, 2009

Eaton Corporation
Eaton Center
1111 Superior Avenue
Cleveland, Ohio 44114

Award of Restricted Shares Under the Eaton Corporation 2008 Stock Plan

Eaton Corporation (the “Company”) has awarded you a number of restricted Common Shares of the Company effective as of February 24, 2009 (the “Effective Date”) under the terms and conditions of the Company’s 2008 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, this Award has been granted to you, contingent on the occurrence of any one of the following vesting events:

a.	you leave service on the Company’s Board of Directors (the “Board”) following two (2) years of continuous service as a member of the Board; or
b.	your service on the Board ends due to your death or disability at any time following the Effective Date; or
c.	you retire from the Board after attaining the mandatory Board retirement date at any time following the Effective Date; or
d.	upon a Change of Control of the Company at any time following the Effective Date.

Upon the occurrence of any one of the above events, all of the restricted shares which are the subject of the Award (the “Restricted Shares”) shall immediately vest and become non-forfeitable.

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

     3. Transferability. Until the possibility of forfeiture lapses with respect to any of the Restricted Shares and the Restricted Shares vest, 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 and the shares vest. Notwithstanding the foregoing provisions of this Paragraph 3, you are permitted to designate one or more primary and contingent beneficiaries to whom the restricted Shares will be transferred in the event of your death. The process for designating such beneficiaries is available through the Eaton Service Center at Fidelity.

     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 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. Change of Control. 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

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	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 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

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series of transactions that would otherwise constitute a Change of Control, you, either alone or together with other individuals who are directors or 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.

     7. 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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EX-99.1

Exhibit 99.1

Eaton Corporation
Corporate Communications
Eaton Center
Cleveland, OH 44114
tel: (216) 523-5304
kellymjasko@eaton.com News Release

Date January 28, 2008

For Release Immediately

Contact Kelly Jasko, (216) 523-5304

Arthur E. Johnson Elected To Eaton Board Of Directors

CLEVELAND ...Diversified industrial manufacturer Eaton Corporation (NYSE:ETN) today announced that Arthur E. Johnson was elected to its board of directors. Johnson’s election brings the number of Eaton directors to 12.

“We are delighted to welcome Art to our board,” said Alexander M. Cutler, Eaton chairman and chief executive officer. “He will bring a valuable perspective to our business through his extensive background and experience in the aerospace and defense industries. This will serve Eaton well as we execute strategies to grow in these markets.”

Johnson, 62, is currently the senior vice president, Corporate Strategic Development, at Lockheed Martin Corporation (NYSE:LMT), a global security company that is principally engaged in the research, design, and manufacture of advanced technology systems. Prior to joining Lockheed Martin Corporation in 1996, Johnson was group vice president for Loral Corporation’s Federal Systems Group and served in roles of increasing responsibility at IBM Corporation.

In addition to his leadership at Lockheed Martin, Johnson serves on the boards of AGL Resources, Inc. and is a member of the Independent Board of Trustees of Fidelity Investments. He has a Bachelor of Arts degree in English from Morehouse College in Atlanta, Ga., and is a resident of Reston, Va.

Eaton Corporation is a diversified power management company with 2008 sales of $15.4 billion. Eaton is a global technology leader in electrical components and systems for power

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Eaton/Page 2

quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use; and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety. Eaton has approximately 75,000 employees and sells products to customers in more than 150 countries. For more information, visit www.eaton.com.

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