2004 Committee Charter : ETNThe Finance Committee shall be comprised of at least three Directors, all of
whom qualify as "independent" under the standards adopted by the New York Stock
Exchange and the Board of Directors. The Committee members shall be appointed by
the Board upon the recommendation of the Governance Committee or a majority of
the independent members of the Board. Committee members may be removed by the
Board at any time upon the recommendation of the Governance Committee or a
majority of the independent members of the Board.
The Finance Committee shall have the following responsibilities:
1. Periodically review the financial condition of the Company, including its
total financial resources, strengths and capabilities, and
recommend financial policies to the Board of Directors;
2. Analyze Company policy with respect to its debt-equity relationship and make
recommendations to the Board with respect thereto;
3. Review the Company's dividend policy and make recommendations to the Board
with respect thereto;
4. Review the Company's cash flow, including its total capital expenditure
program, working capital changes and other current and anticipated financial
5. Review proposals for share issuances and repurchases;
6. Review proposals for long- and short-term debt financing;
7. Review the Company's risk management program and its adequacy to safeguard
the Company against extraordinary liabilities and losses;
8. Periodically meet with, and review the performance of, the Pension
Investment Committee, the Pension Administration Committee and any other
fiduciaries that the Board may appoint with respect to the Company's pension
and other retirement income plans (including employee share purchase or
9. Annually review the key assumptions used to calculate annual pension
expense, including the assumed long-term return on pension plan assets and
the discount rate used to determine the present value of pension plan
10. Periodically report to the Board concerning the Committee's actions,
conclusions and recommendations;
11. Assure that performance evaluations of the Finance Committee are conducted
The Finance Committee shall have the authority to retain and terminate
consultants and other advisors to advise the Committee in the performance of its
responsibilities. The Committee shall exercise sole authority to approve the
fees and other retention terms for such consultants and other advisors, who will
report directly to the Committee.
CODE OF ETHICS
To my fellow Eaton employees
Ethical values are fundamental to Eaton. They define our heritage and our
future, and distinguish us from other organizations that go about their work
without regard for what is right and what is wrong.
Why do people at Eaton work so hard and so successfully? I think that one reason
is their belief in our company's values, a foundation that is a source of great
Every one of us can--and should--be a role model for honesty and integrity. We
must communicate the message of Eaton's ethics to our colleagues, associates,
customers and suppliers--in what we say and, even more importantly, in what we
We're here to achieve great results, but each of us must demonstrate that we
care intensely about how we get those results. They are worth little and are
unlikely to endure if achieved unethically.
We should all be proud that we start from a track record of success. And I want
you to know that I will do everything possible to see that this Eaton tradition
of integrity continues. However, ethics is everyone's responsibility, and I want
everyone at Eaton to feel comfortable talking about these subjects--expressing
concerns, raising issues and encouraging the highest levels of integrity.
This guide gives you lots of information and sources for help. Please use it to
the fullest. If you've done everything we've asked you to do and are not getting
the help you need, contact me.
/s/ Alexander Cutler
Alexander M. Cutler
Chairman and Chief Executive Officer
Eaton Corporation requires that all directors, officers and employees of Eaton,
its subsidiaries and affiliates ("Eaton"), abide by the fundamental principles
of ethical behavior listed here in performing their duties.
OBEYING THE LAW--We respect and obey the laws, rules and regulations applying to
our businesses around the world.
INTEGRITY OF RECORDING AND REPORTING OUR FINANCIAL RESULTS--We properly maintain
accurate and complete financial and other business records, and communicate
full, fair, accurate, timely and understandable financial results. In addition,
we recognize that various officers and employees of Eaton must meet these
requirements for the content of reports to the U.S. Securities and Exchange
Commission, or similar agencies in other countries, and for the content of other
public communications made by Eaton.
RESPECTING HUMAN RIGHTS--We respect human rights and require our suppliers to do
DELIVERING QUALITY--We are committed to producing quality products and services.
Our business records and communications involving our products and services are
truthful and accurate.
COMPETING ETHICALLY--We gain competitive advantage through superior performance.
We do not engage in unethical or illegal trade practices.
RESPECTING DIVERSITY AND FAIR EMPLOYMENT PRACTICES--Throughout the world we are
committed to respecting a culturally diverse workforce through practices that
provide equal access and fair treatment to all employees on the basis of merit.
We do not tolerate harassment or discrimination in the workplace.
AVOIDING CONFLICTS OF INTEREST--We avoid relationships or conduct that might
compromise judgment or create actual or apparent conflicts between our personal
interests and our loyalty to Eaton. We do not use our position with Eaton to
obtain improper benefits for others or ourselves. We do not compete with Eaton.
PROTECTING OUR ASSETS--We use Eaton property, information and opportunities for
Eaton's business purposes and not for unauthorized use. We properly maintain the
confidentiality of information entrusted to us by Eaton or others.
OFFERING/ACCEPTING GIFTS, ENTERTAINMENT, BRIBES OR KICKBACKS--We do not offer or
accept gifts or entertainment of substantial value. We do not offer or accept
bribes or kickbacks.
SELLING TO GOVERNMENTS--We comply with the special laws, rules and regulations
that relate to government contracts and relationships with government personnel.
POLITICAL CONTRIBUTIONS--We do not make contributions on behalf of Eaton to
political candidates or parties even where lawful.
REPORTING ETHICAL, LEGAL OR FINANCIAL INTEGRITY CONCERNS--Any person may openly
or anonymously report any ethical concern or any potential or actual legal or
financial violation, including any fraud, accounting, auditing, tax or
record-keeping matter, to the Director--Global Ethics of Eaton. For reports that
are not made anonymously, confidentiality will be maintained to the extent
possible while permitting an appropriate investigation.
Reports may be made openly or anonymously by regular mail to Director-Global
Ethics, Eaton Corporation, Eaton Center, Cleveland, Ohio 44114. Reports may also
be made to the office of the Director--Global Ethics by e-mail or telephone
through Eaton's Ethics and Financial Integrity Help Line:
E-MAIL Access the Ethics and Financial Integrity Help Line through the
Employee Services tab on Eaton's intranet. The message will be
anonymous unless the sender identifies himself or herself.
Alternatively, send a regular Outlook e-mail, which will not be
anonymous, to Ethics@eaton.com.
TELEPHONE From the U.S. and Canada, dial toll free 1-800-433-2774. This call
will be anonymous unless the caller identifies himself or herself.
From all other countries, dial your country's AT&T access code
(found on e-net), and then dial toll free 1-800-433-2774. This
call will be anonymous unless the caller identifies himself or
NON-ENGLISH If you are not comfortable making your report in English through
the Ethics and Financial Integrity Help Line, please use your
native language to e-mail or write your concern to the address
above, and we will translate your letter or e-mail.
Eaton will not permit any retaliation against any employee who reports an
ethical, legal or financial concern nor will it discipline any employee for
making a report in good faith.
Every officer, director and employee has the personal responsibility to read,
know and comply with the principles contained in this Code of Ethics. Compliance
with these principles is a condition of employment, and failure to comply will
result in discipline up to and including termination.
The Board of Directors shall determine, or designate appropriate management
personnel to determine, the actions to be taken in the event of violations of
the Code of Ethics. Such actions shall be reasonably designed to deter
wrongdoing and to promote accountability for adherence to the Code of Ethics.
Every officer, director and employee has the duty to bring to the attention of a
supervisor or another member of management, or the Director--Global Ethics, or
the Chairs of the Audit or Governance Committees of the Board of Directors, or
directly to the full Board of Directors, any activity that in his or her
judgment would violate these principles. Potential violations may be reported to
the Board or relevant Committee Chair by mail in care of the Director-Global
Ethics, at the above address. The Director will forward it unopened to the