PROSPECTUS

Shareholder Dividend Reinvestment Plan

75,000 Common Shares With a Par Value of $.50 Each

      Eaton Corporation is pleased to offer shareholders the opportunity to participate in the Shareholder Dividend Reinvestment Plan, a convenient and low-cost method for existing investors to increase their ownership in Eaton common shares. Any shareholder of record of Eaton common shares, as well as brokers and nominees on behalf of beneficial owners in Eaton common shares, is eligible to participate in the Plan.

      Participation in the Plan allows shareholders to:

      Eaton common shares are listed on the New York Stock Exchange under the trading symbol “ETN.” The closing price of Eaton common shares on November 4, 2005 was $59.40 per share.

      Eaton common shares that are acquired under the Plan may be purchased directly from Eaton or from shares that are purchased in the open market. If common shares are purchased from Eaton, the purchase price will be the average of the high and low sale prices of Eaton common shares as reported on the New York Stock Exchange consolidated tape on the relevant Investment Date (as that term is defined in this Prospectus). If Eaton common shares are purchased in the open market, the purchase price of those shares will be the average cost of all common shares purchased for the Plan on the relevant Investment Date. The price of common shares determined in accordance with either of these two methods is referred to as the “Market Price.”

      This Prospectus describes the Plan and sets forth the terms and conditions of participation in the Plan. Please read this Prospectus carefully and keep it for future reference. If you have any questions about the Plan, you may contact EquiServe Trust Company, N.A. at 1-800-446-2617 (U.S. and Canada) or 1-781-575-2723 (outside the U.S. and Canada) each business day between 9:00 a.m. and 5:00 p.m. Eastern time. Shareholders of record may also access their accounts through the Internet at www.computershare.com/equiserve.

      The Eaton common shares being offered are not insured or protected by any governmental agency, and involve investment risk, including the possible gain or loss of principal, and increase or decrease of dividends.

      The Plan shall be governed by and construed in accordance with the laws of the State of Ohio.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is November 9, 2005.

TABLE OF CONTENTS

ABOUT EATON

      We are a global diversified industrial manufacturer, incorporated in Ohio in 1916 as a successor to a New Jersey company that was incorporated in 1911. We are a global leader in electrical systems and components for power quality, distribution and control; fluid power systems and services for industrial, mobile and aircraft equipment; intelligent truck drivetrain systems for safety and fuel economy; and automotive engine air management systems, powertrain solutions and specialty controls for performance, fuel economy and safety. We have 58,000 employees and sell products to customers in more than 125 countries. More information about us is available on the Internet at www.eaton.com.

      Our principal executive office is at Eaton Center, 1111 Superior Avenue, Cleveland, Ohio 44114-2584 and our telephone number is (216) 523-5000.

ABOUT THE PLAN

Purpose

      The purpose of the Plan is to provide existing shareholders with a simple, convenient and affordable way to increase their holdings in Eaton common shares at prevailing market prices.

Key Features

      As a Plan participant, you can take advantage of the following Plan features:

Administration

      The Plan is administered by EquiServe Trust Company, N.A. (“EquiServe”). EquiServe is a national limited purpose trust company chartered under the National Banking Act and is a transfer agent registered with the Comptroller of the Currency of the United States pursuant to Section 17A of the Securities Exchange Act of 1934. As the Plan administrator, EquiServe purchases Eaton common shares under the Plan,

keeps records, sends statements of account activity to participants and performs other related duties. Computershare Shareholder Services, Inc. acts as service agent to EquiServe for some of these services. In addition, EquiServe may, at its sole discretion, use a broker-dealer affiliated with EquiServe to execute purchase or sale transactions. In the event that EquiServe should resign, be removed or otherwise cease to act as Plan administrator, we will make such other arrangements as we deem appropriate for administration of the Plan.

      You may contact EquiServe by:

      Plan transactions can be requested and/or conducted over the Internet, by telephone or through the mail. Customer service representatives are available 9:00 a.m. — 5:00 p.m. Eastern time each business day. A telephone auto-response system is available 24 hours a day, 7 days a week. Foreign language translation service for more than 140 foreign languages is available to support your needs. When contacting EquiServe by mail, be sure to include a reference to Eaton Corporation in your correspondence.

Eligibility and Participation

          Registered Shareholders

      If you are a registered shareholder — that is, the common shares that you hold are registered in your name, rather than in the name of your broker or bank — you are eligible to directly participate in the Plan. Except as described below under the caption “Beneficial Owners or Shares Held in Street Name,” only those shares that you hold of record will be eligible to participate in automatic dividend reinvestment. You may enroll in the Plan by following the instructions provided in Question 6.

      Enrollment in the Plan may not be available if you reside in certain countries. If you are a registered shareholder residing outside the United States, you should determine whether you are subject to any governmental regulation in your country of residence that would prohibit your participation. Certain Eaton insiders, affiliates, institutional investors and financial intermediaries may also be ineligible.

      To the extent required by applicable state law in certain jurisdictions, the Plan may be made available to registered shareholders only through locally registered broker-dealers.

          Beneficial Owners or Shares Held in “Street Name”

      If you beneficially own shares — that is, the shares are not registered in your name, but are registered in the name of your broker or bank on your behalf (“Street Name”), you may participate in the Plan in one of two ways. First, you can simply arrange for the broker or bank to register in your name the number of Eaton common shares that you want to participate in the Plan. You can then enroll as a shareholder of record (see Question 6). Alternatively, if you do not wish to re-register your shares in your name, you may make arrangements with your broker or bank to participate in the Plan on your behalf.

          New Investors

      If you are not currently a shareholder, either of record or beneficially through a broker or bank, you are not eligible to participate in the Plan. Investors interested in participating in the Plan must first become shareholders by making an investment in Eaton common shares outside of the Plan. Your broker or bank can assist you in purchasing your initial Eaton common shares.

      Registered shareholders can enroll in the Plan at any time by completing and returning an Enrollment Authorization Form, which is available on the Internet at www.computershare.com/equiserve. You may also request a copy of the Enrollment Authorization Form by calling or writing EquiServe. Contact information for EquiServe is contained in Question 4. See Question 5 if you hold shares in Street Name. Participation is subject to the terms and conditions described in this Prospectus.

      Yes. As a Plan participant, you can deposit your share certificates into your Plan account at no charge. The advantages of holding shares in book-entry form in the Plan are protection against certificate loss, theft, and damage.

      After your enrollment, you can deposit Eaton common shares in the Plan by sending your share certificate(s) to EquiServe (see Question 4), properly insured, by registered or certified mail with return receipt requested or some other form of traceable delivery. You should include a written request to instruct EquiServe to deposit your share certificate(s). Do not sign the share certificate(s) or complete the assignment section. Shares that you deposit will be credited in book-entry form in your Plan account.

Dividend Reinvestment

      You have the following dividend reinvestment elections under the Plan, which you would select on the Enrollment Authorization Form:

      EquiServe will begin to reinvest your dividends automatically on the next dividend payment date after receiving your Enrollment Authorization Form, so long as your Enrollment Authorization Form is received on or before the record date for that dividend. The dividend payment date for Eaton common shares has been traditionally the fourth Friday of February, May, August and November if a business day, or the next preceding business day if the dividend payment date is not a business day.

      If your Enrollment Authorization Form arrives after the record date for the dividend payment, automatic dividend reinvestment may not begin until the next dividend payment date. After you join the Plan, you will remain a participant unless your participation is terminated (see Questions 32 and 33).

      Yes. You will be paid dividends on fractional shares that are either reinvested in Eaton common shares or paid to you in cash.

      As a Plan participant, you may change your dividend reinvestment election at any time on the Internet at www.computershare.com/equiserve, or by calling or writing EquiServe (see Question 4). EquiServe must receive your change request on or before the record date for a dividend payment date in order for the change to be effective for that dividend. If your request is received after the record date, EquiServe, in its sole discretion, may defer changing your dividend reinvestment election until the next dividend payment date.

Optional Cash Investments and Automatic Monthly Deductions

      Upon enrolling in the Plan or any time after you become a participant, you can make optional cash investments in Eaton common shares by check made payable to Computershare. Your optional cash investments must be made in U.S. dollars. EquiServe will not accept cash, money orders, traveler’s checks, or third party checks for your optional cash investments. If you send a check drawn against a bank outside the U.S., you must contact the bank to confirm that the bank can provide the funds payable in U.S. dollars that will be cleared through a U.S. bank. In that event, the amount that is invested will be the check amount less any bank clearing fees and service and per share processing fees. EquiServe will only accept checks that clear through a U.S. bank. EquiServe must receive your check at least two business days before the Investment Date (see Question 18). No interest will be paid on funds held by EquiServe pending investment. Therefore, it is advisable to send any optional cash investments that you wish to make to EquiServe for its receipt shortly before an Investment Date.

      Optional cash investments may also be made on the Internet by authorizing a one-time online bank debit from an account at a U.S. bank or financial institution. Please refer to the online confirmation for your account debit date and investment date. When investing by check or by one-time online bank debit, you do not need to invest the same amount each time and you are under no obligation to make optional cash investments in any month or at any particular time.

      A statement for each optional cash investment that you make will be sent to you with a Transaction Form for use in making your next optional cash investment. You can make your initial investment by mailing your check along with your Enrollment Authorization Form. See Question 4 for contact information for EquiServe.

      You can send in optional cash investments as often as you want. Each optional cash investment that you make needs to be $10.00 or more. The sum of all optional cash investments that you make in a calendar year cannot exceed $60,000.00. Optional cash investments below the minimum or in excess of the annual maximum will be refunded to you.

      To initiate automatic monthly deductions, you need to authorize EquiServe to deduct at least $10.00 from your U.S. bank account each month. You may authorize automatic deductions by completing, signing and returning to EquiServe an Authorization Form for Automatic Deductions, together with a voided blank check (or savings deposit slip) for the account from which funds are to be drawn. You may obtain the Authorization Form for Automatic Deductions by contacting EquiServe (see Question 4). Alternatively, you may initiate automatic monthly deductions by accessing your account online at www.computershare.com/equiserve. Your first deduction will occur approximately 4 to 6 weeks from the time EquiServe receives your Authorization Form for Automatic Deductions.

      Once automatic monthly deduction is initiated, funds will be drawn from the account you designate on the third business day preceding each monthly Investment Date (see Question 18), and will be invested in additional Eaton common shares.

      In the event any check, draft, or electronic funds transfer you submit or order as payment to EquiServe to purchase Eaton common shares is dishonored, refused, or returned, EquiServe, at its discretion and without your further consent, may sell Eaton common shares purchased and credited to your Plan account to satisfy the amount owed on the purchase. EquiServe may sell shares to cover the amount owed, and any returned check or failed electronic payment fee, as a result of your order in any manner consistent with applicable commercial and securities laws. The amount owed will include the purchase price paid, the purchase and sale service fees and the per share processing fees (see Question 29).

      You may change or terminate automatic monthly deductions by contacting EquiServe (see Question 4). EquiServe must receive your change or termination request at least six business days preceding the Investment Date (see Question 18) for which you want the change or termination to be effective.

Purchases

      As described below, EquiServe will invest optional cash investments once a month either on, or within 35 days after, the relevant Investment Date (see Question 18). Dividends will be invested in the months in which they are paid as described below.

      For optional cash investments made at any time or through automatic monthly deductions, the Investment Date is the 25th day of each month if a business day, or the next business day if the 25th day is not a business day. For dividend reinvestment, the Investment Date is the dividend payment date for Eaton common shares, which has been traditionally the fourth Friday of February, May, August and November if a business day, or the next preceding business day if the dividend payment date is not a business day.

      If EquiServe acquires Eaton common shares from Eaton, the investment will be made as of the close of business on the relevant Investment Date. If EquiServe acquires Eaton common shares in the open market, the funds will be invested on or within 35 days after the relevant Investment Date. If EquiServe is unable to process your investment(s) within 35 days after the Investment Date, EquiServe will return the funds to you by check.

      The number of Eaton common shares EquiServe will purchase for you depends on the purchase price of Eaton common shares (see Question 21), the total amount of your dividends (if applicable), and optional cash investments (in any form) that you submit, less any applicable service fees and processing fees. Your Plan account will be credited with the actual number of shares purchased, including fractions.

      EquiServe uses your investment funds (that is, dividends and/or optional cash investments, less any applicable service fees and processing fees), to purchase Eaton common shares either from Eaton or in the open market, as Eaton determines. For the purpose of making purchases, EquiServe may combine your dividend and optional cash investment funds with those of some or all other Plan participants.

      The price of Eaton common shares purchased with reinvested dividends or with optional cash investments will be the Market Price as described below.

      If Eaton common shares are purchased from Eaton, the Market Price for those shares will be the average of the high and low sale prices of Eaton common shares as reported on the New York Stock Exchange consolidated tape on the relevant Investment Date (see Question 18). If on any Investment Date there is no reported trading in Eaton common shares on the New York Stock Exchange, the Market Price will be based on the weighted average of the high and low sale prices on the nearest trading dates before and after the Investment Date. No common shares will be purchased under the Plan at less than the par value for Eaton common shares ($.50).

      If Eaton common shares are purchased in the open market, the Market Price per share for your investment will be the weighted average price per share of all shares purchased in the open market by EquiServe to fill the combined purchase order for the Plan investments. In some instances, filling a purchase order may require execution of multiple trades in the market and may take more than one trading day to complete.

      YOU SHOULD BE AWARE THAT THE MARKET PRICE PER EATON COMMON SHARE MAY BE MORE OR LESS THAN THE PRICE PER EATON COMMON SHARE AT THE TIME YOU REQUEST A PURCHASE. YOU SHOULD ALSO BE AWARE THAT YOU MAY NOT BE ABLE TO RESCIND INSTRUCTIONS YOU SUBMIT TO EQUISERVE TO PURCHASE YOUR SHARES. ANY DECISION CONCERNING A REQUEST FOR RESCISSION WILL BE MADE AT THE SOLE DISCRETION OF EQUISERVE.

      Eaton common shares purchased under the Plan for your account will be recorded in book-entry form and registered in the name of one of EquiServe’s nominees as agent for your account in the Plan. Your share ownership interest will be recorded in a book-entry Plan account on our shareholder records. In the event that EquiServe should resign, be removed or otherwise cease to administer the Plan, we will make such other arrangements as we deem appropriate for administration of the Plan.

      Unless you request them, EquiServe will not issue certificates for Eaton common shares purchased under the Plan. The number of shares purchased for your Plan account, as well as the number of shares you deposit, will be shown on your Plan account statement. Keeping shares in book-entry form rather than in certificated

form protects against loss, theft and destruction of stock certificates. Many shareholders retain their shares in book-entry form.

      You may request that EquiServe issue physical certificates to you at any time on the Internet at www.computershare.com/equiserve, or by calling or writing EquiServe (see Question 4). In response to your request, a certificate for the number of whole shares credited to your Plan account that you request will be issued to you. A certificate for a fraction of a share cannot be issued.

      Shares held in book-entry form in your Plan account may not be pledged. If you wish to pledge any of your shares, you must first request that physical share certificates be issued in your name.

Withdrawal, Sale, Re-registration or Transfer of Shares

      You can withdraw all or a portion of the shares credited to your Plan account at any time on the Internet at www.computershare.com/equiserve or by calling or writing EquiServe (see Question 4). EquiServe will process your request to withdraw shares promptly following receipt, and in no event later than five trading days after the date the request is received (except where deferral is necessary under applicable Federal or state laws or regulations).

      If you wish to withdraw a portion of the shares in your Plan account, the request must be for a whole number of shares as EquiServe cannot issue certificates for fractional shares. If you wish to withdraw all shares credited to your Plan account, EquiServe will issue a certificate for all the whole shares and a cash payment, less any applicable service fees and per share processing fees, for any remaining fractional share credited to your Plan account. In that instance, the amount of the check, if any, will be based upon the sale price obtained for any shares sold by EquiServe on the day your certificate was issued or, if there is no market sale that day for Eaton common shares, the closing price on the day before. EquiServe will send your certificate and a check (if applicable) to the address of record on your Plan account.

      Your dividend reinvestment election will remain the same unless you withdraw all of the Eaton common shares in your Plan account.

      If you withdraw all of your whole and fractional Plan shares, your participation in the Plan will be terminated and any future dividends will be paid by check or direct deposit to your bank account, as you elect. At its discretion, EquiServe also may close any Plan account that contains less than one Eaton common share. Any fractional share in your Plan account will be sold subject to the fees as described in Question 29. A check for the sale proceeds less applicable fees will be mailed to your address of record. All future dividends on shares registered in your name will be paid in cash.

      You can sell all or a portion of the shares credited to your Plan account by contacting EquiServe (see Question 4). Through participating brokers, EquiServe will sell the shares for you. EquiServe will send the sale proceeds to you by check, less any applicable fees (see Question 29), to your address of record after your sale transaction has settled. EquiServe may combine your shares to be sold with those of other Plan participants selling shares at the same time. All sale requests having an anticipated market value of $100,000.00 or more are expected to be submitted in written form. In addition, all sale requests within thirty (30) days of an address change to your account are expected to be submitted in written form. EquiServe may refuse to execute a transaction request by telephone or Internet and in its place require written submission of the request.

      Alternatively, you may request EquiServe to issue share certificate(s) for any whole shares credited to your Plan account. Upon your receipt of the certificate(s), you can sell the shares through a broker of your choice or otherwise transfer the shares.

      EquiServe will process your sale order promptly following receipt, and in no event later than five trading days after the date the order is received (except where deferral is necessary under applicable Federal or state laws or regulations). The sale price for shares sold will be based on the price per share obtained in the open market as part of an aggregate order.

      You may change the name on your Plan account, transfer shares, or give as a gift shares in your Plan account at any time by completing and submitting to EquiServe a Transfer of Ownership Form. Transfers may be made in book-entry or certificated form. Contact EquiServe (see Question 4) to request transfer instructions and the Transfer of Ownership Form, or download the instructions and the Transfer of Ownership Form from the Internet at www.computershare.com/equiserve. You must provide the full new name, address and taxpayer identification (or social security) number (if known) of the new owner on the Transfer of Ownership Form.

      If you are submitting your certificates for transfer, we recommend that you send them, properly insured, by certified or registered mail, return receipt requested, or some other form of traceable delivery. All participants in the existing Plan account need to sign the instructions, and their signatures need to be authenticated with a Medallion Signature Guarantee as described in the instructions on the Transfer of Ownership Form.

      If you sell or transfer a portion, but not all, of the shares in your Plan account, your dividend reinvestment election will remain the same for the remainder of the shares in your Plan account. See also Question 24.

Costs and Fees

      All costs of administration of the Plan and the costs incurred in connection with the purchase of Eaton common shares under the Plan will be paid by Eaton, with the few exceptions described below. As a Plan participant, you will incur no brokerage commissions or pay service fees for purchases, except that: (a) if the shares you own are not registered in your name but in the name of your broker or other nominee and you arrange to participate in the Plan indirectly through such broker or other nominee, you may be required to pay a commission or service fee to such broker or nominee in connection with your participation; and (b) if you make optional cash investments through automatic monthly deductions, you will be charged a service fee of $2.50 per investment.

      If you instruct EquiServe to sell all or a part of the Eaton common shares credited to your Plan account, you will be charged a service fee of $15.00 per transaction, a processing fee of $0.12 per share sold and any transfer taxes in connection with the sale. The net proceeds from any such sale will be sent to you as soon as practicable.

      The chart below summarizes the fees associated with participation in the Plan and includes the minimum and maximum investment amounts that can be made under the Plan:

FEE SCHEDULE

Notes:

Reports to Participants

      You will receive a statement whenever there is activity affecting your Plan account. The statement will confirm each transaction, such as any purchase, sale, transfer, certificate of deposit, certificate of issuance, or dividend reinvestment. Statements will be sent promptly following each transaction. These statements are a record of your Plan account activity showing your cumulative share position and the prices for your purchases and sales of shares under the Plan. The statements will also show the amount of dividends reinvested (if applicable) and any applicable fees charged for your respective transactions during the period. You should retain these statements for tax purposes. EquiServe may charge a fee for duplicate statements.

      As a registered shareholder, you will also receive copies of Eaton Annual Reports, proxy statements, notices of annual and special meetings, proxy cards, and if applicable, dividend income and other notices for tax reporting purposes.

      If you prefer, and if the Eaton materials are available online, you may consent to receive such materials electronically over the Internet. Instead of receiving materials through the mail, you will receive an electronic notice to your e-mail address of record notifying you of the availability of Eaton materials online and instructing you how to view and act on them.

      Reports, notices and other communications sent to you under the Plan will be addressed to your last known address as reflected by EquiServe’s records. Therefore, you should notify EquiServe (see Question 4) promptly of any change in your address.

Termination

      You may terminate participation in the Plan at any time by giving instructions to EquiServe. As soon as practicable following termination, EquiServe will send you a certificate for the whole shares and a check for any fractional share in your Plan account. At your request, EquiServe will alternatively sell all or a portion of such shares and remit to you the proceeds less any applicable fees and transfer taxes (see Question 29). If EquiServe receives your termination request after the record date for a dividend payment, EquiServe, in its sole discretion, may either pay any such dividend in cash or reinvest it in shares on your behalf. If the dividend is reinvested, EquiServe may sell the shares purchased and remit the proceeds to you, less any costs of sale. Any optional cash investments sent to EquiServe prior to your termination request will also be invested unless you expressly request that the optional cash investment be returned and your request is received at least two business days prior to the Investment Date. In every case of termination, your interest in a fractional share will be paid in cash less any applicable fees and any other costs of sale (see Question 29).

      At any time, for any reason and at our discretion, we may instruct EquiServe to terminate your participation in the Plan effective immediately upon mailing a notice to you at your address of record.

      EquiServe will automatically terminate your Plan account if you withdraw all of your whole and fractional shares. EquiServe may also terminate your Plan account if your share balance is less than one Eaton common share.

      In the event of your death or adjudication of incompetency, EquiServe may terminate your Plan account and distribute the proceeds as described in Question 32. EquiServe will continue to maintain your Plan account, however, until EquiServe receives satisfactory written notice of your death or adjudication of incompetency. In addition EquiServe must receive satisfactory proof of the appointment of a legal representative who is authorized to instruct EquiServe on the termination of your account and receive the proceeds thereof.

Additional Information

      Your participation in any rights offering, dividend distribution or stock split will be based on the Eaton common shares registered in your name both in certificate and/or book-entry form, and the shares (whole and fractional) credited to your Plan account. Any stock dividend or stock split shares of Eaton common shares issued with respect to both certificate and book-entry (whole and fractional) Eaton common shares will be credited automatically to your Plan account in book-entry form.

      All Eaton common shares credited to your Plan account will be voted as you direct. If you have shares credited to your Plan account on the record date for a meeting of shareholders, the proxy materials will be sent to you for that meeting. When you submit your executed proxy, either electronically, by telephone or by mail, all of your shares will be voted as directed by you. If you elect, you may vote all of your shares in person at the shareholders’ meeting. If you do not vote your shares in person at the meeting of shareholders or you do not properly submit an executed proxy (whether by telephone, Internet or mail), your shares will not be voted.

      You will receive, if applicable, a tax form from EquiServe, such as Form 1099-DIV, in connection with preparation for your income tax return. Automatic reinvestment of dividends does not relieve you of any income tax that may be payable on your dividends. In addition, the Internal Revenue Service may require that the per share processing fees incurred in the purchase of shares, paid by Eaton on your behalf, if any, be treated as dividend income to you and that such amounts paid for per share processing fees can be included in your cost basis of shares purchased. For additional information on the tax consequences of your participation in the Plan, you should consult your own tax advisor.

      Any account with an uncertified social security number or taxpayer identification number will be subject to backup withholding tax at the current applicable rates.

      Any account that is Form W-8BEN certified for foreign status will be subject to Non-Resident Alien (NRA) withholding tax at the current applicable rates.

      Although we anticipate maintaining the Plan in its current state, we reserve the right to suspend, modify or terminate the Plan at any time upon notice to Plan participants. If we modify the Plan, we will send notice to you within thirty (30 days) in advance of such modification. If the Plan is suspended or terminated, EquiServe will promptly refund optional cash investments held pending investment. No interest will be paid on these funds. Further your book-entry shares will continue to be credited to your Plan account at EquiServe, unless you request a certificate for the whole shares and a check for any fractional share. As an alternative to issuing certificates in the event of suspension or termination, you can request that EquiServe sell all or part of your book-entry shares. EquiServe will send you a check for the proceeds of the sale, less any applicable fees (see Question 29).

      Your direct investment in shares credited to your Plan account is no different than your investment in certificated shares. You alone bear the risk of fluctuations in the market value of Eaton common shares. You bear the risk of loss in value and you enjoy the benefits of gains from market price changes with respect to all of your shares. In addition, as a Plan participant, you may lose an advantage otherwise available in being able to select more specifically the timing of your investment or the sale of your shares.

      Neither Eaton nor EquiServe provides any advice or makes any recommendations with respect to any purchase or sale transaction you initiate; neither can Eaton or EquiServe guarantee that the value of the shares purchased under the Plan will, at any particular time, be more than your original investment. You need to make independent investment and participation decisions based on your own judgment and research.

      Neither Eaton nor EquiServe can guarantee liquidity in the market, thus your investments and the marketability of your securities may be adversely affected by the current market conditions at the time liquidation of your investment is sought.

      Shares credited to your Plan account in book-entry form through the Plan are not subject to protection under the Securities Investor Protection Act, the Federal Deposit Insurance Act, or similar insurance or guarantee statute, and neither Plan shares nor cash held pending investment or disbursement with EquiServe or its affiliates are subject to any guarantee.

39. What are the responsibilities of Eaton and EquiServe under the Plan?

      Neither Eaton nor EquiServe will be liable in administering the Plan for any act done in good faith, or for any good-faith omission to act, including, without limitation, any claims of liability (i) arising out of failure to cease reinvestment of dividends for a participant’s account in the event of the participant’s death or adjudication of incompetency prior to receipt of satisfactory written notice of such death or incompetency as described in Question 33, (ii) with respect to the prices at which shares are purchased or sold for a

participant’s account or the times when such purchases or sales are made, (iii) with respect to the source from which shares are purchased for participants or (iv) with respect to any fluctuation in the market value after purchase or sale of shares. Government regulation may require the temporary curtailment or suspension of purchases or sales under the Plan. Neither Eaton nor EquiServe will have any liability in connection with any inability to purchase or sell Eaton common shares under the Plan.

WHERE YOU CAN FIND MORE INFORMATION

      We file annual, quarterly and special reports, proxy and information statements and other information with the Securities and Exchange Commission (“SEC”). Documents that we file with the SEC are available to the public over the Internet at the SEC’s web site at www.sec.gov. You may also read and copy any document filed with the SEC at the following public reference facilities maintained by the SEC:

      You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

      Documents that we file with the SEC are also available on our web site at www.eaton.com. Our common shares are listed on the New York, Chicago and Pacific stock exchanges, where you can also inspect reports, proxy and information statements and other information about us.

INCORPORATION OF INFORMATION FILED WITH THE SEC

      The SEC allows us to “incorporate by reference” into this Prospectus information that we file with the SEC. This means that we can satisfy our disclosure obligations to you by referring you to the SEC documents that contain this information. Information contained in a document that is incorporated by reference is considered part of this Prospectus. Information contained in documents that we file with the SEC after the date of this Prospectus may update or supersede information in this Prospectus and information in documents incorporated by reference.

      The following documents, which were filed with the SEC pursuant to the Securities Exchange Act of 1934, are hereby incorporated by reference:

      All reports and other documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities remaining unsold, shall be deemed to be incorporated by reference herein and to be part hereof from the date of the filing of such reports and documents.

      Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a

statement contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. All information appearing in this Prospectus is qualified in its entirety by the information and financial statements (including notes thereto) appearing in the documents incorporated herein by reference, except to the extent set forth in the immediately preceding statement.

      Each person to whom this Prospectus is delivered can obtain from us without charge upon written or telephone request copies of any of the documents incorporated by reference in this Prospectus (excluding any exhibits to such documents unless the exhibit is specifically incorporated by reference as an exhibit to this Prospectus). Requests for documents incorporated by reference in this Prospectus should be directed to Eaton Corporation, Vice President and Secretary, Eaton Center, 1111 Superior Avenue, Cleveland, Ohio 44114-2584; telephone number (216) 523-4103.

USE OF PROCEEDS

      We intend to add the proceeds of sales to the general funds of Eaton available for general corporate purposes.

LEGAL OPINION

      J. Robert Horst, Esq. has passed upon the legality of the Eaton common shares offered under this Prospectus. Mr. Horst presently serves as Vice President and General Counsel of Eaton. He is an Eaton shareholder and also holds options to purchase Eaton common shares.

EXPERTS

      Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2004, and management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2004, as set forth in their reports, which are incorporated by reference in this Prospectus and elsewhere in the registration statement. Our financial statements and our management’s assessment are incorporated by reference in reliance on Ernst & Young LLP’s reports, given on their authority as experts in accounting and auditing.

Shareholder Dividend Reinvestment Plan

75,000 Common Shares With a Par Value of $.50 Each

Prospectus

November 9, 2005

      You should rely only on the information contained in this Prospectus. We have not authorized anyone to provide you with information different from that contained in this Prospectus. We are offering to sell, and seeking offers to buy, Eaton common shares only in jurisdictions where offers and sales are permitted. The information contained in this Prospectus is accurate only as of the date of this Prospectus, regardless of the time of delivery of this Prospectus or of any sale of Eaton common shares.

      No action is being taken in any jurisdiction outside the United States to permit a public offering of Eaton common shares or possession or distribution of this Prospectus in that jurisdiction. If you come into possession of this Prospectus in jurisdictions outside the United States, you are required to inform yourself about, and to observe any restrictions as to, this offering and the distribution of this Prospectus applicable to that jurisdiction.

 

 

	EATON CORPORATION
	By:	Richard H. Fearon
		Richard H. Fearon
		Executive Vice President — Chief Financial and Planning Officer