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 11, 2024
 
EATON CORPORATION plc
 (Exact name of registrant as specified in its charter)

Ireland  
000-54863
  
98-1059235
(State or other jurisdiction of incorporation)
  
(Commission File Number)
  
(I.R.S. Employer Identification No.)

 Eaton House, 30 Pembroke Road, Dublin 4, Ireland
   D04 Y0C2
(Address of principal executive offices)
  
(Zip Code)

 
+353 1637 2900
  
 
(Registrant’s telephone number, including area code)
  

 
Not applicable
  
 
(Former name or former address, if changed since last report.)
  

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:
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
  
Trading Symbol
  
Name of each exchange on which registered
Ordinary shares ($0.01 par value)
   ETN
   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
 
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On January 11, 2024 , Eaton Corporation (the “Company”) and Thomas B. Okray, Executive Vice President and Chief Financial Officer mutually agreed that effective February 2, 2024, Mr. Okray’s employment with the Company will end.   Mr. Okray expressed full support for the Registrant's financial practices and policies, emphasizing that the mutual decision is not the result of any disagreements he has with the Registrant concerning financial reporting.  There are no modifications to Mr. Okray’s compensation arrangements in connection with his departure.  He will not receive severance and will forfeit all equity that has not vested as of his termination date.

Olivier Leonetti will succeed Mr. Okray as Executive Vice President and Chief Financial Officer on February 5, 2024.  Mr. Leonetti, 59, has served on Eaton’s Board of Directors since 2019 and, on January 17, 2024 tendered his resignation, effective February 2, 2024 , at which time the Board size will be reduced to nine.

Mr. Leonetti joins Eaton from Johnson Controls International, plc (“Johnson Controls”), a global leader in building technology and connected solutions for fire, HVAC and security equipment for buildings. Prior to joining Johnson Controls in 2020, he served as chief financial officer of Zebra Technologies Corporation, a global provider of enterprise solutions software, services and products from November 2016 through August 2020.  More information about Mr. Leonetti can be found in the Company’s Proxy Statement, filed with the Commission on March 17, 2023.

In connection with his appointment, Mr. Leonetti will receive an initial annual base salary of $890,000, and will participate in Eaton’s short-term cash incentive program (the “EIC Plan”) with a target payout of 100% of his base salary. Additionally, he will participate in the Company’s 2024-2026 long-term incentive plan (the “ESIP”) with a grant of Performance Share Units equal to $1,762,500, as well as grants of Stock Options and Restricted Share Units, each equal to $881,250 in value. The terms of the Performance Share Units, Stock Options and Restricted Share Units will be substantially the same as those in the same awards for all other Eaton officers who receive them, and are more fully set forth in those documents referenced as Exhibits 10.1, 10.2 and 10.3 respectively.

Mr. Leonetti will receive a new hire grant of stock options and Restricted Share Units equal to the sum of $900,000 and the value of in-the-money stock options, RSUs, and PSUs granted to Mr. Leonetti by Johnson Controls prior to December 2023 that had not vested before his resignation from Johnson Controls.   The value of the equity subject to replacement will be based on the average closing price of Johnson Controls shares taken over the 30-trading days leading up to and including the day prior to the grant date.  The amount will be denominated in an approximately equal mix of Eaton stock options and restricted share units, based on the average closing price of Eaton shares over that same 30-day period.  As of the date of this Form 8-K, the estimated number of Eaton restricted share units and stock options, subject to adjustment as described herein, are 8,375 and 34,900, respectively.     The grant date will be the first trading day of the month following the month he is hired, which is expected to be March 1, 2024.  Stock options and Restricted Share units vest ratably over three years, and stock options granted will have an exercise price equal to the grant date fair market value.  Mr. Leonetti will also receive a cash award of approximately $271,667 replacing a prorated portion of his 2024 Johnson Controls short-term incentive opportunity.  The payment is subject to the terms of an agreement that requires repayment if Mr. Leonetti is terminated for Cause or leaves voluntarily within two years of his start date, the terms of which are more fully set forth in Exhibit 10.6.  Additionally, Mr. Leonetti will participate in the same health and welfare and retirement benefit plans that are available to all US salaried employees.  He will also receive reimbursement for financial, tax and estate planning advice as well as relocation benefits.

Eaton will enter into an Indemnification Agreement and a Change of Control Agreement with Mr. Leonetti in substantially the same form entered into with each of the other Eaton Officers. The Indemnification Agreement will provide that, to the fullest extent permitted by law, Eaton will indemnify Mr. Leonetti against expenses (including attorneys’ fees, judgments, fines and amounts paid in settlement) actually and reasonably incurred by him in connection with any claim against him as a result of his service. The Change of Control Agreement will protect Mr. Leonetti for the two-year period following a change of control, from certain changes to his employment, position, duties, compensation and benefits. If, during this two-year period, the successor company terminates Mr. Leonetti’s employment other than for “Cause” or if he terminates his employment for “Good Reason”, he would receive a lump sum cash payment equal to the aggregate of (1) any earned but as yet unpaid base salary and short-term and ESIP awards for completed incentive award periods, (2) a prorated portion of his target opportunity for any open ESIP award periods and (3) severance equal to the sum of his annual base salary and target incentive opportunity under the EIC plan multiplied by two (4) the sum of his annual base salary and target incentive opportunity under the EIC plan in exchange not to compete with Eaton for a period of additional one year following the termination date. Under these circumstances, he would also receive continued health and welfare benefits for a period of two years. The Change of Control Agreement will not provide tax protection on payments made in connection with a change in control.

These summaries of material terms of the Indemnification Agreement and Change of Control Agreement set forth above are qualified in their entirety by reference to the full text of the applicable agreements. (See Exhibits 10.4 and 10.5, respectively, to this Report, which are incorporated herein by reference.)

Item 9.01
Financial Statements and Exhibits.

(d) Exhibits.

10.1 Form Performance Share Grant Agreement, incorporated herein by reference to the Form 10-K for the year ended December 31, 2016. Exhibit (sec.gov)
 
10.2 Form Stock Option Agreement for Executives, incorporated herein by reference to the Form 10-K for the year ended December 31, 2015. Exhibit (sec.gov)
 
10.3 Form RSU Grant Agreement, incorporated herein by reference to the Form 10-K for the year ended December 31, 2016. Exhibit (sec.gov)
 
10.4 Form of Indemnification Agreement between Eaton Corporation and each officer thereof, incorporated herein by reference to the Company’s 10-K filed for the year ending December 31, 2015.   Exhibit (sec.gov)
 
10.5 Form Change of Control Agreement between Eaton Corporation and each officer thereof, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on April 28, 2022.   Exhibit (sec.gov)
 
10.6 Repayment Agreement*
 
99   Press release dated January 17, 2024*
 
104  Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
*Filed Herewith
 
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 plc
   
Date: January 18, 2024
/s/ Taras Szmagala
 
Taras G. Szmagala,
Executive Vice President and Chief Legal Officer

 
Exhibit 10.6
Signing Bonus Agreement

Eaton Corporation (“Eaton”) hereby offers to pay _______ (“Employee”) a Signing Bonus in the amount of $_______ less applicable taxes and withholdings.  Eaton’s offer to pay the Signing Bonus is subject to following terms and conditions:


 1.
Signing Bonus Terms. Employee has agreed to accept an at-will employment position with Eaton.  Employee will begin working at Eaton on _________, and the Signing Bonus will be paid in one lump sum in Employee’s first regularly scheduled paycheck.  This payment is subject to applicable tax withholding and requires Employee to be an active employee and in good standing on the date of the payment.


2.
At-Will Employment.  The parties specifically agree that this Agreement is not an employment contract, and that it does not alter Employee’s status as an at-will employee of Eaton.  Based on Employee’s status as an at-will employee, either Employee or Eaton may terminate Employee’s employment at Eaton at any time for any reason not otherwise prohibited by law.


3.
Repayment of Signing Bonus.  Employee agrees that the Signing Bonus is subject to the following repayment obligations:

  (a)
If Employee works for Eaton for more than 24 months following the payment of the Singing Bonus, Employee shall have no obligation to repay the Signing Bonus.  Additionally, if Eaton terminates Employee’s employment without Cause at any time, Employee has no obligation to repay the Signing Bonus.


(b)
If Employee voluntarily leaves Eaton or is terminated by Eaton for Cause within 24 months of the Signing Bonus payment date, Employee must repay Eaton the full amount of the Signing Bonus within fourteen (“14”) days of Employee’s final date of employment with Eaton.  For the purposes of this Agreement, “Cause” shall mean: (i) your willful and continued failure to perform substantially your duties with the Company or an Affiliate (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to you by your manager, the Board of Directors of Eaton Corporation, plc, or the Chief Executive Officer of the Company which specifically identifies the manner in which they believe that you have not substantially performed your duties; (ii)  you plead guilty or nolo contendere to, or are convicted of (a) any felony or (b) any crime involving moral turpitude, dishonesty, fraud or unethical business conduct; (iii)  your material violation of the Company’s Code of Ethics or other applicable Company or an Affiliate’s policies or procedures as are in effect from time to time; (iv) your willful misconduct in the course of your continuous service, which is materially detrimental to the financial condition or business reputation of the Company or an Affiliate, whether as a result of adverse publicity or otherwise.


(c)
If Employee fails to repay any amount due under this Agreement, Eaton may bring an action in court to recover the amount due.  The prevailing party in any such action shall be entitled to its costs, expenses, attorneys’ fees, and collection fees reasonably incurred in any such action.


4.
No Consideration Absent Execution of this Agreement.  Employee understands and agrees that Employee would not receive the monies and/or benefits specified in this Agreement except for Employee’s execution of this Agreement and the fulfillment of the promises contained herein.  Employee further acknowledges that Eaton makes no representations concerning the tax treatment of any payments under this Agreement.


5.
Modifications.  The terms of this Agreement may not be modified, altered, or changed except in a writing that specifically references this Agreement and that is signed by both Employee and an appropriate representative of Eaton.

By signing below, I knowingly, freely, and voluntarily accept the Signing Bonus Agreement and agree to comply with its terms.
 

    
 
Employee’s Signature
  
Date
    
         

       
Printed Name
        
         
Eaton Corporation
        
         
         
Signature
  

Date
  
         
         
Printed Name
  

 Title  
         


Exhibit 99

 
Eaton Communications
Eaton Center
Cleveland, OH 44122

Date
January 17, 2024

Eaton appoints board member, Olivier Leonetti, executive vice president and chief financial officer; Expects strong fourth quarter and full-year 2023 results

DUBLIN – Intelligent power management company Eaton (NYSE: ETN) announced today that Olivier Leonetti has been named executive vice president and chief financial officer, effective February 5, 2024. He succeeds Thomas B. Okray, who is leaving the company for personal reasons.

“On behalf of the company and our Board of Directors, I want to thank Tom for his service and wish him and his family all the best for the future,” said Craig Arnold, chairman and chief executive officer, Eaton.

Commenting on the company’s recent performance, Arnold said, “We remain well-positioned to deliver on our commitments and, as we have throughout the last year, we expect to report strong results for the fourth quarter and for the full year 2023 during our next earnings conference call.”

In sharing his plans, Okray said, “My years at Eaton have been some of the most enjoyable and rewarding of my career. However, last year, my personal situation changed, and I now need to be based with my family in Arizona. Olivier and I will work together in the next few weeks to make sure the transition is seamless. I have tremendous confidence in Eaton’s future and am looking forward to participating in the upcoming earnings call.”

– more –
Eaton/Page 2
Leonetti joins Eaton from Johnson Controls, where he served as executive vice president and chief financial officer. Before joining Johnson Controls in 2020, he served as chief financial officer of Zebra Technologies Corporation and Western Digital Corporation and held senior finance leadership roles at Global Commercial Organization, Amgen, Inc., and Dell, Inc. He also serves on the board of All-In Milwaukee and has been a member of Eaton’s board of directors since 2019, a role he will step down from.

Leonetti is a Certified Accountant. He holds a master’s degree in internal audit from the Graduate School of Management, Marseille, France; an MBA from Ecole Supérieure des Affaires, Grenoble, France; and a master’s degree in economics and accountancy from the University of Aix-Marseille, France.

“As a member of Eaton’s board for almost five years, Olivier has contributed valuable insights and perspectives on the company’s strategic direction and growth opportunities,” said Arnold. “We are grateful for his service on the board and look forward to working with him in this new capacity as the head of our Finance team.”

In commenting on his new role, Leonetti said, “I am very excited to join Eaton’s leadership team at such an exciting time in the company’s history. I look forward to this new adventure and to working closely with Craig, the board, and the talented leadership and Finance teams to create value for our customers, shareholders, employees, and communities.”

This news release contains forward-looking statements concerning the fourth quarter and full year 2023 results. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside the company’s control. The following factors could cause actual results to differ materially from those in the forward-looking statements: a global pandemic such as COVID-19; geopolitical tensions or war, unanticipated changes in the markets for the company’s business segments; unanticipated downturns in business relationships with customers or their purchases from us; competitive pressures on sales and pricing; supply chain disruptions, unanticipated changes in the cost of material, labor, and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; strikes or other labor unrest at Eaton or at our customers or suppliers; natural disasters; the performance of recent acquisitions; unanticipated difficulties completing or integrating acquisitions; new laws and governmental regulations; interest rate changes; changes in tax laws or tax regulations; stock market and currency fluctuations; and unanticipated deterioration of economic and financial conditions in the United States and around the world. We do not assume any obligation to update these forward-looking statements.

Eaton/Page 3
Eaton is an intelligent power management company dedicated to improving the quality of life and protecting the environment for people everywhere. We are guided by our commitment to do business right, to operate sustainably and to help our customers manage power ─ today and well into the future. By capitalizing on the global growth trends of electrification and digitalization, we’re accelerating the planet’s transition to renewable energy, helping to solve the world’s most urgent power management challenges, and doing what’s best for our stakeholders and all of society.

Eaton was founded in 1911 and has been listed on the New York Stock Exchange for more than a century. We reported revenues of $20.8 billion in 2022 and serve customers in more than 170 countries. For more information, visit www.eaton.com. Follow us on LinkedIn.

Contact:
Jennifer Tolhurst
Media Relations
+1 (440) 523-4006
jennifertolhurst@eaton.com

Yan Jin
Investor Relations
+1 (440) 523-7558
yanjin@eaton.com

###


v3.23.4
Document and Entity Information
Jan. 11, 2024
Cover [Abstract]  
Document Type 8-K
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Document Period End Date Jan. 11, 2024
Entity File Number 000-54863
Entity Registrant Name EATON CORPORATION plc
Entity Central Index Key 0001551182
Entity Incorporation, State or Country Code L2
Entity Tax Identification Number 98-1059235
Entity Address, Address Line One 30 Pembroke Road
Entity Address, Address Line Two Eaton House
Entity Address, City or Town Dublin 4
Entity Address, Country IE
Entity Address, Postal Zip Code D04 Y0C2
City Area Code 353
Local Phone Number 1637 2900
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Trading Symbol ETN
Security Exchange Name NYSE
Entity Emerging Growth Company false
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