This Executive Compensation Plan Agreement involves
Title: FORM OF OPTION AWARD UNDER THE 2005 EQUITY COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS OF PRAXAIR, INC.
Governing Law: Connecticut Date: 7/27/2005
Industry: Chemical Manufacturing
FORM OF OPTION AWARD UNDER THE 2005 EQUITY COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS OF PRAXAIR, INC.
Praxair, Inc. and Subsidiaries
2005 EQUITY COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS OF PRAXAIR, INC.
Option Award , made as of the ___ day of __________, 20__ (the “Grant Date”) by PRAXAIR, INC., a Delaware corporation, having an office at 39 Old Ridgebury Road, Danbury, Connecticut 06810-5113 (the “Corporation”).
W I T N E S S E T H:
The Corporation hereby grants to you, ___[name of grantee]___________________ , as of the Grant Date, a non-qualified stock option to purchase _________ shares of the common stock of the Corporation (par value of $.01 per share) at $________ per share upon the following terms and conditions:
1. Vesting . Except as otherwise provided in this Option Award and subject to the provisions of paragraph 3 herein, one-third of this option may be exercised only on or after ___________, an additional one-third on or after __________, and the remaining one-third on or after ______________. [alternate in the Committee’s discretion: this option may be exercised only on or after ____________ [must be at least three years from the Grant Date]]. This option may be exercised only in a whole number of shares. In the event that this option is not evenly divisible by three, the remaining amount shall be added to the last vesting period. Notwithstanding the foregoing, the entire option shall become immediately exercisable on the occurrence of either your death or a Change in Control.
2. Expiration . This option shall expire on the tenth anniversary of the Grant Date.
3. Exercisability .
(a) This option shall be exercisable only by you while you are in active service as a Non-Employee Director of the Corporation (or by your transferee if this option has been duly transferred pursuant to paragraphs 4 and 5 herein) except that this option shall continue to be exercisable:
(i) at any time prior to its expiration date in the case of your Disability or Retirement; provided, however, that this option shall not become immediately exercisable upon your Disability or Retirement but shall become exercisable in accordance with paragraph 1; and provided further, that in the event of your Retirement prior to the first anniversary of the Grant Date, this option shall not be exercisable at all but shall be immediately forfeited.
(ii) during a three-year period commencing on the effective date of your resignation or termination of service as a Non-Employee Director of the Corporation, other than for cause; provided, however, that this option shall not become immediately exercisable upon your resignation or termination but shall become exercisable in accordance with paragraph 1 above; and provided further, that in the event of your resignation or termination of service effective prior to the first anniversary of the Grant Date, this option shall not be exercisable at all but shall be immediately forfeited.
(iii) during a three-year period commencing on the date of your death;
(iv) during a three-year period commencing on the effective date of your resignation or termination of service as a Non-Employee Director of the Corporation, other than for cause, within two years after a Change in Control, or
(v) otherwise as the Committee may determine, if the Committee decides that it is in the best interests of the Corporation to permit individual exceptions.
(b) In no event may this option be exercised on or after its expiration date.
4. Transferability . This option is not transferable other than;
(a) in the case of your death, pursuant to the beneficiary designation then on file with the Corporation, or, in the absence of such a beneficiary designation (or if the designated beneficiary has pre-deceased you), by will or the laws of descent and distribution (in which event, this option may be exercised by the executor or administrator of your estate or by your distributee(s) within the time limitations provided in paragraphs 1, 2 and 3 hereof and the Corporation, without liability to any other person, may rely on the directions of the executor or administrator of your estate with respect to the disposition or exercise of this option), or
(b) [inclusion of this subparagraph (b) is subject to Committee discretion] by you, without consideration and without further right of transfer other than pursuant to subparagraph (c) below, to;
(i) your spouse, children (including by adoption), stepchildren or grandchildren (“immediate family members”), or
(ii) a partnership in which such immediate family members are the only partners, or
(iii) a trust for the exclusive benefit of such immediate family members, or
(iv) such other persons or entities as the Committee may approve upon your request; or
(c) in the case of a transferee’s, beneficiary’s or distributee’s death, to his/her estate, in which case this option may be exercised only by the executor or administrator of such estate and shall not be subject to further transfer.
5. Operation of Option after Transfer . The provisions of this Option Award, including, without limitation, paragraphs 3 and 6(c) herein relating to you as the original grantee, shall apply to this option notwithstanding any transfer to a third party. Following transfer, this option shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer. The events of death, Disability, Retirement, resignation and termination of s