Option Award Under the 2002 Praxair, Inc. Long Term Incentive Plan

Exhibit 10.01a

 

OPTIONAWARD

 

UNDER THE

 

2002PRAXAIR, INC.

 

 

                Award, made as ofthe 22nd day of February, 2005 (the “Grant Date”) by PRAXAIR, INC., a Delaware corporation,having an office at 39 Old Ridgebury Road, Danbury, Connecticut 06810-5113(hereinafter called the “Corporation”).

 

W I T N E S S E T H:

 

                The Corporationhereby grants to NAME«First»«M»«Last»(hereinafter called the “Participant”) as of February 22, 2005 (“date of grant”)a non-qualified stock option to purchase # OF SHARES shares of the common stock of the Corporation (par value of$.01 per share) at $44.25 per share upon the following terms and conditions:

 

               1. Vesting.             Except as otherwise provided inthis Award and subject to the provisions of paragraph 3, one-third of thisoption may be exercised only on or after February 22, 2006, an additionalone-third on or after February 22, 2007, and the remaining one-third on orafter February 22, 2008. The option may be exercised only in a whole number ofshares.  In the event that the option isnot evenly divisible by three, the remaining amount shall be added to the lastvesting period. Notwithstanding the foregoing, the entire option shall becomeimmediately exercisable on the occurrence of either the Participant’s death ora Change in Control.

 

               2. Expiration.  This option shall expire on the tenthanniversary of the Grant Date.

 

               3. Exercisability.

 

                (a)  This option shall be exercisable only by theParticipant while the Participant is in active employment with the Corporationor a subsidiary or affiliate of the Corporation except that this option shallcontinue to be exercisable:

 

                                (i)  at any time prior to its expiration date inthe case of the Participant’s Disability or Retirement; provided,however, that this option shall not become immediately exercisableupon the Participant’s Disability or Retirement but shall become exercisable inaccordance with paragraph 1; and provided further,that in the event of a Participant’s Retirement prior to the first anniversaryof the date of grant, this option shall not be exercisable at all but shall beimmediately forfeited.

 

                                (ii)during a three-year period commencing on the date of the Participant’stermination of employment by the Corporation or a subsidiary of the Corporationother than for cause, provided, however, thatthis option shall not become immediately exercisable upon the Participant’stermination other than for cause but shall become exercisable in accordancewith paragraph 1 above;

 

                                (iii)during a three-year period commencing on the date of the Participant’s death;

 

                                (iv)during a three-year period commencing on the date of termination of theParticipant’s employment, by the Participant or by the Corporation or a subsidiaryor affiliate of the Corporation, other than for cause, within two years after aChange in Control, or

 

 

 



 

                                (v)  otherwise as the Committee may determine, ifthe Committee decides that it is in the best interests of the Corporation topermit individual exceptions.

 

                (b)   In no event may this option be exercised onor after its expiration date.

 

                (c)  An individual who is employed by a subsidiaryor affiliate of the Corporation shall be deemed to have terminated employmentfor purposes of this Award at such time as the Corporation and its subsidiariesown, either directly or indirectly, less than 50% of the employing subsidiary’sor affiliate’s total financial interests or combined voting power.

 

               4.  Transferability.               This option is not transferableother than (a) in the event of the Participant’s death, in which case thisoption shall be transferred pursuant to the beneficiary designation then onfile with the Corporation, or, in the absence of such a beneficiarydesignation, by will or the laws of descent and distribution, or (b) in theevent of a beneficiary’s or distributee’s death, this option shall betransferred to his/her estate and may be exercised only by the executor oradministrator of such estate.  In eitherof the foregoing events, this option may be exercised by the executor oradministrator of the Participant’s estate, by the Participant’s beneficiary ordistributee(s), or by the executor or administrator of the beneficiary’s ordistributee’s estate, as applicable, within the time limitations provided inparagraphs 1, 2 and 3 hereof.

 

               5.  Exercise of Option.

 

                (a)  Notice of Exercise.   This option may be exercised at the officeof the Corporation in Danbury, Connecticut (or at such other location as determinedby the Corporation) with respect to a part or all of the shares covered by theoption and then exercisable by giving notice to the Corporation (or itsdesignee as communicated from time to time) of the exercise of the option.

 

                (b)  Exercise Price Payment.  The option price for the shares for whichthis option is exercised shall be paid by the exerciser not later than tenbusiness days after the date of exercise, (i) in cash, (ii) in whole shares ofcommon stock of the Corporation owned by the exerciser prior to exercising theoption, (iii) by having the Corporation withhold shares that would otherwise bedelivered to the exerciser pursuant to the exercise of the option, or (iv) in acombination of cash and delivery of whole shares, or cash and the withholdingof shares.  The value of any share ofcommon stock delivered or withheld in payment of the option price shall be itsMarket Price on the date the option is exercised.  Notwithstanding the foregoing, theCorporation may refuse to allow payment by any method other than cash if theCorporation determines that allowing such payment would result in theimposition of variable accounting on the Corporation.

 

                (c)  Taxes.  To enable the Corporation to meet anyapplicable federal, state or local withholding tax requirements arising as aresult of the exercise of the option, the exerciser shall pay the Corporationthe amount of tax to be withheld, if any, (i) in cash, (ii) in whole shares ofcommon stock of the Corporation owned by the exerciser prior to exercising theoption, (iii) for exercises by the Participant only, by having the Corporationwithhold shares that would otherwise be delivered to the Participant pursuantto the exercise of the option (but only to cover the minimum legally requiredtax withholding), or (iv) in a combination of cash and a delivery of wholeshares.  The value of any share of commonstock so delivered or withheld shall be the Market Price on the date used todetermine the amount of tax to be withheld. The Corporation reserves the rightto (i) disapprove a Participant’s election to utilize any of the alternativesunder this paragraph (c), and (ii) to delay the completion of any exercise ofthis option until the applicable withholding tax has been paid.

 

                (d)  Delivery of Shares.Upon the exercise of an option with respect to a part or all of the shares inthe manner and within the time herein provided, the Corporation shall issue anddeliver to the exerciser, or to the exerciser’s dividend reinvestment account,the number of shares of its common stock with respect to which the option wasexercised. However, if an option is exercised



 

after the death of the Participant, beneficiary or distributee, thenthe Corporation shall have the right, in lieu of issuing and delivering shares ofstock, of returning the option payment to the exerciser and paying to suchperson the amount by which the Market Price on the date of exercise exceeds theoption price with respect to the number of shares for which the option wasexercised.

 

               6. Terms and ConditionsThis option is awarded pursuant to thePlan and is subject to all of the terms and conditions of the Plan which termsand conditions shall control in the event of any conflict with this Award.

 

               7. AdjustmentsThe Committee has discretion to makeappropriate adjustments to this stock option in order to provide for effects ofchanges in the capital structure of the Corporation by reason of any stocksplit, stock dividend, recapitalization, merger, consolidation, combination orexchange of shares or other similar corporate change or in the event of anyspecial distribution to stockholders.

 

               8. Applicable LawThis Award shall be interpreted andconstrued in accordance with the laws of the State of Connecticut.

 

               9.  Definitions.

 

                                (a)  “Change in Control” means a change in controlof the Corporation as defined in the Plan.

 

                                (b)  “Committee” means the Compensation andManagement Development Committee of the Board of Directors of the Corporationor any other Committee which such Board of Directors appoints to administer thePlan.

 

                                (c)  “Corporation” means Praxair, Inc.

 

                                (d)  “Disability” means a Participant’s inabilityto engage in any substantial gainful activity because of any medicallydeterminable physical or mental impairment which can be expected to result indeath or which has lasted, or can be expected to last, for a continuous periodof six (6) months or longer.

 

                                (e)  “Market Price” means the mean of the high andlow prices of the common stock of the Corporation as reported in the New YorkStock Exchange Composite Transactions on the specified date (or on the nextpreceding day such stock was traded on a stock exchange included in the NewYork Stock Exchange—Composite Transactions if it was not traded on any suchexchange on the specified date).

 

                                (f)  “Plan” means the 2002 Praxair, Inc. , as amended and restated as of February 24, 2004.

 

                                (g)“Retirement” means termination of employment with the Corporation or asubsidiary or affiliate, other than for cause, with the right under theCorporation’s Retirement Program to receive a non-actuarially reduced pensionimmediately upon separation from service. Provided, however, that if the Participant is employed by a foreignaffiliate of the Corporation and/or is not eligible to participate in theCorporation’s Retirement Program, Retirement means termination of employmentwith the Corporation or a subsidiary or affiliate, other than for cause, after(i) attaining age 65, (ii) attaining age 62 and completing at least 10 years ofemployment with the Corporation, or (iii) having accumulated 85 points, whereeach year of the Participant’s age and each year of employment with theCorporation count for one point.

 

               10. The Corporation’s grant of this optionto the Participant pursuant to this Award, and the Participant’s eligibilityfor any right, payment, issue or award with respect to this option, arecontingent on the Participant’s execution and filing with the Corporation, orthe employing subsidiary, as applicable, of a non-compete agreement in a form,and within a timeframe,

 

 



 

acceptable to the Corporation or the employing subsidiary.

 

               11.  Notwithstanding any other provision of thisAward, the Committee may, in its sole discretion, cancel,rescind, suspend, withhold, or otherwise limit or restrict this Award,and/or  recover any gains realized by theParticipant in connection with this Award, in the event of any actions by the Participantdetermined by the Committee to (a) constitute a conflict of interest with theCorporation, (b) be prejudicial to the Corporation’s interests, or (c) violateany non-compete agreement or obligation of the Participant to the Corporation,any confidentiality agreement or obligation of the Participant to theCorporation, the Corporation’s applicable policies, or the Participant’s termsand  conditions of employment.

 

        IN WITNESS WHEREOF, theCorporation has caused this instrument to be executed by its proper officerhereunto duly authorized, as of the day and year first hereinabove written.

 

 

 

PRAXAIR, INC.

 

 

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