<PAGE>
[LOGO] PRAXAIR
39 Old Ridgebury Road
Danbury, Connecticut 06810-5113
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 1998
Dear Praxair Shareholder:
The Annual Meeting of Shareholders of Praxair, Inc. will be held at
9:30 a.m. on Tuesday, April 28, 1998 in the Grand Ballroom of the Danbury
Hilton and Towers, 18 Old Ridgebury Road, Danbury, Connecticut, for the
following purposes:
1. To elect four directors to the Board of Directors.
2. To conduct such other business as may properly come
before the meeting.
Only holders of Common Stock of Praxair, Inc. of record at the close
of business on March 1, 1998 will be entitled to vote at the meeting or any
adjournment thereof.
To be sure that your vote is counted, we urge you to complete and sign
and date the proxy/voting instruction card enclosed in this package and
return it in the postage paid envelope that is provided. The giving of such
proxy does not affect your right to vote in person if you attend the
meeting. The prompt return of your signed proxy will aid the Company in
reducing the expense of additional proxy solicitation.
If you plan to attend the Annual Meeting in person, please mark the
appropriate box on the proxy card.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ DAVID H. CHAIFETZ,
DAVID H. CHAIFETZ,
Vice President, General Counsel and Secretary
March 6, 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL
MEETING IN PERSON, PLEASE SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
<PAGE>
[LOGO] PRAXAIR
39 Old Ridgebury Road
Danbury, Connecticut 06810-5113
PROXY STATEMENT
Annual Meeting of Shareholders
Tuesday, April 28, 1998
This statement is furnished to shareholders of Praxair, Inc.
("Praxair") in connection with the solicitation of proxies for the Annual
Meeting of Shareholders to be held at The Danbury Hilton and Towers, 18 Old
Ridgebury Road, Danbury, Connecticut on April 28, 1998, at 9:30 a.m. or at
any adjournment thereof (the "Annual Meeting"). This proxy statement and the
enclosed form of proxy are first being sent to shareholders on or about
March 13, 1998. The enclosed proxy is solicited on behalf of the Board of
Directors of Praxair.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
Item 1: Election of Directors
Four directors are to be elected. Praxair's Board of Directors is
divided into three classes serving staggered terms. The terms of four of the
present directors expire this year and each has been nominated for
reelection.
Your Board of Directors recommends that Alejandro Achaval, Ronald L.
Kuehn, Jr., H. William Lichtenberger and H. Mitchell Watson, Jr. be elected
to serve in the class with terms expiring in 2001. Each nominee has agreed
to be named in this Proxy Statement and to serve if elected. Biographical
data on these nominees and the other members of the Board of Directors is
presented under the caption "Directors and Executive Officers" in this Proxy
Statement.
Unless otherwise directed on the proxy form, the proxy holders intend
to vote in favor of the above listed nominees. To be elected, a nominee must
receive a plurality of the votes cast at the Annual Meeting in person or by
proxy. If one or more of the nominees becomes unavailable for election or
service as a director, the proxy holders will vote shares for one or more
substitutes designated by the Board of Directors, or the size of the Board
of Directors will be reduced.
Item 2: Other Business
Praxair knows of no other business that will be considered for action
at the Annual Meeting. If any other business calling for a vote of
shareholders is properly presented at the meeting, the proxy holders will
vote shares in accordance with their best judgment.
1
<PAGE>
PROXY AND VOTING PROCEDURES
Shares represented by a properly executed and returned proxy will be
voted at the Annual Meeting as indicated on the proxy card unless earlier
revoked by the shareholder. Each share of Common Stock is entitled to one
vote. Shareholders may vote on a matter by marking the appropriate box on
the card. If the card is properly signed and returned and no choice is
specified for a matter, the shares will be voted on that matter as
recommended by the Board of Directors. Execution of the proxy also confers
discretionary authority to the proxy holder to vote on other matters that
may properly come before the meeting.
Directors shall be elected by a plurality of the votes cast at the
Annual Meeting. Except as otherwise provided by law, other matters voted on
at the Annual Meeting shall be determined by the majority of votes cast at
the Annual Meeting in person or by proxy by shareholders entitled to vote on
the matter. Abstentions and broker non-votes on returned proxies and ballots
are not considered votes cast and shall be counted as neither for nor
against a matter or nominee but the shares represented by such an abstention
or broker non-vote shall be considered present at the Annual Meeting for
quorum purposes. As to matters requiring the vote of a majority of the
shares either present or outstanding, and entitled to vote on the matter,
abstentions have the same effect as a vote against the matter and broker
non-votes under Delaware Corporation Law and Securities and Exchange
Commission rules are deemed to not be entitled to vote on the matter.
A shareholder giving a proxy may revoke it at any time before it is
voted by filing with Praxair's Secretary a written revocation or a duly
executed proxy bearing a later date or by voting in person at the Annual
Meeting.
2
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS
Shareholders of record at the close of business on March 1, 1998 will
be entitled to vote at the Annual Meeting. As of that date, a total of
160,128,320 shares of Praxair's Common Stock were outstanding.
The only persons known by Praxair to be beneficial owners of more than
five percent of Praxair's Common Stock (par value $0.01) are the following:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Name and Address of Number of Shares Percent of Shares
Beneficial Owner Beneficially Owned Outstanding(a)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
The Capital Group Companies, Inc........................... 13,073,590(b) 8.2%
333 South Hope Street, Los Angeles, CA 90071
Ark Asset Management Co., Inc.............................. 9,691,600(c) 6.1%
One New York Plaza, New York, NY 10004
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes: (a) Based on 159,969,641 total shares outstanding on December 31, 1997.
(b) Holdings as of December 31, 1997 as reported in SEC Schedule 13G
by The Capital Group Companies, Inc. According to this report,
subsidiaries of The Capital Group Companies, Inc. collectively had
sole voting power as to 4,040,090 shares and sole investment power
as to 13,073,590 shares.
(c) Holdings as of December 31, 1997 as reported in SEC Schedule 13G
by Ark Asset Management Co., Inc. According to this report,
Ark Asset Management Co., Inc. had sole voting power as to 7,363,300
shares and sole investment power as to 9,691,600 shares.
- -------------------------------------------------------------------------------
As of March 1, 1998, directors and executive officers of Praxair
beneficially owned shares of Praxair's Common Stock (par value $0.01) as
follows (directors and all executive officers as a group, 20 persons,
beneficially own 1.5% of the outstanding shares):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
SHARES BENEFICIALLY OWNED AND OTHER EQUITY INTERESTS
Common Deferred Performance Stock
Name Position Stock(1) Stock(2) Stock(3) Total Options(4)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
H. William Lichtenberger Chairman & Chief 215,791 93,291 90,000 399,082 542,000
Executive Officer
Edgar G. Hotard Director, President 118,238 32,842 54,000 205,080 267,000
and Chief Operating
Officer
John A. Clerico Director, Executive 137,805 36,737 34,500 209,042 227,000
Vice President &
Chief Financial Officer
David H. Chaifetz Vice President, 51,305 8,498 21,000 80,803 92,200
General Counsel
& Secretary
Paul J. Bilek President, 10,493 5,402 28,500 44,395 69,800
North American
Industrial Gases
Alejandro Achaval Director 1,646 4,716 -- 6,362 5,000
C. Fred Fetterolf Director 3,198 5,619 -- 8,817 5,000
Dale F. Frey Director 1,627 1,768 -- 3,395 5,000
Claire W. Gargalli Director 1,699 1,691 -- 3,390 5,000
Ronald L. Kuehn, Jr. Director 5,301 4,113 -- 9,414 5,000
Raymond W. LeBoeuf Director 1,000 1,208 -- 2,208 0
Benjamin F. Payton Director 1,699 2,158 -- 3,857 5,000
G. Jackson Ratcliffe, Jr. Director 1,699 10,654 -- 12,353 5,000
H. Mitchell Watson, Jr. Director 1,687 2,727 -- 4,414 5,000
- ---------------------------------------------------------------------------------------------------------------------------
Directors & Executive (20 persons) 618,438 249,732 343,500 1,211,670 1,527,200
Officers as a group
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes: 1 ) Amounts reported as Common Stock include shares as follows
held by family members sharing the same household as the
officer: H. William Lichtenberger 5,000 shares; Directors
and Executive Officers as a group 5,000 shares. Also
included in the reported amount are 33,150 shares held by
the Lichtenberger Foundation over which Mr. Lichtenberger
had shared voting and investment power.
2) Deferred Stock represents stock price-based units into which
deferred compensation has been invested pursuant to the
deferred compensation plans for management and for
non-employee directors. Holders have no voting rights with
respect to Deferred Stock. The value of Deferred Stock units
varies with the price of Praxair's common stock and, at the
end of the deferral period, the units are payable in stock.
3) Performance Stock represents unvested performance shares as to
which the holder has neither investment nor voting power.
4) Stock Options represent shares that may be acquired upon exercise
of options exercisable within 60 days of March 1, 1998.
3
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
Board of Directors
The following pages present information about the persons who comprise
Praxair's Board of Directors; including the four nominees for reelection.
During 1997, the Board held ten meetings.
Director Attendance
During his current 3 year term to date, each nominee for reelection
attended Board meetings and meetings of committees of which he is a member
as follows: Mr. Achaval, 98%; Mr. Kuehn, 95%; Mr. Lichtenberger, 100%; and
Mr. Watson, 95%. During this same period, the other directors collectively
attended 95% of such meetings.
Director Compensation
No director who is an employee of Praxair is compensated for service
as a member of the Board of Directors or any committee of the Board of
Directors. Compensation for non-employee directors consists of an annual
retainer of $51,000, a $1,300 fee for each Board meeting attended, and a
$1,300 fee for each committee meeting attended. A director who is also
chairman of a Board of Directors' committee is paid an additional $5,000
annual retainer. Directors are reimbursed for travel expenses incurred on
behalf of Praxair.
Each active non-employee director is also a participant in the 1995
Stock Option Plan for Non Employee Directors of Praxair, Inc. On or about
April 1st of each year, each Stock Option Plan participant is granted
options to purchase 2,500 shares of Praxair's Common Stock. The exercise
price of each option is 100% of the closing price of Praxair's stock as
reported by the New York Stock Exchange on the date of grant. Each option
granted under the stock option plan becomes exercisable on the second
anniversary of its date of grant and expires ten years from the date of
grant. The plan contains provisions regarding the exercisability and
termination of outstanding options in the event of termination of service,
retirement, disability, death and change in control of Praxair.
A Deferred Compensation Plan is also available for non-employee
directors. Under this plan, non-employee directors may, prior to the
beginning of a calendar year, elect to defer to a later date payment of some
or all of the cash fees earned in that year. This deferred payment date is
fixed by the director at the time of his or her deferral election. At the
time of the deferral election, the director also designates that the
deferred fees be credited with earnings based upon a "Cash Account" which
earns interest at the prime rate, a "Stock Unit Account", the value of which
will vary with the market price of Praxair's common stock or a "Discounted
Stock Unit Account" in which stock units are allocated at a 10% discount to
the market price of Praxair's common stock, and thereafter, their value
varies with the market price of that stock. Stock Unit Accounts and
Discounted Stock Unit Accounts will also be credited with additional stock
units whenever dividends are paid on Praxair's common stock. Stock units
provide directors the economic equivalent of stock ownership except that the
units may not be transferred or sold and they do not provide any voting or
other shareholder rights. The "Cash Account" is paid to the director in cash
on the designated payment date. The "Stock Unit Account" and the "Discounted
Stock Unit Account" are both paid in the form of Praxair common stock.
4
<PAGE>
- -------------------------------------------------------------------------------
ALEJANDRO ACHAVAL Age 65
Director Since 1992 Term Expires 1998
Chairman, Chief Executive Officer and Controlling Partner of IMEXTRADE S.A.
and TRINIDAD S.C.A.
Mr. Achaval served as Vice Chairman & Chief Executive
Officer, IPAKO Industrias Petroquimicas Argentinas S.A.
between 1975 and his retirement in 1994.
Mr. Achaval also has served as Chairman of the Argentine
Chamber of Chemical and Petrochemical Industries, as a
member of the Board and Executive Committee of the Argentine
Board of Industry and as a director of I.D.E.A. Argentine
Institute for Management Development. Mr. Achaval is a
director of the National Institute of Technology (INTI), the
Fundacion Invertir (an Argentine investment foundation), and
FIPLASTO S.A.
Mr. Achaval is also Chairman of CINPLAST S.A. and FUNDES,
subsidiaries of Nueva-Amanco AG (Switzerland), and a
director of Praxair Argentina S.A., an indirect subsidiary
of Praxair, Inc.
- -------------------------------------------------------------------------------
JOHN A. CLERICO Age 56
Director Since 1992 Term Expires 1999
Executive Vice President and Chief Financial Officer of Praxair since 1997
In 1990, Mr. Clerico was elected to the position of Chief
Financial Officer of Union Carbide Corporation. He resigned
as an officer of Union Carbide Corporation upon Praxair's
spin-off in 1992 and assumed the position of Vice President
and Chief Financial Officer of Praxair. He was also the
Treasurer of Praxair between 1992 and 1994. In 1997, he was
elected Executive Vice President of the Company.
Mr. Clerico is a member of the International Treasurers'
Association, the National Association of Corporate
Treasurers, the Financial Executives Institute and the
Multiple Sclerosis Society and is on the Board of Directors
of the Danbury Chamber of Commerce.
- -------------------------------------------------------------------------------
C. FRED FETTEROLF Age 69
Director Since 1992 Term Expires 2000
Director of Various Corporations
Mr. Fetterolf served as Director and President of Aluminum
Company of America between 1983 and 1991, adding the title
of Chief Operating Officer in 1985.
Mr. Fetterolf is a trustee of Eastern College and Carnegie
Mellon University and a director of numerous community
organizations
Mr. Fetterolf is also a director of Allegheny Teledyne
Corporation, Commonwealth Aluminum Co., Dentsply
International, Mellon Bank Corporation, Mellon Bank, N.A.,
Quaker State Corporation and Union Carbide Corporation.
5
<PAGE>
- -------------------------------------------------------------------------------
DALE F. FREY Age 65
Director Since 1993 Term Expires 1999
Director of Various Corporations
Mr. Frey served as Vice President and Treasurer of General
Electric Company from 1980 through 1984 and 1986 through
1993 and he served as Chairman and President, General
Electric Investment Corporation from 1984 to 1997.
Mr. Frey is Chairman of the Damon Runyon-Walter Winchell
Cancer Research Fund and a trustee of Franklin & Marshall
College. He is also a member of the Forstmann Little Company
Advisory Board.
Mr. Frey is also a director of Aftermarket Technology
Corporation, Community Health Systems, First American
Financial Corporation, Promus Hotel Corporation, Roadway
Express, Inc., and USF&G Corporation.
- --------------------------------------------------------------------------------
CLAIRE W. GARGALLI Age 55
Director Since 1992 Term Expires 2000
Vice Chairman, Diversified Search Companies since 1990
Ms. Gargalli served as Director, President and Chief
Operating Officer of Equimark Corporation between 1987 and
1990. During that period she also served as Chairman and
Chief Executive Officer of Equibank and as Chairman of
Liberty Savings Bank.
Ms. Gargalli is a trustee of Carnegie Mellon University,
Middlebury College and Allegheny University of the Health
Sciences.
Ms. Gargalli is also a director of Western Atlas Inc. and
Renal Treatment Centers, Inc.
- -------------------------------------------------------------------------------
EDGAR G. HOTARD Age 54
Director Since 1992 Term Expires 2000
President and Chief Operating Officer of Praxair since 1997
Mr. Hotard was elected a Vice President of Union Carbide
Corporation and President of Praxair in 1990. He resigned as
an officer of Union Carbide Corporation upon Praxair's
spin-off in 1992. In 1997, he added the title of Chief
Operating Officer.
Mr. Hotard is past Chairman of the Board of the
International Oxygen Manufacturers' Association and past
Chairman of the Compressed Gas Association. He is a director
of the U.S./China Business Council and a member of the China
Economic and Technology Alliance and the Dean's Advisory
Council of the University of New York at Buffalo.
Mr. Hotard is also a director of Aquarion Company, Dexter
Corporation and Iwatani Industrial Gases.
6
<PAGE>
- -------------------------------------------------------------------------------
RONALD L. KUEHN, JR. Age 62
Director Since 1992 Term Expires 1998
Chairman, President and Chief Executive Officer of Sonat Inc. since 1986
Mr. Kuehn is a trustee of Tuskegee University. He is also a
member of the University of Alabama at Birmingham
President's Council and a director of the Gas Research
Institute. Mr. Kuehn is active in numerous community and
charitable organizations.
Mr. Kuehn is also a director of AmSouth Bancorporation, Dun
and Bradstreet, Protective Life Corporation, Transocean
Offshore Inc., Southern Natural Gas Company and Union
Carbide Corporation.
- -------------------------------------------------------------------------------
RAYMOND W. LEBOEUF Age 51
Director Since 1997 Term Expires 1999
Chairman and Chief Executive Officer of PPG Industries, Inc. since 1997
Mr. LeBoeuf was elected Vice President Finance and Chief
Financial Officer of PPG Industries, Inc. in 1988, serving
in that position until 1994 when he became Vice President,
Coatings and Resins and then Executive Vice President. In
1995, he was elected President and Chief Operating Officer
and a director of PPG Industries, Inc. and he assumed his
current positions in 1997.
Mr. LeBoeuf is a director of Magee-Womens Hospital, a
trustee of Robert Morris College and a board member of the
Allegheny Conference on Community Development, the Business
Roundtable and the Extra Mile Education Foundation.
- -------------------------------------------------------------------------------
H. WILLIAM LICHTENBERGER Age 62
Director Since 1992 Term Expires 1998
Chairman and Chief Executive Officer of Praxair since 1992
Mr. Lichtenberger was elected President and Chief Operating
Officer and a director of Union Carbide Corporation in 1990.
He resigned as an officer and director of Union Carbide
Corporation upon Praxair's spin-off in 1992 and assumed his
current positions.
Mr. Lichtenberger is a member of the Conference Board, and
The Business Roundtable and its Policy Committee. He is also
a director of the National Association of Manufacturers and
a member of its Executive Committee. He is Chairman of
United Negro College Fund's Connecticut Corporate Campaign
and is on the Advisory Board of the Fairfield County Boy
Scouts.
Mr. Lichtenberger is also a director of Olin Corporation and
Ingersoll Rand Company.
7
<PAGE>
- -------------------------------------------------------------------------------
BENJAMIN F. PAYTON Age 65
Director Since 1992 Term Expires 1999
President, Tuskegee University since 1981
Dr. Payton is on the Board of The Business-Higher Education
Forum. He is also a director of the National Action Council
for Minority Engineers. Dr. Payton is active in numerous
other educational and community organizations.
Dr. Payton is also a director of AmSouth Bancorporation, ITT
Corporation, Liberty Corporation, Morrison Healthcare, Inc.,
Ruby Tuesday, Inc. and Sonat Inc.
- -------------------------------------------------------------------------------
G. JACKSON RATCLIFFE, JR. Age 61
Director Since 1992 Term Expires 2000
Chairman, President and Chief Executive Officer of Hubbell Incorporated
since 1987
Mr. Ratcliffe is on the Board of Governors of the National
Electrical Manufacturers Association (NEMA) and is a trustee
of the Manufacturers' Alliance for Productivity and
Innovation, Inc. (MAPI).
Mr. Ratcliffe is also a director of Aquarion Company and
Olin Corporation.
- -------------------------------------------------------------------------------
H. MITCHELL WATSON, JR. Age 60
Director Since 1992 Term Expires 1998
President, Sigma Group of America since 1992
Mr. Watson served as Vice President, Marketing and Service
for IBM Corporation between 1985 and 1989. In 1989, he was
elected President and Chief Executive Officer of ROLM
Company, a position he held until 1992.
Mr. Watson is President and Chairman of the Executive
Committee of Helen Keller International. He is also a
trustee of the Interdenominational Theological Center, a
member of the Development Council of the University of
Tennessee and a former President of the North Carolina
Symphony.
Mr. Watson is also a director of Plasti-Line, Inc. and
Caliber System Inc. and a director and the non-executive
Chairman of MAPICS, Inc.
8
<PAGE>
Executive Officers
The following Executive Officers have been elected by the Board of
Directors and serve at the pleasure of the Board. It is expected that the
Board will elect officers annually following each Annual Meeting of
Shareholders.
Paul J. Bilek, 50, was designated President, North American Industrial
Gases, of Praxair in 1996 and President, Praxair Canada Inc. in 1995. Mr.
Bilek served as Vice President, North American Merchant Gases between 1995
and 1996. He served as President of Praxair Canada Inc. between 1991 and
1993 and as President of Praxair Surface Technologies, Inc. between 1993 and
1995.
David H. Chaifetz, 55, is Vice President, General Counsel and
Secretary of Praxair. In 1989, Mr. Chaifetz was appointed General Counsel of
Praxair. He assumed his current positions in 1992.
John A. Clerico, 56, see description under "Board of Directors."
Michael E. DeDomenico, 50, is a Vice President of Praxair and
President of Praxair Europe. Mr. DeDomenico served as Director, Sales and
Commercial Development of Praxair between 1990 and 1993 and as President,
Praxair Canada Inc. in 1993. He assumed his current position in 1993. He is
a director of the European Industrial Gases Association.
Ivan F. Garcia, 55, has been a Vice President of Praxair since 1997.
Mr. Garcia is also Chief Executive Officer of S.A. White Martins, Praxair's
Brazilian subsidiary. Prior to his election as Chief Executive Officer in
1997, he was its Vice President and Chief Operating Officer. Mr. Garcia
currently serves as a director of the Brazilian Air Gases Industries
Association and the International Oxygen Manufacturers Association. He also
is on the board of the Brazilian Business Council for Sustainable
Development and sits on the Executive Committee and Business Affairs
Committee of the American Chamber of Commerce in Rio de Janeiro. Mr. Garcia
is also on the board of the Brazilian Pulp and Paper Technical Association
and is a member of the Energy Business Council of Rio de Janeiro Trade
Chamber.
Jesus E. Gonzalez, Jr., 56, is Vice President, Chemicals and Refining
Business and Steel Markets, of Praxair. Mr. Gonzalez served as Business
Director, North American On-Site Gases, of Praxair between 1990 and 1994. He
was elected a Vice President of the Company in 1994 and assumed his current
position in 1997.
Edgar G. Hotard, 54, see description under "Board of Directors."
H. William Lichtenberger, 62, see description under "Board of
Directors."
Jose R. Rivero, 52, is a Vice President of Praxair and was elected
President, Praxair Distribution, Inc. in 1996. Mr. Rivero served as
Vice-President, Specialty Products, Packaged Gases and Latin America
Business Development between 1992 and 1993 and as Vice President, North
American Packaged Gases from 1993 to the present. Mr. Rivero was also
President of Praxair Canada Inc. from 1993 through 1995.
J. Robert Vipond, 52, is Vice President and Controller of Praxair. Mr.
Vipond assumed his current position in 1994 when he joined Praxair. Between
1990 and 1994, Mr. Vipond served as Chief Financial Officer of the Corporate
Finance Group of GE Capital, a wholly owned subsidiary of General Electric
Company.
Thomas W. von Krannichfeldt, 48, is a Vice President of Praxair and
President of Praxair Surface Technologies, Inc. Mr. von Krannichfeldt served
as President of Praxair Puerto Rico, Inc. between 1989 and 1993 and as
President of Praxair Mexico, S.A. de C.V. between 1993 and 1995. He assumed
his current positions in 1995.
9
<PAGE>
Committees of the Board
Audit Committee. The Audit Committee is comprised of C. Fred Fetterolf
as Chairman, Alejandro Achaval, Ronald L. Kuehn, Jr., Benjamin F. Payton and
H. Mitchell Watson, Jr. The Committee met three times during 1994. The Audit
Committee supports the independence of Praxair's external and internal
auditors and the objectivity of Praxair's financial statements. The Audit
Committee (1) reviews Praxair's principal policies for accounting, internal
control and financial reporting, (2) recommends to Praxair's Board of
Directors the engagement or discharge of the independent accountants, (3)
reviews with the independent accountants the plan, scope and timing of their
audit and (4) reviews the auditor's fees and, after completion of the audit,
reviews with management and the independent accountants the auditors'
report.
The Audit Committee also reviews, before publication, the annual
financial statements of Praxair, the independence of the independent
accountants, the adequacy of Praxair's internal accounting control system
and internal audit function and Praxair's policies on business integrity and
ethics and conflicts of interest. The Audit Committee also performs a number
of other review functions related to auditing the financial statements and
internal controls.
Compensation and Management Development Committee. The Compensation
and Management Development Committee is comprised of Ronald L. Kuehn, Jr. as
Chairman, John J. Creedon, Claire W. Gargalli and H. Mitchell Watson, Jr.
The Committee met five times during 1994. The Compensation and Management
Development Committee (1) determines the direct and indirect compensation,
incentive plans and employee benefits of the Chairman of the Board and other
elected officers of Praxair, (2) determines, and recommends to Praxair's
Board of Directors, Praxair's policies relating to the compensation of
Executive Officers and, generally, other employees. In addition, the
Committee reviews management's long-range planning for executive development
and succession, and performs certain other review functions relating to
management compensation and employee relations policies.
Finance and Pension Committee. The Finance and Pension Committee is
comprised of John J. Creedon as Chairman, John A. Clerico, Dale F. Frey,
Claire W. Gargalli, Edgar G. Hotard, and G. Jackson Ratcliffe, Jr. The
Committee met three times during 1994. The Finance and Pension Committee (1)
reviews periodically Praxair's financial policies and objectives, (2)
monitors Praxair's financial condition and its requirements for funds, (3)
reviews management recommendations as to the amounts, timing, types and
terms of public stock issues and public and private debt issues, and (4)
reviews periodically Praxair's dividend policy, insurance program and
foreign exchange operations. The Finance and Pension Committee also reviews
the financial, investment and actuarial policies and objectives of the
pension program and, periodically, other employee benefit programs, and the
investment performance of the fund established for the pension program. The
Finance and Pension Committee also performs certain other review functions
related to finance and pension matters.
Public Policy and Nominating Committee. The Public Policy and
Nominating Committee is comprised of G. Jackson Ratcliffe, Jr. as Chairman,
C. Fred Fetterolf, Dale F. Frey, H. William Lichtenberger and Benjamin F.
Payton. The Committee met three times during 1994. The Public Policy and
Nominating Committee recommends to Praxair's Board of Directors nominees for
election as directors, and periodically reviews potential candidates,
including incumbent directors. The Public Policy and Nominating Committee
reviews policies with respect to the composition, organization and practices
of Praxair's Board of Directors, and developments in corporate governance
matters generally.
10
<PAGE>
The Public Policy and Nominating Committee also reviews Praxair's
policies and responses to important social, political and public issues,
including matters relating to international operations, equal employment
opportunity, charitable contributions, and legislative issues, as well as
policies on and responses to important shareholder issues, including
management and shareholder proposals offered for shareholder approval. The
Public Policy and Nominating Committee reviews Praxair's policies for
health, safety and environmental affairs and Praxair's performance and
compliance with its policies and legal requirements in this area. The Public
Policy and Nominating Committee also performs various other functions
relating to public policy matters generally.
The Public Policy and Nominating Committee will consider candidate
nominees for election as director who are recommended by shareholders.
Recommendations should be sent to the Secretary of Praxair and should
include the candidate's name and qualifications and a statement from the
candidate that he or she consents to being named in the Proxy Statement and
will serve as a director if elected. In order for any candidate to be
considered by the Public Policy and Nominating Committee and, if nominated,
to be included in the Proxy Statement, such recommendation must be received
by the Secretary on or before the November 1 preceding the annual meeting at
which directors will be elected by the shareholders.
EXECUTIVE COMPENSATION
Compensation Policy and Decisions
Compensation of executive officers is determined by the Compensation
and Management Development Committee of the Board of Directors (see a
description of the Committee and a list of its members under the caption
"Committees of the Board" in this Proxy Statement). This Committee is
comprised of four non-employee directors, all of whom have considerable
experience in executive compensation issues and management development. None
of the members of the Committee has ever been an officer or employee of
Praxair or any of its subsidiaries. In discharging its responsibilities, the
Committee employs the services of an independent compensation consultant.
The consultant reports directly to the Committee regarding these matters.
The following is a report of the Compensation and Management
Development Committee. This report discloses the Committee's policies with
respect to compensation of Praxair's executive officers, and the specific
factors and criteria upon which the Chief Executive Officer's compensation
for the last fiscal year was based.
11
<PAGE>
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
This report addresses Praxair's compensation policies and practices,
and the Committee's decisions regarding 1994 compensation and long term
incentives as they affected the Chief Executive Officer and the four other
most highly paid executive officers of Praxair (the five individuals
collectively called "the Senior Executives.") These policies and practices
also generally affect the compensation of Praxair's other officers and high
level executives.
Executive Compensation Policies and Practices
Praxair's executive compensation policies are designed to (1) align
compensation with the company's annual and long term performance goals, (2)
attract and retain a highly qualified and motivated management team, (3)
reward individual performance and (4) link the interests of the Senior
Executives directly with those of shareholders through the use of Praxair
stock as a compensation vehicle.
The Committee uses the services of an outside compensation consultant
to review the competitiveness of the company's compensation programs. The
consultant has selected a comparator group of companies from its data base
that it considers as an appropriate group of companies against which to
compare Praxair for compensation purposes. The comparator group comprises 25
companies from various industries and of various sizes that represent the
competitive marketplace for Praxair executives. Since the size of the
comparator companies measured by sales varies, the consultant adjusts its
competitive analysis to account for that variable. For purposes of the
shareholder return comparisons elsewhere in this proxy statement, Praxair
uses the Dow Jones Specialty Chemicals Index, based on its belief that that
Index provides an appropriate industry peer group for investment
comparisons.
In determining the total compensation opportunity for each Senior
Executive, the Committee takes into account the mix of base salary, variable
compensation and long term incentives. It targets its compensation decisions
to achieve a median total compensation opportunity for comparable jobs
within the comparator group. However, since a large portion of the
compensation opportunity is determined by performance-based variable
compensation, total compensation may be above or below the median based on
individual, business unit and/or total company performance.
Salary
The Committee reviewed the base salaries of each of the Senior
Executives in comparison to the size-adjusted salaries paid for comparable
jobs by the companies in the comparator group. Generally, the Committee
found that the salaries of the Senior Executives were at approximately the
market average. The Committee approved salary adjustments for the Senior
Executives based on their individual performance and their salaries relative
to the market. On an annualized basis, the adjustments averaged 7.1 percent
for the Senior Executives other than the CEO. Mr Lichtenberger's salary was
adjusted by 11.7 percent on an annualized basis, effective April 1, 1997.
12
<PAGE>
Performance-Based Annual Variable Compensation
At its January 1997 meeting, the Committee reviewed its method of
determining annual variable compensation awards. First, the Committee
established the net income after tax, earnings per share, operating profit
and cash flow targets in the company's Annual Business Plan as the primary
measures against which performance would be judged for purposes of annual
performance-based variable compensation. Secondary measures established by
the Committee included shareholder value creation in comparison to the S&P
500 Index and achievement of agreed upon goals in the areas of growth
strategies and strategic planning, safety and environmental performance,
people excellence, marketing and customer focus, operational excellence and
other financial results.
Second, the Committee adjusted the target variable compensation
payouts as a percentage of base salary to reflect its view that a larger
portion of the total compensation of the Senior Executives should be at risk
based upon performance. The target payout percentages range from 45 percent
of base salary up to a high of 65 percent of base salary for Mr.
Lichtenberger. Third, the Committee determined that achievement of the 1997
Annual Business Plan would warrant variable compensation above the target
level in view of the aggressiveness of the Plan.
At its January 1998 meeting, the Committee evaluated 1997 performance
of the company against its aggressive 1997 Annual Business Plan and
considered the individual performance of each of the Senior Executives.
Regarding the primary measures of performance, namely achievement of the
financial targets in the 1997 Plan, the Committee noted that the company
essentially achieved its Plan on net income. Net income was a record $422
million, a 26 percent increase from 1996 before adjustments for
restructuring and accounting charges. Operating profit was $848 million, up
15.8 percent from 1996. Most of the company's 1997 nonfinancial goals noted
above were either accomplished or progress was well under way. However, in
spite of the financial results, the full year return to Praxair's
shareholders was negative compared to 32 percent for the S&P 500 Index. In
addition, the Corporation's performance on personnel safety, a significant
area of focus, did not meet expectations during 1997. The Committee also
reviewed the performance of the Corporation in comparison to the performance
measures established by the Committee in 1997 for the Senior Executives
under the Senior Executive Performance Award Plan, approved by the
shareholders in 1996 to comply with Section 162(m) of the Internal Revenue
Code.
On the basis of the overall performance during 1997 in relation to
both financial and non-financial plans, the Committee awarded 1997
performance-based annual variable compensation for the Senior Executives at
a level somewhat above the target payout percentage noted above. The
variable compensation award for Mr. Lichtenberger was set at $675,000.
13
<PAGE>
Long Term Incentives
The Committee reviewed the status of the grant of performance shares
and stock options that it made to the Senior Executives and 90 other
officers and key employees in October 1996 (together called "Launch Plan
II"). Launch Plan II is a three-year program under which participating
individuals receive awards of performance shares (payable in Praxair common
stock) and stock options. The performance shares will fully vest on January
1, 2000, provided that Praxair meets its three-year cumulative 15 percent
per year earnings per share growth target for the period. The number of
actual performance shares that vest is governed by a sliding scale based on
cumulative earnings per share achieved over the three-year period with no
maximum. If cumulative earnings per share growth during the three year
period averages less than 6.5 percent per year, none of the performance
shares will vest. The stock options become exercisable on January 1, 2000.
The number of performance shares and stock options awarded to each
participant, including the Senior Executives, was determined to be
appropriate to maintain a competitive position based on market data for long
term incentive grants for similar positions compiled by the Committee's
compensation consultant. No additional grants were needed to remain
competitive. The Committee believes that Launch Plan II will be successful
in forcefully focussing the management team on achieving the required growth
targets even in challenging economic conditions. As a condition for
participation in Launch Plan II, participating executives are required to
sign an agreement not to compete with Praxair after they leave the company.
Policy With Respect to Deductibility of Compensation Expense
Section 162(m) of the Internal Revenue Code, enacted in 1993, limits
the tax deduction that Praxair may take with respect to the compensation of
certain executive officers, unless the compensation is "performance based"
as defined in the Code. In order to insure full deductibility for 1996 and
future years, the Board proposed, and the shareholders adopted at the 1996
Annual Meeting of Stockholders, (1) an amendment to the Corporation's Long
Term Incentive Plan and (2) a new performance based plan for annual and long
term incentives, both designed to comply with the IRS requirements for
deductibility.
Conclusion
The Praxair compensation program described above closely links pay
with performance and the creation of shareholder value. The Committee
believes that the program has been and will continue to be successful in
supporting Praxair's financial, growth and other business objectives.
The Compensation and Management Development Committee
Ronald L. Kuehn, Jr., Chairman
Claire W. Gargalli
Raymond W. LeBoeuf
G. Jackson Ratcliffe, Jr.
H. Mitchell Watson, Jr.
----------------------------------
14
<PAGE>
Executive Stock Ownership
The Board of Directors of Praxair believes that it is important for
executive officers to acquire a substantial ownership position in Praxair.
In this way, they will bear the same type of risks as are typically incurred
by shareholders, and their interests will be more closely aligned with those
of shareholders. Significant stock ownership focuses the executives'
attention on managing Praxair as equity owners.
Accordingly, at its first meeting in July 1992, the Compensation and
Management Development Committee of the Board of Directors adopted
guidelines for stock ownership by executive officers. These guidelines have
been met or exceeded by each Executive Officer.
Value of Shares Owned
---------------------
Chief Executive Officer 4.0x Base Salary
President and Chief Operating Officer 3.0x Base Salary
Chief Financial Officer 3.0x Base Salary
Other Executive Officers 1.5x Base Salary
In 1993, the Chief Executive Officer extended stock ownership
guidelines to include approximately 60 of the Corporation's senior managers.
Each of these employees was expected to hold shares of Praxair stock equal
in value to his or her annual base salary by 1998. All of those senior
managers have met the ownership guidelines. In 1997, the same stock
ownership guidelines were extended to all the senior managers now
participating in Launch Plan II (See the Compensation Committee Report,
"Long-Term Incentives") who were not part of the original senior manager
group. These managers are expected to meet the guidelines within 5 years.
In addition to the guidelines, Praxair's compensation programs and
benefit plans have many features designed to encourage and enable executive
officers and other employees to build stock ownership. For example, stock
option grants form an important part of executive compensation.
Other means used by Praxair to encourage employee stock ownership
include: (1) Praxair's matching contributions for employee deposits in
Praxair's Savings Program made in the form of Praxair's Common Stock, (2) a
Dividend Reinvestment and Stock Purchase Plan ("DRISP")in which dividends
are automatically reinvested in additional shares of Praxair's stock and a
participant may make optional cash purchases of Praxair's stock without
incurring broker's fees, (3) a deferred compensation program for management
whereby participants have the option to defer salary and variable
compensation into "Deferred Stock" units (the value of the stock units will
vary with the value of Praxair's Common Stock assuming reinvestment of
dividends), (4) payment of 20% of annual variable compensation (unless
deferred into "Deferred Stock" units) in the form of Praxair Common Stock
deposited in the recipient's DRISP account, and (5) performance share
programs which provide incentive in the form of Common Stock. Under these
performance share programs, shares of Praxair Common Stock are earned based
on the financial performance of Praxair over a multi-year performance
period.
15
<PAGE>
TABLE 1
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- ---------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation(1)
- ---------------------------------------------------------------------------------------------------------------------------
Awards Payouts
- ---------------------------------------------------------------------------------------------------------------------------
Other Securities
Annual Underlying LTIP All Other
Name and Salary Bonus(2) Compensation(3) Options Payouts Compensation(5)
Principal Position Year ($) ($) ($) (#) ($) ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
H. William Lichtenberger 1997 788,750 675,000 52,500 0 0 45,109
Chairman and Chief 1996 668,300 1,200,000 93,332 115,000 12,611,873(4) 94,501
Executive Officer 1995 626,700 1,000,000 77,778 95,000 0 86,970
- ---------------------------------------------------------------------------------------------------------------------------
Edgar G. Hotard 1997 457,500 350,000 7,778 0 0 26,105
President and 1996 415,000 700,000 15,555 70,000 7,206,874(4) 56,493
Chief Operating Officer 1995 395,000 675,000 15,000 50,000 0 50,507
- ---------------------------------------------------------------------------------------------------------------------------
John A. Clerico 1997 375,000 225,000 20,000 0 0 21,410
Executive Vice
President 1996 356,300 450,000 40,000 37,000 4,504,240(4) 41,289
and Chief Financial
Officer 1995 345,100 410,000 36,444 25,000 0 39,127
- ---------------------------------------------------------------------------------------------------------------------------
David H. Chaifetz 1997 271,251 175,000 3,889 0 0 12,578
Vice President, 1996 254,000 350,000 7,778 28,000 2,522,975(4) 23,541
General Counsel 1995 230,800 310,000 6,889 20,000 0 20,198
and Secretary
- ---------------------------------------------------------------------------------------------------------------------------
Paul J. Bilek 1997 307,500 288,385 5,667 0 0 14,907
President, North 1996 242,200 313,700 6,222 37,000 608,039(4) 14,546
American Industrial
Gases 1995 196,900 250,904 4,889 30,000 0 11,007
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes: 1) As of December 31, 1997, the named executive officers held
Performance Shares as follows. The following represents
Performance Shares granted in 1996 for the performance
period 1997 through 1999: H.W. Lichtenberger 90,000 shares
($4,050,000); E.G. Hotard 54,000 shares ($2,430,000); J.A.
Clerico 34,500 shares ($1,552,500); D. H. Chaifetz 21,000
shares ($945,000); P. J. Bilek 28,500 shares ($1,282,500).
Parenthetical figures represent the "value" of Performance
Share holdings calculated according to S.E.C. rules by
assuming 100% of the Performance Shares vest in 2000 at the
end of the performance period and by using the December 31,
1997 closing market price of Praxair Common Stock ($45.00
per share). Performance shares are subject to vesting
conditions based on the Corporation's cumulative earnings
per share ("EPS") performance for the period 1997 through
1999. The entire grant is forfeitable for below threshold
performance. The threshold level for vesting is EPS growth
equivalent to 6.5% per year. Vesting thereafter is governed
by a sliding scale. Shares in addition to those reported in
this footnote 1 will vest to the extent that EPS performance
exceeds 15% per year. There is no maximum future payout in
that the payout is solely a function of EPS performance
without a cap. Dividend and voting rights do not attach to
Performance Shares until such shares are vested.
Participation in this program is conditioned on the
recipient's execution of a non-compete agreement.
2) Reported in this column are annual awards that the Company
characterizes as Performance Based Annual Variable
Compensation. Twenty percent of the variable compensation
paid for 1995, 1996 and 1997 was paid in the form of Praxair
Common Stock or, at the officer's option, at least 20% was
deferred into "deferred stock" units. Data for P.J. Bilek
includes amounts paid from North American Industrial Gases
and Praxair Surface Technologies performance sharing
programs.
3) Represents the value of the discount from the market value
of the Corporation's Common Stock that is, in effect,
received by individuals who have deferred variable
compensation earned in 1995, 1996 and 1997 into discounted
"deferred stock" units under Praxair's deferred compensation
plan for management. Compensation that is placed in this
option must be so deferred for a minimum of 5 years.
4) Represents the 1997 vesting of Performance Stock and Awards
granted in 1992 and 1994 for the performance period
1992-1996. The amount reported reflects the pre-established
vesting schedule for net income growth performance of 26%
per year during the period 1992 through 1996.
5) Amounts reported in this column for 1997 are comprised of
the following items:
Savings Plan Executive Life
Company Match* Insurance Value
H. William Lichtenberger $29,189 $15,920
Edgar G. Hotard 16,726 9,379
John A. Clerico 12,540 8,870
David H. Chaifetz 9,782 2,796
Paul J. Bilek 11,978 2,929
*Includes both qualified and unqualified match amounts
16
<PAGE>
TABLE 2
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES
- ---------------------------------------------------------------------------------------------------------------------------
Number of Securities
Shares Underlying Value(1) of Unexercised
Acquired on Value Unexercised Options In-the-Money Options
Name Exercise (#) Realized ($) at FY-End (#) at FY-End ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Exercisable Unexercisable Exercisable Unexercisable
H. William Lichtenberger 100,000 $4,467,600 542,000 115,000 $16,046,277 0
Edgar G. Hotard 12,000 $ 452,916 267,000 70,000 $ 7,914,653 0
John A. Clerico 60,000 $2,081,120 227,000 37,000 $ 6,892,221 0
David H. Chaifetz 6,000 $ 262,242 92,200 28,000 $ 2,689,484 0
- ---------------------------------------------------------------------------------------------------------------------------
Paul J. Bilek 0 0 69,800 37,000 $ 1,867,876 0
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes: 1) Before Taxes. The dollar value reported is based on the difference
between the exercise price of the outstanding option and the market
price of Praxair's Common Stock at the close of trading on December
31, 1997. The market price on this date was $45.00 per share.
TABLE 3
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG PRAXAIR, INC., S&P 500 INDEX & DOW JONES SPECIALTY CHEMICALS INDEX
[LINE CHART]
DEC. 31 DEC. 31 DEC.31 DEC.31 DEC. 31
1993 1994 1995 1996 1997
------- ------- ------ ------ -------
PRAXAIR, INC. $101 $126 $209 $290 $285
S&P 500 110 112 153 189 252
D.J. SPEC. CHEM. 106 102 133 151 173
ASSUMES $100 INVESTED ON DECEMBER 31, 1992 IN PRAXAIR COMMON STOCK,
THE DOW JONES SPECIALTY CHEMICALS INDEX, AND THE S&P 500 INDEX
Notes: Total return assumes reinvestment of dividends. The Dow Jones Specialty
Chemicals Index is a published index currently covering twenty
companies, including Praxair.
17
<PAGE>
Defined Benefit or Actuarial Plans
Table 4 illustrates the estimated annual benefits payable from
Praxair's Retirement Program at retirement at age 65 based on the
assumptions shown. Calculation of benefits is uniform for all participants
in the Retirement Program, including the five named executives.
TABLE 4
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
PENSION PLAN TABLE
- ---------------------------------------------------------------------------------------------------------------------------
Average Annual Estimated Annual Retirement Benefits at Age 65
Remuneration Used for the Years of Company Service Credit Indicated
for Calculating -------------------------------------------------------------------------------------------------------
Retirement Benefits 15 yrs 20 yrs 25 yrs 30 yrs 35 yrs 40 yrs 45 yrs
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 250,000 $ 56,250 $ 75,000 $ 93,750 $112,500 $ 131,250 $ 150,000 $ 168,750
500,000 112,500 150,000 187,500 225,000 262,500 300,000 337,500
750,000 168,750 225,000 281,250 337,500 393,750 450,000 506,250
1,000,000 225,000 300,000 375,000 450,000 525,000 600,000 675,000
1,250,000 281,250 375,000 468,750 562,500 656,250 750,000 843,750
1,500,000 337,500 450,000 562,500 675,000 787,500 900,000 1,012,500
1,750,000 393,750 525,000 656,250 787,500 918,750 1,050,000 1,181,250
- ---------------------------------------------------------------------------------------------------------------------------
2,000,000 450,000 600,000 750,000 900,000 1,050,000 1,200,000 1,350,000
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
o Amounts shown are computed based upon straight life annuity amounts and
are subject to an offset for Social Security benefits. Annual retirement
benefits for program participants are based on salary and bonus (variable
compensation) payments as set forth in Table 1. No other forms of
remuneration are included. This table reflects the combination of qualified
and non-qualified pension benefits.
o Credited years of service as of March 1, 1998 are as follows: H. William
Lichtenberger 38 years; Edgar G. Hotard 33 years; John A. Clerico 14 years;
David H. Chaifetz 22 years; Paul J. Bilek, 29 years.
Employment Contracts and Termination of Employment and
Change in Control Arrangements
Praxair has entered into identical Severance Compensation Agreements
(the "Agreements") with H. William Lichtenberger, Edgar G. Hotard, John A.
Clerico, David H. Chaifetz, Paul J. Bilek and certain other employees. The
Agreements are designed to retain the executives and provide continuity of
management in the event of any actual or threatened change in control of
Praxair. The Agreements specify circumstances which shall constitute a
"Change in Control" for these purposes. These circumstances include, among
others and subject to the qualifications set forth in the Agreements: (1)
any consolidation or merger in which Praxair is not the continuing or
surviving corporation, (2) the sale, lease, exchange or transfer of all or
substantially all of the assets of the Corporation, (3) acquisition by a
person or group of more than 20% of Praxair's outstanding shares and (4) a
change in the majority composition of the Board not approved by two-thirds
of the directors in office prior to the change. The Agreements provide that
if the executive's employment is terminated under specified conditions after
such a change in control, then the executive will be entitled to receive:
(a) accrued salary, incentive compensation and benefits; (b) enhanced life,
disability, accident, health insurance and pension benefits; (c) a lump sum
payment equal to three times the sum of the executive's salary, bonus and
annualized long term incentive grants (stock options and performance stock
awards); (d) reimbursement for certain of the executive's tax liabilities;
and (e) outplacement and financial counseling benefits. Payments will be
made by Praxair or through a grantor trust adopted by Praxair.
The Agreements will expire on December 31, 1998. Thereafter, the
Agreements renew automatically for one year terms, unless Praxair or the
executive gives notice of termination of the Agreement. Notwithstanding any
such notice of termination, if a change in control occurs during the
original or extended term of an Agreement, then the Agreement is
automatically renewed for a period of 24 months beyond the term then in
effect. The Agreement terminates if the executive's employment with Praxair
is terminated by the executive or Praxair prior to a change in control.
18
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of SEC Forms 3, 4 and 5 furnished to
Praxair and written representations that no Form 5 is required, Praxair
believes that during the period January 1, 1997 to December 31, 1997, all
reports required by Section 16(a) of the Securities and Exchange Act of 1934
have been filed by its officers and directors.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP served as Praxair's independent accountants for
the year ended December 31, 1997 and has been selected by the Board of
Directors to serve in such capacity for the year ending December 31, 1998.
Representatives of Price Waterhouse LLP are expected to be present at the
Annual Meeting to be available to respond to appropriate questions and to
make a statement if they desire.
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Proposals of shareholders intended to be presented to Praxair's 1999
Annual Meeting of Shareholders must be received at Praxair's principal
executive offices by November 13, 1998 for inclusion in Praxair's proxy
statement and form of proxy for that meeting. Shareholder proposals should
be directed to the Assistant Corporate Secretary, Praxair, Inc., 39 Old
Ridgebury Road, M-1, Danbury, CT 06810-5113.
ANNUAL REPORTS
Shareholders of record on March 1, 1998 should have received a copy of
Praxair's 1997 Annual Report to Shareholders either with this Proxy
Statement or prior to its receipt. If, upon receipt of this proxy material,
you have not received the Annual Report to Shareholders, please write to the
Assistant Corporate Secretary at the address below and a copy will be sent
to you.
IN ADDITION, A COPY OF PRAXAIR'S ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1997 IS AVAILABLE TO EACH RECORD AND
BENEFICIAL OWNER OF PRAXAIR'S SECURITIES WITHOUT CHARGE UPON WRITTEN REQUEST
TO THE ASSISTANT CORPORATE SECRETARY, PRAXAIR, INC., 39 OLD RIDGEBURY ROAD,
M-1, DANBURY, CT 06810-5113.
19
<PAGE>
COST OF PROXY SOLICITATION
The entire cost of soliciting proxies will be borne by Praxair
including the expense of preparing, printing and mailing this Proxy
Statement. Solicitation costs include payments to brokerage firms and others
for forwarding solicitation materials to beneficial owners of Praxair's
stock and reimbursement of out-of-pocket costs incurred for any follow up
mailings. Praxair also has engaged Morrow & Co., Inc. to assist in the
solicitation of proxies from shareholders at a fee of $7,500 plus
reimbursement of out-of-pocket expenses. In addition to use of the mail,
proxies may be solicited personally or by telephone by employees of Praxair
without additional compensation, as well as by employees of Morrow & Co.,
Inc.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ DAVID H. CHAIFETZ,
DAVID H. CHAIFETZ,
Vice President, General Counsel and Secretary
March 6, 1998
YOU ARE URGED TO SEND IN YOUR EXECUTED PROXY PROMPTLY
20
<PAGE>
PRINTED ON RECYCLED PAPER. PRINTED IN U.S.A.
<PAGE>
[LOGO] 39 Old Ridgebury Road, Danbury, CT, 06810-5113
H. William Lichtenberger
Chairman & Chief Executive Officer
Dear Praxair Shareholder:
You are cordially invited to attend our 1998 Annual Meeting of
Shareholders at 9:30 A.M. on Tuesday, April 28, 1998. The meeting will be held
in the Grand Ballroom of the Danbury Hilton and Towers, 18 Old Ridgebury Road,
Danbury, Connecticut. Directions to the meeting are on the reverse side.
You will find information about the meeting in the enclosed Notice and
Proxy Statement. Your participation at the meeting, either through return of
your proxy or your attendance, is important. Four directors are standing for
election at this meeting. Please return your proxy card promptly.
If you do plan to attend, please so indicate by checking the
appropriate box on the proxy card.
Whether or not you plan to attend, I encourage you to please complete,
sign and date the proxy/voting instruction card below, detach it from this
letter and return it in the postage paid envelope enclosed in this package.
Sincerely,
March 6, 1998
| DETACH PROXY CARD HERE |
v v
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
<PAGE>
[LOGO]
ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 1998 AT 9:30AM
DANBURY HILTON AND TOWERS
DANBURY, CT
Directions:
From New Jersey:
Danbury is about one hour from the Tappan Zee Bridge. After crossing the bridge,
follow signs to New England and the Cross-Westchester Parkway (I-287). From
I-287, take I-684 North towards Brewster. Take Exit 9E (I-84 East to Danbury).
Get off I-84 at Exit 2 (Mill Plain Road). Go to the bottom of the ramp and turn
left, go to the second light and turn right, go to the next light, turn right
(Old Ridgebury Road) and go up the hill. The Hilton is on your left.
From Boston:
Take Massachusetts Turnpike (Route 90) to Sturbridge, Exit 9. Proceed onto I-84
West through Hartford and Waterbury to Danbury. Take Exit 2A (Old Ridgebury
Road). The exit ramp circles around and over the highway. The Hilton is on your
left.
From Hartford:
Take I-84 West towards Waterbury/Danbury. Take Exit 2A (Old Ridgebury Road). The
exit ramp circles around and up over the highway. The Hilton is on your left.
From New Haven:
Take Route 34 West to Newtown where you pick up I-84 West to Danbury. Take Exit
2A (Old Ridgebury Road). The exit ramp circles around and up over the highway.
The Hilton is on your left.
From White Plains/Westchester
Take I-684 North towards Brewster and proceed to Exit 9E (I-84 East to Danbury).
Get off I-84 at Exit 2 (Mill Plain Road). Go to the bottom of the ramp and turn
left, go to the second light and turn right, go to the next light, turn right
(Old Ridgebury Road) and go up the hill. The Hilton is on your left.
From NY City Airports & Long Island:
Follow signs to Whitestone Bridge. Cross over bridge and bear left onto the
Hutchinson River Parkway to White Plains and I-684 North towards Brewster. Take
Exit 9E (I-84 East to Danbury). Get off I-84 at Exit 2 (Mill Plain Road). Go to
the bottom of the ramp and turn left, go to the second light and turn right, go
to the next light, turn right (Old Ridgebury Road) and go up the hill. The
Hilton is on your left.
Airport Arrival:
From the Ground Transportation Center for Connecticut Limousine Service to
Danbury. At the Danbury depot, call the Danbury Hilton and they will provide
shuttle service for you.
There is no limo service to Danbury from Westchester Airport (White Plains, NY)
or Windsor-Bradley Airport (Hartford, CT).
| DETACH PROXY CARD HERE |
v v
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(Reverse side of Chairman's letter)
-2-
<PAGE>
================================================================================
[LOGO]
PROXY/VOTING INSTRUCTION CARD
- --------------------------------------------------------------------------------
This proxy is solicited on behalf of the Board of Directors of Praxair, Inc.
for the Annual Meeting on April 28, 1998
I(we) hereby authorize John A. Clerico, G.Jackson Ratcliffe, Jr. and David H.
Chaifetz, or any of them, and each with the power to appoint his substitute, to
vote as Proxy for me(us) at the Annual Meeting of Shareholders to be held at The
Danbury Hilton and Towers, 18 Old Ridgebury Road, Danbury, Connecticut on April
28, 1998 at 9:30 A.M., or any adjournment thereof, the number of shares which
I(we) would be entitled to vote if personally present. The proxies shall vote
subject to the directions indicated on the reverse side of this card and proxies
are authorized to vote in their discretion upon such other business as may
properly come before the meeting and any adjournments thereof. The proxies will
vote as the Board of Directors recommends where I (we) do not specify a choice.
For Participants in the Praxair, Praxair Distribution, Praxair Puerto Rico,
Union Carbide, UCAR or OSi Savings Programs: As to those shares of Praxair,
Inc., if any, that are held for me in the aforementioned Savings Programs, I
instruct the Trustee of the applicable Savings Program to sign a proxy for me in
substantially the form set forth above and on the reverse side. The Trustee
shall mark the proxy as I specify. Where I do not specify a choice, my shares
will be voted in the same proportion as the trustee votes the shares for which
it receives instructions.
PRAXAIR, INC.
P. O. BOX 11140
NEW YORK, NY 10203-0140
(Continued and to be dated and
signed on the reverse side)
================================================================================
-4-
<PAGE>
================================================================================
1. Election of Directors
FOR all nominees / / WITHHOLD AUTHORITY to vote / / *EXCEPTIONS / /
listed below for all nominees listed below
The Board of Directors recommends a vote "FOR" the nominees listed below:
Nominees: Alejandro Achaval, Ronald L. Kuehn, Jr., H. William Lichtenberger and
H. Mitchell Watson, Jr.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below.
Such a mark will be deemed a vote "FOR" all nominees other than those listed as
exceptions.)
*Exceptions:
--------------------------------------------------------------------
================================================================================
================================================================================
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
================================================================================
====================================================
Check here if you
Plan to attend the Annual Meeting / /
Have written comments or change / /
of address on this card
====================================================
Please sign name exactly as it appears on this card.
Joint owners should each sign. Attorneys, trustees,
executors, administrators, custodians, guardians or
corporate officers should give full title.
DATED:
----------------------------------
SIGNED
----------------------------------
----------------------------------
Vote MUST be indicated
(X) in Black or Blue Ink / /
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope
- --------------------------------------------------------------------------------
-3-
