Exhibit 10.06


 


Amended and Restated


As of January 1, 2005


PRAXAIR, INC.


DIRECTOR’S FEES DEFERRAL
PLAN


 


THIS
DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933.


 


Section
1.  Purpose, Participation


 


(a)           Purpose: The purpose of this
Director’s Fees Deferral Plan (the “Plan”) is to enable Praxair, Inc. (the “Corporation”)
to attract and retain Directors of outstanding ability by providing them with a
mechanism to defer and accumulate Director’s fees, meaning (1) the retainer,
(2) fees for attendance at meetings of the Board of Directors and Board
committees of the Corporation, (3) fees for additional or special services as
Directors and (4) other compensatory payments made to Directors by the Corporation
in connection with their service as Directors.


 


(b)           Participation:  This Plan extends to Directors of the
Corporation not employed by the Corporation or any subsidiary.


 


Section
2.  Payment of Deferred Amounts


 


(a)           Deferral Election:  At any time prior to the beginning of a
calendar year, a Director may elect that all or any specified portion of the
Director’s fees to be earned during such calendar year be credited to a
Director’s Cash Account and/or a Director’s Stock Unit Account maintained on
such Director’s behalf in lieu of payment (a “Deferral Election”).  A Director may also make a Deferral Election
during the 30 days following the date on which a Director first becomes
eligible to receive Director’s fees, although any Deferral Election made
pursuant to this sentence will apply only to all or any specified portion of
the Director’s fees earned thereafter. 
Each Deferral Election must be submitted to the Secretary of the
Corporation in writing, and will be deemed to authorize deferral to only a
Director’s Cash Account except to the extent deferral to a Director’s Stock
Unit Account is expressly specified.


 


(b)           Effect of Deferral Election:  Pursuant to such Deferral Election, the
Corporation (i) will not pay the Director’s fees covered thereby and (ii) will
make payments in accordance with the Deferral Election and this Section 2.


 


(c)           Payment Commencement Event.  At the time of making the Deferral Election,
a Director will designate as a “Payment Commencement Event” either (1) the termination of the Director’s service as a Director
of the Corporation (or any successor) or (2) the Director’s


 


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attainment of an age, not to exceed 75, specified by the
Director. A Director may also elect that, notwithstanding any other election
made by him pursuant to this Section 2, in the event that the Director
terminates service as a Director of the Corporation within one year following a
“Change of Control” (as defined in Section 5(h)), the Payment Commencement Event
for payments from a deferral 
account will be the termination of the Director’s service as a
Director.


 


(d)           Payment.  Payment of amounts deferred pursuant to the
Deferral Election will commence on the last business day of the calendar
quarter in which the Payment Commencement Event (either as originally
designated or as deferred pursuant to clause (1)
of Section 2(e)) occurs.  Payments from a
deferral account will be made in a lump sum (in cash or stock as provided in
this Plan) unless a timely election of an installment payment schedule pursuant
to clause (2) of Section 2(e) has been made.


 


(e)           Additional Deferrals.  A Director may also (1) elect to defer the
Payment Commencement Event to a later date specified by the Director (but not
later than attainment of age 75), and/or (2), for Payment
Commencement Events other than a Change of Control, elect that (i) payment from
the Director’s Cash Account be made in a number of approximately equal annual
cash installments, and/or (ii) payment from the Director’s Stock Unit Account
be made in a number of annual installments, each of an approximately equal
number of Stock Units. Such installment payments shall be made over a period of
time specified by the Director, but not to exceed 15 years.  Such elections may be made at any time until
12 months before the Payment Commencement Event designated pursuant to Section
2(c) and must provide for an additional deferral period of at least five years
from the previous Payment Commencement Event. Each such election must be
submitted to the Secretary of the Corporation in writing.  A Director may make no more than one election
pursuant to clause (1) in any
calendar year.  An election of an
installment payment schedule pursuant to clause (2)
is irrevocable except as provided in Section 2(g).


 


(f)            Renewal of Elections.  Once a Deferral Election and designation of a
Payment Commencement Event has been made, it will be automatically applied to
Director’s fees earned in all subsequent calendar years unless the Director
changes or revokes either such election or designation.  Each such change or revocation must be
submitted to the Secretary of the Corporation in writing.  However, except as provided in Section 2(e),
each Deferral Election and


 


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designation of Payment Commencement Event is irrevocable as
to Director’s fees earned prior to the calendar year next following any change
or revocation.


 


(g)           Renewal of Installment Election.  An election of an installment payment
schedule will automatically apply to amounts credited to a deferral account in
each succeeding calendar year unless, prior to the commencement of such
calendar year, the Director elects to change or revoke such installment payment
schedule election, in which case his/her new election will control only with
respect to amounts credited during calendar years following such new election.


 


(h)           Disability.  In the event a Director becomes disabled, the
payment commencement date and/or payment schedule with respect to a balance in
a deferral account may be accelerated by the Plan Committee, in its sole
discretion.  ‘Disabled’ means unable to
engage in any substantial gainful activity because of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of twelve (12) months or longer.


 


(i)            Death.  A Director may designate a beneficiary (and
change such beneficiary, from time to time) for payment of any balance of the
deferral account at the Director’s death. 
Upon a Director’s death, any balance in the deferral account (including
amounts credited to such account as specified in Section 3(b) and
Section 4(b)) will be paid to the deceased Director’s beneficiary at the end of
the first calendar quarter which ends at least 30 days after the Director dies.
If no beneficiary has been designated, the Director’s estate will be deemed the
beneficiary, and any payments pursuant to this Section 2(i) will be paid,
either at the end of the first calendar quarter which ends at least 30 days
after appointment of the deceased Director’s legal representative, or such
earlier date as may be determined by the Plan Committee, in its sole
discretion.


 


(j)            Mandatory Deferrals.   The Board of Directors may, from time to
time, determine that certain payments made to Directors shall be mandatorily
deferred under this Plan.  If, in
conjunction with such determination, the Board specifies the deferral account(s)
to which such payment shall be credited or the Payment Commencement Event
applicable to such deferral, then such specifications shall be applied to the
deferral as if the recipient Director had made a timely Deferral Election with
respect to such payment under Section 2(a) and had designated a Payment
Commencement Event under Section 2(c). 
With respect to any such mandatory deferral, the


 


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Board
may also specify restrictions on changes or revocations of Deferral Elections
(or deemed Deferral Elections) and Payment Commencement Event designations
under Section 2(f), in which event Section 2(f) shall be inoperative as to such
mandatory deferral to the extent of the specified restrictions.


 


Section 3.  Credits and Debits to Director’s Cash Account


 


(a)           Principal.  The Corporation will create and maintain on
its books a Director’s Cash Account for each Director who has made a Deferral
Election to such an account under Section 2(a). 
The Corporation will credit to such account the amount of any Director’s
fee which would have been paid to the Director but for such Deferral Election,
as of the date the fee would have otherwise been payable.


 


(b)           Interest.  At the end of each calendar quarter,
regardless of whether any other credits are then made to the Director’s Cash
Account or whether the Director is then a Director,  the Corporation will also credit to the
Director’s Cash Account a sum which is equal to the product of (i) the average daily balance in the Director’s Cash Account
for the quarter (without regard to any debits made at the end of such quarter),
times (ii) one-fourth of the annual Base Rate
(prime rate) for corporate borrowers quoted by J. P. Morgan Chase (or
any successor thereto) of New York  as of
the first business day of the quarter.


 


(c)           Debits.  At the end of each calendar quarter, the
Corporation will make a payment if required under the payment schedule for such
Director’s Cash Account and will debit the Director’s Cash Account for the
amount thereof.  Payment with respect to
a Director’s Cash Account will be in cash only.


 


(d)           Mid-quarter Payments.  If Payment is to be made other than at the
end of a calendar quarter in accordance with a determination pursuant to
Section 2(h) or to Section 2(i), prior to such payment, the Corporation will
credit to the Director’s Cash Account an amount equal to the product of (i) the average daily balance In the Director’s Cash Account
for the period from the beginning of the calendar quarter to the date of
payment (without regard to any debits to be made upon such payment), times (ii) a fraction of the annual Base Rate (prime rate)  for corporate borrowers quoted by J. P.
Morgan Chase (or any successor thereto) as of the first business day of the
quarter, the numerator of which is the number of days in the period described
in clause (i), and the denominator of which is 365.


 


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Section 4.  Credits and Debits to Director’s Stock Unit
Account


 


(a)           Stock Units.  The Corporation will create and maintain on
its books a Director’s Stock Unit Account for each Director who has made a
Deferral Election under Section 2(a) and expressly specifies deferral to such
an account.  The Corporation will credit
to such account the number of Stock Units equal to the number of shares of the
Corporation’s common stock that could be purchased with the amount of any
Director’s fee which would have been paid to the Director but for such Deferral
Election, as of the date the fee would have otherwise been payable.  The number of Stock Units will be calculated
to three decimals by dividing the amount of the Director’s fee as to which a
Director’s Stock Unit Account Deferral Election was made by the closing price
of the Corporation’s common stock as reported on the New York Stock Exchange as
of the date the fee would have otherwise been payable.


 


(b)           Dividends.  As of the date any dividend is paid to
holders of shares of the Corporation’s common stock, each Director’s Stock Unit
Account, regardless of whether the Director is then a Director, will be
credited with additional Stock Units equal to the number of shares of the
Corporation’s common stock that could have been purchased with the amount which
would have been paid as dividends on that number of shares (including fractions
of a share to three decimals) of the Corporation’s common stock equal to the
number of Stock Units attributed to such Director’s Stock Account as of the
record date applicable to such dividend. 
The number of additional Stock Units to be credited will be calculated
to three decimals by dividing the amount which would have been paid as
dividends by the closing price of the Corporation’s common stock as reported on
the New York Stock Exchange as of the date the dividend would have been
paid.  In the case of dividends paid in
property other than cash, the amount of the dividend shall be deemed to be the
fair market value of the property at the time of the payment of the dividend,
as determined in good faith by the Plan Committee.


 


(c)           Debits and Calculation of Payments.  The Corporation will debit the Director’s
Stock Unit Account for Stock Units as required under the payment schedule for
such Director’s Stock Unit Account. 
Payment with respect to whole Stock Units will be in shares of the
Corporation’s common stock only, at the rate of one share of common stock per
Stock Unit.  Until such time as shares
have been listed on The New York Stock Exchange for issuance under this Plan,
only Treasury shares shall be used for such payment.  With respect to fractional Stock Units,
payment will be made in cash only, and calculated by multiplying the fractional
number of


 


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the
Stock Unit to be debited by the closing price of the Corporation’s common stock
as reported on the New York Stock Exchange as of the last business day of the
week preceding the week of the date the Stock Units are payable.  Should payment with respect to Stock Units be
made after the record date, but before the payment date applicable to a
dividend paid to holders of shares of the Corporation’s common stock, Stock
Units credited a Director’s Stock Unit Account in consequence of such dividend
payment will be calculated as cash payments and paid within thirty days of such
credit.


 


(d)           Adjustment.  If at any time the number of outstanding
shares of the Corporation’s common stock is increased as the result of any
stock dividend, stock split, subdivision or reclassification of shares, the
number of Stock Units with which each Director’s Stock Unit Account is credited
will be increased in the same proportion as the outstanding number of shares of
the Corporation’s common stock is increased. 
If the number of outstanding shares of common stock is decreased as the
result of any combination, reverse stock split or reclassification of shares,
the number of Stock Units with which each Director’s Stock Unit Account is
credited will be decreased in the same proportion as the outstanding number of
shares of the Corporation’s common stock is decreased.  In the event the Corporation is consolidated
with or merged into any other corporation and holders of shares of the
Corporation’s common stock receive shares of the capital stock of the resulting
or surviving corporation, there shall be credited to each Director’s Stock Unit
Account, in lieu of the extant Stock Units, new Stock Units in an amount equal
to the product of the number of shares of capital stock exchanged for one share
of the Corporation’s common stock upon such consolidation or merger, and the
number of Stock Units with which such account then is credited.  If, in such a consolidation or merger,
holders of shares of the Corporation’s common stock receive any consideration
other than shares of the capital stock of the resulting or surviving
corporation or its parent corporation, the Plan Committee will determine any
appropriate change in Director’s Stock Unit Accounts.


 


Section 5.  Unfunded Arrangement


 


(a)           Neither this Plan nor any deferral
account will be funded; a deferral account and all entries thereto constitute bookkeeping
records only and do not relate to any specific funds or shares of the
Corporation.  Payments due with respect
to balances in a deferral account will be made from the general assets of the
Corporation, and the right of any participant to receive future payments under
this Plan’s provisions will be an unsecured claim against such assets.


 


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Section 6.  Administration


 


(a)           Plan Committee.  The Plan will be administered by a Plan
Committee, which will be the Governance and Nominating Committee of the Board
of Directors of the Corporation, or such other Committee as may be appointed by
the Board of Directors of the Corporation, and may include Directors who have
elected to participate in the Plan.  No
member of the Plan Committee will be liable for any act done or determination
made in good faith.


 


(b)           Committee Determination Final.  The construction and interpretation of any
provision of the Plan by the Plan Committee, and a determination by the Plan
Committee of the amount of any deferral account, will be final and conclusive.


 


(c)           Amendments.  The Corporation, subject to approval of its
Board of Directors, reserves the right to terminate, modify or amend this Plan,
effective prospectively as of the first day of any calendar quarter; provided,
however, that the Plan will not be subject to termination, modification or
amendment with respect to any balance of a deferral account and rights therein,
including the right to future interest pursuant to Section 3(b) and future
dividends pursuant to Section 4(b), unless the affected Director consents.


 


(d)           Non-Alienation.  No Director (or estate of a Director) will
have power to transfer, assign, anticipate, mortgage or otherwise encumber any
rights or any amounts payable hereunder; nor will any such rights or payments
be subject to seizure for the payment of any debts, judgments, alimony, or
separate maintenance, or be transferable by operation of law in the event of
bankruptcy, insolvency, or otherwise.


 


(e)           Expenses.  The expenses of administering the Plan will
be borne by the Corporation and not be charged against any deferral account.


 


(f)            Withholding.  The Corporation may deduct from all cash
payments any taxes required to be withheld with respect to such payments.  In order to enable the Corporation to meet
any applicable federal, state or local withholding tax requirements arising as
a result of payments made hereunder in the form of stock, a Director shall pay
the Corporation the amount of tax to be withheld or may elect to satisfy such
obligation by having the Corporation withhold shares that otherwise would be
delivered to the Director pursuant to the deferral account payment for which
the tax is being withheld, by delivering to the Corporation other shares of
common


 


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stock of the Corporation owned by the Director prior
to the payment date, or by making a payment to the Corporation consisting of a
combination of cash and such shares of common stock.  Such an election shall be made prior to the
date to be used to determine the tax to be withheld.  The value of any share of common stock to be
withheld by, or delivered to, the Corporation pursuant to this Section 6(f)
shall be the closing price of the Corporation’s common stock as reported on the
New York Stock Exchange on the date to be used to determine the amount of tax
to be withheld.


 


(g)           Effect of IRS Determination.  If any amounts deferred pursuant to the Plan
are found in a “determination” (within the meaning of Section 1313(a) of the
Internal Revenue Code of 1986, as amended) to have been includible in gross
income by a Director prior to payment of such amounts from his/her deferral
account, such amounts will be immediately paid to such Director, notwithstanding
elections pursuant to Section 2.


 


(h)           Change of Control.  A “Change of Control” means the occurrence of
any one of the following events with respect to the Corporation:


 


(i) individuals who, on January 1, 2005, constitute the Board
(the“Incumbent Directors”) cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to January 1, 2005, whose election or nomination for election was approved by a
vote of at least a majority of the Incumbent Directors then on the Board
(either by a specific vote or by approval of the proxy statement of the
Corporation in which such person is named as a nominee for director, without
objection to such nomination) shall be an Incumbent Director;


 


(ii)           any “person”
(as such term is defined in Section 3(a)(9) of the Securities Exchange Act of
1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act) is or becomes owner, as defined in IRS Code Section 318(a), of
securities of the Corporation representing 35% or more of the combined voting
power of the Corporation’s then outstanding securities eligible to vote for the
election of the Board (the “Company Voting Securities”); provided, however,
that the event described in this paragraph (ii) shall not be deemed to be a
Change in Control by virtue of any of the following acquisitions:  (A) by the Corporation or any subsidiary, (B)
by any employee benefit plan sponsored or maintained by the Corporation or
subsidiary, (C) by any underwriter temporarily holding securities  pursuant to an offering of such securities;


 


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(iii)         any person, (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934 (the “Exchange Act”) and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act), acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person) assets from the Corporation that have a total gross fair market
value equal to or more than 40 percent of the total gross fair market value of
all of the assets of the Corporation immediately prior to such acquisition(s);
provided, however, that a transfer of assets by the Corporation is not treated
as a Change in Control if the assets are transferred to (A) a shareholder of
the Corporation (immediately before the asset transfer) in exchange for or with
respect to its stock; (B) an entity, 50 percent or more of the total value or
voting power of which is owned, directly or indirectly, by the Corporation; (C)
a person, or more than one person acting as a group, that owns, directly or
indirectly, 50 percent of more of the total value or voting power of all
outstanding stock of the Corporation; or (D) an entity, at least 50 percent of
the total value or voting power of which is owned, directly or indirectly, by a
person described in the previous subsection (C).  For purposes of this paragraph, (1) gross
fair market value means the value of the assets of the Corporation, or the value
of the assets being disposed of, determined without regard to any liabilities
associated with such assets, and (2) a person’s status is determined
immediately after the transfer of the assets.


 


(i)            Stock Unit Status.  Stock Units are not, and do not constitute,
shares of the Corporation’s common stock, and no right as a holder of shares of
the Corporation’s common stock devolves upon a Director by reason of
participation in this Plan.


 


IN
WITNESS WHEREOF, Praxair, Inc. has caused this document to be executed as of
the 1st day of January, 2005.


 


 


	
   

  	
  PRAXAIR,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James T. Breedlove

  	
   

  
	
   

  	
  James
  T. Breedlove

  
	
   

  	
  Vice
  President, General Counsel and

  Secretary

  



 


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