Edgar Filing: PRAXAIR INC

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant / /
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12

PRAXAIR, INC.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.

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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

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[PRAXAIR LOGO]

39 Old Ridgebury Road
Danbury, Connecticut 06810-5113

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 2001

Dear Praxair Shareholder:

The Annual Meeting of Shareholders of Praxair, Inc. will be held at 9:30
a.m. on Tuesday, April 24, 2001 in the Grand Ballroom of the Sheraton Danbury
(formerly the Danbury Hilton and Towers), 18 Old Ridgebury Road, Danbury,
Connecticut, for the following purposes:

1. To elect three directors to the Board of Directors.

2. To approve the Corporation's 2002 Long Term Incentive Plan.

3. To approve the Corporation's Plan for Determining Performance-Based
Awards under Section 162(m).

4. 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 February 26, 2001 will be entitled to vote at the meeting or any
adjournment thereof.

It is important that your shares be represented and voted at the meeting.
You may vote your shares by means of a proxy form using one of the following
methods:

1. ELECTRONICALLY ON THE INTERNET (if instructions for this method are
included in this package), OR

2. BY TELEPHONE (if instructions for this method are included in this
package), OR

3. By signing and dating the PROXY/VOTING INSTRUCTION CARD enclosed in
this package and returning 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.

We encourage you to complete and file your proxy electronically or by
telephone (if those options are available to you) as a means of REDUCING THE
COMPANY'S EXPENSES related to the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

DAVID H. CHAIFETZ,
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY

March 1, 2001

PROXY STATEMENT
TABLE OF CONTENTS

MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING Page

Item 1: Election of Directors 1
Item 2: Approval of the 2002 Praxair, Inc. Long Term Incentive Plan 1
Item 3: Approval of the Praxair, Inc. Plan for Determining
Performance-Based Awards under
Section 162(m) 2
Item 4: Other Business 2

PROXY AND VOTING PROCEDURES 3

HOW TO RECEIVE YOUR ANNUAL REPORT AND PROXY STATEMENT ON-LINE 4

SHARE OWNERSHIP
Principal Holders 5
Directors and Executive Officers 5
Executive Stock Ownership Guidelines 6

THE BOARD OF DIRECTORS
Director Attendance 7
Director Compensation 7
The Directors 8

EXECUTIVE OFFICERS 11

COMMITTEES OF THE BOARD
(See also "The Audit Committee & the Independent Accountants")
(See also "The Compensation & Management Development Committee &
Executive Compensation")
Finance and Pension Committee 12
Public Policy and Nominating Committee 12

THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
& EXECUTIVE COMPENSATION
The Compensation and Management Development Committee 13
The Committee's Report on Executive Compensation 14
Table 1: Summary Compensation Table 17
Table 2: Option Grants in Last Fiscal Year 18
Table 3: Aggregated Option Exercises in Last Fiscal
Year and FY-End Option Values 18
Defined Benefit or Actuarial Plans 19
Employment Contracts and Termination of
Employment and Change in Control Arrangements 19
SHAREHOLDER RETURN (Performance Graph) 20

THE AUDIT COMMITTEE & THE INDEPENDENT ACCOUNTANTS
The Audit Committee 21
The Independent Accountants 21
Audit Fees 21
Financial Information Systems Design & Implementation Fees 21
All Other Fees 21
The Audit Committee Report 22

2002 PRAXAIR, INC. LONG TERM INCENTIVE PLAN 23

PRAXAIR, INC. PLAN FOR DETERMINING PERFORMANCE-BASED AWARDS
UNDER SECTION 162(m) 26

MISCELLANEOUS
Section 16(a) Beneficial Ownership Reporting Compliance 29
Shareholder Proposals for the 2002 Annual Meeting 29
Annual Reports 29
Cost of Proxy Solicitation 29

EXHIBITS
A. Audit Committee Charter
B. 2002 Praxair, Inc. Long Term Incentive Plan
C. Praxair, Inc. Plan for Determining Performance-Based
Awards under Section 162(m)

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

TUESDAY, APRIL 24, 2001

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 Sheraton Danbury (formerly the Danbury Hilton and
Towers), 18 Old Ridgebury Road, Danbury, Connecticut on April 24, 2001, 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 14, 2001. The enclosed proxy is solicited on behalf of the Board of
Directors of Praxair.

MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING

ITEM 1: ELECTION OF DIRECTORS

Three 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. Three of them have been nominated for reelection.
The fourth, C. Fred Fetterolf, is retiring from the Board as a result of the
Board's tenure policy.

YOUR BOARD OF DIRECTORS RECOMMENDS THAT ALEJANDRO ACHAVAL, RONALD L. KUEHN,
JR. AND H. MITCHELL WATSON, JR. BE ELECTED TO SERVE IN THE CLASS WITH TERMS
EXPIRING IN 2004. 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 at page 7 of this Proxy Statement
under the caption "The Board of Directors".

Unless you otherwise direct on the proxy form (whether by Internet,
telephone or mail), the proxy holders intend to vote your shares 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 your 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: APPROVAL OF THE 2002 PRAXAIR, INC. LONG TERM INCENTIVE PLAN

The plan here submitted for the shareholders' approval is intended to
replace the existing 1992 Praxair, Inc. Long Term Incentive Plan which, by its
terms, expires on December 31, 2001. The Board of Directors has adopted the 2002
Praxair, Inc. Long Term Incentive Plan to take effect on January 1, 2002. This
plan is used to grant long term incentives such as stock options and multi-year
performance awards to the Corporation's officers and other employees.

Multi-year performance awards granted under the plan that are intended to
qualify as "performance-based" compensation under Internal Revenue Code Section
162(m) (thereby being eligible for exemption from the deduction limit set forth
in that Section) will be administered according to the Praxair, Inc. Plan for
Determining

Performance-Based Awards under Section 162(m), which plan is also being
submitted for the shareholders' approval at this meeting.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE 2002
PRAXAIR, INC. LONG TERM INCENTIVE PLAN. Unless otherwise directed on the proxy
form, the proxy holders intend to vote in favor of adoption of this plan.
Approval requires the affirmative vote of a majority of votes cast on the
matter.

A summary of the 2002 Praxair, Inc. Long Term Incentive Plan is presented
at page 23 of this Proxy Statement under the caption "2002 Praxair, Inc. Long
Term Incentive Plan". The full text of the plan is attached to this Proxy
Statement as Exhibit B.

ITEM 3: APPROVAL OF THE PRAXAIR, INC. PLAN FOR DETERMINING
PERFORMANCE-BASED AWARDS UNDER SECTION 162(m)

At the 1996 Annual Meeting, the shareholders approved the Praxair, Inc.
Senior Executive Performance Award Plan. This plan is used to administer and
determine certain awards to senior officers so as to qualify the compensation as
"performance-based" under regulations issued under Internal Revenue Code Section
162(m). Such "performance-based" compensation is exempt from the deduction
limitation of Section 162(m) and, thus, will be fully deductible by the
Corporation for tax purposes.

Internal Revenue Service regulations require that this plan be resubmitted
for shareholder approval in the fifth year following the original approval.
Although the plan has been given a more descriptive name, the material terms of
the plan are unchanged from those approved by the shareholders in 1996.

The plan does not, in itself, authorize any payments or the issuance of any
shares for any award. Rather, the plan provides only for the administration and
determination of certain awards to be granted under other of the Corporation's
compensation plans or programs, including the 2002 Praxair, Inc. Long Term
Incentive Plan also submitted here for shareholder approval.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PRAXAIR,
INC. PLAN FOR DETERMINING PERFORMANCE-BASED AWARDS UNDER SECTION 162(m). Unless
otherwise directed on the proxy form, the proxy holders intend to vote in favor
of adoption of the Plan. Approval requires the affirmative vote of a majority of
the votes cast on the matter.

A summary of the Praxair, Inc. Plan for Determining Performance-Based
Awards under Section 162(m) is presented at page 26 of this Proxy Statement
under the caption "Praxair, Inc. Plan for Determining Performance-Based Awards
under Section 162(m)". The full text of the plan is attached to this Proxy
Statement as Exhibit C.

ITEM 4: 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 your shares in
accordance with their best judgment.

PROXY AND VOTING PROCEDURES

SHAREHOLDERS ENTITLED TO VOTE

Shareholders of record at the close of business on February 26, 2001 will
be entitled to vote at the Annual Meeting. As of that date, a total of
160,304,559 shares of Praxair's Common Stock were outstanding. Each share of
Common Stock is entitled to one vote.

FILING OF PROXIES

Your vote is important. Because many shareholders cannot attend the Annual
Meeting in person, it is necessary that a large number be represented by proxy.
Most shareholders have a choice of voting over the Internet, by using a
toll-free telephone number or by completing a proxy card and mailing it in the
postage-paid envelope provided. Check your proxy card or the information
forwarded by your bank, broker or other holder of record to see which options
are available to you. Please be aware that, if you vote over the Internet, you
may incur costs such as telecommunication and Internet access charges for which
you will be responsible.

The Internet and telephone voting procedures are designed to authenticate
shareholders by use of a Control Number and to allow shareholders to confirm
that their instructions have been properly recorded.

VOTING OF PROXIES

All shares entitled to vote and be represented by a properly completed
proxy (either by Internet, telephone or mail) will be voted at the Annual
Meeting as indicated on the proxy unless earlier revoked by you. If no
instructions are indicated for a matter on a properly completed proxy, the
shares represented by that proxy will be voted on that matter as recommended by
the Board of Directors. If a proxy is returned by mail unsigned, it will also be
voted as recommended by the Board of Directors. Execution of the proxy also
confers discretionary authority to the proxy holder to vote your shares on other
matters that may properly come before the meeting.

REVOCATION OF PROXY

You may revoke your proxy at any time before it is voted by filing with
Praxair's Secretary a written revocation, by timely delivery of a properly
completed, later-dated proxy (including by Internet or telephone), or by voting
in person at the Annual Meeting.

VOTING AT THE ANNUAL MEETING

The method by which you vote will in no way limit your right to vote at the
Annual Meeting if you later decide to attend in person. If your shares are held
in the name of a bank, broker or other holder of record, you must obtain a
proxy, executed in your favor, from the holder of record, to be able to vote at
the Annual Meeting.

VOTE REQUIRED

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 filed 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, under Delaware Corporation Law and Securities and
Exchange Commission rules, broker non-votes are deemed to not be entitled to
vote on the matter.

HOW TO RECEIVE YOUR ANNUAL REPORT AND
PROXY STATEMENT ON-LINE

SAVE PRAXAIR FUTURE POSTAGE AND PRINTING EXPENSE by consenting to receive
future annual reports and proxy statements on-line on the Internet.

Most shareholders can elect to view future proxy statements and annual
reports over the Internet instead of receiving paper copies in the mail. Those
shareholders will be given the opportunity to consent to future Internet
delivery when they vote their proxy. (For some shareholders, this option is only
available if you vote by Internet.)

If you are not given an opportunity to consent to Internet delivery when
you vote your proxy, contact the bank, broker or other holder of record through
which you hold your shares and inquire about the availability of such an option
for you.

If you consent, your account will be so noted and, when Praxair's 2001
Annual Report and the Proxy Statement for the 2002 Annual Meeting of
Shareholders become available, you will be notified on how to access them on the
Internet. Any prior consent you have given will remain in effect until
specifically revoked by you in the manner specified by the bank or broker that
manages your account.

If you do elect to receive your Praxair materials via the Internet, you can
still request paper copies by contacting the Assistant Corporate Secretary at
Praxair, Inc., 39 Old Ridgebury Road, M1, Danbury, CT 06810-5113.

SHARE OWNERSHIP

PRINCIPAL HOLDERS

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:

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Name and Address of Number of Shares Percent of Shares
Beneficial Owner Beneficially Owned Outstanding(a)
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FMR Corp. 23,769,089(b) 15.0%
82 Devonshire Street, Boston, MA 02109
AXA Financial, Inc.(c) 9,689,494(d) 6.1%
1290 Avenue of the Americas, New York, NY 10104
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Notes: (a) Based on 159,251,526 total shares outstanding on December 31,
2000.

(b) Holdings as of December 31, 2000 as reported in SEC Schedule 13G
by FMR Corp. According to this report, FMR Corp. had sole voting power as to
2,135,154 shares and sole investment power as to 23,769,089 shares.

(d) Holdings as of December 31, 2000 as reported in SEC Schedule 13G
by AXA Financial, Inc. on behalf of itself, its subsidiaries and other related
companies. According to this report, AXA Financial, Inc. had sole voting power
as to 4,745,107 shares, sole investment power as to 9,689,494 shares and shared
voting power as to 1,116,054 shares.

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DIRECTORS AND EXECUTIVE OFFICERS

As of January 31, 2001, 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 0.9% of the outstanding shares.

H. William Lichtenberger Former Chairman and Chief 263,529 113,546 377,075 557,000
Executive Officer(4)

Dennis H. Reilley Chairman, President and 50,738 16,774 67,512 0
Chief Executive Officer(5)

Paul J. Bilek Executive Vice President 26,350 12,551 38,901 140,500

Thomas W. von Krannichfeldt Executive Vice President 10,227 13,427 23,654 43,000

Ricardo S. Malfitano Vice President, and 9,348 993 10,341 73,000
President, North American
Industrial Gases

David H. Chaifetz Vice President, 59,734 13,554 73,288 112,000
General Counsel
and Secretary

Alejandro Achaval Director 1,694 10,856 12,550 12,500
C. Fred Fetterolf Director 2,133 12,103 14,236 12,500
Dale F. Frey Director 1,628 1,851 3,479 12,500
Claire W. Gargalli Director 1,718 3,863 5,581 12,500
Ronald L. Kuehn, Jr. Director 5,301 11,052 16,353 12,500
Raymond W. LeBoeuf Director 1,000 7,598 8,598 10,000
Benjamin F. Payton Director 1,771 2,259 4,030 12,500
G. Jackson Ratcliffe, Jr. Director 1,771 18,017 19,788 12,500
H. Mitchell Watson, Jr. Director 1,759 7,042 8,801 12,500

Total 438,701 245,486 684,187 1,035,500

Directors & Executive (20 persons) 490,678 267,513 758,191 1,286,800
Officers as a group
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Notes: 1) Amounts reported as COMMON STOCK include 5,000 shares held by a
member of H. William Lichtenberger's family. Also included in the reported
amounts are 21,370 shares held by the Lichtenberger Foundation over which Mr.
Lichtenberger had shared voting and investment power. Reported shares also
include 25,000 restricted shares for which Mr. Reilley has sole voting power but
which vest in stages beginning in 2005.

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) STOCK OPTIONS represent shares that may be acquired upon exercise
of options exercisable within 60 days of February 26, 2001.

4) Effective March 6, 2000, Mr. Lichtenberger resigned his position as
Chief Executive Officer. He remained Chairman of the Board of Directors until
his retirement from the company on November 30, 2000.

5) Mr. Reilley was elected President and Chief Executive Officer and a
director of Praxair, Inc. effective March 6, 2000 and became Chairman as of
December 1, 2000.

EXECUTIVE STOCK OWNERSHIP GUIDELINES

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 types of risks as are 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, stock ownership guidelines have been established for the
Corporation's officers and senior managers as follows. 102 executives are
currently covered under this stock ownership policy. Individuals are expected to
meet the applicable guideline no more than 5 years after first becoming subject
to it.

Value of Shares Owned
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Chief Executive Officer 4.0x Base Salary
Chief Financial Officer 3.0x Base Salary
Other Executive Officers 1.5x Base Salary
Other Officers and Senior Managers 1.0x Base Salary

As of the date of this Proxy Statement, all covered individuals have met or
exceeded their guidelines, where permitted by law, or are within their 5 year
transition period. Stock ownership of the 5 most highly compensated executive
officers in 2000 can be found in the table presented at page 5 of this Proxy
Statement under the caption "Share Ownership". Upon joining Praxair, Mr. Reilley
purchased 16,000 shares of Praxair stock. Considering this and his subsequent
purchases, he is more than half way to the ownership guideline level for 5 years
of service.

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, performance stock grants
and stock options 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); and (4) a policy mandating either investment of at
least 20% of annual variable compensation in the recipient's DRISP account or
deferring such amount into "Deferred Stock" units.

THE BOARD OF DIRECTORS

The following pages present information about the persons who comprise
Praxair's Board of Directors; including the three nominees for reelection.
During 2000, the Board held eight meetings.

DIRECTOR ATTENDANCE

During his current term to date, each nominee for reelection attended Board
meetings and meetings of committees of which he is a member as follows: Mr.
Achaval, 100%; Mr. Kuehn, 98%; and Mr. Watson, 100%. During this same period,
the continuing directors collectively attended 97% 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 annualretainer 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.

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ALEJANDRO ACHAVAL Age 68

Director Since 1992 Term Expires 2001

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, the National Institute
of Technology (INTI), and FIPLASTO S.A.

Mr. Achaval is Chairman of FUNDES, a subsidiary of Nueva
A.G. (Switzerland), a director of Minetti S.A., a company
controlled by Holderbank A.G. (Switzerland), a director of
Praxair

Argentina S.A., an indirect subsidiary of Praxair, Inc. and
a director of the Fundacion Invertir, an Argentine
investment foundation.

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DALE F. FREY Age 68

Director Since 1993Term Expires 2002

Director of Various Corporations

Mr. Frey 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. He is a trustee of Franklin & Marshall
College and a member of the New York University Stern School
Advisory Board. He is also a member of the Forstmann Little
Company and the Aurora Capital Partners advisory boards.

Mr. Frey is also a director of After Market Technology
Corporation, Community Health Systems, Roadway Express,
Inc., and Goco-op.

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CLAIRE W. GARGALLI Age 58

Director Since 1992Term Expires 2003

Director of Various Corporations

Ms. Gargalli served as Vice Chairman, Diversified Search
Companies from 1990 to 1998.

Ms. Gargalli is a trustee of Carnegie Mellon University and
Middlebury College and she is also a director of Baker
Hughes, Inc. and UNOVA, Inc.

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RONALD L. KUEHN, JR. Age 65

Director Since 1992Term Expires 2001

Chairman of Various Corporations

Mr. Kuehn was Chairman, President and Chief Executive
Officer of Sonat Inc. from 1986 until its merger with El
Paso Energy Corporation in 1999. He served as Chairman of El
Paso Energy through 2000.

Mr. Kuehn is a trustee of Tuskegee University and is active
in numerous community and charitable organizations.

Mr. Kuehn is also a director of AmSouth Bancorporation, Dun
and Bradstreet Corporation, Protective Life Corporation and
Transocean Sedco Forex Inc.

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RAYMOND W. LEBOEUF Age 54

Director Since 1997Term Expires 2002

Chairman and Chief Executive Officer of PPG Industries, Inc. since 1997

In 1995, Mr. LeBoeuf 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 ITT Industries, Inc., 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.

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BENJAMIN F. PAYTON Age 68

Director Since 1992Term Expires 2002

President, Tuskegee University since 1981

Dr. Payton is a director of the National Action Council for
Minority Engineers. He is also on the Board of Directors of
the Tuskegee Chamber of Commerce and is on the Royal
Council, Alabama Shakespeare Festival.

Dr. Payton is also a director of AmSouth Bancorporation,
AmSouth Bank, Liberty Corporation, Morrison Management
Specialists, Inc. and Ruby Tuesday, Inc.

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G. JACKSON RATCLIFFE, JR. Age 64

Director Since 1992Term Expires 2003

Chairman, President and Chief Executive Officer of Hubbell Incorporated since
1987

Mr. Ratcliffe is also a director of Olin Corporation and
Sunoco, Inc.

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DENNIS H. REILLEY Age 48

Director Since 2000Term Expires 2003

Chairman, President and Chief Executive Officer of Praxair since 2000

Mr. Reilley assumed his current positions when he joined
Praxair in 2000. Beginning in 1989, he held senior
management positions in DuPont Co.'s Chemicals and
Specialties business including Vice President and General
Manager of Specialty Chemicals. In May 1999,

Mr. Reilley was appointed Executive Vice President and Chief
Operating Officer of DuPont with responsibility for Pigments
and Chemicals, Specialty Polymers, Nylon and Polyester.

Mr. Reilley is Chairman of the American Chemistry Council, a
member of the Business Roundtable and is on the Executive
Committee of the Society of Chemical Industry. He also is a
director of Entergy Corporation.

--------------------------------------------------------------------------------

H. MITCHELL WATSON, JR. Age 63

Director Since 1992Term Expires 2001

President, Sigma Group of America since 1992

Prior to his current position, Mr. Watson was President and
Chief Executive Officer of ROLM Company.

Mr. Watson is a Trustee of Helen Keller International.

Mr. Watson is also a director and the non-executive Chairman
of MAPICS, Inc., is Chairman of the Board of Identrus, LLC,
and a director of DDS power.com.

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, 53, is an Executive Vice President of Praxair. Mr. Bilek
served as President, North American Industrial Gases from 1996 to 1998, as Vice
President, North American Merchant Gases between 1995 and 1996, and as
President, Praxair Surface Technologies, Inc. between 1993 and 1995. He assumed
his current position in 1998.

David H. Chaifetz, 58, is Vice President, General Counsel and Secretary of
Praxair. He assumed his current positions in 1992 upon Praxair's launch as a
public company.

Ivan F. Garcia, 58, 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, the
International Oxygen Manufacturers Association, and the

Executive Board of Abiquim, the Brazilian Chemical Industries 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.

Ricardo S. Malfitano, 42, is a Vice President of Praxair, President, North
American Industrial Gases and President, Praxair Canada Inc. Mr. Malfitano
served as Chief Operating Officer of S.A. White Martins ("SAWM"), Praxair's
Brazilian subsidiary, from 1997 to 1998, as Director of SAWM's Brazilian
industrial gases business in 1996 and as Director, Electronic Gases for Praxair
from 1994 to 1996. He assumed his current positions in 1998.

Dennis H. Reilley, 48. See description under "The Board of Directors."

George P. Ristevski, 41, is a Vice President of Praxair and its Controller.
Mr. Ristevski joined Praxair from Electronic Data Systems, Inc. in 1995 to serve
as Director of Corporate Financial Planning and Analysis. In 1997 he was
designated Controller of Praxair Distribution, Inc. He assumed his current
positions in 2000.

James S. Sawyer, 44, is a Vice President of Praxair and its Chief Financial
Officer. Mr. Sawyer served as a Vice President of Praxair and as its Assistant
Treasurer and then Treasurer from 1992 upon Praxair's launch as a public company
until 2000. He was designated Chief Financial Officer in 2000.

Thomas W. von Krannichfeldt, 51, is an Executive Vice President of Praxair.
Mr. von Krannichfeldt also serves as President, Praxair Surface Technologies,
Inc. He assumed his current position in 1999.

Alan J. Westendorf, 57, is a Vice President of Praxair and President,
Praxair Europe. In 1996, Mr. Westendorf was designated the North American
Industrial Gases ("NAIG") Vice President-Sales and became an NAIG Senior Vice
President in 1998. From 1994 to 1996, he served as Director, Mergers and
Acquisitions for Praxair Distribution, Inc. He assumed his current positions in
1999.

Wayne J. Yakich, 43, is a Vice President of Praxair and President, Praxair
Distribution, Inc. He assumed his current position in 2000.

COMMITTEES OF THE BOARD

AUDIT COMMITTEE. See information at page 21 of this Proxy Statement under
the caption "The Audit Committee & The Independent Accountants".

COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE. See information at page
13 of this Proxy Statement under the caption "Compensation and Management
Development Committee & Executive Compensation".

FINANCE AND PENSION COMMITTEE. The Finance and Pension Committee is
comprised of Dale F. Frey as Chairman, Alejandro Achaval, Claire W. Gargalli,
Raymond W. LeBoeuf and Dennis H. Reilley. The Committee met two times during
2000. 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, Benjamin F. Payton and Dennis H. Reilley. The Committee
met three times during 2000. 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.

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.

COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE AND
EXECUTIVE COMPENSATION

COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE

The Compensation and Management Development Committee is comprised of
Ronald L. Kuehn, Jr. as Chairman, Claire W. Gargalli, Raymond W. LeBoeuf, G.
Jackson Ratcliffe, Jr. and H. Mitchell Watson, Jr. The Committee met six times
during 2000. 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 the executive officers of Praxair; and
(2) determines, and recommends to Praxair's Board of Directors, Praxair's
policies relating to the compensation of the other elected 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.

This Committee is comprised of five 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.

COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
REPORT ON EXECUTIVE COMPENSATION

This report addresses Praxair's compensation policies and practices,
and the Committee's decisions regarding 2000 compensation and long term
incentives as they affected the Chairman of the Board, the Chief Executive
Officer and the four other most highly paid executive officers of Praxair
(the six 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.
Praxair has selected a comparator group of companies from the consultant's
database that it considers as an appropriate group of companies against
which to compare Praxair for compensation purposes. The comparator group
comprises 26 companies from various industries that represent the
competitive marketplace for Praxair executives. Since the size of the
comparator companies measured by sales varies somewhat, 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 an index focussed on the chemical industry, based on its
belief that an industry index is an appropriate peer group for investment
comparisons. The companies chosen for the compensation comparator group are
not necessarily those represented in the shareholder return comparisons.
The Committee believes that Praxair's competitors for executive talent are
a broader group of companies and not limited only to the companies in the
investment comparison.

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, their salaries relative
to the market and in recognition of certain increased responsibilities. Mr.
Lichtenberger's salary was adjusted by 5.6 percent on an annualized basis,
effective April 1, 2000. Mr. Reilley joined Praxair during March 2000 and
his salary was unchanged during the year.

PERFORMANCE-BASED ANNUAL VARIABLE COMPENSATION

At its January 2000 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 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 shareholder value creation. Second, the Committee reviewed
the current target variable compensation levels as a percentage of base
salary. The target levels were found to be consistent with the external
market place. The target payout percentages range from 50 percent of base
salary up to a high of 75 percent of base salary for Mr. Reilley and Mr.
Lichtenberger.

At its January 2001 meeting, the Committee evaluated 2000 performance
of the company against its 2000 Annual Business Plan and considered the
individual performance of each of the Senior Executives. Regarding the
primary measures of performance, namely achievement of financial targets,
the Committee concluded that the Corporation achieved improved performance
in 2000 compared to 1999 and substantially achieved its annual plan in
spite of a challenging external environment in the U.S. and some of
Praxair's key international markets. In addition, many of the 2000
nonfinancial goals noted above were either accomplished or progress was
well under way. The Committee also reviewed the performance of the
Corporation in comparison to the performance measures established by the
Committee in 2000 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 2000 in relation to
both financial and non-financial plans, the Committee awarded 2000
performance-based annual variable compensation for the Senior Executives
slightly above the target payout. Mr. Reilley's variable compensation was
established at $660,000 based on the foregoing considerations. Mr.
Lichtenberger's variable compensation was established at $785,000 based on
the foregoing considerations.

LONG TERM INCENTIVES

The Committee granted 400,000 stock options to Mr. Reilley upon hire
at Praxair. These options were granted at the closing market price on the
date of grant, will vest in March 2002, and have a ten year term. In
addition, Mr. Reilley was granted 25,000 shares of restricted stock which
will vest annually in three approximately equal parts beginning February
2006. These grants were designed to replace long term compensation that Mr.
Reilley forfeited upon resigning from his prior employer and were based on
a competitive evaluation of the long term incentive component of
compensation for chief executive officers in the Corporation's peer group
of comparator companies.

The Committee made annual stock option grants to 93 executive
officers, officers, and other key employees at its December 1999 meeting.
These options were granted at the closing market price on the date of
grant, will vest in December 2001, and have a ten year term. These grants
constituted the long term incentive component of pay for 2000.

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 shareholders adopted at the 1996 Annual Meeting of
Shareholders, a plan for determining performance-based annual and long term
incentives, designed to comply with the IRS requirements for deductibility.
In accordance with IRS requirements, the material terms of this plan are
being submitted for re-approval by the shareholders at the 2001 Annual
Meeting. The full text of the 162(m) Plan is attached to this Proxy
Statement as Exhibit C.

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.
================================================================================

TABLE 1

-------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Awards Payouts
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Salary Bonus(1) Compensation Award(s) Options Payouts Compensation(3)
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
----------------------------------------------------------------------------------------------------------------------

H. William Lichtenberger 2000 858,333 785,000 9,084(2) 0 0 0 39,979
Former Chairman and 1999 887,500 800,000 0 0 150,000 2,183,659(6) 44,610
Chief Executive Officer(7) 1998 840,000 610,000 0 0 50,000 0 42,059
----------------------------------------------------------------------------------------------------------------------
Dennis H. Reilley 2000 657,971 660,000 161,179(2),(10) 25,000(5) 400,000 0 24,835
Chairman, President and 1999 - - - - - - -
Chief Executive Officer(4) 1998 - - - - - - -
----------------------------------------------------------------------------------------------------------------------
Paul J. Bilek 2000 437,500 355,000 16,973(2) 0 0 0 23,659
Executive Vice President 1999 400,000 300,000 6,444(2) 0 50,000 691,509(6) 21,603
1998 321,250 220,481 4,444(2) 0 40,000 0 15,875
----------------------------------------------------------------------------------------------------------------------
Thomas W. von Krannichfeldt 2000 430,000 200,000 130,786(2),(10) 0 0 0 15,987
Executive Vice President 1999 232,500 127,942 4,000 0 50,000 574,281(6) 9,374
1998 217,750 140,769 6,667 0 10,000 0 8,739
======================================================================================================================
Ricardo S. Malfitano 2000 337,500 204,808 9,084(2) 0 0 0 16,973
Vice President, and 1999 300,000 168,654 0 0 30,000 363,943(6) 14,944
President, North American 1998 233,033 67,564 427,555(9) 0 24,000 0 0
Industrial Gases
----------------------------------------------------------------------------------------------------------------------
David H. Chaifetz 2000 323,250 215,000 13,872(2) 0 0 0 17,579
Vice President, 1999 309,000 200,000 4,111(2) 0 20,000 509,520(6) 17,996
General Counsel 1998 293,750 160,000 3,556(2) 0 12,000 0 13,833
and Secretary
----------------------------------------------------------------------------------------------------------------------

Notes: 1) Reported in this column are annual awards that Praxair
characterizes as Performance Based Annual Variable Compensation.
Twenty percent of the variable compensation paid for the three listed
years 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 Mr. Bilek for 1998, and for Mr. Malfitano for 1999 and
2000, includes amounts paid from North American Industrial Gases
performance sharing programs. Data for Mr. von Krannichfeldt for 1998
and 1999 includes amounts paid from the Praxair Surface Technologies,
Inc. performance sharing program.

2) Represents the value of the discount from the market value of
Praxair's Common Stock that is, in effect, received by individuals who
have deferred variable compensation earned in the listed years 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. In 2000, the
reported amount also includes the value of financial planning services
provided to the named officers and a related tax gross-up.

3) Amounts reported in this column for 2000 are comprised of the
following items:

SAVINGS PLAN COMPANY MATCH* EXECUTIVE LIFE INSURANCE VALUE

H. William Lichtenberger $32,188 $7,791
Dennis H. Reilley 24,835 0
Paul J. Bilek 16,406 7,253
Thomas W. von Krannichfeldt 15,987 0
Ricardo S. Malfitano 12,169 4,804
David H. Chaifetz 12,122 5,457

*Includes both qualified and unqualified match amounts

4) Mr. Reilley joined Praxair, Inc. on March 6, 2000.

5) As of December 31, 2000, Mr. Reilley held 25,000 shares of unvested
restricted stock having a "value" of $1,109,375. This "value" is
calculated according to SEC rules by assuming that all such shares are
vested at 2000 year-end and by using the closing market price of
Praxair, Inc.'s Common Stock as of December 29, 2000 ($44.375 per
share). These shares do not actually begin vesting until 2005.
Dividends are paid on Mr. Reilley's restricted stock.

6) Represents the vesting of Performance Stock granted in 1996 for the
performance period 1997 through 1999. Performance Stock vested
according to a pre-established vesting schedule for earnings per share
growth performance of approximately 11% per year during the period
1997 through 1999. Vested Performance Stock was settled in shares of
the Corporation's Common Stock. Amounts reported represent the market
value of those shares on the settlement date.

7) Effective March 6, 2000, Mr. Lichtenberger resigned his position as
Chief Executive Officer. He remained Chairman of the Board of
Directors until his retirement from the Company on November 30, 2000.

8) Mr. Malfitano was employed in Brazil during 1998. His compensation
was paid in Brazilian Reais and was converted to US dollars for this
table using an average exchange rate for the year based on daily
exchange rates. The rate used was 1.16018 Reais per US dollar.

9) Of which $37,555 represents the value Mr. Malfitano received by the
use of company paid automobiles during his assignment in Brazil. In
addition, during December 1998, he received a lump sum in the amount
of $390,000 which was equivalent to thirty months of expatriate
differential pay that Praxair would otherwise provide Mr. Malfitano
during his US assignment.

10) Includes personal benefits totaling $82,055 for Mr. Reilley and
$115,049 for Mr. von Krannichfeldt. Major components of these personal
benefits are as follows:

Mr. Reilley Mr. von Krannichfeldt
----------- ---------------------

Relocation expenses $44,839 $63,563
Tax gross up on the expenses $37,216 $51,486

TABLE 2

------------------------------------------------------------------------------------------------------------------------
OPTION GRANTS IN LAST FISCAL YEAR

Potential Realizable Value
INDIVIDUAL GRANTS at Assumed Annual Rates of
Stock Price Appreciation for
Option Term(1)
------------------------------------------------------------------------------------------------------------------------
Number of Percent of
Securities Total Options If Stock at If Stock at
Underlying Granted to $64.240/sh $102.291/sh
Options Employees in Exercise Expiration 5% 10%
Name Granted (#) Fiscal Year Price Date ($) ($)
------------------------------------------------------------------------------------------------------------------------

H. William Lichtenberger 0 - - - - -
Dennis H. Reilley 400,000 13.3% $39.4375 2/22/2010 $9,920,813 $25,141,287
Paul J. Bilek 0 - - - - -
Thomas W. von Krannichfeldt 0 - - - - -
Ricardo S. Malfitano 0 - - - - -
------------------------------------------------------------------------------------------------------------------------
David H. Chaifetz 0 - - - - -
------------------------------------------------------------------------------------------------------------------------

Notes: 1) Potential realizable value is the pre-tax gain that an option
holder would realize at the time of the option expiration date if (a) he or she
would exercise all of the options on their expiration date, and (b) Praxair's
stock price grew between the date of grant and the exercise date at the annual
rate assumed in the column. This pre-tax gain is calculated by multiplying the
number of options by the difference between the Assumed Stock Price on the
option expiration date and the option exercise price. THE HYPOTHETICAL VALUES
REFLECTED IN THIS TABLE REPRESENT ASSUMED RATES OF APPRECIATION ONLY; WHICH
RATES ARE SET BY SEC RULES. ACTUAL GAINS, IF ANY, ON STOCK OPTION EXERCISES AND
COMMON STOCK HOLDINGS ARE DEPENDENT ON, AMONG OTHER FACTORS, THE FUTURE
PERFORMANCE OF THE COMMON STOCK AND OVERALL STOCK MARKET CONDITIONS. THERE CAN
BE NO ASSURANCE THAT THE AMOUNTS REFLECTED IN THIS TABLE WILL BE ACHIEVED.

TABLE 3

======================================================================================================================
----------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES
----------------------------------------------------------------------------------------------------------------------
Number of Securities
Shares Underlying Value1 of Unexercised
Acquired on Value Unexercised Options In-the-Money Options
Name Exercise (#) Realized ($) at FY-End (#) at FY-End ($)
----------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable

H. William Lichtenberger 60,000 $1,965,924 577,000 150,000 $11,498,067 0
Dennis H. Reilley 0 0 0 400,000 0 $1,975,000
Paul J. Bilek 0 0 140,500 50,000 $ 2,073,476 0
Thomas W. von Krannichfeldt 20,400 $ 556,983 43,000 50,000 $ 308,750 0
Ricardo S. Malfitano 0 0 73,000 30,000 $ 1,049,462 0
----------------------------------------------------------------------------------------------------------------------
David H. Chaifetz 4,700 $ 161,029 112,000 20,000 $ 2,119,910 0
----------------------------------------------------------------------------------------------------------------------

Note: 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 29, 2000. The market
price on this date was $44.375 per share.

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 named executives.

TABLE 4

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

$ 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
----------------------------------------------------------------------------------------------------------------------

- 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. For purposes of determining the average annual
remuneration used for calculating retirement benefits, the three highest annual
rates of salary and the three highest variable compensation payments received by
the retiree during the previous ten years are averaged. No other forms of
remuneration are included. This table reflects the combination of qualified and
non-qualified pension benefits.

- Credited years of service as of March 1, 2001 are as follows: H. William
Lichtenberger, 41 years; Dennis H. Reilley, 26 years; Paul J. Bilek, 32 years;
Thomas W. von Krannichfeldt, 25 years; Ricardo S. Malfitano, 20 years; David H.
Chaifetz, 25 years.

- Credited years of service for Dennis H. Reilley represent combined service
with Praxair, Inc. and DuPont. Mr. Reilley joined Praxair, Inc. on March 6, 2000
and at that time received credit for 25.75 years of service with DuPont.

- Credited years of service reported for Ricardo S. Malfitano represent combined
service with Praxair, Inc. and S. A. White Martins.

- Credited years of service reported for Thomas W. von Krannichfeldt represent
combined service with Praxair, Inc. and Praxair Surface Technologies (Europe)
S.A.

- Mr. Reilley, Mr. von Krannichfeldt and Mr. Malfitano are each eligible for
retirement benefits under the Praxair, Inc. Retirement Plan. Upon their
retirements, each will receive retirement benefits under this Plan based on his
combined Praxair and former employer service, less an offset for benefits
received under the former employer's retirement plan.

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, Dennis H. Reilley, Paul J. Bilek,
Thomas W. von Krannichfeldt, Ricardo S. Malfitano, David H. Chaifetz 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 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.

SHAREHOLDER RETURN

-------------------------------------------------------------------------------
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG PRAXAIR, INC.,
S&P 500 INDEX & THE S&P CHEMICALS INDEX

[GRAPHIC]

Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 29
1995 1996 1997 1998 1999 2000

Praxair $100 $138 $136 $108 $156 $140
S&P 500 $100 $123 $163 $209 $253 $230
S&P Chem. $100 $130 $160 $150 $178 $162

ASSUMES $100 INVESTED ON DECEMBER 31, 1995 IN PRAXAIR COMMON STOCK, THE S&P
CHEMICALS INDEX, AND THE S&P 500 INDEX.

Note: Total return assumes reinvestment of dividends. The Standard and
Poor's (S&P) Chemicals Index is a published index which, as of 12/29/00, covered
eight companies, including Praxair.

THE AUDIT COMMITTEE & THE INDEPENDENT ACCOUNTANTS

AUDIT COMMITTEE

In 2000 the Audit Committee was comprised of C. Fred Fetterolf as Chairman,
Alejandro Achaval, Ronald L. Kuehn, Jr., Benjamin F. Payton and H. Mitchell
Watson, Jr. Each of the Audit Committee members is "independent" within the
meaning of the New York Stock Exchange listing standards. The Committee met
three times during 2000. The Audit Committee assists the Board in monitoring the
independence of Praxair's external and internal auditors and the integrity 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; (4) reviews the auditor's fees and, after
completion of the audit, reviews with management and the independent accountants
the auditors' report; and (5) reviews with management and the independent
accountants the annual financial statements of Praxair prior to their
publication.

The Audit Committee also reviews the independence of the independent
accountants, the adequacy of Praxair's internal accounting control system and
Corporate 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.

The Charter of the Committee as adopted by the Board of Directors is
attached to this Proxy Statement as Exhibit A.

INDEPENDENT ACCOUNTANTS

Independent Accountants PricewaterhouseCoopers LLP served as Praxair's
independent accountants for the year ended December 31, 2000 and has been
selected by the Board of Directors to serve in such capacity for the year ending
December 31, 2001. Representatives of PricewaterhouseCoopers 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.

AUDIT FEES. PricewaterhouseCoopers LLP billed Praxair, Inc. and its
affiliates an aggregate amount of $2,462,000 for professional services rendered
for the audit of Praxair's annual financial statements for 2000 and the reviews
of the financial statements included on Praxair's reports on Form 10-Q for that
fiscal year.

FINANCIAL SYSTEMS DESIGN AND IMPLEMENTATION FEES. None.

ALL OTHER FEES. PricewaterhouseCoopers LLP billed Praxair, Inc. and its
affiliates an aggregate amount of $1,997,000 for non-audit services rendered in
2000.

AUDIT COMMITTEE REPORT

The role of the Audit Committee is to assist the Board of Directors in its
oversight of the Company's financial reporting process. The Board of Directors,
in its business judgment, has determined that all members of the Committee are
"independent", as required by applicable listing standards of the New York Stock
Exchange. The Committee operates pursuant to a Charter that was last amended by
the Board on February 22, 2000, a copy of which is attached to this Proxy
Statement as Exhibit A.

As set forth in the Charter, the management of the Company is responsible
for: (1) the preparation, presentation and integrity of the Company's financial
statements; (2) the Company's accounting and financial reporting principles; and
(3) internal controls and procedures designed to assure compliance with
applicable laws, regulations, and standards. The independent accountants are
responsible for auditing the Company's financial statements and expressing an
opinion as to their conformity with generally accepted accounting principles.

In the performance of its oversight function, the Committee has considered
and discussed the audited financial statements with management and the
independent accountants. The Committee has also discussed with the independent
accountants the matters required to be discussed by the Statement on Auditing
Standards No. 61, Communication with Audit Committees, as currently in effect.

The Committee has discussed with the independent accountants their
independence from the Company and its management. The Committee has received the
written disclosures and the letter from the independent accountants required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees, as currently in effect. The Committee has also received written
confirmations with respect to non-audit services provided to the Company by the
independent accountants in calendar year 2000 and those planned for 2001. The
Committee has considered whether the provision of such non-audit services is
compatible with maintaining PricewaterhouseCoopers' independence.

In its oversight role for these matters, the Audit Committee relies on the
information and representations made by management and the independent
accountants. Accordingly, the Audit Committee's oversight does not provide an
independent basis to certify that the audit of the Company's financial
statements has been carried out in accordance with generally accepted auditing
standards, that the financial statements are presented in accordance with
generally accepted accounting principles or that the Company's independent
accountants are in fact "independent".

Based upon the reports and discussions described in this report, and
subject to the limitations on the role and responsibilities of the Committee
referred to above and in the Charter, the Committee recommended to the Board
that the audited financial statements be included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2000 to be filed with the
Securities and Exchange Commission.

THE AUDIT COMMITTEE

C. Fred Fetterolf, Chairman
Alejandro Achaval
Ronald L. Kuehn, Jr.
Benjamin F. Payton
H. Mitchell Watson, Jr.

2002 PRAXAIR, INC. LONG TERM INCENTIVE PLAN

The following summary description of the 2002 Praxair, Inc. Long Term
Incentive Plan ("2002 Plan") is qualified in its entirety by reference to the
full text of the 2002 Plan which is attached to this Proxy Statement as
Exhibit B.

The plan here submitted for the shareholders' approval is intended to
replace the existing 1992 Praxair, Inc. Long Term Incentive Plan which, by
its terms, expires on December 31, 2001. The Board of Directors has adopted
the 2002 Plan to take effect on January 1, 2002. The 2002 Plan will be used
to grant long term incentives such as stock options and multi-year
performance awards to the Corporation's officers and other employees.

Multi-year performance awards granted under the 2002 Plan that are
intended to qualify as "performance-based" compensation under IRS Code
Section 162(m) (thereby being eligible for exemption from the deduction limit
set forth in that Section) will be administered according to the Praxair,
Inc. Plan for Determining Performance-Based Awards under Section 162(m),
which plan is also being submitted for the shareholders approval at this
meeting.

DESCRIPTION OF THE PLAN

ADMINISTRATION AND AWARDS. The 2002 Plan is administered by the
Compensation and Management Development Committee of the Board whose members are
ineligible to participate. The 2002 Plan permits the granting of stock options
(including incentive stock options), stock (including restricted stock), and
performance awards measured in whole or in part with reference to the market
price of the Company's stock.

ELIGIBILITY. Any employee of Praxair, Inc. or a subsidiary or affiliate is
eligible to receive awards under the 2002 Plan.

LIMITATION ON SHARES. The aggregate number of shares of Common Stock of the
Company that may be awarded or be subject to options granted under the 2002 Plan
is 7,900,000. No award may be granted under the 2002 Plan on or after January 1,
2012. In addition to the aggregate limitation, no participant may be granted
options on more than 500,000 shares in a calendar year, or, in the case of a
multi-year grant, 500,000 shares times the number of years during which the
participant shall receive no additional option grants. Also, the combined number
of shares that may be granted under the 2002 Plan as Stock Awards (either
Restricted or otherwise) or pursuant to Performance Awards is limited to 20% of
the total shares available under the 2002 Plan.

STOCK OPTION FEATURES. The Committee may grant either incentive stock
options or non-qualified stock options. The exercise price for stock options
must be no less than the closing price of the Corporation's Common Stock as
reported on the New York Stock Exchange-Composite Transactions on the date of
grant. The option term can be no more than 10 years, and the option is
exercisable only after the earlier of: (i) such period of time as the Committee
determines but in no event less than one year following the date of grant; (ii)
the death, Disability or Retirement of the participant; (iii) the termination by
the Company of the participant's employment other than for cause; or (iv) a
Change in Control of the Company. An option is generally not exercisable after a
participant terminates employment, but the 2002 Plan provides for certain
exceptions. In no event, however, may an option be exercised after the
expiration date of the option. Payment of the exercise price must be in cash or
already owned stock of the Company, or in a combination of cash and Company
stock. In order to enable the Company to satisfy any withholding tax
requirements upon exercise of the option, the participant may pay the Company
the tax to be withheld or may elect to satisfy such obligation by delivering to
the Company already owned stock of the Company. The exercise price and tax
obligations may also be satisfied by having the Company withhold shares that
would otherwise be delivered to the participant pursuant to the exercise of the
option.

Repricing of outstanding stock options, or the cancellation of a stock
option and replacement with an option at a lower price, is not permitted without
prior shareholder approval.

RESTRICTED STOCK. Restricted stock may not be sold or transferred by the
participant until all restrictions that have been established by the Committee
have lapsed. The participant has, with respect to restricted stock, all of the
rights of a stockholder of the Company, including the right to vote the shares
and the right to receive any dividends, unless the Committee otherwise
determines. Upon a participant's termination of employment during the period any
restrictions are in effect, all restricted stock will be forfeited unless the
Committee decides that it is in the best interests of the Company to permit
individual exceptions. The Committee may make a cash payment to a participant
granted stock or restricted stock to allow the participant to satisfy tax
obligations arising out of receipt of the stock or restricted stock.

PERFORMANCE AWARDS. Performance awards enable the participant to receive an
award if measures of performance established by the Committee are met. The
Committee determines the times at which performance awards are to be made and
all conditions of such awards. Performance awards may be paid in common stock or
other securities of the Company, cash or any other form of property as the
Committee may determine. The participant is not permitted to sell, assign,
transfer, pledge or otherwise encumber shares received as part of a performance
award prior to the date on which any applicable restriction or performance
period established by the Committee lapses.

LIMITS ON STOCK AWARDS AND PERFORMANCE AWARDS. In no event may the
aggregate number of shares granted under the 2002 Plan as Stock Awards (either
Restricted or otherwise) or pursuant to Performance Awards exceed 20% of the
total number of shares authorized for issuance under the Plan. In addition, no
individual participant may be awarded more than 100,000 shares as a Stock Award
(either Restricted or otherwise), or 100,000 shares pursuant to a Performance
Award, in any one calendar year, except in the case of a multi-year grant.

AMENDMENT AND TERMINATION. The Board of Directors may suspend, terminate or
amend the 2002 Plan but may not, without affirmative vote of a majority of all
votes cast on the matter at a meeting of the Shareholders of the Company
(provided that the total votes cast for the matter represent over 50% of the
shares entitled to vote on the matter), increase the total number of shares that
may be optioned or granted under the 2002 Plan, or amend the section requiring
shareholder approval for the repricing of any outstanding stock option.

FEDERAL INCOME TAX CONSIDERATIONS. Under present Internal Revenue Service
regulations, the following are the federal tax consequences generally arising
with respect to awards granted under the 2002 Plan. The grant of a stock option
will create no tax consequences for the participant or the Company. The
participant will have no taxable income upon exercising an incentive stock
option (except that the alternative minimum tax may apply), and the Company will
not receive a deduction when an incentive stock option is exercised. Upon
exercising a stock option that is not an incentive stock option, the participant
must recognize ordinary income in an amount equal to the difference between the
exercise price and the fair market value of the stock on the exercise date, and
the Company intends to take a deduction for the same amount.

With respect to other awards granted under the 2002 Plan that are settled
in cash or stock that is either transferable or not subject to a substantial
risk of forfeiture, the participant must recognize ordinary income in an amount
equal to the cash or the fair market value of the shares received. The Company
will receive a deduction of the same amount subject to the compensation
deduction limitation of Internal Revenue Code Section 162(m). With respect to
other awards granted under the 2002 Plan that are settled in stock that is
subject to restrictions as to transferability and subject to a substantial risk
of forfeiture, the participant must recognize ordinary income in an amount equal
to the fair market value of the shares received at the first time the shares
become transferable or not subject to a substantial risk of forfeiture,
whichever occurs earlier.

The tax treatment upon disposition of shares acquired under the 2002 Plan
will depend on how long the shares have been held. In the case of shares
acquired through exercise of a stock option, the tax treatment will also depend
on whether or not the shares were acquired by exercising an incentive stock
option. There will be no tax consequences to the Company upon the disposition of
shares acquired under the 2002 Plan except that the Company may receive a
deduction in the case of the disposition of shares acquired under an incentive
stock option before the applicable incentive stock option holding period has
been satisfied.

NEW PLAN BENEFITS

The cost to the Company of the awards and grants to be made under the 2002
Plan cannot be determined at this time since the form and amount of awards to be
made in any year are determined at the discretion of the Compensation and
Management Development Committee based on individual and corporate performance,
the competitiveness of the Corporation's compensation program, the Corporation's
best interests and other factors.

THE HYPOTHETICAL BENEFITS SET FORTH IN THE FOLLOWING TABLE INCLUDE THE
AWARDS ACTUALLY PAID OR GRANTED TO THE NAMED EXECUTIVES IN 2000 UNDER THE 1992
PRAXAIR, INC. LONG TERM INCENTIVE PLAN, THE PLAN THAT THE 2002 PLAN IS TO
REPLACE. These amounts, therefore, represent the amounts that would have been
received by these individuals for 2000 if the 2002 Plan had been in effect.

===================================================================================================================
NEW PLAN BENEFITS
-------------------------------------------------------------------------------------------------------------------
2002 Praxair, Inc. Long Term Incentive Plan as Applied to 2000
Name Principal Position Dollar Value

H. William Lichtenberger Former Chairman and Chief Executive Officer 0
Dennis H. Reilley Chairman, President and Chief Executive Officer $ 985,938(1)
$ 5,832,000(2)
Paul J. Bilek Executive Vice President 0
Thomas W. von Krannichfeldt Executive Vice President 0
Ricardo S. Malfitano Vice President, and President, North American Industrial Gases 0
David H. Chaifetz Vice President, General Counsel and Secretary 0
Executive Officers as a group $ 985,938(1)
$ 6,099,900(2)
Non-Employee Directors as a group 0(3)
Employees as a group other than Executive Officers $40,409,998(2)
-------------------------------------------------------------------------------------------------------------------

Notes: 1) Restricted stock valued at the market price of Praxair, Inc. Common
Stock on the date of grant.

2) Stock options valued using the Black Scholes method of option
valuation.

3) Not eligible to participate.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE 2002
PRAXAIR, INC. LONG TERM INCENTIVE PLAN. UNLESS OTHERWISE DIRECTED ON THE PROXY
FORM, THE PROXY HOLDERS INTEND TO VOTE IN FAVOR OF ADOPTION OF THE 2002 PLAN.

PRAXAIR, INC. PLAN FOR DETERMINING
PERFORMANCE-BASED AWARDS UNDER SECTION 162(m)

The following summary description of the Praxair, Inc. Plan for Determining
Performance-Based Awards under Section 162(m) ("162(m) Plan") is qualified in
its entirety by reference to the full text of the 162(m) Plan which is attached
to this Proxy Statement as Exhibit C.

The purpose of the 162(m) Plan is to qualify certain awards made to
participating officers under the Corporation's compensation plans as
"performance-based" under Internal Revenue Code Section 162(m), thereby
exempting these Awards from the limitation on tax deductibility set forth in
that Section. The 162(m) Plan was submitted to, and approved by, Praxair, Inc.
shareholders in 1996. The regulations issued under Internal Revenue Code Section
162(m) require that the material terms of the 162(m) Plan be re-submitted to the
shareholders for approval in the fifth year following the original approval.

The material terms of the 162(m) Plan submitted here are identical to those
of the plan approved by the shareholders in 1996.

The 162(m) Plan does not, in itself, authorize any payments or the issuance
of any shares for any award. Rather, the 162(m) Plan provides only for the
administration and determination of certain awards to be granted under other of
the Corporation's compensation plans or programs, including the 2002 Praxair,
Inc. Long Term Incentive Plan also submitted here for the shareholders'
approval.

DESCRIPTION OF THE PLAN

PURPOSE. The purpose of the 162(m) Plan is to establish a process and
criteria for administering and determining awards to certain members of
Praxair's senior management under the Corporation's compensation plans.
Compliance with the 162(m) Plan's provisions allows such awards to qualify as
"performance-based" under Internal Revenue Code Section 162(m).

ADMINISTRATION. The 162(m) Plan is administered by the Compensation and
Management Development Committee of the Board (the "Committee"). The Committee
has sole authority to make rules and regulations for the administration of the
162(m) Plan. Interpretation and decisions of the Committee with regard to the
162(m) Plan are final and conclusive.

ELIGIBILITY AND PARTICIPATION. Only Executive Officers of the Corporation
are eligible for participation in the 162(m) Plan. Participants for a calendar
year or performance period shall be those Executive Officers who are designated
as participants ("Participants") by the Committee not later than 90 days after
the commencement of such year or period. The Committee may choose to designate
no Participants for a calendar year or performance period.

AWARDS. Awards to be administered and determined under the 162(m) Plan are
made based on the performance of the Participant, business unit(s) of the
Company or the Company as a whole, over a calendar year, or longer performance
period, against specific performance goals for the year or period as established
by the Committee. Awards determined by the procedures set forth in the 162(m)
Plan are issued under the applicable Praxair, Inc. compensation plan or program
and are subject to the limitations provided in that compensation plan or
program.

PERFORMANCE MEASURES. For each calendar year or performance period, the
Committee may select one or more Performance Measures and set the performance
goals for these measures. The Performance Measures and the related performance
goals are utilized to determine the amount of any awards payable for such year
or performance period under the applicable compensation plan. The 162(m) Plan
provides in its Section 7 a number of Performance Measures from which the
Committee may select.

AWARD DETERMINATION. Not later than 90 days after the commencement of a
calendar year or performance period, the Committee designates for the awards
relating to such year or period: (i) the individuals who will be Participants in
the 162(m) Plan; (ii) the Performance Measures; (iii) if there is more than one
Performance Measure, the weighting of the Performance Measures in determining
the award; (iv) the performance goals and payout matrix or formula for each
Performance Measure; and (v) the target award for each Participant.

Following the end of a calendar year or performance period, the Committee
determines the award for each Participant by: (i) comparing actual performance
for each measure against the performance goal and the payout matrix approved for
such year or period; (ii) multiplying the payout percentage from the payout
matrix for each Performance Measure by the appropriate weighting factor; and
(iii) summing the weighted payout percentages and multiplying their overall
payout percentage by the Participant's target award.

The Committee in its sole discretion may reduce any award to any
Participant to any amount, including zero, prior to the certification by
resolution of the Committee of the amount of such award. The Committee may not,
however, increase an award or change a performance goal once it has been
established.

As a condition to the right of a Participant to receive an award, the
Committee must first certify, by resolution, that the award has been determined
in accordance with the provisions of the 162(m) Plan.

MAXIMUM AWARD. The maximum amount of any individual award that may be
determined under the 162(m) Plan is three times a Participant's annual base
salary in the case of an annual award, and $4 million times the length of the
performance period in the case of a multi-year performance award. In no case,
however, shall any award determined under the 162(m) Plan exceed any applicable
limits set forth in the compensation plan or program pursuant to which the award
is granted.

PLAN AMENDMENT OR TERMINATION. The Committee may from time to time amend
the 162(m) Plan or terminate the 162(m) Plan in whole or in part, provided that
no such action: (i) will increase the amount of any award for which performance
goals have been established but which has not yet been earned or paid; and (ii)
will cause an award to become subject to the deduction limitations contained in
Internal Revenue Code Section 162(m). That Section provides that any amendment
to the material terms of the 162(m) Plan must be approved by the Company's
shareholders.

NEW PLAN BENEFITS

The 162(m) Plan does not, in itself, create any new benefits or payments.
It merely establishes a process and criteria for determining the amounts of
certain awards made to participating senior executives pursuant to Praxair's
variable compensation, long term incentive and other plans and programs.

For 2001, the Committee has elected to use the 162(m) Plan to determine the
amount of annual variable compensation award for 2001 performance under the
Company's Variable Compensation Plan for each of Messrs. Reilley, Bilek, von
Krannichfeldt, Malfitano and Sawyer. Accordingly, the Committee has designated
performance goals, target awards and payout formulae based on the Performance
Measure Net Income. The 2000 Plan Year variable compensation awards for Messrs.
Lichtenberger, Bilek, von Krannichfeldt and Chaifetz were administered and
determined under the 162(m) Plan and are reported in Table 1 under the column
labeled "Bonus".

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PRAXAIR,
INC. PLAN FOR DETERMINING PERFORMANCE-BASED AWARDS UNDER SECTION 162(M). UNLESS
OTHERWISE DIRECTED ON THE PROXY FORM, THE PROXY HOLDERS INTEND TO VOTE IN FAVOR
OF ADOPTION OF THE 162(M) PLAN.

MISCELLANEOUS

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 to the effect that no Form 5 is required, Praxair
believes that during the period January 1, 2000 to December 31, 2000, all
reports required by Section 16(a) of the Securities and Exchange Act of 1934
have been filed by its officers and directors.

SHAREHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING

To be included in Praxair's proxy statement and form of proxy, proposals of
shareholders intended to be presented to Praxair's 2002 Annual Meeting of
Shareholders must be received at Praxair's principal executive offices by
November 14, 2001. Otherwise, in order for a shareholder to bring other business
before that shareholder meeting, Praxair's Certificate of Incorporation requires
that proper written notice be received by Praxair on or before February 22,
2002. 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 February 26, 2001 should have received a copy of
Praxair's 2000 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, 2000 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.

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

DAVID H. CHAIFETZ,
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY

March 1, 2001

YOU ARE URGED TO PROMPTLY COMPLETE AND FILE A PROXY

EXHIBIT A

AUDIT COMMITTEE CHARTER

The Board of Directors (the "Board") of Praxair, Inc. (the "Corporation")
shall appoint the Audit Committee (the "Audit Committee") which shall be
constituted and have the responsibility and authority as described herein.

COMPOSITION

The Audit Committee shall meet the size, independence and experience
requirements of the New York Stock Exchange, as may be in effect from time to
time.

RESPONSIBILITY

The Audit Committee's primary responsibility shall be to assist the Board
in monitoring the integrity of the financial statements of the Corporation and
the independence of the Corporation's external auditors.

In carrying out its responsibility, the Audit Committee shall undertake the
following activities:

INDEPENDENT AUDIT

1. Recommend to the Board the appointment of the independent auditor to
audit the books, records and accounts of the Corporation. Such independent
auditor is ultimately accountable to the Board and the Audit Committee, as
representatives of the stockholders.

2. Evaluate the performance of the independent auditor and, if so
determined by the Audit Committee, recommend that the Board replace the
independent auditor.

3. Review the fees to be paid to the independent auditor.

4. Receive written periodic reports from the independent auditor
delineating all relationships between the independent auditor and the
Corporation. This report shall be consistent with the requirements of the
Independence Standards Board regarding the auditor's independence. The Audit
Committee shall actively engage in dialogue with the independent auditor with
respect to any disclosed relationships or services that may impact the
objectivity and independence of the auditor, and if determined by the Audit
Committee, recommend that the Board take appropriate action to insure the
independence of the auditor.

5. Meet with the independent auditor to review the planning of the audit
including scope, staffing, locations, reliance on management and corporate audit
participation and general audit approach.

6. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the auditor
and the Corporation's response to that letter.

7. Discuss with the independent auditor the required communications with
Audit Committees as prescribed by the Auditing Standards Board.

8. Discuss with the independent auditor whether they have identified the
existence of any issues of the type described in Section 10A of the Securities
Exchange Act of 1934.

FINANCIAL REPORTING

1. Review the Corporation's annual audited financial statements and the
report thereon with the independent auditor and management prior to the
publication of such statements.

2. Review with management and the independent auditor the Corporation's
quarterly financial statements prior to the release of quarterly earnings. The
chair of the committee may represent the entire Audit Committee for purposes of
this review.

3. Discuss with management and the independent auditors any significant
issues regarding accounting principles, practices and judgments made in
connection with the preparation of the Corporation's financial statements.

4. Review major changes to the Corporation's accounting principles and
practices.

CORPORATE AUDIT

1. Review the global corporate audit function, the adequacy of its
resources and the competence of its staff, audit risk considerations and areas
of audit emphasis. Review the cooperation afforded, or the limitation or
pressures, if any, imposed by management. Review and ratify the appointment of
the Director, Corporate Audit.

2. Review the significant reports to management prepared by the corporate
audit department and management's responses, particularly with respect to
identified audit risk considerations.

OTHER CONTROL ISSUES

1. Meet at least annually with the Chief Financial Officer, Controller,
Director of Corporate Audit and the independent auditor in separate executive
sessions.

2. Discuss with the independent auditor the annual review of the officer's
and director's expense accounts and perquisites.

3. Review with the Corporation's General Counsel legal matters that may
have a material impact on the financial statements, the Corporation's compliance
policies and any material reports or inquiries received from regulators or
governmental agencies.

4. Review the Corporation's computerized information systems, applications
and related controls, including security and contingency plans.

5. Review the Corporation's tax planning efforts, taxing authority
developments, pending audits and the adequacy of tax reserves.

COMPLIANCE REPORTING

1. Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Corporation's annual proxy statement.

2. Prepare the required written confirmation to the New York Stock Exchange
at least once a year or upon any changes to the composition of the Audit
committee.

3. Review and reassess the adequacy of this Charter annually and submit any
changes to the Board for approval.

The Audit Committee shall meet at least three times a year and make a
report to the Board following each meeting. There shall be free and confidential
access at any time to the Audit Committee by the independent auditor, the
Controller, the Director of Corporate Audits, the General Counsel and the
management of the Corporation, and by the Audit Committee to those individuals.
The Audit Committee shall have the authority to retain special legal, accounting
or other advisors, as it deems necessary.

While the Audit committee has the responsibility and authority set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Corporation's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditor. Nor is it the duty of the Audit Committee to conduct investigations, to
resolve disagreements, if any, between management and the independent auditor or
to assure compliance with laws and regulations.

EXHIBIT B

2002 PRAXAIR, INC. LONG TERM INCENTIVE PLAN

SECTION 1: PURPOSE. The purpose of the 2002 Praxair, Inc. Long Term Incentive
Plan (hereinafter referred to as the "Plan") is to (a) advance the interests of
Praxair, Inc. (the "Company") and its stockholders by providing incentives and
rewards to those employees who are in a position to contribute to the long term
growth and profitability of the Company; (b) assist the Company and its
subsidiaries and affiliates in attracting, retaining, and developing highly
qualified employees for the successful conduct of their business; and (c) make
the Company's compensation program competitive with those of other major
employers.

SECTION 2: DEFINITIONS.

2.1: A "Change in Control of the Company" shall be deemed to occur if any
of the following circumstances shall occur:

(i) individuals who, on January 1, 2002, 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,
2002, whose election or nomination for election was approved by a vote of at
least two-thirds of the Incumbent Directors then on the Board (either by a
specific vote or by approval of the proxy statement of the Company in which such
person is named as a nominee for director, without objection to such nomination)
shall be an Incumbent Director; provided, however, that no individual elected or
nominated as a director of the Company initially as a result of an actual or
threatened election contest with respect to directors or any other actual or
threatened solicitation of proxies or consents by or on behalf of any person
other than the Board shall be deemed 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 a "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company'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 Company or any Subsidiary; (B) by any
employee benefit plan sponsored or maintained by the Company or Subsidiary; (C)
by any underwriter temporarily holding securities pursuant to an offering of
such securities; (D) pursuant to a Non-Qualifying Transaction (as defined in
paragraph (iii)); or (E) pursuant to any acquisition by a Participant (as
defined in Section 2.11) or any group of persons including a Participant (or any
entity controlled by a Participant or any group of persons including a
Participant);

(iii) the consummation of a merger, consolidation, share exchange or
similar form of corporate transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company's stockholders, whether
for such transaction or the issuance of securities in the transaction (a
"Business Combination"), unless immediately following such Business Combination:
(A) more than 50% of the total voting power of: (x) the corporation resulting
from such Business Combination (the "Surviving Corporation"); or (y), if
applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the "Parent Corporation"), is
represented by Company Voting Securities that were outstanding immediately prior
to such Business Combination (or, if applicable, shares into which such Company
Voting Securities were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of such Company Voting Securities among the
holders thereof immediately prior to the Business Combination; (B) no person
(other than any employee benefit plan sponsored or maintained by the Surviving
Corporation or the Parent Corporation), is or becomes the beneficial owner,
directly or indirectly, of 20% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation);
and (C) at least a majority of the members of the board of directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) were Incumbent Directors at the time of the Board's approval of the
execution of the initial agreement providing for such Business Combination (any
Business Combination which satisfies all of the criteria specified in (A), (B)
and (C) above shall be deemed to be a "Non-Qualifying Transaction"); or

(iv) The stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or a sale of all or substantially all
of the Company's assets.

Notwithstanding the foregoing, a Change in Control of the Company shall not
be deemed to occur solely because any person acquires beneficial ownership of
more than 20% of the Company Voting Securities as a result of the acquisition of
Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control of the Company
shall then occur.

2.2: "Code" means the Internal Revenue Code of 1986, as now or hereafter
amended.

2.3: "Committee" shall mean the Compensation and Management Development
Committee of the Board of Directors of the Company or such other Committee
appointed by the Board for the purpose of administering this Plan comprising two
or more members of the Board who are "non-employee" directors within the meaning
of Rule 16b-3 under the Exchange Act.

2.4: "Disability" means a Participant's inability 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 six months or longer.

2.5: "Eligible Employee" means any employee of the Company or of a
participating Subsidiary or Affiliate of the Company except those
union-represented employees where no agreement has been reached with their
collective bargaining representative for their participation in this Plan. No
"Eligible Employee" shall be a member of the Committee.

2.6: "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

2.7: "Executive Officer" shall mean an Executive Officer of the Company, as
such term is defined within the meaning of the Exchange Act or for purposes of
Section 16 of the Exchange Act.

2.8: "Incentive Stock Option" means any stock option granted pursuant to
this Plan which is designated as such by the Committee and which complies with
Section 422 of the Code.

2.9: "Market Price" is the mean of the high and low prices of the Common
Stock of the Company as reported in the New York Stock Exchange-Composite
Transactions on the date for which a Market Price is to be determined under this
Plan (or on the next preceding day such Stock was traded on a stock exchange
included in the New York Stock Exchange-Composite Transactions if it was not
traded on any such exchange on such date).

2.10: "Non-Qualified Stock Option" means any stock option granted pursuant
to this Plan which is not an Incentive Stock Option.

2.11: "Participant" shall mean an individual selected to participate in the
Plan pursuant to Section 3.

2.12: "Performance Award" shall mean a payment pursuant to Section 8
herein.

2.13: "Restricted Stock" means Stock of the Company subject to restrictions
on the transfer of such Stock, conditions for forfeiture of such Stock, or any
other limitations or restrictions as determined by the Committee.

2.14: "Retirement" shall mean termination of employment with the Company or
a Subsidiary or Affiliate, other than for cause, with the right to receive
immediately a non-actuarially reduced pension under the Company's Retirement
Program; provided, however, that if the Participant is employed by a foreign
affiliate of the Company and/or is not eligible to participate in the Company's
Retirement Program, "Retirement" shall mean termination of employment with the
Company or a Subsidiary or Affiliate, other than for cause, after the
Participant has: (i) attained age 65; (ii) attained age 62 and completed at
least 10 years of employment with the Company; or (iii) accumulated 85 points,
where each year of the Participant's age and each year of employment with the
Company count for one point.

2.15: "Stock" shall mean the Common Stock, $0.01 par value, of the Company.

2.16: "Subsidiary" and "Affiliate" of the Company each shall mean any
entity in which the Company has a 50% or greater ownership interest, directly or
indirectly.

SECTION 3: PARTICIPATION. The Participants in the Plan ("Participants") shall be
those Eligible Employees who are selected to participate in the Plan by the
Committee. Any Eligible Employee, or each member of any group of Eligible
Employees, to whom the Committee by resolution has granted an award (or as to
whom the Committee has delegated to the Chief Executive Officer the right to
allocate awards pursuant to Section 4) shall be deemed a Participant with
respect to such award.

SECTION 4: ADMINISTRATION. The Plan shall be administered and interpreted by the
Committee, which shall have sole authority to make rules and regulations for the
administration of the Plan. The interpretations and decisions of the Committee
with regard to the Plan shall be final and conclusive and binding upon all
Participants. The Committee may request advice or assistance or employ such
persons (including without limitation, legal counsel and accountants) as it
deems necessary for the proper administration of the Plan. The Committee shall:
(i) determine the number and types of awards to be made under the Plan; (ii)
select the awards to be made to Participants; (iii) set the exercise price, the
number of options to be awarded, and the number of shares to be awarded out of
the total number of shares available for award; (iv) delegate to the Chief
Executive Officer of the Company the right to allocate awards among Eligible
Employees who are not Executive Officers of the Company, such delegation to be
subject to such terms and conditions as the Committee in its discretion shall
determine; (v) establish administrative regulations to further the purpose of
the Plan; and (vi) take any other action desirable or necessary to interpret,
construe or implement properly the provisions of the Plan.

SECTION 5: AWARDS.

5.1: TYPES OF AWARDS. Awards under this Plan may be in any of the following
forms (or a combination thereof): (i) stock option awards; (ii) grants of Stock
or Restricted Stock; or (iii) Performance Awards. All awards shall be made
pursuant to award agreements between the Participant and the Company. The
agreements shall be in such form as the Committee approves from time to time.

5.2: MAXIMUM AMOUNT AVAILABLE. The total number of shares of Stock
(including Restricted Stock, if any) optioned or granted under this Plan during
the term of the Plan shall not exceed 7,900,000 shares. Solely for the purpose
of computing the total number of shares of stock optioned or granted under this
Plan, there shall not be counted: (i) any shares which have been forfeited; (ii)
any shares covered by an option which, prior to such computation, has terminated
in accordance with its terms or has been cancelled by the Participant or the
Company; and (iii) any shares otherwise deliverable to a Participant or his/her
transferee upon exercise of an option, or upon the grant or vesting of a Stock
Award (as defined in Section 7.1), which are withheld by the Company in order to
satisfy tax withholding or exercise price obligations. In addition, there shall
be credited to the number of authorized shares remaining for grant or option
under this Plan, any share which is delivered to the Company by a Participant or
his/her transferee in satisfaction of tax withholding or exercise payment
obligations.

5.3: ADJUSTMENT IN THE EVENT OF RECAPITALIZATION, ETC. In the event of any
change in the outstanding shares of the Company by reason of any stock split,
stock dividend, recapitalization, merger, consolidation, combination or exchange
of shares or other similar corporate change or in the event of any special
distribution to the stockholders, the Committee shall make such equitable
adjustments in the number of shares and prices per share applicable to options
then outstanding and in the number of shares which are available thereafter for
Stock Option Awards (as defined in Section 6.1) or other awards, both under the
Plan as a whole and with respect to individuals and award type, as the Committee
determines are necessary and appropriate. Any such adjustment shall be
conclusive and binding for all purposes of the Plan.

SECTION 6: STOCK OPTIONS.

6.1: AWARD TYPES. The Company may award options to purchase the Common
Stock of the Company (hereinafter referred to as "Stock Option Awards") to such
Participants as the Committee (or the Chief Executive Officer of the Company, if
the Committee in its discretion delegates the right to allocate awards pursuant
to Section 4) authorizes and under such terms as the Committee establishes. The
Committee shall determine with respect to each Stock Option Award, and designate
in the grant, whether a Participant is to receive an Incentive Stock Option or a
Non-Qualified Stock Option.

6.2: PER-PARTICIPANT LIMITS. The maximum number of shares of Stock with
respect to which Stock Option Awards may be granted under this Plan during any
calendar year to any Participant is 500,000 except in the case of a multi-year
grant, in which case the maximum number of shares for the Participant shall be
500,000 times the number of years during which the Participant is not to receive
any additional grants of Stock Option Awards.

6.3: EXERCISE PRICE. The exercise price of each share of Stock subject to a
Stock Option Award shall be specified in the grant, but in no event shall the
exercise price be less than the closing price of the Common Stock of the Company
on the date the award is granted as reported in the New York Stock
Exchange-Composite Transactions. If the Participant to whom an Incentive Stock
Option is granted owns, at the time of the grant, more than ten percent (10%) of
the combined voting power of the Participant's employer or a parent or
subsidiary of the employer, the exercise price of each share of Stock subject to
such grant shall be not less than one hundred ten percent (110%) of the closing
price described in the preceding sentence.

6.4: REPRICING. Without the prior approval of the Company's shareholders,
(a) the exercise price of any Stock Option Award granted pursuant to this Plan
shall not be changed following the date of its grant, other than such equitable
changes as may arise in connection with the adjustments permitted under Section
5.3 and no Stock Option Award may be cancelled and replaced with a new Stock
Option Award with a lower exercise price where the economic effect would be the
same as reducing the exercise price of the cancelled option.

6.5: TRANSFERABILITY.

(a) Stock Option Awards shall not be transferable by the Participant
other than:

(i) In the case of the Participant's death, pursuant to the
beneficiary designation then on file with the Company, or, in the absence of
such a beneficiary designation (or if the designated beneficiary has
pre-deceased the Participant), by will or the laws of descent and distribution
(in which case the Company without liability to any other person, may rely on
the directions of the executor or administrator of the Participant's estate with
respect to the disposition or exercise of such options);

(ii) In the Committee's discretion, the terms of a Non-Qualified
Stock Option may permit the Participant to transfer the Stock Option Award to
(w) his or her spouse, children (including by adoption), stepchildren or
grandchildren (referred to herein as the Participant's "Family Members"), (x) a
trust or trusts for the exclusive benefit of such Family Members, (y) a
partnership in which such Family Members are the only partners, or (z) such
other persons or entities as the Committee may approve on a case-by-case basis;
or

(iii) In the case of a transferee's death, to his/her estate
without rights to further distribution.

(b) Any transfer pursuant to this Section 6.5 shall be subject to the
following:

(i) there may be no consideration for any such transfer;

(ii) the stock option agreement pursuant to which such Stock
Option Award is granted must be approved by the Committee, and must expressly
provide for transferability in a manner consistent with this Section 6.5; and

(iii) subsequent transfers of transferred Stock Option Awards
shall be prohibited except those in accordance with this Section 6.5.

(c) Following transfer, any transferred Stock Option Award shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer. The events of death, Disability, Retirement and
termination of employment with respect to an outstanding Stock Option Award
shall be in relation to the original grantee Participant notwithstanding an
earlier transfer of the Stock Option Award. Following such events, the Stock
Option Award shall be exercisable by the transferee only to the extent and for
the periods specified in Sections 6.7 and 6.8 hereof.

6.6: DURATION OF STOCK OPTION AWARDS. A Stock Option Award by its terms
shall be of no more than ten (10) years' duration, except that an Incentive
Stock Option granted to a Participant who, at the time of the grant, owns Stock
representing more than ten percent (10%) of the combined voting power of the
Participant's employer or a parent or subsidiary of the employer shall by its
terms be of no more than five (5) years' duration.

6.7: INITIAL VESTING. A Stock Option Award by its terms shall be
exercisable only after the earliest of:

(i) such period of time as the Committee shall determine and specify
in the grant, but in no event less than one year following the date of grant of
such award;

(ii) the Participant's death, Disability or Retirement;

(iii) the termination by the Company of the Participant's employment
other than for cause; or

(iv) a Change in Control of the Company.

6.8: EXERCISE PERIOD. A Stock Option Award is only exercisable by a
Participant (or, if the Stock Option Award has been duly transferred pursuant to
Section 6.5, the transferee) while the Participant is in active employment with
the Company, or its Subsidiary or Affiliate, except:

(i) in the case of a Participant's death, the Stock Option Award shall
remain exercisable by the transferee of the award during a three (3) year period
following the date of death;

(ii) in the case of a Participant's Retirement or Disability, the
Stock Option Award shall remain exercisable during the original grant duration
as specified in the grant agreement;

(iii) in the case of termination by the Company of the Participant's
employment other than for cause, the Stock Option Award shall remain exercisable
during a three (3) year period commencing on the effective date of such
termination;

(iv) in the case of termination by the Participant or the Company, of
the Participant's employment within two (2) years after a Change in Control of
the Company, unless such termination of employment is for cause, the Stock
Option Award shall remain exercisable during a three-year period commencing on
the effective date of termination; or

(v) if the Committee decides that it is in the best interest of the
Company to permit individual exceptions.

In no event may a Stock Option Award be exercised after its expiration
date.

For purposes of this Plan, the employment of individuals employed by a
Subsidiary or Affiliate of the Company shall be deemed to have been terminated
by the Company at such time as the Company ceases to hold, either directly or
indirectly, at least 50% of the total ownership interests of the entity.

6.9: MANNER OF EXERCISE. A Stock Option Award may be exercised by the
Participant (or, if the Stock Option Award has been duly transferred pursuant to
Section 6.5, the transferee) with respect to part or all of the shares subject
to the option by giving written notice to the Company or its designee of the
exercise of the option according to such procedures as the Vice President, Human
Resources may establish.

6.10: PAYMENT OF EXERCISE PRICE. The exercise price for the shares for
which an option is exercised shall be paid by the exercisor within ten (10)
business days after the date of exercise and the terms of the Stock Option Award
may provide that the exercise price may be paid: (a) in cash; (b) in whole
shares of Common Stock of the Company owned by the exercisor prior to exercising
the option; (c) by having the Company withhold shares that otherwise would be
delivered to the exercisor pursuant to the exercise of the option in an amount
equaling in value the exercise price; (d) in a combination of either cash and
delivery of shares, or cash and withholding of shares; or (e) by whatever other
means the Committee may deem appropriate. The Company shall establish procedures
in connection with payments pursuant to (b), (c), (d), and (e) above, to ensure
that the Plan does not become subject to variable accounting by virtue of such
payment methods. The value of any share of Common Stock delivered or withheld in
payment of the exercise price shall be its Market Price on the date the option
is exercised.

6.11: LIMITS ON INCENTIVE STOCK OPTIONS. The aggregate fair market value of
all shares of Stock with respect to which Incentive Stock Options are
exercisable for the first time by a Participant in any one calendar year, under
this Plan or any other stock option plan maintained by the Company (or by any
subsidiary or parent of the Company), shall not exceed $100,000. The fair market
value of such shares of Stock shall be the mean of the high and low prices of
the common Stock of the Company as reported in the New York Stock
Exchange-Composite Transactions on the date the related Stock Option Award is
granted (or on the next preceding day such Stock was traded on a stock exchange
included in the New York Stock Exchange-Composite Transactions if it was not
traded on any such exchange on the date the related stock option is granted).

6.12: PAYMENT OF TAXES. To enable the Company to meet any applicable
federal, state or local withholding tax requirements arising as a result of the
exercise of a Stock Option Award, whether exercised by the Participant or
his/her transferee, a Participant or the Participant's estate shall pay to the
Company the amount of tax to be withheld, or may elect to satisfy such
obligation: (a) by delivering to the Company other shares of Common Stock of the
Company owned by the Participant prior to exercising the option; (b) by making a
payment to the Company consisting of a combination of cash and such shares of
Common Stock; or (c), if the exercisor is the grantee Participant, by having the
Company withhold shares that otherwise would be delivered to the Participant
pursuant to the exercise of the option for which the tax is being withheld,
provided that withholding by such method shall be limited to the minimum
required applicable tax withholding. Such an election shall be made in such
manner as may be prescribed by the Committee and the Committee shall have the
right, in its discretion, to disapprove such election. Any such election must be
made prior to the date to be used to determine the tax to be withheld and shall
be irrevocable. The value of any share of Common Stock to be withheld by the
Company or delivered to the Company pursuant to this Section 6.12 shall be the
Market Price on the date used to determine the amount of tax to be withheld.

SECTION 7: GRANTS OF STOCK.

7.1: AWARD TYPES. The Committee may grant, either alone or in addition to
other awards granted under the Plan, shares of Stock or Restricted Stock
(hereinafter referred to as a "Stock Award") to such Participants as the
Committee (or the Chief Executive Officer of the Company, if the Committee in
its discretion delegates the right to allocate awards pursuant to Section 4)
authorizes and under such terms as the Committee establishes. The Committee, in
its discretion, may also make a cash payment to a Participant granted shares of
Stock or Restricted Stock under the Plan to allow such Participant to satisfy
tax obligations arising out of receipt of the Stock or Restricted Stock.
Alternatively, the terms of the Stock or Restricted Stock grant may allow for
the Participant to satisfy tax withholding obligations by the means set forth in
Section 7.7.

7.2: AGGREGATE AND INDIVIDUAL LIMITS. Notwithstanding any provision in this
Plan to the contrary, the combined number of shares granted under the Plan
pursuant to Stock Awards or Performance Awards shall not exceed 20% of the
maximum number of shares of Stock available for award under this Plan as
provided in Sections 5.2 and 5.3. In addition, no more than 100,000 shares as a
Stock Award shall be granted to one individual in a calendar year unless
pursuant to a multi-year award. Grants of Stock other than Restricted Stock
shall only be made in lieu of salary or cash bonus.

7.3: VESTING PERIODS. A grant of Restricted Stock pursuant to this Section
7 shall be subject to a minimum vesting period of at least three (3) years, or
such longer period as the Committee, in its sole discretion, may determine.
Notwithstanding the foregoing, the Committee may grant shares of Restricted
Stock with a vesting period of at least two (2) years or such longer period as
the Committee, in its sole discretion, may determine, so long as vesting is
based on performance criteria.

7.4: RIGHTS AS A STOCKHOLDER. The Participant shall have, with respect to
Restricted Stock, all of the rights of a stockholder of the Corporation,
including the right to vote the shares and the right to receive any dividends,
unless the Committee shall otherwise determine.

7.5: TRANSFERABILITY. Restricted Stock may not be sold or transferred by
the Participant until any restrictions that have been established by the
Committee have lapsed.

7.6: FORFEITURE. Upon a termination by the Participant or the Company, of
the Participant's employment for any reason during the period any restrictions
are in effect, all Restricted Stock held by the Participant shall be forfeited
without compensation to the Participant unless the Committee decides that it is
in the best interest of the Company to permit individual exceptions.

7.7: PAYMENT OF TAXES. To enable the Corporation to meet any applicable
federal, state or local withholding tax requirements arising as a result of the
grant or vesting of a Stock Award, the Participant shall pay the Corporation the
amount of tax to be withheld or may elect to satisfy such obligation: (a) by
having the Corporation withhold shares that otherwise would be delivered to the
Participant pursuant to the granting or vesting of a Stock Award, for which the
tax is being withheld; (b) by delivering to the Corporation other shares of
Common Stock of the Corporation owned by the Participant prior to the grant or
vesting of a Stock Award; or (c) 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 the
Corporation or delivered to the Corporation pursuant to this Section 7 shall be
the Market Price on the date used to determine the amount of tax to be withheld.

SECTION 8: PERFORMANCE AWARDS.

8.1: AWARD TYPES. The Committee may grant, either alone or in addition to
other awards granted under the Plan, awards of Stock and other awards that are
valued in whole or in part by reference to, or are otherwise based on, the
market value of the Common Stock, or other securities of the Company
("Performance Awards") to such Participants as the Committee (or the Chief
Executive Officer of the Company, if the Committee in its discretion delegates
the right to allocate awards pursuant to Section 4) authorizes and under such
terms as the Committee establishes. Performance Awards may be paid in Common
Stock, Restricted Stock or other securities of the Company, cash or any other
form of property as the Committee shall determine.

8.2: TERMS AND CONDITIONS OF AWARDS. Performance Awards shall entitle the
Participant to receive an award if the measures of performance established by
the Committee are met. The measures of performance shall be established by the
Committee in its absolute discretion. The Committee shall determine the times at
which Performance Awards are to be made and all conditions of such awards.

8.3: AGGREGATE AND INDIVIDUAL LIMITS. Notwithstanding any provision in this
Plan to the contrary, the combined number of shares granted under this Plan
pursuant to Performance Awards or Stock Awards shall not exceed 20% of the
maximum number of shares of stock available under the Plan as provided in
Sections 5.2 and 5.3. In addition, no more than 100,000 shares pursuant to any
Performance Awards shall be granted to one individual in a calendar year unless
pursuant to a multi-year award.

8.4: TRANSFERABILITY. The Participant shall not be permitted to sell,
assign, transfer, pledge or otherwise encumber shares received pursuant to this
Section 8 prior to the date on which any applicable restriction or performance
period established by the Committee lapses.

8.5: PAYMENT OF TAXES. To enable the Corporation to meet any applicable
federal, state or local withholding tax requirements arising as a result of the
vesting or payment of Performance Awards, a Participant shall pay the
Corporation the amount of tax to be withheld or may elect to satisfy such
obligation: (a) by having the Corporation withhold shares that otherwise would
be delivered to the Participant pursuant to the vesting or payment of
Performance Awards for which the tax is being withheld; (b) by delivering to the
Corporation other shares of Common Stock of the Corporation owned by the
Participant prior to the vesting or payment of Performance Awards; or (c) 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 used to
determine the tax to be withheld. The value of any share of Common Stock to be
withheld by the Corporation or delivered to the Corporation pursuant to this
Section 8.5 shall be the Market Price on the date used to determine the amount
of tax to be withheld.

SECTION 9: GENERAL PROVISIONS.

9.1: ASSIGNMENT. Subject to the provisions of Section 6.5, if applicable,
any assignment or transfer of any awards without the written consent of the
Company shall be null and void.

9.2: NO TRUST. Nothing contained herein shall require the Company to
segregate any monies from its general funds, or to create any trusts, or to make
any special deposits for any immediate or deferred amounts payable to any
Participant for any year.

9.3: NO RIGHT TO EMPLOYMENT. Participation in this Plan shall not affect
the Company's right to discharge a Participant.

9.4: CANCELLATION AND RESCISSION OF AWARDS.

(a) The Committee shall have the discretion with respect to any award
granted under this Plan to establish upon its grant conditions under which: (i)
the award may be later forfeited, cancelled, rescinded, suspended, withheld or
otherwise limited or restricted; or (ii) gains realized by the grantee in
connection with an award or an award's exercise may be recovered; provided that
such conditions and their consequences are: (A) clearly set forth in the grant
agreement or other grant document; and (B) fully comply with applicable laws.
These conditions may include, without limitation, actions by the Participant
which constitute a conflict of interest with the Company, are prejudicial to the
Company's interests, or are in violation of any non-compete agreement or
obligation, any confidentiality agreement or obligation, the Company's
applicable policies or the Participant's terms and conditions of employment.

(b) The Committee may require, upon exercise, payment or delivery
pursuant to an award, that the Participant certify in a manner acceptable to the
Company that he or she is in compliance with the terms and conditions of the
award grant.

SECTION 10: AMENDMENT, SUSPENSION, OR TERMINATION.

10.1: The Board of Directors may suspend, terminate, or amend the Plan,
including, but not limited to, such amendments as may be necessary or desirable
resulting from changes in the federal income tax laws and other applicable laws,
but may not, without the affirmative vote of a majority of all votes duly cast
on the matter at a meeting of the stockholders of the Company (provided that the
total votes cast on the matter represent over 50% of the shares entitled to vote
on the matter): (a) increase the total number of shares of Stock that may be
optioned or granted under this Plan; or (b) amend Section 6.4 with respect to
re-pricing of Stock Option Awards.

10.2: It is the Company's intent that the Plan comply in all respects with
Rule 16b-3 under the Exchange Act and any related regulations. If any provision
of this Plan is later found not to be in compliance with such Rule and
regulations, the provisions shall be deemed null and void. All grants to, and
exercises of options by Executive Officers under this Plan shall be executed in
accordance with the requirements of Section 16 of the Exchange Act and
regulations promulgated thereunder.

SECTION 11: GOVERNING LAW.

The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the laws
of the State of Connecticut and applicable federal law.

SECTION 12: EFFECTIVE DATE AND DURATION OF THE PLAN.

This Plan shall be effective as of January 1, 2002. No award shall be
granted under this Plan on or after January 1, 2012.

EXHIBIT C

PRAXAIR, INC. PLAN FOR DETERMINING
PERFORMANCE-BASED AWARDS UNDER SECTION 162(m)

SECTION 1. PURPOSE. The purpose of the Praxair, Inc. Plan for Determining
Performance-Based Awards under Section 162(m) (the "Plan") is to establish a
process and criteria for administering and determining awards to be made to
certain of Praxair, Inc.'s (the "Company") senior executives by the Company
under the Company's long term incentive and variable compensation plans or
otherwise so that such awards qualify as "performance-based compensation" within
the meaning of Internal Revenue Code Section 162(m).

SECTION 2. ELIGIBLE EMPLOYEES. Any Executive Officer of the Company, as such
term is defined for purposes of Section 16 of the Securities and Exchange Act of
1934, shall be eligible for designation as a Participant for Performance Awards
determined under this Plan.

SECTION 3. DEFINITIONS. The following terms utilized in this Plan shall have the
following meanings:

"Committee" shall mean the Compensation and Management Development
Committee of the Board of Directors of the Company or any other Committee
designated by the Board for the purpose of administering this Plan so long
as each of the members comprising the Committee is an "outside director"
within the meaning of Section 162(m).

"Long Term Incentive Plan" shall mean any Praxair, Inc. long term incentive
plan or any other long term incentive program adopted by the Board of
Directors of the Company.

"Participant" shall mean for a Performance Award related to a calendar year
or Performance Period, each eligible employee who is designated as a
Participant for such a year or period by the Committee in accordance with
Section 9 herein.

"Performance Award" shall mean either an Annual Performance Award (Section
5 herein) or payment pursuant to Long Term Performance Opportunities
(Section 6 herein) or both as the context indicates.

"Performance Measures" shall mean for a calendar year or Performance Period
one or more of the business criteria set forth in Section 7 herein.

"Performance Period" shall mean a period longer than one year over which
performance is to be measured for purposes of Long Term Performance
Opportunities in accordance with Section 6 herein.

"Section 162(m)" shall mean Section 162(m) of the Internal Revenue Code of
1986, and the regulations promulgated thereunder, all as amended from time
to time.

"Variable Compensation Plan" shall mean any Praxair, Inc. variable
compensation plan, or other annual award program adopted by the Board of
Directors of the Company.

SECTION 4. TERM. The Plan shall be effective as of January 1, 2002, and shall be
applicable for all future fiscal years of the Company unless amended or
terminated by the Committee pursuant to Section 12. Notwithstanding the
foregoing, the material terms (as defined in Section 162(m)) of this Plan shall
be subject to re-approval by the stockholders of the Company no later than the
first meeting of stockholders to take place in 2006, if such approval is
required by Section 162(m) at the time, and if such terms have not been earlier
modified and submitted for stockholder approval.

SECTION 5. ANNUAL PERFORMANCE AWARDS.

5.1: For each calendar year, each Participant may be entitled to receive a
payment ("Annual Performance Award") pursuant to a Variable Compensation Plan in
an amount determined by the Committee as provided in this Plan. To the extent
permitted by the Variable Compensation Plan, the payment of Annual Performance
Awards may be made in cash, common stock or restricted stock of the Company, or
a combination thereof.

5.2: In no event shall any award amount determined by the Committee as
provided in this Plan, when aggregated with all other awards made pursuant to
the applicable Variable Compensation Plan in the calendar year, exceed any
applicable calendar year or other applicable aggregate limit set forth in that
Variable Compensation Plan.

5.3: The maximum Annual Performance Award paid, in cash or stock, to a
Participant for a calendar year may not exceed the lesser of: (i) three times
(3X) the annual rate of salary paid to the Participant as of the last day of the
preceding calendar year; and (ii) the applicable per-participant limit, if any,
set forth in the applicable Variable Compensation Plan.

SECTION 6. LONG TERM PERFORMANCE OPPORTUNITIES.

6.1: For any performance period designated by the Committee and having a
duration longer than one year (a "Performance Period"), the Committee may
establish the terms and conditions of award opportunities ("Long Term
Performance Opportunities") entitling the Participant to receive payments
pursuant to a Long Term Incentive Plan at the end of the Performance Period. The
amount of such payments shall be determined according to the conditions of the
Long Term Performance Opportunities established by the Committee as provided in
this Plan. To the extent permitted by the applicable Long Term Incentive Plan,
Long Term Performance Opportunities may consist of stock or other grants that
are valued in whole or in part by reference to, or are otherwise based on, the
market value of the common stock, restricted stock or other securities of the
Company, and may be paid in common stock, restricted stock or other securities
of the Company, cash or any other form of property as the Committee shall
determine.

6.2: A Participant shall not be permitted to sell, assign, transfer, pledge
or otherwise encumber shares received as Long Term Performance Opportunities
prior to the date on which any applicable restriction or Performance Period
established by the Committee lapses.

6.3: In no event shall any award amount determined by the Committee as
provided in this Plan, when aggregated with all other awards made pursuant to
the applicable Long Term Incentive Plan in the calendar year, exceed any
applicable calendar year or other applicable aggregate limit set forth in that
Long Term Incentive Plan.

6.4: The total aggregate payments, in cash or stock, made to a Participant
for a Performance Period pursuant to Long Term Performance Opportunities for
such period shall not exceed the lesser of: (i) $4,000,000

times the length of the Performance Period in years; and (ii) the applicable
per-participant limit, if any, set forth in the applicable Long Term Incentive
Plan.

6.5: The Committee shall have the discretion, at the time Performance Goals
are established for a Long Term Performance Opportunity pursuant to Section 9
herein, to establish terms for payment on such Long Term Performance Opportunity
in the event a Change-in-Control (as defined in the applicable Long Term
Incentive Plan) occurs prior to the end of the applicable Performance Period;
provided, however, that in no event shall any such payment be in excess of the
maximums set forth in this Section 6.

SECTION 7. PERFORMANCE MEASURES.

7.1: For any calendar year or Performance Period, the Committee may
designate one or more of the business criteria ("Performance Measures") set
forth in this Section 7 for use in determining the amount of a Performance Award
for an individual in relation to such year or period; provided that such
designation would not subject any Performance Award to the deduction limitations
of Section 162(m). Performance Measures designated for any Participant in a
calendar year or Performance Period may be different from those designated for
other Participants in said year or period as the Committee may determine. To the
extent applicable to any Performance Measure, the Committee may specify a
Performance Measure in relation to total Company performance or in relation to
the performance of identifiable business unit(s) of the Company.

7.2: NET INCOME. "Net Income" shall mean net income before the after-tax
effect of any special charge or gain or cumulative effect of a change in
accounting as reported in a statement of income for a year or period.

7.3: OPERATING PROFIT. "Operating Profit" shall mean operating profit
before any special charges or gains as reported in a statement of income for a
year or period.

7.4: SG&A. "SG&A" shall mean selling, general and administrative ("SG&A")
costs as reported in a statement of income for a year or period.

7.5: SALES. "Sales"shall mean sales as reported in a statement of income
for a year or period.

7.6: CASH FLOW. "Cash Flow" shall mean Net Income, plus depreciation and
amortization, plus income less dividends for minority interests, plus or minus
changes in working capital, minus dividends paid to Praxair shareholders.

7.7: RETURN ON CAPITAL. "Return on Capital" shall mean NOPAT divided by
average Capital for the year or period. "Capital" shall mean the sum of: (i)
short term debt; (ii) long term debt; (iii) current portion of long term debt;
(iv) total minority interest; and (v) shareholders equity adjusted to reverse
the effect of 1992 accounting changes (FAS106 and 112), all as reported in or
determined from a balance sheet at the end of a year or period. "NOPAT" shall
mean Operating Profit after tax plus equity income.

7.8: RETURN ON EQUITY. "Return On Equity" shall mean Net Income divided by
average shareholders' equity for the year or period.

7.9: TOTAL SHAREHOLDER RETURN. "Total Shareholder Return" shall mean the
percent increase over a year or period in the value of an investor's holdings in
the Company's common stock assuming reinvestment of dividends.

7.10: DEBT TO CAPITAL RATIO. "Debt to Capital Ratio" shall mean Debt
divided by Capital. "Debt" shall mean the sum of short-term debt, the current
portion of long term debt and long term debt, all as reported in or determined
from a balance sheet at the end of a year or period.

7.11: EVA. "EVA" shall mean economic value added calculated as NOPAT (less
South American minority share) less the cost of average Capital (less South
American minority capital) for the year or period.

SECTION 8. PERFORMANCE GOALS.

8.1: For each Performance Measure designated by the Committee, the
Committee shall designate a specific, measurable target, schedule or threshold
("Performance Goal") against which actual performance is to be measured for
purposes of determining the amount of any Performance Award; provided that any
such designation would not subject any Performance Award to the deduction
limitations of Section 162(m).

8.2: A Performance Goal may be expressed in any form as the Committee may
determine including, but not limited to: (1) percentage growth; (2) absolute
growth; (3) cumulative growth; (4) performance in relation to an index; (5)
performance in relation to peer company performance; (6) a designated absolute
amount; (7) percent of sales; and (8) per share of common stock outstanding.

SECTION 9. DETERMINATION AND PAYMENT OF AWARDS.

9.1: No later than ninety (90) days after the commencement of a calendar
year or Performance Period, the Committee shall designate or approve for the
Performance Awards relating to such year or period: (i) the individuals who will
be Participants, if any; (ii) the Performance Measures; (iii) if there is more
than one Performance Measure, the weighting of the Performance Measures in
determining the Performance Award; (iv) the Performance Goals and pay-out matrix
or formula for each Performance Measure; and (v) the target Performance Award
for each Participant.

9.2: Following the end of a calendar year or Performance Period, the
Committee shall determine the Performance Award for each Participant by:

(1) comparing actual performance for each measure against the pay-out
matrix approved for such year or period,

(2) multiplying the pay-out percentage from the pay-out matrix for
each Performance Measure by the appropriate weighting factor, and

(3) summing the weighted pay-out percentages and multiplying their
overall pay-out percentage by the Participant's target Performance Award.

9.3: Notwithstanding anything contained in this Plan to the contrary, the
Committee in its sole discretion may reduce any Performance Award for any
Participant to any amount, including zero, prior to the certification by
resolution of the Committee of the amount of such Performance Award.

9.4: As a condition to the right of a Participant to receive a Performance
Award, the Committee shall first certify, by resolution of the Committee, that
the Performance Award has been determined in accordance with the provisions of
this Plan.

9.5: If, during a calendar year or Performance Period, a Participant
terminates employment for any reason, the Committee, in its discretion, may
provide that the Participant (or his or her beneficiary) receive, after the end
of such year or period, all or any portion of the Performance Award related to
such year or period to which the Participant would otherwise have been entitled.

9.6: Performance Awards for a calendar year or Performance Period shall be
determined as soon as practicable after such year or period and shall be paid no
later than 75 days following such year or period unless deferred as provided in
Section 9.7 hereof.

9.7: The Committee may in its discretion elect to defer payment of any
Performance Award until such date before or after retirement as a Participant
may request upon such terms and conditions as may be approved or established by
the Committee in its sole judgment. Such terms may include the payment of
interest or dividend equivalents on deferred amounts.

9.8: The Company shall withhold from any Performance Award or payments
determined under this Plan any amount of withholding taxes due in respect of a
Performance Award, its deferral or payment. Such taxes shall be withheld or paid
in the manner provided by the Variable Compensation Plan or Long Term Incentive
Plan pursuant to which the award or payment is made.

9.9: Participation in this Plan does not preclude Participants from
participation in any other benefit or compensation plans or arrangements of the
Company.

SECTION 10. ADMINISTRATION AND INTERPRETATION. The Plan shall be administered by
the Committee, which shall have the sole authority to make rules and regulations
for the administration of the Plan. The interpretations and decisions of the
Committee with regard to the Plan shall be final and conclusive. The Committee
may request advice or assistance or employ such persons (including, without
limitation, legal counsel and accountants) as it deems necessary for the proper
administration of the Plan.

SECTION 11. ADMINISTRATIVE EXPENSES. Any expense incurred in the administration
of the Plan shall be borne by the Company out of its general funds.

SECTION 12. AMENDMENT OR TERMINATION. The Committee may from time to time amend
the Plan in any respect or terminate the Plan in whole or in part, provided that
no such action shall increase the amount of any Performance Award for which
Performance Goals have been established but which has not yet been earned or
paid: and provided further that such action will not cause a Performance Award
to become subject to the deduction limitations contained in Section 162(m).

SECTION 13. NO ASSIGNMENT. The rights hereunder, including without limitation
rights to receive a Performance Award, shall not be pledged, assigned,
transferred, encumbered or hypothecated by an employee of the Company, and
during the lifetime of any Participant any payment of a Performance Award shall
be payable only to such Participant. A Participant, however, may designate in
writing at any time, and from time to time, one or more beneficiaries to
receive, in the event of the Participant's death, the payment of any award
determined pursuant to Section 9 herein or any deferred Performance Award;
provided that such designation is received by the Company prior to such death.

SECTION 14. THE COMPANY. For purposes of this Plan, the "Company" shall include
the successors and assigns of the Company, and this Plan shall be binding on any
corporation or other person with which the Company is merged or consolidated.

SECTION 15. STOCKHOLDER APPROVAL. This Plan shall be subject to approval by a
vote of the stockholders of the Company at the 2001 Annual Meeting of
Shareholders.

SECTION 16. NO RIGHT TO EMPLOYMENT. The designation of an employee as a
Participant, the determination of the amount of any Performance Award, or the
establishment of the terms of any Long Term Performance Opportunity shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any affiliate or subsidiary of the Company.

SECTION 17. GOVERNING LAW. The validity, construction and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Connecticut and applicable federal law.

SECTION 18. NO TRUST. Neither the Plan nor any Performance Award nor any Long
Term Performance Opportunity shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company or any
Participant. To the extent any Participant acquires a right to receive payments
from the Company in respect to any Performance Award or Long Term Performance
Opportunity, such right shall be no greater than the right of any unsecured
general creditor of the Company.

SECTION 19. SECTION 162(m). It is the intention of the Company that all awards
determined in accordance with this Plan be excluded from the deduction
limitations contained in Section 162(m). Therefore, if any Plan provision is
found not to be in compliance with the "performance-based" compensation
exception contained in Section 162(m), that provision shall be deemed amended so
that the Plan does so comply to the extent permitted by law and deemed advisable
by the Committee, and in all events the Plan shall be construed in favor of its
meeting the "performance-based" compensation exception contained in Section
162(m).

[PRAXAIR LOGO] 39 Old Ridgebury Road, Danbury, CT 06810-5113

VOTE BY INTERNET OR TELEPHONE
24 HOURS A DAY, 7 DAYS A WEEK

YOU MAY VOTE YOUR SHARES BY PROXY USING ANY OF THE FOLLOWING METHODS. PLEASE
CONSIDER THE CONVENIENCE OF INTERNET OR TELEPHONIC VOTING. THESE METHODS ALSO
REDUCE PRAXAIR'S EXPENSES.

THE INTERNET AND TELEPHONE VOTING FACILITIES WILL CLOSE AT 5:00 PM EASTERN TIME
ON APRIL 23, 2001.

BY INTERNET BY TELEPHONE BY MAIL

ACCESS THE WEBSITE ON A TOUCH-TONE TELEPHONE, DIAL THE MARK, SIGN AND DATE THE PROXY FORM
TOLL-FREE NUMBER ATTACHED BELOW, DETACH IT, AND RETURN
HTTP://PROXY.SHAREHOLDER.COM/PX IT PROMPTLY IN THE ENCLOSED ENVELOPE.
1-800-481-9816
AND FOLLOW THE INSTRUCTIONS. YOU WILL HOW TO RECEIVE YOUR ANNUAL REPORT
BE ASKED TO ENTER THE NUMBER LOCATED AND FOLLOW THE INSTRUCTIONS. YOU WILL AND PROXY STATEMENT ON-LINE
BELOW IN THE BOX LABELED "CONTROL BE ASKED TO ENTER THE NUMBER LOCATED
NUMBER". BELOW IN THE BOX LABELED "CONTROL SAVE PRAXAIR FUTURE POSTAGE AND
NUMBER". PRINTING EXPENSE BY CONSENTING TO
RECEIVE FUTURE ANNUAL REPORTS AND
PROXY STATEMENTS ON-LINE ON THE
INTERNET. WHETHER YOU VOTE BY
INTERNET, BY TELEPHONE OR BY
MAIL, YOU WILL BE GIVEN THE OPPOR-
TUNITY TO CONSENT TO FUTURE
ELECTRONIC DELIVERY. SEE PAGE 4 OF
THE PROXY STATEMENT FOR MORE INFOR-
MATION ABOUT THIS OPTION.

-------------------------------------
IF YOU HAVE SUBMITTED YOUR PROXY BY
INTERNET OR BY TELEPHONE, THERE IS NO
NEED FOR YOU TO MAIL BACK THE PROXY
CARD ATTACHED BELOW.
-------------------------------------

USE THE INTERNET TO VOTE o IT'S FAST AND CONVENIENT ---------------------------------------------
CONTROL NUMBER FOR
INTERNET OR TELEPHONE VOTING
HTTP://PROXY.SHAREHOLDER.COM/PX ---------------------------------------------

DETACH PROXY CARD HERE ONLY IF YOU ARE NOT VOTING BY INTERNET OR BY TELEPHONE

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PLEASE DETACH HERE
YOU MUST DETACH THIS PORTION OF THE PROXY CARD
BEFORE RETURNING IT IN THE ENCLOSED ENVELOPE
--------

--------

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: 01 -Alejandro Achaval, 02 - Ronald L. Kuehn, Jr., 03 - 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. Approval of the 2002 Praxair, Inc. Long Term Incentive 3. Approval of the Praxair, Inc. Plan for Determining
Plan. Performance-Based Awards under Section 162(m).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PLAN. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PLAN.

FOR / / AGAINST / / ABSTAIN / /
FOR / / AGAINST / / ABSTAIN / /

4. 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

Consent to future electronic delivery of Annual Report/Proxy
Statement (see explanation at page 4 of the Proxy Statement)

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 _________________________________________

_________________________________________
--------------

SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED VOTES MUST BE INDICATED /X/
ENVELOPE IF YOU DO NOT VOTE BY INTERNET OR TELEPHONE (X) IN BLACK OR BLUE INK.

[PRAXAIR LOGO]

ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 2001 AT 9:30 AM
SHERATON DANBURY
(FORMERLY THE 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 Sheraton 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 up over the highway. The Sheraton 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 Sheraton 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 Sheraton 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 Sheraton 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
Sheraton is on your left.

AIRPORT ARRIVAL:

From the Ground Transportation Center for Connecticut Limousine Service to
Danbury. At the Danbury depot, call the Sheraton Danbury and they will provide
shuttle service for you.

There is no car or ground transportation service to Danbury from Westchester
Airport (White Plains, NY) or Windsor-Bradley Airport (Hartford, CT).

DETACH PROXY CARD HERE ONLY IF YOU ARE NOT VOTING BY INTERNET OR BY TELEPHONE

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[PRAXAIR LOGO] PROXY/VOTING INSTRUCTION CARD

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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PRAXAIR, INC.
FOR THE ANNUAL MEETING ON APRIL 24, 2001

I (we) hereby authorize Dennis H. Reilley, James S. Sawyer 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 Sheraton Danbury (formerly the Danbury
Hilton and Towers), 18 Old Ridgebury Road, Danbury, Connecticut on April
24, 2001 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 OR UCAR 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
(Continued and to be dated and NEW YORK, NY 10203-0140
signed on the reverse side.)