To assist the Board in determining the independence of each director, the Board's Governance & Nominating Committee has established the following minimum Director Independence Standards.
Independence standards for board service
A director will not be considered "independent" if:
- the director is, or has been within the last three years, an employee of the Company;
- an immediate family member of the director is, or has been within the last three years, an executive officer of the Company;
- the director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $100,000 in direct compensation from the Company, other than:
- director's fees and pension or other forms of deferred compensation for prior service with the Company, provided that such compensation is not contingent on continued service, and
- compensation received by a director's immediate family member for service as an employee of the Company (other than as an executive officer);
- the director or an immediate family member of the director is a current partner of a firm that is Company's internal or external auditor;
- the director is a current employee of such firm;
- the director has an immediate family member who is a current employee of such firm and who participates in the firm's audit, assurance or tax compliance (but not tax planning) practice; or
- the director or an immediate family member of the director was within the last three years (but is no longer) a partner or employee of such firm and personally worked on the Company's audit within that time;
- a present executive officer of the Company serves or served on the compensation committee of the board of directors of a company that, at the same time within the last three years, employs or employed either the director or an immediate family member of the director as an executive officer;
- a director is a current employee, or an immediate family member of a director is a current executive officer, of another company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or two percent (2%) of the other company’s consolidated gross revenues;
- a director serves as an executive officer of a not-for-profit, tax exempt organization, and within the preceding three years, the Company or the Praxair Foundation made discretionary charitable contributions to the organization in any single fiscal year that, in the aggregate, exceeded the greater of
- $1 million, or
- two percent (2%) of that organization's consolidated gross revenues, based on the organization's latest publicly available financial information.
If any director or a director’s immediate family member has or had any relationship or transaction of a type set forth in any of the above standards, and that relationship or transaction does not fully meet the criteria stated in the applicable standard, then the relationship or transaction shall be considered immaterial and deemed to not impair the director’s independence.
Independence standards for audit committee members
In addition to the above standards, a director will not be considered "independent" for purposes of service on the Audit Committee if the director:
- receives any direct or indirect consulting, advisory or other compensatory fee from the Company, other than compensation for service as a director; or
- is an "affiliated" person of the Company (generally, an owner of more than 10% of the Company's voting stock).
(the interpretation and application of these two standards shall be governed by Rule 10A-3 of the Securities and Exchange Commission).
For purposes of these standards:
"immediate family member" includes a person's spouse, parents, step-parents, children, step-children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law and anyone (other than a tenant or domestic employees) who shares the person's home.
"executive officer", when used in the context of a public company, has the same meaning specified for the term "officer" in Rule 16a-1(f) under the Securities Exchange Act of 1934.
"Company" means Praxair, Inc. and any of its consolidated subsidiaries.