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Management Board dated February 13, 2009

Termination indemnities: Benoît Potier

The Board of Directors decides that, in the event of the forced departure of Mr Potier (removal from office, non-renewal of his duties, request for resignation) from his corporate offices as Chairman and Chief Executive Officer

  • a)related to a change of strategy, or
  • b)that takes place within 24 months following the acquisition of control of Air Liquide by a person acting alone or several persons acting in concert (the notion of control being understood within the meaning of this term as defined, as of the date hereof, by Article L. 233-3 of the French Commercial Code),

and subject to the conditions set out below, the Company undertakes to pay Mr Potier a fixed aggregate indemnity in full discharge equal to 24 months’ gross fixed and variable remuneration, the calculation being based on the average monthly amount of gross fixed and variable remuneration received by Mr Potier, during the 24 months prior to departure. It is specified that in the case referred to in paragraph (b), the indemnity is due, whether or not the forced departure is related to a change in strategy, but without Mr Potier being able to receive such indemnity in conjunction with that due pursuant to paragraph (a).

In accordance with the provisions of Article L 225-42-1 of the French Commercial Code introduced by French Law No. 2007-1223 of August 21, 2007 to promote work, employment and purchasing power, the Board of Directors decides that (i) payment of the indemnity due in respect of forced departure as provided for above, and (ii) the taking into account of Mr Potier’s length of service as Chairman and Chief Executive Officer for the calculation of his statutory indemnity and that provided for by the collective bargaining agreement that may be paid, where applicable, on account of termination of his employment contract, are subject to compliance, as duly recorded by the Board of Directors at the time of termination of such office or thereafter, of conditions related to Mr Potier’s performance assessed in light of the Company’s own performance, defined as of the date hereof as follows:

Entitlement to the rights referred to in paragraphs (i) and (ii) above will depend on, and the amount of the indemnity paid pursuant to paragraph (i) will be adjusted on the basis of, the average of the annual variance between the Return on capital employed after tax (ROCE) and the Weighted Average Cost of Capital (WACC) (assessed on the basis of net equity according to the financial statements) calculated (on the basis of the certified consolidated financial statements approved by the annual shareholders’ meeting) with respect to the last 3 financial years prior to the financial year in which the departure occurs. For the purposes of this calculation, the variance between ROCE and WACC will be measured with regard to each financial year and will be calculated on the basis of the average of the three annual variances for the last 3 financial years prior to the financial year during which such departure takes place.

The following formulas will be applied:
Average variance (ROCE – WACC) Proportion of the indemnity due
≥ 200 bp* 100%
≥ 100 bp and < 200 bp 66%
≥ 50 bp and < 100 bp 50%
≥ 0 bp and < 50 bp 33%
< 0 0

*    bp: basis points

These conditions will be re-examined by the Board of Directors and modified, where applicable, to take into account, in particular, any changes that have taken place in the company’s environment at the time of each renewal of Mr Potier’s term of office and, where applicable, during the course of his term of office.

If the sum of the statutory indemnity or the indemnity under the collective bargaining agreement which may be paid to Mr Potier on account of the termination of his employment contract prior to his forced departure, and the amount of the indemnity payable to him pursuant to the foregoing, exceeds 24 months’ remuneration (calculated as specified above), this latter indemnity will be reduced such that the sum of the two indemnities is equal to 24 months’ remuneration

It is specified, as needs be, that any statutory indemnity or indemnity provided for by the collective bargaining agreement that may be paid, where applicable, to Mr Potier on account of termination of his employment contract, for the fraction of such indemnity that does not take into account Mr Potier’s length of service as Chairman and Chief Executive Officer, shall not be subject to the above-mentioned conditions.

This decision cancels and supersedes the decision made by the Board of Directors at its meeting of February 14, 2008 on the same subject.

After deliberation, the Board of Directors authorises the aforementioned commitment in accordance with the provisions of Articles L 225-38 et seq. of the French Commercial Code, with Mr Potier not taking part in the vote on this commitment that concerns him. In accordance with the provisions of Article L 225-42-1 of the French Commercial Code, this decision and the decision by the Board of Directors making an assessment with regard to achievement of the performance conditions at the required time, will be made public in accordance with the terms and conditions and within the deadlines set by the regulations in force. The above-mentioned agreement will be submitted for the approval of the shareholders within the scope of a specific resolution for Mr Potier, a renewed approval of the agreements by the shareholders’ meeting being required for each renewal of the beneficiary’s term of office. The Statutory Auditors will be informed of this authorisation.

Mr Potier gives his agreement with regard to the above-mentioned decision.

Termination indemnities: Klaus Schmieder

The Board decides that, in the event of the forced departure of Mr Schmieder (removal from office, non-renewal of his duties, request for resignation) from his corporate office as Senior Executive Vice-President which takes place within a period of 24 months following the acquisition of the control of Air Liquide by a person acting alone or several persons acting in concert, the Company undertakes to pay Mr Schmieder an indemnity equal to 12 months’ gross fixed and variable remuneration, the calculation being based on the average monthly amount of gross fixed and variable remuneration received by Mr Schmieder, on any basis whatsoever, during the 24 months prior to departure. The acquisition of control is to be understood within the meaning of this term as defined, as of the date hereof, by Article L. 233-3 of the French Commercial Code.

In accordance with the provisions of Article L 225-42-1 of the French Commercial Code introduced by French Law No. 2007-1223 of August 21, 2007 to promote work, employment and purchasing power, the Board of Directors decides that payment of the indemnity in respect of forced departure provided for above, is subject to compliance, as duly recorded by the Board of Directors at the time of termination of such duties or thereafter, of conditions related to Mr Schmieder’s performance assessed in light of the Company’s own performance, defined as of the date hereof as follows:

Entitlement to the indemnity will depend on, and the amount of such indemnity will be adjusted on the basis of, the average of the annual variance between the Return on capital employed after tax (ROCE) and the Weighted Average Cost of Capital (WACC) (assessed on the basis of net equity according to the financial statements) calculated (on the basis of the certified consolidated financial statements approved by the annual shareholders’ meeting) with respect to the last 3 financial years prior to the financial year in which the departure occurs. For the purposes of this calculation, the variance between ROCE and WACC will be measured with regard to each financial year and will be calculated on the basis of the average of the three annual variances for the last 3 financial years prior to the financial year during which such departure takes place.

The following formulas will be applied:
Average variance (ROCE – WACC) Proportion of the indemnity due
≥ 200 bp* 100%
≥ 100 bp and < 200 bp 66%
≥ 50 bp and < 100 bp 50%
≥ 0 bp and < 50 bp 33%
< 0 0

*    bp: basis points

These conditions will be re-examined by the Board of Directors and modified, where applicable, to take into account, in particular, any changes that have taken place in the company’s environment at the time of each renewal of Mr Schmieder’s term of office or, where applicable, during the course of his term of office.

Any amounts, where applicable, that may be paid in accordance with the terms of the employment contract in the event that the salaried duties covered by such contract were also to be concurrently terminated will be added to the payment of such indemnity, without the combined payments made in respect of the employment contract and the forced departure set out above being able to exceed 24 months’ fixed and variable remuneration (calculated as set out above). If this limit is reached, the amount paid in respect of termination of the corporate office would be reduced accordingly for such amount.

It is specified, as needs be, that any statutory indemnity or indemnity provided for by the collective bargaining agreement that may be paid, where applicable, to Mr Schmieder in respect of termination of his employment contract, and any non-competition indemnity due in respect of such termination, shall not be subject to the above-mentioned conditions.

This decision cancels and supersedes the decision made by the Board of Directors at its meeting of February 14, 2008, as restated by the Board of Directors on May 7, 2008 on the same subject.

After deliberation, the Board of Directors authorises the aforementioned commitment in accordance with the provisions of Articles L 225-38 et seq. of the French Commercial Code. In accordance with the provisions of Article L 225-42-1 of the French Commercial Code, this decision and the decision by the Board of Directors making an assessment with regard to achievement of the performance conditions at the required time, will be made public in accordance with the terms and conditions and within the deadlines set by the regulations in force. The above-mentioned agreement will be submitted for the approval of the shareholders within the scope of a specific resolution for Mr Schmieder, a renewed approval of the agreements by the shareholders’ meeting being required for each renewal of the beneficiary’s term of office. The Statutory Auditors will be informed of this authorisation.

Mr Schmieder gives his agreement with regard to the above-mentioned decision.

Termination indemnities: Pierre Dufour

The Board of Directors decides that, in the event of the forced departure of Mr Dufour (removal from office, non-renewal of his duties, request for resignation) from his corporate office as Senior Executive Vice-President

a) related to a change of strategy, or

b) that takes place within 24 months following the acquisition of control of Air Liquide by a person acting alone or several persons acting in concert (the notion of control being understood within the meaning of this term as defined, as of the date hereof, by Article L. 233-3 of the French Commercial Code),

and subject to the conditions set out below, the Company undertakes to pay Mr Dufour a fixed aggregate indemnity in full discharge equal to 24 months’ gross fixed and variable remuneration, the calculation being based on the average monthly amount of gross fixed and variable remuneration received by Mr. Dufour, on any basis whatsoever, during the 24 months prior to departure. It is specified that in the case referred to in paragraph (b), the indemnity is due, whether or not the forced departure is related to a change in strategy, but without Mr Dufour being able to receive such indemnity in conjunction with that due pursuant to paragraph (a).

Payment of the indemnity provided for above is subject to achievement, as duly recorded by the Board of Directors at the time of termination of such office or thereafter, of conditions related to Mr Dufour’s performance assessed in light of the Company’s own performance, defined as of the date hereof as follows:

Entitlement to the indemnity will depend on, and the amount of such indemnity will be adjusted on the basis of, the average of the annual variance between the Return on capital employed after tax (ROCE) and the Weighted Average Cost of Capital (WACC) (assessed on the basis of net equity according to the financial statements) calculated (on the basis of the certified consolidated financial statements approved by the annual shareholders’ meeting) with respect to the last 3 financial years prior to the financial year in which the departure occurs. For the purposes of this calculation, the variance between ROCE and WACC will be measured with regard to each financial year and will be calculated on the basis of the average of the three annual variances for the last 3 financial years prior to the financial year during which such departure takes place.

The following formulas will be applied:
Average variance (ROCE – WACC) Proportion of the indemnity due
≥ 200 bp* 100%
≥ 100 bp and < 200 bp 66%
≥ 50 bp and < 100 bp 50%
≥ 0 bp and < 50 bp 33%
< 0 0

*    bp: basis points

These conditions will be re-examined by the Board of Directors and modified, where applicable, to take into account, in particular, any changes that have taken place in the company’s environment at the time of each renewal of Mr Dufour’s term of office or, where applicable, during the course of his term of office.

If the sum of (i) any statutory indemnity or indemnity under the collective bargaining agreement which may be paid to Mr Dufour on account of the termination of his employment contract prior to his forced departure as provided for above or concurrently with such departure, as well as any non-competition indemnity payable in respect of this termination or any other indemnity received on a similar basis from subsidiaries, and (ii) the indemnity payable to him pursuant to the foregoing, exceeds 24 months’ remuneration (calculated as specified above), this latter indemnity will be reduced such that the sum of the indemnities is equal to 24 months’ remuneration. In the event that this employment contract is not terminated concurrently with the above-mentioned forced departure, if the sum of (i) the statutory indemnity and the indemnity under the collective bargaining agreement as well as the non-competition indemnity to which he could claim entitlement as of such date had his employment contract been terminated as of such date and (ii) the indemnity payable to him pursuant to the foregoing, exceeds 24 months’ remuneration (calculated as specified above), this latter indemnity will be reduced such that the sum of the indemnities is equal to 24 months’ remuneration.

It is specified, as needs be, that any statutory indemnity or indemnity provided for by the collective bargaining agreement that may be paid, where applicable, to Mr Dufour in respect of termination of his employment contract, and any non-competition indemnity due in respect of such termination, shall not be subject to the above-mentioned conditions.

This decision cancels and supersedes the decision made by the Board of Directors at its meeting of February 14, 2008, as restated by the Board of Directors on May 7, 2008 on the same subject.

After deliberation, the Board of Directors authorises the aforementioned commitment in accordance with the provisions of Articles L 225-38 et seq. of the French Commercial Code. In accordance with the provisions of Article L 225-42-1 of the French Commercial Code, this decision and the decision by the Board of Directors making an assessment with regard to achievement of the performance conditions at the required time, will be made public in accordance with the terms and conditions and within the deadlines set by the regulations in force. The above-mentioned agreement will be submitted for the approval of the shareholders within the scope of a specific resolution for Mr Dufour, a renewed approval of the agreements by the shareholders’ meeting being required for each renewal of the beneficiary’s term of office. The Statutory Auditors will be informed of this authorisation.

Mr Dufour gives his agreement with regard to the above-mentioned decision.