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Management Board
dated February 14, 2008

We remind you that those information are also available in the 2007 Reference Document, pages 76 to 78.

Benoît Potier

In 2006, the Board of Directors granted Benoît Potier, in the event of revocation or non-renewal of his terms of office as Chairman and Chief Executive Officer, except for gross negligence, a final and lump-sum fixed amount determined by applying the provisions of the collective bargaining agreement covering all Company executives, by (i) taking into account the number of years of seniority acquired from the beginning as salaried employee and company officer and (ii) using the total fixed and variable average monthly remuneration for the 24 months preceding termination of the term of office as the basis of calculation.

Application of the formula under the above-mentioned provisions of the collective bargaining agreement  limit, in any case, the maximum amount of the aforementioned payment to 20 months’ remuneration. This amount includes any payment that could be due in the event of termination of the employment contract.

Moreover, in the event the term of office is revoked or not renewed in the 24 months following a change in control of Air Liquide, the payment would be increased by 12 months’ remuneration, as defined above.

As this is a related party agreement, this decision was approved by the Shareholders’ Meeting of May 9, 2007.

Pursuant to the new provisions of Article L. 225-42-1 of the French Commercial Code introduced by the law of August 21, 2007, the Board of Directors decided that in order to receive the indemnity provided for under  the above- mentioned agreement, the beneficiary would have to comply August 21, 2007, the Board of Directors decided that in order to receive the indemnity provided for under  the above- mentioned agreement, the beneficiary would have to comply with certain performance conditions assessed in relation to the Company’s performance (see below “Performance conditions - Termination indemnities ”). This agreement, which is presented in the statutory auditors’ special report (on page 228 of the 2007 reference document), is submitted to the Shareholders’ Meeting of May 7, 2008 for approval as part of a specific resolution concerning Benoît Potier.

The Board of Directors took due note that in connection with  amendments to the defined contribution plan described on page 75 (of the 2007 reference document), the Company intends to undertake to grant to all employees concerned by such plan and who are less than 55 and who have at least 20 years of seniority, in the event of early termination of their employment contracts at the Company’s initiative except in case of  serious misconduct or gross negligence , benefits equivalent to those obtained under the plan in the form of a  compensating indemnity  . Concerning Benoît Potier, whose employment contract has been suspended, and who had acquired this right to an annuity as part of the aforementioned plan in the event of removal from his corporate office or dismissal  before the age of 55, the Board of Directors, in order to compensate  for the loss of this right, decided to authorize the commitment undertaken by the Company to pay Benoît Potier,  in the event of a termination in his term of office prior to age of 55 at the Company’s initiative, except for serious or gross negligence, and since   he has acquired at least 20 years of seniority, an indemnity to compensate for the loss of  pension rights, paid in instalments , calculated in accordance with the defined benefit plan mentioned on page 75 (of the 2007 reference document). This commitment will automatically become null and void when Benoît Potier reaches 55.

Pursuant to the new provisions of Article L 225-42-1 of the French Commercial Code introduced by the law of August 21, 2007, the Board of Directors decided that in order to receive the indemnity provided for under the above-mentioned  commitment, the beneficiary would have to comply with certain performance conditions assessed in relation to the Company’s performance (see below “Performance conditions-Indemnity to compensate for the loss of pension rights in respect of term of office”). This commitment, which is presented in the statutory auditors’ special report (on page 228  of the 2007 refernce document), is submitted to the Shareholders’ Meeting of May 7, 2008 for approval as part of a specific resolution concerning Benoît Potier.

Klaus Schmieder

Should the Company unilaterally terminate his employment contract before the age of 60, except in the case of serious negligence and incapacity, Mr. Klaus Schmieder would receive a termination payment equal to the lower of 18 months of the fixed portion of remuneration or the number of months of the fixed portion of his remuneration between such date and his 60th birthday.

In 2006, the Board of Directors granted in favor of Klaus Schmieder, with respect to his duties as Senior Executive Vice-President, in the event of revocation or non-renewal of his term of office, except for serious negligence, a final and lump-sum fixed payment equal to the lower of 18 months of the fixed portion of remuneration in his capacity as Senior Executive Vice-President or the number of months of the fixed portion of his remuneration between such date and his 60th birthday (October 2008). The payment is cumulative with that due with respect to his employment contract in the event of the concomitant termination of the latter.

Moreover, should the revocation or non-renewal occur in the 24 months following a change in control of Air Liquide, this payment would be increased by 12 months’ remuneration, the total fixed and variable average monthly remuneration received in the capacity of salaried employee and company officer for the 24 preceding months serving as the basis of calculation.

As this is a related party agreement, this decision was approved by the Shareholders’ Meeting of May 9, 2007.

Pursuant to the new provisions of Article L 225-42-1 of the French Commercial Code introduced by the law of August 21, 2007, the Board of Directors decided that in order to receive the indemnity provided for under the above-mentioned agreement, the beneficiary would have to comply with certain performance conditions assessed in relation to the Company’s performance (see below “Performance conditions - Termination indemnities”). This agreement, which is presented in the statutory auditors’ special report (on page 228 of the 2007 reference document), is submitted to the Shareholders’ Meeting of May 7, 2008 for approval in connection with a specific resolution concerning Klaus Schmieder.

Pierre Dufour

The Board of Directors granted Pierre Dufour, in the event of revocation or non-renewal of his term of office as Senior Executive Vice-President, except for serious or gross negligence, a final and lump-sum fixed amount determined by applying the provisions of the collective bargaining agreement covering all Company executives, without such payment amounting to less than 12 months’ remuneration, calculated using the total fixed and variable average monthly remuneration for the 24 months preceding termination of the term of office.

Application of the formula under the above-mentioned provisions of the collective bargaining agreement limit, in any case, the maximum amount of the aforementioned payment to 20 months’ remuneration. This amount includes any payment that could be due in the event of termination of the employment contract.

Moreover, in the event the term of office is revoked or not renewed in the 24 months following a change in control of Air Liquide, the payment would be increased by 12 months’ remuneration, as defined above.

Pursuant to the new provisions of Article L 225-42-1 of the French Commercial Code introduced by the law of August 21, 2007, the Board of Directors decided that in order to receive the indemnity provided for under the above-mentioned agreement, the beneficiary would have to comply with certain performance conditions assessed in relation to the Company’s performance (see below “Performance conditions-Termination indemnities”). This agreement, which is presented in the statutory auditors’ special report (on page 228 of the 2007 reference document), is submitted to the Shareholders’ Meeting of May 7, 2008 for approval in connection with a specific resolution concerning Pierre Dufour.

Performance conditions

Termination indemnities

The Board of Directors decided that (i) the payment of termination indemnities concerning Benoît Potier, Klaus Schmieder and Pierre Dufour mentioned above (excluding however the statutory indemnity and that provided for by the collective bargaining agreement that may be due on account of termination of the employment contract) and for Benoît Potier (ii) the inclusion of his seniority as Chairman and Chief Executive Officer in the calculation of his statutory indemnity and that provided for by the collective bargaining agreement that may be due on account of termination of his employment contract are subject to compliance, duly acknowledged by the Board of Directors at the time or subsequent to the termination of duties, to conditions relating to the beneficiary’s performance assessed in relation to the Company’s performance, defined as follows:

The right to benefit from the rights referred to in (i) and for Benoît Potier in (ii) above will depend on the average of the 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.

The following formulas will be applied:
Average variance
(ROCE – WACC)
Proportion of the indemnity due
* base point
≥ 200 bp*100%
≥ 100 bp and < 200 bp50%
≥ 0 bp and < 100 bp25%
< 00


These conditions will be reviewed by the Board of Directors and, where applicable, modified to take account of changes in the corporate environment at each time the beneficiary’s term of office is renewed and, where applicable, during his term of office.

Indemnity to compensate for the loss of pension rights in respect of term of office

The right for Benoît Potier to receive the indemnity to compensate for the loss of pension rights described above (except for, if applicable, the indemnity to compensate for the loss of pension rights which could be received under Mr Potier’s employment contract), will depend on the average of the 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 7 financial years preceding the financial year during which he leaves the Company.

The following formulas will be applied:
Average variance
(ROCE – WACC)
Proportion of the indemnity due
≥ 200 bp100%
≥ 100 bp and < 200 bp50%
≥ 0 bp and < 100 bp25%
< 00


These conditions will be reviewed by the Board of Directors and, where applicable, modified to take account of changes in the corporate environment each time that Benoît Potier’s term of office is renewed, or where applicable, during his term. In any case, the commitment relating to indemnity to compensate for the loss of pension rights will become null and void when Benoît Potier reaches 55.