Exhibit 10.7

This document constitutes part of a prospectus covering securities

that have been registered under the Securities Act of 1933.

Deferred Compensation Program

for Directors

TABLE OF CONTENTS

 

     Page  

Deferred Compensation Program for Directors

     1   

General

     1   

Effective Dates

     1   

Participants

     1   

Mandatory Deferrals

     1   

Elective Deferrals

     2   

Earnings on Accounts

     2   

Time and Manner of Making Elective Deferrals

     3   

Payment of Deferred Compensation

     3   

Election of Time of Payment

     3   

Changes in Election of Timing of Payment

     4   

Payment Following Termination of Service

     4   

Accelerated Payment

     5   

Payment on Death

     5   

Change in Control

     5   

Other Events

     6   

Miscellaneous Provisions

     6   

Withholding of Taxes

     6   

Rights as to Common Stock

     6   

Adjustments to Avoid Dilution

     6   

Participant’s Rights Unsecured

     7   

Nonassignability

     7   

Statement of Account

     7   

Administration

     7   

Business Days

     7   

Amendment and Termination

     7   

Notices

     8   

Construction; Governing Law

     8   

Election Form

     9   

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Deferred Compensation Program

for Directors

 

1. General

 

     The Deferred Compensation Program for Directors (the “Program”) is provided
to:

 

  (a) Provide compensation for directors in the form of Company equity
securities to align the interests of directors with those of the Company’s
shareholders; and

 

  (b) Provide directors the opportunity to defer compensation earned as a
director.

 

     The Program is provided under the Air Products and Chemicals, Inc.
Long-Term Incentive Plan (the “Plan”) and is subject to the terms thereof.

 

2. Effective Dates

 

     The Air Products and Chemicals, Inc. Deferred Compensation Plan for
Directors was adopted effective as of 1 January 1980 and was thereafter amended
from time to time. Effective 23 January 2003, the Plan was combined with the
Long-Term Incentive Plan and offered as a program thereunder. This amended and
restated Program is effective as of 20 May 2010.

 

3. Participants

 

     Any director of the Company who is not an employee of the Company or of a
subsidiary of the Company is eligible to participate in the Program.

 

4. Mandatory Deferrals

 

     There shall be established for each participant an Air Products Stock
Account described under section 5(b) below to which shall be credited all
compensation which is required to be paid by the Company in the form of deferred
stock units in accordance with the Compensation Program for Nonemployee
Directors(“Mandatory Deferrals”).

 

     Dollar amounts to be so credited shall be converted into deferred stock
units in the manner described under Section 5(b) below on the date specified in
the Compensation Program for Non-Employee Directors.

 

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5. Elective Deferrals

 

     A participant may elect to defer receipt of all or a specified portion of
the compensation (exclusive of expense reimbursements) otherwise currently
payable to him or her for serving on the Board of Directors of the Company,
attending meetings or committee meetings thereof or performing other services in
connection with the business of the Company and its subsidiaries. Such
electively deferred compensation (“Elective Deferrals”) will be credited on the
date the compensation is otherwise payable, to one or both of the following
hypothetical investment accounts (“Accounts”) as directed by the participant:

 

  (a) An account deemed to earn interest at rates established on the first
business day of each calendar quarter based upon the published average long-term
yields of corporate bonds of “A” rated Industrial Companies appearing in Moody’s
Bond Survey or an equivalent bond rating service on such day (the “Interest
Account”); and

 

  (b) The participant’s Air Products Stock Account deemed to be invested in Air
Products and Chemicals, Inc. common stock, par value $1.00 (“common stock”). The
Company shall credit the Air Products Stock Account with that number of units
(including fractions) obtained by dividing the amount of such deferred
compensation by the Fair Market Value of a share of Company common stock on the
second business day before the date the compensation is credited to the Air
Products Stock Account. For purposes of the Program, the Fair Market Value of a
share of Company common stock on any date (the “valuation date”) shall be equal
to the closing sale price on the New York Stock Exchange, as reported on the
composite transaction tape, for such date, or, if no sales were quoted on such
date, on the most recent preceding date on which sales were quoted. The units
thus calculated are herein referred to as “deferred stock units.”

 

6. Earnings on Accounts

 

     Each participant’s Accounts will be credited with interest on deferred
compensation credited to the Interest Account, and with dividend equivalents on
deferred compensation credited to the Air Products Stock Account, as provided
below, from the date credited until the last day of the month preceding payment,
unless payment is made because of death, in which event interest or dividend
equivalents will be credited until the date of death.

 

  (a) Earnings on Interest Account. Interest shall be compounded quarterly.

 

  (b)

Earnings on Air Products Stock Account. Earnings shall be credited quarterly in
an amount equal to the dividends payable during the quarter just ended with
respect to that number of shares of Company common

 

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  stock equal to the number of deferred stock units credited to the Air Products
Stock Account as of the end of the prior quarter. The amount so credited shall
then be converted into deferred stock units in the manner described under
Section 5(b) above using the quarterly crediting date as the valuation date for
determining Fair Market Value.

 

7. Time and Manner of Making Elective Deferrals

 

     An election to defer compensation must be made by a director prior to the
calendar year during which such compensation is earned; provided that an initial
election by a new director to defer compensation for all future services may be
up to 30 days after commencing service as a director to the Company. An election
shall continue in effect until the end of the participant’s service to the
Company as a director or until the participant modifies or revokes the election
as described below, whichever shall occur first.

 

     A participant may elect, modify, or revoke a prior election to defer
compensation by completing Sections I and II of the Election Form attached
hereto as Exhibit A (the “Election Form”) and returning it to the Corporate
Secretary. Such Election Form shall specify:

 

  (a) The amount or percentage of compensation to be deferred beginning on a
future date specified in the notice until such notice is revoked or modified as
to future compensation; and

 

  (b) The percentage of the Elective Deferrals to be credited to the Interest
Account and the percentage to be credited to the Air Products Stock Account.

 

     Any modification or revocation of a prior election described in
Section 7(a) or 7(b) above shall relate only to future compensation, and shall
not apply to any amounts previously credited to the participant’s account. A
participant’s election to defer described in 7(a) may not be revoked or modified
during the calendar year. Revocation or modification of a prior election to
defer for a calendar year must be made no later than the close of the preceding
calendar year.

 

8. Payment of Deferred Compensation

 

     No payment may be made from the participant’s Accounts in respect of
Elective Deferrals or Mandatory Deferrals (together, “Deferred Compensation
Amount”) except as provided below.

 

  (a)

Election of Time of Payment. Within 30 days of commencing service as a director
to the Company, a participant may make an election to receive

 

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  distribution of his or her Deferred Compensation Amount in either a lump sum
or in a specified number of consecutive annual installments (not to exceed ten),
and may elect the date of payment in the case of a lump sum or the date payments
commence in the case of installments. All such elections may be made by
completing Section III of the Election Form and returning it to the Corporate
Secretary. If a participant does not complete an Election Form specifying the
timing of payment of his or her Deferred Compensation Amount within the first
30 days of service, such Deferred Compensation Amount will be paid as a lump sum
in the first year after the year in which the director’s service as a director
ends, and the director will be deemed, for purposes of the Program, to have so
elected.

 

  (b) Changes in Election of Timing of Payment. A participant may change his or
her election in regard to the timing of payment of his or her Deferred
Compensation Amount by completing a new Election Form and returning it to the
Corporate Secretary. Such a change in election of timing of payment will apply
only to Deferred Compensation Amounts earned in future years, except a director
may change the timing of payment for previously accrued Deferred Compensation
Amounts only as follows:

 

  (i) A completed Election Form reflecting the desired change must be received
by the Corporate Secretary’s Office no later than one year prior to the first
scheduled payment of such Deferred Compensation Amounts under his or her
currently effective Election Form(s);

 

  (ii) The change must delay the first payment by at least five years from the
date the first scheduled payment otherwise would have been made; and

 

  (iii) The change will become effective one year from the date the Election
Form is received by the Company.

 

  (c) Payment Following Termination of Service. The value of each Deferred
Compensation Amount credited to the Interest Account of a participant’s Plan
account is payable in cash, and the value of each Deferred Compensation Amount
credited to the Air Products Stock Account is payable by delivery of a share of
common stock for each deferred stock unit credited to the participant’s Account,
in either case in a lump sum or in annual installments, in accordance with the
participant’s election.

 

      

All payments from a participant’s Accounts must be completed by the tenth year
after the year in which service as a director terminates. All payments will be
made in January of the applicable year or as soon thereafter as reasonably
possible. If annual installments are to be paid, the amount of the first payment
shall be a fraction of the value of the

 

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  participant’s Accounts as of December 31 of the year preceding payment, the
numerator of which is one and the denominator of which is the total number of
such installments elected. The amount of each subsequent payment shall be a
fraction of the value as of the December 31 preceding each subsequent payment,
the numerator of which is one and the denominator of which is the total number
of installments elected minus the number of installments previously paid. If a
participant has more than one payment election in effect, separate calculations
shall be made for the portions of the Account to which the different payment
elections apply. The number of shares of common stock to be delivered in payment
from the Air Products Stock Account shall be equal to the number of deferred
stock units represented by the payment owed, calculated as aforesaid, rounded up
to the next whole share of common stock.

 

  (d) Accelerated Payment. Notwithstanding the deferral period and timing of
payment determined in accordance with Sections 8(a) and (b) above, the
participant’s Accounts shall be paid on an accelerated basis as follows under
the circumstances described below:

 

  (i) Payment on Death. In the event of a participant’s death, the value of his
or her Interest Account shall be paid in cash and the value of his or her Air
Products Stock Account shall be distributed in shares of Air Products stock.
Amounts shall be determined as of the date of death and shall be paid in a
single payment or distribution to the participant’s estate or designated
beneficiary as soon as practicable following the date of death. A participant
may designate a beneficiary by completing Section IV of the Election Form and
returning it to the Corporate Secretary’s Office.

 

  (ii) Change in Control.

 

  (A) In the event of a “Change of Control” of the Company, as defined by the
Plan, the value of a participant’s Air Products Stock Account shall be paid to
the participant in cash or Company Stock, at the discretion of the Board, as
soon as practicable, but no later than 30 days after the Change in Control. If a
cash payment is made, the amount shall be equal to the “Change in Control
Price”, as defined by the Plan, multiplied by the number of deferred stock units
credited to the participant’s Air Products Stock Account.

 

  (B) In the event of a Change in Control of the Company followed by a
participant’s termination of service as a director of the Company, the value of
the participant’s Interest Account, determined as of the date of termination of
service as a director following or in connection with the Change in Control,
shall be immediately due and payable to the participant in a single cash lump
sum.

 

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  (iii) Other Events. Upon the occurrence of any other event or conditions which
permit an acceleration of payments under regulations implementing Section 409A
of the Internal Revenue Code, the Corporate Secretary’s Office will distribute
the value of the participants’ accounts in accordance with such regulations.

 

  (e) Miscellaneous Provisions.

 

  (i) Withholding of Taxes. The right of a participant to payments under this
Program shall be subject to the Company’s obligations at any time to withhold
income or other taxes from such payments including, without limitation, by
reducing the number of shares of common stock to be distributed in payment of
deferred stock units by the number of shares equal in value to the amount of
such taxes required to be withheld.

 

  (ii) Rights as to Common Stock. No participant with deferred compensation
credited to the Air Products Stock Account shall have rights as a Company
shareholder with respect thereto unless and until the date as of which shares of
common stock are issued in payment of such deferred compensation. No shares of
common stock shall be issued and delivered hereunder unless and until all legal
requirements applicable to the issuance, delivery or transfer of such shares
have been complied with including, without limitation, compliance with the
provisions of the Act and of the Securities Act of 1993, as amended, and the
applicable requirements of the exchanges on which the Company’s common stock is,
at the time, listed. Distributions of shares of common stock in payment under
this Program may be made either from shares of authorized but unissued common
stock reserved for such purpose by the Board of Directors or from shares of
authorized and issued common stock reacquired by the Company and held in its
treasury, as from time to time determined by, or pursuant to delegations from,
the Board of Directors.

 

  (iii)

Adjustments to Avoid Dilution. In the event of any change in the common stock of
the Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares, or a rights offering to
purchase common stock at a price substantially below fair market value, or other
similar corporate change, including without limitation in connection with a

 

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  Change in Control of the Company, the value and attributes of each deferred
stock unit shall be appropriately adjusted consistent with such change to the
same extent as if such deferred stock units were issued and outstanding shares
of common stock of the Company, so as to preserve, without increasing, the value
of deferred compensation credited to each participant’s Air Products Stock
Account. Such adjustments shall be made by the Board of Directors and shall be
conclusive and binding for all purposes of the Program.

 

9. Participant’s Rights Unsecured

 

     The right of any participant to the payment of deferred compensation and
earnings thereon under the Program shall be an unsecured and unfunded claim
against the general assets of the Company.

 

10. Nonassignability

 

     The right of a participant to the payment of deferred compensation and
earnings thereon under the Program shall not be assigned, transferred, pledged,
or encumbered or be subject in any manner to alienation or anticipation.

 

11. Statement of Account

 

     Statements will be sent to participants quarterly as to the value of their
Accounts as of the end of the previous quarter.

 

12. Administration

 

     The administrator of this Program shall be the Corporate Secretary of the
Company. The administrator shall have authority to adopt rules and regulations
for carrying out the Program and to interpret, construe, and implement the
provisions thereof.

 

13. Business Days

 

     If any date specified herein falls on a Saturday, Sunday or legal holiday,
such date shall be deemed to refer to the next business day thereafter.

 

14. Amendment and Termination

 

     This Program may at any time be amended, modified or terminated by the
Board of Directors of the Company. No amendment, modification, or termination
shall, without the consent of a participant, adversely affect such participant’s
rights with respect to amounts theretofore accrued in his or her deferred
compensation account, except as required by law.

 

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15. Notices

 

     All notices to the Company under this Program shall be in writing and shall
be given as follows:

Corporate Secretary

Air Products and Chemicals, Inc.

7201 Hamilton Boulevard

Allentown, PA 18195-1501

 

16. Construction; Governing Law

 

     This Program is intended to comply with Section 409A of the Internal
Revenue Code and shall be construed, whenever possible, to be in conformity with
such requirements and in accordance with the laws of the Commonwealth of
Pennsylvania for all purposes without giving effect to principles of conflicts
of laws.

 

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EXHIBIT A

AIR PRODUCTS AND CHEMICALS, INC. (the “Company”)

DEFERRED COMPENSATION PROGRAM FOR DIRECTORS (the “Program”)

Election Form

(For deferrals effective after 31 December 2005)

 

To: Corporate Secretary

     Air Products and Chemicals, Inc.

 

  I. Elective Deferred Compensation Amount

 

     In accordance with the provisions of the Program, I hereby (check one):

 

  •   Elect (or modify my prior election) to defer receipt of compensation
otherwise payable to me in cash for services as a Director of the Company in the
manner described below (fill in one):

$                              (amount per quarter)

or

                              (percentage per quarter)

 

  •   Revoke my prior election to defer.

 

     This election, modification, or revocation shall take effect beginning on
                                                          to affect only
compensation earned on and after such date. (Must be a date after the date this
Election Form is received by the Company.) Revocation or modification of a prior
election may be made only for a future calendar year and must be made no later
than the close of the calendar year proceeding the year for which it is
effective.

 

  II. Investment Account for Elective Deferred Compensation Amount.

 

     The Elective Deferred Compensation Amount is to be deemed invested in the
following account(s) (enter a whole percentage from 1% to 100% in each blank,
with the two percentages totaling 100%):

 

             % in the Interest Account to be paid out in the form of cash.

 

             % in the Air Products Stock Account to be distributed in the form
of Air Products and Chemicals, Inc. Common Stock.

 

     Notes:

 

     An election to change crediting of future elective deferrals to an Interest
Account or your Air Products Stock Account will be effective for the next
quarter.

 

     Under current federal securities law, it is necessary to report to the
Securities and Exchange Commission the number of units credited to the Air
Products Stock Account at the end of each fiscal year.

 

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EXHIBIT A

AIR PRODUCTS AND CHEMICALS, INC.

DEFERRED COMPENSATION PROGRAM FOR DIRECTORS (the “Program”)

Election Form

(continued)

 

  III. Timing of Payment of Deferred Compensation Amounts (Elective and
Mandatory)

 

       COMPLETE A OR B, BUT NOT BOTH, AND C.

 

  A. Lump Sum Election

 

       Deferred Compensation Amounts (if any) are to be paid to me in a lump sum
(check one):

 

  •   In the year my service as a Director ends.

 

  •   In the              year after the year in which my service as a Director
ends (not to exceed tenth).

 

  B. Installment Election

 

     Deferred Compensation Amounts (if any) are to be paid to me in _________
(up to 10) consecutive annual installments, the first of which is to be paid in
(check one):

 

  •   The year in which my service ends.

 

  •                year after the year in which my service ends (the last
installment must be paid no later than 10 years after the year in which service
ends).

 

  C. This election shall apply to:

 

                  Future year Deferred Compensation Amounts only.

 

                  All Deferred Compensation Amounts.*

 

  * Except for initial elections made within the first 30 days of eligibility,
this election will become effective as to previous Deferred Compensation Amounts
one year from the date received by the Corporate Secretary’s Office. If payouts
under a prior election are scheduled to commence before one year, this election
is void and the prior election will control. Any modification or revocation of a
prior payment election must delay commencement of the payment by five years from
the date the payment otherwise would have been made.

 

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EXHIBIT A

AIR PRODUCTS AND CHEMICALS, INC.

DEFERRED COMPENSATION PROGRAM FOR DIRECTORS (the “Program”)

Election Form

(continued)

 

  IV. Beneficiary Designation

 

     If I die before receiving all the deferred payments due me under the
Program, I understand the value of my Deferred Compensation Amounts will be paid
to my estate or designated beneficiary, in a single lump sum cash payment
following the date of my death. I wish to designate
                                     as my beneficiary. (A beneficiary may be
designated by delivering this Election Form to the Corporate Secretary of the
Company. Beneficiary designations that are not received by the Corporate
Secretary’s Office prior to the participant’s death cannot be honored.)

This Election is subject to the terms of Air Products and Chemicals, Inc.
Deferred Compensation Program for Directors, as amended from time to time.

 

Received on the                  day of

        on behalf of the Company.       Signature of Director By  

 

 

 

  Date:  

 

  (Assistant) Corporate Secretary      

 

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