Exhibit 10.7
AIR PRODUCTS AND CHEMICALS, INC.
Annual Incentive Plan
As Amended and Restated Effective 1 October 2008
1. PURPOSES OF THE PLAN
     The purposes of this Plan are to attract, motivate and retain high caliber
people and to provide meaningful individual and group incentives within Air
Products and Chemicals, Inc. (the “Company”) and Participating Subsidiaries.
References in this Plan to the Company includes Participating Subsidiaries
unless the context otherwise requires.
2. ADMINISTRATION OF THE PLAN
     The Plan shall be administered by the Management Development and
Compensation Committee (the “Committee”) of the Company’s Board of Directors
(the “Board”) or such other committee of the Board consisting of such members
(not less than three) as are appointed from time to time by the Board and who
qualify as “outside directors” within the meaning of Section 162(m) of the Code.
     The Committee shall have all necessary powers to administer and interpret
the Plan, such powers to include authority (within the limitations described
therein) to select the employees to whom awards will be granted under the Plan
and determine the amount of any award to be made to any employee. In order to
assist it in selecting employees and determining the amount of any award to be
given to each employee selected, the Committee may take into consideration
recommendations from the appropriate officers of the Company and the Committee
may delegate to appropriate Company officers its authority to select award
recipients and determine the amount of awards, within parameters established by
the Committee, with respect to employees who are not Executive Officers.
     The Committee shall have full power and authority to adopt such rules,
regulations and instruments for the administration of the Plan and for the
conduct of its business as the Committee deems necessary or advisable. The
Committee’s interpretations of the Plan, and all action taken and determinations
made by the Committee pursuant to the powers vested in it hereunder, shall be
conclusive and binding on all parties concerned, including the Company, its
shareholders and any employee of the Company or any Subsidiary.
3. ELIGIBILITY FOR PARTICIPATION
     Participants in the Plan shall be selected by the Committee each year from
among Executive Officers and other executives and key employees of the Company.
The term “employee” shall mean any person employed by the Company on a salaried
basis and the term “employment” shall mean employment by the Company or any
Subsidiary. Employees who participate in other incentive or benefit plans of the
Company may also participate in this Plan.

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     Awards under the Plan are for services rendered during a Fiscal Year, based
on the performance of the Company during that Fiscal Year. No employee shall be
eligible to receive an award under the Plan for a particular Fiscal Year unless
the employee is in the employment of the Company on the last day of that Fiscal
Year, provided, however, that an employee whose employment terminates during but
before the end of a Fiscal Year on account of (i) Retirement, Disability or
death, (ii) in connection with a divestiture of facilities, assets or
businesses, elimination of positions, or a reorganization or reduction in the
work force of the Company, (iii) because of leave of absence from the Company,
or (iv) on or following a Change in Control, and who at the time of such
termination of employment was eligible to participate in the Plan, shall be
eligible to receive an award under the Plan for such Fiscal Year.
4. AWARDS
     (a) Prior to the end of the first quarter of each Fiscal Year, the
Committee shall establish performance measures which shall be the basis for
determining the amount of awards, if any, to be paid under the Plan for the
year. The performance measures must be based on business criteria disclosed to
and approved by the shareholders of the Company in accordance with Section
162(m) of the Code, and may include financial and/or nonfinancial goals for the
Company’s performance during the Fiscal Year. The performance measures may be
stated in terms of a formula, schedule or any other basis upon which the maximum
amount of an award to be paid can be objectively determined. The performance
measures can be established for the Company as a whole or can be individually
specified for certain Participants or business units. Different performance
measures can be combined or stated in the disjunctive to arrive at the method
for determining either the total amount to be paid or the amount to be paid to
any individual Participant. The Committee may reserve discretion to adjust award
amounts resulting from application of the established performance measure(s)
but, in the case of Executive Officers who are “covered employees” under Section
162(m) of the Code, the Committee may not increase an award above the maximum
determined under performance measure(s).
     (b) Prior to the end of each Fiscal Year, the Committee shall (i) fix the
classes of employees eligible to receive awards based upon job grade and salary
levels, (ii) establish a minimum aggregate dollar amount of awards to be paid to
employees of the Company and its U.S. Participating Subsidiaries who have not
elected to defer any such awards that might be granted to them and (iii)
establish such other procedures for the making of the awards as the Committee
may deem desirable. The minimum amount established shall become an accrued
liability of the Company on the last day of the Fiscal Year.
     (c) After the close of the Fiscal Year, the Committee shall determine and
certify in writing (in accordance with Section 162(m) of the Code) the extent to
which the performance measures established under paragraph 4(a) above were
satisfied. The amounts of awards to be granted to particular employees of the
Company within the eligible classes shall be determined after the close of the
Fiscal Year under procedures established by the Committee. The Committee shall,
in approving the grant of awards to individual Participants for any Fiscal Year,
take into consideration (i) the performance of the Company for the Fiscal Year
based upon the performance measures selected by the Committee, and (ii) the
contribution of the Participant

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during the Fiscal Year to the success of the Company, including his or her
position and level of responsibility, the achievements of his or her division,
group, department or other subdivision, and the recommendations of his or her
superiors. No award or awards may be granted to any Participant for the same
Fiscal Year having an aggregate value in excess of $4,000,000.
     (d) Notwithstanding any other provisions of this Plan to the contrary,
following or in connection with a Change in Control the Committee may, in its
sole discretion, determine to pay awards for the portion of the current Fiscal
Year preceding the Change in Control; provided, however, that no such award
shall have an aggregate value which exceeds $4,000,000. The Committee shall
determine in that connection the classes of employees eligible to receive awards
based upon job grade and salary levels and the amounts of awards to be made with
respect to particular employees within the eligible classes for said partial
Fiscal Year, and shall undertake such other procedures for the making of the
awards as the Committee may deem desirable. Such awards shall be due and payable
to Participants within thirty days following the Committee’s determination to
pay said awards under this paragraph 4(d) or at such earlier date as the
Committee shall determine, but in no event earlier than the occurrence of a
Change in Control.
5. FORM AND PAYMENT OF AWARDS
     (a) Subject to the provisions of this paragraph 5 relating to deferred
payment awards, awards for a particular Fiscal Year shall be distributed between
November 15 and December 15 following the close of the Fiscal Year in cash. Once
announced by or for the Committee to the Participant, awards shall not be
subject to forfeiture for any reason, whether or not payable immediately or as a
deferred payment award except as provided in paragraph 6(e); provided, however,
that any award for a Fiscal Year will be paid to the Participant only if the
Participant is employed by the Company or a Participating Subsidiary on the last
day of the Fiscal Year, except as otherwise permitted by paragraph 3.
     (b) At the discretion of the Committee, or the election of the Participant
as permitted by paragraph 5(c), payment of all or a portion of an award to any
Participant may be deferred until termination of the Participant’s employment
with the Company. Such deferral shall, in the case of a U.S. employee, be made
under the Air Products and Chemicals, Inc. Deferred Compensation Plan (the
“Deferred Compensation Plan”).
     (c) Any United States employee eligible to participate in the Plan may
elect prior to the end of the second quarter of any Fiscal Year as to which an
award may be granted to such employee, that all or a part of any amount to be
awarded to him or her for such Fiscal Year shall be in the form of a deferred
payment award. Once an employee elects a deferred payment award for the Fiscal
Year, this election will be binding on both the employee and the Company with
respect to any award the employee is granted for the Fiscal Year, except that,
if the minimum amount established under paragraph 4(a) cannot be paid out
currently if all elections are effected, a pro rata reduction shall be made in
each electing Participant’s deferred award and any excess shall be paid out
currently.

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     (d) Deferred payment awards shall be credited on the books of the Company,
shall accrue earnings, and shall be paid out in accordance with, and otherwise
subject to, the terms of the Deferred Compensation Plan.
     (e) Any deferred compensation award of a Participant that was outstanding
as of 1 October 2006 and all earnings accrued thereon shall be transferred, as
of such date, to a Deferred Compensation Account maintained on behalf of such
Participant under the Deferred Compensation Plan.
6. MISCELLANEOUS PROVISIONS
     (a) A Participant’s rights and interests under the Plan may not be assigned
or transferred except, in the case of the Participant’s death, to his or her
Designated Beneficiary or, in the absence of such designation, by will or the
laws of descent and distribution.
     (b) The Company shall have the right to deduct from awards hereunder paid
any federal, state, local or foreign taxes required by law to be withheld with
respect to such awards. The obligation of the Company to make delivery of awards
shall be subject to currency or other restrictions imposed by any government.
     (c) No employee of the Company or a Subsidiary or other person shall have
any claim or right to be granted an award under this Plan. Neither this Plan nor
any action taken hereunder shall be construed as giving any such employee any
right to be retained in the employ of the Company, it being understood that all
employees who have or may receive awards under this Plan are employed at the
will of the Company and in accord with all statutory provisions.
     (d) The costs and expenses of administering this Plan shall be borne by the
Company and not charged to any award or to any employee or Participant receiving
an award. However, the Company may charge the cost of any awards made to
employees of Participating Subsidiaries, including administrative costs and
expenses related thereto, to the respective Participating Subsidiaries by which
such persons are employed.
     (e) Notwithstanding any other Plan provision to the contrary, the Committee
may, in its sole discretion, require repayment of any award made to a
participant under the Plan or rescind any deferred payment award made under the
Plan and not yet delivered to a participant under the Deferred Compensation
Plan, where the award or deferred payment award was based in whole or part on
the achievement of financial results that are subsequently the subject of a
restatement; the Committee determines, in its sole discretion, that the
Participant engaged in misconduct that created the need for the restatement; and
a smaller award or deferred payment award would have been made to the
Participant based upon the restated results. All determinations regarding
enforcement, waiver, or modification of the foregoing repayment and rescission
provision shall be made in the Committee’s sole discretion. Determinations do
not need to be uniform and may be made selectively among individuals, whether or
not similarly situated.

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     (f) The Plan shall be unfunded. Neither the Company, any Subsidiary, the
Committee, nor the Board shall be required to segregate any assets that may at
any time be represented by awards made pursuant to the Plan. Neither the
Company, any Subsidiary, the Committee, nor the Board shall be deemed to be a
trustee of any amounts to be paid under the Plan.
     (g) Unless otherwise expressly stated by the Committee with respect to an
award, each award granted to a Participant under the Plan is intended to be
fully deductible by the Company for federal income taxes and not subject to the
deduction limitation of Section 162(m) of the Code, and the Plan shall be
construed or deemed amended to the extent possible to conform any award to
effect such intent. The Plan is intended to meet the short-term deferral
exception under Code Section 409A, except for those payments deferred in
accordance with the provisions of Section 5(c), such that payments made to
Participants under the Plan are not deferred compensation subject to the
provisions of Code Section 409A. The Plan shall be construed or deemed amended
to the extent possible to effect such intent.
     (h) In addition to terms defined elsewhere herein, the following terms as
used in this Plan shall have the following meanings:
          “Act” shall mean the Securities Exchange Act of 1934 as amended from
time to time.
          “Change in Control” shall mean the first to occur of any one of the
events described below:
(i) Stock Acquisition. Any “person” (as such term is used in Sections 13(d) and
14(d)(2) of the Act), other than the Company or a corporation, a majority of
whose outstanding stock entitled to vote is owned, directly or indirectly, by
the Company, or a trustee of an employee benefit plan sponsored solely by the
Company and/or such a corporation, is or becomes, other than by purchase from
the Company or such a corporation, the “beneficial owner” (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing 30% or more of the combined voting power of the
Company’s then outstanding voting securities. Such a Change in Control shall be
deemed to have occurred on the first to occur of the date securities are first
purchased by a tender or exchange offeror, the date on which the Company first
learns of acquisition of 30% of such securities, or the later of the effective
date of an agreement for the merger, consolidation or other reorganization of
the Company or the date of approval thereof by a majority of the Company’s
shareholders, as the case may be.
(ii) Change in Board. During any period of two consecutive years, individuals
who at the beginning of such period were members of the Board of Directors cease
for any reason to constitute at least a majority of the Board of Directors,
unless the election or nomination for election by the Company’s shareholders of
each new director was approved by a vote of at least two-thirds of

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the directors then still in office who were directors at the beginning of the
period. Such a Change in Control shall be deemed to have occurred on the date
upon which the requisite majority of directors fails to be elected by the
shareholders of the Company.
(iii) Other Events. Any other event or series of events which, not withstanding
any other provision of this definition, is determined, by a majority of the
outside members of the Board of Directors of the Company serving in office at
the time such event or events occur, to constitute a change in control of the
Company for purposes of this Plan. Such a Change in Control shall be deemed to
have occurred on the date of such determination or on such other date as such
majority of outside members of the Board shall specify.
          “Code” shall mean the United States Internal Revenue Code, as amended
and restated from time to time, and regulations thereunder.
          “Designated Beneficiary” shall mean the person or persons last
designated as such by the Participant on a form filed by him or her with the
Committee in accordance with such procedures as the Committee shall approve,
provided, however, that in the absence of the filing of such a form with the
Company the Designated Beneficiary shall be the person or persons who are the
Participant’s beneficiary or beneficiaries of the Company’s basic life
insurance.
          “Executive Officer” shall mean an officer designated by the Board as
an “Executive Officer” for purposes of the United States Securities Laws.
          “Disability” shall mean permanent and total disability of an employee
participating in the Plan as determined by the Committee in accordance with
uniform principles consistently applied, upon the basis of such evidence as the
Committee deems necessary and desirable.
          “Fiscal Year” shall mean the twelve-month period used as the annual
accounting period by the Company.
          “Participant” shall mean, as to any award granted under this Plan and
for so long as such award is outstanding, the employee to whom such award has
been granted.
          “Participating Subsidiary” shall mean any Subsidiary designated by the
Committee to participate in this Plan which Subsidiary requests or accepts, by
action of its board of directors or other appropriate authority, such
designation.
          “Retirement” shall mean separating from service with the Company or a
Subsidiary on or after a customary retirement age for the Participant’s
location, with a fully vested interest and the right to begin receiving
immediate pension benefits under the Company’s Pension Plan for Salaried
Employees or under another defined benefit pension plan sponsored or otherwise
maintained by a Subsidiary for its employees in the absence of the Pension Plan
or such other pension plan being applicable to any Participant, under a defined
contribution plan

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under which the Participant accrues his or her primary retirement benefit, or
otherwise as determined by the Committee in its sole discretion.
          “Subsidiary” shall mean any domestic or foreign corporation,
partnership, association, joint stock company, trust or unincorporated
organization affiliated with the Company whether or not controlling, controlled
by or under common control with the Company.
7. AMENDMENTS AND TERMINATION
     The Committee may at any time terminate or from time to time amend or
suspend this Plan in whole or in part; provided, however, that no such amendment
shall, without the consent of the Participant to whom an award has already been
granted hereunder, operate to annul such award.
     Unless approved by a vote of a majority of the shares present and entitled
to be voted at a meeting of shareholders, no amendment shall be effective to
increase the maximum amount which may be awarded to any individual for the same
Fiscal Year.
8. EFFECTIVE DATE, PAST AMENDMENTS AND TERM OF THE PLAN
     This Plan, originally denominated the “Air Products and Chemicals, Inc.
1979 Incentive Compensation Plan”, became effective for the Fiscal Year
commencing on October 1, 1978 for awards to be made for years to and including
Fiscal Year 1983, following approval by a majority of those present at the
January 19, 1978 annual meeting of shareholders of the Company and entitled to
vote thereon. The Plan was thereafter amended as permitted by its terms
effective October 1, 1982 by action of the Board of Directors. The Plan, as
amended effective October 1, 1983, was continued in effect indefinitely until
terminated, amended or suspended as permitted under paragraph 9 following
approval by the holders of a majority of the outstanding shares of Common Stock
of the Company at the January 26, 1984 annual meeting of shareholders of the
Company. The Plan was thereafter amended as permitted by its terms effective
March 1, 1986, October 1, 1986, July 15, 1987, and October 1, 1989 by action of
the Committee. The Plan was renamed the 1990 Annual Incentive Plan and restated
effective as of October 1, 1989. The Plan was renamed the 1997 Annual Incentive
Plan, amended and restated effective as of October 1, 1996. The Plan was
thereafter amended as permitted by its terms effective as of April 1, 1998, and
effective as of January 1, 2000, and September 20, 2000 by action of the
Committee. The Plan was renamed the Annual Incentive Plan, amended and restated
as of October 1, 2001. The Plan was thereafter amended as permitted by its terms
effective October 1, 2006 and September 19, 2007 and is restated, as set forth
herein, as of October 1, 2008.

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