Exhibit 10.1
Confidential Communication to: «First_name» «Last_name»
As we complete this fiscal year and begin another, I would like to take a moment
to congratulate you and to thank you for your performance and commitment to our
goals both in the past and most importantly looking forward. You play an
important role in the future performance of our Company.
One of the priorities of our management compensation program is to provide you
with the opportunity to share in the long-term success of Air Products. As a
result, I am pleased to present your 2009 stock awards under the Company’s
Long-Term Incentive Plan. These awards make up the long-term component of your
total pay package and link your personal wealth to the performance of the
Company.
In 2008, we were tracking another record year and, as you know, we ended the
year on a disappointing note. While these circumstances are unsettling to all of
us, we have learned from our experience that we can weather these times by being
smart about our choices. It is extremely important that we balance our long-term
growth goals with a steadfast resolve to improve our margins by managing our
costs, improving pricing and acting with an unwavering commitment to
continuously improving our processes. Our shareholders demand this and we must
expect no less of ourselves. Over the next few years, our focus and priority to
achieve our goals of growth and margin improvement will have the greatest impact
on delivering EPS growth which will enhance the value of our stock price and
hence, your award. I appreciate your hard work and I know you understand that
through the actions of your teams and you, we will make the difference for our
customers, employees and shareholders.
Your 2009 awards are valued at $<Tot Value> and include:

•   A Nonstatutory Stock Option to purchase «Stock_Option» shares of Common
Stock at a purchase price of $66.90 per share, which is the 1 October 2008
closing sale price of a share of Common Stock, valued at $<SO Value>; and   •  
An award of «RSU» 4-Year Restricted Shares of Company Common Stock issued to you
as of 2 October 2008 valued at $<RS Value>; and   •   «Perf_Share» Deferred
Stock Units with a three year performance period valued at $<PS Value>, each
Unit (a “Performance Share”) being equivalent in value to one share of Common
Stock. Please note the performance share Earnout Schedule which is part of this
Awards Agreement will be sent to you in a separate communication after
finalization by the Management Development and Compensation Committee of the
Company’s Board of Directors (the “Committee”). The Schedule will display how
the growth and return measures will define payout opportunities.

We are committed to offering long-term incentive awards for our employees who
contribute to our success — both now and in the future. Thank you again for your
dedication and on-going contributions to Air Products.
Your 2009 Awards are subject to and contingent upon your agreement to the
attached conditions described in Exhibit A. Please read these conditions
carefully, particularly the descriptions of “Prohibited Activities”. This
letter, together with its Exhibit, constitutes the agreement governing your

 

--------------------------------------------------------------------------------

 

2009 Awards (“Awards Agreement”). Your 2009 Awards are also at all times subject
to the applicable provisions of the Long-Term Incentive Plan (the “Plan”) and to
any determinations made by the Committee (or its delegate) with respect to your
2009 Awards as contemplated or permitted by the Plan or the Conditions. In
addition, the Committee has established a one-year holding period for a portion
of your Nonstatutory Stock Option. You are expected to hold, for one year, 50%
of the net shares (after taxes and commissions) that you receive upon an
exercise of the Stock Option.
Neither your 2009 Awards, this Awards Agreement or the Plan constitute a
contract of employment; nor do they guarantee your continued employment for any
period required for all or any of your 2009 Awards to vest, become exercisable,
be earned or be paid out. Except as otherwise indicated all capitalized words
used in this Awards Agreement have the meanings described in the Plan.
WITNESSETH the due execution of this Awards Agreement at Allentown, Pennsylvania
effective as of the 1st day of October 2008 intending to be legally bound
hereby.

            AIR PRODUCTS AND CHEMICALS, INC.
      By:                        

Exhibit

 

--------------------------------------------------------------------------------

 

EXHIBIT A
AIR PRODUCTS AND CHEMICALS, INC. (the “Company”)
LONG-TERM INCENTIVE PLAN
FY2009 AWARD AGREEMENT

1.   As described in the foregoing grant letter, you are hereby granted FY2009
Awards consisting of Stock Options (“Options”), Restricted Shares of Company
Common Stock (“Restricted Shares”), and Deferred Stock Units to be called
“Performance Shares” under the Air Products and Chemicals, Inc. Long-Term
Incentive Plan (the “Plan”). The Options are “Nonstatutory Stock Options” as
described in Section 6 of the Plan. The Restricted Shares are described in
Section 8 of the Plan. The Deferred Stock Units are described in Section 9 of
the Plan. The Management Development and Compensation Committee of the Company’s
Board of Directors has approved these Awards subject to the applicable
provisions of the Plan and the terms of this Agreement, and contingent upon your
execution of this Agreement. Except as noted herein, all capitalized terms used
in this Agreement have the meaning ascribed to them in the Plan. A copy of the
Plan is available from the Corporate Secretary’s Office of the Company, 7201
Hamilton Boulevard, Allentown, PA 18195-1501.   2.   Each Option entitles you to
purchase one share of Company Common Stock (“Share”) at a purchase price of
$66.90 (the “Grant Price”) as described below. You can first purchase Shares as
follows: (i) up to one-third of the Shares may be purchased on or after 1
October 2009 and (ii) up to an additional one-third of such Shares may be
purchased on or after 1 October 2010 and 2011, respectively. The Options are
granted as of 1 October 2008 and will continue for a period of ten (10) years
from such grant date and will expire and no longer be exercisable after 1
October 2018.   3.   You may purchase Shares covered by an Option by providing
to the Company’s agent, Fidelity Stock Plan Services, LLC (“Fidelity”), notice
of exercise of the Option in a form designated by Fidelity and the Grant Price
of the Shares. Payment of the Grant Price and applicable taxes may be made in
cash or by providing an irrevocable exercise notice coupled with irrevocable
instructions to Fidelity to simultaneously sell the Shares and deliver to the
Company on the settlement date the portion of the proceeds representing the
Grant Price and any taxes to be withheld. Payment of the Grant Price may also be
made by delivery or attestation of ownership of other Shares of Common Stock
owned by you, in which case the number of Shares acquired in the exercise will
be reduced by an amount equal in value to the amount of any taxes required to be
withheld and by any Shares attested.   4.   Your Options terminate as of the
close of business on the last day of your employment with the Company and all
its Subsidiaries, unless your employment ends due to your death, Disability or
Retirement on or after 30 September 2009. Upon your, death, Disability or
Retirement on or after 30 September 2009, any unexercisable portion of the
Options will be extended for the remaining term of the award (that is, will
become exercisable) as if you have continued to be an active employee of the
Company or a Subsidiary. Notwithstanding the above, if your employment with the
Company or a Subsidiary is involuntarily terminated by the Company on or after
30 September 2009 due to action necessitated by business conditions, including,
but not limited to, job eliminations, workforce reductions, divestitures of
facilities, assets or businesses, sale by the Company of a Subsidiary or plant
closing, your exercisable Options will not be

 

--------------------------------------------------------------------------------

 

    terminated but will continue to be exercisable in accordance with their
terms for six months following your last day of employment with the Company or a
Subsidiary.   5.   In the event of a Change in Control, the Options become
exercisable on the later of the Change in Control or the first date more than
six months from grant. In the event of any other change in the outstanding
shares of the Common Stock of the Company or the occurrence of certain other
awards described in Section 12 of the Plan, an equitable adjustment shall be
made in the number or kind of Shares or the Grant Price for Shares covered by
your Options.   6.   Options are nonassignable and nontransferable except to
your Designated Beneficiary, by will or the laws of descent and distribution, or
by gift to family members or to trusts of which only family members are
beneficiaries. Transfers by gift can be made only after the Option has become
exercisable and subject to such administrative procedures and to such
restrictions and conditions as the officers of the Company shall determine to be
consistent with the purposes of the Plan and the interests of the Company and/or
to be necessary or appropriate for compliance with all applicable tax and other
legal requirements. Subject to the foregoing, you may transfer Options by gift
only by delivering to the Company at its principal offices in Allentown,
Pennsylvania, written notice of the intent to transfer the Options on forms to
be provided by the Company.   7.   The Restricted Shares shall be issued to you,
contingent upon your execution of this Agreement, as of 2 October 2008. Upon
issuance of the Restricted Shares, you shall have all the rights of a
shareholder with respect to the Restricted Shares, including the right to vote
such Restricted Shares and receive all dividends or other distributions paid
with respect to the Restricted Shares, subject to the restrictions contained in
Paragraph 8 below. In the event of any change in the outstanding shares of
Common Stock of the Company or the occurrence of certain other events described
in Section 12 of the Plan, an equitable adjustment of the number of Restricted
Shares covered by this Agreement shall be made consistent with the impact of
such change or event upon the rights of the Company’s other shareholders, and
any additional Shares of Common Stock issued to you as a result of such
adjustment shall be Restricted Shares subject to this Agreement, including,
without limitation, the restrictions contained in Paragraph 8.   8.   The
“Restriction Period” with respect to the Restricted Shares shall be the period
beginning 2 October 2008 and ending on the earliest of 1 October 2012; your
death, Disability or Retirement on or after 30 September 2009, or a Change in
Control of the Company. During the Restriction Period, the Restricted Shares may
not be sold, assigned, transferred, encumbered, or otherwise disposed of by you;
provided however, that such Restricted Shares may be used to pay the Grant Price
by attestation upon your exercise of Stock Options, with the stipulation that
the Restricted Shares attested will remain subject to the restrictions of this
Paragraph 8 and the terms of this Agreement. If your employment by the Company
and all its Subsidiaries is terminated for any reason prior to 30
September 2009, or for any reason other than death, Disability or Retirement
prior to 1 October 2012, the Restricted Shares shall be forfeited in their
entirety; provided that, in the event of a Change in Control of the Company,
your rights to the Restricted Shares shall become immediately transferable and
nonforfeitable. At the end of the Restriction Period, all nonforfeited
Restricted Shares shall become transferable and otherwise be regular Shares.  
9.   At the end of the Restriction Period, and, if earlier, upon your election
to include the value of the Restricted Shares in your federal taxable income
pursuant to Internal Revenue Code Section 83(b), payment of taxes required to be
withheld by the Company must be made. When taxation occurs at the end of the
Restriction Period, applicable taxes will be withheld by reducing

 

--------------------------------------------------------------------------------

 

    the number of the Restricted Shares issued to you by an amount equal in
market value to the taxes required to be withheld. In the event you make a
Section 83(b) election, applicable taxes must be paid in cash to the Company at
the time the election is filed with the Internal Revenue Service.   10.   In the
event your employment is terminated due to your death on or after 30
September 2009, the Restricted Shares shall be transferred free of restriction,
reduced by any applicable taxes, to your Designated Beneficiary or, if none, to
your legal representative.   11.   The Performance Shares granted to you are
associated with a three year performance cycle ending 30 September 2011. The
final version of the performance share payout schedule will be sent to you in a
separate communication. The schedule will display how the growth and return
measures will define payout opportunities. Subject to the forfeiture conditions
contained in Paragraph 12, each earned Performance Share will entitle you to
receive, at the end of the Deferral Period (as defined below), one Share.   12.
  The Deferral Period will begin on the date of this Agreement and will end on 1
October 2011. If your employment by the Company and all its affiliates is
terminated for any reason prior to 30 September 2009, all your Performance
Shares will be automatically forfeited in their entirety. If your employment by
the Company and all its affiliates terminates on or after 30 September 2009, but
during the Deferral Period, other than due to death, Disability or Retirement,
you will forfeit all of your Performance Shares. If your employment by the
Company and all its affiliates is terminated on or after 30 September 2009, but
during the Deferral Period, due to death, Disability or Retirement, you will
forfeit a pro-rata portion of your earned Performance Shares which portion in
each case shall be based on the number of full months you worked following 30
September 2008.   13.   Performance Shares earned and not forfeited shall be
paid, reduced by the number of Shares equal in market value to any applicable
taxes, as soon as administratively practical after the end of the Deferral
Period, in Shares. No cash dividends or other amounts shall be payable with
respect to the Performance Shares during the Deferral Period. At the end of the
Deferral Period, for each earned and nonforfeited Performance Share, the Company
will also pay to you a cash payment equal to the dividends which would have been
paid on a Share during the Deferral Period (“Dividend Equivalents”), net of
applicable taxes.   14.   If your employment by the Company or a Subsidiary
terminates during the Deferral Period due to death, payment in respect of earned
Performance Shares that are not forfeited and of related Dividend Equivalents
shall be made, as soon as practical after the Deferral Period, to your
Designated Beneficiary or, if none, your legal representative, net of applicable
taxes.   15.   In the event of any change in the outstanding Shares of Common
Stock of the Company or the occurrence of certain other events as described in
Section 12 of the Plan, an equitable adjustment of the number of Performance
Shares covered by this Agreement shall be made as provided in the Plan.   16.  
Notwithstanding anything to the contrary above, any Performance Shares earned or
paid and any related Dividend Equivalents paid to you may be rescinded within
three years of their payment in the event: the earning of such Performance
Shares is predicated upon the achievement of financial results that are
subsequently the subject of a restatement; the Committee determines in its sole
discretion that you engaged in misconduct that caused or partially caused the
need for the restatement; and the Performance Shares would not have been earned
or a lesser amount of

 

--------------------------------------------------------------------------------

 

    Performance Shares would have been earned based upon the restated financial
results. In the event of any such rescission, you shall pay to the Company the
amount of any gain realized or payment received as a result of any rescinded
payment, in such manner and on such terms as may be required, and the Company
shall be entitled to set off against the amount of any such gain or payment any
amount owed to you by the Company or any Subsidiary.   17.   In the event the
Company determines, in its sole discretion, that you have engaged in a
“Prohibited Activity” (as defined below), at any time during your employment, or
within one year after termination of your employment from the Company or any
Subsidiary, the Company may forfeit, cancel, modify, rescind, suspend, withhold,
or otherwise limit or restrict any unexpired, unpaid, unexercised, or deferred
Awards outstanding under this Agreement, and any exercise, payment, or delivery
of an Award or Shares pursuant to an Award may be rescinded within six months
after such exercise, payment, or delivery. In the event of any such rescission,
you shall pay to the Company the amount of any gain realized or payment received
as a result of the rescinded exercise, payment, or delivery, in such manner and
on such terms as may be required, and the Company shall be entitled to set off
against the amount of any such gain or payment any amount owed to you by the
Company or any Subsidiary.

The Prohibited Activities are:

  (a)   Nondisparagement — making any statement, written or verbal, in any forum
or media, or taking any action in disparagement of the Company or any Subsidiary
or affiliate thereof (hereinafter, the “Company”), including but not limited to
negative references to the Company or its products, services, corporate
policies, current or former officers or employees, customers, suppliers, or
business partners or associates;     (b)   No Publicity — publishing any
opinion, fact, or material, delivering any lecture or address, participating in
the making of any film, radio broadcast, or television transmission; or
communicating with any representative of the media relating to confidential
matters regarding the business or affairs of the Company which you were involved
with during your employment;     (c)   Nondisclosure of Trade Secrets — failure
to hold in confidence all Trade Secrets of the Company that came into your
knowledge during your employment by the Company, or disclosing, publishing, or
making use of at any time such Trade Secrets, where the term “Trade Secret”
means any technical or nontechnical data, formula, pattern, compilation,
program, device, method, technique, drawing, process, financial data, financial
plan, product plan, list of actual or potential customers or suppliers, or other
information similar to any of the foregoing, which (i) derives economic value,
actual or potential, from not being generally known to and not being readily
ascertainable by proper means by, other persons who can derive economic value
from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy;     (d)  
Nondisclosure of Confidential Information — failure to hold in confidence all
Confidential Information of the Company that came into your knowledge during
your employment by the Company, or disclosing, publishing, or making use of such
Confidential Information, where the term “Confidential Information” means any
data or information, other than Trade Secrets, that is valuable to the Company
and not generally known to the public or to competitors of the Company;

 

--------------------------------------------------------------------------------

 

  (e)   Return of Materials — your failure, in the event of your termination of
employment for any reason, promptly to deliver to the Company all memoranda,
notes, records, manuals, or other documents, including all electronic or other
copies of such materials and all documentation prepared or produced in
connection therewith, containing Trade Secrets or Confidential Information
regarding the Company’s business, whether made or compiled by you or furnished
to you by virtue of your employment with the Company; or your failure promptly
to deliver to the Company all vehicles, computers, credit cards, telephones,
handheld electronic devices, office equipment, and other property furnished to
you by virtue of your employment with the Company;     (f)   Noncompete and
Nonsolicitation — rendering services for any organization as an employee,
officer, director, consultant, advisor, agent, broker, independent contractor,
principal, or partner, or engaging directly or indirectly in any business which,
in the sole judgment of the Company, is or becomes competitive with the Company
during the one (1) year period following the termination of your employment; or
directly or indirectly soliciting any customer, supplier, contractor, employee,
agent, or consultant of the Company with whom you had contact during the last
two years of your employment with the Company or became aware of through your
employment with the Company, to cease doing business with, or to terminate their
employment or business relationship with, the Company; or     (g)   Violation of
Company Policies — violating any written policies of the Company applicable to
you, including, without limitation, the Company’s insider trading policy.

    The provisions of this Section 17 are in addition to, and shall not
supersede, the terms of your Employee Patent and Confidential Information
Agreement entered at the time you were employed by the Company.       You
expressly acknowledge and affirm that the foregoing provisions of this
Section 17 are material and important terms of this Agreement and that your
agreement to be bound by the terms of this Section 17 is a condition precedent
to your FY2009 Awards.   18.   All determinations regarding the interpretation,
construction, enforcement, waiver, or modification of this Agreement and/or the
Plan shall be made in the Company’s sole discretion or, in the case of Executive
Officer Awards, by the Committee in its sole discretion and shall be final and
binding on you and the Company. Determinations made under this Agreement and the
Plan need not be uniform and may be made selectively among individuals, whether
or not such individuals are similarly situated.   19.   If any of the terms of
this Agreement in the opinion of the Company conflict or are inconsistent with
any applicable law or regulation of any governmental agency having jurisdiction,
the Company reserves the right to modify this Agreement to be consistent with
applicable laws or regulations.   20.   You understand and acknowledge that the
Company holds certain personal information about you, including but not limited
to your name, home address, telephone number, date of birth, social security
number, salary, nationality, job title, and details of all Shares awarded,
cancelled, vested, unvested, or outstanding (the “personal data”). Certain
personal data may also constitute “sensitive personal data” within the meaning
of applicable local law. Such data include but are not limited to the
information provided above and any changes thereto and other appropriate
personal and financial data about you. You hereby provide explicit consent to
the Company and any Subsidiary to process any such personal data and sensitive
personal data. You also hereby

 

--------------------------------------------------------------------------------

 

    provide explicit consent to the Company and any Subsidiary to transfer any
such personal data and sensitive personal data outside the country in which you
are employed, and to the United States. The legal persons for whom such personal
data are intended are the Company and any third party providing services to the
Company in connection with the administration of the Plan.   21.   By accepting
this award, you acknowledge having received and read the Plan Prospectus, and
you consent to receiving information and materials in connection with this Award
or any subsequent awards under the Company’s long-term performance plans,
including without limitation any prospectuses and plan documents, by any means
of electronic delivery available now and/or in the future (including without
limitation by e-mail, by Website access, and/or by facsimile), such consent to
remain in effect unless and until revoked in writing by you. This Agreement and
the Plan, which is incorporated herein by reference, constitute the entire
agreement between you and the Company regarding the terms and conditions of this
Award.   22.   You submit to the exclusive jurisdiction and venue of the federal
or state courts of the Commonwealth of Pennsylvania to resolve all issues that
may arise out of or relate to and all determinations made under this Agreement.
This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania, without regard to conflicts or choice of law rules or principles.
  23.   If any court of competent jurisdiction finds any provision of this
Agreement, or portion thereof, to be unenforceable, that provision shall be
enforced to the maximum extent permissible so as to effect the intent of the
parties, and the remainder of this Agreement shall continue in full force and
effect.   24.   Neither your FY2009 Awards, this Award Agreement, nor the Plan
constitute a contract of employment; nor do they guarantee your continued
employment for any period required for all or any of your Options to vest or
become exercisable.

 

--------------------------------------------------------------------------------

 

SUPPLEMENT TO EXHIBIT A OF
THE 2009 LONG-TERM INCENTIVE PLAN AWARDS AGREEMENT
As noted in the agreement governing your 2009 awards under the Long-Term
Incentive Plan, which was offered to you via an email dated 13 October 2008 and
must be accepted by you no later than 31 December 2008 (“Awards Agreement”),
Performance Shares granted to you will be earned based on certain performance
metrics which were not finalized by the Management Development and Compensation
Committee of the Board of Directors at the time the Awards Agreement was
transmitted to you. At its November meeting, the Committee approved the
Performance Shares payout schedule (attached) for the 1 October 2008 to 30
September 2011 measurement period. After the conclusion of the performance
cycle, the Committee will determine the level of performance and approve the
payout percentage of the Performance Shares based on the weighted average of the
Payout Factors in the schedule below. The payout percentage will be multiplied
by the number of Performance Shares indicated in your Awards Agreement to
determine the number of shares you will receive.
The measurements for this three-year period will emphasize both growth and
returns. Growth will be measured by the change in Earnings per Share (EPS
growth) over the prior year and will be weighted at 33%. Return will be measured
based on the spread between the Return on Capital Employed (ROCE) over the
Company’s cost of capital as calculated by Corporate Treasury, and will be
weighted at 67%. Each of these metrics will be measured on an annual basis,
totaled, then divided by three to determine the average performance for the
measurement period.

 

--------------------------------------------------------------------------------

 

Fiscal Year 2009 Performance Share Awards Payout Schedule
(33% Growth and 67% Return)

      EPS Growth   Payout       -10%       0%   0%     35%   4%     50%   7%  
  80%   9%   100% 10%   120% 11%   130% 13%   160% 15%   180% 16%   200%

      ROCE Spread
(ROCE over Cost of Capital)   Payout       < 0%       0%    0%     50% +1%  
  75% +2%   100% +3%   150% +4%   200%

This Supplement shall be incorporated into Exhibit A of the Awards Agreement and
shall be part of the Awards Agreement.