EX-10.19



 





Exhibit 10.19



TERMS AND CONDITIONS




AIR PRODUCTS’

STOCK INCENTIVE AWARD

(“AWARD”)



These Terms and Conditions govern the stock options awarded to certain Air
Products employees as of 1 October 2002 (“Options”). Additional capitalized
words are defined in Section 4.




1. OPTIONS




     1.1 Grants. Options to purchase shares of Common Stock from the Company
shall be granted to such Eligible Employees as the Vice President-Human
Resources shall select. Options shall be evidenced by an Option grant letter
which shall specify the number of shares of Common Stock, as determined by the
Vice President-Human Resources, to which it pertains and which shall be subject
to these Terms and Conditions.



     1.2 Grant Date. The date of grant of the Option is 1 October 2002.



     1.3 Option Price. Shares of Common Stock can be purchased under an Option
at the price of US $43.09 per share.



     1.4 Option Term. Each Option that has not been Exercised or terminated
shall expire at midnight Eastern Standard Time on 1 October 2012.



     1.5 Exercisability. Except as provided below, Options may be Exercised
beginning on 1 October 2005 until the expiration of the Option term.



     1.6 Method of Exercise. The Company will employ an outside service firm to
handle all Option administration. That firm will provide employees with
specific
instructions on how to exercise their Options and with a description of the
various forms of exercise permitted. This information will be provided in a
separate communication prior to the date, 1 October 2005, that the Options
become exercisable.



     1.7 Options Non-Transferable. No Option may be sold, assigned, pledged or
otherwise transferred by a Participating Employee during his or her lifetime.
During a Participating Employee’s



 









 







lifetime, only the Participating Employee, or, in the case of incompetency, his
or her guardian or legal representative, may exercise his or her Option.



     1.8 Death or Retirement. If a Participating Employee’s employment by the
Company or an Affiliated Organization terminates due to his or her death or
Retirement, his or her Option, if unexercised, will not be terminated and may
be
Exercised for the remainder of the Option term, but no sooner than 1 October
2005, by the former Employee or, in the event of death, his or her Beneficiary.



     1.9 Other Terminations.




     (a) Involuntary Termination. If a Participating Employee’s
employment by the Company and all Affiliated Organizations is
involuntarily terminated due to Company action necessitated by business
conditions, including, but not limited to, job eliminations, workforce
reductions, divestitures, sale by the Company of an Affiliated
Organization and plant closings, the former Employee’s Option, if
unexercised, will not be terminated immediately. The Option may be
Exercised after his or her termination during the six months following 1
October 2005 or the former Employee’s last day of employment, whichever is
later.




If a Participating Employee’s employment by the Employer is involuntarily
terminated for any reason other than Company action described above, his
or her Option will be terminated as of the close of business on his or her
last day of employment.




     (b) Voluntary Terminations. If a Participating Employee’s employment
by the Employer and all Affiliated Organizations is terminated voluntarily
by the Employee for any reason except Retirement, his or her Option shall
be terminated as of the close of business on his or her last day of
employment.




     (c) Determination of Cause for Termination. The Vice President -
Human Resources shall determine, in his or her sole discretion, the reason
for termination of a Participating Employee’s employment.



     1.10 Long-Term Disability. If a Participating Employee’s employment with
the Company and all Affiliated Organizations becomes inactive due to his or her
Long-Term Disability, his or her Option, if unexercised, shall not be
terminated
and may be Exercised for the remainder of the Option



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term, but no sooner than 1 October 2005; provided, however, that such a
disabled
former Employee’s Option shall be terminated upon cessation of the Long-Term
Disability, unless he or she returns to active employment as an Employee with
the Company or an Affiliated Organization, or is involuntarily terminated.



     1.11 Leaves of Absence; SEP Program. If a Participating Employee’s
employment status becomes classified as inactive due to a leave of absence or
changes to U. S. Supplemental Employee Program (SEP), his or her Option, if
unexercised, may not be Exercised until such time as he or she returns to
active
employment as an Employee, and in no event earlier than 1 October 2005 nor
later
than 1 October 2012.



     1.12 Lay Offs. If a Participating Employee is laid off, his or her Option,
if unexercised, may not be Exercised until such time as he or she returns to
active employment as an Employee, and in no event earlier than 1 October 2005
nor later than 1 October 2012.



     1.13 Termination During Inactive Status. In the event that a Participating
Employee with an outstanding Option dies, retires, or develops a permanent and
total disability while their ability to Exercise is suspended because their
employment classification is Layoff, Leave of Absence, or SEP, then that
individual or their Beneficiary will be permitted a time period to Exercise
their Option not to exceed six (6) months from the later of their death,
disability or Retirement and 1 October 2005, and extending not later than 1
October 2012.



     1.14 Foreign Residents. The Vice President — Human Resources shall have
authority to determine, adjust and modify the terms and conditions of Options
for Participating Employees working outside the United States to fulfill the
purposes of the Award. Without limiting the foregoing, the Vice President -
Human Resources may make deviations from or additions to these Terms and
Conditions if necessary or advisable to comply with, or obtain favorable
treatment for Participants or the Employer under laws in other countries in
which the Employer operates or has employees, including, without limitation,
granting other incentive awards in lieu of Options. All references in these
Terms and Conditions to Options and Exercise shall also refer, respectively, to
any such other incentive awards and to delivery or payment of any such other
incentive awards unless the context clearly requires otherwise. Nothing
contained herein shall require the Award to be adjusted or administered in a
manner qualifying it for preferential tax treatment in any jurisdiction.



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2. DECISIONS AND ADMINISTRATION




     2.1 General. The Award is administered by the Vice President — Human
Resources. All authority, powers and duties of the Company, whether
specifically
set forth in these Terms and Conditions or otherwise necessary to carry out the
Award, are assigned to the Vice President — Human Resources or his or her
delegate.



     2.2 Decisions and Interpretation. The Vice President — Human Resources has
the right and discretionary authority to decide all questions of eligibility
for
Options or right to exercise Options, and to construe and interpret these Terms
and Conditions and all other aspects of the Award. The Vice President — Human
Resources may correct any defect, supply any omission, or reconcile any
inconsistency in these Terms and Conditions or in any other writing pertaining
to the Award in the manner and to the extent he or she shall deem necessary to
carry the Award into effect. Interpretations and decisions made by the Vice
President — Human Resources under the Award including, without limitation,
determination of eligibility, and determination of the terms and conditions of,
and amounts payable with respect to, Options need not be applied in a uniform
manner to all Participants similarly situated.



     2.3 Procedures. As administrator of the Award, the Vice President — Human
Resources shall have the authority to adopt, alter and repeal any
administrative
rules, guidelines and practices governing the Award that he or she deems
advisable. Such procedures may or may not be evidenced in writing.



     2.4 Decisions Final. Any decision, interpretation, or other action made or
taken in good faith by the Vice President — Human Resources arising out of or
in
connection with the Award shall be final, binding and conclusive on the
Employer, the Participants and all employees of the Employer and their
respective heirs, executors, administrators, successors and assigns.



3. GENERAL PROVISIONS




     3.1 Amendment. The Vice President — Human Resources may amend the terms
and conditions of any Option, prospectively or retroactively, but no such
amendment or other action by the Company shall impair the rights of any
Participant without the Participant’s consent, except as required to comply
with, or obtain approval, qualification, or exemption under, any applicable tax
or other laws.



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     3.2 No Funding. The Award is unfunded. The Company shall not be required
to establish any special or separate fund or to make any other segregation of
assets to assure the payment of Options. With respect to any payments or
delivery of shares not yet made to a Participant by the Company, nothing
contained herein shall give any such Participant any rights that are greater
than those of a general creditor of the Company.



     3.3 Conditions to Issuance or Delivery of Common Stock. All shares of
Common Stock delivered under the Award shall be subject to such restrictions on
sale by the Participant as the Company may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Common Stock is then listed, any applicable
federal or state securities law, any applicable corporate law, and any
applicable foreign law, and the Company may cause a legend or legends to be put
on Common Stock certificates delivered under the Award to make appropriate
reference to such restrictions. Further, if, at any time, counsel to the
Employer shall be of the opinion that any sale or delivery by the Company of
shares of Common Stock pursuant to an Option under the circumstances is, or may
be, unlawful, not in compliance with any applicable regulation, rule or order,
or that such sale or delivery will or may result in the imposition of excise
taxes or penalties under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such sale or
delivery, and the right to exercise any Option shall be suspended until, in the
opinion of said counsel, such sale or delivery shall be lawful, in compliance
with such applicable regulations, rules or orders and free of such excise taxes
or penalties. The Company may limit the number of shares that can be purchased
upon Exercise of an Option to limit the volume of trading in Common Stock if
counsel to the Company is of the opinion that such limitation is required or
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Common Stock is then
listed, any applicable federal or state securities law, any applicable
corporate
law, and any applicable foreign law.



     3.4 No Additional Rights. Neither the Award nor the grant of any Option
hereunder shall give any Participant or other person any right except rights to
purchase Common Stock under these Terms and Conditions or, where applicable,
rights to another incentive award which may be made in lieu of an Option under
these Terms and Conditions or other applicable terms and conditions. The grant
of an Option to a Participating Employee shall not be deemed to create any
right
of such Employee or any other employee to receive additional awards in the
future. Further, no rights are



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created with respect to the terms of employment by, or continuance of
employment
by, or length of employment with, the Employer or any Affiliated Organization;
nor shall there be a limitation in any way, except as provided by applicable
law, on the right of the Employer or any Affiliated Organization by which an
employee is employed to terminate his or her employment at any time.



     3.5 Withholding of Taxes. The Employer shall have the right to deduct from
all cash or property deliverable to a Participant under the Award any taxes,
levies, imposts, deductions, charges or withholdings required by law to be
withheld with respect to the delivery of such cash or property. The Employer
reserves the right to deduct from wages paid by it to a Participant any amount
necessary to pay all or any portion of the withholding taxes required to be
withheld incidental to the Exercise of an Option or delivery of any other
incentive award made in lieu of an Option. Subject to any terms and conditions
which the Vice President — Human Resources may impose, any withholding
obligation may be satisfied by reducing the number of shares of Common Stock
otherwise deliverable upon Exercise of an Option.



     3.6 No Effect on Other Benefits. No Option grant or Exercise shall be
deemed compensation for purposes of computing benefits, or otherwise affect any
benefits, under any employee benefit plan or program of the Employer or any
Affiliated Organization now or subsequently in effect, including, but not
limited to, retirement and life insurance plans or programs. Except as
otherwise
required by governing law, no Option grant or Exercise shall be deemed wages
for
purposes of legally imposed benefits or emoluments including, but not limited
to, mandatory profit sharing, housing allowances, severance pay and vacation or
thirteenth month pay.



     3.7 Costs. Commissions, charges, taxes or other amounts, of any kind or
nature, incurred by a Participant in receiving or Exercising an Option, selling
shares under an Option, obtaining share certificates, or otherwise in
connection
with the Award are the sole responsibility of the Participant.



     3.8 Misconduct. In the event the Vice President — Human Resources
determines that a Participant has at any time (a) used for personal gain or
disclosed to unauthorized persons any confidential or proprietary information
or
trade secrets of the Employer or Affiliated Organizations, or (b) breached any
agreement with, or violated any fiduciary obligation owed to, the Employer or
any Affiliated Organization, all outstanding Options held by such Participant
shall be terminated as of the date of such determination.



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     3.9 Non-Stockholder. A Participant shall not be deemed, for any purpose,
to be or have rights as a stockholder of the Company with respect to shares of
Common Stock subject to the Options until the date as of which such shares of
Common Stock are actually issued in the name of the Participant. No adjustments
shall be made for dividends or distributions or other rights for which the
record date is prior to the date as of which a Participant becomes a
stockholder.



     3.10 Governing Law. These Terms and Conditions, the Award and actions
taken in connection therewith shall be governed and construed in accordance
with
the laws of the Commonwealth of Pennsylvania.



     3.11 Captions. The captions to the several sections of these Terms and
Conditions are not a part of the Award or intended to have any legal
significance in the interpretation thereof, but are merely guides or labels to
assist in locating the several sections hereof.



     3.12 Dilution and Other Adjustments. Notwithstanding any other provision
of these Terms and Conditions to the contrary, in the event of any change in
the
outstanding shares of Common Stock by reason of any stock dividend or split,
recapitalization, merger, consolidation, combination or exchange of shares or
other similar corporate change, an equitable adjustment shall be made in the
number and/or kind of shares and/or purchase price per share subject to
outstanding Options, to the extent such an adjustment is needed, as determined
by the Vice President — Human Resources, to preserve, without increase or
decrease, the value of such Options.



4. DEFINITIONS



For purposes of these Terms and Conditions, the following words have the
following meanings:




     4.1 “Affiliated Organization” means any subsidiary, partnership or other
entity in which the Company holds, directly or indirectly, a fifty percent
(50%)
or greater ownership interest.



     4.2 “Beneficiary” means the person or persons who are designated by a
Participant as his or her beneficiary for the Option in accordance with
beneficiary designation procedures adopted by the outside service provider
administering the Options. If there is no such designated Option beneficiary,
“Beneficiary” shall mean the person or persons who were most recently named as
the beneficiary or beneficiaries of basic life insurance provided to the
Participant by an Employer, if any. If there is no



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beneficiary named under either of the above methods, the Beneficiary shall be
the Participant’s estate or other legal representative.



     4.3 “Common Stock” means the common stock, US $1.00 par value, of the
Company.



     4.4 “Company” means Air Products and Chemicals, Inc.



     4.5 “Eligible Employee” means an Employee who was employed in an active
classification on 1 October 2002, whose salary grade level is 117 or below, (or, in the case of a Participating Subsidiary, an equivalent compensation level) or who is otherwise deemed ineligible for the Company’s Long Term Incentive
Plan.



     4.6 “Employee” means a full or part-time regular employee of the Company
or a Participating Subsidiary and shall not include any employee working under
the Supplemental Employment Program, the Cooperative Education / Summer Intern
Program or any other temporary classification, or any individual who is a
consultant, a leased or contract worker or designated as an independent
contractor in an agreement with the Employer.



     4.6 “Employer” means any one or more of the Company and the Participating
Subsidiaries.



     4.7 “Exercise” means to purchase shares under an Option.



     4.8 “Long-Term Disability” means, with respect to a Participating
Employee, to have an inactive employment status reflected in the employment
records of the Employer due to a long-term disability.



     4.9 “Participant” means a Participating Employee, or any former
Participating Employee, who holds an unexercised Option which has not expired
or
been terminated or, in the event of the death of such a Participating Employee
or former Participating Employee, the Beneficiary of such Participating
Employee
or former Participating Employee.



     4.10 “Participating Employee” means an Employee who holds an unexercised
Option granted to him or her under Section 1.1 which has not expired or
terminated.



     4.11 “Participating Subsidiary” means any Affiliated Organization of the
Company which has been designated by the Vice-President Human Resources to
participate in the Award.



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     4.12 “Retirement” shall mean termination of employment with the Company
and any Affiliated Organization by an employee who has the right to begin
receiving immediate annuity retirement benefits from a pension plan sponsored
or
contributed to by the Company or an Affiliated Organization. In the event the
Participating Employee is not covered by any such pension plan, “Retirement”
shall be determined from the records of the Company and the Affiliated
Organizations.



     4.13 “Vice President — Human Resources” means the Vice President — Human
Resources of the Company.



     IN WITNESS WHEREOF, the Company has caused these Terms and Conditions to
be executed by its duly authorized officer as of 1 October 2002.


	 	 	 	 	 
	 	AIR PRODUCTS AND CHEMICALS, INC.

 	 
	 	BY:  	 	 
	 	 	Chairman, President and 	 
	 	 	Chief Executive Officer 	 
	 





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