Document:

EX-10.24

 

Exhibit
10.24

Compensation Program

for Nonemployee Directors

	a.	 	Each director shall be paid an annual retainer of $50,000 for serving as a member of the
Board of Directors and any Board Committee(s), which retainer shall be payable in quarterly
installments at the end of each quarter. Fifty percent of this retainer will be paid by the
Company in the form of a credit to the directors’ Air Products Stock Account and converted to
deferred stock units under the Deferred Compensation Program for Directors.
	 
	b.	 	Each director who serves as the Chairman of a Board Committee shall be paid an additional
annual retainer of $10,000, which retainer shall be payable in quarterly installments.
	 
	c.	 	Each director shall be paid a meeting fee of $1,500 per meeting
attended.*/
	 
	d.	 	Deferred stock units with a targeted dollar value of $100,000 shall be credited to each
director’s Air Products Stock Account under the Deferred Compensation Program for Directors
(i) effective as of the date the director first serves on the Board, and (ii) annually,
notwithstanding the date of first service, for directors continuing in office after the Annual
Meeting of Shareholders, effective as of the day of the Annual Meeting. The number of units
to be credited will be determined based on the Fair Market Value of a share of common stock of
the Company as determined under the Program on the date credited, rounded up to the nearest
whole share unit.

 

 

	e.	 	Directors shall be reimbursed for out-of-pocket expenses incurred in attending regular and
special meetings of the Board and Board Committees and any other business function of the
Company at the request of the Chairman of the Board. Expenses will be reimbursed as
submitted.**/

 

			
	*/	 	For purposes of administering these provisions, a director will be
considered to have attended any meeting for which he or she was present in person or by secure
telephone conference call for substantially all of the meeting, as determined by the Corporate
Secretary. Members of the Audit Committee who participate with management and/or the
independent auditors to review such things as quarterly earnings releases and registration
statements as required by law or listing standard will also receive the meeting fee.
Directors who meet with a constituent or other third party on behalf of the Company and at the
request of the Chief Executive Officer will also receive the meeting fee.
	 
	**/	 	 Directors are reimbursed at the rate of $.485 per mile or such rate as is
published by the Internal Revenue Service for use of their personal cars in connection with
Company business. Directors using personal aircraft or private carrier will be

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	 	 	reimbursed for
such expenses at a rate equivalent to first-class air fare of scheduled carriers.

G-3

 

AIR PRODUCTS AND CHEMICALS, INC.

NON-EMPLOYEE DIRECTORS

EXPENSE REPORT

	 	 	 
	EVENT(S) AND DATE(S)

	 	                                                                                                                                            
	 
	 	 
	COMMERCIAL AIRFARE

(Attach Ticket)

	 	                                                                                                                                            
	 
	 	 
	HOTEL ACCOMMODATIONS

	 	                                                                                                                                            
	 
	 	 
	MEALS

	 	                                                                                                                                            
	 
	 	 
	MILEAGE

	 	                                                                                                                                            
	 
	 	 
	CHAUFFEUR SERVICE

	 	                                                                                                                                            
	 
	 	 
	TELEPHONE TOLLS

	 	                                                                                                                                            
	 
	 	 
	MISCELLANEOUS

(Please Specify)

	 	                                                                                                                                            
	 
	 TOTAL

	 	                                                                                                                                            

	 	 	 	 	 
	 

	 	 	 	                                                                                
Signature / Date
	 
	 	 	 	 
	 

	 	 	 	                                                                                
Address

Please submit this form with attached receipts to Diane L. Geist, Assistant Corporate Secretary

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G-5EX-10.26

 

Exhibit 10.26

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 
	 	3
	Time and Manner of Making Elective Deferrals 
	 	3
	Payment of Deferred Compensation 
	 	4
	Election of Time of Payment 
	 	4
	Changes in Election of Timing of Payment 
	 	4
	Payment Following Termination of Service 
	 	5
	Accelerated Payment 
	 	5
	Payment on Death 
	 	6
	Change in Control 
	 	6
	Other Events 
	 	6
	Miscellaneous Provisions 
	 	6
	Withholding of Taxes 
	 	6
	Rights as to Common Stock 
	 	7
	Adjustments to Avoid Dilution 
	 	7
	Participant’s Rights Unsecured 
	 	7
	Nonassignability 
	 	8
	Statement of Account 
	 	8
	Administration 
	 	8
	Business Days 
	 	8
	Amendment and Termination 
	 	8
	Notices 
	 	8
	Construction; Governing Law 
	 	9
	Election Form 
	 	10
	Administrative Procedures Regarding Transfer of the Right to Payment
of Deferred Compensation 
	 	13
	Tax Consequences to Participants 
	 	17

 

 

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
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 1 January 2005.
	 
	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 to be paid by the
Company in the form of deferred stock units in accordance with the Compensation Program for
Nonemployee Directors applicable for calendar year 1997 and later periods; and, for each
participant who had not served as a director for at least six years as of 1 January 1997, the
actuarial present value of his or her prorated accrued pension (the “Pension

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	 	 	Amount”) under the Pension Plan for Directors as determined in connection with the termination
of the Plan (collectively, “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 quarterly or other specified crediting date for 1997
and later compensation, and on 21 November 1996, as to the Pension Amount.
	 
	5.	 	Elective Deferrals
	 
	 	 	Participants may elect to defer receipt of all or a specified portion of the compensation
(exclusive of expense reimbursements) otherwise payable to him or her in cash 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)	 	An account (the “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 common stock (i) on the second business day before the date credited to the
Air Products Stock Account for retainer and meeting fees, and (ii) on the effective date
specified in the Compensation Program for Non-employee Directors for crediting Directors
with initial and annual deferred stock awards. For purposes of the Plan, Fair Market
Value of a share of common stock on any date (the “valuation date”) shall be equal to the
mean of the high and low sale prices 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.”

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	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 31 December of
the year preceding payment, unless payment is made because of death or a Change in Control, in
which event interest will be credited until the date of death or the date of termination of
service as a director following the Change in Control, respectively.

	 	(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 Air Products 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.

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	 	 	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. Beginning 1 January 2006, 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 must be made for a calendar year 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 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 as follows:

	 	(i)	 	On or before 31 December 2005, a director may elect to change the
timing of payment for all of his or her Deferred Compensation Amounts by
completing an Election Form specifying the change and returning it to the
Corporate Secretary’s Office.

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	 	(ii)	 	On or after 1 January 2006, a director may change the timing of
payment for previously accrued Deferred Compensation Amounts only as follows:

	 	(x)	 	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);
	 
	 	(y)	 	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
	 
	 	(z)	 	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 participant’s Accounts attributable to the particular Deferred Compensation
Amount as of the 31 December 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 31 December 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 as to such Deferred Compensation Amount. 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.

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	 	(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 Accounts (including interest and dividend equivalents) determined as
of the date of death shall be paid in a single cash lump sum to the participant’s
estate or designated beneficiary on the earlier of the 15 January or 15 July
following such date or as soon thereafter as reasonably possible. The amount of
any cash payment in respect of deferred stock units in the Air Products Stock
Account shall be determined by multiplying the number of such units, including
fractional units, by the Fair Market Value of a share of common stock as of 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. 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 his or her Accounts (including interest and dividend
equivalents), 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. The amount of any cash
payment in respect of deferred stock units in the Air Products Stock Account shall
be determined by multiplying the number of such units, including fractional units,
by the Fair Market Value of a share of common stock as of such date of termination
of service.
	 
	 	 	 	For purposes of this paragraph, the term “Change in Control” shall mean the first
to occur of a change in the ownership or effective control of the Company or in
the ownership of a substantial portion of the assets of the Company, in each case
within the meaning of Section 409A of the Internal Revenue Code and regulations
thereunder.
	 
	 	(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.

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	 	(e)	 	Miscellaneous Provisions.

	 	(i)	 	Withholding of Taxes. The rights 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,
certificates for shares of common stock are issued upon 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 may, at the time, be 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 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.

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	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, except by gift to the participant’s family member(s) or
to trust(s) of which such family member(s) are beneficiaries and subject to the administrative
procedures and conditions set forth in the “Administrative Procedures Regarding Transfers of
the Right to Payment of Deferred Compensation” attached hereto as Exhibit B; to his or her
designated beneficiary; or by will or the laws of descent and distribution.
	 
	11.	 	Statement of Account
	 
	 	 	Statements will be sent to participants by February as to the value of their Accounts as of
the end of December of the previous year.
	 
	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

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	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):

	 	o	 	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)

	 	o	 	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 preceding 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 concerning compliance with the Federal Securities
Law:
	 
	 	(1)	 	An election to invest or to cease investing, or to change the level of investing,
in the Air Products Stock Account will only be effective if received by the Company
during a 30-day window period during which there is no material non-public information.
Such window periods generally occur during the 30-day periods starting on the second
trading day after the day when quarterly or annual earnings releases have been issued
with commentary, which usually occur in the third or fourth weeks of January, April,
July, and October. The Corporate Secretary can advise you as to the precise timing of
window periods.
	 
	 	(2)	 	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, on a Form 5 Report for the 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
	 
	 	 	 	Mandatory Deferred Compensation Amounts and the Elective Deferred Compensation Amount (if
any) are to be paid to me in a lump sum (check one):

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

	 	B.	 	Installment Election
	 
	 	 	 	Mandatory Deferred Compensation Amounts and the Elective Deferred Compensation Amount (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):

	 	o	 	The year in which my service ends.
	 
	 	o	 	___ 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.*

 

	*	 	I understand that, with respect to Deferred Compensation Amounts for the
current and prior years, this election will become effective one year from the date
received by the Corporate Secretary’s Office; unless payouts under a prior election
are scheduled to commence before this effective date, in which case 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 Mandatory and Elective Deferred
Compensation Amounts will be paid to my estate or designated
beneficiary, in a single lump sum cash payment on the earlier of the
January 15 or July 15 following the date of my death or as soon
thereafter as reasonably possible. 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 participants’ 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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EXHIBIT B

ADMINISTRATIVE PROCEDURES REGARDING TRANSFER OF THE 
RIGHT TO PAYMENT OF DEFERRED COMPENSATION

The right to receive payment of deferred compensation and earnings thereon under the Program (a
“Payment Right”) is transferable by the director participant (the “director”) only in accordance
with these Procedures. Directors are encouraged to seek financial and tax planning advice prior to
transferring a Payment Right.

	 	1.	 	Payment Rights may be transferred by directors only by gift and only to the director’s
family members or to trusts of which such family members are beneficiaries. Family members
include any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships.
	 
	 	2.	 	Prior to making any transfer, the director and transferee must complete and sign the
attached Election to Transfer Payment Rights form and return it to the Corporate Secretary’s
Office. Transfers will not be effective until the form is received, acknowledged and
accepted by the Secretary or an Assistant Corporate Secretary.
	 
	 	3.	 	Following transfer, any written notice of designation of beneficiary previously
filed by the director relating to the Payment Right is void and of no further force
and effect; and the transferred Payment Right may not be subsequently transferred by
the transferee except by will or the laws of descent and distribution.
	 
	 	4.	 	Except as otherwise provided in these Procedures, the transfer of a Payment Right to the
transferee also transfers the ancillary rights associated with the Payment Right under the
terms of the Program (references herein to “Payment Right” to include both the Payment Right
and such ancillary rights); and following transfer, the Payment Right will continue to be
subject to the same terms and conditions as were applicable immediately prior to transfer
under the Plan.
	 
	 	5.	 	Certain U.S. Securities Laws Considerations for Active Directors

	 	•	 	We strongly recommend that while engaged in service to the Company, directors discuss
in advance with the Corporate Secretary or his or her designee the possible implications
of transferring the director’s Payment Right (or altering the terms of any trust to which
the Payment Right has 

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	 	 	 	been transferred) to enable the Company to assist the director in
complying with the securities laws, including preparing any required reports for filing
with the Securities and Exchange Commission and the New York Stock Exchange. Transfer of
the Payment Right must be reported as a gift transaction on the director’s Form 5 (or
voluntarily on an earlier Form 4).

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Air Products and Chemicals, Inc.

(the “Company”)

ELECTION TO TRANSFER PAYMENT RIGHTS

Under The Deferred Compensation Program for Directors (the “Program”)

Printed name of director or former director:                                                             
                                                           

Social Security Number of director:                                                                         
                                                                   

Address of director:                                                                           
                                                                             
        

                
                   
                    
                                                                             
                                                

Telephone number of director:                                                                                                                                             

I, the director, hereby elect to make a transfer of my Payment Right as follows:

Printed name of transferee:                                                                
                                                                            

Social Security Number or

Tax Identification Number of transferee:                                                                       
                                                 

Address of transferee:                                                                                                                                                                

                                                                             
                                                                             
                          

Telephone number of transferee:                                                                         
                                                                   

Relationship of transferee to director:                                                                     
                                                    

If transferee is a trust, list names of trustee and beneficiary(s) and relationship of

beneficiary(s) to director:                 
                      
                      
                             
                                                                      

                                                                                                                                                                                    

                                                                          
                                                                          
                                

Dollar amount and/or number of deferred stock units accrued under the director’s Accounts as of the

end of the most recent calendar quarter:                                                                                                    

By signing below, I, the director, acknowledge receipt of a copy of the “Administrative Procedures
Regarding Transfers of Payment Rights” (the “Procedures”). I further acknowledge that upon payment
of my Accounts to the transferee, taxable income will be imputed to me, the director, and reported
to the appropriate tax authorities. I understand that I am responsible for any taxes payable as a
result of such payment.

	 	 	 	 	 
	                                                                                                    

	 	 	 	                                                                                
	Signature of director

	 	 	 	Date

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By signing below, the transferee acknowledges receipt of a copy of the Procedures and agrees to
comply with and be subject to the terms and conditions of the Plan (as modified by the Procedures),
and agree not to further transfer the Payment Right.

	 	 	 	 	 
	                                                                                                    

	 	 	 	                                                                                
	Signature of transferee

	 	 	 	Date

Receipt of this executed Election form is hereby acknowledged and accepted, and the requested
transfer of stock option will be effective this                                         day of                                         ,                     .

	 	 	 
	 

	 	AIR PRODUCTS AND CHEMICALS,INC.
	 
	 	 
	 

	 	By:                                                            
	 

	 	Name:                                                       
	 

	 	Title:                                                         

I-17

 

TAX CONSEQUENCES TO PARTICIPANTS

     The following is a general summary under current law of the U.S. tax consequences of
participation in the Program. The tax laws could change prior to your retirement or other
termination of your service as a director in a way that accelerates taxation of deferred amounts.
Legislation proposed by the Administration and others would impose or authorize the U.S. Treasury
to impose current taxation on deferred compensation arrangements deemed to be abusive.

Income Taxes

	 	1.	 	Deferred amounts and earnings thereon including any appreciation in value of deferred
stock units, are not subject to income tax until 
	 	distributed.
	 
	 	2.	 	When distributed, the full amount of any cash distributed and the fair market value of
any shares distributed will be taxable at the 
	 	income tax rates then in effect.
	 
	 	3.	 	Depending on the laws in your state of residency, payments may be nontaxable retirement
benefits for state and local income tax 
	 	purposes.
	 
	 	4.	 	Deferred amounts remaining unpaid at your death constitute income in respect of a
decedent and will be subject to income tax. Any
	 	estate or inheritance tax attributable to
the deferred amounts will be deductible by your estate or beneficiaries in computing the
income tax.

Estate Tax

Deferred amounts remaining unpaid at your death will be includable in your estate for federal
estate tax purposes. An unlimited marital deduction is allowed for property passing to your
spouse, which has the effect of removing deferred amounts from your federal taxable estate if you
predecease your spouse. Congress enacted legislation in 2001 that phases out the estate tax in
2002-2009. This legislation sunsets in 2011, however, potentially restoring the tax at its 2001
level.

Self-Employment Tax

Self-employment tax will apply to cash and deferred stock units, and earnings thereon including
appreciation, in the year payout is received. Self-employment tax does not apply to
nonresident aliens. Self-employment tax is imposed currently at a maximum rate of 15.3% on earned
income up to the Social Security Wage Base for the particular year, and 2.9% on earned income in
excess of the wage base. Wages received as an employee are taken into account first in determining

I-18

 

whether the Social Security Wage Base has been exceeded. Thus, the 15.3% Social Security element
of self-employment tax will apply only if you do not have wages or other earned income in excess of
the Wage Base. One-half of your self
employment tax liability can be deducted from your adjusted gross income for federal income tax
purposes.

Lump-Sum vs. Installment Payout

	 	1.	 	Election of installment payments or a later year lump sum will allow you to defer income
taxes on the cash or deferred stock units 
	 	and earnings and appreciation thereon, as compared
to a lump sum payout soon after retirement.
	 
	 	2.	 	Election of a lump-sum payment may reduce your self-employment tax if you do not expect
to have other income up to or in excess

	 	of the Social Security Wage Base following your
retirement from the Board of Directors because the amount of a lump-sum payment in excess of
the Social Security Wage Base will escape the Social Security portion of self-employment
tax.

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