AIR
PRODUCTS AND CHEMICALS, INC.
DEFERRED
COMPENSATION PLAN
EFFECTIVE
JANUARY 1, 2005
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1
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Article 1 Purpose of the Plan
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2
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2
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2
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2
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Section 2.2 Gender and Number
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9
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Article 3 Deferral Elections
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10
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Section 3.1 Deferral Elections
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10
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Article 4 Accounting and
Valuation
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11
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Section 4.1 Accounting for Elective
Deferrals, Core Credits, Matching Credits, Bonus Deferrals,
Deferred Special Bonus and Earnings
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11
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Section 4.2 Deferred Company Stock
Account
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14
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Section 4.3 Statements to
Participants
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16
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Article 5 Vesting and
Distribution
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16
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Section 5.2 Eligibility for
Distribution
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Section 5.3 Form of Payment and
Commencement of Distribution to Participants
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17
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Section 5.4 Change in Control
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21
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21
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Section 6.1 Plan Administration and
Interpretation
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Section 6.2 Claim and Appeal
Procedure
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24
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Section 7.1 Benefits Unfunded
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Section 7.2 Non-qualified Plan
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Article 8 Amendment and
Termination
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25
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Section 8.1 Amendment and
Termination
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25
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Article 9 General Provisions
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26
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Section 9.1 Non-alienation of
Benefits
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Section 9.2 Contractual
Obligations
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26
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Section 9.3 No Employment Rights
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27
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Section 9.4 Minor or Incompetent
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27
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Section 9.5 Unclaimed Amounts
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27
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Section 9.6 Payee Unknown
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27
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Section 9.7 Illegal or Invalid
Provision
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28
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Section 9.8 Governing Law and
Headings
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28
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Section 9.9 Liability Limitation
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28
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28
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Section 9.11 Entire Agreement
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29
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Section 9.12 Binding Effect
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AIR
PRODUCTS AND CHEMICALS, INC.
DEFERRED COMPENSATION PLAN
As Amended and
Restated Effective January 1, 2005
WHEREAS,
Air Products and Chemicals, Inc. (the “Company”)
established, effective October 1, 1983, a nonqualified savings
plan named the Supplementary Savings Plan (the “Plan”)
for employees whose participation in the Air Products and
Chemicals, Inc. Retirement Savings Plan (formerly the
“Retirement Savings and Stock Ownership Plan,”
hereinafter referred to as “the Savings Plan”) is
limited due to certain provisions of the Internal Revenue Code (the
“Code”), which Plan was thereafter amended and restated
effective as of January 1, 1987, October 1, 1989 and
April 1, 1998; and
WHEREAS,
the Company now wishes to amend and restate the Plan for various
changes as follows: to provide supplemental Company Core
Contributions for employees whose Company Core Contributions under
the Savings Plan are limited due to provisions of the Code; to
comply with Section 409A of the Code and regulations
thereunder applicable to nonqualified deferred compensation plans;
and, effective September 1, 2006, to transfer into the Plan
existing Deferred Cash Account and Deferred Stock Account balances
under the Company’s Annual Incentive Plan, to provide for
deferred payment of future awards made under the Annual Incentive
Plan and to rename the Plan the Air Products and Chemicals, Inc.
Deferred Compensation Plan.
NOW,
THEREFORE, the Plan is hereby amended and restated effective
January 1, 2005, as set forth herein. The rights and benefits,
if any, of a former employee shall be determined in accordance with
the provisions of the Plan in effect
1
on the date of his or her
separation from service with the Company and all
Employers.
Section 1.1 Purpose. This Plan is a non-qualified,
unfunded employee benefit plan established to provide supplementary
and excess retirement savings benefits to a certain select group of
management or highly compensated persons in the employ of Air
Products and Chemicals, Inc. and participating
subsidiaries.
Section 2.1 Definitions. Except as specifically
provided herein, all capitalized terms shall have the meaning
provided in the Savings Plan. As used herein, the following terms
shall have the following meanings, unless the context clearly
indicates otherwise:
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(a)
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“Annual Incentive
Plan” shall mean the Air Products and
Chemicals, Inc. 2001 Annual Incentive Plan, as amended from time to
time.
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(b)
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“Annual
Salary” shall mean the total annual salary
of an Employee which would be payable by the Company or an Employer
if the Employee made no Deferral Election under the Plan or any
similar deferral election under the Savings Plan or other deferred
compensation or cafeteria plan, excluding:
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(1)
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Except as expressly provided herein,
discretionary bonuses or awards, including, without limitation,
Annual Incentive Plan awards, stock options, or other stock awards,
scholastic aid, or payments and awards for suggestions and
patentable
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inventions, other merit awards,
expense allowances, and noncash compensation (including imputed
income).
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(2)
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Core Credits and Matching Credits
under this Plan and Company Core Contributions and Company Matching
Contributions under the Savings Plan; accruals or distributions
under the Savings Plan and this Plan; and payments, accruals, and
distributions under any severance or incentive plan or other
retirement, pension, or profit-sharing plan of the Company or an
Employer;
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(3)
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Overtime payments, shift premium
payments, commissions, mileage, and payments in lieu of vacation by
the Company or an Employer; and
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(4)
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All
supplemental compensation from the Company or an Employer for
domestic and overseas assignments, including without limitation,
premium pay, cost of living and relocation allowances, mortgage
interest allowances and forgiveness, tax-equalization payments, and
other emoluments of such service.
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(c)
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“Beneficiary”
shall mean the person or
persons, if any, designated by the Participant on a form provided
by the Plan Administrator, or, in the event no such designation is
made or the person or persons designated do not survive the
Participant, shall mean the person(s), trust(s), or other
recipient(s) who would be entitled to receive the balance of a
Participant’s accounts, if any, under the Savings Plan
following the Participant’s death. Any designation of a
Beneficiary may be revoked or changed by the Participant at any
time and from time to time prior to death without the consent of
the Beneficiary.
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(d)
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“Board”
shall mean the board of
directors of the Company or any Committee thereof acting on behalf
of the Board pursuant to its charter or other delegation of power
from the Board, or the Chairman of the Board acting pursuant to a
delegation of authority from the Board.
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(e)
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“Bonus
Deferrals” shall mean deferred payment awards
described in Section 5 of the Annual Incentive Plan or any
predecessor provision thereof that are deferred pursuant to a
Participant’s Deferred Bonus Election described
therein.
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(f)
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“Change in
Control” shall mean the first to occur of any
one of the events described below:
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(1)
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Stock Acquisition. Any
“person”, as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934 (the
“Act”), other than the Company or a corporation whose
outstanding stock entitled to vote is owned in the majority,
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 35% 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 35% of
such securities, or the later of the effective date of an agreement
for the merger, consolidation or other reorganization
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of the Company
or the date of approval thereof by a majority of the
Company’s shareholders, as the case may be.
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(2)
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Change in Board. During any 12-month
period, individuals who at the beginning of such period were
members of the Board cease for any reason to constitute at least a
majority of the Board, 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 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 fail to be
elected by the shareholders of the Company.
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(3)
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This provision shall in all cases be
interpreted to comply with the requirements of Code
Section 409A, as amended.
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(g)
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“Code”
shall mean the Internal
Revenue Code of 1986, as amended from time to time.
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(h)
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“Claims
Committee” shall mean the committee appointed
by the Vice President-Human Resources to review and determine
appeals of claims arising under the Plan in accordance with
Section 6.2.
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(i)
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“Common
Stock” shall mean common stock of the
Company.
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(j)
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“Company”
shall mean Air Products
and Chemicals, Inc. and any successor thereto by merger, purchase,
or otherwise.
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(k)
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“Company Core
Contributions” shall mean Company Core
Contributions made on behalf of a Participant under, and as defined
in, the Savings Plan.
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(l)
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“Company Matching
Contributions” shall mean Company Matching
Contributions made on behalf of a Participant under, and as defined
in, the Savings Plan.
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(m)
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“Core
Credits” shall mean the amounts credited to a
Participant’s Deferred Cash Account under Section 4.1(c)
and (d).
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(n)
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“Deferral
Election” shall mean an election to defer
Annual Salary made by an Employee as described in
Section 3.2(a), including deemed elections.
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(o)
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“Deferred Bonus
Election” shall mean an election to defer all
or a portion of an award under the Annual Incentive Plan made by an
Employee in accordance with Section 5 of the Annual Incentive
Plan or any successor provision thereto.
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(p)
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“Deferred Cash
Account” shall mean a Participant’s
sub-account to which dollar denominated amounts attributable to
Elective Deferrals, Matching Credits, Bonus Deferrals, Core
Credits, deferred Special Bonus and related earnings are credited
as described in Section 4.1 below.
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(q)
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“Deferred Company Stock
Account” shall mean a Participant’s
sub-account to which company stock units are credited as described
in Section 4.2 below.
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(r)
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“Deferred Compensation
Account” shall mean the account established
for a Participant pursuant to Section 4.1 which consists of
the Deferred Cash Account and the Deferred Company Stock
Account.
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(s)
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“Distribution
Event” shall mean an event other than death
pursuant to which a Participant can become entitled to receive a
distribution under the Savings Plan, as amended from time to
time.
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(t)
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“Elective
Deferrals” shall mean the deferrals under the
Plan of all or a portion of each periodic installment of a
Participant’s Annual Salary pursuant to the
Participant’s Deferral Election.
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(u)
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“Employee”
shall mean any United
States employee of the Company or an Employer who is eligible to
participate in the Annual Incentive Plan.
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(v)
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“Employee
Contributions” shall mean Before-Tax Contributions
and (should they become available to Employees) After-Tax
Contributions to the Savings Plan.
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(w)
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“Employer”
shall mean each
subsidiary or other affiliate of the Company, some or all of whose
United States employees are participants in the Savings Plan or the
Annual Incentive Plan, either collectively, or separately as to its
Employees, as the context requires.
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(x)
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“ERISA”
shall mean the Employee
Retirement Income Security Act of 1974, as amended and in effect
from time to time.
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(y)
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“Key
Employee” shall mean any Employee or former
Employee (not including a beneficiary of either in the event that
such Employee or former Employee is deceased) who at any time
during a Plan Year is
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in
salary grade 217 or above or the equivalent grade in any future
grade structure of the Company where such grade indicates status as
an officer. The determination of whether an employee is a Key
Employee under the definition above shall be made consistent with
final regulations promulgated under Code Section 409A and
procedures developed by the Plan Administrator.
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(z)
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“Matching
Credits” shall mean the amounts credited to a
Participant’s Deferred Compensation Account as of the last
day of each pay period, or as soon as administratively feasible
thereafter, pursuant to Section 4.1(b) representing Company
Matching Contributions that would have been made to the Savings
Plan on a Participant’s behalf if the Participant’s
participation in the Savings Plan were not limited.
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(aa)
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“Participant”
shall mean an Employee
or former Employee who (i) is making Elective Deferrals and/or
Bonus Deferrals under the Plan, (ii) is receiving Matching
Credits or Core Credits under the Plan, or (iii) otherwise has
a Deferred Compensation Account.
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(bb)
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“Plan”
shall mean the Air
Products and Chemicals, Inc. Deferred Compensation Plan, as set
forth herein and as amended and in effect from time to time
hereafter.
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(cc)
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“Plan
Administrator” shall mean the Company’s
Director of Compensation and Benefits prior to February 1,
2006 and, thereafter, the Vice President – Human Resources,
or such other person or entity to whom he delegates any of his
responsibilities hereunder with respect to such delegated
responsibilities.
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(dd)
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“Plan Year”
shall mean the
twelve-month period beginning on October 1 of each calendar year
and ending on September 30 of the following calendar year. A
Plan Year shall be designated according to the calendar year in
which such Plan Year ends (e.g., the 2006 Plan Year refers to the
Plan Year beginning on October 1, 2005 and ending on
September 30, 2006).
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(ee)
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“Savings
Plan” shall mean the Air Products and
Chemicals, Inc. Retirement Savings Plan, as amended from time to
time.
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(ff)
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“Special
Bonus” shall mean a discretionary award
granted to an Employee outside of the Annual Incentive Plan which
is designated as eligible (or required) to be deferred by the Vice
President – Human Resources. Only those Employees who would
be eligible to participate in this Plan without regard to a Special
Bonus shall be able to defer a Special Bonus under this
Plan.
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(gg)
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“Tax
Limitations” shall mean Code sections 401(a),
415, 402(g), or 401(a)(17) to the extent such Code sections limit
the benefits that may be provided to certain Participants under the
Savings Plan and the Savings Plan provisions and administrative
procedures adopted by the Plan Administrator to ensure compliance
of the Savings Plan with such Code sections.
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(hh)
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“Vice President-Human
Resources” shall mean the Vice President-Human
Resources of the Company.
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Section 2.2 Gender and Number. Whenever used herein,
the masculine pronoun shall include the feminine and vice versa.
The singular shall include the plural and the plural shall include
the singular whenever used herein, unless the context requires
otherwise.
Section 3.1 Deferral
Elections.
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(a)
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Except as provided in subsection
(b), any Employee who is making Employee Contributions to the
Savings Plan, will be deemed to have made a Deferral Election to
defer a portion of his or her Annual Salary under the Plan equal to
the percentage of Annual Salary, not to exceed 16%, that the
Employee elected to make as Employee Contributions to the Savings
Plan as of December 31 of the prior calendar year, less the
amount the Employee is eligible to contribute to the Savings Plan
under the current Tax Limitations. Employee Contributions shall
first be made to the Savings Plan in a given calendar year and then
to the extent Employee Contributions exceed or would exceed Tax
Limitations, Elective Deferrals shall be made to this Plan. The
amount and timing of Elective Deferrals is determined based upon
the percentage referred to above as it exists on December 31
of the prior calendar year and will be unaffected by any change in
such election under the Savings Plan during the calendar
year.
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(b)
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Within 30 days of becoming an
Employee, an Employee may elect not to make a Deferral Election for
the remainder of the year or may affirmatively elect to defer a
portion, not to exceed 16%, of his or her Annual Salary for the
remainder of the year under the Plan, to the extent such portion
cannot be contributed to the Savings Plan due to the Tax
Limitations. Such an election shall be made in the time and manner
determined by the Plan Administrator and may not be changed or
terminated during the remainder of the calendar year In order to be
effective, such deferral election must also be accompanied by a
payout
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election which complies with section
5.3(c).
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(c)
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An
Employee may make a Deferred Bonus Election in accordance with
Section 5 of the Annual Incentive Plan and, effective 1
September 2006, such Deferred Bonus shall be accounted for
under this plan as provided in Article 4.
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(d)
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Effective January 1, 2006, an
Employee may elect to defer all or a portion of a Special Bonus
granted to the Employee. Such election shall be made in the form
and manner determined by the Plan Administrator which complies with
Section 409A of the Code as to form and timing. An
Employee’s election to defer all or a portion of a Special
Bonus may not be changed or terminated once such election is
accepted by the Plan Administrator.
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Section 4.1
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Accounting for Elective Deferrals,
Core Credits, Matching Credits, Bonus Deferrals, Deferred Special
Bonus and Earnings.
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(a)
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A
Deferred Compensation Account will be established and maintained
for each Participant on the financial books and records of the
Company or the Employer with respect to its Employees who are
Participants, as a liability to the Participant. Each
Participant’s Deferred Compensation Account shall consist of
two sub-accounts; a Deferred Cash Account and a Deferred Company
Stock Account. Within each sub-account, the Plan Administrator
shall separately account for amounts which are vested and unvested
pursuant to Section 5.1.
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(b)
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As
of the last day of each pay period, or as soon as administratively
feasible thereafter, a Participant’s Deferred Cash Account
will be credited with the amount of the Participant’s
Elective Deferrals for such period and a Matching Credit equal to
the Company Matching Contribution that would have been made under
the Savings Plan on account of the Participant’s Elective
Deferrals for the period if the Elective Deferrals had been
Employee Contributions made under the Savings Plan.
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(c)
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In
the case of an Employee who is a Company Core Contribution
Participant under the Savings Plan, as of the last day of each pay
period, or as soon as administratively feasible thereafter, the
Employee’s Deferred Cash Account will be credited with a Core
Credit equal to the difference, if any, between the Company Core
Contribution made to the Savings Plan for the period on behalf of
the Participant and the Company Core Contribution that would have
been made under the Savings Plan for the period on behalf of the
Participant if the Company Core Contribution had not been limited
by Tax Limitations.
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(d)
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In
the case of an Employee who is a Company Core Contribution
Participant under the Savings Plan, as of the end of the first
quarter of the Plan Year following a Plan Year for which an award
under the Annual Incentive Plan is granted to the Employee (whether
received all in cash or deferred in whole or part), or as soon as
administratively feasible thereafter, the Employee’s Deferred
Cash Account will be credited with a Company Core Contribution Core
Credit equal to the percentage of the Annual Incentive Plan award
indicated in the following table:
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