AIR PRODUCTS AND CHEMICALS, INC. DEFERRED COMPENSATION PLAN

(a)

"Annual Incentive Plan" shall mean the Air Products and Chemicals, Inc. 2001 Annual Incentive Plan, as amended from time to time.

(b)

"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:

(1)

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

inventions, other merit awards, expense allowances, and noncash compensation (including imputed income).

(2)

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;

(3)

Overtime payments, shift premium payments, commissions, mileage, and payments in lieu of vacation by the Company or an Employer; and

(4)

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.

(c)

"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.

(d)

"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.

(e)

"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.

(f)

"Change in Control" shall mean the first to occur of any one of the events described below:

(1)

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

of the Company or the date of approval thereof by a majority of the Company’s shareholders, as the case may be.

(2)

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.

(3)

This provision shall in all cases be interpreted to comply with the requirements of Code Section 409A, as amended.

(g)

"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.

(h)

"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.

(i)

"Common Stock" shall mean common stock of the Company.

(j)

"Company" shall mean Air Products and Chemicals, Inc. and any successor thereto by merger, purchase, or otherwise.

(k)

"Company Core Contributions" shall mean Company Core Contributions made on behalf of a Participant under, and as defined in, the Savings Plan.

(l)

"Company Matching Contributions" shall mean Company Matching Contributions made on behalf of a Participant under, and as defined in, the Savings Plan.

(m)

"Core Credits" shall mean the amounts credited to a Participant’s Deferred Cash Account under Section 4.1(c) and (d).

(n)

"Deferral Election" shall mean an election to defer Annual Salary made by an Employee as described in Section 3.2(a), including deemed elections.

(o)

"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.

(p)

"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.

(q)

"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.

(r)

"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.

(s)

"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.

(t)

"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.

(u)

"Employee" shall mean any United States employee of the Company or an Employer who is eligible to participate in the Annual Incentive Plan.

(v)

"Employee Contributions" shall mean Before-Tax Contributions and (should they become available to Employees) After-Tax Contributions to the Savings Plan.

(w)

"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.

(x)

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended and in effect from time to time.

(y)

"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

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.

(z)

"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.

(aa)

"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.

(bb)

"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.

(cc)

"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.

(dd)

"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).

(ee)

"Savings Plan" shall mean the Air Products and Chemicals, Inc. Retirement Savings Plan, as amended from time to time.

(ff)

"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.

(gg)

"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.

(hh)

"Vice President-Human Resources" shall mean the Vice President-Human Resources of the Company.

(a)

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.

(b)

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

election which complies with section 5.3(c).

(c)

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.

(d)

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.

Section 4.1

Accounting for Elective Deferrals, Core Credits, Matching Credits, Bonus Deferrals, Deferred Special Bonus and Earnings.

(a)

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.

(b)

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.

(c)

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.

(d)

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:

Employee’s Years of Service

Percentage of Annual

Under the Savings Plan

Incentive Award Credited

Less than 10

4

10-19

5

20 or more

6

(e)

As of the end of the first quarter of the Plan Year following the Plan Year for which an award under the Annual Incentive Plan is granted to an Employee, or as soon as administratively feasible thereafter, the Employee’s Deferred Cash Account will be credited