Confidential
Communication to: «First_name»
«Last_name»
As we complete
this fiscal year and begin another, I would like to take a moment
to congratulate you and to thank you for your performance and
commitment to our goals both in the past and most importantly
looking forward. You play an important role in the future
performance of our Company.
One of the
priorities of our management compensation program is to provide you
with the opportunity to share in the long-term success of Air
Products. As a result, I am pleased to present your 2009 stock
awards under the Company’s Long-Term Incentive Plan. These
awards make up the long-term component of your total pay package
and link your personal wealth to the performance of the
Company.
In 2008, we
were tracking another record year and, as you know, we ended the
year on a disappointing note. While these circumstances are
unsettling to all of us, we have learned from our experience that
we can weather these times by being smart about our choices. It is
extremely important that we balance our long-term growth goals with
a steadfast resolve to improve our margins by managing our costs,
improving pricing and acting with an unwavering commitment to
continuously improving our processes. Our shareholders demand this
and we must expect no less of ourselves. Over the next few years,
our focus and priority to achieve our goals of growth and
margin improvement will have the greatest impact on delivering EPS
growth which will enhance the value of our stock price and hence,
your award. I appreciate your hard work and I know you understand
that through the actions of your teams and you, we will make the
difference for our customers, employees and
shareholders.
Your 2009
awards are valued at $<Tot Value> and include:
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A
Nonstatutory Stock Option to purchase
«Stock_Option» shares of Common Stock at a purchase
price of $66.90 per share, which is the 1 October 2008 closing
sale price of a share of Common Stock, valued at $<SO Value>;
and
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An
award of «RSU» 4-Year Restricted Shares of
Company Common Stock issued to you as of 2 October 2008 valued
at $<RS Value>; and
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«Perf_Share» Deferred
Stock Units with a three year performance period valued at
$<PS Value>, each Unit (a “ Performance Share
”) being equivalent in value to one share of Common Stock.
Please note the performance share Earnout Schedule which is part of
this Awards Agreement will be sent to you in a separate
communication after finalization by the Management Development and
Compensation Committee of the Company’s Board of Directors
(the “Committee”). The Schedule will display how the
growth and return measures will define payout
opportunities.
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We are
committed to offering long-term incentive awards for our employees
who contribute to our success — both now and in the future.
Thank you again for your dedication and on-going contributions to
Air Products.
Your 2009
Awards are subject to and contingent upon your agreement to the
attached conditions described in Exhibit A. Please read these
conditions carefully, particularly the descriptions of
“Prohibited Activities”. This letter, together with its
Exhibit, constitutes the agreement governing your
2009 Awards
(“Awards Agreement”). Your 2009 Awards are also at all
times subject to the applicable provisions of the Long-Term
Incentive Plan (the “Plan”) and to any determinations
made by the Committee (or its delegate) with respect to your 2009
Awards as contemplated or permitted by the Plan or the Conditions.
In addition, the Committee has established a one-year holding
period for a portion of your Nonstatutory Stock Option. You are
expected to hold, for one year, 50% of the net shares (after taxes
and commissions) that you receive upon an exercise of the Stock
Option.
Neither your
2009 Awards, this Awards Agreement or the Plan constitute a
contract of employment; nor do they guarantee your continued
employment for any period required for all or any of your 2009
Awards to vest, become exercisable, be earned or be paid out.
Except as otherwise indicated all capitalized words used in this
Awards Agreement have the meanings described in the
Plan.
WITNESSETH the
due execution of this Awards Agreement at Allentown, Pennsylvania
effective as of the 1 st day of October 2008 intending to be legally
bound hereby.
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AIR PRODUCTS
AND CHEMICALS, INC.
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By:
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AIR PRODUCTS AND CHEMICALS, INC.
(the “Company”)
LONG-TERM INCENTIVE PLAN
FY2009 AWARD AGREEMENT
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1.
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As
described in the foregoing grant letter, you are hereby granted
FY2009 Awards consisting of Stock Options (“Options”),
Restricted Shares of Company Common Stock (“Restricted
Shares”), and Deferred Stock Units to be called
“Performance Shares” under the Air Products and
Chemicals, Inc. Long-Term Incentive Plan (the “Plan”).
The Options are “Nonstatutory Stock Options” as
described in Section 6 of the Plan. The Restricted Shares are
described in Section 8 of the Plan. The Deferred Stock Units
are described in Section 9 of the Plan. The Management
Development and Compensation Committee of the Company’s Board
of Directors has approved these Awards subject to the applicable
provisions of the Plan and the terms of this Agreement, and
contingent upon your execution of this Agreement. Except as noted
herein, all capitalized terms used in this Agreement have the
meaning ascribed to them in the Plan. A copy of the Plan is
available from the Corporate Secretary’s Office of the
Company, 7201 Hamilton Boulevard, Allentown, PA
18195-1501.
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2.
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Each Option entitles you to purchase
one share of Company Common Stock (“Share”) at a
purchase price of $66.90 (the “Grant Price”) as
described below. You can first purchase Shares as follows:
(i) up to one-third of the Shares may be purchased on or after
1 October 2009 and (ii) up to an additional one-third of such
Shares may be purchased on or after 1 October 2010 and 2011,
respectively. The Options are granted as of 1 October 2008 and
will continue for a period of ten (10) years from such grant
date and will expire and no longer be exercisable after 1
October 2018.
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3.
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You
may purchase Shares covered by an Option by providing to the
Company’s agent, Fidelity Stock Plan Services, LLC
(“Fidelity”), notice of exercise of the Option in a
form designated by Fidelity and the Grant Price of the Shares.
Payment of the Grant Price and applicable taxes may be made in cash
or by providing an irrevocable exercise notice coupled with
irrevocable instructions to Fidelity to simultaneously sell the
Shares and deliver to the Company on the settlement date the
portion of the proceeds representing the Grant Price and any taxes
to be withheld. Payment of the Grant Price may also be made by
delivery or attestation of ownership of other Shares of Common
Stock owned by you, in which case the number of Shares acquired in
the exercise will be reduced by an amount equal in value to the
amount of any taxes required to be withheld and by any Shares
attested.
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4.
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Your Options terminate as of the
close of business on the last day of your employment with the
Company and all its Subsidiaries, unless your employment ends due
to your death, Disability or Retirement on or after 30
September 2009. Upon your, death, Disability or Retirement on
or after 30 September 2009, any unexercisable portion of the
Options will be extended for the remaining term of the award (that
is, will become exercisable) as if you have continued to be an
active employee of the Company or a Subsidiary. Notwithstanding the
above, if your employment with the Company or a Subsidiary is
involuntarily terminated by the Company on or after 30
September 2009 due to action necessitated by business
conditions, including, but not limited to, job eliminations,
workforce reductions, divestitures of facilities, assets or
businesses, sale by the Company of a Subsidiary or plant closing,
your exercisable Options will not be
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terminated but
will continue to be exercisable in accordance with their terms for
six months following your last day of employment with the Company
or a Subsidiary.
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5.
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In
the event of a Change in Control, the Options become exercisable on
the later of the Change in Control or the first date more than six
months from grant. In the event of any other change in the
outstanding shares of the Common Stock of the Company or the
occurrence of certain other awards described in Section 12 of
the Plan, an equitable adjustment shall be made in the number or
kind of Shares or the Grant Price for Shares covered by your
Options.
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6.
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Options are nonassignable and
nontransferable except to your Designated Beneficiary, by will or
the laws of descent and distribution, or by gift to family members
or to trusts of which only family members are beneficiaries.
Transfers by gift can be made only after the Option has become
exercisable and subject to such administrative procedures and to
such restrictions and conditions as the officers of the Company
shall determine to be consistent with the purposes of the Plan and
the interests of the Company and/or to be necessary or appropriate
for compliance with all applicable tax and other legal
requirements. Subject to the foregoing, you may transfer Options by
gift only by delivering to the Company at its principal offices in
Allentown, Pennsylvania, written notice of the intent to transfer
the Options on forms to be provided by the Company.
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7.
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The
Restricted Shares shall be issued to you, contingent upon your
execution of this Agreement, as of 2 October 2008. Upon
issuance of the Restricted Shares, you shall have all the rights of
a shareholder with respect to the Restricted Shares, including the
right to vote such Restricted Shares and receive all dividends or
other distributions paid with respect to the Restricted Shares,
subject to the restrictions contained in Paragraph 8 below. In
the event of any change in the outstanding shares of Common Stock
of the Company or the occurrence of certain other events described
in Section 12 of the Plan, an equitable adjustment of the
number of Restricted Shares covered by this Agreement shall be made
consistent with the impact of such change or event upon the rights
of the Company’s other shareholders, and any additional
Shares of Common Stock issued to you as a result of such adjustment
shall be Restricted Shares subject to this Agreement, including,
without limitation, the restrictions contained in
Paragraph 8.
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8.
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The
“Restriction Period” with respect to the Restricted
Shares shall be the period beginning 2 October 2008 and ending
on the earliest of 1 October 2012; your death, Disability or
Retirement on or after 30 September 2009, or a Change in
Control of the Company. During the Restriction Period, the
Restricted Shares may not be sold, assigned, transferred,
encumbered, or otherwise disposed of by you; provided however, that
such Restricted Shares may be used to pay the Grant Price by
attestation upon your exercise of Stock Options, with the
stipulation that the Restricted Shares attested will remain subject
to the restrictions of this Paragraph 8 and the terms of this
Agreement. If your employment by the Company and al
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