Stock Option Plan For Directors

TABLE OF CONTENTS


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Stock Option Plan for Directors............................... 1


Purposes of the Plan........................................ 1 Eligibility................................................. 1 Awards...................................................... 1 Dilution Adjustments........................................ 2 Miscellaneous Provisions.................................... 3 Amendment and Discontinuance; No Discretion................. 5


Notice of Exercise of Stock Option............................ 6


Notice of Administrative Procedures Regarding Transfer of Stock
Option Awards............................................. 7


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AIR PRODUCTS AND CHEMICALS, INC.


Stock Option Plan for Directors (the "Plan")*
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1. Purposes of the Plan


The purposes of this Plan are (i) to assist Air Products and Chemicals, Inc. (the "Company") in attracting and retaining individuals of superior talent, experience, and achievement as directors of the Company and (ii) to associate more closely the interests of such directors with those of the Company's shareholders by encouraging and enabling directors to acquire a financial interest in the Company through ownership in equity securities of the Company. Certain capitalized terms used herein have the meanings set forth in Section 6(i) hereof.


2. Eligibility


Participation in the Plan is limited to directors of the Company who have not ever been employees of the Company or any of its subsidiaries or their respective predecessors.


3. Awards


Two thousand (2,000) stock options ("Options" or "Stock Options") shall automatically be granted to each eligible director who is serving as a director of the Company immediately following the 1999 annual organizational meeting of the Board of Directors and immediately following each annual organizational meeting of the Board of Directors thereafter. Each such director shall receive an option agreement dated as of the date of each such organizational meeting of the Board of Directors, which shall be the date of grant of each such award, evidencing the automatic annual award of such Stock Options pursuant to this Plan. Stock Options are rights to purchase shares of common stock of the Company, par value $1.00 ("Common Stock").1/
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(*) Adopted by Board resolution on 21 October 1993; effective 27 January 1994;
amended effective 21 October 1999. 1/ Amended and approved by the Board of Directors on 15 October 1998; effective - 15 October 1998.


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All Stock Options granted under the Plan shall be granted on the following terms and conditions:


(a) Price. The purchase price per share of Common Stock covered by each
Stock Option shall be 100% of the Fair Market Value of a share of
Common Stock on the date of grant of such Option.


(b) Term and Exercisability. Stock Options shall become exercisable
six (6) months from date of grant, and shall remain exercisable
until the earlier of:


(i) ten (10) years and one (1) day from the date of grant, and


(ii) the date as of which the director ceases to serve as a
member of the Board of Directors.


Notwithstanding the foregoing, the director (in the case he or
she ceases to serve on the Board of Directors of the Company by
reason of retirement or disability) or, the director's
Designated Beneficiary or, if none, his or her legal
representative (in the case of the director's death before or
after retirement or disability), shall continue to have the same
rights to exercise any unexercised portion of the director's
Stock Option which is exercisable at the time of such
termination or death, as the director would have had if he or
she had continued to be an active director of the Company.


(c) Exercise. A director wishing to exercise his or her Stock
Option, in whole or in part, shall give written notice of such
exercise to the Company, accompanied by full payment of the
purchase price. The date of receipt of such notice and payment
shall be the "Exercise Date" for such Stock Option or portion
thereof.


(d) Payment. The purchase price of shares of Common Stock purchased
upon exercise of any Stock Option shall be paid in full in cash
at the time of exercise of the Option.


4. Dilution Adjustments


Notwithstanding any other provision of the Plan, in the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, an equitable adjustment shall be made, as determined by the Board of Directors (but subject to the first paragraph of Section 6), in (i) the kind of shares subject to Options under the Plan, (ii)the number or kind of shares or purchase price per share subject to outstanding Stock Options, (iii) any other


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aspect or aspects of the Plan or outstanding awards made thereunder as specified by the Board of Directors, or (iv) any combination of the foregoing, as shall be necessary to maintain the proportionate interest of the optionees and to preserve, without increasing, the value of outstanding awards. Such adjustments shall be made by the Board of Directors and shall be conclusive and binding for all purposes of the Plan.


5. Miscellaneous Provisions


(a) The holder of a Stock Option shall have no 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 exercise or payment in respect of such award.


(b) No Stock Option or any rights or interests therein of the recipient
thereof shall be assignable or transferable by such recipient except
by gift to his or her family member(s) or to trust(s) of which such
family member(s) are beneficiaries (but only on and after the date
upon which, and to the extent such Stock Options have become
exercisable in accordance with their terms, and subject to the
administrative procedures and conditions set forth in the
"Administrative Procedures Regarding Transfers of Stock Option Awards
dated 21 October 1999" attached as Exhibit A); to his or her
Designated Beneficiary; or by will or the laws of descent and
distribution.


(c) All Stock Options granted under the Plan shall be evidenced by
agreements in such form and containing and/or incorporating such
terms and conditions as are set forth in this Plan.


(d) No shares of Common Stock shall be issued, delivered or
transferred upon exercise of any Stock Options granted 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 Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the applicable
requirements of the exchanges on which the Company's Common
Stock may, at the time, be listed.


(e) The Company shall require, as a condition of delivery of shares
of Common Stock upon the exercise of a Stock Option, that the
director or other person receiving such Common Stock pay to the
Company at the time of distribution thereof the amount of any
taxes which the Company is required to withhold with respect to
such exercise. The obligation of the Company to make delivery of
Common Stock shall be subject to currency or other restrictions
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