Stock Option Program For Directors of The Company

Exhibit 10.5

This document constitutes part of a prospectus covering securities
that have been registered under the Securities Act of 1933.

STOCK OPTION PROGRAM FOR DIRECTORS
(THE " PROGRAM" )

TABLE OF CONTENTS Page Stock Option Program for Directors 1 Purposes of the Program 1 Eligibility and Administration 1 Awards 1 Dilution Adjustments 3 Miscellaneous Provisions 3 Amendment and Discontinuance; No Discretion 5 Notice of Exercise of Stock Option 6 Administrative Procedures Regarding Transfer of Stock Option Awards (the " Procedures" ) 7 Discussion of Tax and Social Security Consequences of the Stock Option Program for Directors 12


STOCK OPTION PROGRAM FOR DIRECTORS
( THE " PROGRAM" )*

1. PURPOSES OF THE PROGRAM

The purposes of this Program 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. The Program is provided under the Air Products and Chemicals, Inc. Long Term Incentive Plan (the " Plan" ) and is subject to the terms thereof. Certain capitalized terms used herein have the meanings set forth in Section 6(i) hereof.

2. ELIGIBILITY AND ADMINISTRATION

Participation in the Program 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. The Program is administered by the Corporate Governance and Nominating Committee of the Board of Directors (the " Committee" ).

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 each annual organizational meeting of the Board of Directors. 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 Program. Stock Options are rights to purchase shares of common stock of the Company, par value $1.00 (" Common Stock" ).(1)/

(*) The Air Products and Chemicals, Inc. Stock Option Plan for Directors was adopted by Board resolution on 21 October 1993; effective 27 January 1994; amended effective 15 October 1998 and 21 October 1999. Effective 23 January 2003 this Plan was combined with the Long Term Incentive Plan and offered as a program thereunder. (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 Program 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. Subject to any administrative rules from time to time adopted by the Committee, payment of the purchase price may also be made by delivery of an irrevocable exercise notice coupled with irrevocable instructions to a designated broker to simultaneously sell the underlying shares of Common Stock and deliver to the Company on the settlement date the portion of the proceeds representing the purchase price.

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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 Stock Options, (ii) the number or kind of shares or purchase price per share subject to outstanding Stock Options, (iii) any other aspect or aspects of the Program 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 Program and 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 Program shall be evidenced by agreements in such form and containing and/or incorporating such terms and conditions as are set forth in this Program. (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

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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 imposed by any government.

(f) Distributions of shares of Common Stock upon exe ...