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10.1 Long Term Incentive Plan

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Sectors: Chemicals
Effective Date: October 01, 2001
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AIR PRODUCTS AND CHEMICALS, INC.
LONG-TERM INCENTIVE PLAN


As Amended and Restated
Effective October 1, 2001


TABLE OF CONTENTS


Page
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Purposes of the Plan..................................................... 1 Administration of the Plan............................................... 1 Eligibility for Participation............................................ 2 Shares of Stock Subject to the Plan...................................... 2 Awards................................................................... 2 Stock Options............................................................ 3
Nonstatutory Stock Options............................................ 3
Incentive Stock Options............................................... 5
Payment............................................................... 6
Termination of Employment or Death.................................... 7 Stock Appreciation Rights................................................ 7
Number of Rights...................................................... 8
Exercise.............................................................. 8
Amount of Cash and/or Number of Shares................................ 8
Termination of Employment or Death.................................... 9
Stock Appreciation Rights Granted in Relation to
Incentive Stock Options............................................ 9 Performance Units........................................................ 10
Number and Value of Units............................................. 10
Performance Objectives................................................ 10
Crediting and Payment................................................. 10
Termination of Employment or Death.................................... 11 Deferred Stock Units..................................................... 12
Number, Value, and Manner of Payment of Deferred Stock Units.......... 12
Deferral Period....................................................... 12
Termination of Employment or Death.................................... 12
Dividends............................................................. 13


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TABLE OF CONTENTS


(continued)


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Change in Control......................................................... 13
Acceleration and Exercisability of Stock Options and
Stock Appreciation Rights; Amount of Cash and/or
Number of Shares for Stock Appreciation Rights...................... 13
Cash Surrender of Stock Options........................................ 14
Accelerated Payment of Pro Rata Performance Units...................... 14
Reduction in Accordance with Plan...................................... 14
Accelerated Payment of Deferred Stock Units............................ 15 Dilution and Other Adjustments............................................ 15 Miscellaneous Provisions.................................................. 16 Amendments and Termination................................................ 20 Effective Date, Amendment and Restatement, and Term of the Plan........... 21


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1. Purposes of the Plan


The purposes of this Plan are: (i) to provide long-term incentives and rewards to those executives or other key employees who are in a position to contribute to the long-term success and growth of Air Products and Chemicals, Inc. (the "Company") and Participating Subsidiaries, (ii) to assist the Company and Participating Subsidiaries in attracting and retaining executives and other key employees with experience and ability and (iii) to associate more closely the interests of such executives and other key employees with those of the Company's shareholders.


2. Administration of the Plan


The Plan shall be administered by the Management Development and Compensation Committee (the "Committee") of the Company's Board of Directors (the "Board") or such other committee thereof consisting of such members (not less than three) of the Board as are appointed from time to time by the Board and who, during the one year period prior to serving as a member of the Committee and during such service, have not been and are not granted equity securities of the Company under the Plan or under any other Company plan or program (other than one which will not jeopardize the "disinterested" status of such person within the meaning of Rule 16b-3(c)(2)(i) under the Act or any predecessor or successor rule relating to exemption from Section 16(b) of the Act) and who further constitute "outside directors" for purposes of Section 162(m) of the Internal Revenue Code.


The Committee shall have all necessary powers to administer and interpret the Plan, such powers to include exclusive authority (within the limitations described and except as otherwise provided in the Plan) to select the employees or determine classes of employees to be granted awards under the Plan, to determine the aggregate amount, type, size, and terms of the awards to be made, to determine the time when awards will be granted and to establish and determine whether performance objectives required for earning the right to payment in respect of performance units have been attained. The Committee may take into consideration recommendations from the appropriate officers of the Company and of each Participating Subsidiary with respect to making the foregoing determinations as to Plan awards, administration, and interpretation.


The Committee shall have full power and authority to adopt such rules, regulations, agreements and instruments for the administration of the Plan and for the conduct of its business as the Committee deems necessary or advisable. The Committee's interpretations of the Plan and all action taken and determinations made by the Committee pursuant to the powers vested in it hereunder shall be conclusive and binding on all parties concerned, including the Company, its shareholders and any employee of the Company or any Subsidiary. Notwithstanding any other provision of the Plan to the contrary, the Committee may delegate to appropriate Company officers its authority to take all final action with respect to granting and administering Plan awards granted to executives and key employees who are at the time of such action not members of the Board or "officers" within the meaning of Rule 16a-1(f) of the Act, including without limitation selecting the executives and key employees to whom such awards will be granted and


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determining the amount of any such awards to be made to such executives and key employees, determining the terms and conditions of such awards and administering, interpreting, and taking all action on behalf of the Company with respect to administering, vesting, and paying such awards; provided, however, that (i) all such awards shall be granted within the limitations and subject to the terms and conditions required by the Plan and by the Committee's determinations and interpretations thereof and thereunder; (ii) the aggregate of such awards granted under the Plan for or with respect to a given Fiscal Year shall not, when added to the awards approved by the Committee for granting to individuals who are members of the Board of Directors or are "officers" within the meaning of Rule 16a-1(f) of the Act for or with respect to the same Fiscal Year, exceed the total amount of awards approved by the Committee for or with respect to such Fiscal Year; and (iii) excepting any action with respect to such awards taken because of or in connection with a Change in Control of the Company or as contemplated by Section 11. With respect to matters so delegated, the term "Committee" as used herein shall mean the delegate.


3. Eligibility for Participation


Participation in the Plan shall be limited to executives or other key employees (including officers and directors who are also employees) of the Company and its Participating Subsidiaries who are determined by the Committee to have a substantial opportunity to influence the long-term growth of the Company or Participating Subsidiaries. Employees who participate in other incentive or benefit plans of the Company or any Participating Subsidiary may also participate in this Plan. As used herein, the term "employee" shall mean any person employed full time or part time by the Company or a Participating Subsidiary on a salaried basis, and the term "employment" shall mean full-time or part-time salaried employment by the Company or a Subsidiary.


4. Shares of Stock Subject to the Plan


The shares that may be delivered upon exercise, in payment or in respect of stock options, stock appreciation rights, performance units, and deferred stock units granted under the Plan for, during, or in respect of Fiscal Year 2002 and later years, shall not exceed in the aggregate 11,000,000 shares of common stock of the Company ("Common Stock"), subject to adjustment as provided in Section 11. Any share subject to a Plan award which for any reason expires, is forfeited, or terminates unexercised may again be subject to an award subsequently granted under the Plan, but shares subject to an award which are not issued or delivered as a result of the exercise or payment of a related award shall not again be available for issuance under the Plan regardless of the form in which such award was paid.


5. Awards


Awards under the Plan may be of the following types: (i) stock options, (ii) stock appreciation rights, (iii) performance units, and/or (iv) deferred stock units. Stock options ("Stock Options" or "Options") may be either nonstatutory stock options ("Nonstatutory Stock Options") or incentive stock options ("Incentive Stock Options"), both as described below. The


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Committee shall designate each Stock Option grant as being either a Nonstatutory Stock Option or an Incentive Stock Option. If the same individual receives both Nonstatutory Stock Options and Incentive Stock Options, each type shall be clearly identified and separately granted.


Stock Options, whether Nonstatutory Stock Options or Incentive Stock Options, are rights to purchase Common Stock from the Company. Stock appreciation rights ("Stock Appreciation Rights") are rights to receive cash and/or Common Stock equivalent in value to the "spread" between (a) the aggregate fair market value of the number of shares with respect to which the Participant has elected to exercise Stock Appreciation Rights and (b) the aggregate purchase price of such shares based on the Fair Market Value of a share of Common Stock on the date the Stock Appreciation Rights were granted. Performance units ("Performance Units") are awards having a unit dollar value determined by the Committee and constitute rights to receive cash and/or Common Stock equivalent in value to the value of the Performance Units, provided specified performance objectives are met. Deferred stock units ("Deferred Stock Units") are rights to receive at the end of a deferral period cash and/or Common Stock equivalent in value to one share of Common Stock for each unit.


Nonstatutory Stock Options, Stock Appreciation Rights, Performance Units, and Deferred Stock Units may be granted to the same person as separate awards at or for the same period of time under terms whereby the issuance of shares or payment under one award has no effect on any other award. Stock Appreciation Rights and Performance Units may be granted to a Participant in relation to (i.e., in "tandem" with) a previously or concurrently granted Nonstatutory Stock Option under terms whereby the issuance of shares or payment under one award reduces directly the number of shares, units, and/or rights remaining available under the related award(s). Performance Units cannot be granted in conjunction with, or in any way related to, Incentive Stock Options.


6. Stock Options


(a) Nonstatutory Stock Options. A Stock Option designated by the Committee as a Nonstatutory Stock Option is one which is not eligible for preferential tax treatment under Section 421(a) of the Internal Revenue Code. The Committee may grant Nonstatutory Stock Options either alone or in conjunction with and related to Stock Appreciation Rights and/or Performance Units. All Nonstatutory Stock Options granted under the Plan shall be on the following terms and conditions (and such other terms and conditions that the Committee may establish which are consistent with the Plan and applicable law):


(i) Price. The purchase price per share of Common Stock covered
by each Nonstatutory Stock Option shall not be less than 100% of the
Fair Market Value of a share of Common Stock on the date of grant of
such Option.


(ii) Number of Shares. The Committee will determine, absolutely
or by formula related to the Fair Market Value of a share of Common
Stock, the number of shares of Common Stock to be subject to each
Nonstatutory Stock Option. The number of shares


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subject to an outstanding Nonstatutory Stock Option will be reduced on
a one-for-one basis to the extent that (A) shares under such
Nonstatutory Stock Option are used to calculate the cash and/or shares
received upon exercise of related Stock Appreciation Rights and
(B) any related Performance Units are paid. In no event shall the
number of shares subject to Nonstatutory Stock Options granted to any
Participant in any Fiscal Year exceed 1,000,000 (such number to be
reduced by the number of shares which are subject to Stock Appreciation
Rights awarded to such Participant in the same Fiscal Year which are
separate from and not granted in relation to or in tandem with such
Nonstatutory Stock Options).


(iii) Term and Exercise Dates. The Committee shall fix the term
during which each Nonstatutory Stock Option may be exercised, but no
Nonstatutory Stock Option shall be exercisable after the first day
following the tenth anniversary of its date of grant. No Nonstatutory
Stock Option shall be exercisable prior to one year from its date of
grant, except as otherwise provided in Section 10. Unless otherwise
determined by the Committee and except as otherwise provided in
Section 10, each Nonstatutory Stock Option shall become exercisable in
installments as follows:


1. One-third of the shares subject to such Nonstatutory
Stock Option may be purchased commencing one year after the
date of grant; and


2. An additional one-third of such shares subject to such
Nonstatutory Stock Option may be purchased commencing on each of
the second and third yearly anniversaries of the date of grant.


In the event a Participant ceases to be an employee of the
Company or a Subsidiary by reason of Retirement, Disability or death
after the first anniversary of the date of grant to such person of a
Nonstatutory Stock Option but before the Option has become exercisable
in full, a pro rata portion of the shares that would have become
exercisable on the next anniversary of the date of grant had the
Participant remained employed shall become exercisable commencing on
such next anniversary, based upon the proportion which the number of
full calendar months in such Fiscal Year prior to such termination of
employment bears to the 12 calendar months in the Fiscal Year.
Notwithstanding the foregoing or any other provision of the Plan, the
Committee may determine, in its discretion, that any unexercisable
Nonstatutory Stock Option or portion thereof shall not terminate or
have terminated on the date of the Participant's Retirement, Disability
or death, but shall continue or have continued on such terms and
subject to such conditions as the Committee shall specify.


Notwithstanding any other provision of the Plan, the Committee
may determine that the date on which any outstanding Nonstatutory Stock
Option or any portion thereof is exercisable shall be or shall have
been advanced to an earlier date or dates designated by the Committee
in accordance with such terms and subject to such conditions, if any,
as the Committee shall specify; provided, however, that any such
earlier date shall not be


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prior to one year from the date of grant of such Nonstatutory Stock
Option, except as otherwise provided in Section 10.


(iv) Exercise. A Participant wishing to exercise his or her
Nonstatutory 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 (including by
facsimile transmission) and payment shall be the "Exercise Date" for
such Nonstatutory Stock Option or portion thereof; provided, however,
that if the Participant engages in a simultaneous Option exercise and
sale of shares of Common Stock, the Exercise Date shall be the date of
sale of the shares purchased by exercising such Option. No partial
exercise of a Nonstatutory Stock Option may be for less than 100 shares
of Common Stock.


(b) Incentive Stock Options. A Stock Option designated by the Committee as an Incentive Stock Option is one which is intended to comply with the requirements in Subsection (b) of Section 422 of the Internal Revenue Code so as to be eligible for preferential income tax treatment and shall satisfy the following terms and conditions (and such other terms and conditions that the Committee may establish which are consistent with the Plan and applicable law):


(i) Price. The purchase price per share of Common Stock
covered by each Incentive Stock Option shall not be less than 100% of
the Fair Market Value of a share of Common Stock on the date of grant
of such Option. If an Incentive Stock Option is granted to an employee
who, on the date of grant, owns stock possessing more than 10% of the
total combined voting power of all outstanding classes of stock of the
Company or any affiliate, the purchase price per share under such
Incentive Stock Option shall be at least 110% of the Fair Market Value
of a share of Common Stock on the date of grant of such Option and such
Incentive Stock Option shall not be exercisable after the expiration of
five years from its date of grant.


(ii) Number of Shares. The Committee will determine,
absolutely or by formula related to the Fair Market Value of a share of
Common Stock, the number of shares of Common Stock to be subject to
each Incentive Stock Option. The number of shares subject to an
outstanding Incentive Stock Option will be reduced on a one-for-one
basis to the extent that shares under such Incentive Stock Option are
used to calculate the cash and/or shares received upon exercise of a
related Stock Appreciation Right.


(iii) Term and Exercise Dates. No Incentive Stock Option shall
be granted under this Plan more than 10 years after the date this Plan
is adopted or approved by the shareholders of the Company, whichever is
earlier. The Committee shall fix the term during which each Incentive
Stock Option may be exercised, but no Incentive Stock Option shall be
exercisable after ten years from its date of grant. No Incentive Stock
Option shall be exercisable prior to one year from its date of grant,
except as otherwise provided in Section 10. Unless otherwise determined
by the Committee and except as


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otherwise provided in Section 10, each Incentive Stock Option shall be
exercisable in full one year after its date of grant.


In the event a Participant ceases to be an employee of the
Company or a Subsidiary by reason of Retirement, Disability or death
after the first anniversary of the date of grant to such person of an
Incentive Stock Option but before the Option has become exercisable in
full, a pro rata portion of the shares shall become exercisable
commencing on the next anniversary of the date of grant of such award,
based upon the proportion which the number of full calendar months in
such Fiscal Year prior to such termination of employment bears to the
12 calendar months in the Fiscal Year. Notwithstanding the foregoing or
any other provision of the Plan, the Committee may determine, in its
discretion, that any unexercisable Incentive Stock Option or portion
thereof shall not terminate or have terminated on the date of the
Participant's Retirement, Disability or death, but shall continue or
have continued on such terms and subject to such conditions as the
Committee shall specify.


Notwithstanding any other provision of the Plan, the Committee
may determine that the date on which any outstanding Incentive Stock
Option or any portion thereof is exercisable shall be or shall have
been advanced to an earlier date or dates designated by the Committee
in accordance with such terms and subject to such conditions, if any,
as the Committee shall specify, provided, however, that any such
earlier date shall not be prior to one year from the date of grant of
such Incentive Stock Option, except as otherwise provided in
Section 10.


(iv) Exercise. A Participant wishing to exercise his or her
Incentive 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 (including by
facsimile transmission) and payment shall be deemed to be the "Exercise
Date" for such Incentive Stock Option or portion thereof; provided,
however, that if the Participant engages in a broker-financed Option
exercise, the Exercise date shall be the date of sale of the shares
purchased by exercising such Option. No partial exercise of an
Incentive Stock Option may be for less than 100 shares of Common Stock.


(v) Annual Limit. The aggregate Fair Market Value, determined
on the date of grant, of stock with respect to which Incentive Stock
Options are exercisable for the first time by such Participant during
any calendar year (under this Plan and all such other plans of the
Company and any predecessor, parent, subsidiary or affiliate) shall
not exceed $100,000.


(c) Payment. The purchase price of shares purchased upon exercise of any Option shall be paid in full in cash at the time of exercise of the Option, except that the Committee, in its sole discretion, and on such terms and
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