UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-4534

AIR PRODUCTS AND CHEMICALS, INC.

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. [X]

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). YES [X]   NO [  ]

     The aggregate market value of the voting stock held by non-affiliates of the registrant on 31 March 2004 was $11.3 billion. For purposes of the foregoing calculations (i) all directors and/or executive officers have been deemed to be affiliates, but the registrant disclaims that any such director and/or executive officer is an affiliate and (ii) registrant’s grantor trust, described under Item 12 of this Report, is deemed a non-affiliate.

     The number of shares of Common Stock outstanding as of 1 December 2004 was 227,309,877.

DOCUMENTS INCORPORATED BY REFERENCE

     Annual Report to Shareholders for the fiscal year ended 30 September 2004. With the exception of those portions that are incorporated by reference into Parts I, II, and IV of this Form 10-K, the Annual Report is not deemed to be filed.

     Proxy Statement for Annual Meeting of Shareholders to be held 27 January 2005 . . . Part III.

FORWARD-LOOKING STATEMENTS

The forward-looking statements contained in this document are based on current expectations at the time the document was originally prepared regarding important risk factors. Management does not anticipate publicly updating any of its expectations except as part of the quarterly earnings announcement process.

Actual results may differ materially from those forward-looking statements expressed. In addition to important risk factors and uncertainties referred to in the Management’s Discussion and Analysis, which is included under Item 7 herein, factors that might cause forward-looking statements to differ materially from actual results include those specifically referenced as future events or outcomes that the Company anticipates, as well as, among other things, overall economic and business conditions different than those currently anticipated and demand for the Company’s goods and services during that time; competitive factors in the industries in which it competes; interruption in ordinary sources of supply; the ability to recover increased energy and raw material costs from customers; uninsured litigation judgments or settlements; spikes in the pricing of natural gas; changes in government regulations; consequences of acts of war or terrorism impacting the United States and other markets; charges related to currently unplanned portfolio management and cost reduction actions; the success of implementing cost reduction programs; the timing, impact, and other uncertainties of future acquisitions or divestitures; significant fluctuations in interest rates and foreign currencies from that currently anticipated; the impact of tax and other legislation and regulations in jurisdictions in which the Company and its affiliates operate; and the timing and rate at which tax credits can be utilized.

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TABLE OF CONTENTS

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PART I

ITEM 1. Business.

     Through internal development and by acquisitions, Air Products and Chemicals, Inc. has established an internationally recognized industrial gas and related industrial process equipment business and developed strong positions as a producer of certain chemicals.

     The gases business segment recovers and distributes industrial gases such as oxygen, nitrogen, helium, argon, and hydrogen, and a variety of medical and specialty gases, and also includes the Company’s healthcare business. The chemicals business segment produces and markets performance materials and chemical intermediates. The equipment business segment supplies cryogenic and other process equipment and related engineering services.

     Financial information concerning the Company’s business segments appears in Note 21 to the Consolidated Financial Statements included under Item 8 herein, which information is incorporated herein by reference, as are all other specific references herein to information appearing in such 2004 Financial Review Section of the Annual Report.

     As used in this Report, the term “Air Products” or “Company” includes subsidiaries and predecessors of the registrant or its subsidiaries, unless the context indicates otherwise.

GASES

     The principal industrial gases sold by the Company are oxygen, nitrogen, argon (primarily recovered by the cryogenic distillation of air), hydrogen, carbon monoxide, carbon dioxide (purchased, purified, or recovered through the processing of natural gas or the by-product streams from process plants), synthesis gas (combined streams of hydrogen and carbon monoxide), and helium (purchased or refined from crude helium). Medical and specialty gases (which include fluorine products; rare gases such as xenon, krypton, and neon; and more common gases of high purity) are manufactured or precisely blended by the Company or purchased for resale. The gases segment also includes the Company’s electronics business, global healthcare, power generation, and flue gas treatment businesses.

     The Company’s gas business involves three principal modes of supply:

     “On-site/pipeline” supply—For large volume or “tonnage” users of industrial gases, a plant is built adjacent to, on, or near the customer’s facility—hence the term “on-site.” Alternatively, the gases are delivered through a pipeline from nearby locations. Supply is generally made under long-term contracts, typically five to twenty years in duration. In numerous areas—the Houston (Texas) Ship Channel including the Port Arthur, Texas, area; “Silicon Valley,” California; Los Angeles, California; Phoenix, Arizona; Decatur, Alabama; Central Louisiana; Rotterdam, the Netherlands; Korea; Singapore; Taiwan; Malaysia; and Brazil—Air Products’ hydrogen, oxygen, carbon monoxide, or nitrogen gas pipelines serve multiple customers from one or more centrally located plants. Industrial gas companies in which the Company has less than controlling interests have pipelines in Thailand, Singapore, and South Africa.

     Liquid bulk supply—Smaller volumes of industrial gas products are delivered to thousands of customers in liquid or gaseous form by tanker trucks or tube trailers. These liquid bulk customers use equipment designed and installed by Air Products to store the product near the point of use, normally in liquid state, and vaporize the product into gaseous state for their use as needed. Some customers are also supplied by small on-site generators using noncryogenic technology based on adsorption and membrane technology which, in certain circumstances, the Company sells to its customers. Liquid bulk customers’ contract terms normally are from three to five years.

     Packaged gases supply—Industrial and various specialty and medical gases also can be delivered in cylinders, dewars, and lecture bottle sizes. The Company operates packaged gas businesses in Europe, Asia, and Brazil, but in the United States, only sells packaged gases for electronics gases, helium used in magnetic resonance imaging, and oxygen used by patients in their home.

     Oxygen, nitrogen, argon, and hydrogen sold to liquid bulk customers are usually recovered or generated at large “stand-alone” facilities located near industrial areas or high-tech centers, or at small noncryogenic generators, or are taken from on-site plants used primarily to supply tonnage users. On-site plants are frequently designed to have more capacity than is required by their principal customer to recover additional product that is liquefied for sale to a liquid bulk market. Air Products also designs and builds systems for recovering oxygen, hydrogen, nitrogen, carbon monoxide, and low dew point gases using adsorption technology.

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     Sales of atmospheric gases—oxygen, nitrogen, and argon—constituted approximately 24 percent of Air Products’ consolidated sales in fiscal year 2004, 25 percent in fiscal year 2003, and 26 percent in fiscal year 2002. Sales of industrial gases—principally oxygen, nitrogen, and hydrogen—to the chemical process industry and the electronics industry, the largest consuming industries, were approximately 19 percent and 14 percent, respectively, of Air Products’ consolidated sales in fiscal year 2004.

     Other important consumers of Air Products’ industrial and specialty gases are the basic steel industry, the oil industry (which uses inert nitrogen for oil well stimulation and field pressurization and hydrogen and oxygen for refining), the food industry (which uses liquid nitrogen for food freezing), and the institutional healthcare industry. Air Products believes that it is the largest liquefier of hydrogen, which it supplies to many customers, including the National Aeronautics and Space Administration for its space shuttle program.

     The global healthcare business of Air Products is directed at two main markets: institutional and homecare. The institutional market uses medical gases in hospitals, clinics, and nursing homes, as well as helium for use in magnetic resonance imaging. The homecare business involves the delivery of respiratory therapy services, infusion services, and home medical equipment to patients in their homes in Europe, South America, and principally in the eastern United States.

     The electronics business of Air Products is a materials and services solutions provider to the electronics industry supplying consumable products that surround its customers’ process tools. These products include industrial gases, electronic specialty gases (such as silane, arsine, silicon tetrafluoride, nitrogen trifluoride, carbon tetrafluoride, hexafluoromethane, and tungsten hexafluoride), electronic specialty chemicals, high purity wet process chemicals, and photolithography products. In certain circumstances the Company sells equipment related to the use, handling, and storage of such electronic gases and chemicals.

     Sales of industrial gases and sales of specialty products to the electronics industry and others are made principally through regional offices in the United States, Europe, South America, Africa, and Asia.

     Electricity and hydrocarbons, including natural gas as a feedstock for producing certain gases, are important to Air Products’ gas business. See “Raw Materials and Energy.” The Company’s large truck fleet, which delivers products to liquid bulk customers, requires a readily available supply of gasoline or diesel fuel. Also, environmental and health laws and regulations will continue to affect the Company’s gas businesses. See “Environmental Controls.”

     Air Products operates and has 50 percent interests in a 49-megawatt fluidized-bed coal-fired power generation facility in Stockton, California and in a 24-megawatt gas-fired combined cycle power generation facility near Rotterdam, the Netherlands. A 112-megawatt gas-fueled power generation facility, in which the Company has a 48.8 percent interest, operates in Thailand and supplies electricity to a state-owned electricity generating authority and steam and electricity to an Air Products industrial gases affiliate. The Company also constructed, operates, and has a 50 percent interest in a flue gas treatment facility in Indiana. Additional information with respect to the Company’s power generation and flue gas treatment businesses is included in Notes 8 and 19 to the Consolidated Financial Statements included under Item 8 herein.

CHEMICALS

     The Company’s chemicals businesses consist of performance materials and chemical intermediates, where the Company is able to differentiate itself by the performance of its products in the customer’s application, the technical service that the Company provides, and the scale of production and the production technology employed by the Company.

     Chemical sales are supported from various locations in North America, Europe, Asia, and Africa, and through sales representatives or distributors in most industrialized countries. Dry products are delivered in railcars, trucks, drums, bags, and cartons. Liquid products are delivered by barge, rail tank cars, tank trailers, drums and pails, and, at one location, by pipeline.

     The chemicals business depends on adequate energy sources, including natural gas as a feedstock for the production of certain products (see “Raw Materials and Energy”), and will continue to be affected by various environmental and health laws and regulations (see “Environmental Controls”).

Performance Materials

     The principal businesses of performance materials are Performance Polymers, Performance Solutions, and Performance Products. Total sales from the performance materials business constituted approximately 15 percent of Air Products’ consolidated sales in fiscal year 2004, 15 percent in fiscal year 2003, and 17 percent in fiscal year 2002. Air

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Products’ performance materials are differentiated from the competition based on their functionality when used in the customer’s products and applications, and by the technical service the Company provides.

     Performance Polymers— Air Products owns 65 percent of a worldwide joint venture with Wacker-Chemie GmbH that produces polymer emulsions and pressure-sensitive adhesives. The Company also owns 20 percent of a worldwide joint venture with Wacker-Chemie GmbH that produces redispersible powders made from polymer emulsions.

     Air Products’ polymers are water-based and water-soluble emulsion products derived primarily from vinyl acetate monomer. The Company’s major emulsions products are AIRFLEX^® vinyl acetate-ethylene copolymer emulsions and vinyl acetate homopolymer emulsions. The Company also produces emulsions that incorporate vinyl chloride and various acrylates in the polymer. These products are used in adhesives, nonwoven fabric binders, paper coatings, paints, inks, and carpet backing binder formulations.

     Performance Solutions—These products are primarily acetylenic alcohols and amines that are used as performance additives in coatings, lubricants, electro-deposition processes, agricultural formulations, and corrosion inhibitors.

     Performance Products—These products include polyurethane catalysts and surfactants that are used as performance control additives and processing aids in the production of both flexible and rigid polyurethane foam around the world. The principal end markets for polyurethane foams include furniture cushioning, insulation, carpet underlay, bedding, and automobile seating.

     Performance Products also includes epoxy additives such as polyamides, aromatic amines, cycloaliphatic amines, reactive diluents, and specialty epoxy resins that are used as performance additives in epoxy formulations by epoxy manufacturers worldwide. The end markets for epoxies are coatings, flooring, adhesives, reinforced composites, and electrical laminates.

Chemical Intermediates

     The chemical intermediates businesses use the Company’s proprietary technology and scale of production to differentiate themselves from the competition. The principal intermediates sold by the Company include amines and polyurethane intermediates. The Company also produces nitric acid as a raw material for its products. Total third-party sales from the chemical intermediates businesses constituted 10 percent of Air Products’ consolidated sales in each of fiscal years 2004, 2003, and 2002.

     Amines—The Company produces a broad range of amines using ammonia, methanol, and other alcohol feedstocks purchased from various suppliers. Substantial quantities of these products are sold under long-term contracts to a small number of customers. These products are used by the Company’s customers as raw materials in the manufacture of herbicides, pesticides, water treatment chemicals, animal nutrients, polyurethane coatings, rubber chemicals, and pharmaceuticals. Additional ammonia is purchased and converted to ammonium nitrate prills and solutions that are primarily sold to customers as fertilizers or for other chemical applications. In 2004 the Company shut down its methanol and ammonia production facilities and began purchasing all of its methanol and ammonia requirements. The Company has announced its plan to sell the European methylamines and derivatives business.

     Polyurethane Intermediates—The Company produces dinitrotoluene (“DNT”) and toluene diamine (“TDA”) for use as intermediates by the Company’s customers in the manufacture of a major precursor of flexible polyurethane foam. The principal end markets for flexible polyurethane foams include furniture cushioning, carpet underlay, bedding, and seating in automobiles. Most of the Company’s production of DNT and TDA is sold under long-term contracts to a small number of customers.

EQUIPMENT

     The Company designs and manufactures equipment for cryogenic air separation, gas processing, natural gas liquefaction, and hydrogen purification. Air Products also designs and builds systems for recovering hydrogen, nitrogen, carbon monoxide, carbon dioxide, and low dew point gases using membrane technology. This segment further designs and builds cryogenic transportation containers for liquid helium and hydrogen. Customers include companies involved in chemical and petrochemical manufacturing, oil and gas recovery and processing, power generation, and steel and primary metal production. Additionally, a broad range of plant design, engineering, procurement, and construction management services is provided for the above areas. Equipment is manufactured for use by the gases segment and for sale in industrial markets that include the Company’s international industrial gas joint ventures.

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     The backlog of orders (including letters of intent) believed to be firm from other companies and equity affiliates for equipment was approximately $297 million on 30 September 2004, approximately 30 percent of which relates to cryogenic air separation, and 46 percent of which relates to liquefied natural gas, as compared with a total backlog of approximately $259 million on 30 September 2003. It is expected that approximately $220 million of the backlog on 30 September 2004 will be completed during fiscal year 2005.

GENERAL

Foreign Operations

     Air Products, through subsidiaries and affiliates, conducts business in numerous countries outside the United States. The structure of the Air Products gas business in Europe is comparable to the Company’s United States operation, except that in Europe the Company is also engaged in a broader packaged gas business. Air Products’ international business is subject to risks customarily encountered in foreign operations, including fluctuations in foreign currency exchange rates and controls, import and export controls, and other economic, political, and regulatory policies of local governments.

     The Company’s industrial gas segment, through investments ranging from wholly owned subsidiaries to minority ownership interests, does business in approximately 35 countries outside the United States. Majority and wholly owned industrial gas subsidiaries operate in Argentina, Brazil, Canada, and Mexico, and throughout Europe and Asia in 16 and ten countries, respectively. There are 50 percent industrial gas joint ventures in Canada and Trinidad and Tobago, seven countries in Europe, four in Asia, and two in Africa, and less than controlling interests in Africa, Canada, and Mexico, four countries in Europe, and five in Asia. The Company has a 50 percent joint venture in the U.K. that is developing products relating to silicon wafer polishing, chemical mechanical planarization processes, and hard disk polishing. The Company also has a 50 percent interest in a power generation facility in the Netherlands and a 48.8 percent interest in one in Thailand.

     The principal geographic markets for the Company’s chemical products are in 12 countries, with operations in North America, Europe, Asia, Brazil, and Mexico. Majority and wholly owned subsidiaries operate in Germany, Italy, the Netherlands, the United Kingdom, Australia, Japan, Korea, China, Taiwan, and Mexico. The polymer emulsions and pressure-sensitive adhesives joint venture with Wacker-Chemie GmbH has headquarters in the United States and production facilities in the United States, Germany, Mexico, and Korea, along with a technical service center in Shanghai, China. Headquarters for the 20 percent investment in the redispersible powder venture with Wacker-Chemie GmbH are in Germany with manufacturing facilities in Germany and the United States. The Company also has controlling interests in Korea and Taiwan and less than controlling interests in Japan and Ireland that sell chemicals to the electronics industry.

     Financial information about Air Products’ foreign operations and investments is included in Notes 8, 17, and 21 to the Consolidated Financial Statements included under Item 8 herein. Information about foreign currency translation is included in Note 1 to the Consolidated Financial Statements included under Item 8 herein, under “Foreign Currency,” and information on Company exposure to currency fluctuations is included in Note 6 to the Consolidated Financial Statements included under Item 8 herein. Export sales from operations in the United States to unconsolidated customers amounted to $496 million, $497 million, and $533 million in fiscal years 2004, 2003, and 2002, respectively. Total export sales in fiscal year 2004 included $301 million in export sales to affiliated customers. The sales to affiliated customers were primarily equipment sales and electronic specialty materials sales.

Technology Development

     Air Products conducts research and development principally in its laboratories located in Trexlertown, Pennsylvania, as well as in Carlsbad, California; Dublin, Ohio; and Easton, Pennsylvania in the U.S.; Basingstoke, London, and Crewe in the U.K.; Burghausen, Germany; Utrecht, the Netherlands; San Juan del Rio, Mexico; and Barcelona, Spain. The Company also funds and works closely on research and development programs with a number of major universities and conducts research work funded by others, principally the United States Government.

     The Company’s market-oriented approach to technology development encompasses research and development and engineering, as well as commercial development.

     The amount expended by the Company on research and development during fiscal year 2004 was $127 million, $121 million in fiscal year 2003, and $120 million in fiscal year 2002. The amount expended by the Company on customer-

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sponsored research activities during fiscal year 2004 was $14 million, $15 million in fiscal year 2003, and $18 million in fiscal year 2002.

     In the gases and equipment segments, technology development is directed primarily to developing new and improved processes and equipment for the production and delivery of industrial gases, electronic specialty gases, electronic specialty chemicals, and hydrocarbons; developing new products; and developing new and improved applications for such products. It is through such applications and improvements that the Company has become a major supplier to the electronics and chemical process industries, including gases from air separation, specialty gases, and hydrogen. Additionally, technology development for the equipment business is directed primarily to reducing the capital and operating costs of its facilities and to commercializing new technologies in gas production, liquefaction, and separation.

     In the chemicals segment, technology development is primarily concerned with new products and applications to strengthen and extend the Company’s present positions in polymer and performance materials. In addition, a major continuing effort supports the development of new and improved process and manufacturing technology for chemical intermediates and polymers.

     A corporate research group supports the research efforts of the Company’s various businesses. This group includes the Company’s Corporate Science and Technology Center, which conducts research in areas important to the long-term growth of the Company with focus on performance materials.

     As of 1 November 2004, Air Products owned 1,061 United States patents and 2,102 foreign patents. The Company is also licensed under certain patents owned by others. While the patents and licenses are considered important, Air Products does not consider its business as a whole to be materially dependent upon any particular patent or patent license, or group of patents or licenses.

Raw Materials and Energy

     The Company manufactures hydrogen, carbon monoxide, synthesis gas, and carbon dioxide principally from natural gas. Such products accounted for approximately 13 percent of the Company’s consolidated sales in fiscal year 2004. The Company’s principal raw material purchases are chemical intermediates produced by others from basic petrochemical feedstocks such as olefins and aromatic hydrocarbons. These feedstocks are generally derived from various crude oil fractions or from liquids extracted from natural gas. The Company purchases its chemical intermediates from many sources and generally is not dependent on one supplier. However, with respect to vinyl acetate monomer that supports the performance polymer business, the Company is heavily dependent on a single supplier under a long-term contract that produces vinyl acetate monomer from several facilities. The Company characterizes the availability of these chemical intermediates as generally being readily available. The Company uses such raw materials in the production of emulsions, amines, polyurethane intermediates, specialty additives, polyurethane additives, and epoxy additives. Such products accounted for approximately 26 percent of the Company’s consolidated sales in fiscal year 2004. Natural gas is an energy source at a number of the Company’s facilities. The Company also purchases ammonia under long-term contracts as a feedstock for several of its chemicals facilities. During 2005, the Company will begin purchasing methanol under a long-term supply arrangement. Methanol, produced from natural gas, is a feedstock in methylamine production.

     A long-term supplier of sulfuric acid, used in the production of dinitrotoluene (DNT), emerged from Chapter 11 bankruptcy protection in 2003. To facilitate the supplier’s ability to emerge from bankruptcy and to continue supplying product to the Company, the Company agreed to participate in the supplier’s financing and has continued to provide additional financing. Total loans to the supplier at 30 September 2004 totaled $55.3 million. If the supplier does not continue to operate, the sales and profitability of the chemicals segment could be materially impacted on an annual basis because of the Company’s inability to supply all of its customers’ base requirements. The Company does not expect a material loss related to this supplier.

     The Company’s industrial gas facilities use substantial amounts of electrical power. Electricity is the largest cost input for the production of atmospheric gases. Any shortage of electrical power or interruption of its supply or increase in its price that cannot be passed through to customers for competitive reasons will adversely affect the liquid bulk gas business of the Company.

     In addition, the Company purchases finished and semi-finished materials and chemical intermediates from many suppliers. During fiscal year 2004, no significant difficulties were encountered in obtaining adequate supplies of energy or raw materials.

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Environmental Controls

     The Company is subject to various environmental laws and regulations in the United States and foreign countries where it has operations. Compliance with these laws and regulations results in higher capital expenditures and costs. Additionally, from time to time, the Company is involved in proceedings under the Comprehensive Environmental Response, Compensation, and Liability Act (the federal Superfund law), similar state laws, and the Resource Conservation and Recovery Act (RCRA) relating to the designation of certain sites for investigation and possible cleanup. Additional information with respect to these proceedings is included under Item 3, Legal Proceedings, below. The Company’s accounting policies on environmental expenditures are discussed in Note 1 to the Consolidated Financial Statements included under Item 8 herein.

     The amounts charged to earnings on an after-tax basis related to environmental matters totaled $32 million in 2004, $30 million in 2003, and $24 million in 2002. These amounts represent an estimate of expenses for compliance with environmental laws, as well as remedial activities, and costs incurred to meet internal Company standards. Such costs are estimated to be $32 million in 2005 and $33 million in 2006.

     Although precise amounts are difficult to define, the Company estimates that in fiscal year 2004 it spent approximately $18 million on capital projects to control pollution versus $16 million in 2003. Capital expenditures to control pollution in future years are estimated at approximately $15 million in 2005 and $17 million in 2006.

     To the extent long-term contracts have been entered into for supply of product, such as for the industrial gas on-site business and for certain chemical products, the cost of any environmental compliance generally is contractually passed through to the customer.

     It is the Company’s policy to accrue environmental investigatory and noncapital remediation costs for identified sites when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The potential exposure for such costs is estimated to range from $9 million to a reasonably possible upper exposure of $19 million. The accrual on the balance sheet for 30 September 2004 was $14 million and for 30 September 2003 was $15 million. Actual costs to be incurred in future periods may vary from the estimates, given inherent uncertainties in evaluating environmental exposures. Subject to the imprecision in estimating future environmental costs, the Company does not expect that any sum it may have to pay in connection with environmental matters in excess of the amounts recorded or disclosed above would have a materially adverse effect on its financial condition or results of operations in any one year.

Competition

     The Company’s businesses face strong competition from others, some of which are larger and have greater resources than Air Products.

     Air Products’ industrial gas business competes in the United States with three major sellers and with several regional sellers. Competition in industrial gas markets is based primarily on price, reliability of supply, and furnishing or developing applications for use of such gases by customers, and in some cases the provisions of other services or products such as power and steam generation. Similar competitive situations exist in European and Asian industrial gas markets in which the Company competes against one or more larger entrenched competitors in most countries.

     The division of the Company’s gas business that serves the electronics industry offers electronic specialty gases, chemicals, services, and equipment. These products face competition from competitors who vary from product to product, ranging from niche suppliers having only a single product, to larger and more vertically integrated chemical companies with greater financial resources than the Company. Competition in these products is principally on the basis of price, quality, product performance, and reliability of product supply.

     Competition in the institutional market of the global healthcare business is principally from other large, established industrial gas companies using business models (long-term product supply agreements) that are similar to those the companies utilize for other industrial gas supply relationships. Competition in this market is principally based on price, quality, service, and reliability of supply. Homecare is served by national and local providers, and in the U.S. there are over 2,000 regional and local providers. The homecare market is highly competitive. In the United States reimbursement levels are established by fee schedules regulated by Medicare and Medicaid, or by the levels negotiated with insurance companies. Accordingly, in the United States, homecare companies compete primarily on the basis of service. Maintaining competitiveness requires efficient logistics, reimbursement, and accounts receivable systems. The Company intends to attempt to acquire additional homecare companies, provided that such companies can be acquired on terms deemed reasonable by management.

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     The number of the Company’s principal competitors in the chemicals business varies from product to product, and it is not practical to identify such competitors because of the broad range of the Company’s chemical products and the markets served, although the Company believes it has a leading or strong market position in most of its chemical products. For amines the competition is principally from other large chemical companies that also have the ability to provide competitive pricing, reliability of supply, technical service assistance, and quality products and services. The possibility of back integration by large customers is the major competitive factor for the sale of polyurethane additives. In its other chemical products, the Company competes with a large number of chemical companies, some of which are larger, possess greater financial resources, and are more vertically integrated than the Company. Competition in these products is principally on the basis of price, quality, product performance, reliability of product supply, and technical service assistance.

     The Company’s equipment business competes in all aspects with a great number of firms, some of which have greater financial resources than Air Products. Competition is based primarily on technological performance, service, technical know-how, price, and performance guarantees.

Insurance

     The Company’s policy is to obtain public liability and property insurance coverage that is currently available at what management determines to be a fair and reasonable price. The Company maintains public liability and property insurance coverage at amounts that management believes are sufficient to meet the Company’s anticipated needs in light of historical experience to cover future litigation and claims. There is no assurance, however, that the Company will not incur losses beyond the limits of, or outside the coverage of, its insurance.

Employees

     On 30 September 2004, the Company (including majority-owned subsidiaries) had approximately 19,900 employees of whom 19,300 were full-time employees, and of whom approximately 9,200 were located outside the United States. The Company has collective bargaining agreements with unions at various locations that expire on various dates over the next three to four years. The Company considers relations with its employees to be satisfactory and does not believe that any expiring collective bargaining agreements will result in a material adverse impact on the Company.

Available Information

     All periodic and current reports, registration statements, and other filings that the Company is required to file with the Securities and Exchange Commission (“SEC”), including the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act (the “1934 Act Reports”), are available free of charge through the Company’s Internet website at www.airproducts.com. Such documents are available as soon as reasonably practicable after electronic filing of the material with the SEC. All 1934 Act Reports filed during the period covered by this Report were available on the Company’s website on the same day as filing.

     The public may also read and copy any materials filed by the Company with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC; the address of that site is www.sec.gov.

Executive Officers of the Company

     The Company’s executive officers and their respective positions and ages on 1 December 2004 follow. Except where indicated, each of the executive officers listed below has been employed by the Company in the position indicated during the past five fiscal years. Information with respect to offices held is stated in fiscal years.

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ITEM 2. Properties.

     The principal executive offices of Air Products are located at its headquarters in Trexlertown, near Allentown, Pennsylvania. Additional administrative offices are located in owned facilities in Hersham, near London, England and Hattingen, Germany. Administrative offices are also located in leased facilities in the Allentown and Philadelphia areas in Pennsylvania; Dublin, Ohio; Mississauga, Ontario, Canada; Tokyo, Japan; Hong Kong, the People’s Republic of China; Singapore; Brussels, Belgium; Paris, France; Barcelona, Spain; and Sao Paulo, Brazil. The management considers the Company’s manufacturing facilities, described in more detail below, to be adequate to support the business efficiently. The following information with respect to properties is as of 30 September 2004.

Gases

     In the United States, the gases segment has approximately 200 plant facilities in 34 states, the majority of which recover nitrogen, oxygen, and argon. The Company has three facilities that produce specialty gases, three facilities that clean electronic parts, three facilities that produce electronic chemicals, and 27 facilities that produce and/or recover hydrogen throughout the United States. Helium is recovered at two plants in Kansas and Texas. There are 16 sales offices

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located in 9 states. The property on which these plants are located is owned by Air Products at approximately one-fourth of the locations, and leased by Air Products at the remaining locations. However, in virtually all cases, the plant itself is owned and operated by Air Products. Air Products owns approximately 25 percent of its industrial gas sales offices and cylinder distribution centers, including related real estate, and leases the other 75 percent.

          Air Products’ European plant facilities total 61 and include seven facilities that recover hydrogen, five facilities that manufacture dissolved acetylene, one facility that recovers carbon monoxide, and two facilities that produce electronic chemicals. The majority of European plants recover nitrogen, oxygen, and argon. In addition, there are five specialty gas centers. There are 105 sales offices and/or cylinder distribution centers in Europe, and several additional facilities located in Brazil, Canada, Puerto Rico, and the Middle East.

          In Asia the gases segment has approximately 97 plant facilities in eight countries, including three equipment manufacturing facilities, an electronic chemicals facility, and eight facilities that produce and/or recover hydrogen. The property on which these plants are located is owned by Air Products at approximately one-fifth of the locations, and leased by Air Products at the remaining locations. There are approximately 40 sales offices and distribution centers located throughout the region, half of which are owned sites and the remainder leased. Representative offices are located in Taiwan and in Hong Kong, Beijing, and Shanghai in the People’s Republic of China.

          Global healthcare has 173 facilities in the United States, Canada, Argentina, Brazil, Mexico, South Africa, and five countries in Europe. The majority of the facilities for global healthcare are leased.

Chemicals

          The chemicals segment manufactures amines, nitric acid, and ammonia products at its Pace, Florida facility; alkylamines at its St. Gabriel, Louisiana facility and its Camacari, Bahia, Brazil facility; polyvinyl acetate emulsions at its South Brunswick, New Jersey facility; dinitrotoluene at its Geismar, Louisiana facility; polyvinyl acetate emulsions at its Cologne, Germany facility; nitric acid, dinitrotoluene, and toluene diamine at its Pasadena, Texas facility; polyvinyl acetate emulsions and acetylenic chemicals at its Calvert City, Kentucky facility; specialty amines at its Wichita, Kansas facility; and epoxy additives at its facilities in Manchester, England, and Los Angeles, California. The chemicals segment manufactures polyurethane additives and polyurethane specialty products (AIRTHANE^®/VERSATHANE^®) at its Paulsboro, New Jersey facility that is leased in part and owned in part. The chemicals segment also manufactures polyvinyl acetate emulsions at four smaller locations.

          The chemicals segment has 12 plant facilities, two sales offices, and one laboratory in the United States, and operates three plants, three sales/representative offices, and two laboratories in Europe, two laboratories in Brazil and Japan, one plant in Brazil, one plant in each of Singapore and Korea, and sales offices in Australia, Brazil, Mexico, the People’s Republic of China, Japan, Korea, and Singapore, and representative offices in Beijing, Shanghai, and Hong Kong in the People’s Republic of China. Substantially all of the chemicals segment’s plants and real estate are owned. The Company leases approximately 75 percent of the offices and 25 percent are owned.

Equipment

          The principal facilities utilized by the equipment segment include six plants and two sales offices in the United States, two plants and one office in Europe, four offices in Japan and the People’s Republic of China, and three plants in Korea, Taiwan, and the People’s Republic of China. Air Products owns approximately 50 percent of the facilities and real estate in this segment and leases the remaining 50 percent.

ITEM 3. Legal Proceedings.

          In the normal course of business Air Products and its subsidiaries are involved in legal proceedings including proceedings involving governmental authorities under the Comprehensive Environmental Response, Compensation, and Liability Act (the federal Superfund law); the Resource Conservation and Recovery Act (RCRA); and similar state environmental laws relating to the designation of certain sites for investigation or remediation. Presently there are approximately 40 sites on which a final settlement has not been reached where the Company, along with others, has been designated a Potentially Responsible Party by the Environmental Protection Agency or is otherwise engaged in investigation or remediation. The Company does not expect that any sums it may have to pay in connection with these matters would have a materially adverse effect on its consolidated financial position, nor is there any material additional exposure expected in

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any one year in excess of the amounts the Company currently has accrued. Additional information on the Company’s environmental exposure is included under “Environmental Controls.”

ITEM 4. Submission of Matters to a Vote of Security Holders.

          Not applicable.

PART II

ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities.

          The Company’s Common Stock, ticker symbol “APD,” is listed on the New York and Pacific Stock Exchanges. Quarterly stock prices, as reported on the New York Stock Exchange composite tape of transactions, and dividend information for the last two fiscal years appear below. Cash dividends on Air Products’ common stock are paid quarterly. The Company’s objective is to pay dividends consistent with the reinvestment of earnings necessary for long-term growth.

               It is the Company’s expectation that comparable cash dividends will continue to be paid in the future.

Quarterly Stock Information

          The Company has authority to issue 25,000,000 shares of preferred stock in series. The Board of Directors is authorized to designate the series and to fix the relative voting, dividend, conversion, liquidation, redemption and other rights, preferences, and limitations as between series. When preferred stock is issued, holders of Common Stock are subject to the dividend and liquidation preferences and other prior rights of the preferred stock. There currently is no preferred stock outstanding. The Company’s Transfer Agent and Registrar is American Stock Transfer and Trust Company, 59 Maiden Lane, Plaza Level, New York, New York 10038, telephone (800) 937-5449 (U.S. and Canada) or (718) 921-8200 (all other locations), Internet website www.amstock.com, and e-mail address info@amstock.com.

          As of 1 December 2004, there were 10,547 record holders of the Company’s Common Stock.

ITEM 6. Selected Financial Data.

          The tabular information appearing under “Five-Year Summary of Selected Financial Data” on page 68 of the 2004 Financial Review Section of the Annual Report to Shareholders is incorporated herein by reference.

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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

          The textual information appearing under “Management’s Discussion and Analysis” on pages 15 through 36 of the 2004 Financial Review Section of the Annual Report to Shareholders is incorporated herein by reference.

ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk.

          The textual information appearing under “Market Risks and Sensitivity Analysis” on pages 31 and 32 of the 2004 Financial Review Section of the Annual Report to Shareholders is incorporated herein by reference.

ITEM 8. Financial Statements and Supplementary Data.

          The consolidated financial statements and the related notes thereto, together with the report thereon of KPMG LLP dated 27 October 2004, appearing on pages 37 through 68 of the 2004 Financial Review Section of the Annual Report to Shareholders, are incorporated herein by reference.

ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

          Not Applicable.

ITEM 9A. Controls and Procedures.

          Under the supervision of the Chief Executive Officer and Chief Financial Officer, the Company’s management conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of 30 September 2004. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of its disclosure controls and procedures have been effective. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of such evaluation.

ITEM 9B. Other Information.

PART III

ITEM 10. Directors and Executive Officers of the Registrant

          The biographical information relating to the Company’s directors, appearing on pages 7 through 9 of the Proxy Statement relating to the Company’s 2004 Annual Meeting of Shareholders, is incorporated herein by reference. Biographical information relating to the Company’s executive officers is set forth in Item 1 of Part I of this Report.

          Information on Section 16(a) Beneficial Ownership Reporting Compliance, appearing on page 27 of the Proxy Statement relating to the Company’s 2004 Annual Meeting of Shareholders, is incorporated herein by reference.

          The Company’s existing Code of Conduct, which has applied to all employees, was updated in 2003 to comply with the requirements of Sarbanes-Oxley and the New York Stock Exchange, including by clarifying its application to its principal executive officer, principal financial officer, principal accounting officer, and directors. The text of the Code of Conduct was filed as Exhibit 14 to the 2003 Annual Report on Form 10-K. The Code of Conduct can also be found at the Company’s Internet website at www.airproducts.com/responsibility/governance/codeofconduct.htm.

ITEM 11. Executive Compensation.

          The information under “Compensation of Executive Officers” which includes “Report of the Management Development and Compensation Committee,” “Executive Compensation Tables,” “Severance and Employment Arrangements,” “Change in Control Arrangements,” and “Information About Stock Performance and Ownership,” appearing on pages 16 through 25 of the Proxy Statement relating to the Company’s 2005 Annual Meeting of Shareholders, is incorporated herein by reference.

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ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Securities Authorized for Issuance Under Equity Compensation Plans.

Equity Compensation Plan Information

          The following table provides information as of 30 September 2004, about Company Stock that may be issued upon the exercise of options, warrants, and rights granted to employees or members of the Board of Directors under the Company’s existing equity compensation plans, including plans approved by shareholders and plans that have not been approved by shareholders in reliance on the New York Stock Exchange’s traditional treasury stock or other applicable exception to the Exchange’s listing requirements.

          Global Employee Stock Option Awards and Stock Incentive Program – All stock options under these plans were granted at fair market value on the date of grant, first become exercisable three years after grant, and terminate ten years after the date of grant or upon the earlier termination of employment for reasons other than retirement, disability, death, or involuntary termination due to Company action necessitated by business conditions. No further awards will be made under these plans.

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          Stock Option Plan for Directors – All stock options under this plan were granted at fair market value on the date of grant. The options become exercisable in six months after grant and remain exercisable for nine and one-half years unless the director resigns from our Board after serving for less than six years (other than because of disability or death). No further awards will be made under this plan.

          The Air Products PLC U.K. Savings-Related Share Option Scheme and the Air Products Group Limited U.K. Savings-Related Share Option Scheme (together, the “U.K. Plan”) are employee benefit plans for employees of Air Products PLC (and certain of its U.K. subsidiaries) and Air Products Group Limited (and certain of its U.K. subsidiaries), respectively (together, the “U.K. Companies”). Employees participate in the U.K. Plan by electing to do so during a brief invitation period. An employee who elects to participate elects a five- or seven-year option period and has amounts of salary automatically withheld and contributed to a savings account at a bank not affiliated with the Company. At the end of the five-year savings period, a tax-free bonus is added to the employee’s account. An employee who elects a seven-year option and retains his savings account for seven years receives a further bonus at the end of the seventh year. At the end of the option period, the participant may use his savings to purchase shares of Company Stock at the fixed option price or receive in cash the amount of his savings and bonus(es). His election must be made within six months of the close of the option period. The option price is an amount determined by the directors of the U.K. Company on the date the option is granted, which may not be less than 90 percent of Market Value (as defined in the U.K. Plan) on the date of grant.

          Deferred Compensation Plan for Directors - Our compensation plan for non-employee directors mandates that one-half of each director’s quarterly retainer is paid in DSUs. Directors have the opportunity to purchase more DSUs with up to all of the rest of their retainers and meeting fees. Retainer and meeting fee dollars (plus dividend equivalents earned on the director’s existing DSU account during the quarter) are converted to DSUs based on the market value of a share of Company Stock on the second business day preceding the date the dollars would have been paid to the director. (Retainers and meeting fees are paid quarterly in arrears.) New directors and directors continuing in office after our annual meetings were awarded 1,000 DSUs. Each DSU also accrues dividend equivalents which are equal to the dividends that would have been paid on a share of stock during the period the DSUs are outstanding. Accumulated dividend equivalents are converted to DSUs on a quarterly basis. DSUs provide our directors with the financial equivalent of owning Company Stock participating in quarterly dividend reinvestment, which they cannot sell until after they leave our Board, except that DSUs have no voting rights. Directors may transfer DSUs by gift to family members.

          The Annual Incentive Plan is the annual cash bonus plan for executives and key salaried employees of the Company and its subsidiaries. Terms applicable to the Plan were approved by shareholders in order to permit the continued exclusion of compensation payable under it from the deduction limitations imposed by Section 162(m) of the Internal Revenue Code. The Plan is administered by the Management Development and Compensation Committee of the Board of Directors (the “Compensation Committee”). All or a portion of bonuses granted to a participant may be deferred at the election of the participant or at the discretion of the Compensation Committee (“Deferred Awards”).

          The dollar amount of Deferred Awards granted to a participant is initially credited to an unfunded account that earns interest credits. Participants with Deferred Awards are periodically permitted while employed by the Company to irrevocably convert all or a portion of their accounts to an account deemed to be invested in Company Stock. Upon conversion, the Company Stock account is credited with deferred stock units (“DSUs”) based on the fair market value of a share of Company Stock on the date of crediting. Dividend equivalents corresponding to the number of DSUs are credited quarterly to the interest-bearing account. DSUs are paid after, but no later than ten years after, termination of employment in shares of Company Stock, unless the Compensation Committee determines otherwise. Upon a change in control of the Company, DSUs become payable immediately in cash.

          The Company’s Supplementary Savings Plan is an unfunded employee retirement benefit plan available to certain of the Company’s U.S.-based management and other highly compensated employees (and those of its subsidiaries) whose participation in the Company’s Retirement Savings and Stock Ownership Plan (the “RSSOP”) is limited by federal tax laws. Participants may defer a portion of base salary which cannot be contributed to the RSSOP because of tax limitations (“Elective Deferrals”) and earn matching contributions from the Company they would have received if their Elective Deferrals had been contributed to the RSSOP (“Matching Credits”). The dollar amount of Elective Deferrals and Matching Credits is initially credited to an unfunded account, which earns interest credits. Participants are periodically permitted while employed by the Company to irrevocably convert all or a portion of their interest bearing account to DSUs in a

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Company Stock account. Conversion and crediting of earnings to, and payments from, the Company Stock account is the same as described above as to Deferred Awards granted under the Annual Incentive Plan.

          The information set forth in the sections headed “Persons Owning More than 5% of Air Products Stock as of September 30, 2004,” and “Air Products Stock Beneficially Owned by Officers and Directors as of November 1, 2004,” appearing on pages 26 through 27 of the Proxy Statement relating to the Company’s 2005 Annual Meeting of Shareholders, is incorporated herein by reference.

ITEM 13. Certain Relationships and Related Transactions.

          Not applicable.

ITEM 14. Principal Accountant Fees and Services.

          The information presented on pages 13 and 14 of the Proxy Statement relating to the Company’s 2005 Annual Meeting of Shareholders is incorporated herein by reference.

PART IV

ITEM 15. Exhibits and Financial Statement Schedules.

          (a) The following documents are filed as a part of this Report to the extent below noted:

          1. The 2004 Financial Review Section of the Company’s 2004 Annual Report to Shareholders. Information contained therein is not deemed filed except as it is incorporated by reference into this Report. The following financial information is incorporated herein by reference:

(Page references to 2004 Financial Review Section of the Annual Report)

          2. The following additional information should be read in conjunction with the consolidated financial statements in the Company’s 2004 Financial Review Section of the Annual Report to Shareholders:

(Page references to this Report)

          All other schedules are omitted because the required matter or conditions are not present or because the information required by the Schedules is submitted as part of the consolidated financial statements and notes thereto.

          3. Exhibits.

          Exhibits filed as a part of this Annual Report on Form 10-K are listed in the Index to Exhibits located on page 19 of this Report.

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SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

          Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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* W. Douglas Brown, Vice President, General Counsel, and Secretary, by signing his name hereto, does sign this document on behalf of the above noted individuals, pursuant to a power of attorney duly executed by such individuals, which is filed with the Securities and Exchange Commission herewith.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Air Products and Chemicals, Inc.:

          Under date of 27 October 2004, we reported on the consolidated balance sheets of Air Products and Chemicals, Inc. and subsidiaries as of 30 September 2004 and 2003, and the related consolidated statements of income, cash flows, and shareholders’ equity for each of the years in the three year period then ended as contained in the Annual Report to Shareholders. These consolidated financial statements and our report thereon are incorporated by reference in this Form 10-K. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule referred to in Item 15(a)(2) in this Form 10-K. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on this financial statement schedule based on our audit.

          In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

KPMG LLP
Philadelphia, Pennsylvania
27 October 2004

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AIR PRODUCTS AND CHEMICALS, INC. AND SUBSIDIARIES

SCHEDULE II–VALUATION AND QUALIFYING ACCOUNTS

For the Years Ended 30 September 2004, 2003, and 2002

Notes:

18

INDEX TO EXHIBITS

19

20

*Previously filed as indicated and incorporated herein by reference. Exhibits incorporated by reference are located in SEC File No. 1-4534.

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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

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)/

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

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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

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6. AMENDMENT AND DISCONTINUANCE; NO DISCRETION

     The Board of Directors of the Company may amend or modify this Program; provided, however, that no amendment may affect a director’s rights under any award of Stock Options under this Program made prior to such amendment without such director’s consent. The Board of Directors of the Company may suspend or discontinue this Program in whole or in part at any time, but any such suspension or discontinuance shall not affect awards of Stock Options granted under this Program prior thereto.

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NOTICE OF
EXERCISE OF STOCK OPTION
GRANTED UNDER THE AIR PRODUCTS AND CHEMICALS, INC. (THE “COMPANY”)
STOCK OPTION PROGRAM FOR DIRECTORS (THE “PROGRAM”)

On                     the Company granted me options under the Program to purchase shares of its Common Stock at a price of $                    per share.

I hereby give notice of exercise of my options to purchase                     of such shares by payment to the Company of $                   , the aggregate option exercise price for such shares. My payment is made by a CHECK enclosed herewith and/or WIRE TRANSFER of immediately available funds payable to the Company.

DELIVERY INSTRUCTIONS

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ADMINISTRATIVE PROCEDURES REGARDING TRANSFERS OF STOCK
OPTION AWARDS (THE “PROCEDURES”)

Stock option awards granted under the Program are transferable by the recipient of the award (the “director”) on and after the date upon which, and to the extent, the option has become exercisable. Options may be transferred only in accordance with these Procedures. DIRECTORS ARE ENCOURAGED TO SEEK FINANCIAL AND TAX PLANNING ADVICE PRIOR TO TRANSFERRING AN OPTION.

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     U.S. Resident Directors

     Upon Transfer:

     Upon Exercise:

     Nonresident Directors

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Air Products and Chemicals, Inc.
(the “Company”)

ELECTION TO TRANSFER STOCK OPTION
Granted Under The Stock Option Program for Directors

I, THE DIRECTOR, HEREBY ELECT TO MAKE A TRANSFER OF A STOCK OPTION GRANTED TO ME AS FOLLOWS:

BY SIGNING BELOW, I, THE DIRECTOR, ACKNOWLEDGE receipt of a copy of the “Administrative Procedures Regarding Transfers of Stock Option Awards” (the “Procedures”). I further acknowledge that upon exercise of the option by the transferee, taxable income will be imputed to me, the director, and reported to the appropriate tax authorities. I understand that I am responsible for any taxes payable as a result of the exercise.

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BY SIGNING BELOW, THE TRANSFEREE ACKNOWLEDGES receipt of a copy of the Procedures and agrees to comply with and be subject to the terms and conditions pursuant to which the option was granted (as modified by the Procedures), and agree not to further transfer the option.

Receipt of this executed Election form is hereby acknowledged and accepted, and the requested transfer of stock option will be effective this           day of                          ,           .

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DISCUSSION OF TAX AND SOCIAL SECURITY CONSEQUENCES
OF THE STOCK OPTION PROGRAM FOR DIRECTORS

     The following is a summary of the U.S. tax and Social Security consequences of the Air Products and Chemicals, Inc. Stock Option Program for Directors (“Program”). This is a general summary under current law. You should consult with your personal tax advisor before exercising any Program options. Foreign tax rules are not discussed in this summary and also should be reviewed with your personal tax advisor.

U.S. INCOME TAXES — RESIDENTS

     No U.S. income taxation occurs upon the grant of a stock option under the Program. Receipt of Shares upon the exercise of a Program option is subject to federal, state and local income taxes. The Company will report taxable income on a Form 1099. No U.S. tax will be withheld by the Company. As a result you may have to make estimated tax payments in order to avoid penalties for underpayment of estimated tax. In the event of your death prior to exercise of your Program options, your estate or designated beneficiary will be subject to income taxes in the same manner as you would have been with respect to exercise of the Program options. (State or local rules may vary.)

Amount of Income

     The amount of taxable income you will recognize with respect to receipt of Shares will be the option spread; i.e., the difference between your exercise price and the fair market value of the Shares, on the date such value is includable in your income for tax purposes (“date of taxation”). “Fair market value” for this purpose is the mean of the NYSE high and low for the date of taxation.

Date of Taxation

     The date of taxation generally will be the date of exercise. However, if the optioned stock is subject to Section 16(b) restrictions because you or someone whose transactions are attributed to you made a nonexempt purchase during the six months preceding the exercise, the date of taxation will be deferred until the restrictions lapse.

Basis and Subsequent Sale of Shares

     The fair market value of the Shares on the date of taxation will be your basis in the Shares. Any subsequent appreciation or depreciation in the Shares will result in a capital gain or loss if you dispose of the Shares in a taxable transaction. Your holding period will begin on the date of taxation for tax purposes. The gain or loss on a disposition will be deemed to be long-term capital gain or loss, subject to a reduced maximum tax rate, once the Shares have been held

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for more than twelve months and an even lower tax rate if the Shares are held for at least five years.

SELF-EMPLOYMENT TAX

     The amount of taxable income realized upon exercise of a Plan option for federal income tax purposes is self-employment income subject to self-employment tax at a maximum rate of 15.3%. Self-employment tax generally applies at the same time federal income taxes apply. The Social Security portion of the tax (12.4%) will not apply to income recognized with respect to a Plan option to the extent you already have self-employment income or wages from employment for the year in excess of the Social Security Wage Base ($87,900 in 2004). Gain from the disposition of the Shares will not be subject to self-employment tax. Upon your death, your estate or designated beneficiary is not subject to self-employment tax.

ESTATE TAXES

     The fair market value of options that can be exercised by your estate or a designated beneficiary must be included in your gross estate. An estate tax deduction is allowed for items passing to your spouse. An income tax deduction is allowed for any estate tax attributable to an item generating taxable income. Congress enacted legislation that phases out the estate tax in 2002-2009. This legislation sunsets in 2011, however, potentially restoring the tax at its 2001 level.

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SOCIAL SECURITY BENEFITS

     Director fees are considered earnings for purposes of reducing Social Security benefits in the year earned rather than the year paid. Self-employment income realized upon exercise of a stock option under the Plan will not reduce your Social Security benefits payable in the year of exercise if you have attained age 65 at the time of exercise. If you pay self-employment tax with respect to option exercises under the Plan, your future Social Security benefits may increase.

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Exhibit 10.16

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

DEFERRED COMPENSATION PROGRAM
FOR DIRECTORS

TABLE OF CONTENTS

DEFERRED COMPENSATION PROGRAM
FOR DIRECTORS

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Corporate Secretary
Air Products and Chemicals, Inc.
7201 Hamilton Boulevard
Allentown, PA 18195-1501

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EXHIBIT A
AIR PRODUCTS AND CHEMICALS, INC. (THE “COMPANY”)
DEFERRED COMPENSATION PROGRAM FOR DIRECTORS (THE “PROGRAM”)
ELECTION FORM

$___________________(amount per quarter)

or

___________________ (percentage per quarter)

This election, modification, or revocation shall take effect beginning on                              to affect only compensation earned on and after such date.
(Must be a date after the date this Election Form is received by the Company.)

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EXHIBIT A
AIR PRODUCTS AND CHEMICALS, INC.
DEFERRED COMPENSATION PROGRAM FOR DIRECTORS (THE “PROGRAM”)
ELECTION FORM

(continued)

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EXHIBIT A
AIR PRODUCTS AND CHEMICALS, INC.
DEFERRED COMPENSATION PROGRAM FOR DIRECTORS (THE “PROGRAM”)
ELECTION FORM

(continued)

     This Election is subject to the terms of Air Products and Chemicals, Inc. Deferred Compensation Program for Directors, as amended from time to time.

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EXHIBIT B

ADMINISTRATIVE PROCEDURES REGARDING TRANSFER OF THE RIGHT
TO PAYMENT OF DEFERRED COMPENSATION

The right to receive payment of deferred compensation and earnings thereon under the Program (a “Payment Right”) is transferable by the director participant (the “director”) only in accordance with these Procedures. DIRECTORS ARE ENCOURAGED TO SEEK FINANCIAL AND TAX PLANNING ADVICE PRIOR TO TRANSFERRING A PAYMENT RIGHT.

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Air Products and Chemicals, Inc.
(the “Company”)

ELECTION TO TRANSFER PAYMENT RIGHTS
Under The Deferred Compensation Program for Directors (the “Program”)

I, THE DIRECTOR, HEREBY ELECT TO MAKE A TRANSFER OF MY PAYMENT RIGHT AS FOLLOWS:

BY SIGNING BELOW, I, THE DIRECTOR, ACKNOWLEDGE receipt of a copy of the “Administrative Procedures Regarding Transfers of Payment Rights” (the “Procedures”). I further acknowledge that upon payment of my Accounts to the transferee, taxable income will be imputed to me, the director, and reported to the appropriate tax authorities. I understand that I am responsible for any taxes payable as a result of such payment.

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BY SIGNING BELOW, THE TRANSFEREE ACKNOWLEDGES receipt of a copy of the Procedures and agrees to comply with and be subject to the terms and conditions of the Plan (as modified by the Procedures), and agree not to further transfer the Payment Right.

Receipt of this executed Election form is hereby acknowledged and accepted, and the requested transfer of stock option will be effective this                                        day of                    ,                    .

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TAX CONSEQUENCES TO PARTICIPANTS

     The following is a general summary under current law of the U.S. tax consequences of participation in the Program. The tax laws could change prior to your retirement or other termination of your service as a director in a way that accelerates taxation of deferred amounts. Legislation proposed by the Administration and others would impose or authorize the U.S. Treasury to impose current taxation on deferred compensation arrangements deemed to be abusive.

Income Taxes

Estate Tax

Deferred amounts remaining unpaid at your death will be includable in your estate for federal estate tax purposes. An unlimited marital deduction is allowed for property passing to your spouse, which has the effect of removing deferred amounts from your federal taxable estate if you predecease your spouse. Congress enacted legislation in 2001 that phases out the estate tax in 2002-2009. This legislation sunsets in 2011, however, potentially restoring the tax at its 2001 level.

Self-Employment Tax

Self-employment tax will apply to cash and deferred stock units, and earnings thereon including appreciation, in the year payout is received. Self-employment tax does not apply to nonresident aliens. Self-employment tax is imposed currently at a maximum rate of 15.3% on earned income up to the Social Security Wage Base for the particular year ($87,900 for 2004), and 2.9% on earned income in excess of the wage base. Wages received as an employee are taken into account first in determining whether the Social Security Wage Base has been exceeded. Thus, the

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15.3% Social Security element of self-employment tax will apply only if you do not have wages or other earned income in excess of the Wage Base. One-half of your self-employment tax liability can be deducted from your adjusted gross income for federal income tax purposes.

Lump-Sum vs. Installment Payout

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Exhibit 10.19

TERMS AND CONDITIONS

AIR PRODUCTS’
STOCK INCENTIVE AWARD
(“AWARD”)

These Terms and Conditions govern the stock options awarded to certain Air Products employees as of 1 October 2002 (“Options”). Additional capitalized words are defined in Section 4.

1. OPTIONS

     1.1 Grants. Options to purchase shares of Common Stock from the Company shall be granted to such Eligible Employees as the Vice President-Human Resources shall select. Options shall be evidenced by an Option grant letter which shall specify the number of shares of Common Stock, as determined by the Vice President-Human Resources, to which it pertains and which shall be subject to these Terms and Conditions.

     1.2 Grant Date. The date of grant of the Option is 1 October 2002.

     1.3 Option Price. Shares of Common Stock can be purchased under an Option at the price of US $43.09 per share.

     1.4 Option Term. Each Option that has not been Exercised or terminated shall expire at midnight Eastern Standard Time on 1 October 2012.

     1.5 Exercisability. Except as provided below, Options may be Exercised beginning on 1 October 2005 until the expiration of the Option term.

     1.6 Method of Exercise. The Company will employ an outside service firm to handle all Option administration. That firm will provide employees with specific instructions on how to exercise their Options and with a description of the various forms of exercise permitted. This information will be provided in a separate communication prior to the date, 1 October 2005, that the Options become exercisable.

     1.7 Options Non-Transferable. No Option may be sold, assigned, pledged or otherwise transferred by a Participating Employee during his or her lifetime. During a Participating Employee’s

lifetime, only the Participating Employee, or, in the case of incompetency, his or her guardian or legal representative, may exercise his or her Option.

     1.8 Death or Retirement. If a Participating Employee’s employment by the Company or an Affiliated Organization terminates due to his or her death or Retirement, his or her Option, if unexercised, will not be terminated and may be Exercised for the remainder of the Option term, but no sooner than 1 October 2005, by the former Employee or, in the event of death, his or her Beneficiary.

     1.9 Other Terminations.

     (a) Involuntary Termination. If a Participating Employee’s employment by the Company and all Affiliated Organizations is involuntarily terminated due to Company action necessitated by business conditions, including, but not limited to, job eliminations, workforce reductions, divestitures, sale by the Company of an Affiliated Organization and plant closings, the former Employee’s Option, if unexercised, will not be terminated immediately. The Option may be Exercised after his or her termination during the six months following 1 October 2005 or the former Employee’s last day of employment, whichever is later.

If a Participating Employee’s employment by the Employer is involuntarily terminated for any reason other than Company action described above, his or her Option will be terminated as of the close of business on his or her last day of employment.

     (b) Voluntary Terminations. If a Participating Employee’s employment by the Employer and all Affiliated Organizations is terminated voluntarily by the Employee for any reason except Retirement, his or her Option shall be terminated as of the close of business on his or her last day of employment.

     (c) Determination of Cause for Termination. The Vice President - Human Resources shall determine, in his or her sole discretion, the reason for termination of a Participating Employee’s employment.

     1.10 Long-Term Disability. If a Participating Employee’s employment with the Company and all Affiliated Organizations becomes inactive due to his or her Long-Term Disability, his or her Option, if unexercised, shall not be terminated and may be Exercised for the remainder of the Option

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term, but no sooner than 1 October 2005; provided, however, that such a disabled former Employee’s Option shall be terminated upon cessation of the Long-Term Disability, unless he or she returns to active employment as an Employee with the Company or an Affiliated Organization, or is involuntarily terminated.

     1.11 Leaves of Absence; SEP Program. If a Participating Employee’s employment status becomes classified as inactive due to a leave of absence or changes to U. S. Supplemental Employee Program (SEP), his or her Option, if unexercised, may not be Exercised until such time as he or she returns to active employment as an Employee, and in no event earlier than 1 October 2005 nor later than 1 October 2012.

     1.12 Lay Offs. If a Participating Employee is laid off, his or her Option, if unexercised, may not be Exercised until such time as he or she returns to active employment as an Employee, and in no event earlier than 1 October 2005 nor later than 1 October 2012.

     1.13 Termination During Inactive Status. In the event that a Participating Employee with an outstanding Option dies, retires, or develops a permanent and total disability while their ability to Exercise is suspended because their employment classification is Layoff, Leave of Absence, or SEP, then that individual or their Beneficiary will be permitted a time period to Exercise their Option not to exceed six (6) months from the later of their death, disability or Retirement and 1 October 2005, and extending not later than 1 October 2012.

     1.14 Foreign Residents. The Vice President — Human Resources shall have authority to determine, adjust and modify the terms and conditions of Options for Participating Employees working outside the United States to fulfill the purposes of the Award. Without limiting the foregoing, the Vice President - Human Resources may make deviations from or additions to these Terms and Conditions if necessary or advisable to comply with, or obtain favorable treatment for Participants or the Employer under laws in other countries in which the Employer operates or has employees, including, without limitation, granting other incentive awards in lieu of Options. All references in these Terms and Conditions to Options and Exercise shall also refer, respectively, to any such other incentive awards and to delivery or payment of any such other incentive awards unless the context clearly requires otherwise. Nothing contained herein shall require the Award to be adjusted or administered in a manner qualifying it for preferential tax treatment in any jurisdiction.

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2. DECISIONS AND ADMINISTRATION

     2.1 General. The Award is administered by the Vice President — Human Resources. All authority, powers and duties of the Company, whether specifically set forth in these Terms and Conditions or otherwise necessary to carry out the Award, are assigned to the Vice President — Human Resources or his or her delegate.

     2.2 Decisions and Interpretation. The Vice President — Human Resources has the right and discretionary authority to decide all questions of eligibility for Options or right to exercise Options, and to construe and interpret these Terms and Conditions and all other aspects of the Award. The Vice President — Human Resources may correct any defect, supply any omission, or reconcile any inconsistency in these Terms and Conditions or in any other writing pertaining to the Award in the manner and to the extent he or she shall deem necessary to carry the Award into effect. Interpretations and decisions made by the Vice President — Human Resources under the Award including, without limitation, determination of eligibility, and determination of the terms and conditions of, and amounts payable with respect to, Options need not be applied in a uniform manner to all Participants similarly situated.

     2.3 Procedures. As administrator of the Award, the Vice President — Human Resources shall have the authority to adopt, alter and repeal any administrative rules, guidelines and practices governing the Award that he or she deems advisable. Such procedures may or may not be evidenced in writing.

     2.4 Decisions Final. Any decision, interpretation, or other action made or taken in good faith by the Vice President — Human Resources arising out of or in connection with the Award shall be final, binding and conclusive on the Employer, the Participants and all employees of the Employer and their respective heirs, executors, administrators, successors and assigns.

3. GENERAL PROVISIONS

     3.1 Amendment. The Vice President — Human Resources may amend the terms and conditions of any Option, prospectively or retroactively, but no such amendment or other action by the Company shall impair the rights of any Participant without the Participant’s consent, except as required to comply with, or obtain approval, qualification, or exemption under, any applicable tax or other laws.

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     3.2 No Funding. The Award is unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of Options. With respect to any payments or delivery of shares not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company.

     3.3 Conditions to Issuance or Delivery of Common Stock. All shares of Common Stock delivered under the Award shall be subject to such restrictions on sale by the Participant as the Company may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed, any applicable federal or state securities law, any applicable corporate law, and any applicable foreign law, and the Company may cause a legend or legends to be put on Common Stock certificates delivered under the Award to make appropriate reference to such restrictions. Further, if, at any time, counsel to the Employer shall be of the opinion that any sale or delivery by the Company of shares of Common Stock pursuant to an Option under the circumstances is, or may be, unlawful, not in compliance with any applicable regulation, rule or order, or that such sale or delivery will or may result in the imposition of excise taxes or penalties under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, and the right to exercise any Option shall be suspended until, in the opinion of said counsel, such sale or delivery shall be lawful, in compliance with such applicable regulations, rules or orders and free of such excise taxes or penalties. The Company may limit the number of shares that can be purchased upon Exercise of an Option to limit the volume of trading in Common Stock if counsel to the Company is of the opinion that such limitation is required or advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed, any applicable federal or state securities law, any applicable corporate law, and any applicable foreign law.

     3.4 No Additional Rights. Neither the Award nor the grant of any Option hereunder shall give any Participant or other person any right except rights to purchase Common Stock under these Terms and Conditions or, where applicable, rights to another incentive award which may be made in lieu of an Option under these Terms and Conditions or other applicable terms and conditions. The grant of an Option to a Participating Employee shall not be deemed to create any right of such Employee or any other employee to receive additional awards in the future. Further, no rights are

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created with respect to the terms of employment by, or continuance of employment by, or length of employment with, the Employer or any Affiliated Organization; nor shall there be a limitation in any way, except as provided by applicable law, on the right of the Employer or any Affiliated Organization by which an employee is employed to terminate his or her employment at any time.

     3.5 Withholding of Taxes. The Employer shall have the right to deduct from all cash or property deliverable to a Participant under the Award any taxes, levies, imposts, deductions, charges or withholdings required by law to be withheld with respect to the delivery of such cash or property. The Employer reserves the right to deduct from wages paid by it to a Participant any amount necessary to pay all or any portion of the withholding taxes required to be withheld incidental to the Exercise of an Option or delivery of any other incentive award made in lieu of an Option. Subject to any terms and conditions which the Vice President — Human Resources may impose, any withholding obligation may be satisfied by reducing the number of shares of Common Stock otherwise deliverable upon Exercise of an Option.

     3.6 No Effect on Other Benefits. No Option grant or Exercise shall be deemed compensation for purposes of computing benefits, or otherwise affect any benefits, under any employee benefit plan or program of the Employer or any Affiliated Organization now or subsequently in effect, including, but not limited to, retirement and life insurance plans or programs. Except as otherwise required by governing law, no Option grant or Exercise shall be deemed wages for purposes of legally imposed benefits or emoluments including, but not limited to, mandatory profit sharing, housing allowances, severance pay and vacation or thirteenth month pay.

     3.7 Costs. Commissions, charges, taxes or other amounts, of any kind or nature, incurred by a Participant in receiving or Exercising an Option, selling shares under an Option, obtaining share certificates, or otherwise in connection with the Award are the sole responsibility of the Participant.

     3.8 Misconduct. In the event the Vice President — Human Resources determines that a Participant has at any time (a) used for personal gain or disclosed to unauthorized persons any confidential or proprietary information or trade secrets of the Employer or Affiliated Organizations, or (b) breached any agreement with, or violated any fiduciary obligation owed to, the Employer or any Affiliated Organization, all outstanding Options held by such Participant shall be terminated as of the date of such determination.

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     3.9 Non-Stockholder. A Participant shall not be deemed, for any purpose, to be or have rights as a stockholder of the Company with respect to shares of Common Stock subject to the Options until the date as of which such shares of Common Stock are actually issued in the name of the Participant. No adjustments shall be made for dividends or distributions or other rights for which the record date is prior to the date as of which a Participant becomes a stockholder.

     3.10 Governing Law. These Terms and Conditions, the Award and actions taken in connection therewith shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania.

     3.11 Captions. The captions to the several sections of these Terms and Conditions are not a part of the Award or intended to have any legal significance in the interpretation thereof, but are merely guides or labels to assist in locating the several sections hereof.

     3.12 Dilution and Other Adjustments. Notwithstanding any other provision of these Terms and Conditions to the contrary, 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 in the number and/or kind of shares and/or purchase price per share subject to outstanding Options, to the extent such an adjustment is needed, as determined by the Vice President — Human Resources, to preserve, without increase or decrease, the value of such Options.

4. DEFINITIONS

For purposes of these Terms and Conditions, the following words have the following meanings:

     4.1 “Affiliated Organization” means any subsidiary, partnership or other entity in which the Company holds, directly or indirectly, a fifty percent (50%) or greater ownership interest.

     4.2 “Beneficiary” means the person or persons who are designated by a Participant as his or her beneficiary for the Option in accordance with beneficiary designation procedures adopted by the outside service provider administering the Options. If there is no such designated Option beneficiary, “Beneficiary” shall mean the person or persons who were most recently named as the beneficiary or beneficiaries of basic life insurance provided to the Participant by an Employer, if any. If there is no

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beneficiary named under either of the above methods, the Beneficiary shall be the Participant’s estate or other legal representative.

     4.3 “Common Stock” means the common stock, US $1.00 par value, of the Company.

     4.4 “Company” means Air Products and Chemicals, Inc.

     4.5 “Eligible Employee” means an Employee who was employed in an active classification on 1 October 2002, whose salary grade level is 117 or below, (or, in the case of a Participating Subsidiary, an equivalent compensation level) or who is otherwise deemed ineligible for the Company’s Long Term Incentive Plan.

     4.6 “Employee” means a full or part-time regular employee of the Company or a Participating Subsidiary and shall not include any employee working under the Supplemental Employment Program, the Cooperative Education / Summer Intern Program or any other temporary classification, or any individual who is a consultant, a leased or contract worker or designated as an independent contractor in an agreement with the Employer.

     4.6 “Employer” means any one or more of the Company and the Participating Subsidiaries.

     4.7 “Exercise” means to purchase shares under an Option.

     4.8 “Long-Term Disability” means, with respect to a Participating Employee, to have an inactive employment status reflected in the employment records of the Employer due to a long-term disability.

     4.9 “Participant” means a Participating Employee, or any former Participating Employee, who holds an unexercised Option which has not expired or been terminated or, in the event of the death of such a Participating Employee or former Participating Employee, the Beneficiary of such Participating Employee or former Participating Employee.

     4.10 “Participating Employee” means an Employee who holds an unexercised Option granted to him or her under Section 1.1 which has not expired or terminated.

     4.11 “Participating Subsidiary” means any Affiliated Organization of the Company which has been designated by the Vice-President Human Resources to participate in the Award.

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     4.12 “Retirement” shall mean termination of employment with the Company and any Affiliated Organization by an employee who has the right to begin receiving immediate annuity retirement benefits from a pension plan sponsored or contributed to by the Company or an Affiliated Organization. In the event the Participating Employee is not covered by any such pension plan, “Retirement” shall be determined from the records of the Company and the Affiliated Organizations.

     4.13 “Vice President — Human Resources” means the Vice President — Human Resources of the Company.

     IN WITNESS WHEREOF, the Company has caused these Terms and Conditions to be executed by its duly authorized officer as of 1 October 2002.

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Exhibit 12

AIR PRODUCTS AND CHEMICALS, INC., AND SUBSIDIARIES

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Unaudited)

Exhibit 13

our financial Trends

^(A) Operating income divided by five-quarter average of total assets less investments in equity affiliates.

our Financials

Management’s Discussion and Analysis

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Management’s Discussion and Analysis continued

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17

Management’s Discussion and Analysis continued

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19

Management’s Discussion and Analysis continued

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