EX-10.5 STOCK OPTION PROGRAM FOR DIRECTORS OF THE COMPANY

Exhibit 10.5

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

STOCK OPTION PROGRAM FOR DIRECTORS
(THE “PROGRAM”)

TABLE OF CONTENTS

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)/

J-1

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

J-2

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

J-3

J-4

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.

J-5

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

J-6

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.

J-7

     U.S. Resident Directors

     Upon Transfer:

     Upon Exercise:

     Nonresident Directors

J-8

J-9

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.

J-10

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                          ,           .

J-11

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

J-12

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.

J-13

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.

J-14