What is a classified board of directors, and why is Air Products proposing to eliminate it?

A classified board, also known as a staggered board, divides directors into classes (typically three), with only one class up for election each year. This structure can make it harder for shareholders to remove directors. Air Products is proposing to eliminate this structure to move towards annual elections for all directors, which is generally seen as a governance best practice that increases director accountability to shareholders and allows for more frequent shareholder input on board composition.

When will the elimination of the classified board take effect?

The elimination of the classified board will be phased in. Directors elected at the Company's 2015 Annual Meeting of Shareholders will be the first to be elected to a one-year term. The board will be fully declassified and all directors will be elected annually beginning with the 2017 Annual Meeting of Shareholders.

Does this change affect the current directors' terms?

No, the proposed declassification will be phased in over time and will not affect the unexpired terms of previously elected directors. The transition is designed to ensure continuity and respect existing terms.

What action do shareholders need to take?

Shareholders will be asked to vote on and approve the amendment to the Restated Certificate of Incorporation to eliminate the classified board structure at the Company's 2014 Annual Meeting of Shareholders. The full details of the proposal will be provided in the proxy statement to be filed later in 2013.

APD 8-K SEC Disclosure — May 20, 2013

Summary

Air Products & Chemicals, Inc. (APD) announced a significant corporate governance change through an 8-K filing on May 20, 2013. The company's Board of Directors has decided to propose the elimination of its classified board structure to shareholders at the 2014 Annual Meeting. This move, if approved, aims to enhance director accountability and shareholder responsiveness by moving towards annual elections for all board members. The transition to a fully declassified board will be phased over several years. Directors elected at the 2015 Annual Meeting will be the first to serve one-year terms, with the board fully declassified by the 2017 Annual Meeting. This staged approach ensures continuity and avoids disrupting the terms of currently elected directors, while signaling a commitment to modern governance practices that align with investor expectations for greater say on board composition.

Key Highlights

1Air Products' Board of Directors will propose eliminating the classified board structure.
2Shareholder approval is required for the amendment to the Restated Certificate of Incorporation.
3The proposal will be included in the proxy statement for the 2014 Annual Meeting of Shareholders.
4Declassification will be phased in, starting with directors elected at the 2015 Annual Meeting serving one-year terms.
5The board will be fully declassified by the 2017 Annual Meeting of Shareholders.
6The phased approach ensures existing director terms are not affected.
7This action reflects a move towards enhanced corporate governance and shareholder responsiveness.

Air Products & Chemicals, Inc. 8-K Report, Corporate Update (May 20, 2013)

Summary

Key Highlights

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