UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[ x ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _______
Commission file number 333-69214
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
AIRGAS, INC. 2001 EMPLOYEE STOCK PURCHASE PLAN
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Airgas, Inc.
259 North Radnor-Chester Road
Suite 100
Radnor, PA 19087-5283
AIRGAS, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
ANNUAL REPORT ON FORM 11-K
December 31, 2003
INDEX
PAGE
----
Independent Auditors' Report ..........................................3
AUDITED FINANCIAL STATEMENTS
Statements of Financial Position as of December 31, 2003 and 2002.......4
Statements of Changes in Participants' Equity for the years ended
December 31, 2003, 2002, and the period August 2, 2001 (inception)
to December 31,2001.....................................................5
Notes to Financial Statements ..........................................6
SIGNATURES...............................................................8
EXHIBIT INDEX
Independent Auditors' Consent ..........................................9
2
INDEPENDENT AUDITORS' REPORT
The Governance and Compensation Committee of the
Airgas, Inc. Board of Directors:
We have audited the accompanying statements of financial position of the
Airgas, Inc. 2001 Employee Stock Purchase Plan (the "Plan") as of December
31, 2003 and 2002 and the related statements of changes in participants'
equity for the years ended December 31, 2003 and 2002 and the period from
August 2, 2001 (inception) to December 31, 2001. These financial
statements are the responsibility of the Plan's administrator. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by the Plan's
administrator, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Plan as of December
31, 2003 and 2002 and the changes in participants' equity for the years
ended December 31, 2003, and 2002 and the period from August 2, 2001
(inception) to December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America.
As discussed in Note 1 to the financial statements, the Board of Directors
of Airgas, Inc., the Plan's sponsor, intends to terminate the Plan.
/s/ KPMG LLP
Philadelphia, Pennsylvania
March 10, 2004
3
AIRGAS, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL POSITION
December 31, 2003 and 2002
2003 2002
---- ----
ASSETS
Participants' payroll deductions receivable
from Airgas, Inc. $ -- $20,677
==== =======
PARTICIPANTS' EQUITY
Participants' equity $ -- $20,677
==== =======
The accompanying notes are an integral part of these financial statements.
4
AIRGAS, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN PARTICIPANTS' EQUITY
The period from
August 2, 2001
Year Ended Year Ended (inception)to
December 31,2003 December 31,2002 December 31, 2001
---------------- ---------------- -----------------
Increase (decrease) during period:
Transfer in of participants'
payroll deductions receivable
from the 1998 Employee Stock
Purchase Plan $ -- $ -- $1,338,616
Participants' contributions 6,892,302 8,651,749 --
Cost of 594,973 shares in 2003,
782,423 shares in 2002, and
121,104 shares in 2001 of
Airgas, Inc. common stock
issued to participants under
the terms of the Plan
(including $18,420 in 2003,
$26,392 in 2002 and $1,939 in
2001 of cash refunded to
employees who withdrew from the
Plan or did not enroll in the
2003 Plan) (6,634,406) (8,651,167) (1,318,521)
Transfer out of participants'
payroll deductions receivable
to the 2003 Employee Stock
Purchase Plan (278,573) -- --
----------- ------------ -----------
Net change in participants' equity (20,677) 582 20,095
Balance at beginning of period 20,677 20,095 --
----------- ------------ -----------
Balance at end of period $ -- $ 20,677 $ 20,095
=========== ============ ===========
The accompanying notes are an integral part of these financial statements.
5
AIRGAS, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF THE PLAN
The following description of the Airgas, Inc. 2001 Employee Stock Purchase
Plan (the "Plan") provides general information only. Participants should
refer to the Plan prospectus for more complete information.
General
The purpose of the Plan is to encourage and assist employees of Airgas,
Inc. and its subsidiaries (the "Company"), by giving them the opportunity
to acquire an equity interest in the Company through the purchase of shares
of the Company's common stock (the "Common Stock") at a discount.
Generally, employees may elect to have up to 15% of their annual gross
compensation (including base salary, commissions and overtime) withheld to
purchase the Company's Common Stock at 85% of its market value. The
maximum market value of shares purchased by a Plan participant in any
calendar year is limited to $25,000. Market value under the Plan is the
lesser of the closing market price of the Common Stock as of an employee's
enrollment date in the Plan or the closing market price on the quarterly
purchase date. Employees lock in a purchase price under the Plan for up to
27 months. If the closing market price of the Common Stock on the first
trading day of a calendar quarter is less than an employee's existing 27
month purchase price, the employee is considered to re-enroll in the Plan
and is granted a new 27 month purchase price.
The Plan was adopted by the Board of Directors in May 2001 and was approved
by the stockholders of the Company in August 2001. A maximum of 1,500,000
shares of Common Stock may be purchased under the Plan. From the Plan's
inception (August 2, 2001) through December 31, 2003, 1,498,500 shares were
issued under the Plan. The initial purchase of shares under the Plan
occurred on December 31, 2001 with participant payroll deductions of
$1,338,616 transferred from the Company's previous 1998 Employee Stock
Purchase Plan.
The Plan is accounted for on the accrual basis of accounting. Purchases
and sales of shares of Company Common Stock are recorded on a trade date
basis.
Termination of the Plan
During the quarter ended September 30, 2003, nearly all of the remaining
shares available under the Plan were exhausted. Consequently, the Company
is in the process of terminating the Plan. Since the number of shares
available under the Plan was less than the number of shares that
participants would otherwise be entitled to purchase, purchases by all
participants were reduced proportionately on a pro-rata basis as provided
for in the Plan prospectus. The participants' payroll deductions that
could not be applied to the purchase of shares under the Plan were credited
to the 2003 Employee Stock Purchase Plan ("the 2003 Plan"), if a plan
participant elected to enroll in the 2003 Plan. If participants did not
enroll in the 2003 Plan, their remaining payroll deductions were refunded.
The 2003 Plan was adopted by the Board of Directors in June 2003 and
approved by stockholders of the Company in July 2003. The adoption of the
2003 Plan resulted in the establishment of a new participant purchase price
based on the terms of the 2003 Plan.
6
AIRGAS, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
(2) PURCHASE AND DISTRIBUTION OF SHARES
Purchases are made by the Plan quarterly. The Common Stock is purchased as
described in note (1). Shares purchased are deposited into individual
brokerage firm accounts maintained for the participants. The Bank of New
York serves as the custodian of the participant brokerage accounts.
(3) PARTICIPANTS' PAYROLL DEDUCTIONS RECEIVABLE
At December 31, 2002, payroll deductions receivable from Airgas, Inc.
represent a receivable for participant contributions which were
individually less than the cost of one share of Common Stock and were
carried forward for use in purchasing shares on the next quarterly purchase
date.
(4) ADMINISTRATIVE EXPENSES OF THE PLAN
All administrative expenses of the Plan are paid by the Company. Any
brokerage fees for the purchase of shares on behalf of Plan participants
are paid by the Company, but brokerage fees for the resale of shares by
participants are paid by the participants.
(5) FEDERAL INCOME TAX
The Plan is intended to qualify as an "employee stock purchase plan" under
Section 421 and Section 423 of the Internal Revenue Code of 1986, as
amended. Under existing federal income tax laws, the Plan is not subject
to federal income tax. However, when any shares of stock purchased through
the Plan are sold by a participant, income taxes on any gain or loss must
be recognized by that participant.
(6) USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of participants' equity and changes therein. Actual results could
differ from those estimates.
7
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan Administrator has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
2001 EMPLOYEE STOCK PURCHASE PLAN
(Name of Plan)
BY: Governance and Compensation Committee
of the Airgas, Inc. Board of Directors
as Plan Administrator
/s/ David M. Stout
_______________________________
David M. Stout
/s/ Lee M. Thomas
_______________________________
Lee M. Thomas
/s/ Robert L. Yohe
_______________________________
Robert L. Yohe
DATED: March 23, 2004
8
EXHIBIT INDEX
Exhibit
23 Consent of KPMG LLP
9