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, 2002
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
1
AIRGAS, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
ANNUAL REPORT ON FORM 11-K
December 31, 2002
INDEX
PAGE
----
Independent Auditors' Report.......................................... 3
AUDITED FINANCIAL STATEMENTS
Statements of Financial Position as of December 31, 2002 and 2001..... 4
Statements of Changes in Participants' Equity for the year ended
December 31, 2002, and the period August 2, 2001 (inception) to
December 31, 2001..................................................... 5
Notes to Financial Statements......................................... 6
SIGNATURES............................................................. 8
EXHIBIT INDEX
Consent of Independent Auditors ...................................... 9
2
INDEPENDENT AUDITORS' REPORT
To 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, 2002 and 2001 and the related statements of changes in participants'
equity for the year ended December 31, 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, 2002 and the changes in participants' equity for the year then ended
and the financial position as of December 31, 2001 and the changes in its
participants' equity for the period from August 2, 2001 (inception) to
December 31, 2001, in conformity with accounting principles generally
accepted in the United States of America.
/s/ KPMG LLP
Philadelphia, Pennsylvania
March 14, 2003
3
AIRGAS, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL POSITION
December 31, 2002 and 2001
2002 2001
---- ----
ASSETS
Participants' payroll deductions receivable
from Airgas, Inc. $20,677 $20,095
======= =======
PARTICIPANTS' EQUITY
Participants' Equity $20,677 $20,095
======= =======
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 (inception) to
December 31, 2002 December 31, 2001
----------------- -----------------
Increase during period:
Participants' Contributions $8,651,749 $ --
Transfer in of participants'
payroll deductions from the 1998 -- 1,338,616
Employee Stock Purchase Plan
Cost of 782,423 shares in 2002,
and 121,104 shares in 2001 of
common stock of Airgas, Inc.
issued to participants under the
terms of the Plan (including
$26,392 in 2002, and $1,939 in
2001 of cash refunded to employees
who withdrew from the Plan) (8,651,167) (1,318,521)
----------- -----------
Net change in participants' equity 582 20,095
Balance at beginning of period 20,095 --
----------- -----------
Balance at end of year $ 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 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 at a discount. Generally, employees may
elect to have up to 15 percent of their annual gross compensation
(including base salary, commissions and overtime) withheld to purchase the
Company's Common Stock at 85 percent 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, 2002, 903,527 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.
Limitation of Plan Shares
As of December 31, 2002, the Plan had 596,473 shares remaining for purchase
by plan participants. It is anticipated that participants will purchase
the remaining shares under the Plan during calendar 2003. If the number of
shares available under the Plan is less than the number of shares that
participants would otherwise be entitled to purchase, purchases by all
participants shall be reduced proportionately. Any funds that cannot be
applied to the purchase of shares shall be refunded to participants or
credited to a successor employee stock purchase plan. The adoption of a
successor employee stock purchase plan is subject to approval by the
Company's Board of Directors and by the Company's stockholders. The
adoption of a successor employee stock purchase plan would result in the
establishment of a new participant purchase price based on the terms of the
successor 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
At December 31, 2002 and 2001 payroll deductions receivable from Airgas,
Inc. represent deductions 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 28, 2003
8
EXHIBIT INDEX
Exhibit
23 Consent of KPMG LLP
9