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 333-107872
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
AIRGAS, INC. 2003 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.
2003 EMPLOYEE STOCK PURCHASE PLAN
ANNUAL REPORT ON FORM 11-K
December 31, 2003
INDEX
PAGE
----
Independent Auditors' Report........................................... 3
AUDITED FINANCIAL STATEMENTS
Statement of Financial Position as of December 31,2003................ 4
Statement of Changes in Participants' Equity for the period
July 29,2003 (inception) to December 31, 2003......................... 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 statement of financial position of the
Airgas, Inc. 2003 Employee Stock Purchase Plan (the "Plan") as of December
31, 2003 and the related statement of changes in participants' equity for
the period from July 29, 2003 (inception) to December 31, 2003. 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 audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit 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 audit provides 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 the changes in participants' equity for the period from July
29, 2003 (inception) to December 31, 2003, in conformity with accounting
principles generally accepted in the United States of America.
/s/ KPMG LLP
Philadelphia, Pennsylvania
March 10, 2004
3
AIRGAS, INC.
2003 EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF FINANCIAL POSITION
December 31, 2003
ASSETS
Participants' payroll deductions receivable from Airgas, Inc. $2,286,325
==========
PARTICIPANTS' EQUITY
Participants' equity $2,286,325
==========
The accompanying notes are an integral part of these financial statements.
4
AIRGAS, INC.
2003 EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY
The Period July 29, 2003 (Inception) to December 31, 2003
Increase during period:
Transfer in of participants'
payroll deductions receivable
from the 2001 Employee Stock
Purchase Plan $ 278,573
Participants' contributions 2,276,406
Cost of 14,628 shares of Airgas,
Inc. common stock issued to
participants under the terms of
the Plan (including $40,246 of
cash refunded to employees who
withdrew from the Plan) (268,654)
-------------
Net change in participants' equity 2,286,325
Balance at beginning of period --
-------------
Balance at end of period $ 2,286,325
=============
The accompanying notes are an integral part of these financial statements.
5
AIRGAS, INC.
2003 EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF THE PLAN
The following description of the Airgas, Inc. 2003 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. The quarterly purchase date is generally the first business
day of each calendar quarter. Employees lock in a purchase price under the
Plan for up to 12 months. If the closing market price of the Common Stock
on the quarterly purchase date is less than an employee's existing 12 month
purchase price, the employee is considered to re-enroll in the Plan and is
granted a new purchase price for the remainder of the 12 month period. In
addition, plan participants are automatically re-enrolled in the Plan on
the first business day of April of each year and are granted a new
enrollment purchase price.
The Plan was adopted by the Board of Directors in May 2003 and was approved
by the stockholders of the Company in July 2003. A maximum of 1,500,000
shares of Common Stock may be purchased under the Plan. Initially, the
payroll deduction receivable of $278,573 was transferred from the Company's
previous 2001 Employee Stock Purchase Plan ("the 2001 Plan") on October 1,
2003. Additionally, 14,628 shares of Airgas, Inc. Common Stock were issued
to participants and $40,246 in refunds were made to withdrawing employees
from funds collected from the transferred receivables. From the Plan's
inception (July 29, 2003) through December 31, 2003, 14,628 shares were
issued under the 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.
6
AIRGAS, INC.
2003 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, 2003, payroll deductions receivable from Airgas, Inc. of
$2,286,325 principally represent a receivable for participant contributions
for the three months ended December 31, 2003, which were subsequently
collected and the funds used to purchase shares on behalf of Plan
participants on the first business day in January 2004.
(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.
2003 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