e11vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
| |
|
|
| þ |
|
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2008
OR
| |
|
|
| o |
|
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 333-136463
A. Full title of the plan and the address of the plan, if different from that of the issuer named
below:
Airgas, Inc. Deferred Compensation Plan II
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.
DEFERRED COMPENSATION PLAN II
ANNUAL REPORT ON FORM 11-K
December 31, 2008
INDEX
| |
|
|
|
|
| |
|
PAGE |
|
|
|
|
3 |
|
|
|
|
|
|
AUDITED FINANCIAL STATEMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
5 |
|
|
|
|
|
|
|
|
|
6 |
|
|
|
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
Consent of Independent Registered Public Accounting Firm |
|
|
|
|
2
Report of Independent Registered Public Accounting Firm
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. Deferred
Compensation Plan II (the “Plan”) as of December 31,
2008 and 2007, and the related statements of
changes in plan equity for the years ended December 31, 2008 and 2007 and for the period July 1,
2006 (Inception) through December 31, 2006. These financial statements are the responsibility of
the Plan’s management. Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). 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 management, 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, 2008 and 2007, and the changes in
plan equity for the years ended December 31, 2008 and 2007 and for the period July 1, 2006
(Inception) through December 31, 2006 in conformity with U.S. generally accepted accounting
principles.
/s/ KPMG LLP
Philadelphia,
Pennsylvania
March 31, 2009
3
AIRGAS, INC.
DEFERRED COMPENSATION PLAN II
STATEMENTS OF FINANCIAL POSITION
DECEMBER 31, 2008 and 2007
| |
|
|
|
|
|
|
|
|
| |
|
2008 |
|
|
2007 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivable from Airgas, Inc. |
|
$ |
2,845,118 |
|
|
$ |
1,607,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PLAN EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Equity |
|
$ |
2,845,118 |
|
|
$ |
1,607,079 |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
4
AIRGAS, INC.
DEFERRED COMPENSATION PLAN II
STATEMENTS OF CHANGES IN PLAN EQUITY
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
The period July 1, 2006 |
|
| |
|
Year ended |
|
|
Year ended |
|
|
(Inception) through |
|
| |
|
December 31, 2008 |
|
|
December 31, 2007 |
|
|
December 31, 2006 |
|
Additions to plan equity attributed to: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment income (loss) from notional investments: |
|
|
|
|
|
|
|
|
|
|
|
|
Net appreciation (depreciation) in fair value of investments |
|
$ |
(744,848 |
) |
|
$ |
13,804 |
|
|
$ |
9,784 |
|
Dividends and realized gains (losses) |
|
|
(53,821 |
) |
|
|
29,232 |
|
|
|
3,406 |
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) |
|
|
(798,669 |
) |
|
|
43,036 |
|
|
|
13,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant contributions to notional investments |
|
|
2,073,618 |
|
|
|
1,218,120 |
|
|
|
332,733 |
|
Participant distributions from notional investments |
|
|
(36,910 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in plan equity |
|
|
1,238,039 |
|
|
|
1,261,156 |
|
|
|
345,923 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan equity at beginning of period |
|
|
1,607,079 |
|
|
|
345,923 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan equity at end of period |
|
$ |
2,845,118 |
|
|
$ |
1,607,079 |
|
|
$ |
345,923 |
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
5
AIRGAS, INC.
DEFERRED COMPENSATION PLAN II
NOTES TO FINANCIAL STATEMENTS
(1) Description of the Plan
The following description of the Airgas, Inc. Deferred Compensation Plan II (the “Plan”)
provides general information only. Participants should refer to the Plan prospectus for more
complete information.
General
On May 23, 2006, the Board of Directors of Airgas, Inc. approved the Airgas, Inc. Deferred
Compensation Plan II, effective July 1, 2006. The purpose of the Plan is to permit non-employee
directors and a select group of highly compensated employees of Airgas, Inc. and its
subsidiaries (the “Company”) to defer the receipt of compensation that would otherwise become
payable to them. It is intended that the Plan, by providing this deferral opportunity, will
assist the Company in retaining and attracting individuals of exceptional ability by providing
them with this benefit.
The Governance and Compensation Committee (the “Committee”) of the Company’s Board of Directors
serves as the Plan Administrator. At its sole discretion, the Committee may, at any time,
partially or completely terminate the Plan.
Participation and Deferrals
Plan participation is limited to non-employee directors and those key employees who are
designated by the Committee as eligible to participate in the Plan. The Plan permits the
deferral of up to 75% of the participant’s salary, and up to 100% of the participant’s bonus or
director’s fee. Participant deferrals are credited to a book account and are deemed invested in
notional valuation funds selected by the participant from a family of funds under the Plan, one
of which tracks the Company’s common stock. Investment gains and losses are credited or charged
to a participant’s account based on earnings or losses in the selected valuation funds.
Participant deferrals and net investment gains or losses that are credited or charged to a
participant’s account are fully vested. However, participant deferrals are not protected from
investment risk.
Distributions
Amounts credited to a participant’s account will be payable upon the earlier of a Specified Date
(as defined below), or the participant’s separation from service (either as an employee or as a
non-employee director). Separation from service means a participant’s termination of employment
or service as a non-employee director with the Company, including the death of a participant. A
participant may elect, at the beginning of each calendar year, to designate a distribution date
(a “Specified Date”) with respect to his or her deferrals for such plan year. The Specified
Date must be no earlier than during the third year following the year in which the deferrals
designated for distribution were credited to the participant’s account. A participant may
choose benefit payments in either a lump sum or annual, monthly or quarterly installments for
between two and 15 years. A participant may change the timing of his or her distributions.
However, the change must be made 12 months prior to the date the distribution was to begin and
the added period of deferral must be at least five years later than the date the deferral was to
be distributed. Distributions to participants are payable in cash.
6
AIRGAS, INC.
DEFERRED COMPENSATION PLAN II
NOTES TO FINANCIAL STATEMENTS (continued)
A participant who suffers a severe financial hardship due to an unforeseeable emergency may
request a hardship withdrawal from the Plan. The Committee has complete discretion to determine
whether to permit any such hardship withdrawal. The amount of any hardship withdrawal may not
exceed the amount that the Committee determines to be necessary to alleviate the hardship (plus
an amount necessary to pay any taxes applicable to the distribution).
Trust
The Plan is an unfunded plan. The obligation to make benefit payments under the Plan is solely
an obligation of the Company. However, the Company may establish one or more trusts to assist
in the payment of benefits. The Company has established a trust (the “Trust”) for the Plan, in
which the Vanguard Fiduciary Trust Company (“Vanguard”) serves as the trustee. Although the
Company maintains the Trust to accumulate certain assets to assist the Company in meeting its
obligations under the Plan, the Plan has no investments of its own. The sole asset of the Plan
is a receivable from the Company in an amount equal to the value of all participants’ accounts.
Plan participants are considered to be unsecured creditors, with no secured or preferential
rights to any assets of the Company. Assets held by the Trust are available to the Company’s
general creditors in the event of insolvency of the Company.
As of December 31, 2008, the Trust assets were primarily invested in various mutual funds of
Vanguard and shares of common stock of Airgas, Inc. All investments of the Trust are carried at
market value. The weighted average cost of specific investments sold by the Trust is used to
compute realized gains and losses.
(2) Summary of Accounting Policies
Basis of Accounting
The accompanying financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires Plan management to make estimates and assumptions that affect the reported
amounts of assets and changes in Plan equity. Actual results could differ from those estimates.
Receivable from the Company
The Plan is unfunded with benefits paid solely out of the general assets of the Company. The
Plan records a receivable from the Company equal to the sum of all participants’ account
balances.
7
AIRGAS, INC.
DEFERRED COMPENSATION PLAN II
NOTES TO FINANCIAL STATEMENTS (continued)
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.
Risk and Uncertainties
The amount of the Plan’s receivable from Airgas, Inc. is based on the performance of the
notional investment securities, which consist of the Vanguard mutual funds and Airgas, Inc.
common stock. Investment securities are exposed to various risks such as interest rate, market
and credit risks. Due to the level of risk associated with certain investment securities, it is
at least reasonably possible that changes in the values of investment securities will occur in
the near term and that such changes could materially affect participants’ account balances and
the amounts reported in the financial statements.
During the fiscal year ended December 31, 2008, the assets in the Trust were affected by
sustained volatility in global financial markets, resulting from the continuing credit crisis in
the United States which spread throughout the global financial markets and evolved into a global
financial crisis. Global markets have experienced unprecedented volatility. The value of
equities globally declined significantly during the fiscal year ended December 31, 2008 and
continuing into 2009.
(3) Federal Income Tax
The Plan is established as an unfunded deferred compensation plan under the Internal Revenue
Code. Accordingly, a participant will not incur federal income tax liability when the
compensation is deferred pursuant to the Plan, notional investment gains or losses are credited
or charged to a participant’s account, or dividends are credited to a participant’s account.
Rather, a participant will incur federal income tax liability for such contributions and income
only when distributions are made to a participant.
The Plan is not qualified under Section 401(a) of the Internal Revenue Code and is not subject
to the provisions of the Employee Retirement Income Security Act of 1974.
8
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.
| |
|
|
|
|
|
|
| |
|
AIRGAS, INC. DEFERRED COMPENSATION PLAN II |
|
|
|
|
|
|
(Name of Plan) |
|
|
|
|
|
|
|
|
|
|
|
BY:
|
|
Governance and Compensation Committee
of the Airgas, Inc. Board of Directors
as Plan Administrator |
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Richard C. Ill
Richard C. Ill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ David M. Stout
David M. Stout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Lee M. Thomas
Lee M. Thomas
|
|
|
DATED: March 31, 2009
9
EXHIBIT INDEX
Exhibit
| 23 |
|
Consent of Independent Registered Public Accounting Firm |
10