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, 2004
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, 2004
INDEX
Report of Independent Registered Public Accounting Firm.......................3
AUDITED FINANCIAL STATEMENTS
Statements of Financial Position as of December 31, 2004 and 2003 ..........4
Statements of Changes in Participants' Equity for the year ended
December 31, 2004 and the period from July 29, 2003 (inception) to
December 31, 2003...........................................................5
Notes to Financial Statements...............................................6
SIGNATURES....................................................................8
EXHIBIT INDEX
Consent of Independent Registered Public Accounting Firm.................9
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. 2003 Employee Stock Purchase Plan (the "Plan") as of
December 31, 2004 and 2003 and the related statements of changes in
participants' equity for the year ended December 31, 2004 and for the period
July 29, 2003 (inception) to December 31, 2003. 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, 2004 and 2003 and the changes in participants' equity for the year
ended December 31, 2004 and for the period from July 29, 2003 (inception) to
December 31, 2003 in conformity with U.S. generally accepted accounting
principles.
/s/ KPMG LLP
March 16, 2005
Philadelphia, PA
3
AIRGAS, INC.
2003 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL POSITION
December 31, 2004 and 2003
2004 2003
---- ----
ASSETS
Participants' payroll deductions receivable
from Airgas, Inc. $2,656,098 $2,286,325
========== ==========
PARTICIPANTS' EQUITY
Participants' equity $2,656,098 $2,286,325
========== ==========
The accompanying notes are an integral part of these financial statements.
4
AIRGAS, INC.
2003 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN PARTICIPANTS' EQUITY
The period from
July 29, 2003
Year ended (inception) to
December 31, 2004 December 31, 2003
_________________ _________________
Increase during period:
Transfer in of participants'
payroll deductions receivable
from the 2001 Employee Stock
Purchase Plan $ -- $ 278,573
Participants' contributions 9,891,978 2,276,406
Cost of 564,304 shares in 2004
and 14,628 shares in 2003 of
Airgas, Inc. common stock
issued to participants under
the terms of the Plan
(including $9,860 in 2004 and
$40,246 in 2003 of cash
refunded to employees who
withdrew from the Plan) (9,522,205) (268,654)
----------- -----------
Net change in participants'
equity 369,773 2,286,325
Participants' equity,
balance at beginning of period 2,286,325 --
----------- -----------
Participants' equity,
balance at end of period $ 2,656,098 $ 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 Board of Directors approved an amendment to the Plan effective
October 1, 2004 that places a restriction on the sale of Common Stock purchased
through the Plan. Under this new provision, employees may sell shares
purchased with contributions made before October 1, 2004, at any time.
Employees may not sell shares purchased with contributions made on or after
October 1, 2004 until after the first trading day on the New York Stock
Exchange ("NYSE") that occurs at least 180 days after the purchase date. The
limitation on the sale will not apply if the closing price of the Common Stock
on the NYSE for five consecutive trading days after the purchase date is less
than the purchase price for those shares. Following the completion of the 180-
day period or expiration of the restriction, if earlier, shares may be sold at
any time.
At any time, the Board of Directors may amend, alter, or terminate the Plan
and/or outstanding options to purchase Common Stock under the Plan.
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. From the Plan's inception
(July 29, 2003) through December 31, 2004, 578,932 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
served as the custodian of the participant brokerage accounts through
September 30, 2004. Effective October 1, 2004, ETRADE Financial Corporate
Services assumed custodian duties over the participant brokerage accounts.
(3) Participants' Payroll Deductions Receivable
At December 31, 2004 and 2003, participants' payroll deductions receivable from
Airgas, Inc. principally represent a receivable for participant contributions,
which were subsequently collected and used to purchase shares on behalf of Plan
participants on the first business day of the next calendar year. The Plan was
initially funded on October 1, 2003 through the transfer in of participants'
payroll deductions receivable of $278,573 from the Company's previous 2001
Employee Stock Purchase Plan.
(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 qualifies 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 U.S. generally
accepted accounting principles 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 24, 2005
8
EXHIBIT INDEX
Exhibit
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23 Consent of Independent Registered Public Accounting Firm
9