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, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _______
Commission file number 333-60999
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Airgas, Inc. 1998 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.
1998 EMPLOYEE STOCK PURCHASE PLAN
ANNUAL REPORT ON FORM 11-K
December 31, 2001
INDEX
PAGE
Independent Auditors' Report .........................................3
AUDITED FINANCIAL STATEMENTS
Statements of Financial Position as of December 31, 2001 and 2000 ....4
Statements of Changes in Participants' Equity for the years ended
December 31, 2001, 2000 and 1999 .....................................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. 1998 Employee Stock Purchase Plan (the "Plan") as of December
31, 2001 and 2000 and the related statements of changes in participants'
equity for the years ended December 31, 2001, 2000 and 1999. 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 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 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, 2001 and 2000 and the changes in its participants' equity for the years
ended December 31, 2001, 2000 and 1999, in conformity with accounting
principles generally accepted in the United States of America.
/s/ KPMG LLP
Philadelphia, Pennsylvania
March 15, 2002
3
AIRGAS, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL POSITION
December 31, 2001 and 2000
2001 2000
-------- --------
ASSETS
Participants' payroll deductions receivable
from Airgas, Inc. $ -- $42,874
======= =======
PARTICIPANTS' EQUITY
Participants' Equity $ -- $42,874
======= =======
The accompanying notes are an integral part of these financial statements.
4
AIRGAS, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN PARTICIPANTS' EQUITY
Year ended Year ended Year Ended
December 31, December 31, December 31,
2001 2000 1999
----------- ----------- -----------
Increase (decrease) during period:
Participants' payroll deductions $6,945,432 $5,682,435 $5,562,815
Cost of 1,117,786 shares in 2001,
1,071,096 shares in 2000 and
808,642 shares in 1999 of common
stock of Airgas, Inc. issued to
participants under the terms of
the Plan (including $21,666 in
2001, $26,112 in 2000 and $41,129
in 1999 of cash refunded to
employees who withdrew from
the Plan) (5,649,690) (5,670,515) (5,797,124)
Transfer out of participants'
payroll deductions to the 2001
Employee Stock Purchase Plan (1,338,616) -- --
---------- ---------- ----------
Net change in participants' equity (42,874) 11,920 (234,309)
Balance at beginning of period 42,874 30,954 265,263
---------- ---------- ----------
Balance at end of year $ -- $ 42,874 $ 30,954
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
5
AIRGAS, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
(1) Description of the Plan
The following description of the Airgas, Inc. 1998 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 1998 and was approved
by the stockholders of the Company in August 1998. A maximum of three
million (3,000,000) shares of Common Stock may be purchased under the Plan.
From the Plan's inception (August 5, 1998) through December 31, 2001,
2,997,524 shares were issued under the Plan. During 2002, the Company
intends to deregister the remaining 2,476 shares and terminate 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.
Limitation of Plan Shares
During the quarter ended December 31, 2001, the Plan exhausted
substantially all of the remaining shares available under 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. Funds that could not be applied to
the purchase of shares under the Plan were credited to the 2001 Employee
Stock Purchase Plan (the "2001 Plan"). The 2001 Plan was adopted by the
Board of Directors in May 2001 and approved by the stockholders of the
Company in August 2001. The adoption of the 2001 Plan resulted in the
establishment of a new participant purchase price based on the terms of the
2001 Plan.
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AIRGAS, INC.
1998 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.
During the fourth quarter of 2001, the Company changed the firm that serves
as the custodian of the participant brokerage accounts from Charles Schwab
& Co., Inc. to The Bank of New York.
(3) Participants' Payroll Deductions
During the quarter ended December 31, 2001, the Plan did not have a
sufficient number of shares remaining for the quarterly purchase on behalf
of Plan participants. Due to the share limitation, shares were purchased
for Plan participant accounts on a pro-rata basis as provided for in the
Plan prospectus. Excess participant payroll deductions totaling $1,338,616
were transferred to the newly established 2001 Plan for the purchase of
shares at a new participant purchase price.
At December 31, 2000, participants' payroll deductions receivable from
Airgas, Inc. represents 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.
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.
1998 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 27, 2002
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EXHIBIT INDEX
Exhibit
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23 Consent of KPMG LLP
9