<PAGE> 1
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, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _______
Commission file number 33-64114
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Airgas, Inc. 1994 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
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AIRGAS, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
ANNUAL REPORT ON FORM 11-K
December 31, 1998
INDEX
PAGE
Report of Independent Auditors .......................................3
AUDITED FINANCIAL STATEMENTS
Statements of Financial Position as of December 31, 1998 and 1997.....4
Statements of Changes in Participant's Equity for the years ended
December 31, 1998, 1997 and 1996 .................................5
Notes to Financial Statements ........................................6
SIGNATURES.............................................................8
EXHIBIT INDEX
Consent of Independent Auditors ......................................9
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INDEPENDENT AUDITORS' REPORT
To the Nominating and Compensation Committee of the
Airgas, Inc. Board of Directors:
We have audited the accompanying statements of financial position of the
Airgas, Inc. 1994 Employee Stock Purchase Plan (the "Plan") as of December
31, 1998 and 1997 and the related statements of changes in participants'
equity for each of the years in the three-year period ended December 31,
1998. 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 generally accepted auditing
standards. 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, 1998 and 1997 and the changes in its participants' equity for each of
the years in the three-year period ended December 31, 1998, in conformity
with generally accepted accounting principles.
KPMG LLP
Philadelphia, Pennsylvania
March 19, 1999
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<TABLE>
AIRGAS, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL POSITION
December 31, 1998 and 1997
<CAPTION>
1998 1997
<S> <C> <C>
ASSETS
Participants' payroll deductions receivable from Airgas, Inc. $ -- $18,150
PARTICIPANTS' EQUITY
Participants' Equity $ -- $18,150
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
AIRGAS, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN PARTICIPANTS' EQUITY
Years Ended December 31, 1998, 1997 and 1996
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Increase (decrease) during year:
Participants' payroll deductions $5,742,430 $5,931,313 $4,659,538
Cost of 541,225 shares in 1998, 438,709 shares in 1997,
and 389,494 in 1996 of common stock of Airgas, Inc.
issued to participants under the terms of the Plan
(including $21,374 in 1998, $15,130 in 1997, and
$2,518 in 1996 in cash distributed for fractional
shares) (5,760,580) (5,934,076) (4,656,907)
Net change in participants' equity (18,150) (2,763) 2,631
Balance at beginning of year 18,150 20,913 18,282
Balance at end of year $ -- $ 18,150 $ 20,913
The accompanying notes are an integral part of these financial statements.
</TABLE>
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AIRGAS, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998, 1997 and 1996
(1) Description of the Plan
The following description of the Airgas, Inc. 1994 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% of their annual gross compensation (including base
salary, commissions and over-time) withheld to purchase the Company's
Common Stock at 85 to 95 percent of the market value of the Common Stock,
depending on base salary levels. Market value under the Plan is either the
closing market price of the Common Stock as of the employees' enrollment
date in the Plan or the closing market price on the quarterly purchase
date, whichever is lower. Employees lock-in a purchase price under the
Plan for up to 27 months. The Plan was adopted by the Board of Directors
in May 1993 and was submitted for approval by the stockholders of the
Company in July 1993. A maximum of two million (2,000,000) shares of
Common Stock may be purchased under the Plan. From inception to December
31, 1998, 1,998,632 shares have been issued under the Plan. During 1999,
the Company intends to deregister the remaining shares and terminate the
Plan. As described in Note 3, based on the limitation of shares remaining
under the Plan, a portion of participants' payroll deductions was retained
by the Company for contribution to the 1998 Employee Stock Purchase Plan
(the "1998 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.
(2) Purchase and Distribution of Shares
Purchases are made by the Plan quarterly, and the shares purchased are
deposited into individual brokerage firm accounts maintained for the
participants. The Common Stock is purchased at a price equal to the lower
of: the closing price of the Common Stock on the New York Stock Exchange on
the participant's enrollment date, multiplied by the discount percentage;
or the closing price of the Common Stock on the New York Stock Exchange on
the purchase date, multiplied by the discount percentage.
(3) Participants' Payroll Deductions
At December 31, 1998, 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. A
total of $265,263 of participants' payroll deductions between October 1,
1998 and December 31, 1998 were in excess of shares available under the
Plan. The Plan Participants authorized the contribution of the excess
payroll deductions to the 1998 Plan for use in purchasing shares on the
1998 Plan's first quarterly purchase date in March 1999. The 1998 Plan was
adopted by the Board of Directors in May 1998 and approved by the
stockholders of the Company in August 1998.
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AIRGAS, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
For the years ended December 31, 1997 and 1996, participants' payroll
deductions receivable from Airgas, Inc. represents deductions which were
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. When any shares of stock are sold by a participant,
any gain or loss must be recognized by that participant.
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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.
1994 EMPLOYEE STOCK PURCHASE PLAN
(Name of Plan)
BY: Nominating and Compensation Committee
of the Airgas, Inc. Board of Directors
as Plan Administrator
/s/ W. Thacher Brown
_______________________________
W. Thacher Brown
/s/ Robert E. Naylor, Jr.
_______________________________
Robert E. Naylor, Jr.
/s/ Rajiv L. Gupta
_______________________________
Rajiv L. Gupta
/s/ Robert L. Yohe
_______________________________
Robert L. Yohe
DATED: March 29, 1999
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EXHIBIT INDEX
Exhibit
23 Consent of KPMG LLP
EXHIBIT 23
Consent of Independent Auditors
The Board of Directors
Airgas, Inc.
We consent to incorporation by reference in the registration statement (No.
33-64114) on Form S-8 of Airgas, Inc. of our report dated March 19, 1999
relating to the statements of financial position of the Airgas, Inc. 1994
Employee Stock Purchase Plan as of December 31, 1998 and 1997, and the
related statement of changes in participants' equity for each of the years
in the three-year period ended December 31, 1998 which report is included
in the December 31, 1998 Annual Report on Form 11-K of the Airgas, Inc.
1994 Employee Stock Purchase Plan.
KPMG LLP
Philadelphia, Pennsylvania
March 25, 1999
