<PAGE>
As filed with the Securities and Exchange Commission on July 29, 1997
Registration No. 333- __________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ATMOS ENERGY CORPORATION
(Exact name of Registrant as specified in its charter)
TEXAS 75-1743247
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1800 Three Lincoln Centre
5430 LBJ Freeway
Dallas, Texas
(Address of principal executive offices) 75240
(Zip Code)
ATMOS ENERGY CORPORATION
LONG-TERM STOCK PLAN FOR THE
UNITED CITIES GAS COMPANY DIVISION
(Full Title of Plan)
Copies to:
GLEN A. BLANSCET BRYAN E. BISHOP
Vice President, General Counsel Locke Purnell Rain Harrell
and Corporate Secretary (A Professional Corporation)
Atmos Energy Corporation 2200 Ross Avenue, Suite 2200
1800 Three Lincoln Centre Dallas, Texas 75201
5430 LBJ Freeway
Dallas, Texas 75240
(Name and address of agent for service)
(972) 934-9227
(Telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered (a) per share (b) offering price (b) registration fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value... 250,000 $24.34375 $6,085,938 $1,845
================================================================================================================
</TABLE>
(a) Includes such additional shares as may be issued as a result of the
antidilution provisions of the Plan, pursuant to Rule 416 promulgated under
the Securities Act of 1933.
(b) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 (h) on the basis of the average of the high and low
prices of the Registrant's Common Stock as reported on the New York Stock
Exchange on July 25, 1997.
<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The information specified by Item 1 and Item 2 of Part I of Form S-8 is
omitted from this filing in accordance with the provisions of Rule 428 under the
Securities Act of 1933 (the "Securities Act"), and the introductory note of Part
I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents filed by the Registrant with the Securities and
Exchange Commission (the "Commission") are incorporated by reference in this
Registration Statement:
(a) Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1996;
(b) Registrant's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1996 and March 31, 1997;
(c) Registrant's Current Reports on Form 8-K dated November 2, 1996,
November 16, 1996, February 17, 1997, March 17, 1997, April 4, 1997
and July 17, 1997; and
(d) The description of Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A dated September 7,
1988 (Commission File No.1-10042) filed pursuant to Section 12 of the
Securities Exchange Act of 1934 (the "Exchange Act"), and all
amendments thereto and reports which have been filed for the purpose
of updating such description, including, without limitation, the
Registrant's Current Report on Form 8-K dated November 16, 1996.
All documents filed by Registrant pursuant to Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act subsequent to the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
-------------------------
Not applicable.
2
<PAGE>
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
The validity of the shares of Registrant's Common Stock offered hereby has
been passed upon for Registrant by the law firm of Locke Purnell Rain Harrell (A
Professional Corporation), Dallas, Texas. Dan Busbee, a director of Registrant,
is a shareholder of Locke Purnell Rain Harrell (A Professional Corporation).
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Both the Texas Business Corporation Act and the Virginia Stock Corporation
Act permit, and in some cases, require corporations to indemnify directors and
officers who are or have been a party or are threatened to be made a party to
litigation against judgments, penalties (including excise and similar taxes),
fines, settlements, and reasonable expenses under certain circumstances. Article
IX of Registrant's Restated Articles of Incorporation and Article IX of
Registrant's Bylaws provide for indemnification of judgments, penalties
(including excise and similar taxes), fines, settlements, and reasonable
expenses and the advance payment or reimbursement of such reasonable expenses to
directors and officers to the fullest extent permitted by law.
The Texas Business Corporation Act also allows corporations, with the
approval of its shareholders, to limit the liability of directors for monetary
damages under certain circumstances. Article X of Registrant's Restated
Articles of Incorporation provides for such limitation of liability to the
fullest extent permitted by law.
Registrant maintains an officers' and directors' liability insurance policy
insuring officers and directors against certain liabilities, including
liabilities under the Securities Act. The effect of such policy is to indemnify
the officers and directors of Registrant against losses incurred by them while
acting in such capacities.
Item 7. Exemption From Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
---------
The exhibits listed in the accompanying Index to Exhibits are furnished as
a part of this Registration Statement.
Item 9. Undertakings.
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
3
<PAGE>
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the
most recent post-effective amendment hereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by Registrant pursuant to Section
13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses incurred or paid
by a director, officer, or controlling
4
<PAGE>
person of Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
5
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on July 29, 1997.
ATMOS ENERGY CORPORATION
By: /s/ ROBERT W. BEST
-----------------------------------------
Robert W. Best
Chairman, President and CEO
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby constitutes and appoints Robert W. Best his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place, and stead, in any and all capacities, to sign
any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto, and all
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ ROBERT W. BEST Chairman, President and CEO
- -------------------------- (Principal Executive Officer) July 29, 1997
Robert W. Best
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C>
/s/ LARRY J. DAGLEY Executive Vice President July 29, 1997
- -------------------------- (Principal Financial Officer)
Larry J. Dagley
/s/ DAVID L. BICKERSTAFF Vice President and Corporate July 29, 1997
- -------------------------- Controller
David L. Bickerstaff (Principal Accounting Officer)
/s/ TRAVIS W. BAIN II Director July 29, 1997
- --------------------------
Travis W. Bain II
/s/ DAN BUSBEE Director July 29, 1997
- --------------------------
Dan Busbee
/s/ THOMAS C. MEREDITH Director July 29, 1997
- --------------------------
Thomas C. Meredith
/s/ PHILLIP E. NICHOL Director July 29, 1997
- --------------------------
Phillip E. Nichol
/s/ CARL S. QUINN Director July 29, 1997
- --------------------------
Carl S. Quinn
/s/ LEE E. SCHLESSMAN Director July 25, 1997
- --------------------------
Lee E. Schlessman
/s/ CHARLES K. VAUGHAN Director July 29, 1997
- --------------------------
Charles K. Vaughan
/s/ RICHARD WARE II Director July 23, 1997
- --------------------------
Richard Ware II
</TABLE>
7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
------- ----------- ----
NUMBER NUMBER
------ ------
<S> <C> <C>
4.1 Specimen Common Stock Certificate (Atmos
Energy Corporation) (incorporated by
reference from Exhibit 4(b) of
Registrant's Annual Report on Form 10-K
(File No. 1-10042) for the fiscal year
ended September 30, 1988).
4.2(a) Rights Agreement, dated as of April 27,
1988, between Registrant and The First
National Bank of Boston (successor trustee
to Morgan Shareholder Services Trust
Company) (incorporated by reference from
Exhibit 1 of Registrant's Form 8-K (File
No. 0-11249) filed May 10, 1988).
4.2.(b) Amendment No. 1 to Rights Agreement, dated
August 10, 1994 (incorporated by reference
from Exhibit 4.3(b) of Registrant's Annual
Report on Form 10-K for the fiscal year
ended September 30, 1994 (File No.
1-10042)).
4.2(c) Certificate of Adjusted Price, dated
August 15, 1994 (incorporated by reference
from Exhibit 4.3(c) of Registrant's Annual
Report on Form 10-K (File No. 10042) for
the fiscal year ended September 30, 1994).
5.1 Opinion of Locke Purnell Rain Harrell.
23.1 Consent of Locke Purnell Rain Harrell
(included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included on the
signature page of this Registration
Statement).
99.1 Atmos Energy Corporation Long-Term Stock
Plan for the United Cities Gas Company
Division.
99.2 Form of Cumulative Award Agreement.
</TABLE>
8
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF LOCKE PURNELL RAIN HARRELL]
July 29, 1997
Atmos Energy Corporation
1800 Three Lincoln Centre
5430 LBJ Freeway
Dallas, TX 75240
Re: Registration Statement on Form S-8,
Atmos Energy Corporation Long-Term Stock Plan
for the United Cities Gas Company Division
Gentlemen:
We have acted as special counsel for Atmos Energy Corporation, a Texas
Corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement on Form S-8 (the "Registration Statement"), of 250,000
shares of common stock, no par value, of the Company (the "Common Stock") to be
offered pursuant to the Atmos Energy Corporation Long-Term Stock Plan for the
United Cities Gas Company Division (the "Plan").
Based upon our examination of such papers and documents and the
investigation of such matters of law as we have deemed relevant or necessary in
rendering this opinion, we hereby advise you that we are of the opinion that:
1. The Company is duly incorporated, validly existing and in good standing
under the laws of the State of Texas.
2. Assuming, with respect to shares of Common Stock issued after the date
hereof, (i) the receipt of proper consideration for the issuance thereof, (ii)
the availability of a sufficient number of shares of Common Stock authorized by
the Company's Restated Articles of Incorporation then in effect, (iii)
compliance with the terms of any agreement entered into in connection with
awards under the Plan and (iv) no change occurs in the applicable law or the
pertinent facts, the shares of Common Stock issuable under any award under the
Plan will be duly authorized and validly issued, fully paid and non-assessable
shares of Common Stock.
<PAGE>
We consent to the use of our name in the Registration Statement filed by
the Company with the Securities and Exchange Commission for the registration
under the Securities Act of 250,000 shares of Common Stock of the Company in
connection with the Plan and to the filing of a copy of this opinion as Exhibit
5.1 to the Registration Statement. In giving such consent, we do not hereby
admit that we are within the category of persons whose consent is required by
Section 7 of the Securities Act or the related rules promulgated by the
Securities and Exchange Commission.
Very truly yours,
LOCKE PURNELL RAIN HARRELL
(A Professional Corporation)
By: /s/ BRYAN E. BISHOP
------------------------------------------
Bryan E. Bishop
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITOR
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of Atmos Energy Corporation for the registration of 250,000 shares of its
common stock of our report dated November 4, 1996 with respect to the
consolidated financial statements of Atmos Energy Corporation included in its
Annual Report on Form 10-K for the year ended September 30, 1996, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Dallas, Texas
July 29, 1997
<PAGE>
EXHIBIT 99.1
ATMOS ENERGY CORPORATION
LONG-TERM STOCK PLAN FOR THE
UNITED CITIES GAS COMPANY DIVISION
WHEREAS, the Board of Directors of United Cities Gas Company, an Illinois
and Virginia corporation ("United Cities"), duly established the United Cities
Long-Term Stock Plan of 1989 (the "United Cities Plan"); and
WHEREAS, on April 28, 1989, a majority of the shareholders of United Cities
approved the establishment of the United Cities Plan; and
WHEREAS, on July 19, 1996, Atmos Energy Corporation (the "Company") and
United Cities entered into that certain Agreement and Plan of Reorganization,
which was amended on October 3, 1996 by Amendment No. 1 to the Agreement and
Plan of Reorganization (collectively, the "Agreement") , pursuant to which
United Cities was merged with and into the Company on July 31, 1997 (the
"Merger"); and
WHEREAS, pursuant to Section 4.9 of the Agreement, the Company agreed to
continue in effect the United Cities Plan, following the consummation of the
Merger; and
WHEREAS, the Board of Directors of the Company approved the adoption of the
United Cities Plan and the assumption of all outstanding rights previously
granted to each participant thereunder through its approval of the Agreement;
and
WHEREAS, a majority of the shareholders of the Company approved the
adoption of the United Cities Plan through their approval of the Merger, the
Agreement and the related Plan of Merger on November 12, 1996; and
WHEREAS, in compliance with Section 4.9 of the Agreement, the United Cities
Plan has been amended and restated as the Atmos Energy Corporation Long-Term
Stock Plan for the United Cities Gas Company Division (the "Plan"); and
WHEREAS, although it may do so, the Company does not contemplate granting
or awarding any further Incentive Stock Options, Nonqualified Stock Options,
Restricted Stock or Stock Appreciation Rights or any combination thereof under
the Plan, but only to allow all outstanding grants originally awarded under the
United Cities Plan to be exercised, pursuant to which the holders will receive
shares of Stock (as defined below) in lieu of shares of United Cities common
stock.
1. Purpose
-------
The purposes of the Plan are to:
a. Provide incentives to Key Employees (as defined below) to perform in
the best interests of the shareholders of the Company and its
customers.
<PAGE>
b. Encourage Key Employees to increase their proprietary interest in the
Company and thereby increase their interest in the success of the
Company and its shareholders.
c. Provide a means of retaining a high quality of employees and
strengthen their desire to remain in the employ of the Company.
To meet these purposes, the Plan provides for the granting of Incentive
Stock Options, Nonqualified Stock Options, Restricted Stock and Stock
Appreciation Rights or any combination thereof.
2. Definitions
-----------
The following definitions shall be applicable throughout the Plan:
a. Award" means a grant provided to any Key Employee in accordance with
the provisions of the Plan in the form of Incentive Stock Options,
Nonqualified Stock Options, Restricted Stock or Stock Appreciation
Rights (as such terms are defined below) or any combination thereof.
b. "Award Agreement" means the written agreement evidencing each Award
granted by the Company to a Key Employee under the Plan.
c. "Board" means the Board of Directors of the Company.
d. "Change of Control" means the occurrence of an event defined in
Section 10 hereof.
e. "Code" means the Internal Revenue Code of 1986, as amended.
f. "Committee" means the Human Resources Committee of the Board or any
such other committee as may be designated by the Board to administer
the Plan, the membership of such committee not being less than three
members of the Board, all of whom are "non-employee directors" as
defined under Rule 16b-3 of the Exchange Act.
g. "Date of Grant" with respect to any Award means the actual date that
the grant of such Award under the Plan is approved by the Committee.
h. "Disability" means total disability as defined in Section 422 of the
Code and the rules and regulations promulgated thereunder.
i. "Exchange Act" means the Securities Exchange Act of 1934.
2
<PAGE>
j. "Fair Market Value" means, as of any date, the closing price for one
share of Stock (as defined below) on such date, or if such date is
not a trading day, for the trading day immediately prior to such date,
in either case where the closing price shall be the last quoted price,
or, if not so quoted, the closing price as reported on the New York
Stock Exchange Composite Tape.
k. "Incentive Stock Option" means an incentive stock option within the
meaning of Section 422 of the Code.
l. "Key Employee" means an employee of the Company who is a former United
Cities employee, including any former United Cities director who was
also an employee of United Cities, who was deemed, in the judgment of
the Board of Directors of United Cities, or a committee appointed by
it, to be a "key employee".
m. "Nonqualified Stock Option" means any stock option other than an
Incentive Stock Option.
n. "Options" means collectively each Incentive Stock Option and
Nonqualified Stock Option awarded under the Plan.
o. "Restricted Stock" means Stock (as defined below) awarded under
Section 8 hereof.
p. "Retirement" means normal or early retirement from the Company as
defined in United Cities' principal retirement plan in effect at July
31, 1997.
q. "Securities Act" means the Securities Act of 1933.
r. "Stock" means the common stock, no par value, of the Company.
s. "Stock Appreciation Right" or "SAR" means a stock appreciation right
awarded under Section 9 hereof.
t. "Subsidiary" means any corporation in which the Company, or any
Subsidiary thereof, owns, directly or indirectly, capital stock having
a voting power equal to 50% or more of the total combined voting power
of all capital stock of such corporation and which is designated by
the Board to participate in the Plan.
3
<PAGE>
3. Administration
--------------
The Plan shall be administered by the Committee. No member of the
Committee shall be eligible to receive an Award under the Plan. Subject to
the provisions of the Plan, the Committee shall have exclusive power to:
a. Select employees to participate in the Plan.
b. Determine the amount, duration and type of Awards to be made.
c. Determine the times(s) when Awards will be made and the terms and
conditions to which Awards may be subject.
The Committee shall have full power, discretion and authority to
interpret, construe and administer the Plan. The Committee's decisions
regarding Awards need not be uniform and may be made selectively among Key
Employees. The Committee's interpretation of the Plan and any Awards
granted under the Plan and all decisions and determinations by the
Committee with respect to the Plan shall be final, binding and conclusive
on all parties. The Committee may, subject to the provisions of the Plan,
establish, alter or repeal such rules and regulations as it deems necessary
or advisable for the proper administration of the Plan.
4. Shares Subject to the Plan
--------------------------
The aggregate number of shares of Stock which may be awarded under the
Plan, subject to purchase by exercising Options and subject to Stock
Appreciation Rights granted under the Plan shall not exceed 250,000 shares.
Such number of shares shall be subject to adjustment in accordance with
Section 12 hereof. Such shares of Stock may be authorized and unissued
shares, treasury shares or shares purchased on the open market or by
private purchase at prices no higher than the Fair Market Value of Stock at
the time of purchase. If, for any reason, any shares of Stock (including
Restricted Stock) awarded, or subject to an unexercised portion of an
Option or a Stock Appreciation Right granted under the Plan which has
expired, are forfeited, surrendered, canceled or terminated, such shares of
Stock shall again become available for Award under the Plan.
5. Effective Date and Term of the Plan
-----------------------------------
The Plan shall be in effect as of July 31, 1997, and, subject to the
provisions of Section 13 hereof, the Plan shall remain in effect and Awards
may be made as provided herein for a period of ten years, ending December
31, 1998. Notwithstanding the expiration or termination of the Plan as
herein provided, the Plan shall continue in effect until all matters
relating to the payment of Awards and administration of the Plan have been
settled; provided, however, that upon such expiration or termination no
further Awards may be granted under the Plan.
4
<PAGE>
6. Grant of Awards
---------------
Each Award granted under the Plan shall be evidenced by a written
Award Agreement. Such agreement shall be subject to and incorporate the
express terms and conditions, if any, required under the Plan or required
by the Committee.
7. Stock Options
-------------
The Committee may, at any time and in its discretion, authorize the
grant of one or more Options to any Key Employee. Each Option so granted
shall be subject to the following terms (in addition to any other terms
contemplated hereunder):
a. OPTION TERM: The Option awarded may be exercised at such times and
subject to such conditions as determined by the Committee; provided,
however, that no Option shall be exercisable after ten (10) years from
the Date of Grant.
b. OPTION PRICE: The Option price per share shall be determined by the
Committee at the time such Option is awarded and shall not be less
than the Fair Market Value of one share of Stock on the Date of Grant.
c. EXERCISE: An Option may be exercised by the Key Employee to whom it is
granted in accordance with its terms as provided in the Award
Agreement by delivering to the Company written notice to that effect.
The purchase price of the shares of Stock as to which an Option is
exercised shall be paid to the Company at the time of exercise either
in cash or Stock (or a combination thereof) already owned by the
person exercising such Option having a total Fair Market Value equal
to the option price of the shares of Stock the subject of the exercise
of the Option at the time it is exercised. No shares of Stock shall
be issued until full payment has been received therefor and the person
exercising the Option shall have complied with the requirements set
forth in the Plan and the Award Agreement.
d. TERMINATION OF EMPLOYMENT: In the event that the employment of a Key
Employee to whom an Option has been awarded has been terminated for
any reason (including a termination by the Company whether or not for
good cause and a termination by reason of the death, Disability or
Retirement of the Key Employee), other than a termination associated
with a Change of Control as described in Section 10, such Option shall
be canceled coincident with the effective date of termination. The
Committee in its sole discretion may provide in the Award Agreement
that in the event that the employment of the Key Employee to whom an
Option the subject of such Award Agreement is being granted has been
terminated (i) by reason of death or Disability, such Option may be
exercised for a period of up to one (1) year after the date of such
termination, or (ii) by reason of Retirement, such Option may be
exercised for a period of up to three (3) months after the date of
such termination; provided, however, that in no event
5
<PAGE>
may such Option be exercised beyond the expiration date set forth in
the Award Agreement, and provided, further, that such Option is or
becomes otherwise exercisable by its terms prior to the expiration of
the applicable period after such termination.
e. TRANSFER: Options shall not be transferable except by will or the
laws of descent and distribution and shall be exercisable during the
lifetime of the Key Employee to whom such Options were granted only by
such Key Employee.
f. CHANGE OF CONTROL: Notwithstanding any other provisions contained in
the Plan or the Award Agreement, any Option which has not expired
under its term and is held by a Key Employee at the time of a Change
of Control shall be exercisable as of the date of such Change of
Control, unless the Committee in its sole discretion otherwise
determines.
g. INCENTIVE STOCK OPTIONS: The Committee, with respect to each Award of
an Option to a Key Employee, shall determine whether such Option shall
be an Incentive Stock Option or a Nonqualified Stock Option, and, upon
making such determination, shall designate such Option as either an
Incentive Stock Option or a Nonqualified Stock Option, as the case may
be, in the Award Agreement.
h. AWARD AGREEMENT: Each Option shall be evidenced by an Award Agreement
which shall set forth the number of shares of Stock the subject of
such Option, the time or period for its exercise, the exercise price
per share and such other terms and conditions as the Committee shall
require or otherwise deems desirable.
i. LIMITATION OF STOCK PURCHASES: To the extent required by the Code,
the aggregate Fair Market Value (as determined at the time of the Date
of Grant of Incentive Stock Options) of the Stock with respect to
which any Incentive Stock Options are exercisable by an Key Employee
for the first time during any calendar year shall not exceed $100,000
for such Key Employee, plus the amount of any unused limit carryover
from any prior years.
j. LIMITATION OF AWARD OF INCENTIVE STOCK OPTIONS: No Incentive Stock
Option may be granted to any employee (whether or not then a Key
Employee) who at the time such Incentive Stock Option would otherwise
be granted (but for the provisions contained in this limitation) owns
more than ten percent (10%) of the total combined voting power of all
classes of capital stock of the Company unless (i) the Option price in
respect of each share of Stock the subject of such Incentive Stock
Option is not less than 110% of the Fair Market Value of each share of
Stock on the Date of Grant, and (ii) such Incentive Stock Option is
not exercisable after the end of the fifth year from the Date of
Grant.
6
<PAGE>
8. Restricted Stock
----------------
The Committee may, at any time and in its discretion, authorize the
grant of Awards of Stock constituting Restricted Stock to any Key Employee.
Each Award of Restricted Stock shall be subject to the following terms (in
addition to any other terms contemplated hereunder):
a. RESTRICTIONS: Any Award of Stock pursuant to this Section 8 shall be
subject to such restrictions and terms, and all other conditions with
respect to the grant thereof, including (without limitation) any
required payments to be made by the Key Employee in respect thereof,
as the Committee in its discretion may determine (such Stock being
herein referred to as "Restricted Stock"). At the time a Restricted
Stock Award is made, the Committee shall establish a period (after
which restrictions will lapse) during which all restrictions in
respect of the Stock constituting the Restricted Stock shall apply,
which shall be a period commencing on the Award Date of Grant and
ending on such date as the Committee shall determine (the "Restriction
Period"). The Committee may provide for the lapse of restrictions in
installments where it deems appropriate. At the discretion of the
Committee, each Restricted Stock Award may have a different
Restriction Period.
b. TERMINATION OF EMPLOYMENT: Except as may be otherwise determined by
the Committee, in the event that the employment of a Key Employee to
whom an Award of Restricted Stock has been granted has been terminated
for any reason (including a termination by the Company whether or not
for good cause and a termination by reason of the death, Disability or
Retirement of the Key Employee), other than a termination associated
with a Change of Control as described in Section 10 hereof, before the
expiration of the Restriction Period, all shares of Restricted Stock
still subject to restriction shall be forfeited and shall be
reacquired by the Company.
c. TRANSFER: No shares of Restricted Stock shall be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of during the
Restriction Period except that such Restricted Stock may be bequeathed
in a testamentary will during the Restriction Period.
d. WAIVER OF RESTRICTIONS: In cases of death, Disability, Retirement,
Change of Control as described in Section 10 hereof or special
circumstances (as determined by the Committee), the Committee may, in
its sole discretion, when it finds that a waiver would be in the best
interests of the Company, elect to waive any or all remaining
restrictions with respect to a Key Employee's Restricted Stock.
7
<PAGE>
e. CHANGE OF CONTROL: Notwithstanding any other provisions contained
herein or in the Award Agreement, all restrictions on any Restricted
Stock shall lapse immediately upon a Change of Control, unless the
Committee in its sole discretion otherwise determines, except for
restrictions, if any, on the transferability of such shares required
to satisfy applicable federal and state securities laws.
f. AWARD AGREEMENT: Each Restricted Stock Award shall be evidenced by an
Award Agreement which shall define the Restriction Period and contain
such other terms and conditions as the Committee shall require or
otherwise deems desirable.
g. STOCK CERTIFICATES: As soon as practicable after the Award of
Restricted Stock, the Company shall cause to be issued a Stock
certificate, registered in the name of the Key Employee to whom such
Award has been granted, evidencing the number of shares of Stock the
subject of the Restricted Stock Award. Unless such certificate is
deposited with a custodian pursuant to Paragraph (h) of this Section
8, each such certificate shall bear the following legend (in addition
to any other restrictive legends otherwise applicable in respect of
the shares covered thereby):
"The transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms and
conditions (including forfeiture and restrictions against
transfer) contained in the Atmos Energy Corporation Long-Term
Stock Plan for the United Cities Gas Company Division and an
Award Agreement entered into between the registered owner of such
shares and Atmos Energy Corporation. A copy of the Plan and Award
Agreement is on file in the office of the Secretary of Atmos
Energy Corporation, 5430 LBJ Freeway, Three Lincoln Centre, Suite
1800, Dallas, Texas 75240."
Such legend shall not be removed from any Stock certificate evidencing
such Restricted Stock until the lapse of restrictions applicable
thereto.
h. CUSTODIAN: As an alternative to delivery of a Stock certificate to
the Key Employee pursuant to Paragraph (g) of this Section 8
containing the legend set forth therein, any Stock certificate
evidencing an Award of Restricted Stock may be deposited by the
Company with a custodian to be designated by the Committee. The
Company shall cause the custodian to issue the Key Employee a receipt
for any Restricted Stock deposited with it in accordance with this
Paragraph. Such custodian shall hold the deposited certificates and
deliver the same to the Key Employee in whose name the shares of Stock
evidenced thereby are registered only after the restrictions
applicable thereto shall have lapsed.
8
<PAGE>
i. RIGHTS AS A SHAREHOLDER: Upon delivery of Restricted Stock to the Key
Employee (or the custodian, if any) as a Restricted Stock Award, the
Key Employee shall, except as set forth in Paragraph (c) of this
Section 8, have all the rights of a shareholder with respect to the
Restricted Stock, including the right to vote the shares of Restricted
Stock and receive all dividends or other distributions paid or made
with respect to the Restricted Stock.
j. REPAYMENT TO THE KEY EMPLOYEE: The Company shall repay to the Key
Employee all amounts, if any, actually paid to the Company by such Key
Employee for shares of Restricted Stock which are forfeited to the
Company as a result of the application of the terms of the Plan and/or
the Award Agreement, such repayment to be in cash or property, as the
Committee in its sole discretion shall determine.
9. Stock Appreciation Rights
-------------------------
The Committee may, at any time and in its discretion, authorize the
grant to any Key Employee of the Company who is granted an Award of an
Option, simultaneously with the grant of such Award, the right (herein
referred to as a "Stock Appreciation Right") to surrender such Option in
whole or in part (to the extent such Option is otherwise exercisable) and
to receive from the Company an amount equal to the excess, if any, of the
aggregate Fair Market Value of the Stock with respect to which the Option
is otherwise exercisable on the date such Option is surrendered over the
Option price of the shares of Stock the subject thereof. Each Stock
Appreciation Right shall be subject to the following terms (in addition to
any other terms contemplated hereunder):
a. TERMS: The Committee in its discretion may limit the period or
periods during which the Stock Appreciation Rights may be exercised
and may provide such other terms and conditions (which need not be the
same with respect to each optionee) under which a Stock Appreciation
Right may be granted and/or exercised. A Stock Appreciation Right may
be exercised only so long as the related Option is exercisable and
shall terminate on the surrender (except in connection with the
exercise thereof), termination, expiration or forfeiture of the
related Option. In no event may a Stock Appreciation Right be
exercised more than ten (10) years after the Date of Grant of the
related Option.
b. PAYMENT: Payment by the Company of the amount receivable by the Key
Employee upon the exercise of a Stock Appreciation Right may be made
by the delivery of Stock or cash or any combination of Stock or cash,
as determined in the sole discretion of the Committee from time to
time; provided, however, that no cash payment shall be made to such
Key Employee in respect of a Stock Appreciation Right if such Stock
Appreciation Right or any related Option shall have been exercised
during the first six (6) months of their respective terms, except in
the case of the exercise thereof following the death or Disability of
the Key Employee to whom such Awards were granted. No fractional
shares of Stock
9
<PAGE>
shall be issued in payment upon the exercise of a Stock Appreciation
Right, and in lieu of the issuance of fractional shares the Committee
may provide for the elimination of fractional shares without
adjustment or for the payment to such Key Employee of the Fair Market
Value of a whole share of Stock on the date the Stock Appreciation
Right is exercised multiplied by the fractional share interest
otherwise issuable, subject to the proviso set forth in the preceding
sentence.
c. TRANSFER: Stock Appreciation Rights shall not be transferable except
by will or the laws of descent and distribution and shall be
transferable only in conjunction with a permitted transfer of the
Option to which such Stock Appreciation Right relates and only to the
transferee of such Option. Stock Appreciation Rights shall be
exercisable during the lifetime of the Key Employee to whom they are
granted only by such Key Employee.
d. AWARD AGREEMENT: Each Stock Appreciation Right shall be evidenced by
an Award Agreement which shall set forth the shares of Stock the
subject thereof, the Option to which it relates and such other terms
and conditions as the Committee shall require or otherwise deems
desirable.
e. LIMITATION: Notwithstanding anything to the contrary contained
herein, in no event shall the aggregate number of shares of Stock the
subject of all Stock Appreciation Rights granted to any Key Employee
under the Plan and then outstanding exceed 33% of the aggregate number
of shares of Stock the subject of all Options granted to such Key
Employee under the Plan and then outstanding.
10. Change of Control
-----------------
For the purpose of the Plan, a "Change of Control", shall mean the
consummation of a Business Combination as defined under Article Seven of
the Articles of Incorporation of United Cities Gas Company in existence on
the date the Merger becomes effective.
11. General
-------
a. GOVERNMENT AND OTHER REGULATIONS: The obligation of the Company to
make payment of Awards in Stock or otherwise shall be subject to all
applicable laws, rules and regulations, and to such approvals by
governmental agencies as may be required.
b. TAX WITHHOLDING: The Company shall have the right to deduct and
withhold from all Awards and from the cash and/or Stock issuable upon
exercise thereof, if any, all federal, state and local taxes required
by law to be withheld with respect thereto including the right to
withhold shares of Stock otherwise issuable or deliverable in
connection with such Award or the exercise thereof having an aggregate
Fair Market Value on the Date of Grant of the Award or the date of the
10
<PAGE>
exercise thereof, as the case may be, equal to the amount the Company
is required to withhold.
c. CLAIM TO AWARDS AND EMPLOYMENT RIGHTS: No employee or other person
shall have any claim or right to be granted an Award under the Plan.
Neither the Plan nor any action taken hereunder shall be construed as
giving any employee any right to be retained in the employ of the
Company.
d. NONTRANSFERABILITY: A person's rights and interests under the Plan,
including amounts payable, may not be assigned, pledged, hypothecated
or transferred except, in the event of an employee's death, by will,
or if there be no will, under the laws of descent and distribution,
subject at all times to the terms of the Plan.
e. INDEMNIFICATION: Each person who is or shall have been a member of
the Committee or of the Board shall be indemnified and held harmless
by the Company against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or
proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the
Plan and against and from any and all amounts paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding.
He or she shall give the Company an opportunity, at its own expense,
to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the
Articles of Incorporation or Bylaws of the Company, as a matter of
law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
f. RELIANCE ON REPORTS: Each member of the Committee and each member of
the Board shall be fully justified in relying or acting in good faith
upon any report made by the firm of independent public accountants
regularly employed by the Company and upon any other information
furnished in connection with the Plan by any person other than himself
or herself. In no event shall any person who is or shall have been a
member of the Committee or of the Board be liable for any
determination made or other action taken or any omission to act in
reliance upon any such report or information or for any action taken,
including the furnishing of information, or any failure to act, if
done in good faith.
g. RELATIONSHIP TO OTHER BENEFITS: No compensation payment under the
Plan shall be taken into account in determining any benefits under any
pension, retirement, profit sharing, group insurance or other benefit
plan of the Company.
h. EXPENSES: The expenses of administering the Plan shall be borne by the
Company.
11
<PAGE>
i. PRONOUNS: Masculine pronouns and other words of masculine gender
shall refer to both men and women where the context makes such
reference appropriate.
j. TITLES AND HEADINGS: The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of
conflict, the text of the Plan, rather than such titles or headings,
shall control.
k. RIGHT AS A SHAREHOLDER: An optionee shall have no right as a
shareholder with respect to any Stock covered by an Option or
receivable upon the exercise of an Option or a Stock Appreciation
Right until such optionee shall have become the registered holder of
such Stock, and no adjustments shall be made for dividends in cash or
other property or other distributions or rights in respect of Stock
for any period or at any time prior to the date upon which such
optionee in fact shall have become the registered holder of the shares
of Stock acquired pursuant to the exercise of such Option or Stock
Appreciation Right.
l. GOVERNING LAW: The Plan and all determinations made and actions taken
in respect thereof shall be governed by and construed in accordance
with the laws of the State of Illinois.
m. SEVERABILITY: The illegality or unenforceability of any part of the
Plan shall not affect the legality or enforceability of any other
provision contained herein.
12. Changes In Capital Structure
----------------------------
The aggregate number of shares of Stock subject to the Plan, and all
Options, Stock Appreciation Rights, Restricted Stock Awards and any Award
Agreements evidencing such Awards, may, at the sole discretion of the
Committee, be subject to adjustment by the Committee as to the number and
price of shares of Stock or other consideration subject to such Awards in
the event of changes in the outstanding Stock by reason of stock dividends,
stock splits, recapitalizations, reorganizations, mergers, consolidations,
combinations, exchanges, or other relevant changes in capitalization
occurring after the Date of Grant of any such Awards.
13. Amendments and Termination
--------------------------
a. RIGHT TO AMEND: The Board may terminate the Plan, in whole or in
part, may suspend the Plan, in whole or in part, from time to time,
including (without limitation) amendments deemed necessary or
desirable to qualify the Options and/or the Stock Appreciation Rights
under the rules and regulations promulgated by the Securities and
Exchange Commission with respect to employees who are subject to the
provisions of Section 16 of the Exchange Act and under the laws, rules
and regulations of any governmental regulatory authority or commission
having jurisdiction over the Company or any Subsidiary, or to correct
any defect or supply any omission or reconcile any inconsistency in
the Plan or in any
12
<PAGE>
Option, Stock Appreciation Right or Restricted Stock Award granted
hereunder, without the approval of the shareholders of the Company;
provided, however, that no action shall be taken without the approval
of the shareholders of the Company to increase the number of shares of
Stock on which Awards of Stock Appreciation Rights, Restricted Stock
and Options may be granted except for increases and adjustments made
pursuant to Section 12 hereof, or change the manner of determining the
Option price or change the manner of determining the amount payable
upon exercise of a Stock Appreciation Right or otherwise materially
increase the benefits accruing to Key Employees under the Plan, or
change the class of employees eligible to participate or materially
modify the requirements as to eligibility for participation in the
Plan, or withdraw administration from the Committee, or permit any
person while a member of the Committee to be eligible to receive or
hold an Option, a Stock Appreciation Right or Restricted Stock granted
under the Plan.
b. REPLACEMENT AND EXTENSION OF TERMS: The Committee from time to time
may permit a Key Employee to whom an Option and Stock Appreciation
Right, if any, has been granted under the Plan to surrender for
cancellation any unexpired outstanding Option and related Stock
Appreciation Right, if any, and receive from the Company in exchange
therefor an Option for such number of shares of Stock as may be
designated by the Committee, together with related Stock Appreciation
Rights, if any, as the Committee may determine, all on the terms and
conditions which the Committee in its sole discretion may prescribe.
The Committee may extend the duration of any Option and/or Stock
Appreciation Right for a period not to exceed the remainder of the
life of the Plan, subject to the other limitations set forth herein,
on such other terms and conditions as the Committee deems desirable,
and, in the case of Incentive Stock Options, upon changing the Option
price thereunder to reflect the present Fair Market Value of each
share of Stock the subject thereof as of the date of such extension.
c. LIMITATION OF AMENDMENTS: Notwithstanding the foregoing, no amendment
or termination or modification of the Plan shall in any manner affect
any Award of an Option, Stock Appreciation Right or Restricted Stock
theretofore granted without the written consent of the Key Employee to
whom the Award was granted, except that the Committee may amend or
modify the Plan in a manner that does affect any Option, Stock
Appreciation Right or Restricted Stock theretofore granted upon a
finding by the Committee that such amendment or modification is in the
best interest of holders of outstanding Options, Stock Appreciation
Rights or Restricted Stock affected thereby.
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<PAGE>
EXHIBIT 99.2
ATMOS ENERGY CORPORATION
LONG-TERM STOCK PLAN FOR THE
UNITED CITIES GAS COMPANY DIVISION
CUMULATIVE AWARD AGREEMENT
--------------------------
THIS AGREEMENT, made this _____ day of July, 1997, between Atmos Energy
Corporation, a Texas corporation (the "Company"), and
___________________________ (the "Optionee"), entered into pursuant to the Atmos
Energy Corporation Long-Term Stock Plan for the United Cities Gas Company
Division, as the same may be amended from time to time (the "Plan").
WITNESSETH:
WHEREAS, on July 19, 1996, Atmos Energy Corporation (the "Company") and
United Cities Gas Company, an Illinois and Virginia corporation ("United
Cities") entered into that certain Agreement and Plan of Reorganization, which
was amended on October 3, 1996 by Amendment No. 1 to the Agreement and Plan of
Reorganization (collectively, the "Reorganization Agreement"), pursuant to which
United Cities will be merged with and into the Company on July 31, 1997 (the
"Merger") with the Company as the surviving corporation; and
WHEREAS, pursuant to Section 4.9 of the Reorganization Agreement, the
Company agreed to continue in effect the former United Cities Long-Term Stock
Plan of 1989 (the "United Cities Plan"), following the consummation of the
Merger; and
WHEREAS, although it may do so, the Company does not contemplate granting
or awarding any further Incentive Stock Options, Nonqualified Stock Options and
Stock Appreciation Rights or any combination thereof under the Plan. The
Company also does not contemplate issuing any Restricted Stock, none of which
was issued by United Cities. The Company plans only to allow all outstanding
grants originally awarded under the United Cities Plan to be exercised, pursuant
to which the holders will receive shares of common stock, no par value of the
Company ("Stock") in lieu of shares of United Cities common stock, no par value
("United Cities Stock"); and
WHEREAS the Optionee was regarded as a "Key Employee", as defined in the
United Cities Plan, and the Compensation Committee of the Board of Directors of
United Cities had determined that it was to the advantage and in the interest of
United Cities to grant the options provided for herein to the Optionee as an
inducement to remain in the service of United Cities or of one of its
subsidiaries ("Subsidiaries") and as an incentive for increased effort during
such service; and
1
<PAGE>
WHEREAS, the Company desires to enter into this Agreement with the Optionee
in order to assume the obligation pursuant to Section 4.9 of the Reorganization
Agreement to issue Stock pursuant to the exercise of all options (both non-
qualified and incentive) and stock appreciation rights ("SARs") granted by
United Cities prior to the consummation of the Merger.
NOW, THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein and in the Plan, the parties hereto agree that
this Agreement is subject in all respects to the terms of the Plan, all of which
terms are made a part of and incorporated into this Agreement, and further agree
as follows:
1. Grant of Option
---------------
Pursuant to the provisions of the United Cities Plan, United Cities had
granted, on the dates reflected in Appendix A, to the Optionee an option (the
"Option") to purchase from United Cities pursuant to the type of Option (whether
non-qualified or incentive) set forth in Appendix A, the number of shares of
United Cities Stock set forth in Appendix A at the purchase price set forth in
Appendix A, which was the fair market value as of the date of grant. Pursuant
to Section 4.9 of the Reorganization Agreement, the Company will assume the
obligation to issue an equivalent number of shares of Stock upon the exercise of
each outstanding Option beginning August 1, 1997.
2. Period of Exercise of Options
-----------------------------
Subject to the provisions of Section 4, "Termination," if the Optionee is
employed by the Company or a Subsidiary on any anniversary date specified in
Appendix A, and has been continuously employed with the Company or a Subsidiary
since the effective time of the Merger on July 31, 1997, then each Option
outstanding on July 31, 1997, as set forth in Appendix A, will vest an
additional twenty percent (20%) on each such anniversary date occurring after
July 31, 1997 and will be exercisable on such date, except to the extent
previously exercised. Each Option shall expire ten years after the date of its
respective grant.
3. Method of Exercise and Payment
------------------------------
An Option shall be exercised by delivery to the Company on any business day
of written notice in a format acceptable to the Company specifying the number of
option shares the Optionee then desires to purchase. The option exercise notice
shall be accompanied by payment of the aggregate option price for such number of
option shares in cash or stock already owned by the person exercising such
Option, or any combination thereof.
Within a reasonable period of time after the Option exercise, the Company
shall issue shares of Stock to the Optionee provided full payment has been
received thereon and the person exercising the Option shall have complied with
all requirements set forth in the Plan this Agreement.
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<PAGE>
4. Termination
-----------
Each Option as set forth in Appendix A shall terminate upon the
occurrence of the first of the following events:
A. The expiration of the Option.
B. The termination of the Optionee's employment with the Company or
Subsidiary, except in the case of the Optionee's retirement, death
or disability.
C. The expiration of a three month period commencing on the date of
the Optionee's retirement.
D. The expiration of a one year period commencing on the date of the
Optionee's termination of employment because of death or
disability.
E. If applicable, the termination of the Option in accordance with
Section 8, "Result of Exercising SAR's on Related Option."
5. Grant of Stock Appreciation Rights
----------------------------------
Pursuant to the provisions of the Plan, United Cities had granted to the
Optionee stock appreciation rights ("SARs") with respect to the number of shares
of United Cities Stock subject to an Option as set forth in Appendix A.
Pursuant to Section 4.9 of the Reorganization Agreement, the Company will assume
the obligation with respect to such SARs beginning July 31, 1997. SARs shall
entitle the Optionee to surrender such Option in whole or in part, to the extent
such Option is otherwise exercisable, and to receive from the Company cash
and/or shares of Stock in an amount equal to the excess of the aggregate fair
market value of the Stock with respect to which the Option is otherwise
exercisable on the date such Option is surrendered over the option price of the
shares of Stock the subject thereof.
6. Period of Exercise of SARs
--------------------------
SARs shall be exercisable during the period of time that the corresponding
portion of the applicable Option is exercisable. The Committee may, in its
discretion, impose such conditions upon the exercise of any SARs granted
hereunder as it deems in the best interests of the Optionee or the Company,
including such conditions as may be imposed in accordance with rules promulgated
by the Securities and Exchange Commission.
7. Exercise and Payment of SARs
----------------------------
All or any portion of SARs hereby granted shall be exercised by the
Optionee by delivery to the Company on any business day on which such SARs are
exercisable in accordance with Section 6 a written notice in a format acceptable
to the Company specifying the number of option
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<PAGE>
shares in respect of which the Optionee desires SARs to be exercised. The SAR
exercise notice shall state that the Optionee is surrendering the portion of the
Option relating to the number of option shares covered by the notice.
The Committee shall determine whether the Optionee will be paid in cash or
in shares of Stock or in any combination thereof. Any shares of Stock
transferred to the Optionee upon the exercise of any SAR's hereunder shall be
valued at its fair market value on the SAR exercise date. Within a reasonable
period of time after the SAR exercise, the Company shall deliver shares of Stock
or pay the cash payment, as determined by the Committee, to the Optionee in
consideration of the exercise of SARs and shall cancel the related portion of
the applicable Option as provided in Section 8 below.
8. Result of Exercising SARs on Related Option
-------------------------------------------
The right of an Optionee to exercise SARs shall terminate to the extent
that such SARs are exercised or to the extent that such Optionee exercises such
applicable Option. The right of an Optionee to exercise such Option shall
terminate to the extent exercised or to the extent that option shares covered by
such Option are used to calculate amounts receivable upon the exercise of SARs
under Section 7 herein.
9. Tax Withholding
---------------
The delivery of any Stock certificates by the Company shall not be made
until the Optionee has made arrangements for the payment of any amounts required
to be withheld or paid under any applicable federal, state, or local income
taxes. Any cash payment shall be made net of any applicable federal, state and
local withholding taxes.
10. Construction
------------
Any determination or interpretation by the Committee under this Agreement
shall be final and conclusive on all persons. In the event of a conflict
between any term of this Agreement and the terms of the Plan, the terms of the
Plan shall control. The Optionee hereby acknowledges receipt of a copy of the
Plan and agrees to be bound by all the terms and provisions thereof.
11. Amendment
---------
The Committee shall have the right to amend this Agreement from time to
time as provided in the Plan in any manner for the purpose of promoting the
objectives of the Plan, provided that no such amendment shall impair the
Optionee's rights under this Agreement without the Optionee's consent.
12. Change of Control
-----------------
Notwithstanding any other provisions of this Agreement, any Option which
has not expired under its terms and is held by the Optionee at the time of a
Change of Control, with
4
<PAGE>
respect to the Company, which shall mean the consummation of a Business
Combination, as defined under the Articles of Incorporation of United Cities as
they existed at July 31, 1997, shall be exercisable as of the date of such
Change of Control.
13. Notices
-------
Any notice required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given when received, if delivered
personally, or when mailed, if sent by prepaid first class mail addressed as
follows:
A. If to the Company or the Committee:
Atmos Energy Corporation
Attn: Secretary
5430 LBJ Freeway
Three Lincoln Centre, Suite 1800
Dallas, TX 75240
B. If to the Optionee, at his address as shown on the records of the
Company, or at such other address as the Optionee, by notice to
the Company, may designate in writing from time to time.
IN WITNESS WHEREOF, Atmos Energy Corporation has caused this Agreement to
be executed on its behalf by its duly authorized officer, and the Optionee has
hereunto set his hand, both as of the day and year first above written.
_____________________________________ ____________________________________
Chairman of Human Resources Committee President
of the Board of Directors
____________________________________
Optionee
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<PAGE>
APPENDIX A
CUMULATIVE AWARD AGREEMENT
ATMOS ENERGY CORPORATION
LONG-TERM STOCK OPTION PLAN FOR THE
UNITED CITIES GAS COMPANY DIVISION
NAME: _________________________
I. INCENTIVE STOCK OPTIONS AS OF 7-31-97
- ----------------------------------------------------------------------------
Date Grant Options Vesting Options Options Options
Issued Price ($) Granted % Vested Exercised Available
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
II.A NON-QUALIFIED STOCK OPTIONS AS OF 7-31-97
- ----------------------------------------------------------------------------
Date Grant Options Vesting Options Options Options
Issued Price ($) Granted % Vested Exercised Available
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
II.B STOCK APPRECIATION RIGHTS ("SAR'S") AS OF 7-31-97
--------------------------------------------------------------------
Date SAR's Vesting SAR's SAR's SAR's
Issued Granted % Vested Exercised Available
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
6
