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 =========================================================================== ===================================== 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 - ---------------------------------------------------------------------------------------------------------------- Common Stock, no par value... 250,000 $24.34375 $6,085,938 $1,845 =========================================================================== ===================================== (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. 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 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 (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 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 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. Signature Title Date --------- ----- ---- /s/ ROBERT W. BEST Chairman, President and CEO - -------------------------- (Principal Executive Officer) July 29, 1997 Robert W. Best 6 /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 7 EXHIBIT INDEX EXHIBIT DESCRIPTION PAGE ------- ----------- ---- NUMBER NUMBER ------ ------ 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. 8 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. 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 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 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. 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 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 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 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 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 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 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 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 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 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 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 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. 13 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 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. 2 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 3 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 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 5 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