UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
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Preliminary Proxy Statement | ¨ | Confidential, for Use of the Commission Only (as Permitted by Rule 14a-6(e)(2)) | |||
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Soliciting Material under § 240.14a-11(c) of § 240.14a-12 |
Atmos Energy Corporation
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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December 28, 2004
Dear Atmos Energy Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be held in the Lincoln West Ballroom at the Hilton Dallas Lincoln Centre, 5410 LBJ Freeway, Dallas, Texas 75240 on Wednesday, February 9, 2005 at 11:00 a.m. Central Standard Time.
The matters to be acted upon at the meeting are described in the attached Notice of Annual Meeting and Proxy Statement. In addition, we will review with you the affairs and progress of the Company during the past year, including the acquisition of the natural gas and pipeline operations of TXU Gas Company and related events, and review the results of operations for the first quarter of the 2005 fiscal year.
Your participation at this meeting is very important, regardless of the number of shares you hold or whether you will be able to attend the meeting in person. If you wish to submit a written proxy, please date, sign and return the proxy in the enclosed envelope to ensure that your shares are represented at the meeting. You may also vote your proxy over the Internet or by telephone by following the instructions on the enclosed proxy card.
On behalf of your Board of Directors, thank you for your continued support and interest in Atmos Energy Corporation.
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Sincerely, |
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Robert W. Best |
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Chairman of the Board, President |
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and Chief Executive Officer |
ATMOS ENERGY CORPORATION
P.O. Box 650205
Dallas, Texas 75265-0205
NOTICE OF ANNUAL MEETING
To the Shareholders:
The Annual Meeting of the Shareholders of Atmos Energy Corporation (the “Company”) will be held in the Lincoln West Ballroom at the Hilton Dallas Lincoln Centre, 5410 LBJ Freeway, Dallas, Texas 75240 on Wednesday, February 9, 2005 at 11:00 a.m. Central Standard Time for the following purposes:
| 1. | To elect four Class I directors for three-year terms expiring in 2008 and one Class II director for the remainder of the original three-year term expiring in 2006. |
| 2. | To act upon a proposal to amend the Amended and Restated Articles of Incorporation of the Company to increase the number of authorized shares of Common Stock from 100,000,000 to 200,000,000. |
| 3. | To transact such other business as may properly come before the meeting or any adjournment thereof. |
Shareholders of record of the Company’s common stock at the close of business on December 15, 2004 will be entitled to notice of, and to vote at, such meeting. The stock transfer books will not be closed. Your vote is very important to us. Regardless of the number of shares you own, please vote. All shareholders of record can vote (i) by written proxy by signing and dating the proxy card and returning it in the enclosed postage-paid envelope, (ii) via the Internet (www.voteproxy.com), (iii) by telephone (toll-free at 1-800-PROXIES) or (iv) by attending the Annual Meeting in person. These various options for voting are described on the enclosed proxy card.
For all shareholders who participate in the Company’s Retirement Savings Plan and Trust (“RSP”), your proxy card, Internet or telephone proxy vote will serve as voting instructions to the trustee of the RSP. If you have shares of the Company’s Common Stock credited in the RSP, only the trustee can vote your plan shares even if you attend the Annual Meeting in person.
All shareholders who hold their shares in street name (in the name of a broker, bank or other nominee) may submit a written vote through voting instruction cards provided by their brokers or banks . Such shareholders who hold their shares in street name can also generally vote their proxy via the Internet or by telephone, in accordance with instructions provided by their brokers, banks or other nominees. Under New York Stock Exchange rules, brokers and banks will have discretion to vote the shares of customers who fail to provide voting instructions. If you do not provide instructions to your broker or bank to vote your shares, they may either vote your shares on the matters being presented at our Annual Meeting or leave your shares unvoted. If you own your shares in street name and you want to vote in person at the meeting, you must first obtain a legal proxy from your street name nominee and bring that legal proxy to the annual meeting.
Included with this Proxy Statement is a copy of the Company’s Summary Annual Report to all shareholders and Annual Report on Form 10-K for the 2004 fiscal year. You may also view a copy of these materials on our website at www.atmosenergy.com. We encourage you to receive future Company Summary Annual Reports and other proxy materials electronically and help the Company save costs in producing and distributing these materials. If you wish to receive these materials electronically next year, please follow the instructions on the enclosed proxy card.
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By Order of the Board of Directors, |
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DWALA KUHN |
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Corporate Secretary |
December 28, 2004
IMPORTANT: PLEASE COMPLETE YOUR PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. YOU MAY ALSO VOTE BY TELEPHONE OR INTERNET, BY FOLLOWING THE INSTRUCTIONS ON THE PROXY CARD. IF YOU VOTE BY TELEPHONE OR INTERNET, YOU DO NOT HAVE TO MAIL IN YOUR PROXY CARD. IF YOU ARE A SHAREHOLDER OF RECORD, VOTING IN ADVANCE BY MAIL, TELEPHONE OR INTERNET WILL NOT PREVENT YOU FROM VOTING IN PERSON AT THE MEETING, BUT IT WILL HELP TO ASSURE A QUORUM AND AVOID ADDED COSTS.
ATMOS ENERGY CORPORATION
P.O. Box 650205
Dallas, Texas 75265-0205
PROXY STATEMENT
Solicitation and Revocability of Proxies
The proxy enclosed with this statement is solicited by the management of Atmos Energy Corporation (the “Company”) at the direction of the Company’s Board of Directors. These materials were first mailed to the Company’s shareholders on December 28, 2004.
Any shareholder of record giving a proxy has the power to revoke the proxy at any time prior to its exercise by (1) submitting a new proxy with a later date, including a proxy given over the Internet or by telephone; (2) notifying the Company’s Corporate Secretary in writing before the meeting; or (3) voting in person at the meeting. Any shareholders owning shares in street name who wish to revoke voting instructions previously given to their broker, bank or other nominee should contact such broker, bank or other nominee for further instructions. The Company expects to solicit proxies primarily by mail, but directors, officers, employees and agents of the Company may also solicit proxies in person or by telephone or other electronic means. The cost of preparing, assembling and mailing the proxies and accompanying materials for this Annual Meeting of Shareholders, including the cost of reimbursing brokers and nominees for forwarding proxies and proxy materials to their principals, will be paid by the Company. In addition, Morrow & Co., Inc. (“Morrow”) will assist the Company in the solicitation of proxies. The Company will pay approximately $8,000 in fees, plus expenses and disbursements, to Morrow for its proxy solicitation services.
Common Stock Information; Record Date
As of December 15, 2004, there were [ ] shares of the Company’s common stock, no par value (“Common Stock”), issued and outstanding, all of which are entitled to vote. These shares constitute the only class of stock of the Company issued and outstanding. As stated in the accompanying Notice of Annual Meeting, only shareholders of record at the close of business on December 15, 2004 will be entitled to vote at the meeting. Each share is entitled to one vote.
Security Ownership of Certain Beneficial Owners. As of November 30, 2004, with respect to each beneficial owner of the Company’s Common Stock whose identity was known by the Company, there were no beneficial owners of more than five percent of the Company’s Common Stock.
Security Ownership of Management and Directors. The following table lists the beneficial ownership, as of the close of business on November 30, 2004, of the Company’s Common Stock with respect to all directors and nominees for director of the Company, the executive officers of the Company named in the Summary Compensation table on pages 12-14 of this Proxy Statement and all directors and executive officers of the Company as a group.
| (a) | The percentage of shares beneficially owned by such individual does not exceed one percent of the class so owned. |
| (b) | Includes share units credited to the following directors under the Company’s Equity Incentive and Deferred Compensation Plan for Non-Employee Directors and 1998 Long-Term Incentive Plan in the following respective amounts: Mr. Bain, 18,092 units, Mr. Busbee, 18,481 units, Mr. Cardin, 11,872 units, Mr. Garland, 16,521 units, Mr. Gordon, 3,804 units, Mr. Koonce, 24,144 units, Dr. Meredith, 12,033 units, Mr. Nichol, 18,970 units, Ms. Quinn, -0- units, Mr. Vaughan, 19,416 units and Mr. Ware, 10,858 units. |
| (c) | Includes shares issuable upon the exercise of options held by the following executive officers within 60 days of November 30, 2004 under the Company’s 1998 Long-Term Incentive Plan in the following respective amounts: Mr. Best, 357,123 shares, Mr. Fischer, 106,801 shares, Mr. Reddy, 82,801 shares, Mr. Woodward, 46,252 shares, and Mr. Gregory, 67,133 shares. |
1. ELECTION OF DIRECTORS
Pursuant to the Company’s Bylaws, the Board of Directors is divided into three classes, each of which class consists, as nearly as possible, of one-third of the total number of directors constituting the entire Board of Directors. Directors for Class I are to be elected at this Annual Meeting for three-year terms expiring in 2008. Travis W. Bain II, Dan Busbee, Richard K. Gordon and Gene C. Koonce have been nominated to serve as Class I directors. Nancy K. Quinn has been nominated to serve as a Class II director. All nominees were recommended for nomination by the non-management members of the Nominating and Corporate Governance Committee of the Board of Directors. The Company did not pay a fee to any third party to identify, evaluate or assist in identifying or evaluating potential nominees for the Board of Directors. The Nominating and Corporate Governance Committee did not receive any recommendations from a shareholder or a group of shareholders who, individually or in the aggregate, beneficially owned greater than five percent of the Company’s Common Stock for at least one year.
Messrs. Bain, Busbee, Gordon and Koonce were last elected to three-year terms by the shareholders at the 2002 Annual Meeting, while Ms. Quinn was appointed to the Board effective August 16, 2004. The Board is nominating Messrs. Bain, Busbee, Gordon and Koonce to continue serving as Class I directors, whose three-year terms will expire in 2008. The Board is nominating Ms. Quinn to continue serving as a Class II director, whose term will expire in 2006.
The other directors listed on the following pages will continue to serve in their positions for the remainder of their current terms. The names, ages and biographical summaries of (i) the persons who have been nominated to serve as directors of the Company and (ii) the directors who are continuing in office until the expiration of their terms and the class in which such nominee or other director has been designated, are set forth in the following table. Each of the nominees has consented to be a nominee and to serve as a director if elected, and all votes authorized by the enclosed proxy will be cast FOR all of the nominees. If the Company receives proxies that are signed but do not specify how to vote, we will vote your shares FOR all of the nominees. If the Company receives proxies that contain a vote to “withhold authority” for the election of one or more director nominees, such vote will not be counted in determining the number of votes cast for those nominees. In order to be elected as a director, the Company’s Bylaws require a nominee to receive the vote of a majority of all outstanding shares of the Company’s Common Stock entitled to vote and represented in person or by proxy at a meeting of shareholders at which a quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE FOLLOWING NOMINEES:
Name; Principal Occupation or Employment
During Past Five Years; Other Directorships
Year in Which
of the Company
Travis W. Bain II
Chairman of Texas Custom Pools, Inc. in Plano, Texas since March 1999. Director of Delta Industries, Inc. in Jackson, Mississippi.
Dan Busbee
Adjunct Professor at the Southern Methodist University Dedman School of Law since February 2003; Professional Fellow at the SMU Dedman School of Law Institute of International Banking and Finance since January 2001;
Senior Visiting Fellow at the Centre for Commercial Law Studies, Queen Mary, University of London since January 2001.
Richard K. Gordon
General Partner of Juniper Capital LP and Juniper Advisory LP since March 2003. Formerly Vice Chairman, Investment Banking, for Merrill Lynch & Co. from March 1993 through March 2003.
Gene C. Koonce
Retired. Formerly Chairman of the Board, President and Chief Executive Officer of United Cities Gas Company from May 1996 until the merger of United Cities with the Company in July 1997.
Nancy K. Quinn
Principal of Hanover Capital since July 1996 and Executive Director of The Beacon Group, LP from August 1996 to January 2000. Director of Endeavor International Corporation.
The following persons are directors of the Company who will be continuing in office until the expiration
of their terms as set forth below.
Certain Business Relationships
Until his retirement from the firm in March 2003, Mr.
Gordon was Vice Chairman, Investment Banking, for Merrill Lynch & Co., which firm has provided various types of investment banking services to the Company, including serving as an underwriter on the Company’s public debt and equity
offerings and providing advice in connection with merger and acquisition transactions. Mr. Ware is the president and a shareholder of Amarillo National Bank, Amarillo, Texas, which bank provides an $18 million short-term line of credit to the
Company, serves as a depository bank for the Company and is trustee for the Company’s 1998 Long-Term Incentive Plan.
Independence of Directors
All non-management members of the Board of Directors, other than Mr. Vaughan, satisfy the independence requirements of the New York Stock Exchange.
Because Mr. Vaughan was engaged as a consultant to the Company until October 1, 2002, whose fees exceeded the minimum threshold established under the three year look-back independence provisions of the New York Stock Exchange from November 4, 2004,
Mr. Vaughan may not be considered independent from the Company. The Board of Directors has also adopted categorical standards of director independence, which are attached as Exhibit A to this Proxy Statement, which standards supplement the
independence requirements recently promulgated by the New York Stock Exchange. Directors who meet these standards are considered to be “independent.” Note that for purposes of the standards, the Board has adopted the definition of an
“immediate family member” adopted by the New York Stock Exchange, which includes parents, siblings and in-laws of the director, as well as anyone else (other than domestic employees) who shares such director’s home. The Board has
determined that Messrs. Gordon and Ware, as well as all other
current non-management directors other than Mr. Vaughan, as discussed above, meet these standards and are, therefore, considered to be independent directors
because none of their relationships with the Company have been determined to be material.
Presiding Director and Communications with Directors
In accordance with recent new corporate governance listing standards of the New York Stock Exchange, the Company has designated Mr. Vaughan as the presiding director at all meetings of non-management directors during
the 2005 fiscal year, which meetings will be held on a regular basis. Shareholders may communicate with Mr. Vaughan, individual non-management directors, or the non-management directors as a group, by writing to Board of Directors, Atmos Energy
Corporation, P.O. Box 650205, Dallas, Texas, 75265-0205 or by email at boardofdirectors@atmosenergy.com. The Senior Vice President and General Counsel of the Company, Louis P. Gregory, receives all such communications initially and forwards
such communications to Mr. Vaughan or another individual non-management director, if applicable, as he deems appropriate. Shareholders may also contact the only management director of the Company, Mr. Robert W. Best, Chairman, President and Chief
Executive Officer, by mail at Atmos Energy Corporation, P.O. Box 650205, Dallas, Texas 75265-0205, by email at robert.best@atmosenergy.com or by telephone at 972-934-9227.
The Board of Directors: Committees, Meetings and Directors’ Fees
Standing Committees.
The Company has certain standing committees, each of which is described
below.
The Executive Committee consists of Messrs. Best,
Koonce and Vaughan. Mr. Vaughan serves as chairman of the committee. In accordance with the Bylaws of the Company, the Executive Committee has, and may exercise, all of the powers of the Board during the intervals between the Board’s meetings,
subject to certain limitations and restrictions as set forth in the Bylaws or as may be established by resolution of the Board of Directors from time to time. In addition, Messrs. Best and Vaughan serve as
ex officio
members of every other
Board Committee. The Executive Committee held no meetings during the 2004 fiscal year.
The Board of Directors has established a separately-designated standing Audit Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The Audit Committee consists of Ms. Quinn and
Messrs. Bain, Busbee, Cardin and Dr. Meredith. Mr. Busbee serves as chairman of the committee. Each member of the Audit Committee satisfies the independence standards of Section 301 of the Sarbanes-Oxley Act of 2002 and related rules and regulations
of the Securities and Exchange Commission, as well as Sections 303.01(B)(2)(a) and 303.01(B)(3) of the New York Stock Exchange Listed Company Manual. The Board of
Directors has designated Messrs. Busbee and Cardin each as an “audit committee financial expert,” as such term is defined by applicable rules and
regulations of the Securities and Exchange Commission. The Audit Committee reviews the scope and procedures of internal auditing work and the accounting policies of management, appoints the Company’s independent registered public accounting
firm and is responsible for the oversight of its work and the review of the results of its independent audits. The Audit Committee held five meetings during the last fiscal year. The Audit Committee has adopted a charter, which it follows in
conducting its activities. The Committee’s charter is available on the Company’s web site at www.atmosenergy.com under the link entitled “Corporate Governance.”
The Human Resources Committee consists of Messrs. Bain, Busbee, Garland, Gordon, Koonce and Nichol. Mr. Koonce serves as
chairman of the committee. Each member of the Committee satisfies the independence requirements of the New York Stock Exchange. This committee reviews and makes recommendations to the Board of Directors regarding compensation for the Chief Executive
Officer as well as other officers of the Company. In addition to compensation matters, the committee determines, develops and makes recommendations to the Board regarding benefit packages, special bonus or stock plans, severance agreements and
succession planning with respect to the Company’s officers. This committee also administers the Company’s 1998 Long-Term Incentive Plan and Annual Incentive Plan for Management. During the last fiscal year, the Human Resources Committee
held three meetings. The Committee has adopted a charter, which it follows in conducting its activities. The Committee’s charter is available on the Company’s web site at www.atmosenergy.com under the link entitled “Corporate
Governance.”
The Nominating and Corporate Governance
Committee consists of Ms. Quinn, Messrs. Cardin, Gordon, Nichol, Ware and Dr. Meredith. Mr. Nichol serves as chairman of the committee. Each member of the Committee satisfies the independence requirements of the New York Stock Exchange. This
Committee selects candidates for consideration by the full Board to fill any vacancies on the Board, which may occur from time to time, and oversees all corporate governance matters for the Company. The Committee held four meetings during the last
fiscal year. The Committee has adopted a charter, which it follows in conducting its activities. The Committee’s charter is available on the Company’s web site at www.atmosenergy.com under the link entitled “Corporate
Governance.”
The Committee also considers sound and
meritorious nomination suggestions for directors from shareholders. Nominees for director should possess the level of education, experience, sophistication and expertise required to perform the duties of a member of the board of directors of a
public company of the Company’s size and scope. Neither the Committee, the Board of Directors nor the Company itself discriminates
in any way against potential nominees on the basis of age, sex, race, religion or other personal characteristics. There are no differences in the manner in
which the Committee evaluates nominees for director based on whether or not the nominee is recommended by a shareholder. All letters of recommendation for nomination should be sent to the Corporate Secretary of the Company at the Company’s
headquarters and must be received no later than January 22, 2005. Such letters should include, in addition to the name, address and number of shares owned by the nominating shareholder, the nominee’s name and address, a listing of the
nominee’s background and qualifications. A signed statement from the nominee should accompany the letter of recommendation indicating that he or she consents to being considered as a nominee and that, if nominated by the Board and elected by
the shareholders, he or she will serve as a director.
The Work
Session/Annual Meeting Committee consists of Messrs. Bain, Garland, Koonce, Nichol and Ware. Mr. Bain serves as chairman of the committee. This committee selects the site and plans the meeting and agenda for the special meeting of the Board held
each year for the purpose of focusing on long-range planning and corporate strategy issues and selects the site for the Annual Meeting of Shareholders. During the last fiscal year, the Work Session/Annual Meeting Committee held two meetings.
Attendance at Board
Meetings.
During the last fiscal year, the Board of Directors of the Company held 15 meetings. During the 2004 fiscal year, each director attended at least 75 percent of the aggregate of (a) all meetings of the Board and
(b) all meetings of the committees of the Board on which such director served. In addition, all members of the Board of Directors attended the 2004 Annual Meeting of Shareholders in New Orleans, Louisiana on February 11, 2004. The Company strongly
supports and encourages each member of the Board of Directors to attend each of the Company’s annual meetings of shareholders.
Directors’ Fees.
As compensation for serving as a director, each of the non-employee directors receives an annual
retainer of $22,500 and a fee of $1,000 per meeting for attendance at each meeting of the Board of Directors or Board committee as well as any other Company-related business meeting (excluding telephone conference meetings). The fee paid for
participation in any telephonic conference meeting is one-half of the regular meeting fee. Committee chairpersons are also paid an additional annual fee of $5,000 for additional work done in connection with their committee duties and
responsibilities
.
Beginning October 1, 2004, each of the non-employee directors will receive as compensation for serving as a director an annual retainer of $30,000 and a fee of $1,500 per day for attendance at each Board, committee and other
Company-related business meeting (excluding telephone conference meetings, for which each participating non-employee director shall receive $750).
In August 1998, the Board adopted the Company’s Equity Incentive and Deferred Compensation Plan for
Non-Employee Directors (the “Plan”), representing an amendment to the Company’s Deferred Compensation Plan for Outside Directors that was originally adopted in May 1990. This amended plan became effective when shareholders of the
Company approved such amendment at their 1999 Annual Meeting in February 1999 and replaced the annual pension formerly payable to the Company’s non-employee directors under the Company’s Retirement Plan for Non-Employee Directors. Under
the terms of the Plan, each non-employee director is allowed to defer receipt of his annual retainer and meeting fees and to invest his deferred compensation into either a cash account or a stock account. In addition, each non-employee director has
received under the Plan an annual grant of share units for each year he has served as a director. Beginning in the 2004 fiscal year, each non-employee director has continued to receive an annual grant of share units for each year he has served as a
director under the Company’s 1998 Long-Term Incentive Plan. Such directors have also been allowed to continue to defer receipt of his annual retainer and meeting fees and to invest his deferred compensation into either a cash account or a stock
account under the Company’s 1998 Long-Term Incentive Plan. The specific unit amounts credited to each director are shown in the Security Ownership table on page 2 of this Proxy Statement.
In November 1994, the Board adopted the Outside Directors Stock-for-Fee Plan,
which plan was approved by the shareholders of the Company in February 1995. The plan permits non-employee directors to receive all or part of their annual retainer and meeting fees in Common Stock of the Company rather than in cash or having such
retainer and fees deferred under the Company’s Equity Incentive and Deferred Compensation Plan for Non-Employee Directors. An election by a director to receive his or her fees in stock does not alter the amount of fees payable but results in
the deferral of payment of the stock portion of the fees until after the end of each quarter in which the fees were earned. The number of shares of Common Stock issued at such time will be equal to (a) the dollar amount of the fees to be paid in
stock divided by (b) the fair market value of the Company’s Common Stock on the last day of the applicable quarter. The fair market value is the closing price of a share of Common Stock of the Company as reported by the New York Stock Exchange.
Only whole numbers of shares are issued; fractional shares are paid in cash. All such shares issued to non-employee directors are reflected in the Security Ownership table on page 2 of this Proxy Statement.
Other Compensation for Non-Employee
Directors.
The Company provides business travel accident insurance for non-employee directors and their spouses. The policy provides $100,000 coverage to directors and $50,000 coverage to their spouses per accident while
traveling on Company business.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company’s directors and executive officers and persons who beneficially own more than ten percent of the Company’s Common Stock to file with the Securities and Exchange Commission and the New York Stock Exchange initial reports of
ownership and reports of changes in their ownership in the Company’s Common Stock. Directors, executive officers and greater-than-ten-percent beneficial shareholders are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file. Based solely on a review of the copies of such reports furnished to the Company, the Company believes that, during the 2004 fiscal year, all of the Company’s directors, executive officers and
greater-than-ten-percent beneficial owners were in compliance with the Section 16(a) filing requirements.
Corporate Governance
In accordance with relevant provisions of the Sarbanes-Oxley Act of 2002, related releases of the Securities and Exchange Commission as well as corporate governance listing standards of the New York Stock Exchange, in November 2003 the
Board of Directors of the Company adopted the Company’s Corporate Governance Guidelines and revised the Company’s Code of Conduct, which is now applicable to all directors, officers and employees of the Company. In addition, the Board of
Directors amended the charters for each of its Audit, Human Resources and Nominating and Corporate Governance Committees. All of the foregoing documents are posted on the Corporate Governance page of the Company’s website at
www.atmosenergy.com
and are also available in print to any shareholder who requests a printed copy of such documents from the Corporate Secretary at the principal executive offices of the Company.
Executive Compensation
Summary Compensation Table.
The following table sets forth the compensation paid by the Company for each of the
Company’s last three completed fiscal years to Mr. Best, the Company’s president and chief executive officer, as well as the Company’s four most highly compensated executive officers other than Mr. Best.
SUMMARY COMPENSATION TABLE
Name and Principal Position
Robert W. Best
Chairman of the Board,
President and Chief
Executive Officer
R. Earl Fischer
Senior Vice President,
Utility Operations
John P. Reddy
Senior Vice President and
Chief Financial Officer
JD Woodward, III(g)
Senior Vice President, Nonutility Operations
Louis P. Gregory
Senior Vice President and
General Counsel
Dollar amounts shown equal the number of shares of restricted stock and number of restricted stock units granted multiplied by closing stock price on grant date.
The grants in the 2004 fiscal year were comprised of equal amounts of performance-based restricted stock units and time-lapse restricted stock, both with three-year cliff-vesting periods. This valuation does not take into account the diminution in
value attributable to the restrictions applicable to the shares. Note that in the compensation table in the Proxy Statement for the 2003 fiscal year, the amounts of time-lapse restricted stock granted to the named executive officers were
inadvertently omitted from the table even though the grants were correctly reflected in footnote (b) of page 13 of such Proxy Statement concerning the number and value of the aggregate restricted stock holdings at the end of the 2003 fiscal year.
The corrected amounts of restricted stock granted to the named executive officers during the 2003 fiscal year is shown in the table above. The number and value of the aggregate restricted stock
holdings at the end of the last fiscal year for each of the executive officers listed above, based on the closing price on the New York Stock Exchange of the
Company’s Common Stock at September 30, 2004 of $25.19 per share, were as follows: Robert W. Best, 55,594 shares with a value of $1,400,413 (not including 8,143 shares that were converted from Mr. Best’s bonus awarded November 9, 2004, as
discussed in footnote (b) below); R. Earl Fischer, 22,300 shares with a value of $561,737; John P. Reddy, 45,068 shares with a value of $1,135,263 (not including 10,994 shares that were converted from Mr. Reddy’s bonus awarded November 9, 2004,
as discussed in footnote (b) below); JD Woodward, III, 25,278 shares with a value of $636,753; and Louis P. Gregory, 16,515 shares with a value of $416,013 (not including 5,831 shares that were converted from Mr. Gregory’s bonus awarded
November 9, 2004, as discussed in footnote (b) below). Dividends are paid on the time-lapse restricted stock at the same rate they are paid on all of the Company’s Common Stock, while the dividends on the performance-based restricted stock
units are credited to the recipient’s account with the payment of such dividends not occurring until the three-year cumulative earnings per share performance targets are measured and vesting is completed at the end of three years after grant.
Stock Options.
During the last fiscal year, no
stock options were granted to any of the named executive officers to purchase Common Stock of the Company under the Company’s 1998 Long-Term Incentive Plan nor did any of the named executive officers receive any stock options through the
conversion of a portion of their bonuses for either the 2003 or 2004 fiscal years.
The following table provides information concerning the aggregate exercises of options to purchase Common Stock of the Company under the Company’s 1998 Long-Term Incentive Plan by each named executive officer
during the last fiscal year. The options previously granted have a term of ten years and may be exercised as follows: one-third after one year from the date of grant, another one-third after two years from the date of grant and the remaining
one-third after three years from the date of grant.
AGGREGATED OPTION/ SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Name
Value of Unexercised
In-The-Money
Robert W. Best (c)
R. Earl Fischer
John P. Reddy
Age
First Became a
Director
Class Designation
and Year of
Expiration of
Term
70
1988
Class I
2008
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71
1988
Class I
2008
*******************************************************************************************
55
2001
Class I
2008
*******************************************************************************************
72
1997
Class I
2008
*******************************************************************************************
51
2004
Class II
2006
*******************************************************************************************
Annual Compensation
Long Term Compensation
Year
Salary
($)
Bonus
($)
Other Annual
Compensation
($)
Restricted
Stock
Awards(a)
($)
Securities
Underlying
Options/
SARs(#)
All Other
Compensation
($)
2004
2003
2002
676,108
651,116
615,378
563,500
338,500
274,400
(b)
(c
(c
(c
)
)
)
891,360
301,680
-0-
-0-
111,210
162,282
(e)
(f)
10,822
10,184
8,738
(d)
2004
2003
2002
289,929
260,551
239,766
190,200
101,900
81,700
(b)
(c
(c
(c
)
)
)
445,680
90,085
-0-
-0-
18,400
40,000
10,510
9,630
8,059
(d)
2004
2003
2002
304,283
293,449
276,232
190,200
114,300
93,100
(b)
(c
(c
(c
)
)
)
445,680
90,085
-0-
-0-
18,400
40,000
10,540
9,835
8,286
(d)
2004
2003
2002
279,654
269,889
258,843
192,280
-0-
85,700
(b)
(c
(c
(c
)
)
)
445,680
90,085
-0-
-0-
48,576
30,000
(e)
10,386
9,687
3,465
(d)
2004
2003
2002
215,151
207,034
195,726
137,863
82,820
66,933
(b)
(c
(c
(c
)
)
)
212,936
90,085
-0-
-0-
29,897
20,000
(e)
9,983
9,295
8,791
(d)
(a)
(b)
The bonuses were actually paid after the end of the fiscal year in which they are reported. Because their payment relates to services rendered in the fiscal year prior to payment,
the Company has consistently reported bonus payments in such prior fiscal year. Certain named executive officers elected to convert all or a portion of their 2004 fiscal year bonuses to restricted stock under the Company’s 1998 Long-Term
Incentive Plan with a conversion date of November 9, 2004, which elections by Messrs. Best, Reddy and Gregory are not reflected in the table above. Mr. Best elected to convert 25% of his bonus of $563,500, or $140,875, to shares of restricted stock
valued at 150% of the converted amount of the bonus, or $211,313, divided by the mean of the high and low stock price of $25.95 on the New York Stock Exchange on the conversion date, or 8,143 shares of restricted stock. Mr. Reddy elected to convert
100% of his bonus of $190,200 to a total of 10,994 shares of restricted stock. Mr. Gregory elected to convert 75% of his bonus of $134,500, or $100,875, to a total of 5,831 shares of restricted stock. In addition, Mr. Gregory elected to convert 25%
of his bonus of $134,500, or $33,625, to shares of bonus stock, valued at 110% of the converted amount of the bonus, or $36,988, divided by the mean of the high and low stock price of $25.95 on the conversion date or 1,425 shares, with the value of
such bonus stock reflected in the bonus column of the table above. Mr. Woodward elected to convert 100% of his bonus of $174,800 to shares of bonus stock, valued at 110% of the converted amount of the bonus, or $192,280, divided by the mean of the
high and low stock price of $25.95 on the conversion date or 7,410 shares, with the value of such bonus stock reflected in the bonus column of the table above.
(c)
The total dollar value of perquisites and other personal benefits for the named executive officer was less than the reporting thresholds established by the Securities and Exchange
Commission.
(d)
This amount reflects the amount of Company matching contributions made during the 2004 fiscal year to the named executive officer’s account pursuant to the Company’s
Retirement Savings Plan and Trust (“RSP”) and the amount of premiums paid by the Company during the 2004 fiscal year with respect to the purchase of term life insurance for the benefit of the named executive officer. The amounts paid
during the 2004 fiscal year for each named executive officer were as follows: Mr. Best, $8,638 in Company matching contributions made pursuant to the RSP and $2,184 in term life insurance premiums; Mr. Fischer, $8,638 in Company matching
contributions made pursuant to the RSP and $1,872 in term life insurance premiums; Mr. Reddy, $8,638 in Company matching contributions made pursuant to the RSP and $1,902 in term life insurance premiums; Mr. Woodward, $8,638 in Company matching
contributions made pursuant to the RSP and $1,748 in term life insurance premiums; and Mr. Gregory, $8,638 in Company matching contributions made pursuant to the RSP and $1,345 in term life insurance premiums.
(e)
The number of securities underlying options for the named executive officer reflects his election to convert a portion of his bonus received on November 12, 2002, attributable to
the 2002 fiscal year, to options to purchase shares of the Company’s Common Stock, as discussed in footnote (a) to the Summary Compensation Table on pages 11-13 of the Company’s Proxy Statement dated December 27, 2002.
(f)
The number of securities underlying options for Mr. Best reflects his election to convert 25% of his bonus received on November 6, 2001, attributable to the 2001 fiscal year of
$399,600, or $99,900, to options to purchase a total of 62,282 shares of the Company’s Common Stock, as discussed in footnote (a) to the Summary Compensation Table on pages 8-9 of the Company’s Proxy Statement dated December 21, 2001.
(g)
Mr. Woodward’s compensation does not include a total of $265,124 paid by an entity wholly-owned by the Company, Atmos Energy Marketing, LLC, to a corporation owned by Mr.
Woodward, Woodward Development, Inc., during the fiscal year. Such amount represents lease payments paid for office space leased from Woodward Development, Inc. by Atmos Energy Marketing, LLC for the 2004 fiscal year.
Shares
Acquired
On
Exercise
(#)
Value
Realized
($)
Number of Securities
Underlying Unexercised
Options/SARs at Fiscal
Year-End (#) (a)
Exercisable/Unexercisable
Options/SARs at Fiscal
Year-End ($)(b)
Exercisable/Unexercisable
-0-
-0-
320,260/128,232
1,108,269/446,741
-0-
-0-
106,801/25,599
441,565/82,039
-0-
-0-