ATMOS ENERGY CORP(Form: DEF 14A)

December 27, 2002

Dear Atmos Energy Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders to be held at the Crowne Plaza Hotel, 200 E. Amite Street, Jackson, Mississippi 39201 on Wednesday, February 12, 2003, 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 and report the results of operations for the first quarter of the 2003 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. Please date, sign, and return the proxy in the enclosed envelope to ensure that your shares are represented at the meeting.

On behalf of your Board of Directors, thank you for your continued support and interest in Atmos Energy Corporation.

Sincerely,

Robert W. Best

Chairman of the Board, President

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 at the Crowne Plaza Hotel, 200 E. Amite Street, Jackson, Mississippi 39201 on Wednesday, February 12, 2003, at 11:00 a.m. Central Standard Time for the following purposes:

To elect four Class II directors for three-year terms expiring in 2006.

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 16, 2002 will be entitled to notice of, and to vote at, such meeting. The stock transfer books will not be closed.

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 2002 fiscal year.

By Order of the Board of Directors,

SHIRLEY A. HINES

Corporate Secretary

December 27, 2002

YOUR VOTE IS IMPORTANT

TO VOTE YOUR SHARES, PLEASE INDICATE YOUR CHOICES, SIGN AND DATE THE PROXY CARD, AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOU MAY VOTE IN PERSON AT THE MEETING EVEN THOUGH YOU SEND IN YOUR PROXY.

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 27, 2002.

Any shareholder giving a proxy has the power to revoke the proxy at any time prior to its exercise. 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 statements 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 $6,500 in fees, plus expenses and disbursements, to Morrow for its proxy solicitation services.

Common Stock Information; Record Date

As of December 16, 2002, there were 45,288,682 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 16, 2002 will be entitled to vote at the meeting. Each share is entitled to one vote.

Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Certain Beneficial Owners. The following table lists the beneficial ownership, as of the close of business on November 29, 2002, of the Company’s Common Stock with respect to each person known by the Company to be the beneficial owner of more than five percent of such Common Stock.

Name and Address of Beneficial Owner		Amount of Common Stock Beneficially Owned		Percentage of Outstanding Common Stock
Atmos Energy Corporation Retirement Savings Plan and Trust (the “RSP”)(a)		2,419,109		5.8	%

(a)

The RSP (formerly known as the Atmos Energy Corporation Employee Stock Ownership Plan and Trust) permits Company employees who participate in the RSP to exercise voting power with respect to shares of the Company’s Common Stock held in their RSP accounts. With respect to shares of Common Stock owned by the RSP for which participating employees do not exercise such voting rights, the RSP Trust Committee, which is a committee appointed by the Board of Directors currently consisting of certain officers of the Company, is entitled to vote such shares in its discretion.

Security Ownership of Management and Directors. The following table lists the beneficial ownership, as of the close of business on November 29, 2002, 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 11-13 of this Proxy Statement and all directors and executive officers of the Company as a group.

Name	Amount of Common Stock Beneficially Owned		Percentage of Outstanding Common Stock
Travis W. Bain II	8,873		(a)(b)
Robert W. Best	269,622	(c)	(a)
Dan Busbee	10,498		(a)(b)
Richard W. Cardin	7,450		(a)(b)
R. Earl Fischer	58,923	(c)	(a)
Thomas J. Garland	8,728		(a)(b)
Richard K. Gordon	10,600		(a)(b)
Louis P. Gregory	24,844	(c)	(a)
Gene C. Koonce	26,328		(a)(b)
Thomas C. Meredith	6,821		(a)(b)
Phillip E. Nichol	14,940		(a)(b)
Carl S. Quinn	47,085		(a)(b)
John P. Reddy	77,509	(c)	(a)
Charles K. Vaughan	44,199		(a)(b)
Richard Ware II	21,369		(a)(b)
JD Woodward, III	1,054,745		2.5%
All directors and executive officers as a group (17 individuals)	1,729,512		4.1%

(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 in the following respective amounts: Mr. Bain, 5,460 units, Mr. Busbee, 5,750 units, Mr. Cardin, 3,950 units, Mr. Garland, 5,070 units, Mr. Gordon, 600 units, Mr. Koonce, 6,060 units, Dr. Meredith, 2,680 units, Mr. Nichol, 4,940 units, Mr. Quinn, 4,670 units, Mr. Vaughan, 4,490 units, and Mr. Ware, 2,410 units.

(c)

Includes shares issuable upon the exercise of options held by the following executive officers within 60 days of November 29, 2002 under the Company’s 1998 Long-Term Incentive Plan in the following respective amounts: Mr. Best, 129,095 shares, Mr. Fischer, 43,334 shares, Mr. Reddy, 56,668 shares, and Mr. Gregory, 20,001 shares.

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 II are to be elected at this Annual Meeting of Shareholders for three-year terms expiring in 2006. Richard W. Cardin, Dr. Thomas C. Meredith, Carl S. Quinn and Richard Ware II have been nominated to serve as Class II directors.

Messrs. Cardin, Quinn and Ware as well as Dr. Meredith were last elected to three-year terms by the shareholders at the 2000 Annual Meeting of Shareholders. The Board is nominating Messrs. Cardin, Quinn and Ware as well as Dr. Meredith to continue serving as Class II directors, whose three-year terms 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. 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	Age	Year in Which First Became a Director of the Company	Class Designation and Year of Expiration of Term
Richard W. Cardin	67	1997	Class II 2003
Consultant and retired partner of Arthur Andersen LLP since 1995. Director of United States Lime and Minerals, Inc. and Intergraph Corporation.
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Name; Principal Occupation or Employment During Past Five Years; Other Directorships	Age	Year in Which First Became a Director of the Company	Class Designation and Year of Expiration of Term
Thomas C. Meredith, Ph.D.	61	1995	Class II 2003
Chancellor of the University System of Georgia in Atlanta, Georgia since January 2002. Formerly Chancellor of The University of Alabama System in Tuscaloosa, Alabama from June 1997 through December 2001. Director of Alabama Cast Iron and Pipe Company.
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Carl S. Quinn	71	1994	Class II 2003
General Partner of Quinn Oil Company, Ltd. in East Hampton, New York since May 1992.
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Richard Ware II	56	1994	Class II 2003
President of Amarillo National Bank in Amarillo, Texas since 1981. Member of the Board of Trustees of Southern Methodist University in Dallas, Texas.
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The following persons are directors of the Company who will be continuing in office until the expiration of their terms as set forth below.

Name; Principal Occupation or Employment During Past Five Years; Other Directorships	Age	Year in Which First Became a Director of the Company	Class Designation and Year of Expiration of Term
Travis W. Bain II	68	1988	Class I 2005
Chairman of Texas Custom Pools, Inc. in Plano, Texas since March 1999. Formerly President of Bain Enterprises, Inc. in Plano, Texas from November 1991 until March 1999. Director of Delta Industries, Inc. in Jackson, Mississippi.
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Robert W. Best	56	1997	Class III
Chairman of the Board, President and Chief Executive Officer of the Company since March 1997.			2004
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Name; Principal Occupation or Employment During Past Five Years; Other Directorships	Age	Year in Which First Became a Director of the Company	Class Designation and Year of Expiration of Term
Dan Busbee	69	1988	Class I
Professional Fellow at the Southern Methodist University Dedman School of Law Institute of International Banking and Finance and Visiting Senior Fellow at the Centre for Commercial Law Studies, Queen Mary, University of London. Overseas Executive Director of the Centre for International Financial Studies and the Rule of Law at the British Institute of International & Comparative Law. Formerly Of Counsel with Gibson Dunn & Crutcher in Dallas, Texas from August 1998 through August 1999. Formerly Attorney and Senior Shareholder with Locke Purnell Rain Harrell in Dallas, Texas from 1970 until August 1998.			2005
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Thomas J. Garland	68	1997	Class III
Senior Advisor to the Niswonger Foundation since July 2002 and Chairman of the Tusculum Institute for Public Leadership and Policy since 1998. Formerly Interim President of Tusculum College in Greeneville, Tennessee from July 1999 through June 2000. Formerly Executive-in-Residence at Tusculum College from 1990 to 1998. Director of Peoples Community Bank in Johnson City, Tennessee.			2004
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Richard K. Gordon	53	2001	Class I
Vice Chairman, Investment Banking, for Merrill Lynch & Co. since 1993.			2005
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Gene C. Koonce	70	1997	Class I
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.			2005
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Name; Principal Occupation or Employment During Past Five Years; Other Directorships	Age	Year in Which First Became a Director of the Company	Class Designation and Year of Expiration of Term
Phillip E. Nichol	67	1985	Class III
Senior Vice President of Central Division Staff of UBS PaineWebber in Dallas, Texas since July 2001. Formerly Senior Vice President and Branch Manager of UBS PaineWebber Dallas, Texas from March 1999 to June 2001. Formerly Senior Vice President and Divisional Hiring Officer for the Central Division of PaineWebber Incorporated in Dallas, Texas from March 1998 to February 1999. Formerly Senior Vice President and Branch Manager of PaineWebber Incorporated in Fort Worth, Texas from May 1996 to February 1998.			2004
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Charles K. Vaughan	65	1983	Class III
Retired. Formerly Chairman of the Board of the Company from June 1994 until March 1997.			2004

Certain Business Relationships

Mr. Gordon is 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 Restricted Stock Grant Plan.

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, Quinn 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. The Executive Committee held one meeting during the 2002 fiscal year.

The Audit Committee consists of Messrs. Bain, Busbee, Cardin, Quinn and Dr. Meredith. Mr. Busbee serves as chairman of the committee. The Audit Committee reviews the scope and procedures of internal auditing work, the results of independent audits and the accounting policies of management, and it recommends to the Board the appointment of the Company’s independent auditors. The Audit Committee held four meetings during the last fiscal year. The Company’s securities are listed on the New York Stock Exchange and are governed by its listing standards. The Audit Committee has adopted a charter, which it follows in conducting its activities. All members of the Audit Committee meet the independence standards of Sections 303.01(B)(2)(a) and 303.01(B)(3) of the New York Stock Exchange listing standards.

The Human Resources Committee consists of Messrs. Bain, Busbee, Garland, Gordon, Koonce and Nichol. Mr. Koonce serves as chairman of the committee. This committee reviews and makes recommendations to the Board of Directors regarding compensation for 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 Nominating Committee consists of Messrs. Cardin, Nichol, Quinn and Ware and Dr. Meredith. Mr. Nichol serves as chairman of the committee. This committee selects candidates for consideration by the full Board to fill any vacancies on the Board, which may occur from time to time. The Nominating Committee held two meetings during the last fiscal year. The Nominating Committee also considers sound and meritorious nomination suggestions for directors from shareholders. 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 21, 2003. Such letters should include, in addition to 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 11 meetings. During the 2002 fiscal year, each director, other than Carl S. Quinn, 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. Mr. Quinn attended an aggregate of 72 percent of such meetings during the 2002 fiscal year.

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 Board and committee meeting (excluding telephone conference meetings). The fee paid for participation in a telephonic conference meeting of the Board or a committee is one-half of the regular meeting fee. Beginning October 1, 2002, committee chairmen will be paid an additional annual fee of $5,000 for additional work done in connection with their committee duties and responsibilities.

In August 1998, the Board adopted the Company’s Equity Incentive and Deferred Compensation Plan for Non-Employee Directors, 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 Company’s Equity Incentive and Deferred Compensation Plan for Non-Employee Directors, 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 receives an annual grant of share units for each year he serves as a director. The specific unit amounts credited to each director are shown in the Security Ownership table on page 3 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 Deferred Compensation Plan for Outside 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 3 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.

Other Arrangements with Mr. Vaughan. Effective October 1, 1994, Mr. Vaughan retired as an officer and employee of the Company and entered into a consulting agreement with the Company. Under the agreement, Mr. Vaughan has performed such consulting services as the Board has requested from time to time. The agreement, which was scheduled to terminate September 30, 2004, was terminated by the Board on September 16, 2002. Pursuant to the terms of the agreement, on that date Mr. Vaughan received a total of $175,000 attributable to fees that would have been paid to him in the 2003–2004 fiscal years. In addition, during the 2002 fiscal year, Mr. Vaughan received $130,000 in payment for his services during the 2002 fiscal year under the consulting agreement, which payments were made in semi-annual installments payable on October 1 and April 1 of such fiscal year. Mr. Vaughan currently also receives benefits equivalent to those provided under the Company’s former Mini-Med executive medical reimbursement plan.

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 2002 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.

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 the Company’s four most highly compensated executive officers other than Mr. Best. Compensation information is not presented below for an individual for any fiscal year in which such individual did not serve as an executive officer of the Company.

SUMMARY COMPENSATION TABLE

		Annual Compensation				Long Term Compensation
Name and Principal Position	Year	Salary ($)	Bonus(a) ($)	Other Annual Compensation ($)		Restricted Stock Awards(b) ($)	Securities Underlying Options/ SARs(#)		All Other Compensation ($)
Robert W. Best	2002	615,378	274,400	(c	)	0	162,282	(d)	8,738	(e)
Chairman of the Board,	2001	572,788	399,600	(c	)	0	75,000		8,585	(e)
President and Chief Executive Officer	2000	555,000	0	(c	)	0	50,000		8,585

R. Earl Fischer(f)	2002	239,766	81,700	(c	)	0	40,000		8,059	(e)
Senior Vice President,	2001	209,102	111,100	(c	)	0	30,000		6,666	(e)
Utility Operations	2000	176,174	0	(c	)	0	32,000		8,206

John P. Reddy(g)	2002	276,232	93,100	(c	)	0	40,000		8,286	(e)
Senior Vice President and	2001	249,513	131,800	(c	)	0	30,000		7,962	(e)
Chief Financial Officer	2000	213,390	0	(c	)	0	40,000		9,515

JD Woodward, III(h)	2002	258,843	85,700	(c	)	0	30,000		3,465	(e)
Senior Vice President, Nonutility Operations	2001	115,385	129,200	(c	)	0	0		780	(e)

Louis P. Gregory(i)	2002	195,726	66,933	(c	)	0	20,000		8,791	(e)
Senior Vice President and	2001	183,842	100,590	(c	)	0	20,000		1,148	(e)
General Counsel	2000	6,231	0	(c	)	0	20,000		0

(a)

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 executive officers elected to convert a portion of their 2002 fiscal year bonuses to restricted stock or nonqualified stock options under the

Company’s 1998 Long-Term Incentive Plan with a conversion date of November 12, 2002, which elections by Messrs. Best, Reddy, Woodward and Gregory are not reflected in the table above. Mr. Best elected to convert 25% of his bonus of $274,400, or $68,600, to options to purchase shares of the Company’s Common Stock, valued at 250% of the converted amount of the bonus, or $171,500, divided by the value of each stock option of $3.55 using the Black-Scholes pricing model, or options to purchase a total of 48,310 shares; Mr. Reddy elected to convert 100% of his bonus of $93,100 to shares of restricted stock, valued at 150% of the converted amount of the bonus, or $139,650, divided by the mean of the high and low stock price of $21.58 on the conversion date, or 6,471 shares of restricted stock; Mr. Woodward elected to convert 50% of his bonus of $85,700, or $42,850, to a total of 2,978 shares of restricted stock and 50% of his bonus of $85,700, or $42,850, to options to purchase a total of 30,176 shares; Mr. Gregory elected to convert 25% of his bonus of $65,300, or $16,325 to shares of bonus stock, valued at 110% of the converted amount of the bonus, or $17,958, divided by the mean of the high and low stock price of $21.58 on the conversion date or 832 shares, with the value of such bonus stock reflected in the bonus co