<SUBMISSION>
<ACCESSION-NUMBER>0000950134-01-000895
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20001231
<FILING-DATE>20010208
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ATMOS ENERGY CORP
<CIK>0000731802
<ASSIGNED-SIC>4924
<IRS-NUMBER>751743247
<STATE-OF-INCORPORATION>TX
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-10042
<FILM-NUMBER>1528852
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1800 THREE LINCOLN CTR
<STREET2>5430 LBJ FREEWAY
<CITY>DALLAS
<STATE>TX
<ZIP>75240
<PHONE>9729349227
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1800 THREE LINCOLN CTR
<STREET2>5430 LBJ FREEWAY
<CITY>DALLAS
<STATE>TX
<ZIP>75240
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>ENERGAS CO
<DATE-CHANGED>19881024
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d83952e10-q.txt
<DESCRIPTION>FORM 10-Q FOR QUARTER ENDED DECEMBER 31, 2000
<TEXT>

<PAGE>   1

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

[ X ]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2000

        OR

[   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________

Commission File Number 1-10042

                            ATMOS ENERGY CORPORATION
             (Exact name of registrant as specified in its charter)

           TEXAS AND VIRGINIA                                  75-1743247
    (State or other jurisdiction of                          (IRS Employer
     incorporation or organization)                       Identification No.)

    Three Lincoln Centre, Suite 1800
    5430 LBJ Freeway, Dallas, Texas                              75240
(Address of principal executive offices)                       (Zip Code)

                                 (972) 934-9227
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes  X   No
                                       ---     ---

Number of shares outstanding of each of the issuer's classes of common stock, as
of January 31, 2001.

           Class                                  Shares Outstanding
           -----                                  ------------------
        No Par Value                                  38,882,966

<PAGE>   2

PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements

                            ATMOS ENERGY CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

                                                    December 31,  September 30,
                                                       2000           2000
                                                    ---------------------------
                                                    (Unaudited)
ASSETS
Property, plant and equipment                       $ 1,592,248    $ 1,579,803
    Less accum. depreciation and amortization           610,166        597,457
                                                    ---------------------------
        Net property, plant and equipment               982,082        982,346
Current assets
    Cash and cash equivalents                             5,559          7,379
    Accounts receivable, net                            357,760        114,448
    Inventories of supplies and mdse                      6,740          6,456
    Gas stored underground                               76,713         64,222
    Prepayments                                           6,447          8,101
                                                    ---------------------------
        Total current assets                            453,219        200,606
Deferred charges and other assets                       164,713        165,806
                                                    ---------------------------
                                                    $ 1,600,014    $ 1,348,758
                                                    ===========================

SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
    Common stock                                    $       194    $       160
    Additional paid-in capital                          452,275        306,887
    Retained earnings                                    96,841         83,154
    Accumulated other comprehensive income (loss)        (2,891)         2,265
                                                    ---------------------------
        Shareholders' equity                            546,419        392,466
Long-term debt                                          357,241        363,198
                                                    ---------------------------
        Total capitalization                            903,660        755,664
Current liabilities
    Current maturities of long-term debt                 15,630         17,566
    Short-term debt                                     147,601        250,047
    Accounts payable                                    259,314         73,031
    Taxes payable                                        29,113         10,844
    Customers' deposits                                  12,926          9,923
    Other current liabilities                            23,446         21,085
                                                    ---------------------------
        Total current liabilities                       488,030        382,496
Deferred income taxes                                   126,127        131,619
Deferred credits and other liabilities                   82,197         78,979
                                                    ---------------------------
                                                    $ 1,600,014    $ 1,348,758
                                                    ===========================

See accompanying notes to condensed consolidated financial statements.

                                       2
<PAGE>   3

                            ATMOS ENERGY CORPORATION
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
                      (In thousands, except per share data)


                                            Three months ended
                                               December 31,
                                         ------------------------
                                            2000           1999
                                         ------------------------
Operating revenues                       $ 442,790      $ 224,458
Purchased gas cost                         332,842        134,908
                                         ------------------------
    Gross profit                           109,948         89,550

Operating expenses
    Operation                               34,269         33,082
    Maintenance                              1,690          2,342
    Depreciation and amortization           15,781         16,500
    Taxes, other than income                 9,267          7,485
                                         ------------------------
        Total operating expenses            61,007         59,409
                                         ------------------------
Operating income                            48,941         30,141

Other income (expense)                        (347)         3,958

Interest charges, net                       12,246         11,217
                                         ------------------------
Income before income taxes                  36,348         22,882

Income taxes                                13,376          8,558
                                         ------------------------
        Net income                       $  22,972      $  14,324
                                         ========================
Basic net income per share               $     .70      $     .46
                                         ========================
Diluted net income per share             $     .70      $     .46
                                         ========================
Cash dividends per share                 $    .290      $    .285
                                         ========================

Weighted average shares outstanding:
    Basic                                   32,810         31,122
                                         ========================
    Diluted                                 32,908         31,339
                                         ========================




See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>   4

                            ATMOS ENERGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (In thousands)

                                                       Three months ended
                                                          December 31,
                                                    ------------------------
                                                       2000           1999
                                                    ------------------------
Cash Flows From Operating Activities
    Net income                                      $  22,972      $  14,324
    Adjustments to reconcile net income to
      net cash used by operating activities:
      Depreciation and amortization:
          Charged to depreciation and
            amortization                               15,781         16,500
          Charged to other accounts                       750          1,151
      Deferred income taxes (benefit)                  (4,606)         8,511
      Net change in operating assets and
          liabilities                                 (49,529)       (77,483)
                                                    ------------------------
      Net cash used by operating activities           (14,632)       (36,997)

Cash Flows From Investing Activities
    Capital expenditures                              (19,464)       (17,472)
    Retirements of property, plant and
        equipment, net                                   (147)           845
    Proceeds from sale of utility assets                6,625              -
                                                    ------------------------
      Net cash used in investing activities           (12,986)       (16,627)

Cash Flows From Financing Activities
    Net increase (decrease) in short-term debt       (102,446)        81,082
    Cash dividends paid                                (9,285)        (8,925)
    Repayment of long-term debt                        (7,893)        (6,997)
    Issuance of common stock                            3,379          5,048
    Proceeds from equity offering, net                142,043              -
                                                    ------------------------
      Net cash provided by financing activities        25,798         70,208
                                                    ------------------------
Net increase (decrease) in cash and cash
    equivalents                                        (1,820)        16,584
Cash and cash equivalents at beginning
    of period                                           7,379          8,585
                                                    ------------------------
Cash and cash equivalents at end
    of period                                       $   5,559      $  25,169
                                                    ========================


See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>   5

                            ATMOS ENERGY CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                DECEMBER 31, 2000

1.   Unaudited interim financial information

In the opinion of management, all material adjustments necessary for a fair
presentation have been made to the unaudited interim period financial
statements. Because of seasonal and other factors, the results of operations for
the three month period ended December 31, 2000 are not indicative of expected
results of operations for the year ending September 30, 2001. These interim
financial statements and notes are condensed as permitted by the instructions to
Form 10-Q and should be read in conjunction with the audited consolidated
financial statements of Atmos Energy Corporation in its Annual Report on Form
10-K for the fiscal year ended September 30, 2000.

Common stock - As of December 31, 2000, we had 100,000,000 shares of common
stock, no par value (stated at $.005 per share), authorized and 38,848,193
shares outstanding. At September 30, 2000, we had 31,952,340 shares outstanding.

Comprehensive income - The following table presents the components of
comprehensive income, net of related tax, for the three-month period ended
December 31, 2000 and 1999:

                                                            Three months ended
                                                               December 31,
                                                          ----------------------
                                                            2000          1999
                                                          ----------------------
                                                              (In thousands)

Net income                                                $ 22,972      $ 14,324
Unrealized holding gains (losses) on investments            (1,522)        1,445
Unrealized losses on derivative financial instruments       (3,634)            -
                                                          ----------------------
Comprehensive income                                      $ 17,816      $ 15,769
                                                          ======================

The only components of accumulated other comprehensive income (loss), net of
related tax, relate to unrealized holding gains and losses associated with
certain available for sale investments and unrealized gains and losses
associated with derivative financial instruments.

Reclassifications - Certain prior year amounts have been reclassified to conform
with the current year presentation.



                                       5
<PAGE>   6

2.   Contingencies

Litigation

Greeley Division

On September 23, 1999, a suit was filed in the District Court of Stevens County,
Kansas, by Quinque Operating Company, Tom Boles and Robert Ditto, against more
than 200 companies in the natural gas industry including Atmos and our Greeley
Gas Division. The plaintiffs, who purport to represent a class consisting of gas
producers, royalty owners, overriding royalty owners, working interest owners
and state taxing authorities, accuse the defendants of underpaying royalties on
gas taken from wells situated on non-federal and non-Indian lands throughout the
United States and offshore waters predicated upon allegations that the
defendants' gas measurements are simply inaccurate and that the defendants
failed to comply with applicable regulations and industry standards over the
last 25 years. Although the plaintiffs do not specifically allege an amount of
damages, they contend that this suit is brought to recover billions of dollars
in revenues that the defendants have allegedly unlawfully diverted from the
plaintiffs to themselves. On April 10, 2000, this case was consolidated for
pre-trial proceedings with other similar pending litigation in federal court in
Wyoming in which we are also a defendant along with over 200 other defendants in
the case of In Re Natural Gas Royalties Quitam Litigation. In January 2001, the
federal court elected to remand this case back to the Kansas state court. A
reconsideration of remand has been filed, but it is expected to be denied. We
believe that the plaintiffs' claims are lacking in merit and we intend to
vigorously defend this action. However, we cannot assess, at this time, the
likelihood of whether or not the plaintiffs may prevail on any one or more of
their asserted claims. In any event, we expect the final outcome of this case to
not have a material adverse effect on our financial condition, results of
operations or net cash flows because we believe that we have adequate reserves
to cover any damages that may ultimately be awarded.

Energas Division

On June 22, 2000, suit was filed in the 99th District Court of Lubbock County,
Texas, by Juanita Juarez, individually and on behalf of Moses Benitez, a minor
and Yolanda Davila, individually and on behalf of Isiah Garcia, a minor, against
Richard Ratliff and our Energas Division. The plaintiffs were involved in an
automobile accident with Mr. Ratliff, an Energas Division employee who was
driving a vehicle belonging to the Energas Division. The plaintiffs allege that
Mr. Ratliff failed to maintain proper control of the vehicle which failure led
to the plaintiffs being damaged. Although the plaintiffs have not as yet alleged
a total amount of damages, they have submitted evidence that they incurred in
excess of $75,000 in direct medical expenses and alleged that the two adult
plaintiffs will suffer a combined loss of approximately $1.1 million of earnings
capacity as a result of injuries suffered in the incident. We believe that the
plaintiffs' claims are wholly lacking in merit and intend to vigorously defend
this action. However, we cannot assess, at this time, the likelihood of whether
or not the plaintiffs may prevail on any one or more of their asserted claims.
We expect the final outcome of this case to not have a


                                       6
<PAGE>   7

material adverse effect on our financial condition, results of operations or net
cash flows because we believe that we have adequate reserves to cover any
damages that may ultimately be awarded.

United Cities Propane Gas, Inc.

United Cities Propane Gas, Inc., one of our wholly-owned subsidiaries, is a
party to an action filed in June 2000 which is pending in the Circuit Court of
Sevier County, Tennessee. The plaintiffs' claims arise out of injuries alleged
to have been caused by a low-level propane explosion. The plaintiffs seek to
recover damages of $13.0 million. Discovery activities have begun in this case.
We deny any wrongdoing and we intend to vigorously defend against the
plaintiffs' claims. We expect the final outcome of this case to not have a
material adverse effect on our financial condition, results of operations or net
cash flows because we believe that we have adequate insurance coverage for any
damages that may ultimately be awarded.

We are a party to other litigation matters and claims that arise out of our
ordinary business. While the results of these litigation matters and claims
cannot be predicted with certainty, we believe the final outcome of such
litigation and claims will not have a material adverse effect on our financial
condition, results of operations or net cash flows because we believe that we
have adequate insurance and reserves to cover any damages that may ultimately be
awarded.

Environmental Matters

The United Cities Division is the owner or previous owner of manufactured gas
plant sites in Johnson City and Bristol, Tennessee and Hannibal, Missouri which
were used to supply gas prior to the availability of natural gas. The gas
manufacturing process resulted in certain by-products and residual materials
including coal tar. The manufacturing process used by us was an acceptable and
satisfactory process at the time such operations were being conducted. Under
current environmental protection laws and regulations, we may be responsible for
response actions with respect to such materials if response actions are
necessary.

As of December 31, 2000, we had incurred costs of approximately $0.9 million for
the investigations of the Johnson City and Bristol, Tennessee and Hannibal,
Missouri sites and had a remaining accrual of $0.8 million.

Tennessee sites

United Cities Gas Company and the Tennessee Department of Environment and
Conservation entered into a consent order effective January 23, 1997, to
facilitate the investigation, removal and remediation of the Johnson City site.
United Cities Gas Company began the implementation of the consent order in the
first quarter of 1997 which continued through December 31, 2000. The
investigative phase of the work at the site has been completed. Work on an
interim removal action is scheduled for 2001.


                                       7
<PAGE>   8

We are unaware of any information which suggests that the Bristol site gives
rise to a present health or environmental risk as a result of the manufactured
gas process or that any response action will be necessary.

The Tennessee Regulatory Authority granted United Cities Gas Company permission
to defer, until its next rate case, all cost incurred in Tennessee in connection
with state and federally mandated environmental control requirements.

Missouri site

On July 22, 1998, we entered into an Abatement Order on Consent with the
Missouri Department of Natural Resources addressing the former manufactured gas
plant located in Hannibal, Missouri. Through our United Cities Division, we
agreed to perform a removal action, a subsequent site evaluation and to
reimburse the response costs incurred by the state of Missouri in connection
with the property. The removal action was conducted and completed in August
1998, and the site evaluation field work was conducted in August 1999. A risk
assessment for the site is currently being performed. On March 9, 1999, the
Missouri Public Service Commission issued an Order authorizing us to defer the
costs associated with this site until March 9, 2001. A renewal of the Order has
been requested.

Kansas sites

We are currently conducting investigation and remediation activities pursuant to
Consent Orders between the Kansas Department of Health and Environment and
United Cities Gas Company. The Orders provide for the investigation and
remediation of mercury contamination at gas pipeline sites which utilize or
formerly utilized mercury meter equipment in Kansas. As of December 31, 2000,
based upon available current information, we had a remaining accrual of $0.3
million for recovery. In addition, as of December 31, 2000, we had incurred
costs of $0.1 million for these sites. The Kansas Corporation Commission has
authorized us to defer these costs and seek recovery in a future rate case.

We are a party to other environmental matters and claims that arise out of our
ordinary business. While the ultimate results of response actions to these
environmental matters and claims cannot be predicted with certainty, we believe
the final outcome of such response actions will not have a material adverse
effect on our financial condition, results of operations or net cash flows
because we believe that the expenditures related to such response actions will
either be recovered through rates, shared with other parties or covered by
adequate insurance or reserves.

3.   Short-term debt

At December 31, 2000, short-term debt was composed of $132.6 million of
commercial paper and $15.0 million outstanding under bank credit facilities.


                                       8
<PAGE>   9

Committed credit facilities

We have short-term committed credit facilities totaling $800.0 million. One
short-term unsecured credit facility, which serves as a backup liquidity
facility for our commercial paper program, is for $300.0 million. A second
facility is for $15.0 million. These credit facilities are negotiated at least
annually. In addition, on August 3, 2000, we entered into a $485.0 million
short-term unsecured credit facility with interest starting at LIBOR plus 75
basis points which will provide $385.0 million of bridge financing for the
acquisition of the assets and related costs of Louisiana Gas Service Company, a
division of Citizens Communications Company and LGS Natural Gas Company, a
subsidiary of Citizens and $100.0 million for refinancing certain existing debt.
At December 31, 2000, $15.0 million was outstanding under these credit
facilities.

Uncommitted credit facilities

We also have unsecured short-term uncommitted credit lines from three banks
totaling $90.0 million. No amounts were outstanding under these credit
facilities at December 31, 2000.

Commercial paper program

We implemented a $250.0 million commercial paper program in October 1998 which
was subsequently increased to $300.0 million in August 2000. It is supported by
the $300.0 million committed line of credit described above. Our commercial
paper is rated A-2 by Standard and Poor's and P-2 by Moody's.

4.   Earnings per share

Basic earnings per share has been computed by dividing net income for the period
by the weighted average number of common shares outstanding during the period.
Diluted earnings per share has been computed by dividing net income for the
period by the weighted average number of common shares outstanding during the
period adjusted for the assumed exercise of restricted stock and other
contingently issuable shares of common stock. Net income for basic and diluted
earnings per share are the same, as there are no contingently issuable shares of
stock whose issuance would have impacted net income. A reconciliation between
basic and diluted weighted average common shares outstanding follows:






                                       9
<PAGE>   10

                                                    For the three months ended
                                                           December 31,
                                                    --------------------------
                                                        2000          1999
                                                    --------------------------
Weighted average common shares - basic                 32,810        31,122
Effect of dilutive securities:
    Restricted stock                                       92           207
    Stock options                                           6            10
                                                    --------------------------
Weighted average common shares - assuming
    dilution                                           32,908        31,339
                                                    ==========================

5.   Segment information

In accordance with Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information", we have
identified the following two segments: Utility and Non-Regulated. For an
expanded description of these segments, please refer to Note 1 of notes to
consolidated financial statements in our Annual Report on Form 10-K for the year
ended September 30, 2000. For the year ended September 30, 2000 and periods
prior thereto, we had identified three segments: Utility, Propane and
Non-Regulated. However, in August 2000, we combined our propane operations with
the propane operations of three other companies and the resulting combined joint
venture combined its operations with Heritage Propane Partners, LLC. As a result
of this transaction, the Propane segment for prior periods has been combined
with the Non-Regulated segment.

Summarized financial information concerning our reportable segments for the
three months ended December 31, 2000 and 1999 are shown in the following table:

                                                        Non-
                                      Utility         Regulated         Total
                                    --------------------------------------------
                                                   (In thousands)
As of and for the
three months ended
December 31, 2000:
------------------
Operating revenues                  $  428,462       $   15,967       $  444,429
Intersegment revenues                      753              886            1,639
Net income                              22,838              134           22,972

Total assets                         1,508,608          107,961        1,616,569





                                       10
<PAGE>   11

                                                        Non-
                                      Utility         Regulated         Total
                                    --------------------------------------------
                                                   (In thousands)
As of and for the
three months ended
December 31, 1999:
------------------
Operating revenues                  $  209,295       $   16,630       $  225,925
Intersegment revenues                      596              871            1,467
Net income                              11,104            3,220           14,324

Total assets                         1,279,138           91,556        1,370,694

The following table presents a reconciliation of the operating revenues to total
consolidated revenues for the three months ended December 31, 2000 and 1999:

                                                      Three months ended
                                                         December 31,
                                                 ------------------------------
                                                     2000              1999
                                                 ------------------------------
                                                        (In thousands)
Total revenues for reportable segments            $ 444,429         $ 225,925
Elimination of intersegment revenues                 (1,639)           (1,467)
                                                 ------------------------------
    Total operating revenues                      $ 442,790         $ 224,458
                                                 ==============================

A reconciliation of total assets for the reportable segments to total
consolidated assets for December 31, 2000 and 1999 is presented below:

                                                         December 31,
                                                 ------------------------------
                                                     2000              1999
                                                 ------------------------------
                                                        (In thousands)
Total assets for reportable segments             $ 1,616,569        $ 1,370,694
Elimination of intercompany accounts                 (16,555)           (16,559)
                                                 ------------------------------
    Total consolidated assets                    $ 1,600,014        $ 1,354,135
                                                 ==============================

6.   Derivative Instruments and Hedging Activities

Effective October 1, 2000, we adopted Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended. This Statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires that all
derivative financial instruments be recognized in the financial statements and
measured at fair value regardless of the purpose or intent for holding them.
Changes in the fair value of derivative financial instruments are either
recognized periodically in income or shareholders' equity (as a component of
other comprehensive income), depending on the classification of the derivative.
Derivative instruments may be classified as either fair value hedges, cash flow
hedges or net investment in a foreign operation hedges. The cumulative effect of
the change in


                                       11
<PAGE>   12

accounting for the adoption of this Statement did not have a material impact on
our financial position, results of operations or cash flows.

Our derivative financial instruments are classified as cash flow hedges. We
primarily use futures and options contracts in our hedging activities. Once a
derivative financial instrument is classified as a cash flow hedge, the
effective portions of changes in the fair value of the instrument are recorded
in other comprehensive income and are recognized in the consolidated statement
of income when the hedged item affects earnings. Ineffective portions of changes
in the fair value of cash flow hedges are recognized in earnings. Our derivative
financial instruments are considered to be highly effective, thus the changes in
fair value of the instruments are recognized in shareholders' equity as a
component of other comprehensive income.

Our hedging activities are used primarily in our non-regulated irrigation
business and underground storage business. In our non-regulated irrigation
business, we use derivative instruments to hedge certain volumes of gas to be
purchased that will ultimately be used to fulfill sales contracts. The objective
of using these derivative instruments is to help mitigate market fluctuations
related to the purchase price. In our non-regulated underground storage
business, we use derivative instruments to hedge forecasted sales prices on
withdrawals from our underground storage facilities to help minimize our
exposure to market volatility. Any amounts recognized as gains and losses
reported in other comprehensive income will be reclassified into earnings upon
the completion of the purchase of gas related to the hedge for irrigation and
upon the ultimate sale of gas from our underground storage facilities related to
the hedge instrument. As of December 31, 2000, the maximum period of time over
which we hedge our exposure to market volatility is not greater than three
months. Our other gas contracts meet the exclusion criteria for normal purchases
and sales; thus, they are not accounted for as derivative financial instruments.

For the three months ended December 31, 2000, an unrecognized loss of $3.6
million relating to our hedging activities is recorded in other comprehensive
income.

7.   Woodward Marketing, LLC

Through Atmos Energy Marketing, LLC ("AEM"), our wholly-owned subsidiary, we own
a 45 percent interest in Woodward Marketing, LLC ("WMLLC"), a limited liability
company formed in Delaware with headquarters in Houston, Texas. WMLLC is engaged
in gas marketing and energy management services. WMLLC provides gas supply
management services to industrial customers, municipalities and local
distribution companies including our five regulated utility divisions.

We account for our 45 percent interest in WMLLC using the equity method of
accounting for investments. Equity in earnings of WMLLC included in the
condensed consolidated statement of income was $2.0 million and $3.0 million for
the three months ended December 31, 2000 and 1999. The $5.4 million excess
purchase price over the value of the net tangible assets, which was allocated to
customer contracts and goodwill, is being


                                       12
<PAGE>   13

amortized over 10 and 20 years. In 1999, WMLLC adopted Emerging Issues Task
Force 98-10, "Accounting for Contracts Involved in Energy Trading and Risk
Management Activities," ("EITF 98-10"). EITF 98-10 requires that energy trading
contracts be marked to market (that is, measured at fair value determined as of
the balance sheet date) with the gains and losses included in earnings and
separately disclosed. During our first quarter of fiscal 2001, WMLLC adopted
Emerging Issues Task Force 00-17, "Measuring the Fair Value of Energy-Related
Contracts in Applying EITF Issue No. 98-10" ("EITF 00-17"). EITF 00-17 extends
the requirements under EITF 98-10 to storage and transportation contracts. Upon
completion of the acquisition of the remaining 55 percent interest in WMLLC as
discussed below, WMLLC will be required to adopt Statement of Financial
Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging
Activities," as amended. We are currently in the process of evaluating the
impact of adopting this Statement on our financial condition, results of
operations and cash flows.

In August 2000, we entered into an agreement with Woodward Marketing, Inc.
("WMI") to acquire the 55 percent interest in WMLLC that we do not own in
exchange for 1,423,193 restricted shares of Atmos common stock. The
consideration is subject to an upward adjustment based on the market price of
Atmos common stock. The maximum number of additional shares that could be issued
under the adjustment provision is 232,547 plus an amount to compensate for
dividends paid after the completion of the acquisition. This transaction is
subject to state regulatory approval.

Guarantees

AEM, our wholly-owned subsidiary, and WMI, sole members of WMLLC, act as
guarantors of balances outstanding under a $125.0 million credit facility for
WMLLC. AEM guarantees the payment of 45 percent of borrowings under this
facility. No borrowing was outstanding under this credit facility at December
31, 2000; however, related letters of credit totaling $125.0 million reduced the
amount available under this facility. In addition, WMLLC has additional letters
of credit totaling $15.0 million secured by cash. AEM and WMI also act as joint
and several guarantors on payables of WMLLC up to $40.0 million of natural gas
purchases and transportation services from certain suppliers. WMLLC payable
balances outstanding that were subject to these guarantees amounted to $21.0
million at December 31, 2000. Upon completion of the acquisition by us of the
remaining 55 percent of WMLLC, as discussed above, AEM will be the sole
guarantor of all amounts outstanding under the bank facility discussed above as
well as the sole guarantor of all payables of WMLLC for natural gas purchases
and transportation services from suppliers.

Gas Purchases

Included in purchased gas cost were purchases from WMLLC of approximately $144.9
million and $48.4 million for the three-month periods ended December 31, 2000
and 1999.


                                       13
<PAGE>   14

Revolving Credit Facility

In June 2000, AEM established an unsecured revolving credit facility with WMLLC
whereby WMLLC may borrow up to $15.0 million on a revolving credit basis. In
December 2000, the credit facility with WMLLC was increased to $30.0 million.
The term of the facility is for one year ending on May 31, 2001. Interest is
paid monthly and adjusted periodically at a rate equal to the One Month LIBOR
plus 125 basis points. At December 31, 2000, $30.0 million in advances were
outstanding under this facility. In addition, at December 31, 2000, $9.0 million
in working capital advances to fund gas purchase obligations were outstanding.




                                       14
<PAGE>   15

INDEPENDENT ACCOUNTANTS' REVIEW REPORT


The Board of Directors
Atmos Energy Corporation

We have reviewed the accompanying condensed consolidated balance sheet of Atmos
Energy Corporation as of December 31, 2000 and the related condensed
consolidated statements of income and cash flows for the three-month periods
ended December 31, 2000 and 1999. These financial statements are the
responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States,
which will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States.

We have previously audited, in accordance with auditing standards generally
accepted in the Untied States, the consolidated balance sheet of Atmos Energy
Corporation as of September 30, 2000, and the related consolidated statements of
income, shareholders' equity and cash flows for the year then ended (not
presented herein) and in our report dated November 8, 2000, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying condensed consolidated balance
sheet as of September 30, 2000 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.


                                                               ERNST & YOUNG LLP


Dallas, Texas
January 23, 2001



                                       15
<PAGE>   16

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


Introduction

The following discussion should be read in conjunction with the condensed
consolidated financial statements contained in this Quarterly Report on Form
10-Q and Management's Discussion and Analysis contained in our Annual Report on
Form 10-K for the year ended September 30, 2000.

We distribute and sell natural gas to over one million residential, commercial,
industrial, agricultural and other customers in eleven states after the sale of
the South Carolina operations effective December 31, 2000. Such business is
subject to regulation by state and/or local authorities in each of the states in
which we operate. In addition, our business is affected by seasonal weather
patterns, competitive factors within the energy industry and economic conditions
in the areas that we serve.

Cautionary Statement for the Purposes of the Safe Harbor under the Private
Securities Litigation Reform Act of 1995

The statements contained in this Quarterly Report on Form 10-Q may contain
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934. All statements other than statements of historical facts
included in the Report are forward-looking statements made in good faith by the
Company and are intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of 1995. When used
in this Report, any other of the Company's documents or oral presentations, the
words "anticipate," "expect," "estimate," "plans," "believes," "objective,"
"forecast," "goal" or similar words are intended to identify forward-looking
statements. Such forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in the statements relating to the Company's strategy,
operations, markets, services, rates, recovery of costs, availability of gas
supply and other factors. These risks and uncertainties include the following:
national, regional and local economic conditions, including competition from
other energy suppliers as well as alternative forms of energy; regulatory and
business trends and decisions, including the impact of pending rate proceedings
before various state regulatory commissions; successful implementation of new
technologies and systems, including any technologies and systems related to the
Company's customer support center and billing operations; weather conditions
that would be adverse to its business such as warmer than normal weather in the
Company's service territories; successful completion and integration of pending
acquisitions; inflation rates, including their effect on commodity prices for
natural gas; hedging and market risk activities; further deregulation or
"unbundling" of the natural gas distribution industry and other uncertainties,
all of which are difficult to predict and many of which are beyond the control
of the Company. Accordingly, while the Company believes these forward-looking
statements to be reasonable, there can be no assurance that they will
approximate


                                       16
<PAGE>   17

actual experience or that the expectations derived from them will be realized.
Further, the Company undertakes no obligation to update or revise any of its
forward-looking statements whether as a result of new information, future events
or otherwise.

Ratemaking Activity

In August 1999, the Energas Division filed a rate case in its West Texas System
cities requesting a rate increase of approximately $9.8 million annually. This
request was denied by the 67 cities served by our West Texas System. In March
2000, this decision was appealed to the Railroad Commission of Texas.
Subsequently, 59 cities representing approximately 58 percent of Energas'
customers ratified a non-binding Settlement Agreement. The Settlement Agreement
capped the rate increase at $3.0 million and entitled the ratifying cities to
accept a rate increase below $3.0 million in the event the Railroad Commission
adopted a lesser increase for the non-ratifying cities. Eight cities declined to
participate in the settlement and a hearing with the Railroad Commission was
held in August 2000. In December 2000, the Railroad Commission approved an
increase in annual revenues of approximately $3.0 million effective December 1,
2000. In addition, the Railroad Commission approved a new rate design providing
more protection from warmer than normal weather.

In February 2000, the United Cities Division filed a rate case in Illinois with
the Illinois Commerce Commission requesting an increase in revenues of
approximately $3.1 million annually. After review by the Illinois Commerce
Commission, the amount requested was revised to approximately $2.1 million. The
United Cities Division received an increase in annual revenues of approximately
$1.4 million. The new rates went into effect on October 23, 2000 and will be
collected primarily through an increase in customer charges.

We continue to monitor rates in all of our service areas for recovery of service
costs and an adequate return on investment.

Weather and Seasonality

Our natural gas distribution business and irrigation sales business is seasonal
and dependent upon weather conditions in our service areas. Natural gas sales to
residential, commercial and public authority customers are affected by winter
heating season requirements. This generally results in higher operating revenues
and net income during the period from October through March of each year and
lower operating revenues and either net losses or lower net income during the
period from April through September of each year. Sales to industrial customers
are much less weather sensitive. Sales to agricultural customers, who typically
use natural gas to power irrigation pumps during the period from March through
September, are affected by rainfall amounts and the price of natural gas.
Weather for the three months ended December 31, 2000 was 21% colder than normal
and 46% colder than weather in the corresponding period of the prior year.


                                       17
<PAGE>   18

The effects of weather that is colder or warmer than normal are offset in the
Tennessee and Georgia jurisdictions served by the United Cities Division and in
the Kentucky jurisdiction served by the Western Kentucky Division through
weather normalization adjustments. The Georgia Public Service Commission, the
Tennessee Regulatory Authority and the Kentucky Public Service Commission have
approved WNAs. The WNAs, effective October through May each year in Georgia, and
November through April each year in Tennessee and Kentucky, allow the United
Cities Division and Western Kentucky Division to increase the base rate portion
of customers' bills when weather is warmer than normal and decrease the base
rate when weather is colder than normal. The net effect of the WNAs was a
decrease in revenues of approximately $1.4 million for the three months ended
December 31, 2000, as compared with an increase of $0.9 million for the three
months ended December 31, 1999. Approximately 375,000 or 34 percent of our
meters in service are located in Georgia, Tennessee and Kentucky. We did not
have WNAs in our other service areas during the three months ended December 31,
2000.

In July 2000, we entered into an agreement to purchase weather hedges for our
Texas and Louisiana operations effective for the 2000-2001 heating season. The
hedges should mitigate the effects of weather that is at least seven percent
warmer than normal in both Texas and Louisiana while preserving any upside.

Status of Pending Acquisition

In April 2000, we entered into a definitive agreement to acquire the gas
operations of Louisiana Gas Service Company, a division of Citizens
Communications Company and LGS Natural Gas Company, a subsidiary of Citizens,
for $375.0 million. In December 2000, the purchase price was adjusted to $365.0
million. The acquisition is anticipated to be completed during the third quarter
of fiscal 2001.

FINANCIAL CONDITION

For the three months ended December 31, 2000, net cash used by operating
activities totaled $14.6 million compared with $37.0 million for the three
months ended December 31, 1999. The decrease in net cash used by operating
activities was primarily the result of an increase in net income and increases
in accounts payable and taxes payable partially offset by increases in accounts
receivable and gas storage inventories. The increase in net income was primarily
due to higher gross profit due to increased volumes and rate increases. This
increase was partially offset by increased operating expenses and higher
interest charges as well as lower other income (expense) as a result of charges
incurred related to our performance based-ratemaking mechanisms and amortization
relating to weather hedges purchased for our Louisiana and Texas operations.

For the three months ended December 31, 2000, net cash used in investing
activities totaled $13.0 million compared with $16.6 million for the three
months ended December 31, 1999. Major cash flows used in investing activities
for the three months ended December 31, 2000 included capital expenditures of
$19.5 million compared with $17.5


                                       18
<PAGE>   19

million for the three months ended December 31, 1999. The capital expenditures
budget for fiscal 2001, excluding acquisitions, is approximately $81.0 million
as compared with actual capital expenditures of $75.6 million for fiscal 2000.
Budgeted capital projects for fiscal 2001 include expenditures for additional
mains, services, meters and equipment. In fiscal 2001, we also plan to complete
the Louisiana acquisition for $365.0 million and the acquisition of the
remaining 55 percent of WMLLC for 1,423,193 restricted shares of our common
stock, subject to adjustment. Capital expenditures and acquisitions for fiscal
2001 are planned to be financed from internally generated funds and financing
activities as discussed below. For the three months ended December 31, 2000, we
received net proceeds of $6.6 million in connection with the sale of certain
utility assets.

For the three months ended December 31, 2000, net cash provided by financing
activities totaled $25.8 million compared with $70.2 million for the three
months ended December 31, 1999. For the three-month period ended December 31,
2000, short-term debt decreased $102.4 million compared with an increase of
$81.1 million for the three months ended December 31, 1999. The decrease was due
to the net proceeds from the equity offering discussed below being used to
reduce the amount of short-term debt outstanding. Repayments of long-term debt
totaled $7.9 million for the three months ended December 31, 2000 compared with
$7.0 million for the three months ended December 31, 1999. We paid $9.3 million
in cash dividends during the three months ended December 31, 2000 compared with
dividends of $8.9 million during the three months ended December 31, 1999. This
reflects increases in the quarterly dividend rate and in the number of shares
outstanding. During the three months ended December 31, 2000, we issued
6,895,853 shares of common stock. In December 2000, we completed our equity
offering of 6,000,000 shares of common stock priced at $22.25 per share. The
underwriters exercised their overallotment option and purchased a total of
6,741,500 shares of our common stock. The net proceeds from the equity offering
totaled approximately $142.0 million after underwriting discounts. The net
proceeds were used to reduce short-term debt outstanding as discussed above.

The following table presents the number of shares issued for the three-month
periods ended December 31, 2000 and 1999:

                                                           Three months ended
                                                              December 31,
                                                       -------------------------
                                                         2000             1999
                                                       -------------------------
Shares issued:
    Employee Stock Ownership Plan                         48,738          40,557
    Direct Stock Purchase Plan                           105,010         200,406
    Outside Directors Stock-for-Fee Plan                     605             517
    Equity Offering                                    6,741,500               -
                                                       -------------------------
      Total shares issued                              6,895,853         241,480
                                                       =========================

We believe that internally generated funds, our credit facilities, commercial
paper program and access to the public debt and equity capital markets will
provide necessary working capital and liquidity for capital expenditures and
other cash needs for the


                                       19
<PAGE>   20

remainder of fiscal 2001. At December 31, 2000, we have $800.0 million in
committed short-term credit facilities, of which $300.0 million serves as a
backup liquidity facility for our commercial paper program. At December 31,
2000, $15.0 million was outstanding under these credit facilities and $132.6
million supported commercial paper outstanding. In addition, at December 31,
2000, we also had $90.0 million of uncommitted short-term lines of credit, none
of which was outstanding.

In December 1999, we filed a universal shelf registration statement with the
Securities and Exchange Commission to issue, from time to time, up to $500.0
million in new common stock and/or debt. In connection with this filing, we also
filed applications for approval to issue securities with six state utility
commissions. We have received approvals from all six required states and the
registration statement has been declared effective. No further state or federal
regulatory approvals will be required before any debt or equity securities may
be issued under the shelf registration statement by us from time to time. As
discussed previously, in December 2000, we issued 6,741,500 shares of common
stock under the shelf registration statement reducing the amount available to be
issued by approximately $150.0 million. At December 31, 2000, we had
approximately $350.0 million available to issue under the shelf registration
statement.

RESULTS OF OPERATIONS

Three Months Ended December 31, 2000, Compared with Three Months Ended December
31, 1999

Operating revenues increased by 97 percent to $442.8 million for the three
months ended December 31, 2000 from $224.5 million for the three months ended
December 31, 1999. The most significant factors contributing to the increase in
operating revenues were a 54 percent increase in average sales price due to the
increased cost of gas and a 27 percent increase in sales and transportation
volumes due to colder weather. During the quarter ended December 2000,
temperatures were 46 percent colder than in the corresponding quarter of the
prior year and were 21 percent colder than the 30-year normal for the quarter.
The total volume of gas sold and transported for the three months ended December
31, 2000 was 68.0 billion cubic feet compared with 53.7 billion cubic feet for
the three months ended December 31, 1999. The average sales price per Mcf sold
increased $2.87 or 54 percent to $8.22 primarily due to an increase in the
average cost of gas. The average cost of gas per Mcf sold increased 87 percent
to $6.29 for the three months ended December 31, 2000 from $3.37 for the three
months ended December 31, 1999. In addition, operating revenues increased due to
the impact of rate increases in Kentucky, Illinois, Amarillo, Texas, and West
Texas, as well as the addition of approximately 48,000 customers in Missouri due
to the Associated Natural Gas acquisition completed in fiscal 2000.

Gross profit increased by 23 percent to $109.9 million for the three months
ended December 31, 2000 from $89.6 million for the three months ended December
31, 1999. The increase in gross profit was due to the increase in volumes sold
to weather sensitive customers and an increase of $1.1 million in transportation
revenues due to higher


                                       20
<PAGE>   21

average transportation revenue per Mcf. In addition, gross profit increased due
to the impact of rate increases and the additional customers discussed
previously. Changes in the cost of gas do not directly affect gross profit.

Operating expenses increased to $61.0 million for the three months ended
December 31, 2000 from $59.4 million for the three months ended December 31,
1999. Operation and maintenance expense increased due to an increase in the
allowance for doubtful accounts. Savings resulting from the continued cost
control initiatives started during fiscal 2000 partially offset this increase.
Taxes other than income increased as a result of increased city franchise taxes,
which are revenue based.

Operating income increased 62 percent for the three months ended December 31,
2000 to $48.9 million from $30.1 million for the three months ended December 31,
1999. The increase in operating income resulted primarily from increased gross
profit described above.

Other income (expense) decreased $4.3 million for the three months ended
December 31, 2000 compared with the three months ended December 31, 1999. This
decrease was due to charges incurred related to our performance based-ratemaking
mechanisms and the amortization of weather hedges purchased for our Louisiana
and Texas operations. In addition, our earnings from our 45 percent interest in
WMLLC decreased due to mark to market accounting under EITF No. 98-10 and the
volatility of current gas prices.

Interest expense increased $1.0 million, or 9 percent, for the three months
ended December 31, 2000 compared with the three months ended December 31, 1999
due to higher weighted average interest rates on short-term debt partially
offset by a slight decrease in the average short-term debt outstanding.

Net income increased for the three months ended December 31, 2000 by $8.7
million to $23.0 million from $14.3 million for the three months ended December
31, 1999. This increase in net income resulted primarily from the increase in
sales volumes due to the colder than normal weather and the impact of rate
increases discussed above.

UTILITY AND NON-REGULATED OPERATING DATA

Our utility business is composed of our five regulated utility divisions:
Energas Division, Greeley Gas Division, Trans La Division, United Cities
Division, Western Kentucky Division and Shared Services. The non-regulated
business includes non-regulated irrigation sales, energy services to large
volume customers, non-regulated underground storage operations, a 45 percent
interest in WMLLC, leasing of buildings and vehicles and non-regulated shared
services. The following table of operating statistics summarizes data of the
utility and non-regulated segments for the three-month periods ended December
31, 2000 and 1999. For further information regarding operating results of the
segments, see Note 5 of notes to condensed consolidated financial statements. As
discussed in our Annual Report on Form 10-K for the year ended September 30,
2000, in August 2000, we combined our propane with the propane operations of
three other


                                       21
<PAGE>   22

companies and the resulting combined joint venture combined its operations with
Heritage Propane Partners, LLC. As a result of this transactions, no information
for the quarter ended December 31, 2000 is presented for propane.




                                       22
<PAGE>   23

                            ATMOS ENERGY CORPORATION
                        CONSOLIDATED OPERATING STATISTICS


                                                Three months ended
                                                   December 31,
                                            --------------------------
                                               2000            1999
                                            --------------------------
METERS IN SERVICE, end of period
    Residential                                977,410         923,083
    Commercial                                 105,375          98,032
    Public authority and other                   7,428           7,380
    Industrial (including agricultural)         14,277          14,518
                                            --------------------------
      Total meters                           1,104,490       1,043,013
    Propane customers                                -          41,401
                                            --------------------------
      Total                                  1,104,490       1,084,414
                                            ==========================
HEATING DEGREE DAYS
    Actual (weighted average)                    1,840           1,287
    Percent of normal                              121%             83%

SALES VOLUMES - MMcf (1)
    Residential                                 28,813          19,929
    Commercial                                  13,266          10,080
    Public authority and other                   2,883           1,833
    Industrial (including agricultural)          7,585           7,310
                                            --------------------------
      Total                                     52,547          39,152
Transportation volumes - MMcf (1)               15,498          14,510
                                            --------------------------
Total throughput - MMcf (1)                     68,045          53,662
                                            ==========================
Propane - Gallons (000's)                            -           6,354
                                            ==========================
OPERATING REVENUES (000's)
Gas sales revenues
    Residential                             $  249,834      $  117,304
    Commercial                                 110,628          52,438
    Public authority and other                  22,080           8,802
    Industrial (including agricultural)         49,320          31,007
                                            --------------------------
      Total gas sales revenues                 431,862         209,551
Transportation revenues                          6,738           5,617
Propane revenues                                     -           7,839
Other revenues                                   4,190           1,451
                                            --------------------------
Total operating revenues                    $  442,790      $  224,458
                                            ==========================
Cost of gas (excluding non-regulated)       $  330,820      $  131,815
                                            ==========================

Average gas sales revenues per Mcf          $     8.22      $     5.35
Average transportation revenue per Mcf      $      .43      $      .39
Average cost of gas per Mcf sold            $     6.29      $     3.37

(1)  Volumes are reported as metered in million cubic feet (MMcf).


                                       23
<PAGE>   24

Item 3.   Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes from the information provided in Item 7A of
our Annual Report on Form 10-K for the year ended September 30, 2000.

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

See Note 2 of notes to condensed consolidated financial statements herein for a
description of legal proceedings.

Item 6.   Exhibits and Reports on Form 8-K

     (a) Exhibits

     A list of exhibits required by Item 601 of Regulation S-K and filed as part
     of this report is set forth in the Exhibits Index, which immediately
     precedes such exhibits.

     (b) Reports on Form 8-K

     We filed a Form 8-K Current Report, Item 5, Other Events, dated December
     14, 2000, announcing that we had entered into a Purchase Agreement with
     Merrill Lynch & Co., on behalf of Merrill Lynch, Pierce, Fenner & Smith
     Incorporated and UBS Warburg LLC, as representatives of the several
     underwriters named in Schedule A of the Purchase Agreement (collectively
     the "Underwriters"), and executed that certain Purchase Agreement in
     connection with the sale by us to the Underwriters of a total of 6,741,500
     shares of our common stock.

     Under Item 7, Financial Statements and Exhibits, an exhibit was attached: a
     copy of the Purchase Agreement dated December 14, 2000.




                                       24
<PAGE>   25


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                         ATMOS ENERGY CORPORATION
                                               (Registrant)




Date: February 8, 2001                   By:  /s/ F.E. MEISENHEIMER
                                            -----------------------------
                                                  F.E. Meisenheimer
                                            Vice President and Controller
                                              (Chief Accounting Officer
                                            and duly authorized signatory)







                                       25
<PAGE>   26

                            EXHIBITS INDEX
                               Item 6(a)

 Exhibit                                                                Page
 Number                      Description                               Number
-------------------------------------------------------------------------------

  10.1*   Atmos Energy Corporation Performance-Based Supplemental
          Executive Benefits Plan Trust Agreement, Effective Date
          December 1, 2000

  10.2*   Amendment Number One to the Atmos Energy Corporation
          Performance-Based Supplemental Executive Benefits Plan,
          Effective Date January 1, 1999

  10.3*   Form of Individual Trust Agreement for the Supplemental
          Executive Benefits Plan

    12    Computation of ratio of earnings to fixed charges

    15    Letter regarding unaudited interim financial information


--------------
* This exhibit constitutes a "management contract or compensatory plan, contract
or arrangement."






                                  26
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>d83952ex10-1.txt
<DESCRIPTION>EXECUTIVE BENEFIT PLAN TRUST AGREEMENT
<TEXT>

<PAGE>   1

                                                                    Exhibit 10.1













                            ATMOS ENERGY CORPORATION

                             PERFORMANCE-BASED SEBP

                                 TRUST AGREEMENT



                        EFFECTIVE AS OF DECEMBER 1, 2000




<PAGE>   2




                                TABLE OF CONTENTS

                                                                            PAGE


ARTICLE I      DEFINITIONS                                                   2

ARTICLE II     ESTABLISHMENT OF TRUST                                        4

ARTICLE III    PAYMENTS TO PLAN PARTICIPANTS AND THEIR
               BENEFICIARIES                                                 5

ARTICLE IV     TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO
               TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT                   6

ARTICLE V      PAYMENTS TO COMPANY                                           8

ARTICLE VI     THE RIGHTS OF THE PARTICIPANTS AND CREDITORS
               TO THE TRUST ESTATE                                           8

ARTICLE VII    INVESTMENT AUTHORITY                                          9

ARTICLE VIII   DUTIES, POWERS AND RESPONSIBILITIES OF TRUSTEE
               AND ASSET MANAGERS                                           10

ARTICLE IX     INDEMNIFICATION; LIABILITIES OF THE TRUSTEE                  15

ARTICLE X      TRUSTEE'S COMPENSATION AND EXPENSES                          16

ARTICLE XI     TAXES                                                        16

ARTICLE XII    RESIGNATION AND REMOVAL OF TRUSTEE;
               APPOINTMENT OF SUCCESSOR                                     16

ARTICLE XIII   AMENDMENT OR TERMINATION                                     17

ARTICLE XIV    MISCELLANEOUS                                                18

ARTICLE XV     EFFECTIVE DATE                                               19



                                        i
<PAGE>   3



                            ATMOS ENERGY CORPORATION

                             PERFORMANCE-BASED SEBP

                                 TRUST AGREEMENT


     THIS ATMOS ENERGY CORPORATION PERFORMANCE-BASED SEBP TRUST AGREEMENT (the
"Trust Agreement") is made this 1st day of December, 2000, between Atmos Energy
Corporation (the "Company"), as Settlor, and Bankers Trust Company, as Trustee,
for the benefit of such employees of the Company as are participants in the Plan
(as defined in Section 1.6 herein) from time to time to provide funds to satisfy
the obligations of the Company to participants under the Plan.

     WHEREAS, Company has adopted the Atmos Energy Corporation Performance-Based
Supplemental Executive Benefits Plan.

     WHEREAS, Company has incurred or expects to incur liability under the terms
of such Plan with respect to the individuals participating in such Plan for
monthly supplemental retirement income and disability benefits and/or death
benefits (the "Supplemental Benefits" or "Benefits");

     WHEREAS, Company wishes to establish a trust (hereinafter called "Trust")
and to contribute to the Trust assets that shall be held therein, subject to the
claims of Company's creditors in the event of Company's Insolvency (as herein
defined) until paid to Plan participants and their beneficiaries in such manner
and at such times as specified in the Plan;

     WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974;

     WHEREAS, it is the intention of Company to make contributions to the Trust
to provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plan;

     WHEREAS, Bankers Trust Company is willing to act as Trustee of the Trust
upon all of the terms and conditions hereinafter set forth;

     NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:



                                      -1-
<PAGE>   4

                                    ARTICLE I

                                   DEFINITIONS

     1.1 "Asset Manager" shall mean, individually or collectively as the context
shall require, the Trustee, with respect to those assets of the Trust allocated
to the Discretionary Fund, or an Investment Manager or the Company with respect
to those assets of the Trust allocated to a Directed Fund to the extent each is
authorized to exercise, discretionary investment authority or control over such
assets under Section 7.1.

     1.2 (a) "Change in Control" of the Company shall be deemed to have occurred
if:

              (i) any "Person" (as defined in 1.2(b)(i) below), other than (1)
         the Company or any of its subsidiaries, (2) a trustee or other
         fiduciary holding securities under an employee benefit plan of the
         Company or any of its Affiliates, (3) an underwriter temporarily
         holding securities pursuant to an offering of such securities, or (4) a
         corporation owned, directly or indirectly, by the shareholders of the
         Company in substantially the same proportions as their ownership of
         stock of the Company, is or becomes the "beneficial owner" (as defined
         in Section 1.2(b)(ii) below), directly or indirectly, of securities of
         the Company (not including in the securities beneficially owned by such
         person any securities acquired directly from the Company or its
         Affiliates) representing 33-1/3% or more of the combined voting power
         of the Company's then outstanding securities, or 33-1/3% or more of the
         then outstanding common stock of the Company, excluding any Person who
         becomes such a beneficial owner in connection with a transaction
         described in subparagraph (iii)(A) below.

              (ii) During any period of two consecutive years (the "Period"),
         individuals who at the beginning of the Period constitute the Board of
         Directors of the Company and any "new director" (as defined in Section
         1.2(b)(iii) below) cease for any reason to constitute a majority of the
         Board of Directors.

              (iii) There is consummated a merger or consolidation of the
         Company or any direct or indirect subsidiary of the Company with any
         other corporation, except if:

                   (A) the merger or consolidation would result in the voting
              securities of the Company outstanding immediately prior thereto
              continuing to represent (either by remaining outstanding or by
              being converted into voting securities of the surviving entity or
              any parent thereof) at least 60% of the combined voting power of
              the voting securities of the Company or such surviving entity or
              any parent thereof outstanding immediately after such merger or
              consolidation; or

                   (B) the merger or consolidation is effected to implement a
              capitalization of the Company (or similar transaction) in which no
              Person is or becomes the beneficial owner, directly or indirectly,
              of




                                      -2-
<PAGE>   5

              securities of the Company (not including in the securities
              beneficially owned by such Person any securities acquired directly
              from the Company or its Affiliates other than in connection with
              the acquisition by the Company or its Affiliates of a business)
              representing 60% or more of the combined voting power of the
              Company's then outstanding securities.

              (iv) The shareholders of the Company approve a plan of complete
         liquidation or dissolution of the Company or an agreement for the sale
         or disposition by the Company of all or substantially all the Company's
         assets, other than a sale or disposition by the Company of all or
         substantially all of the Company's assets to an entity, at least 60% of
         the combined voting power of the voting securities of which are owned
         by the stockholders of the Company in substantially the same
         proportions as their ownership of the Company immediately prior to such
         sale.

         (b) Definitions. For purposes of Section 1.2(a) above,

              (i) "Person" shall have the meaning given in Section 3(a)(9) of
         the Securities Exchange Act of 1934 as modified (the "1934 Act") and
         used in Sections 13(d) and 14(d) of the 1934 Act.

              (ii) "Beneficial Owner" shall have the meaning provided in Rule
         13d-3 under the 1934 Act.

              (iii) "New Director" shall mean an individual whose election by
         the Company's Board of Directors or nomination for election by the
         Company's shareholders was approved by a vote of at least two-thirds of
         the directors then still in office who either were directors at the
         beginning of the Period or whose election or nomination for election
         was previously so approved or recommended. However, "new director"
         shall not include a director whose initial assumption of office is in
         connection with an actual or threatened election contest, including but
         not limited to a consent solicitation relating to the election of
         directors of the Company.

              (iv) "Affiliate" shall have the meaning set forth in Rule 12b-2
         promulgated under Section 12 of the 1934 Act.

     1.3 "Directed Fund" shall mean each portion of the Trust subject to the
discretionary management and control of an Asset Manager other than the Trustee.
If more than one Directed Fund is established under this Trust Agreement,
"Directed Fund" shall also mean the Directed Fund subject to the management and
control of a particular Asset Manager, as the context may require.

     1.4 "Discretionary Fund" shall mean any portion of the Trust subject to the
discretionary management and control of the Trustee.

     1.5 "Investment Manager" shall mean (i) an investment adviser registered
under the Investment Advisers Act of 1940, (ii) a bank as defined in that Act,
or (iii) an insurance company qualified to manage, acquire or dispose of any
assets of the trusts under the laws of one or more state.



                                      -3-
<PAGE>   6

         1.6 "Plan" shall mean the Atmos Energy Corporation Performance-Based
Supplemental Executive Benefits Plan, as amended from time to time.

         1.7 "Trust" shall mean the Atmos Energy Corporation Performance-Based
SEBP Trust established and continued under this Trust Agreement.

         1.8 "Trustee" shall mean Bankers Trust Company and its successors and
assigns, and any successor trustee of the Trust acting at the time in question.

                                   ARTICLE II

                             ESTABLISHMENT OF TRUST

     2.1 The Company hereby deposits with Trustee in trust One Hundred Dollars
($100.00), which shall become the principal of the Trust, to be held,
administered and disposed of by Trustee as provided in this Trust Agreement.

     2.2 The Trust shall be revocable. Notwithstanding the foregoing, the Trust
shall become irrevocable thirty (30) days following the issuance of a favorable
private letter ruling regarding the Trust from the Internal Revenue Service.

     2.3 The Trust is intended to be a grantor trust, of which Company is a
grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), and
shall be construed accordingly. The Company acknowledges that determination of
the status of the Trust as a grantor trust has been made by the Company, and
Trustee assumes no responsibility in this regard.

     2.4 The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of the Company and shall be used exclusively
for the uses and purposes of Plan participants and general creditors as herein
set forth. Plan participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against the
Company. Any assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the event of
Insolvency, as defined in Section 4.1 herein.

     2.5 The Company shall make such deposits as provided for in the Plan and
may, in its sole discretion, at any time, or from time to time, make additional
deposits of cash or other property acceptable to the Trustee in trust with
Trustee to augment the principal to be held, administered and disposed of by
Trustee as provided in this Trust Agreement. Notwithstanding the foregoing, upon
and after a Change in Control, Trustee shall be responsible for assuring that
deposits are made in accordance with the Plan, and it may rely on written
certifications of the actuary employed with respect to the Plan as to the funded
status of the Trust and the Company's contribution obligations under the Plan.
Prior to a Change in Control, the Trustee shall have no responsibility therefor.



                                      -4-
<PAGE>   7
                                   ARTICLE III

              PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES

     3.1 The Company shall be solely responsible for keeping accurate books and
records with respect to the Plan participants and beneficiaries, their
compensation and rights and interests in the Trust pursuant to the Plan. As soon
as practicable after the establishment of this Trust or the amendment of the
Plan, the Company shall provide the Trustee with copies of the Plan and any
amendments. The Trustee shall not be required to maintain any separate records
or accounts with respect to any Plan participant or beneficiary, and any records
or accounts required to be maintained pursuant to the terms of the Plan shall be
the responsibility of the Company.

     3.2 Trustee shall make payments of Supplemental Benefits to Plan
participants from the assets of the Trust, if and to the extent such assets are
available for distribution, in accordance with the Plan, at all times the
Company is not Insolvent. Trustee shall not be required to make payments unless
notified by the Company or the Plan participant that Benefits are then due and
owing to the Plan participant, and it has received a written certification of
the time for payment of Benefits and the amount of Benefits due and owing to the
Plan participant at such time, all in accordance with the Plan, prepared by the
actuary employed by the Company to calculate the Supplemental Benefits, and has
received sufficient information that indicates the amount of federal, state
and/or local taxes to be withheld from such payment and the form in which such
amount is to be paid (as provided for or available under the Plan). In addition,
the Trustee shall make provision for the payment and reporting of any federal,
state or local taxes that may be required to be withheld with respect to the
payment of Benefits. The actuary shall also provide written certification to the
Trustee of any changes in the amount of Benefits payable to a Beneficiary from
time to time. Following a Change in Control, if no actuary is employed by the
Company, the Trustee shall employ an actuary. The Trustee shall be fully
protected in relying on the written certification of the actuary for all
purposes of this Agreement.

     3.3 The entitlement of a Plan participant or his or her beneficiaries to
Benefits under the Plan shall be determined by the Company or such party (other
than the Trustee) as the Company shall designate under the Plan, and any claim
for such Benefits shall be considered and reviewed under the procedures set out
in the Plan. Except as set forth in this Trust Agreement, the Trustee shall have
no responsibility with regard to administration of the Plan. Without limiting
the generality of the foregoing, the Trustee shall have no responsibility should
the Trust have insufficient assets from which to make any distribution called
for under the Plan, the Trustee shall have no responsibility to interpret the
provisions of the Plan, and the Trustee shall have no responsibility for
determining whether any Plan participant or their beneficiary has become
entitled to any distribution under the Plan, or the amount thereof, and the
Trustee shall be entitled to rely solely upon the accuracy, timeliness and
completeness of the Benefit information delivered to it by the actuary.

     3.4 The Company may make payment of Supplemental Benefits directly to Plan
participants or their beneficiaries as they become due under the terms of the
Plan. In such event, the Company shall also provide for the reporting,
withholding and payment of any federal, state or local taxes that may be
required to be withheld with respect to such Benefit payments. The Company shall
notify Trustee of its decision to make payment of Benefits directly prior to the
time amounts are payable to participants or their


                                      -5-
<PAGE>   8
beneficiaries. In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of Benefits in accordance with the
terms of the Plan, the Company shall make the balance of each such payment as it
falls due. Trustee shall notify the Company where principal and earnings are not
sufficient to pay Benefits as they became due. The Company shall provide the
Trustee with a schedule of all Benefits that have been paid by the Company
directly to Participants and a schedule of all tax withholding payments made by
it to the taxing authorities within fifteen (15) days after the end of the month
in which such payments have been made.

     3.5 The Trustee shall notify the Company periodically of any returned or
undeliverable payments to Plan participants or their beneficiaries. Any payments
remaining unclaimed for six (6) months after such notice has been given to the
Company shall be returned to the Trust.

     3.6 The Trustee shall have sole responsibility with respect to all payments
made from the Trust for the payment of all withholding taxes to, and the filing
of all required tax returns with, the appropriate taxing authority and shall
furnish each Participant with the appropriate tax information form evidencing
such payment and the amount thereof.

     3.7 It is expressly acknowledged that Employee (or if Employee is dead, his
beneficiaries under the Plan) is a third-party beneficiary under this Trust
Agreement and, as such, shall have the right to enforce the terms of this
Agreement as if he were a party hereto.

                                   ARTICLE IV

       TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN
                              COMPANY IS INSOLVENT

     4.1 Trustee shall cease payment of Benefits to Plan participants and their
beneficiaries if the Company is Insolvent. The Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) the Company is unable to
pay its debts as they become due, or (ii) the Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.

     4.2 At all times during the continuance of this Trust, as provided in
Sections 2.4 and 6.1 hereof, the principal and income of the Trust shall be
subject to claims of general creditors of the Company under federal and state
law as set forth below.

         (a) The Board of Directors and the Chief Executive Officer of the
     Company shall have the duty to inform Trustee in writing of the Company's
     Insolvency. The Company shall also have the duty to respond to any inquiry
     from the Trustee regarding the Company's possible Insolvency, if the
     Trustee has an obligation to determine whether the Company is Insolvent. If
     a person claiming to be a creditor of the Company alleges in writing to the
     Trustee that the Company has become Insolvent, Trustee shall determine
     whether the Company is Insolvent and, pending such determination, Trustee
     shall discontinue payment of Supplemental Benefits to Plan participants or
     their beneficiaries. In determining whether or not the Company is
     Insolvent, Trustee may rely on a written statement signed by the Company,
     together with the evidence supporting such statement that is satisfactory
     to the Trustee, that the Company is not Insolvent, or may await receipt of
     an order




                                      -6-
<PAGE>   9

     from a regulatory agency or court of competent jurisdiction directing
     disposition of the Trust assets.

         (b) Unless Trustee has actual knowledge of the Company's Insolvency, or
     has received notice from the Company or a person claiming to be a creditor
     of the Company alleging that the Company is Insolvent, Trustee shall have
     no duty to inquire whether the Company is Insolvent. Trustee may in all
     events rely on such evidence concerning the Company's solvency as may be
     furnished to Trustee and that provides Trustee with a reasonable basis for
     making a determination concerning the Company's solvency. Specifically, the
     Trustee may rely conclusively upon, and shall be protected in relying upon,
     court records submitted to it showing whether the Company is Insolvent, a
     current report or statement from a nationally recognized credit reporting
     agency submitted to it showing whether such Company is Insolvent, or the
     written notice with supporting evidence where appropriate, submitted to it
     from the Company as provided in this Section 4.2 stating that the Company
     is or is not Insolvent. For purposes of this Trust, knowledge and
     information regarding the Company which is not in the possession of
     employees of the Trustee's Trust Department shall not be imputed to the
     Trustee.

         (c) If at any time the Trustee has determined that the Company is
     Insolvent, Trustee shall discontinue payments to the Company's Plan
     participants or their beneficiaries and shall hold the assets of the Trust
     for the benefit of the Company's general creditors. Nothing in this Trust
     Agreement shall in any way diminish any rights of Plan participants or
     their beneficiaries to pursue their rights as general creditors of the
     Company with respect to Benefits due under the Plan or otherwise.

         (d) Trustee shall resume the payment of Benefits to Plan participants
     or their beneficiaries in accordance with Article III of this Trust
     Agreement only after the Trustee has determined that the Company is not
     Insolvent (or is no longer Insolvent), or if a regulatory agency or court
     of competent jurisdiction otherwise so orders.

     4.3 Provided that there are sufficient assets, if Trustee discontinues the
payment of Benefits from the Trust pursuant to Section 4.2 hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.

     4.4 In the case of the Trustee's actual knowledge of or determination that
the Company is Insolvent, Trustee shall deliver the assets of the Trust to
satisfy claims of the Company's general creditors as directed by a regulatory
agency or a court of competent jurisdiction.

     4.5 The establishment and funding of this Trust by the Company is solely
for the purpose of facilitating payment of Supplemental Benefits to participants
and their beneficiaries under the Plan, but in no way shall the establishment or
existence of this Trust relieve the Company of its obligations under the Plan,
impose any additional



                                      -7-
<PAGE>   10

obligation on the Company separate and apart from those assumed by the Company
under the Plan, or increase the rights and benefits of the Plan participants and
their beneficiaries.

                                    ARTICLE V

                               PAYMENTS TO COMPANY

     5.1 Except as provided in Article IV hereof and this Section 5.1, after the
Trust has become irrevocable, the Company shall have no right or power to direct
Trustee to return to the Company or to divert to others any of the Trust assets
before all payment of Benefits have been made to Plan participants and their
beneficiaries pursuant to the terms of the Plan. Notwithstanding any provision
of this Trust Agreement to the contrary and prior to a Change in Control, if it
is determined by the Plan's actuary and so certified, that certain Trust assets
will never be required to pay Supplemental Benefits to Plan participants or
beneficiaries (because, for example, of any difference between actual
requirements and expected actuarial requirements), such excess assets shall be
returned to Company, but only to the extent that such return does not cause the
value of the total Trust assets to be less than one hundred thirty percent
(130%) of the present value of projected Supplemental Benefits, with such
present value to be determined on the basis of actuarial assumptions applied by
mutual agreement of the Company and the actuary. Upon and after a Change in
Control, such assets may be returned to Company only after all Supplemental
Benefits have been fully distributed to or on behalf of all Plan participants
and beneficiaries.


                                   ARTICLE VI

                  THE RIGHTS OF THE PARTICIPANTS AND CREDITORS
                               TO THE TRUST ESTATE

     6.1 As provided in Section 2.4 hereof, neither the Plan participants nor
anyone claiming under such participants shall have any present ownership or
present beneficial interest (including a security interest) or preferred claim
of any kind in the assets of the Trust prior to the time provided in the Plan
for the payment of Supplemental Benefits. Prior to that time, the rights of the
participants under the Plan and the rights of anyone claiming under the
participants shall be limited to general unsecured, contractual rights against
the Company. As a precondition to the execution of this Trust Agreement by the
Company, each person meeting the qualification requirements of Section 2.1 of
the Plan shall have waived in writing any priority such person may have under
any state or federal law with respect to any claims such person may have against
the Company under the Plan or the Trust Fund beyond the rights such person would
have as a general creditor of the Company. After the execution of this Trust
Agreement by the Company, any person who thereafter qualifies for coverage under
the Plan shall, as provided for in Section 2.1 of the Plan, execute the written
waiver described herein prior to becoming a participant in the Plan. The Trustee
shall not be responsible for determining whether any waiver referred to in this
Section 6.1 has been obtained.

     6.2 As provided in Section 14.2 hereof, the assets of the Trust shall not
be subject to legal process or the claims of any creditor of the participants or
of anyone claiming under the participants, whether such claim arises out of any
debts, contracts,




                                      -8-
<PAGE>   11

liabilities (including claim for child support or alimony), torts or any other
source whatsoever.

                                   ARTICLE VII

                              INVESTMENT AUTHORITY

     7.1 Discretionary authority for the management and control of the assets of
the Trust may be retained, allocated or delegated, as the case may be, for one
or more purposes, to and among the Asset Managers by the Company in its absolute
discretion; provided, however, that for a period of three (3) years following a
Change in Control the Company may not remove or appoint an Asset Manager without
the written consent of a majority of the Plan participants. Any investment
policy, and any related guidelines, established by the Company from time to
time, shall be communicated to the affected Asset Manager and monitored by the
Company. The assets of the Trust shall be invested and reinvested, without
distinction between principal and income, at such time or times in such
investments pursuant to such investment strategies or courses of action and in
such shares and proportions, as each Asset Manager, in its sole discretion,
shall deem advisable, subject to such policies and guidelines, if any.

     7.2 The Company shall promptly notify the Trustee in writing of the
appointment or removal of an Asset Manager and shall specify the portion of the
Trust to be managed by such Asset Manager. Each Asset Manager shall have sole
and complete investment responsibility for the assets of the Trust that are
subject to its discretionary authority or control and the Trustee shall receive,
hold and transfer assets purchased or sold by the Asset Manager in accordance
with the directions of such Asset Manager. The Trustee shall be under no duty or
obligation to review or to question any direction of any Asset Manager, or to
review the securities or any other property held in any Directed Fund with
respect to prudence, proper diversification or compliance with any limitation on
an Asset Manager's authority under this Trust Agreement or the terms of the
Plan, any investment policies and guidelines, or any agreement entered into
between the Company and the Asset Manager or imposed by applicable law, or to
make any suggestions or recommendations to any Asset Manager or the Company with
respect to the retention or investment of any asset in a Directed Fund. The
Trustee shall have no authority to take any action or to refrain from taking any
action with respect to any asset of a Directed Fund unless and until it is
directed to do so by the Asset Manager of such Directed Fund or the Company.

     7.3 The Trustee will have no responsibility for any asset allocated to a
Directed Fund upon the resignation or removal of an Asset Manager unless and
until the Trustee has been notified in writing by the Company that the Asset
Manager's authority will be terminated or relinquished, and the Trustee has
agreed in writing to become an Asset Manager or that such assets are to be
integrated with a Discretionary Fund, as the case may be. In no event shall the
Trustee be liable for any losses to the Trust resulting from the disposition of
any investment made for a Directed Fund or for the retention of any illiquid or
unmarketable investment or for the holding of any other asset acquired therefor
if the Trustee is unable to dispose of such investment because of any securities
laws restrictions or if an orderly liquidation of such investment is difficult
under prevailing conditions, or for failure to comply with any investment or
diversification limitations imposed by the Company, or for any other violation
of the terms of this Trust Agreement, any Plan or applicable law or laws, as a
result of the addition of such assets to the Discretionary Fund.



                                      -9-
<PAGE>   12

                                  ARTICLE VIII

                 DUTIES, POWERS AND RESPONSIBILITIES OF TRUSTEE
                               AND ASSET MANAGERS

     8.1 Trustee shall perform all of its fiduciary duties with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims; provided,
however, that nothing herein shall be construed to impose any responsibility on
the Trustee with respect to transactions effected or assets managed within a
Directed Fund or any other duty with respect to which the Trustee has no
responsibility under this Agreement.

     8.2 Without in any way limiting the powers and discretions conferred upon
the Asset Managers by the other provisions of this Trust Agreement or by law,
each Asset Manager shall have the power to invest and reinvest the assets of the
Trust, in its sole discretion, in Securities or Other Property. "Securities or
Other Property" means investments in any properties, real or personal or mixed,
wherever situated, including, but not limited to, preferred and common stocks or
any other interest in any corporation; securities; life insurance contracts;
governmental or corporate notes, bonds, or obligations; trust and participation
certificates; leaseholds, beneficial interests, fee titles, mortgages, deeds of
trust, leases on real property, contracts to sell real property, and other
interests in realty, shares or interests in real estate investment trusts,
common trust funds and mutual funds; insurance and annuity policies; and any
other evidence of indebtedness or ownership, and any other property of any kind
or nature whatsoever (unless prohibited by law under a provision which may not
be waived); provided, however, that securities issued by the Company or any
affiliate of the Company are not "Securities or Other Property." In no event may
an Asset Manager invest in securities (including stock or rights to acquire
stock) or obligations issued by the Company, other than a de minimis amount held
in common investment vehicles in which such Asset Manager invests. All rights
associated with assets of the Trust shall be exercised by the Asset Manager or
the person designated by the Asset Manager, and shall in no event be exercisable
by or rest with Plan participants.

     When acting hereunder, except as provided otherwise by this Section 8.2
hereof, Asset Manager shall have the following powers with respect to any and
all monies and Securities or Other Property at any time held by Trustee and
constituting part of the assets of the Trust hereunder:

         (a) To purchase or subscribe for Securities or Other Property and to
     retain them in trust; to sell any Securities or Other Property at any time
     held in the Trust at either public or private sale for cash or other
     consideration or on credit at such time or times and on such terms and
     conditions as may be deemed appropriate; to exchange such Securities or
     Other Property and to grant options for the purchase or exchange thereof,
     and to convey, partition, or otherwise dispose of, with or without
     covenants, including covenants of warranty of title, any Securities or
     Other Property free of all trusts.

         (b) To oppose, or consent to and participate in, any plan of
     reorganization, consolidation, merger, combination, or other similar plan;
     to



                                      -10-
<PAGE>   13
     oppose or to consent to any contract, lease, mortgage, purchase, sale, or
     other action by any corporation pursuant to such plan, and to accept and
     retain any Securities or Other Property issued under any such plan; to
     deposit any Securities or Other Property with any protective,
     reorganization or other similar committee; to delegate discretionary power
     thereto and to pay and agree to pay any part of Trustee's expenses and
     compensation and any assessments levied with respect to any such Securities
     or Other Property so deposited.

         (c) To exercise all conversion and subscription rights pertaining to
     any Securities or Other Property.

         (d) To collect and receive any and all monies and Securities or Other
     Property of whatsoever kind or nature due or owing or belonging to the
     Trust, and to give full discharge and acquittance therefor.

         (e) To exercise all voting rights with respect to any investment held
     in the Trust, and, in addition thereto, to grant proxies, discretionary or
     otherwise, to appoint one or more individuals or corporations or voting
     trustees under voting trust agreements and to delegate to such voting
     trustees discretion to vote.

         (f) To acquire any real estate by purchase or lease, or as the result
     of any foreclosure, liquidation, or other salvage or any investment
     previously made, or otherwise; and to manage, operate, sell, improve, or
     demolish any buildings in whole or in part, and to erect buildings,
     partition, mortgage, or lease for any term or terms of years, even though
     such period extends beyond the term of the Trust, grant options to renew or
     purchase, any such real estate, upon such terms and conditions as may be
     deemed proper.

         (g) To borrow money from others for such purposes, including payment of
     Benefits hereunder, as may be deemed proper, and for the sum or sums so
     borrowed or advanced, Asset Manager may issue the Trust's promissory note
     as investment manager and secure the repayment thereof by creating a lien
     upon any assets of the Trust.

         (h) To acquire property returning no income or slight income for such
     period as an Asset Manager shall deem advisable; to retain any assets which
     shall be delivered from the trustee of a prior trust; to retain in cash or
     other property unproductive of income any amount of the Trust as deemed
     advisable.

         (i) To invest in interest-bearing deposits in Asset Manager's or an
     affiliate of Asset Manager's, commercial banking department, including, but
     not limited to, investments in time deposits, savings deposits,
     certificates of deposit, or time accounts which bear a reasonable rate of
     interest.

         (j) To surrender any life insurance contract held in Trust and, except
     as provided in Section 8.10, to exercise any incident of ownership with
     respect to any such life insurance contract.



                                      -11-
<PAGE>   14

     8.3 In addition, the Trustee is hereby authorized

         (a) To cause any Securities or Other Property to be registered in, or
     transferred into, Trustee's name as Trustee or held in the name of one or
     more of Trustee's nominees or to retain them unregistered or in form
     permitting transferability by delivery, but the books and records of
     Trustee shall at all times show such Securities or Other Property are part
     of the Trust; to deposit or arrange for the deposit of securities in a
     qualified central depository even though, when so deposited, such
     securities may be held in the name of the nominee of such depository with
     other securities deposited therein by other persons, or to deposit or to
     arrange for the deposit of any securities issued by the United States
     Government, or any agency or instrumentality thereof, with a federal
     reserve bank (provided that the books and records of Trustee shall at all
     times show that all such securities are part of the Trust).

         (b) To employ on behalf of the Trust suitable agents, accountants, and
     counsel, who may be counsel to the Company or the Trustee, to assist it in
     determining or performing its duties or obligations hereunder, and to pay
     their reasonable expenses and compensation from the Trust to the extent not
     paid by the Company.

         (c) To settle, compromise, or submit to arbitration, any claims, debts,
     or damages due or owing to or from the Trust, to commence or defend suits
     or legal proceedings whenever, in Trustee's judgment, any interest of the
     Trust so requires, and to represent the Trust in all suits or legal
     proceedings in any court of law or equity or before any other body or
     tribunal.

         (d) Pending investment of cash, to hold such cash in Trustee's, or an
     affiliate of Trustee's, non-interest bearing accounts; and to hold such
     non-interest bearing cash balances as Trustee shall deem reasonable or
     necessary to meet anticipated distributions from or administrative costs of
     the Trust.

         (e) Generally to do all such acts, to make, execute, acknowledge, and
     deliver any and all deeds, leases, assignments, documents of transfer, and
     conveyances, receipts, releases, agreements, and without limitation by the
     foregoing, to execute any and all other instruments, take all such
     proceedings and exercise all such rights and powers with relation to any
     Securities or Other Property constituting a part of the Trust to the same
     extent as an individual might do with respect to his own property.

     8.4 When the Trustee delivers property against payment, delivery of the
property and receipt of payment may not be simultaneous. In such case, the risk
of non-receipt of payment shall be the Trust's, and the Trustee shall have no
liability therefor. All credits to the Trust of the anticipated proceeds of
sales and redemption of property and of anticipated income from property shall
be conditional upon receipt by the Trustee of final payment and may be reversed
to the extent final payment is not received. At the discretion of the Trustee,
the Trust may make use of such conditional credits. To the extent such credits
do not become unconditional by receipt of final payment, the Trust shall
reimburse the Trustee upon demand for the amount of such conditional credits.


                                      -12-
<PAGE>   15
When the Trustee is to receive property, it is authorized to accept documents in
lieu of such property as long as such documents contain the agreement of the
issuer thereof to deliver such property to the Trustee. The Trustee may, in its
discretion, advance funds to the Trust to facilitate the settlement of any
trade. In the event of such an advance, the Trustee shall immediately reimburse
the Trust for the amount thereof.

     8.5 During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.

     8.6 Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions hereunder. All records
relating thereto shall be open to inspection and audit at all reasonable times
by the Company or by any person designated by the Company. At such intervals as
the Company and the Trustee mutually agree, and as of the date of the removal or
resignation of Trustee, Trustee shall deliver to the Company a written account
of its administration of the Trust, setting forth all investments, receipts,
disbursements and other transactions effected by Trustee during the period from
the date of Trustee's last such account, including a description of all
securities and investments purchased and sold with the cost or net proceeds of
such purchases or sales (accrued interest paid or receivable being shown
separately), and showing all cash, securities and other property held in the
trust at the close of such period. Any such account shall be deemed an account
stated and accepted and approved by the Company, and the Trustee shall be
relieved and discharged to all persons with respect to all matters and things
contained in such statement as though such account had been settled and allowed
by a judgment or decree of a court of competent jurisdiction in an action or
proceeding to which the Company and all persons having any beneficial interest
in the Trust were parties, unless the Company shall have filed with the Trustee
specific written exceptions or objections to any such statement within ninety
(90) days of receipt thereof by the Company.

     8.7 The Trustee will determine the value of the Trust as of each reporting
date under Section 8.6. Except in the case of an investment in which amortized
cost is the valuation method designated, assets will be valued at their market
values at the close of business on such date, or, in the absence of readily
ascertainable market values, at such values as the Trustee determines in
accordance with methods consistently followed and uniformly applied or obtained
as provided below. The Company acknowledges and agrees that in the normal course
of valuing assets, the Trustee may rely on pricing information provided by
recognized pricing services which the Trustee deems to be reliable or provided
by the Asset Manager or dealers or sponsors of pooled investment vehicles
("dealers"), and that the Trustee does not verify, warrant or represent the
accuracy or completeness of such information, and shall not be liable for any
diminution or inflation in the value of any assets as a result of any inaccurate
or incomplete information furnished or transmitted by such pricing services or
the Asset Managers or dealers. The Trustee may rely for all purposes of this
Trust Agreement on the latest valuation information submitted to it even if such
information predates the purported valuation date. The Company will provide or
cause the Asset Managers to provide the Trustee with all information needed by
the Trustee to value such assets and to report and account under this Trust
Agreement.

     8.8 The Trustee shall have the right, at the expense of the Trust, to apply
at any time to a court of competent jurisdiction for judicial settlement of any
account of the Trustee not previously settled as herein provided or for the
determination of any question of construction or for instructions. In any such
action or proceeding it shall be necessary to join as parties only the Trustee
and the Company (although the Trustee may also join



                                      -13-
<PAGE>   16

such other persons as it may deem appropriate), and any judgment or decree
entered therein shall be conclusive.

     8.9 A third party dealing with Trustee shall not make, or be required by
any person to make, any inquiry concerning the authority of Trustee to take or
omit any action or whether Trustee has been authorized or directed by the
Company, but each such person shall be fully protected in relying upon the
certificates of Trustee that Trustee has authority to take such proposed action.
No third party shall be required to follow the application by Trustee of any
monies or Securities or Other Property paid or delivered to Trustee.

     8.10 To the extent not inconsistent with the express provisions hereof,
enumeration of any power herein shall not be by way of limitation but shall be
cumulative and construed as full and complete power in favor of Trustee. In
addition to the authority specifically herein granted, except as provided in
Article VII, Trustee shall have such power to do all acts as may be deemed
necessary for full and complete management of the Trust and appropriate to carry
out the purposes of this Trust. Trustee shall have, without exclusion, all
powers conferred on trustees by applicable law, unless expressly provided
otherwise herein, provided, however, that if an insurance policy is held as an
asset of the Trust, Trustee shall have no power to name a beneficiary of the
policy other than the Trust, to assign the policy (as distinct from conversion
of the policy to a different form) other than to a successor Trustee, or to loan
to any person the proceeds of any borrowing against such policy. None of the
powers granted to an Asset Manager under this Article, however, shall be
construed to allow an Asset Manager to purchase, exchange, or otherwise deal
with or dispose of the corpus or the income from the corpus for less than
adequate consideration.

     8.11 The Trustee shall be fully protected in relying upon a certification
by the Board of Directors of the Company signed by a majority of all the members
thereof, or by any member, or the secretary thereof, if designated by all such
members to act for the Board of Directors of the Company with respect to any
written instruction, written direction or written approval by said Board, except
that such secretary or individual member shall not be authorized to direct any
distribution to himself. The Trustee shall be protected in relying upon a
specimen signature of each member and the secretary, and in continuing to rely
upon such certification until a subsequent certification is filed with the
Trustee, or in relying upon the certification by the Company or the Company's
designee in lieu of said Board of Directors, in all respects for the
administration of the Plan of which this Trust is a part. The Company shall
cause each Investment Manager to file with the Trustee a certified list of the
names and specimen signatures of those individuals authorized to direct the
Trustee on its behalf.

     8.12 Any action by the Company shall be evidenced by a written instrument
executed in accordance with Section 8.11 hereof. The Trustee shall be fully
protected in acting upon any certifications, instructions, notices, directions,
requests or approvals and other communications ("Instructions"), howsoever
transmitted, received by the Trustee and purporting to be from the Company or an
Investment Manager which the Trustee reasonably believed to be from such person,
each such Instruction constituting a certification by the person so giving that
such Instruction is in conformity with the terms of the Plan, the Trust and/or
other related documents, and the Trustee shall be fully protected in omitting to
act in the absence of Instructions. The Trustee shall have the right to assume,
in the absence of notice in writing to the contrary, that no event



                                      -14-
<PAGE>   17

constituting a change in, or terminating, the authority of any person, including
any Investment Manager, has occurred.

     8.13 Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that could give
this Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.

                                   ARTICLE IX

                   INDEMNIFICATION; LIABILITIES OF THE TRUSTEE

     9.1 The Trustee shall be held harmless by the Company from and against any
claim, liability, loss, damage or expenses (including, but not limited to,
reasonable attorneys' fees and expenses incurred in preparing, investigating or
defending any claim) that may be asserted against the Trustee arising out of any
action taken or omitted by the Trustee pursuant to this Trust Agreement, except
due to the Trustee's own negligence or willful misconduct. If the Company does
not pay any claim, liability, loss, damage or expense under this Section or
Article X, the Trustee may obtain payment from the Atmos Energy Corporation
Legal Defense Fund Trust of which Trustee is the trustee for all amounts other
than the payment of any Supplemental Benefits due under the Plan, but until so
paid such amounts shall constitute a charge against, and may be paid from this
Trust. Notwithstanding the foregoing provisions of this Section 9.1, the Company
shall be and remain liable for any Benefits due and owing under the Plan.

     9.2 If the Trustee undertakes or defends any claim, litigation, action,
proceeding or appeal arising in connection with this Trust unless any such
defense shall be due to the Trustee's own neglect or willful misconduct, the
Company agrees to indemnify the Trustee against the Trustee's costs, expenses,
losses, damages, and liabilities (including, without limitation, reasonable
attorneys' fees and expenses incurred in preparing, investigating or defending
any claim) relating thereto and to be primarily liable for such payments, and to
make periodic payments in respect of such fees and expenses during the course of
any such proceedings. In any action taken by the Trustee pursuant to this
Section 9.2, Section 8.3(c) or otherwise, the Trustee shall be indemnified by
the Company or, if not, the Trustee may obtain payment from the Atmos Energy
Corporation Legal Defense Fund Trust, but until so paid shall constitute a
charge against, and may be paid from this Trust.

                                    ARTICLE X

                       TRUSTEE'S COMPENSATION AND EXPENSES

     10.1 The Trustee shall be paid such reasonable compensation as shall from
time to time be agreed upon in writing by the Company and the Trustee. In
addition, the Trustee shall be reimbursed for any reasonable expenses, including
reasonable accounting and legal fees incurred by it as Trustee. Company shall
pay all such administrative and Trustee's fees and expenses. If not so paid,
such fees and expenses shall be paid from the Atmos Energy Corporation Legal
Defense Fund Trust, but until so paid shall constitute a charge against, and may
be paid from this Trust.



                                      -15-
<PAGE>   18

                                   ARTICLE XI

                                      TAXES

     11.1 All income, deductions and credits attributable to the Trust belong to
the Company and will be included on the Company's income tax returns. The
Company shall pay any Federal, state, local or other taxes imposed or levied
with respect to the assets and/or income of the Trust or any part thereof under
existing or future laws. Upon furnishing the Trustee with evidence reasonably
required by the Trustee of any such tax payments made directly by the Company,
the Company shall be entitled to receive reimbursement from the assets of the
Trust for the full amount of such taxes paid by it. The Trustee shall promptly
notify the Company of any notice it receives relating to any taxes imposed or
levied with respect to the assets and/or income of the Trust. If the Trustee
receives notice that any such taxes are not timely paid by the Company, the
Trustee shall pay such taxes from the assets of the Trust to the extent
sufficient therefor, prior to any payments to Participants, after notifying the
Company as herein provided. As provided in Article III, the Trustee shall deduct
any taxes required to be withheld with respect to any payments made to
Participants pursuant to the Trust, with any such taxes being paid out of the
Trust.

                                   ARTICLE XII

                       RESIGNATION AND REMOVAL OF TRUSTEE;
                            APPOINTMENT OF SUCCESSOR

     12.1 Trustee shall serve until a successor shall be appointed. Trustee may
resign at any time by written notice to the Company, which shall be effective
thirty (30) days after receipt of such notice unless the Company and Trustee
agree otherwise. The Company may remove Trustee at any time upon giving thirty
(30) days' written notice to Trustee; however, for a period of three years
following a Change in Control any such removal shall require the written consent
of a majority of the Plan participants at the time of such removal. In either
case, such notice may be wholly or partially waived by the party to whom it is
due.

     12.2 Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor Trustee.
The Trustee shall use its best efforts to complete the transfer within thirty
(30) days after receipt of notice of resignation, removal or transfer, unless
the Company extends the time limit.

     12.3 If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 12.4 hereof, by the effective date of resignation or
removal under Section 12.1 hereof. If no such appointment has been made, Trustee
may apply to a court of competent jurisdiction for appointment of a successor or
for instructions. All expenses of Trustee in connection with the proceeding
shall be allowed as administrative expenses of the Trust.

     12.4 If Trustee resigns or is removed in accordance with Section 12.1
hereof, the Company may appoint any third party, such as a bank trust department
or other party that may be granted corporate trustee powers under state law, as
a successor Trustee; however, for a period of three years following a Change in
Control any such appointment



                                      -16-
<PAGE>   19

shall require the written consent of a majority of the Plan participants at the
time of such appointment. The appointment shall be effective when accepted in
writing by the new Trustee. The appointment of a new Trustee shall be by a
written instrument, duly acknowledged, delivered to the Trustee so removed, to
the successor Trustee, and to the Company. Upon resignation or removal of
Trustee, Trustee shall refund any unearned portion of any fee or compensation
previously collected by Trustee hereunder. The resigning or removed Trustee,
upon receipt of acceptance in writing of the Trust by the successor Trustee,
must execute all documents and do all acts reasonably necessary to vest the
title of record in any successor Trustee. The successor Trustee shall have the
same powers and duties as those conferred upon Trustee hereunder.

                                  ARTICLE XIII

                            AMENDMENT OR TERMINATION

     13.1 This Trust Agreement may be amended by a written instrument executed
by Trustee and the Company; however, for a period of three years following a
Change in Control any such amendment shall require the written consent of a
majority of the Plan participants at the time of such amendment. If any such
amendment is made at the request or direction of a person who has entered into
an agreement with the Company, the consummation of which would constitute a
Change in Control, or was otherwise in connection with or in anticipation of a
Change in Control (whether or not the Change in Control ever occurs), then for
all purposes hereof, such amendment shall be deemed to have been made following
a Change in Control. Notwithstanding the foregoing, the Company shall ensure
that no such amendment shall conflict with the terms of the Plan or shall make
the Trust revocable after it has become irrevocable in accordance with Section
2.2 hereof.

     13.2 The Trust shall not terminate until the date on which all Plan
participants and their beneficiaries are no longer entitled to Supplemental
Benefits pursuant to the terms of the Plan, unless sooner revoked in accordance
with Section 2.2 hereof; provided, however, the Trust shall terminate prior to
such date if and when all of the assets of the Trust are consumed in
satisfaction of the claims of the general creditors of the Company pursuant to
Article IV. Upon satisfaction of all liabilities under the Plan with respect to
all participants and beneficiaries, the Company, pursuant to a resolution of its
Board of Directors, may terminate the Trust by delivery to the Trustee of (i) a
certified copy of such resolution, (ii) a certification of the Plan's enrolled
actuary confirming that all liabilities under the Plan have been satisfied, and
(iii) a written instrument of termination duly executed and acknowledged in the
same form as this Trust Agreement. Upon termination of the Trust in accordance
with this Section 13.2, any assets remaining in the Trust shall be returned to
the Company.



                                      -17-
<PAGE>   20

                                   ARTICLE XIV

                                  MISCELLANEOUS

     14.1 Each provision of this Trust is intended to be independent of each
other provision. Any provision of this Trust Agreement prohibited by law shall
be ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof. If any provision of this Trust is determined in
writing by the Company to be, or is held by any court, tribunal, board or other
authority of competent jurisdiction to be, void or invalid as to any participant
or group of participants, such provision shall be disregarded as to such
participant or group of participants and shall be deemed null and void and no
part of this Trust.

     14.2 Except as otherwise required by law, Benefits payable to Plan
participants and their beneficiaries under this Trust Agreement may not be
anticipated, assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy, execution or other
legal or equitable process.

     14.3 This Trust Agreement shall be governed by and construed in accordance
with the laws of the State of New York. Nothing in this Trust Agreement shall be
construed to subject the Trustee created hereunder to ERISA or to cause it to be
treated as other than a grantor trust.

     14.4 All reasonable expenses incurred in maintaining and administering the
Trust pursuant to the provisions of this Trust Agreement shall be paid from the
assets of the Trust unless paid by the Company.

     14.5 The headings and subheadings of this Trust have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.

     14.6 Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in another
gender in all cases where they would so apply, and whenever any words are used
herein in the singular or plural form, they shall be construed as though they
were also used in the other form in all cases where they would so apply.

     14.7 All provisions of this Trust Agreement shall be interpreted and
applied in a uniform, nondiscriminatory manner.

     14.8 The Trustee's obligations are limited to those set out in this Trust
Agreement. No additional duties or obligations shall be imposed on the Trustee
or implied from the terms of this Trust Agreement. In case of any conflict or
inconsistency between the terms of this Trust Agreement and the Plan, in
determining the obligations and responsibilities of the Trustee, the terms of
this Trust Agreement shall control.

     14.9 This Trust Agreement shall be binding upon and inure to the benefit of
any successor(s) or assign(s) of the Company or the Trustee, or any of its
businesses, in whole or in part, as the result of merger, consolidation,
reorganization, transfer of assets or otherwise, and any subsequent successor
thereto. In the event of any such merger, consolidation, reorganization,
transfer of assets or other similar transaction, the successor to the Company or
the Trustee or its business or relevant part thereof or any subsequent



                                      -18-
<PAGE>   21

successor thereto shall promptly notify the other party hereto in writing of its
successorship.

     14.10 The undertakings and obligations of the Company, and the entitlements
of the Trustee, under Articles IX and X of this Trust Agreement shall survive
the termination, amendment or restatement of this Trust Agreement, or the
resignation or removal of the Trustee.

     14.11 Until notice be given in writing to the contrary, all instructions,
notices and other communications shall be delivered or sent:



         If to the Trustee to:          Bankers Trust Company of the Southwest
                                        500 North Akard, Suite 3900
                                        Dallas, TX  75201
                                        Attn:  Elizabeth B. Smith


         If to the Company to:          Atmos Energy Corporation
                                        5430 LBJ Freeway, Suite 1800
                                        Dallas, TX  75240
                                        Attn:  Vice President - Human Resources


                                   ARTICLE XV

                                 EFFECTIVE DATE

     15.1 The effective date of this Trust Agreement shall be the day and year
first written above.




                                      -19-
<PAGE>   22





         IN WITNESS WHEREOF, the Company and Trustee by their duly authorized
officers have signed this Trust Agreement on the day and year first written
above.

                                                   ATMOS ENERGY CORPORATION

Attest:


By:   /s/ Shirley A. Hines               By:    /s/ Wynn McGregor
   -------------------------------          ------------------------------------
Name: Shirley A. Hines                   Name:  Wynn McGregor
     -----------------------------            ----------------------------------
Title: Corporate Secretary               Title: Vice President, Human Resources
      ----------------------------             ---------------------------------


                                                     BANKERS TRUST COMPANY

Attest:

By:  /s/ James F. Shanley                By:    /s/ Frank Eipper
   -------------------------------          ------------------------------------
Name: James F. Shanley                   Name:  Frank Eipper
     -----------------------------            ----------------------------------
Title: Vice President                    Title: Vice President
      ----------------------------             ---------------------------------



                                      -20-
<PAGE>   23



STATE OF TEXAS               )
                             )ss
COUNTY OF _______________    )


     BEFORE ME, the undersigned, a Notary Public in and for the said County and
State, on this day personally appeared, of ATMOS ENERGY CORPORATION, known to
me to be the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in the capacity therein stated, and as the
act and deed of said corporation.

         GIVEN UNDER MY HAND AND SEAL OF OFFICE this _______ day of ____________
___________________________, 2000.


                                     -------------------------------------------
                                     Notary Public in and for the State of Texas



My Commission Expires:

--------------------------



STATE OF __________________  )
                             )ss
COUNTY OF _________________  )


         On the ______ day of __________________, 2000, before me personally
came ____________________________ to me known, who being by me duly sworn, did
depose and say: that he/she resides in _____________________________; that
he/she is the __________________ of BANKERS TRUST COMPANY, the corporation
described in and which executed the above instrument; that he/she knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that he/she signed his/her name thereto by like order.


                                     -------------------------------------------
                                     Notary Public




                                      -21-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>d83952ex10-2.txt
<DESCRIPTION>AMEND. NO. 1 TO EXECUTIVE BENEFITS PLAN
<TEXT>

<PAGE>   1
                                                                    Exhibit 10.2



                                AMENDMENT NO. ONE
                                     TO THE
                            ATMOS ENERGY CORPORATION
                                PERFORMANCE-BASED
                      SUPPLEMENTAL EXECUTIVE BENEFITS PLAN
                            EFFECTIVE JANUARY 1, 1999


     WHEREAS, pursuant to the provisions of Section 9.1 of the Atmos Energy
Corporation Performance-Based Supplemental Executive Benefits Plan (the "Plan"),
the Company desires to amend the Plan in certain respects as hereinafter
provided.

     NOW, THEREFORE, Atmos Energy Corporation does hereby amend the Plan,
effective as of January 1, 1999, as follows:

     1.   Section 2.1(i) is amended by adding the following at the end of clause
          (i) after the word "Division":

               "or any other employee selected by the Board of Directors in its
               discretion."


          IN WITNESS WHEREOF, the Company has caused this AMENDMENT NO. ONE TO
THE ATMOS ENERGY CORPORATION PERFORMANCE-BASED SUPPLEMENTAL EXECUTIVE BENEFITS
PLAN EFFECTIVE JANUARY 1, 1999 to be executed in its name on its behalf this 1st
day of August, 2000, effective as of January 1, 1999.


                                              ATMOS ENERGY CORPORATION


                                              By: /s/ ROBERT W. BEST
                                                 -------------------------------
                                                      Robert W. Best
                                                      Chairman of the Board,
                                                      President and
                                                      Chief Executive Officer


ATTEST:

SHIRLEY A. HINES


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>d83952ex10-3.txt
<DESCRIPTION>FORM OF INDIVIDUAL TRUST AGREEMENT FOR BENEFITS
<TEXT>

<PAGE>   1
                                                                    Exhibit 10.3


                                 TRUST AGREEMENT

     This Agreement made as of this ______ day of _________________, ______, by
and between ATMOS ENERGY CORPORATION (hereinafter called "Company"), whose
address is 5430 LBJ Freeway, Dallas, Texas and BANKERS TRUST COMPANY
(hereinafter called "Trustee"), a New York banking corporation.

                              W I T N E S S E T H :

         WHEREAS, in addition to the benefits available under the Atmos Energy
Corporation Pension Account Plan, as the same has been or may hereafter be
amended or restated, or any successor thereto (hereinafter called "Qualified
Plan"), to ___________________________, an employee of Company (hereinafter
called "Employee"), Employee and Employee's beneficiaries (hereinafter
individually and collectively called "Trust Beneficiary") are entitled to
monthly supplemental retirement income and disability benefits and/or death
benefits (hereinafter called "Supplemental Benefits") arising under the Atmos
Energy Corporation Supplemental Executive Benefits Plan, as the same has been or
may hereafter be amended or restated, or any successor thereto (hereinafter
called "Nonqualified Plan" or "Appendix A"); and

         WHEREAS, the amount and timing of Supplemental Benefits to which Trust
Beneficiary is entitled is specified in the Nonqualified Plan, attached hereto
as Appendix A, and by this reference is made a part hereof, as the same may be
amended from time to time by agreement between Company and Employee; and

         WHEREAS, Company wishes to establish a trust (hereinafter called
"Trust") to which Company may transfer assets to be held therein, subject to the
claims of Company's creditors in the event of Company's insolvency, and subject
to payment to Company under certain circumstances, as hereinafter specified,
until paid to Trust Beneficiary as Supplemental Benefits in such manner and at
such times as specified in Appendix A; and

         WHEREAS, it is the intention of Company, at its discretion, to make
contributions to the Trust as the projected or actual benefit of the Trust
Beneficiary increases or otherwise;


<PAGE>   2

     NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:

     Section 1. Trust Fund.

     (a) Subject to the claims of its creditors as set forth in Section 3,
Company hereby deposits with Trustee in trust One Dollar ($1.00) which shall
become the principal of the Trust to be held, administered and disposed of by
Trustee as provided in this Trust Agreement.

     (b) The Trust hereby established shall be irrevocable.

     (c) The Trust is intended to be a grantor trust, within the meaning of
Section 671 of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.

     (d) The principal of the Trust, and any earnings thereon, which are not
paid to Company as provided in Sections 4 and 6, shall be held separate and
apart from other funds of Company and shall be used exclusively for the uses and
purposes herein set forth. Neither the Trust Beneficiary, nor the Nonqualified
Plan, shall have any preferred claim on, or any beneficial ownership interest
in, any assets of the Trust prior to the time such assets are paid to Trust
Beneficiary as Supplemental Benefits as provided in Section 2, and all rights
created under the Nonqualified Plan and this Trust Agreement shall be mere
unsecured contractual rights of Trust Beneficiary against Company.

     (e) Company shall make deposits as provided for in Appendix A and may at
any time or from time to time make additional deposits of cash or other property
in trust with Trustee to augment the principal to be held, administered and
disposed of by Trustee as provided in this Trust Agreement. Upon and after a
"Change in Control" (as hereinafter defined), Trustee shall be responsible for
assuring that deposits are made in accordance with Appendix A, and it may rely
on written certifications of the actuary employed with respect to Appendix A as
to the funded status of the Trust and the Company's contribution obligations
under Appendix A. Prior to a Change in Control, the Trustee shall have no
responsibility therefor.

     Section 2. Payments to Trust Beneficiary.

     (a) Trustee shall make payments of Supplemental Benefits to Trust
Beneficiary from the assets of the Trust, if and to the extent such assets are
available for distribution, in accordance with Appendix A, at all times Company
is not Insolvent. Trustee shall not be required to make payments unless notified
by the Company or the Trust Beneficiary that benefits are then due and owing to
the Trust Beneficiary and it has received a written certification of the time
for payment of Benefits and the amount of Benefits due and owing to the Trust
Beneficiary at such time, all in accordance with Appendix A, prepared by the
actuary employed by the Company to calculate the Supplemental Benefits. The
actuary shall also provide written certification to the Trustee of any changes
in the amount of Benefits payable to a Beneficiary from time to time. Following
a Change in Control, if no actuary is employed by the Company, the Trustee shall
employ an actuary. The Trustee shall be fully protected in relying on the
written certification of the actuary for all purposes of this Agreement.

     (b) If the principal of the Trust, and any earnings thereon, which are not
paid to Company as provided in Sections 4 and 6, are not sufficient to make
payments of Supplemental Benefits to Trust



                                       2
<PAGE>   3

Beneficiary in accordance with Appendix A, Company shall make the balance of
each such payment as it falls due.

     (c) It is expressly acknowledged that Employee (or if Employee is dead, his
beneficiaries under Nonqualified Plan) is a third-party beneficiary under this
Trust Agreement and, as such, shall have the right to enforce the terms of this
Agreement as if he were a party thereto.

     Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary
When Company Insolvent.

     (a) Company shall be considered "Insolvent" for purposes of this Trust
Agreement if (i) Company is unable to pay its debts as they mature, or (ii)
Company is subject to a pending proceeding as a debtor under the Bankruptcy
Code.

     (b) At all times during the continuance of this Trust, the principal and
income of the Trust shall be subject to claims of general creditors of Company
as hereinafter set forth, and at any time Trustee has actual knowledge that
Company is Insolvent, Trustee shall deliver any undistributed principal and
income in the Trust to satisfy such claims as a court of competent jurisdiction
may direct. The board of directors and Chief Executive Officer of Company shall
have the duty to inform Trustee of Company's Insolvency. If Company or a person
claiming to be a creditor of Company alleges in writing to Trustee that Company
has become Insolvent, then, within thirty (30) days after receipt of such
notice, such firm of independent auditors as Company, upon notification by
Trustee, may select (or, after a "Change in Control" as defined in Section 4
hereof, such national firm of independent auditors as Trustee may select) shall
determine whether Company is Insolvent and shall advise Trustee accordingly.
Pending such determination, Trustee shall discontinue payments of Supplemental
Benefits to Trust Beneficiary, shall hold the Trust assets for the benefit of
Company's general creditors, and shall resume payments of Supplemental Benefits
to Trust Beneficiary in accordance with Section 2 of this Trust Agreement only
after it has been determined that Company is not Insolvent (or is no longer
Insolvent, if Company was initially determined to be Insolvent). Unless Trustee
has actual knowledge of Company's Insolvency, Trustee shall have no duty to
inquire whether Company is Insolvent. Knowledge of Company's insolvency by any
affiliate of Trustee shall not be imputed to Trustee. Trustee may in all events
rely on such evidence concerning Company's solvency as may be furnished to
Trustee which will give Trustee a reasonable basis for making a determination
concerning Company's solvency. Nothing in this Trust Agreement shall in any way
diminish any rights of Trust Beneficiary or Trustee to pursue his or its rights
as a general creditor of Company with respect to Supplemental Benefits or
otherwise.

     (c) If Trustee discontinues payments of Supplemental Benefits from the
Trust pursuant to Section 3(b) and subsequently resumes such payments, the first
payment following such discontinuance shall include the aggregate amount of all
payments which would have been made to Trust Beneficiary (together with interest
on the amount delayed at one percentage point above the prime rate of Trustee as
then in effect) in accordance with Appendix A during the period of such
discontinuance, less the aggregate amount of payments made to Trust Beneficiary
by Company in lieu of the payments provided for hereunder during any such period
of discontinuance.


                                       3
<PAGE>   4

     Section 4. Payments to Company.

     Company shall have no right or power to direct Trustee to return to Company
or to divert to others any of the Trust assets before all payments of
Supplemental Benefits have been made to Trust Beneficiary pursuant to Appendix
A, except as otherwise provided in Section 1(b) and this Section.
Notwithstanding any provision of this Trust Agreement to the contrary and prior
to a "Change in Control," (as hereinafter defined), if it is determined by
Trustee that certain Trust assets will never be required to pay Supplemental
Benefits to Trust Beneficiary (because, for example, of any difference between
actual requirements and expected actuarial requirements), such excess assets
shall be returned to Company, but (i) only to the extent that such return does
not cause the value of the total Trust assets to be less than one hundred thirty
percent (130%) of the present value of projected Supplemental Benefits, and (ii)
only if the assets of each other trust of which Trustee serves as trustee and
established pursuant to Appendix A are at least one hundred thirty percent
(130%) of the present value of projected supplemental benefits payable under
such Plan to the beneficiary(ies) of such trust, in each case, with such present
value to be determined on the basis of actuarial assumptions applied by mutual
agreement of Company and Trustee. Upon and after a "Change in Control" (as
hereinafter defined), such assets may be returned to Company only after all
Supplemental Benefits have been fully distributed to or on behalf of Trust
Beneficiary and all other supplemental benefits under Appendix A have been fully
distributed to or on behalf of all other trust beneficiaries under all other
trusts for which Trustee serves as trustee and established pursuant to Appendix
A. Trustee may transfer all or any portion of such excess assets to one or more
other trusts established pursuant to Nonqualified Plan to the extent deemed
necessary by Trustee to enable such other trusts to pay supplemental benefits
under such Plan to the beneficiaries of such trusts, but only to the extent that
such transfer does not cause the value of the total Trust assets to be less than
one hundred thirty (130%) percent of the present value of projected Supplemental
Benefits, with such present value to be determined (i) prior to a "Change in
Control" (as hereinafter defined), on the basis of actuarial assumptions applied
by mutual agreement of Company and Trustee and (ii) upon and after a "Change in
Control" (as hereinafter defined), on the basis of actuarial assumptions applied
by mutual agreement of Company and Employee (or, if Employee is dead, his
beneficiaries under Nonqualified Plan); provided, however, that upon and after
such Change in Control, no such transfer may be made without the consent of
Employee (or, if Employee is dead, his beneficiaries under Nonqualified Plan) to
any such other trust which was not in existence prior to the date of such Change
in Control; provided, further, that if such excess assets are attributable to a
termination of the Trust pursuant to Section 11(b) occasioned by Employee's
resignation or termination of employment for Cause (within the meaning of
Appendix A), then Trustee shall transfer the full amount of such excess assets,
on a pro rata basis, to all of such other trusts established pursuant to
Appendix A and for which Trustee serves as trustee (or, in the case of a
transfer occurring on or after a Change in Control, to all of such other trusts
established pursuant to Appendix A for which Trustee serves as trustee which
were in existence prior to the date of such Change in Control), irrespective of
the funding status of such other trusts. For purposes of this Trust, a "Change
in Control" of Company shall occur if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) other than a trustee or other fiduciary holding securities
under an employee benefit plan of Company, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Company representing 33-1/3% or more of the combined voting power
of Company's then outstanding securities; or (ii) during any period of two
consecutive years individuals who at the beginning of such period constitute the
board of directors of Company and any new director (other than a director
designated by a person who has entered into an agreement with Company to effect
a transaction described in clauses (i) or (iii) of this sentence) whose election
by such board of directors or nomination for election by Company's shareholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or (iii) the shareholders of Company
approve a merger or consolidation of Company with any other corporation, other
than a merger or consolidation which would result in the voting securities of
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted



                                       4
<PAGE>   5

into voting securities of the surviving entity) at least 60% of the combined
voting power of the voting securities of Company or such surviving entity
outstanding immediately after such merger or consolidation, or the shareholders
of Company approve a plan of complete liquidation of Company or an agreement for
the sale or disposition by Company of all or substantially all of Company's
assets. Any payment of excess assets to Company made pursuant to this Section 4
shall be made only upon written instructions from Company. In carrying out its
duties under this Section 4, Trustee may rely on written certifications of the
actuary employed with respect to Appendix A as to the funded status of the Trust
and each other trust for which Trustee serves as trustee and established
pursuant to Appendix A, and may rely on the written notice of the Company or the
Trust Beneficiary that a Change in Control has occurred. Trustee shall not be
required to verify the accuracy of any determination made by the actuary under
this Agreement.

     Section 5. Investment of Trust Assets.

     Trustee shall invest the assets comprising the Trust, as Company
prescribes, in accordance with the investment directives set forth in Appendix
B, attached hereto; provided that no investment shall be made in securities or
obligations issued by Company or by any subsidiary or affiliate thereof. Company
may from time to time revise, add to, or eliminate any one or more of the
investment directives set forth in Appendix B; provided that, upon and after a
Change in Control, any such action shall require the consent of Employee (or if
Employee is dead, his beneficiaries under Nonqualified Plan). In addition, the
board of directors of Company may from time to time direct, by written notice to
Trustee, the segregation of any portion or portions of the Trust corpus in a
separate investment account or investment accounts and, in such event, may
appoint an investment manager to direct the investment and reinvestment of any
such account; provided that, upon and after a Change in Control, such direction
and appointment shall require the consent of Employee (or, as aforesaid, his
beneficiaries under Nonqualified Plan). The appointment of, and any directions
by, such investment manager shall be governed by the following:

     (a) Any such investment manager shall (i) be registered as an investment
adviser under the Investment Advisers Act of 1940; (ii) be a bank, as defined in
that Act; or (iii) be an insurance company qualified to perform investment
management services under the laws of more than one state.

     (b) Trustee shall follow the directions of the investment manager regarding
the investment and reinvestment of the Trust corpus, or such portion thereof as
shall be under management by the investment manager. Trustee shall be under no
duty or obligation to review any investment to be acquired, held or disposed of
pursuant to such directions nor to make any recommendations with respect to the
disposition or continued retention of any such investment. Trustee shall have no
liability or responsibility for acting or not acting pursuant to the direction
of, or failing to act in the absence of any direction from, the investment
manager.

     (c) The investment manager at any time and from time to time may issue
orders for the purchase or sale of securities directly to a broker; and in order
to facilitate such transaction, Trustee upon request shall execute and deliver
appropriate trading authorizations. Written notification of the issuance of each
such order shall be given promptly to Trustee by the investment manager, and the
execution of each such order shall be confirmed by written advice to Trustee by
the broker. Such notification shall be authority for Trustee to pay for
securities purchased against receipt thereof and to deliver securities sold
against payment therefor, as the case may be. Anything in the preceding sentence
to the contrary notwithstanding, payment for securities against receipt and
delivery of securities against payment shall not be required if such is not the
prevailing practice in the principal market in which such securities are traded.




                                       5
<PAGE>   6

     (d) The board of directors of Company may remove any investment manager
appointed hereunder; provided that, upon and after a Change in Control, such
removal shall require the consent of Employee (or, if Employee is dead, his
beneficiaries under Nonqualified Plan). In the event that an investment manager
should resign or be removed by the board of directors of Company, Trustee shall,
following receipt from Company of written notice of such resignation or removal,
which notice Company shall deliver to Trustee at the time of such resignation or
removal, subject to the investment directives set forth in Appendix B hereof,
manage the investment and reinvestment of the Trust corpus unless and until
Trustee shall be notified of the appointment of another investment manager with
respect thereto as provided in this Section 5.

     Section 6. Income Tax Obligations.

     It is hereby expressly understood that Company shall be liable for any and
all taxes imposed on Trust income or assets. All such taxes are to be paid by
Company from sources other than the assets or income of this Trust, and, except
to the extent otherwise authorized by Section 4 hereof, Trustee shall, under no
circumstances, transfer any portion of such income or assets to Company for the
payment of same.

     Section 7. Accounting by Trustee.

     Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be done,
including such specific records as shall be agreed upon in writing between
Company and Trustee. All such accounts, books and records shall be open to
inspection and audit at all reasonable times by Company and by Trust
Beneficiary. Within sixty (60) days following the close of any accounting period
designated by Company and within sixty (60) days after the removal or
resignation of Trustee, Trustee shall deliver to Company and Trust Beneficiary a
written account of its administration of the Trust during such period or during
the period from the close of the last preceding period to the date of such
removal or resignation, setting forth all investments, receipts, disbursements
and other transactions effected by it, including a description of all securities
and investments purchased and sold with the cost or net proceeds of such
purchases or sales (accrued interest paid or receivable being shown separately),
and showing all cash, securities and other property held in the Trust at the end
of such period or as of the date of such removal or resignation, as the case may
be.

     Section 8. Responsibility of Trustee.

     (a) Trustee's duties and responsibilities shall be limited to those
specifically set forth in this Agreement, and no amendments to this Agreement or
Appendix A shall affect the Trustee's duties or responsibilities hereunder
without its prior written consent. Trustee shall act with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims; provided,
however, that Trustee shall incur no liability to anyone for any action taken
pursuant to a direction, request, or approval given by Company or Trust
Beneficiary contemplated by and complying with the terms of this Trust
Agreement, and to the extent permitted by law shall be relieved of the Prudent
Man Rule for investments.

     (b) Trustee shall not be required to undertake or to defend any litigation
arising in connection with this Trust Agreement, unless it be first indemnified
by Company against its prospective costs, expenses and liability, and Company
hereby agrees to indemnify Trustee for such costs, expenses, and liability.




                                       6
<PAGE>   7

     (c) Trustee may consult with legal counsel (who may also be counsel for
Trustee generally) with respect to any of its duties or obligations hereunder,
and shall be fully protected in acting or refraining from acting in accordance
with the advice of such counsel.

     (d) Trustee may hire agents, accountants, actuaries and financial
consultants.

     (e) Trustee shall have, without exclusion, all powers conferred on trustees
by applicable law unless expressly provided otherwise herein; provided, however,
that if an insurance policy is held as an asset of the Trust, Trustee shall have
no power, except in accordance with Section 1(b) or Section 4 hereof, to name a
beneficiary of the policy other than the Trust, to assign the policy (as
distinct from conversion of the policy to a different form) other than to a
successor Trustee, or to loan to any person the proceeds of any borrowing
against such policy.

     (f) If Trustee undertakes or defends any claim or litigation arising in
connection with this Trust, the Company agrees to indemnify Trustee against
Trustee's costs, expenses and liabilities (including, without limitation,
reasonable attorneys' fees and expenses) relating thereto and to be primarily
liable for such payments. If the Company does not pay such costs, expenses and
liabilities in a reasonably timely manner, Trustee may obtain payment from the
Atmos Energy Corporation Legal Defense Fund Trust of which Trustee is the
trustee.

     Section 9. Compensation and Expenses of Trustee.

     Trustee shall be entitled to receive such reasonable compensation for its
services as shall be agreed upon by Company and Trustee. Trustee shall also be
entitled to receive its reasonable expenses incurred with respect to the
administration of the Trust, including fees incurred by Trustee pursuant to
Section 8(c) and 8(d) of this Trust Agreement. Such compensation and expenses
shall be payable by Company.

     Section 10. Replacement of Trustee.

     Trustee may be removed at any time by Company or may resign, in which case
a new corporate trustee, which shall be independent and not subject to control
of either Company or Trust Beneficiary, shall be appointed by Company; provided
that, upon and after a Change in Control, any such removal or appointment shall
require the consent of Employee (or if Employee is dead, his beneficiaries under
Nonqualified Plan). In the event of a resignation by the Trustee, the Trustee
may petition a court of competent jurisdiction for the appointment of a
successor Trustee if the Company shall fail to appoint a successor within a
reasonable period of time, the costs to the Trustee (including reasonable legal
fees) of such petition to be an expense of administration of the Trust.

     Section 11. Amendment or Termination.

     (a) This Trust Agreement may be amended any time and to any extent by
written instrument executed by Trustee and Company and, both prior to and after
a Change in Control, consented to by Employee (or if Employee is dead, his
beneficiaries under Nonqualified Plan); provided, however, that prior to a
Change in Control, the consent of Employee is not required for amendments made
necessary by state or Federal statutory or regulatory requirements.

     (b) The Trustee shall not terminate until the date on which Trust
Beneficiary is entitled to no more Supplemental Benefits pursuant to Appendix A
(as increased in accordance with Section 4), unless sooner revoked in accordance
with Section 1(b).



                                       7
<PAGE>   8

     (c) Except as otherwise provided in Section 4 hereof, upon termination of
the Trust as provided in Section 11(b), any assets remaining in the Trust shall
be returned to Company.

     Section 12. Severability and Alienation.

     (a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition without invalidating the
remaining provisions hereof.

     (b) To the extent permitted by law, benefits to Trust Beneficiary under
this Agreement may not be anticipated, assigned (either at law or in equity),
alienated or subject to attachment, garnishment, levy, execution or other legal
or equitable process and no benefit actually paid to Trust Beneficiary by
Trustee shall be subject to any claim for repayment by Company or Trustee.

     This Trust Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.

     IN WITNESS WHEREOF, Company and Trustee have executed this Agreement as of
the date first above written.


                                              ATMOS ENERGY CORPORATION


                                              By:
                                                 -------------------------------


                                              Title:
                                                    ----------------------------

                                                            COMPANY



                                              BANKERS TRUST COMPANY


                                              By:
                                                 -------------------------------


                                              Title:
                                                    ----------------------------

                                                            TRUSTEE



                                       8
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>5
<FILENAME>d83952ex12.txt
<DESCRIPTION>COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TEXT>

<PAGE>   1
                                                                      Exhibit 12


                            Atmos Energy Corporation
                    Computation of Earnings to Fixed Charges
                                December 31, 2000


                                                              Three Months Ended
                                                                 December 31,
                                                              ------------------
                                                                2000      1999
                                                              --------  --------
Income from continuing operations before provision for
  Income taxes per statement of income                         $36,348   $22,882
Add:
  Portion of rents representative of the interest factor           548       765
  Interest on debt & amortization of debt expense               12,246    11,217
                                                               -------   -------
Income as adjusted                                             $49,142   $34,864
                                                               =======   =======

Fixed charges:
  Interest on debt & amortization of debt expense (1)          $12,246   $11,217
  Capitalized interest (2)                                        --        --
  Rents                                                          1,644     2,294
  Portion of rents representative of the interest factor (3)       548       765
                                                               -------   -------
    Fixed charges (1)+(2)+(3)                                  $12,794   $11,982
                                                               =======   =======

Ratio of earnings to fixed charges                                3.84      2.91



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-15
<SEQUENCE>6
<FILENAME>d83952ex15.txt
<DESCRIPTION>LETTER REGUARDING UNAUDITED INTERIM FINANCIAL INFO
<TEXT>

<PAGE>   1
                                                                      Exhibit 15






Board of Directors
Atmos Energy Corporation


We are aware of the incorporation by reference in the Registration Statements
(Form S-3, No. 33-37869; Form S-3 D/A, No. 33-70212; Form S-3, No. 33-58220;
Form S-3, No. 33-56915; Form S-3/A, No. 333-03339; Form S-3/A, No. 333-32475;
Form S-3/A, No. 333-50477; Form S-3/A, No. 333-93705; Form S-3, No. 333-95525;
Form S-4, No. 333-13429; Form S-8, No. 33-68852; Form S-8, No. 33-57687; Form
S-8, No. 33-57695; Form S-8, No. 333-32343; Form S-8, No. 333-46337; Form S-8,
No. 333-73143; and Form S-8, No. 333-73145) of Atmos Energy Corporation and in
the related Prospectuses of our report dated January 23, 2001, relating to the
unaudited condensed consolidated interim financial statements of Atmos Energy
Corporation which are included in its Form 10-Q for the quarter ended
December 31, 2000.





                                                      ERNST & YOUNG LLP


Dallas, Texas
February 8, 2001

</TEXT>
</DOCUMENT>
</SUBMISSION>
