Form of Individual Trust Agreement For Benefits

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;


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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


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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.


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Section 4. Payments to Company.


Company shall have no right or power to direct Trustee to return to Company or to divert to others a ...