Executive Benefit Plan Trust Agreement

Exhibit 10.1


ATMOS ENERGY CORPORATION


PERFORMANCE-BASED SEBP


TRUST AGREEMENT


EFFECTIVE AS OF DECEMBER 1, 2000


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


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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:


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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


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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.


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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.


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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- 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


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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, ...