Filed pursuant to Rule 424(b)(3)
SEC File No. 333-95525
PROSPECTUS
[LOGO OF ATMOS ENERGY CORPORATION APPEARS HERE]
ATMOS ENERGY CORPORATION
DIRECT STOCK PURCHASE PLAN
2,000,000 Shares of Common Stock
We are offering common stock to our shareholders, customers, and other
investors under our Direct Stock Purchase Plan. Plan participants may also take
advantage of additional services, most without any fees or commissions.
Plan Services . Reinvest cash dividends paid quarterly to purchase shares
at a 3% discount from market prices, up to a limit of your
first 40,000 shares held in the plan
. Purchase our stock at market prices, up to $100,000 per
year without fees or commissions
. Deposit share certificates for safekeeping
. Purchase stock monthly by electronic funds transfer
. Purchase stock through IRA accounts, including the
traditional IRA, the Roth IRA, Education IRA, and the SEP-
IRA
New York On July 11, 2000, the last reported sale price on the New
Stock York Stock Exchange was $20 3/8.
Exchange
Trading
Symbol--"ATO"
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
----------------
The date of this Prospectus is July 12, 2000.
TABLE OF CONTENTS
Summary..................................................................... 3
Available Information....................................................... 4
Incorporation of Certain Documents by Reference............................. 5
Forward-Looking Statements.................................................. 6
The Company................................................................. 7
The Offering................................................................ 9
Plan of Distribution........................................................ 10
The Plan.................................................................... 10
Purpose and Advantages...................................................... 10
Disadvantages of the Plan................................................... 12
Administration.............................................................. 12
Participation............................................................... 13
Enrollment Procedures....................................................... 13
Purchases and Price of Shares............................................... 16
Voluntary Cash Investments and Initial Investments.......................... 18
Expenses and Costs.......................................................... 19
Reports to Participants..................................................... 19
Stock Certificates and Safekeeping.......................................... 20
Individual Retirement Accounts.............................................. 22
Electronic Monthly Investments.............................................. 23
Transfer of Shares.......................................................... 24
Tax Consequences............................................................ 25
Termination of Participation................................................ 27
Miscellaneous............................................................... 28
Use of Proceeds............................................................. 30
Legal Opinion............................................................... 30
Experts..................................................................... 30
Indemnification of Directors and Officers................................... 31
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SUMMARY
We offer our Direct Stock Purchase Plan as a service to our shareholders,
customers and other investors. We have designed the plan with the purpose to
provide investors with a convenient and economical way to purchase our common
stock and accumulate and increase their investment in our common stock by
reinvesting all or a portion of their cash dividends in additional shares. We
do not charge any service fees or brokerage commissions on any purchases of
stock under the plan.
Each shareholder who currently participates in the plan will remain enrolled
in the plan unless you contact the Plan Administrator, Fleet National Bank, c/o
EquiServe, who acts as the plan's agent for participants in the plan, to close
the account or to change any way you wish to participate in the plan. If you
are an investor who is not already a shareholder who wants to participate in
the plan, you may call EquiServe at 1-800-543-3038, toll free, or complete and
return an initial purchase form directly to EquiServe. Any investor who is not
already one of our shareholders must make his or her first cash investment of
at least $200 to begin participating in the plan. Participants in the plan who
wish to terminate their participation will incur brokerage commissions on the
sale of their stock in the plan of not more than five cents ($.05) per share,
plus any applicable transfer tax and a fee of $15 charged by EquiServe.
Each participant in the plan may:
. Automatically reinvest cash dividends paid quarterly at a 3% discount on
all or a portion of the shares held in his or her name in a plan
account, up to a limit of his or her first 40,000 shares held in such
account in the plan.
. Invest in stock at market prices by making voluntary cash investments of
at least $25 up to a maximum of $100,000 each calendar year.
. Deposit share certificates for safekeeping.
. Make monthly investments by electronic funds transfer from their bank
accounts.
. Establish an IRA that invests in stock through the plan. Available
alternatives are the traditional IRA, Roth IRA, and the Education IRA.
Participants may also contribute or roll over amounts to an IRA through
a plan account. A participant may also establish a SEP-IRA if the
participant's employer meets certain qualifications.
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EquiServe will use initial investments, electronic monthly investments, and
voluntary cash investments it receives from participants (as well as reinvested
dividends) to buy shares of stock for participants through the plan. Persons
who are not shareholders may make initial investments of at least $200 but not
more than $100,000 per year that EquiServe will use to buy stock under the plan
at current prices. EquiServe may buy shares on the market from brokers or may
buy shares directly from us.
The terms "we", "our", and "us" refer to Atmos Energy Corporation unless the
context suggests otherwise. The term "you" refers to a prospective investor or
an existing shareholder.
Location of Executive Offices
Our address is Atmos Energy Corporation, 1800 Three Lincoln Centre, 5430 LBJ
Freeway, Dallas, Texas 75240, and our telephone number is (972) 934-9227.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended. Accordingly, we file reports, proxy and information
statements, and other information with the SEC. The public may inspect and copy
(at prescribed rates) the registration statement and the other information that
we have filed with the SEC at the SEC's public reference facilities listed
below.
SEC Public Reference Room SEC Regional Public Reference
Facilities
450 Fifth Street, N. W.
Room 1024 Northwest Atrium Center, Room 3190
Washington, D.C. 20549 500 West Madison Street
Chicago, Illinois 60661
7 World Trade Center
13th Floor
New York, New York 10048
4
In addition, the public may obtain information on the operation of the SEC's
public reference room by calling the SEC at the number listed below.
SEC Public Reference Room Telephone Number:
1-800-SEC-0330
We file many of our reports, proxy and information statements, and other
information electronically with the SEC. The public can access these documents
by computer at the SEC's World Wide Web address.
SEC World Wide Web Address: http://www.sec.gov
We have filed with the SEC a registration statement on Form S-3, which
includes amendments and exhibits, under the Securities Act of 1933, as amended.
This prospectus does not contain all the information set forth in the
registration statement, certain parts of which are omitted in accordance with
the rules and regulations of the SEC. Please refer to the registration
statement for further information. Statements contained in this prospectus as
to the contents of any contract or any other document are not necessarily
complete, and in each instance you should refer to the copy of that contract or
other document filed as an exhibit to the registration statement or other
document. A copy of the registration statement and its exhibits and schedules
may be examined without charge at the SEC's Public Reference Room, and copies
of such materials may be obtained at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which we have previously filed with the SEC pursuant
to the Securities Exchange Act of 1934, are incorporated into this prospectus
by reference and are deemed to be part of it.
(a) Annual Report on Form 10-K for the fiscal year ended September 30,
1999;
(b) Quarterly Reports on Form 10-Q for the quarters ended December 31,
1999 and March 31, 2000;
(c) Current Reports on Form 8-K dated February 16, 2000, April 13, 2000,
May 31, 2000 and June 15, 2000; and
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(d) The description of our common stock contained in our Registration
Statement on Form 8-A dated September 7, 1988 (Commission File No. 1-
10042) filed pursuant to Section 12 of the Exchange Act and all
amendments thereto and reports, which have been filed for the purpose
of updating such description, including, without limitation, our
Current Report on Form 8-K dated November 12, 1996.
All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this prospectus and prior to the termination
of the offering of the shares of stock offered hereby also shall be deemed to
be incorporated into this prospectus and to be a part of it from the date of
filing of such documents.
We will provide without charge to each person to whom this prospectus is
delivered, upon his or her written or oral request, a copy of any or all of the
foregoing documents incorporated into this prospectus, other than exhibits to
those documents (unless the exhibits are specifically incorporated by reference
into those documents). These requests should be directed to our address listed
on page 4.
Any statement contained in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference into this prospectus,
shall be deemed to be modified or superseded for purposes of this prospectus to
the extent that a statement contained in this prospectus or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference modifies or supersedes such statement. Any statement so modified
shall not be deemed to constitute a part of this prospectus except as so
modified, and any statement so superseded shall not be deemed to constitute
part of this prospectus.
FORWARD-LOOKING STATEMENTS
Statements contained in this prospectus, including the documents that are
incorporated by reference as set forth in "Incorporation of Certain Documents
by Reference," that are not historical facts are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933. Forward-
looking statements are based on management's beliefs as well as assumptions
made by, and information currently available to, management. Because those
statements are based on expectations as to future economic performance and are
not statements of fact, actual results may
6
differ materially from those projected. Important factors that could cause
future results to differ include, but are not limited to:
. national, regional and local economic and competitive conditions,
. regulatory and business trends and decisions,
. technological developments,
. inflation rates,
. weather conditions, and
. other factors discussed in this and our other filings with the
Commission.
All of these factors are difficult to predict and many are beyond our
control. Accordingly, while we believe these forward-looking statements to be
reasonable, there can be no assurance that they will approximate actual
experience or that the expectations derived from them will be realized. When
used in our documents or oral presentations, the words "anticipate," "believe,"
"estimate," "expect," "objective," "projection," "forecast," "goal" or similar
words are intended to identify forward-looking statements.
THE COMPANY
Operations
We distribute and sell natural gas and propane to over one million
residential, commercial, industrial, agricultural and other customers. We
distribute and sell natural gas through our five operating divisions to
approximately 1,038,000 meters in over 800 cities, towns and communities in
service areas located in Colorado, Georgia, Illinois, Iowa, Kansas, Kentucky,
Louisiana, Missouri, South Carolina, Tennessee, Texas and Virginia. We
transport gas for others through parts of our distribution system. We also
distribute propane to approximately 40,000 customers in Kentucky, North
Carolina, Tennessee and Virginia.
In our non-regulated business, we provide natural gas storage services
through Atmos Storage, Inc., which owns natural gas storage fields in Kentucky
and Kansas to supplement natural gas used
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by customers in Kansas, Tennessee, and other states. We also own a 45% interest
in Woodward Marketing, L.L.C., a privately held company that provides gas
marketing and energy management services to industrial customers,
municipalities and local distribution companies, including our Trans Louisiana,
Western Kentucky and United Cities divisions. In addition, we market gas to
industrial and irrigation customers primarily in West Texas through Enermart
Energy Services Trust and to industrial customers in Louisiana.
Through United Cities Propane Gas, Inc. we distribute propane at retail and,
to a much lesser extent, on a wholesale basis. We exited the direct
merchandising and repair of propane gas appliances in 1999. We currently have
propane operation and storage centers and storefront offices in Tennessee,
Kentucky, and North Carolina, with a total company storage capacity of
approximately 2.5 million gallons, which serve customers in those states as
well as Virginia.
On February 16, 2000, we announced that we had entered into an agreement to
form a joint venture which combined our United Cities Propane Gas operations
with the propane operations of AGL Resources, Inc., Atlanta, Ga.; Piedmont
Natural Gas Company, Inc., Charlotte, N.C.; and TECO Energy,Tampa, Fla. The
combined entity, named U.S. Propane, L.P., would have been among the 10 largest
propane retailers in the nation, with nearly 200,000 customers. On June 15,
2000, U.S. Propane, LLC, the general partner of U.S. Propane, L.P., announced
that it will combine with Heritage Holdings, Inc., the general partner of
Heritage Propane Partners, L.P., to create the fourth largest retail propane
distributor in the United States. Through a series of transactions, U.S.
Propane, LLC will be the general partner in a master limited partnership that
will distribute propane to over 480,000 customers in 28 states. The closing of
the transactions is subject to regulatory approval.
In addition, on April 13, 2000, we announced that we had entered into a
definitive agreement to acquire the Louisiana gas operations of Louisiana Gas
Service Company, a division of Citizens Utilities Company and LGS Natural Gas
Company, a subsidiary of Citizens Utilities Company. Louisiana Gas Service
Company serves approximately 279,000 customers and is headquartered in Harvey,
Louisiana. LGS Natural Gas Company is an intrastate pipeline company that
provides gas transportation service to industrial customers. The closing of the
transaction is subject to regulatory approval.
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Formation
We were organized under the laws of the State of Texas in 1983 as a
subsidiary of Pioneer Corporation for the purposes of owning and operating
Pioneer's natural gas distribution business in Texas. Immediately following the
transfer of the gas distribution business, which Pioneer and its predecessors
operated since 1906, Pioneer distributed the outstanding stock of the
corporation, then known as Energas Company, to its shareholders. In September
1988, we changed our name from Energas Company to Atmos Energy Corporation. As
a result of our merger with United Cities Gas Company in July 1997, we became
incorporated in the Commonwealth of Virginia as well as the State of Texas.
THE OFFERING
This prospectus relates to 2,000,000 authorized shares of stock offered for
purchase under the plan by shareholders of record, and other investors through
the reinvestment of dividends, voluntary cash investments of at least $25 and
not more than $100,000 per calendar year, and initial investments of at least
$200 and not more than $100,000.
Shares purchased with reinvested dividends are offered at a 3% discount from
current market prices, subject to a limit of reinvested dividends paid
quarterly on the participant's first 40,000 shares held in the plan. Although
we have not changed the discount since it was first offered, we may adjust it
depending upon the number of shares purchased under the plan and other economic
conditions that may develop.
There is no discount applicable to shares purchased with initial investments
or voluntary cash investments, including electronic monthly investments. Such
shares are purchased at current market prices. No more than $100,000 of
voluntary cash investments may be made by a participant during each calendar
year and a non-shareholder may not make an initial investment of more than
$100,000. However, after an initial investment is made, a participant is
allowed to make voluntary cash investments up to $100,000 (including the
initial investment) during the next calendar year.
The discount on shares purchased with reinvested dividends may provide an
incentive for certain persons to enter into transactions that would allow them
to acquire shares on or before the
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dividend record date, reinvest at the discounted purchase price and resell the
shares in order to capture the discount. Any person engaging in these
transactions may be considered to be an underwriter within the meaning of
section 2(11) of the Securities Act and may have their participation in the
plan involuntarily terminated. We have not entered into any arrangement, either
formal or informal, with any person to engage in these transactions. However,
the limitation on the number of shares held in the plan upon which shares may
be purchased quarterly with reinvested dividends (40,000 shares), should serve
to reduce the incentive to enter into these types of transactions.
PLAN OF DISTRIBUTION
The stock being offered hereby is offered pursuant to our dividend
reinvestment and direct stock purchase plan described in this prospectus for
purchase by the plan's agent, which is currently EquiServe, of shares of stock
on the open market or directly from us, at our discretion. In accordance with
current SEC rulings, we will not change its determination regarding the source
of purchase of shares under the plan more than once in any three month period
and then only after a determination of the Board of Directors or the need of
our Chief Financial Officer to raise additional capital has changed or there is
another valid reason for such change. We generally pay all fees, commissions
and expenses incurred in connection with the plan including the annual
administrative fee and IRA administrative fees. However, a participant is
responsible for all commissions and fees relating to the sale of all or a
portion of the shares of stock in his or her plan account and any fees
associated with the termination of an IRA.
THE PLAN
The following is a question and answer statement of the provisions of our
Direct Stock Purchase Plan:
Purpose and Advantages
1. What is the purpose of the plan?
The purpose of the plan is to provide to our shareholders, customers and
other investors a simple, convenient and economical way to accumulate and
increase their investment in our stock by
10
reinvesting all or a portion of their cash dividends paid quarterly (subject to
a maximum of 40,000 shares) in additional shares of stock. Consequently,
shareholders using the plan for arbitrage, or short-term income producing
strategies, may have their participation in the plan terminated by the
adminstrator of the plan.
2.What are some of the advantages of the plan?
-- Participants have the opportunity to reinvest cash dividends paid
quarterly at a 3% discount on all or a portion of the shares of stock
held in their names in plan accounts, up to a limit of each
participant's first 40,000 shares held in the plan.
-- Participants in the plan may purchase additional shares of stock at 100%
of market price by making voluntary cash investments of at least $25 up
to $100,000 per calendar year. Voluntary cash investments may be made by
check, money order or electronic funds transfer from a predesignated
U.S. checking or savings account. (See Question No. 21 regarding the
electronic monthly investment feature of the plan.)
-- Persons who are not already shareholders may purchase shares of stock at
100% of market price and become a participant in the plan by making
initial investments of at least $200 and not more than $100,000.
-- All shares of stock are purchased under the plan without charge to plan
participants or any service fees or brokerage commissions.
-- The plan offers a "safekeeping" service whereby shareholders of record
may deposit their stock certificates with the plan's agent and have
their ownership of such stock maintained on the plan's agent's records
as part of their plan accounts.
-- A traditional IRA, Roth IRA, Education IRA or SEP-IRA may be established
through an individual or employer Simplified Employee Pension
contribution, or rolled over from an existing IRA (traditional, Roth or
Education, subject to certain restrictions) or SEP-IRA through the plan.
-- Participants may direct the plan's agent to transfer, at any time and at
no cost to the participant, all or a portion of the participant's shares
held under the plan to another person. (Gift certificates are available
from the plan's agent.)
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-- Statements of account are mailed to participants after any investment
activity in the participant's account.
Disadvantages of the Plan
3. What are some of the disadvantages of the plan?
By not receiving cash dividends, but instead having stock purchased for their
accounts, participants must bear the market risk associated with the stock.
Also, participants have no control over the price or time at which stock is
purchased or sold for their accounts.
Administration
4. Who administers the plan?
Fleet National Bank, through EquiServe L.P., administers the plan, purchases
and holds shares of stock acquired under the plan, maintains records, and sends
statements of account activity to participants. All Enrollment Authorization
Forms and Initial Investment Forms (as described in Question No. 7), voluntary
cash investments, notices of withdrawal and all other matters and
communications related to the plan should be addressed to:
ATMOS Energy Corporation
c/o EquiServe L.P.
Dividend Reinvestment Department
P. O. Box 8040
Boston, MA 02266-8040
Please mention Atmos Energy Corporation in all correspondence and provide
your plan account number and/or Social Security number.
Participants may also telephone the plan's agent at 781-575-3100 or toll free
at 1-800-543-3038, 9:00 a.m.-6:00 p.m., Eastern time, or may call Atmos toll
free at 1-800-382-8667, 7:30 a.m.-4:30 p.m., Central time for information about
the plan. Questions about IRAs may be directed to the plan's agent for IRA
administration, toll free, at 1-800-472-7428.
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Participation
5. Who is eligible to participate in the plan?
Any person or entity, whether or not a holder of record of stock, is eligible
to join the plan, provided that (a) the person or entity fulfills the
prerequisites for participation described below under "Enrollment Procedures",
and (b) in the case of citizens or residents of a country other than the United
States, its territories and possessions, participation would not violate local
laws applicable to us or the participant. Shareholders of record who are
currently participants in the plan will remain enrolled in the plan unless such
a shareholder instructs the plan's agent in writing to close the account or to
alter the conditions of participation.
Participants in our Employee Stock Ownership Plan ("ESOP") are not eligible
to participate in the plan through the ESOP; provided, however, that ESOP
participants who are also shareholders of record are eligible to participate in
the plan with respect to shares held outside the ESOP, or they may join the
plan by making an initial investment.
Enrollment Procedures
6. How does a person participate in the plan?
(a) Shareholders of record--After being furnished a copy of this
prospectus, a record holder of stock may join the plan by completing
and returning to the plan's agent an Enrollment Authorization Form or
by contacting the plan agent. (See Question No. 7.)
(b) Beneficial Owners--After being furnished a copy of this prospectus, a
beneficial owner whose shares are registered in a name other than his
or her own (for example, in the name of a broker or bank nominee) may
participate in the plan (and have shares purchased with reinvested
dividends on the first 40,000 shares) by making arrangements with his
or her broker or bank to participate on his or her behalf through the
Depository Trust Company Dividend Reinvestment Service. Brokers and
nominees owning stock at Depository Trust Company may participate in
the plan through this service. Neither we, Fleet National Bank, nor
EquiServe are responsible for any fees that may be charged by such
broker or bank.
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(c) Persons not presently owners of shares of stock--After being furnished
a copy of this prospectus, a person not presently owning stock may
enroll in the plan by completing and returning to the plan's agent an
Initial Investment Form, and making an initial investment in the form
of a check or money order in an amount not less than $200 or more than
$100,000. (See Questions No. 7 and 14.)
(d) Establishment or rollover of an IRA or SEP-IRA--Individuals may use
the plan to establish an IRA (traditional IRA, Roth IRA or Education
IRA) or SEP-IRA and to make individual or employer Simplified Employee
Pension contributions to the IRA (traditional IRA, Roth IRA or
Education IRA) or SEP-IRA or to roll over an existing IRA (traditional
IRA, Roth IRA or Education IRA, subject to certain restrictions) or
SEP-IRA or other qualified plan distribution. (See Question No. 20.)
7. What do the Enrollment Authorization Form and the Initial Investment Form
provide?
The Enrollment Authorization Form provides for the purchase of additional
shares of stock by a shareholder of record through the following investment
options:
"Full Dividend Reinvestment"--The plan's agent will apply all quarterly cash
dividends paid on all shares then or subsequently registered in a participant's
name, together with any voluntary cash payments, toward the purchase of
additional shares of stock, subject to a maximum of 40,000 shares with such
reinvested cash dividends.
"Partial Dividend Reinvestment"--A participant may elect to reinvest
quarterly cash dividends paid on only a portion of the shares registered in the
participant's name and held in certificated form or in the participant's plan
account, subject to a maximum of 40,000 shares, by designating such election on
the Enrollment Authorization Form. Participants electing partial reinvestment
of quarterly cash dividends paid must designate the number of whole shares for
which they choose to receive cash dividends. Cash dividends will be sent to
participants by check or deposited electronically into a bank checking or
savings account, if requested. Dividends paid on all other plan shares,
together with voluntary cash investments, will be applied toward the purchase
of additional shares of stock.
"Voluntary Cash Investments Only"--A participant will continue to receive
cash dividends on shares registered in his or her name in the usual manner, and
the plan's agent will apply all voluntary
14
cash investments received toward the purchase of additional shares of stock.
Shares purchased with voluntary cash investments will be held in the
participant's plan account unless otherwise directed, and dividends paid on
these shares will be paid in cash or deposited electronically into the
participant's bank account, if requested.
Participants may elect to have cash dividends deposited electronically into a
bank checking or savings account at no charge by completing and submitting to
the plan's agent an Electronic Deposit of Dividends Enrollment Form and a
voided check or deposit slip. The Electronic Deposit of Dividends Enrollment
Forms are available upon request from us or the plan agent.
The Initial Investment Form allows a person who is not a shareholder of
record to purchase shares of stock with a minimum investment of $200 up to a
maximum investment of $100,000 in a calendar year and thus become a participant
in the plan. The form contains the required certification as to backup
withholding. A participant may elect to purchase shares through full or partial
dividend reinvestment or voluntary cash investments only, and may change the
number of shares subject to dividend reinvestment from time to time by
completing and submitting to the plan's agent a new Enrollment Authorization
Form. To be effective with respect to a particular dividend, any change in the
reinvestment election must be received by the plan's agent on or before the
record date for such dividend. It is not necessary for participants to hold
shares in certificated form to receive cash dividends on all or a portion of
their whole shares.
8. When may a person join the plan?
After receiving a copy of this prospectus, shareholders of record may join
the plan at any time by completing an Enrollment Authorization Form and mailing
it to the plan's agent. After receiving a copy of this prospectus, non-
shareholders may enroll in the plan at any time by making an initial
investment; provided, however, that any investment received as an initial
investment without a properly completed Initial Investment Form will be
returned and no action will be taken. Once in the plan, a participant will
remain a participant until he or she discontinues participation. If an
Enrollment Authorization Form requesting reinvestment of dividends is received
by the plan's agent on or before the record date for a dividend payment, then
that dividend payment will be applied toward the purchase of shares of stock.
Record dates are ordinarily about the 25th day of February,
15
May, August and November. However, when the 25th day of those months falls on a
national holiday, then the dividend record date would ordinarily be the first
business day following that holiday.
If an Enrollment Authorization Form requesting reinvestment of dividends is
received by the plan's agent from a shareholder after the record date
established for a particular dividend, then the reinvestment of dividends will
begin on the dividend payment date following the next record date if that
shareholder is still a holder of record.
Purchases and Price of Shares
9. What is the source of stock purchased under the plan?
At our discretion, shares of stock will be purchased either directly from us,
in which event the shares will be either authorized but unissued shares or
shares held by us as treasury stock, or on the open market.
10. When will shares be purchased under the plan?
Purchases made directly from us will be made on the relevant Investment Date
(as defined below). Purchases on the open market will begin on the Investment
Date and will be completed no later than 30 days from that date except where
completion at a later date is necessary or advisable under any applicable
federal securities laws. These purchases may be made on the New York Stock
Exchange or any other securities exchange where such shares are traded, in the
over-the-counter market or by negotiated transactions and may be subject to
terms with respect to price, delivery and other terms as the plan's agent may
agree. Neither we nor any participant shall have any authority or power to
direct the time or price at which shares may be purchased, or the selection of
the broker or dealer through or from whom purchases are to be made.
When shares are purchased on the open market, participants become owners of
shares as of the date of settlement and the reports sent to participants will
reflect such settlement date. (See Question No. 17.)
16
There are at least four (4) Investment Dates each month. The Investment Dates
will be the first business day of each week, except for any week which contains
a dividend payment date, in which event the dividend payment date will become
the Investment Date; provided, however, that if the dividend payment date is on
a Friday, the Investment Date will be the following Monday. If, however, an
Investment Date falls on a date on which the New York Stock Exchange is closed,
the first succeeding day on which the New York Stock Exchange is open will be
the Investment Date.
11. What will be the price to the participant of shares purchased under the
plan?
The price to the participant of shares purchased under the plan with
reinvested dividends paid quarterly will be 97% of the average price (as
defined below), subject to a maximum of the participant's first 40,000 shares
held in the plan. Purchases of stock made with voluntary cash investments and
initial investments will be made at 100% of such average price. In the case of
purchases of stock from us, the average price is determined by averaging the
high and low sales prices of stock as reported on the New York Stock Exchange
on the relevant Investment Date. If no trading in stock occurs on the New York
Stock Exchange on the relevant Investment Date, the purchase price per share
will be determined by averaging the high and low sales prices per share on the
trading day immediately preceding the Investment Date and the trading day
immediately following the Investment Date.
In the case of purchases of stock on the open market, the average price will
be the weighted average purchase price of all shares purchased for that
particular Investment Date.
12. How many shares of stock will be purchased for participants?
The number of shares to be purchased depends on the amount of the
participant's dividends, if any, the share price, and any voluntary cash
investments or initial investments received by the plan's agent. Each
participant's account will be credited with the number of shares, including
fractions, equal to the total amount invested divided by the purchase price.
Each participant may receive a discount of three percent (3%) on new shares of
stock purchased with reinvested dividends only on dividends paid quarterly on
such participant's first 40,000 shares held in the plan.
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Voluntary Cash Investments and Initial Investments
13. How does the voluntary cash investment feature of the plan work?
All eligible shareholders of record (except for brokers and nominees) who
have submitted a signed Enrollment Authorization Form and new investors
submitting an Initial Investment Form are eligible to make voluntary cash
investments at any time. Payments may be made by check or money order or may be
deducted electronically on a monthly basis from a financial institution
account. (See Question No. 21.) All those investments must be payable to
EquiServe in U.S. dollars and drawn against a U.S. bank. EquiServe will not
accept third party checks. EquiServe will apply any voluntary cash investment
or initial investment received from a participant to the purchase of shares of
stock for the account of the participant on the next Investment Date if that
stock is purchased from us, and as soon as practicable beginning on the
Investment Date if the stock is purchased on the open market.
In the event that any check or electronic monthly investment is returned
unpaid for any reason, the plan's agent will consider the request for
investment of that money null and void and shall immediately remove from the
participant's account shares, if any, purchased upon the prior credit of that
investment. A fee of $25 will also be assessed against the participant's
account. The plan's agent shall then be entitled to sell those shares to
satisfy any uncollected amounts. If the net proceeds of the sale of those
shares are insufficient to satisfy the balance of any uncollected amounts, the
plan's agent shall be entitled to sell additional shares from the participant's
account to satisfy the uncollected balance.
Brokers or nominees participating on behalf of beneficial owners may utilize
only the dividend reinvestment feature of the plan and may not utilize the
voluntary cash investment feature of the plan. Therefore, if shares of stock
are held by a broker or nominee and the owner of those shares wishes to
participate in the voluntary cash investment feature of the plan, that owner
must become a shareholder of record by having all or part of those shares
transferred to that owner's name or make an initial investment and become a
participant in the plan. Otherwise, such participants are subject to the same
terms and conditions of the plan as are all other participants.
18
14. How are initial investments made?
Initial investments must be at least $200 and not more than $100,000 in the
form of a check or money order, and must be included with the completed Initial
Investment Form and returned to the plan's agent at the address listed on the
form.
15. When will voluntary cash investments and initial investments received by
the plan's agent be invested?
Voluntary cash investments and initial investments received by the plan's
agent no later than 12:00 Noon on the business day preceding an Investment Date
will be held by the plan's agent and invested beginning on the next Investment
Date following its receipt of funds. No interest will be paid on amounts held
by the plan's agent pending investment. After sending a voluntary cash
investment or initial investment, if a participant changes his or her mind and
decides he or she does not want to participate, then, upon a participant's
written request received by the plan's agent at least two business days prior
to the applicable Investment Date, a voluntary cash investment or initial
investment will be returned to the participant. However, no refund of a check
or money order will be made until the funds have been actually received by the
plan's agent and cleared by the bank or financial institution upon which such
check has been written.
Expenses and Costs
16. What are the costs to participants in the plan?
For plan participants, there are no brokers' commissions and no fees or
service charges connected with stock purchases. We pay these costs, along with
any costs for administration of the plan, including fees for administration of
an IRA. (See Question No. 20.) However, participants are charged a fee for
selling shares through the plan. (See Question No. 26.)
Reports to Participants
17. What reports will be sent to participants in the plan?
Each participant will receive a statement of account showing amounts invested
with voluntary cash investments, initial investments, the purchase price of
shares purchased with reinvested
19
dividends, the tax basis of plan purchases, the number of shares purchased and
other information resulting from investment activity for the year to date. Each
statement contains a form that can be used to deposit shares for safekeeping,
make voluntary cash investments or withdraw shares from the plan. At each year-
end, the statement will include all information pertaining to a participant's
account for such year and should be retained for federal and state income tax
purposes. In addition, each participant will receive copies of the same
communications sent to every other holder of stock, including our quarterly
reports, Annual Report to Shareholders, and the Notice of Annual Meeting and
Proxy Statement. Each participant will receive annually Internal Revenue
Service information on Form 1099-DIV for reporting dividend income received.
Stock Certificates and Safekeeping
18. What is the safekeeping feature of the plan and how does it work?
At the time of enrollment in the plan, or at any later time, participants may
use the plan's safekeeping service to deposit with the plan's agent stock
registered in the name of the participant. Shares deposited will be transferred
into the name of the plan's agent or its nominee and credited to the
participant's account under the plan. After that time, those shares will be
treated in the same manner as shares purchased through the plan.
By using the plan's safekeeping service, participants do not bear the risk
associated with loss, theft or destruction of stock certificates. Also, because
shares deposited with the plan's agent are treated in the same manner as shares
purchased through the plan, they may be transferred or sold through the plan in
a convenient and efficient manner. Dividends paid on shares deposited for
safekeeping may be reinvested or paid in cash. Participants may elect to
receive cash dividends on all or a portion of those shares by completing and
submitting to the plan's agent a new Enrollment Authorization Form indicating
the number of whole plan shares for which they choose to receive cash
dividends. Participants may receive cash dividends by check or electronic
deposit into a bank checking or savings account. Participants may request
electronic deposit of dividends by completing and submitting to the plan's
agent an Electronic Deposit of Dividends Enrollment Form, available from both
us and the plan's agent. (See Question No. 7.)
20
Participants who wish to deposit their stock certificates with the plan's
agent should consider sending them with a plan transaction form or a letter of
direction to the plan's agent by registered mail, first class mail, or
certified mail, return receipt requested, properly insured, to the following
address, since the participant bears the risk of replacement costs if the
certificates are lost in transit:
EquiServe L.P.
Dividend Reinvestment Dept.
P.O. Box 8040
Boston, Massachusetts 02266-8040
Certificates sent by overnight delivery service should be addressed to:
EquiServe L.P.
Dividend Reinvestment Dept.
150 Royall Street
Canton, Massachusetts 02021
THE STOCK CERTIFICATES SHOULD NOT BE ENDORSED.
19. What happens to shares purchased under the plan?
Shares purchased under the plan will be automatically held in safekeeping by
the plan's agent in its name or the name of its nominee. The number of shares
(including fractional interests) held for each participant will be shown on
each statement of account. Participants may obtain a new certificate for all or
some of the whole shares of stock held in their plan accounts by contacting the
plan's agent. Any remaining shares will continue to be held by the plan's
agent.
Dividends on shares purchased through the plan, whether they are held by the
participant in certificated form or by the plan's agent, may be paid in cash to
the shareholder by check or electronic deposit or reinvested pursuant to the
shareholder's instruction to the plan's agent contained in a completed
Enrollment Authorization Form. Any change in the number of shares subject to
dividend reinvestment must be made by completion of a new Enrollment
Authorization Form or by contacting the plan's agent.
21
Individual Retirement Accounts
20. What is the IRA feature of the plan and how does it work?
The Taxpayer Relief Act of 1997 expanded the options available for retirement
savings. As discussed above, a participant may establish an IRA (traditional,
Roth or Education) or SEP-IRA that invests in our stock through the plan. The
plan may be used to make contributions to it, or to roll over an existing IRA
(traditional, Roth or Education, subject to certain restrictions) or other
qualified plan distribution. A participant may make individual cash
contributions to a plan IRA and, if the participant's employer has established
a Simplified Employee Pension (SEP) plan, may also have the employer's SEP
contributions made to the plan IRA. After being furnished with a copy of this
prospectus and a statement describing the legal rights and requirements of an
IRA (an "IRA Disclosure Statement"), an individual may open an IRA
(traditional, Roth or Education) or SEP-IRA by completing and signing an IRA
Enrollment Form and returning it to the plan's agent with an initial
contribution. The minimum initial contribution for an IRA Plan account is $200.
Rollover contributions from another IRA or qualified plan may be made by a
record holder in any amount. Such a person may transfer from an existing IRA
into a plan IRA by completing an IRA Enrollment Form and IRA Asset Transfer
Form and returning them to the plan's agent. IRA Enrollment Forms, IRA Asset
Transfer Forms, and IRA Disclosure Statements are available upon request from
both the plan's agent for IRA services and us. There are three IRA options
available as follows:
Traditional IRA--Traditional IRA contributions are allowed for individuals
under age 70 1/2 who have taxable compensation. Tax-deductible contributions
are subject to new adjusted gross income (AGI) phase-out levels, while
nondeductible contributions are allowed regardless of income level. A maximum
individual contribution is $2,000 annually, with tax-deferred growth of
investment. Penalty-free withdrawals can be made to help pay for first-home
purchases or higher education expenses.
Roth IRA--Contributions are allowed for individuals of any age with an annual
gross income below $160,000 (for those filing joint returns) or $110,000 (for
those filing single returns), but allowed contributions begin to phase out at
an adjusted gross income of $150,000 (for those filing joint returns) and
$95,000 (for those filing single returns). A maximum individual contribution is
22
$2,000 annually. Investments and earnings grow tax-free. Contributions are not
tax deductible but if the investment stays in the Roth IRA for five years or
more, qualified withdrawals are distributed tax-free (and free of penalty in
most cases). There are no requirements to begin distributions at age 70 1/2.
Penalty-free withdrawals can be made to help pay for first-home purchases. (The
maximum annual contribution between a traditional IRA and Roth IRA is $2,000.)
Education IRA--Any individual of any age may contribute, subject to the same
income ranges as the Roth IRA, to an Education IRA for a child. Contributions
of up to $500 annually can be made for secondary education expenses for a child
beneficiary under age 18. Contributions are not tax-deductible, but investments
grow tax-free and are not taxed when withdrawn for higher education expenses,
including tuition, room and board, books, and supplies. Withdrawals must be
made by age 30 or the investment will be taxed to the child and will be subject
to a 10% penalty. Unused account balances may be transferred to another family
member's Education IRA.
The annual fee charged by the plan's agent for administration of an IRA
(traditional, Roth or Education) or SEP-IRA will be paid by the Company.
However, all fees associated with the termination of an IRA (traditional, Roth
or Education) or a SEP-IRA will be paid by the terminating participant.
Electronic Monthly Investments
21. What is the electronic monthly investment feature of the plan and how does
it work?
Participants may make voluntary cash investments of not less than $25 nor
more than a total of $100,000 during a calendar year by electronic funds
transfer from a predesignated U.S. bank account.
If a participant has already established a plan account and wishes to
initiate electronic monthly investments, he or she must complete and sign an
Electronic Monthly Investment Form and return it to the plan's agent together
with a voided blank check (for a checking account) or deposit slip (for a
savings account) for the account from which funds are to be drawn. Electronic
Monthly Investment Forms may be obtained from both the plan's agent and us.
Forms will be processed and will become effective as promptly as practicable.
23
If a non-shareholder wishes to establish a plan account by means of an
initial investment, he or she may also initiate electronic monthly investments
by completing the appropriate section of the Initial Investment Form.
Once an electronic monthly investment is initiated, funds will be drawn from
the participant's designated account up to five business days preceding the
second weekly Investment Date of the month and will be invested in shares of
stock beginning on that Investment Date.
Participants may change the amount of their electronic monthly investment by
completing and submitting to the plan's agent a new Electronic Monthly
Investment Form. To be effective with respect to a particular Investment Date,
however, the new Electronic Monthly Investment Form must be received by the
plan's agent by the 25th day of the month preceding the next Investment Date.
Participants may terminate their electronic monthly investment by notifying the
plan's agent in writing.
Transfer of Shares
22. May a participant assign or transfer all or a part of his or her shares
held under the plan to another person?
Yes. If a participant wishes to change the ownership of all or part of his or
her shares held under the plan through gift, private sale or otherwise, the
participant may effect the transfer by mailing to the plan's agent a properly
completed and executed Stock Power or Gift Transfer Form. Transfers of a
participant's shares may be made in whole and/or fractional share amounts;
provided, however, that with respect to any transfer that establishes a new
plan account, at least one whole share must be transferred. The transfer of a
participant's shares is processed in the same manner as the transfer of stock
certificates, including the requirement of a medallion signature guarantee.
Stock Powers and Gift Transfer Forms are available upon request from the plan's
agent.
23. If plan shares are transferred to another person, will the plan's agent
issue a stock certificate to the transferee?
If the participant so requests, a stock certificate(s) will be issued to the
transferee. No fractional shares of stock will be issued in certificate form.
Otherwise, shares transferred will continue to be
24
held by the plan's agent under the plan. An account will be opened in the name
of the transferee, if he or she is not already a participant, the transferee
will automatically be enrolled in the plan under the full dividend reinvestment
option, and all dividends on shares transferred to the transferee's plan
account will be reinvested under the terms of the plan.
24. How will a transferee be advised of his or her stock ownership?
The transferee will receive a statement showing the number of shares
transferred to and held in the transferee's plan account. At the transferor's
option, a gift certificate evidencing the transfer may be sent to the
transferee. Gift certificates are provided with the Gift Transfer Forms.
Tax Consequences
25. What are the federal income tax consequences of participation in the plan?
The following is a general discussion of certain material federal income tax
consequences with respect to participation in the plan and is based on current
federal income tax law. Plan participants should consult their own tax advisors
to determine particular tax consequences (including state income tax
consequences) that may result from participation in the plan and subsequent
disposition of shares acquired pursuant to the plan. This summary does not
discuss federal or foreign income tax consequences to participants who are not
citizens or residents of the United States or who reside outside of the United
States.
Reinvested Dividends. In the case of reinvested dividends whereby the plan's
agent acquires shares for a participant's account directly from us, the
participant must include in gross income as a dividend an amount equal to the
fair market value of the shares (as of the date of the distribution) purchased
with the participant's reinvested dividends. The participant's basis in those
shares will also equal the fair market value of the purchased shares on the
dividend payment date. (See Question No. 11.)
Alternatively, when the plan's agent purchases stock for a participant's
account on the open market with reinvested dividends, the participant must
include in gross income as a dividend an amount equal to the full amount of the
cash dividend used to purchase those shares plus that portion
25
of any brokerage commissions paid by the plan's agent which are attributable to
the purchase of the participant's shares. The participant's basis in plan
shares held for his or her account will be equal to their purchase price plus
allocable brokerage commissions.
Voluntary Cash Investments and Initial Investments. In the case of shares
purchased on the open market with voluntary cash investments or initial
investments, participants must include in gross income as a dividend an amount
equal to any brokerage commissions paid by the Company. The participant's basis
in the shares acquired with voluntary cash investments or initial investments
will be the cost of the shares to the plan's agent plus an allocable share of
any brokerage commissions paid by the Company.
Receipt or Disposition of Shares. A participant will not realize any taxable
income when he or she receives certificates for whole shares credited to his or
her account under the plan, either upon a request for such certificates or upon
withdrawal from or termination of the plan. However, the participant who
receives, upon withdrawal from or termination of the plan, a cash payment for
the sale of plan shares held for such participant's account or for a fractional
share then held in his or her account will realize gain or loss measured by the
difference between the amount of the cash received and the participant's basis
in such shares or fractional share. This gain or loss will be capital in
character if the shares or fractional shares are a capital asset in the hands
of the participant.
Tax Information and Backup Withholding. Participants will receive annual tax
information with respect to dividend income received in connection with the
plan, as if those amounts had been paid directly to the participants.
Participants will continue to be subject to the backup withholding requirements
of the federal income tax laws. If these requirements are not satisfied, 31% of
the dividends payable to a participant may be withheld and paid to the Internal
Revenue Service and will not be reinvested under the plan.
Additional Information. A participant's holding period for shares acquired
pursuant to the plan will begin on the day following the Investment Date. In
the case of corporate shareholders, dividends may be eligible for the
dividends-received deduction. The Tax Equity and Fiscal Responsibility Act of
1982 imposes certain reporting obligations upon brokers and other middlemen. As
a result, the plan's agent may be required to report to the Internal Revenue
Service and the participant any sale of
26
shares effected on behalf of a participant. For further information as to tax
consequences of participation in the plan, participants should consult with
their own tax advisors.
Termination of Participation
26. How and when may a participant terminate participation in the plan?
A participant may terminate participation in the plan any time by notice in
writing to the plan's agent received prior to a dividend record date. Within 10
business days following receipt of notice of termination, the plan's agent will
send the participant a certificate for the whole shares in the participant's
plan account. If the participant so requests, the plan's agent will sell all or
a portion of such shares and remit to the participant the proceeds of the sale,
less brokerage commissions of not more than five cents ($.05) per share, any
transfer tax and a fee of $15 charged by the plan's agent. If the request to
terminate is received by the plan's agent on or after the record date for a
dividend payment, the request to terminate may not become effective until any
dividend paid on the dividend payment date has been reinvested and the shares
of stock purchased are credited to the participant's account under the plan.
The plan's agent, in its sole discretion, may either pay any dividend in cash
or reinvest it in stock on behalf of the terminating participant. If the
dividend is reinvested, the plan's agent will sell the shares purchased and
remit the proceeds to the participant (less commissions and fees, as described
above).
Any voluntary cash investment which had been sent to the plan's agent prior
to the request to terminate will also be invested unless return of the amount
is expressly requested in the request for termination and such request is
received at least two business days prior to the relevant Investment Date. In
every case of termination, the participant's interest in a fractional share
will be paid in cash based on the actual market price of stock sold on the New
York Stock Exchange (less commissions and fees, as described above). The plan's
agent, at its discretion, may terminate any account which contains only a
fraction of a share by paying the account holder the dollar value of such
fractional share (less commissions and fees, as described above). In addition,
as discussed below in Question 32, the plan's agent, at its discretion, may
terminate any account the holder of which is determined to be using the plan in
an abusive manner that is not consistent with the purpose of the plan.
27
After termination, dividends on shares held in certificated form will be paid
to the shareholder in cash or deposited electronically into the shareholder's
bank account, if requested, unless and until the shareholder rejoins the plan,
which he or she may do at any time by completing and returning an Enrollment
Authorization Form to the plan's agent.
A participant may request that the plan's agent sell some, but not all, of
the shares in a plan account, and remit the proceeds (less commissions and fees
as described above) to the participant as soon as possible. If the request to
sell is received by the plan's agent after the record date for a dividend
payment, any dividends paid on those shares will be reinvested and the shares
of stock purchased will be credited to the participant's plan account.
Miscellaneous
27. What happens when participants sell or transfer all of the shares
registered in their names?
When participants sell or transfer all of the stock registered in their
names, the plan's agent will continue to purchase shares of stock with the
dividends on the shares credited to their accounts under the plan until
otherwise notified.
28. What happens if we have a stock rights offering?
In the case of a stock rights offering, plan participants will receive rights
based upon whole shares of stock registered in their names as of the record
date for any rights offered, and whole shares credited to their accounts under
the plan as of the record date.
29. What happens if we issue a stock dividend or declare a stock split?
All stock dividends or split shares of common stock distributed by us will be
added to the participant's account. A participant may withdraw any number of
whole shares held in his or her account by completing a transaction form and
delivering to the plan agent. If a stock split occurs, it is the responsibility
of the participant to notify the plan agent of any changes to their partial
dividend reinvestment election to be reallocated to adjust for their cash
dividends to be paid on a "post-split" basis.
28
30. How will a participant's shares be voted at shareholders' meetings?
Full and fractional shares held in the plan for a participant will be voted
as the shareholder directs. A participant will receive a proxy card showing the
total number of shares he or she holds, both those registered in the
participant's name and those the participant holds through the plan.
31. May the plan be amended or discontinued?
We reserve the right to suspend, amend or terminate the plan at any time. All
shareholders, both participants and non-participants in the plan, will be
notified of any suspension, termination or significant amendment of the plan.
If the plan is terminated, shares held in the participant's account will be
distributed as described in Question No. 26. Any change in the source of
purchase of shares under the plan from open market purchases or direct issuance
by us does not constitute an amendment to the plan.
32. Who interprets and regulates the plan?
We reserve the right to interpret and regulate the plan, as deemed desirable
or necessary, in connection with its operation. Additionally, we and the plan's
agent each reserve the right to terminate enrollment of any participant who
participates in the plan in a manner abusive of the purpose and intent of the
plan as determined by us or plan's agent or in a manner deemed by us or plan's
agent not to be in the best interest of shareholders generally. For example,
shareholders who are discovered to be using the plan for arbitrage, or short-
term income producing strategies, may have their participation in the plan
terminated by the adminstrator of the plan.
33. What are our responsibilities as well as those of the plan's agent under
the plan?
Neither we nor the plan's agent will be liable for any good faith act or for
any good faith omission to act, including, without limitation, any claim or
liability arising out of failure to terminate a participant's account upon the
participant's death, the prices at which shares of stock are purchased or sold
for a participant's account, the times when purchases or sales are made, or
fluctuations in the market value of stock. However, nothing contained in this
provision affects a shareholder's right to bring a cause of action based on
alleged violations of the federal securities laws.
29
34. Does participation in the plan involve any risk?
The risk to participants is the same as with any other investment in our
stock. A participant may lose an advantage otherwise available from being able
to select more specifically the timing of investment or sale of shares.
Participants must recognize that neither we nor the plan's agent can assure a
profit or protect against a loss on the shares purchased under the plan.
USE OF PROCEEDS
We do not know the number of shares that we will utimately purchase under the
plan nor the prices at which the shares will be sold. The purpose of the plan
is to provide to our shareholders, customers and other investors a simple,
convenient and economical way to accumulate and increase their investment in
our stock and to reinvest all or a portion of their cash dividends in
additional shares of stock. The plan permits us to increase its shareholder
base and provides us with a relatively inexpensive source of additional
capital. The proceeds are intended to be used for general corporate purposes.
LEGAL OPINION
The validity of the shares of the stock offered hereby has been passed upon
for us by Gibson, Dunn & Crutcher LLP, 2100 McKinney Avenue, Suite 1100,
Dallas, Texas 75201 and Hunton & Williams, 951 E. Byrd St., Richmond, Virginia
23219.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements of Atmos Energy Corporation for the year ended September
30, 1999, incorporated by reference in our Annual Report on Form 10-K for the
year ended September 30, 1999, as set forth in its report dated November 9,
1999. We incorporate by reference such consolidated financial statements in
this prospectus in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
30
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Texas Business Corporation Act and the Virginia Stock Corporation Act
permit, and in some cases require, corporations to indemnify directors and
officers who are or have been a party or are threatened to be made a party to
litigation against judgments, penalties, including excise and similar taxes,
fines, settlements, and reasonable expenses under certain circumstances.
Article IX of our Restated Articles of Incorporation, as amended, and Article
IX of our Amended and Restated Bylaws provide for indemnification of judgments,
penalties, including excise and similar taxes, fines, settlements, and
reasonable expenses and the advance payment or reimbursement of such reasonable
expenses to directors and officers to the fullest extent permitted by law.
As authorized by Article 2.02-1 of the Texas Business Corporation Act, and
Section 13.1-697 of the Virginia Stock Corporation Act, each of our directors
and officers may be indemnified by us against expenses, including attorney's
fees, judgments, fines and amounts paid in settlement, actually and reasonably
incurred in connection with the defense or settlement of any threatened,
pending or completed legal proceedings in which he is involved by reason of the
fact that he is or was a director or officer of ours if he acted in good faith
and in a manner that he reasonably believed to be in or not opposed to our best
interests, and, with respect to any criminal action or proceeding, if he had no
reasonable cause to believe that his conduct was unlawful. In each case, such
indemnity shall be to the fullest extent authorized by the Texas Business
Corporation Act and the Virginia Stock Corporation Act. If the director or
officer is found liable for willful or intentional misconduct in the
performance of his duty to us, then indemnification will not be made.
Article X of our Restated Articles of Incorporation, as amended, provides
that no director shall be personally liable to us or our shareholders for
monetary damages for any breach of fiduciary duty as a director except for
liability
. for any breach of duty of loyalty to us or our shareholders,
. for an act or omission not in good faith or which involves intentional
misconduct or a knowing violation of law,
. for a transaction from which the director received an improper benefit,
whether or not the benefit resulted from an action taken within the
scope of the director's office,
31
. for an act or omission for which the liability of a director is
expressly provided by statute, or
. for an act related to an unlawful stock repurchase or payment of a
dividend.
In addition, Article IX of our Restated Articles of Incorporation, as
amended, and Article IX of our Amended and Restated Bylaws require us to
indemnify to the fullest extent authorized by law any person made or threatened
to be made party to any action, suit or proceeding, whether criminal, civil,
administrative, arbitrative or investigative, by reason of the fact that such
person is or was a director or officer of ours or serves or served at our
request as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of any other enterprise.
We maintain an officers' and directors' liability insurance policy insuring
officers and directors against certain liabilities, including liabilities under
the Securities Act of 1933. The effect of such policy is to indemnify such
officers and directors against losses incurred by them while acting in such
capacities.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore
unenforceable.
32
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We have not authorized anyone to give any information or make any
representation about us that is different from, or in addition to, that
contained in this prospectus or in any of the materials that we have
incorporated by reference into this document. Therefore, if anyone does give
you information of this sort, you should not rely on it. If you are in a
jurisdiction where offers to sell, or solicitations of offers to purchase, the
securities offered by this document are unlawful, or if you are a person to
whom it is unlawful to direct these types of activities, then the offer
presented in this document does not extend to you. The information contained in
this document speaks only as of the date of this document, unless the
information specifically indicates that another date applies.
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ATMOS
ENERGY
CORPORATION
[LOGO OF ATMOS]
DIRECT STOCK PURCHASE PLAN
----------------
PROSPECTUS
----------------
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3100-DRP-00
Lynn Hord
Vice President,
Investor Relations & Corporate Communications
[ATMOS LOGO APPEARS HERE]
July 12, 2000
Dear Shareholder:
Enclosed is a copy of a new prospectus for our Direct Stock Purchase Plan
(DSPP). We have made some modifications to the plan in order to update it and
more closely align its provisions with the purpose of the plan.
The purpose of the DSPP is to provide you, our valued shareholders, with a
simple, convenient and economical way to accumulate and increase your investment
in Atmos common stock. Through DSPP participation, you may reinvest all or a
portion of your cash dividends and purchase additional shares of Atmos common
stock at a three percent discount to market value. Atmos pays all fees for
shareholder participation in the Plan.
Some of the more important modifications we have made to the plan are as
follows:
. The maximum number of shares on which a participant may purchase
shares with reinvested dividends each quarter is 40,000 shares per
account.
. Participants who terminate plan participation for shares held in a
regular DSPP account will now pay a fee to EquiServe of $15 plus
brokerage fees of not more than five cents ($.05) per share and any
applicable transfer tax.
. Participants who terminate plan participation for shares held in an
IRA account will pay all fees associated with termination of the IRA
account (currently $50).
If you have any questions about our Direct Stock Purchase Plan, please
contact our Investor Relations Department at 1-800-382-8667 or EquiServe at 1-
800-543-3038. You may also contact us by email at
investorrelations@atmosenergy.com.
Sincerely,
/s/ Lynn Hord
Lynn Hord
Enclosures