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                                                                    EXHIBIT 4(b)

                                AMENDMENT NO. ONE
                                     TO THE
                            ATMOS ENERGY CORPORATION
                     EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
                            EFFECTIVE JANUARY 1, 1999


         WHEREAS, ATMOS ENERGY CORPORATION (the "Company") has heretofore
amended and restated the Atmos Energy Corporation Employee Stock Ownership Plan
and Trust Effective January 1, 1999 (the "Plan"); and

         WHEREAS, pursuant to the provisions of Section 10.01 of the Plan, the
Company desires to amend the Plan in certain respects as hereinafter provided.

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

         1. Subsection 3.01(c) is amended by deleting the first sentence of such
subsection and replacing it with the following:

         The term "Entry Date" shall mean the first day of the first payroll
         period coincident with or immediately following each January 1st, April
         1st, July 1st, or October 1st.

         2. Subsection 3.05(b) is amended by striking paragraph (2) and
substituting the following paragraphs (2) and (3) and renumbering paragraph (3)
as paragraph (4):

                  (2) All amounts transferred from the United Cities Plan that
         are attributable to an Employee's employer matching contributions under
         the United Cities Plan shall be held in a subaccount of the Employer
         Contribution Account established for such Employee under the Plan; and

                  (3) All amounts transferred from the United Cities Plan that
         are attributable to an Employee's additional matching contributions
         under the United Cities Plan shall be held in a subaccount of the
         Employer Contribution Account established for such Employee under the
         Plan; and

         3. Subsection 4.01(e)(2) is amended by inserting the following sentence
at the end of such subsection:

         An amendment to a Participant's salary reduction agreement reducing his
         salary reduction to zero percent (0%) will not be deemed to be a
         termination of such Participant's salary reduction agreement.

         4. Section 4.03 is amended by adding the following at the end of said
         Section:

         Discretionary contributions credited to a Participant's Employer
         Contribution Account shall be one hundred percent (100%) vested and
         nonforfeitable at all times.

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         5. Subsection 5.03(a)(1) is amended by deleting such subsection and
replacing it with the following:

                  (1)      is $30,000 (or such greater amount as permitted under
                           Internal Revenue Service Rulings to reflect increases
                           in the cost-of-living); and

         6. Subsection 6.04(b)(1)(iii) is amended by adding at the beginning
thereof, the following: "Unless the Participant elects a later date (but not
later than the Participant's Required Beginning Date),".

         7. Subsection 6.04(b)(2) is amended by striking paragraph (B) of said
subsection and substituting in lieu thereof the following:

                  (B) The "Required Beginning Date" of a Participant who is not
         a five percent owner is the April 1 of the calendar year immediately
         following the later of (i) the calendar year in which he attains age
         seventy and one-half (70 1/2), or (ii) the calendar year in which he
         incurs a Severance from Service.

         8. Subsection 6.06(a)(1) is amended by deleting the first sentence in
such subsection and replacing it with the following:

         If the Participant elects a withdrawal from his Salary Reduction
         Contribution Account prior to the date on which he attains age 59-1/2,
         such withdrawal (i) may not include any earnings accrued after 1988 and
         (ii) will require the consent of the Committee.

         9. Subsection 6.06(a)(1)(c) is amended by deleting such subsection and
replacing it with the following:

                  the payment of tuition and room and board for the next twelve
                  (12) months of post-secondary education for the Participant,
                  the Participant's spouse, children or dependents; or

         10. Subsection 6.06(a)(1) is amended by inserting the following
paragraph at the end of such subsection, immediately before paragraph (2), and
renumbering paragraphs (2) and (3) as paragraphs (3) and (4):

         (2)      Withdrawals made from a Participant's Safeharbor Matching
                  Contribution Account may not occur on account of financial
                  hardship.

         11. Subsection 6.06(b) is amended by striking the first sentence of
said subsection and substituting in lieu thereof the following:

         On any January 1, a Participant may elect to withdraw any amount in his
         Employer Contribution Account or Matching Employer Contribution Account
         but only to the extent that such amount was allocated and paid to
         either such Account under this Plan (including amounts allocated under
         this Plan pursuant to Section 3.05 hereof) or the Prior Plan at least
         two (2) years prior to withdrawal; provided, however, that a
         Participant may withdraw any amount allocated to either such Account at
         any time such Participant properly demonstrates a financial hardship as
         described in Section 6.06(a)(1) hereof.

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         12. The third sentence of Section 7.01 is amended by deleting such
sentence and replacing it with the following:

         Notwithstanding anything herein to the contrary and pursuant to ERISA
         Section 403(c)(2), upon an Employer's request, a contribution which was
         made by an Employer to the Plan by a mistake of fact or conditioned
         upon the deductibility of the contribution under Code Section 404,
         shall be returned to the Employer within one (1) year after the payment
         of the contribution or the disallowance of the deduction (to the extent
         disallowed), whichever is applicable.

         13. Subsection 7.02(i) is amended by striking the second paragraph of
said subsection and substituting in lieu thereof the following:

         Each person who is a Participant and is actively employed by an
         Employer on the date that a dividend is paid under clause (ii) above
         may elect to contribute such dividend to the Plan as an additional
         Salary Reduction Contribution under Section 4.01 hereof for the Plan
         Year in which such dividend is paid, subject to the limitations
         described in Sections 4.01(c) and 5.03 hereof, provided, however, that
         if such Participant does not so elect to contribute such dividend, such
         dividend shall be paid to such Participant in cash.

         14. Subsection 7.05(a) is amended by striking said subsection and
substituting in lieu thereof the following:

         (a)      In General. Notwithstanding the preceding provisions of this
                  Article VII, a Participant shall have the right, in accordance
                  with the provisions of this Section 7.05, to direct the
                  Trustee as to the investment of his Salary Reduction
                  Contribution Account and any rollover contributions and any
                  amounts in his United Cities employer matching contribution
                  subaccount pursuant to Section 3.05(b)(2) hereof (the "United
                  Cities Matching Subaccount"), held in his Employer
                  Contribution Account. Any such investment direction by a
                  Participant shall consist solely of the right to direct the
                  extent to which Salary Reduction Contributions, rollover
                  contributions and amounts in his United Cities Matching
                  Subaccount, if any, shall be invested in various investment
                  media comprising a Diversified Fund. Such investment
                  directions shall be made in accordance with procedures
                  established by the Committee. Should a Participant fail to
                  provide the Trustee with the investment directions described
                  herein as to any Salary Reduction contribution or rollover
                  contribution or amounts in his United Cities Matching
                  Subaccount, such contribution or amount shall be invested in
                  Company Stock.

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         15. Subsection 7.06(a) is amended by deleting paragraph (4) and
replacing it with the following:

         (4)      the default provisions of the promissory note which evidences
                  each loan must prohibit offset of the Participant's account
                  balance under this Plan prior to the time that the Participant
                  has a Severance From Service or the Trustee otherwise would
                  distribute the Participant's account balance under the Plan.

         IN WITNESS WHEREOF, the Company has caused this AMENDMENT NO. ONE TO
THE ATMOS ENERGY CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST EFFECTIVE
JANUARY 1, 1999 to be executed in its name on its behalf this 1st day of August,
2000, effective as of January 1, 1999.

                                   ATMOS ENERGY CORPORATION

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

ATTEST:
                                   By: /s/ DON P. BURMAN
                                       ------------------------------------
                                       Don P. Burman

-----------------------------
                                   By: /s/ GARY L. SCHLESSMAN
                                       ------------------------------------
                                       Gary L. Schlessman


                                   By: /s/ RONALD W. MCDOWELL
                                       ------------------------------------
                                       Ronald W. McDowell


                                   By: /s/ WYNN D. MCGREGOR
                                       ------------------------------------
                                       Wynn D. McGregor


                                   By: /s/ GORDON J. ROY
                                       ------------------------------------
                                       Gordon J. Roy

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