exv10w12xfy






Exhibit 10.12(f)




ATMOS ENERGY CORPORATION

ANNUAL INCENTIVE PLAN FOR MANAGEMENT

(as amended and restated August 8, 2007)




ARTICLE 1




PURPOSE




     The Plan is intended to provide the Company a means by which it can engender and sustain a
sense of personal commitment on the part of its executives and senior managers in the continued
growth, development, and financial success of the Company and encourage them to remain with and
devote their best efforts to the business of the Company, thereby advancing the interests of the
Company and its shareholders. Accordingly, the Company may award to executives and senior managers
annual incentive compensation on the terms and conditions established herein.



ARTICLE 2




DEFINITIONS




     For the purposes of the Plan, unless the context requires otherwise, the following terms shall
have the meanings indicated:



     2.1 “Award” means the compensation payable under this Plan to a Participant by the Committee
pursuant to such terms, conditions, restrictions, and limitations established by the Committee and
Plan.



     2.2 “Board” means the Board of Directors of the Company.



     2.3 “Bonus Stock” or “Bonus Shares” means shares of Common Stock of the Company awarded to a
Participant as permitted and pursuant to the terms of the LongTerm Incentive Plan.



     2.4 (a) “Change in Control” of the Company occurs upon a change in the Company’s ownership,
its effective control or the ownership of a substantial portion of its assets, as follows:




          (i) Change in Ownership. A change in ownership of the
Company occurs on the date that any “Person” (as defined in Section
2.4(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 stock pursuant to an offering of
such stock, or (4) a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as
their ownership of the Company’s stock, acquires ownership of the
Company’s stock that, together with stock held by such Person,
constitutes more than 50% of the total fair market value or total
voting power of the Company’s stock. However, if any Person is
considered to own



 









 







already more than 50% of the total fair market value or total
voting power of the Company’s stock, the acquisition of additional
stock by the same Person is not considered to be a Change of Control.
In addition, if any Person has effective control of the Company through
ownership of 30% or more of the total voting power of the Company’s
stock, as discussed in paragraph (ii) below, the acquisition of
additional control of the Company by the same Person is not considered
to cause a Change in Control pursuant to this paragraph (i); or




          (ii) Change in Effective Control. Even though the Company
may not have undergone a change in ownership under paragraph (i) above,
a change in the effective control of the Company occurs on either of
the following dates:




          (A) the date that any Person acquires (or has acquired
during the 12-month period ending on the date of the most recent
acquisition by such Person) ownership of the Company’s stock
possessing 30 percent or more of the total voting power of the
Company’s stock. However, if any Person owns 30% or more of the
total voting power of the Company’s stock, the acquisition of
additional control of the Company by the same Person is not
considered to cause a Change in Control pursuant to this
subparagraph (ii)(A); or




          (B) the date during any 12-month period when a majority of members
of the Board is replaced by directors whose appointment or election is
not endorsed by a majority of the Board before the date of the
appointment or election; provided, however, that any such director
shall not be considered to be endorsed by the Board if his or her
initial assumption of office occurs as a result of an actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or




          (iii) Change in Ownership of Substantial Portion of
Assets. A change in the ownership of a substantial portion of the
Company’s assets occurs on the date that a Person acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition by such Person) assets of the Company, that have a
total gross fair market value equal to at least 40% of the total gross
fair market value of all of the Company’s assets immediately before
such acquisition or acquisitions. However, there is no Change in
Control when there is such a transfer to an entity that is controlled
by the shareholders of the Company immediately after the transfer,
through a transfer to (A) a shareholder of the Company (immediately
before the asset transfer) in exchange for or with respect to the
Company’s stock; (B) an entity, at least 50% of the total value or
voting power of the stock of which is owned, directly or indirectly, by
the Company; (C) a Person that owns directly or indirectly, at least
50% of the total value or voting power of the Company’s outstanding
stock; or (D) an entity, at least 50% of the total value or voting
power of the stock of which is



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owned by a Person that owns, directly or indirectly, at least 50%
of the total value or voting power of the Company’s outstanding stock.




     (b) For purposes of subparagraph (a) above:




          (i) “Person” shall have the meaning given in Section 7701(a)(1) of
the Code. Person shall include more than one Person acting as a group
as defined by the Final Treasury Regulations issued under Section 409A
of the Code.




          (ii) “Affiliate” shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Securities Exchange Act of 1934, as
amended.




     (c) The provisions of this Section 2.4 shall be interpreted in accordance
with the requirements of the Final Treasury Regulations under Code Section 409A,
it being the intent of the parties that this Section 2.4 shall be in compliance
with the requirements of said Code Section and said Regulations.



     2.5 “Code” means the Internal Revenue Code of 1986, as amended, together with the published
rulings, regulations, and interpretations duly promulgated thereunder.



     2.6 “Committee” means the committee appointed or designated by the Board to administer the
Plan in accordance with Article 3 of this Plan.



     2.7 “Common Stock” or “Common Shares” means the Common Stock of the Company, with no par value
(stated value of $.005 per share), or such other security or right or instrument into which such
common stock may be changed or converted in the future.



     2.8 “Company” means Atmos Energy Corporation, a Texas and Virginia corporation, and any
successor entity.



     2.9 “Covered Participant” means a Participant who is a “covered employee” as defined in
Section 162(m)(3) of the Code, and the regulations promulgated thereunder, or who the Committee
believes will be such a covered employee for a Performance Period, and who the Committee believes
may have remuneration in excess of $1,000,000 for the Performance Period, as provided in Section
162(m) of the Code.



     2.10 “Date of Conversion” means the date on which the Committee determines and approves
Awards; this is also the effective Date of Conversion for Restricted Stock or Restricted Shares.



     2.11 “Employee” means common law employee (as defined in accordance with the Regulations and
Revenue Rulings then applicable under Section 3401(c) of the Code) of the Company and any
Subsidiary of the Company.



     2.12 “Fair Market Value” of a share of Common Stock is the mean of the highest and lowest
prices per share on the New York Stock Exchange Consolidated Tape, or such reporting service as the
Board may select, on the appropriate date, or in the absence of reported sales on such day, the
most recent previous day for which sales were reported.



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     2.13 “Long-Term Incentive Plan” is the Atmos Energy Corporation 1998 Long-Term Incentive Plan,
as amended from time to time.



     2.14 “Participant” means an Employee who is selected by the Committee to participate in the
Plan.



     2.15 “Performance Criteria” or “Performance Goals” or “Performance Measures” mean the
objectives established by the Committee for the Performance Period pursuant to Article V hereof,
for the purpose of determining Awards under the Plan.



     2.16 “Performance Period” means the consecutive 12 month period that constitutes the
Company’s fiscal year.



     2.17 “Plan” means the Atmos Energy Corporation Annual Incentive Plan for Management, dated
effective October 1, 1998, as amended from time to time.



     2.18 “Restricted Stock” or “Restricted Shares” means shares of Common Stock of the Company
contingently granted to a Participant as permitted and pursuant to the terms and provisions of the
Long-Term Incentive Plan.



     2.19 “Section 162(m)” means Section 162(m) of the Code and the regulations promulgated
thereunder.



     2.20 “Subsidiary” means (i) any corporation in an unbroken chain of corporations beginning
with the Company, if each of the corporations other than the last corporation in the unbroken chain
owns stock possessing a majority of the total combined voting power of all classes of stock in one
of the other corporations in the chain, (ii) any limited partnership, if the Company or any
corporation described in item (i) above owns a majority of the general partnership interest and a
majority of the limited partnership interests entitled to vote on the removal and replacement of
the general partner, and (iii) any partnership or limited liability company, if the partners or
members thereof are composed only of the Company, any corporation listed in item (i) above or any
limited partnership listed in item (ii) above. “Subsidiaries” means more than one of any such
corporations, limited partnerships, partnerships or limited liability companies.



     2.21 “Termination of Service” occurs when a Participant who is an Employee or Non-employee
Director has a “separation from service” as defined in Section 1.409A-1(h) of the Final Treasury
Regulations under Code Section 409A, or any successor provision thereto, for any reason.



ARTICLE 3




ADMINISTRATION




     The Plan shall be administered by the Human Resources Committee of the Board unless otherwise
determined by the Board. If said Human Resources Committee does not so serve, the Committee shall
consist of not fewer than two persons; any member of the Committee may be removed at any time, with
or without cause, by resolution of the Board; and any vacancy occurring in the membership of the
Committee may be filled by appointment by the Board.



     All actions to be taken by the Committee under this Plan, insofar as such actions affect
compliance with Section 162(m) of the Code, shall be limited to those members of the Board who



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are Non-employee Directors and who are “outside directors” under Section 162(m). The
Committee shall select one of its members to act as its Chairman. A majority of the Committee
shall constitute a quorum, and the act of a majority of the members of the Committee present at a
meeting at which a quorum is present shall be the act of the Committee.



     The Committee shall determine and designate from time to time the eligible persons to whom
Awards will be made. The Committee, in its discretion, shall (i) interpret the Plan, (ii)
prescribe, amend, and rescind any rules and regulations necessary or appropriate for the
administration of the Plan, and (iii) make such other determinations and take such other action as
it deems necessary or advisable in the administration of the Plan. Any interpretation,
determination, or other action made or taken by the Committee shall be final, binding, and
conclusive on all interested parties.



     With respect to restrictions in the Plan that are based on the requirements of Section 162(m)
of the Code or any other applicable law, rule or restriction (collectively, “applicable law”), to
the extent that any such restrictions are no longer required by applicable law, the Committee shall
have the sole discretion and authority to make Awards hereunder that are no longer subject to such
restrictions.



ARTICLE 4




ELIGIBILITY




     Any Employee (including an Employee who is also a director or an officer) is eligible to
participate in the Plan. The Committee, upon its own action, may make, but shall not be required
to make, an Award to any Employee. Awards may be made by the Committee at any time and from time
to time to new Participants, or to then Participants, or to a greater or lesser number of
Participants, and may include or exclude previous Participants, as the Committee shall determine.
The Committee’s determinations under the Plan (including without limitation determinations of which
Employees, if any, are to receive Awards, the form, amount and timing of such Awards, the terms and
provisions of such Awards, and the agreements evidencing same) may be made by the Committee
selectively among Employees who receive, or are eligible to receive, Awards under the Plan.
Generally, an Employee must be a Participant in the Plan for a minimum of six months during the
Performance Period to be eligible for a full Award for that Performance Period. However, an
Employee with less than six months of participation in the Plan during a Performance Period may
receive a pro rata Award at the discretion of the Committee.



ARTICLE 5




PERFORMANCE GOALS AND MEASUREMENT




     5.1 Performance Goals Establishment. Performance Goals shall be established by the
Committee not later than 90 days after commencement of the Performance Period. The Performance
Goals may be identical for all Participants or, at the discretion of the Committee, may be
different to reflect more appropriate measures of individual performance.



     5.2 Awards. Awards shall be made annually in accordance with actual performance
compared to the Performance Goals previously established by the Committee for the Performance
Period.



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     5.3 Performance Goals. Performance Goals relating to Covered Participants for a
Performance Period shall be established by the Committee in writing. Performance Goals may include
alternative and multiple Performance Goals and may be based on one or more business and/or
financial criteria. In establishing the Performance Goals for the Plan Year, the Committee in its
discretion may include one or any combination of the following criteria in either absolute or
relative terms, for either the Company or any of its Subsidiary organizations:




	 	(a)	 	Total shareholder return

	 
	 	(b)	 	Return on assets, equity, capital, or investment
	 
	 	(c)	 	Pre-tax or after-tax profit levels, including: earnings per
share; earnings before interest and taxes; earnings before interest, taxes,
depreciation and amortization; net operating profits after tax, and net income
	 
	 	(d)	 	Cash flow and cash flow return on investment
	 
	 	(e)	 	Economic value added and economic profit
	 
	 	(f)	 	Growth in earnings per share
	 
	 	(g)	 	Levels of operating expense or other expense items as
reported on the income statement, including operating and maintenance expense
	 
	 	(h)	 	Measures of customer satisfaction and customer service as
surveyed from time to time, including the relative improvement therein.





     5.4 Adjustments for Extraordinary Items. The Committee shall be authorized to make
adjustments in the method of calculating attainment of Performance Goals in recognition of: (i)
extraordinary or non-recurring items, (ii) changes in tax laws, (iii) changes in generally accepted
accounting principles or changes in accounting policies, (iv) charges related to restructured or
discontinued operations, (v) restatement of prior period financial results, and (vi) any other
unusual, non-recurring gain or loss that is separately identified and quantified in the Company’s
financial statements. Notwithstanding the foregoing, the Committee may, at its sole discretion,
reduce the performance results upon which Awards are based under the Plan, to offset any unintended
result(s) arising from events not anticipated when the Performance Goals were established, provided
that such adjustment is permitted by Section 162(m).



     5.5 Determination of Awards. The Award and payment of any Award under this Plan to a
Covered Participant with respect to the Performance Period shall be contingent upon the attainment
of the Performance Goals that are applicable to such Covered Participant. The Committee shall
certify in writing prior to payment of any such Award that such applicable Performance Goals
relating to the Award are satisfied. Approved minutes of the Committee may be used for this
purpose. The Performance Goals shall not allow for any discretion by the Committee as to an
increase in any Award, but discretion to lower an Award is permissible.



ARTICLE 6




AWARDS




     6.1 Timing of Awards. At the first meeting of the Committee after the completion of
the Performance Period, the Committee shall review the prior year’s performance in relation to the
Performance Goals. The first meeting of the Committee shall occur within 60 days following the
completion of the Performance Period.



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     6.2 Form of Awards. Awards are paid in cash. In addition, if and as the Committee so
permits and depending upon the Participant’s voluntary election prior to the commencement of the
Performance Period, the Participant may elect to convert any Award paid to him in cash in 25
percent increments, in whole or part, into the following forms:




     (a) Bonus Stock. The Participant may elect to convert all or a portion of the
Award to Bonus Shares, with the value of the Bonus Shares (based on the Fair Market Value
of such Bonus Shares as of the Date of Conversion) being equal to 110% of the amount of the
Award. Such Bonus Shares shall be unrestricted and shall be granted pursuant to the
Long-Term Incentive Plan.




     (b) Restricted Stock Awards. The Participant may elect to convert all or a
portion of the Award to Company Restricted Shares, with the value of the Restricted Shares
(based on the Fair Market Value of such Restricted Shares as of the Date of Conversion)
being equal to 150% of the amount of the Award. Such Restricted Stock will have a
restriction period of not less than 3 years from the Date of Conversion. These Restricted
Shares will be granted pursuant to the Long-Term Incentive Plan.



     6.3 Maximum Awards. The maximum cash Award that may be made to a Covered Participant
under the Plan for any Performance Period shall be $1.0 million.



ARTICLE 7




WITHHOLDING TAXES




     The Company shall have the right to deduct from any payment to be made pursuant to the Plan
the amount of any taxes required by law to be withheld with respect to such payments.



ARTICLE 8




NO RIGHT TO CONTINUED EMPLOYMENT OR AWARDS




     No Employee shall have any claim or right to be made an Award, and the making of an Award
shall not be construed as giving a Participant the right to be retained in the employ of the
Company or any of its Subsidiaries. Further, the Company and its Subsidiaries expressly reserve
the right at any time to terminate the employment of any Participant free from any liability under
the Plan; except that a Participant, who meets or exceeds the Performance Goals for the Performance
Period and was actively employed for the full term of the Performance Period, will be eligible for
an Award even though the Participant is not an active employee of the Company at the time the
Committee makes Awards under the Plan.



ARTICLE 9




CHANGE IN CONTROL




     Immediately upon a Change in Control, notwithstanding any other provision of this Plan, all
Awards for the Performance Period in which the Change in Control occurs shall be deemed earned at
the maximum Performance Goal level, and the Company shall make a payment in cash to each
Participant within ten (10) days after the effective date of the Change in Control in the



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amount of such maximum Award. The making of Awards under the Plan shall in no way affect the
right of the Company to adjust, reclassify, reorganize, or otherwise change its capital or business
structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any portion of
its businesses or assets.




ARTICLE 10




AMENDMENT, MODIFICATION, SUSPENSION, OR TERMINATION




     Subject to the limitations set forth in this Article 10, the Board may at any time and from
time to time, without the consent of the Participants, alter, amend, revise, suspend, or
discontinue the Plan in whole or in part; provided, however, that no amendment which requires
stockholder approval in order for the Plan and Awards under the Plan to continue to comply with
Section 162(m) of the Code, including any successors to such Section, shall be effective unless
such amendment shall be approved by the requisite vote of the stockholders of the Company entitled
to vote thereon.



ARTICLE 11




GOVERNING LAW




     The validity, construction and effect of the Plan and any actions taken or relating to the
Plan shall be determined in accordance with the laws of the State of Texas and applicable Federal
law.



ARTICLE 12




SUCCESSORS AND ASSIGNS




     The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company, expressly to assume and agree to perform the Company’s obligation under this Plan in the
same manner and to the same extent that the Company would be required to perform them if no such
succession had taken place. As used herein, the “Company” shall mean the Company as hereinbefore
defined and any aforesaid successor to its business and/or assets.



ARTICLE 13




EFFECTIVE DATE AND TERM




     The Plan became effective as of October 1, 1998 and will terminate as of September 30, 2011.
After termination of the Plan, no future Awards may be made.



ARTICLE 14




INTERPRETATION




     The Plan is designed to comply with Section 162(m) of the Code, and all provisions hereof
shall be construed in a manner consistent with that intent.



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ARTICLE 15




INDEMNIFICATION




     No member of the Board or the Committee, nor any officer or Employee of the Company acting on
behalf of the Board or the Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all members of the Board
or the Committee and each and any officer or Employee of the Company acting on their behalf shall,
to the extent permitted by law, be fully indemnified and protected by the Company in respect of any
such action, determination, or interpretation.



* * * * *




     IN WITNESS WHEREOF, the Company has caused this instrument to be executed as of September 10,
2008 by its President pursuant to prior action taken by the Board.



	 	 	 	 	 
	 	ATMOS ENERGY CORPORATION

 	 
	 	By:  	/s/ ROBERT W. BEST
 	 
	 	 	Robert  W. Best 	 
	 	 	Chairman of the Board, President

and Chief Executive Officer 	 
	 



	 	 	 	 	 
	Attest:

 	 	 
	/s/ DWALA KUHN
 	 	 
	Dwala Kuhn 	 	 
	Corporate Secretary 	 	 
	 




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