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                                                                    Exhibit 10.3


                                 TRUST AGREEMENT

     This Agreement made as of this ______ day of _________________, ______, by
and between ATMOS ENERGY CORPORATION (hereinafter called "Company"), whose
address is 5430 LBJ Freeway, Dallas, Texas and BANKERS TRUST COMPANY
(hereinafter called "Trustee"), a New York banking corporation.

                              W I T N E S S E T H :

         WHEREAS, in addition to the benefits available under the Atmos Energy
Corporation Pension Account Plan, as the same has been or may hereafter be
amended or restated, or any successor thereto (hereinafter called "Qualified
Plan"), to ___________________________, an employee of Company (hereinafter
called "Employee"), Employee and Employee's beneficiaries (hereinafter
individually and collectively called "Trust Beneficiary") are entitled to
monthly supplemental retirement income and disability benefits and/or death
benefits (hereinafter called "Supplemental Benefits") arising under the Atmos
Energy Corporation Supplemental Executive Benefits Plan, as the same has been or
may hereafter be amended or restated, or any successor thereto (hereinafter
called "Nonqualified Plan" or "Appendix A"); and

         WHEREAS, the amount and timing of Supplemental Benefits to which Trust
Beneficiary is entitled is specified in the Nonqualified Plan, attached hereto
as Appendix A, and by this reference is made a part hereof, as the same may be
amended from time to time by agreement between Company and Employee; and

         WHEREAS, Company wishes to establish a trust (hereinafter called
"Trust") to which Company may transfer assets to be held therein, subject to the
claims of Company's creditors in the event of Company's insolvency, and subject
to payment to Company under certain circumstances, as hereinafter specified,
until paid to Trust Beneficiary as Supplemental Benefits in such manner and at
such times as specified in Appendix A; and

         WHEREAS, it is the intention of Company, at its discretion, to make
contributions to the Trust as the projected or actual benefit of the Trust
Beneficiary increases or otherwise;


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     NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:

     Section 1. Trust Fund.

     (a) Subject to the claims of its creditors as set forth in Section 3,
Company hereby deposits with Trustee in trust One Dollar ($1.00) which shall
become the principal of the Trust to be held, administered and disposed of by
Trustee as provided in this Trust Agreement.

     (b) The Trust hereby established shall be irrevocable.

     (c) The Trust is intended to be a grantor trust, within the meaning of
Section 671 of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.

     (d) The principal of the Trust, and any earnings thereon, which are not
paid to Company as provided in Sections 4 and 6, shall be held separate and
apart from other funds of Company and shall be used exclusively for the uses and
purposes herein set forth. Neither the Trust Beneficiary, nor the Nonqualified
Plan, shall have any preferred claim on, or any beneficial ownership interest
in, any assets of the Trust prior to the time such assets are paid to Trust
Beneficiary as Supplemental Benefits as provided in Section 2, and all rights
created under the Nonqualified Plan and this Trust Agreement shall be mere
unsecured contractual rights of Trust Beneficiary against Company.

     (e) Company shall make deposits as provided for in Appendix A and may at
any time or from time to time make additional deposits of cash or other property
in trust with Trustee to augment the principal to be held, administered and
disposed of by Trustee as provided in this Trust Agreement. Upon and after a
"Change in Control" (as hereinafter defined), Trustee shall be responsible for
assuring that deposits are made in accordance with Appendix A, and it may rely
on written certifications of the actuary employed with respect to Appendix A as
to the funded status of the Trust and the Company's contribution obligations
under Appendix A. Prior to a Change in Control, the Trustee shall have no
responsibility therefor.

     Section 2. Payments to Trust Beneficiary.

     (a) Trustee shall make payments of Supplemental Benefits to Trust
Beneficiary from the assets of the Trust, if and to the extent such assets are
available for distribution, in accordance with Appendix A, at all times Company
is not Insolvent. Trustee shall not be required to make payments unless notified
by the Company or the Trust Beneficiary that benefits are then due and owing to
the Trust Beneficiary and it has received a written certification of the time
for payment of Benefits and the amount of Benefits due and owing to the Trust
Beneficiary at such time, all in accordance with Appendix A, prepared by the
actuary employed by the Company to calculate the Supplemental Benefits. The
actuary shall also provide written certification to the Trustee of any changes
in the amount of Benefits payable to a Beneficiary from time to time. Following
a Change in Control, if no actuary is employed by the Company, the Trustee shall
employ an actuary. The Trustee shall be fully protected in relying on the
written certification of the actuary for all purposes of this Agreement.

     (b) If the principal of the Trust, and any earnings thereon, which are not
paid to Company as provided in Sections 4 and 6, are not sufficient to make
payments of Supplemental Benefits to Trust



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Beneficiary in accordance with Appendix A, Company shall make the balance of
each such payment as it falls due.

     (c) It is expressly acknowledged that Employee (or if Employee is dead, his
beneficiaries under Nonqualified Plan) is a third-party beneficiary under this
Trust Agreement and, as such, shall have the right to enforce the terms of this
Agreement as if he were a party thereto.

     Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary
When Company Insolvent.

     (a) Company shall be considered "Insolvent" for purposes of this Trust
Agreement if (i) Company is unable to pay its debts as they mature, or (ii)
Company is subject to a pending proceeding as a debtor under the Bankruptcy
Code.

     (b) At all times during the continuance of this Trust, the principal and
income of the Trust shall be subject to claims of general creditors of Company
as hereinafter set forth, and at any time Trustee has actual knowledge that
Company is Insolvent, Trustee shall deliver any undistributed principal and
income in the Trust to satisfy such claims as a court of competent jurisdiction
may direct. The board of directors and Chief Executive Officer of Company shall
have the duty to inform Trustee of Company's Insolvency. If Company or a person
claiming to be a creditor of Company alleges in writing to Trustee that Company
has become Insolvent, then, within thirty (30) days after receipt of such
notice, such firm of independent auditors as Company, upon notification by
Trustee, may select (or, after a "Change in Control" as defined in Section 4
hereof, such national firm of independent auditors as Trustee may select) shall
determine whether Company is Insolvent and shall advise Trustee accordingly.
Pending such determination, Trustee shall discontinue payments of Supplemental
Benefits to Trust Beneficiary, shall hold the Trust assets for the benefit of
Company's general creditors, and shall resume payments of Supplemental Benefits
to Trust Beneficiary in accordance with Section 2 of this Trust Agreement only
after it has been determined that Company is not Insolvent (or is no longer
Insolvent, if Company was initially determined to be Insolvent). Unless Trustee
has actual knowledge of Company's Insolvency, Trustee shall have no duty to
inquire whether Company is Insolvent. Knowledge of Company's insolvency by any
affiliate of Trustee shall not be imputed to Trustee. Trustee may in all events
rely on such evidence concerning Company's solvency as may be furnished to
Trustee which will give Trustee a reasonable basis for making a determination
concerning Company's solvency. Nothing in this Trust Agreement shall in any way
diminish any rights of Trust Beneficiary or Trustee to pursue his or its rights
as a general creditor of Company with respect to Supplemental Benefits or
otherwise.

     (c) If Trustee discontinues payments of Supplemental Benefits from the
Trust pursuant to Section 3(b) and subsequently resumes such payments, the first
payment following such discontinuance shall include the aggregate amount of all
payments which would have been made to Trust Beneficiary (together with interest
on the amount delayed at one percentage point above the prime rate of Trustee as
then in effect) in accordance with Appendix A during the period of such
discontinuance, less the aggregate amount of payments made to Trust Beneficiary
by Company in lieu of the payments provided for hereunder during any such period
of discontinuance.


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     Section 4. Payments to Company.

     Company shall have no right or power to direct Trustee to return to Company
or to divert to others any of the Trust assets before all payments of
Supplemental Benefits have been made to Trust Beneficiary pursuant to Appendix
A, except as otherwise provided in Section 1(b) and this Section.
Notwithstanding any provision of this Trust Agreement to the contrary and prior
to a "Change in Control," (as hereinafter defined), if it is determined by
Trustee that certain Trust assets will never be required to pay Supplemental
Benefits to Trust Beneficiary (because, for example, of any difference between
actual requirements and expected actuarial requirements), such excess assets
shall be returned to Company, but (i) only to the extent that such return does
not cause the value of the total Trust assets to be less than one hundred thirty
percent (130%) of the present value of projected Supplemental Benefits, and (ii)
only if the assets of each other trust of which Trustee serves as trustee and
established pursuant to Appendix A are at least one hundred thirty percent
(130%) of the present value of projected supplemental benefits payable under
such Plan to the beneficiary(ies) of such trust, in each case, with such present
value to be determined on the basis of actuarial assumptions applied by mutual
agreement of Company and Trustee. Upon and after a "Change in Control" (as
hereinafter defined), such assets may be returned to Company only after all
Supplemental Benefits have been fully distributed to or on behalf of Trust
Beneficiary and all other supplemental benefits under Appendix A have been fully
distributed to or on behalf of all other trust beneficiaries under all other
trusts for which Trustee serves as trustee and established pursuant to Appendix
A. Trustee may transfer all or any portion of such excess assets to one or more
other trusts established pursuant to Nonqualified Plan to the extent deemed
necessary by Trustee to enable such other trusts to pay supplemental benefits
under such Plan to the beneficiaries of such trusts, but only to the extent that
such transfer does not cause the value of the total Trust assets to be less than
one hundred thirty (130%) percent of the present value of projected Supplemental
Benefits, with such present value to be determined (i) prior to a "Change in
Control" (as hereinafter defined), on the basis of actuarial assumptions applied
by mutual agreement of Company and Trustee and (ii) upon and after a "Change in
Control" (as hereinafter defined), on the basis of actuarial assumptions applied
by mutual agreement of Company and Employee (or, if Employee is dead, his
beneficiaries under Nonqualified Plan); provided, however, that upon and after
such Change in Control, no such transfer may be made without the consent of
Employee (or, if Employee is dead, his beneficiaries under Nonqualified Plan) to
any such other trust which was not in existence prior to the date of such Change
in Control; provided, further, that if such excess assets are attributable to a
termination of the Trust pursuant to Section 11(b) occasioned by Employee's
resignation or termination of employment for Cause (within the meaning of
Appendix A), then Trustee shall transfer the full amount of such excess assets,
on a pro rata basis, to all of such other trusts established pursuant to
Appendix A and for which Trustee serves as trustee (or, in the case of a
transfer occurring on or after a Change in Control, to all of such other trusts
established pursuant to Appendix A for which Trustee serves as trustee which
were in existence prior to the date of such Change in Control), irrespective of
the funding status of such other trusts. For purposes of this Trust, a "Change
in Control" of Company shall occur if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) other than a trustee or other fiduciary holding securities
under an employee benefit plan of Company, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Company representing 33-1/3% or more of the combined voting power
of Company's then outstanding securities; or (ii) during any period of two
consecutive years individuals who at the beginning of such period constitute the
board of directors of Company and any new director (other than a director
designated by a person who has entered into an agreement with Company to effect
a transaction described in clauses (i) or (iii) of this sentence) whose election
by such board of directors or nomination for election by Company's shareholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or (iii) the shareholders of Company
approve a merger or consolidation of Company with any other corporation, other
than a merger or consolidation which would result in the voting securities of
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted



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into voting securities of the surviving entity) at least 60% of the combined
voting power of the voting securities of Company or such surviving entity
outstanding immediately after such merger or consolidation, or the shareholders
of Company approve a plan of complete liquidation of Company or an agreement for
the sale or disposition by Company of all or substantially all of Company's
assets. Any payment of excess assets to Company made pursuant to this Section 4
shall be made only upon written instructions from Company. In carrying out its
duties under this Section 4, Trustee may rely on written certifications of the
actuary employed with respect to Appendix A as to the funded status of the Trust
and each other trust for which Trustee serves as trustee and established
pursuant to Appendix A, and may rely on the written notice of the Company or the
Trust Beneficiary that a Change in Control has occurred. Trustee shall not be
required to verify the accuracy of any determination made by the actuary under
this Agreement.

     Section 5. Investment of Trust Assets.

     Trustee shall invest the assets comprising the Trust, as Company
prescribes, in accordance with the investment directives set forth in Appendix
B, attached hereto; provided that no investment shall be made in securities or
obligations issued by Company or by any subsidiary or affiliate thereof. Company
may from time to time revise, add to, or eliminate any one or more of the
investment directives set forth in Appendix B; provided that, upon and after a
Change in Control, any such action shall require the consent of Employee (or if
Employee is dead, his beneficiaries under Nonqualified Plan). In addition, the
board of directors of Company may from time to time direct, by written notice to
Trustee, the segregation of any portion or portions of the Trust corpus in a
separate investment account or investment accounts and, in such event, may
appoint an investment manager to direct the investment and reinvestment of any
such account; provided that, upon and after a Change in Control, such direction
and appointment shall require the consent of Employee (or, as aforesaid, his
beneficiaries under Nonqualified Plan). The appointment of, and any directions
by, such investment manager shall be governed by the following:

     (a) Any such investment manager shall (i) be registered as an investment
adviser under the Investment Advisers Act of 1940; (ii) be a bank, as defined in
that Act; or (iii) be an insurance company qualified to perform investment
management services under the laws of more than one state.

     (b) Trustee shall follow the directions of the investment manager regarding
the investment and reinvestment of the Trust corpus, or such portion thereof as
shall be under management by the investment manager. Trustee shall be under no
duty or obligation to review any investment to be acquired, held or disposed of
pursuant to such directions nor to make any recommendations with respect to the
disposition or continued retention of any such investment. Trustee shall have no
liability or responsibility for acting or not acting pursuant to the direction
of, or failing to act in the absence of any direction from, the investment
manager.

     (c) The investment manager at any time and from time to time may issue
orders for the purchase or sale of securities directly to a broker; and in order
to facilitate such transaction, Trustee upon request shall execute and deliver
appropriate trading authorizations. Written notification of the issuance of each
such order shall be given promptly to Trustee by the investment manager, and the
execution of each such order shall be confirmed by written advice to Trustee by
the broker. Such notification shall be authority for Trustee to pay for
securities purchased against receipt thereof and to deliver securities sold
against payment therefor, as the case may be. Anything in the preceding sentence
to the contrary notwithstanding, payment for securities against receipt and
delivery of securities against payment shall not be required if such is not the
prevailing practice in the principal market in which such securities are traded.




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     (d) The board of directors of Company may remove any investment manager
appointed hereunder; provided that, upon and after a Change in Control, such
removal shall require the consent of Employee (or, if Employee is dead, his
beneficiaries under Nonqualified Plan). In the event that an investment manager
should resign or be removed by the board of directors of Company, Trustee shall,
following receipt from Company of written notice of such resignation or removal,
which notice Company shall deliver to Trustee at the time of such resignation or
removal, subject to the investment directives set forth in Appendix B hereof,
manage the investment and reinvestment of the Trust corpus unless and until
Trustee shall be notified of the appointment of another investment manager with
respect thereto as provided in this Section 5.

     Section 6. Income Tax Obligations.

     It is hereby expressly understood that Company shall be liable for any and
all taxes imposed on Trust income or assets. All such taxes are to be paid by
Company from sources other than the assets or income of this Trust, and, except
to the extent otherwise authorized by Section 4 hereof, Trustee shall, under no
circumstances, transfer any portion of such income or assets to Company for the
payment of same.

     Section 7. Accounting by Trustee.

     Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be done,
including such specific records as shall be agreed upon in writing between
Company and Trustee. All such accounts, books and records shall be open to
inspection and audit at all reasonable times by Company and by Trust
Beneficiary. Within sixty (60) days following the close of any accounting period
designated by Company and within sixty (60) days after the removal or
resignation of Trustee, Trustee shall deliver to Company and Trust Beneficiary a
written account of its administration of the Trust during such period or during
the period from the close of the last preceding period to the date of such
removal or resignation, setting forth all investments, receipts, disbursements
and other transactions effected by it, including a description of all securities
and investments purchased and sold with the cost or net proceeds of such
purchases or sales (accrued interest paid or receivable being shown separately),
and showing all cash, securities and other property held in the Trust at the end
of such period or as of the date of such removal or resignation, as the case may
be.

     Section 8. Responsibility of Trustee.

     (a) Trustee's duties and responsibilities shall be limited to those
specifically set forth in this Agreement, and no amendments to this Agreement or
Appendix A shall affect the Trustee's duties or responsibilities hereunder
without its prior written consent. Trustee shall act with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims; provided,
however, that Trustee shall incur no liability to anyone for any action taken
pursuant to a direction, request, or approval given by Company or Trust
Beneficiary contemplated by and complying with the terms of this Trust
Agreement, and to the extent permitted by law shall be relieved of the Prudent
Man Rule for investments.

     (b) Trustee shall not be required to undertake or to defend any litigation
arising in connection with this Trust Agreement, unless it be first indemnified
by Company against its prospective costs, expenses and liability, and Company
hereby agrees to indemnify Trustee for such costs, expenses, and liability.




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     (c) Trustee may consult with legal counsel (who may also be counsel for
Trustee generally) with respect to any of its duties or obligations hereunder,
and shall be fully protected in acting or refraining from acting in accordance
with the advice of such counsel.

     (d) Trustee may hire agents, accountants, actuaries and financial
consultants.

     (e) Trustee shall have, without exclusion, all powers conferred on trustees
by applicable law unless expressly provided otherwise herein; provided, however,
that if an insurance policy is held as an asset of the Trust, Trustee shall have
no power, except in accordance with Section 1(b) or Section 4 hereof, to name a
beneficiary of the policy other than the Trust, to assign the policy (as
distinct from conversion of the policy to a different form) other than to a
successor Trustee, or to loan to any person the proceeds of any borrowing
against such policy.

     (f) If Trustee undertakes or defends any claim or litigation arising in
connection with this Trust, the Company agrees to indemnify Trustee against
Trustee's costs, expenses and liabilities (including, without limitation,
reasonable attorneys' fees and expenses) relating thereto and to be primarily
liable for such payments. If the Company does not pay such costs, expenses and
liabilities in a reasonably timely manner, Trustee may obtain payment from the
Atmos Energy Corporation Legal Defense Fund Trust of which Trustee is the
trustee.

     Section 9. Compensation and Expenses of Trustee.

     Trustee shall be entitled to receive such reasonable compensation for its
services as shall be agreed upon by Company and Trustee. Trustee shall also be
entitled to receive its reasonable expenses incurred with respect to the
administration of the Trust, including fees incurred by Trustee pursuant to
Section 8(c) and 8(d) of this Trust Agreement. Such compensation and expenses
shall be payable by Company.

     Section 10. Replacement of Trustee.

     Trustee may be removed at any time by Company or may resign, in which case
a new corporate trustee, which shall be independent and not subject to control
of either Company or Trust Beneficiary, shall be appointed by Company; provided
that, upon and after a Change in Control, any such removal or appointment shall
require the consent of Employee (or if Employee is dead, his beneficiaries under
Nonqualified Plan). In the event of a resignation by the Trustee, the Trustee
may petition a court of competent jurisdiction for the appointment of a
successor Trustee if the Company shall fail to appoint a successor within a
reasonable period of time, the costs to the Trustee (including reasonable legal
fees) of such petition to be an expense of administration of the Trust.

     Section 11. Amendment or Termination.

     (a) This Trust Agreement may be amended any time and to any extent by
written instrument executed by Trustee and Company and, both prior to and after
a Change in Control, consented to by Employee (or if Employee is dead, his
beneficiaries under Nonqualified Plan); provided, however, that prior to a
Change in Control, the consent of Employee is not required for amendments made
necessary by state or Federal statutory or regulatory requirements.

     (b) The Trustee shall not terminate until the date on which Trust
Beneficiary is entitled to no more Supplemental Benefits pursuant to Appendix A
(as increased in accordance with Section 4), unless sooner revoked in accordance
with Section 1(b).



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     (c) Except as otherwise provided in Section 4 hereof, upon termination of
the Trust as provided in Section 11(b), any assets remaining in the Trust shall
be returned to Company.

     Section 12. Severability and Alienation.

     (a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition without invalidating the
remaining provisions hereof.

     (b) To the extent permitted by law, benefits to Trust Beneficiary under
this Agreement may not be anticipated, assigned (either at law or in equity),
alienated or subject to attachment, garnishment, levy, execution or other legal
or equitable process and no benefit actually paid to Trust Beneficiary by
Trustee shall be subject to any claim for repayment by Company or Trustee.

     This Trust Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.

     IN WITNESS WHEREOF, Company and Trustee have executed this Agreement as of
the date first above written.


                                              ATMOS ENERGY CORPORATION


                                              By:
                                                 -------------------------------


                                              Title:
                                                    ----------------------------

                                                            COMPANY



                                              BANKERS TRUST COMPANY


                                              By:
                                                 -------------------------------


                                              Title:
                                                    ----------------------------

                                                            TRUSTEE



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