Exhibit 2
FIRST AMENDMENT TO RIGHTS AGREEMENT
This First Amendment to Rights Agreement (this "First Amendment") is
entered into by and between Atmos Energy Corporation, a Texas and Virginia
corporation (the "Company"), and BankBoston, N.A., a national association with
its principal place of business in Massachusetts (the "Rights Agent"), on this
11th day of August 1999, at the direction of the Company.
WHEREAS, the Company and the Rights Agent have entered into that
certain Rights Agreement, dated November 12, 1997 (the "Rights Agreement"); and
WHEREAS, on August 11, 1999, the Board of Directors of the Company
determined to amend the Rights Agreement and directed the Rights Agent to enter
into this First Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto do hereby agree as follows:
1. Amendments to Rights Agreement. The Rights Agreement is hereby
amended as follows:
(a) Section 1(k) of the Rights Agreement is hereby amended to
read in its entirety as follows:
"(k) [intentionally omitted]"
(b) The first sentence of Section 7(e) of the Rights Agreement
is hereby amended to read in its entirety as follows:
"Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person, an Adverse
Person or an Associate or Affiliate of an Acquiring Person or an
Adverse Person, (ii) a transferee of an Acquiring Person or an Adverse
Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person or Adverse Person becomes such,
or (iii) a transferee of an Acquiring Person or an Adverse Person (or
of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person or Adverse Person becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person or
Adverse Person to holders of equity interests in such Acquiring Person
or Adverse Person or to any Person with whom the Acquiring Person or
Adverse Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which
a majority of the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become
null and void without any further action and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise."
(c) The first sentence of Section 23(a) of the Rights Agreement
is hereby amended to read in its entirety as follows:
"(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the Close of Business
on the tenth Business Day following the Stock Acquisition Date, or
(ii) the Final Expiration Date, redeem all but not less than all of
the then outstanding Rights at a redemption price of $.01 per Right,
as such amount may be appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the
"Redemption Price")."
(d) Section 23(c) of the Rights Agreement shall be deleted in
its entirety.
(e) The first two sentences of Section 26 of the Rights
Agreement are hereby amended to read in their entirety as follows:
"Prior to the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock, including, without
limitation, to substitute whole or fractional shares of preferred
stock or Common Stock for which the Rights may be exercised. From and
after the Distribution Date, the Company and the Rights Agent shall,
if the Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i) to
cure any ambiguity, (ii) to correct or supplement any provision
contained herein
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which may be defective or inconsistent with any other provisions
herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder in any manner
which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates
(other than an Acquiring Person, an Adverse Person or an Affiliate or
Associate of any such Person); provided, from and after the
Distribution Date, this Agreement may not be supplemented or amended
to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable, or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of
Rights."
(f) Section 28 of the Rights Agreement is hereby amended to read
in its entirety as follows:
"Section 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation
of the number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence
of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to
the Company, or as may be necessary or advisable in the administration
of this Agreement, including, without limitation, the right and power
to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the
Rights, to declare that a Person is an Adverse Person or to amend the
Agreement and any determination as to whether actions of any Person
shall be such as to cause such Person to beneficially own shares held
by another Person). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the
Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other
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parties, and (y) not subject the Board to any liability to the holders
of the Rights."
(g) Section 30 of the Rights Agreement is hereby amended to read
in its entirety as follows:
"Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held
by such court or authority to be invalid, void or unenforceable and
the Board of Directors of the Company determines in its good faith
judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business on the tenth Business Day
following the date of such determination by the Board of Directors."
(h) Exhibit B to the Rights Agreement, the Summary of Rights to
Purchase Common Stock, is hereby amended as follows:
i. The eleventh paragraph of Exhibit B is hereby amended to
read in its entirety as follows:
"In general, at any time until ten Business Days following
the Stock Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (payable in
cash, Common Stock or other consideration deemed appropriate by
the Board of Directors). Immediately upon the action of the
Board of Directors ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will
be to receive the $.01 redemption price."
ii. The twelfth paragraph of Exhibit B shall be deleted in its
entirety.
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iii. The fourteenth paragraph (which will be the thirteenth
paragraph as a result of the foregoing amendment) of Exhibit
B is hereby amended to read in its entirety as follows:
"Prior to the Distribution Date, any of the provisions of
the Rights Agreement may be amended by the Board of Directors of
the Company, including, without limitation, to substitute whole
or fractional shares of preferred stock or Common Stock for which
the Rights may be exercised. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in
order to cure any ambiguity, to correct or supplement any
defective or inconsistent provision, to make changes which do not
adversely affect the interests of holders of Rights (excluding
the interests of any Acquiring Person, Adverse Person, or
Affiliate or Associate of any such Person), or to shorten or
lengthen any time period under the Rights Agreement; provided,
however, that no amendment may be made at such time as the Rights
are not redeemable."
2. Except as amended by this First Amendment, the Rights
Agreement shall continue in full force and effect as originally executed and
delivered.
3. Any reference in the Rights Agreement to the "Agreement"
shall refer to the Rights Agreement as amended by this First Amendment.
4. All capitalized terms used herein and not otherwise defined
shall have the meanings assigned to those terms in the Rights Agreement.
5. This First Amendment shall be governed and construed in
accordance with the laws of the State of Texas.
6. This First Amendment may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute by one and
the same instrument.
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IN WITNESS WHEREOF, the parties have executed this First Amendment as
of the date written above.
Attest: ATMOS ENERGY CORPORATION
By: /s/ XXXXXXX X. XXXXXX By: /s/ XXXXXX X. BEST
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Name: Xxxxxxx X. Xxxxxx Name: Xxxxxx X. Best
Title: Assistant Corporate Title: Chairman, President and
Secretary Chief Executive Officer
Attest: BANKBOSTON, N.A.
By: /s/ XXXXX X. XXXXX By: /s/ XXXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxx Name: Xxxxxx X. XxXxxx
Title: Account Manager Title: Senior Account Manager
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