Atmos Energy 1997 Annual Report Download - page 40

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ATMOS ENERGY CORPORATION
EIGHT Statement of cash flows supplemental disclosures
Supplemental disclosures of cash flow information for 1997, 1996 and 1995 are present-
ed below:
(In thousands) 1997 1996 1995
__________________________________ __________________________________ ____________________________________
Cash paid for
Interest ...................................................................................... $25,216 $32,778 $27,667
Income taxes ............................................................................. $ 9,736 14,562 18,746
NINE Common stock and stock options
The Company issued 100,000 shares of its common stock in fiscal 1997 in connection
with its Restricted Stock Grant Plan.
Atmos has an Employee Stock Ownership Plan (“ESOP”) and the United Cities Division
has a 401(k) savings plan, as discussed in Note 10. Atmos issued 200,482 shares under
its ESOP in 1997. The Company has registered 1,600,000 shares for issuance under the
ESOP, of which 512,871 shares were available for future issuance on September 30, 1997.
The Company also has a Direct Stock Purchase Plan (“DSPP”). Participants in the DSPP
may have all or part of their dividends reinvested at a 3% discount from market prices.
DSPP participants may purchase additional shares of Company common stock as often as
weekly with voluntary cash payments of at least $25, up to an annual maximum of
$100,000. At September 30, 1997, 712,596 shares were available for future issuance
under the plan.
On April 27, 1988, the Company adopted a Shareholders’ Rights Plan and declared a div-
idend of one right (a “Right”) for each outstanding pre-split share of common stock of
the Company, payable to shareholders of record as of May 10, 1988. Each Right will enti-
tle the holder thereof, until the earlier of May 10, 1998 or the date of redemption of the
Rights, to buy one share of common stock of the Company at an exercise price of $30 per
share, subject to adjustment by the Board of Directors upon the occurrence of certain
events. The Rights will be represented by the common stock certificates and are not exer-
cisable or transferable apart from the common stock until a “Distribution Date” (which
is defined in the Rights Agreement between the Company and the Rights Agent as the date
upon which the Rights become separate from the common stock).
At no time will the Rights have any voting rights. The exercise price payable and the num-
ber of shares of common stock or other securities or property issuable upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution. Until the
Distribution Date, the Company will issue one Right with each share of common stock
that becomes outstanding so that all shares of common stock will have attached Rights.
After a Distribution Date, the Company may issue Rights when it issues common stock if
the Board deems such issuance to be necessary or appropriate.
The Rights have certain anti-takeover effects and may cause substantial dilution to a per-
son or entity that attempts to acquire the Company on terms not approved by the Board
of Directors except pursuant to an offer conditioned upon a substantial number of Rights
being acquired. The Rights should not interfere with any merger or other business combi-
nation approved by the Board of Directors because, prior to the time the Rights become
exercisable or transferable, the Rights may be redeemed by the Company at $.05 per Right.
In November 1997, the Board of Directors approved the adoption of a new sharehold-
ers’ rights plan that will go into effect upon the expiration of the existing shareholders’ rights
plan on May 10, 1998. The provisions of the new rights plan are similar to those of the exist-
ing rights plan. However, the new rights plan does differ from the existing plan in certain
respects, including, but not limited to the following: (i) the exercise price under the new plan
will be $80 per share vs. $30 per share under the existing plan; (ii) the rights under the new
plan may be redeemed by the Company prior to the time they become exercisable or trans-
ferable at $.01 per right vs. $.05 per right under the existing plan; and (iii) the nature of the
events that will make the rights exercisable has been modified to reflect new developments in
the securities markets since 1988.
The Company’s Restricted Stock Grant Plan for management and key employees of the
Company, which became effective October 1, 1987 and was amended and restated in
November 1997, provides for awards of common stock that are subject to certain restric-
tions. The plan is administered by the Board of Directors. The members of the Board who
are not employees of the Company make the final determinations regarding participation
in the plan, awards under the plan, and restrictions on the restricted stock awarded. The
restricted stock may consist of previously issued shares purchased on the open market or
shares issued directly from the Company. The Company has registered 900,000 shares for
issuance under the plan. Compensation expense of $437,000, $795,000 and $1,015,000
was recognized in 1997, 1996 and 1995, respectively, in connection with the issuance of
shares under the plan. At September 30, 1997, 252,500 shares were available for future
award under the plan.
In November 1994, the Board adopted the Outside Directors Stock-for-Fee Plan, which
plan was approved by the shareholders of the Company in February 1995 and was
amended and restated in November 1997. The plan permits non-employee directors to
receive all or part of their annual retainer and meeting fees in stock rather than in cash.
The Company has registered 50,000 shares, 44,685 of which were available for future
issuance under the plan as of September 30, 1997.
In October 1995, the Financial Accounting Standards Board issued Statement No. 123
(“SFAS 123”), “Accounting for Stock-Based Compensation.” This statement establishes a
fair-value-based method of accounting for employee stock options or similar equity
instruments and encourages, but does not require, all companies to adopt that method of
accounting for all of their employee stock compensation plans. SFAS 123 allows companies
to continue to measure compensation cost for employee stock options or similar equity
instruments using the intrinsic value method of accounting described in Accounting
Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees.” The
Company has elected to remain with this method. Because of the limited nature of the
Company’s stock-based compensation plans, the adoption of SFAS 123 was immaterial.