Exhibit 10.1

EXECUTION COPY

SETTLEMENT AGREEMENT, dated this 24th day of January, 2008 (this “Agreement”),
by and among New Mountain Vantage GP, L.L.C., New Mountain Vantage, L.P., New
Mountain Vantage (California), L.P., New Mountain Vantage (Texas), L.P., New
Mountain Vantage Advisers, L.L.C., New Mountain Vantage (Cayman) Ltd., New
Mountain Vantage HoldCo Ltd., Mr. Steven B. Klinsky, NMV Special Holdings,
L.L.C., California Public Employees’ Retirement System (“CalPERS”), F. Fox
Benton, III, David M. DiDomenico, Frederic V. Salerno (the foregoing individuals
and entities being collectively referred to herein as the “New Mountain Group”),
and National Fuel Gas Company, a New Jersey corporation (the “Company”).

WHEREAS, the New Mountain Group (i) has publicly stated that it intends to
solicit proxies for the election of its own opposition slate of nominees (the
“Proxy Solicitation”) for election to the Company’s Board of Directors (the
“Board”) at the 2008 annual meeting of shareholders of the Company (the “2008
Annual Meeting”) and (ii) has taken certain actions in furtherance thereof,
including but not limited to filing a definitive proxy statement with the United
States Securities and Exchange Commission (the “SEC”) on January 8, 2008 (the
“New Mountain Group Proxy Statement”) and, in the letter dated as of
November 16, 2007 and other communications related thereto, requesting to
inspect certain of the Company’s books and records pursuant to Section 14A:5-28
of the New Jersey Business Corporation Act (such letter and related requests,
the “Demand”); and

WHEREAS, the Company and the members of the New Mountain Group have determined
that the interests of the Company and its shareholders would be best served at
this time by, among other things, avoiding the Proxy Solicitation and the
substantial expense, disruption and adverse publicity that may result therefrom.

NOW, THEREFORE, in consideration of the foregoing premises and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and, intending to be legally bound hereby, the parties hereby agree
as follows:

Section 1. Board Composition; Recommendation; Proxy Supplement.

(a) The Company agrees that there shall be four (4) nominees to the Board for
election at the 2008 Annual Meeting with terms to expire in 2011. Such nominees
shall be Robert T. Brady, Rolland E. Kidder and John F. Riordan, all of whom
currently serve on the Board (the “Continuing Nominees”), and Frederic V.
Salerno (the “New Mountain Nominee” and, together with the Continuing Nominees,
the “Nominees”). The Board shall recommend that the shareholders of the Company
vote to elect the Nominees as directors of the Company.

(b) The Company shall increase the size of the Board from ten (10) to eleven
(11) directors preceding the 2008 Annual Meeting.

(c) Promptly following the date hereof, the Company shall prepare and file with
the SEC a supplement (the “Supplement”) to the Company’s definitive proxy
statement, dated as of January 11, 2008, that gives effect to the foregoing and
shall mail the Supplement concurrent therewith to the Company’s shareholders.
Thereafter, the Company shall solicit proxies for the Nominees in accordance
with the Supplement and shall recommend to and instruct the shareholders of the
Company to vote all proxies pursuant to the Supplement and in accordance with
the instructions specified in the related proxy card. The Company agrees that
the Supplement and any other solicitation materials to be delivered to
shareholders in connection with the 2008 Annual Meeting shall be prepared in
accordance with the terms of this Agreement.

(d) As promptly as practicable following the date hereof, the Company shall:

(1) with the cooperation of the New Mountain Group, and acting in good faith,
file motions to withdraw (the “Withdrawal”) its petitions with (A) the New York
State Public Service Commission (the “NYPSC”), filed on December 19, 2007,
requesting the issuance of an order compelling members of the New Mountain Group
to disclose the full extent of their holdings of shares of common stock of the
Company (the “Common Stock”) and (B) the Pennsylvania Public Utility Commission
(the “PaPUC”), filed on November 8, 2007, requesting the issuance of an order
compelling members of the New Mountain Group to apply for and receive a
certificate of public convenience. The Company shall, acting in good faith,
request the support of Withdrawal from all interveners and other interested
stakeholders, and with the cooperation of the New Mountain Group, seek the
acceptance of the motions. Until the Termination Date, the Company shall not
subsequently make any allegation or petition to the NYPSC or the PaPUC or any
other forum inconsistent with the Withdrawal, provided, that the New Mountain
Group is in compliance with this Agreement, and

(2) file a notice of dismissal of its complaint, filed on January 18, 2008, with
the United States District Court, Western District of New York.

(e) Mr. Salerno’s service on the Board shall be without compensation for so long
as the New Mountain Group continues to own any Common Stock of the Company.
Promptly following the completion of the 2008 Annual Meeting, the Board shall
appoint the New Mountain Nominee to each of the Nominating/Corporate Governance
Committee and the Compensation Committee, and the New Mountain Nominee shall
serve on such committees through the expiration of his term on the Board, so
long as permitted by applicable law and the New York Stock Exchange (“NYSE”)
listing standards. In addition, the New Mountain Nominee shall be appointed to
any special committee that may be established by the Board, to the extent
permitted by applicable law and the NYSE listing standards.

(f) If the New Mountain Nominee is not elected to the Board at the 2008 Annual
Meeting or, after election to the Board, thereafter is removed, resigns or is
otherwise unable to serve as a director of the Company, the New Mountain Group
shall be entitled to nominate a new nominee, which nominee will be chosen with
the agreement of the Company, not to be unreasonably withheld (such nominee
shall then also be considered a New Mountain Nominee), and the Board shall
promptly appoint such New Mountain Nominee to the Board to serve until the next
annual meeting of shareholders of the Company after such appointment. At such
next annual meeting of shareholders of the Company after such appointment, the
Company shall nominate such New Mountain Nominee to serve the remainder of the
term of the director whom such New Mountain Nominee replaced (i.e., until the
annual meeting of shareholders of the Company in 2011).

(g) Notwithstanding anything in this Agreement to the contrary, once the New
Mountain Group ceases to (1) beneficially own five percent (5%) or more of the
Company’s outstanding common shares, (2) control five percent (5%) or more of
the economic interests in the outstanding Voting Securities (as hereinafter
defined in Section 13) or (3) control five percent (5%) or more of the voting
interests in the outstanding Voting Securities, the Company’s obligations under
Section 1(f) of this Agreement shall cease.

Section 2. Proxy Solicitation; Voting; Company Form 8-K; New Mountain Group
Schedule 13D, Preliminary Proxy and Demand.

(a) The New Mountain Group shall immediately cease, and shall cause all of their
controlled Affiliates (as such term is hereinafter defined in Section 13)
immediately to cease, any and all efforts with respect to the Proxy
Solicitation, except as hereinafter provided in this Section 2.

(b) Subject to the Company’s compliance with Sections 1(a), 1(b), 1(c) and
1(d)(2) of this Agreement, the New Mountain Group hereby irrevocably withdraws
the nominations of Messrs. Benton, DiDomenico and Salerno and the related
advance notice submitted to the Company on October 17, 2007.

(c) From the date hereof until the Termination Date, each member of the New
Mountain Group shall not make, and shall cause each of its controlled Affiliates
not to make, any objection to the election of each of the Nominees at the 2008
Annual Meeting. Each member of the New Mountain Group shall, and shall cause
each of its controlled Affiliates to:

(1) vote all shares of the Voting Securities which it is entitled to vote at the
2008 Annual Meeting in favor of the election of each of the Nominees at the 2008
Annual Meeting,

(2) vote all shares of the Voting Securities which it is entitled to vote at the
2009 annual meeting of shareholders of the Company (the “2009 Annual Meeting”)
in favor of the election of each of the Company’s nominees to the Board for
election at the 2009 Annual Meeting, provided, that CalPERS shall not be bound
by this paragraph (2), and

(3) on every other proposal submitted to the Company’s shareholders by a Person
other than the Company from the date hereof until the Termination Date, vote all
shares of the Voting Securities which it is entitled to vote in accordance with
the Board’s recommendation, provided, that CalPERS shall not be bound by this
paragraph (3).

For the avoidance of doubt, any provisions of this Agreement pertaining to the
voting of shares of Voting Securities shall apply equally to actions to be taken
without a meeting by written consent.

(d) The Company shall promptly file a Form 8-K reporting the entry into this
Agreement and appending this Agreement and the Press Release (as hereinafter
defined in Section 10) as exhibits thereto. The New Mountain Group shall
promptly file an amendment to the Schedule 13D regarding the Common Stock filed
with the SEC on October 30, 2006, and as amended on November 28, 2006, August 7,
2007, September 12, 2007, September 14, 2007, October 19, 2007, November 6, 2007
and November 19, 2007 (the “Schedule 13D”), reporting the entry into this
Agreement, amending applicable items to conform to its obligations hereunder and
appending this Agreement and the Press Release as exhibits thereto. Upon
determination by the New Mountain Group, acting in good faith after consultation
with counsel, that it is permitted to file under Schedule 13G in connection with
its investment in the Company rather than Schedule 13D, it will cease filing and
updating under Schedule 13D and file and update under Schedule 13G instead.

(e) Promptly following the date hereof, the New Mountain Group shall notify the
SEC that it is withdrawing the New Mountain Group Proxy Statement.

(f) The New Mountain Group hereby irrevocably withdraws its Demand, and shall
promptly return to the Company or destroy, in its sole discretion, all materials
and summaries or duplicates thereof that have been delivered to the New Mountain
Group or its representatives pursuant to the Demand prior to the date hereof. In
the case of destruction, such destruction shall be certified in writing to the
Company by an authorized officer supervising such destruction.

(g) The New Mountain Group agrees not to allege that the Company’s definitive
proxy statement or any additional soliciting materials filed with the SEC in
connection with the 2008 Annual Meeting violate any of the rules or regulations
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statement not misleading.

(h) The New Mountain Group shall not vote or cause to be voted any proxies that
may be received pursuant to the New Mountain Group Proxy Statement.

(i) The Company acknowledges and agrees that:

(1) the New Mountain Nominee may share confidential information, other than
confidential information that may be privileged, obtained in his capacity as a
director, with certain employees and advisors of the New Mountain Group, as
listed on Schedule A hereto (collectively, the “New Mountain Investment Group”),
provided, that (A) such schedule may be amended from time to time by the New
Mountain Group (i) in its sole discretion, to add or remove certain employees of
the New Mountain Group (the total number of such employees listed on Schedule A
not to exceed fifteen (15) at any given time) and (ii) with the approval of the
Company in its sole discretion, to add or remove certain advisors of the New
Mountain Group, (B) the New Mountain Investment Group shall be comprised solely
of natural persons and (C) the New Mountain Group shall provide the Company with
three (3) business days’ prior notice of any amendment to Schedule A to be made
pursuant to subclause (i)(1)(A)(i) of this Section 2; provided, further, that
each member of the New Mountain Investment Group that is to receive such
confidential information agrees in a mutually acceptable written agreement with
the Company, in the form attached hereto as Exhibit A, to (w) keep such
information strictly confidential, (x) use such information only for the purpose
of monitoring the New Mountain Group’s investment in the Company, (y) be bound
by the standstill obligations contained herein and (z) acknowledge that such
information may constitute material non-public information under applicable
federal and state securities laws, and that he or she will not trade on the
basis of such information in violation of such laws;

(2) the New Mountain Group shall be liable to the Company for any breach by a
party other than the Company of a confidentiality agreement entered into under
paragraph (1) of this Section 2(i); and

(3) no member of the New Mountain Group shall be liable to the Company for any
breach of fiduciary duty by reason of fact that a member of the New Mountain
Group pursues or acquires a business opportunity for itself, directs such
opportunity to another Person (as hereinafter defined in Section 13), or does
not present such business opportunity to the Company, in each case, so long as
such business opportunity is not (i) derived directly or indirectly from the
confidential information referred to in Section 2(i)(1) hereto or (ii) otherwise
derived directly or indirectly from the New Mountain Nominee. The Company agrees
that, to the extent any court might hold the conduct of a member of the New
Mountain Group that is permitted under this paragraph (3) as a breach of duty to
the Company, the Company waives any and all claims and causes of action the
Company may have for such activity against a member of the New Mountain Group.
Notwithstanding the foregoing, the definition of “New Mountain Group” in this
paragraph (3) shall exclude the New Mountain Nominee.

Section 3. Standstill. Without the prior written consent of the Board
specifically expressed in a written resolution adopted by a majority vote of the
entire Board, each member of the New Mountain Group will not, and will cause
each of its respective controlled Affiliates, employees, agents and other
Persons, in each case acting on behalf of any member of the New Mountain Group,
not to, do any of the following from the date hereof through the Termination
Date, provided, that if any such controlled Affiliates, employees or agents of
any member of the New Mountain Group violates this Section 3 while not acting on
behalf of any member of the New Mountain Group, the New Mountain Group, upon
becoming aware of such violation, shall use its reasonable best efforts to
promptly remedy or cure such violation, and if it is not possible to remedy or
cure such violation, the New Mountain Group shall terminate its relationship
with such controlled Affiliate, employee or agent; provided, further, that
nothing in this Section 3 shall (x) limit any actions that may be taken by the
New Mountain Nominee acting as a director of the Company consistent with his
fiduciary duties, (y) require any member of the New Mountain Group to vote in
any way (except as required by Section 2(c) of this Agreement) on matters put to
shareholders of the Company for their approval or (z) in any way limit the New
Mountain Group’s or the New Mountain Nominee’s ability to make suggestions,
recommendations or proposals to the Company, the Board or any of the directors
of the Company so long as such suggestions, recommendations or proposals would
not reasonably be expected to require the Company to make public disclosure
thereof:

(a) acquire, offer or propose to acquire, or agree to acquire (except by way of
stock dividends or other distributions or offerings made available to holders of
Voting Securities generally on a pro rata basis, provided that any such
securities so received shall be subject to the provisions hereof), directly or
indirectly, whether by purchase, tender or exchange offer, through the
acquisition of control of another Person, by joining a partnership, limited
partnership, syndicate or other “group” (within the meaning of Section 13(d)(3)
of the Exchange Act), or otherwise, any Voting Securities, if after giving
effect to such acquisition the New Mountain Group (by itself or with any other
Person with whom it has any agreement, understanding or arrangement with respect
to Voting Securities) would (1) beneficially own more than 9.6% of the
outstanding Voting Securities or (2) influence or exercise, directly or
indirectly through swap transactions, other hedging transactions or otherwise,
any voting power with respect to more than 9.6% of the outstanding Voting
Securities; provided, however, that no sales by any member of the New Mountain
Group shall be required if the increase in the beneficial ownership of Voting
Securities over 9.6% of the outstanding Voting Securities results exclusively
from a reduction in the number of outstanding Voting Securities by reason of the
Company’s repurchase of its Common Stock; provided, further, that no member of
the New Mountain Group acquires any additional Voting Securities following
disclosure by the Company of information indicating that the New Mountain Group
beneficially owns in excess of 9.6% of the outstanding Voting Securities (for
the purposes of computing the beneficial ownership of the New Mountain Group at
the time of any purchase, the number of outstanding Voting Securities shall be
determined by the latest available Company filing with the SEC);

(b) engage, or in any way participate, directly or indirectly, in any
“solicitation” (as such term is defined in Rule 14a-1(l) promulgated by the SEC
under the Exchange Act) of proxies or consents (whether or not relating to the
election or removal of directors), seek to advise, encourage or influence any
Person with respect to the voting of any Voting Securities; initiate, propose or
otherwise “solicit” (as such term is defined in Rule 14a-1(l) promulgated by the
SEC under the Exchange Act) shareholders of the Company for the approval of
shareholder proposals whether made pursuant to Rule 14a-8 or Rule 14a-4 under
the Exchange Act or otherwise; or induce or attempt to induce any other Person
to initiate any such shareholder proposal; or otherwise communicate to any Third
Party (as hereinafter defined in Section 13) how it intends to vote the shares
of Voting Stock beneficially owned by it on any matter put to the shareholders
of the Company for their approval;

(c) except as required pursuant to Item 4 of Schedule 13D in connection with a
Disposition (as hereinafter defined in Section 4) of Voting Securities expressly
permitted under Section 4 of this Agreement, seek, propose, or make any
statements to any Third Party with respect to, any merger, consolidation,
business combination, tender or exchange offer, sale or purchase of assets, sale
or purchase of securities, dissolution, liquidation, restructuring,
recapitalization or similar transactions involving the Company or any of its
controlled Affiliates;

(d) form, join or in any way participate in any “group” (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to any Voting Securities,
other than a “group” that (1) includes all or some lesser number of the Persons
identified as “Reporting Persons” (or controlled Affiliates thereof) in the
Schedule 13D and the signatories to this Agreement and (2) does not include any
other members who are not currently identified as Reporting Persons (or
controlled Affiliates thereof) or the signatories to this Agreement;

(e) deposit any Voting Securities in any voting trust or subject any Voting
Securities to any arrangement or agreement with respect to the voting of any
Voting Securities, except as expressly set forth in this Agreement;

(f) otherwise act, alone or in concert with others, to control or seek to
control or influence or seek to influence the management, the Board or policies
of the Company, except as otherwise expressly permitted in this Agreement;

(g) seek, alone or in concert with others, (1) to call a meeting of shareholders
or solicit consents from shareholders, (2) to obtain representation on the Board
except as otherwise set forth in this Agreement, or (3) to effect the removal of
any member of the Board;

(h) seek to amend any provision of the Company’s certificate of incorporation or
by-laws;

(i) submit any demand pursuant to Section 14A:5-28 of the New Jersey Business
Corporation Act;

(j) make any proposal (including to disclose or discuss any proposal with a
Third Party) or enter into any discussion regarding any of the foregoing, or
make any statement or inquiry, or disclose any intention, plan or arrangement
(whether written or oral) inconsistent with the foregoing or any other provision
of this Agreement, in each case, to any Third Party, or make or disclose to any
Third Party any request to amend, waive or terminate any provision of this
Agreement;

(k) have any discussions or communications, or enter into any arrangements,
understanding or agreements (whether written or oral) with, or advise, finance,
assist, induce or knowingly encourage, any Third Party either in connection or
inconsistent with any of the foregoing, or make any investment reasonably
understood to be controlling in or enter into any arrangement in relation to any
of the foregoing with, any Third Party that engages, or offers or proposes to
engage, in any of the foregoing; or

(l) otherwise take or cause any action inconsistent with any of the foregoing.

Section 4. Dispositions of Voting Securities.

(a) Until the Termination Date and subject to Section 4(b) hereof, no member of
the New Mountain Group shall, and no such member will permit their controlled
Affiliates to, directly or indirectly, sell, assign, transfer, grant an option
with respect to or otherwise dispose of any interest in (or enter into an
agreement or understanding with respect to the foregoing) (collectively, a
“Disposition”) any Voting Securities; provided, however, that the foregoing
limitation shall not prohibit any Disposition which complies with Section 4(b)
hereof (a “Permitted Disposition”).

(b) The term “Permitted Disposition” shall mean and include any of the
following: (1) any Disposition to or through a nationally recognized
broker-dealer (a “Block Positioner”) so long as any such Disposition is not to a
Person who, together with its controlled Affiliates and after giving effect to
such Disposition, would, to the knowledge of any member of the New Mountain
Group, after reasonable inquiry, beneficially own five percent (5%) or more of
the outstanding Voting Securities, unless such Person is either a reporting
person with respect to the Voting Securities on Schedule 13G or is an
institutional investor eligible to use such Schedule 13G; (2) a Disposition
pursuant to a transaction effected on any inter-dealer quotation system or on
the floor of a nationally recognized securities exchange in which no member of
the New Mountain Group has any knowledge that the purchaser is a Person who,
after giving effect to the Disposition, would, together with its controlled
Affiliates, beneficially own five percent (5%) or more of the outstanding Voting
Securities, (3) a Disposition pursuant to a tender offer, an exchange offer, a
merger, sale or any other transaction in which all shareholders of the Company
have a right to participate; (4) any Disposition by any member of the New
Mountain Group to any controlled Affiliate of the New Mountain Group who agrees
to be bound by the terms of this Agreement applicable to the New Mountain Group
or (5) any Disposition made in connection with any hedging activity, provided,
that no such hedging activity could reasonably be considered to result in the
decoupling of the economic and voting interests in any of the subject Voting
Securities such that a Person (other than the New Mountain Group or any of its
controlled Affiliates), together with its controlled Affiliates, to the
knowledge of any member of the New Mountain Group, after reasonable inquiry,
would, after giving effect to any such hedging activity, control five percent
(5%) or more of the economic interests or of the voting interests (or of both
the economic and voting interests) relating to outstanding Voting Securities,
unless such Person is either a reporting person with respect to the Voting
Securities on Schedule 13G or is an institutional investor eligible to use such
Schedule 13G, and provided, further, that the New Mountain Group shall promptly,
but in any event within two business days, keep the Company advised of any such
Dispositions made pursuant to this subclause (5). For the avoidance of doubt,
all Permitted Dispositions shall be in accordance with the Company’s “Policy on
Insider Trading in National Fuel Stock” in effect on the date hereof and as
amended from time to time, applicable to the non-executive directors of the
Company and as such would be applicable to the New Mountain Group if the New
Mountain Group were a non-executive director of the Company, and a copy of which
has been provided to the New Mountain Group.

(c) If any member of the New Mountain Group or any controlled Affiliate of any
member of the New Mountain Group acquires any Voting Securities in violation of
this Agreement, it will immediately dispose of such Voting Securities to Persons
who are not members of the New Mountain Group or controlled Affiliates thereof
in a manner permitted by Section 4(b) hereof; provided, that the Company may
also pursue any other available remedy to which it may be entitled as a result
of such violation.

Section 5. Additional Agreements.

(a) Until the Termination Date and on a semi- annual basis (or such other more
frequent basis as the Board determines in its sole discretion), no more than
four (4) designated representatives (the “Designated Representatives”) of the
New Mountain Group shall be afforded an opportunity to meet with the Board. The
New Mountain Nominee shall not be considered a Designated Representative. Prior
to the first such meeting, the New Mountain Group shall notify in writing the
Chairman of the Board of the identity of its Designated Representatives and any
specific topics they may wish to address with the Board. By written notice to
the Company, the Designated Representatives may be changed from time to time.
Such meetings shall occur as part of a regularly scheduled Board meeting or on a
date that is mutually agreed to be convenient for the Board and the Designated
Representatives. Such meetings may include participation by members of the Board
by conference telephone or other means that would satisfy the Company’s by-law
requirement for a Board meeting, so long as at least a majority of the members
of the entire Board are present in person.

(b) The New Mountain Group and the Company agree that the Company’s Appalachian
acreage is extremely valuable, and as such, the Company intends to develop its
Appalachian acreage, including the deeper Marcellus Shale, with all reasonable
speed and on a commercially reasonable best efforts basis. The Company agrees to
address such development, to the extent material and not competitively
sensitive, on its quarterly calls with the Company’s shareholders.

(c) The New Mountain Group agrees to provide the Company with copies of all
reports and analyses in its possession developed by or based on the research and
analysis of Schlumberger Data & Consulting Services, including but not limited
to the report referenced by the New Mountain Group in its Schedule 14A, filed
with the SEC on November 6, 2007 (the “Schlumberger Materials”). The Company
agrees to provide the New Mountain Nominee with a copy of the Morgan Stanley
report and any other reports, materials and information reviewed by the
non-executive directors of the Board, in evaluating or analyzing the New
Mountain Group’s suggestions, including any minutes of any meetings at which the
New Mountain Group’s suggestions were discussed. Within sixty (60) days from the
date hereof, the Company also agrees to discuss with the New Mountain Nominee,
and to cause its relevant advisors, including Morgan Stanley, to discuss and
answer all questions concerning, its analysis of and response to each of the New
Mountain Group’s suggestions as raised in the context of the Proxy Solicitation.
To the extent the Board, the Company or any of the Company’s advisors have not
already considered any of the New Mountain Group’s suggestions as raised in the
context of the Proxy Solicitation, or a certain aspect thereof, or new facts,
circumstances, ideas or legal structures have been introduced or have arisen
that were not otherwise factored into the foregoing analyses, the Board shall
reasonably consider, in a manner consistent with the Board’s usual practice, any
reasonable requests made by the New Mountain Nominee for further analysis. For
the avoidance of doubt, at any meeting of the Board or a committee of the Board,
the New Mountain Nominee shall have no lesser or greater rights than a director
of the Company and have no lesser or greater obligations than a director of the
Company as compared to the other members of the Board generally, and each motion
made in good order by the New Mountain Nominee will be seconded by one or more
other members of the Board.

(d) The Company agrees to address its strategy and to provide updates on its
progress in the Gulf of Mexico, to the extent material and not competitively
sensitive, on its quarterly calls with the Company’s shareholders. The Company
will reaffirm to its shareholders that the Company intends to evaluate the
divestiture of this asset as one key alternative if performance targets set by
the Company are not met during its 2008 fiscal year. The Company agrees to keep
its shareholders apprised of the Company’s progress with respect to such asset,
to the extent material and not competitively sensitive, on its quarterly calls
with the Company’s shareholders.

Section 6. Corporate Governance. A meeting of the directors of the Company will
be held immediately after the 2008 Annual Meeting (the “Next Board Meeting”). At
the Next Board Meeting, the Company shall:

(a) elect separate individuals to the positions of the Chairman of the Board and
the Chief Executive Officer, with the expectation that Philip C. Ackerman will
become Chairman of the Board and David F. Smith will become Chief Executive
Officer;

(b) cause the charters of the Audit Committee, the Compensation Committee and
the Nominating/Corporate Governance Committee of the Board to be amended to
provide for annual performance reviews of individual directors to be presented
to the full Board;

(c) cause the adoption and public disclosure of resolutions of the Board
requiring that each director, in order to receive compensation for service as a
director, must beneficially own at least five hundred (500) shares of Common
Stock during the first year of service, at least one thousand (1,000) shares
during the second year of service and at least two thousand five hundred (2,500)
shares thereafter; and that the transfer of shares issued by the Company to
outside directors as compensation for service as directors is prohibited under
currently effective resolutions until the later of (1) two years from the date
of issuance of such shares or (2) six months after such director’s cessation of
service as a director of the Company; and

(d) cause the Compensation Committee of the Board to amend its administrative
rules to provide that, subject to certain exceptions, future equity awards shall
vest or become exercisable only upon the attainment of certain performance goals
to be established by the Compensation Committee.

Section 7. Representations and Warranties.

(a) The members of the New Mountain Group jointly and severally represent and
warrant as follows:

(1) Each member of the New Mountain Group has the power and authority to
execute, deliver and carry out the terms and provisions of this Agreement and to
consummate the transactions contemplated hereby.

(2) This Agreement has been duly and validly authorized, executed and delivered
by each member of the New Mountain Group, constitutes a valid and binding
obligation and agreement of each such member and is enforceable against each
such member in accordance with its terms.

(3) Each member of the New Mountain Group, together with its controlled
Affiliates, has the sole power to vote the number of shares of Common Stock as
set forth by beneficial owner and amount on Schedule B hereto and such shares of
Common Stock constitute all of the Voting Securities of the Company beneficially
owned by the members of the New Mountain Group and their controlled Affiliates.

(4) Mr. Salerno meets the membership eligibility requirements, as now in effect,
established by (A) the Company’s publicly disclosed corporate governance
documents, (B) the SEC, (C) the New York Stock Exchange for each committee of
the Board to which he shall be appointed and (D) applicable law (collectively,
the “Eligibility Requirements”).

(b) The Company hereby represents and warrants as follows:

(1) The Company has the power and authority to execute, deliver and carry out
the terms and provisions of this Agreement and to consummate the transactions
contemplated hereby.

(2) This Agreement has been duly and validly authorized, executed and delivered
by the Company, constitutes a valid and binding obligation and agreement of the
Company and is enforceable against the Company in accordance with its terms.

(3) To the Company’s knowledge, Mr. Salerno meets the Eligibility Requirements.

(4) None of the actions to be taken by the Company or the New Mountain Group
through the Termination Date required by the terms of this Agreement shall cause
a change of control or acceleration of any award or benefit under any employee
agreements or employee benefit arrangements with any employee of the Company or
any of its subsidiaries.

Section 8. Specific Performance. Each of the members of the New Mountain Group,
on the one hand, and the Company, on the other hand, acknowledges and agrees
that irreparable injury to the other party hereto would occur in the event any
of the provisions of this Agreement were not performed in accordance with its
specific terms or was otherwise breached and that such injury would not be
adequately compensable in damages. It is accordingly agreed that the members of
the New Mountain Group, on the one hand, and the Company, on the other hand,
shall each be entitled to specific enforcement of, and injunctive relief to
prevent any violation of, the terms hereof and the other party hereto will not
take any action, directly or indirectly, in opposition to the party seeking
relief on the grounds that any other remedy or relief is available at law or in
equity.

Section 9. Termination and Survival. Except as set forth in the following
sentence, the provisions of this Agreement shall terminate upon, and this
Agreement shall remain in full force and effect and shall be fully binding on
the parties hereto in accordance with the provisions hereof until, the
Termination Date. The provisions of Section 2(i)(2), Section 2(i)(3), this
Section 9 and Section 11 shall survive the Termination Date.

Section 10. Press Release and Other Public Disclosures. Immediately following
the execution and delivery of this Agreement, the Company and the New Mountain
Group shall issue the joint press release attached hereto as Schedule C (the
“Press Release”). None of the parties hereto shall (a) make any public
statements (including in any filing with the SEC or any other regulatory or
governmental agency, including any stock exchange) that are inconsistent with,
or otherwise contrary to, the statements in the Press Release issued pursuant to
this Section 10, (b) otherwise make any public statements that may reasonably be
understood to be disparaging of any of the other parties hereto, including,
without limitation, any materials or information (including the Schlumberger
Materials) provided by the New Mountain Group or the New Mountain Nominee to the
Company or (c) except as required by law, issue or cause the publication of any
press release or other public announcement with respect to (1) this Agreement,
without the prior written consent of the parties hereto or (2) the Company, its
management or the Board or the Company’s business, without the prior written
consent of the Company.

Section 11. Release.

(a) The New Mountain Group hereby agrees for the benefit of the Company, and
each controlled Affiliate, officer, director, shareholder, agent, employee,
attorney, assigns, predecessor and successor, past and present, of the Company
(the Company and each such Person being a “Company Released Person”) as follows:
the New Mountain Group, for themselves and for their members, officers,
directors, assigns, agents and successors, past and present, hereby agree and
confirm that, effective from and after the date of this Agreement, they hereby
acknowledge full and complete satisfaction of, and covenant not to sue, and
forever fully release and discharge each Company Released Person of, and hold
each Company Released Person harmless from, any and all claims of any nature
whatsoever (“Claims”), whether known or unknown, suspected or unsuspected,
including, but not limited to, those arising in respect of or in connection with
the nomination and election of directors or other actions to be taken at the
2008 Annual Meeting, occurring any time or period of time on or prior to the
date of this Agreement; provided, that nothing herein shall release any Company
Released Person from any Claim arising in respect of or in connection with
actions of any Company Released Person taken or omitted after the date hereof
(whether or not arising from the same, similar or related facts to those
underlying any released Claims).

(b) The Company hereby agrees for the benefit of the New Mountain Group, and
each controlled Affiliate, officer, director, member, partner, manager,
shareholder, agent, employee, attorney, assigns, predecessor and successor, past
and present, of each member of the New Mountain Group (the New Mountain Group
and each such Person being a “New Mountain Released Person”) as follows: the
Company, for itself and for its officers, directors, assigns, agents and
successors, past and present, hereby agrees and confirms that, effective from
and after the date of this Agreement, it hereby acknowledges full and complete
satisfaction of, and covenants not to sue, and forever fully releases and
discharges each New Mountain Released Person of, and holds each New Mountain
Released Person harmless from, any and all Claims, whether known or unknown,
suspected or unsuspected, including, but not limited to, those arising in
respect of or in connection with the nomination and election of directors or
other actions to be taken at the 2008 Annual Meeting, occurring any time or
period of time on or prior to the date of this Agreement; provided, that nothing
herein shall release any New Mountain Released Person from any Claim arising in
respect of or in connection with actions of any member of the New Mountain Group
taken or omitted after the date hereof (whether or not arising from the same,
similar or related facts to those underlying any released Claims).

Section 12. Expenses. Immediately following the certification of the results of
the votes taken at the 2008 Annual Meeting, the Company shall reimburse the New
Mountain Group for its reasonable, documented and actual out-of-pocket fees and
expenses incurred by the New Mountain Group prior to the date hereof in
connection with the Proxy Solicitation and related matters, not to exceed
$1,000,000 in the aggregate. All other fees and expenses incurred by each of the
parties hereto in connection with the matters contemplated by this Agreement
will be borne by such party.

Section 13. Certain Definitions. As used in this Agreement, (a) the term
“Affiliates” shall have the meaning set forth in Rule 12b-2 under the Exchange
Act and shall include persons who become Affiliates of any Person subsequent to
the date hereof; (b) the term “Person” shall mean any individual, partnership,
corporation, group, syndicate, trust, government or agency thereof, or any other
association or entity, (c) the term “Voting Securities” shall mean the Company’s
Common Stock and any other securities of the Company entitled to vote in the
election of directors, or securities convertible into, or exercisable or
exchangeable for Common Stock or other securities, whether or not subject to the
passage of time or other contingencies, (d) the term “Termination Date” shall
mean the earlier of (i) September 15, 2009, (ii) thirty (30) days prior to the
last day on which notice of intent to nominate candidates for election as
directors pursuant to Article 1, Section 7 of the Company’s by-laws (or any
other provision of the Company’s certificate of incorporation or by-laws or any
other governing document) concerning the election of directors at the annual
meeting of the shareholders of the Company to be held in 2010 and (iii) a
material breach by the Company of its obligations under this Agreement and
(e) the term “Third Party” shall mean any Person other than (i) any member of
the New Mountain Group, any then current member of the New Mountain Investment
Group, the New Mountain Nominee, the Company, the Board or any director or
officer of the Company and (ii) legal counsel to each member of the New Mountain
Group, provided, that any discussions or other communications between a member
of the New Mountain Group and its respective legal counsel with respect to
matters contemplated by this Agreement shall be subject to attorney-client
privilege, which privilege shall not be waived.

Section 14. No Waiver. Any waiver by any party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.

Section 15. Successors and Assigns. All the terms and provisions of this
Agreement shall inure to the benefit of and shall be enforceable by the
successors and assigns of the parties hereto.

Section 16. Entire Agreement; Amendments. This Agreement and the confidentiality
agreement, originally dated as of December 18, 2007 (together with the
subsequent extensions covering the period of time through the date of this
Agreement, the “Confidentiality Agreement”), contain the entire understanding of
the parties with respect to the subject matter hereof. There are no
restrictions, agreements, promises, representations, warranties, covenants or
other undertakings other than those expressly set forth in this Agreement and in
the Confidentiality Agreement. This Agreement may be amended only by a written
instrument duly executed by the parties or their respective successors or
assigns.

Section 17. Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

Section 18. Notices. All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given (a) when delivered by hand (with
written confirmation of receipt), (b) upon sending if sent by electronic mail or
facsimile, with electronic confirmation of sending, provided, however, that a
copy is sent on the same day by registered mail, return receipt requested, in
each case to the appropriate mailing and electronic mail or facsimile addresses
set forth below, (c) one (1) day after being sent by nationally recognized
overnight carrier to the addresses set forth below or (d) when actually
delivered if sent by any other method that results in delivery (with written
confirmation of receipt):

If to the Company:

National Fuel Gas Company

6363 Main Street

Williamsville, New York 14221

Attn: Paula Ciprich, Esq.

Facsimile: (716) 857-7614

with a copy to (which shall not constitute notice):

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attn: David C. Karp, Esq.

Facsimile: (212) 403-2327

If to the New Mountain Group:

New Mountain Vantage Advisers, L.L.C.

787 Seventh Avenue, 49th Floor

New York, New York 10019

Attn: Steven B. Klinsky

Facsimile: (212) 582-2277

with a copy to (which shall not constitute notice):

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Attn: Paul Reinstein, Esq.

Facsimile: (212) 859-4000

and

Covington & Burling LLP

The New York Times Building

620 Eighth Avenue

New York, New York 10018

Attn: Jack S. Bodner, Esq.

Facsimile: (212) 841-1010

in each case, or to such other address as the Person to whom notice is given may
have previously furnished to the others in writing in the manner set forth
above.

Section 19. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York without reference
to the conflict of laws principles thereof.

Section 20. Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same Agreement.

Section 21. No Admission. Nothing contained herein shall constitute an admission
by any party hereto of liability or wrongdoing.

Section 22. Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
hereof, or the application of such provision to Persons or circumstances other
than those as to which it has been held invalid or unenforceable, will remain in
full force and effect and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination, the parties shall negotiate in an effort to
agree upon a suitable and equitable substitute provision to effect the original
intent of the parties.

[Remainder of page intentionally left blank.]

1

NATIONAL FUEL GAS COMPANY

     
By:
  /s/ David F. Smith
 
   
 
  Name: David F. Smith
 
  Title: President and Chief
Operating Officer

NEW MOUNTAIN VANTAGE GP, L.L.C.

     
By:
  /s/ Steven B. Klinsky
 
   
 
  Name: Steven B. Klinsky
 
  Title: Managing Member

NEW MOUNTAIN VANTAGE, L.P.

     
By:
  New Mountain Vantage GP, L.L.C., its general partner
By:
  /s/ Steven B. Klinsky
 
   
 
  Name: Steven B. Klinsky
 
  Title: Managing Member

NEW MOUNTAIN VANTAGE
(CALIFORNIA), L.P.

     
By:
  New Mountain Vantage GP, L.L.C., its general partner
By:
  /s/ Steven B. Klinsky
 
   
 
  Name: Steven B. Klinsky
 
  Title: Managing Member

NEW MOUNTAIN VANTAGE (TEXAS), L.P.

     
By:
  New Mountain Vantage GP, L.L.C., its general partner
By:
  /s/ Steven B. Klinsky
 
   
 
  Name: Steven B. Klinsky
 
  Title: Managing Member

[Signature pages to Settlement Agreement]

NEW MOUNTAIN VANTAGE ADVISERS, L.L.C.

     
By:
  /s/ Steven B. Klinsky
 
   
 
  Name: Steven B. Klinsky
 
  Title: Managing Member

NEW MOUNTAIN VANTAGE (CAYMAN) LTD.

     
By:
  /s/ Steven B. Klinsky
 
   
 
  Name: Steven B. Klinsky
 
  Title: Director

NEW MOUNTAIN VANTAGE HOLDCO LTD.

     
By:
  /s/ Steven B. Klinsky
 
   
 
  Name: Steven B. Klinsky
 
  Title: Director

NMV SPECIAL HOLDINGS, L.L.C.

     
By:
  New Mountain Vantage GP, L.L.C., its managing member
By:
  /s/ Steven B. Klinsky
 
   
 
  Name: Steven B. Klinsky
 
  Title: Managing Member

CALIFORNIA PUBLIC EMPLOYEES’
RETIREMENT SYSTEM

     
By:
  /s/ Christianna Wood
 
   
 
  Name: Christianna Wood
 
  Title: Senior Investment Officer

[Signature pages to Settlement Agreement]

2

STEVEN B. KLINSKY

/s/ Steven B. Klinsky

F. FOX BENTON, III

/s/ F. Fox Benton, III

DAVID M. DIDOMENICO

/s/ David M. DiDomenico

FREDERIC V. SALERNO

/s/ Frederic V. Salerno

[Signature pages to Settlement Agreement]

3

Schedule A

New Mountain Group

Steven B. Klinsky
David M. DiDomenico
Mathew J. Lori
Douglas F. Londal
Michael B. Ajouz
Dan Riley
Brad Weckstein
Robert Mulcare

Advisors

F. Fox Benton, III
David B. H. Martin
Jack S. Bodner
Paul M. Reinstein
Jeffrey Bagner

4

Schedule B

Beneficial Ownership of Shares of Common Stock, par value $1.00 per share,
of National Fuel Gas Company (“Common Stock”)

          Name   Number of Shares
Steven B. Klinsky
    7,505,100  
New Mountain Vantage GP, L.L.C.
    5,310,700  
New Mountain Vantage Advisers, L.L.C.
    4,828,100  
California Public Employees’ Retirement System
    3,242,806 (1)
NMV Special Holdings, L.L.C.
    2,677,000  
New Mountain Vantage (Cayman) Ltd.
    2,194,400  
New Mountain Vantage HoldCo Ltd.
    2,194,400  
New Mountain Vantage, L.P.
    904,800  
New Mountain Vantage (California), L.P.
    909,100  
New Mountain Vantage (Texas), L.P.
    819,800  
David M. DiDomenico
    100  
Frederic V. Salerno
    100  
F. Fox Benton, III
    5100 (2)
Total
    8,076,206 (3) (1) For purposes of Section 2(c) of the Settlement Agreement,
CalPERS has sole voting power with respect to shares of Common Stock that may be
deemed to be beneficially owned by NMVSH.
(2) Mr. Benton shares the power to vote or direct the vote and to dispose or to
direct the disposition of the 5,000 shares of Common Stock that may be deemed to
be beneficially owned by Moreno Energy, Inc.
(3) Represents the total number of shares of Common Stock, collectively,
beneficially owned by the New Mountain Group.

5

Schedule C

National Fuel Gas Company and New Mountain Vantage
Settle Proxy Contest

(January 24, 2008) Williamsville, N.Y and New York, N.Y. — National Fuel Gas
Company (NYSE: NFG) (“National Fuel” or the “Company”) and New Mountain Vantage
GP, L.L.C. and its affiliates, including the California Public Employees’
Retirement System, (“Vantage”) jointly announced today that they have reached a
settlement in the proxy contest pertaining to the election of directors to the
National Fuel Gas Company Board of Directors (the “Board”) at the Company’s 2008
Annual Meeting of Stockholders. The Company and Vantage have determined that the
Company’s shareholders, employees, retirees and customers would be best served
by resolving this matter and working together in a cooperative and productive
manner.

As part of the settlement, the Company has agreed to increase the size of its
Board from 10 to 11 directors and to nominate, as a new director, Vantage’s
candidate Frederic V. Salerno. In accordance with Vantage’s policies and at
their request, Mr. Salerno will receive no compensation for his Board service
for as long as Vantage continues to own Common Stock of the Company. Mr. Salerno
will be added to the Company’s original slate of the following continuing
directors: Robert T. Brady, Rolland E. Kidder and John F. Riordan.

All four candidates will be nominated to serve for a term to expire in 2011.
Upon election to National Fuel’s Board, Mr. Salerno will join the Compensation
and the Nominating/Corporate Governance Committees.

“We are pleased to announce this settlement and look forward to welcoming Fred
Salerno to our Board. We are confident that, in finding common ground where we
can jointly focus our attention on continuing to grow shareholder value,
National Fuel is very well positioned to maintain its long record of providing
superior returns to all of our investors,” said Philip C. Ackerman, Chairman and
Chief Executive Officer, National Fuel.

“We have always sought to achieve a productive relationship with National Fuel’s
management and Board for the benefit of all shareholders,” said David
DiDomenico, Managing Director of Vantage. “We believe that together we can
successfully advance the Company’s interests by focusing on developing the
Appalachian acreage, including the Marcellus Shale, by carefully evaluating
ongoing and future activities in the Gulf of Mexico, by considering Vantage’s
other suggestions, and by taking important steps to improve corporate
governance.”

The Company will file a supplement to its Proxy Statement and a new voting card
to reflect these nominees, which will be mailed to its shareholders. Likewise,
Vantage will immediately cease efforts related to its own proxy solicitation,
and withdraw its Proxy Statement and its own nominations.

Certain of the provisions in the Settlement Agreement relate to corporate
governance matters. For example, in order to have separate individuals serve as
Chairman of the Board of Directors and as Chief Executive Officer, the parties
agree that, following the February 2008 Annual Meeting, Philip C. Ackerman will
continue to serve as Chairman of the Board and David F. Smith will be named
Chief Executive Officer of the Company. In addition, future equity awards will
vest or become exercisable only upon the attainment of certain performance goals
to be established by the Compensation Committee.

Other elements of the Settlement Agreement include:

  •   The Company and Vantage have agreed to a standstill whereby, until
September 2009, Vantage will not, among other things: acquire Voting Securities
that would increase its beneficial ownership to more than 9.6 percent of the
Company’s Voting Securities; engage in any proxy solicitations or advance any
shareholder proposals; attempt to control the Company’s Board, management or
policies; call a meeting of shareholders; obtain additional representation to
the Board; or effect the removal of any member of the Board.

  •   The Company and Vantage agree that the Company’s Appalachian acreage,
including the Marcellus Shale, is extremely valuable and should be developed
with all reasonable speed and on a commercially reasonable best efforts basis.
The Company will provide, in conjunction with its quarterly conference call,
information on these development efforts, to the extent material and not
competitively sensitive.

  •   The Company reaffirms that it intends to evaluate the divestiture of its
assets in the Gulf of Mexico as one key alternative if performance targets set
by the Company are not met during this fiscal year. The Company will keep
shareholders apprised of its progress in conjunction with its quarterly
conference call, to the extent material and not competitively sensitive.

  •   Vantage will provide to the Company copies of all reports and analyses
developed or based upon the research and analysis of Schlumberger Data and
Consulting Services.

  •   The Company will provide its new director, Mr. Salerno, with a copy of the
Morgan Stanley report and the other reports, materials and information reviewed
by non-executive directors of the Board in evaluating or analyzing Vantage’s
suggestions.

  •   The Company will, with the cooperation of Vantage, file motions to
withdraw the petitions it previously filed with the Pennsylvania Public Utility
Commission and the New York State Public Service Commission that had requested
each regulatory agency take action with respect to the Vantage’s investment in
the Company.

  •   The Company and Vantage agree that, on a semi-annual basis designated
representatives from Vantage will be provided an opportunity to meet with the
Board. These meetings will afford Vantage an opportunity to bring its ideas to
the Board for its reasonable consideration.

  •   In addressing other corporate governance matters, the Company will amend
the charters of the Audit Committee, the Compensation Committee and the
Nominating/Corporate Governance Committee to provide for annual performance
reviews of individual directors to be presented to the full Board; amend its
administrative rules to provide that, subject to certain exceptions, future
equity awards will vest or become exercisable only upon the attainment of
certain performance goals; and cause the adoption or disclosure of target levels
of beneficial ownership of shares of Common Stock for each director.

About the Nominees to the National Fuel Gas Company Board of Directors:

Robert T. Brady has been a member of the National Fuel Gas Company Board since
1995. He has been the Chairman of Moog Inc. (“Moog”) since February 1996, has
served as President and Chief Executive Officer since 1988 and has been a member
of the Moog Board of Directors since 1984. Moog is a worldwide designer,
manufacturer and integrator of precision control components and systems with a
total return of 27 percent, 82 percent and 250 percent for the one, three and
five year periods ending September 30, 2007. Brady also serves as a Director of
Astronics Corporation, M&T Bank Corporation and Seneca Foods Corporation. He
currently Chairs the regular executive sessions of non-management Directors of
the National Fuel Gas Company Board of Directors and is the designated contact
for shareholders to communicate with the non-management directors on the Board.

Rolland E. Kidder has been a member of the National Fuel Gas Company Board since
2002. He served as the Executive Director of the Robert H. Jackson Center, Inc.,
in Jamestown, New York, from 2002 until 2006. He is the founder of Kidder
Exploration, Inc., an independent Appalachian oil and gas company and served as
its Chairman and President from 1984 to 1994. Kidder is also a former Director
of the Independent Oil and Gas Association of New York and the Pennsylvania
Natural Gas Associates — both Appalachian-based energy associations. He was an
elected member of the New York State Assembly from 1975 to 1982, is a former
Trustee of the New York Power Authority, was on the Dean’s Advisory Council of
the University at Buffalo School of Law from 1996 to 2001 and was Vice President
and investment advisor for P.B. Sullivan & Co., Inc. from 1994 until 2001.

John F. Riordan has been a member of the National Fuel Gas Company Board since
2002. He was President and CEO of GTI (the Gas Technology Institute), the
leading research, development and training organization serving the natural gas
industry, from April 2000 to December 2005. Riordan served as President and CEO
of MidCon Corporation, a company engaged in interstate and intrastate natural
gas transportation as well as wholesale marketing of natural gas, from
October 1988 to January 1998. In 1998, he directed Occidental Petroleum
Corporation’s divestiture and sale of MidCon to KN Energy, Inc and served as
Vice Chairman of KN Energy from February 1998 to February 1999. Riordan has been
a director of Nicor Inc. since 2001, twice served as Chairman of the Interstate
Natural Gas Association of America (INGAA), is the former President of the
commodity chemical business at Occidental Petroleum and former President of the
natural gas liquids business at Cities Service Company. He has also served as a
director of Occidental Petroleum, Chicago Bridge & Iron Company and as a Trustee
of Niagara University.

Frederic V. Salerno has, since 2006, served as a Senior Advisor to New Mountain
Capital, L.L.C. Salerno retired as Vice Chairman and CFO of Verizon, Inc. in
September 2002 after more than 37 years in the telecommunications industry.
Prior to the Bell Atlantic/GTE merger, which created Verizon, he was Senior Vice
Chairman and CFO of Bell Atlantic and President and CEO of New York Telephone.
Salerno serves as Trustee of the Inner City Scholarship Fund and in 1990 was
appointed Chairman of the Board of Trustees of the State University of New York,
a position he held until 1996. Salerno has previously served as a Director of
Con Edison, Keyspan and Orion Power. He is currently a director of Akamai
Technologies, Inc., Bear Stearns & Company, Inc., Intercontinental Exchange,
Inc., Popular, Inc., Viacom, Inc. and CBS Corp.

6

Exhibit A

[Date]

[     ]

Subject: Confidentiality Agreement

Dear [     ]:

Pursuant to Section 2(i)(1) of the Settlement Agreement, dated as of January 24,
2008 (the “Settlement Agreement”), by and among New Mountain Vantage GP, L.L.C.,
New Mountain Vantage, L.P., New Mountain Vantage (California), L.P., New
Mountain Vantage (Texas), L.P., New Mountain Vantage Advisers, L.L.C., New
Mountain Vantage (Cayman) Ltd., New Mountain Vantage HoldCo Ltd., Mr. Steven B.
Klinsky, NMV Special Holdings, L.L.C., California Public Employees’ Retirement
System, F. Fox Benton, III, David M. DiDomenico, Frederic V. Salerno (the
foregoing individuals and entities being collectively referred to herein as the
“New Mountain Group”), and National Fuel Gas Company, a New Jersey corporation
(the “Company”), the New Mountain Nominee (as defined in the Settlement
Agreement) may disclose, furnish or reveal to you, either orally, in writing or
otherwise, or give you access to, certain information about the business,
financial condition, operations, assets and liabilities of the Company (the
“Information”). As a condition to, and in consideration of, the Company’s
willingness to permit the disclosure of Information by the New Mountain Nominee
to you, the Company requires your agreement to the terms and conditions of this
letter agreement (this “Agreement”).

1. As used in this Agreement, the term “Evaluation Material” shall include all
Information, other than Information that may be privileged, obtained in the New
Mountain Nominee’s capacity as a director of the Company, whether (a) prepared
by the Company, its advisors or otherwise or gathered by inspection, (b) in
written, oral, electronic or other form, (c) identified as “confidential” or
otherwise or (d) prepared prior to, on or after the date of this Agreement, that
is furnished to you by or on behalf of the New Mountain Nominee, regardless of
the manner or medium in which such Evaluation Material is furnished, including,
without limitation, all information and documentation that the Company is
obligated to treat as confidential pursuant to any course of dealing or any
agreement to which the Company is a party; all information and documentation
relating to the Company’s financial, tax and accounting matters and other
information regarding business operations and structure, marketing practices and
techniques, business strategies and capabilities, business plans and
relationships with customers, suppliers, principals, employees and others and
any information that is a trade secret within the meaning of applicable trade
secret law; and other documentation and materials prepared by you, containing or
based in whole or in part on any Information furnished by or on behalf of the
New Mountain Nominee. Evaluation Material also shall include (y) any
discussions, negotiations and investigations regarding the Information and
(z) the fact that any particular Evaluation Material has been made available to
you. Evaluation Material does not include information that: (a) is or becomes
generally available to the public other than as a result of disclosure, directly
or indirectly, by you in violation of this Agreement or any other obligation of
secrecy to the Company or another party, (b) becomes available to you on a
non-confidential basis from a source other than the Company or the New Mountain
Nominee; provided, that such source is not known by you (after due inquiry) to
be bound by a confidentiality agreement with or other obligation of secrecy to
the Company or another party, (c) was within your possession and developed by
you prior to it being furnished to you by or on behalf of the New Mountain
Nominee pursuant to Section 2(i)(1) of the Settlement Agreement, provided, that
such source is not known by you (after due inquiry) to be bound by a
confidentiality agreement with or other obligation of secrecy to the Company or
another party and (d) is independently developed by you without any reference
whatsoever to any Evaluation Material or violation of this Agreement or any
other obligation of secrecy to the Company or another party.

2. You shall use the Evaluation Material solely for the purpose of monitoring
the New Mountain Group’s investment in the Company (the “Permitted Purpose”) and
for no other purpose. You shall not, directly or indirectly, at any time
disclose any Evaluation Material to any Person (other than the Company, the New
Mountain Nominee or any member of the New Mountain Investment Group (as defined
in the Settlement Agreement), in each case, if consistent with the Settlement
Agreement) in any manner, or permit or assist any Person (other than the
Company, the New Mountain Nominee or any member of the New Mountain Investment
Group, in each case, if consistent with the Settlement Agreement) to use any
Evaluation Material. The term “Person” shall mean any individual, partnership,
corporation, group, syndicate, trust, government or agency thereof, or any other
association or entity.

3. In the event that you are legally required to disclose any Evaluation
Material, you shall give the Company prompt written notice of such requirement
so that the Company may seek an appropriate protective order or other remedy,
and/or waive compliance with certain provisions of this Agreement, and you shall
cooperate with the Company to obtain such protective order. In the event that
such protective order or other remedy is not obtained or the Company waives
compliance with the relevant provisions of this Agreement, you shall furnish
only that portion of the Evaluation Material that is legally required to be
disclosed and use your reasonable best efforts to obtain assurances that
confidential treatment shall be accorded to such Evaluation Material.

4. At any time upon request by the Company on or after the date on which you
cease to be a member of the New Mountain Investment Group, which shall be no
later than the Termination Date (as defined in the Settlement Agreement), you
shall return to the Company (or destroy, with the written consent of the
Company) within five (5) days after such request, all documents, materials and
other items containing Evaluation Material without retaining any copies,
extracts or other reproductions in whole or in part of such material, and shall
provide a certification in form and substance reasonably satisfactory to the
Company, signed by you, as to the completeness of the return or destruction of
such materials. Upon such request, you also shall destroy all documents,
materials and other items created by you embodying the Evaluation Material in
whatever format, and shall provide a similar certification to the Company as to
the completeness of the destruction of such materials. Compliance with this
paragraph shall not relieve you of your other obligations under this Agreement.

5. [Paragraph 5 for members of the New Mountain Group shall read as follows: You
acknowledge that the Evaluation Material may constitute material non-public
information under applicable federal and state securities laws, and that you
shall not trade on the basis of such information in violation of such laws. You
further acknowledge that you are bound by Section 3 of the Settlement Agreement
as a member of the New Mountain Group, and as a condition to the provision of
any Evaluation Material to you, you agree that you shall be bound by the terms
of Section 3 of the Settlement Agreement as if also set forth herein, mutatis
mutandis.] [Paragraph 5 for non-members of the New Mountain Group shall read as
follows: You acknowledge that the Evaluation Material may constitute material
non-public information under applicable federal and state securities laws, and
that you shall not trade on the basis of such information in violation of such
laws. As a condition to the provision of any Evaluation Material to you, you
agree that, until the Termination Date, without the prior written consent of the
Board of Directors of the Company (the “Board”) specifically expressed in a
written resolution adopted by a majority vote of the entire Board, you shall not
do any of the following:

(a) acquire, offer or propose to acquire, or agree to acquire (except by way of
stock dividends or other distributions or offerings made available to holders of
shares of the Company’s common stock (the “Common Stock”) and any other
securities of the Company entitled to vote in the election of directors, or
securities convertible into, or exercisable or exchangeable for Common Stock or
other securities, whether or not subject to the passage of time or other
contingencies (the Common Stock and such other securities, collectively, the
“Voting Securities”) generally on a pro rata basis, provided that any such
securities so received shall be subject to the provisions hereof), directly or
indirectly, whether by purchase, tender or exchange offer, through the
acquisition of control of another Person, by joining a partnership, limited
partnership, syndicate or other “group” (within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), or
otherwise, any Voting Securities, if after giving effect to such acquisition you
(by yourself or with any other Person with whom you have any agreement,
understanding or arrangement with respect to Voting Securities) would
(1) beneficially own more than [the signatory’s ownership as of date of this
agreement]% of the outstanding Voting Securities or (2) influence or exercise,
directly or indirectly through swap transactions, other hedging transactions or
otherwise, any voting power with respect to more than [the signatory’s ownership
as of date of this agreement]% of the outstanding Voting Securities; provided,
however, that no sales by you shall be required if the increase in the
beneficial ownership of Voting Securities over [the signatory’s ownership as of
date of this agreement]% of the outstanding Voting Securities results
exclusively from a reduction in the number of outstanding Voting Securities by
reason of the Company’s repurchase of its Common Stock; provided, further, that
you acquire any additional Voting Securities following disclosure by the Company
of information indicating that you beneficially own in excess of [the
signatory’s ownership as of date of this agreement]% of the outstanding Voting
Securities (for the purposes of computing your beneficial ownership at the time
of any purchase, the number of outstanding Voting Securities shall be determined
by the latest available Company filing with the United States Securities and
Exchange Commission (the “SEC”));

(b) engage, or in any way participate, directly or indirectly, in any
“solicitation” (as such term is defined in Rule 14a-1(l) promulgated by the SEC
under the Exchange Act) of proxies or consents (whether or not relating to the
election or removal of directors), seek to advise, encourage or influence any
Person with respect to the voting of any Voting Securities; initiate, propose or
otherwise “solicit” (as such term is defined in Rule 14a-1(l) promulgated by the
SEC under the Exchange Act) shareholders of the Company for the approval of
shareholder proposals whether made pursuant to Rule 14a-8 or Rule 14a-4 under
the Exchange Act or otherwise; or induce or attempt to induce any other Person
to initiate any such shareholder proposal; or otherwise communicate to any other
Person how you intend to vote the shares of Voting Stock beneficially owned by
you on any matter put to the shareholders of the Company for their approval;

(c) seek, propose, or make any statements to any Third Party with respect to,
any merger, consolidation, business combination, tender or exchange offer, sale
or purchase of assets, sale or purchase of securities, dissolution, liquidation,
restructuring, recapitalization or similar transactions involving the Company or
any of its controlled Affiliates (as such term is defined in Rule 12b-2 under
the Exchange Act);

(d) form, join or in any way participate in any “group” (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to any Voting Securities;

(e) deposit any Voting Securities in any voting trust or subject any Voting
Securities to any arrangement or agreement with respect to the voting of any
Voting Securities;

(f) otherwise act, alone or in concert with others, to control or seek to
control or influence or seek to influence the management, the Board or policies
of the Company;

(g) seek, alone or in concert with others, (1) to call a meeting of shareholders
or solicit consents from shareholders, (2) to obtain representation on the Board
or (3) to effect the removal of any member of the Board;

(h) seek to amend any provision of the Company’s certificate of incorporation or
by-laws;

(i) submit any demand pursuant to Section 14A:5-28 of the New Jersey Business
Corporation Act;

(j) make any proposal (including to disclose or discuss any proposal with any
Third Party) or enter into any discussion regarding any of the foregoing, or
make any statement or inquiry, or disclose any intention, plan or arrangement
(whether written or oral) inconsistent with the foregoing or any other provision
of this Agreement, in each case, to any Third Party;

(k) have any discussions or communications, or enter into any arrangements,
understanding or agreements (whether written or oral) with, or advise, finance,
assist, induce or knowingly encourage, any Third Party either in connection or
inconsistent with any of the foregoing, or make any investment reasonably
understood to be controlling in or enter into any arrangement in relation to any
of the foregoing with, any Third Party that engages, or offers or proposes to
engage, in any of the foregoing; or

(l) otherwise take or cause any action inconsistent with any of the foregoing.
Notwithstanding anything herein to the contrary, you agree that any suggestions,
recommendations, proposals or other communications made to the Company, the
Board or any director or officer of the Company permitted by any of the
foregoing are subject to the condition that such suggestions, recommendations,
proposals or other communications would not reasonably be expected to require
the Company to make public disclosure thereof.]

6. You acknowledge and agree that the Company: (i) has not made any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material or (ii) shall not have any liability
whatsoever to you relating to or resulting from the use of the Evaluation
Material or any errors therein or omissions therefrom. Neither this Agreement
nor disclosure of any Evaluation Material to you shall be deemed by implication
or otherwise to vest in you rights in or to the Evaluation Material, other than
the right to use such Evaluation Material solely for the Permitted Purpose.

7. You agree that any contacts or communications initiated by you with the
Company as to any Evaluation Material shall be made to the New Mountain Nominee
or the Company’s Chairman of the Board, Chief Executive Officer or Chief
Financial Officer. Accordingly, you agree not to directly or indirectly initiate
contact or communication with any other executive or employee of the Company
concerning Evaluation Material, or to seek any information in connection
therewith from any such Person, without the prior consent of the Company.

8. You acknowledge that the covenants contained in this Agreement are
fundamental for the protection of the Company’s legitimate business and
proprietary interests and that in the event of any violation by you of any such
covenants, the Company’s remedies at law would be inadequate. In the event of
any violation or attempted violation of this Agreement, the Company shall be
entitled to specific performance and injunctive relief or other equitable remedy
without any showing of irreparable harm or damage, and you hereby waive any
requirement for proof of the economic value of any trade secret or the securing
or posting of any bond or other security in connection with any such remedy. You
also agree to indemnify and hold harmless the Company against and to pay to any
loss or expense incurred by the Company by reason of or arising out of any
breach by you of the obligations in this Agreement, including, any costs,
expenses or other liabilities incurred by the Company in connection with the
enforcement of any of its rights or the obligations hereunder. Such remedies
shall not be deemed to be the exclusive remedies for any breach of this
Agreement but will be in addition to all other remedies available at law or in
equity to the Company. Any trade secrets included in the Evaluation Material
will also be entitled to all of the protections and benefits under applicable
trade secret law.

9. This Agreement shall be governed by and construed in accordance with the
substantive laws of the State of New York. If for any reason any court of
competent jurisdiction determines it is impossible to so construe any provision
of this Agreement and holds that provision to be invalid, all other provisions
of this Agreement shall remain in full force and effect. This Agreement was
negotiated by sophisticated parties at arms’ length, and neither party hereto
shall be construed as the drafting party against which the Agreement could be
construed. You hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the courts of the State of New York for any actions,
suits or proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby (and you agree not to commence any action, suit
or proceeding relating thereto except in such courts, and further agree that
service of any process, summons, notice or document by U.S. registered mail to
your address set forth above shall be effective service of process for any
action, suit or proceeding brought against you in any such court). You hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of New York, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.

10. Except as otherwise provided herein, the restrictions and covenants set
forth herein shall terminate and be of no further force or effect upon the
eighteen month anniversary of the date on which you cease to be a member of the
New Mountain Investment Group, which shall be no later than the eighteen month
anniversary of the Termination Date; provided, however, that with respect to
Evaluation Material which constitutes a trade secret under applicable law, your
obligations pursuant to this Agreement shall survive so long as the Evaluation
Material remains a trade secret.

11. This Agreement shall not be assignable by you without the prior written
consent of the Company. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by and against the successors and assigns of each
party to this Agreement.

12. Neither the failure nor any delay by the Company in exercising any right,
power or privilege under this Agreement will operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege hereunder. The
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law. If any
provision of this Agreement is found to violate any statute, regulation, rule,
order or decree of any governmental authority, court, agency or exchange, such
invalidity shall not be deemed to affect any other provision hereof or the
validity of the remainder of this agreement, and such invalid provision shall be
deemed deleted from this Agreement to the minimum extent necessary to cure such
violation.

13. Any amendment or modification of the terms and conditions set forth herein
or any waiver of such terms and conditions must be agreed to in a writing signed
by the Company and you. This Agreement may be executed in counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same agreement. Signatures to this Agreement transmitted by facsimile
transmission, by electronic mail in “portable document format” (“.pdf”) form, or
by any other electronic means intended to preserve the original graphic and
pictorial appearance of a document, will have the same effect as physical
delivery of the paper document bearing the original signature.

14. This Agreement and the provisions of the Settlement Agreement referenced
herein contain the entire agreement and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and thereof.

15. Notwithstanding anything herein to the contrary, you shall permit the New
Mountain Group or any of its members to enforce the provisions of this Agreement
against you, including but not limited to, in any actions, suits or proceedings
in a court of law.

[Remainder of page left intentionally blank]

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Please execute and return one copy of this Agreement, which will constitute your
agreement with respect to the subject matter hereof.

 
Yours truly,

 
NATIONAL FUEL GAS COMPANY
By:
Name:
Title:

Agreed to, confirmed and accepted as
of the date first above written:

[     ]

     

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