Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT dated as of February 1, 2012, by and between PIEDMONT
NATURAL GAS COMPANY, INC., a North Carolina corporation (the “Corporation”),
and, VICTOR M. GAGLIO, (the “Officer”).

WITNESSETH:

WHEREAS, the Board of Directors of the Corporation has determined that the
continued retention of the services of the Officer on a long-term basis as
described herein is in the best interest of the Corporation in that (a) it
promotes the stability of senior management of the Corporation; (b) it enables
the Corporation to obtain and retain the services of a well-qualified executive
officer with extensive contacts in the natural gas industry; and (c) it secures
the continued services of the Officer notwithstanding any change in control of
the Corporation; and

WHEREAS, the services of the Officer, his experience and knowledge of the
Corporation’s industry, and his reputation and contacts in the Corporation’s
industry are valuable to the Corporation; and

WHEREAS, the Corporation considers the establishment and maintenance of a sound
and vital management to be part of its overall corporate strategy and to be
essential to protecting and enhancing the best interests of the Corporation and
its stockholders; and

WHEREAS, the parties desire to enter into this Agreement in order to clearly set
forth the terms and conditions of the Officer’s employment relationship with the
Corporation; and

WHEREAS, contemporaneous with this Agreement, the parties have entered into a
Severance Agreement (the “Severance Agreement”), which sets forth certain rights
and obligations of the Officer and certain rights and obligations of the
Corporation in the event of a “Potential Change of Control” (as defined in the
Severance Agreement) or following a “Change in Control” (as defined in the
Severance Agreement). Use of the phrases “Potential Change of Control” and
“Change in Control” herein shall have the meanings ascribed to those phrases in
the Severance Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereby agree as follows:

1. Employment. The Corporation hereby employs the Officer and the Officer hereby
accepts such employment, upon the terms and conditions stated herein, as Senior
Vice President – Chief Utility Operations Officer of the Corporation. The
Officer shall render such administrative and management services to the
Corporation as are customarily performed by persons situated in a similar
executive capacity. The Officer shall promote the business of the Corporation
and perform such other duties as shall from time to time be reasonably
prescribed by the Directors or the Chief Executive Officer of the Corporation.
It is understood that the Officer’s continued election as an

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officer of the Corporation is dependent upon action by the Board of Directors of
the Corporation from time to time and that, subject to the provisions of
Section 7 of this Agreement, the Officer’s title and/or duties may change from
time to time; provided that following a Change in Control and during the term of
the Severance Agreement any action affecting a change in title and/or duties
shall be subject to the Severance Agreement.

2. Base Salary. The Corporation shall pay the Officer during the term of this
Agreement as compensation for all services rendered by him to the Corporation a
base salary in such amounts and at such intervals as shall be commensurate with
his duties and responsibilities hereunder. Initially such base salary shall be
at the rate of $310,000 per year. The Officer’s base salary may be increased
from time to time to reflect the duties required of the Officer. In reviewing
the Officer’s base salary, the Board of Directors of the Corporation shall
consider the overall performance of the Corporation, the overall performance of
the Officer and the service of the Officer rendered to the Corporation and its
subsidiaries and changes in the cost of living. The Board of Directors may also
provide for performance or merit increases. Participation by Officer in any
incentive, deferred compensation, stock option, stock purchase, bonus, pension,
life insurance or other employee benefit plans which may be offered by the
Corporation from time to time and participation in any fringe benefits provided
by the Corporation shall not cause a reduction of the base salary payable to the
Officer. The Officer will be entitled to such customary fringe benefits,
vacation and sick leave as are consistent with the normal practices and
established policies of the Corporation.

3. Participation in Incentive, Retirement and Employee Benefit Plans; Fringe
Benefits. The Officer shall be entitled to participate in any plan relating to
incentive compensation, stock options, stock purchase, pension, thrift, profit
sharing, group life insurance, medical coverage, disability coverage, education,
or other retirement or employee benefits that the Corporation has adopted, or
may from time to time adopt, for the benefit of its executive employees and for
employees generally, subject to the eligibility rules of such plans.

The Officer shall also be entitled to participate in any other fringe benefits
which are now or may be or become applicable to the Corporation’s executive
employees, including the payment of reasonable expenses for attending annual and
periodic meetings of trade associations, and any other benefits which are
commensurate with the duties and responsibilities to be performed by the Officer
under this Agreement. Additionally, the Officer shall be entitled to such
vacation and sick leave as shall be established under uniform employee policies
promulgated by the Board of Directors. The Corporation shall reimburse the
Officer for all out-of-pocket reasonable and necessary business expenses which
the Officer may incur in connection with his service on behalf of the
Corporation.

4. Term. The initial term of employment under this Agreement shall be for a
one-year period commencing February 1, 2012; provided that this Agreement shall
automatically be extended to a full one-year period on each successive day
during the term of this Agreement. The effect hereof shall be that the Agreement
shall at all times remain subject to a term of one year, unless (i) written
notice has been given that the Agreement shall not be extended as provided in
this Section 4, or (ii) the Agreement is terminated pursuant to Section 7. If
written notice from the Corporation or the Officer is delivered to the other
party advising the other party that this Agreement is not to be further
extended, then upon such notice, the Agreement shall terminate on the
anniversary of the

 

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date of notice. Provided, further, no extension shall cause this Agreement to
extend beyond the date on which the Officer reaches 65 years of age. Upon any
extension, the base salary of the extended agreement shall be the base salary in
effect on the effective date of such extension.

5. Loyalty; Noncompetition

(a) The Officer shall devote his best efforts to the performance of his duties
and responsibilities under this Agreement.

(b) During the term of this Agreement, or any renewals hereof, the Officer
agrees he will not own, manage, operate, join, control or participate in the
management, operation or control of, or be employed by or connected in any
manner with any business which competes with the Corporation or any of its
subsidiary corporations without the prior written consent of the Corporation.
Notwithstanding the foregoing, the Officer shall be free, without such consent,
to purchase or hold as an investment or otherwise, up to five percent of the
outstanding stock or other securities of any corporation which has its
securities publicly traded on any recognized securities exchange or in any
established over-the-counter market.

The Officer shall hold in confidence all knowledge or information of a
confidential nature with respect to the business of the Corporation or any
subsidiary of the Corporation received by him during the term of this Agreement
and will not disclose or make use of such information without the prior written
consent of the Corporation.

The Officer acknowledges that it would not be possible to ascertain the amount
of monetary damages in the event of a breach by the Officer under the provisions
of this Section 5 and agrees that, in the event of a breach of this Section,
injunctive relief enforcing the terms of this Section is an appropriate remedy.

6. Standards. The Officer shall perform his duties and responsibilities under
this Agreement in accordance with such reasonable standards expected of
employees with comparable positions in comparable organizations and as may be
established from time to time by the Board of Directors. The Corporation will
provide the Officer with the working facilities and staff customary for similar
executives and necessary for him to perform his duties.

7. Termination and Termination Pay.

(a) Change of Control. Following a Change in Control and during the term of the
Severance Agreement, this Agreement shall become null and void except with
respect to any rights or obligations accruing prior to the Change in Control and
the rights and obligations of the Officer and the Company, including any
termination of the Officer, shall be subject to the provisions of the Severance
Agreement.

(b) By Death. The Officer’s employment under this Agreement shall be terminated
upon the death of the Officer during the term of this Agreement, in which event
the Officer’s estate shall be entitled to receive all compensation due the
Officer through the last day of the calendar month in which his death shall have
occurred.

 

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(c) By Total Disability. Except for that period of time following a Change in
Control and during the term of the Severance Agreement, the Officer’s employment
under this Agreement shall be terminated upon the total permanent disability of
the Officer during the term of this Agreement, in which event the Officer shall
receive all compensation, including bonuses, through the date of determination
of such disability and for a period of 90 days thereafter. For purposes of this
Section, the Officer shall be deemed to have suffered permanent disability upon
the determination of such status by the United States Social Security
Administration or a certification to such effect by the Officer’s regular
physician.

(d) By Officer. Except as provided in Section 4 of the Severance Agreement, the
Officer’s employment under this Agreement may be terminated at any time by the
Officer upon 60 days’ written notice to the Board of Directors. Upon such
termination, the Officer shall be entitled to receive all compensation,
including bonuses, through the effective date of such termination.

(e) By Corporation. Except for that period of time following a Change of Control
and during the term of the Severance Agreement, the Board of Directors may
terminate the Officer’s employment at any time, but any such termination by the
Board of Directors, other than termination for cause, shall not prejudice the
Officer’s right to continue to receive payment of all compensation and the
continuance of benefits for a period of 12 months from the effective date of
termination or until such time as the Officer reaches 65 years of age (whichever
is less). The Officer shall have no right to receive compensation or other
benefits (other than vested benefits) for any period after “termination for
cause.” Termination for cause shall mean termination because of the Officer’s
personal dishonesty, incompetence, willful material misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful material violation of a law, rule or regulation (other than
traffic or traffic-related violations or similar offenses) or final
cease-and-desist order, or material breach of any provisions of this Agreement.

(f) Costs and Expenses. In the event any dispute shall arise between the Officer
and the Corporation as to the terms or interpretation of this Agreement,
including this Section 7, whether instituted by formal legal proceedings or
otherwise, including any action taken by Officer to enforce the terms of this
Section 7 or in defending against any action taken by the Corporation, the
Corporation shall reimburse the Officer for all costs and expenses, proceedings
or actions in the event the Officer prevails in any such action.

8. Successors and Assigns.

(a) This Employment Agreement shall inure to the benefit of and be binding upon
any corporate or other successor of the Corporation that shall acquire, directly
or indirectly, by conversion, merger, consolidation, purchase or otherwise, all
or substantially all of the assets of the Corporation.

(b) Since the Corporation is contracting for the unique and personal skills of
the Officer, the Officer shall be precluded from assigning or delegating his
rights or duties hereunder without first obtaining the written consent of the
Corporation.

 

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9. Code Section 409A.

(a) Delay of Certain Payments. Notwithstanding anything in this Agreement to the
contrary, if any amount or benefit that the Company determines would constitute
non-exempt “deferred compensation” for purposes of Section 409A of the Internal
Revenue Code of 1986 (the “Code”) would otherwise be payable or distributable
under this Agreement by reason of the Officer’s termination of employment, then
to the extent necessary to comply with Code Section 409A:

(i) if the payment or distribution is payable in a lump sum, the Officer’s right
to receive payment or distribution of such non-exempt deferred compensation will
be delayed until the earlier of the Officer’s death or the seventh month
following the Officer’s termination of employment; and

(ii) if the payment or distribution is payable over time, the amount of such
non-exempt deferred compensation that would otherwise be payable during the six
(6) month period immediately following the Officer’s termination of employment
will be accumulated and the Officer’s right to receive payment or distribution
of such accumulated amount will be delayed until the earlier of the Officer’s
death or the seventh month following the Officer’s termination of employment and
paid on the earlier of such dates, without interest, and the normal payment or
distribution schedule for any remaining payments or distributions will commence.

(b) Expense Reimbursements. To the extent any expense reimbursement or in-kind
benefit to which the Officer is or may be entitled to receive under this
Agreement constitutes non-exempt “deferred compensation” for purposes of
Section 409A of the Code, then (i) such reimbursement shall be paid to the
Officer as soon as administratively practicable after the Officer submits a
valid claim for reimbursement, but in no event later than the last day of the
Officer’s taxable year following the taxable year in which the expense was
incurred, (ii) the amount of expenses eligible for reimbursement, or in-kind
benefits provided, during any taxable year of the Officer shall not affect the
expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other taxable year of the Officer, and (iii) the Officer’s right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.

10. Modification; Waiver; Amendments. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing, signed by the Officer and on behalf of the Corporation by
such officer as may be specifically designated by the Board of Directors. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No amendments or additions to this Agreement shall be binding unless in
writing and signed by both parties, except as herein otherwise provided. Any
modification, waiver or amendment shall be made consistent with the terms and
conditions of the Severance Agreement.

 

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11. Applicable Law. This Agreement shall be governed in all respects whether as
to validity, construction, capacity, performance or otherwise, by the laws of
North Carolina.

12. Severability. The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first hereinabove written.

 

   CORPORATION: ATTEST:    Piedmont Natural Gas Company, Inc.

/s/ Judy Z. Mayo

      Assistant Secretary          By:   

/s/ Thomas E. Skains

      Thomas E. Skains       President and Chief Executive Officer    OFFICER:
   By:   

/s/ Victor M. Gaglio

      Victor M. Gaglio

 

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