PENNSYLVANIA ENTERPRISES, INC.

                  1995 DIRECTORS' STOCK COMPENSATION PLAN

         (Amended and Restated Effective as of November 19, 1997)


1. Purpose

     The purpose of the Pennsylvania Enterprises, Inc. Stock Compensation
Plan for Directors (the "Plan") is to advance the interests of Pennsylvania
Enterprises, Inc. and its shareholders by providing an additional means to
attract and retain persons of exceptional ability to serve as Directors, by
providing an additional incentive to such persons for superior performance,
and more closely aligning their interests with those of other shareholders.
This Plan shall be interpreted and implemented in a manner so that awards
of shares of Common Stock to Directors will be exempt under Rule 16b-3 of
the Exchange Act, as such Rule and the Exchange Act may from time to time
be amended.

2.  Definitions

     Unless the context clearly indicates otherwise, the following terms
when used in this Plan shall have the meanings set forth in this section:

        a.  "Board of Directors" shall mean the Board of Directors of the
            Company.

        b.  "Company" shall mean Pennsylvania Enterprises, Inc., a
            Pennsylvania corporation, or its successor.

        c.  "Exchange Act" shall mean the Securities Exchange Act of 1934,
            as amended.

        d.  "Eligible Director" shall mean any member of the Board of
            Directors who is not also a full-time employee of the Company
            or of any of its affiliates.

        e.  "Common Stock" shall mean shares of common stock of the
            Company, no par value, stated value $5 per share.

3.  Shares of Common Stock to be Awarded Under the Plan

     Common Stock awarded pursuant to the Plan may be shares of the
Corporation's authorized but unissued Common Stock or may be shares of
Common Stock reacquired by the Company and held in treasury.

4.  Eligibility

     Only Directors who are not full-time employees of the Company or any
of its affiliates shall be eligible to receive awards of shares of Common
Stock under this Plan.
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5.  Awards of Shares of Common Stock

        a.  Each year, at the organizational meeting of the Board of
            Directors held immediately following the annual meeting of
            shareholders, 400 shares of Common Stock shall automatically be
            awarded to each person who is a continuing Eligible Director
            and has completed at least one year of service, for his or her
            services as a Director, being in addition to any retainer,
            attendance or other fees or expenses.

        b.  If, prior to the beginning of the calendar year, the Director
            has elected to defer receipt of the shares of Common Stock
            until his or her termination of service as a Director, the
            number of shares set forth above shall not be delivered as
            provided in this Plan, but shall instead be credited to the
            Director's account under the Director Deferred Compensation
            Plan in the form of Stock Units, which thereafter shall be
            subject to the terms of such Director Deferred Compensation
            Plan.

        c.  If, prior to the beginning of the calendar year, the Director
            has not made an election to defer receipt of the shares of
            Common Stock, the Company shall deliver to the Director stock
            certificates for such shares as soon as practicable after the
            meeting of the Board of Directors referred to in paragraph 5.a.
            Such shares shall thereafter be subject to the terms of this
            Plan.

6.  Adjustments

     In the event of any reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation, issuance of
rights or any other change in the capital structure of the Company, the
number and kind of shares of Common Stock or other securities or property
to be awarded hereunder shall be equitably adjusted to reflect the
occurrence of such event; provided, however, that no adjustment shall be
made except as shall be necessary to preserve, rather than enlarge, the
value of future awards under the Plan.

7.  General Provisions

        a.  No Eligible Director or other person claiming under or through
            an Eligible Director shall have any right, title or interest by
            reason of the Plan to any particular assets of the Company.
            The Company shall not be required to establish any fund or make
            any other segregation of assets to assure the award of shares
            of Common Stock hereunder.

        b.  All shares awarded under the Plan are non-forfeitable but are
            non-transferable for a period of three (3) years following the
            applicable award date, except that shares shall become
            immediately transferable in the case of death, disability, or
            retirement from the Board on or after age 65 [or in the event
            of a Change of Control as such term is defined in the Director
            Deferred Compensation Plan].
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        c.  No right under this Plan shall be transferable or otherwise
            subject to anticipation, sale, assignment, pledge, encumbrance
            or charge.

        d.  Notwithstanding any other provision of this Plan, the Company
            shall not be required to award or deliver any certificate for
            shares of Common Stock under this Plan prior to fulfillment of
            all of the following conditions:

            1. Any required listing or approval or notice of issuance of
               such shares on any securities exchange on which the Common
               Stock may then be traded;

            2. Any registration or other qualification of such shares under
               any state or federal law or regulation or other
               qualification which the Board of Directors shall upon the
               advice of counsel deem necessary or advisable; or

            3. The obtaining of any other required consent or approval or
               permit from any state or federal government agency.

        e.  In no event shall the Company be required to issue a fractional
            share hereunder.

        f.  The issuance of shares of Common Stock under the Plan shall be
            subject to any applicable taxes or other laws or regulations of
            the United States of America and any state or local authority
            having jurisdiction thereover.

8.  Effective Date; Termination and Amendment

        a.  The Plan shall be effective as of January 18, 1995, the date of
            its approval by the Board of Directors; provided, however, that
            awards shall not be made under the Plan prior to its approval
            by the affirmative votes of the holders of the majority of the
            Company's Common Stock present, or represented, and entitled to
            vote on the Plan, at a duly constituted meeting of the
            shareholders of the Company.  The Plan as amended and restated
            shall be effective as of November 19, 1997.

        b.  The Plan shall terminate on January 18, 2005.  The Board of
            Directors may also terminate the Plan or make such
            modifications or amendments to the Plan as it may deem
            advisable; provided, however, that the Board of Directors may
            not amend the Plan without shareholder approval by the
            affirmative votes of the holders of the majority of the
            Company's Common Stock present, or represented, and entitled to
            vote on the Plan, at a duly constituted meeting of the
            shareholders of the Company for any of the following purposes:

               (i)   increase the number of shares of Common Stock which
                     may be awarded annually to each Eligible Director
                     under the Plan;

               (ii)  extend the term of the Plan;
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               (iii) modify the requirements as to eligibility to receive
                     awards of shares of Common Stock under the Plan; 

               (iv)  make any other amendment to the Plan for which
                     approval by the shareholders of the Company is
                     required by any law, rule or stock exchange
                     requirement.

IN WITNESS WHEREOF, this Plan has been duly executed by an authorized
officer of the Company on this        day of                     , 1997.





                                     PENNSYLVANIA ENTERPRISES, INC.




                                            /s/Thomas F. Karam            
                                               Thomas F. Karam
                                     President and Chief Executive Officer
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