Exhibit 10.4



 





Exhibit 10.4




RETIREMENT AND CONSULTING AGREEMENT




     This Retirement and Consulting Agreement (“Agreement”) is entered into by and between Bernard
J. Kennedy, an individual residing at 33 Ruskin Road, Amherst, New York, 14226, (hereinafter
“Kennedy”) and National Fuel Gas Company (“National Fuel”), a New Jersey corporation, on September 5, 2001.
For purposes of this Agreement, as appropriate, the term “National Fuel” refers,
collectively, to National Fuel Gas Company and its subsidiaries and other affiliates.



RECITALS




     WHEREAS, Kennedy is employed by National Fuel pursuant to an employment agreement dated
September 17, 1981, as amended, and currently extended to September 1, 2002 (the “Employment
Agreement”), which affords him the minimum base salary hereinafter set forth, and (during as well
as after the term thereof) participation in all National Fuel benefits, plans and programs
(including improvements therein) on at least a par with other executive officers of National Fuel;



     WHEREAS, Kennedy has agreed to waive his rights to any automatic extension of the term of the
Employment Agreement and to certain payments and benefits to which he otherwise would be entitled
under the Employment Agreement during the usual automatic extension thereof and following
termination of employment;



     WHEREAS, National Fuel wishes to secure for itself the availability of Kennedy so that it
might benefit from Kennedy’s experience, knowledge, talents, reputation and prominence in the
energy industry, and desires that Kennedy continue to advise National Fuel on issues relating to
expansions, mergers, acquisitions, dispositions and other important matters;



     WHEREAS, Kennedy has agreed to cooperate with National Fuel in connection with National Fuel’s
request on the timing of payments under the Executive Retirement Plan, and, in connection
therewith, Kennedy has agreed to certain adjustments in Pension Benefit Guarantee Corporation
rates, and to certain other assumptions and interest rates;



     WHEREAS, Kennedy’s employment at the request of National Fuel with National Fuel after age 65
has reduced the value of benefits he accrued through that date under National Fuel’s pension plans;



     WHEREAS, in lieu of seeking other opportunities, Kennedy has agree to remain available and to
continue to provide services to National Fuel, to serve as a “bridge” in the event his successor
should become incapacitated, and not to compete with National Fuel after the termination of his
employment;



 









 





     WHEREAS, Kennedy recognizes that National Fuel’s business and goodwill are dependent upon
National Fuel’s trade secrets and confidential and proprietary information and that National Fuel
will sustain great loss and damage if Kennedy discloses, utilizes or causes to be disclosed or
utilized National Fuel’s trade secrets and/or confidential and proprietary
information to third parties or for Kennedy’s own benefit, and Kennedy has agreed that he will
not disclose, utilize or cause to be disclosed or utilized any such trade secrets and/or
confidential and proprietary information;



     WHEREAS, Kennedy is not otherwise entitled to the total sums being paid under this Agreement,
except as provided herein;



     NOW, THEREFORE, in consideration of the mutual promises, terms, covenants and conditions
described above and set forth below, the parties to this Agreement agree as follows:



     1.   Effective Date of Agreement. This Agreement shall become effective as of the date first
above written.



     2.   Employment.




	(a)	 	Kennedy shall, and Kennedy agrees to, relinquish his current
position of chief executive officer of National Fuel effective October 1, 2001;
provided, however, National Fuel requests that Kennedy commit to continue to
serve on the Board of Directors of National Fuel (the “Board”) after October 1,
2001. Kennedy agrees to resign as a member of the Board following the first
annual meeting of stockholders following his 72nd birthday consistent with the
director tenure policy to be proposed by Kennedy to the Board at its scheduled
September 13, 2001 meeting.
	 
	(b)	 	Kennedy shall remain an employee of National Fuel and Chairman
of the Board through January 2, 2002 at which time Kennedy will terminate his
employment with National Fuel and relinquish his position as Chairman of the
Board.
	 
	(c)	 	Kennedy shall (i) receive his regular monthly base salary of
$70,679.16, payable by National Fuel and its affiliated corporations in
accordance with their customary practices through January 2, 2002; (ii) remain
a participant in National Fuel’s Annual At Risk Compensation Incentive Program
(the “AARCIP”) through September 30, 2001, and be paid, in a manner consistent
with past practice, during calendar 2001 and as soon as practicable following
the award thereof, a bonus for fiscal 2001 as shall be determined by the
Board’s Compensation Committee; and (iii) for the months of October, November
and December 2001 be paid (in lieu of all other bonuses otherwise available to
him under the Employment Agreement or otherwise) a monthly bonus of
$149,320.84.
	 
	(d)	 	Upon termination of Kennedy’s employment on January 2, 2002,
Kennedy shall, in addition to the payments and benefits provided herein
(including, but not by way of limitation, the benefits provided pursuant to
section 4(c)), be




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	 	 	eligible for and entitled to (i) retiree medical benefit
coverage, subject to the terms and conditions of the respective benefit plan(s)
and/or program(s); (ii) life insurance benefits pursuant to, and as limited by, the
Amended and Restated Split Dollar Insurance Agreement dated August 28, 1991,
as last amended effective as of June 15, 2000 (“Life Insurance Agreement”);
(iii) retirement benefits pursuant to the National Fuel Gas Company
Retirement Plan; (iv) annuity payments pursuant to National Fuel Gas Company
Deferred Compensation Plan (the “DCP”) Cycles I, II-A, III and III-A; (v) a
Distribution of Savings Account pursuant to DCP Cycle V; (vi) “Tophat”
benefits pursuant to the National Fuel Gas Company Top Hat Plan; and (vii)
unexercised stock options and SARs granted under the National Fuel Gas
Company 1997 Award and Option Plan and the predecessors thereof.






	(e)	 	Except insofar as is necessary to accommodate the express
provision of Section 2(a), 2(b) and 2(c) of this Agreement, the Employment
Agreement shall remain in full force and effect through January 2, 2002, at
which time it shall terminate, provided however such termination shall not
limit or impact Kennedy’s receipt of the benefits and entitlements identified
in clauses (i) through (vii) of Section 2(d) of this Agreement which benefits
for purposes of Section 4 of the Pension Settlement Agreement shall be deemed
to be “payable to Kennedy pursuant to the terms of” this Agreement.





     3.   Consulting Services.




	(a)	 	From January 2, 2002 until June 30, 2004 (the “Consulting
Period”), Kennedy shall, subject to the terms and conditions hereof, make
himself available to render consultation services as requested by the Chief
Executive Officer of National Fuel, for which he shall receive a non-refundable
monthly retainer of $20,833.33 payable on or before January 2, 2002, and on the
1st day of each succeeding month during the Consulting Period. The retainer
specified in this section 3(a) shall entitle National Fuel to Kennedy’s
consultation services for up to 48 days during any 16 month period in the
Consulting Period. In the event Kennedy performs consulting services for
National Fuel for more than 48 days during any 16 month period in the
Consulting Period or for more than 4 days during any calendar month during such
period, National Fuel shall, upon receipt of an appropriate invoice, compensate
Kennedy for such additional days at the rate of $3,500 per day. For purposes of
this section 3(a), a “day” of consulting services shall mean any calendar day
or part thereof during which Kennedy renders consulting services (including any
days during which Kennedy is required to travel on consultation related
business).
	 
	(b)	 	As needed during the Consulting Period at the request of the
chief executive officer of National Fuel from time to time (and subject to the
limitations provided in section 3(a) above), Kennedy shall advise and assist
National Fuel concerning mergers and acquisitions, regulatory matters,
marketing and customer relations, business strategy and such other matters as
may arise that 




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	 	 	the Chief Executive Officer of National Fuel determines, from time to time, require Kennedy’s experience and knowledge. In addition,
Kennedy shall represent National Fuel with trade or business associations as
selected by the chief executive officer of National Fuel from time to time.
Service for or in connection with AEGIS, shall not be considered consultation
service for National Fuel for purposes of this Agreement.






	(c)	 	During the Consulting Period, Kennedy shall be an independent
contractor and, as such, shall control the detail, manner and means of
providing consulting services pursuant to this Agreement. Accordingly, Kennedy
shall not be required to work any particular schedule, but shall use his best
efforts to meet National Fuel’s deadlines. Further, Kennedy shall not, within
reason, be required to work at any particular location; however, during the
Consulting Period, National Fuel shall provide reasonable and sufficient
executive office space and executive secretarial assistance, telephone, fax
service, computer, other customary office equipment and support, together with
a garage space and related support when Kennedy’s presence is required at
National Fuel offices. Subject to the approval of the chief executive officer
of National Fuel or his or her designee, and upon receipt of proper
documentation, National Fuel shall reimburse Kennedy for any reasonable
expenses incurred in connection with the performance of consulting services
under this Agreement. Kennedy shall be entitled to utilize first class
commercial air travel, the company plane or jet service, or comparable
facility.






	(d)	 	During the Consulting Period, National Fuel shall provide such
other support and facilities as the chief executive officer of National Fuel
shall decide facilitates Kennedy’s business and industry related exposure and
contacts that Kennedy has cultivated, and will cultivate, for National Fuel.






	(e)	 	In view of the success the Company has enjoyed under his
leadership and the record performance it has achieved in recent years, Kennedy
shall, if requested by the Board during the three years following his
retirement, serve on any committee of the Board established to review any
transaction which, if consummated, would constitute a “Change in Control” under
the National Fuel Gas Company 1997 Award and Option Plan. Such service shall
not reduce, or be considered a part of, the consultation obligation of Section
3(a) or entitle Kennedy to any compensation pursuant to Section 3(a). Upon the
occurrence of any such “Change in Control” transaction prior to January 1, 2005
(or thereafter, if the transaction was publicly announced prior to January 1,
2005), in recognition of the success of Kennedy’s efforts in bringing the
Company to its current position and taking into account the additional value
shareholders receive through consummation of such “Change in Control”
transaction, the Compensation Committee shall consider and recommend to the Board, and the Board shall
make, an award of National Fuel common 




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	 	 	stock to Kennedy in such amount(s), as the Compensation Committee and the Board, respectively, shall equitably
determine in the exercise of their discretion.






	4.	 	Retirement. In addition to the compensation and benefits provided pursuant to
sections 2 and 3 of this Agreement and the compensation and benefits to which Kennedy
is entitled under the terms of National Fuel’s compensation and benefit plans and
policies for directors, Kennedy shall be entitled to the following compensation and
benefits, except as otherwise provided in Section 4(d), upon termination of his
employment by National Fuel:






	(a)	 	Kennedy shall receive such support and benefits provided to a
retired chief executive officer and chairman of the Board, commensurate with
National Fuel’s past practice; as outlined to Kennedy in a letter of even date
herewith from the Chairman of the Board’s Compensation Committee (the “Letter”)
and any other support or benefits as may be approved by National Fuel’s chief
executive officer;






	(b)	 	All of Kennedy’s stock options and SARs, whether granted before
or after the effective date of this Agreement, shall remain exercisable for
their remaining terms (disregarding, for purposes of determining the terms of
such options and SARs, the termination of Kennedy’s employment);






	(c)	 	To the extent not provided under the Company’s retiree welfare
benefits plans and programs (pursuant to Section 2(d) herein), for the rest of
Kennedy’s life, he and, as applicable, his spouse and his daughter Maureen
shall be entitled to all medical, health care and dental benefits under
National Fuel’s medical, health care and dental plans and/or programs as if
Kennedy were still employed, at the same level of benefits and at the same net
dollar cost to Kennedy as is available to all of National Fuel’s senior
executives generally or, if greater, at the same level of benefits and at the
same dollar cost to Kennedy as Kennedy was receiving or was eligible to receive
prior to his retirement on January 2, 2002; provided, however, that if National
Fuel cannot provide such benefits under its existing plan(s) and/or program(s)
because of limitations under applicable law, National Fuel shall provide
equivalent benefits on an individual basis; provided, further, that following
Kennedy’s death, Kennedy’s spouse and his daughter Maureen shall (at their
expense, to the extent not paid for by National Fuel pursuant to National
Fuel’s retiree welfare benefit plan(s) or program(s) pursuant to Section 2(d)
of this Agreement) remain eligible to participate for their lives in the
medical and dental benefit plan(s) and/or program(s) that Kennedy and/or his
spouse and his daughter Maureen were participating in prior to Kennedy’s death;
and






	(d)	 	As consideration for past services, Kennedy’s agreement to
waive the compensation and other benefits he would otherwise be entitled to
receive 




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	 	 	under his Employment Agreement through the remaining term thereof and
Kennedy’s agreement to be bound by the non-competition covenants contained in
section 8 hereof, the following:






	(i)	 	An award effective October 1, 2001 of (or awards
aggregating) 50,000 shares of stock (such number being adjusted to
reflect a stock split, stock dividend or consolidation after the date of
this Agreement, but prior to October 1, 2001).
	 
	(ii)	 	The payments set forth in the Pension Settlement
Agreement by and between National Fuel and Kennedy to be executed
contemporaneously with this Agreement (the “Pension Settlement
Agreement”).






	5.	 	Death or Disability. In the event of Kennedy’s death or total disability prior
to termination during the term of employment described in Section 2(b), National Fuel’s
obligation to pay base salary and any unearned bonuses as described in section 2(c)
shall end with its prorated payment thereof for the pay period during which such death
or disability occurs. In the event of Kennedy’s death or total disability during the
Consulting Period, National Fuel’s obligation to pay the monthly retainer described in
section 3(a) shall end with its payment thereof for the month during which such death
or disability occurs.
	 
	6.	 	Non-Disclosure Agreement.






	(a)	 	As part of the consideration for the compensation provided in
this Agreement and for the other covenants made by National Fuel in this
Agreement, Kennedy shall hold in a fiduciary capacity, for the benefit of
National Fuel, all of National Fuel’s trade secrets and confidential and
proprietary information. Kennedy shall not, without the prior written consent
of National Fuel, at any time following the termination of Kennedy’s employment
with National Fuel, utilize, communicate or divulge to anyone other than
National Fuel or those designated by it any of National Fuel’s trade secrets or
confidential and proprietary information. Kennedy shall provide National Fuel
with prompt notice of any subsequent employment, including, but not limited to,
the name and address of any subsequent employer and the title and duties of
Kennedy’s position therewith so that National Fuel can take whatever steps it
deems appropriate in order to protect its interests under this Agreement.
Kennedy understands that, under appropriate circumstances, National Fuel can
sue Kennedy and/or any of Kennedy’s future employers for tortious interference
with National Fuel’s contracts, interference with National Fuel’s prospective
business relations, and/or misappropriation of National Fuel’s trade secrets or
confidential and proprietary information. Except with
respect to the monthly retainer described in section 3(a), in no event shall
an asserted violation of the provisions of this section 6 constitute 




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	 	 	a basis for deferring or withholding any amounts otherwise payable or provided to
Kennedy under this Agreement or the Pension Settlement Agreement.






	(b)	 	The prohibition against Kennedy’s use of National Fuel’s trade
secrets and confidential and proprietary information, other than for the
benefit of National Fuel, includes, but is not limited to, (i) the exploitation
of any products or services that embody or are derived from National Fuel’s
trade secrets or confidential and proprietary information, and (ii) the
exercise of judgment or the performance of analysis based upon knowledge of
National Fuel’s trade secrets and confidential and proprietary information.
Kennedy represents, warrants and agrees that he has no proprietary or ownership
rights or title to any of National Fuel’s trade secrets or confidential and
proprietary information and no legal right to use, disclose, disseminate, or
publish any of National Fuel’s trade secrets or confidential and proprietary
information in any locality.






	7.	 	Definition of Confidential Material. National Fuel’s “trade secrets” and
“confidential and proprietary information” include, but are not limited to, any and all
memoranda, software, data bases, computer programs, interface systems, pricing and
client information, and records pertaining to National Fuel’s methods or practices of
doing business and marketing its services and products, whether or not developed or
prepared by Kennedy during the term of his employment with National Fuel or in
connection with his providing consulting service to National Fuel. National Fuel’s
trade secrets and confidential and proprietary information also include “writing” or
“writings,” which shall mean and include all works, expressed in words, numbers or
other verbal or numerical symbols, regardless of the physical manner in which they are
embodied, including, but not limited to, books, articles, manuscripts, memoranda,
computer programs, computer software systems, maps, charts, diagrams, technical
drawings, manuals, video and audio tape recordings, and photographs, whether or not
developed or prepared by Kennedy during the term of his employment with National Fuel
or in connection with his providing consulting services to National Fuel. National
Fuel’s trade secrets and confidential and proprietary information shall include any
information or material not generally known to the public (other than by act of Kennedy
or his representatives in breach of this Agreement) which gives the holder thereof an
opportunity to obtain an advantage over competitors without knowledge of such
information, as well as any information received from third parties under confidential
conditions and information subject to National Fuel’s attorney-client or work-product
privilege, the use or disclosure of which might reasonably be construed to be contrary
to National Fuel’s interests.
	 
	8.	 	Non-Compete Covenants.






	(a)	 	In order to protect and safeguard National Fuel’s trade secrets
and confidential and proprietary information, and also National Fuel’s goodwill




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	 	 	with its customers, during the period beginning on the date of this Agreement
and ending January 2, 2005, Kennedy will not, within any state in which
National Fuel does business at any time during such period, directly or
indirectly and without the prior written consent of National Fuel engage in or
be interested in (as owner, partner, shareholder, employee, director, agent,
consultant or otherwise), any business that is a competitor of National Fuel,
as hereafter defined, or any business that is such a customer. For purposes of
this Agreement, a “competitor” of National Fuel is any entity including,
without limitation, a corporation, sole proprietorship, partnership, joint
venture, syndicate, trust or any other form of organization or parent,
subsidiary or division of any of the foregoing, which, during such period or
the immediately preceding fiscal year of such entity, was engaged in (i) the
exploration for or production, transportation, purchase, brokering, marketing,
distribution or trading of natural gas or other energy products or services or
(ii) the timber business.






	(b)	 	Anything contained herein to the contrary notwithstanding,
nothing in section 8(a) shall be interpreted to prohibit (i) Kennedy’s present
or future investments in the securities of competing companies listed on a
national securities exchange or traded on the over-the-counter market to the
extent such investments do not exceed 5% of the total outstanding shares of
such company, (ii) Kennedy’s employment with a competitor of National Fuel
provided such employment is limited to areas unrelated to the exploration for
or production, transportation, purchase, brokering, marketing, distribution or
trading of natural gas or other energy products or services or the timber
business, (iii) continuation of business and professional relationships with
the entities identified on Exhibit A to the Employment Agreement, or (iv)
Kennedy’s engagement in or interest in any business after obtaining the prior
written consent of National Fuel.
	 
	(c)	 	For the period beginning on the date hereof and ending on
January 2, 2004 (the second anniversary of Kennedy’s retirement on January 2,
2002), Kennedy shall not induce or otherwise entice any employee of National
Fuel to leave National Fuel, nor shall Kennedy attempt to hire any of National
Fuel’s employees.
	 
	(d)	 	The foregoing restrictions contain reasonable limitations as to
the time, geographic area, and scope of activity to be restrained and these
restrictions do not impose any greater restraint than is necessary to protect
the goodwill and other legitimate business interests of National Fuel. If and
to the extent a court of competent jurisdiction finds one or more restriction
contained in this section 8 to be unreasonable in terms of geographic scope,
time limitation, or otherwise, the restriction(s) found to be unreasonable
shall be deemed modified to the extent necessary so that the provisions of this
section 8 are enforceable to the greatest extent possible.




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	9.	 	Obligations, Enforcement. Except as otherwise provided in section 6 of this
Agreement, National Fuel’s obligation to make the payments provided for in this
Agreement or the Pension Settlement Agreement shall not be affected by any set-off,
counter-claim, recoupment, defense or other claim, right or action National Fuel may
have against Kennedy or others. In no event shall Kennedy be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to him
under any of the provisions of this Agreement. National Fuel shall pay, or on an
ongoing basis promptly reimburse Kennedy, for all legal fees and expenses reasonably
incurred by Kennedy in connection with Kennedy’s enforcement of his rights under this
Agreement.
	 
	10.	 	Binding Consideration. Kennedy understands, represents, warrants and agrees
that National Fuel has no contractual obligation or legal duty to pay Kennedy severance
compensation or wages in lieu of notice of termination.
	 
	11.	 	Binding Agreement. This Agreement is and shall be binding upon and inure to
the benefit of the parties hereto and their respective successors (including any and
all successors of National Fuel or to all or substantially all of its assets, whether
by way of merger, acquisition, consolidation, share exchange or other business
combination), heirs, executors, administrators and assigns. Kennedy represents,
warrants and agrees that he has read, understands and intends to be bound by this
Agreement and its recitals, terms, conditions and representations.
	 
	12.	 	Miscellaneous.






	(a)	 	This Agreement, the Pension Settlement Agreement and the Letter
(the “Documents”) contain and state the entire agreement of the parties hereto
with respect to the subject matters of the Documents and, except as otherwise
expressly provided in the Documents, supersede and cancel all prior written and
oral agreements and understandings with respect to the subject matter of the
Documents; provided, however, that notwithstanding the foregoing, this
Agreement shall have no effect upon (i) the Employment Agreement, prior to its
termination on January 2, 2002 except as insofar as is necessary to accommodate
the express provision of Sections 2(a), 2(b) and 2(c) of this Agreement, and
(ii) Kennedy’s rights under the Life Insurance Agreement. Except for awards or
payouts to be made prior to Kennedy’s termination of employment as provided
herein, no payments shall be made after January 31, 2002, hereunder unless and
until the release required in Section 8 of the Pension Settlement Agreement is
received by National Fuel and may not be revoked by Kennedy.






	(b)	 	The term “affiliate” as used in this Agreement with respect to
a party, means any individual or entity that owns or controls, is owned or
controlled by, or is under common ownership or control with, such party.




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	(c)	 	All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
	 
	 	 	If to Kennedy:

Bernard J. Kennedy

33 Ruskin Road

Amherst, New York 14226

	 
	 	 	If to National Fuel:

National Fuel Gas Company

10 Lafayette Square

Buffalo, New York 14203

Attention: Corporate Secretary

	 
	 	 	or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee
	 
	(d)	 	This Agreement shall be governed by the laws of the State of
New York and may be amended or modified only by written agreement signed by
both parties.
	 
	(e)	 	Notwithstanding any other provision of this Agreement, National
Fuel may withhold from amounts payable under this Agreement all federal, state,
local and foreign taxes that are required to be withheld by applicable laws or
regulations; provided, however, without prior approval of Kennedy, shall not
withhold more than the minimum amount National Fuel reasonably determines is
required to be withheld under such laws or regulations.
	 
	(f)	 	The obligations of Kennedy hereunder are personal and cannot be
assigned.
	 
	(g)	 	If any term or other provision of this Agreement shall be
declared to be invalid, illegal, or incapable of being enforced by any rule of
law or public policy, all other terms, provisions and conditions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party to this Agreement. Upon
any binding determination that any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties to this Agreement as closely as possible in an
acceptable and legally enforceable manner, to the end that the transactions
contemplated hereby may be effected to the full extent possible.





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	(h)	 	The headings in this Agreement are not part of the provisions
hereof and shall have no force or effect.
	 
	(i)	 	Except as otherwise provided herein, this Agreement shall
terminate upon satisfaction of each party’s obligations hereunder.





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



	 	 	 	 	 
	BERNARD J. KENNEDY

	 	NATIONAL FUEL GAS COMPANY
	 
	 	 	 	 
	/s/ Bernard J. Kennedy


	 	By:
	 	/s/ G. L. Mazanec

	 
	 	 	 	 
	 	 	
 
	

	 	Its:
	 	Chairman of the Compensation Committee of
the Board of Directors








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The following page is the letter referenced in Section 4(a) of the

Retirement and Consulting Agreement, dated September 5, 2001,

between National Fuel Gas Company and Bernard J. Kennedy














 








GEORGE L. MAZANEC

302 Fall River Court

Houston, TX 77024

713-627-4623




Bernard J. Kennedy

National Fuel Gas Company

10 LaFayette Square

Buffalo, NY 14203



Dear Bernie:




     In connection with your proposed retirement, you have asked for National Fuel Gas Company’s
(“National Fuel”) current policy and past practice regarding provision of support and benefits to a
retired CEO and Chairman of the Board.



     For a period of five years beginning on the date of your termination of employment with
National Fuel, and such additional period as determined in the sole discretion of National Fuel’s
CEO, that support and benefits include the following:




	1.	 	Exclusive use of an executive office in National Fuel’s headquarters office
building, or such other location as the parties may mutually agree upon, including an
executive secretary, telephone, fax service, computer, and other customary office
equipment and support, together with a garage space and related support.
	 
	2.	 	Continued provision of tax consultation, planning and preparation assistance,
paid for by National Fuel under the same terms and conditions as received prior to
retirement.
	 
	3.	 	Reimbursement for relocation-related expenses and other relocation benefits
pursuant to National Fuel’s relocation policy for executive officers.





     In addition, since it is proposed that you will provide consulting services following
retirement, National Fuel will continue to provide during the consulting period payment for
business club dues and related expenses at certain clubs to which the executive was a member prior
to retirement and with respect to which the executive’s continued membership in, and attendance at
functions of, such clubs would be a continuing benefit to National Fuel.



	 	 	 
	

	 	Very truly yours,

	 
	 	 
	

	 	/s/ George L. Mazanec
	

	 	George L. Mazanec
	

	 	Chairman of the Compensation Committee

of the Board of Directors of National Fuel
Gas Company
	

	 	Dated: September 5, 2001








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