January 27, 2004

Mr.Craig G. Matthews132Canterbury WayBaskingRidge, NJ 07920

DearCraig:

Weare pleased to confirm our offer of employment to you as President and ChiefExecutive Officer of NUI Corporation ("NUI"). You will also beappointed a director of NUI and a director of NUI Utilities Inc. Your primaryreporting relationship will be with the Chairman of the Board of Directors ofNUI (the "Board"). The purpose of this letter is to set forth ourunderstanding of the terms of your employment.
    - Your start date will be     February 1, 2004.
    - Your annual base salary     will be $550,000, payable in accordance with NUI's payroll practices.
    - In the event of a Sale     of NUI (as hereinafter defined), NUI will pay to you an amount equal to     $550,000 provided that you have been continuously employed by NUI through     the date of such Sale of NUI (except as otherwise provided in paragraph 6     hereof). Such amount shall be paid to you in a lump-sum, in cash, promptly     following such Sale of NUI. For purposes of this letter agreement,     "Sale of NUI" means any transaction or series of related     transactions approved by the Board pursuant to which an unaffiliated third     party (or a group of...unaffiliated third parties acting together)     acquires (a) common shares of NUI constituting a majority of the issued     and outstanding common shares of NUI (whether by merger, consolidation,     sale or transfer of NUI's outstanding interests or otherwise) or (b) all     or substantially all of NUI's consolidated assets.
    - As an NUI employee, you     will be eligible to participate in the employee benefit plans and programs     made available from time to time for NUI's other senior executive officers     (including, without limitation, life insurance benefits); provided,     however, that (a) you will not be eligible to participate in any bonus or     incentive compensation (including, without limitation, any stock-based     compensation) or severance plan, program or policy of NUT, and (b) you     will not participate in NUI's employee or retiree health plans. Without     limiting the foregoing, while you are employed by NUI, NUT will (i)     provide you with an executive assistant, (ii) provide you with a personal     computer for use in the performance of your duties on behalf of NUI and     pay or reimburse you for cellular telephone charges incurred in the     performance of such duties and (iii) pay or reimburse you for all     reasonable out-of-pocket expenses incurred by you for the use of your     automobile in the performance of your duties on behalf of NUI, in each     case, in accordance with NUI's policies.... During your employment with     NUI, you will be entitled to six weeks' paid vacation per year in     accordance with NUI's vacation policies.
    - NUI will indemnify you     for any liability you incur arising from your actions within the scope and     course of your employment with NUI or service as a director of NUI in     accordance with NUI's Amended and Restated Certificate of Incorporation.     During your employment with NUI and while potential liability exists     thereafter, NUI will maintain a directors' and officers' liability     insurance policy covering you in the same amount and to the same extent as     NUI covers its other officers and directors. 
    - Your employment with     NUI is for no fixed term, and either you or NUI may terminate your     employment at any time for any reason or no reason upon at least     forty-five days prior written notice to the other party; provided,     however, that no such notice shall be required upon termination of your     employment by NUI for cause (as determined in the good faith judgment of     the Board). If NUI terminates your employment prior to a Sale of NUI     without cause (as determined in the good faith judgment of the Board), and     not because of your death or incapacity due to physical or mental illness     (as determined in the good faith judgment of the Board), and a Sale of NUI     occurs within twelve months following such termination, you will be     entitled to receive the payment set forth in paragraph 3 hereof following     such Sale of NUI. You will not be entitled to any severance, termination     pay, salary continuation or similar compensation or benefits upon or after     termination of your employment with NUI.
    - This letter agreement,     together with the agreements described in the last paragraph hereof,     constitutes the entire agreement between you and NUI with respect to the     subject matter hereof, supersedes any prior agreements and undertakings,     both written and oral, and may not be modified or amended in any way     except in writing by you and NUT. The validity, interpretation,     construction and performance of this letter agreement shall be governed by     the substantive laws of the State of New Jersey. Any dispute or     controversy arising under or in connection with this letter agreement     shall be settled exclusively by arbitration in the State of New Jersey in     accordance with the rules of the American Arbitration Association then in     effect, and judgment may be entered on the arbitrator's award in any court     of competent jurisdiction.  All     amounts payable hereunder shall be subject to the withholding of all     applicable taxes and deductions required by any applicable law.

Pleaseunderstand that the terms and conditions of your employment by NUI are governedby standard company policies. Among other things, this means that uponcommencing employment with NUI, if requested by NUI, you agree to enter intocustomary confidential information, nonsolicitation, inventions and similaragreements. If you agree with the terms outlined in this letter agreement,please acknowledge the same by signing this letter agreement and the enclosedduplicate original hereof and returning such signed duplicate original copy inthe envelope provided.

Sincerely,

NUI CORPORATION

By: /S/ BERNARD S. LEEName:Bernard S. LeeTitle: Chairman,Compensation Committee

            

Acceptedand Agreed to as of this 27 day of January 2004:

/s/ CRAIGG. MATTHEWS