**SEVERANCE AGREEMENT**

This Severance Agreement is made and entered into this 25th day ofSeptember, 2003, by and between John Kean, Jr. ("Employee") and NUICorporation ("NUI") and any of its predecessors, successors, parentcorporations, subsidiaries, affiliates, operating divisions, and each of theiremployees, stockholders, officers and directors (sometimes collectivelyreferred to as the "Company").

WHEREAS, NUI and Employee wish to enter into this Severance Agreement toreflect the terms and conditions of the termination of Employee's employmentwith NUI and to provide Employee with compensation and benefits, as legalconsideration, in addition to those which he would otherwise be entitled toreceive in connection with that termination.

NOW, THEREFORE, in consideration of the mutual promises and covenantscontained herein, it is agreed as follows:

1.            Effective as of 5:00P.M., E.D.T. on September 25, 2003 (the "Resignation Date"), Employeeresigns as an employee, officer and director of the Company.

(a)        At the request of theSpecial Committee of the Board of Directors of the Company, during the periodfrom September 26,2003 through December 31,2003 (the "InterimPeriod"), Employee will make himself available to the Company, as theSpecial Committee of the Board of Directors of the Company may reasonablyrequest.

(b)        During the InterimPeriod, the Company will pay Employee at a rate equivalent to his current basesalary, payable in accordance with Company's bi-weekly payroll process.

(c)        During the InterimPeriod the Company will provide Employee with secretarial assistance from theperson who was Employee's secretary on the Resignation Date, or such otherperson or persons as are reasonably acceptable to Employee, and will alsoprovide Employee with remote access to the Company's voicemail and e-mailsystems.

2.         In settlement of allclaims released under this Severance Agreement, the Company will provide thefollowing payments and benefits to Employee, which Employee acknowledges that hewould not otherwise be entitled to receive. These payments and benefits are inaddition to any payments or benefits he is already entitled to receive.

(a)            Commencing January1,2004 through December 31,2005 (the "Severance Period"), severancepay at Employee's base salary of $490,000.00 per year, payable in accordancewith Company's biweekly payroll process. Payment of severance will beconditioned upon execution and compliance with this Severance Agreement.  Employee agrees to pay taxes, if any, that may be due on his behalf withrespect to any and all payments made pursuant to this Severance Agreement andhe agrees to indemnify and hold the Company harmless with respect to any taxeswhich should have been paid by him. The Company agrees to pay the appropriatetaxing authorities all amounts withheld from Employee's bi-weekly installmentsand the Company agrees to indemnify and hold Employee harmless with respect toany amounts that were withheld on behalf of Employee but not remitted to theappropriate taxing authorities.

(b)        During the InterimPeriod and the Severance Period, or until severance payments under thisSeverance Agreement cease, Employee will be required as needed by the Companyand upon reasonable notice to Employee, to consult with the Company withrespect to his former areas of responsibility. It is understood that suchcooperation will not interfere with Employee's new employment or business andwill have to be coordinated in advance with the Company and Employee. Employeeagrees to cooperate fully with and to assist the Company in connection with thepreparation and defense, including but not limited to personal appearances andtestimony, of any claim, action or litigation in which the Company is, or maybecome, a party and which relates in any way to matters or actions within thepossible scope of Employee's responsibilities while in the employment of theCompany. The Company agrees to reimburse Employee for reasonable and necessaryout of pocket expenses incurred in connection with such consultation and/orcooperation prior to the end of the Severance Period. Thereafter, Company willreimburse Employee at the rate of $200.00 per hour, not to exceed $2,000.00 perday in addition to reimbursing him for reasonable and necessary out of pocketexpenses incurred while assisting the Company. Employee further agrees that hewill advise the Company immediately upon becoming aware of any claim orlitigation connected in any way to the Company in which he is required orrequested to appear as a witness or made a party. Company also further agreesthat it will advise Employee immediately upon becoming aware of any claim orlitigation connected in any way to the Employee in which he is required orrequested to appear as a witness or made a party.

(c)        The Company confirmsthat it will indemnify Employee pursuant to and to the extent provided inArticle X of the Company's Amended and Restated Certificate of Incorporation.In addition to such indemnification, during the Interim Period, the Severance Periodand thereafter the Company will continue to maintain directors' and officers'liability insurance that covers Employee in respect of the period of hisemployment with the Company substantially similar to the directors' andofficers' liability insurance carried by the Company as of the ResignationDate, subject only to such changes affecting all executive officers anddirectors of the Company generally.

(d)            Company will provideexecutive outplacement assistance through Right Management at the Company'sexpense. In the event that Employee desires to utilize the services of analternative outplacement firm, the Company will pay for such services, subjectto a cap of $20,000.00.

(e)            Employee maycontinue to use the Company vehicle currently assigned to him and Company willmake all lease payments and pay all expenses including, but not limited to,insurance, registration, fuel and maintenance, in accordance with Company'spolicy for corporate officer leased vehicles in effect as of the Resignation Date,throughout the Interim Period and the Severance Period.  Employee may elect to retain his currentCompany vehicle at the end of the Severance Period. The value of the vehicle atthe conclusion of the Severance Period will be treated as imputed income toEmployee.

(f)            Employee has beengranted 45,000 shares of Company restricted stock pursuant to grant agreementsdated as of November 1999, 2000 and 2002, which have not vested as of the dateof this Severance Agreement ("Employee's Unvested Shares"). Effectiveas of the Resignation Date, all of Employee's Unvested Shares will be deemedvested. Promptly after expiration of the seven (7) day revocation perioddescribed in Sections 11 and 12 of this Severance Agreement, the Company willdeliver those Shares to Employee, without restrictive legends.

(g)        During the InterimPeriod and the Severance Period, the Company will, at Employee's election,arrange to provide Employee with the benefits listed on attached Schedule A forEmployee and his family, provided Employee is not then covered by benefitsprovided by another employer that are comparable in scope and cost to thosebeing provided by the Company during the Interim Period or the SeverancePeriod. During the first eighteen (18) months (the "COBRA Period"),such benefits will be provided through COBRA at the Company's expense.Thereafter, for the balance of the Severance Period, the Company will arrangeto continue to provide Employee with benefits substantially similar to thoseprovided by the Company during the COBRA Period, at the Company's expense.Also, as promptly as practicable following the Resignation Date, the Companywill, at Employee's election, transfer to Employee all life insurance policiesheld by the Company on Employee's life and Employee will assume all premiumpayments therefor.

(h)        The Company acknowledgesthat Employee holds shares of the Company's common stock under the Company'sdeferred compensation plan and the Company's employee stock purchase plan.  The Company will distribute those shares toEmployee as soon as possible following the Resignation Date in accordance withthe terms of those plans.

(i)         In accordance with theCompany's policies, the Company will pay Employee for unused floating holidays,vacation and sick time accrued as of the Resignation Date.

(j)         The Company willforward as directed by Employee all phone, voicemail and e-mail messages sentto Employee and received by the Company.

3.         In consideration of theCompany's payments and undertakings as set forth in this Severance Agreement,effective as of 5:00 P.M., E.D.T. on the Resignation Date, Employee knowinglyand voluntarily waives, releases and discharges the Company from all claims orcauses of action, known or unknown, that he may have or claim to have againstthe Company, including but not limited to any and all claims arising out of orin any way connected with Employee's employment with the Company or thetermination of that employment, but excluding any claims relating to theCompany's obligations under this Severance Agreement or the Company'sobligation to indemnify Employee under Article X of the Company's Amended andRestated Certificate of Incorporation. The claims released include, but are notlimited to, any and all claims arising under any change-in-control agreementsbetween Employee and the Company, the United States Constitution or theconstitutions of any state, any and all common-law claims, including claims ofwrongful discharge, constructive discharge, breach of an express or implied contractarising under any handbook, manual, policy or practice, breach of an impliedcovenant of good faith and fair dealing, violation of any public policy,defamation, emotional distress, fraud, negligence, tortious interference withcontract or prospective economic advantage, humiliation, punitive damages, andall claims for compensatory damages, including, but not limited to back pay,front pay, bonuses, awards, reinstatement, retroactive seniority, pensionbenefits and all claims for attorneys' fees and costs; any and all claimsarising under any federal, state or local law, including but not limited toTitle VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, theCivil Rights Act of 1991, the Age Discrimination in Employment Act, the OlderWorkers Benefit Protection Act, Employee Retirement Income Security Act of1974, the Americans With Disabilities Act, the Rehabilitation Act, the Familyand Medical Leave Act of 1993, the New Jersey Law Against Discrimination, theNew Jersey Conscientious Employee Protection Act, and the New Jersey FamilyLeave Act. Employee also releases any and all claims arising under anyExecutive Order and any claims derived from or based upon any federal or stateregulations.

4.            Employee agrees andunderstands that he will not disclose nor cause to be disclosed any tradesecrets, or confidential or proprietary business information of the Company,including but not limited to, technical data and information, marketing plans,customer lists or identities, prospective customers, costs and pricinginformation, source for designs, or sources of supplies, materials, goods orservices to the Company or the cost or terms thereof.

5.         On the Resignation Date,Employee will return to the Company all personal computer(s), software,printer(s), files, records, identification and credit cards, keys and any otherCompany property in his possession or control, other than those items permittedto be retained. Employee may retain his laptop computer and the two cellulartelephones currently assigned to him (including the telephone numbers thereof)and the responsibility for service charges will be transferred to Employeeeffective with the end of the Severance Period.

6.            Employee and theCompany have agreed on the text of the press release announcing Employee'sresignation from the Company, a copy of which is attached as Schedule B. TheCompany will not make any statements concerning the termination of Employee'semployment with the Company that are inconsistent with such press release ormake any disparaging statements against or about Employee or Employee's term ofservice with the Company. Employee will not make any disparaging statementsagainst or about the Company, or any of its predecessors, successors, oraffiliated companies or their officers, directors, agents or employees.  Nothing contained in this Agreement will limit or restrict the abilityof Employee or the Company to provide information or testimony regarding theother party if required pursuant to regulatory or legal process.

7.            Employee representsthat he has not filed any charge, claim or complaint of any kind against theCompany, and Employee further covenants and represents that he will not fileany lawsuit or initiate any action seeking personal recovery or personalinjunctive relief against the Company with respect to any matter, including butnot limited to, his employment with the Company or the termination of thatemployment. Nothing contained in this paragraph will prohibit Employee from (a)bringing any action to enforce the terms of this Severance Agreement; (b)filing a timely charge or complaint with the Equal Employment OpportunityCommission ("EEOC") regarding the validity of this SeveranceAgreement; (c) filing a timely charge or complaint with the EEOC orparticipating in any investigation or proceeding conducted by the EEOC orregarding any claim of employment discrimination (although Employee has waivedany right to personal recovery or personal injunctive relief in connection withany such charge or complaint); or (d) filing any action to enforce theCompany's or any insurer's obligation under Article X of the Company's Amendedand Restated Certificate of Incorporation or otherwise to indemnify and defendEmployee in connection with any action or proceeding to which he is a party orwitness by virtue of having been an officer, director or employee of theCompany.

8.            Employee and theCompany agree to maintain in confidence, and not to disclose or cause to bedisclosed, the terms of this Severance Agreement.  It will not be considered a breach of this obligation ofconfidentiality for Employee to make disclosure to his immediate family (whowill then be expressly advised of; and also be bound by, the same requirementof confidentiality), or for Employee to make disclosures in order to obtainprivate and confidential tax, legal or financial advice or to respond to anyinquiry from any governmental entity or agency regarding tax filing. Employee'sconfidentiality obligation under this Section 8 will cease if the Companypublicly discloses the terms of this Severance Agreement. It will not beconsidered a breach of the obligation of confidentiality for the Company orEmployee to make disclosures to regulatory agencies, pursuant to federalsecurities laws, pursuant to court process, or to any potential acquiror of theCompany.

9.            Employee agrees andunderstands that he shall (i) not solicit business away from the Company, or inany way encourage any person or entity to cease doing business with the Companyand (ii) not, by virtue of employment status or through ownership control,compete directly or indirectly with the Company in New Jersey, Maryland,Virginia or Florida for a period of five months from the Resignation Date.Employee further agrees that a violation of this provision shall constitute abreach of this Agreement and he shall forfeit all future benefits under thisSeverance Agreement.

10.            Employeeacknowledges and represents that the only consideration he received forexecuting this Severance Agreement is that set forth in this SeveranceAgreement, which is in addition to any benefits to which Employee is entitled.No other promise, inducement, threat, agreement or understanding of any kind ordescription has been made with or to Employee by the Company to cause him toagree to the terms of this Severance Agreement.

11.            Employee herebyacknowledges that by this Severance Agreement the Company is advising him inwriting that he should consult with an attorney prior to executing this SeveranceAgreement. Employee states that he has had the opportunity to read, review, andconsider all of the provisions of this Severance Agreement freely, voluntarily,and without duress or coercion.

12.            Employee understandsthat he has forty-five (45) calendar days within which to consider thisSeverance Agreement before signing it. Employee also understands that aftersigning this Severance Agreement he may revoke his signature within seven (7)calendar days by delivering written notification of that revocation marked"personal and confidential" to James R. Van Horn, Corporate Secretary and General Counsel, NUI Corporation, 550Route 202/206, Bedminster, NJ 07921-0760.

13.       It is understood andagreed that the consideration to be paid to Employee pursuant to Section 2(f)of this Severance Agreement and General Release will not become payable untilseven (7) days have passed from the date of the execution of this SeveranceAgreement by Employee, at which point in time Employee will no longer be able torevoke his signature and this Severance Agreement will become binding andeffective.

14.       If any payments made toEmployee under this Severance Agreement (including issuance or delivery ofshares of Company stock pursuant to Sections 2(f) and 2(h) of this SeveranceAgreement) (the "Payments") are subject to the excise tax imposed bySection 4999 of the Internal Revenue Code of 1986 (the "Code"), asamended, then the Company (or its successor following any acquisition ormerger, as applicable), will indemnify Employee for any such tax paid byEmployee such that the net amount retained by Employee, after subtracting theexcise tax on the Payments and any federal, state or local taxes and additionalexcise tax on the indemnification payment, will be equal to the Payments.

15.       In the event any term,condition or provision of this Severance Agreement, in whole or in part, isdeclared by any court of competent jurisdiction to be illegal, void or invalid,all other terms, conditions and provisions of this Severance Agreement willremain in full force and effect to the same extent as if the part declaredillegal, void or invalid, had never been incorporated in this SeveranceAgreement, and will continue to be binding upon the parties hereto.

16.       This Severance Agreementwill be governed by the laws of the State of New Jersey except to the extentthat federal law may be applicable to any matter arising hereunder.

17.       The Company will continueto make the payments and provide the benefits to be paid or provided toEmployee under this Severance Agreement, notwithstanding Employee's death ordisability during the Interim Period or the Severance Period. If Employee diesduring the Interim Period or the Severance Period, the Company will continue toprovide those benefits to Employee's family and will pay any unpaid severancepayments to Empl9yee's estate.

18.            Employee representsthat he has carefully read and fully understands all of the provisions of thisSeverance Agreement; that Employee has been encouraged to review this SeveranceAgreement with an attorney of his choice; and that Employee is voluntarilyexecuting this Severance Agreement.

                                                                                    NUICorporation

/S/        JOHN KEAN, JR.                                           By:   /S/  BERNARD S. LEE            John Kean, Jr.                                                                 Bernard S.Lee                                                                                                   Chairman,                                                                                                                     Compensation Committee

Date: September 25, 2003                                          Date:September 25, 2003

ScheduleABenefits
Medical/Prescription Drug (family coverage)  Dental (family coverage) Vision (family coverage)  Medical Expense Reimbursement Plan, not providedthrough COBRA (or equivalent benefit) 

ScheduleB

Final

Investor Contact:                                                          MediaContact:Linda S. Lennox                                                           GeorgeKoodrayDirector, Investor Relations                                           Director, Public Affairs(908) 719-4222                                                           (908)470-4613                                                

For Immediate Release 

NUICORPORATION PURSUES SALE OF THE COMPANY

Presidentand Chief Executive Officer Steps Down

Bedminster, NJ - September 26,2003 - NUI Corporation (NYSE:NUI)announced today that as a result of the negative impact on the company arisingfrom recent credit downgrades and adverse business conditions, its Board ofDirectors has decided to pursue the sale of the company. After considering anumber of strategic alternatives, the Board of Directors established a SpecialCommittee to further assess the company's choices and concluded that pursuing asale of the company is in the best interests of the company's stakeholders.

The company also announced that John Kean, Jr. has stepped down asPresident and Chief Executive Officer and as a director of the company topursue other opportunities.

A. Mark Abramovic, the company's Chief Operating Officer and ChiefFinancial Officer, has been appointed President of the company. Abramovicstated, "The company has benefited from John's leadership and innovation.We thank him for his years of dedicated service to the company and wish himwell in his future endeavors."

The company also announced that NUI Utilities, Inc. has entered into aletter of intent with a lender to provide it with an additional $50 millionunsecured credit facility to fund its short-term needs. NUI is pursuing otheralternatives to provide NUI Utilities, Inc. with sufficient credit capacity tocontinue to satisfy its short-term needs in the event the $50 million facilityis not obtained.

NUI also revised its earnings guidance for the fiscal year endingSeptember 30,2003 to $0.95 to $1.05 per share from $1.10 to $1.25 per share.

"I look forward to working to find the best strategic partner forNUI while ensuring that the interests of our shareholders, employees, customersand other stakeholders remain paramount," Abramovic said. .

Berenson & Company is serving as a financial advisor to the company.

A live teleconference will be held today, September 26, 2003, at 10:30a.m. EST. The dial-in number for domestic investors is 1-800-360-9865 and1-973-694-6836 for international callers. Participants should dial in fiveminutes prior to the scheduled start time. A taped replay of the call will beavailable beginning at 12:00 p.m. EST and ending on October 3,2003, at 11 :59p.m. EST. The dial-in number for the replay is 1-800-428-6051 for domesticcallers and 1-973-709-2089 for international callers. The pass code for thereplay is 307979.

A live webcast of the call will be available on the company's website atwww.nui.com. Choose "Investor Relations" and then select the webcasticon on the Corporate Overview page. Shortly following the live call, a replaywill be archived on NUI's corporate website.

NUI Corporation, based in Bedminster, NJ, is a diversified energycompany that operates natural gas utilities, as well as businesses involved innatural gas storage and pipeline activities and wholesale energy portfolio andrisk management. NUI Utilities' companies include Elizabethtown Gas Company inNew Jersey, City Gas Company of Florida and Elkton Gas Company in Maryland. Visitour web site at www.nui.com.

This press release contains forward-looking statements, includingstatements related to the potential sale of NUI, an anticipated additionalcredit facility for NUI Utilities, the pursuit of alternatives for theanticipated additional credit facility, and fiscal 2003 earnings guidance.These statements are based on management's current expectations and informationcurrently available and are believed to be reasonable and are made in goodfaith. However, the forward-looking statements are subject to risks anduncertainties that could cause actual results to differ materially from thoseprojected in the statements.  Factorsthat may make the actual results differ from anticipated results include, butare not limited to, the company's ability to control operating expenses; thevolatility and level of natural gas prices; the ability of the company toobtain a short-term credit facility for NUI Utilities; the ability of thecompany to obtain an alternative to the short-term credit facility in the eventthe short-term credit facility is not obtained; the ability of the company toidentify a buyer for the company and negotiate a definitive agreement for thesale of the company; economic conditions; weather fluctuations; those factors setforth in the company's Form 10-K, Form 10-a and its other filings with theSecurities and Exchange Commission relating to forward-looking statements; andother uncertainties, all of which are difficult to predict and some of whichare beyond the company's control. For these reasons, you should not rely onthese forward-looking statements when making investment decisions. The words"expect," "believe," "project,""anticipate," "intend," "should,""could," "will," and variations of such words and similar expressions,are intended to identify forward-looking statements. The company does notundertake any obligation to update publicly any forward-looking statement,either as a result of new information, future events or otherwise.