Document:

NATIONAL FUEL GAS COMPANY
                           1997 AWARD AND OPTION PLAN

1.  Purpose

         The purpose of the Plan is to advance the  interests of the Company and
its stockholders,  by providing a long-term incentive  compensation program that
will be an incentive to the Core  Employees of the Company and its  Subsidiaries
whose  contributions  are important to the continued  success of the Company and
its Subsidiaries,  and by enhancing their ability to attract and retain in their
employ highly qualified persons for the successful conduct of their businesses.

2.  Definitions

         2.1  "Acceleration  Date"  means  (i)  in  the  event  of a  Change  in
Ownership,  the date on which  such  change  occurs,  or (ii) with  respect to a
Participant  who is eligible for treatment  under paragraph 25 hereof on account
of the termination of his employment  following a Change in Control, the date on
which such termination occurs.

         2.2 "Award" means any form of stock option,  stock appreciation  right,
Restricted Stock,  performance unit,  performance share or other incentive award
granted by the Committee to a Participant  under the Plan pursuant to such terms
and conditions as the Committee may establish.  An Award may be granted  singly,
in combination or in the alternative.

         2.3  "Award  Notice"  means a  written  notice  from the  Company  to a
Participant  that sets forth the terms and conditions of an Award in addition to
those  established  by  this  Plan  and  by  the  Committee's  exercise  of  its
administrative powers.

         2.4  "Board" means the Board of Directors of the Company.

         2.5  "Cause"  means (i) the  willful  and  continued  failure by a Core
Employee to  substantially  perform his duties with his employer  after  written
warnings  specifically  identifying  the  lack of  substantial  performance  are
delivered  to him by his  employer,  or  (ii)  the  willful  engaging  by a Core
Employee in illegal  conduct which is materially and  demonstrably  injurious to
the Company or a Subsidiary.

         2.6 "Change in Control"  shall be deemed to have  occurred at such time
as (i) any "person"  within the meaning of Section  14(d) of the  Exchange  Act,
other than the Company,  a  Subsidiary,  or any  employee  benefit plan or plans
sponsored  by the Company or any  Subsidiary,  is or has become the  "beneficial
owner," as defined in Rule 13d-3 under the Exchange Act, directly or indirectly,
of twenty percent (20%) or more of the combined  voting power of the outstanding
securities of the Company ordinarily having the right to vote at the election of
directors,  or (ii)  approval  by the  stockholders  of the  Company  of (a) any
consolidation  or  merger  of the  Company  in  which  the  Company  is not  the
continuing or surviving  corporation or pursuant to which shares of stock of the
Company would be converted into cash, securities or other property, other than a
consolidation  or merger of the Company in which the common  stockholders of the
Company  immediately prior to the consolidation or merger have substantially the
same  proportionate  ownership  of  common  stock of the  surviving  corporation
immediately after the consolidation or merger as immediately  before, or (b) any
consolidation  or merger in which the  Company is the  continuing  or  surviving
corporation  but in which the common  stockholders  of the  Company  immediately
prior to the  consolidation  or  merger do not hold at least a  majority  of the
outstanding  common stock of the  continuing  or surviving  corporation  (except
where such  holders of Common Stock hold at least a majority of the common stock
of the  corporation  which owns all of the Common Stock of the Company),  or (c)
any sale,  lease,  exchange or other transfer (in one transaction or a series of
related  transactions) of all or substantially all the assets of the Company, or
(iii)  individuals  who constitute the Board on January 1, 1997 (the  "Incumbent
Board") have ceased for any reason to  constitute  at least a majority  thereof,
provided that any person becoming a director subsequent to January 1, 1997 whose
election, or nomination for election by the Company's stockholders, was approved
by a vote of at least  three-quarters  ( 3/4) of the  directors  comprising  the
Incumbent  Board (either by specific vote or by approval of the proxy  statement
of the  Company in which such person is named as nominee  for  director  without
objection to such nomination) shall be, for purposes of this Plan, considered as
though such person were a member of the Incumbent Board.

         2.7 "Change in Control Price" means, in respect of a Change in Control,
the highest closing price per share paid for the purchase of Common Stock on the
New York  Stock  Exchange,  another  national  stock  exchange  or the  National
Association of Securities  Dealers Automated  Quotation System during the ninety
(90) day period ending on the date the Change in Control occurs,  and in respect
of a Change in  Ownership,  the  highest  closing  price per share  paid for the
purchase of Common Stock on the New York Stock Exchange,  another national stock
exchange or the National  Association of Securities Dealers Automated  Quotation
System  during  the  ninety  (90) day  period  ending on the date the  Change in
Ownership occurs.

         2.8 "Change in  Ownership"  means a change  which  results  directly or
indirectly  in the  Company's  Common Stock  ceasing to be actively  traded on a
national securities  exchange or the National  Association of Securities Dealers
Automated Quotation System.

         2.9 "Code"  means the Internal  Revenue  Code of 1986,  as amended from
time to time.

         2.10 "Committee" means the Compensation Committee of the Board, or such
other committee designated by the Board,  authorized to administer the Plan. The
Committee  shall consist of not less than two (2) members of the Board,  each of
whom shall be a Disinterested Board Member. A "Disinterested Board Member" means
a member who (a) is not a current  employee of the Company or a Subsidiary,  (b)
is  not  a  former  employee  of  the  Company  or  a  Subsidiary  who  receives
compensation  for prior  services  (other than  benefits  under a  tax-qualified
retirement  plan)  during the taxable  year,  (c) has not been an officer of the
Company (d) does not  receive  remuneration  from the  Company or a  Subsidiary,
either directly or indirectly,  in any capacity other than as a director and (e)
does not possess an interest in any other  transaction,  and is not engaged in a
business  relationship,  for which disclosure would be required pursuant to Item
404(a) or (b) of Regulation  S-K under the  Securities  Act of 1933, as amended.
The term Disinterested Board Member shall be interpreted in such manner as shall
be necessary to conform to the  requirements  of Section  162(m) of the Code and
Rule 16b-3 promulgated under the Exchange Act.

         2.11  "Common Stock" means the common stock of the Company.

         2.12  "Company" means National Fuel Gas Company.

         2.13 "Core Employee" means an officer or other core management employee
of the  company  or a  Subsidiary  as  determined  by the  Committee.  Every Key
Management Employee is also a Core Employee.

         2.14  "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
amended from time to time.

         2.15 "Fair  Market  Value" of a share of Common Stock on any date means
the  average  of the high and low sales  prices  of a share of  Common  Stock as
reflected   in  the   report  of   consolidated   trading   of  New  York  Stock
Exchange-listed  securities  for that date (or, if no such shares were  publicly
traded on that date,  the next  preceding  date that such shares were so traded)
published in The Wall Street Journal or in any other publication selected by the
Committee; provided, however, that if shares of Common Stock shall not have been
publicly  traded for more than ten (10) days  immediately  preceding  such date,
then the Fair Market Value of a share of Common Stock shall be determined by the
Committee in such manner as it may deem appropriate.

         2.16  "Good  Reason"  means  a  good  faith  determination  made  by  a
Participant  that there has been any (i)  material  change by the Company of the
Participant's functions, duties or responsibilities which change could cause the
Participant's   position   with  the   Company   to  become  of  less   dignity,
responsibility,  importance,  prestige or scope, including,  without limitation,
the assignment to the  Participant of duties and  responsibilities  inconsistent
with his  positions,  (ii)  assignment  or  reassignment  by the  Company of the
Participant  without the Participant's  consent,  to another place of employment
more than 30 miles from the Participant's current place of employment,  or (iii)
reduction in the Participant's  total  compensation or benefits or any component
thereof,  provided  in each case that the  Participant  shall  specify the event
relied upon for such  determination  by written  notice to the Board at any time
within six months after the occurrence of such event.

         2.17 "Key  Management  Employee"  means a  management  employee  of the
Company or a Subsidiary (i) who has significant  policymaking  responsibilities,
and (ii) whose  current  base salary at the time an Award is issued is among the
highest two percent  (2%) of the current base  salaries of all the  employees of
the Company or any Subsidiary, all as determined by the Committee.

         2.18  "Participant"  means  any  individual  to whom an Award  has been
granted by the Committee under this Plan.

         2.19 "Plan" means the  National  Fuel Gas Company 1997 Award and Option
Plan.

         2.20 "Restricted Stock" means an Award granted pursuant to paragraph 10
hereof.

         2.21 "Subsidiary" means a corporation or other business entity in which
the Company  directly or indirectly has an ownership  interest of eighty percent
(80%) or more.

         2.22 "Unit" means a bookkeeping entry used by the Company to record and
account for the grant of the  following  Awards  until such time as the Award is
paid,  cancelled,  forfeited or terminated,  as the case may be: Units of Common
Stock, performance units, and performance shares which are expressed in terms of
Units of Common Stock.

3.  Administration

         The Plan shall be  administered  by the Committee.  The Committee shall
have the  authority to: (a)  interpret  the Plan;  (b) establish  such rules and
regulations as it deems necessary for the proper administration of the Plan; (c)
select Key  Management  Employees and Core Employees to receive Awards under the
Plan;  (d)  determine  the  form of an  Award,  whether  a stock  option,  stock
appreciation right,  Restricted Stock,  performance unit,  performance share, or
other incentive award established by the Committee in accordance with (h) below,
the number of shares or Units subject to the Award, all the terms and conditions
of an Award,  including  the time and  conditions  of exercise  or vesting;  (e)
determine  whether  Awards would be granted  singly,  in  combination  or in the
alternative;  (f) grant waivers of Plan terms and conditions,  provided that any
such  waiver  granted  to an  executive  officer  of the  Company  shall  not be
inconsistent  with  Section  16 of the  Exchange  Act and the rules  promulgated
thereunder;  (g) accelerate the vesting, exercise or payment of any Award or the
performance  period  of an  Award  when  any  such  action  would be in the best
interest of the Company; (h) establish such other types of Awards, besides those
specifically  enumerated in paragraph 2.2 hereof, which the Committee determines
are consistent with the Plan's  purposes;  and (i) take any and all other action
it deems  advisable  for the proper  administration  of the Plan.  The Committee
shall  also  have the  authority  to  grant  Awards  in  replacement  of  Awards
previously granted under this Plan or any other executive  compensation or stock
option plan of the Company or a Subsidiary.  All determinations of the Committee
shall be made by a majority  of its  members,  and its  determinations  shall be
final, binding and conclusive.  The Committee,  in its discretion,  may delegate
its  authority  and duties under the Plan to the Chief  Executive  Officer or to
other  senior  officers of the Company to the extent  permitted by Section 16 of
the  Exchange  Act and  notwithstanding  any other  provision of this Plan or an
Award Notice,  under such  conditions as the Committee may establish;  provided,
however,  that only the  Committee  may select and grant Awards and render other
decisions as to the timing, pricing and amount of Awards to Participants who are
subject to Section 16 of the Exchange Act.

4.  Eligibility

         Any Core Employee is eligible to become a  Participant  of the Plan who
receives  Stock  Options  only. A Key  Management  Employee is also  eligible to
become a Participant of the Plan who receives other awards under the Plan.

5.  Shares Available

         (a) The maximum number of shares of Common Stock,  $1.00 par value,  of
the  Company  which  shall be  available  for  grant of  Awards  under  the Plan
(including  incentive stock options) during its term shall not exceed 3,800,000;
subject to adjustment as provided in paragraph 18. Awards  covering no more than
300,000 shares of Common Stock of the Company may be granted to any  Participant
in any fiscal year subject to  adjustment  as provided in  paragraph  18. Of the
1,900,000 shares which were made available by the Plan amendment approved at the
2000 Annual Meeting of Stockholders,  1,200,000 of such shares will be available
only for awards of stock options.

         (b) Any shares of Common  Stock  related to Awards  which  terminate by
expiration,  forfeiture,  cancellation or otherwise without the issuance of such
shares,  are settled in cash in lieu of Common Stock,  or are exchanged with the
Committee's permission for Awards not involving Common Stock, shall be available
again for grant under the Plan, provided, however, that if dividends or dividend
equivalents  pursuant to paragraph 14, or other benefits of share ownership (not
including the right to vote the shares) have been received by the Participant in
respect of an Award  prior to such  termination,  settlement  or  exchange,  the
shares  which were the  subject of the Award  shall not again be  available  for
grant under the Plan.  Further,  any shares of Common  Stock which are used by a
Participant for the full or partial payment to the Company of the purchase price
of  shares  of  Common  Stock  upon  exercise  of a  stock  option,  or for  any
withholding taxes due as a result of such exercise, shall again be available for
Awards under the Plan.  Similarly,  shares of Common Stock with respect to which
an Alternative  SAR has been exercised and paid in cash shall again be available
for grant under the Plan. Shares to which independent or combination SARs relate
shall not count against the 3,800,000 share limit set forth in this paragraph 5.

         (c) The shares of Common Stock  available  for issuance  under the Plan
may be authorized and unissued shares or treasury shares.

6.  Term

         The Plan shall become  effective as of December 13, 1996 subject to its
approval  by  the  Company's   stockholders   at  the  1997  Annual  Meeting  of
Stockholders  and  subject  to the  approval  of  the  Securities  and  Exchange
Commission under the Public Utility Holding Company Act of 1935, as amended.  No
Awards shall be exercisable  or payable before these  approvals of the Plan have
been obtained and all Awards made prior to approval of the Plan by the Company's
stockholders and approval of the Plan by the Securities and Exchange  Commission
under the Public Utility Holding Company Act of 1935, as amended, are contingent
upon such  approval.  Awards  shall not be  granted  pursuant  to the Plan after
December 12, 2006.

7.  Participation

         The Committee shall select  Participants,  determine the type of Awards
to be made, and establish in the related Award Notices the applicable  terms and
conditions  of the  Awards in  addition  to those set forth in this Plan and the
administrative rules issued by the Committee.

8.  Stock Options

         (a) Grants.  Awards may be granted in the form of stock options.  These
stock options may be incentive  stock options  within the meaning of Section 422
of the Code or  non-qualified  stock options (i.e.,  stock options which are not
incentive stock options), or a combination of both.

         (b) Terms and Conditions of Options.  Unless the Award Notice  provides
otherwise,  an option  shall be  exercisable  in whole or in part.  The price at
which  Common Stock may be  purchased  upon  exercise of a stock option shall be
established  by the  Committee,  but such price  shall not be less than the Fair
Market Value of the Common Stock on the date of the stock  option's  grant.  The
Committee  shall not have the authority to decrease such price after the date of
the stock option's grant, except for adjustments appropriate to reflect a Common
Stock dividend,  stock split,  reverse stock-split or other combination pursuant
to  Section  18(a).  An Award  Notice  evidencing  a stock  option  may,  in the
discretion  of the  Committee,  provide that a  Participant  who pays the option
price of a stock  option by an  exchange  of shares of Common  Stock  previously
owned by the  Participant  shall  automatically  be issued a new stock option to
purchase  additional  shares of Common  Stock  equal to the  number of shares of
Common  Stock so  exchanged.  Such new stock  option  shall have an option price
equal to the Fair  Market  Value of the Common  Stock on the date such new stock
option is issued and shall be subject to such other terms and  conditions as the
Committee deems appropriate.  Unless the Award Notice provides  otherwise,  each
incentive stock option shall first become  exercisable on the first  anniversary
of its date of grant,  and each  non-qualified  stock  option shall first become
exercisable on the first anniversary of its date of grant, or, if earlier (i) on
the date of the Participant's  death occurring after the date of grant, (ii) six
months after the date of grant, if the  Participant has voluntarily  resigned on
or after his 60th birthday, after the date of grant, and before such six months,
or (iii) on the date of the Participant's  voluntary resignation on or after his
60th birthday and at least six months after the date of grant.  Unless the Award
Notice provides  otherwise,  each non-qualified stock option shall expire on the
day after the  tenth  anniversary  of its date of  grant,  and  incentive  stock
options and non-qualified  stock options granted in combination may be exercised
separately.

         (c)  Restrictions  Relating to Incentive  Stock Options.  Stock options
issued in the form of  incentive  stock  options  shall,  in  addition  to being
subject to all  applicable  terms and  conditions  established by the Committee,
comply with  Section 422 of the Code.  Accordingly,  the  aggregate  Fair Market
Value  (determined  at the time the option was granted) of the Common Stock with
respect to which incentive stock options are exercisable for the first time by a
Participant  during any calendar  year (under this Plan or any other plan of the
Company or any of its  Subsidiaries)  shall not exceed  $100,000  (or such other
limit as may be  required  by the  Code).  Unless  the Award  Notice  provides a
shorter  period,   each  incentive  stock  option  shall  expire  on  the  tenth
anniversary  of its date of grant.  The  number of shares of Common  Stock  that
shall be  available  for  incentive  stock  options  granted  under  the Plan is
3,800,000.

         (d)  Exercise of Option.  Upon  exercise,  the option  price of a stock
option may be paid in cash, shares of Common Stock,  shares of Restricted Stock,
a combination of the foregoing, or such other consideration as the Committee may
deem  appropriate.   The  Committee  shall  establish  appropriate  methods  for
accepting Common Stock, whether restricted or unrestricted,  and may impose such
conditions as it deems appropriate on the use of such Common Stock to exercise a
stock option. The Committee,  in its sole discretion,  may establish  procedures
whereby a Participant to the extent permitted by and subject to the requirements
of Rule  16b-3  under  the  Exchange  Act,  Regulation  T issued by the Board of
Governors of the Federal  Reserve System  pursuant to the Exchange Act,  federal
income tax laws, and other federal, state and local tax and securities laws, can
exercise an option or a portion  thereof  without making a direct payment of the
option price to the Company.  If the Committee so elects to establish a cashless
exercise program, the Committee shall determine, in its sole discretion and from
time  to  time,  such  administrative   procedures  and  policies  as  it  deems
appropriate.  Such  procedures and policies shall be binding on any  Participant
wishing to utilize the cashless exercise program.

9.  Stock Appreciation Rights

         (a)  Grants and  Valuation.  Awards may be granted in the form of stock
appreciation rights ("SARs").  SARs may be granted singly ("Independent  SARs"),
in  combination  with all or a portion of a related  stock option under the Plan
("Combination SARs"), or in the alternative ("Alternative SARs"). Combination or
Alternative SARs may be granted either at the time of the grant of related stock
options  or at any  time  thereafter  during  the  term  of the  stock  options.
Combination  SARs shall be subject to paragraph  9(b) hereof.  Alternative  SARs
shall be subject to paragraph 9(c) hereof.  Independent SARs shall be subject to
paragraph 9(d) hereof.  Unless this Plan or the Award Notice provides otherwise,
SARs shall entitle the recipient to receive a payment equal to the  appreciation
in the Fair Market  Value of a stated  number of shares of Common Stock from the
award date to the date of exercise.  Once a SAR has been issued,  the  Committee
shall not reprice the SAR by changing  the initial  Fair Market Value from which
the payment is calculated except for adjustments appropriate to reflect a Common
Stock dividend,  stock split,  reverse stock-split or other combination pursuant
to Section  18(a).  In the case of SARs granted in  combination  with, or in the
alternative  to, stock  options,  the  appreciation  in value is from the option
price of such  related  stock  option  to the Fair  Market  Value on the date of
exercise of such SARs. Unless this Plan or the Award Notice provides  otherwise,
SARs granted in conjunction  with stock options shall be  Combination  SARs, and
all SARs shall be  exercisable  between one year and ten years and one day after
the date of their award.

         (b) Terms and  Conditions of Combination  SARs.  Both the stock options
granted in conjunction  with  Combination  SARs and the Combination  SARs may be
exercised.  Combination SARs shall be exercisable only to the extent the related
stock  option  is  exercisable,  and  the  base  from  which  the  value  of the
Combination  SARs is measured at its  exercise  shall be the option price of the
related stock option. Combination SARs may be exercised either together with the
related stock option or separately. If a Participant exercises a Combination SAR
or related stock option,  but not both, the other shall remain  outstanding  and
shall remain exercisable during the entire exercise period.

         (c) Terms and Conditions of Alternative  SARs. Either the stock options
granted in the alternative to Alternative  SARs or the  Alternative  SARs may be
exercised,  but not both.  Alternative  SARs  shall be  exercisable  only to the
extent that the related stock option is exercisable, and the base from which the
value of the  Alternative  SARs is measured at its exercise  shall be the option
price of the related stock option.  If related stock options are exercised as to
some or all of the shares  covered by the Award,  the related  Alternative  SARs
shall be cancelled  automatically  to the extent of the number of shares covered
by the stock option  exercise.  Upon exercise of Alternative  SARs as to some or
all of the shares  covered by the  Award,  the  related  stock  option  shall be
cancelled  automatically  to the extent of the number of shares  covered by such
exercise,  and such shares shall again be eligible for grant in accordance  with
paragraph 5 hereof.

         (d) Terms and Conditions of Independent SARs. Independent SARs shall be
exercisable  in  whole  or in  such  installments  and at  such  time  as may be
determined  by the  Committee.  The  base  price  from  which  the  value  of an
Independent SAR is measured shall also be determined by the Committee; provided,
however,  that such price  shall not be less than the Fair  Market  Value of the
Common Stock on the date of the grant of the Independent SAR.

         (e) Deemed  Exercise.  The  Committee  may provide  that a SAR shall be
deemed to be exercised at the close of business on the scheduled expiration date
of such SAR, if at such time the SAR by its terms remains exercisable and, if so
exercised, would result in a payment to the holder of such SAR.

10.  Restricted Stock

         (a)  Grants.  Awards may be granted  in the form of  Restricted  Stock.
Shares of  Restricted  Stock shall be awarded in such  amounts and at such times
during the term of the Plan as the Committee shall determine.

         (b) Award Restrictions. Restricted Stock shall be subject to such terms
and conditions as the Committee  deems  appropriate,  including  restrictions on
transferability and continued employment.  No more than 50,000 restricted shares
may be issued in a single  fiscal year.  The  Committee may modify or accelerate
the delivery of shares of Restricted Stock under such  circumstances as it deems
appropriate.

         (c)  Rights as  Stockholders.  During the period in which any shares of
Restricted Stock are subject to the restrictions  imposed under paragraph 10(b),
the Committee may, in its discretion, grant to the Participant to whom shares of
Restricted  Stock have been  awarded  all or any of the rights of a  stockholder
with respect to such shares, including, but not by way of limitation,  the right
to vote such shares and to receive dividends.

         (d) Evidence of Award. Any shares of Restricted Stock granted under the
Plan  may be  evidenced  in such  manner  as the  Committee  deems  appropriate,
including,  without limitation,  book-entry  registration or issuance of a stock
certificate or certificates.

11.  Performance Units

         (a)  Grants.  Awards may be granted in the form of  performance  units.
Performance  units shall refer to the Units valued by  reference  to  designated
criteria  established by the Committee,  other than Units which are expressed in
terms of Common Stock.

         (b)  Performance  or  Service  Criteria.  Performance  units  shall  be
contingent on the attainment during a performance period of certain  performance
and/or service objectives. The length of the performance period, the performance
or service  objectives to be achieved,  and the extent to which such  objectives
have been  attained  shall be  conclusively  determined  by the Committee in the
exercise of its absolute  discretion.  Performance and service objectives may be
revised by the Committee  during the performance  period,  in order to take into
consideration any unforeseen events or changes in circumstances.

12.  Performance Shares

         (a) Grants.  Awards may be granted in the form of  performance  shares.
Performance  shares  shall  refer to shares of Common  Stock or Units  which are
expressed in terms of Common Stock, including shares of phantom stock.

         (b)  Performance  or  Service  Criteria.  Performance  shares  shall be
contingent  upon  the  attainment   during  a  performance   period  of  certain
performance or service  objectives.  The length of the performance  period,  the
performance or service  objectives to be achieved,  and the extent to which such
objectives have been attained shall be conclusively  determined by the Committee
in the exercise of its absolute  discretion.  Performance and service objectives
may be revised by the Committee during the performance  period, in order to take
into consideration any unforeseen events or changes in circumstances.

13.  Payment of Awards

         At the  discretion of the  Committee,  payment of Awards may be made in
cash, Common Stock, a combination of cash and Common Stock, or any other form of
property as the Committee shall determine.

14.  Dividends and Dividend Equivalents

         If an Award is granted in the form of Restricted Stock,  stock options,
or  performance  shares,  or in the form of any  other  stock-based  grant,  the
Committee  may,  at any time up to the time of  payment,  include  as part of an
Award an entitlement to receive  dividends or dividend  equivalents,  subject to
such terms and conditions as the Committee may establish. Dividends and dividend
equivalents  shall  be  paid  in  such  form  and  manner  (i.e.,  lump  sum  or
installments),  and at such time as the Committee shall determine. All dividends
or dividend  equivalents  which are not paid currently  may, at the  Committee's
discretion,  accrue  interest,  be reinvested into  additional  shares of Common
Stock  or,  in the  case  of  dividends  or  dividend  equivalents  credited  in
connection with performance shares, be credited as additional performance shares
and paid to the Participant if and when, and to the extent that, payment is made
pursuant to such Award.

15.  Deferral of Awards

         At the  discretion  of the  Committee,  the  receipt of the  payment of
shares of Restricted Stock,  performance shares,  performance units,  dividends,
dividend  equivalents,  or any portion thereof, may be deferred by a Participant
until such time as the  Committee may  establish.  All such  deferrals  shall be
accomplished  by  the  delivery  of  a  written,  irrevocable  election  by  the
Participant  prior to such  time  payment  would  otherwise  be made,  on a form
provided by the Company. Further, all deferrals shall be made in accordance with
administrative  guidelines  established  by the  Committee  to ensure  that such
deferrals  comply  with  all  applicable   requirements  of  the  Code  and  its
regulations.  Deferred payments shall be paid in a lump sum or installments,  as
determined by the  Committee.  The Committee may also credit  interest,  at such
rates to be determined by the Committee,  on cash payments that are deferred and
credit dividends or dividend equivalents on deferred payments denominated in the
form of Common Stock.

16.  Termination of Employment

         (a)  General  Rule.   Subject  to  paragraph  20,  if  a  Participant's
employment  with the Company or a Subsidiary  terminates for a reason other than
death, disability, retirement, or any approved reason, all unexercised, unearned
or unpaid  Awards shall be  cancelled  or  forfeited as the case may be,  unless
otherwise  provided in this paragraph or in the Participant's  Award Notice. The
Committee  shall have the authority to promulgate  rules and  regulations to (i)
determine what events constitute disability,  retirement,  or termination for an
approved  reason for purposes of the Plan, and (ii) determine the treatment of a
Participant under the Plan in the event of his death, disability, retirement, or
termination for an approved reason.

         (b)  Incentive   Stock  Options.   Unless  the  Award  Notice  provides
otherwise,  any incentive stock option which has not theretofore expired,  shall
terminate upon  termination  of the  Participant's  employment  with the Company
whether by death or otherwise,  and no shares of Common Stock may  thereafter be
purchased pursuant to such incentive stock option, except that:

                  (i) Upon  termination of employment  (other than by death),  a
         Participant  may,  within three months after the date of termination of
         employment,  purchase  all or part of any shares of Common  Stock which
         the  Participant  was entitled to purchase under such  incentive  stock
         option on the date of termination of employment.

                  (ii) Upon the death of any Participant while employed with the
         Company or within  the  three-month  period  referred  to in  paragraph
         16(b)(i)  above,  the  Participant's  estate or the  person to whom the
         Participant's  rights under the incentive  stock option are transferred
         by will or the laws of descent and  distribution  may,  within one year
         after the date of the Participant's death,  purchase all or part of any
         shares of Common Stock which the  Participant  was entitled to purchase
         under such incentive stock option on the date of death.

         Notwithstanding  anything in this paragraph 16(b) to the contrary,  the
Committee  may at any time  within  the  three-month  period  after  the date of
termination of a Participant's employment,  with the consent of the Participant,
the Participant's  estate or the person to whom the  Participant's  rights under
the incentive  stock options are  transferred by will or the laws of descent and
distribution,  extend the period for  exercise  of the  Participant's  incentive
stock options to any date not later than the date on which such incentive  stock
options would have  otherwise  expired  absent such  termination  of employment.
Nothing in this  paragraph  16(b) shall  authorize  the exercise of an incentive
stock option after the expiration of the exercise period therein  provided,  nor
later than ten years after the date of grant.

         (c)  Non-Qualified  Stock  Options.  Unless the Award  Notice  provides
otherwise, any nonqualified stock option which has not theretofore expired shall
terminate upon termination of the Participant's employment with the Company, and
no  shares  of  Common  Stock  may  thereafter  be  purchased  pursuant  to such
non-qualified stock option, except that:

                  (i) Upon  termination  of employment for any reason other than
         death,  discharge by the Company for cause, or voluntary resignation of
         the Participant  prior to age 60, a Participant  may, within five years
         after the date of termination of employment, or any such greater period
         of time as the Committee,  in its sole discretion,  deems  appropriate,
         exercise  all or part  of the  non-qualified  stock  option  which  the
         Participant  was  entitled to exercise  on the date of  termination  of
         employment or  subsequently  becomes  eligible to exercise  pursuant to
         paragraph 8(b) above.

                  (ii) Upon the death of a Participant  while  employed with the
         Company or within the period  referred to in paragraph  16(c)(i) above,
         the Participant's estate or the person to whom the Participant's rights
         under the  non-qualified  stock option are  transferred  by will or the
         laws of descent and distribution  may, within five years after the date
         of the  Participant's  death  while  employed,  or  within  the  period
         referred to in paragraph  16(c)(i)  above,  exercise all or part of the
         non-qualified  stock  option  which the  Participant  was  entitled  to
         exercise on the date of death.

         Nothing in this  paragraph  16(c)  shall  authorize  the  exercise of a
non-qualified stock option later than the exercise period set forth in the Award
Notice.

17.  Nonassignability

         No Award  under the Plan shall be subject in any manner to  alienation,
anticipation,  sale,  transfer  (except  by will  or the  laws  of  descent  and
distribution or pursuant to a qualified domestic  relations order),  assignment,
pledge, or encumbrance,  except that, unless the Committee specifies  otherwise,
all awards of non-qualified stock options or SARs shall be transferable  without
consideration,   subject  to  all  the  terms  and   conditions  to  which  such
non-qualified  stock options or SARs are otherwise subject,  to (i) members of a
Participant's  immediate family as defined in Rule 16a-1  promulgated  under the
Exchange Act, or any successor rule or regulation, (ii) trusts for the exclusive
benefit of the  Participant or such  immediate  family members or (iii) entities
which are  wholly-owned  by the  Participant or such immediate  family  members,
provided that (x) there may be no consideration  for any such transfer,  and (y)
subsequent  transfers of transferred options shall be prohibited except those by
will or the laws of  descent  and  distribution.  Following  transfer,  any such
options  shall  continue to be subject to the same terms and  conditions as were
applicable  immediately  prior to  transfer,  and except as provided in the next
sentence, the term "Participant" shall be deemed to refer to the transferee. The
events of termination of employment of Section 16(c) hereof shall continue to be
applied with reference to the original Participant and following the termination
of employment of the original  Participant,  the options shall be exercisable by
the  transferee  only to the extent,  and for the periods  specified  in Section
16(c), that the original Participant could have exercised such option. Except as
expressly permitted by this paragraph,  an Award shall be exercisable during the
Participant's lifetime only by him.

18. Adjustment of Shares Available

         (a)  Changes in Stock.  In the event of changes in the Common  Stock by
reason of a Common Stock  dividend,  stock split,  reverse  stock-split or other
combination,  appropriate  adjustment  shall  be  made by the  Committee  in the
aggregate  number of shares  available under the Plan, the number of shares with
respect to which  Awards may be granted to any  Participant  in any fiscal year,
and the number of shares, SARs, performance shares, Common Stock units and other
stock-based  interests subject to outstanding  Awards,  without,  in the case of
stock  options,  causing a change  in the  aggregate  purchase  price to be paid
therefor.  Such proper  adjustment as may be deemed equitable may be made by the
Committee in its  discretion  to give effect to any other change  affecting  the
Common Stock.

         (b) Changes in Capitalization.  In case of a merger or consolidation of
the Company  with  another  corporation,  a  reorganization  of the  Company,  a
reclassification  of the Common Stock of the Company, a spinoff of a significant
asset,  or other  changes  in the  capitalization  of the  Company,  appropriate
provision  shall be made for the protection and  continuation of any outstanding
Awards by either (i) the  substitution,  on an equitable  basis,  of appropriate
stock or other  securities  or other  consideration  to which  holders of Common
Stock of the Company will be entitled pursuant to such transaction or succession
of  transactions,  or (ii) by  appropriate  adjustment  in the  number of shares
issuable  pursuant  to the Plan,  the number of shares  covered  by  outstanding
Awards,  the option price of outstanding  stock  options,  the exercise price of
outstanding  SARs, the performance or service criteria or performance  period of
outstanding  performance  units,  and the  performance  or service  criteria  or
performance period of outstanding  performance  shares, as deemed appropriate by
the Committee.

19.  Withholding Taxes

         The Company  shall be  entitled  to deduct  from any payment  under the
Plan,  regardless  of the form of such  payment,  the  amount of all  applicable
income and employment  taxes required by law to be withheld with respect to such
payment or may require the  participant  to pay to it such tax prior to and as a
condition  of  the  making  of  such  payment.  Subject  to  the  administrative
guidelines  established  by the Committee,  a Participant  may pay the amount of
taxes  required by law to be  withheld  from an Award,  in whole or in part,  by
requesting  that the Company  withhold from any payment of Common Stock due as a
result of such Award,  or by delivering  to the Company,  shares of Common Stock
having a Fair  Market  Value less than or equal to the  amount of such  required
withholding taxes.

20.  Noncompetition Provision

         Notwithstanding anything contained in this Plan to the contrary, unless
the  Award  Notice  specifies   otherwise,   a  Participant  shall  forfeit  all
unexercised, unearned, and/or unpaid Awards, including Awards earned but not yet
paid, all unpaid dividends and dividend  equivalents,  and all interest, if any,
accrued  on the  foregoing  if,  (i)  in  the  opinion  of  the  Committee,  the
Participant,  without the written  consent of the Company,  engages  directly or
indirectly  in any manner or capacity as  principal,  agent,  partner,  officer,
director,  employee, or otherwise,  in any business or activity competitive with
the business conducted by the Company or any Subsidiary; or (ii) the Participant
performs  any  act or  engages  in any  activity  which  in the  opinion  of the
Committee is inimical to the best  interests of the  Company.  In addition,  the
Committee may, in its discretion, condition the deferral of any Award, dividend,
or dividend  equivalent under paragraph 15 hereof on a Participant's  compliance
with the terms of this paragraph 20, and cause such a Participant to forfeit any
payment which is so deferred if the  Participant  fails to comply with the terms
hereof.

21.  Amendments to Awards

         The  Committee  may at any time  unilaterally  amend  any  unexercised,
unearned,  or unpaid  Award,  including  Awards  earned but not yet paid, to the
extent it deems appropriate; provided, however, that any such amendment which is
adverse to the Participant shall require the Participant's consent.

22.  Regulatory Approvals and Listings

         Notwithstanding  anything  contained in this Plan to the contrary,  the
Company  shall have no  obligation  to issue or deliver  certificates  of Common
Stock  evidencing  Awards  resulting in the payment of Common Stock prior to (a)
the  obtaining of any approval  from any  governmental  agency which the Company
shall, in its sole discretion,  determine to be necessary or advisable,  (b) the
admission  of such  shares to listing on the stock  exchange on which the Common
Stock  may be  listed,  and (c) the  completion  of any  registration  or  other
qualification  of said  shares  under any state or federal  law or ruling of any
governmental body which the Company shall, in its sole discretion,  determine to
be necessary or advisable.

23.  No Right to Continued Employment or Grants

         Participation  in the Plan shall not give any  Participant any right to
remain in the employ of the  Company or any  Subsidiary.  The Company or, in the
case of employment  with a  Subsidiary,  the  Subsidiary,  reserves the right to
terminate any Participant at any time. Further,  the adoption of this Plan shall
not be deemed to give any person any right to be selected as a Participant or to
be granted an Award.

24.  Amendment

         The Board may suspend or terminate  the Plan at any time.  In addition,
the  Board  may,  from  time to time,  amend  the Plan in any  manner,  provided
however,  that any such amendment may be subject to stockholder  approval (i) at
the discretion of the Board and (ii) to the extent that shareholder approval may
be required by law,  including,  but not  limited to, the  requirements  of Rule
16b-3 under the Exchange Act, or any successor rule or regulation.

25.  Change in Control and Change in Ownership

         (a) Background.  All  Participants  shall be eligible for the treatment
afforded  by this  paragraph  25 if there is a Change in  Ownership  or if their
employment terminates within two years following a Change in Control, unless the
termination is due to (i) death;  (ii)  disability  entitling the Participant to
benefits under his  employer's  long-term  disability  plan;  (iii) Cause;  (iv)
resignation  by the  Participant  other than for Good Reason;  or (v) retirement
entitling the Participant to benefits under his employer's retirement plan.

         (b) Vesting and Lapse of Restrictions. If a Participant is eligible for
treatment under this paragraph 25, (i) all of the terms and conditions in effect
on any unexercised,  unearned, unpaid or deferred Awards shall immediately lapse
as of the Acceleration  Date; (ii) no other terms or conditions shall be imposed
upon any  Awards  on or after  such  date,  and in no event  shall  any Award be
forfeited  on or after such date;  and (iii) all of his  unexercised,  unvested,
unearned   and/or   unpaid  Awards  or  any  other   outstanding   Awards  shall
automatically  become one hundred  percent (100%) vested  immediately  upon such
date.

         (c) Dividends and Dividend  Equivalents.  If a Participant  is eligible
for  treatment  under  this  paragraph  25, all unpaid  dividends  and  dividend
equivalents and all interest accrued thereon,  if any, shall be treated and paid
under this  paragraph  25 in the  identical  manner and time as the Award  under
which such dividends or dividend equivalents have been credited. For example, if
upon a Change in Ownership,  an Award under this paragraph 25 is to be paid in a
prorated fashion,  all unpaid dividends and dividend equivalents with respect to
such Award shall be paid  according to the same  formula  used to determine  the
amount of such prorated Award.

         (d)  Treatment  of  Performance  Units  and  Performance  Shares.  If a
Participant  holding either  performance units or performance shares is eligible
for  treatment  under this  paragraph 25, the  provisions of this  paragraph (d)
shall determine the manner in which such  performance  units and/or  performance
shares shall be paid to him. For purposes of making such payment,  each "current
performance  period"  (defined  to  mean  a  performance  period  or  term  of a
performance unit or performance share which period or term has commenced but not
yet ended),  shall be treated as terminating upon the Acceleration Date, and for
each such "current  performance period" and each "completed  performance period"
(defined  to  mean a  performance  period  or  term  of a  performance  unit  or
performance  share which has ended but for which the  Committee  has not, on the
Acceleration  Date,  made a  determination  as to whether and to what degree the
performance or service objectives for such period have been attained),  it shall
be assumed that the  performance or service  objectives  have been attained at a
level  of  one  hundred  percent  (100%)  or  the  equivalent  thereof.  If  the
Participant is  participating in one or more "current  performance  periods," he
shall be considered to have earned and, therefore,  to be entitled to receive, a
prorated  portion  of the  Awards  previously  granted  to  him  for  each  such
performance period. Such prorated portion shall be determined by multiplying the
number of performance  shares or performance  units, as the case may be, granted
to the Participant by a fraction,  the numerator of which is the total number of
whole and partial  years (with each partial year being  treated as a whole year)
that have  elapsed  since  the  beginning  of the  performance  period,  and the
denominator of which is the total number of years in such performance  period. A
Participant in one or more "completed  performance  periods" shall be considered
to have earned and, therefore, be entitled to receive all the performance shares
and performance units previously granted to him during each performance period.

         (e)  Valuation of Awards.  If a  Participant  is eligible for treatment
under this paragraph 25, his Awards  (including  those earned as a result of the
application  of  paragraph  25(d)  above)  shall be valued and cashed out on the
basis of the Change in Control Price.

         (f) Payment of Awards. If a Participant is eligible for treatment under
this  paragraph  25,  whether or not he is still  employed  by the  Company or a
Subsidiary,  he shall be paid,  in a single  lump sum cash  payment,  as soon as
practicable but in no event later than 90 days after the Acceleration  Date, for
all outstanding  Units of Common Stock,  Independent and Combination SARs, stock
options (including incentive stock options),  performance units (including those
earned as a result of the application of paragraph 25(d) above), and performance
shares  (including  those earned as a result of paragraph 25(d) above),  and all
other outstanding  Awards,  including those granted by the Committee pursuant to
its authority under paragraph 3(h) hereof.

         (g) Deferred  Awards.  If a Participant is eligible for treatment under
this  paragraph 25, all deferred  Awards for which payment has not been received
as of the  Acceleration  Date shall be paid in a single lump sum cash payment as
soon as  practicable,  but in no event  later than 90 days after such date.  For
purposes of making such payment,  the value of all Awards which are  stock-based
shall be determined by the Change in Control Price.

         (h)  Miscellaneous.  Upon a Change in Control or a Change in Ownership,
(i) the provisions of paragraphs 16, 20 and 21 hereof shall become null and void
and of no force and effect  insofar as they apply to a Participant  who has been
terminated under the conditions described in (a) above; and (ii) no action shall
be taken which would affect the rights of any  Participant  or the  operation of
the Plan with  respect  to any Award to which the  Participant  may have  become
entitled hereunder on or prior to the date of the Change in Control or Change in
Ownership  or to which he may  become  entitled  as a result  of such  Change in
Control or Change in Ownership.

         (i) Legal  Fees.  The  Company  shall pay all  legal  fees and  related
expenses  incurred by a Participant in seeking to obtain or enforce any payment,
benefit or right he may be  entitled to under the Plan after a Change in Control
or Change in Ownership;  provided, however, the Participant shall be required to
repay  any such  amounts  to the  Company  to the  extent  a court of  competent
jurisdiction  issues  a  final  and  non-appealable   order  setting  forth  the
determination  that the  position  taken by the  Participant  was  frivolous  or
advanced in bad faith.

26.  No Right, Title or Interest in Company Assets

         No  Participant  shall have any rights as a stockholder  as a result of
participation  in the Plan until the date of issuance of a stock  certificate in
his name,  and, in the case of  Restricted  Stock,  stock  options,  performance
shares  or  any  other  stock-based  grant,  such  rights  are  granted  to  the
Participant  under paragraph  10(c) hereof.  To the extent any person acquires a
right to receive payments from the Company under this Plan, such rights shall be
no greater than the rights of an unsecured creditor of the Company.SEVERANCE AGREEMENT, RELEASE AND WAIVER

         THIS  AGREEMENT  is  made  by and  between  National  Fuel  Gas  Supply
Corporation,  a Pennsylvania  corporation having offices at 10 Lafayette Square,
Buffalo,  New York 14203 ("National  Fuel"), and Mr. Richard Hare, 110 Foxmeadow
Lane, Orchard Park, NY 14127 ("Mr. Hare") on March 27, 2000.

         WHEREAS,  National Fuel and Mr. Hare (each a "party" collectively,  the
"parties")  mutually  desire that Mr. Hare shall retire from his positions  with
National  Fuel and its  affiliates,  and that each party shall  receive  certain
consideration,  on the terms set out in this  Severance  Agreement,  Release and
Waiver (this "Agreement");

         THE PARTIES THEREFORE AGREE AS FOLLOWS:

1.       As used within this Agreement, the terms "Company," "we," "our" or "us"
         collectively  refer to  National  Fuel and its parent,  subsidiary  and
         affiliated  companies,   other  related  entities,  and  successors  or
         assigns.  As  used  within  this  Agreement,   the  terms  "Mr.  Hare,"
         "employee," "you" or "your" refers to Richard Hare.

2.       You hereby resign,  effective  March 31, 2000, any and all positions as
         an officer,  director,  employee or equivalent  of any Company  entity.
         Your separation from employment is by mutual agreement  between you and
         the Company.  Your  employment with the Company will terminate on March
         31, 2000.

3.       The  Company  agrees  to  pay  you,  minus  all  applicable  taxes  and
         withholdings,  your regular pay and benefits up to and including  March
         31, 2000.

4.       You have  voluntarily  decided to apply for early  retirement  and will
         receive your accrued  benefit  under the terms of the National Fuel Gas
         Company  Retirement  Plan (the  "Retirement  Plan")  beginning April 1,
         2000.  The annual  benefit that you will receive  under the  Retirement
         Plan will be  eighty-one  thousand  two hundred two and 63/100  dollars
         ($81,202.63),  if you  receive  benefits  in the form of a single  life
         annuity   under  the   Retirement   Plan,   payable  in  equal  monthly
         installments.  Your  benefits will be reduced if you elect to receive a
         different form of benefit under the Retirement Plan.

5.       You may take any  accrued  vacation  you  desire in March  2000.  As of
         February 15, 2000, you had four weeks of vacation accrued.  You will be
         paid on or before the first  business  day which is at least eight days
         after you sign this  Agreement  for vacation  which had accrued but not
         been used by March 31, 2000.

6.       In complete  satisfaction of all Company obligations under the National
         Fuel Gas Company Executive  Retirement Plan (the "ERP"),  including any
         obligations  related to your December 1999 election to receive the lump
         sum benefit under the ERP, the Company agrees to pay you, and you agree
         to accept,  the sum of one million two  hundred  ninety-eight  thousand
         forty  dollars  (US$1,298,040).  Such  payment  shall be made to you by
         check  hand-delivered  to you at 10  Lafayette  Square on or before the
         first  business  day which is at least  eight  days after you sign this
         Agreement.

7.       The Company  agrees to pay you, by check mailed to your home address or
         other location designated by you, the following sums:

         (a)      one hundred  seventeen  thousand  four  hundred  four  dollars
                  (US$117,404), on or before March 1, 2001;

         (b)      one hundred  seventeen  thousand  four  hundred  four  dollars
                  (US$117,404), on or before March 1, 2002;

         (c)      one hundred  seventeen  thousand  four  hundred  four  dollars
                  (US$117,404), on or before March 1, 2003;

         (d)      one hundred  seventeen  thousand  four  hundred  four  dollars
                  (US$117,404), on or before March 1, 2004; and

         (e)      one hundred  seventeen  thousand  four  hundred  four  dollars
                  (US$117,404), on or before March 1, 2005.

         In the  event of your  death  prior to March  1,  2005,  any  remaining
         payments will be payable to your Estate when due.

8.                (a)  Beginning  April 1, 2000,  you will be entitled to family
                  medical  coverage  under the Company's  Traditional  Indemnity
                  Plan  for  non-bargaining  unit  retirees,   as  well  as  the
                  Prescription  Drug Plan. The Company will withhold the retiree
                  medical  contribution  of $48  per  month  from  your  monthly
                  Retirement Plan benefit,  which  contribution rate will remain
                  in effect for the duration of your coverage.

         (b)      If you  predecease  your  spouse,  your spouse will be offered
                  COBRA  continuation for medical and prescription drug coverage
                  under the  Traditional  Plan for a period of 36 months  (or if
                  your death occurs prior to March 31, 2001,  then through March
                  31, 2004) at the COBRA rates in effect from time to time. Such
                  COBRA  coverage must be elected in order for your spouse to be
                  eligible for the Executive Medical Plan coverage  continuation
                  described in paragraph  8(d),  as the  Executive  Medical Plan
                  supplements the Traditional Indemnity Plan.

         (c)      Beginning  April 1,  2000,  the  Company  Dental  Plan will be
                  available  to you under COBRA for a period of 18 months at the
                  monthly COBRA rate of $75.32 for family coverage. However, you
                  (or after your death, your spouse) will be permitted to extend
                  your dental  coverage beyond the 18-month period through March
                  31, 2004 as described in paragraph 8 (d).

         (d)      The Company  will  provide  you,  for the period  beginning on
                  April 1,  2000,  and  ending on March 31,  2004,  with  family
                  medical,  dental  and  prescription  drug  coverage  under the
                  Company's  Executive  Medical  Plan,  under the same terms and
                  conditions as would be available had you remained  employed by
                  the  Company  as an  officer,  except  that in order to retain
                  supplemental  dental coverage under the Executive Medical Plan
                  you must continue to pay the monthly Dental Plan COBRA premium
                  referenced  in  paragraph  8(c) for the duration of the period
                  hereunder.  You  will  pay to the  Company  the  same  monthly
                  contributions  for  Executive  Medical  Plan  coverage  as are
                  required of active officers from time to time. In the event of
                  your death prior to March 31,  2004,  the Company will provide
                  your spouse with the same Executive Medical Plan coverage on a
                  "single" basis for the balance of such period,  subject to the
                  same  terms  and  conditions,  including  her  payment  to the
                  Company  of the same rate of  contribution  as in effect  from
                  time to time for single  coverage  for active  officers of the
                  Company. You (or after your death, your spouse) will be billed
                  monthly for the  contributions  due for such  coverage and the
                  COBRA dental coverage should you elect it, and payment will be
                  due the Company within 30 days after the receipt of each bill.

         (e)      In order to obtain the coverage  described in this  paragraph,
                  you must  complete,  sign and return to the  Company the COBRA
                  election  forms  to be  furnished  by the  Company.  Executive
                  Medical  Plan and Dental Plan  coverage  will not be available
                  after March 31, 2004.

9.       The Company  agrees,  upon the  effective  date of this  Agreement,  to
         extend the time within which your outstanding stock appreciation rights
         and nonqualified stock options may be exercised,  to the full extent of
         the original term of each such award,  notwithstanding your retirement.
         The Company  hereby offers to convert,  upon the effective date of this
         Agreement,  your  outstanding  incentive  stock options to nonqualified
         stock options,  with the exercise  period also extended as described in
         the preceding sentence.  The Company and you acknowledge and agree that
         Section 20 of the  National  Fuel Gas  Company  1993 and 1997 Award and
         Option  Plans  presently  gives the  Company  the right to forfeit  any
         unexercised,  unearned or unpaid  Awards  under those plans  (including
         stock options,  SARs and unvested  restricted stock) if you perform any
         act or engage in any activity  which in the opinion of the Committee is
         inimical  to the best  interests  of the  Company  or if you  engage in
         certain  competitive  activity.  The Company and you further agree that
         you will be  considered  to have  engaged in conduct  that  constitutes
         grounds for the Company to exercise  its right to forfeit  unexercised,
         unearned or unpaid Awards under those plans  (including  stock options,
         SARs and the 4,492  shares of  restricted  stock  scheduled  to vest on
         January 2, 2001 referred to in paragraph 10 of this  Agreement) only if
         you  violate  the  provisions  of  paragraph  16(c),  17 or 19 of  this
         Agreement.

10.      The Company agrees that your 4,492 shares of unvested  restricted stock
         will  vest as  scheduled  on  January  2,  2001,  notwithstanding  your
         retirement  (which would  otherwise  have caused a  forfeiture  of that
         stock),  subject only to potential forfeiture as described in paragraph
         9 of this Agreement.

11.      National  Fuel hereby  offers to sell you the 1999 Jeep,  National Fuel
         vehicle #32056,  as is, without  warranties of any kind other than such
         manufacturer's  warranties, if any, as can be passed on to you, for the
         sum  of  twenty-seven   thousand  nine  hundred   twenty-five   dollars
         ($27,925),  payable  in  cash  upon  the  tender  to you of the  signed
         certificate of title and a signed receipt for the purchase  price.  You
         will be responsible  for payment of the sales tax on the purchase price
         when you register the vehicle in your name. This offer will remain open
         through April 15, 2000.

12.      National Fuel  represents  and warrants that the Company has awarded to
         you under the  National  Fuel Gas Company  1997 Award and Option  Plan,
         twenty-five  thousand  (25,000) stock options on the terms described in
         the award  letters  attached  as  Exhibit 1.  These  options  have been
         awarded in consideration of your promises under this Agreement.

13.      Regarding  the Split Dollar  Insurance  Agreement by and among you, the
         trustees of your life  insurance  trust and the Company dated August 9,
         1999 (the "Split Dollar  Agreement"),  the Company and you  acknowledge
         and agree that the  Company  is not  obligated  to make,  and shall not
         make,  the premium  payment which would have been due April 1, 2000, if
         you had not retired.  The Split Dollar Agreement shall otherwise remain
         in force according to its terms,  except that you will be considered to
         have  engaged in  "Competition"  for the purposes of Section IVB of the
         Split Dollar  Agreement only if you violate the provisions of paragraph
         17 of this  Agreement.  The Company and you  acknowledge and agree that
         your rights under the Split  Dollar  Agreement  and the life  insurance
         policy  referred to therein  shall not be subject to  forfeiture  after
         March 31, 2003.

14.      In consideration  for the promises set forth in paragraphs 5, 6 (to the
         extent, if any, that the amount payable to you thereunder  exceeds what
         you  would  have  been  entitled  to  receive  in the  absence  of this
         Agreement)  7,  8(d) and 9 through  12 of this  Agreement,  you  hereby
         knowingly and voluntarily release and unconditionally waive any and all
         demands, claims and causes of action, of whatever kind or nature, which
         you ever had, now have or which you, your successors,  assigns,  heirs,
         executors or administrators can, shall or may have for any reason as of
         the date you execute this  Agreement  against the Company or any of the
         Company's predecessors, successors, assigns, executors, administrators,
         directors,  officers,  employees and agents (collectively  "Releasees")
         regarding  your  employment  and its  termination,  including,  but not
         limited to:

         (a)      all demands,  claims and causes of action for wages,  benefits
                  (including  benefits under the ERP),  bonuses,  severance pay,
                  perquisites, or back wages, benefits or bonuses other than set
                  forth in this  Agreement  or in any benefit  plan,  program or
                  policy of the  Company  not  specifically  referred to in this
                  Agreement;

         (b)      all  demands,  claims  and  causes  of action  under  state or
                  federal civil rights and anti-discrimination laws, regulations
                  or orders,  including  Executive Order 11246, Title VII of the
                  Civil Rights Act of 1964, the Age Discrimination in Employment
                  Act of 1967, the Americans with  Disabilities  Act of 1990 and
                  the New York Human Rights Law;

         (c)      all demands,  claims and causes of action that your employment
                  or  its   termination   violated   any   alleged   contractual
                  relationship  with the Company or was in any way unreasonable,
                  wrongful, or in violation of any Company policy; and

         (d)      all demands,  claims and causes of action for mental, physical
                  or emotional  distress or harm, or defamation  relating in any
                  way to your employment or its termination.

15.      In conjunction with the provisions of paragraph 14 herein,  the Company
         and you specifically acknowledge and agree that:

         (a)      you do not waive any claim which may arise after the execution
                  of this Agreement;

         (b)      but for this  Agreement,  you  would  not be  entitled  to the
                  severance  pay and the other  benefits set forth in paragraphs
                  5, 6 (to the extent,  if any,  that the amount  payable to you
                  thereunder  exceeds  what you  would  have  been  entitled  to
                  receive  in the  absence  of this  Agreement)  7,  8(d)  and 9
                  through 12 of this Agreement;

         (c)      the  Company  has  advised  you to review the  Agreement,  and
                  specifically  the release  contained  in  paragraph 14 herein,
                  with your attorney prior to signing this Agreement;

         (d)      you and  your  attorney  were  given a  working  draft of this
                  Agreement on March 16, 2000 and you  understand you may review
                  this  Agreement  for up to  twenty-one  (21) days before being
                  required to execute this Agreement.  You and the Company agree
                  that the time period for you to consider this Agreement before
                  signing it will not be restarted  if any changes,  material or
                  non-material,  are made to the  Agreement  after  the date you
                  first received it.

         (e)      you may terminate  this Agreement at any time within seven (7)
                  days after your  execution of this  Agreement.  This Agreement
                  shall not become  effective until the time to terminate it has
                  expired.

16.      As a part of the  consideration  for the compensation  provided in this
         Agreement  and for the other  covenants  made by National  Fuel in this
         Agreement, you agree to the following confidentiality provisions:

         (a)      You agree that the contents of this Agreement are confidential
                  and will not be disclosed to any third party,  other than your
                  attorney,  your wife, tax advisor,  financial advisor(s),  the
                  Internal Revenue Service, the New York State Tax Department or
                  the tax  authority  of any state or locality in which you are,
                  or may be, subject to income tax,  unless you are compelled to
                  do so by a court  having  jurisdiction  over such  matter  (in
                  which case you will  notify the Company as soon as possible of
                  the activity and cooperate  with the Company in seeking relief
                  from such  compulsion)  or as may be necessary  in  connection
                  with the  enforcement of this Agreement.  Notwithstanding  the
                  previous  sentence,  you may disclose the  provisions  of this
                  paragraph  16  and   paragraphs   17  and  19  hereof  to  any
                  prospective  employer  or any other  person or entity for whom
                  you propose to provide services.

         (b)      You agree to return any and all corporate  documents,  records
                  or  copies  of the  same,  information  or  property  in  your
                  possession,   except   those   relating  to  either  your  own
                  employment,  such as payroll stubs and benefits statements, or
                  your  shareholdings  in the Company.  Your performance of this
                  obligation  is a condition  precedent  to your  receipt of any
                  severance payments or other benefits under paragraphs 5, 6 (to
                  the extent,  if any, that the amount payable to you thereunder
                  exceeds  what you would have been  entitled  to receive in the
                  absence  of this  Agreement)  7, 8(d) and 9 through 12 of this
                  Agreement.

         (c)      You shall  hold in a  fiduciary  capacity  for the  benefit of
                  National Fuel any and all of the  Company's  trade secrets and
                  confidential  and proprietary  information in your possession.
                  You shall not,  without the prior written  consent of National
                  Fuel Gas Company,  unless compelled  pursuant to an order of a
                  court or other body having  jurisdiction  over such matter (in
                  which case you will  notify the Company as soon as possible of
                  the activity and cooperate  with the Company in seeking relief
                  from such compulsion),  at any time, utilize or communicate or
                  divulge to anyone other than the Company and those  designated
                  by it, any of the Company's trade secrets and confidential and
                  proprietary information.

         (d)      The  prohibition  against  your  use  of the  Company's  trade
                  secrets and  confidential and proprietary  information,  other
                  than for the benefit of  National  Fuel,  includes  but is not
                  limited to the  exploitation  of any products or services that
                  embody or are derived from  National  Fuel's trade  secrets or
                  confidential and proprietary information.

         (e)      You agree to comply with (i) any and all  applicable  laws and
                  regulations  regarding  your  actions and  omissions  while in
                  possession  of  any  material  inside  information  about  the
                  Company  which you may have at any time;  and (ii) any and all
                  confidentiality  agreements that the Company entered into with
                  third  parties,  of which  you were  made  aware  during  your
                  employment  by the Company,  under which the Company  promised
                  that  its   Representatives   (including   you)   would   keep
                  confidential   certain   information    described   in   those
                  confidentiality agreements.

         (f)      You represent,  warrant and agree that you have no proprietary
                  or  ownership  rights or title to any of the  Company's  trade
                  secrets or  confidential  and  proprietary  information and no
                  legal right to use, disclose,  disseminate,  or publish any of
                  the Company's  trade secrets or  confidential  and proprietary
                  information in any locality.  You acknowledge that if you were
                  to  work  for  or  advise  any  entity  in  connection  with a
                  potential acquisition of or merger with the Company, you would
                  in the course of that work  inevitably use or disclose some of
                  the Company's  trade secrets or  confidential  and proprietary
                  information.

         (g)      The   Company'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, records and
                  "writings"  as  hereinafter  defined  pertaining  to  National
                  Fuel's  methods or practices of doing  business and  marketing
                  its  services  and  products,  whether  or  not  developed  or
                  prepared  by you  during  the  term  of your  employment  with
                  National  Fuel.  As used in the preceding  sentence,  the term
                  "writings"  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.   Notwithstanding   the
                  foregoing,  the Company's trade secrets and  confidential  and
                  proprietary  information  shall mean only such  information or
                  material not generally  known to the public (other than by act
                  of you or your representatives in breach of this Agreement).

17.      In order to protect  and  safeguard  the  Company's  trade  secrets and
         confidential  information,  you agree that, during the period beginning
         April 1, 2000 and ending March 31, 2003:

         (a)      you will not,  directly  or  indirectly  and without the prior
                  written consent of National Fuel Gas Company,  engage in or be
                  interested  in  (as  owner,  partner,  shareholder,  employee,
                  director, agent, consultant or otherwise),  any business which
                  is a "competitor" of the Company, as hereafter defined, except
                  as otherwise permitted under paragraph 17(c) below;

         (b)      for purposes of this Agreement,  a "competitor" of the Company
                  is any 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 the  transportation,  purchase,
                  brokering,  marketing,  or  trading  of  natural  gas or other
                  energy  products  or  services  which are  competitive  to the
                  Company's  products or  services,  any of which was engaged in
                  within 50 miles of the geographic area in which the Company is
                  engaged in such competitive business;

         (c)      the terms of this paragraph 17 shall not apply to:

                  (i)      your present or future  investments in the securities
                           of companies listed on a national securities exchange
                           or  traded  on  the  over-the-counter  market  to the
                           extent such investments do not exceed 2% of the total
                           outstanding shares of such company,

                  (ii)     your employment with or rendering consulting services
                           to  a  competitor   of  the  Company   provided  such
                           employment or consulting  service is limited to areas
                           unrelated to the transportation, purchase, brokering,
                           marketing  or trading of natural gas or other  energy
                           products or  services  which are  competitive  to the
                           Company's products or services,

                  (iii)    your  employment  with  or  rendering  of  consulting
                           services to a competitor of the Company provided such
                           employment or consulting service is limited to:

                           (A)      public   utility  rate  cases  before  state
                                    utility  commissions  in  states  where  the
                                    Company owns no public utility;

                           (B)      FERC  rate  cases  which do not  amount to a
                                    "proceeding"   as   defined   in   paragraph
                                    19(b)(i);

                           (C)      natural gas storage or pipeline  projects or
                                    matters  serving or  intending to serve only
                                    customers  not located in New  England,  New
                                    York,  Pennsylvania,  New Jersey,  Virginia,
                                    the  District  of   Columbia,   Maryland  or
                                    Delaware;

                           (D)      marketing of natural gas to be delivered and
                                    consumed   more  than  50  miles   from  any
                                    geographic area in which the Company markets
                                    natural gas;

                           (E)      electric generation,  marketing or brokering
                                    into any  electric  transmission  grid other
                                    than  such  grids  into  which  the  Company
                                    generates,  markets or brokers  electricity;
                                    and

                           (F)      production of natural gas or oil, or sale of
                                    such  production at the wellhead,  more than
                                    50 miles from any  geographic  area in which
                                    the Company produces natural gas or oil; or

                   (iv)    your  engagement  in or interest in any business with
                           the  prior  written  consent  of  National  Fuel  Gas
                           Company.

         (d)      The  parties   acknowledge   and  agree  that  the   foregoing
                  restrictions  contain  reasonable  limitations as to the time,
                  geographical  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 the Company.

18.      In  consideration  for  your  promises  set  forth  in this  Agreement,
         National Fuel agrees that:

         (a)     any inquiries by prospective employers or third parties will be
                 handled  as per  Company  policy;  that is,  the  dates of your
                 employment and job title will be the only information  released
                 by the Company;

         (b)      the contents of this Agreement are  confidential;  the Company
                  shall not disclose  the  contents of this  Agreement to anyone
                  other than the  directors,  officers,  employees and agents of
                  the  Company  or its  affiliates  who need to know  except  as
                  required, in the opinion of counsel, to comply with applicable
                  law, regulation or order;

         (c)      National Fuel warrants and represents  that this Agreement has
                  been  (i)  approved  by  unanimous   written  consent  of  the
                  Compensation  Committee,   which  consent  delegates,  to  the
                  fullest  extent   permissible   by  applicable   law,  to  the
                  Arbitrator  the  decisions of whether to cancel your  unvested
                  restricted stock, unexercised stock options and/or unexercised
                  SARs as a result of action or inaction  constituting  a breach
                  of this Agreement by you; and (ii) all obligations  imposed by
                  this Agreement on the Company are duly  authorized and legally
                  binding on National  Fuel Gas Company in the same manner as if
                  National Fuel Gas Company were a party to this Agreement.

         (d)     National   Fuel,   on  behalf  of  the  Company  and  with  due
                 authorization   from  the   Company,   hereby   knowingly   and
                 voluntarily  releases  and  unconditionally  waives any and all
                 demands,  claims and causes of action  against you, of whatever
                 kind or nature, which the Company ever had, now has or which it
                 or its  successors  can, shall or may have for any reason as of
                 the date you  execute  this  Agreement,  except  for claims for
                 fraud  or  other  intentional   misconduct  discovered  by  the
                 Company's  officers after the execution of this Agreement;  the
                 Company  does not  release  or waive any claim  which may arise
                 after the execution of this Agreement; and

         (e)     the Company  shall not  publicly or  privately  disparage  you,
                 either  personally  or  professionally;  the parties agree that
                 nothing in this  paragraph  shall be  construed  to prevent any
                 officer of the  Company or any  subsidiary  or  affiliate  from
                 discussing your  performance  internally in the ordinary course
                 of business.

19.      In further  consideration for the promises set forth in this Agreement,
         you agree that:

         (a)      you will not publicly or privately  disparage the Company,  or
                  any of its subsidiaries or affiliates, including any aspect of
                  their respective business, products, employees,  management or
                  Board of Directors, in any manner which could adversely affect
                  the   business  of  the  Company  or  such   subsidiaries   or
                  affiliates; and

         (b)      you will not, directly or indirectly, take any action with the
                  purpose of interfering with, damaging or disrupting the assets
                  or  business  operations  or  affairs  of the  Company  or its
                  subsidiaries or affiliates;  without limiting the foregoing in
                  any  way,  it  shall be  conclusively  presumed  that you have
                  breached this subparagraph 19(b) if, without the prior written
                  consent of National Fuel Gas Company or other than at National
                  Fuel Gas Company's written request, you

                  (i)      voluntarily  participate  in any  rate  case,  claim,
                           litigation,  arbitration, mediation or administrative
                           proceeding affecting the revenue, expenses, assets or
                           liabilities of the Company other than:

                           (A)      an arbitration under this Agreement, or

                           (B)      any    claim,    litigation,    arbitration,
                                    mediation or administrative  proceeding that
                                    does not  relate to a rate  matter,  a claim
                                    shared by other  ratepayers  or customers of
                                    the  Company,  or a claim you have  released
                                    under this Agreement;

                           (collectively, a "Proceeding");

                   (ii)    voluntarily  render any assistance in the preparation
                           or development of any position in a Proceeding; or

                  (iii)    submit any shareholder proposal, motion or resolution
                           to the Company to be  discussed  or voted upon by the
                           Company's shareholders.

         (c)      you will not,  directly  or  indirectly  and without the prior
                  written  consent  of  National  Fuel Gas  Company,  work  for,
                  consult  with,  advise  or  represent  (as  employee,   agent,
                  consultant or  otherwise),  any business which is a "customer"
                  of the  Company,  as  hereafter  defined,  with respect to any
                  matter or activity  which would tend to reduce the quantity or
                  price of  services or  commodities  provided by the Company to
                  that business;

         (d)      for purposes of this Agreement, a "customer" of the Company is
                  any  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, purchased commodities, goods or services from the
                  Company; and

         (e)      you  will  not  induce  or  otherwise   entice,   directly  or
                  indirectly,  any  employee  or officer of the Company to leave
                  the  Company,  nor  shall  you  attempt  to  hire  any  of the
                  Company's employees or officers.

20.      You waive any and all rights to employment at the Company, agree not to
         knowingly  apply  for,  solicit,  seek or  otherwise  attempt to obtain
         employment with the Company,  and further agree that the Company is not
         or will not be at any time  under any  obligation  to employ  you.  You
         further  agree that if you should apply for  employment at the Company,
         the  Company  will  have  no  obligation  to  process  your  employment
         application  or to hire  you and  that  the  failure  to  process  your
         employment  application or to hire you shall not constitute a violation
         of any federal,  state or local law,  regulation  or order.  Nothing in
         this Agreement shall preclude you, however, from soliciting, seeking or
         otherwise  attempting to obtain  consulting work with the Company as an
         independent contractor, or from actually performing consulting services
         for the Company if retained by the Company,  it being  understood  that
         the Company is not and will not be under any  obligation  to engage you
         as a consultant.

21.      The parties  agree that the Company  will make  payments due under this
         Agreement  subject to FICA, any other applicable  employment taxes, and
         no more than the minimum  required  withholding  for income tax. If the
         Company  overwithholds  income tax from any such  payment,  the Company
         will  reimburse  you for the  time  value of such  overwithholding,  at
         simple  interest  at 6%  per  annum,  running  from  the  date  of  the
         overwithholding  until  April  15 of the  next  calendar  year.  If the
         Company  fails to withhold  the  minimum  amount of income tax from any
         payment to you, and it notifies you of such underwithholding,  you will
         reimburse  the  Company  the  minimum  amount  which  should  have been
         withheld, no later than the last day of the calendar year in which such
         underwithholding occurred.

22.      The  parties  agree that any  controversy  or claim  arising  out of or
         relating to this Agreement,  or the breach  thereof,  shall be promptly
         settled  by  binding  arbitration  as  described  in  Exhibit 2 of this
         Agreement. Judgment upon the award rendered by the Arbitrator(s) may be
         entered in any court having  jurisdiction  thereof.  The parties  agree
         that they will  faithfully  observe this  Agreement  and that they will
         abide by and perform any award rendered by the Arbitrator(s).

23.      The  Company  may  refuse to  process a Notice of  Exercise  of a stock
         option or SAR which you give the Company after the second  business day
         before the Company issues an Arbitration Notice,  pending resolution of
         the  arbitration.  If the Arbitrator  finds that you did not materially
         breach this Agreement,  the Arbitrator's award shall include provisions
         intended  to place you in the  position  you would have  occupied  (not
         including  consequential  damages) if the Company had timely  processed
         your  exercise(s).  Except as described in this  paragraph 23, the sole
         remedies available to the parties to enforce this Agreement are binding
         arbitration, and enforcement of the resulting awards and judgments.

24.      National Fuel, with due authorization from the Company, agrees that the
         Company  shall  indemnify  Mr.  Hare  if he  was  or is a  party  or is
         threatened  to be made a party to any pending,  threatened or completed
         civil,   criminal,   administrative  or  arbitrative  action,  suit  or
         proceeding  by reason of the fact that Mr. Hare is or was a director or
         officer  of the  Company,  or,  while an  officer  or  director  of the
         Company, is or was serving at the request of the Company as a director,
         officer,  trustee,  employee  or agent of another  foreign or  domestic
         corporation, or of any partnership, joint venture, sole proprietorship,
         employee  benefit plan, trust or other  enterprise,  whether or not for
         profit,  to the fullest extent  permitted and in the manner provided by
         the laws of the State of New Jersey.

25.      The parties  agree that the legal  invalidity  of any provision of this
         Agreement shall not make this Agreement void or unenforceable, and that
         in such case this  Agreement  shall be  construed  so as to preserve as
         much as possible of the parties'  respective  interests which motivated
         them to execute this  Agreement.  It is also agreed that this Agreement
         shall be  construed  and  enforced in  accordance  with the laws of the
         State of New York.  The  parties  acknowledge  that they have  mutually
         negotiated  all  provisions of this  Agreement  with the  assistance of
         counsel.  The  provisions of this Agreement  shall be  interpreted  and
         construed in accordance with their fair meanings,  and not strictly for
         or against  either  party,  regardless  of which party may have drafted
         this Agreement or any specific provisions.

26.      This Agreement, the option award document attached as Exhibit 1 and the
         arbitration  provisions  attached  as Exhibit 2  constitute  the final,
         complete  and  exclusive   agreement  between  National  Fuel  and  you
         regarding your employment and its termination. You do not rely upon any
         oral promises in signing this Agreement, and the only promises you rely
         on are  those  set  forth in  writing  herein.  This  Agreement  may be
         modified  or amended  only by a written  instrument  signed by National
         Fuel and you.

26.      This  Agreement  is personal to Mr. Hare and without the prior  written
         consent of National  Fuel Gas Company  shall not be  assignable  by him
         other  than by  will or the  laws of  descent  and  distribution.  This
         Agreement  shall  inure to the  benefit  of and be  enforceable  by Mr.
         Hare's legal representatives.

27.      This  Agreement  shall  inure to the  benefit  of and be  binding  upon
         National Fuel and its successors.

         IN WITNESS  WHEREOF,  each party has executed this  Agreement as of the
date indicated below.

NATIONAL FUEL GAS SUPPLY CORPORATION

By:   /s/ Philip C. Ackerman                         Date:  March 27, 2000
      --------------------------
Name:   Philip C. Ackerman
        ------------------------
Title:  Executive Vice President
        ------------------------

RICHARD HARE

/s/ Richard Hare                                     Date:  March 29, 2000
----------------                                            --------------

<PAGE>

                                    EXHIBIT 1
                                    ---------

<PAGE>

                                                     March 17, 2000

Richard Hare
110 Foxmeadow Lane
Orchard Park, NY 14127

Dear Mr. Hare:

         I am pleased to inform you that on March 17,  2000 (the  "option  grant
date") the  Compensation  Committee  ("Committee")  of the Board of Directors of
National Fuel Gas Company ("NFG")  granted to you (the "Grantee")  Non-Qualified
Stock  Options  ("Options"),  under the National Fuel Gas Company 1997 Award and
Option Plan (the "Plan"),  to purchase  twenty-five  thousand (25,000) shares of
Common Stock of NFG, One Dollar ($1.00) par value ("Common Stock") at a purchase
price of $41.5625 per share.

         Your new Options are described in the balance of this letter  agreement
("Award  Notice").  The  Plan  text  and the  Committee's  Administrative  Rules
("Rules")  govern the operation of the Plan, as well as the terms and conditions
of your  Options  granted  under  the  Plan,  and  are  incorporated  herein  by
reference.

         Your Options may be exercised only as follows:

Five thousand (5,000) of your Options may be exercised in whole or in part on or
after April 1, 2005.

                  Another five thousand (5,000) of your Options may be exercised
                  in whole or in part on or after April 1, 2006.

                  Another five thousand (5,000) of your Options may be exercised
                  in whole or in part on or after April 1, 2007.

                  Another five thousand (5,000) of your Options may be exercised
                  in whole or in part on or after April 1, 2008.

                  The  final  five  thousand  (5,000)  of  your  Options  may be
                  exercised in whole or in part on or after April 1, 2009.

<PAGE>

Mr. Richard Hare
Page 2
March 17, 2000

           However,  upon a Change in  Control  (as  defined  in the Plan)  your
           Options will vest, be valued and cashed out, and the Company will pay
           you,  all  in the  same  manner  as if you  were  then  eligible  for
           treatment  under Section 25 of the Plan.  In any event,  your Options
           will  expire at the end of the day on March  31,  2010 and may not be
           exercised  thereafter.  Your  Options  will be  forfeited  and expire
           sooner if:

         you fail or refuse to execute, by April 15, 2000, an agreement which is
         also  executed by  National  Fuel Gas Supply  Corporation  by which you
         voluntarily  elect  to  retire  as of  April 1,  2000  (the  "Severance
         Agreement"); or

         having executed the Severance  Agreement,  you subsequently  exercise a
         legal right to revoke the Severance Agreement; or

         as a result of your breach of the  Severance  Agreement,  an arbitrator
         authorizes  the forfeiture of some or all of your Options in accordance
         with the arbitration provisions of the Severance Agreement.

Exercise of Options
-------------------

To  exercise  your  Options,  you must  deliver to the  Secretary  or  Assistant
Secretary of NFG written  notice of exercise  specifying the number of shares to
be purchased (a "Notice of  Exercise").  Your delivery of the written  notice of
exercise creates your binding  commitment to pay the full purchase price for the
shares. You may pay the purchase price with cash, with  already-owned  shares of
Common Stock,  with a combination  of cash and shares,  or pursuant to "cashless
exercise" procedures  established by the Committee.  Checks should be payable to
NFG. Already-owned shares of Common Stock must be delivered in transferable form
and will be valued at their Fair  Market  Value (as  defined in the Plan) on the
date of exercise.  You may be required to  represent  to NFG in writing,  at the
time of each  exercise of these  Options,  that the shares of Common Stock being
purchased are being acquired for investment and not with a view to distribution.
Also,  NFG may impose  restrictions  on your  purchase of shares of Common Stock
pursuant to exercise of such Options if the Committee  should determine that the
shares must first be listed,  registered or qualified, or a governmental consent
obtained.  Certificates for shares purchased will be delivered to you as soon as
practicable after you exercise your Options.

<PAGE>

Mr. Richard Hare
Page 3
March 17, 2000

         NFG may, in its sole discretion, refuse to process a Notice of Exercise
of an Option which you give NFG after the second  business  day before  National
Fuel Gas Supply  Corporation  issues an  Arbitration  Notice under the Severance
Agreement, pending resolution of the arbitration.

Authority of Committee
----------------------

         The Committee has the authority,  in its sole discretion,  to interpret
the Plan and all Options granted thereunder,  to establish rules and regulations
relating to the Plan and to make all other  determinations it believes necessary
or advisable for the  administration  of the Plan. The scope of the  Committee's
authority is more fully described in the Plan. All determinations and actions of
the Committee are final, conclusive and binding on you, subject to the terms and
provisions of the Severance Agreement.

Miscellaneous
-------------

Any  capitalized  term used but not defined in this Award  Notice shall have the
same  meaning  as it is  defined  in the Plan or in the  Committee's  rules  and
regulations as in effect as of the date hereof.

         You have no right to assign or transfer your  Options,  except by will,
by the laws of descent and distribution, or as otherwise permitted in the Plan.

         Nothing  in this  Award  Notice  or in the Plan  gives you any right to
continue in the employment of the Company.

         This Award  Notice  shall be binding on and inure to the benefit of the
Company  (and its  successors  and  assigns)  and you  (and  your  heirs,  legal
representatives and estate). This Award Notice shall be governed,  construed and
enforced in accordance with the Plan and with the laws of the State of New York.

         This  Award  Notice  together  with  the  pertinent  provisions  of the
Severance  Agreement  constitutes the entire agreement  between the parties with
respect to the subject matter hereof. With respect to unexercised Options,  this
Award  Notice may be  unilaterally  amended or  modified  by the  Committee,  as
permitted by the Plan or the Rules, to the extent it deems appropriate,  but may
not  be  amended  or  modified   without  your  consent  if  such  amendment  or
modification  is adverse to you.  Except as otherwise  provided in the preceding
sentence, this Award Notice may not be modified, amended, renewed or terminated,
nor may any term or condition,  or breach of any term or  condition,  be waived,
except in writing signed by the person or persons sought to be

<PAGE>

Mr. Richard Hare
Page 4
March 17, 2000

bound by such  modification,  amendment,  renewal,  termination  or waiver.  Any
waiver of any term or condition or breach  thereof  shall not be a waiver of any
other term or condition,  or of the same term or condition for the future, or of
any subsequent breach.

         At the time of the exercise of your Options, the Company is entitled to
deduct from the shares of Common Stock being  acquired upon the exercise of your
Options,  or  require  you to pay to it prior to and as a  condition  of issuing
shares of Common Stock, the amount of all applicable income and employment taxes
required by law to be withheld with respect to such exercise. Alternatively, you
may pay such taxes  respecting  Option  exercises by  delivering  to the Company
shares of Common  Stock  having a Fair Market  Value equal to the amount of such
taxes.

         Please be aware that it may be  inappropriate  to exercise your Options
at certain times, as a result of the federal securities laws.

         In the  event  of the  invalidity  of any  part  or  provision  of this
agreement, such invalidity shall not affect the enforceability of any other part
or provision hereof.

Acceptance
----------

         If  the  foregoing  is  acceptable  to  you,  kindly  acknowledge  your
acceptance by signing both copies of this letter and returning one to Anna Marie
Cellino.

                                    Very truly yours,

                                    NATIONAL FUEL GAS COMPANY

                                    By:_____________________________
                                              B. J. Kennedy
                                       Chief Executive Officer and
                                         Chairman of the Board

AGREED TO AND ACCEPTED

this ____ day of March, 2000.

---------------------------
         Grantee

<PAGE>

                                    EXHIBIT 2
                                    ---------

<PAGE>

                                   ARBITRATION
                                   -----------

1. The  parties  agree that either  party may demand  that a dispute  under this
Agreement shall be resolved by binding arbitration. The parties intend that this
right to binding  arbitration be enforceable in accordance  with applicable law,
including Article 75 of the New York Civil Practice Law and Rules.

2. The parties intend that the Arbitrator  shall be Mr. John M. Brown,  formerly
Vice Chairman of the Company, unless either party objects to his serving in that
capacity as provided in paragraph 5 below. This Exhibit 2 sets out the procedure
for  arbitration if Mr. Brown is unable or unwilling to serve or if either party
duly objects to his serving as Arbitrator.  Applicable law grants some rights to
seek to have an Arbitrator appointed or removed.

3. Any party wishing to begin arbitration  regarding this Agreement shall notify
the other party of its  intention to  arbitrate  in a writing (the  "Arbitration
Notice") which briefly describes the issue(s).

4. An Arbitration  Notice,  and any other notice under this Agreement,  shall be
deemed  given  when it is  delivered  in  person,  or when it is sent by prepaid
Federal  Express or certified mail addressed as follows,  or to another  address
specified by the receiving party:

                           Richard Hare              National Fuel Gas Company
                           110 Foxmeadow Lane        President
                           Orchard Park, NY 14127    10 Lafayette Square
                                                     Buffalo, NY 14203

                           copy to:
                           Samuel J. Palisano
                           Jaeckle Fleischmann & Mugel
                           Fleet Bank Building
                           12 Fountain Plaza
                           Buffalo NY  14202

The date on which an  Arbitration  Notice is deemed  given is referred to as the
"Notice Date").

5. Within twenty (20) days after the Notice Date, either party may object to Mr.
Brown serving as Arbitrator by giving written  notice to the other party.  If no
such  objection is filed during such period,  the party  initiating  arbitration
shall promptly send written notice to Mr. Brown requesting:

         (a)      Mr. Brown to serve as Arbitrator in accordance  with the terms
                  set out in this Agreement, which shall be attached, and

         (b)      that Mr. Brown notify the parties of his  willingness to serve
                  as Arbitrator.

6. If Mr.  Brown agrees in writing to serve on the terms set out in this Exhibit
2, then he shall be the Arbitrator on the following terms:

         (a)      The  Arbitrator  shall  be  paid a fee of  one  hundred  fifty
                  dollars per hour  ($150/hr)  plus  reasonable  expenses;  each
                  party  shall pay  one-half  (1/2) of the fees and costs of the
                  Arbitrator promptly upon receipt of invoices for same.

         (b)      The  Arbitrator  shall  perform  the  Arbitrator's  duties  in
                  accordance with this Agreement, impartially and in good faith,
                  with  the  objective  of  securing  a  just  and   inexpensive
                  determination of the dispute without unnecessary delay.

         (c)      To  the  maximum  extent  permitted  by  applicable  law,  the
                  Arbitrator shall be immune from liability or suit with respect
                  to his conduct as such.

         (d)      The  Arbitrator  shall maintain in confidence the existence of
                  the  arbitration,  its  outcome,  and all related  information
                  which is not  already  publicly  known,  and shall  vigorously
                  enforce the confidentiality obligations of the parties.

7.  If Mr. Brown serves as Arbitrator, the following rules shall apply:

         (a)      A  Party   may  move   for   permission   to   serve   written
                  interrogatories  and requests for  production of documents and
                  electronic media upon the opposing party. The Arbitrator shall
                  grant such motions to the extent that such interrogatories and
                  requests  are designed to produce  relevant  evidence and only
                  upon such terms as the Arbitrator in his discretion  considers
                  to be  consistent  with the  objective  of securing a just and
                  inexpensive  determination of the dispute without  unnecessary
                  delay.

         (b)      Upon motion by a party,  the Arbitrator may order a deposition
                  upon a showing of good cause and a finding that the deposition
                  is designed to secure  relevant and probative  evidence  which
                  (i)  cannot be  obtained  by  alternative  means,  or (ii) may
                  otherwise not be preserved for presentation at hearing.

         (c)      If a party fails to comply with an order  issued  under (a) or
                  (b) above,  the Arbitrator  shall draw  inferences  adverse to
                  that  party  in  connection   with  the  facts  sought  to  be
                  discovered.

         (d)      The Arbitrator shall schedule hearing(s) in Buffalo, New York,
                  at which the parties may be heard,  present evidence  material
                  to the  controversy,  and  cross-examine  the other  party and
                  other  witnesses  appearing at the hearing.  At least five (5)
                  days prior to the hearing,  each party shall make available to
                  each other  party the names of the expert and other  witnesses
                  it intends to call,  together with a detailed summary of their
                  expected  testimony,  and copies of all documents and exhibits
                  which  the  party   intends  to   introduce   into   evidence.
                  Thereafter,  witnesses, documents or exhibits may be added and
                  narrative  summaries of expected  testimony  amended only upon
                  motion by a party for good cause shown.

         (e)      Except for good cause shown, no request for  postponement of a
                  hearing  will  be  granted;  in case  of a  postponement,  the
                  hearing  shall  be   rescheduled   for  a  date  as  early  as
                  circumstances permit.

         (f)      The  Arbitrator  shall make such orders as required to protect
                  the secrecy of confidential information or documents,  such as
                  review in  camera.  The  Arbitrator  shall  impose a  sanction
                  against  any party who  violates  an order  issued  under this
                  section.  Such  sanction  may  include  an award  against  the
                  offending party.

         (g)      No party shall make or cause to be made to the  Arbitrator  an
                  unauthorized ex parte communication  relevant to the merits of
                  the proceeding.  The Arbitrator shall promptly disclose to the
                  other party any such  communication  and provide a  meaningful
                  opportunity for rebuttal.

         (h)      The Arbitrator  must make the award(s) within thirty (30) days
                  after the conclusion of hearing(s),  or the date of the filing
                  of any briefs authorized by the Arbitrator,  whichever date is
                  later,  unless the  parties and the  Arbitrator  agree to some
                  other time limit.  The award(s) must be in writing and include
                  findings of fact and  conclusions  of law regarding the issues
                  in dispute.

8. If, within ten (10) days after the date on which notice is given to Mr. Brown
by the party initiating  arbitration,  Mr. Brown has failed or refused to notify
the parties that he will serve as Arbitrator,  or if either party objects to Mr.
Brown serving as Arbitrator in accordance  with  paragraph 5 above,  the dispute
shall  be  resolved  by  binding   arbitration   administered  by  the  American
Arbitration   Association  under  its  National  Rules  for  the  Resolution  of
Employment Disputes then in effect at the time of the arbitration (the "Rules"),
subject to the  provisions  of  paragraph 9 below.  The parties  agree that such
arbitration  shall be heard and determined by a single  arbitrator  appointed by
the parties in accordance with the Rules, that the location of any hearing shall
be in Buffalo,  New York,  and that the  compensation  of the Arbitrator and all
expenses of arbitration  (other than expenses of witnesses for each party) shall
be borne equally by the parties.

9. The following provisions shall govern exclusively the remedies or relief that
may be included in an Arbitrator's  award,  whether the arbitration is conducted
by Mr. Brown in  accordance  with  paragraphs 6 and 7 above or by an  arbitrator
appointed  under the  Rules in  accordance  with  paragraph  8 above,  and shall
supersede any provision to the contrary in this Agreement or the Rules:

         (a)      If the  Arbitrator  imposes a sanction  upon the  Company,  or
                  finds  that the  Company  has  breached  this  Agreement,  the
                  Arbitrator's  award may be in the form of a  requirement  that
                  the Company

                  (i)      pay money damages to Mr. Hare,

                  (ii)     take or refrain from some specified action, and/or

                  (iii)    issue or publish specified communications.

         (b)      If the  Arbitrator  imposes a sanction upon Mr. Hare, or finds
                  that Mr. Hare has  materially  breached  this  Agreement,  the
                  Arbitrator's award may be in the form of

                  (i)      authorization  of the  Company to cancel  Mr.  Hare's
                           unvested restricted stock,  unexercised stock options
                           and/or unexercised SARs,

                  (ii)     approval of the Company's refusal to process a Notice
                           of  Exercise  of a  stock  option  or SAR  which  was
                           received by the Company  after the Company  issued an
                           Arbitration Notice;

                  (iii)    authorization  of the Company to setoff money damages
                           awarded by the Arbitrator against future payments due
                           to Mr.  Hare  under  this  Agreement,  to the  extent
                           permitted by applicable law;

                  (iv)     a  requirement  that Mr.  Hare take or  refrain  from
                           taking some specified action, and/or

                  (vi)     a   requirement   that  Mr.  Hare  issue  or  publish
                           specified communications.

                  The  parties  agree  that in no event  may any  award of money
                  damages against Mr. Hare pursuant to this Agreement exceed any
                  future payments due to Mr. Hare under this Agreement.

10. A final award is binding on the parties and may be enforced under applicable
law including  Article 75 of the New York Civil Practice Law and Rules. No award
under this  Agreement may serve as an estoppel in any other  proceeding  for any
issue that was not resolved in the proceeding. The award also may not be used as
a precedent or otherwise be considered in any factually unrelated  proceeding or
in any other arbitration proceeding.

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