10-K405

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (Mark One)     X      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES              EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2001 OR                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to______________________ Commission File Number  001-16385
NUI CORPORATION (Exact name of registrant as specified in its charter)
New Jersey (State of incorporation)	22-3708029 (IRS employer identification no.)
550 Route 202-206, P. O. Box 760, Bedminster, New Jersey 07921-0760 (Address of principal executive offices, including zip code)
(908) 781-0500 (Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class: Common Stock, No Par Value Preferred Stock Purchase Rights	New York Stock Exchange New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

X

Indicate by check mark if disclosure of delinquent filers, pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference to Part III of this Form 10-K or any amendment to the Form 10-K:

X

The aggregate market value of 13,308,695 shares of common stock held by non-affiliates of the registrant calculated using the $22.70 per share closing price on November 30, 2001 was $302,107,377.

The number of shares outstanding for each of the registrant's classes of common stock, as of November 30, 2001:

Common Stock, No Par Value: 13,997,187 shares outstanding.

Documents incorporated by reference: NUI Corporation's definitive Proxy Statement for the Company's Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on December 14, 2001.

NUI Corporation

Annual Report on Form 10-K For The

Fiscal Year Ended September 30, 2001

TABLE OF CONTENTS

PART I
		Page
Item 1	Business	1
Item 2	Properties	9
Item 3	Legal Proceedings	10
Item 4	Submission of Matters to a Vote of Security Holders	10
	PART II
Item 5	Market for Registrant's Common Equity and Related Stockholder Matters	11
Item 6.	Selected Financial Data	12
Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 8	Financial Statements and Supplementary Data	22
Item 9	Changes in and Disagreements wtth Accountants on Accounting and Financial Disclosure	22
	PART III
Item 10	Directors and Executive Officers of the Registrant	22
Item 11	Executive Compensation	22
Item 12	Security Ownership of Certain Beneficial Owners and Management	22
Item 13	Certain Relationships and Related Transactions	22
	PART IV
Item 14	Exhibits, Financial Statement Schedules and Reports on Form 8-K	23

NUI Corporation

Annual Report on Form 10-K for the

Fiscal Year Ended September 30, 2001

PART I

Item 1. Business

NUI Corporation and its operating divisions and subsidiaries (collectively referred to as NUI or the Company) was incorporated in New Jersey in 1969. The Company is primarily engaged in the sale and distribution of natural gas, energy commodity trading and marketing, sales outsourcing and telecommunications. The Company's utility operations serve more than 380,000 customers in seven states along the eastern seaboard of the United States and comprise Elizabethtown Gas Company (New Jersey), City Gas Company of Florida, North Carolina Gas, Elkton Gas (Maryland), Valley Cities Gas (Pennsylvania), Waverly Gas (New York) and Virginia Gas. Virginia Gas is also engaged in other activities, such as pipeline operation; natural gas storage; gathering, marketing and distribution services; natural gas exploration, production and well operation; and propane distribution. The Company's non-regulated businesses include NUI Energy Brokers, Inc. (Energy Brokers), an energy wholesaler; NUI Energy, Inc. (NU I Energy), an energy retailer; NUI Energy Solutions, Inc., an energy project development and consulting entity; NUI Environmental Group, Inc., an environmental project development subsidiary; Utility Business Services, Inc. (UBS), a digital mapping and customer information systems and services subsidiary; NUI Telecom, Inc. (NUI Telecom), a full-service telecommunications company and TIC Enterprises, LLC (TIC), a sales outsourcing subsidiary.

The principal executive offices of the Company are located at 550 Route 202-206, Box 760, Bedminster, NJ 07921-0760; telephone: (908) 781-0500.

The Company's operations are organized and managed under three primary segments: Distribution Services, Wholesale Energy Marketing and Trading (formerly Energy Sales and Services) and Retail and Business Services (formerly Customer Services). The Company also has corporate operations that do not currently generate operating revenues. Reference is made to Note 12, "Business Segment Information" of the "Notes to the Consolidated Financial Statements" for a discussion regarding financial information about the business segments of the Company. See also Item 6-"Selected Financial Data-Summary Consolidated Operating Data" for summary information by customer class with respect to operating revenues, gas volumes sold or transported and average number of utility customers served. A discussion of the business of each segment follows.

Distribution Services Segment

Products and Services

The Distribution Services segment distributes natural gas in six states through the Company's regulated utility divisions. Such distribution services are regulated as to price, safety and return by the regulatory commissions of the states in which the Company operates (see Regulation). The Distribution Services segment serves more than 380,000 customers, of which 67% are in New Jersey and 33% are in other states. Most of the Company's utility customers are residential and commercial customers who purchase gas primarily for space heating. Distribution Services' operating revenues for fiscal 2001 amounted to approximately $524.2 million, of which 75% was generated by utility operations in New Jersey and 25% was generated by utility operations in other states. Gas volumes sold or transported in fiscal 2001 amounted to 86.7 million Mcf, of which approximately 80% was sold or transported in New Jersey and 20% was sold or transported in other states. A Mcf is a basic unit of measurement for natural gas comprising 1,000 cubic feet of gas. A description of each of the Company's utility divisions follows.

Elizabethtown Gas (Elizabethtown). The Company, through Elizabethtown, provides gas service to approximately 255,000 customers in franchised territories within seven counties in central and northwestern New Jersey. Elizabethtown's 1,300 square-mile service territory has a total population of approximately 1.1 million. Most of the state's customers are located in densely populated central New Jersey, where increases in the number of customers are primarily from new construction and conversions to gas heating from alternative forms of heating.

Elizabethtown's regulated gas volumes sold or transported and customers served for the past three fiscal years were as follows:

Regulated Gas Volumes Sold or Transported (in thousands of Mcf)
	2001	2000	1999
Firm Sales:
Residential	21,475	19,725	18,818
Commercial	8,398	6,857	6,802
Industrial	499	454	732
Interruptible Sales	12,641	14,712	15,477
Transportation Services	26,459	27,076	24,586
	______	______	_____
Total	69,472	68,824	66,415
	=====	=====	=====
Utility Customers Served (twelve-month average)
	2001	2000	1999
Firm Sales:
Residential - Heating	180,605	176,255	172,406
Residential - Non-heating	54,563	55,452	55,946
Commercial	17,024	16,159	15,821
Industrial	219	205	208
Interruptible Sales	25	23	25
Transportation Services	2,475	3,103	3,155
	______	______	______
Total	254,911	251,197	247,561
	======	======	======

Gas volumes sold to Elizabethtown's firm customers are sensitive to the weather in New Jersey. In fiscal 2001, the weather in New Jersey was 2% warmer than normal and 10% colder than the prior year. Additionally, weather in fiscal 2000 was 11% warmer than normal and 5% colder than fiscal 1999. While the effect of the warm weather has impacted sales to heating customers, Elizabethtown's tariff contains a weather normalization clause that is designed to help stabilize the Company's results by increasing amounts charged to customers when weather has been warmer than normal and decreasing amounts charged when weather has been colder than normal. As a result of weather normalization clauses, operating margins were approximately $0.6 million and $4.4 million higher in fiscal 2001 and 2000, respectively, than they would have been without such clauses. For a further discussion on variations in revenues, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Oper ations".

Elizabethtown's customers currently have the ability to utilize transportation service and purchase their gas from other suppliers. The rate charged to transportation customers remains regulated as to price and returns. Tariffs for transportation service have been designed to provide the same margins as bundled sales tariffs. Therefore, except for the regulatory risk of full recovery of gas costs, Elizabethtown is financially indifferent as to whether it transports gas or sells gas and transportation together.

In response to the Electric Discount and Energy Competition Act which was signed into law in February 1999, on March 30, 2001, the New Jersey Board of Public Utilities (NJBPU) approved a Stipulation which enabled all retail customers in New Jersey to choose a natural gas supplier, provided an incentive for these customers to choose an alternate natural gas supplier and allowed the Company to continue offering basic gas supply service through December 2002, when the NJBPU will decide if the gas supply function should be removed from the gas distribution companies and made competitive. As of September 30, 2001, no residential customers in the Company's New Jersey service territory have switched to an alternative gas supplier.

Elizabethtown's "interruptible" customers have alternative energy sources and use gas on an "as available" basis. Variations in the volume of gas sold or transported to these customers do not have a significant effect on the Company's earnings because in accordance with New Jersey regulatory requirements, 80% of the margins that otherwise would be realized on gas sold or transported to interruptible customers are used to reduce gas costs charged to firm sales customers.

City Gas Company of Florida (City Gas). City Gas is the second largest natural gas utility in Florida, supplying gas to more than 101,000 customers in Dade and Broward Counties in south Florida, and in Brevard, Indian River and St. Lucie Counties in central Florida. City Gas' service areas cover approximately 3,000 square miles and have a population of approximately 1.7 million.

City Gas' regulated gas volumes sold or transported and customers served for the past three fiscal years were as follows:

Regulated Gas Volumes Sold or Transported (in thousands of Mcf)
	2001	2000	1999
Firm Sales:
Residential	1,930	1,854	1,738
Commercial	2,194	3,077	3,353
Industrial	129	159	---
Interruptible Sales	66	70	111
Transportation Sales	5,156	4,701	4,174
	____	____	____
Total	9,475	9,861	9,376
	====	====	====
Utility Customers Served (twelve-month average)
	2001	2000	1999
Firm Sales:
Residential	95,963	95,442	94,784
Commercial	3,984	4,530	4,699
Industrial	8	8	---
Interruptible Sales	5	4	4
Transportation Services	1,313	617	315
	______	______	_____
Total	101,273	100,601	99,802
	======	======	=====

City Gas' residential customers purchase gas primarily for water heating, clothes drying and cooking. Some customers, principally in central Florida, also purchase gas to provide space heating during the relatively mild winter season. Year-to-year growth in the average number of residential customers primarily reflects new construction.

City Gas' commercial business consists primarily of schools, businesses and public facilities, of which the number of customers tends to increase concurrently with the continuing growth in population within its service areas. As with its residential markets, the Company is seeking to maximize the utilization of its existing mains by emphasizing marketing efforts toward potential commercial business along these lines.

Certain commercial and industrial customers have converted their natural gas service from a sales basis to a transportation basis. City Gas' transportation tariff provides margins on transportation services that are substantially the same as margins earned on gas sales.

On January 16, 2001, City Gas received approval from the FPSC to increase its annual base rates by $5.13 million to cover the cost of service enhancements and reliability improvements since City Gas' last base rate increase in 1996. The new rate level provides for an allowed return on equity of 11.5 percent and an overall rate of return of 7.88 percent.

North Carolina Gas. The Company, through North Carolina Gas, provides gas service to approximately 14,200 customers in Rockingham and Stokes Counties in North Carolina, which territories comprise approximately 700 square miles. During fiscal 2001, the regulated operations of North Carolina Gas sold or transported approximately 3.7 million Mcf of gas as follows: 24% sold to residential customers, 16% sold to commercial customers, 6% sold to industrial customers and 54% transported to commercial and industrial customers.

Elkton Gas (Elkton). The Company, through Elkton, provides gas service to approximately 4,600 customers in franchised territories comprising approximately 14 square miles within Cecil County, Maryland. During fiscal 2001, Elkton sold approximately 935,000 Mcf of gas as follows: 26% sold to residential customers, 18% sold to commercial customers and 56% sold to industrial customers.

Valley Cities Gas and Waverly Gas (VCW). VCW provide gas service to approximately 6,500 customers in franchised territories comprising 114 square miles within Bradford County, Pennsylvania and the Village of Waverly, New York and surrounding areas, respectively. During fiscal 2001, the regulated operations of VCW sold or transported approximately 3.2 million Mcf of gas as follows: 19% sold to residential customers, 8% sold to commercial customers, 2% sold to industrial customers and 71% transported to commercial and industrial customers.

On October 5, 2000, the Company agreed to sell the assets of VCW to C&T Enterprises, Inc. of Pennsylvania. The transaction is expected to close early in calendar 2002 after all regulatory approvals have been obtained (see Item 7- Management's Discussion and Analysis - Sale of Valley Cities Gas and Waverly Gas for further discussion of this transaction).

Gas Supply and Operations

In recent years, the gas industry has been undergoing structural changes in response to policies of the Federal Energy Regulatory Commission (FERC) and local regulatory commissions designed to increase competition. Traditionally, interstate pipelines were wholesalers of natural gas to local distribution companies and generally did not provide separate transportation or other services for specific customers. In 1992, the FERC issued Order No. 636 that, among other things, mandated the separation or "unbundling" of interstate pipeline sales, transportation and storage services and established guidelines for capacity management effective in 1993. In fiscal 1995, the NJBPU unbundled the services provided and the rates charged to New Jersey commercial and small industrial customers as well. The transition to more competitive rates and services has the effect of increasing the opportunity for local gas distribution companies, and industrial and commercial customers to purchase natural gas from a lternative sources, while increasing the potential business and regulatory risk borne by a local gas distribution company with respect to the acquisition and management of natural gas services.

The Company endeavors to utilize its pipeline capacity efficiently by matching capacity to its load profile to the extent feasible. To this end, the Company has had a broad unbundled service tariff for certain of its customers since 1987. The Company continues to avail itself of opportunities to improve the utilization of its pipeline capacity by pursuing broad based customer growth, including off-peak markets and utilizing capacity release and off-system sales opportunities afforded by Order No. 636 when operationally feasible.

The Company's gas supply for its utility divisions during fiscal 2001 came from the following sources: approximately 10 percent from long term purchase contracts; approximately 64 percent from seasonal or monthly purchase contracts and 26 percent from daily purchases made in the spot market. The Company manages its gas supply portfolio to assure a diverse, reliable and secure supply of natural gas at the lowest reasonable cost. In fiscal 2001, the Company's largest single supplier accounted for approximately 15 percent of the Company's total gas purchases.

The Company has long-term gas delivery contracts with seven interstate pipeline companies. Under these contracts, the Company has a right to deliver, on a firm year-round basis, of up to 91.3 million Mcf of natural gas annually with a maximum of approximately 268,000 Mcf per day. Both the price and conditions of service under these contracts are regulated by the FERC.

The Company has long-term gas purchase contracts for the supply of natural gas for its system with four suppliers. Under these contracts, the Company has a right to purchase, on a firm year-round basis, up to 12.0 million Mcf of natural gas annually with a maximum of approximately 31,091 Mcf per day. In order to achieve greater supply flexibility, and to more closely match its gas supply portfolio to changes in the market it serves, the Company recently allowed a long-term gas supply contract to expire at the conclusion of its primary terms. As a result, the Company has reduced its fixed gas cost obligations. The Company has replaced the supply with shorter-term, seasonal and monthly firm supply, thus reducing the average term of its gas purchase obligations. In addition, the Company has access to spot market gas through the interstate pipeline system to supplement or replace, on a short-term basis, portions of its long-term gas purchase contracts when such actions can reduce overall gas costs or are necessary to supply interruptible customers. In fiscal 1995, the Company, along with seven other Northeastern and Mid-Atlantic gas distribution companies, formed the East Coast Natural Gas Cooperative LLC (the "Co-op"). The Co-op was formed with the goal of jointly managing certain portions of the members' gas supply portfolios, to increase reliability and reduce costs of service to customers, and to improve the competitive position of the member companies. Participation in and reliance upon certain contractual arrangements among Co-op members has allowed the Company to reduce costs associated with winter services.

In order to have available sufficient quantities of gas during the heating season, the Company stores gas during non-peak periods and purchases supplemental gas, including propane, LNG and gas available under contracts with certain large cogeneration customers, as it deems necessary. The storage contracts provide the Company with an aggregate of 14 million Mcf of natural gas storage capacity and provide the Company with the right to receive a maximum daily quantity of 176,821 Mcf. The contracts with cogeneration customers provide 26,200 Mcf of daily gas supply to meet peak loads by allowing the Company to take back capacity and supply that otherwise is dedicated to serve those customers.

The Company has a LNG storage and vaporization facility in New Jersey for handling peak gas demand. It has a daily delivery capacity of 29,800 Mcf and storage capacity of 131,000 Mcf.

The Company's maximum daily sendout in fiscal 2001 was approximately 330,219 Mcf in New Jersey and 91,533 Mcf in the other service territories combined. The Company maintains sufficient gas supply and delivery capacity for a maximum daily sendout capacity for New Jersey of approximately 407,700 Mcf and approximately 126,110 Mcf for the other service territories combined.

Certain of the Company's long-term contracts for the supply, storage and delivery of natural gas include fixed charges that amount to approximately $60.1 million annually. The Company currently recovers, and expects to continue to recover, such fixed charges through its purchased gas adjustment clauses. As a result of the unbundling of natural gas services in New Jersey and Pennsylvania, these contracts may result in the realization of stranded costs by the Company. Management believes the outcome of these actions will not have a material adverse effect on the Company's results. The Company also is committed to purchase, at market-related prices, minimum quantities of gas that, in the aggregate, are approximately 2.6 billion cubic feet (Bcf) per year or to pay certain costs in the event the minimum quantities are not taken. The Company expects that minimum demand on its systems for the duration of these contracts will continue to exceed these minimum purchase obligations.

The Company distributes gas through approximately 6,600 miles of steel, cast iron and plastic mains. The Company has physical interconnections with five interstate pipelines in New Jersey and one interstate pipeline in Florida. In addition, the Company has physical interconnections in North Carolina and Pennsylvania with interstate pipelines, which also connect to New Jersey. Common interstate pipelines along the Company's operating system provide the Company with greater flexibility in managing pipeline capacity and supply, and thereby optimizing system utilization.

Regulation

The Company is subject to regulation with respect to, among other matters, rates, service, accounting and the issuance of securities. The Company is subject to regulation as an operating utility by the public utility commissions of the states in which it operates. The Company is also subject to regulation by the United States Department of Transportation under the Natural Gas Pipeline Safety Act of 1968, with respect to the design, installation, testing, construction and maintenance of pipeline facilities. Natural gas purchases, transportation service and storage service provided to the Company by interstate pipeline companies are subject to regulation by the FERC (see "Gas Supply and Operations"). In addition, the Company is subject to federal and state legislation with respect to water, air quality, solid waste disposal and employee health and safety matters, and to environmental regulations issued by the United States Environmental Protection Agency, the New Jersey Department of Environ mental Protection and other federal and state agencies.

The Company's current rates and tariffs for New Jersey reflect a rate case that was settled in October 1991, under which the Company obtained a weather normalization clause - see "Elizabethtown Gas". The 1991 rate case provided for an allowed return on equity of 12.4 percent and an overall rate of return of 11.3 percent.

On January 16, 2001, City Gas received approval from the Florida Public Service Commission (FPSC) to increase its annual base rates by $5.13 million. The new rate level provides for an allowed return on equity of 11.5 percent and an overall rate of return of 7.88 percent.

The current rates and tariffs for the North Carolina, Maryland, Pennsylvania and New York operations were authorized between October 1988 and September 1995. These operations serve approximately 25,000 customers in aggregate. The tariff for North Carolina Gas reflects a weather normalization clause for its temperature sensitive residential and commercial customers.

The Company's tariffs for each state in which it operates contain adjustment clauses that enable the Company to recover purchased gas costs. The adjustment clauses provide for periodic reconciliations of actual recoverable gas costs with the estimated amounts that have been billed. Under or over recoveries at the reconciliation date are recovered from or refunded to customers in subsequent periods.

Franchises

The Company holds non-exclusive municipal franchises and other consents which enable it to provide natural gas in the territories it serves. The Company intends to seek to renew these franchises and consents as they expire.

Seasonal Aspects

Sales of gas to some classes of customers are affected by variations in demand due to changes in weather conditions, including normal seasonal variations throughout the year. The demand for gas for heating purposes is closely related to the severity of the winter heating season. Seasonal variations affect short-term cash requirements.

The effects of weather that is above or below normal is offset in New Jersey and North Carolina through weather normalization clauses contained in the tariffs in those jurisdictions. The weather normalization clauses are designed to help stabilize the Company's results by increasing amounts charged to customers when weather has been warmer than normal and decreasing amounts charged when weather has been colder than normal.

Competition

The Company competes with distributors of other fuels and forms of energy, including electricity, fuel oil and propane, in all portions of the territories in which it has distribution mains. In addition, in 1992, the FERC issued Order No. 636 (see "Gas Supply and Operations"). Subsequently, initiatives were sponsored in various states, the purposes of which were to "unbundle" or separate into distinct transactions, the purchase of the gas commodity from the purchase of transportation services for the gas. To that end, several of the Company's operating divisions have unbundled residential, commercial and industrial gas purchase and transportation rates.

The unbundled sale of gas to customers is subject to competition from unregulated marketers and brokers, which generally do not bear the obligations or costs related to operating a regulated utility. Tariffs for transportation service have generally been designed to provide the same margins as bundled sales tariffs. Therefore, except for the regulatory risk of full recovery of gas costs, the Company is financially indifferent as to whether it transports gas, or sells gas and transportation together. The Company also faces the risk of loss of transportation service for large industrial customers which may have the ability to build connections to interstate gas pipelines and bypass the Company's distribution system. Gas distributors can also expect increased competition from electricity as deregulation in that industry decreases prices and increases supply sources. Alternatively, opportunities may increase for gas service to fuel generators for large industrial customers, replacing electric utility service.

Environment

Reference is made to Item 7, "Management's Discussion and Analysis-Capital Expenditures and Commitments" and Note 13, "Commitments and Contingencies" of the "Notes to the Consolidated Financial Statements" for information regarding environmental matters affecting the Company.

Wholesale Energy Marketing and Trading Segment

Products and Services

The Wholesale Energy Marketing and Trading segment reflects the operations of the Company's NUI Energy Brokers and NUI Virginia Gas subsidiaries, as well as off-system sales by the utility divisions. Together, this segment offers wholesale energy sales, energy portfolio management, risk management and utility asset management.

NUI Energy Brokers, Inc. (NUI Energy Brokers) was formed in 1996 to provide the wholesale energy trading, brokering, and risk management activities of the Company. In addition to providing these services to third parties, NUI Energy Brokers is also responsible for the supply acquisition activity for NUI's Distribution Services segment. NUI Energy Brokers trades physical natural gas in four geographic regions: the Northeast, Southeast, Gulf Coast, and Mid Continent. In addition, NUI Energy Brokers trades futures and options contracts on the New York Mercantile Exchange. The risk associated with trading activities is closely monitored on a daily basis and controlled in accordance with the Company's Risk Management Policy. As in any commodity brokerage activity, however, there are risks pertaining to market changes and credit exposure that can be managed but not eliminated. Therefore, the earnings from NUI Energy Brokers are likely to be more volatile than the Company's utility distribution business (see Item 7, "Management's Discussion and Analysis-Market Risk Exposure"). NUI Energy Brokers generated margins of $19.3 million in fiscal 2001, $12.8 million in fiscal 2000, and $8.3 million in fiscal 1999.

NUI Virginia Gas (Virginia Gas) is a natural gas storage, pipeline, and propane and natural gas distribution company. Virginia Gas operates in the Mid-Atlantic region, which has a rapidly growing demand for natural gas and power generation. Virginia Gas contributed margins of $2.3 million since it was acquired on March 28, 2001 (see Note 3 of the Notes to the Consolidated Financial Statements).

Another business line within Wholesale Energy Marketing and Trading is off-system sales, or the use of utility-owned gas assets to make sales to customers outside of NUI's service areas. Such assets include pipeline capacity and gas storage facilities. These assets are managed separately from non-utility assets, and their use is monitored and regulated by state regulatory commissions. Pursuant to regulatory agreements in some states in which the Company operates, the Company is able to retain a portion of the margins from these sales in varying percentages depending on the state in which the assets are owned. Off-system sales margins totaled $889,000 in fiscal 2001, $1,547,000 in fiscal 2000 and $771,000 in fiscal 1999.

Retail and Business Services Segment

Products and Services

The Retail and Business Services segment is comprised of the Company's NUI Energy, Inc., NUI Energy Solutions, Inc., Utility Business Service, Inc., NUI Telecom, Inc. and TIC Enterprises, LLC subsidiaries, and its appliance business operations. Together this segment provides retail energy sales, project development and energy consulting services, telecommunications services, including local, long distance, cellular, internet and data communications services; appliance repair, maintenance, installation and leasing; customer information system services including bill printing, mailing, collection and payment processing; network analysis; facilities database management; operations mapping and field computing for other utilities; and sales outsourcing.

NUI Energy, Inc. (NUI Energy) is a full service energy marketing company that provides energy supply, planning and management services to a wide range of commercial and industrial customers. NUI Energy's operating margins were $5.6 million in fiscal 2001, as compared with $2.4 million in fiscal 2000 and $4.1 million in fiscal 1999.

NUI Energy Solutions, Inc. (NUI Energy Solutions) began operations in fiscal 1998 to provide energy management and consulting services to existing and new customers. Due to the significantly higher gas costs experienced for the majority of fiscal 2001, NUI Energy Solutions recorded a loss of $0.1 million during the year. NUI Energy Solutions' operating margin was $1.0 million in fiscal 2000. Due to start-up costs associated with this business, NUI Energy Solutions recorded a loss in fiscal 1999.

Utility Business Services, Inc. (UBS) provides customer information systems and geographic information system services to investor-owned and municipal utilities, as well as third-party providers in the gas, water and wastewater markets. WINS CIS, the premiere customer information system developed and maintained by UBS, is presently serving approximately 29 clients with state-of-the-art capabilities in support of more than 700,000 customers. In addition to generating over three million bills each year, UBS assists clients in allied areas such as automatic meter reading, payment processing, and account recovery. In fiscal 1999, UBS introduced a natural gas version of WINS CIS by converting three of the Company's Distribution Services utility divisions to the new system. UBS is currently working on a web-enabled version of WINS CIS and plans to address the needs of the electric industry in the near term. Geographic information services are currently provided to 5 clients. UBS had margins of $3.3 million in fiscal 2001, $2.4 million in fiscal 2000 and $2.3 million in fiscal 1999.

On November 12, 1999, the Company closed on its acquisition of International Telephone Group, Inc (ITG) (see Note 2 of the Notes to the Consolidated Financial Statements). The acquisition was treated as a merger whereby ITG merged with and into a subsidiary of the Company. ITG subsequently changed its name to NUI Telecom, Inc. NUI Telecom is a full service telephone company that provides its customers with a single service solution for all their telecommunication requirements including local, long distance, cellular, internet, and data communications services. NUI Telecom generated revenues of $15.9 million in fiscal 2001 and $5.2 million in fiscal 2000.

TIC Enterprises, LLC (TIC) is a sales outsourcing firm that has exclusive contracts with the United States Postal Service (USPS), and various telecommunications equipment and service providers that enable TIC to provide a broad range of telephony and data products and services to its customers. TIC generated revenues of $12.5 million since the Company acquired the 51 percent interest it did not previously own on May 15, 2001 (see Item 7, "Management's Discussion and Analysis-TIC" and Note 4 of the Notes to the Consolidated Financial Statements).

During fiscal 1999, the Company completed the separation of its appliance servicing and leasing business from its Distribution Services segment. This group performed more than 70,700 revenue producing appliance service jobs in fiscal 2001. The appliance group generated revenues of $15.6 million in fiscal 2001, $14.6 million in fiscal 2000 and $12.3 million in fiscal 1999.

Other NUI Operations

NUI Environmental Group, Inc. (NUI Environmental) was formed in fiscal 1996 to develop a solution to the rapidly decreasing accessibility of the New York/New Jersey harbor to international commercial shipping traffic. On December 23, 1998, NUI Environmental was selected from a group of sixteen firms that responded to a request for proposal by the State of New Jersey to participate in a Sediment Decontamination Demonstration Project designed to identify new technologies for the productive dredging of the harbor. During fiscal 2001, NUI Environmental completed its work on a $485,000 contract from the State of New Jersey for a Pilot Study to demonstrate the effectiveness of an innovative process for the treatment of dredged material from the harbor. The Sediment Decontamination Program involves two phases: the Pilot Study and a full-scale Demonstration Project. Having successfully completed the Pilot Study, NUI Environmental is awaiting notification from the State as to level of funding it wo uld receive for its participation in the Demonstration Project (which could range from $2.2 million to $5.9 million).

Persons Employed

As of September 30, 2001, the Company employed a total of 1,599 persons, of which 270 employees in New Jersey were represented by the Utility Workers Union of America (Local 424) and 46 employees were represented by the Communications Workers of America (Local 1023); 82 employees in Florida (Locals 769 and 385) and 13 employees in Pennsylvania (Local 529) were represented by the Teamsters Union; and 37 employees in North Carolina were represented by the International Brotherhood of Electrical Workers (Local 2291). The recent Utility Workers Union of America collective bargaining agreement with the New Jersey union became effective November 21, 2001, and expires on November 20, 2005. The North Carolina union collective bargaining agreement was negotiated on August 20, 2001, and expires on August 30, 2004. The collective bargaining agreement in Pennsylvania is a three-year agreement that expires on September 30, 2002. The collective bargaining agreements in Florida was negotiat ed on March 31, 2001, and expires on March 31, 2004. The Communications Workers of America contract became effective November 1, 2000 and expires on March 31, 2003.

Persons employed by segment are as follows: Distribution Services segment-722; Wholesale Energy Marketing and Trading-96; and Retail and Business Services-604 persons. In addition, the Corporate office of NUI employed a total of 177 persons, which employees primarily work in shared services for the entire corporation.

Available Information

The Company files annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. Any document the Company files with the Commission may be read or copied at the Commission's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. The Company's Commission filings are also available at the Commission's Web site at http:// www. sec.gov or the Company's Web site at http:// www. nui.com.

Item 2. Properties

The Company owns approximately 6,600 miles of steel, cast iron and plastic gas mains, together with gate stations, meters and other gas equipment. In addition, the Company owns peak shaving plants, including a LNG storage facility in Elizabeth, New Jersey.

The Company also owns real property in Union, Middlesex, Mercer, Morris, Warren, Sussex and Hunterdon counties in New Jersey, and in Dade, Broward, Brevard, Indian River and St. Lucie counties in Florida, portions of which are under lease to others. The Company's properties include office buildings in Hialeah and Rockledge, Florida that serve as the principal operating offices for the Florida operations; and office buildings in Reidsville, North Carolina and Sayre, Pennsylvania that serve as operating offices for the North Carolina and the Pennsylvania and New York operations, respectively. The Company also owns various service centers in New Jersey, Florida, North Carolina, Maryland and Pennsylvania from which the Company dispatches service crews and conducts construction and maintenance activities.

The Company leases office space in Bedminster, New Jersey that serves as its corporate headquarters, and leases certain other facilities in New Jersey, Florida and Virginia that are operated as customer business offices or operating offices. The Company also leases approximately 200,000 square feet in an office building in Union, New Jersey. The Company's TIC Enterprises subsidiary leases 13 offices in 11 states that serve as operating offices.

Virginia Gas owns the approximately 600 acres that comprises the Saltville facility.  Tthe Early Grove Field is situated on land not owned by the Company. 

Subject to minor exceptions and encumbrances, all other property materially important to the Company and all principal plants are owned in fee simple, except that most of the mains and pipes are installed in public streets under franchise or statutory rights or are constructed on rights of way acquired from the apparent owner of the fee.

Item 3. Legal Proceedings

The Company is involved in various claims and litigation incidental to its business. In the opinion of management, none of these claims and litigation will have a material adverse effect on the Company's results of operations or its financial condition.

Item 4. Submission of Matters to a Vote of Security Holders

No matter was presented for submission to a vote of security holders through the solicitation of proxies or otherwise during the last quarter of fiscal 2001.

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

NUI common stock is listed on the New York Stock Exchange and is traded under the symbol "NUI". The quarterly cash dividends paid and the reported price range per share of NUI common stock for the two years ended September 30, 2001, were as follows:

	Quarterly Cash	Price Range
	Dividend	High	Low
Fiscal 2001:
First Quarter	$0.245	$33.938	$27.875
Second Quarter	0.245	32.313	25.313
Third Quarter	0.245	27.030	20.100
Fourth Quarter	0.245	23.950	20.080
Fiscal 2000:
First Quarter	$0.245	$28.186	$23.438
Second Quarter	0.245	30.750	22.938
Third Quarter	0.245	28.186	25.250
Fourth Quarter	0.245	32.436	26.188

There were 5,624 shareholders of record of NUI common stock at November 30, 2001.

It is the Company's intent to continue to pay quarterly dividends in the foreseeable future. NUI's dividend policy is reviewed on an ongoing basis and is dependent upon the Company's expectation of future earnings, cash flow, financial condition, capital requirements and other factors.

The Company's long-term debt agreements include, among other things, restrictions as to the payment of cash dividends. Under the most restrictive of these provisions, the Company was permitted to pay $76.8 million of cash dividends at September 30, 2001.

Item 6. Selected Financial Data

Selected Consolidated Financial Data (in thousands, except per share amounts)
	Fiscal Years Ended September 30,
	2001	2000	1999	1998	1997
Operating Revenues	$1,134,303	$934,776	$826,194	$826,263	$606,285
Net Income	$   22,674	$ 26,747	$ 24,560	$ 12,314	$ 19,649
Net Income Per Share	$      1.70	$   2.07	$   1.93	$ 0.98	$ 1.75
Dividends Paid Per Share	$      0.98	$   0.98	$   0.98	$ 0.98	$ 0.94
Total Assets	$1,170,800	$920,857	$844,226	$776,847	$803,665
Capital Lease Obligations	$ 3,323	$ 4,396	$ 2,599	$ 8,566	$ 9,679
Long-Term Debt	$ 308,989	$268,947	$268,911	$229,098	$229,069
Common Shareholders' Equity	$ 289,145	$256,969	$237,318	$222,992	$218,291
Common Shares Outstanding	13,755	12,929	12,750	12,680	12,429

Notes to the Selected Consolidated Financial Data:

Net income for fiscal 2000 includes a gain on the sale of assets which increased net income by $1.7 million (after tax), or $0.13 per share.

Net income for fiscal 1999 includes a pension settlement gain and other non-recurring items. The effect of these items increased net income by $2.3 million (after tax), or $0.18 per share.

Summary Consolidated Operating Data
	Fiscal Years Ended September 30,
	2001	2000	1999	1998	1997
Operating Revenues (Dollars in thousands)
Firm Sales:
Residential	$272,520	$208,461	$197,800	$197,955	$201,435
Commercial	115,828	85,776	82,285	90,739	104,873
Industrial	12,325	8,950	8,694	19,684	23,263
Interruptible Sales	80,804	63,369	49,110	45,583	55,831
Unregulated Sales	563,364	502,430	432,414	421,381	177,565
Transportation Services	40,737	41,594	37,634	33,338	28,617
Customer Service, Appliance Leasing and Other	48,725	24,196	18,257	17,583	14,701
	________	_______	_______	_______	_______
	$1,134,303	$934,776	$826,194	$826,263	$606,285
	======	=====	=====	=====	=====
Gas Sold or Transported (MMcf)
Firm Sales:
Residential	25,148	23,167	22,064	21,771	22,956
Commercial	11,616	10,839	11,058	12,076	14,254
Industrial	1,368	1,430	1,584	4,463	4,819
Interruptible Sales	13,380	15,929	16,420	13,183	15,074
Unregulated Sales	94,972	145,642	168,748	163,418	62,819
Transportation Services	35,205	35,235	32,601	30,831	28,294
	______	______	______	______	______
	181,689	232,242	252,475	245,742	148,216
	=====	=====	=====	=====	=====
Average Utility Customers Served
Firm Sales:
Residential	353,397	348,626	344,448	338,958	335,632
Commercial	23,848	23,474	23,320	23,407	24,312
Industrial	263	253	254	275	306
Interruptible Sales	47	45	56	111	121
Transportation Services	3,854	3,787	3,535	2,948	1,460
	______	______	______	______	______
	381,409	376,185	371,613	365,699	361,831
	=====	=====	=====	=====	=====
Degree Days in New Jersey	5,036	4,579	4,381	4,356	4,772
Employees (year-end)	1,599	1,078	1,049	1,081	1,126
Ratio of Earnings to Fixed Charges	2.44	2.70	2.64	1.85	2.11

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussions of the Company's historical results of operations and financial condition should be read in conjunction with the Company's consolidated financial statements and the related notes.

Overview

The following discussion and analysis refers to NUI Corporation and all its operating divisions and subsidiaries (collectively referred to as NUI or the Company). The Company is engaged in the sale and distribution of natural gas, energy commodity trading and marketing, sales outsourcing, and telecommunications. Its local distribution operations provide natural gas and related services to more than 380,000 customers in seven states along the eastern seaboard and comprise Elizabethtown Gas Company (New Jersey), City Gas Company of Florida, North Carolina Gas, Elkton Gas (Maryland), Valley Cities Gas (Pennsylvania), Waverly Gas (New York) and Virginia Gas. Virginia Gas is also engaged in other activities, such as pipeline operation; natural gas storage; gathering, marketing and distribution services; natural gas exploration, production and well operation; and propane distribution. The Company's non-regulated subsidiaries include NUI Energy, Inc. (NUI Energy), an energy retailer; NUI Energy B rokers, Inc. (NUI Energy Brokers), a wholesale energy trading and portfolio management subsidiary; NUI Environmental Group, Inc., an environmental project development subsidiary; Utility Business Services, Inc. (UBS), a digital mapping and customer information systems and services subsidiary; NUI Telecom, Inc. (NUI Telecom), a telecommunications services subsidiary and TIC Enterprises, LLC (TIC), a sales outsourcing subsidiary.

Results of Operations

Fiscal Years Ended September 30, 2001 and 2000

Net Income. Net income for fiscal 2001 was $22.7 million, or $1.70 per share, as compared with net income of $26.7 million, or $2.07 per share, in fiscal 2000. Net income in fiscal 2000 includes after-tax non-recurring credits of $1.7 million, or $0.13 per share, related to the gain on the sale of assets. Absent this non-recurring gain, net income would have been $25.1 million, or $1.94 per share, in fiscal 2000. The decrease in earnings in fiscal 2001 was primarily attributed to operating losses incurred by TIC (see further discussion later in this section), which offset improved results of the Company's other businesses. The total after-tax effect of the losses incurred by TIC during fiscal 2001 was $6.1 million, or $0.45 per share.

Operating Revenues. The Company's operating revenues include amounts billed for the cost of purchased gas pursuant to purchased gas adjustment clauses utilized by the Company's utility operations. Such clauses enable the Company to pass through to its utility customers, via periodic adjustments to customers' bills, increased or decreased costs incurred by the Company for purchased gas without affecting operating margins. Since the Company's utility operations do not earn a profit on the sale of the gas commodity, the Company's level of regulated operating revenues is not necessarily indicative of financial performance.

The Company's operating revenues increased $199.5 million, or 21 percent, during fiscal 2001, as compared with fiscal 2000. Distribution Services revenues increased approximately $114.2 million, mainly as a result of a significant increase in gas prices (see "Financing Activities and Resources"), colder weather than the prior year (10 percent colder) and customer growth. These increases were partially offset by a decrease in sales to certain interruptible industrial customers who switched to alternative fuels during part of the year as a result of the extremely high gas prices.

Wholesale Energy Marketing and Trading revenue decreased by approximately $7.7 million, primarily due to lower physical volumes traded by NUI Energy Brokers, which was partially offset by additional revenues of $2.8 million from the acquisition of Virginia Gas.

Retail and Business Services revenue increased $93.0 million, or 114 percent, due to increases in all of its operating businesses. NUI Energy increased revenues by over $70 million as a result of significantly higher gas prices experienced during fiscal 2001. These increased gas prices drove many competitors out of the market. As a result, when gas prices began to decline, NUI Energy was able to capture additional market share and sign customers to longer term contracts. NUI Telecom increased revenue by $10.7 million due to significant customer growth. This segment also included higher revenues from UBS and the appliance services business due to both customer growth and favorable pricing, and includes $12.5 million of revenue by TIC since May 15, 2001 (see Note 4 of the Notes to the Consolidated Financial Statements).

Operating Margins. The Company's operating margins increased $27.2 million, or 14 percent, during fiscal 2001, as compared with fiscal 2000. The Company's Distribution Services segment margins increased $4.2 million, or 2 percent, as a result of weather that was 10 percent colder than fiscal 2000, but still 2 percent warmer than normal, and customer growth. Partially offsetting these increases was the interruption of certain industrial customers for part of the heating season. The Company has weather normalization clauses in its New Jersey and North Carolina tariffs, which are designed to help stabilize the Company's results by increasing amounts charged to customers when weather has been warmer than normal and by decreasing amounts charged when weather has been colder than normal. As a result of weather normalization clauses, operating margins were approximately $0.6 million and $4.4 million higher in fiscal 2001 and 2000, respectively, than they would have been without such clauses. These weather norma lization clauses mitigate some of the weather-related risk to which the Company is exposed. NUI Energy Brokers entered into a weather derivative which resulted in a loss of $0.5 million during fiscal 2001, as compared to approximately $1.5 million of margin which was contributed during fiscal 2000.

Operating margins increased in the Retail and Business Services segment by approximately $14.8 million, or 145 percent, due to the inclusion of $6.6 million of margins for TIC, increases in revenues for NUI Energy and the continued growth of NUI Telecom, UBS and the appliance service business.

Operating margins from the Company's Wholesale Energy Marketing and Trading segment increased by approximately $8.2 million, or 57 percent, primarily due to the inclusion of Virginia Gas since its acquisition on March 28, 2001, and an increase of almost 51 percent in operating margins from NUI Energy Brokers due to increased volatility in gas prices and a higher winning trading percentage. These increases were partially offset by the weather derivative as noted previously.

Other Operating Expenses. Operations and maintenance expenses increased by approximately $22.0 million, or 23 percent, in fiscal 2001, as compared with fiscal 2000. The increase was primarily the result of the inclusion of recent acquisitions of TIC and Virginia Gas (see Notes 3 and 4 of the Notes to the Consolidated Financial Statements); higher provisions for bad debts, mainly as a result of the impact of extremely high gas prices; increased commission expenses related to the increases in operating margins by NUI Energy Brokers, NUI Energy and NUI Telecom; higher benefits costs due to the continued rising increases in medical costs; and leasing costs associated with the Company's new technology lease for computer equipment.

Depreciation and amortization decreased approximately $0.4 million in fiscal 2001, as compared to the prior year, due to reduced capital expenditures that were placed in service during the current year and the Company now leasing technology assets which were owned in previous years. These decreases were partially offset by an increase in goodwill amortization in conjunction with the previously noted acquisitions of Virginia Gas and TIC.

Interest Expense. Interest expense increased by approximately $4.3 million in fiscal 2001, as compared to fiscal 2000. Interest expense increased over the prior fiscal year due to higher average short-term borrowings, which was partially offset by the effect of declining interest rates throughout fiscal 2001. Also contributing to the increase was the interest on $60 million of Senior Notes issued during August 2001 (see "Liquidity and Capital Resources").

Other Income and (Expense), Net. Other income and expense, net, decreased by approximately $8.7 million in fiscal 2001, as compared to fiscal 2000. The decrease was primarily the result of the Company recording $5.9 million of losses related to its equity interest in TIC prior to the May 2001 acquisition, compared to $1.3 million of equity income in fiscal 2000 (see further discussion that follows). Also included in the prior year was a non-recurring gain on the sale of assets of $2.8 million.

Fiscal Years Ended September 30, 2000 and 1999

Net Income. Net income for fiscal 2000 was $26.7 million, or $2.07 per share, as compared with net income of $24.6 million, or $1.93 per share, in fiscal 1999. Net income in both fiscal 2000 and 1999 include non-recurring credits to income. Net income in fiscal 2000 includes after-tax non-recurring credits of $1.7 million, or $0.13 per share, related to the gain on the sale of assets. Net income in fiscal 1999 includes non-recurring items totaling $2.3 million, or $0.18 per share, after tax, incurred mainly as a result of the Company's 1998 reorganization (see Note 5 of the Notes to the Consolidated Financial Statements). Absent these non-recurring gains, net income would have been $25.1 million, or $1.94 per share, in fiscal 2000 and $22.2 million, or $1.75 per share, in fiscal 1999. The increase in earnings in fiscal 2000 was mainly attributed to improved results in the Company's non-regulated businesses.

Operating Revenues. The Company's operating revenues increased $108.6 million, or 13 percent, during fiscal 2000, as compared with fiscal 1999. Distribution Services revenues increased approximately $30.3 million, mainly as a result of slightly colder weather than the prior year (4.5 percent colder) and customer growth.

Wholesale Energy Marketing and Trading revenue increased by approximately $49.7 million, mainly due to increased volatility in gas prices thereby creating greater opportunity for wholesale trading by NUI Energy Brokers, as well as a significant increase in gas prices.

Retail and Business Services revenue increased $28.6 million, primarily due to the inclusion of NUI Telecom effective November 12, 1999 (see Note 2 of the Notes to the Consolidated Financial Statements), which contributed $5.2 million in revenues, increases in the Company's appliance services business and increases in revenues from UBS and NUI Energy, the latter as a result of significantly higher gas prices.

Operating Margins. The Company's operating margins increased $13.2 million, or 7 percent, in fiscal 2000, as compared with fiscal 1999. The increase was primarily attributable to an increase of approximately $7.1 million, or 4 percent, in the Company's Distribution Services segment as a result of weather that was 4.5 percent colder than fiscal 1999, but still 11 percent warmer than normal, and customer growth. As a result of weather normalization clauses, operating margins were approximately $4.4 million and $5.4 million higher in fiscal 2000 and 1999, respectively, than they would have been without such clauses. To further reduce the risk associated with weather, NUI Energy Brokers entered into a weather derivative during fiscal 2000, which resulted in approximately $1.5 million of margin.

Operating margins from the Company's Wholesale Energy Marketing and Trading segment increased by approximately $5.3 million, or 59 percent, primarily due to an increase of almost 55 percent in operating margins from NUI Energy Brokers as a result of increased volatility in gas prices and the weather derivative, as noted previously.

Operating margins increased in the Retail and Business Services segment by approximately $0.8 million, or 8 percent, due to the inclusion of NUI Telecom, and increases in revenues for the appliance service business and UBS. Partly offsetting these increases was a decrease in margins from NUI Energy, which had margins of $2.4 million in fiscal 2000, as compared with $4.1 million in fiscal 1999. Due to the surge in gas prices during fiscal 2000, many of NUI Energy's customers opted to enter into month-to-month contracts rather than long-term contracts, thereby decreasing the mark-to-market value of these contracts compared to fiscal 1999. As a result, even though volumes and customers both increased during the fiscal 2000, margins declined as compared to 1999.

Other Operating Expenses. Operations and maintenance expenses increased by approximately $6.4 million, or 7 percent, in fiscal 2000, as compared with fiscal 1999. The increase was primarily the result of the inclusion of NUI Telecom beginning November 12, 1999 (see Note 2 of the Notes to the Consolidated Financial Statements), continued investment in the Company's non-regulated activities and higher benefits expenses due to the rising cost of medical claims.

The Company recognized approximately $4.0 million of pre-tax, non-recurring income in fiscal 1999. These items were mainly the result of the Company's 1998 reorganization. (See Note 5 of the Notes to the Consolidated Financial Statements for a further description of these items.)

Depreciation and amortization increased approximately $2.6 million in fiscal 2000, as compared to the fiscal 1999, primarily due to additional plant in service and an increase in depreciation rates for the Company's Florida utility division.

Interest Expense. Interest expense decreased by approximately $0.2 million in fiscal 2000, as compared to fiscal 1999. The Company received regulatory approval during fiscal 2000 for the retroactive deferral of carrying costs associated with the Company's regulatory asset relating to investigation and remediation of New Jersey manufactured gas plant sites and to treat such carrying costs as a regulatory asset, which decreased interest expense in fiscal 2000. This decrease was partially offset by increases in fiscal 2000 due to higher average short-term borrowings and higher interest rates (see "Liquidity and Capital Resources").

Other Income and (Expense), Net. Other income and expense, net, increased by approximately $2.7 million in fiscal 2000, as compared to fiscal 1999. The increase was primarily the result of a gain on the sale of assets of $2.8 million, but also reflected improved results from TIC of approximately $0.1 million during fiscal 2000.

TIC Enterprises

On May 15, 2001, NUI acquired the remaining 51 percent interest in TIC Enterprises LLC (TIC). The purchase price was $8 million plus the assumption of approximately $8 million of debt. NUI previously acquired 49 percent ownership on May 18, 1997, for approximately $22 million. Prior to May 15, 2001, NUI recorded its 49 percent share of TIC's earnings or losses under the equity method of accounting included under other income and expense on the Consolidated Statement of Income. Upon the full ownership of TIC, NUI began consolidating the results of TIC.

NUI recorded approximately $1.3 million of equity income in fiscal 1997, $0.1 million of equity losses in fiscal 1998, and $1.2 million and $1.3 million of equity income for fiscal years 1999 and 2000, respectively (all amounts are net of goodwill amortization), representing its 49 percent share of TIC's operating results. In fiscal 2001, TIC began experiencing operating losses incurred, in part, as a result of the downturn in the economy and the market for telecommunications equipment. At the same time, TIC was in the middle of switching telecommunications equipment providers from Lucent Technologies to Nortel Networks. The changeover of strategic partners required a ramp-up period to learn the new products, train the salesforce, and hire and mobilize a larger sales force. In addition, TIC was also in the midst of ramping up for its program to sell United States Postal Service (USPS) products and services. When the market for telecommunications equipment faded, TIC was not yet profitable with its USPS product line. As a result, beginning in November 2000, TIC began to experience operating losses. The TIC senior management team at that time was unable to institute effective measures to mitigate these issues, and on May 15, 2001, NUI purchased the remaining 51 percent of TIC. NUI recorded approximately $6 million of equity losses for its 49 percent interest in TIC during fiscal 2001, and recorded an additional $4 million of pre-tax operating losses, which are included in NUI's Consolidated Statement of Income.

TIC had operating losses of approximately $2 million per month from November 2000 through May 2001. Upon obtaining control, NUI focused on implementing a turnaround plan intended to position TIC to outlast the temporary downturn in the telecommunications market. Since the Company took control of TIC, TIC has reduced costs significantly. In addition TIC has been able to continue to develop the USPS product line. The result of these efforts allowed TIC to nearly break-even for the month of September  2001. TIC is continuing to focus on controlling expenses and is working on creating additional strategic alliances to diversify its product offerings and further reduce its dependence on the telecommunications equipment market.

NUI has recorded approximately $39 million of unamortized goodwill associated with its complete acquisition of TIC. As a result of the operating losses incurred during fiscal 2001, NUI completed a review of undiscounted expected future net cash flows in accordance with Statement of Financial Accounting Standards No. 121 (SFAS 121), "Impairment of Long-Lived Assets" as of September 30, 2001. The result of this analysis indicated that the carrying value of the goodwill for TIC was not impaired as of September 30, 2001, on an undiscounted basis and did not require a write-down. However, NUI has adopted the provisions of Statement of Financial Accounting Standards No. 142 (SFAS 142), "Goodwill and Intangible Assets" effective October 1, 2001, which requires that a fair market valuation be performed on the carrying value of TIC. The results of this analysis are not complete at this time, however, such analysis may result in a non-cash impairment charge that could be material to the results of o perations and financial condition of the Company. As prescribed by SFAS 142, the Company must complete the fair market valuation within six months, or by March 31, 2002. However any charges that would result from implementing SFAS 142 would be measured and recorded as of the beginning of fiscal 2002.

Regulatory Matters

On November 1, 2000, the New Jersey Board of Public Utilities (NJBPU) issued an order approving an increase in the New Jersey Purchased Gas Adjustment (PGA) clause by 17.3 percent. The rate increase was effective immediately and resulted in a revenue increase of approximately $47 million annually. In addition, the Company was allowed to increase the PGA through a Flexible Pricing Mechanism (FPM) which allowed the Company to make additional pricing adjustments on a monthly basis of approximately 2 percent each month between December 2000 and April 2001. Each of these FPM increases resulted in additional revenues of up to $6 million on an annual basis. The increases in the PGA rate were granted to cover the higher costs of natural gas purchases which had risen from about $2.50 per dekatherm in July 1999 to more than $10.00 per dekatherm in January 2001 (see "Liquidity and Capital Resources").

In a December 1, 2000 filing, the Company requested the extension of the 2 percent FPM rate adjustments for an additional three months and authorization to record interest on its under-recovered gas balance. On March 30, 2001, the NJBPU issued an order approving the Company's request to extend the monthly 2 percent increases through July 2001 if actual gas costs warranted such increases. The Company has implemented these increases. In addition, the order allowed the Company to begin recording interest on its under-recovered gas cost balance, and to establish a new Gas Cost Under-recovery Adjustment (GCUA) to recover the gas cost under-recovery balance as of October, 31, 2001, with associated interest over a three-year period from December 1, 2001, through November 30, 2004. In addition, pursuant to the order, the Company was required to make a filing on November 15, 2001, to establish a new PGA rate designed to recover purchased gas costs for the period November 1, 2001, through September 30, 2002. In that filing, the Company requested approval to decrease its PGA rate and implement its GCUA rate, with a net effect representing a decrease of 12.7 percent in residential customer bills. The NJBPU approved the Company's request on an interim basis and these changes became effective December 1, 2001.

The Company's City Gas Company of Florida division received approval from the Florida Public Service Commission on January 16, 2001, to increase its annual base rates by $5.13 million. The increase represents a portion of the Company's request to cover the cost of service enhancements and reliability improvements since City Gas' last base rate increase in 1996. The new rate level provides for an allowed return on equity of 11.5 percent and an overall allowed rate of return of 7.88 percent.

In response to the Electric Discount and Energy Competition Act which was signed into law in February 1999, on March 30, 2001, the NJBPU approved a Stipulation which enabled all retail customers in New Jersey to choose a natural gas supplier, provided an incentive for these customers to choose an alternate natural gas supplier and allowed the Company to continue offering basic gas supply service through December 2002, when the NJBPU will decide if the gas supply function should be removed from the gas distribution companies and made competitive. As of September 30, 2001, no residential customers in the Company's New Jersey service territory have switched to an alternative gas supplier.

Liquidity and Capital Resources

The Company had net cash used by operating activities of $20.8 million in fiscal 2001, compared to net cash provided by operating activities of $46.2 million in fiscal 2000, and $59.0 million in fiscal 1999. The decrease in fiscal 2001, as compared with fiscals 2000 and 1999, was primarily due to significantly higher gas prices paid during the current year.

During the past year, natural gas prices throughout the United States had increased to unprecedented highs. These price increases resulted in the need for higher than anticipated levels of short-term borrowings. There is a lag from the time of payment for purchased gas by the Company to the collection of such gas costs from customers through PGA clauses. Accordingly, the results for fiscal 2001 reflect the impact of this lag (see "Interest Expense"). As noted under Regulatory Matters, the Company has received various rate increases through its PGA clauses. However, such rate increases in New Jersey were not timely and have resulted in a significant lag between when the Company must pay for the gas compared to amounts collected from customers. The Company did receive the ability to accrue interest income on these under-collections in New Jersey, which will be included in PGA rates in the future.

Because the Company's primary business is highly seasonal, short-term debt is used to meet seasonal working capital requirements. The Company also borrows under its bank lines of credit to finance portions of its capital expenditures, pending refinancing through the issuance of equity or long-term indebtedness at a later date depending upon prevailing market conditions.

Short-Term Debt. The weighted average daily amounts outstanding of notes payable to banks and the weighted average interest rates on those amounts were $161.2 million at 6.2 percent in fiscal 2001, $75.3 million at 6.7 percent in fiscal 2000, and $68.2 million at 5.3 percent in fiscal 1999.

At September 30, 2001, the Company had outstanding notes payable to banks amounting to $184.6 million and available unused lines of credit amounting to $8.9 million.

Long-Term Debt and Funds for Construction Held by Trustee. On August 20, 2001, the Company issued $60 million of Senior Notes with interest rates ranging from 6.60 percent to 7.29 percent. The proceeds were used to repay short-term indebtedness, which was used in part to acquire Virginia Gas and TIC.

The Company deposits in trust the unexpended portion of the net proceeds from its Gas Facilities Revenue Bonds until drawn upon for eligible expenditures. As of September 30, 2001, and September 30, 2000, the total unexpended portions of all of the Company's Gas Facilities Revenue Bonds were $6.4 million and $21.3 million, respectively, and are classified on the Company's Consolidated Balance Sheet, including interest earned thereon, as Funds for Construction Held by Trustee.

Common Stock. The Company periodically issues shares of common stock in connection with NUI Direct, the Company's dividend reinvestment and stock purchase plan, and various employee benefit plans. The proceeds from such issuances amounted to approximately $0.5 million in fiscal 2001, and $0.7 million in both fiscals 2000 and 1999, that were used primarily to reduce outstanding short-term debt.

The Company's long-term debt agreements include, among other things, restrictions as to the payment of cash dividends. Under the most restrictive of these provisions, the Company is permitted to pay approximately $76.8 million of cash dividends at September 30, 2001.

From time to time, the Company may issue additional equity to reduce short-term indebtedness and for other general corporate purposes.

Assets Held for Sale. Having completed the acquisition of Virginia Gas, the Company now seeks to focus on the development of the Virginia Gas operations that complement and augment existing NUI businesses and have opportunities for growth. Accordingly, the Company intends to sell the net assets of NUI Virginia Gas' Propane (VG Propane) and Marketing operations, as well as its 50 percent equity investment in a Virginia Gas Distribution Company (VGDC) and has classified these assets as Assets Held for Sale on the Consolidated Balance Sheet at September 30, 2001.

On October 4, 2001, the Company acquired the remaining 50 percent interest in VGDC that it did not previously own (see "Capital Expenditures and Commitments"). NUI intends to continue to hold the assets of VGDC for sale and is actively seeking a buyer.

On October 11, 2001, the Company sold the capital stock of VG Propane to Heritage Holdings, Inc. as of that date (see "Capital Expenditures and Commitments").

Capital Expenditures and Commitments

Capital Expenditures. Capital expenditures, which consist primarily of expenditures to expand and upgrade the Company's gas distribution systems, were $60.5 million in fiscal 2001, $52.7 million in fiscal 2000 and $47.9 million in fiscal 1999. Included in the current year capital expenditures was $13.7 million related to the development of an 83-mile distribution line through South-Central Florida. This will provide natural gas transportation service to Florida Crystals Corporation, a major sugar products producer with power plants, sugar mills, and refineries in Okeelanta and Osceola, as well as the towns of South Bay and Belle Glade.

Capital expenditures are expected to be approximately $61 million in fiscal 2002, which will be used primarily for the completion of the Florida distribution line, continued expansion and upkeep of the Company's natural gas distribution system, as well as certain technology projects.

Environmental. The Company owns or previously owned six former manufactured gas plant (MGP) sites in the state of New Jersey and ten former MGP sites in the states of North Carolina, South Carolina, Pennsylvania, New York and Maryland. Based on the Company's most recent assessment, the Company has recorded a total reserve for environmental investigation and remediation costs of approximately $33 million, which is the probable minimum amount that the Company expects it will expend in the next 20 years to remediate the Company's MGP sites. Of this reserve, approximately $29 million relates to New Jersey MGP sites and approximately $4 million relates to the MGP sites located outside New Jersey. The Company believes that all costs associated with the New Jersey MGP sites will be recoverable in rates or from insurance carriers. In New Jersey, the Company is currently recovering environmental costs in rates over a rolling seven-year period through its MGP Remediation Adjustment Clause. As a result, the Company has begun rate recovery of approximately $8.2 million of environmental costs incurred through June 30, 2000. Recovery of an additional $1 million in environmental costs incurred between July 1, 2000 and June 30, 2001, is currently pending NJBPU approval. With respect to costs that may be associated with the MGP sites located outside the state of New Jersey, the Company intends to pursue recovery from ratepayers, former owners and operators of the sites and from insurance carriers. However, the Company is not able, at this time, to express a belief as to whether any or all of these recovery efforts will ultimately be successful.

Gas Procurement Contracts. Certain of the Company's long-term contracts for the supply, storage and delivery of natural gas include fixed charges that amount to approximately $60.1 million annually. The Company currently recovers, and expects to continue to recover, such fixed charges through its PGA clauses. As a result of the unbundling of natural gas services in New Jersey, these contracts may result in the realization of stranded costs by the Company. Management believes the outcome of these actions will not have a material adverse effect on the Company's results. The Company also is committed to purchase, at market-related prices, minimum quantities of gas that, in the aggregate, are approximately 2.6 billion cubic feet (Bcf) per year or to pay certain costs in the event the minimum quantities are not taken. The Company expects that minimum demand on its systems for the duration of these contracts will continue to exceed these minimum purchase obligations.

Long-term Debt. The Company is scheduled to repay $20 million of Medium-Term Notes in August 2002. This amount has been included in current liabilities at September 30, 2001.

Sale of Valley Cities Gas and Waverly Gas. On October 5, 2000, the Company agreed to sell the assets of its Valley Cities Gas and Waverly Gas utility divisions (VCW) to C&T Enterprises, Inc. (C&T), of Pennsylvania for $15 million. C&T will pay an additional $3 million to the Company should certain revenue targets be achieved. The transaction is expected to close early in calendar 2002, after all regulatory approvals have been obtained. For the year ended September 30, 2001, VCW generated $11.8 million of operating revenues, $3.9 million of operating margin and $1.0 million of operating income.

Joint Venture with Duke Energy. On April 30, 2001, the Company announced an agreement with a unit of Duke Energy to develop a natural gas storage facility in Saltville, Virginia. NUI's Virginia Gas subsidiary and Duke Energy Gas Transmission (DEGT) have created a limited liability company, Saltville Gas Storage Company LLC. Upon approval by necessary regulatory agencies, NUI Virginia Gas will contribute certain storage assets to the limited liability company valued at approximately $16 million. DEGT will contribute the next $16 million of capital required to expand the facility for its intended purpose.

The Joint Venture will expand the present Saltville storage facility from its current capacity of 1.1 billion cubic feet (Bcf) to approximately 12 Bcf and connect it to DEGT's East Tennessee Natural Gas mainline system. At full capacity, the Saltville storage field will be able to deliver up to 500 million cubic feet of natural gas to area markets. The Saltville facility features fast-injection and fast-withdrawal capabilities offered by salt cavern storage.

Development of the Saltville facility creates a strategically located energy-trading hub for NUI's wholesale trading arm, NUI Energy Brokers. This will enable the Company to capitalize on the energy supply, wholesale trading and portfolio management opportunities in the rapidly developing Mid-Atlantic region. The additional storage capacity will allow the Company to meet the significant demand from local distribution companies as well as power plant development that is underway in the region.

Acquisition of Virginia Gas Storage Company and Virginia Gas Distribution Company. On October 4, 2001, the Company completed is acquisition of the remaining 50 percent interests in Virginia Gas Storage Company (VGSC) and Virginia Gas Distribution Company (VGDC) from the two individuals that each owned 25 percent of the stock of both companies. Under terms of the agreement, the Company paid each owner $750,000 and issued 72,324 shares of NUI Common Stock in exchange for their stock in both VGSC and VGDC. As noted in "Liquidity and Capital Resources- Assets Held for Sale," the Company intends to sell VGDC within the next twelve months.

Sale of Virginia Gas Propane Company. On October 11, 2001, the Company entered into an agreement to sell the capital stock of its Virginia Gas Propane Company (VG Propane) to Heritage Holdings, Inc. The purchase price was approximately $3.8 million and is subject to post-closing adjustments based on the ending assets and liabilities of VG Propane as of that date. The proceeds are expected to be reinvested in additional pipeline and storage capacity to facilitate the growth of NUI Virginia Gas.

Market Risk Exposure

The Company's wholesale trading subsidiary, NUI Energy Brokers, uses derivatives for multiple purposes: i) to hedge price commitments and minimize the risk of fluctuating gas prices, ii) to take advantage of market information and opportunities in the marketplace, and iii) to fulfill its trading strategies and, therefore, ensure favorable prices and margins. These derivative instruments include forwards, futures, options and swaps.

The risk associated with uncovered derivative positions is closely monitored on a daily basis, and controlled in accordance with NUI Energy Brokers' Risk Management Policy. This policy has been approved by the Company's Board of Directors and dictates policies and procedures for all trading activities. The policy defines both value-at-risk (VaR) and loss limits, and all traders are required to read and follow this policy. At the end of each day, all trading positions are marked-to-market and a VaR is calculated. This information, as well as the status of all limits, is disseminated to senior management daily.

NUI Energy Brokers utilizes the variance/covariance VaR methodology. Using a 95 percent confidence interval and a one-day time horizon, as of September 30, 2001, NUI Energy Brokers' VaR was $330,000.

Effects of Inflation

The Company's tariffs associated with its utility operating divisions provide PGA clauses through which rates charged to customers are adjusted for changes in the cost of gas on a reasonably current basis. Increases in other utility costs and expenses not otherwise offset by increases in revenues or reductions in other expenses could have an adverse effect on earnings due to the time lag associated with obtaining regulatory approval to recover such increased costs and expenses, and the uncertainty of whether regulatory commissions will allow full recovery of such increased costs and expenses.

Forward-Looking Statements

This document contains forward-looking statements. These statements are based on management's current expectations and information currently available and are believed to be reasonable and are made in good faith. However, the forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the statements. Factors that may make the actual results differ from anticipated results include, but are not limited to, economic conditions; weather fluctuations; regulatory changes; competition from other providers of similar products; the market for telecommunications equipment; interest rate changes; and other uncertainties, all of which are difficult to predict and some of which are beyond our control. For these reasons, you should not rely on these forward-looking statements when making investment decisions. The words "expect," "believe," "project," "anticipate," "intend," "should," "could," "will," and variations of suc h words and similar expressions, are intended to identify forward-looking statements. We do not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise.

Item 8. Financial Statements and Supplementary Data

Consolidated financial statements of the Company as of September 30, 2001 and 2000 and for each of the three years in the period ended September 30, 2001, the auditors' report thereon, and the unaudited quarterly financial data for the two-year period ended September 30, 2001, are included herewith as indicated on "Index to Financial Statements and Schedule" on page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

PART III

Item 10. Directors and Executive Officers of the Registrant

Information concerning directors and officers of the Company is included in the definitive Proxy Statement for the Company's Annual Meeting of Stockholders, which is incorporated herein by reference. Such Proxy Statement was filed with the Securities and Exchange Commission on December 14, 2001.

Item 11. Executive Compensation

Information concerning executive compensation is included in the definitive Proxy Statement for the Company's Annual Meeting of Stockholders, which is incorporated herein by reference. Such Proxy Statement was filed with the Securities and Exchange Commission on December 14, 2001.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Information concerning security ownership of certain beneficial owners and management is included in the definitive Proxy Statement for the Company's Annual Meeting of Stockholders, which is incorporated herein by reference. Such Proxy Statement was filed with the Securities and Exchange Commission on December 14, 2001.

Item 13. Certain Relationships and Related Transactions

Information concerning certain relationships and related transactions is included in the definitive Proxy Statement for the Company's Annual Meeting of Stockholders, which is incorporated herein by reference. Such Proxy Statement was filed with the Securities and Exchange Commission on December 14, 2001.

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)   (1) Consolidated financial statements of the Company as of September 30, 2001 and 2000 and for each of the three years in the period ended September 30, 2001 and the auditors' report thereon, and the unaudited quarterly financial data for the two-year period ended September 30, 2001 are included herewith as indicated on the "Index to Financial Statements and Schedule" on page F-1.

     (2) The applicable financial statement schedule for the fiscal years 2001, 2000 and 1999 is included herewith as indicated on the "Index to Financial Statements and Schedule" on page F-1.

     (3) Exhibits:

Exhibit No.	Description	Reference
2(i)	Letter Agreement, dated June 29, 1993, by and between NUI Corporation and Pennsylvania & Southern Gas Company	Incorporated by reference to Exhibit 2(i) to Registration Statement No. 33-50561
2(ii)	Agreement and Plan of Merger, dated as of July 27, 1993, by and between NUI Corporation and Pennsylvania & Southern Gas Company	Incorporated by reference to Exhibit 2(ii) to Registration Statement No. 33-50561
2(iii)	Agreement and Plan of Merger, dated as of June 13, 2000 by and among NUI Corporation, VGC Acquisition Co. and Virginia Gas Co.	Incorporated by reference to Annex A of Registration Statement 333-46036 dated September 18, 2000
2(iv)	Agreement and Plan of Exchange between NUI Corporation and NUI Holding Company, dated as of March 1, 2001	Incorporated by reference to Exhibit 2 to NUI's Form 8-K dated March 2, 2001
2(v)	Agreement and Plan of Merger, as amended and restated as of March 28, 2001 by and among NUI Corporation, VGC Acquisition Co. and Virginia Gas Co..	Filed herewith
3(i)	Certificate of Incorporation, amended and restated as of December 1, 1995	Incorporated by reference to Exhibit 3(i) of NUI's Form 10-K Report for Fiscal 1995
3(ii)	By-Laws, amended and restated as of March 2, 2001	Filed herewith
4(i)	Rights Agreement between NUI Corporation and Mellon Securities Trust Company dated November 28, 1995	Incorporated by reference to NUI's Form 8-K dated December 1, 1995
4(ii)	First Amendment to Rights Agreement between NUI Corporation and Mellon Securities Trust Company dated as of February 26, 2001	Incorporated by reference to Exhibit 4 to NUI's Form 8-K dated March 2, 2001
4(iii)	Rights Agreement between NUI Corporation and American Stock Transfer & Trust Company dated as of March 2, 2001	Incorporated by reference to Exhibit 10(i) to NUI's Form 8-A dated March 2, 2001
10(i)	Service Agreement by and between Transcontinental Gas Pipe Line Corporation and Elizabethtown Gas Company ("EGC"), dated February 1, 1992 (#3686)	Incorporated by reference to Exhibit 10(i) to Registration Statement No. 33-50561
10(ii)	Service Agreement under Rate Schedule GSS by and between Transcontinental Gas Pipe Line Corporation and EGC, dated July 1, 1996	Incorporated by reference to Exhibit 10(ii) of NUI's Form 10-K Report for Fiscal 1997
10(iii)	Service Agreement under Rate Schedule LG-A by and between Transcontinental Gas Pipe Line Corporation and EGC, dated January 12, 1971, as amended 5/15/96	Incorporated by reference to Exhibit 10(iii) of NUI's Form 10-K Report for Fiscal 1999
10(iv)	Service Agreement by and between Transcontinental Gas Pipe Line Corporation and EGC, dated November 1, 1995 (Contract #1.1997)	Incorporated by reference to Exhibit 10(iv) of NUI's Form 10-K Report for Fiscal 1996
10(v)	Service Agreement by and between Transcontinental Gas Pipe Line Corporation and EGC, dated November 1, 1995 (Contract #1.1995)	Incorporated by reference to Exhibit 10(v) of NUI's Form 10-K Report for Fiscal 1996
10(vi)	Firm Gas Transportation Agreement by and among Transcontinental Gas Pipe Line Corporation, EGC and National Fuel Gas Supply Corporation, dated November 1, 1984	Incorporated by reference to Exhibit 10(vi) to Registration Statement No. 33-50561
10(vii)	Service Agreement by and among Transcontinental Gas Pipe Line Corporation and EGC, dated November 1, 1995 (Contract #1.1998)	Incorporated by reference to Exhibit 10(vii) of NUI's Form 10-K Report for Fiscal 1996
10(viii)	Service Agreement for Rate Schedule CDS by and between Texas Eastern Transmission Corporation and EGC, dated December 1, 1993 (Contract #800361)	Incorporated by reference to Exhibit 10(viii) to NUI's Form 10-K Report for Fiscal 1994
10(ix)	Service Agreement under Rate Schedule FTS-7 by and between Texas Eastern Transmission Corporation and EGC, dated October 25, 1994 (Contract #331720)	Incorporated by reference to Exhibit 10(ix) to NUI's Form 10-K Report for Fiscal 1994
10(x)	Service Agreement for Rate Schedule FTS-5 by and between Texas Eastern Transmission Corporation and EGC, dated March 18, 1996 (Contract #331501)	Incorporated by reference to Exhibit 10(x) of NUI's Form 10-K Report for Fiscal 1997
10(xi)	Service Agreement under Rate Schedule FTS-8 by and between Texas Eastern Transmission Corporation and EGC, dated June 28, 1994 (Contract #331013)	Incorporated by reference to Exhibit 10(xi) to NUI's Form 10-K Report for Fiscal 1994
10(xii)	Firm Transportation Service Agreement under FTS-2 Rate Schedule by and between City Gas and Florida Gas Transmission, dated August 12, 1993	Incorporated by reference to Exhibit 10(xii) of NUI's Form 10-K Report for Fiscal 1997
10(xiii)	Service Agreement for Rate Schedule FTS-2 by and between Texas Eastern Transmission Corporation and EGC, dated June 1, 1993 (Contract #330788)	Incorporated by reference to Exhibit 10(xiii) to Registration Statement No. 33-50561
10(xiv)	Service Agreement under NTS Rate Schedule by and between Columbia Gas Transmission Corporation and EGC, dated November 1, 1993 (Contract #39275)	Incorporated by reference to Exhibit 10(xiv) to NUI's Form 10-K Report for Fiscal 1993
10(xv)	Service Agreement under SST Rate Schedule by and between Columbia Gas Transmission Corporation and EGC, dated November 1, 1993 (Contract #38045)	Incorporated by reference to Exhibit 10(xv) to NUI's Form 10-K Report for Fiscal 1993
10(xvi)	Service Agreement under FTS Rate Schedule by and between Columbia Gas Transmission Corporation and EGC, dated November 1, 1993 (Contract #37882)	Incorporated by reference to Exhibit 10(xvi) to NUI's Form 10-K Report for Fiscal 1993
10(xvii)	Gas Transportation Agreement under FT-G Rate Schedule by and between Tennessee Gas Pipeline Company and EGC (Contract #597), dated September 1, 1993	Incorporated by reference to Exhibit 10(xvii) to NUI's Form 10-K Report for Fiscal 1993
10(xviii)	Gas Transportation Agreement under FT-G Rate Schedule by and between Tennessee Gas Pipeline Company and EGC (Contract #603), dated September 1, 1993	Incorporated by reference to Exhibit 10(xviii) to NUI's Form 10-K Report for Fiscal 1993
10(xix)	Service Agreement by and between Transcontinental Gas Pipe Line Company and EGC, dated November 1, 1995 (Contract #3832)	Incorporated by reference to Exhibit 10(xix) of NUI's Form 10-K Report for Fiscal 1996
10(xx)	Firm Transportation Service Agreement under FTS-1 Rate Schedule by and between City Gas and Florida Gas Transmission dated October 1, 1993 (Contract # 5034) as amended July 26, 2000	Incorporated by reference to Exhibit 10(xx) of NUI's Form 10-K Report for Fiscal 2000
10(xxi)	Amended and Restated Lease Agreement between NUI Corporation and Liberty Hall Joint Venture, dated April 28, 2000	Incorporated by reference to Exhibit 10(xx) of NUI's Form 10-K Report for Fiscal 2000
10(xxii)	1988 Stock Plan	Incorporated by reference to Exhibit 10(viii) to Registration Statement No. 33-21525
10(xxiii)	First Amendment to 1988 Stock Plan	Incorporated by reference to Exhibit 10(xxxiii) to Registration Statement No. 33-46162
10(xxiv)	Form of Termination of Employment and Change in Control Agreements	Incorporated by reference to Exhibit 10(xxiii) of NUI's Form 10-K Report for Fiscal 1995
10(xxv)	Firm Transportation Service Agreement under FTS-2 Rate Schedule by and between City Gas and Florida Gas Transmission, dated December 12, 1991 and Amendment dated November 12, 1993 (Contract #3608)	Incorporated by reference to Exhibit 10(xxiv) of NUI's Form 10-K Report for Fiscal 1994
10(xxvi)	Service Agreement under Rate Schedule LG-A by and between Transcontinental Gas Pipeline and North Carolina Gas Service Division of Pennsylvania & Southern Gas Company, dated August 5, 1971	Incorporated by reference to Exhibit 10(xxv) of NUI's Form 10-K Report for Fiscal 1994
10(xxvii)	Service Agreement under Rate Schedule GSS by and between Transcontinental Gas Pipeline and North Carolina Gas Service, dated July 1, 1996	Incorporated by reference to Exhibit 10(xxvi) of NUI's Form 10-K Report for Fiscal 1997
10(xxviii)	1996 Employee Stock Purchase Plan, as amended	Incorporated by reference to Exhibit 4 of Registration Statement No. 333-49349
10(xxix)	Service Agreement under Rate Schedule FT by and between Transcontinental Gas Pipeline and North Carolina Gas Service Division of Pennsylvania & Southern Gas Company, dated February 1, 1992 (Contract # 0.3922)	Incorporated by reference to Exhibit 10(xxviii) of NUI's Form 10-K Report for Fiscal 1994
10(xxx)	1996 Directors Stock Purchase Plan	Incorporated by reference to Exhibit 10(xxix) of NUI's Form 10-K Report for Fiscal 1996
10(xxxi)	Gas Storage Contract under Rate Schedule FS by and between Tennessee Gas Pipeline Company and Pennsylvania & Southern Gas Company, dated September 1, 1993 (Contract #2277)	Incorporated by reference to Exhibit 10(xxx) of NUI's Form 10-K Report for Fiscal 1994
10(xxxii)	Gas Transportation Agreement under Rate Schedule FT-A by and between Tennessee Gas Pipeline Co. and Pennsylvania & Southern Gas Company, dated September 1, 1993 (Contract #935)	Incorporated by reference to Exhibit 10(xxxi) of NUI's Form 10-K Report for Fiscal 1994
10(xxxiii)	Gas Transportation Agreement under Rate Schedule FT-A by and between Tennessee Gas Pipeline Co. and Pennsylvania & Southern Gas Company, dated September 1, 1993 (Contract #936)	Incorporated by reference to Exhibit 10(xxxii) of NUI's Form 10-K Report for Fiscal 1994
10(xxxiv)	Gas Transportation Agreement under Rate Schedule FT-A by and between Tennessee Gas Pipeline Co. and Pennsylvania & Southern Gas Company, dated September 1, 1993 (Contract #959)	Incorporated by reference to Exhibit 10(xxxiii) of NUI's Form 10-K Report for Fiscal 1994
10(xxxv)	Gas Transportation Agreement under Rate Schedule FT-A by and between Tennessee Gas Pipeline Co. and Pennsylvania & Southern Gas Company, dated September 1, 1993 (Contract #2157)	Incorporated by reference to Exhibit 10(xxxiv) of NUI's Form 10-K Report for Fiscal 1994
10(xxxvi)	Service Agreement for Rate Schedule CDS by and between Texas Eastern Transmission Corporation and EGC, dated December 1, 1993 (Contract #800217)	Incorporated by reference to Exhibit 10(xx) of NUI's Form 10-K Report for Fiscal 2000
10(xxxvii)	Service Agreement for Rate Schedule FT by and between Transcontinental Gas Pipe Line Corporation and EGC (Contract #1.0431) dated April 1, 1995	Incorporated by reference to Exhibit 10(xxxvi) of NUI's Form 10-K Report for Fiscal 1995
10(xxxviii)	Service Agreement for Rate Schedule FT by and between Transcontinental Gas Pipe Line Corporation and EGC (Contract #1.0445) dated April 1, 1995	Incorporated by reference to Exhibit 10(xxxvii) of NUI's Form 10-K Report for Fiscal 1995
10(xxxix)	Service Agreement for Rate Schedule SS-1 by and between Texas Eastern Transmission Corporation and EGC (Contract (#400196) dated September 23, 1994	Incorporated by reference to Exhibit 10(xxxviii) of NUI's Form 10-K Report for Fiscal 1995
10(xl)	Gas Storage Agreement under Rate Schedule FS by and between Tennessee Gas Pipeline Company and EGC (Contract #8703) dated November 1, 1994	Incorporated by reference to Exhibit 10(xxxix) of NUI's Form 10-K Report for Fiscal 1995
10(xli)	Consulting Agreement, dated as of March 24, 1995, between NUI Corporation and John Kean	Incorporated by reference to Exhibit 10(xl) of NUI's Form 10-K Report for Fiscal 1995
10(xlii)	Form of Deferred Compensation Agreement	Incorporated by reference to Exhibit 10(xli) of NUI's Form 10-K Report for Fiscal 1999
10(xliii)	1996 Stock Option and Stock Award Plan, as amended and restated as of November 26, 2001	Filed herewith
10(xliv)	Service Agreement under Rate Schedule FT by and between Elkton Gas and Eastern Shore Natural Gas Company, dated as of November 1, 1997 (Contract #010003)	Incorporated by reference to Exhibit 10(xliii) of NUI's Form 10-K Report for Fiscal 1997
10(xlv)	Service Agreement under Rate Schedule FT by and between Elkton Gas and Eastern Shore Natural Gas Company, dated as of November 1, 1997 (Contract #010011)	Incorporated by reference to Exhibit 10(xliv) of NUI's Form 10-K Report for Fiscal 1997
10(xlvi)	Service Agreement under Rate Schedule FT by and between Elkton Gas and Eastern Shore Natural Gas Company, dated as of November 1, 1997 (Contract #010012)	Incorporated by reference to Exhibit 10(xlv) of NUI's Form 10-K Report for Fiscal 1997
10(xlvii)	Service Agreement under Rate Schedule FT by and between Elkton Gas and Eastern Shore Natural Gas Company, dated as of November 1, 1997 (Contract #010013)	Incorporated by reference to Exhibit 10(xlvi) of NUI's Form 10-K Report for Fiscal 1997
10(xlviii)	Service Agreement under Rate Schedule FT by and between Elkton Gas and Eastern Shore Natural Gas Company, dated as of November 1, 1997 (Contract #020003)	Incorporated by reference to Exhibit 10(xlvii) of NUI's Form 10-K Report for Fiscal 1997
10(xlvix)	Service Agreement under Rate Schedule FT by and between Elkton Gas and Eastern Shore Natural Gas Company, dated as of November 1, 1997 (Contract #020005)	Incorporated by reference to Exhibit 10(xlviii) of NUI's Form 10-K Report for Fiscal 1997
10(l)	Service Agreement under Rate Schedule FT by and between Elkton Gas and Eastern Shore Natural Gas Company, dated as of November 1, 1998 (Contract #010032)	Incorporated by reference to Exhibit 10(xlix) of NUI's Form 10-K Report for Fiscal 1997
10(li)	Agreement between T.I.C. Enterprises, L.L.C and United States Postal Service	Incorporated by reference to Exhibit 10(i) of NUI's Form 8-K filed 12/15/99.
10(lii)	Service Agreement under Rate Schedule LNG by and between Transcontinental Gas Pipeline Corporation and NUI Corporation dated as of October 25, 1999 (Contract #2.3339)	Incorporated by reference to Exhibit 10(xx) of NUI's Form 10-K Report for Fiscal 2000
10(liii)	Gas Transportation Agreement under Rate Schedule FT-A by and between Tennessee Gas Pipeline Company and NUI Corporation dated as of October 17, 1999 (Contract #31117)	Incorporated by reference to Exhibit 10(xx) of NUI's Form 10-K Report for Fiscal 2000
10(liv)	Asset Sale Agreement between NUI Corporation and C&T Enterprises, Inc. dated as of October 4, 2000	Incorporated by reference to Exhibit 10(xx) of NUI's Form 10-K Report for Fiscal 2000
10(lv)	Service Agreement under Rate Schedule FT by and between NUI Corporation and Eastern Shore Natural Gas Company, dated as of May 1, 2001 (Contract #010041)	Filed herewith
12	Consolidated Ratio of Earnings to Fixed Charges	Filed herewith
21	Subsidiaries of NUI Corporation	Filed herewith
23	Consent of Independent Public Accountants	Filed herewith

Exhibits listed above which have heretofore been filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934, and which were designated as noted above and have not been amended, are hereby incorporated by reference and made a part hereof with the same effect as if filed herewith.

The Company is a party to various agreements with respect to long-term indebtedness to which the total amount of indebtedness authorized under each agreement, respectively, does not exceed 10% of the total assets of the Company on a consolidated basis. The Company hereby agrees to furnish to the Securities and Exchange Commission copies of such agreements upon request.

(b)     Reports on Form 8-K:

        None

INDEX TO FINANCIAL STATEMENTS AND SCHEDULE

Consolidated Financial Statements of NUI Corporation and Subsidiaries:

	Report of Independent Public Accountants	F-2
	Consolidated Financial Statements as of
	September 30, 2001 and 2000 and for each
	of the Three Years in the Period
	Ended September 30, 2001	F-3
	Unaudited Quarterly Financial Data for
	the Two-Year Period Ended September 30, 2001
	(Note 15 of the Notes to the Company's Consolidated
	Financial Statements)	F-21
Financial Statement Schedule of NUI Corporation and Subsidiaries:
	Report of Independent Public Accountants	F-2
	Schedule II - Valuation and Qualifying Accounts
	for each of the Three Years in the
	Period Ended September 30, 2001	F-22

All other schedules are omitted because they are not required, are inapplicable or the information is otherwise shown in the financial statements or notes thereto.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To NUI Corporation:

We have audited the accompanying consolidated balance sheet and consolidated statement of capitalization of NUI Corporation (a New Jersey corporation) and Subsidiaries as of September 30, 2001 and 2000, and the related consolidated statements of income, cash flows and shareholders' equity, for each of the three years in the period ended September 30, 2001. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of NUI Corporation and Subsidiaries as of September 30, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2001, in conformity with accounting principles generally accepted in the United States.

Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed in Item 14(a)(2) is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not a required part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

New York, New York
November 8, 2001

NUI Corporation and Subsidiaries Consolidated Statement of Income (Dollars in thousands, except per share amounts)
		Years Ended September 30,
		2001	2000	1999
Operating Margins
Operating revenues		$1,134,303	$934,776	$826,194
Less- Purchased gas and fuel		873,609	713,380	621,363
	Cost of sales and services	24,459	14,864	10,385
	Energy taxes	14,111	11,571	12,702
		______	______	______
		222,124	194,961	181,744
		______	______	______
Other Operating Expenses
Operations and maintenance		118,132	96,138	89,763
Depreciation and amortization		29,075	29,508	26,939
Restructuring and other non-recurring items		---	---	(3,954)
Taxes, other than income taxes		7,803	9,039	8,909
		______	______	______
		155,010	134,685	121,657
		______	______	______
Operating Income		67,114	60,276	60,087
		______	______	______
Other Income and Expense, Net
Equity in earnings (losses) of TIC Enterprises, LLC, net		(5,954)	1,309	1,223
Gain on sales of assets		303	2,834	245
Other		1,255	177	115
		______	______	______
		(4,396)	4,320	1,583
		______	______	______
Income before Interest and Taxes		62,718	64,596	61,670
Interest expense		24,005	19,703	19,952
		______	______	______
Income before Income Taxes		38,713	44,893	41,718
Income taxes		16,039	18,146	17,158
		______	______	______
Net Income		$22,674	$26,747	$24,560
		=====	=====	=====
Net Income Per Share of Common Stock		$ 1.70	$ 2.07	$ 1.93
		====	====	====
Dividends Per Share of Common Stock		$ 0.98	$ 0.98	$ 0.98
		====	====	====
Weighted Average Number of Shares   of Common Stock Outstanding		13,355,573	12,928,528	12,715,300
		======	======	======

See the notes to the consolidated financial statements.

NUI Corporation and Subsidiaries Consolidated Balance Sheet (Dollars in thousands)
	September 30,
	2001	2000
ASSETS
Current Assets
Cash and cash equivalents	$3,274	$3,515
Accounts receivable (less allowance for doubtful accounts of  $3,914 in 2001 and $1,544 in 2000)	98,578	108,425
Notes receivable	---	7,000
Fuel inventories, at average cost	56,227	37,177
Unrecovered purchased gas costs	55,041	3,500
Derivative assets	62,422	12,085
Federal income tax receivable	17,077	---
Prepayments and other	54,525	51,275
	_______	______
	347,144	222,977
	_______	______
Property, Plant and Equipment
Property, plant, and equipment, at original cost	943,048	828,359
Accumulated depreciation and amortization	(300,574)	(281,976)
Unamortized plant acquisition adjustments, net	27,987	29,460
	________	_______
	670,461	575,843
	________	_______
Funds for Construction Held by Trustee	12,570	28,706
Investment in TIC Enterprises, LLC	---	26,225
Other Investments	5,095	1,191
Assets Held for Sale	3,470	---
Other Assets
Regulatory assets	61,325	50,615
Goodwill, net of accumulated amortization	48,794	4,239
Deferred assets	21,941	11,061
	________	_______
	132,060	65,915
	________	_______
	$1,170,800	$920,857
	======	=====
CAPITALIZATION AND LIABILITIES
Current Liabilities
Notes payable to banks	$184,610	$96,700
Notes payable	3,000	---
Current portion of long-term debt and capital lease obligations	22,203	1,965
Accounts payable, customer deposits and accrued liabilities	152,089	132,207
Derivative liabilities	19,994	---
Federal income and other taxes	8,189	11,884
	_______	______
	390,085	242,756
	_______	______
Other Liabilities
Capital lease obligations	3,323	4,396
Deferred Federal income taxes	105,628	75,248
Unamortized investment tax credits	4,387	4,825
Environmental remediation reserve	32,559	33,361
Regulatory and other liabilities	36,684	34,355
	________	_______
	182,581	152,185
	________	_______
Capitalization (See accompanying statements)
Common shareholders' equity	289,145	256,969
Preferred stock	---	---
Long-term debt	308,989	268,947
	________	_______
	598,134	525,916
	________	_______
	$1,170,800	$920,857
	======	=====

See the notes to the consolidated financial statements.

NUI Corporation and Subsidiaries Consolidated Statement of Cash Flows (Dollars in thousands)
			Years Ended September 30,
			2001	2000	1999
Operating Activities
Net Income			$22,674	$26,747	$24,560
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		31,380	31,155	28,914
	Deferred Federal income taxes		29,181	5,297	7,454
	Non-cash portion of restructuring and other non-recurring items		---	---	(4,726)
	Amortization of deferred investment tax credits		(438)	(426)	(459)
	Derivative assets and liabilities		(42,830)	(490)	(5,305)
	Other		15,788	4,508	3,237
	Effects of changes in:
		Accounts receivable, net	17,909	(22,011)	(22,383)
		Fuel inventories	(19,050)	(8,604)	6,364
		Accounts payable, deposits and accruals	9,705	22,008	20,865
		Over (under) recovered purchased gas costs	(51,541)	(2,599)	7,160
		Other	(33,565)	(9,353)	(6,725)
			_____	_____	_____
Net cash (used in) provided by operating activities			(20,787)	46,232	58,956
			______	_____	_____
Financing Activities
Proceeds from sales of common stock, net of treasury stock purchased			526	703	340
Dividends to shareholders			(13,128)	(12,671)	(12,443)
Notes receivable from Virginia Gas			(13,000)	(7,000)	---
Proceeds from issuance of long-term debt			60,000	---	39,813
Funds for construction held by trustee, net			17,198	10,666	(24,871)
Principal payments under capital lease obligations			(2,126)	(8,144)	(1,810)
Net short-term (repayments) borrowings			42,488	22,850	(14,015)
			_____	_____	______
Net cash provided by (used for) financing activities			91,958	6,404	(12,986)
			______	______	_______
Investing Activities
Cash expenditures for property, plant and equipment			(59,160)	(48,577)	(47,213)
Acquisitions and other			(12,252)	(2,105)	1,875
			_______	_______	_______
Net cash used in investing activities			(71,412)	(50,682)	(45,338)
			_______	_______	_______
Net Increase (Decrease) in Cash and Cash Equivalents			$(241)	$1,954	$632
			====	====	===
Cash and Cash Equivalents
At beginning of period			$ 3,515	$ 1,561	$ 929
At end of period			$ 3,274	$ 3,515	$ 1,561
Supplemental Disclosures of Cash Flows
Income taxes paid, net			$ 2,333	$ 3,889	$ 7,695
Interest paid			$ 25,764	$ 21,481	$ 20,732

See the notes to the consolidated financial statements.

NUI Corporation and Subsidiaries Consolidated Statement of Capitalization (Dollars in thousands)
	September 30,
	2001	2000
Long-Term Debt
Gas facilities revenue bonds
6.35% due October 1, 2022	$46,500	$46,500
6.40% due October 1, 2024*	20,000	20,000
Variable rate due June 1, 2026*	39,000	39,000
5.70% due June 1, 2032	54,600	54,600
5.25% due November 1, 2033*	40,000	40,000
Medium-term notes
7.125% due August 1, 2002	20,000	20,000
8.35% due February 1, 2005	50,000	50,000
Senior notes
6.60% due August 20, 2006	5,000	---
6.884% due August 20, 2008	15,000	---
6.884% due August 20, 2011	7,000	---
7.29% due August 20, 2011	33,000	---
	______	______
	330,100	270,100
Current portion of long-term debt	(20,000)	---
Unamortized debt discount	(1,111)	(1,153)
	______	______
	308,989	268,947
	______	______
Preferred Stock, 5,000,000 shares authorized; none issued	---	---
Common Shareholders' Equity
Common Stock, no par value; shares authorized: 30,000,000;     shares outstanding: 13,755,038 in 2001 and 12,982,526 in 2000	240,680	215,484
Shares held in treasury: 174,301 in 2001 and 103,158 in 2000	(2,246)	(2,246)
Retained earnings	55,002	45,456
Unearned employee compensation	(4,291)	(1,725)
	______	______
	289,145	256,969
	______	______
Total Capitalization	$598,134	$525,916
	======	======

* The total unexpended portions of the net proceeds from these bonds, amounting to $6.4 million and $21.3 million as of September 30, 2001, and September 30, 2000, respectively, are carried on the Company's consolidated balance sheet as Funds for Construction Held by Trustee, including interest earned thereon, until drawn upon for eligible construction expenditures.

See the notes to the consolidated financial statements.

NUI Corporation and Subsidiaries
Consolidated Statement of Shareholders' Equity
(Dollars in thousands)

	Common Stock				Unearned
	Shares Outstanding	Paid-in Amount	Held in Treasury	Retained Earnings	Employee Compensation	Total
Balance,
September 30, 1998	12,680,398	$207,356	$ (1,932)	$ 19,263	$ (1,695)	$222,992
Common stock issued*	85,352	2,628				2,628
Treasury stock transactions	(15,480)		(379)			(379)
Net income				24,560		24,560
Cash dividends				(12,443)		(12,443)
Unearned compensation					(40)	(40)
	_______	_______	_______	_______	_______	_______
Balance,
September 30, 1999	12,750,270	$209,984	$ (2,311)	$ 31,380	$ (1,735)	$237,318
Common stock issued
-Purchase of NUI Telecom	113,200	2,800				2,800
-Employee benefit plans*	99,995	2,700				2,700
Treasury stock transactions	19,061		65			65
Net income				26,747		26,747
Cash dividends				(12,671)		(12,671)
Unearned compensation					10	10
	_______	_______	_______	_______	_______	_______
Balance,
September 30, 2000	12,982,526	$215,484	$ (2,246)	$ 45,456	$ (1,725)	$256,969
Common stock issued
-Purchase of Virginia Gas	792,600	22,020				22,020
-Employee benefit plans*	51,055	3,176				3,176
Treasury stock transactions	(71,143)					---
Net income				22,674		22,674
Cash dividends				(13,128)		(13,128)
Unearned compensation					(2,566)	(2,566)
	_______	_______	_______	_______	_______	_______
Balance,
September 30, 2001	13,755,038	$240,680	$ (2,246)	$ 55,002	$ (4,291)	$289,145
	======	====	====	=====	=====	=====

* Represents common stock issued in connection with NUI Direct and various employee benefit plans.

See the notes to the consolidated financial statements.

NUI Corporation and Subsidiaries
Notes to the Consolidated Financial Statements

1.  Summary of Significant Accounting Policies

Principles of Consolidation. The consolidated financial statements include all operating divisions and subsidiaries of NUI Corporation (collectively referred to as NUI or the Company). NUI is engaged in the sale and distribution of natural gas, energy commodity trading and marketing, sales outsourcing and telecommunications. NUI's local distribution companies serve more than 380,000 customers in seven states along the eastern seaboard of the United States and comprise Elizabethtown Gas Company (New Jersey), City Gas Company of Florida, North Carolina Gas, Elkton Gas (Maryland), Valley Cities Gas (Pennsylvania), Waverly Gas (New York) and Virginia Gas (see Note 3). Virginia Gas is also engaged in other activities, such as pipeline operation; natural gas storage; gathering, marketing and distribution services; natural gas exploration, production and well operation; and propane distribution. The Company's non-regulated businesses include NUI Energy, Inc. (NUI Energy), an energy retailer; NUI Ener gy Brokers, Inc. (NUI Energy Brokers), an energy wholesaler; NUI Energy Solutions, Inc., an energy project development and consulting entity; NUI Environmental Group, Inc., an environmental project development subsidiary; Utility Business Services, Inc., (UBS), a digital mapping and customer information systems and services subsidiary; NUI Telecom, Inc. (NUI Telecom), a telecommunications services subsidiary (see Note 2); and TIC Enterprises, LLC (TIC), a sales outsourcing subsidiary (see Note 4). All intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Certain reclassifications have been made to the prior year financial statements to conform with the current year presentation.

Regulation. NUI is a Holding Company and is exempt from registration under the Public Utility Holding Company Act of 1935. NUI's wholly owned subsidiary, NUI Utilities, Inc. is subject to regulation as an operating utility by the public utility commissions of the states in which it operates. Certain subsidiaries of NUI Virginia Gas are regulated by the Virginia State Corporation Commission.

Property, Plant and Equipment. Property, plant and equipment includes both utility plant and non-regulated assets. Utility plant is stated at its original cost. Depreciation is provided on a straight-line basis over the remaining estimated lives of depreciable property by applying rates as approved by the state commissions. The composite average annual depreciation rate was 3 percent in each of fiscal years 2001, 2000 and 1999. At the time properties are retired, the original cost plus the cost of retirement, less salvage, is charged to accumulated depreciation. Repairs of all utility plant and replacements and renewals of minor items of property are charged to maintenance expense as incurred. Non-regulated equipment consists primarily of technology assets and furniture and fixtures. Assets are recorded at original cost and are depreciated on a straight-line basis over a period ranging from 3-10 years.

The net unamortized plant acquisition adjustments represent the remaining portion of the excess of the purchase price over the book value of utility net assets acquired. The excess is being amortized on a straight-line basis over 30 years from the date of acquisition. The results of operations of acquired entities have been included in the accompanying consolidated financial statements for the periods subsequent to their acquisition.

Operating Revenues and Purchased Gas and Fuel Costs. Operating revenues include accrued unbilled revenues through the end of each accounting period. Operating revenues also reflect adjustments attributable to weather normalization clauses that are accrued during the winter heating season and billed or credited to customers in the following year.

Costs of purchased gas and fuel for the Company's regulated utilities are recognized as expenses in accordance with the purchased gas adjustment clause applicable in each state. Such clauses provide for periodic reconciliations of actual recoverable gas costs and the estimated amounts that have been billed to customers. Under- or over-recoveries are deferred when they arise and are recovered from or refunded to customers in subsequent periods.

The Company's subsidiaries, NUI Energy Brokers and NUI Energy, mark-to-market through the income statement all trading positions, including forward sales and purchase commitments. (See Note 9 for a further description of the Company's use of derivative financial instruments.)

Environmental Reserve. The Company, with the aid of environmental consultants, regularly assesses the potential future costs associated with conducting investigative activities at each of the Company's sites and implementing appropriate remedial actions, as well as the likelihood of whether such actions will be necessary. The Company records a reserve if it is probable that a liability will be incurred and the amount of the liability can be reasonably estimated.

Stock Compensation. The Company follows the accounting prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", and related interpretations in accounting for its employee stock-based compensation. The Company has elected to adopt the disclosure-only provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based Compensation" (SFAS 123), which requires proforma disclosure of the effect of adopting the accounting under SFAS 123. If the Company had adopted SFAS 123, there would not have been a material effect on the results of operations or financial position.

Income Taxes. The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes", which requires the liability method to be used to account for deferred income taxes. Under this method, deferred income taxes related to tax and accounting basis differences are recognized at the statutory income tax rates in effect when the tax is expected to be paid.

Investment tax credits, which were generated principally in connection with additions to utility plant made prior to January 1, 1986, are being amortized over the estimated service lives of the properties that gave rise to the credits.

Regulatory Assets and Liabilities. The Company's utility operations follow the accounting for regulated enterprises prescribed by Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation" (SFAS 71). In general, SFAS 71 requires deferral of certain costs and obligations, based upon orders received from regulators, to be recovered from or refunded to customers in future periods. The following represents the Company's regulatory assets and liabilities deferred in the accompanying consolidated balance sheet as of September 30, 2001 and 2000 (in thousands):

	2001	2000
Regulatory Assets
Environmental investigation and remediation costs	$35,107	$35,617
Post-retirement and other employee benefits	8,054	8,756
Deferred piping allowances	996	1,334
Utility hedging derivatives	12,487	---
Other	4,616	4,069
Under-recovered gas costs	65	839
	______	______
	$61,325	$50,615
	====	====
Regulatory Liabilities
Net over-collection of income taxes	$4,864	$5,118
Refunds to customers	2,195	2,021
Market development fund	1,988	---
Other	22	228
	_____	_____
	$9,069	$7,367
	====	====

Substantially all of these regulatory assets and liabilities have been authorized by state regulators to be recovered in rates. Environmental investigation remediation costs are recovered through a Remediation Adjustment Clause (see Note 13) and includes the carrying costs on unrecovered amounts not currently in rates. In the event that the provisions of SFAS 71 were no longer applicable, the Company would recognize a write-off of net regulatory assets (regulatory assets less regulatory liabilities) that would result in a charge to net income, which would be classified as an extraordinary item. However, although the gas distribution industry is becoming increasingly competitive, the Company's utility operations continue to recover their costs through cost-based rates established by the public utility commissions. As a result, the Company believes that the accounting prescribed under SFAS 71 remains appropriate.

Cash Equivalents. Cash equivalents consist of a money market account which invests in securities with original maturities of three months or less.

Notes Payable. Under terms of an LLC Interest Purchase Agreement dated May 8, 2001, notes payable represents amounts owed to the former 51 percent owner of TIC Enterprises, LLC under a convertible subordinated unsecured promissory note issued in conjunction with the Company's acquisition of the remaining equity interest of TIC on May 15, 2001. The note and accrued interest is payable on its maturity date of January 2, 2002, and bears interest at 7 percent per annum. Should the note not be paid at the maturity date, the former owner of TIC has the option to convert the Note into limited liability membership units representing 100 percent of the fully diluted equity of TIC (the Conversion Option). Should the former owner of TIC exercise the Conversion Option, in exchange for the 100 percent ownership of TIC, the former owner would have to pay NUI $5 million and up to an additional $5 million for funds provided by NUI to TIC during its ownership.

Goodwill. The excess of the cost over the net assets of acquired businesses is recorded as goodwill. Goodwill is amortized on a straight-line basis over its estimated useful life, ranging from 20 to 30 years. The Company has goodwill of $48.8 million, net of accumulated amortization of $1.1 million, at September 30, 2001. Goodwill is reviewed for recoverability periodically or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable (see Note 13- "TIC Enterprises"). The Company recorded amortization of goodwill of $893,000 and $186,000 for the years ended September 30, 2001 and 2000, respectively. Prior to completing the acquisition of the remaining 51 percent interest in TIC on May 15, 2001, the Company recorded goodwill amortization of $659,000 and $879,000 for the fiscal years 2001 and 2000, respectively, under the equity method of accounting as a reduction of its original 49 percent Investment in TIC.

Net Income Per Share of Common Stock. Net income per share of common stock is based on the weighted average number of shares of NUI common stock outstanding. The Company follows the provisions of Statement of Financial Accounting Standards No. 128, "Earnings per Share," which requires computing and presenting basic and diluted earnings per share. At September 30, 2001, the Company has approximately 49,000 shares of common stock equivalents related to the purchase of NUI Telecom (see Note 2), which do not have a dilutive effect on earnings per share.

New Accounting Standards. During fiscal 2001, the Company adopted Statement of Financial Accounting Standards, No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133). SFAS 133 was issued in June 1998 and establishes accounting and reporting standards regarding derivative instruments. SFAS 133 requires that all derivative instruments be recorded on the balance sheet at their fair value as either an asset or liability, and that changes in the fair value be recognized currently in earnings unless certain criteria are met. The adoption of SFAS 133 did not have a material impact on the Company's financial position or net income.

The Company will adopt Statement of Financial Accounting Standards No. 141, "Business Combinations" (SFAS 141) and Statement of Financial Accounting Standards No. 142, "Goodwill and Intangible Assets" (SFAS 142) in fiscal 2002. These statements were issued in July 2001 and, when implemented, no longer require that companies amortize goodwill; however an annual assessment is required to determine if the carrying value of goodwill has been impaired. In general, under SFAS 142, acquired intangible assets are to be separately recognized if the intangible asset arises from contractual or other legal rights, or if the intangible asset can be sold, transferred, licensed, rented, or exchanged, regardless of the company's intent do to so. The value of these intangibles will continue to be amortized over their estimated useful lives. As noted, the Company expects to implement these statements at the beginning of its next fiscal year, October 1, 2001, and will perform a fair market valuation on the carrying value of the Company's goodwill. The results of this analysis are not complete at this time, however, such analysis may result in an impairment charge that could be material to the results of operations and financial condition.

In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" (SFAS 143). This statement establishes accounting standards for recognition and measurement of liabilities for asset retirement obligations and the associated asset retirement costs. The Company will implement this statement at the beginning of fiscal 2003, October 1, 2002, and does not expect the adoption of this statement to have a material impact on its financial position or net income.

2.  Purchase of NUI Telecom

On November 12, 1999, the Company closed on its acquisition of International Telephone Group, Inc. (ITG). The acquisition was treated as a merger whereby ITG merged with and into a subsidiary of the Company. ITG subsequently changed its name to NUI Telecom, Inc. The purchase price totaled $5.8 million and included the issuance of 113,200 shares of NUI common stock, with the remainder paid in cash. NUI Telecom is a full service telephone company that provides its customers with a single service solution for all their telecommunication requirements including local, long distance, cellular, internet, and data communications services. The Agreement and Plan of Merger contains a provision whereby the previous shareholders of NUI Telecom will receive an additional $1.0 million in NUI common stock if NUI Telecom achieves certain earnings targets no later than December 31, 2003. As of September 30, 2001, these earnings targets have been achieved. An additional 47,136 shares will be issued to th ese former shareholders by December 29, 2001.

The acquisition was accounted for as a purchase. The excess of the purchase price over the fair value of the net assets of NUI Telecom was approximately $5.5 million, which includes the additional earnings contingency noted above, and is being amortized on a straight-line basis over a 20-year period.

3.  Purchase of Virginia Gas Company

On March 28, 2001, the Company completed its acquisition of Virginia Gas Company (VGC). The acquisition was treated as a merger whereby VGC became a wholly-owned subsidiary of NUI. The purchase price totaled $29 million and included the issuance of 792,600 shares of NUI common stock, with the remainder paid in cash. VGC is a natural gas storage, pipeline, and propane and natural gas distribution company, which operates in a region of the nation that has a rapidly growing demand for natural gas and power generation. It owns one natural gas facility with fast-injection, fast-withdrawal capabilities and had a 50 percent ownership of a second storage facility. On October 4, 2001, the Company acquired the remaining interest in this storage facility as well as the remaining 50 percent ownership of a distribution company that it did not previously own (see Note 14- Subsequent Events).

The acquisition was accounted for as a purchase. The excess of the purchase price over the fair value of the net assets of VGC is estimated to be approximately $5.6 million and will be amortized on a straight-line basis over a 30-year period. In conjunction with the acquisition, the Company had identified two operations of Virginia Gas that will be held for sale. Accordingly, the net assets of Virginia Gas' Propane (VG Propane) and Marketing operations, as well as VGC's 50 percent equity interest in a distribution company have been segregated and classified as "Assets Held for Sale" on the Consolidated Balance Sheet at September 30, 2001. On October 11, 2001, the Company sold VG Propane (see Note 14- Subsequent Events).

4.  Purchase of TIC Enterprises, LLC

On May 15, 2001, the Company acquired the remaining 51 percent interest of TIC Enterprises, LLC (TIC) it did not previously own. The amount paid to the majority owner totaled $8 million, which was paid in cash and a note payable (see Note 1) and assumed the outstanding debt of TIC. TIC is a sales outsourcing firm located in Roswell, GA. TIC has exclusive contracts with the United States Postal Service (USPS), and various telecommunications equipment and service providers that enable TIC to provide a broad range of telephony and data products and services to its customers.

The acquisition was accounted for as a purchase. The total excess of the purchase price over the fair value of the net assets related to NUI's 100 percent acquisition is estimated to be approximately $38.8 million and will be amortized on a straight-line basis over a 25-year period.

5.  Restructuring and Other Non-Recurring Items

In 1998, the Company commenced a reorganization effort that included early retirement programs for both non-bargaining and bargaining unit employees, as well as other workforce reductions. The reorganization efforts resulted in accounting charges and gains that were incurred in both fiscal 1999 and 1998. In fiscal 1999, the Company recognized approximately $4.0 million of pre-tax, non-recurring gains primarily relating to these reorganization efforts.

In June 1998, the Company offered an early retirement program to its non-bargaining unit personnel. The program was accepted by 74 of the eligible 77 employees. In accordance with Statement of Financial Accounting Standards No. 88, "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits" (SFAS 88), the Company recorded a special termination charge of approximately $7.3 million during fiscal 1998 when the cost was recognizable. In March 1999, the Company recorded a settlement gain of approximately $6.8 million as a result of satisfaction of all future liabilities associated with these employees.

In January 1999, the Company offered an early retirement program to its bargaining unit employees in New Jersey. The program was accepted by 32 of the eligible 35 employees. In accordance with SFAS 88, the Company recorded a special termination charge of approximately $1.8 million in the second quarter of fiscal 1999 associated with these retirements. In June 1999, the Company recorded a settlement gain of approximately $3.2 million as the result of satisfaction of all future liabilities associated with these employees. Also in June 1999, the Company recorded an additional $0.6 million of other benefit expenses associated with these employees.

In fiscal 1999, the Company also recorded approximately $1.8 million of charges relating to the write-off of certain regulatory assets which will not be recovered through rates, as well as $1.8 million of charges relating to other items which were deemed to be separate from recurring earnings.

6.  Capitalization

Long-Term Debt. On August 20, 2001, the Company issued $60 million of Senior notes with interest rates ranging from 6.60 percent to 7.29 percent. The proceeds were used to repay short-term indebtedness, which was used in part to acquire NUI Virginia Gas and TIC.

The Company deposits in trust the unexpended portion of the net proceeds from its Gas Facilities Revenue Bonds until drawn upon for eligible expenditures. As of September 30, 2001, and September 30, 2000, the total unexpended portions of all of the Company's Gas Facilities Revenue Bonds were $6.4 million and $21.3 million, respectively, and are classified on the Company's consolidated balance sheet, including interest earned thereon, as funds for construction held by trustee.

The Company is scheduled to repay $20 million of Medium-Term Notes in August 2002. This amount has been included in current liabilities as of September 30, 2001.

Preferred Stock. The Company has 5,000,000 shares of authorized but unissued preferred stock. Shares of Series A Junior Participating Preferred Stock have been reserved for possible future issuance in connection with the Company's Shareholder Rights Plan, described below.

Shareholder Rights Plan. In November 1995, the Company's Board of Directors adopted a Shareholder Rights Plan (the 1995 Plan) under which shareholders of NUI common stock were issued as a dividend one right to buy one one-hundredth of a share of Series A Junior Participating Preferred Stock at a purchase price of $50 (Right) for each share of common stock held. The Rights initially attached to the shares of NUI common stock and could have been exercised or transferred only if a person or group (an Acquirer), with certain exceptions, acquired, or commenced a tender offer to acquire beneficial ownership of 15 percent or more of NUI common stock. Each Right, except those held by the Acquirer, may have been used by the non-acquiring shareholders to purchase, at the Right's exercise price, shares of NUI common stock having a market value equivalent to twice the Right's exercise price, thus substantially reducing the Acquirer's ownership percentage.

Under the 1995 Plan, the Company could have redeemed the Rights at $0.001 per Right at any time prior to the occurrence of any such event. All Rights under the 1995 Plan expired on November 27, 2005. The Shareholder Rights Plan was amended so that it was not triggered by the restructuring of the Company as a holding company. On March 1, 2001, upon restructuring as a holding company, NUI adopted a new Shareholder Rights Plan (the 2001 Plan) similar to the 1995 Plan except that all rights now expire on March 2, 2011.

Common Stock. The Company periodically issues shares of common stock in connection with NUI Direct, the Company's dividend reinvestment and stock purchase plan, and various employee benefit plans. Effective May 26, 1998, several of these plans commenced purchasing shares on the open market to fulfill their requirements. Under the terms of these plans, the Company may periodically change the method of purchasing shares from open market purchases to purchases directly from the Company, or vice versa.

At September 30, 2001, shares reserved for issuance under the Company's common stock plans were: NUI Direct, 53,149; Savings and Investment Plan, 121,966; 1996 Stock Option and Stock Award Plan, 201,211; 1996 Employee Stock Purchase Plan, 85,954; and the 1996 Director Stock Purchase Plan, 43,168.

Stock Plans. The Company's Board of Directors believes that the interests of both directors and management should be closely aligned with those of shareholders. As a result, under the 1996 Stock Option and Stock Award Plan, and the 1996 Director Stock Purchase Plan, the Company has a long-term compensation program for directors, executive officers and key employees involving shares of NUI common stock.

Restricted shares of stock granted as long-term compensation for executive officers and key employees amounted to 91,350 in fiscal 2001, 82,750 in fiscal 2000 and 75,900 in fiscal 1999. As of September 30, 2001, a total of 209,338 shares of restricted stock that have been granted as long-term compensation are subject to future vesting requirements, and are restricted from resale.

Dividend Restrictions. The Company's long-term debt agreements include, among other things, restrictions as to the payment of cash dividends. Under the most restrictive of these provisions, the Company was permitted to pay approximately $76.8 million of cash dividends at September 30, 2001.

7.  Notes Payable to Banks

At September 30, 2001, the Company's outstanding notes payable to banks were $184.6 million with a combined weighted average interest rate of 3.6 percent. Unused lines of credit at September 30, 2001, were approximately $8.9 million.

The weighted average daily amounts outstanding of notes payable to banks and the weighted average interest rates on those amounts were $161.2 million at 6.2 percent in fiscal 2001, $75.3 million at 6.7 percent in fiscal 2000 and $68.2 million at 5.3 percent in fiscal 1999.

8.  Leases

Property, plant and equipment held under capital leases amounted to $25.1 million at September 30, 2001, and $26.8 million at September 30, 2000, with related accumulated amortization of $17.2 million and $17.3 million, respectively. These properties consist principally of leasehold improvements and office furniture and fixtures. A summary of future minimum payments for properties held under capital leases follows (in thousands):

2002	$2,551
2003	1,652
2004	1,469
2005	809
2006	166
	_____
Total future minimum payments	6,647
Amount representing interest	(1,121)
Current portion of capital lease obligations	(2,203)
	_____
Capital lease obligations	$3,323
	====

The Company has entered into non-cancelable operating leases which principally relate to office space and technology assets used in its operations. The future minimum lease payments as of September 30, 2001 are as follows:

2002	$7,205
2003	6,709
2004	5,705
2005	5,311
2006	5,455
Thereafter	66,124
	______
Total	$96,509
	====

Rents charged to operations expense were $9.9 million in fiscal 2001, $6.9 million in fiscal 2000, and $5.7 million in fiscal 1999.

The Company has entered into subleases for a portion of the office space noted above. Amounts received from subleases were $2.6 million in fiscal 2001, $1.7 million in fiscal 2000, and $0.6 million in fiscal 1999.

9.  Financial Instruments and Derivatives

Derivatives. The Company's wholesale trading subsidiary, NUI Energy Brokers, utilizes financial instruments to provide competitive energy supplies and enhance the Company's profitability. The Company engages in derivative activities for both trading and non-trading purposes. Instruments utilized in connection with trading activities are accounted for using the mark-to-market method. Under the mark-to-market method of accounting, forwards, futures, swaps, options and other instruments with third parties are reflected at fair value and are shown as "Derivative Assets and Liabilities" in the consolidated balance sheet. Changes in the assets and liabilities from derivative activities result primarily from changes in the valuation of the portfolio of contracts, newly originated transactions and the timing of settlement relative to the receipt of cash for certain contracts.

The Company's utility divisions utilize certain derivatives for non-trading purposes to hedge the impact of market fluctuations on assets, liabilities and other contractual commitments. Pursuant to SFAS 133, such derivative products are marked-to-market each reporting period. Pursuant to regulatory requirements, gains and losses related to such derivatives are reflected in purchased gas costs and included in billings to customers. Consequently, unrealized gains and losses are reflected as regulated assets or liabilities as appropriate.

NUI Energy Brokers accounts for its trading activities by marking-to-market all trading positions and calculating its value-at-risk on a daily basis. The values used for these calculations include New York Mercantile Exchange (NYMEX) settlement prices, established pricing models, and quoted market volatilities. The Company manages their open positions within the guidelines of a Risk Management Policy that limits its exposure to market risks and requires that among other things, any breach of policy be reported to senior management.

Realized and unrealized gains and losses are recorded in the consolidated statement of income under purchased gas and fuel. At September 30, 2001, NUI Energy Brokers had purchased and sold futures contracts totaling 40.0 Bcf of natural gas at prices ranging from $2.200 to $6.250 per Mcf, which include derivatives for the utility divisions. None of these contracts extend beyond December 2003. The Company's option positions consisted of 1,549 puts and calls at varying strike prices, none of which extend beyond March 2002. NUI Energy Brokers' mark-to-market value of their swap positions at year-end was approximately $600,000. The swap transactions have terms that extend through October 2002. Additionally, NUI Energy Brokers had forward purchase and sale commitments extending through December 2005. At September 30, 2001, NUI Energy Brokers' forward transactions had an unrealized mark-to-market value of approximately $19.4 million.

Net realized and unrealized gains on derivative trading for fiscal 2001 totaled $19.4 million, compared to $11.7 million in 2000, and has been included in income.

The cash flow impact of financial instruments is reflected as cash flows from operating activities in the consolidated statement of cash flows.

The Company is exposed to credit risk in the event of default or non-performance by one of its trading partners. The Company adheres to credit policies that management believes minimize overall credit risk.

Other Financial Instruments. The fair value of the Company's cash equivalents, funds for construction held by trustee and notes payable to banks are approximately equivalent to their carrying value. The carrying value of the Company's long-term debt exceeded its fair value by approximately $7.9 million and $4.1 million as of September 30, 2001 and 2000, respectively. The fair value of long-term debt was estimated based on quoted market prices for the same or similar issues.

10.  Consolidated Taxes

The provision for Federal and State income taxes was comprised of the following (in thousands):

	2001	2000	1999
Currently payable (receivable) -
Federal	$(16,709)	$8,865	$5,759
State	3,898	3,465	4,265
Deferred -
Federal	29,181	5,297	7,454
State	107	945	139
Amortization of investment tax credits	(438)	(426)	(459)
	______	______	______
Total provision for income taxes	$16,039	$18,146	$17,158
	====	====	====

The components of the Company's net deferred Federal tax liability (asset) as of September 30, 2001 and 2000 are as follows (in thousands):

	2001	2000
Depreciation and other utility plant differences	$61,733	$60,482
Plant acquisition adjustments	9,383	9,130
Alternative minimum tax credit	---	(1,494)
Unamortized investment tax credit	(1,809)	(1,972)
Deferred charges and regulatory assets	2,802	2,860
Unrecovered gas costs	19,507	1,389
Pension	10,694	9,012
Unrealized gains and losses	5,947	1,163
Other	(2,629)	(5,322)
	_______	______
	$105,628	$75,248
	=====	====

The alternative minimum tax credit can be carried forward indefinitely to reduce the Company's future tax liability.

The Company's effective income tax rates differ from the statutory Federal income tax rates due to the following (in thousands):

	2001	2000	1999
Pre-tax income	$38,713	$44,893	$41,718
Federal income taxes computed at Federal statutory tax rate of 35 percent	13,550	15,713	14,601
Increase (reduction) resulting from:
Excess of book over tax depreciation	321	341	341
Amortization of investment tax credits	(438)	(426)	(459)
Federal benefit of state tax provision	(1,402)	(1,544)	(1,541)
Other, net	3	(348)	(188)
	______	______	______
Total provision for Federal income taxes	12,034	13,736	12,754
Provision for State income taxes	4,005	4,410	4,404
	______	______	______
Total provision for income taxes	$16,039	$18,146	$17,158
	=====	=====	=====

11.  Retirement Benefits

Pension Benefits. The Company has non-contributory defined benefit retirement plans which cover all of its employees other than the City Gas of Florida union employees who participate in a union-sponsored multi-employer plan. The Company funds its plans in accordance with the requirements of the Employee Retirement Income Security Act of 1974 and makes contributions to the union sponsored plan in accordance with its contractual obligations. Benefits paid under the Company's plans are based on years of service and levels of compensation. The Company's actuarial calculation of pension expense is based on the projected unit cost method.

The changes in the pension benefit obligation for the Company's plans were as follows (in thousands):

	2001	2000
Benefit obligation at beginning of year	$81,303	$80,845
Service cost	2,213	1,991
Interest cost	6,614	6,029
Actuarial (gain) loss	10,325	(1,677)
Benefits paid	(5,845)	(5,885)
	______	______
Benefit obligation at end of year	$94,610	$81,303
	=====	=====

The change in the Company's plan assets were as follows (in thousands):

	2001	2000
Fair value of plan assets at beginning of year	$131,256	$123,546
Actual return on plan assets	(13,817)	13,611
Estimated expenses	(16)	(16)
Benefits paid	(5,845)	(5,885)
	_______	_______
Fair value of plan assets at end of year	$111,578	$131,256
	=====	====

The reconciliation of the funded status of the Company's funded plans as of September 30, 2001 and 2000 was as follows (in thousands):

	2001	2000
Funded status	$94,610	$81,303
Market value of plan assets	111,578	131,256
	______	______
Plan assets in excess of projected benefit obligation	16,968	49,953
Unrecognized net (gain) loss	8,619	(28,711)
Unrecognized prior service cost	2,540	3,018
Unrecognized net transition asset	(10)	(488)
	______	______
Pension prepayment	$28,117	$23,772
	====	====

The projected benefit obligation was calculated using a discount rate of 7.25 percent in fiscal 2001 and 7.75 percent in fiscal 2000, and an assumed annual increase in compensation levels of 4 percent in fiscals 2001 and 2000. The expected long-term rate of return on assets was calculated at 9.75 percent in both fiscal 2001 and fiscal 2000. The assets of the Company's funded plans are invested primarily in publicly traded fixed income and equity securities.

The components of pension expense for the Company's plans were as follows (in thousands):

	2001	2000	1999
Service cost	$2,213	$1,991	$2,446
Interest cost	6,614	6,029	6,281
Estimated expenses	16	16	---
Return on plan assets	(12,504)	(12,351)	(13,048)
Net amortization and deferral	(684)	(1,469)	(1,069)
Special termination benefits	---	---	1,799
Settlement gain	---	---	(10,051)
	______	______	_______
Pension credit	$(4,345)	$(5,784)	$(13,642)
	=====	=====	=====

Certain key employees also participate in an unfunded supplemental retirement plan. The projected benefit obligation under this plan was $6.4 million as of September 30, 2001, $4.9 million as of September 30, 2000, and $6.5 million as of September 30, 1999, and the expense for this plan was approximately $0.9 million in fiscal 2001, $0.6 million in fiscal 2000 and $0.7 million in fiscal 1999.

Post-retirement Benefits Other Than Pensions. The Company provides certain health care benefits to all retirees receiving benefits under a Company pension plan other than the City Gas Company of Florida plan, who reach retirement age while working for the Company.

The Company accounts for these plans under Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Post-retirement Benefits Other Than Pensions" (SFAS 106), which, among other things, requires companies to accrue the expected cost of providing other postretirement benefits to employees and their beneficiaries during the years that eligible employees render the necessary service. The Company currently funds these future benefits through a Voluntary Employees Beneficiary Association.

Effective July 1, 2000, the Company no longer offers post-retirement benefits other than pensions for any new hires. In addition, the Company has capped its share of costs at $500 per participant, per month for retirees under age 65, and at $150 per participant, per month for retirees over age 65.

The changes in the post-retirement benefit obligation for the Company's plans were as follows (in thousands):

	2001	2000
Benefit obligation at beginning of year	$21,265	$29,247
Service cost	224	770
Interest cost	1,476	2,062
Actuarial gain	(309)	(395)
Plan amendments	(1,082)	(9,078)
Benefits paid	(1,292)	(1,356)
Other	270	15
	______	______
Benefit obligation at end of year	$20,552	$21,265
	====	====

The changes in the Company's plan assets were as follows (in thousands):

	2001	2000
Fair value of plan assets at beginning of year	$1,619	$1,500
Actual return on plan assets	81	119
Employer contributions	1,022	1,341
Plan participants' contributions	270	15
Benefits paid	(1,292)	(1,356)
	_____	_____
Fair value of plan assets at end of year	$1,700	$1,619
	====	====

The reconciliation of the funded status of the Company's post-retirement plans other than pensions as of September 30, 2001 and 2000, was as follows (in thousands):

	2001	2000
Funded status	$18,852	$19,646
Unrecognized transition obligation	---	(23)
Unrecognized prior service cost	970	---
Unrecognized net gain	(2,810)	(3,125)
	______	______
Accrued post-retirement benefit obligation	$17,012	$16,498
	====	====

The components of post-retirement benefit expense other than pensions were as follows (in thousands):

	2001	2000	1999
Service cost	$224	$770	$1,242
Interest cost	1,476	2,062	2,089
Amortization of transition obligation	---	516	730
Other	(164)	(72)	217
	_____	_____	_____
Net post-retirement expense	$1,536	$3,276	$4,278
	====	====	====

The health care trend rate assumption is 8.10 percent in 2001 gradually decreasing to 5 percent for the year 2005 and later. The discount rate used to compute the accumulated post-retirement benefit obligation was 7.25 percent in fiscal 2001 and 7.75 percent in fiscal 2000. An increase in the health care trend rate assumption by one percentage point in all years would increase the accumulated post-retirement benefit obligation by approximately $6.4 million and the aggregate annual service and interest costs by approximately $0.9 million

The Company continually evaluates alternative ways to manage these benefits and control its costs. Any changes in the plan or revisions to assumptions that affect the amount of expected future benefit may have a significant effect on the amount of the reported obligation and expense.

12.  Business Segment Information

The Company's operations are organized and managed by three primary segments: Distribution Services, Wholesale Energy Marketing and Trading (formerly Energy Sales and Services) and Retail and Business Services (formerly Customer Services). The Distribution Services segment distributes natural gas in six states through the Company's regulated utility divisions. The Energy Marketing and Trading segment reflects the operations of the Company's NUI Energy Brokers and NUI Virginia Gas subsidiaries, as well as off-system sales made by NUI Energy Brokers on behalf of the utility divisions. The Retail and Business Services segment reflects the operations of the Company's NUI Energy, UBS, NUI Telecom and TIC subsidiaries, as well as appliance leasing, repair and maintenance operations. The Company also has corporate operations that do not generate any revenues.

The following table provides information concerning the major segments of the Company for each of the three fiscal years ended September 30, 2001, 2000 and 1999. Revenues and operating margins include intersegment sales to affiliated entities, which are eliminated in consolidation. Identifiable assets include only those attributable to the operations of each segment. All of the Company's operations are in the United States. Certain reclassifications have been made to prior year segment data to conform with the current year's presentation.

(Dollars in thousands)	2001	2000	1999
Revenues:
Distribution Services	$524,189	$409,950	$379,670
Wholesale Energy Marketing & Trading	598,592	501,906	462,415
Retail & Business Services	178,153	81,688	15,925
ntersegment Revenues	(166,631)	(58,768)	(31,816)
	_________	_______	_______
Total Revenues	$1,134,303	$934,776	$826,194
	======	=====	=====
Operating Margins:
Distribution Services	$174,557	$170,394	$163,250
Wholesale Energy Marketing & Trading	22,605	14,366	13,319
Retail & Business Services	24,962	10,201	5,175
	_______	_______	_______
Total Operating Margins	$222,124	$194,961	$181,744
	=====	=====	=====
Pre-Tax Operating Income:
Distribution Services	$55,294	$52,352	$52,740
Wholesale Energy Marketing & Trading	14,151	9,004	6,585
Retail & Business Services	(148)	(278)	(1,785)
	______	______	______
Total Pre-Tax Operating Income	$69,297	$61,078	$57,540
	====	====	====
Depreciation & Amortization:
Distribution Services	$24,524	$24,106	$22,577
Wholesale Energy Marketing & Trading	693	68	238
Retail & Business Services	3,849	2,503	2,140
	______	______	______
Total Depreciation & Amortization	$29,066	$26,677	$24,955
	====	====	====
Identifiable Assets:
Distribution Services	$826,355	$750,196	$710,743
Wholesale Energy Trading & Marketing	138,693	65,343	70,220
Retail & Business Services	117,557	36,716	14,976
	________	_______	_______
Total Identifiable Assets	$1,082,605	$852,255	$795,939
	======	=====	=====

Capital Expenditures:
Distribution Services	$42,045	$44,473	$39,471
Wholesale Energy Marketing & Trading	8,020	6	37
Retail & Business Services	3,955	4,936	2,898
	______	______	______
Total Capital Expenditures	$54,020	$49,415	$42,406
	=====	=====	=====

A reconciliation of the Company's segment pre-tax operating income, depreciation and amortization, identifiable assets and capital expenditures to amounts reported on the consolidated financial statements is as follows:

(Dollars in thousands)	2001	2000	1999
Segment Pre-Tax Operating Income	$69,297	$61,078	$57,540
Non-segment pre-tax operating (loss) income	(2,183)	(802)	(1,407)
Non-recurring items	---	---	3,954
	______	______	______
Operating income	$67,114	$60,276	$60,087
	====	====	====
Segment Depreciation & Amortization	$29,066	$26,677	$24,955
Non-segment depreciation & amortization	9	2,831	1,984
	______	______	______
Depreciation & Amortization	$29,075	$29,508	$26,939
	====	====	====
Segment Identifiable Assets	$1,082,605	$852,255	$795,939
Non-segment identifiable assets	88,195	68,602	48,287
	________	______	______
Total Assets	$1,170,800	$920,857	$844,226
	======	=====	=====
Segment Capital Expenditures	$54,020	$49,415	$42,406
Non-segment capital expenditures	6,521	3,331	5,523
	______	______	______
Total Capital Expenditures	$60,541	$52,746	$47,929
	====	====	====

13.  Commitments and Contingencies

Commitments. Capital expenditures are expected to be approximately $61 million in fiscal 2002.

Environmental Matters. The Company is subject to federal and state laws with respect to water, air quality, solid waste disposal and employee health and safety matters, and to environmental regulations issued by the United States Environmental Protection Agency (EPA), the New Jersey Department of Environmental Protection (NJDEP) and other federal and state agencies.

The Company owns, or previously owned, certain properties on which manufactured gas plants (MGP) were operated by the Company or by other parties in the past. In New Jersey, the Company has reported the presence of the six MGP sites to the EPA, the NJDEP and the New Jersey Board of Public Utilities (NJBPU) and is currently conducting remedial activities at all six sites with oversight from the NJDEP. The Company also owns, or previously owned, 10 former MGP facilities located in the states of North Carolina, South Carolina, Pennsylvania, New York and Maryland. Based on the most recent assessment, the Company has recorded a total reserve for environmental investigation and remediation costs of approximately $33 million, which is the probable minimum amount that the Company expects to expend during the next 20 years. Of this reserve, approximately $29 million relates to the six New Jersey MGP sites and approximately $4 million relates to the 10 sites located outside New Jersey.

The Company's prudently incurred remediation costs for the New Jersey MGP sites have been authorized by the NJBPU to be recoverable in rates over a rolling seven-year period through its MGP Remediation Adjustment Clause. As a result, the Company has begun rate recovery of approximately $8.2 million of environmental costs incurred through June 30, 2000. Recovery of an additional $1 million in environmental costs incurred between July 1, 2000 and June 30, 2001 is currently pending NJBPU approval. Accordingly, the Company has recorded a regulatory asset of approximately $35 million as of September 30, 2001, reflecting the future recovery of both incurred costs and future environmental remediation liabilities related to New Jersey MGP sites. The Company has also been successful in recovering a portion of MGP remediation costs incurred for the New Jersey sites from the Company's insurance carriers and continues to pursue additional recovery. With respect to costs associated with the remaining MGP sites located outside New Jersey, the Company intends to pursue recovery from ratepayers, former owners and operators, and insurance carriers, although the Company is not able to express a belief as to whether any or all of these recovery efforts will be successful. The Company is working with the regulatory agencies to prudently manage its MGP costs so as to mitigate the impact of such costs on both ratepayers and shareholders.

Gas Procurement Contracts. Certain of the Company's long-term contracts for the supply, storage and delivery of natural gas include fixed charges that amount to approximately $60.1 million annually. The Company currently recovers, and expects to continue to recover such fixed charges through its purchased gas adjustment clauses. As a result of the unbundling of natural gas services in New Jersey, these contracts may result in the realization of stranded costs by the Company. Management believes the outcome of these actions will not have a material adverse effect on the Company's results. The Company also is committed to purchase, at market-related prices, minimum quantities of gas that, in the aggregate, are approximately 2.6 billion cubic feet (Bcf) per year or to pay certain costs in the event the minimum quantities are not taken. The Company expects that minimum demand on its systems for the duration of these contracts will continue to exceed these minimum purchase obligations.
TIC Enterprises. NUI has recorded approximately $39 million of unamortized goodwill associated with its complete acquisition of TIC. As a result of the operating losses incurred during fiscal 2001, NUI completed a review of undiscounted expected future net cash flows in accordance with Statement of Financial Accounting Standards No. 121 (SFAS 121), "Impairment of Long-Lived Assets" as of September 30, 2001. The result of this analysis indicated that carrying value of the goodwill for TIC was not impaired as of September 30, 2001 on an undiscounted basis and did not require a write-down. However, as noted in Note 1 to the Consolidated Notes to the Financial Statements, NUI will be adopting the provisions of Statement of Financial Accounting Standards No. 142 (SFAS 142), "Goodwill and Intangible Assets" effective October 1, 2001, which requires that a fair market valuation be performed on the carrying value of the Company's goodwill. The results of this analysis is not complete at this time, however, such analysis may result in an impairment charge that could be material to the results of operations and financial condition of the Company.

Other. The Company is involved in various claims and litigation incidental to its business. In the opinion of management, none of these claims and litigation will have a material adverse effect on the Company's results of operations or its financial condition.

14.  Subsequent Events

On October 4, 2001, the Company completed is acquisition of the remaining 50 percent interests in Virginia Gas Storage Company (VGSC) and Virginia Gas Distribution Company (VGDC) from the two individuals that each owned 25 percent of the stock of both companies. Under terms of the agreement, the Company paid each owner $750,000 and issued 72,324 shares of NUI Common Stock in exchange for their stock in both VGSC and VGDC.

On October 11, 2001, the Company entered into an agreement to sell the capital stock of its Virginia Gas Propane Company (VG Propane) to Heritage Holdings, Inc. The purchase price was approximately $3.8 million and is subject to post-closing adjustments based on the ending assets and liabilities of VG Propane as of that date. The proceeds are expected to be reinvested in additional pipeline and storage capacity to facilitate the growth of NUI Virginia Gas.

15.  Unaudited Quarterly Financial Data

The quarterly financial data presented below reflects the seasonal nature of the Company's operations which normally results in higher earnings during the heating season, which is primarily in the first two fiscal quarters. (in thousands, except per share amounts):

	Fiscal Quarters
	First	Second	Third	Fourth
2001:
Operating Revenues	$320,380	$423,886	$231,929	$158,108
Operating Income	19,576	37,099	6,784	3,656
Net Income (Loss)	8,410	14,755	661	(1,152)
Net Income (Loss) Per Share	$0.65	$ 1.14	$0.05	$ (0.08)
2000:
Operating Revenues	$233,327	$279,469	$198,739	$223,241
Operating Income	18,328	35,159	6,933	(144)
Net Income (Loss)	7,637	17,717	1,464	(71)
Net Income (Loss) Per Share	$0.60	$1.37	$0.11	$ (0.01)

During the fourth quarter of fiscal 2000, the Company recorded an after-tax non-recurring gain of $1.7 million ($2.8 million before income taxes), or $0.13 per share, related to the gain on the sale of property.

Quarterly net income (loss) per share in fiscal 2001 does not total to the annual amount due to rounding and to changes in the average common shares outstanding.

SCHEDULE II
NUI Corporation and Subsidiaries Valuation and Qualifying Accounts For each of the Three Years in the Period Ended September 30, 2001 (Dollars in thousands)
		Additions
Description	Balance, Beginning of Period	Charged to Costs and Expenses	Other	Deductions	Balance, End of Period
2001
Allowance for doubtful accounts	$ 1,544	$ 5,951	$ 3,312(a,c)	$ 6,893(b)	$ 3,914
Environmental remediation reserve	$ 33,361	---	---	802	$ 32,559
Restructuring reserve	$ 0	---	1,523(c)	824	$ 699
2000
Allowance for doubtful accounts	$ 1,697	$ 4,087	$ 1,622(a)	$ 5,862(b)	$ 1,544
Environmental remediation reserve	$ 33,981	---	---	620	$ 33,361
1999
Allowance for doubtful accounts	$ 1,714	$ 2,655	$ 853(a)	$ 3,525(b)	$ 1,697
Environmental remediation reserve	$ 33,981	---	---	---	$ 33,981
Restructuring reserve	$ 556	149	---	705	$ 0
(a) Recoveries
(b) Uncollectible amounts written off.
(c) Acquisitions

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the Township of Bedminster, State of New Jersey, on the day of December 21, 2001.

NUI CORPORATION

By: JAMES R. VAN HORN

Chief Administrative Officer,

General Counsel and Secretary

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

JOHN KEAN, JR.	President, Chief Executive Officer and Director (Principal executive officer)	December 21, 2001
JOHN KEAN	Chairman and Director	December 21, 2001
A. MARK ABRAMOVIC	Senior Vice President, Chief Operating Officer and Chief Financial Officer (Principal financial and accounting officer)	December 21, 2001
JAMES J. FORESE	Director	December 21, 2001
DR. VERA KING FARRIS	Director	December 21, 2001
J. RUSSELL HAWKINS	Director	December 21, 2001
BERNARD S. LEE	Director	December 21, 2001
R. V. WHISNAND	Director	December 21, 2001
JOHN WINTHROP	Director	December 21, 2001

EX-21 2 exhibit21.htm

EXHIBIT NO. 21

SUBSIDIARIES OF NUI CORPORATION

     NUI Utilities, Inc. (a New Jersey Corporation), NUI Capital Corp. (a Florida Corporation), Virginia Gas Company (a Delaware Corporation) and NUI Saltville Storage, Inc. (a Delaware Corporation) are wholly-owned subsidiaries of NUI Corporation.

     NUI Energy, Inc. (a Delaware Corporation), NUI Energy Brokers, Inc. (a Delaware Corporation), Utility Business Services, Inc. (a New Jersey Corporation), NUI Environmental Group, Inc. (a New Jersey Corporation), NUI Energy Solutions Inc. (a New Jersey Corporation), NUI Sales Management, Inc. (a Delaware Corporation), NUI Services, Inc. (a New Jersey Corporation), NUI International, Inc. (a Delaware Corporation) and NUI Telecom, Inc. (formerly known as International Telephone Group, Inc. (a New Jersey Corporation) are wholly-owned subsidiaries of NUI Capital Corp.

     Virginia Gas Exploration Company, Virginia Gas Pipeline Company, Virginia Gas Marketing Company, Virginia Gas Storage Company and Virginia Gas Distribution Company (all Virginia Corporations) are wholly-owned subsidiaries of Virginia Gas Company.

     TIC Enterprises, LLC (a Delaware Limited Liability Company) is a wholly-owned subsidiary of NUI Sales Management, Inc.

     NUI/Caritrade International, L.L.C. (a Delaware Limited Liability Company) is a 90 percent owned subsidiary of NUI International, Inc.

     Saltville Gas Storage Company, LLC (a Virginia Limited Liability Company) is a 50 percent owned subsidiary of NUI Saltville Storage, Inc.

EX-23 3 exhibit23.htm

EXHIBIT NO. 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by reference of our report dated November 8, 2001, included in this Form 10-K of NUI Corporation for the year ended September 30, 2001, into the Company's previously filed Registration Statements File No. 33-56509 relating to Amendment No. 1 to Form S-3 Registration Statement, File No. 33-51459 relating to NUI Direct, File No. 33-57183 relating to the Savings and Investment Plan, File No. 33-24169 relating to the 1988 Stock Plan, File No. 333-02425 relating to the 1996 Stock Option and Stock Award Plan, File No. 333-02421 relating to the Employee Stock Purchase Plan, File No. 333-02423 relating to the 1996 Director Stock Purchase Plan, File No. 333-92817 relating to Form S-3 Registration Statement and File No. 333-46036 relating to the Virginia Gas Company Registration Statement.

ARTHUR ANDERSEN LLP

New York, New York
December 21, 2001

EX-10.43 4 exhibit10-43.htm

Exhibit 10.43

NUI CORPORATION

1996 STOCK OPTION, STOCK AWARD AND INCENTIVE PLAN

As Amended and Restated November 26, 2001

     1.  Purpose.  The purpose of the NUI Corporation 1996 Stock Option, Stock Award and Incentive Plan, as amended and restated (the "Plan"), is to maintain the ability of NUI Corporation (the "Company") and its subsidiaries to attract and retain highly qualified and experienced employees and directors and to give such employees and directors a continued proprietary interest in the success of the Company and its subsidiaries. Pursuant to the Plan, eligible employees will be provided the opportunity to participate in the enhancement of shareholder value through the grants of options, stock appreciation rights, awards of restricted stock and deferred restricted stock, bonuses payable in stock, cash- or share-denominated performance awards, and or any combination thereof. Eligible directors will participate through awards of deferred restricted stock as set forth in Section 7. Employees and directors who participate or become eligible to participate in the Plan from time to time are referred to collectively herein as "Participants."

     The term "subsidiary" as used in the Plan shall mean any present or future corporation which is or would be a "subsidiary corporation" of the Company as the term is defined in Section 424(f) of the Internal Revenue Code of 1986, as amended from time to time (the "Code").

     2.  Administration of the Plan.  The Plan shall be administered by a committee (the "Committee") which is appointed from time to time by the Board of Directors of the Company (the "Board"). The Committee shall consist of two or more members of the Board who are not employees of the Company or any subsidiary or affiliate. In appointing members of the Committee, the Board will consider whether a member is or will be a "Non-Employee Director" within the meaning of Rule 16b-3(b)(3) under the Securities Exchange Act of 1934 and an "outside director" within the meaning of Regulation 1.162-27(e)(3) under Code Section 162(m) (a "Qualified Member"), but Committee members are not required to be Qualified Members at the time of appointment or during their term of service on the Committee. The full Board may perform any function of the Committee hereunder, in which case the term "Committee" shall refer to the Board. A majority of the members of the Committe e shall constitute a quorum. The majority vote of the members of the Committee present at a meeting at which a quorum is present shall be required for the Committee to take action under the Plan, except that the Committee otherwise may take action in any manner permitted by the New Jersey Business Corporation Act.

     In administering the Plan, the Committee may adopt rules and regulations for carrying out the Plan. The interpretation and decision made by the Committee with regard to any question arising under the Plan shall be final and conclusive on Participants. Subject to the terms of the Plan, the Committee shall determine the Participants to whom, and the time or times at which, awards shall be made and the number of shares, stock appreciation rights or other awards to be made under the Plan, and the terms and conditions of such awards, including the periods for which options will be outstanding. The Committee may delegate authority to take actions under the Plan to the extent permitted under the New Jersey Business Corporation Act.

     Each award made pursuant to the Plan shall be evidenced by an Option Agreement or Award Agreement (the "Agreement"). The Committee shall prescribe the form of all Agreements.

     3.  Shares of Stock Subject to the Plan; Per-Person Limitations. The maximum number of shares of the voting common stock of the Company, no par value (the "Common Stock"), that may be issued or delivered in connection with awards under the Plan is 1,800,000 shares, subject to adjustment as provided in Section 14 hereof. The number of shares of Common Stock which may be issued and delivered in connection with awards other than options and stock appreciation rights granted on or after January 22, 2002 shall not exceed 50% of the total number of shares reserved under the Plan. Any shares subject to an option or award which for any reason expires or is terminated or settled without delivery of shares shall again be available for awards under the Plan. Shares subject to the Plan may be either authorized and unissued shares or issued shares repurchased or otherwise acquired by the Company or its subsidiaries.

     In each fiscal year during any part of which the Plan is in effect, a participant may be granted options and other awards relating to stock up to his or her "Annual Limit." A participant's Annual Limit in any fiscal year after fiscal 2001 shall equal 250,000 shares of Common Stock plus the amount of the Participant's unused Annual Limit relating to shares as of the close of the previous fiscal year, subject to adjustment as provided in Section 14. In the case of an award which is not valued in a way in which the limitation on awards relating to shares would operate as an effective limitation satisfying Treasury Regulation 1.162-27(e)(4), the maximum cash amount or value of such an award that may be earned by a Participant during any fiscal year after 2001 shall be equal to the Participant's Annual Limit, which for this purpose shall equal $2.5 million plus the amount of the Participant's unused cash Annual Limit as of the close of the previous fiscal year. For purposes of this Section 3, (i) "earning" means satisfying performance conditions so that an amount becomes payable, without regard to whether it is to be paid currently or on a deferred basis or continues to be subject to any service requirement or other non-performance condition; and (ii) a Participant's Annual Limit is used to the extent a number of shares or cash amount may be potentially earned or paid under an award, regardless of whether such amount or shares are in fact earned or paid.

     4. Eligibility. Salaried employees, including officers, of the Company and its divisions and subsidiaries are eligible to be granted options, restricted stock and other awards under the Plan and to receive incentive awards payable in cash and other awards in accordance with the Plan. Subject to the terms of the Plan, the employees who shall receive awards under the Plan, and the criteria to be used in determining the award to be made, shall be determined from time to time by the Committee, in its sole discretion, from among those eligible, which may be based upon information furnished to the Committee by the Company's management, and the Committee shall determine, in its sole discretion, the number of shares to be covered by each award and the amount of any cash granted to each employee selected. Non-employee directors of the Company are also eligible to participate in the Plan in accordance with Section 7.

     5. Terms and Conditions of Stock Options. Options granted under the Plan may be either incentive stock options, as defined in Section 422 of the Code, or options other than incentive stock options. Each option shall be subject to all the applicable provisions of the Plan, including the following terms and conditions, and to such other terms and conditions not inconsistent therewith as the Committee shall determine:

     (a)     The option price per share shall be determined by the Committee. However, the option price per share shall not be less than 100% of the fair market value of a share of Common Stock at the time the option is granted. For purposes of the Plan, unless otherwise determined by the Committee, fair market value shall be the mean between the highest and lowest prices at which the Common Stock is traded on a national securities exchange on the relevant date; provided, however, if there is no sale of the Common Stock on such exchange on such date, fair market value shall be the mean between the bid and asked prices on such exchange at the close of the market on such date.

     (b)     Each option shall be exercisable subject to the attainment of such performance goals, and/or during such period ending not later than ten years from the date it was granted, as may be determined by the Committee and stated in the Agreement. In no event may an option be exercised more than ten years from the date the option was granted.

     (c)     An option shall not be exercisable with respect to a fractional share of Common Stock or with respect to the lesser of fifty (50) shares or the full number of shares then subject to the option. No fractional shares of Common Stock shall be issued upon the exercise of an option. If a fractional share of Common Stock shall become subject to an option by reason of a stock dividend or otherwise, the optionee shall not be entitled to exercise the option with respect to such fractional share.

     (d)     Each option shall state whether it will or will not be treated as an incentive stock option.

     (e)      Each option will be deemed exercised on the day written notice specifying the number of shares to be purchased, accompanied by payment in full including, if required by law, applicable taxes, is received by the Company. Payment, except as provided in the Agreement, shall be:

(i)  in United States dollars by check or bank draft; or

(ii)  by tendering to the Company shares of Common Stock already owned for at least six months (unless the tendered shares otherwise qualify as "mature" shares under APB 25) by the person exercising the option, which may include shares received as the result of a prior exercise of an option, and having a fair market value, as determined in accordance with Section 5(a), on the date on which the option is exercised equal to the cash exercise price applicable to such option; or

(iii)  by a combination of United States dollars and shares of Common Stock valued as aforesaid.

No optionee shall have any rights to dividends or other rights of a shareholder with respect to shares of Common Stock subject to his or her option until he or she has given written notice of exercise of such option and paid in full for such shares.

     (f)      Notwithstanding the foregoing, the Committee may, in its sole discretion, include in the grant of an option the right of a grantee (hereinafter referred to as a "stock appreciation right") to elect, in the manner described below, in lieu of exercising his or her option for all or a portion of the shares of Common Stock covered by such option, to relinquish his or her option with respect to any or all of such shares and to receive from the Company a payment equal in value to (x) the fair market value, as determined in accordance with Section 5(a), of a share of Common Stock on the date of such election, multiplied by the number of shares as to which the grantee shall have made such election, less (y) the exercise price for that number of shares of Common Stock for which the grantee shall have made such election under the terms of such option. A stock appreciation right shall be exercisable at the time the tandem option is exercisable, and the "expiration date" for the stock appreciation right shall be the expiration date for the tandem option. A grantee who makes such an election shall receive payment in the sole discretion of the Committee (i) in cash equal to such excess; or (ii) in the nearest whole number of shares of Common Stock having an aggregate fair market value, as determined in accordance with Section 5(a) as of the date of election, which is not greater than the cash amount calculated in (ii) above; or (iii) in a combination of (i) and (ii) above. A stock appreciation right may be exercised only when the amount described in (x) above exceeds the amount described in (y) above. An election to exercise stock appreciation rights shall be deemed to have been made on the day written notice of such election, addressed to the Committee, is received by the Company. An option or any portion thereof with respect to which a grantee has elected to exercise a stock appreciation right shall be surrendered to the Company and such option shall t hereafter remain exercisable according to its terms only with respect to the number of shares as to which it would otherwise be exercisable, less the number of shares with respect to which stock appreciation rights have been exercised. The grant of a stock appreciation right shall be evidenced by an Agreement. The Agreement evidencing stock appreciation rights shall be personal and will provide that the stock appreciation rights will not be transferable by the grantee otherwise than by will or the laws of descent and distribution and that they will be exercisable, during the lifetime of the grantee, only by him or her.

    (g)     Except as provided in the applicable Agreement, an option may be exercised only if at all times during the period beginning with the date of the granting of the option and ending on the date of such exercise, the grantee was an employee of either the Company (or of a division) or subsidiary of the Company or of another corporation referred to in Section 421(a)(2) of the Code. The Agreement shall provide whether, and to what extent, an option may be exercised after termination of continuous employment, but any such exercise shall in no event be later than the termination date of the option. If the grantee should die, or become permanently disabled as determined by the Committee at any time when the option, or any portion thereof, shall be exercisable, the option will be exercisable within a period provided for in the Agreement, by the optionee or person or persons to whom his or her rights under the option shall have passed by will or by the laws o f descent and distribution, but in no event at a date later than the termination of the option. The Committee may require medical evidence of permanent disability, including medical examinations by physicians selected by it.

     (h)     Each option by its terms shall be personal and shall not be transferable by the optionee otherwise than by will or by the laws of descent and distribution as provided in Section 5(g) above. During the lifetime of an optionee, the option shall be exercisable only by the optionee. In the event any option is exercised by the executors, administrators, heirs or distributees of the estate of a deceased optionee as provided in Section 5(g) above, the Company shall be under no obligation to issue Common Stock thereunder unless and until the Company is satisfied that the person or persons exercising the option are the duly appointed legal representatives of the deceased optionee's estate or the proper legatees or distributees thereof. The foregoing notwithstanding, an option other than an incentive stock option may be transferred to one or more beneficiaries during the lifetime of the Participant, and rights thereunder may be exercised by such tran sferees in accordance with the terms of such option, if and to the extent such transfers are then permitted by the Committee, subject to any terms and conditions which the Committee may impose thereon.

     (i)     Notwithstanding any intent to grant incentive stock options, an option will not be considered an incentive stock option to the extent that such option, together with any previously granted incentive stock options, permits the exercise for the first time in any calendar year the purchase of more than $100,000 in fair market value of Common Stock (determined at the time of grant).

     (j)     No incentive stock option shall be granted to an employee who owns or would be treated as owning by attribution under Code Section 424(d) immediately before the grant of such option, directly or indirectly, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company. This restriction shall not apply if, (i) at the time such incentive stock option is granted, the option price is at least 110% of the fair market value of the shares of Common Stock subject to the option, as determined in accordance with Section 5(a) on the date of grant, and (ii) the incentive stock option by its terms is not exercisable after the expiration of five years from the date of its grant.

     (k)     An option and any Common Stock received upon the exercise of an option shall be subject to such other transfer restrictions and/or legending requirements as are specified in the applicable Agreement.

     6. Terms and Conditions of Restricted Stock Awards. Awards of restricted stock under the Plan shall be subject to all the applicable provisions of the Plan, including the following terms and conditions, and to such other terms and conditions not inconsistent therewith, as the Committee shall determine:

     (a)     Awards of restricted stock may be in addition to or in lieu of option grants.

     (b)     Awards may be conditioned on the attainment of particular performance goals based on criteria established by the Committee at the time of each award of restricted stock. During a period set forth in the Agreement (the "Restriction Period"), the recipient shall not be permitted to sell, transfer, pledge, or otherwise encumber the shares of restricted stock; except that such shares may be used, if the Agreement permits and the shares would qualify as "mature" shares for purposes of APB 25, to pay the option price pursuant to any option granted under the Plan, provided an equal number of shares delivered to the optionee shall carry the same restrictions as the shares so used.

     (c)     Shares of restricted stock shall become free of all restrictions if, during the Restriction Period, (i) the recipient dies, (ii) the recipient's employment terminates by reason of permanent disability, as determined by the Committee, (iii) the recipient retires after attaining both 59 1/2 years of age and five years of continuous service with the Company and/or a division or subsidiary, or (iv) if provided in the Agreement, there is a "change in control" of the Company (as defined in such Agreement). The Committee may require medical evidence of permanent disability, including medical examinations by physicians selected by it.

     (d)     Unless and to the extent otherwise provided in the Agreement, shares of restricted stock shall be forfeited and revert to the Company upon the recipient's termination of employment during the Restriction Period for any reason other than death, permanent disability, as determined by the Committee, retirement after attaining both 59 1/2 years of age and five years of continuous service with the Company and/or a subsidiary or division, or, to the extent provided in the Agreement, a "change in control" of the Company (as defined in such Agreement), except to the extent the Committee, in its sole discretion, finds that such forfeiture might not be in the best interests of the Company and, therefore, waives all or part of the application of this provision to the restricted stock held by such recipient.

     (e)     Stock certificates for restricted stock shall be registered in the name of the recipient but shall be appropriately legended and returned to the Company by the recipient, together with a stock power endorsed in blank by the recipient. The recipient shall be entitled to vote shares of restricted stock and shall be entitled to all dividends paid thereon, except that dividends paid in Common Stock or other property shall also be subject to the same restrictions.

     (f)     Restricted stock shall become free of the foregoing restrictions upon expiration of the applicable Restriction Period and the Company shall then deliver to the recipient Common Stock certificates evidencing such stock.

     (g)     Restricted Stock and any Common Stock received upon the expiration of the restriction period shall be subject to such other transfer restrictions and/or legending requirements as are specified in the applicable Agreement.

     (h)     The Committee is authorized to grant deferred restricted stock to Participants, which are rights to receive shares of Common Stock at the end of a specified deferral period, subject to the following terms and conditions:

(i)  Issuance of shares will occur upon expiration of the deferral period specified for a deferred restricted stock award by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, deferred restricted stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or otherwise, and under such other circumstances as the Committee may determine at the date of grant or thereafter.

(ii)  Except as otherwise determined by the Committee, vesting and forfeiture terms of deferred restricted stock shall be substantially the same as those applicable to restricted stock under this Section 6.

(iii)  Unless otherwise determined by the Committee, dividend equivalents on the specified number of shares covered by an award of deferred restricted stock shall be either (A) paid with respect to such deferred restricted stock at the dividend payment date in cash or in shares of unrestricted Common Stock having a fair market value equal to the amount of such dividends, or (B) deferred with respect to such deferred restricted stock, either as a cash deferral or with the amount or value thereof automatically deemed reinvested in additional deferred restricted stock having a fair market value equal to the amount of such dividends, as the Committee shall determine or permit a Participant to elect.

     7.  Terms and Conditions of Deferred Restricted Stock Grants for Non-Employee Directors.

     (a)  For purposes of this Plan, a "non-employee director" is a member of the Board who is not a full-time employee of the Company, or one of its or subsidiaries. Non-employee directors will receive benefits under the Plan only as provided in this Section 7.

     A non-employee director shall receive his or her Board and Committee chair retainers paid by the Company to its directors in deferred restricted stock credits rather than cash. The valuation of the deferred restricted stock credited in lieu of cash shall be reasonably determined by the Board of Directors. Such credits shall not be funded, but shall exist solely as a deferred restricted stock account on the books of the Company to reflect the number of shares of Common Stock (including fractional shares to 5 decimal places) which could have been purchased from time to time with the earned amount of such retainer at 100% of fair market value. Fair market value shall be determined on the first day of each participating director's directorship for the year with respect to which such retainer is credited.

     Whenever a cash dividend is paid with respect to Common Stock, each non-employee director's deferred restricted stock account shall be credited with the number of shares of Common Stock (including fractional shares to 5 decimal places) which could have been purchased on the applicable dividend payment date at 100% of fair market value on such date, based upon the per share cash dividend multiplied by the number of shares of Common Stock then credited to such director's account. Any stock dividend shall also be credited to each non- employee director's deferred restricted stock account (including fractional shares to 5 decimal places).

     (b)   Upon termination of his or her directorship for any reason, the non-employee director (or his or her designated beneficiary) shall receive the number of whole shares of Common Stock then credited to his or her account (but not any fractional shares). Any fractional share credits remaining in the account shall thereupon be canceled. Such shares shall be restricted in accordance with this Section 7.

     8.  Bonuses Payable in Stock. In lieu of cash bonuses otherwise payable under the Company's or applicable division's or subsidiary's compensation practices to employees eligible to participate in the Plan, the Committee, in its sole discretion, may determine that such bonuses shall be payable in Common Stock or partly in Common Stock and partly in cash. Such bonuses shall be in consideration of services previously performed and as an incentive toward future services and shall consist of shares of Common Stock subject to such terms as the Committee may determine in its sole discretion. The number of shares of Common Stock payable in lieu of a bonus otherwise payable shall be determined by dividing such bonus amount by the fair market value of one share of Common Stock on the date the bonus is payable, with fair market value determined as of such date in accordance with Section 5(a).

     9.  Performance Awards Qualifying Under Code Section 162(m). The Committee is authorized to grant awards on the terms and conditions specified in this Section 9. Such awards ("Performance Awards") may be denominated as a cash amount, number of shares of Stock, or specified number of other awards (or a combination) which may be earned upon achievement or satisfaction of performance conditions specified by the Committee. If the Committee determines that a Performance Award to be granted to a Participant who Committee deems likely to be a Covered Employee (as defined in Section 15(g)) should qualify as "performance-based compensation" for purposes of Code Section 162(m), the grant, exercise and/or settlement of such Performance Award shall be contingent upon achievement of a preestablished performance goal and other terms set forth in this Section 9.

     (a)     The performance goal for such Performance Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee. The performance goal shall be objective and shall otherwise meet the requirements of Code Section 162(m) and Treasury Regulation 1.162-27, including the requirement that the performance goals set by the Committee be "substantially uncertain" of achievement. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants.

     (b)     One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries or affiliates or other business units of the Company shall be used by the Committee in establishing performance goals for such Performance Awards: (1) return on invested capital, return on assets, return on investment, or return on equity (on a gross or net basis); (2) earnings from operations, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items; (3) net income or net income per common share (basic or diluted); (4) sales or net revenues; (5) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (6) working capital turns; (7) interest expense after taxes; (8) economic value created; (9) operating margin or profit margin; (10) stock price or to tal shareholder return; (11) dividend payout as a percentage of net income; (12) strategic business criteria, consisting of one or more objectives based on meeting specified goals with respect to customer growth, supplier management, productivity, market penetration, geographic business expansion goals, cost targets, customer satisfaction, employee satisfaction, management of employment practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions or divestitures of subsidiaries, affiliates or joint ventures. The targeted level or levels of performance with respect to such business criteria may be established at such levels and in such terms as the Committee may determine, in its discretion, including in absolute terms, as a goal relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies.

     (c)     Achievement of performance goals in respect of such Performance Awards shall be measured over a performance period of up to one year or more than one year, as specified by the Committee. Thus, annual incentive awards may be granted under this Section 9. A performance goal shall be established not later than the earlier of (A) 90 days after the beginning of any performance period applicable to such Performance Award or (B) the time 25% of such performance period has elapsed. In all cases, the maximum Performance Award of any Participant shall be subject to the limitation set forth in Section 3.

     (d)     Settlement of Performance Awards shall be in cash, Stock, other awards or other property, in the discretion of the Committee. The Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to be made in connection with such Performance Awards, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of a Performance Award subject to this Section 9. Any settlement which changes the form of payment from that originally specified shall be implemented in a manner such that the Performance Award and other related awards do not, solely for that reason, fail to qualify as "performance-based compensation" for purposes of Code Section 162(m). The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant or other event (including a change in control) prior to the end of a p erformance period or settlement of such Performance Awards.

     10.  Change in Control. Each Agreement (including those relating to awards under Section 7) may, in the sole discretion of the Committee, provide that any or all of the following actions may be taken upon the occurrence of a change in control (as defined in the Agreement) with respect to the Company:

(i)  acceleration of time periods for purposes of vesting in, or realizing gain from, or exercise or settlement of any outstanding option or stock appreciation right, shares of restricted stock, or other award awarded pursuant to this Plan;

(ii)  offering to purchase any outstanding option or stock appreciation right, shares of restricted stock, or other award made pursuant to this Plan from the holder for its equivalent cash value, as determined by the Committee, as of the date of the change in control; or

(iii)  making adjustments or modifications to outstanding options or stock appreciation rights or with respect to restricted stock or other award as the Committee deems appropriate to maintain and protect the rights and interests of the Participants following such change in control, provided, however, that the exercise period of any option may not be extended beyond 10 years from the date of grant.

     11.  Transfer, Leave of Absence. For purposes of the Plan: (a) a transfer of an employee from the Company to a division or subsidiary of the Company, whether or not incorporated, or vice versa, or from one division or subsidiary of the Company to another, and (b) a leave of absence, duly authorized in writing by the Company or a subsidiary or division of the Company, shall not be deemed a termination of employment.

     12. Rights of Employees.

     (a)  No person shall have any rights or claims under the Plan except in accordance with the provisions of the Plan and each Agreement.

     (b)  Nothing contained in the Plan and Agreement shall be deemed to give any employee the right to continued employment by the Company or its divisions or subsidiaries.

     13.  Withholding Taxes. The Company shall require a payment from a Participant to cover applicable mandatory withholding for income and employment taxes upon the happening of any event pursuant to the Plan which requires such withholding. The Company reserves the right to offset such tax payment from any funds which may be due the Participant from the Company or its subsidiaries or divisions or, in its discretion, to the extent permitted by applicable law, to accept such tax payment through the delivery of shares of Common Stock owned by the Participant or by utilizing shares of the Common Stock which were to be delivered to the Participant pursuant to the Plan, having an aggregate fair market value, determined as of the date of payment, equal to the mandatory withholding taxes due.

     14.  Adjustments. In the event of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations, exchanges of shares, spin-offs, liquidations, reclassifications , large, special and non-recurring dividend of cash or property other than stock, or other similar corporate transaction or event affects the stock such that an adjustment is determined by the Committee to be appropriate under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and kind of shares of stock which may be delivered in connection with awards granted thereafter, (ii) the number and kind of shares of stock by which annual per-person award limitations are measured under Section 3, (iii) the number and kind of shares of stock subject to or deliverable in respect of outstanding options and other awards, and (iv) the exercise price, grant price or purchase price relating to any option or o ther award or, if deemed appropriate, the Committee may make provision for a payment of cash or property to the holder of an outstanding option or award. In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, awards (including Performance Awards and performance goals relating thereto) in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence, as well as acquisitions and dispositions of businesses and assets) affecting the Company, any subsidiary or affiliate or other business unit, or the financial statements of the Company or any subsidiary or affiliate, or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee's assessment of the business strategy of the Company, any subsidiary or affiliate or business unit thereof, performance of comparable organizations, economic and busin ess conditions, personal performance of a Participant, and any other circumstances deemed relevant; provided that no such adjustment shall be authorized or made if and to the extent that the existence of such authority (i) would cause options or Performance Awards granted to Participants designated by the Committee as Covered Employees and intended to qualify as "performance-based compensation" under Code Section 162(m) and regulations thereunder to otherwise fail to so qualify, (ii) would cause the Committee to be deemed to have authority to change the targets, within the meaning of Treasury Regulation 1.162-27(e)(4)(vi), under the performance goals relating to options or awards granted to Covered Employees and intended to qualify as "performance-based compensation" under Code Section 162(m) and regulations thereunder. If another corporation or other business entity is acquired by the Company, and the Company has assumed outstanding employee option grants under a prior existing plan of the acquired entity, similar adjustments are permitted at the discretion of the Committee. In the event of any other change affecting the shares of Common Stock available for awards under the Plan, such adjustment, if any, as may be deemed equitable by the Committee, shall be made to preserve the intended benefits of the Plan giving proper effect to such event.

     15.  Miscellaneous Provisions.

     (a)  The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of shares or the payment of cash upon exercise of any option or stock appreciation right or settlement of any award under the Plan. The expenses of the Plan shall be borne by the Company.

     (b)  The Committee may, at any time and from time to time after the granting of an option or other awards relating to stock specify such additional terms, conditions and restrictions with respect to such option or other awards as may be deemed necessary or appropriate to ensure compliance with any and all applicable laws, including, but not limited to, the Code, federal and state securities laws and methods of withholding or providing for the payment of required taxes.

     (c)  If at any time the Committee shall determine in its discretion that the listing, registration or qualification of shares of Common Stock upon any national securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of shares of Common Stock hereunder, the Committee may restrict the exercise of any option or stock appreciation right or settlement of restricted stock or other award in whole or in part until such listing registration, qualification, consent or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Committee.

     (d)  By accepting any benefit under the Plan, each Participant and each person claiming under or through such Participant shall be conclusively deemed to have indicated his acceptance and ratification, and consent to, any action taken under the Plan by the Committee, the Company or the Board.

     (e)  The Plan shall be governed by and construed in accordance with the laws of the State of New Jersey.

     (f)  Committee members exercising their functions under this Plan are serving as directors of the Company and they shall therefore be entitled to all rights of indemnification and advancement of expenses accorded directors of the Company.

     (g)  It is the intent of the Company that options granted under Section 5 and other awards granted or designated as awards to Covered Employees pursuant to Section 9 shall constitute qualified "performance-based compensation" within the meaning of Code Section 162(m) and regulations thereunder, unless otherwise determined by the Committee at the time of designation of the award. Accordingly, the terms of the Plan relating to such awards, including the terms used therein, shall be interpreted in a manner consistent with Code Section 162(m) and regulations thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Participant will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean a person designated by the Committee as likely to be a Covered Employee with respect to a specified fiscal year. If any provision of the Plan or any Agreement or other document relating to an award that is designated as intended to comply with Code Section 162(m) does not comply or is inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements, and no provision shall be deemed to confer upon the Committee or any other person discretion to increase the amount of compensation otherwise payable in connection with any such award upon attainment of the applicable performance objectives.

     (h)  It is the intent of the Company that options and other awards relating to stock hereunder qualify for fixed accounting under APB 25, with the measurement date to occur at grant or, in the case of awards fully conditioned upon specified performance goals, upon achievement of such goals, unless the Committee specifically determines otherwise. Therefore, in order to preserve this fundamental objective of these equity awards, if any provision of the Plan, an Agreement, or such an award would result in "variable" accounting or a measurement date other than the date of grant, if this Committee was not specifically aware of such accounting consequence at the time such provision became effective, such provision shall be modified and reformed to the extent necessary to preserve the accounting treatment of the award intended by the Committee, subject to Section 17 of the Plan.

     16.  Limits of Liability.

    (a)  Any liability of the Company or a subsidiary of the Company to any Participant with respect to any option or award shall be based solely upon contractual obligations created by the Plan and Agreement.

     (b)  Neither the Company nor a division or subsidiary of the Company, nor any member of the Committee or the Board, nor any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability to any party for any action taken or not taken in connection with the Plan, except as may expressly be provided by statute.

     17.   Amendments and Termination. The Board may, at any time, amend, alter or discontinue the Plan; provided, however, no amendment, alteration or discontinuation shall be made which would impair the rights of any holder of an award of restricted stock, option, stock appreciation rights or other award (excluding unearned Performance Awards) theretofore granted, without his or her written consent, or which, without the approval of the shareholders, would:

(i)  except as provided in Section 14, increase the maximum number of shares of Common Stock which may be issued under the Plan;

(ii)  except as provided in Section 14, decrease the option price of an option (and related stock appreciation rights, if any) to less than 100% of the fair market value (as determined in accordance with Section 5(a)) of a share of Common Stock on the date of the granting of the option (and related stock appreciation rights, if any);

(iii)  materially change the class of persons eligible to receive an award of restricted stock or options or stock appreciation rights under the Plan;

(iv)  extend the duration of the Plan; or

(v)  materially increase in any other way the benefits accruing to Participants.

  18.  Duration. The Plan was, following its initial adoption by the Board, approved by the Company's shareholders on March 12, 1996. An amendment to the Plan was approved by shareholders on January 27, 1998. This amendment and restatement will be subject to the approval of the Company's shareholders and such regulatory bodies as may be necessary, which approvals must occur within the period ending twelve months after the date the amendment and restatement of the Plan is adopted. Subject to such approvals, grants and awards may be made under the Plan between the date of its adoption and receipt of such approvals. Authority to grant awards under the amended and restated Plan shall terminate upon the earlier of the following dates or events to occur:

(i)  upon the adoption of a resolution of the Board terminating the Plan; or

(ii)  the date no shares of Common Stock remain available for grants of awards in accordance with the Plan's provisions.

No such termination of the Plan shall adversely affect the rights of any Participant hereunder and all options or stock appreciation rights previously granted and restricted stock and other awards awarded hereunder shall continue in force and in operation after the termination of the Plan, except as they may be otherwise terminated in accordance with the terms of the Plan.

     19.  Other Compensation Plans. The Plan shall not be deemed to preclude the implementation by the Company or its divisions or subsidiaries of other compensation plans which may be in effect from time to time, nor adversely affect any rights of Participants under any other compensation plans of the Company or its divisions or subsidiaries.

     20.  Non-Transferability. No right or interest in any award granted under the Plan shall be assignable or transferable, except as set forth in the Plan or required by law, and no right or interest of any participant in any award shall be liable for, or subject to, any lien, obligation or liability except as set forth in the Plan or as required by law.

EX-10.55 5 exhibit10-55.htm

EXHIBIT 10.55

Contract No.010041

FT SERVICE AGREEMENT

     THIS AGREEMENT entered into this 1st day of May, 2000, by and between Eastern Shore Natural Gas Company, a corporation of the State of Delaware (herein called "Seller"), and NUI Corporation (herein called "Buyer").

WITNESSETH

     WHEREAS, Buyer desires to obtain Firm Transportation Service from Seller and Seller is willing to provide Firm Transportation Service for Buyer; and

     WHEREAS, such service will be provided by Seller for Buyer in accordance with the terms hereof.

     NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the sufficiency of which is hereby acknowledged, Seller and Buyer do covenant and agree as follows:

ARTICLE I

Definitions

      In addition to the definitions incorporated herein through Seller's Rate Schedule FT, the following terms when used herein shall have the meanings set forth below:

     1.1     The term "FERC" shall mean the Federal Energy Regulatory Commission or any successor regulatory agency or body which has authority to regulate the rates and/or services of Seller.

     1.2     The term "Rate Schedule FT" shall mean Seller's Rate Schedule FT and the General Terms and Conditions of Seller's FERC Gas Tariff, as filed with the FERC and as changed and adjusted from time to time by Seller in accordance with Section 4.2 hereof or in compliance with any final FERC order affecting such Rate Schedule and/or General Terms and Conditions.

ARTICLE II

Quantity

     2.1     The Maximum Daily Transportation Quantity ("MDTQ") shall be set forth on Exhibit "B" attached hereto. The applicable MDTQ shall be the largest daily quantity of gas, expressed in dekatherms ("dt"), that Seller is obligated to transport and make available for delivery for the account of Buyer under this Service Agreement on any one Gas Day.

     2.2     Buyer may tender natural gas for transportation to Seller on any Gas Day up to the MDTQ, plus the Fuel Retention Quantity as defined in Section 31 of the General Terms and Conditions of Seller's FERC Gas Tariff. Seller agrees to receive the aggregate of the quantities of natural gas that Buyer tenders for transportation, plus the Fuel Retention Quantity, at the Point(s) of Receipt, up to the Maximum Daily Receipt Obligation ("MDRO") specified for each Point of Receipt as set forth on Exhibit "A" attached hereto, and to transport and make available for delivery for the account of Buyer at each Delivery Point Area ("DPA") specified on Exhibit "B" attached hereto, quantities of natural gas up to the amount scheduled by Seller, less the Fuel Retention Quantity, and Buyer agrees to accept or cause acceptance of such delivery by Seller.

ARTICLE III

Payment and Rights of Termination

     3.1     Except as provided to the contrary in any written agreement(s) between Buyer and Seller in effect during the term hereof, Buyer shall pay Seller, for all service rendered hereunder, the applicable maximum rate, and all other lawful charges, as specified in Seller's Rte Schedule FT, as filed with the FERC and as said Rate Schedule may hereafter be legally amended or superseded. Buyer and Seller may mutually agree that Buyer shall pay a rate other than the applicable maximum rate so long as such rate is between the applicable maximum and minimum rates specified for such service in Seller's Tariff. Buyer and Seller may agree that a specific discounted rate will apply only to certain quantities under this Agreement; tht a specified discounted rte will apply only if specified quantities are achieved or only if the quantities do not exceed a certain level; that a specified discounted rate will apply only during specified periods of the year or for a specifically defined period; and/or that a specified discounted rate will apply only to specified rate zones, Delivery Point Areas, delivery points or other defined geographic area.

     3.2     In the event Buyer fails to pay for the service provided under this Agreement or otherwise fails to meet Seller's standards for creditworthiness, Seller shall have the right to terminate this Agreement pursuant to the conditions set forth in Section 11, Section 18 and Section 19 of the General Terms and Conditions of Seller's FERC Gas Tariff.

     3.3     In the event Buyer and Seller mutually agree to a negotiated rate(s) and/or terms of service hereunder (if authorized by the Commission), provisions governing such negotiated rate (including surcharges) and terms shall be set forth on Exhibit C to this Agreement.

ARTICLE IV

Rights to Amend Rates and Terms and Conditions of Service

     4.1     This Agreement in all respects shall be and remain subject to the provisions of said Rate Schedule FT and the provisions of the General Terms and Conditions of Seller's FERC Gas Tariff (as the same may hereafter be legally amended or superseded), all of which are made a part hereof by this reference.

     4.2     Seller shall have the unilateral right to file with the appropriate regulatory authority and seek to make changes in: (a) the rates and charges applicable to its Rate Schedule FT; (b) Rate Schedule FT including the Form of Service Agreement and the existing Service Agreement pursuant to which this service is rendered; and/or (c) any provisions of the General Terms and Conditions of Seller's FERC Gas Tariff applicable to Rate Schedule FT, provided however, Seller shall not have the right, without the consent of Buyer, unless required to do so pursuant to applicable laws or regulations, to make any filing pursuant to Section 4 of the Natural Gas Act to reduce the firm nature of the service provided under said Rate Schedule or the provisions of Exhibits "A", "B" and "C". Seller agrees that Buyer may protest or contest the aforementioned filings, or seek authorization from duly constituted regulatory authorities for such adjustment of Seller's existing FERC Gas Tariff as may be found necessary in order to assure that the provisions in (a), (b), or (c) above are just and reasonable.

ARTICLE V

Term of Agreement and Commencement of Service

     5.1     The primary term of this Agreement shall commence on November 1, 2000 and shall continue in effect until October 31, 2010 or ten (10 years after the in-service date of the facilities necessary to provide this service, whichever is later. Termination or renewal of this Agreement shall occur in accordance with the provisions of Section 13 of the General Terms and Conditions of Seller's FERC Gas Tariff.

     5.2     Any portion of this Agreement necessary to correct or "cash out" imbalances under this Agreement, pursuant to the General Terms and Conditions of Seller's FERC Gas Tariff, shall survive the other parts of this Agreement until such time as such balancing has been accomplished.

ARTICLE VI

Point(s) of Receipt and Delivery and Maximum Daily Quantities

     6.1     The Primary Point(s) of Receipt and MDRO for each Primary Point of Receipt, for all gas delivered for the account of Buyer into Seller's pipeline system under this Agreement, shall be at the Point(s) of Receipt on Seller's pipeline system as set forth on Exhibit "A" attached hereto.

     6.2     The Primary Delivery Point Area(s) ("DPA") and Maximum Daily Delivery Obligation ("MDDO") for each DPA for all gas made available for delivery by Seller to Buyer, or for the account of Buyer, under this Agreement shall be as set forth on Exhibit "B" attached hereto. Exhibit "B" also includes the Maximum Hourly Quantity ("MHQ") for each DPA as defined in Section 20 of the General Terms and Conditions of Seller's FERC Gas Tariff.

ARTICLE VII

Notices and Payments

     7.1     All notices and communications with respect to this Agreement shall be in writing and shall be considered as duly conveyed when sent to the addresses stated below or at any other such address as either Seller or 8uyer may hereafter designate in writing in accordance with the applicable provisions of Section 8 of the General Terms and Conditions of Seller's FERC Gas Tariff.

Seller:
	Eastern Shore Natural Gas Company
	Post Office Box 1769
	Dover, Delaware 19903-1769
	Attention: Director of Customer Services
Buyer:	NUI Corporation
	550 Route 202-206
	P.O. Box 760
	Bedminster, New Jersey 07921-0760

     7.2     All payments for service provided under this Agreement shall be by wire transfer of funds and shall be directed to the address stated below:

Eastern Shore Natural Gas Company

PNC Bank - Wilmington, DE

Account No. 5684278110

ABA No. 031100089

ARTICLE VIII

Facilities

      8.1     To the extent that construction of facilities is necessary to provide service under this Service Agreement, such construction, including payment for the facilities, shall occur in accordance with Section 12 of the General Terms and Conditions of Seller's FERC Gas Tariff.

ARTICLE IX

Regulatory Authorizations and Approvals

     9.1     Seller's obligation to provide service is conditioned upon receipt and acceptance of any necessary regulatory authorization to provide Firm Transportation Service for Buyer in accordance with the terms of Rate Schedule FT, this Service Agreement and the General Terms and Conditions of Seller's FERC Gas Tariff. Buyer agrees to reimburse Seller for all reporting and/or filing fees incurred by Seller in providing service under this Service Agreement.

ARTICLE X

Pressures

     10.1     The quantities of gas delivered or caused to be delivered by Buyer to Seller hereunder shall be delivered into Seller's pipeline system at a pressure sufficient to enter Seller's system, but in no event shall such gas be delivered at a pressure exceeding the maximum authorized operating pressure or such other pressure as Seller permits at the Point(s) of Receipt.

ARTICLE XI

Miscellaneous

     11.1     This Agreement shall bind and benefit the successors and assigns of the respective parties hereto; provided however, neither party shall assign this Agreement or any of its rights or obligations hereunder without first obtaining the written consent of the other party.

     11.2     No waiver by either party of any one or more defaults by the other in the performance of any provisions of this Agreement shall operate or be construed as a waiver of any future defaults of a like or different character.

     11.3     This Agreement includes Exhibits "A", "B" and "C", which are incorporated fully herein and made a part hereof.

     11.4     Modifications to this Agreement shall not become effective except by execution of an amendment thereto.

     11.5     This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, without recourse to the law governing conflicts of laws, and to all present and future valid laws with respect to the subject matter, including present and future orders, rules and regulations of duly constituted governmental authorities.

ARTICLE XII

Superseding Prior Service Agreements

     12.1     This Agreement, on its effective date, supersedes and cancels the following Service Agreement(s) between Seller and Buyer:   None

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers or representatives effective as of the date first written above.

SELLER	BUYER
EASTERN SHORE NATURAL GAS COMPANY	NUI CORPORATION
By: /S/ STEPHEN C. THOMPSON	By: /S/ THOMAS E. SMITH
Title: President	Title: Director of Energy Planning

(To be attested by the Corporate Secretary
if not signed by an officer of the company)

Attested By:	Attested By:/S/ Joyce M. Fajnor
Title:	Title: Assistant Secretary
Date:	Date: May 5, 2000

EX-3.2 6 exhibit3-2.htm

Exhibit 3.2

NUI Corporation

Incorporated Under the Laws of the

State of New Jersey

AMENDED AND RESTATED BY-LAWS

Adopted as of March 02, 2001

ARTICLE I

OFFICES

     The principal office of the Company shall be located in the State of New Jersey. The Board of Directors may change the location of the principal office of the Company and may from time to time designate other offices at such other places, either within or without the State of New Jersey, as the business of the Company may require.

ARTICLE II

SHAREHOLDERS

     Section 1. Annual Meeting: The Annual Meeting of Shareholders for the election of Directors and the transaction of any other business as may properly come before such meeting shall be held at such place as shall be designated by the Board of Directors, on the fourth Tuesday of January of each year at the hour of 10:30 A.M., or on such other day at such time as shall be designated by the Board of Directors. If said day be a legal holiday, said meeting shall be held at the same hour on the next succeeding business day.

     Section 2. Special Meetings: Special Meetings of the Shareholders may be called only by the President of the Company or by the Board of Directors or as otherwise required by law. Special Meetings shall be held at such time and place as shall from time to time be designated by the Board of Directors and stated in the notice of such meeting. At a Special Meeting no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting.

     Section 3. Notice of Meetings: Written notice of the place, date and hour of any Shareholders' meeting, whether annual or special, and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be given to each Shareholder entitled to vote thereat, by mailing the same to the Shareholder at the address of the Shareholder that appears upon the records of the Company not less than ten (10) nor more than sixty (60) days prior to the date of such meeting. Notice of any adjourned meeting need not be given other than by announcement at the meeting so adjourned, unless otherwise ordered in connection with such adjournment. Such further notice, if any, shall be given as may be required by law.

     Section 4. Waiver of Notice: A written waiver of notice signed by the person entitled to notice, whether before or after the meeting, shall be deemed equivalent to notice. Attendance of a Shareholder at a meeting shall constitute a waiver of notice of such meeting, except when a Shareholder attends a meeting and, prior to the conclusion thereof, objects to the transaction of any business on the grounds that proper notice of the meeting was not given.

     Section 5. Quorum: Any number of Shareholders, together holding at least a majority of the capital stock of the Company issued and outstanding and entitled to vote, present in person or represented by proxy at any meeting duly called, shall constitute a quorum for all purposes at a meeting of Shareholders except as may otherwise be provided by law.

     Section 6. Adjournment of Meetings: If at the time for which a meeting of Shareholders has been called less than a quorum is present, the meeting may be adjourned to another time or place by a majority vote of the Shareholders present in person or by proxy and entitled to vote thereat, without notice other than by announcement at the meeting except as may otherwise be required by law. At any adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally called.

     Section 7. Voting: Each Shareholder entitled to vote at a meeting of the Shareholders shall be entitled to one vote for each share of stock registered in such Shareholder's name on the books of the Company on the date fixed as the record date for the determination of its Shareholders entitled to vote. In accordance with the New Jersey Business Corporation Act, each Shareholder entitled to vote at a meeting of Shareholders may authorize another person or persons to act for him by proxy, duly appointed by instrument in writing subscribed by such Shareholder. Said proxy shall not be valid for more than eleven (11) months unless a longer time is expressly provided therein. At all meetings of Shareholders all matters shall be determined by a majority vote of the Shareholders entitled to vote thereat present in person or represented by proxy except as otherwise provided by law, the Certificate of Incorporation or these By-Laws.

     Section 8. Notice Of Shareholder Nominations And Proposed Business:

(1)     At any annual meeting of the Shareholders, (i) nominations for the election of directors and (ii) business to be brought before any such Shareholders' meeting may only be made or proposed (a) pursuant to the Company's notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any Shareholder of the Company who is a Shareholder of record at the time of giving of the notice provided for in this By-law, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this By-law.

(2)     Any Shareholder may nominate one or more persons for election as directors at a Shareholders' meeting or propose business to be brought before a Shareholders' meeting, or both, pursuant to clause (c) of paragraph 1 of this By-law, only if the Shareholder has given timely notice thereof in proper written form to the Secretary of the Company. To be timely, a Shareholder's notice must be delivered to or mailed and received at the principal executive offices of the Company not less than 90 days nor more than 120 days prior to the Shareholders' meeting; provided, however, that if less than 100 days' notice or other prior public disclosure of the date of the meeting is given or made to the Shareholders, notice by the Shareholder to be timely must be received no later than the close of business on the 10th day following the earlier of the day on which notice of the date of the meeting was mailed or other public disclosure was made. To be in proper written form a Shareholder's n otice to the Secretary shall set forth as to each matter the Shareholder proposes to bring before the meeting:

(a) a brief description of the business proposed and/or persons nominated, as applicable, and the reasons for proposing such business or making such nomination;

(b) the name and address, as they appear on the Company's books, of the Shareholder proposing such business or making such nomination, and the name and address of the beneficial owner, if any, on whose behalf the proposal is made;

(c) the class or series and number of shares of the Company which are owned beneficially and of record by such Shareholder of record and by the beneficial owner, if any, on whose behalf the proposal is made;

(d) with respect to any nomination, (i) a description of all arrangements and understandings between the Shareholder proposing such nomination and each nominee and any other person or persons (naming such person or persons) in connection with the nomination or nominations are to be made, (ii) the name, age, business address and residence address of such nominee, (iii) the class or series and number of shares of capital stock of the Company owned beneficially and of record by such nominee, (iv) the written consent of the proposed nominee to being named in the solicitation material and to serving as a director if elected and (v) a representation that such Shareholder intends to appear in person or by proxy at the meeting to nominate the persons named in the notice;

(e) with respect to any business to be proposed, (i) a description of all arrangements or understandings between the Shareholder proposing such business and any other person or persons (naming such person or persons) in connection with the proposal of such business by such Shareholder and any material interest of such Shareholder in such business and (ii) a representation that such Shareholder intends to appear in person or by proxy at the meeting to bring such business before the meeting; and

(f) such other information regarding each nominee or matter of business to be proposed as would be required to be included in solicitations of proxies, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.

 (3)     Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at any Shareholders' meeting and no Shareholder may nominate any person for election at any Shareholders' meeting except in accordance with the procedures set forth in this By-law. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that any proposed business and/or any proposed nomination for election as director was not properly brought or made before the meeting or made in accordance with the procedures prescribed by these By-laws, and if he should so determine, he shall so declare to the meeting and any such proposed business or proposed nomination for election as director not properly brought before the meeting or made shall not be transacted or considered.

ARTICLE III

DIRECTORS

     Section 1. Qualifications: Directors need not be Shareholders and need not be citizens of the United States or residents of New Jersey.

     Section 2. Duties and Powers: The business and affairs of the Company shall be managed by or under the direction of the Board of Directors, and, unless the vote of a greater number is required by law, the Certificate of Incorporation or these By-Laws, the vote of the majority of the Directors present at a meeting shall be the act of the Board of Directors in the transaction of business, provided a quorum is present. The Directors may exercise all such powers of the Company and do all such lawful acts and things as they may deem proper and as are consistent with law, the Certificate of Incorporation and these By-Laws.

     Section 3. Election: Directors shall be elected by the Shareholders at the Annual Meeting of Shareholders to hold office for the term elected and until their respective successors are elected and qualified or until their earlier resignation or removal. If the election of Directors shall not be held on the day designated by or pursuant to authority granted in these By-Laws, the Directors shall cause the same to be held as soon thereafter as may be convenient.

     (a)     Except as otherwise fixed pursuant to Article VI of the Certificate of Incorporation relating to the rights of the holders of any class or series of preferred stock having a preference over the common stock as to dividends or upon liquidation, or to elect additional Directors under specified circumstances, the Board of Directors shall consist of not less than eight (8) nor more than twenty-five (25) persons; provided, however, that the authorized number of Directors may be changed to any number between eight (8) and twenty-five (25) from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized Directors (whether or not there exist any vacancies in previously authorized Directorships at the time any such resolution is presented to the Board for adoption).

     (b)     The Directors (other than those who may be elected by the holders of any class or series of preferred stock having a preference over common stock as to dividends or upon liquidation) shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, one class to hold office initially for a term expiring at the annual meeting of Shareholders to be held in 1992, another class to hold office initially for a term expiring at the annual meeting of Shareholders to be held in 1993, and another class to hold office initially for a term expiring at the annual meeting of Shareholders to be held in 1994, with the members of each class to hold office until their successors are elected and qualified. At each annual meeting of the Shareholders of the Company, the successors to the class of Directors whose term expires at that meeting shall be elected to hold office f or a term expiring at the annual meeting of Shareholders held in the third year following the year of their election. The election of Directors need not be by ballot.

     (c)     Except as otherwise fixed pursuant to the provisions of Article VI of the Certificate of Incorporation relating to the rights of the holders of any class or series of preferred stock having a preference over the common stock as to dividends or upon liquidation to elect Directors under specified circumstances, newly created Directorships resulting from any increase in the authorized number of Directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the Directors then in office, though less than a quorum of the Board of Directors. If any applicable provision of New Jersey law expressly confers power on Shareholders to fill such a Directorship at a special meeting of Shareholders, such a Directorship may be filled at such a meeting only by the affirmative vote of at least 75 percent of the then-o utstanding shares of the voting stock, voting together as a single class (it being understood that for all purposes of this Section 3 and compliance with Article XI of the Certificate of Incorporation, each share of the voting stock shall have the number of votes granted to it pursuant to Article VI of the Certificate of Incorporation or any resolution or resolutions of the Board of Directors pursuant to authority expressly granted to and vested in it by the provisions of Article VI of the Certificate of Incorporation). Any Director elected in accordance with the two preceding sentences shall hold office for the remainder of the full term of the class of Directors in which the new Directorship was created or the vacancy occurred and until such Director's successor shall have been elected and qualified. No decrease in the number of authorized Directors constituting the entire Board of Directors shall shorten the term of any incumbent Director.

     (d)     Subject to the rights of the holders of any class or series of preferred stock having preference over the common stock as to dividends or upon liquidation or to elect Directors under specified circumstances, any Director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 75 percent of all of the then-outstanding shares of the voting stock, voting together as a single class. The Company must notify the Director of the grounds of his impending removal and the Director shall have an opportunity, at the expense of the Company, to present his defense to the Shareholders by a statement which accompanies or precedes the Company's solicitation of proxies to remove him.

     Section 4. Resignation of Directors: Any Director may resign at any time upon written notice to the Company. Such resignation shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Chairman of the Board, if any, the Chief Executive Officer, if any, the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective, unless so specified therein.

     Section 5. Meetings: The Board of Directors shall hold an annual meeting for the purpose of organization and the transaction of any business immediately after the Annual Meeting of the Shareholders, provided a quorum is present. Other regular meetings may be held at such times as may be determined from time to time by resolution of the Board of Directors. Special meetings of the Board of Directors may be called at any time by the Chairman of the Board, if any, the Chief Executive Officer, if any, by the President or by a majority of the Directors then in office, though less than a quorum of the Board of Directors.

     Section 6. Notice and Place of Meetings: Regular meetings of the Board of Directors may be held at such time and place as shall be designated by resolution of the Board of Directors. No notice need be given of any regular meeting of the Board. Notice of any special meeting specifying the time and place of such meeting and the business to be transacted thereat shall be served upon each Director by mail at his residence or usual place of business at least two (2) days before the day on which such meeting is to be held, or sent to him at such place by telegraph, cable, electronic communication or transmitted by way of a guaranteed overnight courier service, or delivered personally or by telephone not later than 24 hours prior to the time at which the meeting is to be held. No notice of the annual meeting shall be required if held immediately after the annual meeting of the Shareholders and if a quorum is present. Notice of a meeting need not be given to an y Director who submits a signed waiver of notice before or after the meeting, nor to any Director who attends the meeting without protesting, prior to the conclusion thereof, the lack of notice.

     Section 7. Business Transacted at Meetings: Any business may be transacted and any corporate action may be taken at any regular meeting of the Board of Directors at which a quorum shall be present, whether such business or proposed action be stated in the notice of such meeting or not, unless special notice of such business or proposed action shall be required by law.

     Section 8. Quorum: A majority of the entire Board of Directors then in office shall be necessary to constitute a quorum for the transaction of business. If a quorum is not present at a meeting of the Board of Directors, a majority of the Directors present may adjourn the meeting to such time and place as they may determine without notice other than announcement at the meeting until enough Directors to constitute a quorum shall attend. When a quorum is once present to organize a meeting, it shall not be broken by the subsequent withdrawal of any Directors.

     Section 9. Loans to and Guarantees for Directors: The Corporation may lend money to, or guarantee any obligation of, or otherwise assist, any Officer or other employee of the Corporation or of any subsidiary who is also a Director of the Corporation whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the Corporation and such loan, guarantee or other assistance is authorized by a majority of the entire Board of Directors. The Director who is to be loaned money, or whose obligation is to be guaranteed, or who is otherwise to be assisted by the Corporation, shall abstain from voting on such authorization.

     Section 10. Action Without A Meeting: Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board or such committee, as the case may be, consent in writing to the adoption of a resolution authorizing the action. Such resolutions and the written consents thereto by the members of the Board or a committee shall be filed with the minutes of the proceedings of the Board or such committee as the case may be.

     Section 11. Participation By Telephone: Any one or more members of the Board or any committee thereof may participate in a meeting of the Board or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.

     Section 12. Compensation: The Board of Directors may establish by resolution reasonable compensation of all Directors for services to the Company as Directors, including a fixed fee, if any, incurred in attending each meeting. Nothing herein contained shall preclude any Director from serving the Company in any other capacity, as an officer, agent or otherwise, and receiving compensation therefore.

ARTICLE IV

COMMITTEES

     Section 1. Executive Committee: The Board of Directors, by resolution passed by a majority of the entire Board then in office, may designate five (5) or more Directors to constitute an Executive Committee to hold office at the pleasure of the Board, which Committee shall, during the intervals between meetings of the Board of Directors, have and exercise all of the powers of the Board of Directors in the management of the business and affairs of the Company, subject only to such restrictions or limitations as the Board of Directors may from time to time specify, or as limited by the New Jersey Business Corporation Act, and shall have power to authorize the seal of the Company to be affixed to all instruments which may require it. Any member of the Executive Committee may be removed at any time, with or without cause, by a resolution of a majority of the entire Board of Directors then in office. Any person ceasing to be a Director shall ipso fac to cease to be a member of the Executive Committee. Any vacancy in the Executive Committee occurring from any cause whatsoever may be filled from among the Directors by a resolution of a majority of the entire Board of Directors then in office.

     Section 2. Other Committees: Other committees, whose members are to be Directors, may be appointed by the Board of Directors, which members shall hold office for such time and have such powers and perform such duties as may from time to time be assigned to them by the Board of Directors. Any member of such a committee may be removed at any time, with or without cause, by a majority of the Board of Directors then in office. Any vacancy in a committee occurring from any cause whatsoever may be filled by a majority of the Board of Directors then in office.

     Section 3. Resignation: Any member of a committee may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or, if no time be specified, at the time of its receipt by the Chairman of the Board, if any, the Chief Executive Officer, if any, the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective unless so specified therein.

     Section 4. Quorum: A majority of the members of a committee shall constitute a quorum. The act of a majority of the members of a committee present at any meeting at which a quorum is present shall be the act of such committee. The members of a committee shall act only as a committee, and the individual members thereof shall have no powers as such.

    Section 5. Record of Proceedings: Each committee shall keep a record of its acts and proceedings and shall report the same to the Board of Directors at its next meeting following such Committee meeting.

     Section 6. Organization, Meetings. Notices: A committee may hold its meetings at the principal office of the Company, or at any other place upon which a majority of the committee may at any time agree. Each committee may make such rules as it may deem expedient for the regulation and carrying on of its meetings and proceedings. Notice of a special meeting of such Committee may be given by the Secretary or by the chairman of the Committee and shall be sufficiently given if mailed to each member at his residence or usual place of business at least five (5) days before the day on which the meeting is to be held, or if sent to him at such place by telegraph, cable, electronic communication or delivered personally or by telephone not later than 24 hours prior to the time at which the meeting is to be held.

     Section 7. Compensation: The members of any committee shall be entitled to such compensation as may be allowed them by resolution of the Board of Directors.

ARTICLE V

OFFICERS

     Section 1. Number: The Officers of the Company shall be a President, a Secretary and a Treasurer and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article V. The Board of Directors, in its discretion, may also elect a Chairman of the Board of Directors or a Chief Executive Officer or both.

     Section 2. Election. Term of Office and Qualifications: The Officers, except as provided in Section 3 of this Article V, shall be elected annually by the Board of Directors immediately after the Annual Meeting of Shareholders. Each such Officer shall, except as herein otherwise provided, hold office until the election and qualification of his successor or until his earlier resignation or removal. Any two or more offices may be held by the same person, except the offices of the President and Secretary.

     Section 3. Other Officers: Other Officers, including, but not limited to, one or more Vice-Chairmen, divisional Officers, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers, may from time to time be appointed by the Board of Directors, which other officers shall have such powers and perform such duties as may be assigned to them by the President unless otherwise directed by the Board. All such Officers shall be corporate Officers of the Company with the power to bind the Company by acts within the scope of their authority.

     Section 4. Removal of Officers: Any Officer of the Company may be removed from office, with or without cause, by a vote of a majority of the Board of Directors then in office. The removal of an Officer shall be without prejudice to his contract rights, if any. Election or appointment of an Officer shall not of itself create contract rights.

     Section 5. Resignation: Any Officer of the Company may resign at any time. Such resignation shall be in writing and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Secretary. The acceptance of a resignation shall not be necessary in order to make it effective, unless so specified therein.

     Section 6. Filling of Vacancies: A vacancy in any office shall be filled by the Board of Directors.

     Section 7. Compensation: The compensation of the Officers shall be fixed by the Board of Directors, or by any committee or Officer upon whom power in that regard may be conferred by the Board of Directors.

     Section 8. Chairman of the Board of Directors: The Chairman of the Board of Directors, if one is elected, shall be a Director and shall preside at all meetings of the Board of Directors and of the Shareholders at which the Chairman shall be present. In the absence of the Chairman of the Board, the Director or Officer designated by the Chairman shall perform and carry out the functions of the Chairman of the Board.

     Section 9. President: The President shall, subject only to the direction and control of the Board of Directors or the Executive Committee, have responsibility for the general management of the business affairs and property of the Company, and of its several Officers, and shall, subject only as aforesaid, have and exercise all such powers and discharge such duties as usually pertain to the office of President. The President shall perform such duties as may be assigned from time to time by the Board of Directors.

     Section 10. Chief Executive Officer: The Chief Executive Officer, if one is elected, shall have such duties and responsibilities and shall report to such persons as the Board of Directors shall determine from time to time.

     Section 11. Secretary: The Secretary shall attend all meetings of the Board of Directors and of the Shareholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for any committee appointed by the Board. The Secretary shall give or cause to be given notice of all meetings of Shareholders and special meetings of the Board of Directors and shall perform such other duties as may be prescribed by the President or the Board of Directors. The Secretary shall keep in safe custody the seal of the Company and affix it to any instrument when so authorized by the Board of Directors. In the absence of a Secretary, an Assistant Secretary may act in the Secretary's place.

     Section 12. Treasurer: The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all monies and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Company as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and Directors at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Company. The Treasurer may be required to give bond for the faithful discharge of his duties. In the absence of a Treasurer, an Assistant Treasurer may act in his place. The Treasurer shall perform such other duties as may be prescribed by the President or the Board of Directors.

ARTICLE VI

CAPITAL STOCK

     Section 1. Issue of Certificates of Stock: Certificates of capital stock shall be in such form as shall be approved by the Board of Directors. The Board of Directors may also provide that some or all of the shares of any class or series shall be represented by uncertificated shares. Certificated shares shall be numbered in the order of their issue, and shall be signed, either manually or by facsimile signature, by either the Chairman of the Board or the President or the Secretary and the seal of the Company or a facsimile thereof shall be impressed, affixed or reproduced thereon. In case any Officer or Officers who shall have signed any such certificate or certificates shall cease to be such Officer or Officers of the Company, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Company, such certificate or certificates may nevertheless be adopted by the Company and be issued and delivered as though the person or persons who signed such certificate or certificates have not ceased to be such Officer or Officers of the Company.

     Section 2. Registration and Transfer of Shares: The name of each person owning a share of the capital stock of the Company shall be entered on the books of the Company together with the number of shares held by such person, the numbers of the certificates covering such shares and the dates of issue of such certificates. The shares of stock of the Company shall be transferable on the books of the Company by the holders thereof in person, or by their duly authorized attorneys or legal representatives, on surrender and cancellation of certificates for a like number of shares, accompanied by an assignment of power of transfer endorsed thereon or attached thereto, duly executed, and with such proof of the authenticity of the signature as the Company or its Agents may reasonably require. A record shall be made of each transfer.

     The Board of Directors may make other and further rules and regulations concerning the transfer and registration of certificates of stock.

     Section 3. Lost, Destroyed and Mutilated Certificates: The holder of any stock of the Company shall immediately notify the Company of any loss, theft, destruction or mutilation of the certificates thereof. The Company may issue a new certificate of stock in the place of any certificate theretofore issued by it alleged to have been lost, stolen or destroyed, and the Board of Directors or its agent may, in its discretion, require the owner of the lost, stolen or destroyed certificate, or his legal representatives, to give the Company a bond, in such sum not exceeding double the value of the stock and with such surety or sureties as they may require, to indemnify it against any claim that may be made against it in connection with the issue of such new certificate.

ARTICLE VII

MISCELLANEOUS PROVISIONS

Section 1. Fiscal Year: The fiscal year of the Company shall commence on the first day of October and end on the last day of September.

     Section 2. Corporate Seal: The corporate seal shall be in such form as approved by the Board of Directors and may be altered at its pleasure. The corporate seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

     Section 3. Notices: Except as otherwise expressly provided, any notice required by these By-Laws to be given shall be sufficient if given by depositing the same in a post office or letter box in a sealed wrapper with first-class postage prepaid thereon and addressed to the person entitled thereto at his address, as the same appears upon the books of the Company, or by electronically communicating the notice to such person at such address or by transmitting the same by way of a guaranteed overnight courier service; and such notice shall be deemed to be given at the time it is mailed, electronically communicated or so transmitted.

     Section 4. Contracts, Checks, Drafts: The Board of Directors, except as may otherwise be required by law, may authorize any Officer or Officers, Agent or Agents, in the name of and on behalf of the Company to enter into any contract or execute or deliver any instrument. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Company, shall be signed by such Officer or Officers, Agent or Agents of the Company, and in such manner as shall be designated from time to time by resolution of the Board of Directors.

     Section 5. Deposits: All funds of the Company shall be deposited from time to time to the credit of the Company in such bank or banks, trust companies or other depositories as the Board of Directors may select, and, for the purpose of such deposit, checks, drafts, warrants and other orders for the payment of money which are payable to the order of the Company, may be endorsed for deposit, assigned and delivered by any Officer of the Company, or by such Agents of the Company as the Board of Directors, the Chairman of the Board, if any, the Chief Executive Officer, if any, or the President may authorize for that purpose.

     Section 6. Voting Stock of Other Companies: Except as otherwise ordered by the Board of Directors or the Executive Committee, the Chairman of the Board, if any, the Chief Executive Officer, if any, or the President shall have full power and authority on behalf of the Company to attend and to act and to vote at any meeting of the Shareholders of any corporation of which the Company is a shareholder and to execute a proxy to any other person to represent the Company at any such meeting, and at any such meeting the Chairman of the Board, if any, the Chief Executive Officer, if any, or the President or the holder of any such proxy, as the case may be, shall possess and may exercise any and all rights and powers incident to ownership of such stock and which, as owner thereof, the Company might have possessed and exercised if present. The Board of Directors or the Executive Committee may from time to time confer like powers upon any other person or persons.< /P>

ARTICLE VIII

AMENDMENTS

     Except as set forth in the final sentence of this ARTICLE VIII, these By-Laws may be altered, amended or repealed by the affirmative vote of a majority of the entire Board of Directors then in office. These By-Laws may also be altered, amended or repealed by the Shareholders, but only by an affirmative vote of the holders of at least 75 percent of all the then-outstanding shares of the voting stock, voting together as a single class. Any By-Law may provide that it may only be altered, amended or repealed by the affirmative vote of the holders of at least 75 percent of all the then-outstanding shares of the voting stock, voting together as a single class, in which event such By-Law may only be altered, amended or repealed by such vote.

EX-2.5 7 exhibit2-5.htm

Exhibit 2.5

AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION

BY AND AMONG

NUI CORPORATION,

VGC ACQUISITION, INC.

AND

VIRGINIA GAS COMPANY

Dated as of March 28, 2001

TABLE OF CONTENTS

			PAGE
ARTICLE I		DEFINITIONS	8
	Section 1.1	Agreement	8
	Section 1.2	Average NUI Holding Price	8
	Section 1.3	Averaging Period	8
	Section 1.4	Berenson	9
	Section 1.5	Certificate of Merger	9
	Section 1.6	Certificates	9
	Section 1.7	CIBC	9
	Section 1.8	Closing, Closing Date	9
	Section 1.9	Code	9
	Section 1.10	Confidentiality Agreement	9
	Section 1.11	Contract	9
	Section 1.12	Conversion Ratio	9
	Section 1.13	Determination Date	9
	Section 1.14	DGCL	10
	Section 1.15	Easement	10
	Section 1.16	Effective Time	10
	Section 1.17	Environmental Laws	10
	Section 1.18	ERISA	10
	Section 1.19	Exchange Act	10
	Section 1.20	Exchange Agent	10
	Section 1.21	FERC	10
	Section 1.22	Funded Debt	10
	Section 1.23	GAAP	10
	Section 1.24	Governmental Authority	10
	Section 1.25	Hazardous Materials	11
	Section 1.26	HSR Act	11
	Section 1.27	IRS	11
	Section 1.28	Joint Proxy Statement/Prospectus	11
	Section 1.29	Knowledge of NUI Holding	11
	Section 1.30	Knowledge of Virginia Gas	11
	Section 1.31	Law	11
	Section 1.32	Material Adverse Effect	11
	Section 1.33	Merger	12
	Section 1.34	Merger Subsidiary	12
	Section 1.35	Nasdaq	12
	Section 1.36	NUI	12
	Section 1.37	NUI Common Stock	12
	Section 1.38	NUI Holding	12
	Section 1.39	NUI Holding Benefit Plans	12
	Section 1.40	NUI Holding Common Stock	12
	Section 1.41	NUI Holding Companies	12
	Section 1.42	NUI Holding ERISA Plan	12
	Section 1.43	NUI Holding Required Consents	12
	Section 1.44	NUI Holding SEC Reports	13
	Section 1.45	NUI Reorganization	13
	Section 1.46	NYSE	13
	Section 1.47	Original Merger Agreement	13
	Section 1.48	Other Virginia Gas Interested Person	13
	Section 1.49	Out of Pocket Expenses	14
	Section 1.50	Partnership, Partnerships	14
	Section 1.51	Permits	14
	Section 1.52	Petroleum and Natural Gas Products	14
	Section 1.53	PUHCA	14
	Section 1.54	Registration Statement	14
	Section 1.55	SEC	14
	Section 1.56	Securities Act	14
	Section 1.57	Stockholder Meeting	15
	Section 1.58	Subsidiary, Subsidiaries	15
	Section 1.59	Superior Proposal	15
	Section 1.60	Tax Returns	15
	Section 1.61	Taxes	15
	Section 1.62	Virginia Gas	16
	Section 1.63	Virginia Gas Affiliate	16
	Section 1.64	Virginia Gas Common Stock	16
	Section 1.65	Virginia Gas Companies	16
	Section 1.66	Virginia Gas Partnerships	16
	Section 1.67	Virginia Gas Required Consents	16
	Section 1.68	Virginia Gas SEC Reports	16
	Section 1.69	Virginia Gas subsidiary	17
	Section 1.70	VSCC	17
	Section 1.71	Warrants, Warrant Agreements	17
ARTICLE II		THE MERGER	17
	Section 2.1	The Merger	17
	Section 2.2	Exchange of Certificates	17
	Section 2.3	Virginia Gas Stock Options and Warrants	21
	Section 2.4	Virginia Gas Actions	22
ARTICLE III		STOCKHOLDER APPROVAL, CLOSING	23
	Section 3.1	Stockholder Approval	23
	Section 3.2	Time and Place of Closing	23
ARTICLE IV		REPRESENTATIONS AND WARRANTIES OF NUI HOLDING	24
	Section 4.1	Organization and Authority of the NUI Companies	24
	Section 4.2	Capitalization	24
	Section 4.3	Authority Relative to this Agreement	25
	Section 4.4	Consents and Approvals, No Violations	25
	Section 4.5	Reports	27
	Section 4.6	Absence of Certain Events	28
	Section 4.7	Joint Proxy Statement/Prospectus	29
	Section 4.8	Litigation	29
	Section 4.9	Employee Benefit Plans	30
	Section 4.10	Tax Matters	31
	Section 4.11	Compliance with Laz	32
	Section 4.12	Fees and Expenses of Brokers and Others	32
	Section 4.13	Accuracy of Information	33
	Section 4.14	Absence of Undisclosed Liabilities	33
	Section 4.15	Merger Subsidiary	33
ARTICLE VI		REPRESENTATIONS AND WARRANTIES OF VIRGINIA GAS	34
	Section 5.1	Organization and Authority of the Virginia Gas Companies	34
	Section 5.2	Capitalization	34
	Section 5.3	Authority Relative to this Agreement	36
	Section 5.4	Consents and Approvals, No Violations	37
	Section 5.5	Reports	38
	Section 5.6	Absence of Certain Events	39
	Section 5.7	Joint Proxy Statement/Prospectus	41
	Section 5.8	Litigation	42
	Section 5.9	Title to and Sufficiency of Assets, Easements	42
	Section 5.10	Contracts	43
	Section 5.11	Labor Matters	45
	Section 5.12	Employee Benefit Plans	46
	Section 5.13	Tax Matters	48
	Section 5.14	Compliance with Law	51
	Section 5.15	Transactions With Affiliates	51
	Section 5.16	Environmental Conditions	52
	Section 5.17	Insurance	56
	Section 5.18	Intellectual Property	56
	Section 5.19	Fees and Expenses of Brokers and Others	57
	Section 5.20	Regulation as Utility	57
	Section 5.21	FERC Jurisdiction	58
	Section 5.22	Accuracy of Information	58
	Section 5.23	Absence of Undisclosed Liabilities	58
	Section 5.24	Opinion of Financial Advisor	59
	Section 5.25	Virginia Gas Year 2000 Compliance	59
	Section 5.26	Vote Required	59
	Section 5.27	Section 203 of the DGCL, State Takeover Statutes	60
	Section 5.28	Virginia Gas Affiliates and Partnerships	60
	Section 5.29	Certain Agreements	61
ARTICLE VI		COVENANTS	61
	Section 6.1	Conduct of the Businesses of NUI Holding and Virginia Gas	61
	Section 6.2	No Solicitation	65
	Section 6.3	The Registration Statement, Listing	67
	Section 6.4	Access to Information, Confidentiality Agreement	69
	Section 6.5	Best Efforts	70
	Section 6.6	Consents	71
	Section 6.7	Public Announcements	71
	Section 6.8	Affiliates	72
	Section 6.9	Letter of Virginia Gas' Accountants	72
	Section 6.10	Letter of NUI's Accountants	72
	Section 6.11	Indemnification, Insurance	72
	Section 6.12	PUHCA and the Natural Gas Act	73
ARTICLE VII		CONDITIONS PRECEDENT TO CONSUMMATION OF THE MERGER	73
	Section 7.1	Conditions Precedent to Each Party's Obligation to Effect the Merger	73
	Section 7.2	Conditions Precedent to Obligations of Virginia Gas	75
	Section 7.3	Conditions Precedent to Obligations of NUI Holding	77
ARTICLE VIII		TERMINATION, AMENDMENT, WAVER	79
	Section 8.1	Termination	79
	Section 8.2	Effect of Termination	81
	Section 8.3	Termination Fee	81
	Section 8.4	Amendment	83
	Section 8.5	Extension, Waver	83
ARTICLE IX		MISCELLANEOUS	83
	Section 9.1	Entire Agreement, Assignment	83
	Section 9.2	Notices	83
	Section 9.3	Governing Law	84
	Section 9.4	Descriptive Headings	85
	Section 9.5	Parties in Interest	85
	Section 9.6	Counterparts	85
	Section 9.7	Specific Performances	85
	Section 9.8	Fees and Expenses	85
	Section 9.9	Severability	86

EXHIBITS
Exhibit 1.5	Certificate of Merger
Exhibit 1.29	Knowledge of NUI Holding
Exhibit 1.30	Knowledge of Virginia Gas
Exhibit 1.48	Other Virginia Gas Interested Persons
Exhibit 1.63	Virginia Gas Affiliates
Exhibit 1.66	Virginia Gas Partnerships
Exhibit 1.69	Virginia Gas Subsidiaries
Exhibit 4.4	NUI Holding Required Consents
Exhibit 4.6	Adverse Changes Affecting NUI Holding
Exhibit 4.8	NUI Holding Litigation
Exhibit 4.10	Tax Matters Concerning NUI Holding
Exhibit 5.2	Virginia Gas Options, Warrants, Subscriptions or Other Rights
Exhibit 5.4	Virginia Gas Required Consents
Exhibit 5.5	Virginia Gas Reports
Exhibit 5.6	Adverse Changes Affecting Virginia Gas
Exhibit 5.8	Virginia Gas Litigation
Exhibit 5.9	Title to and Sufficiency of Assets; Easements
Exhibit 5.10	Virginia Gas Contracts
Exhibit 5.11	Virginia Gas Labor Matters
Exhibit 5.12	Virginia Gas Benefit Plans
Exhibit 5.13	Tax Matters Concerning Virginia Gas
Exhibit 5.15	Transactions With Affiliates by Virginia Gas
Exhibit 5.16	Environmental Conditions
Exhibit 5.20	Virginia Gas Regulated Entities
Exhibit 5.23	Absence of Undisclosed Liabilities
Exhibit 5.28	Virginia Gas Affiliates and Partnerships
Exhibit 6.4	Environmental Assessments
Exhibit 6.8	Form of Virginia Gas Affiliate Letter

AMENDED AND RESTATED

AGREEMENT AND PLAN OF REORGANIZATION

     AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of March 28, 2001, by and among NUI CORPORATION (formerly NUI Holding Company), a New Jersey corporation ("NUI HOLDING"), VGC ACQUISITION, INC., a Delaware corporation and wholly owned subsidiary of NUI Holding ("Merger Subsidiary") and VIRGINIA GAS COMPANY, a Delaware corporation ("Virginia Gas").

RECITALS

     WHEREAS, the respective Boards of Directors of NUI Utilities, Inc. (formerly NUI Corporation), a New Jersey corporation and wholly-owned subsidiary of NUI Holding ("NUI"), and Virginia Gas have previously approved the merger of Merger Subsidiary with and into Virginia Gas pursuant to the Agreement and Plan of Reorganization, dated as of June 13, 2000, by and among NUI, Merger Subsidiary and Virginia Gas (the "Original Merger Agreement"); and

     WHEREAS, Section 6.16 of the Original Merger Agreement provides that, in the event the transactions contemplated by NUI Holding's Registration Statement on Form S-4 (Registration No. 333-30092) (the "NUI Reorganization") have been consummated prior to the Effective Time (as defined in the Original Merger Agreement), NUI, Virginia Gas and Merger Subsidiary shall (i) amend and restate the Original Merger Agreement in its entirety to provide for the substitution of NUI Holding for NUI therein, and shall amend any other provisions thereof that may be required to give full effect to the transactions contemplated therein, and (ii) at the election of NUI (which election NUI has exercised), shall amend and restate the Original Merger Agreement in its entirety to provide for the merger of Virginia Gas with and into Merger Subsidiary, with Merger Subsidiary being the surviving corporation in such merger; and

     WHEREAS, the NUI Reorganization was consummated on March 1, 2001, and the parties hereto desire to amend and restate the Original Merger Agreement in its entirety in accordance with Section 6.16 of the Original Merger Agreement; and

     WHEREAS, pursuant to the Merger (as hereinafter defined), each outstanding share of Virginia Gas Common Stock (as hereinafter defined) will be converted into shares of NUI Holding Common Stock (as hereinafter defined) in accordance with the terms hereof; and

     WHEREAS, for Federal income tax purposes, it is intended that the transactions contemplated by this Agreement shall constitute a reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

     NOW, THEREFORE, in consideration of the premises, which are incorporated into and made part of this Agreement, and of the mutual representations, warranties, covenants, agreements and conditions set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1  Agreement. "Agreement" shall mean this Amended and Restated Agreement and Plan of Reorganization, together with the Certificate of Merger and other Exhibits attached hereto, as amended from time to time in accordance with the terms hereof.

Section 1.2  Average NUI Holding Price. "Average NUI Holding Price" shall have the meaning given in Section 2.1 hereof.

Section 1.3  Averaging Period. "Averaging Period" shall have the meaning given in Section 2.1 hereof.

Section 1.4  Berenson. "Berenson" shall mean Berenson Minella & Co., financial advisors to NUI Holding.

Section 1.5  Certificate of Merger. "Certificate of Merger" shall mean the Certificate of Merger of Virginia Gas with and into Merger Subsidiary, in substantially the form attached hereto as Exhibit 1.5.

Section 1.6  Certificates. "Certificates" shall have the meaning given in Section 2.2 hereof.

Section 1.7  CIBC. "CIBC" means CIBC Oppenheimer, financial advisors to Virginia Gas.

Section 1.8  Closing; Closing Date. "Closing" shall mean the closing conference held pursuant to Section 3.2 hereof, and "Closing Date" shall mean the date on which the Closing occurs.

Section 1.9  Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.

Section 1.10  Confidentiality Agreement. "Confidentiality Agreement" shall mean the letter agreement, dated February 1, 2000, between Virginia Gas and NUI.

Section 1.11  Contract. "Contract" shall mean any contract, agreement, lease, license, arrangement, understanding, relationship and commitment, whether written or oral (collectively, "Contracts").

Section 1.12   Conversion Ratio. "Conversion Ratio" shall have the meaning given in Section 2.1 hereof.

Section 1.13  Determination Date. "Determination Date" shall have the meaning given in Section 2.1 hereof.

Section 1.14  DGCL. "DGCL" shall mean the Delaware General Corporation Law, as amended.

Section 1.15  Easement. "Easement" shall mean any easement, right-of-way, permit, servitude, license, leasehold estate and similar rights relating to real property.

Section 1.16  Effective Time. "Effective Time" shall have the meaning given in Section 3.1 hereof.

Section 1.17  Environmental Laws. "Environmental Laws" shall have the meaning given in Section 5.16 hereof.

Section 1.18  ERISA. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.

Section 1.19  Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

Section1.20  Exchange Agent. "Exchange Agent" shall mean the exchange agent for the Virginia Gas Common Stock pursuant to the Merger, as may be reasonably appointed by NUI Holding.

Section 1.21  FERC. "FERC" shall mean the Federal Energy Regulatory Commission.

Section 1.22  Funded Debt. "Funded Debt" shall have the meaning given in Section 6.1 hereof.

Section 1.23  GAAP. "GAAP" shall mean generally accepted accounting principles as in effect in the United States of America at the time of the preparation of the subject financial statement.

Section 1.24  Governmental Authority. "Governmental Authority" shall mean any federal, state, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, or any court, in each case whether of the United States, any of its possessions or territories, or of any foreign nation.

Section 1.25  Hazardous Materials. "Hazardous Materials" shall have the meaning given in Section 5.16 hereof.

Section 1.26  HSR Act. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Section 1.27  IRS. "IRS" shall mean the Internal Revenue Service.

Section 1.28  Joint Proxy Statement/Prospectus. "Joint Proxy Statement/Prospectus" shall mean the Proxy Statement/Prospectus of NUI, NUI Holding and Virginia Gas included in the Registration Statement and distributed to the stockholders of Virginia Gas in connection with the Special Meeting.

Section 1.29  Knowledge of NUI Holding. "Knowledge of NUI Holding" shall mean the actual knowledge, after due inquiry, of those officers of NUI Holding identified on Exhibit 1.29 attached hereto.

Section 1.30  Knowledge of Virginia Gas. "Knowledge of Virginia Gas" shall mean the actual knowledge, after due inquiry, of those officers of Virginia Gas identified on Exhibit 1.30 attached hereto.

Section 1.31  Law. "Law" shall mean any federal, state, provincial, local or other law or governmental requirement of any kind, and the rules, regulations and orders promulgated thereunder.

Section 1.32  Material Adverse Effect. "Material Adverse Effect" shall mean, with respect to any entity or group of entities, a material adverse effect (or any development which, insofar as reasonably can be foreseen, is reasonably likely to have a material adverse effect), on the business, assets, financial or other condition, results of operations or prospects of such entity or group of entities taken as a whole.

Section 1.33  Merger. "Merger" shall have the meaning given in Section 2.1 hereof.

Section 1.34  Merger Subsidiary. "Merger Subsidiary" shall mean VGC Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of NUI Holding.

Section 1.35  Nasdaq. "Nasdaq" shall mean The Nasdaq SmallCap Market

Section 1.36  NUI. "NUI" shall mean NUI Utilities, Inc. (formerly NUI Corporation), a New Jersey corporation.

Section 1.37  NUI Common Stock. "NUI Common Stock" shall mean the common stock, no par value, of NUI.

Section 1.38  NUI Holding. "NUI Holding" shall mean NUI Corporation (formerly NUI Holding Company), a New Jersey corporation.

Section 1.39  NUI Holding Benefit Plans. "NUI Holding Benefit Plans" shall have the meaning given in Section 4.9 hereof.

Section 1.40  NUI Holding Common Stock. "NUI Holding Common Stock" shall mean the common stock, no par value, of NUI Holding.

Section 1.41  NUI Holding Companies. "NUI Holding Companies" shall mean NUI Holding, its Subsidiaries and the Partnerships in which it has an interest.

Section 1.42  NUI Holding ERISA Plan. "NUI Holding ERISA Plan" shall have the meaning given in Section 4.9 hereof.

Section 1.43  NUI Holding Required Consents. "NUI Holding Required Consents" shall have the meaning given in Section 4.4 hereof.

Section 1.44  NUI Holding SEC Reports. "NUI Holding SEC Reports" shall mean (a) NUI's Annual Reports on Form 10-K for the fiscal years ended September 30, 1999, September 30, 1998, and September 30, 1997, and (b) all documents filed by NUI and NUI Holding with the SEC pursuant to Sections 13(a) and 13(c) of the Exchange Act, any definitive proxy statements filed pursuant to Section 14 of the Exchange Act and any report filed pursuant to Section 15(d) of the Exchange Act following the filing of NUI's Annual Report on Form 10-K for the fiscal year ended September 30, 1999.

Section 1.45  NUI Reorganization. "NUI Reorganization" shall have the meaning given in the Recitals hereof.

Section 1.46  NYSE. "NYSE" shall mean The New York Stock Exchange, Inc.

Section 1.47  Original Merger Agreement. "Original Merger Agreement" shall have the meaning given in the Recitals hereof.

Section 1.48  Other Virginia Gas Interested Person. "Other Virginia Gas Interested Person" shall mean (a) any holder of 5% or more of the voting securities of Virginia Gas, (b) any director, officer or employee of any of the Virginia Gas Companies, (c) any person, firm or corporation that directly or indirectly controls, is controlled by or is under common control with any of the Virginia Gas Companies or (d) any member of the immediate family of any of such persons (collectively, "Other Virginia Gas Interested Persons"). For purposes of this Agreement, the phrase "immediate family" shall be the same as the definition found in Rule 16a-1(e) of the Securities Exchange Act of 1934. All of the Other Virginia Gas Interested Persons, with the exception of employees of any Virginia Gas Company who do not otherwise fall within the definition thereof, are listed on Exhibit 1.48 attached hereto.

Section 1.49  Out of Pocket Expenses. "Out of Pocket Expenses" shall have the meaning given in Section 8.3 hereof.

Section 1.50  Partnership; Partnerships. "Partnership" shall mean (a) any limited or general partnership, joint venture or other business association, other than a Subsidiary, in which any party has a direct or indirect interest and (b) each other such entity with respect to which a party has any obligation or made any commitment to acquire any such interest described in clause (a) (collectively, "Partnerships").

Section 1.51  Permits. "Permits" shall mean permits, licenses and governmental authorizations, registrations and approvals.

Section 1.52  Petroleum and Natural Gas Products. "Petroleum and Natural Gas Products" shall have the meaning given in Section 5.16 hereof.

Section 1.53  PUHCA. "PUHCA" shall mean the Public Utility Holding Company Act of 1935, as amended.

Section 1.54  Registration Statement. "Registration Statement" shall mean the Registration Statement on Form S-4 (Registration No. 333-46036), including the Joint Proxy Statement/Prospectus contained therein, filed by NUI Holding and NUI with the SEC on September  18, 2000, and Pre-Effective Amendment No. 1 thereto, with respect to the NUI Holding Common Stock to be offered to the holders of Virginia Gas Common Stock in the Merger.

Section 1.55  SEC. "SEC" shall mean the Securities and Exchange Commission.

Section 1.56  Securities Act. "Securities Act" shall mean the Securities Act of 1933, as amended.

Section 1.57  Stockholder Meeting. "Stockholder Meeting" shall mean the annual meeting of stockholders of Virginia Gas held on November 8, 2000, at which meeting such stockholders considered and adopted the Original Merger Agreement and the transactions contemplated therein.

Section 1.58  Subsidiary; Subsidiaries. "Subsidiary" shall mean (a) each corporate entity with respect to which a party has the right to vote (directly or indirectly through one or more other entities or otherwise) shares representing 50% or more of the votes eligible to be cast in the election of directors of such entity, (b) each other corporate entity that constitutes a "significant subsidiary," as defined in Rule 1-02 of Regulation S-X adopted under the Exchange Act and (c) each other corporate entity with respect to which a party has any obligation or made any commitment to acquire any such entity described in clauses (a) and (b) (collectively, "Subsidiaries").

Section 1.59  Superior Proposal. "Superior Proposal" shall have the meaning given in Section 6.2 hereof.

Section 1.60  Tax Returns. "Tax Returns" shall mean any report, return, information statement, payee statement or other information required to be provided to any federal, state, local or foreign Governmental Authority, or otherwise retained, with respect to Taxes, the NUI Holding Benefit Plans (as defined in Section 4.9 hereof) or the Virginia Gas Benefit Plans (as defined in Section 5.12 hereof).

Section 1.61  Taxes. "Taxes" shall mean any and all taxes, levies, imposts, duties, assessments, charges and withholdings imposed or required to be collected by or paid over to any federal, state, local or foreign Governmental Authority or any political subdivision thereof of any kind whatsoever, and including any interest, penalties, fines, assessments or additions imposed in respect of the foregoing or in respect of any failure to comply with any requirement regarding Tax Returns.

Section 1.62  Virginia Gas. "Virginia Gas" shall mean Virginia Gas Company, a Delaware corporation.

Section 1.63  Virginia Gas Affiliate. "Virginia Gas Affiliate" shall mean a corporate entity for which Virginia Gas has fifty (50%) percent ownership with the remaining fifty (50%) percent being owned by a private investor (collectively, "Virginia Gas Affiliates"). All of the Virginia Gas Affiliates are listed on Exhibit 1.63 attached hereto.

Section 1.64  Virginia Gas Common Stock. "Virginia Gas Common Stock" shall mean the common stock, par value $.001 per share, of Virginia Gas.

Section 1.65  Virginia Gas Companies. "Virginia Gas Companies" shall mean Virginia Gas, the Virginia Gas Subsidiaries and the Virginia Gas Partnerships.

Section 1.66  Virginia Gas Partnerships. "Virginia Gas Partnerships" shall mean a Partnership in which any Virginia Gas Company has an interest. All of the Virginia Gas Partnerships are listed on Exhibit 1.66 attached hereto.

Section 1.67  Virginia Gas Required Consents. "Virginia Gas Required Consents" shall have the meaning given in Section 5.4 hereof.

Section 1.68  Virginia Gas SEC Reports. "Virginia Gas SEC Reports" shall mean (a) Virginia Gas' Annual Reports on Form 10-KSB for the fiscal years ended December 31, 1999, December 31, 1998, and December 31, 1997, and (b) all documents filed by Virginia Gas with the SEC pursuant to Sections 13(a) and 13(c) of the Exchange Act, any definitive proxy statements filed pursuant to Section 14 of the Exchange Act and any report filed pursuant to Section 15(d) of the Exchange Act following the filing of Virginia Gas' Annual Report on Form 10-KSB for the fiscal year ended December 31, 1999.

Section 1.69  Virginia Gas Subsidiary. "Virginia Gas Subsidiary" means a Subsidiary owned by Virginia Gas (collectively, "Virginia Gas Subsidiaries"). All of the Virginia Gas Subsidiaries are listed on Exhibit 1.69 attached hereto.

Section 1.70  VSCC. "VSCC" shall mean the Virginia State Corporation Commission.

Section 1.71  Warrants; Warrant Agreements. "Warrants" shall mean those warrants to purchase shares of Virginia Gas Common Stock listed on Exhibit 5.2 attached hereto, which Warrants were issued pursuant to the Warrant Agreements, dated October 4, 1996, as previously provided by Virginia Gas to NUI (collectively, the "Warrant Agreements").

ARTICLE II

THE MERGER

Section 2.1  The Merger.

     (a)  Merger Subsidiary is a wholly-owned subsidiary of NUI Holding, formed under the laws of the State of Delaware. Subject to the terms and conditions of this Agreement, NUI Holding, as the sole stockholder of Merger Subsidiary, will approve the execution, delivery and performance of this Agreement by Merger Subsidiary.

     (b)  Subject to the terms and conditions of this Agreement, at the Effective Time, Virginia Gas shall be merged with and into Merger Subsidiary in accordance with the provisions of, and with the effects provided in, Subchapter IX of the DGCL (the "Merger"). Merger Subsidiary shall be the surviving corporation resulting from the Merger and shall remain a wholly-owned subsidiary of NUI Holding and shall continue to be governed by the laws of the State of Delaware.

     (c)  Pursuant to the Merger, each share of Virginia Gas Common Stock outstanding immediately prior to the Effective Time (other than shares of Virginia Gas Common Stock held by NUI Holding, if any, which shares shall be canceled in the Merger) shall be converted into and become that number of shares of NUI Holding Common Stock equal to the ratio (rounded to four decimal points) (the "Conversion Ratio") determined by dividing $4.00 by the average per share last sales price, regular way (rounded to four decimal points) (the "Average NUI Holding Price"), of NUI Holding Common Stock (or, for periods prior to the effective time of the NUI Reorganization, NUI Common Stock) as reported on the NYSE composite transactions reporting system (as reported in the New York City edition of The Wall Street Journal or, if not reported thereby, another authoritative source) for the twenty (20) consecutive trading days (the "Averaging Period") ending on (and including) the seven th trading day (the "Determination Date") prior to the Closing Date.

     (d)  No fraction of a share of NUI Holding Common Stock shall be issued in connection with the conversion of Virginia Gas Common Stock in the Merger and the distribution of NUI Holding Common Stock in respect thereof but, in lieu of such fraction, the Exchange Agent shall make a cash payment (without interest) equal to the same fraction of the market value of a full share of NUI Holding Common Stock, computed on the basis of the mean of the high and low sales prices of NUI Holding Common Stock as reported on the NYSE composite tape for the first full day on which the NUI Holding Common Stock is traded on the NYSE after the Effective Time.

Section 2.2   Exchange of Certificates.

     (a)  Prior to the Effective Time, NUI Holding shall appoint the Exchange Agent to act as the exchange agent in connection with the Merger. Immediately prior to the Effective Time, NUI Holding will deliver to the Exchange Agent, in trust for the benefit of the holders of Virginia Gas Common Stock, shares of NUI Holding Common Stock (together with cash in immediately available funds in an amount sufficient to pay cash in lieu of fractional shares, as provided in Section 2.1 hereof) necessary to make the exchanges contemplated by Section 2.1 hereof on a timely basis. To the extent that the estimated amount provided for the payment of cash in lieu of fractional shares is determined after the Effective Time to be less than the total amount distributable for such purpose, NUI Holding will promptly upon notice of the same from the Exchange Agent deliver the additional amount needed to the Exchange Agent.

     (b)  From and after the Effective Time, each holder of a certificate which immediately prior to the Effective Time represented outstanding shares of Virginia Gas Common Stock (the "Certificates") shall be entitled to receive in exchange therefor, upon surrender thereof to the Exchange Agent, a certificate or certificates representing the number of whole shares of NUI Holding Common Stock into which such holder's shares were converted in the Merger (together with cash in lieu of fractional shares). Promptly after the Effective Time, the Exchange Agent shall mail to each record holder of Virginia Gas Common Stock as of the Effective Time, a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to Certificates shall pass, only upon proper delivery of the Certificates to the Exchange Agent) and instructions for use in effecting the surrender of Certificates in exchange for shares of NUI Holding Common Stock (together wit h cash in lieu of fractional shares). Upon surrender to the Exchange Agent of a Certificate, together with such letter of transmittal duly executed, and any other required documents, the holder of such Certificate shall be entitled to receive in exchange therefor shares of NUI Holding Common Stock as set forth in this Agreement (together with cash in lieu of fractional shares), and such Certificate shall forthwith be canceled. No holder of a Certificate or Certificates shall be entitled to receive any dividend or other distribution from NUI Holding until the surrender of such holder's Certificate for a certificate or certificates representing shares of NUI Holding Common Stock. Upon such surrender, there shall be paid to the holder the amount of any dividends or other distributions (without interest) which theretofore became payable, but which were not paid by reason of the foregoing, with respect to the number of whole shares of NUI Holding Common Stock represented by the certificates issued upon surrend er. If delivery of NUI Holding Common Stock is to be made to a person other than the person in whose name the Certificate surrendered is registered or if any certificate for shares of NUI Holding Common Stock is to be issued in a name other than that in which the Certificate surrendered therefor is registered, it shall be a condition of such delivery or issuance that the Certificate so surrendered shall be properly endorsed or otherwise in proper form for transfer and that the person requesting such delivery or issuance shall pay any transfer or other taxes required by reason of such delivery or issuance to a person other than the registered holder of the Certificate surrendered or establish to the satisfaction of NUI Holding that such tax has been paid or is not applicable. Until surrendered in accordance with the provisions of this Section 2.2, each Certificate shall, after the Effective Time, represent for all purposes only the right to receive shares of NUI Holding Common Stock (and cash in lieu of fractional shares) as provided in Section 2.1 hereto, without any interest thereon.

     (c)  After the Effective Time, there shall be no transfers on the stock transfer books of Virginia Gas of the shares of Virginia Gas Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to NUI Holding or Virginia Gas for transfer, they shall be canceled and exchanged for shares of NUI Holding Common Stock (and cash in lieu of fractional shares) as provided in Section 2.1 hereof, in accordance with the procedures set forth in this Section 2.2.

     (d)  Any shares of NUI Holding Common Stock (and any accrued dividends and distributions thereon), and any cash delivered to the Exchange Agent for payment in lieu of fractional shares, that remain unclaimed by the former stockholders of Virginia Gas on the first anniversary of the Effective Time shall be delivered by the Exchange Agent to NUI Holding. Any former stockholders of Virginia Gas who have not theretofore complied with this Section 2.2 shall thereafter look only to NUI Holding for satisfaction of their claim for the consideration set forth in this Agreement, without any interest thereon. Notwithstanding the foregoing, neither NUI Holding nor Merger Subsidiary shall be liable to any holder of shares of Virginia Gas Common Stock for any shares of NUI Holding Common Stock (or dividends or distributions with respect thereto) delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

Section 2.3  Virginia Gas Stock Options and Warrants.

     (a)  Prior to the execution of this Agreement, Virginia Gas has provided to NUI Holding true and correct copies of amendments to all stock option grant documents, which amendments are in full force and effect in accordance with their terms, relating to all currently outstanding options to purchase shares of Virginia Gas Common Stock issued pursuant to the Virginia Gas Company 1998 Stock Option Plan or otherwise (including, without limitation, an option to purchase 10,000 shares of Virginia Gas Common Stock issued to an executive officer of Virginia Gas pursuant to a letter agreement dated October 30, 1997), pursuant to which: (i) each option exercisable at $4.125 shall, upon the occurrence of the Effective Time, be terminated and converted into the right to receive $1.00 in cash from NUI Holding; and (ii) any other outstanding options shall be canceled without any payment therefor.

     (b)  At the Effective Time, by virtue of the Merger and without any further action on the part of Virginia Gas or the holder thereof, each outstanding and unexercised Warrant will, pursuant to the terms of the Warrant Agreements, be automatically converted into the right to receive, upon exercise of such Warrant, that number of shares of NUI Holding Common Stock that such holder would have been entitled to receive upon the consummation of the Merger if such holder had exercised such Warrant immediately prior to the Effective Time.

Section 2.4  Virginia Gas Actions. Virginia Gas has approved of and consented to the Merger, and represents and warrants that (a) Virginia Gas' Board of Directors (at a meeting duly called and held) has (i) unanimously determined that each of this Agreement and the transactions contemplated hereby are fair to and in the best interests of Virginia Gas and its stockholders, (ii) approved this Agreement and the transactions contemplated hereby, (iii) resolved to elect not to be subject to any state takeover law that is or purports to be applicable to the Merger or the transactions contemplated by this Agreement, (iv) taken all steps necessary to render Section 203 of the DGCL inapplicable to this Agreement and the transactions contemplated hereby and (v) subject to the fiduciary duties of the Board of Directors applicable from time to time, recommended that the holders of Virginia Gas Common Stock vote to adopt the Original Merger Agreement and the transactions contemplated therein, an d (b) CIBC has delivered to the Board of Directors of Virginia Gas its written opinion that the Conversion Ratio as contemplated in this Agreement is fair, from a financial point of view, to such holders.

ARTICLE III

STOCKHOLDER APPROVAL; CLOSING

Section 3.1  Stockholder Approval. The Board of Directors of Virginia Gas recommended that its stockholders adopt, and the holders of Virginia Gas Common Stock by the requisite vote at the Stockholder Meeting have adopted, the Original Merger Agreement and the transactions contemplated thereby, including the amendment and restatement of the Original Merger Agreement as set forth in this Agreement. On the first business day on or by which (i) the Original Merger Agreement has been duly adopted by the requisite vote of the holders of shares of Virginia Gas Common Stock (which adoption occurred at the Stockholder Meeting), and (ii) the Closing of the transactions contemplated by this Agreement shall have occurred, or such later date as shall be agreed upon by NUI Holding and Virginia Gas, (y) the Certificate of Merger shall be filed in accordance with the DGCL and (z) the Merger shall become effective in accordance with the terms of this Agreement and the Certificate of Merger at the time and date contemplated therein (such time and date being referred to herein as the "Effective Time").

Section 3.2  Time and Place of Closing. The Closing of the transactions contemplated by this Agreement will take place at 11:00 A.M. on the third business day following the date on which all of the conditions to the obligations of the parties hereunder set forth in Article VII hereof have been satisfied or waived or such other time and date as NUI Holding and Virginia Gas may agree. The place of Closing shall be at such place as may be mutually agreed upon by NUI Holding and Virginia Gas.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF NUI HOLDING

     NUI Holding represents and warrants to Virginia Gas as follows:

Section 4.1  Organization and Authority of the NUI Companies. Each of the NUI Holding Companies is duly organized, validly existing and in good standing under the laws of its respective jurisdiction of organization. Each of the NUI Holding Companies has full corporate, limited liability or partnership power to carry on its respective business as it is now being conducted and to own, operate and hold under lease its assets and properties as, and in the places where, such properties and assets now are owned, operated or held. All of the NUI Holding Companies which are "significant subsidiaries" (as such term is defined in Rule 1-02 of Regulation S-X of the SEC) of NUI Holding as of the date of this Agreement consist of NUI and those subsidiaries listed on Exhibit 21 to NUI's Annual Report on Form 10-K for the fiscal year ended September 30, 2000. The copies of the Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws of NUI Holding that have been deliver ed to Virginia Gas are complete and correct and in full force and effect on the date hereof.

Section 4.2  Capitalization.

     (a)  NUI Holding's authorized equity capitalization consists of 30,000,000 shares of NUI Holding Common Stock and 5,000,000 shares of preferred stock, no par value per share. As of the close of business on March 27, 2001, 13,116,560 shares of NUI Holding Common Stock and no shares of NUI Holding preferred stock were issued and outstanding. Such shares of NUI Holding Common Stock constituted all of the issued and outstanding shares of capital stock of NUI Holding as of such date. All issued and outstanding shares of NUI Holding Common Stock have been duly authorized and validly issued and are fully paid and nonassessable, are not subject to and have not been issued in violation of any preemptive rights and have not been issued in violation of any federal or state securities laws. All outstanding shares of NUI Holding Common Stock are duly listed for trading on the NYSE.

     (b)  All of the shares of NUI Holding Common Stock to be issued to holders of Virginia Gas Common Stock in the Merger have been duly authorized for issuance out of NUI Holding's authorized and unreserved NUI Holding Common Stock and, when issued in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, and will not be subject to and will not be issued in violation of any preemptive rights.

Section 4.3  Authority Relative to this Agreement. The execution, delivery and performance of this Agreement and of all of the other documents and instruments required hereby by NUI Holding are within the corporate power of NUI Holding. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of NUI Holding and no other corporate proceedings on the part of NUI Holding are necessary to authorize this Agreement or to consummate the transactions contemplated herein either under state law or the requirements of the NYSE. This Agreement and all of the other documents and instruments required hereby have been or will be duly and validly executed and delivered by NUI Holding and (assuming the due authorization, execution and delivery hereof and thereof by Virginia Gas) constitute or will constitute valid and binding agreements of NUI Holding, enforceable against NUI Holding in accordance w ith their respective terms.

Section 4.4  Consents and Approvals; No Violations. Except for (a) any applicable requirements of the Securities Act, the Exchange Act, the HSR Act and any applicable filings under state securities, "Blue Sky" or takeover laws, (b) the filing and recordation of the Certificate of Merger as required by the DGCL, (c) any required approvals of the VSCC and the public service commissions of any other states where NUI Holding conducts business, and FERC, (d) the filing of an exemption statement on Form U-3A-2 with the SEC pursuant to PUHCA, and (e) those required filings, registrations, consents and approvals listed on Exhibit 4.4 attached hereto (the matters referred to in clauses (c), (d) and (e) being collectively referred to as the "NUI Holding Required Consents"), no filing or registration with, and no permit, authorization, consent or approval of, any public body or authority or any third party is necessary or required in connection with the execution and delivery of thi s Agreement by NUI Holding or for the consummation by NUI Holding of the transactions contemplated by this Agreement. Assuming that all filings, registrations, permits, authorizations, consents and approvals contemplated by the immediately preceding sentence have been duly made or obtained, neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby by NUI Holding will (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or bylaws of NUI Holding, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or otherwise result in any diminution of any of the rights of NUI Holding with respect to, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, Contract or other instrument or obligation to which NUI Holding is a party or by which it or any of its properties or assets may be bound or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to NUI Holding or any of its properties or assets except, in the case of clauses (ii) or (iii) above, for violations, breaches or defaults that would not have a Material Adverse Effect on the NUI Holding Companies and that will not prevent or delay the consummation of the transactions contemplated hereby.

Section 4.5  Reports.

     (a)  The filings required to be made by NUI and NUI Holding since January 1, 1997, under NYSE rules, the Securities Act, the Exchange Act and applicable state Laws and regulations have been filed with the NYSE and each applicable Governmental Authority, including the SEC and FERC, and NUI and NUI Holding have complied in all material respects with all requirements of such acts, laws and rules and regulations thereunder, except to the extent any such failure to comply would not have a Material Adverse Effect on the NUI Holding Companies.

     (b)  The NUI Holding SEC Reports complied, as of their respective dates of filing (and any NUI Holding SEC Reports filed after the date hereof will comply), in all material respects with all applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the SEC. As of their respective dates, none of such forms, reports or documents, including, without limitation, any financial statements or schedules included therein, contained (and none of the NUI Holding SEC Reports filed after the date hereof will contain) any untrue statement of a material fact or omitted (or will omit) to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading in light of the circumstances under which they were made. Each of the balance sheets (including the related notes and schedules) included in the NUI Holding SEC Reports fairly presented the consolidated financial position of NUI or NUI Hold ing as of the respective dates thereof, and the other related financial statements (including the related notes and schedules) included therein fairly presented the results of operations and cash flows of NUI or NUI Holding for the respective fiscal periods or as of the respective dates set forth therein. Each of the financial statements (including the related notes and schedules) included in the NUI Holding SEC Reports (a) complied as to form with the applicable accounting requirements and rules and regulations of the SEC and (b) was prepared in accordance with GAAP consistently applied during the periods presented, except as otherwise noted therein and subject to normal year-end and audit adjustments in the case of any unaudited interim financial statements. Since September 30, 1999, NUI and NUI Holding have timely filed all reports, registration statements and other filings required to be filed by them with the SEC.

Section 4.6  Absence of Certain Events. Except as set forth in the NUI Holding SEC Reports filed prior to the date of this Agreement or as otherwise specifically disclosed in Exhibit 4.6 attached hereto, since September 30, 1999, NUI and NUI Holding have not suffered any change in their respective business, financial condition or results of operations that has had or will have a Material Adverse Effect upon the NUI Holding Companies. Except as set forth in Exhibit 4.6 attached hereto, the representations and warranties of NUI contained in the Original Merger Agreement are true and correct in all respects (as to representations and warranties qualified or limited by the term "Material Adverse Effect," the word "material," or phrases of like import), and in all material respects (as to representations and warranties not so qualified or limited) when made and at and as of the date hereof with the same force and effect as if those representations and warranties had be en made at and as of such time except (i) to the extent such representations and warranties speak as of a specified earlier date, and (ii) as otherwise contemplated or permitted by this Agreement. Except as set forth in Exhibit 4.6, NUI has, in all material respects, performed all of its obligations and complied with all of its covenants necessary to be performed or complied with by it under the Original Merger Agreement on or before the date hereof.

Section 4.7  Joint Proxy Statement/Prospectus. None of the information with respect to the NUI Holding Companies included in the Joint Proxy Statement/Prospectus or the Registration Statement, did or will in the case of the Joint Proxy Statement/Prospectus or any amendments thereof or supplements thereto, at the time of the mailing of the Joint Proxy Statement/ Prospectus or any amendments thereof or supplements thereto or, in the case of the Registration Statement, at the time it became effective, did, or at the Effective Time, will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Joint Proxy Statement/Prospectus complies as to form in all material respects with the provisions of the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder, except that no rep resentation is made by NUI Holding with respect to information supplied by Virginia Gas or any affiliate of Virginia Gas for inclusion in the Joint Proxy Statement/Prospectus.

Section 4.8  Litigation. Except as set forth on Exhibit 4.8 attached hereto, there is no action, suit, proceeding or, to the Knowledge of NUI Holding, investigation pending or, to the Knowledge of NUI Holding, threatened against or relating to any of the NUI Holding Companies at law or in equity, or before any federal, state, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, whether in the United States or otherwise, that is expected, in the reasonable judgment of NUI Holding, to have a Material Adverse Effect upon the NUI Holding Companies or that seeks restraint, prohibition, damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby.

Section 4.9  Employee Benefit Plans.

     (a)  For purposes of this Section, the term "NUI Holding Benefit Plans" shall mean all material pension, retirement, profit-sharing, deferred compensation, stock option, employee stock ownership, severance pay, vacation, bonus or other incentive plans, and all other employee programs, arrangements or agreements, whether arrived at through collective bargaining or otherwise, all medical, vision, dental and other health plans, all life insurance plans, and all other employee benefit plans or fringe benefit plans, including, without limitation, any "employee benefit plan," as that term is defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored in whole or in part by, or contributed to by any of the NUI Holding Companies or affiliates thereof for the benefit of employees, retirees, dependents, spouses, directors, independent contractors, or other beneficiaries and under which employees, retirees, dependents, spouses, directors, independent contract ors or other beneficiaries are eligible to participate. Any of the NUI Holding Benefit Plans that is an "employee pension benefit plan," as that term is defined in Section 3(2) of ERISA, is referred to herein as a "NUI Holding ERISA Plan."

     (b)  As of the date of this Agreement, no NUI Holding Benefit Plan is a multiemployer plan within the meaning of Section 3(37) of ERISA. All NUI Holding Benefit Plans are in compliance with the applicable provisions (including, without limitation, any funding requirements or limitations) of ERISA, the Code and any other applicable Laws, the breach or violation of which could have a Material Adverse Effect on the NUI Holding Companies. Except as reflected in the notes to the financial statements included in the NUI Holding SEC Reports or as could have a Material Adverse Effect, no NUI Holding ERISA Plan which is a defined benefit pension plan has any "unfunded current liability," as that term is defined in Section 302(d)(8)(A) of ERISA, and the present fair market value of the assets of any such plan exceeds the plan's "benefit liabilities," as that term is defined in Section 4001(a)(16) of ERISA, when determined under actuarial factors that would apply if the plan terminated in accordance with all applicable legal requirements.

Section 4.10  Tax Matters. Except as set forth on Exhibit 4.10:

     (a)  NUI Holding and each of its Subsidiaries that is incorporated under the laws of the United States or of any of the United States are members of the affiliated group, within the meaning of Section 1504(a) of the Code, of which NUI Holding is the common parent, and such affiliated group files a consolidated federal income tax return;

     (b)  each of the NUI Holding Companies has timely filed or caused to be filed all Tax Returns required to have been filed by or for it, and all information set forth in such Tax Returns is accurate and complete in all material respects;

     (c)  each of the NUI Holding Companies has paid or made adequate provision on its books and records in accordance with GAAP for all Taxes covered by such Tax Returns;

     (d)  there is not a material amount of unpaid Taxes due and payable by any of the NUI Holding Companies or by any other person that is or could become a lien on any asset of, or that could otherwise have a Material Adverse Effect on, the NUI Holding Companies;

     (e)  each of the NUI Holding Companies has collected or withheld all Taxes required to be collected or withheld by it, and all such Taxes have been paid to the appropriate Governmental Authority or set aside in appropriate accounts for future payment when due;

     (f)  none of the NUI Holding Companies has granted (or is subject to) any waiver, which is currently in effect, of the period of limitations for the assessment of any Tax; no unpaid Tax deficiency has been assessed or asserted against, or with respect to, any of the NUI Holding Companies by any Governmental Authority; there are no currently pending administrative or judicial proceedings, or any deficiency or refund litigation, with respect to Taxes of any of the NUI Holding Companies, the adverse outcome of which would have a Material Adverse Effect on the NUI Holding Companies; and any such assertion, assessment, proceeding or litigation disclosed on Exhibit 4.10 hereto is being contested in good faith through appropriate measures, and its status is described in Exhibit 4.10 hereto; and

     (g)  the most recent audited consolidated balance sheet included in the NUI Holding SEC Reports fully and properly reflects, as of the date thereof, the liabilities of NUI and its Subsidiaries for all accrued Taxes and deferred liability for Taxes and, for periods ending after such date, the books and records of each such corporation fully and properly reflect its liability for all accrued Taxes.

Section 4.11  Compliance with Law. The conduct of the businesses of the NUI Holding Companies and their use of their assets does not violate or conflict, and has not violated or conflicted, with any Law, which violation or conflict could have a Material Adverse Effect on the NUI Holding Companies.

Section 4.12  Fees and Expenses of Brokers and Others. None of the NUI Holding Companies (a) has had any dealings, negotiations or communications with any broker or other intermediary in connection with the transactions contemplated by this Agreement, (b) is committed to any liability for any brokers' or finders' fees or any similar fees in connection with the transactions contemplated by this Agreement or (c) has retained any broker or other intermediary to act on its behalf in connection with the transactions contemplated by this Agreement, except that NUI has engaged Berenson to represent it in connection with such transactions and NUI Holding shall pay all of Berenson's fees and expenses in connection with such engagement.

Section 4.13  Accuracy of Information. Neither this Agreement nor any other document provided by the NUI Holding Companies or their employees or agents to Virginia Gas in connection with the transactions contemplated herein, when this Agreement and such documents are considered together in the aggregate, contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading.

Section 4.14  Absence of Undisclosed Liabilities. None of the NUI Holding Companies have, as of the date hereof, or will have, as of the Effective Time, any liabilities or obligations of any kind, whether absolute, accrued, asserted or unasserted, contingent or otherwise, that would be required to be disclosed on a consolidated balance sheet of NUI Holding, or reflected in the notes thereto, prepared as of such date in accordance with GAAP, except liabilities, obligations or contingencies that were (a) reflected on or accrued or reserved against in the consolidated balance sheet of NUI as of September 30, 1999, which is included in the NUI Holding SEC Reports, or reflected in the notes thereto, or (b) incurred after the date of such balance sheet in the ordinary course of business and consistent with past practices and which, individually or in the aggregate, will not have a Material Adverse Effect on the NUI Holding Companies.

Section 4.15  Merger Subsidiary. All of the issued and outstanding shares of the capital stock of Merger Subsidiary are (a) owned directly by NUI Holding and (b) duly authorized, validly issued, fully paid, nonassessable and are not subject to preemptive rights. Merger Subsidiary is a direct wholly owned subsidiary of NUI Holding that has been formed for the sole purpose of effecting the Merger and that, prior to the Effective Time, will (x) have no material assets, (y) engage in no other material activities and (z) will have no Subsidiaries.

ARTICLE VA

rticle vREPRESENTATIONS AND WARRANTIES OF VIRGINIA GAS

     Virginia Gas represents and warrants to NUI Holding as follows:

Section 5.1  Organization and Authority of the Virginia Gas Companies. Each of Virginia Gas and the Virginia Gas Subsidiaries is duly organized, validly existing and in good standing under the laws of its respective jurisdiction of organization. Each of Virginia Gas and the Virginia Gas Subsidiaries has full corporate power to carry on its respective business as it is now being conducted and to own, operate and hold under lease its assets and properties as, and in the places where, such properties and assets now are owned, operated or held. Each of Virginia Gas and the Virginia Gas Subsidiaries is duly qualified as a foreign entity to do business, and is in good standing, in each jurisdiction where the failure to be so qualified would have a Material Adverse Effect on the Virginia Gas Companies. Exhibit 1.69 constitutes a true and complete list of all of the Subsidiaries of Virginia Gas and Exhibit 1.66 constitutes a true and complete list of all of the Virginia Gas Partnerships. The copies of the Amended and Restated Certificate of Incorporation of Virginia Gas, the Articles of Incorporation of each Virginia Gas Subsidiary and the Bylaws of Virginia Gas and each Virginia Gas Subsidiary that have been delivered to NUI Holding are complete and correct and in full force and effect on the date hereof.

Section 5.2  Capitalization. Virginia Gas' authorized equity capitalization consists of 100,000,000 shares of Virginia Gas Common Stock, $.001 par value per share, and 1,000,000 shares of preferred stock, no par value per share. As of the close of business on March 23, 2001: (i) 5,504,906 shares of Virginia Gas Common Stock and no shares of Virginia Gas preferred stock were issued and outstanding, (ii) 260,000 shares of Virginia Gas Common Stock were subject to outstanding options issued pursuant to the Virginia Gas Company 1998 Stock Option Plan, (iii) 10,000 shares of Virginia Gas Common Stock were subject to outstanding options issued to an executive officer of Virginia Gas pursuant to that certain Letter Agreement, dated October 30, 1997, and (iv) warrants to purchase 943,149 shares of Virginia Gas Common Stock at $9.90 per share were outstanding. Such shares of Virginia Gas Common Stock constituted all of the issued and outstanding shares of capital stock of V irginia Gas as of such date. All issued and outstanding shares of Virginia Gas Common Stock have been duly authorized and validly issued and are fully paid and nonassessable, are not subject to and have not been issued in violation of any preemptive rights and have not been issued in violation of any federal or state securities laws. All of the outstanding shares of capital stock of the Virginia Gas Subsidiaries are validly issued, fully paid and nonassessable and are, except as disclosed on Exhibit 1.69 attached hereto, owned by Virginia Gas, directly or indirectly, free and clear of all liens, claims, charges or encumbrances. Except for the declaration and payment of dividends in the ordinary course of business, Virginia Gas has not, subsequent to December 31, 1999, declared or paid any dividend on, or declared or made any distribution with respect to, or authorized or effected any split-up or any other recapitalization of, any of the Virginia Gas Common Stock, or directly or indirectly redeemed, purchased or otherwise acquired any of its outstanding capital stock or agreed to take any such action and will not take any such action during the period between the date of this Agreement and the Effective Time. Except as set forth on Exhibit 5.2 attached hereto, there are no outstanding options, warrants, subscriptions or other rights to purchase or acquire any capital stock of Virginia Gas or any of the Virginia Gas Subsidiaries, and there are no Contracts pursuant to which Virginia Gas or any of the Virginia Gas Subsidiaries is bound to sell or issue any shares of its capital stock. Neither Virginia Gas nor any Virginia Gas Subsidiary is a party to any voting agreement, voting trust or similar arrangement with respect to Virginia Gas Common Stock or the voting stock of any Virginia Gas Subsidiary and, except as set forth on Exhibit 5.2 attached hereto, to the Knowledge of Virginia Gas, no holder of Virginia Gas Common Stock or the voting stock of any Virginia Gas Subsidiary is a party t o any such arrangement. All outstanding shares of Virginia Gas Common Stock are duly listed for inclusion on Nasdaq.

Section 5.3  Authority Relative to this Agreement. The execution, delivery and performance of this Agreement and of all of the other documents and instruments required hereby by Virginia Gas are within the corporate power of Virginia Gas. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of Virginia Gas, and the Original Merger Agreement (including the provisions thereof relating to the amendment and restatement of the Original Merger Agreement as provided in this Agreement) was adopted by the requisite vote of the holders of Virginia Gas Common Stock at the Stockholder Meeting, and no other corporate proceedings on the part of Virginia Gas are necessary to authorize this Agreement or to consummate the transactions contemplated herein. This Agreement and all of the other documents and instruments required hereby have been or will be duly and validly executed and delivered by Virg inia Gas and (assuming the due authorization, execution and delivery hereof and thereof by NUI Holding and Merger Subsidiary as necessary) constitute or will constitute valid and binding agreements of Virginia Gas, enforceable against Virginia Gas in accordance with their respective terms.

Section 5.4  Consents and Approvals; No Violations. Except for (a) any applicable requirements of the Securities Act, the Exchange Act, the HSR Act, and any applicable filings under state securities, "Blue Sky" or takeover laws, (b) the filing and recordation of a certificate of merger as required by the DGCL, (c) any required approvals of the VSCC and FERC and (d) those required filings, registrations, consents and approvals listed on Exhibit 5.4 attached hereto (the matters referred to in clauses (c) and (d) being collectively referred to as the "Virginia Gas Required Consents"), no filing or registration with, and no permit, authorization, consent or approval of, any public body or authority or any third party is necessary or required in connection with the execution and delivery of this Agreement by Virginia Gas or for the consummation by Virginia Gas of the transactions contemplated by this Agreement. Assuming that all filings, registrations, permits, aut horizations, consents and approvals contemplated by the immediately preceding sentence have been duly made or obtained, neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby by Virginia Gas will (i) conflict with or result in any breach of any provision of the Certificates or Articles of Incorporation, bylaws or other organizational documents of Virginia Gas or any Virginia Gas Subsidiary, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or otherwise result in any diminution of any of the rights of Virginia Gas or the Virginia Gas Subsidiaries with respect to, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, Contract or other instrument or obligation to which Virginia Gas or any Virginia Gas Subsidiary is a party or by which it or any of them or a ny of their properties or assets may be bound or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Virginia Gas or any Virginia Gas Subsidiary or any of their properties or assets except, in the case of clauses (ii) or (iii) above, for violations, breaches or defaults that would not have a Material Adverse Effect on the Virginia Gas Companies and that will not prevent or delay the consummation of the transactions contemplated hereby.

Section 5.5  Reports.

     (a)  Except as set forth on Exhibit 5.5 attached hereto, the filings required to be made by Virginia Gas since January 1, 1997, under Nasdaq rules, the Securities Act, the Exchange Act, the Natural Gas Act and applicable Laws and regulations have been filed with Nasdaq and each applicable Governmental Authority, including the SEC, FERC and the VSCC, and Virginia Gas has complied in all material respects with all requirements of such acts, laws and rules and regulations thereunder, except to the extent any such failure to comply would not have a Material Adverse Effect on the Virginia Gas Companies.

    (b)  The Virginia Gas SEC Reports complied, as of their respective dates of filing (and any Virginia Gas SEC Reports filed after the date hereof will comply), in all material respects with all applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the SEC. As of their respective dates, none of such forms, reports or documents, including, without limitation, any financial statements or schedules included therein, contained (and none of the Virginia Gas SEC Reports filed after the date hereof will contain) any untrue statement of a material fact or omitted (or will omit) to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading in light of the circumstances under which they were made. Each of the balance sheets (including the related notes and schedules) included in the Virginia Gas SEC Reports fairly presented the consolidated financial position of the Virginia Gas Companies as of the respective dates thereof, and the other related financial statements (including the related notes and schedules) included therein fairly presented the results of operations and cash flows of the Virginia Gas Companies for the respective fiscal periods or as of the respective dates set forth therein. Each of the financial statements (including the related notes and schedules) included in the Virginia Gas SEC Reports (a) complied as to form with the applicable accounting requirements and rules and regulations of the SEC, and (b) was prepared in accordance with GAAP consistently applied during the periods presented, except as otherwise noted therein and subject to normal year-end and audit adjustments in the case of any unaudited interim financial statements. Except for Virginia Gas, none of the Virginia Gas Companies is required to file any forms, reports or other documents with the SEC, Nasdaq, the NYSE or any other foreign or domestic securities exchange or Governmental Authority with jurisdiction over securities laws. Except as set forth on Exhibit 5.5 attached hereto, since December 31, 1998, Virginia Gas has timely filed all reports, registration statements and other filings required to be filed by it with the SEC under the Exchange Act.

Section 5.6  Absence of Certain Events. Except as set forth in the Virginia Gas SEC Reports filed prior to the date of this Agreement or as otherwise specifically disclosed in Exhibit 5.6 attached hereto, since December 31, 1998, neither Virginia Gas nor any of the Virginia Gas Subsidiaries (excluding the Virginia Gas Affiliates) and, to the Knowledge of Virginia Gas, none of the Virginia Gas Affiliates, has suffered any change in its business, financial condition or results of operations that has had or will have a Material Adverse Effect upon the Virginia Gas Companies. Except as disclosed in the Virginia Gas SEC Reports filed prior to the date of this Agreement or in Exhibit 5.6attached hereto, or as otherwise specifically contemplated by this Agreement, there has not been since December 31, 1998: (a) any entry into any agreement or understanding or any amendment of any agreement or understanding between Virginia Gas or any of the Virginia Gas Subsidiarie s (excluding the Virginia Gas Affiliates) and, to the Knowledge of Virginia Gas, between any of the Virginia Gas Affiliates, on the one hand, and any of their respective directors, officers or employees, on the other hand, providing for employment of any such director, officer or employee or any general or material increase in the compensation, severance or termination benefits payable or to become payable by Virginia Gas or any of the Virginia Gas Subsidiaries to any of their respective directors, officers or employees (except for normal increases in the ordinary course of business that are consistent with past practices and that, in the aggregate, do not result in a material increase in benefits or compensation expense), or any adoption of or increase in any bonus, insurance, pension or other employee benefit plan, payment or arrangement (including, without limitation, the granting of stock options or stock appreciation rights or the award of restricted stock) made to, for or with any such director, office r or employee; (b) any labor dispute that has had or is expected to have a Material Adverse Effect upon the Virginia Gas Companies; (c) any entry by Virginia Gas or any of the Virginia Gas Subsidiaries into any material commitment, agreement, license or transaction (including, without limitation, any borrowing, capital expenditure, sale of assets or any mortgage, pledge, lien or encumbrances made on any of the properties or assets of Virginia Gas or any of the Virginia Gas Subsidiaries) other than in the ordinary and usual course of business; (d) any change in the accounting policies or practices of Virginia Gas or the Virginia Gas Subsidiaries; (e) any damage, destruction or loss, whether covered by insurance or not, which has had or will have a Material Adverse Effect upon the Virginia Gas Companies; or (f) any agreement to do any of the foregoing. Except as set forth in Exhibit 5.6 attached hereto, the representations and warranties of Virginia Gas contained in the Original Merger Agreement are tr ue and correct in all respects (as to representations and warranties qualified or limited by the term "Material Adverse Effect," the word "material," or phrases of like import), and in all material respects (as to representations and warranties not so qualified or limited) when made and at and as of the date hereof with the same force and effect as if those representations and warranties had been made at and as of such time except (i) to the extent such representations and warranties speak as of a specified earlier date, and (ii) as otherwise contemplated or permitted by this Agreement. Except as set forth in Exhibit 0 attached hereto, Virginia Gas has, in all material respects, performed all of its obligations and complied with all of its covenants necessary to be performed or complied with by it under the Original Merger Agreement on or before the date hereof.

Section 5.7  Joint Proxy Statement/Prospectus. None of the information with respect to the Virginia Gas Companies included in the Joint Proxy Statement/Prospectus or the Registration Statement did or will, in the case of the Joint Proxy Statement/Prospectus or any amendments thereof or supplements thereto, at the time of the mailing of the Joint Proxy Statement/Prospectus or any amendments thereof or supplements thereto and at the time of the Stockholder Meeting or, in the case of the Registration Statement, at the time it became effective, did, or at the Effective Time, will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Joint Proxy Statement/Prospectus complies as to form in all material respects with the provisions of the Securities Act, the Exchange Act and the rules and regulations promul gated thereunder, except that no representation is made by Virginia Gas with respect to information supplied by NUI Holding or any affiliate of NUI Holding for inclusion in the Joint Proxy Statement/Prospectus.

Section 5.8  Litigation. Except as set forth in Exhibit 5.8 attached hereto, there is no action, suit, proceeding or, to the Knowledge of Virginia Gas, investigation pending or, to the Knowledge of Virginia Gas, threatened against or relating to Virginia Gas or any of the Virginia Gas Subsidiaries at law or in equity, or before any federal, state, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, whether in the United States or otherwise, that is expected, in the reasonable judgment of Virginia Gas, to have a Material Adverse Effect upon the Virginia Gas Companies or that seeks restraint, prohibition, damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby.

Section 5.9  Title to and Sufficiency of Assets; Easements.

     (a)  As of the date hereof, Virginia Gas and each of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates), and, to the Knowledge of Virginia Gas, the Virginia Gas Affiliates, owns, and as of the Effective Time, Virginia Gas and each of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) will own, good and marketable title to all of its assets (excluding, for purposes of this sentence, assets held under leases), free and clear of any and all mortgages, liens, encumbrances, charges, claims, restrictions, pledges, security interests or impositions, except as disclosed on Exhibit 5.9 attached hereto. Except as set forth on Exhibit 5.9 attached hereto, such assets, together with all assets held by Virginia Gas and the Virginia Gas Subsidiaries under leases, include all tangible and intangible assets, Contracts and rights necessary or required for the operation of the businesses of Virginia Gas and the Virginia Gas Subsi diaries in accordance with past practice.

     (b)  Subject to ordinary wear and tear and to scheduled or necessary repairs in the ordinary course of business, all tangible assets of Virginia Gas and the Virginia Gas Subsidiaries are in good operating condition and repair.

     (c)  Except as set forth on Exhibit 5.9 attached hereto, the businesses of Virginia Gas and the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) and, to the Knowledge of Virginia Gas, the businesses of the Virginia Gas Affiliates are (i) being operated in a manner which does not violate the terms of any Easements used by Virginia Gas or the Virginia Gas Subsidiaries in such businesses, (ii) all such Easements are valid and enforceable and grant the rights purported to be granted thereby and all rights necessary thereunder for the current operation of such business, (iii) there are no spatial gaps in such Easements that would impair the conduct of such business in any manner and (iv) no part of any asset used in connection with pipeline operations is located on property that is not owned in fee by Virginia Gas or a Virginia Gas Subsidiary or subject to an Easement in favor of Virginia Gas or a Virginia Gas Subsidiary.

Section 5.10  Contracts.

     (a)  Prior to the date hereof, Virginia Gas has provided NUI Holding with a true and correct list of all of the Contracts to which Virginia Gas or any Virginia Gas Subsidiary is a party, which list is set forth on Exhibit 5.10 attached hereto, and true and correct copies of each Contract, in the case of written Contracts, or true and correct summaries thereof, in the case of oral Contracts, requested by NUI Holding, that constitute: (i) a lease of any interest in any real property; (ii) a lease of any personal property with aggregate annual rental payments in excess of $25,000; (iii) an option to acquire or lease any interest in real property or a right of first refusal with respect thereto; (iv) an agreement to purchase or sell a capital asset or an interest in any business entity for a price in excess of $25,000 or a right of first refusal with respect thereto; (v) an agreement relating to the borrowing or lending of money or the purchase or sale of securit ies; (vi) a guaranty, contribution agreement or other agreement that includes an indemnification obligation in excess of $25,000 or any contribution or support obligation; (vii) an agreement limiting in any respect the ability of any such entity to compete in any line of business or with any person; (viii) a customer supply or requirements agreement or an agreement with a vendor with a payment obligation over its term in excess of $25,000 to which any such entity is a party or by which any such entity is bound; (ix) an employment, severance, separation, change in control, or consulting agreement to which any such entity is a party or by which any such entity is bound; and (x) any other agreement involving an amount over its term in excess of $25,000. Except as set forth on Exhibit 5.10 attached hereto, Virginia Gas and each of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) has performed and, to the Knowledge of Virginia Gas, the Virginia Gas Affiliates and every other party ha s performed, each material term, covenant and condition of each of the Contracts to which Virginia Gas or any Virginia Gas Subsidiary is a party that is to be performed by any of them at or before the date hereof. Except as set forth on Exhibit 5.10 attached hereto, no event has occurred that would, with the passage of time or compliance with any applicable notice requirements or both, constitute a default by Virginia Gas or any Virginia Gas Subsidiary (other than the Virginia Gas Affiliates) or, to the Knowledge of Virginia Gas, the Virginia Gas Affiliates and any other party under any of the Contracts to which Virginia Gas or any Virginia Gas Subsidiary is a party, and, to the Knowledge of Virginia Gas, no party to any of the Contracts to which Virginia Gas or any Virginia Gas Subsidiary is a party intends to cancel, terminate or exercise any option under any of such Contracts.

     (b)  With respect to each customer supply or requirements agreement and each vendor agreement with a payment obligation over its term in excess of $25,000 to which Virginia Gas or any Virginia Gas Subsidiary (other than the Virginia Gas Affiliates) is a party, and, to the Knowledge of Virginia Gas, to which any Virginia Gas Affiliate is a party, the copy of such agreement that has been provided by Virginia Gas to NUI Holding accurately discloses: (i) the remaining term of such agreement; (ii) all incentive or other payments paid or to be paid thereunder by Virginia Gas or any Virginia Gas Subsidiary after December 31, 1999; (iii) all purchase commitments or minimum purchase guarantees binding on Virginia Gas or any Virginia Gas Subsidiary for periods after December 31, 1999; and (iv) any deviation in the economic terms thereof from and after December 31, 1999, from those that were in effect under such agreements (or under any similar predecessor agree ments) over the course of Virginia Gas' entire fiscal year ended December 31, 1999.

Section 5.11  Labor Matters.

    (a)  Except as set forth in Exhibit 5.11 attached hereto, with respect to employees of Virginia Gas and the Virginia Gas Subsidiaries: (i) no senior executive, key employee or group of employees has, during the period beginning on June 13, 2000, and ending on the date hereof, given notice of his or her intention to terminate employment with any of Virginia Gas or the Virginia Gas Subsidiaries; (ii) there is no unfair labor practice charge or complaint against Virginia Gas or any Virginia Gas Subsidiary pending or, to the Knowledge of Virginia Gas, threatened before the National Labor Relations Board or any other comparable authority; (iii) no grievance or any arbitration proceeding arising out of or under collective bargaining agreements is pending and, to the Knowledge of Virginia Gas, no claims therefor exist or have been threatened; and (iv) there is no litigation, arbitration proceeding, governmental investigation, administrative charge, citation or action of any kind pending or, to the Knowledge of Virginia Gas, proposed or threatened against Virginia Gas or any Virginia Gas Subsidiary relating to employment, employment practices, terms and conditions of employment or wages and hours.

     (b)  Neither Virginia Gas nor any Virginia Gas Subsidiary (i) has any collective bargaining relationship or duty to bargain with any Labor Organization (as such term is defined in Section 2(5) of the National Labor Relations Act, as amended); (ii) has recognized or has been requested to recognize any Labor Organization as the collective bargaining representative of any of its employees; and (iii) is, to the Knowledge of Virginia Gas, the subject of any active or threatened organizing effort by any Labor Organization.

Section 5.12  Employee Benefit Plans.

     (a)  For purposes of this Section, the term "Virginia Gas Benefit Plans" shall mean all pension, retirement, profit-sharing, deferred compensation, stock option, employee stock ownership, severance pay, vacation, bonus or other incentive plans, and all other employee programs, arrangements or agreements, whether arrived at through collective bargaining or otherwise, all medical, vision, dental and other health plans, all life insurance plans, and all other employee benefit plans or fringe benefit plans, including, without limitation, any "employee benefit plan," as that term is defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored in whole or in part by, or contributed to by Virginia Gas or any of the Virginia Gas Subsidiaries or affiliates thereof for the benefit of employees, retirees, dependents, spouses, directors, independent contractors or other beneficiaries and under which employees, retirees, dependents, spouses, directors, independe nt contractors, or other beneficiaries are eligible to participate. Any of the Virginia Gas Benefit Plans which is an "employee pension benefit plan," as that term is defined in Section 3(2) of ERISA, is referred to herein as a "Virginia Gas ERISA Plan."

     (b)  No Virginia Gas Benefit Plan is or has been a multiemployer plan within the meaning of Section 3(37) of ERISA nor has Virginia Gas or any Virginia Gas Subsidiary participated in or withdrawn from a multiemployer plan. All Virginia Gas Benefit Plans are in compliance with the applicable provisions (including, without limitation, any funding requirements or limitations) of ERISA, the Code and any other applicable Laws, the breach or violation of which could have a Material Adverse Effect on the Virginia Gas Companies. No Virginia Gas Benefit Plan provides for post-retirement medical benefit obligations (without regard to COBRA obligations). No Virginia Gas ERISA Plan that is a defined benefit pension plan has any "unfunded current liability," as that term is defined in Section 302(d)(8)(A) of ERISA, and the present fair market value of the assets of any such plan exceeds the plan's "benefit liabilities," as that term is defined in Section 4001(a)(16) of ERISA, when determined under actuarial factors that would apply if the plan terminated in accordance with all applicable legal requirements.

     (c)  Exhibit 5.12 hereto is a true and correct list of all Virginia Gas Benefit Plans. Virginia Gas has provided NUI Holding with access to true and correct copies of each governing document for each Virginia Gas Benefit Plan, together with any amendments, trust agreements (if applicable), insurance contracts, the most recent summary plan description, annual report and audited financial statement for each such plan and the actuarial report for any Virginia Gas Benefit Plan that is a defined benefit pension plan or funded welfare benefit plan. With respect to any Virginia Gas Benefit Plan, Virginia Gas has retained the right to terminate such plan at any time for any reason.

     (d)  Except as set forth on Exhibit 5.12 hereto, (i) with respect to each Virginia Gas Benefit Plan intended to be qualified under Code Section 401(a), the trust forming a part thereof has received a favorable determination letter from the IRS as to its qualification under the Code and no fact or condition has occurred which could reasonably be expected to result in the disqualification of such Virginia Gas Benefit Plan or adversely affect the tax-exempt status of such trust, (ii) there are no pending or, to the Knowledge of Virginia Gas, threatened claims by or on behalf of any Virginia Gas Benefit Plans (other than routine claims for benefits) and (iii) all contributions, premiums and benefit payments required to be made or paid by Virginia Gas or any Virginia Gas Subsidiary in respect of any Virginia Gas Benefit Plan have been paid within the earliest time required by Law or by the Virginia Gas Benefit Plan.

Section 5.13  Tax Matters.

     (a)  Except as set forth on Exhibit 5.13 attached hereto:

        (i)  Virginia Gas and each Virginia Gas Subsidiary that is incorporated under the laws of the United States or of any of the United States are members of the affiliated group, within the meaning of Section 1504(a) of the Code, of which Virginia Gas is the common parent, such affiliated group files a consolidated federal income tax return and neither Virginia Gas nor any of the Virginia Gas Subsidiaries has ever filed a consolidated federal income tax return with (or been included in a consolidated return of) a different affiliated group;

        (ii)  Virginia Gas and each of the Virginia Gas Subsidiaries has timely filed or caused to be filed all Tax Returns required to have been filed by or for it, and all information set forth in such Tax Returns is accurate and complete in all material respects;

        (iii)  Virginia Gas and each of the Virginia Gas Subsidiaries has paid or made adequate provision on its books and records in accordance with GAAP for all Taxes covered by such Tax Returns;

        (iv)  Virginia Gas and each of the Virginia Gas Subsidiaries is in material compliance with, and its records contain all information and documents necessary to comply with, all applicable information reporting and tax withholding requirements under federal, state, local and foreign Laws, and such records identify with specificity all accounts subject to withholding under Section 1441, 1442 or 3406 of the Code or similar provisions of state, local or foreign laws;

       (v)  there is not an amount of unpaid Taxes due and payable by Virginia Gas or any of the Virginia Gas Subsidiaries or by any other person that is or could become a lien on any asset of, or that otherwise could have a Material Adverse Effect on, the Virginia Gas Companies;

        (vi)  Virginia Gas and each of the Virginia Gas Subsidiaries has collected or withheld all Taxes required to be collected or withheld by it, and all such Taxes have been paid to the appropriate Governmental Authority or set aside in appropriate accounts for future payment when due;

        (vii)  neither Virginia Gas nor any of the Virginia Gas Subsidiaries has granted (or is subject to) any waiver, which is currently in effect, of the period of limitations for the assessment of any Tax; no unpaid Tax deficiency has been assessed or asserted against, or with respect to, Virginia Gas or any of the Virginia Gas Subsidiaries by any Governmental Authority; no power of attorney relating to Taxes that is currently in effect has been granted by, or with respect to, Virginia Gas or any of the Virginia Gas Subsidiaries; there are no currently pending administrative or judicial proceedings, or any deficiency or refund litigation, with respect to Taxes of Virginia Gas or any of the Virginia Gas Subsidiaries, the adverse outcome of which would have a Material Adverse Effect on the Virginia Gas Companies; and any such assertion, assessment, proceeding or litigation disclosed in Exhibit 5.13 hereto is being contested in good faith through a ppropriate measures, and its status is described in Exhibit 5.13 hereto;

        (viii) neither Virginia Gas nor any of the Virginia Gas Subsidiaries has made or entered into, or holds any asset subject to, a consent filed pursuant to Section 341(f) of the Code and the regulations thereunder or a "safe harbor lease" subject to Section 168(f)(8) of the Internal Revenue Code of 1954, as amended prior to the Deficit Reduction Act of 1984, and the regulations thereunder;

        (ix)  neither Virginia Gas nor any of the Virginia Gas Subsidiaries is required to include in income any amount from an adjustment pursuant to Section 481 of the Code or the regulations thereunder or any similar provision of state or local Law, and Virginia Gas has no Knowledge that any Governmental Authority has proposed any such adjustment;

        (x)  neither Virginia Gas nor any of the Virginia Gas Subsidiaries is obligated to make any payments, or is a party to any Contract that could obligate it to make any payments, that would not be deductible by reason of Sections 162(m) or 280G of the Code;

        (xi)  there are no excess loss accounts or deferred intercompany gains with respect to any member of the affiliated group of which Virginia Gas is the common parent which would have a Material Adverse Effect on the Virginia Gas Companies if taken into account;

        (xii)  the most recent audited consolidated balance sheet included in the Virginia Gas SEC Reports fully and properly reflects, in all material respects, as of the date thereof, the liabilities of Virginia Gas and the Virginia Gas Subsidiaries for all accrued Taxes and deferred liability for Taxes and, for periods ending after such date, the books and records of each such corporation fully and properly reflect its liability for all accrued Taxes; and

        (xiii)  since April 16, 1997, neither Virginia Gas nor any Virginia Gas Subsidiary has distributed to their respective stockholders or security holders stock or securities of a controlled corporation in a transaction to which Section 355(a) of the Code applies.

     (b)  Exhibit 5.13 describes all material and continuing Tax elections, consents and agreements made by or affecting Virginia Gas or any Virginia Gas Subsidiary, lists all types of material Taxes paid and Tax Returns filed by or on behalf of Virginia Gas or any Virginia Gas Subsidiary and expressly indicates each Tax with respect to which Virginia Gas or any Virginia Gas Subsidiary is or has been included in a consolidated, unitary or combined return.

Section 5.14  Compliance with Law. The conduct of the businesses of Virginia Gas and the Virginia Gas Subsidiaries and their use of their assets does not violate or conflict, and has not violated or conflicted, with any Law, which violation or conflict could have a Material Adverse Effect on the Virginia Gas Companies.

Section 5.15  Transactions With Affiliates. Except as set forth in Exhibit 5.15 attached hereto, since December 31, 1998, neither Virginia Gas nor any of the Virginia Gas Subsidiaries has, in the ordinary course of business or otherwise, (i) purchased, leased or otherwise acquired any property or assets or obtained any services from, (ii) sold, leased or otherwise disposed of any property or assets or provided any services to (except with respect to remuneration for services rendered in the ordinary course of business as a director, officer or employee of one or more of Virginia Gas or any Virginia Gas Subsidiary), (iii) entered into or modified in any manner any Contract with, or (iv) borrowed any money from, or made or forgiven any loan or other advance to, any Other Virginia Gas Interested Person that, considering the matters set forth in clauses (i) through (iv) in the aggregate, exceeded a value of $75,000. Except as set forth in Exhibit 5.15, (i) the C ontracts of Virginia Gas and the Virginia Gas Subsidiaries do not include any obligation or commitment between Virginia Gas or any of the Virginia Gas Subsidiaries, on the one hand, and any Other Virginia Gas Interested Person, on the other hand, (ii) the assets of Virginia Gas and the Virginia Gas Subsidiaries do not include any receivable or other obligation or commitment from any Other Virginia Gas Interested Person that, in the aggregate, exceeds a value of $75,000 and (iii) the liabilities of Virginia Gas and the Virginia Gas Subsidiaries do not include any payable or other obligation or commitment to any Other Virginia Gas Interested Person that, in the aggregate, exceeds a value of $75,000. Except as set forth in Exhibit 5.15 hereto, no Other Virginia Gas Interested Person is a party to any Contract with any customer or supplier of Virginia Gas or any Virginia Gas Subsidiary (excluding the Virginia Gas Affiliates) and, to the Knowledge of Virginia Gas, no Virginia Gas Affiliate is a party to a ny such Contract, that affects in any manner the business, financial condition or results of operation of any of the Virginia Gas Companies.

Section 5.16  Environmental Conditions.

     (a)  Definitions. When used in this Section 5.16:

        (i)  "Environmental Laws" shall mean any and all federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or requirements of any Governmental Authority regulating, relating to or imposing liability or standards of conduct concerning any Hazardous Materials or environmental protection in effect as of the date of this Agreement or at the Effective Time, together with any amendment or re-authorization thereto or thereof;

        (ii)  "Hazardous Materials" shall mean any hazardous material, hazardous waste, infectious medical waste, Petroleum and Natural Gas Products, hazardous or toxic substance defined or regulated as such in or under any Environmental Law, including, without limitation, materials exhibiting the characteristics of ignitability, corrosivity, reactivity or extraction procedure toxicity, as such terms are defined as of the date of this Agreement or at the Effective Time in connection with hazardous materials or hazardous wastes or hazardous or toxic substances in any Environmental Law; and

        (iii)  "Petroleum and Natural Gas Products" shall mean crude oil, petroleum or fractions thereof, gasoline, diesel fuel, motor oil, waste or used oil, heating oil, kerosene and any other petroleum products and natural gas, natural gas liquids, liquefied natural gas or synthetic gas useable for fuel.

     (b)  Except as set forth in Exhibit 5.16 attached hereto, and except for such violations that in the aggregate would not have a Material Adverse Effect on the Virginia Gas Companies, (i) neither Virginia Gas nor any Virginia Gas Subsidiary has used, stored, treated, transported, manufactured, refined, handled, produced, disposed of, managed, spilled or released any Hazardous Materials on, under, at, from or in any way affecting any of its properties or assets (including, without limitation, any properties or assets now or previously used, owned or operated by Virginia Gas or any Virginia Gas Subsidiary) or otherwise, in any manner which at the time of the action in question violated any Environmental Law governing the use, storage, treatment, transportation, manufacture, refinement, handling, production, disposal, management, spill or release of Hazardous Materials, and (ii) to the Knowledge of Virginia Gas, no prior owner of such property or asset or any ten ant, subtenant, prior tenant or prior subtenant thereof has used Hazardous Materials on, from or in any way affecting any such property or asset, or otherwise, in any manner which at the time of the action in question violated any Environmental Law governing the use, storage, treatment, transportation, manufacture, refinement, handling, production, disposal, management, spill or release of Hazardous Materials.

     (c)  Except as set forth in Exhibit 5.16 attached hereto, neither Virginia Gas nor any Virginia Gas Subsidiary has any obligations or liabilities, whether absolute or contingent, accrued or unaccrued, asserted or unasserted, known or unknown, or otherwise, that could have a Material Adverse Effect on the Virginia Gas Companies, and no claims have been made against Virginia Gas or any Virginia Gas Subsidiary and no citations or notices have been issued against Virginia Gas or any Virginia Gas Subsidiary that could have a Material Adverse Effect on the Virginia Gas Companies, and that in the case of any of the foregoing, have been or are imposed by reason of or based upon any provision of any Environmental Laws, including, without limitation, any such obligations or liabilities relating to or arising out of or attributable, in whole or in part, to the manufacture, processing, distribution, use, treatment, storage, production, management, spill, release, disposa l, arranging for disposal, transport or handling of any Hazardous Materials by Virginia Gas or any Virginia Gas Subsidiary or, to the Knowledge of Virginia Gas, by any predecessors in interest in connection with or in any way arising from or relating to Virginia Gas or any Virginia Gas Subsidiary or any of their respective properties, or relating to or arising from or attributable, in whole or in part, to the manufacture, processing, distribution, use, treatment, storage, disposal, production, management, spill, release, transport or handling of any such substance by any other person at or on or under any of the real properties owned or used by Virginia Gas or any Virginia Gas Subsidiary.

     (d)  Except as set forth on Exhibit 5.16 attached hereto, Virginia Gas and the Virginia Gas Subsidiaries have received all Permits as may be required of them under applicable Environmental Laws to conduct their respective businesses, and Virginia Gas and the Virginia Gas Subsidiaries are in compliance in all material respects with the terms and conditions of all such Permits. Neither Virginia Gas nor any Virginia Gas Subsidiary has received any notices or claims, nor, to the Knowledge of Virginia Gas, is there a factual basis for such a claim, that it is a responsible party in connection with any claim or notice asserted pursuant to 42 U.S.C. Section 9601 et seq. ("CERCLA"), or any state superfund law.

     (e)  The operation of the business of Virginia Gas and the Virginia Gas Subsidiaries has not adversely impacted any "wetlands" (as that term is currently defined by the U.S. Army Corps of Engineers or any other regulatory agency) located on any of the real property owned, operated or leased by Virginia Gas or any of the Virginia Gas Subsidiaries.

     (f)  There are no (i) underground storage tanks, (ii) asbestos containing material or (iii) lead containing material on any real property owned, operated or leased by Virginia Gas or any of the Virginia Gas Subsidiaries, the presence of which could result in a Material Adverse Effect.

     (g)  To the Knowledge of Virginia Gas, neither Virginia Gas nor any Virginia Gas Subsidiary has transported or disposed, or allowed or arranged for any third parties to transport or dispose, of any Hazardous Material or other waste to or at a site which, pursuant to CERCLA or any applicable state law, has been placed on the National Priorities List or its state equivalent (a "Superfund Site"). Neither Virginia Gas nor any Virginia Gas Subsidiary has received notice, nor, to the Knowledge of Virginia Gas, do any facts exist that could give rise to any notice, that Virginia Gas or any Virginia Gas Subsidiary is a potentially responsible party with respect to a Federal or state Superfund Site or for corrective action under CERCLA or any other applicable Law. Neither Virginia Gas nor any Virginia Gas Subsidiary has submitted or was required to submit any notice pursuant to Section 103(c) of CERCLA with respect to any real property. Neither Virginia Gas nor any Virgin ia Gas Subsidiary has received any written or oral request for information in connection with any Federal or state Superfund Site. Neither Virginia Gas nor any Virginia Gas Subsidiary has been requested to, or has undertaken, any response or remedial actions or clean-up actions of any kind at the request of any Governmental Authority or at the request of any other Person.

Section 5.17  Insurance. Except to the extent adequately accrued on the most recent balance sheet contained in the Virginia Gas SEC Reports, neither Virginia Gas nor any Virginia Gas Subsidiary has any obligation (contingent or otherwise) to pay in connection with any insurance policies any retroactive premiums or "retro-premiums" that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

Section 5.18  Intellectual Property. Neither Virginia Gas nor any Virginia Gas Subsidiary currently utilizes, or to the Knowledge of Virginia Gas, has in the past utilized, any existing or pending patent, trademark, trade name, service mark, copyright, software, trade secret or know-how, except for those which are owned, possessed or lawfully used by Virginia Gas or any Virginia Gas Subsidiary in their business operations, and neither Virginia Gas nor any Virginia Gas Subsidiary infringes upon or unlawfully uses any patent, trademark, trade name, service mark, copyright or trade secret owned or validly claimed by another person except, in each case, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Virginia Gas and the Virginia Gas Subsidiaries own, have a valid license to use or otherwise have the right validly to use all existing and pending patents, trademarks, tradenames, service marks, copyrights and software necessary to carr y on their respective businesses substantially as currently conducted, except where the absence of such ownership, valid license or other valid right to use would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

Section 5.19  Fees and Expenses of Brokers and Others. Neither Virginia Gas nor any Virginia Gas Subsidiary (other than the Virginia Gas Affiliates) and, to the Knowledge of Virginia Gas, none of the Virginia Gas Affiliates (a) has had any dealings, negotiations or communications with any broker or other intermediary in connection with the transactions contemplated by this Agreement, (b) is committed to any liability for any brokers' or finders' fees or any similar fees in connection with the transactions contemplated by this Agreement or (c) has retained any broker or other intermediary to act on its behalf in connection with the transactions contemplated by this Agreement, except that Virginia Gas has engaged CIBC to represent it in connection with such transactions, and shall pay all of CIBC's fees and expenses in connection with such engagement.

Section 5.20  Regulation as Utility.

     (a)  Based solely upon an opinion of counsel with respect to Virginia Gas that was delivered in connection with a previous transaction (a true and correct copy of which has been delivered by Virginia Gas to NUI Holding), Virginia Gas is not a "holding company" within the meaning of Section 2(a)(7) of PUHCA as a result of Virginia Gas Distribution Company's business activities. Since the date of such opinion, the business activities of Virginia Gas Distribution Company have been no less favorable to supporting such an opinion than the business activities that formed the basis of such legal opinion.

     (b)  Except as set forth on Exhibit 5.20 attached hereto, neither Virginia Gas nor any Virginia Gas Subsidiary is subject to regulation as a "public utility" as that phrase is defined in Virginia Code Ann. 56-265.1(b) or "public service corporation" as that phrase is defined in Virginia Code Ann.  56-1.

     (c)  Neither Virginia Gas nor any Virginia Gas Subsidiary is subject to regulation as a public utility or public service company (or similar designation) in any state other than Virginia.

Section 5.21  FERC Jurisdiction. Neither Virginia Gas nor any Virginia Gas Subsidiary owns or operates any FERC jurisdictional facilities giving rise to a requirement for approval of the Merger by FERC.

Section 5.22  Accuracy of Information. Neither this Agreement nor any other document provided by the Virginia Gas Companies or their employees or agents to NUI Holding in connection with the transactions contemplated herein, when this Agreement and such other documents are considered in the aggregate, contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained therein not misleading.

Section 5.23  Absence of Undisclosed Liabilities. Except as disclosed in the Virginia Gas SEC Reports filed prior to the date of this Agreement or in Exhibit 5.23 attached hereto, neither Virginia Gas nor any Virginia Gas Subsidiary has, as of the date hereof, or will have, as of the Effective Time, any liabilities or obligations of any kind, whether absolute, accrued, asserted or unasserted, contingent or otherwise, that would be required to be disclosed on a consolidated balance sheet of Virginia Gas, or reflected in the notes thereto, prepared as of such date, in accordance with GAAP, except liabilities, obligations or contingencies that were (a) reflected on or accrued or reserved against in the consolidated balance sheet of Virginia Gas as of December 31, 1999, which is included in the Virginia Gas SEC Reports, or reflected in the notes thereto, or (b) incurred after the date of such balance sheet in the ordinary course of business and consistent with past practices and which, individually or in the aggregate, would not have a Material Adverse Effect on the Virginia Gas Companies. Neither Virginia Gas nor any Virginia Gas Subsidiary is a party to any Contract, or subject to any charter or other corporate or partnership restriction, or subject to any judgment, order, writ, injunction, decree, rule or regulation, which will have a Material Adverse Effect on the Virginia Gas Companies.

Section 5.24  Opinion of Financial Advisor. Virginia Gas has received the opinions of CIBC to the effect that, as of the date of the Original Merger Agreement and as of October 3, 2000, the exchange ratio contemplated in this Agreement is fair to the holders of shares of Virginia Gas Common Stock from a financial point of view.

Section 5.25  Virginia Gas Year 2000 Compliance. The Virginia Gas Companies did not suffer any Material Adverse Effect in connection with their efforts to prepare for, or remediation efforts related to, the ability of their computer applications (including software, firmware, hardware and other similar or related items of automated computerized or software systems) to perform properly date sensitive functions for all dates, before and after January 1, 2000 ("Year 2000 Compliance"), or in connection with any failure by any vendor, customer or other third party to achieve Year 2000 Compliance.

Section 5.26  Vote Required. The affirmative vote of the holders of a majority of the outstanding shares of Virginia Gas Common Stock entitled to vote thereon was the only vote of the holders of any class or series of Virginia Gas' capital stock necessary to adopt the Original Merger Agreement and the transactions contemplated thereby, including the amendment and restatement of the Original Merger Agreement as set forth in this Agreement. The Board of Directors of Virginia Gas (at a meeting duly called and held) (a) unanimously approved the Original Merger Agreement, this Agreement and the transactions contemplated hereby, (b) determined that the Merger is fair to and in the best interests of the holders of Virginia Gas Common Stock, (c) recommended the Original Merger Agreement to such holders for adoption and (d) directed that the Original Merger Agreement be submitted to holders of Virginia Gas Common Stock.

Section 5.27  Section 203 of the DGCL; State Takeover Statutes. Prior to the date hereof, the Board of Directors of Virginia Gas has approved this Agreement and the transactions contemplated hereby and such approval is sufficient to render inapplicable to the Merger and any of such other transactions the provisions of Section 203 of the DGCL. No other state takeover statute or similar statute or regulation applies or purports to apply to this Agreement, the Merger or any of the other transactions contemplated hereby and no provision of the Certificates or Articles of Incorporation, bylaws or other governing instruments of any of the Virginia Gas Companies would, directly or indirectly, restrict or impair the ability of NUI Holding to vote, or otherwise to exercise the rights of a stockholder with respect to, shares of the Virginia Gas Companies that may be acquired or controlled by NUI Holding as contemplated by this Agreement.

Section 5.28  Virginia Gas Affiliates and Partnerships.

     (a)  There are no claims, including, without limitation, claims of breach of fiduciary duty or unlawful payment of distributions, pending or threatened by any shareholder of the Virginia Gas Affiliates against the board of directors or any other shareholder of the Virginia Gas Affiliates. All borrowings by the Virginia Gas Affiliates have been approved by all necessary action, including, without limitation, all shareholder action required by the Bylaws of the Virginia Gas Affiliates.

     (b)  Virginia Gas has provided NUI with true and correct copies of all governing documents related to the Virginia Gas Partnerships and of all other documents relating to the Virginia Gas Partnerships reasonably requested by NUI that are in the possession of Virginia Gas or which Virginia Gas has the right to obtain. To the Knowledge of Virginia Gas, no action has been taken or is pending for the dissolution or liquidation of any of the Virginia Gas Partnerships. Except as set forth in Exhibit 5.28 attached hereto, Virginia Gas has not been requested to make any additional capital contributions that currently remain unfunded or otherwise outstanding and, to the Knowledge of Virginia Gas, no such additional capital contribution requests are contemplated with respect to any Virginia Gas Partnership.

Section 5.29  Certain Agreements.

     (a)  Virginia Gas and Michael L. Edwards have duly executed and delivered the Change of Control Agreement, dated as of June 13, 2000, in the form previously provided to NUI Holding (the "Edwards Agreement"). The Edwards Agreement is in full force and effect, constitutes the valid and binding agreement of the parties thereto and is enforceable against the parties thereto in accordance with its terms.

     (b)  The transactions contemplated by that certain Contract of Sale, dated as of June 13, 2000, between Virginia Gas, the Town of Saltville, Virginia, and the Saltville Industrial Development Authority, in the form of Exhibit 5.29 to the Original Merger Agreement (the "Saltville Purchase Agreement"), have been consummated in accordance with the terms thereof.

ARTICLE VI

COVENANTS

Section 6.1  Conduct of the Businesses of NUI Holding and Virginia Gas.

     (a)  Except as otherwise expressly provided in this Agreement, during the period from the date of this Agreement to the Effective Time, Virginia Gas and the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) will conduct their respective operations according to their ordinary and usual course of business and consistent with past practice, and will use their respective reasonable best efforts to preserve intact their respective business organizations, to keep available the services of their officers and employees and to maintain satisfactory relationships with licensors, licensees, suppliers, contractors, distributors, customers and others having material business relationships with them (and, with respect to the Virginia Gas Affiliates and the Virginia Gas Partnerships, Virginia Gas will not approve or otherwise take, or refrain from taking, any action in its capacity as a stockholder or partner that is inconsistent with the foregoing). Without limi ting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Time, neither Virginia Gas nor any of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) will, and, with respect to the Virginia Gas Affiliates and the Virginia Gas Partnerships, Virginia Gas will not approve or otherwise take, or refrain from taking, any action that may facilitate or result in the following actions, without the prior written consent of NUI Holding:

        (i)  amend its Certificates or Articles of Incorporation, bylaws, partnership or joint venture agreements or other organizational documents;

        (ii)  authorize for issuance or issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or interests, except as required by the terms of any Virginia Gas Benefit Plan existing on the date hereof, or any options, warrants, rights or other securities outstanding as of the date hereof and disclosed pursuant to this Agreement;

        (iii)  split, combine or reclassify any shares of its capital stock or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, or redeem or otherwise acquire any of its securities or any securities of the Virginia Gas Subsidiaries or the Virginia Gas Partnerships;

        (iv)  (A) incur or assume any Funded Debt (as defined below) not currently outstanding, (B) assume, guarantee, endorse or otherwise become liable or responsible for the obligations of any person except Virginia Gas or a Virginia Gas Subsidiary (other than a Virginia Gas Affiliate), (C) make any loans, advances or capital contributions to, or investments in, any other person, (D) enter into any Contract, or alter, amend, modify or exercise any option under any existing Contract, other than in the ordinary course of business or in connection with the transactions contemplated by this Agreement, (E) authorize any single capital expenditure which is in excess of $50,000 or capital expenditures which are, in the aggregate, in excess of $75,000, other than capital expenditures pursuant to Contracts entered into prior to June 13, 2000, or reflected in Virginia Gas' fiscal 2000 or fiscal 2001 capital budgets furnished to NUI Holding prior to the date hereo f or (F) incur or permit to exist any mortgage, lien, encumbrance, charge, claim, restriction, pledge, security interest or imposition affecting any of its assets, except as disclosed on Exhibit 5.9 attached hereto;

        (v)  adopt or amend (except as may be required by Law or as provided in this Agreement) any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, pension, retirement, deferred compensation, employment, severance or other employee benefit agreements, trusts, plans, funds or other arrangements for the benefit or welfare of any director, officer or employee, or (except for normal increases in the ordinary course of business that are consistent with past practices and that, in the aggregate, do not result in a material increase in benefits or compensation expense) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any existing plan or arrangement (including, without limitation, the granting of stock options, stock appreciation rights, shares of restricted stock or performance units) or enter into any Contract, agreement, commitment or arrangement to do any of the foregoing;

        (vi)  acquire, sell, lease or dispose of any material assets outside the ordinary course of business;

        (vii)  take any action other than in the ordinary course of business and in a manner consistent with past practice with respect to accounting policies or practices;

        (viii)  make any Tax election or settle or compromise any federal, state, local or foreign income Tax liability involving, in the aggregate, an amount in excess of $75,000;

        (ix)  except for the payment of professional fees, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in Virginia Gas' audited consolidated balance sheets as of December 31, 1999, or incurred in the ordinary course of business since the date thereof;

        (x)  hold any meeting of its stockholders except to the extent required by the request of the stockholders entitled to call a meeting under the Virginia Gas bylaws or the DGCL;

        (xi)  take any action that would or is reasonably likely to result in any of the conditions set forth in Article VII not being satisfied as of the Closing Date;

        (xii)  make any filing with any Governmental Authority to materially change rates on file;

        (xiii)  voluntarily engage in any activities which could be reasonably expected to cause a change in Virginia Gas' status under PUHCA; or

        (xiv)  agree in writing or otherwise to take any of the foregoing actions.

     For purposes of this Section, "Funded Debt" shall mean, without duplication, (i) all indebtedness for borrowed money or which has been incurred in connection with the acquisition of assets, (ii) all rentals payable under capitalized leases, and (iii) all guaranties of Funded Debt of others.

     (b)  Except as otherwise expressly provided in this Agreement, prior to the Effective Time, NUI Holding will not, without the prior written consent of Virginia Gas, take any action that would or is reasonably likely to result in any of the conditions set forth in Article VII not being satisfied as of the Closing Date.

     (c)  NUI Holding and Virginia Gas agree that, during the period from the date of this Agreement to the Effective Time: (i) they will cause representatives of their respective companies to meet in person or telephonically, no less frequently than every two weeks, to discuss the operations and business prospects of their companies; and (ii) Virginia Gas will promptly advise NUI Holding of the occurrence of any Material Adverse Effect with respect to the Virginia Gas Companies, and NUI Holding will promptly advise Virginia Gas of the occurrence of any Material Adverse Effect with respect to the NUI Holding Companies.

Section 6.2  No Solicitation.

     (a)  Prior to the Effective Time, Virginia Gas agrees that neither it nor any of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) or any of their respective directors, officers, employees, agents or representatives will, directly or indirectly, (i) solicit, initiate, facilitate or encourage (including by way of furnishing or disclosing non-public information) any inquiries or the making of any proposal with respect to any merger, consolidation or other business combination involving Virginia Gas or any Virginia Gas Subsidiary, or the acquisition of all or any significant part of the assets or capital stock of Virginia Gas or any Virginia Gas Subsidiary (an "Acquisition Transaction") or (ii) negotiate, explore or otherwise engage in discussions with any individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or oth er entity (each, a "Person") (other than NUI Holding and its representatives) with respect to any Acquisition Transaction, or which may reasonably be expected to lead to a proposal for an Acquisition Transaction, or enter into any agreement, arrangement or understanding with respect to any such Acquisition Transaction; provided, however, that Virginia Gas may, in response to an unsolicited written proposal from a third party regarding a Superior Proposal (as hereinafter defined), furnish information to and engage in discussions and negotiations with such third party, but only if the Board of Directors of Virginia Gas determines in good faith, after consultation with its financial advisors and based upon the advice (in the form of a written reasoned opinion) of outside independent counsel, that failing to take such action would result in a breach of the fiduciary duties of such Board of Directors under applicable Law; and provided, further, that with respect to the Virginia Gas Aff iliates, Virginia Gas will not approve or otherwise take, or refrain from taking, any action in its capacity as a stockholder that would permit a Virginia Gas Affiliate to take any action that the Virginia Gas Subsidiaries are prohibited from taking pursuant to the foregoing. It is understood and agreed, without limitation of Virginia Gas' obligations, that any violation of this Section 6.2 by any director, officer, investment banker, financial advisor, attorney or other advisor or representative of Virginia Gas, whether or not such Person is purporting to act on behalf of Virginia Gas, or otherwise, shall be deemed to be a breach of this Section 6.2 by Virginia Gas.

     (b)  Virginia Gas agrees that it and the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates), and their respective directors, officers, employees, agents and representatives, shall immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Person (other than NUI Holding and its representatives) conducted heretofore with respect to any Acquisition Transaction. Virginia Gas agrees to promptly advise NUI Holding in writing of the existence of (y) any inquiries or proposals (or desire to make a proposal) received by (or indicated to), any such information requested from, or any negotiations or discussions sought to be initiated or continued with, Virginia Gas and the Virginia Gas Subsidiaries, or any of their respective directors, officers, employees, agents or representatives, in each case from a Person (other than NUI Holding and its representatives) with respect to an Acquisition Transaction, and (z) the terms thereof, including the identity of such third party and the terms of any financing arrangement or commitment in connection with such Acquisition Transaction, and to update on an ongoing basis or upon NUI Holding's reasonable request, the status thereof. As used herein, "Superior Proposal" means a bona fide, written and unsolicited proposal or offer made by any Person (or group) (other than NUI Holding) with respect to an Acquisition Transaction on terms which, as determined by the Board of Directors of Virginia Gas in good faith and in the exercise of reasonable judgment (based on the written advice of independent financial advisors), is at a higher price and more favorable to Virginia Gas and its stockholders than the transactions contemplated hereby.

Section 6.3  The Registration Statement; Listing.

     (a)  NUI and NUI Holding filed the Registration Statement with the SEC, and the Registration Statement was declared effective by the SEC on October 5, 2000.

     (b)  From the date hereof through the Effective Time, NUI Holding shall:

        (i)  not file any amendment or supplement to the Registration Statement without first furnishing to Virginia Gas a copy thereof for its review and will not file any such proposed amendment or supplement to which Virginia Gas reasonably and promptly objects;

        (ii)  to the extent required by applicable Law, cause the registration or qualification of the NUI Holding Common Stock to be issued upon conversion of shares of Virginia Gas Common Stock in accordance with this Agreement under the state securities or "Blue Sky" laws of each state of residence of a record holder of Virginia Gas Common Stock as reflected in its stock transfer ledger;

        (iii)  promptly advise Virginia Gas (A) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose and (B) of the receipt by NUI Holding of any notification with respect to the suspension of the registration or qualification of NUI Holding Common Stock for sale in any jurisdiction or the institution or threatening of any proceeding for that purpose;

        (iv)  use its best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof; and

        (v)  use its best efforts to cause the shares of NUI Holding Common Stock to be issued upon conversion of shares of Virginia Gas Common Stock in accordance with this Agreement to be listed for trading on the NYSE upon official notice of issuance.

     If, at any time when the Joint Proxy Statement/Prospectus is required to be delivered under the Securities Act or the Exchange Act, any event occurs as a result of which the Joint Proxy Statement/Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Joint Proxy Statement/Prospectus to comply with the Securities Act or the Exchange Act or the respective rules thereunder, Virginia Gas and NUI Holding will cooperate to permit NUI Holding promptly to prepare and file with the SEC an amendment or supplement that will correct such statement or omission or effect such compliance.

Section 6.4  Access to Information; Confidentiality Agreement.

     (a)  Between the date of this Agreement and the Effective Time, Virginia Gas will (i) give to NUI Holding and its authorized representatives reasonable access during normal business hours to all plants, offices, warehouses and other facilities and to all books and records of Virginia Gas and the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates), and will use its best efforts to provide such access with respect to the Virginia Gas Affiliates, (ii) permit NUI Holding to make such inspections as it may reasonably request and (iii) cause its officers and those of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) to furnish such financial and operating data and other information in the possession of Virginia Gas or to which Virginia Gas has the right to obtain with respect to the business and properties of the Virginia Gas Companies as may from time to time reasonably be requested. Subject to Section 6.7 hereof, all such info rmation shall be kept confidential in accordance with the Confidentiality Agreement.

        (b)  Notwithstanding the execution of this Agreement, the Confidentiality Agreement shall remain in full force and effect through the Effective Time and shall be binding upon NUI Holding as if it were a party thereto. Each party hereto waived the provisions of the Confidentiality Agreement as and to the extent necessary to permit the solicitation of votes of the stockholders of Virginia Gas pursuant to the Joint Proxy Statement/Prospectus and to permit consummation of the transactions contemplated hereby. Each party further acknowledges that the Confidentiality Agreement shall survive any termination of this Agreement pursuant to Section 8.1 hereof.

        (c)  The Virginia Gas Companies shall provide to NUI Holding and its agents access to all real property to which any Virginia Gas Company has, or has the right to obtain, access for the purpose of conducting Phase I environmental assessments. If the results of any Phase I environmental site assessment relating to a location set forth on Exhibit 6.4 attached hereto reasonably indicates that a Phase II environmental site assessment is prudent under the circumstances, Virginia Gas shall provide to NUI Holding and its agents access to conduct such Phase II environmental site assessment. If the results of any Phase I environmental site assessment relating to a location other than a location set forth on Exhibit 6.4 attached hereto reasonably indicates that a Phase II environmental site assessment is prudent under the circumstances, NUI Holding may request that Virginia Gas provide to NUI Holding and its agents access to conduct such Phas e II environmental site assessment. Subject to the provisions of Section 8.1(d)(iii) hereof, Virginia Gas may grant or deny such access in its sole discretion.

Section 6.5  Best Efforts. Subject to the terms and conditions herein provided and subject to fiduciary obligations under applicable Law as advised by counsel, each of the parties hereto agrees to use its best efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper and advisable under applicable Law, to consummate and make effective the transactions contemplated by this Agreement. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each party to this Agreement shall take all such necessary action. NUI Holding and Virginia Gas will execute any additional instruments necessary to consummate the transactions contemplated hereby.

Section 6.6  Consents. Virginia Gas and NUI Holding each will use its best efforts to obtain consents of, and make all required filings with, all third parties and Governmental Authorities necessary to the consummation of the transactions contemplated by this Agreement, including, without limitation, all consents required with respect to the HSR Act (it being understood that early termination of the waiting period under the HSR Act was granted on September 27, 2000) and the approval of the VSCC.

Section 6.7  Public Announcements. Virginia Gas and NUI Holding will consult with each other before issuing any press release or otherwise making any public statement with respect to this Agreement, the Merger or the transactions contemplated herein and shall not issue any such press release or make any such public statement prior to such consultation or as to which the other party promptly and reasonably objects, except as may be required by Law in the written reasoned opinion of such party's counsel or by obligations pursuant to any listing agreement with any national securities exchange or inter-dealer quotation system, in which case the party proposing to issue such press release or make such public announcement shall use its best efforts to consult in good faith with the other party before issuing any such press release or making any such public announcements.

Section 6.8  Affiliates. Virginia Gas shall use its best efforts to cause each principal executive officer, each director and each other person who may be deemed to be an "affiliate," for purposes of Rule 145 under the Securities Act, of Virginia Gas to deliver to NUI Holding at or prior to the Effective Time a written agreement (substantially in the form of Exhibit 6.8 attached hereto) to the effect that such person will not offer to sell, sell or otherwise dispose of any shares of NUI Holding Common Stock issued in the Merger, except, in each case, pursuant to an effective registration statement or in compliance with Rule 145, as amended from time to time, or in a transaction which, in the opinion of legal counsel satisfactory to NUI Holding, is exempt from the registration requirements of the Securities Act.

Section 6.9  Letter of Virginia Gas' Accountants. Virginia Gas shall use its best efforts to cause to be delivered to NUI Holding a letter from Arthur Anderson, LLP, dated the Closing Date, in form and substance reasonably satisfactory to NUI Holding and Virginia Gas and customary in scope and substance for agreed-upon procedures letters delivered by independent accountants in connection with registration statements similar to the Registration Statement.

Section 6.10  Letter of NUI's Accountants. NUI Holding shall use its best efforts to cause to be delivered to Virginia Gas a letter from Arthur Andersen, LLP, dated the Closing Date, in form and substance reasonably satisfactory to Virginia Gas and NUI Holding and customary in scope and substance for agreed-upon procedures letters delivered by independent accountants in connection with registration statements similar to the Registration Statement.

Section 6.11  Indemnification; Insurance.

     (a)  Except as may be limited by applicable Law, from the Effective Time and for a period of six years thereafter, NUI Holding shall cause Merger Subsidiary to indemnify the directors and officers of Virginia Gas on terms no less favorable than those provided in the Amended and Restated Certificate of Incorporation and Bylaws of Virginia Gas on the date of this Agreement with respect to matters occurring prior to the Effective Time.

     (b)  NUI Holding shall cause to be maintained in effect for six years from the Effective Time the current policies for directors' and officers' liability insurance maintained by Virginia Gas (provided that NUI Holding may substitute therefor policies of at least the same coverage containing terms and conditions that are not materially less advantageous) with respect to matters occurring prior to the Effective Time, to the extent such insurance is available to NUI Holding in the market.

Section 6.12  PUHCA and the Natural Gas Act.

     (a)  None of the parties hereto shall, nor shall any party permit any of its Subsidiaries to, without the other party's consent, which consent shall not be unreasonably withheld, conditioned or delayed, engage in any activities that would (i) cause a change in its status or that of its Subsidiaries under PUHCA, including, without limitation, the registration by either party under PUHCA or (ii) result in jurisdiction by FERC over the Merger.

     (b)  None of the parties hereto shall, nor shall any party permit any of its Subsidiaries to, without the other party's consent, which consent shall not be unreasonably withheld, conditioned or delayed, fail to take such actions that are necessary to (i) preserve existing exemptions from registration under PUHCA or (ii) allow the Merger to proceed without a requirement for approval by FERC.

ARTICLE VII

CONDITIONS PRECEDENT TO CONSUMMATION OF THE MERGER

Section 7.1  Conditions Precedent to Each Party's Obligation to Effect the Merger. The respective obligation of each party to consummate the Merger is subject to the satisfaction at or prior to the Effective Time of the following conditions precedent:

     (a)  the transactions contemplated in this Agreement shall have been adopted by the affirmative vote of the stockholders of Virginia Gas by the requisite vote in accordance with the DGCL (it being understood that such adoption occurred at the Stockholder Meeting);

     (b)  no order, decree or injunction shall have been enacted, entered, promulgated or enforced by any United States court of competent jurisdiction or any Governmental Authority which prohibits the consummation of the Merger; provided, however, that the parties hereto shall use their best efforts to have any such order, decree or injunction vacated or reversed;

     (c)  the Registration Statement shall remain effective in accordance with the provisions of the Securities Act, and no stop order suspending such effectiveness shall have been issued and remain in effect;

     (d)  (i) the waiting period applicable to the Merger under the HSR Act shall have terminated or expired (it being understood that early termination of such waiting period was granted by the Federal Trade Commission in September 27, 2000), (ii) all applicable requirements of the Exchange Act shall have been satisfied, (iii) all NUI Holding Required Consents and Virginia Gas Required Consents shall have been made or obtained (as the case may be) and become final and (iv) any applicable filings under state securities, "Blue Sky" or takeover laws shall have been made;

     (e)  the receipt by the parties hereto, based on customary assumptions and on representations set forth in certificates of officers of NUI Holding and Virginia Gas, of the opinion of Hunton & Williams addressed to the board of directors of NUI Holding and the board of directors of Virginia Gas (dated the date of the Effective Time) to the effect that, for United States federal income tax purposes, (i) the Merger will constitute a "reorganization" under Section 368(a) of the Code, (ii) no gain or loss will be recognized by NUI Holding, Merger Subsidiary or Virginia Gas upon consummation of the Merger, (iii) no gain or loss will be recognized by stockholders of Virginia Gas (other than stockholders who are nonresident aliens or foreign persons or otherwise subject to special treatment under federal income tax law) upon the exchange of shares of Virginia Gas Common Stock solely for shares of NUI Holding Common Stock (including any fractional share interes t) in the Merger, (iv) the aggregate basis of shares of NUI Holding Common Stock (including any fractional share interest) received by a Virginia Gas stockholder in the Merger will be the same as the aggregate basis of the shares of Virginia Gas Common Stock exchanged therefor, (v) the holding period for shares of NUI Holding Common Stock (including any fractional share interest) received by a Virginia Gas stockholder in the Merger will include the holding period for the shares of Virginia Gas Common Stock exchanged therefor, if such shares of Virginia Gas Common Stock are held as a capital asset at the Effective Time and (vi) cash received in lieu of a fractional share of NUI Holding Common Stock will be treated as having been received as full payment in exchange for such fractional share; and

     (f)  the shares of NUI Holding Common Stock required to be issued hereunder shall have been listed for trading on the NYSE subject to official notice of issuance.

Section 7.2  Conditions Precedent to Obligations of Virginia Gas. The obligations of Virginia Gas to consummate the Merger are subject to the satisfaction or waiver at or prior to the Effective Time of the following conditions precedent:

     (a)  except as set forth on Exhibit 4.6 attached hereto, there shall have occurred no material adverse change in the business, financial condition or results of operations of the NUI Holding Companies, taken as a whole, from June 13, 2000, to the Effective Time;

     (b)  the representations and warranties of NUI Holding contained in Article IV shall be true and correct in all respects (as to representations and warranties qualified or limited by the term "Material Adverse Effect," the word "material," or phrases of like import), and in all material respects (as to representations and warranties not so qualified or limited) when made and at and as of the Effective Time with the same force and effect as if those representations and warranties had been made at and as of such time except (i) to the extent such representations and warranties speak as of a specified earlier date, and (ii) as otherwise contemplated or permitted by this Agreement;

     (c)  NUI Holding shall, in all material respects, have performed all obligations and complied with all covenants necessary to be performed or complied with by it under this Agreement on or before the Effective Time;

     (d)  Virginia Gas shall have received a certificate of the President and Chief Executive Officer or Senior Vice President and Chief Operating Officer of NUI Holding, in form satisfactory to counsel for Virginia Gas, certifying fulfillment of the matters referred to in paragraphs 0 through 0 of this Section 7.2;

     (e)  the opinion of CIBC included as "Annex C" to the Joint Proxy/Prospectus shall remain in full force and effect and shall not have been amended, modified, repudiated or rejected;

     (f)  all proceedings, corporate or other, to be taken by NUI Holding in connection with the transactions contemplated by this Agreement, and all documents incident thereto, shall be reasonably satisfactory in form and substance to Virginia Gas and counsel for Virginia Gas, and NUI Holding shall have made available to Virginia Gas for examination the originals or true and correct copies of all documents that Virginia Gas may reasonably request in connection with the transactions contemplated by this Agreement; and

     (g)  Virginia Gas shall have received the accountants' letter contemplated by Section 6.10 hereof to be received by it.

Section 7.3  Conditions Precedent to Obligations of NUI Holding. The obligations of NUI Holding to consummate the Merger are subject to the satisfaction or waiver at or prior to the Effective Time of the following conditions precedent:

     (a)  except as set forth on Exhibit 5.6 attached hereto, there shall have occurred no material adverse change in the business, financial condition or results of operations of the Virginia Gas Companies, taken as a whole, from June 13, 2000, to the Effective Time;

     (b)  the representations and warranties of Virginia Gas contained in Article V shall be true and correct in all respects (as to representations and warranties qualified or limited by the term "Material Adverse Effect," the word "material," or phrases of like import), and in all material respects (as to representations and warranties not so qualified or limited) when made and at and as of the Effective Time with the same force and effect as if those representations and warranties had been made at and as of such time except (i) to the extent such representations and warranties speak as of a specified earlier date, and (ii) as otherwise contemplated or permitted by this Agreement;

     (c)  Virginia Gas shall, in all material respects, have performed all obligations and complied with all covenants necessary to be performed or complied with by it under this Agreement on or before the Effective Time;

     (d)  NUI Holding shall have received a certificate of the President and Chief Executive Officer or Vice President and Chief Financial Officer of Virginia Gas, in form satisfactory to counsel for NUI Holding, certifying fulfillment of the matters referred to in paragraphs 0 through 0 of this Section 7.3;

     (e)  The Edwards Agreement shall be in full force and effect in accordance with its terms and shall not have been amended, modified, repudiated or rejected;

     (f)  all proceedings, corporate or other, to be taken by Virginia Gas in connection with the transactions contemplated by this Agreement, and all documents incident thereto, shall be reasonably satisfactory in form and substance to NUI Holding and NUI Holding's counsel, and Virginia Gas shall have made available to NUI Holding for examination the originals or true and correct copies of all documents that NUI Holding may reasonably request in connection with the transactions contemplated by this Agreement;

     (g)  NUI Holding shall have received from each person specified in Section 6.8 hereof the written agreement referred to in such Section 6.8;

     (h)  NUI Holding shall have received the accountants' letter contemplated by Section 6.9 hereof to be received by it;

     (i)  No event shall have occurred that would, with or without the passage of time or compliance with any applicable notice requirements or both constitute a default under or give rise to a right of termination with respect to (i) the Firm Pipeline Service Agreement, dated as of February 5, 1999, by and between Virginia Gas Pipeline Company and Roanoke Gas Company and (ii) the Firm Pipeline Service Agreement, dated as of April 17, 1997, by and between Virginia Gas Pipeline Company and United Cities Gas Company (collectively, the "Pipeline Company Contracts"), and the Pipeline Company Contracts shall be in full force and effect in accordance with their terms; and

     (j)  No Virginia Gas Affiliate or Virginia Gas Partnership shall have taken any of the actions described in Section 6.1 hereof which actions, considered in the aggregate, could reasonably be expected to have a Material Adverse Effect on the Virginia Gas Companies.

ARTICLE VIII

TERMINATION; AMENDMENT; WAIVER

Section 8.1  Termination. This Agreement may be terminated and the Merger contemplated hereby may be abandoned at any time notwithstanding adoption thereof by the stockholders of Virginia Gas, but prior to the Effective Time:

     (a)  by mutual written consent of Virginia Gas and NUI Holding;

     (b)  by Virginia Gas or NUI Holding, if the Effective Time shall not have occurred on or before June 13, 2001 (provided that the right to terminate this Agreement under this Section 8.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of or has resulted in the failure of the Effective Time to occur on or before such date);

     (c)  by Virginia Gas if there has been a material breach by NUI Holding of any representation, warranty, covenant or agreement set forth in this Agreement, which breach has not been cured within ten business days following receipt by NUI Holding of notice of such breach;

     (d)  by NUI Holding if (i) there has been a material breach by Virginia Gas of any representation, warranty, covenant or agreement set forth in this Agreement, which breach has not been cured within ten business days following receipt by Virginia Gas of notice of such breach, (ii) the Board of Directors of Virginia Gas withdraw, amend or modify in any manner adverse to NUI Holding their recommendation of the transactions contemplated by this Agreement, (iii) Virginia Gas elects not to provide to NUI Holding and its agents access to conduct a Phase II environmental site assessment at a location other than those set forth in Exhibit 6.4 attached hereto following a request by NUI Holding for such access pursuant to Section 6.4 hereof, or (iv) the Average NUI Holding Price is less than $19.00 and NUI Holding provides written notice of termination to Virginia Gas prior to the close of business on the second trading day following the Determination Date;

     (e)  by Virginia Gas, if (1) it, based on the advice of outside legal counsel to Virginia Gas that such action is necessary in order for the Board of Directors of Virginia Gas to comply with its fiduciary duties under applicable Law, subject to complying with the terms of this Agreement, enters into a binding written agreement concerning a transaction that constitutes a Superior Proposal and Virginia Gas notifies NUI Holding in writing that it intends to enter into such an agreement, attaching the most current version of such agreement to such notice, (2) NUI Holding does not make, within two business days of receipt of Virginia Gas' written notification of its intention to enter into a binding agreement for a Superior Proposal, an offer to enter into an amendment to this Agreement such that the Board of Directors of Virginia Gas determines, in good faith after consultation with its financial advisors, that this Agreement as so amended is at least as favorable, from a financial point of view, to the stockholders of Virginia Gas as the Superior Proposal and (3) Virginia Gas prior to such termination pays to NUI Holding in immediately available funds any fees required to be paid pursuant to Section 8.3 hereof. Virginia Gas agrees (A) that it will not enter into a binding agreement referred to in clause (1) above until at least the third business day after it has provided the notice to NUI Holding required thereby and (B) to notify NUI Holding promptly if its intention to enter into a written agreement referred to in its notification shall change at any time after giving such notification; or

     (f)  by Virginia Gas or NUI Holding, if any court of competent jurisdiction in the United States or other United States Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the Merger and such order, decree, ruling or other action shall have become final and nonappealable.

Section 8.2  Effect of Termination. If this Agreement is terminated under Section 0 hereof and the Merger is not consummated, this Agreement shall forthwith become void and have no effect, without any liability on the part of either party or its directors, officers or stockholders, other than the provisions of Section 6.4(b), this Section 8.2, Section 8.3 and Section 9.8.

Section 8.3  Termination Fee.

     (a)  If this Agreement is terminated (i) by NUI Holding pursuant to Section 8.1(b) hereof, and the failure of the Effective Time to occur has been caused by or is attributable to any failure by Virginia Gas to fulfill any of its obligations under this Agreement, (ii) by NUI Holding pursuant to Section 8.1(d) (i)or (ii) hereof or (iii) by Virginia Gas pursuant to Section 8.1(c) hereof, and, in the case of any of the foregoing, if Virginia Gas is not entitled to terminate this Agreement by reason of Section 8.1(c) hereof, then Virginia Gas shall promptly (and in any event within five days of receipt by Virginia Gas of written notice from NUI Holding) pay to NUI Holding (by wire transfer of immediately available funds to an account designated by NUI Holding) an amount equal to all documented out of pocket expenses and fees incurred by NUI Holding in connection with the transactions contemplated by this Agreement (such expenses to be r eferred to herein as the "Out of Pocket Expenses," and to include fees and expenses payable to all legal, financial, accounting, public relations and other professional advisors) and a termination fee in an amount equal to (i) $2.5 million, plus (ii) an amount equal to the product of the amount of additional outstanding debt incurred by the Virginia Gas Companies from and after June 13, 2000, times .04. If this Agreement is terminated by NUI Holding pursuant to Section 8.1(d)(iii) hereof, and if Virginia Gas is not entitled to terminate this Agreement by reason of Section 8.1(c) hereof, then Virginia Gas shall promptly (and in any event within five days of receipt by Virginia Gas of written notice from NUI Holding) pay to NUI Holding (by wire transfer of immediately available funds to an account designated by NUI Holding) an amount equal to NUI Holding's Out-of-Pocket Expenses.

     (b)  If this Agreement is terminated by Virginia Gas (i) pursuant to Section 8.1(b) hereof, and the failure of the Effective Time to occur has been caused by or is attributable to any failure by NUI Holding to fulfill any of its obligations under this Agreement or (ii) pursuant to Section 8.1(c) hereof and, in the case of either of the foregoing, if NUI Holding is not otherwise entitled to terminate this Agreement, then NUI Holding shall promptly (and in any event within five days of receipt by NUI Holding of written notice from Virginia Gas) pay to Virginia Gas (by wire transfer of immediately available funds to an account designated by Virginia Gas) an amount equal to the Out-of-Pocket Expenses of Virginia Gas and a termination fee in an amount equal to $2.5 million.

     (c)  The termination fees contemplated in this Section 8.3 shall constitute liquidated damages for any termination of this Agreement in the circumstances set forth herein, as the actual damages of the parties in such circumstances would be difficult or impossible to prove. Such termination fees, together with the expense reimbursement provisions of this Section 8.3, shall be the sole remedies of the parties hereto in the event this Agreement is terminated pursuant to Section 8.1 hereof.

Section 8.4  Amendment. This Agreement may be amended by action taken by NUI Holding, Merger Subsidiary and Virginia Gas at any time but, because the Original Merger Agreement has been adopted by the stockholders of Virginia Gas, no amendment shall be made that would have any of the effects specified in DGCL Section 251(d) without the approval of the stockholders affected thereby. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

Section 8.5  Extension; Waiver. At any time prior to the Effective Time, any party hereto may (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document, certificate or writing delivered pursuant hereto by the other parties hereto or (c) waive compliance with any of the agreements or conditions contained herein by the other parties hereto. Any agreement on the part of any party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

ARTICLE IX

MISCELLANEOUS

Section 9.1  Entire Agreement; Assignment. This Agreement (a) constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes, except as set forth in Section 6.4(b) hereof, all other prior agreements and understandings, both written and oral (including, without limitation, the Original Merger Agreement), between the parties or any of them with respect to the subject matter hereof and (b) shall not be assigned by operation of law or otherwise.

Section 9.2  Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by cable, telecopy, telegram or telex, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties as follows:

if to NUI Holding or Merger Subsidiary:
		NUI Corporation
		550 Route 202-206
		P.O. Box 760
		Bedminster, New Jersey 07921-0760
		Attention: James R. Van Horn, Esq.
		Facsimile: (908) 781-0718
with a copy to:
		Hunton & Williams
		Riverfront Plaza, East Tower
		951 East Byrd Street
		Richmond, Virginia 23219-4074
		Attention: Gary E. Thompson, Esq.
		Facsimile: (804) 788-8218
if to Virginia Gas:
	Virginia Gas Company
	200 East Main Street
	Abingdon, Virginia 24210
	Attention: Mr. Michael L. Edwards
	Facsimile: (540) 619-5254
with a copy to:
	Penn, Stuart & Eskridge
	P. O. Box 2288
	208 East Main Street
	Abingdon, Virginia 24210
	Attention: Elizabeth A. McClanahan, Esq.
	Facsimile: (540) 628-4918

or to such other address as the person to whom notice is given may have previously furnished to the others in writing in the manner set forth above.

Section 9.3  Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. The parties hereto specifically authorize any action, suit or proceeding to be instituted and prosecuted in any state or federal court located in Delaware. The parties hereto, whether or not Delaware residents, hereby waive any plea or claim of lack of personal jurisdiction or improper venue in any such action brought to enforce this Agreement.

Section 9.4  Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

Section 9.5  Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and, except for the rights of persons entitled to the indemnification and insurance benefits pursuant to Section 6.11 hereof, nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

Section 9.6  Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

Section 9.7  Specific Performance. The parties hereto agree that irreparable damage would occur in the event any of the provisions of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof.

Section 9.8  Fees and Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses, whether or not the Merger is consummated, except that the expenses incurred in connection with printing and mailing the Joint Proxy Statement/Prospectus and printing the Registration Statement, and the filing fees related to the Registration Statement and the HSR filing, shall be shared equally by NUI Holding and Virginia Gas.

Section 9.9  Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to either party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner, to the end that the transactions contemplated hereby are fulfilled to the extent possible.

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed on its behalf by its officer thereunto duly authorized, all as of the day and year first above written.

NUI CORPORATION

By:   /s/ A. Mark Abramovic  

Name: A. Mark Abramovic

Its:   Senior Vice President, Chief Operating

Officer and Chief Financial Officer

VGC ACQUISITION, INC.

By:   /s/ A. Mark Abramovic  

Name: A. Mark Abramovic

Its:   Vice President and Chief Financial Officer

VIRGINIA GAS COMPANY

By:   /s/ Michael L. Edwards  

Name: Michael L. Edwards

Its:   President and Chief Executive Officer

Acknowledgment:

NUI Utilities, Inc. (formerly NUI Corporation),

a New Jersey corporation, as a party to the

Original Merger Agreement, acknowledges

and agrees to the amendment and restatement

thereof by this Agreement.

NUI UTILITIES, INC.

By:  /s/ A. Mark Abramovic

Name:  A. Mark Abramovic

Its:  Treasurer

EX-12 8 exhibit12.htm

EXHIBIT NO. 12

NUI CORPORATION AND SUBSIDIARIES
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in thousands)

	Year Ended September 30
	2001	2000	1999	1998	1997
Income from continuing operations   before  income taxes	$38,713	$44,893	$41,718	$21,024	$30,172
Add (deduct):
Adjustment related to equity        investments	5,295	(2,187)	(631)	(402)	(2,317)
Add:
Interest element of rentals
charged to income (a)	2,890	2,288	3,144	3,239	3,299
Interest expense	25,067	21,708	21,836	20,496	21,374
	______	______	______	______	______
Earnings as defined	$71,965	$66,702	$66,067	$44,357	$52,528
	=====	=====	=====	=====	=====
Interest expense	$25,067	$21,708	$21,836	$20,496	$21,374
Capitalized interest	1,548	754	83	272	186
Interest element of rentals charged
to income (a)	2,890	2,288	3,144	3,239	3,299
	______	______	______	______	______
Fixed charges as defined	$29,505	$24,750	$25,063	$24,007	$24,859
	======	======	======	======	======
Consolidated ratio of earnings to fixed charges	2.44	2.70	2.64	1.85	2.11
	___	___	___	___	___

(a)   Includes the interest element of rentals where determinable plus 1/3 of rental expense where no readily defined interest element can be determined.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-21

EXHIBIT NO. 21

SUBSIDIARIES OF NUI CORPORATION

     NUI Utilities, Inc. (a New Jersey Corporation), NUI Capital Corp. (a Florida Corporation), Virginia Gas Company (a Delaware Corporation) and NUI Saltville Storage, Inc. (a Delaware Corporation) are wholly-owned subsidiaries of NUI Corporation.

     NUI Energy, Inc. (a Delaware Corporation), NUI Energy Brokers, Inc. (a Delaware Corporation), Utility Business Services, Inc. (a New Jersey Corporation), NUI Environmental Group, Inc. (a New Jersey Corporation), NUI Energy Solutions Inc. (a New Jersey Corporation), NUI Sales Management, Inc. (a Delaware Corporation), NUI Services, Inc. (a New Jersey Corporation), NUI International, Inc. (a Delaware Corporation) and NUI Telecom, Inc. (formerly known as International Telephone Group, Inc. (a New Jersey Corporation) are wholly-owned subsidiaries of NUI Capital Corp.

     Virginia Gas Exploration Company, Virginia Gas Pipeline Company, Virginia Gas Marketing Company, Virginia Gas Storage Company and Virginia Gas Distribution Company (all Virginia Corporations) are wholly-owned subsidiaries of Virginia Gas Company.

     TIC Enterprises, LLC (a Delaware Limited Liability Company) is a wholly-owned subsidiary of NUI Sales Management, Inc.

     NUI/Caritrade International, L.L.C. (a Delaware Limited Liability Company) is a 90 percent owned subsidiary of NUI International, Inc.

     Saltville Gas Storage Company, LLC (a Virginia Limited Liability Company) is a 50 percent owned subsidiary of NUI Saltville Storage, Inc.

EX-23

EXHIBIT NO. 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by reference of our report dated November 8, 2001, included in this Form 10-K of NUI Corporation for the year ended September 30, 2001, into the Company's previously filed Registration Statements File No. 33-56509 relating to Amendment No. 1 to Form S-3 Registration Statement, File No. 33-51459 relating to NUI Direct, File No. 33-57183 relating to the Savings and Investment Plan, File No. 33-24169 relating to the 1988 Stock Plan, File No. 333-02425 relating to the 1996 Stock Option and Stock Award Plan, File No. 333-02421 relating to the Employee Stock Purchase Plan, File No. 333-02423 relating to the 1996 Director Stock Purchase Plan, File No. 333-92817 relating to Form S-3 Registration Statement and File No. 333-46036 relating to the Virginia Gas Company Registration Statement.

ARTHUR ANDERSEN LLP

New York, New York
December 21, 2001

EX-10.43

Exhibit 10.43

NUI CORPORATION

1996 STOCK OPTION, STOCK AWARD AND INCENTIVE PLAN

As Amended and Restated November 26, 2001

     1.  Purpose.  The purpose of the NUI Corporation 1996 Stock Option, Stock Award and Incentive Plan, as amended and restated (the "Plan"), is to maintain the ability of NUI Corporation (the "Company") and its subsidiaries to attract and retain highly qualified and experienced employees and directors and to give such employees and directors a continued proprietary interest in the success of the Company and its subsidiaries. Pursuant to the Plan, eligible employees will be provided the opportunity to participate in the enhancement of shareholder value through the grants of options, stock appreciation rights, awards of restricted stock and deferred restricted stock, bonuses payable in stock, cash- or share-denominated performance awards, and or any combination thereof. Eligible directors will participate through awards of deferred restricted stock as set forth in Section 7. Employees and directors who participate or become eligible to participate in the Plan from time to time are referred to collectively herein as "Participants."

     The term "subsidiary" as used in the Plan shall mean any present or future corporation which is or would be a "subsidiary corporation" of the Company as the term is defined in Section 424(f) of the Internal Revenue Code of 1986, as amended from time to time (the "Code").

     2.  Administration of the Plan.  The Plan shall be administered by a committee (the "Committee") which is appointed from time to time by the Board of Directors of the Company (the "Board"). The Committee shall consist of two or more members of the Board who are not employees of the Company or any subsidiary or affiliate. In appointing members of the Committee, the Board will consider whether a member is or will be a "Non-Employee Director" within the meaning of Rule 16b-3(b)(3) under the Securities Exchange Act of 1934 and an "outside director" within the meaning of Regulation 1.162-27(e)(3) under Code Section 162(m) (a "Qualified Member"), but Committee members are not required to be Qualified Members at the time of appointment or during their term of service on the Committee. The full Board may perform any function of the Committee hereunder, in which case the term "Committee" shall refer to the Board. A majority of the members of the Committe e shall constitute a quorum. The majority vote of the members of the Committee present at a meeting at which a quorum is present shall be required for the Committee to take action under the Plan, except that the Committee otherwise may take action in any manner permitted by the New Jersey Business Corporation Act.

     In administering the Plan, the Committee may adopt rules and regulations for carrying out the Plan. The interpretation and decision made by the Committee with regard to any question arising under the Plan shall be final and conclusive on Participants. Subject to the terms of the Plan, the Committee shall determine the Participants to whom, and the time or times at which, awards shall be made and the number of shares, stock appreciation rights or other awards to be made under the Plan, and the terms and conditions of such awards, including the periods for which options will be outstanding. The Committee may delegate authority to take actions under the Plan to the extent permitted under the New Jersey Business Corporation Act.

     Each award made pursuant to the Plan shall be evidenced by an Option Agreement or Award Agreement (the "Agreement"). The Committee shall prescribe the form of all Agreements.

     3.  Shares of Stock Subject to the Plan; Per-Person Limitations. The maximum number of shares of the voting common stock of the Company, no par value (the "Common Stock"), that may be issued or delivered in connection with awards under the Plan is 1,800,000 shares, subject to adjustment as provided in Section 14 hereof. The number of shares of Common Stock which may be issued and delivered in connection with awards other than options and stock appreciation rights granted on or after January 22, 2002 shall not exceed 50% of the total number of shares reserved under the Plan. Any shares subject to an option or award which for any reason expires or is terminated or settled without delivery of shares shall again be available for awards under the Plan. Shares subject to the Plan may be either authorized and unissued shares or issued shares repurchased or otherwise acquired by the Company or its subsidiaries.

     In each fiscal year during any part of which the Plan is in effect, a participant may be granted options and other awards relating to stock up to his or her "Annual Limit." A participant's Annual Limit in any fiscal year after fiscal 2001 shall equal 250,000 shares of Common Stock plus the amount of the Participant's unused Annual Limit relating to shares as of the close of the previous fiscal year, subject to adjustment as provided in Section 14. In the case of an award which is not valued in a way in which the limitation on awards relating to shares would operate as an effective limitation satisfying Treasury Regulation 1.162-27(e)(4), the maximum cash amount or value of such an award that may be earned by a Participant during any fiscal year after 2001 shall be equal to the Participant's Annual Limit, which for this purpose shall equal $2.5 million plus the amount of the Participant's unused cash Annual Limit as of the close of the previous fiscal year. For purposes of this Section 3, (i) "earning" means satisfying performance conditions so that an amount becomes payable, without regard to whether it is to be paid currently or on a deferred basis or continues to be subject to any service requirement or other non-performance condition; and (ii) a Participant's Annual Limit is used to the extent a number of shares or cash amount may be potentially earned or paid under an award, regardless of whether such amount or shares are in fact earned or paid.

     4. Eligibility. Salaried employees, including officers, of the Company and its divisions and subsidiaries are eligible to be granted options, restricted stock and other awards under the Plan and to receive incentive awards payable in cash and other awards in accordance with the Plan. Subject to the terms of the Plan, the employees who shall receive awards under the Plan, and the criteria to be used in determining the award to be made, shall be determined from time to time by the Committee, in its sole discretion, from among those eligible, which may be based upon information furnished to the Committee by the Company's management, and the Committee shall determine, in its sole discretion, the number of shares to be covered by each award and the amount of any cash granted to each employee selected. Non-employee directors of the Company are also eligible to participate in the Plan in accordance with Section 7.

     5. Terms and Conditions of Stock Options. Options granted under the Plan may be either incentive stock options, as defined in Section 422 of the Code, or options other than incentive stock options. Each option shall be subject to all the applicable provisions of the Plan, including the following terms and conditions, and to such other terms and conditions not inconsistent therewith as the Committee shall determine:

     (a)     The option price per share shall be determined by the Committee. However, the option price per share shall not be less than 100% of the fair market value of a share of Common Stock at the time the option is granted. For purposes of the Plan, unless otherwise determined by the Committee, fair market value shall be the mean between the highest and lowest prices at which the Common Stock is traded on a national securities exchange on the relevant date; provided, however, if there is no sale of the Common Stock on such exchange on such date, fair market value shall be the mean between the bid and asked prices on such exchange at the close of the market on such date.

     (b)     Each option shall be exercisable subject to the attainment of such performance goals, and/or during such period ending not later than ten years from the date it was granted, as may be determined by the Committee and stated in the Agreement. In no event may an option be exercised more than ten years from the date the option was granted.

     (c)     An option shall not be exercisable with respect to a fractional share of Common Stock or with respect to the lesser of fifty (50) shares or the full number of shares then subject to the option. No fractional shares of Common Stock shall be issued upon the exercise of an option. If a fractional share of Common Stock shall become subject to an option by reason of a stock dividend or otherwise, the optionee shall not be entitled to exercise the option with respect to such fractional share.

     (d)     Each option shall state whether it will or will not be treated as an incentive stock option.

     (e)      Each option will be deemed exercised on the day written notice specifying the number of shares to be purchased, accompanied by payment in full including, if required by law, applicable taxes, is received by the Company. Payment, except as provided in the Agreement, shall be:

(i)  in United States dollars by check or bank draft; or

(ii)  by tendering to the Company shares of Common Stock already owned for at least six months (unless the tendered shares otherwise qualify as "mature" shares under APB 25) by the person exercising the option, which may include shares received as the result of a prior exercise of an option, and having a fair market value, as determined in accordance with Section 5(a), on the date on which the option is exercised equal to the cash exercise price applicable to such option; or

(iii)  by a combination of United States dollars and shares of Common Stock valued as aforesaid.

No optionee shall have any rights to dividends or other rights of a shareholder with respect to shares of Common Stock subject to his or her option until he or she has given written notice of exercise of such option and paid in full for such shares.

     (f)      Notwithstanding the foregoing, the Committee may, in its sole discretion, include in the grant of an option the right of a grantee (hereinafter referred to as a "stock appreciation right") to elect, in the manner described below, in lieu of exercising his or her option for all or a portion of the shares of Common Stock covered by such option, to relinquish his or her option with respect to any or all of such shares and to receive from the Company a payment equal in value to (x) the fair market value, as determined in accordance with Section 5(a), of a share of Common Stock on the date of such election, multiplied by the number of shares as to which the grantee shall have made such election, less (y) the exercise price for that number of shares of Common Stock for which the grantee shall have made such election under the terms of such option. A stock appreciation right shall be exercisable at the time the tandem option is exercisable, and the "expiration date" for the stock appreciation right shall be the expiration date for the tandem option. A grantee who makes such an election shall receive payment in the sole discretion of the Committee (i) in cash equal to such excess; or (ii) in the nearest whole number of shares of Common Stock having an aggregate fair market value, as determined in accordance with Section 5(a) as of the date of election, which is not greater than the cash amount calculated in (ii) above; or (iii) in a combination of (i) and (ii) above. A stock appreciation right may be exercised only when the amount described in (x) above exceeds the amount described in (y) above. An election to exercise stock appreciation rights shall be deemed to have been made on the day written notice of such election, addressed to the Committee, is received by the Company. An option or any portion thereof with respect to which a grantee has elected to exercise a stock appreciation right shall be surrendered to the Company and such option shall t hereafter remain exercisable according to its terms only with respect to the number of shares as to which it would otherwise be exercisable, less the number of shares with respect to which stock appreciation rights have been exercised. The grant of a stock appreciation right shall be evidenced by an Agreement. The Agreement evidencing stock appreciation rights shall be personal and will provide that the stock appreciation rights will not be transferable by the grantee otherwise than by will or the laws of descent and distribution and that they will be exercisable, during the lifetime of the grantee, only by him or her.

    (g)     Except as provided in the applicable Agreement, an option may be exercised only if at all times during the period beginning with the date of the granting of the option and ending on the date of such exercise, the grantee was an employee of either the Company (or of a division) or subsidiary of the Company or of another corporation referred to in Section 421(a)(2) of the Code. The Agreement shall provide whether, and to what extent, an option may be exercised after termination of continuous employment, but any such exercise shall in no event be later than the termination date of the option. If the grantee should die, or become permanently disabled as determined by the Committee at any time when the option, or any portion thereof, shall be exercisable, the option will be exercisable within a period provided for in the Agreement, by the optionee or person or persons to whom his or her rights under the option shall have passed by will or by the laws o f descent and distribution, but in no event at a date later than the termination of the option. The Committee may require medical evidence of permanent disability, including medical examinations by physicians selected by it.

     (h)     Each option by its terms shall be personal and shall not be transferable by the optionee otherwise than by will or by the laws of descent and distribution as provided in Section 5(g) above. During the lifetime of an optionee, the option shall be exercisable only by the optionee. In the event any option is exercised by the executors, administrators, heirs or distributees of the estate of a deceased optionee as provided in Section 5(g) above, the Company shall be under no obligation to issue Common Stock thereunder unless and until the Company is satisfied that the person or persons exercising the option are the duly appointed legal representatives of the deceased optionee's estate or the proper legatees or distributees thereof. The foregoing notwithstanding, an option other than an incentive stock option may be transferred to one or more beneficiaries during the lifetime of the Participant, and rights thereunder may be exercised by such tran sferees in accordance with the terms of such option, if and to the extent such transfers are then permitted by the Committee, subject to any terms and conditions which the Committee may impose thereon.

     (i)     Notwithstanding any intent to grant incentive stock options, an option will not be considered an incentive stock option to the extent that such option, together with any previously granted incentive stock options, permits the exercise for the first time in any calendar year the purchase of more than $100,000 in fair market value of Common Stock (determined at the time of grant).

     (j)     No incentive stock option shall be granted to an employee who owns or would be treated as owning by attribution under Code Section 424(d) immediately before the grant of such option, directly or indirectly, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company. This restriction shall not apply if, (i) at the time such incentive stock option is granted, the option price is at least 110% of the fair market value of the shares of Common Stock subject to the option, as determined in accordance with Section 5(a) on the date of grant, and (ii) the incentive stock option by its terms is not exercisable after the expiration of five years from the date of its grant.

     (k)     An option and any Common Stock received upon the exercise of an option shall be subject to such other transfer restrictions and/or legending requirements as are specified in the applicable Agreement.

     6. Terms and Conditions of Restricted Stock Awards. Awards of restricted stock under the Plan shall be subject to all the applicable provisions of the Plan, including the following terms and conditions, and to such other terms and conditions not inconsistent therewith, as the Committee shall determine:

     (a)     Awards of restricted stock may be in addition to or in lieu of option grants.

     (b)     Awards may be conditioned on the attainment of particular performance goals based on criteria established by the Committee at the time of each award of restricted stock. During a period set forth in the Agreement (the "Restriction Period"), the recipient shall not be permitted to sell, transfer, pledge, or otherwise encumber the shares of restricted stock; except that such shares may be used, if the Agreement permits and the shares would qualify as "mature" shares for purposes of APB 25, to pay the option price pursuant to any option granted under the Plan, provided an equal number of shares delivered to the optionee shall carry the same restrictions as the shares so used.

     (c)     Shares of restricted stock shall become free of all restrictions if, during the Restriction Period, (i) the recipient dies, (ii) the recipient's employment terminates by reason of permanent disability, as determined by the Committee, (iii) the recipient retires after attaining both 59 1/2 years of age and five years of continuous service with the Company and/or a division or subsidiary, or (iv) if provided in the Agreement, there is a "change in control" of the Company (as defined in such Agreement). The Committee may require medical evidence of permanent disability, including medical examinations by physicians selected by it.

     (d)     Unless and to the extent otherwise provided in the Agreement, shares of restricted stock shall be forfeited and revert to the Company upon the recipient's termination of employment during the Restriction Period for any reason other than death, permanent disability, as determined by the Committee, retirement after attaining both 59 1/2 years of age and five years of continuous service with the Company and/or a subsidiary or division, or, to the extent provided in the Agreement, a "change in control" of the Company (as defined in such Agreement), except to the extent the Committee, in its sole discretion, finds that such forfeiture might not be in the best interests of the Company and, therefore, waives all or part of the application of this provision to the restricted stock held by such recipient.

     (e)     Stock certificates for restricted stock shall be registered in the name of the recipient but shall be appropriately legended and returned to the Company by the recipient, together with a stock power endorsed in blank by the recipient. The recipient shall be entitled to vote shares of restricted stock and shall be entitled to all dividends paid thereon, except that dividends paid in Common Stock or other property shall also be subject to the same restrictions.

     (f)     Restricted stock shall become free of the foregoing restrictions upon expiration of the applicable Restriction Period and the Company shall then deliver to the recipient Common Stock certificates evidencing such stock.

     (g)     Restricted Stock and any Common Stock received upon the expiration of the restriction period shall be subject to such other transfer restrictions and/or legending requirements as are specified in the applicable Agreement.

     (h)     The Committee is authorized to grant deferred restricted stock to Participants, which are rights to receive shares of Common Stock at the end of a specified deferral period, subject to the following terms and conditions:

(i)  Issuance of shares will occur upon expiration of the deferral period specified for a deferred restricted stock award by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, deferred restricted stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or otherwise, and under such other circumstances as the Committee may determine at the date of grant or thereafter.

(ii)  Except as otherwise determined by the Committee, vesting and forfeiture terms of deferred restricted stock shall be substantially the same as those applicable to restricted stock under this Section 6.

(iii)  Unless otherwise determined by the Committee, dividend equivalents on the specified number of shares covered by an award of deferred restricted stock shall be either (A) paid with respect to such deferred restricted stock at the dividend payment date in cash or in shares of unrestricted Common Stock having a fair market value equal to the amount of such dividends, or (B) deferred with respect to such deferred restricted stock, either as a cash deferral or with the amount or value thereof automatically deemed reinvested in additional deferred restricted stock having a fair market value equal to the amount of such dividends, as the Committee shall determine or permit a Participant to elect.

     7.  Terms and Conditions of Deferred Restricted Stock Grants for Non-Employee Directors.

     (a)  For purposes of this Plan, a "non-employee director" is a member of the Board who is not a full-time employee of the Company, or one of its or subsidiaries. Non-employee directors will receive benefits under the Plan only as provided in this Section 7.

     A non-employee director shall receive his or her Board and Committee chair retainers paid by the Company to its directors in deferred restricted stock credits rather than cash. The valuation of the deferred restricted stock credited in lieu of cash shall be reasonably determined by the Board of Directors. Such credits shall not be funded, but shall exist solely as a deferred restricted stock account on the books of the Company to reflect the number of shares of Common Stock (including fractional shares to 5 decimal places) which could have been purchased from time to time with the earned amount of such retainer at 100% of fair market value. Fair market value shall be determined on the first day of each participating director's directorship for the year with respect to which such retainer is credited.

     Whenever a cash dividend is paid with respect to Common Stock, each non-employee director's deferred restricted stock account shall be credited with the number of shares of Common Stock (including fractional shares to 5 decimal places) which could have been purchased on the applicable dividend payment date at 100% of fair market value on such date, based upon the per share cash dividend multiplied by the number of shares of Common Stock then credited to such director's account. Any stock dividend shall also be credited to each non- employee director's deferred restricted stock account (including fractional shares to 5 decimal places).

     (b)   Upon termination of his or her directorship for any reason, the non-employee director (or his or her designated beneficiary) shall receive the number of whole shares of Common Stock then credited to his or her account (but not any fractional shares). Any fractional share credits remaining in the account shall thereupon be canceled. Such shares shall be restricted in accordance with this Section 7.

     8.  Bonuses Payable in Stock. In lieu of cash bonuses otherwise payable under the Company's or applicable division's or subsidiary's compensation practices to employees eligible to participate in the Plan, the Committee, in its sole discretion, may determine that such bonuses shall be payable in Common Stock or partly in Common Stock and partly in cash. Such bonuses shall be in consideration of services previously performed and as an incentive toward future services and shall consist of shares of Common Stock subject to such terms as the Committee may determine in its sole discretion. The number of shares of Common Stock payable in lieu of a bonus otherwise payable shall be determined by dividing such bonus amount by the fair market value of one share of Common Stock on the date the bonus is payable, with fair market value determined as of such date in accordance with Section 5(a).

     9.  Performance Awards Qualifying Under Code Section 162(m). The Committee is authorized to grant awards on the terms and conditions specified in this Section 9. Such awards ("Performance Awards") may be denominated as a cash amount, number of shares of Stock, or specified number of other awards (or a combination) which may be earned upon achievement or satisfaction of performance conditions specified by the Committee. If the Committee determines that a Performance Award to be granted to a Participant who Committee deems likely to be a Covered Employee (as defined in Section 15(g)) should qualify as "performance-based compensation" for purposes of Code Section 162(m), the grant, exercise and/or settlement of such Performance Award shall be contingent upon achievement of a preestablished performance goal and other terms set forth in this Section 9.

     (a)     The performance goal for such Performance Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee. The performance goal shall be objective and shall otherwise meet the requirements of Code Section 162(m) and Treasury Regulation 1.162-27, including the requirement that the performance goals set by the Committee be "substantially uncertain" of achievement. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants.

     (b)     One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries or affiliates or other business units of the Company shall be used by the Committee in establishing performance goals for such Performance Awards: (1) return on invested capital, return on assets, return on investment, or return on equity (on a gross or net basis); (2) earnings from operations, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items; (3) net income or net income per common share (basic or diluted); (4) sales or net revenues; (5) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (6) working capital turns; (7) interest expense after taxes; (8) economic value created; (9) operating margin or profit margin; (10) stock price or to tal shareholder return; (11) dividend payout as a percentage of net income; (12) strategic business criteria, consisting of one or more objectives based on meeting specified goals with respect to customer growth, supplier management, productivity, market penetration, geographic business expansion goals, cost targets, customer satisfaction, employee satisfaction, management of employment practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions or divestitures of subsidiaries, affiliates or joint ventures. The targeted level or levels of performance with respect to such business criteria may be established at such levels and in such terms as the Committee may determine, in its discretion, including in absolute terms, as a goal relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies.

     (c)     Achievement of performance goals in respect of such Performance Awards shall be measured over a performance period of up to one year or more than one year, as specified by the Committee. Thus, annual incentive awards may be granted under this Section 9. A performance goal shall be established not later than the earlier of (A) 90 days after the beginning of any performance period applicable to such Performance Award or (B) the time 25% of such performance period has elapsed. In all cases, the maximum Performance Award of any Participant shall be subject to the limitation set forth in Section 3.

     (d)     Settlement of Performance Awards shall be in cash, Stock, other awards or other property, in the discretion of the Committee. The Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to be made in connection with such Performance Awards, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of a Performance Award subject to this Section 9. Any settlement which changes the form of payment from that originally specified shall be implemented in a manner such that the Performance Award and other related awards do not, solely for that reason, fail to qualify as "performance-based compensation" for purposes of Code Section 162(m). The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant or other event (including a change in control) prior to the end of a p erformance period or settlement of such Performance Awards.

     10.  Change in Control. Each Agreement (including those relating to awards under Section 7) may, in the sole discretion of the Committee, provide that any or all of the following actions may be taken upon the occurrence of a change in control (as defined in the Agreement) with respect to the Company:

(i)  acceleration of time periods for purposes of vesting in, or realizing gain from, or exercise or settlement of any outstanding option or stock appreciation right, shares of restricted stock, or other award awarded pursuant to this Plan;

(ii)  offering to purchase any outstanding option or stock appreciation right, shares of restricted stock, or other award made pursuant to this Plan from the holder for its equivalent cash value, as determined by the Committee, as of the date of the change in control; or

(iii)  making adjustments or modifications to outstanding options or stock appreciation rights or with respect to restricted stock or other award as the Committee deems appropriate to maintain and protect the rights and interests of the Participants following such change in control, provided, however, that the exercise period of any option may not be extended beyond 10 years from the date of grant.

     11.  Transfer, Leave of Absence. For purposes of the Plan: (a) a transfer of an employee from the Company to a division or subsidiary of the Company, whether or not incorporated, or vice versa, or from one division or subsidiary of the Company to another, and (b) a leave of absence, duly authorized in writing by the Company or a subsidiary or division of the Company, shall not be deemed a termination of employment.

     12. Rights of Employees.

     (a)  No person shall have any rights or claims under the Plan except in accordance with the provisions of the Plan and each Agreement.

     (b)  Nothing contained in the Plan and Agreement shall be deemed to give any employee the right to continued employment by the Company or its divisions or subsidiaries.

     13.  Withholding Taxes. The Company shall require a payment from a Participant to cover applicable mandatory withholding for income and employment taxes upon the happening of any event pursuant to the Plan which requires such withholding. The Company reserves the right to offset such tax payment from any funds which may be due the Participant from the Company or its subsidiaries or divisions or, in its discretion, to the extent permitted by applicable law, to accept such tax payment through the delivery of shares of Common Stock owned by the Participant or by utilizing shares of the Common Stock which were to be delivered to the Participant pursuant to the Plan, having an aggregate fair market value, determined as of the date of payment, equal to the mandatory withholding taxes due.

     14.  Adjustments. In the event of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations, exchanges of shares, spin-offs, liquidations, reclassifications , large, special and non-recurring dividend of cash or property other than stock, or other similar corporate transaction or event affects the stock such that an adjustment is determined by the Committee to be appropriate under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and kind of shares of stock which may be delivered in connection with awards granted thereafter, (ii) the number and kind of shares of stock by which annual per-person award limitations are measured under Section 3, (iii) the number and kind of shares of stock subject to or deliverable in respect of outstanding options and other awards, and (iv) the exercise price, grant price or purchase price relating to any option or o ther award or, if deemed appropriate, the Committee may make provision for a payment of cash or property to the holder of an outstanding option or award. In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, awards (including Performance Awards and performance goals relating thereto) in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence, as well as acquisitions and dispositions of businesses and assets) affecting the Company, any subsidiary or affiliate or other business unit, or the financial statements of the Company or any subsidiary or affiliate, or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee's assessment of the business strategy of the Company, any subsidiary or affiliate or business unit thereof, performance of comparable organizations, economic and busin ess conditions, personal performance of a Participant, and any other circumstances deemed relevant; provided that no such adjustment shall be authorized or made if and to the extent that the existence of such authority (i) would cause options or Performance Awards granted to Participants designated by the Committee as Covered Employees and intended to qualify as "performance-based compensation" under Code Section 162(m) and regulations thereunder to otherwise fail to so qualify, (ii) would cause the Committee to be deemed to have authority to change the targets, within the meaning of Treasury Regulation 1.162-27(e)(4)(vi), under the performance goals relating to options or awards granted to Covered Employees and intended to qualify as "performance-based compensation" under Code Section 162(m) and regulations thereunder. If another corporation or other business entity is acquired by the Company, and the Company has assumed outstanding employee option grants under a prior existing plan of the acquired entity, similar adjustments are permitted at the discretion of the Committee. In the event of any other change affecting the shares of Common Stock available for awards under the Plan, such adjustment, if any, as may be deemed equitable by the Committee, shall be made to preserve the intended benefits of the Plan giving proper effect to such event.

     15.  Miscellaneous Provisions.

     (a)  The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of shares or the payment of cash upon exercise of any option or stock appreciation right or settlement of any award under the Plan. The expenses of the Plan shall be borne by the Company.

     (b)  The Committee may, at any time and from time to time after the granting of an option or other awards relating to stock specify such additional terms, conditions and restrictions with respect to such option or other awards as may be deemed necessary or appropriate to ensure compliance with any and all applicable laws, including, but not limited to, the Code, federal and state securities laws and methods of withholding or providing for the payment of required taxes.

     (c)  If at any time the Committee shall determine in its discretion that the listing, registration or qualification of shares of Common Stock upon any national securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of shares of Common Stock hereunder, the Committee may restrict the exercise of any option or stock appreciation right or settlement of restricted stock or other award in whole or in part until such listing registration, qualification, consent or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Committee.

     (d)  By accepting any benefit under the Plan, each Participant and each person claiming under or through such Participant shall be conclusively deemed to have indicated his acceptance and ratification, and consent to, any action taken under the Plan by the Committee, the Company or the Board.

     (e)  The Plan shall be governed by and construed in accordance with the laws of the State of New Jersey.

     (f)  Committee members exercising their functions under this Plan are serving as directors of the Company and they shall therefore be entitled to all rights of indemnification and advancement of expenses accorded directors of the Company.

     (g)  It is the intent of the Company that options granted under Section 5 and other awards granted or designated as awards to Covered Employees pursuant to Section 9 shall constitute qualified "performance-based compensation" within the meaning of Code Section 162(m) and regulations thereunder, unless otherwise determined by the Committee at the time of designation of the award. Accordingly, the terms of the Plan relating to such awards, including the terms used therein, shall be interpreted in a manner consistent with Code Section 162(m) and regulations thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Participant will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean a person designated by the Committee as likely to be a Covered Employee with respect to a specified fiscal year. If any provision of the Plan or any Agreement or other document relating to an award that is designated as intended to comply with Code Section 162(m) does not comply or is inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements, and no provision shall be deemed to confer upon the Committee or any other person discretion to increase the amount of compensation otherwise payable in connection with any such award upon attainment of the applicable performance objectives.

     (h)  It is the intent of the Company that options and other awards relating to stock hereunder qualify for fixed accounting under APB 25, with the measurement date to occur at grant or, in the case of awards fully conditioned upon specified performance goals, upon achievement of such goals, unless the Committee specifically determines otherwise. Therefore, in order to preserve this fundamental objective of these equity awards, if any provision of the Plan, an Agreement, or such an award would result in "variable" accounting or a measurement date other than the date of grant, if this Committee was not specifically aware of such accounting consequence at the time such provision became effective, such provision shall be modified and reformed to the extent necessary to preserve the accounting treatment of the award intended by the Committee, subject to Section 17 of the Plan.

     16.  Limits of Liability.

    (a)  Any liability of the Company or a subsidiary of the Company to any Participant with respect to any option or award shall be based solely upon contractual obligations created by the Plan and Agreement.

     (b)  Neither the Company nor a division or subsidiary of the Company, nor any member of the Committee or the Board, nor any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability to any party for any action taken or not taken in connection with the Plan, except as may expressly be provided by statute.

     17.   Amendments and Termination. The Board may, at any time, amend, alter or discontinue the Plan; provided, however, no amendment, alteration or discontinuation shall be made which would impair the rights of any holder of an award of restricted stock, option, stock appreciation rights or other award (excluding unearned Performance Awards) theretofore granted, without his or her written consent, or which, without the approval of the shareholders, would:

(i)  except as provided in Section 14, increase the maximum number of shares of Common Stock which may be issued under the Plan;

(ii)  except as provided in Section 14, decrease the option price of an option (and related stock appreciation rights, if any) to less than 100% of the fair market value (as determined in accordance with Section 5(a)) of a share of Common Stock on the date of the granting of the option (and related stock appreciation rights, if any);

(iii)  materially change the class of persons eligible to receive an award of restricted stock or options or stock appreciation rights under the Plan;

(iv)  extend the duration of the Plan; or

(v)  materially increase in any other way the benefits accruing to Participants.

  18.  Duration. The Plan was, following its initial adoption by the Board, approved by the Company's shareholders on March 12, 1996. An amendment to the Plan was approved by shareholders on January 27, 1998. This amendment and restatement will be subject to the approval of the Company's shareholders and such regulatory bodies as may be necessary, which approvals must occur within the period ending twelve months after the date the amendment and restatement of the Plan is adopted. Subject to such approvals, grants and awards may be made under the Plan between the date of its adoption and receipt of such approvals. Authority to grant awards under the amended and restated Plan shall terminate upon the earlier of the following dates or events to occur:

(i)  upon the adoption of a resolution of the Board terminating the Plan; or

(ii)  the date no shares of Common Stock remain available for grants of awards in accordance with the Plan's provisions.

No such termination of the Plan shall adversely affect the rights of any Participant hereunder and all options or stock appreciation rights previously granted and restricted stock and other awards awarded hereunder shall continue in force and in operation after the termination of the Plan, except as they may be otherwise terminated in accordance with the terms of the Plan.

     19.  Other Compensation Plans. The Plan shall not be deemed to preclude the implementation by the Company or its divisions or subsidiaries of other compensation plans which may be in effect from time to time, nor adversely affect any rights of Participants under any other compensation plans of the Company or its divisions or subsidiaries.

     20.  Non-Transferability. No right or interest in any award granted under the Plan shall be assignable or transferable, except as set forth in the Plan or required by law, and no right or interest of any participant in any award shall be liable for, or subject to, any lien, obligation or liability except as set forth in the Plan or as required by law.

EX-10.55

EXHIBIT 10.55

Contract No.010041

FT SERVICE AGREEMENT

     THIS AGREEMENT entered into this 1st day of May, 2000, by and between Eastern Shore Natural Gas Company, a corporation of the State of Delaware (herein called "Seller"), and NUI Corporation (herein called "Buyer").

WITNESSETH

     WHEREAS, Buyer desires to obtain Firm Transportation Service from Seller and Seller is willing to provide Firm Transportation Service for Buyer; and

     WHEREAS, such service will be provided by Seller for Buyer in accordance with the terms hereof.

     NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the sufficiency of which is hereby acknowledged, Seller and Buyer do covenant and agree as follows:

ARTICLE I

Definitions

      In addition to the definitions incorporated herein through Seller's Rate Schedule FT, the following terms when used herein shall have the meanings set forth below:

     1.1     The term "FERC" shall mean the Federal Energy Regulatory Commission or any successor regulatory agency or body which has authority to regulate the rates and/or services of Seller.

     1.2     The term "Rate Schedule FT" shall mean Seller's Rate Schedule FT and the General Terms and Conditions of Seller's FERC Gas Tariff, as filed with the FERC and as changed and adjusted from time to time by Seller in accordance with Section 4.2 hereof or in compliance with any final FERC order affecting such Rate Schedule and/or General Terms and Conditions.

ARTICLE II

Quantity

     2.1     The Maximum Daily Transportation Quantity ("MDTQ") shall be set forth on Exhibit "B" attached hereto. The applicable MDTQ shall be the largest daily quantity of gas, expressed in dekatherms ("dt"), that Seller is obligated to transport and make available for delivery for the account of Buyer under this Service Agreement on any one Gas Day.

     2.2     Buyer may tender natural gas for transportation to Seller on any Gas Day up to the MDTQ, plus the Fuel Retention Quantity as defined in Section 31 of the General Terms and Conditions of Seller's FERC Gas Tariff. Seller agrees to receive the aggregate of the quantities of natural gas that Buyer tenders for transportation, plus the Fuel Retention Quantity, at the Point(s) of Receipt, up to the Maximum Daily Receipt Obligation ("MDRO") specified for each Point of Receipt as set forth on Exhibit "A" attached hereto, and to transport and make available for delivery for the account of Buyer at each Delivery Point Area ("DPA") specified on Exhibit "B" attached hereto, quantities of natural gas up to the amount scheduled by Seller, less the Fuel Retention Quantity, and Buyer agrees to accept or cause acceptance of such delivery by Seller.

ARTICLE III

Payment and Rights of Termination

     3.1     Except as provided to the contrary in any written agreement(s) between Buyer and Seller in effect during the term hereof, Buyer shall pay Seller, for all service rendered hereunder, the applicable maximum rate, and all other lawful charges, as specified in Seller's Rte Schedule FT, as filed with the FERC and as said Rate Schedule may hereafter be legally amended or superseded. Buyer and Seller may mutually agree that Buyer shall pay a rate other than the applicable maximum rate so long as such rate is between the applicable maximum and minimum rates specified for such service in Seller's Tariff. Buyer and Seller may agree that a specific discounted rate will apply only to certain quantities under this Agreement; tht a specified discounted rte will apply only if specified quantities are achieved or only if the quantities do not exceed a certain level; that a specified discounted rate will apply only during specified periods of the year or for a specifically defined period; and/or that a specified discounted rate will apply only to specified rate zones, Delivery Point Areas, delivery points or other defined geographic area.

     3.2     In the event Buyer fails to pay for the service provided under this Agreement or otherwise fails to meet Seller's standards for creditworthiness, Seller shall have the right to terminate this Agreement pursuant to the conditions set forth in Section 11, Section 18 and Section 19 of the General Terms and Conditions of Seller's FERC Gas Tariff.

     3.3     In the event Buyer and Seller mutually agree to a negotiated rate(s) and/or terms of service hereunder (if authorized by the Commission), provisions governing such negotiated rate (including surcharges) and terms shall be set forth on Exhibit C to this Agreement.

ARTICLE IV

Rights to Amend Rates and Terms and Conditions of Service

     4.1     This Agreement in all respects shall be and remain subject to the provisions of said Rate Schedule FT and the provisions of the General Terms and Conditions of Seller's FERC Gas Tariff (as the same may hereafter be legally amended or superseded), all of which are made a part hereof by this reference.

     4.2     Seller shall have the unilateral right to file with the appropriate regulatory authority and seek to make changes in: (a) the rates and charges applicable to its Rate Schedule FT; (b) Rate Schedule FT including the Form of Service Agreement and the existing Service Agreement pursuant to which this service is rendered; and/or (c) any provisions of the General Terms and Conditions of Seller's FERC Gas Tariff applicable to Rate Schedule FT, provided however, Seller shall not have the right, without the consent of Buyer, unless required to do so pursuant to applicable laws or regulations, to make any filing pursuant to Section 4 of the Natural Gas Act to reduce the firm nature of the service provided under said Rate Schedule or the provisions of Exhibits "A", "B" and "C". Seller agrees that Buyer may protest or contest the aforementioned filings, or seek authorization from duly constituted regulatory authorities for such adjustment of Seller's existing FERC Gas Tariff as may be found necessary in order to assure that the provisions in (a), (b), or (c) above are just and reasonable.

ARTICLE V

Term of Agreement and Commencement of Service

     5.1     The primary term of this Agreement shall commence on November 1, 2000 and shall continue in effect until October 31, 2010 or ten (10 years after the in-service date of the facilities necessary to provide this service, whichever is later. Termination or renewal of this Agreement shall occur in accordance with the provisions of Section 13 of the General Terms and Conditions of Seller's FERC Gas Tariff.

     5.2     Any portion of this Agreement necessary to correct or "cash out" imbalances under this Agreement, pursuant to the General Terms and Conditions of Seller's FERC Gas Tariff, shall survive the other parts of this Agreement until such time as such balancing has been accomplished.

ARTICLE VI

Point(s) of Receipt and Delivery and Maximum Daily Quantities

     6.1     The Primary Point(s) of Receipt and MDRO for each Primary Point of Receipt, for all gas delivered for the account of Buyer into Seller's pipeline system under this Agreement, shall be at the Point(s) of Receipt on Seller's pipeline system as set forth on Exhibit "A" attached hereto.

     6.2     The Primary Delivery Point Area(s) ("DPA") and Maximum Daily Delivery Obligation ("MDDO") for each DPA for all gas made available for delivery by Seller to Buyer, or for the account of Buyer, under this Agreement shall be as set forth on Exhibit "B" attached hereto. Exhibit "B" also includes the Maximum Hourly Quantity ("MHQ") for each DPA as defined in Section 20 of the General Terms and Conditions of Seller's FERC Gas Tariff.

ARTICLE VII

Notices and Payments

     7.1     All notices and communications with respect to this Agreement shall be in writing and shall be considered as duly conveyed when sent to the addresses stated below or at any other such address as either Seller or 8uyer may hereafter designate in writing in accordance with the applicable provisions of Section 8 of the General Terms and Conditions of Seller's FERC Gas Tariff.

Seller:
	Eastern Shore Natural Gas Company
	Post Office Box 1769
	Dover, Delaware 19903-1769
	Attention: Director of Customer Services
Buyer:	NUI Corporation
	550 Route 202-206
	P.O. Box 760
	Bedminster, New Jersey 07921-0760

     7.2     All payments for service provided under this Agreement shall be by wire transfer of funds and shall be directed to the address stated below:

Eastern Shore Natural Gas Company

PNC Bank - Wilmington, DE

Account No. 5684278110

ABA No. 031100089

ARTICLE VIII

Facilities

      8.1     To the extent that construction of facilities is necessary to provide service under this Service Agreement, such construction, including payment for the facilities, shall occur in accordance with Section 12 of the General Terms and Conditions of Seller's FERC Gas Tariff.

ARTICLE IX

Regulatory Authorizations and Approvals

     9.1     Seller's obligation to provide service is conditioned upon receipt and acceptance of any necessary regulatory authorization to provide Firm Transportation Service for Buyer in accordance with the terms of Rate Schedule FT, this Service Agreement and the General Terms and Conditions of Seller's FERC Gas Tariff. Buyer agrees to reimburse Seller for all reporting and/or filing fees incurred by Seller in providing service under this Service Agreement.

ARTICLE X

Pressures

     10.1     The quantities of gas delivered or caused to be delivered by Buyer to Seller hereunder shall be delivered into Seller's pipeline system at a pressure sufficient to enter Seller's system, but in no event shall such gas be delivered at a pressure exceeding the maximum authorized operating pressure or such other pressure as Seller permits at the Point(s) of Receipt.

ARTICLE XI

Miscellaneous

     11.1     This Agreement shall bind and benefit the successors and assigns of the respective parties hereto; provided however, neither party shall assign this Agreement or any of its rights or obligations hereunder without first obtaining the written consent of the other party.

     11.2     No waiver by either party of any one or more defaults by the other in the performance of any provisions of this Agreement shall operate or be construed as a waiver of any future defaults of a like or different character.

     11.3     This Agreement includes Exhibits "A", "B" and "C", which are incorporated fully herein and made a part hereof.

     11.4     Modifications to this Agreement shall not become effective except by execution of an amendment thereto.

     11.5     This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, without recourse to the law governing conflicts of laws, and to all present and future valid laws with respect to the subject matter, including present and future orders, rules and regulations of duly constituted governmental authorities.

ARTICLE XII

Superseding Prior Service Agreements

     12.1     This Agreement, on its effective date, supersedes and cancels the following Service Agreement(s) between Seller and Buyer:   None

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers or representatives effective as of the date first written above.

SELLER	BUYER
EASTERN SHORE NATURAL GAS COMPANY	NUI CORPORATION
By: /S/ STEPHEN C. THOMPSON	By: /S/ THOMAS E. SMITH
Title: President	Title: Director of Energy Planning

(To be attested by the Corporate Secretary
if not signed by an officer of the company)

Attested By:	Attested By:/S/ Joyce M. Fajnor
Title:	Title: Assistant Secretary
Date:	Date: May 5, 2000

EX-3.2

Exhibit 3.2

NUI Corporation

Incorporated Under the Laws of the

State of New Jersey

AMENDED AND RESTATED BY-LAWS

Adopted as of March 02, 2001

ARTICLE I

OFFICES

     The principal office of the Company shall be located in the State of New Jersey. The Board of Directors may change the location of the principal office of the Company and may from time to time designate other offices at such other places, either within or without the State of New Jersey, as the business of the Company may require.

ARTICLE II

SHAREHOLDERS

     Section 1. Annual Meeting: The Annual Meeting of Shareholders for the election of Directors and the transaction of any other business as may properly come before such meeting shall be held at such place as shall be designated by the Board of Directors, on the fourth Tuesday of January of each year at the hour of 10:30 A.M., or on such other day at such time as shall be designated by the Board of Directors. If said day be a legal holiday, said meeting shall be held at the same hour on the next succeeding business day.

     Section 2. Special Meetings: Special Meetings of the Shareholders may be called only by the President of the Company or by the Board of Directors or as otherwise required by law. Special Meetings shall be held at such time and place as shall from time to time be designated by the Board of Directors and stated in the notice of such meeting. At a Special Meeting no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting.

     Section 3. Notice of Meetings: Written notice of the place, date and hour of any Shareholders' meeting, whether annual or special, and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be given to each Shareholder entitled to vote thereat, by mailing the same to the Shareholder at the address of the Shareholder that appears upon the records of the Company not less than ten (10) nor more than sixty (60) days prior to the date of such meeting. Notice of any adjourned meeting need not be given other than by announcement at the meeting so adjourned, unless otherwise ordered in connection with such adjournment. Such further notice, if any, shall be given as may be required by law.

     Section 4. Waiver of Notice: A written waiver of notice signed by the person entitled to notice, whether before or after the meeting, shall be deemed equivalent to notice. Attendance of a Shareholder at a meeting shall constitute a waiver of notice of such meeting, except when a Shareholder attends a meeting and, prior to the conclusion thereof, objects to the transaction of any business on the grounds that proper notice of the meeting was not given.

     Section 5. Quorum: Any number of Shareholders, together holding at least a majority of the capital stock of the Company issued and outstanding and entitled to vote, present in person or represented by proxy at any meeting duly called, shall constitute a quorum for all purposes at a meeting of Shareholders except as may otherwise be provided by law.

     Section 6. Adjournment of Meetings: If at the time for which a meeting of Shareholders has been called less than a quorum is present, the meeting may be adjourned to another time or place by a majority vote of the Shareholders present in person or by proxy and entitled to vote thereat, without notice other than by announcement at the meeting except as may otherwise be required by law. At any adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally called.

     Section 7. Voting: Each Shareholder entitled to vote at a meeting of the Shareholders shall be entitled to one vote for each share of stock registered in such Shareholder's name on the books of the Company on the date fixed as the record date for the determination of its Shareholders entitled to vote. In accordance with the New Jersey Business Corporation Act, each Shareholder entitled to vote at a meeting of Shareholders may authorize another person or persons to act for him by proxy, duly appointed by instrument in writing subscribed by such Shareholder. Said proxy shall not be valid for more than eleven (11) months unless a longer time is expressly provided therein. At all meetings of Shareholders all matters shall be determined by a majority vote of the Shareholders entitled to vote thereat present in person or represented by proxy except as otherwise provided by law, the Certificate of Incorporation or these By-Laws.

     Section 8. Notice Of Shareholder Nominations And Proposed Business:

(1)     At any annual meeting of the Shareholders, (i) nominations for the election of directors and (ii) business to be brought before any such Shareholders' meeting may only be made or proposed (a) pursuant to the Company's notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any Shareholder of the Company who is a Shareholder of record at the time of giving of the notice provided for in this By-law, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this By-law.

(2)     Any Shareholder may nominate one or more persons for election as directors at a Shareholders' meeting or propose business to be brought before a Shareholders' meeting, or both, pursuant to clause (c) of paragraph 1 of this By-law, only if the Shareholder has given timely notice thereof in proper written form to the Secretary of the Company. To be timely, a Shareholder's notice must be delivered to or mailed and received at the principal executive offices of the Company not less than 90 days nor more than 120 days prior to the Shareholders' meeting; provided, however, that if less than 100 days' notice or other prior public disclosure of the date of the meeting is given or made to the Shareholders, notice by the Shareholder to be timely must be received no later than the close of business on the 10th day following the earlier of the day on which notice of the date of the meeting was mailed or other public disclosure was made. To be in proper written form a Shareholder's n otice to the Secretary shall set forth as to each matter the Shareholder proposes to bring before the meeting:

(a) a brief description of the business proposed and/or persons nominated, as applicable, and the reasons for proposing such business or making such nomination;

(b) the name and address, as they appear on the Company's books, of the Shareholder proposing such business or making such nomination, and the name and address of the beneficial owner, if any, on whose behalf the proposal is made;

(c) the class or series and number of shares of the Company which are owned beneficially and of record by such Shareholder of record and by the beneficial owner, if any, on whose behalf the proposal is made;

(d) with respect to any nomination, (i) a description of all arrangements and understandings between the Shareholder proposing such nomination and each nominee and any other person or persons (naming such person or persons) in connection with the nomination or nominations are to be made, (ii) the name, age, business address and residence address of such nominee, (iii) the class or series and number of shares of capital stock of the Company owned beneficially and of record by such nominee, (iv) the written consent of the proposed nominee to being named in the solicitation material and to serving as a director if elected and (v) a representation that such Shareholder intends to appear in person or by proxy at the meeting to nominate the persons named in the notice;

(e) with respect to any business to be proposed, (i) a description of all arrangements or understandings between the Shareholder proposing such business and any other person or persons (naming such person or persons) in connection with the proposal of such business by such Shareholder and any material interest of such Shareholder in such business and (ii) a representation that such Shareholder intends to appear in person or by proxy at the meeting to bring such business before the meeting; and

(f) such other information regarding each nominee or matter of business to be proposed as would be required to be included in solicitations of proxies, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.

 (3)     Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at any Shareholders' meeting and no Shareholder may nominate any person for election at any Shareholders' meeting except in accordance with the procedures set forth in this By-law. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that any proposed business and/or any proposed nomination for election as director was not properly brought or made before the meeting or made in accordance with the procedures prescribed by these By-laws, and if he should so determine, he shall so declare to the meeting and any such proposed business or proposed nomination for election as director not properly brought before the meeting or made shall not be transacted or considered.

ARTICLE III

DIRECTORS

     Section 1. Qualifications: Directors need not be Shareholders and need not be citizens of the United States or residents of New Jersey.

     Section 2. Duties and Powers: The business and affairs of the Company shall be managed by or under the direction of the Board of Directors, and, unless the vote of a greater number is required by law, the Certificate of Incorporation or these By-Laws, the vote of the majority of the Directors present at a meeting shall be the act of the Board of Directors in the transaction of business, provided a quorum is present. The Directors may exercise all such powers of the Company and do all such lawful acts and things as they may deem proper and as are consistent with law, the Certificate of Incorporation and these By-Laws.

     Section 3. Election: Directors shall be elected by the Shareholders at the Annual Meeting of Shareholders to hold office for the term elected and until their respective successors are elected and qualified or until their earlier resignation or removal. If the election of Directors shall not be held on the day designated by or pursuant to authority granted in these By-Laws, the Directors shall cause the same to be held as soon thereafter as may be convenient.

     (a)     Except as otherwise fixed pursuant to Article VI of the Certificate of Incorporation relating to the rights of the holders of any class or series of preferred stock having a preference over the common stock as to dividends or upon liquidation, or to elect additional Directors under specified circumstances, the Board of Directors shall consist of not less than eight (8) nor more than twenty-five (25) persons; provided, however, that the authorized number of Directors may be changed to any number between eight (8) and twenty-five (25) from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized Directors (whether or not there exist any vacancies in previously authorized Directorships at the time any such resolution is presented to the Board for adoption).

     (b)     The Directors (other than those who may be elected by the holders of any class or series of preferred stock having a preference over common stock as to dividends or upon liquidation) shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, one class to hold office initially for a term expiring at the annual meeting of Shareholders to be held in 1992, another class to hold office initially for a term expiring at the annual meeting of Shareholders to be held in 1993, and another class to hold office initially for a term expiring at the annual meeting of Shareholders to be held in 1994, with the members of each class to hold office until their successors are elected and qualified. At each annual meeting of the Shareholders of the Company, the successors to the class of Directors whose term expires at that meeting shall be elected to hold office f or a term expiring at the annual meeting of Shareholders held in the third year following the year of their election. The election of Directors need not be by ballot.

     (c)     Except as otherwise fixed pursuant to the provisions of Article VI of the Certificate of Incorporation relating to the rights of the holders of any class or series of preferred stock having a preference over the common stock as to dividends or upon liquidation to elect Directors under specified circumstances, newly created Directorships resulting from any increase in the authorized number of Directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the Directors then in office, though less than a quorum of the Board of Directors. If any applicable provision of New Jersey law expressly confers power on Shareholders to fill such a Directorship at a special meeting of Shareholders, such a Directorship may be filled at such a meeting only by the affirmative vote of at least 75 percent of the then-o utstanding shares of the voting stock, voting together as a single class (it being understood that for all purposes of this Section 3 and compliance with Article XI of the Certificate of Incorporation, each share of the voting stock shall have the number of votes granted to it pursuant to Article VI of the Certificate of Incorporation or any resolution or resolutions of the Board of Directors pursuant to authority expressly granted to and vested in it by the provisions of Article VI of the Certificate of Incorporation). Any Director elected in accordance with the two preceding sentences shall hold office for the remainder of the full term of the class of Directors in which the new Directorship was created or the vacancy occurred and until such Director's successor shall have been elected and qualified. No decrease in the number of authorized Directors constituting the entire Board of Directors shall shorten the term of any incumbent Director.

     (d)     Subject to the rights of the holders of any class or series of preferred stock having preference over the common stock as to dividends or upon liquidation or to elect Directors under specified circumstances, any Director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 75 percent of all of the then-outstanding shares of the voting stock, voting together as a single class. The Company must notify the Director of the grounds of his impending removal and the Director shall have an opportunity, at the expense of the Company, to present his defense to the Shareholders by a statement which accompanies or precedes the Company's solicitation of proxies to remove him.

     Section 4. Resignation of Directors: Any Director may resign at any time upon written notice to the Company. Such resignation shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Chairman of the Board, if any, the Chief Executive Officer, if any, the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective, unless so specified therein.

     Section 5. Meetings: The Board of Directors shall hold an annual meeting for the purpose of organization and the transaction of any business immediately after the Annual Meeting of the Shareholders, provided a quorum is present. Other regular meetings may be held at such times as may be determined from time to time by resolution of the Board of Directors. Special meetings of the Board of Directors may be called at any time by the Chairman of the Board, if any, the Chief Executive Officer, if any, by the President or by a majority of the Directors then in office, though less than a quorum of the Board of Directors.

     Section 6. Notice and Place of Meetings: Regular meetings of the Board of Directors may be held at such time and place as shall be designated by resolution of the Board of Directors. No notice need be given of any regular meeting of the Board. Notice of any special meeting specifying the time and place of such meeting and the business to be transacted thereat shall be served upon each Director by mail at his residence or usual place of business at least two (2) days before the day on which such meeting is to be held, or sent to him at such place by telegraph, cable, electronic communication or transmitted by way of a guaranteed overnight courier service, or delivered personally or by telephone not later than 24 hours prior to the time at which the meeting is to be held. No notice of the annual meeting shall be required if held immediately after the annual meeting of the Shareholders and if a quorum is present. Notice of a meeting need not be given to an y Director who submits a signed waiver of notice before or after the meeting, nor to any Director who attends the meeting without protesting, prior to the conclusion thereof, the lack of notice.

     Section 7. Business Transacted at Meetings: Any business may be transacted and any corporate action may be taken at any regular meeting of the Board of Directors at which a quorum shall be present, whether such business or proposed action be stated in the notice of such meeting or not, unless special notice of such business or proposed action shall be required by law.

     Section 8. Quorum: A majority of the entire Board of Directors then in office shall be necessary to constitute a quorum for the transaction of business. If a quorum is not present at a meeting of the Board of Directors, a majority of the Directors present may adjourn the meeting to such time and place as they may determine without notice other than announcement at the meeting until enough Directors to constitute a quorum shall attend. When a quorum is once present to organize a meeting, it shall not be broken by the subsequent withdrawal of any Directors.

     Section 9. Loans to and Guarantees for Directors: The Corporation may lend money to, or guarantee any obligation of, or otherwise assist, any Officer or other employee of the Corporation or of any subsidiary who is also a Director of the Corporation whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the Corporation and such loan, guarantee or other assistance is authorized by a majority of the entire Board of Directors. The Director who is to be loaned money, or whose obligation is to be guaranteed, or who is otherwise to be assisted by the Corporation, shall abstain from voting on such authorization.

     Section 10. Action Without A Meeting: Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board or such committee, as the case may be, consent in writing to the adoption of a resolution authorizing the action. Such resolutions and the written consents thereto by the members of the Board or a committee shall be filed with the minutes of the proceedings of the Board or such committee as the case may be.

     Section 11. Participation By Telephone: Any one or more members of the Board or any committee thereof may participate in a meeting of the Board or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.

     Section 12. Compensation: The Board of Directors may establish by resolution reasonable compensation of all Directors for services to the Company as Directors, including a fixed fee, if any, incurred in attending each meeting. Nothing herein contained shall preclude any Director from serving the Company in any other capacity, as an officer, agent or otherwise, and receiving compensation therefore.

ARTICLE IV

COMMITTEES

     Section 1. Executive Committee: The Board of Directors, by resolution passed by a majority of the entire Board then in office, may designate five (5) or more Directors to constitute an Executive Committee to hold office at the pleasure of the Board, which Committee shall, during the intervals between meetings of the Board of Directors, have and exercise all of the powers of the Board of Directors in the management of the business and affairs of the Company, subject only to such restrictions or limitations as the Board of Directors may from time to time specify, or as limited by the New Jersey Business Corporation Act, and shall have power to authorize the seal of the Company to be affixed to all instruments which may require it. Any member of the Executive Committee may be removed at any time, with or without cause, by a resolution of a majority of the entire Board of Directors then in office. Any person ceasing to be a Director shall ipso fac to cease to be a member of the Executive Committee. Any vacancy in the Executive Committee occurring from any cause whatsoever may be filled from among the Directors by a resolution of a majority of the entire Board of Directors then in office.

     Section 2. Other Committees: Other committees, whose members are to be Directors, may be appointed by the Board of Directors, which members shall hold office for such time and have such powers and perform such duties as may from time to time be assigned to them by the Board of Directors. Any member of such a committee may be removed at any time, with or without cause, by a majority of the Board of Directors then in office. Any vacancy in a committee occurring from any cause whatsoever may be filled by a majority of the Board of Directors then in office.

     Section 3. Resignation: Any member of a committee may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or, if no time be specified, at the time of its receipt by the Chairman of the Board, if any, the Chief Executive Officer, if any, the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective unless so specified therein.

     Section 4. Quorum: A majority of the members of a committee shall constitute a quorum. The act of a majority of the members of a committee present at any meeting at which a quorum is present shall be the act of such committee. The members of a committee shall act only as a committee, and the individual members thereof shall have no powers as such.

    Section 5. Record of Proceedings: Each committee shall keep a record of its acts and proceedings and shall report the same to the Board of Directors at its next meeting following such Committee meeting.

     Section 6. Organization, Meetings. Notices: A committee may hold its meetings at the principal office of the Company, or at any other place upon which a majority of the committee may at any time agree. Each committee may make such rules as it may deem expedient for the regulation and carrying on of its meetings and proceedings. Notice of a special meeting of such Committee may be given by the Secretary or by the chairman of the Committee and shall be sufficiently given if mailed to each member at his residence or usual place of business at least five (5) days before the day on which the meeting is to be held, or if sent to him at such place by telegraph, cable, electronic communication or delivered personally or by telephone not later than 24 hours prior to the time at which the meeting is to be held.

     Section 7. Compensation: The members of any committee shall be entitled to such compensation as may be allowed them by resolution of the Board of Directors.

ARTICLE V

OFFICERS

     Section 1. Number: The Officers of the Company shall be a President, a Secretary and a Treasurer and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article V. The Board of Directors, in its discretion, may also elect a Chairman of the Board of Directors or a Chief Executive Officer or both.

     Section 2. Election. Term of Office and Qualifications: The Officers, except as provided in Section 3 of this Article V, shall be elected annually by the Board of Directors immediately after the Annual Meeting of Shareholders. Each such Officer shall, except as herein otherwise provided, hold office until the election and qualification of his successor or until his earlier resignation or removal. Any two or more offices may be held by the same person, except the offices of the President and Secretary.

     Section 3. Other Officers: Other Officers, including, but not limited to, one or more Vice-Chairmen, divisional Officers, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers, may from time to time be appointed by the Board of Directors, which other officers shall have such powers and perform such duties as may be assigned to them by the President unless otherwise directed by the Board. All such Officers shall be corporate Officers of the Company with the power to bind the Company by acts within the scope of their authority.

     Section 4. Removal of Officers: Any Officer of the Company may be removed from office, with or without cause, by a vote of a majority of the Board of Directors then in office. The removal of an Officer shall be without prejudice to his contract rights, if any. Election or appointment of an Officer shall not of itself create contract rights.

     Section 5. Resignation: Any Officer of the Company may resign at any time. Such resignation shall be in writing and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Secretary. The acceptance of a resignation shall not be necessary in order to make it effective, unless so specified therein.

     Section 6. Filling of Vacancies: A vacancy in any office shall be filled by the Board of Directors.

     Section 7. Compensation: The compensation of the Officers shall be fixed by the Board of Directors, or by any committee or Officer upon whom power in that regard may be conferred by the Board of Directors.

     Section 8. Chairman of the Board of Directors: The Chairman of the Board of Directors, if one is elected, shall be a Director and shall preside at all meetings of the Board of Directors and of the Shareholders at which the Chairman shall be present. In the absence of the Chairman of the Board, the Director or Officer designated by the Chairman shall perform and carry out the functions of the Chairman of the Board.

     Section 9. President: The President shall, subject only to the direction and control of the Board of Directors or the Executive Committee, have responsibility for the general management of the business affairs and property of the Company, and of its several Officers, and shall, subject only as aforesaid, have and exercise all such powers and discharge such duties as usually pertain to the office of President. The President shall perform such duties as may be assigned from time to time by the Board of Directors.

     Section 10. Chief Executive Officer: The Chief Executive Officer, if one is elected, shall have such duties and responsibilities and shall report to such persons as the Board of Directors shall determine from time to time.

     Section 11. Secretary: The Secretary shall attend all meetings of the Board of Directors and of the Shareholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for any committee appointed by the Board. The Secretary shall give or cause to be given notice of all meetings of Shareholders and special meetings of the Board of Directors and shall perform such other duties as may be prescribed by the President or the Board of Directors. The Secretary shall keep in safe custody the seal of the Company and affix it to any instrument when so authorized by the Board of Directors. In the absence of a Secretary, an Assistant Secretary may act in the Secretary's place.

     Section 12. Treasurer: The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all monies and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Company as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and Directors at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Company. The Treasurer may be required to give bond for the faithful discharge of his duties. In the absence of a Treasurer, an Assistant Treasurer may act in his place. The Treasurer shall perform such other duties as may be prescribed by the President or the Board of Directors.

ARTICLE VI

CAPITAL STOCK

     Section 1. Issue of Certificates of Stock: Certificates of capital stock shall be in such form as shall be approved by the Board of Directors. The Board of Directors may also provide that some or all of the shares of any class or series shall be represented by uncertificated shares. Certificated shares shall be numbered in the order of their issue, and shall be signed, either manually or by facsimile signature, by either the Chairman of the Board or the President or the Secretary and the seal of the Company or a facsimile thereof shall be impressed, affixed or reproduced thereon. In case any Officer or Officers who shall have signed any such certificate or certificates shall cease to be such Officer or Officers of the Company, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Company, such certificate or certificates may nevertheless be adopted by the Company and be issued and delivered as though the person or persons who signed such certificate or certificates have not ceased to be such Officer or Officers of the Company.

     Section 2. Registration and Transfer of Shares: The name of each person owning a share of the capital stock of the Company shall be entered on the books of the Company together with the number of shares held by such person, the numbers of the certificates covering such shares and the dates of issue of such certificates. The shares of stock of the Company shall be transferable on the books of the Company by the holders thereof in person, or by their duly authorized attorneys or legal representatives, on surrender and cancellation of certificates for a like number of shares, accompanied by an assignment of power of transfer endorsed thereon or attached thereto, duly executed, and with such proof of the authenticity of the signature as the Company or its Agents may reasonably require. A record shall be made of each transfer.

     The Board of Directors may make other and further rules and regulations concerning the transfer and registration of certificates of stock.

     Section 3. Lost, Destroyed and Mutilated Certificates: The holder of any stock of the Company shall immediately notify the Company of any loss, theft, destruction or mutilation of the certificates thereof. The Company may issue a new certificate of stock in the place of any certificate theretofore issued by it alleged to have been lost, stolen or destroyed, and the Board of Directors or its agent may, in its discretion, require the owner of the lost, stolen or destroyed certificate, or his legal representatives, to give the Company a bond, in such sum not exceeding double the value of the stock and with such surety or sureties as they may require, to indemnify it against any claim that may be made against it in connection with the issue of such new certificate.

ARTICLE VII

MISCELLANEOUS PROVISIONS

Section 1. Fiscal Year: The fiscal year of the Company shall commence on the first day of October and end on the last day of September.

     Section 2. Corporate Seal: The corporate seal shall be in such form as approved by the Board of Directors and may be altered at its pleasure. The corporate seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

     Section 3. Notices: Except as otherwise expressly provided, any notice required by these By-Laws to be given shall be sufficient if given by depositing the same in a post office or letter box in a sealed wrapper with first-class postage prepaid thereon and addressed to the person entitled thereto at his address, as the same appears upon the books of the Company, or by electronically communicating the notice to such person at such address or by transmitting the same by way of a guaranteed overnight courier service; and such notice shall be deemed to be given at the time it is mailed, electronically communicated or so transmitted.

     Section 4. Contracts, Checks, Drafts: The Board of Directors, except as may otherwise be required by law, may authorize any Officer or Officers, Agent or Agents, in the name of and on behalf of the Company to enter into any contract or execute or deliver any instrument. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Company, shall be signed by such Officer or Officers, Agent or Agents of the Company, and in such manner as shall be designated from time to time by resolution of the Board of Directors.

     Section 5. Deposits: All funds of the Company shall be deposited from time to time to the credit of the Company in such bank or banks, trust companies or other depositories as the Board of Directors may select, and, for the purpose of such deposit, checks, drafts, warrants and other orders for the payment of money which are payable to the order of the Company, may be endorsed for deposit, assigned and delivered by any Officer of the Company, or by such Agents of the Company as the Board of Directors, the Chairman of the Board, if any, the Chief Executive Officer, if any, or the President may authorize for that purpose.

     Section 6. Voting Stock of Other Companies: Except as otherwise ordered by the Board of Directors or the Executive Committee, the Chairman of the Board, if any, the Chief Executive Officer, if any, or the President shall have full power and authority on behalf of the Company to attend and to act and to vote at any meeting of the Shareholders of any corporation of which the Company is a shareholder and to execute a proxy to any other person to represent the Company at any such meeting, and at any such meeting the Chairman of the Board, if any, the Chief Executive Officer, if any, or the President or the holder of any such proxy, as the case may be, shall possess and may exercise any and all rights and powers incident to ownership of such stock and which, as owner thereof, the Company might have possessed and exercised if present. The Board of Directors or the Executive Committee may from time to time confer like powers upon any other person or persons.< /P>

ARTICLE VIII

AMENDMENTS

     Except as set forth in the final sentence of this ARTICLE VIII, these By-Laws may be altered, amended or repealed by the affirmative vote of a majority of the entire Board of Directors then in office. These By-Laws may also be altered, amended or repealed by the Shareholders, but only by an affirmative vote of the holders of at least 75 percent of all the then-outstanding shares of the voting stock, voting together as a single class. Any By-Law may provide that it may only be altered, amended or repealed by the affirmative vote of the holders of at least 75 percent of all the then-outstanding shares of the voting stock, voting together as a single class, in which event such By-Law may only be altered, amended or repealed by such vote.

EX-2.5

Exhibit 2.5

AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION

BY AND AMONG

NUI CORPORATION,

VGC ACQUISITION, INC.

AND

VIRGINIA GAS COMPANY

Dated as of March 28, 2001

TABLE OF CONTENTS

			PAGE
ARTICLE I		DEFINITIONS	8
	Section 1.1	Agreement	8
	Section 1.2	Average NUI Holding Price	8
	Section 1.3	Averaging Period	8
	Section 1.4	Berenson	9
	Section 1.5	Certificate of Merger	9
	Section 1.6	Certificates	9
	Section 1.7	CIBC	9
	Section 1.8	Closing, Closing Date	9
	Section 1.9	Code	9
	Section 1.10	Confidentiality Agreement	9
	Section 1.11	Contract	9
	Section 1.12	Conversion Ratio	9
	Section 1.13	Determination Date	9
	Section 1.14	DGCL	10
	Section 1.15	Easement	10
	Section 1.16	Effective Time	10
	Section 1.17	Environmental Laws	10
	Section 1.18	ERISA	10
	Section 1.19	Exchange Act	10
	Section 1.20	Exchange Agent	10
	Section 1.21	FERC	10
	Section 1.22	Funded Debt	10
	Section 1.23	GAAP	10
	Section 1.24	Governmental Authority	10
	Section 1.25	Hazardous Materials	11
	Section 1.26	HSR Act	11
	Section 1.27	IRS	11
	Section 1.28	Joint Proxy Statement/Prospectus	11
	Section 1.29	Knowledge of NUI Holding	11
	Section 1.30	Knowledge of Virginia Gas	11
	Section 1.31	Law	11
	Section 1.32	Material Adverse Effect	11
	Section 1.33	Merger	12
	Section 1.34	Merger Subsidiary	12
	Section 1.35	Nasdaq	12
	Section 1.36	NUI	12
	Section 1.37	NUI Common Stock	12
	Section 1.38	NUI Holding	12
	Section 1.39	NUI Holding Benefit Plans	12
	Section 1.40	NUI Holding Common Stock	12
	Section 1.41	NUI Holding Companies	12
	Section 1.42	NUI Holding ERISA Plan	12
	Section 1.43	NUI Holding Required Consents	12
	Section 1.44	NUI Holding SEC Reports	13
	Section 1.45	NUI Reorganization	13
	Section 1.46	NYSE	13
	Section 1.47	Original Merger Agreement	13
	Section 1.48	Other Virginia Gas Interested Person	13
	Section 1.49	Out of Pocket Expenses	14
	Section 1.50	Partnership, Partnerships	14
	Section 1.51	Permits	14
	Section 1.52	Petroleum and Natural Gas Products	14
	Section 1.53	PUHCA	14
	Section 1.54	Registration Statement	14
	Section 1.55	SEC	14
	Section 1.56	Securities Act	14
	Section 1.57	Stockholder Meeting	15
	Section 1.58	Subsidiary, Subsidiaries	15
	Section 1.59	Superior Proposal	15
	Section 1.60	Tax Returns	15
	Section 1.61	Taxes	15
	Section 1.62	Virginia Gas	16
	Section 1.63	Virginia Gas Affiliate	16
	Section 1.64	Virginia Gas Common Stock	16
	Section 1.65	Virginia Gas Companies	16
	Section 1.66	Virginia Gas Partnerships	16
	Section 1.67	Virginia Gas Required Consents	16
	Section 1.68	Virginia Gas SEC Reports	16
	Section 1.69	Virginia Gas subsidiary	17
	Section 1.70	VSCC	17
	Section 1.71	Warrants, Warrant Agreements	17
ARTICLE II		THE MERGER	17
	Section 2.1	The Merger	17
	Section 2.2	Exchange of Certificates	17
	Section 2.3	Virginia Gas Stock Options and Warrants	21
	Section 2.4	Virginia Gas Actions	22
ARTICLE III		STOCKHOLDER APPROVAL, CLOSING	23
	Section 3.1	Stockholder Approval	23
	Section 3.2	Time and Place of Closing	23
ARTICLE IV		REPRESENTATIONS AND WARRANTIES OF NUI HOLDING	24
	Section 4.1	Organization and Authority of the NUI Companies	24
	Section 4.2	Capitalization	24
	Section 4.3	Authority Relative to this Agreement	25
	Section 4.4	Consents and Approvals, No Violations	25
	Section 4.5	Reports	27
	Section 4.6	Absence of Certain Events	28
	Section 4.7	Joint Proxy Statement/Prospectus	29
	Section 4.8	Litigation	29
	Section 4.9	Employee Benefit Plans	30
	Section 4.10	Tax Matters	31
	Section 4.11	Compliance with Laz	32
	Section 4.12	Fees and Expenses of Brokers and Others	32
	Section 4.13	Accuracy of Information	33
	Section 4.14	Absence of Undisclosed Liabilities	33
	Section 4.15	Merger Subsidiary	33
ARTICLE VI		REPRESENTATIONS AND WARRANTIES OF VIRGINIA GAS	34
	Section 5.1	Organization and Authority of the Virginia Gas Companies	34
	Section 5.2	Capitalization	34
	Section 5.3	Authority Relative to this Agreement	36
	Section 5.4	Consents and Approvals, No Violations	37
	Section 5.5	Reports	38
	Section 5.6	Absence of Certain Events	39
	Section 5.7	Joint Proxy Statement/Prospectus	41
	Section 5.8	Litigation	42
	Section 5.9	Title to and Sufficiency of Assets, Easements	42
	Section 5.10	Contracts	43
	Section 5.11	Labor Matters	45
	Section 5.12	Employee Benefit Plans	46
	Section 5.13	Tax Matters	48
	Section 5.14	Compliance with Law	51
	Section 5.15	Transactions With Affiliates	51
	Section 5.16	Environmental Conditions	52
	Section 5.17	Insurance	56
	Section 5.18	Intellectual Property	56
	Section 5.19	Fees and Expenses of Brokers and Others	57
	Section 5.20	Regulation as Utility	57
	Section 5.21	FERC Jurisdiction	58
	Section 5.22	Accuracy of Information	58
	Section 5.23	Absence of Undisclosed Liabilities	58
	Section 5.24	Opinion of Financial Advisor	59
	Section 5.25	Virginia Gas Year 2000 Compliance	59
	Section 5.26	Vote Required	59
	Section 5.27	Section 203 of the DGCL, State Takeover Statutes	60
	Section 5.28	Virginia Gas Affiliates and Partnerships	60
	Section 5.29	Certain Agreements	61
ARTICLE VI		COVENANTS	61
	Section 6.1	Conduct of the Businesses of NUI Holding and Virginia Gas	61
	Section 6.2	No Solicitation	65
	Section 6.3	The Registration Statement, Listing	67
	Section 6.4	Access to Information, Confidentiality Agreement	69
	Section 6.5	Best Efforts	70
	Section 6.6	Consents	71
	Section 6.7	Public Announcements	71
	Section 6.8	Affiliates	72
	Section 6.9	Letter of Virginia Gas' Accountants	72
	Section 6.10	Letter of NUI's Accountants	72
	Section 6.11	Indemnification, Insurance	72
	Section 6.12	PUHCA and the Natural Gas Act	73
ARTICLE VII		CONDITIONS PRECEDENT TO CONSUMMATION OF THE MERGER	73
	Section 7.1	Conditions Precedent to Each Party's Obligation to Effect the Merger	73
	Section 7.2	Conditions Precedent to Obligations of Virginia Gas	75
	Section 7.3	Conditions Precedent to Obligations of NUI Holding	77
ARTICLE VIII		TERMINATION, AMENDMENT, WAVER	79
	Section 8.1	Termination	79
	Section 8.2	Effect of Termination	81
	Section 8.3	Termination Fee	81
	Section 8.4	Amendment	83
	Section 8.5	Extension, Waver	83
ARTICLE IX		MISCELLANEOUS	83
	Section 9.1	Entire Agreement, Assignment	83
	Section 9.2	Notices	83
	Section 9.3	Governing Law	84
	Section 9.4	Descriptive Headings	85
	Section 9.5	Parties in Interest	85
	Section 9.6	Counterparts	85
	Section 9.7	Specific Performances	85
	Section 9.8	Fees and Expenses	85
	Section 9.9	Severability	86

EXHIBITS
Exhibit 1.5	Certificate of Merger
Exhibit 1.29	Knowledge of NUI Holding
Exhibit 1.30	Knowledge of Virginia Gas
Exhibit 1.48	Other Virginia Gas Interested Persons
Exhibit 1.63	Virginia Gas Affiliates
Exhibit 1.66	Virginia Gas Partnerships
Exhibit 1.69	Virginia Gas Subsidiaries
Exhibit 4.4	NUI Holding Required Consents
Exhibit 4.6	Adverse Changes Affecting NUI Holding
Exhibit 4.8	NUI Holding Litigation
Exhibit 4.10	Tax Matters Concerning NUI Holding
Exhibit 5.2	Virginia Gas Options, Warrants, Subscriptions or Other Rights
Exhibit 5.4	Virginia Gas Required Consents
Exhibit 5.5	Virginia Gas Reports
Exhibit 5.6	Adverse Changes Affecting Virginia Gas
Exhibit 5.8	Virginia Gas Litigation
Exhibit 5.9	Title to and Sufficiency of Assets; Easements
Exhibit 5.10	Virginia Gas Contracts
Exhibit 5.11	Virginia Gas Labor Matters
Exhibit 5.12	Virginia Gas Benefit Plans
Exhibit 5.13	Tax Matters Concerning Virginia Gas
Exhibit 5.15	Transactions With Affiliates by Virginia Gas
Exhibit 5.16	Environmental Conditions
Exhibit 5.20	Virginia Gas Regulated Entities
Exhibit 5.23	Absence of Undisclosed Liabilities
Exhibit 5.28	Virginia Gas Affiliates and Partnerships
Exhibit 6.4	Environmental Assessments
Exhibit 6.8	Form of Virginia Gas Affiliate Letter

AMENDED AND RESTATED

AGREEMENT AND PLAN OF REORGANIZATION

     AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of March 28, 2001, by and among NUI CORPORATION (formerly NUI Holding Company), a New Jersey corporation ("NUI HOLDING"), VGC ACQUISITION, INC., a Delaware corporation and wholly owned subsidiary of NUI Holding ("Merger Subsidiary") and VIRGINIA GAS COMPANY, a Delaware corporation ("Virginia Gas").

RECITALS

     WHEREAS, the respective Boards of Directors of NUI Utilities, Inc. (formerly NUI Corporation), a New Jersey corporation and wholly-owned subsidiary of NUI Holding ("NUI"), and Virginia Gas have previously approved the merger of Merger Subsidiary with and into Virginia Gas pursuant to the Agreement and Plan of Reorganization, dated as of June 13, 2000, by and among NUI, Merger Subsidiary and Virginia Gas (the "Original Merger Agreement"); and

     WHEREAS, Section 6.16 of the Original Merger Agreement provides that, in the event the transactions contemplated by NUI Holding's Registration Statement on Form S-4 (Registration No. 333-30092) (the "NUI Reorganization") have been consummated prior to the Effective Time (as defined in the Original Merger Agreement), NUI, Virginia Gas and Merger Subsidiary shall (i) amend and restate the Original Merger Agreement in its entirety to provide for the substitution of NUI Holding for NUI therein, and shall amend any other provisions thereof that may be required to give full effect to the transactions contemplated therein, and (ii) at the election of NUI (which election NUI has exercised), shall amend and restate the Original Merger Agreement in its entirety to provide for the merger of Virginia Gas with and into Merger Subsidiary, with Merger Subsidiary being the surviving corporation in such merger; and

     WHEREAS, the NUI Reorganization was consummated on March 1, 2001, and the parties hereto desire to amend and restate the Original Merger Agreement in its entirety in accordance with Section 6.16 of the Original Merger Agreement; and

     WHEREAS, pursuant to the Merger (as hereinafter defined), each outstanding share of Virginia Gas Common Stock (as hereinafter defined) will be converted into shares of NUI Holding Common Stock (as hereinafter defined) in accordance with the terms hereof; and

     WHEREAS, for Federal income tax purposes, it is intended that the transactions contemplated by this Agreement shall constitute a reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

     NOW, THEREFORE, in consideration of the premises, which are incorporated into and made part of this Agreement, and of the mutual representations, warranties, covenants, agreements and conditions set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1  Agreement. "Agreement" shall mean this Amended and Restated Agreement and Plan of Reorganization, together with the Certificate of Merger and other Exhibits attached hereto, as amended from time to time in accordance with the terms hereof.

Section 1.2  Average NUI Holding Price. "Average NUI Holding Price" shall have the meaning given in Section 2.1 hereof.

Section 1.3  Averaging Period. "Averaging Period" shall have the meaning given in Section 2.1 hereof.

Section 1.4  Berenson. "Berenson" shall mean Berenson Minella & Co., financial advisors to NUI Holding.

Section 1.5  Certificate of Merger. "Certificate of Merger" shall mean the Certificate of Merger of Virginia Gas with and into Merger Subsidiary, in substantially the form attached hereto as Exhibit 1.5.

Section 1.6  Certificates. "Certificates" shall have the meaning given in Section 2.2 hereof.

Section 1.7  CIBC. "CIBC" means CIBC Oppenheimer, financial advisors to Virginia Gas.

Section 1.8  Closing; Closing Date. "Closing" shall mean the closing conference held pursuant to Section 3.2 hereof, and "Closing Date" shall mean the date on which the Closing occurs.

Section 1.9  Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.

Section 1.10  Confidentiality Agreement. "Confidentiality Agreement" shall mean the letter agreement, dated February 1, 2000, between Virginia Gas and NUI.

Section 1.11  Contract. "Contract" shall mean any contract, agreement, lease, license, arrangement, understanding, relationship and commitment, whether written or oral (collectively, "Contracts").

Section 1.12   Conversion Ratio. "Conversion Ratio" shall have the meaning given in Section 2.1 hereof.

Section 1.13  Determination Date. "Determination Date" shall have the meaning given in Section 2.1 hereof.

Section 1.14  DGCL. "DGCL" shall mean the Delaware General Corporation Law, as amended.

Section 1.15  Easement. "Easement" shall mean any easement, right-of-way, permit, servitude, license, leasehold estate and similar rights relating to real property.

Section 1.16  Effective Time. "Effective Time" shall have the meaning given in Section 3.1 hereof.

Section 1.17  Environmental Laws. "Environmental Laws" shall have the meaning given in Section 5.16 hereof.

Section 1.18  ERISA. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.

Section 1.19  Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

Section1.20  Exchange Agent. "Exchange Agent" shall mean the exchange agent for the Virginia Gas Common Stock pursuant to the Merger, as may be reasonably appointed by NUI Holding.

Section 1.21  FERC. "FERC" shall mean the Federal Energy Regulatory Commission.

Section 1.22  Funded Debt. "Funded Debt" shall have the meaning given in Section 6.1 hereof.

Section 1.23  GAAP. "GAAP" shall mean generally accepted accounting principles as in effect in the United States of America at the time of the preparation of the subject financial statement.

Section 1.24  Governmental Authority. "Governmental Authority" shall mean any federal, state, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, or any court, in each case whether of the United States, any of its possessions or territories, or of any foreign nation.

Section 1.25  Hazardous Materials. "Hazardous Materials" shall have the meaning given in Section 5.16 hereof.

Section 1.26  HSR Act. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Section 1.27  IRS. "IRS" shall mean the Internal Revenue Service.

Section 1.28  Joint Proxy Statement/Prospectus. "Joint Proxy Statement/Prospectus" shall mean the Proxy Statement/Prospectus of NUI, NUI Holding and Virginia Gas included in the Registration Statement and distributed to the stockholders of Virginia Gas in connection with the Special Meeting.

Section 1.29  Knowledge of NUI Holding. "Knowledge of NUI Holding" shall mean the actual knowledge, after due inquiry, of those officers of NUI Holding identified on Exhibit 1.29 attached hereto.

Section 1.30  Knowledge of Virginia Gas. "Knowledge of Virginia Gas" shall mean the actual knowledge, after due inquiry, of those officers of Virginia Gas identified on Exhibit 1.30 attached hereto.

Section 1.31  Law. "Law" shall mean any federal, state, provincial, local or other law or governmental requirement of any kind, and the rules, regulations and orders promulgated thereunder.

Section 1.32  Material Adverse Effect. "Material Adverse Effect" shall mean, with respect to any entity or group of entities, a material adverse effect (or any development which, insofar as reasonably can be foreseen, is reasonably likely to have a material adverse effect), on the business, assets, financial or other condition, results of operations or prospects of such entity or group of entities taken as a whole.

Section 1.33  Merger. "Merger" shall have the meaning given in Section 2.1 hereof.

Section 1.34  Merger Subsidiary. "Merger Subsidiary" shall mean VGC Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of NUI Holding.

Section 1.35  Nasdaq. "Nasdaq" shall mean The Nasdaq SmallCap Market

Section 1.36  NUI. "NUI" shall mean NUI Utilities, Inc. (formerly NUI Corporation), a New Jersey corporation.

Section 1.37  NUI Common Stock. "NUI Common Stock" shall mean the common stock, no par value, of NUI.

Section 1.38  NUI Holding. "NUI Holding" shall mean NUI Corporation (formerly NUI Holding Company), a New Jersey corporation.

Section 1.39  NUI Holding Benefit Plans. "NUI Holding Benefit Plans" shall have the meaning given in Section 4.9 hereof.

Section 1.40  NUI Holding Common Stock. "NUI Holding Common Stock" shall mean the common stock, no par value, of NUI Holding.

Section 1.41  NUI Holding Companies. "NUI Holding Companies" shall mean NUI Holding, its Subsidiaries and the Partnerships in which it has an interest.

Section 1.42  NUI Holding ERISA Plan. "NUI Holding ERISA Plan" shall have the meaning given in Section 4.9 hereof.

Section 1.43  NUI Holding Required Consents. "NUI Holding Required Consents" shall have the meaning given in Section 4.4 hereof.

Section 1.44  NUI Holding SEC Reports. "NUI Holding SEC Reports" shall mean (a) NUI's Annual Reports on Form 10-K for the fiscal years ended September 30, 1999, September 30, 1998, and September 30, 1997, and (b) all documents filed by NUI and NUI Holding with the SEC pursuant to Sections 13(a) and 13(c) of the Exchange Act, any definitive proxy statements filed pursuant to Section 14 of the Exchange Act and any report filed pursuant to Section 15(d) of the Exchange Act following the filing of NUI's Annual Report on Form 10-K for the fiscal year ended September 30, 1999.

Section 1.45  NUI Reorganization. "NUI Reorganization" shall have the meaning given in the Recitals hereof.

Section 1.46  NYSE. "NYSE" shall mean The New York Stock Exchange, Inc.

Section 1.47  Original Merger Agreement. "Original Merger Agreement" shall have the meaning given in the Recitals hereof.

Section 1.48  Other Virginia Gas Interested Person. "Other Virginia Gas Interested Person" shall mean (a) any holder of 5% or more of the voting securities of Virginia Gas, (b) any director, officer or employee of any of the Virginia Gas Companies, (c) any person, firm or corporation that directly or indirectly controls, is controlled by or is under common control with any of the Virginia Gas Companies or (d) any member of the immediate family of any of such persons (collectively, "Other Virginia Gas Interested Persons"). For purposes of this Agreement, the phrase "immediate family" shall be the same as the definition found in Rule 16a-1(e) of the Securities Exchange Act of 1934. All of the Other Virginia Gas Interested Persons, with the exception of employees of any Virginia Gas Company who do not otherwise fall within the definition thereof, are listed on Exhibit 1.48 attached hereto.

Section 1.49  Out of Pocket Expenses. "Out of Pocket Expenses" shall have the meaning given in Section 8.3 hereof.

Section 1.50  Partnership; Partnerships. "Partnership" shall mean (a) any limited or general partnership, joint venture or other business association, other than a Subsidiary, in which any party has a direct or indirect interest and (b) each other such entity with respect to which a party has any obligation or made any commitment to acquire any such interest described in clause (a) (collectively, "Partnerships").

Section 1.51  Permits. "Permits" shall mean permits, licenses and governmental authorizations, registrations and approvals.

Section 1.52  Petroleum and Natural Gas Products. "Petroleum and Natural Gas Products" shall have the meaning given in Section 5.16 hereof.

Section 1.53  PUHCA. "PUHCA" shall mean the Public Utility Holding Company Act of 1935, as amended.

Section 1.54  Registration Statement. "Registration Statement" shall mean the Registration Statement on Form S-4 (Registration No. 333-46036), including the Joint Proxy Statement/Prospectus contained therein, filed by NUI Holding and NUI with the SEC on September  18, 2000, and Pre-Effective Amendment No. 1 thereto, with respect to the NUI Holding Common Stock to be offered to the holders of Virginia Gas Common Stock in the Merger.

Section 1.55  SEC. "SEC" shall mean the Securities and Exchange Commission.

Section 1.56  Securities Act. "Securities Act" shall mean the Securities Act of 1933, as amended.

Section 1.57  Stockholder Meeting. "Stockholder Meeting" shall mean the annual meeting of stockholders of Virginia Gas held on November 8, 2000, at which meeting such stockholders considered and adopted the Original Merger Agreement and the transactions contemplated therein.

Section 1.58  Subsidiary; Subsidiaries. "Subsidiary" shall mean (a) each corporate entity with respect to which a party has the right to vote (directly or indirectly through one or more other entities or otherwise) shares representing 50% or more of the votes eligible to be cast in the election of directors of such entity, (b) each other corporate entity that constitutes a "significant subsidiary," as defined in Rule 1-02 of Regulation S-X adopted under the Exchange Act and (c) each other corporate entity with respect to which a party has any obligation or made any commitment to acquire any such entity described in clauses (a) and (b) (collectively, "Subsidiaries").

Section 1.59  Superior Proposal. "Superior Proposal" shall have the meaning given in Section 6.2 hereof.

Section 1.60  Tax Returns. "Tax Returns" shall mean any report, return, information statement, payee statement or other information required to be provided to any federal, state, local or foreign Governmental Authority, or otherwise retained, with respect to Taxes, the NUI Holding Benefit Plans (as defined in Section 4.9 hereof) or the Virginia Gas Benefit Plans (as defined in Section 5.12 hereof).

Section 1.61  Taxes. "Taxes" shall mean any and all taxes, levies, imposts, duties, assessments, charges and withholdings imposed or required to be collected by or paid over to any federal, state, local or foreign Governmental Authority or any political subdivision thereof of any kind whatsoever, and including any interest, penalties, fines, assessments or additions imposed in respect of the foregoing or in respect of any failure to comply with any requirement regarding Tax Returns.

Section 1.62  Virginia Gas. "Virginia Gas" shall mean Virginia Gas Company, a Delaware corporation.

Section 1.63  Virginia Gas Affiliate. "Virginia Gas Affiliate" shall mean a corporate entity for which Virginia Gas has fifty (50%) percent ownership with the remaining fifty (50%) percent being owned by a private investor (collectively, "Virginia Gas Affiliates"). All of the Virginia Gas Affiliates are listed on Exhibit 1.63 attached hereto.

Section 1.64  Virginia Gas Common Stock. "Virginia Gas Common Stock" shall mean the common stock, par value $.001 per share, of Virginia Gas.

Section 1.65  Virginia Gas Companies. "Virginia Gas Companies" shall mean Virginia Gas, the Virginia Gas Subsidiaries and the Virginia Gas Partnerships.

Section 1.66  Virginia Gas Partnerships. "Virginia Gas Partnerships" shall mean a Partnership in which any Virginia Gas Company has an interest. All of the Virginia Gas Partnerships are listed on Exhibit 1.66 attached hereto.

Section 1.67  Virginia Gas Required Consents. "Virginia Gas Required Consents" shall have the meaning given in Section 5.4 hereof.

Section 1.68  Virginia Gas SEC Reports. "Virginia Gas SEC Reports" shall mean (a) Virginia Gas' Annual Reports on Form 10-KSB for the fiscal years ended December 31, 1999, December 31, 1998, and December 31, 1997, and (b) all documents filed by Virginia Gas with the SEC pursuant to Sections 13(a) and 13(c) of the Exchange Act, any definitive proxy statements filed pursuant to Section 14 of the Exchange Act and any report filed pursuant to Section 15(d) of the Exchange Act following the filing of Virginia Gas' Annual Report on Form 10-KSB for the fiscal year ended December 31, 1999.

Section 1.69  Virginia Gas Subsidiary. "Virginia Gas Subsidiary" means a Subsidiary owned by Virginia Gas (collectively, "Virginia Gas Subsidiaries"). All of the Virginia Gas Subsidiaries are listed on Exhibit 1.69 attached hereto.

Section 1.70  VSCC. "VSCC" shall mean the Virginia State Corporation Commission.

Section 1.71  Warrants; Warrant Agreements. "Warrants" shall mean those warrants to purchase shares of Virginia Gas Common Stock listed on Exhibit 5.2 attached hereto, which Warrants were issued pursuant to the Warrant Agreements, dated October 4, 1996, as previously provided by Virginia Gas to NUI (collectively, the "Warrant Agreements").

ARTICLE II

THE MERGER

Section 2.1  The Merger.

     (a)  Merger Subsidiary is a wholly-owned subsidiary of NUI Holding, formed under the laws of the State of Delaware. Subject to the terms and conditions of this Agreement, NUI Holding, as the sole stockholder of Merger Subsidiary, will approve the execution, delivery and performance of this Agreement by Merger Subsidiary.

     (b)  Subject to the terms and conditions of this Agreement, at the Effective Time, Virginia Gas shall be merged with and into Merger Subsidiary in accordance with the provisions of, and with the effects provided in, Subchapter IX of the DGCL (the "Merger"). Merger Subsidiary shall be the surviving corporation resulting from the Merger and shall remain a wholly-owned subsidiary of NUI Holding and shall continue to be governed by the laws of the State of Delaware.

     (c)  Pursuant to the Merger, each share of Virginia Gas Common Stock outstanding immediately prior to the Effective Time (other than shares of Virginia Gas Common Stock held by NUI Holding, if any, which shares shall be canceled in the Merger) shall be converted into and become that number of shares of NUI Holding Common Stock equal to the ratio (rounded to four decimal points) (the "Conversion Ratio") determined by dividing $4.00 by the average per share last sales price, regular way (rounded to four decimal points) (the "Average NUI Holding Price"), of NUI Holding Common Stock (or, for periods prior to the effective time of the NUI Reorganization, NUI Common Stock) as reported on the NYSE composite transactions reporting system (as reported in the New York City edition of The Wall Street Journal or, if not reported thereby, another authoritative source) for the twenty (20) consecutive trading days (the "Averaging Period") ending on (and including) the seven th trading day (the "Determination Date") prior to the Closing Date.

     (d)  No fraction of a share of NUI Holding Common Stock shall be issued in connection with the conversion of Virginia Gas Common Stock in the Merger and the distribution of NUI Holding Common Stock in respect thereof but, in lieu of such fraction, the Exchange Agent shall make a cash payment (without interest) equal to the same fraction of the market value of a full share of NUI Holding Common Stock, computed on the basis of the mean of the high and low sales prices of NUI Holding Common Stock as reported on the NYSE composite tape for the first full day on which the NUI Holding Common Stock is traded on the NYSE after the Effective Time.

Section 2.2   Exchange of Certificates.

     (a)  Prior to the Effective Time, NUI Holding shall appoint the Exchange Agent to act as the exchange agent in connection with the Merger. Immediately prior to the Effective Time, NUI Holding will deliver to the Exchange Agent, in trust for the benefit of the holders of Virginia Gas Common Stock, shares of NUI Holding Common Stock (together with cash in immediately available funds in an amount sufficient to pay cash in lieu of fractional shares, as provided in Section 2.1 hereof) necessary to make the exchanges contemplated by Section 2.1 hereof on a timely basis. To the extent that the estimated amount provided for the payment of cash in lieu of fractional shares is determined after the Effective Time to be less than the total amount distributable for such purpose, NUI Holding will promptly upon notice of the same from the Exchange Agent deliver the additional amount needed to the Exchange Agent.

     (b)  From and after the Effective Time, each holder of a certificate which immediately prior to the Effective Time represented outstanding shares of Virginia Gas Common Stock (the "Certificates") shall be entitled to receive in exchange therefor, upon surrender thereof to the Exchange Agent, a certificate or certificates representing the number of whole shares of NUI Holding Common Stock into which such holder's shares were converted in the Merger (together with cash in lieu of fractional shares). Promptly after the Effective Time, the Exchange Agent shall mail to each record holder of Virginia Gas Common Stock as of the Effective Time, a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to Certificates shall pass, only upon proper delivery of the Certificates to the Exchange Agent) and instructions for use in effecting the surrender of Certificates in exchange for shares of NUI Holding Common Stock (together wit h cash in lieu of fractional shares). Upon surrender to the Exchange Agent of a Certificate, together with such letter of transmittal duly executed, and any other required documents, the holder of such Certificate shall be entitled to receive in exchange therefor shares of NUI Holding Common Stock as set forth in this Agreement (together with cash in lieu of fractional shares), and such Certificate shall forthwith be canceled. No holder of a Certificate or Certificates shall be entitled to receive any dividend or other distribution from NUI Holding until the surrender of such holder's Certificate for a certificate or certificates representing shares of NUI Holding Common Stock. Upon such surrender, there shall be paid to the holder the amount of any dividends or other distributions (without interest) which theretofore became payable, but which were not paid by reason of the foregoing, with respect to the number of whole shares of NUI Holding Common Stock represented by the certificates issued upon surrend er. If delivery of NUI Holding Common Stock is to be made to a person other than the person in whose name the Certificate surrendered is registered or if any certificate for shares of NUI Holding Common Stock is to be issued in a name other than that in which the Certificate surrendered therefor is registered, it shall be a condition of such delivery or issuance that the Certificate so surrendered shall be properly endorsed or otherwise in proper form for transfer and that the person requesting such delivery or issuance shall pay any transfer or other taxes required by reason of such delivery or issuance to a person other than the registered holder of the Certificate surrendered or establish to the satisfaction of NUI Holding that such tax has been paid or is not applicable. Until surrendered in accordance with the provisions of this Section 2.2, each Certificate shall, after the Effective Time, represent for all purposes only the right to receive shares of NUI Holding Common Stock (and cash in lieu of fractional shares) as provided in Section 2.1 hereto, without any interest thereon.

     (c)  After the Effective Time, there shall be no transfers on the stock transfer books of Virginia Gas of the shares of Virginia Gas Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to NUI Holding or Virginia Gas for transfer, they shall be canceled and exchanged for shares of NUI Holding Common Stock (and cash in lieu of fractional shares) as provided in Section 2.1 hereof, in accordance with the procedures set forth in this Section 2.2.

     (d)  Any shares of NUI Holding Common Stock (and any accrued dividends and distributions thereon), and any cash delivered to the Exchange Agent for payment in lieu of fractional shares, that remain unclaimed by the former stockholders of Virginia Gas on the first anniversary of the Effective Time shall be delivered by the Exchange Agent to NUI Holding. Any former stockholders of Virginia Gas who have not theretofore complied with this Section 2.2 shall thereafter look only to NUI Holding for satisfaction of their claim for the consideration set forth in this Agreement, without any interest thereon. Notwithstanding the foregoing, neither NUI Holding nor Merger Subsidiary shall be liable to any holder of shares of Virginia Gas Common Stock for any shares of NUI Holding Common Stock (or dividends or distributions with respect thereto) delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

Section 2.3  Virginia Gas Stock Options and Warrants.

     (a)  Prior to the execution of this Agreement, Virginia Gas has provided to NUI Holding true and correct copies of amendments to all stock option grant documents, which amendments are in full force and effect in accordance with their terms, relating to all currently outstanding options to purchase shares of Virginia Gas Common Stock issued pursuant to the Virginia Gas Company 1998 Stock Option Plan or otherwise (including, without limitation, an option to purchase 10,000 shares of Virginia Gas Common Stock issued to an executive officer of Virginia Gas pursuant to a letter agreement dated October 30, 1997), pursuant to which: (i) each option exercisable at $4.125 shall, upon the occurrence of the Effective Time, be terminated and converted into the right to receive $1.00 in cash from NUI Holding; and (ii) any other outstanding options shall be canceled without any payment therefor.

     (b)  At the Effective Time, by virtue of the Merger and without any further action on the part of Virginia Gas or the holder thereof, each outstanding and unexercised Warrant will, pursuant to the terms of the Warrant Agreements, be automatically converted into the right to receive, upon exercise of such Warrant, that number of shares of NUI Holding Common Stock that such holder would have been entitled to receive upon the consummation of the Merger if such holder had exercised such Warrant immediately prior to the Effective Time.

Section 2.4  Virginia Gas Actions. Virginia Gas has approved of and consented to the Merger, and represents and warrants that (a) Virginia Gas' Board of Directors (at a meeting duly called and held) has (i) unanimously determined that each of this Agreement and the transactions contemplated hereby are fair to and in the best interests of Virginia Gas and its stockholders, (ii) approved this Agreement and the transactions contemplated hereby, (iii) resolved to elect not to be subject to any state takeover law that is or purports to be applicable to the Merger or the transactions contemplated by this Agreement, (iv) taken all steps necessary to render Section 203 of the DGCL inapplicable to this Agreement and the transactions contemplated hereby and (v) subject to the fiduciary duties of the Board of Directors applicable from time to time, recommended that the holders of Virginia Gas Common Stock vote to adopt the Original Merger Agreement and the transactions contemplated therein, an d (b) CIBC has delivered to the Board of Directors of Virginia Gas its written opinion that the Conversion Ratio as contemplated in this Agreement is fair, from a financial point of view, to such holders.

ARTICLE III

STOCKHOLDER APPROVAL; CLOSING

Section 3.1  Stockholder Approval. The Board of Directors of Virginia Gas recommended that its stockholders adopt, and the holders of Virginia Gas Common Stock by the requisite vote at the Stockholder Meeting have adopted, the Original Merger Agreement and the transactions contemplated thereby, including the amendment and restatement of the Original Merger Agreement as set forth in this Agreement. On the first business day on or by which (i) the Original Merger Agreement has been duly adopted by the requisite vote of the holders of shares of Virginia Gas Common Stock (which adoption occurred at the Stockholder Meeting), and (ii) the Closing of the transactions contemplated by this Agreement shall have occurred, or such later date as shall be agreed upon by NUI Holding and Virginia Gas, (y) the Certificate of Merger shall be filed in accordance with the DGCL and (z) the Merger shall become effective in accordance with the terms of this Agreement and the Certificate of Merger at the time and date contemplated therein (such time and date being referred to herein as the "Effective Time").

Section 3.2  Time and Place of Closing. The Closing of the transactions contemplated by this Agreement will take place at 11:00 A.M. on the third business day following the date on which all of the conditions to the obligations of the parties hereunder set forth in Article VII hereof have been satisfied or waived or such other time and date as NUI Holding and Virginia Gas may agree. The place of Closing shall be at such place as may be mutually agreed upon by NUI Holding and Virginia Gas.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF NUI HOLDING

     NUI Holding represents and warrants to Virginia Gas as follows:

Section 4.1  Organization and Authority of the NUI Companies. Each of the NUI Holding Companies is duly organized, validly existing and in good standing under the laws of its respective jurisdiction of organization. Each of the NUI Holding Companies has full corporate, limited liability or partnership power to carry on its respective business as it is now being conducted and to own, operate and hold under lease its assets and properties as, and in the places where, such properties and assets now are owned, operated or held. All of the NUI Holding Companies which are "significant subsidiaries" (as such term is defined in Rule 1-02 of Regulation S-X of the SEC) of NUI Holding as of the date of this Agreement consist of NUI and those subsidiaries listed on Exhibit 21 to NUI's Annual Report on Form 10-K for the fiscal year ended September 30, 2000. The copies of the Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws of NUI Holding that have been deliver ed to Virginia Gas are complete and correct and in full force and effect on the date hereof.

Section 4.2  Capitalization.

     (a)  NUI Holding's authorized equity capitalization consists of 30,000,000 shares of NUI Holding Common Stock and 5,000,000 shares of preferred stock, no par value per share. As of the close of business on March 27, 2001, 13,116,560 shares of NUI Holding Common Stock and no shares of NUI Holding preferred stock were issued and outstanding. Such shares of NUI Holding Common Stock constituted all of the issued and outstanding shares of capital stock of NUI Holding as of such date. All issued and outstanding shares of NUI Holding Common Stock have been duly authorized and validly issued and are fully paid and nonassessable, are not subject to and have not been issued in violation of any preemptive rights and have not been issued in violation of any federal or state securities laws. All outstanding shares of NUI Holding Common Stock are duly listed for trading on the NYSE.

     (b)  All of the shares of NUI Holding Common Stock to be issued to holders of Virginia Gas Common Stock in the Merger have been duly authorized for issuance out of NUI Holding's authorized and unreserved NUI Holding Common Stock and, when issued in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, and will not be subject to and will not be issued in violation of any preemptive rights.

Section 4.3  Authority Relative to this Agreement. The execution, delivery and performance of this Agreement and of all of the other documents and instruments required hereby by NUI Holding are within the corporate power of NUI Holding. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of NUI Holding and no other corporate proceedings on the part of NUI Holding are necessary to authorize this Agreement or to consummate the transactions contemplated herein either under state law or the requirements of the NYSE. This Agreement and all of the other documents and instruments required hereby have been or will be duly and validly executed and delivered by NUI Holding and (assuming the due authorization, execution and delivery hereof and thereof by Virginia Gas) constitute or will constitute valid and binding agreements of NUI Holding, enforceable against NUI Holding in accordance w ith their respective terms.

Section 4.4  Consents and Approvals; No Violations. Except for (a) any applicable requirements of the Securities Act, the Exchange Act, the HSR Act and any applicable filings under state securities, "Blue Sky" or takeover laws, (b) the filing and recordation of the Certificate of Merger as required by the DGCL, (c) any required approvals of the VSCC and the public service commissions of any other states where NUI Holding conducts business, and FERC, (d) the filing of an exemption statement on Form U-3A-2 with the SEC pursuant to PUHCA, and (e) those required filings, registrations, consents and approvals listed on Exhibit 4.4 attached hereto (the matters referred to in clauses (c), (d) and (e) being collectively referred to as the "NUI Holding Required Consents"), no filing or registration with, and no permit, authorization, consent or approval of, any public body or authority or any third party is necessary or required in connection with the execution and delivery of thi s Agreement by NUI Holding or for the consummation by NUI Holding of the transactions contemplated by this Agreement. Assuming that all filings, registrations, permits, authorizations, consents and approvals contemplated by the immediately preceding sentence have been duly made or obtained, neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby by NUI Holding will (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or bylaws of NUI Holding, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or otherwise result in any diminution of any of the rights of NUI Holding with respect to, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, Contract or other instrument or obligation to which NUI Holding is a party or by which it or any of its properties or assets may be bound or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to NUI Holding or any of its properties or assets except, in the case of clauses (ii) or (iii) above, for violations, breaches or defaults that would not have a Material Adverse Effect on the NUI Holding Companies and that will not prevent or delay the consummation of the transactions contemplated hereby.

Section 4.5  Reports.

     (a)  The filings required to be made by NUI and NUI Holding since January 1, 1997, under NYSE rules, the Securities Act, the Exchange Act and applicable state Laws and regulations have been filed with the NYSE and each applicable Governmental Authority, including the SEC and FERC, and NUI and NUI Holding have complied in all material respects with all requirements of such acts, laws and rules and regulations thereunder, except to the extent any such failure to comply would not have a Material Adverse Effect on the NUI Holding Companies.

     (b)  The NUI Holding SEC Reports complied, as of their respective dates of filing (and any NUI Holding SEC Reports filed after the date hereof will comply), in all material respects with all applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the SEC. As of their respective dates, none of such forms, reports or documents, including, without limitation, any financial statements or schedules included therein, contained (and none of the NUI Holding SEC Reports filed after the date hereof will contain) any untrue statement of a material fact or omitted (or will omit) to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading in light of the circumstances under which they were made. Each of the balance sheets (including the related notes and schedules) included in the NUI Holding SEC Reports fairly presented the consolidated financial position of NUI or NUI Hold ing as of the respective dates thereof, and the other related financial statements (including the related notes and schedules) included therein fairly presented the results of operations and cash flows of NUI or NUI Holding for the respective fiscal periods or as of the respective dates set forth therein. Each of the financial statements (including the related notes and schedules) included in the NUI Holding SEC Reports (a) complied as to form with the applicable accounting requirements and rules and regulations of the SEC and (b) was prepared in accordance with GAAP consistently applied during the periods presented, except as otherwise noted therein and subject to normal year-end and audit adjustments in the case of any unaudited interim financial statements. Since September 30, 1999, NUI and NUI Holding have timely filed all reports, registration statements and other filings required to be filed by them with the SEC.

Section 4.6  Absence of Certain Events. Except as set forth in the NUI Holding SEC Reports filed prior to the date of this Agreement or as otherwise specifically disclosed in Exhibit 4.6 attached hereto, since September 30, 1999, NUI and NUI Holding have not suffered any change in their respective business, financial condition or results of operations that has had or will have a Material Adverse Effect upon the NUI Holding Companies. Except as set forth in Exhibit 4.6 attached hereto, the representations and warranties of NUI contained in the Original Merger Agreement are true and correct in all respects (as to representations and warranties qualified or limited by the term "Material Adverse Effect," the word "material," or phrases of like import), and in all material respects (as to representations and warranties not so qualified or limited) when made and at and as of the date hereof with the same force and effect as if those representations and warranties had be en made at and as of such time except (i) to the extent such representations and warranties speak as of a specified earlier date, and (ii) as otherwise contemplated or permitted by this Agreement. Except as set forth in Exhibit 4.6, NUI has, in all material respects, performed all of its obligations and complied with all of its covenants necessary to be performed or complied with by it under the Original Merger Agreement on or before the date hereof.

Section 4.7  Joint Proxy Statement/Prospectus. None of the information with respect to the NUI Holding Companies included in the Joint Proxy Statement/Prospectus or the Registration Statement, did or will in the case of the Joint Proxy Statement/Prospectus or any amendments thereof or supplements thereto, at the time of the mailing of the Joint Proxy Statement/ Prospectus or any amendments thereof or supplements thereto or, in the case of the Registration Statement, at the time it became effective, did, or at the Effective Time, will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Joint Proxy Statement/Prospectus complies as to form in all material respects with the provisions of the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder, except that no rep resentation is made by NUI Holding with respect to information supplied by Virginia Gas or any affiliate of Virginia Gas for inclusion in the Joint Proxy Statement/Prospectus.

Section 4.8  Litigation. Except as set forth on Exhibit 4.8 attached hereto, there is no action, suit, proceeding or, to the Knowledge of NUI Holding, investigation pending or, to the Knowledge of NUI Holding, threatened against or relating to any of the NUI Holding Companies at law or in equity, or before any federal, state, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, whether in the United States or otherwise, that is expected, in the reasonable judgment of NUI Holding, to have a Material Adverse Effect upon the NUI Holding Companies or that seeks restraint, prohibition, damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby.

Section 4.9  Employee Benefit Plans.

     (a)  For purposes of this Section, the term "NUI Holding Benefit Plans" shall mean all material pension, retirement, profit-sharing, deferred compensation, stock option, employee stock ownership, severance pay, vacation, bonus or other incentive plans, and all other employee programs, arrangements or agreements, whether arrived at through collective bargaining or otherwise, all medical, vision, dental and other health plans, all life insurance plans, and all other employee benefit plans or fringe benefit plans, including, without limitation, any "employee benefit plan," as that term is defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored in whole or in part by, or contributed to by any of the NUI Holding Companies or affiliates thereof for the benefit of employees, retirees, dependents, spouses, directors, independent contractors, or other beneficiaries and under which employees, retirees, dependents, spouses, directors, independent contract ors or other beneficiaries are eligible to participate. Any of the NUI Holding Benefit Plans that is an "employee pension benefit plan," as that term is defined in Section 3(2) of ERISA, is referred to herein as a "NUI Holding ERISA Plan."

     (b)  As of the date of this Agreement, no NUI Holding Benefit Plan is a multiemployer plan within the meaning of Section 3(37) of ERISA. All NUI Holding Benefit Plans are in compliance with the applicable provisions (including, without limitation, any funding requirements or limitations) of ERISA, the Code and any other applicable Laws, the breach or violation of which could have a Material Adverse Effect on the NUI Holding Companies. Except as reflected in the notes to the financial statements included in the NUI Holding SEC Reports or as could have a Material Adverse Effect, no NUI Holding ERISA Plan which is a defined benefit pension plan has any "unfunded current liability," as that term is defined in Section 302(d)(8)(A) of ERISA, and the present fair market value of the assets of any such plan exceeds the plan's "benefit liabilities," as that term is defined in Section 4001(a)(16) of ERISA, when determined under actuarial factors that would apply if the plan terminated in accordance with all applicable legal requirements.

Section 4.10  Tax Matters. Except as set forth on Exhibit 4.10:

     (a)  NUI Holding and each of its Subsidiaries that is incorporated under the laws of the United States or of any of the United States are members of the affiliated group, within the meaning of Section 1504(a) of the Code, of which NUI Holding is the common parent, and such affiliated group files a consolidated federal income tax return;

     (b)  each of the NUI Holding Companies has timely filed or caused to be filed all Tax Returns required to have been filed by or for it, and all information set forth in such Tax Returns is accurate and complete in all material respects;

     (c)  each of the NUI Holding Companies has paid or made adequate provision on its books and records in accordance with GAAP for all Taxes covered by such Tax Returns;

     (d)  there is not a material amount of unpaid Taxes due and payable by any of the NUI Holding Companies or by any other person that is or could become a lien on any asset of, or that could otherwise have a Material Adverse Effect on, the NUI Holding Companies;

     (e)  each of the NUI Holding Companies has collected or withheld all Taxes required to be collected or withheld by it, and all such Taxes have been paid to the appropriate Governmental Authority or set aside in appropriate accounts for future payment when due;

     (f)  none of the NUI Holding Companies has granted (or is subject to) any waiver, which is currently in effect, of the period of limitations for the assessment of any Tax; no unpaid Tax deficiency has been assessed or asserted against, or with respect to, any of the NUI Holding Companies by any Governmental Authority; there are no currently pending administrative or judicial proceedings, or any deficiency or refund litigation, with respect to Taxes of any of the NUI Holding Companies, the adverse outcome of which would have a Material Adverse Effect on the NUI Holding Companies; and any such assertion, assessment, proceeding or litigation disclosed on Exhibit 4.10 hereto is being contested in good faith through appropriate measures, and its status is described in Exhibit 4.10 hereto; and

     (g)  the most recent audited consolidated balance sheet included in the NUI Holding SEC Reports fully and properly reflects, as of the date thereof, the liabilities of NUI and its Subsidiaries for all accrued Taxes and deferred liability for Taxes and, for periods ending after such date, the books and records of each such corporation fully and properly reflect its liability for all accrued Taxes.

Section 4.11  Compliance with Law. The conduct of the businesses of the NUI Holding Companies and their use of their assets does not violate or conflict, and has not violated or conflicted, with any Law, which violation or conflict could have a Material Adverse Effect on the NUI Holding Companies.

Section 4.12  Fees and Expenses of Brokers and Others. None of the NUI Holding Companies (a) has had any dealings, negotiations or communications with any broker or other intermediary in connection with the transactions contemplated by this Agreement, (b) is committed to any liability for any brokers' or finders' fees or any similar fees in connection with the transactions contemplated by this Agreement or (c) has retained any broker or other intermediary to act on its behalf in connection with the transactions contemplated by this Agreement, except that NUI has engaged Berenson to represent it in connection with such transactions and NUI Holding shall pay all of Berenson's fees and expenses in connection with such engagement.

Section 4.13  Accuracy of Information. Neither this Agreement nor any other document provided by the NUI Holding Companies or their employees or agents to Virginia Gas in connection with the transactions contemplated herein, when this Agreement and such documents are considered together in the aggregate, contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading.

Section 4.14  Absence of Undisclosed Liabilities. None of the NUI Holding Companies have, as of the date hereof, or will have, as of the Effective Time, any liabilities or obligations of any kind, whether absolute, accrued, asserted or unasserted, contingent or otherwise, that would be required to be disclosed on a consolidated balance sheet of NUI Holding, or reflected in the notes thereto, prepared as of such date in accordance with GAAP, except liabilities, obligations or contingencies that were (a) reflected on or accrued or reserved against in the consolidated balance sheet of NUI as of September 30, 1999, which is included in the NUI Holding SEC Reports, or reflected in the notes thereto, or (b) incurred after the date of such balance sheet in the ordinary course of business and consistent with past practices and which, individually or in the aggregate, will not have a Material Adverse Effect on the NUI Holding Companies.

Section 4.15  Merger Subsidiary. All of the issued and outstanding shares of the capital stock of Merger Subsidiary are (a) owned directly by NUI Holding and (b) duly authorized, validly issued, fully paid, nonassessable and are not subject to preemptive rights. Merger Subsidiary is a direct wholly owned subsidiary of NUI Holding that has been formed for the sole purpose of effecting the Merger and that, prior to the Effective Time, will (x) have no material assets, (y) engage in no other material activities and (z) will have no Subsidiaries.

ARTICLE VA

rticle vREPRESENTATIONS AND WARRANTIES OF VIRGINIA GAS

     Virginia Gas represents and warrants to NUI Holding as follows:

Section 5.1  Organization and Authority of the Virginia Gas Companies. Each of Virginia Gas and the Virginia Gas Subsidiaries is duly organized, validly existing and in good standing under the laws of its respective jurisdiction of organization. Each of Virginia Gas and the Virginia Gas Subsidiaries has full corporate power to carry on its respective business as it is now being conducted and to own, operate and hold under lease its assets and properties as, and in the places where, such properties and assets now are owned, operated or held. Each of Virginia Gas and the Virginia Gas Subsidiaries is duly qualified as a foreign entity to do business, and is in good standing, in each jurisdiction where the failure to be so qualified would have a Material Adverse Effect on the Virginia Gas Companies. Exhibit 1.69 constitutes a true and complete list of all of the Subsidiaries of Virginia Gas and Exhibit 1.66 constitutes a true and complete list of all of the Virginia Gas Partnerships. The copies of the Amended and Restated Certificate of Incorporation of Virginia Gas, the Articles of Incorporation of each Virginia Gas Subsidiary and the Bylaws of Virginia Gas and each Virginia Gas Subsidiary that have been delivered to NUI Holding are complete and correct and in full force and effect on the date hereof.

Section 5.2  Capitalization. Virginia Gas' authorized equity capitalization consists of 100,000,000 shares of Virginia Gas Common Stock, $.001 par value per share, and 1,000,000 shares of preferred stock, no par value per share. As of the close of business on March 23, 2001: (i) 5,504,906 shares of Virginia Gas Common Stock and no shares of Virginia Gas preferred stock were issued and outstanding, (ii) 260,000 shares of Virginia Gas Common Stock were subject to outstanding options issued pursuant to the Virginia Gas Company 1998 Stock Option Plan, (iii) 10,000 shares of Virginia Gas Common Stock were subject to outstanding options issued to an executive officer of Virginia Gas pursuant to that certain Letter Agreement, dated October 30, 1997, and (iv) warrants to purchase 943,149 shares of Virginia Gas Common Stock at $9.90 per share were outstanding. Such shares of Virginia Gas Common Stock constituted all of the issued and outstanding shares of capital stock of V irginia Gas as of such date. All issued and outstanding shares of Virginia Gas Common Stock have been duly authorized and validly issued and are fully paid and nonassessable, are not subject to and have not been issued in violation of any preemptive rights and have not been issued in violation of any federal or state securities laws. All of the outstanding shares of capital stock of the Virginia Gas Subsidiaries are validly issued, fully paid and nonassessable and are, except as disclosed on Exhibit 1.69 attached hereto, owned by Virginia Gas, directly or indirectly, free and clear of all liens, claims, charges or encumbrances. Except for the declaration and payment of dividends in the ordinary course of business, Virginia Gas has not, subsequent to December 31, 1999, declared or paid any dividend on, or declared or made any distribution with respect to, or authorized or effected any split-up or any other recapitalization of, any of the Virginia Gas Common Stock, or directly or indirectly redeemed, purchased or otherwise acquired any of its outstanding capital stock or agreed to take any such action and will not take any such action during the period between the date of this Agreement and the Effective Time. Except as set forth on Exhibit 5.2 attached hereto, there are no outstanding options, warrants, subscriptions or other rights to purchase or acquire any capital stock of Virginia Gas or any of the Virginia Gas Subsidiaries, and there are no Contracts pursuant to which Virginia Gas or any of the Virginia Gas Subsidiaries is bound to sell or issue any shares of its capital stock. Neither Virginia Gas nor any Virginia Gas Subsidiary is a party to any voting agreement, voting trust or similar arrangement with respect to Virginia Gas Common Stock or the voting stock of any Virginia Gas Subsidiary and, except as set forth on Exhibit 5.2 attached hereto, to the Knowledge of Virginia Gas, no holder of Virginia Gas Common Stock or the voting stock of any Virginia Gas Subsidiary is a party t o any such arrangement. All outstanding shares of Virginia Gas Common Stock are duly listed for inclusion on Nasdaq.

Section 5.3  Authority Relative to this Agreement. The execution, delivery and performance of this Agreement and of all of the other documents and instruments required hereby by Virginia Gas are within the corporate power of Virginia Gas. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of Virginia Gas, and the Original Merger Agreement (including the provisions thereof relating to the amendment and restatement of the Original Merger Agreement as provided in this Agreement) was adopted by the requisite vote of the holders of Virginia Gas Common Stock at the Stockholder Meeting, and no other corporate proceedings on the part of Virginia Gas are necessary to authorize this Agreement or to consummate the transactions contemplated herein. This Agreement and all of the other documents and instruments required hereby have been or will be duly and validly executed and delivered by Virg inia Gas and (assuming the due authorization, execution and delivery hereof and thereof by NUI Holding and Merger Subsidiary as necessary) constitute or will constitute valid and binding agreements of Virginia Gas, enforceable against Virginia Gas in accordance with their respective terms.

Section 5.4  Consents and Approvals; No Violations. Except for (a) any applicable requirements of the Securities Act, the Exchange Act, the HSR Act, and any applicable filings under state securities, "Blue Sky" or takeover laws, (b) the filing and recordation of a certificate of merger as required by the DGCL, (c) any required approvals of the VSCC and FERC and (d) those required filings, registrations, consents and approvals listed on Exhibit 5.4 attached hereto (the matters referred to in clauses (c) and (d) being collectively referred to as the "Virginia Gas Required Consents"), no filing or registration with, and no permit, authorization, consent or approval of, any public body or authority or any third party is necessary or required in connection with the execution and delivery of this Agreement by Virginia Gas or for the consummation by Virginia Gas of the transactions contemplated by this Agreement. Assuming that all filings, registrations, permits, aut horizations, consents and approvals contemplated by the immediately preceding sentence have been duly made or obtained, neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby by Virginia Gas will (i) conflict with or result in any breach of any provision of the Certificates or Articles of Incorporation, bylaws or other organizational documents of Virginia Gas or any Virginia Gas Subsidiary, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or otherwise result in any diminution of any of the rights of Virginia Gas or the Virginia Gas Subsidiaries with respect to, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, Contract or other instrument or obligation to which Virginia Gas or any Virginia Gas Subsidiary is a party or by which it or any of them or a ny of their properties or assets may be bound or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Virginia Gas or any Virginia Gas Subsidiary or any of their properties or assets except, in the case of clauses (ii) or (iii) above, for violations, breaches or defaults that would not have a Material Adverse Effect on the Virginia Gas Companies and that will not prevent or delay the consummation of the transactions contemplated hereby.

Section 5.5  Reports.

     (a)  Except as set forth on Exhibit 5.5 attached hereto, the filings required to be made by Virginia Gas since January 1, 1997, under Nasdaq rules, the Securities Act, the Exchange Act, the Natural Gas Act and applicable Laws and regulations have been filed with Nasdaq and each applicable Governmental Authority, including the SEC, FERC and the VSCC, and Virginia Gas has complied in all material respects with all requirements of such acts, laws and rules and regulations thereunder, except to the extent any such failure to comply would not have a Material Adverse Effect on the Virginia Gas Companies.

    (b)  The Virginia Gas SEC Reports complied, as of their respective dates of filing (and any Virginia Gas SEC Reports filed after the date hereof will comply), in all material respects with all applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the SEC. As of their respective dates, none of such forms, reports or documents, including, without limitation, any financial statements or schedules included therein, contained (and none of the Virginia Gas SEC Reports filed after the date hereof will contain) any untrue statement of a material fact or omitted (or will omit) to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading in light of the circumstances under which they were made. Each of the balance sheets (including the related notes and schedules) included in the Virginia Gas SEC Reports fairly presented the consolidated financial position of the Virginia Gas Companies as of the respective dates thereof, and the other related financial statements (including the related notes and schedules) included therein fairly presented the results of operations and cash flows of the Virginia Gas Companies for the respective fiscal periods or as of the respective dates set forth therein. Each of the financial statements (including the related notes and schedules) included in the Virginia Gas SEC Reports (a) complied as to form with the applicable accounting requirements and rules and regulations of the SEC, and (b) was prepared in accordance with GAAP consistently applied during the periods presented, except as otherwise noted therein and subject to normal year-end and audit adjustments in the case of any unaudited interim financial statements. Except for Virginia Gas, none of the Virginia Gas Companies is required to file any forms, reports or other documents with the SEC, Nasdaq, the NYSE or any other foreign or domestic securities exchange or Governmental Authority with jurisdiction over securities laws. Except as set forth on Exhibit 5.5 attached hereto, since December 31, 1998, Virginia Gas has timely filed all reports, registration statements and other filings required to be filed by it with the SEC under the Exchange Act.

Section 5.6  Absence of Certain Events. Except as set forth in the Virginia Gas SEC Reports filed prior to the date of this Agreement or as otherwise specifically disclosed in Exhibit 5.6 attached hereto, since December 31, 1998, neither Virginia Gas nor any of the Virginia Gas Subsidiaries (excluding the Virginia Gas Affiliates) and, to the Knowledge of Virginia Gas, none of the Virginia Gas Affiliates, has suffered any change in its business, financial condition or results of operations that has had or will have a Material Adverse Effect upon the Virginia Gas Companies. Except as disclosed in the Virginia Gas SEC Reports filed prior to the date of this Agreement or in Exhibit 5.6attached hereto, or as otherwise specifically contemplated by this Agreement, there has not been since December 31, 1998: (a) any entry into any agreement or understanding or any amendment of any agreement or understanding between Virginia Gas or any of the Virginia Gas Subsidiarie s (excluding the Virginia Gas Affiliates) and, to the Knowledge of Virginia Gas, between any of the Virginia Gas Affiliates, on the one hand, and any of their respective directors, officers or employees, on the other hand, providing for employment of any such director, officer or employee or any general or material increase in the compensation, severance or termination benefits payable or to become payable by Virginia Gas or any of the Virginia Gas Subsidiaries to any of their respective directors, officers or employees (except for normal increases in the ordinary course of business that are consistent with past practices and that, in the aggregate, do not result in a material increase in benefits or compensation expense), or any adoption of or increase in any bonus, insurance, pension or other employee benefit plan, payment or arrangement (including, without limitation, the granting of stock options or stock appreciation rights or the award of restricted stock) made to, for or with any such director, office r or employee; (b) any labor dispute that has had or is expected to have a Material Adverse Effect upon the Virginia Gas Companies; (c) any entry by Virginia Gas or any of the Virginia Gas Subsidiaries into any material commitment, agreement, license or transaction (including, without limitation, any borrowing, capital expenditure, sale of assets or any mortgage, pledge, lien or encumbrances made on any of the properties or assets of Virginia Gas or any of the Virginia Gas Subsidiaries) other than in the ordinary and usual course of business; (d) any change in the accounting policies or practices of Virginia Gas or the Virginia Gas Subsidiaries; (e) any damage, destruction or loss, whether covered by insurance or not, which has had or will have a Material Adverse Effect upon the Virginia Gas Companies; or (f) any agreement to do any of the foregoing. Except as set forth in Exhibit 5.6 attached hereto, the representations and warranties of Virginia Gas contained in the Original Merger Agreement are tr ue and correct in all respects (as to representations and warranties qualified or limited by the term "Material Adverse Effect," the word "material," or phrases of like import), and in all material respects (as to representations and warranties not so qualified or limited) when made and at and as of the date hereof with the same force and effect as if those representations and warranties had been made at and as of such time except (i) to the extent such representations and warranties speak as of a specified earlier date, and (ii) as otherwise contemplated or permitted by this Agreement. Except as set forth in Exhibit 0 attached hereto, Virginia Gas has, in all material respects, performed all of its obligations and complied with all of its covenants necessary to be performed or complied with by it under the Original Merger Agreement on or before the date hereof.

Section 5.7  Joint Proxy Statement/Prospectus. None of the information with respect to the Virginia Gas Companies included in the Joint Proxy Statement/Prospectus or the Registration Statement did or will, in the case of the Joint Proxy Statement/Prospectus or any amendments thereof or supplements thereto, at the time of the mailing of the Joint Proxy Statement/Prospectus or any amendments thereof or supplements thereto and at the time of the Stockholder Meeting or, in the case of the Registration Statement, at the time it became effective, did, or at the Effective Time, will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Joint Proxy Statement/Prospectus complies as to form in all material respects with the provisions of the Securities Act, the Exchange Act and the rules and regulations promul gated thereunder, except that no representation is made by Virginia Gas with respect to information supplied by NUI Holding or any affiliate of NUI Holding for inclusion in the Joint Proxy Statement/Prospectus.

Section 5.8  Litigation. Except as set forth in Exhibit 5.8 attached hereto, there is no action, suit, proceeding or, to the Knowledge of Virginia Gas, investigation pending or, to the Knowledge of Virginia Gas, threatened against or relating to Virginia Gas or any of the Virginia Gas Subsidiaries at law or in equity, or before any federal, state, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, whether in the United States or otherwise, that is expected, in the reasonable judgment of Virginia Gas, to have a Material Adverse Effect upon the Virginia Gas Companies or that seeks restraint, prohibition, damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby.

Section 5.9  Title to and Sufficiency of Assets; Easements.

     (a)  As of the date hereof, Virginia Gas and each of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates), and, to the Knowledge of Virginia Gas, the Virginia Gas Affiliates, owns, and as of the Effective Time, Virginia Gas and each of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) will own, good and marketable title to all of its assets (excluding, for purposes of this sentence, assets held under leases), free and clear of any and all mortgages, liens, encumbrances, charges, claims, restrictions, pledges, security interests or impositions, except as disclosed on Exhibit 5.9 attached hereto. Except as set forth on Exhibit 5.9 attached hereto, such assets, together with all assets held by Virginia Gas and the Virginia Gas Subsidiaries under leases, include all tangible and intangible assets, Contracts and rights necessary or required for the operation of the businesses of Virginia Gas and the Virginia Gas Subsi diaries in accordance with past practice.

     (b)  Subject to ordinary wear and tear and to scheduled or necessary repairs in the ordinary course of business, all tangible assets of Virginia Gas and the Virginia Gas Subsidiaries are in good operating condition and repair.

     (c)  Except as set forth on Exhibit 5.9 attached hereto, the businesses of Virginia Gas and the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) and, to the Knowledge of Virginia Gas, the businesses of the Virginia Gas Affiliates are (i) being operated in a manner which does not violate the terms of any Easements used by Virginia Gas or the Virginia Gas Subsidiaries in such businesses, (ii) all such Easements are valid and enforceable and grant the rights purported to be granted thereby and all rights necessary thereunder for the current operation of such business, (iii) there are no spatial gaps in such Easements that would impair the conduct of such business in any manner and (iv) no part of any asset used in connection with pipeline operations is located on property that is not owned in fee by Virginia Gas or a Virginia Gas Subsidiary or subject to an Easement in favor of Virginia Gas or a Virginia Gas Subsidiary.

Section 5.10  Contracts.

     (a)  Prior to the date hereof, Virginia Gas has provided NUI Holding with a true and correct list of all of the Contracts to which Virginia Gas or any Virginia Gas Subsidiary is a party, which list is set forth on Exhibit 5.10 attached hereto, and true and correct copies of each Contract, in the case of written Contracts, or true and correct summaries thereof, in the case of oral Contracts, requested by NUI Holding, that constitute: (i) a lease of any interest in any real property; (ii) a lease of any personal property with aggregate annual rental payments in excess of $25,000; (iii) an option to acquire or lease any interest in real property or a right of first refusal with respect thereto; (iv) an agreement to purchase or sell a capital asset or an interest in any business entity for a price in excess of $25,000 or a right of first refusal with respect thereto; (v) an agreement relating to the borrowing or lending of money or the purchase or sale of securit ies; (vi) a guaranty, contribution agreement or other agreement that includes an indemnification obligation in excess of $25,000 or any contribution or support obligation; (vii) an agreement limiting in any respect the ability of any such entity to compete in any line of business or with any person; (viii) a customer supply or requirements agreement or an agreement with a vendor with a payment obligation over its term in excess of $25,000 to which any such entity is a party or by which any such entity is bound; (ix) an employment, severance, separation, change in control, or consulting agreement to which any such entity is a party or by which any such entity is bound; and (x) any other agreement involving an amount over its term in excess of $25,000. Except as set forth on Exhibit 5.10 attached hereto, Virginia Gas and each of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) has performed and, to the Knowledge of Virginia Gas, the Virginia Gas Affiliates and every other party ha s performed, each material term, covenant and condition of each of the Contracts to which Virginia Gas or any Virginia Gas Subsidiary is a party that is to be performed by any of them at or before the date hereof. Except as set forth on Exhibit 5.10 attached hereto, no event has occurred that would, with the passage of time or compliance with any applicable notice requirements or both, constitute a default by Virginia Gas or any Virginia Gas Subsidiary (other than the Virginia Gas Affiliates) or, to the Knowledge of Virginia Gas, the Virginia Gas Affiliates and any other party under any of the Contracts to which Virginia Gas or any Virginia Gas Subsidiary is a party, and, to the Knowledge of Virginia Gas, no party to any of the Contracts to which Virginia Gas or any Virginia Gas Subsidiary is a party intends to cancel, terminate or exercise any option under any of such Contracts.

     (b)  With respect to each customer supply or requirements agreement and each vendor agreement with a payment obligation over its term in excess of $25,000 to which Virginia Gas or any Virginia Gas Subsidiary (other than the Virginia Gas Affiliates) is a party, and, to the Knowledge of Virginia Gas, to which any Virginia Gas Affiliate is a party, the copy of such agreement that has been provided by Virginia Gas to NUI Holding accurately discloses: (i) the remaining term of such agreement; (ii) all incentive or other payments paid or to be paid thereunder by Virginia Gas or any Virginia Gas Subsidiary after December 31, 1999; (iii) all purchase commitments or minimum purchase guarantees binding on Virginia Gas or any Virginia Gas Subsidiary for periods after December 31, 1999; and (iv) any deviation in the economic terms thereof from and after December 31, 1999, from those that were in effect under such agreements (or under any similar predecessor agree ments) over the course of Virginia Gas' entire fiscal year ended December 31, 1999.

Section 5.11  Labor Matters.

    (a)  Except as set forth in Exhibit 5.11 attached hereto, with respect to employees of Virginia Gas and the Virginia Gas Subsidiaries: (i) no senior executive, key employee or group of employees has, during the period beginning on June 13, 2000, and ending on the date hereof, given notice of his or her intention to terminate employment with any of Virginia Gas or the Virginia Gas Subsidiaries; (ii) there is no unfair labor practice charge or complaint against Virginia Gas or any Virginia Gas Subsidiary pending or, to the Knowledge of Virginia Gas, threatened before the National Labor Relations Board or any other comparable authority; (iii) no grievance or any arbitration proceeding arising out of or under collective bargaining agreements is pending and, to the Knowledge of Virginia Gas, no claims therefor exist or have been threatened; and (iv) there is no litigation, arbitration proceeding, governmental investigation, administrative charge, citation or action of any kind pending or, to the Knowledge of Virginia Gas, proposed or threatened against Virginia Gas or any Virginia Gas Subsidiary relating to employment, employment practices, terms and conditions of employment or wages and hours.

     (b)  Neither Virginia Gas nor any Virginia Gas Subsidiary (i) has any collective bargaining relationship or duty to bargain with any Labor Organization (as such term is defined in Section 2(5) of the National Labor Relations Act, as amended); (ii) has recognized or has been requested to recognize any Labor Organization as the collective bargaining representative of any of its employees; and (iii) is, to the Knowledge of Virginia Gas, the subject of any active or threatened organizing effort by any Labor Organization.

Section 5.12  Employee Benefit Plans.

     (a)  For purposes of this Section, the term "Virginia Gas Benefit Plans" shall mean all pension, retirement, profit-sharing, deferred compensation, stock option, employee stock ownership, severance pay, vacation, bonus or other incentive plans, and all other employee programs, arrangements or agreements, whether arrived at through collective bargaining or otherwise, all medical, vision, dental and other health plans, all life insurance plans, and all other employee benefit plans or fringe benefit plans, including, without limitation, any "employee benefit plan," as that term is defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored in whole or in part by, or contributed to by Virginia Gas or any of the Virginia Gas Subsidiaries or affiliates thereof for the benefit of employees, retirees, dependents, spouses, directors, independent contractors or other beneficiaries and under which employees, retirees, dependents, spouses, directors, independe nt contractors, or other beneficiaries are eligible to participate. Any of the Virginia Gas Benefit Plans which is an "employee pension benefit plan," as that term is defined in Section 3(2) of ERISA, is referred to herein as a "Virginia Gas ERISA Plan."

     (b)  No Virginia Gas Benefit Plan is or has been a multiemployer plan within the meaning of Section 3(37) of ERISA nor has Virginia Gas or any Virginia Gas Subsidiary participated in or withdrawn from a multiemployer plan. All Virginia Gas Benefit Plans are in compliance with the applicable provisions (including, without limitation, any funding requirements or limitations) of ERISA, the Code and any other applicable Laws, the breach or violation of which could have a Material Adverse Effect on the Virginia Gas Companies. No Virginia Gas Benefit Plan provides for post-retirement medical benefit obligations (without regard to COBRA obligations). No Virginia Gas ERISA Plan that is a defined benefit pension plan has any "unfunded current liability," as that term is defined in Section 302(d)(8)(A) of ERISA, and the present fair market value of the assets of any such plan exceeds the plan's "benefit liabilities," as that term is defined in Section 4001(a)(16) of ERISA, when determined under actuarial factors that would apply if the plan terminated in accordance with all applicable legal requirements.

     (c)  Exhibit 5.12 hereto is a true and correct list of all Virginia Gas Benefit Plans. Virginia Gas has provided NUI Holding with access to true and correct copies of each governing document for each Virginia Gas Benefit Plan, together with any amendments, trust agreements (if applicable), insurance contracts, the most recent summary plan description, annual report and audited financial statement for each such plan and the actuarial report for any Virginia Gas Benefit Plan that is a defined benefit pension plan or funded welfare benefit plan. With respect to any Virginia Gas Benefit Plan, Virginia Gas has retained the right to terminate such plan at any time for any reason.

     (d)  Except as set forth on Exhibit 5.12 hereto, (i) with respect to each Virginia Gas Benefit Plan intended to be qualified under Code Section 401(a), the trust forming a part thereof has received a favorable determination letter from the IRS as to its qualification under the Code and no fact or condition has occurred which could reasonably be expected to result in the disqualification of such Virginia Gas Benefit Plan or adversely affect the tax-exempt status of such trust, (ii) there are no pending or, to the Knowledge of Virginia Gas, threatened claims by or on behalf of any Virginia Gas Benefit Plans (other than routine claims for benefits) and (iii) all contributions, premiums and benefit payments required to be made or paid by Virginia Gas or any Virginia Gas Subsidiary in respect of any Virginia Gas Benefit Plan have been paid within the earliest time required by Law or by the Virginia Gas Benefit Plan.

Section 5.13  Tax Matters.

     (a)  Except as set forth on Exhibit 5.13 attached hereto:

        (i)  Virginia Gas and each Virginia Gas Subsidiary that is incorporated under the laws of the United States or of any of the United States are members of the affiliated group, within the meaning of Section 1504(a) of the Code, of which Virginia Gas is the common parent, such affiliated group files a consolidated federal income tax return and neither Virginia Gas nor any of the Virginia Gas Subsidiaries has ever filed a consolidated federal income tax return with (or been included in a consolidated return of) a different affiliated group;

        (ii)  Virginia Gas and each of the Virginia Gas Subsidiaries has timely filed or caused to be filed all Tax Returns required to have been filed by or for it, and all information set forth in such Tax Returns is accurate and complete in all material respects;

        (iii)  Virginia Gas and each of the Virginia Gas Subsidiaries has paid or made adequate provision on its books and records in accordance with GAAP for all Taxes covered by such Tax Returns;

        (iv)  Virginia Gas and each of the Virginia Gas Subsidiaries is in material compliance with, and its records contain all information and documents necessary to comply with, all applicable information reporting and tax withholding requirements under federal, state, local and foreign Laws, and such records identify with specificity all accounts subject to withholding under Section 1441, 1442 or 3406 of the Code or similar provisions of state, local or foreign laws;

       (v)  there is not an amount of unpaid Taxes due and payable by Virginia Gas or any of the Virginia Gas Subsidiaries or by any other person that is or could become a lien on any asset of, or that otherwise could have a Material Adverse Effect on, the Virginia Gas Companies;

        (vi)  Virginia Gas and each of the Virginia Gas Subsidiaries has collected or withheld all Taxes required to be collected or withheld by it, and all such Taxes have been paid to the appropriate Governmental Authority or set aside in appropriate accounts for future payment when due;

        (vii)  neither Virginia Gas nor any of the Virginia Gas Subsidiaries has granted (or is subject to) any waiver, which is currently in effect, of the period of limitations for the assessment of any Tax; no unpaid Tax deficiency has been assessed or asserted against, or with respect to, Virginia Gas or any of the Virginia Gas Subsidiaries by any Governmental Authority; no power of attorney relating to Taxes that is currently in effect has been granted by, or with respect to, Virginia Gas or any of the Virginia Gas Subsidiaries; there are no currently pending administrative or judicial proceedings, or any deficiency or refund litigation, with respect to Taxes of Virginia Gas or any of the Virginia Gas Subsidiaries, the adverse outcome of which would have a Material Adverse Effect on the Virginia Gas Companies; and any such assertion, assessment, proceeding or litigation disclosed in Exhibit 5.13 hereto is being contested in good faith through a ppropriate measures, and its status is described in Exhibit 5.13 hereto;

        (viii) neither Virginia Gas nor any of the Virginia Gas Subsidiaries has made or entered into, or holds any asset subject to, a consent filed pursuant to Section 341(f) of the Code and the regulations thereunder or a "safe harbor lease" subject to Section 168(f)(8) of the Internal Revenue Code of 1954, as amended prior to the Deficit Reduction Act of 1984, and the regulations thereunder;

        (ix)  neither Virginia Gas nor any of the Virginia Gas Subsidiaries is required to include in income any amount from an adjustment pursuant to Section 481 of the Code or the regulations thereunder or any similar provision of state or local Law, and Virginia Gas has no Knowledge that any Governmental Authority has proposed any such adjustment;

        (x)  neither Virginia Gas nor any of the Virginia Gas Subsidiaries is obligated to make any payments, or is a party to any Contract that could obligate it to make any payments, that would not be deductible by reason of Sections 162(m) or 280G of the Code;

        (xi)  there are no excess loss accounts or deferred intercompany gains with respect to any member of the affiliated group of which Virginia Gas is the common parent which would have a Material Adverse Effect on the Virginia Gas Companies if taken into account;

        (xii)  the most recent audited consolidated balance sheet included in the Virginia Gas SEC Reports fully and properly reflects, in all material respects, as of the date thereof, the liabilities of Virginia Gas and the Virginia Gas Subsidiaries for all accrued Taxes and deferred liability for Taxes and, for periods ending after such date, the books and records of each such corporation fully and properly reflect its liability for all accrued Taxes; and

        (xiii)  since April 16, 1997, neither Virginia Gas nor any Virginia Gas Subsidiary has distributed to their respective stockholders or security holders stock or securities of a controlled corporation in a transaction to which Section 355(a) of the Code applies.

     (b)  Exhibit 5.13 describes all material and continuing Tax elections, consents and agreements made by or affecting Virginia Gas or any Virginia Gas Subsidiary, lists all types of material Taxes paid and Tax Returns filed by or on behalf of Virginia Gas or any Virginia Gas Subsidiary and expressly indicates each Tax with respect to which Virginia Gas or any Virginia Gas Subsidiary is or has been included in a consolidated, unitary or combined return.

Section 5.14  Compliance with Law. The conduct of the businesses of Virginia Gas and the Virginia Gas Subsidiaries and their use of their assets does not violate or conflict, and has not violated or conflicted, with any Law, which violation or conflict could have a Material Adverse Effect on the Virginia Gas Companies.

Section 5.15  Transactions With Affiliates. Except as set forth in Exhibit 5.15 attached hereto, since December 31, 1998, neither Virginia Gas nor any of the Virginia Gas Subsidiaries has, in the ordinary course of business or otherwise, (i) purchased, leased or otherwise acquired any property or assets or obtained any services from, (ii) sold, leased or otherwise disposed of any property or assets or provided any services to (except with respect to remuneration for services rendered in the ordinary course of business as a director, officer or employee of one or more of Virginia Gas or any Virginia Gas Subsidiary), (iii) entered into or modified in any manner any Contract with, or (iv) borrowed any money from, or made or forgiven any loan or other advance to, any Other Virginia Gas Interested Person that, considering the matters set forth in clauses (i) through (iv) in the aggregate, exceeded a value of $75,000. Except as set forth in Exhibit 5.15, (i) the C ontracts of Virginia Gas and the Virginia Gas Subsidiaries do not include any obligation or commitment between Virginia Gas or any of the Virginia Gas Subsidiaries, on the one hand, and any Other Virginia Gas Interested Person, on the other hand, (ii) the assets of Virginia Gas and the Virginia Gas Subsidiaries do not include any receivable or other obligation or commitment from any Other Virginia Gas Interested Person that, in the aggregate, exceeds a value of $75,000 and (iii) the liabilities of Virginia Gas and the Virginia Gas Subsidiaries do not include any payable or other obligation or commitment to any Other Virginia Gas Interested Person that, in the aggregate, exceeds a value of $75,000. Except as set forth in Exhibit 5.15 hereto, no Other Virginia Gas Interested Person is a party to any Contract with any customer or supplier of Virginia Gas or any Virginia Gas Subsidiary (excluding the Virginia Gas Affiliates) and, to the Knowledge of Virginia Gas, no Virginia Gas Affiliate is a party to a ny such Contract, that affects in any manner the business, financial condition or results of operation of any of the Virginia Gas Companies.

Section 5.16  Environmental Conditions.

     (a)  Definitions. When used in this Section 5.16:

        (i)  "Environmental Laws" shall mean any and all federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or requirements of any Governmental Authority regulating, relating to or imposing liability or standards of conduct concerning any Hazardous Materials or environmental protection in effect as of the date of this Agreement or at the Effective Time, together with any amendment or re-authorization thereto or thereof;

        (ii)  "Hazardous Materials" shall mean any hazardous material, hazardous waste, infectious medical waste, Petroleum and Natural Gas Products, hazardous or toxic substance defined or regulated as such in or under any Environmental Law, including, without limitation, materials exhibiting the characteristics of ignitability, corrosivity, reactivity or extraction procedure toxicity, as such terms are defined as of the date of this Agreement or at the Effective Time in connection with hazardous materials or hazardous wastes or hazardous or toxic substances in any Environmental Law; and

        (iii)  "Petroleum and Natural Gas Products" shall mean crude oil, petroleum or fractions thereof, gasoline, diesel fuel, motor oil, waste or used oil, heating oil, kerosene and any other petroleum products and natural gas, natural gas liquids, liquefied natural gas or synthetic gas useable for fuel.

     (b)  Except as set forth in Exhibit 5.16 attached hereto, and except for such violations that in the aggregate would not have a Material Adverse Effect on the Virginia Gas Companies, (i) neither Virginia Gas nor any Virginia Gas Subsidiary has used, stored, treated, transported, manufactured, refined, handled, produced, disposed of, managed, spilled or released any Hazardous Materials on, under, at, from or in any way affecting any of its properties or assets (including, without limitation, any properties or assets now or previously used, owned or operated by Virginia Gas or any Virginia Gas Subsidiary) or otherwise, in any manner which at the time of the action in question violated any Environmental Law governing the use, storage, treatment, transportation, manufacture, refinement, handling, production, disposal, management, spill or release of Hazardous Materials, and (ii) to the Knowledge of Virginia Gas, no prior owner of such property or asset or any ten ant, subtenant, prior tenant or prior subtenant thereof has used Hazardous Materials on, from or in any way affecting any such property or asset, or otherwise, in any manner which at the time of the action in question violated any Environmental Law governing the use, storage, treatment, transportation, manufacture, refinement, handling, production, disposal, management, spill or release of Hazardous Materials.

     (c)  Except as set forth in Exhibit 5.16 attached hereto, neither Virginia Gas nor any Virginia Gas Subsidiary has any obligations or liabilities, whether absolute or contingent, accrued or unaccrued, asserted or unasserted, known or unknown, or otherwise, that could have a Material Adverse Effect on the Virginia Gas Companies, and no claims have been made against Virginia Gas or any Virginia Gas Subsidiary and no citations or notices have been issued against Virginia Gas or any Virginia Gas Subsidiary that could have a Material Adverse Effect on the Virginia Gas Companies, and that in the case of any of the foregoing, have been or are imposed by reason of or based upon any provision of any Environmental Laws, including, without limitation, any such obligations or liabilities relating to or arising out of or attributable, in whole or in part, to the manufacture, processing, distribution, use, treatment, storage, production, management, spill, release, disposa l, arranging for disposal, transport or handling of any Hazardous Materials by Virginia Gas or any Virginia Gas Subsidiary or, to the Knowledge of Virginia Gas, by any predecessors in interest in connection with or in any way arising from or relating to Virginia Gas or any Virginia Gas Subsidiary or any of their respective properties, or relating to or arising from or attributable, in whole or in part, to the manufacture, processing, distribution, use, treatment, storage, disposal, production, management, spill, release, transport or handling of any such substance by any other person at or on or under any of the real properties owned or used by Virginia Gas or any Virginia Gas Subsidiary.

     (d)  Except as set forth on Exhibit 5.16 attached hereto, Virginia Gas and the Virginia Gas Subsidiaries have received all Permits as may be required of them under applicable Environmental Laws to conduct their respective businesses, and Virginia Gas and the Virginia Gas Subsidiaries are in compliance in all material respects with the terms and conditions of all such Permits. Neither Virginia Gas nor any Virginia Gas Subsidiary has received any notices or claims, nor, to the Knowledge of Virginia Gas, is there a factual basis for such a claim, that it is a responsible party in connection with any claim or notice asserted pursuant to 42 U.S.C. Section 9601 et seq. ("CERCLA"), or any state superfund law.

     (e)  The operation of the business of Virginia Gas and the Virginia Gas Subsidiaries has not adversely impacted any "wetlands" (as that term is currently defined by the U.S. Army Corps of Engineers or any other regulatory agency) located on any of the real property owned, operated or leased by Virginia Gas or any of the Virginia Gas Subsidiaries.

     (f)  There are no (i) underground storage tanks, (ii) asbestos containing material or (iii) lead containing material on any real property owned, operated or leased by Virginia Gas or any of the Virginia Gas Subsidiaries, the presence of which could result in a Material Adverse Effect.

     (g)  To the Knowledge of Virginia Gas, neither Virginia Gas nor any Virginia Gas Subsidiary has transported or disposed, or allowed or arranged for any third parties to transport or dispose, of any Hazardous Material or other waste to or at a site which, pursuant to CERCLA or any applicable state law, has been placed on the National Priorities List or its state equivalent (a "Superfund Site"). Neither Virginia Gas nor any Virginia Gas Subsidiary has received notice, nor, to the Knowledge of Virginia Gas, do any facts exist that could give rise to any notice, that Virginia Gas or any Virginia Gas Subsidiary is a potentially responsible party with respect to a Federal or state Superfund Site or for corrective action under CERCLA or any other applicable Law. Neither Virginia Gas nor any Virginia Gas Subsidiary has submitted or was required to submit any notice pursuant to Section 103(c) of CERCLA with respect to any real property. Neither Virginia Gas nor any Virgin ia Gas Subsidiary has received any written or oral request for information in connection with any Federal or state Superfund Site. Neither Virginia Gas nor any Virginia Gas Subsidiary has been requested to, or has undertaken, any response or remedial actions or clean-up actions of any kind at the request of any Governmental Authority or at the request of any other Person.

Section 5.17  Insurance. Except to the extent adequately accrued on the most recent balance sheet contained in the Virginia Gas SEC Reports, neither Virginia Gas nor any Virginia Gas Subsidiary has any obligation (contingent or otherwise) to pay in connection with any insurance policies any retroactive premiums or "retro-premiums" that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

Section 5.18  Intellectual Property. Neither Virginia Gas nor any Virginia Gas Subsidiary currently utilizes, or to the Knowledge of Virginia Gas, has in the past utilized, any existing or pending patent, trademark, trade name, service mark, copyright, software, trade secret or know-how, except for those which are owned, possessed or lawfully used by Virginia Gas or any Virginia Gas Subsidiary in their business operations, and neither Virginia Gas nor any Virginia Gas Subsidiary infringes upon or unlawfully uses any patent, trademark, trade name, service mark, copyright or trade secret owned or validly claimed by another person except, in each case, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Virginia Gas and the Virginia Gas Subsidiaries own, have a valid license to use or otherwise have the right validly to use all existing and pending patents, trademarks, tradenames, service marks, copyrights and software necessary to carr y on their respective businesses substantially as currently conducted, except where the absence of such ownership, valid license or other valid right to use would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

Section 5.19  Fees and Expenses of Brokers and Others. Neither Virginia Gas nor any Virginia Gas Subsidiary (other than the Virginia Gas Affiliates) and, to the Knowledge of Virginia Gas, none of the Virginia Gas Affiliates (a) has had any dealings, negotiations or communications with any broker or other intermediary in connection with the transactions contemplated by this Agreement, (b) is committed to any liability for any brokers' or finders' fees or any similar fees in connection with the transactions contemplated by this Agreement or (c) has retained any broker or other intermediary to act on its behalf in connection with the transactions contemplated by this Agreement, except that Virginia Gas has engaged CIBC to represent it in connection with such transactions, and shall pay all of CIBC's fees and expenses in connection with such engagement.

Section 5.20  Regulation as Utility.

     (a)  Based solely upon an opinion of counsel with respect to Virginia Gas that was delivered in connection with a previous transaction (a true and correct copy of which has been delivered by Virginia Gas to NUI Holding), Virginia Gas is not a "holding company" within the meaning of Section 2(a)(7) of PUHCA as a result of Virginia Gas Distribution Company's business activities. Since the date of such opinion, the business activities of Virginia Gas Distribution Company have been no less favorable to supporting such an opinion than the business activities that formed the basis of such legal opinion.

     (b)  Except as set forth on Exhibit 5.20 attached hereto, neither Virginia Gas nor any Virginia Gas Subsidiary is subject to regulation as a "public utility" as that phrase is defined in Virginia Code Ann. 56-265.1(b) or "public service corporation" as that phrase is defined in Virginia Code Ann.  56-1.

     (c)  Neither Virginia Gas nor any Virginia Gas Subsidiary is subject to regulation as a public utility or public service company (or similar designation) in any state other than Virginia.

Section 5.21  FERC Jurisdiction. Neither Virginia Gas nor any Virginia Gas Subsidiary owns or operates any FERC jurisdictional facilities giving rise to a requirement for approval of the Merger by FERC.

Section 5.22  Accuracy of Information. Neither this Agreement nor any other document provided by the Virginia Gas Companies or their employees or agents to NUI Holding in connection with the transactions contemplated herein, when this Agreement and such other documents are considered in the aggregate, contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained therein not misleading.

Section 5.23  Absence of Undisclosed Liabilities. Except as disclosed in the Virginia Gas SEC Reports filed prior to the date of this Agreement or in Exhibit 5.23 attached hereto, neither Virginia Gas nor any Virginia Gas Subsidiary has, as of the date hereof, or will have, as of the Effective Time, any liabilities or obligations of any kind, whether absolute, accrued, asserted or unasserted, contingent or otherwise, that would be required to be disclosed on a consolidated balance sheet of Virginia Gas, or reflected in the notes thereto, prepared as of such date, in accordance with GAAP, except liabilities, obligations or contingencies that were (a) reflected on or accrued or reserved against in the consolidated balance sheet of Virginia Gas as of December 31, 1999, which is included in the Virginia Gas SEC Reports, or reflected in the notes thereto, or (b) incurred after the date of such balance sheet in the ordinary course of business and consistent with past practices and which, individually or in the aggregate, would not have a Material Adverse Effect on the Virginia Gas Companies. Neither Virginia Gas nor any Virginia Gas Subsidiary is a party to any Contract, or subject to any charter or other corporate or partnership restriction, or subject to any judgment, order, writ, injunction, decree, rule or regulation, which will have a Material Adverse Effect on the Virginia Gas Companies.

Section 5.24  Opinion of Financial Advisor. Virginia Gas has received the opinions of CIBC to the effect that, as of the date of the Original Merger Agreement and as of October 3, 2000, the exchange ratio contemplated in this Agreement is fair to the holders of shares of Virginia Gas Common Stock from a financial point of view.

Section 5.25  Virginia Gas Year 2000 Compliance. The Virginia Gas Companies did not suffer any Material Adverse Effect in connection with their efforts to prepare for, or remediation efforts related to, the ability of their computer applications (including software, firmware, hardware and other similar or related items of automated computerized or software systems) to perform properly date sensitive functions for all dates, before and after January 1, 2000 ("Year 2000 Compliance"), or in connection with any failure by any vendor, customer or other third party to achieve Year 2000 Compliance.

Section 5.26  Vote Required. The affirmative vote of the holders of a majority of the outstanding shares of Virginia Gas Common Stock entitled to vote thereon was the only vote of the holders of any class or series of Virginia Gas' capital stock necessary to adopt the Original Merger Agreement and the transactions contemplated thereby, including the amendment and restatement of the Original Merger Agreement as set forth in this Agreement. The Board of Directors of Virginia Gas (at a meeting duly called and held) (a) unanimously approved the Original Merger Agreement, this Agreement and the transactions contemplated hereby, (b) determined that the Merger is fair to and in the best interests of the holders of Virginia Gas Common Stock, (c) recommended the Original Merger Agreement to such holders for adoption and (d) directed that the Original Merger Agreement be submitted to holders of Virginia Gas Common Stock.

Section 5.27  Section 203 of the DGCL; State Takeover Statutes. Prior to the date hereof, the Board of Directors of Virginia Gas has approved this Agreement and the transactions contemplated hereby and such approval is sufficient to render inapplicable to the Merger and any of such other transactions the provisions of Section 203 of the DGCL. No other state takeover statute or similar statute or regulation applies or purports to apply to this Agreement, the Merger or any of the other transactions contemplated hereby and no provision of the Certificates or Articles of Incorporation, bylaws or other governing instruments of any of the Virginia Gas Companies would, directly or indirectly, restrict or impair the ability of NUI Holding to vote, or otherwise to exercise the rights of a stockholder with respect to, shares of the Virginia Gas Companies that may be acquired or controlled by NUI Holding as contemplated by this Agreement.

Section 5.28  Virginia Gas Affiliates and Partnerships.

     (a)  There are no claims, including, without limitation, claims of breach of fiduciary duty or unlawful payment of distributions, pending or threatened by any shareholder of the Virginia Gas Affiliates against the board of directors or any other shareholder of the Virginia Gas Affiliates. All borrowings by the Virginia Gas Affiliates have been approved by all necessary action, including, without limitation, all shareholder action required by the Bylaws of the Virginia Gas Affiliates.

     (b)  Virginia Gas has provided NUI with true and correct copies of all governing documents related to the Virginia Gas Partnerships and of all other documents relating to the Virginia Gas Partnerships reasonably requested by NUI that are in the possession of Virginia Gas or which Virginia Gas has the right to obtain. To the Knowledge of Virginia Gas, no action has been taken or is pending for the dissolution or liquidation of any of the Virginia Gas Partnerships. Except as set forth in Exhibit 5.28 attached hereto, Virginia Gas has not been requested to make any additional capital contributions that currently remain unfunded or otherwise outstanding and, to the Knowledge of Virginia Gas, no such additional capital contribution requests are contemplated with respect to any Virginia Gas Partnership.

Section 5.29  Certain Agreements.

     (a)  Virginia Gas and Michael L. Edwards have duly executed and delivered the Change of Control Agreement, dated as of June 13, 2000, in the form previously provided to NUI Holding (the "Edwards Agreement"). The Edwards Agreement is in full force and effect, constitutes the valid and binding agreement of the parties thereto and is enforceable against the parties thereto in accordance with its terms.

     (b)  The transactions contemplated by that certain Contract of Sale, dated as of June 13, 2000, between Virginia Gas, the Town of Saltville, Virginia, and the Saltville Industrial Development Authority, in the form of Exhibit 5.29 to the Original Merger Agreement (the "Saltville Purchase Agreement"), have been consummated in accordance with the terms thereof.

ARTICLE VI

COVENANTS

Section 6.1  Conduct of the Businesses of NUI Holding and Virginia Gas.

     (a)  Except as otherwise expressly provided in this Agreement, during the period from the date of this Agreement to the Effective Time, Virginia Gas and the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) will conduct their respective operations according to their ordinary and usual course of business and consistent with past practice, and will use their respective reasonable best efforts to preserve intact their respective business organizations, to keep available the services of their officers and employees and to maintain satisfactory relationships with licensors, licensees, suppliers, contractors, distributors, customers and others having material business relationships with them (and, with respect to the Virginia Gas Affiliates and the Virginia Gas Partnerships, Virginia Gas will not approve or otherwise take, or refrain from taking, any action in its capacity as a stockholder or partner that is inconsistent with the foregoing). Without limi ting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Effective Time, neither Virginia Gas nor any of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) will, and, with respect to the Virginia Gas Affiliates and the Virginia Gas Partnerships, Virginia Gas will not approve or otherwise take, or refrain from taking, any action that may facilitate or result in the following actions, without the prior written consent of NUI Holding:

        (i)  amend its Certificates or Articles of Incorporation, bylaws, partnership or joint venture agreements or other organizational documents;

        (ii)  authorize for issuance or issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or interests, except as required by the terms of any Virginia Gas Benefit Plan existing on the date hereof, or any options, warrants, rights or other securities outstanding as of the date hereof and disclosed pursuant to this Agreement;

        (iii)  split, combine or reclassify any shares of its capital stock or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, or redeem or otherwise acquire any of its securities or any securities of the Virginia Gas Subsidiaries or the Virginia Gas Partnerships;

        (iv)  (A) incur or assume any Funded Debt (as defined below) not currently outstanding, (B) assume, guarantee, endorse or otherwise become liable or responsible for the obligations of any person except Virginia Gas or a Virginia Gas Subsidiary (other than a Virginia Gas Affiliate), (C) make any loans, advances or capital contributions to, or investments in, any other person, (D) enter into any Contract, or alter, amend, modify or exercise any option under any existing Contract, other than in the ordinary course of business or in connection with the transactions contemplated by this Agreement, (E) authorize any single capital expenditure which is in excess of $50,000 or capital expenditures which are, in the aggregate, in excess of $75,000, other than capital expenditures pursuant to Contracts entered into prior to June 13, 2000, or reflected in Virginia Gas' fiscal 2000 or fiscal 2001 capital budgets furnished to NUI Holding prior to the date hereo f or (F) incur or permit to exist any mortgage, lien, encumbrance, charge, claim, restriction, pledge, security interest or imposition affecting any of its assets, except as disclosed on Exhibit 5.9 attached hereto;

        (v)  adopt or amend (except as may be required by Law or as provided in this Agreement) any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, pension, retirement, deferred compensation, employment, severance or other employee benefit agreements, trusts, plans, funds or other arrangements for the benefit or welfare of any director, officer or employee, or (except for normal increases in the ordinary course of business that are consistent with past practices and that, in the aggregate, do not result in a material increase in benefits or compensation expense) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any existing plan or arrangement (including, without limitation, the granting of stock options, stock appreciation rights, shares of restricted stock or performance units) or enter into any Contract, agreement, commitment or arrangement to do any of the foregoing;

        (vi)  acquire, sell, lease or dispose of any material assets outside the ordinary course of business;

        (vii)  take any action other than in the ordinary course of business and in a manner consistent with past practice with respect to accounting policies or practices;

        (viii)  make any Tax election or settle or compromise any federal, state, local or foreign income Tax liability involving, in the aggregate, an amount in excess of $75,000;

        (ix)  except for the payment of professional fees, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in Virginia Gas' audited consolidated balance sheets as of December 31, 1999, or incurred in the ordinary course of business since the date thereof;

        (x)  hold any meeting of its stockholders except to the extent required by the request of the stockholders entitled to call a meeting under the Virginia Gas bylaws or the DGCL;

        (xi)  take any action that would or is reasonably likely to result in any of the conditions set forth in Article VII not being satisfied as of the Closing Date;

        (xii)  make any filing with any Governmental Authority to materially change rates on file;

        (xiii)  voluntarily engage in any activities which could be reasonably expected to cause a change in Virginia Gas' status under PUHCA; or

        (xiv)  agree in writing or otherwise to take any of the foregoing actions.

     For purposes of this Section, "Funded Debt" shall mean, without duplication, (i) all indebtedness for borrowed money or which has been incurred in connection with the acquisition of assets, (ii) all rentals payable under capitalized leases, and (iii) all guaranties of Funded Debt of others.

     (b)  Except as otherwise expressly provided in this Agreement, prior to the Effective Time, NUI Holding will not, without the prior written consent of Virginia Gas, take any action that would or is reasonably likely to result in any of the conditions set forth in Article VII not being satisfied as of the Closing Date.

     (c)  NUI Holding and Virginia Gas agree that, during the period from the date of this Agreement to the Effective Time: (i) they will cause representatives of their respective companies to meet in person or telephonically, no less frequently than every two weeks, to discuss the operations and business prospects of their companies; and (ii) Virginia Gas will promptly advise NUI Holding of the occurrence of any Material Adverse Effect with respect to the Virginia Gas Companies, and NUI Holding will promptly advise Virginia Gas of the occurrence of any Material Adverse Effect with respect to the NUI Holding Companies.

Section 6.2  No Solicitation.

     (a)  Prior to the Effective Time, Virginia Gas agrees that neither it nor any of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) or any of their respective directors, officers, employees, agents or representatives will, directly or indirectly, (i) solicit, initiate, facilitate or encourage (including by way of furnishing or disclosing non-public information) any inquiries or the making of any proposal with respect to any merger, consolidation or other business combination involving Virginia Gas or any Virginia Gas Subsidiary, or the acquisition of all or any significant part of the assets or capital stock of Virginia Gas or any Virginia Gas Subsidiary (an "Acquisition Transaction") or (ii) negotiate, explore or otherwise engage in discussions with any individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or oth er entity (each, a "Person") (other than NUI Holding and its representatives) with respect to any Acquisition Transaction, or which may reasonably be expected to lead to a proposal for an Acquisition Transaction, or enter into any agreement, arrangement or understanding with respect to any such Acquisition Transaction; provided, however, that Virginia Gas may, in response to an unsolicited written proposal from a third party regarding a Superior Proposal (as hereinafter defined), furnish information to and engage in discussions and negotiations with such third party, but only if the Board of Directors of Virginia Gas determines in good faith, after consultation with its financial advisors and based upon the advice (in the form of a written reasoned opinion) of outside independent counsel, that failing to take such action would result in a breach of the fiduciary duties of such Board of Directors under applicable Law; and provided, further, that with respect to the Virginia Gas Aff iliates, Virginia Gas will not approve or otherwise take, or refrain from taking, any action in its capacity as a stockholder that would permit a Virginia Gas Affiliate to take any action that the Virginia Gas Subsidiaries are prohibited from taking pursuant to the foregoing. It is understood and agreed, without limitation of Virginia Gas' obligations, that any violation of this Section 6.2 by any director, officer, investment banker, financial advisor, attorney or other advisor or representative of Virginia Gas, whether or not such Person is purporting to act on behalf of Virginia Gas, or otherwise, shall be deemed to be a breach of this Section 6.2 by Virginia Gas.

     (b)  Virginia Gas agrees that it and the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates), and their respective directors, officers, employees, agents and representatives, shall immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Person (other than NUI Holding and its representatives) conducted heretofore with respect to any Acquisition Transaction. Virginia Gas agrees to promptly advise NUI Holding in writing of the existence of (y) any inquiries or proposals (or desire to make a proposal) received by (or indicated to), any such information requested from, or any negotiations or discussions sought to be initiated or continued with, Virginia Gas and the Virginia Gas Subsidiaries, or any of their respective directors, officers, employees, agents or representatives, in each case from a Person (other than NUI Holding and its representatives) with respect to an Acquisition Transaction, and (z) the terms thereof, including the identity of such third party and the terms of any financing arrangement or commitment in connection with such Acquisition Transaction, and to update on an ongoing basis or upon NUI Holding's reasonable request, the status thereof. As used herein, "Superior Proposal" means a bona fide, written and unsolicited proposal or offer made by any Person (or group) (other than NUI Holding) with respect to an Acquisition Transaction on terms which, as determined by the Board of Directors of Virginia Gas in good faith and in the exercise of reasonable judgment (based on the written advice of independent financial advisors), is at a higher price and more favorable to Virginia Gas and its stockholders than the transactions contemplated hereby.

Section 6.3  The Registration Statement; Listing.

     (a)  NUI and NUI Holding filed the Registration Statement with the SEC, and the Registration Statement was declared effective by the SEC on October 5, 2000.

     (b)  From the date hereof through the Effective Time, NUI Holding shall:

        (i)  not file any amendment or supplement to the Registration Statement without first furnishing to Virginia Gas a copy thereof for its review and will not file any such proposed amendment or supplement to which Virginia Gas reasonably and promptly objects;

        (ii)  to the extent required by applicable Law, cause the registration or qualification of the NUI Holding Common Stock to be issued upon conversion of shares of Virginia Gas Common Stock in accordance with this Agreement under the state securities or "Blue Sky" laws of each state of residence of a record holder of Virginia Gas Common Stock as reflected in its stock transfer ledger;

        (iii)  promptly advise Virginia Gas (A) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose and (B) of the receipt by NUI Holding of any notification with respect to the suspension of the registration or qualification of NUI Holding Common Stock for sale in any jurisdiction or the institution or threatening of any proceeding for that purpose;

        (iv)  use its best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof; and

        (v)  use its best efforts to cause the shares of NUI Holding Common Stock to be issued upon conversion of shares of Virginia Gas Common Stock in accordance with this Agreement to be listed for trading on the NYSE upon official notice of issuance.

     If, at any time when the Joint Proxy Statement/Prospectus is required to be delivered under the Securities Act or the Exchange Act, any event occurs as a result of which the Joint Proxy Statement/Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Joint Proxy Statement/Prospectus to comply with the Securities Act or the Exchange Act or the respective rules thereunder, Virginia Gas and NUI Holding will cooperate to permit NUI Holding promptly to prepare and file with the SEC an amendment or supplement that will correct such statement or omission or effect such compliance.

Section 6.4  Access to Information; Confidentiality Agreement.

     (a)  Between the date of this Agreement and the Effective Time, Virginia Gas will (i) give to NUI Holding and its authorized representatives reasonable access during normal business hours to all plants, offices, warehouses and other facilities and to all books and records of Virginia Gas and the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates), and will use its best efforts to provide such access with respect to the Virginia Gas Affiliates, (ii) permit NUI Holding to make such inspections as it may reasonably request and (iii) cause its officers and those of the Virginia Gas Subsidiaries (other than the Virginia Gas Affiliates) to furnish such financial and operating data and other information in the possession of Virginia Gas or to which Virginia Gas has the right to obtain with respect to the business and properties of the Virginia Gas Companies as may from time to time reasonably be requested. Subject to Section 6.7 hereof, all such info rmation shall be kept confidential in accordance with the Confidentiality Agreement.

        (b)  Notwithstanding the execution of this Agreement, the Confidentiality Agreement shall remain in full force and effect through the Effective Time and shall be binding upon NUI Holding as if it were a party thereto. Each party hereto waived the provisions of the Confidentiality Agreement as and to the extent necessary to permit the solicitation of votes of the stockholders of Virginia Gas pursuant to the Joint Proxy Statement/Prospectus and to permit consummation of the transactions contemplated hereby. Each party further acknowledges that the Confidentiality Agreement shall survive any termination of this Agreement pursuant to Section 8.1 hereof.

        (c)  The Virginia Gas Companies shall provide to NUI Holding and its agents access to all real property to which any Virginia Gas Company has, or has the right to obtain, access for the purpose of conducting Phase I environmental assessments. If the results of any Phase I environmental site assessment relating to a location set forth on Exhibit 6.4 attached hereto reasonably indicates that a Phase II environmental site assessment is prudent under the circumstances, Virginia Gas shall provide to NUI Holding and its agents access to conduct such Phase II environmental site assessment. If the results of any Phase I environmental site assessment relating to a location other than a location set forth on Exhibit 6.4 attached hereto reasonably indicates that a Phase II environmental site assessment is prudent under the circumstances, NUI Holding may request that Virginia Gas provide to NUI Holding and its agents access to conduct such Phas e II environmental site assessment. Subject to the provisions of Section 8.1(d)(iii) hereof, Virginia Gas may grant or deny such access in its sole discretion.

Section 6.5  Best Efforts. Subject to the terms and conditions herein provided and subject to fiduciary obligations under applicable Law as advised by counsel, each of the parties hereto agrees to use its best efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper and advisable under applicable Law, to consummate and make effective the transactions contemplated by this Agreement. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each party to this Agreement shall take all such necessary action. NUI Holding and Virginia Gas will execute any additional instruments necessary to consummate the transactions contemplated hereby.

Section 6.6  Consents. Virginia Gas and NUI Holding each will use its best efforts to obtain consents of, and make all required filings with, all third parties and Governmental Authorities necessary to the consummation of the transactions contemplated by this Agreement, including, without limitation, all consents required with respect to the HSR Act (it being understood that early termination of the waiting period under the HSR Act was granted on September 27, 2000) and the approval of the VSCC.

Section 6.7  Public Announcements. Virginia Gas and NUI Holding will consult with each other before issuing any press release or otherwise making any public statement with respect to this Agreement, the Merger or the transactions contemplated herein and shall not issue any such press release or make any such public statement prior to such consultation or as to which the other party promptly and reasonably objects, except as may be required by Law in the written reasoned opinion of such party's counsel or by obligations pursuant to any listing agreement with any national securities exchange or inter-dealer quotation system, in which case the party proposing to issue such press release or make such public announcement shall use its best efforts to consult in good faith with the other party before issuing any such press release or making any such public announcements.

Section 6.8  Affiliates. Virginia Gas shall use its best efforts to cause each principal executive officer, each director and each other person who may be deemed to be an "affiliate," for purposes of Rule 145 under the Securities Act, of Virginia Gas to deliver to NUI Holding at or prior to the Effective Time a written agreement (substantially in the form of Exhibit 6.8 attached hereto) to the effect that such person will not offer to sell, sell or otherwise dispose of any shares of NUI Holding Common Stock issued in the Merger, except, in each case, pursuant to an effective registration statement or in compliance with Rule 145, as amended from time to time, or in a transaction which, in the opinion of legal counsel satisfactory to NUI Holding, is exempt from the registration requirements of the Securities Act.

Section 6.9  Letter of Virginia Gas' Accountants. Virginia Gas shall use its best efforts to cause to be delivered to NUI Holding a letter from Arthur Anderson, LLP, dated the Closing Date, in form and substance reasonably satisfactory to NUI Holding and Virginia Gas and customary in scope and substance for agreed-upon procedures letters delivered by independent accountants in connection with registration statements similar to the Registration Statement.

Section 6.10  Letter of NUI's Accountants. NUI Holding shall use its best efforts to cause to be delivered to Virginia Gas a letter from Arthur Andersen, LLP, dated the Closing Date, in form and substance reasonably satisfactory to Virginia Gas and NUI Holding and customary in scope and substance for agreed-upon procedures letters delivered by independent accountants in connection with registration statements similar to the Registration Statement.

Section 6.11  Indemnification; Insurance.

     (a)  Except as may be limited by applicable Law, from the Effective Time and for a period of six years thereafter, NUI Holding shall cause Merger Subsidiary to indemnify the directors and officers of Virginia Gas on terms no less favorable than those provided in the Amended and Restated Certificate of Incorporation and Bylaws of Virginia Gas on the date of this Agreement with respect to matters occurring prior to the Effective Time.

     (b)  NUI Holding shall cause to be maintained in effect for six years from the Effective Time the current policies for directors' and officers' liability insurance maintained by Virginia Gas (provided that NUI Holding may substitute therefor policies of at least the same coverage containing terms and conditions that are not materially less advantageous) with respect to matters occurring prior to the Effective Time, to the extent such insurance is available to NUI Holding in the market.

Section 6.12  PUHCA and the Natural Gas Act.

     (a)  None of the parties hereto shall, nor shall any party permit any of its Subsidiaries to, without the other party's consent, which consent shall not be unreasonably withheld, conditioned or delayed, engage in any activities that would (i) cause a change in its status or that of its Subsidiaries under PUHCA, including, without limitation, the registration by either party under PUHCA or (ii) result in jurisdiction by FERC over the Merger.

     (b)  None of the parties hereto shall, nor shall any party permit any of its Subsidiaries to, without the other party's consent, which consent shall not be unreasonably withheld, conditioned or delayed, fail to take such actions that are necessary to (i) preserve existing exemptions from registration under PUHCA or (ii) allow the Merger to proceed without a requirement for approval by FERC.

ARTICLE VII

CONDITIONS PRECEDENT TO CONSUMMATION OF THE MERGER

Section 7.1  Conditions Precedent to Each Party's Obligation to Effect the Merger. The respective obligation of each party to consummate the Merger is subject to the satisfaction at or prior to the Effective Time of the following conditions precedent:

     (a)  the transactions contemplated in this Agreement shall have been adopted by the affirmative vote of the stockholders of Virginia Gas by the requisite vote in accordance with the DGCL (it being understood that such adoption occurred at the Stockholder Meeting);

     (b)  no order, decree or injunction shall have been enacted, entered, promulgated or enforced by any United States court of competent jurisdiction or any Governmental Authority which prohibits the consummation of the Merger; provided, however, that the parties hereto shall use their best efforts to have any such order, decree or injunction vacated or reversed;

     (c)  the Registration Statement shall remain effective in accordance with the provisions of the Securities Act, and no stop order suspending such effectiveness shall have been issued and remain in effect;

     (d)  (i) the waiting period applicable to the Merger under the HSR Act shall have terminated or expired (it being understood that early termination of such waiting period was granted by the Federal Trade Commission in September 27, 2000), (ii) all applicable requirements of the Exchange Act shall have been satisfied, (iii) all NUI Holding Required Consents and Virginia Gas Required Consents shall have been made or obtained (as the case may be) and become final and (iv) any applicable filings under state securities, "Blue Sky" or takeover laws shall have been made;

     (e)  the receipt by the parties hereto, based on customary assumptions and on representations set forth in certificates of officers of NUI Holding and Virginia Gas, of the opinion of Hunton & Williams addressed to the board of directors of NUI Holding and the board of directors of Virginia Gas (dated the date of the Effective Time) to the effect that, for United States federal income tax purposes, (i) the Merger will constitute a "reorganization" under Section 368(a) of the Code, (ii) no gain or loss will be recognized by NUI Holding, Merger Subsidiary or Virginia Gas upon consummation of the Merger, (iii) no gain or loss will be recognized by stockholders of Virginia Gas (other than stockholders who are nonresident aliens or foreign persons or otherwise subject to special treatment under federal income tax law) upon the exchange of shares of Virginia Gas Common Stock solely for shares of NUI Holding Common Stock (including any fractional share interes t) in the Merger, (iv) the aggregate basis of shares of NUI Holding Common Stock (including any fractional share interest) received by a Virginia Gas stockholder in the Merger will be the same as the aggregate basis of the shares of Virginia Gas Common Stock exchanged therefor, (v) the holding period for shares of NUI Holding Common Stock (including any fractional share interest) received by a Virginia Gas stockholder in the Merger will include the holding period for the shares of Virginia Gas Common Stock exchanged therefor, if such shares of Virginia Gas Common Stock are held as a capital asset at the Effective Time and (vi) cash received in lieu of a fractional share of NUI Holding Common Stock will be treated as having been received as full payment in exchange for such fractional share; and

     (f)  the shares of NUI Holding Common Stock required to be issued hereunder shall have been listed for trading on the NYSE subject to official notice of issuance.

Section 7.2  Conditions Precedent to Obligations of Virginia Gas. The obligations of Virginia Gas to consummate the Merger are subject to the satisfaction or waiver at or prior to the Effective Time of the following conditions precedent:

     (a)  except as set forth on Exhibit 4.6 attached hereto, there shall have occurred no material adverse change in the business, financial condition or results of operations of the NUI Holding Companies, taken as a whole, from June 13, 2000, to the Effective Time;

     (b)  the representations and warranties of NUI Holding contained in Article IV shall be true and correct in all respects (as to representations and warranties qualified or limited by the term "Material Adverse Effect," the word "material," or phrases of like import), and in all material respects (as to representations and warranties not so qualified or limited) when made and at and as of the Effective Time with the same force and effect as if those representations and warranties had been made at and as of such time except (i) to the extent such representations and warranties speak as of a specified earlier date, and (ii) as otherwise contemplated or permitted by this Agreement;

     (c)  NUI Holding shall, in all material respects, have performed all obligations and complied with all covenants necessary to be performed or complied with by it under this Agreement on or before the Effective Time;

     (d)  Virginia Gas shall have received a certificate of the President and Chief Executive Officer or Senior Vice President and Chief Operating Officer of NUI Holding, in form satisfactory to counsel for Virginia Gas, certifying fulfillment of the matters referred to in paragraphs 0 through 0 of this Section 7.2;

     (e)  the opinion of CIBC included as "Annex C" to the Joint Proxy/Prospectus shall remain in full force and effect and shall not have been amended, modified, repudiated or rejected;

     (f)  all proceedings, corporate or other, to be taken by NUI Holding in connection with the transactions contemplated by this Agreement, and all documents incident thereto, shall be reasonably satisfactory in form and substance to Virginia Gas and counsel for Virginia Gas, and NUI Holding shall have made available to Virginia Gas for examination the originals or true and correct copies of all documents that Virginia Gas may reasonably request in connection with the transactions contemplated by this Agreement; and

     (g)  Virginia Gas shall have received the accountants' letter contemplated by Section 6.10 hereof to be received by it.

Section 7.3  Conditions Precedent to Obligations of NUI Holding. The obligations of NUI Holding to consummate the Merger are subject to the satisfaction or waiver at or prior to the Effective Time of the following conditions precedent:

     (a)  except as set forth on Exhibit 5.6 attached hereto, there shall have occurred no material adverse change in the business, financial condition or results of operations of the Virginia Gas Companies, taken as a whole, from June 13, 2000, to the Effective Time;

     (b)  the representations and warranties of Virginia Gas contained in Article V shall be true and correct in all respects (as to representations and warranties qualified or limited by the term "Material Adverse Effect," the word "material," or phrases of like import), and in all material respects (as to representations and warranties not so qualified or limited) when made and at and as of the Effective Time with the same force and effect as if those representations and warranties had been made at and as of such time except (i) to the extent such representations and warranties speak as of a specified earlier date, and (ii) as otherwise contemplated or permitted by this Agreement;

     (c)  Virginia Gas shall, in all material respects, have performed all obligations and complied with all covenants necessary to be performed or complied with by it under this Agreement on or before the Effective Time;

     (d)  NUI Holding shall have received a certificate of the President and Chief Executive Officer or Vice President and Chief Financial Officer of Virginia Gas, in form satisfactory to counsel for NUI Holding, certifying fulfillment of the matters referred to in paragraphs 0 through 0 of this Section 7.3;

     (e)  The Edwards Agreement shall be in full force and effect in accordance with its terms and shall not have been amended, modified, repudiated or rejected;

     (f)  all proceedings, corporate or other, to be taken by Virginia Gas in connection with the transactions contemplated by this Agreement, and all documents incident thereto, shall be reasonably satisfactory in form and substance to NUI Holding and NUI Holding's counsel, and Virginia Gas shall have made available to NUI Holding for examination the originals or true and correct copies of all documents that NUI Holding may reasonably request in connection with the transactions contemplated by this Agreement;

     (g)  NUI Holding shall have received from each person specified in Section 6.8 hereof the written agreement referred to in such Section 6.8;

     (h)  NUI Holding shall have received the accountants' letter contemplated by Section 6.9 hereof to be received by it;

     (i)  No event shall have occurred that would, with or without the passage of time or compliance with any applicable notice requirements or both constitute a default under or give rise to a right of termination with respect to (i) the Firm Pipeline Service Agreement, dated as of February 5, 1999, by and between Virginia Gas Pipeline Company and Roanoke Gas Company and (ii) the Firm Pipeline Service Agreement, dated as of April 17, 1997, by and between Virginia Gas Pipeline Company and United Cities Gas Company (collectively, the "Pipeline Company Contracts"), and the Pipeline Company Contracts shall be in full force and effect in accordance with their terms; and

     (j)  No Virginia Gas Affiliate or Virginia Gas Partnership shall have taken any of the actions described in Section 6.1 hereof which actions, considered in the aggregate, could reasonably be expected to have a Material Adverse Effect on the Virginia Gas Companies.

ARTICLE VIII

TERMINATION; AMENDMENT; WAIVER

Section 8.1  Termination. This Agreement may be terminated and the Merger contemplated hereby may be abandoned at any time notwithstanding adoption thereof by the stockholders of Virginia Gas, but prior to the Effective Time:

     (a)  by mutual written consent of Virginia Gas and NUI Holding;

     (b)  by Virginia Gas or NUI Holding, if the Effective Time shall not have occurred on or before June 13, 2001 (provided that the right to terminate this Agreement under this Section 8.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of or has resulted in the failure of the Effective Time to occur on or before such date);

     (c)  by Virginia Gas if there has been a material breach by NUI Holding of any representation, warranty, covenant or agreement set forth in this Agreement, which breach has not been cured within ten business days following receipt by NUI Holding of notice of such breach;

     (d)  by NUI Holding if (i) there has been a material breach by Virginia Gas of any representation, warranty, covenant or agreement set forth in this Agreement, which breach has not been cured within ten business days following receipt by Virginia Gas of notice of such breach, (ii) the Board of Directors of Virginia Gas withdraw, amend or modify in any manner adverse to NUI Holding their recommendation of the transactions contemplated by this Agreement, (iii) Virginia Gas elects not to provide to NUI Holding and its agents access to conduct a Phase II environmental site assessment at a location other than those set forth in Exhibit 6.4 attached hereto following a request by NUI Holding for such access pursuant to Section 6.4 hereof, or (iv) the Average NUI Holding Price is less than $19.00 and NUI Holding provides written notice of termination to Virginia Gas prior to the close of business on the second trading day following the Determination Date;

     (e)  by Virginia Gas, if (1) it, based on the advice of outside legal counsel to Virginia Gas that such action is necessary in order for the Board of Directors of Virginia Gas to comply with its fiduciary duties under applicable Law, subject to complying with the terms of this Agreement, enters into a binding written agreement concerning a transaction that constitutes a Superior Proposal and Virginia Gas notifies NUI Holding in writing that it intends to enter into such an agreement, attaching the most current version of such agreement to such notice, (2) NUI Holding does not make, within two business days of receipt of Virginia Gas' written notification of its intention to enter into a binding agreement for a Superior Proposal, an offer to enter into an amendment to this Agreement such that the Board of Directors of Virginia Gas determines, in good faith after consultation with its financial advisors, that this Agreement as so amended is at least as favorable, from a financial point of view, to the stockholders of Virginia Gas as the Superior Proposal and (3) Virginia Gas prior to such termination pays to NUI Holding in immediately available funds any fees required to be paid pursuant to Section 8.3 hereof. Virginia Gas agrees (A) that it will not enter into a binding agreement referred to in clause (1) above until at least the third business day after it has provided the notice to NUI Holding required thereby and (B) to notify NUI Holding promptly if its intention to enter into a written agreement referred to in its notification shall change at any time after giving such notification; or

     (f)  by Virginia Gas or NUI Holding, if any court of competent jurisdiction in the United States or other United States Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the Merger and such order, decree, ruling or other action shall have become final and nonappealable.

Section 8.2  Effect of Termination. If this Agreement is terminated under Section 0 hereof and the Merger is not consummated, this Agreement shall forthwith become void and have no effect, without any liability on the part of either party or its directors, officers or stockholders, other than the provisions of Section 6.4(b), this Section 8.2, Section 8.3 and Section 9.8.

Section 8.3  Termination Fee.

     (a)  If this Agreement is terminated (i) by NUI Holding pursuant to Section 8.1(b) hereof, and the failure of the Effective Time to occur has been caused by or is attributable to any failure by Virginia Gas to fulfill any of its obligations under this Agreement, (ii) by NUI Holding pursuant to Section 8.1(d) (i)or (ii) hereof or (iii) by Virginia Gas pursuant to Section 8.1(c) hereof, and, in the case of any of the foregoing, if Virginia Gas is not entitled to terminate this Agreement by reason of Section 8.1(c) hereof, then Virginia Gas shall promptly (and in any event within five days of receipt by Virginia Gas of written notice from NUI Holding) pay to NUI Holding (by wire transfer of immediately available funds to an account designated by NUI Holding) an amount equal to all documented out of pocket expenses and fees incurred by NUI Holding in connection with the transactions contemplated by this Agreement (such expenses to be r eferred to herein as the "Out of Pocket Expenses," and to include fees and expenses payable to all legal, financial, accounting, public relations and other professional advisors) and a termination fee in an amount equal to (i) $2.5 million, plus (ii) an amount equal to the product of the amount of additional outstanding debt incurred by the Virginia Gas Companies from and after June 13, 2000, times .04. If this Agreement is terminated by NUI Holding pursuant to Section 8.1(d)(iii) hereof, and if Virginia Gas is not entitled to terminate this Agreement by reason of Section 8.1(c) hereof, then Virginia Gas shall promptly (and in any event within five days of receipt by Virginia Gas of written notice from NUI Holding) pay to NUI Holding (by wire transfer of immediately available funds to an account designated by NUI Holding) an amount equal to NUI Holding's Out-of-Pocket Expenses.

     (b)  If this Agreement is terminated by Virginia Gas (i) pursuant to Section 8.1(b) hereof, and the failure of the Effective Time to occur has been caused by or is attributable to any failure by NUI Holding to fulfill any of its obligations under this Agreement or (ii) pursuant to Section 8.1(c) hereof and, in the case of either of the foregoing, if NUI Holding is not otherwise entitled to terminate this Agreement, then NUI Holding shall promptly (and in any event within five days of receipt by NUI Holding of written notice from Virginia Gas) pay to Virginia Gas (by wire transfer of immediately available funds to an account designated by Virginia Gas) an amount equal to the Out-of-Pocket Expenses of Virginia Gas and a termination fee in an amount equal to $2.5 million.

     (c)  The termination fees contemplated in this Section 8.3 shall constitute liquidated damages for any termination of this Agreement in the circumstances set forth herein, as the actual damages of the parties in such circumstances would be difficult or impossible to prove. Such termination fees, together with the expense reimbursement provisions of this Section 8.3, shall be the sole remedies of the parties hereto in the event this Agreement is terminated pursuant to Section 8.1 hereof.

Section 8.4  Amendment. This Agreement may be amended by action taken by NUI Holding, Merger Subsidiary and Virginia Gas at any time but, because the Original Merger Agreement has been adopted by the stockholders of Virginia Gas, no amendment shall be made that would have any of the effects specified in DGCL Section 251(d) without the approval of the stockholders affected thereby. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

Section 8.5  Extension; Waiver. At any time prior to the Effective Time, any party hereto may (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document, certificate or writing delivered pursuant hereto by the other parties hereto or (c) waive compliance with any of the agreements or conditions contained herein by the other parties hereto. Any agreement on the part of any party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

ARTICLE IX

MISCELLANEOUS

Section 9.1  Entire Agreement; Assignment. This Agreement (a) constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes, except as set forth in Section 6.4(b) hereof, all other prior agreements and understandings, both written and oral (including, without limitation, the Original Merger Agreement), between the parties or any of them with respect to the subject matter hereof and (b) shall not be assigned by operation of law or otherwise.

Section 9.2  Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by cable, telecopy, telegram or telex, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties as follows:

if to NUI Holding or Merger Subsidiary:
		NUI Corporation
		550 Route 202-206
		P.O. Box 760
		Bedminster, New Jersey 07921-0760
		Attention: James R. Van Horn, Esq.
		Facsimile: (908) 781-0718
with a copy to:
		Hunton & Williams
		Riverfront Plaza, East Tower
		951 East Byrd Street
		Richmond, Virginia 23219-4074
		Attention: Gary E. Thompson, Esq.
		Facsimile: (804) 788-8218
if to Virginia Gas:
	Virginia Gas Company
	200 East Main Street
	Abingdon, Virginia 24210
	Attention: Mr. Michael L. Edwards
	Facsimile: (540) 619-5254
with a copy to:
	Penn, Stuart & Eskridge
	P. O. Box 2288
	208 East Main Street
	Abingdon, Virginia 24210
	Attention: Elizabeth A. McClanahan, Esq.
	Facsimile: (540) 628-4918

or to such other address as the person to whom notice is given may have previously furnished to the others in writing in the manner set forth above.

Section 9.3  Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. The parties hereto specifically authorize any action, suit or proceeding to be instituted and prosecuted in any state or federal court located in Delaware. The parties hereto, whether or not Delaware residents, hereby waive any plea or claim of lack of personal jurisdiction or improper venue in any such action brought to enforce this Agreement.

Section 9.4  Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

Section 9.5  Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and, except for the rights of persons entitled to the indemnification and insurance benefits pursuant to Section 6.11 hereof, nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

Section 9.6  Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

Section 9.7  Specific Performance. The parties hereto agree that irreparable damage would occur in the event any of the provisions of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof.

Section 9.8  Fees and Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses, whether or not the Merger is consummated, except that the expenses incurred in connection with printing and mailing the Joint Proxy Statement/Prospectus and printing the Registration Statement, and the filing fees related to the Registration Statement and the HSR filing, shall be shared equally by NUI Holding and Virginia Gas.

Section 9.9  Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to either party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner, to the end that the transactions contemplated hereby are fulfilled to the extent possible.

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed on its behalf by its officer thereunto duly authorized, all as of the day and year first above written.

NUI CORPORATION

By:   /s/ A. Mark Abramovic  

Name: A. Mark Abramovic

Its:   Senior Vice President, Chief Operating

Officer and Chief Financial Officer

VGC ACQUISITION, INC.

By:   /s/ A. Mark Abramovic  

Name: A. Mark Abramovic

Its:   Vice President and Chief Financial Officer

VIRGINIA GAS COMPANY

By:   /s/ Michael L. Edwards  

Name: Michael L. Edwards

Its:   President and Chief Executive Officer

Acknowledgment:

NUI Utilities, Inc. (formerly NUI Corporation),

a New Jersey corporation, as a party to the

Original Merger Agreement, acknowledges

and agrees to the amendment and restatement

thereof by this Agreement.

NUI UTILITIES, INC.

By:  /s/ A. Mark Abramovic

Name:  A. Mark Abramovic

Its:  Treasurer

EX-12

EXHIBIT NO. 12

NUI CORPORATION AND SUBSIDIARIES
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in thousands)

	Year Ended September 30
	2001	2000	1999	1998	1997
Income from continuing operations   before  income taxes	$38,713	$44,893	$41,718	$21,024	$30,172
Add (deduct):
Adjustment related to equity        investments	5,295	(2,187)	(631)	(402)	(2,317)
Add:
Interest element of rentals
charged to income (a)	2,890	2,288	3,144	3,239	3,299
Interest expense	25,067	21,708	21,836	20,496	21,374
	______	______	______	______	______
Earnings as defined	$71,965	$66,702	$66,067	$44,357	$52,528
	=====	=====	=====	=====	=====
Interest expense	$25,067	$21,708	$21,836	$20,496	$21,374
Capitalized interest	1,548	754	83	272	186
Interest element of rentals charged
to income (a)	2,890	2,288	3,144	3,239	3,299
	______	______	______	______	______
Fixed charges as defined	$29,505	$24,750	$25,063	$24,007	$24,859
	======	======	======	======	======
Consolidated ratio of earnings to fixed charges	2.44	2.70	2.64	1.85	2.11
	___	___	___	___	___

(a)   Includes the interest element of rentals where determinable plus 1/3 of rental expense where no readily defined interest element can be determined.