Form of Director Retirement Benefits Agreement

DIRECTOR RETIREMENT BENEFITS AGREEMENT


This DIRECTOR RETIREMENT BENEFITS AGREEMENT, made and effective this the 1st day of September, 1999, by and between Piedmont Natural Gas Company, Inc. (the "Company"), and ____________ (the "Director").


W I T N E S S E T H:


WHEREAS, the Board of Directors of the Company (the "Board") by resolutions adopted at a meeting of the Board on April 26, 1994 (a) approved a directors' retirement benefit plan (the "Plan") providing for the payment of retirement benefits to non-employee directors under certain conditions and (b) authorized the Company to enter into a contract with each non-employee director of the Company for the payment of benefits in accordance with the provisions of the Plan; and


WHEREAS, the Board by resolutions adopted at a meeting of the Board on February 26, 1999 (a) authorized an amendment to the Plan and (b) directed the Chairman of the Board to execute on behalf of the Company an amendment to the then existing retirement agreements between the Company and each director; and


WHEREAS, the Board by resolutions adopted at a meeting of the Board on August 27, 1999 (a) authorized a further amendment to the Plan and (b) directed the appropriate officers of the Company to execute on behalf of the Company amended retirement agreements between the Company and each director.


NOW, THEREFORE, in consideration of the services to be rendered by the Director to the Company, the Company and the Director agree as follows:


1. If at the time of his or her retirement from the Board, the Director shall be not less than 72 years of age or shall have served not less than ten continuous years on the Board, the


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Director shall receive from the Company an annual retirement benefit equal to the directors' annual retainer fee (presently $24,000) at the time of his or her retirement, which annual retirement benefits shall (a) commence upon retirement from the Board, (b) continue for life, and (c) be payable in twelve (12) equal monthly payments.


2. Should the Director die after retirement before receiving the retirement benefit described in paragraph one above for at least ten years (120 monthly payments), the retirement benefits shall be paid to the Director's designated beneficiary(s) for the remaining portion of the ten year period. The Director shall determine in the Addendum attached hereto and incorporated in all respects, that any payment due pursuant to this Agreement shall be paid to the designated beneficiary(s) either (1) as a lump-sum payment within ninety days of the Director's death, or (2) in periodic monthly payments for the remainder of the ten-year period following the Director's retirement date from the Board. If no Addendum shall be attached hereto, the Director shall be deemed to have elected a lump sum payment payable to his or her estate.


3. Should the Director die while serving on the Board, the Director's previously designated beneficiary(s) shall be paid ten times the annual director retainer fees that are in effect at the date of the Director's death. Such payment shall be made within ninety days of the death of such Director.


4. In the event of a "Change in Control" (as hereinafter defined) or a "Potential Change in Control" (as hereinafter defined) during the time when the Director is serving on the Board, Director shall have the option, at his or her sole discretion, (i) to receive a lump sum cash payment equal to his or her "Fixed Retirement Benefits" (as hereinafter defined) or (ii) to receive the benefits to which he or she would otherwise be entitled under Paragraphs 1 and 2 of this Agreement had the Director retired on the date immediately preceding the Change in Control or Potential Change in Control and served not less than 10 continuous years on the Board. For the purposes of option (ii) above, it shall be assumed that the Director has served not less than 10


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continuous years without regard to the actual time of service. For purposes of this Paragraph, the following terms shall have the meanings indicated below:


(A) "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.


(B) "Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.


(C) "Board" shall mean the Board of Directors of the Company.


(D) A "Change in Control" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have
occurred:


(i) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person
any securities acquired directly from the Company or its
affiliates) representing 20% or more of the combined voting
power of the Company's then outstanding securities, excluding
any Person who becomes such a Beneficial Owner in connection
with a transaction described in clause (a) of paragraph (iii)
below; or


(ii) the following individuals cease for any reason
to constitute a majority of the number of directors then
serving: individuals who, on the date hereof, constitute the
Board and any new director (other than a director whose
initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board or
nomination for election by the Company's shareholders was
approved or recommended by a vote of at least two-thirds (2/3)
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