SEVERANCE AGREEMENT/FRANKLIN H. YOHO

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EXHIBIT 10.28

SEVERANCE AGREEMENT

THIS AGREEMENT, dated March 18, 2002, is made by and between PIEDMONT

NATURAL GAS COMPANY, INC., a North Carolina corporation (the "Company"), and

FRANKLIN H. YOHO (the "Executive").

WHEREAS, the Company considers it essential to the best interests of

its shareholders to foster the continued employment of key management

personnel; and

WHEREAS, the Board of the Company recognizes that, as is the case with

many publicly held corporations, the possibility of a Change in Control exists

and that such possibility, and the uncertainty and questions which it may raise

among management, may result in the departure or distraction of management

personnel to the detriment of the Company and its shareholders; and

WHEREAS, the Board has determined that appropriate steps should be

taken to reinforce and encourage the continued attention and dedication of

members of the Company's management, including the Executive, to their assigned

duties without distraction in the face of potentially disturbing circumstances

arising from the possibility of a Change in Control; and

WHEREAS, contemporaneous with this Agreement, the Company and the

Executive have entered into an Employment Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual

covenants herein contained, the Company and the Executive hereby agree as

follows:

1. Defined Terms. The definitions of capitalized terms used in

this Agreement are provided in the last Section hereof.

2. Term of Agreement. The Term of this Agreement shall commence

on the date hereof and shall continue in effect through March 31, 2003;

provided, however, that commencing on April 1, 2003 and each April 1

thereafter, the Term shall automatically be extended for one additional year

unless, not later than fifteen (15) months prior to the applicable April 1, the

Company or the Executive shall have given notice not to extend the Term; and

further provided, however, that if a Change in Control shall have occurred

during the Term, the Term shall expire at the end of the thirty-sixth (36th)

calendar month after the calendar month in which such Change in Control

occurred. For example, if a Change in Control were to occur on July 1, 2002,

the Term of this Agreement would expire on June 30, 2005, and if a Change in

Control were to occur on July 1, 2005, the Term of this Agreement would expire

on June 30, 2008 (regardless of whether on or before September 30, 2004 either

party had given notice to the other party not to extend the Term as provided

above).

3. Company's Covenants Summarized. In order to induce the

Executive to remain in

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the employ of the Company and in consideration of the Executive's covenants set

forth in Section 4 hereof, the Company agrees, under the conditions described

herein, to pay the Executive the Severance Payments and the other payments and

benefits described herein. Except as provided in Section 9.1 hereof, no

Severance Payments shall be payable under this Agreement unless there shall

have been (or, under the terms of the second sentence of Section 6.1 hereof,

there shall be deemed to have been) a termination of the Executive's employment

with the Company following a Change in Control and during the Term. This

Agreement shall not be construed as creating an express or implied contract of

employment and, except as otherwise agreed in writing between the Executive and

the Company, the Executive shall not have any right to be retained in the

employ of the Company.

4. The Executive's Covenants. The Executive agrees that, subject

to the terms and conditions of this Agreement, in the event of a Potential

Change in Control during the Term, the Executive will remain in the employ of

the Company until the earliest of (i) a date which is twelve (12) months from

the date of such Potential Change of Control, (ii) the date of a Change in

Control, (iii) the date of termination by the Executive of the Executive's

employment for Good Reason or by reason of death, Disability or Retirement, or

(iv) the termination by the Company of the Executive's employment for any

reason. Should the Executive fail to comply with the provisions of this

paragraph 4, the Company's sole remedy shall be to deny the payment of any

Severance Payments to the Executive.

5. Compensation Other Than Severance Payments.

5.1 Following a Change in Control and during the Term,

during any period that the Executive fails to perform the Executive's full-time

duties with the Company as a result of incapacity due to physical or mental

illness, the Company shall pay the Executive's full salary to the Executive at

the rate in effect at the commencement of any such period, together with all

compensation and benefits payable to the Executive under the terms of any

compensation, benefit or incentive plan, program or arrangement maintained by

the Company during such period, until the Executive's employment is terminated

by the Company for Disability.

5.2 If the Executive's employment shall be terminated

for any reason following a Change in Control and during the Term, the Company

shall pay the Executive's full salary to the Executive through the Date of

Termination at the rate in effect immediately prior to the Date of Termination

or, if higher, the rate in effect immediately prior to the first occurrence of

an event or circumstance constituting Good Reason, together with all

compensation and benefits payable to the Executive through the Date of

Termination under the terms of the Company's executive compensation, benefit

and incentive plans, programs or arrangements as in effect immediately prior to

the Date of Termination or, if more favorable to the Executive, as in effect

immediately prior to the first occurrence of an event or circumstance

constituting Good Reason.

5.3 If the Executive's employment shall be terminated

for any reason following a Change in Control and during the Term, the Company

shall pay to the Executive the Executive's

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normal post-termination compensation and benefits as such payments become due,

including in a lump sum in cash that portion of the Executive's vacation pay

vested and accrued but not paid. Such post-termination compensation and

benefits shall be determined under, and paid in accordance with, the Company's

long-term incentive stock plan, pension, supplemental retirement, insurance and

other executive compensation, benefit or incentive plans, programs and

arrangements as in effect immediately prior to the Date of Termination or, if

more favorable to the Executive, as in effect immediately prior to the

occurrence of the first event or circumstance constituting Good Reason.

6. Severance Payments.

6.1 Subject to Section 6.2 hereof, if the Executive's

employment is terminated following a Change in Control and during the Term,

other than (A) by the Company for Cause, (B) by reason of death or Disability,

or (C) by the Executive without Good Reason (including Retirement by the

Executive), then the Company shall pay the Executive the amounts, and provide

the Executive the benefits, described in this Section 6.1 ("Severance

Payments"), in addition to any payments and benefits to which the Executive is

entitled under Section 5 hereof. For purposes of this Agreement, the

Executive's employment shall be deemed to have been terminated following a

Change in Control by the Company without Cause or by the Executive with Good

Reason, if (i) the Executive's employment is terminated by the Company without

Cause prior to a Change in Control (whether or not a Change in Control ever

occurs) and such termination was at the request or direction of a Person who

has entered into an agreement with the Company the consummation of which would

constitute a Change in Control, (ii) the Executive terminates his employment

for Good Reason prior to a Change in Control (whether or not a Change in

Control ever occurs) and the circumstance or event which constitutes Good

Reason occurs at the request or direction of such Person, or (iii) the

Executive's employment is terminated by the Company without Cause or by the

Executive for Good Reason and such termination or the circumstance or event

which constitutes Good Reason is otherwise in connection with or in

anticipation of a Change in Control (whether or not a Change in Control ever

occurs). For purposes of any determination regarding the applicability of the

immediately preceding sentence, any position taken by the Executive shall be

presumed to be correct unless the Company establishes by clear and convincing

evidence that such position is not correct.

(A) In lieu of any further salary payments to

the Executive for periods subsequent to the Date of Termination and in lieu of

any severance benefit otherwise payable to the Executive, the Company shall pay

to the Executive a lump sum severance payment, in cash, equal to 3.00 times the

sum of (i) the Executive's annual base salary as in effect immediately prior to

the Date of Termination or, if higher, in effect immediately prior to the first

occurrence of an event or circumstance constituting Good Reason and (ii) an

amount equal to the average of the Executive's annual W-2 Compensation for the

three years ending on the last day of the month prior to the Date of

Termination.

(B) For the 36-month period immediately

following the Date of Termination, the Company shall arrange to provide the

Executive and his dependents life, disability, accident and health insurance

benefits substantially similar to those provided to the Executive and

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his dependents immediately prior to the Date of Termination or, if more

favorable to the Executive, those provided to the Executive and his dependents

immediately prior to the first occurrence of an event or circumstance

constituting Good Reason, at no greater cost to the Executive than the cost to

the Executive immediately prior to such date or occurrence; provided, however,

that, unless the Executive consents to a different method (after taking into

account the effect of such method on the calculation of "parachute payments"

pursuant to Section 6.2 hereof), such health insurance benefits shall be

provided through a third-party insurer. Benefits otherwise receivable by the

Executive pursuant to this Section 6.1(B) shall be reduced to the extent

benefits of the same type are received by or made available to the Executive

during the 36-month period following the Executive's termination of employment

(and any such benefits received by or made available to the Executive shall be

reported to the Company by the Executive); provided, however, that the Company

shall reimburse the Executive for the excess, if any, of the cost of such

benefits to the Executive over such cost immediately prior to the Date of

Termination or, if more favorable to the Executive, the first occurrence of an

event or circumstance constituting Good Reason. If the Severance Payments shall

be decreased pursuant to Section 6.2 hereof, and the Section 6.1(B) benefits

which remain payable after the application of Section 6.2 hereof are thereafter

reduced pursuant to the immediately preceding sentence, the Company shall, no

later than five (5) business days following such reduction, pay to the

Executive the least of (a) the amount of the decrease made in the Severance

Payments pursuant to Section 6.2 hereof, (b) the amount of the subsequent

reduction in these Section 6.1(B) benefits, or (c) the maximum amount which can

be paid to the Executive without being, or causing any other payment to be,

nondeductible by reason of section 280G of the Code.

6.2 (A) Notwithstanding any other provisions of this

Agreement, in the event that any payment or benefit received or to be received

by the Executive in connection with a Change in Control or the termination of

the Executive's employment (whether pursuant to the terms of this Agreement or

any other plan, arrangement or agreement with the Company, any Person whose

actions result in a Change in Control or any Person affiliated with the Company

or such Person) (all such payments and benefits, including the Severance

Payments, being hereinafter called "Total Payments") would not be deductible

(in whole or part), by the Company, an affiliate or Person making such payment

or providing such benefit as a result of section 280G of the Code, then, to the

extent necessary to make such portion of the Total Payments deductible (and

after taking into account any reduction in the Total Payments provided by

reason of section 280G of the Code in such other plan, arrangement or

agreement), the cash Severance Payments shall first be reduced (if necessary,

to zero), and all other Severance Payments shall thereafter be reduced (if

necessary, to zero); provided, however, that the Executive may elect to have

the noncash Severance Payments reduced (or eliminated) prior to any reduction

of the cash Severance Payments.

(B) For purposes of this limitation, (i) no

portion of the Total Payments the receipt or enjoyment of which the Executive

shall have waived at such time and in such manner as not to constitute a

"payment" within the meaning of section 280G(b) of the Code shall be taken into

account, (ii) no portion of the Total Payments shall be taken into account

which, in the opinion of tax counsel ("Tax Counsel") reasonably acceptable to

the Executive and selected by the accounting firm which was, immediately prior

to the Change in Control, the Company's independent auditor (the

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"Auditor"), does not constitute a "parachute payment" within the meaning of

section 280G(b)(2) of the Code, including by reason of section 280G(b)(4)(A) of

the Code, (iii) the Severance Payments shall be reduced only to the extent

necessary so that the Total Payments (other than those referred to in clauses

(i) or (ii)) in their entirety constitute reasonable compensation for services

actually rendered within the meaning of section 280G(b)(4)(B) of the Code or

are otherwise not subject to disallowance as deductions by reason of section

280G of the Code, in the opinion of Tax Counsel, and (iv) the value of any

noncash benefit or any deferred payment or benefit included in the Total

Payments shall be determined by the Auditor in accordance with the principles

of sections 280G(d)(3) and (4) of the Code.

(C) If it is established pursuant to a final

determination of a court or an Internal Revenue Service proceeding that,

notwithstanding the good faith of the Executive and the Company in applying the

terms of this Section 6.2, the Total Payments paid to or for the Executive's

benefit are in an amount that would result in any portion of such Total

Payments being subject to the Excise Tax, then, if such repayment would result

in (i) no portion of the remaining Total Payments being subject to the Excise

Tax and (ii) a dollar-for-dollar reduction in the Executive's taxable income

and wages for purposes of federal, state and local income and employment taxes,

the Executive shall have an obligation to pay the Company upon demand an amount

equal to the sum of (i) the excess of the Total Payments paid to or for the

Executive's benefit over the Total Payments that could have been paid to or for

the Executive's benefit without any portion of such Total Payments being

subject to the Excise Tax; and (ii) interest on the amount set forth in clause

(i) of this sentence at the rate provided in section 1274(b)(2)(B) of the Code

from the date of the Executive's receipt of such excess until the date of such

payment.

6.3 The payments provided in subsection (A) of Section

6.1 hereof shall be made not later than the fifth day following the Date of

Termination; provided, however, that if the amounts of such payments, and the

limitation on such payments set forth in Section 6.2 hereof, cannot be finally

determined on or before such day, the Company shall pay to the Executive on

such day an estimate, as determined in good faith by the Company of the minimum

amount of such payments to which the Executive is clearly entitled and shall

pay the remainder of such payments (together with interest on the unpaid

remainder (or on all such payments to the extent the Company fails to make such

payments when due) at 120% of the rate provided in section 1274(b)(2)(B) of the

Code) as soon as the amount thereof can be determined but in no event later

than the thirtieth (30th) day after the Date of Termination. In the event that

the amount of the estimated payments exceeds the amount subsequently determined

to have been due, such excess shall constitute a loan by the Company to the

Executive, payable on the fifth (5th) business day after demand by the Company

(together with interest at 120% of the rate provided in section 1274(b)(2)(B)

of the Code). At the time that payments are made under this Agreement, the

Company shall provide the Executive with a written statement setting forth the

manner in which such payments were calculated and the basis for such

calculations including, without limitation, any opinions or other advice the

Company has received from Tax Counsel, the Auditor or other advisors or

consultants (and any such opinions or advice which are in writing shall be

attached to the statement).

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7. Termination Procedures and Compensation During Dispute.

7.1 Notice of Termination. After a Change in Control and

during the Term, any purported termination of the Executive's employment (other

than by reason of death) shall be communicated by written Notice of Termination

from one party hereto to the other party hereto in accordance with Section 10

hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a

notice which shall indicate the specific termination provision in this

Agreement relied upon and shall set forth in reasonable detail the facts and

circumstances claimed to provide a basis for termination of the Executive's

employment under the provision so indicated. Further, a Notice of Termination