Nicor Inc.
                                                                 Form 10-K
                                                                 Exhibit 10.22



                                     2000
                     NICOR GAS INCENTIVE COMPENSATION PLAN


A.  The  2000  Nicor  Gas  Incentive  Compensation  Plan  is  designed  to  link
    participant  incentive  compensation  to  the  accomplishment  of  important
    objectives-both financial goals and defined strategic plans. It ties the pay
    an individual receives to his performance and that of the company. This plan
    is intended to provide a flexible  framework for a performance bonus program
    for Nicor Gas.

B.  Purpose

    The  purpose  of this Plan is to  provide  an annual  incentive  plan  which
    supports the longer-term strategic planning process. This is done by linking
    pay to the  performance  of tasks which  focus on  objectives  of  strategic
    importance.  The Plan also encourages teamwork among officer areas and among
    line and staff groups.

C.  Eligible Group

    Officers  of Nicor Gas in Salary  Grades  EX-1 or higher  are  eligible  for
    participation.  Participation  should  be  limited  to  those  employees  in
    positions  which  enable  them  to  make  significant  contributions  to the
    performance and growth of the company.

D.  Components of Plan

    Compensation Objective
    Bonus Targets
    Performance Targets
    Goal Setting Guidelines
    Program Schedule
    Form of Payment

    Compensation Objective

    Base Salary + Bonus Target = Short-Term Compensation Objective


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    An individual's  short-term  compensation  objective will be based on salary
    plus a bonus,  expected to be earned if agreed-upon  performance targets are
    met.  Under  certain  conditions,  short-term  compensation  above  or below
    targets may be paid.

    Standards  for base  salaries  will be managed at the  appropriate  industry
    quartile which will be determined by survey data.  Bonus targets will be set
    based on the individual's grade level and compensation objective,  such that
    total compensation  objectives are managed at the level as determined by the
    Compensation Committee to remain competitive with industry.

    Bonus Target

    The bonus target amount varies according to pay, salary grade and ability to
    impact the  organization.  Higher  responsibility  and pay grade  results in
    greater dollars at risk.

    Performance Targets

    Performance  criteria focus on the achievement of agreed-upon and documented
    strategic  goals.  Performance  targets  may include  measures of  financial
    performance,  defined group objectives or individual performance objectives.
    Each particular performance target will be assigned weighting reflected as a
    percentage of bonus target.

    Goal Setting Guidelines

    The most  important  aspect of this Plan will be in  establishing  effective
    goals. In addition to the goals which will be measured by company  financial
    performance,  realistic, operational management goals may be established. As
    well as being realistic, the goals should be measurable wherever possible by
    quantifiable performance criteria. It is recognized that measurement of some
    goals will require  subjective  assessments  of  performance.  Goals must be
    consistent with the longer-term strategic plan.

    Amount of bonus  payment for  financial/budget  related goals can vary above
    and below target based upon results achieved.  For targets met, bonus amount
    will be 100% of bonus target.  When targets are exceeded or are not reached,
    bonus will be proportionately more or less than the target.



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    Project goals which are not quantifiable  will be evaluated by the Nicor Gas
    CEO  based on  performance  and will  fall  into one of five  categories  of
    achievement:  unsatisfactory; less than expected, but acceptable given facts
    and circumstances;  expected; more than expected, but less than outstanding;
    and  outstanding  performance.  Accordingly,  performance at, below or above
    expected performance will result in awards relative to performance.

    The  Compensation   Committee  may  make  appropriate   upward  or  downward
    adjustments  if,  after  taking  into  consideration  all of the  facts  and
    circumstances of the performance  period, it determines that adjustments are
    warranted.

    Plan Schedule

    The 2000  Nicor Gas  Incentive  Compensation  Plan runs on a  calendar  year
    basis,  with the strategic  planning cycle and budgeting process the primary
    link to performance and bonus targets.  Responsibility  for determination of
    financial  results  will be with the  Accounting  Department.  A program for
    review will be established and project or company goal  performance  will be
    reviewed at least twice each performance year.

    Year-end  results  should be  available  and  evaluated  in  January  of the
    following year.  Following approval of the Compensation  Committee and Board
    at the January meeting, bonuses will be payable to participants.

    Form of Payment

    All awards  will be paid in cash,  except  that a  participant  in the Stock
    Deferral  Plan may elect to defer up to 50% of their  award  into that plan.
    Deferral elections must meet the guidelines and timing of the Stock Deferral
    Plan to be effective.  Appropriate taxes for the entire award amount will be
    withheld from the portion of the award being paid in cash.

E.  Integration with Existing Programs

    Base  salaries  will be managed  with  range  standards  at the  appropriate
    industry  quartile  for  comparable   positions,   with  total  compensation
    objectives to be managed at a level  appropriate with the performance of the
    company  within  industry,  as  determined  by the  Compensation  Committee.
    Salaries will be monitored  each year and  increases  granted based on merit
    and  range  standard.  Bonus  targets  will be set as a  percentage  of base
    salary. A change,  other than the annual salary review,  in the compensation
    objective will


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    customarily  occur during the year only through promotion to various levels,
    at which time the base salary and bonus target are also likely to change.

    Promotion of an employee during the year or reassignment to responsibilities
    in which new  performance  objectives  apply will result in proration of the
    existing  performance  objectives  and bonus  target and  assignment  of new
    performance  objectives  and  if  appropriate,  a new  bonus  target  as the
    Compensation Committee shall determine.

    Promotion into an Executive Salary Grade would create  eligibility for bonus
    at an amount  prorated on a monthly  basis  (i.e.,  eligible  for the plan 9
    months - 9/12 of an annual bonus).

    If a participant  voluntarily terminates or is terminated for cause prior to
    the end of the performance  period, then the participant will be entitled to
    no award. In the event a participant  shall die, become disabled,  or retire
    before the end of the performance  period, an award is payable prorated on a
    monthly basis or the  Compensation  Committee  may  authorize  payment of an
    award to the  participant,  or  beneficiary,  in such  other  amount  as the
    Committee deems appropriate.

F.  Responsibility

    Acceptance  and  success of this Plan will depend on  documented,  realistic
    goals that are fair, understandable and measurable.  Considerable management
    focus  and  involvement  will  be  required  for  goals  to be  established,
    communicated and monitored.

    The Human Resources Department will be responsible for the administration of
    the system for the company. This will include:

    1)  monitoring industry salary and total compensation levels,

    2)  recommending   structural   changes  in  base  salary  and  compensation
        objective adjustments, and,

    3)  assisting the Nicor Gas CEO in progress and  exception  reporting to the
        Compensation Committee.


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    The Nicor Gas CEO shall be responsible for:

    1)  reviewing industry salary and compensation levels and approving
        recommendations before presentation to the Compensation Committee,

    2)  approving structural changes in base salary and compensation
        objective adjustments before presentation to the Compensation
        Committee,

    3)  recommending   eligibility,   performance   targets  and  goals  to  the
        Compensation Committee,


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    4)  monitoring  performance  targets  through the Accounting  Department and
        other sources of necessary documentation,

    5)  communicating progress reports to the participants, and,

    6)  reporting  performance  results and making award  recommendations to the
        Compensation Committee.

    The company's 2000 Nicor Gas Incentive  Compensation Plan and changes to its
    performance  targets and measurement  criteria will be reviewed and approved
    by the Compensation Committee.

    In  establishing  the  actual  bonus  awards  to be made,  the  Compensation
    Committee  may take into  account all of the facts and  circumstances  which
    exist during the year and may make appropriate  upward or downward revisions
    in performance  criteria,  add or delete objectives,  or change the relative
    percentages assigned to the various performance objectives.

G.  Amendment and Termination

    The Board of Directors  may amend or terminate  the Plan at any time without
    the consent of the  participants.  No such  amendment or  termination  shall
    negatively  impact any  participant's  amount which  accrued  under the Plan
    prior to the calendar year in which the amendment is made.

                                                        NICOR Human Resources
                                                        February 2000