NICOR GAS SUPPLEMENTARY SAVINGS PLAN
                       (As Amended and Restated Effective
                             as of January 1, 1999)























                              Mayer, Brown & Platt
                                     Chicago


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                                TABLE OF CONTENTS


                                                                            PAGE

SECTION 1....................................................................1

General......................................................................1
      1.1.  History, Purpose and Effective Date..............................1
      1.2.  Definitions, References..........................................1
      1.3.  Plan Administration, Source of Benefit Payments..................1
      1.4.  Applicable Laws..................................................2
      1.5.  Plan Year........................................................2
      1.6.  Accounting Date..................................................2
      1.7.  Gender and Number................................................2
      1.8.  Notices..........................................................2
      1.9.  Action by Employers..............................................2
      1.10.  Limitations on Provisions.......................................2
      1.11.  Claims and Review Procedures....................................2
      1.12.  Benefits Under Plan as in Effect Prior to January 1, 1997.......2

SECTION 2....................................................................3

Participation................................................................3
      2.1.  Eligibility to Participate.......................................3
      2.2.  Beneficiary......................................................4
      2.3.  Restricted Participation.........................................4
      2.4.  Plan Not Contract of Employment..................................4

SECTION 3....................................................................4

Contributions................................................................4
      3.1.  Participant Account..............................................4
      3.2.  Supplemental Deferred Contributions..............................4
      3.3.  Supplemental Matched Contributions...............................5
      3.4.  Supplemental Profit Sharing Contributions........................5

SECTION 4....................................................................6

Plan Accounting..............................................................6
      4.1.  Allocation and Crediting of Contributions........................6
      4.2.  Statement of Accounts............................................6

SECTION 5....................................................................7

Payment of Plan Benefits.....................................................7
      5.1   Pre-Termination Distribution................................ ....7
      5.2.  Distribution on Termination......................................7
      5.3.  Distributions To Persons Under Disability........................8
      5.4.  Benefits May Not Be Assigned or Alienated........................8

SECTION 6....................................................................8

Amendment and Termination....................................................8



<PAGE>







                      NICOR GAS SUPPLEMENTARY SAVINGS PLAN
                       (As Amended and Restated Effective
                             as of January 1, 1999)

                                    SECTION 1

                                     General

      1.1.  History,  Purpose and Effective Date.  Northern Illinois Gas Company
(doing  business as Nicor Gas Company,  the  "Company")  previously  established
Nicor Gas Savings Investment Plan (previously known as NI-Gas Savings Investment
Plan,  the "Savings  Plan") to provide  retirement  and other  benefits to or on
behalf of its eligible  employees and those of its  affiliates  which,  with the
consent of the Company,  adopt the Savings  Plan.  Contrary to the desire of the
Company,  the amount of the contributions  which may be made to the Savings Plan
by or for the  benefit of an employee  under the Savings  Plan may be limited by
reason of the application of certain  provisions of the Internal Revenue Code of
1986, as amended (the "Code"). Therefore, the Company previously established the
NI-Gas Supplementary Savings Plan (the "Plan"), effective as of January 1, 1983,
to  assure  that  affected  individuals  would  receive  benefits  in an  amount
comparable to the amount that they would have received under the Savings Plan if
certain  limitations  of the Code were not  applicable to the Savings Plan . The
following  provisions  constitute  an  amendment  and  restatement  of the Plan,
effective as of January 1, 1999 (the  "Effective  Date"),  in the form of "Nicor
Gas  Supplementary  Savings Plan".  The Company and any affiliate of the Company
which adopts the Plan for the benefit of its eligible  employees are referred to
below, collectively, as the "Employers" and individually as an "Employer".

      1.2.  Definitions,   References.   Unless  the  context  clearly  requires
otherwise, any word, term or phrase used in the Plan shall have the same meaning
as is assigned to it under the terms of the Savings  Plan.  Any reference in the
Plan to a provision of the Savings Plan shall be deemed to include  reference to
any comparable provision of any amendment of that plan.

      1.3. Plan  Administration,  Source of Benefit  Payments.  The authority to
control and manage the operation and  administration of the Plan shall be vested
in the committee appointed by the Board of Directors of the Company to act under
the Savings Plan (the  "Committee").  In controlling  and managing the operation
and administration of the Plan, the Committee shall have the same rights, powers
and duties as those  delegated to it under the Savings  Plan.  The amount of any
benefit  payable  under the Plan shall be paid from the general  revenues of the
Employer  with  respect to whose former  employee  the benefit is payable.  If a
Participant  (as defined in  subsection  2.1) has been employed by more than one
Employer, the portion of his Plan benefit payable by each such Employer shall be
equal to that portion of his Account (as defined in subsection 3.1) attributable
to the reduction of his  compensation  from that Employer which is made pursuant
to his  Participation  Election (as defined in subsection 3.2) or otherwise made
by that Employer.  An Employer's  obligation  under the Plan shall be reduced to
the extent that any amounts due under the Plan are paid from one or more trusts,
the  assets of which are  subject  to the  claims of  general  creditors  of the
Employer or any affiliate thereof; provided, however, that, nothing in this Plan
shall  require the Company or any  Employer  to  establish  any trust to provide
benefits under the Plan.

      1.4.  Applicable  Laws.  The Plan shall be construed and  administered  in
accordance  with the laws of the State of  Illinois to the extent that such laws
are not preempted by the laws of the United States of America.

      1.5 Plan Year.The "Plan Year" shall be the calendar year.

      1.6 Accounting  Date. The "Accounting  Date" shall be the last day of each
calendar month and each other date specified by the Committee.

      1.7.  Gender and  Number.  Where the context  admits,  words in the gender
shall include the other gender,  words in the singular  shall include the plural
and the plural shall include the singular.

      1.8.  Notices.  Any  notice  or  document  required  to be filed  with the
Committee  under  the Plan  will be  properly  filed if  delivered  or mailed by
registered mail, postage prepaid,  to the Committee,  in care of the Company, at
its  principal  executive  offices.  Any notice  required  under the Plan may be
waived by the person entitled to notice.

      1.9.  Action by  Employers.  Any action  required or permitted to be taken
under the Plan by any Employer which is a corporation  shall be by resolution of
its Board of  Directors,  or by a person or persons  authorized  by its Board of
Directors. Any action required or permitted to be taken by any Employer which is
a partnership  shall be by a general  partner of such  partnership  or by a duly
authorized officer thereof.

      1.10.  Limitations  on  Provisions.  The  provisions  of the  Plan and the
benefits provided  hereunder shall be limited as described  herein.  Any benefit
payable under the Savings Plan shall be paid solely in accordance with the terms
and  conditions of the Savings Plan and nothing in this Plan shall operate or be
construed in any way to modify, amend, or affect the terms and provisions of the
Savings Plan.

      1.11.  Claims and Review  Procedures.  The claims procedure  applicable to
claims and appeals of denied  claims  under the Savings  Plan shall apply to any
claims for benefits under the Plan and appeals of any such denied claims.

      1.12. Benefits Under Plan as in Effect Prior to January 1, 1997. Except as
otherwise  specifically  provided in the Plan, the provisions of the Plan as set
forth  herein  shall  apply only to persons  who become  Participants,  commence
benefit payments or for whom contributions are made on or after January 1, 1997.

                                    SECTION 2

                                  Participation

      2.1.  Eligibility to Participate.  Each person who was a "Participant"  in
the Plan immediately prior to the Effective Date shall continue as a Participant
hereunder  for periods  thereafter,  subject to the terms and  conditions of the
Plan. Subject to the terms and conditions of the Plan, each other employee of an
Employer  shall  become  a  "Participant"  in the  Plan  for  any  Plan  Year in
accordance with the following:

      (a)   each eligible  employee whose tax deferred  contributions,  employer
            matched  contributions  or, for Plan Years commencing after December
            31, 1998, profit sharing  contributions,  under the Savings Plan for
            any Plan Year are limited by section 415 of the Code shall  become a
            Participant   on  the  first  date  on  which   such  tax   deferred
            contributions,  employer  matched  contributions  or profit  sharing
            contributions are so limited;

      (b)   each eligible employee whose tax deferred  contributions or employer
            matched   contributions  under  the  Savings  Plan  for  Plan  Years
            commencing after December 31, 1993 are limited by application of the
            provisions  section  401(a)(17) or 402(g) of the Code shall become a
            Participant on the first date on which such tax deferred or employer
            matched  contributions  are so limited and the following  conditions
            are satisfied:

            (i)   he is employed  in an  executive  salary  grade which has been
                  designated by the Committee as eligible for  participation  in
                  the Plan; and

            (ii)  he  has  elected  to  make  the  maximum  elective   deferrals
                  permitted  under  the terms of the  Savings  Plan for the Plan
                  Year (as  determined in accordance  with rules  established by
                  the Committee); and

      (c)   each eligible  employee who is employed in an executive salary grade
            which  has  been   designated  by  the  Committee  as  eligible  for
            participation  in the Plan and whose  profit  sharing  contributions
            under the Savings Plan for any Plan Year  commencing  after December
            31, 1998 are limited by section  401(a)(17) of the Code shall become
            a  Participant  on the  first  date on  which  such  profit  sharing
            contributions are so limited.

An eligible  employee may become a Participant under any or all of the foregoing
paragraphs.  Once an eligible  employee  becomes a  Participant  in the Plan, he
shall remain a Participant so long as he has an Account  balance under the Plan;
provided, however, that, in order to have contributions (other than Supplemental
Profit  Sharing  Contributions  (as  defined  subsection  3.4))  credited to his
Account for any Plan Year, a  Participation  Election  must be in effect for him
for the Plan Year as described in subsection 3.2. Eligible employees who satisfy
the  requirements  of  paragraph  (b) or (c) next  above  for any Plan  Year are
sometimes referred to herein as "Supplemental Participants".

      2.2.  Beneficiary.  A Participant's  "Beneficiary" under the Plan shall be
determined in accordance  with the  provisions of the Savings Plan, but need not
be identical to his beneficiary under the Savings Plan.

      2.3. Restricted Participation.  Notwithstanding any other provision of the
Plan to the contrary,  if the Committee  determines that participation by one or
more  Participants  or  Beneficiaries  shall  cause the Plan as  applied  to any
Employer to be subject to Part 2, 3 or 4 of Title I of the  Employee  Retirement
Income Security Act of 1974, as amended, the entire interest of such Participant
or Beneficiary  under the Plan shall,  in the  discretion of the  Committee,  be
immediately  paid to such  Participant or  Beneficiary,  as  applicable,  by the
applicable  Employer or Employers,  or shall  otherwise be  segregated  from the
Plan,  and  such  Participant(s)  or  Beneficiary(ies)  shall  cease to have any
interest under the Plan.

      2.4.  Plan Not  Contract of  Employment.  The Plan does not  constitute  a
contract of employment, and participation in the Plan will not give any employee
the right to be retained in the employ of any Employer nor any right or claim to
any benefit under the Plan, unless such right or claim has specifically  accrued
under the terms of the Plan.


                                    SECTION 3

                                  Contributions

       3.1. Participant Account. The Committee shall maintain an "Account",  and
such subaccounts as the Committee deems necessary or appropriate, in the name of
each person who is a Participant.

      3.2. Supplemental Deferred  Contributions.  For any Plan Year, an eligible
employee may file with the Committee a  "Participation  Election" which shall be
filed in accordance with uniform rules  established by the Committee but, in all
events,  shall be  filed  prior to the  first  day of the Plan  Year to which it
relates. A Participant's  Participation Election shall generally provide that if
the Participant's tax deferred  contributions to the Savings Plan are limited by
the provisions of section 415 or, for Plan Years  commencing  after December 31,
1993 with respect to Supplemental Participants,  section 401(a)(17) or 402(g) of
the Code,  his  compensation  for the Plan Year will continue to be reduced,  in
accordance with his tax deferred election as in effect under the Savings Plan as
of the date (the  "Limitation  Date") on which  his tax  deferred  contributions
under the Savings Plan are first limited by section 415, 401(a)(17) or 402(g) of
the Code,  as  applicable,  by an  amount  equal to the  amount of tax  deferred
contributions  that  would  have  been  made  under  the  Savings  Plan  had the
provisions of section 415 or, for Plan Years  commencing after December 31, 1993
with respect to Supplemental Participants,  sections 401(a)(17) or 402(g) of the
Code,  had not applied to him. For any Plan Year,  an amount equal to the amount
that the  Participant's  compensation is reduced  pursuant to his  Participation
Election  (referred  to  as  "Supplemental  Deferred  Contributions")  shall  be
credited to his Account under the Plan. In no event shall the sum of (a) the tax
deferred contributions made by a Participant under the Savings Plan, and (b) his
Supplemental Deferred Contributions, for any Plan Year exceed the maximum amount
of tax deferred  contributions  that could have been  contributed to the Savings
Plan for such Plan Year in accordance with the terms thereof, determined without
regard to the  limitations  of sections  401(a)(17),  402(g) or 415 of the Code,
based on the  Participant's  tax deferred  election under the Savings Plan as in
effect as of the Limitation Date. Credits to the Participant's  Account pursuant
to this  subsection  3.2  shall  be made at the  same  time  that  tax  deferred
contributions  would  otherwise  have been  credited to his  accounts  under the
Savings  Plan.  Once  filed  with the  Committee,  an  employee's  Participation
Election  shall remain in effect until  modified or revoked by the individual in
accordance with uniform rules established by the Committee.  Notwithstanding any
other  provision of the Plan to the contrary,  any employee who is covered under
the Nicor Gas Salary  Deferral Plan shall not be eligible to  participate in the
Plan with respect to Supplemental Deferred Contributions.

      3.3.   Supplemental   Matched   Contributions.   For  any  Plan  Year,   a
Participant's  Account will be credited  with an amount equal to the  difference
between (a) the employer matched  contributions that would have been contributed
on  behalf  of the  Participant  to the  Savings  Plan for that  Plan  Year,  in
accordance  with the terms thereof and based on his tax deferred  election under
the Savings Plan as in effect on the Limitation Date,  determined without regard
to the  limitations of sections 415 or, for Plan Years  beginning after December
31, 1993 with respect to Supplemental Participants, 401(a)(17) and 402(g) of the
Code, and (b) the amount of employer matched contributions  actually made to the
Savings  Plan  on  behalf  of  the  Participant;   provided,   however  that  no
Supplemental  Matched  Contributions  shall be made to a  Participant's  Account
under the Plan for periods after the Participant's  termination date. Credits to
the Participant's  Account pursuant to this subsection 3.3 (called "Supplemental
Matched  Contributions")  shall be made at the same time that  employer  matched
contributions  would  otherwise  have been  credited to his  accounts  under the
Savings Plan.

      3.4.  Supplemental  Profit  Sharing  Contributions.  For any Plan Year,  a
Participant's  Account will be credited  with an amount equal to the  difference
between  (a) the  employer  profit  sharing  contributions  that would have been
contributed on behalf of the Participant to the Savings Plan for that Plan Year,
in  accordance  with  the  terms  thereof,  determined  without  regard  to  the
limitations  of sections  415 or,  with  respect to  Supplemental  Participants,
401(a)(17)  of  the  Code,  and  (b)  the  amount  of  employer  profit  sharing
contributions  actually  made to the Savings Plan on behalf of the  Participant.
Credits to the  Participant's  Account  pursuant to this  subsection 3.4 (called
"Supplemental Profit Sharing Contributions") shall be made at the same time that
employer profit sharing  contributions would otherwise have been credited to his
accounts under the Savings Plan.



                                    SECTION 4

                                 Plan Accounting

      4.1.  Allocation  and Crediting of  Contributions.  As of each  Accounting
Date,  the Committee  shall adjust the Plan Account of each Plan  Participant in
the following manner and order:

      (a)   first,  charge  to each  Participant's  Account  the  amount  of any
            distributions that have been paid to or on behalf of the Participant
            since the last preceding Accounting Date pursuant to subsections 5.1
            and 5.2 that have not previously been charged;

      (b)   next,  credit to each  Participant's  Account earnings computed at a
            rate of  return  equal to the  rate of  return  for such  accounting
            period  earned on amounts  invested in the stated  return fund under
            the Savings Plan (or any other  investment  fund or funds which may,
            in the  discretion of the  Committee,  augment or replace the stated
            return fund),  based on the average  monthly  balance of the Account
            for the accounting period;

      (c)   next, credit to his Account the amount of the Supplemental  Deferred
            Contributions, if any, made by or on behalf of the Participant since
            the last preceding  Accounting  Date that have not  previously  been
            credited;

      (d)   next,  credit to his Account the amount of the Supplemental  Matched
            Contributions, if any, made by or on behalf of the Participant since
            the last preceding  Accounting  Date that have not  previously  been
            credited; and

      (e)   finally, credit to his Account the amount of the Supplemental Profit
            Sharing  Contributions,  if  any,  made  by  or  on  behalf  of  the
            Participant  since the last preceding  Accounting Date that have not
            previously been credited.

The portion of a Participant's  Account  attributable  to  Supplemental  Matched
Contributions  and  Supplemental  Profit  Sharing  Contributions,  and  earnings
thereon,  will be reduced to zero on the date,  if any, as of which his employer
matched contribution account and employer profit sharing account,  respectively,
is forfeited under the Savings Plan.

      4.2.  Statement of Accounts.As  soon as practicable  after the last day of
each  Plan  year,  the  Committee  will  cause  to be  delivered  to  each  Plan
Participant a statement of the balance of his Plan Account as of that day.


                                    SECTION 5

                            Payment of Plan Benefits

      5.1. Pre-Termination  Distribution.  With the consent of the Committee, as
of any  Accounting  Date a  Participant  who is then  employed by an Employer or
affiliate may, upon a showing of financial  hardship and after exhausting all of
his rights of withdrawal under the Savings Plan, elect a single sum distribution
of all or a  portion  of  his  Account  attributable  to  Supplemental  Deferred
Contributions,  and earnings thereon,  in an amount not exceeding such financial
hardship.

      5.2.  Distribution on Termination.  Subject to the following provisions of
this subsection 5.2, as of the Accounting Date coincident with or next following
a Participant's termination date, there shall be payable to him or, in the event
of his death, to his Beneficiary an amount equal to:

      (a)   the balance of his Account  attributable  to  Supplemental  Deferred
            Contributions and earnings thereon, if any; plus

      (b)   to the extent that he has a nonforfeitable right to all or a
            portion of his employer matched contribution account under the
            Savings Plan, that portion of the balance of his Account
            attributable to Supplemental Matched Contributions, and earnings
            thereon, determined by applying the same vesting schedule to the
            portion of his Account attributable to Supplemental Matched
            Contributions, and earnings thereon, as is then applied to his
            employer matched contribution account under the Savings Plan;
            plus

      (c)   to the extent that he has a nonforfeitable right to all or a
            portion of his employer profit sharing account under the Savings
            Plan, that portion of the balance of his Account attributable to
            Supplemental Profit Sharing Contributions, and earnings thereon,
            determined by applying the same vesting schedule to the portion
            of his Account attributable to Supplemental Profit Sharing
            Contributions as is then applied to his employer profit sharing
            account under the Savings Plan.

Any payment  under this  subsection  5.2 which is made after  December  31, 1993
shall be made in any form  permitted  under the Savings  Plan, as elected by the
Participant,  and shall commence as of the Accounting  Date  coincident  with or
next following the first anniversary of his termination date; provided, however,
if the Participant  has filed an election with the Committee  regarding his form
of  payment  at least one year  prior to his  termination  date,  payment of his
Account  shall  commence  as of the  Accounting  Date  coincident  with  or next
following his termination date. Notwithstanding the foregoing provisions of this
subsection 5.2, if the value of a Participant's Account balances does not exceed
$5,000,  determined as of the Participant's termination date, or with respect to
a Beneficiary,  the date of the Participant's  death, the Participant's  Account
balances shall be paid to the  Participant or Beneficiary,  as applicable,  in a
lump sum as soon as  practicable  after the  Participant's  termination  date or
death, as applicable.  The Committee, in its sole discretion,  may accelerate or
defer the date of payment of any benefits to the extent that it determines  such
acceleration  or deferral to be in the best  interests  of the  Employers or any
Participant for any reason.

      5.3.   Distributions  To  Persons  Under  Disability  .  In  the  event  a
Participant  or his  Beneficiary  is declared  incompetent  and a conservator or
other  person  legally  charged  with the care of his person or of his estate is
appointed,  any benefit to which such  Participant  or  Beneficiary  is entitled
under the Plan shall be paid to such conservator or other person legally charged
with the care of his person or of his estate.

      5.4. Benefits May Not Be Assigned or Alienated. The benefit payable to any
Participant   or   Beneficiary   under  the  Plan  may  not  be  voluntarily  or
involuntarily assigned or alienated.


                                    SECTION 6

                            Amendment and Termination

      The  Company  may, at any time,  amend or  terminate  the Plan;  provided,
however,  that subject to the provisions of the following  sentence,  neither an
amendment nor a termination shall adversely affect the rights of any Participant
or Beneficiary  under the Plan. The Company,  by Plan amendment or  termination,
may  prospectively  (a) modify or eliminate the right of any Participant to make
Supplemental  Deferred  Contributions,  and (b) modify or eliminate the right to
have  Supplemental   Matched   Contributions  or  Supplemental   Profit  Sharing
Contributions  credited to the Account of any Participant.  Notwithstanding  the
foregoing  provisions  of this Section 6, the Company may amend or terminate the
Plan at any time, to take effect retroactively or otherwise, as deemed necessary
or advisable for purposes of  conforming  the Plan to any present or future law,
regulations or rulings relating to plans of this or a similar nature.