AGREEMENT
RESTATING 1984 AND 1985


NICOR
CAPITAL ACCUMULATION PLAN


PARTICIPATION
AGREEMENTS




This
Agreement, made and entered into this 20th of November, 2008, by and among NICOR
Inc. (the “Company”), Birdsall Inc. (“Birdsall”), a subsidiary of the Company
and John H. Birdsall III (“Employee”).




WITNESSETH
THAT:




WHEREAS,
Employee and Birdsall are parties to an agreement dated January 1, 1984, which
agreement provides for Employee’s participation in the NICOR Capital
Accumulation Plan for the year ending December 31, 1984 (the “1984
Agreement”);




WHEREAS,
Employee and Birdsall are parties to an agreement dated January 1, 1985, which
agreement provides for Employee’s participation in the NICOR Capital
Accumulation Plan for the year ending December 31, 1985 (the “1985 Agreement”
and along with the 1984 Agreement the “Original Agreements”);




WHEREAS,
by resolution adopted on June 9, 1987 the Compensation Committee of the Board of
Directors of the Company (the “Committee”) approved an amendment to the Original
Agreements pursuant to which Employee’s service as a director of the Company was
deemed to be active service with Birdsall for purposes of the Original
Agreements;




WHEREAS,
by resolution adopted on December 15, 1988, the Board of Directors of the
Company reaffirming the action taken by the Board at its September 1985 meeting
approving an amendment to the Original Agreements which allowed Employee to
retire at or after age 55 and receive the same benefits under the Original
Agreements as if he remained on active service to age 65; and




WHEREAS,
by agreements each dated November 8, 1985, the Original Agreements were amended
to reflect changes to payment under the Original Agreements in the event of a
change in control;









WHEREAS,
pursuant to a Fund Transfer Agreement dated October 30, 1985, the Company and
Birdsall agreed that the Company would fund the payments under the Original
Agreements;




WHEREAS,
Employee, the Company and Birdsall desire to restate the Original Agreements to
reflect all prior amendments and the obligations of each of the parties thereto
as in effect on December 31, 2004;




NOW,
THEREFORE, in consideration of the agreements and covenants hereinafter set
forth, and other good and valuable considerations.  IT IS AGREED by
and among the parties hereto that the following be substituted for and in full
replacement of the Original Agreements:




1.  Deferral of
Compensation.  Under the terms of the Original
Agreements:




(a)  Employee
deferred $50,000 of the amount of his base salary earned by him for services
rendered to Birdsall during 1984.




(b)  Employee
deferred $63,000 of the amount of his base salary earned by him for services
rendered to Birdsall during 1985.




2.  Fulfillment of Paragraph 2
of Original Agreements.  Employee, Birdsall and the Company
acknowledge and agree that as of December 31, 2004, Birdsall and the Company
have satisfied all obligations under paragraph 2 of the Original
Agreements.




3.  Employee/Retiree Who
Survives to Age 65.  Subject to the provisions of paragraph 12,
if Employee is alive on his 65th
birthday then in addition to benefits to which he received under paragraph 2, he
shall be entitled to benefits under this Agreement as follows:




(a)  The
Company will pay to Employee installments of $337,785 per calendar year for the
15 consecutive calendar years beginning on the first business day of January,
2009 and each January of each year thereafter (for a total of $5,066,775 or
$3,285,450 per 1984 Agreement and $1,781,325 per 1985 Agreement).




(b)  If
Employee dies before all or any of his benefits under this paragraph 3 have been
paid to him, his Beneficiary shall receive the benefits at the same time and in
the same amount as would have been paid to Employee if Employee had survived
until all payments to him were completed.




4.  Special Death Benefit
Rule.  Subject to the provisions of paragraph 12, if Employee’s
Board membership with the Company and Affiliates terminates by reason of his
death prior to his 65th
birthday, there shall be no further benefits payable under this
Agreement.




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5.  Disability.  For
purposes of this Agreement (other than for purposes of paragraph 12), if the
Employee becomes totally and permanently disabled while he is a director, he
will be considered to be a retired director and will be subject to benefits
under paragraph 3, above.




6.  Beneficiary.  The
Employee may, from time to time, by signing a form furnished by the Committee,
designate any legal or natural person or persons (who may be designated
contingently or successively) to whom payments are to be made if he dies before
he receives payment of all amounts due hereunder (“Beneficiary”).  A
beneficiary designation form will be effective only when the signed form is
filed with the Committee while the Employee is alive and will cancel all
beneficiary designation forms filed earlier.  If more than one
Beneficiary has been designated, payments shall be distributed to each such
Beneficiary per capita.  Except as otherwise specifically provided in
this Section 6, if the Employee fails to designate a Beneficiary as provided
above, or if no designated Beneficiary survives the Employee or dies before all
payments due hereunder have been paid, then any remaining payments shall be paid
to the legal representative or representatives of the estate of the last to die
of the Employee and any designated Beneficiary.




7.  Participation Agreement Not
a Trust Fund.  It is specifically agreed by Employee and the
Company that the Company’s obligation to make payments to any person under this
Agreement is purely contractual and that the parties do not intend that the
amounts payable hereunder be held by the Company in trust for Employee or as a
segregated fund.




8.  Affiliates,
Successors.  For purposes of this Agreement, the term
“Affiliate” means any corporation, trade or business during any period that it
is, along with any Employer, a member of a controlled group of corporations or a
controlled group of trades or businesses (as described in sections 414(b) and
(c), respectively, of the Internal Revenue Code of 1986, as
amended).  This Agreement shall be binding on Employee and his heirs
and legal representatives and on the Company and its successors and assigns,
whether by merger, consolidation or the sale of all or substantially all of the
Company’s assets.




9.  Counterparts.  This
Agreement may be executed in two or more counterparts, any one of which shall be
deemed an original without reference to the others.




10.  Governing
Law.  The provisions of this Agreement and the rights of the
parties hereunder shall be interpreted and construed in accordance with the laws
of the State of Illinois.




11.  Change in Control
Benefit.  Notwithstanding any of the foregoing provisions of
this Agreement, following a Change in Control (as defined below) the employer
shall pay to the Employee in a lump sum an amount equal to:




(a)           first,
increase the amount actually deferred under paragraph 1 of this Agreement with
interest at the rate of 20% per year for the period between the date of the
Original Agreements and the date payment was made under paragraph 2 of the
Original Agreements;




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(b)           next
reduce the amount determined in accordance with paragraph 11(a) by any amounts
previously paid under paragraph 2 of this Agreement; and




(c)           next,
increase the amount determined in accordance with paragraph 11 (b) with interest
at the rate of 20% per year for the period between the date of payment under
paragraph 2 of this Agreement and the date of payment under this paragraph
11.




For
purposes of this paragraph 11, interest shall be compounded on the first day of
each calendar year with no adjustment for a partial year.  If the
Employee becomes entitled to payment under this paragraph 11, no further payment
shall be made to him or on his behalf under paragraphs 5 or 6 of this Agreement.
For purposes of this Agreement, “Change in Control” means the occurrence of a
“change in the ownership,” a “change in the effective control” or a “change in
the ownership of a substantial portion of the assets” of the
Company.  In determining whether an event shall be considered a
“change in the ownership,” a “change in the effective control” or a “change in
the ownership of a substantial portion of the assets” of an entity, the
following provisions shall apply:




(1)
            A
      “change in the ownership” of the Company shall occur on the date on which
      any one person, or more than one person acting as a group (within the
      meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
      1934, as amended (a  “Person”)), acquires ownership of the
      equity securities of the Company that, together with the equity securities
      held by such Person, constitutes more than 50% of the total fair market
      value or total voting power of the Company, as determined in accordance
      with Treas. Reg. §1.409A-3(i)(5)(v).  If a Person is considered
      either to own more than 50% of the total fair market value or total voting
      power of the equity securities of the Company, or to have effective
      control of the Company within the meaning of subsection 11(2), and such
      Person acquires additional equity securities of the Company, the
      acquisition of additional equity securities by such Person shall not be
      considered to cause a “change in the ownership” of the
      Company.




(2)
            A
      “change in the effective control” of the Company shall occur on either of
      the following dates:




(i)           The
date on which any Person, acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such Person) ownership of
stock of the Company possessing 30% or more of the total voting power of the
Company’s equity securities, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vi).  If a Person is considered to possess 30% or more
of the total voting power of the Company’s equity securities, and such Person
acquires additional stock of the Company, the acquisition of additional




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  stock by
such Person shall not be considered to cause a “change in the effective control”
of the Company; or




(ii)           The
date on which a majority of the members of the Board is replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Board before the date of the appointment or
election, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vi).




(3)
            A
      “change in the ownership of a substantial portion of the assets” of the
      Company shall occur on the date on which any one Person acquires (or has
      acquired during the 12-month period ending on the date of the most recent
      acquisition by such Person) assets from the Company that have a total
      gross fair market value equal to or more than 40% of the total gross fair
      market value of all of the assets of the Company immediately before such
      acquisition or acquisitions, as determined in accordance with Treas. Reg.
      §1.409A-3(i)(5)(vii).  A transfer of assets shall not be treated
      as a “change in the ownership of a substantial portion of the assets” when
      such transfer is made to an entity that is controlled by the holders of
      the Company’s equity securities, as determined in accordance with Treas.
      Reg. §1.409A-3(i)(5)(vii)(B).




(4)
            Notwithstanding
      the foregoing, the following acquisitions shall not constitute a Change in
      Control: (i) an acquisition by the Company or entity controlled by the
      Company, or (ii) an acquisition by an employee benefit plan (or related
      trust) sponsored or maintained by the Company or any entity controlled by
      the Company.




(5)
            For
      purposes of this Subsection 11, (i) the term “Company” shall mean Nicor
      Inc. and shall include any Successor to Nicor Inc.; and (ii) the term
      “Successor to Nicor Inc.” shall mean any corporation, partnership, joint
      venture or other entity that succeeds to the interests of Nicor Inc. by
      means of a merger, consolidation or other restructuring that does not
      constitute a Change in Control.




12.  Amendment of
Agreement.  With the approval of the Committee, this Agreement
may be amended by writing signed by the parties hereto.




13.  Restated
Agreement.  This Agreement constitutes an amendment restatement
and continuation of the Original Agreements, and supersedes the Original
Agreements.




14.  409A.




(a)           To
the extent applicable, the Agreements shall be interpreted in accordance with
Section 409A of the Code and Department of Treasury regulations and other
interpretive guidance issued thereunder.  If the Committee determines
that any amounts payable under the Agreements do not comply with




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Section
409A of the Code and related Department of Treasury guidance, the Committee
shall amend the Agreements or take such other actions as it deems necessary or
appropriate to comply with the requirements of Section 409A of the Code while
preserving the economic agreement of the parties.




(b)          
Any other provision of the Agreements to the contrary notwithstanding, in the
event that the IRS prevails in its claims that amounts payable under the
Agreements constitute taxable income to the Employee or his Beneficiary for any
taxable year of his, prior to the taxable year in which such payments are to be
made to the Employee or his Beneficiary, or in the event that legal counsel
satisfactory to the Employer and the Employee or Beneficiary renders an opinion
that the IRS would likely prevail in such a claim, the amount subject to such
income tax shall be immediately distributed to the Employee or
Beneficiary.”




IN
WITNESS WHEREOF, the Employee and an authorized representative of the Committee
have hereunto set their hands, and the Company has caused these presents to be
executed by its officers and its corporate seal to be hereunto affixed and
attested, all as of the day and year first above written.







/s/ JOHN
H. BIRDSALL III


Employee






Birdsall
Inc.




By:/s/ RUSS M.
STROBEL


Its:Chairman and
President






NICOR
Inc.




By:/s/ RUSS M.
STROBEL


Its:Chairman, Chief
Executive Officer and President




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