UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington,
        D.C. 20549
 
 
 **FORM
        8-K**
 **CURRENT
        REPORT**
 
 Pursuant
        to Section 13 or 15(d) of the
 Securities
        Exchange Act of 1934
 
 
 **December
        28, 2006**
 Date
        of
        Report (Date of earliest event reported)
 
 
 **NICOR
        INC.**
 (Exact
        name of registrant as specified in its charter)
 
 
 **Illinois**
              **1-7297**
              **36-2855175**(State
                  or other jurisdiction
              (Commission
              (I.R.S.
                  EmployerOf
                  incorporation)
              File
                  Number)
              Identification
                  Number)
 
 
 **1844
        Ferry Road**
 **Naperville,
        Illinois 60563-9600**
 (Address
        of principal executive offices) (Zip Code)
 
 **(630)
        305-9500**
 (Registrant’s
        telephone number, including area code)
 
 
 Check
        the
        appropriate box below if the Form 8-K filing is intended to simultaneously
        satisfy the filing obligation of the registrant under any of the following
        provisions (see General Instruction A.2. below):
  [
        ]  Written
        communications pursuant to Rule 425 under the Securities Act (17 CFR
        230.425)
  [
        ]  Soliciting
        material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
        240.14a-12)
  [
        ]  Pre-commencement
        communications pursuant to Rule 14d-2(b) under the Exchange Act
 (17
        CFR
        240.14d-2(b))
  [
        ]  Pre-commencement
        communications pursuant to Rule 13e-4(c) under the Exchange Act
 (17
        CFR
        240.13e-4(c))
  
 
  
 **Page
        1**
 
 **Item
        5.02 Departure of Directors or Certain Officers; Election of Directors;
        Appointment of Certain Officers; Compensatory Arrangements of Certain
        Officers.**
 
 On
        December 28, 2006, Nicor Inc. (“Nicor”) entered into a new Change-in-Control
        Agreement with Paul C. Gracey, Jr. Mr. Gracey is the Senior Vice President,
        General Counsel and Secretary of Nicor. The new Change-in-Control Agreement
        replaces a November 25, 2002 agreement between Nicor and Mr.
        Gracey.
 
 The
        new
        Change-in-Control Agreement generally provides for continued employment for
        Mr.
        Gracey for two years following a change in control of Nicor in his then current
        position at no less than his then current salary and benefits and for the
        following upon termination of Mr. Gracey’s executive employment by him for “good
        reason” or by Nicor without “cause” (as defined in the agreement) during that
        period: (1) payment of an amount equal to three times the sum of Mr. Gracey’s
        annual base salary and the greater of his average bonus for the last two
        years
        or his current year target bonus: (2) full vesting plus credit for an additional
        three years of contributions under the Supplemental Senior Officer Retirement
        Plan; (3) full vesting and an additional three years of company contributions
        under the Savings Investment Plan; (4) full vesting of all outstanding stock
        incentive awards, which would continue to be exercisable for their full term
        or
        until Mr. Gracey’s earlier death; (5) at least a three year continuation of
        welfare benefits; and (6) outplacement and legal fees and other expenses.
        Nicor
        will make an additional payment to Mr. Gracey so that he will receive net
        benefits as if no excise tax were payable. The new Change-in-Control Agreement
        is automatically extended for an additional year on each December 31 unless
        either party gives notice to the contrary by the preceding June 30. The
        agreement is also extended automatically for two years following any change
        in
        control of Nicor while it is in effect.
 
 A
        copy of
        the new Change-in-Control Agreement is attached as Exhibit 99.1, and is
        incorporated herein by reference.
 
 **Item
        7.01**  **Regulation
        FD Disclosure** **.**
 
 The
        information in this Item is furnished to, but not filed with, the Securities
        and
        Exchange Commission solely under Item 7.01 of Form 8-K, “Regulation FD
        Disclosure.”
 
 As
        previously reported in July 2006, Nicor deposited $10 million in escrow in
        connection with the tentative agreement with the Staff of the Enforcement
        Division of the United States Securities and Exchange Commission (the “SEC”) to
        settle an anticipated civil action to which Nicor and the SEC will be parties.
        Nicor has extended the term of the escrow agreement.
 
 A
        copy of
        the amendment to the escrow agreement is furnished as Exhibit 99.2 and is incorporated herein by reference.
  
 **Item
        9.01**  **Financial
        Statements and Exhibits** .
  (d)  Exhibits
  Exhibit No.
              Description99.1
              Change-in-Control Agreement dated
                as of
                December 28, 2006 between Nicor Inc. and Mr. Gracey99.2
              First Amendment to Escrow
                Agreement
  
  **Page
        2**
 
 **Signature**
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, the registrant
        has
        duly caused this report to be signed on its behalf by the undersigned hereunto
        duly authorized.
 
 
 
 
 Nicor
        Inc.
 
 
 Date
         December 28,
        2006                                                                                                            
/s/ KAREN K. PEPPING
 Karen
        K. Pepping.
 Vice
        President, Controller and
 Principal
        Accounting Officer
   
  **Page
        3**
 
 **Exhibit
        Index**
  ExhibitNumber
              Description of
                Document99.1
              Change-in-Control
                Agreement dated as of December 28, 2006 between Nicor Inc. and Mr.
                Gracey99.2
              First
                Amendment to Escrow Agreement