Nicor Inc.
                                                                        Form S-8
                                                                    Exhibit 4.03
















                       NICOR GAS THRIFT PLAN
                (As Amended and Restated Effective
          as of January 1, 2001 Through Third Amendment)

























                            Mayer, Brown, Rowe & Maw
                                     Chicago



<PAGE>

                          NORTHERN ILLINOIS GAS COMPANY

                                   Certificate

      I, Alexander Allison, Assistant Secretary and Attorney of NORTHERN
ILLINOIS GAS COMPANY (doing business as Nicor Gas Company), having in my custody
and possession the corporate records and seal of said corporation, do hereby
certify that attached hereto is a true and correct copy of NICOR GAS THRIFT
PLAN, as amended and restated effective as of January 1, 2001.

      WITNESS my hand and the corporate seal of the corporation this 25 day of
February, 2002.

                               /s/ Alexander C. Allison
                               ------------------------
                                   As Aforesaid
                                   (Seal)

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        ACTIONS OF OFFICER OF NORTHERN ILLINOIS GAS COMPANY
        ---------------------------------------------------

   WHEREAS, Northern Illinois Gas Company (doing business as Nicor Gas Company)
(the "Company") maintains Nicor Companies Savings Investment Plan (previously
known as Nicor Gas Savings Investment Plan (the "SIP")), Nicor Gas Thrift Plan
(the "Thrift Plan"), Nicor Companies Retirement Plan (previously known as the
Nicor Gas Retirement Plan (the "Retirement Plan")) and Nicor Gas Pension Plan
(the "Pension Plan");

   WHEREAS, certain amendments to the SIP, Thrift Plan, Retirement Plan and
Pension Plan were considered desirable to reflect changes in law and
administration;

   NOW, THEREFORE, pursuant to the authority granted to the officers of the
Company by action of its Board of Directors adopted on March 10, 1982, the SIP,
as amended and restated effective as of January 1, 2001, the Thrift Plan, as
amended and restated effective as of January 1, 2001, the Retirement Plan, as
amended and restated effective as of January 1, 2001, and the Pension Plan, as
amended and restated effective as of January 1, 2001, are each hereby adopted in
the forms attached hereto.



Date:  February 25, 2002            NORTHERN ILLINOIS GAS COMPANY

                                    By:  Claudia J. Collalillo
                                    Its: Vice President Human Resources and
                                         Corporate Communications

<PAGE>
                           TABLE OF CONTENTS

                                                                Page

SECTION 1    General..............................................1

      1.1  History, Purpose and Effective Date....................1

      1.2  Plan Administration, Trust Agreement...................1

      1.3  Plan Year..............................................1

      1.4  Applicable Laws........................................1

      1.5  Form of Election.......................................1

      1.6  Gender and Number......................................2

      1.7  Notices................................................2

      1.8  Evidence...............................................2

      1.9  Action by Employers....................................2

      1.10 Accounting Date........................................2

      1.11 Affiliate..............................................2

      1.12 Plan Supplements.......................................2

      1.13 Profit Sharing Plan and ESOP...........................2

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

      2.1  Participants...........................................3

      2.2  Continued Participation................................3

      2.3  Participation Not Contract of Employment...............3

      2.4  Restricted Participation...............................3

      2.5  Leased Employees.......................................4

      2.6  Compliance with Veterans' Laws.........................4

SECTION 3    Periods of Service...................................5

      3.1  Year of Service........................................5

      3.2  One Year Break in Service..............................5

SECTION 4    Plan Contributions...................................6

      4.1  Employee Tax-deferred Contributions....................6

      4.2  Employee After-tax Contributions.......................6

      4.3  Employer Matched Contributions.........................6

      4.4  Employer Profit Sharing Contributions..................7

      4.5  Compensation...........................................7

      4.6  Election to Vary or Suspend Contributions..............7

      4.7  Automatic Suspension of and Limitation on
           Contributions..........................................7

      4.8  Limitations on Contributions...........................8

      4.9  Reduction for Forfeitures..............................8

      4.10 Payment of Contributions...............................8

      4.11 Transfers From Savings Investment Plan.................8

SECTION 5    Participants' Accounts...............................9

SECTION 6    The Trust Fund, Investment Funds and Investment
             Elections...........................................10

      6.1  The Investment Funds..................................10

      6.2  Investment Elections..................................10

      6.3  Transfers Among Investment Funds......................11

SECTION 7    Plan Accounting.....................................11

      7.1  Adjustment of Investment Funds........................11

      7.2  Deduction, Crediting and Allocation of
           Contributions.........................................11

      7.3  Statement of Plan Interest............................12

SECTION 8    Limitation On Amount Credited to Participants.......12

      8.1  Reduction of Contribution Rates.......................12

      8.2  Compensation for Limitation/Testing Purposes..........12

      8.3  Limitations on Annual Additions.......................13

      8.4  Adjustment For Related Defined Contribution Plans.....14

      8.5  Reduction of Contributions............................14

      8.6  Disposition of Excess Annual Additions................14

      8.7  Allocation Among Employers............................15

      8.8  Limitations Under Code Section 402(g).................15

      8.9  Code Section 401(k)(3) Testing........................16

      8.10 Correction of Section 401(k) Excess...................17

      8.11 Code Section 401(m)(2) Testing........................18

      8.12 Correction of Section 401(m) Excess...................18

      8.13 Multiple Use of Alternative Limitation................20

      8.14 Highly Compensated Employee...........................20

      8.15 Separate Testing of ESOP and Non-ESOP Portion of
           the Plan..............................................20

SECTION 9    Termination Dates...................................22

SECTION 10   Distributions.......................................22

      10.1 Fully Vested Benefits.................................22

      10.2 Benefits on Non-Vested Resignation or Dismissal.......22

      10.3 Restoration of Forfeitures............................23

      10.4 Manner of Payment.....................................24

      10.5 Payment in and Waiver of Joint and Survivor
           Annuity Form and Single Life Annuity Form.............24

      10.6 Payment in Form of Pre-Retirement Surviving Spouse
           Annuity...............................................25

      10.7 Election Information..................................25

      10.8 Commencement of Benefits..............................26

      10.9 Compliance With Section 401(a)(9) of the Code.........28

      10.10 Assets to be Distributed.............................28

      10.11 Designation of Beneficiary...........................28

      10.12 Interests Not Transferable...........................29

      10.13 Application of Forfeitures...........................30

      10.14 Distributions to Persons Under Disability............30

      10.15 Absence of Guaranty..................................30

      10.16 Missing Participants or Beneficiaries................30

      10.17 Spousal Consent......................................30

      10.18 Distribution and Withdrawal Elections................31

      10.19 Direct Rollover to an Eligible Retirement Plan.......32

      10.20 Distribution Only Upon Separation From Service.......32

      10.21 Transfers to SIP.....................................32

SECTION 11   Withdrawals and Loans...............................33

      11.1 Pre-Termination Withdrawals From Employee
           After-tax Account.....................................33

      11.2 Pre-Termination Withdrawals From Employee
           Tax-deferred Account..................................33

      11.3 Hardship..............................................33

      11.4 Loans.................................................34

      11.5 Partial Withdrawals...................................36

      11.6 Order of Pre-Termination Withdrawals From Accounts....37

      11.7 Order of Post-Termination Withdrawals From Accounts...37

      11.8 Order of Withdrawal From Investment Funds.............37

      11.9 No Make-up of Withdrawals.............................37

SECTION 12   Nicor Stock.........................................38

      12.1 Purchase of Nicor Stock...............................38

      12.2 Voting Nicor Stock....................................38

SECTION 13   The Committee.......................................38

      13.1 Membership............................................38

      13.2 Rights, Powers and Duties.............................38

      13.3 Information to be Furnished to Committee..............39

      13.4 Committee's Decision Final............................39

      13.5 Remuneration and Expenses.............................39

      13.6 Indemnification of the Committee......................39

      13.7 Exercise of Committee's Duties........................39

      13.8 Resignation or Removal of Committee Member............40

      13.9 Appointment of Successor Committee Members............40

      13.10 Interested Committee Member..........................40

SECTION 14   Amendment and Termination...........................40

      14.1 Amendment.............................................40

      14.2 Termination...........................................40

      14.3 Merger and Consolidation of Plan, Transfer of Plan
           Assets................................................41

      14.4 Vesting and Distribution on Termination and
           Partial Termination...................................41

      14.5 Notice of Amendment, Termination or Partial
           Termination...........................................41


SUPPLEMENT A                                                    A-1

FIRST AMENDMENT OF NICOR GAS THRIFT PLAN
SECOND AMENDMENT OF NICOR GAS THRIFT PLAN
THIRD AMENDMENT OF NICOR GAS THRIFT PLAN



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                       NICOR GAS THRIFT PLAN
                       ---------------------
     (As Amended and Restated Effective as of January 1, 2001)

SECTION 1.

                                     General

1.1 History, Purpose and Effective Date. Northern Illinois Gas Company (doing
business as Nicor Gas Company (the "company")) previously established NI-GAS
THRIFT PLAN (the "plan") to promote the mutual interest of the employers (as
defined below) and their eligible employees by providing such employees with an
opportunity to supplement their retirement income through a systematic savings
program and to acquire an equity interest in the company's business, and by
providing the employers and their eligible employees with the tax and other
benefits provided under applicable laws to employee stock ownership plans. The
following provisions constitute an amendment, restatement and continuation of
the plan as in effect immediately prior to January 1, 2001, the "effective date"
of the plan as set forth herein and the name is changed to the "Nicor Gas Thrift
Plan". The company and any affiliate (as defined in subsection 1.11) which, with
the consent of the company, adopts the plan are sometimes referred to below
collectively as the "employers" and individually as an "employer." The plan is
intended to qualify as a profit-sharing plan under section 401(a) of the
Internal Revenue Code of 1986, as amended (the "code") and as a qualified cash
or deferred arrangement under section 401(k) of the code.

1.2 Plan Administration, Trust Agreement. The authority to control and manage
the operation and administration of the plan shall continue to be vested in a
committee as described in Section 13. Except as otherwise specifically provided
in Section 13, the company shall have the rights, duties and obligations of the
plan "administrator" as described in section 3(16)(A) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and of a "plan administrator"
as that term is defined in section 414(g) of the code. The funds contributed by
the employers and participants under the plan will continue to be held and
invested until distributed by a trustee (the "trustee") acting under a trust
which forms a part of the plan. The terms of the trust are set forth in a trust
agreement known as Nicor Gas Savings Investment and Thrift Trust between the
trustee and the company. On and after the effective date, the company may
appoint an additional trustee or trustees to hold and invest any portion of the
trust fund in accordance with the provisions of other trust agreements which,
when executed, will form a part of the plan. Copies of the trust agreement and
the plan are filed at the general office of each employer where they may be
examined by any eligible employee or participant. The provisions of and benefits
under the plan are subject to the terms and provisions of the trust agreement.

1.3 Plan Year.  The term "plan year" means the calendar year.

1.4 Applicable Laws. The laws of Illinois shall be the controlling state law in
all matters relating to the plan and shall be applicable to the extent that they
are not preempted by the laws of the United States of America.

1.5 Form of Election. Each election, request or direction permitted to be made
by any participant or other person entitled to benefits under the plan, and any
permitted modification or

<PAGE>

revocation thereof, shall be filed with the committee
in such form and at such times as the committee may require.

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

1.7 Notices. Notices and documents relating to the plan to be filed with the
committee may be delivered, or mailed by registered mail, postage prepaid, to
the committee, in care of the company, at its principal administrative office.
Any notice required under the plan may be waived by the person entitled to
notice.

1.8 Evidence. Evidence required of anyone under the plan may be by certificate,
affidavit, document or other information which the person acting on it considers
pertinent and reliable, and signed, made or presented by the proper party or
parties.

1.9 Action by Employers. Any action required or permitted to be taken by any
employer that is a corporation shall be by resolution of its board of directors,
or by a duly authorized officer of the employer. Any action required or
permitted to be taken by any employer that is a partnership shall be by a
general partner of such partnership or by a duly authorized officer thereof.

1.10 Accounting Date.  The term "accounting date" means each business day.

1.11 Affiliate. 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 code).

1.12 Plan Supplements. The provisions of the plan as applied to an employer or
to any group of employees of any employer may, with the consent of the company,
be modified or supplemented from time to time by the adoption of one or more
supplements. Each supplement shall form a part of the plan as of the
supplement's effective date. In the event of any inconsistency between a
supplement and the plan document, the terms of the supplement shall govern.

1.13 Profit Sharing Plan and ESOP. The plan shall consist of a profit sharing
plan which is intended to qualify under section 401(a) of the code (referred to
herein as the "non-ESOP portion of the plan"), and an employee stock ownership
plan (referred to herein as the "ESOP") which is intended to qualify as a stock
bonus plan under section 401(a) of the code and as an employee stock ownership
plan under section 4975(e)(7) of the code. The ESOP shall consist of the portion
of the plan which, as of that date, is invested in the Nicor Stock Fund
described in Section 6. The assets of the ESOP shall be invested primarily in
shares of the common stock of Nicor Inc. ("Nicor stock") which qualify as
employer securities within the meaning of section 409(l) of the code. Both the
ESOP and the non-ESOP portion of the plan include a qualified cash or deferred
arrangement within the meaning of section 401(k) of the code and the non-ESOP
portion of the plan also consists of a profit sharing component which is not a
cash or deferred

                                        2
<PAGE>

arrangement. Both the ESOP and the non-ESOP portion of the plan
are intended to constitute a single plan under Treas. Reg. Section
1.414(l)-1(b)(1).

SECTION 2.

                                  Participation

2.1 Participants. Each employee of the employers who was a "participant" in the
plan as of December 31, 2000 will continue as such on and after January 1, 2001,
subject to the conditions and limitations of the plan. Subject to the conditions
and limitations of the plan, each other employee of the employers will become a
"participant" in the plan on January 1, 2001 or the first day of the first pay
period thereafter on which he meets all of the following requirements:

(a)        he has completed at least four months of service; and

(b)        he is employed as a member of a group of employees to which the plan
           has been and continues to be extended through a currently effective
           collective bargaining agreement between his employer and the
           collective bargaining representative of the group of employees of
           which he is a member.

In addition, each employee of the employers who begins employment with an
employer or an affiliate on or after January 1, 1999, who satisfies the
requirements of paragraph 2.1(b) and who completes at least one year of service
(as defined in subsection 3.1) will become a "participant" in the plan with
respect to employer profit sharing contributions (as described in subsection
4.4) on the first day of the first pay period after he satisfies the foregoing
requirements. Individuals who are participants in the plan with respect to
employer profit sharing contributions are sometimes referred to herein as
"profit sharing participants". Notwithstanding any provision of the plan to the
contrary, individuals who are not treated as common law employees by an employer
on its payroll records are excluded from plan participation even if it is later
determined (whether by judicial or administrative action or otherwise) that such
individual is or was a common law employee of an employer.

2.2 Continued Participation. An employee who has once met the requirement of
paragraph 2.1(a) shall not again be required to meet that requirement as a
condition of eligibility following a one year break in service (as defined in
subsection 3.2).

2.3 Participation 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 or any right or claim to
any benefit under the terms of the plan unless such right or claim has
specifically accrued under the terms of the plan.

2.4 Restricted Participation. When distribution of part or all of the benefits
to which a participant is entitled under the plan is deferred beyond or cannot
be made until after his termination date (as described in Section 9), or,
subject to the provisions of subsection 10.21, during any period that a
participant continues in the employ of an employer or an affiliate but fails to
meet the requirements of paragraph 2.1(b), or during any period for which
employee tax-deferred contributions (as described in subsection 4.1), employee
after-tax contributions (as

                                        3
<PAGE>

described in subsection 4.2) or employer profit
sharing contributions are not made with respect to the participant, the
participant, or in the event of his death, his beneficiary, will be considered
and treated as a participant for all purposes of the plan except as follows:

(a)        no contributions will be credited to his accounts (as described in
           Section 5) for any period that the participant continues in the
           employ of the employers but fails to meet the requirements of
           paragraph 2.1(b) or after his termination date;

(b)        if a participant has elected distribution of his account balance in a
           lump sum, his accounts shall not be adjusted in accordance with the
           provisions of subsection 7.1 after his distribution date (as defined
           in subsection 10.1); and

(c)        a participant whose termination date has occurred and whose account
           balances have not yet been distributed may not make a withdrawal in
           accordance with the provisions of Section 11 except as otherwise
           specifically provided in subsection 11.5.

2.5 Leased Employees. If, pursuant to one or more agreements between an employer
or affiliate and one or more leasing organizations (within the meaning of
section 414(n) of the code), a person provides services to the employer or
affiliate, in a capacity other than as an employee, on a substantially full-time
basis for a period of at least one year and such services are performed under
the primary direction or control of an employer or affiliate, such person shall
be a "leased employee". Leased employees shall not be eligible to participate in
this plan or in any other plan maintained by the employer or affiliate which is
qualified under section 401(a) of the code. A leased employee shall be treated
as if the services performed by him in such capacity (including service
performed during such initial one-year period) were performed by him as an
employee of an affiliate which has not adopted the plan; provided, however, that
no such service shall be credited:

(a)        for any period during which not more than 20% of the
           non-highly compensated workforce of the employers and
           the affiliates consists of leased employees and the
           leased employee is a participant in a money purchase
           pension plan maintained by the leasing organization
           which (i) provides for a nonintegrated employer
           contribution of at least 10 percent of compensation,
           (ii) provides for full and immediate vesting, and (iii)
           covers all employees of the leasing organization
           (beginning with the date they become employees), other
           than those employees excluded under section 414(n)(5)
           of the code; or

(b)        for any other period unless the leased employee provides satisfactory
           evidence to the employer or affiliate that he meets all of the
           conditions of this subsection 2.5 and applicable law required for
           treatment as a leased employee.

For purposes of paragraph (a) above, "highly compensated" shall have the meaning
set forth in subsection 8.15.

2.6 Compliance with Veterans' Laws. Notwithstanding any other provision of this
plan to the contrary, for reemployments occurring on or after December 12, 1994,
contributions,

                                        4
<PAGE>

benefits and service credit with respect to qualified military
service will be provided in accordance with section 414(u) of the code.

SECTION 3.

                               Periods of Service

3.1 Year of Service. An employee's or participant's years of service as at any
date equals the year or years and any portion thereof elapsed since his initial
date of hire by an employer or affiliate subject to the following:

(a)        An employee's or participant's number of years of service, and
           portion thereof, for the period prior to the effective date shall be
           equal to his number of years of service, and any portion thereof, if
           any, determined under the provisions of the plan as in effect on
           December 31, 2000.

(b)        If an employee's or participant's employment with the employers and
           affiliates is terminated and he incurs a one year break in service he
           shall not be credited with service for the period between the date of
           his termination and the date, if any, of his reemployment by any
           employer or affiliate.

(c)        For purposes of determining whether a participant has a
           nonforfeitable interest in his employer contribution
           subaccounts (as defined in Section 5) accrued prior to
           the date he incurs five consecutive one year breaks in
           service (or prior to the date he incurs a one year
           break in service, if it is incurred before January 1,
           1985), a participant's number of years of service
           accrued after such five consecutive one year breaks in
           service (or, if the break in service was incurred
           before January 1, 1985, such one year break in service)
           shall be disregarded.

3.2 One Year Break in Service. The term "one year break in service" means, with
respect to any employee or participant, the 12-consecutive-month period
commencing on the date of his termination of employment with the employers and
affiliates if he is not reemployed by an employer or affiliate during that
period. Notwithstanding the preceding sentence, solely for purposes of
determining whether a one year break in service has occurred, an employee or
participant who is absent from service on account of a maternity or paternity
absence (as defined below) that extends beyond the first anniversary of the date
such absence began shall be deemed to have terminated employment with the
employers and affiliates on the later of (i) his termination date, or (ii) the
second anniversary of the date on which such absence began. The term "maternity
or paternity absence" means an employee's or participant's absence from work
that commences on or after January 1, 1985 because of the pregnancy of the
individual, the birth of a child of the individual, the placement of a child
with the individual in connection with the adoption of a child by such
individual, or for purposes of caring for the child by such person immediately
following such birth or placement. The committee may require the individual to
furnish such information as the committee considers necessary to establish that
the individual's absence was for one of the reasons specified above.

                                        5
<PAGE>

SECTION 4.

                               Plan Contributions

4.1 Employee Tax-deferred Contributions. Subject to the following provisions of
this Section 4 and Section 8, each employer, out of its current or accumulated
profits (as determined in accordance with recognized accounting principles and
practices), shall contribute to the trustee, in cash, on behalf of each
participant for whom a tax deferral election is in effect as to any pay period,
an amount, referred to herein as an "employee tax-deferred contribution", which
is equal to the amount by which the compensation (as defined in subsection 4.5)
otherwise payable to the participant during that pay period by the employer has
been reduced pursuant to the terms of a tax deferral election. For purposes of
the plan, the term "tax deferral election" means an election by an employee to
have the amount of the compensation that would otherwise be payable to him for
each pay period during the period in which the election is in effect reduced by
an amount that is not less than 1 percent and not more than 10 percent (or such
other percent as the committee shall decide and, in all cases, in multiples of
one percent). The plan provisions relating to certain limitations on employee
after-tax contributions are set forth in subsection 4.2. Employee tax-deferred
contributions shall be paid to the trustee in accordance with subsection 4.10.

4.2 Employee After-tax Contributions. Subject to the following provisions of
this Section 4 and Section 8, a participant may elect to contribute for any pay
period, in cash, an amount, hereafter referred to as an "employee after-tax
contribution", that is not less than l percent and not more than 7 percent of
his compensation for that pay period (or such other percent as the committee
shall decide and, in all cases, in multiples of one percent). The plan
provisions relating to certain limitations on employee tax-deferred
contributions are set forth in subsection 4.1. A participant's employee
after-tax contributions, if any, shall be made by regular payroll deductions
from his compensation and shall be paid to the trustee in accordance with
subsection 4.10.

4.3 Employer Matched Contributions. Subject to the following provisions of this
Section 4 and Section 8, each employer, out of its current or accumulated
profits (as determined in accordance with recognized accounting principles and
practices), shall contribute to the trustee, in cash, on behalf of each
participant for whom a tax deferral election is in effect for any pay period or
who has elected to make employee after-tax contributions for any pay period, an
amount, referred to herein as an "employer matched contribution", equal to 60
percent of that portion of the sum of:

(a)        the employee tax-deferred contributions made by the employer on
           behalf of the participant for that pay period, if any; plus

(b)        the employee after-tax contributions, if any, made by the participant
           for that pay period;

that does not exceed 6 percent of the participant's compensation for that pay
period from the employer. Employer matched contributions shall be paid to the
trustee in accordance with subsection 4.10. Notwithstanding any other provision
of the plan, employer matched

                                       6
<PAGE>

contributions shall first be made with respect to
employee tax-deferred contributions before any employer matched contributions
are made with respect to employee after-tax contributions. Employer matched
contributions shall be paid to the trustee in accordance with subsection 4.10

4.4 Employer Profit Sharing Contributions. Subject to the following provisions
of this Section 4 and Section 8, the company, out of its current or accumulated
profits, shall make an "employer profit sharing contribution" to the plan for
each plan year in an amount, if any, determined by the company in its sole
discretion. Each other employer shall make an employer profit sharing
contribution for the same plan year on behalf of each participant entitled to an
allocation in accordance with subsection 7.2, in an amount equal to the
contribution made by the company, expressed as a percentage of compensation.
Employer profit sharing contributions shall be paid to the trustee in accordance
with subsection 4.10 and shall be allocated to the accounts of profit sharing
participants in accordance with subsection 7.2.

4.5 Compensation. For purposes of the plan, a participant's "compensation" for
any period means the regular basic cash remuneration paid to him for such period
by reason of his employment with the employers as a participant, excluding
bonuses, overtime pay, and all other remuneration of any kind including, but not
limited to pre-paid salary increase advances and lump sum raise payments, and
including vacation pay, reductions made in accordance with the provisions of
subsection 4.1, reductions made pursuant to section 125 of the code, including
under any tax exempt premium plan in which the employee participates, and
reductions made pursuant to section 132(f)(4) of the code; provided, however,
that the compensation of any participant for any plan year shall be disregarded
to the extent that it exceeds $160,000 (adjusted in accordance with section
401(a)(17) of the code), taking into account any proration of such amount as may
be required under applicable Treasury regulations on account of a short plan
year.

4.6 Election to Vary or Suspend Contributions. A participant may elect to have
his employer change the rate of employee tax-deferred contributions being made
by that employer on his behalf, or elect to change his employee after-tax
contribution rate in accordance with uniform rules established by the committee.
A participant may elect to have his employer suspend employee tax-deferred
contributions being made by that employer on his behalf, or may elect to suspend
making his employee after-tax contributions, in accordance with uniform rules
established by the committee. Notwithstanding the foregoing provisions of this
subsection 4.6, no change to or suspension of contributions shall be applied
retroactively and all changes to elections (including suspensions of
contributions) shall be effective as soon as administratively feasible after the
date elected by the participant.

4.7 Automatic Suspension of and Limitation on Contributions. The provisions of
the plan requiring the contribution of employee tax-deferred contributions under
a tax deferral election by a participant, permitting a participant to make
employee after-tax contributions or requiring an employer to make an employer
profit sharing contribution on behalf of a profit sharing participant shall be
without effect as to:

(a)        any period during which the participant fails to meet the
           requirements of paragraph 2.1(b); and

                                        7
<PAGE>

(b)        the amount of any employee tax-deferred contributions, employee
           after-tax contributions or employer profit sharing contributions
           otherwise payable to the plan on behalf of a participant which could
           not be credited to that participant's accounts because of the
           provisions of Section 8.

4.8 Limitations on Contributions. In no event will an employer's employee
tax-deferred contributions, employer matched contributions and employer profit
sharing contributions under the plan for any plan year exceed an amount equal to
the lesser of (a) the maximum amount deductible on account thereof by the
employer for that plan year as an expense for federal income tax purposes, after
taking into account amounts contributed in accordance with subsection 10.3, or
(b) the amount that, together with any forfeitures arising under the plan during
the year which are attributable to that employer's contributions, can be
credited for that plan year in accordance with Section 8.

4.9 Reduction for Forfeitures. Forfeitures arising under the plan which are
attributable to prior contributions by an employer shall be considered
contributions to the plan by that employer and shall be applied to reduce the
amount of contributions otherwise required by that employer under this Section
4.

4.10 Payment of Contributions. The employee tax-deferred contributions and
employee after-tax contributions with respect to any participant shall be paid
to the trustee by the employers on the earliest date on which such contributions
can reasonably be segregated from the employers' general assets, which date
shall be no later than the 15th business day of the month following the month
(a) in which such amounts are received by the employer (in the case of amounts
paid to an employer by a participant), or (b) such amounts would otherwise have
been payable to the participant (in the case of amounts withheld by an employer
from a participant's wages), or, in either case, such other date permitted by
law. Each employer's employer matched contributions and employer profit sharing
contributions under the plan for any plan year shall be paid to the trustee,
without interest, no later than the time prescribed by law for filing the
employer's federal income tax return, including any extensions thereof.

4.11 Transfers From Savings Investment Plan. If an employee of an employer
ceases to satisfy the eligibility requirements of the Nicor Companies Savings
Investment Plan (the "SIP") because he is no longer employed as a member of a
group of employees to which the SIP has been extended and continues to be
extended and the employee:

(a)        continues to be employed by an employer or an affiliate; and

(b)        coincident with his cessation of eligibility for the SIP, he
           satisfies the provisions of subsection 2.1 of the plan;

then his account balances under the SIP, determined as of the accounting date
coincident with or next following the date described in paragraph (a) next
above, shall be transferred as soon as practicable thereafter to the
corresponding accounts under the plan and, for periods thereafter, he shall
cease to be a participant in the SIP and shall be a participant in this plan,
subject to the terms and conditions of the plan. Amounts transferred to the plan
pursuant to this subsection 4.11 shall not be considered annual additions for
purposes of Section 8.

                                        8
<PAGE>

SECTION 5.

                             Participants' Accounts

      The committee will maintain the following accounts, which accounts shall
be adjusted from time to time as required by subsection 7.1:

(a)        An "employee tax-deferred account" in the name of each
           participant for whom employee tax-deferred
           contributions or employer matched contributions
           attributable thereto, were made under the plan or for
           whom amounts were transferred to the plan from his
           employee tax-deferred account under the thrift plan,
           which account will consist of the following three
           subaccounts, to the extent applicable:

          (i)   a subaccount known as the "employee tax-deferred
                contribution subaccount", which subaccount shall
                reflect the amount of the employee tax-deferred
                contributions made by the employers on his behalf,
                and amounts transferred from his employee
                tax-deferred contribution subaccount under the
                SIP, and the income, losses, appreciation and
                depreciation attributable thereto; and

        (ii)    a subaccount known as the "tax-deferred employer matched
                contribution subaccount", which subaccount shall reflect the
                amount of the employer matched contributions made by the
                employers on his behalf under the plan which are attributable
                to his employee tax-deferred contributions and amounts
                transferred from his tax-deferred employer matched contribution
                subaccount under the SIP, and the income,
                losses, appreciation and depreciation attributable thereto.

(b)        An "employee after-tax account" in the name of each
           participant who made employee after-tax contributions
           under the plan or for whom employer matched
           contributions attributable thereto were made under the
           plan or for whom amounts were transferred to the plan
           from his employee after-tax account under the SIP,
           which account will consist of the following two
           subaccounts, to the extent applicable:

          (i)   a subaccount known as the "employee after-tax contribution
                subaccount", which subaccount will reflect the
                amount of the employee after-tax contributions
                made by the participant in accordance with the
                terms of the plan and amounts transferred from his
                employee after-tax contribution subaccount under
                the SIP, and the income, losses, appreciation and
                depreciation attributable thereto; and

         (ii)   a subaccount known as the "employee after-tax employer matched
                contribution subaccount", which subaccount will reflect the
                amount of the employer matched contributions made by the
                employer in accordance with the terms of the plan that are
                attributable to his employee after-tax

                                             9
<PAGE>

                contributions and amounts
                transferred from his employee after-tax employer matched
                contribution subaccount under the SIP, and the income, losses,
                appreciation and depreciation attributable thereto.

(c)        A "profit sharing account" in the name of each profit sharing
           participant, which account shall reflect his share of employer profit
           sharing contributions, and the income, losses, appreciation and
           depreciation attributable thereto.

Reference to a participant's "accounts" means his employee tax-deferred account,
his employee after-tax account and his employer profit sharing account.
Reference to the "balance" in any account maintained in the name of a
participant means the aggregate of the balances in the investment funds (as
described in subsection 6.1) established for the investment of participants'
accounts. Reference to a participant's "employee contribution subaccounts" means
his employee tax-deferred contribution subaccount and his employee after-tax
contribution subaccount and reference to a participant's "employer contribution
subaccounts" means his tax-deferred employer matched contribution subaccount,
his employee after-tax employer matched contribution subaccount and his profit
sharing account.

SECTION 6.

                        The Trust Fund, Investment Funds
                            and Investment Elections

6.1 The Investment Funds. The committee may, from time to time, cause one or
more "investment funds" to be established under the Trust for the investment of
participants' accounts, which investment funds shall include:

(a)        a "Loan Fund" which shall consist only of loans to participants in
           accordance with subsection 11.4; and

(b)        a "Nicor Stock Fund" which shall be invested primarily in shares of
           common stock of Nicor Inc.

Unless a participant elects otherwise in accordance with subsection 6.2 or 6.3,
no change shall be made in the investment of a participant's accounts merely
because of a change or addition of investment funds. The committee may, from
time to time, eliminate or add investment funds or may make any changes to
investment funds as it deems appropriate. Pending more permanent investment of
available funds, or to accommodate cash flow needs, the trustee may retain any
reasonable portion of an investment fund in cash, short-term government
obligations or commercial paper.

6.2 Investment Elections. Contributions made with respect to any participant and
amounts transferred to the plan from the SIP on behalf of any participant shall
be invested in accordance with the following provisions of this subsection 6.2:

(a)        Each participant may prospectively specify separately the percentages
           (in multiples of 1 percent or such other amount specified from time
           to time by the

                                        10
<PAGE>

           committee) of his tax-deferred, employee after-tax
           contributions and employer profit sharing contributions that are to
           be invested in each of the investment funds.

(b)        A participant may prospectively change his investment direction
           effective as of the first day of the first pay period or such other
           dates permitted by the committee.

(c)        The employer matched contributions that are made with respect to a
           participant and credited to his employee tax-deferred account shall
           be invested in the investment funds in the same direction as are his
           employee tax-deferred contributions.

(d)        The employer matched contributions that are made with respect to a
           participant and credited to his employee after-tax account shall be
           invested in the investment funds in the same proportions as are his
           employee after-tax contributions.

(e)        Amounts transferred to the plan from the SIP shall be invested in the
           same investment funds, in the same proportion, as such amounts were
           invested under the SIP immediately prior to the transfer.

(f)        During any period for which no direction as to the investment of a
           participant's contributions is on file with the committee,
           contributions by him or on his behalf under the plan will be invested
           in an investment fund specified by the committee.

(g)        Any amount held in a suspense account (as described in subsection
           8.6) shall be invested in an investment fund specified by the
           committee.

Elections pursuant to this subsection 6.2 shall be made in accordance with
uniform and nondiscriminatory rules established from time to time by the
committee.

6.3 Transfers Among Investment Funds. A participant (or a beneficiary to whom
benefits are being distributed in accordance with paragraph 10.4(b)) may
transfer his accounts between or among investment funds by giving such notice to
the trustee as the committee shall require, directing that all or a portion of
the value of his accounts attributable to a particular investment fund shall be
transferred to any of the other available investment funds. A transfer shall be
effective pursuant to uniform and nondiscriminatory rules established from time
to time by the committee.



SECTION 7.

                                 Plan Accounting

7.1 Adjustment of Investment Funds. The value of any investment held under or
distributed from the plan as of any date shall be the fair market value (as
determined by the trustee) of the investment on that date, or as of the most
recent prior date on which it was valued by the trustee. The trustee shall value
an investment held under the plan in accordance with rules

                                        11
<PAGE>

established by it provided that all investments under the plan on the last day
of each plan year shall be valued by the trustee as of that date.

7.2   Deduction, Crediting and Allocation of Contributions.
      Subject to the provisions of Section 8:

(a)        Employee tax deferred contributions and employee after-tax
           contributions on behalf of a participant for any period shall be
           credited to that participant's appropriate accounts as of the day on
           which such contributions are made.

(b)        The amount of the employer matched contributions that are
           made on behalf of a participant shall be credited, as
           of the end of the day that the contributions are made,
           to the participant's employee tax-deferred account and
           employee after-tax account, pro rata, according to the
           rate of employee tax-deferred contributions and
           employee after-tax contributions that are made with
           respect to the participant, respectively; provided,
           however, that, if the sum of a participant's employee
           tax-deferred contribution rate and employee after-tax
           contribution rate exceeds 6 percent of the
           participant's compensation, then the amount of the
           employer matched contributions made with respect to the
           participant shall be credited to the participant's
           employee tax-deferred account in the same ratio that
           the participant's employee tax-deferred contribution
           rate (not in excess of 6 percent) bears to 6 percent,
           and the amount of any remaining employer matched
           contributions shall be credited to the participant's
           employee after-tax account.

(c)        As of the last day of each plan year, the employer profit sharing
           contributions of each employer for that plan year shall be allocated
           among and credited to the profit sharing accounts of profit sharing
           participants who were employed by the employer on the last day of the
           plan year, pro rata based on the compensation paid to them from the
           employer for that plan year.

For purposes of this Section 7, all employer contributions for any plan year
which are made after the close of the plan year will be considered to have been
made on the last day of that plan year regardless of when paid to the trustee.

7.3 Statement of Plan Interest. As soon as practicable after the last day of
each plan year, and at such other times as the committee may deem appropriate,
the committee shall provide each participant with a statement reflecting the
balances of his accounts.

SECTION 8.

           Limitation On Amount Credited to Participants

8.1 Reduction of Contribution Rates. To conform the operation of the plan to the
requirements of sections 401(a)(4), 401(k)(3), 401(m)(2), 402(g) and 415(c) of
the code, the committee may unilaterally modify or revoke any tax deferral
election made by any person, may limit the amount of contributions that may be
made by or on behalf of any participant pursuant to Section 4 or may reduce (to
zero if necessary) the level of employer matched contributions or employer
profit sharing contributions to be made on behalf of any participant under the
plan.

                                        12
<PAGE>

8.2 Compensation for Limitation/Testing Purposes. For purposes of the plan, the
term "section 415 compensation" for any plan year means the participant's
compensation (as described in Treas. Reg. Section 1.415-2(d)(1)) paid during
that year for personal services actually rendered in the course of employment
with any employer or any section 415 affiliate, excluding deferred compensation
and other amounts that receive special tax treatment (as described in Treas.
Reg. Section 1.415-2(d)(2)) but including any elective contributions made on the
participant's behalf for the year under the plan or any plan maintained by an
employer or affiliate which are excludable from the participant's gross income
by reason of section 125, 402(e)(3) and 132(f) of the code. Notwithstanding the
foregoing provisions of this subsection 8.2, "section 415 compensation" for any
plan year shall be disregarded to the extent that it exceeds $160,000 (adjusted
in accordance with section 401(a)(17) of the code), taking into account any
proration of such amount as may be required under applicable Treasury
regulations where section 415 compensation is computed with respect to a period
of less than a full year (other than on account of mid-year commencement or
cessation of active participation in the plan).

8.3 Limitations on Annual Additions. Notwithstanding any other provision of the
plan other than the provisions of this Section 8, for plan years beginning on or
after January 1, 1995, a participant's annual additions (as defined below) for
any plan year shall not exceed an amount equal to the lesser of:

(a)        $30,000 (as adjusted for each plan year to take into account any
           applicable cost-of-living adjustment for that year provided by the
           Secretary of the Treasury under section 415(d) of the code); or

(b)        25 percent of the section 415 compensation paid to the participant in
           that plan year (determined without regard to the limitations of
           section 401(a)(17) of the code).

The limitations set forth under paragraphs (a) and (b) shall be adjusted to the
extent required by subsection 8.4. For purposes of the plan, the term "annual
additions" means, with respect to any participant for any plan year, the sum of
the following amounts, determined without regard to whether any such amounts (or
portions thereof) are subsequently distributed to the participant in accordance
with the provisions of subsection 8.12 or 8.13:

(1)        employer contributions and forfeitures (including employee
           tax-deferred contributions, which are considered to be employer
           contributions) credited to the participant's accounts for that plan
           year under this plan and each related defined contribution plan (as
           defined below);

(2)        employee contributions (other than rollover contributions) credited
           to the participant's accounts under this plan and each related
           defined contribution plan for that plan year; and

(3)        employer contributions allocated to any individual medical account
           (as described in section 415(l) of the code) that is maintained for
           the benefit of the participant under a related defined benefit plan
           (as defined below) and, if the participant is a key employee (as
           defined in section 416 of the code), any amount allocated to a

                                        13
<PAGE>

           related medical account (as defined below) maintained for the
           participant; provided, however, that the amounts described in this
           paragraph (3) shall be disregarded for purposes of the limitation set
           forth in paragraph (b) next above.

For purposes of the plan: (i) the term "related medical account" means any
account maintained by any employer or section 415 affiliate under section
419A(d) of the code to fund retiree medical benefits; (ii) the term "section 415
affiliate" means any corporation or trade or business that is, along with any
employer, a member of a controlled group of corporations or controlled group of
trades or businesses (as described in sections 414(b) and (c) of the code, as
modified by section 415(h) thereof); and (iii) the term "related defined
contribution plan" and "related defined benefit plan" mean any other defined
contribution plan and any defined benefit plan (both as defined in section
415(k) of the code), respectively, maintained by any employer or section 415
affiliate.

8.4 Adjustment For Related Defined Contribution Plans. During any plan year in
which a participant is also a participant in any related defined contribution
plan, the maximum annual additions attributable to employer contributions and
forfeitures which could otherwise be credited to his accounts for the year under
this plan in accordance with subsection 8.3 shall be reduced to a proportionate
amount thereof determined by the ratio of the amount of employer contributions
which would otherwise be credited to his accounts under this plan for the year
to the total amount of employer contributions which would otherwise be credited
to his accounts under this plan and all such related defined contribution plans
for the year.

8.5 Reduction of Contributions. In the event that a participant's annual
additions for any plan year would otherwise exceed the limitations imposed by
subsection 8.3, as modified by subsection 8.4, the amount of contributions that
would otherwise be credited to his accounts for that year shall be reduced, to
the extent necessary to comply with such limitations, in the following order:

(a)        first, employee after-tax contributions that would not otherwise
           result in employer matched contributions being made shall be reduced;

(b)        next, employee tax-deferred contributions that would not otherwise
           result in employer matched contributions being made shall be reduced;

(c)        next, employee after-tax contributions and the employer matched
           contributions to the extent attributable to those contributions shall
           be reduced;

(d)        next, employee tax-deferred contributions and the employer matched
           contributions to the extent attributable to those contributions shall
           be reduced; and

(e)        finally, employer profit sharing contributions shall be reduced.

The amount of any reduction made pursuant to this subsection 8.5 shall not be
considered an annual addition under the plan.

8.6 Disposition of Excess Annual Additions. If, as a result of a reasonable
error in estimating a participant's section 415 compensation, a reasonable error
in determining the

                                        14
<PAGE>

amount of elective deferrals (as defined in section 402(g)(3) of the code)
or as a result of such other circumstances as the Commissioner
of Internal Revenue may determine, a participant's annual additions for a plan
year would exceed the limitations set forth in subsection 8.3, as modified by
subsection 8.4:

(a)        The amount of employee after-tax contributions made by a
           participant which may not be credited to the
           participant's accounts because of the foregoing
           provisions of this Section 8, together with earnings
           thereon, will be returned to the participant as soon as
           practicable.  Employee after-tax contributions for
           which no employer matched contributions were made shall
           be returned before employee after-tax contributions for
           which employer matched contributions were made.

(b)        The amount of employee tax-deferred contributions made on
           behalf of a participant which may not be credited to
           the participant's accounts because of the foregoing
           provisions of this Section 8, together with earnings
           thereon, will be returned to the participant as soon as
           practicable.  Contributions which are to be returned
           pursuant to this paragraph (b) shall be returned in the
           following order: (i) employee tax-deferred
           contributions for which no employer matched
           contributions were made, and (ii) employee tax-deferred
           contributions for which employer matched contributions
           were made.

(c)        The amount of any employer matched contributions, employer profit
           sharing contributions and forfeitures attributable to an employer (as
           described in subsection 10.13) that may not be credited to
           participants' accounts for any plan year because of the foregoing
           provisions of this Section 8 will be treated in accordance with
           Treas. Reg. Section 1.415-6(b)(6)(i).

Amounts returned to a participant or credited to a suspense account in
accordance with this subsection 8.6 shall not be considered an annual addition
for purposes of the plan. If any employee after-tax contributions or employee
tax-deferred contributions are returned to a participant pursuant to this
subsection 8.6, the amount of any employer matched contributions attributable to
such returned contributions shall be forfeited and shall be treated in the same
manner as any other forfeiture under the plan.

8.7 Allocation Among Employers. If the amount of employer contributions
otherwise allocable to a participant in any plan year would exceed the
limitations imposed by the provisions of subsection 8.3, as modified by
subsection 8.4, and the participant is employed by more than one employer during
that year, the amount of each employer's contributions and forfeitures
attributable to the prior contributions of that employer which would otherwise
be allocated and credited to the participant's accounts will be reduced (in
accordance with subsection 8.5) by an amount determined by multiplying such
excess amount by a fraction, the numerator of which is the sum of the employer's
contributions and forfeitures attributable to the prior contributions of that
employer otherwise allocable to the participant for that year, and the
denominator of which is the sum of the contributions of all employers and
forfeitures attributable to the prior contributions of all employers otherwise
allocable to the participant for that year.

                                        15
<PAGE>

8.8 Limitations Under Code Section 402(g). In no event shall the employee
tax-deferred contributions made with respect to a participant for any taxable
year under the plan (together with any elective deferrals, as defined in section
402(g)(3) of the code, made with respect to the participant for that year under
any other plan maintained by an employer or affiliate) exceed $10,500 or such
other amount as may be permitted for that year under section 402(g) of the code.
If, during any taxable year, a participant is also a participant in another cash
or deferred arrangement and his elective deferrals under such other arrangement,
together with his employee tax-deferred contributions, exceed the maximum amount
permitted for that year under section 402(g) of the code, the participant, not
later than March 1 following the close of such taxable year, may request the
committee to distribute all or a portion of such excess to him, with the income
allocable thereto (determined in accordance with Treas. Reg. Section
1.402(g)-1(d)(5) using the safe harbor method for determining the allocable
income for the period between the end of the taxable year and the date of
distribution), and such distribution shall be made not later than April 15th
following the close of such taxable year. The committee may demand adequate
proof of the existence of such excess. In addition, if the applicable limitation
for a plan year happens to be exceeded with respect to this plan alone, or this
plan and another plan or plans of the employers and affiliates, the committee
shall direct such excess employee tax-deferred contributions (with allocable
gains or losses) to be distributed to the participant as soon as practicable
after the committee is notified of the excess deferrals by the company, an
employer or the participant, or otherwise discovers the error (but not later
than the April 15 following the close of the participant's taxable year).
Notwithstanding the foregoing provisions of this subsection 8.8, the dollar
amount of any distribution due hereunder shall be reduced by the dollar amount
of any employee tax-deferred contributions previously distributed to the same
participant pursuant to subsection 8.10; provided, however, that for purposes of
subsections 8.3 and 8.9, the correction under this subsection 8.8 shall be
deemed to have occurred before the correction under subsection 8.10. Amounts
distributed in accordance with this subsection 8.8 shall not be treated as
annual additions for purposes of subsection 8.3.

8.9 Code Section 401(k)(3) Testing. The difference between (i) the average of
the deferral percentages (as defined below) of each eligible employee who is
highly compensated for the plan year (referred to hereinafter as the "highly
compensated group deferral percentage"), and (ii) the average of the deferral
percentages for the immediately preceding plan year of each eligible employee
who was not highly compensated for such preceding plan year (referred to
hereinafter as the "non-highly compensated group deferral percentage") shall
satisfy one of the tests set forth in section 401(k)(3)(A)(ii) of the code. The
"deferral percentage" for any eligible employee for a plan year shall be
determined by dividing the amount of the employee tax-deferred contributions
made with respect to the participant for such year by his section 415
compensation for the year, subject to the following special rules:

(a)        the deferral percentage of an eligible employee who makes no employee
           tax-deferred contributions for the year shall be counted as zero;

(b)        the deferral percentage for any eligible employee who is
           highly compensated and who is eligible to make elective
           deferrals under one or more other plans maintained by
           an employer or affiliate for a plan year of such other
           plan that ends with or within the same calendar year as
           the plan year (other than a plan or arrangement subject
           to mandatory disaggregation under applicable Treasury

                                        16
<PAGE>

           regulations) shall be determined as if all such
           elective deferrals were made on his behalf under the plan;

(c)        excess employee tax-deferred contributions distributed to a
           participant under subsection 8.8 shall be counted in determining such
           participant's deferral percentage except in the case of a
           distribution to a non-highly compensated participant required to
           comply with section 401(a)(30) of the code; and

(d)        in the event that this plan satisfies the requirements of
           sections 401(k), 401(a)(4), or 410(b) of the code only
           if aggregated with one or more other plans having the
           same plan year, or if one or more other plans having
           the same plan year as this plan satisfy the
           requirements of such sections of the code only if
           aggregated with this plan, then this subsection 8.9
           shall be applied as if all such plans were a single
           plan.

Application of this subsection 8.9 shall be consistent with the provisions of
section 401(k)(3) of the code and the regulations thereunder. The provisions of
this subsection 8.9 shall be deemed to be satisfied for any plan year if the
requirements of section 401(k)(12) of the code are satisfied.

8.10 Correction of Section 401(k) Excess. In the event that the highly
compensated group deferral percentage does not initially satisfy one of the
tests referred to in subsection 8.9, the committee shall direct the trustee to
distribute the excess contributions (as described below), together with the
income allocable thereto (determined in accordance with Treas. Reg. Section
1.401(k)-1(f)(4)(ii) using the safe harbor method described therein for
determining the allocable income for the period between the end of the plan year
and the date of distribution), to the appropriate highly compensated
participants in accordance with the following provisions of this subsection
8.10.

(a)        The excess contributions shall be determined on an aggregate basis
           such that, after reduction of contributions to highly compensated
           employees in accordance with this subsection 8.10, the highly
           compensated group deferral percentage for the plan year satisfies one
           of the tests referred to in subsection 8.9.

(b)        The excess contributions to be distributed with respect to
           any highly compensated employee for any plan year shall
           be determined using a leveling method under which the
           amount of the elective deferrals of each highly
           compensated participant is reduced, in a series in the
           order of the amount of their respective elective
           deferrals beginning with the highest, to the extent
           necessary to cause the amount of the highly compensated
           participant's elective deferrals to equal the amount of
           the elective deferrals of the highly compensated
           participant with the next highest amount of elective
           deferrals or, if less, to cause the highly compensated
           group deferral percentage to satisfy one of the tests
           referred to in subsection 8.9.

(c)        The amount of excess contributions to be distributed with respect to
           any participant pursuant to this subsection 8.10 for any plan year
           shall be reduced by the amount of any employee tax-deferred
           contributions previously distributed to the participant for such plan
           year pursuant to subsection 8.8.

                                        17
<PAGE>

The committee shall make any distributions required by this subsection 8.10
after the close of the plan year for which the excess contributions were made
and no later than the close of the plan year following the plan year for which
the excess contributions were made. The provisions of this subsection 8.10 shall
not apply to any plan year for which the requirements of section 401(k)(12) of
the code are satisfied.

8.11 Code Section 401(m)(2) Testing. The difference between (i) the average of
the contribution percentages (as defined below) of each eligible employee who is
highly compensated for the plan year (referred to hereinafter as the "highly
compensated group contribution percentage"), and (ii) the average of the
contribution percentages for the immediately preceding plan year of each
eligible employee who was not highly compensated for such preceding plan year
(referred to hereinafter as the "non-highly compensated group contribution
percentage") shall satisfy one of the tests set forth in section 401(m)(2)(A) of
the code. The "contribution percentage" for any eligible employee for a plan
year shall be determined by dividing the sum of his employee after-tax
contributions and the employer matched contributions made for him for the year
by his section 415 compensation for the year, subject to the following special
rules:

(a)        the contribution percentage of each eligible employee with respect to
           whom no employee after-tax contributions and employer matched
           contributions are made for the year shall be counted as zero;

(b)        the contribution percentage for any eligible employee who is
           highly compensated and who is eligible to participate
           in one or more other qualified plans maintained by an
           employer or affiliate under which employee after-tax
           contributions or matching contributions may be made by
           or for him shall be determined as if all such
           contributions were made by or for him under the plan;
           and

(c)        in the event that this plan satisfies the requirements of
           sections 401(m), 401(a)(4), or 410(b) of the code only
           if aggregated with one or more other plans having the
           same plan year, or if one or more other plans having
           the same plan year as this plan satisfy the
           requirements of such sections of the code only if
           aggregated with this plan, then this subsection 8.11
           shall be applied as if all such plans were a single
           plan.

Notwithstanding the foregoing provisions of this subsection 8.11: (i) the
provisions of this subsection 8.11 shall not apply with respect to eligible
employees who are members of a collective bargaining unit, (ii) in applying this
subsection 8.11 and subsection 8.13 to eligible employees who are not members of
a collective bargaining unit, eligible employees who are members of a collective
bargaining unit shall be disregarded, and (iii) application of this subsection
8.11 shall be consistent with the provisions of section 401(m) of the code and
the regulations thereunder. The provisions of this subsection 8.11 shall be
deemed to be satisfied with respect to employer matched contributions (and such
contributions shall not be taken into account for purposes of applying the
foregoing provisions of this subsection 8.11) for any plan year if the
requirements of section 401(m)(11) of the code are satisfied.

                                        18
<PAGE>

8.12 Correction of Section 401(m) Excess. In the event that the highly
compensated group contribution percentage for any plan year does not initially
satisfy one of the tests referred to in subsection 8.11, the committee shall
distribute the excess aggregate contributions (as described below), together
with the income allocable thereto (determined in accordance with Treas. Reg.
Section 1.401(m)-1(e)(3)(ii) using the safe harbor method described therein for
determining the allocable income for the period between the close of the plan
year and the date of distribution), to the appropriate highly compensated
participants in accordance with the following provisions of this subsection
8.12.

(a)        The excess aggregate contributions shall be determined on an
           aggregate basis for the plan such that, after reduction of excess
           aggregate contributions to highly compensated employees in accordance
           with this subsection 8.12, the highly compensated group contribution
           percentage for the plan year satisfies one of the tests referred to
           in subsection 8.11.

(b)        The excess aggregate contributions to be distributed with
           respect to any highly compensated employee for any plan
           year shall be determined using a leveling method under
           which the amount of the employee after-tax
           contributions and employer matched contributions for
           each highly compensated participant are reduced, in a
           series in the order of the amount of the sum of their
           respective employee after-tax contributions and
           employer matched contributions, beginning with the
           participant with the highest contributions, to the
           extent necessary to cause the amount of the highly
           compensated participant's employee after-tax
           contributions and employer matched contributions to
           equal the sum of the employee after-tax contributions
           and employer matched contributions of the highly
           compensated participant with the next highest amount of
           employee after-tax contributions and employer matched
           contributions, or, if less, to cause the highly
           compensated group contribution percentage to satisfy
           one of the tests referred to in subsection 8.11.

(c)        Any distribution required by this subsection 8.12 shall be made first
           from employee after-tax contributions for which no employer matched
           contribution has been made and then, if necessary, from a
           proportionate share of employee after-tax contributions and the
           employer matched contributions attributable thereto.

(d)        Notwithstanding the foregoing provisions of this subsection
           8.12, any excess aggregate contributions that are
           attributable to employer matched contributions (and the
           income allocable thereto) which are not vested in
           accordance with Section 9 on the last day of the plan
           year for which such contributions were made shall be
           forfeited and treated in the same manner as any other
           forfeiture under the plan.

The committee shall make any distribution (or forfeiture) required by this
subsection 8.12 after the close of the plan year for which the excess aggregate
contributions were made and no later than the close of the plan year following
the plan year for which such excess aggregate contributions were made. The
provisions of this subsection 8.12 shall be deemed to be satisfied with respect
to employer matched contributions (and such contributions shall not be taken
into

                                        19
<PAGE>

account for purposes of applying the foregoing provisions of this
subsection 8.12) for any plan year if the requirements of section 401(m)(11) of
the code are satisfied.

8.13 Multiple Use of Alternative Limitation. Notwithstanding any other provision
of this Section 8, if the 1.25 factor in sections 401(k)(3)(A)(ii) and
401(m)(2)(A) of the code are both exceeded for a plan year, the sum of the
highly compensated group deferral percentage and the highly compensated group
contribution percentage may not exceed the aggregate limit (as defined in Treas.
Reg. Section 1.401(m)-2(b)(3). If the aggregate limit is exceeded, the leveling
method of correction prescribed in subsection 8.12 shall be continued until the
limitation set forth in this subsection 8.13 is satisfied.

8.14  Highly Compensated Employee.  An employee shall be "highly
compensated" for any plan year if:

(a)        he was at any time during the plan year or the preceding plan year a
           5-percent owner (as defined in section 416 of the code) of an
           employer or an affiliate; or

(b)        during the preceding plan year, he received section 415 compensation
           in excess of $80,000 (indexed for cost-of-living adjustments under
           section 415(d) of the code, as provided in section 414(q) of the
           code).

A former employee of the company or any affiliate who was a highly compensated
employee when he separated from service with all affiliates or at any time after
attaining age 55 shall be treated as a highly compensated employee to the extent
required under section 414(q) of the code.

8.15 Separate Testing of ESOP and Non-ESOP Portion of the Plan. Notwithstanding
the foregoing provisions of this Section 8, contributions to the ESOP and
contributions to the non-ESOP portion of the plan, respectively, for any plan
year, shall be tested separately, including, but not limited to, for purposes of
subsections 8.8 (relating to section 401(k)(3) testing), 8.10 (relating to
section 401(m)(2) testing) and subsection 8.13 (relating to multiple use of the
alternative limitation), and, to the extent applicable, any excess contributions
shall be corrected separately, subject to the following:

(a)        A participant contribution or an employer contribution to the plan
           for any plan year shall be considered to be a contribution to the
           ESOP for that year if, pursuant to subsection 6.2, it is initially
           invested in the Nicor Stock Fund, even if such contribution is
           subsequently transferred to another investment fund during or after
           that plan year pursuant to subsection 6.3.

(b)        A participant contribution or an employer contribution to
           the plan for any plan year shall be considered to be a
           contribution to the non-ESOP portion of the plan for
           that year if, pursuant to subsection 6.2, it is
           initially invested in an investment fund other than the
           Nicor Stock Fund, even if it is subsequently
           transferred to the Nicor Stock Fund during or after
           that plan year pursuant to subsection 6.3.

(c)        For purposes of section 410(b) and 401(a)(4) of the code, the
           employer profit sharing contribution to the plan for any plan year
           shall be considered to be a

                                        20
<PAGE>

           contribution for the non-ESOP portion of
           the plan for that year, even if it is subsequently transferred to the
           ESOP pursuant to an election described in subsection 6.3.

(d)        Amounts which, subsequent to their initial contribution and
           investment, are transferred among the investment funds pursuant to an
           election described in subsection 6.3 shall not be treated as a
           contribution to the ESOP or the non-ESOP portion of the plan for
           purposes of this Section 8 or section 410(b) or 401(a)(4) of the
           code.

(e)        To the extent applicable, separate deferral percentages and
           separate contribution percentages shall be determined
           for each eligible employee with respect to each of the
           ESOP and the non-ESOP portion of the plan.  For this
           purpose, an employee who is eligible to contribute to
           the plan at any time during a plan year shall be
           considered to be an eligible employee with respect to
           both the ESOP and the non-ESOP portion of the plan for
           that plan year, regardless of whether the participant
           actually elects to make a contribution.

(f)        An employee who is eligible to receive an allocation of an employer
           profit sharing contribution for a plan year shall be considered to be
           an eligible employee with respect to both the ESOP and the non-ESOP
           portion of the plan for that plan year.

(g)        In the event that the highly compensated group deferral
           percentage, or, to the extent applicable, the highly
           compensated group contribution percentage or the
           alternative limitation, each determined separately with
           respect to the ESOP and the non-ESOP portion of the
           plan (and, to the extent applicable, determined
           separately with respect to the eligible employees who
           are members of a bargaining unit and the eligible
           employees who are not members of a collective
           bargaining unit), exceed the limitations of subsection
           8.9, 8.11, or 8.13, respectively, distributions
           required to correct any such excess with respect to the
           ESOP shall be made first from the applicable accounts
           of the participant that, at the time of the corrective
           distribution, are invested in the Nicor Stock Fund, and
           then, to the extent necessary to satisfy any required
           correction, shall be made, pro rata, from the
           applicable accounts of the participant other than those
           invested in the Nicor Stock Fund.  To the extent that
           any such excess contributions occur with respect to the
           non-ESOP portion of the plan, distributions required to
           correct such excess shall be made first from the
           applicable accounts (other than those invested in the
           Loan Fund or the Nicor Stock Fund) in which the
           participant's accounts are invested at the time of the
           corrective distribution, pro rata, and then, if
           necessary to satisfy any such required correction, from
           the applicable accounts of the participant that are
           invested in the Nicor Stock Fund.

(h)        In the event that a correction is required under subsections 8.6
           (relating to excess annual additions) or 8.8 (correction of excess
           deferrals), any such corrective distribution shall be made, pro rata,
           from the investment funds (other than the

                                        21
<PAGE>

           Loan Fund) in which the applicable account is invested at the time
           of such corrective distribution.

(i)        For purposes of determining whether the requirements of subsections
           401(k)(12) or 401(m)(11) of the code are satisfied for any plan year,
           employer matched contributions made with respect to the ESOP and the
           non-ESOP portion of the plan shall be aggregated and treated as
           provided under the same plan.

SECTION 9.
                                Termination Dates

      A participant's "termination date" will be the date on which his
employment with the employers and the affiliates is terminated because of the
first to occur of the following events:

(a)        Retirement. The participant terminates employment with the employers
           and the affiliates on or after the date on which he attains age 55
           and completes at least 10 years of service.

(b)        Death. The participant's death.

(c)        Vested Resignation or Dismissal. The participant resigns or is
           dismissed from the employ of the employers and the affiliates before
           retirement in accordance with paragraph (a) next above but after
           completing at least 5 years of service.

(d)        Non-Vested Resignation or Dismissal. The participant resigns or is
           dismissed from the employ of the employers and the affiliates before
           retirement in accordance with paragraph (a) next above and prior to
           completing at least 5 years of service.

Notwithstanding the foregoing provisions of this Section 9, a participant shall
at all times have a nonforfeitable interest in his employee contribution
subaccounts, regardless of the number of his years of service.

SECTION 10.

                                  Distributions

10.1 Fully Vested Benefits. Subject to the provisions of subsection 10.8, if a
participant's termination date occurs under paragraph 9(a), 9(b) or 9(c), the
balances in his accounts as at his distribution date, determined after all
adjustments then required under the plan have been made (including adjustments
for any outstanding loan balances), will be distributed, in one of the methods
described in subsection 10.4, to or for the benefit of the participant, or in
the event of his death, to or for the benefit of his beneficiary determined in
accordance with the provisions of subsection 10.11. For purposes of this
subsection and the following provisions of the plan, the term "distribution
date" means the date as of which distribution of a participant's benefits
commences in accordance with the provisions of subsection 10.8.

                                        22
<PAGE>

10.2 Benefits on Non-Vested Resignation or Dismissal. Subject to the following
provisions of this Section 10, if a participant's termination date occurs under
paragraph 9(d), his account balances shall be treated as follows:

(a)   The balances in his employee contribution subaccounts as at
      his distribution date (after all adjustments then
      required under the plan have been made, including
      adjustments for any loan balances), will be
      distributed, in the method described in subsection
      10.4, to him or for his benefit or, in the event of his
      death after termination of employment, to or for the
      benefit of his beneficiary, as soon as practicable
      after his distribution date.

(b)   The balance in his employer contribution subaccounts shall be
      forfeited in accordance with the following:

     (i)        if the participant receives a distribution (or deemed
                distribution as described below) of his vested
                account balances coincident with or after his
                termination date and prior to the date on which he
                incurs five consecutive one year breaks in
                service, then, as of the accounting date
                coincident with or next following the date on
                which the vested portion of his accounts are
                distributed to him, his entire balance in his
                employer contribution subaccounts (as adjusted
                through such accounting date in accordance with
                the provisions of subsection 7.1) will be
                forfeited; and

    (ii)        if the participant has not received a distribution (or deemed
                distribution as described below) of his vested account balances
                as of the date on which he incurs five consecutive one year
                breaks in service, the balance in his employer contribution
                subaccounts (as adjusted in accordance with the terms of the
                plan through the date on which he incurs five consecutive one
                year breaks in service) will be forfeited as of the date the on
                which he incurs such five consecutive one year breaks in
                service.

For purposes of this paragraph (b), if the value of the vested portion of the
participant's accounts is zero, the participant shall be deemed to have received
a distribution of the vested portion.

10.3 Restoration of Forfeitures. If a participant who terminated on a
termination date described in paragraph 9(d) and with respect to whom a
forfeiture occurred pursuant to paragraph 10.2(b) due to the distribution of the
vested portion of the participant's accounts, including any deemed distribution,
and the participant returns to the employ of an employer or affiliate prior to
incurring five consecutive one year breaks in service, the amount that was
forfeited in accordance with paragraph 10.2(b) (determined without adjustment
for earnings and losses after the forfeiture occurred but including earnings and
losses allocated to his accounts prior to the date of the forfeiture and that
were included in the amount forfeited under paragraph 10.2(b)) will be
contributed by the employers to the extent that those employers were previously
credited with the forfeitures (regardless of whether such contributions would be
deductible by the employer, or would be out of current or accumulated profits),
will be credited to the participant's employer contribution subaccount as of the
last day of the plan year in which he was reemployed, and will not be considered
an annual addition. The contributions required of an

                                        23
<PAGE>

employer for any year under the provisions of the preceding sentence shall be
reduced by the amount of any forfeitures which, under subsection 10.13, are
considered to be employer contributions required under this subsection 10.3.
An employer's contribution to be made for any plan year under this subsection
10.3 will be due on the last day of that year and, if not paid by the end of
that year, shall be payable to the trustee not later than the time prescribed
by law for filing that employer's federal income tax return for that plan year
(including any extensions thereof), without interest.

10.4 Manner of Payment. Subject to the provisions of this Section 10, a
participant's accounts shall be distributed to or for the benefit of the
participant, or in the event of his death, to or for the benefit of his
beneficiary, by payment in a lump sum; provided, however that a participant
whose termination date occurs under paragraph 9(a) and the beneficiary of a
participant whose termination date occurs under paragraph 9(a) or 9(b) may elect
distribution of the participant's account by one of the following methods:

(a)             By payment in a lump sum. OR

(b)             By payment in a series of substantially equal annual,
                semi-annual, quarterly or monthly installments over a period not
                exceeding the payee's life expectancy. OR

(c)             By purchase from the insurer and distribution to the payee of an
                annuity, subject to the following:

      (i)       Methods of payment shall be limited to (1) a single life annuity
                (as defined in subsection 10.5); (2) a joint and survivor
                annuity (as defined in subsection 10.5); (3) a single life
                annuity with a refund feature; and (4) a single life annuity
                with a fifteen year period certain feature.

     (ii)       An annuity benefit may be of the fixed or variable type under
                which annuity payments will commence as of the participant's
                distribution date. The premium paid to the insurer for an
                annuity will be charged to the participant's accounts when paid.
                The committee shall cause the annuity to be delivered to the
                person or persons entitled to payments under it in a
                nontransferable and noncommutable form.

    (iii)       Payments under the annuity shall satisfy the requirements of
                section 401(a)(9) of the code and the regulations thereunder,
                including the incidental death benefit requirement.

If a participant dies after distribution of his accounts have commenced in the
form described in paragraph (b) next above, the remaining portion of the
participant's account balances shall be distributed to or for the benefit of his
beneficiary in accordance with the distribution method in effect on the date of
the participant's death; provided, however, that the beneficiary may elect to
accelerate payment of such benefits.

10.5 Payment in and Waiver of Joint and Survivor Annuity Form and Single Life
Annuity Form. If a participant elects to have his account balances paid in
accordance with paragraph 10.4(c), his account balances shall be applied to
purchase a contract from an insurance

                                        24
<PAGE>

company providing for payment in the form
of a joint and survivor annuity (as defined below) if the participant is legally
married under the laws of any jurisdiction on his distribution date, and in the
form of a single life annuity (as described below) if the participant is
unmarried on his distribution date, subject to the following provisions of this
subsection 10.5. During an "election period" commencing no less than 30 days
after the participant receives the election information described in subsection
10.7 and no more than 90 days before the participant's distribution date, a
participant may waive payment in the joint and survivor annuity form (or single
life annuity form in the case of an unmarried participant) and elect payment in
one of the other forms permitted by subsection 10.4. If a participant is legally
married on his distribution date, then the waiver described in the preceding
sentence will be effective only with spousal consent (as described in subsection
10.17). A participant may, at any time during his election period, revoke any
prior waiver of the joint and survivor annuity form or single life annuity form,
in which case his account balances shall be paid in the form of a joint and
survivor annuity or a single life annuity, as applicable, in accordance with the
foregoing provisions of this subsection 10.5. The term "joint and survivor
annuity" means an annuity for the life of the participant with a survivor
annuity for the life of his surviving spouse which is equal to 50 percent of the
amount of the annuity payable during the joint lives of the participant and his
spouse and which is the actuarial equivalent of a single life annuity for the
life of the participant. The term "single life annuity" means an annuity payable
for the payee's lifetime only.

10.6 Payment in Form of Pre-Retirement Surviving Spouse Annuity. If a
participant dies after electing to have his account balances distributed in
accordance with paragraph 10.4(c) but prior to his distribution date, and if
such participant is legally married under the laws of any jurisdiction on the
date of his death, the entire balance in his accounts shall be applied to
purchase a contract from an insurance company providing for payment in the form
of a pre-retirement surviving spouse annuity (as described below), which
contract shall be distributed to the participant's surviving spouse. The term
"pre-retirement surviving spouse annuity" means an annuity payable to the
surviving spouse for life. Distribution of the contract providing for the
pre-retirement surviving spouse annuity shall be made, and payment under such
contract shall commence, as of the accounting date which is coincident with, or
next following the later of the participant's termination date or the 65th
anniversary date of the participant's birth; provided, however, that the
surviving spouse may elect to receive the pre-retirement surviving spouse
annuity contract, and to commence receipt of payments under such contract,
within a reasonable time following the participant's death. A participant's
surviving spouse who is eligible for a pre-retirement surviving spouse annuity
in accordance with the foregoing provisions of this subsection 10.6 may waive
payment in that form and elect payment in any form permitted by subsection 10.4
by filing an election with the committee after the participant's death.

10.7 Election Information. As soon as practicable after a participant elects to
have his account balances paid to him in accordance with paragraph 10.4(c) (but
in no event less than 30 days nor more than 90 days before the participant's
distribution date), the committee will provide the participant with election
information consisting of:

(a)        a written description of the joint and survivor annuity or single
           life annuity, as the case may be, and the relative financial effect
           of payment of his account balances in the respective form;

                                            25
<PAGE>

(b)        a notification of the right to waive payment in that form and the
           spouse's right, if applicable, with respect to that waiver;

(c)        a notification of the participant's right to rescind a prior
           revocation of distribution in the form of a joint and survivor
           annuity and the effect thereof; and

(d)        a general description of the eligibility conditions and other
           material features of the optional forms of distribution under the
           plan and information explaining the relative values of such optional
           forms of distribution.

The committee may make such election information available to a participant by:

(1)        personal delivery to him;

(2)        first-class mail, postage prepaid, addressed to the participant at
           his last known address as shown on the employer's records; or

(3)        permanent posting on a bulletin board located at the participant's
           work site.

A participant may request, by notice filed with the committee during his
election period, an explanation, written in nontechnical language, of the terms,
conditions and financial effect (in terms of dollars per monthly benefit
payment) of payment in the joint and survivor annuity form or single life
annuity form. If not previously provided to the participant, the committee shall
provide him with such explanation within 30 days of his request by one of the
methods described in paragraphs (1) or (2) next above, and the participant's
election period will be extended, if necessary, to include the 90th day next
following the date on which he receives such explanation.

10.8 Commencement of Benefits. Benefits payable to or on account of any
participant shall commence as of any date (but not retroactively) elected by the
participant which is coincident with or next following the later of the date on
which the participant attains age 65 years or his termination date, subject to
the following:

(a)        Except as otherwise provided by the following provisions of this
           subsection 10.8, distribution of a participant's account balances
           shall commence no later than the sixtieth day after the last day of
           the plan year during which the participant attains age 65 years or,
           if later, during which his termination date occurs.

(b)        Subject to the following provisions of this subsection 10.8,
           a participant may elect to have distribution of his
           account balances commence in the form of a lump sum or
           an annuity as of any date that is coincident with or
           following his termination date and  prior to his age
           70-1/2; provided, however, that a person who was a
           participant in the plan on April 1, 1998 and whose
           termination date occurs under paragraph 9(a) may elect
           to have his account balances commence in any form of
           payment permitted under the terms of the plan; and
           provided further that, if a participant does not make
           an election in accordance with this paragraph (b)
           within 90 days of his termination date, he shall be
           deemed to have elected to defer distribution of his
           account balances until the earlier of (i) the date that he

                                        26
<PAGE>

           subsequently elects to commence distribution, or
           (ii) the date on which he attains age 70-1/2.

(c)        If a participant dies before distribution of his account balances has
           commenced (as determined in accordance with the provisions of Treas.
           Reg. Section 1.401(a)(9)-1, B-5), the participant's account balances
           will be distributed as soon as practicable following the
           participant's death, subject to the following:

          (i)   if the participant has no designated beneficiary (within the
                meaning of Treas. Reg. Section 1.401(a)(9)-1,
                provided that, for purposes of this paragraph (c),
                a trust shall not be considered a designated
                beneficiary), and if the participant's beneficiary
                determined in accordance with paragraph 10.11(d)
                is not his surviving spouse, the participant's
                entire account balances will be distributed no
                later than the December 31 of the calendar year in
                which occurs the fifth anniversary of the
                participant's death;

        (ii)    except as otherwise specifically provided in subparagraph (iii)
                next below, distribution shall commence on or before December 31
                of the year immediately following the calendar year of the
                participant's death; and

       (iii)    if the deceased participant's beneficiary is the participant's
                surviving spouse, the surviving spouse may elect to defer
                distribution of the participant's account balances but not
                beyond the later of the December 31 of the year immediately
                following the calendar year in which the participant's death
                occurs or the December 31 of the year in which the participant
                would have attained age 70-1/2 and, if the surviving spouse dies
                before distribution commences, the participant's account
                balances will be distributed in accordance with the provisions
                of this paragraph (c) (other than the provisions of this
                subparagraph (c)(iii)) as though the surviving spouse were a
                participant; provided, however, that this subparagraph
                (c)(iii) shall not apply with respect to the surviving spouse
                of a participant whose termination date occurs under paragraph
                9(c) or 9(d).

(d)        If the participant's death occurs after distribution of his
           benefits has commenced (as determined in accordance
           with the provisions of Treas. Reg. Section
           1.401(a)(9)-1, B-5), the remaining portion of his
           benefits shall be distributed to or for the benefit of
           his beneficiary in accordance with the distribution
           method in effect on the date of the participant's
           death; provided, however, that the beneficiary may
           elect to accelerate payment of such benefits.

(e)        Notwithstanding any other provision of this Section 10, if
           the value of a participant's nonforfeitable account
           balances, determined as of the accounting date that is
           coincident with or next following his termination date,
           does not exceed $5,000, the committee shall distribute
           such account balances to the participant or the
           participant's beneficiary, as the case may be, by
           payment in a lump sum as of such accounting date.

                                        27
<PAGE>

(f)        Notwithstanding any other provision herein to the contrary,
           distribution of a participant's account balances shall
           commence no later than April 1 of the calendar year
           following the calendar year in which the participant
           attains age 70-1/2 without regard to whether the
           participant's termination date has then occurred;
           provided, however, that if a participant, other than a
           5% owner, attained age 70-1/2 prior to January 1, 1988,
           distribution may be deferred until no later than
           April 1 of the calendar year following the calendar
           year in which his termination date occurs.

(g)        With respect to distributions under the plan made on or
           after January 1, 2002 for calendar years beginning on
           or after January 1, 2002, the plan will apply the
           minimum distribution requirements of section 401(a)(9)
           of the code in accordance with the regulations under
           section 401(a)(9) that were proposed on January 17,
           2001 notwithstanding any provision of the plan to the
           contrary.  The provisions of this paragraph (g) shall
           continue in effect until the last calendar year
           beginning before the effective date of the final
           regulations under section 401(a)(9) or such other date
           as may be published by the Internal Revenue Service.

10.9 Compliance With Section 401(a)(9) of the Code. The provisions of
subsections 10.4 and 10.8 are intended to reflect the requirements of section
401(a)(9) of the code, including the incidental death benefit requirements, and
such subsections shall be interpreted and administered in accordance with the
requirements of section 401(a)(9) of the code and the regulations thereunder,
which requirements shall supersede any other provision of the plan which would
otherwise be inconsistent with section 401(a)(9) of the code.

10.10 Assets to be Distributed. Except as otherwise provided in this
Section 10, amounts distributed to or on account of any participant from any
account maintained in the participant's name shall be made in cash. Prior to his
termination date or, if later, his distribution date, the participant or, in the
event of his death, his beneficiary, may elect to receive, in lieu of cash,
distribution from any account maintained in the participant's name under the
Nicor Stock Fund in the form of whole shares of Nicor stock, plus cash equal to
the fair market value of any fractional share of Nicor stock. If the trustee is
required to liquidate any account maintained in a participant's name under the
Nicor Stock Fund for any reason:

(a)        liquidation shall be made at the Nicor stock's fair market value
           determined as of the participant's distribution date; and

(b)        the amount of the cash proceeds of the liquidation shall be reduced
           by any commissions, brokerage fees and similar expenses incurred by
           the trustee as a result of the liquidation.

10.11 Designation of Beneficiary. A participant's beneficiary or
beneficiaries under the plan shall be determined in accordance with the
following provisions of this subsection 10.11:

(a)             Subject to the foregoing provisions of this Section 10, each
                participant from time to time may designate any legal or natural
                person or persons (who may be

                                        28
<PAGE>

                designated contingently or successively) to whom his benefits
                are to be paid if he dies before he receives all of his
                benefits.

(b)             Notwithstanding the foregoing provisions of this subsection
                10.11, if a participant is legally married under the laws of any
                jurisdiction on the date of his death, any designation of a
                beneficiary other than his spouse shall be effective only if
                spousal consent was obtained in accordance with subsection
                10.17.

(c)             A beneficiary designation form will be effective only when the
                signed form is filed with the committee while the participant is
                alive and will cancel all beneficiary designation forms signed
                earlier.

(d)             Except as otherwise specifically provided in this Section 10, if
                a deceased participant failed to designate a beneficiary as
                provided above, or if the beneficiary designated by a deceased
                participant dies before him, his benefits shall be paid to:

   (i)          the participant's surviving spouse; or

  (ii)          if the participant has no surviving spouse, the committee shall
                direct the trustee to pay the participant's benefits to the
                legal representative or representatives of the estate of the
                last to die of the participant or the participant's beneficiary.

           Notwithstanding the foregoing provisions of this paragraph (d), if
           the beneficiary of a participant survives the participant but dies
           prior complete payment of the participant's benefits, the remainder
           of the benefits will be paid to the beneficiary designated by the
           beneficiary in accordance with the procedures set forth in this
           subsection 10.11 or, if no such beneficiary is named, to the estate
           of the beneficiary. Benefits payable to the beneficiary of a
           beneficiary shall be paid in a lump sum.

(e)        Notwithstanding the foregoing provisions of this subsection 10.11, in
           any case in which the provisions of subsection 10.6 apply with
           respect to a deceased participant's account balances, any beneficiary
           designation form filed with the committee with respect to such
           participant shall be without effect.

(f)        The term "beneficiary" as used in the plan means the person or
           persons to whom a deceased participant's benefits are payable under
           this subsection 10.11.

10.12 Interests Not Transferable. The interests of participants and their
beneficiaries under the plan and trust agreement are not subject to the claims
of their creditors and may not be voluntarily or involuntarily assigned,
alienated or encumbered, except (i) in the case of certain qualified domestic
relations orders which relate to the provision of child support, alimony
payments or marital property rights of a spouse, child or other dependent of a
participant and which meet such other requirements as may be imposed by section
414(p) of the code or regulations issued thereunder, (ii) pursuant to a judgment
or settlement order issued after August 5, 1997 (against a participant convicted
for a crime involving the misuse of plan funds or a civil

                                        29
<PAGE>

judgment for breach of
fiduciary duty) meeting the requirements of section 401(a)(13)(C) of the code,
(iii) in the case of a tax lien obtained by the Internal Revenue Service, or
(iv) in the case of a voluntary revocable assignment to an employer provided
that such assignments do not in the aggregate exceed 10 percent of any benefit
payment and further provided that such assignments are not made for the purpose
of defraying administrative costs of the plan. Notwithstanding any other
provision of the plan to the contrary, such domestic relations order may permit
distribution of the entire portion of the vested account balance of a
participant awarded to his alternate payee, in a lump sum payment as soon as
practicable after the committee determines that such order is qualified, without
regard to whether the participant would himself be entitled under the terms of
the plan to withdraw or receive a distribution of such vested amount at that
time.

10.13 Application of Forfeitures. The balance in any employer contribution
subaccount that is forfeited by a participant in accordance with subsection 10.2
shall be adjusted in accordance with the provisions of subsection 7.1 as of the
date that the forfeiture occurs. Forfeited amounts attributable to the prior
contributions of any employer shall be considered to be contributions to the
plan by that employer, and shall be applied to reduce the amount of the
contributions otherwise required of that employer under Section 4 and subsection
10.3 until exhausted or to pay reasonable plan expenses as directed by the
committee. The portion of any forfeited amount arising under the plan during any
period which is attributable to the prior contributions of any employer shall be
that proportion of such amount which the contributions made by that employer and
credited to the employer contribution subaccounts of the participant with
respect to whom the forfeiture occurs bear to the total contributions of all
employers which were credited to such account. Notwithstanding any other
provision of the plan, in no event shall any forfeiture arising under the plan
revert to any employer for any reason.

10.14 Distributions to Persons Under Disability. Notwithstanding the
foregoing provisions of this Section 10, in the event a participant or
beneficiary is declared incompetent and the committee receives evidence
satisfactory to it that a conservator or other person legally charged with the
care of his person or of his estate has been appointed, the amount of any
benefit to which such participant or beneficiary is then entitled from the trust
fund shall be paid to such conservator or other person legally charged with the
care of his person or estate.

10.15 Absence of Guaranty. None of the trustee, the committee or the
employers in any way guarantee the trust fund from loss or depreciation. The
employers do not guarantee any payment to any person. The liability of the
trustee to make any payment is limited to the available assets of the trust
fund.

10.16 Missing Participants or Beneficiaries. Each participant and each
designated beneficiary must file with the committee from time to time in writing
his post office address and each change of post office address. Any
communication, statement or notice addressed to a participant or designated
beneficiary at his last post office address filed with the committee, or if no
address is filed with the committee then, in the case of a participant, at his
last post office address as shown on the employers' records, will be binding on
the participant and his designated beneficiary for all purposes of the plan.
None of the employers, the committee or the trustee will be required to search
for or locate a participant or designated beneficiary.

                                        30
<PAGE>

10.17 Spousal Consent. Any election by a participant under the plan which,
by its terms, requires spousal consent, shall be effective only if (i) the
participant's spouse consents in writing to such election; (ii) the consent
acknowledges the effect of the election and is witnessed by a notary public (or,
if permitted by the committee, a plan representative appointed or approved by
the committee); (iii) in the case of a spousal consent to a beneficiary
designation election, such election designates a specific beneficiary which may
not be changed without spousal consent; and (iv) in the case of a participant's
waiver of a joint and survivor annuity, if the participant's distribution date
is prior to his 65th birthday, the spouse consents to the time of payment and
the spouse consents to the optional form of payment elected by the participant;
provided, however, that unless otherwise provided by a qualified domestic
relations order within the meaning of section 414(p) of the code, no such
consent shall be required if:

(a)        the participant and his spouse are legally separated or the
           participant has been abandoned (within the meaning of local law) and
           the participant has a court order to such effect; or

(b)        it is established to the satisfaction of a plan representative
           appointed or approved by the committee that the consent of the
           participant's spouse cannot be obtained because there is no spouse,
           because the spouse cannot be located or because of such other
           circumstances as the Secretary of the Treasury may prescribe in
           regulations.

10.18 Distribution and Withdrawal Elections. Distributions and withdrawals
(other than distributions and withdrawals to which the consent requirements of
section 411(a)(11) or 417 of the code do not apply) shall be subject to the
following:

(a)        not less than 30 days nor more than 90 days before the date as of
           which such distribution is made, the participant shall be informed of
           his right to defer distribution in accordance with the provisions of
           the applicable subsection and, if applicable, shall be provided with
           a written explanation of the optional forms of benefit available to
           him under the plan;

(b)        no election to commence distribution prior to the participant's 65th
           birthday shall be effective unless it is made in writing, after the
           participant has received the notice described in paragraph (a) next
           above, and not more than 90 days before the date as of which the
           distribution is made; and

(c)        spousal consent shall be obtained to the extent required by the
           provisions of subsection 10.5.

Notwithstanding the foregoing, distributions or withdrawals may commence less
than 30 days after the participant is informed of his right to defer
distribution or withdrawal in accordance with the applicable section or
subsection if:

(1)        the participant is clearly informed that he has a right to a period
           of at least 30 days after being so informed to consider the decision
           of whether or not to elect a distribution or withdrawal (and, if
           applicable, a particular form of distribution); and

                                        31
<PAGE>

(2)        the participant, after being informed of his rights in accordance
           with subparagraph (1) next above, affirmatively elects a distribution
           or withdrawal.

10.19 Direct Rollover to an Eligible Retirement Plan. Notwithstanding any
provision of the plan to the contrary that would otherwise limit a distributee's
election under this subsection 10.19, a distributee may elect, at the time and
in the manner prescribed by the committee, to have any portion of an "eligible
rollover distribution" (as defined in section 402(c)(4) of the code) paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover. For purposes of this subsection 10.19, the following definitions shall
apply:

(a)        An "eligible retirement plan" means an individual retirement
           account described in section 408(a) of the code, an
           individual retirement annuity described in section
           408(b) of the code, an annuity plan described in
           section 403(a) of the code or a qualified trust
           described in section 401(a) of the code, that accepts
           the distributee's eligible rollover distribution;
           provided, however, in the case of an eligible rollover
           distribution to the surviving spouse, an eligible
           retirement plan is an individual retirement account or
           individual retirement annuity.

(b)        A "distributee" means an employee or former employee and the
           employee's or former employee's surviving spouse and the employee's
           or former employee's spouse or former spouse who is the alternate
           payee under a qualified domestic relations order as defined in
           section 414(p) of the code.

(c)        A "direct rollover to an eligible retirement plan" means a payment by
           the plan to the eligible retirement plan specified by the
           distributee.

10.20 Distribution Only Upon Separation From Service. Notwithstanding any
other provision of the plan to the contrary, a participant may not commence
distribution of his employee tax-deferred contribution account pursuant to this
Section 10, even though he has otherwise had a termination date under Section 9,
unless or until he also has a "separation from service" within the meaning of
section 401(k)(2)(B) of the code. The foregoing restriction shall not apply,
however, if the participant's termination date occurs in connection with the
sale by an employer to an unrelated corporation of at least 85 percent of the
assets of a trade or business, or the sale of its interest in a subsidiary to an
unrelated entity, provided (a) the participant remains employed in such trade or
business or by such subsidiary after the sale, (b) the employer continues to
maintain the plan after the sale, (c) no transfer of the participant's accounts
occurs or is scheduled to occur after the sale pursuant to subsection 14.3 to a
plan of such subsidiary or of the purchaser of such assets (or any entity
affiliated therewith), and (d) the participant receives distribution of his
account balances (less any outstanding loan balances) under the plan in a lump
sum by the end of the second calendar year after the year in which the sale
occurs.

10.21 Transfers to SIP. If an employee of an employer:

(a)        ceases to satisfy the requirements of paragraph 2.1(b);

(b)        continues to be employed by an employer or an affiliate; and

                                        32
<PAGE>

(c)        coincident with his failure to satisfy the requirements of paragraph
           2.1(b), he becomes eligible to participate in the SIP;

then his account balances under the plan, determined as of the date described in
paragraph (a) next above, shall be transferred to the corresponding accounts
under the SIP and, for periods thereafter, he shall cease to be a participant in
the plan and shall be a participant in the SIP, subject to the terms and
conditions of the SIP.

SECTION 11.

                              Withdrawals and Loans

11.1 Pre-Termination Withdrawals From Employee After-tax Account. Subject to the
provisions of subsections 11.5 and 11.6, as of any date but not more frequently
than twice during any calendar year, a participant who is employed by an
employer or an affiliate may withdraw from his employee after-tax account an
amount that is not less than $200 and not greater than the amount credited to
his employee after-tax account (less any outstanding loan balance); provided,
however, that a participant who has attained age 59-1/2 as of the effective date
of the withdrawal may withdraw an amount that does not exceed the vested balance
of his employee after-tax account.

11.2 Pre-Termination Withdrawals From Employee Tax-deferred Account. Subject to
the provisions of subsections 11.5, 11.6 and 11.7, as of any date a participant
who is employed by an employer or affiliate may, by showing of hardship (as
described in subsection 11.3), withdraw from his employee tax-deferred account
an amount that is not less than $1,000 and not more than the least of:

(a)        an amount equal to:

     (i)   the amount credited to the participant's employee tax-deferred
           contribution subaccount, reduced by

    (ii)   the sum of the amount previously withdrawn from the participant's
           employee tax-deferred subaccount after December 31, 1988 (including
           any outstanding loan balance), plus any earnings credited to the
           participant's employee tax-deferred subaccount for periods after
           December 31, 1988.

(b)        the amount credited to the participant's employee tax-deferred
           contribution subaccount; or

(c)        the amount necessary to satisfy such hardship in accordance with
           subsection 11.3.

Subject to the provisions of subsection 11.7, as of any date a participant who
is employed by an employer or an affiliate and who has attained age 59-1/2 as of
the effective date of the withdrawal may withdraw an amount that does not exceed
the vested balance (less any outstanding loan balance) of his employee
tax-deferred contribution subaccount.

                                        33
<PAGE>

11.3 Hardship. A withdrawal shall be made on account of "hardship" if the
requirements of paragraphs (a) and (b) next below are met:

(a)        The withdrawal is requested because of the participant's immediate
           and heavy financial need on account of:

    (i)    uninsured, deductible medical expenses incurred by the participant,
           the participant's spouse or any dependent of the participant (as
           defined in section 152 of the code);

   (ii)    the purchase (excluding mortgage payments) of a principal residence
           of the participant;

  (iii)    payment of tuition for up to the next 12 months of post-secondary
           education for the participant, or his spouse or children (including
           step- children); or

   (iv)    the need to prevent (1) the eviction of the participant from his
           principal residence or (2) foreclosure on the mortgage of the
           participant's principal residence.

(b)        The withdrawal is necessary to satisfy the immediate and
           heavy financial need of the participant.  A withdrawal
           will be considered necessary under this paragraph (b)
           if the amount of the withdrawal does not exceed the
           amount required to relieve the financial need,
           including any federal, state or local income taxes or
           penalties reasonably anticipated to be incurred by the
           participant on account of the withdrawal, and if the
           participant signs a statement indicating that he has no
           other reasonable means of satisfying the immediate and
           heavy financial need.

11.4 Loans. A participant who is an employee of an employer or an affiliate or
who is otherwise required to be given the opportunity to borrow under applicable
regulations may, by following such procedures as the committee may from time to
time establish, request a loan to be made to him from his accounts, subject to
the following:

(a)       No loan shall be made to a participant if, immediately after
          such loan, the sum of the outstanding balances (including
          principal and interest) of all loans made to him under this plan
          and under any other qualified retirement plans made by
          affiliates would exceed $50,000, reduced by the excess, if any,
          of:

     (i)        the highest outstanding balance of all loans to the participant
                from the plans during the one-year period ending on the day
                immediately before the date on which the loan is made; over

    (ii)        the outstanding balance of loans from the plans to the
                participant on the date on which such loan is made;

           and no loan shall be made to a participant if the aggregate amount of
           that loan and the outstanding balance of any other loans to the
           participant would exceed one-
                                        34
<PAGE>


           half of the total vested balance of the participant's account
           balances under the plan as of the date the loan is made.

(b)        Each loan to a participant shall be charged against the
           participant's accounts in the following order: (i)
           rollover subaccount, (ii) employee tax-deferred
           contribution subaccount (non-ESOP), (iii) employee
           tax-deferred contribution subaccount (ESOP), (iv)
           tax-deferred employer matched contribution subaccount
           (non-ESOP), (v) employee after-tax employer matched
           subaccount (non-ESOP), (vi) tax-deferred employer
           matched contribution subaccount (ESOP), (vii) employee
           after-tax employer matched contribution subaccount
           (ESOP), (viii) employee after-tax contribution
           subaccount (non-ESOP), and (ix) employee after-tax
           contribution subaccount (ESOP).  Each loan shall be
           charged against each investment fund in which his
           accounts are invested in the same ratio as the value of
           his interest in such fund with respect to the
           applicable account bears to the total of all his
           interest in that account.

(c)        Each loan shall be evidenced by a written note providing for:

   (i)     a reasonable repayment period, in whole months, of not less than six
           months nor more than 60 months from the date of the loan (including
           loans used to acquire a dwelling unit to be used as a principal
           residence);

  (ii)     a reasonable rate of interest;

 (iii)     substantially equal payments of principal and interest over the term
           of the loan;

  (iv)     such other terms and conditions as the committee shall determine.

(d)        Only two loans may be outstanding any time.

(e)        Loans to participants shall be invested in the Loan Fund.

(f)        Payments of principal and interest to the trustee with respect to any
           loan to a participant:

   (i)     shall reduce the outstanding balance with respect to that loan;

  (ii)     shall reduce the balance of the Loan Fund reflecting the loan;

 (iii)     shall be credited to the participant's accounts in the following
           order: (A) employee after-tax contribution subaccount (non-ESOP), (B)
           employee after-tax contribution subaccount (ESOP), (C) employee
           after-tax employer matched contribution subaccount (non-ESOP), (D)
           tax-deferred employer matched contribution subaccount (non-ESOP), (E)
           employee after-tax employer matched contribution subaccount (ESOP),
           (F) tax-deferred employer matched contribution subaccount (ESOP), (G)
           employee tax-deferred contribution subaccount (non-ESOP), (H)

                                        35
<PAGE>

           employee tax-deferred contribution subaccount (ESOP), and (I)
           rollover subaccount; and

  (iv)     shall be invested in the investment funds (other than the Loan Fund)
           in accordance with his current investment directions.

(g)        A participant's obligation to repay a loan (or loans) from the plan
           shall be secured by the participant's vested interest in the plan.

(h)        The committee may, from time to time, establish loan origination fees
           and loan administrative fees which may be charged to the
           participant's accounts under the plan, pro rata.

(i)        Loan repayments may only be made by payroll deductions; provided,
           however, that if a participant is on an approved leave of absence,
           loan repayments, may be made from certified checks. No partial loan
           repayments may be made but a loan may be repaid in full at any time.

(j)        Any loan to a participant shall become immediately due and
           payable upon the earlier of (i) 90 days after the end
           of the month following the month in which the
           participant's employment with the employers and
           affiliates terminates, unless such participant's
           accounts are scheduled to be transferred to another
           qualified plan, including transfers under subsection
           10.19 of the plan, (ii) the end of the sixth pay period
           after a payment is due and remains unpaid.
           Notwithstanding the foregoing, any loan to a
           participant made after December 31, 2001 shall become
           immediately due and payable as of the last day of the
           calendar quarter following the calendar quarter in
           which any required installment was due and remains
           unpaid.  Notwithstanding any other provision of the
           plan to the contrary, if the outstanding balance of
           principal and interest on any loan is not paid at the
           expiration of its term or upon acceleration in
           accordance with the foregoing provisions of this
           paragraph (j), a default shall occur and the trustee
           shall apply all or a portion of the participant's
           vested interest in the plan in satisfaction of such
           outstanding obligation, but only to the extent such
           vested interest (or portion thereof) is then
           distributable under applicable provisions of the code
           and under the terms of the plan.  If necessary to
           satisfy the entire outstanding obligation, such
           application of the participant's vested interest may be
           executed in a series of actions as amounts credited to
           the participant's account become distributable.

(k)        If distribution is to be made to a beneficiary in accordance with
           subsection 10.6, any outstanding loan shall be canceled and the
           unpaid balance of the loan, together with any accrued interest
           thereon, shall be treated as a distribution to or on behalf of the
           participant immediately prior to commencement of distribution to the
           beneficiary.

(l)        The committee shall establish uniform procedures for applying for a
           loan, evaluating loan applications, and setting reasonable rates of
           interest, which shall be communicated to participants in writing.

                                        36
<PAGE>

11.5 Partial Withdrawals. Subject to the provisions of subsections 11.6 and
11.7, as of any date a participant whose termination date has occurred under
paragraph 9(a) or 9(b) and whose account balances have not been completely
distributed pursuant to Section 10, and the beneficiary of any such participant
who is deceased, may elect to withdraw an amount that is not less than $200 and
not greater than the amount credited to the participant's accounts as of the
next preceding accounting date, subject to the following:

(a)        neither a participant whose termination date occurs under paragraph
           9(c) or (d), nor the beneficiary of such a participant, may elect a
           withdrawal under this subsection 11.5; and

(b)        not more than twelve withdrawals may be made with respect to any
           participant under this subsection 11.5 during any 12 month period and
           any withdrawal under subsections 11.1 or 11.2 shall be deemed to be a
           partial withdrawal under this subsection 11.5 for purposes of the
           limitation in this paragraph (b).

11.6 Order of Pre-Termination Withdrawals From Accounts. A participant may not
withdraw any amount from his employee tax-deferred account in accordance with
the provisions of subsection 11.2 as of any date unless he has withdrawn all
amounts which could then be withdrawn by him in accordance with subsection 11.1.

11.7 Order of Post-Termination Withdrawals From Accounts. Withdrawals in
accordance with the provisions of subsection 11.5 shall be made in the following
order:

(a)        first, from the participant's employee after-tax contribution
           subaccount until exhausted;

(b)        next, from the participant's employee after-tax employer matched
           contribution subaccount until exhausted;

(c)        next, from the participant's employee tax-deferred contribution
           subaccount until exhausted;

(d)        next, from the participant's tax-deferred employer matched
           contribution subaccount until exhausted; and

(e)        finally, from the participant's profit sharing account until
           exhausted.

Notwithstanding the foregoing provisions of this subsection 11.7, withdrawals in
accordance with the provisions of subsection 11.5 by a participant or
beneficiary who is receiving benefits in the form described in subsection
10.4(b) shall be made, pro rata, from the participant's accounts.

11.8 Order of Withdrawal From Investment Funds. A withdrawal from a
participant's accounts in accordance with this Section 11 shall be made, in
cash, pro rata from the investment funds in which his accounts are invested. The
amount of any withdrawal from the Nicor Stock Fund shall be determined on the
basis of the fair market value of the shares of Nicor stock on his distribution
date.

                                        37
<PAGE>

11.9 No Make-up of Withdrawals. A participant may not make-up or repay any
amount withdrawn in accordance with the provisions of this Section 11.

SECTION 12.

                                   Nicor Stock

12.1 Purchase of Nicor Stock. The trustee may purchase shares of Nicor stock in
the open market, through a dividend reinvestment plan or by private purchase;
provided, however, that no private purchase of shares of Nicor stock shall be
made at a price that is greater per share than the last preceding sale price for
shares of Nicor stock as reported on the New York Stock Exchange Composite List.

12.2 Voting Nicor Stock. Voting rights with respect to shares of Nicor stock
held in the Nicor Stock Fund shall be exercised in accordance with the
provisions of Supplement A.

SECTION 13.

                                  The Committee

13.1 Membership. The committee referred to in subsection 1.2 shall consist of
one or more persons appointed by the Board of Directors of the company. The
members of the committee shall be the "named fiduciaries" (as described in
section 402 of ERISA) under the plan. Except as otherwise specifically provided
in this Section 13, in controlling and managing the operation and administration
of the plan, the committee shall act by the concurrence of a majority of its
then members by meeting or by writing without a meeting. The committee, by
unanimous written consent, may authorize any one of its members to execute any
document, instrument or direction on its behalf. A written statement by a
majority of the committee members or by an authorized committee member shall be
conclusive in favor of any person (including the trustee) acting in reliance
thereon.

13.2 Rights, Powers and Duties. The committee shall have such authority as may
be necessary to discharge its responsibilities under the plan, including the
following powers, rights and duties:

(a)        To select a chairman who shall be a member of the committee.

(b)        To select a secretary who may, but need not, be a member of the
           committee.

(c)        To conclusively interpret and construe the provisions of the plan and
           to remedy ambiguities, inconsistencies and omissions of whatever kind
           or nature.

(d)        To adopt, and apply in a uniform and nondiscriminatory manner to all
           persons similarly situated, such rules of procedure and regulations
           as, in its opinion, may be necessary for the proper and efficient
           administration of the plan, and as are consistent with the provisions
           of the plan.

                                        38
<PAGE>

(e)        To conclusively determine all questions arising under the plan,
           including the power to determine rights or eligibility of employees
           or former employees, and the respective benefits of participants and
           others entitled thereto.

(f)        To maintain and keep adequate records concerning the plan and
           concerning its proceedings and acts in such form and detail as the
           committee may decide.

(g)        To direct all benefit payments under the plan.

(h)        To furnish the employers with such information with respect to the
           plan as may be required by them for tax or other purposes.

(i)        By unanimous action of the members then acting, to employ agents and
           counsel (who also may be employed by the employers or the trustee)
           and to delegate to them, in writing, such powers as the committee
           considers desirable.

(j)        To act as the "plan administrator" (as defined in section 414(g) of
           the code) for purposes of establishing and implementing procedures to
           determine the qualified status of domestic relations orders (in
           accordance with the requirements of section 414(p) of the code) and
           to administer distributions under such qualified orders.

13.3 Information to be Furnished to Committee. Each employer shall furnish the
committee such data and information as the committee may require. As a condition
of receipt of benefits under the plan, the person making claim therefor must
furnish to the committee such documents, evidence, data or other information as
the committee considers desirable to determine eligibility for such benefits.

13.4 Committee's Decision Final. To the extent permitted by law, any
interpretation of the plan and any decision on any matter within the discretion
of the committee made by the committee in good faith is binding on all persons.
A misstatement or other mistake of fact shall be corrected when it becomes
known, and the committee shall make such adjustment on account thereof as it
considers equitable and practicable. Notwithstanding any other provision of the
plan to the contrary, benefits under the plan will be paid only if the
committee, in its discretion, determines that the applicant is entitled to them
pursuant to the terms of the plan.

13.5 Remuneration and Expenses. No remuneration shall be paid to any committee
member as such. However, the expenses of the committee members (including fees
of persons employed by them in accordance with paragraph 13.2(i)) incurred in
the performance of a committee function or the administration of the trust fund
shall be paid from the trust fund in accordance with the provisions of the trust
agreement to the extent not paid by the employers.

13.6 Indemnification of the Committee. The committee and the individual members
thereof shall be indemnified by the company against any and all liabilities,
losses, costs, and expenses (including legal fees and expenses) of whatsoever
kind and nature which may be imposed on, incurred by or asserted against the
committee or the members by reason of the performance of a committee function if
the committee or such members did not act dishonestly or in willful violation of
the law or regulation under which such liability, loss, cost or expense arises.

                                        39
<PAGE>

13.7 Exercise of Committee's Duties. Notwithstanding any other provisions of the
plan, the committee shall discharge its duties hereunder solely in the interests
of the plan participants and other persons entitled to benefits under the plan,
and:

(a)        for the exclusive purpose of providing benefits to plan participants
           and other persons entitled to benefits thereunder; and

(b)        with the care, skill, prudence and diligence under the circumstances
           then prevailing that a prudent man acting in a like capacity and
           familiar with such matters would use in the conduct of an enterprise
           of a like character and with like aims.

13.8 Resignation or Removal of Committee Member. A committee member may resign
at any time by thirty days advance written notice to the company, the trustee
and the other committee members. The Board of Directors of the company may
remove a committee member by giving advance written notice to him, the trustee
and the other committee members.

13.9 Appointment of Successor Committee Members. The Board of Directors of the
company may fill any vacancy in the membership of the committee and shall give
prompt written notice thereof to the other committee members, the other
employers and the trustee. While there is a vacancy in the membership of the
committee, the remaining committee members shall have the same powers as the
full committee until the vacancy is filled.

13.10 Interested Committee Member. A member of the committee may not decide
or determine any matter or question concerning his own benefits under the plan
unless such decision could be made by him under the plan if he were not a member
of the committee.

SECTION 14.

                            Amendment and Termination

14.1 Amendment. While the employers expect and intend to continue the plan, the
company must reserve and reserves the right, subject to the provisions of the
trust, to amend the plan at any time, except that no amendment shall reduce a
participant's benefits to less than the amount he would be entitled to receive
if he had resigned from the employ of all of the employers and the affiliates on
the date of the amendment.

14.2 Termination. The plan, as applied to all employers, will terminate on the
date it is terminated by the company, provided that written notice is provided
to the trustee, the committee, and the other employers. The plan, as applied to
any employer, will terminate on the first to occur of the following:

(a)        the date it is terminated by that employer if thirty days advance
           written notice of the termination is given to the trustee, the
           committee and the other employers;

(b)        the date that employer completely discontinues its contributions
           under the plan;

(c)        the date that employer is judicially declared bankrupt or insolvent;
           or

                                        40
<PAGE>

(d)        the dissolution, merger, consolidation or reorganization of
           that employer, or the sale by that employer of all or
           substantially all of its assets, except that, subject
           to the provisions of subsection 14.3, with the consent
           of the company, in any such event arrangements may be
           made whereby the plan will be continued by any
           successor to that employer or any purchaser of all or
           substantially all of that employer's assets, in which
           case the successor or purchaser will be substituted for
           that employer under the plan.

14.3 Merger and Consolidation of Plan, Transfer of Plan Assets. In the case of
any merger or consolidation with, or transfer of assets and liabilities to, any
other plan, provisions shall be made so that each affected participant in the
plan on the date thereof (if the plan, as applied to his employer, then
terminated) would receive a benefit immediately after the merger, consolidation
or transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately prior to the merger, consolidation or transfer
if the plan, as applied to his employer, had then terminated.

14.4 Vesting and Distribution on Termination and Partial Termination. On
termination of the plan in accordance with subsection 14.2 or on partial
termination of the plan, as applied to any employer, by operation of law, the
date of termination or partial termination, as the case may be, will be an
accounting date and, after all adjustments then required have been made, each
affected participant's benefits will be nonforfeitable. If, on termination of
the plan as applied to any employer, a participant remains an employee of the
employers, or an affiliate, the amount of his benefits shall be retained in the
trust until after his termination of employment with all of the employers and
affiliates and shall be paid to him in accordance with the provisions of Section
10. The benefits payable to a participant whose employment with all of the
employers and affiliates is terminated coincident with the termination of the
plan as applied to his then employer (and the benefits payable to an affected
participant on partial termination of the plan) shall be paid to him in
accordance with the provisions of Section 10. All appropriate accounting
provisions of the plan will continue to apply until the benefits of all affected
participants have been distributed to them.

14.5 Notice of Amendment, Termination or Partial Termination. Affected persons
will be notified of an amendment, termination or partial termination of the plan
as required by law.
                                   41
<PAGE>


                                  SUPPLEMENT A
                                       TO
                              NICOR GAS THRIFT PLAN
                                (ESOP Provisions)

Effective Date  A-1. The effective date of this Supplement A to the Nicor
                Gas Thrift Plan and the ESOP to which it relates is July 1,
                1997.

Purpose         A-2. The purpose of this Supplement A is to set forth the
                provisions of the plan applicable to the ESOP and not set forth
                elsewhere in the plan.

Definitions     A-3. Unless the context clearly implies or indicates the
                contrary, a word, term or phrase used or defined in the plan is
                similarly used or defined for purposes of this Supplement A.

Allocation of
Nicor Stock     A-4.  As of each accounting date coincident with
                or following theeffective date of the ESOP, shares
                of Nicor stock held in the ESOP shall be allocated
                as set forth in subsection 7.1 to the accounts of
                participants who have elected to invest all or a
                portion of their accounts in the Nicor Stock Fund
                pursuant to an election described in subsection
                6.2.

Distribution of
Cash Dividends  A-5. An amount equal to the cash dividends paid on or
                after the effective date of the ESOP on shares of Nicor stock
                held by the trustee in the Nicor Stock Fund shall be
                distributed, in cash, as soon as practicable after the
                accounting date ending the accounting period in which the
                dividends are paid to the trustee (but in no event more than 90
                days after the close of the plan year in which the dividends are
                paid to the trustee) to participants (or, in the event of the
                participant's death, the participant's beneficiary) in
                accordance with the provisions of subsection 7.1. Distributions
                under this subsection A-5 shall not require the consent of the
                participant or any other person, shall not be subject to the
                restrictions on pre-termination withdrawals described in Section
                ll, and shall not be considered an eligible rollover
                distribution for purposes of subsection 10.19.

Distributions and
Withdrawals     A-6.  Distributions or withdrawals in accordance
                with Section 10 or 11 to or on behalf of any
                participant or beneficiary from the Nicor Stock
                Fund shall be made in cash, except that the
                participant (or, in the event of his death, his
                beneficiary) may elect to receive, in lieu of
                cash, the distribution or withdrawal from his
                account invested in such investment fund in the
                form of whole shares of Nicor stock and cash equal
                to the fair market value of any fractional share
                of Nicor stock.  The amount of cash and the number
                of whole shares of Nicor stock so distributed or
                withdrawn shall be determined in accordance with
                the applicable provisions of subsections 7.1 and
                10.10 of the plan, treating the accounting date as
                of which such distribution or withdrawal is made
                as the distribution date for this purpose.

Diversification A-7. Consistent with the diversification requirements of section
                401(a)(28) of the code, a participant may elect to diversify all
                or a portion of his account which is invested in the Nicor Stock
                Fund by filing an investment election pursuant to subsection 6.3
                of the plan.

Put Options     A-8.  If Nicor stock held under the ESOP is not
                readily tradeable on an established securities
                market (within the meaning of section 409(h)(1)(B)
                of the code), any participant or beneficiary who
                is entitled to a distribution of such shares from
                the plan shall have a right to require the company
                to repurchase such shares in accordance with
                section 409(h)(1)(B) of the code.  Nicor stock
                held under the ESOP shall not be subject to a put,
                call, or other option, or a buy-sell or similar
                arrangement either while held by the plan or when
                distributed to or on account of a participant,
                whether or not the plan is then an employee stock
                ownership plan.

ESOP Loan       A-9.  If the plan is amended to cause it to enter
                into an ESOP Loan, as defined at Treas. Reg.
                Section 54.4975-7, any assets acquired by the plan
                with the proceeds of an ESOP Loan shall be added
                to and maintained in a suspense account in
                accordance with Treas. Reg. Sections
                54.4975-7(b)(8) and (15) and Section 54.4975-11.

Appraiser       A-10. If at any time the Nicor stock held by the plan is not
                readily tradeable on an established securities market, all
                valuations of such stock with respect to activities carried on
                by the plan will be made by an independent appraiser meeting the
                requirements of section 401(a)(28) of the code.

Voting of
Nicor Stock     A-11. To the extent consistent with the trustee's
                fiduciary obligations under ERISA, the Nicor stock held in the
                Nicor Stock Fund shall be voted by the trustee as follows:

                a)   Within a reasonable time before each annual or special
                     meeting of shareholders of Nicor, the company
                     shall cause to be provided to each
                     participant whose accounts are invested in
                     the Nicor Stock Fund, a copy of the proxy
                     soliciting material for the meeting, together
                     with a form requesting instructions to the
                     trustee as to how to vote the number of whole
                     shares of Nicor stock credited to such
                     participant's accounts.  The voting
                     instructions received by the trustee shall be
                     held by it in confidence.

               (b)   Upon timely receipt of such instructions, the trustee shall
                     vote the shares of Nicor stock for which it
                     does not receive voting instructions, and all
                     other shares held by the trustee in the Nicor
                     Stock Fund, in the same proportion as it
                     votes shares with respect to which it has
                     received voting instructions unless the
                     trustee determines that to do so would be
                     inconsistent with Title I of ERISA.

                                   A-1


<PAGE>

                           FIRST AMENDMENT OF
                          NICOR GAS THRIFT PLAN

      By virtue and in exercise of the amending power reserved to Northern
Illinois Gas Company (the "Company") by the terms of the Nicor Gas Thrift Plan
(the "Plan") and pursuant to the authority delegated to the undersigned officers
of the Company adopted on March 10, 1982, the Plan is hereby amended effective
as of January 1, 2001, in the following particulars:

1. By substituting the following for subsection 8.9 of the Plan:

      "8.9 Code Section 401(k)(3) Testing. The difference between (i) the
average of the deferral percentages (as defined below) of each eligible employee
who is highly compensated for the plan year (referred to hereinafter as the
`highly compensated group deferral percentage'), and (ii) the average of the
deferral percentages for the plan year of each eligible employee who was not
highly compensated for such plan year (referred to hereinafter as the
`non-highly compensated group deferral percentage') shall satisfy one of the
tests set forth in section 401(k)(3)(A)(ii) of the code. The `deferral
percentage' for any eligible employee for a plan year shall be determined by
dividing the amount of the employee tax-deferred contributions made with respect
to the participant for such year by his section 415 compensation for the year,
subject to the following special rules:

      (a)  the deferral percentage of an eligible employee who makes no employee
           tax-deferred contributions for the year shall be counted as zero;

      (b)  the deferral percentage for any eligible employee who is highly
           compensated and who is eligible to make elective deferrals under one
           or more other plans maintained by an employer or affiliate for a plan
           year of such other plan that ends with or within the same calendar
           year as the plan year (other than a plan or arrangement subject to
           mandatory disaggregation under applicable Treasury regulations) shall
           be determined as if all such elective deferrals were made on his
           behalf under the plan;

      (c)  excess employee tax-deferred contributions distributed to a
           participant under subsection 8.8 shall be counted in determining such
           participant's deferral percentage except in the case of a
           distribution to a non-highly compensated participant required to
           comply with section 401(a)(30) of the code; and

      (d)  in the event that this plan satisfies the requirements of sections
           401(k), 401(a)(4), or 410(b) of the code only if aggregated with one
           or more other plans having the same plan year, or if one or more
           other plans having the same plan year as this plan satisfy the
           requirements of such sections of the code only if aggregated with
           this plan, then this subsection 8.9 shall be applied as if all such
           plans were a single plan.

Application of this subsection 8.9 shall be consistent with the provisions of
section 401(k)(3) of the code and the regulations thereunder. The provisions of
this subsection 8.9 shall be deemed to be satisfied for any plan year if the
requirements of section 401(k)(12) of the code are satisfied."

2. By substituting the following for subsection 8.11 of the Plan:

      "8.11. Code Section 401(m)(2) Testing. For any plan year, the difference
between (i) the average of the contribution percentages (as defined below) of
each eligible employee who is highly compensated for the plan year (referred to
hereinafter as the `highly compensated group contribution percentage'), and (ii)
the average of the contribution percentages for the plan year of each eligible
employee who was not highly compensated for such plan year (referred to
hereinafter as the `non-highly compensated group contribution percentage') shall
satisfy one of the tests set forth in section 401(m)(2)(A) of the code. The
`contribution percentage' for any eligible employee for a plan year shall be
determined by dividing the sum of his employee after-tax contributions and the
employer matched contributions made for him for the year by his section 415
compensation for the year, subject to the following special rules:

      (a)  the contribution percentage of each eligible employee with respect to
           whom no employee after-tax contributions and employer matched
           contributions are made for the year shall be counted as zero;

      (b)  the contribution percentage for any eligible employee who is highly
           compensated and who is eligible to participate in one or more other
           qualified plans maintained by an employer or affiliate under which
           employee after-tax contributions or matching contributions may be
           made by or for him shall be determined as if all such contributions
           were made by or for him under the plan; and

      (c)  in the event that this plan satisfies the requirements of sections
           401(m), 401(a)(4), or 410(b) of the code only if aggregated with one
           or more other plans having the same plan year, or if one or more
           other plans having the same plan year as this plan satisfy the
           requirements of such sections of the code only if aggregated with
           this plan, then this subsection 8.11 shall be applied as if all such
           plans were a single plan.

Application of the provisions of this subsection 8.11 shall be consistent with
the provisions of section 401(m) of the code and the regulations thereunder. The
provisions of this subsection 8.11 shall be deemed to be satisfied with respect
to employer matched contributions (and such contributions shall not be taken
into account for purposes of applying the foregoing provisions of this
subsection 8.11) for any plan year if the requirements of section 401(m)(11) of
the code are satisfied."

      IN WITNESS WHEREOF, the undersigned officer has caused these presents to
be signed on behalf of the Company this 13 day of March, 2002.



                                   Northern Illinois Gas Company

                                   By:  /s/ Claudia J. Colalillo
                                  Its:  Senior Vice President
                                        Human Resources & Customer Care


<PAGE>


                           SECOND AMENDMENT OF
                          NICOR GAS THRIFT PLAN

By virtue and in exercise of the amending power reserved to Northern Illinois
Gas Company (the "Company") by the terms of the Nicor Gas Thrift Plan (the
"Plan") and pursuant to the authority delegated to the undersigned officers of
the Company adopted on March 10, 1982, the Plan is hereby amended in the
following particulars, all effective as of June 1, 2002 unless otherwise
specified:

1. By substituting the following for subsections 10.4, 10.5, 10.6 and 10.7,
respectively, of the Plan:

      "10.4. Manner of Payment. Subject to the provisions of this Section 10, a
participant's accounts shall be distributed to or for the benefit of the
participant, or in the event of his death, to or for the benefit of his
beneficiary, by payment in a lump sum; provided, however that a participant
whose termination date occurs under paragraph 9(a) and the beneficiary of a
participant whose termination date occurs under paragraph 9(a) or 9(b) may elect
distribution of the participant's account by one of the following methods:

      (a)  By payment in a lump sum. OR

      (b)  By payment in a series of substantially equal annual, semi-annual,
           quarterly or monthly installments over a period not exceeding the
           payee's life expectancy. OR

      (c)  For distributions with a distribution date prior to June 1, 2002, by
           purchase from the insurer and distribution to the payee of an
           annuity, subject to the following:

(i)   Methods of payment shall be limited to (1) a single life annuity (as
      defined in subsection 10.5); (2) a joint and survivor annuity (as defined
      in subsection 10.5); (3) a single life annuity with a refund feature; and
      (4) a single life annuity with a fifteen year period certain feature.

(ii)  An annuity benefit may be of the fixed or variable type under which
      annuity payments will commence as of the participant's distribution date.
      The premium paid to the insurer for an annuity will be charged to the
      participant's accounts when paid. The committee shall cause the annuity to
      be delivered to the person or persons entitled to payments under it in a
      nontransferable and noncommutable form.

(iii) Payments under the annuity shall satisfy the requirements of section
      401(a)(9) of the code and the regulations thereunder, including the
      incidental death benefit requirement.

If a participant dies after distribution of his accounts have commenced in the
form described in paragraph (b) next above, the remaining portion of the
participant's account balances shall be distributed to or for the benefit of his
beneficiary in accordance with the distribution method in effect on the date of
the participant's death; provided, however, that the beneficiary may elect to
accelerate payment of such benefits.

      10.5. Payment in and Waiver of Joint and Survivor Annuity Form and Single
           Life Annuity Form. The provisions of this subsection 10.5 shall have
           no application for distributions with a distribution date occurring
           on or after June 1, 2002. If a participant's distribution date is
           prior to June 1, 2002 and the participant elects to have his account
           balances paid in accordance with paragraph 10.4(c), his account
           balances shall be applied to purchase a contract from an insurance
           company providing for payment in the form of a joint and survivor
           annuity (as defined below) if the participant is legally married
           under the laws of any jurisdiction on his distribution date, and in
           the form of a single life annuity (as described below) if the
           participant is unmarried on his distribution date, subject to the
           following provisions of this subsection 10.5. During an "election
           period" commencing no less than 30 days after the participant
           receives the election information described in subsection 10.7 and no
           more than 90 days before the participant's distribution date, a
           participant may waive payment in the joint and survivor annuity form
           (or single life annuity form in the case of an unmarried participant)
           and elect payment in one of the other forms permitted by subsection
           10.4. If a participant is legally married on his distribution date,
           then the waiver described in the preceding sentence will be effective
           only with spousal consent (as described in subsection 10.17). A
           participant may, at any time during his election period, revoke any
           prior waiver of the joint and survivor annuity form or single life
           annuity form, in which case his account balances shall be paid in the
           form of a joint and survivor annuity or a single life annuity, as
           applicable, in accordance with the foregoing provisions of this
           subsection 10.5. The term "joint and survivor annuity" means an
           annuity for the life of the participant with a survivor annuity for
           the life of his surviving spouse which is equal to 50 percent of the
           amount of the annuity payable during the joint lives of the
           participant and his spouse and which is the actuarial equivalent of a
           single life annuity for the life of the participant. The term "single
           life annuity" means an annuity payable for the payee's lifetime only.

      10.6. Payment in Form of Pre-Retirement Surviving Spouse Annuity. The
           provisions of this subsection 10.6 shall have no application for
           distributions with a distribution date occurring on or after June 1,
           2002. If a participant dies after electing to have his account
           balances distributed in accordance with paragraph 10.4(c) but prior
           to his distribution date, if the participant's distribution date is
           prior to June 1, 2002, and if such participant is legally married
           under the laws of any jurisdiction on the date of his death, the
           entire balance in his accounts shall be applied to purchase a
           contract from an insurance company providing for payment in the form
           of a pre-retirement surviving spouse annuity (as described below),
           which contract shall be distributed to the participant's surviving
           spouse. The term "pre-retirement surviving spouse annuity" means an
           annuity payable to the surviving spouse for life. Distribution of the
           contract providing for the pre-retirement surviving spouse annuity
           shall be made, and payment under such contract shall commence, as of
           the accounting date which is coincident with, or next following the
           later of the participant's termination date or the 65th anniversary
           date of the participant's birth; provided, however, that the
           surviving spouse may elect to receive the pre-retirement surviving
           spouse annuity contract, and to commence receipt of payments under
           such contract, within a reasonable time following the participant's
           death. A participant's surviving spouse who is eligible for a
           pre-retirement surviving spouse annuity in accordance with the
           foregoing provisions of this subsection 10.6 may waive payment in
           that form and elect payment in any form permitted by subsection 10.4
           by filing an election with the committee after the participant's
           death.

      10.7. Election Information. The provisions of this subsection 10.7 shall
           have no application for distributions with a distribution date
           occurring on or after June 1, 2002. As soon as practicable after a
           participant elects to have his account balances paid to him in
           accordance with paragraph 10.4(c) (but in no event less than 30 days
           nor more than 90 days before the participant's distribution date
           occurs), the committee will provide the participant with election
           information consisting of:

      (a)  a written description of the joint and survivor annuity or single
           life annuity, as the case may be, and the relative financial effect
           of payment of his account balances in the respective form;

      (b)  a notification of the right to waive payment in that form and the
           spouse's right, if applicable, with respect to that waiver;

      (c)  a notification of the participant's right to rescind a prior
           revocation of distribution in the form of a joint and survivor
           annuity and the effect thereof; and

      (d)  a general description of the eligibility conditions and other
           material features of the optional forms of distribution under the
           plan and information explaining the relative values of such optional
           forms of distribution.

The committee may make such election information available to a participant by:

      (1)  personal delivery to him;

      (2)  first-class mail, postage prepaid, addressed to the participant at
           his last known address as shown on the employer's records; or

      (3)  permanent posting on a bulletin board located at the participant's
           work site.

A participant may request, by notice filed with the committee during his
election period, an explanation, written in nontechnical language, of the terms,
conditions and financial effect (in terms of dollars per monthly benefit
payment) of payment in the joint and survivor annuity form or single life
annuity form. If not previously provided to the participant, the committee shall
provide him with such explanation within 30 days of his request by one of the
methods described in paragraphs (1) or (2) next above, and the participant's
election period will be extended, if necessary, to include the 90th day next
following the date on which he receives such explanation."

2. By substituting the following for paragraph 10.8(b) of the Plan:

      "(b) Subject to the following provisions of this subsection 10.8, a
           participant may elect to have distribution of his account balances
           commence in the form of a lump sum or, if the distribution date
           occurs prior to June 1, 2002, an annuity, as of any date that is
           coincident with or following his termination date and prior to his
           age 70-1/2; provided, however, that a person who was a participant in
           the plan on April 1, 1998 and whose termination date occurs under
           paragraph 9(a) may elect to have his account balances commence in any
           form of payment permitted under the terms of the plan; and provided
           further that, if a participant does not make an election in
           accordance with this paragraph (b) within 90 days of his termination
           date, he shall be deemed to have elected to defer distribution of his
           account balances until the earlier of (i) the date that he
           subsequently elects to commence distribution, or (ii) the date on
           which he attains age 70-1/2."

3. By substituting the following for subsection 10.17 of the Plan:

      "10.17. Spousal Consent. Any election by a participant under the plan
which, by its terms, requires spousal consent, shall be effective only if (i)
the participant's spouse consents in writing to such election; (ii) the consent
acknowledges the effect of the election and is witnessed by a notary public (or,
if permitted by the committee, a plan representative appointed or approved by
the committee); (iii) in the case of a spousal consent to a beneficiary
designation election, such election designates a specific beneficiary which may
not be changed without spousal consent; and (iv) in the case of a participant's
waiver of a joint and survivor annuity, if the participant's distribution date
is prior June 1, 2002 and prior to his 65th birthday, the spouse consents to the
time of payment and the spouse consents to the optional form of payment elected
by the participant; provided, however, that unless otherwise provided by a
qualified domestic relations order within the meaning of section 414(p) of the
code, no such consent shall be required if:

      (a)  the participant and his spouse are legally separated or the
           participant has been abandoned (within the meaning of local law) and
           the participant has a court order to such effect; or

      (b)  it is established to the satisfaction of a plan representative
           appointed or approved by the committee that the consent of the
           participant's spouse cannot be obtained because there is no spouse,
           because the spouse cannot be located or because of such other
           circumstances as the Secretary of the Treasury may prescribe in
           regulations."



<PAGE>




      IN WITNESS WHEREOF, the undersigned officer has caused these presents to
be signed on behalf of the Company effective as of the 1st day of June, 2002.



                                    Northern Illinois Gas Company

                                    By: /s/ Claudia J. Colalillo
                                    Its Senior Vice President
                                        Human Resources & Customer Care


<PAGE>


                           THIRD AMENDMENT OF
                          NICOR GAS THRIFT PLAN

By virtue and in exercise of the amending power reserved to Northern Illinois
Gas Company (the "Company") by the terms of the Nicor Gas Thrift Plan (the
"Plan") and pursuant to the authority delegated to the undersigned officers of
the Company adopted on March 10, 1982, the Plan is hereby amended in the
following particulars, all effective as of January 1, 2002 unless otherwise
specified, which amendments are intended as good faith compliance with the
requirements of the Economic Growth and Tax Relief Reconciliation Act of 2001
("EGTRRA") and are to be construed in accordance with EGTRRA and guidance issued
thereunder:

1. By substituting the following for subsection 4.1 of the Plan:

      "4.1. Employee Tax-deferred Contributions. Subject to the following
provisions of this Section 4 and Section 8, each employer, out of its current or
accumulated profits (as determined in accordance with recognized accounting
principles and practices), shall contribute to the trustee, in cash, on behalf
of each participant for whom a tax deferral election is in effect as to any pay
period, an amount, referred to herein as an `employee tax-deferred
contribution', which is equal to the amount by which the compensation (as
defined in subsection 4.5) otherwise payable to the participant during that pay
period by the employer has been reduced pursuant to the terms of a tax deferral
election. For purposes of the plan, the term `tax deferral election' means an
election by an employee to have the amount of the compensation that would
otherwise be payable to him for each pay period during the period in which the
election is in effect reduced by an amount that is not less than 1 percent and
not more than 10 percent (or such other percent as the committee shall decide
and, in all cases, in multiples of one percent). The plan provisions relating to
certain limitations on employee after-tax contributions are set forth in
subsection 4.2. Employee tax-deferred contributions shall be paid to the trustee
in accordance with subsection 4.10."

2. By substituting the following for subsection 4.5 of the Plan:

      "4.5. Compensation. For purposes of the plan, a participant's
`compensation' for any period means the regular basic cash remuneration paid to
him for such period by reason of his employment with the employers as a
participant, excluding bonuses, overtime pay, and all other remuneration of any
kind including, but not limited to pre-paid salary increase advances and lump
sum raise payments, and including vacation pay, reductions made in accordance
with the provisions of subsection 4.1, reductions made pursuant to section 125
of the code, including under any tax exempt premium plan in which the employee
participates, and reductions made pursuant to section 132(f)(4) of the code;
provided, however, that the compensation of any participant for any plan year
shall be disregarded to the extent that it exceeds $200,000 (adjusted in
accordance with section 401(a)(17) of the code), taking into account any
proration of such amount as may be required under applicable Treasury
regulations on account of a short plan year."

3. Effective as of January 1, 2001, by substituting the following for subsection
7.2 of the Plan:

      "7.2. Deduction, Crediting and Allocation of Contributions and Dividends.
Subject to the provisions of Section 8:

      (a)  Employee tax-deferred contributions, employee after-tax contributions
           and rollover contributions on behalf of a participant for any period
           shall be credited to that participant's appropriate accounts as of
           the day on which such contributions are made.

      (b)  The amount of the employer matched contributions that are made on
           behalf of a participant shall be credited, as of the end of the day
           that the contributions are made, to the participant's employee
           tax-deferred account and employee after-tax account, pro rata,
           according to the rate of employee tax-deferred contributions and
           employee after-tax contributions that are made with respect to the
           participant, respectively; provided, however, that, if the sum of a
           participant's employee tax-deferred contribution rate and employee
           after-tax contribution rate exceeds 6 percent of the participant's
           compensation, then the amount of the employer matched contributions
           made with respect to the participant shall be credited to the
           participant's employee tax-deferred account in the same ratio that
           the participant's employee tax-deferred contribution rate (not in
           excess of 6 percent) bears to 6 percent, and the amount of any
           remaining employer matched contributions shall be credited to the
           participant's employee after-tax account.

      (c)  As of the last day of each plan year the employer profit sharing
           contributions of each employer for that plan year shall be allocated
           among and credited to the profit sharing accounts of profit sharing
           participants who were employed by the employer on the last day of the
           plan year, pro rata based on the compensation paid to them from the
           employer for that plan year.

      (d)  As of any accounting date which is also a dividend payment date,
           shares of Nicor stock received by the trustee as a result of a stock
           split or stock dividend shall be allocated among and credited to the
           accounts of participants whose accounts were invested in the Nicor
           stock fund as of the dividend record date to which the dividend
           payment date relates, pro rata based on the number of shares of Nicor
           stock held in the Nicor Stock fund as of the dividend record date.

      (e)  As of any accounting date which is also a dividend payment date, cash
           dividends paid on shares of Nicor stock which were held in the Nicor
           stock fund as of the dividend record date to which the dividend
           payment date relates shall be distributed to participants in
           accordance with Supplement A of the plan; provided, however, that,
           for periods on an after May 1, 2002, the trustee shall use all cash
           dividends with respect to which participants have not elected a cash
           distribution pursuant to Supplement A to purchase shares of Nicor
           stock. Shares of Nicor stock purchased pursuant to the preceding
           sentence will be allocated and credited to the accounts of
           participants whose accounts were invested in the Nicor stock fund as
           of the dividend record date and who did not elect a cash distribution
           of dividends pursuant to Supplement A, pro rata based on the number
           of shares purchased by the trustee with the cash dividends.

For purposes of this Section 7, all employer contributions for any plan year
which are made after the close of the plan year will be considered to have been
made on the last day of that plan year regardless of when paid to the trustee."

4. By substituting the following for subsections 8.2 and 8.3, respectively, of
the Plan:

      "8.2. Compensation for Limitation/Testing Purposes. For purposes of the
plan, the term `section 415 compensation' for any plan year means the
participant's compensation (as described in Treas. Reg. Section 1.415-2(d)(1))
paid during that year for personal services actually rendered in the course of
employment with any employer or any section 415 affiliate, excluding deferred
compensation and other amounts that receive special tax treatment (as described
in Treas. Reg. Section 1.415-2(d)(2)) but including any elective contributions
made on the participant's behalf for the year under the plan or any plan
maintained by an employer or affiliate which are excludable from the
participant's gross income by reason of section 125, 402(e)(3) and 132(f)(4) of
the code. Notwithstanding the foregoing provisions of this subsection 8.2,
`section 415 compensation' for any plan year shall be disregarded to the extent
that it exceeds $200,000 (adjusted in accordance with section 401(a)(17) of the
code), taking into account any proration of such amount as may be required under
applicable Treasury regulations where section 415 compensation is computed with
respect to a period of less than a full year (other than on account of mid-year
commencement or cessation of active participation in the plan).

      8.3. Limitations on Annual Additions. Notwithstanding any other provision
           of the plan other than the provisions of this Section 8, a
           participant's annual additions (as defined below) for any plan year
           shall not exceed an amount equal to the lesser of:

      (a)  $40,000 (as adjusted for each plan year to take into account any
           applicable cost-of-living adjustment for that year provided by the
           Secretary of the Treasury under section 415(d) of the code); or

      (b)  100 percent of the section 415 compensation paid to the participant
           in that plan year (determined without regard to the limitations of
           section 401(a)(17) of the code).

The limitations set forth under paragraphs (a) and (b) shall be adjusted to the
extent required by subsection 8.4. For purposes of the plan, the term `annual
additions' means, with respect to any participant for any plan year, the sum of
the following amounts, determined without regard to whether any such amounts (or
portions thereof) are subsequently distributed to the participant in accordance
with the provisions of subsection 8.8, 8.10, 8.12 or 8.13:

      (1)  employer contributions and forfeitures (including employee
           tax-deferred contributions which are considered to be employer
           contributions) credited to the participant's accounts for that plan
           year under this plan and each related defined contribution plan (as
           defined below);

      (2)  employee contributions (other than rollover contributions) credited
           to the participant's accounts under this plan and each related
           defined contribution plan for that plan year; and

      (3)  employer contributions allocated to any individual medical account
           (as described in section 415(l) of the code) that is maintained for
           the benefit of the participant under a related defined benefit plan
           (as defined below) and, if the participant is a key employee (as
           defined in Supplement A), any amount allocated to a related medical
           account (as defined below) maintained for the participant; provided,
           however, that the amounts described in this paragraph (3) shall be
           disregarded for purposes of the limitation set forth in paragraph (b)
           next above.

For purposes of the plan: (i) the term `related medical account' means any
account maintained by any employer or section 415 affiliate under section
419A(d) of the code to fund retiree medical benefits; (ii) the term `section 415
affiliate' means any corporation or trade or business that is, along with any
employer, a member of a controlled group of corporations or controlled group of
trades or businesses (as described in sections 414(b) and (c) of the code, as
modified by section 415(h) thereof); and (iii) the term `related defined
contribution plan' and `related defined benefit plan' mean any other defined
contribution plan and any defined benefit plan (both as defined in section
415(k) of the code), respectively, maintained by any employer or section 415
affiliate."

5. By adding the following as the last sentence of subsection 8.13 of the Plan:

"The provisions of this subsection 8.13 shall not apply for plan years beginning
after December 31, 2001."

6. By substituting the following for subsections 10.19 and 10.20, respectively,
of the plan:

      "10.19 Direct Rollover to an Eligible Retirement Plan. Notwithstanding any
provision of the plan to the contrary that would otherwise limit a distributee's
election under this subsection 10.19, a distributee may elect, at the time and
in the manner prescribed by the committee, to have any portion of an "eligible
rollover distribution" (as defined in section 402(c)(4) of the code) paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover. For purposes of this subsection 10.19, the following definitions shall
apply:

      (a)  An `eligible rollover distribution' means any distribution of all or
           any portion of the balance to the credit of the distributee, except
           that an eligible rollover distribution does not include: any
           distribution that is one of a series of substantially equal periodic
           payments (not less frequently than annually) made for the life (or
           life expectancy) of the distributee or the joint lives (or joint life
           expectancies) of the distributee and the distributee's designated
           beneficiary, or for a specified period of ten years or more; and any
           distribution to the extent such distribution is required under
           section 401(a)(9) of the code. A portion of a distribution shall not
           fail to be an eligible rollover distribution merely because the
           portion consists of after-tax employee contributions which are not
           includible in gross income; provided, however, that such portion may
           be transferred only to an individual retirement account or annuity
           described in section 408(a) or (b) of the code, or to a qualified
           defined contribution plan described in section 401(a) or 403(a) of
           the code that agrees to separately account for amounts so
           transferred, including separately accounting for the portion of such
           distribution which is includible in gross income and the portion of
           such distribution which is not so includible. A hardship withdrawal
           shall not constitute an eligible rollover distribution for purposes
           of the Plan.

      (b)  An `eligible retirement plan' means an individual retirement account
           described in section 408(a) of the code, an individual retirement
           annuity described in section 408(b) of the code, an annuity plan
           described in section 403(a) of the code, or a qualified trust
           described in section 401(a) of the code that accepts the
           distributee's eligible rollover distribution. For distributions
           occurring after December 31, 2001, an `eligible retirement plan' also
           includes an annuity contract described in section 403(b) of the code
           or an eligible plan under section 457(b) of the code which is
           maintained by a state, political subdivision of a state, or any
           agency or instrumentality of a state or political subdivision of a
           state and which agrees to separately account for amounts transferred
           into such plan from the Plan. The definition of eligible retirement
           plan shall also apply in the case of a distribution to a surviving
           spouse, or to a spouse or former spouse who is the alternate payee
           under a qualified domestic relations order, as defined in section
           414(p) of the code.

      (c)  A `distributee' means an employee or former employee and the
           employee's or former employee's surviving spouse and the employee's
           or former employee's spouse or former spouse who is the alternate
           payee under a qualified domestic relations order as defined in
           section 414(p) of the code.

      (d)  A `direct rollover to an eligible retirement plan' means a payment by
           the plan to the eligible retirement plan specified by the
           distributee.

      10.20Distribution Only Upon Separation From Service. Notwithstanding any
other provision of the plan to the contrary, for periods prior to January 1,
2002, a participant may not commence distribution of his employee tax-deferred
contribution account pursuant to this Section 10, even though he has otherwise
had a termination date under Section 9, unless or until he also has a
`separation from service' within the meaning of section 401(k)(2)(B) of the
code. The foregoing restriction shall not apply, however, if the participant's
termination date occurs in connection with the sale by an employer to an
unrelated corporation of at least 85 percent of the assets of a trade or
business, or the sale of its interest in a subsidiary to an unrelated entity,
provided (a) the participant remains employed in such trade or business or by
such subsidiary after the sale, (b) the employer continues to maintain the plan
after the sale, (c) no transfer of the participant's accounts occurs or is
scheduled to occur after the sale pursuant to subsection 14.3 to a plan of such
subsidiary or of the purchaser of such assets (or any entity affiliated
therewith), and (d) the participant receives distribution of his account
balances (less any outstanding loan balances) under the plan in a lump sum by
the end of the second calendar year after the year in which the sale occurs.
Effective as of January 1, 2002, the foregoing provisions of this subsection
10.20 not apply and a Participant shall be entitled to commence distribution
upon his severance from employment, subject to other provisions of the Plan
governing distributions, other than provisions which require a separation from
service before such amounts may be distributed. The preceding sentence shall
apply as of January 1, 2002, regardless of whether the Participant's severance
from employment occurred before January 1, 2002."

7. Effective as of January 1, 2003, by substituting the following for clause
11.3(a)(iii) of the Plan:

           "(iii) payment of tuition, related educational fees, and room and
                board expenses for up to the next 12 months of post-secondary
                education for the participant, or his spouse or dependents (as
                defined in section 152 of the code); or"

8. Effective as of January 1, 2001, by substituting the phrase "subsection 7.2"
for the phrase "subsection 7.1" where the latter phrase appears in subsection
A-4 of Supplement A of the Plan.

9. Effective as of May 1, 2002, by substituting the following for subsection
A-5 of Supplement A of the Plan:

"Treatment of    A-5. On and after May 1, 2002, any cash dividends
Cash Dividends   paid on shares of Nicor stock held by the trustee
                 in the Nicor Stock Fund shall be allocated and credited to
                 participants' accounts in accordance with subsection 7.2(e) of
                 the plan. Notwithstanding the foregoing, a participant (or in
                 the event his death, his beneficiary) may elect to have any
                 cash dividends paid on shares of Nicor stock held by the
                 trustee in the Nicor Stock Fund distributed, in cash, as soon
                 as practicable after the accounting date ending the accounting
                 period in which the dividends are paid to the trustee (but in
                 no event more than 90 days after the close of the plan year in
                 which the dividends are paid to the trustee). Distributions
                 under this subsection A-5 on and after May 1, 2002 shall not be
                 subject to the restrictions on pre-termination withdrawals
                 described in Section 11 and shall not be considered an eligible
                 rollover distribution for purposes of subsection 10.19."




<PAGE>




      IN WITNESS WHEREOF, the undersigned officer has caused these presents to
be signed on behalf of the Company this 20 day of December, 2002.



                                    Northern Illinois Gas Company

                                    By: /s/ Claudia J. Colalillo
                                    Its Senior Vice President
                                    Human Resources & Customer Care