UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549








**FORM
      8-K**





**CURRENT
      REPORT**





Pursuant
      to Section 13 or 15(d) of the


Securities
      Exchange Act of 1934








**March
      17, 2006 (March 16, 2006)**


Date
      of
      Report (Date of earliest event reported)











**NICOR
      INC.**


(Exact
      name of registrant as specified in its charter)








**Illinois**
            **1-7297**
            **36-2855175**(State
                or other jurisdiction
            (Commission
            (I.R.S.
                Employerof
                incorporation)
            File
                Number)
            Identification
                Number)








**1844
      Ferry Road**


**Naperville,
      Illinois 60563-9600**


(Address
      of principal executive offices) (Zip Code)





**(630)
      305-9500**


(Registrant’s
      telephone number, including area code)








Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (see General Instruction A.2. below):




[
      ]  Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)




[
      ]  Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)




[
      ]  Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act


(17
      CFR
      240.14d-2(b))




[
      ]  Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act


(17
      CFR
      240.13e-4(c))

















**Page
      1**





**Item
      1.01**  **Entry
      into a Material Definitive Agreement**





On
      March
      16, 2006, the Compensation Committee of Nicor Inc. approved changes in the
      compensation of the following officers, effective as of March 16,
      2006:





Officer
            Title
            New
                Base Compensation
            Deferred
              Restricted
                Stock
            Restricted
              Stock
            Performance
                Cash UnitsRuss
                M. Strobel
            Chairman
                and
              Chief
                Executive Officer
            $650,000
            11,550
            0
            487,500Richard
                L. Hawley
            Executive
                Vice President
              and
                Chief Financial Officer
            $385,000
            0
            4,790
            202,100Paul
                C. Gracey, Jr.
            Senior
                Vice President, General Counsel and Secretary
            $298,000
            0
            2,290
            96,900Daniel
                R. Dodge
            Senior
                Vice President Diversified Ventures and Corporate Planning
            $269,000
            0
            2,070
            87,400Gerald
                P. O’Connor
            Vice
                President Administration and Finance
            $257,000
            0
            1,670
            70,700





Deferred
      Restricted Stock Grants





On
      March
      16, 2006, Nicor Inc. awarded the number of units of deferred restricted stock
      to
      Mr. Strobel in the amount indicated above opposite his name. Nicor Inc. is
      filing the deferred restricted stock agreement applicable to Mr. Strobel as
      an
      exhibit to this report, and its terms are incorporated herein by reference.
      The
      agreement implements certain terms of Nicor Inc.’s 2006 Long Term Incentive
      Program, which is also filed as an exhibit to this report.





Restricted
      Stock Grants





On
      March
      16, 2006, Nicor Inc. awarded the number of shares of restricted stock to the
      officers listed above in the amounts indicated opposite their respective names.
      Nicor Inc. is filing as an exhibit to this report a form of the restricted
      stock
      agreement applicable to all employees who received restricted stock grants,
      including the officers listed above, and its terms are incorporated herein
      by
      reference. The form agreement implements certain terms of Nicor Inc.’s 2006 Long
      Term Incentive Program.

















**Page
      2**





Performance
      Cash Units





On
      March
      16, 2006, Nicor Inc. awarded the number of performance cash units to the
      officers listed above in the amounts indicated opposite their respective names.
      Nicor Inc. is filing as an exhibit to this report a form of the performance
      cash
      unit agreement applicable to all employees who received performance cash units,
      including the officers listed above, and its terms are incorporated herein
      by
      reference. The form agreement implements certain terms of Nicor Inc.’s 2006 Long
      Term Incentive Program.





Amendment
      to 1997 Long Term Incentive Plan





On
      March
      16, 2006, the Board of Directors of Nicor Inc. approved the Third Amendment
      to
      Nicor Inc. 1997 Long Term Incentive Plan. A copy of that amendment is filed
      as
      an exhibit to this report and its terms are incorporated herein by reference.





2006
      Annual Nicor Incentive Compensation Plan for Officers





On
      March
      16, 2006, the Compensation Committee of Nicor Inc. approved the 2006 Annual
      Nicor Incentive Compensation Plan for Officers. A copy of that plan is filed
      as
      an exhibit to this report and its terms are incorporated herein by
      reference.





2006
      Annual Nicor Gas Incentive Compensation Plan for Officers





On
      March
      16, 2006, the Compensation Committee of Northern Illinois Gas Company, a
      subsidiary of Nicor Inc., approved the 2006 Annual Nicor Gas Incentive
      Compensation Plan for Officers. A copy of that plan is filed as an exhibit
      to
      this report and its terms are incorporated herein by reference.








**Item
      9.01** **** **Financial
      Statements and Exhibits**





(c)
            Exhibits





The
      following is furnished as an exhibit to this report





10.1.
      Deferred Restricted Stock Agreement between Nicor Inc. and Russ M.
      Strobel


10.2.
      Restricted Stock Agreement Form


10.3.
      Performance Cash Unit Agreement Form


10.4.
      2006 Long Term Incentive Program


10.5.
      Third Amendment to Nicor Inc. 1997 Long Term Incentive Plan


10.6.
      2006 Annual Nicor Incentive Compensation Plan for Officers


10.7.
      2006 Annual Nicor Gas Incentive Compensation Plan for Officers











**Page
      3**





**Signature**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned hereunto
      duly authorized.














Nicor
      Inc.








Date  March
      17, 2006     /s/
      PAUL C. GRACEY, JR.


Paul
      C.
      Gracey, Jr.


Senior
      Vice President, General Counsel and


Secretary














**Page
      4**





**Exhibit
      Index**





Exhibit


Number   Description
      of Document








10.1. Deferred
      Restricted Stock
      Agreement between Nicor Inc. and Russ M. Strobel


10.2. Restricted
      Stock Agreement
      Form


10.3. Performance
      Cash Unit Agreement
      Form


10.4. 2006
      Long Term Incentive
      Program


10.5. Third
      Amendment to Nicor Inc.
      1997 Long Term Incentive Plan


10.6. 2006
      Annual Nicor Incentive
      Compensation Plan for Officers


10.7. 2006
      Annual Nicor Gas Incentive
      Compensation Plan for Officers