EX-10.02


    Nicor
      Inc.

    Form
      10-Q

    Exhibit
      10.02

    


    NICOR
      INC.

    DIRECTORS’
      DEFERRED COMPENSATION PLAN

     

    (As
      Amended and Restated Effective as of January 1, 2008)

     

    SECTION
      1. Name.
      NICOR
      Inc. previously established “NICOR Inc. Directors’ Deferred Compensation Plan,”
which is herein referred to as the “Plan.” The following provisions constitute
      an amendment and restatement of the Plan, effective as of January 1, 2008,
      except as otherwise specifically provided herein. The provisions of this Plan
      as
      amended and restated shall apply to all deferrals and earnings made under the
      Plan (whether or not made before or after January 1, 2008) for each individual
      who was a director (a “Director”) of NICOR Inc. (the “Company”) on January 1,
      2008. 

     

    SECTION
      2. Participation.
      A
      Director of the Company may elect to defer the payment or portion thereof owed
      for the:

     

    (i)       
      retainers; or

     

    (ii)     meeting
      fees; or

     

               
      (iii)   awards
      under the NICOR Inc. Directors' Stock Value Plan made after January 1,
      2008; or

     

    (iv)     any
      combination of
      (i)-(iii) above.

     

    Such
      election must be communicated to the Company in writing prior to December 31
      of
      the year prior to the term for which the Director may be reelected. For a
      Director first elected or appointed to the Board, such election shall be
      communicated to the Company in writing within thirty (30) days of the date
      the
      Director is first elected or appointed to the Board; provided such deferment
      shall apply only to the compensation earned after such written election is
      communicated to the Company. Once made an election shall continue in force
      with
      respect to succeeding terms of the Director’s service unless the Director shall
      advise the Company in writing prior to December 31 of the year prior to the
      year
      of reelection that he or she elects to terminate or change the terms of such
      deferment effective with such reelection. In addition, such election shall
      specify the manner and date on which the Director elects to receive payment
      of
      the deferred amount under Subsection 3.1 below. Directors who were Directors
      on
      January 1, 2007, 

     

     

    
      
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    shall
      file an election as to the time and form of payment of all their deferrals,
      whether made prior to or after such date by December 31, 2007; provided, no
      such
      election may accelerate payment of any deferrals into 2007. Notwithstanding
      any
      deferral election in existence to the contrary, no retainers or meeting fees
      paid after the Director’s Separation from Service (whether or not earned prior
      to such Separation from Service) may be deferred under this Plan. 

    


    SECTION
      3. Method
      of Deferment.
      Compensation deferred by a Director under Section 2 shall be credited and paid
      in the following manner: 

     

    
    

    
      	 	
              3.1

            	
              The
                Company shall accrue such deferred compensation to a deferred compensation
                account on its books, such accruals to commence as of the respective
                date
                payments of such amounts would have been made by the Company. The
                establishment of such deferred compensation account is solely for
                bookkeeping purposes, and shall not represent assets held in trust
                or as a
                segregation of the assets of the Company, or any other form of funding
                of
                the deferred compensation.

            


    

     

    
      	 	
              3.2

            	
              Commencing
                with the first day of each calendar quarter following (a) the month
                in
                which the Director shall have a Separation from Service (within the
                meaning of Treasury Regulation §1.409A-1(h)) or (b) such other date
                following Separation from Service, but in no event more than five
                years
                subsequent to Separation from Service, as may be elected by the Director,
                the Company shall pay to the Director the amount accrued to his or
                her
                account, in equal quarterly installments, the number of which shall
                be as
                specified in the election made by the Director under Section 2, but
                in no
                event shall such number exceed 40.

            


    

     


    
      
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              3.3

            	
              An
                amount equivalent to interest on the balance from time to time accrued
                to
                the Director’s account shall be accrued quarterly. The rate of interest
                shall equal the prime interest rate as of the first day of such calendar
                quarter quoted by the Federal Reserve Bank. Interest shall be credited
                to
                the Director’s account unless payments are being made in installments
                hereunder, in which latter event such amounts shall be paid currently
                in
                cash to the Director or the beneficiary, as the case may
                be.

            


    

     

    
      	 	
              3.4

            	
              As
                an alternative to an interest equivalent, a Director may elect to
                have all
                or any portion of his or her compensation converted into share units,
                each
                reflecting a share of the Company’s common stock. If this alternative is
                elected, the Director’s deferred account will be credited with an amount
                per share unit equal to the per share dividends and distributions
                paid on
                the Company’s common stock during the period the share unit is in the
                deferred account, which amount shall in turn be converted into share
                units. The Director’s right to the dividend equivalent shall accrue on the
                date the dividend is declared. However, the number of share units
                credited
                to a Director’s account for both the deferred compensation and the
                dividend equivalents shall be determined on the basis of the closing
                market composite price for the Company’s common stock as reported on the
                New York Stock Exchange Composite Transactions on the last trading
                day
                preceding the deferred compensation or dividend payment date. For
                Separations from Service occurring on and after July 26, 2007, the
                share
                units in the Director’s account shall be converted to a cash equivalent
                based on the closing market composite price for the Company’s common stock
                as reported on the New York Stock Exchange Composite Transactions
                on the
                first trading day after the date the Director incurs a Separation
                from
                Service. 

            


    

     


    
      
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    SECTION
      4. Transfer
      Between Cash Deferral and Stock Equivalent Deferral.
      As of
      the first day of the calendar quarter following the regular annual meeting
      of
      stockholders of the Company, a Director, by giving written notice to the
      Company, may switch all or any portion of the balance in his or her deferred
      compensation account between the interest equivalent option and the share unit
      option using the closing price for the Company’s common stock determined as
      stated in Section 3.4 on the last preceding trading day.

     

    SECTION
      5. Beneficiary
      Designation.
      Upon
      the death of the Director prior to distribution to him or her of the entire
      amount accrued to the Director’s account, any such undistributed amount shall be
      paid in a lump sum to such beneficiaries and in such proportions among them
      as
      the Director shall have designated in the latest instrument in writing filed
      by
      him or her with the Company, provided, however, that the Director may elect
      in
      accordance with the election provisions of Section 2 that such undistributed
      amount shall be paid to any one beneficiary in equal quarterly installments
      commencing with the first day of the calendar quarter following the Director’s
      death, the aggregate number of which installments (including installments,
      if
      any, paid to the Director before his or her death) shall be as specified by
      the
      Director under Section 3.2 If there shall be no beneficiary designated or in
      existence at the Director’s death, any undistributed amount shall be paid to the
      executor or administrator of the Director’s estate. If payments are being made
      in installments to an individual beneficiary, then upon such beneficiary’s death
      any amount then undistributed shall be paid to the executor or administrator
      of
      the beneficiary’s estate.

     

    SECTION
      6. Plan
      Binding.
      This
      Plan shall be binding on the Director and his or her heirs and legal
      representatives and on the Company and its successors and assigns, whether
      by
      merger, consolidation or the sale of all or substantially all of the Company’s
      assets.

     

    SECTION
      7. Nonassignability.
      No
      Director or beneficiary shall have any power to commute, encumber, sell or
      otherwise dispose of the rights provided herein and such rights shall be
      nonassignable and nontransferable.

     


    
      
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    SECTION
      8. Counterparts.
      Any
      elections associated with this Plan may be executed in two or more counterparts,
      any one of which shall be deemed an original without reference to the
      others.

     

    SECTION
      9. Governing
      Law.
      The
      provisions of this Plan and the rights of the participants hereunder shall
      be
      interpreted and construed in accordance with the laws of the State of
      Illinois.

     

    SECTION
      10. Amendment
      or Termination.
      This
      Plan may be amended by the Board of Directors of the Company (the “Board”) at
      any time and from time to time provided that no such amendment shall serve
      to
      (a) impair or restrict the right of any Director to receive or (b) reduce the
      amounts of compensation or equivalent interest or equivalent stock theretofore
      accrued to the account of any Director. This Plan may be terminated by the
      Board
      at any time, provided that such termination shall not affect any funds accrued
      to the account of any Director at the date of such termination. The provisions
      of this Plan shall continue to apply to any such funds until distribution
      thereof according to the Plan.

     

     

    
      
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