SECOND AMENDMENT TO THE
                               AGL RESOURCES INC.
              1996 NON-EMPLOYEE DIRECTORS EQUITY COMPENSATION PLAN




         This Second  Amendment  to the AGL  Resources  Inc.  1996  Non-Employee
Directors  Equity  Compensation  Plan (the "Plan") is made and entered into this
14th day of May 1997, by AGL Resources Inc. (the "Company").


                              W I T N E S S E T H:


         WHEREAS,  the Company sponsors the Plan to attract qualified  directors
and to provide  certain  benefits  to the  non-employee  members of the Board of
Directors of the Company; and

         WHEREAS,  the Company desires to permit the non-employee members of the
Board  of  Directors  of the  Company  who  participate  in the Plan to elect to
receive an award of Company stock in lieu of meeting fees  otherwise  payable to
such directors; and

         WHEREAS, Section 11 of the Plan provides that the Company may amend the
Plan at any time  (provided  shareholder  approval is obtained if the  amendment
contains certain provisions); and

         WHEREAS, the Board of Directors of the Company has adopted a resolution
authorizing the amendment of the Plan.

         NOW,  THEREFORE,  BE IT  RESOLVED,  that the Plan  hereby is amended as
follows:

                                       1.

         Section 5 of the Plan is amended in its entirety, effective as of April
1, 1997, to read as follows:

         "(a) On the first day of the annual service term for Outside  Directors
         following the Effective Date and on each  anniversary  date  thereafter
         (such dates are each  referred  to herein as the "Date of  Grant"),  in
         lieu of the annual retainer otherwise payable to Outside Directors (the
         "Retainer"), each Outside Director shall receive an award of Restricted
         Stock as set forth in  Section 6 hereof  and a grant of  Options as set
         forth in Section 7 hereof.  In no event shall any Outside  Director who
         ceases to be a member of the Board for any reason on or before the Date
         of Grant receive an award of Restricted  Stock or a grant of Options in
         respect of the annual service term commencing on such Date of Grant.






         (b) On the first day of each  quarter  commencing  on or after April 1,
         1997,  in  lieu  of the  meeting  fees  otherwise  payable  to  Outside
         Directors  (the  "Meeting  Fees"),  each Outside  Director may elect to
         receive an award of Restricted  Stock as set forth in Section 6 hereof.
         Such  election  may be  changed  prospectively  on a  quarterly  basis,
         effective as of the first day of the next following quarter.  Each date
         that such Meeting Fees would be payable to the Outside  Director  shall
         be a Date of Award."


                                       2.

         Section  6(a) of the Plan is amended in its  entirety,  effective as of
April 1, 1997, to read as follows:

         "Subject to the terms and conditions of Section 5 hereof,  on each Date
         of Grant or Date of Award the Outside  Directors  shall each receive an
         award of Common  Stock  (the  "Restricted  Stock")  equivalent  in fair
         market  value to the  Retainer,  or  Meeting  Fees if so elected by the
         Outside Director pursuant to Section 5(b) hereof,  otherwise payable to
         such Outside Director;  provided, however, the number of shares in each
         award of Restricted  Stock shall be rounded  upward to the next highest
         whole share."


                                       3.

         Except as  specifically  set forth herein,  the terms of the Plan shall
remain in full force and effect.



         IN WITNESS WHEREOF, the Company has caused this Second Amendment to the
Plan to be  executed by its duly  authorized  officer as of the date first above
written.



                                       AGL RESOURCES INC.


                                       By: /s/ Robert L. Goocher
                                               Robert L. Goocher
                                               Executive Vice President