Exhibit 10.1
WGL HOLDINGS, INC. and WASHINGTON
LIGHT GAS COMPANY
CHANGE IN CONTROL SEVERANCE PLAN FOR
CERTAIN EXECUTIVES
As amended on September 24, 2008

 

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TABLE OF CONTENTS

              Page
ARTICLE 1 BACKGROUND, PURPOSE AND TERM OF PLAN
    1  
1.1 Purpose of the Plan
    1  
1.2 Term of the Plan
    1  
ARTICLE 2 DEFINITIONS
    2  
2.1 “Affiliate Company”
    2  
2.2 “Annual Bonus”
    2  
2.3 “Base Salary
    2  
2.4 “Board”
    2  
2.5 “Cause”
    2  
2.6 “Change in Control”
    2  
2.7 “Change in Control Termination”
    2  
2.8 “COBRA”
    2  
2.9 “Code”
    2  
2.10 “Committee”
    3  
2.11 “Company”
    3  
2.12 “Effective Date”
    3  
2.13 “Eligible Employee”
    3  
2.14 “Employee”
    3  
2.15 “Employer”
    3  
2.16 “ERISA”
    3  
2.17 “Good Reason Resignation”
    3  
2.18 “Involuntary Termination”
    4  
2.19 “Participant”
    4  
2.20 “Permanent Disability”
    4  
2.21 “Plan”
    4  
2.22 “Plan Administrator”
    4  
2.23 “Release”
    4  
2.24 “Severance Benefit”
    4  
2.25 “Specified Employee”
    5  
2.26 “Successor”
    5  

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TABLE OF CONTENTS
(continued)

              Page
2.27 “Termination Date”
    5  
2.28 “Voluntary Resignation”
    5  
ARTICLE 3 PARTICIPATION AND ELIGIBILITY FOR BENEFITS
    6  
3.1 Participation
    6  
3.2 Conditions
    6  
ARTICLE 4 DETERMINATION OF SEVERANCE BENEFITS
    8  
4.1 Amount of Severance Benefits Upon Involuntary Termination and Good Reason
Resignation
    8  
4.2 Voluntary Resignation; Termination for Death or Permanent Disability
    9  
4.3 Termination for Cause
    9  
4.4 Reduction of Severance Benefits
    9  
4.5 Additional Benefits
    10  
4.6 Legal Expense Reimbursement
    10  
ARTICLE 5 METHOD, DURATION AND LIMITATION OF SEVERANCE BENEFIT PAYMENTS
    12  
5.1 Method of Payment
    12  
5.2 Other Arrangements
    12  
5.3 Termination of Eligibility for Benefits
    12  
ARTICLE 6 CONFIDENTIALITY, COVENANT NOT TO COMPETE AND NOT TO SOLICIT
    14  
6.1 Post-Employment Restrictions
    14  
6.2 Equitable Relief
    14  
6.3 Survival of Provisions
    15  
ARTICLE 7 THE PLAN ADMINISTRATOR
    16  
7.1 Authority and Duties
    16  
7.2 Compensation of the Plan Administrator
    16  
7.3 Records, Reporting and Disclosure
    16  
ARTICLE 8 AMENDMENT, TERMINATION AND DURATION
    17  
8.1 Amendment, Suspension and Termination
    17  
8.2 Duration
    17  

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TABLE OF CONTENTS
(continued)

              Page
ARTICLE 9 DUTIES OF THE COMPANY, THE COMMITTEE, AND THE PLAN ADMINISTRATOR
    18  
9.1 Records
    18  
9.2 Payment
    18  
9.3 Discretion
    18  
ARTICLE 10 CLAIMS PROCEDURES
    19  
10.1 Claim
    19  
10.2 Initial Claim
    19  
10.3 Appeals of Denied Administrative Claims
    19  
10.4 Appointment of the Named Appeals Fiduciary
    20  
ARTICLE 11 MISCELLANEOUS
    21  
11.1 Nonalienation of Benefits
    21  
11.2 Notices
    21  
11.3 Successors
    21  
11.4 Other Payments
    21  
11.5 No Contract of Employment
    21  
11.6 Severability of Provisions
    21  
11.7 Heirs, Assigns, and Personal Representatives
    21  
11.8 Headings and Captions
    21  
11.9 Gender and Number
    22  
11.10 Unfunded Plan
    22  
11.11 Payments to Incompetent Persons
    22  
11.12 Lost Payees
    22  
11.13 Controlling Law
    22  
11.14 Code Section 409A
    22  
SCHEDULE A  EXECUTIVE TIERS
    23  
SCHEDULE B  MULTIPLIER
    24  
EXHIBIT 1
    25  
EXHIBIT 2
    32  

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ARTICLE 1
BACKGROUND, PURPOSE AND TERM OF PLAN
1.1 Purpose of the Plan. The purpose of the Plan is to provide a select group of
the Company’s management and highly compensated employees with certain
compensation and benefits as set forth in the Plan in the event of the
Participant’s termination of employment with the Company in connection with to a
Change in Control. It is intended that the Plan shall at all times be maintained
on an unfunded basis for federal income tax purposes under the Code. The Plan is
intended to constitute a plan described under section 201(2) of the ERISA, and,
as such, to be exempt from all of the provisions of Parts 2, 3, and 4 of Title I
of ERISA.
1.2 Term of the Plan. The Plan shall generally be effective as of the Effective
Date. This Plan is intended to supersede any other plan, program, arrangement or
agreement providing a Participant with severance or related benefits in the case
of a Participant’s Change in Control Termination. The Plan shall continue until
terminated pursuant to Article 8 of the Plan.

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ARTICLE 2
DEFINITIONS
2.1 “Affiliate Company” shall mean any person or entity that controls, is
controlled by or is under common control with the Company. For this purpose,
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a person or entity,
whether through the ownership of voting shares, by contract or otherwise.
2.2 “Annual Bonus” shall mean 100% of the Participant’s target annual incentive
bonus for the fiscal year.
2.3 “Base Salary” shall mean the Participant’s highest annual base salary rate
in effect during the period beginning twelve (12) months immediately preceding a
Change in Control and ending on the date of a Change in Control Termination.
2.4 “Board” shall mean the Board of Directors of the Company, or any successor
thereto.
2.5 “Cause” shall mean (1) the willful and continued failure of the Participant
to perform substantially his duties with the Company or (other than any such
failure from incapacity due to physical or mental illness) after a written
demand for substantial performance is delivered to the Participant by the Board
or, with respect to officers other than the Chief Executive Officer, by the
Chief Executive Officer, which specifically identifies the manner in which the
Board believes the Participant has not substantially performed such duties,
(2) the willful engaging by the Participant in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company. For
purposes of this definition, no act or failure to act shall be considered
“willful” unless it is done, or omitted to be done, by the Participant in bad
faith or without reasonable belief that the action or omission was in the best
interests of the Company. An act may be determined to be injurious to the
Company even it if causes no monetary injury. Any act, or failure to act, based
upon authority given pursuant to a resolution duly adopted by the Board or based
upon the advice of counsel for the Company shall conclusively presumed to be
done, or omitted to be done, in good faith and in the best interests of the
Company; (3) engaging in reckless misconduct resulting in material financial or
non-financial harm to the Company; or (4) the conviction of, or a guilty or nolo
contendere plea to, a crime involving the personal enrichment of the Participant
(including but not limited to securities violations).
2.6 “Change in Control” shall have the meaning set forth in the WGL Holdings,
Inc. and Washington Gas Light Company Change in Control Policy as of the date of
the Change in Control, which is incorporated herein by reference, and a copy of
which is attached at Exhibit 1.
2.7 “Change in Control Termination” shall mean a Participant’s Involuntary
Termination or Good Reason Resignation that occurs during the period beginning
one year prior to the date of a Change in Control and ending two years after the
date of such Change in Control.
2.8 COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
2.9 “Code” shall mean the Internal Revenue Code of 1986, as amended.

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2.10 “Committee” shall mean the Human Resources Committee of the Board or such
other committee appointed by the Board to assist the Company in making
determinations required under the Plan in accordance with its terms. The
“Committee” may delegate its authority under the Plan to an individual or
another committee.
2.11 “Company” shall mean Washington Gas Light Company.
2.12 “Effective Date” shall mean December 15, 2006.
2.13 “Eligible Employee” shall mean an Employee of the Company or an Affiliate
Company who is highly compensated or holds a management position and is selected
for participation by the Committee.
2.14 “Employee” shall mean an individual employed by the Company.
2.15 “Employer” shall mean the Company.
2.16 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and regulations thereunder.
2.17 “Good Reason Resignation” shall mean any termination of employment by a
Participant that is not initiated by the Company and that is caused by any one
or more of the following events which occurs during the period beginning on the
date of a Change in Control and ending two years after the date of such Change
in Control:
     (1.A) For a Participant who is a Tier 1 Executive under Schedule A of the
Plan: Without the Participant’s written consent, assignment to the Participant
of any duties inconsistent in any material respect with the Participant’s then
current position (including having that position at the most senior resulting
entity following the Change in Control), authority, duties or responsibilities,
or any other action by the Company which, in the reasonable judgment of the
Participant, would cause him to violate his ethical or professional obligations
(after written notice of such judgment has been provided by the Participant to
the Board’s Human Resources Committee and the Company has been given a 30-day
period within which to cure such action), or which results in a significant
diminution in such position, authority, duties or responsibilities.
     (1.B) For a Participant who is a Tier 2 Executive under Schedule A of the
Plan: Without the Participant’s written consent, assignment to the Participant
of any duties inconsistent in any material respect with the Participant’s then
current position, duties or responsibilities, or any other action by the Company
which, in the reasonable judgment of the Participant, would cause him to violate
his ethical or professional obligations (after written notice of such judgment
has been provided by the Participant to the Board’s Human Resources Committee
and the Company has been given a 30-day period within which to cure such
action), or which results in a significant diminution in such position, duties
or responsibilities.
     (2) Without the Participant’s written consent, the Participant’s being
required to relocate to a principal place of employment that is both more than
thirty-five (35) miles from his existing principal place of employment, and
farther from Participant’s current residence than his existing principal place
of employment.

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     (3) Without the Participant’s written consent, the Company materially
reduces the Participant’s base salary rate or target bonus opportunity (although
the setting of goals that are perceived to be more difficult will not be
considered such a reduction), or materially reduces the aggregate value of other
incentives and retirement opportunity as determined by a third party consulting
firm of international stature based on accepted methodologies for determining
such value, or fails to allow the Participant to participate in all welfare
benefit plans, incentive, savings and retirement plan, fringe benefit plans and
vacation benefits applicable to other senior executives; or
     (4) The Company fails to obtain a satisfactory agreement from any Successor
to assume and agree to perform the Company’s obligations to the Participant
under this Plan, as contemplated in Section 11.3 herein; provided, that if the
Participant remains in employment for more than ninety (90) days following the
occurrence of (or, if later, the Participant’s gaining knowledge of) any event
set forth in Section 2.17 herein, any subsequent termination of employment by a
Participant that is not initiated by the Company shall not constitute a Good
Reason Resignation.
2.18 “Involuntary Termination” shall mean a termination of the Participant
initiated by the Company or an Affiliate Company for any reason other than
Cause, Permanent Disability or death, as provided under and subject to the
conditions of Article 3.
2.19 “Participant” shall mean any Eligible Employee who meets the requirements
of Article 3 and thereby becomes eligible for salary continuation and other
benefits under the Plan.
2.20 “Permanent Disability” Permanent Disability means, to the extent consistent
with Code section 409A, a mental or physical condition which constitutes a
“Disability” as set forth in the Washington Gas Light Company Employees’ Pension
Plan, provided such disability is expected to result in death or can be expected
to last for a continuous period of not less than 12 months.
2.21 “Plan” means the WGL Holdings, Inc. and Washington Gas Light Company Change
in Control Severance Plan for Certain Executives as set forth herein, and as the
same may from time to time be amended.
2.22 “Plan Administrator” shall mean the individual(s) appointed by the
Committee to administer the terms of the Plan as set forth herein and if no
individual is appointed by the Committee to serve as the Plan Administrator for
the Plan, the Plan Administrator shall be the Company’s Vice President and Chief
Financial Officer and Vice President, Human Resources and Organizational
Development. Notwithstanding the preceding sentence, in the event the Plan
Administrator is entitled to a Severance Benefit under the Plan, the Committee
or its delegate shall act as the Plan Administrator for purposes of
administering the terms of the Plan with respect to the Plan Administrator. The
Plan Administrator may delegate all or any portion of its authority under the
Plan to any other person(s).
2.23 “Release” shall mean the Separation of Employment Agreement and General
Release, as provided by the Company.
2.24 “Severance Benefit” shall mean the benefits to which a Participant is
entitled to receive under this Plan.

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2.25 “Specified Employee” shall mean any employee who, at any time during the
12-month period ending on the identification date, is a “specified employee”
under Section 409A of the Code. The determination of Specified Employees,
including the number and identity of persons considered Specified Employees and
the identification date, shall be made by the Human Resources Committee of the
Board of Directors of WGL Holdings, Inc. or its delegate in accordance with the
provisions of Sections 416(i) and 409A of the Code and the regulations issued
thereunder.
2.26 “Successor” shall mean any other corporation or unincorporated entity or
group of corporations or unincorporated entities which acquires ownership,
directly or indirectly, through merger, consolidation, purchase or otherwise, of
all or substantially all of the assets of the Company.
2.27 “Termination Date” shall mean the date on which the active employment of
the Participant by the Company is severed by reason of an Involuntary
Termination or a Good Reason Resignation.
2.28 “Voluntary Resignation” shall mean any termination of employment that is
not initiated by the Company other than a Good Reason Resignation.

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ARTICLE 3
PARTICIPATION AND ELIGIBILITY FOR BENEFITS
3.1 Participation. Each Participant in the Plan who incurs a Change in Control
Termination and who satisfies the conditions of Section 3.2 shall be eligible to
receive the Severance Benefits described in the Plan.
3.2 Conditions.
     (a) Eligibility for any Severance Benefit is expressly conditioned on
(i) execution by the Participant of a Release in the form provided by the
Company; (ii) compliance by the Participant with all the terms and conditions of
such Release; and (iii) the Participant’s written agreement to the
confidentiality and non-solicitation provisions in Article 6 after the
Participant’s employment with the Company. If the Plan Administrator determines,
in its sole discretion, that the Participant is not eligible for or has not
fully complied with any of the terms of the Plan, the Plan Administrator may
deny Severance Benefits not yet in pay status or discontinue the payment of the
Participant’s Severance Benefit and may require the Participant, by providing
written notice of such repayment obligation to the Participant, to repay any
portion of the Severance Benefit already received under the Plan. If the Plan
Administrator notifies a Participant that repayment of all or any portion of the
Severance Benefit received under the Plan is required, such amounts shall be
repaid within thirty (30) calendar days of the date the written notice is sent.
Any remedy under this subsection (a) shall be in addition to, and not in place
of, any other remedy, including injunctive relief, that the Company may have.
     (b) A Participant will not be eligible to receive Severance Benefits under
any of the following circumstances:
               (1) The Participant’s Voluntary Resignation;
               (2) The Participant resigns employment (other than a Good Reason
Resignation) before the job-end date specified by the Company or while the
Company still desires the Participant’s services;
               (3) The Participant’s employment is terminated for Cause;
               (4) The Participant voluntarily retires (other than a Good Reason
Resignation);

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               (5) The Participant’s employment is terminated due to the
Participant’s death or Permanent Disability;
               (6) The Participant does not return to work within six (6) months
of the onset of an approved leave of absence, other than a personal or military
leave and/or as otherwise required by applicable statute;
               (7) The Participant does not return to work within three
(3) months of the onset of an educational leave of absence;
               (8) The Participant continues in employment with the Company for
more than ninety (90) days following the occurrence of an event or events that
would permit a Good Reason Resignation; or
               (9) The Participant’s employment with the Company terminates as a
result of a Change in Control and the Participant accepts employment, or has the
opportunity to continue employment, with a Successor (other than under terms and
conditions which would permit a Good Reason Resignation).
     (c) The Plan Administrator has the sole discretion to determine a
Participant’s eligibility to receive Severance Benefits.
     (d) A Participant returning from approved military leave during the period
beginning one year before a Change in Control and ending two years after a
Change in Control will be eligible for Severance Benefits if: (i) he is eligible
for reemployment under the provisions of the Uniformed Services Employment and
Reemployment Rights Act (USERRA); (ii) his pre-military leave job is eliminated;
and (iii) the Employer’s circumstances are changed so as to make reemployment in
another position impossible or unreasonable, or re-employment would create an
undue hardship for the Employer. If the Participant returning from military
leave qualifies for Severance Benefits, his Severance Benefits will be
calculated as if he had remained continuously employed from the date he began
his military leave. The Participant must also satisfy any other relevant
conditions for payment or repayment, including execution of a Release.

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ARTICLE 4
DETERMINATION OF SEVERANCE BENEFITS
4.1 Amount of Severance Benefits Upon Involuntary Termination and Good Reason
Resignation . The Severance Benefit to be provided to an Participant who incurs
a Change in Control Termination and is determined to be eligible for Severance
Benefits shall be as follows:
     (a) Salary Replacement Benefits. Salary Replacement Benefits shall be the
aggregate of:
     (1) The sum of (i) Participant’s Base Salary through his termination date
to the extent not theretofore paid; (ii) the product of the Participants Annual
Bonus in the fiscal year that includes the Participant’s Termination Date and
(y) a fraction, the numerator of which is the number of days in the current
fiscal year through the Participant’s Termination Date, and the denominator of
which is 365, and (3) any accrued vacation pay, to the extent not theretofore
paid; and
(2) an amount equal to the product of (x) the sum of (i) the Participant’s Base
Salary plus (ii) the Participant’s Annual Bonus, and (y) the multiplier
applicable to the Participant set forth under Schedule B to the Plan.
     (b) Medical and Dental Replacement Benefits.
                (1) The Participant shall continue to be eligible to participate
in the medical, dental coverage in effect at the date of his or her Termination
Date (or generally comparable coverage) for himself or herself and, where
applicable, his or her spouse and dependents, as the same may be changed from
time to time for employees of the Company generally, as if Participant had
continued in employment during the period described in Section 4908B(f) of the
Code (the “COBRA Continuation Coverage Period”). The Company shall be
responsible for the payment of the employee portion of the medical and dental
contributions that are required during the COBRA Continuation Period, or if a
lesser period, for the number of months remaining in the period of years equal
to the multiplier applicable to the Participant set forth under Schedule B to
the Plan (the “Multiplier Period”). Any payment under this paragraph that is
includible in the Participant’s gross income shall be increased by an additional
amount equal to the Federal income tax applicable to such payment determined by
applying the highest marginal Federal tax rate in effect at the payment date.
                (2) To the extent that the COBRA Continuation Period is shorter
than Multiplier Period, the Company will pay to the Participant an amount equal
to 102% of the Company’s cost of providing the Participant (and where applicable
under the terms of coverage at the Termination Date, his spouse and dependents)
coverage to that provided under the Company’s medical and dental plans for the
period of time between the end of the COBRA Continuation Coverage Period and end
of the Multiplier Period. Any payment under this paragraph shall be increased by
an additional amount equal to the Federal income tax applicable to such payment
determined by applying the highest marginal Federal tax rate in effect at the
payment date.

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     (c) 2005 SERP Credit. The Company shall credit the Participant with up to
an additional number of years of benefit service (but shall not credit such
additional years in determining the Participant’s age) under the 2005 SERP,
which number of years shall be equal to the multiplier applicable to such
Participant under Schedule B, but in no event shall such additional years of
benefit service, when added to the Participant’s years of benefit service under
the 2005 SERP, exceed the maximum under the 2005 SERP;
     (d) Outplacement Service. The Company shall, at its sole expense as
incurred, provide the Participant with up to $25,000 in outplacements services,
the scope and provider of which shall be selected by the Participant; provided
such outplacement services shall not be paid by the Company if incurred more
that twelve (12) months after the Participant’s Termination Date.
     (e) Other Amounts. To the extent not theretofore paid of provided, the
Company shall timely pay or provide the Participant with any other amounts or
benefits required to be paid or provided or which the Participant is eligible to
receive under any plan, program, policy, practice, contract or agreement of the
Company.
4.2 Voluntary Resignation; Termination for Death or Permanent Disability. If the
Participant’s employment terminates on account of (i) the Participant’s
Voluntary Resignation, (ii) retirement, (iii) death, or (iv) Permanent
Disability, then the Participant shall not be entitled to receive Severance
Benefits under this Plan and shall be entitled only to those benefits (if any)
as may be available under the Company’s then-existing benefit plans and policies
at the time of such termination.
4.3 Termination for Cause. If any Participant’s employment terminates on account
of termination by the Company for Cause, the Participant shall not be entitled
to receive Severance Benefits under this Plan and shall be entitled only to
those benefits that are legally required to be provided to the Participant.
Notwithstanding any other provision of the Plan to the contrary, if the Plan
Administrator determines that a Participant has engaged in conduct that
constitutes Cause at any time prior to the Participant’s Termination Date, any
entitlement to a Severance Benefit payable to the Participant under Section 4.1
of the Plan shall immediately cease. The Company may withhold paying Severance
Benefits under the Plan pending resolution of an inquiry that could lead to a
finding resulting in Cause. If the Company has offset other payments owed to the
Participant under any other plan or program, it may, in its sole discretion,
waive its repayment right solely with respect to the amount of the offset so
credited.
4.4 Reduction of Severance Benefits. The Plan Administrator reserves the right
to make deductions in accordance with applicable law and consistent with Code
Section 409A and the regulations issued thereunder for any monies owed to the
Company by the Participant or the value of Company property that the Participant
has retained in his possession.

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4.5 Additional Benefits.
     (a) Anything in this Plan to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the Company to or for
the benefit of a Participant (whether paid or provided pursuant to the terms of
this Plan or otherwise) (a “Payment”) would exceed the limit for deductible
payments under Code section 280G by 10% or more, the Participant shall be
entitled to receive an additional payment (“Gross-up Payment”). The Gross-up
Payment shall be an amount such that, after payment by the Participant of (i)
all income taxes, including, any interest and penalties imposed with respect
thereto, and (ii) the excise tax imposed by Code section 4999 and any interest
or penalties with respect thereto (such excise tax, together with any interest
and penalties, collectively “Excise Tax”) imposed upon the Gross-up Payment, the
Participant retains an amount of the Gross-up Payment equal to the Excise Tax
imposed upon the Payment.
     (b) Anything in this Plan to the contrary notwithstanding, in the event it
shall be determined that any Payment or distribution by the Company to or for
the benefit of a Participant would exceed the limit for deductible payments
under Code Section 280G by less than 10%, then the aggregate present value of
the benefits provided to the Participant pursuant to the rights granted under
this Plan (such benefits are hereinafter referred to as “Plan Payments”) shall
be reduced to the Reduced Amount. The “Reduced Amount” shall be an amount
expressed in present value which maximizes the aggregate present value of Plan
Payments without causing any Payment to be nondeductible by the Company because
of Section 280G of the Code. For purposes of this Section 4.5(b), present value
shall be determined in accordance with Section 280G(d)(4) of the Code. If Plan
Payments are to be reduced, the Participant shall determine which Plan Payments
shall be reduced to comply with this Section 4.5(b).
     (c) All determinations required to be made under Section 4.5(a) shall be
made by the accounting firm (or other company whose regular business includes
the performance of such calculations) that the Company selects (the “Determining
Firm”), which shall provide detailed supporting calculations to both to the
Company and the Participant as soon as practicable, but in no event later than
45 days, after the participant’s Termination Date. Any such determination by the
Determining Firm shall be binding upon the Company and the Participant.
     (d) All payments due under section 4.5(a) shall be made by the Company in a
lump sum in accordance with the terms of section 5.1. Notwithstanding anything
in Plan to the contrary, to the extent required for compliance with Code section
409A, payment of the benefits described in this Section 4.5 shall not be paid
before the date that is six months from his Termination Date (or date of death
if earlier). In no event will interest be credited on the unpaid balance for
which a Participant may become eligible.
4.6 Legal Expense Reimbursement. Anything in this Plan to the contrary
notwithstanding, in the event that a Participant litigates any denial of
benefits under this Plan and a court enters a final order requiring the Plan to
pay benefits, then the Company will reimburse the Participant for his or her
legal expenses associated with this litigation, provided that the lifetime
aggregate

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maximum legal expense reimbursement for any Participant under the Plan shall be
$150,000.00. Payment of any legal expense reimbursement shall be made to the
Participant on the first business day of the month next following the Company’s
receipt of notification of the final court order and evidence, satisfactory to
the Company, of the Participant’s legal expenses eligible for reimbursement
under this Section 4.6.

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ARTICLE 5
METHOD, DURATION AND LIMITATION OF SEVERANCE BENEFIT PAYMENTS
5.1 Method of Payment. The cash Severance Benefits to which a Participant is
entitled, as determined pursuant to Article 4, shall be paid in a single lump
sum payment. Payment shall be made by mailing to the last address provided by
the Participant to the Company or such other reasonable method as determined by
the Plan Administrator. The payment shall be made on the 65th day following the
Participant’s Termination Date, but will only be paid if the Participant has
executed and not revoked a Release in the form provided by the Company. All
payments of Severance Benefits are subject to applicable federal, state and
local taxes and withholdings. In the event of the Participant’s death prior to
payment being made, the amount of such payment shall be paid to the
Participant’s estate. Notwithstanding the preceding, to the extent required for
compliance with Code section 409A, payment of Severance Benefits to a
Participant who is a Specified Employee shall not be paid before the date that
is six months from his Termination Date (or date of death if earlier). In no
event will interest be credited on the unpaid balance for which a Participant
may become eligible.
5.2 Other Arrangements. The Severance Benefits under this Plan are not additive
or cumulative to severance or termination benefits that a Participant might also
be entitled to receive under the terms of a written employment agreement, a
severance agreement or any other arrangement with the Company, including,
without limitation, the Executive Severance Plan. As a condition of
participating in the Plan, the Participant must expressly agree that this Plan
supersedes all prior plans or agreements providing for severance benefits upon a
Change in Control Termination, other than benefits (i) specified in the WGL
Holdings, Inc. and Washington Gas Light Company Change in Control Policy, or
(ii) provided under an Award granted under the WGL Holdings, Inc. 1999 Incentive
Compensation Plan prior to the Effective Date of this Plan, and sets forth the
entire Severance Benefit the Participant is entitled to while a Participant in
the Plan. The provisions of this Plan may provide for payments to the
Participant under certain compensation or bonus plans under circumstances where
such plans would not provide for payment thereof. It is the specific intention
of the Company that the provisions of this Plan shall supersede any provisions
to the contrary in such plans, to the extent permitted by applicable law, and
such plans shall be deemed to be have been amended to correspond with this Plan
without further action by the Company or the Board.
5.3 Termination of Eligibility for Benefits.
     (a) All Participants shall cease to be eligible to participate in the Plan,
and all Severance Benefit payments shall cease upon the occurrence of the
earlier of:
              (1) Subject to Article 8, termination or modification of the Plan;
or
              (2) Completion of payment to the Participant of the Severance
Benefit for which the Participant is eligible under Article 4.

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     (b) Notwithstanding anything herein to the contrary, the Company shall have
the right to cease all Severance Benefit payments and to recover payments
previously made to the Participant should the Participant at any time breach the
Participant’s undertakings under the terms of the Plan, the Release the
Participant executed to obtain the Severance Benefits under the Plan or the
confidentiality and non-solicitation provisions of Article 6.

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ARTICLE 6
CONFIDENTIALITY, COVENANT NOT TO COMPETE AND NOT TO SOLICIT
6.1 Post-Employment Restrictions. All Severance Benefits payable under this Plan
are subject to the Participant’s compliance with the Company’s Post-Employment
Restriction Policy as of the date of the Change in Control, which is
incorporated herein by reference, and a copy of which is attached as Exhibit 2.
6.2 Equitable Relief.
     (a) By participating in the Plan, the Participant acknowledges that the
restrictions contained in the Post-Employment Restriction Policy are reasonable
and necessary to protect the legitimate interests of the Company, that the
Company would not have established this Plan in the absence of such
restrictions, and that any violation of any provision of this Article will
result in irreparable injury to the Company. By agreeing to participate in the
Plan, the Participant represents that his experience and capabilities are such
that the restrictions of the Post-Employment Restriction Policy will not prevent
the Participant from obtaining employment or otherwise earning a living at the
same general level of economic benefit as is currently the case. The Participant
further represents and acknowledges that (i) he or she has been advised by the
Company to consult his own legal counsel in respect of this Plan, and (ii) that
he or she has had full opportunity, prior to agreeing to participate in this
Plan, to review thoroughly this Plan with his counsel.
     (b) The Participant agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits and
other benefits arising from any violation of this Article 6, which rights shall
be cumulative and in addition to any other rights or remedies to which the
Company may be entitled. In the event that any of the provisions of this
Article 6 should ever be adjudicated to exceed the time, geographic, service, or
other limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, service, or other limitations permitted by applicable law.
     (c) The Participant irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of this Article 6, including
without limitation, any action commenced by the Company for preliminary and
permanent injunctive relief or other equitable relief, may be brought in the
United States District Court for the District of Columbia, or if such court does
not have jurisdiction or will not accept jurisdiction, in any court of general
jurisdiction in the District of Columbia or the Commonwealth of Virginia,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, (iii) waives any objection which Participant may
have to the laying of venue of any such suit, action or proceeding in any such
court, and (iv) agrees to waive any right to a jury trial. Participant also
irrevocably and unconditionally consents to the service of any process,
pleadings, notices or other papers in a manner permitted by the notice
provisions of Section 11.2.

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6.3 Survival of Provisions. The obligations contained in this Article 6 shall
survive the termination of Participant’s employment with the Company and shall
be fully enforceable thereafter.

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ARTICLE 7
THE PLAN ADMINISTRATOR
7.1 Authority and Duties. It shall be the duty of the Plan Administrator, on the
basis of information supplied to it by the Company and the Committee, to
properly administer the Plan. The Plan Administrator shall have the full power,
authority and discretion to construe, interpret and administer the Plan, to make
factual determinations, to correct deficiencies therein, and to supply
omissions. All decisions, actions and interpretations of the Plan Administrator
shall be final, binding and conclusive upon the parties, subject only to
determinations by the Named Appeals Fiduciary (as defined in Section 10.4), with
respect to denied claims for Severance Benefits. The Plan Administrator may
adopt such rules and regulations and may make such decisions as it deems
necessary or desirable for the proper administration of the Plan.
7.2 Compensation of the Plan Administrator. The Plan Administrator shall receive
no compensation for services as such. However, all reasonable expenses of the
Plan Administrator shall be paid or reimbursed by the Company upon proper
documentation. The Plan Administrator shall be indemnified by the Company
against personal liability for actions taken in good faith in the discharge of
the Plan Administrator’s duties.
7.3 Records, Reporting and Disclosure. The Plan Administrator shall keep a copy
of all records relating to the payment of Severance Benefits to Participants and
former Participants and all other records necessary for the proper operation of
the Plan. All Plan records shall be made available to the Committee, the Company
and to each Participant for examination during business hours except that a
Participant shall examine only such records as pertain exclusively to the
examining Participant and to the Plan. The Plan Administrator shall prepare and
shall file as required by law or regulation all reports, forms, documents and
other items required by ERISA, the Code, and every other relevant statute, each
as amended, and all regulations thereunder (except that the Company, as payor of
the Severance Benefits, shall prepare and distribute to the proper recipients
all forms relating to withholding of income or wage taxes, Social Security
taxes, and other amounts that may be similarly reportable).

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ARTICLE 8
AMENDMENT, TERMINATION AND DURATION
8.1 Amendment, Suspension and Termination. Except as otherwise provided in this
Section 8.1, the Board or its delegee shall have the right, at any time and from
time to time, to amend, suspend or terminate the Plan in whole or in part, for
any reason or without reason, and without either the consent of or the prior
notification to any Participant, by a formal written action. No such amendment
shall give the Company the right to recover any amount paid to a Participant
prior to the date of such amendment or to cause the cessation of any Severance
Benefit already approved for a Participant who has executed a Release as
required under Section 3.2. Notwithstanding the foregoing, no Plan amendment
that reduces any Severance Benefit payable under this Plan, and no Plan
termination or suspension shall be effective for a period beginning one year
prior to a Change in Control and ending two years after a Change in Control. In
addition, no Participant may be removed as a Participant during such period with
respect to any Severance Benefit payable with respect to that Change in Control,
although a Participant may be removed during such period with respect to a
subsequent Change in Control.
8.2 Duration. The Plan shall continue in full force and effect until termination
of the Plan pursuant to Section 8.1; provided, however, that after the
termination of the Plan, if a Participant’ employment is terminated on account
of a Change in Control Termination prior to the termination of the Plan, the
Plan shall remain in effect until all of the obligations of the Company
hereunder are satisfied with respect to such Participants.

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ARTICLE 9
DUTIES OF THE COMPANY, THE COMMITTEE, AND THE PLAN ADMINISTRATOR
9.1 Records. The Company shall supply to the Plan Administrator all records and
information necessary to the performance of the Plan Administrator’s duties.
9.2 Payment. Payments of Severance Benefits to Participants shall be made in
such amount as determined by the Plan Administrator under Article 4, from the
Company’s general assets or from a supplemental unemployment benefits trust, in
accordance with the terms of the Plan, as directed by the Committee.
9.3 Discretion. Any decisions, actions or interpretations to be made under the
Plan by the Board, the Committee and the Plan Administrator, acting on behalf of
either, shall be made in each of their respective sole discretion, not in any
fiduciary capacity and need not be uniformly applied to similarly situated
individuals and such decisions, actions or interpretations shall be final,
binding and conclusive upon all parties. As a condition of participating in the
Plan, the Participant acknowledges that all decisions and determinations of the
Board, the Committee and the Plan Administrator shall be final and binding on
the Participant, his beneficiaries and any other person having or claiming an
interest under the Plan on his behalf.

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ARTICLE 10
CLAIMS PROCEDURES
10.1 Claim. Each Participant under this Plan may contest only the administration
of the Severance Benefits awarded by completing and filing with the Plan
Administrator a written request for review in the manner specified by the Plan
Administrator. No appeal is permissible as to a Participant’s eligibility for or
amount of the Severance Benefit, which are decisions made solely within the
discretion of the Company, and the Committee acting on behalf of the Company. No
person may bring an action for any alleged wrongful denial of Plan benefits in a
court of law unless the claims procedures described in this Article 10 are
exhausted and a final determination is made by the Plan Administrator and/or the
Named Appeals Fiduciary. If the terminated Participant or interested person
challenges a decision by the Plan Administrator and/or Named Appeals Fiduciary,
a review by the court of law will be limited to the facts, evidence and issues
presented to the Plan Administrator during the claims procedure set forth in
this Article 10. Facts and evidence that become known to the terminated
Participant or other interested person after having exhausted the claims
procedure must be brought to the attention of the Plan Administrator for
reconsideration of the claims administrator. Issues not raised with the Plan
Administrator and/or Named Appeals Fiduciary will be deemed waived.
10.2 Initial Claim. Before the date on which payment of a Severance Benefit
commences, each such application must be supported by such information as the
Plan Administrator deems relevant and appropriate. In the event that any claim
relating to the administration of Severance Benefits is denied in whole or in
part, the terminated Participant or his beneficiary (“claimant”) whose claim has
been so denied shall be notified of such denial in writing by the Plan
Administrator within ninety (90) days after the receipt of the claim for
benefits. This period may be extended an additional ninety (90) days if the Plan
Administrator determines such extension is necessary and the Plan Administrator
provides notice of extension to the claimant prior to the end of the initial
ninety (90) day period. The notice advising of the denial shall specify the
following: (i) the reason or reasons for denial, (ii) make specific reference to
the Plan provisions on which the determination was based, (iii) describe any
additional material or information necessary for the claimant to perfect the
claim (explaining why such material or information is needed), and (iv) describe
the Plan’s review procedures and the time limits applicable to such procedures,
including a statement of the claimant’s right to bring a civil action under
section 502(a) of ERISA following an adverse benefit determination on review.
10.3 Appeals of Denied Administrative Claims. All appeals shall be made by the
following procedure:
     (a) A claimant whose claim has been denied shall file with the Plan
Administrator a notice of appeal of the denial. Such notice shall be filed
within sixty (60) calendar days of notification by the Plan Administrator of the
denial of a claim, shall be made in writing, and shall set forth all of the
facts upon which the appeal is based. Appeals not timely filed shall be barred.
     (b) The Named Appeals Fiduciary shall consider the merits of the claimant’s
written presentations, the merits of any facts or evidence in support of the
denial of

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benefits, and such other facts and circumstances as the Named Appeals Fiduciary
shall deem relevant.
     (c) The Named Appeals Fiduciary shall render a determination upon the
appealed claim which determination shall be accompanied by a written statement
as to the reasons therefore. The determination shall be made to the claimant
within sixty (60) days of the claimant’s request for review, unless the Names
Appeals Fiduciary determines that special circumstances requires an extension of
time for processing the claim. In such case, the Named Appeals Fiduciary shall
notify the claimant of the need for an extension of time to render its decision
prior to the end of the initial sixty (60) day period, and the Named Appeals
Fiduciary shall have an additional sixty (60) day period to make its
determination. The determination so rendered shall be binding upon all parties.
If the determination is adverse to the claimant, the notice shall provide
(i) the reason or reasons for denial, (ii) make specific reference to the Plan
provisions on which the determination was based, (iii) a statement that the
claimant is entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
to a the claimant’s claim for benefits, and (iv) state that the claimant has the
right to bring an action under section 502(a) of ERISA.
10.4 Appointment of the Named Appeals Fiduciary. The Named Appeals Fiduciary
shall be the person or persons named as such by the Board or Committee, or, if
no such person or persons be named, then the person or persons named by the Plan
Administrator as the Named Appeals Fiduciary. Named Appeals Fiduciaries may at
any time be removed by the Board or Committee, and any Named Appeals Fiduciary
named by the Plan Administrator may be removed by the Plan Administrator. All
such removals may be with or without cause and shall be effective on the date
stated in the notice of removal. The Named Appeals Fiduciary shall be a “Named
Fiduciary” within the meaning of ERISA, and unless appointed to other fiduciary
responsibilities, shall have no authority, responsibility, or liability with
respect to any matter other than the proper discharge of the functions of the
Named Appeals Fiduciary as set forth herein.

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ARTICLE 11
MISCELLANEOUS
11.1 Nonalienation of Benefits. None of the payments, benefits or rights of any
Participant shall be subject to any claim of any creditor of any Participant,
and, in particular, to the fullest extent permitted by law, all such payments,
benefits and rights shall be free from attachment, garnishment (if permitted
under applicable law), trustee’s process, or any other legal or equitable
process available to any creditor of such Participant. No Participant shall have
the right to alienate, anticipate, commute, plead, encumber or assign any of the
benefits or payments that he may expect to receive, continently or otherwise,
under this Plan, except for the designation of a beneficiary as set forth in
Section 5.1.
11.2 Notices. All notices and other communications required hereunder shall be
in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
service. In the case of the Participant, mailed notices shall be addressed to
him or her at the home address which he or she most recently communicated to the
Company in writing. In the case of the Company, mailed notices shall be
addressed to the Plan Administrator.
11.3 Successors. Any Successor shall assume the obligations under this Plan and
expressly agree to perform the obligations under this Plan.
11.4 Other Payments. Except as otherwise provided in this Plan, no Participant
shall be entitled to any cash payments or other severance benefits under any of
the Company’s then current severance pay policies for a termination that is
covered by this Plan for the Participant.
11.5 No Contract of Employment. Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund, trust or account, nor the
payment of any benefits shall be construed as giving any Participant or any
person whosoever, the right to be retained in the service of the Company, and
all Participants shall remain subject to discharge to the same extent as if the
Plan had never been adopted.
11.6 Severability of Provisions. If any provision of this Plan shall be held
invalid or unenforceable by a court of competent jurisdiction, such invalidity
or unenforceability shall not affect any other provisions hereof, and this Plan
shall be construed and enforced as if such provisions had not been included.
11.7 Heirs, Assigns, and Personal Representatives. This Plan shall be binding
upon the heirs, executors, administrators, successors and assigns of the
parties, including each Participant, present and future.
11.8 Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of the Plan, and
shall not be employed in the construction of the Plan.

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11.9 Gender and Number. Where the context admits: words in any gender shall
include any other gender, and, except where otherwise clearly indicated by
context, the singular shall include the plural, and vice-versa.
11.10 Unfunded Plan. The Plan shall not be funded. No Participant shall have any
right to, or interest in, any assets of the Company that may be applied by the
Company to the payment of Severance Benefits.
11.11 Payments to Incompetent Persons. Any benefit payable to or for the benefit
of a minor, an incompetent person or other person incapable of receipting
therefore shall be deemed paid when paid to such person’s guardian or to the
party providing or reasonably appearing to provide for the care of such person,
and such payment shall fully discharge the Company, the Committee and all other
parties with respect thereto.
11.12 Lost Payees. A benefit shall be deemed forfeited if the Plan Administrator
is unable to locate a Participant to whom a Severance Benefit is due. Such
Severance Benefit shall be reinstated if application is made by the Participant
for the forfeited Severance Benefit while this Plan is in operation.
11.13 Controlling Law. This Plan shall be construed and enforced according to
the laws of the Commonwealth of Virginia to the extent not superseded by Federal
law.
11.14 Code Section 409A It is the intent of the Company that, the Plan be
interpreted in a manner that satisfies the requirements of Code Section 409A. If
any provision of the Plan would otherwise frustrate or conflict with such
intent, that provision shall be interpreted and deemed amended so as to avoid
such conflict. In accordance with Section 1.409A-3(d) of the Treasury
Regulations issued by the Secretary, a distribution under this Plan will be
treated as made on the designated payment date if the payment is made (i) at
such date or a later date within the same calendar year, or if later, by the
15th day of the third month following the date designated in the Plan (provided
the Participant may not, directly or indirectly, designate the year of payment),
or (ii) at a date no earlier that 30 days before the designated payment date
(provided the Participant may not directly or indirectly designate the taxable
year of the payment).
* * * * *
IN WITNESS WHEREOF, Washington Gas Light Company has caused its authorized
officers to execute this instrument in its name and on its behalf.
WASHINGTON GAS LIGHT COMPANY
By:                                                                       
         
Date:                                                                         

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SCHEDULE A

 

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SCHEDULE B
MULTIPLIER

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EXHIBIT 1
WGL Holdings, Inc. and Washington Gas Light Company
Change In Control Policy
As Amended November 13, 2008

I.   Purpose. This Change in Control Policy (this “Policy”) defines a Change in
Control for purposes of determining when Change in Control actions occur under
the various WGL Holdings, Inc. and /Washington Gas Light Company benefit plans.
Establishing this Policy is intended to facilitate the Policy administrator’s
review and modification, if and as desired, to the definition of a Change in
Control, and to ensure consistency in such definition with respect to all plans
and programs that accelerate vesting or otherwise provide for payments triggered
by a Change in Control.   II.   Effective Date. This Change in Control Policy,
originally adopted on December 15, 2006, is amended effective October 1, 2007).
  III.   Application.

  A.   This Policy applies to the following plans and arrangements:

  1.   The Washington Gas Light Company 2005 Supplemental Executive Retirement
Plan     2.   The WGL Holdings, Inc. and Washington Gas Light Company Change in
Control Severance Plan for Certain Executives     3.   The WGL Holdings, Inc.
Omnibus Incentive Compensation Plan (for awards on and after October 1, 2007)  
  4.   Any future plans or arrangements established with a Change in Control
vesting trigger.

  B.   The effect of a Change in Control on the current plans and arrangements
is as follows:

  1.   The Washington Gas Light Company 2005 Supplemental Executive Retirement
Plan — full and immediate vesting upon a Change in Control     2.   The WGL
Holdings, Inc. and Washington Gas Light Company Change in Control Severance Plan
for Certain Executives- triggers payment of Change in Control benefits for
involuntary termination or voluntary termination with good reason (a “qualified
termination”)     3.   The WGL Holdings, Inc. Omnibus Incentive Compensation
Plan - unless otherwise provided by the Committee in award agreements

 

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  a.   Stock Options granted on or after December 15, 2006:

  i.   50% of each grant of unvested options will fully vest     ii.   50% of
each grant of unvested options will vest according to terms of option agreement:

  a)   if WGL is surviving entity and publicly traded (NYSE or NASDAQ)

  1)   full vesting if option holder is subject to an involuntary or qualified
termination     2)   continue current vesting if there is no involuntary or
qualified termination of employment

  b)   if WGL is not surviving entity or not publicly traded — full vesting (and
conversion to acquiror stock, or if not possible, cash out of option spread)

  b.   Stock Options granted prior to December 15, 2006 shall be governed by
their terms.     c.   Performance stock and performance unit awards granted on
or after December 15, 2006:

  i.   50% of each grant of performance stock and performance units will fully
vest upon a Change in Control     ii.   50% of each grant of performance stock
and performance units will vest according to terms of award:

  a)   if WGL is surviving entity and publicly traded (NYSE or NASDAQ)

  1)   full cash out at target performance if employee is subject to an
involuntary or qualified termination     2)   full cash out at performance if
plan is terminated and awards are not replaced with equitable arrangement     3)
  vesting continues under current award if plan continues and employment
continues

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  b)   if WGL is not surviving entity or not publicly traded the plan will
terminate with full cash out at target performance- full vesting (and, with
respect to performance stock, conversion to acquiror stock, or if not possible,
cash out of option spread)

  d.   Performance stock awards granted prior to December 15, 2006, 2006 shall
be governed by their terms.

IV.   Administration.

  A.   This Policy shall be administered by the Human Resources Committees (the
“Committee”) of the Boards of Directors of WGL Holdings, Inc. and Washington Gas
Light Company, or such other committee identified by the Boards     B.   The
Committee has the full and final authority to modify, amend or otherwise change
any part of all of the definition of a Change in Control; provided no such
change shall be effective sooner than 12-months after it is adopted

V.   Change in Control.

  A.   Overview. The definition of Change in Control under the Policy shall be
the same definition as set forth in the previously effective, now superseded,
Washington Gas Light Company Employment Agreements with certain executives that
were effective on a change of control, except that a merger, consolidation or
sale of all or substantially all of the assets of WGL Holdings, Inc. or
Washington Gas Light Company will not trigger a Change in Control if a change in
the ownership of WGL Holdings, Inc. or Washington Gas Light Company is less than
67% of the pre-change ownership (instead of the current 50%); specifically:

  1.   “Change of Control” means:

  a.   The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”), of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either
(i) the then-outstanding shares of common stock of WGL Holdings, Inc. or (ii)
the combined voting power of the then-outstanding voting securities of WGL
Holdings, Inc. entitled to vote generally in the election of directors;
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from WGL Holdings, Inc., (ii) any acquisition by WGL Holdings, Inc. or
any corporation controlled by or otherwise affiliated with WGL Holdings, Inc.,
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by WGL Holdings, Inc. or any corporation controlled by or
otherwise

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      affiliated with WGL Holdings, Inc.; or (iv) any transaction described in
clauses (i), (ii), and (iii) of subsection (d) of this definition; or          
b.   Individuals who, as of the close of business on November 1, 2000,
constituted the Board of Directors of WGL Holdings, Inc. (the “Incumbent WGL
Holdings, Inc. Board”) cease for any reason to constitute at least a majority of
the Board of Directors of WGL Holdings, Inc.; provided, however, that any
individual becoming a director subsequent to November 1, 2000 whose election, or
nomination for election by WGL Holdings, Inc.’s shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent WGL
Holdings, Inc. Board shall be considered as though such individual were a member
of the Incumbent WGL Holdings, Inc. Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Incumbent WGL Holdings, Inc. Board; or  
  c.   The acquisition by any Person of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either
(i) the then-outstanding shares of common stock of Washington Gas Light Company
(the “Utility”) or (ii) the combined voting power of the then-outstanding voting
securities of the Utility entitled to vote generally in the election of
directors, provided, however, that for purposes of this subsection (c), the
following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Utility, (ii) any acquisition by the Utility or
any corporation controlled by or otherwise affiliated with the Utility,
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Utility or any corporation controlled by or otherwise
affiliated with the Utility; or (iv) any transaction described in clauses
(i) and (ii) of subsection (e) of this definition;     d.   Consummation of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the WGL Holdings, Inc. (a “Business
Combination”), in each case unless, following such Business Combination, (i) all
or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding WGL Holdings, Inc. common stock and
outstanding WGL Holdings, Inc. voting securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 67% of,
respectively, the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the

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      case may be, of the corporation resulting from such Business Combination
in substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the outstanding WGL Holdings, Inc. common stock
and outstanding WGL Holdings, Inc. voting securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of WGL Holdings,
Inc. or such corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 30% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such Business
Combination, or the combined voting power of the then-outstanding voting
securities of such corporation, except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent WGL Holdings, Inc. Board at the time
of the execution of the initial agreement, or of such Incumbent WGL Holdings,
Inc. Board, providing for such Business Combination; or     e.   Consummation of
a reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Utility (a “Utility Business
Combination”), in each case unless, following such Utility Business Combination,
(i) all or substantially all of the individuals and entities who were the
beneficial owners, directly or indirectly, respectively, of the outstanding
Utility common stock and the outstanding Utility voting securities immediately
prior to such Utility Business Combination beneficially own, directly or
indirectly, more than 67% of, respectively, the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Utility Business Combination in
substantially the same proportions as their ownership, immediately prior to such
Utility Business Combination, of the outstanding Utility common stock and
outstanding Utility voting securities, as the case may be, and (ii) no Person
(excluding any corporation resulting from such Utility Business Combination or
any employee benefit plan (or related trust) of the Utility or such corporation
resulting from such Utility Business Combination) beneficially owns, directly or
indirectly, 30% or more of, respectively, the then-outstanding shares of common
stock of the corporation resulting from such Utility Business Combination, or
the combined voting power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior to the
Utility Business Combination; or

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  f.   Approval by the shareholders of WGL Holdings, Inc. of a complete
liquidation or dissolution of WGL Holdings, Inc.

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EXHIBIT 2
Washington Gas Light Company
Policy of Post-Employment Restrictions

I.   Purpose. The policy on post-employment restrictions is to define the scope
of restrictions that will apply to post-employment actions undertaken by
executives who receive benefits under the various WGL Holdings, Inc./Washington
Gas Light Company benefit plans. This policy is intended to assist WGL Holdings,
Inc. and Washington Gas Light Company protect (i) confidential information
belonging to such companies that its executives have had access to and posses
due to the nature of their positions, and (ii) the competitive business
operations of such companies.   II.   Application.

  A.   The policy will apply to and be incorporated by reference into the
following plans and arrangements:

  1.   The Washington Gas Light Company Executive Severance Plan     2.   Any
future plans or arrangements established with reference to this policy.

III.   Post-Employment Restrictions:

  A.   Restricted Period. The Restrictions on Activities set forth in this
policy shall apply for a period of one year following the executive’s
termination of employment date regardless of cause.     B.   Restriction on
Activities. Except as specifically permitted, in writing by the HR Committee of
the Board of WGL Holdings, Inc., and Washington Gas Light Company (the “Board”),
this policy shall prohibit:

  1.   Solicitation of Employees. The direct or indirect recruitment,
solicitation, inducement or hiring of any person or entity who during the period
within one year prior to the executive’s termination of employment was an
employee or independent contractor of WGL Holdings, Inc. and/or Washington Gas
Light Company, to leave or cease employment or other relationship with WGL
Holdings, Inc. and/or Washington Gas Light Company, provided this restriction
shall not apply to the hiring of any persons or entities to perform personal
services that are not directly or indirectly in competition with WGL Holdings,
Inc, or Washington Gas Light Company.

 

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  2.   Solicitation of Customers. The solicitation or initiation of
communications or contacts with any customer or prospective customer of WGL
Holdings, Inc. and/or Washington Gas Light Company with the intent of soliciting
business or diverting business from WGL Holdings, Inc. and/or Washington Gas
Light Company.     3.   Disclosure of Confidential Information. For purposes of
this paragraph “Confidential Information” shall mean confidential information
the disclosure of which or use of which may damage WGL Holdings, Inc. and/or
Washington Gas Light Company. Confidential Information shall include, but not be
limited to non-public information regarding computer programs, discoveries or
improvements, marketing, manufacturing, or organizational research and
development, or business plans; sales forecasts; personnel information,
including the identity of employees, their responsibilities, competence,
abilities, and compensation; pricing and financial information; current and
prospective customer lists and information on customers or their employees;
information concerning planned or pending acquisitions or divestitures; and
information concerning purchases of major equipment or property. Confidential
Information does not include information which is or enters the public domain
through no action or inaction of the executive, is obtained by the executive
from a third party having the legal right to use and disclose same, or was in
the possession of the executive before his employment with WGL Holdings, Inc. or
Washington Gas Light Company.

IV.   Administration.

  A.   The Policy will be administered by the HR Committee of the Board, or such
other committee identified by the Board     B.   The Committee will have the
full and final authority to modify, amend or otherwise change any part of all of
the policy.

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