Exhibit 10.01

WGL Holdings, Inc.
1999 Incentive Compensation Plan
Nonqualified Stock Option Award Agreement

TO: ______________________(Participant)

     You have been selected to be a Participant in the WGL Holdings, Inc. 1999
Incentive Compensation Plan As Amended and Restated on March 5, 2003 (the
“Plan”).* In accordance with the Plan, you have been awarded a certain stock
option, as specified below:

Date of Grant: ________________

Number of Shares Covered by this Option: _________________ (the “Shares”)

Exercise Price: _____________________ (the “Exercise Price”)

Date of Vesting: ________________________ (the “Vesting Date”)

Date of Expiration: _____________________ (the “Date of Expiration”)

     THIS AGREEMENT, effective as of the Date of Grant set forth above,
represents the grant of a nonqualified stock option (the “Option”) to acquire
shares of common stock of WGL Holdings, Inc. (the “Company”), to you, the
Participant named above, pursuant to the provisions of the Plan and subject to
terms and conditions of this Agreement.

     The Plan provides a complete description of the terms and conditions
governing the Option. If there is any inconsistency between the terms of this
Agreement and the terms of the Plan, the Plan’s terms shall completely supersede
and replace the conflicting terms of this Agreement. All capitalized terms have
the meanings ascribed to them in the Plan, unless otherwise indicated in this
Agreement.

     In accordance with the Plan and this Option, the parties hereto agree as
follows:

     1. Grant of Stock Option. The Company hereby grants to the Participant an
Option to purchase the number of Shares of the Company set forth above, at the
stated Exercise

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*NOTE:   Effective November 1, 2000, WGL Holdings, Inc. assumed all the
obligations of Washington Gas Light Company under the Plan.

This document constitutes part of a prospectus covering securities which have
been registered under the Securities Act of 1933.           [date]

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Price, which is one hundred percent (100%) of the Fair Market Value of a Share
on the Date of Grant, in the manner and subject to the terms and conditions of
the Plan and this Agreement. The Option shall not constitute an incentive stock
option within the meaning of Section 422 of the Internal Revenue Code of 1986.

     2. Exercise of Stock Option. Except as hereinafter provided, the
Participant may exercise this Option at any time between the “Vesting Date” and
the “Date of Expiration”, as those dates appear on page 1 of this Agreement. The
Vesting Date is the third anniversary of the Date of Grant. The Date of
Expiration is the tenth anniversary of the Date of Grant. Options may be
exercised in accordance with procedures set forth in this Agreement and the
Plan, defined above.

     This Option may be exercised in whole or in part, but not for less than 100
Shares at any one time, unless fewer than 100 Shares then remain subject to the
Option, and the Option is then being exercised as to all such remaining Shares.

     3. Termination of Employment or Service:

      (a) Termination on death or Disability of the Participant. Immediately
upon death or Disability of the Participant, this Option to purchase all shares
shall become fully vested. Such shares may be purchased until the earlier of:
(i) the expiration date of this Option; or (ii) the first anniversary of the
date of death or Disability. In the case of death of the Participant, this
Option may be exercised by the Participant’s designated beneficiary under this
Agreement, or, if none, then by the legal representative of the Participant’s
estate. For purposes of this Agreement “Disability” shall be determined in the
same manner as “Disability” under the terms of the Washington Gas Light Company
Employees’ Pension Plan.

      (b) Termination on Retirement: Immediately upon Retirement this Option
shall become vested and fully exercisable. Upon Retirement, this Option, whether
or not previously vested, may be exercised until the earlier of: (i) the
expiration date of this Option; or (ii) the third anniversary date of
Retirement. For this purpose, “Retirement” shall be defined as “Retirement”
under the Washington Gas Light Company Employees’ Pension Plan.

      (c) Death after Retirement or Disability: If a Participant dies following
Retirement or Disability with options which have not been exercised, the
Participant’s Designated Beneficiary or Personal Representative may exercise
this Option until the earlier of (i) the expiration date of this Option, or
(ii) the first anniversary of the date of death of the Participant.

      (d) For other reasons: Unless otherwise determined by the Committee, in
the event of termination of employment for any reasons other than death,
Disability or Retirement, this Option shall automatically expire, if it has not
vested by its terms as of that date. If this Option is vested as of the date of
termination of employment for any reason other than death, Disability or
Retirement, this Option may be exercised until the earlier of:

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(i) the expiration date of this Option; or (ii) the end of the 3 month period
following the date of termination of employment (except in the case of
termination for cause, as determined by the Committee, or in breach of an
employment agreement with the Company, in which case all unexercised Options,
whether or not vested, including this Option, held by the Participant shall
expire as of the termination of employment or service).

     4. Change of Control. In the event of a Change of Control as defined in the
Plan and subject to the limitations of Section 7(f) of the Plan, all shares
under this Option shall become immediately 100% vested and shall remain
exercisable for their entire term.

     5. Rights as a Stockholder. The Participant has no rights as a stockholder
of the Company with respect to the Shares subject to this Option Agreement until
such time as the Option has vested, it has been exercised in accordance with
this Agreement, the Exercise Price has been paid, and the Shares have been
issued and delivered to the Participant.

     6. Adjustments. Subject to Sections 4(c) and 8(e) of the Plan, if the
Committee determines that any recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase,
exchange of stock, stock or cash dividend, other distribution, liquidation,
dissolution or other similar corporate transaction or event affects the Stock
such that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of Participants, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of the certain specified
terms of Awards, including this Option. These adjustments may include, among
other adjustments, adjustments to (i) the number and kind of shares of stock
relating to this Option, and (ii) the exercise price relating to this Option
(or, if deemed appropriate, the Committee may make provisions for a cash payment
with respect to this Option). In addition, the Committee is authorized to make
adjustments in the terms and conditions of, and the criteria included in, this
Option (including, without limitation, cancellation of unexercised or
outstanding Options or substitution of Awards using stock of a successor or
other entity) in recognition of unusual or nonrecurring events (including, among
other matters, events constituting a Change of Control) affecting the Company of
any Subsidiary or the financial statements of the Company or any Subsidiary, or
in response to changes in applicable laws, regulations or accounting principles.
Notwithstanding anything herein to the contrary, without the prior approval of
the shareholders of the Company, neither the Board of Directors nor the
Committee may take any action that would constitute repricing of this option.

     7. Procedure for Exercise of Option. To the extent this Option is
exercisable, it may be exercised by delivery of written notice to the Company on
any business day at its executive offices, addressed to the attention of its
Secretary. Such notice: (a) shall be signed by the Participant or his or her
legal representative (including the legal representative of a deceased
Participant’s estate); (b) shall specify the number of full Shares then elected
to be purchased with respect to the Option; (c) unless a Registration Statement
under the Securities Act of 1933 is in effect with respect to the Shares to be
purchased, shall contain a representation of the Participant that the Shares are
being acquired by him or her for investment and with no present intention of
selling or transferring them, and that he or she will not sell or otherwise
transfer the Shares except in compliance with all applicable securities laws and
requirements of any stock exchange upon which the Shares may then be listed; and
(d) shall be accompanied by payment in full of the Exercise Price of the Shares
to be purchased.

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     The Exercise Price upon exercise of this Option shall be payable to the
Company in full either: (a) in cash or its equivalent (acceptable cash
equivalents shall be determined at the sole discretion of the Committee); or
(b) by tendering previously acquired Shares having an aggregate Fair Market
Value at the time of exercise equal to the total Exercise Price (provided that
the Shares which are tendered much have been held by the Participant for at
least six (6) months prior to their tender to satisfy the Exercise Price); or
(c) by a combination of (a) and (b).

     Subject to the approval of the Committee, the Participant may be permitted
to exercise pursuant to a “cashless exercise” procedure, as permitted under
Federal Reserve Board’s Regulation T, subject to securities law restrictions, or
by any other means which the Committee, in its sole discretion, determines to be
consistent with the Plan’s purpose and applicable law.

     As promptly as practicable after receipt of notice and payment upon
exercise, the Company shall cause to be issued and delivered to the Participant
or his or her legal representative, as the case may be, certificates for the
Shares so purchased, which may, if appropriate, be endorsed with appropriate
restrictive legends. The Share certificates shall be issued in the Participant’s
name (or, at the discretion of the Participant, jointly in the names of the
Participant and the Participant’s spouse). The Company shall maintain a record
of all information pertaining to the Participant’s rights under this Agreement,
including the number of Shares for which their Option is exercisable. If the
Option shall have been exercised in full, this Agreement shall be returned to
the Company and canceled.

     8. Tax Withholding. The Company or its affiliate may deduct or withhold, or
require the Participant or beneficiary to remit to the Company or its affiliate,
an amount sufficient to satisfy federal, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Agreement.

     9. Share Withholding. Participants may elect to satisfy the tax withholding
requirement, in whole or in part, by having the Company or its affiliate
withhold Shares having a Fair Market Value equal to taxes required to be
withheld on the transaction. All such elections shall be irrevocable, made in
writing, signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.

     10. Limitations on Transferability. Except as provided by the Plan or by
the Committee, this Option and rights or benefits under this Agreement are not
transferable by the Participant except by will or the laws of descent and
distribution or to a Beneficiary in the event of the Participant’s death, and
shall not be pledged, mortgaged, hypothecated or otherwise encumbered, or
otherwise be subject to the claims of creditors. This Option may be transferred
to one or more transferees during the lifetime of the Participant only to the
extent and on such terms and conditions as may then be permitted by the
Committee.

     11. Beneficiary Designation. The Participant may, from time to time, name
any beneficiary or beneficiaries (who may be named contingently or successively)
to whom any benefit under this Agreement is to be distributed and who may
exercise this Option pursuant to Paragraph 3(a) of this Agreement in case of the
Participant’s death before the Participant receives any or all of such benefit.
Each such designation shall revoke all prior designations by the Participant,
shall be in a form prescribed by the Company, and will be effective only when
filed by the Participant in writing with the Secretary of the Company during the
Participant’s lifetime. In the absence of any such

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designation, this Option is exercisable by the legal representative of the
estate of the Participant and any benefits remaining unpaid at the Participant’s
death shall be paid to the Participant’s estate.

     12. No Right to Continued Employment or Service. Neither the Plan, this
Option nor any action taken hereunder shall be construed as giving the
Participant or any employee or any person the right to be retained in the employ
or service, as applicable, of the Company or any Subsidiary, nor shall it
interfere in any way with the right of the Company or any Subsidiary to
terminate the Participant or any employee’s employment or any person’s service
at any time.

     13. Successors and Assigns. All obligations of the Company under the Plan
and this Agreement, with respect to this Option, shall be binding on any
successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company. See Paragraph 6
of this Agreement and Sections 4(c) and 8(e) of the Plan regarding certain
adjustments the Committee may make to this Award in the event there is a
successor to the Company.

     14. Administration. This Option Agreement and the rights of the Participant
hereunder are subject to all the terms and conditions of the Plan, as the same
may be amended from time to time, as well as to such rules and regulations as
the Committee may adopt for administration of the Plan. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of this
Option, as it may deem advisable, including, without limitation, restrictions
under applicable Federal or State securities laws, under the requirements of any
stock exchange upon Shares are then traded. The Committee is authorized to
administer, construe, and make all determinations necessary or appropriate to
the administration of the Plan and this Option Agreement, all of which shall be
binding upon the Participant.

     15. Amendment and Termination of the Plan. The 1999 Plan may be amended,
altered, suspended, discontinued or terminated by the Board of Directors without
stockholder approval unless the Board seeks to increase the number of shares of
Common Stock subject to the Plan or stockholder approval is required by law or
regulation or under the rules of any stock exchange or automated quotation
system on which the Common Stock is then listed or quoted. Stockholder approval
will not deemed to be required under laws or regulations that conditions
favorable tax treatment on such approval, although the Board may, in its
discretion, seek stockholder approval in any circumstances in which it deems
such approval advisable.

     16. Miscellaneous:

      (a) If the day for vesting or expiration of this Option falls on a
non-business day for the Company, that vesting or expiration will be deemed to
occur on the Company’s next business day. If the day for any other action to be
taken under this Agreement falls on a non-business day for the Company, the
period for taking such action will extend through the Company’s next business
day.

      (b) The Participant agrees to take all steps necessary to comply with all
applicable provisions of federal and state securities law in exercising his or
her rights under this Agreement.

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      (c) This Agreement is subject to all applicable laws, rules, and
regulations, and any required approvals by any governmental agencies or national
securities exchanges.

      (d) This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Virginia.

           IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Date of Grant.

          WGL Holdings, Inc. Participant     _______________________________  
By: ____________________________________
                

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