Exhibit 10.1
PERFORMANCE SHARE GRANT #                     
WGL Holdings, Inc.
Omnibus Incentive Compensation Plan
Performance Share Award Agreement
TO:                                          (Participant)
     You have been selected to be a Participant in the WGL Holdings, Inc.
Omnibus Incentive Compensation Plan (the “Plan”). In accordance with the Plan,
you have been awarded certain Performance Shares, as specified below:
Target Number of Performance Shares:                                            
(the “Performance Shares”)
Performance Period:                                             to    
                                       (the “Performance Period”)
Performance Measure: Annualized Total Shareholder Return (as determined below)
compared to the Peer Group shown on Exhibit A to this Agreement (the
“Performance Measure”).
     THIS PERFORMANCE SHARE AWARD AGREEMENT (this “Agreement”), effective
                    , provides terms and conditions of an award of Performance
Shares (the “Award”) 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 Performance Shares. 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 this Agreement and the Plan, the parties hereto agree as
follows:
     1. Performance Period. The Performance Period commences on                 
                         , and ends on                          
                .
 
This document constitutes part of a prospectus covering securities which have
been registered under the Securities Act of 1933.
(DATE)

 

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     2. Value of Performance Shares. Each Performance Share represents and has a
value equal to one share of common stock (the “Shares” or “Stock”) of WGL
Holdings, Inc. (the “Company”).
     3. Performance Shares and Achievement of Total Shareholder Return
Performance Measure. The number of Performance Shares to be earned under this
Agreement is based upon the Company’s Total Shareholder Return as compared to
the Total Shareholder Return of the Company’s Peer Group (as identified in
Exhibit A) during the Performance Period.
    Total Shareholder Return shall be determined as follows:

             
Total Shareholder
  =   Change in Stock Price + Dividends Paid    
 
           
Return
      Beginning Stock Price    

     Beginning Stock Price means the average closing prices as reported on the
New York Stock Exchange (the “NYSE”) of one share of the Company’s common stock
for the thirty (30) trading days ending immediately prior to the first calendar
day of the Performance Period. Ending Stock Price means the average of the
closing prices on the NYSE of one share of the Company’s common stock for the
last thirty (30) trading days prior to the end of the Performance Period. Change
in Stock Price means the difference between the Beginning Stock Price and the
Ending Stock Price. Dividends Paid means the total of all dividends paid on one
(1) share of stock during the Performance Period, provided that dividends shall
be treated as though they are reinvested at the end of each calendar quarter.
     Following the Total Shareholder Return determination, the Company’s
Percentile Rank shall be determined as follows:

             
Percentile
      Company Rank (from the bottom)    
 
           
Rank
  =   Total number of companies in Peer Group    
 
      Including the Company    

     Company Rank shall be determined by listing from highest Total Shareholder
Return to lowest Total Shareholder Return each company in the Peer Group
(including the Company) and counting up from the company with the lowest Total
Shareholder Return.
     The percent of the targeted Performance Shares earned shall then be
determined based on the following chart:

 

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                Percent of     Target Award Company’s Percentile Rank   Earned  
90th
    200 %
70th
    150 %
50th
    100 %
30th
    50 %
Below 30th
    0 %  

     Interpolation shall be used to determine the percent of targeted
Performance Shares Earned in the event the Company’s Percentile Rank does not
fall directly on one of the ranks listed in the above chart.
     4. Termination of Employment or Service. For purposes of this paragraph,
the term “Employer” means the Company or the Company’s Subsidiary that employs
the Participant, or to which the Participant provides services, on the effective
date of this Agreement. Except as provided below, and subject to the provisions
of Section 5 of this Agreement relating to a Change of Control, a Participant is
eligible for payment of earned Performance Shares, as specified in Section 3,
only if the Participant’s employment or service with the Employer continues
through the end of the Performance Period.
     Subject to the provisions of Section 5 of this Agreement relating to a
Change of Control, if a Participant terminates employment or services with the
Employer prior to the end of the Performance Period for any reason, including
voluntary or involuntary termination, death, disability or retirement, the Human
Resources Committee of the Board of Directors of the Company (the “Committee”),
in its sole discretion, may determine that the Participant shall be eligible for
that proportion of the number of Performance Shares earned under Section 3 for
such Performance Period that his or her number of full months of participation
during the Performance Period bears to the total number of months in the
Performance Period. In the event of the death of the Participant, the
Participant’s designated beneficiary or estate shall be entitled to the
Performance Shares under the same conditions as would have been applicable to
the Participant.
     5. Change of Control. In the event of a Change of Control, as defined in
the Plan, the number of Performance Shares shall vest pursuant to the terms of
the Company’s Change in Control Policy.
     6. Dividends. The Participant has no right to any dividends with respect to
the Performance Shares until the Performance Shares are issued by the Company
and delivered to the Participant following the completion of the Performance
Period and achievement of the Performance Measure.

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     7. Rights as a Stockholder. The Participant shall have no rights as a
stockholder of the Company with respect to the Performance Shares until the
Performance Shares have been issued and delivered to the Participant.
     8. Form and Timing of Delivery of Performance Shares. Delivery of the
earned Performance Shares to the Participant shall be made in an equal number of
shares of Company Stock. Performance Shares shall be issued to the Participant
as promptly as practicable following the close of the Performance Period.
     9. Adjustments. Subject to Section 4(d) 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 of all of the certain specified
terms of Awards, including this Award. These adjustments may include, among
other adjustments, adjustments to the number and kind of shares of stock
relating to this Award (or, if deemed appropriate, the Committee may make
provisions for a cash payment with respect to this Award). In addition, the
Committee is authorized to make adjustments in the terms and conditions of, and
the criteria included in this Award (including, without limitation, cancellation
of outstanding Awards 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 or
any Subsidiary or the financial statements of the Company or any Subsidiary, or
in response to changes in applicable laws, regulations or accounting principles.
     10. Tax Withholding. The Company may deduct or withhold, or require the
Participant or the Participant’s beneficiary to remit to the Company or its
affiliates, 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.
     11. Share Withholding. Participants may elect to satisfy the tax
withholding requirement, in whole or in part, by having the Company or its
affiliates 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.
     12. Limitations on Transferability. Except as otherwise provided by the
Plan or by the Committee, the Participant’s rights under this Agreement and the
right to Performance Shares under this Agreement may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution. The Participant’s rights under the Plan
and this Agreement shall be exercisable during the Participant’s lifetime only
by the Participant or the Participant’s legal representative.
     13. 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 in case of his or
her death before he or she receives any or all of such benefit. Each such
designation shall revoke all prior designations by

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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
designation, benefits remaining unpaid at the Participant’s death shall be paid
to the Participant’s estate.
     14. No Right to Continued Employment or Service. Neither the Plan, this
Agreement, the Award 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 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’s employment or service at any time.
     15. Successors and Assigns. All obligations of the Company and its
Subsidiaries under the Plan and this Agreement, with respect to this Award,
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 of the business and/or assets of the Company. See
Paragraph 9 of this Agreement and Sections 4(d) 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.
     16. Administration. This Agreement and the rights of the Participant
hereunder are subject to all the terms and conditions of the Plan, as the Plan
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 delivered pursuant to this Agreement, as it may
deem advisable including, without limitation, restrictions under applicable
Federal or State securities laws and requirements of any stock exchange where
the Stock is traded. The Committee is authorized to administer, construe, and
make all determinations necessary or appropriate to the administration of the
Plan and this Agreement, all of which shall be binding upon the Participant. Any
inconsistency between the Agreement and the Plan shall be resolved in favor of
the Plan.
     17. Amendment and Termination of the Plan. The Plan may be amended or
terminated by the Board of Directors of the Company without stockholder approval
unless the Board seeks to increase the number of shares of common stock subject
to the Plan or stockholder approved 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 be deemed
to be required under laws or regulations that condition 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.
     18. Miscellaneous.

  (a)   If the Performance Period under this Agreement ends on a non-trading
day, the Performance Period will be deemed to end on the immediately preceding
trading 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.

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  (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.     (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)   To the extent
not preempted by federal law, 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
effective as of                                            .

                 
 
          WGL Holdings, Inc.    
Participant
               
 
               
 
      By:        
 
               
 
               
 
      Title:   Chairman and Chief Executive Officer    

Attachment: Exhibit A: Peer Group List

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