Exhibit 10.2
PERFORMANCE UNITS GRANT #                    
WGL Holdings, Inc.
Omnibus Incentive Compensation Plan
Performance Units 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 Units, as specified below:
Target Number of Performance Units:                                         (the
“Performance Units”)
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 UNIT AWARD AGREEMENT (this “Agreement”), effective
                    , provides terms and conditions of an award of Performance
Units (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 Units. 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                     .
     2. Value of Performance Units. Each Performance Unit represents and has a
value equal to one dollar.

 

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     3. Performance Units and Achievement of Total Shareholder Return
Performance Measure. The number of Performance Units to be earned under this
Agreement is based upon the Total Shareholder Return of WGL Holdings, Inc. (the
“Company”) 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 Units 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 Units 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 Units, 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 Units 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 Units 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 Units shall vest pursuant to the terms of
the Company’s Change in Control Policy.
     6. Form and Timing of Payment for Performance Units. Any Performance Units
earned at the end of the Performance Period will be paid out in cash. Payment
for any earned Performance Units shall be made to the Participant as promptly as
practicable following the close of the Performance Period.

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     7. 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.
     8. 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 Units 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.
     9. 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 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.
     10. 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.
     11. 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.
     12. 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 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.
     13. 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

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such approval, although the Board may, in its discretion, seek stockholder
approval in any circumstances in which it deems such approval advisable.
     14. 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.     (b)   This Agreement is
subject to all applicable laws, rules, and regulations, and any required
approvals by any governmental agencies or national securities exchanges.     (c)
  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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