exv10w01



 






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









	*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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