exv10w02



 






Exhibit 10.02




WGL Holdings, Inc.

1999 Incentive Compensation Plan

Performance Share 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 certain
Performance Shares, as specified below:


Target Number of Performance Shares: _______________(the “Performance Shares”)



Performance Period:_____to______, (the “Performance Period”)



Performance Measure: Annualized Relative Increase in the Total Shareholder
Return (as determined below) compared to the Peer Group shown on Exhibit A to
this Agreement (the “Performance Measure”).




     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 Award and the Plan, the parties hereto agree as follows:



     1. Performance Period. The Performance Period commences on
_________, and ends on _________.






*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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     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.



     For this purpose, Total Shareholder Return shall be determined as follows:



	 	 	 	 	 
	Total Shareholder

Return

	 	=
	 	Change in Stock Price + Dividends Paid

Beginning Stock Price







     Beginning Stock Price means the average closing prices as reported on New
York Stock Exchange 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 New York Stock Exchange of one share of the Company’s common stock for
the 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; and 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

Rank

	 	=
	 	                         Company 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 Target Number of Performance Shares earned shall then be
determined based on the following chart:



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







     Interpolation shall be used to determine the percent of Target Number of
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. Except as provided below, 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 Company
or its affiliates continues through the end of the Performance Period.



     Retirement, Disability or Death: If a Participant retires, suffers
a Disability, or dies during the Performance Period, 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. For this purpose, “retirement” shall be defined as
“Retirement” under the Washington Gas Light Company Employees’ Pension Plan.



     “Disability” for purposes of this Award means “Disability” as determined
under the Washington Gas Light Company Employees’ Pension Plan.



     Other Causes of Termination: Unless otherwise provided by the
Committee, termination of employment or service for any reason other than
Retirement, Disability, or death during the Performance Period results in
forfeiture of this entire Award, with no payment to the Participant.



     5. 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, the Target
Number of Performance Shares shall automatically vest as of the effective date
of the Change of Control, and shall be settled in Stock within as soon as
practicable following the effective date of the Change of Control.



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     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.



     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 if the
applicable Performance Measure is achieved.



     9. Adjustments. Subject to Section 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 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 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



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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 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 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 affiliates
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(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.



     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 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.



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     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.
	 
	 	(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:	 	 	 	 
	

	 	 	 	


 	 	 
	 	 	
 
	 	 	 	 






Attachment: Exhibit A: Peer Group List





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