WGL Holdings, Inc. Omnibus Incentive Compensation Plan Performance Units Award Agreement

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.

     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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