WGL HOLDINGS, INC. and WASHINGTON LIGHT GAS COMPANY CHANGE IN CONTROL SEVERANCE PLAN FOR CERTAIN EXECUTIVES

Exhibit 10.1

WGL HOLDINGS, INC. and WASHINGTON
LIGHT GAS COMPANY
CHANGE IN CONTROL SEVERANCE PLAN FOR
CERTAIN EXECUTIVES

TABLE OF CONTENTS

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ARTICLE 1

BACKGROUND, PURPOSE AND TERM OF PLAN

1.1 Purpose of the Plan . The purpose of the Plan is to provide a select group of the Company’s management and highly compensated employees with certain compensation and benefits as set forth in the Plan in the event of the Participant’s termination of employment with the Company in connection with to a Change in Control. It is intended that the Plan shall at all times be maintained on an unfunded basis for federal income tax purposes under the Code. The Plan is intended to constitute a plan described under section 201(2) of the ERISA, and, as such, to be exempt from all of the provisions of Parts 2, 3, and 4 of Title I of ERISA.

1.2 Term of the Plan . The Plan shall generally be effective as of the Effective Date. This Plan is intended to supersede any other plan, program, arrangement or agreement providing a Participant with severance or related benefits in the case of a Participant’s Change in Control Termination. The Plan shall continue until terminated pursuant to Article 8 of the Plan.

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ARTICLE 2

DEFINITIONS

2.1 " Affiliate Company "" shall mean any person or entity that controls, is controlled by or is under common control with the Company. For this purpose, "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting shares, by contract or otherwise.

2.2 " Annual Bonus " shall mean 100% of the Participant’s target annual incentive bonus for the fiscal year.

2.3 " Base Salary " shall mean the Participant’s highest annual base salary rate in effect during the period beginning twelve (12) months immediately preceding a Change in Control and ending on the date of a Change in Control Termination.

2.4 " Board " shall mean the Board of Directors of the Company, or any successor thereto.

2.5 " Cause " shall mean (1) the willful and continued failure of the Participant to perform substantially his duties with the Company or (other than any such failure from incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Participant by the Board or, with respect to officers other than the Chief Executive Officer, by the Chief Executive Officer, which specifically identifies the manner in which the Board believes the Participant has not substantially performed such duties, (2) the willful engaging by the Participant in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company. For purposes of this definition, no act or failure to act shall be considered "willful" unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief that the action or omission was in the best interests of the Company. An act may be determined to be injurious to the Company even it if causes no monetary injury. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of the Company; (3) engaging in reckless misconduct resulting in material financial or non-financial harm to the Company; or (4) the conviction of, or a guilty or nolo contendere plea to, a crime involving the personal enrichment of the Participant (including but not limited to securities violations).

2.6 " Change in Control " shall have the meaning set forth in the WGL Holdings, Inc. and Washington Gas Light Company Change in Control Policy as of the date of the Change in Control, which is incorporated herein by reference, and a copy of which is attached at Exhibit 1.

2.7 " Change in Control Termination " shall mean a Participant’s Involuntary Termination or Good Reason Resignation that occurs during the period beginning one year prior to the date of a Change in Control and ending two years after the date of such Change in Control.

2.8 COBRA " shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

2.9 " Code " shall mean the Internal Revenue Code of 1986, as amended.

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2.10 " Committee " shall mean the Human Resources Committee of the Board or such other committee appointed by the Board to assist the Company in making determinations required under the Plan in accordance with its terms. The "Committee" may delegate its authority under the Plan to an individual or another committee.

2.11 " Company " shall mean Washington Gas Light Company.

2.12 " Effective Date " shall mean December 15, 2006.

2.13 " Eligible Employee " shall mean an Employee of the Company or an Affiliate Company who is highly compensated or holds a management position and is selected for participation by the Committee.

2.14 " Employee " shall mean an individual employed by the Company.

2.15 " Employer " shall mean the Company.

2.16 " ERISA " shall mean the Employee Retirement Income Security Act of 1974, as amended, and regulations thereunder.

2.17 " Good Reason Resignation " shall mean any termination of employment by a Participant that is not initiated by the Company and that is caused by any one or more of the following events which occurs during the period beginning on the date of a Change in Control and ending two years after the date of such Change in Control:

     (1.A) For a Participant who is a Tier 1 Executive under Schedule A of the Plan: Without the Participant’s written consent, assignment to the Participant of any duties inconsistent in any material respect with the Participant’s then current position (including having that position at the most senior resulting entity following the Change in Control), authority, duties or responsibilities, or any other action by the Company which, in the reasonable judgment of the Participant, would cause him to violate his ethical or professional obligations (after written notice of such judgment has been provided by the Participant to the Board’s Human Resources Committee and the Company has been given a 30-day period within which to cure such action), or which results in a significant diminution in such position, authority, duties or responsibilities.

     (1.B) For a Participant who is a Tier 2 Executive under Schedule A of the Plan: Without the Participant’s written consent, assignment to the Participant of any duties inconsistent in any material respect with the Participant’s then current position, duties or responsibilities, or any other action by the Company which, in the reasonable judgment of the Participant, would cause him to violate his ethical or professional obligations (after written notice of such judgment has been provided by the Participant to the Board’s Human Resources Committee and the Company has been given a 30-day period within which to cure such action), or which results in a significant diminution in such position, duties or responsibilities.

     (2) Without the Participant’s written consent, the Participant’s being required to relocate to a principal place of employment that is both more than thirty-five (35) miles from his existing principal place of employment, and farther from Participant’s current residence than his existing principal place of employment.

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     (3) Without the Participant’s written consent, the Company materially reduces the Participant’s base salary rate or target bonus opportunity (although the setting of goals that are perceived to be more difficult will not be considered such a reduction), or materially reduces the aggregate value of other incentives and retirement opportunity as determined by a third party consulting firm of international stature based on accepted methodologies for determining such value, or fails to allow the Participant to participate in all welfare benefit plans, incentive, savings and retirement plan, fringe benefit plans and vacation benefits applicable to other senior executives; or

     (4) The Company fails to obtain a satisfactory agreement from any Successor to assume and agree to perform the Company’s obligations to the Participant under this Plan, as contemplated in Section 11.3 herein; provided, that if the Participant remains in employment for more than ninety (90) days following the occurrence of (or, if later, the Participant’s gaining knowledge of) any event set forth in Section 2.17 herein, any subsequent termination of employment by a Participant that is not initiated by the Company shall not constitute a Good Reason Resignation.

2.18 " Involuntary Termination " shall mean a termination of the Participant initiated by the Company or an Affiliate Company for any reason other than Cause, Permanent Disability or death, as provided under and subject to the conditions of Article 3.

2.19 " Participant " shall mean any Eligible Employee who meets the requirements of Article 3 and thereby becomes eligible for salary continuation and other benefits under the Plan.

2.20 " Permanent Disability " Permanent Disability means, to the extent consistent with Code section 409A, a mental or physical condition which constitutes a "Disability" as set forth in the Washington Gas Light Company Employees’ Pension Plan, provided such disability is expected to result in death or can be expected to last for a continuous period of not less than 12 months.

2.21 " Plan " means the WGL Holdings, Inc. and Washington Gas Light Company Change in Control Severance Plan for Certain Executives as set forth herein, and as the same may from time to time be amended.

2.22 " Plan Administrator " shall mean the individual(s) appointed by the Committee to administer the terms of the Plan as set forth herein and if no individual is appointed by the Committee to serve as the Plan Administrator for the Plan, the Plan Administrator shall be the Company’s Vice President and Chief Financial Officer and Vice President, Human Resources and Organizational Development. Notwithstanding the preceding sentence, in the event the Plan Administrator is entitled to a Severance Benefit under the Plan, the Committee or its delegate shall act as the Plan Administrator for purposes of administering the terms of the Plan with respect to the Plan Administrator. The Plan Administrator may delegate all or any portion of its authority under the Plan to any other person(s).

2.23 " Release " shall mean the Separation of Employment Agreement and General Release, as provided by the Company.

2.24 " Severance Benefit " shall mean the benefits to which a Participant is entitled to receive under this Plan.

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2.25 " Specified Employee " shall mean a key employee within the meaning of Code section 416(i) (without regard to paragraph 5 thereof) or as otherwise defined in Code section 409A.

2.26 " Successor " shall mean any other corporation or unincorporated entity or group of corporations or unincorporated entities which acquires ownership, directly or indirectly, through merger, consolidation, purchase or otherwise, of all or substantially all of the assets of the Company.

2.27 " Termination Date " shall mean the date on which the active employment of the Participant by the Company is severed by reason of an Involuntary Termination or a Good Reason Resignation.

2.28 " Voluntary Resignation " shall mean any termination of employment that is not initiated by the Company other than a Good Reason Resignation.

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ARTICLE 3

PARTICIPATION AND ELIGIBILITY FOR BENEFITS

3.1 Participation . Each Participant in the Plan who incurs a Change in Control Termination and who satisfies the conditions of Section 3.2 shall be eligible to receive the Severance Benefits described in the Plan.

3.2 Conditions .

     (a) Eligibility for any Severance Benefit is expressly conditioned on (i) execution by the Participant of a Release in the form provided by the Company; (ii) compliance by the Participant with all the terms and conditions of such Release; and (iii) the Participant’s written agreement to the confidentiality and non-solicitation provisions in Article 6 after the Participant’s employment with the Company. If the Plan Administrator determines, in its sole discretion, that the Participant is not eligible for or has not fully complied with any of the terms of the Plan, the Plan Administrator may deny Severance Benefits not yet in pay status or discontinue the payment of the Participant’s Severance Benefit and may require the Participant, by providing written notice of such repayment obligation to the Participant, to repay any portion of the Severance Benefit already received under the Plan. If the Plan Administrator notifies a Participant that repayment of all or any portion of the Severance Benefit received under the Plan is required, such amounts shall be repaid within thirty (30) calendar days of the date the written notice is sent. Any remedy under this subsection (a) shall be in addition to, and not in place of, any other remedy, including injunctive relief, that the Company may have.

     (b) A Participant will not be eligible to receive Severance Benefits under any of the following circumstances:

          (1) The Participant’s Voluntary Resignation;

          (2) The Participant resigns employment (other than a Good Reason Resignation) before the job-end date specified by the Company or while the Company still desires the Participant’s services;

          (3) The Participant’s employment is terminated for Cause;

          (4) The Participant voluntarily retires (other than a Good Reason Resignation);

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          (5) The Participant’s employment is terminated due to the Participant’s death or Permanent Disability;

          (6) The Participant does not return to work within six (6) months of the onset of an approved leave of absence, other than a personal or military leave and/or as otherwise required by applicable statute;

          (7) The Participant does not return to work within three (3) months of the onset of an educational leave of absence;

          (8) The Participant continues in employment with the Company for more than ninety (90) days following the occurrence of an event or events that would permit a Good Reason Resignation; or

          (9) The Participant’s employment with the Company terminates as a result of a Change in Control and the Participant accepts employment, or has the opportunity to continue employment, with a Successor (other than under terms and conditions which would permit a Good Reason Resignation).

     (c) The Plan Administrator has the sole discretion to determine a Participant’s eligibility to receive Severance Benefits.

     (d) A Participant returning from approved military leave during the period beginning one year before a Change in Control and ending two years after a Change in Control will be eligible for Severance Benefits if: (i) he is eligible for reemployment under the provisions of the Uniformed Services Employment and Reemployment Rights Act (USERRA); (ii) his pre-military leave job is eliminated; and (iii) the Employer’s circumstances are changed so as to make reemployment in another position impossible or unreasonable, or re-employment would create an undue hardship for the Employer. If the Participant returning from military leave qualifies for Severance Benefits, his Severance Benefits will be calculated as if he had remained continuously employed from the date he began his military leave. The Participant must also satisfy any other relevant conditions for payment or repayment, including execution of a Release.

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ARTICLE 4

DETERMINATION OF SEVERANCE BENEFITS

4.1 Amount of Severance Benefits Upon Involuntary Termination and Good Reason Resignation . The Severance Benefit to be provided to an Participant who incurs a Change in Control Termination and is determined to be eligible for Severance Benefits shall be as follows:

     (a)  Salary Replacement Benefits . Salary Replacement Benefits shall be the aggregate of:

(1) The sum of (i) Participant’s Base Salary through his termination date to the extent not theretofore paid; (ii) the product of the Participants Annual Bonus in the fiscal year that includes the Participant’s Termination Date and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Participant’s Termination Date, and the denominator of which is 365, and (3) any accrued vacation pay, to the extent not theretofore paid; and

(2) an amount equal to the product of (x) the sum of (i) the Participant’s Base Salary plus (ii) the Participant’s Annual Bonus, and (y) the multiplier applicable to the Participant set forth under Schedule B to the Plan.

     (b)  Medical and Dental Replacement Benefits .

          (1) The Participant shall continue to be eligible to participate in the medical, dental coverage in effect at the date of his or her Termination Date (or generally comparable coverage) for himself or herself and, where applicable, his or her spouse and dependents, as the same may be changed from time to time for employees of the Company generally, as if Participant had continued in employment during the period described in Section 4908B(f) of the Code (the "COBRA Continuation Coverage Period"). The Company shall be responsible for the payment of the employee portion of the medical and dental contributions that are required during the COBRA Continuation Period, or if a lesser period, for the number of months remaining in the period of years equal to the multiplier applicable to the Participant set forth under Schedule B to the Plan (the "Multiplier Period"). Any payment under this paragraph that is includible in the Participant’s gross income shall be increased by an additional amount equal to the Federal income tax applicable to such payment determined by applying the highest marginal Federal tax rate in effect at the payment date.

          (2) To the extent that the COBRA Continuation Period is shorter than Multiplier Period, the Company will pay to the Participant an amount equal to 102% of the Company’s cost of providing the Participant (and where applicable under the terms of coverage at the Termination Date, his spouse and dependents) coverage to that provided under the Company’s medical and dental plans for the period of time between the end of the COBRA Continuation Coverage Period and end of the Multiplier Period. Any payment under this paragraph shall be increased by an additional amount equal to the Federal income tax applicable to such payment determined by applying the highest marginal Federal tax rate in effect at the payment date.

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     (c)  2005 SERP Credit . The Company shall credit the Participant with up to an additional number of years of benefit service (but shall not credit such additional years in determining the Participant’s age) under the 2005 SERP, which number of years shall be equal to the multiplier applicable to such Participant under Schedule B, but in no event shall such additional years of benefit service, when added to the Participant’s years of benefit service under the 2005 SERP, exceed the maximum under the 2005 SERP;

     (d)  Outplacement Service . The Company shall, at its sole expense as incurred, provide the Participant with up to $25,000 in outplacements services, the scope and provider of which shall be selected by the Participant; provided such outplacement services shall not be paid by the Company if incurred more that twelve (12) months after the Participant’s Termination Date.

     (e)  Other Amounts . To the extent not theretofore paid of provided, the Company shall timely pay or provide the Participant with any other amounts or benefits required to be paid or provided or which the Participant is eligible to receive under any plan, program, policy, practice, contract or agreement of the Company.

4.2 Voluntary Resignation; Termination for Death or Permanent Disability . If the Participant’s employment terminates on account of (i) the Participant’s Voluntary Resignation, (ii) retirement, (iii) death, or (iv) Permanent Disability, then the Participant shall not be entitled to receive Severance Benefits under this Plan and shall be entitled only to those benefits (if any) as may be available under the Company’s then-existing benefit plans and policies at the time of such termination.

4.3 Termination for Cause . If any Participant’s employment terminates on account of termination by the Company for Cause, the Participant shall not be entitled to receive Severance Benefits under this Plan and shall be entitled only to those benefits that are legally required to be provided to the Participant. Notwithstanding any other provision of the Plan to the contrary, if the Plan Administrator determines that a Participant has engaged in conduct that constitutes Cause at any time prior to the Participant’s Termination Date, any entitlement to a Severance Benefit payable to the Participant under Section 4.1 of the Plan shall immediately cease. The Company may withhold paying Severance Benefits under the Plan pending resolution of an inquiry that could lead to a finding resulting in Cause. If the Company has offset other payments owed to the Participant under any other plan or program, it may, in its sole discretion, waive its repayment right solely with respect to the amount of the offset so credited.

4.4 Reduction of Severance Benefits . The Plan Administrator reserves the right to make deductions in accordance with applicable law for any monies owed to the Company by the Participant or the value of Company property that the Participant has retained in his possession.

4.5 Additional Benefits .

     (a) Anything in this Plan to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of a Participant (whether paid or provided pursuant to the terms of this Plan or otherwise) (a "Payment") would exceed the limit for deductible payments under Code section 280G by 10% or more, the Participant shall be entitled to receive an additional payment ("Gross-up Payment"). The Gross-

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up Payment shall be an amount such that, after payment by the Participant of (i) all income taxes, including, any interest and penalties imposed with respect thereto, and (ii) the excise tax imposed by Code section 4999 and any interest or penalties with respect thereto (such excise tax, together with any interest and penalties, collectively "Excise Tax") imposed upon the Gross-up Payment, the Participant retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payment.

     (b) Anything in this Plan to the contrary notwithstanding, in the event it shall be determined that any Payment or distribution by the Company to or for the benefit of a Participant would exceed the limit for deductible payments under Code Section 280G by less than 10%, then the aggregate present value of the benefits provided to the Participant pursuant to the rights granted under this Plan (such benefits are hereinafter referred to as "Plan Payments") shall be reduced to the Reduced Amount. The "Reduced Amount" shall be an amount expressed in present value which maximizes the aggregate present value of Plan Payments without causing any Payment to be nondeductible by the Company because of Section 280G of the Code. For purposes of this Section 4.5(b), present value shall be determined in accordance with Section 280G(d)(4) of the Code. If Plan Payments are to be