<PAGE> 1
==============================================================================
FORM 10-K/A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------------
(Mark One)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
---------------------
<TABLE>
<CAPTION>
COMMISSION EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER AND STATES OF I.R.S. EMPLOYER
FILE NUMBER PRINCIPAL OFFICE ADDRESS AND TELEPHONE NUMBER INCORPORATION I.D. NUMBER
<S> <C> <C> <C>
1-1483 WASHINGTON GAS LIGHT COMPANY District of Columbia 53-0162882
1100 H Street, N.W. and Virginia
Washington, D.C., 20080
(703) 750-4440
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT
----------------------------------------------------------------------------------
Name of Each Exchange on Which
Title of each class Registered
----------------------------------------------------------------------------------
Common Stock $1.00 par value New York Stock Exchange
Philadelphia Stock Exchange
----------------------------------------------------------------------------------
Preferred Stock, cumulative, without par value:
<S> <C>
$4.25 Series Philadelphia Stock Exchange
$4.36 Convertible Series Philadelphia Stock Exchange
$4.60 Convertible Series Philadelphia Stock Exchange
$4.80 Series Philadelphia Stock Exchange
$5.00 Series Philadelphia Stock Exchange
----------------------------------------------------------------------------------
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filing.
$ 1,177,201,662 January 13, 2000
------------------- -------------------
Market Value Date
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Common Stock $1.00 par value 46,465,890 January 13, 2000
---------------------------- ---------------- -----------------
Class Number of Shares Date
NO DOCUMENTS ARE INCORPORATED BY REFERENCE
==============================================================================
<PAGE> 2
AMENDMENT
The purpose of this Amendment is to provide the information required by
Items 10, 11, 12 and 13 of Part III of Washington Gas Light Company's Annual
Report on Form 10-K for the twelve months ended September 30, 1999, which the
registrant intended to incorporate by reference from the registrant's proxy
statement for the annual meeting of stockholders.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------
(a) IDENTIFICATION OF DIRECTORS
------------------------------
Listed below are the names, positions/offices, ages, and the initial
year elected of each member of Washington Gas Light Company's Board of
Directors. Each of these directors is serving a one-year term. These individuals
comprise the full list of nominees for the upcoming year. Information on
committee membership is as of January 13, 2000.
<TABLE>
<CAPTION>
Year
Name and Positions/Offices Held Age Elected
------------------------------- --- -------
<S> <C> <C>
Michael D. Barnes 56 1991
Chairman, Governance Committee
Member, Executive Committee
Fred J. Brinkman 71 1992
Member, Audit Review Committee
Member, Human Resources Committee
Daniel J. Callahan, III 67 1989
Chairman, Human Resources Committee
Member, Executive Committee
Member, Audit Review Committee
Orlando W. Darden 69 1979
Member, Audit Review Committee
James H. DeGraffenreidt, Jr. 46 1994
Chairman of the Board and Chief Executive Officer
of Washington Gas Light Company
Chairman, Executive Committee
Melvyn J. Estrin 57 1991
Member, Human Resources Committee
Philip A. Odeen 64 1999
Member, Governance Committee
Joseph M. Schepis 46 1998
President and Chief Operating Officer
of Washington Gas Light Company
Member, Executive Committee
Karen Hastie Williams 55 1992
Chair, Audit Review Committee
Member, Executive Committee
Member, Governance Committee
</TABLE>
1
<PAGE> 3
(b) IDENTIFICATION OF EXECUTIVE OFFICERS
---------------------------------------
Information related to Executive Officers is reflected in Part I
of the SEC Form 10-K for the fiscal year ended September 30, 1999.
(c) IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES
--------------------------------------------------
None
(d) FAMILY RELATIONSHIPS
-----------------------
None
(e) BUSINESS EXPERIENCE
----------------------
For each member of Washington Gas Light Company's Board of Directors,
described below is a description of their experience and other directorships
held by those directors in a company with a class of securities registered
pursuant to section 12 of the Exchange Act or subject to the requirements of
Section 15(d) of such Act or any company registered as an investment company
under the Investment Act of 1940. The business experience of Executive Officers
is reflected in Part I of the SEC Form 10-K for the fiscal year ended
September 30, 1999.
Michael D. Barnes is a partner in the Washington, D.C. law firm of
Hogan & Hartson. Mr. Barnes was previously a partner in the law firm of
Arent, Fox, Kintner, Plotkin & Kahn (1987-1993). Mr. Barnes was the
United States Representative from Maryland's 8th Congressional District
from 1979 to 1987. He was Commissioner of the Maryland Public Service
Commission and Vice Chairman of the Washington Metropolitan Area
Transit Commission from 1975 to 1978.
Fred J. Brinkman retired in 1991 as a Senior Partner with the firm of
Arthur Andersen & Co., independent public accountants (Arthur Andersen
& Co. is now Arthur Andersen LLP). From 1981-1989, Mr. Brinkman was
Area Managing Partner for the Asia-Pacific Area and Managing Partner of
the Washington, D.C. office of Arthur Andersen & Co. From 1989 to June
1991, at which time he retired, he was Senior Partner consulting on
global intiatives of Arthur Anderson & Co. From 1991 to present, he has
engaged in consulting. Mr. Brinkman also serves on the Board of
Directors of Washington Mutual Investors Fund.
Daniel J. Callahan, III is Vice Chairman and Treasurer of The Morris
and Gwendolyn Cafritz Foundation. Mr. Callahan retired in 1995 as
Chairman and Chief Executive Officer of USLICO Corporation, an
insurance holding company, a position he held since 1992. Mr. Callahan
was previously Vice Chairman of American Security Bank (1991-1992) and
served as President of MNC Financial Inc. (1987-1991) and Chairman of
the Board and Chief Executive Officer of American Security Corporation
and American Security Bank, N.A. from 1985-1991. Mr. Callahan is also a
Director of Washington Mutual Investors Fund.
Orlando W. Darden is President of OWD Enterprises Inc., a real estate
investment firm and is a partner in several real estate limited
partnerships. Mr. Darden founded and was President and Chief Executive
Officer of Community Federal Savings and Loan Association of
Washington, D.C., from 1974 to 1981.
James H. DeGraffenreidt, Jr. is Chairman and Chief Executive Officer of
Washington Gas Light Company. Mr. DeGraffenreidt joined Washington Gas
Light Company in 1986 as managing attorney, and was promoted to senior
managing attorney in 1988, and then Vice President of Rates and
Regulatory Affairs in 1991. He was elected Senior Vice President in May
1993, President and Chief Operating Officer effective December 1, 1994
and President and Chief Executive Officer effective January 1, 1998.
Mr. DeGraffenreidt was elected Chairman and Chief Executive Officer
effective December 1, 1998. Prior to joining Washington Gas Light
Company, Mr. DeGraffenreidt
2
<PAGE> 4
was a partner with a Washington, D.C. law firm where he specialized in
public utilities, telecommunications and public finance. Previous to
that, he was assistant people's counsel in the Maryland Office of
People's Counsel. Mr. DeGraffenreidt is also a Director of Harbor Bank
and MedStar Health.
Melvyn J. Estrin is Chairman of the Board and Chief Executive Officer
of Avatex Corp., involved in medical and beauty products investments.
Mr. Estrin is also Chairman of the Board and Chief Executive Officer of
Phar-Mor, Inc., retail drug stores. He is also Chairman of the Board
and Chief Executive Officer of Human Service Group, Inc. (trading as
Estrin International) (1983-present) and is President and a director of
HSG Acquisition Co. (1986-present), both of which are private
management and investment firms. Mr. Estrin is also a Director of
Avatex Corporation, Grandbanc, Inc., Carson, Inc., Phar-Mor, Inc.,
iLife Systems, Inc., ChemLink, Inc., Global Household Brands, Presby,
Inc. and is a managing partner of Centaur Partners, Inc.
Philip A. Odeen is Executive Vice President of TRW Inc., a technology,
manufacturing and service company. Mr. Odeen has held this position
since 1997. From 1992 to 1997, Mr. Odeen was President and Chief
Executive Officer of BDM International, Inc., a firm providing
technical services in the defense, communications and information
technology areas. BDM was acquired by TRW in December 1997. Prior to
that, he was Vice Chairman for Management Consulting Services at
Coopers & Lybrand. Mr. Odeen is a Director of The Reynolds and
Reynolds Company.
Joseph M. Schepis is President and Chief Operating Officer of
Washington Gas Light Company. Mr. Schepis joined Washington Gas Light
Company in 1978. After holding various positions in Washington Gas
Light Company's Finance and Marketing departments, he was elected
Treasurer in 1986, Vice President of Rates and Regulatory Affairs in
1993, Chief Financial Officer in 1994 and Senior Vice President for
Customer Services in 1996. In January 1998 he was elected Executive
Vice President and Chief Operating Officer and then was elected
President and Chief Operating Officer effective December 1, 1998.
Karen Hastie Williams is a Partner with the Washington, D.C. law firm
of Crowell & Moring, where she specializes in public contract law.
Prior to joining Crowell & Moring, Ms. Williams served as Administrator
for the Office of Federal Procurement Policy at the Office of
Management and Budget (1980-1981) and she was Chief Counsel of the
Senate Committee on Budget (1977-1980). Ms. Williams is a Director of
Crestar Financial Services Corporation, the Federal National Mortgage
Association, Continental Airlines Company, and Gannett Co.
(f) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
--------------------------------------------
None
(g) PROMOTERS AND CONTROL PERSONS
---------------------------------
None
ITEM 11. EXECUTIVE COMPENSATION
----------------------
The table that follows presents information about compensation for
Washington Gas Light Company's Chief Executive Officer and the four other most
highly compensated executive officers. It includes all compensation awarded to,
earned by or paid to the named executive officers for each of the last three
fiscal years.
The amounts shown in the column titled "Other Annual Compensation"
represent taxes paid by Washington Gas Light Company on behalf of the named
executive officer relating to group term life insurance coverage with benefits
exceeding $50,000 in each listed fiscal year. The amounts shown in the column
titled "All Other Compensation" represent Washington Gas Light Company's
matching contributions to Washington Gas Light Company's savings plan for
management employees during each of the listed fiscal years.
3
<PAGE> 5
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------- ----------------
NAME AND FISCAL OTHER ANNUAL RESTRICTED STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS<F1> COMPENSATION
-------------------------------- ------- ------------- ----------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
James H. DeGraffenreidt, Jr. 1999 $415,000 $ 0 $2,643 $ 0 $6,277
Chairman and 1998 351,250 255,000 1,550 327,750<F2> 6,400
Chief Executive Officer 1997 295,000 265,000 1,550 0 6,300
Joseph M. Schepis 1999 280,000 0 374 0 6,277
President and Chief 1998 232,500 150,000 1,040 163,875<F2> 6,400
Operating Officer 1997 195,000 160,000 983 0 6,300
Frederic M. Kline 1999 202,000 0 1,191 0 6,277
Vice President and Chief 1998 180,000 110,000 1,081 0 6,400
Financial Officer 1997 165,000 130,000 936 0 6,325
John K. Keane, Jr. 1999 180,000 0 3,040 0 6,277
Senior Vice President and 1998 180,000 90,000 1,823 0 6,133
General Counsel 1997 170,000 110,000 1,710 0 6,175
James B. White 1999 160,000 0 777 0 6,277
Vice President 1998 155,000 65,000 720 0 6,200
1997 145,000 80,000 356 0 5,800
<FN>
<F1> The number and value of the aggregate restricted stock holdings at the
end of fiscal year 1999 for each named executive officer were as follows:
</FN>
</TABLE>
<TABLE>
<CAPTION>
NAME SHARES VALUE
---- ------ --------
<S> <C> <C>
James H. DeGraffenreidt, Jr. 25,200 $638,550
Joseph M. Schepis 12,700 344,488
Frederic M. Kline 3,200 86,800
John K. Keane, Jr. 4,200 113,925
James B. White 2,200 59,675
<FN>
<F2> Restricted stock awards are reported at the aggregate market value on
the date of the grant. The number of restricted shares granted in fiscal
year 1998 to Messrs. DeGraffenreidt and Schepis was 12,000 and 6,000
shares, respectively. The shares were granted on January 1, 1998 and vest
at the rate of 20% each year for five years beginning January 1, 1999.
The market value on the grant date was $27.3125 per share. The vesting
schedule may accelerate in connection with a change of control as defined
in Washington Gas Light Company's Long-Term Incentive Compensation Plan.
Dividends are paid on restricted shares from the effective date of the
awards.
</FN>
</TABLE>
Washington Gas Light Company maintains a trusteed, noncontributory
pension plan covering all active employees and vested former employees of
Washington Gas Light Company and its utility subsidiaries. Executive officers
also participate in a Supplemental Executive Retirement Plan. Upon normal
retirement (age 65), each eligible participant is entitled under the
supplemental executive retirement plan to an annual benefit that is based on
both years of benefit service (up to a maximum of 30 years) and the average of
the participant's highest rates of annual basic compensation, including any
short-term incentive awards paid or deferred under the Executive Incentive
Compensation Plan and the 1999 Incentive Compensation Plan, or any successor
plan, on December 31 of the three years out of the final five years of the
participant's service as a participant. Participants may elect to have a portion
of their Supplemental Executive Retirement Plan benefit paid in the form of a
lump sum.
The following table shows the estimated annual single life benefits
payable under the pension plan and Supplemental Executive Retirement Plan upon
normal retirement (age 65) to executive officers in various salary and
years-of-service classifications:
<TABLE>
<CAPTION>
FINAL AVERAGE YEARS OF BENEFIT SERVICE
--------------------------------------
COMPENSATION 10 20 30
-------------------- ----------- ------------- ------------
<S> <C> <C> <C>
$200,000 $ 40,000 $ 80,000 $ 120,000
-------------------- ----------- ------------- ------------
400,000 80,000 160,000 240,000
-------------------- ----------- ------------- ------------
600,000 120,000 240,000 360,000
-------------------- ----------- ------------- ------------
700,000 140,000 280,000 420,000
</TABLE>
4
<PAGE> 6
Each of the five executive officers named above in the summary
compensation table has 30 years of benefit service except Messrs. DeGraffenreidt
and White, who have 21 and 28 years of benefit service, respectively. Benefits
shown in the above table are not subject to reductions for social security.
EMPLOYMENT AGREEMENTS
During fiscal year 1999, Washington Gas Light Company entered into
employment agreements with Messrs. DeGraffenreidt, Schepis, Kline, Keane and
White. The agreements with these officers will be effective during the period of
one year prior to, and two years following, a change of control of Washington
Gas Light Company. A change of control is generally defined in these agreements
as one of the following:
+ acquisition of 30% or more of Washington Gas Light Company's voting
stock;
+ a change in the majority of Washington Gas Light Company's board of
directors; and
+ a merger, reorganization, consolidation or sale of all or
substantially all of Washington Gas Light Company's assets.
From the change of control to its second anniversary, the executive's
position, duties and responsibilities must be commensurate with the most
significant of those held, exercised and assigned at the time during the 120-day
period immediately preceding the change of control. The executive agrees to
devote reasonable attention and time necessary to the business affairs of the
company.
During the one year period and two years following a change of control,
the executive is entitled to base salary, annual incentives, savings and
retirement plans, welfare benefit plans, expenses, fringe benefits, office and
vacation, consistent with those in place prior to the change of control or
available after the change of control if more beneficial.
Base salary is defined as an amount equal to twelve times the highest
monthly base salary paid or payable during the 12-month period immediately
preceding the change of control. The annual incentive is an amount at least
equal to that available to peer executives of Washington Gas Light Company and
its affiliated companies.
With respect to Messrs. DeGraffenreidt, Schepis, Kline and Keane, if
the executive is terminated during the effective period for reasons other than
cause, or if the executive resigns for good reason, the executive is entitled to
severance pay equal to three times the sum of the executive's annual base
salary, plus the highest of the executive's annual incentive actually earned for
the last three full fiscal years. Also the executive is entitled to an extension
of other employment benefits for three years. Mr. White is entitled to the same
benefit, except that the severance payment is two times the sum of the
executive's annual base salary, plus the highest of the executive's annual
incentive actually earned for the last three full fiscal years. The extension of
other employment benefits for Mr. White is for two years. Payments under these
agreements may be increased for any excise taxes payable under the Internal
Revenue Code.
"Good reason" is defined differently in these agreements based on the
position the named officer holds. The term includes one or more of the following
provisions:
(1) the assignment to the executive of any duties inconsistent in
any material respect with the executive's position;
(2) any failure by Washington Gas Light Company to comply with any
of the general employment provisions of the agreement;
(3) if there is a change of control, merger, acquisition or other
similar affiliation with another entity, and the executive
does not continue in the position of Chief Executive Officer
of the most senior resulting entity;
5
<PAGE> 7
(4) if there is a change of control, merger, acquisition or other
similar affiliation with another entity, and the executive
does not continue in his or her existing position or a more
senior position of the most senior resulting entity;
(5) failure by Washington Gas Light Company to reimburse the
executive for expenses related to a required relocation;
(6) any required relocation of the executive more than thirty five
miles from Washington, D.C.;
(7) any purported termination by Washington Gas Light Company of
the executive's employment; or
(8) any failure by Washington Gas Light Company or any successor
to comply with and satisfy the agreement.
Following is a summary of the contract provisions indicated above that
are contained in each named executive's employment agreement:
<TABLE>
<CAPTION>
APPLICABLE
EXECUTIVE PROVISIONS
-------------------------------- -----------------
<S> <C>
James H. DeGraffenreidt, Jr. 1,2,3,5,6,7,8
-------------------------------- -----------------
Joseph M. Schepis 1,2,4,5,6,7,8
-------------------------------- -----------------
Frederic M. Kline 1,2,4,5,6,7,8
-------------------------------- -----------------
John K. Keane, Jr. 1,2,4,5,6,7,8
-------------------------------- -----------------
James B. White 1,2,5,6,7,8
-------------------------------- -----------------
</TABLE>
OPTION GRANTS
The following table provides information regarding the number and terms
of stock options granted to the named executive officers during the fiscal year
ended September 30, 1999. Washington Gas Light Company utilized the Black-
Scholes option pricing model to develop the theoretical values set forth under
the "Grant Date Present Value" column. An officer realizes value from a stock
option only to the extent that the price of Washington Gas Light Company common
stock on the exercise date exceeds the price of the stock on the grant date.
Consequently, there is no assurance that the value realized by an officer will
be at or near the value estimated below. Those amounts should not be used to
predict stock performance.
6
<PAGE> 8
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS
NUMBER OF GRANTED TO
SECURITIES EMPLOYEES
UNDERLYING IN EXERCISE OR GRANT DATE
OPTIONS FISCAL BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED<F1> YEAR ($/SH)<F2> DATE ($)<F3>
------------------------------- ------------- -------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
James H. DeGraffenreidt, Jr. 25,895 26.03% $22.625 03/31/09 $99,600
------------------------------- ------------- -------------- -------------- ------------- ----------------
Joseph M. Schepis 14,560 14.64 22.625 03/31/09 56,000
------------------------------- ------------- -------------- -------------- ------------- ----------------
Frederic M. Kline 7,353 7.39 22.625 03/31/09 28,280
------------------------------- ------------- -------------- -------------- ------------- ----------------
John K. Keane, Jr. 6,552 6.59 22.625 03/31/09 25,200
------------------------------- ------------- -------------- -------------- ------------- ----------------
James B. White 5,824 5.86 22.625 03/31/09 22,400
------------------------------- ------------- -------------- -------------- ------------- ----------------
<FN>
<F1> Options were granted to the named executive officers under the 1999
Incentive Compensation Plan at prices equal to the fair market value
on the date of grant. These are nonqualified stock options that
become exercisable three years after the date of grant. These
options are subject to early termination upon the occurrence of
events related to termination of employment. All options immediately
become exercisable in the event of a change in control.
<F2> The exercise price of options may be paid in cash, by delivery of
already-owned shares of common stock of Washington Gas Light Company
or by any other method approved by the Human Resources Committee,
which administers the 1999 Incentive Compensation Plan. The Human
Resources Committee could grant a "reload option" to the optionee. A
reload option is an option granted to an employee for the same
number of shares as is exchanged in payment of the exercise price
and is subject to all of the same terms and conditions as the
original option except for the exercise price which is determined on
the basis of the fair market value of the common stock of Washington
Gas Light Company on the date the reload option is granted. One or
more successive reload options could be granted by the Human
Resources Committee.
<F3> This represents the estimated present value of stock options,
measured at the date of grant using the Black-Scholes Warrant
Valuation Call Option Model. Unless otherwise noted with respect to
specific option grants in the following paragraphs, this model
assumes no dilutive effects.
</FN>
</TABLE>
The following underlying assumptions were used in developing the grant
valuations:
+ an exercise price equal to the fair market value on the date of
grant;
+ expected volatility of 24%;
+ an annual risk free rate of return (represents the yield of Treasury
notes during the month of the grant with a maturity date
corresponding to the contractual term of the option) of 6.3%;
+ an annual dividend yield as of the date of grant of 4.8%; and
+ a contractual exercise period for options granted of three years.
LONG-TERM INCENTIVE PLANS -- PERFORMANCE SHARE AWARDS
The following table provides information regarding the number and terms
of performance shares awarded to the named executive officers during the fiscal
year ended September 30, 1999 under the 1999 Incentive Compensation Plan. The
targeted awards are based on an economic value of between 10.5% and 30.0% of the
executive's base salary. The awards ultimately earned vary based on Washington
Gas Light Company's total shareholder return relative to a peer group. Median
performance relative to the peer group earns awards at the targeted level. The
maximum that can be earned is 200 percent of the targeted level of shares. The
minimum that the executives can earn is zero shares. The performance period is
generally three years. However, awards made during fiscal year 1999 were for
performance periods of 18 and 30 months.
7
<PAGE> 9
PERFORMANCE SHARES AWARDED IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PAYOUTS UNDER
NON-STOCK PRICE-BASED PLANS
--------------------------------
NUMBER OF PERFORMANCE OR
SHARES, UNITS OR OTHER PERIOD UNTIL
NAME OTHER RIGHTS MATURATION OR PAYOUT THRESHOLD TARGET MAXIMUM
----------------------------- ----------------- --------------------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
James H. DeGraffenreidt, Jr. 7,784 September 30, 2001 -- 7,784 15,568
4,114 September 30, 2000 -- 4,114 8,228
Joseph M. Schepis 4,377 September 30, 2001 -- 4,377 8,754
2,313 September 30, 2000 -- 2,313 4,626
Frederic M. Kline 2,210 September 30, 2001 -- 2,210 4,420
1,168 September 30, 2000 -- 1,168 2,336
John K. Keane, Jr. 1,970 September 30, 2001 -- 1,970 3,940
1,041 September 30, 2000 -- 1,041 2,082
James B. White 1,751 September 30, 2001 -- 1,751 3,502
925 September 30, 2000 -- 925 1,850
</TABLE>
REPORT OF THE HUMAN RESOURCES COMMITTEE
The Human Resources Committee of the board of directors has
responsibility for recommending levels of executive compensation for
consideration by Washington Gas Light Company's board of directors. The
objective of the executive compensation program is to provide remuneration which
fairly reflects corporate performance and achievements and responsibilities of
each officer. Executive compensation is also intended to provide rewards and
incentives for achievement of long-term growth in shareholder value and to
attract and retain experienced corporate executives.
ELEMENTS OF EXECUTIVE COMPENSATION
----------------------------------
The committee's philosophy is that total compensation for each of
Washington Gas Light Company's officers should be competitive with executives
with similar experience and responsibility. This compensation should also
reflect the individual performance of each officer as well as corporate
performance.
To accomplish these objectives, each officer's compensation is composed
of base salary and elements of short-term and long-term incentive compensation.
Short-term incentive compensation is "at risk," in that payment of any of this
compensation depends upon performance of the individual officer and performance
of Washington Gas Light Company as a whole. Long-term incentive compensation is
also "at risk" in that it relates directly to the performance of Washington Gas
Light Company's common stock.
Total compensation opportunities at target levels are set at the
size-adjusted median of the utilities market. General industry data is also
reviewed, but to date has not impacted the determination of market levels.
Companies forming the utilities market are, to the extent possible, gas
and electric and gas utilities that are similar to Washington Gas Light Company
in business and revenues size. This is not the same group of companies used in
the performance graph shown on page 12, herein.
The committee has retained an independent executive compensation
consultant to review Washington Gas Light Company's executive compensation
practices and policies. The independent advisor conducts an annual study of
Washington Gas Light Company's executive compensation practices and policies to
determine their reasonableness and competitiveness in the relevant market. The
committee meets with the independent advisor during the year to review all
elements of Washington Gas Light Company's executive compensation plans.
8
<PAGE> 10
The following is a description of the elements of each officer's
compensation:
Base Salary: The committee intends base salary levels of
officers to be set at a level approximately equal to 90% of
utility market levels for officers of similar experience and
responsibility. This approach was taken to place base salaries
below overall market rates, and to leave the opportunity for
each officer to meet or exceed market compensation through
incentive pay. This continuing practice is designed to
encourage higher levels of performance by the officers. It is
seen by the committee as a way to align the interests of the
officers of Washington Gas Light Company more closely with the
interests of the shareholders.
To determine competitive compensation levels, management of
Washington Gas Light Company obtains data on executive
compensation paid by other utility and non-utility companies.
Based on that information and in consideration of each
officer's responsibility and performance, the chairman and
chief executive officer of Washington Gas Light Company makes
specific recommendations for salary adjustments for all
officers except himself. The committee reviews these
recommendations in consultation with the independent advisor
retained by the committee. Based on this consultation and the
data on industry compensation levels, the committee makes a
final recommendation to the full board of directors as to all
officers, including the chairman and chief executive officer
(whose compensation is described further below).
Short-Term Incentive Compensation: Short-term incentive pay
opportunities are set so that, when target awards are combined
with base salaries at 90% of market, total cash compensation
is at market.
For fiscal year 1999, any short-term incentive compensation
for officers would have been earned under Washington Gas Light
Company's Executive Incentive Compensation Plan. Payments
could have only been made under the Executive Incentive
Compensation Plan if Washington Gas Light Company's rate of
return on common stock equity exceeded a threshold amount
predetermined by the board of directors. For fiscal year 1999,
that threshold was an 11% rate of return on common equity.
Since Washington Gas Light Company earned a rate of return on
common equity of less than that threshold, individual awards
for 1999 were not paid under the Executive Incentive
Compensation Plan. For fiscal years beginning with fiscal year
2000, short term incentive compensation will not be awarded
under the Executive Incentive Compensation Plan, but will be
awarded under terms of Washington Gas Light Company's 1999
Incentive Compensation Plan, as described further below. This
plan was approved by shareholders at the 1999 Annual Meeting.
The committee determines individual awards under the 1999
Incentive Compensation Plan annually. If the rate of return on
common equity threshold and any other criteria are met for
payments under the 1999 Incentive Compensation Plan, the
Chairman and Chief Executive Officer will make recommendations
to the committee for awards for each officer except himself.
These recommendations include evaluation of the following
factors applicable to the corporation and each of the
officers:
For the corporation:
+ return on equity;
+ earnings before income tax;
+ operation and maintenance cost per
customer;
+ customer loyalty; and
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+ operational effectiveness.
For the officers:
+ success in meeting established corporate
and departmental goals;
+ managing resources within established
departmental budgets;
+ effectiveness in areas of leadership,
planning and teamwork;
+ peer evaluations; and
+ comparison to incentive compensation in
the natural gas distribution and other
industries, based on data supplied by the
outside study of executive compensation.
The committee considers the amount and basis for these
recommendations in consultation with its independent advisor.
Payouts under the 1999 Incentive Compensation Plan will be
higher or lower than target depending on both corporate and
individual performance. Payouts may range from 0% to 225% of
target.
Long-Term Incentive Compensation, the 1999 Incentive
Compensation Plan: The 1999 Incentive Compensation Plan
replaced Washington Gas Light Company's Long-Term Incentive
Compensation Plan, which expired by its terms on June 27,
1999. Outstanding grants under the Long-Term Incentive
Compensation Plan will remain outstanding and will vest
according to the terms of those grants. For fiscal year 2000
and future years, long-term incentive compensation awards will
be made by the committee under terms and conditions of the
1999 Incentive Compensation Plan.
The 1999 Incentive Compensation Plan is intended to provide
key personnel of Washington Gas Light Company with additional
incentives by increasing their interests in Washington Gas
Light Company and its success. The 1999 Incentive Compensation
Plan promotes achievement of long-term growth of Washington
Gas Light Company by assisting in the recruiting and retention
of key employees, including the officers. Under the 1999
Incentive Compensation Plan, there may be awards of stock
options, restricted stock, stock appreciation rights,
performance shares, bonus stock, other awards based on the
value of Washington Gas Light Company's common stock, dividend
units, and cash incentives. As noted previously, short-term
incentives may also be granted under the 1999 Incentive
Compensation Plan. The committee is the Administrator of the
1999 Incentive Compensation Plan and has the authority to
grant awards under it.
In accordance with terms of the 1999 Incentive Compensation
Plan, the committee has granted long-term compensation awards
in the form of stock options and performance shares. The size
of these grants was set to approximate the size-adjusted
median of the utility market. The exercise price of stock
options is the fair market value of Washington Gas Light
Company's common stock on the date of grant. The stock options
vest on the third anniversary of the grant and expire on the
tenth anniversary of the grant. For fiscal year 1999 awards,
performance shares vest on the 18- and 30-month anniversary of
the date of grant and are earned only if Washington Gas Light
Company achieves minimum total shareholder return levels as
compared to a peer group of companies.
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COMPENSATION OF THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
--------------------------------------------------------
Mr. DeGraffenreidt served as President and Chief Executive Officer
until December 1, 1998, when he was elected Chairman and Chief Executive
Officer. Mr. DeGraffenreidt's base salary was set at a level of approximately
90% of the relevant market for positions of similar responsibilities. In
accordance with the incentive compensation plan, described above, since the
threshold rate of return on common equity target for the year was not achieved,
no short-term incentive payment was paid to Mr. DeGraffenreidt for fiscal year
1999.
Long-term incentive awards in the form of stock options and performance
shares were granted to Mr. DeGraffenreidt and to other Washington Gas Light
Company officers during fiscal year 1999 under terms of the 1999 Incentive
Compensation Plan. These grants were at competitive levels based on a market
study conducted by the committee's independent advisor. The shares awarded to
Mr. DeGraffenreidt were previously disclosed herein. As for other executives,
the size of these grants was set so as to approximate the size-adjusted median
of the utility market. As described above, these stock option awards under the
1999 Incentive Compensation Plan vest in three years and expire on the tenth
anniversary of the date of grant. The exercise price of the stock options is
the fair market value of the shares on the date of grant. Performance shares
granted in fiscal year 1999 vest after 18 and 30 months. Performance shares are
earned only if Washington Gas Light Company achieves minimum total shareholder
return levels compared to a group of peer companies.
Deductibility of Compensation
-----------------------------
Under Section 162(m) of the Internal Revenue Code, Washington Gas Light
Company may not deduct compensation in excess of $1 million paid to Washington
Gas Light Company's Chief Executive Officer and to the other four highest
compensated executive officers unless it meets specific criteria for
performance-based compensation. As discussed in this report, the committee
intends to provide compensation that is both market and performance based.
Awards under the 1999 Incentive Compensation Plan are performance-based awards
and are intended to meet the Section 162(m) performance based plan requirements.
Washington Gas Light Company's compensation program is designed to achieve full
tax deductibility. However, we reserve the right to approve non-deductible
compensation if we believe it is in Washington Gas Light Company's best
interests. All compensation paid for fiscal year 1999 was fully deductible by
Washington Gas Light Company for federal income tax purposes.
HUMAN RESOURCES COMMITTEE
Daniel J. Callahan, III (Chairman)
Fred J. Brinkman
Melvyn J. Estrin
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SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly cumulative total
shareholder return on Washington Gas Light Company's common stock against the
cumulative total return of the Standard & Poor's 500 Stock Index and the Dow
Jones Utility Average for the period of five years commencing
September 30, 1994, and ended September 30, 1999.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS<F1>
**this graph presented a comparison of the Company's cumulative
total returns against the cumulative returns of the Standard & Poor's 500 Stock
Index and the Dow Jones Utility Average for the five years commencing
September 30, 1994, and ended September 30, 1999.
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Washington Gas Light Company $100.00 $117.73 $137.59 $168.33 $190.33 $195.52
---------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Standard & Poor's 500 $100.00 $129.74 $156.13 $219.27 $239.11 $305.61
---------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Dow Jones Utility Average $100.00 $126.29 $135.56 $156.50 $209.54 $211.28
---------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
<FN>
<F1> Assumes reinvestment of dividends daily for Standard & Poor's 500, quarterly
for the Dow Jones Utility Average and Washington Gas Light Company. This
calculation is based on $100 invested on September 30, 1994.
</FN>
</TABLE>
COMPENSATION OF DIRECTORS
Directors who are not employees of Washington Gas Light Company are
paid $1,000 per meeting of the board, committee of the board, and shareholders
meetings which they attend. During fiscal year 1999, the board of directors held
eight meetings, the Executive Committee met once, the Audit Review Committee
held five meetings, and the Governance Committee met four times and the
Human Resources Committee met seven times.
Directors are also paid a retainer of $10,000 per year and issued 800
shares of common stock of Washington Gas Light Company. A retirement plan for
outside directors adopted in 1995 was terminated by the board effective January
1, 1998, subject to vesting of benefits earned by the directors as of that date.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
The following table sets forth the beneficial ownership information as
of January 13, 2000, regarding Washington Gas Light Company's outstanding equity
securities by each director, each nominee for election as a director, the
executive officers named in the summary compensation table included herein in
Item 11-Executive Compensation, and all directors, nominees and executive
officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
OF BENEFICIAL OF
TITLE OF CLASS NAME OF BENEFICIAL OWNER OWNERSHIP<F1> CLASS
------------------------------ -------------------------------- ------------------------ -----------
<S> <C> <C> <C>
Common Stock Michael D. Barnes 3,906 <F2>
Common Stock Fred J. Brinkman 4,650 <F2>
Common Stock Daniel J. Callahan, III 8,656 <F2>
Common Stock Orlando W. Darden 1,230 <F2>
Common Stock James H. DeGraffenreidt, Jr. 35,779 <F2>
Common Stock Melvyn J. Estrin 10,506 <F2>
Common Stock John K. Keane, Jr. 18,456 <F2>
Common Stock Frederic M. Kline 12,175 <F2>
Common Stock Philip A. Odeen 2,600 <F2>
Common Stock Joseph M. Schepis 31,424 <F2>
Common Stock James B. White 6,751 <F2>
Common Stock Karen Hastie Williams 3,224 <F2>
All directors and executive
officers as a group:
Common Stock 187,692 <F2>
------------------------------ -------------------------------- ------------------------ -----------
<FN>
<F1> All shares are directly owned by persons shown in this table except
the following shares which are owned indirectly: (a) 12,942 shares
are held by executive officers in the Washington Gas Light Company's
Savings Plan for Management Employees, and (b) 2,000 shares are
owned by Mr. Callahan's wife, and Mr. Callahan disclaims beneficial
ownership of those shares.
<F2> Less than 1% of class outstanding.
</FN>
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
Karen Hastie Williams, a Director of the Company, is a partner in the
law firm Crowell & Moring. Michael D. Barnes, a Director of the Company, is a
partner in the law firm Hogan & Hartson. Both firms performed legal services for
the Company during fiscal year 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WASHINGTON GAS LIGHT COMPANY
----------------------------
(Registrant)
Date January 28, 2000 /s/ Frederic M. Kline
-------------------------------- --------------------------------
Frederic M. Kline
Vice President and
Chief Financial Officer
(Principal Financial Officer)
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