Exhibit 10.2

PRIVILEGED AND CONFIDENTIAL

April 1, 2011

Mr. Clark Taylor

26 Briarwood Trace

Corbin, Kentucky 40701

Dear Clark:

TECO Coal Corporation (the “Company”) considers it essential to the best
interests of its stockholders to foster the continuous employment of key
management personnel. In this connection, the Board of Directors of the Company
(the “Board”) recognizes the possibility of a change in control may exist and
that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of key management
personnel to the detriment of the Company and its stockholder.

The Board has determined that appropriate steps should be taken to reinforce and
encourage your continued attention and dedication to your assigned duties
without distraction in the face of potentially disturbing circumstances arising
from the possibility of a change in control of the Company.

In order to induce you to remain in the employ of the Company, the Company
agrees that you shall receive the severance benefits set forth in this letter
agreement (the “Agreement”) in the event your employment with the Company is
terminated subsequent to a “change in control of the Company” (as defined in
Section 2 hereof) (or is deemed to be terminated subsequent to a change in
control of the Company in accordance with the second sentence of Section 3
hereof) under the circumstances described below. You have entered into a similar
agreement with TECO Energy, Inc. (the “TECO Energy Agreement”).

1. Term of Agreement. This Agreement shall commence on the date hereof and shall
continue in effect through June 30, 2013; provided, however, that commencing on
July 1, 2012 and each July 1 thereafter, the term of this Agreement shall
automatically be extended for one additional year unless, not later than
March 31 of such year, the Company shall have given notice that it does not wish
to extend this Agreement); provided, further, if a change in control of the
Company shall have occurred during the original or extended term of this
Agreement, this Agreement shall continue in effect for a period of thirty-six
(36) months beyond the month in which such change in control occurred. ”).
Notwithstanding anything to the contrary in this Agreement, if you receive
payment or become entitled to payment under the TECO Energy Agreement this
Agreement shall immediately terminate and no payments under this Agreement shall
be due or paid (for the avoidance of doubt, if you become simultaneously
entitled to payment under both this Agreement and the TECO Energy Agreement, you
will receive payment under this Agreement and not the TECO Energy Agreement).

2. Change in Control. Except as provided in the second sentence of Section 3
hereof, no benefits shall be payable hereunder unless there shall have been a
change in control of the Company,

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as set forth below. For purposes of this Agreement, a “change in control of the
Company” shall be deemed to have occurred if there is consummated with an
unrelated third party any of the following: a) the sale by the Company of all or
substantially all of the assets of the Company and its subsidiaries, b) the sale
of all of the capital stock of the Company, or c) a merger with or into such
third party.

3. Termination Following Change in Control. If your employment is terminated
following a change in control of the Company and during the term of this
Agreement, other than (A) by the Company for Cause, (B) by reason of death or
Disability, or (C) by you without Good Reason, then the Company shall pay you
the amounts, and provide you the benefits, described in Section 4(iii) hereof.
For purposes of this Agreement, your employment shall be deemed to have been
terminated following a change in control of the Company by the Company without
Cause or by you with Good Reason, if (i) your employment is terminated by the
Company without Cause prior to a change in control of the Company (whether or
not such a change in control ever occurs) and such termination was at the
request or direction of a “person” (as such term is used in Sections 13(d) and
14(d) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended) who has entered into an agreement with the
Company the consummation of which would constitute a change in control of the
Company, or (ii) you terminate your employment for Good Reason prior to a change
in control of the Company (whether or not such a change in control ever occurs)
and the circumstance or event which constitutes Good Reason occurs at the
request or direction of such person. Notwithstanding anything in this Agreement
to the contrary, you shall not be entitled to the benefits provided in Section 4
hereof unless you have incurred a “separation from service” under Section 409A
of the Code.

(i) Disability. If, as a result of your incapacity due to physical or mental
illness, you shall have been absent from the full-time performance of your
duties with the Company for six (6) consecutive months, and within thirty
(30) days after written notice of termination is given you shall not have
returned to the full-time performance of your duties, your employment may be
terminated for “Disability”.

(ii) Cause. Termination by the Company of your employment for “Cause” shall mean
termination upon (A) the willful and continued failure by you to substantially
perform your duties with the Company (other than any such failure resulting from
your incapacity due to physical or mental illness or any such actual or
anticipated failure after the issuance of a Notice of Termination by you for
Good Reason, as defined in Subsections 3(iv) and 3(iii), respectively) after a
written demand for substantial performance is delivered to you by the Board,
which demand specifically identifies the manner in which the Board believes that
you have not substantially performed your duties, or (B) the willful engaging by
you in conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise. For purposes of this Subsection, no act, or failure to
act, on your part shall be deemed “willful” unless done, or omitted to be done,
by you not in good faith and without reasonable belief that your action or
omission was in the best interest of the Company. Notwithstanding the foregoing,
you shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to you a copy of a resolution

 

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duly adopted by the affirmative vote of not less than three-quarters (3/4) of
the entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Board), finding that in the
good faith opinion of the Board you were guilty of conduct set forth above in
this Subsection and specifying the particulars thereof in detail.

(iii) Good Reason. “Good Reason” for termination by you of your employment shall
mean the occurrence (without your express written consent) after any change in
control of the Company, or prior to a change in control of the Company under the
circumstances described in the second sentence of Section 3 hereof, of any one
of the following acts by the Company, or failures by the Company to act:

(A) the assignment to you of any duties inconsistent (except in the nature of a
promotion) with the position in the Company that you held immediately prior to
the change in control of the Company or a substantial adverse alteration in the
nature or status of your position or responsibilities or the conditions of your
employment from those in effect immediately prior to the change in control of
the Company;

(B) a reduction by the Company in your annual base salary as in effect on the
date hereof or as the same may be increased from time to time;

(C) the Company’s requiring you to be based more than fifty (50) miles from the
Company’s offices at which you were principally employed immediately prior to
the date of the change in control of the Company except for required travel on
the Company’s business to an extent substantially consistent with your present
business travel obligations;

(D) the failure by the Company to pay to you any portion of your current
compensation or compensation under any deferred compensation program of the
Company, within seven (7) days of the date such compensation is due;

(E) the failure by the Company to allow you to participate on similar terms in
any material compensation plan or benefit plan that executives with similar
titles or responsibilities in the Company and its affiliates participate in or
the failure by the Company to provide you with the number of paid vacation days
to which you are entitled on the basis of your years of service with the Company
in accordance with the Company’s normal vacation policy in effect at the time of
the change in control of the Company;

(F) the failure of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated in
Section 6 hereof; or

 

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(G) any purported termination of your employment which is not effected pursuant
to a Notice of Termination satisfying the requirements of Subsection (iv) below
(and, if applicable, the requirements of Subsection (ii) above), which purported
termination shall not be effective for purposes of this Agreement.

Your right to terminate your employment pursuant to this Subsection shall not be
affected by your incapacity due to physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder.

(iv) Notice of Termination. Any purported termination of your employment by the
Company or by you shall be communicated by written Notice of Termination to the
other party hereto in accordance with Section 7 hereof. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of your employment under the provision so indicated.

(v) Date of Termination, Etc. “Date of Termination” shall mean (A) if your
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such thirty (30) day period), and (B) if your
employment is terminated pursuant to Subsection (ii) or (iii) above or for any
other reason (other than Disability), the date specified in the Notice of
Termination (which, in the case of a termination pursuant to Subsection
(ii) above shall not be less than thirty (30) days, and in the case of a
termination pursuant to Subsection (iii) above shall not be less than fifteen
(15) nor more than sixty (60) days, respectively, from the date such Notice of
Termination is given); provided that if within fifteen (15) days after any
Notice of Termination is given, or, if later, prior to the Date of Termination
(as determined without regard to this proviso), the party receiving such Notice
of Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties or by a
binding arbitration award; and provided further that the Date of Termination
shall be extended by a notice of dispute given by you only if such notice is
given in good faith and you pursue the resolution of such dispute with
reasonable diligence. Notwithstanding the pendency of any such dispute, the
Company will continue to pay you your full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to, base
salary) and continue you as a participant in all compensation, benefit and
insurance plans in which you were participating when the notice giving rise to
the dispute was given, until the dispute is finally resolved in accordance with
this Subsection. Amounts paid under this Subsection are in addition to all other
amounts due under this Agreement and shall not be offset against or reduce any
other amounts due under this Agreement. Notwithstanding anything in this
Agreement to the contrary, you shall not be entitled to the benefits provided in
Section 4 hereof unless you have incurred a “separation from service” under Code
Section 409A.

 

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4. Compensation Upon Termination or During Disability. Following a change in
control of the Company, as defined in Section 2, or prior to a change in control
of the Company under the circumstances described in the second sentence of
Section 3 hereof, upon termination of your employment or during a period of
disability you shall be entitled to the following benefits:

(i) During any period that you fail to perform your full-time duties with the
Company as a result of incapacity due to physical or mental illness, you shall
continue to receive your base salary at the rate in effect at the commencement
of any such period, together with all compensation payable to you under the
Company’s disability plan or program or other similar plan during such period,
until this Agreement is terminated pursuant to Section 3(i) hereof. Thereafter,
or in the event your employment shall be terminated by reason of your death,
your benefits shall be determined under the Company’s retirement, insurance and
other compensation programs then in effect in accordance with the terms of such
programs.

(ii) If your employment shall be terminated by the Company for Cause or by you
other than for Good Reason, the Company shall pay you your full base salary
through the Date of Termination at the rate in effect at the time Notice of
Termination is given, plus all other amounts to which you are entitled under any
compensation plan of the Company at the time such payments are due, and the
Company shall have no further obligations to you under this Agreement.

(iii) If your employment by the Company terminates in a manner entitling you to
benefits under this Section pursuant to Section 3 hereof, then you shall be
entitled to the benefits provided below:

(A) the Company shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
plus all other amounts to which you are entitled under any compensation plan of
the Company, at the time such payments are due, except as otherwise provided
below;

(B) in lieu of any further salary payments to you for periods subsequent to the
Date of Termination, the Company shall pay as severance pay to you a lump sum
severance payment (together with the payments provided in paragraphs (C) and
(D) below, the “Severance Payments”) equal to three (3) times the sum of (1) the
greater of (a) your annual rate of base salary in effect on the Date of
Termination or (b) your annual rate of base salary in effect immediately prior
to the change in control of the Company and (2) your highest annual incentive
target award in effect at any time during the 36 months prior to the Date of
Termination;

(C) for a thirty-six (36) month period after such termination, the Company shall
arrange to provide you with life, disability, accident and health insurance
benefits substantially similar to those which you are receiving immediately
prior to the Notice of Termination. Benefits otherwise receivable by you
pursuant to this Subsection 4(iii)(C) shall

 

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be reduced to the extent comparable benefits are actually received by you from a
subsequent employer during the thirty-six (36) month period following your
termination, and any such benefits actually received by you shall be reported to
the Company. The period during which benefits are provided under this Section
shall satisfy the Company’s obligations to provide continuation coverage under
Section 4980B of the Code; and

(D) in addition to any retirement benefits to which you are entitled under a
retirement plan or any supplemental retirement or excess benefit plan, and in
order for you to receive an amount approximating the additional retirement
benefits you would have received under the TECO Energy retirement arrangements
had your employment not been terminated, the Company shall pay you in cash a
lump sum equal to (a) $45,000 multiplied by (b) the number of full calendar
months remaining after the Date of Termination up to the first of the month
immediately following the month you would reach the age that is three years
prior to your normal social security retirement age (not to exceed twenty
months).

(iv) Except as otherwise specifically provided in paragraph (C) hereof, the
payments provided for in Subsection (iii) shall be made not later than the fifth
day following the Date of Termination; provided, however, that if the amounts of
such payments cannot be finally determined on or before such day, the Company
shall pay to you on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payments and shall pay the remainder of
such payments (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the Date of
Termination. In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall constitute a
loan by the Company to you payable on the fifth day after demand therefor by the
Company (together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code). Notwithstanding anything in this Agreement to the contrary, to the
extent required by Section 409A of the Code, payment of the amounts payable
under this Agreement shall commence no earlier than the earlier of (i) the first
day of the first month commencing at least six (6) months following your
separation from service with the Company (within the meaning of Section 409A) or
(ii) your date of death. Any amount the payment of which is delayed by
application of the preceding sentence shall be paid as soon as possible
following the expiration of such six month period and shall be paid with
interest (at an interest rate equal to the rate used to calculate actuarial
equivalence in the Pension Plans) from the date on which such amount would
otherwise have been paid but for the application of the preceding sentence to
the date such amount is actually paid. To the extent you are terminated
(i) following a change in control of the Company but prior to a change in
ownership or control of the Company within the meaning of Section 409A of the
Code or (ii) prior to a change in control of the Company in a manner described
in the second sentence of Section 3, to the extent required to avoid accelerated
taxation and/or tax penalties under Section 409A of the Code, amounts payable to
you hereunder, to the extent not in excess of the amount that you would have
received under any other pre-change in control severance plan or arrangement
with the Company had such plan or arrangement been applicable, shall be paid at
the time and in the manner provided by such plan or arrangement and the
remainder shall be paid to you in accordance with the provisions of this
Section 4;

 

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(v) You shall not be required to mitigate the amount of any payment provided for
in this Section 4 by seeking other employment or otherwise, nor, except as
specifically provided in Sections 4(iii)(C) above, shall the amount of any
payment or benefit provided for in this Section 4 be reduced by any compensation
earned by you as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by you to the Company,
or otherwise; and

(vi) the Company shall also pay to you all legal fees and expenses incurred by
you as a result of or in connection with such termination, including all such
fees and expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit provided by
this Agreement (other than any such fees or expenses incurred in connection with
any such claim which is determined by arbitration, in accordance with Section 11
of this Agreement, to be frivolous) or in connection with any tax audit or
proceeding to the extent attributable to the application of Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”), to any payment or
benefit provided hereunder. Such payments shall be made within five (5) business
days after delivery of your written requests for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably may require;
provided, however, that in no event shall any such payments be made later than
the last day of your taxable year following the taxable year in which the fee or
expense was incurred.

5. Limit on Severance Payments. In the event that (i) any payment or benefit
received or to be received by you in connection with a change in control of the
Company or the termination of your employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a change in control or any person affiliated with
the Company or such person) (collectively with the Severance Payments, “Total
Payments”) would not be deductible (in whole or part) as a result of section
280G of the Code by the Company, an affiliate or other person making such
payment or providing such benefit and (ii) the net amount retained by you, after
paying the excise tax imposed by section 4999 of the Code and any federal, state
and local income and employment taxes on the Total Payments, would not exceed
the net amount that would have been retained by you after the reduction of the
Severance Payments as set forth below and the payment of any federal, state and
local income and employment taxes on the Total Payments as so reduced, the
Severance Payments shall be reduced until no portion of the Total Payments is
not deductible, or the Severance Payments are reduced to zero. For purposes of
this limitation (a) no portion of the Total Payments the receipt or enjoyment of
which you shall have effectively waived in writing prior to the date of payment
of the Severance Payments shall be taken into account, (b) no portion of the
Total Payments shall be taken into account which in the opinion of tax counsel
selected by the Company’s independent auditors and acceptable to you does not
constitute a “parachute payment” within the meaning of section 280G(b)(2) of the
Code, (c) the Severance Payments shall be reduced only to the extent necessary
so that the Total Payments (other

 

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than those referred to in clauses (a) or (b)) in their entirety constitute
reasonable compensation for services actually rendered within the meaning of
section 280G(b)(4) of the Code or are otherwise not subject to disallowance as
deductions, in the opinion of the tax counsel referred to in clause (b); and
(d) the value of any non-cash benefit or any deferred payment or benefit
included in the Total Payments shall be determined by the Company’s independent
auditors in accordance with the principles of sections 280G(d)(3) and (4) of the
Code. For purposes of determining the income taxes on the Total Payments, you
shall be deemed to pay federal income tax at the highest marginal rate of
federal income taxation in the calendar year in which the Total Payments are to
be made and local income taxes at the highest marginal rate of taxation in the
state and locality of your residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.

6. Successors; Binding Agreement.

(i) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle you to
compensation from the Company in the same amount and on the same terms as you
would be entitled to hereunder if you terminate your employment for Good Reason
following a change in control of the Company, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
“Company” shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.

(ii) This Agreement shall inure to the benefit of and be enforceable by your
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die while any amount would
still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or, if there
is no such designee, to your estate.

7. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt.

 

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8. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by you and such officer as may be specifically designated by the
Board. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which is not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Florida, without giving effect to the conflicts of
law principles thereof. All references to sections of the Exchange Act or the
Code shall be deemed also to refer to any successor provisions to such sections.
Any payments provided for hereunder shall be paid net of any applicable
withholding required under federal, state or local law. The obligations of the
Company under Section 4 shall survive the expiration of the term of this
Agreement.

9. Validity. The invalidity or unenforceability or any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

10. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

11. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration conducted before a
panel of three arbitrators in the State of Florida in accordance with the rules
of the American Arbitration Association then in effect. Judgment may be entered
on the arbitrator’s award in any court having jurisdiction; provided, however,
that you shall be entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

12. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and during the
term of the Agreement supersedes the provisions of all prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party hereto with respect to the subject matter hereof, including the
Prior Agreement.

13. Effective Date. This Agreement shall become effective as of the date set
forth above. If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this letter
which will then constitute our agreement on this subject.

 

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Sincerely, TECO Coal Corporation By:  

/s/ John. B. Ramil

Name:   John B. Ramil Title:   Director

 

Agreed to this 1st day of April, 2011.

/s/ Clark Taylor

Clark Taylor

 

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