Exhibit 10.1

TECO ENERGY, INC.

2004 EQUITY INCENTIVE PLAN

Performance Shares Agreement

TECO Energy, Inc. (the “Company”) and                                         
(the “Grantee”) have entered into this Performance Shares Agreement (the
“Agreement”) dated                      under the Company’s 2004 Equity
Incentive Plan (the “Plan”). Capitalized terms not otherwise defined herein have
the meanings given to them in the Plan.

1. Grant of Performance Shares. Pursuant to the Plan and subject to the terms
and conditions set forth in this Agreement, the Company hereby grants, issues
and delivers to the Grantee              shares (“Number of Restricted
Performance Shares”) of its Common Stock (the “Restricted Performance Shares”)
as of the date of this Agreement and the Company will grant, issue and deliver
to the Grantee the Performance Reward Percentage multiplied times             
shares (“Number of Additional Performance Shares”) of its Common Stock (the
“Additional Performance Shares”) no later than 30 days after the end of the
Performance Period.

The “Performance Period” is the period beginning April 1, 2008 and ending on the
date determined under Section 3.

“Total Shareholder Return” is the amount obtained by dividing (1) the sum of
(a) the amount of dividends with respect to the Performance Period, assuming
dividend reinvestment, and (b) the difference between the share price at the end
and beginning of the Performance Period, by (2) the closing share price at the
beginning of the Performance Period, with the share price in each case being
determined by using the average closing price during the 20 trading days
preceding (and inclusive of) the date of determination The share price shall be
equitably adjusted for stock splits and other similar corporate actions
affecting the stock.

The “Performance Measurement” is a measurement of the relative performance of
the Company’s Common Stock calculated by assuming the Company was included in
the group of companies identified as the Dow Jones electricity group and
multiutility group, or the successors to those two groups as may be determined
by the Committee (such groups being collectively defined herein as the “Peer
Group”) and then ordering the Peer Group (as constituted at the end of the
Performance Period) by Total Shareholder Return from highest to lowest.

The “Performance Reward Percentage” is the percentage shown in column B
corresponding to the Performance Measurement in column A, with interpolation of
the percentages in column B in proportion to the corresponding placement in
column A. The Performance Reward Percentage for Restricted Performance Shares
shall not exceed 100%, and the Performance Reward Percentage for Additional
Performance Shares shall be the amount, if any, in excess of 100%.

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A

  

B

Performance Measurement    Performance Reward Percentage

Bottom 25% of the Peer Group

   0%

25th Percentile of the Peer Group

   25%

Equal to the median of the Peer Group

   100%

Top 10% of the Peer Group

   150%

2. Restrictions on Restricted Performance Shares. Until the restrictions
terminate under Section 3, unless otherwise determined by the Committee:

(a) the Restricted Performance Shares may not be sold, assigned, pledged or
transferred by the Grantee; and

(b) all Restricted Performance Shares will be forfeited and returned to the
Company and the Grantee will cease to have any right to receive any additional
Performance Shares, if the Grantee ceases to be an employee of the Company or
any business entity in which the Company owns directly or indirectly 50% or more
of the total voting power or has a significant financial interest as determined
by the Committee (an “Affiliate”).

3. End of Performance Period and Termination of Restrictions. The Performance
Period will end, the restrictions will terminate with respect to the Number of
Restricted Performance Shares multiplied times the Performance Reward Percentage
up to and including 100% (the “Vested Shares”), any Restricted Performance
Shares that are not Vested Shares will be forfeited and returned to the Company
(the “Forfeited Shares”), and the Grantee will cease to have any right to
receive any Additional Performance Shares in excess of the Vested Shares, on the
earliest to occur of the events described in (a) through (f), below. Provided,
however, that if any such event occurs on a date that would cause the
Performance Period to be shorter than four times as long as the period between
the beginning of the Performance Period and the date of this Agreement, then the
Performance Period will end on the first date after that period of time has
elapsed.

(a) March 31, 20    ;

(b) the termination of Grantee’s employment with the Company or any Affiliate
because of a disability that would entitle the Grantee to benefits under the
long-term disability benefits program of the Company for which the Grantee is
eligible, as determined by the Committee;

(c) the termination by the Company or any Affiliate of Grantee’s employment
other than for Cause as determined by the Committee. “Cause” means (i) willful
and continued failure of the Grantee to substantially perform his duties with
the Company or such Affiliate (other than by reason of physical or mental
illness) after written demand specifically identifying

 

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such failure is given to the Grantee by the Company, or (ii) willful conduct by
the Grantee that is demonstrably and materially injurious to the Company. For
purposes of this subsection, “willful” conduct requires an act, or failure to
act, that is not in good faith and that is without reasonable belief that the
action or omission was in the best interest of the Company or the Affiliate;

(d) the Grantee’s retirement from the Company or an Affiliate at or after
attainment of the age that is three years before the Grantee’s Social Security
Normal Retirement Age, or any earlier date that the Committee determines will
constitute a normal retirement for purposes of this Agreement;

(e) the Grantee’s death; or

(f) upon a Change in Control. For purposes of this Agreement, a “Change in
Control” means a change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), whether or not the Company is in fact required to comply
therewith; provided, that, without limitation, such a Change in Control shall be
deemed to have occurred if:

(1) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a corporation owned,
directly or indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company’s then outstanding securities;

(2) the following individuals cease to constitute a majority of the number of
directors then serving: individuals who on the date hereof constitute the Board
and any new director (other than a director whose initial assumption of office
is in connection with an actual or threatened election contest, including but
not limited to a consent solicitation, relating to the election of directors of
the Company) whose election by the Board or nomination for election by the
shareholders of the Company was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors on the
date hereof or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof;

(3) there is consummated a merger or consolidation of the Company or any direct
or indirect subsidiary of the Company with any other corporation, other than
(i) a merger or consolidation resulting in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the combined voting securities of the Company
or such surviving entity or any parent thereof outstanding immediately after
such merger or consolidation or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
“person” (as hereinabove defined) acquires 30% or more of the combined voting
power of the Company’s then outstanding securities; or

 

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(4) the shareholders of the Company approve a plan of complete liquidation of
the Company or there is consummated the sale or disposition by the Company of
all or substantially all of the Company’s assets.

Notwithstanding anything to the contrary (except for the requirement in
Section 1 of this Agreement that any Additional Performance Shares will be
granted, issued and delivered no later than 30 days after the end of the
Performance Period), when the Performance Period ends pursuant to Section 3(a)
of this Agreement, or when otherwise required by Section 162(m) of the Internal
Revenue Code, (i) the Committee shall promptly certify the Performance
Measurement and (ii) the Additional Performance Shares (if any) shall be issued,
and the restrictions on the Vested Shares shall be terminated and/or the
Forfeited Shares shall be forfeited, as applicable, on the date of that
certification.

4. Rights as Shareholder. Subject to the restrictions and other limitations and
conditions provided in this Agreement, the Grantee as owner of the Restricted
Performance Shares will have all the rights of a shareholder, including but not
limited to the right to receive all dividends paid on, and the right to vote,
the Restricted Performance Shares.

5. Stock Certificates. The Restricted Performance Shares will be registered in
the name of the Grantee and held by the Company’s transfer agent in
uncertificated form in a restricted account, or a certificate will be issued for
shares of Restricted Performance Shares and will be registered in the name of
the Grantee and deposited by the Grantee with the Company and will bear a legend
in substantially the following form:

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED
HEREBY ARE SUBJECT TO THE TERMS, CONDITIONS AND RESTRICTIONS (INCLUDING
RESTRICTIONS ON TRANSFER AND FORFEITURE PROVISIONS) CONTAINED IN AN AGREEMENT
BETWEEN THE REGISTERED OWNER AND TECO ENERGY, INC. A COPY OF SUCH AGREEMENT WILL
BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST AND WITHOUT
CHARGE.

Upon the termination of the restrictions imposed under this Agreement as to any
shares of Restricted Performance Shares held in uncertificated form by the
Company’s transfer agent or deposited with the Company hereunder under
conditions that do not result in the forfeiture of those shares, the Company
will transfer the unrestricted shares electronically to Grantee’s brokerage
account or will return to the Grantee (or to such Grantee’s legal
representative, beneficiary or heir) certificates, without the above legend, for
such shares.

6. Adjustment of Terms. In the event of corporate transactions affecting the
Company’s outstanding Common Stock, the Committee will equitably adjust the
number and kind of Additional Performance Shares subject to this Agreement to
the extent provided by the Plan.

 

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7. Notice of Election Under Section 83(b). If the Grantee makes an election
under Section 83(b) of the Internal Revenue Code of 1986, as amended, with
respect to Restricted Performance Shares, he or she will provide a copy thereof
to the Company within 30 days of the filing of such election with the Internal
Revenue Service.

8. Withholding Taxes. The Grantee will pay to the Company, or make provision
satisfactory to the Committee for payment of, any taxes required by law to be
withheld in respect of the Restricted Performance Shares and Additional
Performance Shares no later than the date of the event creating the tax
liability. Such tax obligations may be paid in whole or in part in shares of
Common Stock, including the Restricted Performance Shares and the Additional
Performance Shares, valued at fair market value on the date of delivery (which
is defined as the closing price on the New York Stock Exchange on the previous
trading day). The Company and its Affiliates may, to the extent permitted by
law, deduct any such tax obligations from any payment of any kind otherwise due
to the Grantee.

9. The Committee. Any determination by the Committee under, or interpretation of
the terms of, this Agreement or the Plan will be final and binding on the
Grantee.

10. Limitation of Rights. The Grantee will have no right to continued employment
by virtue of this Agreement.

11. Amendment. The Company may amend, modify or terminate this Agreement,
including substituting another Award of the same or a different type and
changing the date of realization, provided that the Grantee’s consent to such
action will be required unless the action, taking into account any related
action, would not adversely affect the Grantee, and further provided that in no
event shall the Agreement be amended in any manner that would cause the
Restricted Performance Shares upon termination of the restrictions or any
Additional Performance Shares upon grant to fail to qualify as excluded from the
calculation of Internal Revenue Code Section 162(m) covered compensation.

12. Governing Law. This Agreement will be governed by and interpreted in
accordance with the laws of Florida.

 

TECO ENERGY, INC. By:  

 

  C.E. Childress   Chief Human Resources Officer

 

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