Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT made this 4th day of August 2010, by and between TECO Energy,
Inc. (“TECO”), a Florida corporation, and Sherrill W. Hudson, (“Executive”):

WITNESSETH:

Whereas, Executive has served as Chief Executive Officer and Chairman of the
Board of TECO and its principal subsidiary, Tampa Electric Company, since
July 6, 2004; and

Whereas, the Board of Directors of TECO and Tampa Electric Company wish to split
the positions of Chairman and Chief Executive Officer as part of their
management succession planning, with the appointment of a new Chief Executive
Officer and with Executive continuing to serve as Chairman of the Board of
Directors of both TECO and Tampa Electric Company as part of a new role as
Executive Chairman during the term of this Agreement;

Now therefore, it is agreed as follows:

 

1. Duties of Executive: The Executive is employed by TECO to render services on
behalf of TECO as Executive Chairman and shall report directly to the Board of
Directors of TECO. The Executive shall preside at all meetings of TECO’s Board
of Directors at which he is present. Additionally the Executive shall provide
for the proper flow of information to and from the Board of Directors, oversee
TECO’s long-term strategic planning processes, mentor and advise the Chief
Executive Officer, assist in promoting effective relations between TECO and its
external stakeholders and promote the highest standards of ethical conduct by
TECO and its team members. Executive shall also perform the same duties for
Tampa Electric Company as he performs for TECO.

 

2. Conflicts of Interest: The Executive will devote his business time,
attention, skill, and energy to the business of TECO and its subsidiaries, will
use his best efforts to promote the success of TECO’s business, and will
cooperate fully with the Board of Directors in the advancement of the best
interests of TECO. The Executive shall not be allowed to serve as a member of
more than three other public company boards without TECO consent. The Executive
shall not engage in or carry on or be employed by, directly or indirectly, any
other business or profession without the consent of TECO; provided, however,
that nothing herein contained shall prohibit the Executive from investing or
trading in stocks, bonds, commodities, or other securities (including
controlling interests in privately held companies that do not compete with TECO)
or forms of investments, including real property.

 

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Exhibit 10.1

 

3. Compensation: TECO shall pay to the Executive as compensation for his
services annual base compensation for calendar years as follows and shall not be
eligible for any annual increases (Payments shall be made in accordance with
TECO’s normal pay practices for exempt team members.):

 

     Annual Pay Rate      2010    $ 430,000    (actual amount to be $176,712.33
for period of August 4 – December 31, 2010) 2011    $ 325,000    2012    $
270,000   

The Executive shall also be eligible to participate in TECO’s Annual Incentive
officer bonus program. Executive’s 2010 bonus shall be determined by adding the
results of two separate calculations, the first calculation of bonus from
January 1, 2010 through August 3, 2010 shall be calculated using Executive’s
goals, target (80%) and actual base compensation during that period and the
second calculation shall use a 75% target, $176,712.33 base compensation and
Executive’s goals for that period. For 2011 and 2012, Executive’s bonus shall be
calculated using Executive’s goals, a seventy-five percent (75%) target and
Executive’s then base compensation.

 

4. Benefits: The Executive shall be eligible to participate in TECO’s Equity
Incentive Plan and receive grants at the same time and under the same terms and
conditions as other TECO officers, except that the target amount of such grants
shall be based on 150% of Executive’s then annual base salary. For purposes of
Executive’s time-based restricted stock, Executive’s retirement on January 1,
2013 shall be considered a normal retirement and appropriate for removal of the
restrictions on the shares. Executive shall be eligible to elect coverage from
TECO’s benefit plans in which other exempt employees participate that may be in
effect from time to time in accordance with each plan’s terms and conditions.

 

5. Term of Agreement: Subject to the provisions of Section 6 hereof regarding
termination, the term of this Agreement shall commence August 4, 2010, and shall
continue until 11:59 PM, December 31, 2012 (“Term”). Executive shall retire from
employment effective as of January 1, 2013 and shall not be entitled to any
severance payments upon such retirement.

 

6. Termination of Agreement; Severance:

 

  a. TECO may terminate this Agreement at any time for Cause. A termination for
cause shall follow the same procedures and definitions as provided in paragraph
3(ii) of Executive’s change in control agreement dated July 30, 2008.

 

  b. Executive may terminate this Agreement at any time upon 15 days written
notice to TECO. If Executive terminates this Agreement with such notice,
Executive shall be paid for any compensation earned through the date of
termination but shall not be entitled to any further salary payments or benefits
from TECO.

 

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Exhibit 10.1

 

  c. The Executive shall only be entitled to a severance payment if this
Agreement is terminated by TECO other than for Cause and if Executive signs (and
has not revoked prior to the expiration of the applicable revocation period) the
release attached as Exhibit A no later than 30 calendar days from the date of
termination. Such payment shall be made within 15 calendar days of the
expiration of the applicable revocation period. In such event, such payment
shall be equal to 100% of the Executive’s base salary plus target bonus for the
remainder of the Term. Notwithstanding anything to the contrary in this
Agreement, if Executive is entitled to any payments under Executive’s change in
control agreement dated July 30, 2008, then Executive shall not receive any
severance payments under this Agreement.

 

7. Disability or Death of Executive:

 

  a. If Executive is unable to perform his services for a continuous period of
at least six (6) months by reason of illness or incapacity, his compensation
shall be continued during such period. Thereafter, the compensation otherwise
payable to him during a continuing period of illness or incapacity shall be
terminated. Executive’s full compensation shall be reinstated upon his return to
employment and the discharge of his duties hereunder. To the extent that
Executive is paid disability benefits under any policy of insurance purchased by
TECO, or the premiums of which are paid for by TECO, the payments due pursuant
to this subparagraph shall be correspondingly reduced.

 

  b. This Agreement shall terminate automatically upon the death of the
Executive. Compensation shall thereafter no longer accrue to the Executive, but
compensation accrued but not yet paid shall be promptly paid to the Executive’s
estate.

 

8. Non-Disclosure of Information.

The Executive, during his employment with TECO, has had and will continue to
have access to and become familiar with information concerning the business and
affairs of TECO including but not limited to strategic plans, methods of
operation and training, quality control, budgeting and purchasing and financial
information and data used by TECO in carrying out its business. The Executive
shall not disclose any of the above-stated information or records, directly or
indirectly, nor use them in any way, either during the term of his employment or
at any time thereafter, except as required in the course of his/her employment.
All information and items set forth above, including but not limited to
information that would be detrimental to the business of TECO if disclosed,
whether prepared by the Executive, or otherwise coming into his/her possession,
shall be assigned immediately for no additional consideration to and remain the
exclusive property of TECO.

 

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Exhibit 10.1

 

The parties hereto agree that damages at law, including but not limited to
monetary damages, will be insufficient remedy to TECO in the event that the
confidentiality provision of this Section is violated and that, in addition to
any remedies or rights that may be available to TECO, all of which other
remedies or rights shall be deemed to be cumulative, retained by TECO and not
waived by the enforcement of any remedy available hereunder, including but not
limited to the right to sue for monetary damages, TECO also shall be entitled,
upon application to a court to competent jurisdiction, to obtain injunctive
relief, including but not limited to a temporary restraining order to temporary,
preliminary or permanent injunction, to enforce the provisions of this Section.

 

9. Compliance with 409A:

This Agreement is intended to comply with the restrictions contained in
Section 409A of the Internal Revenue Code and the final Treasury Regulation
thereunder. This Agreement shall be construed in a manner to give effect to such
intention. Notwithstanding any provisions of this Agreement to the contrary, if
the Executive is a “specified employee” (within the meaning of Section 409A of
the Code and the regulations thereunder and determined pursuant to procedures
adopted by TECO) and he experiences a “separation from service” (including in
respect of his position as a member of the Board) and if any portion of the
payments or benefits to be received by the Chairman upon such a “separation from
service” would be considered deferred compensation under Section 409A of the
Code, amounts that would otherwise be payable pursuant to this Agreement during
the six-month period immediately following the Chairman’s separation from
service and benefits that would otherwise be provided pursuant to this Agreement
during the six-month period immediately following the Chairman’s separation from
service shall instead be paid or made available on the earlier of (i) the first
business day of the seventh month following the date of the Chairman’s
separation from service or (ii) Chairman’s death.

 

10. Entire Agreement: This Agreement and the Executive’s change in control
agreement dated July 30, 2008 contain the entire understanding between the
parties hereto with respect to the Executive’s employment with TECO.

 

11. Amendment and Waiver: This Agreement may not be modified or amended except
by an instrument in writing duly executed by the parties hereto. No waiver of
compliance or condition hereof and no consent provided for herein shall be
effective unless evidenced by an instrument in writing duly executed by the
party hereto sought to be charged with such waiver or consent.

 

12. Severability of Provisions: The invalidity or unenforceability of any
particular provision hereof shall not affect the remaining provision of the
Agreement, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.

 

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Exhibit 10.1

 

13. Counterparts: This Agreement may be executed in one or more counterparts,
and such counterparts shall constitute one and the same instrument.

 

14. Captions: Captions used herein are for convenience only and are not a part
of this Agreement and shall not be used in construing it.

 

15. Waiver of Jury Trial: TECO and Executive hereby waive any rights each of
them may have to a trial by jury.

 

16. Governing Law and Venue: This Agreement has been negotiated and prepared and
shall be performed in the State of Florida, and the validity, construction and
enforcement of, and the remedies under, this Agreement shall be governed in
accordance with the laws of the State of Florida. The parties to this Agreement
agree that jurisdiction and venue shall properly lie in Hillsborough County,
Florida, or in the United States District Court for the Middle District of
Florida (Tampa Division), with respect to any legal proceedings arising from
this Agreement and further the parties waive any objections that venue is not
proper in those jurisdictions.

 

17. Notices: Any notice or other communication required or permitted hereunder
shall be in writing and shall be deemed given upon receipt when so delivered in
person, by overnight courier or after being sent by registered or certified mail
(postage prepaid, return receipt requested), as follows:

 

  i) if to TECO:

TECO Energy, Inc.

702 North Franklin Street

Tampa, FL 33602

Attn:  General Counsel

 

  ii) if to Executive:

Sherrill W. Hudson

745 San Esteban Avenue

Coral Gables, FL 33146

 

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Exhibit 10.1

 

IN WITNESS WHEREOF, the undersigned have hereunto caused this Agreement to be
executed the day and year first above written.

 

TECO Energy, Inc.   By:  

/s/ Paul L. Whiting

 

/s/ Sherrill W. Hudson

Name:       Paul L. Whiting         Sherrill W. Hudson Title:  

  Chairman of the Compensation

  Committee of the Board of Directors

 

 

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Exhibit 10.1

 

EXHIBIT A

RELEASE OF CLAIMS

SHERRILL W. HUDSON

TECO ENERGY, INC.

For and in consideration of the payment made to Executive pursuant to
Section 6(c) of the Employment Agreement, the Executive, for himself, his heirs,
executors, administrators, successors and assigns acknowledges that the payment
being made as consideration is in addition to anything of value to which he is
entitled and accordingly hereby releases and agrees to hold harmless TECO from
all claims, rights, causes of action or liabilities of whatever nature, whether
at law or in equity, or damages (compensatory, consequential or punitive)
against TECO that the Executive, his heirs, executors, administrators,
successors, and assigns, may now have or hereafter can, shall or may have for,
upon, or by reason of any matter, cause or thing, whatsoever, that has happened,
developed or occurred on or before the date of this Release, arising out of the
Executive’s employment (other than Workers’ Compensation claims pending or
otherwise related to such employment) with or termination of employment from
TECO or retirement therefrom, including, but not limited to, claims for wrongful
termination, discrimination, retaliation, invasion of privacy, defamation,
slander, and/or intentional infliction of emotional distress, any rights to a
grievance proceeding and those arising under any federal, state, or local
discrimination or civil rights or labor laws and/or rules or regulations, and/or
common law, whether in contract or in tort, as they relate to the employment
relationship of the Employee/Employer (including without limitation claims
arising under the Age Discrimination in Employment Act, the Older Workers’
Benefit Protection Act (29 USC §626), Title VII of the Civil Rights Act of 1964,
Worker Adjustment and Retraining Notification Act (29 USC §2101-2109), or the
Employee Retirement Income Security Act, as such laws have been or may be
amended from time to time).

TECO and the Executive agree that by entering into this Release the Executive
does not waive claims that may arise after the date of execution of this
Release.

The Executive acknowledges and agrees that this Release shall not be construed
as an admission by TECO of any improper or unlawful actions or of any wrongdoing
whatsoever against the Executive or any other person, and TECO expressly denies
any wrongdoing whatsoever against the Executive or any other person.

For the purposes of this Release, “TECO” shall include TECO Energy, Inc., Tampa
Electric Company, Peoples Gas System, TECO Coal Corporation, TECO Guatemala,
Inc., TECO Partners, Inc, their subsidiaries and affiliates, and any agent,
officer, director, or employee thereof.

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE AS FOLLOWS: I HAVE READ
THIS GENERAL RELEASE CAREFULLY;

 

1. I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS GENERAL
RELEASE AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE
CHOSEN NOT TO DO SO OF MY OWN VOLITION;

 

2. I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE TO
CONSIDER IT;

 

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Exhibit 10.1

 

3. I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO
REVOKE IT AND THAT THIS GENERAL RELEASE SHALL NOT BECOME EFFECTIVE OR
ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;

 

WITNESSES:      

 

    By:  

 

              Sherrill W. Hudson

 

 

    DATE SIGNED:  

 

 

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