Exhibit 10.2

TECO ENERGY, INC.

2010 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 2010 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 of its Common Stock (the
“Target Performance Shares”) as of the date of this Agreement. The Target
Performance Shares, if not previously forfeited, will vest based on the
achievement of the Performance Measurement determined pursuant to Section 2
hereof. In addition to the Target Performance Shares, after the end of the
Performance Period (defined below), the Grantee may receive additional shares of
the Company’s Common Stock based on the achievement of the Performance
Measurement determined pursuant to Section 2 hereof. These additional shares of
Common Stock are referred to in this Agreement as the “Additional Performance
Shares”, and together with the Target Performance Shares, are referred to as the
“Performance Shares”.

2. Vesting of Performance Shares. At the end of the Performance Period, the
number of Performance Shares, if any, that will vest on the Vesting Date, as
defined in Section 5, will be determined in accordance with the following
formula:

Number of Vested Performance Shares =

Performance Reward Percentage multiplied by Target Performance Shares

The “Performance Reward Percentage” is the percentage shown in column B
corresponding to the Performance Measurement in column A in the table below, and
is based on the Company’s Total Shareholder Return relative to that of the Peer
Group for the Performance Period. The Performance Measurement is determined by
the Company’s ranking within the Peer Group. If the Performance Measurement is
between the 25th Percentile and the median, or between the median and top 10% of
the Peer Group, the Performance Reward Percentage will be interpolated in
proportion to the corresponding placement in column A.

 

A

Performance

Measurement

   B
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 % 

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The “Performance Period” is the period beginning April 1, 2010 and ending on
March 31, 2013, unless terminated earlier pursuant to Section 6 or 7.

“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 will be
equitably adjusted for stock splits and other similar corporate actions
affecting the stock. In the event the Performance Period ends as a result of a
Change in Control, as defined in Section 7, the Total Shareholder Return will be
calculated as set forth in the preceding sentence, except that the share price
used at the end of the Performance Period will be determined by using the
average closing price of the Company’s stock during the 20 trading days
preceding (and exclusive of) the date of the Change in Control.

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.

Upon the Vesting Date, the restrictions on the Performance Shares will
terminate. Any Target Performance Shares that do not vest in accordance with
this Section will be forfeited and returned to the Company as of the Vesting
Date. The Additional Performance Shares, if any, will be issued, granted and
delivered to the Grantee no later than 30 days after the end of the Performance
Period.

3. Dividends. Each time that the Company declares a dividend on its shares of
common stock, an amount equal to the declared dividend multiplied by the number
of Target Performance Shares outstanding on the record date associated with such
dividend will be accrued on Grantee’s behalf on the payment date of such
dividend, subject to forfeiture as set forth in the last sentence of this
paragraph. If the Performance Shares vest in accordance with Section 2, Grantee
will also receive a cash payment equal to the amount of any dividends accrued
over the Performance Period multiplied by the same Performance Reward Percentage
used to determine the amount of the Performance Shares that vest. Any dividends
earned pursuant to this Section will be paid in cash to the Grantee when the
vested Performance Shares are delivered or as soon as practicable thereafter.
Any dividends accrued with respect to the Performance Shares will be forfeited
if the related Performance Shares are forfeited.

 

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4. Restrictions on Performance Shares. Until the Performance Shares, if any,
vest, unless otherwise determined by the Committee:

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

(b) all Performance Shares and accrued dividends will be forfeited and returned
to the Company and the Grantee will cease to have any right to receive any
Performance Shares or dividends pursuant to this Agreement, 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”), other than terminations of employment covered by Sections 6(b),
(c) or 7 hereunder.

5. Certification and Vesting Date. Promptly after the end of the Performance
Period, the Company will calculate the number of Performance Shares that will
vest and the amount of dividends payable to Grantee pursuant to this Agreement.
If the Performance Period ends on March 31, 2013 (that is, if the Performance
Period was not terminated earlier pursuant to Section 6 or 7, below), the
Company will submit its calculation regarding the Performance Measurement and
the corresponding Performance Reward Percentage to the Compensation Committee of
the Board for certification. Subject to any restrictions on distributions of
shares under the Plan, and subject to Section 13 of this Agreement, the
Performance Shares, if any, will vest on the date of the Compensation
Committee’s certification (the “Vesting Date”). If pursuant to Section 6 or 7,
below, the Performance Period ends with respect to the Grantee prior to
March 31, 2013, then the Performance Shares earned under the Award, if any, will
vest as soon as practicable after the end of the Performance Period, or on the
Compensation Committee certification date, if such certification is required
under Section 162(m) of the Internal Revenue Code. In no event will the Vesting
Date be more than 30 days after the end of the Performance Period.

6. Termination of Employment.

(a) Voluntary Termination or Termination with Cause. If before March 31, 2013,
Grantee terminates his or her employment with the Company or any Affiliate and
Section 6(c) does not apply to such termination, or the Company or any Affiliate
terminates Grantee’s employment for Cause (defined below), all of Grantee’s
Target Performance Shares will be cancelled as of the date of such termination
and any dividends accrued with respect to Grantee’s Target Performance Shares
will be forfeited. The Grantee will not be entitled to any Additional
Performance Shares

(b) Termination Other than for Cause. If the Company or any Affiliate terminates
Grantee’s employment other than for Cause before March 31, 2013, Grantee’s
Target Performance Shares will be prorated based on the number of months Grantee
was employed (with partial months rounded up to the nearest whole month)
beginning on the date of this Agreement to the date of termination, divided by
36 (the “Prorated Target Performance Shares”). On the date of such termination,
the Performance Period will end and the number of Performance Shares that vest
pursuant to this Agreement, if any, will be determined based on the application
of the formula defined in Section 2, with the Prorated Target Performance Shares
substituted for the Target Performance Shares in such formula. All other
outstanding Target Performance Shares that do not vest pursuant to that formula
will be cancelled and forfeited, and any associated accrued dividends will be
forfeited and retained by the Company.

 

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“Cause” means (i) the willful and continued failure by Grantee to substantially
perform Grantee’s duties with the Company (other than any such failure resulting
from Grantee’s incapacity due to physical or mental illness or any such actual
or anticipated failure after the issuance of a Notice of Termination by Grantee
for Good Reason, each as defined in Section 7 after a written demand for
substantial performance is delivered to Grantee by the Board, which demand
specifically identifies the manner in which the Board believes that Grantee has
not substantially performed Grantee’s duties, or (ii) the willful engaging by
Grantee 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 Grantee’s part will be deemed “willful” unless done, or
omitted to be done, by Grantee not in good faith and without reasonable belief
that Grantee’s action or omission was in the best interest of the Company.
Notwithstanding the foregoing, Grantee will not be deemed to have been
terminated for Cause unless and until there will have been delivered to Grantee
a copy of a resolution 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 Grantee and
an opportunity for Grantee, together with Grantee’s counsel, to be heard before
the Board), finding that in the good faith opinion of the Board Grantee were
guilty of conduct set forth above in this Subsection and specifying the
particulars thereof in detail;

(c) Death, Disability or Retirement. If Grantee’s employment with the Company or
any Affiliate is terminated at any time prior to March 31, 2013 due to death, 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, or
retirement 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, Grantee will be entitled to receive a prorated award as calculated
under this Section. Grantee’s Target Performance Shares will be prorated based
on the number of months Grantee was employed (with partial months rounded up to
the nearest whole month) beginning on the date of this Agreement to the date
Grantee’s employment terminated, divided by 36 (the “Prorated Target Performance
Shares”). On the date of such termination, the Performance Period will end and
the number of Performance Shares that vest pursuant to this Agreement, if any,
will be determined based on the application of the formula defined in Section 2,
with the Prorated Target Performance Shares substituted for the Target
Performance Shares in such formula. All other outstanding Target Performance
Shares that do not vest pursuant to that formula will be cancelled and
forfeited, and any associated accrued dividends will be forfeited and retained
by the Company.

7. Change in Control. If, prior to March 31, 2013, Grantee’s employment is
terminated other than by the Company for Cause or by Grantee without Good Reason
within 24 months following a Change in Control (as defined below), or prior to a
Change in Control under circumstances described in the next sentence, then
Grantee’s Performance Shares will vest as determined under Section 2 of this
Agreement. For purposes of this Agreement, Grantee’s employment will be deemed
to have been terminated following a Change in Control of the Company by the
Company without Cause or by Grantee with Good Reason, if (i) Grantee’s
employment is terminated by the Company without Cause prior to a Change in
Control of the

 

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Company (whether or not such a Change in Control ever occurs) and such
termination was at the request or direction of a “person” (as defined below) who
has entered into an agreement with the Company the consummation of which would
constitute a Change in Control of the Company, (ii) Grantee terminates Grantee’s
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, or
(iii) Grantee’s employment is terminated by the Company without Cause or by
Grantee for Good Reason and such termination or the circumstance or event which
constitutes Good Reason is otherwise in connection with or in anticipation of a
Change in Control of the Company (whether or not such a Change in Control ever
occurs).

(i) 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
will be deemed to have occurred if:

(a) 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;

(b) 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;

(c) 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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(d) 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.

(ii) “Good Reason” for termination by Grantee of Grantee’s employment will mean
the occurrence (without Grantee’s 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 7 hereof (treating all
references in paragraphs (a) through (h) below to a “Change in Control of the
Company” as references to a “potential Change in Control of the Company”), of
any one of the following acts by the Company, or failures by the Company to act:

(a) the assignment to Grantee of any duties inconsistent (except in the nature
of a promotion) with the position in the Company that Grantee held immediately
prior to the Change in Control of the Company or a substantial adverse
alteration in the nature or status of Grantee’s position or responsibilities or
the conditions of Grantee’s employment from those in effect immediately prior to
the Change in Control of the Company;

(b) a reduction by the Company in Grantee’s 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 Grantee to be based more than fifty (50) miles from
the Company’s offices at which Grantee 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
Grantee’s present business travel obligations;

(d) the failure by the Company to pay to Grantee any portion of Grantee’s
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 continue in effect any material compensation
or benefit plan in which Grantee participate immediately prior to the Change in
Control of the Company unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan, or the
failure by the Company to continue Grantee’s participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of Grantee’s
participation relative to other participants, than existed at the time of the
Change in Control;

(f) the failure by the Company to continue to provide Grantee with benefits
substantially similar to those enjoyed by Grantee under any of the Company’s
pension, life insurance, medical, health and accident, or disability plans in
which Grantee were participating at the time of the Change in Control of the
Company, the taking of any action by the

 

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Company which would directly or indirectly materially reduce any of such
benefits or deprive Grantee of any material fringe benefit enjoyed by Grantee at
the time of the Change in Control of the Company, or the failure by the Company
to provide Grantee with the number of paid vacation days to which Grantee are
entitled on the basis of Grantee’s 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;

(g) 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

(h) any purported termination of Grantee’s employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of Subsection
(iii) below (and, if applicable, the requirements of Subsection 6(c) above),
which purported termination will not be effective for purposes of this
Agreement.

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

(iii) A “Notice of Termination” will mean a notice which will indicate the
specific termination provision in this Agreement relied upon and will set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Grantee’s employment under the provision so indicated.

8. Minimum Performance Period. If any event specified under Section 6 or 7 above
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

9. Rights as Shareholder. Subject to the restrictions and other limitations and
conditions provided in this Agreement, the Grantee as owner of the Target
Performance Shares will have all the rights of a shareholder, including but not
limited to the right to vote the Target Performance Shares and the right to
receive dividends and other distributions, except as otherwise specifically
provided in this Agreement; and provided that dividends and other distributions
paid on shares of Performance Shares shall be held by the Company on Grantee’s
behalf and shall be subject to the same vesting conditions applicable to the
Performance Shares, as provided in Section 3 hereof.

10. Book Entry. The Target 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. As soon as practicable after the Vesting Date, the Company
will cause unrestricted shares to be transferred electronically to Grantee’s
brokerage account (or to the account of such Grantee’s legal representative,
beneficiary or heir) equal to the number of Target Performance Shares and any
Additional Performance Shares that vest pursuant to this Agreement, subject to
the tax withholding provision of Section 13.

 

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11. 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 Performance Shares subject to this Agreement to the extent
provided by the Plan.

12. 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 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.

13. 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 Performance Shares no later than the Vesting Date.
Such tax obligations may be paid in whole or in part in vested Performance
Shares, valued at fair market value on the Vesting Date (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.

14. 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.

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

16. 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 will the Agreement be amended in any manner that would cause the issuance
of Shares under this Agreement to fail to qualify as excluded from the
calculation of Internal Revenue Code Section 162(m) covered compensation.

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

 

TECO ENERGY, INC. By:  

 

   Clinton E. Childress    Chief Human Resources Officer

 

Grantee

 

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