Exhibit 10.1

--------------------------------------------------------------------------------

TECO ENERGY, INC.

ANNUAL INCENTIVE COMPENSATION PLAN

REVISED AS OF APRIL 17, 2002

--------------------------------------------------------------------------------

> 

--------------------------------------------------------------------------------

BASIC PLAN CONCEPT

The Annual Incentive Compensation Plan provides a consistent framework for
applying annual incentive pay to officers of TECO Energy and each of its
operating units. Each participant is assigned a target award amount, expressed
as a percentage of the greater of salary range midpoint or annual salary, which
will represent an appropriate incentive payment when performance is at the
targeted level. Smaller awards may be earned when performance is below target,
and larger awards may be earned when performance exceeds target.

Performance for each participant will be measured, in part, against a
combination of one or more quantifiable profit and operational goals. These
goals will be set at the corporate and operating levels, and most participants
will have a portion of their awards related to each. The remaining portion of
each participant’s performance that is not measured by the quantified goals
mentioned above will be evaluated on a subjective basis considering overall
contribution level and achievement of other individual goals. Each participant
will have a “Business Challenge” goal, to reflect the participant’s contribution
to: (a) mitigating the impact of unexpected adverse business or regulatory
developments on the business unit or (b) enhancing profitability or capacity for
profit, through effective management initiatives beyond those included in the
business plan.

ELIGIBILITY

All officers that are approved by the Chief Executive Officer of TECO Energy and
the Compensation Committee of the TECO Energy Board (the “Compensation
Committee”) will be eligible to participate.

TARGET AWARD LEVELS

Target award levels are established at a level that, when combined with each
participant’s base salary, will provide a fully competitive total cash
compensation opportunity. The incentive portion of the total compensation
opportunity reflects compensation “at risk” which is directly related to
performance and results achieved. Generally, the portion of compensation “at
risk” (i.e., the target award level) is influenced by the level of the
participant’s accountability for contributing to bottom-line results, the degree
of influence the participant has over results and competitive practice.

ESTABLISHING PERFORMANCE GOALS AND WEIGHTINGS

For each plan year, profit, growth and/or operational effectiveness goals will
be established for TECO Energy and each of its operating units. Financial goals
may measure performance relative to other companies over periods of one-year or
longer.

For each financial goal the target level of performance, as well as threshold
and maximum levels, will be approved by the Compensation Committee. Threshold
performance represents the minimum performance that still warrants incentive
recognition for that particular goal (paid at 50 percent of the target award
level), and maximum performance represents the highest level likely to be
attained (paid at 150 percent of the target award level for all goals, except
the Business Challenge goal which can be paid

--------------------------------------------------------------------------------

at 200 percent). One-time gains and losses that were not contemplated in the
TECO Energy business plan will not be included in calculating financial results
for purposes of this plan. Regardless of the degree of achievement of each
established goal, the payout to all participants will be zero if TECO Energy’s
net income for that year is not at or above the threshold set for that year by
the Compensation Committee.

A determination will be made for each participant regarding their portion of the
award that will be based on corporate, operating unit or individual performance.
Generally, the weightings among these three measurement groups will vary by
organizational level.

APPLICATION OF DISCRETION

While not anticipated to be a common occurrence, the Compensation Committee may
occasionally decide that the plan formula would unduly penalize or reward
management. In such cases, award funds may be increased or decreased to better
meet the plan’s intent of relating rewards to management performance.

AWARD DETERMINATION

At the end of each plan year, a four-step process will be followed in
determining actual incentive awards.

Step 1: The actual degree of achievement for each goal at the corporate,
operating unit and individual level is determined. Levels of achievement can
range up to 200 percent for the Business Challenge goal and up to 150 percent
for all other goals.     Step 2: Corporate, operating unit and individual
performance factors are determined by multiplying levels of goal achievement by
the weightings assigned to each goal.     Step 3: The total of all performance
factors is multiplied by the target award, producing the calculated award.    
Step 4: The calculated award may be adjusted up or down by the Compensation
Committee with respect to the senior officers and by the Chief Executive Officer
of TECO Energy with respect to other officers, based on the participant’s total
performance during the plan year. The actual award, as so adjusted, may not
exceed 150 percent of the target award level and will be approved by the
Compensation Committee.

PLAN ADMINISTRATION

The Compensation Committee and the Chief Executive Officer of TECO Energy shall
perform the respective functions set forth in this plan. The Compensation
Committee may elect to discharge its responsibility in the form of
recommendations to the TECO Energy Board. The Chief Human Resources Officer of
TECO Energy is responsible for administering the plan.

OTHER CONSIDERATIONS