**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 otherwisedefined herein have the meanings given to them in the Plan. 

1. Grant of Performance Shares. Pursuant to the Plan and subject to theterms and conditions set forth in this Agreement, the Company hereby grants, issues and delivers to the Grantee              shares (“Number of Restricted PerformanceShares”) 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 daysafter the end of the Performance Period. 

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

“Total Shareholder Return” is the amount obtained by dividing (1) thesum 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 shareprice 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 beequitably adjusted for stock splits and other similar corporate actions affecting the stock. 

The “PerformanceMeasurement” 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, orthe 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 TotalShareholder Return from highest to lowest. 

The “Performance Reward Percentage” is the percentage shown in column Bcorresponding 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 notexceed 100%, and the Performance Reward Percentage for Additional Performance Shares shall be the amount, if any, in excess of 100%. 

**A**
  
**B**
**Performance Measurement**  **Performance Reward Percentage**
Bottom 25% of the Peer Group
  0%
25th Percentile of the PeerGroup
  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 underSection 3, unless otherwise determined by the Committee: 

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

(b) all Restricted Performance Shares will be forfeited and returned to the Company and the Grantee willcease 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 asignificant financial interest as determined by the Committee (an “Affiliate”). 

3. End of Performance Period andTermination 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 AdditionalPerformance 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 thanfour 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 forwhich the Grantee is eligible, as determined by the Committee; 

(c) the termination by the Company or any Affiliate of Grantee’semployment 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 ormental 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 theCompany. 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 theAffiliate; 

(d) the Grantee’s retirement from the Company or an Affiliate at or after attainment of the age that is three years beforethe 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) upona 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 14Apromulgated 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 tohave occurred if: 

(1) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than theCompany, 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 ofstock 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’sthen 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 consentsolicitation, 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 inoffice 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, otherthan (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 survivingentity) 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 arecapitalization 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 isconsummated the sale or disposition by the Company of all or substantially all of the Company’s assets. 

Notwithstanding anything tothe 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 Periodends 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 PerformanceShares (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 theRestricted 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 transferagent 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 legendin substantially the following form: 

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THETERMS, 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 THISCERTIFICATE UPON WRITTEN REQUEST AND WITHOUT CHARGE. 

Upon the termination of the restrictions imposed under this Agreement as to anyshares 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 theunrestricted 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 equitablyadjust 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 underSection 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, anytaxes 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 ofCommon 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 andchanging 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 shallthe 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 RevenueCode Section 162(m) covered compensation. 

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

 
TECO ENERGY, INC.By: 
 
 C.E. Childress Chief Human Resources Officer
 

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