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                                                                   Exhibit 10.2



                                                    February 27, 2001



Mr. Ronald E. McCollough
6615 Green Shadows Lane
Memphis, Tennessee 38119

Dear Ron:

The purpose of this letter is to confirm our mutual understanding regarding your
early retirement from TBC.

With respect to your retirement, we have agreed as follows:

1.    You will retire as an employee of TBC effective March 1, 2001 (the
      "Retirement Date"). Although you will remain as an employee of TBC until
      March 1, your resignation as an officer of TBC or any of its subsidiaries
      or affiliates will be effective January 19, 2001. Since you will be
      retiring before TBC's normal retirement age of 65, TBC's consent to your
      retirement prior to the normal retirement age is hereby granted. If third
      parties ask about the circumstances of your termination, we will indicate
      only that you had retired. TBC will not disparage or otherwise criticize
      you, either publicly or in conversations with its suppliers or customers
      or your potential employers. We also agree to give you a positive
      reference in the event we are contacted by a prospective employer.

2.    Your benefits as a TBC employee will cease as of the Retirement Date. We
      do agree to allow you to utilize the PWC income tax preparation service
      for your 2000 taxes and to pay for an executive physical examination for
      2001 in accordance with our standard practices provide that the physical
      examination is completed by December 31, 2001.

3.    TBC will continue to pay your current salary and car allowance for a
      period of twelve months from the Retirement Date. You will receive this
      severance pay, less taxes and other applicable deductions, on a biweekly
      basis in accordance with TBC's regular payroll practices. We will also pay
      you a pro-rated bonus under the 2001 Incentive Compensation Plan based
      upon your retirement date, if any bonus is due under the plan.

4.    You will continue to have health insurance coverage under the TBC health
      plan until such time as you become eligible for health insurance coverage
      under


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      another employer's plan or become eligible for Medicare coverage. Coverage
      for your wife will be similarly provided. For such coverage, you will pay
      the monthly amount that an active TBC employee pays for family coverage
      from time to time during the period.

5.    The provisions of the TBC Corporation 401(k) Savings Plan will govern the
      rollover or other disposition of your account in that Plan.

6.    I will recommend to the TBC Compensation Committee that it agree to waive
      the provision in TBC's Supplemental Executive Retirement Plan (the "SERP")
      that requires a two year advance notice of lump sum election so that you
      will be entitled to a lump sum payment of your supplemental retirement
      benefits under SERP.

7.    On the date of this letter agreement, you hold the following outstanding
      stock options under the 1989 Stock Incentive Plan:

<TABLE>
<CAPTION>
               Date of Grant                       No. of Shares
               -------------                       -------------
               <S>                                 <C>
               7/25/91                             11,452
               7/22/93                              6,372
               7/20/95                              8,751
               1/15/97                             25,185
               1/07/98                             21,596
               1/10/99                             30,002
               1/05/00                             35,246
</TABLE>

      Portions or all of the options granted to you in 1998, 1999, and 2000 are
      not presently exercisable and will not be exercisable before March 1,
      2001. In addition, under the terms of their grants, each option granted
      prior to 1998 expires if they are not exercised within three months
      following your termination of employment. I will recommend to the TBC
      Compensation Committee that it take action, effective March 1, 2001, to
      allow all options then held by you to vest in accordance with their
      original vesting schedule, notwithstanding your early retirement, and to
      provide that the term of all outstanding options then held by you shall be
      extended until the earlier of (i) March 1, 2006, or (ii) the date upon
      which each respective option would have expired had you remained in the
      employ of TBC for the entire original term of that option; provided,
      however, that if you die within the one year period prior to expiration of
      any option in accordance with the preceding provision, the option will
      remain outstanding until the earlier of (a) the date upon which it would
      have expired had you remained in the employ of TBC for the entire original
      term of the option, or (b) one year after your date of death. You
      understand that any options which you do not exercise prior to March 1,
      2001 will, upon amendment by the Compensation Committee


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      as described above, lose their incentive stock option treatment, and will
      be treated as nonqualified options, for income tax purposes.

8.    Effective March 1, 2001, TBC will transfer your Germantown Country Club
      membership (which is currently through TBC) directly into your name. You
      will be responsible for all dues or payments thereafter, to the extent
      that they relate to periods on or after March 1, 2001.

9.    I will recommend to the TBC Compensation Committee that it agree to amend
      the terms of your Deferred Compensation arrangement with TBC to provide
      that the balance as of 3/1/01 will be paid to you in three equal
      installments payable on 1/1/2002, 1/1/2003 and 1/1/2004 together with
      interest on the then unpaid balance which will accrue at the rate at which
      interest in then accruing under TBC's standard arrangements with Executive
      Officers. TBC understands and acknowledges that TBC's agreement to amend
      the Deferred Compensation arrangement in the manner set forth above is a
      condition precedent to your willingness to enter in to this agreement.

10.   You will be paid for four weeks of unused vacation time in accordance with
      TBC's regular practices.

11.   You will return your cell phone and any other company property, including
      TBC credit cards, no later than March 2, 2001. Charges incurred on any of
      these after the date of this letter will be your responsibility. You may
      continue to use the TBC laptop computer that you currently have in your
      possession until March 1, 2002, at which time you will return the computer
      to TBC.

12.   You will be entitled to reimbursement of business expenses you incur on or
      prior to the Retirement Date in accordance with TBC's expense
      reimbursement policy. Requests for reimbursement and all receipts and
      other documentation relating thereto should be submitted to TBC by March
      15, 2001.

13.   You agree that, at all times hereafter, you will hold in strictest
      confidence and trust all pricing information or other confidential or
      proprietary information in your possession relating to TBC or its
      subsidiaries or affiliates and will not make any disclosure or use of any
      such information without the prior written consent of TBC. Your
      confidentiality obligations will not apply to any information which is now
      not generally known within TBC or in the public domain or which hereafter
      becomes generally known within TBC or part of the public domain through no
      fault of yours. In the event of any breach of the foregoing
      confidentiality obligations, in addition to its rights to damages, TBC
      will have the right to seek equitable relief, without the necessity of
      proof of actual damage. In addition, TBC will have the right to cease the
      payments described in item 3 above.


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14.   Your Executive Employment Agreement with TBC, dated November 1, 1988, as
      amended and later extended through October 31, 2000, has expired, and you
      no longer have any rights or obligations thereunder other than rights or
      obligations which are intended to survive any such expiration.

15.   In consideration of the payments and benefits provided to you under this
      letter agreement, you, on behalf of yourself and your heirs,
      administrators, assigns, and agents, fully settle, release, and forever
      discharge TBC and its subsidiaries and affiliates, and the present and
      former officers, directors, stockholders, agents, and employees of TBC and
      its subsidiaries or affiliates, from any and all claims, demands, costs,
      attorneys' fees, liabilities, damages, actions, and causes of action
      arising out of or in any way related to your employment with TBC, the
      termination of your employment with TBC, or the performance of services by
      you for the benefit of TBC or its subsidiaries or affiliates, including
      without limitation, any claims which may be brought for age, sex, or other
      discrimination under the Age Discrimination in Employment Act or any other
      federal, state, or local law and claims for breach of express or implied
      contract, wrongful discharge, promissory estoppel, emotional distress,
      tort, or personal injury, excepting only claims with respect to the breach
      of this letter agreement by TBC. It is expressly acknowledged and agreed
      that the foregoing release is not intended to limit or affect in any
      manner any indemnification or other similar rights which you have as an
      officer of TBC or would otherwise have as a former officer of TBC.

ACKNOWLEDGMENT. In connection with your execution of the above release and this
Agreement, you acknowledge the following:

      (a)   That you are waiving all rights and claims that you have or may have
            under the Age Discrimination in Employment Act, as well as any
            rights or claims that you have or may have under other federal,
            state, or local laws with regard to age, sex, and other employment
            discrimination.

      (b)   That you have a 21 day period to consider whether to sign the above
            release and this Agreement.

      (c)   That for a period of seven days following your signing of this
            Agreement, you may revoke your release and this Agreement, and that
            your release and this Agreement shall not become effective and
            enforceable until that seven day revocation period has expired.

      (d)   That TBC has advised you to consult with an attorney prior to
            executing the above release and this Agreement.


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Your signature below constitutes an acknowledgment that you have read this
letter agreement, that you understand your rights, and that you have agreed to
your release of claims and the other terms of this letter agreement.

Sincerely,

TBC CORPORATION


By /s/ Lawrence C. Day
  ----------------------------------------
  Lawrence C. Day,
  President and Chief Executive Officer


ACKNOWLEDGED AND AGREED:

                                                    Date: February 27, 2001
                                                          ----------------------
/s/ Ronald E. McCollough
------------------------------------------
RONALD E. McCOLLOUGH