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                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is entered into as of August 19, 2003 (the "Effective
Date") by and between KEVIN M. TWOMEY ("Executive") and THE ST. JOE COMPANY, a
Florida corporation (the "Company").

         WHEREAS, the Board of Directors of the Company has determined that it
is in the best interests of the Company and its shareholders to secure
Executive's continued services and to reinforce and encourage his continued
attention and dedication to the development and implementation of a
board-approved succession plan, and the Executive wishes to continue to serve
the Company and to assist in the development and implementation of such plan.

         NOW, THEREFORE, the Company and the Executive agree as follows:

1.       DEFINITIONS. For purposes of this Agreement, the following terms shall
have the respective meanings set forth below:

         1.1      "Business Combination" means a merger, share exchange or
consolidation of the Company with or into another entity or any other corporate
reorganization.

         1.2      "Cause" means conviction of a felony crime following final
disposition of any available appeal; pleading guilty or no contest to a felony
crime; or gross negligence or a willful breach of any material term of this
Agreement, in each case as determined by a court of competent jurisdiction in
the State of Florida.

         1.3      "Change in Control" means the occurrence of any of the
following events after the date of this Agreement:

                  (a)      The consummation of a Business Combination unless,
following such Business Combination, all or substantially all of the individuals
and entities who were the owners of the Company's outstanding voting stock
immediately prior to such Business Combination own, directly or indirectly, and
in substantially the same proportions, 50% or more of the continuing or
surviving entity's voting stock outstanding immediately after such Business
Combination;

                  (b)      The sale, transfer, exchange or other disposition of
all or substantially all of the Company's assets;

                  (c)      A change in the composition of the Board of Directors
of the Company, as a result of which fewer than two-thirds of the incumbent
directors are Continuing Directors;

                  (d)      The liquidation or dissolution of the Company; or

                  (e)      Any transaction as a result of which any person is
the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly
or indirectly, of securities of the Company representing 25% or more of the
total voting power represented by the Company's then outstanding voting
securities. For purposes of this Subsection 1.3(e), the term "person" shall have
the same meaning as when used in sections 13(d) and 14(d) of the 1934 Act but
shall exclude (i) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a parent or subsidiary of the Company,
(ii) a corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of the common
stock of the Company, (iii) the Alfred I. duPont Testamentary Trust and (iv) the
Nemours Foundation.

Notwithstanding the foregoing, a transaction shall not constitute a Change in
Control if its sole purpose is to change the state of the Company's
incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company's securities
immediately before such transaction. Furthermore, the Company's purchase of
Company stock from the Alfred I. duPont Testamentary Trust shall in no event be
deemed to result in a Change in Control.
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         1.4      "Continuation Period" means the period commencing on the
effective date of the termination of the Executive's employment pursuant to
Section 5 and ending on the earlier of the date 36 months after the effective
date of the termination of the Executive's employment or the date of the
Executive's death.

         1.5      "Continuing Directors" means directors who either (i) had been
directors of the Company on the date 24 months prior to the date of the event
that may constitute a Change in Control (the "original directors") or (ii) were
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the aggregate of the original directors who were still in
office at the time of the election or nomination and the directors whose
election or nomination was previously so approved.

         1.6      "Disability" means a long-term disability under the Company's
long-term disability plan as then in effect.

         1.7      "Friendly Change in Control" means a Change in Control that
has been approved by the affirmative vote of a majority of the Continuing
Directors.

         1.8      "Good Reason" means any of the following:

                  (a)      The Executive has experienced a demotion in title
with the Company or has experienced a substantial and material reduction in
duties or responsibilities with the Company that is not in connection with a
succession plan approved by the Company's Board of Directors; provided, that the
Executive occupying the same position with a company that is not a publicly-held
company subject to the 1934 Act shall constitute a material reduction in
responsibilities unless the reason the Company is no longer a publicly-held
company subject to the 1934 Act is because of a management and/or employee
buyout or other similar transaction whereby, after the completion of such
transaction, the Company's management, Company employee benefit plans and/or
employees beneficially own(s) (as that term is defined in Rule 13d-3 under the
1934 Act), directly or indirectly, securities of the Company representing 50% or
more of the total voting power represented by the Company's then outstanding
voting securities;

                  (b)      The Executive has incurred a reduction in his total
compensation as an employee of the Company (consisting of annual base salary and
target bonus);

                  (c)      The Executive has been notified that his principal
place of work as an employee of the Company will be moved to a location that is
more than 30 miles from its current location;

                  (d)      Commission by the Company, or a successor thereto, of
a material breach of any of the provisions of this Agreement; or

                  (e)      A successor to the Company fails to comply with
Section 11.1.

         1.9      "Qualifying Termination of Employment" means a termination of
the Executive's employment under any of the following circumstances:

                  (a)      The Executive terminates his employment for any
reason during the six month period immediately following the first anniversary
of a Change in Control;

                  (b)      The Executive terminates his employment for Good
Reason; or

                  (c)      The Company terminates the Executive's employment for
any reason other than Cause, death, Disability or in connection with a
succession plan approved by the Company's Board of Directors.

The determination of whether the Executive's employment has terminated shall be
made without regard to whether the Executive continues to provide services to
the Company as a member of its Board of Directors

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or otherwise in the capacity of an independent contractor. A transfer of the
Executive's employment from the Company to a successor of the Company shall not
be considered a termination of employment if such successor complies with the
requirements of Section 11.1.

         1.10     "Unfriendly Change in Control" means a Change in Control that
has not been approved by the affirmative vote of a majority of the Continuing
Directors.

         1.11     "1934 Act" means the Securities Exchange Act of 1934, as
amended.

2.       TERM. Subject to the provisions of Sections 3, 5, 6, 7 and 8, the
Company will employ Executive for a term commencing on the date of this
Agreement and continuing to and including August 18, 2008.

3.       POSITION; SUCCESSION PLANNING; OUTSIDE ACTIVITIES.

         3.1      During the term of this Agreement Executive will serve in a
full-time capacity as President, Chief Operating Officer and Chief Financial
Officer of the Company and its wholly owned subsidiaries, reporting directly to
the Chief Executive Officer; provided, however, that all or part of the
Executive's titles, duties and responsibilities may be reassigned to another
person by the Company's Board of Directors in connection with a succession plan
approved by the Board.

         3.2      Executive agrees to assist the Company's Board of Directors in
the development of a succession plan and to facilitate the implementation of any
succession plan approved by the Company's Board of Directors. The Executive
acknowledges and agrees that in connection with a Board-approved succession plan
the Board may reassign or eliminate the titles and duties assigned to Executive
under Section 3.1 or terminate the Executive's employment. Notwithstanding any
such reassignment, elimination or termination, the Executive shall be entitled
to the compensation provided under Section 4 through August 18, 2008.

         3.3      While employed by the Company, other than serving as a member
of up to two public company boards of directors, Executive will not engage in
any other employment or business activity for compensation without the consent
of the Board.

4.       COMPENSATION.

         4.1      Base Salary. Executive will be paid a base salary at the
annual rate of $531,756, payable in accordance with the Company's standard
payroll practices for salaried employees. This salary will be subject to
reevaluation on each March 1, commencing March 1, 2004. The base salary may be
increased but not reduced during the term of this Agreement pursuant to the
Company's employee compensation policies in effect from time to time.

         4.2      Bonus. Executive will be eligible to participate in the
Company's annual incentive plan, which bases bonuses on overall Company
performance and individual performance for the calendar year, with a target
bonus of 90% of the Executive's base salary. This target bonus will not be
reduced during the term of this Agreement. Executive's annual bonus will be
computed in a manner consistent with past practice. For the calendar year 2008
Executive's bonus will be paid pro rata based on the number of days of the year
that this Agreement is in effect.

         4.3      Restricted Stock. On the date of this Agreement Executive is
hereby granted an award of restricted common stock of the Company valued at
$8,000,000 as of the closing of the New York Stock Exchange on August 18, 2003.
The restrictions will lapse on one-third of the stock granted as part of this
award on the third anniversary of the date of grant and one-third on each of the
fourth and fifth anniversaries. The Executive agrees that he will not sell or
transfer any of such shares, except for that number of shares necessary to pay
any taxes that become due and payable upon the lapse of restrictions thereon,
until the earlier of the termination of his employment by the Company, an
unfriendly Change of Control, one year after a friendly Change of Control or
August 18, 2008.

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         4.4      Stock Options. Executive will not be eligible to receive new
awards of stock options during the term of this Agreement.

         4.5      Car Allowance; Expense Reimbursement.

                  (a)      Executive will receive a car allowance of $1,200 per
month (gross) in addition to base salary. This allowance constitutes the full
and complete reimbursement of all car expenses by the Company. This allowance
will not be included as wages in the calculation of any benefits or compensation
plans.

                  (b)      Executive will be eligible for reimbursement of
necessary and reasonable business expenses subject to Company policy.

5.       QUALIFYING TERMINATION OF EMPLOYMENT

         5.1      Severance Pay. In the event of a Qualifying Termination of
Employment, within 30 business days after the occurrence of such Qualifying
Termination of Employment, the Company or its successor shall pay to the
Executive a lump sum equal to the product of three times the sum of:

                  (a)      The Executive's annual base salary at the greater of
         (i) the annual rate in effect on the date when the termination of the
         Executive's employment with the Company is effective or (ii) the annual
         rate in effect on the date of the Change in Control; plus

                  (b)      The greater of (i) the Executive's annual bonus for
         the most recent year completed prior to the date when the termination
         of the Executive's employment with the Company is effective or (ii) an
         amount equal to 100% of the Executive's annual base salary, as
         determined under Section 4.1.

         5.2      Supplemental Pension.

         (a)      In the event of a Qualifying Termination of Employment, in
lieu of accruing pension benefits under the Company's Pension Plan, the
Company's 401(k) Plan (the "401(k) Plan"), the Company's Deferred Capital
Accumulation Plan (the "DCAP"), the Company's Supplemental Retirement Plan (the
"SERP"), and any other funded or unfunded pension plans now or hereafter
maintained by the Company (collectively, the "Pension Plans") during the
Continuation Period, the Executive shall be entitled to receive an unfunded
supplemental pension benefit under this Agreement (the "Supplemental Benefit").
The Supplemental Benefit shall be calculated under Subsection 5.2(b) below and
shall be paid in a lump sum within 30 business days after the date of the
Qualifying Termination of Employment.

         (b)      The Supplemental Benefit shall be an amount equal to:

                  (i)      The amount payable to the Executive as a single lump
         sum amount under the Pension Plans as of the date of the Qualifying
         Termination of Employment had the Executive (A) continued to be
         employed as an Executive of the Company during the Continuation Period,
         (B) received compensation equal to the amount described in Section
         5.1(a) during the Continuation Period, (C) continued to receive
         matching contributions under the 401(k) Plan and DCAP through the
         Continuation Period at the same rate as the Executive was receiving at
         the time of the Executive's termination of employment, and (D) been
         100% vested in each of the Pension Plans; minus

                  (ii)     The amount, calculated as of the date of the
         Qualifying Termination of Employment, of the single lump sum amount
         actually payable to the Executive under the Pension Plans, whether or
         not the Executive elects to receive his benefits under the Pension
         Plans in the form of a single lump sum amount.

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         (c)      For purposes of determining the lump sum amount payable under
this Section 5.2, (i) the Executive's account under the Pension Plan and the
SERP shall each be credited with interest at the interest rate in effect under
such plan at the date of the Executive's Qualifying Termination of Employment,
and (ii) the Executive's account under the 401(k) Plan and the DCAP shall each
be credited with interest at the interest rate in effect under the DCAP at the
date of the Executive's Qualifying Termination of Employment.

         5.3.     Equity-Based Compensation.

         (a)      If Executive terminates his employment for Good Reason or the
Company terminates the Executive's employment for any reason other than Cause or
there is an Unfriendly Change in Control, all stock options granted to the
Executive shall immediately vest in full, and all restrictions on all shares of
restricted stock granted to Executive shall immediately lapse.

         (b)      If there is a Friendly Change in Control, all stock options
granted to the Executive which have already vested at the time of the Change in
Control shall remain vested, those stock options granted to the Executive which
are scheduled to vest within one year of the date of the Change in Control shall
vest in accordance with their existing vesting schedule, and all other stock
options granted to the Executive shall vest on the first anniversary of the date
of the Friendly Change in Control.

         (c)      If applicable law or the terms of applicable plans or award
agreements prohibit the Company from accelerating the lapsing of restrictions on
restricted stock or the vesting and exercisability of stock options or other
equity-based awards as provided in Sections 5.3(a) and (b), the Company shall
pay to the Executive the following: (xx) on the date of the forfeiture of any
restricted stock that otherwise would have vested pursuant to this Section 5.3,
a cash payment equal to the market value of a number of shares of common stock
of the Company (absent restrictions) equal to the number of shares of restricted
stock forfeited, (yy) on the date of the forfeiture of any such stock options
that otherwise would have vested pursuant to this Section 5.3, a cash payment
equal to the difference between the market value of the shares of stock subject
to such stock options and the exercise price of such stock options, and (zz) on
the date of the forfeiture of any such other equity-based awards that otherwise
would have vested pursuant to this Section 5.3, a cash payment equal to the
value of such forfeited equity-based awards, as determined by the Board in good
faith.

         5.4      Bonus, Group Insurance and Financial Planning.

         (a)      Bonus. In the event of a Qualifying Termination of Employment,
the Company shall pay the Executive a target bonus for the year in which such
termination occurs. Such target bonus shall not be less than the greater of (i)
the Executive's annual incentive plan bonus for the most recent year completed
prior to the date when the termination of the Executive's employment with the
Company is effective or (ii) the amount of the Executive's target bonus then in
effect, in either case prorated to reflect the portion of such year during which
the Executive was employed by the Company.

         (b)      Insurance. In the event of a Qualifying Termination of
Employment, during the Continuation Period the Executive (and, where applicable,
the Executive's dependents) shall be entitled to medical and dental benefits
under the Company's Health Care Plan, or any successor thereto, as if the
Executive were still employed during such period. Such benefits shall be
provided at the same level and at the same after-tax cost to the Executive as is
available to all of the Company's senior executives generally. Where applicable,
the Executive's salary, for purposes of such plans, shall be determined at the
greater of (i) the annual rate in effect on the date when the termination of the
Executive's employment with the Company is effective or (ii) the annual rate in
effect on the date of the Change in Control, disregarding for this purpose any
reduction in salary that would constitute Good Reason hereunder. To the extent
the Company is unable or does not wish to cover the Executive under its plans
during the Continuation Period, the Company shall provide the Executive with
substantially equivalent benefits on an individual basis at no additional
after-tax cost to the Executive. The foregoing notwithstanding, in the event the
Executive becomes eligible for comparable group insurance coverage in connection
with new employment, the coverage provided by the Company under this Section
5.3(b) shall terminate immediately. The benefits described in this Section

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5.4(b) shall be credited against any group health continuation coverage the
Company is required to offer under the Consolidated Omnibus Budget
Reconciliation Act of 1985.

         (c)      Financial Planning. In the event of a Qualifying Termination
of Employment, during the Continuation Period the Executive shall be entitled to
receive reimbursement for financial planning at the greater of the level the
Executive was receiving (i) at the time of termination or (ii) at the time of
the Change in Control, if applicable.

6.       TERMINATION UPON DEATH. In the event of the Executive's death, this
Agreement shall terminate and the Company shall only be obligated to (a) pay to
the Executive's estate or legal representative the annual base salary to the
extent earned by the Executive prior to the Executive's death, (b) take all
necessary actions so that all restrictions on the Executive's restricted stock
shall lapse and all of the Executive's stock options shall vest and become
immediately exercisable in full as of the time of the Executive's death, and (c)
take all necessary actions so that all pension benefits accruing under the SERP
shall immediately become vested in full as of the time of the Executive's death.
The Company may, however, pay the estate or legal representative a bonus that
the Executive has earned prior to his death. After making such payment(s) and
providing such benefits, the Company shall have no further obligations under
this Agreement.

7.       DISABILITY. In the event of the Executive's Disability, the Company
shall have the right, at its option, to terminate the Executive's employment.
Unless and until so terminated, during any period of Disability during which the
Executive is unable to perform the services required of him, the Executive's
salary shall be payable to the extent of, and subject to, the Company's policies
and practices then in effect with regard to sick leave and disability benefits.
In the event of the Executive's termination due to the Executive's Disability,
the Company shall only be obligated to (a) pay to the Executive or his personal
representative the Executive's annual base salary to the extent earned by the
Executive prior to the termination of employment, (b) take all necessary actions
so that all restrictions on the Executive's restricted stock shall lapse and all
of the Executive's stock options shall vest and become immediately exercisable
in full as of the time of the Executive's Disability, and (c) take all necessary
actions so that all pension benefits accruing under the SERP shall immediately
become vested in full as of the time of the Executive's Disability. After making
such payment(s) and providing such benefits, the Company shall have no further
obligations under this Agreement.

8.       TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. In the event that the
Company terminates the Executive's employment for Cause or the Executive
terminates his employment without Good Reason, the Company shall only be
obligated to pay to the Executive the Executive's annual base salary to the
extent earned by the Executive prior to the termination of employment. After
making such payment, the Company shall have no further obligations under this
Agreement.

9.       EXCISE TAXES.

         9.1      Gross-Up Payment. If it is determined that any payment,
benefit or distribution of any type to or for the benefit of the Executive by
the Company, any of its affiliates, any person or entity that acquires ownership
or effective control of the Company or ownership of a substantial portion of the
Company's assets (within the meaning of section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), and the regulations thereunder) or any
affiliate of such person or entity, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (the "Total
Payments"), would be subject to the excise tax imposed by section 4999 of the
Code or any interest or penalties with respect to such excise tax (such excise
tax and any such interest or penalties are collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount calculated to ensure that after
payment by the Executive of all taxes (and any interest or penalties imposed
with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Total Payments. Payments under this section are
payable to the Executive, even if the Executive is not eligible for employment
termination benefits under this agreement.

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         9.2      Determination by Accountant. All determinations and
calculations required to be made under this Section 9 shall be made by an
independent accounting firm selected by the Executive from among the largest
four accounting firms in the United States (the "Accounting Firm"), which shall
provide its determination (the "Determination"), together with detailed
supporting calculations regarding the amount of any Gross-Up Payment and any
other relevant matter, both to the Company and the Executive within five days of
the termination of the Executive's employment, if applicable, or such earlier
time as is requested by the Company or the Executive (if the Executive
reasonably believes that any of the Total Payments may be subject to the Excise
Tax). If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall furnish the Executive with a written statement that such
Accounting Firm has concluded that no Excise Tax is payable (including the
reasons therefor) and that the Executive has substantial authority not to report
any Excise Tax on the Executive's federal income tax return. If a Gross-Up
Payment is determined to be payable, it shall be paid to the Executive within
five days after the Determination is delivered to the Company or the Executive.
Any determination by the Accounting Firm shall be binding upon the Company and
the Executive.

         9.3      Over- and Underpayments. As a result of uncertainty in the
application of section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made
by the Company should have been made ("Underpayment"), or that Gross-Up Payments
will have been made by the Company which should not have been made
("Overpayments"). In either such event, the Accounting Firm shall determine the
amount of the Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the amount of such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive. In the case of an Overpayment,
the Executive shall, at the direction and expense of the Company, take such
steps as are reasonably necessary (including the filing of returns and claims
for refund), follow reasonable instructions from, and procedures established by,
the Company, and otherwise reasonably cooperate with the Company to correct such
Overpayment, provided, however, that (i) the Executive shall in no event be
obligated to return to the Company an amount greater than the net after-tax
portion of the Overpayment that the Executive has retained or has recovered as a
refund from the applicable taxing authorities and (ii) this provision shall be
interpreted in a manner consistent with the intent of Subsection 9.1 above,
which is to make the Executive whole, on an after-tax basis, from the
application of the Excise Tax, it being understood that the correction of an
Overpayment may result in the Executive's repaying to the Company an amount
which is less than the Overpayment.

         9.4      Limitation on Parachute Payments. Any other provision of this
Section 9 notwithstanding, if the Excise Tax could be avoided by reducing the
Total Payments by 5% or less, then the Total Payments shall be reduced to the
extent necessary to avoid the Excise Tax and no Gross-Up Payment shall be made.
If the Accounting Firm determines that the Total Payments are to be reduced
under the preceding sentence, then the Company shall promptly give the Executive
notice to that effect and a copy of the detailed calculation thereof. The
Executive may then elect, in the Executive's sole discretion, which and how much
of the Total Payments are to be eliminated or reduced (as long as after such
election no Excise Tax will be payable) and shall advise the Company in writing
of the Executive's election within 10 days of receipt of notice. If no such
election is made by the Executive within such 10 day period, then the Company
may elect which and how much of the Total Payments are to be eliminated or
reduced (as long as after such election, no Excise Tax will be payable) and
shall notify the Executive promptly of such election.

10.      RESTRICTIVE COVENANTS.

         10.1     Confidential Information. During the period of his employment,
Executive shall hold in a fiduciary capacity for the benefit of the Company and
its affiliates all trade secrets, proprietary or confidential information,
knowledge or data relating to the Company, and/or their respective businesses,
which shall have been obtained by Executive. Trade secret information includes,
but is not limited to, customer lists, pricing information, sales reports,
financial and marketing data, reserves estimation processes or procedures,
techniques, or processes that: (i) derive independent economic value, actual or
potential, from not being generally known to the public or to persons who can
obtain economic value from their disclosure or use, and (ii) are the subject of
reasonable efforts under the circumstances to maintain their secrecy. After
termination of Executive's employment with the Company, Executive shall not,

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without the prior written consent of the Company, use, communicate or divulge
any such information, knowledge or data to anyone at any time.

         10.2     Covenant Not to Compete. Executive agrees not to, during the
course of employment and for a period of two years commencing upon the
termination of employment, voluntarily or involuntarily, for any reason
whatsoever, (i) directly or indirectly, individually or on behalf of persons not
now parties to this Agreement, or as a director, officer, principal, agent,
executive, or in any other capacity or relationship, engage in any business or
employment, or aid or endeavor to assist any business or legal entity that is in
the commercial, hotel and/or residential real estate development business that
Competes with the Company anywhere in Florida or (ii) hold, directly or
indirectly, more than five percent of any class of stock of any corporation or
more than a 5% interest in any partnership or other business or legal entity
that is in the commercial, hotel and/or residential real estate development
business that Competes with the Company anywhere in Florida. "Competes" shall be
defined as engaging in commercial, hotel and/or residential real estate
development projects where total annual development costs for all such
commercial, hotel and/or residential projects in Florida meet or exceed
$50,000,000. The Company and Executive acknowledge the reasonableness of this
covenant not to compete and the reasonableness of the geographic area and
duration of time which are a part of said covenant. This covenant not to compete
is contemplated to protect Company's legitimate business interests.

         10.3     Solicitation of Customers by Executive. Unless waived in
writing by the Company, Executive further agrees that he will not, directly or
indirectly, during the course of employment and for two years after termination
of his employment, solicit the trade or patronage of any of the customers of the
Company, regardless of the location of such customers of the Company with
respect to any services, products, or other matters in which the Company is
active.

         10.4     Solicitation of Company Employees. Unless waived in writing by
the Company, Executive further agrees that he will not, directly or indirectly,
during the course of employment and for two years after termination of his
employment, solicit or attempt to entice away from the Company any director,
agent or employee of the Company.

         10.5     Compliance with Business Ethics and Conflict of Interest
Policy. During the Executive's employment with the Company, the Executive shall
comply in all respects with the Company's Business Ethics and Conflict of
Interest Policy attached hereto as exhibit "A," and as may be amended from time
to time.

         10.6     Survival; Injunctive Relief. Executive agrees that Sections
10.1 to 10.4 shall survive the termination of (a) this Agreement and (b) the
period of employment hereunder. Executive acknowledges that the Company has no
adequate remedy at law and would be irreparably harmed if Executive breaches or
threatens to breach any of the provisions of this Section 10 and, therefore,
agrees that the Company shall be entitled to injunctive relief to prevent any
such breach or threatened breach thereof and to specific performance of the
terms of this Section 10 (in addition to any other legal or equitable remedy the
Company may have). Executive further agrees that Executive shall not, in any
equity proceeding relating to the enforcement of this Section 10, raise the
defense that the Company has an adequate remedy at law. Nothing in this
Agreement shall be construed as prohibiting the Company from pursuing any other
remedies at law or in equity that it may have under and in respect of this
Agreement or any other agreement.

11.      SUCCESSORS.

         11.1     Company's Successors. The Company shall require any successor
(whether direct or indirect by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
or assets, by an agreement in substance and form satisfactory to the Executive,
to assume this Agreement and to agree expressly to perform this Agreement in the
same manner and to the same extent as the Company would be required to perform
it in the absence of a succession. For all purposes under this Agreement, the
term "Company" shall include any successor to the business or assets

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of the Company which executes and delivers the assumption agreement described in
this Section 11.1 or which becomes bound by this Agreement by operation of law.

         11.2     Executive's Successors. This Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by, the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

12.      LIQUIDATED DAMAGES. The payments and benefits provided in Sections 5
and 9 are intended to be liquidated damages for a termination of the Executive's
employment by the Company without Cause or for the actions of the Company
leading to a termination of the Executive's employment by the Executive for Good
Reason, and shall be the sole and exclusive remedy therefor.

13.      RELEASE. Notwithstanding any provision herein to the contrary, the
Company may require that, prior to payment of any amount or provision of any
benefit under this Agreement, the Executive shall have executed a complete
release of the Company and its affiliates and related parties in such form as is
reasonably acceptable to both parties and any waiting periods contained in such
release shall have expired.

14.      INSURANCE AND INDEMNIFICATION. The Company will indemnify the Executive
for his actions as a Company employee or officer pursuant to Company policy.

15.      MISCELLANEOUS PROVISIONS.

         15.1     Notice. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Executive,
mailed notices shall be addressed to the Executive at the home address that the
Executive most recently communicated to the Company in writing. In the case of
the Company, mailed notices shall be addressed to its corporate headquarters,
and all notices shall be directed to the attention of its Secretary.

         15.2     Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Executive and by an authorized officer of the
Company (other than the Executive). No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.

         15.3     Other Agreements; Amendment. In consideration for entering
into this Agreement, the Long-Term Incentive Compensation Agreement between the
Executive and the Company dated as of August 21, 2001 (the "LTIC Agreement"), is
hereby terminated and neither the Company nor the Executive shall have any
rights or obligations thereunder; provided, however, that within 10 days after
the date of this Agreement Executive shall be paid an amount in cash equal to
$2,307,692. This Agreement contains all of the terms of Executive's employment
with the Company and supersedes any prior understandings or agreements, whether
oral or written, between the Executive and the Company relating to employment
and/or severance, including the Severance Agreement between the Executive and
the Company dated as of August 21, 2001. This Agreement may be amended only in
writing, by an instrument executed by both parties.

         15.4     No Setoff; Withholding Taxes. There shall be no right of
setoff or counterclaim, with respect to any claim, debt or obligation, against
payments to the Executive under this Agreement. Except as provided in Section 9,
all payments made or benefits provided under this Agreement shall be subject to
reduction to reflect taxes required to be withheld by law. The payments received
under this Agreement shall be in lieu of, and not in addition to, any payments
or benefits received in connection with the Company's general severance policy
then in effect. Should any payment be made or benefits be provided under any
such severance policy, the payments and benefits provided hereunder shall be
correspondingly reduced by such payments and/or benefits.

<PAGE>

         15.5     Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Florida, except their choice-of-law provisions.

         15.6     Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.

         15.7     Arbitration. Except as otherwise provided in Section 9, any
controversy or claim arising out of or relating to this Agreement, or the breach
thereof, shall be settled by arbitration in Jacksonville, Florida, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
Arbitration shall be the exclusive remedy for resolving disputes arising under
this Agreement. Discovery shall be permitted to the same extent as in a
proceeding under the Federal Rules of Civil Procedure. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. All fees and expenses of the arbitrator and such Association shall be
paid as determined by the arbitrator.

         15.8     Legal Fees. In the event of any controversy or claim arising
out of or relating to this Agreement, or the breach thereof, the Company shall
pay (on an as-incurred basis) the reasonable fees and costs of the Executive's
attorneys attributable to such controversy or claim (the "Legal Fees"); provided
that the Executive shall reimburse the Company for all such Legal Fees if the
Executive does not prevail on at least one material issue arising in such
controversy or claim.

         15.9     No Assignment. The rights of any person to payments or
benefits under this Agreement shall not be made subject to option or assignment,
either by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor's
process, and any action in violation of this Section 15.9 shall be void.

         IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized director, as of the day and year
first above written.

EXECUTIVE                           THE ST. JOE COMPANY

       /s/ Kevin M. Twomey          By  /s/ Michael Ainslie
       -------------------             -------------------
       Kevin M. Twomey                 Michael Ainslie
                                       Chairman of the Compensation CommitteeEX-10.3 AGREEMENT DATED 11-6-2003

 

Exhibit 10.3

AGREEMENT

     THIS AGREEMENT is entered into on November 6, 2003 by THE ST. JOE COMPANY
(“St. Joe”) and the ALFRED I. DUPONT TESTAMENTARY TRUST and THE NEMOURS
FOUNDATION (collectively, the “Trust”).

RECITALS

	I.	 	St. Joe’s Board of Directors has authorized an open market stock
repurchase program (the “Stock Repurchase Program”) for the purchase of
shares of St. Joe’s outstanding common stock, no par value (“Shares”).

	II.	 	The Trust desires to sell Shares to St. Joe, and St. Joe desires to
purchase Shares from the Trust, in connection with the Stock Repurchase
Program as provided in this Agreement.

	III.	 	This Agreement is being entered into in good faith and not as part of a
plan or scheme to evade the prohibitions of Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended (the “1934 Act”).

     IN CONSIDERATION OF the mutual promises contained in this Agreement, St.
Joe and the Trust agree:

	A.	 	Purchase and Sale

	 	1.	 	St. Joe shall deliver to the Trust a completed notice in the
form attached to this Agreement as Exhibit “A” (a “Notice”) at or
before 12:00 p.m. Eastern Time each Monday or, if Monday is not a
business day, on the next business day. The Trust shall, after
receipt of the Notice, deliver and sell to St. Joe, and St. Joe
shall buy from the Trust (each such transaction, a “Sale”), at or
before midnight on the third business day following receipt of the
Notice (a “Closing Date”) a number of shares equal to 0.47 (the
“Share Multiplier”), multiplied by the aggregate number of Shares
St. Joe has purchased on the open market from persons other than the
Trust during the calendar week ending immediately prior to the date
of the relevant Notice (the “Prior Week’s Purchased Shares”). On
each Closing Date, (a) the Trust shall deliver to St. Joe’s transfer
agent the Shares which are the subject of the applicable Sale, free
and clear of any security interests, claims, liens, equities or
other encumbrances, together with instructions to transfer such
Shares to St. Joe, together with such stock powers and other
instruments as may be necessary to give effect to such

 

 

	 		 	instructions, and (b) St. Joe shall pay the total amount payable
for the Shares which are the subject of such Sale in immediately
available funds to such account as the Trust has designated in
writing.

	 	2.	 	The price per Share to be paid by St. Joe under each Sale
shall be the Volume Weighted Average Price (“VWAP”) paid by St. Joe
for the Prior Week’s Purchased Shares. For purposes of this
Agreement, VWAP is calculated by dividing the total consideration
paid, without taking commissions into account, for the Prior Week’s
Purchased Shares by the Prior Week’s Purchased Shares, excluding any
transaction involving the purchase of shares directly from
affiliates of St. Joe. An example of the calculation of VWAP is set
forth in the schedule attached to this Agreement as Exhibit “B”.
The price per Share shall be set forth in Item 3 of the Notice.

	 	3.	 	The Trust shall not be required to effect any Sale if the
price to be paid by St. Joe for the Shares is less than $30.00 (the
“Floor Price”) per Share.

	 	4.	 	St. Joe shall not be obligated to deliver a Notice and
neither St. Joe nor the Trust shall be required to effect a Sale if
the performance of their respective obligations would violate
applicable law.

	 	5.	 	Only one Notice may be delivered and one Sale may be effected
each week.

	 	6.	 	Any fractional amounts of Shares required to be sold to St.
Joe under any Notice shall be rounded up to the nearest whole
number.

	 	7.	 	For purposes of this agreement, (a) “business day” means a
day on which the New York Stock Exchange is open for trading, and
(b) “affiliate” has the meaning given it in Rule 12b-2 under the
1934 Act.

	B.	 	Term. The initial term of this Agreement shall commence on November 10,
2003, and shall continue through February 6, 2004; provided that February
12, 2004 shall be a Closing Date for a Sale based on the Prior Week’s
Purchased Shares, if any. The parties, by mutual agreement, may renew
this Agreement for additional terms of ninety (90) days each, subject to
mutual agreement on the Floor Price in Section A (3) with respect to such
renewal period. It is the intent of the parties that the Trust participate
in the Stock Repurchase Program on a pro rata basis with the public
shareholders. Accordingly, the parties agree that upon

2

 

	 	 	renewal, the Share Multiplier defined in Section A (1) will be adjusted,
if necessary, to properly account for the then current ownership position
of the Trust and the public shareholders.

	C.	 	Representations and Warranties.

	 	1.	 	The Trust represents and warrants to St. Joe that (a) each
Sale will have been duly authorized by the trustees of the Trust,
(b) no Sale will contravene, or require any consent, notice or
filing which has not been obtained, given or made, under (i) any law
applicable to the Trust, (ii) the organizational documents of the
Trust or (iii) any judgment, order or decree or any contract or
agreement to which the Trust is subject, (c) the Trust has or will
have valid title to the Shares to be sold to St. Joe and the legal
right and power to sell, transfer and deliver such Shares, (d) the
delivery of the Shares under each Sale will, upon payment of the
total amount payable therefor, pass valid title to St. Joe to such
Shares free and clear of any security interests, claims, liens,
equities, and other encumbrances, and (e) as of the date of this
Agreement, the Trust is not aware of any material nonpublic
information with respect to St. Joe as that term is used in Rule
10b5-1 under the 1934 Act.

	 	2.	 	St. Joe represents and warrants to the Trust that (a) each
Sale will have been duly authorized by the Board of Directors of St.
Joe, (b) no Sale will contravene, or require any consent, notice or
filing which has not been obtained, given or made, under (i) any law
applicable to St. Joe, (ii) the organizational documents of St. Joe
or (iii) any judgment, order or decree or any contract or agreement
to which St. Joe is subject, and (c) as of the date of this
Agreement, there is no material nonpublic information with respect
to St. Joe as that term is used in Rule 10b5-1 under the 1934 Act.

	D.	 	Third-Party Beneficiaries. This Agreement is intended solely for the
benefit of St. Joe and the Trust and may not be assigned.

	E.	 	Arbitration. All disputes that may arise between the parties regarding
the interpretation or application of this Agreement and the legal effect
of this Agreement shall, to the exclusion of any court of law, be
arbitrated and determined by a board of arbitrators, unless the parties
can resolve the dispute by

3

 

	 	 	mutual agreement. Either party shall have the right to submit any dispute
to arbitration ten (10) days after the other party has been notified as
to the nature of the dispute. If the dispute goes to arbitration, each
party shall select one arbitrator and the two arbitrators shall jointly
select a third arbitrator. The arbitration shall be governed by the
rules of the American Arbitration Association and the laws of the State
of Florida. The proceeding shall be held in Jacksonville, Florida. The
parties consent that any papers, notices, or process necessary or proper
for the institution or continuance of, or relating to any arbitration
proceeding, or for the confirmation of an award and entry of judgment on
any award made, including appeals in connections with any judgment or
award, may be served on each of the parties by registered mail addressed
to the party at the principal office of the party, or by personal service
on the party. St. Joe and the Trust consent to the jurisdiction of the
arbitration panel and agree that its decision shall be final and not
subject to appeal.

	F.	 	Sales Plan. It is the intent of the parties that this Agreement comply
with the requirements of Rule 10b5-1(c) under the 1934 Act and this
Agreement shall be interpreted to comply with the requirements of Rule
10b5-1(c) under the 1934 Act.

	G.	 	Complete Agreement. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter and supersedes all
prior agreements, oral or written, with respect to such subject matter.

	H.	 	Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida applicable to contracts
made and to be performed in the State of Florida.

4

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

	 	 	 	 	 
	 	 	 	 	THE ST. JOE COMPANY
 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
 
	 	 	 	 	ALFRED I. DUPONT TESTAMENTARY TRUST
 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
 
	 	 	 	 	THE NEMOURS FOUNDATION
 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:

5

 

EXHIBIT “A”

NOTICE OF PURCHASE OF STOCK

Date: ____________

		
	Item 1. 	Prior Week’s Purchased Shares: _______________________.

		
	Item 2. 	Shares to be purchased from the Trust by St. Joe in connection
with this Notice: __________________.

		
	Item 3. 	Price per Share (Volume Weighted Average Price paid by St. Joe for
the Prior Week’s Purchased Shares based upon the volume of Shares
purchased at a given price): ______________________.

		
	Item 4. 	Total amount payable under Sale effected in connection with this
Notice: ______________________.

6

 

EXHIBIT “B”

Example of calculation of VWAP

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Amount
	 	 	 	Purchased	 	 	 	 	 	Average	 	Payable
	Date	 	Shares	 	 	 	 	 	Price (1)	 	(Cost)
	
	 	
	 	 	 	 	 	
	 	

	 	9/22/03
	 	 	12,000	 	 	 	 	 	 	$	31.9763	 	 	$	383,715.60	 
	 	9/23/03
	 	 	12,000	 	 	 	 	 	 	$	32.0008	 	 	$	384,009.60	 
	 	9/24/03
	 	 	12,000	 	 	 	 	 	 	$	32.0212	 	 	$	384,254.40	 
	 	9/25/03
	 	 	12,000	 	 	 	 	 	 	$	32.0511	 	 	$	384,613.20	 
	 	9/26/03
	 	 	12,000	 	 	 	 	 	 	$	31.6262	 	 	$	379,514.40	 
	 
	 	 	
	 	 	 	 	 	 	 	
	 	 	 	
	 
	Prior Week’s Purchased Shares	 	 	60,000	 	 	VWAP	 	$	31.9351	 	 	Total   $1,916,107.20

	(1)	 	Average Price excludes any commissions

7

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