Document:

Exhibit 10.3A

 Exhibit 10.3A 
 EMPLOYMENT AGREEMENT 
 This
EMPLOYMENT AGREEMENT (the “Agreement”), is dated as of the 1st day of January 2010, between MHI Hospitality Corporation, a Maryland corporation (the “Company” or “Employer”), and William J. Zaiser (the “Executive”). 
 RECITALS: 
 WHEREAS, the Company is in the business of owning and developing hotels (“the Company’s Business”); and 
 WHEREAS, Employer and Executive entered into an employment agreement, dated December 21, 2004, to engage Executive to serve as Executive Vice President and Chief Financial Officer of the Company (the “Prior Employment
Agreement”); and 
 WHEREAS, the Prior Employment Agreement expired on December 31, 2009; and 
 WHEREAS, the Employer and Executive desire to enter into this new Agreement as of the date hereof on the terms and conditions set forth
herein. 
 NOW, THEREFORE, on the basis of the foregoing premises and in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows: 
 Section 1. Employment. The Company hereby agrees to employ the
Executive and the Executive hereby accepts such employment with the Company, on the terms and subject to the conditions hereinafter set forth. Subject to the terms and conditions contained herein, the Executive shall serve as Executive Vice
President and Chief Financial Officer of the Company and shall have such duties as are typically performed by a chief financial officer of a corporation of similar size and type as the Company. The Executive shall render his services at the
direction of, and shall report solely to, the Board of Directors of the Company. The Executive agrees to use best efforts to promote and further the business, reputation and good name of the Company. The Executive’s primary place of employment
shall be in the Rockville, Maryland area, or such other location as determined by the Board of Directors of the Company. 
 Section 2. Commencement Date; Term. Employment of the Executive shall continue on the terms herein from and after the date first written above (“Commencement Date”), and shall continue during the period ending on
December 31, 2012, unless terminated prior to such date pursuant to Section 6. Following December 31, 2012, the term of the Agreement shall be extended for an additional year, on each anniversary of the Commencement Date, unless
either party gives 180 days prior written notice that the term will not be extended (the “Employment Term”). The Employment Term shall terminate upon any termination of the Executive’s employment pursuant to Section 6.

  

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 Section 3. Compensation and Benefits. During the Employment Term, the Executive shall
be entitled to the following compensation and benefits: 
 (a) Salary. As compensation for the performance
of the Executive’s services hereunder for the 12-month period ending December 31, 2010, the Company shall pay to the Executive a salary (the “Salary”) of Two Hundred Ten Thousand Nine Hundred Fifty Dollars $210,950. The
Executive’s Salary shall be increased in 2011 by 5%, plus a cost of living adjustment, as determined by the Nominating, Corporate Governance and Compensation Committee of the Company’s Board of Directors (the “Committee”), which
in no event will be less than a percentage equal to the annual inflation rate for the prior full calendar year as measured by the Consumer Price Index for All Urban Consumers published by the U.S. Department of Labor, Bureau of Labor Statistics (the
“CPI Adjustment”). For 2012, the Committee shall review Executive’s Salary in conjunction with its regular review of employee salaries and may increase his Salary as in effect as the Committee shall deem appropriate; provided,
however, that the Executive’s Salary shall be increased annually to account for the CPI Adjustment. The Salary shall be payable in arrears in approximately equal semi-monthly installments (except that the first and last such semi-monthly
installments may be prorated if necessary) on the Company’s regularly scheduled payroll dates, minus such deductions as may be required by law or reasonably requested by the Executive 
 (b) Annual Performance Bonus. The Executive shall be eligible to receive, in respect of each calendar year during the
Employment Term, an annual cash performance bonus (the “Annual Performance Bonus”) in an amount between twenty percent (20%) and thirty percent (30%) of Salary for that calendar year, based upon (other than as noted below) the
attainment of quantitative performance goals set forth in a performance plan established by the Committee by January 31 of each year (the “Performance Plan”). The Annual Performance Bonus shall be paid to the Executive within thirty
(30) days following the receipt of the audited results of the Company for the calendar year, but in no event later than sixty (60) days after the close of the calendar year. If necessary, the Annual Performance Bonus shall be granted under
a performance based plan that meets the requirements under Section 162(m) of the Internal Revenue Code (the “Code”). 
 (c) Stock Options. The Company may grant to Executive stock options, performance shares, performance units, deferred shares or restricted stock from time to time under the terms of a separate
agreement, and consistent with the terms of any stock incentive plan which may be established and adopted by the Company. 
 (d) Benefits. In addition to the Salary and the Annual Performance Bonus, the Executive shall be eligible to participate in the Company’s health, insurance, retirement, and other benefit plans
and programs. The Executive shall also be entitled to six (6) weeks of paid vacation for each calendar year during the Employment Term. Additionally, Executive will be entitled to three (3) weeks paid time for illness and personal leave,
and all Company holidays. The Executive shall be entitled to all other benefits as are generally allowed to other senior executives of the Company, in accordance with the Company’s policies in effect from time to time. 
 (e) Directors and Officers Liability Insurance. The Company will, at its expense, provide the Executive with Directors
and Officers Liability Insurance, subject to the provisions governing such insurance and on such terms as the Board may from time to time

  

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decide. The Company will indemnify Executive and hold Executive harmless, to the maximum extent permitted by applicable law, against all costs, charges and expenses incurred or sustained by him
in connection with any action, suit or proceeding to which he may be made a party by reason of his being an officer, director or employee of the Company or of any subsidiary or affiliate of the Company at any time. 
 (f) Insurance and Other Related Benefits. Company shall pay for one hundred percent (100%) of all health
insurance premiums under a policy covering Executive and his immediate family. During the Employment Term, the Company shall maintain on the life of Executive, provided he is insurable, at standard rates a term life insurance policy in the amount of
One Million Dollars ($1,000,000.00). Executive shall have the right to designate the beneficiary or beneficiaries of such policy. In the event that Executive is not insurable at standard rates during the term of this Agreement, but Executive is able
to procure rated coverage, Executive shall have the right to procure coverage for a lower amount of insurance, the cost of which is equivalent to the standard term rate cost of $1,000,000.00 of coverage or such lesser amount designated by Executive.
During the Employment Term, the Company shall also maintain for the benefit of the Executive disability insurance such that Executive will be entitled to receive monthly payments not less than the monthly payments made pursuant to Section 3(a)
hereof at the time of any event causing his complete or partial disability. In addition to the foregoing, Executive will be entitled to other executive benefits on the same basis as the Company provides to its other executives and customary fringe
benefits and privileges that the Company makes generally available to executives. 
 (g) Other Benefits.
Executive is entitled to visit the hotels in the Company’s portfolio and utilize same for leisure or business at no cost to Executive. 
 (h) Retirement. To the extent a retirement or profit sharing plan is established and adopted by the Company, Executive shall be entitled to participate in said plan pursuant to applicable law.

 (i) No Other Compensation. Except as otherwise expressly provided herein, or in any other written
document executed by the Company and the Executive, no other compensation or other consideration shall become due or payable to the Executive on account of the services rendered hereunder. 
 (j) Taxation and Withholding. The compensation and benefits provided for in this Section 3 (as well as the
Termination Payments provided for in Section 6(g)) shall be reported as income to Executive and subjected to tax withholding as required under applicable Federal, state, and local laws. 
 (k) Reimbursements. Payment or reimbursement of expenses incurred by the Executive pursuant to the provisions of this
Section 3, other than reimbursements that would otherwise be exempt from income or the application of Section 409A of the Code, shall be made promptly and in no event later than December 31 of the year following the year in which such
expenses were incurred, and the amount of such expenses eligible for payment or reimbursement, or in-kind benefits provided, in any year shall not affect the amount of such expenses eligible for payment or reimbursement, or in-kind benefits to be
provided, in any other year, except for any limit on the amount of expenses that may be reimbursed under an arrangement described in Section 105(b) of the Code. Additionally, any right to expense reimbursement or in-kind benefits shall not be
subject to liquidation or exchange for another benefit. 
  

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 Section 4. Exclusivity. During the Employment Term, the Executive shall devote his
full time to the business of the Company, shall faithfully serve the Company, and shall in all respects conform to and comply with the lawful and reasonable directions and instructions given to him by the Board. The Executive shall use reasonable
efforts to promote and serve the interests of the Company and shall not engage in any other business activity, whether or not such activity shall be engaged in for pecuniary profit, except that the Executive may participate in the activities of
professional trade organizations and, engage in personal investing activities, provided that such activities do not interfere in any material respect with the services to be provided by the Executive hereunder and are not in companies that compete
with the Company. Notwithstanding the foregoing, Employer acknowledges and agrees that the Executive will be permitted to serve as a director of MHI Hotels Services LLC, MHI Hotels LLC and/or MHI Hotels Two, Inc. during the Employment Term and to
receive compensation comparable to that paid to other members of such boards in connection with such service, except to the extent that receipt of such compensation would adversely affect the Company’s qualification as a real estate investment
trust for federal income tax purposes. 
 Section 5. Reimbursement for Expenses. In addition to, but without duplication
of, the expenses described in Section 3(d), the Executive is authorized to incur reasonable expenses in the discharge of the services to be performed hereunder, including, without limitation, expenses for travel, entertainment, maintaining
professional licenses and certifications, trade association fees, attendance at association meetings and conferences, lodging and similar items in accordance with the Company’s expense reimbursement policy, as the same may be modified by the
Company from time to time. The Company shall reimburse the Executive for all such proper expenses upon presentation by the Executive of itemized accounts of such expenditures in accordance with the financial policy of the Company, as in effect from
time to time. 
 Section 6. Termination and Default. 
 (a) Death. The Executive’s employment shall automatically terminate upon his death and upon such event, the
Executive’s estate shall be entitled to receive only the Accrued Compensation (as hereinafter defined) pursuant to Section 6(g)(ii) hereof and no other severance compensation. 
 (b) Disability. If the Executive is unable to perform the duties required of him under this Agreement because of
illness, incapacity, or physical or mental disability, the Employment Term shall continue and the Company shall pay all compensation required to be paid to the Executive hereunder, unless the Executive is unable to perform the duties required of him
under this Agreement for an aggregate of 120 days (whether or not consecutive) during any 12-month period during the term of this Agreement (a “Disability”), in which event the Executive’s employment shall terminate and Executive
shall be entitled to receive only the Accrued Compensation pursuant to Section 6(g)(ii) hereof and no other severance compensation. 
  

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 (c) Cause. The Company may terminate the Executive’s employment
at any time, with Cause. For purposes of this Agreement, “Cause” shall mean the occurrence of any of the following: (i) the Executive’s failure (except where due to a disability contemplated by subsection (b) hereof),
neglect or refusal to perform his duties hereunder, (ii) any breach of this Agreement by the Executive (or any grossly negligent, willful or intentional act of the Executive) that injures the reputation or business of the Company or its
affiliates in any material respect; (iii) material breach by the Executive of his obligations under this Agreement; (iv) Executive’s gross negligence in the performance or intentional, material nonperformance (continuing for ten
(10) days after receipt of written notice of need to cure) of any of Executive’s material duties and responsibilities hereunder; (v) Executive’s dishonesty, fraud or misconduct with respect to the business or affairs of the
Company; (vi) the Executive’s indictment of, conviction of, or pleading of no contest to a felony or any misdemeanor involving fraud; (vii) the commission by the Executive of an act of fraud or embezzlement, or any other act involving
the misappropriation of funds or assets; or (viii) chronic alcohol abuse or illegal drug use by Executive. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company. Cause shall not exist pursuant to clause (i), (ii), (iii) or (iv) of this
Section 6(c) unless the Executive has failed to correct the activity alleged to constitute “Cause” within twenty (20) days following written notice from the Company of such activity, which notice shall specifically set forth the
nature of such activity and the corrective action reasonably sought by the Company. Notwithstanding the foregoing, the termination of the Executive’s employment for Cause shall be pursuant to the action of the Board, taken in conformity with
the By-laws of the Company. In the event of Executive’s termination for Cause as set forth above, Executive shall not be entitled to any severance compensation. 
 (d) Without Cause. The Company may terminate the Executive’s employment during the Employment Term without Cause
at any time by giving written notice to the Executive. A termination of the Executive’s employment without Cause shall mean a termination initiated by the Company for any reason other than (i) Cause or (ii) on account of death or
Disability. A termination without Cause shall be effective immediately upon notice given by the Company to the Executive, or such later date as may be mutually agreed between the Executive and the Company. Upon a termination of employment without
Cause, Executive shall be entitled to the compensation payments provided in Section 6(g)(i). 
 (e)
Resignation/Termination for Good Reason. The Executive shall have the right to terminate his employment for Good Reason under any of the following circumstances: (i) the failure by the Company to pay to the Executive the compensation and
benefits, or expense reimbursement in accordance with Sections 3 and 5 herein; (ii) a material diminution in the Executive’s responsibilities or authority, or diminution of the Executive’s title; (iii) if the Executive’s
primary place of employment is moved to another location more than sixty (60) miles away from Rockville, Maryland; (iv) any material breach of this Agreement by the Company or (v) following a Change in Control (as defined below) of
Employer followed by a termination of Executive’s employment within (12) months of such Change in Control; provided that the Executive must provide written notice of termination of employment for Good Reason within thirty (30) days
following the Executive’s knowledge of an event constituting Good Reason or such event shall not constitute Good Reason hereunder. Good Reason shall not exist upon a termination of employment described in Section 6(b), (c) or
(d) herein. Upon termination pursuant to this Section 6(e), Executive shall be entitled to the compensation payments provided in Section 6(g)(i). 
  

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 Notwithstanding the foregoing, Good Reason shall not be deemed to exist unless the Company fails to cure the
event giving rise to Good Reason within thirty (30) days after receipt of written notice thereof given by the Executive. For purposes of this Agreement, “Change in Control” shall mean the following events or circumstances that occur
after the Commencement Date: 
 (A) The ownership or acquisition (whether by a merger contemplated by
Section 6(d)(vii)(B) below, or otherwise) by any Person (other than a Qualified Affiliate (as defined below)), in a single transaction or a series of related or unrelated transactions, of Beneficial Ownership of more than fifty percent
(50%) of (1) the Company’s outstanding common stock (the “Common Stock”) or (2) the combined voting power of the Company’s outstanding securities entitled to vote generally in the election of directors (the
“Outstanding Voting Securities”); 
 (B) The merger or consolidation of the Company with or into any
other Person other than a Qualified Affiliate, if, immediately following the effectiveness of such merger or consolidation, Persons who did not Beneficially Own Outstanding Voting Securities immediately before the effectiveness of such merger or
consolidation directly or indirectly Beneficially Own more than fifty percent (50%) of the outstanding shares of voting stock of the surviving entity of such merger or consolidation (including for such purpose in both the numerator and
denominator, shares of voting stock issuable upon the exercise of then outstanding rights (including then exercisable conversion rights), options or warrants) (“Resulting Voting Securities”), provided that, for purposes of this
Section 6(d)(vii)(B), if a Person who Beneficially Owned Outstanding Voting Securities immediately before the merger or consolidation Beneficially Owns a greater number of the Resulting Voting Securities immediately after the merger or
consolidation than the number the Person received solely as a result of the merger or consolidation, that greater number will be treated as held by a Person who did not Beneficially Own Outstanding Voting Securities before the merger or
consolidation, and provided further that such merger or consolidation would also constitute a Change in Control if it would satisfy the foregoing test if rights, options and warrants were not included in the calculation; 
 (C) Any one or a series of related sales or conveyances to any Person or Persons (including a liquidation) other than any one
or more Qualified Affiliates of all or substantially all of the assets of the Company; 
 (D)
Incumbent Directors cease to be two-thirds (2/3) of the members of the Board of Directors, where an “Incumbent Director” is (1) an individual who is a member of the Board of Directors on the Commencement Date or (2) any new
director whose appointment by the Board of Directors or whose nomination for election by the stockholders was approved by at least two-thirds ( 2/3) of the persons who were already Incumbent Directors at the time of
such appointment, election or approval, other than any individual who assumes office initially as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board of Directors or as a result of an agreement to avoid or settle such a contest or solicitation; or 
 (E) A Change in Control shall also be deemed to have occurred immediately before the completion of a tender offer for the
Company’s securities representing more than fifty percent (50%) of the Outstanding Voting Securities, other than a tender offer by a Qualified Affiliate. 
  

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 (F) For purposes of this Agreement, the following definitions shall apply:

 (a) “Beneficial Ownership,” “Beneficially Owned” and “Beneficially Owns” shall
have the meanings provided in Exchange Act Rule 13d-3; 
 (b) “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended; 
 (c) “Person” shall mean any individual, entity, or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), including any natural person, corporation, trust, association, partnership, joint venture, limited liability company, legal entity of any kind, government, or political
subdivision, agency or instrumentality of a government, as well as two or more Persons acting as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of the Company’s securities; and

 (d) “Qualified Affiliate” shall mean (i) any directly or indirectly wholly owned subsidiary of
the Company, (ii) any employee benefit plan (or related trust) sponsored or maintained by the Company or by any entity controlled by the Company; or (iii) any Person consisting or controlled in whole or in part of or by the Employee or one
or more individuals who are then the Company’s Chief Executive Officer or any other named executive officer (as defined in Item 402 of Regulation S-K under the Securities Act of 1933) of the Company as indicated in its most recent
securities filing made before the date of the transaction. 
 (f) Payment in Lieu. The Company may, in its
sole discretion, at any time after notice of termination without Good Reason has been given to the Company by the Executive, terminate this Agreement, provided that, in addition to any amount payable to the Executive under Section 6(g) herein,
the Company shall pay to the Executive (without duplication) his then current Salary and continue benefits provided pursuant to Section 3(d) herein, for the duration of the unexpired notice period. 
 (g) Termination Payments. 
 (i) Termination without Cause or By Executive for Good Reason. In the event that during the Employment Term the
Executive’s employment is terminated by the Company without Cause or the Executive terminates his employment for Good Reason, the Company shall pay to the Executive the sum of the following amounts: 
 (A) all amounts fully earned pursuant to the terms of this Agreement, but unpaid hereunder through the date of termination,
if any, in respect of Salary, any accrued but not yet paid Annual Performance Bonus owed for the year prior to Executive’s termination, vesting of any previously issued stock options or restricted stock, payment of life, health and disability
insurance coverage for a period of five years following termination, and unreimbursed expenses; provided, however, that the Company’s obligation to pay life, health and/or disability insurance shall terminate prior to such fifth year
anniversary if Executive accepts other employment that would reasonably be expected to provide such insurance; 
  

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 (B) a severance payment equal to two (2) times the Executive’s
combined Salary and actual bonus compensation for the preceding fiscal year will be paid within five (5) days of the Executive’s last day of employment; and 
 (C) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that (i) any
payment, award, benefit or distribution (or any acceleration of payment, award, benefit or distribution) by the Company (or any of its affiliates) to or for the benefit of the Executive (whether pursuant to the terms of this Agreement or otherwise)
the (“Payments”) would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), and (ii) the reduction of the amounts payable to the Executive under this Agreement to the maximum amount that
could be paid to the Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”) would provide the Executive with a greater after-tax amount than if such amounts were not reduced, then the amounts payable to the Executive under
this Agreement shall be reduced (but not below zero) to the Safe Harbor Cap. The reduction of the amounts payable hereunder, if applicable, shall be made to the extent necessary in the following order: the acceleration of vesting of stock options or
restricted stock with an exercise price that exceeds the then fair market value of the stock subject to the award, the payments under Section 6(g)(i)(B), and all other payments under this Section 6(g)(i). For purposes of reducing the
Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a greater after-tax result to the Executive, no amounts
payable under this Agreement shall be reduced pursuant to this provision. 
 All determinations required to be made under this
Section 6(g)(i)(C) shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall provide detailed supporting calculations both
to the Company and the Executive within fifteen (15) business days of the receipt of notice from the Company or the Executive that there has been a Payment, or such earlier time as is requested by the Company. Notwithstanding the foregoing, in
the event (i) the Board of Directors of the Company shall determine prior to the Change in Control that the Accounting Firm is precluded from performing such services under applicable auditor independence rules, or (ii) the Audit Committee
of the Board of Directors of the Company determines that it does not want the Accounting Firm to perform such services because of auditor independence concerns or (iii) the Accounting firm is serving as accountant or auditor for the person(s)
effecting the Change in Control, the Board of Directors of the Company shall appoint another nationally

  

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recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees, costs and expenses
(including, but not limited to, the costs of retaining experts) of the Accounting Firm shall be borne by the Company. If payments are reduced to the Safe Harbor Cap or the Accounting firm determines that no Excise Tax is payable by the Executive
without a reduction in payments, the Accounting Firm shall provide a written opinion to the Executive to such effect, that the Executive is not required to report any Excise Tax on the Executive’s federal income tax return, and that the failure
to report the Excise Tax, if any, on the Executive’s applicable federal income tax return will not result in the imposition of a negligence or similar penalty. The determination by the Accounting Firm shall be binding upon the Company and the
Executive (except as provided below). 
 If it is established pursuant to a final determination of a court or an Internal
Revenue Service (the “IRS”) proceeding which has been finally and conclusively resolved, that Payments have been made to, or provided for the benefit of, the Executive by the Company, which are in excess of the limitations provided in this
Section (referred to hereinafter as an “Excess Payment”), the Executive shall repay the Excess Payment to the Company on demand, together with interest on the Excess Payment at the applicable federal rate (as defined in
Section 1274(d) of the Code) from the date of the Executive’s receipt of such Excess Payment until the date of such repayment. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the
determination, it is possible that Payments which will not have been made by the Company should have been made (an “Underpayment”), consistent with the calculations required to be made under this Section. In the event that it is determined
(i) by the Accounting Firm, the Company (which shall include the position taken by the Company, or together with its consolidated group, on its federal income tax return) or the IRS or (ii) pursuant to a determination by a court, that an
Underpayment has occurred, the Company shall pay an amount equal to such Underpayment to the Executive within ten (10 days of such determination together with interest on such amount at the applicable federal rate from the date such amount would
have been paid to the Executive until the date of payment. The Executive shall cooperate, to the extent the Executive’s expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or
disputes with the IRS in connection with the Excise Tax or the determination of the Excess Payment. 
 Notwithstanding anything
to the contrary in the foregoing provisions of this Section 6(g)(i)(C), (i) payment of the portion of any Underpayment that is taxes shall not be made later than December 31 of the year next following the year in which the Excise Tax
is remitted to the taxing authority; (ii) payment of the portion of any Underpayment that is interest or penalties incurred by the Executive with respect to such taxes shall not

  

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be made later than December 31 of the year next following the year in which the Executive incurs such interest or penalties, as applicable; and (iii) reimbursement of expenses incurred
due to a tax audit or litigation addressing the existence or amount of a tax liability, whether federal, state, local or foreign, shall not be made later than the end of the year following the year in which the taxes that are the subject of the
audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no taxes are remitted, the end of the year following the year in which the audit is completed or there is a final nonapplicable settlement or
other resolution of the litigation. If the Underpayment is a deferral of compensation, the amount of interest and penalties eligible for payment or reimbursement in any year shall not affect the amount of such interest and penalties eligible for
payment or reimbursement in any other year, nor shall such right to payment or reimbursement be subject to liquidation or exchange for another benefit. 
 (ii) Limitations. Executive agrees that he shall not be entitled to any pro-rated payment of the Annual Performance Bonus for the year of Executive’s termination. Notwithstanding any other
provision in this Agreement or the terms of any severance plan or policy maintained by the Company or its affiliates to the contrary, if the Executive is entitled to the severance benefit provided in Section 6(g)(i), the Executive shall not be
entitled to receive any other payments or benefits under any other severance or similar plan maintained by the Company or its affiliates. 
 (iii) Termination due to Death or Disability. In the event that during the Employment Term the Executive’s employment is terminated by the Company due to the Executive’s death or
Disability, the Company shall pay to the Executive, or the Executive’s estate, all amounts fully earned pursuant to the terms of this Agreement, but unpaid hereunder through the date of termination, if any, in respect of Salary, and accrued but
not yet paid Annual Performance Bonus owed from the year prior to Executive’s termination (the “Accrued Compensation”). 
 (iv) Termination for Cause or By Executive without Good Reason. In the event that during the Employment Term the Executive’s employment is terminated by the Company for Cause or by the
Executive by resignation without Good Reason, the Company shall pay to the Executive the Accrued Compensation. 
 (v) Expiration of Agreement. If either the Company or the Executive elects not to renew this Agreement and it expires, the Executive shall not receive any termination payments other than any amounts fully earned pursuant to the terms
of this Agreement, but unpaid hereunder through the date of expiration of this Agreement, if any, in respect of Salary, and any accrued but not yet paid Annual Performance Bonus owed with respect to the year of such expiration and any prior year.

 (h) No Mitigation or Offset. In the event of any termination of Executive’s employment hereunder,
Executive shall be under no obligation to seek other employment or otherwise mitigate the obligations of the Company under this Agreement, and there shall be no offset against amounts due Executive under this Agreement on account of amounts
purportedly

  

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owing by Executive to the Company or amounts earned by Executive from any source. Any amounts due to Executive under this Agreement upon termination of employment are considered to be reasonable
by the Company and are not in the nature of a penalty. 
 (i) Survival of Operative Sections. Upon any
termination of the Executive’s employment, the provisions of Sections 6(g) and 7 through 21 of this Agreement shall survive to the extent necessary to give effect to the provisions thereof. 
 (j) Specified Employee Delay. The time and form of payment of any amount or benefits upon the Executive’s
termination of employment described in the preceding provisions of this Section 6 (including expense reimbursements) shall be made in accordance with such Section, provided that if the Executive is a “specified employee” under
Section 409A of the Code, payment shall be delayed until the earlier to occur of (i) the Executive’s death or (ii) the date that is six months and one day following the Executive’s termination of employment (the “Delay
Period”), unless the payment at such time can be characterized as a “short-term deferral” for purposes of Section 409A of the Code or as otherwise exempt from the provisions of Section 409A of the Code. Upon the expiration
of the Delay Period, if any, all payments and benefits delayed pursuant to this paragraph shall be paid or reimbursed to Executive in a lump sum, and any remaining payments due under the preceding provisions of this Section 6, whichever is
applicable, shall be payable at the same time and in the same form as such amounts and benefits would have been paid in accordance with their original payment schedule under this Section 6. For purposes of applying the provisions of
Section 409A of the Code, each separately identified amount to which the Executive is entitled shall be treated as a separate payment. For purposes of this Section 6, no termination of employment shall be treated as having occurred unless
such termination qualifies as a “separation from service” under Section 409A of the Code. 
 (k)
Reimbursements. Payment or reimbursement of expenses incurred by the Executive pursuant to the provisions of this Section 6, other than reimbursements that would otherwise be exempt from income or the application of Section 409A of
the Code, shall be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, and the amount of such expenses eligible for payment or reimbursement, or in-kind benefits provided, in
any year shall not affect the amount of such expenses eligible for payment or reimbursement, or in-kind benefits to be provided, in any other year, except for any limit on the amount of expenses that may be reimbursed under an arrangement described
in Section 105(b) of the Code. Additionally, any right to expense reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. If the Executive is a “specified employee” under
Section 409A of the Code, the full cost of the continuation or provision of life, health and disability insurance coverage under any provision of this Section 6 (other than any cost of any coverage that is exempt from Section 409A of
the Code) shall be paid by the Executive until the end of the Delay Period, and such cost shall be reimbursed by the Company to, or on behalf of, the Executive in a lump sum cash payment on the day following the Delay Period. 
 (l) No Acceleration. Notwithstanding anything in this Agreement to the contrary, the time or schedule of any payment
or amount scheduled to be paid pursuant to the terms of this Agreement, including but not limited to any stock options, restricted stock or other equity-based award, payment or amount that provides for the “deferral of compensation” under
Section 409A of the Code, shall not be accelerated except as otherwise permitted under Section 409A of the Code and the guidance and Treasury regulations issued thereunder. 
  

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 Section 7. Confidentiality and Non-Disclosure Covenants. 
 (a) Confidential Information. The Company considers one of its most valuable assets to be its confidential and trade
secret information, including, but not limited to, potential real estate acquisition targets and client lists of the respective hotel properties. Confidential Information shall not include information which: (i) has previously been disclosed by
the Company in published papers; (ii) becomes part of the public domain, by publication or otherwise; and (iii) is not due to the direct or indirect acts or omissions of Executive. The parties to this Agreement recognize that the Company
has invested and will invest considerable amounts of time and money in attaining and developing all of the information described above (hereinafter collectively referred to as “Confidential Information”), and any unauthorized disclosure or
release of such Confidential Information in any form would harm the Company. 
 (b) Non-Disclosure of
Confidential Information. Executive shall refrain from directly or indirectly disclosing to any third party, for any purpose other than for the direct benefit of the Company, any of the Company’s Confidential Information during his employ
and thereafter, whatever the reason for his leaving the Company’s employment. 
 (c) Confidentiality of
the Company’s Property. Executive recognizes that all of the documents and other tangible items which contain any of the Company’s Confidential Information are the Company’s property exclusively, including those documents and
items which Executive may have developed or contributed to developing while employed by the Company, whether or not developed during regular working hours or on the Company’s premises. 
 (d) Executive recognizes that all materials, identification information, keys, computer software and hardware, computer
programming libraries, manuals, databases, disks, tapes, patent applications, technical notes and equipment the Company provides for Executive are also the property of the Company exclusively. All items described in this and the preceding paragraph
are hereinafter collectively referred to as “the Company’s Property”. 
 (e) Should
Executive’s employment be terminated for any reason, Executive shall: 
 (i) Refrain from taking any of the
Company’s Property or allowing any of the Company’s Property to be taken from the Company’s premises; 
 (ii) Refrain from reproducing in any manner or allowing to be reproduced any of the Company’s Property; 
 (iii) Refrain from removing any such reproduction from the Company’s premises; and 
 (iv)
Immediately return to the Company any original or reproduction of the Company’s Property in his custody, control or possession. 
  

 12 

 Section 8. Non-Competition and Non-Solicitation Covenants. During his employment with
the Company and for a period of one (1) year thereafter (“Restricted Period”), whatever the reason for Executive’s termination of employment, unless Executive receives the Company’s advance written waiver, Executive shall
not, either directly or indirectly, either on his own behalf or on behalf of another business, engage in or assist others in the following activities: 
 (a) Soliciting, hiring, recruiting, or attempting to recruit, for any business which competes with the Company’s Business any person employed or contracted with by the Company or employed or
contracted with by the Company during the twelve (12) months immediately prior to Employee’s termination of employment with the Company; 
 (b) Soliciting for any business which competes with the Company’s Business, any competitive business from any of the Company’s customers during the twelve (12) months immediately prior to
Executive’s termination of employment, or specific prospective customers solicited by the Company during the six (6) months immediately prior to Executive’s termination of employment. 
 (c) In the Market Area (as hereinafter defined), entering into, engaging in, being employed by, being connected to,
consulting or rendering services for, any business which competes with, or is similar to, the Company’s Business or business known to Executive to be conducted by the Company or planned to be conducted by the Company at the time of
Executive’s separation from employment with the Company, in a capacity performing management functions similar to those performed or managed by Executive while employed by the Company. This provision shall not restrict Executive from owning a
passive investment interest of the outstanding equity ownership or share in an organization represented by securities publicly traded on a recognized national securities exchange for exchange including but not limited to MHI Hotel Services, LLC and
its affiliates. For purposes of this provision, “Market Area” shall be defined as Savannah, Georgia; Raleigh, North Carolina; Williamsburg, Virginia; Philadelphia, Pennsylvania; Wilmington, North Carolina and Laurel, Maryland and any other
city or metropolitan area within the United States in which a hotel owned by the Company or with respect to which the Company or an affiliate has an ownership interests is located as of the last day of the Employment Term. 
 Section 9. Injunctive Relief. Without intending to limit the remedies available to the Company, the Executive acknowledges that a
breach of any of the covenants contained in Sections 7 and 8 hereof may result in material irreparable injury to the Company or its subsidiaries or affiliates for which there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or threat thereof, the Company shall be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction, without the necessity of proving
irreparable harm or injury as a result of such breach or threatened breach of Sections 7 and 8 hereof, restraining the Executive from engaging in activities prohibited by Sections 7 and 8 hereof or such other relief as may be required specifically
to enforce any of the covenants in Sections 7 and 8 hereof. 
  

 13 

 Section 10. Extension of Restricted Period. In addition to the remedies the Company
may seek and obtain pursuant to Section 9 of this Agreement, the Restricted Period shall be extended by any and all periods during which the Executive shall be found by a court to have been in violation of the covenants contained in Sections 7
and 8 hereof. 
 Section 11. Representations and Warranties. The Executive and the Company represent and warrant to the
other as follows: 
 (a) This Agreement, upon execution and delivery by the Executive and the Company will be the
valid and binding obligation of the Executive and the Company enforceable against the Executive and the Company in accordance with its terms. 
 (b) As to the Executive only, neither the execution and delivery of this Agreement nor the performance of this Agreement in accordance with its terms and conditions by the Executive (i) requires the
approval or consent of any governmental body or of any other person or (ii) conflicts with or results in any breach or violation of, or constitutes (or with notice or lapse of time or both would constitute) a default under, any agreement,
instrument, judgment, decree, order, statute, rule, permit or governmental regulation applicable to the Executive. 
 (c) The representations and warranties of the Executive and the Company contained in this Section 11 shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. 

Section 12. Assignment; No Third-Party Beneficiaries. This Agreement shall inure to the benefit of, and be binding on, the
successors and assigns of each of the parties, including, but not limited to, the Executive’s heirs, the Executive’s guardian in the event of the Executive’s disability, the personal representatives of the Executive’s estate and
any successor to all or substantially all of the business and/or assets of the Company. This Agreement, and the Executive’s rights and obligations hereunder, may not be assigned by the Executive; any purported assignment by the Executive in
violation hereof shall be null and void. The Company may assign this Agreement and its rights hereunder, but in the event of assignment, the assignee shall expressly assume all obligations of the Company hereunder and the Company shall remain fully
liable for the performance of all of such obligations in the manner prescribed in this Agreement. Except as otherwise provided herein, nothing in this Agreement shall confer upon any person or entity not a party to this Agreement, or the legal
representatives of such person or entity, any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement. 
 Section 13. Waiver and Amendments. Any waiver, alteration, amendment or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by the parties hereto.
No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a
continuing waiver. 
 Section 14. Ethical Conduct. Executive shall conduct business in an ethical manner by: 

(a) Avoiding conflicts of interest; 
  

 14 

 (b) Complying with the Company’s Code of Conduct and Corporate
Governance Principles; 
 (c) Refusing to accept, and reporting to the Company the offering of, anything of
material value, including a gift, loan on preferential terms, reward, promise of future employment, favor or service which would influence a reasonably prudent person in the discharge of his duties for the Company or which is based on any
understanding that his action would be influenced; and 
 (d) Abiding by policies and guidelines relating to
ethical conduct which the Company may issue as it deems appropriate. 
 Section 15. Indemnification. The Executive and
the Company shall enter into an indemnification agreement providing for the indemnification of Executive to the fullest extent permitted by Maryland law. 
 Section 16. Severability, Governing Law. The Executive acknowledges and agrees that the covenants set forth in Sections 7 and 8 hereof are reasonable and valid in geographical and temporal scope
and in all other respects. If any of such covenants or such other provisions of this Agreement are found to be invalid or unenforceable by a final determination of a court or arbitration panel of competent jurisdiction (a) the remaining terms
and provisions hereof shall be unimpaired and (b) the invalid or unenforceable term or provision shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO ITS CONFLICT OF
LAWS RULES. 
 Section 17. Notices. 
 (a) All communications under this Agreement shall be in writing and shall be delivered by hand or mailed by overnight courier
or by registered or certified mail, postage prepaid 
 If to the Company:
        MHI Hospitality Corporation 
                                         
410 W. Francis Street 
                                         
Williamsburg, Virginia 23185 
 If to Executive:
              William J. Zaiser 
                                         
11200 Rockville Pike 
                                         
Rockville, Maryland 20895 
 (b) Any notice so addressed shall be deemed to be given: if delivered by hand, on the
date of such delivery; if mailed by overnight courier, on the first business day following the date of such mailing; and if mailed by registered or certified mail, on the third business day after the day of such mailing. 
  

 15 

 Section 18. Section Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof, affect the meaning or interpretation of this Agreement or of any term or provision hereof. 
 Section 19. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties hereto regarding the
employment of the Executive. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter of this Agreement. The Prior Employment
Agreement is hereby terminated and is of no further force or effect. 
 Section 20. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative body of competent jurisdiction, such determination shall not effect the remaining provisions of this Agreement which shall remain in full force and effect. 

Section 21. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original
and all of which together shall be considered one and the same agreement. 
 Section 22. Arbitration, Service, Venue, Jury
Trial. Any unresolved dispute or controversy arising or in connection with this agreement shall be settled exclusively by arbitration, conducted before a single arbitrator in Rockville, Maryland in accordance with the rules of the American
Arbitration Association then in effect. The arbitrators shall not have the authority to add to, detract from, or modify any provision hereof nor to award punitive damages to any injured party. The arbitrators shall have the authority to order
back-pay, severance compensation, vesting of options (or cash compensation in lieu of vesting of options), reimbursement of costs, including those incurred to enforce this agreement, and interest thereon in the event the arbitrators determine that
employee was terminated without disability or good cause, as defined in Section 6, or that the company has otherwise materially breached this agreement. A decision by a majority of the arbitration panel shall be final and binding. Judgment may
be entered on the arbitrators’ award in any court having jurisdiction. Nothing in this section shall effect or limit the Company’s right to obtain any type of relief available to it in a court of law as a result of the Employee’s
breach of Sections 7 and 8. In the event either party seeks such relief, the parties hereby (i) submit to the exclusive jurisdiction of the courts of the State of Maryland and the U.S. federal courts in the State of Maryland,
(ii) consent that any such action or proceeding may be brought in any such venue, (iii) waive any objection that any such action or proceeding, if brought in any such venue, was brought in any inconvenient forum and agree not to claim the
same, (iv) agree that any judgment in any such action or proceeding may be enforced in other jurisdictions, (v) consent to service of process at the address set forth in Section 17 herein, and (vi) to the extent applicable, waive
their respective rights to a jury trial of any claim or cause of action based on or arising out of this agreement or any dealings between them relating to the subject matter of this agreement. 
 Section 23. Section 409A. The parties intend that this Agreement and the benefits provided hereunder be interpreted and
construed to comply with Section 409A of the Code to the extent applicable thereto. Notwithstanding any provision of the Agreement to the contrary, the Agreement shall be interpreted and construed consistent with this intent, provided that the

  

 16 

 
Company shall not be required to assume any increased economic burden in connection therewith. Although the Company intends to administer the Agreement so that it will comply with the
requirements of Section 409A of the Code, the Company does not represent or warrant that the Agreement will comply with Section 409A of the Code or any other provision of federal, state, local, or non-United States law. Except as otherwise
provided in Section 6(g)(i)(C) with respect to any excise tax imposed under Section 4999 of the Code, either the Company, nor its affiliates, nor their respective directors, officers, employees or advisers shall be liable to the Executive
(or any other individual claiming a benefit through the Executive) for any tax, interest, or penalties the Executive may owe as a result of compensation paid under the Agreement, and the Company and its affiliates shall have no obligation to
indemnify or otherwise protect the Executive from the obligation to pay any taxes pursuant to Section 409A of the Code. 
  

 17 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

  

					
	MHI HOSPITALITY CORPORATION
		
	By:	 	/s/ David R. Folsom
		 	Name:	 	David R. Folsom
		 	Title:	 	Chief Operating Officer
		
		 	Executive
		
		 	/s/ William J. Zaiser
		 	William J. Zaiser

  

 18Change-in-Control Severance Agreement

 Exhibit 10.1 
 PRIVILEGED AND CONFIDENTIAL 
 February 3, 2010

 TECO Energy, Inc. (the “Company”) considers it essential to the best interests of its stockholders to foster the
continuous employment of key management personnel. In this connection, the Board of Directors of the Company (the “Board”) recognizes that, as is the case with many publicly held corporations, the possibility of a change in control may
exist and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of key management personnel to the detriment of the Company and its stockholders. 
 The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members
of the Company’s management, including yourself, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a change in control of the Company. 
 In order to induce you to remain in the employ of the Company and in consideration of your agreement set forth in Subsection 2(iii) hereof,
the Company agrees that you shall receive the severance benefits set forth in this letter agreement (the “Agreement”) in the event your employment with the Company is terminated subsequent to a “change in control of the Company”
(as defined in Section 2(i) hereof) (or is deemed to be terminated subsequent to a change in control of the Company in accordance with the second sentence of Section 3 hereof) under the circumstances described below. This Agreement amends
and restates the letter agreement dated November 1, 2007 between you and the Company (the “Prior Agreement”). 
 1. Term of Agreement. This Agreement shall commence on the date hereof and shall continue in effect through June 30, 2012; provided, however, that commencing on July 1, 2011 and each July 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless, not later than March 31 of such year, the Company shall have given notice that it does not wish to extend this Agreement (provided that no such notice may be given during
the pendency of or within two years following a potential change in control of the Company, as defined in Section 2(ii) hereof); provided, further, if a change in control of the Company shall have occurred during the original or extended term
of this Agreement, this Agreement shall continue in effect for a period of thirty-six (36) months beyond the month in which such change in control occurred. 
 2. Change in Control; Potential Change in Control. (i) Except as provided in the second sentence of Section 3 hereof, no benefits shall be payable hereunder unless there shall have been a
change in control of the Company, as set forth below. For purposes of this Agreement, a “change in control of the Company” shall mean a change in control 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 shall 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 stockholders 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 stockholders 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; or 
 (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

 (D) the stockholders 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) For
purposes of this Agreement, a “potential change in control of the Company” shall be deemed to have occurred if: 
 (A) the Company enters into an agreement, the consummation of which would result in the occurrence of a change in control of the Company; 
  

 Page 2 

 (B) any person (as hereinabove defined), including the Company, publicly
announces an intention to take or consider taking actions which if consummated would constitute a change in control of the Company; 
 (C) any person (as hereinabove defined), 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 stockholders of the Company in substantially the same proportions as their ownership of stock of the Company (a) is or becomes the beneficial owner, (b) discloses directly or indirectly to the Company or publicly a plan
or intention to become the beneficial owner, or (c) makes a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to securities to become the beneficial owner, directly or indirectly, of securities
representing 9.9% or more of the combined voting power of the outstanding voting securities of the Company; or 
 (D) the Board adopts a resolution to the effect that, for purposes of this Agreement, a potential change in control of the Company has occurred. 
 (iii) You agree that, subject to the terms and conditions of this Agreement, in the event of a potential change in control of the Company during the term of this Agreement (as determined under
Section 1 hereof), you will remain in the employ of the Company until the earliest of (a) a date which is one (1) year from the occurrence of such potential change in control of the Company, (b) the termination by you of your
employment after you attain “normal retirement age” under the provisions of the TECO Energy Group Retirement Plan or any successor thereto (the “Retirement Plan”) or by reason of death or Disability as defined in
Section 3(i), or (c) the date of the occurrence of a change in control of the Company. 
 3. Termination Following
Change in Control. If your employment is terminated following a change in control of the Company and during the term of this Agreement, other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by you
without Good Reason, then the Company shall pay you the amounts, and provide you the benefits, described in Section 4(iii) hereof. For purposes of this Agreement, your employment shall be deemed to have been terminated following a change in
control of the Company by the Company without Cause or by you with Good Reason, if (i) your employment is terminated by the Company without Cause prior to a change in control of the Company (whether or not such a change in control ever occurs)
and such termination was at the request or direction of a “person” (as hereinabove defined) who has entered into an agreement with the Company the consummation of which would constitute a change in control of the Company, (ii) you
terminate your 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) your employment is terminated by the Company without Cause or by you 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

  

 Page 3 

 
control ever occurs). Notwithstanding anything in this Agreement to the contrary, you shall not be entitled to the benefits provided in Section 4 hereof unless you have incurred a
“separation from service” under Section 409A of the Code. 
 (i) Disability. If, as a result of your
incapacity due to physical or mental illness, you shall have been absent from the full-time performance of your duties with the Company for six (6) consecutive months, and within thirty (30) days after written notice of termination is
given you shall not have returned to the full-time performance of your duties, your employment may be terminated for “Disability”. 
 (ii) Cause. Termination by the Company of your employment for “Cause” shall mean termination upon (A) the willful and continued failure by you to substantially perform your duties
with the Company (other than any such failure resulting from your incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination by you for Good Reason, as defined in Subsections
3(iv) and 3(iii), respectively) after a written demand for substantial performance is delivered to you by the Board, which demand specifically identifies the manner in which the Board believes that you have not substantially performed your duties,
or (B) the willful engaging by you 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 your part shall be deemed “willful”
unless done, or omitted to be done, by you not in good faith and without reasonable belief that your action or omission was in the best interest of the Company. Notwithstanding the foregoing, you shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to you 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 you and an opportunity for you, together with your counsel, to be heard before the Board), finding that in the good faith opinion of the Board you were guilty of conduct set forth above in this Subsection and
specifying the particulars thereof in detail. 
 (iii) Good Reason. “Good Reason” for termination by you of
your employment shall mean the occurrence (without your 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 3
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 you of any duties inconsistent (except in
the nature of a promotion) with the position in the Company that you held immediately prior to the change in control of the Company or a substantial adverse alteration in the nature or status of your position or responsibilities or the conditions of
your employment from those in effect immediately prior to the change in control of the Company; 
  

 Page 4 

 (B) a reduction by the Company in your 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 you to be
based more than fifty (50) miles from the Company’s offices at which you 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 your present business travel obligations; 
 (D) the failure by the Company to pay
to you any portion of your 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 you 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 your 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 your 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 you with benefits substantially similar to
those enjoyed by you under any of the Company’s pension, life insurance, medical, health and accident, or disability plans in which you were participating at the time of the change in control of the Company, the taking of any action by the
Company which would directly or indirectly materially reduce any of such benefits or deprive you of any material fringe benefit enjoyed by you at the time of the change in control of the Company, or the failure by the Company to provide you with the
number of paid vacation days to which you are entitled on the basis of your 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 your employment which
is not effected pursuant to a Notice of Termination satisfying the requirements of Subsection (iv) below (and, if applicable, the requirements of Subsection (ii) above), which purported termination shall not be effective for purposes of
this Agreement. 
  

 Page 5 

 Your right to terminate your employment pursuant to this Subsection shall not be affected by your incapacity
due to physical or mental illness. Your continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder. 
 (iv) Notice of Termination. Any purported termination of your employment by the Company or by you shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section 7 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. 
 (v) Date of Termination, Etc. “Date of Termination” shall mean (A) if your employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that you shall not have returned to the full-time performance of your duties during such thirty (30) day period), and (B) if your employment is terminated pursuant to
Subsection (ii) or (iii) above or for any other reason (other than Disability), the date specified in the Notice of Termination (which, in the case of a termination pursuant to Subsection (ii) above shall not be less than thirty
(30) days, and in the case of a termination pursuant to Subsection (iii) above shall not be less than fifteen (15) nor more than sixty (60) days, respectively, from the date such Notice of Termination is given); provided that if
within fifteen (15) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this proviso), the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties or by a binding arbitration award; and provided further that the Date
of Termination shall be extended by a notice of dispute given by you only if such notice is given in good faith and you pursue the resolution of such dispute with reasonable diligence. Notwithstanding the pendency of any such dispute, the Company
will continue to pay you your full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, base salary) and continue you as a participant in all compensation, benefit and insurance plans in which
you were participating when the notice giving rise to the dispute was given, until the dispute is finally resolved in accordance with this Subsection. Amounts paid under this Subsection are in addition to all other amounts due under this Agreement
and shall not be offset against or reduce any other amounts due under this Agreement. Notwithstanding anything in this Agreement to the contrary, you shall not be entitled to the benefits provided in Section 4 hereof unless you have incurred a
“separation from service” under Code Section 409A. 
  

 Page 6 

 4. Compensation Upon Termination or During Disability. Following a change in control
of the Company, as defined by Subsection 2(i), or prior to a change in control of the Company under the circumstances described in the second sentence of Section 3 hereof, upon termination of your employment or during a period of disability you
shall be entitled to the following benefits: 
 (i) During any period that you fail to perform your full-time duties with the
Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company’s
disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(i) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits
shall be determined under the Company’s retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs. 
 (ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this
Agreement. 
 (iii) If your employment by the Company terminates in a manner entitling you to benefits under this Section
pursuant to Section 3 hereof, then you shall be entitled to the benefits provided below: 
 (A) the Company
shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such
payments are due, except as otherwise provided below; 
 (B) in lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the Company shall pay as severance pay to you a lump sum severance payment (together with the payments provided in paragraphs (C) and (D) below, the “Severance Payments”) equal to
three (3) times the sum of (1) the greater of (a) your annual rate of base salary in effect on the Date of Termination or (b) your annual rate of base salary in effect immediately prior to the change in control of the Company and
(2) your highest annual incentive target award in effect at any time during the 36 months prior to the Date of Termination; 
 (C) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, disability, accident and health insurance benefits substantially similar to those
which you are receiving immediately prior to the Notice of Termination. Benefits otherwise receivable by you pursuant to this Subsection 4(iii)(D) shall be reduced to the extent comparable benefits are actually received by you from a subsequent
employer during the thirty-six (36) month period following your termination, and any such benefits actually received by you shall be reported to the Company. The period during which benefits are provided under this Section shall satisfy the
Company’s obligations to provide continuation coverage under Section 4980B of the Code; and 
  

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 (D) in addition to the retirement benefits to which you are entitled under
the Retirement Plan, any supplemental retirement or excess benefit plan maintained by TECO or any of its subsidiaries or any successor plans thereto (hereinafter collectively referred to as the “Pension Plans”), the Company shall pay you
in cash a lump sum equal to the excess of (a) the actuarial equivalent (computed at your date of termination) of the retirement pension (taking into account any early retirement subsidies and post-retirement surviving spouse benefits associated
therewith and determined as an annuity payable in the normal form under the Pension Plans commencing at your normal retirement age under the Retirement Plan or any earlier date, but in no event earlier than the third anniversary of the Date of
Termination, whichever annuity the actuarial equivalent of which is greatest) which you would have accrued under the terms of the Pension Plans (without regard to the limitations imposed by Section 401(a)(17) of the Code, or any amendment to
the Pension Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully
vested thereunder and had continued to be a participant in each of the Pension Plans for thirty-six (36) additional months and as if you had accumulated thirty-six (36) additional months of compensation (for purposes of determining your
pension benefits thereunder), each in an amount equal to the sum of the amounts determined under clauses (1) and (2) of Section 4(iii)(B) hereof over (b) the actuarial equivalent (computed at your date of termination) of the
vested retirement pension (taking into account any early retirement subsidies and post-retirement surviving spouse benefits associated therewith and determined as an annuity payable in the normal form under the Pension Plans commencing at your
normal retirement age under the Retirement Plan or any earlier date, but in no event earlier than the Date of Termination, whichever annuity the actuarial equivalent of which is greatest) which you had then accrued pursuant to the provisions of the
Pension Plans. For purposes of this Subsection, “actuarial equivalent” shall be determined using the same actuarial assumptions utilized in determining the amount of alternate forms of benefits under the Retirement Plan immediately prior
to the change in control of the Company. 
 (iv) Except as otherwise specifically provided in paragraph (C) hereof, the
payments provided for in Subsection (iii) shall be made not later than the fifth day following the Date of Termination; provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Company
shall pay to you on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to you payable on the fifth day after demand therefor by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). Notwithstanding anything in this

  

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Agreement to the contrary, to the extent required by Section 409A of the Code, payment of the amounts payable under this Agreement shall commence no earlier than the earlier of (i) the
first day of the first month commencing at least six (6) months following your separation from service with the Company (within the meaning of Section 409A) or (ii) your date of death. Any amount the payment of which is delayed by
application of the preceding sentence shall be paid as soon as possible following the expiration of such six month period and shall be paid with interest (at an interest rate equal to the rate used to calculate actuarial equivalence in the Pension
Plans) from the date on which such amount would otherwise have been paid but for the application of the preceding sentence to the date such amount is actually paid. To the extent you are terminated (i) following a change in control of the
Company but prior to a change in ownership or control of the Company within the meaning of Section 409A of the Code or (ii) prior to a change in control of the Company in a manner described in the second sentence of Section 3, to the
extent required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, amounts payable to you hereunder, to the extent not in excess of the amount that you would have received under any other pre-change in control
severance plan or arrangement with the Company had such plan or arrangement been applicable, shall be paid at the time and in the manner provided by such plan or arrangement and the remainder shall be paid to you in accordance with the provisions of
this Section 4; 
 (v) You shall not be required to mitigate the amount of any payment provided for in this Section 4
by seeking other employment or otherwise, nor, except as specifically provided in Sections 4(iii)(C) above, shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of
employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by you to the Company, or otherwise; and 
 (vi) the Company shall also pay to you all legal fees and expenses incurred by you as a result of or in connection with such termination, including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined by arbitration, in
accordance with Section 11 of this Agreement, to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”), to any payment or benefit provided hereunder. Such payments shall be made within five (5) business days after delivery of your written requests for payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require; provided, however, that in no event shall any such payments be made later than the last day of your taxable year following the taxable year in which the fee or expense was incurred. 
 5. Limit on Severance Payments. In the event that (i) any payment or benefit received or to be received by you in connection
with a change in control of the Company or the termination of

  

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your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control or any person
affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would not be deductible (in whole or part) as a result of section 280G of the Code by the Company, an affiliate or other person making
such payment or providing such benefit and (ii) the net amount retained by you, after paying the excise tax imposed by section 4999 of the Code and any federal, state and local income and employment taxes on the Total Payments, would not exceed
the net amount that would have been retained by you after the reduction of the Severance Payments as set forth below and the payment of any federal, state and local income and employment taxes on the Total Payments as so reduced, the Severance
Payments shall be reduced until no portion of the Total Payments is not deductible, or the Severance Payments are reduced to zero. For purposes of this limitation (a) no portion of the Total Payments the receipt or enjoyment of which you shall
have effectively waived in writing prior to the date of payment of the Severance Payments shall be taken into account, (b) no portion of the Total Payments shall be taken into account which in the opinion of tax counsel selected by the
Company’s independent auditors and acceptable to you does not constitute a “parachute payment” within the meaning of section 280G(b)(2) of the Code, (c) the Severance Payments shall be reduced only to the extent necessary so that
the Total Payments (other than those referred to in clauses (a) or (b)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of section 280G(b)(4) of the Code or are otherwise not subject to
disallowance as deductions, in the opinion of the tax counsel referred to in clause (b); and (d) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Company’s
independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the income taxes on the Total Payments, you shall be deemed to pay federal income tax at the highest marginal rate of
federal income taxation in the calendar year in which the Total Payments are to be made and local income taxes at the highest marginal rate of taxation in the state and locality of your residence on the Date of Termination, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such state and local taxes. 
 6. Successors;
Binding Agreement. 
 (i) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from the Company in the
same amount and on the same terms as you would be entitled to hereunder if you terminate your employment for Good Reason following a change in control of the Company, except that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, or otherwise. 
  

 Page 10 

 (ii) This Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there is no such designee, to your estate. 
 7. Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or
mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of
the Board with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

 8. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by you and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Florida, without giving effect to the conflicts of law principles thereof. All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections.
Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law. The obligations of the Company under Section 4 shall survive the expiration of the term of this Agreement.

 9. Validity. The invalidity or unenforceability or any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in full force and effect. 
 10.
Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 
 11. Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by
arbitration conducted before a panel of three arbitrators in

  

 Page 11 

 
the State of Florida in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction;
provided, however, that you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. 
 12. Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained
herein and during the term of the Agreement supersedes the provisions of all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of
any party hereto with respect to the subject matter hereof, including the Prior Agreement. 
 [Remainder of page intentionally
left blank.] 
  

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 13. Effective Date. This Agreement shall become effective as of the date set forth
above. If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject. 
  

			
	Sincerely,
	TECO Energy, Inc.
		
	By:	 	  

	Name:	 	Clinton E. Childress
	Title:	 	Chief Human Resources Officer

  

	
	Agreed to this 4th day
	of February, 2010.
	
	  

	Sandra W. Callahan

  

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