Document:

Annual Incentive Compensation Plan

 Exhibit 10.4 
  

 
TECO ENERGY, INC. 
 ANNUAL INCENTIVE COMPENSATION PLAN 
 REVISED AS OF JANUARY 31, 2007 
  

 Exhibit 10.4 
 ANNUAL INCENTIVE COMPENSATION PLAN 
 BASIC PLAN CONCEPT 
 The Annual Incentive Compensation Plan provides a consistent framework for applying annual incentive pay to officers of TECO Energy and each of its operating units. Each
participant is assigned a target award amount, expressed as a percentage of annual salary, which will represent an appropriate incentive payment when performance is at the targeted level. Smaller awards may be earned when performance is below
target, and larger awards may be earned when performance exceeds target. 
 Performance for each participant will be measured, in part, against a combination
of one or more quantifiable profit and operational goals. These goals will be set at the corporate and operating levels, and most participants will have a portion of their awards related to each. The remaining portion of each participant’s
performance that is not measured by the quantified goals mentioned above will be evaluated on a subjective basis considering overall contribution level and achievement of other individual goals. Each participant will have a “Business Plan”
goal, which will reflect the participant’s contribution to (i) achieving initiatives in support of the business plan and (ii) overcoming any “business challenges” by: (a) mitigating the impact of unexpected adverse
business or regulatory developments on the business unit or (b) enhancing profitability or capacity for profit, through effective management initiatives beyond those in the business plan. 
 ELIGIBILITY 
 All officers that are approved by the Chief Executive
Officer of TECO Energy and the Compensation Committee of the TECO Energy Board (the “Compensation Committee”) will be eligible to participate. 
 TARGET AWARD LEVELS 
 Target award levels are established at a level that, when combined with each participant’s base salary, will
provide a fully competitive total cash compensation opportunity. The incentive portion of the total compensation opportunity reflects compensation “at risk” which is directly related to performance and results achieved. Generally, the
portion of compensation “at risk” (i.e., the target award level) is influenced by the level of the participant’s accountability for contributing to bottom-line results, the degree of influence the participant has over results and
competitive practice. 
 ESTABLISHING PERFORMANCE GOALS AND WEIGHTINGS 
 For each plan year, profit, growth and/or operational effectiveness goals will be established for TECO Energy and each of its operating units. Financial goals may measure performance relative to other companies over
periods of one-year or longer. 
 For each financial goal the target level of performance, as well as threshold and maximum levels, will be approved by the
Compensation Committee. Threshold performance represents the minimum performance that still warrants incentive recognition for that particular goal (paid at 50 percent of the 

 
target award level), and maximum performance represents the highest level likely to be attained (paid at 150 percent of the target award level for all goals,
except the Business Plan goal which can be paid up to 200 percent). Regardless of the degree of achievement of each established goal, the payout to all participants will be zero if TECO Energy’s income threshold set for that year by the
Compensation Committee is not achieved. 
 A determination will be made for each participant regarding their portion of the award that will be based on
corporate, operating unit or individual performance. Generally, the weightings among these three measurement groups will vary by organizational level. 
 APPLICATION OF DISCRETION 
 While not anticipated to be a common occurrence, the Compensation Committee may occasionally decide that the plan
formula would unduly penalize or reward management. In such cases, award funds may be increased or decreased to better meet the plan’s intent of relating rewards to management performance. 
 AWARD DETERMINATION 
 At the end of each plan year, a four-step
process will be followed in determining actual incentive awards. 
  

	Step    1:	The actual degree of achievement for each goal at the corporate, operating unit and individual level is determined. Levels of achievement can range up to 200 percent for the
Business Plan goal and up to 150 percent for all other goals. 

  

	Step    2:	Corporate, operating unit and individual performance factors are determined by multiplying levels of goal achievement by the weightings assigned to each goal.

  

	Step    3:	The total of all performance factors is multiplied by the target award, producing the calculated award. 

  

	Step    4:	The calculated award may be adjusted up or down by the Compensation Committee with respect to the senior officers and by the Chief Executive Officer of TECO Energy with respect to
other officers, based on the participant’s total performance during the plan year. The actual award, as so adjusted, may not exceed 150 percent of the target award level and will be approved by the Compensation Committee.

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

 OTHER CONSIDERATIONS 
 For any year in which a participant’s employment is terminated or an officer first becomes eligible for participation in the plan, whether any incentive award shall be granted for that year and the amount of any such award shall be
determined by the Compensation Committee with respect to senior officers and by the Chief Executive Officer of TECO Energy with respect to other officers. Any such determination by the Chief Executive Officer will be reported to the Compensation
Committee at its next meeting. 
 Notwithstanding the foregoing, for any year in which a participant’s employment terminates for any reason following a
change in control of TECO Energy, as defined in the TECO Energy 2004 Equity Incentive Plan (or its successor), such participant shall be entitled to receive an incentive award equal to (a) the number of days employed during that year divided by
365 multiplied by (b) the greater of (i) the participant’s target award for the year in which the change in control occurred or (ii) the incentive award actually paid to the participant with respect to the year immediately
preceding the year in which the termination of employment occurred.2004 Equity Incentive Plan

 Exhibit 10.12 
 TECO ENERGY, INC. 
 2004 EQUITY INCENTIVE PLAN 
 Restricted Stock Agreement 
 TECO Energy, Inc. (the “Company”) and ___________________________ (the “Grantee”) have entered into this Restricted Stock Agreement (the “Agreement”) dated ___________ under the Company's
2004 Equity Incentive Plan (the “Plan”). Capitalized terms not otherwise defined herein have the meanings given to them in the Plan. 
 1. Grant of Restricted Stock. Pursuant to the Plan and subject to the terms and conditions set forth in this Agreement, the Company hereby grants, issues and delivers to the Grantee ____________ shares of its
Common Stock (the “Restricted Stock”). 
 2. Restrictions on Stock. Until the restrictions terminate under
Section 3, unless otherwise determined by the Committee: 
 (a) the Restricted Stock may not be sold, assigned, pledged
or transferred by the Grantee; and 
 (b) all shares of Restricted Stock will be forfeited and returned to the Company if the
Grantee ceases to be an employee of the Company or any business entity in which the Company owns directly or indirectly 50% or more of the total voting power or has a significant financial interest as determined by the Committee (an
“Affiliate”). 
 3. Termination of Restrictions. The restrictions on all shares of Restricted Stock will terminate on
the earliest to occur of the following events: 
 (a) the Grantee’s death; 
 (b) the termination of Grantee’s employment with the Company or any Affiliate because of a disability that would entitle the Grantee
to benefits under the long-term disability benefits program of the Company for which the Grantee is eligible, as determined by the Committee; 
 (c) the termination by the Company or any Affiliate of Grantee’s employment other than for Cause as determined by the Committee. “Cause” means (i) willful and continued failure of the Grantee to
substantially perform his duties with the Company or such Affiliate (other than by reason of physical or mental illness) after written demand specifically identifying such failure is given to the Grantee by the Company, or (ii) willful conduct
by the Grantee that is demonstrably and materially injurious to the Company. For purposes of this subsection, “willful” conduct requires an act, or failure to act, that is not in good faith and that is without reasonable belief that the
action or omission was in the best interest of the Company or the Affiliate; 

 (d) upon a resignation of employment in which the Committee determines in its sole
discretion that the removal of restrictions is appropriate; 
 (e) upon a Change in Control. For purposes of this Agreement, a
“Change in Control” means a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 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: 
 (1) 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 shareholders 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; 
 (2) during any period of twenty-four (24) consecutive months (not including any period prior to the date
of this Agreement), individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a
transaction described in subsections (1), (3) or (4) of this Section 3(e)) whose election by the Board of Directors of the Company or nomination for election by the shareholders of the Company was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof;

 (3) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with
any other corporation, 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 65% 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

 (4) the shareholders 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; or 
 (f) the third anniversary of the
date of this Agreement. 
 4. Rights as Shareholder. Subject to the restrictions and other limitations and conditions provided in this
Agreement, the Grantee as owner of the Restricted Stock will have all the rights of a 

  

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shareholder, including but not limited to the right to receive all dividends paid on, and the right to vote, such Restricted Stock. 
 5. Stock Certificates. Each certificate issued for shares of Restricted Stock will be registered in the name of the Grantee and deposited by the
Grantee with the Company and will bear a legend in substantially the following form: 
 THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES
OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS, CONDITIONS AND RESTRICTIONS (INCLUDING RESTRICTIONS ON TRANSFER AND FORFEITURE PROVISIONS) CONTAINED IN AN AGREEMENT BETWEEN THE REGISTERED OWNER AND TECO ENERGY, INC. A COPY OF SUCH AGREEMENT
WILL BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST AND WITHOUT CHARGE. 
 Upon the termination of the restrictions
imposed under this Agreement as to any shares of Restricted Stock deposited with the Company hereunder, the Company will return to the Grantee (or to such Grantee’s legal representative, beneficiary or heir) certificates, without such legend,
for such shares. 
 6. Adjustment of Terms. In the event of corporate transactions affecting the Company’s outstanding Common
Stock, the Committee will equitably adjust the number and kind of shares subject to this Agreement to the extent provided by the Plan. 
 7.
Notice of Election Under Section 83(b). If the Grantee makes an election under Section 83(b) of the Internal Revenue Code of 1986, as amended, he or she will provide a copy thereof to the Company within thirty days of the filing of
such election with the Internal Revenue Service. 
 8. Withholding Taxes. The Grantee will pay to the Company, or make provision
satisfactory to the Committee for payment of, any taxes required by law to be withheld in respect of the Restricted Stock no later than the date of the event creating the tax liability. In the Committee’s discretion, such tax obligations may be
paid in whole or in part in shares of Common Stock, including the Restricted Stock, valued at Fair Market Value on the date of delivery (which is defined as the average of the high and low trading price on the New York Stock Exchange on the previous
trading day). The Company and its Affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Grantee. 
 9. The Committee. Any determination by the Committee under, or interpretation of the terms of, this Agreement or the Plan will be final and
binding on the Grantee. 
 10. Limitation of Rights. The Grantee will have no right to continued employment by virtue of this grant of
Restricted Stock. 
 11. Amendment. The Company may amend, modify or terminate this Agreement, including substituting another Award of
the same or a different type and changing the date of 

  

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realization, provided that the Grantee's consent to such action will be required unless the action, taking into account any related action, would not
adversely affect the Grantee. 
 12. Governing Law. This Agreement will be governed by and interpreted in accordance with the laws of
Florida. 
  

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

		
		 	  
		 	  

  

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