Exhibit 10.1
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR ROBERT D. FAGAN
SECTION 1. PURPOSE AND EFFECTIVE DATE
The purpose of this plan is to provide Robert D. Fagan, Chief
Executive Officer of TECO Energy, Inc. with additional retirement
income by supplementing the retirement benefits provided under the
retirement plan. The plan is effective as of May 24, 1999.
SECTION 2. DEFINITIONS
This section contains definitions of terms used in the plan.
Where the context so requires, the singular includes the plural,
and the plural includes the singular.
2.1 Annual earnings will have the same meaning as in the
retirement plan, except that the same will be determined without
regard to (a) any dollar limitation on such annual earnings that
may be imposed under the retirement plan or (b) any reduction in
taxable income as a result of voluntary salary reduction deferrals
under the TECO Energy Group Retirement Savings Excess Benefit Plan.
2.2 Average annual earnings of Mr. Fagan as of any date of
reference means the average of his annual earnings during the 36
consecutive months of active employment preceding the date of
reference. Bonuses are included as compensation for the period in
which paid, provided that if more than three regular annual bonuses
are paid in any 36 consecutive month period, only the largest three
bonuses will be counted.
2.3 Board means the Board of Directors of TECO Energy.
2.4 C o m mittee means the retirement plan committee as
constituted under the retirement plan.
2.5 TECO Energy means TECO Energy, Inc. and any successor to
all or a major portion of its assets or business which assumes the
obligations of TECO Energy, Inc. under this plan.
2.6 Disability income plan means the TECO Energy Group
Disability Income Plan, as amended from time to time.
2.7 Plan means the TECO Energy Group Supplemental Executive
Retirement Plan for Robert D. Fagan, as set forth in this plan
instrument, and as it may be amended from time to time.
2.8 Retirement means termination of Mr. Fagan s employment
with TECO Energy by Mr. Fagan or TECO Energy for any reason.
2.9 Retirement plan means the TECO Energy Group Retirement
Plan, as amended from time to time.
2.10 Service will have the same meaning as plan service in
the retirement plan.
2.11 Social security benefit of Mr. Fagan as of any date of
reference (the computation date ) means the primary insurance
amount to which he is or would be entitled, payable under Title II
of the Social Security Act as in effect on such date, based on the
assumptions: (a) that no changes in the benefit levels payable or
the wage base under Title II occur after the computation date; (b)
that, if the computation date falls before his 63 birthday, his
annual earnings during the calendar year in which the computation
date falls and during any subsequent calendar year before the
calendar year in which his 63 birthday falls is zero; (c) that
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payment of his primary insurance amount begins for the month after
he reaches age 63, or his retirement date if later, without
reduction or delay because of future gainful employment or delay in
applying for benefits; and (d) that his earnings for calendar years
before the calendar year in which the computation date falls will
be determined using his actual earnings history if available, and
otherwise by applying a six percent retrospective salary scale to
his rate of annual earnings in effect on the computation date. The
social security benefit of Mr. Fagan if he retires after his 66
birthday will include any delayed retirement credit.
2.12 Survivor income plan means the TECO Energy Group Survivor
Income Plan, as amended from time to time.
SECTION 3. RETIREMENT BENEFITS
3.1 Amount. Subject to the reductions in Section 6.1 below,
Mr. Fagan will receive a supplemental monthly retirement benefit
equal to one-twelfth of the greater of (a) (1) the sum of (A) 20
percent and (B) four percent multiplied by his years of service (or
portions thereof), multiplied by (2) his average annual earnings,
up to a maximum benefit of 60 percent of his average earnings (60
percent is equal to 20 percent plus four percent multiplied by a
maximum of ten years of service), and (b) $160,000. Mr. Fagan s
retirement benefit hereunder will be calculated using his years of
service (or portions thereof) and average annual earnings as of his
actual date of retirement.
3.2 Form of Payment.
(a) Normal form of retirement benefits. The normal form
of retirement benefit payable to Mr. Fagan under the plan is a life
annuity. Benefits payable in the normal form will begin on the
first day of the month coinciding with or next following the date
of Mr. Fagan s retirement.
(b) Optional lump sum benefit. In lieu of the normal
form of benefit, Mr. Fagan may elect to receive payment of his
benefit in the form of a commuted single sum payment that is the
actuarial equivalent of the normal form of benefit (including the
value of the post-retirement surviving spouse benefit under Section
4.2(c)). If Mr. Fagan elects to receive a lump sum payment, such
payment will be made on the first day of the month coinciding with
or next following the date Mr. Fagan s employment terminates.
Actuarial equivalence will be based on the actuarial assumptions
specified from time to time in the retirement plan for lump sum
payments. Mr. Fagan s election to receive a lump sum payment will
be effective only with respect to a retirement occurring at least
12 months after the date Mr. Fagan submits the election, provided
that elections submitted on or before June 30, 1999 will be
immediately effective.
SECTION 4. SURVIVING SPOUSE BENEFIT
4.1 Eligibility. Mr. Fagan s surviving spouse will receive
the surviving spouse benefit if Mr. Fagan and his spouse were
married to each other for at least the 12 months preceding Mr.
Fagan s death and, in the case of Mr. Fagan s death after
retirement, Mr. Fagan and his spouse were married to each other on
Mr. Fagan s date of retirement.
4.2 Amount of surviving spouse benefit. Subject to the
reductions described in Section 6.2 below, the benefit provided
under the plan to Mr. Fagan s surviving spouse will be determined
as follows:
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(a) Pre-retirement before age 63. If Mr. Fagan dies
during employment with TECO Energy and before his 63rd birthday,
his surviving spouse will receive a monthly survivor income payment
equal to 50 percent of his monthly projected retirement benefit.
Mr. Fagan s monthly projected retirement benefit is the monthly
benefit he would have received if he had retired at age 63 under
Section 3.1 calculated using his average annual earnings determined
as of his date of death.
(b) Pre-retirement on or after age 63. If Mr. Fagan
dies during employment with TECO Energy on or after his 63rd
birthday, his surviving spouse will receive a monthly survivor
income payment equal to 50 percent of his monthly retirement
benefit earned under Section 3.1 using his years of service (or
portions thereof) and his average annual earnings as of his date of
death.
(c) Post-retirement. If Mr. Fagan dies on or after the
date of his retirement, his surviving spouse will receive a monthly
survivor income payment equal to 50 percent of the monthly benefit
payment he was receiving at his death (or would have received if he
had survived until the first payment date).
4.3 Form and time of surviving spouse benefit. Surviving
spouse benefits under this Section 4 will be payable in the form of
a life annuity to the surviving spouse. Benefit payments will
begin on the first day of the month coinciding with or next
following the date of Mr. Fagan s death.
4.4 Death benefit where lump sum paid. If Mr. Fagan received
a lump sum payment of his benefit under Section 3.2(b), no
surviving spouse benefit or other death benefit will be payable
under the plan to any person.
SECTION 5. DISABILITY
5.1 If Mr. Fagan suffers a total disability (as defined in
the disability income plan) before his 63rd birthday, he will
continue to be credited with service as if he were actively
employed by TECO Energy during his period of total disability. Mr.
Fagan may not receive benefits under this plan at any time when he
is receiving disability income payments under the disability income
plan. Benefits under this plan will begin when payments cease
under the disability income plan.
5.2 Mr. Fagan s disability date is his last day of work for
TECO Energy before becoming unable to continue working because of
his total disability. A period of total disability of Mr. Fagan
will begin on his disability date and will end on the earlier of
the last day of the month in which his final disability income
payment is due under the disability income plan or on the date he
retires hereunder and starts receiving benefit payments.
5.3 If Mr. Fagan does not return to active service with TECO
Energy after suffering a total disability, his retirement benefits
under Section 3 will be calculated using his average annual
earnings as of his disability date, his total service including
service credited under Section 5.1 above, and his primary social
security benefit as of his date of disability.
5.4 If Mr. Fagan dies while disabled, his surviving spouse
will, if eligible, receive the pre-retirement surviving spouse
benefit determined under Section 4.2(a) or (b).
SECTION 6. OFFSET FOR OTHER PAYMENTS
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6.1 Mr. Fagan s retirement benefit will be reduced (but not
below zero) by the following payments, with such reductions
starting when such payments are assumed to begin: (a) 100 percent
of the social security benefit of Mr. Fagan assuming such benefit
begins on the later of his 63rd birthday or the date of his actual
retirement and (b) the amount of his benefit payments under the
retirement plan and any tax-qualified or nonqualified defined
benefit retirement plan of former employers of Mr. Fagan (converted
in all cases to a life annuity if such payments are in a form other
than a life annuity, using the actuarial assumptions in the TECO
Energy retirement plan), assuming such payments begin on the later
of the earliest date on which he could begin receiving payments
from such plan or the date of his actual retirement.
6.2 The benefit of Mr. Fagan s surviving spouse will be
reduced (but not below zero) by the following payments to her: (a)
payments under the survivor income plan, and (b) payments under the
retirement plan and any tax-qualified or nonqualified defined
benefit retirement plans of former employers of Mr. Fagan.
SECTION 7. BENEFITS NOT CURRENTLY FUNDED
7.1 Nothing in this plan will be construed to create a trust
or to obligate TECO Energy or any other employer to segregate a
fund, purchase an insurance contract, or in any other way currently
to fund the future payment of any benefits hereunder, nor will
anything herein be construed to give Mr. Fagan or any other person
rights to any specific assets of TECO Energy or of any other
employer or entity.
7.2 Notwithstanding Section 7.1, TECO Energy has established
a grantor trust of which it is treated as the owner under Section
671 of the Internal Revenue Code to provide for the payment of
benefits hereunder.
SECTION 8. ADMINISTRATION
The plan will be administered by the committee, which will
have full power and authority to construe, interpret and administer
the plan. Decisions of the committee will be final and binding on
all persons. The committee may, in its discretion, adopt, amend
and rescind rules and regulations relating to the administration of
the plan.
SECTION 9. RIGHTS NON-ASSIGNABLE
Neither Mr. Fagan, his surviving spouse, nor any other person
will have any right to assign or otherwise to alienate the right to
receive payments under the plan, in whole or in part.
SECTION 10. OTHER BENEFIT PLANS
This plan will supersede any obligation to pay benefits to Mr.
Fagan under the excess benefit plan contained in the retirement
plan or the TECO Energy Group Supplemental Executive Retirement
Plan, as they may be amended from time to time. No benefits will
be payable to Mr. Fagan under such excess benefit plan or the TECO
Energy Group Supplemental Executive Retirement Plan.
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SECTION 11. AMENDMENT
TECO Energy reserves the right at any time by action of the
board to amend the plan in any way. However, no amendment of the
plan may reduce the benefits to be paid to Mr. Fagan or his
surviving spouse below those that would have been paid if the plan
had continued without change to the date of Mr. Fagan s retirement.
Executed as of May 24, 1999
TECO ENERGY, INC.
By: /s/ G. F. Anderson
G. F. Anderson
Chairman of the Board
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