Exhibit 10.2
May 24, 1999
Mr. Robert D. Fagan
TECO Energy, Inc.
702 N. Franklin Street
Tampa, FL 33602
Dear Mr. Fagan:
This will confirm certain terms and conditions relating to your
employment by TECO Energy, Inc. (the Company ).
1. Duties. You shall serve at the pleasure of the Company s
Board of Directors and you shall perform such executive duties for the
Company and its subsidiaries as may be assigned to you by the
Company's Board of Directors. While so employed, you shall devote
your full employable time to the performance of such duties and use
your best efforts to promote the interests of the Company and its
subsidiaries. You shall, at the pleasure of the Company, serve on
such boards of directors and committees of the Company and its
s u bsidiaries and hold such offices with the Company and its
subsidiaries to which you may be duly elected or appointed.
2. Compensation Upon Other Termination. If, within three years
of the date hereof, your employment shall be terminated by the Company
other than for Cause or Disability or if it is terminated by you for
Good Reason, then you shall be entitled to the following benefits:
(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.
(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 within five days
after the date of termination equal to two times the sum of (1) the
highest annual rate of base salary in effect at any time within the 12
months preceding the date of termination and (2) the greater of (A)
your targeted annual incentive award as of the date of termination and
(B) the most recent annual incentive award paid to you by the Company
preceding the date of termination.
(c) For a 24-month period after such termination, the
Company shall arrange to provide you with life, disability, accident
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May 24, 1999
and health insurance benefits substantially similar to those that you
were receiving immediately prior to termination. Benefits otherwise
receivable by you under this subsection will be reduced to the extent
comparable benefits are actually received by you from a subsequent
employer during the 24-month period following your termination, and
any such benefits actually received by you shall be reported to the
Company.
"Cause" is defined as (i) willful and continued failure to
substantially perform your obligations under this agreement (other
than by reason of physical or mental illness) after written demand
specifically identifying such failure is given to you by the Company
or (ii) willful conduct by you that is demonstrably and materially
injurious to the Company. For purposes of this definition, "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. 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 of Directors at a meeting
of the Board of Directors 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 of Directors), finding that
in the the good faith opinion of the Board of Directors you were
guilty of conduct set forth above in this paragraph and specifying the
particulars thereof in detail.
Disability is defined as (i) being absent from the full-time
performance of your duties with the Company for six consecutive months
as a result of your incapacity due to physical or mental illness and
(ii) after subsequent written notice of termination is given, not
returning to the full-time performance of your duties within 30 days.
"Good Reason" is defined as (i) the assignment to you of any
duties inconsistent (except in the nature of a promotion) with the
position in the Company that you then held or a substantial adverse
a l t e r a t ion in the nature or status of your position or
responsibilities or the conditions of your employment from those then
in effect, (ii) 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 or (iii) the failure by the Company to name you as
Chairman of the Board by January 1, 2000, in each case that is not
corrected by the Company within 15 days after you give written notice
specifying the Good Reason. Such termination of employment must occur
within one year after the date of the event constituting Good Reason.
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May 24, 1999
3. Non-Competition. You agree that while you are employed by
the Company and for two years thereafter, you shall not (i)(a) engage
in any business, or acquire an interest in any business as a partner,
stockholder, proprietor or otherwise (except as the beneficial owner
o f publicly-traded stock), or become affiliated as an agent,
consultant, employee, director or officer of or provide any consulting
services to any business having its principal place of business within
the State of Florida that is in competition with any business in which
the Company is engaged or (b) engage in, or provide services with
respect to, strategic planning, marketing or sales in the State of
Florida for any such business regardless of its principal place of
business; (ii) solicit, divert, do business with, or accept business
from any person who is or has been a customer of the Company if such
solicitation, diversion or business has the effect of or results in
the Company s loss of all or a portion of such customer s business or
potential business; (iii) influence or attempt to influence any
employee of the Company to terminate his/her employment with the
Company or (iv) influence or attempt to influence any agent, customer,
supplier or distributor who has a business relationship with the
Company to cease or adversely alter its business relations with the
Company. For purposes of the above paragraph, Company shall be
deemed to include all of its subsidiaries.
4. Confidential Information. You agree to receive confidential
and proprietary information of the Company and its subsidiaries
acquired or developed by you during your employment with the Company
in confidence, and except as authorized by the Company, not to
disclose or use such information to or for the benefit of others
during the period of your employment and for a period of ten years
thereafter except to the extent such disclosure may be required by law
or such information has become public knowledge without breach of this
agreement.
5. Nontransferability; Successors. No payment hereunder shall
be subject to anticipation, sale, transfer, assignment, pledge or
other charge. The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business or assets of the Company to
expressly assume and agree to perform this agreement.
6. Costs of Enforcement; Interest. The Company shall reimburse
you, within five days after demand, for all reasonable legal fees and
expenses incurred by you in enforcing your rights under this
agreement. The Company shall also pay to you interest on any amount
that the Company fails to pay in accordance with the terms of this
agreement at an annual rate equal to the prime rate as reported in The
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May 24, 1999
Wall Street Journal (Southeastern Edition) plus 2% from the date such
amount became due until payment is made.
7. Governing Law. This agreement shall be governed by the laws
of the State of Florida, without giving effect to the conflicts of law
principles thereof.
Very truly yours,
TECO ENERGY, INC.
By: /s/ G. F. Anderson
G. F. Anderson
Chairman of the Board
Agreed to this 24 day of May, 1999.
/s/ Robert D. Fagan
Robert D. Fagan
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