Edgar Filing: TECO ENERGY INC

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ____)

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))

[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12

TECO Energy, Inc.
...............................................................................
(Name of Registrant as Specified In Its Charter)

...............................................................................
(Name of Person(s) filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

........................................................................

2) Aggregate number of securities to which transaction applies:

........................................................................

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

........................................................................

4) Proposed maximum aggregate value of transaction:

........................................................................

5) Total fee paid:

........................................................................

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

........................................................................

2) Form, Schedule or Registration Statement No.:

........................................................................

3) Filing Party:

........................................................................

4) Date Filed:

........................................................................

[TECO ENERGY Logo]

March 5, 2001

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 18, 2001

The Annual Meeting of the Shareholders of TECO Energy, Inc. will be
held at the principal office of the Corporation, TECO Plaza, 702 North Franklin
Street, Tampa, Florida, on Wednesday, April 18, 2001 at 11:30 a.m., for the
following purposes:

1. To elect four directors.

2. To approve an amendment to the Corporation's 1996 Equity
Incentive Plan to make available for grant an additional
6,300,000 shares.

3. To consider and act on such other matters as may properly
come before the meeting.

Shareholders of record at the close of business on February 9, 2001
will be entitled to vote at the meeting and at any adjournments thereof.

Even if you plan to attend the meeting, you are requested to either
mark, sign and date the enclosed proxy card and return it promptly in the
accompanying envelope or vote by telephone or internet by following the
instructions on the proxy card. If you attend the meeting and wish to vote in
person, your proxy will not be used.

By order of the Board of Directors,

D. E. Schwartz, Secretary

TECO ENERGY, INC.
P.O. Box 111 Tampa, Florida 33601
(813) 228-4111

TECO ENERGY, INC.
P.O. BOX 111, TAMPA, FLORIDA 33601

PROXY STATEMENT

The enclosed proxy is solicited on behalf of the Board of Directors of
TECO Energy, Inc. (the "Corporation") to be voted at the Annual Meeting of
Shareholders of the Corporation to be held at the time and place and for the
purposes set forth in the foregoing notice. This proxy statement and the
enclosed proxy are being mailed to shareholders beginning on or about March 5,
2001.

VOTING OF SECURITIES

As of February 9, 2001, the record date for the determination of
shareholders entitled to vote at the meeting, the Corporation had outstanding
126,443,550 shares of Common Stock, $1 par value ("Common Stock"), the only
class of stock of the Corporation outstanding and entitled to vote at the
meeting. The holders of Common Stock are entitled to one vote for each share
registered in their names on the record date with respect to all matters to be
acted upon at the meeting.

The presence at the meeting, in person or by proxy, of a majority of
the shares outstanding on the record date will constitute a quorum. Abstentions
and broker non-votes will be considered as shares present for purposes of
determining the presence of a quorum.

A shareholder submitting a proxy may revoke it at any time before it
is exercised at the meeting by filing with the Secretary of the Corporation a
written notice of revocation, submitting a proxy bearing a later date or
attending the meeting and voting in person.

Shares represented by valid proxies received will be voted in the
manner specified on the proxies. If no instructions are indicated on the proxy,
the proxy will be voted for the election of the nominees for director named
below and for the approval of the plan amendment described below.

The affirmative vote of a majority of the Common Stock represented at
the meeting in person or by proxy will be required to elect directors and to
approve the plan amendment. Abstentions will be considered as represented at
the meeting and, therefore, will be the equivalent of a negative vote; broker
non-votes will not be considered as represented at the meeting.

ELECTION OF DIRECTORS

The Corporation's Bylaws provide for the Board of Directors to be
divided into three classes, with each class to be as nearly equal in number as
possible. As the term of one class of directors expires, their successors are
elected for a term of three years at each annual meeting of shareholders.
Messrs. Rankin, Rockford, Touchton and Urquhart have been nominated for terms
expiring in 2004. Each of these nominees has consented to serve if elected. If
any nominee is unable to serve, the shares represented by valid proxies will be
voted for the election of such other person as the Board may designate.

The following table contains certain information as to the nominees
and each person whose term of office as a director will continue after the
meeting. Information on the share ownership of each of these individuals is
included under "Share Ownership" below.

PRINCIPAL OCCUPATION DURING
LAST FIVE YEARS AND OTHER DIRECTOR PRESENT TERM
NAME AGE DIRECTORSHIPS HELD(1) SINCE(1) EXPIRES
-------------------- --- -------------------------------- -------- ------------

DuBose Ausley 63 Chairman, Ausley & McMullen 1992 2002
(attorneys), Tallahassee, Florida;
formerly Chairman, Macfarlane,
Ausley, Ferguson & McMullen
(attorneys), Tallahassee, Florida;
also a director of Sprint
Corporation and Chairman of Capital
City Bank Group, Inc.

Sara L. Baldwin 69 Private Investor; formerly Vice 1980 2003
President, Baldwin and Sons, Inc.
(insurance agency), Tampa, Florida

Robert D. Fagan 56 Chairman of the Board, President and 1999 2003
Chief Executive Officer, TECO
Energy, Inc.; formerly President,
PP&L Global, Inc. (independent
power), Fairfax, Virginia

James L. Ferman, Jr. 57 President, Ferman Motor Car Company, 1999 2003
Inc. 1985 2002 (automobile
dealerships), Tampa, Florida; also
Chairman of The Bank of Tampa and
its holding company, The Tampa
Banking Company

Luis Guinot, Jr. 65 Partner, Shapiro Sher & Guinot, P.A. 1999 2003
(attorneys), Washington, D.C.;
formerly United States Ambassador to
the Republic of Costa Rica; also a
director of Rica Foods, Inc.

*Tom L. Rankin 60 Independent Investment Manager; 1997 2001
formerly Chairman of the Board and
Chief Executive Officer, Lykes
Energy, Inc. (the former holding
company for the Peoples Gas
companies) and Lykes Bros. Inc.

*William D. Rockford 55 Retired; formerly Managing Director, 2000 2001
Chase Securities Inc. (financial
services), New York, New York

William P. Sovey 67 Chairman of the Board and former 1996 2003
Chief Executive Officer, Newell
Rubbermaid Inc. (consumer products),
Freeport, Illinois; also a director
of Acme Metals, Inc. and Actuant
Corporation

*J. Thomas Touchton 62 Managing Partner, The Witt-Touchton 1987 2001
Company (private investment
partnership), Tampa, Florida; also a
director of 26 Merrill
Lynch-sponsored mutual funds

*John A. Urquhart 72 President, John A. Urquhart 1991 2001
Associates (management consultants),
Fairfield, Connecticut and Senior
Advisor to the Chairman, Enron Corp.
(energy and communications),
Houston, Texas; formerly Senior Vice
President, G.E. Industrial & Power
Systems, General Electric Company;
also a director of Catalytica Energy
Systems, Inc., Enron Corp. and
Hubbell Incorporated

James O. Welch, Jr. 69 Retired; formerly Vice Chairman, RJR 1976 2002
Nabisco, Inc. and Chairman, Nabisco
Brands, Inc.; also a director of
Kmart Corporation and Vanguard Group
of Investment Companies

------------
*Nominee for election as director

(1) All of the directors of the Corporation also serve as directors of Tampa
Electric Company, and the period of service shown includes service on
Tampa Electric Company's Board prior to the formation of the Corporation
on January 15, 1981. On April 15, 1981, the Corporation became the
corporate parent of Tampa Electric Company as a result of a
reorganization.

The Board of Directors held eight meetings in 2000. All directors
attended at least 75% of the meetings of the Board and Committees on which they
served. The Corporation has standing Audit, Compensation, Finance, and
Governance and Nominating Committees of the Board of Directors.

The Audit Committee met three times in 2000; its members are Messrs.
Ferman, Rankin and Touchton (Chairman). Additional information about the Audit
Committee is included in the Audit Committee Report below.

The Compensation Committee, which met five times in 2000, is composed
of Mrs. Baldwin and Messrs. Sovey, Urquhart and Welch (Chairman). For
additional information about the Compensation Committee, see the Compensation
Committee Report on Executive Compensation below.

The Finance Committee, which assists the Board in formulating the
financial policies of the Corporation and evaluating significant investments
and other financial commitments by the Corporation, met three times in 2000;
its members are Messrs. Ausley, Fagan, Guinot, Rankin, Rockford and Urquhart
(Chairman).

The Governance and Nominating Committee assists the Board with respect
to corporate governance matters, including the composition and functioning of
the Board; it was formed in 2001 and, thus, did not meet in 2000. Its members
are Messrs. Touchton (Chairman), Urquhart and Welch, each of whom is an
independent director. Shareholder proposals for nominees for membership on the
Board will be given due consideration by the Committee for recommendation to
the Board based on the nominee's qualifications. Shareholder nominee proposals
should be submitted in writing to the Chairman of the Governance and Nominating
Committee in care of the Corporate Secretary.

The Corporation paid $1,046,705 for legal services rendered during
2000 by Ausley & McMullen, of which Mr. Ausley serves as Chairman.

The Corporation guaranteed a $250,000 loan made by a commercial bank
to Richard Lehfeldt, Senior Vice President-External Affairs, in 2000. This loan
was made in connection with Mr. Lehfeldts's purchase of a home in Tampa.

COMPENSATION OF DIRECTORS

Directors who are not employees or former employees of the Corporation
or any of its subsidiaries are paid an annual retainer of $27,000 and
attendance fees of $750 for each meeting of the Board of the Corporation, $750
for each meeting of the Board of Tampa Electric Company and $1,000 for each
meeting of a Committee of the Board on which they serve. Each director who
serves as a Committee Chairman receives an additional annual retainer of
$5,000. Directors may elect to receive all or a portion of their compensation
in the form of Common Stock. Directors may also elect to defer any of their
cash compensation with a return calculated at either the 90-day U.S. Treasury
bill rate or a rate equal to the total return on the Corporation's Common
Stock.

All non-employee directors participate in the Corporation's 1997
Director Equity Plan, which allows for a variety of equity-based awards.
Currently, each new non-employee director receives an option for 10,000 shares
of Common Stock and each reelected non-employee director receives an annual
grant consisting of 500 shares and an option for 2,500 shares of Common Stock.
The exercise price for these options is the fair market value on the date of
grant. They are exercisable immediately and expire ten years after grant or
earlier as provided in the plan following termination of service on the Board.

The Corporation had an agreement with Hugh L. Culbreath, a former
Chairman and CEO of the Corporation, under which he provided consulting
services to the Corporation for a fee of $175,000 per year. This agreement
terminated on December 31, 2000, and Mr. Culbreath will be retiring from the
Board effective the date of the Annual Meeting of Shareholders.

SHARE OWNERSHIP

There is no person known to the Corporation to be the beneficial owner
of more than five percent of the outstanding Common Stock as of December 31,
2000.

The following table sets forth the shares of Common Stock beneficially
owned as of January 31, 2001 by the Corporation's directors and nominees, its
executive officers named in the summary compensation table below and its
directors and executive officers as a group. Except as otherwise noted, such
persons have sole investment and voting power over the shares. The number of
shares of the Corporation's Common Stock beneficially owned by any director or
executive officer does not exceed 1% of such shares outstanding at January 31,
2001; the percentage beneficially owned by all directors and executive officers
as a group as of such date is 2.2%.

NAME SHARES(1) NAME SHARES(1)
-------------------- ---------- --------------------- ---------------

DuBose Ausley 35,802 John A. Urquhart 36,115(7)

Sara L. Baldwin 35,054(2) James O. Welch, Jr. 40,736(8)

Hugh L. Culbreath 65,100(3) John B. Ramil 151,334(4)(9)

Robert D. Fagan 374,686(4) Richard E. Ludwig 160,804(4)

James L. Ferman, Jr. 45,760(5) William N. Cantrell 186,978(4)(10)

Luis Guinot, Jr. 13,325 Gordon L. Gillette 98,985(4)

Tom L. Rankin 938,944(6) All directors and 2,798,453(4)(11)
executive officers as
William D. Rockford 10,000 a group (21 persons)

William P. Sovey 21,082

J. Thomas Touchton 43,136

----------

(1) The amounts listed include the following shares that are subject to
options granted under the Corporation's stock option plans: Messrs. Ausley
and Rankin, 16,000 shares each; Mrs. Baldwin and Messrs. Culbreath, Sovey
and Welch, 18,000 shares each; Mr. Fagan, 269,304 shares; Mr. Ferman,
28,000 shares; Mr. Guinot, 12,000 shares; Mr. Rockford, 10,000 shares; Mr.
Touchton, 14,000 shares; Mr. Urquhart, 25,200 shares; Mr. Ramil, 117,214
shares; Mr. Ludwig, 122,357 shares; Mr. Cantrell, 111,962 shares; Mr.
Gillette, 70,865 shares and all directors and executive officers as a
group, 1,285,449 shares.

(2) Includes 350 shares held by a trust of which Mrs. Baldwin is a trustee.

(3) Includes 6,000 shares owned by Mr. Culbreath's wife, as to which shares he
disclaims any beneficial interest.

(4) The amounts listed include the following shares that are held by benefit
plans of the Corporation for an officer's account: Mr. Fagan, 330 shares;
Mr. Ramil, 4,141 shares; Mr. Ludwig, 4,426 shares; Mr. Cantrell, 8,933
shares; Mr. Gillette, 5,769 shares and all directors and executive
officers as a group, 45,421 shares.

(5) Includes 11,720 shares owned jointly by Mr. Ferman and his wife. Also
includes 1,020 shares owned by Mr. Ferman's wife, as to which shares he
disclaims any beneficial interest.

(6) Includes 1,343 shares owned by Mr. Rankin's wife, as to which shares he
disclaims any beneficial interest.

(7) Includes 1,000 shares owned by Mr. Urquhart's wife, as to which shares he
disclaims any beneficial interest.

(8) Includes 2,000 shares owned by a charitable foundation of which Mr. Welch
is a trustee.

(9) Includes 1,680 shares owned jointly by Mr. Ramil and other family members.

(10) Includes 16,600 shares owned by Mr. Cantrell's wife, as to which shares he
disclaims any beneficial interest.

(11) Includes a total of 37,699 shares owned jointly. Also includes a total of
25,963 shares owned by spouses, as to which shares beneficial interest is
disclaimed.

SHAREHOLDER RETURN PERFORMANCE GRAPH

The following graph shows the cumulative total shareholder return on
the Corporation's Common Stock on a yearly basis over the five-year period
ended December 31, 2000, and compares this return with that of the S&P 500
Composite Index and the S&P Electric Utilities Index. The graph assumes that
the value of the investment in the Corporation's Common Stock and each index
was $100 on December 31, 1995 and that all dividends were reinvested.

[GRAPH OMITTED]

December 31,
----------------------------------------------
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----

TECO Energy, Inc. $100 $ 98 $120 $126 $ 88 $163

S&P Electric Utilities Index $100 $100 $126 $146 $117 $180

S&P 500 Index $100 $123 $164 $211 $255 $232

The following graph shows the same total return comparison as set
forth above, except it shows performance beginning in the third quarter of
1999, when the Corporation, under the leadership of Robert D. Fagan, its new
CEO, embarked on a new strategic course.

[GRAPH OMITTED]

6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00 12/31/00
------- ------- -------- ------- ------- ------- --------

TECO Energy, Inc. $100 $94 $ 84 $ 90 $ 94 $137 $156

S&P Electric Utilities Index $100 $94 $ 86 $ 82 $ 91 $123 $132

S&P 500 Index $100 $94 $108 $110 $107 $106 $ 98

EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors, composed
entirely of independent, non-employee directors, recommends to the Board the
compensation of executive officers and administers the Corporation's long-term
incentive plan. The objective of the Corporation's compensation program is to
enhance shareholder value by attracting and retaining the talent needed to
manage and build the Corporation's businesses. The Committee seeks, therefore,
to provide compensation opportunities that are competitive and link the
interests of shareholders and executives.

Upon the Committee's recommendation, the Board has adopted stock
ownership guidelines of five times base salary for the CEO and three times base
salary for the other executive officers. These guidelines allow the executives
five years to acquire this amount of stock and do not recognize stock options
as shares owned.

The components of the Corporation's executive compensation program,
base salary, annual incentive awards and long-term incentive awards, are
described below.

Base Salary. Base salary is designed to provide each executive with a
fixed amount of annual compensation that is competitive with the marketplace.
The Corporation's salary structure for its executive officers utilizes various
salary grade ranges and associated midpoints. Each executive officer is
assigned to a salary grade by the Board, on the recommendation of the
Committee, based on the officer's experience level and scope of responsibility
and a market assessment conducted by the Corporation's outside consultant,
Towers Perrin, of the median compensation paid to executives with similar
positions by organizations having comparable revenues. For purposes of this
market assessment, general industry organizations are used as the benchmark for
all executive officers except the operating unit presidents who are benchmarked
against organizations in the respective industries in which they operate. Each
year, the Committee adjusts the salary ranges based on surveys by outside
consultants of expected changes in compensation levels at general industrial
and electric utility companies and recommends adjustments to the base salaries
for the executive officers. In 2000, adjustments were made to the base salaries
for each executive officer. In making these adjustments, the Committee took
into account the midpoint of the officer's assigned salary grade and the
Committee's subjective evaluation of the officer's individual performance. For
2000, Mr. Fagan's base salary was 93% of the midpoint of his salary grade.

Annual Incentive Awards. The Corporation has an annual incentive
program intended to encourage actions that contribute to improved operating and
financial results which provides for incentive awards based on the achievement
of corporate and individual performance goals. Target awards have ranged up to
60% of the midpoint of the salary range for the CEO, 40-50% for the other named
executive officers and lower percentages for other officers. In setting these
percentages, the Committee used data from the market assessment referred to
above. Under the Corporation's program, additional payments of up to 50% of the
target awards may be made if the goals are exceeded; lesser amounts may be paid
if the goals are not achieved, but only if the Corporation's net income exceeds
a threshold designated for that year. The Board may decide to adjust awards if
the plan formula would unduly penalize or reward management and, in individual
cases, to vary the calculated award based on the officer's total performance.
Executive officers may elect to receive all or a portion of their annual
incentive award in the form of Common Stock.

The 2000 objectives for all the executive officers under the incentive
program included overall operating and financial performance targets measured
by the Corporation's net income and return on equity on an absolute basis and
by the Corporation's earnings per share growth and return on equity relative to
other companies in the industry. 60% of Mr. Fagan's 2000 award was based on
these factors. Additional quantitative targets were used for some of the other
executive officers including, in the case of certain officers, targets relating
specifically to the performance of the companies for which they have chief
operating responsibility. The financial results for 2000 were adjusted for
these purposes to exclude the charges incurred as a result of a restructuring
at Tampa Electric.

In addition to measuring performance against the 2000 quantitative
targets, the Committee evaluated each executive's performance against
qualitative objectives. These objectives focused on aspects of the
Corporation's business that directly related to the executive officer's
individual responsibilities. 40% of Mr. Fagan's 2000 award was

8
11

based on these qualitative objectives. These objectives related to the
effective communication of the direction and progress of the Corporation, the
preparation of the Corporation for a fully competitive environment and the
completion of a defining transaction to transform the Corporation and enhance
shareholder value. The Committee's review consisted of a subjective evaluation
of the officer's achievement of these objectives. Based on this evaluation and
the Corporation's 2000 net income, earnings per share and return on equity, Mr.
Fagan received an incentive award of 72% of the midpoint of his salary grade.

Long-Term Incentive Awards. The long-term component of the
Corporation's incentive compensation program consists of equity-based grants
which have been in the form of stock options and restricted stock. These grants
are designed to create a mutuality of interest with shareholders by motivating
the CEO and the other executive officers and key personnel to manage the
Corporation's business so that the shareholders' investment will grow in value
over time. The Committee's policy has been to base individual awards on an
annual study by Towers Perrin comparing the value of long-term incentive grants
to salary levels in general industry.

The Committee does not normally consider the amount of an individual's
outstanding or previously granted options or shares in determining the size of
the grant. The 129,304 options and the 41,026 shares of performance-based
restricted stock granted to Mr. Fagan in 2000 reflected the policies described
above and, as in the case of the other executive officers, the results of the
Committee's review of his performance conducted when it considered his base
salary for 2000.

For 2000, the value of the long-term incentive grants to all executive
officers except Richard E. Ludwig was split evenly between stock options and
performance-based restricted stock. Mr. Ludwig's long-term incentive grants
were weighted with 1/3 of the total value in stock options and 2/3 in
performance-based restricted stock that has a payout dependent upon the net
income and return on equity of TECO Power Services Corporation over a
three-year period. The other executive officers received performance-based
restricted stock with a payout that is dependent upon the total return of the
Common Stock over a three-year period relative to that of the median company
(in terms of total return) in the Dow Jones Electric Utility Index. If the
Common Stock's total return is equal to that of the median company during the
three-year period, the payout will be equal to 90% of the target amount. If the
total return is in the top 10 percentile of the companies in the index, the
payout will be at 200%. If the total return is in the bottom 1/3 of these
companies, there will be no payout. A minimum payout of 50% of target will be
made if performance is equal to the 33 and 1/3 percentile. The payout for
performance between the top 10 percent and the bottom one-third is prorated.

Also in 2000, the Committee adjusted the performance-based restricted
stock granted in 1999. Those grants required that the Corporation's total
return over a three-year period exceed that of the Dow Jones Electric Utility
Index by 15 percentage points in order to produce a payout at target. Since the
time of those grants, the Dow Jones Electric Utility Index changed dramatically
to include several companies with large market capitalizations that are not
regulated utilities. In 2000, the Committee recognized that these companies had
a disproportionately large influence, constituting 25% of this index. As a
result, to better reflect the intent of the incentive designed in 1999 (to
outperform other electric utilities by 15 percentage points over a three-year
period), the Committee issued replacement grants in 2000 which maintain the
same 15-percentage point outperformance incentive but measure performance
against the median company in the index rather than the index itself (which is
a weighted average based on market capitalization). Since the Corporation's
total return exceeded that of the median company by 8.3 percentage points
during the first year of the three-year performance period beginning in 1999,
the replacement grants for the remaining two years require that the
Corporation's total return exceed that of the median company by 6.7 percentage
points in order to achieve a target payout, thereby preserving the initial
incentive for the three-year period beginning in 1999.

With respect to qualifying compensation paid to executive officers
under Section 162(m) of the Internal Revenue Code, the Corporation does not
expect to have any significant amount of compensation exceeding the $1-million
annual limitation. Accordingly, the Committee has recommended that the
Corporation continue to structure its executive compensation program to meet
the objectives described in this report. Compensation attributable to the

9
12

Corporation's performance-based restricted stock and stock options is not
subject to the Section 162(m) limit because of the performance-based exemption.

By the Compensation Committee,

James O. Welch, Jr. (Chairman)
Sara L. Baldwin
William P. Sovey
John A. Urquhart

The following tables set forth certain compensation information for
the Chief Executive Officer of the Corporation and each of the four other most
highly compensated executive officers of the Corporation and its subsidiaries
in 2000.

SUMMARY COMPENSATION TABLE
--------------------------
Long-Term
Annual Compensation
Compensation Awards
-------------------------------------- ------------------------------
Other
Annual Restricted Shares All Other
Name and Compen- Stock Underlying Compen-
Principal Position Year Salary Bonus(1) sation(2) Awards(3) Options/SARs(#) sation(4)
------------------ ---- ------ --------- --------- ---------- --------------- ---------

Robert D. Fagan 2000 $540,000 $421,961 129,304 $22,728
Chairman, President 1999 253,333 301,023 $243,070 $328,477 140,000 2,111
and CEO

John B. Ramil 2000 299,000 202,199 41,377 12,212
President of Tampa 1999 255,000 131,544 36,807 10,317
Electric 1998 237,500 147,500 132,208 16,830 10,490

Richard E. Ludwig 2000 260,000 180,000 36,057 11,448
President of TECO 1999 225,500 150,000 12,000 10,215
Power Services 1998 205,500 97,500 71,988 18,300 9,868

William N. Cantrell 2000 275,000 146,562 28,447 12,410
President of Peoples 1999 255,000 106,639 33,485 10,776
Gas System and 1998 230,000 115,000 132,208 16,830 9,342
TECO Solutions

Gordon L. Gillette 2000 232,500 140,201 28,447 12,410
Vice President- 1999 207,500 69,724 25,318 8,963
Finance and Chief 1998 188,750 70,000 144,640 7,201
Financial Officer

10
13

(1) Since the portion of each executive officer's annual bonus that is based
on the Corporation's 2000 earnings per share growth and return on equity
relative to that of other companies in the industry is determined using
comparative data that was not available at the time of printing of this
document, this portion of the annual bonus for 2000 will be reported in
the 2002 proxy statement. Mr. Fagan elected to receive 25 percent of his
2000 annual incentive award in the form of Common Stock.

(2) Included in the reported amount is $239,472 for Mr. Fagan's relocation
expenses and an associated tax gross-up.

(3) The reported values of the restricted stock awards were determined using
the closing market price of the Common Stock on the date of grant.
Restricted stock holdings and the values thereof based on the closing
price of the Common Stock on December 31, 2000 were as follows: Mr. Fagan,
80,041 shares ($2,591,327); Mr. Ramil, 28,299 shares ($916,180); Mr.
Ludwig, 26,021 shares ($842,430); Mr. Cantrell, 24,511 shares ($793,544);
and Mr. Gillette, 18,718 shares ($605,995). Holders of restricted stock
receive the same dividends as holders of other shares of Common Stock.

(4) The reported amounts for 2000 consist of $372 in premiums paid by the
Corporation to the Executive Supplemental Life Insurance Plan, with the
balance in each case being employer contributions under the TECO Energy
Group Retirement Savings Plan and Retirement Savings Excess Benefit Plan.

OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
--------------------------------------------------------------------
Number of % of Total
Shares Options/SARs Exercise Grant
Underlying Granted to or Base Date
Options/SARs Employees in Price Expiration Present
Name Granted(1) Fiscal Year Per Share Date Value(2)
---- ------------ ------------ --------- ---------- --------

Robert D. Fagan 129,304 10.23 $21.25 4/18/10 $544,871

John B. Ramil 41,377 3.27 21.25 4/18/10 174,358

Richard E. Ludwig 36,057 2.85 21.25 4/18/10 151,940

William N. Cantrell 28,447 2.25 21.25 4/18/10 119,872

Gordon L. Gillette 28,447 2.25 21.25 4/18/10 119,872

(1) The options are exercisable in three equal annual installments beginning
one year from the date of grant.

(2) The values shown are based on the Black-Scholes valuation model and are
stated in current annualized dollars on a present value basis. The key
assumptions used for purposes of this calculation include the following:
(a) a 6.6% discount rate; (b) a volatility factor based upon the average
trading price for the 36-month period ending February 29, 2000; (c) a
dividend factor based upon the 3-year average dividend paid for the period
ending February 29, 2000; (d) the 10-year option term; and (e) an exercise
price equal to the fair market value on the date of grant. The values
shown have not been reduced to reflect the non-transferability of the
options or the vesting or forfeiture provisions. The actual value an
executive may realize will depend upon the extent to which the stock price
exceeds the exercise price on the date the option is exercised.
Accordingly, the value, if any, realized by an executive will not
necessarily be the value determined by the Black-Scholes model.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUE

Number of Shares Value of Unexercised
Underlying Unexercised In-The-Money
Options/SARs Options/SARs
at Year-End at Year-End
--------------------- --------------------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized($) Unexercisable Unexercisable
---- --------------- ----------- ------------- -------------

Robert D. Fagan 0 0 46,668 / 222,636 $470,689 / 2,404,090

John B. Ramil 0 0 51,299 / 65,915 $455,675 / 741,828

Richard E. Ludwig 10,000 55,938 78,300 / 44,057 $832,437 / 497,144

William N. Cantrell 4,000 20,375 61,192 / 50,770 $596,857 / 570,847

Gordon L Gillette 5,000 40,562 25,540 / 45,325 $234,708 / 510,101

LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR

Number of Performance or other
shares, units or period until
Name other rights maturation or payout Threshold(#) Target(#) Maximum(#)
---- ---------------- -------------------- ------------ --------- ----------

Robert D. Fagan 41,026 April 1, 2000 to 20,513 41,026 82,052
March 31, 2003

John B. Ramil 13,128 April 1, 2000 to 6,564 13,128 26,256
March 31, 2003

Richard E. Ludwig 14,621 April 1, 2000 to 7,311 14,621 29,242
March 31, 2003

William N. Cantrell 9,026 April 1, 2000 to 4,513 9,026 18,052
March 31, 2003

Gordon L. Gillette 9,026 April 1, 2000 to 4,513 9,026 18,052
March 31, 2003

In 2000, replacement grants were made for the performance-based
restricted stock awarded in 1999. For information on these replacement grants
and the 2000 awards of performance-based restricted stock set forth in the
table above, see "Compensation Committee Report on Executive Compensation"
above.

PENSION TABLE
-------------

The following table shows estimated annual benefits payable under the
Corporation's pension plan arrangements for the named executive officers other
than Mr. Fagan.

Years of Service
Final --------------------------------------------
Average Earnings 5 10 15 20 or More
---------------- ----- ------- -------- ----------

$300,000 ............ $45,000 $90,000 $135,000 $180,000
350,000 ............ 52,500 105,000 157,500 210,000
400,000 ............ 60,000 120,000 180,000 240,000
450,000 ............ 67,500 135,000 202,500 270,000
500,000 ............ 75,000 150,000 225,000 300,000
550,000 ............ 82,500 165,000 247,500 330,000
600,000 ............ 90,000 180,000 270,000 360,000
650,000 ............ 97,500 195,000 292,500 390,000
700,000 ............ 105,000 210,000 315,000 420,000
750,000 ............ 112,500 225,000 337,500 450,000
800,000 ............ 120,000 240,000 360,000 480,000
850,000 ............ 127,500 255,000 382,500 510,000
900,000 ............ 135,000 270,000 405,000 540,000
950,000 ............ 142,500 285,000 427,500 570,000
1,000,000 ............ 150,000 300,000 450,000 600,000

The annual benefits payable to each of the named executive officers
are equal to a stated percentage of such officer's final average earnings
multiplied by his number of years of service, up to a stated maximum. Final
average earnings are based on the greater of (a) the officer's final 36 months
of earnings or (b) the officer's highest three consecutive calendar years of
earnings out of the five calendar years preceding retirement. The amounts shown
in the table are based on 3% of such earnings and a maximum of 20 years of
service. The amount payable to Mr. Fagan is based on 20% of earnings plus 4% of
earnings for each year of service, up to a maximum of 60% of earnings.

The earnings covered by the pension plan arrangements are the same as
those reported as salary and bonus in the summary compensation table above.
Years of service for the named executive officers are as follows: Mr. Fagan (2
years), Mr. Ramil (24 years), Mr. Ludwig (18 years), Mr. Cantrell (25 years)
and Mr. Gillette (19 years). The pension benefit is computed as a straight-life
annuity commencing at the officer's normal retirement age and is reduced by the
officer's Social Security benefits. The normal retirement age is 63 for Messrs.
Fagan, Ludwig and Cantrell, 63 and 2 months for Mr. Ramil and 64 for Mr.
Gillette.

The present value of the portion of the officer's pension benefit that
is in excess of the amount payable under the Corporation's qualified retirement
plan is, at the election of the officer, payable in the form of a lump sum. The
pension plan arrangements also provide death benefits to the surviving spouse
of an officer equal to 50% of the benefit payable to the officer. If the
officer dies during employment before reaching his normal retirement age, the
benefit is based on the officer's service as if his employment had continued
until such age. The death benefit is payable for the life of the spouse.

EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS

The Corporation has severance agreements with the named executive
officers under which payments will be made under certain circumstances in
connection with a change in control of the Corporation. A change in control
means in general an acquisition by any person of 30% or more of the Common
Stock, a change in a majority of the directors, a merger or consolidation of
the Corporation in which the Corporation's shareholders do not have at least
65% of the voting

13
16

power in the surviving entity or a liquidation or sale of the assets of the
Corporation. Each of these officers is required, subject to the terms of the
severance agreements, to remain in the employ of the Corporation for one year
following a potential change in control (as defined) unless a change in control
earlier occurs. The severance agreements provide that in the event employment
is terminated by the Corporation without cause (as defined) or by one of these
officers for good reason (as defined) in contemplation of or following a change
in control, or if the officer terminates his employment for any reason during
the thirteenth month following a change in control, the Corporation will make a
lump sum severance payment to the officer of three times annual salary and
bonus. In such event, the severance agreements also provide for: (a) a cash
payment equal to the additional retirement benefit which would have been earned
under the Corporation's retirement plans if employment had continued for five
years following the date of termination, in the case of Mr. Fagan, and three
years following the date of termination, in the case of the other executive
officers, (b) participation in the life, disability, accident and health
insurance plans of the Corporation for a three-year period except to the extent
such benefits are provided by a subsequent employer and (c) a payment to
compensate for the additional taxes, if any, payable on the benefits received
under the severance agreements and any other benefits contingent on a change in
control as a result of the application of the excise tax associated with
Section 280G of the Internal Revenue Code. In addition, the terms of the
Corporation's stock options and restricted stock provide for vesting upon a
change in control.

The Corporation has an agreement with Mr. Fagan which provides that,
within the first three years of employment, if his employment is terminated by
the Corporation without cause or by Mr. Fagan for good reason, he will receive
severance benefits equal to two times annual salary and bonus. Any payments
under this agreement would be offset against the amount payable under Mr.
Fagan's change-in-control severance agreement.

APPROVAL OF AMENDMENT TO THE
1996 EQUITY INCENTIVE PLAN

GENERAL

At the Corporation's 1996 annual meeting, the shareholders approved
the Corporation's 1996 Equity Incentive Plan (the "Plan"). The purpose of the
Plan is to attract and retain key employees of the Corporation, to provide an
incentive for them to achieve long-range performance goals and to enable them
to participate in the long-term growth of the Corporation. The Plan is
administered by a committee (the "Committee") of not less than three
independent, non-employee members of the Board of Directors, currently the
Compensation Committee. The Committee may grant awards to any employee of the
Corporation or its affiliates who is capable of contributing significantly to
the successful performance of the Corporation. As of February 9, 2001,
approximately 200 key employees were eligible to participate in the Plan.

The shares issued under the Plan are subject to adjustment to reflect
stock dividends, recapitalizations or other changes affecting the Common Stock.
If any outstanding or future award under the Plan expires or is terminated
unexercised or settled in a manner that results in fewer shares outstanding
than were initially awarded, the shares that would have been issuable will
again be available for award under the Plan. The closing price of the Common
Stock on the New York Stock Exchange on February 9, 2001 was $29.23 per share.

PROPOSED AMENDMENT TO THE PLAN

The Board of Directors has approved the proposed amendment, subject to
the approval of the shareholders at the Corporation's annual meeting, which
would increase the number of shares of Common Stock subject to grants by
6,300,000 shares, or less than 5% of the Corporation's outstanding shares as of
February 9, 2001. As of February 9, 2001, there were 4,802,017 shares subject
to issuance in connection with outstanding options and equity awards and
1,386,717 shares available for grant under the Plan. The Board of Directors
believes the proposed increase in shares is needed to ensure that a sufficient
number of shares are available to be issued under the Plan in the future to
attract and retain key employees of the Corporation.

14
17

DESCRIPTION OF AWARDS

The Plan provides for the following three basic types of awards:

Stock Grants. The Committee may make stock grants for no consideration,
for such minimum consideration as may be required by applicable law or for such
other consideration as the Committee may determine. Stock grants may include
without limitation shares subject to forfeiture ("restricted stock"), grants
conditioned upon attainment of performance criteria ("performance shares"),
restricted stock where vesting accelerates upon attainment of performance
criteria ("performance-accelerated restricted stock") and outright stock grants
("bonus stock"). With respect to any stock grant, the Committee has full
discretion to determine the number of shares subject to the grant and the terms
and conditions of the grant.

Stock Options. The Committee may grant options to purchase Common
Stock. Stock options may include without limitation incentive stock options
eligible for special tax treatment ("ISOs"), options not entitled to such tax
treatment ("nonstatutory stock options"), options where the exercise price is
adjusted to reflect market changes ("indexed stock options"), options that
become exercisable based on attainment of performance criteria
("performance-vested stock options"), options where exercisability is
accelerated upon attainment of performance criteria ("performance-accelerated
stock options") and options that entitle the optionee to an additional option
grant at current fair market value to replace shares used to exercise the
options ("reload stock options"). The Committee will determine the option price,
term and exercise period of each option granted, provided that the option price
may not be less than the fair market value of the Common Stock on the date of
grant. An option may be exercised by the payment of the option price in whole or
in part in cash or, to the extent permitted by the Committee, by delivery of a
promissory note or shares of Common Stock owned by the participant valued at
fair market value on the date of delivery, or such other lawful consideration as
the Committee may determine.

Stock Equivalents. The Committee may make awards where the amount to be
paid to the participant is based on the value of the Common Stock. Stock
equivalents may include without limitation payments based on the full value of
the Common Stock ("phantom stock"), payments based on the value of the Common
Stock upon attainment of performance criteria ("performance units"), rights to
receive payments based on dividends paid on the Common Stock ("dividend
equivalents") and stock appreciation rights ("SARs") where the participant
receives payment equal in value to the difference between the exercise price of
the award and the fair market value of the Common Stock on the date of exercise.
SARs may be granted in tandem with options (at or after award of the option) or
alone and unrelated to an option. SARs granted in tandem with an option
terminate to the extent that the related option is exercised, and the related
option terminates to the extent that the tandem SAR is exercised. The exercise
price of an SAR may not be less than the fair market value of the Common Stock
on the date of grant or, in the case of a tandem SAR, the exercise price of the
related option. The Committee also has discretion to grant any other type of
stock equivalent award and to determine the terms and conditions of payment of
the award and whether payment values will be settled in whole or in part in cash
or other property, including Common Stock.

Awards under the Plan may contain such terms and conditions not
inconsistent with the Plan as the Committee in its discretion approves. The
Committee has discretion to administer the Plan in the manner which it
determines, from time to time, is in the best interest of the Corporation. For
example, the Committee will fix the terms of stock options, stock grants and
stock equivalents and determine whether, in the case of options and SARs, they
may be exercised immediately or at a later date or dates. Awards may be granted
subject to conditions relating to continued employment and restrictions on
transfer. The Committee may provide, at the time an award is made or at any time
thereafter, for the acceleration of a participant's rights or cash settlement
upon a change in control of the Corporation. The terms and conditions of awards
need not be the same for each participant. The foregoing examples illustrate,
but do not limit, the manner in which the Committee may exercise its authority
in administering the Plan.

The maximum aggregate number of shares subject to stock options and
SARs or of shares subject to performance criteria that may be granted under the
Plan to a participant in any calendar year will not exceed one million. This
limit is intended to qualify these awards as performance-based compensation that
is not subject to the one million dollar limit on deductibility for federal
income tax purposes of compensation paid to certain senior officers.

15
18

AMENDMENT

The Board has authority to amend the Plan subject to any shareholder
approval that the Board determines is necessary or advisable. The Committee has
authority to amend outstanding awards, including changing the date of exercise
and converting an incentive stock option to a nonstatutory option, if the
Committee determines that such actions would not adversely affect the
participant. The Plan has no expiration date.

FEDERAL INCOME TAX CONSEQUENCES RELATING TO STOCK OPTIONS

Incentive Stock Options. An optionee does not realize taxable income
upon the grant or exercise of an ISO under the Plan. If no disposition of
shares issued to an optionee pursuant to the exercise of an ISO is made by the
optionee within two years from the date of grant or within one year from the
date of exercise, then (a) upon sale of such shares, any amount realized in
excess of the option price (the amount paid for the shares) is taxed to the
optionee as long-term capital gain and any loss sustained will be a long-term
capital loss and (b) no deduction is allowed to the Corporation for Federal
income tax purposes. The exercise of ISOs gives rise to an adjustment in
computing alternative minimum taxable income that may result in alternative
minimum tax liability for the optionee. If shares of Common Stock acquired upon
the exercise of an ISO are disposed of prior to the expiration of the two-year
and one-year holding periods described above (a "disqualifying disposition")
then (a) the optionee realizes ordinary income in the year of disposition in an
amount equal to the excess (if any) of the fair market value of the shares at
exercise (or, if less, the amount realized on a sale of such shares) over the
option price thereof and (b) the Corporation is entitled to deduct such amount
for federal income tax purposes. Any further gain realized is taxed as a
short-term or long-term capital gain and does not result in any deduction to
the Corporation. A disqualifying disposition in the year of exercise will
generally avoid the alternative minimum tax consequences of the exercise of an
ISO.

Nonstatutory Stock Options. No income is realized by the optionee at
the time a nonstatutory option is granted. Upon exercise, (a) ordinary income
is realized by the optionee in an amount equal to the difference between the
option price and the fair market value of the shares on the date of exercise
and (b) the Company receives a tax deduction for the same amount. Upon
disposition of the shares, appreciation or depreciation after the time of
exercise is treated as a short-term or long-term capital gain or loss and will
not result in any deduction by the Corporation.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.

AUDIT COMMITTEE REPORT

The Audit Committee is composed of three directors, each of whom is
independent as defined by applicable New York Stock Exchange listing standards.
The Committee assists the Board of Directors in overseeing (a) the integrity of
the financial statements of the Corporation, (b) the annual independent audit
process, (c) the Corporation's systems of internal accounting and financial
controls, (d) the independence and performance of the Corporation's outside
auditor and (e) the Corporation's compliance with legal and regulatory
requirements. The Committee operates under a written charter adopted by the
Board, a copy of which is included as Appendix A to this proxy statement.

In the course of its oversight of the Corporation's financial
reporting process, the Committee has:

1. Reviewed and discussed with management the Corporation's
audited financial statements for the fiscal year ended
December 31, 2000;

2. Discussed with PricewaterhouseCoopers LLP, the Corporation's
outside auditor, the matters required to be discussed by
Statement on Auditing Standards No. 61, Communication with
Audit Committees; and

3. Received the written disclosures and the letter from
PricewaterhouseCoopers LLP required by Independence Standards
Board Standard No. 1, Independence Discussions with Audit
Committees, discussed with PricewaterhouseCoopers LLP its
independence and considered whether the provision of nonaudit
services by PricewaterhouseCoopers LLP is compatible with
maintaining its independence.

16
19

Based on the foregoing review and discussions, the Committee has
recommended to the Board of Directors that the audited financial statements be
included in the Corporation's Annual Report on Form 10-K for the year ended
December 31, 2000 for filing with the Securities and Exchange Commission.

By the Audit Committee,

J. Thomas Touchton (Chairman)
James L. Ferman, Jr.
Tom L. Rankin

INFORMATION CONCERNING AUDITORS

Based on the Audit Committee's recommendation, the Board reappointed
PricewaterhouseCoopers LLP to serve as independent accountants and to audit the
Corporation's financial statements for 2000. Consistent with past procedures,
independent accountants for the current fiscal year will be appointed by the
Board at its April 2001 meeting.

The fees for services provided by PricewaterhouseCoopers LLP to the
Corporation in 2000 were as follows:

Audit Fees $592,000

All Other Fees $513,305

Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Annual Meeting of Shareholders and to be available to respond to
appropriate questions. They will also have the opportunity to make a statement
if they so desire.

SHAREHOLDER PROPOSALS

Proposals of shareholders intended to be presented pursuant to Rule
14a-8 under the Securities Exchange Act of 1934 (the "Exchange Act") for
inclusion in the Corporation's proxy materials relating to the Annual Meeting
of Shareholders in 2002 must be received on or before November 5, 2001. In
order for a shareholder proposal made outside of Rule 14a-8 under the Exchange
Act to be considered "timely" within the meaning of Rule 14a-4(c) of the
Exchange Act, such proposal must be received by the Corporation not later than
January 18, 2002. Any such proposals should be sent to: Secretary, TECO Energy,
Inc., P.O. Box 111, Tampa, Florida 33601.

ADVANCE NOTICE PROVISIONS FOR SHAREHOLDER PROPOSALS AND NOMINATIONS

The Bylaws of the Corporation provide that in order for a shareholder
to bring business before or propose director nominations at an annual meeting,
the shareholder must give written notice to the Secretary of the Corporation
not less than 90 days nor more than 120 days in advance of the anniversary date
of the immediately preceding annual meeting of shareholders. The notice must
contain specified information about the proposed business or each nominee and
the shareholder making the proposal or nomination. If the annual meeting is
scheduled for a date that is not within 30 days before or after such
anniversary date, the notice given by the shareholder must be received no later
than the tenth day following the day on which the notice of such annual meeting
date was mailed or public disclosure of the date of such annual meeting was
made, whichever first occurs.

SOLICITATION OF PROXIES

In addition to the solicitation of proxies by mail, proxies may be
solicited by telephone, facsimile or in person by regular employees of the
Corporation. The Corporation has also retained Morrow & Co., Inc. to assist in
the solicitation of proxies for a fee of $6,500 plus out-of-pocket expenses.
All expenses of this solicitation, including the cost of preparing and mailing
this proxy statement, and the reimbursement of brokerage houses and other
nominees for their reasonable expenses in forwarding proxy material to
beneficial owners of stock, will be paid by the Corporation.

17
20

OTHER MATTERS

The Board of Directors does not know of any business to be presented
at the meeting other than the matters described in this proxy statement. If
other business is properly presented for consideration at the meeting, the
enclosed proxy authorizes the persons named therein to vote the shares in their
discretion.

Dated: March 5, 2001

18
21

APPENDIX A

TECO ENERGY, INC.

AUDIT COMMITTEE CHARTER

PURPOSE

The principal purpose of the Audit Committee is to assist the Board of
Directors in overseeing (1) the integrity of the financial statements of the
Company, (2) the annual independent audit process, (3) the Company's systems of
internal accounting and financial controls, (4) the independence and
performance of the Company's outside auditor and (5) the Company's compliance
with legal and regulatory requirements. The Committee shall regularly report to
the Board.

In discharging its oversight role, the Committee is granted the power to
investigate any matter brought to its attention with full access to all books,
records, facilities and personnel of the Company and the power to retain
outside counsel, auditors or other experts for this purpose. The outside
auditor and the director of audit services shall have direct access to the
Committee at all times. The Committee may invite any officer or employee of the
Company or the Company's outside counsel or outside auditor to attend a meeting
of the Committee or to meet with members and consultants of the Committee.

This Charter shall be reviewed for adequacy on an annual basis by the Committee
and, to the extent necessary, the Board.

MEMBERSHIP

The Committee shall be comprised of not less than three members of the Board,
who shall be appointed by the Board, and the Committee's composition shall meet
the requirements of the New York Stock Exchange Audit Committee Requirements.
Accordingly, all of the members shall be directors:

o Who have no relationship to the Company that may interfere with
the exercise of their independence from management and the
Company; and

o Who are financially literate or who become financially literate
within a reasonable period of time after appointment to the
Committee.

In addition, at least one member of the Committee shall have accounting or
related financial management expertise.

KEY RESPONSIBILITIES

In carrying out its oversight role, the Committee shall perform the following
functions, which are set forth as a guide and may be varied from time to time
as appropriate under the circumstances.

o The Board and the Committee shall select, evaluate and, where
appropriate, replace the outside auditor, who shall ultimately be
accountable to the Board and the Committee.

o The Committee shall review and discuss with management and the
outside auditor the audited financial statements and, based
thereon, make a recommendation to the Board as to their inclusion
in the Company's Annual Report on Form 10-K.

o The Committee shall discuss with the outside auditor, on an
annual basis, the matters required to be discussed by Statement
on Auditing Standards No. 61, including the auditor's judgments
about the quality, as well as the acceptability, of the Company's
accounting principles and underlying estimates in its financial
statements.

A-1

o The Committee shall receive from the outside auditor at least
annually a formal written statement delineating all relationships
between the auditor and the Company consistent with Independence
Standards Board Standard No. 1, discuss with the auditor any such
disclosed relationships and their impact on the auditor's
independence, and recommend that the Board take appropriate
action in response to the auditor's report to satisfy itself of
the auditor's independence.

o The Committee shall review, prior to the outside auditor's annual
audit, the scope of the audit and the plans for and staffing of
the audit.

o The Committee shall review the responses of management to any
management letter from the outside auditor.

o As a whole, or through the Committee chair, the Committee shall,
to the extent necessary prior to the filing of each Form 10-Q
with the Securities and Exchange Commission, discuss with the
outside auditor any of the matters required to be discussed by
Statement on Auditing Standards No. 71, including any significant
events, transactions or changes in accounting estimates
considered by the auditor in connection with its interim
financial review.

o The Committee shall periodically discuss with the director of
audit services and the corporate compliance officer the Company's
compliance with its established codes of conduct and legal
requirements.

o The Committee shall consider issues which the general counsel may
raise regarding legal matters that may have a material impact on
the financial statements, the Company's compliance policies and
any significant reports or inquiries received from regulators or
government agencies.

o The Committee shall periodically consider the role and
responsibilities of the Company's audit services department; and
shall review annually the results of all internal audits and the
status of corrective action taken by management. The Committee
shall review and approve the annual internal audit plan and
monitor management's appointment or dismissal of the director of
audit services.

o The Committee shall meet at least annually with the director of
audit services and the outside auditor in separate executive
sessions.

o The Committee shall provide the report required by the Securities
and Exchange Commission to be included in the annual proxy
statement.

The Committee's role is one of oversight, and it is not the duty of the
Committee to plan or conduct audits or to determine that the Company's
financial statements are complete and accurate and are in accordance with
generally accepted accounting principles. The preparation of the Company's
financial statements is the responsibility of management, and the auditing of
those financial statements is the responsibility of the outside auditor.

A-2

[TECO ENERGY LOGO]

2001 Annual Shareholders' Meeting

Wednesday, April 18, 2001, 11:30 A.M.

TECO Plaza

702 North Franklin Street

Tampa, Florida 33602

Attached below is your proxy card for the 2001 Annual Meeting of Shareholders
of TECO Energy, Inc.

You may vote by Telephone, by Internet, or by Mail.

To vote by Telephone or Internet, see instructions on reverse side.

To vote by Mail, please return your proxy in the enclosed
Business Reply Envelope P.O. Box 9381 Boston, MA 02205-9381.

DETACH HERE

PROXY

TECO ENERGY, INC.

Proxy for Annual Meeting of Shareholders, April 18, 2001

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
TECO ENERGY, INC.

The undersigned hereby constitutes and appoints DuBose Ausley, Robert D. Fagan
and Luis Guinot, Jr. and any one or more of them, attorneys and proxies of the
undersigned, with full power of substitution to each attorney and substitute,
for and in the name of the undersigned to appear and vote all shares of Common
Stock of TECO Energy, Inc. that the undersigned is entitled to vote at the
Annual Meeting of Shareholders of the Corporation to be held on April 18, 2001
at 11:30 A.M., and at any and all adjournments thereof, with all powers the
undersigned would have if personally present, hereby revoking all proxies
previously given.

SEE REVERSE (THIS PROXY IS CONTINUED AND IS TO BE SEE REVERSE
SIDE SIGNED ON REVERSE SIDE) SIDE

24
[TECO ENERGY LOGO]

702 N. FRANKLIN STREET
TAMPA, FL 33602

VOTE BY TELEPHONE VOTE BY INTERNET
----------------- ----------------
It's fast, convenient, and immediate! It's fast, convenient, and your vote
Call Toll-Free on a Touch-Tone Phone is immediately confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683).

FOLLOW THESE FOUR EASY STEPS: FOLLOW THESE FOUR EASY STEPS:
1. READ THE ACCOMPANYING PROXY 1. READ THE ACCOMPANYING PROXY
STATEMENT AND PROXY CARD. STATEMENT AND PROXY CARD.

2. CALL THE TOLL-FREE NUMBER 2. GO TO THE WEBSITE
1-877-PRX-VOTE (1-877-779-8683). HTTP://WWW.EPROXYVOTE.COM/TE

3. ENTER YOUR 14-DIGIT VOTER 3. ENTER YOUR 14-DIGIT VOTER
CONTROL NUMBER LOCATED ON YOUR CONTROL NUMBER LOCATED ON YOUR
PROXY CARD ABOVE YOUR NAME. PROXY CARD ABOVE YOUR NAME.

4. FOLLOW THE RECORDED INSTRUCTIONS. 4. FOLLOW THE INSTRUCTIONS PROVIDED.

YOUR VOTE IS IMPORTANT! YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/te anytime!

DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET.

DETACH HERE

[X] Please mark
votes as in
this example.

1. ELECTION OF DIRECTORS 2. PROPOSAL TO APPROVE AMENDMENT TO THE
The Board Recommends a Vote FOR all Nominees. 1996 EQUITY INCENTIVE PLAN
Instructions - To vote against any individual FOR AGAINST ABSTAIN
nominee(s), mark Box (C) and write the name(s) The Board Recommends a Vote FOR [ ] [ ] [ ]
of such nominee(s) above the line provided below. the Proposal.
Nominees: (01) T. L. Rankin, (02) W.D. Rockford,
(03) J. T. Touchton and (04) J.A. Urquhart In their discretion, the proxies are also authorized to
[ ] (A) [ ] (B) vote upon such other matters as may properly come before
FOR AGAINST the meeting.
ALL ALL
NOMINEES NOMINEES This proxy will be voted as specified, or if no
specification is made, FOR Proposals 1 and 2.
[ ]
-------------------------------------- PLEASE SIGN AND MAIL THIS PROXY TODAY.
(C) FOR ALL NOMINEES EXCEPT
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT. [ ]

INSTRUCTIONS - Signatures should correspond exactly
with the name or names of Shareholders as they appear
on this proxy. Persons signing as Attorney, Executor,
Administrator, Trustee or Guardian should give their
full titles. Execution on behalf of corporations should
be by a duly authorized officer and on behalf of
partnerships by a general partner or in the firm name
by another duly authorized person.

Signature: Date: Signature: Date:
------------------- ------------------- ------------------- ---------------------