SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934 (Amendment No. )
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/ / Preliminary Proxy Statement
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Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11 or 240.14a-12
TECO Energy, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) filing Proxy Statement if other than the Registrant)
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/X/ No fee required.
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and 0-11.
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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
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offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.<PAGE>
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[TECO Energy, Inc. Logo]
March 5, 1998
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 15, 1998
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 15, 1998 at 11:30
a.m., for the following purposes:
1. To elect four directors.
2. To consider and act on such other matters, including the
shareholder proposal on page 12 of the accompanying proxy
statement, as may properly come before the meeting.
Shareholders of record at the close of business on February 13,
1998 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 mark,
sign and date the enclosed proxy and to return it promptly in the
accompanying envelope. If you attend the meeting and wish to vote in
person, your proxy will not be used.
By order of the Board of Directors,
R. H. Kessel, Secretary
TECO ENERGY, INC.
P.O. Box 111 Tampa, Florida 33601 (813) 228-4111<PAGE>
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
p r o xy statement and the enclosed proxy are being mailed to
shareholders beginning on or about March 5, 1998.
VOTING OF SECURITIES
As of February 13, 1998, the record date for the determination of
shareholders entitled to vote at the meeting, the Corporation had
outstanding 131,565,152 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 giving 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 or a duly executed proxy
bearing a later date or by 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 four
nominees for director named below and against the shareholder proposal
described below.
The affirmative vote of a majority of the Common Stock of the
Corporation represented at the meeting in person or by proxy will be
required to elect directors and to approve the shareholder proposal.
For each of these matters, (i) abstentions will be considered as
represented at the meeting and, therefore, will be the equivalent of a
negative vote and (ii) 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. Anderson, Rankin, Touchton and
Urquhart have been nominated for terms expiring in 2001, and each 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.
2<PAGE>
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 Present
Last Five Years and Director Term
Name Age Other Directorships Held(1) Since(1) Expires
*Girard F. Anderson 65 Chairman of the Board, 1994 1998
President and Chief
Executive Officer, TECO
Energy, Inc.; formerly Chief
Operating Officer and
prior thereto Executive Vice
President-Utility Operations,
TECO Energy, Inc. and President
and Chief Operating Officer,
Tampa Electric Company
DuBose Ausley 60 Chairman, Ausley & McMullen 1992 1999
(attorneys), Tallahassee,
Florida; formerly Chairman,
Macfarlane, Ausley, Ferguson
& McMullen (attorneys),
Tallahassee, Florida and
President of a predecessor
firm; also a director of
Sprint Corporation and Capital
City Bank Group Inc.
Sara L. Baldwin 66 Private Investor; formerly 1980 2000
Vice President, Baldwin and
Sons, Inc. (insurance agency),
Tampa, Florida
Hugh L. Culbreath 76 Retired; formerly Chairman 1971 2000
of the Board, TECO Energy, Inc.
3<PAGE>
Principal Occupation During Present
Last Five Years and Director Term
Name Age Other Directorships Held(1) Since(1) Expires
James L. Ferman, Jr. 54 President, Ferman Motor 1985 1999
Car Company, Inc.
(automobile dealerships),
Tampa, Florida; also a
director of The Bank of
Tampa and its holding
company, The Tampa Banking
Company
Edward L. Flom 68 Retired; formerly Chairman 1980 2000
of the Board and Chief
Executive Officer, Florida Steel
Corporation (production and
fabrication of steel products),
Tampa, Florida; also a director
of Outback Steakhouse, Inc.
Henry R. Guild, Jr. 69 President and Director, 1980 2000
Northeast Investment
Management, Inc. (private
trustees and family
investment advisers), Boston,
Massachusetts
*Tom L. Rankin 57 Independent investment 1997 1998
manager; 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.
4<PAGE>
Principal Occupation During Present
Last Five Years and Director Term
Name Age Other Directorships Held(1) Since(1) Expires
Robert L. Ryan 54 Senior Vice President and 1991 1999
Chief Financial Officer,
Medtronic, Inc. (medical
devices manufacturer),
Minneapolis, Minnesota;
formerly Vice President-
Finance, Union Texas Petroleum
Holdings, Inc. (independent
oil and gas exploration and
production), Houston, Texas;
also a director of Dain Rauscher
Corporation and United Healthcare
Corporation
William P. Sovey 64 Chairman of the Board and 1996 2000
formerly Vice Chairman
and Chief Executive Officer,
Newell Co. (consumer
products), Freeport, Illinois;
also a director of Acme
Metals, Inc.
*J. Thomas Touchton 59 Managing Partner, The Witt- 1987 1998
Touchton Company
(private investment
partnership), Tampa, Florida;
also a director of 18 Merrill
Lynch-sponsored mutual funds
5<PAGE>
Principal Occupation During Present
Last Five Years and Director Term
Name Age Other Directorships Held(1) Since(1) Expires
*John A. Urquhart 69 President, John A. Urquhart 1991 1998
Associates (management
consultants), Fairfield,
Connecticut and Vice
Chairman and a director of
Enron Corp. (diversified
natural gas company), Houston,
Texas; formerly
Senior Vice President, G.E.
Industrial & Power
Systems, General Electric
Company; also a director
of Aquarion Company, Catalytica,
Inc. and Hubbell Incorporated
James O. Welch, Jr. 66 Retired; formerly Vice 1976 1999
Chairman, RJR 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 seven meetings in 1997. All directors
attended at least 75% of the meetings of the Board and Committees on which
they served, except for Mr. Sovey who attended 70% of such meetings.
The Corporation has standing Audit and Compensation Committees of
6<PAGE>
the Board of Directors. It does not have a Nominating Committee. The
Compensation Committee, which met three times in 1997, is currently
composed of Mrs. Baldwin and Messrs. Guild, Sovey, Urquhart and Welch
(Chairman). The Audit Committee, which met twice in 1997, is
currently composed of Messrs. Ferman, Flom, Ryan and Touchton
(Chairman). For additional information about the Compensation
Committee and the Audit Committee, see "Executive Compensation
Compensation Committee Report on Executive Compensation and
Information Concerning Auditors and Audit Committee below.
The Corporation paid $1,099,461 for legal services rendered during
1997 by Ausley & McMullen, of which Mr. Ausley serves as Chairman. In
addition, the Corporation paid $37,500 in 1997 for the use of an
outdoor recreational and conference facility operated by a partnership
in which Mr. Ausley has an indirect 50% interest.
Lykes Bros. Steamship Co., Inc., of which Mr. Rankin served as an
executive officer until May 1996, filed for reorganization under
Chapter 11 of the federal bankruptcy laws on October 11, 1995.
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. As a non-employee Chairman of the Board, Timothy L.
Guzzle received in 1998 the first of what were to have been quarterly
payments of $25,000. 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.
The Corporation has an agreement with Mr. Culbreath under which he
will provide consulting services to the Corporation through December
31, 2000 for compensation at a rate of $175,000 per year. Mr.
Culbreath served as Chief Executive Officer of the Corporation until
April 1989 and retired as an employee in April 1990 at which time the
consulting relationship commenced. The agreement provides a severance
7<PAGE>
benefit (in the event of termination of Mr. Culbreath s consultancy
following a change in control of the Corporation) equal to the total
compensation that would have been payable over the remaining term of
the agreement. This benefit is payable under the same circumstances
as the benefits described under "Executive Compensation Employment and
Change in Control Arrangements" below and will be reduced to the
extent that such benefit, taking into account any other compensation
p r ovided by the Corporation, would not be deductible by the
Corporation pursuant to Section 280G of the Internal Revenue Code.
1997 Director Equity Plan. All non-employee directors participate
in the Corporation s 1997 Director Equity Plan, which allows for a
variety of equity-based awards. In 1997, each non-employee director
received a grant of 325 shares and an option for 2,000 shares of
Common Stock, except for Mr. Rankin who received an option for 10,000
shares, as has been the practice for each newly elected director. 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.
Termination of Directors Retirement Plan. Upon shareholder
approval of the 1997 Director Equity Plan at the Corporation s 1997
Annual Meeting of Shareholders, the Directors Retirement Plan was
terminated. As described in the Corporation s 1997 Proxy Statement,
all participating directors received a one-time payment of the present
value of the income stream they would have received based on their
length of service as of December 31, 1996. In the aggregate, 29,421
shares of Common Stock and $441,127 was paid in connection with the
termination of this plan.
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, 1997.
The following table sets forth the shares of Common Stock
beneficially owned as of January 31, 1998 by the Corporation s
directors and nominees, its executive officers named in the summary
8<PAGE>
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, 1998; the percentage beneficially owned by all directors
and executive officers as a group as of such date is 1.53%.
Name Shares(1) Name Shares(1)
Girard F. Anderson 167,294 (2) J. Thomas Touchton 29,161
DuBose Ausley 29,735 John A. Urquhart 27,993 (11)
Sara L. Baldwin 28,079 (3) James O. Welch, Jr. 33,761 (12)
Hugh L. Culbreath 58,200 (4)(5) Alan D. Oak 158,628 (2)(13)
James L. Ferman, Jr. 33,392 (6) Keith S. Surgenor 110,268 (2)
Edward L. Flom 32,739 (7) Roger H. Kessel 153,044 (2)
Henry R. Guild, Jr. 108,240 (5)(8) Roger A. Dunn 29,089 (2)(14)
Tom L. Rankin 921,047 (9) All directors and
Robert L. Ryan 26,278 (10) executive officers
William P. Sovey 14,107 as a group
(19 persons) 2,012,474 (2)(15)
(1) The amounts listed include the following shares that are subject
to options granted under the Corporation s stock option plans:
Mr. Ausley, 20,000 shares; Mrs. Baldwin and Messrs. Culbreath,
Ferman, Flom, Guild, Ryan, Touchton and Welch, 22,000 shares
each; Mr. Rankin, 10,000 shares; Mr. Sovey, 12,000 shares; Mr.
Urquhart, 19,200 shares; Mr. Anderson, 112,000 shares; Mr. Oak,
43,000 shares; Mr. Surgenor, 77,000 shares; Mr. Kessel, 137,000
shares; Mr. Dunn, 14,690 shares; and all directors and executive
officers as a group, 681,490 shares.
(2) The amounts listed include the following shares that are held by
benefit plans of the Corporation for an officer's account: Mr.
Anderson, 8,987 shares; Mr. Oak, 10,324 shares; Mr. Surgenor,
3,107 shares; Mr. Kessel, 2,644 shares; Mr. Dunn, 523 shares;
and all directors and executive officers as a group, 31,677
shares.
9<PAGE>
(3) Includes 350 shares held by a trust of which Mrs. Baldwin is a
trustee.
(4) Includes 6,000 shares owned by Mr. Culbreath's wife, as to which
shares he disclaims any beneficial interest.
(5) Includes 30,200 shares held by Mr. Guild as trustee for the
benefit of Mr. Culbreath.
(6) Includes 2,584 shares owned jointly by Mr. Ferman and his wife.
Also includes 927 shares owned by Mr. Ferman's wife, as to which
shares he disclaims any beneficial interest.
(7) Includes 1,596 shares owned by Mr. Flom's wife, as to which
shares he disclaims any beneficial interest.
(8) Includes an additional 38,100 shares held by trusts of which Mr.
Guild is a trustee.
(9) Includes 1,343 shares owned by Mr. Rankin s wife, as to which
shares he disclaims any beneficial interest.
(10) Includes 2,000 shares owned jointly by Mr. Ryan and his wife.
(11) Includes 1,000 shares owned by Mr. Urquhart's wife, as to which
shares he disclaims any beneficial interest.
(12) Includes 2,000 shares owned by a charitable foundation of which
Mr. Welch is a trustee.
(13) Includes 71,774 shares held by a trust of which Mr. Oak is a
trustee. Also includes 20,130 shares owned by Mr. Oak's wife,
as to which shares he disclaims any beneficial interest.
(14) Includes 364 shares owned by Mr. Dunn s wife, as to which shares
he disclaims any beneficial interest.
(15) Includes a total of 14,693 shares owned jointly. Also includes
a total of 11,230 shares owned by spouses, as to which shares
beneficial interest is disclaimed.
10<PAGE>
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, 1997, and compares this return with that of
the S&P 500 Composite Index and the S&P Electric Utilities Index.
T h e graph assumes that the value of the investment in the
Corporation's Common Stock and each index was $100 on December 31,
1992 and that all dividends were reinvested.
[Performance Graph Goes here]
December 31,
1992 1993 1994 1995 1996 1997
TECO Energy, Inc. $100 $113 $107 $141 $139 $170
S&P Electric Utilities Index $100 $113 $98 $128 $128 $162
S&P 500 Index $100 $110 $112 $153 $189 $252
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 in 1996 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.
11<PAGE>
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 in general industry by organizations having comparable
revenues. 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. In 1997,
as in prior years, the Committee recommended and the Board approved
adjustments to the base salaries for each executive officer, including
the CEO, taking into account the midpoint of the officer's assigned
salary grade and the Committee's subjective evaluation of the
officer's individual performance. After this adjustment, Mr. Guzzle s
base salary was 98% of the midpoint of his assigned salary grade. In
November 1997, when Mr. Anderson was elected CEO, his salary was set
at 103% of the midpoint of his newly assigned 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 can range up to 60% of the midpoint of the salary
range for the CEO, 35-50% 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 the 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. In
this connection, the Committee recommended and the Board decided to
adjust the awards for 1997 by giving recognition to the gain from the
12<PAGE>
sale of a cogeneration facility and also, subject to closing, the sale
of certain offshore oil and gas assets.
The 1997 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 the Corporation's
return on equity. 60% of Mr. Guzzle s and Mr. Anderson s 1997 target
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.
In addition to measuring performance against the 1997 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. Guzzle s and Mr.
A n derson s 1997 target award was based on these qualitative
objectives. In Mr. Guzzle's case, these objectives were to provide the
leadership necessary for the growth and development of the Corporation
and to manage effectively the Corporation s external relations; in Mr.
Anderson's case, these objectives were to participate in the effective
management of changes in the electric industry and to support the
growth of the Corporation s diversified businesses with special
emphasis on the Peoples Gas companies. The Committee's review
consisted of a subjective evaluation of each of these executive s
performance, with a significant focus on long-term strategies to
increase earnings while preserving financial strength. Based on this
evaluation and the Corporation s 1997 net income and return on equity,
Mr. Guzzle and Mr. Anderson received incentive awards of 56% and 40%
of the midpoints of their respective salary grades. If the
supplemental awards relating to the pending sale of offshore assets
referred to above are paid, the above percentages for Mr. Guzzle and
Mr. Anderson will increase to 70% and 50%, respectively.
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
13<PAGE>
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 32,500 shares of restricted stock granted to the CEO in
April of 1997 reflected these policies 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 1997.
At the time of Mr. Anderson s election as CEO in November of 1997,
the Compensation Committee determined that Mr. Guzzle s retirement
would be a normal retirement for purposes of his outstanding stock
options and restricted stock. As a result, upon Mr. Guzzle s
retirement on January 5, 1998, his stock options became exercisable
for their remaining terms and the restrictions on his restricted stock
terminated.
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
e x ceeding 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, rather than modifying it to achieve a relatively small
decrease in its federal income tax liability. Compensation
attributable to outstanding stock options or stock options granted
under the Corporation's 1996 Equity Incentive Plan will not be subject
to the limitation under Section 162(m) under applicable regulations.
By the Compensation Committee,
James O. Welch, Jr. (Chairman)
Sara L. Baldwin
Henry R. Guild, Jr.
William P. Sovey
John A. Urquhart
14<PAGE>
The following tables set forth certain compensation information for both
of the individuals who served as Chief Executive Officer of the Corporation
during 1997 and each of the four other most highly compensated executive
officers of the Corporation and its subsidiaries.
<TABLE>
Summary Compensation Table
<CAPTION>
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(#)(4) sation(5)
<S> <C> <C> <C> <C> <C> <C> <C>
Timothy L. Guzzle 1997 $565,000 $361,709 $800,313 $23,298
Former Chairman 1996 526,250 480,000 491,150 32,010
of the Board (6)(7) 1995 493,750 415,000 $50,925 60,000 31,092
Girard F. Anderson 1997 418,250 193,247 386,613 17,487
Chairman, President 1996 386,250 250,000 298,450 31,106
and Chief Executive 1995 368,750 240,000 48,611 40,000 30,094
Officer (7)
Alan D. Oak 1997 272,500 103,000 179,763 11,715
Executive Vice 1996 241,750 160,000 143,350 15,248
President and 1995 225,000 135,000 44,264 17,000 14,432
Chief Operating
Officer (7)
</TABLE>
<TABLE>
<CAPTION>
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(#)(4) sation(5)
<S> <C> <C> <C> <C> <C> <C> <C>
Keith S. Surgenor 1997 315,000 135,000 280,725 10,421
President and Chief 1996 295,000 215,000 206,800 14,199
Operating Officer 1995 272,500 195,000 45,664 25,000 17,994
of Tampa Electric
Company
Roger H. Kessel 1997 258,500 100,000 179,763 11,161
Senior Vice 1996 248,500 163,000 143,350 11,063
President-General 1995 238,500 135,000 44,765 17,000 9,052
Counsel
Roger A. Dunn 1997 211,000 62,500 132,975 9,280
Vice President - 1996 202,500 90,000 108,100 9,186
Human Resources (8) 1995 89,502 42,000 15,000 462
</TABLE>
16<PAGE>
(1) As described in the Compensation Committee Report on Executive
Compensation above, the following supplemental incentive awards
for 1997 will be paid upon the completion of the pending sale of
offshore oil and gas assets: Mr. Guzzle, $84,104; Mr. Anderson,
$49,662; Mr. Oak, $30,000; Mr. Surgenor, $15,000; Mr. Kessel,
$27,500; and Mr. Dunn, $17,500.
(2) Participants in the Corporation's company car program received a
one-time cash payment in connection with its elimination in
1995. The amount set forth includes this payment, which in the
case of the above officers was $40,890.
(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, 1997 were as follows: Mr. Guzzle, 53,400 shares
($1,501,875); Mr. Anderson, 15,700 shares ($441,563); Mr. Oak,
13,400 shares ($376,875); Mr. Surgenor, 20,200 shares
($568,125); Mr. Kessel, 13,400 shares ($376,875); and Mr. Dunn,
10,000 shares ($281,250). The 12,700 shares granted to Mr.
Anderson in 1996 have vested, and the 15,700 shares granted to
him in 1997 will vest on April 16, 1998. The shares granted to
Mr. Guzzle vested on January 5, 1998, and the shares granted to
Mr. Kessel will vest on January 1, 1999. The other shares
listed above will vest more than three years after the date of
grant. Holders of restricted stock receive the same dividends
as holders of other shares of Common Stock.
(4) Stock appreciation rights that can only be exercised during
limited periods following a change in control of the Corporation
( LSAR s) were awarded in tandem with the options granted. Upon
exercise of an LSAR, the holder is entitled to an amount based
upon the highest price paid or offered for Common Stock during
the 30-day period preceding a change in control of the
Corporation, as defined under "Employment and Change in Control
Arrangements" below. The exercise of an option or an LSAR
results in a corresponding reduction in the other.
(5) The reported amounts for 1997 consist of $924 of premiums paid
by the Corporation to the Executive Supplemental Life Insurance
Plan for each of the named executive officers, with the balance
in each case being employer contributions under the TECO Energy
17<PAGE>
Group Retirement Savings Plan and Retirement Savings Excess
Benefit Plan.
(6) Mr. Guzzle served as Chairman of the Board until his death on
January 28, 1998.
(7) Prior to November 13, 1997, Mr. Guzzle served as Chairman of the
Board and Chief Executive Officer, Mr. Anderson served as
President and Chief Operating Officer and Mr. Oak served as
Senior Vice President - Finance and Chief Financial Officer.
(8) Mr. Dunn began his employment with the Corporation on July 17,
1995.
18<PAGE>
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Value
<CAPTION>
Number of Value of
Shares Underlying Unexercised
Unexercised In-The-Money
Options/SARs Options/SARs
at Year-End(#) at Year-End
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Timothy L. Guzzle 0 0 140,000/0 $ 955,000/0
Girard F. Anderson 0 0 112,000/0 821,749/0
Alan D. Oak 0 0 43,000/0 292,250/0
Keith S. Surgenor 0 0 77,000/0 628,374/0
Roger H. Kessel 0 0 137,000/0 1,461,185/0
Roger A. Dunn 310 1,055 14,690/0 93,649/0
</TABLE>
19<PAGE>
Pension Table
The following table shows estimated annual benefits payable under
the Corporation s pension plan arrangements for the named executive
officers other than Messrs. Guzzle, Kessel and Dunn.
Years of Service
5 10 15 20 or More
Final
Average Earnings
$200,000 . . . . . . $ 30,000 $ 60,000 $ 90,000 $120,000
250,000 . . . . . . 37,500 75,000 112,500 150,000
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
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 (i) the
officer's final 36 months of earnings or (ii) 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
amounts payable to Mr. Kessel are based on 5% of earnings and a
maximum of 12 years of service, and the amounts payable to Mr. Dunn
are based on 4% of earnings and a maximum of 10 years of service. The
amounts payable to Mr. Guzzle, who retired 10 months before attaining
his normal retirement age, were based on 6% of earnings and his
maximum of 10 years of service.
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. Anderson (38 years), Mr. Oak (24 years), Mr. Surgenor
(9 years), Mr. Kessel (8 years) and Mr. Dunn (2 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 62 for Messrs.
Anderson and Kessel, 62 and 10 months for Mr. Dunn and 63 for Messrs.
Oak and Surgenor.
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
20<PAGE>
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
following a change in control of the Corporation. A change in control
means in general the acquisition by any person of 30% or more of the
Common Stock, the change in a majority of the directors or the
approval by the shareholders of a merger or consolidation of the
Corporation in which the Corporation's shareholders do not have
majority voting power in the surviving entity or of the 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) following a change in
control, the Corporation will make a lump sum severance payment to the
o f ficer of three times annual salary and bonus. Upon such
termination, the severance agreements also provide for: (i) 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 three years following the date of termination and (ii)
participation in the life, disability, accident and health insurance
plans of the Corporation for such period except to the extent such
benefits are provided by a subsequent employer.
In addition, the terms of the restricted stock awarded to the named
executive officers provide for full vesting upon a change in control.
These officers will also receive 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.
SHAREHOLDER PROPOSAL
John J. Phillips, 8020 34th Avenue North, St. Petersburg, Florida
33710, the holder of 500 shares of Common Stock, has submitted the
following proposal:
RESOLVED: That the stockholders of TECO Energy Inc., assembled in
annual meeting in person and by proxy, hereby request that the Board
of Directors, starting as soon as possible, amend future proxy
materials to show each nominee for the Board of Directors listed
individually with a For or Against box before each nominee s name.
REASONS: The present proxy material is confusing because at first
21<PAGE>
glance, one is offered the option of either to vote (A) FOR ALL
NOMINEES or (B) AGAINST ALL NOMINEES then, there is an option (C)
FOR ALL NOMINEES EXCEPT . This is followed with a line barely long
enough to hold one name. The suggested proposal would eliminate any
possible misunderstanding. In our Democratic Society we would not
consider voting for any office in any other manner than individually;
it should be so with our company directors. We, the stockholders, are
the owners of this company. We have our money invested in the
company; the directors that we elect represent the stockholders and
are individually and collectively responsible to them for sound and
proper performance of their duties. They set the direction of the
Company through the Management, who are employees of the Company. The
most important function of the Board of Directors is Management
selection, evaluation, compensation, and replacement. Therefore, the
office of Director is very significant and any method which allows us
to make more intelligent selections is of great importance to us and
the company. This small change will greatly simplify the proxy
material. It will allow stockholders to consider each candidate in a
more clear, appropriate manner. I urge you to vote for this proposal;
it is for the benefit of our company.
The Board of Directors OPPOSES the adoption of the above resolution
for the following reasons:
Mr. Phillips submitted substantially the same proposal to the
Corporation four years ago, and it was overwhelmingly rejected by the
Corporation s shareholders.
The Securities and Exchange Commission has adopted a rule governing
shareholder proxy cards which specifically approves the format for the
election of directors used by the Corporation. In addition, the Board
believes that a large majority of the publicly held companies in the
United States use this same format, based on information obtained from
the American Society of Corporate Secretaries, Inc.
The Board disagrees with the claim that the current format is
confusing and lacks space for more than one name, given the
shareholders use of this format for many years without any apparent
difficulty and the widespread use by other companies of the same
format. Adoption of the proposal would, moreover, make the proxy
voting process less convenient and more costly since it would require
shareholders to check four boxes rather than one and would increase
the costs of tabulating the votes.
The Board of Directors recommends a vote AGAINST this shareholder
proposal.
INFORMATION CONCERNING AUDITORS AND AUDIT COMMITTEE
The Audit Committee reviews the scope of the audit procedures
followed by the independent accountants and the results of their
yearly audit, including the audited financial statements. The
Committee also reviews the Corporation's internal auditing policies
and procedures and the adequacy of the system of internal accounting
and financial controls. After its review of the yearly audit, the
22<PAGE>
Committee recommends the independent accountants to be appointed for
the following year.
Based on the Audit Committee s recommendation in April 1997, the
Board reappointed Coopers & Lybrand L.L.P. to serve as independent
accountants and to audit the Corporation s financial statements for
1997. Consistent with past procedures, independent accountants for
the current fiscal year will be appointed by the Board at its April
1998 meeting.
Representatives of Coopers & Lybrand L.L.P. 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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Corporation's executive officers and directors are required
under Section 16(a) of the Securities Exchange Act of 1934 to file
reports of ownership and changes in ownership with the Securities and
Exchange Commission and the New York Stock Exchange. Copies of those
reports must also be furnished to the Corporation.
Based solely on a review of the copies of reports furnished to the
Corporation with respect to 1997 and written representations that no
other reports were required, the Corporation believes that the
executive officers and directors of the Corporation have complied in a
timely manner with all applicable Section 16(a) filing requirements
except that (i) Girard F. Anderson filed one late report covering the
sale of 800 shares owned by a trust of which Mr. Anderson s wife was a
trustee and beneficiary and (ii) Roger A. Dunn filed one late report
covering two purchases totaling 300 shares.
DEADLINE FOR SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1999
Annual Meeting of Shareholders must be received on or before November
5, 1998 for inclusion in the Corporation s proxy materials relating to
that meeting. 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 before the third
Tuesday in April. 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 ten days of the third Tuesday in April and notice
thereof is mailed to shareholders or publicly disclosed less than 100
days in advance, 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 made,
23<PAGE>
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 $6,000 plus out-
of-pocket expenses. All expenses of this solicitation, including the
c o st 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.
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.
24<PAGE>
Appendix A
[TECO ENERGY LOGO]
1998 Annual Shareholders' Meeting
Wednesday, April 15, 1998, 11:30 A.M.
TECO Plaza
702 North Franklin Plaza
Tampa, Florida 33602
Attached below is your proxy card for the 1998 Annual Meeting of
Shareholders of TECO Energy, Inc.
Please detach the proxy card and mark the boxes to indicate how
your shares should be voted. Sign and return your proxy card as soon
as possible in the enclosed postage-paid envelope.
Please see the reverse side for shareholder services information.
25<PAGE>
Appendix A
DETACH HERE
PROXY
TECO ENERGY, INC.
Proxy for Annual Meeting of Shareholders, April 15, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
TECO ENERGY, INC.
The undersigned hereby constitutes and appoints Girard F. Anderson,
Hugh L. Culbreath and Henry R. Guild, 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. standing in the name of the undersigned as of the close
of business February 13, 1998, at the Annual Meeting of Shareholders
of the Corporation to be held in accordance with notice received at
the principal office of the Corporation, TECO Plaza, 702 North
Franklin Street, Tampa, Florida, on April 15, 1998 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.
THIS PROXY IS CONTINUED AND IS TO BE SIGNED ON REVERSE SIDE) SEE REVERSE
SIDE
26<PAGE>
Appendix A
[TECO ENERGY LOGO]
702 N. Franklin Street
Tampa, FL 33602
SHAREHOLDER SERVICES INFORMATION
TECO Energy offers electronic direct deposit of dividends
to your bank account. For more information and enrollment
forms, please contact our transfer agent, Boston EquiServe.
Questions regarding your individual account, changes of
address, replacement of lost certificates, dividends and
general transfer requirements should be directed to Boston
EquiServe at:
(800) 650-9222
Mailing Address
BankBoston, N.A.
c/o Boston EquiServe, L.P.
P.O. Box 8040
Boston, MA 02266-8040
TECO Energy, Inc. Shareholder Services
(800) 810-2032
Please retain this information for your future use.
27<PAGE>
Appendix A
DETACH HERE
/X/ Please mark votes as in this example.
1. ELECTION OF DIRECTORS
The Board Recommends a Vote FOR all Nominees.
Instructions - To vote against any individual nominee(s), mark Box
(C) and write the name(s) of such nominee(s) above the line provided
below.
Nominees: G.F. Anderson, T.L. Rankin, J.T. Touchton
and J.O. Welch, Jr.
/ / (A)FOR ALL NOMINEES / / (B) AGAINST ALL NOMINEES
/ / (C)_______________________
FOR ALL NOMINEES EXCEPT
2. SHAREHOLDER PROPOSAL
The Board Recommends a Vote AGAINST the Proposal.
/ / FOR / / AGAINST
/ / ABSTAIN
In their discretion, the proxies are also authorized to vote
upon such other matters as may properly come before the meeting.
This proxy will be voted as specified, or if no specification is
made, FOR Proposal 1 and AGAINST Proposal 2.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
PLEASE SIGN AND MAIL THIS PROXY TODAY.
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: ______
28<PAGE>
