SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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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 Section240.14a-12
FPL GROUP, 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.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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applies:
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FPL
GROUP
FPL GROUP, INC.
P.O. BOX 14000
700 UNIVERSE BOULEVARD
JUNO BEACH, FLORIDA 33408-0420
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 24, 2002
The Annual Meeting of Shareholders of FPL Group, Inc. will be held at the PGA
National Resort,
400 Avenue of the Champions, Palm Beach Gardens, Florida, at 10:00 a.m. on
Friday, May 24, 2002, to consider and act upon:
-Election of directors.
-Ratification of the appointment of Deloitte & Touche LLP as auditors.
-Such other matters as may properly come before the meeting.
The record date for shareholders entitled to notice of, and to vote at, the
Annual Meeting and any adjournment or postponement thereof is March 15, 2002.
Admittance to the meeting will be limited to shareholders. Shareholders who plan
to attend are requested to so indicate by marking the appropriate space on the
enclosed proxy card or following the telephonic or Internet instructions. If you
are a shareholder of record or you are a participant in any of FPL
Group, Inc.'s Employee Thrift Plans an admission ticket is included as part of
your proxy card. You will need your admission ticket, as well as a form of
personal identification, to attend the annual meeting. Shareholders whose shares
are held in street name (the name of a broker, trust, bank or other nominee)
should bring with them a legal proxy or a recent brokerage statement or letter
from the street name holder confirming their beneficial ownership of shares.
PLEASE MARK, DATE, SIGN, AND RETURN THE ENCLOSED PROXY CARD PROMPTLY SO THAT
YOUR SHARES CAN BE VOTED, REGARDLESS OF WHETHER YOU EXPECT TO ATTEND THE
MEETING. ALTERNATIVELY, YOU MAY CAST YOUR VOTE BY TELEPHONE OR ELECTRONICALLY BY
FOLLOWING THE INSTRUCTIONS ON YOUR PROXY CARD. IF YOU ATTEND, YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON.
By order of the Board of Directors.
/s/ Dennis P. Coyle
DENNIS P. COYLE
General Counsel and Secretary
Juno Beach, Florida
April 19, 2002
FPL GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 24, 2002
PROXY STATEMENT
ANNUAL MEETING
The Annual Meeting of Shareholders of FPL Group, Inc. ("FPL Group" or the
"Corporation") will be held at 10:00 a.m. on Friday, May 24, 2002. The enclosed
proxy is solicited by your Board of Directors, who urge you to respond in the
belief that every shareholder, regardless of the number of shares held, should
be represented at the Annual Meeting.
Whether or not you expect to be present at the meeting, please mark, sign, and
date the enclosed proxy card and return it in the enclosed envelope.
Alternatively, you may cast your vote by telephone or electronically by
following the instructions on your proxy card. Please note that there are
separate arrangements for using electronic voting depending on whether your
shares are registered in your name or in the name of a brokerage firm or bank.
You should check the proxy card or voting instructions forwarded by your broker,
bank or other holder of record to see which options are available. If voting by
telephone you should dial the toll-free number indicated on the proxy card; you
will then be prompted to enter the control number printed on your proxy card and
to follow subsequent instructions. Any shareholder giving a proxy may revoke it
at any time before it is voted at the meeting by delivering to the Corporation
written notice of revocation or a proxy bearing a later date, or by attending
the meeting in person and casting a ballot. You may also change your vote by
telephone or electronically. You may change your vote by using any one of these
methods regardless of the procedure used to cast your previous vote. Votes cast
in person or by proxy will be tabulated by the inspectors of election appointed
by the Board of Directors.
The shares represented by your proxy will be voted in accordance with the
specifications made on your proxy. Unless otherwise directed, such shares will
be voted:
-For the election as directors of the nominees named in this proxy
statement.
-For the ratification of the appointment of Deloitte & Touche LLP as
auditors.
-In accordance with the best judgment of the persons acting under the proxy
concerning other matters that are properly brought before the meeting and
at any adjournment or postponement thereof.
Shareholders of record at the close of business on March 15, 2002, are entitled
to notice of, and to vote at, the meeting. Each share of Common Stock, $.01 par
value, of the Corporation is entitled to one vote. At the close of business on
March 15, 2002, the Corporation had 175,944,248 shares of Common Stock
outstanding and entitled to vote. The Corporation anticipates first sending this
proxy statement and the enclosed proxy card to shareholders on or about
April 19, 2002.
In determining the presence of a quorum at the Annual Meeting, abstentions are
counted and broker non-votes are not counted. The current Florida Business
Corporation Act (the "Act") provides that directors are elected by a plurality
of the votes cast and all other matters are approved if the votes cast in favor
of the action exceed the votes cast against the action (unless the matter is one
for which the Act or the articles of incorporation require a greater vote).
Therefore, under the Act, abstentions and broker non-votes have no legal effect
on whether a matter is approved. However, FPL Group's Bylaws, which were adopted
prior to the current Act and remain in effect, provide that any matter,
including the election of directors, is to be approved by the affirmative vote
of a majority of the total number of shares represented at the meeting and
entitled to vote on such matter (unless the matter is one for which the Act
1
or some other law or regulation expressly requires or permits the Board of
Directors to require a greater vote, or FPL Group's Articles of Incorporation or
Bylaws require a greater or different vote). Therefore, as to any matter voted
on by shareholders at the Annual Meeting, including the election of directors,
the affirmative vote of a majority of the total number of shares represented at
the meeting and entitled to vote is required, abstentions have the same effect
as a vote against a matter, and broker non-votes have no legal effect.
BUSINESS OF THE MEETING
PROPOSAL 1: ELECTION OF DIRECTORS
Listed below are the eleven nominees for election as directors, their principal
occupations, and certain other information regarding them. Unless otherwise
noted, each director has held his or her present position continuously for five
years or more and his or her employment history is uninterrupted. Directors
serve until the next Annual Meeting of Shareholders or until their respective
successors are elected and qualified. Unless you specify otherwise in your
proxy, it will be voted for the election of the listed nominees.
H. JESSE ARNELLE Mr. Arnelle, 68, became of counsel to
[PHOTO] Womble, Carlyle, Sandridge & Rice, a North Carolina-based
law firm, in November 1997, after retiring in 1996 as a
senior partner from the law firm of Arnelle, Hastie, McGee,
Willis & Greene, a law firm whose predecessor he co-founded
in 1985. He is a director of Armstrong World Industries,
Inc., Eastman Chemical Company, Gannett Corporation,
Textron, Inc., Waste Management, Inc., and Metropolitan
Series Fund, Inc. He served from 1992 to 1997 as
vice-chairman and from 1997 to 1998 as chairman of the
Pennsylvania State University Board of Trustees. Mr. Arnelle
has been a director of FPL Group since 1990.
SHERRY S. BARRAT Mrs. Barrat, 52, is chairman and chief
[PHOTO] executive officer of Northern Trust Bank of California, N.A.
Prior to being elected to that office in January 1999, she
was president of Northern Trust Bank of Palm Beach and
Martin Counties, Florida. She serves on the boards of The
Employers Group, the Los Angeles Area Chamber of Commerce,
The Los Angeles World Affairs Council, The Anderson School
of UCLA Board of Visitors, California State
University/Northridge Foundation, the Los Angeles Sports and
Entertainment Commission and Town Hall. Mrs. Barrat has been
a director of FPL Group since 1998.
ROBERT M. BEALL, II Mr. Beall, 58, is chairman and chief
[PHOTO] executive officer of Beall's, Inc., the parent company of
Beall's Department Stores, Inc., and Beall's Outlet Stores,
Inc., which operate retail stores located from Florida to
California. Mr. Beall is a director of Blue Cross/Blue
Shield of Florida and the National Retail Federation. He is
also past chairman of the Florida Chamber of Commerce and a
member of the Florida Council of 100. Mr. Beall has been a
director of FPL Group since 1989.
2
J. HYATT BROWN Mr. Brown, 64, is chairman, president and
[PHOTO] chief executive officer of Brown & Brown, Inc., an insurance
broker based in Daytona Beach and Tampa, Florida. He is a
director of SunTrust Banks, Inc., BellSouth Corporation,
Rock-Tenn Company, SCPIE Holdings, and the International
Speedway Corporation. Mr. Brown is a former member of the
Florida House of Representatives and served as Speaker of
the House from 1978 to 1980. He is a member and past
chairman of the Board of Trustees of Stetson University. Mr.
Brown has been a director of FPL Group since 1989.
ARMANDO M. CODINA Mr. Codina, 55, is the chairman and chief
[PHOTO] executive officer of Codina Group, Inc., a real estate
development company based in Coral Gables, Florida. He has
served in that capacity with Codina Group, Inc. and its
predecessors since 1979. He is a director of AMR
Corporation, BellSouth Corporation, General Motors
Corporation, and Winn-Dixie Stores, Inc. He also serves as
chairman of the Board of Trustees of Florida International
University. Mr. Codina has been a director of FPL Group
since 1994.
WILLARD D. DOVER Mr. Dover, 71, has been a principal of the
[PHOTO] Fort Lauderdale law firm of Niles, Dobbins, Meeks, Raleigh &
Dover since 1998. For 40 years prior thereto he was a member
of the law firm of Fleming, O'Bryan & Fleming, P.A. He is a
former chairman of the Florida Council of 100 and of the
Florida Council of Economic Education. He has previously
served as a trustee of the Nova Southeastern University Law
Center and Florida Atlantic University Foundation, Inc. and
as chairman of the Florida Atlantic Research and Development
Authority. Mr. Dover has been a director of FPL Group since
1989.
ALEXANDER W. DREYFOOS, JR. Mr. Dreyfoos, 70, is the owner
[PHOTO] and chief executive officer of the Dreyfoos Group of
companies. These include Photo Electronics Corporation, a
developer of electronic equipment for the photographic
industry, which he founded in 1963. He is a director of
First Union National Bank of Florida. He serves as chairman
of the Raymond F. Kravis Center for the Performing Arts and
a trustee of M.I.T. Corporation. He is a member of the
Florida Council of 100 and a founding member and former
chairman of the Economic Council of Palm Beach County. Mr.
Dreyfoos has been a director of FPL Group since 1997.
3
PAUL J. EVANSON Mr. Evanson, 60, became the president of
[PHOTO] Florida Power & Light Company, FPL Group's principal
subsidiary, and a director of FPL Group in 1995 after having
served as vice president, finance, and chief financial
officer of FPL Group and senior vice president, finance, and
chief financial officer of Florida Power & Light Company
since 1992. Prior to that, he was president and chief
operating officer of Lynch Corporation, a diversified
holding company. Mr. Evanson is a director of Florida Power
& Light Company and Lynch Interactive Corporation.
LEWIS HAY III Mr. Hay, 46, became a director, president and
[PHOTO] chief executive officer of FPL Group in June 2001, and
chairman of FPL Group and chairman and chief executive
officer of Florida Power & Light Company, in January, 2002.
He joined FPL Group in 1999 as vice president, finance and
chief financial officer. From March 2000 until December 2001
he served as president of FPL Group's non-utility power
generation subsidiary, FPL Energy, LLC. For eight years
prior to joining FPL Group, Mr. Hay was executive vice
president and chief financial officer of U.S. Foodservice,
Inc. He is a director of Florida Power & Light Company and
Harris Corporation.
FREDERIC V. MALEK Mr. Malek, 65, has been chairman of
[PHOTO] Thayer Capital Partners, a merchant bank, since 1993. Mr.
Malek was formerly the president and vice chairman,
successively, of Northwest Airlines, Inc., and prior to that
was president of Marriott Hotels and Resorts. He served as
campaign manager for Bush/Quayle `92. Mr. Malek also served
in several U.S. government positions, including deputy
director of the Office of Management and Budget. He is a
director of Aegis Communications Group, Inc., American
Management Systems, Inc., Automatic Data Processing
Corporation, Inc., CB Richard Ellis, Classic Vacation Group,
Inc., Manor Care, Inc., Northwest Airlines, Inc., and 22
investment companies in the Brinson fund complex. Mr. Malek
has been a director of FPL Group since 1987.
PAUL R. TREGURTHA Mr. Tregurtha, 66, is chairman and chief
[PHOTO] executive officer of Mormac Marine Group, Inc., a maritime
company, and of Moran Transportation Company, a tug/barge
enterprise. He is also vice chairman of Interlake Steamship
Company and Lakes Shipping Company. Mr. Tregurtha previously
served as chairman, chief executive officer, president and
chief operating officer of Moore McCormack Resources, Inc.,
a natural resources and water transportation company. Mr.
Tregurtha is a director of Teachers Insurance and Annuity
Association, Fleet Boston Financial Corporation, and
Alliance Resource Management GP, LLC. Mr. Tregurtha has been
a director of FPL Group since 1989.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES.
4
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board has appointed
Deloitte & Touche LLP, independent public accountants, to audit the accounts of
FPL Group and its subsidiaries for the fiscal year ending December 31, 2002, and
to perform such other services as may be required of them. If the shareholders
do not ratify the appointment, it will be reconsidered by the Audit Committee
and the Board of Directors.
Representatives of Deloitte & Touche LLP will be present at the 2002 Annual
Meeting and will have an opportunity to make a statement and to respond to
appropriate questions raised at the meeting.
Audit Fees
The aggregate fees billed by Deloitte & Touche LLP, the member firms of Deloitte
Touche Tohmatsu, and their respective affiliates (collectively, Deloitte &
Touche) for professional services rendered for the audit of FPL Group's annual
consolidated financial statements for the fiscal year ended December 31, 2001
and for the reviews of the financial statements included in FPL Group's
Quarterly Reports on Form 10-Q for that fiscal year were $1,013,000.
Financial Information Systems Design and Implementation Fees
The aggregate fees billed by Deloitte & Touche for professional services
rendered for information technology services relating to financial information
systems design and implementation for the fiscal year ended December 31, 2001,
were $3,220,000, all of which were billed by Deloitte Consulting. Deloitte &
Touche has recently announced its intent to separate Deloitte Consulting from
the firm.
All Other Fees
The aggregate fees billed by Deloitte & Touche for services rendered to the
Corporation other than the services described above under Audit Fees and
Financial Information Systems Design and Implementation Fees, for the fiscal
year ended December 31, 2001, were $2,227,000, including audit related services
of approximately $1,001,000, merger-related services of $1,116,000 and non-audit
services of $110,000. These amounts include $1,323,000 of fees billed by
Deloitte Consulting. Audit related services generally include fees for comfort
letters and consents related to registration statements, audits of employee
benefit plans, due diligence pertaining to acquisitions and consultation on
accounting standards or transactions.
The Audit Committee has considered whether the provision of the non-audit
services is compatible with maintaining Deloitte & Touche LLP's independence.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION.
5
INFORMATION ABOUT THE CORPORATION AND MANAGEMENT
PERFORMANCE GRAPHS
The graph below compares the cumulative total returns, including reinvestment of
dividends, of FPL Group Common Stock with the companies in the Standard & Poor's
500 Index (S&P 500), the Standard & Poor's Electric Companies Index (S&P
Electrics) and the Dow Jones Electric Utilities Index (Dow Jones Electrics). The
comparison covers the five years ended December 31, 2001, and is based on an
assumed $100 investment on December 31, 1996, in each of the S&P 500, the S&P
Electrics, the Dow Jones Electrics and FPL Group Common Stock. The S&P Electrics
is based on the performance of 27 companies; the Dow Jones Electrics is based on
the performance of 66 companies. The S&P Electrics is more heavily weighted
toward companies engaged in the traditional state-regulated electric utility
business. The Dow Jones Electrics, which includes all of the companies included
in the S&P Electrics, also includes a number of companies that are exclusively
or primarily engaged in the independent power production business. FPL Group is
primarily engaged in the traditional electric utility business, but is
increasingly engaged in the independent power production business as well.
Therefore, both indexes have been selected for comparison purposes. FPL Group is
included in all three indexes.
TOTAL RETURN FOR THE
FIVE YEARS ENDED DECEMBER 31, 2001
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Value of $100 on December 31,
FPL GROUP S & P ELECTRICS DOW JONES ELECTRICS S & P 500
1996 100 100 100 100
1997 134 126 129 133
1998 144 146 148 171
1999 104 118 126 208
2000 182 180 200 189
2002 149 160 159 166
6
In 1990, FPL Group announced its intention to focus on its core utility and
other energy-related businesses and to exit businesses not related to its core
strengths. Since then, FPL Group has realigned its senior management team,
reorganized Florida Power & Light Company, established FPL Energy, LLC, and
divested essentially all its non-energy-related businesses. The graph below
shows the cumulative total return, including reinvestment of dividends, of FPL
Group Common Stock since these fundamental changes were made. It covers the ten
years ended December 31, 2001, and assumes the investment of $100 on
December 31, 1991.
TOTAL RETURN FOR THE
TEN YEARS ENDED DECEMBER 31, 2001
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Value of $100 on December 31,
FPL GROUP S & P ELECTRICS DOW JONES ELECTRICS S & P 500
1991 100 100 100 100
1992 105 106 107 108
1993 121 119 120 118
1994 115 104 105 120
1995 159 136 137 165
1996 164 136 140 203
1997 220 171 181 271
1998 237 198 208 348
1999 171 159 177 421
2000 299 245 281 383
2001 244 217 223 338
7
COMMON STOCK OWNERSHIP OF MANAGEMENT AND OTHERS
The following table indicates how much FPL Group Common Stock is beneficially
owned by (a) each person known by FPL Group to own 5% or more of the Common
Stock, (b) each of FPL Group's directors and each executive officer named in the
Summary Compensation Table, and (c) the directors and executive officers as a
group.
NUMBER
OF SHARES(A)
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PRINCIPAL SHAREHOLDERS:
Fidelity Management Trust Company........................... 15,551,981(b)
82 Devonshire Street
Boston, Massachusetts 02109
Wellington Management Company, LLP.......................... 16,377,907(c)
75 State Street
Boston, Massachusetts 02109
DIRECTORS AND EXECUTIVE OFFICERS:
H. Jesse Arnelle............................................ 3,585(d)
Sherry S. Barrat............................................ 3,500(d)
Robert M. Beall, II......................................... 5,820(d)
James L. Broadhead.......................................... 409,307(e)
J. Hyatt Brown.............................................. 12,650(d)(f)
Armando M. Codina........................................... 4,300(d)
Dennis P. Coyle............................................. 104,574(d)(e)(f)
Willard D. Dover............................................ 3,200(d)
Alexander W. Dreyfoos, Jr................................... 6,900(d)
Paul J. Evanson............................................. 164,461(d)(e)
Lewis Hay III............................................... 122,927(d)(e)
Larry J. Kelleher........................................... 109,493(d)(e)
Frederic V. Malek........................................... 3,300(d)
Armando J. Olivera.......................................... 63,880(d)(e)
Paul R. Tregurtha........................................... 5,300(d)
All directors and executive officers as a group............. 1,122,452(d)(e)(f)(g)
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(a) Information is as of February 28, 2002, except as indicated. Unless
otherwise indicated, each person has sole voting and sole investment power.
(b) Represents 8.9% of the Common Stock outstanding; shares held as Trustee
under the Florida Power & Light Company Master Thrift Plan Trust. The
Trustee disclaims beneficial ownership of such securities. Shares are voted
by the Trustee in accordance with instructions of the participants to whose
accounts such shares are allocated, and a proportionate number of shares
which are held in the plans but not yet allocated to participants are voted
in accordance with such instructions. Leveraged ESOP shares held in the
plans which have been allocated to participants' accounts, but for which
voting instructions are not received, are voted by the Trustee in the same
proportions as those shares which have been voted by participants.
(c) Represents 9.3% of the Common Stock outstanding. This information has been
derived from Schedule 13G/A of Wellington Management Company, LLP ("WMC"),
filed with the Securities and Exchange Commission on February 12, 2002. All
shares are owned of record by clients of WMC, which reported shared voting
power over 8,633,740 shares and shared dispositive power over 16,377,907
shares.
(d) Includes 15,000; 18,750; 32,500; 25,000; and 16,000 shares of restricted
stock held by Messrs. Coyle, Evanson, Hay, Kelleher and Olivera,
respectively; 2,300 shares of restricted stock held by each of
Messrs. Arnelle, Beall, Brown, Codina, Dover, Malek, and Tregurtha; 2,500
shares of restricted stock held by each of Mrs. Barrat and Mr. Dreyfoos; and
a total of 191,850 shares of restricted stock held by
8
all directors and executive officers as a group, as to which each person has
voting power, but not investment power.
(e) Includes options held by Messrs. Broadhead, Coyle, Evanson, Hay, Kelleher,
and Olivera to purchase 250,000; 50,000; 75,000; 75,000; 50,000; and 25,000
shares, respectively, and options to purchase a total of 525,000 shares for
all directors and executive officers as a group.
(f) Includes 350 shares owned by children of Mr. Brown who are over 21 years of
age, as to which Mr. Brown disclaims beneficial ownership; and 25 shares
owned by Mr. Coyle's wife, as to which Mr. Coyle disclaims beneficial
ownership.
(g) Less than 1% of the Common Stock outstanding.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Corporation's directors and executive officers are required to file initial
reports of ownership and reports of changes of ownership of Common Stock with
the Securities and Exchange Commission. Based upon a review of these filings and
written representations from the directors and executive officers, all required
filings were timely made in 2001 except for the late filing of a Form 3, and one
transaction involving 153 phantom shares credited as of July 30, 2001 under the
FPL Group, Inc. Supplemental Executive Retirement Plan to a Supplemental
Matching Contribution Account, for Mr. Stall.
DIRECTOR MEETINGS AND COMMITTEES
The Board of Directors met ten times in 2001. Each director attended at least
75% of the total number of Board meetings and meetings of the committees on
which he or she served.
FPL Group's Audit Committee, comprised of Mrs. Barrat and Messrs. Arnelle, Beall
(Chair), Dover, and Dreyfoos met eight times in 2001. An updated written charter
for the Committee was approved by the Board in May 2000. As set forth in more
detail in the charter, the Audit Committee assists the Board in monitoring the
financial reporting process, the internal control structure and the independence
and performance of the internal audit department and the independent public
accountants. During the year, the Board examined the composition of the Audit
Committee in light of the adoption by the New York Stock Exchange of new rules
governing audit committees. Based upon this examination, the Board confirmed
that all members of the Audit Committee are "independent" within the meaning of
the Exchange's new rules.
The Compensation Committee, comprised of Messrs. Arnelle, Beall, Brown (Chair),
Codina, and Tregurtha, met seven times in 2001. Its functions include reviewing
and approving the executive compensation program for FPL Group and its
subsidiaries; setting performance targets; assessing executive performance;
making grants of salary, annual incentive compensation, and long-term incentive
compensation; and approving certain employment agreements.
The Executive Committee, comprised of Messrs. Broadhead (Chair), Beall, Brown,
Codina, Malek, and Tregurtha, met three times in 2001. It functioned as the
Nominating Committee through 2001. Starting in 2002 that responsibility has been
assumed by the Governance Committee, which is comprised of Mrs. Barrat and
Messrs. Codina (Chair), Dover, Dreyfoos and Tregurtha. As such, it is
responsible for identifying and evaluating potential nominees for election to
the Board and recommends candidates for all directorships to be filled by the
shareholders or the Board. The Committee will consider potential nominees
recommended by any shareholder entitled to vote in elections of directors.
Potential nominees must be submitted in writing to the Secretary, P.O. Box
14000, 700 Universe Boulevard, Juno Beach, Florida 33408-0420 and must be
received not later than 90 days in advance of the Annual Meeting of
Shareholders.
9
DIRECTOR COMPENSATION
Directors of FPL Group who are salaried employees of FPL Group or any of its
subsidiaries do not receive any additional compensation for serving as a
director or committee member. Non-employee directors of FPL Group receive an
annual retainer of $32,000 plus 700 shares of restricted Common Stock.
Non-employee committee chairpersons receive an additional annual retainer of
$4,000. A fee of $1,300 is paid to non-employee directors for each Board or
committee meeting attended. Newly-elected non-employee directors are awarded 200
shares of restricted Common Stock when they join the Board.
Effective November 1, 1996, FPL Group's Non-Employee Director Retirement Plan
was terminated. Retirement benefits of non-employee directors in office in 1996
and not retiring at or prior to the 1997 annual shareholders' meeting were
converted to share units of FPL Group Common Stock. Such directors will be
entitled to payment of the then current value of these share units upon ending
service as a Board member at or after age 65. Upon his retirement from the Board
in May 2001, Marshall Criser received $425,457, which he elected to receive in
the form of an annuity, for the value of his share units.
Non-employee directors are covered by travel and accident insurance while on FPL
Group business. Total premiums attributable to such directors amounted to $2,888
for 2001.
AUDIT COMMITTEE REPORT
The Audit Committee submits the following report for 2001:
In accordance with its written charter adopted by the Board of Directors
(Board), the Audit Committee of the Board (Committee) assists the Board in
fulfilling its responsibility for oversight of the quality and integrity of the
accounting, auditing and financial reporting practices of the Corporation.
During 2001, the Committee met eight times, including four meetings where the
Committee discussed the interim financial information contained in each
quarterly earnings announcement with the chief accounting officer and
independent auditors prior to public release.
In discharging its oversight responsibility as to the audit process, the Audit
Committee obtained from the independent auditors a formal written statement
describing all relationships between the auditors and the Corporation that might
bear on the auditors' independence consistent with Independence Standards Board
Standard No. 1, "Independence Discussions with Audit Committees," discussed with
the auditors any relationships that may impact their objectivity and
independence and satisfied itself as to the auditors' independence. The
Committee also discussed with management, the internal auditors and the
independent auditors the quality and adequacy of the Corporation's internal
controls and the internal audit function's organization, responsibilities,
resources and staffing. The Committee reviewed with both the independent and the
internal auditors their audit plans, audit scope, and identification of audit
risks.
The Committee discussed and reviewed with the independent auditors all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements. The Committee also discussed the results of the
internal audit examinations.
The Committee reviewed the audited financial statements of the Corporation for
the year ended December 31, 2001, with management and the independent auditors.
Management has the responsibility for the preparation of the Corporation's
financial statements, and the independent auditors have the responsibility for
the examination of those statements.
10
Based on the above-mentioned review and discussions with management and the
independent auditors, the Committee recommended to the Board that the
Corporation's audited financial statements be included in its Annual Report on
Form 10-K for the year ended December 31, 2001, for filing with the Securities
and Exchange Commission.
Respectfully submitted,
Robert M. Beall, II, Chairman
H. Jesse Arnelle
Sherry S. Barrat
Willard D. Dover
Alexander W. Dreyfoos, Jr.
COMPENSATION COMMITTEE REPORT
The Compensation Committee submits the following report for 2001:
FPL Group's executive compensation program is designed to align compensation
with the Corporation's business strategy, its goals and values, and the return
to its shareholders. The program is also designed to provide a competitive
compensation package, both in terms of its components and overall, that will
attract and retain key executives critical to the success of the Corporation.
The Board of Directors adopted, and in 1994 and 1999 shareholders approved, an
Annual Incentive Plan and a Long Term Incentive Plan that are intended to
prevent, under normal circumstances, the loss of the federal income tax
deductions available to the Corporation for the amount of any compensation paid
thereunder to the chief executive officer and the four other most
highly-compensated officers. In accordance with these plans, the Committee
structured the 2001 executive compensation program to qualify for deduction,
under normal circumstances, all compensation paid thereunder to these officers,
and it intends to do likewise with the executive compensation programs for 2002
and future years as long as doing so is compatible with what the Committee
considers to be a sound compensation program.
The Committee determines an executive's competitive total level of compensation
based on information drawn from a variety of sources, including utility and
general industry surveys, proxy statements, and independent compensation
consultants. The Corporation's "comparator group" consists of twelve electric
utilities (all of which are included in the Dow Jones Electric Utilities Index
and eleven of which are included in the Standard & Poor's Electric Companies
Index) and twelve telecommunications and general industry companies located in
the Eastern United States. Electric utility industry trends (i.e., reregulation
and increasing competition) and the need to recruit from outside the industry
are the principal reasons for including companies other than electric utilities
in the comparator group. In 2001, compensation for James L. Broadhead, Lewis Hay
III, Paul J. Evanson, Dennis P. Coyle, Lawrence J. Kelleher, and Armando J.
Olivera was affected by the terms of their Employment Agreements (see
"Employment Agreements" herein).
There are three components to the Corporation's executive compensation program:
base salary, annual incentive compensation, and long-term incentive
compensation. In 2001, the three components were structured so that base salary
represented 25% to 60% of an executive officer's total targeted compensation,
annual incentive compensation represented 15% to 25% of such compensation, and
long-term incentive compensation represented 20% to 55% of such compensation.
The more senior the position, the greater the portion of compensation that is
based on performance.
11
Base salaries are set by the Committee and are designed to be competitive with
the comparator group companies described above. Generally, the Committee targets
salary levels between the second and third quartiles of the comparator group,
adjusted to reflect the individual's job experience and responsibilities.
Increases in base salaries are based on the comparator group's practices, the
Corporation's performance, the individual's performance, and increases in cost
of living indices. The corporate performance measures used in determining
adjustments to executive officers' base salaries are the same performance
measures used to determine annual incentive compensation, weighted as discussed
below in regard to the chief executive officer's compensation. Base salaries are
reviewed and adjusted annually. Employment Agreements in effect for
Messrs. Broadhead, Hay, Evanson, Coyle, Kelleher, and Olivera provide for each
officer that his base salary shall be at least equal to his base salary as in
effect in 2000 and shall be reviewed at least annually and increased
substantially consistent with increases in base salary awarded to peer
executives of the Corporation, but not less than increases in the consumer price
index.
Annual incentive compensation is based on the attainment of net income goals for
the Corporation which are established by the Committee at the beginning of the
year. The amounts earned on the basis of this performance measure are subject to
reduction based on the degree of achievement of other corporate performance
measures (and in the case of Florida Power & Light Company, business unit
performance measures), and in the discretion of the Committee. These other
corporate performance measures, which for 2001 consisted of the financial and
operating indicators discussed below in regard to the chief executive officer's
compensation, and business unit performance measures were also established by
the Committee at the beginning of the year. For 2001, the net income goal was
met, and the average level of achievement of the other performance measures
exceeded the targets. However, the amounts paid out for 2001 were less than the
amounts that could have been paid based on the attainment of the net income
goal.
Long-term incentive compensation is based primarily on the average level of
achievement under the annual incentive plans, typically over a four-year period
for performance share awards, and on the average annual total shareholder return
of FPL Group as compared to that of the Dow Jones Electric Utilities Index
companies, typically over a three-year period for shareholder value awards. In
2001, in accordance with the terms of their Employment Agreements, performance
share awards to certain executive officers (including those listed in the
Summary Compensation Table) were made for one-, two-, three-, and four-year
periods and shareholder value awards to those officers were made for one-, two-,
and three-year periods. Targeted awards, in the form of shares granted under the
Corporation's Long Term Incentive Plan, are made at the beginning of the period.
Since one of the goals of the performance share program is to link directly the
financial interests of FPL Group's shareholders and senior management,
performance share award payouts (except for cash for the payment of incomes
taxes) are made in shares of Common Stock which the recipient is expected,
consistent with general guidelines, to hold for the duration of his or her
employment. Long-term incentive compensation also includes stock options and
restricted stock in amounts intended to ensure that the Corporation's total
executive compensation program is competitive, in terms of both composition and
amount, with the compensation programs of other companies with which the
Corporation competes for executive talent.
Mr. Broadhead was FPL Group's Chairman during 2001 and its chief executive
officer until June 11, 2001, and was Chairman and CEO of Florida Power & Light
Company during 2001. For his service in those capacities Mr. Broadhead was paid
$1,100,000 in base salary, $100,000 of which he agreed to defer, $1,229,200 in
annual incentive compensation, and $2,246,933 (consisting of 26,051 shares of
Common Stock and $898,794 in cash) in long term incentive compensation.
Mr. Broadhead was awarded options for 250,000 shares of Common Stock and 50,000
shares of restricted stock in accordance with the terms of his Employment
Agreement which became effective December 15, 2000. The options and restricted
stock were scheduled to vest 50% on February 12, 2002 and the balance on
February 12, 2003; however, in connection with Mr. Broadhead's retirement, and
partially as consideration for his services under a Consulting Agreement
(described herein under "Consulting Agreement and Certain Retirement
12
Benefits") the Committee determined to accelerate vesting to January 2, 2002.
Mr. Hay served as President of FPL Energy, LLC during 2001, and became FPL
Group's chief executive officer beginning June 11, 2001. For his service in
those capacities, Mr. Hay was paid $607,550 in base salary, $637,500 in annual
incentive compensation, and $416,432 (consisting of 4,828 shares of Common Stock
and $166,583 in cash) in long term incentive compensation. Mr. Hay was awarded
options for 150,000 shares of Common Stock and 22,500 shares of restricted
stock, all of which vest 50% on February 12, 2002 and the balance one year
later, in accordance with the terms of his Employment Agreement. In addition,
subsequent to his election as chief executive officer of FPL Group, and in light
of his increased responsibilities in that office, the Committee awarded him
options for an additional 50,000 shares of Common Stock, and 10,000 shares of
restricted stock, which vest one-third each year over the period ending
June 16, 2004.
The base salaries of Messrs. Broadhead and Hay as chief executive officer of FPL
Group reflect the Committee's assessment of Mr. Broadhead's and Mr. Hay's
overall performance and an analysis of the salaries of the chief executive
officers in the comparator group. Mr. Broadhead's and Mr. Hay's annual incentive
compensation for 2001 was based on the achievement of the Corporation's net
income goals and the following performance measures for Florida Power & Light
Company ("FPL") (weighted 75%) and the non-utility and/or new businesses
(weighted 25%) and upon certain qualitative factors. For FPL, the incentive
performance measures were financial indicators (weighted 50%) and operating
indicators (weighted 50%). The financial indicators were operations and
maintenance costs, capital expenditure levels, net income, regulatory return on
equity, and operating cash flow. The operating indicators were service
reliability as measured by the frequency and duration of service interruptions
and service unavailability; system performance as measured by availability
factors for the fossil power plants and an industry index for the nuclear power
plants; employee safety; number of significant environmental violations;
customer satisfaction survey results; load management installed capability; and
conservation programs' annual installed capacity. For the non-utility and/or new
businesses, the performance measures included total combined return on equity;
non-utility net income and return on equity; corporate and other net income;
creation of an asset optimization organization; employee safety; and number of
significant environmental violations. The qualitative factors included measures
to position the Corporation for increased competition and initiating other
actions that significantly strengthen the Corporation and enhance shareholder
value.
The long-term compensation payouts to Messrs. Broadhead and Hay were based on an
average level of achievement of better than 100% of target with respect to the
annual incentive plan for the year ended December 31, 2001.
Respectfully submitted,
J. Hyatt Brown, Chairman
H. Jesse Arnelle
Robert M. Beall, II
Armando M. Codina
Paul R. Tregurtha
13
EXECUTIVE COMPENSATION
The following table sets forth compensation paid during the past three years to
FPL Group's chief executive officers and the other four most highly-compensated
persons who served as executive officers of FPL Group, Florida Power & Light
Company ("FPL"), or FPL Energy, LLC at December 31, 2001.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------------------------- ---------------------------------------
OTHER RESTRICTED SECURITIES
NAME AND PRINCIPAL ANNUAL STOCK UNDERLYING LTIP
POSITION YEAR SALARY BONUS(A) COMPENSATION AWARD(S)(B) OPTIONS(#) PAYOUTS(C)
----------------------- -------- ---------- ---------- ------------- ----------- ----------- -----------
James L. Broadhead (e) 2001 $1,100,000 $3,476,133 $21,895 $3,086,000 250,000 $ --
Chairman of FPL Group 2000 1,050,000 1,220,625 22,233 22,686,674
and Chairman and CEO of 1999 1,000,000 950,000 19,946 2,557,800 250,000 1,148,751
FPL
Lewis Hay III (f) 2001 607,550 1,053,932 15,376 1,942,200 200,000 --
President and CEO of 2000 423,000 449,300 14,099 6,696,320
FPL Group 1999 153,846 225,200 6,523 1,359,375 150,000 65,400
Paul J. Evanson 2001 693,000 1,652,207 11,113 1,157,250 150,000 --
President of FPL 2000 660,000 660,700 11,105 10,395,654
1999 628,500 616,900 8,656 1,278,900 150,000 458,985
Dennis P. Coyle 2001 463,700 855,736 12,485 925,800 100,000 --
General Counsel and 2000 442,500 334,100 9,146 6,349,587
Secretary of FPL Group 1999 424,000 275,600 8,445 1,023,120 100,000 251,095
Lawrence J. Kelleher 2001 358,300 665,767 11,268 1,543,000 100,000 --
Vice President Human 2000 341,250 259,400 12,879 6,204,490
Resources of FPL Group 1999 325,000 234,000 10,830 1,023,120 100,000 188,066
Armando J. Olivera 2001 272,000 378,706 11,575 987,520 50,000 --
Senior Vice President 2000 260,000 164,300 11,848 3,151,518
Power Systems of FPL 1999 232,820 152,800 8,796 511,560 50,000 84,979
NAME AND PRINCIPAL ALL OTHER
POSITION COMPENSATION(D)
----------------------- ----------------
James L. Broadhead (e) $ 8,587
Chairman of FPL Group 14,616,061
and Chairman and CEO of 13,423
FPL
Lewis Hay III (f) 16,869
President and CEO of 15,661
FPL Group 3,047
Paul J. Evanson 11,174
President of FPL 8,544
13,539
Dennis P. Coyle 9,277
General Counsel and 8,512
Secretary of FPL Group 10,879
Lawrence J. Kelleher 11,646
Vice President Human 8,207
Resources of FPL Group 11,305
Armando J. Olivera 11,463
Senior Vice President 8,163
Power Systems of FPL 9,876
------------
(a) For 2001, represents annual incentive award payouts for each of the officers
as follows: Mr. Broadhead $1,229,200, Mr. Hay $637,500, Mr. Evanson
$707,200, Mr. Coyle $343,100, Mr. Kelleher $270,500, and Mr. Olivera
$173,000. In addition, for 2001, represents performance share award payouts
under FPL Group's Long Term Incentive Plan 1994 for the performance period
beginning January 1, 2001 and ending December 31, 2001. See note (c) below.
The payout related to performance share awards for each of the officers was
as follows: Mr. Broadhead $2,246,933, Mr. Hay $416,432, Mr. Evanson
$945,007, Mr. Coyle $512,636, Mr. Kelleher $395,267, and Mr. Olivera
$205,706. Payouts were made in a combination of cash (for payment of income
taxes) and shares of Common Stock, valued at the closing price on the last
business day preceding payout. Messrs. Evanson and Olivera deferred their
performance share award payouts under FPL Group's Deferred Compensation
Plan.
(b) At December 31, 2001, Mr. Broadhead held 50,000 shares of restricted Common
Stock with a value of $2,820,000 that vest on January 2, 2002; Mr. Hay held
32,500 shares of restricted Common Stock with a value of $1,833,000 that
vest as to 14,584 shares in 2002, 14,583 shares in 2003, and 3,333 shares in
2004; Mr. Evanson held 18,750 shares of restricted Common Stock with a value
of $1,057,500 that vest as to 9,375 shares in each of years 2002 and 2003;
Mr. Coyle held 15,000 shares of Restricted Common Stock with a value of
$846,000 that vest as to 7,500 shares in each of years 2002 and 2003;
Mr. Kelleher held 25,000 shares of restricted Common Stock with a value of
$1,410,000 that vest as to 12,500 shares in each of years 2002 and 2003;
Mr. Olivera held 16,000 shares of restricted Common Stock with a value of
$902,400 that vest as to 8,000 shares in each of years 2002 and 2003.
Dividends at normal rates are paid on restricted Common Stock.
14
(c) For 2001, LTIP payouts were based on a performance period of one fiscal year
and, in accordance with SEC rules, are reported under the "Bonus" column of
this table. For 2000, upon a change of control as defined in the FPL
Group, Inc. Long Term Incentive Plan 1994, on December 15, 2000, all
performance criteria of performance-based awards, restricted stock and other
stock-based awards held by executive officers were deemed fully achieved,
and all such awards were deemed fully earned and vested. The performance
criteria of performance-based awards were waived and the awards were paid
out using an assumption of maximum performance for the named officers.
(d) For 2001, represents employer matching contributions of $8,075 to employee
thrift plans for each of the named officers, and employer contributions for
life insurance as follows: Mr. Broadhead $512, Mr. Hay $8,794, Mr. Evanson
$3,099, Mr. Coyle $1,202, Mr. Kelleher $3,571, and Mr. Olivera $3,388.
(e) Mr. Broadhead resigned as President and CEO of FPL Group on June 11, 2001,
and resigned as Chairman of the Board of FPL Group and FPL and as CEO of FPL
on December 31, 2001.
(f) Mr. Hay joined FPL Group in July 1999 as Vice President, Finance and Chief
Financial Officer of FPL Group and Senior Vice President, Finance and Chief
Financial Officer of FPL. He served as President of FPL Energy from
March 2000 to December 2001 and was elected President and CEO of FPL Group
in June 2001. He was elected Chairman of the Board of FPL Group and FPL and
Chief Executive Officer of FPL as of January 1, 2002.
LONG TERM INCENTIVE PLAN AWARDS
In 2001, performance share awards, shareholder value awards, and non-qualified
stock option awards under FPL Group's Long Term Incentive Plan were made to the
executive officers named in the Summary Compensation Table as set forth in the
following tables.
PERFORMANCE SHARE AWARDS
NUMBER OF SHARES FOR PERFORMANCE
PERIOD UNTIL PAYOUT ESTIMATED FUTURE PAYOUTS UNDER
------------------------------------------ NON-STOCK PRICE-BASED PLANS
1/1/01 - 1/1/01 - 1/1/01- 1/1/01 - -------------------------------
NAME 12/31/01 12/31/02 12/31/03 12/31/04 TARGET # MAXIMUM #
---- -------- -------- -------- -------- --------- -------------
James L. Broadhead...................... 29,140 29,140 29,140 19,453 106,873 170,997
Lewis Hay III........................... 5,294 5,294 5,294 4,511 20,393 32,629
Paul J. Evanson......................... 11,631 11,631 11,630 7,799 42,691 68,306
Dennis P. Coyle......................... 6,693 6,693 6,692 4,473 24,551 39,282
Lawrence J. Kelleher.................... 5,058 5,058 5,058 3,456 18,630 29,808
Armando J. Olivera...................... 2,500 2,500 2,500 1,968 9,468 15,149
The performance share awards in the preceding table are payable, under normal
circumstances, at the end of the performance period indicated. The amount of the
payout is determined by multiplying the participant's target number of shares by
his average level of attainment, expressed as a percentage, which may not exceed
160%, of his targeted awards under the Annual Incentive Plans for the year or
each of the years encompassed by the award period. A description of the 2001
Annual Incentive Plan performance indicators is included in the Compensation
Committee Report herein. The performance share award payouts for the performance
period ended December 31, 2001 are included in the Summary Compensation Table
herein in the column entitled "Bonus."
15
SHAREHOLDER VALUE AWARDS
NUMBER OF SHARES FOR
PERFORMANCE PERIOD UNTIL PAYOUT ESTIMATED FUTURE PAYOUTS UNDER
--------------------------------- NON-STOCK PRICE-BASED PLANS
1/1/01 - 1/1/01 - 1/1/01 - -------------------------------
NAME 12/31/01 12/31/02 12/31/03 TARGET # MAXIMUM #
---- --------- --------- --------- --------- -------------
James L. Broadhead................................ 22,197 22,196 13,264 57,657 92,251
Lewis Hay III..................................... 4,996 4,996 3,383 13,375 21,400
Paul J. Evanson................................... 11,139 11,138 6,685 28,962 46,339
Dennis P. Coyle................................... 5,622 5,622 3,355 14,599 23,358
Lawrence J. Kelleher.............................. 4,296 4,296 2,592 11,184 17,894
Armando J. Olivera................................ 1,320 1,319 1,312 3,951 6,322
The shareholder value awards in the preceding table are payable, under normal
circumstances, at the end of the performance period indicated. The amount of the
payout is determined by multiplying the participant's target number of shares by
a factor derived by comparing the annual total shareholder return of FPL Group
(price appreciation of FPL Group Common Stock plus dividends) to the total
shareholder return of the Dow Jones Electric Utilities Index companies over the
performance period. The payout may not exceed 160% of targeted awards. No payout
was made with respect to the shareholder value awards for the performance period
ended December 31, 2001.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-----------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED (A) FISCAL YEAR ($/SHARE) DATE PRESENT VALUE ($)(B)
---- ----------- ------------- ----------- ---------- --------------------
James L. Broadhead........ 250,000 12.4% 61.72 2/12/2011 2,557,500
Lewis Hay III............. 150,000 7.5% 61.72 2/12/2011 1,534,500
Lewis Hay III............. 50,000 2.5% 55.35 9/17/2011 445,000
Paul J. Evanson........... 150,000 7.5% 61.72 2/12/2011 1,534,500
Dennis P. Coyle........... 100,000 5.0% 61.72 2/12/2011 1,023,000
Lawrence J. Kelleher...... 100,000 5.0% 61.72 2/12/2011 1,023,000
Armando J. Olivera........ 50,000 2.5% 61.72 2/12/2011 511,500
------------
(a) Options granted are non-qualified stock options. Mr. Hay's option grant of
50,000 options will be exercisable 33.3% per year and be fully exercisable
after three years. Mr. Broadhead's options became fully exercisable on
January 2, 2002. All other stock options will become exercisable 50% per
year and be fully exercisable after two years. All options were granted at
an exercise price per share of 100% of the fair market value of FPL Group
Common Stock on the date of grant.
(b) The hypothetical values shown were calculated using the Black-Scholes option
pricing model, based on the following assumptions. For Mr. Hay's option
grant of 50,000 options, the volatility rate is equal to 19.17% and the
dividend yield (representing the current per share annualized dividends
divided by the fair market value of the common stock on the date of grant)
is equal to 4.08%. For all other options, the volatility rate is equal to
18.98% and the dividend yield is equal to 4.26%. The risk-free interest rate
is equal to the interest rate on a U.S. Treasury zero-coupon bond on the
date of grant with a maturity corresponding to the estimated time until
exercise of seven years (for Mr. Hay's grant of 50,000 options, 5.00%, and
for all other options, 5.12%). The values do not take into account risk
factors such as non-transferability or risk of forfeiture.
16
The preceding table sets forth information concerning individual grants of
common stock options during fiscal year 2001 to the executive officers named in
the Summary Compensation Table. Such awards are also listed in the Summary
Compensation Table of this Proxy Statement in the column entitled "Securities
Underlying Options."
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------- -------- ----------- ------------- ----------- -------------
James L. Broadhead.............. 0 $0 0 250,000 $0 $ 0
Lewis Hay III................... 0 0 0 200,000 0 52,500
Paul J. Evanson................. 0 0 0 150,000 0 0
Dennis P. Coyle................. 0 0 0 100,000 0 0
Lawrence J. Kelleher............ 0 0 0 100,000 0 0
Armando J. Olivera.............. 0 0 0 50,000 0 0
The preceding table sets forth information, with respect to the named officers,
concerning the exercise of stock options during the fiscal year and unexercised
options held at the end of the fiscal year. The named officers did not exercise
any stock options during 2001 and held no exercisable options at the end of the
year. All the unexercisable options shown in the preceding table were granted in
2001. At December 31, 2001, the fair market value of the underlying securities
(based on the closing share price of FPL Group Common Stock reported on the NYSE
of $56.4000 per share) did not exceed the exercise price of the options, except
for 50,000 unexercisable options held by Mr. Hay.
17
RETIREMENT PLANS
FPL Group maintains a non-contributory defined benefit pension plan and a
supplemental executive retirement plan (SERP). The FPL Group Employee Pension
Plan and SERP were amended to a cash balance style plan effective April 1, 1997.
Employees who were SERP participants on that date were not affected by the
change, however. The following table shows the estimated annual benefits to
employees not affected by the change, which includes all of the executive
officers named in the Summary Compensation table except Mr. Hay. Benefits are
calculated on a straight-line annuity basis, payable on retirement in 2001 at
age 65 after the indicated years of service.
PENSION PLAN TABLE
YEARS OF SERVICE
ELIGIBLE AVERAGE ------------------------------------------------------------------------
ANNUAL COMPENSATION 10 20 30 40 50
------------------- ------------ ------------ ------------ ------------ ------------
300,$000....... $ 58,588 $ 117,165 $ 145,753 $ 154,137 $ 156,525
400,000....... 78,588 157,165 195,753 206,637 209,025
500,000....... 98,588 197,165 245,753 259,137 261,525
600,000....... 118,588 237,165 295,753 311,637 314,025
700,000....... 138,588 277,165 345,753 364,137 366,525
800,000....... 158,588 317,165 395,753 416,637 419,025
900,000....... 178,588 357,165 445,753 469,137 471,525
1,000,000..... 198,588 397,165 495,753 521,637 524,025
1,100,000..... 218,588 437,165 545,753 574,137 576,525
1,200,000..... 238,588 477,165 595,753 626,637 629,025
1,300,000..... 258,588 517,165 645,753 679,137 681,525
1,400,000..... 278,588 557,165 695,753 731,637 734,025
1,500,000..... 298,588 597,165 745,753 784,137 786,525
1,600,000..... 318,588 637,165 795,753 836,637 839,025
1,700,000..... 338,588 677,165 845,753 889,137 891,525
1,800,000..... 358,588 717,165 895,753 941,637 944,025
1,900,000..... 378,588 757,165 945,753 994,137 996,525
2,000,000..... 398,588 797,165 995,753 1,046,637 1,049,025
2,100,000..... 418,588 837,165 1,045,753 1,099,137 1,101,525
2,200,000..... 438,588 877,165 1,095,753 1,151,637 1,154,025
2,300,000..... 458,588 917,165 1,145,753 1,204,137 1,206,525
2,400,000..... 478,588 957,165 1,195,753 1,256,637 1,259,025
2,500,000..... 498,588 997,165 1,245,753 1,309,137 1,311,525
2,600,000..... 518,588 1,037,165 1,295,753 1,361,637 1,364,025
2,700,000..... 538,588 1,077,165 1,345,753 1,414,137 1,416,525
2,800,000..... 558,588 1,117,165 1,395,753 1,466,637 1,469,025
The compensation covered by the plans includes the annual salaries of all of the
executive officers named in the Summary Compensation Table and the annual
incentive awards of all such executive officers except Mr. Olivera. No other
amounts shown in that table are covered. Estimated credited years of service for
five of the executive officers named in the Summary Compensation Table are:
Mr. Broadhead, 13 years; Mr. Evanson, 9 years; Mr. Coyle, 12 years;
Mr. Kelleher, 34 years; and Mr. Olivera, 29 years. Amounts shown in the table
reflect deductions to partially cover employer contributions to social security.
Under the cash balance benefit formula, credits are accumulated in an employee's
account and are determined as a percentage of the employee's monthly recognized
earnings in accordance with the following formula:
PERCENT OF
YEARS OF SERVICE COMPENSATION
---------------- ------------
0-5 4.5%
5 or more 6.0%
18
In addition, the employee's account is credited monthly with interest at an
annual rate that is based upon the yield on one-year Treasury Constant
Maturities. A higher rate can be provided at the Corporation's discretion.
Mr. Hay is the only named executive officer covered by the cash balance plan.
His estimated age 65 annual retirement benefit payable under that plan
(expressed as a joint and 50% survivor benefit) is $391,894. This estimate
assumes his 2001 pensionable earnings (which includes annual salary and annual
incentive award as shown in the Summary Compensation Table) increase annually
(salary by 3.5% per year, and annual incentive awards equal to 112% of salary)
until the year 2020 (age 65) and a cash balance interest crediting rate of 6.0%.
The estimated age 65 cash balance account was converted to an annuity based on a
5.48% discount rate and 1983 GAM Unisex mortality.
A supplemental retirement plan for Mr. Hay provides a benefit equal to 65% of
Mr. Hay's highest average annual compensation (annual salary plus annual
incentive award) for the three consecutive calendar year periods out of the four
consecutive calendar year period ending with the calendar year in which he
retires (final average pay), reduced by the then annual amount of a joint and
50% survivor benefit (which is the actuarial equivalent of the benefits to which
he is entitled under the non-contributory defined benefit pension plan and the
SERP). If Mr. Hay terminates his employment prior to age 65, the benefit will be
reduced on a pro rata basis if he fails to complete at least fifteen years of
service with FPL Group, and it will be further reduced on an actuarial basis as
a result of its early distribution. The plan provides a minimum annual joint and
50% survivor benefit (50% of final average pay) payable to Mr. Hay and his
surviving spouse upon his termination of employment with FPL Group on his normal
retirement age (age 65), reduced on an actuarial basis if he terminates before
that age. Under the supplemental plan, Mr. Hay's estimated age 65 annual
retirement benefit (expressed as a joint and 50% survivor benefit, and
calculated based on the same assumed increases in pensionable earnings as
described in the preceding paragraph) would be increased, over the estimate
described above for pension and SERP benefits, by approximately $1,605,120.
A supplemental retirement plan for Mr. Coyle provides for benefits based on two
times his credited years of service. A supplemental retirement plan for
Mr. Evanson provides for benefits based on two times his credited years of
service up to age 65 and one times his credited years of service thereafter.
The Corporation sponsors a split-dollar life insurance plan for certain of its
senior officers, including the executive officers named in the Summary
Compensation Table. Benefits under the split-dollar plan are provided by
universal life insurance policies purchased by the Corporation. If the officer
dies prior to retirement (defined to include age plus years of service), or for
Messrs. Kelleher and Olivera during employment or after retirement but prior to
age 65, the officer's beneficiaries generally receive two and one-half times the
officer's annual salary at the time of death. If the officer dies after
retirement, or for Messrs. Kelleher and Olivera on or after 65, but before
termination of his split-dollar agreement, the officer's beneficiaries receive
between 50% to 100% (100% to 180% depending upon age at time of death for
Messrs. Kelleher and Olivera) of the officer's final annual salary. Upon
termination of the agreement after 10 years, at age 65 or termination of
employment which qualifies as retirement, whichever is later, the life insurance
policies will be assigned to the officer or his beneficiary. Each officer is
taxable on the insurance carrier's one-year term rate for his life insurance
coverage.
EMPLOYMENT AGREEMENTS
2000 AGREEMENTS--On December 15, 2000, when the Corporation's shareholders
approved a proposed merger with Entergy Corporation, previously-existing
employment agreements between the Corporation and the individuals named in the
Summary Compensation Table (collectively, the "named executive officers") became
effective (the "2000 Agreements"). The 2000 Agreements provide that each named
executive officer shall be employed by the Corporation or its affiliates for a
period of four years (five years in the case of Mr. Broadhead) in a position at
least commensurate with his position with the Corporation and/or its affiliates
in December 2000. During the employment period, each named executive officer
shall
19
be (i) paid an annual base salary at least equal to his annual base salary for
2000, with annual increases consistent with those awarded to other peer officers
of the Corporation, but not less than the increases in the consumer price index;
(ii) paid an annual bonus at least equal to the highest bonus paid to him for
any of the three years immediately preceding 2000; (iii) given the opportunity
to earn long-term incentive compensation at least as favorable as such
opportunities given to other peer officers of the Corporation during 2000 or
thereafter; and (iv) entitled to participate in employee benefit plans providing
benefits at least as favorable as those provided to other peer officers of the
Corporation during 2000 or thereafter.
In the event that during the employment period, a named executive officer's
employment is terminated by the Corporation (except for death, disability, or
cause) or if the named executive officer terminates his employment for good
reason, as defined in the 2000 Agreement, the named executive officer is
entitled to severance benefits in the form of a lump-sum payment equal to the
compensation due for the remainder of the employment period or for two years,
whichever is longer. Such benefits would be based on his then base salary plus
an annual bonus at least equal to the bonus for the year 2000. Each named
executive officer is also entitled to, among other things, the maximum amount
payable under all long-term incentive compensation grants outstanding, continued
coverage under all employee benefit plans, supplemental retirement benefits, and
a full gross-up in respect of any excise tax incurred as a result of the
benefits received pursuant to the 2000 Agreement.
AMENDMENTS TO 2000 AGREEMENTS--In February 2002, each executive officer named in
the Summary Compensation Table (other than Mr. Broadhead who retired
December 31, 2001) agreed to amend his 2000 Agreement, and, at the same time,
enter into a new executive retention employment agreement with the Corporation
(the "2002 Agreements"). The definition of good reason contained in each 2000
Agreement was amended to provide the Corporation with greater flexibility to
assign different duties and responsibilities to the named executive officers
without triggering the officer's rights to terminate employment and be entitled
to severance and other benefits. In order to avoid duplication of benefits, each
2000 Agreement was also amended to provide that if a change of control, as
defined in the named executive officer's 2002 Agreement, occurs prior to the
expiration of the 2000 Agreement, the 2000 Agreement will terminate and the 2002
Agreement will become effective.
2002 AGREEMENTS--If a change of control does not occur prior to the expiration
of a named executive officer's 2000 Agreement, his 2002 Agreement will not
become effective until the expiration of his 2000 Agreement and the subsequent
occurrence of a potential change of control or a change of control, each as
defined in the 2002 Agreement.
Change of control is defined in the 2002 Agreement as (i) the acquisition by any
individual, entity, or group of 20% or more of either the Common Stock or the
combined voting power of the Corporation other than directly from the
Corporation or pursuant to a merger or other business combination which does not
itself constitute a change of control, (ii) the incumbent directors of the
Corporation ceasing, for any reason, to constitute a majority of the Board of
Directors, unless each director who was not an incumbent director was elected,
or nominated for election, by a majority of the incumbent directors and
directors subsequently so elected or appointed (excluding those elected as a
result of an election contest), (iii) approval by shareholders or, if specified
by the Board of Directors in the exercise of its discretion, consummation of a
merger, sale of assets or other business combination as a result of which
(x) the voting securities of the Corporation outstanding immediately prior to
the transaction do not immediately following the transaction represent more than
60% of the common stock and the voting power of all voting securities of the
resulting ultimate parent entity or (y) members of the Board of Directors of the
Corporation constitute less than a majority of the members of the board of
directors of the resulting ultimate parent entity, or there is no assurance that
they, or their nominees, will constitute at least a majority of that board of
directors for at least two years, or (iv) the shareholders approve the
liquidation or dissolution of the Corporation. A potential change of control is
defined as (i) announcement of an intention to take or consider taking actions
which, if consummated or approved by shareholders, would constitute a change of
control, or (ii) the acquisition by any individual, entity, or group of 15% or
more of either the Common Stock or the
20
combined voting power of the Corporation other than directly from the
Corporation or pursuant to a merger or other business combination which does not
itself constitute a change of control.
Once effective, each named executive officer's 2002 Agreement provides that he
shall be employed by the Corporation for a period of three years (two years in
the case of Mr. Olivera) in a position at least commensurate with his position
with the Corporation in the ninety day period immediately preceding the
effective date of the 2002 Agreement. During this three year (or two year)
employment period, each named executive officer shall be (i) paid an annual base
salary at least equal to his annual base salary as in effect on the effective
date, with annual increases consistent with those awarded to other peer officers
of the Corporation, but not less than the increases in the consumer price index;
(ii) paid an annual bonus (expressed as a percentage of his annual base salary)
consistent with those of peer executives of the Corporation, but at least equal
to the higher of (x) his targeted annual bonus for the then current fiscal year
divided by his then current annual base salary or (y) the average percentage of
his annual base salary (as in effect for the applicable years) that was paid or
payable as an annual bonus for each of the three fiscal years preceding the
fiscal year in which the effective date occurs (or, if higher, for each of the
three fiscal years immediately preceding the fiscal year in which a change of
control occurs, if a change of control occurs after the effective date);
(iii) given the opportunity to earn long-term incentive compensation no less
favorable than such opportunities given to him at any time during the 90 days
preceding the effective date or, if more favorable, those provided at any time
after the effective date to peer officers of the Corporation (but without
duplication of awards granted in connection with the shareholder approval of the
proposed merger with Entergy Corporation); and (iv) entitled to participate in
savings, retirement and other employee benefit plans providing benefits no less
favorable than those provided to him at any time during the 90 days preceding
the effective date or, if more favorable, those provided at any time after the
effective date to peer officers of the Corporation.
In the event of a change of control, each 2002 Agreement provides that (i) 50%
of a named executive officer's outstanding performance stock-based awards
(performance share awards and shareholder value awards) shall be vested and
earned at an achievement level equal to the higher of (x) the targeted level of
performance of each such award or (y) the average level (expressed as a
percentage of target) of achievement in respect of similar awards maturing over
the three fiscal years immediately prior to the year in which the change of
control occurred; (ii) all other outstanding stock-based awards granted to the
named executive officer shall be fully vested and earned; (iii) all options and
other exercisable rights granted to the named executive officer shall become
exercisable and vested; and (iv) the restrictions, deferral limitations and
forfeiture conditions applicable to all outstanding awards granted to the named
executive officer shall lapse and such awards shall be deemed fully vested.
However, no awards which were granted to a named executive officer in connection
with the shareholder approval of the proposed merger with Entergy Corporation
shall become vested, earned or exercisable under the 2002 Agreement as a result
of a change of control.
A named executive officer will receive the remaining 50% of the outstanding
performance stock-based awards (calculated in the same manner as described
above) on the first anniversary of the change of control if he has remained
employed by the Corporation or an affiliate through such date or upon an earlier
termination of employment by the Corporation (except for death, disability or
cause) or by the named executive officer for good reason (defined in the same
manner as in the amended 2000 Agreement). Upon such a termination of employment
following a change of control and during the employment period, the named
executive officer is entitled to, among other things, a lump sum severance
payment equal to three times (two times in the case of Mr. Olivera) the sum of
his annual base salary plus his annual bonus; a payment in respect of three
years (two years in the case of Mr. Olivera) of foregone supplemental retirement
benefits; continued coverage under all employee benefit plans, and certain other
benefits and perquisites, for three years (two years in the case of
Mr. Olivera); and a full gross-up in respect of any excise tax incurred as a
result of the benefits received pursuant to the 2002 Agreement. Such amounts and
benefits would also be provided if such a termination of a named executive
officer occurs
21
following a potential change of control and prior to an actual change of
control, and during the employment period, except that 100% of the outstanding
performance stock-based awards (calculated as described above) would be vested
and earned, excluding any such awards granted in connection with the shareholder
approval of the proposed merger with Entergy Corporation. In addition, each
named executive officer will also receive a pro rata portion (based upon deemed
employment until the end of the three year employment period (two year
employment period in the case of Mr. Olivera)) of each long-term incentive
compensation award granted to him on or after the date of the change of control;
provided, that a named executive officer will not be eligible to receive any
payment with respect to any non-vested portion of an award which was granted in
connection with the shareholder approval of the proposed merger with Entergy
Corporation.
CONSULTING AGREEMENT AND CERTAIN RETIREMENT BENEFITS
In December 2001, the Corporation entered into a consulting agreement with
Mr. Broadhead, pursuant to which Mr. Broadhead agreed to consult with the
Chairman of the Board of the Corporation regarding the Corporation's business
and its general management and operation during 2002. As compensation to
Mr. Broadhead for his services, options to purchase 62,500 shares of FPL Group
Common Stock at an exercise price of $61.72 during the period ending
February 12, 2011, which otherwise would have expired upon his retirement on
December 31, 2001, became vested and exercisable in January 2002 and 12,500
shares of FPL Group Common Stock subject to a restricted stock award, which
otherwise would have lapsed upon his retirement, became vested in January 2002.
Under the Long Term Incentive Plan 1994, in connection with Mr. Broadhead's
retirement he would have been entitled to a prorated portion (based on service)
of the performance share awards for the two-, three-and four-year performance
periods described in the Performance Share Awards table above, and the two- and
three-year performance periods described in the Shareholder Value Awards table
above, at the end of such periods. In February 2002, the Compensation Committee
accelerated the payment of those prorated amounts, which totaled $2,610,580
(consisting of 20,956 shares of Common Stock and $1,526,107 in cash). Also, the
Compensation Committee accelerated to January 2, 2002, the vesting of options to
purchase 187,500 shares of Common Stock at a price of $61.72 during the period
ending February 12, 2011 and the vesting of 37,500 shares of restricted Common
Stock that, absent Mr. Broadhead's retirement, would have vested February 12,
2002.
SHAREHOLDER PROPOSALS
Proposals on matters appropriate for shareholder consideration consistent with
the regulations of the Securities and Exchange Commission submitted by
shareholders for inclusion in the proxy statement and form of proxy for the 2003
Annual Meeting of Shareholders must be received at FPL Group's principal
executive offices on or before December 19, 2002. After March 4, 2003, notice to
FPL Group of a shareholder proposal submitted for consideration at the 2003
Annual Meeting of Shareholders, which is not submitted for inclusion in FPL
Group's proxy statement and form of proxy, will be considered untimely and the
persons named in the proxies solicited by FPL Group's Board of Directors for the
2003 Annual Meeting of Shareholders may exercise discretionary voting power with
respect to any such proposal. Shareholder proposals may be mailed to Dennis P.
Coyle, Secretary, FPL Group, Inc., Post Office Box 14000, 700 Universe
Boulevard, Juno Beach, Florida 33408-0420.
GENERAL
The expense of soliciting proxies will be borne by FPL Group. Proxies will be
solicited principally by mail, but directors, officers, and regular employees of
FPL Group or its subsidiaries may solicit proxies personally, by telephone or
other electronic media. FPL Group has retained Georgeson Shareholder
Communications, Inc. to assist in the solicitation of proxies, for which
services it will be paid a fee of $5,000
22
plus out-of-pocket expenses. FPL Group will reimburse custodians, nominees or
other persons for their out-of-pocket expenses in sending proxy materials to
beneficial owners.
HOUSEHOLDING OF ANNUAL DISCLOSURE DOCUMENTS
The Securities and Exchange Commission recently approved a new rule concerning
the delivery of annual disclosure documents, called "householding." Under that
rule, certain brokers, banks and other intermediaries have arranged that a
single set of our annual report and proxy statement is being delivered to
multiple shareholders sharing an address unless those brokers, banks and other
intermediaries have received contrary instructions from one or more of the
shareholders. The rule applies to FPL Group's annual reports, proxy statements
or information statements. Each shareholder will continue to receive a separate
proxy card or voting instruction card.
FPL Group will deliver promptly upon written or oral request a separate copy of
this proxy statement or other annual disclosure documents, to a shareholder at a
shared address to which a single copy of the document was sent. If you would
like to receive your own set of these documents, or would like to receive your
own set of FPL Group's annual disclosure documents in future years, contact us
in writing at FPL Group, Shareholder Services, 700 Universe Blvd., Juno Beach,
Florida, 33408 or by calling 561-694-4694. Two or more shareholders sharing an
address can request delivery of a single copy of annual disclosure documents if
they are receiving multiple copies by contacting FPL Group in the same manner.
If a broker or other nominee holds your FPL Group shares, please contact ADP and
inform them of your request by calling them at (888) 603-5847 or writing them at
Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Be sure to include
your name, the name of your brokerage firm and your account number.
ELECTRONIC ACCESS TO PROXY STATEMENT AND ANNUAL REPORT
This Proxy Statement and FPL Group's 2001 Annual Report may be viewed online at
www.fplgroup.com. If you are a shareholder of record, you can elect to receive
future annual reports and proxy statements electronically by going to the web
site www.econsent.com/fpl and following the instructions there, or by following
the instructions provided if you vote by Internet. If you choose this option
your choice will remain in effect until cancelled. If you should choose to
cancel this option and resume mail delivery of these documents, return to the
web site www.econsent.com/fpl and make the appropriate selection or notify FPL
Group's transfer agent, EquiServe Trust Company, N.A. at P.O. Box 43010,
Providence, RI, 02940-3010 by mail. If you hold your FPL Group stock through a
bank, broker or another holder of record, refer to the information provided by
that entity for instructions on how to elect this option.
OTHER BUSINESS
The Board of Directors does not know of any other business to be presented at
the meeting and does not intend to bring before the meeting any matter other
than the proposals described herein. However, if any other business should come
before the meeting, or any adjournments thereof, the persons named in the
accompanying proxy will have discretionary authority to vote all proxies.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, IT IS IMPORTANT THAT YOUR SHARES BE
REPRESENTED AT THE ANNUAL MEETING. ACCORDINGLY, YOU ARE RESPECTFULLY REQUESTED
TO MARK, SIGN, DATE, AND RETURN THE ACCOMPANYING PROXY CARD AT YOUR EARLIEST
CONVENIENCE. ALTERNATIVELY, YOU MAY CAST YOUR VOTE BY TELEPHONE OR
ELECTRONICALLY BY FOLLOWING THE INSTRUCTIONS ON YOUR PROXY CARD.
BY ORDER OF THE BOARD OF DIRECTORS.
/s/ Dennis P. Coyle
DENNIS P. COYLE
Secretary
April 19, 2002
23
0732-PS-02
FPL
GROUP
P.O. Box 43068
Providence, RI 02940-3068
ADMISSION TICKET
--------------------------------------------------------------------------------
You may vote your shares using the Internet or a touch-tone telephone anytime,
24 hours a day, 7 days a week. Your Internet or telephone vote authorizes the
named proxies to vote your shares in the same manner as if you marked, signed
and returned your proxy card.
IF YOU ARE VOTING BY INTERNET OR TELEPHONE, DO NOT MAIL YOUR PROXY CARD.
TO VOTE BY TELEPHONE:
--------------------
o Read the accompanying Proxy Statement and Proxy Card.
o Locate your VOTER CONTROL NUMBER located on your proxy card above your
name.
o Using a touch-tone phone, call toll-free 1-877-779-8683. THERE IS NO
CHARGE TO YOU FOR THIS CALL.
o Follow the recorded instructions.
TO VOTE BY INTERNET:
--------------------
o Read the accompanying Proxy Statement and Proxy Card.
o Locate your VOTER CONTROL NUMBER located on your proxy card above your
name.
o Go to the Web Address: http://www.eproxyvote.com/fpl
o Follow the instructions.
TO VOTE BY MAIL:
---------------
o Read the accompanying Proxy Statement and Proxy Card.
o Mark, sign and date your proxy card and return it in the postage-paid
envelope provided.
RECEIVE FUTURE MATERIALS VIA THE INTERNET
In order to reduce paper and mailing costs we are offering shareholders the
opportunity to consent to receive annual meeting materials by e-mail instead of
by U.S. mail. If you have an e-mail account and Internet access, please take
advantage of this option by voting online and indicating your consent for
electronic delivery or accessing http://www.econsent.com/fpl and then
following the instructions.
DETACH HERE IF MAILING
--------------------------------------------------------------------------------
/x/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
--------------------------------------------------------------------------------
1. Election of Directors
(01) H. Jesse Arnelle, (02) Sherry S. Barrat, (03) Robert M. Beall, II,
(04) J. Hyatt Brown, (05) Armando M. Codina, (06) Willard D. Dover,
(07) Alexander W. Dreyfoos, Jr., (08) Paul J. Evanson, (09) Lewis Hay III
(10) Frederic V. Malek and (11) Paul R. Tregurtha
WITHHELD
FOR ALL FROM ALL
NOMINEES NOMINEES
/_/ /_/
------------------------------------------------------------
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
FOR AGAINST ABSTAIN
2. Ratification /_/ /_/ /_/
of Auditors
3. In their discretion such other
business as may properly come
before the meeting.
MARK HERE /_/ MARK HERE /_/
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
When signing as attorney, executor, trustee, guardian, or corporate offices,
please give title. For joint account, each joint owner should sign.
Signature:_________________ Date:____2002 Signature:____________ Date:_____2002
NOTE: Please sign exactly as the name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
FPL FPL GROUP, INC.
GROUP ANNUAL MEETING
May 24, 2002
10:00 AM
PGA National Resort
400 Avenue of the Champions
Palm Beach Gardens, Florida
ADMISSION TICKET
--------------------------------------------------------------------------------
FPL Group's 2002 Annual Shareholders' Meeting will be held at 10:00 A.M. Eastern
Time on Friday, May 24, 2002 at the PGA National Resort, Palm Beach Gardens,
Florida. If you plan to attend the Annual Shareholders' Meeting, please tear off
and keep the upper portion of this form as your ticket for admission to the
meeting. This ticket, along with a form of personal identification, admits the
named Shareholder(s) and one guest.
YOUR VOTE IS IMPORTANT. Regardless of whether you plan to attend the meeting, it
is important that your shares be voted. Accordingly, we ask that you vote your
shares as soon as possible using one of three convenient methods: over the
phone, over the Internet or by signing and returning your proxy card in the
envelope provided. If you plan to attend the meeting, please mark the
appropriate box on the proxy.
DETACH HERE IF MAILING
--------------------------------------------------------------------------------
PROXY/VOTING INSTRUCTIONS
FPL GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS DENNIS P. COYLE, LAWRENCE J. KELLEHER, AND MARY
LOU KROMER, AND EACH OF THEM, WITH POWER OF SUBSTITUTION, PROXIES OF THE
UNDERSIGNED, TO VOTE ALL SHARES OF COMMON STOCK OF FPL GROUP, INC. THAT THE
UNDERSIGNED WOULD BE ENTITLED TO VOTE AT THE ANNUAL MEETING OF SHAREHOLDERS TO
BE HELD MAY 24, 2002, AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF, UPON THE
MATTERS REFERRED TO ON THIS PROXY AND, IN THEIR DISCRETION, UPON ANY OTHER
BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2.
IF YOU ARE A PARTICIPANT IN ANY OF FPL GROUP, INC.'S EMPLOYEE THRIFT PLANS (THE
"PLANS"), THIS PROXY INFORMATION WILL BE FORWARDED TO FIDELITY MANAGEMENT TRUST
COMPANY, AS TRUSTEE OF THE THRIFT PLANS, AND WILL TELL THE TRUSTEE HOW TO VOTE
THE NUMBER OF SHARES OF COMMON STOCK REFLECTING YOUR PROPORTIONATE INTEREST IN
THE FPL GROUP STOCK FUND AND THE FPL GROUP LEVERAGED ESOP FUND. YOUR
INSTRUCTIONS WILL ALSO DETERMINE THE VOTE ON A PROPORTIONATE NUMBER OF THE
LEVERAGED ESOP SHARES WHICH ARE HELD IN THE THRIFT PLANS BUT NOT YET ALLOCATED
TO PARTICIPANTS. IF YOU DO NOT GIVE THE TRUSTEE VOTING INSTRUCTIONS, THE NUMBER
OF SHARES REFLECTING YOUR PROPORTIONATE INTEREST WILL NOT BE VOTED, BUT YOUR
PROPORTIONATE SHARE OF THE UNALLOCATED LEVERAGED ESOP SHARES WILL BE VOTED BY
THE TRUSTEE IN THE SAME MANNER AS IT VOTES UNALLOCATED SHARES FOR WHICH
INSTRUCTIONS ARE RECEIVED.
SEE SEE
REVERSE CONTINUED, AND TO BE SIGNED AND DATED ON THE REVERSE SIDE REVERSE
SIDE SIDE