<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<CAPTION>
Exact name of Registrants as specified in
Commission their charters, address of principal executive IRS Employer Iden-
File Number offices and Registrants' telephone number tification Number
<S> <C> <C>
1-8841 FPL GROUP, INC. 59-2449419
1-3545 FLORIDA POWER & LIGHT COMPANY 59-0247775
700 Universe Boulevard
Juno Beach, Florida 33408
(561) 694-4647
</TABLE>
State or other jurisdiction of incorporation or organization: Florida
Indicate by check mark whether the registrants (1) have filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months and (2) have been
subject to such filing requirements for the past 90 days. Yes X
No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each class of FPL Group, Inc.
common stock, as of the latest practicable date: Common Stock, $.01
Par Value, outstanding at October 31, 1996: 182,998,435 shares
As of October 31, 1996 there were issued and outstanding 1,000 shares
of Florida Power & Light Company's common stock, without par value,
all of which were held, beneficially and of record, by FPL Group,
Inc.
______________________________
This combined Form 10-Q represents separate filings by FPL Group, Inc.
and Florida Power & Light Company. Information contained herein
relating to an individual registrant is filed by that registrant on its own
behalf. Florida Power & Light Company makes no representations as to
the information relating to FPL Group, Inc.'s other operations.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FPL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
OPERATING REVENUES ....................................... $1,769,599 $1,587,037 $4,601,392 $4,231,126
OPERATING EXPENSES:
Fuel, purchased power and interchange .................. 628,464 480,912 1,578,293 1,284,187
Other operations and maintenance........................ 264,239 297,201 848,849 847,376
Depreciation and amortization .......................... 257,761 212,675 757,341 675,767
Taxes other than income taxes .......................... 160,002 148,314 435,115 414,874
Total operating expenses ............................. 1,310,466 1,139,102 3,619,598 3,222,204
OPERATING INCOME ......................................... 459,133 447,935 981,794 1,008,922
OTHER INCOME (DEDUCTIONS):
Interest charges ....................................... (65,525) (70,514) (202,642) (221,811)
Dividend requirements on preferred stock of FPL ........ (5,767) (8,990) (17,966) (30,182)
Other - net ............................................ 4,421 9,179 (5,443) 15,487
Total other deductions - net ......................... (66,871) (70,325) (226,051) (236,506)
INCOME BEFORE INCOME TAXES ............................... 392,262 377,610 755,743 772,416
INCOME TAXES ............................................. 142,146 137,161 261,602 293,826
NET INCOME ............................................... $ 250,116 $ 240,449 $ 494,141 $ 478,590
Earnings per share of common stock ....................... $ 1.44 $ 1.37 $ 2.84 $ 2.73
Dividends per share of common stock ...................... $ 0.46 $ 0.44 $ 1.38 $ 1.32
Average number of common shares outstanding .............. 173,850 175,112 174,217 175,450
</TABLE>
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 8 through 10 herein and
the Notes to Consolidated Financial Statements appearing in the
combined Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (1995 Form 10-K) for FPL Group, Inc. (FPL Group)
and Florida Power & Light Company (FPL).
<PAGE>
FPL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995
(Thousands of Dollars)
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant and other property - at original cost,
including nuclear fuel and construction work in progress ...................... $16,901,317 $16,725,231
Less accumulated depreciation and amortization .................................. 7,444,071 6,873,250
Total property, plant and equipment - net ..................................... 9,457,246 9,851,981
CURRENT ASSETS:
Cash and cash equivalents ....................................................... 91,715 46,177
Customer receivables, net of allowances of $12,508 and $11,929, respectively .... 564,246 482,326
Materials, supplies and fossil fuel stock - at average cost ..................... 274,751 247,323
Other ........................................................................... 345,632 209,522
Total current assets .......................................................... 1,276,344 985,348
OTHER ASSETS:
Special use funds of FPL ........................................................ 745,055 646,846
Other investments ............................................................... 400,195 447,006
Unamortized debt reacquisition costs of FPL ..................................... 287,668 294,844
Other ........................................................................... 215,323 233,201
Total other assets ............................................................ 1,648,241 1,621,897
TOTAL ASSETS ...................................................................... $12,381,831 $12,459,226
CAPITALIZATION:
Common shareholders' equity ..................................................... $ 4,597,537 $ 4,392,509
Preferred stock of FPL without sinking fund requirements ........................ 289,580 289,580
Preferred stock of FPL with sinking fund requirements ........................... 42,000 50,000
Long-term debt .................................................................. 3,262,857 3,376,613
Total capitalization .......................................................... 8,191,974 8,108,702
CURRENT LIABILITIES:
Accounts payable ................................................................ 327,104 305,126
Debt and preferred stock due within one year .................................... 4,672 390,402
Accrued interest, taxes and other ............................................... 952,020 808,615
Total current liabilities ..................................................... 1,283,796 1,504,143
OTHER LIABILITIES AND DEFERRED CREDITS:
Accumulated deferred income taxes ............................................... 1,587,499 1,587,449
Unamortized regulatory and investment tax credits ............................... 411,744 426,317
Other ........................................................................... 906,818 832,615
Total other liabilities and deferred credits .................................. 2,906,061 2,846,381
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES .............................................. $12,381,831 $12,459,226
</TABLE>
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 8 through 10 herein and
the Notes to Consolidated Financial Statements appearing in the 1995
Form 10-K for FPL Group and FPL.
<PAGE>
FPL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
(Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .......................................................................... $ 494,141 $ 478,590
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ..................................................... 757,341 675,767
Other - net ....................................................................... 63,707 144,863
Net cash provided by operating activities ....................................... 1,315,189 1,299,220
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1) ............................................................ (343,862) (499,783)
Other - net ......................................................................... (108,784) 24,378
Net cash used in investing activities ........................................... (452,646) (475,405)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of debt .................................................................... - 110,349
Retirement of long-term debt and preferred stock .................................... (333,292) (417,604)
Repurchase of common stock .......................................................... (65,746) (59,496)
Decrease in commercial paper ........................................................ (178,500) (183,979)
Dividends on common stock ........................................................... (240,487) (231,604)
Other - net ......................................................................... 1,020 (23,751)
Net cash used in financing activities ........................................... (817,005) (806,085)
Net increase in cash and cash equivalents ............................................. 45,538 17,730
Cash and cash equivalents at beginning of period ...................................... 46,177 85,750
Cash and cash equivalents at end of period ............................................ $ 91,715 $ 103,480
Supplemental disclosures of cash flow information:
Cash paid for interest .............................................................. $ 202,586 $ 228,760
Cash paid for income taxes .......................................................... $ 208,200 $ 242,800
Supplemental schedule of noncash investing and financing activities:
Additions to capital lease obligations .............................................. $ 59,392 $ 55,502
(1) Capital expenditures exclude allowance for equity funds used during construction.
</TABLE>
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 8 through 10 herein and
the Notes to Consolidated Financial Statements appearing in the 1995
Form 10-K for FPL Group and FPL.
<PAGE>
FLORIDA POWER & LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
(Thousands of Dollars)
<S> <C> <C> <C> <C>
OPERATING REVENUES ....................................... $1,760,939 $1,579,549 $4,556,678 $4,182,021
OPERATING EXPENSES:
Fuel, purchased power and interchange .................. 628,464 480,912 1,578,293 1,284,187
Other operations and maintenance ....................... 256,369 288,808 806,939 795,514
Depreciation and amortization .......................... 256,395 211,000 753,188 668,982
Income taxes ........................................... 142,948 143,956 281,058 307,699
Taxes other than income taxes .......................... 159,837 148,091 434,713 413,687
Total operating expenses ............................. 1,444,013 1,272,767 3,854,191 3,470,069
OPERATING INCOME ......................................... 316,926 306,782 702,487 711,952
OTHER INCOME (DEDUCTIONS):
Interest charges - net ................................. (62,217) (63,979) (186,150) (201,664)
Other - net ............................................ (1,682) 2,944 2,200 8,705
Total other deductions - net ......................... (63,899) (61,035) (183,950) (192,959)
NET INCOME ............................................... 253,027 245,747 518,537 518,993
DIVIDEND REQUIREMENTS ON PREFERRED STOCK ................. 5,767 8,990 17,966 30,182
NET INCOME AVAILABLE TO FPL GROUP ........................ $ 247,260 $ 236,757 $ 500,571 $ 488,811
</TABLE>
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 8 through 10 herein and
the Notes to Consolidated Financial Statements appearing in the 1995
Form 10-K for FPL Group and FPL.
<PAGE>
FLORIDA POWER & LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995
(Thousands of Dollars)
<S> <C> <C>
ELECTRIC UTILITY PLANT:
At original cost, including nuclear fuel and construction work in progress ....... $16,700,189 $16,531,492
Less accumulated depreciation and amortization ................................... 7,399,429 6,832,201
Electric utility plant - net ................................................... 9,300,760 9,699,291
CURRENT ASSETS:
Cash and cash equivalents ........................................................ 65,639 412
Customer receivables, net of allowances of $12,317 and $11,737, respectively ..... 561,738 479,838
Materials, supplies and fossil fuel stock - at average cost ...................... 254,597 230,553
Other ............................................................................ 321,071 180,414
Total current assets ........................................................... 1,203,045 891,217
OTHER ASSETS:
Special use funds ................................................................ 745,055 646,846
Unamortized debt reacquisition costs ............................................. 287,668 294,844
Other ............................................................................ 204,828 219,061
Total other assets ............................................................. 1,237,551 1,160,751
TOTAL ASSETS ....................................................................... $11,741,356 $11,751,259
CAPITALIZATION:
Common shareholder's equity ...................................................... $ 4,668,156 $ 4,473,708
Preferred stock without sinking fund requirements ................................ 289,580 289,580
Preferred stock with sinking fund requirements ................................... 42,000 50,000
Long-term debt ................................................................... 2,980,701 3,094,050
Total capitalization ........................................................... 7,980,437 7,907,338
CURRENT LIABILITIES:
Accounts payable ................................................................. 324,874 299,987
Debt and preferred stock due within one year ..................................... 4,000 382,500
Accrued interest, taxes and other ................................................ 936,521 778,465
Total current liabilities ...................................................... 1,265,395 1,460,952
OTHER LIABILITIES AND DEFERRED CREDITS:
Accumulated deferred income taxes ................................................ 1,258,331 1,204,315
Unamortized regulatory and investment tax credits ................................ 411,744 426,317
Other ............................................................................ 825,449 752,337
Total other liabilities and deferred credits ................................... 2,495,524 2,382,969
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES ............................................... $11,741,356 $11,751,259
</TABLE>
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 8 through 10 herein and
the Notes to Consolidated Financial Statements appearing in the 1995
Form 10-K for FPL Group and FPL.
<PAGE>
FLORIDA POWER & LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
(Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .......................................................................... $ 518,537 $ 518,993
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ..................................................... 753,188 668,982
Other - net ....................................................................... 99,844 92,735
Net cash provided by operating activities ....................................... 1,371,569 1,280,710
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1) ............................................................ (335,523) (490,837)
Other - net ......................................................................... (136,672) (13,626)
Net cash used in investing activities ........................................... (472,195) (504,463)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of debt .................................................................... - 110,349
Retirement of long-term debt and preferred stock .................................... (332,669) (417,438)
Decrease in commercial paper ........................................................ (178,500) (174,000)
Dividends ........................................................................... (468,975) (463,443)
Capital contributions from FPL Group ................................................ 145,000 200,000
Other - net ......................................................................... 997 (29,504)
Net cash used in financing activities ........................................... (834,147) (774,036)
Net increase in cash and cash equivalents ............................................. 65,227 2,211
Cash and cash equivalents at beginning of period ...................................... 412 535
Cash and cash equivalents at end of period ............................................ $ 65,639 $ 2,746
Supplemental disclosures of cash flow information:
Cash paid for interest .............................................................. $ 186,967 $ 210,811
Cash paid for income taxes .......................................................... $ 161,516 $ 321,135
Supplemental schedule of noncash investing and financing activities:
Additions to capital lease obligations .............................................. $ 59,392 $ 55,502
(1) Capital expenditures exclude allowance for equity funds used during construction.
</TABLE>
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 8 through 10 herein and
the Notes to Consolidated Financial Statements appearing in the 1995
Form 10-K for FPL Group and FPL.
<PAGE>
FPL GROUP, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The accompanying condensed consolidated financial statements should
be read in conjunction with the combined 1995 Form 10-K for FPL Group
and FPL. In the opinion of FPL Group and FPL, all adjustments
(consisting only of normal recurring accruals) necessary to present
fairly the financial position as of September 30, 1996, the results
of operations for the three and nine months ended September 30, 1996
and 1995 and cash flows for the nine months ended September 30, 1996
and 1995 have been made. Certain amounts included in the prior
year's condensed consolidated financial statements have been
reclassified to conform to the current year's presentation. The
results of operations for an interim period may not give a true
indication of results for the year.
1. Summary of Significant Accounting and Reporting Policies
Depreciation and Amortization - In the second quarter of 1995, the
Florida Public Service Commission (FPSC) approved, on an interim
basis, accelerated amortization of FPL's nuclear units of $30 million
per year plus additional amounts based on the level of sales. In
March 1996, the FPSC granted final approval of the $30 million per
year of special nuclear amortization. The FPSC also approved the
additional expense amounts recorded in 1995 based on the level of
sales, added certain fossil and regulatory assets to the program and
extended the program through 1997. The aggregate amount relating to
nuclear and fossil plant assets was fully amortized by the end of the
third quarter of 1996. FPL will continue to recognize $30 million of
special nuclear amortization per year and the additional expense
amounts based on the level of sales are now applied against
regulatory assets.
Allowance for Funds Used During Construction (AFUDC) - In October
1996, the FPSC approved an accounting rule change that eliminates
AFUDC, except for projects that cost in excess of 1/2% of a company's
electric utility plant in-service. FPL adopted the rule change
retroactive to January 1, 1996.
Accrual for Nuclear Maintenance Costs - In October 1996, the FPSC
approved a change in the accounting for costs associated with nuclear
refueling outages. Under the new method of accounting, FPL will
accrue estimated nuclear refueling and maintenance costs relating to
each unit's next planned outage while the unit is in operation. Any
cost overruns will be expensed when known. This approach will result
in FPL recognizing costs equivalent to slightly less than three
outages per year based upon the current refueling outage schedule for
FPL's four nuclear units. The cumulative effect of adopting this
accounting method was $35 million and will be expensed over a period
not to exceed five years.
2. Capitalization
FPL Group Common Stock - During the nine months ended September 30,
1996, FPL Group repurchased approximately 1.5 million shares of
common stock under its share repurchase program. A total of
approximately 7.4 million shares have been repurchased since the
inception of the share repurchase program in May 1994.
Preferred Stock - In January 1996, FPL redeemed all 600,000
outstanding shares of its 7.28% Preferred Stock, Series F, $100 Par
Value and all 400,000 outstanding shares of its 7.40% Preferred
Stock, Series G, $100 Par Value.
The 1996 sinking fund requirements for the 6.84% Preferred Stock,
Series Q, $100 Par Value and the 8.625% Preferred Stock, Series R,
$100 Par Value were met by redeeming and retiring, in April 1996,
30,000 shares of Series Q and 50,000 shares of Series R. There are
no preferred stock sinking fund requirements for the remainder of
1996.
Long-Term Debt - In September 1996, FPL redeemed $87 million
principal amount of First Mortgage Bonds, 8 1/2% Series due 2022.
During the nine months ended September 30, 1996, FPL purchased on the
open market and retired approximately $29 million in aggregate
principal amount of several series of First Mortgage Bonds, due on
dates ranging from 2013 through 2023, at interest rates ranging from
7 3/4% to 8 1/2%.
3. Commitments and Contingencies
Commitments - FPL has made commitments in connection with a portion
of its projected capital expenditures. Capital expenditures for the
construction or acquisition of additional facilities and equipment
primarily to meet customer demand are estimated to be approximately
$1.5 billion for the years 1996 through 1998. Included in this
three-year forecast are capital expenditures for 1996 of $511
million, of which $335 million had been spent through September 30,
1996. FPL Group Capital Inc (FPL Group Capital) and its
subsidiaries, primarily ESI Energy, Inc., have guaranteed up to
approximately $86 million of lease obligations, debt service payments
and other payments subject to certain contingencies.
Insurance - Liability for accidents at nuclear power plants is
governed by the Price-Anderson Act, which limits the liability of
nuclear reactor owners to the amount of the insurance available from
private sources and under an industry retrospective payment plan. In
accordance with this Act, FPL maintains $200 million of private
liability insurance, which is the maximum obtainable, and
participates in a secondary financial protection system under which
it is subject to retrospective assessments of up to $327 million per
incident at any nuclear utility reactor in the United States, payable
at a rate not to exceed $40 million per incident per year.
FPL participates in nuclear insurance mutual companies that provide
$2.75 billion of limited insurance coverage for property damage,
decontamination and premature decommissioning risks at its nuclear
plants. The proceeds from such insurance, however, must first be
used for reactor stabilization and site decontamination before they
can be used for plant repair. FPL also participates in an insurance
program that provides limited coverage for replacement power costs if
a plant is out of service because of an accident. In the event of an
accident at one of FPL's or another participating insured's nuclear
plants, FPL could be assessed up to $69 million in retrospective
premiums. In the event of a subsequent accident at such nuclear
plants during the policy period, the maximum additional assessment
would be $30 million under the programs in effect at September 30,
1996.
FPL also participates in a program that provides $200 million of tort
liability coverage for nuclear worker claims. In the event of a tort
claim by an FPL or another insured's nuclear worker, FPL could be
assessed up to $12 million in retrospective premiums per incident.
In the event of a catastrophic loss at one of FPL's nuclear plants,
the amount of insurance available may not be adequate to cover
property damage and other expenses incurred. Uninsured losses, to
the extent not recovered through rates, would be borne by FPL and
could have a material adverse effect on FPL Group's and FPL's
financial condition.
FPL self-insures certain of its transmission and distribution (T&D)
property due to the high cost and limited coverage available from
third-party insurers. FPL maintains a funded storm and property
insurance reserve, which totaled approximately $217 million at
September 30, 1996, for T&D property storm damage or assessments
under the nuclear insurance program. Recovery from customers of any
losses in excess of the storm and property insurance reserve will
require the approval of the FPSC. FPL's available lines of credit
include $300 million to provide additional liquidity in the event of
a T&D property loss.
Contracts - FPL has entered into certain long-term purchased power
and fuel contracts. Take-or-pay purchased power contracts with the
Jacksonville Electric Authority (JEA) and with subsidiaries of the
Southern Company provide approximately 1,300 megawatts (mw) of power
through mid-2010 and 374 mw through 2022. FPL also has various firm
pay-for-performance contracts to purchase approximately 1,000 mw from
certain cogenerators and small power producers (qualifying
facilities) with expiration dates ranging from 2002 through 2026.
The purchased power contracts provide for capacity and energy
payments. Energy payments are based on the actual power taken under
these contracts. Capacity payments for the pay-for-performance
contracts are subject to the qualifying facilities meeting certain
contract conditions. The fuel contracts provide for the
transportation and supply of natural gas and coal and the supply and
use of Orimulsion. Orimulsion is a new fuel which FPL expected to
begin using in 1998, subject to regulatory approvals. In April 1996,
Florida's Power Plant Siting Board denied FPL's request to burn
Orimulsion at the Manatee power plant. FPL has appealed the denial
to the First District Court of Appeal of the state of Florida.
The required annual capacity and minimum payments through 2000 under
these contracts are estimated to be as follows:
<TABLE>
<CAPTION>
1996 1997 1998 1999 2000
(Millions of Dollars)
<S> <C> <C> <C> <C> <C>
Capacity payments:
JEA and Southern Companies ............................................... $210 $210 $210 $220 $220
Qualifying facilities .................................................... $300 $310 $320 $340 $350
Minimum payments, at projected prices:
Natural gas .............................................................. $280 $210 $210 $210 $210
Orimulsion (1) ........................................................... - - - $140 $140
Coal ..................................................................... $ 50 $ 50 $ 40 $ 40 $ 40
(1) All of FPL's Orimulsion-related contract obligations are subject to obtaining the required regulatory approvals.
</TABLE>
Capacity, energy and fuel charges under these contracts were as
follows:
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
1996 Charges 1995 Charges 1996 Charges 1995 Charges
Energy/ Energy/ Energy/ Energy/
Capacity Fuel (1) Capacity Fuel (1) Capacity Fuel (1) Capacity Fuel (1)
(Millions of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JEA and Southern Companies ... $51(2) $ 45 $45(2) $44 $143(2) $112 $165(2) $110
Qualifying facilities......... $70(3) $ 34 $40(3) $25 $209(3) $ 96 $116(3) $ 63
Natural gas .................. - $131 - $97 $ - $314 $ - $259
Coal ......................... - $ 14 - $13 $ - $ 37 $ - $ 38
(1) Recovered through the fuel and purchased power cost recovery clause.
(2) Recovered through base rates and the capacity cost recovery clause (capacity clause).
(3) Recovered through the capacity clause.
</TABLE>
Litigation - The Florida Municipal Power Agency (FMPA), an organization
comprised of municipal electric utilities, has sued FPL for allegedly
breaching a "contract" to provide transmission service to the FMPA and
its members and for breaching antitrust laws by monopolizing or
attempting to monopolize the provision, coordination and transmission of
electric power in refusing to provide transmission service, or to permit
the FMPA to invest in and use FPL's transmission system, on the
FMPA's proposed terms. The FMPA seeks $140 million in damages,
before trebling for the antitrust claim, and court orders requiring FPL to
permit the FMPA to invest in and use FPL's transmission system on
"reasonable terms and conditions" and on a basis equal to FPL. In
1995, the Court of Appeals vacated the District Court's summary
judgment in favor of FPL and remanded the matter to the District Court
for further proceedings. In September 1996, the District Court ordered
the FMPA to seek a declaratory ruling from the Federal Energy
Regulatory Commission (FERC) regarding certain issues in the case. All
other action in the case has been stayed pending the FERC's ruling.
A former cable installation contractor for Telesat Cablevision, Inc.
(Telesat), a wholly-owned subsidiary of FPL Group Capital, sued FPL
Group, FPL Group Capital and Telesat for breach of contract, fraud,
violation of racketeering statutes and several other claims. The trial
court entered a judgment in favor of FPL Group and Telesat on nine of
twelve counts, including all of the racketeering and fraud claims, and in
favor of FPL Group Capital on all counts. It also denied all parties'
claims for attorneys' fees. However, the jury in the case awarded the
contractor damages totaling approximately $6 million against FPL Group
and Telesat for breach of contract and tortious interference. All parties
have appealed.
FPL Group and FPL believe that they have meritorious defenses to all of
the litigation described above and are vigorously defending these suits.
Accordingly, the liabilities, if any, arising from these proceedings are not
anticipated to have a material adverse effect on their financial
statements.
4. Summarized Financial Information of FPL Group Capital
FPL Group Capital's debentures are guaranteed by FPL Group.
Operating revenues of FPL Group Capital for the nine months ended
September 30, 1996 and 1995 were approximately $45 million and $49
million, respectively. For the same period, operating expenses were
approximately $49 million and $59 million. Net income for the nine
months ended September 30, 1996 and 1995 was approximately $11
million and $1 million, respectively.
At September 30, 1996, FPL Group Capital had current assets of
approximately $92 million, noncurrent assets of approximately $892
million, current liabilities of approximately $15 million and noncurrent
liabilities of approximately $745 million. At December 31, 1995, FPL
Group Capital had approximately $89 million of current assets, $934
million of noncurrent assets, $24 million of current liabilities and $787
million of noncurrent liabilities.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This discussion should be read in conjunction with the Notes to
Condensed Consolidated Financial Statements contained herein and
Management's Discussion and Analysis of Financial Condition and
Results of Operations appearing in the 1995 Form 10-K for FPL Group
and FPL. The results of operations for an interim period may not give a
true indication of results for the year. In the following discussion, all
comparisons are with the corresponding items in the prior year.
RESULTS OF OPERATIONS
Net income for the three and nine months ended September 30, 1996
increased due to higher energy sales, resulting from customer growth
and weather conditions, and lower interest and preferred stock dividend
requirements, partly offset by higher depreciation expense. The three-
month period ended September 30, 1996 also benefitted from lower
operations and maintenance expenses (O&M).
FPL's revenues from base rates for the three and nine months ended
September 30, 1996 increased to approximately $1.03 billion and $2.71
billion, respectively, from approximately $1.00 billion and $2.65 billion for
the same periods in 1995. The increases reflect a 1.8% increase in
customer accounts and increases in energy usage per retail customer of
1.2% and 0.1%, respectively, primarily due to weather conditions.
Revenues from cost recovery clauses and franchise fees comprise
substantially all of the remaining portion of operating revenues. Such
revenues and costs increased mainly as a result of higher gas prices.
These revenues represent a pass-through of costs and do not
significantly affect net income.
O&M decreased for the three months ended September 30, 1996,
primarily due to continued efforts to control costs and costs associated
with ongoing organizational reviews recorded in 1995. Included in O&M
for the third quarter, and the primary reason for the increase in O&M for
the nine months ended September 30, 1996, was a change in the
accounting for costs associated with nuclear refueling outages. Under
this FPSC-approved method, FPL will accrue estimated nuclear refueling
and maintenance costs relating to each unit's next planned outage while
the unit is in operation. Any cost overruns will be expensed when
known. This approach will result in FPL recognizing costs equivalent to
slightly less than three outages per year based upon the current
refueling outage schedule for FPL's four nuclear units. Two refueling
outages occurred in the fourth quarter of 1995, two refueling outages
occurred in the first half of 1996 and no additional refueling outages are
scheduled for the remainder of 1996. The cumulative effect of adopting
this accounting method was $35 million and will be expensed over a
period not to exceed five years. See Note 1 - Accrual for Nuclear
Maintenance Costs.
In 1995, FPL began recording $30 million of special nuclear amortization
per year plus an additional amount based on the level of sales. The
additional expense amounts were to be applied against certain fossil and
nuclear generating assets, as well as regulatory assets. For the three
and nine months ended September 30, 1996, depreciation and
amortization expense increased mainly as a result of the special
amortization of generating assets and regulatory assets, which amounted
to approximately $61 million and $162 million, respectively. In future
periods, FPL will continue to recognize $30 million of special nuclear
amortization per year and the additional expense amounts based on the
level of sales will be applied against regulatory assets. See
Note 1 - Depreciation and Amortization. The increased depreciation of
nuclear and fossil assets also resulted in increased amortization of
related deferred investment tax credits, lowering income tax expense in
1996.
In October 1996, the FPSC approved an accounting rule change that
eliminates AFUDC, except for projects that cost in excess of 1/2% of a
company's electric utility plant in-service. FPL adopted the rule change
retroactive to January 1, 1996. The effect of eliminating AFUDC in 1996
and the contribution of AFUDC in prior periods is included in other - net.
LIQUIDITY AND CAPITAL RESOURCES
Using available cash flows from operations, FPL has redeemed certain
series of its preferred stock and first mortgage bonds, thereby reducing
dividend requirements on preferred stock and interest expense, and has
increased the funding for special use funds. Additionally, FPL Group
has repurchased approximately 1.5 million shares of common stock.
These actions are consistent with management's intent to reduce debt
and preferred stock balances and the number of outstanding shares of
common stock. See Note 2. Other cash flows from operations at FPL
Group decreased mainly as a result of non-recurring alternative minimum
tax benefits realized in 1995.
For information concerning capital commitments, see Note 3.
<PAGE>
PART II - OTHER INFORMATION
Item 5. Other Information
(a) Reference is made to Item 1. Business - FPL Operations - Retail
Ratemaking in the 1995 Form 10-K for FPL Group and FPL.
For information regarding the FPSC's approval of a change in the
accounting for costs associated with planned nuclear refueling
outages, see Note 1 - Accrual for Nuclear Maintenance Costs.
(b) Reference is made to Item 1. Business - FPL Operations - System
Capability and Load in the 1995 Form 10-K for FPL Group and FPL.
In September 1996, FPL received approval from the Nuclear
Regulatory Commission (NRC) to increase the output of each of the
Turkey Point nuclear units by 31 mw. The uprating of Turkey Point
Units Nos. 3 and 4 was completed in October and November 1996,
respectively.
(c) Reference is made to Item 1. Business - FPL Operations - Nuclear
in the 1995 Form 10-K for FPL Group and FPL.
Since mid-1995, the St. Lucie nuclear plant has experienced a
series of mechanical and operational problems that have resulted in
increased attention and fines from the NRC. A number of
self-identified and NRC-identified corrective actions have been
implemented, and several changes have been made to St. Lucie's
management team. However, the NRC continues to review St.
Lucie's overall operations and to identify additional performance
issues.
In September 1996, FPL submitted an analysis of the pressurized
water circulation tubes of the St. Lucie Unit No. 1 steam generators
to the NRC. The analysis supported continued operation of St.
Lucie Unit No. 1 until at least September 1997, at which time FPL
plans to replace the steam generators. The NRC is currently
reviewing the analysis.
(d) Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 (the Reform Act), FPL
Group and FPL (collectively, the Company) are hereby filing
cautionary statements identifying important factors that could cause
the Company's actual results to differ materially from those projected
in forward-looking statements (as such term is defined in the Reform
Act) of the Company made by or on behalf of the Company which
are made in presentations, in response to questions or otherwise.
Any statements that express, or involve discussions as to,
expectations, beliefs, plans, objectives, assumptions or future events
or performance (often, but not always, through the use of words or
phrases such as will likely result, are expected to, will continue, is
anticipated, estimated, projection, outlook) are not historical facts
and may be forward-looking and, accordingly, such statements
involve estimates, assumptions, and uncertainties which could cause
actual results to differ materially from those expressed in the
forward-looking statements. Accordingly, any such statements are
qualified in their entirety by reference to, and are accompanied by,
the following important factors that could cause the Company's
actual results to differ materially from those contained in
forward-looking statements of the Company made by or on behalf of
the Company.
The Company cautions that the following important factors could
cause actual results or outcomes to differ materially from those
expressed in any forward-looking statements of the Company made
by or on behalf of the Company. Any forward-looking statement
speaks only as of the date on which such statement is made, and
the Company undertakes no obligation to update any
forward-looking statement or statements to reflect events or
circumstances after the date on which such statement is made or to
reflect the occurrence of unanticipated events. New factors emerge
from time to time and it is not possible for management to predict all
of such factors, nor can it assess the impact of each such factor on
the business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements.
Some important factors that could cause actual results or outcomes
to differ materially from those discussed in the forward-looking
statements include prevailing governmental policies and regulatory
actions, including those of the FERC, the FPSC and the NRC, with
respect to allowed rates of return, industry and rate structure,
operation of nuclear power facilities, acquisition and disposal of
assets and facilities, operation and construction of plant facilities,
recovery of purchased power, decommissioning costs, and present
or prospective wholesale and retail competition (including but not
limited to retail wheeling and transmission costs).
The business and profitability of the Company are also influenced by
economic and geographic factors including political and economic
risks, changes in and compliance with environmental and safety
laws and policies, weather conditions (including natural disasters
such as hurricanes), population growth rates and demographic
patterns, competition for retail and wholesale customers, pricing and
transportation of commodities, market demand for energy from
plants or facilities, changes in tax rates or policies or in rates of
inflation, unanticipated development project delays or changes in
project costs, unanticipated changes in operating expenses and
capital expenditures, capital market conditions, competition for new
energy development opportunities, and legal and administrative
proceedings (whether civil, such as environmental, or criminal) and
settlements.
All such factors are difficult to predict, contain uncertainties which
may materially affect actual results, and are beyond the control of
the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit FPL
Number Description Group FPL
<S> <C> <C> <C>
10 Employment Agreement between FPL Group and Thomas F. Plunkett dated as of x
September 16, 1996
12 Computation of Ratios x
27 Financial Data Schedule x x
</TABLE>
(b) Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
FPL GROUP, INC.
FLORIDA POWER & LIGHT COMPANY
(Registrants)
Date: November 4, 1996 MICHAEL W. YACKIRA
Michael W. Yackira
Vice President, Finance and Chief Financial Officer of
FPL Group, Inc., Senior Vice President, Finance and Chief
Financial Officer of Florida Power & Light Company
(Principal Financial Officer of the Registrants)
EXHIBIT 12
FLORIDA POWER & LIGHT COMPANY
COMPUTATION OF RATIOS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1996
(Thousands of Dollars)
RATIO OF EARNINGS TO FIXED CHARGES
<S> <C>
Earnings, as defined:
Net income .............................................................................. $518,537
Income taxes ............................................................................ 276,012
Fixed charges, as below ................................................................. 197,859
Total earnings, as defined ............................................................ $992,408
Fixed charges, as defined:
Interest expense ........................................................................ $186,150
Rental interest factor .................................................................. 4,012
Fixed charges included in nuclear fuel cost ............................................. 7,697
Total fixed charges, as defined ....................................................... $197,859
Ratio of earnings to fixed charges ........................................................ 5.02
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND DIVIDEND REQUIREMENTS ON PREFERRED STOCK
Earnings, as defined:
Net income .............................................................................. $518,537
Income taxes ............................................................................ 276,012
Fixed charges, as below ................................................................. 197,859
Total earnings, as defined ............................................................ $992,408
Fixed charges, as defined:
Interest expense ........................................................................ $186,150
Rental interest factor .................................................................. 4,012
Fixed charges included in nuclear fuel cost ............................................. 7,697
Total fixed charges, as defined ....................................................... 197,859
Non-tax deductible dividend requirements on preferred stock ............................... 17,966
Ratio of income before income taxes to net income ......................................... 1.53
Dividend requirements on preferred stock before income taxes .............................. 27,488
Combined fixed charges and dividend requirements on preferred stock ....................... $225,347
Ratio of earnings to combined fixed charges and dividend requirements on preferred stock .. 4.40
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from FPL Group's and FPL's condensed consolidated balance sheet as
of September 30, 1996 and condensed consolidated statements of income and cash flows for the nine months ended September 30, 1996
and is qualified in its entirety by reference to such financial statements.
<CIK> 0000753308
<NAME> FPL Group, Inc.
<MULTIPLIER> 1,000
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<PERIOD-TYPE> 9-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> $9,300,760
<OTHER-PROPERTY-AND-INVEST> $1,301,736
<TOTAL-CURRENT-ASSETS> $1,276,344
<TOTAL-DEFERRED-CHARGES> $0
<OTHER-ASSETS> $502,991
<TOTAL-ASSETS> $12,381,831
<COMMON> $0
<CAPITAL-SURPLUS-PAID-IN> $0
<RETAINED-EARNINGS> $0
<TOTAL-COMMON-STOCKHOLDERS-EQ> $4,597,537
$42,000
$289,580
<LONG-TERM-DEBT-NET> $3,262,857
<SHORT-TERM-NOTES> $0
<LONG-TERM-NOTES-PAYABLE> $0
<COMMERCIAL-PAPER-OBLIGATIONS> $0
<LONG-TERM-DEBT-CURRENT-PORT> $0
$0
<CAPITAL-LEASE-OBLIGATIONS> $0
<LEASES-CURRENT> $0
<OTHER-ITEMS-CAPITAL-AND-LIAB> $4,189,857
<TOT-CAPITALIZATION-AND-LIAB> $12,381,831
<GROSS-OPERATING-REVENUE> $4,601,392
<INCOME-TAX-EXPENSE> $261,602
<OTHER-OPERATING-EXPENSES> $3,619,598
<TOTAL-OPERATING-EXPENSES> $3,619,598
<OPERATING-INCOME-LOSS> $981,794
<OTHER-INCOME-NET> ($5,443)
<INCOME-BEFORE-INTEREST-EXPEN> $696,783
<TOTAL-INTEREST-EXPENSE> $202,642
<NET-INCOME> $494,141
$17,966
<EARNINGS-AVAILABLE-FOR-COMM> $494,141
<COMMON-STOCK-DIVIDENDS> $240,487
<TOTAL-INTEREST-ON-BONDS> $0
<CASH-FLOW-OPERATIONS> $1,315,189
<EPS-PRIMARY> $2.84
<EPS-DILUTED> $2.84
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from FPL's condensed consolidated balance sheet as of September 30,
1996 and condensed consolidated statements of income and cash flows for the nine months ended September 30, 1996 and is qualified
in its entirety by reference to such financial statements.
<CIK> 0000037634
<NAME> Florida Power & Light Company
<MULTIPLIER> 1,000
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<PERIOD-TYPE> 9-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> $9,300,760
<OTHER-PROPERTY-AND-INVEST> $745,055
<TOTAL-CURRENT-ASSETS> $1,203,045
<TOTAL-DEFERRED-CHARGES> $0
<OTHER-ASSETS> $492,496
<TOTAL-ASSETS> $11,741,356
<COMMON> $0
<CAPITAL-SURPLUS-PAID-IN> $0
<RETAINED-EARNINGS> $0
<TOTAL-COMMON-STOCKHOLDERS-EQ> $4,668,156
$42,000
$289,580
<LONG-TERM-DEBT-NET> $2,980,701
<SHORT-TERM-NOTES> $0
<LONG-TERM-NOTES-PAYABLE> $0
<COMMERCIAL-PAPER-OBLIGATIONS> $0
<LONG-TERM-DEBT-CURRENT-PORT> $0
$0
<CAPITAL-LEASE-OBLIGATIONS> $0
<LEASES-CURRENT> $0
<OTHER-ITEMS-CAPITAL-AND-LIAB> $3,760,919
<TOT-CAPITALIZATION-AND-LIAB> $11,741,356
<GROSS-OPERATING-REVENUE> $4,556,678
<INCOME-TAX-EXPENSE> $281,058
<OTHER-OPERATING-EXPENSES> $3,573,133
<TOTAL-OPERATING-EXPENSES> $3,854,191
<OPERATING-INCOME-LOSS> $702,487
<OTHER-INCOME-NET> $2,200
<INCOME-BEFORE-INTEREST-EXPEN> $704,687
<TOTAL-INTEREST-EXPENSE> $186,150
<NET-INCOME> $518,537
$17,966
<EARNINGS-AVAILABLE-FOR-COMM> $500,571
<COMMON-STOCK-DIVIDENDS> $0
<TOTAL-INTEREST-ON-BONDS> $0
<CASH-FLOW-OPERATIONS> $1,371,569
<EPS-PRIMARY> $0
<EPS-DILUTED> $0
</TABLE>
EXHIBIT 10
EMPLOYMENT AGREEMENT
Employment Agreement between FPL GROUP, INC., a
Florida corporation (the "Company"), and Thomas F. Plunkett (the
"Executive"), dated as of September 16, 1996.
The Board of Directors of the Company (the
"Board"), has determined that it is in the best interests of the
Company and its shareholders to assure that the Company and its
affiliated companies will have the continued dedication of the
Executive, notwithstanding the possibility, threat or occurrence of a
Change of Control (as defined below) of the Company. The Board
believes it is imperative to diminish the inevitable distraction of
the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage
the Executive's full attention and dedication to the Company and its
affiliated companies currently and in the event of any threatened or
pending Change of Control, and to provide the Executive with
compensation and benefits arrangements upon a Change of Control which
ensure that the compensation and benefits expectations of the
Executive will be satisfied and which are competitive with those of
other corporations. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this
Agreement.
Therefore, the Company and the Executive agree
as follows:
1. Effective Date. The effective date of this
Agreement shall be the date on which a Change of Control occurs (the
"Effective Date"). Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's
employment with the Company or its affiliated companies is terminated
or the Executive ceases to be an officer of the Company or its
affiliated companies prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment or cessation of status as an officer
(i) was at the request of a third party who has taken steps
reasonably calculated to effect the Change of Control or (ii)
otherwise arose in connection with or anticipation of the Change of
Control, then for all purposes of this Agreement the "Effective Date"
shall mean the date immediately prior to the date of such termination
of employment or cessation of status as an officer.
2. Change of Control. For the purposes of this
Agreement, a "Change of Control" shall mean:
(a) The acquisition by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition by the Company or any or its subsidiaries, (ii) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any of its subsidiaries or (iii) any
acquisition by any corporation with respect to which, following such
acquisition, more than 75% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such acquisition in
substantially the same proportions as their ownership, immediately
prior to such acquisition, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be; or
(b) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened solicitation to which Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act applies or other actual or
threatened solicitation of proxies or consents; or
(c) Approval by the shareholders of the Company
of a reorganization, merger or consolidation, in each case, with
respect to which all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such reorganization, merger or
consolidation do not, following such reorganization, merger or
consolidation, beneficially own, directly or indirectly, more than
75% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such reorganization, merger
or consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or
consolidation of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be; or
(d) Approval by the shareholders of the Company
of (i) a complete liquidation or dissolution of the Company or (ii)
the sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation, with respect to
which following such sale or other disposition, more than 75% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be.
The term "the sale or disposition by the Company
of all or substantially all of the assets of the Company" shall mean
a sale or other disposition transaction or series of related
transactions involving assets of the Company or of any direct or
indirect subsidiary of the Company (including the stock of any direct
or indirect subsidiary of the Company) in which the value of the
assets or stock being sold or otherwise disposed of (as measured by
the purchase price being paid therefor or by such other method as the
Board determines is appropriate in a case where there is no readily
ascertainable purchase price) constitutes more than two-thirds of the
fair market value of the Company (as hereinafter defined). The "fair
market value of the Company" shall be the aggregate market value of
the then Outstanding Company Common Stock (on a fully diluted basis)
plus the aggregate market value of the Company's other outstanding
equity securities. The aggregate market value of the shares of
Outstanding Company Common Stock shall be determined by multiplying
the number of shares of Outstanding Company Common Stock (on a fully
diluted basis) outstanding on the date of the execution and delivery
of a definitive agreement with respect to the transaction or series
of related transactions (the "Transaction Date") by the average
closing price of the shares of Outstanding Company Common Stock for
the ten trading days immediately preceding the Transaction Date. The
aggregate market value of any other equity securities of the Company
shall be determined in a manner similar to that prescribed in the
immediately preceding sentence for determining the aggregate market
value of the shares of Outstanding Company Common Stock or by such
other method as the Board shall determine is appropriate.
3. Employment Period. The Company hereby
agrees to continue the Executive in its or its affiliated companies'
employ, or both, as the case may be, and the Executive hereby agrees
to remain in the employ of the Company, or its affiliated companies,
or both, as the case may be, for a period commencing on the Effective
Date and ending on the 4th anniversary of such date (the "Employment
Period"). As used in this Agreement, the term "affiliated companies"
shall include any corporation or other entity controlled by,
controlling or under common control with the Company.
4. Position and Duties. During the Employment
Period, the Executive's position (including status, offices, titles,
and reporting requirements), authority, duties, and responsibilities
with the Company or its affiliated companies or both, as the case may
be, shall be at least commensurate in all material respects with the
most significant of those held, exercised, and assigned at any time
during the 90-day period immediately preceding the Effective Date.
The Executive's services shall be performed at the location where the
Executive was employed immediately preceding the Effective Date or
any location less than 20 miles from such location.
During the Employment Period, and excluding any
periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote full time and attention
during normal business hours to the business and affairs of the
Company and its affiliated companies. It shall not be a violation of
this Agreement for the Executive to serve on corporate, civic or
charitable boards or committees, deliver lectures, fulfill speaking
engagements or teach at educational institutions and manage personal
investments, so long as such activities do not significantly
interfere with the performance of the Executive's responsibilities as
an employee of the Company or its affiliated companies in accordance
with this Agreement. It is expressly understood and agreed that to
the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of such
activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the Effective Date shall not be deemed to
interfere with the performance of the Executive's responsibilities to
the Company and its affiliated companies.
5. Compensation. During the Employment Period,
the Executive shall be compensated as follows:
(a) Annual Base Salary. The Executive shall be
paid an annual base salary ("Annual Base Salary"), in equal biweekly
installments, at least equal to the annual base salary being paid to
the Executive by the Company and its affiliated companies with
respect to the year in which the Effective Date occurs. The Annual
Base Salary shall be reviewed at least annually and shall be
increased substantially consistent with increases in base salary
generally awarded to other peer executives of the Company and its
affiliated companies. Such increases shall in no event be less than
the increases in the U.S. Department of Labor Consumer Price Index -
U.S. City Average Index. Any increase in Annual Base Salary shall
not serve to limit or reduce any other obligation to the Executive
under this Agreement. Annual Base Salary shall not be reduced after
any such increase and the term Annual Base Salary as utilized in this
Agreement shall refer to Annual Base Salary as so increased. As used
in this Agreement, the term "affiliated companies" shall include any
corporation or other entity controlled by, controlling or under
common control with the Company.
(b) Annual Bonus. In addition to Annual Base
Salary, the Executive shall be awarded, for each fiscal year ending
during the Employment Period, an annual bonus (the "Annual Bonus") in
cash at least equal to the average annual incentive compensation
(annualized for any fiscal year consisting of less than twelve full
months or with respect to which the Executive has been employed by
the Company for less than twelve full months) paid or payable,
including by reason of any deferral, to the Executive by the Company
and its affiliated companies in respect of the two fiscal years
immediately preceding the fiscal year in which the Effective Date
occurs (the "Recent Average Bonus"). The higher of the Recent
Average Bonus or the most recent Annual Bonus awarded by the Company
and its affiliated companies after the Effective Date is herein
called the "Highest Annual Bonus". Each such Annual Bonus shall be
paid no later than the end of the third month of the fiscal year next
following the fiscal year for which the Annual Bonus is awarded,
unless the Executive shall elect to defer the receipt of such Annual
Bonus.
(c) Long Term Incentive Compensation. During
the Employment Period, the Executive shall be entitled to participate
in all incentive compensation plans, practices, policies, and
programs applicable generally to other peer executives of the Company
and its affiliated companies, but in no event shall such plans,
practices, policies, and programs provide the Executive with
incentive opportunities and potential benefits, both as to amount and
percentage of compensation, less favorable, in the aggregate, than
those provided by the Company and its affiliated companies for the
Executive under the FPL Group Long Term Incentive Plan (including,
without limitation, performance share grants and awards) as in effect
at any time during the 90-day period immediately preceding the
Effective Date or; if more favorable to the Executive, those provided
generally at any time after the Effective Date to other peer
executives of the Company and its affiliated companies.
(d) Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in
all savings and retirement plans, practices, policies, and programs
applicable generally to other peer executives of the Company and its
affiliated companies, but in no event shall such plans, practices,
policies, and programs provide the Executive with savings
opportunities and retirement benefit opportunities, in each case,
less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies, and programs as in
effect at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided
generally at any time after the Effective Date to other peer
executives of the Company and its affiliated companies.
(e) Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may
be, shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies, and
programs provided by the Company and its affiliated companies
(including, without limitation, medical, executive medical,
prescription, dental, vision, short-term disability, long-term
disability, executive long-term disability, salary continuance,
employee life, group life, benefits pursuant to a split dollar
arrangement, accidental death and dismemberment, and travel accident
insurance plans and programs) to the extent applicable generally to
other peer executives of the Company and its affiliated companies but
in no event shall such plans, practices, policies, and programs
provide the Executive with benefits which are less favorable, in the
aggregate, than the most favorable of such plans, practices,
policies, and programs in effect for the Executive at any time during
the 90-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally at any time
after the Effective Date to other peer executives of the Company and
its affiliated companies.
(f) Expenses. During the Employment Period,
the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in accordance with
the most favorable policies, practices, and procedures of the Company
and its affiliated companies in effect for the Executive at any time
during the 90-day period immediately preceding the Effective Date or,
if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company
and its affiliated companies.
(g) Fringe Benefits. During the Employment
Period, the Executive shall be entitled to fringe benefits in
accordance with the most favorable plans, practices, programs, and
policies of the Company and its affiliated companies in effect for
the Executive at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive,
as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.
(h) Office and Support Staff. During the
Employment Period, the Executive shall be entitled to an office or
offices of a size and with furnishings and other appointments, and to
exclusive personal secretarial and other assistance, at least equal
to the most favorable of the foregoing provided to the Executive by
the Company and its affiliated companies at any time during the 90-
day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
(i) Vacation. During the Employment Period,
the Executive shall be entitled to paid vacation in accordance with
the most favorable plans, policies, programs, and practices of the
Company and its affiliated companies as in effect for the Executive
at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
incentives of the Company and its affiliated companies.
6. Termination of Employment.
(a) Disability. If the Company determines in
good faith that the Disability of the Executive has occurred during
the Employment Period (pursuant to the definition of Disability set
forth below), it may give to the Executive written notice in
accordance with Section 13(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's
employment with the Company shall terminate effective on the 30th day
after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the 30 days after such
receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this
Agreement, "Disability" shall mean the absence of the Executive from
the Executive's duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to
the Executive or the Executive's legal representative (such agreement
as to acceptability not to be withheld unreasonably).
(b) Cause. The Company may terminate the
Executive's employment during the Employment Period for Cause. For
purposes of this Agreement, "Cause" shall mean (i) repeated
violations by the Executive of the Executive's obligations under
Section 4 of this Agreement (other than as a result of incapacity due
to physical or mental illness) which are demonstrably willful and
deliberate on the Executive's part, which are committed in bad faith
or without reasonable belief that such violations are in the best
interests of the Company and which are not remedied in a reasonable
period of time after receipt of written notice from the Company
specifying such violations or (ii) the conviction of the Executive of
a felony involving an act of dishonesty intended to result in
substantial personal enrichment at the expense of the Company or its
affiliated companies.
(c) Good Reason. The Executive's employment
may be terminated during the Employment Period by the Executive for
Good Reason.
For purposes of this Agreement, "Good Reason"
shall mean:
(i) the assignment to the Executive of
any duties inconsistent in any respect with the
Executive's position (including status, offices,
titles and reporting requirements), authority,
duties or responsibilities as contemplated by
Section 4 of this Agreement, or any other action
by the Company which results in a diminution in
such position, authority, duties or
responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by
the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to
comply with any of the provisions of Section 5
of this Agreement, other than isolated,
insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by
the Company promptly after receipt of notice
thereof given by the Executive;
(iii) the Company's requiring the
Executive to be based at any office or location
other than that described in Section 4 hereof;
(iv) any purported termination by the
Company of the Executive's employment otherwise
than as expressly permitted by this Agreement;
or
(v) any failure by the Company to
comply with and satisfy Section 12(c) of this
Agreement, provided that such successor has
received at least ten days prior written notice
from the Company or the Executive of the
requirements of Section 12(c) of the Agreement.
For purposes of this Section 6(c), any good
faith determination of "Good Reason" made by the Executive shall be
conclusive.
(d) Notice of Termination. Any termination by
the Company for Cause, or by the Executive for Good Reason, shall be
communicated by Notice of Termination to the other party hereto given
in accordance with Section 13(b) of this Agreement. For purposes of
this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision so indicated and (iii) if the Date of Termination (as
defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than
fifteen days after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of Termination
any fact or circumstances which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the
Company hereunder or preclude the Executive or the Company from
asserting such fact or circumstance in enforcing the Executive's or
the Company's rights hereunder.
(e) Date of Termination. "Date of Termination"
means (i) if the Executive's employment is terminated by the Company
for Cause, or by the Executive for Good Reason, the date of receipt
of the Notice of Termination or any later date specified therein, as
the case may be, (ii) if the Executive's employment is terminated by
the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive's employment
is terminated by reason of Disability, the Date of Termination shall
be the Disability Effective Date.
7. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause or
Disability. If, during the Employment Period, the Company terminates
the Executive's employment other than for Cause or Disability or the
Executive terminates employment for Good Reason:
(i) the Company shall pay to the
Executive in a lump sum in cash within 30 days
after the Date of Termination the aggregate of
the following amounts (such aggregate being
hereinafter referred to as the "Special
Termination Amount"):
A. the sum of (1) the
Executive's Annual Base Salary through
the Date of Termination to the extent
not theretofore paid, (2) the product of
(x) the Highest Annual Bonus and (y) a
fraction, the numerator of which is the
number of days in the current fiscal
year through the Date of Termination,
and the denominator of which is 365 and
(3) any compensation previously deferred
by the Executive (together with any
accrued interest or earnings thereon)
(including, without limitation,
compensation, bonus, incentive
compensation or awards deferred under
the FPL Group, Inc. Deferred
Compensation Plan or incentive
compensation or awards deferred under
the FPL Group, Inc. Long-Term Incentive
Plan of 1985, the FPL Group, Inc. Long
Term Incentive Plan of 1994, or pursuant
to an individual deferral agreement) and
any accrued vacation pay, in each case
to the extent not theretofore paid (the
sum of the amounts described in clauses
(1), (2), and (3) being herein called
the "Accrued Obligations"); and
B. the amount equal to the
product of (1) the greater of two or the
number of years (with any partial year
expressed as a fraction) remaining in
the Employment Period and (2) the sum of
(x) the Executive's Annual Base Salary
and (y) the Highest Annual Bonus;
provided, however, that such amount
shall be paid in lieu of, and the
Executive hereby waives the right to
receive, any other amount of severance
relating to salary or bonus continuation
to be received by the Executive upon
termination of employment of the
Executive under any severance plan,
policy or arrangement of the Company;
and
C. the maximum amount payable
under all performance share grants and
all other long term incentive
compensation grants to the Executive,
calculated as though the Executive had
remained employed by the Company for the
remainder of the Employment Period and
on the basis of actual achievement of
performance measures through the end of
the fiscal year preceding the fiscal
year in which the Date of Termination
occurs and thereafter assuming 100%
achievement of all performance measures
through the end of the Employment
Period; and
D. a separate lump-sum
supplemental retirement benefit equal to
the difference between (1) the actuarial
equivalent (utilizing for this purpose
the actuarial assumptions utilized with
respect to the FPL Group Employee
Pension Plan (or any successor plan
thereto) (the "Retirement Plan") during
the 90-day period immediately preceding
the Effective Date) of the benefit
payable under the Retirement Plan and
all supplemental and/or excess
retirement plans providing benefits for
the Executive (the "SERP") (including,
but not limited to the Supplemental
Pension Benefit (as defined in the FPL
Group, Inc. Supplemental Executive
Retirement Plan)) which the Executive
would receive if the Executive's
employment continued at the compensation
level provided for in Sections 5(a) and
5(b) of this Agreement for the remainder
of the Employment Period, assuming for
this purpose that all accrued benefits
are fully vested and that benefit
accrual formulas are no less
advantageous to the Executive than those
in effect during the 90-day period
immediately preceding the Effective
Date, or, if more favorable to the
Executive, as in effect generally at any
time thereafter during the Employment
Period with respect to other peer
executives of the Company and its
affiliated companies, and (2) the
actuarial equivalent (utilizing for this
purpose the actuarial assumptions
utilized with respect to the Retirement
Plan during the 90-day period
immediately preceding the Effective
Date) of the Executive's actual benefit
(paid or payable), if any, under the
Retirement Plan and the SERP; and
E. a separate lump-sum
supplemental retirement benefit equal to
the difference between (1) the value of
the Company Account (as defined in the
FPL Group Employee Thrift Plan or any
successor plan thereto) (the "Thrift
Plan") and any other matching
contribution accounts (including, but
not limited to the Supplemental Matching
Contribution Account (as defined in the
FPL Group, Inc. Supplemental Executive
Retirement Plan)) under a SERP which the
Executive would receive if (i) the
Executive s employment continued at the
compensation level provided for in
Sections 5(a) and 5(b) of this Agreement
for the remainder of the Employment
Period, (ii) the Executive made pre- and
after-tax contributions at the highest
permissible rate (disregarding any
limitations imposed by the Internal
Revenue Code, which may or may not be
set forth in the Thrift Plan) for each
year remaining in the Employment Period,
(iii) the Company Account and the
matching contribution accounts are fully
vested, and (iv) the matching
contribution formulas are no less
advantageous to the Executive than those
in effect during the 90-day period
immediately preceding the Effective Date
or, if more favorable to the Executive,
as in effect generally at any time
during the remainder of the Employment
Period with respect to other peer
executives of the Company and its
affiliated companies, and (2) the actual
value of the Executive s Company Account
and matching contribution accounts (paid
or payable), if any, under the Thrift
Plan and the SERP; and
(ii) for the remainder of the
Employment Period, or such longer period as any
plan, program, practice or policy may provide,
the Company shall continue benefits to the
Executive and/or the Executive's family at least
equal to those which would have been provided to
them in accordance with the plans, programs,
practices and policies described in Sections
5(e) and 5(g) of this Agreement if the
Executive's employment had not been terminated,
in accordance with the most favorable plans,
practices, programs or policies of the Company
and its affiliated companies applicable
generally to other peer executives and their
families during the 90-day period immediately
preceding the Effective Date or, if more
favorable to the Executive, as in effect
generally at any time thereafter with respect to
other peer executives of the Company and its
affiliated companies and their families,
provided, however, that if the Executive becomes
reemployed with another employer and is eligible
to receive medical or other welfare benefits
under another employer provided plan, the
medical and other welfare benefits described
herein shall be secondary to those provided
under such other plan during such applicable
period of eligibility. For purposes of
determining eligibility of the Executive for
retiree benefits pursuant to such plans,
practices, programs and policies, the Executive
shall be considered to have remained employed
until the end of the Employment Period and to
have retired on the last day of such period; and
(iii) to the extent not theretofore
paid or provided, the Company shall timely pay
or provide to the Executive any other amounts or
benefits required to be paid or provided or
which the Executive is eligible to receive
pursuant to this Agreement or otherwise under
any plan, program, policy or practice or
contract or agreement of the Company and its
affiliated companies (such other amounts and
benefits shall be hereinafter referred to as the
"Other Benefits"), but excluding solely for
purposes of this Section 7(a)(iii) amounts
waived by the Executive pursuant to Section
7(a)(i)(B).
(b) Death. Upon the Executive's death during
the Employment Period, this Agreement shall terminate without further
obligations to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. All Accrued
Obligations shall be paid to the Executive's estate or beneficiary,
as applicable, in a lump sum in cash within 30 days of the Date of
Termination. The term Other Benefits as utilized in this Section
7(b) shall include, without limitation, and the Executive's family
shall be entitled to receive, benefits at least equal to the most
favorable benefits provided by the Company and any of its affiliated
companies to surviving families of peer executives of the Company and
such affiliated companies under such plans, programs, practices and
policies relating to family death benefits, if any, as in effect with
respect to other peer executives and their families at any time
during the 90-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive's family, as
in effect on the date of the Executive's death with respect to other
peer executives of the Company and its affiliated companies and their
families.
(c) Disability. If the Executive's employment
is terminated by reason of the Executive's Disability during the
Employment Period, this Agreement shall terminate without further
obligations to the Executive, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits.
All Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination. The term Other
Benefits as utilized in this Section 7(c) shall include, and the
Executive shall be entitled after the Disability Effective Date to
receive, disability and other benefits at least equal to the most
favorable of those generally provided by the Company and its
affiliated companies to disabled executives and/or their families in
accordance with such plans, programs, practices and policies relating
to disability, if any, as in effect generally with respect to other
peer executives and their families at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable
to the Executive and/or the Executive's family, as in effect at any
time thereafter generally with respect to other peer executives of
the Company and its affiliated companies and their families.
(d) Cause; Other Than for Good Reason. If the
Executive's employment shall be terminated for Cause during the
Employment Period, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to the
Executive Annual Base Salary through the Date of Termination plus the
amount of any compensation previously deferred by the Executive, in
each case to the extent theretofore unpaid. If the Executive
terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without
further obligations to the Executive, other than for Accrued
Obligations and the timely payment or provision of Other Benefits.
In such case, all Accrued Obligations shall be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination.
8. Non-exclusivity of Rights. Except as
provided in Sections 7(a)(i)(B), 7(a)(ii), and 7(a)(iii) of this
Agreement, nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its
affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company
or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly
modified by this Agreement.
9. Full Settlement. The Company's obligation
to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-
off, counterclaim, recoupment, defense or other claim, right or
action which the Company may have against the Executive or others.
In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and,
except as provided in Section 7(a)(ii) of this Agreement, such
amounts shall not be reduced whether or not the Executive obtains
other employment. The Company agrees to pay, to the full extent
permitted by law, all legal fees and expenses which the Executive may
reasonably incur at all stages of proceedings, including, without
limitation, preparation and appellate review, as a result of any
contest (regardless of whether formal legal proceedings are ever
commenced and regardless of the outcome thereof) by the Company, the
Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the
applicable Federal rate provided for in Section 7872 (f)(2)(A) of the
Internal Revenue Code of 1986, as amended (the"Code").
10. Certain Additional Payments by the Company.
Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any
additional payments required under this Section 10) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as
the "Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any interest
or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.
11. Confidential Information. The Executive
shall hold in a fiduciary capacity for the benefit of the Company all
secret or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in
violation of this Agreement). After termination of the Executive's
employment with the Company, the Executive shall not, without the
prior written consent of the Company or as may otherwise be required
by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the
provisions of this Section 11 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.
12. Successors.
(a) This Agreement is personal to the Executive
and without the prior written consent of the Company shall not be
assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit
of and be binding upon the Company and its successors and assigns.
(c) The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and /or assets
of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken
place. As used in this Agreement, "Company" shall mean the Company
as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
13. Miscellaneous.
(a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida,
without reference to principles of conflict of laws. The captions of
this Agreement are not part of the provisions hereof and shall have
no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
(b) All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to
the other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Thomas F. Plunkett
11751 Stonehaven Way
West Palm Beach, FL 33412
If to the Company:
FPL Group, Inc.
700 Universe Boulevard
Juno Beach, Florida 33408
Attention: Vice President, Human Resources
or such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(d) The Company may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or
regulation.
(e) The Executive's or the Company's failure to
insist upon strict compliance with any provision hereof or any other
provision of this Agreement or the failure to assert any right the
Executive or the Company may hereunder, including, without
limitation, the right of the Executive to terminate employment for
Good Reason pursuant to Section 6(c)(i)-(v) of this Agreement, shall
not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
(f) The Executive and the Company acknowledge
that, except as may otherwise be provided under any other written
agreement between the Executive and the Company, the employment of
the Executive by the Company is "at will" and, prior to the Effective
Date, may be terminated by either the Executive or the Company at any
time. Moreover, except as provided in Section 1, if prior to the
Effective Date, (i) the Executive's employment with the Company
terminates or (ii) the Executive ceases to be an officer of the
Company, then the Executive shall have no further rights under this
Agreement.
IN WITNESS WHEREOF, the Executive has hereunto
set the Executive's hand and, pursuant to the authorization from the
Board of Directors, the Company has caused these presents to be
executed in its name on its behalf, all as of the day and year first
above written.
THOMAS F. PLUNKETT
Thomas F. Plunkett
FPL GROUP, INC.
By LAWRENCE J. KELLEHER
Lawrence J. Kelleher
Vice President Human Resources
