<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
<TABLE>
<CAPTION>
Commission Exact name of Registrants as specified in their charters, address of IRS Employer Iden-
File Number principal executive 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
(407) 694-4647
</TABLE>
State or other jurisdiction of incorporation or organization: Florida
<TABLE>
<CAPTION>
<S> <C>
Securities registered pursuant to Section 12(b) of the Act: Name of exchange on which registered
FPL Group, Inc.:
Common Stock, $.01 Par Value and Preferred Share Purchase Rights New York Stock Exchange
Florida Power & Light Company:
$2.00 No Par Preferred Stock, Series A New York Stock Exchange
8.75% Quarterly Income Debt Securities (Subordinated Deferrable New York Stock Exchange
Interest Debentures)
Securities registered pursuant to Section 12(g) of the Act:
FPL Group, Inc.: None
Florida Power & Light Company: Preferred Stock, $100 Par Value
</TABLE>
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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrants' knowledge in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ ]
Aggregate market value of the voting stock of FPL Group, Inc. held by
non-affiliates as of February 29, 1996 (based on the closing market
price on the Composite Tape on February 29, 1996) was $8,222,204,624
(determined by subtracting from the number of shares outstanding on
that date the number of shares held by directors and officers of FPL
Group, Inc.).
Aggregate market value of the voting stock of Florida Power & Light
Company held by non-affiliates as of February 29, 1996 was zero.
The number of shares of FPL Group, Inc. outstanding of each class of
common stock, as of the close of the latest practicable date: Common
Stock, $.01 Par Value, outstanding at February 29, 1996: 184,512,535
shares
As of February 29, 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.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of FPL Group, Inc.'s Definitive Proxy Statement for the 1996
Annual Meeting of Shareholders are incorporated by reference in Part
III hereof.
______________________________
This combined Form 10-K 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>
DEFINITIONS
Acronyms and defined terms used in the text include the following:
<TABLE>
<CAPTION>
Term Meaning
<S> <C>
AFUDC Allowance for funds used during construction
capacity clause Capacity cost recovery clause
charter Restated Articles of Incorporation, as amended, of FPL Group or FPL, as
the case may be
common stock Common Stock of FPL Group
conservation clause Energy conservation cost recovery clause
DOE United States Department of Energy
EMF Electric and magnetic fields
environmental clause Environmental compliance cost recovery clause
ESI ESI Energy, Inc.
EWG Exempt wholesale generator
FDEP Florida Department of Environmental Protection
FERC Federal Energy Regulatory Commission
FGT Florida Gas Transmission Company
FMPA Florida Municipal Power Agency
FPL Florida Power & Light Company
FPL Group FPL Group, Inc.
FPL Group Capital FPL Group Capital Inc
FPSC Florida Public Service Commission
fuel clause Fuel and purchased power cost recovery clause
Holding Company Act Public Utility Holding Company Act of 1935, as amended
JEA Jacksonville Electric Authority
kv Kilovolt
kva Kilovolt-ampere
kwh Kilowatt-hour
Management's Discussion Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
mortgage FPL's Mortgage and Deed of Trust dated as of January 1, 1944, as
supplemented and amended
mw Megawatt(s)
Note Note to Consolidated Financial Statements
NRC United States Nuclear Regulatory Commission
O&M expenses Other operations and maintenance expenses
PURPA Public Utility Regulatory Policies Act of 1978, as amended
qualifying facilities Non-utility power production facilities meeting the requirements of a
qualifying facility under the PURPA
ROE Return on equity
SJRPP St. Johns River Power Park
Telesat Telesat Cablevision, Inc.
Thrift Plans FPL Group employee thrift plans
Turner Turner Foods Corporation
/TABLE
<PAGE>
PART I
Item 1. Business
FPL GROUP
FPL Group, incorporated under the laws of Florida in 1984, is a
public utility holding company (as defined in the Holding Company
Act). FPL Group's principal subsidiary, FPL, is engaged in the
generation, transmission, distribution and sale of electric energy.
Other operations are conducted through FPL Group Capital and its
subsidiaries and mainly consist of investments in non-utility energy
projects and agricultural operations. FPL Group, together with its
subsidiaries, employs approximately 11,400 persons.
FPL Group is exempt from substantially all of the provisions of the
Holding Company Act on the basis that FPL Group's and FPL's
businesses are predominantly intrastate in character and carried on
substantially in a single state, in which both are incorporated.
FPL OPERATIONS
General. FPL, incorporated under the laws of Florida in 1925 and a
wholly-owned subsidiary of FPL Group, supplies electric service
throughout most of the east and lower west coasts of Florida. This
service territory contains 27,650 square miles with a population of
approximately 6.5 million. During 1995, FPL served approximately 3.5
million customer accounts. Operating revenues were as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
(Millions of Dollars)
<S> <C> <C> <C>
Residential .......................... $3,097 $2,920 $2,950
Commercial ........................... 1,953 1,854 1,924
Industrial ........................... 195 189 210
Other, including unbilled revenues.... 285 380 140
$5,530 $5,343 $5,224
</TABLE>
Regulation. The retail operations of FPL provided approximately 98%
of FPL's operating revenues for 1995. Such operations are regulated
by the FPSC which has jurisdiction over retail rates, service
territory, issuances of securities, planning, siting and construction
of facilities and other matters. FPL is also subject to regulation
by the FERC in various respects, including the acquisition and
disposition of facilities, interchange and transmission services and
wholesale purchases and sales of electric energy.
FPL is subject to the jurisdiction of the NRC with respect to its
nuclear power plants. NRC regulations govern the granting of
licenses for the construction and operation of nuclear power plants
and subject such power plants to continuing review and regulation.
Federal, state and local environmental laws and regulations cover air
and water quality, land use, power plant and transmission line
siting, electric and magnetic fields from power lines and
substations, noise and aesthetics, solid waste and other
environmental matters. Compliance with these laws and regulations
increases the cost of electric service by requiring, among other
things, changes in the design and operation of existing facilities
and changes or delays in the location, design, construction and
operation of new facilities. FPL estimates that capital expenditures
required to comply with environmental laws and regulations for 1996
through 1998 will not be material. These expenditures are included
in FPL's projected capital expenditures set forth in Item 1.
Business - FPL Operations - Capital Expenditures.
FPL holds franchises with varying expiration dates to provide
electric service in various municipalities and counties in Florida.
FPL considers its franchises to be adequate for the conduct of its
business.
Retail Ratemaking. The underlying concept of utility ratemaking is
to set rates at a level that allows the utility to collect total
revenues (revenue requirements) equal to its cost of providing
service, including a reasonable return on invested capital. To
accomplish this, the FPSC uses various ratemaking mechanisms.
The basic costs of providing electric service, other than fuel and
certain other costs, are recovered through base rates, which are
designed to recover the costs of constructing, operating and
maintaining the utility system. These costs include O&M expenses,
depreciation and taxes, as well as a return on FPL's investment in
assets used and useful in providing electric service (rate base).
The rate of return on rate base approximates FPL's weighted cost of
capital, which includes its costs for debt and preferred stock and an
allowed ROE. FPL's currently authorized ROE range is 11% to 13% with
a midpoint of 12%. The FPSC does not provide any assurance that the
allowed ROE will be achieved. Base rates are determined in rate
proceedings which occur at irregular intervals at the initiative of
FPL, the FPSC or a substantially affected party.
Fuel costs, which totaled approximately $1.4 billion in 1995, are
recovered through levelized charges established pursuant to the fuel
clause. These charges are calculated semi-annually based on
estimated costs of fuel and estimated customer usage for the ensuing
six-month period, plus or minus a true-up adjustment to reflect the
variance of actual costs and usage from the estimates used in setting
the fuel adjustment charges for prior periods.
Capacity payments to other utilities and generating companies for
purchased power recovered through the capacity clause totaled
approximately $300 million in 1995. Costs associated with
implementing energy conservation programs, which totaled
approximately $120 million in 1995, are recovered through rates
established pursuant to the conservation clause. Costs of complying
with federal, state and local environmental regulations, which
totaled approximately $10 million in 1995, are recovered through the
environmental clause to the extent not included in base rates.
The FPSC has the authority to disallow recovery of costs which it
considers excessive or imprudently incurred. Such costs may include
O&M expenses, the cost of replacing power lost when fossil and
nuclear units are unavailable and costs associated with the
construction or acquisition of new facilities.
Competition. Competitive forces affecting the sale of electrical
energy may result in a transition from cost-based to market-based
pricing. Initiatives in various states have proposed changing or
phasing out traditional cost-of-service regulation, particularly with
regard to the generation of electricity. These initiatives are the
subject of considerable debate, and are generally not yet effective;
however, they are an indication of increasing competitive pressures
in the electric utility industry. In Florida, such initiatives have
not progressed as far as in other states. FPL currently faces
competition from other suppliers of electrical energy for wholesale
customers and from alternative energy sources and self-generation for
other customer groups, primarily industrial customers. In 1995,
operating revenues from wholesale and industrial customers
represented 1% and 4%, respectively, of FPL's total operating
revenues. Florida law does not currently permit competition among
regulated and non-regulated suppliers of electrical energy for retail
customers. However, in order to be prepared in the event that
greater retail competition arises in FPL's market, FPL has instituted
aggressive ongoing cost control efforts, including significant
reductions in capital expenditures and O&M expenses. FPL has also
petitioned and received interim approval from the FPSC to accelerate
recovery of its nuclear facilities. A final decision is expected by
mid-1996. See Management's Discussion - Results of Operations.
While legislators and state regulatory commissions will decide what
impact, if any, competitive forces will have on retail transactions,
the FERC has jurisdiction over potential changes which could affect
competition in wholesale transactions. In 1994, the FERC announced
broad policies governing transmission access and pricing. In 1995,
the FERC expanded such policies through a broad Notice of Proposed
Rulemaking that requires jurisdictional utilities to have on file at
the FERC open access transmission tariffs that comply with the FERC's
proposals. The rules are expected to become final in 1996. In
general, these policies require a utility to provide to third parties
access to the utility's transmission system on a basis comparable to
the uses the utility makes of its own system and at comparable costs.
In 1993, FPL filed with the FERC a comprehensive revision of its
service offerings in the wholesale market. FPL proposed changes to
its wholesale sales tariffs for service to municipal and
cooperatively-owned electric utilities, its power sharing
(interchange) agreements with other utilities and expanded its
transmission offerings for new services by switching from
individually negotiated contracts to three tariffs of general
applicability. In December 1995, the administrative law judge issued
his initial decision, ruling in favor of FPL on some issues and
against FPL on others. A final decision on this case is not expected
until sometime in 1997. FPL began collecting the proposed rates in
1994, subject to refund pending the final outcome of the case.
The structure and pricing of network transmission service to the
FMPA, an association of municipal electric utilities operating in the
state, is the subject of a separate FERC proceeding. In 1994, FPL
filed its proposal for network transmission service to the FMPA in
compliance with a FERC order approving FPL's pricing mechanism. In
January 1996, the FERC issued an order, which among other things,
accepted FPL's proposed filing as modified by the order and ordered
the proceeding closed.
FPL is a defendant in three antitrust suits, including one filed by
the FMPA. The complaints include an alleged inability to utilize
FPL's transmission facilities to wheel power. See Item 3. Legal
Proceedings.
System Capability and Load. FPL's resources for serving load as of
December 31, 1995 consisted of 18,483 mw of electric power, 16,312 mw
generated by FPL-owned facilities (see Item 2.
Properties - Generating Facilities) and 2,171 mw obtained through
purchased power contracts. FPL intends to satisfy future load, which
reflects projected compounded annual growth in kwh sales of 2.4% over
the next 5 years, with approximately 120 mw of additional purchased
power under existing contracts with new qualifying facilities. See
Note 10 - Contracts. The compounded annual growth rate of kwh sales
was 4.8% for the three years ended December 31, 1995. Customer
growth averaged 2.1% per year during the same period.
Customer usage and operating revenues are typically higher during the
summer months largely due to the prevalent use of air conditioning in
FPL's service territory. However, occasionally, extremely cold
temperatures during the winter months result in unusually high
electricity usage for a short period of time. On February 5, 1996,
FPL reached an all-time energy peak demand of approximately 18,100
mw. At that time, FPL was able to meet the peak with available
installed generation, purchased power and load management resources.
Capital Expenditures. FPL's capital expenditures totaled
approximately $669 million in 1995, $770 million in 1994 and $1.1
billion in 1993. Capital expenditures for the 1996-98 period are
expected to be approximately $1.5 billion, including $511 million in
1996. This estimate is subject to continuing review and adjustment,
and actual capital expenditures may vary from this estimate. See
Management's Discussion - Liquidity and Capital Resources.
Nuclear Operations. FPL owns and operates four nuclear units, two at
St. Lucie and two at Turkey Point. The operating licenses for St.
Lucie Units Nos. 1 and 2 expire in 2016 and 2023, respectively. The
operating licenses for Turkey Point Units Nos. 3 and 4 expire in 2012
and 2013, respectively. The nuclear units are periodically removed
from service to accommodate normal refueling and maintenance outages,
repairs and certain other modifications. A condition of the
operating license for each unit requires an approved plan for
decontamination and decommissioning. FPL's current plans provide for
dismantlement of the Turkey Point units commencing in 2013. St.
Lucie Unit No. 1 will be mothballed in 2016 until 2023 when
dismantlement of both Unit No. 1 and Unit No. 2 will commence. See
estimated cost data in Note 1 - Nuclear Decommissioning.
Fuel. FPL's generating plants are fueled by nuclear fuel, natural
gas, residual and distillate oil and coal. See Note 10 - Contracts.
The diverse fuel options, along with purchased power, enable FPL to
shift between sources of generation to achieve an economical fuel
mix. FPL's oil requirements are obtained under short-term contracts
and in the spot market.
FPL has contracts in place with FGT that satisfy substantially all of
the anticipated needs for natural gas transportation over the next
ten years. The existing contracts expire in 2005 and 2010, but can
be extended at FPL's option. To the extent desirable, FPL can also
purchase interruptible gas transportation service from FGT based on
pipeline availability. FPL has a 15-year firm natural gas supply
contract at market rates with an affiliate of FGT to provide
approximately two-thirds of FPL's anticipated needs for natural gas.
The remainder of FPL's gas requirements will be purchased under other
contracts and in the spot market.
FPL has, through its joint ownership interest in SJRPP Units Nos. 1
and 2, long-term coal supply and transportation contracts for a
significant portion of the fuel needs for those units. All of the
transportation requirements and a portion of the fuel supply needs
for Scherer Unit No. 4 are covered by a series of annual and
long-term contracts. The remaining coal requirements will be
obtained under additional contracts and in the spot market.
FPL leases nuclear fuel for all four of its nuclear units. See
Note 3. Under the Nuclear Waste Policy Act of 1982, the DOE is
required to construct permanent storage facilities and will take
title to and provide transportation and storage for spent nuclear
fuel for a specified fee based on current generation from nuclear
power plants. Through 1995, FPL has paid approximately $310 million
to the DOE for future transportation and storage. Although the DOE
estimates that its storage facilities will be completed by 2010,
there is considerable doubt within the utility industry that this
schedule will be met. Currently, FPL is storing spent fuel on site
and plans to provide adequate storage capacity for all of its spent
nuclear fuel up to and beyond 2010, pending its removal by the DOE.
In 1994, FPL entered into a 20-year contract with Bitor America to
purchase Orimulsion, a fuel that is an emulsion of bitumen and water
and is priced equivalently to coal. The contract is contingent upon
FPL obtaining an operating permit from environmental agencies to use
Orimulsion at the Manatee units. The environmental permitting
process is underway and final rulings are expected by mid-1996. FPL
has committed to purchase Orimulsion to satisfy approximately 60% of
the capacity of the Manatee units, but may elect to purchase enough
Orimulsion to satisfy Manatee's total capacity. See Item 2.
Properties - Generating Facilities. The FPSC has authorized FPL to
recover through the fuel clause on an accelerated basis the capital
costs of modifying the Manatee units to burn Orimulsion as well as
any incremental operating and maintenance costs. The FPSC also found
that FPL's decision to convert these units to burn Orimulsion is
prudent and reasonable. FPL expects to commence using Orimulsion in
1998, pending environmental approvals.
Electric and Magnetic Fields. In recent years, increasing public,
scientific and regulatory attention has been focused on possible
adverse health effects of EMF. These fields are created whenever
electricity flows through a power line or an appliance. Several
epidemiological (i.e., statistical) studies have suggested a linkage
between EMF and certain types of cancer, including leukemia and brain
cancer; other studies have been inconclusive, contradicted earlier
studies or have shown no such linkage. Neither these epidemiological
studies nor clinical studies have produced any conclusive evidence
that EMF does or does not cause adverse health effects.
The FDEP has promulgated regulations setting standards for EMF levels
within and at the edge of the rights of way for transmission lines,
and FPL is in compliance with these regulations. The FDEP reviewed
its EMF standards in 1992 and confirmed the field limits previously
established. Future changes in the standards could require
additional capital expenditures by FPL for such things as increasing
the right of way corridors or relocating or reconfiguring
transmission facilities. At present it is not known whether any such
expenditures will be required.
In addition, litigation seeking damages for diminution of property
value or personal injury is likely. FPL is presently a defendant in
one suit alleging personal injury and wrongful death resulting from
EMF.
Employees. FPL had approximately 11,100 employees at December 31,
1995. Approximately 36% of the employees are represented by the
International Brotherhood of Electrical Workers under a collective
bargaining agreement with FPL expiring on October 31, 1997.
OTHER FPL GROUP OPERATIONS
FPL Group Capital, a wholly-owned subsidiary of FPL Group, holds the
capital stock of the operating subsidiaries other than FPL and
provides most of their funding. The business activities of these
companies consist primarily of investments in non-utility energy
projects and agricultural operations.
Non-Utility Energy. ESI provides equity capital, debt financing,
project development and operations management for non-utility energy
projects. To date, ESI has invested in one project that qualifies as
an EWG. Substantially all other projects in which it has invested
are qualifying facilities under PURPA. ESI participates in 27
non-utility energy projects totaling 1,906 mw, primarily through
non-controlling ownership interests in joint ventures or leveraged
lease investments. Based on ESI's invested capital at December 31,
1995, the projects are concentrated in California (57%) and
Pennsylvania (17%). The technologies and fuels used by the projects
to produce electricity include wind, geothermal, natural gas, solar,
biomass (wood), waste-to-energy and waste coal. Energy production
from the non-utility energy investments is generally higher during
the third quarter due to increased energy demand and resource
availability.
Many of the projects in which ESI invests, particularly those located
in California, operate under fixed price energy sales contracts for a
period of years then convert to the purchasing utility's avoided
costs. Currently, avoided cost is below the fixed price for many of
these projects. Competitive initiatives in California propose
phasing in market-based rather than cost-based pricing by 2002. The
effect of these initiatives may be to lower avoided cost and, as a
result, revenues paid to non-utility generators. Any decline in
revenues not offset by operational or performance efficiencies would
adversely affect ESI's earnings from and the value of its investment
in these projects.
Agriculture. FPL Group Capital's agricultural subsidiary, Turner,
owns and operates citrus groves in Florida. Turner's primary product
is juice oranges, which are sold to processors for the premium not-
from-concentrate, as well as the domestic frozen-concentrate, orange
juice markets. Other products include grapefruit and specialty
fruits. Turner's operations are seasonal, with the majority of the
citrus harvest taking place between January and April.
As of December 31, 1995, Turner owned or leased approximately 29,000
acres of citrus properties, which included 18,000 planted acres,
4,000 acres of undeveloped land and 7,000 acres of infrastructure,
wet lands and reservoirs.
Other. After giving effect to transactions completed in 1995 which
had no significant effect on net income, FPL Group Capital maintains
a limited amount of properties held for disposition. The remaining
properties mainly consist of undeveloped land and certain
mortgaged-backed loans. These assets are carried at estimated net
realizable value including costs to dispose. Efforts to dispose of
these properties continue. FPL Group cannot estimate the timing of
their ultimate disposition, but these transactions are not expected
to have an adverse effect on FPL Group's net income. In 1995,
Telesat began the process of transferring, pending regulatory
approval, its remaining wholly-owned cable television subscriber base
into a limited partnership, which removed FPL Group from the
day-to-day management and operation of the cable television business.
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANTS (1)(2)
<TABLE>
<CAPTION>
Name Age Position Effective Date
<S> <C> <C> <C>
James L. Broadhead 60 Chairman of the Board, President and Chief Executive Officer
of FPL Group .................................................... May 8, 1990
Chairman of the Board and Chief Executive Officer of FPL .......... January 15, 1990
Dennis P. Coyle 57 General Counsel and Secretary of FPL Group ........................ June 1, 1991
General Counsel and Secretary of FPL .............................. July 1, 1991
K. Michael Davis 49 Controller and Chief Accounting Officer of FPL Group .............. May 13, 1991
Vice President, Accounting, Controller and Chief Accounting
Officer of FPL .................................................. July 1, 1991
Paul J. Evanson 54 President of FPL .................................................. January 9, 1995
Lawrence J. Kelleher 48 Vice President, Human Resources of FPL Group ...................... May 13, 1991
Senior Vice President, Human Resources of FPL ..................... July 1, 1991
Thomas F. Plunkett 56 President, Nuclear Division of FPL ................................ March 1, 1996
Dilek L. Samil 40 Treasurer of FPL Group ............................................ May 13, 1991
Treasurer of FPL .................................................. July 1, 1991
C. O. Woody 57 Senior Vice President, Power Generation of FPL .................... July 1, 1991
Michael W. Yackira 44 Vice President, Finance and Chief Financial Officer of FPL Group .. January 9, 1995
Senior Vice President, Finance and Chief Financial Officer of FPL.. January 9, 1995
(1) Executive officers are elected annually by, and serve at the pleasure of, their respective boards of directors. Except as
noted below, each officer has held his or her present position for five years or more and his or her employment history is
continuous.
(2) The business experience of the executive officers is as follows: Mr. Coyle was general counsel and vice president of FPL
Group from June 1989 to June 1991 and general counsel of FPL from March 1990 to July 1991; Mr. Davis was formerly
comptroller of FPL; Mr. Evanson was vice president, finance and chief financial officer of FPL Group and senior vice
president, finance and chief financial officer of FPL from December 1992 to January 1995. Prior to that, Mr. Evanson was
president and chief operating officer of the Lynch Corporation, a diversified holding company; Mr. Kelleher was vice
president of FPL Group from June 1989 to May 1991 and chief human resources officer of FPL from May 1990 to July
1991; Mr. Plunkett was formerly site vice president at Turkey Point; Ms. Samil was formerly assistant treasurer of FPL
Group and FPL; Mr. Woody was executive vice president of FPL from November 1987 to July 1991; and Mr. Yackira was
vice president of FPL Group from April 1989 to May 1991, senior vice president, market and regulatory services of FPL from
May 1991 to January 1995 and chief planning officer of FPL from May 1990 to May 1991.
</TABLE>
Item 2. Properties
FPL Group and its subsidiaries maintain properties which are adequate
for their operations. The electric generating, transmission,
distribution and general facilities of FPL represent approximately
48%, 13%, 32% and 7%, respectively, of gross investment in electric
utility plant in service.
Generating Facilities. As of December 31, 1995, FPL had the
following generating facilities:
<TABLE>
<CAPTION>
No. of Net Warm Weather
Facility Location Units Fuel Peaking Capability (mw)
<S> <C> <C> <C> <C>
STEAM TURBINES
Cape Canaveral ......................... Cocoa, FL 2 Oil/Gas 810
Cutler ................................. Miami, FL 2 Gas 215
Fort Myers ............................. Fort Myers, FL 2 Oil 538
Manatee ................................ Parrish, FL 2 Oil 1,638
Martin ................................. Indiantown, FL 2 Oil/Gas 1,638
Port Everglades ........................ Port Everglades, FL 4 Oil/Gas 1,237
Riviera ................................ Riviera Beach, FL 2 Oil/Gas 580
St. Johns River Power Park ............. Jacksonville, FL 2 Coal 250(1)
St. Lucie .............................. Hutchinson Island, FL 2 Nuclear 1,553(2)
Sanford ................................ Lake Monroe, FL 3 Oil/Gas 934
Scherer ................................ Monroe County, GA 1 Coal 625(3)
Turkey Point ........................... Florida City, FL 2 Oil/Gas 810
2 Nuclear 1,332
COMBINED CYCLE
Lauderdale ............................. Dania, FL 2 Gas/Oil 860
Martin ................................. Indiantown, FL 2 Gas 860
Putnam ................................. Palatka, FL 2 Gas/Oil 498
COMBUSTION TURBINES
Fort Myers ............................. Fort Myers, FL 12 Oil 624
Lauderdale ............................. Dania, FL 24 Oil/Gas 864
Port Everglades ........................ Port Everglades, FL 12 Oil/Gas 432
DIESEL UNITS
Turkey Point ........................... Florida City, FL 5 Oil 14
TOTAL .................................... 16,312
(1) Represents FPL's 20% individual ownership interest in SJRPP Units Nos. 1 and 2, which are jointly owned with the JEA.
(2) Excludes Orlando Utilities Commission's and the FMPA's combined share of approximately 15% of St. Lucie Unit No. 2.
(3) Represents FPL's approximately 76% ownership of Scherer Unit No. 4, which is jointly owned with the JEA.
</TABLE>
Transmission and Distribution. FPL owns and operates 470 substations
with a total capacity of 102,052,570 kva. Electric transmission and
distribution lines owned and in service as of December 31, 1995 are
as follows:
<TABLE>
<CAPTION>
Overhead Lines Trench and Submarine
Nominal Voltage Pole Miles Cable Miles
<S> <C> <C>
500 kv ............................................................ 1,050(1) -
230 kv ............................................................ 2,476 31
138 kv ............................................................ 1,487 48
115 kv ............................................................ 675 -
69 kv ............................................................ 167 15
Less than 69 kv ................................................... 38,584 18,719
Total ............................................................. 44,439 18,813
(1) Includes approximately 80 miles owned jointly with the JEA.
</TABLE>
Character of Ownership. Substantially all of FPL's properties are
subject to the lien of its mortgage, which secures most debt
securities issued by FPL. The principal properties of FPL are held
by it in fee and are free from other encumbrances, subject to minor
exceptions, none of which is of such a nature as to substantially
impair the usefulness to FPL of such properties. Some of the
electric lines are located on land not owned in fee but are covered
by necessary consents of governmental authorities or rights obtained
from owners of private property.
Item 3. Legal Proceedings
In October 1988, Union Carbide Corporation, the corporate predecessor
of Praxair, Inc. (Praxair), filed suit against FPL and Florida Power
Corporation (Florida Power) in the United States District Court for
the Middle District of Florida. Praxair requested that Florida Power
sell power to its facility located within FPL's service territory,
and that FPL transport (wheel) the power to the facility. Florida
Power and FPL denied the request as being inconsistent with Florida
law and public policy. The FPSC issued a declaratory statement that
FPL's denial of Praxair's request was proper and ordered FPL not to
wheel power under such circumstances. The suit alleged that through
a territorial agreement, FPL and Florida Power have conspired to
eliminate competition for the sale of electric power to retail
customers, thereby unreasonably restraining trade and commerce in
violation of federal antitrust laws as contained in Section 1 of the
Sherman Antitrust Act (Sherman Act). The suit sought treble damages
of an unspecified amount based on alleged higher prices paid for
electricity and product sales lost. At the direction of the 11th
Circuit Court of Appeals, the District Court entered a final judgment
in favor of FPL and Florida Power in January 1996.
In November 1988, TEC Cogeneration, Inc., its affiliate Thermo
Electron Corporation, RRD Corp. and its affiliate Rolls Royce Inc.
filed suit in the United States District Court for the Southern
District of Florida against FPL Group and its subsidiaries, FPL and
ESI, on behalf of South Florida Cogeneration Associates (SFCA), a
joint venture which since 1986 has operated a cogeneration facility
for Metropolitan Dade County within FPL's service territory in Miami,
Florida. The suit alleges that the defendants have engaged in anti-
competitive conduct intended to prevent and defeat competition from
cogenerators within FPL's service territory, and from SFCA's
Metropolitan Dade County facility in particular. It alleges that the
defendants' actions constitute monopolization and attempts to
monopolize in violation of Section 2 of the Sherman Act; conspiracy
in restraint of trade in violation of Section 1 of the Sherman Act;
unlawful discrimination in prices, services or facilities in
violation of Section 2 of the Clayton Act; and intentional
interference with SFCA's contractual relationship with Metropolitan
Dade County in violation of Florida law. The suit sought damages in
excess of $100 million, before trebling under antitrust law, plus
other unspecified compensatory and punitive damages. In March 1996,
the 11th Circuit Court of Appeals reversed the District Court and
granted FPL Group's, FPL's and ESI's motions for partial summary
judgment on the anti-trust claims and remanded the case to the
District Court for further proceedings on the remaining issues. In
February 1996, all parties to this litigation and certain other
persons entered into an agreement that would completely settle all
disputes among the parties as part of a buy-out of an uneconomic
power purchase agreement that FPL was required to enter into because
of PURPA. All amounts payable by FPL under the settlement agreement
would be recovered through either the capacity clause or fuel clause.
The settlement is contingent upon approval by the FPSC.
In December 1991, the FMPA, an association of municipal electric
utilities operating in the state, filed a suit against FPL in the
Circuit Court of the Ninth Judicial Circuit in Orange County,
Florida. The suit was subsequently removed to the United States
District Court for the Middle District of Florida. The FMPA alleges
that FPL is in breach of a "contract," consisting of several
different documents, by refusing to provide transmission service to
the FMPA and its members on the FMPA's terms. The FMPA also alleges
that FPL has violated federal and Florida antitrust laws by
monopolizing or attempting to monopolize the provision, coordination
and transmission of electric power in FPL's area of operation by
refusing to provide transmission service or to permit the FMPA to
invest in and use FPL's transmission system on the FMPA's terms. The
FMPA seeks $140 million in damages, before trebling for the antitrust
claim, and asks the court to require FPL: to transmit electric power
among the FMPA and its members on "reasonable terms and conditions";
to permit the FMPA to contribute to and use FPL's transmission system
on "reasonable terms and conditions"; and to recognize the FMPA
transmission investments as part of FPL's transmission system such
that the FMPA can obtain transmission on a basis equivalent to FPL
or, alternatively, to provide transmission service equivalent to such
FMPA transmission ownership. In 1993, a district court granted
summary judgment in favor of FPL. In 1995, the court of appeals
vacated the district court's summary judgment and remanded the matter
to the district court for further proceedings.
In November 1989, Johnson Enterprises of Jacksonville, Inc. (Johnson
Enterprises) filed suit in the United States District Court for the
Middle District of Florida against FPL Group, FPL Group Capital and
Telesat, a subsidiary of FPL Group Capital. The suit alleged breach
of contract, fraud, violation of racketeering statutes and several
other claims. Plaintiff claimed more than $24 million in
compensatory damages, treble damages under racketeering statutes,
punitive damages and attorneys' fees. 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.
In the event that FPL Group or FPL does not prevail in these suits,
there may be a material adverse effect on their financial position or
results of operations. However, 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.
Item 4. Submission of Matters to a Vote of Security Holders
None<PAGE>
PART II
Item 5. Market for the Registrants' Common Equity and Related
Stockholder Matters
Common Stock Data. All of FPL's common stock is owned by FPL Group.
FPL Group's common stock is traded on the New York Stock Exchange.
The high and low sales prices for the common stock of FPL Group as
reported in the consolidated transaction reporting system of the New
York Stock Exchange for each quarter during the past two years are as
follows:
<TABLE>
<CAPTION>
Quarter 1995 1994
High Low High Low
<S> <C> <C> <C> <C>
First ....................................................... $37 1/4 $34 $39 1/8 $32 3/8
Second ...................................................... $39 1/4 $36 1/8 $35 3/4 $26 7/8
Third ....................................................... $41 1/8 $37 $32 1/2 $29 7/8
Fourth ...................................................... $46 1/2 $40 1/4 $35 3/4 $31
</TABLE>
Approximate Number of Stockholders. As of the close of business on
February 29, 1996, there were 72,822 holders of record of FPL Group's
common stock.
Dividends. Quarterly dividends have been paid on common stock of
FPL Group during the past two years in the following amounts:
<TABLE>
<CAPTION>
Quarter 1995 1994
<S> <C> <C>
First ......................................................................................... $.44 $.62
Second ........................................................................................ $.44 $.42
Third ......................................................................................... $.44 $.42
Fourth ........................................................................................ $.44 $.42
</TABLE>
The amount and timing of dividends payable on common stock are within
the sole discretion of FPL Group's board of directors. In May 1994,
FPL Group's board of directors reduced the dividend paid on the
common stock from $.62 to $.42 per share, reflecting the board of
directors' conclusion that it was inappropriate, in view of
increasing competition and other changes occurring in the electric
utility industry, to continue FPL Group's past practice of paying out
a high percentage of its earnings as dividends. The board of
directors reviews the dividend rate at least annually (in February)
to determine its appropriateness in light of FPL Group's financial
position and results of operations, conditions in the electric
utility industry and other factors. The ability of FPL Group to pay
dividends on its common stock is dependent upon dividends paid to it
by its subsidiaries, primarily FPL. There are no restrictions in
effect that currently limit FPL's ability to pay dividends to FPL
Group. See Management's Discussion - Liquidity and Capital Resources
and Note 6 regarding dividends paid by FPL to FPL Group.
Item 6. Selected Financial Data
Certain amounts included in prior years' selected financial data were
reclassified to conform to current year's presentation.
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993 1992 1991
(Thousands of Dollars, except per share amounts)
<S> <C> <C> <C> <C> <C>
SELECTED FINANCIAL DATA OF FPL GROUP:
Operating revenues .............. $ 5,592,485 $ 5,422,659 $ 5,311,685 $ 5,186,325 $ 5,238,368
Income from continuing operations $ 553,311 $ 518,711 $ 428,749(1) $ 466,949 $ 376,148(1)
Net income ...................... $ 553,311 $ 518,711 $ 428,749(1) $ 466,949 $ 240,578(1)(2)
Earnings per share of
common stock:
Continuing operations ....... $ 3.16 $ 2.91 $ 2.30(1) $ 2.65 $ 2.31(1)
Net income .................. $ 3.16 $ 2.91 $ 2.30(1) $ 2.65 $ 1.48(1)(2)
Dividends paid per share of
common stock .................. $ 1.76 $ 1.88 $ 2.47 $ 2.43 $ 2.39
Total assets .................... $12,459,226 $12,617,616 $13,078,012 $12,306,305 $11,281,785
Long-term debt, excluding
current maturities ............ $ 3,376,613 $ 3,864,465 $ 3,748,983 $ 3,960,096 $ 3,668,139
Obligations of FPL under capital
lease, excluding current
maturities .................... $ 179,082 $ 185,647 $ 271,498 $ 324,198 $ 279,657
Preferred Stock of FPL with
sinking fund requirements, ex-
cluding current maturities..... $ 50,000 $ 94,000 $ 97,000 $ 130,150 $ 150,150
SELECTED FINANCIAL DATA OF FPL:
Operating revenues .............. $ 5,530,057 $ 5,342,656 $ 5,224,299 $ 5,100,463 $ 5,158,766
Net income available to FPL Group $ 567,972 $ 528,515 $ 425,297(1) $ 470,899 $ 376,261(1)
Total assets .................... $11,751,259 $11,821,452 $11,911,342 $11,348,626 $10,515,808
Long-term debt, excluding
current maturities............. $ 3,094,050 $ 3,581,157 $ 3,463,065 $ 3,404,404 $ 3,186,828
SELECTED OPERATING STATISTICS OF FPL:
Energy sales (millions of kwh) .. 79,756 77,096 72,455 69,290 68,712
Energy sales:
Residential ................... 50.8% 50.2% 50.2% 49.3% 50.4%
Commercial .................... 38.5 38.8 39.3 39.0 39.6
Industrial .................... 4.9 5.0 5.4 5.9 5.9
Interchange power sales ....... 1.6 2.5 2.6 2.4 1.6
Other(3) ...................... 4.2 3.5 2.5 3.4 2.5
Total ........................... 100.0% 100.0% 100.0% 100.0% 100.0%
Approximate 60-minute
net peak served (mw):
Summer season ............... 15,813 15,179 15,266 14,661 14,123
Winter season(4) ............ 18,096 16,563 12,594 12,964 13,319
Average number of customer accounts:
Residential ................... 3,097,194 3,037,628 2,973,688 2,911,812 2,863,203
Commercial .................... 374,012 366,415 358,378 350,271 343,837
Industrial .................... 15,143 15,587 14,853 14,791 15,350
Other ......................... 2,462 2,562 3,261 4,376 4,079
Total ........................... 3,488,811 3,422,192 3,350,180 3,281,250 3,226,469
Average price per kwh
sold (cents)(5) ............... 6.83 6.82 7.10 7.25 7.39
(1) Reduced by $85 million, or $.45 per share, after-tax effect of cost reduction program charge in 1993 and $56 million, or
$.34
per share, after-tax effect of restructuring charge in 1991.
(2) Reflects the disposition of a subsidiary accounted for as discontinued operations.
(3) Includes unbilled sales.
(4) The winter season generally represents November and December of the current year and January through March of the
following year. The winter peak of 18,096 occurred on February 5, 1996.
(5) Includes unbilled and cost recovery clause revenues.
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
FPL's operations represent the predominant share of FPL Group's
operating revenues, expenses and net income. For each of the years
1995, 1994 and 1993, FPL's revenues have increased and its O&M
expenses have decreased. The revenue growth resulted from an
increase in customers as well as more extreme weather patterns. The
declining O&M expenses, in large part, reflect management's efforts
to increase the efficiency of FPL's operations. Since 1990, FPL has
reduced its workforce by approximately 8,500 positions or 38%. In
addition to reducing O&M expenses, FPL has initiated several measures
to lower the investment in nuclear plant and regulatory assets
through significantly higher depreciation and amortization expense.
Both the cost control and depreciation actions have been directed
toward improving FPL's cost structure; these efforts are expected to
continue.
FPL's retail activities comprise approximately 97% of FPL Group's
operating revenues and are regulated by the FPSC. FPL reported a
retail regulatory ROE of 12.3%, 12.3% and 9.8% in 1995, 1994 and
1993, respectively. The ROE in 1993 was adversely affected by the
cost reduction program charge. See Note 11. The ROE range
authorized by the FPSC for these periods was 11% to 13% with a
midpoint of 12%.
Operating revenues primarily consist of revenues from base rates,
cost recovery clauses and franchise fees. Revenues from base rates
were $3.4 billion, $3.2 billion and $3.0 billion in 1995, 1994 and
1993, respectively. There were no changes in base rates during those
years. Revenues from cost recovery clauses (including fuel) and
franchise fees represent a pass-through of costs and do not
significantly affect net income. Fluctuations in these revenues are
primarily driven by changes in energy sales and fuel prices.
Retail customer growth was 1.9%, 2.1% and 2.1% in 1995, 1994 and
1993, respectively. Customer growth, together with abnormal weather
conditions, increased total energy sales 3.5%, 6.4% and 4.6% in 1995,
1994 and 1993, respectively.
O&M expenses reflect lower employee-related costs and the effects of
nuclear refueling outages. During 1994, FPL incurred costs relating
to four planned nuclear refueling outages while 1995 and 1993 each
had two. Two nuclear refueling outages are planned for 1996.
Partially offsetting cost decreases in 1994, and to a lesser extent
in 1995, were charges associated with facilities consolidation and
inventory reductions, as well as costs relating to growth in customer
base and placement of additional generating units in service. O&M
expenses for 1995 also included costs associated with workforce
reductions following operational reviews at several business units.
Unlike the distinct company-wide restructuring and cost reduction
programs implemented in 1991 and 1993, management expects operational
reviews to be an ongoing process, targeting productivity enhancements
and enabling business units to respond to a changing business
environment. In 1993, FPL recorded a pretax cost reduction program
charge of $138 million, primarily consisting of severance pay and
retirement benefits resulting from elimination of approximately 1,700
positions.
The increase in depreciation expense in 1995 is primarily due to
interim approval by the FPSC of FPL's request for special
amortization of its nuclear units. The proposal calls for a
continuing amount of $30 million per year plus an additional amount
for 1995 and 1996 based on the level of sales. In granting interim
approval, the FPSC specified that amounts recorded as expense prior
to final approval would remain expense items regardless of their
final classification. This special amortization amounted to $126
million in 1995. FPL also sought and received approval to amortize,
over a period not to exceed five years, plant-related regulatory
assets deferred since FPL's last rate case in 1984. About a third of
this amount, or $37 million, was amortized in 1995. Additionally,
the fourth quarter included a provision to increase the annual
accrual for nuclear decommissioning costs to $85 million, up from $38
million recorded in 1994 and in 1993. The increase is the result of
the FPSC's review and approval of FPL's decommissioning studies filed
in late 1994 and reflects changes in cost, inflation and fund
earnings assumptions and a provision for temporary storage of spent
fuel pending removal to a U.S. Government site. Nuclear
decommissioning accruals are expected to remain at $85 million per
year at least until the next decommissioning studies, currently
scheduled for 2000. The increase in depreciation expense in 1994 was
due to an increase in depreciation rates for generating units, as
well as the accelerated write-off of plant overhaul costs from prior
years, consistent with FPSC orders.
In recent years, FPL Group's subsidiaries have refinanced
substantially all of their existing debt with lower interest rate
instruments. In addition, efforts continued to reduce the overall
level of debt and preferred stock which led to a decline in interest
charges. Preferred stock dividend requirements increased in 1995 due
to the inclusion of premiums on preferred stock redemptions. The
completion of FPL's generation expansion project has resulted in a
significant decline in AFUDC, the primary component of the
non-operating line other - net. AFUDC declined over $40 million
between 1993 and 1994 and in excess of $10 million in 1995. In 1994,
FPL Group adopted a new accounting rule for Employee Stock Ownership
Plans (ESOP). The net effect of adopting this new rule was to reduce
other - net for 1994 by approximately $34 million as a result of the
elimination in consolidation of interest income on the ESOP loan held
by FPL Group Capital. Also, ESOP shares held in trust of 10.0
million in 1995 and 10.6 million in 1994 were not considered
outstanding for earnings per share purposes. These shares will be
considered outstanding when they are allocated to employee accounts
over the program life, currently estimated to be 14 years.
Liquidity and Capital Resources
FPL Group's primary capital requirements consist of expenditures to
meet increased electricity usage and customer growth of FPL. FPL's
capital expenditures for the period 1996 through 1998 are expected to
be approximately $1.5 billion, including $511 million for 1996. See
Note 10 - Commitments. FPL's capital expenditures have declined
significantly over the past few years as a result of continuing
efforts to reduce costs and the completion of its generation
expansion plan. No new generating plants are expected to be
constructed before 2004.
Debt maturities and minimum sinking fund requirements of FPL Group's
subsidiaries will require cash outflows of approximately $911 million
($753 million for FPL) through 2000, including $212 million ($204
million for FPL) in 1996. See Notes 7 and 8. It is anticipated that
cash requirements for construction expenditures and debt repayments
in 1996 will be satisfied with internally generated funds.
Internally generated funds not required for construction expenditures
and current maturities may be used to reduce outstanding debt,
preferred stock or common stock. Any temporary cash needs will be
met by the issuance of commercial paper. Bank lines of credit
currently available to FPL Group and its subsidiaries aggregate $1.3
billion.
In addition to approximately $380 million net retirement of debt and
preferred stock of FPL during 1995, FPL Group repurchased 1.9 million
shares of common stock. Since May 1994, FPL Group has repurchased
5.9 million shares. The board of directors has authorized FPL Group
to purchase up to 10 million shares through 1997.
FPL self-insures for damage to certain transmission and distribution
properties and maintains a funded storm reserve to guard against
storm losses. The balance of the storm fund reserve at December 31,
1995 was $177 million. Bank lines of credit of $300 million,
included in the $1.3 billion above, are also available if needed to
provide cash for storm restoration costs. The FPSC has indicated
that it would consider future storm losses in excess of the funded
reserve for possible recovery from customers. In 1995, the FPSC
approved FPL's request to contribute to the storm fund reserve
insurance recoveries relating to Hurricane Andrew and the March 1993
storm that were not required for identified system repairs. Based on
recoveries through year end, the reserve was increased by $55
million. The FPSC also approved FPL's request to increase in 1995
the annual accrual for the funded reserve from $10 million to $20
million. These contributions, combined with the increase in nuclear
decommissioning costs, resulted in higher cash outflows from
investing activities.
FPL Group continues to dispose of certain non-FPL properties that are
not part of the core business. These dispositions had little effect
on earnings but have contributed to cash flows. Dispositions of
remaining properties are not expected to significantly affect future
operating results. FPL Group's 1994 cash flows from investing
activities were favorably affected by liquidation of its
participation in a limited partnership.
In 1996, the Financial Accounting Standards Board issued an exposure
draft on accounting for certain liabilities related to closure or
removal of long-lived assets. The primary effect of this exposure
draft would be to change the way FPL accounts for nuclear
decommissioning and fossil dismantlement costs. The exposure draft
calls for recording the present value of estimated future cash flows
to decommission FPL's nuclear power plants and dismantle its fossil
plants as an increase to plant balances and as a liability. This
amount is currently estimated to be $1.4 billion. It is anticipated
that there will be no effect on cash flows and, because of the
regulatory treatment, there will be no significant effect on net
income.
FPL Group Capital and its subsidiaries, primarily ESI, have
guaranteed up to approximately $94 million of lease obligations, debt
service payments and other payments subject to certain contingencies.
FPL's charter and mortgage contain provisions which, under certain
conditions, restrict the payment of dividends and the issuance of
additional unsecured debt, first mortgage bonds and preferred stock.
Given FPL's current financial condition and level of earnings,
expected financing activities and dividends are not affected by these
limitations.<PAGE>
Item 8. Financial Statements and Supplementary Data
INDEPENDENT AUDITORS' REPORT
FPL GROUP, INC. AND FLORIDA POWER & LIGHT COMPANY:
We have audited the consolidated financial statements of FPL Group,
Inc. and of Florida Power & Light Company, listed in the accompanying
index at Item 14(a)1 of this Annual Report (Form 10-K) to the
Securities and Exchange Commission for the year ended December 31,
1995. These financial statements are the responsibility of the
companies' management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of FPL
Group, Inc. and Florida Power & Light Company at December 31, 1995
and 1994 and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Certified Public Accountants
Miami, Florida
February 9, 1996<PAGE>
FPL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
OPERATING REVENUES ..................................................... $5,592,485 $5,422,659 $5,311,685
OPERATING EXPENSES:
Fuel, purchased power and interchange ................................ 1,721,730 1,715,345 1,758,298
Other operations and maintenance ..................................... 1,206,444 1,304,046 1,321,540
Depreciation and amortization ........................................ 917,936 723,856 598,389
Cost reduction program charge ........................................ - - 138,000
Taxes other than income taxes ........................................ 549,269 530,970 526,109
Total operating expenses ........................................... 4,395,379 4,274,217 4,342,336
OPERATING INCOME ....................................................... 1,197,106 1,148,442 969,349
OTHER INCOME (DEDUCTIONS):
Interest charges ..................................................... (290,669) (318,967) (367,097)
Dividend requirements on preferred stock of FPL ...................... (43,402) (39,558) (42,663)
Other - net .......................................................... 18,870 36,076 119,659
Total other deductions - net ....................................... (315,201) (322,449) (290,101)
INCOME BEFORE INCOME TAXES ............................................. 881,905 825,993 679,248
INCOME TAXES ........................................................... 328,594 307,282 250,499
NET INCOME ............................................................. $ 553,311 $ 518,711 $ 428,749
Earnings per share of common stock ..................................... $3.16 $2.91 $2.30
Dividends per share of common stock .................................... $1.76 $1.88 $2.47
Average number of common shares outstanding ............................ 175,335 178,009 186,777
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.<PAGE>
FPL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Thousands of dollars)
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant - at original cost ........................................... $16,034,653 $15,660,302
Nuclear fuel under capital lease .................................................... 179,100 185,694
Construction work in progress ....................................................... 317,739 292,645
Other property ...................................................................... 193,739 250,892
Less accumulated depreciation and amortization ...................................... 6,873,250 6,186,699
Total property, plant and equipment - net ......................................... 9,851,981 10,202,834
CURRENT ASSETS:
Cash and cash equivalents ........................................................... 46,177 85,750
Customer receivables, net of allowances of $11,929 and $11,792 ...................... 482,326 464,709
Materials, supplies and fossil fuel stock - at average cost ......................... 247,323 309,308
Deferred clause expenses ............................................................ 81,451 61
Other ............................................................................... 128,071 89,819
Total current assets .............................................................. 985,348 949,647
OTHER ASSETS:
Special use funds of FPL ............................................................ 646,846 435,117
Other investments ................................................................... 447,006 489,268
Unamortized debt reacquisition costs of FPL ......................................... 294,844 292,119
Other ............................................................................... 233,201 248,631
Total other assets ................................................................ 1,621,897 1,465,135
TOTAL ASSETS .......................................................................... $12,459,226 $12,617,616
CAPITALIZATION:
Common shareholders' equity ......................................................... $ 4,392,509 $ 4,197,235
Preferred stock of FPL without sinking fund requirements ............................ 289,580 451,250
Preferred stock of FPL with sinking fund requirements ............................... 50,000 94,000
Long-term debt ...................................................................... 3,376,613 3,864,465
Total capitalization .............................................................. 8,108,702 8,606,950
CURRENT LIABILITIES:
Commercial paper .................................................................... 178,500 34,979
Current maturities of long-term debt and preferred stock ............................ 211,902 87,113
Accounts payable .................................................................... 305,126 311,256
Customers' deposits ................................................................. 235,048 220,787
Accrued interest and taxes .......................................................... 219,935 199,817
Deferred clause revenues ............................................................ 78,809 45,866
Other ............................................................................... 274,823 261,830
Total current liabilities ......................................................... 1,504,143 1,161,648
OTHER LIABILITIES AND DEFERRED CREDITS:
Accumulated deferred income taxes ................................................... 1,587,449 1,625,481
Deferred regulatory credit - income taxes ........................................... 144,351 195,906
Unamortized investment tax credits .................................................. 281,966 302,797
Other ............................................................................... 832,615 724,834
Total other liabilities and deferred credits ...................................... 2,846,381 2,849,018
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES .................................................. $12,459,226 $12,617,616
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.<PAGE>
FPL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ....................................................... $ 553,311 $ 518,711 $ 428,749
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization ................................ 917,936 723,856 598,389
Increase (decrease) in deferred income taxes and
related regulatory credit .................................. (89,587) 92,774 10,225
Cost recovery clauses (1) .................................... (48,447) (82,142) 138,949
Decrease in materials, supplies and fossil fuel stock ........ 61,985 20,291 52,481
Other - net .................................................. 114,946 108,463 40,791
Net cash provided by operating activities ...................... 1,510,144 1,381,953 1,269,584
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2) ......................................... (670,808) (758,690) (1,095,502)
Proceeds from properties held for sale ........................... 70,227 123,012 87,427
Other - net....................................................... (101,048) 61,744 (125,367)
Net cash used in investing activities .......................... (701,629) (573,934) (1,133,442)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of first mortgage bonds and other long-term debt ........ 177,512 172,850 2,208,882
Issuance of preferred stock ...................................... - - 190,000
Retirement of long-term debt and preferred stock ................. (574,343) (470,720) (2,648,170)
Issuance of common stock ......................................... - 16,685 276,287
Repurchase of common stock ....................................... (69,394) (123,733) -
Dividends on common stock ........................................ (308,582) (334,751) (461,639)
Increase (decrease) in short- and long-term commercial paper ..... (56,479) (114,621) 349,600
Other - net....................................................... (16,802) (19,993) 22,756
Net cash used in financing activities .......................... (848,088) (874,283) (62,284)
Net increase (decrease) in cash and cash equivalents ............... (39,573) (66,264) 73,858
Cash and cash equivalents at beginning of year ..................... 85,750 152,014 78,156
Cash and cash equivalents at end of year ........................... $ 46,177 $ 85,750 $ 152,014
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest ........................................... $ 275,542 $ 295,992 $ 333,584
Cash paid for income taxes ....................................... $ 390,800 $ 239,050 $ 150,227
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Additions to capital lease obligations ........................... $ 84,276 $ 63,479 $ 57,579
(1) Represents the effect on cash flows from operating activities of the net amounts deferred or recovered under the fuel and
purchased power, oil-backout, energy conservation, capacity and environmental cost recovery clauses.
(2) Excludes allowance for equity funds used during construction.
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.<PAGE>
FLORIDA POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Thousands of Dollars)
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
OPERATING REVENUES ...................................................... $5,530,057 $5,342,656 $5,224,299
OPERATING EXPENSES:
Fuel, purchased power and interchange ................................. 1,721,730 1,715,345 1,758,298
Other operations and maintenance ...................................... 1,138,347 1,230,171 1,251,284
Depreciation and amortization ......................................... 909,357 713,352 586,543
Income taxes .......................................................... 347,341 322,435 243,022
Cost reduction program charge ......................................... - - 138,000
Taxes other than income taxes ......................................... 547,976 529,301 523,724
Total operating expenses ............................................ 4,664,751 4,510,604 4,500,871
OPERATING INCOME ........................................................ 865,306 832,052 723,428
OTHER INCOME (DEDUCTIONS):
Interest charges ...................................................... (269,952) (292,347) (327,085)
Other - net ........................................................... 16,020 28,368 71,617
Total other deductions - net ........................................ (253,932) (263,979) (255,468)
NET INCOME .............................................................. 611,374 568,073 467,960
DIVIDEND REQUIREMENTS ON PREFERRED STOCK ................................ 43,402 39,558 42,663
NET INCOME AVAILABLE TO FPL GROUP, INC. ................................. $ 567,972 $ 528,515 $ 425,297
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.<PAGE>
FLORIDA POWER & LIGHT COMPANY
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
ELECTRIC UTILITY PLANT:
At original cost ................................................................... $16,034,653 $15,660,302
Less accumulated depreciation ...................................................... (6,832,201) (6,132,488)
Net .............................................................................. 9,202,452 9,527,814
Construction work in progress ...................................................... 317,739 292,645
Nuclear fuel under capital lease ................................................... 179,100 185,694
Electric utility plant - net ................................................... 9,699,291 10,006,153
CURRENT ASSETS:
Cash and cash equivalents .......................................................... 412 535
Customer receivables, net of allowances of $11,737 and $11,518 ..................... 479,838 458,047
Materials, supplies and fossil fuel stock - at average cost ........................ 230,553 292,601
Deferred clause expenses ........................................................... 81,451 61
Other .............................................................................. 98,963 81,229
Total current assets ........................................................... 891,217 832,473
OTHER ASSETS:
Special use funds .................................................................. 646,846 435,117
Unamortized debt reacquisition costs ............................................... 294,844 292,119
Other .............................................................................. 219,061 255,590
Total other assets ............................................................. 1,160,751 982,826
TOTAL ASSETS ......................................................................... $11,751,259 $11,821,452
CAPITALIZATION:
Common shareholder's equity ........................................................ $ 4,473,708 $ 4,185,586
Preferred stock without sinking fund requirements .................................. 289,580 451,250
Preferred stock with sinking fund requirements ..................................... 50,000 94,000
Long-term debt ..................................................................... 3,094,050 3,581,157
Total capitalization ........................................................... 7,907,338 8,311,993
CURRENT LIABILITIES:
Commercial paper ................................................................... 178,500 25,000
Current maturities of long-term debt and preferred stock ........................... 204,000 86,350
Accounts payable ................................................................... 299,987 306,616
Customers' deposits ................................................................ 234,858 220,504
Accrued interest and taxes ......................................................... 210,559 187,678
Deferred clause revenues ........................................................... 78,809 45,866
Other .............................................................................. 254,239 232,763
Total current liabilities ...................................................... 1,460,952 1,104,777
OTHER LIABILITIES AND DEFERRED CREDITS:
Accumulated deferred income taxes .................................................. 1,204,315 1,259,822
Deferred regulatory credit - income taxes .......................................... 144,351 195,906
Unamortized investment tax credits ................................................. 281,966 302,797
Other .............................................................................. 752,337 646,157
Total other liabilities and deferred credits ................................... 2,382,969 2,404,682
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES ................................................. $11,751,259 $11,821,452
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.<PAGE>
FLORIDA POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ....................................................... $ 611,374 $ 568,073 $ 467,960
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ................................ 909,357 713,352 586,543
Decrease in deferred income taxes and related
regulatory credit .......................................... (107,063) (21,405) (12,482)
Cost recovery clauses (1) .................................... (48,447) (82,142) 138,949
Decrease in materials, supplies and fossil fuel stock ........ 61,985 20,291 52,481
Other - net .................................................. 94,348 88,584 10,403
Net cash provided by operating activities ...................... 1,521,554 1,286,753 1,243,854
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2) ......................................... (660,818) (745,500) (1,077,590)
Other - net ...................................................... (73,049) (29,394) (15,727)
Net cash used in investing activities .......................... (733,867) (774,894) (1,093,317)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of first mortgage bonds and other long-term debt ........ 170,452 172,850 2,082,993
Issuance of preferred stock ...................................... - - 190,000
Increase (decrease) in short- and long-term commercial paper ..... (81,500) (124,600) 349,600
Capital contributions from FPL Group, Inc. ....................... 280,000 205,000 255,000
Retirement of long-term debt and preferred stock ................. (573,580) (181,989) (2,518,571)
Dividends ........................................................ (596,954) (567,012) (515,280)
Other - net ...................................................... 13,772 (22,889) 10,035
Net cash used in financing activities .......................... (787,810) (518,640) (146,223)
Net increase (decrease) in cash and cash equivalents ............... (123) (6,781) 4,314
Cash and cash equivalents at beginning of year ..................... 535 7,316 3,002
Cash and cash equivalents at end of year ........................... $ 412 $ 535 $ 7,316
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest ........................................... $ 252,459 $ 264,097 $ 293,337
Cash paid for income taxes ....................................... $ 478,708 $ 369,720 $ 260,920
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Additions to capital lease obligations ........................... $ 84,276 $ 63,479 $ 57,579
(1) Represents the effect on cash flows from operating activities of the net amounts deferred or recovered under the fuel and
purchased power, oil-backout, energy conservation, capacity and environmental cost recovery clauses.
(2) Excludes allowance for equity funds used during construction.
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
<PAGE>
FPL GROUP, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1995, 1994 and 1993
1. Summary of Significant Accounting and Reporting Policies
Basis of Presentation - Essentially all of FPL Group Inc.'s (FPL
Group) revenues are derived from Florida Power & Light Company (FPL)
which supplies electric service to 3.5 million customer accounts
throughout most of the east and lower west coasts of Florida. Other
operations mainly consist of investments in non-utility energy
projects and agricultural operations.
The consolidated financial statements of FPL Group and FPL include
the accounts of FPL Group and its subsidiaries and of FPL and its
subsidiaries, respectively. All significant intercompany balances
and transactions have been eliminated in consolidation. The
preparation of financial statements requires the use of estimates and
assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
Certain amounts included in prior years' consolidated financial
statements have been reclassified to conform to the current year's
presentation.
Regulation - FPL is a utility subject to regulation by the Florida
Public Service Commission (FPSC) and the Federal Energy Regulatory
Commission (FERC). As a result of such regulation, FPL follows the
accounting practices set forth in Statement of Financial Accounting
Standard (SFAS) No. 71, "Accounting for the Effects of Certain Types
of Regulation." SFAS 71 indicates that regulators can create assets
and impose liabilities that would not be recorded by non-regulated
entities. Recoverability of these assets is assessed at each
reporting period. The principal assets recorded under SFAS 71, which
aggregated $369 million at December 31, 1995, are unamortized debt
reacquisition costs and plant-related deferred costs and are included
in the other assets section of the consolidated balance sheets. In
1995, FPL began amortizing the plant-related deferred costs over a
period of no more than five years as approved by the FPSC.
Approximately $37 million, or one-third of the balance, was amortized
in 1995. The principal SFAS 71-related liabilities, which aggregated
$604 million at December 31, 1995, are deferred regulatory
credit - income taxes, unamortized investment tax credits and a storm
and property insurance reserve and are included in the other
liabilities and deferred credits section of the consolidated balance
sheets. Other accounting practices followed by FPL that differ from
non-regulated entities are outlined below, including deferral of
clause under or over recoveries, nuclear amortization and
decommissioning and allowance for funds used during construction.
Revenues and Rates - FPL's retail and wholesale utility rate
schedules are approved by the FPSC and the FERC, respectively. FPL
records the estimated amount of base revenues for energy delivered to
customers but not billed. Such unbilled revenues are included in
customer receivables and amounted to approximately $155 million and
$117 million at December 31, 1995 and 1994, respectively.
Revenues include amounts resulting from cost recovery clauses, which
are designed to permit full recovery of certain costs and provide a
return on certain assets utilized by these programs, and franchise
fees. Such revenues represent a pass-through of costs and include
substantially all fuel, purchased power and interchange expenses,
conservation- and environmental-related expenses, certain revenue
taxes and franchise fees. Revenues from cost recovery clauses are
recorded when billed; FPL achieves matching of costs and related
revenues by deferring the net under or over recovery. Any under
recovered costs or over recovered revenues are collected from or
returned to customers in subsequent periods.
Electric Utility Plant, Depreciation and Amortization - The cost of
additions to units of utility property is added to electric utility
plant. The cost of units of utility property retired, less net
salvage, is charged to accumulated depreciation. Maintenance and
repairs of property as well as replacements and renewals of items
determined to be less than units of utility property are charged to
other operations and maintenance expense. At December 31, 1995, the
generating, transmission, distribution and general facilities of FPL
represented approximately 48%, 13%, 32% and 7%, respectively, of
FPL's gross investment in electric utility plant in service.
Substantially all electric utility plant is subject to the lien of a
mortgage securing FPL's first mortgage bonds.
Depreciation of utility property is primarily provided on a
straight-line average remaining life basis and includes a provision
for dismantlement. For substantially all utility property,
depreciation and fossil fuel plant dismantlement studies are
performed at least every four years. The most recent depreciation
studies were filed with and approved by the FPSC in 1994. Fossil
fuel plant dismantlement studies were filed in 1994 and approved by
the FPSC in 1995. The FPSC approved, on an interim basis,
accelerated amortization of FPL's nuclear units of $30 million per
year plus an additional amount based on the level of sales achieved
for 1995 and 1996. The weighted annual composite depreciation rate
was approximately 4.0% for 1995 and 1994 and 3.9% for 1993. The 1995
rate excludes $163 million of special nuclear amortization and
amortization of the plant-related deferred costs. The 1994 rate
excludes $47 million of accelerated write-off of certain accumulated
plant overhaul costs.
Nuclear fuel costs, including a charge for spent nuclear fuel
disposal, is accrued in fuel expense on a unit of production method.
Allowance for Funds Used During Construction (AFUDC) - FPL recognizes
AFUDC as a noncash item representing the allowed cost of capital
including a return on common equity used to finance a portion of
FPL's construction work in progress. AFUDC is capitalized as an
additional cost of utility plant and is recorded as an addition to
income. The capitalization rate used in computing AFUDC was 8.26% in
1995 and 1994 and an average rate of approximately 8.47% for 1993.
AFUDC amounted to $15 million, $24 million and $66 million for the
years ended December 31, 1995, 1994 and 1993, respectively, and is
included in other - net in the consolidated statements of income.
Nuclear Decommissioning - FPL accrues nuclear decommissioning costs
over the expected service life of each unit. Nuclear decommissioning
studies are performed at least every five years for FPL's four
nuclear units and are submitted to the FPSC for approval. The most
recent studies were filed in December 1994 and approved in 1995.
These studies assume prompt dismantlement for the Turkey Point Unit
Nos. 3 and 4 with decommissioning activities commencing in 2012 and
2013, respectively. St. Lucie Unit No. 1 will be mothballed in 2016
until St. Lucie Unit No. 2 is ready for decommissioning in 2023.
These studies also assume that FPL will be storing spent fuel on site
pending removal to a U.S. Government facility. Decommissioning
expense accruals, included in depreciation and amortization expense
in the consolidated statements of income, were $85 million for 1995
and $38 million for each of the years 1994 and 1993. FPL's portion
of the ultimate cost of decommissioning its four units, including
dismantlement and reclamation, expressed in 1995 dollars, is
currently estimated to aggregate $1.4 billion. At December 31, 1995
and 1994, the accumulated provision for nuclear decommissioning
totaled $666 million and $500 million, respectively, and is included
in accumulated depreciation.
Restricted assets for the payment of future expenditures to
decommission FPL's nuclear units are included in special use funds of
FPL in the consolidated balance sheets. At December 31, 1995 and
1994, decommissioning fund assets were $534 million and $373 million,
respectively. Securities held in the decommissioning fund are
carried at market value with market adjustments resulting in a
corresponding adjustment to the accumulated provision for nuclear
decommissioning. See Note 9. Contributions to the funds are based
on current period decommissioning expense. Additionally, fund
earnings, net of taxes are reinvested in the funds. The effects of
amounts not yet recognized for tax purposes are included in
accumulated deferred income taxes.
In 1996, the Financial Accounting Standards Board issued an exposure
draft, "Accounting for Certain Liabilities Related to Closure or
Removal of Long-Lived Assets." The primary effect of this exposure
draft would be to change the way FPL accounts for nuclear
decommissioning and fossil dismantlement costs. The exposure draft
calls for recording the present value of estimated future cash flows
to decommission FPL's nuclear power plants and dismantle its fossil
plants as an increase to plant balances and as a liability. This
amount is currently estimated to be $1.4 billion. It is anticipated
that there will be no effect on cash flows and, because of the
regulatory treatment, there will be no significant effect on net
income.
Storm and Property Insurance Reserve Fund - A storm and property
insurance reserve fund (storm fund) provides coverage toward storm
damage costs and possible retrospective premium assessments stemming
from a nuclear incident under the various insurance programs covering
FPL's nuclear generating plants. The storm fund, which totaled $113
million and $62 million at December 31, 1995 and 1994, respectively,
is included in special use funds of FPL in the consolidated balance
sheets. Securities held in the fund are carried at market value with
market adjustments resulting in a corresponding adjustment to the
storm and property insurance reserve. See Note 9.
Other Investments - Included in other investments in FPL Group's
consolidated balance sheets are non-majority owned interests in
partnerships and joint ventures, essentially all of which are
accounted for under the equity method. Additionally, other
investments include FPL Group's participation in leveraged leases of
$158 million at December 31, 1995 and 1994.
Cash Equivalents - Cash equivalents consist of short-term, highly
liquid investments with original maturities of three months or less.
Commercial Paper - The year end weighted-average interest rate on
commercial paper at December 31, 1995 and 1994 was 5.8% and 5.9%,
respectively.
Retirement of Long-Term Debt - The excess of FPL's reacquisition cost
over the book value of long-term debt is deferred and amortized to
expense ratably over the remaining life of the original issue, which
is consistent with its treatment in the ratemaking process. FPL
Group Capital Inc (FPL Group Capital) expenses this cost in the
period incurred.
Income Taxes - Deferred income taxes are provided on all significant
temporary differences between the financial statement and tax bases
of assets and liabilities. FPL is included in the consolidated
federal income tax return filed by FPL Group. FPL determines its
income tax provision on the "separate return method." The deferred
regulatory credit - income taxes of FPL represents the revenue
equivalent of the difference in accumulated deferred income taxes
computed under SFAS 109, "Accounting for Income Taxes" as compared to
prior accounting rules. This amount is being amortized in accordance
with the regulatory treatment over the estimated lives of the assets
or liabilities which resulted in the initial recognition of the
deferred tax amount. Investment tax credits for FPL are deferred and
amortized to income over the approximate lives of the related
property in accordance with the regulatory treatment.
2. Income Taxes
The components of income taxes are as follows:
<TABLE>
<CAPTION>
FPL Group FPL
Years Ended December 31, Years Ended December 31,
1995 1994 1993 1995 1994 1993
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
Federal:
Current ............................... $380,792 $203,407 $205,233 $395,480 $314,956 $238,208
Deferred .............................. (78,467) 83,135 28,207 (84,630) (22,125) (12,571)
Investment tax credits - net .......... (20,957) (21,205) (21,994) (20,832) (20,994) (21,646)
Total federal ..................... 281,368 265,337 211,446 290,018 271,837 203,991
State:
Current ............................... 58,426 32,020 33,324 64,427 46,152 41,780
Deferred .............................. (11,200) 9,925 5,729 (7,104) 4,446 (2,749)
Total state ....................... 47,226 41,945 39,053 57,323 50,598 39,031
Income taxes charged to operations - FPL. 347,341 322,435 243,022
Credited to other income
(deductions) - FPL .................... (5,047) (3,026) (3,132)
Total income taxes ...................... $328,594 $307,282 $250,499 $342,294 $319,409 $239,890
</TABLE>
A reconciliation between income tax expense and the income tax
expense calculated at the applicable statutory rates is as follows:
<TABLE>
<CAPTION>
FPL Group FPL
Years Ended December 31, Years Ended December 31,
1995 1994 1993 1995 1994 1993
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
Computed at statutory federal income
tax rate .............................. $308,667 $289,098 $237,737 $333,784 $310,619 $247,747
Increases (reductions) resulting from:
State income taxes - net of federal
income tax benefit .................. 30,697 27,264 24,530 37,076 32,996 25,461
Amortization of investment tax credits. (20,957) (21,205) (21,491) (20,832) (20,994) (21,143)
Allowance for equity funds used
during construction ................. (3,134) (5,081) (14,177) (3,134) (5,081) (14,177)
Dividend requirements on preferred
stock of FPL ........................ 15,191 13,854 14,932 - - -
Other - net ........................... (1,870) 3,352 8,968 (4,600) 1,869 2,002
Total income taxes ...................... $328,594 $307,282 $250,499 $342,294 $319,409 $239,890
</TABLE>
The income tax effects of temporary differences giving rise to
consolidated deferred income tax liabilities and assets are as follows:
<TABLE>
<CAPTION>
FPL Group FPL
December 31, December 31,
1995 1994 1995 1994
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Deferred tax liabilities:
Property-related ................................... $1,704,643 $1,715,349 $1,670,242 $1,675,774
Investment-related ................................. 371,298 385,592 - -
Unamortized debt reacquisition costs and other ..... 222,279 171,258 145,180 114,497
Total deferred tax liabilities ................... 2,298,220 2,272,199 1,815,422 1,790,271
Deferred tax assets and valuation allowance:
Asset writedowns and capital loss carryforward ..... 263,149 254,303 - -
Unamortized investment tax credits and deferred
regulatory credit - income taxes ................. 164,451 192,375 164,451 192,375
Storm and decommissioning reserves ................. 200,890 147,269 200,890 147,269
Other .............................................. 289,885 258,309 245,766 190,805
Valuation allowance ................................ (207,604) (205,538) - -
Net deferred tax assets .......................... 710,771 646,718 611,107 530,449
Accumulated deferred income taxes .................... $1,587,449 $1,625,481 $1,204,315 $1,259,822
</TABLE>
The valuation allowance in 1995 and 1994 offsets a related amount of
deferred tax assets recorded pursuant to SFAS 109. The primary
component of the valuation allowance relates to capital loss
carryforwards from the disposition of an FPL Group Capital subsidiary in
a prior year. The amount of the deductible loss from this disposition was
limited by Internal Revenue Service rules which are being challenged by
FPL Group. FPL Group is unable to predict the outcome of this
challenge.
3. Leases
FPL leases nuclear fuel for all four of its nuclear units. Nuclear fuel
lease payments, which are based on energy production and are charged
to fuel expense, were $104 million, $115 million and $122 million for the
years ended December 31, 1995, 1994 and 1993, respectively. Included
in these payments was an interest component of $11 million for each of
the years 1995, 1994 and 1993. Under certain circumstances of lease
termination, FPL is required to purchase all nuclear fuel in whatever form
at a purchase price designed to allow the lessor to recover its net
investment cost in the fuel, which totaled $179 million at December 31,
1995. For ratemaking, these leases are classified as operating leases.
For financial reporting, the capital lease obligation is recorded at the
amount due in the event of lease termination.
FPL Group, through its subsidiaries, leases automotive, computer, office
and other equipment through rental agreements with various terms and
expiration dates. Rental expense totaled $17 million, $26 million and
$33 million for 1995, 1994 and 1993, respectively. Minimum annual
rental commitments for noncancelable operating leases are not material.
4. Jointly-Owned Electric Utility Plant
FPL owns approximately 85% of the St. Lucie Nuclear Unit No. 2, 20%
of the St. Johns River Power Park (SJRPP) units and coal terminal and
approximately 76% of Scherer Unit No. 4. At December 31, 1995, FPL's
gross investment in these units was $1.169 billion, $329 million and
$569 million, respectively; accumulated depreciation was $576 million,
$132 million and $119 million, respectively.
FPL is responsible for its share of the operating costs, as well as
providing its own financing. At December 31, 1995, there was no
significant balance of construction work in progress on these facilities.
5. Employee Retirement Benefits
Pension Benefits - Substantially all employees of FPL Group and its
subsidiaries are covered by a noncontributory defined benefit pension
plan. Plan benefits are generally based on employees' years of service
and compensation during the last years of employment. Participants are
vested after five years of service. All costs of the FPL Group pension
plan are allocated to participating subsidiaries on a pro rata basis.
For 1995, 1994 and 1993 the components of pension cost are as
follows:
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
(Thousands of Dollars)
<S> <C> <C> <C>
Service cost .............................................................. $ 31,782 $ 37,423 $ 36,105
Interest cost on projected benefit obligation ............................. 87,871 80,466 78,797
Actual return on plan assets .............................................. (350,237) (11,293) (236,565)
Net amortization and deferral ............................................. 211,523 (118,770) 106,894
Negative pension cost ..................................................... (19,061) (12,174) (14,769)
Effect of special retirement programs ..................................... 5,338 - 34,463
FPL Group's pension cost .................................................. $ (13,723) $ (12,174) $ 19,694
Pension costs allocated to FPL ............................................ $ (13,432) $ (11,966) $ 19,871
</TABLE>
FPL Group and its subsidiaries fund the pension cost calculated under
the entry age normal level percentage of pay actuarial cost method,
provided that this amount satisfies the minimum funding standards of the
Employee Retirement Income Security Act of 1974, as amended, and is
not greater than the maximum tax deductible amount for the year. No
contributions to the plan were required for 1995, 1994 or 1993.
A reconciliation of the funded status of the plan to the amounts
recognized in FPL Group's consolidated balance sheets is presented
below:
<TABLE>
<CAPTION>
December 31,
1995 1994
(Thousands of Dollars)
<S> <C> <C>
Plan assets at fair value, primarily listed stocks and bonds .......................... $1,910,986 $1,620,978
Actuarial present value of benefits for services rendered to date:
Accumulated benefits based on salaries to date, including vested benefits
of $924 million and $683 million .................................................. 982,159 734,759
Additional benefits based on estimated future salary levels ......................... 447,120 326,356
Projected benefit obligation .......................................................... 1,429,279 1,061,115
Plan assets in excess of projected benefit obligation ................................. 481,707 559,863
Prior service costs not recognized in net periodic pension cost ....................... 187,463 200,185
Unrecognized net asset at January 1, 1986, being amortized primarily
over 19 years - net of accumulated amortization ..................................... (210,203) (233,558)
Unrecognized net gain ................................................................. (430,307) (511,553)
Prepaid pension cost of FPL Group ..................................................... $ 28,660 $ 14,937
Prepaid pension cost allocated to FPL ................................................. $ 25,069 $ 11,637
</TABLE>
The weighted-average discount rate used in determining the actuarial
present value of the projected benefit obligation was 6.75% and 7.75%
for 1995 and 1994, respectively. The assumed rate of increase in future
compensation levels was 5.5% for both years. The expected long-term
rate of return on plan assets used in determining pension cost was
7.75% for 1995, 1994 and 1993.
Other Postretirement Benefits - FPL Group and its subsidiaries have
defined benefit postretirement plans for health care and life insurance
benefits that cover substantially all employees. All costs of the FPL
Group plans are allocated to participating subsidiaries on a pro rata
basis. Eligibility for health care benefits is based upon age plus years of
service at retirement. The plans are contributory and contain
cost-sharing features such as deductibles and coinsurance. FPL Group
has capped company contributions for postretirement health care at a
defined level which, depending on actual claims experience, may be
reached by the year 2004. Generally, life insurance benefits for retirees
are capped at $50,000. FPL Group's policy is to fund postretirement
benefits in amounts determined at the discretion of management.
In 1993, FPL Group and FPL adopted SFAS 106, "Employers'
Accounting for Postretirement Benefits Other than Pensions." For 1995,
1994 and 1993, the components of net periodic postretirement benefit
cost are as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
(Thousands of Dollars)
<S> <C> <C> <C>
Service cost ....................................................................... $ 4,216 $ 4,717 $ 5,233
Interest cost ...................................................................... 18,119 17,336 14,633
Actual return on plan assets ....................................................... (23,742) (749) (8,130)
Amortization of transition obligation .............................................. 3,485 3,485 4,064
Net amortization and deferral ...................................................... 16,479 (6,156) -
Net periodic postretirement benefit cost ........................................... 18,557 18,633 15,800
Effect of cost reduction program (see Note 11)...................................... - - 29,008
FPL Group's postretirement benefit cost ............................................ $ 18,557 $18,633 $44,808
Postretirement benefit costs allocated to FPL ...................................... $ 18,326 $18,436 $44,487
</TABLE>
A reconciliation of the funded status of the plan to the amounts
recognized in FPL Group's consolidated balance sheets is presented
below:
<TABLE>
<CAPTION>
December 31,
1995 1994
(Thousands of Dollars)
<S> <C> <C>
Plan assets at fair value, primarily listed stocks and bonds ......................... $ 110,435 $ 99,178
Accumulated postretirement benefit obligation:
Retirees ........................................................................... 172,572 166,215
Fully eligible active plan participants ............................................ 3,194 1,946
Other active plan participants ..................................................... 94,128 74,577
Total ............................................................................ 269,894 242,738
Accumulated postretirement benefit obligation in excess of plan assets ............... (159,459) (143,560)
Unrecognized net transition obligation (amortized over 20 years) ..................... 59,247 62,732
Unrecognized net loss ................................................................ 18,269 17,387
Accrued postretirement benefit liability of FPL Group ................................ $ (81,943) $ (63,441)
Accrued postretirement benefit liability allocated to FPL ............................ $ (81,194) $ (62,923)
</TABLE>
The weighted-average annual assumed rate of increase in the per capita
cost of covered benefits (i.e., health care cost trend rate) for 1995 is
8.5% for retirees under age 65 and 7.5% for retirees over age 65.
These rates are assumed to decrease gradually to 5.0% by the year
2003. The cap on FPL Group's contributions mitigates the potential
significant increase in costs resulting from an increase in the health care
cost trend rate. Increasing the assumed health care cost trend rate by
one percentage point would increase the plan's accumulated
postretirement benefit obligation as of December 31, 1995 by $8 million,
and the aggregate of the service and interest cost components of net
periodic postretirement benefit cost of the plan for 1995 by approximately
$1 million.
The weighted-average discount rate used in determining the
accumulated postretirement benefit obligation was 6.75% and 7.75% for
1995 and 1994, respectively. The expected long-term rate of return on
plan assets used in determining postretirement benefit cost was 7.75%
for 1995, 1994 and 1993.
6. Common Shareholders' Equity
FPL Group - The changes in FPL Group's common shareholders' equity
accounts are as follows:
<TABLE>
<CAPTION>
Common Stock (1) Additional Common
Aggregate Paid-In Unearned Retained Shareholders'
Shares Par Value Capital Compensation Earnings Equity
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1992 .... 182,788 $1,828 $3,312,903 $(336,355) $ 857,613
Net income ................... - - - - 428,749
Issuance of common stock ..... 7,277 73 278,123 - -
Dividends on common stock .... - - - - (461,639)
Earned compensation and tax
benefits on ESOP dividends.. - - - 15,234 5,110
Other ........................ - - (1,032) - -
Balances, December 31, 1993 .... 190,065 1,901 3,589,994 (321,121) 829,833
Net income ................... - - - - 518,711
Issuance of common stock ..... 506 5 16,680 - -
Repurchase of common stock ... (4,000) (40) (123,693) - -
Dividends on common stock .... - - - - (334,751)
Earned compensation under ESOP - - 1,964 16,900 -
Other ........................ - - 852 - -
Balances, December 31, 1994 .... 186,571(2) 1,866 3,485,797 (304,221) 1,013,793 $4,197,235
Net income ................... - - - - 553,311
Repurchase of common stock ... (1,878) (19) (69,375) - -
Dividends on common stock .... - - - - (308,582)
Earned compensation under ESOP - - 5,030 16,741 -
Other ........................ - - (1,832) - -
Balances, December 31, 1995 .... 184,693(2) $1,847 $3,419,620 $(287,480) $1,258,522 $4,392,509
(1) $.01 par value, authorized - 300,000,000 shares; outstanding 184,692,985 and 186,570,549 at December 31, 1995 and
1994, respectively.
(2) Outstanding and unallocated shares held by the ESOP Trust totaled 9.8 million and 10.4 million at December 31, 1995 and
1994. Unallocated shares are excluded from average shares outstanding in the earnings per share computation beginning in
1994.
</TABLE>
Common Stock Dividend Restrictions - FPL Group's charter does not
limit the dividends that may be paid on its common stock. As a practical
matter, the ability of FPL Group to pay dividends on its common stock is
dependent upon dividends paid to it by its subsidiaries, primarily FPL.
FPL's charter and a mortgage securing FPL's first mortgage bonds
contain provisions that, under certain conditions, restrict the payment of
dividends and other distributions to FPL Group. These restrictions do
not currently limit FPL's ability to pay dividends to FPL Group. In 1995,
1994 and 1993 FPL paid, as dividends to FPL Group, its net income
available to FPL Group on a one-month lag basis.
Employee Stock Ownership Plan - The employee thrift plans of FPL
Group include a leveraged Employee Stock Ownership Plan (ESOP)
feature. Shares of common stock held by the Trust for the thrift plans
(Trust) are used to provide all or a portion of the employers' matching
contributions. Dividends received on all shares, along with cash
contributions from the employers, are used to pay principal and interest
on the ESOP loan held by FPL Group Capital. Dividends on shares
allocated to employee accounts and used by the Trust for debt service
are replaced with an equivalent amount of shares of common stock at
prevailing market prices.
In 1994, FPL Group adopted American Institute of Certified Public
Accountants Statement of Position (SOP) 93-6, "Employers' Accounting
for Employee Stock Ownership Plans." Under the new accounting rules,
unallocated shares held by the Trust were removed from the earnings
per share computation until allocated to employee accounts over the
next 14 years. Additionally, compensation expense totaling
approximately $18 million in 1995 and 1994 is now measured at the fair
value of shares allocated to employee accounts during the period and
interest income on the ESOP loan is eliminated in consolidation. The
net effect of adopting SOP 93-6 was to reduce net income for 1994 by
approximately $21 million and increase earnings per share by $.05.
ESOP-related unearned compensation included as a reduction of
shareholders' equity at December 31, 1995 was approximately $284
million, representing 9.8 million unallocated shares at the original issue
price of $29 per share. The fair value of the unearned compensation
account using the closing price of FPL Group stock as of December 31,
1995 was approximately $454 million.
Long-Term Incentive Plan - In 1994, FPL Group's board of directors and
its shareholders approved a new long-term incentive plan which replaced
the prior long-term incentive plan. Under the new plan, 9 million shares
of common stock are reserved and available for awards to officers and
employees of FPL Group and its subsidiaries as of December 31, 1995.
No further awards will be made under the prior plan. Total
compensation charged against earnings under the incentive plan, and
the effect on earnings per share, were not material in any year. The
changes in share awards under the incentive plan are as follows:
<TABLE>
<CAPTION>
Performance Restricted Non-qualified
Shares Stock Option Shares
<S> <C> <C> <C>
Balances, December 31, 1992 ....................................... 291,445 177,296 85,406
Granted ......................................................... 89,827 - -
Exercised at $30 7/8 ............................................ - - (35,045)
Paid/released ................................................... (87,169) (6,903) -
Forfeited ....................................................... (14,044) (4,070) (285)
Balances, December 31, 1993 ....................................... 280,059 166,323 50,076
Granted ......................................................... 102,720 29,000 -
Exercised at $30 7/8 ............................................ - - (8,941)
Paid/released ................................................... - (6,223) -
Forfeited ....................................................... (5,589) (1,350) (2,748)
Balances, December 31, 1994 ....................................... 377,190 187,750 38,387
Granted ......................................................... 97,786 13,500 -
Exercised at $30 7/8 ............................................ - - (23,136)
Paid/released ................................................... (123,328) (3,000) -
Forfeited ....................................................... (31,312) (4,050) (4,066)
Balances, December 31, 1995 ....................................... 320,336(1) 194,200(2) 11,185(3)
(1) Payment of performance shares is based on the market price of FPL Group's common stock when the related performance
goal is achieved.
(2) Shares of restricted stock were issued at market value at the date of the grant.
(3) All outstanding options are exercisable at $30 7/8 and expire in mid-1996.
</TABLE>
In conjunction with the options referred to above, stock appreciation
rights have been granted in an equivalent amount. No awards of
incentive stock options had been granted as of December 31, 1995.
Other - Each share of common stock has been granted a Preferred Share
Purchase Right (Right), which is exercisable in the event of certain
attempted business combinations. The Rights will cause substantial
dilution to a person or group attempting to acquire FPL Group on
terms not approved by FPL Group's board of directors.
FPL - The changes in FPL's common shareholder's equity accounts are
as follows:
<TABLE>
<CAPTION>
Common Additional Retained Common Share-
Stock (1) Paid-in Capital Earnings holder's Equity
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Balances, December 31, 1992 ......................... $1,373,069 $1,487,467 $ 917,945
Contributions from FPL Group ...................... - 255,000 -
Net income available to FPL Group ................. - - 425,297
Dividends to FPL Group ............................ - - (472,617)
Preferred stock issuance costs and other .......... - (1,031) (5,705)
Balances, December 31, 1993 ......................... 1,373,069 1,741,436 864,920
Contributions from FPL Group ...................... - 205,000 -
Net income available to FPL Group ................. - - 528,515
Dividends to FPL Group ............................ - - (527,454)
Other ............................................. - 100 -
Balances, December 31, 1994 ......................... 1,373,069 1,946,536 865,981 $4,185,586
Contributions from FPL Group ...................... - 280,000 -
Net income available to FPL Group ................. - - 567,972
Dividends to FPL Group ............................ - - (557,923)
Other ............................................. - 2,057 (3,984)
Balances, December 31, 1995 ......................... $1,373,069 $2,228,593 $ 872,046 $4,473,708
(1) Common stock, no par value, 1,000 shares authorized, issued and outstanding.
</TABLE>
7. Preferred Stock
FPL Group's charter authorizes the issuance of 100 million shares of
serial preferred stock, $.01 par value. None of these shares is
outstanding. Preferred stock of FPL consists of the following: (1)
<TABLE>
<CAPTION>
December 31, 1995
Shares Redemption December 31,
Outstanding Price 1995 1994
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Cumulative, No Par Value, authorized 10,000,000 shares at
December 31, 1995 and 1994; without sinking fund
requirements - $2.00 No Par Value, Series A (Involuntary
Liquidation Value $25 Per Share) (2) ........................ 2,533,188 $ 27.00 $ 63,330 $125,000
Cumulative, $100 Par Value, authorized 15,822,500 shares at
December 31, 1995 and 1994:
Without sinking fund requirements:
4 1/2% Series ........................................... 100,000 101.00 10,000 10,000
4 1/2% Series A ......................................... 50,000 101.00 5,000 5,000
4 1/2% Series B ......................................... 50,000 101.00 5,000 5,000
4 1/2% Series C ......................................... 62,500 103.00 6,250 6,250
4.32% Series D .......................................... 50,000 103.50 5,000 5,000
4.35% Series E .......................................... 50,000 102.00 5,000 5,000
7.28% Series F .......................................... 600,000 102.93 60,000 60,000
7.40% Series G .......................................... 400,000 102.53 40,000 40,000
6.98% Series S .......................................... 750,000 -(3) 75,000 75,000
7.05% Series T .......................................... 500,000 -(3) 50,000 50,000
6.75% Series U .......................................... 650,000 -(3) 65,000 65,000
Total preferred stock of FPL without sinking
fund requirements ................................... 5,795,688 389,580 451,250
Less current maturities ........................... 1,000,000 100,000 -
Total preferred stock of FPL without sinking fund
requirements, excluding current maturities .......... 4,795,688 $289,580 $451,250
With sinking fund requirements (4):
6.84% Series Q (5) ...................................... 440,000 $102.74 $ 44,000 $ 44,000
8.625% Series R (6) ..................................... 100,000 105.18 10,000 50,000
Total preferred stock of FPL with sinking
fund requirements ................................... 540,000 54,000 94,000
Less current maturities ........................... 40,000 4,000 -
Total preferred stock of FPL with sinking fund
requirements, excluding current maturities .......... 500,000 $ 50,000 $ 94,000
(1) FPL's charter authorizes the issuance of 5 million shares of subordinated preferred stock, no par value. None of these
shares is outstanding. There were no issuances of preferred stock in 1995 and 1994. In 1993, FPL issued 1,900,000
shares of $100 par value preferred stock without sinking fund requirements. In December 1995, FPL called for redemption,
in January 1996, 600,000 shares of its 7.28% Preferred Stock, Series F, $100 Par Value and 400,000 shares of its 7.40%
Preferred Stock, Series G, $100 Par Value. In 1993, FPL redeemed and retired 160,000 shares of $100 par value preferred
stock without sinking fund requirements and 167,660 shares of $100 par value preferred stock with sinking fund
requirements.
(2) In 1995, 2,466,812 shares were tendered, accepted for exchange and retired by FPL pursuant to its offer to exchange each
such share for $25 in principal amount of 8.75% Quarterly Income Debt Securities (Subordinated Deferrable Interest
Debentures).
(3) Not redeemable prior to 2003.
(4) Minimum annual sinking fund requirements on preferred stock are $4 million for each of the years 1996, 1997, 1998 and
1999 and approximately $2 million in 2000. In the event that FPL should be in arrears on its sinking fund obligations, FPL
may not pay dividends on common stock.
(5) Entitled to a sinking fund to retire a minimum of 15,000 shares and a maximum of 30,000 shares annually from 1996
through 2026 at $100 per share plus accrued dividends. FPL redeemed and retired 45,000 shares in 1994, satisfying the
1994 and 1995 minimum annual sinking fund requirement.
(6) Entitled to a sinking fund to retire a minimum of 25,000 shares and a maximum of 50,000 shares annually from 1996
through 2015 at $100 per share plus accrued dividends. FPL redeemed and retired 400,000 shares in 1995.
/TABLE
<PAGE>
8. Long-Term Debt (1)(2)
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31,
1995 1994
(Thousands of Dollars)
<S> <C> <C>
FPL
First mortgage bonds:
Maturing through 2000 - 4 5/8% to 9 5/8% .......................................... $ 355,000 $ 460,697
Maturing 2001 through 2015 - 6 5/8% to 7 7/8% ..................................... 661,838 700,000
Maturing 2016 through 2026 - 7% to 9 3/8% ......................................... 1,024,702 1,126,223
Medium-term notes:
Maturing through 2000 - 4.85% to 6.20% .......................................... 280,300 280,300
Maturing 2001 through 2015 - 5.79% to 8.95% ..................................... 106,500 155,000
Maturing 2016 through 2022 - 8% to 9.05% ........................................ 98,610 148,700
Pollution control and industrial development series -
Maturing 2019 through 2027 - 6.7% to 7.5% ....................................... 150,135 260,705
Pollution control, solid waste disposal and industrial development revenue
bonds - Maturing 2021 through 2029 - variable, 4.3% and 3%
average annual interest rate, respectively ...................................... 483,735 373,165
Installment purchase and security contracts - maturing 2007 - 5.9% .................. 2,000 2,000
Quarterly Income Debt Securities (Subordinated Deferrable Interest
Debentures) - maturing 2025 - 8.75% ............................................... 61,670 -
Commercial paper - 4.4% average annual interest rate ................................ - 200,000
Unamortized discount - net .......................................................... (30,440) (39,283)
Total long-term debt of FPL ....................................................... 3,194,050 3,667,507
Less current maturities ......................................................... 100,000 86,350
Long-term debt of FPL, excluding current maturities ............................. 3,094,050 3,581,157
FPL Group Capital
Debentures:
Maturing 1997 - 6 1/2% ............................................................ 150,000 150,000
Maturing 2013 - 7 5/8% ............................................................ 125,000 125,000
Other long-term debt - 7% to 10% due various dates to 2013 .......................... 17,655 11,320
Unamortized discount ................................................................ (2,190) (2,249)
Total long-term debt of FPL Group Capital ......................................... 290,465 284,071
Less current maturities ......................................................... 7,902 763
Long-term debt of FPL Group Capital, excluding current maturities ............... 282,563 283,308
Total long-term debt .............................................................. $3,376,613 $3,864,465
(1) Minimum annual maturities and sinking fund requirements of long-term debt for 1996-2000 are approximately $108 million,
$150 million, $180 million, $230 million and $125 million, respectively.
(2) Available lines of credit aggregated approximately $1.3 billion at December 31, 1995, all of which were based on firm
commitments.
</TABLE>
9. Financial Instruments
The carrying amounts of cash equivalents and commercial paper
approximate their fair values. Certain investments of FPL Group
included in other investments in the consolidated balance sheets are
carried at estimated fair value which was $84 million and $66 million
at December 31, 1995 and 1994, respectively. The following estimates
of the fair value of financial instruments have been made using
available market information and other valuation methodologies.
However, the use of different market assumptions or methods of
valuation could result in different estimated fair values.
<TABLE>
<CAPTION>
December 31,
1995 1994
Carrying Estimated Carrying Estimated
Amount Fair Value(1) Amount Fair Value(1)
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Preferred stock of FPL with sinking fund requirements (2). $ 54,000 $ 55,520 $ 94,000 $ 92,840
Long-term debt of FPL (2) ................................ $3,194,050 $3,285,925 $3,667,507 $3,452,618
Long-term debt of FPL Group (2) .......................... $3,484,515 $3,588,835 $3,951,578 $3,678,995
(1) Based on quoted market prices for these or similar issues.
(2) Includes current maturities.
</TABLE>
Special Use Funds - Securities held in the special use funds are
carried at estimated fair value. The nuclear decommissioning fund
primarily consists of municipal and corporate debt securities with a
weighted-average maturity of 9 years. The storm fund primarily
consists of municipal debt securities with a weighted-average
maturity of 5 years. The cost of securities sold is determined on
the specific identification method. During 1995, the special use
funds realized gains of $13 million and losses of $4 million. At
December 31, 1995, the funds included unrealized gains of $33 million
and no significant unrealized losses. Realized gains and losses
during 1994 were $6 million and $8 million, respectively. At
December 31, 1994, unrealized gains were $2 million and unrealized
losses were $9 million. The proceeds from the sale of securities in
1995 and 1994 were $950 million and $650 million, respectively. A
shift in the asset mix of the decommissioning fund occurred in 1995
and 1994 due to certain tax law changes.
10. 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 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. FPL
Group Capital and its subsidiaries, primarily ESI Energy, Inc. (ESI),
have guaranteed up to approximately $94 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 December 31,
1995.
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 $177 million at
December 31, 1995, 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 expects to
begin using in 1998, subject to environmental approvals. In no year
are the obligations under the fuel contracts expected to exceed usage
requirements.
The required 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 ...................................................................... $ 80 $ 80 $ 80 $ 80 $ 80
Southern Companies ....................................................... $130 $140 $130 $130 $140
Qualifying facilities .................................................... $300 $320 $330 $340 $350
Minimum payments, at projected prices:
Natural gas .............................................................. $200 $200 $200 $200 $200
Orimulsion ............................................................... - - $120 $140 $140
Coal ..................................................................... $ 50 $ 50 $ 40 $ 40 $ 40
</TABLE>
Capacity, energy and fuel charges under these contracts were as
follows:
<TABLE>
<CAPTION>
1995 Charges 1994 Charges 1993 Charges
Energy/ Energy/ Energy/
Capacity Fuel (1) Capacity Fuel (1) Capacity Fuel (1)
(Millions of Dollars)
<S> <C> <C> <C> <C> <C> <C>
JEA ................................................. $ 83(2) $ 47 $ 82(2) $ 48 $ 85(2) $ 51
Southern Companies .................................. $130(3) $ 94 $186(3) $124 $268(3) $183
Qualifying facilities................................ $158(3) $ 92 $137(3) $ 68 $ 60(3) $ 40
Natural gas ......................................... - $361 - $232 - $270
Coal ................................................ - $ 37 - $ 33 - $ 26
(1) Recovered through the fuel and purchased power cost recovery clause (fuel clause).
(2) Recovered through base rates and the capacity cost recovery clause (capacity clause).
(3) Recovered through the capacity clause.
</TABLE>
Litigation - In 1988, Union Carbide Corporation sued FPL and Florida
Power Corporation (Florida Power) alleging that, through a territorial
agreement approved by the FPSC, they conspired to eliminate
competition in violation of federal antitrust laws. Praxair, Inc., an entity
that was formerly a unit of Union Carbide, has been substituted as the
plaintiff. The suit sought treble damages of an unspecified amount
based on alleged higher prices paid for electricity and for product sales
lost. At the direction of the 11th Circuit Court of Appeals, a final
judgment was entered in favor of FPL and Florida Power in January
1996.
A suit brought by the partners in a cogeneration project located in Dade
County, Florida, alleged that FPL Group, FPL and ESI engaged in
anti-competitive conduct intended to eliminate competition from
cogenerators generally, and from their facility in particular, in violation of
federal antitrust laws and wrongfully interfered with the cogeneration
project's contractual relationship with Metropolitan Dade County. The
suit sought damages in excess of $100 million, before trebling under
antitrust laws, plus other unspecified compensatory and punitive
damages. A motion for summary judgment by FPL Group, FPL and ESI
was denied. FPL Group, FPL and ESI have appealed the denial. In
February 1996, all parties to this litigation and certain other persons
entered into an agreement that would completely settle all disputes
among the parties as part of a buy-out of an uneconomic power
purchase agreement that FPL was required to enter into because of the
Public Utility Regulatory Policies Act of 1978, as amended. All amounts
payable by FPL under the settlement agreement would be recovered
through either the capacity clause or fuel clause. The settlement is
contingent upon approval by the FPSC.
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.
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.
11. Cost Reduction Program Charge
In 1993, FPL implemented a cost reduction program which eliminated
1,700 positions resulting in a $138 million charge, primarily consisting of
severance payments and employee retirement benefits including pension
and postretirement benefits costs. See Note 5.
12. Transactions with Related Parties
FPL provides certain services to and receives services from FPL Group,
or other subsidiaries of FPL Group. The full cost of such services is
charged to the entity benefitting from the service. In addition, certain
common costs of FPL Group are allocated to all subsidiaries, including
FPL, primarily based on each subsidiary's equity. Neither current period
amounts charged or allocated, nor balances outstanding, were material
for any year. See Note 1 - Income Taxes.
13. Summarized Financial Information of FPL Group Capital
(Unaudited)
FPL Group Capital's debentures are guaranteed by FPL Group.
Operating revenues of FPL Group Capital for the three years ended
December 31, 1995, 1994 and 1993 were $62 million, $80 million and
$88 million, respectively. For the same periods, operating expenses
were $77 million, $84 million and $88 million, respectively. Net income
for 1995 was $2 million and for 1994 was $7 million. In 1993, an
extraordinary loss ($13 million, net of income taxes) on the early
extinguishment of debt resulted in a net loss of $8 million.
At December 31, 1995, FPL Group Capital had $89 million of current
assets, $934 million of noncurrent assets, $24 million of current liabilities
and $787 million of noncurrent liabilities. At December 31, 1994, FPL
Group Capital had current assets of $84 million, noncurrent assets of
$1.005 billion, current liabilities of $36 million and noncurrent liabilities of
$714 million.
14. Quarterly Data (Unaudited)
FPL Group's condensed consolidated quarterly financial information for
1995 and 1994 is as follows:
<TABLE>
<CAPTION>
March 31 (1) June 30 (1) September 30 (1) December 31 (1)
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
1995
Operating revenues ................... $ 1,177,366 $ 1,466,724 $ 1,587,037 $ 1,361,358
Operating income ..................... $ 248,797 $ 312,191 $ 447,935 $ 188,183
Net income ........................... $ 99,840 $ 138,302 $ 240,449 $ 74,720
Earnings per share of common stock ... $ 0.57 $ 0.79 $ 1.37 $ 0.43
Dividends per share of common stock .. $ 0.44 $ 0.44 $ 0.44 $ 0.44
High-low trading prices .............. $ 37 1/4 - 34 $39 1/4 - 36 1/8 $ 41 1/8 - 37 $46 1/2 - 40 1/4
1994
Operating revenues ................... $ 1,178,334 $ 1,442,353 $ 1,512,261 $ 1,289,711
Operating income ..................... $ 234,679 $ 288,184 $ 427,486 $ 198,093
Net income ........................... $ 94,439 $ 125,843 $ 222,244 $ 76,185
Earnings per share of common stock ... $ 0.53 $ 0.70 $ 1.25 $ 0.43
Dividends per share of common stock .. $ 0.62 $ 0.42 $ 0.42 $ 0.42
High-low trading prices .............. $39 1/8 - 32 3/8 $35 3/4 - 26 7/8 $32 1/2 - 29 7/8 $ 35 3/4 - 31
(1) In the opinion of FPL Group, all adjustments, which consist of normal recurring accruals necessary to present a fair
statement of such amounts for such periods, have been made. Results of operations for an interim period may not give a
true indication of results for the calendar year. Certain amounts included in previously reported quarterly consolidated
financial statements have been reclassified to conform to the current year's presentation.
</TABLE>
FPL's condensed consolidated quarterly financial information for 1995
and 1994 is as follows:
<TABLE>
<CAPTION>
March 31 (1) June 30 (1) September 30 (1) December 31 (1)
(Thousands of Dollars)
<S> <C> <C> <C> <C>
1995
Operating revenues ............................ $1,156,269 $1,446,203 $1,579,549 $1,348,036
Operating income .............................. $ 185,616 $ 219,554 $ 306,782 $ 153,354
Net income .................................... $ 119,442 $ 153,804 $ 245,747 $ 92,381
Net income available to FPL Group ............. $ 107,289 $ 144,765 $ 236,757 $ 79,161
1994
Operating revenues ............................ $1,155,789 $1,418,573 $1,501,896 $1,266,398
Operating income .............................. $ 171,069 $ 209,817 $ 296,596 $ 154,570
Net income .................................... $ 108,555 $ 142,987 $ 229,546 $ 86,985
Net income available to FPL Group ............. $ 98,625 $ 133,108 $ 219,667 $ 77,115
(1) In the opinion of FPL, all adjustments, which consist of normal recurring accruals necessary to present a fair statement of
such amounts for such periods, have been made. Results of operations for an interim period may not give a true indication
of results for the calendar year.
/TABLE
<PAGE>
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrants
FPL Group - The information required by this Item will be included in
FPL Group's Definitive Proxy Statement which will be filed with the
Securities and Exchange Commission in connection with the 1996 Annual
Meeting of Shareholders (FPL Group's Proxy Statement) and is
incorporated herein by reference, or is included in Item I.
Business - Executive Officers of the Registrants.
FPL DIRECTORS(1)
James L. Broadhead. Mr. Broadhead, 60, is chairman and chief
executive officer of FPL and chairman, president and chief executive
officer of FPL Group. Mr. Broadhead is a former president of the
Telephone Operating Group of GTE Corporation and is also a former
president of St. Joe Minerals Corporation. He is a director of
Barnett Banks, Inc., Delta Air Lines, Inc. and The Pittston Company
and a board fellow of Cornell University. Mr. Broadhead has been a
director of FPL and FPL Group since January 1989.
Dennis P. Coyle. Mr. Coyle, 57, has been general counsel and
secretary of FPL since July 1991 and of FPL Group since June 1991.
From March 1990 to July 1991 he was general counsel of FPL and from
June 1989 to June 1991 he was general counsel and vice president of
FPL Group. Mr. Coyle has been a director of FPL since January 1990.
Paul J. Evanson. Mr. Evanson, 54, became president of FPL in January
1995 after having served as senior vice president, finance and chief
financial officer of FPL and vice president, finance and chief
financial officer of FPL Group since December 1992. Prior to that,
he was president and chief operating officer of the Lynch
Corporation, a diversified holding company. He is a director of
Lynch Corporation and Southern Energy Homes, Inc. Mr. Evanson has
been a director of FPL since December 1992 and a director of FPL
Group since January 1995.
Lawrence J. Kelleher. Mr. Kelleher, 48, is senior vice president,
human resources of FPL and vice president, human resources of FPL
Group. From May 1990 to July 1991 Mr. Kelleher was chief human
resources officer of FPL. From June 1989 to May 1991 Mr. Kelleher
was vice president of FPL Group. Mr. Kelleher has been a director of
FPL since May 1990.
Thomas F. Plunkett. Mr. Plunkett, 56, is president of FPL's nuclear
division. He was formerly site vice president at Turkey Point. Mr.
Plunkett has been a director of FPL since March 1996.
C. O. Woody. Mr. Woody, 57, is senior vice president, power
generation of FPL. From November 1987 to July 1991 he was executive
vice president of FPL. Mr. Woody has been a director of FPL since
December 1989.
Michael W. Yackira. Mr. Yackira, 44, became senior vice president,
finance and chief financial officer of FPL and vice president,
finance and chief financial officer of FPL Group in January 1995 and
was senior vice president, market and regulatory services of FPL from
May 1991 to January 1995. From May 1990 to May 1991 Mr. Yackira was
chief planning officer of FPL. From April 1989 to May 1991 he was
vice president of FPL Group. Mr. Yackira has been a director of FPL
since May 1990.
(1) Directors are elected annually and serve until their
resignation, removal or until their respective
successors are elected. Each director's business
experience during the past five years is noted either
here or in the Executive Officers table in Item 1.
Business - Executive Officers of the Registrants.
Item 11. Executive Compensation
FPL Group - The information required by this Item will be included in
FPL Group's Proxy Statement and is incorporated herein by reference,
provided that the Compensation Committee Report and Performance Graph
which are contained in FPL Group's Proxy Statement shall not be
deemed to be incorporated herein by reference.
FPL - The following table sets forth compensation paid during the
past three years to FPL's chief executive officer and the other four
most highly-compensated persons who served as executive officers of
FPL at December 31, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
Long-Term
Compensation
Payouts
Other Long Term All
Annual Incentive Other
Compen- Plan Compen-
Name and Principal Position Year Salary Bonus sation Payouts(1) sation(2)
<S> <C> <C> <C> <C> <C> <C>
James L. Broadhead (3) 1995 $749,567 $637,000 $30,342 $947,387 $15,901
Chairman of the Board and Chief Executive 1994 692,346 565,500 5,658 780,681 14,131
Officer of FPL and FPL Group, President 1993 666,333 505,747 4,989 609,664 21,583
of FPL Group
Paul J. Evanson 1995 500,000 307,400 3,691 155,513 12,906
President 1994 261,000 130,500 3,254 69,622 10,214
1993 243,600 112,543 16,424 - 9,276
Jerome H. Goldberg 1995 478,700 212,900 18,228 352,401 9,249
President, Nuclear Division 1994 462,500 212,461 8,059 190,059 14,817
1993 445,100 204,468 9,702 148,432 16,532
Dennis P. Coyle 1995 303,849 138,957 3,756 223,724 11,972
General Counsel and Secretary of FPL 1994 280,662 125,344 - 165,351 10,784
and FPL Group 1993 270,135 116,648 - 129,136 14,501
C.O. Woody 1995 283,300 133,400 3,234 207,350 15,539
Senior Vice President, Power Generation 1994 273,700 123,216 1,458 165,288 14,391
1993 261,900 126,039 721 129,078 18,643
(1) Payouts were made in cash (for payment of income taxes) and shares of common stock, valued at the closing price on the
last business day preceding payout.
(2) Represents employer matching contributions to thrift plans and employer contributions for life insurance.
Thrift Match Life Insurance
Mr. Broadhead ....................... $6,195 $9,706
Mr. Evanson ......................... 6,808 6,098
Mr. Goldberg ........................ 6,808 2,441
Mr. Coyle ........................... 6,195 5,777
Mr. Woody ........................... 6,808 8,731
(3) At December 31, 1995, Mr. Broadhead held 96,800 shares of restricted common stock with a value of $4,489,100. These
shares were awarded in 1991 for the purpose of financing Mr. Broadhead's supplemental retirement plan and will offset
lump sum benefits that would otherwise be payable to him in cash upon retirement. See Retirement Plans herein.
Dividends at normal rates are paid on restricted common stock.
</TABLE>
Stock Options - The following table sets forth information with
respect to the only executive officer named in the Summary
Compensation Table who held or exercised any stock options or stock
appreciation rights during 1995.
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money
Shares Options/SARs at 12/31/95 Options/SARs at 12/31/95
Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
C. O. Woody .................. 1,787 $20,327 - - - -
</TABLE>
Long Term Incentive Plan Awards - In 1995, awards of performance
shares under FPL Group's Long Term Incentive Plan were made to the
executive officers named in the Summary Compensation Table as set
forth in the following table.
LONG TERM INCENTIVE PLAN AWARDS
<TABLE>
<CAPTION>
Estimated Future Payouts
Under Non-Stock Price-Based Plans
Number of Shares
Number of Performance Period
Name Shares Until Payout Threshold Target Maximum
<S> <C> <C> <C> <C> <C>
James L. Broadhead ................ 24,909 1/1/95 - 12/31/98 - 24,909 39,854
Paul J. Evanson ................... 9,622 1/1/95 - 12/31/98 - 9,622 15,395
Jerome H. Goldberg ................ 7,896 1/1/95 - 12/31/98 - 7,896 12,634
Dennis P. Coyle ................... 5,508 1/1/95 - 12/31/98 - 5,508 8,813
C. O. Woody ....................... 4,673 1/1/95 - 12/31/98 - 4,673 7,477
</TABLE>
The performance share awards shown above are payable at the end of
the four-year performance period. The amount of the payout is
determined by multiplying the participant's target number of shares
by his average level of attainment, expressed as a percentage, which
may not exceed 160%, of his targeted awards under the Annual
Incentive Plans for each of the years encompassed by the award
period. The incentive performance measures were financial indicators
(weighted 50%) and operating indicators (weighted 50%). The
financial indicators were operations and maintenance costs, capital
expenditure levels, book and regulatory return on equity and net
income. The operating indicators were customer satisfaction survey
results, service reliability as measured by the frequency and
duration of service interruptions, system performance as measured by
availability factors for the fossil and nuclear power plants,
unplanned trips of nuclear power plants, SALP ratings for nuclear
power plants, full-time equivalent workforce, number of significant
environmental violations, employee safety, load management installed
capability and conservation programs' annual installed capacity.
Retirement Plans - FPL Group maintains a non-contributory defined
benefit pension plan and a supplemental executive retirement plan
which covers FPL employees. The following table shows the estimated
annual benefits, calculated on a straight-line annuity basis, payable
upon retirement in 1995 at age 65 after the indicated years of
service.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Eligible Average Years of Service
Annual Compensation 10 20 30 40 50
<S> <C> <C> <C> <C> <C>
$ 500,000 ............................................. $ 99,101 $198,190 $247,291 $260,931 $263,319
600,000 ............................................. 119,101 238,190 297,291 313,431 315,819
700,000 ............................................. 139,101 278,190 347,291 365,931 368,319
800,000 ............................................. 159,101 318,190 397,291 418,431 420,819
900,000 ............................................. 179,101 358,190 447,291 470,931 473,319
1,000,000 ............................................. 199,101 398,190 497,291 523,431 525,819
1,100,000 ............................................. 219,101 438,190 547,291 575,931 578,319
1,200,000 ............................................. 239,101 478,190 597,291 628,431 630,819
1,300,000 ............................................. 259,101 518,190 647,291 680,931 683,319
1,400,000 ............................................. 279,101 558,190 697,291 733,431 735,819
1,500,000 ............................................. 299,101 598,190 747,291 785,931 788,319
1,600,000 ............................................. 319,101 638,190 797,291 838,431 840,819
1,700,000 ............................................. 339,101 678,190 847,291 890,931 893,319
1,800,000 ............................................. 359,101 718,190 897,291 943,431 945,819
</TABLE>
The compensation covered by the plans includes annual salaries and
bonuses of officers of FPL Group and annual salaries of officers of
FPL, as shown in the Summary Compensation Table, but no other amounts
shown in that table. The estimated credited years of service for the
executive officers named in the Summary Compensation Table are: Mr.
Broadhead, 7 years; Mr. Evanson, 3 years; Mr. Goldberg, 6 years; Mr.
Coyle, 6 years; and Mr. Woody, 39 years. Amounts shown in the table
reflect deductions to partially cover employer contributions to
Social Security.
A supplemental retirement plan for Mr. Broadhead provides for a
lump-sum retirement benefit equal to the then present value of a
joint and survivor annuity providing annual payments to him equal to
61% to 65% of his average annual compensation for the three years
prior to his retirement between age 62 (1998) and age 65 (2001) and
to his surviving beneficiary of 37.5% of such average annual
compensation, reduced by the then present value of the annual amount
of payments to which he is entitled under all other pension and
retirement plans of FPL Group and former employers. This benefit is
further reduced by the then value of 96,800 shares of restricted
common stock which vest as to 77,000 shares in 1998 and as to 19,800
shares in 2001. Upon a change of control of FPL Group (as defined
below under Employment Agreements), the restrictions on the
restricted stock lapse and the full retirement benefit becomes
payable. Upon termination of Mr. Broadhead's employment agreement
(also described below) without cause, the restrictions on the
restricted stock lapse and he becomes fully vested under the
supplemental retirement plan. Absent any such change of control or
termination of employment, Mr. Broadhead will have no right to such
shares of restricted stock, and there will be no payments under the
supplemental retirement plan, unless he remains with FPL Group until
at least age 62.
FPL's employment agreement with Mr. Goldberg, who retired March 1,
1996, provides for a retirement benefit which, together with the
amount received by him pursuant to his former employer's deferred
compensation program and retirement plan, equals the total
postretirement benefits he would have received if he had remained
employed by such employer until age 65. A supplemental retirement
plan for Mr. Coyle provides for benefits, upon retirement at age 62
or more, based on two times his credited years of service.
FPL Group sponsors a split-dollar life insurance plan for certain of
FPL and FPL Group's senior officers. Benefits under the split-dollar
plan are provided by universal life insurance policies purchased by
FPL Group. If the officer dies prior to retirement, the officer's
beneficiaries generally receive two and one-half times the officer's
annual salary at the time of death. If the officer dies after
retirement, the officer's beneficiaries receive between 50% to 100%
of the officer's final annual salary. Each officer is taxable on the
insurance carrier's one year term rate for his or her life insurance
coverage.
Employment Agreements - FPL Group has entered into an employment
agreement with Mr. Broadhead for an initial term ending
December 1997, with automatic one-year extensions thereafter unless
either party elects not to extend. The agreement provides for a
minimum base salary of $765,900 per year, subject to increases based
upon corporate and individual performance and increases in
cost-of-living indices, plus annual and long-term incentive
compensation opportunities at least equal to those currently in
effect. If FPL Group terminates Mr. Broadhead's employment without
cause, he is entitled to receive a lump sum payment of two years'
compensation. Compensation is measured by the then current base
salary plus the average of the preceding two years' annual incentive
awards. He would also be entitled to receive all amounts accrued
under all performance share grants in progress, prorated for the year
of termination and assuming achievement of the targeted award, and to
full vesting of his benefits under his supplemental retirement plan.
FPL Group and FPL have entered into employment agreements with
certain officers, including the individuals named in the Summary
Compensation Table (other than Mr. Goldberg), to become effective in
the event of a change of control of FPL Group, which is defined as
the acquisition of beneficial ownership of 20% of the voting power of
FPL Group, certain changes in FPL Group's Board, or approval by the
shareholders of the liquidation of FPL Group or of certain mergers or
consolidations or of certain transfers of FPL Group's assets. These
agreements are intended to assure FPL Group and FPL of the continued
services of key officers. The agreements provide that each officer
shall be employed by FPL Group or one of its subsidiaries in his or
her then current position, with compensation and benefits at least
equal to the then current base and incentive compensation and benefit
levels, for an employment period of four and, in certain cases, five
years after a change in control occurs.
In the event that the officer's employment is terminated (except for
death, disability or cause) or if the officer terminates his or her
employment for good reason, as defined in the agreement, the officer
is entitled to severance benefits in the form of a lump sum payment
equal to the compensation due for the remainder of the employment
period or for two years, whichever is longer. Such benefits would be
based on the officer's then base salary plus an annual bonus at least
equal to the average bonus for the two years preceding the change of
control. The officer is also entitled to the maximum amount payable
under all long-term incentive compensation grants outstanding,
continued coverage under all employee benefit plans, supplemental
retirement benefits and reimbursement for any tax penalties incurred
as a result of the severance payments.
Director Compensation - All of the directors of FPL are salaried
employees of FPL and do not receive any additional compensation for
serving as a director.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
FPL Group - The information required by this Item will be included in
FPL Group's Proxy Statement and is incorporated herein by reference.
FPL - FPL Group owns 100% of FPL's common stock. FPL's directors and
executive officers beneficially own shares of common stock as
follows:
<TABLE>
<CAPTION>
Name Number of Shares (1)
<S> <C>
James L. Broadhead ......................................................................... 151,910(2)
Dennis P. Coyle ............................................................................ 10,683
Paul J. Evanson ............................................................................ 6,162
Jerome H. Goldberg ......................................................................... 10,332
Lawrence J. Kelleher ....................................................................... 19,155
Thomas F. Plunkett ......................................................................... 19,751(3)
C. O. Woody ................................................................................ 21,289
Michael W. Yackira ......................................................................... 11,125
All directors and executive officers as a group ............................................ 261,451(4)
(1) Information is as of March 1, 1996, except for executive officers' holdings under the thrift plans, which are as of
December 31, 1995. Unless otherwise indicated, each person has sole voting and investment power.
(2) Includes 96,800 shares of restricted stock as to which Mr. Broadhead has voting but not investment power.
(3) Includes 15,000 shares of restricted stock as to which Mr. Plunkett has voting but not investment power.
(4) Less than 1% of the common stock outstanding.
</TABLE>
FPL's directors and executive officers are required to file initial
reports of ownership and reports of changes of ownership of common
stock with the Securities and Exchange Commission. Based upon a
review of these filings and written representations from the
directors and executive officers, all required filings were timely
made in 1995 except that Michael W. Yackira, senior vice president,
finance and chief financial officer, reported on an annual statement
of changes in beneficial ownership one transaction that should have
been reported the previous month and Stephen E. Frank, after he
ceased being an officer and director of FPL, made a late filing of
one report relating to one transaction.
Item 13. Certain Relationships and Related Transactions
FPL Group - The information required by this Item will be included in
FPL Group's Proxy Statement and is incorporated herein by reference.
FPL - None
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K
(a) 1. Financial Statements Page(s)
Independent Auditors' Report 14
FPL Group:
Consolidated Statements of Income 15
Consolidated Balance Sheets 16
Consolidated Statements of Cash Flows 17
FPL:
Consolidated Statements of Income 18
Consolidated Balance Sheets 19
Consolidated Statements of Cash Flows 20
Notes to Consolidated Financial Statements 21-34
2. Financial Statement Schedules - Schedules are omitted as
not applicable or not required.
3. Exhibits including those Incorporated by Reference
<TABLE>
<CAPTION>
Exhibit FPL
Number Description Group FPL
<S> <C> <C> <C>
*3(i)a Restated Articles of Incorporation of FPL Group dated December 31, 1984, x
as amended through December 17, 1990 (filed as Exhibit 4(a) to Post-
Effective Amendment No. 5 to Form S-8, File No. 33-18669)
*3(i)b Restated Articles of Incorporation of FPL dated March 23, 1992 (filed as x
Exhibit 3(i)a to Form 10-K for the year ended December 31, 1993, File No.
1-3545)
*3(i)c Amendment to FPL's Restated Articles of Incorporation dated March 23, 1992 x
(filed as Exhibit 3(i)b to Form 10-K for the year ended December 31, 1993,
File No. 1-3545)
*3(i)d Amendment to FPL's Restated Articles of Incorporation dated May 11, 1992 x
(filed as Exhibit 3(i)c to Form 10-K for the year ended December 31, 1993,
File No. 1-3545)
*3(i)e Amendment to FPL's Restated Articles of Incorporation dated March 12, 1993 x
(filed as Exhibit 3(i)d to Form 10-K for the year ended December 31, 1993,
File No. 1-3545)
*3(i)f Amendment to FPL's Restated Articles of Incorporation dated June 16, 1993 x
(filed as Exhibit 3(i)e to Form 10-K for the year ended December 31, 1993,
File No. 1-3545)
*3(i)g Amendment to FPL's Restated Articles of Incorporation dated August 31, 1993 x
(filed as Exhibit 3(i)f to Form 10-K for the year ended December 31, 1993,
File No. 1-3545)
*3(i)h Amendment to FPL's Restated Articles of Incorporation dated November 30, x
1993 (filed as Exhibit 3(i)g to Form 10-K for the year ended December 31,
1993, File No. 1-3545)
*3(ii)a Bylaws of FPL Group dated November 15, 1993 (filed as Exhibit 3(ii) to Form x
10-K for the year ended December 31, 1993, File No. 1-8841)
*3(ii)b Bylaws of FPL dated May 11, 1992 (filed as Exhibit 3 to Form 8-K dated x
May 1, 1992, File No. 1-3545)
*4(a) Rights Agreement, dated as of June 16, 1986, between FPL Group, Inc. and x
the First National Bank of Boston (filed as Exhibit 4(e) to Post-Effective
Amendment No. 5 to Form S-8, File No. 33-18669)
*4(b) Mortgage and Deed of Trust dated as of January 1, 1944, and Ninety-six x x
Supplements thereto between FPL and Bankers Trust Company and The
Florida National Bank of Jacksonville (now First Union National Bank of
Florida), Trustees (as of September 2, 1992, the sole trustee is Bankers
Trust Company) (filed as Exhibit B-3, File No. 2-4845; Exhibit 7(a),
File No. 2-7126; Exhibit 7(a), File No. 2-7523; Exhibit 7(a), File No.
2-7990; Exhibit 7(a), File No. 2-9217; Exhibit 4(a)-5, File No. 2-10093;
Exhibit 4(c), File No. 2-11491; Exhibit 4(b)-1, File No. 2-12900;
Exhibit 4(b)-1, File No. 2-13255; Exhibit 4(b)-1, File No. 2-13705;
Exhibit 4(b)-1, File No. 2-13925; Exhibit 4(b)-1, File No. 2-15088;
Exhibit 4(b)-1, File No. 2-15677; Exhibit 4(b)-1, File No. 2-20501;
Exhibit 4(b)-1, File No. 2-22104; Exhibit 2(c), File No. 2-23142; Exhibit
2(c), File No. 2-24195; Exhibit 4(b)-1, File No. 2-25677; Exhibit 2(c),
File No. 2-27612; Exhibit 2(c), File No. 2-29001; Exhibit 2(c), File
No. 2-30542; Exhibit 2(c), File No. 2-33038; Exhibit 2(c), File No.
2-37679; Exhibit 2(c), File No. 2-39006; Exhibit 2(c), File No. 2-41312;
Exhibit 2(c), File No. 2-44234; Exhibit 2(c), File No. 2-46502; Exhibit
2(c), File No. 2-48679; Exhibit 2(c), File No. 2-49726; Exhibit 2(c),
File No. 2-50712; Exhibit 2(c), File No. 2-52826; Exhibit 2(c), File No.
2-53272; Exhibit 2(c), File No. 2-54242; Exhibit 2(c), File No. 2-56228;
Exhibits 2(c) and 2(d), File No. 2-60413; Exhibits 2(c) and 2(d), File
No. 2-65701; Exhibit 2(c), File No. 2-66524; Exhibit 2(c), File No.
2-67239; Exhibit 4(c), File No. 2-69716; Exhibit 4(c), File No. 2-70767;
Exhibit 4(b), File No. 2-71542; Exhibit 4(b), File No. 2-73799; Exhibits
4(c), 4(d) and 4(e), File No. 2-75762; Exhibit 4(c), File No. 2-77629;
Exhibit 4(c), File No. 2-79557; Exhibit 99(a) to Post-Effective Amendment
No. 5 to Form S-8, File No. 33-18669; Exhibit 99(a) to Post-Effective
Amendment No. 1 to Form S-3, File No. 33-46076); Exhibit 4(b) to Form
10-K for the year ended December 31, 1993, File No. 1-3545; Exhibit
4(i) to Form 10-Q for the quarter ended June 30, 1994, File No. 1-3545;
and Exhibit 4(b) to Form 10-Q for the quarter ended June 30, 1995, File
No. 1-3545)
4(c)(i) Indenture, dated as of November 1, 1995 between Florida Power & Light x x
Company and The Chase Manhattan Bank (National Association), as Trustee
FPL
Group FPL
4(c)(ii) Excerpts from Unanimous Consent of the Finance Committee of the Board of x x
Directors in lieu of meeting, dated July 10, 1995, establishing certain
terms of the 8.75% Quarterly Income Debt Securities (Subordinated
Deferrable Interest Debentures, Due 2025)
4(c)(iii) Officer's Certificate of Florida Power & Light Company, dated November 10, x x
1995, establishing certain terms of the 8.75% Quarterly Income Debt
Securities (Subordinated Deferrable Interest Debentures, Due 2025)
10(a) Supplemental Executive Retirement Plan, amended and restated effective x
January 1, 1994
*10(b) FPL Group Amended and Restated Supplemental Executive Retirement Plan for x
James L. Broadhead effective January 1, 1990 (filed as Exhibit 99(d) to
Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669)
*10(c) FPL Group Long-Term Incentive Plan of 1985, as amended (filed as Exhibit x
99(h) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669)
*10(d) Long-Term Incentive Plan 1994 (filed as Exhibit 4(d) to Form S-8, File x
No. 33-57673)
*10(e) Annual Incentive Plan dated as of March 31, 1994 (filed as Exhibit 10(k) x
to Form 10-Q for the quarter ended March 31, 1994, File No. 1-8841)
10(f) FPL Group Deferred Compensation Plan, amended and restated effective x
January 1, 1995
10(g) FPL Group Executive Long Term Disability Plan effective January 1, 1995 x
*10(h) Employment Agreement between FPL Group and James L. Broadhead dated as of x
December 13, 1993 (filed as Exhibit 10(j) to Form 10-K for the year ended
December 31, 1993, File No. 1-8841)
10(i) Employment Agreement between FPL Group and James L. Broadhead dated as of x
December 11, 1995
10(j) Employment Agreement between FPL Group and Dennis P. Coyle dated as of x
December 11, 1995
10(k) Employment Agreement between FPL Group and Paul J. Evanson dated as of x
December 11, 1995
10(l) Employment Agreement between FPL Group and Lawrence J. Kelleher dated x
as of December 11, 1995
10(m) Employment Agreement between FPL Group and C.O. Woody dated as of x
December 11, 1995
10(n) Employment Agreement between FPL Group and Michael W. Yackira as of x
December 11, 1995
12 Computation of Ratios x
21 Subsidiaries of the Registrant x
23 Independent Auditors' Consent x x
27 Financial Data Schedule x x
* Incorporated herein by reference
</TABLE>
(b) Reports on Form 8-K - None<PAGE>
FPL GROUP, INC. SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
JAMES L. BROADHEAD
James L. Broadhead
Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer and Director)
Date: March 12, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature and Title as of March 12, 1996:
<S> <C>
MICHAEL W. YACKIRA K. MICHAEL DAVIS
Michael W. Yackira K. Michael Davis
Vice President, Finance and Chief Controller and Chief Accounting Officer
Financial Officer (Principal Accounting Officer)
(Principal Financial Officer)
Directors:
H. JESSE ARNELLE B. F. DOLAN
H. Jesse Arnelle B. F. Dolan
ROBERT M. BEALL, II WILLARD D. DOVER
Robert M. Beall, II Willard D. Dover
DAVID BLUMBERG PAUL J. EVANSON
David Blumberg Paul J. Evanson
J. HYATT BROWN DREW LEWIS
J. Hyatt Brown Drew Lewis
LYNNE V. CHENEY FREDERIC V. MALEK
Lynne V. Cheney Frederic V. Malek
ARMANDO M. CODINA PAUL R. TREGURTHA
Armando M. Codina Paul R. Tregurtha
MARSHALL M. CRISER
Marshall M. Criser
/TABLE
<PAGE>
FLORIDA POWER & LIGHT COMPANY SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Florida Power & Light Company
PAUL J. EVANSON
Paul J. Evanson
President and Director
Date: March 12, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature and Title as of March 12, 1996:
<S> <C>
JAMES L. BROADHEAD
James L. Broadhead
Chairman of the Board
(Principal Executive Officer and Director)
MICHAEL W. YACKIRA
Michael W. Yackira
Senior Vice President, Finance and Chief Financial Officer
(Principal Financial Officer and Director)
K. MICHAEL DAVIS
K. Michael Davis
Vice President, Accounting,
Controller and Chief Accounting Officer
(Principal Accounting Officer)
Directors:
DENNIS P. COYLE C. O. WOODY
Dennis P. Coyle C. O. Woody
THOMAS F. PLUNKETT LAWRENCE J. KELLEHER
Thomas F. Plunkett Lawrence J. Kelleher
</TABLE>
EXHIBIT 12
FLORIDA POWER & LIGHT COMPANY
COMPUTATION OF RATIOS
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993 1992 1991
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO FIXED CHARGES
Earnings, as defined:
Net income .................................. $ 611,374 $ 568,073 $ 467,960 $ 514,800 $ 417,517
Income taxes ................................ 342,293 319,410 239,890 264,588 183,364
Fixed charges, as below ..................... 286,472 310,312 348,028 338,219 326,686
Total earnings, as defined ................ $1,240,139 $1,197,795 $1,055,878 $1,117,607 $ 927,567
Fixed charges, as defined:
Interest charges ............................ $ 269,952 $ 292,347 $ 327,085 $ 315,799 $ 311,152
Rental interest factor ...................... 5,667 6,919 9,501 9,567 6,353
Fixed charges included in nuclear fuel cost . 10,853 11,046 11,442 12,853 9,181
Total fixed charges, as defined ........... $ 286,472 $ 310,312 $ 348,028 $ 338,219 $ 326,686
Ratio of earnings to fixed charges ............ 4.33 3.86 3.03 3.30 2.84
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND DIVIDEND REQUIREMENTS ON PREFERRED STOCK
Earnings, as defined:
Net income .................................. $ 611,374 $ 568,073 $ 467,960 $ 514,800 $ 417,517
Income taxes ................................ 342,293 319,410 239,890 264,588 183,364
Fixed charges, as below ..................... 286,472 310,312 348,028 338,219 326,686
Total earnings, as defined ................ $1,240,139 $1,197,795 $1,055,878 $1,117,607 $ 927,567
Fixed charges, as defined:
Interest charges ............................ $ 269,952 $ 292,347 $ 327,085 $ 315,799 $ 311,152
Rental interest factor ...................... 5,667 6,919 9,501 9,567 6,353
Fixed charges included in nuclear fuel cost . 10,853 11,046 11,442 12,853 9,181
Total fixed charges, as defined ........... 286,472 310,312 348,028 338,219 326,686
Non-tax deductible dividend requirements
on preferred stock .......................... 43,402 39,558 42,663 43,901 41,256
Ratio of income before income taxes
to net income ............................... 1.56 1.56 1.51 1.51 1.44
Dividend requirements on preferred stock
before income taxes ......................... 67,707 61,710 64,421 66,291 59,409
Combined fixed charges and dividend
requirements on preferred stock ............. $ 354,179 $ 372,022 $ 412,449 $ 404,510 $ 386,095
Ratio of earnings to combined fixed charges
and dividend requirements on preferred stock. 3.50 3.22 2.56 2.76 2.40
</TABLE>
EXHIBIT 21
SUBSIDIARIES OF FPL GROUP, INC.
<TABLE>
<CAPTION>
State or Jurisdiction
Subsidiary of Incorporation
<S> <C>
1. Florida Power & Light Company (100%-Owned) ............................................. Florida
2. Bay Loan and Investment Bank (1) ....................................................... Rhode Island
3. Palms Insurance Company, Limited (1) ................................................... Cayman Islands
4. Palmetto Insurance Company Limited (2) ................................................. Cayman Islands
(1) 100%-owned subsidiary of FPL Group Capital Inc
(2) 100%-owned subsidiary of Palms Insurance Company, Limited
</TABLE>
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statement No. 33-56869 on Form S-3; Registration Statement No.
33-57673 on Form S-8; Post-Effective Amendment No. 2 to Registration
Statement No. 33-31487 on Form S-8; Post-Effective Amendment No. 2 to
Registration Statement No. 33-33215 on Form S-8; Registration
Statement No. 33-11631 on Form S-8; Post-Effective Amendment No. 1 to
Registration Statement No. 33-39306 on Form S-3; Registration
Statement No. 33-57470 on Form S-3; and Post-Effective Amendment
No. 5 to Registration Statement No. 33-18669 on Form S-8 of FPL
Group, Inc., of our report dated February 9, 1996 appearing in this
Annual Report on Form 10-K of FPL Group, Inc. for the year ended
December 31, 1995.
We also consent to the incorporation by reference in Registration
Statement No. 33-40123 on Form S-3; Post-Effective Amendment No. 1 to
Registration Statement No. 33-46076 on Form S-3; Registration
Statement No. 33-61390 on Form S-3; and Post-Effective Amendment
No. 2 to Registration Statement No. 33-59429 on Form S-4 of Florida
Power & Light Company, of our report dated February 9, 1996 appearing
in this Annual Report on Form 10-K of Florida Power & Light Company
for the year ended December 31, 1995.
DELOITTE & TOUCHE LLP
Miami, Florida
March 12, 1996
<TABLE> <S> <C>
<S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from FPL Group's and FPL's consolidated balance sheet as of
December 31, 1995 and consolidated statements of income and cash flows for the year ended December 31, 1995 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-31-1995
<PERIOD-END> DEC-31-1995
<PERIOD-TYPE> 12-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> $9,699,291
<OTHER-PROPERTY-AND-INVEST> $1,246,542
<TOTAL-CURRENT-ASSETS> $985,348
<TOTAL-DEFERRED-CHARGES> $368,750
<OTHER-ASSETS> $159,295
<TOTAL-ASSETS> $12,459,226
<COMMON> $1,847
<CAPITAL-SURPLUS-PAID-IN> $3,132,140
<RETAINED-EARNINGS> $1,258,522
<TOTAL-COMMON-STOCKHOLDERS-EQ> $4,392,509
$50,000
$289,580
<LONG-TERM-DEBT-NET> $3,376,613
<SHORT-TERM-NOTES> $0
<LONG-TERM-NOTES-PAYABLE> $0
<COMMERCIAL-PAPER-OBLIGATIONS> $178,500
<LONG-TERM-DEBT-CURRENT-PORT> $107,902
$104,000
<CAPITAL-LEASE-OBLIGATIONS> $179,082
<LEASES-CURRENT> $0
<OTHER-ITEMS-CAPITAL-AND-LIAB> $3,781,040
<TOT-CAPITALIZATION-AND-LIAB> $12,459,226
<GROSS-OPERATING-REVENUE> $5,592,485
<INCOME-TAX-EXPENSE> $328,594
<OTHER-OPERATING-EXPENSES> $4,395,379
<TOTAL-OPERATING-EXPENSES> $4,395,379
<OPERATING-INCOME-LOSS> $1,197,106
<OTHER-INCOME-NET> $18,870
<INCOME-BEFORE-INTEREST-EXPEN> $1,172,574
<TOTAL-INTEREST-EXPENSE> $290,669
<NET-INCOME> $553,311
$43,402
<EARNINGS-AVAILABLE-FOR-COMM> $553,311
<COMMON-STOCK-DIVIDENDS> $308,582
<TOTAL-INTEREST-ON-BONDS> $0
<CASH-FLOW-OPERATIONS> $1,510,144
<EPS-PRIMARY> $3.16
<EPS-DILUTED> $3.16
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from FPL's consolidated balance sheet as of December 31, 1995 and
consolidated statements of income and cash flows for the year ended December 31, 1995 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-31-1995
<PERIOD-END> DEC-31-1995
<PERIOD-TYPE> 12-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> $9,699,291
<OTHER-PROPERTY-AND-INVEST> $646,846
<TOTAL-CURRENT-ASSETS> $891,217
<TOTAL-DEFERRED-CHARGES> $368,750
<OTHER-ASSETS> $145,155
<TOTAL-ASSETS> $11,751,259
<COMMON> $1,373,069
<CAPITAL-SURPLUS-PAID-IN> $2,228,593
<RETAINED-EARNINGS> $872,046
<TOTAL-COMMON-STOCKHOLDERS-EQ> $4,473,708
$50,000
$289,580
<LONG-TERM-DEBT-NET> $3,094,050
<SHORT-TERM-NOTES> $0
<LONG-TERM-NOTES-PAYABLE> $0
<COMMERCIAL-PAPER-OBLIGATIONS> $178,500
<LONG-TERM-DEBT-CURRENT-PORT> $100,000
$104,000
<CAPITAL-LEASE-OBLIGATIONS> $179,082
<LEASES-CURRENT> $0
<OTHER-ITEMS-CAPITAL-AND-LIAB> $3,282,339
<TOT-CAPITALIZATION-AND-LIAB> $11,751,259
<GROSS-OPERATING-REVENUE> $5,530,057
<INCOME-TAX-EXPENSE> $347,341
<OTHER-OPERATING-EXPENSES> $4,317,410
<TOTAL-OPERATING-EXPENSES> $4,664,751
<OPERATING-INCOME-LOSS> $865,306
<OTHER-INCOME-NET> $16,020
<INCOME-BEFORE-INTEREST-EXPEN> $881,326
<TOTAL-INTEREST-EXPENSE> $269,952
<NET-INCOME> $611,374
$43,402
<EARNINGS-AVAILABLE-FOR-COMM> $567,972
<COMMON-STOCK-DIVIDENDS> $557,923
<TOTAL-INTEREST-ON-BONDS> $0
<CASH-FLOW-OPERATIONS> $1,521,554
<EPS-PRIMARY> $0
<EPS-DILUTED> $0
</TABLE>
EXHIBIT 4(c)i
__________________________________________
FLORIDA POWER & LIGHT COMPANY
TO
The Chase Manhattan Bank
(National Association), Trustee
_________
Indenture
(For Unsecured Subordinated Debt Securities)
Dated as of November 1, 1995
__________________________________________
<PAGE>
TABLE OF CONTENTS
RECITAL OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE Definitions and Other Provisions of General
Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Officer . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request or Company Order . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 3
Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . 3
Discount Security. . . . . . . . . . . . . . . . . . . . . . . . 3
Dollar or $. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Eligible Obligations . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 3
Governmental Authority . . . . . . . . . . . . . . . . . . . . . 3
Government Obligations . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date. . . . . . . . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Officer's Certificate. . . . . . . . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 4
Outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Periodic Offering. . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . 6
Redemption Date. . . . . . . . . . . . . . . . . . . . . . . . . 6
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . 6
Regular Record Date. . . . . . . . . . . . . . . . . . . . . . . 6
Required Currency. . . . . . . . . . . . . . . . . . . . . . . . 6
Responsible Officer. . . . . . . . . . . . . . . . . . . . . . . 6
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Security Register and Security Registrar . . . . . . . . . . . . 7
Senior Indebtedness. . . . . . . . . . . . . . . . . . . . . . . 7
Special Record Date. . . . . . . . . . . . . . . . . . . . . . . 7
Stated Interest Rate . . . . . . . . . . . . . . . . . . . . . . 7
Stated Maturity. . . . . . . . . . . . . . . . . . . . . . . . . 7
Tranche. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . 7
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
United States. . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 102. Compliance Certificates and Opinions. . . . . . . . . . 8
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . 8
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . 9
SECTION 105. Notices, Etc. to Trustee and Company . . . . . . . . . 10
SECTION 106. Notice to Holders of Securities; Waiver . . . . . . . . 11
SECTION 107. Conflict with Trust Indenture Act . . . . . . . . . . . 12
SECTION 108. Effect of Headings and Table of Contents. . . . . . . . 12
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . 12
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . 12
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . 12
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . 12
SECTION 113. Legal Holidays. . . . . . . . . . . . . . . . . . . . . 13
ARTICLE TWO Security Forms. . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . 13
SECTION 202. Form of Trustee's Certificate of Authentication . . . . 14
ARTICLE THREE The Securities. . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . 14
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . 17
SECTION 303. Execution, Authentication, Delivery and Dating . . . . 17
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . 20
SECTION 305. Registration, Registration of Transfer and Exchange . . 20
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . 22
SECTION 307. Payment of Interest; Interest Rights Preserved. . . . . 22
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . 24
SECTION 309. Cancellation by Security Registrar . . . . . . . . . . 24
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . 24
SECTION 311. Payment to Be in Proper Currency. . . . . . . . . . . . 24
SECTION 312. Extension of Interest Payment . . . . . . . . . . . . . 25
ARTICLE FOUR Redemption of Securities. . . . . . . . . . . . . . . . . . 25
SECTION 401. Applicability of Article . . . . . . . . . . . . . . . 25
SECTION 402. Election to Redeem; Notice to Trustee . . . . . . . . . 25
SECTION 403. Selection of Securities to Be Redeemed . . . . . . . . 25
SECTION 404. Notice of Redemption . . . . . . . . . . . . . . . . . 26
SECTION 405. Securities Payable on Redemption Date . . . . . . . . . 27
SECTION 406. Securities Redeemed in Part . . . . . . . . . . . . . 27
ARTICLE FIVE Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 501. Applicability of Article . . . . . . . . . . . . . . . 28
SECTION 502. Satisfaction of Sinking Fund Payments with Securities . 28
SECTION 503. Redemption of Securities for Sinking Fund . . . . . . . 28
ARTICLE SIX Covenants. . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 601. Payment of Principal, Premium and Interest. . . . . . . 29
SECTION 602. Maintenance of Office or Agency . . . . . . . . . . . . 29
SECTION 603. Money for Securities Payments to Be Held in Trust . . . 30
SECTION 604. Corporate Existence . . . . . . . . . . . . . . . . . . 31
SECTION 605. Maintenance of Properties . . . . . . . . . . . . . . . 31
SECTION 606. Annual Officer's Certificate as to Compliance . . . . . 32
SECTION 607. Waiver of Certain Covenants . . . . . . . . . . . . . . 32
ARTICLE SEVEN Satisfaction and Discharge . . . . . . . . . . . . . . . . 32
SECTION 701. Satisfaction and Discharge of Securities. . . . . . . . 32
SECTION 702. Satisfaction and Discharge of Indenture . . . . . . . . 35
SECTION 703. Application of Trust Money . . . . . . . . . . . . . . 35
ARTICLE EIGHT Events of Default; Remedies . . . . . . . . . . . . . . . . 36
SECTION 801. Events of Default . . . . . . . . . . . . . . . . . . . 36
SECTION 802. Acceleration of Maturity; Rescission and Annulment. . . 37
SECTION 803. Collection of Indebtedness and Suits
for Enforcement by Trustee . . . . . . . . . . . . . . 38
SECTION 804. Trustee May File Proofs of Claim . . . . . . . . . . . 39
SECTION 805. Trustee May Enforce Claims Without
Possession of Securities . . . . . . . . . . . . . . . 39
SECTION 806. Application of Money Collected . . . . . . . . . . . . 40
SECTION 807. Limitation on Suits . 40
SECTION 808. Unconditional Right of Holders to Receive Principal,
Premium and Interest. . . . . . . . . . . . . . . . . . 41
SECTION 809. Restoration of Rights and Remedies . . . . . . . . . . 41
SECTION 810. Rights and Remedies Cumulative . . . . . . . . . . . . 41
SECTION 811. Delay or Omission Not Waiver . . . . . . . . . . . . 41
SECTION 812. Control by Holders of Securities . . . . . . . . . . . 41
SECTION 813. Waiver of Past Defaults . . . . . . . . . . . . . . . . 42
SECTION 814. Undertaking for Costs . . . . . . . . . . . . . . . . 42
SECTION 815. Waiver of Stay or Extension Laws . . . . . . . . . . . 43
ARTICLE NINE The Trustee . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 901. Certain Duties and Responsibilities . . . . . . . . . . 43
SECTION 902. Notice of Defaults. . . . . . . . . . . . . . . . . . . 44
SECTION 903. Certain Rights of Trustee . . . . . . . . . . . . . . . 44
SECTION 904. Not Responsible for Recitals or Issuance of Securities 46
SECTION 905. May Hold Securities . . . . . . . . . . . . . . . . . . 46
SECTION 906. Money Held in Trust . . . . . . . . . . . . . . . . . . 46
SECTION 907. Compensation and Reimbursement . . . . . . . . . . . . 46
SECTION 908. Disqualification; Conflicting Interests . . . . . . . . 47
SECTION 909. Corporate Trustee Required; Eligibility . . . . . . . . 47
SECTION 910. Resignation and Removal; Appointment of Successor . . . 48
SECTION 911. Acceptance of Appointment by Successor . . . . . . . . 49
SECTION 912. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . . . 50
SECTION 913. Preferential Collection of Claims Against Company . . . 51
SECTION 914. Co-trustees and Separate Trustees . . . . . . . . . . . 51
SECTION 915. Appointment of Authenticating Agent . . . . . . . . . . 52
ARTICLE TEN Holders' Lists and Reports by Trustee and Company . . . . . 54
SECTION 1001. Lists of Holders . . . . . . . . . . . . . . . . . . . 54
SECTION 1002. Reports by Trustee and Company . . . . . . . . . . . 54
ARTICLE ELEVEN Consolidation, Merger, Conveyance or Other Transfer . . . . 55
SECTION 1101. Company May Consolidate, Etc., Only on Certain Terms . 55
SECTION 1102. Successor Corporation Substituted . . . . . . . . . . 55
ARTICLE TWELVE Supplemental Indentures . . . . . . . . . . . . . . . . . . 56
SECTION 1201. Supplemental Indentures Without Consent of Holders . . 56
SECTION 1202. Supplemental Indentures With Consent of Holders . . . 57
SECTION 1203. Execution of Supplemental Indentures . . . . . . . . . 59
SECTION 1204. Effect of Supplemental Indentures . . . . . . . . . 59
SECTION 1205. Conformity With Trust Indenture Act . . . . . . . . . 59
SECTION 1206. Reference in Securities to Supplemental Indentures . . 59
SECTION 1207. Modification Without Supplemental Indenture. . . . . . 60
ARTICLE THIRTEEN Meetings of Holders; Action Without Meeting . . . . . 60
SECTION 1301. Purposes for Which Meetings May Be Called . . . . . . 60
SECTION 1302. Call, Notice and Place of Meetings . . . . . . . . . . 60
SECTION 1303. Persons Entitled to Vote at Meetings . . . . . . . . . 61
SECTION 1304. Quorum; Action . . . . . . . . . . . . . . . . . . . . 61
SECTION 1305. Attendance at Meetings; Determination of Voting Rights;
Conduct and Adjournment of Meetings . . . . . . . . . 62
SECTION 1306. Counting Votes and Recording Action of Meetings. . . . 63
SECTION 1307. Action Without Meeting . . . . . . . . . . . . . . . . 63
ARTICLE FOURTEEN Immunity of Incorporators, Stockholders, Officers
and Directors . . . . . . . . . . . . . . . . . . . 63
SECTION 1401. Liability Solely Corporate . . . . . . . . . . . . . . 63
ARTICLE FIFTEEN Subordination of Securities
SECTION 1501. Securities Subordinate to Senior Indebtedness. . . . . 64
SECTION 1502. Payment Over of Proceeds of Securities . . . . . . . . 64
SECTION 1503. Disputes with Holders of Certain Senior Indebtedness 66
SECTION 1504. Subrogation. . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1505. Obligation of the Company Unconditional. . . . . . . . 67
SECTION 1506. Priority of Senior Indebtedness Upon Maturity . . . . 67
SECTION 1507. Trustee as Holder of Senior Indebtedness . . . . . . . 67
SECTION 1508. Notice to Trustee to Effectuate Subordination. . . . . 67
SECTION 1509. Modification, Extension, etc. of Senior Indebtedness . 68
SECTION 1510. Trustee Has No Fiduciary Duty to
Holders of Senior Indebtedness . . . . . . . . . . . 68
SECTION 1511. Paying Agents Other Than the Trustee . . . . . . . . . 68
SECTION 1512. Rights of Holders of Senior Indebtedness Not Impaired. 68
SECTION 1513. Effect of Subordination Provisions; Termination. . . . 69
Testimonium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Signatures and Seals . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
<PAGE>
FLORIDA POWER & LIGHT COMPANY
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of November 1, 1995
Trust Indenture Act SectionIndenture Section
310 (a)(1) 909
(a)(2) 909
(a)(3) 914(b)
(a)(4) Not Applicable
(b) 908
910
311 (a) 913
(b) 913
(c) 913
312 (a) 1001
(b) 1001
(c) 1001
313 (a) 1002
(b) 1002
(c) 1002
(d) 1002
314 (a) 1002
(a)(4) 606
(b) Not Applicable
(c)(1) 102
(c)(2) 102
(c)(3) Not Applicable
(d) Not Applicable
(e) 102
315 (a) 901
903
(b) 902
(c) 901
(d) 901
(e) 814
316 (a) 812
813
(a)(1)(A) 802
812
(a)(1)(B) 813
(a)(2) Not Applicable
(b) 808
317 (a)(1) 803
(a)(2) 804
(b) 603
318 (a) 107
<PAGE>
INDENTURE, dated as of November 1, 1995 between Florida
Power & Light Company, a corporation duly organized and existing under
the laws of the State of Florida (herein called the "Company"), having
its principal office at 700 Universe Boulevard, Juno Beach, Florida
33408, and The Chase Manhattan Bank (National Association), a corporation
organized and existing under the laws of the United States of America,
having its principal corporate trust office at 4 Chase MetroTech Center,
Brooklyn, New York 11245, as Trustee (herein called the "Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and delivery
of this Indenture to provide for the issuance from time to time of its
unsecured subordinated debentures, notes or other evidences of
indebtedness (herein called the "Securities"), to be issued in one or more
series as contemplated herein; and all acts necessary to make this
Indenture a valid agreement of the Company have been performed.
For all purposes of this Indenture, except
as otherwise expressly provided or unless the context otherwise
requires, capitalized terms used herein shall have the meanings
assigned to them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and
the purchase of the Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of series thereof, as follows:
ARTICLE ONE
Definitions and Other Provisions of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(b) all terms used herein without definition which are
defined in the Trust Indenture Act, either directly or by refer-
ence therein, have the meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and, except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted in the United States at the date of such computation or, at
the election of the Company from time to time, at the date of the
execution and delivery of this Indenture; provided, however, that in
determining generally accepted accounting principles applicable to the
Company, the Company shall, to the extent required, conform to any
order, rule or regulation of any administrative agency, regulatory
authority or other governmental body having jurisdiction over the
Company; and
(d) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Nine, are de-
fined in that Article.
"Act", when used with respect to any Holder of a
Security, has the meaning specified in Section 104.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes
of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or through one or more intermediaries, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Authenticating Agent" means any Person (other than the Company or an
Affiliate of the Company) authorized by the Trustee to act on behalf of the
Trustee to authenticate one or more series of Securities.
"Authorized Officer" means the Chairman of the Board,
the President, any Vice President, the Treasurer, any Assistant
Treasurer or any other duly authorized officer of the Company.
"Board of Directors" means either the board of directors
of the Company or any committee thereof duly authorized to act in
respect of matters relating to this Indenture.
"Board Resolution" means a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect
on the date of such certification, and delivered to the Trustee.
"Business Day", when used with respect to a Place of Payment or any
other particular location specified in the Securities or this Indenture,
means any day, other than a Saturday or Sunday, which is not a day on which
banking institutions or trust companies in such Place of Payment or other
location are generally authorized or required by law, regulation or executive
order to remain closed, except as may be otherwise specified as contemplated
by Section 301.
"Commission" means the Securities and Exchange Commis-
sion, as from time to time constituted, created under the Securities Exchange
Act of 1934, as amended, or, if at any time after the date of execution and
delivery of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body, if any,
performing such duties at such time.
"Company" means the Person named as the "Company" in the
first paragraph of this Indenture until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture,
and thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written re-
quest or order signed in the name of the Company by an Authorized
Officer and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution and delivery of this
Indenture is located at 4 Chase MetroTech Center, Brooklyn, New York 11245.
"Corporation" means a corporation, association, company,
joint stock company or business trust.
"Defaulted Interest" has the meaning specified in
Section 307.
"Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 802.
"interest" with respect to a Discount Security means interest, if any, borne
by such Security at a Stated Interest Rate.
"Dollar" or "$" means a dollar or other equivalent unit
in such coin or currency of the United States as at the time shall be
legal tender for the payment of public and private debts.
"Eligible Obligations" means:
(a) with respect to Securities denominated in Dollars,
Government Obligations; or
(b) with respect to Securities denominated in a
currency other than Dollars or in a composite currency, such
other obligations or instruments as shall be specified with
respect to such Securities, as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 801.
"Governmental Authority" means the government of the United
States or of any State or Territory thereof or of the District of Columbia
or of any county, municipality or other political subdivision of any
thereof, or any department, agency, authority or other instrumentality of
any of the foregoing.
"Government Obligations" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
entitled to the benefit of the full faith and credit thereof; and
(b) certificates, depositary receipts or other in-
struments which evidence a direct ownership interest in obli-
gations described in clause (a) above or in any specific interest or
principal payments due in respect thereof; provided, however, that the
custodian of such obligations or specific interest or principal payments
shall be a bank or trust company (which may include the Trustee or any
Paying Agent) subject to Federal or state supervision or examination
with a combined capital and surplus of at least $50,000,000; and provided,
further, that except as may be otherwise required by law, such custodian
shall be obligated to pay to the holders of such certificates,
depositary receipts or other instruments the full amount received by such
custodian in respect of such obligations or specific payments and shall
not be permitted to make any deduction therefrom.
"Holder" means a Person in whose name a Security is
registered in the Security Register.
"Indenture" means this instrument as originally executed and
delivered and as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of
particular series of Securities established as contemplated by Section 301.
"Interest Payment Date", when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security,
means the date on which the principal of such Security or an
installment of principal becomes due and payable as provided in such
Security or in this Indenture, whether at the Stated Maturity, by
declaration of acceleration, upon call for redemption or otherwise.
"Officer's Certificate" means a certificate signed by an
Authorized Officer and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Company, or other counsel acceptable to the Trustee.
"Outstanding", when used with respect to Securities,
means, as of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities deemed to have been paid in accordance
with Section 701; and
(c) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than
any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it and the Company that
such Securities are held by a bona fide purchaser or purchasers in whose
hands such Securities are valid obligations of the Company;
provided, however, that in determining whether or not the Holders of
the requisite principal amount of the Securities Outstanding under
this Indenture, or the Outstanding Securities of any series or
Tranche, have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or whether or not a quorum is
present at a meeting of Holders of Securities,
(x) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such
other obligor (unless the Company, such Affiliate or such obligor
owns all Securities Outstanding under this Indenture, or all
Outstanding Securities of each such series and each such Tranche,
as the case may be, determined without regard to this clause (x))
shall be disregarded and deemed not to be Outstanding, except that,
in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice,
consent or waiver or upon any such determination as to the
presence of a quorum, only Securities which the Trustee knows to be
so owned shall be so disregarded; provided, however, that Securities
so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any Affiliate of the Company or of
such other obligor;
(y) the principal amount of a Discount Security that shall be
deemed to be Outstanding for such purposes shall be the amount of the
principal thereof that would be due and payable as of the date of
such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 802; and
(z) the principal amount of any Security which is
denominated in a currency other than Dollars or in a composite
currency that shall be deemed to be Outstanding for such purposes
shall be the amount of Dollars which could have been purchased by
the principal amount (or, in the case of a Discount Security, the
Dollar equivalent on the date determined as set forth below of the
amount determined as provided in (y) above) of such currency or
composite currency evidenced by such Security, in each such case
certified to the Trustee in an Officer's Certificate, based (i) on
the average of the mean of the buying and selling spot rates quoted
by three banks which are members of the New York Clearing House
Association selected by the Company in effect at 11:00 A.M. (New York
time) in The City of New York on the fifth Business Day preceding
any such determination or (ii) if on such fifth Business Day it
shall not be possible or practicable to obtain such quotations
from such three banks, on such other quotations or alternative
methods of determination which shall be as consistent as practicable
with the method set forth in (i) above;
provided, further, that, in the case of any Security the principal of
which is payable from time to time without presentment or surrender,
the principal amount of such Security that shall be deemed to be
Outstanding at any time for all purposes of this Indenture shall be
the original principal amount thereof less the aggregate amount of
principal thereof theretofore paid.
"Paying Agent" means any Person, including the Company,
authorized by the Company to pay the principal of and premium, if
any, or interest, if any, on any Securities on behalf of the Company.
"Periodic Offering" means an offering of Securities of a
series from time to time any or all of the specific terms of which
Securities, including without limitation the rate or rates of
interest, if any, thereon, the Stated Maturity or Maturities thereof
and the redemption provisions, if any, with respect thereto, are to
be determined by the Company or its agents upon the issuance of such
Securities.
"Person" means any individual, Corporation, partnership,
joint venture, trust or unincorporated organization or any
Governmental Authority thereof.
"Place of Payment", when used with respect to the
Securities of any series, or Tranche thereof, means the place or
places, specified as contemplated by Section 301, at which, subject
to Section 602, principal of and premium, if any, and interest, if
any, on the Securities of such series or Tranche are payable.
"Predecessor Security" of any particular Security means
every previous Security evidencing all or a portion of the same debt
as that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under
Section 306 in exchange for or in lieu of a mutilated, destroyed,
lost or stolen Security shall be deemed (to the extent lawful) to
evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"Redemption Date", when used with respect to any
Security to be redeemed, means the date fixed for such redemption by
or pursuant to this Indenture.
"Redemption Price", when used with respect to any Secur-
ity to be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.
"Regular Record Date" for the interest payable on any
Interest Payment Date on the Securities of any series means the date
specified for that purpose as contemplated by Section 301.
"Required Currency" has the meaning specified in Section 311.
"Responsible Officer", when used with respect to the
Trustee, means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Securities" has the meaning stated in the first recital
of this Indenture and more particularly means any securities authen-
ticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Senior Indebtedness" means all obligations (other than
non-recourse obligations and the indebtedness issued under this
Indenture) of, or guaranteed or assumed by, the Company for borrowed
money, including both senior and subordinated indebtedness for borrowed
money (other than the Securities), or for the payment of money relating
to any lease which is capitalized on the consolidated balance sheet of
the Company and its subsidiaries in accordance with generally accepted
accounting principles as in effect from time to time, or evidenced by
bonds, debentures, notes or other similar instruments, and in each case,
amendments, renewals, extensions, modifications and refundings of any
such indebtedness or obligations, whether existing as of the date of
this Indenture or subsequently incurred by the Company.
"Special Record Date" for the payment of any Defaulted
Interest on the Securities of any series means a date fixed by the
Trustee pursuant to Section 307.
"Stated Interest Rate" means a rate (whether fixed or variable)
at which an obligation by its terms is stated to bear simple interest.
Any calculation or other determination to be made under this Indenture
by reference to the Stated Interest Rate on a Security shall be made
without regard to the effective interest cost to the Company of such
Security and without regard to the Stated Interest Rate on, or the
effective cost to the Company of, any other indebtedness the Company's
obligations in respect of which are evidenced or secured in whole or in
part by such Security.
"Stated Maturity", when used with respect to any obligation or
any installment of principal thereof or interest thereon, means the date on
which the principal of such obligation or such installment of principal or
interest is stated to be due and payable (without regard to any provisions
for redemption, prepayment, acceleration, purchase or extension).
"Tranche" means a group of Securities which (a) are of
the same series and (b) have identical terms except as to principal
amount and/or date of issuance.
"Trust Indenture Act" means, as of any time, the Trust Indenture
Act of 1939, or any successor statute, as in effect at such time.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become
such with respect to one or more series of Securities pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder, and if at
any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"United States" means the United States of America, its
Territories, its possessions and other areas subject to its political
jurisdiction.
SECTION 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided in this Indenture, upon
any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall, if
requested by the Trustee, furnish to the Trustee an Officer's Certificate
stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in
the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:
(a) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such Person,
such Person has made such examination or investigation as is necessary
to enable such Person to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such Person, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it
is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or give
an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a certifi-
cate or opinion of, or representations by, counsel, unless such offi-
cer knows, or in the exercise of reasonable care should know, that
the certificate or opinion or representations with respect to the
matters upon which such Officer's Certificate or opinion are based
are erroneous. Any such certificate or Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate
or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual
matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture, they
may, but need not, be consolidated and form one instrument.
Whenever, subsequent to the receipt by the Trustee of
any Board Resolution, Officer's Certificate, Opinion of Counsel or
other document or instrument, a clerical, typographical or other
inadvertent or unintentional error or omission shall be discovered
therein, a new document or instrument may be substituted therefor in
corrected form with the same force and effect as if originally filed
in the corrected form and, irrespective of the date or dates of the
actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as
of the date or dates required with respect to the document or
instrument for which it is substituted. Anything in this Indenture
to the contrary notwithstanding, if any such corrective document or
instrument indicates that action has been taken by or at the request
of the Company which could not have been taken had the original
document or instrument not contained such error or omission, the
action so taken shall not be invalidated or otherwise rendered
ineffective but shall be and remain in full force and effect, except
to the extent that such action was a result of willful misconduct or
bad faith. Without limiting the generality of the foregoing, any
Securities issued under the authority of such defective document or
instrument shall nevertheless be the valid obligations of the Company
entitled to the benefits of this Indenture equally and ratably with
all other Outstanding Securities, except as aforesaid.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction,
notice, consent, election, waiver or other action provided by
this Indenture to be made, given or taken by Holders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing or, alternatively, may be
embodied in and evidenced by the record of Holders voting in
favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders duly called and held in
accordance with the provisions of Article Thirteen, or a
combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both
are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any
such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments and so voting at
any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any
Person of a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 901) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this
Section. The record of any meeting of Holders shall be proved in
the manner provided in Section 1306.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of
a witness of such execution or by a certificate of a notary
public or other officer authorized by law to take acknowledgments
of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof or may be
proved in any other manner which the Trustee and the Company deem
sufficient. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his
authority.
(c) The principal amount (except as otherwise
contemplated in clause (y) of the proviso to the definition of
Outstanding) and serial numbers of Securities held by any Person,
and the date of holding the same, shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, no-
tice, consent, election, waiver or other Act of a Holder shall
bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof
or in exchange therefor or in lieu thereof in respect of anything
done, omitted or suffered to be done by the Trustee or the Com-
pany in reliance thereon, whether or not notation of such action
is made upon such Security.
(e) Until such time as written instruments shall have
been delivered to the Trustee with respect to the requisite
percentage of principal amount of Securities for the action
contemplated by such instruments, any such instrument executed
and delivered by or on behalf of a Holder may be revoked with
respect to any or all of such Securities by written notice by
such Holder or any subsequent Holder, proven in the manner in
which such instrument was proven.
(f) Securities of any series, or any Tranche thereof,
authenticated and delivered after any Act of Holders may, and
shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any action taken by such Act of
Holders. If the Company shall so determine, new Securities of
any series, or any Tranche thereof, so modified as to conform, in
the opinion of the Trustee and the Company, to such action may be
prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities
of such series or Tranche.
(g) If the Company shall solicit from Holders any
request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by Company
Order, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such
record date, but only the Holders of record at the close of
business on the record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite
proportion of the Outstanding Securities have authorized or
agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of the
record date.
SECTION 105. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, election, waiver or Act of Holders or other document pro-
vided or permitted by this Indenture to be made upon, given or
furnished to, or filed with, the Trustee by any Holder or by the
Company, or the Company by the Trustee or by any Holder, shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and delivered personally to an
officer or other responsible employee of the addressee, or
transmitted by facsimile transmission, telex or other direct written
electronic means to such telephone number or other electronic
communications address as the parties hereto shall from time to time
designate, or transmitted by registered mail, charges prepaid, to the
applicable address set opposite such party's name below or to such
other address as either party hereto may from time to time designate:
If to the Trustee, to:
The Chase Manhattan Bank (National Association)
Institutional Trust Group
4 Chase MetroTech Center
Brooklyn, New York 11245
Attention: Institutional Trust Group
Telephone: (718) 242-7287
Telecopy: (718) 242-5885
If to the Company, to:
Florida Power & Light Company
700 Universe Boulevard
Juno Beach, Florida 33408
Attention: Dilek Samil, Treasurer
Telephone: (407) 694-6324
Telecopy: (407) 692-6299
Any communication contemplated herein shall be deemed to
have been made, given, furnished and filed if personally delivered,
on the date of delivery, if transmitted by facsimile transmission,
telex or other direct written electronic means, on the date of
transmission, and if transmitted by registered mail, on the date of
receipt.
SECTION 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this
Indenture provides for notice to Holders of any event, such notice
shall be sufficiently given, and shall be deemed given, to Holders
if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears
in the Security Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such
notice to Holders by mail, then such notification as shall be made with
the approval of the Trustee shall constitute a sufficient notification for
every purpose hereunder. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders.
Any notice required by this Indenture may be waived in writing by
the Person entitled to receive such notice, either before or after the
event otherwise to be specified therein, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
SECTION 107. Conflict with Trust Indenture Act.
If any provision of this Indenture limits, qualifies or
conflicts with another provision hereof which is required or deemed
to be included in this Indenture by, or is otherwise governed by, any
of the provisions of the Trust Indenture Act, such other provision
shall control; and if any provision hereof otherwise conflicts with
the Trust Indenture Act, the Trust Indenture Act shall control.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings in this Indenture and
the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the
Company and Trustee shall bind their respective successors and
assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or the
Securities shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or the Securities, express or
implied, shall give to any Person, other than the parties hereto,
their successors hereunder, the Holders, and so long as the notice
described in Section 1513 hereof has not been given, the holders of
Senior Indebtedness, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by
and construed in accordance with the laws of the State of New York,
except to the extent that the law of any other jurisdiction shall be
mandatorily applicable.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of
this Indenture or of the Securities other than a provision in
Securities of any series, or any Tranche thereof, or in the Board
Resolution or Officer's Certificate which establishes the terms of
the Securities of such series or Tranche, which specifically states
that such provision shall apply in lieu of this Section) payment of
interest or principal and premium, if any, need not be made at such
Place of Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment, except that if such Business
Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day in each case with the
same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, and, if such payment is
made or duly provided for on such Business Day, no interest shall
accrue on the amount so payable for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be, to such Business Day.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The definitive Securities of each series shall be in
substantially the form or forms thereof established in the indenture
supplemental hereto establishing such series or in a Board Resolution
establishing such series, or in an Officer's Certificate pursuant to
such supplemental indenture or Board Resolution, in each case with
such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently
herewith, be determined by the officers executing such Securities, as
evidenced by their execution of the Securities. If the form or forms
of Securities of any series are established in a Board Resolution or
in an Officer's Certificate pursuant to a Board Resolution, such
Board Resolution and Officer's Certificate, if any, shall be
delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery
of such Securities.
Unless otherwise specified as contemplated by Section
301, the Securities of each series shall be issuable in registered
form without coupons. The definitive Securities shall be produced in
such manner as shall be determined by the officers executing such
Securities, as evidenced by their execution thereof.
SECTION 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the form set forth below:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
The Chase Manhattan Bank
(National Association) as Trustee
By:
Authorized Officer
ARTICLE THREE
The Securities
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may
be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series.
Prior to the authentication and delivery of Securities of any series
there shall be established by specification in a supplemental
indenture or in a Board Resolution, or in an Officer's Certificate
pursuant to a supplemental indenture or a Board Resolution:
(a) the title of the Securities of such series (which
shall distinguish the Securities of such series from Securities
of all other series);
(b) any limit upon the aggregate principal amount of
the Securities of such series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of such series
pursuant to Section 304, 305, 306, 406 or 1206 and, except for
any Securities which, pursuant to Section 303, are deemed never
to have been authenticated and delivered hereunder);
(c) the Person or Persons (without specific
identification) to whom interest on Securities of such series, or
any Tranche thereof, shall be payable on any Interest Payment
Date, if other than the Persons in whose names such Securities
(or one or more Predecessor Securities) are registered at the
close of business on the Regular Record Date for such interest;
(d) the date or dates on which the principal of the
Securities of such series or any Tranche thereof, is payable or
any formulary or other method or other means by which such date
or dates shall be determined, by reference to an index or other
fact or event ascertainable outside of this Indenture or
otherwise (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension);
(e) the rate or rates at which the Securities of such
series, or any Tranche thereof, shall bear interest, if any
(including the rate or rates at which overdue principal shall
bear interest, if different from the rate or rates at which such
Securities shall bear interest prior to Maturity, and, if
applicable, the rate or rates at which overdue premium or
interest shall bear interest, if any), or any formulary or other
method or other means by which such rate or rates shall be
determined, by reference to an index or other fact or event
ascertainable outside of this Indenture or otherwise; the date or
dates from which such interest shall accrue; the Interest Payment
Dates on which such interest shall be payable and the Regular
Record Date, if any, for the interest payable on such Securities
on any Interest Payment Date; the right of the Company, if any,
to extend the interest payment periods and the duration of any
such extension as contemplated by Section 312; and the basis of
computation of interest, if other than as provided in Section
310;
(f) the place or places at which or methods by which
(1) the principal of and premium, if any, and interest, if any,
on Securities of such series, or any Tranche thereof, shall be
payable, (2) registration of transfer of Securities of such
series, or any Tranche thereof, may be effected, (3) exchanges of
Securities of such series, or any Tranche thereof, may be
effected and (4) notices and demands to or upon the Company in
respect of the Securities of such series, or any Tranche thereof,
and this Indenture may be served; the Security Registrar and any
Paying Agent or Agents for such series or Tranche; and if such is
the case, that the principal of such Securities shall be payable
without presentment or surrender thereof;
(g) the period or periods within which, or the date or
dates on which, the price or prices at which and the terms and
conditions upon which the Securities of such series, or any
Tranche thereof, may be redeemed, in whole or in part, at the
option of the Company and any restrictions on such redemptions,
including but not limited to a restriction on a partial
redemption by the Company of the Securities of any series, or any
Tranche thereof, resulting in delisting of such Securities from
any national exchange;
(h) the obligation or obligations, if any, of the
Company to redeem or purchase the Securities of such series, or
any Tranche thereof, pursuant to any sinking fund or other
mandatory redemption provisions or at the option of a Holder
thereof and the period or periods within which or the date or
dates on which, the price or prices at which and the terms and
conditions upon which such Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation, and
applicable exceptions to the requirements of Section 404 in the
case of mandatory redemption or redemption at the option of the
Holder;
(i) the denominations in which Securities of such
series, or any Tranche thereof, shall be issuable if other than
denominations of $1,000 and any integral multiple thereof;
(j) the currency or currencies, including composite
currencies, in which payment of the principal of and premium, if
any, and interest, if any, on the Securities of such series, or
any Tranche thereof, shall be payable (if other than in Dollars);
(k) if the principal of or premium, if any, or in-
terest, if any, on the Securities of such series, or any Tranche
thereof, are to be payable, at the election of the Company or a
Holder thereof, in a coin or currency other than that in which
the Securities are stated to be payable, the period or periods
within which, and the terms and conditions upon which, such
election may be made;
(l) if the principal of or premium, if any, or
interest, if any, on the Securities of such series, or any
Tranche thereof, are to be payable, or are to be payable at the
election of the Company or a Holder thereof, in securities or
other property, the type and amount of such securities or other
property, or the formulary or other method or other means by
which such amount shall be determined, and the period or periods
within which, and the terms and conditions upon which, any such
election may be made;
(m) if the amount payable in respect of principal of or
premium, if any, or interest, if any, on the Securities of such
series, or any Tranche thereof, may be determined with reference
to an index or other fact or event ascertainable outside of this
Indenture, the manner in which such amounts shall be determined
to the extent not established pursuant to clause (e) of this
paragraph;
(n) if other than the principal amount thereof, the
portion of the principal amount of Securities of such series, or
any Tranche thereof, which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 802;
(o) any Events of Default, in addition to those
specified in Section 801, with respect to the Securities of such
series, and any covenants of the Company for the benefit of the
Holders of the Securities of such series, or any Tranche thereof,
in addition to those set forth in Article Six;
(p) the terms, if any, pursuant to which the Securities
of such series, or any Tranche thereof, may be converted into or
exchanged for shares of capital stock or other securities of the
Company or any other Person;
(q) the obligations or instruments, if any, which shall
be considered to be Eligible Obligations in respect of the
Securities of such series, or any Tranche thereof, denominated in
a currency other than Dollars or in a composite currency, and any
additional or alternative provisions for the reinstatement of the
Company's indebtedness in respect of such Securities after the
satisfaction and discharge thereof as provided in Section 701;
(r) if the Securities of such series, or any Tranche
thereof, are to be issued in global form, (i) any limitations on
the rights of the Holder or Holders of such Securities to
transfer or exchange the same or to obtain the registration of
transfer thereof, (ii) any limitations on the rights of the
Holder or Holders thereof to obtain certificates therefor in
definitive form in lieu of temporary form and (iii) any and all
other matters incidental to such Securities;
(s) if the Securities of such series, or any Tranche
thereof, are to be issuable as bearer securities, any and all
matters incidental thereto which are not specifically addressed
in a supplemental indenture as contemplated by clause (g) of
Section 1201;
(t) to the extent not established pursuant to clause
(r) of this paragraph, any limitations on the rights of the
Holders of the Securities of such Series, or any Tranche thereof,
to transfer or exchange such Securities or to obtain the
registration of transfer thereof; and if a service charge will be
made for the registration of transfer or exchange of Securities
of such series, or any Tranche thereof, the amount or terms
thereof;
(u) any exceptions to Section 113, or variation in the
definition of Business Day, with respect to the Securities of
such series, or any Tranche thereof; and
(v) any other terms of the Securities of such series,
or any Tranche thereof, not inconsistent with the provisions of
this Indenture.
Unless otherwise provided in a supplemental indenture,
Board Resolution or Officer's Certificate establishing the terms of
any series of Securities, or Tranche thereof, the Securities of each
series, or any Tranche thereof, shall be subordinated in the right of
payment to Senior Indebtedness as provided in Article Fifteen.
With respect to Securities of a series subject to a
Periodic Offering, the indenture supplemental hereto or the Board
Resolution which establishes such series, or the Officer's
Certificate pursuant to such supplemental indenture or Board
Resolution, as the case may be, may provide general terms or
parameters for Securities of such series and provide either that the
specific terms of Securities of such series, or any Tranche thereof,
shall be specified in a Company Order or that such terms shall be
determined by the Company or its agents in accordance with procedures
specified in a Company Order as contemplated by clause (b) of Section
303.
SECTION 302. Denominations.
Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, or any Tranche thereof, the
Securities of each series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, or any Tranche thereof, the
Securities shall be executed on behalf of the Company by an
Authorized Officer and may have the corporate seal of the Company
affixed thereto or reproduced thereon and attested by any other
Authorized Officer. The signature of any or all of these officers on
the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at the time of execution Authorized Officers of
the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Securities or did not hold
such offices at the date of such Securities.
The Trustee shall authenticate and deliver Securities of
a series, for original issue, at one time or from time to time in
accordance with the Company Order referred to below, upon receipt by
the Trustee of:
(a) the instrument or instruments establishing the form
or forms and terms of such series, as provided in Sections 201
and 301;
(b) a Company Order requesting the authentication and
delivery of such Securities and, in the case of Securities of a
series subject to a Periodic Offering, to the extent that the
terms of such Securities shall not have been established in an
indenture supplemental hereto or in a Board Resolution, or in an
Officer's Certificate pursuant to a supplemental indenture or
Board Resolution, all as contemplated by Sections 201 and 301,
either (i) establishing such terms or (ii) specifying procedures,
acceptable to the Trustee, by which such terms are to be
established (which procedures may provide, to the extent
acceptable to the Trustee, for authentication and delivery
pursuant to oral or electronic instructions from the Company or
any agent or agents thereof, which oral instructions are to be
promptly confirmed electronically or in writing), in either case
in accordance with the instrument or instruments delivered
pursuant to clause (a) above;
(c) the Securities of such series, executed on behalf
of the Company by an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(i) that the form or forms of such Securities have been duly
authorized by the Company and have been established in conformity
with the provisions of this Indenture;
(ii) that the terms of such Securities have been
duly authorized by the Company and have been established in
conformity with the provisions of this Indenture; and
(iii) that such Securities, when authenticated and delivered
by the Trustee and issued and delivered by the Company in the
manner and subject to any conditions specified in such Opinion of
Counsel, will have been duly issued under this Indenture and will
constitute valid and legally binding obligations of the Company,
entitled to the benefits provided by this Indenture, and enforceable
in accordance with their terms, subject, as to enforcement, to laws
relating to or affecting generally the enforcement of creditors'
rights, including, without limitation, bankruptcy and insolvency
laws and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
provided, however, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of such
Securities (provided that such Opinion of Counsel addresses the authentication
and delivery of all Securities of such series) and that in lieu of the
opinions described in clauses (ii) and (iii) above Counsel may opine that:
(x) when the terms of such Securities shall have been
established pursuant to a Company Order or Orders or pursuant
to such procedures (acceptable to the Trustee) as may be specified
from time to time by a Company Order or Orders, all as contemplated
by and in accordance with the instrument or instruments delivered
pursuant to clause (a) above, such terms will have been duly
authorized by the Company and will have been established in conformity
with the provisions of this Indenture; and
(y) such Securities, when authenticated and delivered by the
Trustee in accordance with this Indenture and the Company Order or
Orders or specified procedures referred to in paragraph (x) above and
issued and delivered by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will have been duly
issued under this Indenture and will constitute valid and legally
binding obligations of the Company, entitled to the benefits provided
by the Indenture, and enforceable in accordance with their terms,
subject, as to enforcement, to laws relating to or affecting generally
the enforcement of creditors' rights, including, without limitation,
bankruptcy and insolvency laws and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of
any of such Securities, the form and terms thereof and the legality,
validity, binding effect and enforceability thereof, upon the Opinion of
Counsel and other documents delivered pursuant to Sections 201 and 301 and
this Section, as applicable, at or prior to the time of the first
authentication of Securities of such series unless and until such opinion or
other documents have been superseded or revoked or expire by their terms.
In connection with the authentication and delivery of Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to assume that
the Company's instructions to authenticate and deliver such Securities do not
violate any rules, regulations or orders of any Governmental Authority having
jurisdiction over the Company.
If the form or terms of the Securities of any series have been
established by or pursuant to a Board Resolution or an Officer's Certificate
as permitted by Sections 201 or 301, the Trustee shall not be required to
authenticate such Securities if the issuance of such Securities pursuant to
this Indenture will affect the Trustee's own rights, duties or immunities
under the Securities and this Indenture or otherwise in a manner which is
not reasonably acceptable to the Trustee.
Unless otherwise specified as contemplated by Section
301 with respect to any series of Securities, or any Tranche thereof,
each Security shall be dated the date of its authentication.
Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, no Security
shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for
herein executed by the Trustee or its agent by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder to the Company, or any Person
acting on its behalf, but shall never have been issued and sold by the
Company, and the Company shall deliver such Security to the Security
Registrar for cancellation as provided in Section 309 together with a
written statement (which need not comply with Section 102 and need not
be accompanied by an Officer's Certificate and an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company,
for all purposes of this Indenture such Security shall be deemed never to
have been authenticated and delivered hereunder and shall never be
entitled to the benefits hereof.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, or
any Tranche thereof, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced,
in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued, with such
appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities; provided, however, that temporary Securities
need not recite specific redemption, sinking fund, conversion or exchange
provisions.
Unless otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, after the
preparation of definitive Securities of such series or Tranche, the
temporary Securities of such series or Tranche shall be exchangeable,
without charge to the Holder thereof, for definitive Securities of such
series or Tranche upon surrender of such temporary Securities at the
office or agency of the Company maintained pursuant to Section 602 in a
Place of Payment for such Securities. Upon such surrender of temporary
Securities, the Company shall, except as aforesaid, execute and the Trustee
shall authenticate and deliver in exchange therefor definitive Securities
of the same series and Tranche, of authorized denominations and of
like tenor and aggregate principal amount.
Until exchanged in full as hereinabove provided, temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and Tranche and of
like tenor authenticated and delivered hereunder.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept in each office designated
pursuant to Section 602, with respect to the Securities of each series or
any Tranche thereof, a register (all registers kept in accordance with
this Section being collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Securities of such series or
Tranche and the registration of transfer thereof. The Company shall
designate one Person to maintain the Security Register for the Securities
of each series on a consolidated basis, and such Person is referred to
herein, with respect to such series, as the "Security Registrar." Anything
herein to the contrary notwithstanding, the Company may designate one or
more of its offices as an office in which a register with respect to the
Securities of one or more series, or any Tranche or Tranches thereof, shall
be maintained, and the Company may designate itself the Security Registrar
with respect to one or more of such series. The Security Register shall be
open for inspection by the Trustee and the Company at all reasonable times.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, upon
surrender for registration of transfer of any Security of such series or
Tranche at the office or agency of the Company maintained pursuant to
Section 602 in a Place of Payment for such series or Tranche, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Securities of
the same series and Tranche, of authorized denominations and of like tenor
and aggregate principal amount.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, any Security
of such series or Tranche may be exchanged at the option of the Holder, for
one or more new Securities of the same series and Tranche, of authorized
denominations and of like tenor and aggregate principal amount, upon
surrender of the Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities delivered upon any registration of transfer or exchange
of Securities shall be valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company, the Trustee or the
Security Registrar) be duly endorsed or shall be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Trustee or
the Security Registrar, as the case may be, duly executed by the Holder
thereof or his attorney duly authorized in writing.
Unless otherwise specified as contemplated by Section 301 with respect
to Securities of any series, or any Tranche thereof, no service charge shall
be made for any registration of transfer or exchange of Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration
of transfer or exchange of Securities, other than exchanges pursuant to
Section 304, 406 or 1206 not involving any transfer.
The Company shall not be required to execute or to provide for the
registration of transfer of or the exchange of (a) Securities of any series,
or any Tranche thereof, during a period of 15 days immediately preceding the
date notice is to be given identifying the serial numbers of the Securities
of such series or Tranche called for redemption or (b) any Security so
selected for redemption in whole or in part, except the unredeemed portion
of any Security being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same series and
Tranche, and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the ownership of and the destruction,
loss or theft of any Security and (b) such security or indemnity as may be
reasonably required by them to save each of them and any agent of either of
them harmless, then, in the absence of notice to the Company or the Trustee
that such Security is held by a Person purporting to be the owner of such
Security, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new
Security of the same series and Tranche, and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
Notwithstanding the foregoing, in case any such
mutilated, destroyed, lost or stolen Security has become or is about
to become due and payable, the Company in its discretion may, instead
of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this
Section, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the
fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone
other than the Holder of such new Security, and any such new Security shall be
entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of such series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise specified as contemplated by Section 301 with respect
to the Securities of any series, or any Tranche thereof, interest on any
Security which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest.
Subject to Section 312, any interest on any Security of
any series which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the
related Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a date (herein called a "Special Record Date") for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the date
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall promptly cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities of such
series at the address of such Holder as it appears in the Security Register,
not less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of
business on such Special Record Date.
(b) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section and
Section 305, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any
other Security shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or
the Trustee may treat the Person in whose name such Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and premium, if any, and (subject
to Sections 305 and 307) interest, if any, on such Security and for
all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation by Security Registrar.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the
Security Registrar, be delivered to the Security Registrar and, if not
theretofore canceled, shall be promptly canceled by the Security Registrar.
The Company may at any time deliver to the Security Registrar for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever or which the
Company shall not have issued and sold, and all Securities so delivered
shall be promptly canceled by the Security Registrar. No Securities shall
be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture.
All canceled Securities held by the Security Registrar shall be disposed of
in accordance with a Company Order delivered to the Security Registrar and
the Trustee, and the Security Registrar shall promptly deliver a certificate
of disposition to the Trustee and the Company unless, by a Company Order,
similarly delivered, the Company shall direct that canceled Securities be
returned to it. The Security Registrar shall promptly deliver evidence of
any cancellation of a Security in accordance with this Section 309 to the
Trustee and the Company.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section
301 for Securities of any series, or any Tranche thereof, interest on
the Securities of each series shall be computed on the basis of a
360-day year consisting of twelve 30-day months and on the basis of
the actual number of days elapsed within any month in relation to the
deemed 30 days of such month.
SECTION 311. Payment to Be in Proper Currency.
In the case of the Securities of any series, or any
Tranche thereof, denominated in any currency other than Dollars or in
a composite currency (the "Required Currency"), except as otherwise
specified with respect to such Securities as contemplated by Section
301, the obligation of the Company to make any payment of the
principal thereof, or the premium, if any, or interest, if any,
thereon, shall not be discharged or satisfied by any tender by the
Company, or recovery by the Trustee, in any currency other than the
Required Currency, except to the extent that such tender or recovery
shall result in the Trustee timely holding the full amount of the
Required Currency then due and payable. If any such tender or
recovery is in a currency other than the Required Currency, the
Trustee may take such actions as it considers appropriate to exchange
such currency for the Required Currency. The costs and risks of any
such exchange, including without limitation the risks of delay and
exchange rate fluctuation, shall be borne by the Company, the Company
shall remain fully liable for any shortfall or delinquency in the
full amount of Required Currency then due and payable, and in no
circumstances shall the Trustee be liable therefor except in the case
of its negligence or willful misconduct.
SECTION 312. Extension of Interest Payment.
The Company shall have the right at any time, so long as the
Company is not in default in the payment of interest on the
Securities of any series hereunder, to extend interest payment
periods on all Securities of one or more series, or Tranches thereof,
if so specified as contemplated by Section 301 with respect to such
Securities and upon such terms as may be specified as contemplated by
Section 301 with respect to such Securities.
ARTICLE FOUR
Redemption of Securities
SECTION 401. Applicability of Article.
Securities of any series, or any Tranche thereof, which
are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as
contemplated by Section 301 for Securities of such series or Tranche)
in accordance with this Article.
SECTION 402. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or an Officer's Certificate. The Company
shall, at least 45 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee in writing of such Redemption Date and of the principal amount of
such Securities to be redeemed. In the case of any redemption of Securities
(a) prior to the expiration of any restriction on such redemption provided
in the terms of such Securities or elsewhere in this Indenture or (b)
pursuant to an election of the Company which is subject to a condition
specified in the terms of such Securities, the Company shall furnish the
Trustee with an Officer's Certificate evidencing compliance with such
restriction or condition.
SECTION 403. Selection of Securities to Be Redeemed.
If less than all the Securities of any series, or any Tranche thereof,
are to be redeemed, the particular Securities to be redeemed shall be
selected by the Security Registrar from the Outstanding Securities of such
series or Tranche not previously called for redemption, by such method as
shall be provided for any particular series or Tranche, or, in the absence
of any such provision, by such method of random selection as the Security
Registrar shall deem fair and appropriate and which may, in any case, provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of such series or Tranche or any integral
multiple thereof) of the principal amount of Securities of such series or
Tranche of a denomination larger than the minimum authorized denomination for
Securities of such series or Tranche; provided, however, that if, as
indicated in an Officer's Certificate, the Company shall have offered to
purchase all or any principal amount of the Securities then Outstanding of
any series, or any Tranche thereof, and less than all of such Securities as
to which such offer was made shall have been tendered to the Company for such
purchase, the Security Registrar, if so directed by Company Order, shall
select for redemption all or any principal amount of such Securities which
have not been so tendered.
The Security Registrar shall promptly notify the Company
and the Trustee in writing of the Securities selected for redemption
and, in the case of any Securities selected to be redeemed in part,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of Securities which has been
or is to be redeemed.
SECTION 404. Notice of Redemption.
Notice of redemption shall be given in the manner pro-
vided in Section 106 to the Holders of the Securities to be redeemed
not less than 30 nor more than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Securities of any series or
Tranche are to be redeemed, the identification of the particular
Securities to be redeemed and the portion of the principal amount
of any Security to be redeemed in part,
(d) that on the Redemption Date the Redemption Price, together
with accrued interest, if any, to the Redemption Date, will become due
and payable upon each such Security to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date,
(e) the place or places where such Securities are to
be surrendered for payment of the Redemption Price and accrued
interest, if any, unless it shall have been specified as
contemplated by Section 301 with respect to such Securities that
such surrender shall not be required,
(f) that the redemption is for a sinking or other
fund, if such is the case, and
(g) such other matters as the Company shall deem
desirable or appropriate.
Unless otherwise specified with respect to any Securities in
accordance with Section 301, with respect to any notice of redemption of
Securities at the election of the Company, unless, upon the giving of
such notice, such Securities shall be deemed to have been paid in
accordance with Section 701, such notice may state that such redemption
shall be conditional upon the receipt by the Paying Agent or Agents for
such Securities, on or prior to the date fixed for such redemption, of
money sufficient to pay the principal of and premium, if any, and
interest, if any, on such Securities and that if such money shall not
have been so received such notice shall be of no force or effect and the
Company shall not be required to redeem such Securities. In the event
that such notice of redemption contains such a condition and such money
is not so received, the redemption shall not be made and within a
reasonable time thereafter notice shall be given, in the manner in which
the notice of redemption was given, that such money was not so received
and such redemption was not required to be made, and the Paying Agent or
Agents for the Securities otherwise to have been redeemed shall
promptly return to the Holders thereof any of such Securities which
had been surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the election of
the Company, and any notice of non-satisfaction of a condition for
redemption as aforesaid, shall be given by the Company or, at the Company's
request, by the Security Registrar in the name and at the expense of the
Company. Notice of mandatory redemption of Securities shall be given by the
Security Registrar in the name and at the expense of the Company.
SECTION 405. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the
Securities or portions thereof so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price therein specified, and
from and after such date (unless, in the case of an unconditional notice of
redemption, the Company shall default in the payment of the Redemption
Price and accrued interest, if any) such Securities or portions thereof, if
interest-bearing, shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with such notice, such Security or
portion thereof shall be paid by the Company at the Redemption Price,
together with accrued interest, if any, to the Redemption Date; provided,
however, that no such surrender shall be a condition to such payment if so
specified as contemplated by Section 301 with respect to such Security; and
provided, further, that except as otherwise specified as contemplated by
Section 301 with respect to such Security, any installment of interest on
any Security the Stated Maturity of which installment is on or prior to the
Redemption Date shall be payable to the Holder of such Security, or one or
more Predecessor Securities, registered as such at the close of business on
the related Regular Record Date according to the terms of such Security and
subject to the provisions of Section 307.
SECTION 406. Securities Redeemed in Part.
Upon the surrender of any Security which is to be redeemed only in
part at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of
such Security, without service charge, a new Security or Securities of the
same series and Tranche, of any authorized denomination requested by such
Holder and of like tenor and in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the
Security so surrendered.
ARTICLE FIVE
Sinking Funds
SECTION 501. Applicability of Article.
The provisions of this Article shall be applicable to
any sinking fund for the retirement of the Securities of any series,
or any Tranche thereof, except as otherwise specified as contemplated
by Section 301 for Securities of such series or Tranche.
The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series, or any Tranche thereof,
is herein referred to as a "mandatory sinking fund payment", and any
payment in excess of such minimum amount provided for by the terms of
Securities of any series, or any Tranche thereof, is herein referred
to as an "optional sinking fund payment". If provided for by the
terms of Securities of any series, or any Tranche thereof, the cash
amount of any sinking fund payment may be subject to reduction as
provided in Section 502. Each sinking fund payment shall be applied
to the redemption of Securities of the series or Tranche in respect
of which it was made as provided for by the terms of such Securities.
SECTION 502. Satisfaction of Sinking Fund Payments with Securities.
The Company (a) may deliver to the Trustee Outstanding
Securities (other than any previously called for redemption) of a
series or Tranche in respect of which a mandatory sinking fund
payment is to be made and (b) may apply as a credit Securities of
such series or Tranche which have been (i) redeemed either at the
election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments
pursuant to the terms of such Securities or (ii) repurchased by the
Company in the open market, by tender offer or otherwise, in each
case in satisfaction of all or any part of such mandatory sinking
fund payment; provided, however, that no Securities shall be applied
in satisfaction of a mandatory sinking fund payment if such
Securities shall have been previously so applied. Securities so
applied shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of
such mandatory sinking fund payment shall be reduced accordingly.
SECTION 503. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment
date for the Securities of any series, or any Tranche thereof, the
Company shall deliver to the Trustee an Officer's Certificate
specifying:
(a) the amount of the next succeeding mandatory
sinking fund payment for such series or Tranche;
(b) the amount, if any, of the optional sinking fund
payment to be made together with such mandatory sinking fund
payment;
(c) the aggregate sinking fund payment;
(d) the portion, if any, of such aggregate sinking
fund payment which is to be satisfied by the payment of cash;
(e) the portion, if any, of such aggregate sinking fund payment
which is to be satisfied by delivering and crediting Securities of such
series or Tranche pursuant to Section 502 and stating the basis for such
credit and that such Securities have not previously been so credited, and
the Company shall also deliver to the Trustee any Securities to be so
delivered. If the Company shall not deliver such Officer's Certificate,
the next succeeding sinking fund payment for such series or Tranche shall
be made entirely in cash in the amount of the mandatory sinking fund
payment. Not less than 40 days before each such sinking fund payment date
the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 403 and cause notice
of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 404. Such notice
having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 405 and 406.
ARTICLE SIX
Covenants
SECTION 601. Payment of Principal, Premium and Interest.
The Company shall pay the principal of and premium, if
any, and interest, if any, on the Securities of each series in
accordance with the terms of such Securities and this Indenture.
SECTION 602. Maintenance of Office or Agency.
The Company shall maintain in each Place of Payment for the Securities
of each series, or any Tranche thereof, an office or agency where payment of
such Securities shall be made, where the registration of transfer or exchange
of such Securities may be effected and where notices and demands to or upon
the Company in respect of such Securities and this Indenture may be served.
The Company shall give prompt written notice to the Trustee of the location,
and any change in the location, of each such office or agency and prompt
notice to the Holders of any such change in the manner specified in Section
106. If at any time the Company shall fail to maintain any such required
office or agency in respect of Securities of any series, or any Tranche
thereof, or shall fail to furnish the Trustee with the address thereof,
payment of such Securities shall be made, registration of transfer or
exchange thereof may be effected and notices and demands in respect
thereof may be served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent for all such
purposes in any such event.
The Company may also from time to time designate one or more other
offices or agencies with respect to the Securities of one or more series,
or any Tranche thereof, for any or all of the foregoing purposes and may
from time to time rescind such designations; provided, however, that,
unless otherwise specified as contemplated by Section 301 with respect
to the Securities of such series or Tranche, no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency for such purposes in each Place of Payment
for such Securities in accordance with the requirements set forth above.
The Company shall give prompt written notice to the Trustee, and prompt
notice to the Holders in the manner specified in Section 106, of any such
designation or rescission and of any change in the location of any such
other office or agency.
Anything herein to the contrary notwithstanding, any
office or agency required by this Section may be maintained at an
office of the Company, in which event the Company shall perform all
functions to be performed at such office or agency.
SECTION 603. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to the Securities of any series, or any Tranche thereof, it shall,
on or before each due date of the principal of and premium, if any, and
interest, if any, on any of such Securities, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal and premium or interest so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as herein provided. The
Company shall promptly notify the Trustee of any failure by the Company
(or any other obligor on such Securities) to make any payment of principal
of or premium, if any, or interest, if any, on such Securities.
Whenever the Company shall have one or more Paying Agents for the
Securities of any series, or any Tranche thereof, it shall, on or before
each due date of the principal of and premium, if any, and interest, if
any, on such Securities, deposit with such Paying Agents sums sufficient
(without duplication) to pay the principal and premium or interest so
becoming due, such sums to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company shall promptly notify the Trustee of
any failure by it so to act.
The Company shall cause each Paying Agent for the Securities of
any series, or any Tranche thereof, other than the Company or the Trustee,
to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent shall:
(a) hold all sums held by it for the payment of the
principal of and premium, if any, or interest, if any, on such
Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure by the Company (or
any other obligor upon such Securities) to make any payment of principal
of or premium, if any, or interest, if any, on such Securities; and
(c) at any time during the continuance of any such
failure, upon the written request of the Trustee, forthwith pay
to the Trustee all sums so held in trust by such Paying Agent and
furnish to the Trustee such information as it possesses regarding
the names and addresses of the Persons entitled to such sums.
The Company may at any time pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in trust
by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held
by the Company or such Paying Agent and, if so stated in a Company
Order delivered to the Trustee, in accordance with the provisions of
Article Seven; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of and
premium, if any, or interest, if any, on any Security and remaining unclaimed
for two years after such principal and premium, if any, or interest, if any,
has become due and payable shall be paid to the Company on Company Request,
or, if then held by the Company, shall be discharged from such trust; and,
upon such payment or discharge, the Holder of such Security shall, as an
unsecured general creditor and not as a Holder of an Outstanding Security,
look only to the Company for payment of the amount so due and payable and
remaining unpaid, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment to the Company,
may at the expense of the Company cause to be mailed, on one occasion only,
notice to such Holder that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date
of such mailing, any unclaimed balance of such money then remaining will be
paid to the Company.
SECTION 604. Corporate Existence.
Subject to the rights of the Company under Article
Eleven, the Company shall do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence.
SECTION 605. Maintenance of Properties.
The Company shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) all its properties
used or useful in the conduct of its business to be maintained and kept
in good condition, repair and working order and shall cause (or, with
respect to property owned in common with others, make reasonable effort
to cause) to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as, in the judgment of the
Company, may be necessary so that the business carried on in connection
therewith may be properly conducted; provided, however, that nothing in
this Section shall prevent the Company from discontinuing, or causing the
discontinuance of, the operation and maintenance of any of its properties
if such discontinuance is, in the judgment of the Company, desirable in the
conduct of its business.
SECTION 606. Annual Officer's Certificate as to Compliance.
Not later than October 1 in each year, commencing October 1, 1996,
the Company shall deliver to the Trustee an Officer's Certificate which
need not comply with Section 102, executed by the principal executive
officer, the principal financial officer or the principal accounting
officer of the Company, as to such officer's knowledge of the Company's
compliance with all conditions and covenants under this Indenture, such
compliance to be determined without regard to any period of grace or
requirement of notice under this Indenture.
SECTION 607. Waiver of Certain Covenants.
The Company may omit in any particular instance to
comply with any term, provision or condition set forth in (a) Section
602 or any additional covenant or restriction specified with respect
to the Securities of any series, or any Tranche thereof, as
contemplated by Section 301 if before the time for such compliance
the Holders of at least a majority in aggregate principal amount of
the Outstanding Securities of all series and Tranches with respect to
which compliance with Section 602 or such additional covenant or
restriction is to be omitted, considered as one class, shall, by Act
of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition and
(b) Section 604, 605 or Article Eleven if before the time for such
compliance the Holders of at least a majority in principal amount of
Securities Outstanding under this Indenture shall, by Act of such
Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition; but, in the
case of (a) or (b), no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect
of any such term, provision or condition shall remain in full force
and effect.
ARTICLE SEVEN
Satisfaction and Discharge
SECTION 701. Satisfaction and Discharge of Securities.
Any Security or Securities, or any portion of the
principal amount thereof, shall be deemed to have been paid for all
purposes of this Indenture, and the entire indebtedness of the
Company in respect thereof shall be deemed to have been satisfied and
discharged, if there shall have been irrevocably deposited with the
Trustee or any Paying Agent (other than the Company), in trust:
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the
Maturity of such Securities or portions thereof, Eligible
Obligations, which shall not contain provisions permitting the
redemption or other prepayment thereof at the option of the
issuer thereof, the principal of and the interest on which when
due, without any regard to reinvestment thereof, will provide
moneys which, together with the money, if any, deposited with or
held by the Trustee or such Paying Agent, shall be sufficient, or
(c) a combination of (a) or (b) which shall be sufficient,
to pay when due the principal of and premium, if any, and interest,
if any, due and to become due on such Securities or portions thereof
on or prior to Maturity; provided, however, that in the case of the
provision for payment or redemption of less than all the Securities
of any series or Tranche, such Securities or portions thereof shall
have been selected by the Security Registrar as provided herein and,
in the case of a redemption, the notice requisite to the validity of
such redemption shall have been given or irrevocable authority shall
have been given by the Company to the Trustee to give such notice,
under arrangements satisfactory to the Trustee; and provided,
further, that the Company shall have delivered to the Trustee and
such Paying Agent:
(x) if such deposit shall have been made prior
to the Maturity of such Securities, a Company Order
stating that the money and Eligible Obligations
deposited in accordance with this Section shall be held
in trust, as provided in Section 703;
(y) if Eligible Obligations shall have been
deposited, an Opinion of Counsel that the obligations so
deposited constitute Eligible Obligations and do not
contain provisions permitting the redemption or other
prepayment at the option of the issuer thereof, and an
opinion of an independent public accountant of
nationally recognized standing, selected by the Company,
to the effect that the requirements set forth in clause
(b) above have been satisfied; and
(z) if such deposit shall have been made prior to the Maturity
of such Securities, an Officer's Certificate stating the Company's
intention that, upon delivery of such Officer's Certificate, its
indebtedness in respect of such Securities or portions thereof will
have been satisfied and discharged as contemplated in this Section.
Upon the deposit of money or Eligible Obligations, or both, in
accordance with this Section, together with the documents required by
clauses (x), (y) and (z) above, the Trustee shall, upon receipt of a
Company Request, acknowledge in writing that the Security or Securities
or portions thereof with respect to which such deposit was made are
deemed to have been paid for all purposes of this Indenture and that the
entire indebtedness of the Company in respect thereof has been satisfied
and discharged as contemplated in this Section. In the event that all of
the conditions set forth in the preceding paragraph shall have been
satisfied in respect of any Securities or portions thereof except that,
for any reason, the Officer's Certificate specified in clause (z) shall
not have been delivered, such Securities or portions thereof shall
nevertheless be deemed to have been paid for all purposes of this
Indenture, and the Holders of such Securities or portions thereof shall
nevertheless be no longer entitled to the benefits of this Indenture or
of any of the covenants of the Company under Article Six (except the
covenants contained in Sections 602, 603 and 604) or any other covenants
made in respect of such Securities or portions thereof as contemplated
by Section 301, but the indebtedness of the Company in respect of such
Securities or portions thereof shall not be deemed to have been
satisfied and discharged prior to Maturity for any other purpose, and
the Holders of such Securities or portions thereof shall continue to
be entitled to look to the Company for payment of the indebtedness
represented thereby; and, upon Company Request, the Trustee shall
acknowledge in writing that such Securities or portions thereof are
deemed to have been paid for all purposes of this Indenture.
If payment at Stated Maturity of less than all of the Securities
of any series, or any Tranche thereof, is to be provided for in the
manner and with the effect provided in this Section, the Security
Registrar shall select such Securities, or portions of principal amount
thereof, in the manner specified by Section 403 for selection for
redemption of less than all the Securities of a series or Tranche.
In the event that Securities which shall be deemed to
have been paid for purposes of this Indenture, and, if such is the
case, in respect of which the Company's indebtedness shall have been
satisfied and discharged, all as provided in this Section do not
mature and are not to be redeemed within the 60 day period commencing
with the date of the deposit of moneys or Eligible Obligations, as
aforesaid, the Company shall, as promptly as practicable, give a
notice, in the same manner as a notice of redemption with respect to
such Securities, to the Holders of such Securities to the effect that
such deposit has been made and the effect thereof.
Notwithstanding that any Securities shall be deemed to have been
paid for purposes of this Indenture, as aforesaid, the obligations of the
Company and the Trustee in respect of such Securities under Sections 304,
305, 306, 403, 404, 406, 503 (as to notice of redemption), 602, 603, 907,
909, 910 and 915 and this Article Seven shall survive.
The Company shall pay, and shall indemnify the Trustee or any
Paying Agent with which Eligible Obligations shall have been deposited
as provided in this Section against, any tax, fee or other charge
imposed on or assessed against such Eligible Obligations or the principal
or interest received in respect of such Eligible Obligations, including,
but not limited to, any such tax payable by any entity deemed, for tax
purposes, to have been created as a result of such deposit.
Anything herein to the contrary notwithstanding, (a) if,at any time
after a Security would be deemed to have been paid for purposes of this
Indenture, and, if such is the case, the Company's indebtedness in respect
thereof would be deemed to have been satisfied or discharged, pursuant to
this Section (without regard to the provisions of this paragraph), the
Trustee or any Paying Agent, as the case may be, shall be required to
return the money or Eligible Obligations, or combination thereof, deposited
with it as aforesaid to the Company or its representative under any
applicable Federal or State bankruptcy, insolvency or other similar law,
such Security shall thereupon be deemed retroactively not to have been
paid and any satisfaction and discharge of the Company's indebtedness
in respect thereof shall retroactively be deemed not to have been
effected, and such Security shall be deemed to remain Outstanding and
(b) any satisfaction and discharge of the Company's indebtedness in
respect of any Security shall be subject to the provisions of the last
paragraph of Section 603.
SECTION 702. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as hereinafter expressly provided), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) no Securities remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company;
provided, however, that if, in accordance with the last paragraph of Section
701, any Security, previously deemed to have been paid for purposes of this
Indenture, shall be deemed retroactively not to have been so paid, this
Indenture shall thereupon be deemed retroactively not to have been
satisfied and discharged, as aforesaid, and to remain in full force and
effect, and the Company shall execute and deliver such instruments as the
Trustee shall reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of the Company and the Trustee under Sections 304,
305, 306, 403, 404, 406, 503 (as to notice of redemption), 602, 603, 907,
909, 910 and 915 and this Article Seven shall survive.
Upon satisfaction and discharge of this Indenture as
provided in this Section, the Trustee shall assign, transfer and turn
over to the Company, subject to the lien provided by Section 907, any
and all money, securities and other property then held by the Trustee
for the benefit of the Holders of the Securities other than money and
Eligible Obligations held by the Trustee pursuant to Section 703.
SECTION 703. Application of Trust Money.
Neither the Eligible Obligations nor the money deposited
pursuant to Section 701, nor the principal or interest payments on
any such Eligible Obligations, shall be withdrawn or used for any
purpose other than, and such Eligible Obligations and money deposited
and the principal and interest payments on any such Eligible
Obligations shall be held in trust for, the payment of the principal
of and premium, if any, and interest, if any, on the Securities or
portions of principal amount thereof in respect of which such deposit
was made, all subject, however, to the provisions of Section 603;
provided, however, that, so long as there shall not have occurred and
be continuing an Event of Default, any cash received from such
principal or interest payments on such Eligible Obligations, if not
then needed for such purpose, shall, to the extent practicable, be
invested in Eligible Obligations of the type described in clause (b)
in the first paragraph of Section 701 maturing at such times and in
such amounts as shall be sufficient to pay when due the principal of
and premium, if any, and interest, if any, due and to become due on
such Securities or portions thereof on and prior to the Maturity
thereof, and interest earned from such reinvestment shall be paid
over to the Company as received, free and clear of any trust, lien or
pledge under this Indenture except the lien provided by Section 907;
and provided, further, that, so long as there shall not have occurred
and be continuing an Event of Default, any moneys held in accordance
with this Section on the Maturity of all such Securities in excess of
the amount required to pay the principal of and premium, if any, and
interest, if any, then due on such Securities shall be paid over to
the Company free and clear of any trust, lien or pledge under this
Indenture except the lien provided by Section 907; and provided,
further, that if an Event of Default shall have occurred and be
continuing, moneys to be paid over to the Company pursuant to this
Section shall be held until such Event of Default shall have been
waived or cured.
ARTICLE EIGHT
Events of Default; Remedies
SECTION 801. Events of Default.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events:
(a) failure to pay interest, if any, on any Security
of such series within 60 days after the same becomes due and pay-
able (whether or not payment is prohibited by the provisions of
Article Fifteen hereof); provided, however, that a valid
extension of the interest payment period by the Company as
contemplated in Section 312 of this Indenture shall not
constitute a failure to pay interest for this purpose; or
(b) failure to pay the principal of or premium, if
any, on any Security of such series within three (3) Business
Days after its Maturity (whether or not payment is prohibited by
the provisions of Article Fifteen hereof); or
(c) failure to perform, or breach of, any covenant
or warranty of the Company in this Indenture (other than a
covenant or warranty a default in the performance of which or
breach of which is elsewhere in this Section specifically dealt
with or which has expressly been included in this Indenture
solely for the benefit of one or more series of Securities other
than such series) for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the
Trustee, or to the Company and the Trustee by the Holders of at
least 33% in principal amount of the Outstanding Securities of
such series, a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder, unless the Trustee, or the Trustee
and the Holders of a principal amount of Securities of such
series not less than the principal amount of Securities the
Holders of which gave such notice, as the case may be, shall
agree in writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the Trustee
and the Holders of such principal amount of Securities of such
series, as the case may be, shall be deemed to have agreed to an
extension of such period if corrective action is initiated by the
Company within such period and is being diligently pursued; or
(d) the entry by a court having jurisdiction in the
premises of (1) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or (2) a decree or order adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition
by one or more Persons other than the Company seeking reorgani-
zation, arrangement, adjustment or composition of or in respect
of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official for the Company or for any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and any such decree or order for
relief or any such other decree or order shall have remained un-
stayed and in effect for a period of 90 consecutive days; or
(e) the commencement by the Company of a voluntary
case or proceeding under any applicable Federal or State bank-
ruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in a case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorga-
nization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official
of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts
generally as they become due, or the authorization of such action
by the Board of Directors; or
(f) any other Event of Default specified with re-
spect to Securities of such series.
SECTION 802. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default shall have occurred and be
continuing with respect to Securities of any series at the time
Outstanding, then in every such case the Trustee or the Holders of
not less than 33% in principal amount of the Outstanding Securities
of such series may declare the principal amount (or, if any of the
Securities of such series are Discount Securities, such portion of
the principal amount of such Securities as may be specified in the
terms thereof as contemplated by Section 301) of all of the
Securities of such series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by
Holders), and upon receipt by the Company of notice of such
declaration such principal amount (or specified amount) shall become
immediately due and payable (provided that the payment of principal
of such Securities shall remain subordinated to the extent provided
in Article Fifteen hereof); provided, however, that if an Event of
Default shall have occurred and be continuing with respect to more
than one series of Securities, the Trustee or the Holders of not less
than 33% in aggregate principal amount of the Outstanding Securities
of all such series, considered as one class (and not the Holders of
the Securities of any one of such series), may make such declaration
of acceleration.
At any time after such a declaration of acceleration
with respect to Securities of any series shall have been made and
before a judgment or decree for payment of the money due shall have
been obtained by the Trustee as hereinafter in this Article provided,
the Event or Events of Default giving rise to such declaration of
acceleration shall, without further act, be deemed to have been
waived, and such declaration and its consequences shall, without
further act, be deemed to have been rescinded and annulled, if
(a) the Company shall have paid or deposited with
the Trustee a sum sufficient to pay
(1) all overdue interest on all Securities
of such series;
(2) the principal of and premium, if any, on
any Securities of such series which have become due
otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed
therefor in such Securities;
(3) to the extent that payment of such
interest is lawful, interest upon overdue interest at
the rate or rates prescribed therefor in such
Securities;
(4) all amounts due to the Trustee under
Section 907;
and
(b) any other Event or Events of Default with respect
to Securities of such series, other than the non-payment of the
principal of Securities of such series which shall have become
due solely by such declaration of acceleration, shall have been
cured or waived as provided in Section 813.
No such rescission shall affect any subsequent Event of Default or
impair any right consequent thereon.
SECTION 803. Collection of Indebtedness and Suits for Enforcement by
Trustee.
If an Event of Default described in clause (a) or (b) of
Section 801 shall have occurred and be continuing, the Company shall,
upon demand of the Trustee, pay to it, for the benefit of the Holders
of the Securities of the series with respect to which such Event of
Default shall have occurred, the whole amount then due and payable on
such Securities for principal and premium, if any, and interest, if
any, and, to the extent permitted by law, interest on premium, if
any, and on any overdue principal and interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover any amounts due
to the Trustee under Section 907.
If the Company shall fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an
express trust, may institute a judicial proceeding for the collection
of the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same against the Company
or any other obligor upon such Securities and collect the moneys ad-
judged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securi-
ties, wherever situated.
If an Event of Default with respect to Securities of any
series shall have occurred and be continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights
of the Holders of Securities of such series by such appropriate
judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other
proper remedy.
SECTION 804. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or
any other obligor upon the Securities or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespec-
tive of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the
Company for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or other-
wise,
(a) to file and prove a claim for the whole amount
of principal, premium, if any, and interest, if any, owing and
unpaid in respect of the Securities and to file such other papers
or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for amounts due to
the Trustee under Section 907) and of the Holders allowed in such
judicial proceeding, and
(b) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, seques-
trator or other similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any
amounts due it under Section 907.
Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim
of any Holder in any such proceeding.
SECTION 805. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee without
the possession of any of the Securities or the production thereof in
any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders in respect of which such
judgment has been recovered.
SECTION 806. Application of Money Collected.
Subject to the provisions of Article Fifteen, any money
collected by the Trustee pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or
premium, if any, or interest, if any, upon presentation of the
Securities in respect of which or for the benefit of which such money
shall have been collected and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee
under Section 907;
Second: To the payment of the amounts then due and un-
paid upon the Securities for principal of and premium, if any,
and interest, if any, in respect of which or for the benefit of
which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable
on such Securities for principal, premium, if any, and interest,
if any, respectively; and
Third: To the Company.
SECTION 807. Limitation on Suits.
No Holder shall have any right to institute any proceed-
ing, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(a) such Holder shall have previously given written
notice to the Trustee of a continuing Event of Default with
respect to the Securities of such series;
(b) the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of all series in
respect of which an Event of Default shall have occurred and be
continuing, considered as one class, shall have made written
request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity shall have failed to
institute any such proceeding; and
(e) no direction inconsistent with such written request shall
have been given to the Trustee during such 60-day period by the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of all series in respect of which an Event of Default shall
have occurred and be continuing, considered as one class;
it being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other of such Holders or to obtain or to seek
to obtain priority or preference over any other of such Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all of such Holders.
SECTION 808. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and premium, if
any, and (subject to Section 307 and 312) interest, if any, on such
Security on the Stated Maturity or Maturities expressed in such Security
(or, in the case of redemption, on the Redemption Date) and to institute
suit for the enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.
SECTION 809. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding
shall have been discontinued or abandoned for any reason, or shall
have been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such
proceeding, the Company, and Trustee and such Holder shall be restored
severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and such Holder shall
continue as though no such proceeding had been instituted.
SECTION 810. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to
the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 811. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder to
exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the Holders may
be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 812. Control by Holders of Securities.
If an Event of Default shall have occurred and be continuing
in respect of a series of Securities, the Holders of a majority in
principal amount of the Outstanding Securities of such series shall
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred on the Trustee, with respect to the Securities
of such series; provided, however, that if an Event of Default shall
have occurred and be continuing with respect to more than one series of
Securities, the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all such series, considered as one class,
shall have the right to make such direction, and not the Holders of the
Securities of any one of such series; and provided, further, that
(a) such direction shall not be in conflict with any
rule of law or with this Indenture, and could not involve the
Trustee in personal liability in circumstances where indemnity
would not, in the Trustee's sole discretion, be adequate, and
(b) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
SECTION 813. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount
of the Outstanding Securities of any series may on behalf of the
Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a default
(a) in the payment of the principal of or premium,
if any, or interest, if any, on any Security of such series, or
(b) in respect of a covenant or provision hereof which under
Section 1202 cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist,
and any and all Events of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 814. Undertaking for Costs.
The Company and the Trustee agree, and each Holder by
his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the
Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to
pay the costs of such suit, and that such court may in its discretion
assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any
suit instituted by the Company, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in aggregate principal amount
of the Outstanding Securities of all series in respect of which such
suit may be brought, considered as one class, or to any suit instituted
by any Holder for the enforcement of the payment of the principal of or
premium, if any, or interest, if any, on any Security on or after the
Stated Maturity or Maturities expressed in such Security (or, in the case
of redemption, on or after the Redemption Date).
SECTION 815. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will
not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
ARTICLE NINE
The Trustee
SECTION 901. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of
Default with respect to Securities of any series,
(1) the Trustee undertakes to perform, with
respect to Securities of such series, such duties and
only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may, with respect to Securities of such series, conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default with respect to Securities of any
series shall have occurred and be continuing, the Trustee shall exercise,
with respect to Securities of such series, such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct, except that
(1) this subsection shall not be construed
to limit the effect of subsection (a) of this Section;
(2) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities of any one or
more series, as provided herein, relating to the time, method
and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture with respect to the Securities
of such series; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(d) Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section.
SECTION 902. Notice of Defaults.
The Trustee shall give notice of any default hereunder with
respect to the Securities of any series to the Holders of Securities
of such series in the manner and to the extent required to do so by the
Trust Indenture Act, unless such default shall have been cured or waived;
provided, however, that in the case of any default of the character
specified in Section 801(c), no such notice to Holders shall be given
until at least 75 days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which is, or after
notice or lapse of time, or both, would become, an Event of Default.
SECTION 903. Certain Rights of Trustee.
Subject to the provisions of Section 901 and to the
applicable provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order,
or as otherwise expressly provided herein, and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any Holder pursuant to this Indenture, unless such Holder
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall (subject to applicable legal requirements) be
entitled to examine, during normal business hours, the books, records and
premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder; and
(h) except as otherwise provided in Section 801, the
Trustee shall not be charged with knowledge of any Event of
Default with respect to the Securities of any series for which it
is acting as Trustee unless either (1) a Responsible Officer of
the Trustee shall have actual knowledge of the Event of Default
or (2) written notice of such Event of Default shall have been
given to the Trustee by the Company, any other obligor on such
Securities or by any Holder of such Securities.
SECTION 904. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements
of the Company, and neither the Trustee nor any Authenticating Agent
assumes responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of
the Securities. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
SECTION 905. May Hold Securities.
Each of the Trustee, any Authenticating Agent, any Paying Agent,
any Security Registrar or any other agent of the Company or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities and, subject to Sections 908 and 913, may otherwise deal with
the Company with the same rights it would have if it were not the Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 906. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds, except to the extent required by law. The
Trustee shall be under no liability for interest on or investment of any
money received by it hereunder except as expressly provided herein or
otherwise agreed with, and for the sole benefit of, the Company.
SECTION 907. Compensation and Reimbursement.
The Company shall
(a) pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein,
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by
the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except to the extent
that any such expense, disbursement or advance may be
attributable to its negligence, wilful misconduct or bad faith; and
(c) indemnify the Trustee and hold it harmless from and against, any
loss, liability or expense reasonably incurred by it arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder or the performance of its duties hereunder, including the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence, wilful misconduct or bad
faith.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such other
than property and funds held in trust under Section 703 (except as
otherwise provided in Section 703). "Trustee" for purposes of this Section
shall include any predecessor Trustee; provided, however, that the
negligence, wilful misconduct or bad faith of any Trustee hereunder shall
not affect the rights of any other Trustee hereunder.
SECTION 908. Disqualification; Conflicting Interests.
If the Trustee shall have or acquire any conflicting interest
within the meaning of the Trust Indenture Act, it shall either eliminate
such conflicting interest or resign to the extent, in the manner and with
the effect, and subject to the conditions, provided in the Trust Indenture
Act and this Indenture. For purposes of Section 310(b)(1) of the Trust
Indenture Act and to the extent permitted thereby, the Trustee, in its
capacity as trustee in respect of the Securities of any series, shall not
be deemed to have a conflicting interest arising from its capacity as
trustee in respect of the Securities of any other series.
SECTION 909. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which
shall be
(a) a Corporation organized and doing business under the laws of the
United States, any State or Territory thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or State authority, or
(b) if and to the extent permitted by the Commission by rule,
regulation or order upon application, a Corporation or other Person
organized and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least $50,000,000 or the Dollar
equivalent of the applicable foreign currency and subject to supervision
or examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or
examination applicable to United States institutional trustees,
and, in either case, qualified and eligible under this Article and the Trust
Indenture Act. If such Corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of such supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 910. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 911.
(b) The Trustee may resign at any time with respect
to the Securities of one or more series by giving written notice
thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 911 shall not have been
delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court
of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(c) The Trustee may be removed at any time with
respect to the Securities of any series by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such
series delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 908
after written request therefor by the Company or by any
Holder who has been a bona fide Holder for at least six months, or
(2) the Trustee shall cease to be eligible under
Section 909 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution may remove
the Trustee with respect to all Securities or (y) subject to Section 814,
any Holder who has been a bona fide Holder for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any
cause (other than as contemplated in clause (y) in subsection (d) of this
Section), with respect to the Securities of one or more series, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee
or Trustees with respect to the Securities of that or those series
(it being understood that any such successor Trustee may be appointed with
respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of
any particular series) and shall comply with the applicable requirements
of Section 911. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
of such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of
such appointment in accordance with the applicable requirements of Section
911, become the successor Trustee with respect to the Securities of such
series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and
accepted appointment in the manner required by Section 911, any Holder
who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of
such series.
(f) So long as no event which is, or after notice or lapse of
time, or both, would become, an Event of Default shall have occurred
and be continuing, and except with respect to a Trustee appointed by
Act of the Holders of a majority in principal amount of the Outstanding
Securities pursuant to subsection (e) of this Section, if the Company
shall have delivered to the Trustee (i) a Board Resolution appointing
a successor Trustee, effective as of a date specified therein, and
(ii) an instrument of acceptance of such appointment, effective as of
such date, by such successor Trustee in accordance with Section 911,
the Trustee shall be deemed to have resigned as contemplated in
subsection (b) of this Section, the successor Trustee shall be deemed
to have been appointed by the Company pursuant to subsection (e) of
this Section and such appointment shall be deemed to have been accepted
as contemplated in Section 911, all as of such date, and all other
provisions of this Section and Section 911 shall be applicable to such
resignation, appointment and acceptance except to the extent inconsistent
with this subsection (f).
(g) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of
any series by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders of Securities of such series as their
names and addresses appear in the Security Register. Each notice shall
include the name of the successor Trustee with respect to the Securities
of such series and the address of its corporate trust office.
SECTION 911. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of all series, every such
successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any
further act, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on the request of the Company
or the successor Trustee, such retiring Trustee shall, upon payment of
all sums owed to it, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to
the Securities of such series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring
Trustee and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each
such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee,
such retiring Trustee, upon payment of all sums owed to it, shall duly
assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any instruments which fully vest in and confirm to such
successor Trustee all such rights, powers and trusts referred to in
subsection (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified
and eligible under this Article.
SECTION 912. Merger, Conversion, Consolidation or Succession to Business.
Any Corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any Corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party,
or any Corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such Corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper
or any further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.
SECTION 913. Preferential Collection of Claims Against Company.
If the Trustee shall be or become a creditor of the
Company or any other obligor upon the Securities (other than by
reason of a relationship described in Section 311(b) of the Trust
Indenture Act), the Trustee shall be subject to any and all
applicable provisions of the Trust Indenture Act regarding the
collection of claims against the Company or such other obligor. For
purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction
in which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company or such obligor for the purpose of financing the
purchase, processing, manufacturing, shipment, storage or sale of goods,
wares or merchandise and which is secured by documents evidencing title
to, possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company or such obligor arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange, acceptance
or obligation.
SECTION 914. Co-trustees and Separate Trustees.
At any time or times, for the purpose of meeting the legal
requirements of any applicable jurisdiction, the Company and the Trustee
shall have power to appoint, and, upon the written request of the Trustee
or of the Holders of at least 33% in principal amount of the Securities
then Outstanding, the Company shall for such purpose join with the
Trustee in the execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by the
Trustee either to act as co-trustee, jointly with the Trustee, or to act
as separate trustee, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons,
in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section.
If the Company does not join in such appointment within 15 days after the
receipt by it of a request so to do, or if an Event of Default shall
have occurred and be continuing, the Trustee alone shall have power
to make such appointment.
Should any written instrument or instruments from the Company be
required by any co-trustee or separate trustee so appointed to more fully
confirm to such co-trustee or separate trustee such property, title, right
or power, any and all such instruments shall, on request, be executed,
acknowledged and delivered by the Company.
Every co-trustee or separate trustee shall, to the
extent permitted by law, but to such extent only, be appointed
subject to the following conditions:
(a) the Securities shall be authenticated and delivered,
and all rights, powers, duties and obligations hereunder in respect
of the custody of securities, cash and other personal property held by,
or required to be deposited or pledged with, the Trustee hereunder,
shall be exercised solely, by the Trustee;
(b) the rights, powers, duties and obligations hereby conferred
or imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed
either by the Trustee or by the Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of
any jurisdiction in which any particular act is to be performed, the Trustee
shall be incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee;
(c) the Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Company, may accept the resignation of or
remove any co-trustee or separate trustee appointed under this Section, and,
if an Event of Default shall have occurred and be continuing, the Trustee
shall have power to accept the resignation of, or remove, any such co-
trustee or separate trustee without the concurrence of the Company. Upon
the written request of the Trustee, the Company shall join with the Trustee
in the execution and delivery of all instruments and agreements necessary or
proper to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be appointed in
the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder
shall be personally liable by reason of any act or omission of
the Trustee, or any other such trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
SECTION 915. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents
with respect to the Securities of one or more series, or any Tranche
thereof, which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series or Tranche issued upon original
issuance, exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent shall be acceptable to the Company and shall at all times be a
Corporation organized and doing business under the laws of the United
States, any State or Territory thereof or the District of Columbia or
the Commonwealth of Puerto Rico, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not
less than $50,000,000 and subject to supervision or examination by
Federal or State authority. If such Authenticating Agent publishes
reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent
shall resign immediately in the manner and with the effect specified in
this Section.
Any Corporation into which an Authenticating Agent may
be merged or converted or with which it may be consolidated, or any
Corporation resulting from any merger, conversion or consolidation to
which such Authenticating Agent shall be a party, or any Corporation
succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent,
provided such Corporation shall be otherwise eligible under this Sec-
tion, without the execution or filing of any paper or any further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The
Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating Agent
and to the Company. Upon receiving such a notice of resignation or
upon such a termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of
this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company. Any successor
Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services under this Section,
and the Trustee shall be entitled to be reimbursed for such payments, in
accordance with, and subject to the provisions of Section 907.
The provisions of Sections 308, 904 and 905 shall be ap-
plicable to each Authenticating Agent.
If an appointment with respect to the Securities of one or more
series, or any Tranche thereof, shall be made pursuant to this Section, the
Securities of such series or Tranche may have endorsed thereon, in addition
to the Trustee's certificate of authentication, an alternate certificate of
authentication substantially in the following form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
The Chase Manhattan Bank
(National Association) As Trustee
By:
As Authenticating Agent
By:
Authorized Signatory
If all of the Securities of a series may not be
originally issued at one time, and if the Trustee does not have an
office capable of authenticating Securities upon original issuance
located in a Place of Payment where the Company wishes to have
Securities of such series authenticated upon original issuance, the
Trustee, if so requested by the Company in writing (which writing
need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel), shall appoint, in accordance with this Section
and in accordance with such procedures as shall be acceptable to the
Trustee, an Authenticating Agent having an office in a Place of
Payment designated by the Company with respect to such series of
Securities.
ARTICLE TEN
Holders' Lists and Reports by Trustee and Company
SECTION 1001. Lists of Holders.
Semiannually, not later than March 1 and September 1 in
each year, commencing September 1, 1995, and at such other times as
the Trustee may request in writing, the Company shall furnish or
cause to be furnished to the Trustee information as to the names and
addresses of the Holders, and the Trustee shall preserve such
information and similar information received by it in any other
capacity and afford to the Holders access to information so preserved
by it, all to such extent, if any, and in such manner as shall be
required by the Trust Indenture Act; provided, however, that no such
list need be furnished so long as the Trustee shall be the Security
Registrar.
SECTION 1002. Reports by Trustee and Company.
Not later than June 1 in each year, commencing
June 1, 1996, the Trustee shall transmit to the Holders and the
Commission a report, dated as of the next preceding April 1, with
respect to any events and other matters described in Section 313(a)
of the Trust Indenture Act, in such manner and to the extent required
by the Trust Indenture Act. The Trustee shall transmit to the
Holders and the Commission, and the Company shall file with the
Trustee (within 30 days after filing with the Commission in the case
of reports which pursuant to the Trust Indenture Act must be filed
with the Commission and furnished to the Trustee) and transmit to the
Holders, such other information, reports and other documents, if any,
at such times and in such manner, as shall be required by the Trust
Indenture Act.
ARTICLE ELEVEN
Consolidation, Merger, Conveyance or Other Transfer
SECTION 1101. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
Corporation, or convey or otherwise transfer or lease its properties
and assets substantially as an entirety to any Person, unless
(a) the Corporation formed by such consolidation or
into which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
Person organized and existing under the laws of the United
States, any State thereof or the District of Columbia, and shall
expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and
premium, if any, and interest, if any, on all Outstanding
Securities and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such trans-
action and treating any indebtedness for borrowed money which
becomes an obligation of the Company as a result of such
transaction as having been incurred by the Company at the time of
such transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee
an Officer's Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, conveyance, or other transfer or
lease and such supplemental indenture comply with this Article
and that all conditions precedent herein provided for relating to
such transactions have been complied with.
SECTION 1102. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by
the Company into any other Corporation or any conveyance, or other
transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 1101, the
successor Corporation formed by such consolidation or into which the
Company is merged or the Person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as
the Company herein, and thereafter, except in the case of a lease,
the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities Outstanding
hereunder.
ARTICLE TWELVE
Supplemental Indentures
SECTION 1201. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company and the
Trustee, at any time and from time to time, may enter into one or
more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities, all as
provided in Article Eleven; or
(b) to add one or more covenants of the Company or
other provisions for the benefit of all Holders or for the
benefit of the Holders of, or to remain in effect only so long as
there shall be Outstanding, Securities of one or more specified
series, or one or more specified Tranches thereof, or to
surrender any right or power herein conferred upon the Company; or
(c) to add any additional Events of Default with respect
to all or any series of Securities Outstanding hereunder; or
(d) to change or eliminate any provision of this In-
denture or to add any new provision to this Indenture; provided,
however, that if such change, elimination or addition shall
adversely affect the interests of the Holders of Securities of
any series or Tranche Outstanding on the date of such indenture
supplemental hereto in any material respect, such change,
elimination or addition shall become effective (i) with respect
to such series or Tranche only pursuant to the provisions of
Section 1202 hereof or (ii) when no Security of such series or
Tranche remains Outstanding; or
(e) to provide collateral security for all but not
part of the Securities; or
(f) to establish the form or terms of Securities of
any series or Tranche as contemplated by Sections 201 and 301; or
(g) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if
any, thereon and for the procedures for the registration, exchange and
replacement thereof and for the giving of notice to, and the solicitation
of the vote or consent of, the holders thereof, and for any and all other
matters incidental thereto; or
(h) to evidence and provide for the acceptance of
appointment hereunder by a separate or successor Trustee with re-
spect to the Securities of one or more series and to add to or
change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 911(b); or
(i) to provide for the procedures required to permit the Company
to utilize, at its option, a non-certificated system of registration for
all, or any series or Tranche of, the Securities; or
(j) to change any place or places where (1) the principal of and
premium, if any, and interest, if any, on all or any series of Securities,
or any Tranche thereof, shall be payable, (2) all or any series of
Securities, or any Tranche thereof, may be surrendered for registration
of transfer, (3) all or any series of Securities, or any Tranche thereof,
may be surrendered for exchange and (4) notices and demands to or upon
the Company in respect of all or any series of Securities, or any
Tranche thereof, and this Indenture may be served; or
(k) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other changes to the provisions hereof or to add
other provisions with respect to matters or questions arising under this
Indenture, provided that such other changes or additions shall not
adversely affect the interests of the Holders of Securities of any series
or Tranche in any material respect.
Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the execution and delivery
of this Indenture or at any time thereafter shall be amended and
(x) if any such amendment shall require one
or more changes to any provisions hereof or the
inclusion herein of any additional provisions, or shall
by operation of law be deemed to effect such changes or
incorporate such provisions by reference or otherwise,
this Indenture shall be deemed to have been amended so
as to conform to such amendment to the Trust Indenture
Act, and the Company and the Trustee may, without the
consent of any Holders, enter into an indenture
supplemental hereto to effect or evidence such changes
or additional provisions; or
(y) if any such amendment shall permit one
or more changes to, or the elimination of, any
provisions hereof which, at the date of the execution
and delivery hereof or at any time thereafter, are
required by the Trust Indenture Act to be contained
herein, this Indenture shall be deemed to have been
amended to effect such changes or elimination, and the
Company and the Trustee may, without the consent of any
Holders, enter into an indenture supplemental hereto to
evidence such amendment hereof.
SECTION 1202. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of all
series then Outstanding under this Indenture, considered as one
class, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture;
provided, however, that if there shall be Securities of more than one
series Outstanding hereunder and if a proposed supplemental indenture
shall directly affect the rights of the Holders of Securities of one
or more, but less than all, of such series, then the consent only of
the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all series so directly affected, considered
as one class, shall be required; and provided, further, that if the
Securities of any series shall have been issued in more than one
Tranche and if the proposed supplemental indenture shall directly
affect the rights of the Holders of Securities of one or more, but
less than all, of such Tranches, then the consent only of the Holders
of a majority in aggregate principal amount of the Outstanding
Securities of all Tranches so directly affected, considered as one
class, shall be required; and provided, further, that no such
supplemental indenture shall:
(a) change the Stated Maturity of the principal of,
or any installment of principal of or interest on (except as
provided in Section 312 hereof), any Security, or reduce the
principal amount thereof or the rate of interest thereon (or the
amount of any installment of interest thereon) or change the
method of calculating such rate or reduce any premium payable
upon the redemption thereof, or reduce the amount of the
principal of a Discount Security that would be due and payable
upon a declaration of acceleration of the Maturity thereof
pursuant to Section 802, or change the coin or currency (or other
property), in which any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity
of any Security (or, in the case of redemption, on or after the
Redemption Date), without, in any such case, the consent of the
Holder of such Security, or
(b) reduce the percentage in principal amount of the
Outstanding Securities of any series or any Tranche thereof, the
consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with any provision of this
Indenture or of any default hereunder and its consequences, or
reduce the requirements of Section 1304 for quorum or voting,
without, in any such case, the consent of the Holders of each
Outstanding Security of such series or Tranche, or
(c) modify any of the provisions of this Section,
Section 607 or Section 813 with respect to the Securities of any
series, or any Tranche thereof, or except to increase the
percentages in principal amount referred to in this Section or
such other Sections or to provide that other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the
consent of any Holder with respect to changes in the references
to "the Trustee" and concomitant changes in this Section, or the
deletion of this proviso, in accordance with the requirements of
Sections 911(b) and 1201(h).
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly
been included solely for the benefit of one or more particular series
of Securities, or of one or more Tranches thereof, or which modifies
the rights of the Holders of Securities of such series or Tranches
with respect to such covenant or other provision, shall be deemed not
to affect the rights under this Indenture of the Holders of
Securities of any other series or Tranche.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof. A waiver by a Holder of such Holder's
right to consent under this Section shall be deemed to be a consent
of such Holder.
SECTION 1203. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the modi-
fications thereby of the trusts created by this Indenture, the Trus-
tee shall be entitled to receive, and (subject to Section 901) shall
be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obli-
gated to, enter into any such supplemental indenture which affects
the Trustee's own rights, duties, immunities or liabilities under
this Indenture or otherwise.
SECTION 1204. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under
this Article this Indenture shall be modified in accordance there-
with, and such supplemental indenture shall form a part of this In-
denture for all purposes; and every Holder of Securities theretofore
or thereafter authenticated and delivered hereunder shall be bound
thereby. Any supplemental indenture permitted by this Article may
restate this Indenture in its entirety, and, upon the execution and
delivery thereof, any such restatement shall supersede this Indenture
as theretofore in effect for all purposes.
SECTION 1205. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture Act
as then in effect.
SECTION 1206. Reference in Securities to Supplemental Indentures.
Securities of any series, or any Tranche thereof, authenticated
and delivered after the execution of any supplemental indenture pursuant
to this Article may, and shall if required by the Trustee, bear a notation
in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities
of any series, or any Tranche thereof, so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered
by the Trustee in exchange for Outstanding Securities of such series or
Tranche.
SECTION 1207. Modification Without Supplemental Indenture.
If the terms of any particular series of Securities
shall have been established in a Board Resolution or an Officer's
Certificate pursuant to a Board Resolution as contemplated by Section
301, and not in an indenture supplemental hereto, additions to,
changes in or the elimination of any of such terms may be effected by
means of a supplemental Board Resolution or Officer's Certificate, as
the case may be, delivered to, and accepted by, the Trustee;
provided, however, that such supplemental Board Resolution or
Officer's Certificate shall not be accepted by the Trustee or
otherwise be effective unless all conditions set forth in this
Indenture which would be required to be satisfied if such additions,
changes or elimination were contained in a supplemental indenture
shall have been appropriately satisfied. Upon the acceptance thereof
by the Trustee, any such supplemental Board Resolution or Officer's
Certificate shall be deemed to be a "supplemental indenture" for
purposes of Section 1204 and 1206.
ARTICLE THIRTEEN
Meetings of Holders; Action Without Meeting
SECTION 1301. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of one or more, or
all, series, or any Tranche or Tranches thereof, may be called at any
time and from time to time pursuant to this Article to make, give or
take any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be made, given
or taken by Holders of Securities of such series or Tranches.
SECTION 1302. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of one or more, or all, series, or any Tranche or Tranches
thereof, for any purpose specified in Section 1301, to be held at
such time and at such place in the Borough of Manhattan, The City of
New York, as the Trustee shall determine, or, with the approval of the
Company, at any other place. Notice of every such meeting, setting
forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 106, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.
(b) If the Trustee shall have been requested to call
a meeting of the Holders of Securities of one or more, or all,
series, or any Tranche or Tranches thereof, by the Company or by
the Holders of 33% in aggregate principal amount of all of such
series and Tranches, considered as one class, for any purpose
specified in Section 1301, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting,
and the Trustee shall not have given the notice of such meeting
within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided
herein, then the Company or the Holders of Securities of such
series and Tranches in the amount above specified, as the case
may be, may determine the time and the place in the Borough of
Manhattan, The City of New York, or in such other place as shall
be determined or approved by the Company, for such meeting and
may call such meeting for such purposes by giving notice thereof
as provided in subsection (a) of this Section.
(c) Any meeting of Holders of Securities of one or
more, or all, series, or any Tranche or Tranches thereof, shall
be valid without notice if the Holders of all Outstanding
Securities of such series or Tranches are present in person or by
proxy and if representatives of the Company and the Trustee are
present, or if notice is waived in writing before or after the
meeting by the Holders of all Outstanding Securities of such
series, or by such of them as are not present at the meeting in
person or by proxy, and by the Company and the Trustee.
SECTION 1303. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of
Securities of one or more, or all, series, or any Tranche or Tranches
thereof, a Person shall be (a) a Holder of one or more Outstanding
Securities of such series or Tranches, or (b) a Person appointed by
an instrument in writing as proxy for a Holder or Holders of one or
more Outstanding Securities of such series or Tranches by such Holder
or Holders. The only Persons who shall be entitled to attend any
meeting of Holders of Securities of any series or Tranche shall be
the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any represen-
tatives of the Company and its counsel.
SECTION 1304. Quorum; Action.
The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of the series and
Tranches with respect to which a meeting shall have been called as
hereinbefore provided, considered as one class, shall constitute a
quorum for a meeting of Holders of Securities of such series and
Tranches; provided, however, that if any action is to be taken at
such meeting which this Indenture expressly provides may be taken by
the Holders of a specified percentage, which is less than a majority,
in principal amount of the Outstanding Securities of such series and
Tranches, considered as one class, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Secu-
rities of such series and Tranches, considered as one class, shall
constitute a quorum. In the absence of a quorum within one hour of
the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series and
Tranches, be dissolved. In any other case the meeting may be
adjourned for such period as may be determined by the chairman of the
meeting prior to the adjournment of such meeting. In the absence of
a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for such period as may be determined by the
chairman of the meeting prior to the adjournment of such adjourned
meeting. Except as provided by Section 1305(e), notice of the
reconvening of any meeting adjourned for more than 30 days shall be
given as provided in Section 1302(a) not less than 10 days prior to
the date on which the meeting is scheduled to be reconvened. Notice
of the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the
Outstanding Securities of such series and Tranches which shall
constitute a quorum.
Except as limited by Section 1202, any resolution pre-
sented to a meeting or adjourned meeting duly reconvened at which a
quorum is present as aforesaid may be adopted only by the affirmative
vote of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of the series and Tranches with respect to
which such meeting shall have been called, considered as one class;
provided, however, that, except as so limited, any resolution with
respect to any action which this Indenture expressly provides may be
taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of such
series and Tranches, considered as one class, may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum
is present as aforesaid by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding
Securities of such series and Tranches, considered as one class.
Any resolution passed or decision taken at any meeting
of Holders of Securities duly held in accordance with this Section
shall be binding on all the Holders of Securities of the series and
Tranches with respect to which such meeting shall have been held,
whether or not present or represented at the meeting.
SECTION 1305. Attendance at Meetings; Determination of Voting
Rights; Conduct and Adjournment of Meetings.
(a) Attendance at meetings of Holders of Securities
may be in person or by proxy; and, to the extent permitted by
law, any such proxy shall remain in effect and be binding upon
any future Holder of the Securities with respect to which it was
given unless and until specifically revoked by the Holder or
future Holder of such Securities before being voted.
(b) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it
may deem advisable for any meeting of Holders of Securities in
regard to proof of the holding of such Securities and of the
appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall
be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified
in Section 104. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be
presumed valid and genuine without the proof specified in Section
104 or other proof.
(c) The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the meeting
shall have been called by the Company or by Holders as provided
in Section 1302(b), in which case the Company or the Holders of
Securities of the series and Tranches calling the meeting, as the
case may be, shall in like manner appoint a temporary chairman.
A permanent chairman and a permanent secretary of the meeting
shall be elected by vote of the Persons entitled to vote a
majority in aggregate principal amount of the Outstanding
Securities of all series and Tranches represented at the meeting,
considered as one class.
(d) At any meeting each Holder or proxy shall be
entitled to one vote for each $1 principal amount of Securities
held or represented by him; provided, however, that no vote shall
be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the
meeting to be not Outstanding. The chairman of the meeting shall
have no right to vote, except as a Holder of a Security or proxy.
(e) Any meeting duly called pursuant to Section 1302
at which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of all series and Tranches
represented at the meeting, considered as one class; and the
meeting may be held as so adjourned without further notice.
SECTION 1306. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed the
signatures of the Holders or of their representatives by proxy and
the principal amounts and serial numbers of the Outstanding Secu-
rities, of the series and Tranches with respect to which the meeting
shall have been called, held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolu-
tion and who shall make and file with the secretary of the meeting
their verified written reports of all votes cast at the meeting. A
record of the proceedings of each meeting of Holders shall be pre-
pared by the secretary of the meeting and there shall be attached to
said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was given as provided in
Section 1302 and, if applicable, Section 1304. Each copy shall be
signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to the
Company, and another to the Trustee to be preserved by the Trustee,
the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 1307. Action Without Meeting.
In lieu of a vote of Holders at a meeting as
hereinbefore contemplated in this Article, any request, demand,
authorization, direction, notice, consent, waiver or other action may
be made, given or taken by Holders by written instruments as provided
in Section 104.
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders, Officers and Directors
SECTION 1401. Liability Solely Corporate.
No recourse shall be had for the payment of the
principal of or premium, if any, or interest, if any, on any
Securities, or any part thereof, or for any claim based thereon or
otherwise in respect thereof, or of the indebtedness represented
thereby, or upon any obligation, covenant or agreement under this
Indenture, against any incorporator, stockholder, officer or
director, as such, past, present or future of the Company or of any
predecessor or successor Corporation (either directly or through the
Company or a predecessor or successor Corporation), whether by virtue
of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly agreed and understood that this Indenture and all the
Securities are solely corporate obligations, and that no personal
liability whatsoever shall attach to, or be incurred by, any
incorporator, stockholder, officer or director, past, present or
future, of the Company or of any predecessor or successor
Corporation, either directly or indirectly through the Company or any
predecessor or successor Corporation, because of the indebtedness
hereby authorized or under or by reason of any of the obligations,
covenants or agreements contained in this Indenture or in any of the
Securities or to be implied herefrom or therefrom, and that any such
personal liability is hereby expressly waived and released as a
condition of, and as part of the consideration for, the execution of
this Indenture and the issuance of the Securities.
ARTICLE FIFTEEN
Subordination of Securities
SECTION 1501. Securities Subordinate to Senior Indebtedness.
The Company, for itself, its successors and assigns,
covenants and agrees, and each Holder of the Securities of each
series, by its acceptance thereof, likewise covenants and agrees,
that the payment of the principal of and premium, if any, and
interest, if any, on each and all of the Securities is hereby
expressly subordinated, to the extent and in the manner set forth in
this Article, in right of payment to the prior payment in full of all
Senior Indebtedness.
Each Holder of the Securities of each series, by its
acceptance thereof, authorizes and directs the Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate
the subordination as provided in this Article, and appoints the
Trustee its attorney-in-fact for any and all such purposes.
SECTION 1502. Payment Over of Proceeds of Securities.
In the event (a) of any insolvency or bankruptcy
proceedings or any receivership, liquidation, reorganization or other
similar proceedings in respect of the Company or a substantial part
of its property, or of any proceedings for liquidation, dissolution
or other winding up of the Company, whether or not involving
insolvency or bankruptcy, or (b) subject to the provisions of Section
1503, that (i) a default shall have occurred with respect to the
payment of principal of or interest on or other monetary amounts due
and payable on any Senior Indebtedness, or (ii) there shall have
occurred a default (other than a default in the payment of principal
or interest or other monetary amounts due and payable) in respect of
any Senior Indebtedness, as defined therein or in the instrument
under which the same is outstanding, permitting the holder or holders
thereof to accelerate the maturity thereof (with notice or lapse of
time, or both), such default shall have continued beyond the period
of grace, if any, in respect thereof, and, in the cases of subclauses
(i) and (ii) of this clause (b), such default shall not have been
cured or waived or shall not have ceased to exist, or (c) that the
principal of and accrued interest on the Securities of any series
shall have been declared due and payable pursuant to Section 801 and
such declaration shall not have been rescinded and annulled as
provided in Section 802, then:
(1) the holders of all Senior Indebtedness shall
first be entitled to receive payment of the full amount due
thereon, or provision shall be made for such payment in
money or money's worth, before the Holders of any of the
Securities are entitled to receive a payment on account of
the principal of, premium, if any, or interest on the
indebtedness evidenced by the Securities, including, without
limitation, any payments made pursuant to Articles Four and
Five;
(2) any payment by, or distribution of assets of,
the Company of any kind or character, whether in cash,
property or securities, to which any Holder or the Trustee
would be entitled except for the provisions of this Article,
shall be paid or delivered by the person making such payment
or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to the holders
of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of such
Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid after giving effect to any
concurrent payment or distribution (or provision therefor)
to the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of the
indebtedness evidenced by the Securities or to the Trustee
under this Indenture; and
(3) in the event that, notwithstanding the
foregoing, any payment by, or distribution of assets of, the
Company of any kind or character, whether in cash, property
or securities, in respect of principal of or interest on the
Securities or in connection with any repurchase by the
Company of the Securities, shall be received by the Trustee
or any Holder before all Senior Indebtedness is paid in
full, or provision is made for such payment in money or
money's worth, such payment or distribution in respect of
principal of or interest on the Securities or in connection
with any repurchase by the Company of the Securities shall
be paid over to the holders of such Senior Indebtedness or
their representative or representatives or to the trustee or
trustees under any indenture under which any instruments
evidencing any such Senior Indebtedness may have been
issued, ratably as aforesaid, for application to the payment
of all Senior Indebtedness remaining unpaid until all such
Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution (or
provision therefor) to the holders of such Senior
Indebtedness.
Notwithstanding the foregoing, at any time after the
123rd day following the date of deposit of cash or Eligible
Obligations pursuant to Section 701 (provided all conditions set out
in such Section shall have been satisfied), the funds so deposited
and any interest thereon will not be subject to any rights of holders
of Senior Indebtedness including, without limitation, those arising
under this Article Fifteen; provided that no event described in
clauses (d) and (e) of Section 801 with respect to the Company has
occurred during such 123-day period.
For purposes of this Article only, the words "cash,
property or securities" shall not be deemed to include shares of
stock of the Company as reorganized or readjusted, or securities of
the Company or any other Corporation provided for by a plan or
reorganization or readjustment which are subordinate in right of
payment to all Senior Indebtedness which may at the time be
outstanding to the same extent as, or to a greater extent than, the
Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into,
another Corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety,
or substantially as an entirety, to another Corporation upon the
terms and conditions provided for in Article Eleven hereof shall not
be deemed a dissolution, winding-up, liquidation or reorganization
for the purposes of this Section 1502 if such other Corporation
shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Eleven hereof.
Nothing in Section 1501 or in this Section 1502 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 907.
SECTION 1503. Disputes with Holders of Certain Senior Indebtedness.
Any failure by the Company to make any payment on or
perform any other obligation in respect of Senior Indebtedness, other
than any indebtedness incurred by the Company or assumed or
guaranteed, directly or indirectly, by the Company for money borrowed
(or any deferral, renewal, extension or refunding thereof) or any
other obligation as to which the provisions of this Section shall
have been waived by the Company in the instrument or instruments by
which the Company incurred, assumed, guaranteed or otherwise created
such indebtedness or obligation, shall not be deemed a default under
clause (b) of Section 1502 if (i) the Company shall be disputing its
obligation to make such payment or perform such obligation and (ii)
either (A) no final judgment relating to such dispute shall have been
issued against the Company which is in full force and effect and is
not subject to further review, including a judgment that has become
final by reason of the expiration of the time within which a party
may seek further appeal or review, or (B) in the event that a
judgment that is subject to further review or appeal has been issued,
the Company shall in good faith be prosecuting an appeal or other
proceeding for review and a stay or execution shall have been
obtained pending such appeal or review.
SECTION 1504. Subrogation.
Senior Indebtedness shall not be deemed to have been
paid in full unless the holders thereof shall have received cash (or
securities or other property satisfactory to such holders) in full
payment of such Senior Indebtedness then outstanding. Upon the
payment in full of all Senior Indebtedness, the Holders of the
Securities shall be subrogated to the rights of the holders of Senior
Indebtedness to receive any further payments or distributions of
cash, property or securities of the Company applicable to the holders
of the Senior Indebtedness until all amounts owing on the Securities
shall be paid in full; and such payments or distributions of cash,
property or securities received by the Holders of the Securities, by
reason of such subrogation, which otherwise would be paid or
distributed to the holders of such Senior Indebtedness shall, as
between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders, be deemed to be a payment by the
Company to or on account of Senior Indebtedness, it being understood
that the provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders, on the
one hand, and the holders of the Senior Indebtedness, on the other
hand.
SECTION 1505. Obligation of the Company Unconditional.
Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as
among the Company, its creditors other than the holders of Senior
Indebtedness and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders the principal of
and interest on the Securities as and when the same shall become due
and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders and creditors of the
Company other than the holders of Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under
this Article of the holders of Senior Indebtedness in respect of
cash, property or securities of the Company received upon the
exercise of any such remedy.
Upon any payment or distribution of assets or securities
of the Company referred to in this Article, the Trustee and the
Holders shall be entitled to rely upon any order or decree of a court
of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending for the purpose
of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon, and all other
facts pertinent thereto or to this Article.
SECTION 1506. Priority of Senior Indebtedness Upon Maturity.
Upon the maturity of the principal of any Senior
Indebtedness by lapse of time, acceleration or otherwise, all matured
principal of Senior Indebtedness and interest and premium, if any,
thereon shall first be paid in full before any payment of principal
or premium or interest, if any, is made upon the Securities or before
any Securities can be acquired by the Company or any sinking fund
payment is made with respect to the Securities (except that required
sinking fund payments may be reduced by Securities acquired before
such maturity of such Senior Indebtedness).
SECTION 1507. Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all rights set forth in
this Article with respect to any Senior Indebtedness at any time held
by it, to the same extent as any other holder of Senior Indebtedness.
Nothing in this Article shall deprive the Trustee of any of its
rights as such holder.
SECTION 1508. Notice to Trustee to Effectuate Subordination.
Notwithstanding the provisions of this Article or any
other provision of the Indenture, the Trustee shall not be charged
with knowledge of the existence of any facts which would prohibit the
making of any payment of moneys to or by the Trustee unless and until
the Trustee shall have received written notice thereof from the
Company, from a Holder or from a holder of any Senior Indebtedness or
from any representative or representatives of such holder and, prior
to the receipt of any such written notice, the Trustee shall be
entitled, subject to Section 901, in all respects to assume that no
such facts exist; provided, however, that, if prior to the fifth
Business Day preceding the date upon which by the terms hereof any
such moneys may become payable for any purpose, or in the event of
the execution of an instrument pursuant to Section 702 acknowledging
satisfaction and discharge of this Indenture, then if prior to the
second Business Day preceding the date of such execution, the Trustee
shall not have received with respect to such moneys the notice
provided for in this Section, then, anything herein contained to the
contrary notwithstanding, the Trustee may, in its discretion, receive
such moneys and/or apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary,
which may be received by it on or after such date; provided, however,
that no such application shall affect the obligations under this
Article of the persons receiving such moneys from the Trustee.
SECTION 1509. Modification, Extension, etc. of Senior Indebtedness.
The holders of Senior Indebtedness may, without
affecting in any manner the subordination of the payment of the
principal of and premium, if any, and interest, if any, on the
Securities, at any time or from time to time and in their absolute
discretion, agree with the Company to change the manner, place or
terms of payment, change or extend the time of payment of, or renew
or alter, any Senior Indebtedness, or amend or supplement any
instrument pursuant to which any Senior Indebtedness is issued, or
exercise or refrain from exercising any other of their rights under
the Senior Indebtedness including, without limitation, the waiver of
default thereunder, all without notice to or assent from the Holders
or the Trustee.
SECTION 1510. Trustee Has No Fiduciary Duty to Holders of Senior
Indebtedness.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its
covenants and objectives as are specifically set forth in this
Indenture, and no implied covenants or obligations with respect to
the holders of Senior Indebtedness shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness, and shall not
be liable to any such holders if it shall mistakenly pay over or
deliver to the Holders or the Company or any other Person, money or
assets to which any holders of Senior Indebtedness shall be entitled
by virtue of this Article or otherwise.
SECTION 1511. Paying Agents Other Than the Trustee.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then acting
hereunder, the term "Trustee" as used in this Article shall in such
case (unless the context shall otherwise require) be construed as
extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee; provided,
however, that Sections 1507, 1508 and 1510 shall not apply to the
Company if it acts as Paying Agent.
SECTION 1512. Rights of Holders of Senior Indebtedness Not Impaired.
No right of any present or future holder of Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any noncompliance by the Company with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
SECTION 1513. Effect of Subordination Provisions; Termination.
Notwithstanding anything contained herein to the contrary, other
than as provided in the immediately succeeding sentence, all the provisions
of this Indenture shall be subject to the provisions of this Article, so far
as the same may be applicable thereto.
Notwithstanding anything contained herein to the contrary, the
provisions of this Article Fifteen shall be of no further effect, and the
Securities shall no longer be subordinated in right of payment to the prior
payment of Senior Indebtedness, if the Company shall have delivered to the
Trustee a notice to such effect. Any such notice delivered by the Company
shall not be deemed to be a supplemental indenture for purposes of Article
Twelve hereof.
_________________________
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first
above written.
[SEAL] FLORIDA POWER & LIGHT COMPANY
By:
Dilek Samil
Treasurer and Assistant Secretary
ATTEST:
Paul R. Sutherland
Assistant Treasurer and
Assistant Secretary
<PAGE>
[SEAL] THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), TRUSTEE
By:
Valerie Dunbar
Vice President
ATTEST:
Shiek Wiltshire
Assistant Secretary
<PAGE>
State of New York
County of New York ss.:
On the 10th day of November, in the year 1995, before me
personally came Dilek Samil, to me known, who, being by me duly
sworn, did depose and say that she is the Treasurer and Assistant
Secretary, of Florida Power & Light Company, one of the corporations
described in and which executed the above instrument; that she knows
the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that she
signed her name thereto by like authority.
Lee T. Barnum
Notary Public, State of New York
Commission No. 01BA5037193
Qualified in New York County
My Commission Expires December 19, 1996
<PAGE>
State of New York
County of New York ss.:
On the 9th day of November, in the year 1995, before me
personally came Valerie Dunbar, to me known, who, being by me duly
sworn, did depose and say that she is a Vice President of The Chase
Manhattan Bank (National Association), one of the corporations
described in and which executed the above instrument; that she knows
the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that she
signed her name thereto by like auhtority.
Margaret M. Price
Notary Public, State of New York
Commission No. 24-4980599
Qualified in Kings County
My Commission Expires April 22, 1997
EXHIBIT 4(c)ii
FLORIDA POWER & LIGHT COMPANY
UNANIMOUS CONSENT OF THE FINANCE COMMITTEE
OF THE BOARD OF DIRECTORS
IN LIEU OF MEETING
WHEREAS, the officers of Florida Power & Light Company
(the "Company") have determined that it would be desirable and beneficial
for the Company to provide for the issuance, through the execution and
delivery of an indenture, of unsecured subordinated debt securities (the
"Debt Securities") which Debt Securities may be issued in one or more series,
from time to time, if market conditions warrant; and
WHEREAS, the officers of the Company have also determined that
it would be desirable and beneficial for the Company, if market conditions
warrant, to offer up to $125,000,000 in aggregate principal amount of an
initial series of Debt Securities, described as Quarterly Income Debt
Securities (Subordinated Deferrable Interest Debentures) (the "QUIDS"), to
holders of the Company's 5,000,000 shares of $2.00 No Par Preferred Stock,
Series A (Involuntary Liquidation Value $25 Per Share) (the "Preferred
Stock"), in exchange for such Preferred Stock (the "Exchange Offer"); and
WHEREAS, attached hereto are copies of the following documents:
(a) Proposed Indenture For Unsecured
Subordinated Debt Securities
from the Company to The Chase
Manhattan Bank (National Association)
as trustee, (the "Subordinated
Indenture Trustee") providing
for the issuance, from time to time,
of one or more series of Debt Securities
(the "Subordinated Indenture");
(b) Proposed officer's certificate (an
"Officer's Certificate") establishing
certain terms of the QUIDS;
(c) Proposed form of the QUIDS;
(d) Registration Statement on Form S-4,
including a preliminary prospectus (the
"Prospectus," and together with the
Form S-4, the "Registration Statement")
for registration of the QUIDS under
the Securities Act of 1933, as amended
(the "Securities Act");
(e) Proposed form of Registration Statement
on Form 8-A (the "Form 8-A") for registration
of the QUIDS under the Securities Exchange
Act of 1934, as amended (the "Exchange Act");
(f) Proposed form of Dealer Managers Agreement
by and among the Company, and Goldman,
Sachs & Co., Lehman Brothers and Smith
Barney Inc., as dealer managers (the
"Dealer Managers"), to be executed in
connection with the Exchange Offer;
(g) Proposed Exchange Agent Agreement between
the Company and The Chase Manhattan Bank
(National Association), as Exchange Agent;
(h) Proposed form of Letter of Transmittal to
the holders of the Preferred Stock, and
other Exchange Offer offering documentation;
(i) Proposed form Schedule 13E-4, Issuer Tender
Offer Statement ("Schedule 13E-4"); and
(j) Proposed form of Press Release relating to
the issuance of the QUIDS and the Exchange Offer.
NOW, THEREFORE, the undersigned constituting all
of the members of the Finance Committee of the Board of Directors of
the Company hereby consent to and adopt the following resolutions,
effective on and as of the date set forth below:
RATIFICATION
RESOLVED, that all actions heretofore
taken by the officers and directors of the
Company with respect to the proposed execution
and delivery of the Indenture, the proposed
issuance and exchange of the QUIDS, and the
Exchange Offer, including, but not limited
to (1) the filing of the Registration
Statement, including a power of attorney, with
the Securities and Exchange Commission
(the "SEC"), and (2) the preparation and filing
with the SEC of the Prospectus, be and hereby are,
in all respects approved, ratified and confirmed;
and further
INDENTURE
RESOLVED, that the Finance Committee of the
Board of Directors of the Company hereby approves
the execution and delivery of the Subordinated
Indenture, in substantially the form attached
hereto with such changes therein as the officers
executing the same shall approve, such approval
to be conclusively evidenced by their execution
thereof; and further
RESOLVED, that the Chairman of the Board,
the President, any Vice President, the Treasurer
or any Assistant Treasurer of the Company be, and
each hereby is, authorized, empowered and directed
to execute and deliver, on behalf of the Company,
the Subordinated Indenture, in substantially the
form attached hereto with such changes therein as
the officers executing the same shall approve,
such approval to be conclusively evidenced by their
execution thereof; and further
RESOLVED, that The Chase Manhattan Bank
(National Association) be and it hereby is,
appointed by the Company to act as Subordinated
Indenture Trustee in accordance with the terms and
provisions of the Subordinated Indenture; and further
AUTHORIZATION TO ISSUE QUIDS
RESOLVED, that:
(i) the securities of the first series
to be issued under the Subordinated Indenture to
the Subordinated Indenture Trustee shall have the
descriptive title "Quarterly Income Debt Securities
(Subordinated Deferrable Interest Debentures)" to
be designated as set forth in the Officer's
Certificate; all capitalized terms used in these
resolutions which are not defined herein but are
defined in the Subordinated Indenture shall have the
meanings set forth in the Subordinated Indenture;
(ii) the QUIDS shall be limited in
aggregate principal amount to $125,000,000 at
any time Outstanding;
(iii) the QUIDS shall mature and
the principal shall be due and payable together
with all accrued and unpaid interest thereon as set
forth in the Officer's Certificate;
(iv) the QUIDS shall bear interest from
the date of original issuance at the rate set
forth in the Officer's Certificate payable in equal
quarterly installments, in arrears, on March 31,
June 30, September 30 and December 31 of each year
(each, an "Interest Payment Date") commencing
December 31, 1995. The amount of interest payable
for any such period will be computed on the basis of
a 360-day year of twelve 30-day months and for any period
shorter than a full calendar month, on the basis of the
actual number of days elapsed in such period. Interest on
the QUIDS will accrue from, and including, the date of
original issuance to, and including, the first Interest
Payment Date, and thereafter will accrue, from, and
excluding, the last Interest Payment Date through
which interest has been paid. No interest will accrue
on the QUIDS with respect to the day on which the
QUIDS mature. In the event that any Interest Payment
Date is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or
other payment in respect of such delay), except that, if
such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force
and effect as if made on the Interest Payment Date;
(v) each installment of interest on a QUIDS
shall be payable to the Person in whose name such
QUIDS is registered at the close of business 15 calendar
days next preceding the corresponding Interest Payment Date
(the "Regular Record Date") for the QUIDS. Any installment
of interest on the QUIDS not punctually paid or duly
provided for shall forthwith cease to be payable to the
Holders of such QUIDS on such Regular Record Date, and may
be paid to the Persons in whose name the QUIDS are
registered at the close of business on a Special Record
Date to be fixed by the Subordinated Indenture
Trustee for the payment of such Defaulted Interest,
notice whereof shall be given to the Holders of the QUIDS
not less than 10 days prior to such Special Record Date,
or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange
on which the QUIDS may be listed, and upon such notice as
may be required by such exchange, all as more fully
provided in the Subordinated Indenture;
(vi) the principal and each installment of interest
on the QUIDS shall be payable at the office or agency of the
Company in The City of New York. The Subordinated Indenture
Trustee will initially be the Paying Agent and the
Registrar for the QUIDS;
(vii) the QUIDS will be redeemable on or
prior to February 28, 1997 at the option of the
Company, in whole or in part, upon not less than
30 nor more than 60 days' notice, at 108% of the
principal amount redeemed plus accrued and unpaid
interest, if any, to the Redemption Date; and
thereafter at 100% of the principal amount redeemed
plus accrued and unpaid interest, if any, to the
Redemption Date; provided, however, that none of the
QUIDS shall be redeemed prior to March 1, 1997, if
such redemption is for the purpose, or in anticipation,
of refunding such QUIDS through the use, directly or
indirectly, of funds borrowed by the Company at an
effective interest cost to the Company (calculated
in accordance with acceptable financial practice)
of less than 8.2102% per annum;
(viii) the QUIDS shall be issuable in
denominations of $25 and any integral multiple thereof;
(ix) so long as any QUIDS are Outstanding,
the failure of the Company to pay interest on any
QUIDS within 60 days after the same becomes due and
payable (whether or not payment is prohibited by the
provisions of Article Fifteen of the Subordinated
Indenture) shall constitute an Event of Default;
provided, however, that a valid extension of the
interest payment period by the Company as
contemplated in Section 312 of the Subordinated
Indenture and paragraph (x) of these Resolutions
shall not constitute a failure to pay interest for
this purpose;
(x) pursuant to Section 312 of the Subordinated
Indenture, the Company shall have the right, at
any time and from time to time during the term of
the QUIDS, so long as no Event of Default shall
have occurred and be continuing to extend the interest
payment period of such QUIDS to a period not
exceeding 20 consecutive quarterly interest payment
periods (the "Extended Interest Payment Period"),
on the last Business Day of which Extended Interest
Payment Period, the Company shall pay all interest then
accrued and unpaid (together with interest thereon at
the rate specified for the QUIDS to the extent permitted
by applicable law); provided, that, during such
Extended Interest Payment Period, the Company shall not
declare or pay any dividend on, or redeem, purchase,
acquire or make a distribution or liquidation payment
with respect to, any of its preferred stock (regardless
of par value), preference stock or common stock from
time to time outstanding, except that the Company may
make mandatory sinking fund payments with respect
to its 6.84% Preferred Stock, Series Q and 8.625%
Preferred Stock, Series R. Prior to the termination
of any such Extended Interest Payment Period, the
Company may further extend the interest payment period,
provided that such Extended Interest Payment Period,
together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarterly
interest payment periods or extend beyond the Stated
Maturity of the QUIDS. Upon the termination of any
Extended Interest Payment Period and upon the payment
of all amounts then due, the Company may elect
another Extended Interest Payment Period. No interest
during an Extended Interest Payment Period, except at the
end thereof, shall be due and payable;
(xi) the Company shall give the Holders of
the QUIDS and the Subordinated Indenture Trustee
written notice of its election of such Extended
Interest Payment Period prior to the earlier of (i)
two Business Days prior to the Regular Record Date
for the next Interest Payment Date which would
occur but for such election or (ii) the date the
Company is required to give notice to the New York
Stock Exchange or other applicable self-regulatory
organization of the Regular Record Date or Interest
Payment Date. The quarter in which any notice is
given pursuant to this paragraph shall constitute
one of the 20 quarters which comprise the maximum
Extended Interest Payment Period;
(xii) the QUIDS shall have such other terms
and provisions as are provided in the form of QUIDS
attached hereto, and shall be issued in substantially
such form; and
(xiii) clause (b) of the first paragraph
of Section 1502 of the Subordinated Indenture
shall read as follows with respect to the QUIDS:
"(b) subject to the provisions of Section
1503, that (i) a default shall have occurred
with respect to the payment of principal of
or interest on or other monetary amounts due and
payable on any Senior Indebtedness, or (ii)
there shall have occurred a default (other than a
default in the payment of principal or interest or
other monetary amounts due and payable) in respect
of any Senior Indebtedness, as defined therein or
in the instrument under which the same is outstanding,
permitting the holder or holders thereof to
accelerate the maturity thereof (with notice or
lapse of time, or both), such default shall have
continued beyond the period of grace, if any, in
respect thereof, and either 90 days shall not have
elapsed after the expiration of such grace period or
the maturity of such Senior Indebtedness shall have
been accelerated because of such default and such
acceleration shall not have been rescinded or
annulled, and in the cases of subclauses (i) and
(ii) of this clause (b), such default shall not
have been cured or waived or shall not have ceased to
exist, or"; and further
RESOLVED, that each of Michael W. Yackira,
Senior Vice President, Finance and Chief Financial
Officer of the Company, and Dilek L. Samil,
Treasurer and Assistant Secretary of the Company,
is hereby authorized, empowered and directed (i) to
approve and accept the final financial and any other
additional terms and conditions of the issuance of
the QUIDS, including, but not limited to, the interest
rate or rates payable, or the method for determining
the same, on the QUIDS, the date or dates of maturity
of the QUIDS, and the redemption prices and terms and
conditions, if any, of the QUIDS, and (ii) on behalf
of the Company, to execute and deliver an Officer's
Certificate to the Subordinated Indenture Trustee
containing such final financial and any such
additional terms and conditions, or modifying the
terms set forth in these resolutions, of the QUIDS,
in substantially the form attached hereto with such
changes therein as the officer executing the same
shall approve, such approval to be conclusively
evidenced by their execution thereof; and further
RESOLVED, that the form of Form 8-A
attached hereto is hereby approved, and that
the Chairman of the Board, the President, any
Vice President, the Treasurer, or any Assistant
Treasurer, of the Company be, and each hereby is,
authorized and directed to execute and file with
the SEC, in the name and on behalf of the Company,
the Form 8-A for registration of the QUIDS under
the Exchange Act, in substantially the form attached
hereto, with such changes therein as the officer
executing such document may approve, such approval
to be conclusively evidenced by their execution
thereof; and further
RESOLVED, that in accordance with the
provisions of the Subordinated Indenture, the
form of QUIDS be, and the same hereby is,
established and approved in the form attached
hereto; and further
RESOLVED, that the Chairman of the Board,
the President, any Vice President, the Treasurer
or any Assistant Treasurer of the Company are
authorized and empowered, in the name and on
behalf of the Company, to execute QUIDS, with
the Company's corporate seal affixed or
imprinted thereon, and attested by one of such
officers or by the Secretary or an Assistant
Secretary of the Company, substantially in the
form hereto attached with such changes therein
as the officer executing the same shall approve,
his or her execution thereof to be conclusive
evidence of such approval; and further
RESOLVED, that the officer of the Company
who shall execute on behalf of the Company the
QUIDS is hereby authorized and empowered to
execute said QUIDS by facsimile signature; that
the officer who shall attest the corporate seal
of the Company affixed or imprinted on the QUIDS
is hereby authorized to attest such seal by facsimile
signature; and that such facsimile signature of any
such officer appearing on the QUIDS is hereby
approved and adopted as the signature of such officer,
and that such seal of the Company affixed or
imprinted on the QUIDS is hereby approved and adopted
as the seal of the Company; and further
RESOLVED, that if any officer of the
Company who signs, or whose facsimile signature
appears upon, any of the QUIDS, ceases to be an
officer authorized to execute QUIDS prior to the
authentication and delivery of such QUIDS, the
QUIDS so signed or bearing such facsimile
signature shall nevertheless be valid and
bind the Company; and further
RESOLVED, that upon the execution on behalf
of the Company of the QUIDS, the proper officers
of the Company are hereby authorized and empowered
to deliver such QUIDS to the Subordinated Indenture
Trustee for authentication; and that upon such
delivery to it, the Subordinated Indenture Trustee
is hereby requested to authenticate such QUIDS and
deliver them as directed by the Company Order executed
by the Chairman of the Board, the President, any Vice
President, the Treasurer or any Assistant Treasurer
of the Company.
AUTHORIZATION TO CONDUCT EXCHANGE OFFER
RESOLVED, that the exchange of any and all
of the shares of Preferred Stock for QUIDS pursuant
to the terms of the Exchange Offer, as set forth in
the Prospectus and the Letter of Transmittal be, and
the same hereby is, authorized and approved; and further
RESOLVED, that the Chairman of the Board, the
President, any Vice President, the Treasurer, or any
Assistant Treasurer of the Company be, and each hereby
is, authorized, empowered and directed to execute and
deliver, on behalf of the Company, to holders of the
Preferred Stock, the Letter of Transmittal and other
Exchange Offer offering documentation in
substantially the form attached hereto with such
changes therein as the officer executing such document
may approve, such approval to be conclusively evidenced
by their execution thereof; and further
RESOLVED, that the Company enter into a Dealer
Managers Agreement with the Dealer Managers, pursuant
to which each agrees to perform those services customarily
performed by dealer managers in connection with offers
similar to the Exchange Offer; and further
RESOLVED, that the Chairman of the Board, the
President, any Vice President, the Treasurer, or any
Assistant Treasurer of the Company be, and each hereby
is, authorized to execute and deliver, in the name and
on behalf of the Company, the Dealer Managers Agreement,
in substantially the form attached hereto, with such
changes therein as the officer executing the same may
approve, such approval to be conclusively evidenced by
their execution thereof; and further
RESOLVED, that The Chase Manhattan Bank (National
Association) (the "Exchange Agent") be and it hereby is,
appointed to act as the Exchange Agent in connection with
the Exchange Offer, and that the Chairman of the Board,
the President, any Vice President, the Treasurer or any
Assistant Treasurer of the Company be, and each hereby is,
authorized, empowered and directed to execute and deliver,
on behalf of the Company, the Exchange Agent Agreement, in
substantially the form attached hereto with such changes
therein as the officers executing the same shall approve,
such approval to be conclusively evidenced by their execution
thereof; and further
RESOLVED, that Georgeson & Company Inc. (the
"Information Agent") be and it hereby is, appointed to
act as the Information Agent on behalf of the Company in
connection with the Exchange Offer; and further
RESOLVED, that each of Michael W. Yackira,
Senior Vice President, Finance and Chief Financial
Officer of the Company, and Dilek L. Samil, Treasurer
and Assistant Secretary of the Company, is hereby authorized
and directed to approve and accept the final financial and
other terms and conditions of the Exchange Offer, including,
but not limited to, the exchange ratio of QUIDS for Preferred
Stock, the compensation to be paid by the Company to the
Dealer Managers and to any soliciting brokers or dealers, in
connection with the Exchange Offer; and further
RESOLVED, that the form of Schedule 13E-4
attached hereto is hereby approved, and that the
Chairman of the Board, the President, any Vice
President, the Treasurer, or any Assistant
Treasurer of the Company be, and each hereby is,
authorized to execute and file with the SEC, in
the name and on behalf of the Company, the Schedule
13E-4, in substantially the form attached hereto,
with such changes therein as the officer executing
the same may approve, such approval to be conclusively
evidenced by such execution thereof; and further
RESOLVED, that upon consummation of the Exchange
Offer, all shares of Preferred Stock accepted by the
Company for exchange therein shall be canceled and
retired; and further
NYSE LISTING APPLICATION
RESOLVED, that the officers of the Company be,
and they hereby are, authorized and empowered to
prepare, execute and file one or more Listing
Applications with the New York Stock Exchange, Inc.
for the listing of the QUIDS, and to enter into such
further agreements with the New York Stock Exchange,
Inc. in connection with said Listing Application or
Listing Applications as the officers taking such action
may deem necessary or desirable; and further
RESOLVED, that Dennis P. Coyle, General Counsel
and Secretary of the Company, Robert J. Reger, Jr. of
Reid & Priest LLP, and Jeffrey I. Mullens, P.A. of
Steel Hector & Davis, counsel for the Company, and
each of them is authorized to appear before the New
York Stock Exchange, Inc., or any department, division,
or committee thereof, in connection with any application
made by the Company for the listing of the QUIDS; and
further
BLUE SKY
RESOLVED, that the proper officers of the
Company are hereby authorized and empowered in the
name and on behalf of the Company, to take any and
all action which they may deem necessary or
desirable in order to effect the registration or
qualification (or exemption therefrom) of part or
all of the QUIDS for issue, offer, sale or trading
under the Blue Sky or securities laws of any of the
jurisdictions of the United States of America and in
connection therewith to execute, acknowledge,
verify, deliver, file or cause to be published any
applications, reports, consents to service of process,
appointments of attorneys to receive service of process
and other papers and instruments which may be required
under such laws, and to take any and all further
action which they may deem necessary or desirable in
order to maintain any such registration, qualification
or exemption for as long as they deem necessary or as
required by law; and further
RESOLVED, that the officers of the Company be,
and each hereby is, authorized and empowered in the
name and on behalf of the Company to execute and file
the irrevocable written consents on the part of the
Company to be used in such states and other jurisdictions
of the United States of America wherein such consents to
service or process may be requisite under the securities
laws thereof in connection with said registration or
qualification of the QUIDS, or in connection with said
registration of the Company, and to appoint the appropriate
state official agent of the Company for the purpose of
receiving and accepting process; and further
OTHER
RESOLVED, that each officer and/or director of
the Corporation who may be required to execute, on
behalf of the Company, the Registration Statement and any
amendment or amendments thereto, including pre-effective and
post-effective amendments, is hereby authorized to execute a
power of attorney appointing Dennis P. Coyle, General Counsel
and Secretary of the Company, Robert J. Reger, Jr. of Reid &
Priest LLP, and Jeffrey I. Mullens, P.A. of Steel Hector & Davis,
and each of them severally, his true and lawful attorneys or
attorney with power to act with or without the others and
with full power of substitution and resubstitution, for him or
in his name, place and stead, in his capacity as an officer
and/or director of the Company, to sign any such Registration
Statement and any amendment or amendments, thereto, including
pre-effective and post-effective amendments, and all instruments
necessary or incidental in connection therewith, and to file the
same with the Securities and Exchange Commission, with full power
and authority to each of said attorneys to do and perform in the
name and on behalf of each of such officers and/or directors,
every act whatsoever necessary or desirable to be done as fully
and to all intents and purposes as any such person might
or could do in person; and further
RESOLVED, that Dennis P. Coyle, General Counsel
and Secretary of the Company, Robert J. Reger, Jr. of
Reid & Priest LLP, and Jeffrey I. Mullens, P.A. of
Steel Hector & Davis be, and each of them hereby is,
appointed as agent for service of process on the Company
under the Securities Act of 1933, as amended, in connection
with the Registration Statement and any and all amendments,
including pre-effective and post-effective amendments, thereto,
relating to the QUIDS, and are authorized to receive notices
and communications from the Securities and Exchange Commission
in connection with the Registration Statement and the filing
thereof with the Securities and Exchange Commission; and further
RESOLVED, that the appropriate officers of the Company
hereby are authorized and empowered to take all such steps
and to do all such acts and things as any one or more of them
may deem necessary or desirable to provide for the lawful
issuance and sale of the QUIDS and for the consummation of
the Exchange Offer including, without limiting the
generality of the foregoing, the making and execution of any
necessary or desirable instruments; the making and
execution of certificates, affidavits and other documents in
connection therewith; the opening of any bank accounts; the
signing of any checks or endorsements; the payment of any fees
or taxes; and the filing of any documents with any regulatory
agency; and that such officers hereby are authorized and
empowered, from time to time, to take any and all other action
to make, execute, verify and file all applications,
certificates, documents and other instruments, and to
consummate the sale of the QUIDS and to consummate the
Exchange Offer, and to do any and all other acts and things
which they, or any of them, shall deem necessary or desirable
to carry out the intent and purposes of the foregoing
resolutions.<PAGE>
This document may be executed in one or more
counterparts, a complete set of which shall constitute one original.
Dated: July 10, 1995
James L. Broadhead
Paul J. Evanson
Michael W. Yackira
EXHIBIT 4(c)iii
FLORIDA POWER & LIGHT COMPANY
OFFICER'S CERTIFICATE
Regarding Company Order 1-D-1
Dilek Samil, the Treasurer and Assistant Secretary
of Florida Power & Light Company (the "Company"), pursuant to the
authority granted in the accompanying Board Resolutions (all
capitalized terms used herein which are not defined herein but are
defined in the Subordinated Indenture referred to below, shall have
the meanings specified in the Subordinated Indenture), does hereby
certify to The Chase Manhattan Bank (National Association) (the
"Trustee"), as Trustee under the Indenture (For Unsecured
Subordinated Debt Securities) of the Company dated as of November 1,
1995 (the "Subordinated Indenture") that:
1. The first series of the Securities to be
issued under the Subordinated Indenture shall have the title "8.75%
Quarterly Income Debt Securities (Subordinated Deferrable Interest
Debentures, Due 2025)" ("Debentures of the First Series"). The
Debentures of the First Series will bear interest from November 10,
1995 at the rate of 8.75% payable in equal quarterly installments, in
arrears, on March 31, June 30, September 30 and December 31 of each
year, commencing December 31, 1995.
2. The Debentures of the First Series shall
mature and the principal shall be due and payable together with all
accrued and unpaid interest thereon on November 1, 2025.
3. The office of Trustee shall be the office or
agency of the Company at which (1) the principal of and premium, if
any, and interest, if any, on the Debentures of the First Series
shall be payable, (2) registration of transfer of the Debentures of
the First Series may be effected, (3) exchanges of the Debentures of
the First Series may be effected and (4) notices and demands to or
upon the Company in respect of the Debentures of the First Series and
the Subordinated Indenture may be served; provided, however, that the
Company reserves the right to change, by one or more Officer's
Certificates, any such office or agency; and provided, further, that
the payment of interest may be made at the option of the Company (i)
by checks mailed to the address of persons entitled thereto, as such
address shall appear on the Security Register for the Debentures of
the First Series, or (ii) by wire transfers to accounts maintained by
the persons entitled thereto as specified in the Security Register.
The Trustee will be the Security Registrar and the Paying Agent for
the Debentures of the First Series.
4. In the event that, at any time subsequent to
the initial authentication and delivery of the Debentures of the
First Series, the Debentures of the First Series are to be held by a
securities depositary, the Company may at such time establish the
matters contemplated in clause (r) in the second paragraph of Section
301 of the Subordinated Indenture in an Officer's Certificate
supplemental to this Certificate.
5. No service charge shall be made for the
registration of transfer or exchange of the Debentures of the First
Series; provided, however, that the Company may require payment of a
sum sufficient to cover any tax or other governmental change payable
in connection thereafter.
6. The Debentures of the First Series shall
have such other terms and provisions as are provided in the form set
forth in Exhibit A thereto, and shall be issued in substantially such
form.
7. The undersigned has read the accompanying
Company Order and Board Resolutions and all of the covenants or
conditions contained in Sections 102, 201, 301, 303 and 312 of the
Subordinated Indenture relating thereto and the definitions in the
Subordinated Indenture relating thereto.
8. The statements contained in this certificate
are based upon the familiarity of the undersigned with the
Subordinated Indenture, the documents accompanying this certificate,
and upon discussions by the undersigned with officers and employees
of the Company familiar with the matters set forth herein.
9. In the opinion of the undersigned, he or she
has made such examination or investigation as is necessary to express
an informed opinion whether or not such covenants or conditions have
been complied with.
10. In the opinion of the undersigned, such
covenants and conditions have been complied with.
Dated: November 10, 1995
__________________________________
Dilek Samil
Treasurer and Assistant Secretary
EXHIBIT 10(a)
FPL GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Amended and Restated
Effective January 1, 1994
<PAGE>
FPL GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
1.01 Base Compensation . . . . . . . . . . . . . . . . . . . . . 2
1.02 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . 3
1.03 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.04 Bonus Compensation . . . . . . . . . . . . . . . . . . . . 3
1.05 Change of Control . . . . . . . . . . . . . . . . . . . . . 3
1.06 Class A Executive . . . . . . . . . . . . . . . . . . . . . 5
1.07 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.08 Committee . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.09 Disability . . . . . . . . . . . . . . . . . . . . . . . . 5
1.10 EBPAC . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.11 Effective Date. . . . . . . . . . . . . . . . . . . . . . . 5
1.12 Employee. . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.13 Employer. . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.15 Group . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.16 Participant . . . . . . . . . . . . . . . . . . . . . . . . 5
1.17 Pension Plan . . . . . . . . . . . . . . . . . . . . . . . 5
1.18 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.19 Restated Effective Date . . . . . . . . . . . . . . . . . . 6
1.20 Retirement Plan . . . . . . . . . . . . . . . . . . . . . . 6
1.21 Thrift Plan . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
ELIGIBILITY
2.01 Eligibility for Participation . . . . . . . . . . . . . . . 6
2.02 Terminated Employees . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
BENEFITS
3.01 Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.02 Vesting of Benefits . . . . . . . . . . . . . . . . . . . . 8
3.03 Transfer of Employment. . . . . . . . . . . . . . . . . . . 9
3.04 Payment of Benefits . . . . . . . . . . . . . . . . . . . . 9
3.05 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.06 Offset for Obligations to Employer. . . . . . . . . . . . . 10
ARTICLE IV
ADMINISTRATION
4.01 Administration. . . . . . . . . . . . . . . . . . . . . . . 10
4.02 Liability of Committee or EBPAC; Indemnification. . . . . . 10
4.03 Determination of Benefits . . . . . . . . . . . . . . . . . 11
4.04 Payment Due an Incompetent. . . . . . . . . . . . . . . . . 12
4.05 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V
AMENDMENT AND TERMINATION
5.01 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.02 Termination or Merger of the Plan . . . . . . . . . . . . . 12
5.03 Supplements . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI
MISCELLANEOUS
6.01 No Trust Created . . . . . . . . . . . . . . . . . . . . . 13
6.02 Funding . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.03 Top Hat Plan . . . . . . . . . . . . . . . . . . . . . . . 13
6.04 Effect on Benefits under other Plans . . . . . . . . . . . 14
6.05 Spendthrift Clause. . . . . . . . . . . . . . . . . . . . . 14
6.06 Rights Against the Employer . . . . . . . . . . . . . . . . 14
6.07 No Contract of Employment . . . . . . . . . . . . . . . . . 14
6.08 Indemnity Upon Change of Control . . . . . . . . . . . . . 14
6.09 Successors . . . . . . . . . . . . . . . . . . . . . . . . 14
6.10 Severability. . . . . . . . . . . . . . . . . . . . . . . . 14
6.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 15
6.12 Construction. . . . . . . . . . . . . . . . . . . . . . . . 15
Execution Page. . . . . . . . . . . . . . . . . . . . . . . . . 15
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . 17
<PAGE>
FPL GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
THIS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN is adopted
by the Compensation Committee of the Board of Directors
("Compensation Committee") and the Board of Directors of FPL Group,
Inc. ("Board") on this 12th day of December, 1994,
effective as of January 1, 1994 (the "Restated Effective Date").
W I T N E S S E T H T H A T:
WHEREAS, on December 12, 1988 FPL Group, Inc. ("Group")
adopted the FPL Group, Inc. Supplemental Executive Retirement Plan
(the "Plan") effective as of January 1, 1986 (the "Effective Date")
for the exclusive benefit of a select group of management and highly
compensated employees to provide retirement benefits in addition to
those benefits available under the qualified pension and profit
sharing plans established and maintained by Group and, if applicable,
the FPL Group, Inc. Benefit Restoration Plan; and
WHEREAS, Group amended and restated the Plan effective as of
January 1, 1991, which amendments, among other things, expanded
eligibility to participate in the Plan and, for certain participants,
took into account annual bonus payments when determining benefits
under the Plan; and
WHEREAS, on December 15, 1986 Group adopted the FPL
Group, Inc. Benefit Restoration Plan effective as of January 1, 1986;
and
WHEREAS, Group amended and restated the FPL Group, Inc. Benefit
Restoration Plan effective as of January 1, 1991, which plan, among other
things, merged the Florida Power & Light Company Benefit Restoration Plan
into the plan and renamed the plan the "Benefit Restoration Plan of FPL
Group, Inc. and Affiliates"; and
WHEREAS, Group desires to merge the Benefit Restoration Plan of FPL
Group, Inc. and Affiliates into the Plan effective as of January 1, 1994; and
WHEREAS, Group has determined that the best method to
accomplish this merger is to amend and restate the Plan; and
WHEREAS, Group has been authorized by its Board of
Directors and the Compensation Committee to amend and restate the Plan;
NOW, THEREFORE, Group hereby establishes a supplemental
executive retirement plan for the exclusive benefit of Employees and
their Beneficiaries on the following terms and conditions:
ARTICLE I
DEFINITIONS
The following terms when used herein shall have the
meaning indicated, unless the context indicates otherwise:
1.01 "Base Compensation" shall mean Monthly Base Pay (as defined
in the Pension Plan) with respect to the supplemental pension benefit
described in Subsection 3.01(b), and Earnings (as defined in the Thrift
Plan) with respect to the supplemental matching contributions described in
Subsection 3.01(c)(1), plus, to the extent not otherwise included, (i) any
salary deferred under the FPL Group, Inc. Deferred Compensation Plan, and
(ii) any amounts contributed by the Employer pursuant to a salary reduction
agreement which are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), or 402(h). The term "Base Compensation"
shall not include (a) amounts received as fringe benefits irrespective of the
includibility of such amounts on the Participant's Form W-2 (other than
salary reduction contributions described in clause (ii) above), (b) amounts
received under the FPL Group, Inc. Long-Term Incentive Plan of 1985 or the
FPL Group, Inc. Long Term Incentive Plan of 1994, and (c) bonuses awarded
under the Annual Incentive Plan maintained by the Employer (whether or not
such bonuses were deferred under the FPL Group, Inc. Deferred Compensation
Plan).
1.02 "Beneficiary" shall mean the Beneficiary designated under the
applicable Retirement Plan with respect to which benefits hereunder are paid,
except that the Participant may designate a Beneficiary hereunder by
delivering to the Employer a written designation of Beneficiary specifically
made with respect to this Plan.
1.03 "Board" shall mean the Board of Directors of Group.
1.04 "Bonus Compensation" shall mean Base Compensation, plus any
bonuses awarded under the Annual Incentive Plan maintained by the Employer
(whether or not such bonuses were deferred under the FPL Group, Inc. Deferred
Compensation Plan).
1.05 "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 Group (the "Outstanding Company Common
Stock") or (ii) the combined voting power of the then outstanding
voting securities of Group 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 Group or any
of its subsidiaries, (ii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by Group 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 Group'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
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 Group 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 Group of (i) a complete
liquidation or dissolution of Group or (ii) the sale or other
disposition of all or substantially all of the assets of Group,
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 Group of all or
substantially all of the assets of Group" shall mean a sale or
other disposition transaction or series of related transactions
involving assets of Group or of any direct or indirect subsidiary
of Group (including the stock of any direct or indirect
subsidiary of Group) 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 Group (as hereinafter defined). The "fair
market value of Group" shall be the aggregate market value of the
then Outstanding Company Common Stock (on a fully diluted basis)
plus the aggregate market value of Group'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 Group 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.
1.06 "Class A Executive" shall mean an Employee who
is designated for purposes of this Plan as such by the Committee.
1.07 "Code" shall mean the Internal Revenue Code of 1986, as it may
be amended from time to time, and the rules and regulations promulgated
thereunder.
1.08 "Committee" shall mean the Compensation Committee of the Board
or any such other committee designated by the Board, which shall consist of
at least three members of the Board each of whom are not employees of Group
or any of its subsidiaries.
1.09 "Disability" shall have the meaning set forth in the Executive
Long Term Disability Plan of FPL Group, Inc. and Affiliates.
1.10 "EBPAC" shall have the meaning set forth in the Pension Plan.
1.11 "Effective Date" shall mean January 1, 1986, the
effective date of the Plan as originally adopted.
1.12 "Employee" shall mean an elected officer of Group or Florida
Power & Light Company, and the President of ESI Energy, Inc.
1.13 "Employer" shall mean Group and any of its
subsidiaries listed in Appendix A.
1.14 "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as it may be amended from time to time,
and the rules and regulations promulgated thereunder.
1.15 "Group" shall mean FPL Group, Inc.
1.16 "Participant" shall mean an Employee who satisfies the
requirements for participation in the Plan in accordance with Section 2.01.
1.17 "Pension Plan" shall mean the FPL Group Employee
Pension Plan, as it may be amended from time to time.
1.18 "Plan" shall mean the plan as set forth in this
document as it may be amended from time to time. This plan shall be
known as the FPL Group, Inc. Supplemental Executive Retirement Plan.
1.19 "Restated Effective Date" shall mean January 1, 1994.
1.20 "Retirement Plan" shall mean the Pension Plan
and the Thrift Plan.
1.21 "Thrift Plan" shall mean the FPL Group Employee
Thrift Plan, as it may be amended from time to time.
ARTICLE II
ELIGIBILITY
2.01 Eligibility for Participation - An Employee
shall become a Participant as follows:
(a) An individual listed on Appendix B shall
remain a Participant hereunder; and
(b) Any other Employee who qualifies for a benefit under
any of the Retirement Plans shall be a Participant in the Plan;
provided such Employee is among a select group of management or highly
compensated employees within the meaning of Section 201(2) of ERISA.
2.02 Terminated Employees - This Plan is applicable only to
Participants who perform one or more hours of service for the Employer on
or after the Restated Effective Date. The rights and benefits of any
participant whose active employment terminated by retirement or otherwise
prior to the Restated Effective Date and his Beneficiaries shall be
determined under the Plan and/or the Benefit Restoration Plan of FPL
Group, Inc. and Affiliates as in effect prior to the Restated Effective Date.
ARTICLE III
BENEFITS
3.01 Benefits -
(a) In General - The benefits under this Plan to which a
Participant shall be entitled shall be (i) the supplemental pension
benefit described in Subsection 3.01(b), and (ii) the supplemental
matching contribution account described in Subsection 3.01(c).
(b) Supplemental Pension Benefit - The "supplemental pension
benefit" shall be the difference, if any, between (1) and (2) where:
(1) is the benefit to which the Participant would be
entitled under the Pension Plan, expressed in the normal
form of benefit, if such benefit was computed (i) as if
benefits under such plan were based upon the Participant's
Base Compensation, (ii) without the annual compensation
limitation imposed by Section 401(a)(17) of the Code, and
(iii) without the restrictions or the limitations imposed by
Sections 415(b) or 415(e) of the Code; and
(2) is the benefit payable to the Participant under
the Pension Plan, expressed in the normal form of benefit.
(c) Supplemental Matching Contribution Account - The
"supplemental matching contribution account" shall be an account
that is credited annually with (i) supplemental matching
contributions described in Subsection 3.01(c)(1), and (ii)
theoretical earnings described in Subsection 3.01(c)(2).
(1) "Supplemental matching contributions" shall for
each year of participation in this Plan be the difference,
if any, between (A) and (B) where:
(A) is the matching contribution allocation to
which the Participant would be entitled under the
Thrift Plan for such year of participation if such
allocation were computed (i) as if the matching
contribution allocation under such plan was based upon
the Participant's Base Compensation, (ii) without the
annual compensation limitation imposed by Section
401(a)(17) of the Code, (iii) without the restrictions
or the limitations imposed by Sections 415(c) or 415(e)
of the Code, and (iv) as if he made After Tax Member
Basic Contributions (within the meaning of the Thrift
Plan) and Tax Saver Member Basic Contributions (within
the meaning of the Thrift Plan) at the same percentage
of Base Compensation as he made such contributions to
the Thrift Plan for such year of participation; and
(B) is the matching contribution allocated to the
Participant under the Thrift Plan for such year of
participation.
(2) "Theoretical earnings" shall be the income, gains
and losses which would have been credited on a Participant's
account balance if such account were invested in the Company
Stock Fund (within the meaning of the Thrift Plan) offered
as a part of the Thrift Plan.
(d) Benefits for Class A Executives - In the case of a
Participant who is a Class A Executive, Subsections 3.01(b) and
3.01(c) shall be applied by substituting the term, "Bonus
Compensation" for the term,"Base Compensation".
(e) Prior Benefit - With respect to a Participant
described in Subsection 2.01(a), in no event shall such
Participant's benefits under this Section 3.01 be less than
his benefits accrued as of December 31, 1993 under both the
Plan and the Benefit Restoration Plan of FPL Group, Inc. and
Affiliates as in effect on that date.
3.02 Vesting of Benefits -
(a) In General - Except as otherwise provided in this
Section 3.02, if the Participant's employment with the
Employer and all of its affiliates is terminated (whether
such termination is initiated by the Participant, the
Employer or its affiliates, and without regard to the reason
therefor) before the Participant reaches Normal or Early
Retirement Age (as defined in the respective Retirement Plan)
and fully vested in a benefit under all Retirement Plans, no
benefits shall be payable under this Plan.
(b) Accelerated Vesting Upon Death, Disability, or
Change of Control - If the Participant's employment with the
Employer and all of its affiliates is terminated as a result
of death, Disability, or Change of Control (irrespective of
whether such termination is initiated by the Participant or the
Employer or its affiliates and without regard to the reason
therefor), all benefits accrued hereunder for the Participant
shall become fully vested and shall be paid in accordance with
Subsection 3.04(b).
(c) Termination for Cause. Except as provided in
Subsection 3.02(b), if the termination of a Participant's
employment with the Employer and all of its affiliates is
as a result of or caused by the Participant's theft or
embezzlement from the Employer or any of its affiliates, the
violation of a material term or condition of his employment,
the disclosure by the Participant of confidential information
of the Employer or its affiliates, the commission of a crime
of moral turpitude by the Participant, the Participant's
stealing trade secrets or intellectual property owned by the
Employer or its affiliates, the commission of fraud, disloyalty,
dishonesty or willful violation of any law or company policy, any
act by the Participant in competition with the Employer or its
affiliates, or any other act, activity or conduct of the
Participant which in the opinion of the Board is adverse to the
best interests of the Employer or its affiliates, then the
benefits of such Participant hereunder, to the extent not yet
received, shall become null and void effective as of the date of
the occurrence of the event which results in the Participant
ceasing to be an employee of the Employer and all of its
affiliates and any purported claim for benefits by or on behalf
of said Participant following such date shall be of no effect.
3.03 Transfer of Employment -
(a) Transfer to Nonparticipating Affiliate - The benefits
of a Participant who transfers to an affiliate of the Employer
(other than Group or any of its subsidiaries listed in Appendix A)
shall be determined under Section 3.01 by taking into consideration
only (i) the Participant's Base Compensation or Bonus Compensation
for services performed for the Employer, and (ii) the Participant's
years of service with the Employer for purposes of determining
accrual of benefits. Such Participant shall continue as a
Participant until the occurrence of his death, Disability, Change of
Control, or other termination of employment with all affiliates of
the Employer.
(b) Transfer from Nonparticipating Affiliate - The benefits
of a Participant who was previously employed by an affiliate of
the Employer (other than Group or any of its subsidiaries listed
in Appendix A) immediately before his employment with the
Employer shall be determined under Section 3.01 as if the
Participant's employment with the affiliate of the Employer was
performed for the Employer, except that such Participant's Base
Compensation and Bonus Compensation shall not include any bonuses
paid by an affiliate.
3.04 Payment of Benefits -
(a) Time and Method of Payment of Normal or Early Retirement
Benefits - Except as otherwise provided in Subsections 3.04(b) and
3.04(c), the benefits to which a Participant or his Beneficiary
are entitled under this Plan shall be paid at the same time and in
the same manner as the Participant's benefits under each of the
Retirement Plans to which his benefits under this Plan relate.
Notwithstanding the foregoing, benefits may be distributable in a
lump sum or in such other form as may be agreed in writing by the
Participant and EBPAC (or its delegatee). Any optional form of
benefit payable under this Plan shall be the actuarial equivalent
(within the meaning of the applicable Retirement Plan) of the
benefit, expressed in the normal form of benefit, otherwise payable
under this Plan.
(b) Time and Method of Payment of Benefits Upon Death,
Disability, or Change of Control - If the Participant's employment
with the Employer and all of its affiliates is terminated as a
result of death, Disability, or Change of Control (irrespective of
whether such termination is initiated by the Participant or the
Employer or its affiliates and without regard to the reason
therefor), all benefits accrued hereunder for the Participant
shall be paid to the Participant or his Beneficiary, as the case
may be, at the option of the Participant or if the Participant is
deceased, at the option of such Beneficiary, in a lump sum
distribution to be made not later than three months after the
occurrence of such event or in the same manner as the Participant's
benefits under each of the Retirement Plans to which his benefits
under this Plan relates.
(c) No Company Stock Distributable - In no event shall a
Participant or Beneficiary receive the benefits to which he is
entitled to under this Plan in the form of Company Stock (as
defined in the Thrift Plan).
(d) No Spousal Rights - Nothing contained in this Plan is
intended to give or shall give any spouse or former spouse of a
Participant or any other person any right to benefits under the
Plan by virtue of Code Sections 401(a)(11) or 417 or ERISA
Section 205 (relating to qualified preretirement survivor
annuities and qualified joint and survivor annuities) or Code
Section 401(a)(13)(B) or 414(p) or ERISA Section 206(d)(3)
(relating to qualified domestic relations orders).
3.05 Taxes - Notwithstanding the foregoing, all
amounts payable hereunder shall be reduced by any and all federal,
state and local taxes imposed upon the Participant or his Beneficiary
which are required to be paid or withheld by the Employer.
3.06 Offset for Obligations to Employer - Subject to Section
3.05, if, at such time as a Participant or his Beneficiary becomes
entitled to benefit payments hereunder, the Participant has any debt,
obligation, or other liability representing an amount owing to the
Employer or its affiliates, the Employer may offset the amount owing it or
its affiliates against the amount of benefits otherwise distributable
hereunder notwithstanding any provision of this Plan to the contrary.
ARTICLE IV
ADMINISTRATION
4.01 Administration - The Committee (or its delegatee) and EBPAC
(or its delegatee) shall administer and interpret this Plan in accordance
with the provisions of the Plan and in their sole and absolute discretion.
Any determination or decision by the Committee (or its delegatee) or EBPAC
(or its delegatee) shall be conclusive and binding on all persons who at any
time have, have had, or claim to have any interest whatsoever under this Plan.
4.02 Liability of Committee or EBPAC; Indemnification - To the extent
permitted by law, no member of the Committee (or its delegatee) or EBPAC
(or its delegatee) shall be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this
Plan unless attributable to his own gross negligence or willful misconduct.
The Employer shall indemnify the members of the Committee (or its delegatee)
and EBPAC (or its delegatee) against any and all claims, losses, damages,
expenses, including any counsel fees and costs, incurred by them, and any
liability, including any amounts paid in settlement with their approval,
arising from their action or failure to act, except when the same is
judicially determined to be attributable to their gross negligence or
willful misconduct.
4.03 Determination of Benefits -
(a) Claim - A person who believes that he is being denied a
benefit to which he is entitled under the Plan (hereinafter
referred to as a "Claimant") may file a written request for such
benefit with EBPAC (or its delegatee), setting forth his claim.
The request must be addressed to EBPAC (or its delegatee) at its
then principal place of business.
(b) Claim Decision - Upon receipt of a claim, EBPAC (or its
delegatee) shall advise the Claimant that a reply will be forthcoming
within 90 days and shall, in fact, deliver such reply within such
period. EBPAC (or its delegatee) may, however, extend the reply
period for an additional 90 days for reasonable cause.
If the claim is denied in whole or in part, EBPAC (or its
delegatee) shall adopt a written opinion, using language calculated
to be understood by the Claimant, setting forth (i) the specific
reason or reasons for such denial, (ii) the specific references to
pertinent provisions of the Plan on which such denial is based,
(iii) a description of any additional material or information
necessary for the Claimant to perfect his claim and an explanation
why such material or such information is necessary, (iv) appropriate
information as to the steps to be taken if the Claimant wishes to
submit the claim for review, and (v) the time limits for requesting
a review as described in Subsection 4.03(c) and for review as
described in Subsection 4.03(d).
(c) Request for Review - Within 60 days after the receipt
by the Claimant of the written opinion described in Subsection
4.03(b), the Claimant may request in writing that the Committee
(or its delegatee) review the initial determination. Such
request must be addressed to the Committee (or its delegatee), at
its then principal place of business. The Claimant or his duly
authorized representative may, but need not, review the pertinent
documents and submit issues and comments in writing for
consideration by the Committee (or its delegatee). If the Claimant
does not request a review of EBPAC's (or its delegatee s)
determination within such 60 day period, he shall be barred and
estopped from challenging EBPAC's (or its delegatee's) determination.
(d) Review of Decision - Within 60 days after the Committee's
(or its delegatee s) receipt of a request for review, the Committee
(or its delegatee) will review the initial determination. After
considering all materials presented by the Claimant, the Committee
(or its delegatee) will render a written opinion, written in a
manner calculated to be understood by the Claimant, setting forth
the specific reasons for the decision and containing specific
references to the pertinent provisions of the Plan on which the
decision is based. If special circumstances require that the 60
day time period be extended, the Committee (or its delegatee) will
so notify the Claimant and the Committee (or its delegatee) will
render the decision as soon as possible, but no later than 120 days
after receipt of the request for review.
4.04 Payment Due an Incompetent - If EBPAC (or its delegatee)
receives evidence that the Participant or Beneficiary entitled to receive
any payment under the Plan is physically or mentally incompetent to receive
such payment, EBPAC (or its delegatee) may, in its sole discretion, direct
the payment to any other person or trust which has been legally appointed
by the courts.
4.05 Expenses - The cost of this Plan and the
expenses of administering the Plan shall be borne by the Employer.
ARTICLE V
AMENDMENT AND TERMINATION
5.01 Amendment -
(a) In General - Except to the extent otherwise reserved
to the Board, the Committee shall have the right to amend this Plan at any
time and from time to time, including a retroactive amendment. The Board
expressly reserves the right to amend Sections 1.01, 1.03, 1.04, 1.05,
1.06, 1.08, 1.12, 1.13, 1.16, 2.01, 3.01, 3.02, 3.04(b), 5.01, 5.02, 5.03,
and 6.02 hereof and shall have the right to amend any such section or
sections at any time or from time to time, including a retroactive
amendment. Any such amendment shall become effective upon the date stated
therein, and shall be binding on the Participant and his Beneficiary,
except as otherwise provided in such amendment or this Section 5.01.
(b) Amendment Affecting Accrued Benefit - No amendment to
the Plan (including a change in the actuarial basis for determining
optional or early retirement benefits) shall be effective to the extent
that it has the effect of decreasing a Participant s benefits accrued under
the Plan as of the date of such amendment.
(c) Amendment of Vesting Schedule - If the vesting provisions
of the Plan are amended in any way that directly or indirectly affects the
computation of a Participant's vested benefits accrued under the Plan, each
Participant may elect to have his vested benefits accrued under the Plan
computed without regard to such amendment, except that no such election
shall be required for any Participant whose vested percentage under the
Plan, as amended, cannot at any time be less than such Participant's
vested percentage determined without regard to such amendment.
5.02 Termination or Merger of the Plan - Group has established
this Plan with the bona fide intention and expectation that from year to
year it will deem it advisable to continue it in effect. However, the
Board, in its sole discretion, reserves the right to terminate the Plan
in its entirety at any time. In the event this Plan is terminated, the
rights of all affected participants to benefits accrued under the Plan
as of the date of such termination shall be immediately vested, subject
to Subsection 3.02(c). In the event of a merger or consolidation of
this Plan with any other plan, each Participant s benefits under the
Plan immediately after such merger or consolidation shall be equal to or
greater than the accrued benefits the Participant would have received
had the Plan terminated immediately before the merger or consolidation.
5.03 Supplements - In adopting the Plan or at any time thereafter,
an Employer may adopt a Supplement which modifies or adds to the Plan.
Any Supplement shall be effective only if approved by the Committee, and
the Board if, and to the extent, that such Supplement modifies a provision
of a section enumerated in Section 5.01 which is amendable only by the
Board. Upon its effective date, such Supplement shall be deemed
incorporated by reference into the Plan as adopted by such Employer. In
the event of any discrepancy between a Supplement and the provisions of the
Plan, the provisions of the Supplement shall govern.
ARTICLE VI
MISCELLANEOUS
6.01 No Trust Created - Nothing contained in this Plan, and no
action taken pursuant to its provisions by the Employer or its affiliates
shall create, or be construed to create, a trust of any kind, or a fiduciary
relationship between the Employer and the Participants or their beneficiaries.
6.02 Funding - The Employer is not required to and shall not fund
(within the meaning of the Federal tax laws) this Plan. The benefits payable
under this Plan to Participants or their Beneficiaries may be made from the
general assets of the Employer or from such other assets earmarked, deposited,
contributed to a trust, or otherwise set aside to fund benefits under this
Plan. It is intended that the Employer s obligation under this Plan be an
unfunded and unsecured promise to pay money in the future. Any funds
earmarked, deposited, contributed to a trust, or otherwise set aside by the
Employer to assist it in satisfying its obligations under this Plan shall be
subject to the claims of general creditors of the Employer. The Participants
(or their Beneficiaries') rights to benefits under this Plan which are payable
by the Employer shall be no greater than the right of any unsecured general
creditor of the Employer, and the Participants (and their Beneficiaries)
shall not have any security interest in any assets (including, but not
limited to, assets earmarked, deposited, contributed to a trust, or
otherwise set aside to fund benefits provided under the Plan) of the Employer.
6.03 Top Hat Plan - It is the Employer's intention that this Plan
be construed as an unfunded, nonqualified deferred compensation plan
maintained for a select group of management or highly compensated employees
within the meaning of Section 201(2) of ERISA.
6.04 Effect on Benefits under other Plans - Any benefits payable
under this Plan shall not be considered salary or other compensation to the
Participant for purposes of computing benefits to which he may be entitled
under any other employee benefit plan established or maintained by the
Employer or its affiliates, except to the extent provided in such other
employee benefit plan.
6.05 Spendthrift Clause - Except as provided in Sections 3.05 and
3.06, no right, title or interest of any kind in the Plan shall be
transferable or assignable by a Participant or Beneficiary or be subject
to alienation, anticipation, encumbrance, garnishment, attachment,
execution or levy of any kind, whether voluntary or involuntary nor
subject to the debts, contracts, liabilities, engagements, or torts of
a Participant or Beneficiary. Any attempt to alienate, sell, transfer,
assign, pledge, garnish, attach or otherwise subject to legal or
equitable process or encumber or dispose of any interest in the Plan
shall be void, except as provided by Sections 3.05 and 3.06.
6.06 Rights Against the Employer - The establishment of this
Plan shall not be construed as giving to a Participant, Beneficiary,
employee or any person whomsoever, any legal, equitable or other rights
against Group or its affiliates, or their officers, directors, agents
or shareholders, or as giving to the Participant, Beneficiary, employee
or any person whomsoever any equity or other interest in the assets,
business or shares of Group or its affiliates' stock.
6.07 No Contract of Employment - Nothing contained in this Plan
shall be construed to be a contract of employment or as conferring upon a
Participant the right to continue to be employed by the Employer in his
present capacity or in any capacity. The Participant shall be subject
to discharge to the same extent he would have been if this Plan had never
been adopted.
6.08 Indemnity Upon Change of Control - If upon a Change of
Control it becomes necessary for a Participant (or his Beneficiary) to
institute a claim, by litigation or otherwise, to enforce his rights
under this Plan, Group (and its successors and assigns) shall indemnify
such Participant (or his Beneficiary) from and against all costs and
expenses, including legal fees, incurred by him in instituting and
maintaining such claim.
6.09 Successors - This Plan shall be binding upon Group and its
successors and assigns, and Participants, their Beneficiaries, successors,
heirs, executors, administrators and beneficiaries.
6.10 Severability - In the event that any provision of this Plan
shall be declared illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions of this Plan but
shall be fully severable and this Plan shall be construed and enforced as
if said illegal or invalid provision had never been inserted herein.
6.11 Governing Law - The validity and effect of this
Plan and the rights and obligations of all persons affected hereby
shall be construed and determined in accordance with the laws of the
State of Florida unless superseded by federal law.
6.12 Construction - The article and section headings and numbers
are included only for convenience of reference and are not to be taken
as limiting or extending the meaning of any of the terms and provisions
of this Plan. Whenever appropriate, words used in the singular shall
include the plural or the plural may be read as the singular. When used
herein, the masculine gender includes the feminine gender.
IN WITNESS WHEREOF, the Board of Directors has caused this Plan
to be signed by its duly appointed officers and its corporate seal to be
hereunto affixed as of the day and year first written above.
ATTEST: FPL GROUP, INC.
MARK MITCHELL By: L.J. KELLEHER
Title: Sr. Vice President
(Seal)
EXHIBIT 10(f)
FPL GROUP, INC.
DEFERRED COMPENSATION PLAN
Amended and Restated
Effective January 1, 1995
<PAGE>
FPL GROUP, INC.
DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
Page
ARTICLE 1 - DEFINITIONS
1.01 Account ...................................................... 2
1.02 Board ....................................................... 2
1.03 Bonus ....................................................... 2
1.04 Change of Control ............................................ 2
1.05 Committee ................................................... 4
1.06 Common Stock ................................................ 4
1.07 Company ..................................................... 4
1.08 Compensation ................................................ 4
1.09 Director's Fees ............................................. 4
1.10 Disability .................................................. 4
1.11 Distribution Date ........................................... 4
1.12 EBPAC ....................................................... 5
1.13 Effective Date .............................................. 5
1.14 Eligible Individual ......................................... 5
1.15 Employer ..................................................... 5
1.16 ERISA ....................................................... 5
1.17 IRC ......................................................... 5
1.18 Market Value Per Share ...................................... 5
1.19 Non-Employee Director ...................................... 5
1.20 Participant ................................................. 6
1.21 Phantom Stock Account ....................................... 6
1.22 Phantom Stock Unit ........................................... 6
1.23 Plan ......................................................... 6
1.24 Plan Year .................................................... 6
1.25 Restated Effective Date ..................................... 6
ARTICLE 2 - ELIGIBILITY
2.01 Eligibility to Participate in the Plan ...................... 6
ARTICLE 3 - DEFERRED COMPENSATION BENEFITS
3.01 Election to Defer Compensation, Bonus, and Director's Fees ... 6
3.02 Establishment and Maintenance of Cash Account ................ 7
3.03 Investment of Cash Account .................................. 7
3.04 Non-Employee Director Investment in Phantom Stock Account ... 7
ARTICLE 4 - PAYMENT OF BENEFITS
4.01 Timing and Form of Payment .................................. 8
4.02 Hardship Distributions ...................................... 9
4.03 Distribution Upon a Change of Control ....................... 9
4.04 Beneficiary Designation ..................................... 9
4.05 Taxes ....................................................... 9
4.06 Offset for Obligations to Employer .......................... 9
ARTICLE 5 - ADMINISTRATION
5.01 Administration .............................................. 10
5.02 Liability of Committee and EBPAC; Indemnification ........... 10
5.03 Determination of Benefits ................................... 10
5.04 Expenses .................................................... 11
ARTICLE 6 - MISCELLANEOUS
6.01 No Trust Created ............................................ 11
6.02 No Requirement to Fund ...................................... 12
6.03 Benefits Payable from General Assets ........................ 12
6.04 Successors .................................................. 12
6.05 No Contract of Employment ................................... 12
6.06 Amendment or Termination of Plan ............................ 12
6.07 Top Hat Plan ................................................ 13
6.08 Governing Law ............................................... 13
6.09 Severability ................................................ 13
6.10 Construction ................................................ 13
6.11 Merger or Consolidation or Sale of Assets of Employer ....... 13
6.12 Transfer to an Affiliate of the Company ..................... 13
6.13 Assignment .................................................. 13
6.14 Incapacity .................................................. 14
6.15 Effect on Benefits under other Plans ........................ 14
6.16 Indemnity Upon Change of Control ............................ 14
6.17 No Rights as Stockholders ................................... 14
Execution Page .............................................. 14
<PAGE>
FPL GROUP, INC.
DEFERRED COMPENSATION PLAN
THIS DEFERRED COMPENSATION PLAN (the "Plan") effective as
of January 1, 1995, amends and restates the FPL Group, Inc. Deferred
Compensation Plan, which was originally adopted by the Board of
Directors of FPL Group, Inc. (the "Company") effective as of January
1, 1995.
W I T N E S S E T H T H A T:
WHEREAS, the officers of the Company and its affiliates
(hereinafter collectively referred to as the "Employer") are entitled
to fees which result from or are attributable to their performance of
services as employees of the Employer and may be awarded bonuses
pursuant to the Annual Incentive Plan and other incentive
compensation plans; and
WHEREAS, directors of the Employer are entitled to fees
which result from or are attributable to their performance of
services as directors of the Employer; and
WHEREAS, the Employer desires to establish a deferred
compensation plan for the exclusive benefit of a select group of
officers and directors of the Employer pursuant to which such
officers may elect to defer receipt of all or a portion of their base
salary and/or bonuses and directors may elect to defer receipt of all
or a portion of their directors' fees; and
WHEREAS, the Employer intends that the Plan be considered
an unfunded arrangement that is maintained primarily to provide
deferred compensation to members of a select group of management or
highly compensated employees of the Employer, for purposes of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA");
NOW, THEREFORE, the deferred compensation plan set forth
herein is hereby amended and restated as of the Restated Effective
Date:
ARTICLE 1
Definitions
The following terms when used herein shall have the
designated meaning unless a different meaning is plainly required by
the context in which the term is used:
1.01 "Account" shall collectively refer to the Cash Account
described in Sections 3.02 and 3.03, and the Phantom
Stock Account described in Section 3.04, if applicable.
1.02 "Board" shall mean the Board of Directors of the Company.
1.03 "Bonus" shall mean any bonus that the Participant is
awarded pursuant to the Annual Incentive Plan and such
other payments awarded under such other incentive
compensation plans that are designated by the Senior Vice
President of Human Resources of the Company as eligible
for deferral under this Plan.
1.04 "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 of 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.
1.05 "Committee" shall mean the Compensation Committee of the
Board or any such other committee designated by the
Board, which shall consist of at least three (3) members
of the Board each of whom are not employees of the
Company or any of its subsidiaries.
1.06 Common Stock shall mean the common stock, $.01 par
value per share, of the Company.
1.07 "Company" shall mean FPL Group, Inc.
1.08 "Compensation" shall mean the base salary of a
Participant paid by the Employer, exclusive of Bonus and
Director's Fees.
1.09 "Director's Fees" shall mean the fees of a Participant
which result from or are attributable to the performance
of services by such Participant as a director of the
Employer.
1.10 "Disability" shall have the meaning set forth in the Long
Term Disability Plan For Employees of FPL Group and
Affiliates.
1.11 "Distribution Date" shall mean:
(a) the first day of the first month following the
earlier of the Participant's retirement, death,
Disability, or other termination of service,
(b) the first day of the first Plan Year following
the earlier of the Participant's retirement,
death, Disability, or other termination of
service, or
(c) subject to EBPAC (or its delegatee) authorizing a
Participant to select a specific date on which
his benefits under the Plan shall commence, the
date so specified by the Participant,
or as soon thereafter as is administratively feasible, as
elected by the Participant. For any such election to be
valid, it must be made during an election period
established by EBPAC (or its delegatee). It is the
intent of the Employer that such election period end
before the time in which a Participant s benefits under
this Plan would otherwise be treated as constructively
received or the economic benefit of which would be
enjoyed (within the meaning of the Federal tax laws). In
the event the Participant fails to elect one of the dates
described above, his "Distribution Date" shall be the
first day of the first month following the Participant's
retirement, death, Disability, or other termination of
service or as soon thereafter as is administratively
feasible.
1.12 "EBPAC" shall have the same meaning set forth in the FPL
Group Employee Pension Plan.
1.13 "Effective Date" means January 1, 1995.
1.14 "Eligible Individual" shall mean any officer, director in
grade 12 or above, or member of the Board of Directors of
the Employer.
1.15 "Employer" shall mean the Company and its affiliates.
1.16 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.17 "IRC" shall mean the Internal Revenue Code of 1986, as
amended.
1.18 Market Value Per Share shall mean the average of the
high and low selling prices on the relevant date for
shares of Common Stock as reported on the Composite
Transactions Tape of the New York Stock Exchange, Inc. on
such date (or, if such date shall not be a trading day,
the next preceding day which shall be a trading day). If
no sale occurs on such date, the Market Value Per Share
shall be determined, in the manner described above, as of
the last preceding trading date prior to the relevant
date on which a sale occurs or shall be determined in
good faith by the Committee.
1.19 Non-Employee Director shall mean a member of the Board
who is not an employee of the Company or any of its
subsidiaries.
1.20 "Participant" shall mean an Eligible Individual who has
elected to defer Compensation, Bonus, and/or Director's
Fees, as provided in Section 3.01.
1.21 Phantom Stock Account shall refer to the account
described in Section 3.04.
1.22 Phantom Stock Unit shall mean a theoretical unit of
Common Stock.
1.23 "Plan" shall mean the FPL Group, Inc. Deferred
Compensation Plan, as contained herein, and as may be
amended from time to time.
1.24 "Plan Year" shall mean the calendar year.
1.25 Restated Effective Date shall mean January 1, 1995.
ARTICLE 2
Eligibility
2.01 Eligibility to Participate in the Plan. Each Eligible
Individual shall be eligible to participate in the Plan,
provided such individual is among a select group of
management and highly compensated employees (within the
meaning of ERISA 201(2)).
ARTICLE 3
Deferred Compensation Benefits
3.01 Election to Defer Compensation, Bonus, and Director's
Fees. Each Eligible Individual may elect to defer all or
a portion of his Compensation, Bonus, and/or Director's
Fees with respect to any Plan Year commencing on or after
the Effective Date of this Plan by completing and signing
a deferral agreement prior to the beginning of such Plan
Year.
If a Participant incurs a financial hardship (as
determined by EBPAC (or its delegatee)) and the
Participant requests in writing a reduction or
elimination of deferrals for the remainder of a Plan
Year, EBPAC (or its delegatee), in its sole and absolute
discretion, may reduce or eliminate such future
deferrals.
Notwithstanding anything to the contrary in this Plan,
the amount to be deferred under this Plan may not reduce
the amount of Compensation, Bonus, and Director's Fees
which would be paid to the Participant (determined after
taking the election into account) below that required to
pay the Participant's portion of any taxes due under
Chapter 21 (Federal Insurance Contributions Act) of the
IRC, any other employment taxes, and the amount, if any,
required to be withheld for income tax purposes.
3.02 Establishment and Maintenance of Cash Account. The
amounts deferred by a Participant shall be credited to a
separate account (a Cash Account ) maintained for the
Participant, as of the date such amounts would otherwise
have been paid to the Participant, on books established
by the Employer for that purpose in accordance with IRC
404(a)(5). The Employer shall provide to each
Participant, within one hundred twenty (120) days after
the end of each Plan Year, a statement setting forth the
balance in the Participant s Cash Account.
3.03 Investment of Cash Account. Amounts credited to the Cash
Account of a Participant will be deemed invested in one
or more investment funds selected by the Employer. Each
Participant (or his beneficiary if the Participant is
deceased) shall designate the investment fund(s) under
which his deferrals under this Plan are to be
hypothetically invested. The Cash Account shall be
adjusted each business day to reflect the hypothetical
income, gain and loss, including any unrealized
appreciation or depreciation; provided, however, that
adjustments to a Non-Employee Director s Phantom Stock
Account shall be made as described in Sections 3.04(b),
3.04(c), and 3.04(d).
3.04 Non-Employee Director Investment in Phantom Stock Account.
(a) In addition to the investment funds made
available pursuant to Section 3.03, a Non-
Employee Director may designate that deferrals of
his Director s Fees under this Plan be deemed to
be invested in Phantom Stock Units. The number
of Phantom Stock Units credited to such
director s Phantom Stock Account shall equal the
dollar amount of deferred Director s Fees
designated by such Non-Employee Director to be
invested in hypothetical Phantom Stock Units,
divided by the Market Value Per Share on the date
that such deferred compensation would otherwise
have been paid to such director. The number of
such Phantom Stock Units shall be computed to
four decimal places.
(b) From time to time, an amount shall be credited to
a Non-Employee Director s Cash Account equal to
the amount of any cash dividend paid on Common
Stock (or the fair market value of a dividend
paid in property, other than a dividend paid in
Common Stock) which the Non-Employee Director
would have received if on the record date for
such dividend the Non-Employee Director had been
the owner of record of a number of shares of
Common Stock equal to the number of Phantom Stock
Units (including fractions) then credited to his
Phantom Stock Account.
(c) From time to time, additional Phantom Stock Units
shall be credited to a Non-Employee Director s
Phantom Stock Account in amounts equal to the
number of full and fractional shares of Common
Stock which the Non-Employee Director would have
received if on the record date for a dividend
paid in Common Stock the Non-Employee Director
had been the owner of record of a number of
shares of Common Stock equal to the number of
Phantom Stock Units (including fractions) then
credited to his Phantom Stock Account.
(d) The Phantom Stock Account shall be appropriately
adjusted for any change in the Common Stock by
reason of any recapitalization, reorganization,
merger, consolidation, split-up, or any similar
change affecting the Common Stock.
ARTICLE 4
Payment of Benefits
4.01 Timing and Form of Payment. The Employer shall pay to
the Participant (or his beneficiary if the Participant is
deceased) his entire Account in cash in:
(a) a single sum on the Distribution Date, or
(b) substantially equal monthly installments
commencing on the Distribution Date and
continuing for a period of up to 10 years,
as elected by the Participant. For any such election to
be valid, it must be made during an election period
established by EBPAC (or its delegatee). It is the
intent of the Employer that such election period end
before the time in which a Participant s benefits under
this Plan would otherwise be treated as constructively
received or the economic benefit of which would be
enjoyed (within the meaning of the Federal tax laws). In
the event the Participant fails to elect the form of
distribution described above, the Employer shall pay to
the Participant (or his beneficiary if the Participant is
deceased) his entire Account in a single sum on the
Distribution Date.
Upon distribution of a Non-Employee Director's Phantom
Stock Account in cash, a Non-Employee Director shall be
entitled to receive, subject to the provisions of
Sections 4.05 and 4.06 of this Plan, a sum equal to the
number of Phantom Stock Units credited to such Non-
Employee Director's Phantom Stock Account, multiplied by
the Market Value Per Share on the Distribution Date.
For purposes of this Plan, if the Participant transfers
from one Employer to another Employer, such transfer
shall not be considered a termination of service, and a
termination of service shall occur only when the
Participant separates from the employ of all Employers.
4.02 Hardship Distributions. The Participant shall be
entitled to a distribution of all or a portion of his
Account upon written application to EBPAC (or its
delegatee) and the determination of EBPAC (or its
delegatee) and the Committee (or its delegatee), in their
sole and absolute discretion, that without such
distribution, the Participant would suffer or continue to
suffer a financial hardship. No hardship distributions
shall be allowable pursuant to this Section prior to
September 11, 1995.
4.03 Distribution Upon a Change of Control. Anything in this
Plan to the contrary notwithstanding, if a Change of
Control occurs and as a result of such Change in Control
the Participant s employment with the Company or its
affiliated companies is terminated, then the Employer
shall pay to the Participant (or his beneficiary if the
Participant is deceased) his entire Account in a single
sum on the first day of the month following the
termination of employment.
4.04 Beneficiary Designation. For purposes of this Plan, a
Participant's beneficiaries under this Plan shall be the
beneficiaries designated by such Participant for the
death benefits provided pursuant to the split dollar
arrangement entered into with the Employer. If a
Participant has not entered into a split dollar
arrangement with the Employer, such Participant s
beneficiaries under this Plan shall be the beneficiaries
of his death benefits under the Medical, Dental and Life
Insurance Plan for Employees of FPL Group, Inc. (or any
successor plan thereof). If a Participant desires to
designate beneficiaries other than those described above,
the Participant may submit a written designation of
beneficiary(s), which shall become effective when
received by the Employer and shall revoke all prior
designations.
If a Participant is not a participant in either of the
above described plans, the Participant may submit a
written designation of beneficiary(s), which shall become
effective when received by the Employer and shall revoke
all prior designations. If no such designation has been
received by the Employer prior to the Participant s
death, the Participant s beneficiary shall be his estate.
4.05 Taxes. All amounts payable to any Participant hereunder
may be reduced by any and all federal, state and local
taxes imposed upon the Participant or his beneficiary
which are required to be withheld by the Employer.
4.06 Offset for Obligations to Employer. If, at such time as
a Participant becomes entitled to benefit payments
hereunder, the Participant has any debt, obligation, or
other liability representing an amount owing to the
Employer, the Employer may offset the amount owing it
against the amount of benefits otherwise distributable
hereunder.
ARTICLE 5
Administration
5.01 Administration. The Committee (or its delegatee) and
EBPAC (or its delegatee) shall administer and interpret
this Plan in accordance with the provisions of the Plan
and in their sole and absolute discretion. Any
determination or decision by the Committee (or its
delegatee) or EBPAC (or its delegatee) shall be
conclusive and binding on all persons who at any time
have, have had, or may have a claim to any interest
whatsoever under this Plan.
5.02 Liability of Committee and EBPAC; Indemnification. To
the extent permitted by law, no member of the Committee
(or its delegatee) or EBPAC (or its delegatee) shall be
liable to any person for any action taken or omitted in
connection with the interpretation and administration of
this Plan unless attributable to his own gross negligence
or willful misconduct. The Employer shall indemnify the
members of the Committee (or its delegatee) and EBPAC (or
its delegatee) against any and all claims, losses,
damages, expenses, including any counsel fees and costs,
incurred by them, and any liability, including any
amounts paid in settlement with their approval, arising
from their action or failure to act, except when the same
is judicially determined to be attributable to their
gross negligence or willful misconduct.
5.03 Determination of Benefits.
(a) Claim. A person who believes that he is being
denied a benefit to which he is entitled under
the Plan (hereinafter referred to as a
"Claimant") may file a written request for such
benefit with EBPAC (or its delegatee), setting
forth his claim. The request must be addressed
to EBPAC (or its delegatee) at its then principal
place of business.
(b) Claim Decision. Upon receipt of a claim, EBPAC
(or its delegatee) shall advise the Claimant that
a reply will be forthcoming within ninety (90)
days and shall, in fact, deliver such reply
within such period. EBPAC (or its delegatee)
may, however, extend the reply period for an
additional ninety (90) days for reasonable cause.
If the claim is denied in whole or in part, EBPAC
(or its delegatee) shall deliver to the claimant
a written opinion, using language calculated to
be understood by the Claimant, setting forth (i)
the specific reason or reasons for such denial,
(ii) the specific reference to pertinent
provisions of this Plan on which such denial is
based, (iii) a description of any additional
material or information necessary for the
Claimant to perfect his claim and an explanation
why such material or such information is
necessary, (iv) appropriate information as to the
steps to be taken if the Claimant wishes to
submit the claim for review, and (v) the time
limits for requesting a review under
Subsection (c) and for review under Subsection
(d) hereof.
(c) Request for Review. Within sixty (60) days after
the receipt by the Claimant of the written
opinion described above, the Claimant may request
in writing that the Committee (or its delegatee)
review the determination of EBPAC (or its
delegatee). Such request must be addressed to
the Committee (or its delegatee), at its then
principal place of business. The Claimant or his
duly authorized representative may, but need not,
review the pertinent documents and submit issues
and comments in writing for consideration by the
Committee (or its delegatee). If the Claimant
does not request a review of EBPAC's (or its
delegatee's) determination by the Committee (or
its delegatee) within such sixty (60) day period,
he shall be barred and estopped from challenging
EBPAC's (or its delegatee's) determination.
(d) Review of Decision. Within sixty (60) days after
the Committee's (or its delegatee's) receipt of a
request for review, the Committee (or its
delegatee) will review the initial determination.
After considering all materials presented by the
Claimant, the Committee (or its delegatee) will
render a written opinion, written in a manner
calculated to be understood by the Claimant,
setting forth the specific reasons for the
decision and containing specific references to
the pertinent provisions of this Plan on which
the decision is based. If special circumstances
require that the sixty (60) day time period be
extended, the Committee (or its delegatee) will
so notify the Claimant and the Committee (or its
delegatee) will render the decision as soon as
possible, but no later than one hundred twenty
(120) days after receipt of the request for
review.
5.04 Expenses. The cost of this Plan and the expenses of
administering the Plan shall be borne by the Employer.
ARTICLE 6
Miscellaneous
6.01 No Trust Created. Nothing contained in this Plan, and no
action taken pursuant to its provisions by either party
shall create, or be construed to create, a trust of any
kind, or a fiduciary relationship between the Employer
and the Participants or their beneficiaries.
6.02 No Requirement to Fund. The Employer is not required to
and shall not fund (within the meaning of the Federal tax
laws) this Plan. Even though amounts deferred under this
Plan are credited to the Accounts of the Participants,
the Employer shall not be required to earmark, deposit,
contribute to a trust, or otherwise set aside funds for
such Accounts.
6.03 Benefits Payable from General Assets. The benefits
payable under this Plan to a Participant or his
beneficiary may be made from the general assets of the
Employer or from such other assets earmarked, deposited,
contributed to a trust, or otherwise set aside to fund
benefits under this Plan. It is intended that the
Employer's obligation under this Plan be an unfunded and
unsecured promise to pay money in the future. Any funds
earmarked, deposited, contributed to a trust, or
otherwise set aside by the Employer to assist it in
satisfying its obligations under this Plan shall be
subject to the claims of general creditors of the
Employer. The Participants' (or their beneficiaries')
rights to benefits under this Plan which are payable by
the Employer shall be no greater than the right of any
unsecured general creditor of the Employer, and the
Participants (and their beneficiaries) shall not have any
security interest in any assets (including, but not
limited to, assets earmarked, deposited, contributed to a
trust, or otherwise set aside to fund benefits provided
under this Plan) of the Employer.
6.04 Successors. This Plan shall be binding upon the Employer
and its successors and assigns, and the Participant, his
successors, heirs, executors, administrators and
beneficiaries.
6.05 No Contract of Employment. Nothing contained in this
Plan shall be construed to be a contract of employment or
as conferring upon an Eligible Individual the right to
continue to be employed by the Employer in his present
capacity or in any capacity.
6.06 Amendment or Termination of Plan. Except to the extent
otherwise reserved to the Committee, the President or any
Vice President or the General Counsel and Secretary of
the Company (the "Corporate Officers") shall have the
right to amend this Plan at any time and from time to
time, including a retroactive amendment. The Committee
expressly reserves the right to terminate the Plan and to
amend Sections 1.01, 1.03, 1.04, 1.05, 1.06, 1.07, 1.08,
1.09, 1.10, 1.11,1.14, 1.15, 1.18, 1.19, 1.20, 1.21,
1.22, 2.01, 3.01, 3.03, 3.04, 4.01, 4.02, 4.03, 4.07,
6.02, 6.03, and 6.06 hereof and shall have the right to
amend any such section or sections at any time or from
time to time, including a retroactive amendment. No
amendment or termination of the Plan shall, without the
consent of any person affected thereby, modify or in any
way affect any right or obligation under this Plan
created prior to such amendment or termination.
6.07 Top Hat Plan. It is the Employer's intention that this
Plan be construed as an unfunded, nonqualified deferred
compensation plan maintained for a select group of
management or highly compensated employees within the
meaning of ERISA 201(2).
6.08 Governing Law. The validity and effect of this Plan and
the rights and obligations of all persons affected hereby
shall be construed and determined in accordance with the
laws of the State of Florida unless superseded by federal
law.
6.09 Severability. In the event that any provision of this
Plan shall be declared illegal or invalid for any reason,
said illegality or invalidity shall not affect the
remaining provisions of this Plan but shall be fully
severable and this Plan shall be construed and enforced
as if said illegal or invalid provisions had never been
inserted herein.
6.10 Construction. The article and section headings and
numbers are included only for convenience of reference
and are not to be taken as limiting or extending the
meaning of any of the terms and provisions of the Plan.
Whenever appropriate, words used in the singular shall
include the plural or the plural may be read as the
singular.
6.11 Merger or Consolidation or Sale of Assets of Employer.
Subject to the requirement that the Employer make
distributions upon termination of a Participant s
employment following a Change of Control, in the event of
the merger or consolidation of the Employer with any
other entity, or in the event substantially all of the
assets of the Employer are to be transferred to another
entity, the successor entity resulting from the merger or
consolidation, or the transferee of such assets, as the
case may be, shall assume the obligations of the Employer
hereunder and shall be substituted for the Employer
hereunder.
6.12 Transfer to an Affiliate of the Company. An election to
defer Compensation, Bonus, and/or Director's Fees under
this Plan shall apply only with respect to Compensation,
Bonus, and/or Director's Fees paid by the Employer. If
the Participant transfers from one Employer to another
Employer and the Participant desires to defer
Compensation, Bonus, and/or Director's Fees paid by the
new Employer, the Participant must execute a separate
deferral agreement.
6.13 Assignment. No right, title or interest of any kind in
the Plan shall be transferable or assignable by a
Participant or beneficiary or be subject to alienation,
anticipation, encumbrance, garnishment, attachment,
execution or levy or any kind, whether voluntary or
involuntary nor subject to the debts, contracts,
liabilities, engagements, or torts of a Participant or
beneficiary, except as provided by Section 4.05 and 4.06.
Except as provided in this Section 6.13, any attempt to
alienate, sell, transfer, assign, pledge, garnish, attach
or otherwise subject to legal or equitable process or
encumber or dispose of any interest in the Plan shall be
void.
6.14 Incapacity. If EBPAC (or its delegatee) determines that
any person to whom any distribution is payable under this
Plan is unable to care for his affairs because of illness
or accident, or is a minor, any payment due (unless a
prior claim therefor has been made by a duly appointed
guardian, committee or other legal representative) may be
paid to the spouse, a child, a parent, or a brother or
sister, or to any person deemed by EBPAC (or its
delegatee) to have incurred expense for such person
otherwise entitled to payment, in such manner as EBPAC
(or its delegatee) may determine. Any such payment shall
be a complete discharge of the liabilities of the
Employer under this Plan.
6.15 Effect on Benefits under other Plans. Any Compensation,
Bonus, or Director's Fees deferred hereunder and any
benefits payable under this Plan shall not be considered
salary or other compensation to the Participant for the
purposes of computing benefits to which he may be
entitled under any other employee benefit plan
established or maintained by the Employer, except to the
extent provided in such other employee benefit plan.
6.16 Indemnity Upon Change of Control. If upon a Change of
Control it becomes necessary for a Participant (or his
beneficiary) to institute a claim, by litigation or
otherwise, to enforce his rights under this Plan, the
Employer (and its successors or transferee in accordance
with Section 6.11) shall indemnify such Participant (or
his beneficiary) from and against all costs and expenses,
including legal fees, incurred by him in instituting and
maintaining such claim.
6.17 No Rights as Stockholders. A Non-Employee Director who
elects pursuant to Section 3.04 to invest deferred
Director s Fees in Phantom Stock Units will not have any
rights as a result of such investment arising out of the
ownership of Common Stock.
IN WITNESS WHEREOF the Board of Directors has caused this
Plan to be signed by its duly appointed officer and its corporate
seal to be hereunto affixed as of this 11th day of September, 1995.
ATTEST: FPL GROUP, INC.
MARK MITCHELL By: L.J. KELLELHER
Title: Sr. Vice Pres.
(Seal)
EXHIBIT 10(g)
FPL GROUP, INC.
EXECUTIVE LONG TERM DISABILITY PLAN
Effective January 1, 1995
<PAGE>
FPL GROUP, INC.
EXECUTIVE LONG TERM DISABILITY PLAN
TABLE OF CONTENTS
PARAGRAPH PAGE
INTRODUCTION
ARTICLE I
DEFINITIONS
1.01 Board ................................................... 1
1.02 Class A Executive ....................................... 2
1.03 Code .................................................... 2
1.04 Committee ................................................ 2
1.05 Disability .............................................. 2
1.06 Disability Leave of Absence .............................. 2
1.07 Disability Waiting Period ................................ 2
1.09 Effective Date ........................................... 2
1.10 Employee Benefit Plans Administrative Committee .......... 2
1.11 Employer ................................................ 2
1.12 Ending Monthly Base Pay ................................. 2
1.13 Ending Monthly Bonus Pay ................................. 2
1.14 Group .................................................... 3
1.15 Group LTD Plan ........................................... 3
1.16 Monthly Base Pay ........................................ 3
1.17 Participant .............................................. 3
1.18 Pension Plan ............................................ 3
1.19 Physician ............................................... 3
1.20 Plan ..................................................... 3
1.21 Plan Year ................................................ 3
1.22 Primary Social Security Disability Award ................ 3
1.23 Worker's Compensation .................................... 3
<PAGE>
TABLE OF CONTENTS
(continued)
PARAGRAPH PAGE
ARTICLE II
PARTICIPATION
2.01 Eligibility ............................................. 3
2.02 Termination of Membership ............................... 3
ARTICLE III
DETERMINATION OF DISABILITY
3.01 Determination of Disability ............................. 4
3.02 Physician's Statement ................................... 4
3.03 Application for Group Long Term Disability Benefit ...... 4
3.04 Pre-existing Condition Exclusion ....................... 4
3.05 Other Exclusions ....................................... 5
3.06 Continuing Eligibility ................................. 5
ARTICLE IV
DISABILITY BENEFITS
4.01 Primary Disability Benefit .............................. 5
4.02 Benefits for Class A Executives ......................... 5
4.03 Disability Benefit Offset ............................... 5
4.04 Disability Benefit Duration ............................. 6
ARTICLE V
ADMINISTRATION
5.01 Administration ......................................... 6
5.02 Exculpatory Provisions .................................. 7
5.03 General Fiduciary Duties ................................ 7
5.04 Actions of Fiduciaries .................................. 7
5.05 Delegation of Fiduciary Responsibility ................. 8
5.06 Advisors ............................................... 8
5.07 Claims Procedure ........................................ 8
5.08 Rules and Decisions .................................... 9
<PAGE>
TABLE OF CONTENTS
(continued)
PARAGRAPH PAGE
ARTICLE VI
AMENDMENTS AND TERMINATION
6.01 Amendments .............................................. 9
6.02 Right to Terminate ...................................... 9
6.03 Successor Company ....................................... 9
ARTICLE VII
MISCELLANEOUS
7.01 Nonguarantee of Employment .............................. 9
7.02 Governing Laws .......................................... 10
7.03 No Requirement to Fund .................................. 10
<PAGE>
FPL GROUP, INC.
EXECUTIVE LONG TERM DISABILITY PLAN
THIS EXECUTIVE LONG TERM DISABILITY PLAN (the "Plan") is
adopted this 12th day of December, 1994.
W I T N E S S E T H T H A T:
WHEREAS, FPL Group, Inc. has previously adopted the Long Term
Disability Plan for Employees of FPL Group, Inc. and Its Affiliates
(the Group LTD Plan), which plan provides for varying levels of
disability benefits for employees of FPL Group, Inc., Florida Power & Light
Company and certain other participating affiliates of FPL Group, Inc.; and
WHEREAS, the Group LTD Plan provides disability benefits in the event
of a permanent and total disability; currently defined in the Group LTD Plan
as the inability of a participant, due to injury or disease, to perform the
duties of any occupation for which he may be reasonably qualified by virtue
of his or her education or training; and
WHEREAS, benefits under the Group LTD Plan are funded through the
Employee Welfare Benefit Plans Trust, a trust which is intended to satisfy
the requirements of Section 501(c)(9) of the Internal Revenue Code of 1986
(the Code) and is therefore subject to a requirement that compensation used
to determine the benefits provided under a plan funded through such a trust
be limited to $150,000 (adjusted as provided in the Code); and
WHEREAS, the Company desires to establish a long term disability plan
for the benefit of certain officers of the Company and of its affiliates to
provide additional disability benefits, to be determined solely with
reference to the occupation held by the participant immediately prior to the
disability and determined without regard to limitations on compensation
imposed on the Group LTD Plan by the Code;
NOW, THEREFORE, the Executive Long Term Disability Plan
set forth herein is hereby adopted as of the Effective Date.
ARTICLE I
DEFINITIONS
1.01 "Board"shall mean the Board of Directors of FPL Group, Inc.
1.02 "Class A Executive" shall mean an Employee who is designated for
purposes of this Plan as such by the Compensation Committee.
1.03 "Code"shall mean the Internal Revenue Code of 1986, as amended.
1.04 "Committee" shall mean the Compensation Committee of the Board or
any such other committee designated by the Board, which shall
consist of at least three members of the Board each of whom are not
employees of Group or any of its subsidiaries.
1.05 "Company" shall mean FPL Group, Inc.
1.06 "Disability" shall mean, with respect to any Participant, total
disability commencing during the period such person is both an
Eligible Individual and a Participant which, for any reason
results in the Participant being unable to perform all of the
essential duties of his or her regular occupation.
1.07 "Disability Leave of Absence" shall mean the absence from
the service of the Employer of a Participant. A
Disability Leave of Absence shall begin as of the date the
Participant became Disabled, and shall terminate as of the
date on which such Participant is determined to be
ineligible, or no longer eligible, for Disability benefits
under this Plan. Notwithstanding anything to the contrary
in this Plan, an individual shall not be deemed to be an
employee for any reason during a Disability Leave of Absence.
1.08 "Disability Waiting Period" shall mean five consecutive
months of continuous Disability beginning with the first
day of a Participant's Disability Leave of Absence.
1.09 "Effective Date" shall mean January 1, 1995.
1.10 "Employee Benefit Plans Administrative Committee (EBPAC)" shall
mean the committee appointed by the Vice President of Human
Resources of Group to administer and interpret the Plan.
1.11 "Employer" shall mean Group, Florida Power & Light Company
and any other subsidiary of Group approved for
participation in this Plan.
1.12 "Ending Monthly Base Pay" shall mean the Monthly Base Pay
rate in effect for a Participant in the month prior to the
month in which his or her Disability Leave of Absence commences.
1.13 "Ending Monthly Bonus Pay" shall mean the Ending Monthly
Base Pay of a Participant, plus one-twelfth of the
targeted bonus established for such Participant under the
Annual Incentive Plan maintained by the Employer.
1.14 "Group" shall mean FPL Group, Inc.
1.15 "Group LTD Plan" shall mean the Long Term Disability Plan for
Employees of FPL Group, Inc. and Its Affiliates and any other plan,
contract or arrangement adopted or entered into by the Group or an
Employer which provides benefits commencing upon or as a result of
the disability of a participant.
1.16 "Monthly Base Pay" shall mean the Monthly Base Pay (as
defined in the Pension Plan) plus, to the extent not
otherwise included, (i) any salary deferred under the FPL
Group, Inc. Deferred Compensation Plan and (ii) any
amounts contributed by the Employer pursuant to a salary
reduction agreement which are not includable in the gross
income of the Participant under Code Sections 125,
402(e)(3) or 402(h). Monthly Base Pay shall not include
(a) amounts received as fringe benefits irrespective of
the includibility of such amounts on the Participant's
Form W-2 (other than salary reduction contributions
described in clause (ii) above), (b) amounts received
under the FPL Group, Inc. Long Term Incentive Plan of 1994
(whether or not such amounts were deferred under the FPL
Group, Inc. Deferred Compensation Plan). and (c) bonuses
under the Annual Incentive Plan maintained by the Employer
(whether or not such bonuses were deferred under the FPL
Group, Inc. Deferred Compensation Plan).
1.17 "Participant" shall mean an individual listed in Appendix A.
1.18 "Pension Plan" shall mean the FPL Group, Inc. Employee Pension
Plan, and any other plan, contract or arrangement adopted or
entered into by Group or an Employer, which provides benefits
commencing upon or as a result of, normal or other retirement.
1.19 "Physician" shall mean a physician who is licensed and
certified as a member by the American Board of Medical
Specialties in his or her particular specialty, which
specialty relates directly to the basis on which the
Participant is determined to have a Disability.
1.20 "Plan" shall mean the FPL Group, Inc. Executive Long Term
Disability Plan, as contained herein, and as may be
amended from time to time.
1.21 "Plan Year" shall mean the calendar year.
1.22 "Primary Social Security Disability Award" shall mean the
monthly amount provided by the Social Security Administration to
a Participant for total and permanent disability benefits, exclusive
of any benefits for a spouse or dependents.
1.23 "Workers' Compensation Award" shall mean the cash benefit paid to
a Participant due to a work-related accident, regardless of fault,
under the provisions of the Florida Workers' Compensation Law or the
law of any other state or of the United States.
ARTICLE II
PARTICIPATION
2.01 Eligibility. Participants in this Plan are elected
officers of a Company who are listed in Appendix A The
Vice President of Human Resources of Group may designate
additional individuals as Participants, or terminate the
participation of a previously included individual, as he
may deem appropriate, by a revision of Appendix A.
2.02 Termination of Membership. A Participant shall cease to
be a Participant eligible for Disability Benefits as of
the first day of the month next following the earliest of
the following: the deletion of his or her name from
Appendix A, the termination of his or her status as an
elected officer; his or her death; commencement of a leave
of absence other than a Disability Leave of Absence; or
commencement of benefit payments from a Pension Plan.
ARTICLE III
DETERMINATION OF DISABILITY
3.01 Determination of Disability A determination of a
Participant's eligibility for Disability benefits shall be
made by EBPAC, in its sole and absolute discretion. Upon
EBPAC's determination that such Participant shall have
become Disabled and upon completion of the Disability
Waiting Period, the Plan shall pay the monthly Disability
benefit determined in accordance with Article IV.
3.02 Physician's Statement. A letter from a Physician must be
submitted to EBPAC stating, to the satisfaction of EBPAC,
that the Participant is Disabled and describing the nature
of the injury or sickness. EBPAC may, in its discretion,
require the Participant to submit to examination by a
Physician selected by EBPAC.
3.03 Application for Group LTD Benefit. A Participant must,
prior to receipt of Disability benefits under this Plan,
make application for long term disability benefits under
the Group LTD Plan and comply with any requirements for
the receipt of benefits thereunder.
3.04 Pre-existing Condition Exclusion. Disability benefits
shall not be payable under this Plan with respect to any
Disability arising out of or due to a pre-existing
condition. A pre-existing condition shall mean any
illness or condition for which a Participant has, or would
reasonably be expected to have had, medical treatment or
medication, at any time during the twelve month period
immediately preceding his or her employment commencement
date. A disability shall be deemed to arise out of or be
due to a pre-existing condition if EBPAC, in its sole
discretion, determines that such disability would not have
occurred, or that another illness or condition would not
have become a Disability hereunder, but for the existence
of the pre-existing condition.
3.05 Other Exclusions. Disability benefits shall not be
payable under this Plan with respect to any disability
resulting from an intentional self-inflicted injury, war
or act of war, or participation in a felony or riot.
Disability benefits shall be payable to a Participant
under this Plan with respect to a disability resulting
from mental illness, drug abuse or alcoholism only if such
Participant is confined to a licensed hospital or is a
participant in a treatment program approved by EBPAC.
3.06 Continuing Eligibility. In order to remain eligible to receive
Disability benefits under the Plan, a Participant shall submit
to physical examinations as often as EBPAC may reasonably require.
ARTICLE IV
DISABILITY BENEFITS
4.01 (a) Primary Disability Benefit. An eligible disabled
Participant shall receive monthly Disability benefit
payments in an amount equal to 60% of his or her Ending
Monthly Base Pay, adjusted each year in the manner
described below, and reduced by the offset in Section 4.03.
The monthly Disability benefit payment shall be adjusted
for increases in the cost of living as of each April 1
following a determination of disability hereunder, by
increasing the dollar amount by a percentage equal to the
lesser of (i) one-half of the average percentage change in
the Consumer Price Index (CPI-U) for the three immediately
preceding calendar years (but only if such average
percentage change is positive), or (ii) two percent.
4.02 Benefits for Class A Executives. In the case of a
Participant who is a Class A Executive, Section 4.01(a)
shall be applied by substituting the term, "Ending Monthly
Bonus Pay" for the term "Ending Monthly Base Pay".
4.03 Disability Benefit Offset. The offset referred to in
Section 4.01 shall be an amount equal to the sum of:
(i) 100% of the Participant's monthly benefit
under the Group LTD Plan, if any;
(ii) 100% of the amount provided or available as
the Participant's monthly Primary Social
Security Disability Award, to the extent such
award has not already been applied as an offset
to benefits under the Group LTD Plan; and
(iii) 100% of any amount provided or available
under Workers' Compensation Law, Occupational
Disease Law or other legislation of similar
purpose, to the extent such award has not
already been applied as an offset to benefits
under the Group LTD Plan.
For the purposes of this Section 4.03, if a lump sum
payment is made of such Participant's Social Security
Disability award or award under Worker's Compensation law,
occupational disease law or other law or act, the amount
of payment shall be divided by the number of months in the
period of time which was the time factor in computing such
payment, and the result shall be considered as the monthly
amount to be deducted from compensation paid in any month
for which benefits are payable under this Plan. The
amount of the offset shall not be increased in accordance
with any cost of living adjustments to the Participant's
Primary Social Security Disability Award or Workers'
Compensation benefits. If the amount of the Participant's
monthly Workers' Compensation benefits is reduced, the
amount of the offset applied to future disability benefit
payments shall be correspondingly reduced.
4.04 Disability Benefit Duration.
(A) Disability benefits shall begin on the first day
of the month following the later of EBPAC's
determination of the right of any Participant to
a Disability benefit under the Plan or such
Participant's satisfaction of his Disability
Waiting Period. Disability benefit payments
shall terminate as of the first day of the month
next following the earliest of the following:
(i) the date of the Participant's failure to comply
with any of the provisions of this Plan;
(ii) the date of the Participant's death;
(iii) the date benefit payments from a Pension
Plan commence;
(iv) the date the Participant is determined
by EBPAC to be no longer Disabled; or
(v) termination of payments described in
subsection (B) below.
No Disability benefits under the Plan are intended
to accrue, nor shall any Disability benefits be paid,
for the benefit of anyone other than a Participant
included in the Plan as provided in Article II.
(B) Subject to the provisions of subsection (A)
above, Disability benefits shall be paid as
follows: (i) in the case of a Participant who
is disabled prior to age 60, benefits shall be
paid until his or her attainment of age 65; (ii)
in the case of a Participant who is disabled
after age 60 but prior to age 65, benefits shall
be paid for five years; and (iii) in the case of
a Participant who is disabled after age 65 but
prior to age 70, benefits shall be paid until
his or her attainment of age 70.
ARTICLE V
ADMINISTRATION
5.01 Administration. EBPAC shall have responsibility for the
administration and interpretation of the Plan and shall
have the powers necessary to discharge its duties
hereunder. Such duties shall include, but are not limited
to, the duty to construe and interpret the Plan, and to
make all final determinations concerning eligibility for,
and the amount, manner and time of payment of Disability
benefits under the Plan.
5.02 Exculpatory Provisions. The members of EBPAC, and each
of them shall be free from all liability, joint and
several, for their acts and conduct, and for the acts and
conduct of their agents, in the administration of the
Plan, and Group shall indemnify and hold each of them
harmless from any and all liability for their acts and
conduct, or the acts or conduct of their agents, in their
official capacity, to the fullest extent permitted or
authorized by current or future legislation or by current
or future judicial or administrative decision.
5.03 General Fiduciary Duties. Each fiduciary shall discharge
its duties with respect to the Plan in the interest of the
Participants and for defraying reasonable expenses of
administering the Plan. Each fiduciary shall also
discharge its duties with respect to the Plan with the
care, skill, prudence and diligence, under the
circumstances then prevailing, that a prudent person
acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like
character and with like aims. No fiduciary shall engage
in or cause the Plan to engage in a prohibited transaction
as such term is defined in either Section 406 of ERISA or
Section 4975 of the Code.
5.04 Actions of Fiduciaries. All fiduciaries under the Plan
shall severally (not jointly) control and manage the
operation and administration of the Plan to the extent
each is empowered or directed to do so. Any directions
given, information furnished, or action taken by any
fiduciary shall be in accordance with the provisions of
the Plan, as the case may be, authorizing or providing for
such direction, information or action. Furthermore, each
fiduciary may rely upon any such direction, information or
action of another fiduciary or advisor as being proper
under the Plan, and is not required under the Plan to
inquire into the propriety of any such direction,
information or action. It is intended under the Plan that
each fiduciary shall be responsible for the proper
exercise of its own powers and duties under the Plan and
shall not be responsible for any act or failure to act of
another fiduciary.
5.05 Delegation of Fiduciary Responsibility. Any fiduciary
under the Plan may delegate any or all of its powers or
duties. In the event of an authorized delegation, the
delegate shall become a fiduciary under the Plan and shall
assume the full burden of performing the duties or exer-
cising the powers delegated. Any fiduciary shall, after
making an authorized delegation or appointment, thereafter
be responsible only for having made an appropriate and
prudent delegation or appointment, and for changing or
revoking the delegation or appointment if the performance
of the delegate or appointee is not appropriate under the
Plan. Any fiduciary who makes a delegation of its powers
or duties shall immediately notify all other fiduciaries
under the Plan of such delegation.
5.06 Advisors. Any fiduciary under the Plan may employ one or
more persons to render advice with regard to any
responsibility such fiduciary has under the Plan. No
advisor shall be an agent of or perform any function of a
fiduciary under the Plan. The members of EBPAC and Group
and its officers and directors, shall be fully protected
with respect to any action taken or suffered by them in
good faith and in reliance upon any such agent,
accountant, actuary, auditor or counsel, and all actions
so taken or suffered shall be conclusive on each of them
and on Participants, their beneficiaries or legal
representatives, and on all other persons.
5.07 Claims Procedure. Claims for benefits under this Plan
shall be made in writing to, and determined by, EBPAC.
EBPAC shall meet no less often than once each calendar
quarter to review denied claims. EBPAC shall review any
denied claim for which a request for review is received at
the first scheduled EBPAC meeting following the receipt of
the request for review; provided that, if the request for
review is received within the 30 day period immediately
preceding the next scheduled meeting, such request shall
be reviewed at the second following EBPAC meeting, and
provided further that if special circumstances exist with
respect to a request for review which require an extension
of time to review and consider the claim, such claim shall
be reviewed no later than the third following EBPAC
meeting. In connection with such review, the claimant or
his representative may review pertinent documents and may
submit issues and comments in writing. The decision on
review shall be delivered in writing to the claimant and
shall be written in language calculated to be understood
by the claimant and shall include the specific reasons for
the decision, specific references to pertinent Plan
provisions on which the decision is based, a description
of any additional material or information necessary for
the claimant to perfect the claim and an explanation of
why such material or information is necessary. Within 90
days after receipt by a claimant of the notice of denial,
or such later time as is reasonable, taking into account
the nature of the claim and other attendant circumstances,
the claimant may file a written request with the Secretary
of EBPAC for a full and fair review of the denial. In
connection with such review, the claimant or his
representative may review pertinent documents and may
submit issues and comments in writing.
5.08 Rules and Decisions. EBPAC may adopt such rules as it
deems necessary, desirable, or appropriate. All rules and
decisions of EBPAC shall be uniformly and consistently
applied to all Participants in similar circumstances in a
non-discriminatory manner. When making a determination or
calculation, EBPAC shall be entitled to rely upon
information furnished by a Participant, Group, the legal
counsel of Group or an advisor. All interpretations,
determinations, and decisions of EBPAC with respect to any
matters hereunder shall be final, conclusive and binding
upon Group, Participants and all other persons claiming
interests under the Plan.
ARTICLE VII
AMENDMENTS AND TERMINATION
6.01 Amendments. The Vice President of Human Resources of
Group shall have the right to modify, alter or amend this
Plan and Schedule A hereto from time to time to the extent
that he or she may deem advisable; provided, however that
the Committee shall have the exclusive right to modify or
amend Sections 2.01, 4.01, 4.02 .01 of this Plan.
6.02 Right to Terminate. The Committee may terminate the Plan
at any time.
6.03 Successor Company. In the event of the dissolution,
merger, consolidation or reorganization of Group,
provision may be made by which the Plan and Trust will be
continued by the successor; and, in that event, such
successor shall be substituted for Group under the Plan.
The substitution of the successor shall constitute an
assumption of Plan liabilities by the successor and the
board of directors of the successor shall have all of the
powers, duties and responsibilities of the Board under the Plan.
ARTICLE VII
MISCELLANEOUS
7.01 Nonguarantee of Employment. Nothing contained in this Plan
shall be construed as a contract of employment between Group or
any Employer and any Executive, or as a right of any Executive to
be continued in the employment of any Employer or as a limitation
of the right of any Employer to discharge any of its employees,
with or without cause.
7.02 Governing Laws. The Plan shall be construed, interpreted
and enforced according to their terms, by the laws of the
State of Florida and all applicable federal laws.
7.03 No Requirement to Fund. Group may, but is not required
to, fund this Plan. To the extent Group has so funded the
plan, all assets of the Plan shall be invested and
reinvested in such a manner so as not to violate any duty
imposed by the Plan, by ERISA or the Code on the fiduciary
charged with investment responsibility.
IN WITNESS WHEREOF, FPL GROUP, INC. has caused this Plan
to be executed by its duly authorized officer as of this 28th day of
September, 1995.
FPL GROUP, INC.
By: L.J. KELLEHER
Title: Sr. Vice President
EXHIBIT 10(i)
EMPLOYMENT AGREEMENT
Employment Agreement between FPL GROUP, INC., a Florida
corporation (the "Company"), and James L. Broadhead (the
"Executive"), dated as of December 11, 1995.
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 5th 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.<PAGE>
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:
James L. Broadhead
982 Lake House Drive, South
North Palm Beach, Florida 33408
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.
JAMES L. BROADHEAD
James L. Broadhead
FPL GROUP, INC.
By LAWRENCE J. KELLEHER
Lawrence J. Kelleher
Vice President, Human Resources
EXHIBIT 10(j)
EMPLOYMENT AGREEMENT
Employment Agreement between FPL GROUP, INC., a Florida
corporation (the "Company"), and Dennis P. Coyle (the "Executive"),
dated as of December 11, 1995.
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.
<PAGE>
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:
Dennis P. Coyle
405 Eagleton Cove Way
Palm Beach Gardens, FL 33418
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.
DENNIS P. COYLE
Dennis P. Coyle
FPL GROUP, INC.
By LAWRENCE J. KELLEHER
Lawrence J. Kelleher
Vice President, Human Resources
EXHIBIT 10(k)
EMPLOYMENT AGREEMENT
Employment Agreement between FPL GROUP, INC., a Florida
corporation (the "Company"), and Paul J. Evanson (the "Executive"),
dated as of December 11, 1995.
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.<PAGE>
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:
Paul J. Evanson
12087 Turtle Beach Road
North Palm Beach, Florida 33408
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.
PAUL J. EVANSON
Paul J. Evanson
FPL GROUP, INC.
By LAWRENCE J. KELLEHER
Lawrence J. Kelleher
Vice President, Human Resources
EXHIBIT 10(l)
EMPLOYMENT AGREEMENT
Employment Agreement between FPL GROUP, INC., a Florida
corporation (the "Company"), and Lawrence J. Kelleher (the
"Executive"), dated as of December 11, 1995.
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.
<PAGE>
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:
Lawrence J. Kelleher
13209 Rolling Green Road
North Palm Beach, Florida 33408
If to the Company:
FPL Group, Inc.
700 Universe Boulevard
Juno Beach, Florida 33408
Attention: Chairman of the Board
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.
LAWRENCE J. KELLEHER
Lawrence J. Kelleher
FPL GROUP, INC.
By JAMES L. BROADHEAD
James L. Broadhead
Chairman of the Board
EXHIBIT 10(m)
EMPLOYMENT AGREEMENT
Employment Agreement between FPL GROUP, INC., a Florida
corporation (the "Company"), and C. O. Woody (the "Executive"), dated
as of December 11, 1995.
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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:
C. O. Woody
176 Harbourside Circle
Jupiter, Florida 33477
If to the Company:
FPL Group, Inc.
700 Universe Boulevard
Juno Beach, Florida 33408
Attention: Vice President, Human Resources
<PAGE>
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.
C. O. WOODY
C. O. Woody
FPL GROUP, INC.
By LAWRENCE J. KELLEHER
Lawrence J. Kelleher
Vice President, Human Resources
EXHIBIT 10(n)
EMPLOYMENT AGREEMENT
Employment Agreement between FPL GROUP, INC., a Florida
corporation (the "Company"), and Michael W. Yackira (the
"Executive"), dated as of December 11, 1995.
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.
<PAGE>
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:
Michael W. Yackira
102 Sandbourne Lane
Palm Beach Gardens, Florida 33418
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.
MICHAEL W. YACKIRA
Michael W. Yackira
FPL GROUP, INC.
By LAWRENCE J. KELLEHER
Lawrence J. Kelleher
Vice President, Human Resources
