<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
FPL GROUP, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
FPL
GROUP
FPL GROUP, INC.
P.O. BOX 14000
700 UNIVERSE BOULEVARD
JUNO BEACH, FLORIDA 33408-0420
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 12, 1997
The Annual Meeting of Shareholders of FPL Group, Inc., will be held in Palm
Beach Gardens, Florida, at the PGA National Resort, 400 Avenue of the Champions,
at 10:00 a.m. on Monday, May 12, 1997, to consider and act upon:
-Election of directors.
-Ratification of the appointment of Deloitte & Touche LLP as auditors.
-Approval of a Non-Employee Directors Stock Plan.
-A shareholder proposal regarding cumulative voting.
-Such other matters as may properly come before the meeting.
The record date for shareholders entitled to notice of, and to vote at, the
Annual Meeting and any adjournment or postponement thereof is March 3, 1997.
Admittance to the meeting will be limited to shareholders. Shareholders who plan
to attend are requested to so indicate by marking the appropriate space on the
enclosed proxy card. Shareholders whose shares are held in street name (the name
of a broker, trust, bank or other nominee) should bring with them a legal proxy,
a recent brokerage statement or letter from the street name holder confirming
their beneficial ownership of shares.
PLEASE MARK, DATE, SIGN, AND RETURN THE ENCLOSED PROXY CARD PROMPTLY SO THAT
YOUR SHARES CAN BE VOTED, REGARDLESS OF WHETHER YOU EXPECT TO ATTEND THE
MEETING. IF YOU ATTEND, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
By order of the Board of Directors.
DENNIS P. COYLE
Secretary
March 24, 1997
<PAGE>
FPL GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 12, 1997
PROXY STATEMENT
ANNUAL MEETING
The Annual Meeting of Shareholders of FPL Group, Inc. ("FPL Group" or the
"Corporation") will be held at 10:00 a.m. on Monday, May 12, 1997. The enclosed
proxy card is solicited by the Board of Directors, and your execution and prompt
return of the card is requested. Every shareholder, regardless of the number of
shares held, should be represented at the Annual Meeting. Whether or not you
expect to be present at the meeting, please mark, sign, and date the enclosed
proxy card and return it in the enclosed envelope. Any shareholder giving a
proxy may revoke it at any time before it is voted at the meeting by delivering
to the Corporation written notice of revocation or a proxy bearing a later date,
or by attending the meeting in person and casting a ballot. Votes cast in person
or by proxy will be tabulated by the inspectors of election appointed by the
Board of Directors.
The shares represented by your proxy will be voted in accordance with the
specifications made on the proxy card. Unless otherwise directed, such shares
will be voted:
-For the election as directors of the nominees named in this proxy
statement.
-For the ratification of the appointment of Deloitte & Touche LLP as
auditors.
-For the approval of the Non-Employee Directors Stock Plan.
-Against the shareholder proposal regarding cumulative voting.
-In accordance with the best judgment of the persons acting under the proxy
concerning other matters that are properly brought before the meeting and
at any adjournment or postponement thereof.
Shareholders of record at the close of business on March 3, 1997, are entitled
to notice of, and to vote at, the meeting. Each share of Common Stock, $.01 par
value, of the Corporation is entitled to one vote. At the close of business on
March 3, 1997, the Corporation had 182,443,635 shares of Common Stock
outstanding and entitled to vote. The Corporation anticipates first sending this
proxy statement and the enclosed proxy card to shareholders on or about March
24, 1997.
In determining the presence of a quorum at the Annual Meeting, abstentions are
counted and broker non-votes are not counted. The current Florida Business
Corporation Act (the "Act") provides that directors are elected by a plurality
of the votes cast and all other matters are approved if the votes cast in favor
of the action exceed the votes cast against the action (unless the matter is one
for which the Act or the articles of incorporation require a greater vote).
Therefore, under the Act, abstentions and broker non-votes have no legal effect
on whether a matter is approved. However, FPL Group's Bylaws, which were adopted
prior to the current Act and remain in effect, provide that any matter,
including the election of directors, is to be approved by the affirmative vote
of a majority of the total number of shares represented at the meeting and
entitled to vote on such matter (unless the matter is one for which the Act or
some other law or regulation, or FPL Group's Articles of Incorporation, Bylaws,
or Board of Directors require a greater or different vote). Therefore, as to all
matters to be voted on by shareholders at the Annual Meeting, abstentions have
the same effect as a vote against a matter and broker non-votes have no legal
effect.
1
<PAGE>
ELECTION OF DIRECTORS
Listed below are the fourteen nominees for election as directors, their
principal occupations, and certain other information regarding them. Unless
otherwise noted, each director has held his present position continuously for
five years or more and his employment history is uninterrupted. Directors serve
until the next Annual Meeting of Shareholders or until their respective
successors are elected and qualified.
Unless you specify otherwise on the accompanying proxy, it will be voted for the
election of the listed nominees. The affirmative vote of a majority of the total
number of shares of Common Stock represented at the meeting and entitled to vote
is required to elect each nominee.
<TABLE>
<S> <C>
[PHOTO] H. JESSE ARNELLE Mr. Arnelle, 63, has been a senior partner in the San
Francisco law firm of Arnelle, Hastie, McGee, Willis & Greene and its
predecessor since 1985. He is a director of Eastman Chemical Company, Textron
Corporation, Union Pacific Corporation, Wells Fargo Bank & Company, Wells Fargo
Bank, N.A., and WMX Technologies, Inc., and is chairman of the Pennsylvania
State University Board of Trustees. Mr. Arnelle has been a director of FPL Group
since 1990.
[PHOTO] ROBERT M. BEALL, II Mr. Beall, 53, is chairman and chief executive officer of
Beall's, Inc., the parent company of Beall's Department Stores, Inc., and
Beall's Outlet Stores, Inc., which operate retail stores located primarily in
Florida. Mr. Beall is a director of Enterprise Bank, Blue Cross/Blue Shield of
Florida, and the National Retail Federation. He is also past chairman of the
Florida Chamber of Commerce and a member of the Florida Council of 100. Mr.
Beall has been a director of FPL Group since 1989.
</TABLE>
<TABLE>
<S> <C>
[PHOTO] JAMES L. BROADHEAD Mr. Broadhead, 61, is chairman, president, and chief
executive officer of FPL Group. He is also chairman and chief executive officer
of FPL Group's principal subsidiary, Florida Power & Light Company. 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 Group since 1989.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
[PHOTO] J. HYATT BROWN Mr. Brown, 59, is chairman, president and chief executive
officer of Poe & Brown, Inc., an insurance broker based in Daytona Beach and
Tampa. He is a director of SunTrust Banks, Inc., BellSouth Telecommunications,
Inc., Rock-Tenn Company, and the International Speedway Corporation. Mr. Brown
is a former member of the Florida House of Representatives and served as Speaker
of the House from 1978 to 1980. He is a member and past chairman of the Board of
Trustees of Stetson University. Mr. Brown has been a director of FPL Group since
1989.
</TABLE>
<TABLE>
<S> <C>
[PHOTO] LYNNE V. CHENEY Mrs. Cheney, 55, is a Distinguished Fellow with the American
Enterprise Institute, a Washington, DC-based organization sponsoring research on
economics, foreign and defense policy, and social and political issues. She
joined the Institute in 1993 after seven years as chairman of the National
Endowment for the Humanities. Mrs. Cheney has held a variety of positions in
journalism and higher education and is an author, lecturer, and television
commentator. She also serves on the boards of Lockheed Martin Corporation, IDS
Mutual Fund Group, Union Pacific Resources Group, Inc., and Reader's Digest
Association. Mrs. Cheney has been a director of FPL Group since 1995.
</TABLE>
<TABLE>
<S> <C>
[PHOTO] ARMANDO M. CODINA Mr. Codina, 50, is the chairman and chief executive officer
of Codina Group, Inc., a Miami-based real estate development company. He has
served in that capacity with Codina Group, Inc., and its predecessors since
1979. He is a director of American Bankers Insurance Group, Inc., AMR, Inc.,
BellSouth Corporation, CSR America, Inc., and Winn-Dixie Stores, Inc. Mr. Codina
has been a director of FPL Group since 1994.
</TABLE>
<TABLE>
<S> <C>
[PHOTO] MARSHALL M. CRISER Mr. Criser, 68, is chairman of the Jacksonville law firm of
Mahoney Adams & Criser, P.A. He was formerly president of the University of
Florida. Mr. Criser is a director of Barnett Banks, Inc., BellSouth Corporation,
and Perini Corporation, and is a trustee of The Emerald Funds. He is a past
chairman of the Florida Board of Regents, a past president of the Florida Bar
and a past chairman of the Florida Council of 100. Mr. Criser has been a
director of FPL Group since 1989.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
[PHOTO] B.F. DOLAN Mr. Dolan, 69, retired in 1992 as chairman and in 1991 as chief
executive officer of Textron, Inc., a diversified company with interests in
aerospace, technology and financial services. Mr. Dolan was co-founder and
president of E-Z-Go Car Corporation until it was acquired by Textron in 1960. He
is a director of First Union Corporation, Polaris Industries, Inc., Ruddick
Corporation, and Textron, Inc., and a member of the Cannon Research Development
Board. Mr. Dolan has been a director of FPL Group since 1992.
</TABLE>
<TABLE>
<S> <C>
[PHOTO] WILLARD D. DOVER Mr. Dover, 66, has been a member of the Fort Lauderdale law
firm of Fleming, O'Bryan & Fleming, P.A. since 1958. He is a director and former
chairman of the Florida Council of 100 and is a trustee and former chairman of
the Florida Council of Economic Education. He has previously served as a trustee
of the Nova University Law Center and Florida Atlantic University Foundation,
Inc., and as chairman of the Florida Atlantic Research and Development
Authority. Mr. Dover has been a director of FPL Group since 1989.
</TABLE>
<TABLE>
<S> <C>
[PHOTO] ALEXANDER W. DREYFOOS JR. Mr. Dreyfoos, 64, is the owner and chief executive
officer of the Dreyfoos Group of companies, which includes Photo Electronics
Corporation, a developer of electronic equipment for the photographic industry,
which he founded in 1963. He is a director of First Union National Bank of
Florida and Kuhlman Corporation. He serves as chairman of the Raymond F. Kravis
Center for the Performing Arts, a trustee of M.I.T. Corporation, and a director
of the Trudeau Institute. He is a member of the Florida Council of 100 and a
founding member and former chairman of the Economic Council of Palm Beach
County. He became a director of FPL Group in February 1997.
</TABLE>
<TABLE>
<S> <C>
[PHOTO] PAUL J. EVANSON Mr. Evanson, 55, became the president of Florida Power & Light
Company and a director of FPL Group in January 1995, after having served as vice
president, finance, and chief financial officer of FPL Group and senior vice
president, finance, and chief financial officer of Florida Power & Light Company
since December 1992. Prior to that, he was president and chief operating officer
of Lynch Corporation, a diversified holding company. Mr. Evanson is a director
of Florida Power & Light Company, Lynch Corporation, and Southern Energy Homes,
Inc.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
[PHOTO] DREW LEWIS Mr. Lewis, 65, was chairman and chief executive officer of Union
Pacific Corporation, a transportation and natural resources company, from 1986
to 1997. He is a director of American Express Company, Ford Motor Company,
Gannett Co., Inc., Gulfstream Aerospace Corp., Lucent Technologies, Inc., and
Union Pacific Resources Group, Inc. Mr. Lewis served as U. S. Secretary of
Transportation from 1981 to 1983, is a former chairman and chief executive
officer of Warner Amex Cable Communications Inc. and a former chairman of The
Business Roundtable. Mr. Lewis has been a director of FPL Group since 1992.
</TABLE>
<TABLE>
<S> <C>
[PHOTO] FREDERIC V. MALEK Mr. Malek, 60, has been chairman of Thayer Capital Partners,
a merchant bank, since March 1993. Mr. Malek was formerly the president and vice
chairman, successively, of Northwest Airlines, Inc., and prior to that was
president of Marriott Hotels and Resorts. He served as campaign manager for
Bush/Quayle '92. Mr. Malek also served in several U.S. government positions,
including deputy director of the Office of Management and Budget. He is a
director of American Management Systems, Inc., Automatic Data Processing
Corporation, Inc., CB Commercial Group, Choice Hotels, Inc., Manor Care, Inc.,
Northwest Airlines, Inc., National Education Corporation, and various
PaineWebber mutual funds. Mr. Malek has been a director of FPL Group since 1987.
</TABLE>
<TABLE>
<S> <C>
[PHOTO] PAUL R. TREGURTHA Mr. Tregurtha, 61, is chairman and chief executive officer of
Mormac Marine Group, Inc., a maritime shipping company, and chairman of Moran
Transportation Company, a tug/barge enterprise. He is also vice chairman and
co-owner of Interlake Steamship Company. Mr. Tregurtha previously served as
chairman, chief executive officer, president and chief operating officer of
Moore McCormack Resources, Inc., a natural resources and water transportation
company. He is also a former vice president of Brown & Sharpe Manufacturing
Company. Mr. Tregurtha is a director of Teachers Insurance and Annuity
Association, Fleet Financial Group, and Brown & Sharpe Manufacturing Company.
Mr. Tregurtha has been a director of FPL Group since 1989.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES.
5
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board has selected Deloitte
& Touche LLP, independent public accountants, to audit the accounts of FPL Group
and its subsidiaries for the fiscal year ending December 31, 1997, and to
perform such other services as may be required of them.
Representatives of Deloitte & Touche LLP will be present at the 1997 Annual
Meeting and will have an opportunity to make a statement and to respond to
appropriate questions raised at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION.
APPROVAL OF NON-EMPLOYEE DIRECTORS STOCK PLAN
The Board of Directors adopted the FPL Group, Inc. Non-Employee Directors Stock
Plan ("Plan") on March 17, 1997, subject to the approval of the shareholders of
the Corporation. Accordingly, at the Annual Meeting the shareholders will be
asked to approve the Plan, and the Board recommends that it be approved.
The Plan is designed to further align the interests of directors and
shareholders through increased ownership of Common Stock by directors who are
not employees of the Corporation ("Non-Employee Directors"). The Plan would
enable the Board (or a Committee of the Board) to direct that all or a portion
of the Non-Employee Directors compensation for services as a member of the Board
be paid in shares of Common Stock. Additionally, the Plan would enable Non-
Employee Directors to voluntarily elect to receive all or a portion of their
compensation for services as a member of the Board in shares of Common Stock.
Only Non-Employee Directors will be eligible to participate in the Plan.
The Plan would also authorize the Board (or a Committee of the Board) to make a
one-time award of shares of Common Stock to Non-Employee Directors who are first
elected to the Board after January 1, 1997. Any such award would have to be made
within six months of the Non-Employee Director's initial election to the Board,
and the market value of such shares as of the date they are awarded could not
exceed 100% of the then-current annual retainer. Furthermore, such shares would
have to be held by the recipient so long as he or she remains a director and
would be forfeited if, within five years of his or her election to the Board, he
or she ceased to be a director for any reason other than death, disability or
mandatory retirement. Alexander W. Dreyfoos Jr. is the only current director who
would be eligible to receive such an award.
The Plan would be effective on May 12, 1997, and would expire 10 years later
unless terminated earlier by the Board. The total number of shares of Common
Stock that could be issued under the Plan is 300,000, which may be either
authorized and unissued shares or shares purchased in the open market. The Plan
would be administered by a Committee of three or more directors who are
"non-employee directors" as defined in Rule 16b-3 under the Securities Exchange
Act of 1934, as amended.
Shares issuable pursuant to the Plan would be issued or transferred to each
recipient as soon as practicable following the date that any such compensation
otherwise would have been paid in cash and would be valued at the closing price
of the Common Stock on the New York Stock Exchange ("NYSE") on such regular
payment date (or the next preceding business day if there is no such closing
price of Common Stock on the NYSE on such date). For one-time awards to newly
elected Non-Employee Directors, the applicable price would be the closing price
of the Common Stock on the NYSE on the business day next preceding the date of
the director's initial election to the Board.
6
<PAGE>
The foregoing description is qualified in its entirety by reference to the text
of the Plan, which is attached to this proxy statement as Appendix A.
The affirmative vote of a majority of the total number of shares of Common Stock
represented at the meeting and entitled to vote is required to approve the
Non-Employee Directors Stock Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PLAN.
SHAREHOLDER PROPOSAL FOR CUMULATIVE VOTING IN THE ELECTION OF DIRECTORS
John J. Gilbert, 29 East 64th Street, New York, New York 10021, as the owner of
50 shares of Common Stock, and Margaret R. and/or John J. Gilbert, trustees
under the will of Samuel Rosenthal for 200 shares of Common Stock and/or Kay
Griffin, Isle of Yew, 6264 Tall Cypress Circle, Lake Worth, Florida, 33463, as
the owner of 250 shares of Common Stock, have notified FPL Group that they will
cause to be introduced from the floor at the Annual Meeting of Shareholders the
following proposal:
"RESOLVED: That the stockholders of FPL Group, Inc., assembled in annual
meeting in person and by proxy, hereby request that the Board of Directors
take the steps necessary to provide for cumulative voting in the election of
directors, which means each stockholder shall be entitled to as many votes
as shall equal the number of shares he or she owns multiplied by the number
of directors to be elected, and he or she may cast all of such votes for a
single candidate, or any two or more of them as he or she may see fit."
The shareholder proponents have submitted the following statement in support of
their proposal:
"Continued very strong support along the lines we suggest were shown at the
last annual meeting when 30%, an increase over the previous year, 7,330
owners of 38,352,615 shares, were cast in favor of this proposal. The vote
against included 2,984 unmarked proxies.
A California law provides that all state pension holdings and state college
funds, invested in shares must be voted in favor of cumulative voting
proposals, showing increasing recognition of the importance of this
democratic means of electing directors.
The National Bank Act provides for cumulative voting. In many cases
companies get around it by forming holding companies without cumulative
voting. Banking authorities have the right to question the capability of
directors to be on banking boards. In many cases authorities come in after
and say the director or directors were not qualified. We were delighted to
see the SEC has finally taken action to prevent bad directors from being on
boards of public companies. The SEC should have hearings to prevent such
persons becoming directors before they harm investors.
We think cumulative voting is the answer to find new directors for various
committees. Some recommendations have been made to carry out the CERES 10
points. The 11th, in our opinion, should be having cumulative voting and
ending staggered boards.
7
<PAGE>
When Alaska became a state it took away cumulative voting over our
objections. The Valdez oil spill might have been prevented if environmental
directors were elected through cumulative voting. The hugh [sic] derivative
losses might have also been prevented with cumulative voting.
Many successful corporations have cumulative voting. Example, Pennzoil
defeated Texaco in that famous case. Ingersoll-Rand, also having cumulative
voting, won two awards. FORTUNE magazine ranked it second [sic] in its
industry as "America's Most Admired Corporations" and the WALL STREET
TRANSCRIPT noted "on almost any criteria used to evaluate management,
Ingersoll-Rand excels." In 1994 and 1995 they raised their dividend.
Lockheed-Martin, as well as VWR Corporation now have a provision that if
anyone has 40% or more of the shares cumulative voting applies: it does
apply at the latter company.
In 1995 American Premier adopted cumulative voting. Allegheny Power System
tried to take away cumulative voting, as well as put in a stagger system,
and stockholders defeated it, showing stockholders are interested in their
rights.
If you agree, please mark your proxy for this resolution; otherwise, it is
automatically cast against it unless you have marked to abstain."
THE BOARD OF DIRECTORS OPPOSES CUMULATIVE VOTING FOR THE FOLLOWING REASONS:
The Board of Directors believes that directors should be chosen for their
capacity and willingness to represent all shareholders, and that the present
system of voting for directors provides the best assurance that the decisions of
the directors will be made in the best interests of all the shareholders, rather
than for the benefit of special interest groups.
Cumulative voting tends to produce directors beholden to the narrow interests of
those who elect them, even though such interests may be adverse to the overall
welfare of the Corporation and its shareholders. A Board encumbered by such
conflicting factions could impede the ability of the Corporation to arrive at
decisions that represent the long-term interests of all shareholders and to
react timely and decisively in critical situations. The factionalism caused by
cumulative voting could also deter independent persons of standing and
reputation from serving on the Board and reduce the sense of cooperation and
mutual confidence which the Board presently maintains.
Neither Florida, the state in which FPL Group is incorporated; Delaware, the
state in which most major publicly-owned corporations are incorporated; nor the
Model Business Corporation Act, which reflects a consensus of the academic and
practicing legal community, adopts cumulative voting. This is in accord with the
Board's belief that the principle of majority rule is the appropriate one for
the election of directors.
Mr. Gilbert submitted cumulative voting proposals at each of the Corporation's
last three Annual Meetings of Shareholders. In each instance the proposal was
overwhelmingly defeated.
The affirmative vote of a majority of the total number of shares of Common Stock
represented at the meeting and entitled to vote is required to approve the
proposed shareholder resolution.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.
8
<PAGE>
PERFORMANCE GRAPHS
The graph below compares the cumulative total returns, including reinvestment of
dividends, of FPL Group Common Stock with the companies in the Standard & Poor's
(S&P) 500 Index and the Dow Jones Electric Utilities Index (Dow Jones
Electrics). The comparison covers the five years ended December 31, 1996, and is
based on an assumed $100 investment on December 31, 1991, in each of the S&P 500
Index, the Dow Jones Electrics, and FPL Group Common Stock. The Dow Jones
Electrics is based on the performance of 46 electric and electric/gas
combination utilities. It includes FPL Group as well as other utility holding
companies with diversified operations.
TOTAL RETURN FOR THE
FIVE YEARS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE OF $100 ON DECEMBER 31,
----------------------------------------------------------------
1991 1992 1993 1994 1995 1996
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
FPL Group $ 100 105 121 115 159 164
S&P 500 $ 100 108 118 120 165 203
Dow Jones Electrics $ 100 107 119 105 138 139
</TABLE>
In 1990, FPL Group announced its intention to focus on its core utility and
other energy-related businesses and to exit businesses not related to its core
strengths. Since then, FPL Group has realigned its senior management team,
reorganized Florida Power & Light Company and divested several
non-energy-related businesses. The graph below shows the cumulative total return
of FPL Group Common Stock since these fundamental changes were made. It covers
the six years ended December 31, 1996, and assumes the investment of $100 on
December 31, 1990.
TOTAL RETURN FOR THE
SIX YEARS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
VALUE OF $100 ON DECEMBER 31,
---------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
FPL Group $ 100 137 144 166 158 219 226
S&P 500 $ 100 130 140 155 157 215 265
Dow Jones Electrics $ 100 130 138 155 136 178 180
</TABLE>
9
<PAGE>
COMMON STOCK OWNERSHIP OF MANAGEMENT AND OTHERS
FPL Group's directors, its executive officers, and the Trustee under its
Employee Thrift Plans beneficially own shares of FPL Group Common Stock as
follows:
<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES(A)
------ -----------------
<S> <C>
H. Jesse Arnelle............................................................................................ 7,764(b)(c)
Robert M. Beall, II......................................................................................... 5,554(c)
David Blumberg.............................................................................................. 4,000(d)
James L. Broadhead.......................................................................................... 136,433(e)
J. Hyatt Brown.............................................................................................. 14,393(c)(f)
Lynne V. Cheney............................................................................................. 3,664(c)
Armando M. Codina........................................................................................... 6,948(b)(c)
Dennis P. Coyle............................................................................................. 10,987
Marshall M. Criser.......................................................................................... 9,069(b)(c)(g)
B. F. Dolan................................................................................................. 15,619(c)
Willard D. Dover............................................................................................ 6,770(c)
Alexander W. Dreyfoos Jr.................................................................................... -0-(h)
Paul J. Evanson............................................................................................. 10,715(b)
Drew Lewis.................................................................................................. 8,369(c)
Frederic V. Malek........................................................................................... 5,531(c)
Paul R. Tregurtha........................................................................................... 7,776(b)(c)
C. O. Woody................................................................................................. 17,718(b)
Michael W. Yackira.......................................................................................... 12,170
All directors and executive officers as a group............................................................. 334,348(i)
Fidelity Management Trust Company........................................................................... 19,102,685(j)
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
- ------------
(a) Information is as of March 1, 1997, except for executive officers' holdings
under Employee Thrift Plans which are as of December 31, 1996. Unless
otherwise indicated, each person has sole voting and sole investment power.
(b) Includes 1253, 2402, 168, and 174 share units for Messrs. Arnelle, Codina,
Criser, and Tregurtha, respectively, and 7664 and 4082 share units for
Messrs. Evanson and Woody, respectively, under deferred compensation plans.
Such units have no voting rights.
(c) Includes 5065, 3034, 4193, 2546, 6301, 6335, 5870, 5369, 4531 and 4602 share
units credited to Messrs. Arnelle, Beall, Brown, Codina, Criser, Dolan,
Dover, Lewis, Malek and Tregurtha, respectively, and 3239 share units
credited to Mrs. Cheney in connection with termination of the FPL Group,
Inc. Non-Employee Director Retirement Plan. Such units have no voting rights
and are subject to forfeiture upon retirement from the Board before age 65.
(d) Mr. Blumberg will retire from the Board of Directors on May 12, 1997.
(e) Includes 96,800 shares of restricted stock as to which Mr. Broadhead has
voting but not investment power.
(f) Includes 200 shares as to which Mr. Brown disclaims beneficial ownership.
(g) Includes 2300 shares as to which Mr. Criser disclaims beneficial ownership.
(h) Mr. Dreyfoos was elected to the Board of Directors on February 17, 1997.
(i) Less than 1% of the Common Stock outstanding.
(j) 10.5% of the Common Stock outstanding; held as Trustee under the Florida
Power & Light Company Master Thrift Plans Trust. The Trustee disclaims
beneficial ownership of such securities.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Corporation's directors and executive officers are required to file initial
reports of ownership and reports of changes of ownership of Common Stock with
the Securities and Exchange Commission. Based upon a review of these filings and
written representations from the directors and executive officers, all required
filings were timely made in 1996 except that Dennis P. Coyle, as
attorney-in-fact for H. Jesse Arnelle, was late in reporting the acquisition of
approximately 10 share units under FPL Group's Deferred Compensation Plan and
Willard D. Dover was late in reporting a "disposition" of 100
10
<PAGE>
shares that occurred as a result of the termination of a testamentary trust of
which he was trustee and his daughter was a beneficiary.
DIRECTOR MEETINGS AND COMMITTEES
The Board of Directors met ten times in 1996. Each director attended at least
75% of the Board meetings and meetings of the committees on which he or she
served that were held during the time he or she was a director.
FPL Group's Audit Committee, currently comprised of Mrs. Cheney and Messrs.
Arnelle, Codina, Criser (Chairman), Dolan, Dover, and Dreyfoos met four times in
1996. The Audit Committee has functional supervision over the internal audit
staff, reviews the system of internal controls and the adequacy of the internal
audit system, and receives reports on activities of the internal auditing
department. It recommends to the Board the independent public accountants and
reviews the scope and results of the audits performed by both the independent
public accountants and the internal auditors. It is responsible for ensuring
that the financial statements present fairly the financial condition of FPL
Group.
The Compensation Committee, currently comprised of Messrs. Arnelle, Beall,
Blumberg, Brown (Chairman), Dolan, Lewis, and Tregurtha, met five times in 1996.
Its functions include reviewing and approving the executive compensation program
for FPL Group and its subsidiaries; setting performance targets; assessing
executive performance; making grants of salary, annual incentive compensation,
and long-term incentive compensation; and approving certain employment
agreements.
The Executive Committee, comprised of Messrs. Broadhead (Chairman), Blumberg,
Brown, Criser, Dolan, and Tregurtha, met six times in 1996. It also functions as
the Nominating Committee. As such, it is responsible for identifying and
evaluating potential nominees for election to the Board and recommends
candidates for all directorships to be filled by the shareholders or the Board.
The Committee will consider potential nominees recommended by any shareholder
entitled to vote in elections of directors. Potential nominees must be submitted
in writing to the Secretary, P.O. Box 14000, 700 Universe Boulevard, Juno Beach,
Florida 33408-0420, and must be received not later than 90 days in advance of
the Annual Meeting of Shareholders.
DIRECTOR COMPENSATION
Directors of FPL Group who are salaried employees of FPL Group or any of its
subsidiaries do not receive any additional compensation for serving as a
director or committee member. Non-employee directors of FPL Group receive an
annual retainer of $27,000, and committee chairpersons receive an additional
annual retainer of $3,000. A fee of $1,300 is paid to non-employee directors for
each Board or committee meeting attended.
Effective November 1, 1996, the FPL Group, Inc. Non-Employee Director Retirement
Plan was terminated. Non-employee directors who have retired at or prior to the
1997 annual shareholders' meeting will continue to be eligible for the current
plan benefit which provides that non-employee directors retiring from the Board
of FPL Group at or after age 65 with a minimum of five years of service receive
an annual retirement benefit equal to the annual retainer being paid to active
directors. The benefit is paid to the director or his or her surviving spouse
for the greater of the director's life or the number of years he or she served
as a director. To more closely align shareholder and director interests, the
retirement benefits of non-employee directors not retiring at or prior to the
1997 annual shareholders' meeting were converted to share units of FPL Group
Common Stock. Directors will be entitled to payment of the then current value of
these share units upon ending service as a Board member at or after age 65.
11
<PAGE>
Non-employee directors are covered by travel and accident insurance while on FPL
Group business and, until May 12, 1997, are eligible for supplemental medical
coverage. Total premiums attributable to such directors amounted to $21,595 for
1996.
Fleming, O'Bryan & Fleming, P.A., in which Willard D. Dover is a principal,
performed legal services for Florida Power & Light Company during 1996 and will
do so in 1997. The fees paid in 1996 were not material to FPL or the law firm.
COMPENSATION COMMITTEE REPORT
The Compensation Committee submits the following report for 1996:
FPL Group's executive compensation program is designed to align compensation
with the Corporation's business strategy, its goals and values, and the return
to its shareholders. The program is also designed to provide a competitive
compensation package, both in terms of its components and overall, that will
attract and retain key executives critical to the success of the Corporation.
In 1994, the Board of Directors adopted, and shareholders approved, an Annual
Incentive Plan that is intended to prevent the loss of the federal income tax
deductions available to the Corporation for the amount of any compensation in
excess of $1,000,000 paid to the chief executive officer and the four other most
highly compensated officers. In accordance with that Annual Incentive Plan, the
Committee structured the 1996 executive compensation program to qualify for
deduction all compensation paid to these officers, and it intends to do likewise
with the executive compensation programs for 1997 and future years as long as
doing so is compatible with what the Committee considers to be a sound
compensation program.
The Committee determines an executive's competitive total level of compensation
based on information drawn from a variety of sources, including utility and
general industry surveys, proxy statements, and industry consultants. The
Corporation's "comparator group" consists of 12 electric utilities (all but one
of which are included in the Dow Jones Electric Utilities Index), eight
telecommunications companies, and six general industrial companies located in
the Southeast. Emerging electric utility industry trends (i.e., deregulation and
increasing competition) and the need to recruit from outside the industry are
the principal reasons for including companies other than electric utilities in
the comparator group.
There are three components to the Corporation's executive compensation program:
base salary, annual incentive compensation, and long-term incentive
compensation. In 1996, the three components were structured so that base salary
represented 30% to 60% of an executive officer's total targeted compensation,
annual incentive compensation represented 20% to 35% of such compensation, and
long-term incentive compensation represented 20% to 40% of such compensation.
The more senior the position, the greater the portion of compensation that is
based on performance.
Base salaries are set by the Committee and are designed to be competitive with
the comparator group companies described above. Generally, the Committee targets
salary levels between the second and third quartiles of the comparator group,
adjusted to reflect the individual's job experience and responsibilities.
Increases in base salaries are based on the comparator group's practices, the
Corporation's performance, the individual's performance, and increases in cost
of living indices. The corporate performance measures used in determining
adjustments to executive officers' base salaries are the same performance
measures used to determine annual incentive compensation, weighted as discussed
below in regard to the chief executive officer's compensation. James L.
Broadhead's employment agreement provides that his base salary shall not be less
than his base salary in effect when the agreement was signed in 1993; otherwise
his base salary is subject to annual review in accordance with the Corporation's
normal practices. Base salaries are reviewed and adjusted annually.
Annual incentive compensation is based on the attainment of net income goals for
the Corporation which are established by the Committee at the beginning of the
year. The amounts earned on the basis of this performance measure are subject
12
<PAGE>
to reduction based on the degree of achievement of other corporate performance
measures (and in the case of FPL, business unit performance measures), and in
the discretion of the Committee. These other corporate performance measures,
which for 1996 consisted of the financial and operating indicators discussed
below in regard to the chief executive officer's compensation, and business unit
performance measures were also established by the Committee at the beginning of
the year. For 1996, the highest net income goal was met, and the average level
of achievement of the other performance measures exceeded the targets. However,
the amounts paid out for 1996 were less than the maximum amounts that could have
been paid based on the attainment of the net income goals.
Long-term incentive compensation is based on the average level of achievement
under the annual incentive plans over a four-year period. Targeted awards, in
the form of performance shares granted under the Corporation's Long Term
Incentive Plan, are made at the beginning of the period. Payouts are based on
the degree of accomplishment of the goals and objectives embodied in the annual
incentive plans included in the period. Since one of the goals of the
performance share program is to link directly the financial interests of FPL
Group's shareholders and senior management, the payout (except for cash for the
payment of income taxes) is made in shares of Common Stock which the recipient
is expected, absent extraordinary circumstances, to hold for the duration of his
or her employment.
For 1996, Mr. Broadhead, FPL Group's chief executive officer, was paid $860,000
in base salary, $681,100 in annual incentive compensation, and $990,206
(consisting of 13,130 shares of Common Stock and $396,073 in cash) in long-term
incentive compensation. The base salary reflects the Committee's assessment of
Mr. Broadhead's overall performance and an analysis of the salaries of the chief
executive officers in the comparator group.
Mr. Broadhead's annual incentive compensation for 1996 was based on the
achievement of the Corporation's net income goals and the following performance
measures for FPL (weighted 90%) and the non-utility businesses (weighted 10%)
and upon certain qualitative factors. For FPL, the incentive performance
measures were financial indicators (weighted 50%) and operating indicators
(weighted 50%). The financial indicators were operations and maintenance costs,
capital expenditure levels, 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. For the
non-utility businesses, the performance measures were total combined net income
and the achievement of the net income targets for ESI Energy, Inc. and Turner
Foods Corporation. The qualitative factors included continuing to implement a
new financial policy and other measures to position the Corporation for greater
competition and initiating other actions that significantly strengthen the
Corporation and enhance shareholder value.
The long-term compensation payout to Mr. Broadhead was based on an average level
of achievement of better than 100% of target with respect to the annual
incentive plans for the four years ended December 31, 1996 (although the long-
term payout was limited to 100% of target). Like 1996, the performance measures
for 1993, 1994, and 1995 were based on predefined financial, operational, and
strategic objectives.
Respectfully submitted,
THE COMPENSATION COMMITTEE
J. Hyatt Brown, Chairman B. F. Dolan
H. Jesse Arnelle Drew Lewis
Robert M. Beall, II Paul R. Tregurtha
David Blumberg
13
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth compensation paid during the past three years to
FPL Group's chief executive officer and the other four most highly-compensated
persons who served as executive officers of FPL Group or Florida Power & Light
Company ("FPL") at December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-----------
ANNUAL COMPENSATION PAYOUTS
------------------------------------------------
OTHER
ANNUAL LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION PAYOUTS(A) COMPENSATION(B)
- ---------------------------------------- --------- --------- --------- ------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
James L. Broadhead (c).................. 1996 $ 860,000 $ 681,100 $ 11,399 $ 990,206 $ 13,685
Chairman & CEO 1995 823,700 700,000 33,343 1,041,085 17,474
of FPL Group & FPL 1994 795,800 650,000 6,503 897,335 16,242
Paul J. Evanson......................... 1996 540,000 340,200 2,925 197,471 15,868
President of FPL 1995 500,000 307,400 3,691 155,513 12,906
1994 300,000 150,000 3,740 80,025 11,740
Dennis P. Coyle......................... 1996 360,000 170,100 - 218,965 11,550
General Counsel & 1995 333,900 152,700 4,127 245,851 13,156
Secretary of FPL Group & FPL 1994 322,600 144,073 - 190,059 12,395
Michael W. Yackira...................... 1996 300,000 141,800 4,178 156,927 10,654
Chief Financial Officer 1995 275,000 126,900 5,202 176,200 10,450
of FPL Group & FPL 1994 231,200 110,000 3,199 165,288 9,791
C. O. Woody............................. 1996 295,000 142,500 3,882 184,711 13,448
Sr. Vice President, 1995 283,300 133,400 3,234 207,350 15,539
Power Generation, of FPL 1994 273,700 123,216 1,458 165,288 14,391
</TABLE>
- ------------
(a) 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. Messrs. Evanson and Woody deferred their payouts under FPL Group's
Deferred Compensation Plan.
(b) Represents employer matching contributions of $7,125 to employee thrift
plans for each individual and employer contributions for life insurance as
follows: Mr. Broadhead $6,560, Mr. Evanson $8,743, Mr. Coyle $4,425, Mr.
Yackira $3,529, and Mr. Woody $6,323.
(c) At December 31, 1996, Mr. Broadhead held 96,800 shares of restricted Common
Stock with a value of $4,452,800. 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.
14
<PAGE>
LONG TERM INCENTIVE PLAN AWARDS
In 1996, 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
- ---------------------------------------------------------------- ----------- ------------------ --------------- ---------
<S> <C> <C> <C> <C>
James L. Broadhead.............................................. 20,074 1/1/96 - 12/31/99 - 20,074
Paul J. Evanson................................................. 8,021 1/1/96 - 12/31/99 - 8,021
Dennis P. Coyle................................................. 4,584 1/1/96 - 12/31/99 - 4,584
Michael W. Yackira.............................................. 3,820 1/1/96 - 12/31/99 - 3,820
C. O. Woody..................................................... 3,756 1/1/96 - 12/31/99 - 3,756
<CAPTION>
NAME MAXIMUM
- ---------------------------------------------------------------- -----------
<S> <C>
James L. Broadhead.............................................. 32,118
Paul J. Evanson................................................. 12,834
Dennis P. Coyle................................................. 7,334
Michael W. Yackira.............................................. 6,112
C. O. Woody..................................................... 6,010
</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. A description of the 1996 Annual Incentive Plan performance indicators
is included in the Compensation Committee Report herein.
RETIREMENT PLANS
FPL Group maintains a non-contributory defined benefit pension plan and a
supplemental executive retirement plan. The following table shows the estimated
annual benefits, calculated on a straight-line annuity basis, payable upon
retirement in 1996 at age 65 after the indicated years of service.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
ELIGIBLE AVERAGE -----------------------------------------------------
ANNUAL COMPENSATION 10 20 30 40 50
- ------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 500,000 $ 99,049 $ 198,086 $ 247,134 $ 260,749 $ 263,137
600,000 119,049 238,086 297,134 313,249 315,637
700,000 139,049 278,086 347,134 365,749 368,137
800,000 159,049 318,086 397,134 418,249 420,637
900,000 179,049 358,086 447,134 470,749 473,137
1,000,000 199,049 398,086 497,134 523,249 525,637
1,100,000 219,049 438,086 547,134 575,749 578,137
1,200,000 239,049 478,086 597,134 628,249 630,637
1,300,000 259,049 518,086 647,134 680,749 683,137
1,400,000 279,049 558,086 697,134 733,249 735,637
1,500,000 299,049 598,086 747,134 785,749 788,137
1,600,000 319,049 638,086 797,134 838,249 840,637
1,700,000 339,049 678,086 847,134 890,749 893,137
1,800,000 359,049 718,086 897,134 943,249 945,637
1,900,000 379,049 758,086 947,134 995,749 998,137
2,000,000 399,049 798,086 997,134 1,048,249 1,050,637
</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, 8 years; Mr. Evanson, 4 years;
Mr. Coyle, 7 years; Mr. Yackira, 7 years; and Mr. Woody, 40 years. Amounts shown
in the table reflect deductions to partially cover employer contributions to
Social Security.
15
<PAGE>
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 in
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 the Corporation until
at least age 62.
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.
A supplemental retirement plan for Mr. Evanson provides for benefits based on
two times his credited years of service up to age 65 and one times his credited
years of service thereafter.
The Corporation sponsors a split-dollar life insurance plan for certain of its
senior officers. Benefits under the split-dollar plan are provided by universal
life insurance policies purchased by the Corporation. 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
The Corporation 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 the Corporation 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.
The Corporation and certain of its subsidiaries have entered into employment
agreements with certain officers, including the individuals named in the Summary
Compensation Table, to become effective in the event of a change of control of
the Corporation, which is defined as the acquisition of beneficial ownership of
20% of the voting power of the Corporation, certain changes in the Corporation's
Board, or approval by the shareholders of the liquidation of the Corporation or
of certain mergers or consolidations or of certain transfers of the
Corporation's assets. These agreements are intended to assure the Corporation of
the continued services of key officers. The agreements provide that each officer
shall be employed by the Corporation 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.
16
<PAGE>
SHAREHOLDER PROPOSALS
Proposals on matters appropriate for shareholder consideration consistent with
the regulations of the Securities and Exchange Commission submitted by
shareholders for inclusion in the proxy statement and form of proxy for the 1998
Annual Meeting of Shareholders must be received at FPL Group's principal
executive offices on or before November 25, 1997. Such shareholder proposals may
be mailed to Dennis P. Coyle, Secretary, FPL Group, Inc., Post Office Box 14000,
700 Universe Boulevard, Juno Beach, Florida 33408-0420.
GENERAL
The expense of soliciting proxies will be borne by FPL Group. Proxies will be
solicited principally by mail, but directors, officers, and regular employees of
FPL Group or its subsidiaries may solicit proxies personally or by telephone.
FPL Group has retained Corporate Investor Communications, Inc. to assist in the
solicitation of proxies, for which services it will be paid a fee of $5,000 plus
out-of-pocket expenses. FPL Group will reimburse custodians, nominees or other
persons for their out-of-pocket expenses in sending proxy materials to
beneficial owners.
OTHER BUSINESS
The Board of Directors does not know of any other business to be presented at
the meeting and does not intend to bring before the meeting any matter other
than the proposals described herein. However, if any other business should come
before the meeting, or any adjournments thereof, the persons named in the
accompanying proxy card will have discretionary authority to vote all proxies.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, IT IS IMPORTANT THAT YOUR SHARES BE
REPRESENTED AT THE ANNUAL MEETING. ACCORDINGLY, YOU ARE RESPECTFULLY REQUESTED
TO MARK, SIGN, DATE, AND RETURN THE ACCOMPANYING PROXY AT YOUR EARLIEST
CONVENIENCE.
BY ORDER OF THE BOARD OF DIRECTORS.
DENNIS P. COYLE
Secretary
March 24, 1997
17
<PAGE>
APPENDIX A
FPL GROUP, INC.
NON-EMPLOYEE DIRECTORS STOCK PLAN
SECTION 1. PURPOSE.
The purpose of the FPL Group, Inc. Non-Employee Directors Stock Plan (the
"Plan") is to further strengthen the alignment of interests between members of
the Board of Directors (the "Board") of FPL Group, Inc. (the "Corporation") who
are not employees of the Corporation (the "Non-Employee Directors") and the
Corporation's shareholders through the increased ownership by Non-Employee
Directors of shares of the Corporation's common stock ("Common Stock").
SECTION 2. ELIGIBILITY AND PARTICIPATION.
Participation in the Plan shall be limited to Non-Employee Directors.
The Board of Directors or the Committee (as defined in Section 6 hereof) may
direct that all or a portion of a Non-Employee Director's future compensation
for services as a member of the Board be paid in shares of Common Stock.
Additionally, a Non-Employee Director may elect to receive all or a portion
of his or her future compensation for services as a member of the Board in
shares of Common Stock.
Compensation for services as a member of the Board shall include, without
limitation, the annual retainer, any committee chairperson retainer and any fees
for attendance at meetings of the Board and its committees.
A Non-Employee Director may elect to receive compensation in shares of
Common Stock by providing the Corporation with written notice of his or her
election specifying the portion and components of his or her future compensation
for services as a member of the Board that he or she wishes to receive in shares
of Common Stock. This notice shall be effective when received by the Corporation
unless, in the opinion of counsel for the Corporation, such an effective date
would adversely impact the availability of the exemption from Section 16(b) of
the Act provided by Rule 16b-3 for any of the Non-Employee Director's
acquisitions of Common Stock under the Plan, in which event the election shall
be effective at the earliest date that will not adversely impact the
availability of such exemption.
A Non-Employee Director may revoke or change any election at any time by
means of a subsequent election in writing if, in the opinion of counsel for the
Corporation, such a subsequent election would not adversely impact the
availability of the exemption from Section 16(b) of the Act provided by Rule
16b-3 for any of the Non-Employee Director's acquisitions of Common Stock under
the Plan.
SECTION 3. AWARDS TO NEW DIRECTORS.
The Board of Directors or the Committee may make a one-time award of shares
of Common Stock to Non-Employee Directors who are first elected to the Board
after January 1, 1997. Any such award shall be made within six months after such
Non-Employee Director is first elected to the Board. The value of such shares,
determined on the basis described in Section 5 hereof, shall not exceed 100% of
the then-current annual retainer for Non-Employee Directors. Such shares of
Common Stock may not be sold or transferred by the recipient so long as he or
she remains a Director and shall be forfeited if, within five years after the
date of his or her initial election, he or she ceases to be a Director for any
reason other than death, disability or attainment of the Board's mandatory
retirement age.
A-1
<PAGE>
SECTION 4. COMMON STOCK SUBJECT TO THE PLAN.
The total number of shares of Common Stock reserved and available for
distribution under the Plan shall be 300,000, subject to adjustment as herein
provided. Common Stock issued under the Plan may be either authorized and
unissued shares or shares purchased in the open market.
In the event of any merger, reorganization, consolidation, recapitalization,
Common Stock dividend, Common Stock split or other change in corporate structure
affecting the Common Stock, the Committee, in its sole discretion, shall make
such modifications, substitutions or adjustments as it deems necessary to
reflect such change so as to prevent the dilution or enlargement of rights,
including, but not limited to, modifications, substitutions or adjustments in
the aggregate number of shares reserved for issuance under the Plan.
SECTION 5. ISSUANCE OF SHARES.
The number of shares to be received by a Non-Employee Director under the
Plan shall be based on the closing price of the Common Stock on the New York
Stock Exchange ("NYSE") on the date the Non-Employee Director's fees for serving
as a member of the Board would otherwise have been paid or, if there is no such
closing price on such day, at the closing price of the Common Stock on the NYSE
on the next preceding business day. For one-time awards to Non-Employee
Directors who are first elected to the Board after January 1, 1997, the
applicable price shall be the closing price of the Common Stock on the NYSE on
the business day next preceding the date of his or her initial election to the
Board.
All shares issued under the Plan, including fractional shares, shall be held
in a book-entry account with the Corporation's transfer agent unless the
Committee designates another person to act in that capacity. Non-Employee
Directors may in the alternative elect to receive a stock certificate
representing the number of whole shares acquired by notifying the Corporate
Secretary of the Corporation in writing. The Corporation will make a cash
payment to the Non-Employee Director for any fractional share at a price equal
to the closing price of the Common Stock on the NYSE on the date the election to
receive a stock certificate is received by the Corporate Secretary (or, if there
is no closing price of the Common Stock on the NYSE on such date, the closing
price of the Common Stock on the NYSE on the next preceding business day),
multiplied by such fraction.
Common Stock acquired under this Plan shall be subject to such other
conditions and restrictions, if any, as the Committee may determine.
SECTION 6. ADMINISTRATION.
The Plan shall be administered by a committee (the "Committee") of three or
more Directors appointed by the Board, who shall serve at the discretion of the
Board. The members of the Committee shall be "non-employee directors " as
defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"Act"), or any successor rule or definition adopted by the Securities and
Exchange Commission.
Subject to the provisions of the Plan, the committee shall have sole and
complete authority to construe and interpret the Plan; to establish, amend and
rescind appropriate rules and regulations relating to the Plan; to administer
the Plan; and to take all such steps and make all such determinations in
connection with the Plan as it may deem necessary or advisable to carry out the
provisions and intent of the Plan. All determinations of the Committee shall be
by a majority of its members, and its determinations shall be final and
conclusive for all purposes and upon all persons, including, but without
limitation, the Corporation, the Committee, the Non-Employee Directors and their
respective successors in interest.
A-2
<PAGE>
SECTION 7. ADDITIONAL PROVISIONS.
The Board or the Committee may, at any time, amend, alter or discontinue the
Plan, but no amendment, alteration or discontinuance shall be made which would
impair the rights of a Non-Employee Director with respect to shares of Common
Stock theretofore distributed to such Non-Employee Director under the Plan
without the Non-Employee Director's consent, or which, without the approval of
the Corporation's shareholders, would cause transactions pursuant to the Plan
not to be exempt under Rule 16b-3.
With respect to persons subject to Section 16 of the Act, transactions under
this Plan are intended to be exempt transactions under Rule 16b-3. To the extent
any transaction under the Plan fails to be exempt, it shall be deemed null and
void to the extent permitted by law and deemed advisable by the Committee.
Every recipient of shares pursuant to this Plan shall be bound by the terms
and provisions of the Plan, and the acceptance of any transfer of shares
pursuant to this Plan shall constitute a binding agreement between the recipient
and the Corporation.
SECTION 8. DURATION OF THE PLAN.
The Plan shall become effective upon the approval of the Plan by the
affirmative vote of a majority of the total number of shares of Common Stock
represented and entitled to vote at the Corporation's 1997 annual meeting of
shareholders. The Plan will terminate on May 12, 2007 unless an earlier
termination date is fixed by the Board or the Committee, provided that no such
termination shall affect the prior rights under the plan of anyone to whom
shares have been transferred prior to such termination.
A-3
<PAGE>
DETACH HERE FPLF
FPL GROUP, INC.
P.O. BOX 9375
BOSTON, MA 02205
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned hereby appoints Dennis P. Coyle, Lawrence J. Kelleher,
R and Jack G. Milne, and each of them, with power of substitution, proxies
O of the undersigned, to vote for all shares of Common Stock of FPL Group,
X Inc. that the undersigned would be entitled to vote at the Annual
Y Meeting of Shareholders to be held May 12, 1997, and any adjournment or
postponement thereof, upon the matters referred to on this proxy and,
in their discretion, upon any other business that may properly come
before the meeting.
This Proxy when properly executed will be voted in the manner
directed by the undersigned shareholder. If no direction is made, this
Proxy will be voted FOR proposals 1, 2 and 3 and AGAINST proposal 4.
1. Election of Directors: H. Jesse Arnelle, Robert M. Beall, II,
James L. Broadhead, J. Hyatt Brown,
Lynne V. Cheney, Armando M. Codina,
Marshall M. Criser, B. F. Dolan,
Willard D. Dover, Alexander W. Dreyfoos Jr.,
Paul J. Evanson, Drew Lewis, Frederic V. Malek
and Paul R. Tregurtha.
-----------
(SIGN ON OTHER SIDE.) SEE REVERSE
SIDE
-----------
<PAGE>
FPL March 24, 1997
GROUP
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held at 10:00 a.m. on Monday, May 12, 1997, at the PGA National Resort in
Palm Beach Gardens, Florida. Detailed information as to the business to be
transacted at the meeting is contained in the accompanying Notice of Annual
Meeting and Proxy Statement.
Regardless of whether you plan to attend the meeting, it is important that
your shares be voted. Accordingly, we ask that you sign and return your proxy
as soon as possible in the envelope provided. If you plan to attend the
meeting, please mark the appropriate box on the proxy.
Sincerely,
/s/ James L. Broadhead
James L. Broadhead
Chairman of the Board and
Chief Executive Officer
DETACH HERE FPLF
__ __
- --- PLEASE MARK |
X VOTES AS IN |
- --- THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" PROPOSALS 1, 2 AND 3
FOR WITHHELD
1. Election of Directors / / / /
(see reverse).
________________________________________________
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. Ratification of / / / / / /
Auditors.
3. Approval of a / / / / / /
Non-Employee Directors
Stock Plan.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "AGAINST" PROPOSAL 4
FOR AGAINST ABSTAIN
4. A shareholder proposal / / / / / /
relating to cumulative
voting for the election
of directors.
5. Such other business as may properly come before the meeting.
Mark Here Mark Here
For Address If You Plan
Change And / / To Attend / /
Note At Left The Meeting
When signing as attorney, executor, trustee, guardian, or
corporate officer, please give title. For joint account,
each joint owner should sign.
Signature:_________________ Date:______ Signature:_________________ Date:______
