<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 Section240.14a-11(c) or
Section240.14a-12
FPL GROUP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(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 10, 1999
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 10, 1999, to consider and act upon:
-Election of directors.
-Ratification of the appointment of Deloitte & Touche LLP as auditors.
-Reapproval of the Annual Incentive Plan.
-Reapproval of part of the Long Term Incentive Plan.
-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 1, 1999.
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 29, 1999
<PAGE>
FPL GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 10, 1999
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 10, 1999. 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 your 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 reapproval of the Annual Incentive Plan.
-For the reapproval of part of the Long Term Incentive Plan.
-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 1, 1999, 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 1, 1999, the Corporation had 180,165,035 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
29, 1999.
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 fifteen nominees for election as directors, their principal
occupations, and certain other information regarding them. Unless otherwise
noted, each director has held his or her present position continuously for five
years or more and his or her employment history is uninterrupted. Directors
serve until the next Annual Meeting of Shareholders or until their respective
successors are elected and qualified.
Unless you specify otherwise 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>
H. JESSE ARNELLE Mr. Arnelle, 65, became of counsel to Womble, Carlyle,
[LOGO] Sandridge & Rice, a North Carolina-based law firm, in November 1997, after
retiring as a senior partner from the law firm of Arnelle, Hastie, McGee, Willis
& Greene, a law firm whose predecessor he co-founded in 1985. He is a director
of Armstrong World Industries, Inc., Eastman Chemical, Textron, Inc., Union
Pacific Resources Group, Inc., and Waste Management, Inc. He served as
vice-chairman and then chairman of the Pennsylvania State University Board of
Trustees from 1993 to 1998. Mr. Arnelle has been a director of FPL Group since
1990.
SHERRY S. BARRAT Mrs. Barrat, 49, is president and chief executive officer of
[LOGO] Northern Trust Bank of California, N.A. Prior to being elected to that office in
January 1999, she was president of Northern Trust Bank for Palm Beach and Martin
Counties, Florida. While in Florida, she was also a member of the board of
directors of the Raymond F. Kravis Center for the Performing Arts and the
Economic Council of Palm Beach County. Mrs. Barrat became a director of FPL
Group in February 1998.
ROBERT M. BEALL, II Mr. Beall, 55, is chairman and chief executive officer of
[LOGO] 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 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>
2
<PAGE>
<TABLE>
<S> <C>
JAMES L. BROADHEAD Mr. Broadhead, 63, is chairman and chief executive officer
[LOGO] 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 Delta Air
Lines, Inc., New York Life Insurance Company, and The Pittston Company, and a
trustee of Cornell University. Mr. Broadhead has been a director of FPL Group
since 1989.
J. HYATT BROWN Mr. Brown, 61, is chairman, president and chief executive
[LOGO] officer of Poe & Brown, Inc., an insurance broker based in Daytona Beach and
Tampa. He is a director of SunTrust Banks, Inc., BellSouth Corporation, First
Floridian Auto & Home Insurance Company, 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.
ARMANDO M. CODINA Mr. Codina, 52, is the chairman and chief executive officer
[LOGO] of Codina Group, Inc., a Coral Gables, Florida-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., Weeks Corp., and
Winn-Dixie Stores, Inc. Mr. Codina has been a director of FPL Group since 1994.
MARSHALL M. CRISER Mr. Criser, 70, became of counsel to McGuire, Woods, Battle
[LOGO] & Boothe, L.L.P., in 1997. For eight years before, he was chairman of the
Jacksonville law firm of Mahoney Adams & Criser, P.A. He was also formerly
president of the University of Florida. Mr. Criser is a director of CSR America,
Inc., Flagler System, Inc., and Perini Corporation. 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>
B. F. DOLAN Mr. Dolan, 71, retired in 1992 as chairman and in 1991 as chief
[LOGO] 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, Inc. in
1960. He is a director of First Union Corporation and Polaris Industries, Inc.
Mr. Dolan has been a director of FPL Group since 1992.
WILLARD D. DOVER Mr. Dover, 68, has been a member of the Fort Lauderdale law
[LOGO] firm of Niles, Dobbins, Meeks, Raleigh & Dover since 1998. For 40 years prior
thereto he was a member of the law firm of Fleming, O'Bryan & Fleming, P.A. He
is a former chairman of the Florida Council of 100 and is a trustee and former
chairman of the Florida Council of Economic Education. He has previously served
as a trustee of the Nova Southeastern University Law Center and Florida Atlantic
University Foundation, Inc., and as chairman of the Florida Atlantic Research
and Development Authority. Mr. Dover has been a director of FPL Group since
1989.
ALEXANDER W. DREYFOOS, JR. Mr. Dreyfoos, 67, is the owner and chief executive
[LOGO] officer of the Dreyfoos Group of companies. These include Photo Electronics
Corporation, a developer of electronic equipment for the photographic industry,
which he founded in 1963. He is a director of First Union National Bank of
Florida and Kuhlman Corporation. He serves as chairman of the Raymond F. Kravis
Center for the Performing Arts, and a trustee of M.I.T. Corporation. He is a
member of the Florida Council of 100 and a founding member and former chairman
of the Economic Council of Palm Beach County. Mr. Dreyfoos has been a director
of FPL Group since February 1997.
PAUL J. EVANSON Mr. Evanson, 57, became the president of Florida Power & Light
[LOGO] Company and a director of FPL Group in 1995 after having served as vice
president, finance, and chief financial officer of FPL Group and senior vice
president, finance, and chief financial officer of Florida Power & Light Company
since 1992. Prior to that, he was president and chief operating officer of Lynch
Corporation, a diversified holding company. Mr. Evanson is a director of Florida
Power & Light Company, Lynch Corporation, and Southern Energy Homes, Inc.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
DREW LEWIS Mr. Lewis, 67, was chairman and chief executive officer of Union
[LOGO] Pacific Corporation, a transportation and natural resources company, from 1986
to 1997. He is a director of Aegis Communications Group, Inc., American Express
Company, Gannett Co., Inc., Gulfstream Aerospace Corp., Lucent Technologies,
Inc., Millennium Bank, 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.
FREDERIC V. MALEK Mr. Malek, 62, has been chairman of Thayer Capital Partners,
[LOGO] 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 Aegis Communications Group, Inc., American Management Systems, Inc.,
Automatic Data Processing Corporation, Inc., CB Richard Ellis, Global Vacation
Group, HCR-Manor Care, Inc., Northwest Airlines, Inc., and various PaineWebber
mutual funds. Mr. Malek has been a director of FPL Group since 1987.
PAUL R. TREGURTHA Mr. Tregurtha, 63, is chairman and chief executive officer of
[LOGO] 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.
ROGER YOUNG Mr. Young, 55, became the president and a director of FPL Group in
[LOGO] February 1999. From 1988 until its merger with Southern Electric plc in December
1998, he was chief executive of Scottish Hydro-Electric plc, a utility that
generated and marketed electricity throughout Great Britain and operated an
electric transmission and distribution system in northern Scotland. He was also
a non-executive director of Friends Ivory & Sime plc, Edinburgh, and Bank of
Scotland.
</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, 1999, and to
perform such other services as may be required of them.
Representatives of Deloitte & Touche LLP will be present at the 1999 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.
REAPPROVAL OF INCENTIVE COMPENSATION PLANS
BACKGROUND
For many years the Corporation has adhered to the principle of
pay-for-performance. Payments of both annual and long-term incentive
compensation to senior officers are based on the achievement of specific
performance measures, as described in the Compensation Committee Report herein.
The following two proposals seek shareholder reapproval necessary to enable the
Corporation to continue to deduct for federal income tax purposes certain
compensation which may be paid in the future under the Corporation's Annual
Incentive Plan ("Annual Plan") and Long Term Incentive Plan ("Long Term Plan").
These plans were initially approved by shareholders in 1994.
The Internal Revenue Code (the "Tax Code") places a $1 million limit on the
income tax deduction that may be taken by publicly-held corporations such as FPL
Group for compensation paid to the chief executive officer and the four other
most highly-compensated officers ("Covered Officers") unless such compensation
is based on the attainment of objective performance goals established in advance
by a committee of two or more outside directors and the "material terms" of the
plans under which the compensation is to be paid are disclosed to and approved
by shareholders. Because the Corporation's plans give the Compensation Committee
discretion to establish the performance goals, the Tax Code requires that the
plans' material terms be reapproved by shareholders at least once every five
years.
Accordingly, shareholders are being asked to reapprove the material terms
(described below) of the Annual Plan and a portion of the Long Term Plan. If
such reapprovals are not obtained the Corporation will lose the federal income
tax deduction for compensation in excess of $1 million paid to any of the
Covered Officers. This would result in a higher income tax liability for the
Corporation and a corresponding decrease in net income. The Tax Code requires
the affirmative vote of a majority of the votes cast, including abstentions, for
reapproval.
ANNUAL INCENTIVE PLAN
The persons eligible to participate in the Annual Plan are all officers and
other salaried employees of the Corporation and its subsidiaries whose
performance significantly contributes to the success of the Corporation.
Participants are selected by the Compensation Committee, which is comprised
entirely of non-employee directors.
The Annual Plan is based on the attainment of net income goals. At the beginning
of each year, the Compensation Committee establishes written net income goals
for the Corporation and targeted annual incentive awards for the participants.
The targeted awards are established by the Compensation Committee based on a
percentage of base salary. Payouts of the awards are based on the degree of
achievement of the net income goals. The targets are objective: there is a
minimum net income level that must be achieved before any payout may occur, a
targeted payout, and a maximum payout. Payouts are subject to reduction based on
the level of achievement of other performance measures established by the
Compensation Committee and at the discretion of the Compensation Committee.
For 1999, the maximum incentive award is set at 200% of the targeted award for
each individual, and the maximum annual incentive payments that could be earned
by the officers named in the Summary Compensation Table range from $290,000 to
$1,500,000. Assuming growth in the target awards to reflect inflation and
competitive practice, the maximum annual incentive payment payable to the most
highly-compensated executive officer within the next five years could rise to
$2,000,000.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" REAPPROVAL.
6
<PAGE>
LONG TERM INCENTIVE PLAN
Like the Annual Plan, the individuals eligible to participate in the Long Term
Plan are all officers and other salaried employees of the Corporation and its
subsidiaries whose performance significantly contributes to the success of the
Corporation. Participants are selected by the Compensation Committee.
The Long Term Plan provides for the grant of performance awards, stock
appreciation rights, restricted stock, performance-based restricted stock,
deferred stock, dividend equivalents, and other stock-based awards, or
combinations of these awards. As required by the Tax Code, the material terms of
the Long Term Plan relating to performance awards, performance-based restricted
stock, and other stock-based awards subject to performance criteria (including
shareholder value awards) are being submitted for reapproval by shareholders.
Performance awards confer upon a participant rights payable or exercisable based
on the attainment of certain performance objectives during specified award
periods. Performance awards are denominated in shares of Common Stock, may be
payable in cash, stock, other awards, or other property, and may be subject to
such forfeiture conditions, restrictions, and other terms as the Compensation
Committee may specify. At the beginning of each year, the Committee makes grants
of performance awards, denominated in shares of Common Stock, to the
participants. The grants constitute targeted long-term incentive compensation
awards which can be earned over a specified award period (currently four years)
based on performance. Payouts of performance awards are determined by
multiplying the number of shares granted with respect to an award by the
participant's average level of attainment, expressed as a percentage which may
not exceed 160%, of his or her targeted award under the Annual Plan for each of
the years encompassed by the award period. Awards under the Annual Plans are
based on the attainment of specified amounts of net income, as described above
under "Annual Incentive Plan". The same performance criteria and payout formula
may be used for awards of performance-based restricted stock and other
stock-based awards. The Compensation Committee has discretion to reduce the
payout, but not to increase it.
Shareholder value awards are targeted amounts of shares of Common Stock that are
payable at the end of a specified performance period (currently three years).
The amount of the payout is determined by multiplying the participant's targeted
number of shares by a factor derived by dividing the average annual total
shareholder return of FPL Group (price appreciation of FPL Group Common Stock
plus dividends) by the total shareholder return of the Dow Jones Electric
Utilities Index companies over the performance period. The payout may not exceed
160% of the targeted awards.
A maximum of 250,000 shares (or the equivalent fair market value thereof for
awards payable other than in shares but valued by reference to shares) may be
made subject to performance awards, performance-based restricted stock, and
other stock-based awards subject to performance criteria in any year. The
maximum payout of such awards in any year may not exceed 160%, or 400,000 shares
in the aggregate and 100,000 shares to any individual. No participant may
receive awards covering or representing more than 25% of the maximum number of
shares which may be made subject to such types of awards in any year.
In the event of a "change of control" of the Corporation, automatically in the
case of the Covered Officers, (i) all performance criteria of performance-based
awards will be deemed fully achieved and all such awards shall be fully earned
and vested and (ii) all outstanding awards will be cancelled and the holder will
be paid in cash therefor on the basis of the "change of control price" as of the
date that the change of control occurs or such other date as the Compensation
Committee may determine prior to the change of control.
A "change of control" is deemed to have occurred if: (i) any person, other than
the Corporation, a subsidiary or employee benefit plan of the Corporation, or a
corporation in a transaction resulting in more than 75% of its voting securities
being owned by the Corporation's shareholders, is or becomes the beneficial
owner of 20% or more of the voting power of the Corporation's outstanding voting
securities; (ii) individuals who were members of the Board at the effective date
of the Long Term Plan cease, for any reason to constitute at least a majority
thereof, unless each director who was not a director at such date was elected
by, or on the recommendation of, at least a majority of the directors who were
serving at such date or who were subsequently so elected or appointed; (iii) the
Corporation's shareholders approve a merger, sale of assets or other similar
transaction with respect to which the Corporation's shareholders immediately
before the transaction do not own at least 75% of the voting securities of the
corporation resulting from the transaction; or (iv) the shareholders approve the
liquidation or dissolution of the Corporation. "Change of control price" means
the highest price per share paid in the open market, or offered to be paid in a
transaction related to the change of control, during the preceding 60-day
period.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" REAPPROVAL.
7
<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
500 Index (S&P 500) and the Dow Jones Electric Utilities Index (Dow Jones
Electrics). The comparison covers the five years ended December 31, 1998, and is
based on an assumed $100 investment on December 31, 1993, in each of the S&P
500, the Dow Jones Electrics, and FPL Group Common Stock. The Dow Jones
Electrics is based on the performance of 44 electric and electric/gas
combination utilities. It includes FPL Group as well as other utility holding
companies with diversified operations.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TOTAL RETURN FOR THE
<S> <C> <C> <C>
FIVE YEARS ENDED DECEMBER 31, 1998
VALUE OF $100 ON DECEMBER 31,
FPL GROUP DOW JONES ELECTRICS S&P 500
1993 $100 $100 $100
1994 95 88 101
1995 132 115 139
1996 136 117 171
1997 182 147 229
1998 196 168 294
</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 essentially all its
non-energy-related businesses. The graph below shows the cumulative total
return, including reinvestment of dividends, of FPL Group Common Stock since
these fundamental changes were made. It covers the eight years ended December
31, 1998, and assumes the investment of $100 on December 31, 1990.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TOTAL RETURN FOR THE
<S> <C> <C> <C>
EIGHT YEARS ENDED DECEMBER 31, 1998
VALUE OF $100 ON DECEMBER 31,
FPL GROUP DOW JONES ELECTRICS S&P 500
1990 $100 $100 $100
1991 137 130 130
1992 144 138 140
1993 166 155 155
1994 158 136 157
1995 219 178 215
1996 226 180 265
1997 302 228 353
1998 325 260 454
</TABLE>
8
<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................................................................ 8,490(b)(c)(j)
Sherry S. Barrat................................................................ 2,005(b)(j)
Robert M. Beall, II............................................................. 7,083(c)(j)
James L. Broadhead.............................................................. 203,141(d)(e)
J. Hyatt Brown.................................................................. 15,045(c)(f)(j)
Armando M. Codina............................................................... 9,328(b)(c)(j)
Dennis P. Coyle................................................................. 30,378(d)(e)
Marshall M. Criser.............................................................. 10,346(b)(c)(h)(j)
B. F. Dolan..................................................................... 16,746(c)(j)
Willard D. Dover................................................................ 7,234(c)(j)
Alexander W. Dreyfoos, Jr....................................................... 6,985(b)(j)
Paul J. Evanson................................................................. 44,722(b)(d)(e)
Drew Lewis...................................................................... 11,475(c)(j)
Frederic V. Malek............................................................... 6,026(c)(j)
Paul R. Tregurtha............................................................... 8,280(b)(c)(j)
C. O. Woody..................................................................... 26,821(b)(d)(e)(i)
Michael W. Yackira.............................................................. 50,130(d)(e)
Roger Young..................................................................... -- (g)
All directors and executive officers as a group................................. 550,210(k)
Fidelity Management Trust Company............................................... 17,281,209(l)
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
- ------------
(a) Information is as of March 1, 1999, except for holdings under retirement
plans, which are as of December 31, 1998.
(b) Includes 1,795; 4,241; 992; 1,785; 185 and 205 share units for Messrs.
Arnelle, Codina, Criser, Dreyfoos, Tregurtha and Mrs. Barrat, respectively,
and 12,863 and 8,825 shares for Messrs. Evanson and Woody, respectively,
under deferred compensation plans. Such units have no voting rights.
(c) Includes 4,947; 2,963; 4,095; 2,487; 6,154; 6,188; 5,734; 5,244; 4,426 and
4,495 share units for Messrs. Arnelle, Beall, Brown, Codina, Criser, Dolan,
Dover, Lewis, Malek, and Tregurtha, respectively, granted in connection with
the 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) Includes 13,159; 3,188; 3,199; 1,224 and 1,908 share units for Messrs.
Broadhead, Coyle, Evanson, Woody and Yackira, respectively, credited to a
Supplemental Matching Contribution Account under the Supplemental Executive
Retirement Plan.
(e) Includes 146,800; 20,000; 25,000; 10,000 and 35,000 shares of restricted
stock as to which Messrs. Broadhead, Coyle, Evanson, Woody and Yackira,
respectively, have voting but not investment power.
(f) Includes 350 shares as to which Mr. Brown disclaims beneficial ownership.
(g) Mr. Young became a member of the Board on February 15, 1999.
(h) Includes 2,300 shares as to which Mr. Criser disclaims beneficial ownership.
(i) Includes 4,574 shares as to which Mr. Woody disclaims beneficial ownership.
(j) Includes 600 shares of restricted stock held by each of Messrs. Arnelle,
Beall, Brown, Codina, Criser, Dolan, Dover, Lewis, Malek and Tregurtha and
800 shares of restricted stock held by each of Mrs. Barrat and Mr. Dreyfoos,
as to which each person has voting but not investment power.
(k) Less than 1% of the Common Stock outstanding.
(l) 9.6% 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.
9
<PAGE>
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 1998.
DIRECTOR MEETINGS AND COMMITTEES
The Board of Directors met seven times in 1998. 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, comprised of Mrs. Barrat and Messrs. Arnelle,
Criser (Chairman), Dolan, Dover, and Dreyfoos met four times in 1998. 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, comprised of Messrs. Arnelle, Beall, Brown
(Chairman), Codina, Dolan, Lewis, and Tregurtha, met four times in 1998. 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), Brown,
Criser, Dolan, Malek, and Tregurtha, met five times in 1998. 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 $32,000 plus 300 shares of Common Stock. Non-employee
committee chairpersons receive an additional annual retainer of $4,000. A fee of
$1,300 is paid to non-employee directors for each Board or committee meeting
attended. Newly-elected non-employee directors are awarded 200 shares of Common
Stock when they join the Board.
Effective November 1, 1996, FPL Group's Non-Employee Director Retirement Plan
was terminated. Retirement benefits of non-employee directors in office in 1996
and not retiring at or prior to the 1997 annual shareholders' meeting were
converted to share units of FPL Group Common Stock. Such directors will be
entitled to payment of the then current value of these share units upon ending
service as a Board member at or after age 65.
Non-employee directors are covered by travel and accident insurance while on FPL
Group business. Total premiums attributable to such directors amounted to $7,806
for 1998.
Fleming, O'Bryan & Fleming, P.A., of which Willard D. Dover was a member,
performed legal services for Florida Power & Light Company during 1998. The fees
paid in 1998 were not material to FPL or the law firm.
10
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee submits the following report for 1998:
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 1998 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 1999 and future years as long as
doing so is compatible with what the Committee considers to be a sound
compensation program.
The Committee determines an executive's competitive total level of compensation
based on information drawn from a variety of sources, including utility and
general industry surveys, proxy statements, and independent compensation
consultants. The Corporation's "comparator group" consists of nine electric
utilities (all but one of which are included in the Dow Jones Electric Utilities
Index), five 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 1998, the three components were structured so that base salary
represented 25% to 60% of an executive officer's total targeted compensation,
annual incentive compensation represented 15% to 25% of such compensation, and
long-term incentive compensation represented 20% to 55% of such compensation.
The more senior the position, the greater the portion of compensation that is
based on performance.
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 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 1998 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 1998, 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 1998 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 for performance share
awards, and on the average annual total shareholder return of FPL Group, as
compared to that of the Dow Jones Electric Utilities Index companies, for
three-year shareholder value awards.
11
<PAGE>
Targeted awards, in the form of shares granted under the Corporation's Long Term
Incentive Plan, are made at the beginning of the period. Since one of the goals
of the performance share program is to link directly the financial interests of
FPL Group's shareholders and senior management, the four-year performance share
award payout (except for cash for the payment of incomes taxes) is made in
shares of Common Stock which the recipient is expected, absent special
circumstances, to hold for the duration of his or her employment.
For 1998, Mr. Broadhead, FPL Group's chief executive officer, was paid $950,000
in base salary, $1,050,000 in annual incentive compensation, and $2,004,180
(consisting of 35,869 shares of Common Stock) 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 1998 was based on the
achievement of the Corporation's net income goals and the following performance
measures for Florida Power & Light Company ("FPL") (weighted 75%) and the
non-utility and/or new businesses (weighted 25%) and upon certain qualitative
factors. For FPL, the incentive performance measures were financial indicators
(weighted 50%) and operating indicators (weighted 50%). The financial indicators
were operations and maintenance costs, capital expenditure levels, net income,
regulatory return on equity, and operating cash flow. The operating indicators
were service reliability as measured by the frequency and duration of service
interruptions and service unavailability; system performance as measured by
availability factors for the fossil power plants and an industry index for the
nuclear power plants; employee safety; number of significant environmental
violations; customer satisfaction survey results; load management installed
capability; and conservation programs' annual installed capacity. For the
non-utility and/or new businesses, the performance measures were total combined
net income and return on equity; the completion of the purchase of the
generation assets of Central Maine Power Company; the development of
out-of-territory residential product supply and customer service capabilities;
the development and implementation of energy trading and marketing management
policies and procedures; and the evaluation of international and domestic
acquisitions. The qualitative factors included 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, 1998. As in 1998, the
performance measures for 1995, 1996, and 1997 were based on predefined
financial, operational, and strategic objectives.
Respectfully submitted,
THE COMPENSATION COMMITTEE
<TABLE>
<S> <C>
J. Hyatt Brown, Chairman B. F. Dolan
H. Jesse Arnelle Drew Lewis
Robert M. Beall, II Paul R. Tregurtha
Armando M. Codina
</TABLE>
12
<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, Florida Power & Light
Company ("FPL"), or FPL Energy, Inc. at December 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER RESTRICTED
ANNUAL STOCK LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARD(S)(A) PAYOUTS(B) COMPENSATION(C)
- ------------------------------------ ---- -------- -------- ------------ ----------- ---------- ---------------
James L. Broadhead(a)............... 1998 950,000 1,050,000 10,990 2,004,180 13,456
Chairman, President & CEO of FPL 1997 900,000 877,500 10,439 1,491,638 12,006
Group and Chairman & CEO of FPL 1996 860,000 681,100 11,399 990,206 13,685
1998 592,500 546,900 2,785 704,304 13,746
Paul J. Evanson..................... 1997 564,300 423,200 2,646 306,741 15,233
President of FPL 1996 540,000 340,200 2,925 197,471 15,868
Dennis P. Coyle..................... 1998 400,000 288,000 667 412,413 10,910
General Counsel & 1997 376,200 211,600 3,830 329,810 11,333
Secretary of FPL Group & FPL 1996 360,000 170,100 - 218,965 11,550
Michael W. Yackira.................. 1998 380,000 326,000 3,482 344,693 9,964
President. 1997 320,000 208,000 3,830 236,354 10,761
of FPL Energy, Inc. 1996 300,000 141,800 4,178 572,500 156,927 10,654
C. O. Woody......................... 1998 342,300 205,400 2,785 357,712 12,029
President, 1997 308,000 135,800 5,663 279,837 12,959
Power Generation, of FPL 1996 295,000 142,500 3,882 572,500 184,711 13,448
</TABLE>
- ------------
(a) At December 31, 1998, Mr. Broadhead held 96,800 shares of restricted Common
Stock with a value of $5,965,300. 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. At December 31, 1998, each of
Messrs. Yackira and Woody held 10,000 shares of restricted Common Stock with
a value of $616,250. Mr. Woody's restricted stock will vest in 1999.
Dividends at normal rates are paid on restricted Common Stock.
(b) 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. Broadhead, Evanson and Woody deferred their payouts under
FPL Group's Deferred Compensation Plan.
(c) Represents employer matching contributions of $7,600 to employee thrift
plans for each individual and employer contributions for life insurance as
follows: Mr. Broadhead $5,856, Mr. Evanson $6,146, Mr. Coyle $3,310, Mr.
Yackira $2,364, and Mr. Woody $4,429.
13
<PAGE>
LONG TERM INCENTIVE PLAN AWARDS
In 1998, performance awards and shareholder value awards under FPL Group's Long
Term Incentive Plan were made to the executive officers named in the Summary
Compensation Table as set forth in the following tables.
LONG TERM INCENTIVE PLAN AWARDS
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER
NON-STOCK PRICE-BASED
PLANS
--------------------------
NUMBER OF SHARES
NUMBER PERFORMANCE PERIOD --------------------------
NAME OF SHARES UNTIL PAYOUT THRESHOLD TARGET
- ---------------------------------------------------------------- ----------- ------------------ --------------- ---------
<S> <C> <C> <C> <C>
James L. Broadhead.............................................. 17,166 1/1/98 - 12/31/01 - 17,166
Paul J. Evanson................................................. 6,813 1/1/98 - 12/31/01 - 6,813
Dennis P. Coyle................................................. 3,943 1/1/98 - 12/31/01 - 3,943
Michael W. Yackira.............................................. 3,745 1/1/98 - 12/31/01 - 3,745
C. O. Woody..................................................... 3,374 1/1/98 - 12/31/01 - 3,374
<CAPTION>
NAME MAXIMUM
- ---------------------------------------------------------------- -----------
<S> <C>
James L. Broadhead.............................................. 27,466
Paul J. Evanson................................................. 10,901
Dennis P. Coyle................................................. 6,309
Michael W. Yackira.............................................. 5,992
C. O. Woody..................................................... 5,398
</TABLE>
The performance share awards in the preceding table 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 1998 Annual Incentive Plan
performance indicators is included in the Compensation Committee Report herein.
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER
NON-STOCK PRICE-BASED
PLANS
--------------------------
NUMBER OF SHARES
NUMBER PERFORMANCE PERIOD --------------------------
NAME OF SHARES UNTIL PAYOUT THRESHOLD TARGET
- ---------------------------------------------------------------- ----------- ------------------ --------------- ---------
<S> <C> <C> <C> <C>
James L. Broadhead.............................................. 11,704 1/1/98 - 12/31/00 - 11,704
Paul J. Evanson................................................. 5,840 1/1/98 - 12/31/00 - 5,840
Dennis P. Coyle................................................. 2,957 1/1/98 - 12/31/00 - 2,957
Michael W. Yackira.............................................. 3,121 1/1/98 - 12/31/00 - 3,121
C. O. Woody..................................................... 2,530 1/1/98 - 12/31/00 - 2,530
<CAPTION>
NAME MAXIMUM
- ---------------------------------------------------------------- -----------
<S> <C>
James L. Broadhead.............................................. 18,727
Paul J. Evanson................................................. 9,344
Dennis P. Coyle................................................. 4,731
Michael W. Yackira.............................................. 4,994
C. O. Woody..................................................... 4,048
</TABLE>
The shareholder value awards in the preceding table are payable at the end of
the three-year performance period. The amount of the payout is determined by
multiplying the participant's target number of shares by a factor derived by
dividing the average annual total shareholder return of FPL Group (price
appreciation of FPL Group Common Stock plus dividends) by the total shareholder
return of the Dow Jones Electric Utilities Index companies over the three-year
performance period. The payout may not exceed 160% of targeted awards.
14
<PAGE>
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 1998 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>
$ 300,000 $ 58,905 $ 117,797 $ 146,702 $ 155,244 $ 157,632
400,000 78,905 157,797 196,702 207,744 210,132
500,000 98,905 197,797 246,702 260,244 262,632
600,000 118,905 237,797 296,702 312,744 315,132
700,000 138,905 277,797 346,702 365,244 367,632
800,000 158,905 317,797 396,702 417,744 420,132
900,000 178,905 357,797 446,702 470,244 472,632
1,000,000 198,905 397,797 496,702 522,744 525,132
1,100,000 218,905 437,797 546,702 575,244 577,632
1,200,000 238,905 477,797 596,702 627,744 630,132
1,300,000 258,905 517,797 646,702 680,244 682,632
1,400,000 278,905 557,797 696,702 732,744 735,132
1,500,000 298,905 597,797 746,702 785,244 787,632
1,600,000 318,905 637,797 796,702 837,744 840,132
1,700,000 338,905 677,797 846,702 890,244 892,632
1,800,000 358,905 717,797 896,702 942,744 945,132
1,900,000 378,905 757,797 946,702 995,244 997,632
2,000,000 398,905 797,797 996,702 1,047,744 1,050,132
</TABLE>
The compensation covered by the plans includes annual salaries and bonuses of
certain officers of FPL Group and FPL Energy, 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, 10 years; Mr.
Evanson, 6 years; Mr. Coyle, 9 years; Mr. Yackira, 9 years; and Mr. Woody, 42
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 or his surviving beneficiary equal to
61% to 70% of his average annual compensation for the three years prior to his
retirement between age 62 (1998) and age 65 (2001), 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 2000 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.
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.
15
<PAGE>
EMPLOYMENT AGREEMENTS
The Corporation has an employment agreement with Mr. Broadhead that provides for
automatic one-year extensions after 1998 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.
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 2000
Annual Meeting of Shareholders must be received at FPL Group's principal
executive offices on or before November 29, 1999. After February 12, 2000,
notice to FPL Group of a shareholder proposal submitted for consideration at the
2000 Annual Meeting of Shareholders, which is not submitted for inclusion in FPL
Group's proxy statement and form of proxy, will be considered untimely and the
persons named in the proxies solicited by FPL Group's Board of Directors for the
2000 Annual Meeting of Shareholders may exercise discretionary voting power with
respect to any such proposal. Shareholder proposals may be mailed to Dennis P.
Coyle, Secretary, FPL Group, Inc., Post Office Box 14000, 700 Universe
Boulevard, Juno Beach, Florida 33408-0420.
GENERAL
The expense of soliciting proxies will be borne by FPL Group. Proxies will be
solicited principally by mail, but directors, officers, and regular employees of
FPL Group or its subsidiaries may solicit proxies personally 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.
16
<PAGE>
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 29, 1999
17
<PAGE>
0732-PS-99
<PAGE>
DETACH HERE
PROXY
FPL GROUP, INC.
P.O. Box 9372
Boston, MA 02205
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dennis P. Coyle, Lawrence J. Kelleher,
and Mary Lou Kromer, and each of them, with power of substitution, proxies of
the undersigned, to vote all shares of Common Stock of FPL Group, Inc. that
the undersigned would be entitled to vote at the Annual Meeting of
Shareholders to be held May 10, 1999, 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, 3, and 4.
1. Election of Directors: H. Jesse Arnelle, Sherry S. Barrat, Robert M.
Beall, II, James L. Broadhead, J. Hyatt Brown, Armando M. Codina, Marshall M.
Criser, B.F. Dolan, Willard D. Dover, Alexander W. Dreyfoos, Jr., Paul J.
Evanson, Drew Lewis, Frederic V. Malek, Paul R. Tregurtha, and Roger Young.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
<PAGE>
[LETTERHEAD]
P.O. BOX 14000
JUNO BEACH, FL 33408
March 29, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held at 10:00 a.m. on Monday May 10, 1999, at the PGA National Resort, 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
Please mark
/X/ votes as in
this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2, 3 AND 4.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of 2. Ratification
Directors of Auditors / / / / / /
(see reverse) / / / /
------------------------------ 3. Reapproval of
For all nominees except as Annual Incentive
noted above Plan / / / / / /
4. Reapproval of
part of Long
Term Incentive
Plan / / / / / /
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 _______
