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.
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)
 
- --------------------------------------------------------------------------------
FPL GROUP, INC. - ------------------------------------------------------------ (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: ----------------------------------------------------------------------- (4) Date Filed: ----------------------------------------------------------------------- /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: ---------------------------------------------------------- (4) Date Filed: ----------------------------------------------------------
FPL GROUP FPL GROUP, INC. P.O. BOX 14000 700 UNIVERSE BOULEVARD JUNO BEACH, FLORIDA 33408-0420 - ----------------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------------- NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 10, 199915, 2000 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, 1999,15, 2000, 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, 1999.6, 2000. 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, 199931, 2000 FPL GROUP, INC. ANNUAL MEETING OF SHAREHOLDERS MAY 10, 199915, 2000 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, 1999.15, 2000. 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, 1999,6, 2000, 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, 1999,6, 2000, the Corporation had 180,165,035178,166,335 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, 1999.31, 2000. 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 expressly requires or permits the Board of Directors to require a greater vote, or FPL Group's Articles of Incorporation Bylaws, or Board of DirectorsBylaws 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 ELECTION OF DIRECTORS Listed below are the fifteenthirteen 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. H. JESSE ARNELLE Mr. Arnelle, 65,66, became of counsel to [LOGO] Womble, Carlyle, [LOGO] Sandridge & Rice, a North Carolina-based law firm, in November 1997, after retiring in 1996 as a senior partner from the law firm of Arnelle, Hastie, McGee, Willis & Greene, a law firm whose predecessor he co-founded in 1985. He is a director of Armstrong World Industries, Inc., Eastman Chemical Company, Gannett Corporation, Textron, Inc., 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, 49,50, is president and chief [LOGO] 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, 55,56, is chairman and chief [LOGO] 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.
2 JAMES L. BROADHEAD Mr. Broadhead, 63,64, is chairman and chief [LOGO] 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, 61,62, is chairman, president and [LOGO] chief executive [LOGO] officer of PoeBrown & Brown, Inc., an insurance broker based in Daytona Beach and Tampa.Tampa, Florida. 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, 52,53, is the chairman and chief [LOGO] 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.,Corporation, BellSouth Corporation, CSR America, Inc., Weeks Corp.,The Quaker Oats Company, and Winn-Dixie Stores, Inc. Mr. Codina has been a director of FPL Group since 1994. MARSHALL M. CRISER Mr. Criser, 70,71, became of counsel to [LOGO] 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,Systems, 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.
3 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, 68,69, has been a member of the [LOGO] 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, 67,68, is the owner [LOGO] 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.Florida. He serves as chairman of the Raymond F. Kravis Center for the Performing Arts and a trustee of M.I.T. Corporation. He is a member of the Florida Council of 100 and a founding member and former chairman of the Economic Council of Palm Beach County. Mr. Dreyfoos has been a director of FPL Group since February 1997. PAUL J. EVANSON Mr. Evanson, 57,58, became the president of [LOGO] 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 and Lynch Corporation, and Southern Energy Homes, Inc.
4 Interactive Corporation. DREW LEWIS Mr. Lewis, 67,68, was chairman and chief executive [LOGO] 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.
4 FREDERIC V. MALEK Mr. Malek, 62,63, has been chairman of [LOGO] 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.`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, Inc., HCR-Manor Care, Inc., Northwest Airlines, Inc., Saga Systems, Inc., and various PaineWebber mutual funds. Mr. Malek has been a director of FPL Group since 1987. PAUL R. TREGURTHA Mr. Tregurtha, 63,64, is chairman and chief [LOGO] 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 Boston Financial Group,Corporation, Alliance Resource Management GP, LLC, 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES. 5 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, 1999,2000, and to perform such other services as may be required of them. Representatives of Deloitte & Touche LLP will be present at the 19992000 Annual Meeting and will have an opportunity to make a statement and to respond to appropriate questions raised at the meetingmeeting. 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 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. 75 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, 1998,1999 and is based on an assumed $100 investment on December 31, 1993,1994, 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 4445 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, 1999 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
TOTAL RETURN FOR THEVALUE OF $100 ON DECEMBE 31, FIVE YEARS ENDED DECEMBER 31, 1994 1995 1996 1997 1998 VALUE OF1999 FPL Group $100 ON DECEMBER 31, FPL GROUP DOW JONES ELECTRICS138 143 191 206 149 Dow Jones Electrics $100 132 133 168 192 162 S&P & 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 294138 169 226 290 351
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 eightnine years ended December 31, 1998,1999, and assumes the investment of $100 on December 31, 1990. TOTAL RETURN FOR THE NINE YEARS ENDED DECEMBER 31, 1999 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
TOTAL RETURN FOR THEVALUE OF $100 ON DECEMBE 31, EIGHT YEARS ENDED DECEMBER 31, 1990 1991 1992 1993 1994 1995 1996 1997 1998 VALUE OF1999 FPL Group $100 ON DECEMBER 31, FPL GROUP DOW JONES ELECTRICS137 144 166 158 219 226 302 325 235 Dow Jones Electrics $100 130 138 155 136 178 180 228 260 219 S&P & 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 325 260 454 550
86 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:
NUMBER NAME OF SHARES(A) ------- ------------------------------------------------------------ ------------------- H. Jesse Arnelle................................................................ 8,490(b)Arnelle............................................ 9,550(b)(c)(j)(e) Sherry S. Barrat................................................................ 2,005(b)(j)Barrat............................................ 3,490(b)(e) Robert M. Beall, II............................................................. 7,083(c)(j)II......................................... 7,583(c)(e) James L. Broadhead.............................................................. 203,141(d)Broadhead.......................................... 271,744(b)(d)(e) J. Hyatt Brown.................................................................. 15,045(c)(f)(j)Brown.............................................. 15,545(c)(e)(g) Armando M. Codina............................................................... 9,328(b)Codina........................................... 10,795(b)(c)(j)(e) Dennis P. Coyle................................................................. 30,378(d)Coyle............................................. 69,612(d)(e)(f) Marshall M. Criser.............................................................. 10,346(b)Criser.......................................... 11,286(b)(c)(h)(j)(e)(g) B. F. Dolan..................................................................... 16,746(c)(j)Dolan................................................. 17,677(c)(e) Willard D. Dover................................................................ 7,234(c)(j)Dover............................................ 7,734(c)(e) Alexander W. Dreyfoos, Jr....................................................... 6,985(b)(j)Jr................................... 8,517(b)(e) Paul J. Evanson................................................................. 44,722(b)Evanson............................................. 107,339(b)(d)(e)(f) Drew Lewis...................................................................... 11,475(c)(j)Lewis.................................................. 11,976(c)(e) Frederic V. Malek............................................................... 6,026(c)(j)Malek........................................... 6,526(c)(e) Thomas F. Plunkett.......................................... 59,654(b)(d)(e)(f) Paul R. Tregurtha............................................................... 8,280(b)Tregurtha........................................... 8,782(b)(c)(j) C. O. Woody..................................................................... 26,821(b)(d)(e)(i) Michael W. Yackira.............................................................. 50,130(d)Yackira.......................................... 98,359(d)(e) Roger Young..................................................................... -- (g)(f) All directors and executive officers as a group................................. 550,210(k)group............. 894,633(b)(c)(d)(e)(f)(h) Fidelity Management Trust Company............................................... 17,281,209(l)Company........................... 16,982,700(i) 82 Devonshire Street Boston, Massachusetts 02109
- ------------ (a) Information is as of March 1, 1999,2000, except for holdings under retirement plans, which are as of December 31, 1998.1999. (b) Includes 1,795; 4,241; 992; 1,785; 18535,869; 36,697; 8,842; 2,330; 5,208; 1,432; 2,817; 187; and 2051,190 share units for Messrs. Broadhead, Evanson, Plunkett, Arnelle, Codina, Criser, Dreyfoos, Tregurtha, and Mrs. Barrat, respectively, and 12,863a total of 130,798 share units for all directors and 8,825 shares for Messrs. Evanson and Woody, respectively,officers as a group, 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; 4,4264,427; and 4,495 share units for Messrs. Arnelle, Beall, Brown, Codina, Criser, Dolan, Dover, Lewis, Malek, and Tregurtha, respectively, and a total of 46,734 share units for all directors and officers as a group, 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; 1,22415,625; 3,876; 4,335; 549; and 1,9082,556 share units for Messrs. Broadhead, Coyle, Evanson, WoodyPlunkett, and Yackira, respectively, and a total of 28,967 share units for all directors and officers as a group, credited to a Supplemental Matching Contribution Account under the Supplemental Executive Retirement Plan. (e) Includes 146,800; 20,000; 25,000; 10,00015,000; 18,750; 18,750; and 35,00018,750 shares of restricted stock as to whichheld by Messrs. Broadhead, Coyle, Evanson, WoodyPlunkett, 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 6001,100 shares of restricted stock held by each of Messrs. Arnelle, Beall, Brown, Codina, Criser, Dolan, Dover, Lewis, Malek, and Tregurtha and 8001,300 shares of restricted stock held by each of Mrs. Barrat and Mr. Dreyfoos, and a total of 314,150 shares of restricted stock for all directors and officers as a group, as to which each person has voting power but not investment power. (k)(f) Includes options held by Messrs. Coyle, Evanson, Plunkett, and Yackira to purchase 25,000; 37,500; 25,000; and 37,500 shares, respectively, and options to purchase a total of 162,500 shares for all directors and officers as a group. 7 (g) Includes 350 and 2,300 shares as to which Messrs. Brown and Criser, respectively, disclaim beneficial ownership. (h) Less than 1% of the Common Stock outstanding. (l) 9.6%(i) 9.5% 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. 9 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 1998.1999. DIRECTOR MEETINGS AND COMMITTEES The Board of Directors met seveneight times in 1998.1999. Each director attended at least 75% of the Board meetings and all directors attended at least 75% of the meetings of the committees on which he or she served that were held duringexcept for Mr. Codina, who attended 71% of the timemeetings of the committees on which he or she was a director.served. FPL Group's Audit Committee, comprised of Mrs. Barrat and Messrs. Arnelle, Criser (Chairman), Dolan, Dover, and Dreyfoos met fourfive times in 1998.1999. 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 fourfive times in 1998.1999. 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 fivefour times in 1998.1999. 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 300500 shares of restricted Common Stock. Non-employee committee chairpersons receive an additional annual retainer of $4,000. A fee of $1,300 is paid to non-employee directors for each Board or committee meeting attended. Newly-elected non-employee directors are awarded 200 shares of restricted Common Stock when they join the Board. Effective November 1, 1996, FPL Group's Non-Employee Director Retirement Plan was terminated. Retirement benefits of non-employee directors in office in 1996 and not retiring at or prior to the 1997 annual shareholders' meeting were converted to share units of FPL Group Common Stock. Such directors will be entitled to payment of the then current value of these share units upon ending service as a Board member at or after age 65. 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$3,150 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. 101999. 8 COMPENSATION COMMITTEE REPORT The Compensation Committee submits the following report for 1998:1999: 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, theThe Board of Directors adopted, and in 1994 and 1999 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 thatthe Annual Incentive Plan, the Committee structured the 19981999 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 19992000 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), fiveseven telecommunications companies, and sixeight general industrial companies located in the Southeast. Emerging electricElectric 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 1998,1999, 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 19981999 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 1998,1999, the highest net income goal was met, and the average level of achievement of the other performance 9 measures exceeded the targets. However, the amounts paid out for 19981999 were less than the maximum amounts that could have been paid based on the attainment of the net income goals.goal. 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, over a three-year period for three-year shareholder value awards. 11 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 payoutpayouts (except for cash for the payment of incomes taxes) isare made in shares of Common Stock which the recipient is expected, absent special circumstances, to hold for the duration of his or her employment. No payout was made with respect to shareholder value awards for the three-year period ended December 31, 1999. For 1998,1999, Mr. Broadhead, FPL Group's chief executive officer, was paid $950,000$1,000,000 in base salary, $1,050,000$950,000 in annual incentive compensation, and $2,004,180$1,148,751 (consisting of 35,86928,104 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 19981999 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 return on equity; non-utility net income and return on equity; the completioncorporate and other net income; employee safety; number of the purchase of the generation assets of Central Maine Power Company;significant environmental violations; and 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.a plan to meet five-year growth objectives. 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, 1998.1999. As in 1998,1999, the performance measures for 1995, 1996, 1997, and 19971998 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 Armando M. Codina
1210 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.LLC at December 31, 1998.1999. SUMMARY COMPENSATION TABLE
LONG-TERM ANNUAL COMPENSATION LONG-TERM COMPENSATION -------------------------------------- ---------------------------------------------------------------- ---------------------------------- OTHER RESTRICTED SECURITIES NAME AND PRINCIPAL ANNUAL STOCK UNDERLYING LTIP ALL OTHER POSITION YEAR SALARY BONUS COMPENSATION AWARD(S)(A) OPTIONS (#) PAYOUTS(B) COMPENSATION(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)...............Broadhead.... 1999 $1,000,000 $ 950,000 $19,946 $2,557,800 250,000 $1,148,751 $13,423 Chairman and CEO of 1998 950,000 1,050,000 10,990 2,004,180 13,456 Chairman, President & CEO ofFPL Group and FPL 1997 900,000 877,500 10,439 1,491,638 12,006 Group and Chairman & CEOPaul J. Evanson....... 1999 628,500 616,900 8,656 1,278,900 150,000 458,985 13,539 President 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 Michael W. Yackira.... 1999 408,500 316,200 8,953 1,278,900 150,000 210,792 10,563 President of FPL 1996 540,000 340,200 2,925 197,471 15,8681998 380,000 326,000 3,482 572,500 344,693 9,964 Energy, LLC 1997 320,000 208,000 3,830 236,354 10,761 Dennis P. Coyle.....................Coyle....... 1999 424,000 275,600 8,445 1,023,120 100,000 251,095 10,879 General Counsel and 1998 400,000 288,000 667 412,413 10,910 General Counsel &Secretary of FPL 1997 376,200 211,600 3,830 329,810 11,333 SecretaryGroup and FPL Thomas F. Plunkett.... 1999 340,000 219,100 10,088 255,780 100,000 179,564 10,146 President, Nuclear 1998 302,500 177,900 3,482 103,481 10,344 Division of FPL Group & FPL 1996 360,000 170,100 - 218,965 11,550 Michael W. Yackira.................. 1998 380,000 326,0001997 275,000 123,200 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 13,44882,128 11,899
- ------------ (a) At December 31, 1998,1999, Mr. Broadhead held 96,800146,800 shares of restricted Common Stock with a value of $5,965,300. These$6,284,875. Of these, 96,800 shares were awarded in 1991 for the purpose of financing Mr. Broadhead's supplemental retirement plan and will offset lump sumlump-sum benefits that would otherwise be payable to him in cash upon retirement. See "Retirement Plans" herein. The remaining 50,000 shares will vest in 2001. At December 31, 1998, each of Messrs. Yackira and Woody1999, Mr. Evanson held 10,00025,000 shares of restricted Common Stock with a value of $616,250.$1,070,313 that vest as to 6,250 shares in each of years 2000, 2001, 2002, and 2003; Mr. Woody'sYackira held 35,000 shares of restricted stock willCommon Stock with a value of $1,498,438, 25,000 shares of which vest as to 6,250 shares in 1999.each of years 2000, 2001, 2002, and 2003; Mr. Coyle held 20,000 shares of restricted Common Stock with a value of $856,250 that vest as to 5,000 shares in each of years 2000, 2001, 2002, and 2003; Mr. Plunkett held 20,000 shares of restricted Common Stock with a value of $856,250, 5,000 shares of which vest as to 1,250 shares in each of years 2000, 2001, 2002, and 2003. Dividends at normal rates are paid on restricted Common Stock. (b) Payouts were made either entirely in cash (for payment of income taxes) and shares of Common Stock, valued at the closing price on the last business day preceding payout.payout, or in a combination of cash (for payment of income taxes) and shares of Common Stock. Messrs. Broadhead, Evanson and WoodyPlunkett deferred their payouts under FPL Group's Deferred Compensation Plan. (c) RepresentsFor 1999, 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,$5,823, Mr. Evanson $6,146,$5,939, Mr. Yackira $2,963, Mr. Coyle $3,310, Mr. Yackira $2,364,$3,279, and Mr. Woody $4,429. 13Plunkett $2,546. 11 LONG TERM INCENTIVE PLAN AWARDS In 1998,1999, performance awards, and shareholder value awards, and stock option awards under FPL Group's Long Term Incentive Plan were made to the executive officers named in the Summary Compensation Table as set forth in the following tables. LONG TERM INCENTIVE PLANPERFORMANCE SHARE AWARDS
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK PRICE-BASED PLANS -------------------------- NUMBER OF SHARES NUMBER PERFORMANCE PERIOD --------------------------------------------------------- NAME OF SHARES UNTIL PAYOUT THRESHOLD TARGET (#) MAXIMUM (#) - -------------------------------------------------------------------- --------- ------------------ ----------- ------------------ --------------- ----------------------- James L. Broadhead.............................................. 17,166Broadhead............................... 19,687 1/1/9899 - 12/31/01 - 17,16602 19,687 31,499 Paul J. Evanson................................................. 6,813Evanson.................................. 7,874 1/1/9899 - 12/31/0102 7,874 12,598 Michael W. Yackira............................... 4,387 1/1/99 - 6,81312/31/02 4,387 7,019 Dennis P. Coyle................................................. 3,943Coyle.................................. 4,553 1/1/9899 - 12/31/01 - 3,943 Michael W. Yackira.............................................. 3,74502 4,553 7,285 Thomas F. Plunkett............................... 3,651 1/1/9899 - 12/31/01 - 3,745 C. O. Woody..................................................... 3,374 1/1/98 - 12/31/01 - 3,374 NAME MAXIMUM - ---------------------------------------------------------------- ----------- James L. Broadhead.............................................. 27,466 Paul J. Evanson................................................. 10,901 Dennis P. Coyle................................................. 6,309 Michael W. Yackira.............................................. 5,992 C. O. Woody..................................................... 5,39802 3,651 5,842
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 19981999 Annual Incentive Plan performance indicators is included in the Compensation Committee Report herein. SHAREHOLDER VALUE AWARDS
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK PRICE-BASED PLANS -------------------------- NUMBER OF SHARES NUMBER PERFORMANCE PERIOD -------------------------------------------------------- NAME OF SHARES UNTIL PAYOUT THRESHOLD TARGET (#) MAXIMUM (#) - ---------------------------------------------------------------- --------------- --------- ------------------ --------------- ------------------- ------------- James L. Broadhead.............................................. 11,704Broadhead............................... 13,423 1/1/9899 - 12/31/00 - 11,70401 13,423 21,477 Paul J. Evanson................................................. 5,840Evanson.................................. 6,749 1/1/9899 - 12/31/0001 6,749 10,798 Michael W. Yackira............................... 3,655 1/1/99 - 5,84012/31/01 3,655 5,848 Dennis P. Coyle................................................. 2,957Coyle.................................. 3,415 1/1/9899 - 12/31/00 - 2,957 Michael W. Yackira.............................................. 3,12101 3,415 5,464 Thomas F. Plunkett............................... 2,738 1/1/9899 - 12/31/00 - 3,121 C. O. Woody..................................................... 2,530 1/1/98 - 12/31/00 - 2,530 NAME MAXIMUM - ---------------------------------------------------------------- ----------- James L. Broadhead.............................................. 18,727 Paul J. Evanson................................................. 9,344 Dennis P. Coyle................................................. 4,731 Michael W. Yackira.............................................. 4,994 C. O. Woody..................................................... 4,04801 2,738 4,381
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 dividingcomparing the average annual total shareholder return of FPL Group (price appreciation of FPL Group Common Stock plus dividends) byto 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. 1412 OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS ---------------------------------------------------------------------------------- NUMBER OF PERCENT OF TOTAL SECURITIES OPTIONS GRANTED TO EXERCISE OR GRANT DATE UNDERLYING OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE NAME GRANTED (#) (A) FISCAL YEAR ($/SHARE) DATE ($) (B) - ---- ------------------ ------------------ ----------- ---------- ------------- James L. Broadhead....................... 250,000 19.2% 51.156 2/15/06 2,247,027 Paul J. Evanson.......................... 150,000 11.5% 51.156 2/15/09 1,515,497 Michael W. Yackira....................... 150,000 11.5% 51.156 2/15/09 1,515,497 Dennis P. Coyle.......................... 100,000 7.7% 51.156 2/15/09 1,010,331 Thomas F. Plunkett....................... 100,000 7.7% 51.156 2/15/09 1,010,331
- ------------ (a) Options granted are non-qualified stock options. Mr. Broadhead's options will be exercisable on November 28, 2001. All other stock options will become exercisable 25% per year and be fully exercisable after four years. All options were granted at an exercise price per share of 100% of the fair market value of FPL Group Common Stock on the date of grant. (b) The values shown reflect standard application of the Black-Scholes pricing model. Volatility is equal to 18.08% and yield is equal to 3.81%. The interest rate is equal to the U.S. Treasury Strip Rate on the date of grant with a term equal to that of the option (5.19% for the 7-year options expiring 2/15/06 and 5.40% for the 10-year options expiring 2/15/09). The values do not take into account risk factors such as non-transferability or risk of forfeiture. The preceding table sets forth information concerning individual grants of common stock options during fiscal year 1999 to the executive officers named in the Summary Compensation Table. Such awards are also listed in the Summary Compensation Table of this Proxy Statement in the column entitled "Securities Underlying Options." AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED SHARES OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT ACQUIRED ON YEAR-END (#) FISCAL YEAR-END ($) EXERCISE VALUE --------------------------- --------------------------- NAME (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ---- ----------- ------------ ----------- ------------- ----------- ------------- James L Broadhead....................... 0 0 0 250,000 0 0 Paul J. Evanson......................... 0 0 0 150,000 0 0 Michael W. Yackira...................... 0 0 0 150,000 0 0 Dennis P. Coyle......................... 0 0 0 100,000 0 0 Thomas F. Plunkett...................... 0 0 0 100,000 0 0
The preceding table sets forth information, with respect to the named officers, concerning the exercise of stock options during the fiscal year and unexercised options held at the end of the fiscal year. The named officers did not exercise any stock options during 1999 and held no exercisable options at the end of the year. All of the unexercisable options shown in the preceding table were granted in 1999. At December 31, 1999, the fair market value of the underlying securities (based on the closing share price of FPL Group Common Stock reported on the NYSE of $42.8125 per share) did not exceed the exercise or base price of the options, therefore the options were not in-the-money at fiscal year-end. 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 19981999 at age 65 after the indicated years of service. 13 PENSION PLAN TABLE
YEARS OF SERVICE ELIGIBLE AVERAGE ------------------------------------------------------------------------------------------------------------------- ANNUAL COMPENSATION 10 20 30 40 50 - ------------------------- --------- --------- --------- --------- ---------------------------- ---------- ---------- ---------- ---------- ---------- $ 300,000 $ 58,90558,809 $ 117,797117,606 $ 146,702146,414 $ 155,244154,909 $ 157,632157,297 400,000 78,905 157,797 196,702 207,744 210,13278,809 157,606 196,414 207,409 209,797 500,000 98,905 197,797 246,702 260,244 262,63298,809 197,606 246,414 259,909 262,297 600,000 118,905 237,797 296,702 312,744 315,132118,809 237,606 296,414 312,409 314,797 700,000 138,905 277,797 346,702 365,244 367,632138,809 277,606 346,414 364,909 367,297 800,000 158,905 317,797 396,702 417,744 420,132158,809 317,606 396,414 417,409 419,797 900,000 178,905 357,797 446,702 470,244 472,632178,809 357,606 446,414 469,909 472,297 1,000,000 198,905 397,797 496,702 522,744 525,132198,809 397,606 496,414 522,409 524,797 1,100,000 218,905 437,797 546,702 575,244 577,632218,809 437,606 546,414 574,909 577,297 1,200,000 238,905 477,797 596,702 627,744 630,132238,809 477,606 596,414 627,409 629,797 1,300,000 258,905 517,797 646,702 680,244 682,632258,809 517,606 646,414 679,909 682,297 1,400,000 278,905 557,797 696,702 732,744 735,132278,809 557,606 696,414 732,409 734,797 1,500,000 298,905 597,797 746,702 785,244 787,632298,809 597,606 746,414 784,909 787,297 1,600,000 318,905 637,797 796,702 837,744 840,132318,809 637,606 796,414 837,409 839,797 1,700,000 338,905 677,797 846,702 890,244 892,632338,809 677,606 846,414 889,909 892,297 1,800,000 358,905 717,797 896,702 942,744 945,132358,809 717,606 896,414 942,409 944,797 1,900,000 378,905 757,797 946,702 995,244 997,632378,809 757,606 946,414 994,909 997,297 2,000,000 398,905 797,797 996,702 1,047,744 1,050,132398,809 797,606 996,414 1,047,409 1,049,797 2,100,000 418,809 837,606 1,046,414 1,099,909 1,102,297 2,200,000 438,809 877,606 1,096,414 1,152,409 1,154,797 2,300,000 458,809 917,606 1,146,414 1,204,909 1,207,297 2,400,000 478,809 957,605 1,196,414 1,257,409 1,259,797
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, 11 years; Mr. Evanson, 7 years; Mr. Yackira, 10 years; Mr. Evanson, 6 years; Mr. Coyle, 9 years; Mr. Yackira, 910 years; and Mr. Woody, 42Plunkett, 9 years. Amounts shown in the table reflect deductions to partially cover employer contributions to Social Security.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 (2000) 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. A supplemental retirement plan for Mr. Plunkett provides for benefits, upon retirement at age 62 or more, based on two times his credited years of service up to age 65 and one times his credited years of service thereafter. In 1998, the vesting schedule attached to 10,000 shares of restricted Common Stock held by C.O. Woody, then President of the Power Generation Division of FPL, was amended to coincide with Mr. Woody's planned retirement in June 1999. As a consequence of the amended vesting schedule, Mr. Woody was indebted to FPL for a period of less than two weeks in June 1999 for $147,133 in taxes owed upon vesting of the shares. 14 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 yearone-year term rate for his or her life insurance coverage. 15 EMPLOYMENT AGREEMENTS The Corporation has an employment agreement with Mr. Broadhead that provides for automatic one-year extensions after 19982000 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 sumlump-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 inof control occurs. The agreements also provide that the maximum amount payable under all long-term incentive compensation grants outstanding on the date a change of control occurs is payable in cash; all stock options are vested and exercisable; and all restrictions on restricted stock lapse. 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 sumlump-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 averagehighest bonus for the twothree 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 20002001 Annual Meeting of Shareholders must be received at FPL Group's principal executive offices on or before November 29, 1999.December 1, 2000. After February 12, 2000,14, 2001, notice to FPL Group of a shareholder proposal submitted for consideration at the 20002001 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 20002001 Annual Meeting of Shareholders may exercise discretionary voting power with respect to any such proposal. 15 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 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 29,31, 2000 16 0732-PS-00 FPL GROUP, INC. PRESORTED Human Resources Corporate/JB STANDARD P.O. Box 14000 Juno Beach, FL 33408 RATE U.S. POSTAGE PAID PROXY TABULATOR CONFIDENTIAL: IMPORTANT PROXY MATERIALS ENCLOSED FOR FASTER, MORE CONVENIENT VOTING INSTRUCTIONS USE THE INTERNET OR TELEPHONE VOTING INSTRUCTIONS BY PHONE: Call toll-free 1-888-221-0697 INTERNET VOTING INSTRUCTIONS: www.401kproxy.com Please fold and detach card at perforation before mailing PLEASE SEE REVERSE SIDE FOR IMPORTANT INFORMATION FPL GROUP, INC. FIDELITY MANAGEMENT TRUST COMPANY TRUSTEE FOR THE FPL GROUP THRIFT PLANS This card, when properly executed and returned, will instruct Fidelity Management Trust Company, the Trustee of the FPL Group Thrift Plans, to vote the number of shares representing your proportionate interests in the FPL Group Stock Fund and the Leveraged ESOP Stock Fund in the FPL Group Thrift Plans ("your shares") in the manner you indicated on the reverse side at the Annual Meeting of Shareholders of FPL Group, Inc. which will be held on May 15, 2000, and any adjournment or postponement thereof. Your instructions will determine the vote on a proportionate number of unallocated shares. If you sign and return this card, but do not indicate your vote, if you do not sign the card, or if your card is not received by May 9, 2000, the Trustee will not vote your shares. However, the Trustee will vote your proportionate number of unallocated shares in the same manner as it votes Leveraged ESOP shares for which instructions were received. Date _________, 2000 Please date and sign your name as it appears on this card. ______________________________ ______________________________ (Signature) (See Reverse Side) 913 March 31, 2000 FPL GROUP, INC. P.O. Box 14000 Juno Beach, FL 33408 To Thrift Plan Participant: The 2000 FPL Group, Inc. Annual Meeting of Shareholders will be held on Monday, May 15, 2000 in Palm Beach Gardens, Florida, at the PGA National Resort, 400 Avenue of the Champions, at 10:00 A.M. The FPL Group, Inc. Proxy Statement and the 1999 17 0732-PS-99Annual Report are enclosed for your review. As a participant in the FPL Group Employee Thrift Plans, you are a shareholder of FPL Group, Inc. You may direct Fidelity Management Trust Company, the Thrift Plans Trustee, on how you wish to vote your proportionate interest in the shares of FPL Group, Inc. common stock held in the Thrift Plans Trust. You may send your instructions to the Trustee over the telephone, on the internet, or by mail. To send your voting instructions by telephone, simply dial 1-888-221-0697 from a touch tone phone. To send instructions over the internet, visit the website at www.401kproxy.com. If you do not wish to instruct the Trustee on the voting of your shares by phone or by internet, you should detatch, complete, and return the instruction card at the bottom of this letter to the Trustee in the enclosed envelope. The FPL Group, Inc. common stock held in the Thrift Plans Trust has been divided into two funds - the FPL Group Stock Fund and the FPL Group Leveraged ESOP Fund. Your voting instructions will tell the Trustee how to vote the number of shares reflecting your proportionate interest in each of these two funds. Your voting instructions will also determine the vote on a proportionate number of the Leveraged ESOP shares which are held in the Thrift Plan, but not yet allocated to participants. (For more information about the Leveraged ESOP feature of the Thrift Plan refer to your Employee Handbook.) If you do not give the Trustee your voting instructions, your shares will not be voted. However, your proportionate share of the unallocated Leveraged ESOP shares will be voted by the Trustee in the same manner as it votes Leveraged ESOP shares for which instructions are received. You must provide Instructions to the Trustee by May 9, 2000. You may issue instructions by telehone or internet until 12:00 Midnight on that day. If you are sending instructions by mail, the Trustee must receive your executed instruction card by May 9, 2000. The FPL Group Board of Directors recommends a vote "FOR" items 1 and 2. Please review the information provided carefully and take the time to instruct the Trustee as to the voting of your shares. Remember, your vote is very important. (SEE REVERSE SIDE FOR TELEPHONE OR INTERNET VOTING INSTRUCTIONS.) Please fold and detach card at perforation before mailing VOTING INSTRUCTION CARD Please vote by filling in the boxes below. 1. Election of Directors: 01) H. Jesse Arnelle, FOR WITHHELD 02) Sherry S. Barrat, / / / / 03) Robert M. Beall, II, 04) James L. Broadhead, 05) J. Hyatt Brown, 06) Armando M. Codina, 07) Marshall M. Criser, 08) Willard D. Dover, 09)Alexander W. Dreyfoos Jr., 10) Paul J.Evanson, 11) Drew Lewis, 12) Frederic V. Malek, and 13) Paul R. Tregurtha. ______________________________________ For all nominees except as noted above 2. Ratification of Auditors FOR AGAINST ABSTAIN / / / / / / 3. Such other business as may properly come before the meeting (SIGN ON REVERSE SIDE) 913 DETACH HERE PROXY FPL GROUP, INC. P.O. Box 9372 Boston,9381 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, 1999,15, 2000, 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 4.2. 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 and Paul R. Tregurtha, and Roger Young.Tregurtha. ________________ ________________ SEE REVERSE SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE SIDE SIDE________________ ________________ [LETTERHEAD]FPL Group, Inc. P.O. BOX 14000 JUNO BEACH, FL 33408 March 29, 199931, 2000 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, 1999,15, 2000, 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 FPL36A DETACH HERE /X/ 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 _______
1. Election of FOR WITHHELD 2. Ratification of FOR AGAINST ABSTAIN Directors / / / / Auditors / / / / / / (see reverse) 3. Such other business as may properly come before the meeting For all nominees except as noted above MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / / MARK HERE IF YOU PLAN TO ATTEND 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:__________________ \