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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/ / 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
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Schedule and the date of its filing.
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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
MAY 14, 2001
The Annual Meeting of Shareholders of FPL Group, Inc. will be held at the PGA
National Resort, 400 Avenue of the Champions, Palm Beach Gardens, Florida, at
10:00 a.m. on Monday, May 14, 2001, to consider and act upon:
-Election of directors.
-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 5, 2001.
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 or following the telephonic or Internet instructions.
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 or 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. ALTERNATIVELY, YOU MAY CAST YOUR VOTE BY TELEPHONE OR ELECTRONICALLY BY
FOLLOWING THE INSTRUCTIONS ON YOUR PROXY CARD. IF YOU ATTEND, YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON.
By order of the Board of Directors.
/s/ Dennis P. Coyle
DENNIS P. COYLE
General Counsel and Secretary
Juno Beach, Florida
April 13, 2001
FPL GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 14, 2001
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 14, 2001. The enclosed
proxy is solicited by your Board of Directors, who urge you to respond in the
belief that 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.
Alternatively, you may cast your vote by telephone or electronically by
following the instructions on your proxy card. Please note that there are
separate arrangements for using electronic voting depending on whether your
shares are registered in your name or in the name of a brokerage firm or bank.
You should check the proxy card or voting instructions forwarded by your broker,
bank or other holder of record to see which options are available. If voting by
telephone you should dial the toll-free number indicated on the proxy card; you
will then be prompted to enter the control number printed on your proxy card and
to follow subsequent instructions. 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. You may also change your vote by
telephone or electronically. You may change your vote by using any one of these
methods regardless of the procedure used to cast your previous vote. 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. Unless otherwise directed, such shares will
be voted:
-For the election as directors of the nominees named in this proxy
statement.
-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 5, 2001, 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 5, 2001, the Corporation had 175,838,735 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
April 13, 2001.
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 or
Bylaws require a greater or different vote). Therefore,
1
as to any matter voted on by shareholders at the Annual Meeting, including the
election of directors, the affirmative vote of a majority of the total number of
shares represented at the meeting and entitled to vote is required, abstentions
have the same effect as a vote against a matter, and broker non-votes have no
legal effect.
BUSINESS OF THE MEETING
PROPOSAL 1: ELECTION OF DIRECTORS
Listed below are the eleven 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 in your
proxy, it will be voted for the election of the listed nominees.
H. JESSE ARNELLE Mr. Arnelle, 67, became of counsel to
[LOGO] Womble, Carlyle, 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., 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, 51, is chairman and chief
[LOGO] executive officer of Northern Trust Bank of California, N.A.
Prior to being elected to that office in January 1999, she
was president of Northern Trust Bank of Palm Beach and
Martin Counties, Florida. She serves on the boards of The
Employers Group, the Los Angeles Area Chamber of Commerce,
The Los Angeles World Affairs Council, The Anderson School
of UCLA Board of Visitors, the Los Angeles Sports and
Entertainment Commission and Town Hall. Mrs. Barrat became a
director of FPL Group in February 1998.
ROBERT M. BEALL, II Mr. Beall, 57, is chairman and chief
[LOGO] executive officer of Beall's, Inc., the parent company of
Beall's Department Stores, Inc., and Beall's Outlet Stores,
Inc., which operate retail stores located from Florida to
California. 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.
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JAMES L. BROADHEAD Mr. Broadhead, 65, is chairman and chief
[LOGO] executive officer of FPL Group and its 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 emeritus of Cornell University. Mr.
Broadhead has been a director of FPL Group since 1989.
J. HYATT BROWN Mr. Brown, 63, is chairman, president and
[LOGO] chief executive officer of Brown & Brown, Inc., an insurance
broker based in Daytona Beach and Tampa, Florida. He is a
director of SunTrust Banks, Inc., BellSouth Corporation,
Rock-Tenn Company, SCPIE Holdings, 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, 54, is the chairman and chief
[LOGO] executive officer of Codina Group, Inc., a real estate
development company based in Coral Gables, Florida. He has
served in that capacity with Codina Group, Inc. and its
predecessors since 1979. He is a director of AMR
Corporation, BellSouth Corporation, CSR America, Inc., The
Quaker Oats Company, and Winn-Dixie Stores, Inc. Mr. Codina
has been a director of FPL Group since 1994.
WILLARD D. DOVER Mr. Dover, 70, has been a member of the
[LOGO] Fort Lauderdale law 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 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.
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ALEXANDER W. DREYFOOS, JR. Mr. Dreyfoos, 69, is the owner
[LOGO] and chief executive 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. 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, 59, became the president of
[LOGO] Florida Power & Light 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 Interactive
Corporation.
FREDERIC V. MALEK Mr. Malek, 64, has been chairman of
[LOGO] Thayer Capital Partners, a merchant bank, since 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,
Inc., 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, 65, is chairman and chief
[LOGO] executive officer of Mormac Marine Group, Inc., a maritime
shipping company, and 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. Mr.
Tregurtha is a director of Teachers Insurance and Annuity
Association, Fleet Boston Financial Corporation, and
Alliance Resource Management GP, LLC. Mr. Tregurtha has been
a director of FPL Group since 1989.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES.
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INFORMATION ABOUT THE CORPORATION AND MANAGEMENT
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), the Standard & Poor's Electric Companies Index (S&P
Electrics) and the Dow Jones Electric Utilities Index (Dow Jones Electrics). The
comparison covers the five years ended December 31, 2000, and is based on an
assumed $100 investment on December 31, 1995, in each of the S&P 500, the S&P
Electrics, the Dow Jones Electrics, and FPL Group Common Stock. The S&P
Electrics is based on the performance of 26 electric utilities; the Dow Jones
Electrics is based on the performance of 62 electric and electric/gas
combination utilities. The S&P Electrics was selected for comparison purposes
this year because it reflects, more closely than the Dow Jones Electrics,
companies engaged in businesses similar to FPL Group's businesses. FPL Group is
included in all three indexes.
TOTAL RETURN FOR THE
FIVE YEARS ENDED DECEMBER 31, 2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Value of $100 on Decembe 31,
1995 1996 1997 1998 1999 2000
FPL Group $100 103 138 149 107 188
Dow Jones Electrics $100 102 132 151 129 204
S & P 500 $100 123 164 211 255 232
S & P Electrics $100 100 126 146 117 180
5
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, established FPL Energy, LLC, 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 ten
years ended December 31, 2000, and assumes the investment of $100 on
December 31, 1990 (December 31, 1991, as to the Dow Jones Electrics). The Dow
Jones Electrics was changed May 31, 2000, and data is not available prior to
December 31, 1991.
TOTAL RETURN FOR THE
TEN YEARS ENDED DECEMBER 31, 2000
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Value of $100 on December 31,
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
FPL Group, Inc. 100 137 144 166 158 219 226 302 325 235 411
Dow Jones Electrics 100 107 120 105 137 140 181 208 177 281
S & P 500 100 130 140 155 157 215 265 353 454 550 500
S & P Electrics 100 130 138 155 135 177 177 223 257 208 318
6
COMMON STOCK OWNERSHIP OF MANAGEMENT AND OTHERS
The following table indicates how much FPL Group Common Stock is beneficially
owned by (a) each person known by FPL Group to own 5% or more of the Common
Stock, (b) each of FPL Group's directors and executive officers, and (c) the
directors and executive officers as a group.
NUMBER
OF SHARES(A)
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PRINCIPAL SHAREHOLDERS:
Fidelity Management Trust Company............................................... 16,010,802(b)
82 Devonshire Street
Boston, Massachusetts 02109
Wellington Management Company, LLP.............................................. 9,152,871(c)
75 State Street
Boston, Massachusetts 02109
DIRECTORS AND EXECUTIVE OFFICERS:
H. Jesse Arnelle................................................................ 2,819(d)
Sherry S. Barrat................................................................ 2,800(d)
Robert M. Beall, II............................................................. 5,120(d)
James L. Broadhead.............................................................. 141,789(d)
J. Hyatt Brown.................................................................. 11,950(d)(e)
Armando M. Codina............................................................... 3,600(d)
Dennis P. Coyle................................................................. 41,439(d)(e)
Marshall M. Criser.............................................................. 4,200(d)(e)
Willard D. Dover................................................................ 2,500(d)
Alexander W. Dreyfoos, Jr....................................................... 6,200(d)
Paul J. Evanson................................................................. 65,771(d)
Lewis Hay III................................................................... 25,775(d)
Frederic V. Malek............................................................... 2,600(d)
Thomas F. Plunkett.............................................................. 33,820(d)
Paul R. Tregurtha............................................................... 4,600(d)
All directors and executive officers as a group................................. 456,305(d)(e)(f)
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(a) Information is as of March 1, 2001, except as indicated. Unless otherwise
indicated, each person has sole voting and sole investment power.
(b) 9.1% of the Common Stock outstanding; shares held at December 31, 2000 as
Trustee under the Florida Power & Light Company Master Thrift Plan Trust.
The Trustee disclaims beneficial ownership of such securities. Shares are
voted by the Trustee in accordance with instructions of the participants to
whose accounts such shares are allocated, and a proportionate number of
shares which are held in the plans but not yet allocated to participants are
voted in accordance with such instructions. Leveraged ESOP shares held in
the plans which have been allocated to participants' accounts, but for which
voting instructions are not received, are voted by the Trustee in the same
proportions as those shares which have been voted by participants.
(c) Represents 5.2% of the Common Stock outstanding. This information has been
derived from Schedule 13G of Wellington Management Company, LLP ("WMC"),
filed with the Securities and Exchange Commission on February 13, 2001. All
shares are owned of record by clients of WMC, which reported shared voting
power over 4,645,104 shares and shared dispositive power over 9,142,771
shares.
(d) Includes 50,000; 15,000; 18,750; 22,500; and 18,750 shares of restricted
stock held by Messrs. Broadhead, Coyle, Evanson, Hay, and Plunkett,
respectively; 1,600 shares of restricted stock held by each of
Messrs. Arnelle, Beall, Brown, Codina, Criser, Dover, Malek, and Tregurtha;
1,800 shares of restricted stock held by each of Mrs. Barrat and
Mr. Dreyfoos; and a total of 182,400 shares of restricted stock held by all
directors and officers as a group, as to which each person has voting power,
but not investment power.
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(e) Includes 350 shares owned by children of Mr. Brown who are over 21 years of
age, as to which Mr. Brown disclaims beneficial ownership; 25 shares owned
by Mr. Coyle's wife, as to which Mr. Coyle disclaims beneficial ownership;
and 2,300 shares owned by a trust and Mr. Criser's wife, as to which
Mr. Criser disclaims beneficial ownership.
(f) Less than 1% of the Common Stock outstanding.
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 2000 except one transaction involving a gift
transfer by Mr. Broadhead to a trust for the benefit of members of
Mr. Broadhead's family which was inadvertently not reported on Form 5 on a
timely basis for fiscal year 1999 due to an oversight by counsel to the
Corporation.
DIRECTOR MEETINGS AND COMMITTEES
The Board of Directors met fourteen times in 2000. Each director attended at
least 75% of the total number of Board meetings and meetings of the committees
on which he or she served.
FPL Group's Audit Committee, comprised of Mrs. Barrat and Messrs. Arnelle,
Criser (Chairman), Dover, and Dreyfoos met eight times in 2000. During the year
the Audit Committee developed an updated charter for the Committee, which was
approved by the Board May 15, 2000. The complete text of the new charter, which
reflects standards set forth in new Securities and Exchange Commission
regulations and New York Stock Exchange rules, is reproduced in the appendix to
this proxy statement. As set forth in more detail in the charter, the Audit
Committee assists the Board in monitoring the financial reporting process, the
internal control structure and the independence and performance of the internal
audit department and the independent public accountants. During the year, the
Board examined the composition of the Audit Committee in light of the adoption
by the New York Stock Exchange of new rules governing audit committees. Based
upon this examination, the Board confirmed that all members of the Audit
Committee are "independent" within the meaning of the Exchange's new rules.
The Compensation Committee, comprised of Messrs. Arnelle, Beall, Brown
(Chairman), Codina, and Tregurtha, met three times in 2000. 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,
Codina, Criser, Malek, and Tregurtha, met four times in 2000. 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 500 shares of restricted Common Stock.
Non-employee committee chairpersons receive an additional annual retainer of
$4,000. A fee of $1,300 is
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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. Upon his retirement from the Board
in May 2000, B. F. Dolan received $351,000 for the value of his share units.
Upon his retirement from the Board in November 2000, Drew Lewis received
$395,000 for the value of his share units.
Non-employee directors are covered by travel and accident insurance while on FPL
Group business. Total premiums attributable to such directors amounted to $3,150
for 2000.
AUDIT COMMITTEE REPORT
The Audit Committee submits the following report for 2000:
In accordance with its written charter adopted by the Board of Directors
(Board), the Audit Committee of the Board (Committee) assists the Board in
fulfilling its responsibility for oversight of the quality and integrity of the
accounting, auditing and financial reporting practices of the Corporation.
During 2000, the Committee met eight times, including four meetings where the
Committee discussed the interim financial information contained in each
quarterly earnings announcement with the controller and independent auditors
prior to public release.
In discharging its oversight responsibility as to the audit process, the Audit
Committee obtained from the independent auditors a formal written statement
describing all relationships between the auditors and the Corporation that might
bear on the auditors' independence consistent with Independence Standards Board
Standard No. 1, "Independence Discussions with Audit Committees," discussed with
the auditors any relationships that may impact their objectivity and
independence and satisfied itself as to the auditors' independence. The
Committee also discussed with management, the internal auditors and the
independent auditors the quality and adequacy of the Corporation's internal
controls and the internal audit function's organization, responsibilities,
resources and staffing. The Committee reviewed with both the independent and the
internal auditors their audit plans, audit scope, and identification of audit
risks.
The Committee discussed and reviewed with the independent auditors all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements. The Committee also discussed the results of the
internal audit examinations.
The Committee reviewed the audited financial statements of the Corporation for
the year ended December 31, 2000, with management and the independent auditors.
Management has the responsibility for the preparation of the Corporation's
financial statements, and the independent auditors have the responsibility for
the examination of those statements.
Based on the above-mentioned review and discussions with management and the
independent auditors, the Committee recommended to the Board that the
Corporation's audited financial statements be included in its Annual Report on
Form 10-K for the year ended December 31, 2000, for filing with the Securities
and Exchange Commission.
Respectfully submitted,
Marshall M. Criser, Chairman
H. Jesse Arnelle
Sherry S. Barrat
Willard D. Dover
Alexander W. Dreyfoos, Jr.
9
APPOINTMENT OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board has appointed
Deloitte & Touche LLP, independent public accountants, to audit the accounts of
FPL Group and its subsidiaries for the fiscal year ending December 31, 2001, and
to perform such other services as may be required of them.
Representatives of Deloitte & Touche LLP will be present at the 2001 Annual
Meeting and will have an opportunity to make a statement and to respond to
appropriate questions raised at the meeting.
Audit Fees
The aggregate fees billed by Deloitte & Touche LLP for professional services
rendered for the audit of FPL Group's annual financial statements for the fiscal
year ended December 31, 2000, and for the reviews of the financial statements
included in the Corporation's Quarterly Reports on Form 10-Q for that fiscal
year were $900,000.
Financial Information Systems Design and Implementation Fees
The aggregate fees billed by Deloitte & Touche LLP for professional services
rendered for information technology services relating to financial information
systems design and implementation for the fiscal year ended December 31, 2000,
were $4,500,000.
All Other Fees
The aggregate fees billed by Deloitte & Touche LLP for services rendered to the
Corporation, other than the services described above under "Audit Fees" and
"Financial Information Systems Design and Implementation Fees", for the fiscal
year ended December 31, 2000, were $1,950,000.
The Audit Committee has considered whether the provision of the non-audit
services is compatible with maintaining Deloitte & Touche LLP's independence.
COMPENSATION COMMITTEE REPORT
The Compensation Committee submits the following report for 2000:
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.
The Board of Directors adopted, and in 1994 and 1999 shareholders approved, an
Annual Incentive Plan and a Long Term Incentive Plan that are intended to
prevent the loss of the federal income tax deductions available to the
Corporation for the amount of any compensation paid thereunder to the chief
executive officer and the four other most highly-compensated officers. In
accordance with these plans, the Committee structured the 2000 executive
compensation program to qualify for deduction all compensation paid thereunder
to these officers, and it intends to do likewise with the executive compensation
programs for 2001 and future years as long as doing so is compatible with what
the Committee considers to be a sound compensation program. However, some of the
payments to these officers under the Long Term Incentive Plan that resulted from
the change of control of the Corporation that occurred as a result of the
approval by the Corporation's shareholders of a proposed merger with Entergy
Corporation may not be deductible by the Corporation for federal income tax
purposes. The actual amount that may not be deductible is not determinable at
this time.
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 of which are included in the Dow Jones Electric Utilities Index
and eight of which are included
10
in the Standard & Poor's Electric Companies Index) and eight general industrial
and telecommunications companies located in the Southeast. 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 2000, 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. Base salaries are
reviewed and adjusted annually. James L. Broadhead's employment agreement
provides that his base salary shall be at least equal to his base salary as in
effect in 2000 and shall be reviewed at least annually and increased
substantially consistent with increases in base salary awarded to peer
executives of the Corporation, but not less than increases in the consumer price
index.
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 Florida Power & Light Company, business unit
performance measures), and in the discretion of the Committee. These other
corporate performance measures, which for 2000 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 2000, the 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 2000 were less than the
amounts that could have been paid based on the attainment of the net income
goal.
Long-term incentive compensation is based primarily 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 shareholder value awards. 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, four-year performance share
award payouts (except for cash for the payment of incomes taxes) are made in
shares of Common Stock which the recipient is expected, consistent with general
guidelines, to hold for the duration of his or her employment. Long-term
incentive compensation also includes stock options and restricted stock in
amounts intended to ensure that the Corporation's total executive compensation
program is competitive, in terms of both composition and amount, with the
compensation programs of other companies with which the Corporation competes for
executive talent.
For 2000, Mr. Broadhead, FPL Group's chief executive officer, was paid
$1,050,000 in base salary, $50,000 of which he agreed to defer, and $1,220,625
in annual 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.
11
Mr. Broadhead's annual incentive compensation for 2000 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; corporate and
other net income; employee safety; number of significant environmental
violations; and the development of a plan to meet five-year growth objectives.
The qualitative factors included measures to position the Corporation for
increased competition and initiating other actions that significantly strengthen
the Corporation and enhance shareholder value.
FPL Group shareholders' December 15, 2000, approval of a proposed merger with
Entergy Corporation resulted in a change of control under the definition in FPL
Group's 1994 Long Term Incentive Plan. Upon the change of control, all
performance criteria of performance-based awards, restricted stock and other
stock-based awards held by the executive officers were deemed fully achieved and
all such awards were deemed fully earned and vested; all options and other
exercisable rights became exercisable and vested; the restrictions, deferral
limitations and forfeiture conditions applicable to all awards under the Plan
lapsed and such awards became fully vested; and, in general, all outstanding
awards were canceled and the holder thereof paid in cash on the basis of the
highest trading price of FPL Group common stock during the 60-day period
preceding the date that the shareholders approved the merger. As was estimated
in the joint proxy statement/prospectus dated November 7, 2000, the actual cash
payment due upon change of control to Mr. Broadhead for his Long Term Incentive
Plan awards was $22,686,674.
Respectfully submitted,
J. Hyatt Brown, Chairman
H. Jesse Arnelle
Robert M. Beall, II
Armando M. Codina
Paul R. Tregurtha
12
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, LLC at December 31, 2000.
SUMMARY COMPENSATION TABLE
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)
- ------------------ ---- ---------- ---------- ------------- ----------- ----------- ----------- ----------------
James L. Broadhead 2000 $1,050,000 $1,220,625 $22,233 2,557,800 $22,686,674 $14,616,061
Chairman and CEO 1999 1,000,000 950,000 19,946 $ 250,000 1,148,751 13,423
of FPL Group and FPL 1998 950,000 1,050,000 10,990 2,004,180 13,456
Paul J. Evanson 2000 660,000 660,700 11,105 10,395,654 8,544
President of FPL 1999 628,500 616,900 8,656 1,278,900 150,000 458,985 13,539
1998 592,500 546,900 2,785 704,304 13,746
Lewis Hay, III (d) 2000 423,000 449,300 14,099 6,696,320 15,661
President of FPL 1999 153,846 225,200 6,523 1,359,375 150,000 65,400 3,047
Energy, LLC 1998
Dennis P. Coyle 2000 442,500 334,100 9,146 6,349,587 8,512
General Counsel and 1999 424,000 275,600 8,445 1,023,120 100,000 251,095 10,879
Secretary of FPL 1998 400,000 288,000 667 412,413 10,910
Group and FPL
Thomas F. Plunkett 2000 375,000 243,000 11,121 5,902,937 8,391
President, Nuclear 1999 340,000 219,100 10,088 255,780 100,000 179,564 10,146
Division of FPL 1998 302,500 177,900 3,482 103,481 10,344
- ------------
(a) At December 31, 2000, none of the named officers held any shares of
restricted Common Stock.
(b) FPL Group shareholders' December 15, 2000, approval of a proposed merger
with Entergy Corporation resulted in a change of control under the
definition in FPL Group's 1994 Long Term Incentive Plan. Upon the change of
control, all performance criteria of performance-based awards, restricted
stock and other stock-based awards held by the executive officers were
deemed fully achieved, and all such awards were deemed fully earned and
vested; all options and other exercisable rights became exercisable and
vested; the restrictions, deferral limitations and forfeiture conditions
applicable to all awards under the Plan lapsed; and all outstanding awards
were canceled, and the holders thereof were paid in cash on the basis of the
highest trading price of FPL Group common stock during the 60-day period
preceding shareholder approval.
(c) For 2000, represents employer matching contributions of $8,075 to employee
thrift plans for each individual and employer contributions for life
insurance as follows: Mr. Broadhead $1,342, Mr. Evanson $469, Mr. Hay
$7,586, Mr. Coyle $437, and Mr. Plunkett $316. Also represents distribution
upon the change of control on December 15, 2000, to Mr. Broadhead of his
already vested benefit under his individual supplemental retirement plan.
Mr. Broadhead's vested lump sum benefit payable in cash as of December 15,
2000, was $14,021,598; this amount included the value of 96,800 shares of
restricted Common Stock awarded to him in 1991 for the purpose of financing
this plan, which would have otherwise vested on January 2, 2001. Also
includes $585,046, for Mr. Broadhead, in cash that accrued in a trust
established to receive dividends from the 96,800 restricted shares and that
was not part of the supplemental retirement plan lump sum benefit.
(d) Mr. Hay joined the Corporation in July 1999.
13
LONG TERM INCENTIVE PLAN AWARDS
In 2000, 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.
PERFORMANCE SHARE AWARDS
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE-BASED PLANS
NUMBER PERFORMANCE PERIOD -------------------------------
NAME OF SHARES UNTIL PAYOUT TARGET (#) MAXIMUM (#)
- ---- --------- ------------------ ----------- --------------
James L. Broadhead............................... 28,257 1/1/00 - 12/31/03 28,257 45,211
Paul J. Evanson.................................. 11,303 1/1/00 - 12/31/03 11,303 18,085
Lewis Hay, III................................... 6,018 1/1/00 - 12/31/03 6,018 9,629
Dennis P. Coyle.................................. 6,495 1/1/00 - 12/31/03 6,495 10,392
Thomas F. Plunkett............................... 5,505 1/1/00 - 12/31/03 5,505 8,808
The performance share awards in the preceding table are, under normal
circumstances, 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 2000 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 PERFORMANCE PERIOD ------------------------------
NAME OF SHARES UNTIL PAYOUT TARGET (#) MAXIMUM (#)
- ---- --------- ------------------ ---------- -------------
James L. Broadhead............................... 19,266 1/1/00 - 12/31/02 19,266 30,826
Paul J. Evanson.................................. 9,688 1/1/00 - 12/31/02 9,688 15,501
Lewis Hay, III................................... 4,514 1/1/00 - 12/31/02 4,514 7,222
Dennis P. Coyle.................................. 4,872 1/1/00 - 12/31/02 4,872 7,795
Thomas F. Plunkett............................... 4,128 1/1/00 - 12/31/02 4,128 6,605
The shareholder value awards in the preceding table are payable, under normal
circumstances, 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 comparing the average annual total shareholder
return of FPL Group (price appreciation of FPL Group Common Stock plus
dividends) to 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.
On December 15, 2000, FPL Group shareholders approved a proposed merger with
Entergy Corporation, resulting in a change of control under the definition in
FPL Group's 1994 Long Term Incentive Plan. See note (b) to the Summary
Compensation Table.
The named officers did not receive any stock option grants during 2000, did not
exercise any stock options during 2000, and held no exercisable options at the
end of the year.
14
RETIREMENT PLANS
FPL Group maintains a non-contributory defined benefit pension plan and a
supplemental executive retirement plan (SERP). The FPL Group Employee Pension
Plan and SERP were amended to a cash balance style plan effective April 1, 1997.
Employees who were SERP participants on that date were not affected by the
change, however. The following table shows the estimated annual benefits to
employees not affected by the change, which includes all of the executive
officers named in the Summary Compensation table except Mr. Hay. Benefits are
calculated on a straight-line annuity basis, payable on retirement in 2000 at
age 65 after the indicated years of service.
PENSION PLAN TABLE
YEARS OF SERVICE
ELIGIBLE AVERAGE --------------------------------------------------------------
ANNUAL COMPENSATION 10 20 30 40 50
- ------------------- ---------- ---------- ---------- ---------- ----------
300,$000....... $ 58,704 $ 117,397 $ 146,101 $ 154,543 $ 156,931
400,000....... 78,704 157,397 196,101 207,043 209,431
500,000....... 98,704 197,397 246,101 259,543 261,931
600,000....... 118,704 237,397 296,101 312,043 314,431
700,000....... 138,704 277,397 346,101 364,543 366,931
800,000....... 158,704 317,397 396,101 417,043 419,431
900,000....... 178,704 357,397 446,101 469,543 471,931
1,000,000..... 198,704 397,397 496,101 522,043 524,431
1,100,000..... 218,704 437,397 546,101 574,543 576,931
1,200,000..... 238,704 477,397 596,101 627,043 629,431
1,300,000..... 258,704 517,397 646,101 679,543 681,931
1,400,000..... 278,704 557,397 696,101 732,043 734,431
1,500,000..... 298,704 597,397 746,101 784,543 786,931
1,600,000..... 318,704 637,397 796,101 837,043 839,431
1,700,000..... 338,704 677,397 846,101 889,543 891,931
1,800,000..... 358,704 717,397 896,101 942,043 944,431
1,900,000..... 378,704 757,397 946,101 994,543 996,931
2,000,000..... 398,704 797,397 996,101 1,047,043 1,049,431
2,100,000..... 418,704 837,397 1,046,101 1,099,543 1,101,931
2,200,000..... 438,704 877,397 1,096,101 1,152,043 1,154,431
2,300,000..... 458,704 917,397 1,146,101 1,204,543 1,206,931
2,400,000..... 478,704 957,397 1,196,101 1,257,043 1,259,431
2,500,000..... 498,704 997,397 1,246,101 1,309,543 1,311,931
2,600,000..... 518,704 1,037,397 1,296,101 1,362,043 1,364,431
2,700,000..... 538,704 1,077,397 1,346,101 1,414,543 1,416,931
2,800,000..... 558,704 1,117,397 1,396,101 1,467,043 1,469,431
The compensation covered by the plans includes annual salaries and bonuses of
certain officers of FPL Group and annual salaries of officers of FPL, as shown
in the Summary Compensation Table, but no other amounts shown in that table.
Estimated credited years of service for executive officers named in the Summary
Compensation Table are: Mr. Broadhead, 12 years; Mr. Evanson, 8 years;
Mr. Coyle, 11 years; and Mr. Plunkett, 10 years. Amounts shown in the table
reflect deductions to partially cover employer contributions to social security.
Under the cash balance benefit formula, credits are accumulated in an employee's
account, being determined as a percentage of the employee's monthly recognized
earnings in accordance with the following formula:
PERCENT OF
YEARS OF SERVICE COMPENSATION
---------------- ------------
0-5 4.5%
5-30 6.0%
Over 30 0.0%
15
In addition, the employee's account is credited monthly with interest at an
annual rate that is based upon the yield on one-year Treasury Constant
Maturities. A higher rate can be provided at the Corporation's discretion.
Mr. Hay is the only named executive officer covered by the cash balance plan.
His estimated age 65 annual retirement benefit payable under that plan is
$117,408. This estimate assumes his 2000 pensionable earnings (which includes
annual salary and bonus as shown in the Summary Compensation Table) remain level
and a cash balance interest crediting rate of 5.0%. The estimated age 65 cash
balance account was converted to an annuity based on a 5.72% discount rate and
1983 GAM Unisex mortality.
A supplemental retirement plan for Mr. Coyle provides for benefits 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.
The Corporation sponsors a split-dollar life insurance plan for certain of its
senior officers, including the executive officers named in the Summary
Compensation Table. Benefits under the split-dollar plan are provided by
universal life insurance policies purchased by the Corporation. If the officer
dies prior to retirement (defined to include age plus years of service), 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 but
before termination of his split-dollar agreement, the officer's beneficiaries
receive between 50% to 100% of the officer's final annual salary. Upon
termination of the agreement after 10 years, at age 65 or termination of
employment which qualifies as retirement, whichever is later, the life insurance
policies will be assigned to the officer or his beneficiary. Each officer is
taxable on the insurance carrier's one-year term rate for his life insurance
coverage.
EMPLOYMENT AGREEMENTS
On December 15, 2000, when FPL Group's shareholders approved a proposed merger
with Entergy Corporation, previously-existing employment agreements between the
Corporation and certain officers, including the individuals named in the Summary
Compensation Table, became effective. The agreements provide that the officer
shall be employed by the Corporation for a period of four years (five years in
the case of Mr. Broadhead) in a position at least commensurate with his position
with the Corporation in December 2000. During the employment period the officer
shall be paid an annual base salary at least equal to his annual base salary for
2000, with annual increases consistent with those awarded to other peer officers
of the Corporation, but not less than the increases in the consumer price index;
shall be paid an annual bonus at least equal to the highest bonus paid to him
for any of the three years immediately preceding 2000; be given the opportunity
to earn long-term incentive compensation at least as favorable as such
opportunities given to other peer officers of the Corporation during 2000 or
thereafter; and shall be entitled to participate in employee benefit plans
providing benefits at least as favorable as those provided to other peer
officers of the Corporation during 2000 or thereafter.
In the event that the officer's employment is terminated (except for death,
disability, or cause) or if the officer terminates his 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 bonus for the year 2000. The officer is also entitled to
the maximum amount payable under all long-term incentive compensation grants
outstanding, continued coverage under all employee benefit plans, supplemental
retirement benefits, and reimbursement for any tax penalties incurred as a
result of the severance payments.
16
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 2002
Annual Meeting of Shareholders must be received at FPL Group's principal
executive offices on or before December 4, 2001. After February 15, 2002, notice
to FPL Group of a shareholder proposal submitted for consideration at the 2002
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
2002 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, by telephone or
other electronic media. FPL Group has retained Corporate Investor
Communications, Inc. to assist in the solicitation of proxies, for which
services it will be paid a fee of $5,000 plus out-of-pocket expenses. FPL Group
will reimburse custodians, nominees or other persons for their out-of-pocket
expenses in sending proxy materials to beneficial owners.
OTHER BUSINESS
The Board of Directors does not know of any other business to be presented at
the meeting and does not intend to bring before the meeting any matter other
than the proposal described herein. However, if any other business should come
before the meeting, or any adjournments thereof, the persons named in the
accompanying proxy 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 CARD AT YOUR EARLIEST
CONVENIENCE. ALTERNATIVELY, YOU MAY CAST YOUR VOTE BY TELEPHONE OR
ELECTRONICALLY BY FOLLOWING THE INSTRUCTIONS ON YOUR PROXY CARD.
BY ORDER OF THE BOARD OF DIRECTORS.
/s/ Dennis P. Coyle
DENNIS P. COYLE
Secretary
April 13, 2001
17
APPENDIX
FPL GROUP, INC.
Audit Committee of the Board of Directors
CHARTER
I. MEMBERSHIP
The Committee shall consist of not less than three directors. The members of
the Committee shall meet the independence and experience requirements of the
New York Stock Exchange.
II. COMMITTEE CHAIRMAN
One member of the Committee shall be designated its Chairman and shall
preside over the meetings of the Committee and report to the Board.
III. REPORTING
The Committee shall report its activities to the full Board on a regular
basis.
IV. ADMINISTRATIVE SECRETARY
The Committee shall designate an administrative secretary who shall not be a
member of the Committee. The administrative secretary shall keep minutes of
the meetings of the Committee and perform such other functions as are
designated by the Committee.
V. RESPONSIBILITIES
The responsibilities of the Committee are to assist the Board in monitoring
(1) the Corporation's internal control structure, (2) the financial
reporting process and (3) the independence and performance of the
Corporation's Internal Audit Department and the Independent Certified Public
Accountants ("CPA"). In order to fulfill these responsibilities, the
Committee must interface with management, the Internal Audit Department and
the CPA.
The duties of Committee that relate primarily to the Corporation and its
management are:
-Review and reassess the adequacy of this Charter annually and recommend any
proposed changes to the Board for approval.
-Review and discuss the annual audited financial statements of the
Corporation with management, including major issues regarding accounting
and auditing principles and practices as well as the adequacy of internal
controls that could significantly affect the Corporation's financial
statements, and based on such discussions, recommend to the Board whether
such audited financial statements should be included in the Corporation's
Form 10-K.
-The audit committee chairman to review with management and the CPA the
Corporation's quarterly financial statements prior to the filing of the
Corporation's Quarterly Reports on Form 10-Q.
-Afford the chief financial officer and chief accounting officer open lines
of communication to the Committee.
-Review management's and the CPA's analysis of significant financial
reporting issues and judgments made, and suggested major changes to the
Corporation's auditing and accounting principles and practices, in
connection with the preparation of the Corporation's financial statements.
A-1
-Review with the Corporation's general counsel legal matters that may have a
material impact on the financial statements.
-Review management's program to monitor compliance with the Corporation's
Code of Conduct.
-Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Corporation's annual proxy statement.
-Assist the Corporation as necessary in the Corporation's preparation of the
annual written affirmation regarding the Committee required by the New York
Stock Exchange.
The duties of the Committee that relate primarily to the Internal Audit
Department are:
-Afford the Corporation's director of internal audit unrestricted access to
the Committee.
-Discuss the adequacy of the internal audit program with the director of
internal audit.
-Review with the director of internal audit, on at least an annual basis,
the proposed schedule for audits for the next fiscal year.
-Review the significant reports to management prepared by the Internal Audit
Department and management's responses.
The duties of the Committee that relate primarily to the CPA are:
-Receive periodic formal written statements from the CPA regarding the CPA's
independence as required by Independence Standards Board Standard No.1 and
discuss such reports and the CPA's independence with the CPA, particularly
with respect to any disclosed relationships or services that may impact the
objectivity and independence of the CPA.
-If so determined by the Committee, recommend that the Board take
appropriate action in response to the CPA's reports to satisfy itself of
the independence of the CPA.
-Recognize that the CPA is ultimately accountable to the Board and to the
Committee.
-Evaluate and recommend the CPA to the Board for appointment by the Board.
-Evaluate with the Board the performance of the CPA, and if the Committee so
determines, recommend that the Board replace the CPA.
-Review with the CPA the scope of its audit of the Corporation.
-Discuss with the CPA the matters required to be discussed by Statement on
Auditing Standards No. 61 relating to the conduct of the audit.
-Review with the CPA any problems or difficulties the CPA may have
encountered and any management letter provided by the CPA and the
Corporation's response to the letter.
-Discuss with the CPA any non-audit services provided to the Corporation and
the fees charged for those services.
-Provide routine open access to both the Committee and the Board to discuss
any matters thought appropriate.
VI. MEETINGS--LOCATION AND NUMBER
The Committee shall meet four times during the year, or as otherwise called
by the Chairman of the Committee or as directed by the Board. Meetings will
be held at the principal offices of the Corporation or as directed by the
Chairman of the Committee.
A-2
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Corporation's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. This is the
responsibility of management and the CPA. It is not the duty of the Committee to
conduct investigations, to resolve disagreements, if any, between management and
the CPA or to assure compliance with laws and regulations and the Corporation's
Code of Conduct.
Adopted: May 15, 2000
A-3
0732-PS-01
Dear Shareholder: April 13, 2001
You are cordially invited to attend the Annual Meeting of Shareholders to be
held at 10:00 a.m. on Monday, May 14, 2001, 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 vote your shares as soon as
possible using one of three convenient methods: over the telephone, over the
Internet or by signing and returning your proxy card 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 IF MAILING
- --------------------------------------------------------------------------------
PROXY/VOTING INSTRUCTIONS
FPL GROUP, INC.
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 14, 2001, 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
proposal 1.
If you are a participant in any of FPL Group, Inc.'s Employee Thrift Plans
(the "Plans"), this proxy information will be forwarded to Fidelity Management
Trust Company, as Trustee of the Thrift Plans, and will tell the Trustee how to
vote the number of shares of Common Stock reflecting your proportionate interest
in the FPL Group Stock Fund and the FPL Group Leveraged ESOP Fund. Your
instructions will also determine the vote on a proportionate number of the
Leveraged ESOP shares which are held in the Thrift Plans but not yet allocated
to participants. If you do not give the Trustee voting instructions, the number
of shares reflecting your proportionate interest will not be voted, but your
proportionate share of the unallocated Leveraged ESOP shares will be voted by
the Trustee in the same manner as it votes unallocated shares for which
instructions are received.
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SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
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[FPL LOGO]
P.O. BOX 9398
BOSTON, MA 02205-9398
You may vote your shares by using the Internet or a touch-tone telephone
anytime, 24 hours a day, 7 days a week. Your Internet or telephone vote
authorizes the named proxies to vote your shares in the same manner as if you
mailed, signed and returned your proxy card.
TO VOTE BY TELEPHONE:
o Read the accompanying Proxy Statement and Proxy Card.
o Locate your 14-digit VOTER CONTROL NUMBER located on your proxy card above
your name.
o Using a touch-tone phone, call toll-free 1-877-779-8683. THERE IS NO CHARGE
TO YOU FOR THIS CALL.
o Follow the recorded instructions.
TO VOTE BY INTERNET:
o Read the accompanying Proxy Statement and Proxy Card.
o Locate your 14-digit VOTER CONTROL NUMBER located on your proxy card above
your name.
o GO TO THE WEB ADDRESS: http://www.eproxyvote.com/fpl
o Follow the instructions.
TO VOTE BY MAIL:
o Read the accompanying Proxy Statement and Proxy Card.
o Mark, sign and date your proxy card and return it in the envelope provided.
RECEIVE FUTURE MATERIALS VIA THE INTERNET
In order to save money on printing and mailing costs we are offering
shareholders the opportunity to consent to receive annual meeting materials by
e-mail instead of by U.S. mail. If you have an e-mail account and Internet
access, please take advantage of this option by voting online and indicating
your consent for electronic delivery or accessing http://www.econsent.com/fpl
and then following the instructions.
DETACH HERE IF MAILING
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/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1.
1. Election of Directors. NOMINEES:
(01) H. Jesse Arnelle, (02) Sherry S. Barrat, (03) Robert M. Beall, II,
(04) James L. Broadhead, (05) J. Hyatt Brown, (06) Armando M. Codina,
(07) Willard D. Dover, (08) Alexander W. Dreyfoos, Jr., (09) Paul J. Evanson,
(10) Frederic V. Malek and (11) Paul R. Tregurtha
FOR WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
/ / / /
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For all nominees except as noted above
2. In their discretion, 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:__________