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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Commission
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Exact name of registrants as specified in their
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IRS Employer
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2-27612 |
FLORIDA POWER & LIGHT COMPANY 700 Universe Boulevard Juno Beach, Florida 33408 (561) 694-4000 |
59-0247775 |
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SIGNATURES
Date: December 18, 2008
FPL GROUP, INC.
FLORIDA POWER & LIGHT COMPANY
(Registrants)
CHARLES E. SIEVING |
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Charles E. Sieving Executive Vice President & General Counsel of FPL Group, Inc. and Executive Vice President of Florida Power & Light Company |
Exhibit 10(a)
FPL Group, Inc.
Executive Annual Incentive Plan
Plan Objectives
Section 2.1 Term . The Plan shall be effective for five (5) consecutive Plan Years beginning on the Effective Date and ending on December 31, 2012.
Definitions
The following definitions shall apply for purposes of this Plan unless a different meaning is clearly indicated by the context:
Section 3.2 " Award Agreement " means any written agreement, contract, or other instrument or document evidencing an Award.
Section 3.4 " Board " means the Board of Directors of the Company.
Section 3.5 " Change of Control " means the first to occur of any of the following events:
a. The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (x) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that the following acquisitions (collectively, the "Excluded Acquisitions") shall not constitute a Change of Control (it being understood that shares acquired in an Excluded Acquisition may nevertheless be considered in determining whether any subsequent acquisition by such individual, entity or group (other than an Excluded Acquisition) constitutes a Change of Control): (i) any acquisition directly from the Company or any Subsidiary; (ii) any acquisition by the Company or any Subsidiary; (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary; (iv) any acquisition by an underwriter temporarily holding Company securities pursuant to an offering of such securities; (v) any acquisition in connection with which, pursuant to Rule 13d-1 promulgated pursuant to the Exchange Act, the individual, entity or group is permitted to, and actually does, report its beneficial ownership on Schedule 13G (or any successor Schedule); provided that, if any such individual, entity or group subsequently becomes required to or does report its beneficial ownership on Schedule 13D (or any successor Schedule), then, for purposes of this paragraph, such individual, entity or group shall be deemed to have first acquired, on the first date on which such individual, entity or group becomes required to or does so report, beneficial ownership of all of the Outstanding Company Common Stock and/or Outstanding Company Voting Securities beneficially owned by it on such date; or (vi) any acquisition in connection with a Business Combination (as hereinafter defined) which, pursuant to subparagraph (3) below, does not constitute a Change of Control; or
b. Individuals who, as of the Effective Date constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, entity or group other than the Board; or
c. Consummation of a reorganization, merger, consolidation or other business combination (any of the foregoing, a "Business Combination") of the Company or any Subsidiary with any other corporation, in any case with respect to which:
(1) the Outstanding Company Voting Securities outstanding immediately prior to such Business Combination do not, immediately following such Business Combination, continue to represent (either by remaining outstanding or being converted into voting securities of the resulting or surviving entity or any ultimate parent thereof) more than 55% of the outstanding common stock and of the then outstanding voting securities entitled to vote generally in the election of directors of the resulting or surviving entity (or any ultimate parent thereof); or
(2) less than a majority of the members of the board of directors of the resulting or surviving entity (or any ultimate parent thereof) in such Business Combination (the "New Board") consists of individuals ("Continuing Directors") who were members of the Incumbent Board (as defined in subparagraph (1) above) immediately prior to consummation of such Business Combination (excluding from Continuing Directors for this purpose, however, any individual whose election or appointment to the Board was at the request, directly or indirectly, of the entity which entered into the definitive agreement with the Company or any Subsidiary providing for such Business Combination); or
d. (i) Consummation of a sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation with respect to which, following such sale or other disposition, more than 55% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities as the case may be or (ii) shareholder approval of a complete liquidation or dissolution of the Company.
The term "the sale or disposition by the Company of all or substantially all of the assets of the Company" shall mean a sale or other disposition transaction or series of related transactions involving assets of the Company or of any Subsidiary (including the stock of any Subsidiary) in which the value of the assets or stock being sold or otherwise disposed of (as measured by the purchase price being paid therefor or by such other method as the Board determines is appropriate in a case where there is no readily ascertainable purchase price) constitutes more than two-thirds of the fair market value of the Company (as hereinafter defined). The "fair market value of the Company" shall be the aggregate market value of the then Outstanding Company Common Stock (on a fully diluted basis) plus the aggregate market value of the Company's other outstanding equity securities. The aggregate market value of the shares of Outstanding Company Common Stock shall be determined by multiplying the number of shares of Outstanding Company Common Stock (on a fully diluted basis) outstanding on the date of the execution and delivery of a definitive agreement with respect to the transaction or series of related transactions (the "Transaction Date") by the average closing price of the shares of Outstanding Company Common Stock for the ten trading days immediately preceding the Transaction Date. The aggregate market value of any other equity securities of the Company shall be determined in a manner similar to that prescribed in the immediately preceding sentence for determining the aggregate market value of the shares of Outstanding Company Common Stock or by such other method as the Board shall determine is appropriate.
Section 3.7 " Company " means FPL Group, Inc., a corporation organized and existing under the laws of the State of Florida, and any successor thereto. Where the context requires, "Company" shall also include all direct and indirect subsidiaries of FPL Group, Inc.
Section 3.9 " Committee " means a committee consisting of those members of the Compensation Committee of the Company who are outside directors as defined in section 162(m) of the Code or such other committee consisting of outside directors as defined in section 162(m) of the Code as the Board may appoint to serve as the Committee. The Committee shall at all times consist of at least two members who are outside directors as defined in section 162(m) of the Code. To the extent of the delegation set forth in Section 8.3 hereof, references in this Plan or any instrument issued in relation to this Plan to the Committee shall be deemed to be references to the Committee's delegate.
Section 3.14 " ERISA " means the Employee Retirement Income Security Act of 1974, as amended.
Section 3.17 " Good Reason " means (i) a material diminution in base salary, authority, duties or responsibilities, or (ii) a material change (more than 100 miles) in the geographic location where the Participant is employed, provided that the Participant has given notice to the Company of the existence of these conditions within ninety (90) days of the initial existence of the conditions and the Company has been given at least thirty (30) days to cure the conditions.
Section 3.19 " Plan " means the FPL Group, Inc. Executive Annual Incentive Plan
Section 3.20 " Plan Year " means the calendar year.
Section 3.23 " Taxable Year " means the taxable year of the Company for federal income tax purposes.
Eligibility And Participation; Termination of Participation
Section 4.4 Other Terminations . Unless otherwise provided in the specific terms of an Award, or in the provisions of a written employment or change of control/retention agreement between the Company and the Participant, the Committee shall have the authority to determine whether a Participant who ceases employment prior to the end of a Plan Year, whether by reason of Retirement, Death, Disability or otherwise, is eligible to receive a prorated Award for that Plan Year; provided, however, that following the occurrence of a Change of Control, the Committee may not exercise its authority to deny a prorated Award to any Participant unless such Participant's termination of employment is (i) a Discharge for Cause or (ii) voluntary without Good Reason. In the event that the Committee determines that a Participant who otherwise ceases employment prior to the end of a Plan Year is eligible to receive a prorated Award for that Plan Year, the amount of such Award shall be calculated and paid after the end of the Plan Year at the same time as other Awards for that Plan Year are paid.
Establishment Of Performance Objectives
Section 6.1 Corporate Performance Objectives .
(a) Not later than a date which is within the first ninety (90) days of each Plan Year, the Committee shall establish one or more specific Corporate Performance Objectives for such Plan Year, including target levels and, if deemed appropriate by the Committee, one or more threshold, above target or other enhanced or reduced achievement levels associated with each Corporate Performance Objective. If the Committee adds a Participant to the Plan for a Plan Year after initially establishing the award opportunities and Corporate Performance Objectives for the Plan Year, it shall establish the Corporate Performance Objectives applicable to the new Participant within thirty (30) days after adding the Participant to the Plan. The Corporate Performance Objectives for a Plan Year shall be based on one or more of the following criteria:
(i) |
Adjusted earnings, |
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The Corporate Performance Objectives may be expressed on an absolute and/or relative basis, or a before- or after-tax basis, or a consolidated or business-unit basis, may be based on or otherwise employ comparisons based on internal targets, the past performance of the Company and/or the past or current performance of other companies and may include or exclude any or all extraordinary, non-core, non-operating or non-recurring items, or such other items as the Committee may determine.
(b) Those Corporate Performance Objectives which have meanings ascribed to them by GAAP shall have the meanings assigned to them under GAAP as in effect and applied to the Company on the date on which the Corporate Performance Objectives are established, without giving effect to any subsequent changes in GAAP, unless the Committee specifically provides otherwise when it establishes the Corporate Performance Objectives.
Determination And Payment Of Awards
Section 7.1 Certification of Corporate Performance Objectives . As promptly as practicable, but in any event within seventy-five (75) days after the end of each Plan Year, the Committee shall certify the performance of the Company relative to the Corporate Performance Objective or Objectives established for Participants. Each Participant's Award shall be determined by multiplying either (i) the Participant's Base Salary for the Plan Year multiplied by such Participant's target Award opportunity established as a percentage of the Participant's Base Salary for the Plan Year pursuant to section 5.1 hereof or (ii) the specific dollar amount established as the Participant's target Award opportunity pursuant to section 5.1 hereof, by the percentage or ordinal "score" determined by applying the matrix, formula or methodology established pursuant to sections 6.2 and 6.3 of the Plan, adjusted, if applicable, to take into account such subjective and objective factors as the Committee deems appropriate, including, but not limited to, the extent to which Participant's overall individual performance met expectations. Awards under the Plan shall be paid as soon as practicable following the end of the Plan Year but in no event later than March 15 of the year immediately following the Plan Year.
Section 7.2 Form of Award Payment . Unless the Committee otherwise determines, Awards shall be payable in cash. If the Committee so determines, Awards shall be payable (or may, in the Participant's discretion, be payable), in whole or in part, by issuing shares of the Company's common stock, par value $.01 per share ("Common Stock"), in accordance with, and subject to the terms and conditions of, the Company's Amended and Restated Long Term Incentive Plan, as such plan may from time to time be amended, or any equity compensation plan adopted by the Company as a successor plan thereto (collectively, the "LTIP"), which Common Stock shall have a fair market value (determined as set forth in the LTIP) on the date the Award is determined substantially equivalent to, but in no event greater than, the Award (or portion thereof to be paid in Common Stock) determined in accordance with Section 7.1 hereof.
Section 8.1 Committee . The Plan shall be administered by the Committee.
a. to interpret and construe the Plan, and to determine all questions that may arise under the Plan as to eligibility for participation in the Plan;
b. to adopt rules and regulations for the operation and administration of the Plan; and
c. to take any other action not inconsistent with the provisions of the Plan that it may deem necessary or appropriate.
The Committee may delegate to one or more of its members or to one or more executive officers of the Company the authority to take any action or exercise any discretion required or permitted to be taken or exercised by the Committee with respect to any Employee or Participant other than the Company's Chief Executive Officer or any Section 162(m) Employee. Action taken or discretion exercised pursuant to such delegated authority shall be reported to the Committee. To the extent of any such delegation, references in the Plan or any instrument issued in relation to the Plan shall be deemed to be references to the Committee's delegate.
Amended and Restated December 12, 2008
Exhibit 10(b)
FPL GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Amended and Restated
Effective
January
1,
2005
FPL GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
ARTICLE I DEFINITIONS |
2 |
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1.01 |
Administrator |
2 |
1.02 |
Affiliated Company |
3 |
1.03 |
Alternate Payee |
3 |
1.04 |
Base Compensation |
3 |
1.05 |
Beneficiary |
3 |
1.06 |
Board |
3 |
1.07 |
Bonus Compensation |
3 |
1.08 |
Change of Control |
3 |
1.09 |
Change of Control Event |
5 |
1.10 |
Class A Executive |
5 |
1.11 |
Code |
5 |
1.12 |
Committee |
6 |
1.13 |
Company |
6 |
1.14 |
Corporate Officer |
6 |
1.15 |
Disability |
6 |
1.16 |
Domestic Relations Order |
6 |
1.17 |
Effective Date |
6 |
1.18 |
Employee |
6 |
1.19 |
Employer |
7 |
1.20 |
ERISA |
9 |
1.21 |
Grandfathered Benefit |
7 |
1.22 |
Original Effective Date |
7 |
1.23 |
Participant |
7 |
1.24 |
Pension Plan |
7 |
1.25 |
Plan |
7 |
1.26 |
Prior Pension Plan |
7 |
1.27 |
Retirement Plans |
8 |
1.28 |
Retirement Savings Plan |
8 |
1.29 |
Separation from Service |
8 |
1.30 |
Service Recipient |
8 |
1.31 |
Specified Employee |
8 |
1.32 |
Supplement |
8 |
1.33 |
Supplemental Matching Contribution |
8 |
1.34 |
Supplemental Matching Contribution Account |
8 |
1.35 |
Supplemental Pension Benefit |
8 |
1.36 |
Vesting Years of Service |
8 |
ARTICLE II ELIGIBILITY |
8 |
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2.01 |
Eligibility for Participation |
9 |
2.02 |
Terminated Employees |
9 |
2.03 |
Termination of Participation |
9 |
ARTICLE III BENEFITS |
9 |
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3.01 |
Benefits |
9 |
3.02 |
Vesting of Benefits |
11 |
3.03 |
Transfer of Employment |
12 |
3.04 |
Payment of Benefits |
13 |
3.05 |
Taxes |
14 |
3.06 |
Offset for Obligations to Employer |
15 |
3.07 |
Distributions under Domestic Relations Orders |
15 |
ARTICLE IV ADMINISTRATION |
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4.01 |
Administration |
15 |
4.02 |
Liability of Committee; Indemnification |
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4.03 |
Determination of Benefits |
16 |
4.04 |
Payment Due an Incompetent |
17 |
4.05 |
Liability for Payment; Expenses |
17 |
ARTICLE V AMENDMENT AND TERMINATION |
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5.01 |
Amendment |
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5.02 |
Termination or Merger of the Plan |
18 |
5.03 |
Supplements |
18 |
5.04 |
Withdrawal by Employer |
19 |
ARTICLE VI MISCELLANEOUS |
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6.01 |
No Trust Created |
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6.02 |
Funding |
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6.03 |
Top Hat Plan |
19 |
6.04 |
Effect on Benefits under Other Plans |
19 |
6.05 |
Spendthrift Clause |
20 |
6.06 |
Rights Against the Employer |
20 |
6.07 |
No Contract of Employment |
20 |
6.08 |
Indemnity Upon Change of Control |
20 |
6.09 |
Successors |
20 |
6.10 |
Severability |
20 |
6.11 |
Governing Law |
20 |
6.12 |
Construction |
20 |
6.13 |
Compliance with Code Section 409A |
21 |
Execution Page |
22 |
FPL GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
THIS FPL GROUP, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (the "Plan") is adopted by the Compensation Committee of the Board of Directors (" Compensation Committee ") and the Board of Directors of FPL Group, Inc. (the "Company" or "Group") on this 12th day of December, 2008, effective as of January 1, 2005 (the " Effective Date" ).
WHEREAS, on December 12, 1988 the Company adopted the FPL Group, Inc. Supplemental Executive Retirement Plan (the "Original Plan" ) effective as of January 1, 1986 (the "Original Effective Date" ) for the exclusive benefit of a select group of management and highly compensated employees to provide retirement benefits in addition to those benefits available under the qualified pension and 401(k) plans established and maintained by the Company ; and
WHEREAS, the Benefit Restoration Plan of FPL Group, Inc. and Affiliates was merged into the Original Plan effective as of January 1, 1994 pursuant to the amendment and restatement of the Original Plan; and
WHEREAS, the Original Plan was restated effective April 1, 1997, when the Company changed the benefit formula under its qualified defined benefit pension plan from a unit credit formula to a cash balance formula (the "Prior Plan") ; and
WHEREAS, the Company has been authorized by the Compensation Committee to amend and restate the Plan;
NOW, THEREFORE, the Grandfathered Plan is hereby frozen, no new benefits will be earned under the Grandfathered Plan after December 31, 2004, and the Company hereby amends and restates the Plan effective as of January 1, 2005 in its entirety on the following terms and conditions:
The following terms when used herein shall have the meaning indicated, unless the context indicates otherwise:
1.01 "Administrator " shall mean an officer or officers of the Employer designated by the Company to administer the Plan or, until the Company otherwise designates such an officer or officers, the Executive Vice President, Human Resources (or other most senior Human Resources officer of the Company, however designated) of the Company.
1.02 "Affiliated Company " shall mean any corporation which is a member of a controlled group of corporations (as defined in Code Section 414(b)) which includes the Company; any trade or business (whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with the Company; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Code Section 414(m)) which includes the Company; and any other entity required to be aggregated with the Company pursuant to regulations under Code Section 414(o).
1.03 "Alternate Payee " shall have the meaning set forth in Section 3.07.
1.04 "Base Compensation " shall mean Base Compensation (as defined in the Pension Plan) and Monthly Base Pay (as defined in the Prior Pension Plan) with respect to the Supplemental Pension Benefit described in Subsection 3.01(b), and Earnings (as defined in the Retirement Savings Plan) with respect to the Supplemental Matching Contributions described in Subsection 3.01(c)(1), plus, to the extent not otherwise included, (i) any salary deferred at any time under the FPL Group, Inc. Deferred Compensation Plan (or its successor) , and (ii) any amounts contributed by the Employer pursuant to a salary reduction agreement which are not includible in the gross income of the Participant under Code Sections 125, 402(e)(3), or 402(h). The term " Base Compensation" shall not include : (a) amounts received as fringe benefits irrespective of the includibility of such amounts on the Participant's Form W-2 (other than salary reduction contributions described in clause (ii) above), (b) amounts received under the FPL Group, Inc. Long-Term Incentive Plan (or its successor), and (c) bonuses awarded under the Annual Incentive Plan or any other annual incentive plan maintained by the Employer (whether or not such bonuses were deferred under the FPL Group, Inc. Deferred Compensation Plan).
1.05 " Beneficiary" shall mean the Beneficiary designated under the applicable Retirement Plan with respect to which benefits hereunder are paid, except that the Participant may designate a Beneficiary hereunder by delivering to the Employer a written designation of Beneficiary specifically made with respect to this Plan.
1.06 " Board" shall mean the Board of Directors of the Company .
1.07 " Bonus Compensation" shall mean Base Compensation, plus any bonuses awarded under the Annual Incentive Plan , the Executive Annual Incentive Plan, or any other annual incentive plan maintained by the Employer (whether or not such bonuses were deferred under the FPL Group, Inc. Deferred Compensation Plan (or its successor) ).
1.08 "Change of Control " shall mean:
(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of Group (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of Group entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change of Control: (i) any acquisition by Group or any of its subsidiaries, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Group or any of its subsidiaries or (iii) any acquisition by any corporation with respect to which, following such acquisition, more than 75% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such acquisition in substantially the same proportions as their ownership, immediately prior to such acquisition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; or
(b) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Group's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened solicitation to which Rule 14a-11 of Regulation 14A promulgated under the Exchange Act applies or other actual or threatened solicitation of proxies or consents; or
(c) Consummation of a Group reorganization, merger or consolidation, in each case, with respect to which all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 75% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; or
(d) (i) Approval by the shareholders of Group of a complete liquidation or dissolution of Group or (ii) consummation of the sale or other disposition of all or substantially all of the assets of Group, other than to a corporation, with respect to which following such sale or other disposition, more than 75% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be.
The term "the sale or disposition by Group of all or substantially all of the assets of Group" shall mean a sale or other disposition transaction or series of related transactions involving assets of Group or of any direct or indirect subsidiary of Group (including the stock of any direct or indirect subsidiary of Group) in which the value of the assets or stock being sold or otherwise disposed of (as measured by the purchase price being paid therefor or by such other method as the Board determines is appropriate in a case where there is no readily ascertainable purchase price) constitutes more than two-thirds of the fair market value of Group (as hereinafter defined). The "fair market value of Group" shall be the aggregate market value of the then Outstanding Company Common Stock (on a fully diluted basis) plus the aggregate market value of Group's other outstanding equity securities. The aggregate market value of the shares of Outstanding Company Common Stock shall be determined by multiplying the number of shares of Outstanding Company Common Stock (on a fully diluted basis) outstanding on the date of the execution and delivery of a definitive agreement with respect to the transaction or series of related transactions (the "Transaction Date") by the average closing price of the shares of Outstanding Company Common Stock for the ten trading days immediately preceding the Transaction Date. The aggregate market value of any other equity securities of Group shall be determined in a manner similar to that prescribed in the immediately preceding sentence for determining the aggregate market value of the shares of Outstanding Company Common Stock or by such other method as the Board shall determine is appropriate.
1.09 "Change of Control Event " shall mean, with respect to a Participant, a Change of Control that also constitutes: (a) a change in ownership of the Participant's Service Recipient; (b) a change in effective control of the Participant's Service Recipient; or (c) a change in the ownership of a substantial portion of the assets of the Participant's Service Recipient. The existence of a Change of Control Event shall be determined by the Committee in accordance with Code Section 409A and the regulations thereunder.
1.10 "Class A Executive " shall mean an Employee who is designated for purposes of this Plan as such by the Committee.
1.11 "Code " shall mean the Internal Revenue Code of 1986, as it may be amended from time to time, and the rules and regulations promulgated thereunder.
1.12 " Committee" shall mean the Compensation Committee of the Board or any such other committee designated by the Board, which shall consist of at least three members of the Board each of whom are not employees of the Company or any of its subsidiaries.
1.13 "Company " shall mean FPL Group, Inc.
1.14 "Corporate Officer " shall have the meaning set forth in Section 5.01(a).
1.15 "Disability " shall mean the condition whereby a Participant is: (a) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Employer; or (c) any condition as a result of which a Participant is determined to be totally disabled by the Social Security Administration or Railroad Retirement Board.
1.16 "Domestic Relations Order " shall have the meaning set forth in Section 3.07.
1.17 " Effective Date" shall mean January 1, 2005.
1.18 " Employee" shall mean the President, Chairman, Chief Financial Officer, General Counsel, Treasurer, any Executive Vice President, any Senior Vice President, any Vice President of the Company, and any officer of Florida Power & Light Company or FPL Energy, LLC or any of their respective subsidiaries that is a Vice President or more senior.
In addition, the Vice President of Human Resources of the Company ("HR Officer" ) may select any other management or highly compensated employee of an Employer (other than executive officers) as an " Employee ." Any such individual shall be added to Appendix A of the Plan. The HR Officer may in his discretion determine that a management or highly compensated employee previously selected by him as an Employee shall no longer be eligible to actively participate in the Plan until such time as such individual is again selected to participate by the HR Officer or otherwise becomes an " Employee" as a result of satisfying the eligibility condition described in the preceding paragraph. In this event, the Participant 's Supplemental Pension Benefit (as described in Section 3.01(b)) shall be frozen (except for interest credits) , and no additional Supplemental Matching Contributions (as described in Section 3.01(c)(1)) shall be credited to his Supplemental Matching Contribution Account (as described in Section 3.01(c)), however, such account shall continue to be credited with theoretical earnings (as described in Section 3.01(c)(2)) until such account is distributed.
1.19 "Employer " shall mean the Company and any Affiliated Company (except an Affiliated Company that is specifically designated by a Corporate Officer as not being eligible to participate in the Plan).
1.20 "ERISA" shall mean the Employer Retirement Income Security Act of 1974, as it may be amended from time to time, and the rules and regulations promulgated thereunder.
1.21 "Grandfathered Benefit " shall mean: (a) with respect to any Participant, the balance credited to the Participant's Supplemental Matching Contribution Account at December 31, 2004 ; (b) with respect to any person who was a Participant immediately prior to April 1, 1997 and on April 1, 1997, such person's Supplemental Pension Benefit calculated under the first paragraph of Section 3.01(b) as if such person had terminated employment immediately on December 31, 2004 or on his actual date of termination, whichever is earlier; and (c) with respect to any person who was not a Participant immediately prior to and on April 1, 1997, such person's Supplemental Pension Benefit calculated under the second paragraph of Section 3.01(b) as if such person had terminated employment immediately on December 31, 2004 or on his actual date of termination, whichever is earlier. To the extent that a Participant's Grandfathered Benefit includes a supplemental unit credit accrued benefit, such benefit includes benefits rights and features applicable as of December 31, 2004 (plus subsequent interest credits on such balance based on the discount rate applicable under the Pension Plan as of December 31, 2004 (5.31%)). To the extent that a Participant's Grandfathered Benefit includes a supplemental cash balance account benefit, such benefit includes the cash balance account balance at December 31, 2004 plus subsequent interest credits on such balance based on the interest credit provisions applicable under the Pension Plan as of December 31, 2004 (4.0%) and also includes benefits, rights and features applicable as of December 31, 2004. The determination of a Participant's Grandfathered Benefit, if any, shall be made by the Committee in such manner as shall be necessary to conform to the requirements for grandfathered benefits under Section 409A of the Code and regulations thereunder.
1.22 "Original Effective Date " shall mean January 1, 1986, the effective date of the Plan as originally adopted.
1.23 " Participant" shall mean an Employee who satisfies the requirements for participation in the Plan in accordance with Section 2.01.
1.24 " Pension Plan" shall mean the FPL Group Employee Pension Plan, as it may be amended from time to time.
1.25 " Plan" shall mean the plan as set forth in this document , as it may be amended from time to time. This Plan shall be known as the FPL Group, Inc. Supplemental Executive Retirement Plan.
1.26 " Prior Pension Plan" shall mean the FPL Group Employee Pension Plan as in effect immediately prior to its amendment and restatement on April 1, 1997.
1.27 " Retirement Plans " shall mean the Pension Plan and the Retirement Savings Plan.
1.28 "Retirement Savings Plan" shall mean the FPL Group Employee Retirement Savings Plan, as it may be amended from time to time.
1.29 "Separation from Service " shall have the meaning set forth in Treasury Regulation 1.409A-1(h) for any reason other than a transfer between Employers.
1.30 "Service Recipient " shall mean with respect to a Participant on any date: (a) the corporation or non-corporate entity for which the Participant is performing services on such date; (b) all corporations or non-corporate entities that are liable to the Participant for the benefits due to him under the Plan; (c) a corporation or non-corporate entity that is a majority shareholder of a corporation or non-corporate entity described in (a) or (b) above; or (d) any corporation or non-corporate entity in a chain of corporations or non-corporate entities each of which is a majority shareholder of another corporation or non-corporate entity in the chain, ending in a corporation or non-corporate entity described in (a) or (b) above.
1.31 "Specified Employee " shall have the meaning described in Code Section 409A(9)(2)(B) and under the definition approved by the Committee.
1.32 "Supplement " shall have the meaning described in Section 5.03.
1.33 "Supplemental Matching Contribution " shall have the meaning set forth in Section 3.01(c)(1).
1.34 "Supplemental Matching Contribution Account " shall mean the account described in Section 3.01(c).
1.35 "Supplemental Pension Benefit " shall have the meaning set forth in Section 3.01(b).
1.36 "Vesting Years of Service " shall mean all periods beginning on the Employee's employment date with the Employer and ending on the date that the Employee terminates such employment with the Employer. Notwithstanding the foregoing, however, a Participant's years of service with a non-participating Affiliated Company shall be included for purposes of calculating the Participant's Vesting Years of Service.
2.01 Eligibility for Participation - An Employee shall become a Participant as follows:
(a) An individual listed on Appendix A shall remain a Participant hereunder (subject to the Company's decision to remove such individual as a Participant going forward) ; and
(b) Any other Employee who qualifies for a benefit under any of the Retirement Plans shall be a Participant in the Plan
;
,
provided such Employee is among a select group of management or highly compensated employees within the meaning of Section 201(2) of ERISA
and the Company designates that Employee for continued accrual of benefits under the Plan
.
2.02 Terminated Employees - This Plan is applicable only to Participants who perform one or more hours of service for the Employer on or after January 1, 2005. The rights and benefits of any Participant whose active employment terminated by retirement or otherwise prior to January 1, 2005, and his Beneficiaries shall be determined under the Prior Plan as in effect prior to January 1, 2005, unless a subsequent amendment of the Plan by its express terms applies to Participants who have previously terminated employment with the Employer .
2.03 Termination of Participation - An Employee who has become a Participant shall remain a Participant until the entire amount of his vested benefits, if any, under the Plan is distributed to him ( or his Beneficiary in the event of his death ) .
(a) In General - The benefits under this Plan to which a Participant shall be entitled shall be : (i) the Supplemental Pension Benefit described in Section 3.01(b) and (ii) the Supplemental Matching Contribution described in Section 3.01(c).
(b) Supplemental Pension Benefit -
Employees Becoming Participants Before April 1, 1997. With respect to any Participant who was a Participant in the Plan on both the day immediately before April 1, 1997, and on April 1, 1997, the "Supplemental Pension Benefit" shall be the greater of: (i) the supplemental cash balance accrued benefit described in Section 3.01(b)(1), or (ii) the supplemental unit credit accrued benefit described in Section 3.01(b)(2).
Employees Becoming Participants On or After April 1, 1997. With respect to any Participant who becomes a Participant in the Plan on or after April 1, 1997, the "Supplemental Pension Benefit" shall be the supplemental cash balance accrued benefit described and determined as set forth in Section 3.01(b)(1).
Double Basic and Transition Pension Credits for Designated Officers Becoming Participants On or After April 1, 1997. Solely for purposes of calculating the supplemental cash balance accrued benefit described and determined under Section 3.01(b)(1)(A) hereof for officers who become Participants in the Plan and who are specifically designated by the Committee (as indicated in Appendix A attached hereto and made a part hereof), the benefit to which the Participant is entitled under the Pension Plan shall be determined, for all amounts accruing on or after January 1, 2006 or the date of designation (if later than January 1, 2006), shall be based upon, and as if, the Participant's Basic Credits (as defined in the Pension Plan) and, to the extent applicable, Transition Credits (as defined in the Pension Plan), were multiplied by two (2).
(1) The " supplemental cash balance accrued benefit" is the difference, if any, between (A) and (B) where:
(A) is the benefit to which the Participant would be entitled under the Pension Plan, expressed in the normal form of benefit, if such benefit was computed : (i) as if benefits under the Pension Plan were based upon the Participant's Base Compensation, (ii) without the annual compensation limitation imposed by Code Section 401(a)(17) , and (iii) without the restrictions or the limitations imposed by Code Sections 415(b) or 415(e) ; and
(B) is the benefit payable to the Participant under the Pension Plan, expressed in the normal form of benefit.
(2) The " supplemental unit credit accrued benefit" is the difference, if any, between (A) and (B) where:
(A) is the benefit to which the Participant would be entitled under the Prior Pension Plan, expressed in the normal form of benefit, if such benefit was computed : (i) as if benefits under the Prior Pension Plan were based upon the Participant's Base Compensation, (ii) without the annual compensation limitation imposed by Code Section 401(a)(17) , and (iii) without the restrictions or the limitations imposed by Code Sections 415(b) or 415(e) ; and
(B) is the benefit payable to the Participant under the Pension Plan, expressed in the normal form of benefit.
(c) Supplemental Matching Contribution - The "Supplemental Matching Contribution" shall be an amount credited annually to the Participant's Supplemental Matching Contribution Account that consists of: (i) Supplemental Matching Contributions described in Section 3.01(c)(1), and (ii) theoretical earnings described in Section 3.01(c)(2).
(1) " Supplemental Matching Contributions" shall for each year of participation in this Plan be the difference, if any, between (A) and (B) where:
(A) is the matching contribution to which the Participant would be entitled under the Retirement Savings Plan for such year of participation if such contribution were computed : (i) as if the matching contribution under the Retirement Savings Plan was based upon the Participant's Base Compensation, (ii) without the annual compensation limitation imposed by Code Section 401(a)(17) , (iii) without the restrictions or the limitations imposed by Code Sections 415(c) or 415(e) , and (iv) as if he made Pretax Contributions and After - Tax Contributions (within the meaning of the Retirement Savings Plan) at the highest percentage of Base Compensation that would receive matching contributions each pay period under the Retirement Savings Plan for such year of participation; and
(B) is the maximum level of matching contribution that can be allocated to the Participant under the Retirement Savings Plan for such year of participation , without regard to the actual matching contributions allocated to such participant .
(2) " Theoretical earnings" shall be the income, gains and losses which would have been credited on a Participant's account balance if such account were invested in the Company Stock Fund under the Retirement Savings Plan.
(d) Benefits for Class A Executives - In the case of a Participant who is a Class A Executive, Subsections 3.01(b) and 3.01(c) shall be applied by substituting the term, " Bonus Compensation" for the term, " Base Compensation" .
(e) Prior Benefit - With respect to a Participant described in Section 3.01(b) who became a Participant in the Plan before April 1, 1997, in no event shall such Participant's benefits under this Section 3.01 be less than his benefits accrued as of March 31, 1997 under the Plan as in effect on that date.
(a) In General - Except as otherwise provided in this Section 3.02, a Participant's right to the benefits accrued hereunder for such Participant shall vest in accordance with the following vesting schedule:
Vesting Years of Service
Vested Percentage
Less than 5
0%
5 or more
100%
(b) Accelerated Vesting Upon Death, Disability, or Change of Control - If the Participant's employment with the Employer is terminated as a result of death, Disability, or Change of Control (irrespective of whether such termination is initiated by the Participant or the Employer and without regard to the reason therefor), all benefits accrued hereunder for the Participant shall become fully vested and shall be paid in accordance with Subsection 3.04( c ).
(c) Termination for Cause. Except as provided in Subsection 3.02(b), if the termination of a Participant's employment with the Employer is as a result of or caused by the Participant's theft or embezzlement from the Employer , the disclosure by the Participant of confidential information of the Employer , or the Participant's stealing trade secrets or intellectual property owned by the Employer , then the benefits of such Participant hereunder, to the extent not yet received, shall become null and void effective as of the date of the occurrence of the event which results in the Participant ceasing to be an employee of the Employer and any purported claim for benefits by or on behalf of said Participant following such date shall be of no effect.
(d) Forfeiture of Benefits. If an Employee terminates employment with the Employer , the benefits accrued hereunder which are not vested in accordance with this Section 3.02 shall be forfeited as of the date of such termination.
(a) Transfer to Nonparticipating Affiliated Company - The benefits of a Participant who transfers to an Affiliated Company that has been designated as ineligible to participate in the Plan shall be determined under Section 3.01 by taking into consideration only : (i) the Participant's Base Compensation or Bonus Compensation for services performed for the Employer, and (ii) the Participant's years of service with the Employer for purposes of determining accrual of benefits. Such Participant shall continue as a Participant until the occurrence of his death, Disability, Change of Control, or other termination of employment with the Employer .
(b) Transfer from Nonparticipating Affiliated Company - The benefits of a Participant who was previously employed by an Affiliated Company that did not participate in the Plan immediately before his employment with the Employer shall be determined under Section 3.01 as if the Participant's employment with the non-participating Affiliated Company was performed for the Employer, except that such Participant's Base Compensation and Bonus Compensation shall not include any bonuses paid by the Affiliated Company .
(a) Form of Payment - With respect to the Supplemental Matching Contribution, payment shall be made in a lump sum. With respect to the Supplemental Pension Benefit, within 30 days of the date an Employee is designated as a Participant in the Plan, such Participant shall make a written election, in the form approved by the Committee (or its delegatee) , as to the form of payment from the following alternatives:
- |
Lump sum |
- |
Single life annuity |
- |
50% joint and survivor annuity |
- |
100% joint and survivor annuity |
If a Participant fails to make a timely election as provided herein, such Participant's benefit under the Plan shall be paid in a single lump sum payment . Any optional form of benefit payable under this Plan shall be the actuarial equivalent (within the meaning of the Pension Plan) of the benefit, expressed in the normal form of benefit, otherwise payable under this Plan. If there is no Pension Plan (or its successor), the actuarial factors to be used will be those actuarial factors as are selected by the actuarial firm that last serviced the Pension Plan prior to its termination or merger (or if it is not feasible to retain such actuarial firm, such nationally recognized firm of actuaries as the Committee may select) , as being then appropriate had the Pension Plan remained in existence at its last level of benefits and with its last participant census.
(b) Time of Payment of Benefits Upon Separation from Service - Except as otherwise provided in Sections 3.04(c) and 3.04(d), the benefits to which a Participant or his Beneficiary are entitled under this Plan shall be paid (or, in the case of an annuity, shall begin to be paid) on or within sixty days following the later of (1) the earliest date on which the Participant experiences a Separation from Service or, (2) if the Participant is a Specified Employee on the date of his Separation from Service, the first day of the seventh month following the Participant's Separation from Service.
(c) Time of Payment of Benefits Upon Death or Disability - If the Participant's employment with the Employer is terminated as a result of death or Disability , all benefits accrued hereunder for the Participant shall be paid to the Participant or his Beneficiary, as the case may be, in the form designated under Section 3.04(a) not later than sixty days after his death or Disability.
( d ) No Company Stock Distributable - In no event shall a Participant or Beneficiary receive the benefits to which he is entitled under this Plan in the form of Company Stock (as defined in the Retirement Savings Plan).
( e ) Spousal Rights - Except as described in Section 3.07, nothing contained in this Plan is intended to give or shall give any spouse or former spouse of a Participant or any other person any right to benefits under the Plan by virtue of Code Sections 401(a)(11) or 417 or ERISA Section 205 (relating to qualified preretirement survivor annuities and qualified joint and survivor annuities) or Code Section 401(a)(13)(B) or 414(p) or ERISA Section 206(d)(3) (relating to qualified domestic orders).
(f) Payment Schedule. Notwithstanding anything to the contrary in the Plan, to the extent required to comply with Code Section 409A(a)(2)(B), (i) if the Participant's termination of employment does not constitute a Separation from Service, any taxable payment or benefit which becomes due under this Plan as a result of such termination of employment shall be deferred to the later of (1) the earliest date on which the Participant experiences a Separation from Service or, (2) if the Participant is a Specified Employee on the date of his Separation from Service, the first day of the seventh month following the Participant's Separation from Service. Any amounts deferred under this Section (f) shall bear interest from the date originally scheduled to be paid through and including the date of actual payment at the lesser of: (x) the prime rate and (y) 120% of the applicable federal long-term rate (as prescribed under Code Section 1274(d)) per annum, compounded quarterly.
3.05 Taxes - Notwithstanding the foregoing, benefits payable hereunder shall be subject to all applicable federal, state and local taxes which are required to be paid or withheld by the Employer. To the extent any amount accrued or credited hereunder is treated as "wages" for FICA or FUTA tax purposes, as determined by the Employer, the Employer shall require that the Participant either (i) timely pay such taxes in cash by separate check to his Employer, or (ii) make other arrangements satisfactory to such Employer (e.g., additional withholding from other wage payments) for the payment of such taxes. To the extent a Participant fails to pay or provide for such taxes as required, the Committee may suspend the Participant's participation in the Plan or reduce benefits accrued hereunder.
3.06 Offset for Obligations to Employer - Subject to Section 3.05, if, at such time as a Participant or his Beneficiary becomes entitled to benefit payments hereunder, the Participant has any debt , obligation, or other liability representing an amount owing to the Employer or its affiliates , the Employer may offset the amount owing it or its affiliates against the amount of benefits otherwise distributable hereunder notwithstanding any provision of this Plan to the contrary.
3.07 Distributions under Domestic Relations Orders - Nothing contained in this Plan prevents the Employer, in accordance with the direction of EBPAC (as defined in the Pension Plan) (or its delegatee), from complying with the provisions of a judgment, decree, or order (including approval of a property settlement agreement ) resulting from a divorce, legal separation, annulment or change in legal custody that assigns to a spouse, former spouse, child or other dependent of a Participant (an " Alternate Payee" ) the right to receive all or a portion of the vested benefits of a Participant under the Plan in a form of payment permitted under the terms of the Plan (a " Domestic Relations Order" ). The Employer shall make any payments required under this Section 3.07 by separate checks to each Alternate Payee, unless otherwise explicitly provided in the Domestic Relations Order.
Distribution to an Alternate Payee under a Domestic Relations Order is permitted at any time, irrespective of whether the Participant is currently entitled to a distribution of his vested benefits under the Plan. A distribution to an Alternate Payee prior to the time the Participant is entitled to a distribution of his vested benefits under the Plan is available only if the Domestic Relations Order explicitly requires distribution at that time. Notwithstanding the foregoing, nothing in this Section 3.07 provides a Participant the right to receive a distribution of his vested benefits at a time not otherwise permitted under the terms of the Plan , nor does it permit the Alternate Payee to receive a form of payment not otherwise permitted under the Plan.
Within a reasonable period of time after receiving the Domestic Relations Order, EBPA C will determine whether such order complies with the terms of the Plan and will notify the Participant and each Alternate Payee of its determination. If any portion of the Participant 's vested benefit is payable during the period EBPAC (or its delegatee) is making such determination, EBPAC shall make a separate accounting of the amounts payable.
4.01 Administration - The Committee (or its delegatee) shall administer and interpret this Plan in a manner consistent with Code Section 409A and in accordance with the provisions of the Plan and in its sole and absolute discretion. Any determination or decision by the Committee (or its delegatee) shall be conclusive and binding on all persons who at any time have, have had, or claim to have any interest whatsoever under this Plan.
4.02 Liability of Committee or EBPAC ; Indemnification - To the full extent permitted by law, no member of the Committee (or its delegatee) or EBPAC (or its delegatee) shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan unless attributable to his own gross negligence or willful misconduct. The Employer shall indemnify the members of the Committee (or its delegatee) and EBPAC (or its delegatee) against any and all claims, losses, damages, expenses, including any counsel fees and costs, incurred by them, and any liability, including any amounts paid in settlement with their approval, arising from their action or failure to act, except when the same is judicially determined to be attributable to their gross negligence or willful misconduct . Each affected member of the Committee shall promptly notify the Employer of any claim, action or proceeding for which he may seek indemnification. The indemnification of Committee members provided for in this Section shall survive the resignation or removal of the Committee member and the termination of the Plan.
4.03 Determination of Benefits -
(a) Claim - A person who believes that he is being denied a benefit to which he is entitled under the Plan (hereinafter referred to as a "Claimant") may file a written request for such benefit with EBPAC (or its delegatee), setting forth his claim. The request must be addressed to EBPAC (or its delegatee) at its then principal place of business.
(b) Claim Decision - Upon receipt of a claim, EBPAC (or its delegatee) shall advise the Claimant that a reply will be forthcoming within 90 days and shall, in fact, deliver such reply within such period. EBPAC (or its delegatee) may, however, extend the reply period for an additional 90 days for reasonable cause.
If the claim is denied in whole or in part, EBPAC (or its delegatee) shall adopt a written opinion, using language calculated to be understood by the Claimant, setting forth (i) the specific reason or reasons for such denial, (ii) the specific references to pertinent provisions of the Plan on which such denial is based, (iii) a description of any additional material or information necessary for the Claimant to perfect his claim and an explanation why such material or such information is necessary, (iv) appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review, and (v) the time limits for requesting a review as described in Subsection 4.03(c) and for review as described in Subsection 4.03(d).
(c) Request for Review - Within 60 days after the receipt by the Claimant of the written opinion described in Subsection 4.03(b), the Claimant may request in writing that the Committee (or its delegatee) review the initial determination. Such request must be addressed to the Committee (or its delegatee), at its then principal place of business. The Claimant or his duly authorized representative may, but need not, review the pertinent documents and submit issues and comments in writing for consideration by the Committee (or its delegatee). If the Claimant does not request a review of EBPAC's (or its delegatee's) determination within such 60 day period, he shall be barred and estopped from challenging EBPAC's (or its delegatee's) determination.
(d) Review of Decision - Within 60 days after the Committee's (or its delegatee's) receipt of a request for review, the Committee (or its delegatee) will review the initial determination. After considering all materials presented by the Claimant, the Committee (or its delegatee) will render a written opinion, written in a manner calculated to be understood by the Claimant, setting forth the specific reasons for the decision and containing specific references to the pertinent provisions of the Plan on which the decision is based. If special circumstances require that the 60 day time period be extended, the Committee (or its delegatee) will so notify the Claimant and the Committee (or its delegatee) will render the decision as soon as possible, but no later than 120 days after receipt of the request for review
4.04 Payment Due an Incompetent - If EBPAC (or its delegatee) receives evidence that the Participant or Beneficiary entitled to receive any payment under the Plan is physically or mentally incompetent to receive such payment, EBPAC (or its delegatee) may, in its sole discretion, direct the payment to any other person or trust which has been legally appointed by the courts. Such payment shall completely discharge the Employer from all liability with respect to such benefit.
4.05 Liability for Payment; Expenses - Each Employer shall be liable for the payment of benefits which are payable hereunder to its Employees. The expenses of administering the Plan shall be paid by the Employers, as directed by the Company.
ARTICLE V
AMENDMENT AND TERMINATION
(a) In General Subject to Code Section 409A, and except to the extent otherwise reserved to the Committee, the Chief Executive Officer, the President , or the Executive Vice President, Human Resources of the Company (the "Corporate Officers") shall have the right to amend this Plan at any time and from time to time, including a retroactive amendment. The Committee expressly reserves the right to amend the definitions of: Base Compensation, Board, Bonus Compensation, Change of Control, Class A Executive, Committee, Employee, Employer, and Participant. The Committee also expressly reserves the right to amend Sections 2.01, 3.01, 3.02, 3.04( c ), 3.06, 5.01, 5.02, 5.03, and 6.02 hereof and shall have the right to amend any such section or sections at any time or from time to time, including a retroactive amendment. Any such amendment shall become effective upon the date stated therein, and shall be binding on the Participant and his Beneficiary, except as otherwise provided in such amendment or this Section 5.01.
(b) Amendment Affecting Accrued Benefit - No amendment to the Plan (including a change in the actuarial basis for determining optional or early retirement benefits) shall be effective to the extent that it has the effect of decreasing a Participant's benefits accrued under the Plan as of the date of such amendment, and no amendment may suspend the crediting of theoretical earnings (described in Subsection 3.01(c)(2)) on the balance of a Participant's Supplemental Matching Contribution Account (as described in Subsection 3.01(c)), until the entire balance of such account has been distributed, in either case, without the prior written consent of the affected Participant. Notwithstanding the foregoing, an amendment required to effect compliance with Section 409A of the Code (including an amendment that retroactively amends the time or payment schedule applicable to a payment) may decrease a Participant's accrued benefit, but such amendment shall be effected in a manner that does not retroactively decrease the actuarial present value of the Participant's accrued benefit.
(c) Amendment of Vesting Schedule - If the vesting provisions of the Plan are amended in any way that directly or indirectly affects the computation of a Participant's vested benefits accrued under the Plan, each Participant may elect to have his vested benefits accrued under the Plan computed without regard to such amendment, except that no such election shall be required for any Participant whose vested percentage under the Plan, as amended, cannot at any time be less than such Participant's vested percentage determined without regard to such amendment.
5.02 Termination or Merger of the Plan - The Company has established this Plan with the bona fide intention and expectation that from year-to-year it will deem it advisable to continue it in effect. However, the Committee, in its sole discretion, reserves the right to terminate the Plan in its entirety at any time. In the event this Plan is terminated, the rights of all affected Participants to benefits accrued under the Plan as of the date of such termination shall be immediately vested, subject to Subsection 3.02(c). No such termination may adversely affect any Participant's accrued benefits as of the date of such termination and no such termination may suspend the crediting of theoretical earning (as described in Subsection 3.01(c)(2)) on the balance of a Participant's Supplemental Matching Contribution Account (as described in Subsection 3.01(c)), until the entire balance of such account has been distributed.
In the event of a merger or consolidation of this Plan with any other plan, each Participant's benefits under the Plan immediately after such merger or consolidation shall be equal to or greater than the accrued benefits the Participant would have received had the Plan terminated immediately before the merger or consolidation.
5.03 Supplements
-
In adopting the Plan or at any time thereafter, an Employer may adopt a Supplement which modifies or adds to the Plan. Any Supplement shall be effective only if approved by a Corporate Officer, and the Committee if, and to the extent
,
that
,
such Supplement
affects an executive officer's benefits or
modifies a provision of a section enumerated in Section 5.01
(a)
which is amendable only by the Committee. Upon its effective date, such Supplement shall be deemed incorporated by reference into the Plan as adopted by such Employer
and shall be attached hereto at Appendix B
. In the event of any discrepancy between a Supplement and the provisions of the Plan, the provisions of the Supplement shall govern.
5.04 Withdrawal by Employer - Any Employer (other than the Company) may elect to withdraw from the Plan and such withdrawal shall constitute a termination of the Plan as to it. Upon such withdrawal, such terminating Employer shall continue to be an Employer for the purposes hereof as to Participants or Beneficiaries to whom it owes obligations hereunder, and such termination shall be subject to the limitations and other conditions described in Section 5.02.
6.01 No Trust Created - Nothing contained in this Plan, and no action taken pursuant to its provisions by the Employer shall create, or be construed to create, a trust of any kind, or a fiduciary relationship between the Employer and the Participants or their Beneficiaries .
6.02 Funding - The Employer is not required to and shall not fund (within the meaning of the Federal tax laws) this Plan. The benefits payable under this Plan to Participants or their Beneficiaries may be paid from the general assets of the Employer or from such other assets earmarked, deposited, contributed to a trust, or otherwise set aside to fund benefits under this Plan. It is intended that an Employer's obligation under this Plan be an unfunded and unsecured promise to pay money in the future. Any funds earmarked, deposited, contributed to a trust, or otherwise set aside by the Employer to assist it in satisfying its obligations under this Plan shall be subject to the claims of general creditors of the Employer. The Participants' (or their Beneficiaries') rights to benefits under this Plan which are payable by the Employer shall be no greater than the right of any unsecured general creditor of the Employer, and the Participants (and their Beneficiaries) shall not have any security interest in any assets (including, but not limited to, assets earmarked, deposited, contributed to a trust, or otherwise set aside to fund benefits provided under the Plan) of the Employer.
6.03 Top Hat Plan - It is the Employer's intention that this Plan be construed as an unfunded, nonqualified deferred compensation plan maintained for a select group of management or highly compensated employees within the meaning of Section 201(2) of ERISA. With respect to amounts received under the Plan after December 31, 1995, the Plan shall be treated as two separate plans, one maintained solely for the purpose of providing retirement benefits for Employees in excess of the limitations imposed by Sections 401(a)(17), 401(m), or 415 of the Code or any other limitation on contributions or benefits in the Code on plans to which any of the sections described in 4 U.S.C. Section 114(b)(1)(I)(ii) apply (i.e., the source tax plan), and the other providing any other benefits provided by the Plan (i.e., the non-source tax plan).
6.04 Effect on Benefits under other Plans - Any benefits payable under this Plan shall not be considered salary or other compensation to the Participant for purposes of computing benefits to which he may be entitled under any other employee benefit plan established or maintained by the Employer , except to the extent provided in such other employee benefit plan.
6.05 Spendthrift Clause - Except as provided in Sections 3.05, 3.06 or 3.07, no right, title or interest of any kind in the Plan shall be transferable or assignable by a Participant or Beneficiary or be subject to alienation, anticipation, encumbrance, garnishment, attachment, execution or levy of any kind, whether voluntary or involuntary nor subject to the debts, contracts, liabilities, engagements, or torts of a Participant or Beneficiary. Any attempt to alienate, sell, transfer, assign, pledge, garnish, attach or otherwise subject to legal or equitable process or encumber or dispose of any interest in the Plan shall be void, except as provided by Sections 3.05, 3.06 or 3.07.
6.06 Rights Against the Employer - The establishment of this Plan shall not be construed as giving to a Participant, Beneficiary, employee or any person whomsoever, any legal, equitable or other rights against an Employer , or their officers, directors, agents or shareholders, or as giving to the Participant, Beneficiary, employee or any person whomsoever any equity or other interest in the assets, business or shares of the Company or its Affiliated Companies ' stock.
6.07 No Contract of Employment - Nothing contained in this Plan shall be construed to be a contract of employment or as conferring upon a Participant the right to continue to be employed by the Employer in his present capacity or in any capacity. The Participant shall be subject to discharge to the same extent he would have been if this Plan had never been adopted.
6.08 Indemnity Upon Change of Control - If upon a Change of Control it becomes necessary for a Participant (or his Beneficiary) to institute a claim, by litigation or otherwise, to enforce his rights under this Plan, the Company (and its successors and assigns) shall indemnify such Participant (or his Beneficiary) from and against all costs and expenses, including legal fees, incurred by him in instituting and maintaining such claim. Such indemnity payments shall be made no later than the last day of the calendar year following the calendar year in which such costs and expenses are incurred by the Participant or Beneficiary, as applicable.
6.09 Successors - This Plan shall be binding upon the Company and its successors and assigns, and Participants, their Beneficiaries, successors, heirs, executors, administrators and beneficiaries.
6.10 Severability - In the event that any provision of this Plan shall be declared illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions of this Plan but shall be fully severable and this Plan shall be construed and enforced as if said illegal or invalid provision had never been inserted herein.
6.11 Governing Law - The validity and effect of this Plan and the rights and obligations of all persons affected hereby shall be construed and determined in accordance with the laws of the State of Florida , unless superseded by federal law.
6.12 Construction - The article and section headings and numbers are included only for convenience of reference and are not to be taken as limiting or extending the meaning of any of the terms and provisions of this Plan. Whenever appropriate, words used in the singular shall include the plural or the plural may be read as the singular. When used herein, the masculine gender includes the feminine gender.
6.13 Compliance with Code Section 409A - Notwithstanding anything else to the contrary contained herein, this Plan is intended to comply with the requirements of Code Section 409A and shall be construed and administered in such a manner as shall be necessary to effect compliance with Code Section 409A.
Exhibit 10(c)
AMENDED AND RESTATED
SUPPLEMENT
TO THE
FPL GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AS IT APPLIES TO
LEWIS HAY, III
Section 1. Adoption of Supplement; Relationship with Provisions of the Plan . Section 5.03 of the FPL Group, Inc. Supplemental Executive Retirement Plan as amended and restated effective January 1, 2005 (the " Plan ") authorizes an Employer, with the approval of the Committee, to adopt supplements that modify or add to the terms of the Plan. Pursuant to this authority the Board of Directors of FPL Group, Inc., with the approval of the Committee, adopts this Amended and Restated Supplement to the Plan (the " Supplement "), which is incorporated by this reference and forms a part of the Plan. In the event of any ambiguity between the provisions of this Supplement and those of the Plan, the provisions of the Plan shall supersede the provisions of this Supplement to the extent of such ambiguity. This Supplement, which is a restatement of the predecessor Supplement with Lewis Hay, III dated March 22, 2002 (" Prior Supplement "), provides that benefits earned under the Prior Supplement are grandfathered and not subject to Code Section 409A, while benefits earned under the Supplement are subject to Code Section 409A, as set forth in the Plan.
Section 2 . Applicability and Effective Date of this Supplement . The provisions of this Supplement shall only apply to Lewis Hay, III (the " Participant "). This Supplement shall be effective as of January 1, 2005 (the " Effective Date ").
Section 3. Definitions . All of the capitalized terms used in this Supplement shall have the meanings assigned to them in the Plan, unless otherwise explicitly defined in this Supplement. The following terms when used in this Supplement shall have the following meanings:
(a) " Accrual Fraction " shall mean a fraction (not exceeding 1), the numerator of which is the Participant's years of service for benefit accrual purposes as of any Date of Determination, as determined under the terms of the Pension Plan, and the denominator of which is 15.
(b) " Date of Determination " shall mean the date on which the Participant's benefit is computed under the terms of this Supplement.
(c) " Early Retirement Age " shall mean the later of (i) the date the Participant attains age 55 or (ii) the date he completes at least ten (10) years of service for benefit accrual purposes, as determined under the terms of the Pension Plan.
(d) " Early Retirement Date " shall mean the first day of the month coincident with or immediately following the date the Participant's employment with the Employer is terminated for any reason (other than as a result of Disability or death), which termination must occur on or after attaining Early Retirement Age.
(e) " Final Average Pay " shall mean the average of the Participant's Bonus Compensation for the three (3) consecutive calendar year periods out of the four (4) consecutive calendar year periods ending with the calendar year in which the Date of Determination occurs that results in the highest average.
(f) " Minimum Benefit " shall mean the annual pension amount, payable to the Participant in the Normal Form of Benefit and commencing as of the Date of Determination, equal to 50% of the Participant's Final Average Pay. In determining this benefit, it is intended that the Minimum Benefit not be prorated by applying the Accrual Fraction.
(g) " Normal Form of Benefit " shall mean a joint and 50% survivor annuity if the Participant is married at the time benefits under this Supplement first commence, and a single life annuity if the Participant is unmarried as of such time.
(h) " Normal Retirement Age " shall mean the date the Participant attains age 65.
(i) " Normal Retirement Date " shall mean the first day of the month coincident with or immediately following Normal Retirement Age.
(j) " Other Pension Benefits " shall mean the sum of the annual amounts payable to the Participant as of the Date of Determination under the Pension Plan and the Supplemental Pension Benefit, both expressed in the Normal Form of Benefit.
(k) " Total Benefit " shall mean the annual pension amount, payable to the Participant in the Normal Form of Benefit and commencing as of the Date of Determination, equal to 65% of the Participant's Final Average Pay, multiplied by the Accrual Fraction as of such Date of Determination. In no event, however, shall the Total Benefit be less than the Minimum Benefit as of such Date of Determination.
Section 4. Benefits .
(a) Normal Retirement Benefit . If the Participant's employment with the Employer is terminated for any reason (other than as a result of his death) upon attaining Normal Retirement Age, he shall be entitled to a normal retirement benefit. The normal retirement benefit shall be equal to the difference, if any, between (i) the Participant's Total Benefit, and (ii) the Participant's Other Pension Benefits.
(b) Early Retirement Benefit . If the Participant's employment with the Employer is terminated for any reason (other than as a result of Disability or death) on or after attaining Early Retirement Age, but prior to his Normal Retirement Age, he shall be entitled to an early retirement benefit. The early retirement benefit shall be equal to the normal retirement benefit set forth in Subsection (a), except that the Participant's Total Benefit shall be actuarially reduced for early distribution in accordance with the provisions of Subsection (h).
(c) Late Retirement Benefit . If the Participant's employment with the Employer is terminated for any reason after attaining Normal Retirement Age, he shall be entitled to a late retirement benefit. The late retirement benefit shall be equal to the greater of (i) the normal retirement benefit set forth in Subsection (a), except that the Participant's Total Benefit shall be adjusted to reflect an increase in the Participant's Final Average Pay after his Normal Retirement Date, or (ii) the normal retirement benefit set forth in Subsection (a), determined as of the Normal Retirement Date, except that the Participant's Total Benefit shall be actuarially increased for late distribution in accordance with provisions of Subsection (h).
(d) Termination of Employment Before Early Retirement Age . If the Participant's employment with the Employer is terminated for any reason (other than as a result of Disability or death) prior to attaining Early Retirement Age and he is vested in accordance with Section 5 hereof in the benefits provided under this Supplement, the Participant shall be entitled to a vested benefit. The vested benefit shall be equal to the normal retirement benefit set forth in Subsection (a), except that the Participant's Total Benefit shall be actuarially reduced for early distribution in accordance with the provisions of Subsection (h). The vested benefit shall commence as of the first day of the month following the date of termination of employment.
(e) Pre-Retirement Disability Benefit . If, prior to attaining Normal Retirement Age, the Participant's employment with the Employer is terminated on account of Disability, he shall be entitled to a pre-retirement disability benefit. The pre-retirement disability benefit shall be equal to the normal retirement benefit set forth in Subsection (a), except that the Participant's Total Benefit shall be actuarially reduced for early distribution in accordance with the provisions of Subsection (h). The pre-retirement disability benefit shall commence as of the first day of the month following the date of termination of employment.
(f) Death Benefit . If the Participant dies prior to commencement of a normal retirement benefit, early retirement benefit, late retirement benefit, deferred benefit or pre-retirement disability benefit, the Participant's Beneficiary will be entitled to a death benefit. The death benefit shall be equal to the normal retirement benefit set forth in Subsection (a), except that the Participant's Total Benefit shall be actuarially reduced for early distribution in accordance with the provisions of Subsection (h). If the Participant dies upon attaining his Normal Retirement Age, the death benefit shall be equal to the normal retirement benefit set forth in Subsection (a). If the Participant dies after attaining his Normal Retirement Age, the death benefit shall be equal to the late retirement benefit set forth in Subsection (c). Such benefit shall commence as of the first day of the month following the date of the Participant's death.
(g) No Duplication of Benefits . Notwithstanding the foregoing provisions of this Section 4, as between the Plan and this Supplement, there shall be no duplication of benefits.
(h) Actuarial Adjustments . To determine an actuarial equivalent benefit under this Supplement (other than the determination of Other Pension Benefits as described in Section 3(j)), the following interest and mortality assumptions shall be used:
(1) Adjustments Where Benefit Begins Before Normal Retirement Age.
(A) If distribution of the Participant's benefit under this Supplement begins before the Participant's Normal Retirement Age but on or after the Participant's attainment of age 55, then the benefit under this Supplement shall be actuarially reduced in accordance with Section 3.04(a) of the Plan.
(B) If distribution of a Participant's benefit under this Supplement begins before the date the Participant attains age 55, then the benefit under this Supplement shall be reduced by (i) first reducing the benefit to the amount of benefit payable at age 55 in accordance with Section 4(h)(1)(A) above, and (ii) then further reducing that benefit amount by 3% per year for each year by which the Participant's benefit commencement date precedes age 55. Such reductions shall be interpolated to reflect the Participant's age to the nearest month.
(C) Any decrease in the benefit determined in accordance with this Subsection (h)(1) shall not reflect any mortality decrement to the extent the provisions of this Supplement do not forfeit benefits upon the death of the Participant. If any benefits are forfeited upon death, the full mortality decrement shall be taken into account.
(2) Adjustments Where Benefit Begins After Normal Retirement Age . If distribution of the Participant's benefit under this Supplement begins after the Participant's Normal Retirement Age, then the late retirement benefit described in Section 4(c)(ii) of this Supplement shall be actuarially increased in accordance with Section 3.04(a) of the Plan. To the extent that benefits will not be forfeited upon the death of the Participant, mortality between a Participant's Normal Retirement Age and the age at which benefits commence shall be ignored.
Section 5. Vesting of Benefits . The benefits to be provided under this Supplement shall vest in accordance with Section 3.02 of the Plan.
Section 6. Right to Amend or Terminate this Supplement . The powers reserved to Corporate Officers and the Committee with respect to amendment and termination of the Plan (i.e., Article V of the Plan) shall apply with equal force to this Supplement.
Section 7. Prior Supplement Benefit Grandfathered from Code Section 409A . The benefit provided under this Supplement shall be subject in all respects to the provisions of the Plan as amended to comply with Code Section 409A. The vested benefit accrued as of December 31, 2004 under the Prior Supplement shall be grandfathered from and not subject to Code Section 409A. Such Prior Supplement benefit shall be calculated, solely for purposes of determining the amount of the benefit subject to such grandfathering, as if the Participant had separated from service as of December 31, 2004. For the avoidance of doubt, nothing in this Section 7 shall affect the amount of the benefits to which the Participant is entitled pursuant to this Supplement or the Prior Supplement.
IN WITNESS WHEREOF, the Board of Directors of FPL Group, Inc. and the Committee have caused this instrument to be executed this 17 day of December, 2008, by their duly authorized officer, effective as of the Effective Date.
FPL GROUP, INC.
|
|
By: |
/s/ JAMES W. POPPELL |
|
|
Executive Vice President,
|
FPL
GROUP,
INC.
DEFERRED
COMPENSATION
PLAN
Effective January 1, 2005
FPL GROUP, INC.
DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
Page |
||
ARTICLE I DEFINITIONS |
2 |
|
1.01 |
Account or Accounts |
2 |
1.02 |
Administrator |
2 |
1.03 |
Award Agreement |
2 |
1.04 |
Base Salary |
2 |
1.05 |
Beneficiary Designation Form |
2 |
1.06 |
Board |
2 |
1.07 |
Bonus |
2 |
1.08 |
Change of Control |
3 |
1.09 |
Change of Control Event |
5 |
1.10 |
Code |
5 |
1.11 |
Committee |
5 |
1.12 |
Common Stock |
5 |
1.13 |
Company |
5 |
1.14 |
Compensation |
5 |
1.15 |
Deferral Election Form |
6 |
1.16 |
Director's Fees |
6 |
1.17 |
Disability |
6 |
1.18 |
Distribution Election Form |
6 |
1.19 |
Distribution Starting Date |
6 |
1.20 |
Election Period |
6 |
1.21 |
Employee |
7 |
1.22 |
Employer |
7 |
1.23 |
ERISA |
7 |
1.24 |
Exchange Act |
7 |
1.25 |
Investment Account |
7 |
1.26 |
Investment Election Form |
8 |
1.27 |
LTIP |
8 |
1.28 |
LTIP Award |
8 |
1.29 |
Market Value Per Share |
8 |
1.30 |
Non-Employee Director |
8 |
1.31 |
Officer |
8 |
1.32 |
Participant |
8 |
1.33 |
Phantom Stock Account |
8 |
1.34 |
Phantom Shares |
8 |
1.35 |
Plan |
9 |
1.36 |
Plan Year |
9 |
1.37 |
Section 16 Committee |
9 |
1.38 |
Section 16 Reporting Person |
9 |
1.39 |
Service Recipient |
9 |
1.40 |
Subsidiary |
9 |
ARTICLE II ELIGIBILITY |
9 |
|
2.01 |
Eligibility to Participate in the Plan |
9 |
ARTICLE III DEFERRED COMPENSATION BENEFITS |
9 |
|
3.01 |
Deferral Election |
9 |
3.02 |
Accounts and Investment Allocation |
10 |
ARTICLE IV DISTRIBUTIONS |
13 |
|
4.01 |
Manner of Distribution |
13 |
4.02 |
Form of Distribution |
13 |
4.03 |
Unforeseeable Emergency |
14 |
4.04 |
Distribution Upon a Termination of Employment following a Change of Control |
14 |
4.05 |
Beneficiary Designation |
14 |
4.06 |
Taxes |
15 |
4.07 |
Distributions under Domestic Relations Orders |
15 |
4.08 |
Distribution to Comply with Federal Conflict of Interest Requirements |
15 |
ARTICLE V ADMINISTRATION |
15 |
|
5.01 |
Administration |
15 |
5.02 |
Liability of Committee and Administrator; Indemnification |
16 |
5.03 |
Determination of Benefits |
16 |
5.04 |
Expenses |
18 |
5.05 |
Compliance with Securities Laws |
18 |
5.06 |
Compliance with Code Section 409A |
18 |
ARTICLE VI MISCELLANEOUS |
18 |
|
6.01 |
No Trust Created |
18 |
6.02 |
No Requirement to Fund |
18 |
6.03 |
Benefits Payable from General Assets |
18 |
6.04 |
Successors |
19 |
6.05 |
No Contract of Employment |
19 |
6.06 |
Amendment or Termination of Plan |
19 |
6.07 |
Top Hat Plan |
20 |
6.08 |
Governing Law |
20 |
6.09 |
Severability |
20 |
6.10 |
Construction |
21 |
6.11 |
Merger or Consolidation or Sale of Assets of Employer |
21 |
6.12 |
Transfer to an Affiliate of the Employer |
21 |
6.13 |
Assignment |
21 |
6.14 |
Incapacity |
21 |
6.15 |
Effect on Benefits Under Other Plans |
21 |
6.16 |
Indemnity Upon Change of Control |
22 |
6.17 |
No Rights as Shareholders |
22 |
Execution Page |
22 |
FPL
GROUP,
INC.
DEFERRED
COMPENSATION
PLAN
THIS
FPL
GROUP,
INC.
DEFERRED
COMPENSATION
PLAN (the "
Plan"
) effective as of January 1,
2005
(the "
Effective Date"
), is
a successor to
the FPL Group, Inc. Deferred Compensation Plan
effective as of January 1, 1995,
as amended and restated effective January 1,
2003
(the "
Prior
Plan"
).
WHEREAS, the officers and a select group of management or highly compensated employees of FPL Group, Inc. (the " Company" ) and its subsidiaries and affiliates (hereinafter collectively referred to as the " Employer" ) are entitled to compensation which results from or is attributable to their performance of services as officers and employees of the Employer and may be awarded bonuses and performance-related compensation pursuant to the Annual Incentive Plan, the FPL Group Long Term Incentive Plan 1985, the FPL Group, Inc. Long Term Incentive Plan 1994 and other incentive compensation plans ; and
WHEREAS, directors of the Company are entitled to fees which result from or are attributable to their performance of services as members of the Board of Directors (and committees thereof) of the Company ; and
WHEREAS, the Board of Directors of the Company adopted the Prior Plan in order to permit the officers, directors, and a select group of management or highly compensated employees of the Employer to elect to defer receipt of all or a portion of their base salary, annual incentives , incentive plan awards and/or directors' fees in accordance with the provisions of the Plan; and
WHEREAS, the Employer intends that the Plan be considered an unfunded arrangement that is maintained primarily to provide deferred compensation to members of a select group of management or highly compensated employees of the Employer, for purposes of the Employee Retirement Income Security Act of 1974, as amended (" ERISA" ) .
NOW, THEREFORE, the Company hereby freezes the Prior Plan as of December 31, 2004 and adopts the Plan effective as of January 1, 2005 for the exclusive benefit of participants and their beneficiaries on the following terms and conditions:
The following terms when used herein shall have the designated meaning unless a different meaning is plainly required by the context in which the term is used:
1.01 " Account" or " Accounts" shall mean the account or accounts established and maintained for a Participant pursuant to Article III of the Plan. A Participant' s Account shall consist of the Participant' s Investment Account and Phantom Stock Account (including the Cash Account).
1.02 " Administrator" shall mean an officer or officers of the Employer designated by the Company to administer the Plan or, until the Company otherwise designates such an officer or officers, the Executive Vice President , Human Resources (or other most senior Human Resources officer of the Company, however designated) of the Company.
1.03 "Award Agreement " shall mean an agreement executed between the Company and a Participant pursuant to the LTIP setting forth the terms and conditions applicable to such Participant' s LTIP Award.
1.04 " Base Salary" shall mean the base salary of a Participant paid by the Employer and generally designated as such , exclusive of Bonuses, LTIP Awards, Director's Fees or any other form of compensation which is not designated as Base Salary .
1.05 " Beneficiary Designation Form" shall mean the form or forms that may be approved by the Administrator from time to time for use by a Participant to designate a beneficiary or beneficiaries pursuant to Section 4.05.
1.06 " Board" shall mean the Board of Directors of the Company.
1.07 " Bonus" shall mean any bonus that the Participant is awarded pursuant to the Annual Incentive Plan and such other payments awarded under such other incentive compensation plans that are designated by the Administrator as eligible for deferral under this Plan.
1.08 " Change of Control" shall mean:
( a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (x) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that the following acquisitions (collectively, the "Excluded Acquisitions") shall not constitute a Change of Control (it being understood that shares acquired in an Excluded Acquisition may nevertheless be considered in determining whether any subsequent acquisition by such individual, entity or group (other than an Excluded Acquisition) constitutes a Change of Control): (i) any acquisition directly from the Company or any Subsidiary; (ii) any acquisition by the Company or any Subsidiary; (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary; (iv) any acquisition by an underwriter temporarily holding Company securities pursuant to an offering of such securities; (v) any acquisition in connection with which, pursuant to Rule 13d-1 promulgated pursuant to the Exchange Act, the individual, entity or group is permitted to, and actually does, report its beneficial ownership on Schedule 13G (or any successor Schedule); provided that, if any such individual, entity or group subsequently becomes required to or does report its beneficial ownership on Schedule 13D (or any successor Schedule), then, for purposes of this paragraph, such individual, entity or group shall be deemed to have first acquired, on the first date on which such individual, entity or group becomes required to or does so report, beneficial ownership of all of the Outstanding Company Common Stock and/or Outstanding Company Voting Securities beneficially owned by it on such date; or (vi) any acquisition in connection with a Business Combination (as hereinafter defined) which, pursuant to subsection ( 3 ) below, does not constitute a Change of Control; or
( b ) Individuals who, as of the Restated Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to such date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, entity or group other than the Board; or
(c ) Consummation of a reorganization, merger, consolidation or other business combination (any of the foregoing, a "Business Combination") of the Company or any Subsidiary with any other corporation, in any case with respect to which:
(i) the Outstanding Company Voting Securities outstanding immediately prior to such Business Combination do not, immediately following such Business Combination, continue to represent (either by remaining outstanding or being converted into voting securities of the resulting or surviving entity or any ultimate parent thereof) more than 60 % of the outstanding common stock and of the then outstanding voting securities entitled to vote generally in the election of directors of the resulting or surviving entity (or any ultimate parent thereof); or
(ii) less than a majority of the members of the board of directors of the resulting or surviving entity (or any ultimate parent thereof) in such Business Combination (the "New Board") consists of individuals ("Continuing Directors") who were members of the Incumbent Board (as defined in subsection ( 2 ) above) immediately prior to consummation of such Business Combination (excluding from Continuing Directors for this purpose, however, any individual whose election or appointment to the Board was at the request, directly or indirectly, of the entity which entered into the definitive agreement with the Company or any Subsidiary providing for such Business Combination); or
(iii) in the case of a Business Combination with an unaffiliated third party as a result of which at least a majority of the New Board will initially consist of Continuing Directors, the Board determines, prior to such approval by shareholders, that there does not exist a reasonable assurance that, for at least a two-year period following consummation of such Business Combination, at least a majority of the members of the New Board will continue to consist of Continuing Directors and individuals whose election, or nomination for election by shareholders of the resulting or surviving entity (or any ultimate parent thereof) in such Business Combination, would be approved by a vote of at least a majority of the Continuing Directors and individuals whose election or nomination for election has previously been so approved;
provided, however, that prior to any such approval by shareholders, the Board may determine, in its sole discretion, that under the particular facts and circumstances, a Change of Control shall not occur until the consummation of such Business Combination; or
(d) (i) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company or (ii) consummation of a sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation with respect to which, following such sale or other disposition, more than 60 % of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities as the case may be ; provided, however, that prior to any such approval by shareholders, the Board may determine, in its sole discretion, that under the particular facts and circumstances, a Change of Control shall not occur until the consummation of such sale or other disposition .
The term "the sale or disposition by the Company of all or substantially all of the assets of the Company" shall mean a sale or other disposition transaction or series of related transactions involving assets of the Company or of any Subsidiary (including the stock of any Subsidiary) in which the value of the assets or stock being sold or otherwise disposed of (as measured by the purchase price being paid therefor or by such other method as the Board determines is appropriate in a case where there is no readily ascertainable purchase price) constitutes more than two-thirds of the fair market value of the Company (as hereinafter defined). The "fair market value of the Company" shall be the aggregate market value of the then Outstanding Company Common Stock (on a fully diluted basis) plus the aggregate market value of the Company's other outstanding equity securities. The aggregate market value of the shares of Outstanding Company Common Stock shall be determined by multiplying the number of shares of Outstanding Company Common Stock (on a fully diluted basis) outstanding on the date of the execution and delivery of a definitive agreement with respect to the transaction or series of related transactions (the "Transaction Date") by the average closing price of the shares of Outstanding Company Common Stock for the ten trading days immediately preceding the Transaction Date. The aggregate market value of any other equity securities of the Company shall be determined in a manner similar to that prescribed in the immediately preceding sentence for determining the aggregate market value of the shares of Outstanding Company Common Stock or by such other method as the Board shall determine is appropriate.
1.09 "Change of Control Event " shall mean, with respect to a Participant, a Change of Control that also constitutes: (a) a change in ownership of the Participant's Service Recipient; (b) a change in effective control of the Participant's Service Recipient; or (c) a change in the ownership of a substantial portion of the assets of the Participant's Service Recipient. The existence of a Change of Control Event shall be determined by the Administrator in accordance with Code Section 409A and the regulations thereunder.
1.10 "Code " shall mean the Internal Revenue Code of 1986, as amended from time to time.
1.11 "Committee " shall mean a committee composed of not less than two directors designated by the Board to administer the Plan; provided, however, that each member of the Committee shall be a "Non-Employee Director" within the meaning of Rule 16b-3 under the Exchange Act, an "outside director" within the meaning of Code Section 162(m)(4)(c)(i) and the regulations thereunder, and an "independent director" within the meaning of Section 303A of the New York Stock Exchange Listed Company Manual (or, in each case, any successor term or provision). The Committee may, without limitation, be the Compensation Committee of the Board or a subcommittee thereof, if such committee or subcommittee satisfies the foregoing requirements.
1.12 " Common Stock" shall mean the common stock, $.01 par value per share, of the Company , or such other securities of the Company as may be substituted for Common Stock or such other securities in the event of the occurrence of any of the events set forth in Section 3.02(b)(2)(iv) .
1.13 " Company" shall mean FPL Group, Inc.
1.14 "Compensation " shall mean Base Salary, Bonus, LTIP Award or other compensation approved for deferral by the Committee.
1.15 "Deferral Election Form " shall mean the form or forms that may be approved by the Administrator from time to time for use by a Participant to elect to defer Compensation or Director's Fees under the Plan, subject to the applicable limitations contained in the Plan.
1.16 "Director's Fees " shall mean the fees of a Participant which result from or are attributable to the performance of services by such Participant as a member of the Board of Directors (or committee thereof) of the Company, whether payable in cash or in equity.
1.17 "Disability " shall mean: (a) the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; (b) the receipt of income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Employer by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (c) any condition as a result of which a Participant is determined to be totally disabled by the Social Security Administration or Railroad Retirement Board.
1.18 " Distribution Election Form" shall mean the form or forms that may be approved by the Administrator from time to time for use by a Participant to elect a Distribution Starting Date and payment schedule pursuant to Section 4.01.
1.19 " Distribution Starting Date" shall mean:
(a) subject to subsection 1.19(b) below, (i) the first day of the first Plan Year or (ii) the first day of the first month following the earliest of the Participant's death, Disability, or other separation from service (within the meaning of Treas. Reg. Section 1.409A-1(h)) from the Employer, as elected by the Participant during the applicable Election Period; or
1.20 " Election Period" shall mean :
(a) with respect to a Participant, the period established by the Administrator during which a Participant may deliver a Deferral Election Form to the Administrator ; provided that an Election Period with respect to any Compensation will occur during the calendar year prior to the year (i) such Compensation is earned, in the case of Compensation that is earned and payable within a single calendar year and (ii) the Participant obtains a legal right to such Compensation (within the meaning of Code Section 409A), in the case of Compensation (including but not limited to an LTIP Award) to which the Participant obtains a legal right in one calendar year but which does not become vested and payable until a subsequent calendar year;
1.21 " Employee" shall mean an employee of the Employer with a Base Salary of at least one hundred and fifty thousand dollars ($150,000) , provided that such individual is among a select group of management or highly compensated employees within the meaning of ERISA Section 201(2).
1.22 " Employer" shall mean the Company and its subsidiaries and affiliates.
1.23 " ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended .
1.24 " Exchange Act" shall mean the Securities Exchange Act of 1934, as amended .
1.25 " Investment Account" shall mean a bookkeeping account established and maintained for a Participant pursuant to Sections 3.02(a) and 3.02 (b)(1).
1.26 " Investment Election Form" shall mean the form or forms that may be approved by the Administrator from time to time for use by a Participant to allocate deferred compensation , and to the extent allocated to the Participant' s Investment Account, Director' s Fees, among the investment funds selected by the Company pursuant to Section 3.02(b)(1)(ii) and/or 3.02(b)(1)(iii), as applicable.
1.27 "LTIP " shall mean the Amended and Restated FPL Group, Inc. Long Term Incentive Plan, the FPL Group, Inc. Long Term Incentive Plan 1994 or the FPL Group, Inc. Long Term Incentive Plan 1985, as applicable. .
1.28 " LTIP Award" shall mean an award granted pursuant to the terms of the LTIP, other than (a) an award of restricted stock or other equity which is actually issued in the name of the Participant on the date of grant, unless otherwise specifically approved by the Committee and (b) any award of a stock option, stock appreciation right or other equity, derivative or equity-linked instrument, however denominated, the value of which is derived exclusively from appreciation in the value of shares of Common Stock above the Market Value Per Share (or higher value specified in the terms of the award) that occurs after the date of the award.
1.29 " Market Value Per Share" shall mean the closing sales price on the relevant date for shares of Common Stock as reported in the Composite Transactions Index of the New York Stock Exchange on such date. If such date is not a trading day or no sales occur on such date, the " Market Value Per Share" means the closing price on the nearest trading date before the valuation date.
1.30 " Non-Employee Director " shall mean a member of the Board who is not an employee of the Company or any of its subsidiaries or affiliates.
1.31 " Officer" shall mean an elected or appointed officer of the Employer, provided that such individual is among a select group of management or highly compensated employees within the meaning of ERISA Section 201(2).
1.32 " Participant" shall mean a Non-Employee Director, Officer or Employee who is eligible to participate in the Plan and has elected to defer Compensation and/or Director' s Fees, as provided in Section 3.01.
1.33 " Phantom Stock Account" shall mean an account established and maintained for a Participant pursuant to Sections 3.02(a) and 3.02(b)(2).
1.34 " Phantom Shares" shall mean hypothetical shares of Common Stock.
1.35 " Plan" shall mean this FPL Group, Inc. Deferred Compensation Plan, as amended from time to time.
1.36 " Plan Year" shall mean the calendar year.
1.37 " Section 16 Committee" shall mean the committee of the Board established for the purposes of approving certain matters relating to Section 16 Reporting Persons .
1.38 " Section 16 Reporting Person" shall mean any (a) director of the Company or (b) officer of the Employer designated by the Board to be an " executive officer" for purposes of Section 16(a) of the Exchange Act .
1.39 "Service Recipient" means with respect to a Participant on any date: (a) the corporation or non-corporate entity for which the Participant is performing services on such date; (b) all corporations or non-corporate entities that are liable to the Participant for the benefits due to him under the Plan; (c) a corporation or non-corporate entity that is a majority shareholder of a corporation or non-corporate entity described in Section 1.39(a) or (b); or (d) any corporation or non-corporate entity in a chain of corporations or non-corporate entities each of which is a majority shareholder of another corporation or non-corporate entity in the chain, ending in a corporation or non-corporate entity described in Section 1.39 (a) or (b).
1.40 " Subsidiary" shall mean any corporation (other than the Company) with respect to which the Company owns, directly or indirectly, 50% or more of the total combined voting power of all classes of stock or membership or partnership interests . In addition, any other related entity may be designated by the Board as a Subsidiary, provided such entity could be considered as a Subsidiary according to generally accepted accounting principles.
2.01 Eligibility to Participate in the Plan . A Non-Employee Director, Officer or Employee shall be eligible to participate in the Plan to the extent provided herein.
ARTICLE III
DEFERRED COMPENSATION BENEFITS
(a) A Participant may irrevocably elect to defer all or a portion of his or her Compensation in a manner consistent with Code Section 409A by completing, signing, and delivering a Deferral Election Form to the Administrator during the applicable Election Period as set forth below :
(1) A Non-Employee Director may defer all or a portion of his or her Director' s Fees;
(2) An Officer may defer all or a portion of his or her Compensation ; and
(3) An Employee (other than an Officer) may defer all or a portion of his or her Bonuses, and, to the extent that the Administrator may in its sole discretion permit , all or a portion of his or her Base Salary and/or LTIP Awards.
(b) Limitation on Deferrals. Notwithstanding anything to the contrary in this Plan, the amount to be deferred under this Plan may not reduce the amount of Base Salary, Bonuses, LTIP Awards, and/or Director' s Fees which would be paid to the Participant (determined after taking the election into account) below the amount, if any, required to pay the Participant' s portion of any taxes due under Chapter 21 (Federal Insurance Contributions Act) of the Code , any other applicable employment taxes, and the amount, if any, required to be withheld for income tax purposes or any payment of premiums and/or contributions for health benefits or other benefits elected by the Participant or otherwise provided under a cafeteria plan sponsored by the Employer pursuant to Code Section 125.
3.02 Accounts and Investment Allocation .
(a) In General. An Investment Account and a Phantom Stock Account shall be established and maintained for each Participant. The Investment Account, and the Cash Account within the Phantom Stock Account, shall be measured in dollars and the Phantom Stock Account (except for the Cash Account) shall be measured in Phantom Shares (rounded to three decimal places). The Accounts shall be hypothetical in nature and shall be maintained for bookkeeping purposes only. Neither the Plan nor any of the Accounts shall hold or be required to hold any actual funds or assets.
(i) Crediting Contributions to the Investment Account. When a Participant' s Investment Account is to be credited with a deferred amount, that amount shall be credited to the Investment Account as of the close of business on the date that such amount would have otherwise been paid to the Participant.
(ii)
Crediting Earnings on the Investment Account. Subject to the limitations of Subsection (b)(1)(iii), the Administrator may permit a Participant to allocate on an Investment Election Form, the deferred amounts credited to his or her Investment Account among one or more investment funds selected by the Company. In the event a Participant fails to elect one or more investment funds on an Investment Election Form, the Participant
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s Investment Account shall be invested in a default investment fund designated by the Administrator until such time as the Participant shall submit an Investment Election Form to the Administrator. Subject to the limitations of Subsection (b)(1)(iii), a Participant may re-allocate the deferred amounts among such investment funds at any time or from time to time by submitting a new Investment Election Form to the Administrator
. Deferred amounts allocated to an investment fund shall be deemed to be invested in such investment fund and shall be adjusted each business day to reflect the hypothetical income, gain and loss, including any unrealized appreciation or depreciation on such investment fund.
(iii) Company Stock Fund. A Participant may allocate deferred amounts to an investment fund that tracks, or invests primarily in, the Common Stock of the Company (a " Company Stock Fund" ). If a Participant allocates deferred amounts to the Company Stock Fund, such amounts shall initially be credited to a stable value investment fund designated by the Administrator (the " Interim Investment Fund" ). On the immediately following date on which a cash dividend is paid to holders of Common Stock (the " Dividend Payment Date" ), all amounts credited to such Interim Investment Fund shall be transferred to the Company Stock Fund in the Participant' s Investment Account. Any request to transfer a Participant' s allocation of deferred amounts out of the Company Stock Fund will be processed on the Dividend Payment Date that immediately follows such request. Notwithstanding the foregoing, any allocation in to, or out of, the Company Stock Fund by a Section 16 Reporting Person shall require the prior approval of the Section 16 Committee.
(i) Crediting Stock-Based Contributions to the Phantom Stock Account. When a Participant' s Phantom Stock Account is to be credited for Compensation otherwise payable in shares of Common Stock, then the number of shares of Common Stock which would have otherwise been paid to the Participant shall be credited to the Participant' s Phantom Stock Account as of the date that such payment would have otherwise occurred.
(ii) Crediting Cash Dividends to the Phantom Stock Account. The Administrator shall establish a cash account within each Participant 's Phantom Stock Account (the " Cash Account" ). The Cash Account shall be credited on each Dividend Payment Date with an amount equal to the amount of the cash dividends which a holder of Common Stock would have received if on the record date for the dividend the holder was the record holder of a number of shares of Common Stock equal to the number of Phantom Shares then credited to the Phantom Stock Account. The Cash Account shall be credited quarterly with interest on the average weighted balance in such account at the end of the quarter at a rate equal to the lesser of (1) the prime rate as published in the Wall Street Journal or (2) 120% of the applicable federal long-term rate, with compounding (as prescribed under Code Section 1274(d), determined (in either case) on the last business day of the calendar quarter preceding the calendar quarter to which it applies. On the first Dividend Payment Date of each calendar year commencing on and after the Restated Effective Date, the balance of the Cash Account attributable to Phantom Shares first deferred on or after the Restated Effective Date shall be converted to the number of Phantom Shares (including fractional shares) that could have been purchased with such balance at the Market Value Per Share on such date.
(iii) Crediting Stock Dividends on the Phantom Stock Account. A Participant' s Phantom Stock Account shall be credited on each record date for a stock dividend paid to holders of Common Stock with that number of full and fractional shares of Common Stock which the Participant' s Phantom Stock Account would have received if on that record date such account had been the holder of record of a number of shares of Common Stock equal to the number of Phantom Shares (including fractions) then credited to his or her Phantom Stock Account.
(iv) Other Adjustments to the Phantom Stock Account. The number of Phantom Shares shall be adjusted as determined in the discretion of the Administrator to reflect (i) any change in the outstanding Common Stock by reason of any stock dividend or split, recapitalization, reorganization, merger, consolidation, split-up, spin-off or any similar corporate change affecting the Common Stock; (ii) unusual or nonrecurring events affecting the Company or any Subsidiary or the financial statements of the Company or any Subsidiary ; or (iii) changes in applicable laws, regulations, or accounting principles. Any such adjustment shall be effected in a manner determined by the Administrator that neither enlarges nor dilutes the economic rights represented by a Participant's Phantom Stock Account.
(3) Transfers Prohibited Between Accounts. A Participant shall be prohibited from transferring any amounts credited to his Phantom Stock Account to his Investment Account and from transferring any amounts credited to his Investment Account to his Phantom Stock Account.
(c) Allocating Contributions Between the Investment Account and the Phantom Stock Account.
(1) Deferrals by Officers and Employees. Cash Compensation shall be credited to the Participant' s Investment Account in accordance with Subsection (b)(1)(i), unless the Participant elects to invest in the Company Stock Fund, in which case the amounts shall be credited in accordance with Subsection (b)(1)(iii). The portion of LTIP Awards that would have otherwise been paid in Common Stock shall be credited to the Participant' s Phantom Stock Account in accordance with Subsection (b)(2)(i).
(2) Deferrals by Non-Employee Directors. Director' s Fees that would have otherwise been paid in cash shall be credited to an Investment Account. Such amounts shall be credited in accordance with Subsection (b)(1)(i), unless a Non-Employee Director elects to invest in the Company Stock Fund, in which case the amounts shall be credited in accordance with Subsection (b)(1)(iii). The portion of the Director' s Fees that would have otherwise been paid in Common Stock shall be credited to the Participant' s Phantom Stock Account in accordance with Subsection (b)(2)(i).
(d) Account Statements. The Administrator shall provide to each Participant, within 120 days after the end of each Plan Year, a statement setting forth the balance of Phantom Shares in the Participant' s Phantom Stock Account, the dollar value of the Cash Account, and the dollar value of the Participant' s Investment Account as of the end of the Plan Year.
4.01
Manner of Distribution
.
. At the time each deferral election is made by a Participant pursuant to Article III, such Participant shall elect, subject to Section 4.02, the form of payment with respect to such deferral. The Participant may elect to receive a distribution in the form of a single sum payment
on the Distribution Starting Date
or
in substantially equal
payments made monthly (or in accordance with the Company's applicable payroll practice, e.g., bi-weekly)
commencing on the Distribution Starting Date and continuing for a period of up to 10 years
,
as
specified
by the Participant
on the election form
. The Participant may make a separate distribution election with respect to each of his or her Phantom Stock Account and Investment Account.
For a distribution election to be valid, it must be made during an Election Period
in accordance with the requirements of Code Section 409A
and, in the case of Section 16 Reporting Persons who have a balance in their Phantom Stock Account (other than the Cash Account only) or in the Company Stock Fund, or who have a current deferral election to be credited to a Phantom Stock Account or the Company Stock Fund, with the
prior notice to and the approval of the Administrator, the Company's General Counsel or the Company's Corporate Secretary
. In the event the Participant fails to make such a distribution election, the Employer shall
distribute
to the Participant (or his or her beneficiary or beneficiaries if the Participant is deceased) his or her entire Account in a single sum on the Distribution Starting Date.
4.02
Form of Distribution
. Benefits attributable to the value of the Investment Account and Cash Account shall be distributed to the Participant in cash. Benefits attributable to the Phantom Stock Account (other than the Cash Account and any fractional shares) shall be distributed to the Participant in the form of shares of Common Stock. To the extent that the distribution is in the form of shares of Common Stock, such distribution shall be subject to all applicable securities laws and regulations, and the Company shall have taken all steps, if any, including registration and listing, as may be necessary to make the shares immediately transferable (by sale or otherwise) by the Participant without further regulatory action or compliance on the part of the Participant. The Participant shall reasonably cooperate with the Company, at the Company
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s expense, to facilitate such compliance and related actions by the Company.
4.03 Unforeseeable Emergency . A Participant shall be entitled to an early distribution of all or a portion of his or her Account upon written application to the Administrator and the determination of the Administrator, in his or her sole and absolute discretion, except that in the case of a Section 16 Reporting Person requesting distribution of all or a portion of his Phantom Stock Account or Company Stock Fund, the additional prior approval of the Section 16 Committee shall also be required, that the Participant has experienced a severe financial hardship resulting from an illness or accident of the Participant , the Participant's spouse or other dependent (as defined in Code Section 152, without regard to Code Sections 152(b)(1), (b)(2), and (d)(1)(B)) , loss of the Participant' s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The amount distributed with respect to such unforeseeable emergency shall not exceed the amount necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or by liquidation of the Participant's assets (to the extent such liquidation would not itself cause severe financial hardship) .
4.04 Distribution Upon a Termination of Employment following a Change of Control Event . Anything in this Plan to the contrary notwithstanding, if a Change of Control Event occurs and the Participant experiences a separation from service (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company or its subsidiaries and affiliates within two years following the date of such Change of Control Event , then the Employer shall pay to the Participant (or his or her beneficiary or beneficiaries if the Participant is deceased) his or her entire Account in a single sum on the later of (a) the first day of the month following the Participant's separation from service (within the meaning of Treas. Reg. Section 1.409A-1(h)), or (b) if the Participant is a specified employee (within the meaning of Treas. Reg. Section 1.409A-1(i)) at separation from service, the first day of the seventh month following such Participant's separation from service (within the meaning of Treas. Reg. Section 1.409A-1(h)).
4.05
Beneficiary Designation
. For purposes of this Plan, a Participant'
s beneficiary or beneficiaries under this Plan shall be the person or persons last designated by a Participant, by written notice filed with the Administrator, to receive a Plan benefit upon the death of the Participant. The designation of a beneficiary other than the spouse of the Participant, if any, shall be void unless such spouse consents to such non-spouse beneficiary designation. In the event a Participant fails to designate a person or persons as provided above, or if no beneficiary so designated survives the Participant, then for all purposes of this Plan, the beneficiary shall be the spouse of the Participant, if living. If
there is no spouse or
the spouse is not living,
such Participant'
s beneficiary or beneficiaries under this Plan shall be the beneficiary or beneficiaries of his or her
life insurance
benefits under the
Health
and
Welfare
Plan for Employees of FPL Group, Inc.
and Affiliates (the "Health and Welfare Plan")
(or any successor plan
thereto
). If a Participant is not a participant in
the Health and Welfare Plan
, the Participant
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s beneficiary shall be his or her estate.
4.06 Taxes . All amounts payable to any Participant hereunder may be reduced by any and all federal, state and local taxes imposed upon the Participant or his or her beneficiary or beneficiaries which are required to be withheld by the Employer.
4.07 Distributions under Domestic Relations Orders . Nothing contained in this Plan prevents the Employer, in accordance with the direction of the Administrator, from complying with the provisions of a judgment, decree, or order (including approval of a property settlement agreement) resulting from a divorce, legal separation, annulment or change in legal custody that assigns to a spouse, former spouse, child or other dependent of a Participant (an " Alternate Payee" ) the right to receive all or a portion of the benefits of a Participant under the Plan in a form of payment permitted under the terms of the Plan (a " Domestic Relations Order" ). The Employer shall make any payments required under this Section 4.07 by separate checks to each Alternate Payee, unless otherwise explicitly provided in the Domestic Relations Order. Distribution to an Alternate Payee under a Domestic Relations Order is permitted at any time, irrespective of whether the Participant is currently entitled to a distribution of his or her benefits under the Plan. A distribution to an Alternate Payee prior to the time the Participant is entitled to a distribution of his or her benefits under the Plan (other than a distribution pursuant to Section 4.03) is available only if the Domestic Relations Order explicitly requires distribution at that time. Notwithstanding the foregoing, nothing in this Section 4.07 provides a Participant the right to receive a distribution of his or her benefits at a time not otherwise permitted under the terms of the Plan nor does it permit the Alternate Payee to receive a form of payment not otherwise permitted under the Plan.
Within a reasonable period of time after receiving the Domestic Relations Order, the Administrator will determine whether such order complies with the terms of the Plan and will notify the Participant and each Alternate Payee of its determination. If any portion of the Participant
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s benefit is payable during the period the Administrator is making such determination, the Administrator shall make a separate accounting of the amounts payable.
4.08 Distribution to Comply with Federal Conflict of Interest Requirements . To the extent necessary to effect compliance with a certificate of divestiture (within the meaning of Code Section 1043(b)(2)), the Administrator may permit the early distribution of all or a portion of a Participant's benefits under this Plan.
5.01 Administration . The Administrator shall administer and interpret this Plan in a manner consistent with the requirements of Code Section 409A and in accordance with the provisions of the Plan in its sole and absolute discretion. Any determination or decision by the Administrator shall be conclusive and binding on all persons who at any time have, have had, or may have a claim to any interest whatsoever under this Plan.
5.02 Liability of Committee and Administrator; Indemnification . To the extent permitted by law, no member of the Committee (or its delegatee), the Section 16 Committee or the Administrator shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan unless attributable to his or her own gross negligence or willful misconduct. The Employer shall indemnify the members of the Committee (or its delegatee), the Section 16 Committee and the Administrator against any and all claims, losses, damages, expenses, including any counsel fees and costs, incurred by them, and any liability, including any amounts paid in settlement with their approval, arising from their action or failure to act, except when the same is judicially determined to be attributable to their gross negligence or willful misconduct.
5.03 Determination of Benefits .
(a) Claim for Benefits. A person, or his or her duly authorized representative, who believes that he or she is being denied a benefit to which he or she is entitled under the Plan (hereinafter referred to as a " Claimant" ) may file a written request for such benefit with the Administrator, setting forth his or her claim. The request must be addressed to the Company at its then principal place of business.
(b) Timing and Notification of Benefit Determination.
(1) Timing. If a claim is wholly or partially denied, the Administrator shall notify the Claimant of the Plan's adverse benefit determination within a reasonable period of time, but not later than 90 days after receipt of the claim by the Plan, unless the Administrator determines that special circumstances require an extension of time for processing the Claim. If the Administrator determines that an extension of time for processing is required, notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period; however, in no event shall such extension exceed a period of 90 days from the end of such initial period. Any extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the benefit determination. For purposes of this Subsection (b), the period of time within which a benefit determination is required to be made shall begin at the time a Claim is filed in accordance with the procedures set forth in this Subsection (b) without regard to whether all the information necessary to make a benefit determination accompanies such filing .
(2) Manner and Content of Notification of Benefit Determination. The Administrator shall provide a Claimant with written or electronic notification of any adverse benefit determination. Any electronic notification shall comply with the standards imposed by the Department of Labor. The notification shall set forth, in a manner calculated to be understood by the Claimant (i) the specific reason or reasons for the adverse determination, (ii) reference to the specific Plan provisions on which the determination is based, (iii) a description of any additional material or information necessary for the Claimant to perfect the Claim and an explanation of why such material or information is necessary, and (iv) a description of the Plan's review procedures and the time limits applicable to such procedures, including a statement of the Claimant's right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.
(c)
Appeal of Adverse Benefit Determination; Full and Fair Review.
Within 60 days after the receipt by the Claimant of the written opinion described in Subsection (b), the Claimant may request in writing that the Committee review the claim and the Administrator
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s initial adverse benefit determination. Such request must be addressed to the Company at its then principal place of business, and may include the submission of written comments, documents, records, and other information relating to the claim for benefits. The Claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim for benefits. The Committee
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s review shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. If the Claimant does not request a review of the Administrator
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s initial determination within such 60 day period, he shall be barred and estopped from challenging such determination.
(d) Notification of Benefit Determination on Review.
(1) Timing of Notification of Benefit Determination on Review. The Committee shall notify a Claimant of the Plan's determination of a request for review within a reasonable period of time, but not later than 60 days after receipt of the Claimant's request for review by the Plan, unless the Committee determines that special circumstances require an extension of time for processing the Claim . If the Committee determines that an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 60-day period. In no event shall such extension exceed a period of 60 days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review. For purposes of this Subsection (d), the period of time within which a benefit determination on review is required to be made shall begin at the time an appeal is filed in accordance with the procedures set forth in Subsection (c) , without regard to whether all the information necessary to make a benefit determination accompanies such filing . In the event that a period of time is extended due to a Claimant's failure to submit information necessary to decide a claim, the period for making the benefit determination on review shall be tolled from the date on which the notification of the extension is sent to the Claimant until the date on which the Claimant responds to the request for additional information.
(2) Manner and Content of Notification of Benefit Determination on Review. The Committee shall provide a Claimant with written or electronic notification of a Plan's benefit determination on review. Any electronic notification shall comply with the standards imposed by the Department of Labor. In the case of an adverse benefit determination, the notification shall set forth, in a manner calculated to be understood by the Claimant (i) the specific reason or reasons for the adverse determination, (ii) reference to the specific Plan provisions on which the benefit determination is based, (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim for benefits, and (iv) a statement of the Claimant's right to bring a civil action under ERISA Section 502(a).
5.04 Expenses . The cost of this Plan and the expenses of administering the Plan shall be borne by the Employer.
5.05 Compliance with Securities Laws . Notwithstanding anything else to the contrary contained herein,
(a) the Section 16 Committee shall have final discretion with respect to the application, administration and interpretation of the Plan with regard to, and the deferral of compensation by, any Participant who is a Section 16 Reporting Person; and
(b) a Section 16 Reporting Person shall not take any actions or make any elections under this Plan which could result in short-swing trading liability under Section 16 of the Exchange Act.
5.06 Compliance with Code Section 409A . It is intended that the provisions of this Plan satisfy the requirements of Code Section 409A and that the Plan be operated in a manner consistent with such requirements to the extent applicable. Therefore, the Administrator may make adjustments to the Plan and may construe the provisions of the Plan in accordance with the requirements of Code Section 409A.
6.01 No Trust Created . Nothing contained in this Plan, and no action taken pursuant to its provisions by any party shall create, or be construed to create, a trust of any kind, or a fiduciary relationship between the Employer and the Participants or their beneficiaries.
6.02 No Requirement to Fund . The Employer is not required to and shall not fund (within the meaning of the Federal tax laws) this Plan. Even though amounts deferred under this Plan are credited to the Accounts of the Participants, the Employer shall not be required to earmark, deposit, contribute to a trust, or otherwise set aside funds for such Accounts.
6.03
Benefits Payable from General Assets
. The benefits payable under this Plan to a Participant or his or her beneficiary or beneficiaries may be made from the general assets of the Employer or from such other assets earmarked, deposited, contributed to a trust, or otherwise set aside to fund benefits under this Plan. It is intended that the Employer
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s obligation under this Plan be an unfunded and unsecured promise to pay money in the future. Any funds earmarked, deposited, contributed to a trust, or otherwise set aside by the Employer to assist it in satisfying its obligations under this Plan shall be subject to the claims of general creditors of the Employer. The Participants'
(or their beneficiaries'
) rights to benefits under this Plan which are payable by the Employer shall be no greater than the right of any unsecured general creditor of the Employer, and the Participants (and their beneficiaries) shall not have any security interest in any assets (including, but not limited to, assets earmarked, deposited, contributed to a trust, or otherwise set aside to fund benefits provided under this Plan) of the Employer.
6.04 Successors . This Plan shall be binding upon the Employer and its successors and assigns, and the Participant, his or her successors, heirs, executors, administrators and beneficiaries.
6.05 No Contract of Employment . Nothing contained in this Plan shall be construed to be a contract of employment or as conferring upon an eligible Non-Employee Director, Officer or Employee the right to continue to be employed by the Employer in his or her present capacity, or in any capacity, or any rights as an officer or director of the Employer.
6.06 Amendment or Termination of Plan .
(a) Except to the extent otherwise reserved to the Administrator, the Chief Executive Officer, the President, any Vice President or the General Counsel of the Company (the " Corporate Officers" ) shall have the right to amend this Plan at any time and from time to time, including a retroactive amendment. The Committee expressly reserves the right to terminate the Plan and to amend (a) the definition of the following terms: Base Salary, Bonus, Change of Control, Committee, Common Stock, Company, Compensation, Director's Fees, Disability, Distribution Starting Date, Employee, Employer, Market Value Per Share, Non-Employee Director, Officer, or Participant; or (b) Sections 2.01 (Eligibility to Participate), 3.01 (Deferral Elections), 4.01 (Manner of Distribution), 4.03 (Unforeseeable Emergency), 4.04 (Distribution Upon a Termination of Employment following a Change of Control Event), 6.02 (No Requirement to Fund), 6.03 (Benefits Payable from General Assets), and 6.06 (Amendment or Termination of Plan) hereof and shall have the right to amend any such Section or Sections at any time or from time to time, including a retroactive amendment. No amendment or termination of the Plan shall, without the consent of any person affected thereby, modify or in any way affect any right or obligation under this Plan created prior to such amendment or termination. Notwithstanding the foregoing, the Plan shall be subject to amendment to the extent necessary to effect compliance with Code Section 409A, but any such amendment shall, to the maximum practicable extent, preserve the economic rights of each Participant.
(ii) at such other time and in such other circumstances as may be permitted under Code Section 409A.
(ii) At such other time and in such other circumstances as may be permitted under Code Section 409A.
6.07 Top Hat Plan . It is the Employer' s intention that this Plan be construed as an unfunded, non-qualified deferred compensation plan maintained for a select group of management or highly compensated employees within the meaning of ERISA Section 201(2).
6.08 Governing Law . The validity and effect of this Plan and the rights and obligations of all persons affected hereby shall be construed and determined in accordance with the laws of the State of Florida unless superseded by federal law.
6.09 Severability . In the event that any provision of this Plan shall be declared illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions of this Plan but shall be fully severable and this Plan shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein.
6.10 Construction . The article and section headings and numbers are included only for convenience of reference and are not to be taken as limiting or extending the meaning of any of the terms and provisions of the Plan. Whenever appropriate, words used in the singular shall include the plural or the plural may be read as the singular.
6.11 Merger or Consolidation or Sale of Assets of Employer . Subject to the requirement that the Employer make distributions upon termination of a Participant' s employment following a Change of Control pursuant to Section 4.04, in the event of the merger or consolidation of the Employer with any other entity, or in the event substantially all of the assets of the Employer are to be transferred to another entity, the successor entity resulting from the merger or consolidation, or the transferee of such assets, as the case may be, shall assume the obligations of the Employer hereunder and shall be substituted for the Employer hereunder.
6.12 Transfer to an Affiliate of the Employer . An election to defer Compensation , and/or Director' s Fees under this Plan shall apply with respect to such items of compensation paid by a Participant' s Employer at the time such deferral election is properly made. In the event the Participant has a deferral election in effect and transfers from one Subsidiary or affiliate of the Employer to another Subsidiary or affiliate of the Employer, the Employer shall to the extent possible continue to comply with such deferral election (and the other related administrative elections) . As soon as administratively practicable, the Administrator shall notify such new Employer of the Participant's elections in effect and shall make available copies of the relevant forms on which such elections were made .
6.13 Assignment . No right, title or interest of any kind in the Plan shall be transferable or assignable by a Participant or beneficiary or be subject to alienation, anticipation, encumbrance, garnishment, attachment, execution or levy or any kind, whether voluntary or involuntary nor subject to the debts, contracts, liabilities, engagements, or torts of a Participant or beneficiary, except as provided by Sections 4.06 and 4.07. Except as provided in this Section, any attempt to alienate, sell, transfer, assign, pledge, garnish, attach or otherwise subject to legal or equitable process or encumber or dispose of any interest in the Plan shall be void.
6.14 Incapacity . If the Administrator determines that any person to whom any distribution is payable under this Plan is unable to care for his or her affairs because of illness or accident, or is a minor, any payment due (unless a prior claim thereto has been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, a child, a parent, or a brother or sister, or to any person deemed by the Administrator to have incurred expense for such person otherwise entitled to payment, in such manner as the Administrator may determine. Any such payment shall be a complete discharge of the liabilities of the Employer under this Plan.
6.15 Effect on Benefits Under Other Plans . Any Compensation and/or Director' s Fees deferred hereunder and any benefits payable under this Plan shall not be considered salary or other compensation to the Participant for the purposes of computing benefits to which he or she may be entitled under any other employee benefit plan established or maintained by the Employer, except to the extent provided in such other employee benefit plan.
6.16 Indemnity Upon Change of Control . If upon a Change of Control it becomes necessary for a Participant (or his or her beneficiary or beneficiaries) to institute a claim, by litigation or otherwise, to enforce his or her rights under this Plan, the Employer (and its successors or transferee in accordance with Section 6.11 ) shall indemnify such Participant (or his or her beneficiary or beneficiaries) from and against all costs and expenses, including legal fees, incurred by him or her in instituting and maintaining such claim. Each indemnity payment shall be made no later than thirty days following the date of request for reimbursement of such costs and expenses by the Participant or beneficiary, as applicable. In no event shall such reimbursement occur later than the last day of the calendar year following the calendar year in which such costs and expenses are incurred by the Participant or beneficiary, as applicable.
6.17 No Rights as Shareholders . No Participant who elects to defer compensation into a Phantom Stock Account or the Company Stock Fund will have any rights arising out of the ownership of Common Stock as a result of such election.
FPL GROUP, INC.
AMENDED AND RESTATED LONG TERM INCENTIVE PLAN
EFFECTIVE DECEMBER 12, 2008
SECTION 1. Preamble
1.01 Purpose. The purpose of this Amended and Restated Long Term Incentive Plan (the "Plan") of FPL Group, Inc. (together with any successor thereto, the "Company") is (a) to promote the identity of interests between shareholders and employees of the Company by encouraging and creating significant ownership of common stock of the Company by officers and other salaried employees of the Company and its subsidiaries; (b) to enable the Company to attract and retain qualified officers and employees who contribute to the Company's success by their ability, ingenuity and industry; and (c) to provide meaningful long-term incentive opportunities for officers and other employees who are responsible for the success of the Company and who are in a position to make significant contributions toward its objectives.
1.02 Effective Date. The Plan was originally effective on February 14, 1994 having been approved by the affirmative vote of the holders of a majority of the Shares present or represented and entitled to vote (and the affirmative vote of a majority of the Shares voting) at a meeting of the Company's shareholders held on May 9, 1994. The Plan was subsequently amended by the Board at a meeting held on February 12, 1996, amended and restated by the Board of Directors of the Company at a meeting held on February 11, 2002 and further amended and restated by the Board of Directors of the Company at a meeting held on December 20, 2002. The Plan was further amended and restated effective on May 21, 2004, having been approved by the affirmative vote of the holders of a majority of the Shares present or represented and entitled to vote (and the affirmative vote of a majority of the Shares voting) at a meeting of the Company's shareholders held on May 21, 2004. The Plan was further amended and restated by the Board (i) at a meeting held on February 18, 2005, (ii) at a meeting held on October 14, 2005, (iii) at a meeting held on October 13, 2006 and (iv) at a meeting held on December 12, 2008 (in order to comply with Section 409A ("Code Section 409A") of the Internal Revenue Code of 1986 (the "Code"), as amended (to the extent applicable).
1.03 Termination of the Plan. The Plan will terminate on May 21, 2014. Awards outstanding as of such termination date shall not be affected or impaired by the termination of the Plan.
1.04 Stock Split. In connection with the two-for-one division of the Shares approved by the Board on February 18, 2005 and effective March 15, 2005, and pursuant to the authority granted in Section 10 of the Plan, the Committee, by consent dated March 8, 2005 and effective March 15, 2005, adjusted the total number of Shares reserved and available for Awards under, and each maximum yearly award amount expressed as a number of Shares set forth in, the Plan automatically by multiplying the applicable number of Shares by two.
SECTION 2. Definitions . In addition to the terms defined elsewhere in the Plan, the following shall be defined terms under the Plan:
2.01 "Award" means any Performance Award, Option, Stock Appreciation Right, Restricted Stock, Deferred Stock, Dividend Equivalent, or Other Stock-Based Award, or any other right or interest relating to Shares or cash, granted to a Participant under the Plan.
2.02 "Award Agreement" means any written agreement, contract, or other instrument or document evidencing an Award.
2.03 "Board" means the Board of Directors of the Company.
2.04 "Cause" shall mean, unless otherwise defined in an Award Agreement, (i) repeated violations by the Participant of the Participant's obligations to the Company (or the applicable employer subsidiary or affiliate of the Company) (other than as a result of incapacity due to physical or mental illness) which are demonstrably willful and deliberate on the Participant's part, which are committed in bad faith or without reasonable belief that such violations are in the best interests of the Company (or the applicable employer subsidiary or affiliate of the Company) and which are not remedied in a reasonable period of time after receipt of written notice from the Company specifying such violations, (ii) the conviction of the Participant of a felony involving an act of dishonesty intended to result in substantial personal enrichment at the expense of the Company or its subsidiaries or affiliated companies, or (iii) prior to a Change in Control, such other events as shall be determined by the Committee in its sole discretion.
2.05 "Change of Control" and related terms are defined in Section 9.
2.07 "Code" means the Internal Revenue Code of 1986, as amended from time to time. References to any provision of the Code shall be deemed to include successor provisions thereto and regulations thereunder.
2.08 "Committee" means a committee composed of not less than two directors designated by the Board to administer the Plan; provided, however, that each member of the Committee shall be a "Non-Employee Director" within the meaning of Rule 16b-3 under the Exchange Act, an "outside director" within the meaning of Section 162(m)(4)(C)(i) of the Code and the regulations thereunder, and an "independent director" within the meaning of Section 303A of the New York Stock Exchange Listed Company Manual (or, in each case, any successor term or provision). The Committee may, without limitation, be the Compensation Committee of the Board or a subcommittee thereof, if such committee or subcommittee satisfies the foregoing requirements.
2.09 "Company" is defined in Section 1.
2.10 "Covered Employee" means a Participant designated as such in connection with the grant of a Performance Award, Performance-Based Restricted Stock Award, or Other Stock-Based Award by the Committee who is or may be a "covered employee" within the meaning of Section 162(m)(3) of the Code in the year in which such Award is expected to be taxable to such Participant.
2.11 "Deferred Stock" means a right, granted to a Participant under Section 6.05, to receive Shares at the end of a specified deferral period.
2.12 "Delegated Committee" means a committee appointed by the Board to perform the functions set forth in Section 3.04 as to Non-Reporting Participants , which committee is composed of (i) one or more directors or (ii) a senior executive officer (as contemplated by Florida Statutes section 607.0825(1)(e) or any successor statute thereto) .
2.14 "Dividend Equivalent" means a right, granted to a Participant under Section 6.03, to receive cash, Shares, other Awards, or other property equal in value to dividends paid with respect to a specified number of Shares.
2.15 "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time. References to any provision of the Exchange Act shall be deemed to include successor provisions thereto and regulations thereunder.
2.16 "Fair Market Value" means, with respect to Shares, Awards, or other property, the fair market value of such Shares, Awards, or other property determined by such reasonable methods or procedures using actual transactions in such stock as reported on an established securities market as shall be established from time to time by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of Shares as of any date shall be the closing sales price on that date of a Share as reported in the New York Stock Exchange Composite Transaction Report (or if the Shares were not traded on the New York Stock Exchange on such date, the closing sales price on the nearest date preceding such date on which the Shares were so traded).
2.17 "Incentive Stock Option" means any Option designated as, and qualified as, an "incentive stock option" within the meaning of Section 422 of the Code.
2.18 "Non-Qualified Stock Option" means an Option that is not an Incentive Stock Option, whether or not designated as such.
2.19 "Non-Reporting Participant" means a Participant who is not subject to either the reporting requirements of Section 16(a) of the Exchange Act or the short-swing trading provisions of Section 16(b) of the Exchange Act and is not a Covered Employee.
2.20 "Option" means a right, granted to a Participant under Section 6.06, to purchase Shares, other Awards, or other property at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.
2.21 "Other Stock-Based Award" means a right, granted to a Participant under Section 6.08, that relates to or is valued by reference to Shares.
2.22 "Participant" means a person who, as an officer or salaried employee of the Company or any Subsidiary, has been granted an Award under the Plan.
2.23 "Performance Award" means a right, granted to a Participant under Section 6.02, to receive cash, Shares, other Awards, or other property the payment of which is contingent upon achievement of performance goals specified by the Committee.
2.24 "Performance-Based Restricted Stock" means Restricted Stock that is subject to a risk of forfeiture if specified performance criteria are not met within the restriction period.
2.25 "Plan" is defined in Section 1.
2.26 "Repricing Restrictions" means the second sentence of Section 6.06(i) and the second sentence of Section 6.07(i).
2.27 "Restricted Stock" means Shares, granted to a Participant under Section 6.04, that are subject to certain restrictions and to a risk of forfeiture.
2.28 "Rule 16b-3" means Rule 16b-3, as from time to time amended and applicable to Participants, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act.
2.30 "Shares" means the Common Stock, $.01 par value, of the Company and such other securities of the Company as may be substituted for Shares or such other securities pursuant to Section 10.
2.31 "Stock Appreciation Right" means a right, granted to a Participant under Section 6.07, to be paid an amount measured by the appreciation in the Fair Market Value of Shares from the date of grant to the date of exercise of the right, with payment to be made in cash, Shares, other Awards, or other property as specified in the Award or determined by the Committee.
2.32 "Subsidiary" means any corporation (other than the Company) or other non-corporate entity with respect to which the Company owns, directly or indirectly, 50% or more of the total combined voting power of all classes of stock or other ownership interests. In addition, any other related entity may be designated by the Board as a Subsidiary, provided such entity could be considered as a subsidiary according to generally accepted accounting principles.
2.33 "Year" means a calendar year.
Administration .
3.01 Authority of the Committee. The Plan shall be administered by the Committee. The Committee shall have full and final authority to take the following actions, in each case subject to and consistent with the provisions of the Plan:
(i) to select and designate Participants;
(ii) to designate Subsidiaries;
(iii) to determine the type or types of Awards to be granted to each Participant;
(iv) to determine the number of Awards to be granted, the number of Shares to which an Award will relate, the terms and conditions of any Award granted under the Plan including, but not limited to, any exercise price, grant price, or purchase price, any restriction or condition, any schedule for lapse of restrictions or conditions relating to transferability or forfeiture, exercisability, or settlement of an Award, and waivers or accelerations thereof, and waiver of performance conditions relating to an Award (based in each case on such considerations as the Committee shall determine), and all other matters to be determined in connection with an Award;
(v) to determine whether, to what extent, and under what circumstances an Award may be settled, or the exercise price of an Award may be paid, in cash, Shares, other Awards, or other property, or an Award may be cancelled, forfeited, or surrendered;
(vi) to determine whether, to what extent, and under what circumstances cash, Shares, other Awards, or other property payable with respect to an Award will be deferred either automatically, at the election of the Committee, or , to the extent permissible under Code Section 409A, at the election of the Participant;
(vii) to prescribe the form of each Award Agreement, which need not be identical for each Participant;
(viii) to adopt, amend, suspend, waive, and rescind such rules and regulations and appoint such agents as the Committee may deem necessary or advisable to administer the Plan;
(ix) to correct any defect or supply any omission or reconcile any inconsistency in the Plan and to construe and interpret the Plan and any Award, rules and regulations, Award Agreement, or other instrument hereunder;
(x) to make all other decisions and determinations as may be required under the terms of the Plan or as the Committee may deem necessary or advisable for the administration of the Plan ;
(xii) to amend the provisions of any Award or Award Agreement in compliance with, or to obtain exemption from, Code Section 409A .
3.02 Manner of Exercise of Committee Authority. Unless authority is specifically reserved to the Board under the terms of the Plan, or applicable law, the Committee (or the Delegated Committee, with respect to the authority specifically delegated to it pursuant to Section 3.04 hereof) shall have sole discretion in exercising such authority under the Plan. Any action of the Committee (or the Delegated Committee, with respect to the authority specifically delegated to it pursuant to Section 3.04 hereof) with respect to the Plan shall be final, conclusive, and binding on all persons, including the Company, Subsidiaries, Participants, any person claiming any rights under the Plan from or through any Participant, and shareholders. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. A memorandum signed by all members of the Committee shall constitute the act of the Committee without the necessity, in such event, to hold a meeting. The Committee may delegate to officers or managers of the Company or any Subsidiary the authority, subject to such terms as the Committee shall determine, to perform administrative functions under the Plan.
3.03 Limitation of Liability. Each member of the Committee and the Delegated Committee shall be entitled to , in good faith, rely or act upon any report or other information furnished to him by any officer or other employee of the Company or any Subsidiary, the Company's independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan. No member of the Committee or the Delegated Committee, nor any officer or employee of the Company acting on behalf of the Committee or the Delegated Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Committee and the Delegated Committee and any officer or employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action, determination, or interpretation.
3.04 Authority of the Delegated Committee. The Delegated Committee shall have the authority to take the actions, in each case subject to and consistent with the provisions of the Plan, set forth in Sections 3.01(i), (iii), (iv), (v), (vi) and (vii), but only as to Non-Reporting Participants. References to the Committee in the Plan shall be deemed to include the Delegated Committee in connection with all actions taken by the Delegated Committee in accordance with this Section 3.04. The Committee shall have the authority to review the Delegated Committee's actions to ensure compliance with the Plan and consistency with the actions of the Committee. This grant of authority to the Delegated Committee does not replace, but is in addition to, the authority of the Committee as set forth in this Section 3.
Shares Subject to the Plan . Subject to adjustment as provided in Section 10, the total number of Shares reserved and available for Awards under the Plan as of December 31, 2003 shall be 13,000,000. Such Shares may be authorized and unissued Shares or Shares purchased on the open market. For purposes of this Section 4, the number of and time at which Shares shall be deemed to be subject to Awards and therefore counted against the number of Shares reserved and available under the Plan shall be earliest date at which the Committee can reasonably estimate the number of Shares to be distributed in settlement of an Award or with respect to which payments will be made; provided, however, that, the Committee may adopt procedures for the counting of Shares relating to any Award for which the number of Shares to be distributed or with respect to which payment will be made cannot be fixed at the date of grant to ensure appropriate counting, avoid double counting (in the case of tandem or substitute awards), and provide for adjustments in any case in which the number of Shares actually distributed or with respect to which payments are actually made differs from the number of Shares previously counted in connection with such Award. If any Shares to which an Award relates are forfeited or the Award is settled or terminates without a distribution of Shares (whether or not cash, other Awards, or other property is distributed with respect to such Award), any Shares counted against the number of Shares reserved and available under the Plan with respect to such Award shall, to the extent of any such forfeiture, settlement or termination, again be available for Awards under the Plan.
Eligibility . Awards may be granted only to individuals who are officers or other salaried employees (including employees who also are directors) of the Company or a Subsidiary; provided, however, that no Award shall be granted to any member of the Committee.
Specific Terms of Awards .
6.01 General. Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 11.02), such additional terms and conditions, not inconsistent with the provisions of the Plan and applicable law , as the Committee shall determine, including without limitation the acceleration of vesting of any Awards or terms requiring forfeiture of Awards in the event of termination of employment by the Participant. Except as provided in Sections 7.03 or 7.04, only services may be required as consideration for the grant of any Award.
6.02 Performance Awards. Subject to the provisions of Sections 7.01 and 7.02, the Committee is authorized to grant Performance Awards to Participants on the following terms and conditions:
(i) Award and Conditions. A Performance Award shall confer upon the Participant rights, valued as determined by the Committee, and payable to, or exercisable by, the Participant to whom the Performance Award is granted, in whole or in part, as determined by the Committee, conditioned upon the achievement of performance criteria determined by the Committee.
(ii) Other Terms. A Performance Award shall be denominated in Shares and may be payable in cash, Shares, other Awards, or other property, and have such other terms as shall be determined by the Committee. Notwithstanding the foregoing, and except with respect to adjustments pursuant to Section 10 of this Plan and payments made, in the discretion of the Committee, in connection with a Change of Control, a Performance Award outstanding on or after May 21, 2004 which confers upon the Participant rights to receive shares of Common Stock, $.01 par value per share, of the Company in the form referred to as "Performance Share Awards" shall be payable in Shares, and the Company shall be authorized to withhold, from any distribution of Shares relating to a Performance Share Award, in order to meet the Company's obligations for the payment of withholding taxes, Shares with a Fair Market Value equal to the minimum statutory withholding for taxes (including federal and state income taxes and payroll taxes applicable to the supplemental taxable income relating to such distribution) and any other tax liabilities for which the Company has an obligation relating to such distribution.
6.03
Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to Participants. The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Shares or Awards, or otherwise reinvested
.
;
provided, however,
that the payment or distribution of Dividend Equivalents shall not be contingent upon the exercise of an Option, Stock Appreciation Right or any other stock right.
6.04 Restricted Stock. The Committee is authorized to grant Restricted Stock to Participants on the following terms and conditions:
(i) Issuance and Restrictions. Restricted Stock shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends thereon), which restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, or otherwise as the Committee shall determine.
(ii) Forfeiture. Performance-Based Restricted Stock shall be forfeited unless preestablished performance criteria specified by the Committee are met during the applicable restriction period. Except as otherwise determined by the Committee, upon termination of employment (as determined under criteria established by the Committee) during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited and reacquired by the Company; provided, however, that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes.
(iii) Possession of Restricted Shares. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, such certificates shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, the Company shall retain physical possession of the certificates, and the Participant shall deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock. If non-certificated shares representing Restricted Stock are registered in the name of the Participant, such shares shall be maintained in a separate restricted share account subject to terms, conditions, and restrictions of like effect.
(iv) Dividends. Unless otherwise determined by the Committee, cash dividends paid on Performance-Based Restricted Stock may be automatically reinvested in additional shares of Performance-Based Restricted Stock and cash dividends paid on other Restricted Stock shall be paid to the Participant. Dividends reinvested in Performance-Based Restricted Stock and Shares distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, may be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such stock or other property has been distributed.
(v) Tax Withholding. Except as the Committee may determine in its discretion in connection with a Change of Control and except as may be provided pursuant to Section 10 of this Plan, upon delivery of unrestricted Shares to a Participant in connection with the lapse of forfeiture restrictions on all or a portion of an Award of Restricted Stock, the Company shall be authorized to withhold from any such distribution, in order to meet the Company's obligations for the payment of withholding taxes, Shares with a Fair Market Value equal to the minimum statutory withholding for taxes (including federal and state income taxes and payroll taxes applicable to the supplemental taxable income relating to such distribution) and any other tax liabilities for which the Company has an obligation relating to such distribution.
6.05 Deferred Stock. The Committee is authorized to grant Deferred Stock to Participants, on the following terms and conditions:
(i) Award and Restrictions. Delivery of Shares will occur upon expiration of the deferral period specified for Deferred Stock by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, Deferred Stock shall be subject to such restrictions as the Committee may impose, which restrictions may lapse at the expiration of the deferral period or at earlier specified times, separately or in combination, in installments, or otherwise, as the Committee shall determine.
(ii) Forfeiture. Except as otherwise determined by the Committee, upon termination of employment (as determined under criteria established by the Committee) during the applicable deferral period or portion thereof (as provided in the Award Agreement evidencing the Deferred Stock), all Deferred Stock that is at that time subject to deferral (other than a deferral at the election of the Participant) shall be forfeited; provided, however, that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Deferred Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Deferred Stock.
6.06 Options. The Committee is authorized to grant Options to Participants on the following terms and conditions:
(i) Exercise Price. The exercise price per Share purchasable under an Option shall be determined by the Committee; provided, however, that, except as provided in Section 7.03, such exercise price shall be not less than the Fair Market Value of a Share on the date of grant of such Option. After an Option is granted, the exercise price per Share purchasable under the Option may not be decreased, nor shall any other action be taken with respect to such Option that would constitute a "re-pricing" (determined in accordance with generally applicable accounting standards), unless such decrease or re-pricing is approved by the affirmative vote of the holders of a majority of the Shares present or represented and entitled to vote (and the affirmative vote of a majority of the Shares voting) at a meeting of the holders of the Shares, or any adjournment thereof.
(ii) Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, and the methods by which such exercise price may be paid or deemed to be paid, the form of such payment, including, without limitation, cash, Shares, other Awards or awards issued under other Company plans, or other property; provided, however, that the Company shall not extend or maintain credit or arrange for the extension of credit, in the form of a personal loan, to or for any Participant. The Committee shall also determine the methods by which Shares will be delivered or deemed to be delivered to Participants. Options shall expire not later than ten years after the date of grant.
(iii) Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code, including but not limited to the requirements that no Incentive Stock Option shall be granted more than ten years after the effective date of the Plan . Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options shall be interpreted, amended, or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any Incentive Stock Option under Code Section 422 . In the event a Participant voluntarily disqualifies an Option as an Incentive Stock Option, the Committee may, but shall not be obligated to, make such additional Awards or pay bonuses as the Committee shall deem appropriate to reflect the tax savings to the Company which result from such disqualification.
6.07 Stock Appreciation Rights. The Committee is authorized to grant Stock Appreciation Rights to Participants on the following terms and conditions:
(i) Right to Payment. A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one Share on the date of exercise (or, if the Committee shall so determine in the case of any such right, other than one related to an Incentive Stock Option, the Fair Market Value of one Share at any time during a specified period before or after the date of exercise) over (B) the grant price of the Stock Appreciation Right as determined by the Committee as of the date of grant of the Stock Appreciation Right, which, except as provided in Section 7.03, shall be not less than the Fair Market Value of one Share on the date of grant. After a Stock Appreciation Right is granted, the grant price of the Stock Appreciation Right may not be decreased, nor shall any other action be taken with respect to such Stock Appreciation Right that would constitute a "re-pricing" (determined in accordance with generally applicable accounting standards), unless such decrease or re-pricing is approved by the affirmative vote of the holders of a majority of the Shares present or represented and entitled to vote (and the affirmative vote of a majority of the Shares voting) at a meeting of the holders of the Shares, or any adjournment thereof.
(ii) Other Terms. The Committee shall determine the time or times at which a Stock Appreciation Right may be exercised in whole or in part, the method of exercise, method of settlement, form of consideration payable in settlement, method by which Shares will be delivered or deemed to be delivered to Participants, and any other terms and conditions of any Stock Appreciation Right. Stock Appreciation Rights shall expire not later than ten years after the date of grant.
6.08 Other Stock-Based Awards. The Committee is authorized to grant to Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares, as deemed by the Committee to be consistent with the purposes of the Plan, including without limitation, Shares awarded purely as a "bonus" or other "incentive" whether or not subject to any restrictions or conditions, convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, purchase rights, and Awards valued by reference to book value of Shares or the value of securities of or the performance of specified Subsidiaries. The Committee shall determine the terms and conditions of such Awards, which may include performance criteria. Shares delivered pursuant to an Award in the nature of a purchase right granted under this Section 6.08 shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Shares, other Awards, or other property, as the Committee shall determine.
SECTION 7. Certain Provisions Applicable to Awards.
7.01 Performance-Based Awards. Performance Awards, Performance-Based Restricted Stock, and Other Stock-Based Awards available to Covered Employees and subject to performance criteria are intended to be "qualified performance-based compensation" within the meaning of Code sections 162(m) and 409A and shall be paid to a Covered Employee solely on account of the attainment of one or more preestablished, objective performance goals within the meaning of sections 162(m) and 409A and the regulations thereunder. Until otherwise determined by the Committee, the performance goal shall be the attainment of preestablished amounts of annual net income of the Company. The payout of any such Award to a Covered Employee may be reduced, but not increased, based on the degree of attainment of other performance criteria or otherwise at the discretion of the Committee.
7.02 Maximum Yearly Awards. A maximum of 600,000 Shares (or the equivalent Fair Market Value thereof with respect to Awards valued in whole or in part by reference to, or otherwise based on or related 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% of the amount thereof, or 960,000 Shares in the aggregate and 125,000 Shares in the case of any Participant. A maximum of 1,500,000 Shares may be made subject to Options and Stock Appreciation Rights in any Year. 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. The Share amounts in this Section 7.02 are as of December 31, 2003 and are subject to adjustment under Section 10 and are subject to the Plan maximum under Section 4.
7.03 Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the Plan may, in the discretion of the Committee and subject to the Repricing Restrictions, be granted either alone or in addition to, in tandem with, or in substitution for any other Award granted under the Plan or any award granted under any other plan of the Company, any Subsidiary, or any business entity to be acquired by the Company or a Subsidiary, or any other right of a Participant to receive payment from the Company or any Subsidiary. If an Award is granted in substitution for another Award or award, the Committee shall require the surrender of such other Award or award in consideration for the grant of the new Award. Awards granted in addition to or in tandem with other Awards or awards may be granted either as of the same time as or a different time from the grant of such other Awards or awards. Subject to the Repricing Restrictions, the per Share exercise price of any Option, grant price of any Stock Appreciation Right, or purchase price of any other Award conferring a right to purchase Shares:
(i) Granted in substitution for an outstanding Award or award shall be not less than the lesser of the Fair Market Value of a Share at the date such substitute award is granted or such Fair Market Value at that date reduced to reflect the Fair Market Value at that date of the Award or award required to be surrendered by the Participant as a condition to receipt of the substitute Award; or
(ii) Retroactively granted in tandem with an outstanding Award or award shall be not less than the lesser of the Fair Market Value of a Share at the date of grant of the later Award or at the date of grant of the earlier Award or award.
7.04 Exchange Provisions. Subject to the Repricing Restrictions, the Committee may at any time offer to exchange or buy out any previously granted Award for a payment in cash, Shares, other Awards (subject to Section 7.03), or other property based on such terms and conditions as the Committee shall determine and communicate to the Participant at the time that such offer is made.
7.05 Term of Awards. The term of each Award shall be for such period as may be determined by the Committee; provided, however, that in no event shall the term of any Option or a Stock Appreciation Right granted in tandem therewith exceed a period of ten years from the date of its grant (or such shorter period as may be applicable under Code Section 422 ).
7.06 Form of Payment Under Awards. Subject to the terms of the Plan and any applicable Award Agreement, and Code Section 409A to the extent applicable, and except as provided in Section 6.02(ii), payments to be made by the Company or a Subsidiary upon the grant or exercise of an Award may be made in such forms as the Committee shall determine, including without limitation, cash, Shares, other Awards, or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis , provided that such deferral complies with Code Section 409A . Such payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents in respect of installment or deferred payments denominated in Shares. Where payment is made in Shares, the Company shall be authorized to withhold from any such distribution, in order to meet the Company's obligations for the payment of withholding taxes, Shares with a Fair Market Value equal to the minimum statutory withholding for taxes (including federal and state income taxes and payroll taxes applicable to the supplemental taxable income relating to such distribution) and any other tax liabilities for which the Company has an obligation with respect relating to such distribution.
SECTION 8. General Restrictions Applicable to Awards .
8.01 Six-Month Holding Period Restrictions Under Rule 16b-3. Unless a Participant could otherwise transfer an equity security, derivative security, or Shares issued upon exercise of a derivative security granted under the Plan without incurring liability under Section 16(b) of the Exchange Act, (i) an equity security issued under the Plan, other than an equity security issued upon exercise or conversion of a derivative security granted under the Plan, shall be held for at least six months from the date of acquisition; (ii) with respect to a derivative security issued under the Plan, at least six months shall elapse from the date of acquisition of the derivative security to the date of disposition of the derivative security (other than upon exercise or conversion) or its underlying equity security; and (iii) any Award in the nature of a Stock Appreciation Right must be held for six months from the date of grant to the date of cash settlement.
8.02 Nontransferability; ISO Exercisability. Awards which constitute derivative securities (including any Option, Stock Appreciation Right, or similar right) shall not be transferable by a Participant except by will or the laws of descent and distribution or, in the case of any derivative security other than an Incentive Stock Option, pursuant to a beneficiary designation authorized under Section 8.04 or as otherwise determined by the Committee. An Incentive Stock Option shall be exercisable during the lifetime of a Participant only by such Participant or his guardian or legal representative.
8.03 Compliance with Rule 16b-3. It is the intent of the Company that this Plan comply in all respects with Rule 16b-3 in connection with any Award granted to a person who is subject to Section 16 of the Exchange Act. Accordingly, if any provision of this Plan or any Award Agreement does not comply with the requirements of Rule 16b-3 as then applicable to any such person, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements with respect to such person.
8.04 Limits on Transfer of Awards; Beneficiaries. No right or interest of a Participant in any Award shall be pledged, encumbered, or hypothecated to or in favor of any party (other than the Company or a Subsidiary), or shall be subject to any lien, obligation, or liability of such Participant to any party (other than the Company or a Subsidiary). Unless otherwise determined by the Committee (including pursuant to Section 8.02), no Award subject to any restriction shall be assignable or transferable by a Participant otherwise than by will or the laws of descent and distribution (except to the Company under the terms of the Plan); provided, however, that a Participant may, in the manner established by the Committee designate a beneficiary or beneficiaries to exercise the rights of the Participant, and to receive any distribution, with respect to any Award, upon the death of the Participant. A beneficiary, guardian, legal representative, permitted transferee, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award Agreement applicable to such Participant or agreement applicable to such, except to the extent the Plan and such Award Agreement or agreement otherwise provide with respect to such persons, and to any additional restrictions deemed necessary or appropriate by the Committee.
8.05 Registration and Listing Compliance. The Company shall not be obligated to deliver any Award or distribute any Shares with respect to any Award in a transaction subject to regulatory approval, registration, or any other applicable requirement of federal or state law, or subject to a listing requirement under any listing or similar agreement between the Company and any national securities exchange, until such laws, regulations, and contractual obligations of the Company have been complied with in full, although the Company shall be obligated to use its best efforts to obtain any such approval and comply with such requirements as promptly as practicable.
8.06 Share Restrictions. All Shares delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop-transfer order and other restrictions as the Committee may deem advisable under applicable federal or state laws, rules and regulations thereunder, and the rules of any national securities exchange on which Shares are listed. The Committee may cause (i) a legend or legends to be placed on such Shares, if they are evidenced by certificates, to make appropriate reference to such restrictions or any other restrictions that may be applicable to Shares, including under the terms of the Plan or any Award Agreement, and (ii) the creation and maintenance of a segregated restricted share account to hold any such Shares that are issued to a Participant as shares without certificates. In addition, during any period in which Awards or Shares are subject to restrictions under the terms of the Plan or any Award Agreement, or during any period during which delivery or receipt of an Award or Shares has been deferred by the Committee or a Participant, the Committee may require the Participant to enter into an agreement providing that any Shares issuable or issued pursuant to an Award shall (i) if represented by certificates, remain in the physical custody of the Company or such other person as the Committee may designate, or (ii) if issued as shares without certificates, remain in a segregated restricted share account from which they may be released only at the direction of the Company or such other person as the Committee may designate.
SECTION 9. Change of Control Provisions .
Unless otherwise determined by the Committee in connection with the grant of an Award, or unless the Participant and the Company agree in writing that the provisions of this Section 9 shall not apply, the following provisions shall apply in the event of a "Change of Control" as defined in this Section 9:
9.01 Acceleration. The following shall automatically occur upon the occurrence of a "Change of Control" (as defined in Section 9.02):
(i) 50% of all Performance Awards, Performance-Based Restricted Stock and Other Stock-Based Awards not in the nature of a right that may be exercised and which are subject to performance criteria shall be deemed fully earned and vested at a deemed achievement level equal to the higher of (x) the targeted level of performance for such award or (y) the average level (expressed as a percentage of target) of achievement in respect of similar performance stock-based awards which matured over the three fiscal years immediately preceding the year in which the Change of Control occurred (such higher level, the "Deemed Performance Award Achievement Level"); payment of each such vested award shall be made to the Participant as soon as practicable following such Change of Control (to the extent such payment does not violate Code Section 409A, if applicable) ; and the remainder of each such award shall remain outstanding (on a converted basis, if applicable) and shall remain subject to the terms and conditions of the Plan;
(ii)
Each share of Restricted Stock and each Other Stock-Based Award not in the nature of a right that may be exercised and which is not subject to performance criteria shall be fully vested and earned
;
(iii) Any Option, Stock Appreciation Right, and other Award in the nature of a right that may be exercised which was not previously exercisable and vested shall become fully exercisable and vested, and, notwithstanding any other provision of this Plan to the contrary, in the event a Participant's employment with the Company and the Subsidiaries is terminated other than for Cause during the 24-month period following a Change of Control, any Option or Stock Appreciation Right held by such Participant as of such Change of Control that remains outstanding on the date of such termination may thereafter be exercised by the Participant, to the extent it was exercisable at the time of such termination, or on such accelerated basis as the Committee may determine, until the earlier of (A) the later of (x) the second anniversary of such date of such termination or (y) the applicable date under the applicable Award Agreement, or (B) the expiration of the stated term of such Option or Stock Appreciation Right ; and
(iv) The restrictions and forfeiture conditions applicable to any other Award granted under the Plan shall lapse and such Awards shall be deemed fully vested.
9.02 Change of Control. For the purposes of this Plan, a "Change of Control" shall mean the first to occur of the following:
(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act of 20% or more of either (x) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that the following acquisitions (collectively, the "Excluded Acquisitions") shall not constitute a Change of Control (it being understood that shares acquired in an Excluded Acquisition may nevertheless be considered in determining whether any subsequent acquisition by such individual, entity or group (other than an Excluded Acquisition) constitutes a Change of Control): (i) any acquisition directly from the Company or any Subsidiary; (ii) any acquisition by the Company or any Subsidiary; (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary; (iv) any acquisition by an underwriter temporarily holding Company securities pursuant to an offering of such securities; (v) any acquisition in connection with which, pursuant to Rule 13d-1 promulgated pursuant to the Exchange Act, the individual, entity or group is permitted to, and actually does, report its beneficial ownership on Schedule 13G (or any successor Schedule); provided that, if any such individual, entity or group subsequently becomes required to or does report its beneficial ownership on Schedule 13D (or any successor Schedule), then, for purposes of this paragraph, such individual, entity or group shall be deemed to have first acquired, on the first date on which such individual, entity or group becomes required to or does so report, beneficial ownership of all of the Outstanding Company Common Stock and/or Outstanding Company Voting Securities beneficially owned by it on such date; or (vi) any acquisition in connection with a Business Combination (as hereinafter defined) which, pursuant to subparagraph ( iii ) below, does not constitute a Change of Control; or
(ii) Individuals who as of February 11, 2002 constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to such date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, entity or group other than the Board; or
(iii) Consummation of a reorganization, merger, consolidation or other business combination (any of the foregoing, a "Business Combination") of the Company or any Subsidiary with any other corporation, in any case with respect to which:
(a) the Outstanding Company Voting Securities outstanding immediately prior to such Business Combination do not, immediately following such Business Combination, continue to represent (either by remaining outstanding or being converted into voting securities of the resulting or surviving entity or any ultimate parent thereof) more than 55% of the outstanding common stock and of the then outstanding voting securities entitled to vote generally in the election of directors of the resulting or surviving entity (or any ultimate parent thereof); or
(b) less than a majority of the members of the board of directors of the resulting or surviving entity (or any ultimate parent thereof) in such Business Combination (the "New Board") consists of individuals ("Continuing Directors") who were members of the Incumbent Board (as defined in subparagraph ( ii ) above) immediately prior to consummation of such Business Combination (excluding from Continuing Directors for this purpose, however, any individual whose election or appointment to the Board was at the request, directly or indirectly, of the entity which entered into the definitive agreement with the Company or any Subsidiary providing for such Business Combination); or
( iv ) ( a ) Consummation of a sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation with respect to which, following such sale or other disposition, more than 55% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities as the case may be ; or
( b ) shareholder approval of a complete liquidation or dissolution of the Company.
The term "the sale or disposition by the Company of all or substantially all of the assets of the Company" shall mean a sale or other disposition transaction or series of related transactions involving assets of the Company or of any Subsidiary (including the stock of any Subsidiary) in which the value of the assets or stock being sold or otherwise disposed of (as measured by the purchase price being paid therefor or by such other method as the Board determines is appropriate in a case where there is no readily ascertainable purchase price) constitutes more than two-thirds of the fair market value of the Company (as hereinafter defined). The "fair market value of the Company" shall be the aggregate market value of the then Outstanding Company Common Stock (on a fully diluted basis) plus the aggregate market value of the Company's other outstanding equity securities. The aggregate market value of the shares of Outstanding Company Common Stock shall be determined by multiplying the number of shares of Outstanding Company Common Stock (on a fully diluted basis) outstanding on the date of the execution and delivery of a definitive agreement with respect to the transaction or series of related transactions (the "Transaction Date") by the average closing price of the shares of Outstanding Company Common Stock for the ten trading days immediately preceding the Transaction Date. The aggregate market value of any other equity securities of the Company shall be determined in a manner similar to that prescribed in the immediately preceding sentence for determining the aggregate market value of the shares of Outstanding Company Common Stock or by such other method as the Board shall determine is appropriate.
9.03 Benefits Upon First Anniversary of Change of Control. If a Participant remains employed by the Company or its affiliated companies, or both, as applicable, from the date of a Change of Control to the date of the first anniversary of such Change of Control, or if prior to the first anniversary of such Change of Control, the Participant's employment with the Company or its affiliates is involuntarily terminated by the Company or its affiliates, or both, as applicable, other than for Cause or Disability, the performance stock-based awards outstanding immediately prior to such Change of Control that did not become vested and earned at the time of such Change of Control pursuant to Section 9.01(i) shall (irrespective of any provision of the applicable Award Agreement providing for earlier or later vesting) become vested and earned as of the earlier of (a) the first anniversary of the Change of Control or (b) the date the Participant's employment is terminated. Payment in respect of such awards shall be made as soon as practicable following such date , but in no event later than the 15 th day of the third month following the end of the first taxable year in which the right to such payment arises . The deemed level of achievement with respect to such awards shall be the Deemed Performance Award Achievement Level.
SECTION 10. Adjustment Provisions . In the event that any dividend or other distribution (whether in the form of cash, Shares, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, affects the Shares such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of Participants under the Plan or for any other reason, then the Committee shall adjust outstanding Awards. Such adjustments may include, without limitation: (i) adjustments to any or all of (A) the number and kind of Shares or other property which may thereafter be issued in connection with Awards, (B) the number and kind of Shares or other property issued or issuable in respect of outstanding Awards, and (C) the exercise price, grant price, or purchase price relating to any Award; (ii) the cancellation of outstanding Awards in exchange for payments of cash, property or a combination thereof; (iii) the substitution of other property (including, without limitation, other securities of the Company and securities of entities other than the Company) for the Shares covered by outstanding Awards; and (iv) in connection with any spin-off, sale, or other disaffiliation of any Subsidiary or division of the Company, arranging for the assumption, or replacement with new awards based on other property (including, without limitation, other securities of the Company and securities of entities other than the Company) for the Shares covered by outstanding Awards based on other securities or other property or cash, by the affected Subsidiary or division by the entity that controls such Subsidiary or division following such disaffiliation (as well as any corresponding adjustments to Awards that remain based upon Company securities). In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence) affecting the Company or any Subsidiary or the financial statements of the Company or any Subsidiary, or in response to changes in applicable laws, regulations, or accounting principles; provided, however, that the Committee shall not have such authority to the extent reserving or exercising such authority would cause an Award intended, pursuant to Section 7.01, to qualify as "qualified performance-based compensation" not so to qualify.
SECTION 11. Changes to the Plan and Awards .
11.01 Changes to the Plan. The Board may amend, alter, suspend, discontinue or terminate the Plan without the consent of shareholders or Participants, except that any such amendment, alteration, suspension, discontinuation, or termination shall be subject to the approval of the Company's shareholders within one year after such Board action if such shareholder approval is required by any federal or state law or regulation or the rules of any stock exchange on which the Shares may be listed, or if the Board in its discretion determines that obtaining such shareholder approval is for any reason advisable; provided, however, that, except as set forth in Section 11.02 below, without the consent of an affected Participant, no amendment, alteration, suspension, discontinuation, or termination of the Plan may impair the rights of such Participant under any Award theretofore granted to him.
11.02 Changes to Awards. The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate, any Award theretofore granted and any Award Agreement relating thereto ; provided, however, that, without the consent of an affected Participant, no such amendment, alteration, suspension, discontinuation, or termination of any Award may impair the rights of such Participant under such Award.
SECTION 12. General Provisions .
12.01 No Rights to Awards. No Participant or employee shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants and employees.
12.02 No Shareholder Rights. No Award shall confer on any Participant any of the rights of a shareholder of the Company unless and until Shares are duly issued or transferred to the Participant in accordance with the terms of the Award.
12.03 Tax Withholding. The Company or any Subsidiary is authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Shares, or any payroll or other payment to a Participant, amounts of withholding and other taxes due with respect thereto, its exercise, or any payment thereunder, and to take such other action as the Committee may deem necessary or advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax liabilities relating to any Award. This authority shall include authority to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of Participant's tax obligations.
12.04 No Right to Employment. Nothing contained in the Plan or any Award Agreement shall confer, and no grant of an Award shall be construed as conferring, upon any employee any right to continue in the employ of the Company or any Subsidiary or to interfere in any way with the right of the Company or any Subsidiary to terminate his employment at any time or increase or decrease his compensation from the rate in existence at the time of granting of an Award.
12.05 Unfunded Status of Awards. The Plan is intended to constitute an "unfunded" plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided, however, that the Committee may authorize the creation of trusts or make other arrangements to meet the Company's obligations under the Plan to deliver cash, Shares, other Awards, or other property pursuant to any award, which trusts or other arrangements shall be consistent with the "unfunded" status of the Plan unless the Committee otherwise determines with the consent of each affected Participant.
12.06 Other Compensatory Arrangements. The Company or any Subsidiary shall be permitted to adopt other or additional compensation arrangements (which may include arrangements which relate to Awards), and such arrangements may be either generally applicable or applicable only in specific cases.
12.07 Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.
12.08 Governing Law. The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan, and any Award Agreement shall be determined in accordance with the laws of the State of Florida, without giving effect to principles of conflicts of laws, and applicable federal law.
Exhibit 10(f)
December 12, 2008
|
Lewis Hay, III
Chairman and Chief Executive Officer
FPL Group, Inc.
700 Universe Boulevard
Juno Beach, FL 33408
Re:
Amended and Restated Employment Letter with FPL Group, Inc. ("FPL Group")
Dear Lew:
Regarding your employment by FPL Group, or the ultimate parent entity of FPL Group, in the event that any entity, directly or through one or more subsidiaries, holds fifty percent or more of the outstanding voting stock of FPL Group (the "Corporation"), we have agreed as follows:
1. This Amended and Restated Employment Letter ("Letter Agreement") amends and restates (and when executed supersedes in its entirety) that certain Letter Agreement dated February 25, 2005, as previously amended by (a) Amendment dated as of December 15, 2005 and (b) Amendment dated December 15, 2006. The terms of your employment will be governed by the terms of this Letter Agreement. The initial term of your employment hereunder shall be three years beginning on January 1, 2005, subject to earlier termination pursuant to Section 4.
2. Commencing January 1, 2006, and each January 1 thereafter, unless notice of non-extension is given by either party no later than 90 days prior to any such scheduled extension date, the term of your employment hereunder shall be extended for an additional year, still subject to earlier termination pursuant to Section 4.
3. During the term of your employment hereunder and subject to Section 4 below, you shall serve as the Corporation's Chief Executive Officer and as a Director and Chairman of the Corporation's Board of Directors (the "Board"). You shall devote your full business time and attention to the business and affairs of the Corporation and its Affiliates, except during (a) four weeks of vacation per year, and (b) periods of incapacity due to accident or illness. Nothing in this Letter Agreement shall preclude you from devoting reasonable periods required for serving as a director or a member of an advisory committee of any organization involving no conflict of interest with the Corporation, from engaging in charitable and community activities, and from managing your personal investments; provided, however, that such activities do not materially interfere with the performance of your duties and responsibilities under this Letter Agreement and that you limit your participation on public-company boards to no more than two. As used in this Letter Agreement, the term "Affiliates" means any entity controlled by the Corporation, whether by means of ownership or otherwise. "Termination of employment" as used in this Letter Agreement shall occur only upon a "separation of service" within the meaning of Section 409A ("Section 409A") of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder.
4. Your employment hereunder may be terminated upon written notice (except that notice shall not be required in the event of a termination due to death or Disability) prior to the end of the scheduled term as follows: by the Corporation with or without Cause (as defined below); upon your death; upon your Disability (as defined below); upon your Retirement (as defined below); or upon your resignation with or without Good Reason (as defined below).
a. Termination for Cause : For purposes of this Letter Agreement, "Cause" shall mean a material and willful failure by you to meet your obligations described in Section 3, which is not remedied in a reasonable period of time after receipt of written notice from the Corporation specifying such failure. Cause shall also mean your conviction of, or plea of guilty or nolo contendere to, a felony involving (i) an act of dishonesty against the Corporation, (ii) an act of moral turpitude, or (iii) an act that causes, or could reasonably be expected to cause, material harm to the Corporation's financial status or reputation. The Corporation's termination of you for Cause shall be effected in accordance with the following procedures: The Corporation will give you written notice of its intention to terminate you for Cause, setting forth in reasonable detail the specific conduct that it considers to constitute Cause and the specific provision(s) under this Letter Agreement on which it relies. The Board will convene a special meeting held specifically for the purpose of considering your termination for Cause. This special meeting will take place not less than 30 and not more than 60 days after you have received written notice of the Corporation's intention. You will be given an opportunity, together with counsel, to be heard at this meeting. If the Board thereafter duly adopts a resolution stating that, in the good faith opinion of the Board, your conduct constitutes Cause under this Letter Agreement, your termination for Cause will be effective as of the date of such resolution, subject to your rights under Section 17.
In the event of termination of your employment by the Corporation for Cause, you shall be entitled to the following benefits ("Accrued Obligations"):
(i) any earned but unpaid base salary through your date of termination;
(ii) all benefits in accordance with the terms of all pension, 401(k), deferred compensation, SERP and Supplemental SERP plans and all other benefit plans (e.g., life insurance, disability insurance, etc.) in accordance with their terms and conditions;
(iii) all accrued vacation pay;
(iv) reimbursement of reasonable business expenses incurred prior to the date of termination; and
(v) any other or additional compensation or benefits to which you are entitled under and in accordance with the terms of applicable plans or employee benefit programs of the Corporation, including, without limitation, the Corporation's Long Term Incentive Plan (the "LTIP") and any award agreements thereunder.
The Accrued Obligations described in paragraphs a(i) and a(iii) of this Section 4 shall be paid:
(A) to the extent a deferral election has been made with respect to such amounts under the terms of the Corporation's Deferred Compensation Plan (the "Deferred Compensation Plan"), at the time and in the manner determined under such election; and
(B) in all other cases, within 30 days after your termination of employment.
The Accrued Obligations described in paragraph a(iv) of this Section 4 shall be paid within 30 days after submission of requests for reimbursement in accordance with applicable policies and procedures of the Corporation and in any event no later than the end of the calendar year following the calendar year in which termination occurs. The Accrued Obligations described in paragraphs a(ii) and a(v) of this Section 4 shall be paid within the periods for payment specified in the benefit plans or employee programs (and any award agreements thereunder) referred to in such paragraphs a(ii) and a(v).
b. Death, Disability or Retirement . For purposes of this Letter Agreement, "Disability" shall mean that you have been determined to be eligible for long-term disability benefits under the executive long-term disability plan sponsored by the Corporation applicable to you and you shall be deemed to have incurred a Disability as of the date such determination is made. Your employment shall be automatically terminated as of the date of your death or, if applicable, as of the date of your being determined to have incurred a Disability, and in any event not later than the date which is after 29 months of Disability leave. Your employment may also be voluntarily terminated by your Retirement, which shall mean (A) your voluntary termination of employment on or after your normal retirement date (as defined under the provisions of the FPL Group Employee Pension Plan (the "Pension Plan")) or, (B) with the consent of the Corporation's Board, prior to your normal retirement date (an "Approved Early Retirement"). In any such case, you, or your estate or legal representative, as applicable, shall be entitled to the following benefits:
(i) the Accrued Obligations listed in paragraph a. of this Section 4, as well as any earned but unpaid annual incentive bonus under the Corporation's Annual Incentive Plan (the "Annual Incentive Plan") or any similar plan or arrangement for the prior fiscal year;
(ii) pro rata portion of your current annual incentive bonus at the average annual achievement level for the prior two years; and
(iii) in the event of an Approved Early Retirement, a pro rata portion of each outstanding and unvested LTIP award, but only if and to the extent that you would have been so entitled under such award had the Corporation requested your early retirement. The additional payments described in paragraphs b(i) (other than the payments described therein which are referred to in paragraphs a(ii), a(iv) and a(v) of this Section 4), b(ii) and b(iii) of this Section 4 shall be paid:
(A) to the extent a deferral election has been made under the Deferred Compensation Plan with respect to such amounts if paid under the terms of the Annual Incentive Plan or LTIP, at the time and in the manner determined under such election; and
(B) in all other cases, 30 days after your termination of employment.
c. Termination by Corporation Without Cause or by you for Good Reason.
For purposes of this Letter Agreement "Good Reason" shall mean any of the following:
(i) a material reduction in the amount of your then current base salary, target annual incentive bonus, target LTIP compensation, or aggregate employee benefits, other than any such reduction that the Board, in good faith, believes to be in the best interests of the Corporation and that is uniformly applicable to all other senior executives of the Corporation;
(ii) the removal of, or failure to elect or reelect, you as Chief Executive Officer or Chairman of the Board of the Corporation; provided, however, (1) the failure to elect you as Chairman of the Board shall not, by itself, constitute Good Reason if such failure results from any law, regulation or listing requirement to the effect that the positions of Chairman of the Board and Chief Executive Officer shall not be held by the same individual or that the Chairman of the Corporation shall be independent; or if the Board elects a non-executive Chairman whose duties as Chairman consist primarily of establishing the Board agenda and presiding over Board meetings and shareholder meetings;
(iii) the assignment to you of duties or responsibilities which are materially inconsistent with your current position, excluding for this purpose an isolated, insubstantial, and inadvertent failure not occurring in bad faith which is remedied by the Corporation reasonably promptly after receipt of written notice thereof from you;
(iv) the Corporation's amendment or termination of this Letter Agreement without your prior written consent; or
(v) any material violation by the Corporation of the provisions of this Letter Agreement other than a violation that is remedied by the Corporation reasonably promptly after receipt of written notice thereof given by you.
If the Corporation should terminate your employment without Cause, or in the event you terminate employment for Good Reason, you shall be entitled to the following benefits ("Termination Benefits"):
(1) the Accrued Obligations listed in paragraph a. of this Section 4, as well as any earned but unpaid annual incentive bonus under the Annual Incentive Plan or any similar plan or arrangement for the prior fiscal year;
(2) pro rata portion of your current annual incentive bonus at the higher of (A) the average annual incentive bonus you received for the prior two years or, (B) target annual bonus for the year in which your termination occurs
(3) two times your then current base salary;
(4) two times the higher of (A) the average annual incentive bonus you received for the prior two years, or (B) your target annual incentive bonus;
(5) pro rata portion of each outstanding and unvested Performance Share Grant in progress under the LTIP. With respect to the fiscal year in which termination of employment occurs, the performance achievement for such year under each Performance Share Grant shall be calculated based on the assumption that the target performance for that year is achieved;
(6) notwithstanding the terms and conditions of any applicable Restricted Stock or Stock Option agreements, continued vesting in all unvested Restricted Stock and Stock Options outstanding under the LTIP in accordance with relevant anniversary dates and for a period of two years following the date of termination;
(7) continued participation in the medical, dental, hospitalization, short-term and long-term disability and group life insurance coverage plans of the Corporation ("Welfare Plans") in which you were participating on the date of termination of your employment until the earlier of:
(A) the end of the two-year period following your termination of employment; and
(B) the date, or dates you receive comparable coverage and benefits under the plans and programs of a subsequent employer;
provided, however, that if under the terms of any such Welfare Plan you cannot continue to participate in such Welfare Plan, the Corporation shall otherwise provide such benefits on the same after-tax basis as if continued participation had been permitted; and provided, further, however, that at the end of your period of continued participation (determined under (A) or (B) above, as applicable), the Corporation will provide you with continued medical coverage at your own expense pursuant to COBRA; and
(8) the cash value of two additional years of service credit under all applicable pension, 401(k), SERP and Supplemental SERP plans.
The additional payments described in paragraphs c(1) (other than the payments described therein which are referred to in paragraphs a(ii), a(iv) and a(v) of this Section 4), c(5) and c(6) of this Section 4 shall be paid:
(A) to the extent a deferral election has been made under the Deferred Compensation Plan with respect to such amounts if paid under the terms of the Annual Incentive Plan or LTIP, at the time and in the manner determined under such election; and
(B) in all other cases, 30 days after your termination of employment (unless the revocation period for the release of claims referred to in Section 10(a) has not yet lapsed, in which case the payment shall be made ten days after the lapse of such revocation period).
The Termination Benefits described in paragraphs c(2), c(3), c(4) and c(8) of this Section 4 shall be paid 30 days after your termination of employment (unless the revocation period for the release of claims referred to in Section 10(a) has not yet lapsed, in which case the payment shall be made ten days after the lapse of such revocation period).
d. Termination without Good Reason . In the event of a termination of employment by you without Good Reason, you shall be entitled to the Accrued Obligations listed in paragraph a. of this Section 4, as well as any earned but unpaid annual incentive bonus under the Annual Incentive Plan or any similar plan or arrangement for the prior fiscal year.
e. Section 409A . You and the Corporation acknowledge that each of the payments and benefits promised to you under this Agreement must either comply with the requirements of Section 409A and the regulations thereunder or qualify for an exception from compliance. To that end, you and the Corporation agree that:
(i) In the case of Termination Benefits that are not exempt from Section 409A, as mutually determined by the Corporation and you, payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of the lesser of (x) the prime rate and (y) 120% of the applicable federal long-term rate (as prescribed under Section 1274(d) of the Code) per annum, compounded quarterly from the date of your termination of employment to the date of actual payment) to and paid on the later of the earliest date on which you experience a separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if you are a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i), including a determination under the Corporation's policy for determining such individuals, as permitted by Treasury Regulation Section 1.409A-1(i)) on the date of your separation from service, the first day of the seventh month following your separation from service.
(ii) This Letter Agreement shall be subject to amendment in the future in such manner as the Corporation and you shall reasonably deem necessary or appropriate to effect compliance with Section 409A and the regulations thereunder and to avoid the imposition of penalties and additional taxes under Section 409A, it being the express intent of the parties that neither the Corporation nor you shall be subject to penalties or taxes under Section 409A by virtue of the provisions of this Letter Agreement.
f. Certain Benefits . During the term of your employment, any unused vacation days shall be carried over from year to year. Upon termination of your employment for any reason, any unused vacation days shall be reimbursed to you at your then current base salary rate. On your termination of employment other than for Cause, you will be entitled to enroll in Access Only Benefits, as defined in the Retiree Benefits Plan for Employees of FPL Group, Inc., as amended and restated effective January 1, 2008 (the "Retiree Benefits Plan"), or in a comparable medical benefits arrangement, if you satisfy the eligibility requirements as stated in Appendix B to the Retiree Benefits Plan as in effect as of the date of this Letter Agreement, even if Access Only Benefits, or comparable medical benefits, are no longer being provided to other employees of the Corporation. Such medical benefits will be provided to you to the extent that such coverage is available under the Corporation's health, dental and vision plans or can be obtained on commercially reasonable terms.
5. During your employment with the Corporation and for a period of two years after the date your employment is terminated for whatever reason, you will not directly or indirectly hire, employ, or solicit the employment or services of (whether as an employee, officer, director, agent, consultant or independent contractor), any person who is serving as an employee, representative, officer or director of the Corporation or any of its Affiliates (or who served in such capacity at any time during the six-month period preceding such hiring, employment, or solicitation) without the prior written consent of the Corporation or such Affiliate, as applicable.
6. You shall hold in a fiduciary capacity for the benefit of the Corporation all secret or confidential information, knowledge or data relating to the Corporation or any of its Affiliates and their respective businesses, which is obtained by you during your employment by the Corporation or any of its Affiliates and which is not public knowledge. While you are employed by the Corporation and thereafter, you shall not, without prior written consent of the Corporation or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Corporation and those designated by it.
7. You acknowledge that a breach of the restrictions contained in Sections 5 or 6 will cause irreparable damage to the Corporation and its Affiliates, the exact amount of which will be difficult to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, you and the Corporation agree that if you breach any of the restrictions contained in Sections 5 or 6, then the Corporation and its Affiliates shall be entitled to injunctive relief, without posting bond or other security, in addition to any other remedy or relief to which they may be entitled. You further agree that if you breach any of the restrictions contained in Sections 5 or 6, then in addition to being subject to injunctive relief and any other remedy or relief to which the Corporation and its Affiliates may be entitled, you shall forfeit your right to all entitlements under this Letter Agreement that have not yet been paid or provided to you, including your right to any unpaid Termination Benefits; provided, however, that such forfeiture shall not apply to any entitlements included in the Accrued Obligations or where not permitted by applicable law.
8. In the event your employment is terminated for any reason, you shall not be required to mitigate any payment or benefits provided to you by the Corporation by seeking other employment.
9. Your Executive Retention Employment Agreement dated June 17, 2002, as amended through the date hereof ("Executive Retention Employment Agreement"), remains in full force and effect and is not modified or amended in any manner whatsoever as a result of your entering into this Letter Agreement. In the event of an "Effective Date" under and as defined in the Executive Retention Employment Agreement, you shall be entitled to the compensation and benefits provided under the Executive Retention Employment Agreement if your employment terminates under the circumstances provided under the Executive Retention Employment Agreement; provided, however, that such compensation and benefits shall be in lieu of any entitlements payable or provided to you under this Letter Agreement.
10. Notwithstanding anything herein to the contrary, and except in the case of death, it shall be a condition to your receiving any payments or benefits referred to in Section 4 (other than the Accrued Obligations) that you shall have (a) executed and delivered to the Corporation a release of claims against the Corporation, such release to be in the Corporation's then standard form of release, and (b) executed and delivered to the Corporation resignations of all officer and director positions you hold with the Corporation or its Affiliates, in each case no later than 45 days after your termination of employment, unless there is a genuine dispute as to your substantive rights under this Letter Agreement within the meaning of Treasury Regulation 1.409A-3(g) (or any successor provision).
11. You acknowledge that you have received the advice of counsel with respect to the matters contemplated in this Letter Agreement and the Corporation has agreed to pay directly your reasonable legal fees and expenses.
12. This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Florida, without reference to rules relating to conflicts of law.
13. Your employment pursuant to this Letter Agreement is not a guarantee of employment. As stated in this Letter Agreement, the Corporation may terminate your employment on written notice; provided, however, that in certain instances as specified in Section 4, such termination may require the Corporation to provide compensation or other benefits to you.
14. This Letter Agreement between you and the Corporation sets forth the entire agreement with respect to the subject matters hereof and supersedes all prior understandings and agreements (except the Executive Retention Employment Agreement) as to employment of you by the Corporation.
15 . This Letter Agreement cannot be amended, changed or modified without the written consent of you and the Corporation.
16. If any one or more of the provisions contained in this Letter Agreement shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
17. Any controversy or claim arising out of or relating to this Letter Agreement, or any breach thereof, shall be settled by arbitration conducted in accordance with the Florida Arbitration Code (Fla. Stat. Sec. 682.01 et seq.) and judgment upon such award rendered by the arbitrator may be entered in any court having jurisdiction thereof. There will be one arbitrator, who shall be mutually selected by you and the Corporation and if agreement cannot be reached, then the arbitrator shall be selected from the CPR National Panel of Distinguished Neutrals by a senior executive official of the CPR Institute for Dispute Resolution. The arbitration shall be held in West Palm Beach, Florida, or such other place as may be agreed upon at the time by the parties to the arbitration. The cost of arbitration shall be borne among the parties to the arbitration as determined by the arbitrator. It is the intention of the parties that to the extent your position is upheld, your expenses (including cost of witnesses, evidence, and attorneys), as determined by the arbitrator, shall be reimbursed by the Corporation.
18. This Letter Agreement shall be binding upon any and all successors to the Corporation.
Sincerely,
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/s/ SHERRY S. BARRAT |
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By:
Sherry S. Barrat
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Agreed to and accepted:
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Exhibit 10(g)
AMENDED AND RESTATED
EXECUTIVE RETENTION EMPLOYMENT AGREEMENT
Amended and Restated Executive Retention Employment Agreement between FPL Group, Inc., a Florida corporation (the "Company"), and ___________ (the "Executive"), originally dated as of _________ and hereby amended and completely restated as of December 12, 2008. The Board of Directors of the Company (the "Board") has determined that it is in the best interests of the Company and its shareholders to assure that the Company and its Affiliated Companies will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Potential Change of Control or a Change of Control (each as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by the circumstances surrounding a Potential Change of Control or a Change of Control and to encourage the Executive's full attention and dedication to the Company and its Affiliated Companies currently and in the event of any Potential Change of Control or Change of Control (and, under certain circumstances, in the event of the termination or abandonment of a Change of Control transaction), and to provide the Executive with compensation and benefits arrangements which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations which may compete with the Company for the services of the Executive. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Amended and Restated Executive Retention Employment Agreement (the "Agreement"). The Agreement supersedes and replaces in its entirety the predecessor Executive Retention Employment Agreement dated ________between the Company and the Executive. [Note: Agreements for Messrs. Sieving and Poppell are not amended and restated; references related to amendment and restatement are therefore omitted.]
Therefore, the Company and the Executive agree as follows:
The effective date of this Agreement (the "Effective Date") shall be the date on which (i) a Potential Change of Control occurs, (ii) the Board approves a plan of complete liquidation or dissolution of the Company, (iii) a Change of Control occurs pursuant to Section 2(a)(1) or (2) below or (iv) a definitive agreement is signed by the Company which provides for a transaction that, if approved by shareholders or consummated, as applicable, would result in a Change of Control pursuant to Section 2(a)(3) or (4) below; provided, however, that any of the foregoing which may have occurred prior to the date hereof shall be disregarded. Anything in this Agreement to the contrary notwithstanding, if, prior to the Effective Date, the Executive's employment with the Company or its Affiliated Companies was terminated by the Company or its Affiliated Companies, or both, as applicable, other than for Cause or Disability (each as defined below) or by the Executive for Good Reason (as defined below) and the Executive can reasonably demonstrate that such termination (or the event constituting Good Reason) took place (a) at the request or direction of a third party who took action that caused a Potential Change of Control or (b) in contemplation of an event that would give rise to an Effective Date, an Effective Date will be deemed to have occurred ("Deemed Effective Date") immediately prior to the Date of Termination (as defined in Section 7(e) below), provided that a Change of Control occurs within a two-year period following such Date of Termination. As used in this Agreement, the term "Affiliated Companies" shall include any corporation or other entity controlled by, controlling or under common control with the Company and the term "Subsidiary" shall mean (x) any corporation or other entity (other than the Company) with respect to which the Company owns, directly or indirectly, 50% or more of the total combined voting power of all classes of stock or other ownership interests or (y) any other related entity which may be designated by the Board as a Subsidiary, provided such entity could be considered a subsidiary according to generally accepted accounting principles.
The term "the sale or disposition by the Company of all or substantially all of the assets of the Company" shall mean a sale or other disposition transaction or series of related transactions involving assets of the Company or of any Subsidiary (including the stock of any Subsidiary) in which the value of the assets or stock being sold or otherwise disposed of (as measured by the purchase price being paid therefor or by such other method as the Board determines is appropriate in a case where there is no readily ascertainable purchase price) constitutes more than two-thirds of the fair market value of the Company (as hereinafter defined). The "fair market value of the Company" shall be the aggregate market value of the then Outstanding Company Common Stock (on a fully diluted basis) plus the aggregate market value of the Company's other outstanding equity securities. The aggregate market value of the shares of Outstanding Company Common Stock shall be determined by multiplying the number of shares of Outstanding Company Common Stock (on a fully diluted basis) outstanding on the date of the execution and delivery of a definitive agreement with respect to the transaction or series of related transactions (the "Transaction Date") by the average closing price of the shares of Outstanding Company Common Stock for the ten trading days immediately preceding the Transaction Date. The aggregate market value of any other equity securities of the Company shall be determined in a manner similar to that prescribed in the immediately preceding sentence for determining the aggregate market value of the shares of Outstanding Company Common Stock or by such other method as the Board shall determine is appropriate.
During the Employment Period, the Executive's status, offices, titles, and reporting requirements with the Company or its Affiliated Companies or both, as the case may be, shall be commensurate with those in effect during the 90-day period immediately preceding the Effective Date. The duties and responsibilities assigned to the Executive may be increased, decreased or otherwise changed during the Employment Period, provided that the duties and responsibilities assigned to the Executive at any given time are not materially inconsistent with the Executive's status, offices, titles, and reporting requirements as in effect during the 90-day period immediately preceding the Effective Date. The Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any location less than 20 miles from such location, although the Executive understands and agrees that he may be required to travel from time to time for business purposes.
During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote substantially all of his time and attention during normal business hours to the business and affairs of the Company and its Affiliated Companies and to use his reasonable best efforts to perform faithfully and efficiently the duties and responsibilities assigned to him hereunder. During the Employment Period it shall not be a violation of this Agreement for the Executive to serve on corporate, civic or charitable boards or committees, deliver lectures, fulfill speaking engagements or teach at educational institutions and devote reasonable amounts of time to the management of his and his family's personal investments and affairs, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company or its Affiliated Companies in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the reinstatement or continued conduct of such activities (or the reinstatement or conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company and its Affiliated Companies.
During the Employment Period, the Executive shall be compensated as follows:
In addition, during the Employment Period the Executive shall be entitled under this Agreement to the Payment in Lieu of Lost Future Benefits described in Annex A attached hereto and made a part hereof by this reference ("Payment in Lieu of Lost Future Benefits"). The vesting of such Payment in Lieu of Lost Future Benefits shall be determined in accordance with Section 8 of this Agreement. The payment of such amount shall be determined in accordance with Section 8 of this Agreement, to the extent the ability to make such payment under Section 8 is consistent with the limitations of Code Section 409A and the terms of the Company's Supplemental Executive Retirement Plan.
To the extent that the payment of this amount pursuant to Section 8 would be inconsistent with the limitations of Code Section 409A or the terms of the Company's Supplemental Executive Retirement Plan, the payment of this amount described in Annex A shall be made under the terms of the Company's Supplemental Executive Retirement Plan, pursuant to the provisions therein relating to post-2005 accrued benefits that are subject to Code Section 409A.
If as a result of the Change of Control, the Outstanding Company Common Stock is exchanged for or converted into a different form of equity security and/or the right to receive other property (including cash), payment in respect of the underlying awards described in subparagraphs (1), (2) and, with respect to stock-based awards, (4) hereof shall, to the maximum extent practicable, be made in the same form. If a Change of Control occurs and Company shareholders do not, as a group, receive consideration in connection with such Change of Control, then payment in respect of awards described in subparagraphs (1), (2) and, with respect to stock-based awards, (4) hereof shall be made in cash based on the average closing price of the shares of Outstanding Company Common Stock for the 20 trading days immediately preceding the date of the Change of Control.
(b) Benefits Upon First Anniversary of Change of Control . If the Executive has remained employed by the Company or one of its Affiliated Companies from the date of a Change of Control which occurs during the Employment Period (including on the Effective Date) to the date of the first anniversary of such Change of Control, the performance stock-based awards outstanding immediately prior to such Change of Control that did not become vested and earned at the time of such Change of Control pursuant to Section 6(a)(1) shall become vested and earned as of such first anniversary date and payment in respect of such awards shall be made as soon as practicable following such date, but in no event later than the 15th day of the third month following the end of the first taxable year in which the right to such payment arises. The deemed level of achievement with respect to such awards, as well as the form of payment thereof, shall be as described in paragraph (a) above.
For purposes of this Section 7(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive.
In determining the pro rata portion of an award that shall become fully vested and earned or fully vested and exercisable pursuant to this paragraph (3), an Executive shall be deemed to have remained employed to the end of the Employment Period (determined without regard to his earlier termination of employment). Anything to the contrary notwithstanding, an award shall not become vested and earned or vested and exercisable hereunder (and instead shall be cancelled) to the extent that pursuant to Section 6 or Section 8(a)(2) hereof, a similar predecessor award in respect of the same performance or vesting period shall have become vested and earned, shall have become vested and exercisable or shall have been paid. Payment in respect of the underlying awards described in subparagraphs (A), (B) and (D) hereof shall be made in the shares to which such awards relate if such shares are then admitted for trading on a national securities exchange or are then admitted for quotation on a national quotation system as soon as practicable following the Date of Termination, but in no event later than the 15th day of the third month following the end of the first taxable year in which the right to such payment arises. If such shares are not so admitted, payment in respect of the underlying awards described in subparagraphs (A), (B) and (D) hereof shall be made in cash based on the fair market value of the shares (as determined by the board of directors of the issuer of such shares in good faith) to which such awards relate. Any portion of an award that does not become vested and earned or vested and exercisable pursuant to this paragraph (3) shall be cancelled as of the Date of Termination.
To the extent that any of these benefits is determined to be deferred compensation subject to Code Section 409A (and ineligible for any exception from the application of Code Section 409A), payment shall not be made prior to, and shall, if necessary, be deferred to and paid (with interest using 120% of the applicable federal long-term rate, with compounding, as prescribed under Code Section 1274(d)) on the first day of the seventh month following the date on which the Executive experiences a separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)).
Notwithstanding the foregoing, the benefits described in paragraphs (A),(B) and (D) above are limited to expenses incurred no later than the end of the second calendar year following the Executive's termination, and the reimbursements will be made timely upon receipt of the Executive's request for payment (but in no event later than the third year following such termination).
For purposes of this paragraph (c), pro ration of the foregoing awards shall be determined in accordance with the past practice of the Company generally applicable to peer executives whose employment had been involuntarily terminated.
Notwithstanding cancellation of awards hereunder, if a Change of Control occurs following the Date of Termination and the Board determines in good faith prior to the Change of Control that there is a reasonable relationship between the Change of Control and the events or circumstances surrounding the Executive's termination, then the Company shall pay to the Executive, on the 60th day following the Change of Control, a lump sum cash amount (determined by the Board in good faith) which, when added to the value received by the Executive under the provisions of clauses (2)-(5) above, will provide to Executive an aggregate value equal to the aggregate value that would have been provided to the Executive under Section 6(a) and Section 8(a)(2) hereof had the Executive remained employed to the date of the Change of Control and been involuntarily terminated without Cause immediately thereafter.
Except as otherwise expressly provided for in this Agreement, nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by the Company or any of its Affiliated Companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its Affiliated Companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its Affiliated Companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement and consistent with Code Section 409A.
The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and, except as otherwise expressly provided for in this Agreement, such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay, to the fullest extent permitted by law (but only to the extent consistent with Code Section 409A), all legal fees and expenses which the Executive may reasonably incur at all stages of proceedings, including, without limitation, preparation and appellate review, as a result of any contest (regardless of whether formal legal proceedings are ever commenced and regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Code Section 7872(f)(2)(A).
11. Certain Additional Payments by the Company .
(a) Anything in any section of this Agreement other than this Section 11 to the contrary notwithstanding, in the event it shall be determined that any Payment (as hereinafter defined) would be subject to the Excise Tax (as hereinafter defined), then the Executive shall be entitled to receive an additional payment (the "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income or employment taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, but excluding any income taxes and penalties imposed pursuant to Section 409A of the Code, the Executive retains a portion of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments; provided that , if it is determined that the Executive is entitled to the Gross-Up Payment, but that the Parachute Value (as hereinafter defined) of all Payments does not exceed 110% of the Safe Harbor Amount (as hereinafter defined), then no Gross-Up Payment shall be made to the Executive and the amounts payable under this Agreement shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. To the extent that the payment of any compensation or benefits to Executive from the Company is required to be reduced by this Section 11, such reduction shall be implemented by determining the "Parachute Payment Ratio" (as hereinafter defined) for each "parachute payment" (within the meaning of Section 280G of the Code and then reducing the parachute payments in order beginning with the parachute payment with the highest Parachute Payment Ratio. For parachute payments with the same Parachute Payment Ratio, such parachute payments shall be reduced based on the time of payment of such parachute payments, with amounts having later payment dates being reduced first. For parachute payments with the same Parachute Payment Ratio and the same time of payment, such parachute payments shall be reduced on a pro rata basis (but not below zero) prior to reducing parachute payments with a lower Parachute Payment Ratio. Any Gross-Up Payment, as determined pursuant to this Section 11, shall be paid by the Company to the Executive no later than the end of the taxable year following the taxable year in which the related taxes are remitted by the Executive.
(b) Definitions . The following terms shall have the following meanings for purposes of this Section 11.
(i) " Excise Tax " shall mean the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.
(ii) " Parachute Payment Ratio " shall mean a fraction the numerator of which is the value of the applicable parachute payment for purposes of Section 280G of the Code and the denominator of which is the intrinsic value of such parachute payment.
(iii) " Parachute Value " of a Payment shall mean the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a "parachute payment" under Section 280G(b)(2), as determined for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
(iv) A " Payment " shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Executive, whether paid or payable pursuant to this Agreement or otherwise.
(v) The " Safe Harbor Amount " means 2.99 times the Executive's "base amount," within the meaning of Section 280G(b)(3) of the Code.
(c) In the event that Federal or state legislation is enacted by imposing additional excise or supplementary income taxes on amounts payable or benefits provided to the Executive (other than a mere change in marginal income tax rates), the Company agrees to review the Agreement with the Executive and to consider in good faith any changes hereto that may be required to preserve the full amount of all Payments and the economic purposes of the foregoing provisions of this Section 11.
13. Indemnification . The Company will, to the fullest extent permitted by law, indemnify the Executive in accordance with the terms of Article VI of the Company's bylaws as in effect on the date hereof, a copy of which Article VI is attached to this Agreement as Annex B and made a part hereof by this reference. This indemnification provision shall survive the expiration or other termination of this Agreement.
If to the Executive:
If to the Company:
FPL Group, Inc.
700 Universe Boulevard
Juno Beach, Florida 33408
Attention: Executive Vice President, Human Resources
or such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
Notwithstanding anything herein to the contrary, and except in the case of death, it shall be a condition to the Executive receiving any payments or benefits under this Agreement that the Executive shall have (a) executed and delivered to the Company a release of claims against the Company, such release to be in the Company's then standard form of release; and (b) executed and delivered to the Company resignations of all officer and director positions the Executive holds with the Company or its Affiliated Companies, in each case no later than forty-five (45) days after the Date of Termination unless there is a genuine dispute as to the Executive's substantive rights under this Agreement within the meaning of Treasury Regulation 1.409A-3(g) (or any successor provision).
The Executive and the Company acknowledge that the benefits and payments provided under this Agreement are intended to comply fully with the requirements of Code Section 409A. This Agreement shall be construed and administered as necessary to comply with Code Section 409A and shall be subject to amendment in the future, in such a manner as the Company may deem necessary or appropriate to attain compliance; provided, however, that any such amendment shall provide the Executive with benefits and payments that are substantially economically equivalent to the benefits and payments that would have been made to the Executive absent such amendment and the requirements of Code Section 409A.
16. Retention Payment [Messrs. Robo, Stall, Davidson and McGrath only]
If an Effective Date occurs under clause (iv) of Section 1 hereof and if, by reason of the termination or abandonment of the transaction contemplated by the definitive agreement referred to in said clause (iv), the Board adopts a resolution pursuant to Section 3(b) hereof that terminates the Employment Period, then so long as the Executive had remained employed to the date of termination or abandonment of such transaction, the Company shall pay the Executive in a lump sum in cash, within 30 days after the date of the adoption of such resolution, an amount equal to 50% of the sum of the Executive's Annual Base Salary and Annual Bonus (each as in effect as of the date of such termination or abandonment).
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and the Company has caused this Amended and Restated Executive Retention Employment Agreement to be executed in its name on its behalf, all as of the day and year first above written.
EXECUTIVE
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FPL GROUP, INC.
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ANNEX A
TO THE
FORM OF AMENDED AND RESTATED
EXECUTIVE RETENTION EMPLOYMENT AGREEMENT
PAYMENT IN LIEU OF LOST FUTURE BENEFITS
(1) Payment in Lieu of Lost Future Benefits.
(a) In General. The Payment in Lieu of Lost Future Benefits to which the Executive shall be entitled under this Agreement shall be (i) the supplemental pension benefit described in Paragraph 1(b) of this Annex A, and (ii) the supplemental matching contribution account described in Paragraph 1(c) of this Annex A.
(b) Supplemental Pension Benefit. The "supplemental pension benefit" shall be the greater of (i) the supplemental cash balance accrued benefit described in Paragraph 1(b)(1) of this Annex A, or (ii) the supplemental unit credit accrued benefit described in Paragraph 1(b)(2) of this Annex A.
(1) The "supplemental cash balance accrued benefit" is the difference, if any, between (A) and (B) where:
(A) is the benefit to which the Executive would be entitled under the Pension Plan as in effect immediately prior to the Change of Control or, if more favorable to the Executive, as in effect generally at any time thereafter during the Employment Period with respect to other peer executives of the Company and its Affiliated Companies, expressed in the normal form of benefit, if such benefit was computed (i) as if benefits under such plan were based upon the Executive's Bonus Compensation (within the meaning of the SERP as in effect immediately prior to the Change of Control), (ii) without the annual compensation limitation imposed by Code Section 401(a)(17), and (iii) without the restrictions or the limitations imposed by Code Section 415(b); and
(B) is the sum of the benefits payable to the Executive under the Pension Plan and the Supplemental Retirement Plans, expressed in the normal form of benefit.
(2) The "supplemental unit credit accrued benefit" is the difference, if any, between (A) and (B) where:
(A) is the benefit to which the Executive would be entitled under the Prior Pension Plan (within the meaning of the SERP as in effect immediately prior to the Change of Control) (provided that the Executive was actually a participant in the Prior Pension Plan), expressed in the normal form of benefit, if such benefit was computed (i) as if benefits under such plan were based upon the Executive's Bonus Compensation, (ii) without the annual compensation limitation imposed by Code Section 401(a)(17), and (iii) without the restrictions or the limitations imposed by Code Section 415(b); and
(B) is the sum of the benefits payable to the Executive under the Pension Plan and the Supplemental Retirement Plans, expressed in the normal form of benefit.
(c) Supplemental Matching Contribution Account. The "supplemental matching contribution account" shall be an account that is credited annually with (i) supplemental matching contributions described in Paragraph 1(c)(1) of this Annex A, and (ii) theoretical earnings described in Paragraph 1(c)(2) of this Annex A.
(1) "Supplemental matching contributions" shall be for each year ending on or prior to the Effective Date in which the Executive participated in the Supplemental Retirement Plans and for each year ending after the Effective Date in which the Executive performs services for the Company or its Affiliated Companies the difference, if any, between (A) and (B) where:
(A) is the matching contribution allocation for such year to which the Executive would be entitled under the Retirement Savings Plan as in effect immediately prior to the Change of Control or, if more favorable to the Executive, as in effect generally at any time thereafter during the Employment Period with respect to other peer executives of the Company and its Affiliated Companies if such allocation were computed (i) as if the matching contribution allocation under such plan was based upon the Executive's Bonus Compensation, (ii) without the annual compensation limitation imposed by Code Section 401(a)(17), (iii) without the restrictions or the limitations imposed by Code Section 415(c), and (iv) as if he made After Tax Contributions (within the meaning of the Retirement Savings Plan) and Pretax Contributions (within the meaning of the Retirement Savings Plan) at the same percentage of Bonus Compensation as he made such contributions to the Retirement Savings Plan for such years; and
(B) is the sum of the matching contributions allocated or credited to the Executive under the Retirement Savings Plan and the Supplemental Retirement Plans for such year.
(2) "Theoretical earnings" shall be the income, gains and losses which would have been credited on the Executive's supplemental matching contribution account balance if such account were invested in the Company Stock Fund (within the meaning of the Retirement Savings Plan) offered as a part of the Retirement Savings Plan.
(2) Construction and Definitions.
Unless defined below or otherwise in this Annex A, all of the capitalized terms used in this Annex A shall have the meanings assigned to them in this Agreement:
(a) "Projected Years of Service" shall mean the Years of Service (within the meaning of the SERP as in effect immediately prior to the Change of Control). Notwithstanding the foregoing and except in the event the Executive terminates employment during the Employment Period other than for Good Reason, in determining the Executive's Years of Service, in addition to his actual Years of Service he shall be treated as if his employment terminated on the later of the third [second - Messrs. Stall and Rodriguez only] anniversary of the Date of Termination or the last day of the Employment Period.
(b) "Projected Age" shall mean the age that the Executive will have attained on the later of the third [second - Messrs. Stall and Rodriguez only] anniversary of the Date of Termination or the last day of the Employment Period, except that in the event the Executive terminates employment during the Employment Period other than for Good Reason, "Projected Age" shall mean the age of the Executive on the Date of Termination.
ANNEX B
TO THE
FORM OF AMENDED AND RESTATED
EXECUTIVE RETENTION EMPLOYMENT AGREEMENT
FPL GROUP, INC. AMENDED AND RESTATED BYLAWS
ARTICLE VI. INDEMNIFICATION/ADVANCEMENT OF EXPENSES
Section 1. Right to Indemnification . Each person who was or is made a party or is threatened to be made a party to or was or is called as a witness or was or is otherwise involved in any Proceeding in connection with his or her status as an Indemnified Person, shall be indemnified and held harmless by the Company to the fullest extent permitted under the Florida Business Corporation Act (the "Act"), as the same now exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than the Act permitted the Company to provide prior to such amendment). Such indemnification shall cover all expenses incurred by an Indemnified Person (including, but not limited to, attorneys' fees and other expenses of litigation) and all liabilities and losses (including, but not limited to, judgments, fines, ERISA or other excise taxes or penalties and amounts paid or to be paid in settlement) incurred by such person in connection therewith.
Notwithstanding the foregoing, except with respect to indemnification specified in Section 3 of this Article VI, the Company shall indemnify an Indemnified Person in connection with a Proceeding (or part thereof) initiated by such person only if authorization for such Proceeding (or part thereof) was not denied by the board of directors of the Company prior to 60 days after receipt of notice thereof from such person.
For purposes of this Article VI:
(i) a "Proceeding" is an action, suit or proceeding, whether civil, criminal, administrative or investigative, and any appeal therefrom;
(ii) an "Indemnified Person" is a person who is, or who was (whether at the time the facts or circumstances underlying the Proceeding occurred or were alleged to have occurred or at any other time), (A) a director or officer of the Company, (B) a director, officer or other employee of the Company serving as a trustee or fiduciary of an employee benefit plan of the Company, (C) an agent or non-officer employee of the Company as to whom the Company has agreed to grant such indemnity, or (D) serving at the request of the Company in any capacity with any entity or enterprise other than the Company and as to whom the Company has agreed to grant such indemnity.
Section 2. Expenses . Expenses, including attorneys' fees, incurred by an Indemnified Person in defending or otherwise being involved in a Proceeding in connection with his or her status as an Indemnified Person shall be paid by the Company in advance of the final disposition of such Proceeding, including any appeal therefrom, (i) in the case of (A) a director or officer, or former director or officer, of the Company or (B) a director, officer or other employee, or former director, officer or other employee, of the Company serving as a trustee or fiduciary of any employee benefit plan of the Company, upon receipt of an undertaking ("Undertaking") by or on behalf of such person to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Company; or (ii) in the case of any other Indemnified Person, upon such terms and as the board of directors, the chairman of the board or the president of the Company deems appropriate.
Notwithstanding the foregoing, in connection with a Proceeding (or part thereof) initiated by such person, except a Proceeding authorized by Section 3 of this Article VI, the Company shall pay said expenses in advance of final disposition only if authorization for such Proceeding (or part thereof) was not denied by the board of directors of the Company prior to 60 days after receipt of a request for such advancement accompanied by an Undertaking.
A person to whom expenses are advanced pursuant to this Section 2 shall not be obligated to repay such expenses pursuant to an Undertaking until the final determination of any pending Proceeding in a court of competent jurisdiction concerning the right of such person to be indemnified or the obligation of such person to repay pursuant to such Undertaking.
Section 3. Protection of Rights . If a claim for indemnification under Section 1 of this Article VI is not promptly paid in full by the Company after a written claim has been received by the Company or if expenses pursuant to Section 2 of this Article VI have not been promptly advanced after a written request for such advancement accompanied by an Undertaking has been received by the Company (in each case, except if authorization thereof was denied by the board of directors of the Company as provided in Article VI, Section 1 and Section 2, as applicable), the Indemnified Person may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim or the advancement of expenses. If successful, in whole or in part, in such suit, such Indemnified Person shall also be entitled to be paid the reasonable expense thereof. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any Proceeding in advance of its final disposition where the required Undertaking has been tendered to the Company) that indemnification of the Indemnified Person is prohibited by law, but the burden of proving such defense shall be on the Company. Neither the failure of the Company (including its board of directors, independent legal counsel, or its shareholders) to have made a determination, if required, prior to the commencement of such action that indemnification of the Indemnified Person is proper in the circumstances, nor an actual determination by the Company (including its board of directors, independent legal counsel, or its shareholders) that indemnification of the Indemnified Person is prohibited, shall be a defense to the action or create a presumption that indemnification of the Indemnified Person is prohibited.
Section 4. Miscellaneous .
(i) Power to Request Service and to Grant Indemnification . The chairman of the board or the president or the board of directors may request any director, officer, agent or employee of the Company to serve as its representative in the position of a director or officer (or in a substantially similar capacity) of an entity or enterprise other than the Company, and may grant to such person indemnification by the Company as described in Section 1 of this Article VI.
(ii) Non-Exclusivity of Rights . The rights conferred on any person by this Article VI shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Charter, bylaw, agreement, vote of shareholders or disinterested directors or otherwise. The board of directors shall have the authority, by resolution, to provide for such indemnification of employees or agents of the Company or others and for such other indemnification of directors, officers, employees or agents as it shall deem appropriate.
(iii) Insurance Contracts and Funding . The Company may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of or person serving in any other capacity with, the Company or another corporation, partnership, joint venture, trust or other enterprise (including serving as a trustee or fiduciary of any employee benefit plan) against any expenses, liabilities or losses, whether or not the Company would have the power to indemnify such person against such expenses, liabilities or losses under the Act. The Company may enter into contracts with any director, officer, agent or employee of the Company in furtherance of the provisions of this Article VI, and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect the advancing of expenses and indemnification as provided in this Article VI.
(iv) Contractual Nature . The provisions of this Article VI shall continue in effect as to a person who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the heirs, executors and administrators of such person. This Article VI shall be deemed to be a contract between the Company and each person who, at any time that this Article VI is in effect, serves or served in any capacity which entitles him or her to indemnification hereunder and any repeal or other modification of this Article VI or any repeal or modification of the Act, or any other applicable law shall not limit any rights of indemnification with respect to Proceedings in connection with which he or she is an Indemnified Person, or advancement of expenses in connection with such Proceedings, then existing or arising out of events, acts or omissions occurring prior to such repeal or modification, including without limitation, the right to indemnification for Proceedings, and advancement of expenses with respect to such Proceedings, commenced after such repeal or modification to enforce this Article VI with regard to Proceedings arising out of acts, omissions or events arising prior to such repeal or modification.
(v) Savings Clause . If this Article VI or any portion hereof shall be invalidated or held to be unenforceable on any ground by any court of competent jurisdiction, the decision of which shall not have been reversed on appeal, the Company shall nevertheless (A) indemnify each Indemnified Person as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement and (B) advance expenses in accordance with Section 2 of this Article VI, in each case with respect to any Proceeding in connection with which he or she is an Indemnified Person, including an action by or in the right of the Company, to the fullest extent permitted by any applicable portion of this Article VI that shall not have been invalidated or held to be unenforceable and as permitted by applicable law.