Filed pursuant to Rule 424(b)(5)
Registration Statement No. 333-102169
PROSPECTUS
1,099,166 Shares
[FPL GROUP LOGO]
FPL GROUP, INC.
COMMON STOCK, $.01 PAR VALUE
--------------------------
DIVIDEND REINVESTMENT AND COMMON SHARE PURCHASE PLAN
--------------------------
The Dividend Reinvestment and Common Share Purchase Plan (Plan) of FPL
Group, Inc. (FPL Group) provides participants in the Plan with a simple and
convenient method of reinvesting cash dividends in and purchasing additional
shares of FPL Group's common stock, $.01 par value, and the preferred share
purchase rights attached thereto (Rights). Any holder of record of FPL Group
common stock or of preferred stock of Florida Power & Light Company (FPL) is
eligible to join the Plan.
FPL Group's common stock is listed on the New York Stock Exchange and
trades under the symbol "FPL."
Participants who are already enrolled in the Plan will continue to
participate in the Plan without any further action on their part.
Holders of FPL Group common stock and/or FPL preferred stock who elect
to participate may (a) have cash dividends on all or some of their shares
automatically invested in FPL Group common stock and (b) invest optional cash
payments in FPL Group common stock.
The price of common stock purchased directly from FPL Group for
participants in the Plan with reinvested dividends on their FPL Group common
stock, with invested dividends on FPL preferred stock and with optional cash
payments will be the average of the daily high and low sale prices of common
stock as reported on the consolidated tape for New York Stock Exchange listed
companies administered by the Consolidated Tape Association for the period of
the last three days on which the common stock was traded immediately preceding
the Investment Date. The Investment Dates are the common stock dividend payment
dates, which are normally on the 15th day of March, June, September and
December. The price of common stock purchased on the open market or through
negotiated transactions will be the weighted average price for all shares
purchased through the Agent for the Plan during the Investment Period. The
Investment Period is the 30-day period beginning on the common stock dividend
payment date.
FPL GROUP AND FPL CANNOT ASSURE A PARTICIPANT OF A PROFIT OR PROTECT A
PARTICIPANT AGAINST A LOSS ON THE SHARES OF COMMON STOCK PURCHASED BY A
PARTICIPANT UNDER THE PLAN.
SEE "CAUTIONARY STATEMENTS AND RISK FACTORS THAT MAY AFFECT FUTURE
RESULTS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS TO READ ABOUT CERTAIN FACTORS
YOU SHOULD CONSIDER BEFORE MAKING AN INVESTMENT IN THESE SECURITIES. YOU SHOULD
ALSO REVIEW THE DOCUMENTS INCORPORATED BY REFERENCE ON PAGE 3 OF THIS PROSPECTUS
FOR ADDITIONAL FACTORS YOU SHOULD CONSIDER.
FPL Group's principal executive office is located at 700 Universe
Boulevard, Juno Beach, Florida 33408, telephone number (561) 694-4000, and its
mailing address is P.O. Box 14000, Juno Beach, Florida 33408-0420.
It is suggested that this prospectus be retained for future reference.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is December 23, 2002
TABLE OF CONTENTS
Page
----
WHERE YOU CAN FIND MORE INFORMATION..........................................3
INCORPORATION BY REFERENCE...................................................3
CAUTIONARY STATEMENTS AND RISK FACTORS THAT MAY AFFECT FUTURE RESULTS........3
FPL GROUP AND SUBSIDIARIES...................................................6
SELECTED CONSOLIDATED FINANCIAL DATA OF FPL GROUP............................6
DESCRIPTION OF THE PLAN......................................................7
Purpose.................................................................7
Advantages..............................................................7
Disadvantages...........................................................8
Administration..........................................................8
Eligibility.............................................................8
Participation...........................................................9
Expenses...............................................................11
Purchases..............................................................12
Optional Cash Payments.................................................13
Online Services........................................................15
Reports to Participants................................................15
Crediting of Cash Dividends............................................16
Safekeeping of Certificates............................................16
Certificates for Shares and Rights.....................................16
Sales and Transfers....................................................17
Partial Withdrawal of Shares...........................................18
Withdrawal from the Plan...............................................18
Other Information......................................................19
USE OF PROCEEDS.............................................................21
FEDERAL INCOME TAX CONSEQUENCES.............................................21
DESCRIPTION OF COMMON STOCK.................................................23
FPL GROUP COMMON STOCK DIVIDENDS............................................27
EXPERTS.....................................................................27
LEGAL OPINIONS..............................................................27
INDEMNIFICATION.............................................................27
2
WHERE YOU CAN FIND MORE INFORMATION
FPL Group files annual, quarterly and other reports and other
information with the Securities and Exchange Commission (SEC). You can read and
copy any information filed by FPL Group with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can obtain
additional information about the Public Reference Room by calling the SEC at
1-800-SEC-0330.
In addition, the SEC maintains an Internet site (http://www.sec.gov)
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC, including FPL Group.
FPL Group also maintains an Internet site (http://www.fplgroup.com).
INCORPORATION BY REFERENCE
The SEC allows FPL Group to "incorporate by reference" the information
that FPL Group files with the SEC, which means FPL Group may, in this
prospectus, disclose important information to you by referring you to those
documents. The information incorporated by reference is an important part of
this prospectus. Information that FPL Group files in the future with the SEC
will automatically update and supersede this information. FPL Group is
incorporating by reference the documents listed below and any future filings FPL
Group makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until FPL Group sells all of these securities:
(1) FPL Group's Annual Report on Form 10-K for the year ended
December 31, 2001;
(2) FPL Group's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2002, June 30, 2002 and September 30, 2002;
and
(3) FPL Group's Current Reports on Form 8-K, filed with the SEC
on April 5, 2002 (excluding that portion furnished under
Item 9), May 23, 2002, August 12, 2002, September 27, 2002
and September 30, 2002.
You may request a copy of these documents, at no cost to you, by
writing or calling Dinah Washam, Coordinator, Shareholder Services, FPL Group,
Inc., 700 Universe Boulevard, Juno Beach, Florida 33408, (800) 222-4511.
CAUTIONARY STATEMENTS AND RISK FACTORS THAT MAY AFFECT FUTURE RESULTS
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, FPL Group is hereby filing cautionary statements
identifying important factors that could cause FPL Group's actual results to
differ materially from those projected in forward-looking statements (as such
term is defined in the Private Securities Litigation Reform Act of 1995) made by
or on behalf of FPL Group in this prospectus or any supplement to this
prospectus, in presentations, in response to questions or otherwise. Any
statements that express, or involve discussions as to expectations, beliefs,
plans, objectives, assumptions or future events or performance (often, but not
always, through the use of words or phrases such as "will likely result," "are
expected to," "will continue," "is anticipated," "estimated," "projection,"
"target," "outlook") are not statements of historical facts and may be
forward-looking. Forward-looking statements involve estimates, assumptions and
uncertainties. Accordingly, any such statements are qualified in their entirety
by reference to, and are accompanied by, the following important factors (in
addition to any assumptions and other factors referred to specifically in
connection with such forward-looking statements) that could cause FPL Group's
actual results to differ materially from those contained in forward-looking
statements made by or on behalf of FPL Group.
3
Any forward-looking statement speaks only as of the date on which that
statement is made, and FPL Group undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which that statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time and it is not possible for
management to predict all of those factors, nor can it assess the impact of each
of those factors on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statement.
The following are some important factors that could have a significant
impact on FPL Group's operations and financial results, and could cause FPL
Group's actual results or outcomes to differ materially from those discussed in
the forward-looking statements:
o FPL Group is subject to changes in laws or regulations, including the
Public Utility Regulatory Policies Act of 1978 and the Public Utility
Holding Company Act of 1935, changing governmental policies and regulatory
actions, including those of the Federal Energy Regulatory Commission, the
Florida Public Service Commission and the utility commissions of other
states in which FPL Group has operations, and the U.S. Nuclear Regulatory
Commission, with respect to, among other things, allowed rates of return,
industry and rate structure, operation of nuclear power facilities,
operation and construction of plant facilities, operation and construction
of transmission facilities, acquisition, disposal, depreciation and
amortization of assets and facilities, recovery of fuel and purchased power
costs, decommissioning costs, return on common equity and equity ratio
limits, and present or prospective wholesale and retail competition
(including but not limited to retail wheeling and transmission costs). The
Florida Public Service Commission has the authority to disallow recovery of
costs that it considers excessive or imprudently incurred.
o The regulatory process generally restricts the ability of Florida Power &
Light Company, FPL Group's principal subsidiary, to grow earnings and does
not provide any assurance as to achievement of earnings levels.
o FPL Group is subject to extensive federal, state and local environmental
statutes, rules and regulations relating to air quality, water quality,
waste management, natural resources and health and safety that could, among
other things, restrict or limit the use of certain fuels required for the
production of electricity. There are significant capital, operating and
other costs associated with compliance with these environmental statutes,
rules and regulations, and those costs could be even more significant in
the future.
o FPL Group operates in a changing market environment influenced by various
legislative and regulatory initiatives regarding deregulation, regulation
or restructuring of the energy industry, including deregulation of the
production and sale of electricity. FPL Group and its subsidiaries will
need to adapt to these changes and may face increasing competitive
pressure.
o The operation of power generation facilities involves many risks, including
start up risks, breakdown or failure of equipment, transmission lines,
pipelines, the dependence on a specific fuel source or the impact of
unusual or adverse weather conditions (including natural disasters such as
hurricanes), as well as the risk of performance below expected levels of
output or efficiency. This could result in lost revenues and/or increased
expenses. Insurance, warranties or performance guarantees may not cover any
or all of the lost revenues or increased expenses, including the cost of
replacement power. In addition to these risks, FPL Group's nuclear units
face certain risks that are unique to the nuclear industry including
additional regulatory actions up to and including shut down of the units
stemming from public safety concerns both at FPL Group's plants as well as
at the plants of other nuclear operators. Breakdown or failure of an FPL
Energy, LLC operating facility may prevent the facility from performing
under applicable power sales agreements which, in certain situations, could
result in termination of the agreement or incurring a liability for
liquidated damages.
o FPL Group's ability to successfully and timely complete its power
generation facilities currently under construction, those projects yet to
begin construction or capital improvements to existing facilities is
contingent upon many variables and subject to substantial risks. Should any
4
such efforts be unsuccessful, FPL Group could be subject to additional
costs, termination payments under committed contracts and/or the write off
of its investment in the project or improvement.
o FPL Group uses derivative instruments, such as swaps, options, futures and
forwards to manage its commodity and financial market risks, and to a
lesser extent, engage in limited trading activities. FPL Group could
recognize financial losses as a result of volatility in the market values
of these contracts, or if a counterparty fails to perform. In addition,
Florida Power & Light Company's use of such instruments could be subject to
prudency challenges by the Florida Public Service Commission and if found
imprudent, cost disallowance.
o There are other risks associated with FPL Group's nonregulated businesses,
particularly FPL Energy. In addition to risks discussed elsewhere, risk
factors specifically affecting FPL Energy's success in competitive
wholesale markets include the ability to efficiently develop and operate
generating assets, the price and supply of fuel, transmission constraints,
competition from new sources of generation, excess generation capacity and
demand for power. There can be significant volatility in market prices for
fuel and electricity, and there are other financial, counterparty and
market risks that are beyond the control of FPL Energy. FPL Energy's
inability or failure to effectively hedge its assets or positions against
changes in commodity prices, interest rates, counterparty credit risk or
other risk measures could significantly impair its future financial
results. In keeping with industry trends, a portion of FPL Energy's power
generation facilities operate wholly or partially without long-term power
purchase agreements. As a result, power from these facilities is sold on
the spot market or on a short-term contractual basis, which may affect the
volatility of FPL Group's financial results. In addition, FPL Energy's
business depends upon transmission facilities owned and operated by others;
if transmission is disrupted or capacity is inadequate or unavailable FPL
Energy's ability to sell and deliver its wholesale power may be limited.
o FPL Group is likely to encounter significant competition for acquisition
opportunities that may become available as a result of the consolidation of
the power industry. In addition, FPL Group may be unable to identify
attractive acquisition opportunities at favorable prices and to
successfully and timely complete and integrate them.
o FPL Group relies on access to capital markets as a significant source of
liquidity for capital requirements not satisfied by operating cash flows.
The inability to raise capital on favorable terms, particularly during
times of uncertainty in the capital markets, could impact FPL Group's
ability to grow its businesses and would likely increase its interest
costs.
o FPL Group is subject to costs and other effects of legal and administrative
proceedings, settlements, investigations and claims; as well as the effect
of new, or changes in, tax rates or policies, rates of inflation or
accounting standards.
o FPL Group is subject to direct and indirect effects of terrorist threats
and activities. Generation and transmission facilities, in general, have
been identified as potential targets. The effects of terrorist threats and
activities include, among other things, actions or responses to such
actions or threats, the inability to generate, purchase or transmit power,
the risk of a significant slowdown in growth or a decline in the U.S.
economy, delay in economic recovery in the U.S., and the increased cost and
adequacy of security and insurance.
o FPL Group's ability to obtain insurance, and the cost of and coverage
provided by such insurance, could be affected by national events as well as
company-specific events.
o FPL Group is subject to employee workforce factors, including loss or
retirement of key executives, availability of qualified personnel,
collective bargaining agreements with union employees or work stoppage.
The issues and associated risks and uncertainties described above are
not the only ones FPL Group may face. Additional issues may arise or become
material as the energy industry evolves. The risks and uncertainties associated
with these additional issues could impair FPL Group's businesses in the future.
5
FPL GROUP AND SUBSIDIARIES
FPL Group is a holding company incorporated in 1984 as a Florida
corporation. FPL Group's principal subsidiary, Florida Power & Light Company, is
engaged in the generation, transmission, distribution and sale of electric
energy. FPL Group Capital Inc is a wholly-owned subsidiary of FPL Group which
owns and provides funding for FPL Group's operating subsidiaries other than
Florida Power & Light Company, the majority of which are engaged in independent
power projects.
SELECTED CONSOLIDATED FINANCIAL DATA OF FPL GROUP
The following material is presented in this prospectus solely to
furnish limited introductory information and to provide reported net income and
earnings per share for certain periods and is qualified in its entirety by, and
should be considered in conjunction with, the more detailed information
incorporated by reference in this prospectus. Information that FPL Group files
in the future with the SEC which is incorporated by reference in this prospectus
will automatically update and supersede this information. In the opinion of FPL
Group, all adjustments (constituting normal recurring accruals) necessary for a
fair statement of the results of operations for the nine months ended September
30, 2002 and 2001 have been made. The income statement data for the nine months
ended September 30, 2002 and 2001, respectively, is not necessarily indicative
of the results that may be expected for an entire year.
Nine Months Ended
September 30, Years Ended December 31,
---------------------- ----------------------------------------------------
2002 2001 2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ------- -------
(millions, except per share amounts)
SELECTED CONSOLIDATED FINANCIAL DATA
OF FPL GROUP
Operating revenues $ 6,251(a) $ 6,522(a) $ 8,327(a) $ 7,062(a) $ 6,438 $ 6,661 $ 6,369
Income before cumulative effect of a
change in accounting principle $ 566(b) $ 663(c) $ 781(c) $ 704(d) $ 697(e) $ 664 $ 618
Cumulative effect of adopting FAS 142,
net of income taxes of $143 (f) $ (222) - - - - - -
Net income $ 344(b) $ 663(c) $ 781(c) $ 704(d) $ 697(e) $ 664 $ 618
Earnings per share of common stock before
cumulative effect of a change in
accounting principle:
Basic $ 3.29(b) $ 3.93(c) $ 4.63(c) $ 4.14(d) $ 4.07(e) $ 3.85 $ 3.57
Assuming dilution $ 3.29(b) $ 3.93(c) $ 4.62(c) $ 4.14(d) $ 4.07(e) $ 3.85 $ 3.57
Earnings per share of common stock:
Basic $ 2.00(b) $ 3.93(c) $ 4.63(c) $ 4.14(d) $ 4.07(e) $ 3.85 $ 3.57
Assuming dilution $ 2.00(b) $ 3.93(c) $ 4.62(c) $ 4.14(d) $ 4.07(e) $ 3.85 $ 3.57
Dividends paid per share of common stock $ 1.74 $ 1.68 $ 2.24 $ 2.16 $ 2.08 $ 2.00 $ 1.92
Total assets $18,693 $17,355 $17,463 $15,300 $13,441 $12,029 $12,449
Long-term debt, excluding current $ 5,727 $ 4,872 $ 4,858 $ 3,976 $ 3,478 $ 2,347 $ 2,949
maturities
Obligations of FPL under capital lease,
excluding current maturities $ 135 $ 135 $ 133 $ 127 $ 157 $ 146 $ 186
---------------------
(a) Reflects the netting of certain gains from physical trading and managed
hedge activities resulting in reduced revenues and fuel, purchased power and
interchange expenses pursuant to the adoption by FPL Group in the third
quarter of 2002 of Emerging Issues Task Force issue No. 02-3.
(b) Includes restructuring, impairment and other charges totaling $137 million
after tax, a reserve for leveraged leases of $30 million after tax and a
favorable settlement of litigation with the Internal Revenue Service (IRS)
of $30 million after tax.
(c) Includes merger-related expenses of $19 million after tax. (d) Includes
merger-related expenses of $41 million after tax.
(e) Includes effects of gains on divestiture of cable investments of $162
million after tax, impairment loss of $104 million after tax and litigation
settlement loss of $42 million after tax.
(f) Represents an impairment loss of $365 million ($222 million after tax) as
the cumulative effect of adopting Financial Accounting Standards No. (FAS)
142, "Goodwill and Other Intangible Assets."
Effective January 1, 2002, FPL Group adopted FAS 142. Under this
statement, the amortization of goodwill is no longer permitted. Instead,
goodwill is assessed for impairment at the date of adoption and at least
annually thereafter by applying a fair-value based test. In January 2002, FPL
Energy, LLC, a wholly-owned subsidiary of FPL Group Capital formed to aggregate
existing unregulated energy-related operations, recorded an impairment loss of
$365 million ($222 million after tax) as the cumulative effect of adopting FAS
142, eliminating all goodwill previously included in other assets on FPL Group's
financial statements. Estimates of fair value were determined using discounted
cash flow models.
6
The following table provides reported net income and earnings per share
and the proforma effect on certain prior year periods of excluding goodwill
amortization expense:
Years Ended December 31
-------------------------------
2001 2000 1999
---- ---- ----
(millions, except per share
amounts)
Net income $ 781 $ 704 $ 697
Add back: Goodwill amortization, net of income taxes of $4, $4 and $2, 6 6 5
--------- ------- --------
respectively
Adjusted net income $ 787 $ 710 $ 702
======== ======= ========
Earnings per share (assuming dilution) $ 4.62 $ 4.14 $ 4.07
Add back: Goodwill amortization 0.04 0.03 0.02
-------- ------- --------
Adjusted earnings per share $ 4.66 $ 4.17 $ 4.09
======= ======= ========
DESCRIPTION OF THE PLAN
The following is a question and answer statement of the provisions of
the Plan.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to provide holders of record of FPL Group
common stock and all classes of FPL preferred stock with a convenient method of
investing cash dividends and optional cash payments towards the purchase of FPL
Group common stock. When shares of common stock purchased under the Plan are
acquired directly from FPL Group, it will receive additional equity funds which
will be added to its general funds and used for general corporate purposes.
ADVANTAGES
2. WHAT ARE THE ADVANTAGES OF THE PLAN?
Participants in the Plan may:
o have cash dividends on all or some of their shares of FPL
Group common stock and/or FPL preferred stock automatically
invested in common stock;
o invest in additional shares of common stock by making
optional cash purchases of not less than $100 per quarter to
a maximum of $100,000 per calendar year, whether or not a
participant has elected to have cash dividends automatically
invested; or
o invest all or some of their cash dividends and make optional
cash payments.
No brokerage commission or service fee is paid by participants in
connection with purchases under the Plan.
Full investment of funds is possible under the Plan because the Plan
permits fractional shares, as well as full shares, to be credited to
participants' accounts. In addition, fractional shares, as well as full shares,
purchased with cash dividends will be credited to participants' accounts. FPL
Group's agent for the Plan will provide simplified record-keeping through
statements of participants' accounts. THESE STATEMENTS ARE PARTICIPANTS'
CONTINUING AND PERMANENT RECORD OF THE COST OF PURCHASES AND SHOULD BE RETAINED
FOR TAX PURPOSES. The Plan also provides that participants may send certificates
for shares of FPL Group common stock held in their possession to FPL Group's
7
agent for the Plan for safekeeping at no cost. See Question 21.
DISADVANTAGES
3. WHAT ARE THE DISADVANTAGES OF THE PLAN?
A participant will have no control over the prices at which shares are
purchased or sold for his or her account, because:
o purchases for the participant's account will be made during
periods prescribed under the Plan. See Question 15; and
o participants cannot designate a specific price or a specific
date at which to sell shares or select the broker through
which sales will be made. See Question 25.
Therefore, the participant will bear the risk of fluctuations in market price of
FPL Group common stock.
ADMINISTRATION
4. WHO ADMINISTERS THE PLAN?
EquiServe Trust Company, N.A., or such other bank or trust company as
FPL Group may from time to time designate (Agent), will administer the Plan and
make purchases of shares as agent for participants. EquiServe, Inc., an
affiliate of EquiServe Trust Company, N.A. and a transfer agent registered with
the SEC, acts as service agent for EquiServe Trust Company, N.A. The Agent will
keep a continuous record of each participant's activities and will send them a
statement of account after any activity. Shares purchased under the Plan will be
credited to each participant's account as maintained by the Agent until
termination of participation in the Plan or receipt of an online, a telephonic
or a written request by a participant to the Agent for all or part of his or her
shares.
Information about the Plan, the Agent or a participant's Plan account
can be obtained by contacting the Agent online or by telephone or in writing.
Internet address: Telephone number: Mailing address:
http://www.equiserve.com 1-888-218-4392 EquiServe Trust Company, N.A.
P.O. Box 43010
Providence, Rhode Island 02940-3010
When communicating with the Agent, participants should provide their
account number and a daytime telephone number.
ELIGIBILITY
5. WHO IS ELIGIBLE TO PARTICIPATE?
All holders of record of shares of FPL Group common stock and/or shares
of FPL preferred stock are eligible to participate in the Plan. If the common or
preferred stock of a shareholder is registered in a name other than that of the
8
shareholder (e.g., in the name of a broker or bank nominee), the shareholder who
wants to participate in the Plan must become a shareholder of record by having
all or a portion of his or her shares transferred to the shareholder's own name.
Beneficial owners may transfer shares into their own names either by (i)
directing their broker, bank or nominee to deliver certificates to them or (ii)
beginning January 31, 2003, instructing their broker, bank or nominee to
reregister their shares in electronic (book-entry) registration form through the
Direct Registration System, specifying book-entry ownership. The Direct
Registration System permits an investor to hold FPL Group common stock as the
registered owner in electronic (book-entry) registration form on the stock
transfer books of FPL Group. Please contact the Agent at the telephone number
stated in Question 4 for more specific information on the Direct Registration
System. Beneficial owners also may request the holder of record of their shares
to participate on their behalf.
PARTICIPATION
6. HOW DOES AN ELIGIBLE SHAREHOLDER ENROLL IN THE PLAN?
An eligible holder of record of shares of FPL Group common stock may
enroll in the Plan online, by telephone or by completing and returning an
authorization form. An eligible holder of record of shares of FPL preferred
stock may enroll in the Plan by telephone or by completing and returning an
authorization form.
ONLINE
Beginning January 31, 2003, eligible holders of record of shares of FPL
Group common stock can enroll online through the Agent's Internet site set forth
in Question 4. At the time of enrolling online, a participant will be required
to provide certain information in order to access his or her online account. All
shareholders participating in the Plan will have online access to review their
Plan transaction history and share position through the Internet. This
information may be printed and retained for record-keeping purposes.
TELEPHONE
Eligible holders of record of shares of FPL Group common stock and/or
FPL preferred stock can enroll by calling the Agent at the telephone number set
forth in Question 4. At the time of enrolling over the telephone, a participant
will be required to provide certain information to the Agent.
MAIL
Eligible holders of record of shares of FPL Group common stock and/or
FPL preferred stock can enroll by completing an authorization form and returning
it to the Agent at the address set forth in Question 4. An authorization form
and a pre-addressed envelope for a holder of record may be obtained at any time
by contacting the Agent at the address or telephone number stated in Question 4.
IN ORDER TO PARTICIPATE IN THE PLAN FOR ANY GIVEN FPL GROUP COMMON
STOCK OR FPL PREFERRED STOCK DIVIDEND PAYMENT DATE, A SHAREHOLDER MUST ENROLL IN
THE PLAN ON OR BEFORE THE RECORD DATE FOR THAT DIVIDEND PAYMENT.
When shares are registered in more than one name (i.e., joint tenants,
trustees, etc.), all registered holders must enroll. When enrolling as an
executor, administrator, trustee or guardian, or as attorney, the capacity must
be specified during enrollment. For example, when an authorization form is
signed by an executor, administrator, trustee or guardian, or as attorney, the
capacity in which the form is signed must be specified. To enroll a corporate or
organizational shareholder, an authorized officer or other official acting on
behalf of the shareholder must identify such capacity. For example, an
authorization form of a corporate or other organizational shareholder should be
signed by an authorized officer or other official, identified as such.
9
7. ARE CURRENT PLAN PARTICIPANTS REQUIRED TO RE-ENROLL IN THE AMENDED
PLAN?
The Plan has been amended effective as of January 31, 2003, and this
prospectus describes the amended Plan. All holders of shares of FPL Group common
stock and FPL preferred stock enrolled in the Plan as of that date will
automatically continue to participate in the amended Plan, and their investment
election will remain the same unless the participant notifies the Agent of any
changes in his or her investment option. See Question 10.
8. WHEN MAY A SHAREHOLDER JOIN THE PLAN?
DIVIDEND REINVESTMENT
A shareholder of record of FPL Group common stock must enroll in the
Plan on or before the record date for a cash dividend on the common stock in
order to begin the reinvestment of dividends payable on that dividend payment
date. If enrollment occurs after the record date for a dividend payment date,
reinvestment of dividends may be delayed until the dividend for the next
quarter.
Cash dividends on the shares of FPL Group common stock are normally
payable on the 15th day of March, June, September and December. These common
stock dividend payment dates are the Investment Dates. If the common stock
dividend payment date should happen to fall on a weekend or holiday, the
Investment Date will be the following business day. See "FPL Group Common Stock
Dividends."
A shareholder of record of FPL preferred stock must enroll in the Plan
on or before the record date for a cash dividend on the preferred stock in order
to begin the investment of dividends payable on that dividend payment date. If
enrollment occurs after the record date for a dividend payment date,
reinvestment of dividends may be delayed until the dividend for the next
quarter.
Cash dividends on shares of FPL preferred stock are normally payable on
the first day of March, June, September and December.
OPTIONAL CASH PAYMENTS (NO DIVIDEND REINVESTMENT)
A shareholder of record who wants to enroll in the "Optional Cash
Payments Only" option should:
o enroll online (only available to holders of FPL Group common
stock), by telephone or by returning their authorization
form as set forth in Question 6, and
o send their cash payment,
so they are received by the Agent at least five business days, but not more than
30 days, before an Investment Date. Such funds will be invested as of that
Investment Date (if shares are purchased from FPL Group) or during that
Investment Period (if shares are purchased on the open market or through
negotiated transactions). An Investment Period is the 30-day period beginning on
the FPL Group common stock dividend payment date. See Questions 16 and 17.
9. WHAT DO THE VARIOUS FORMS OF ENROLLMENT PROVIDE?
The various forms of enrollment set forth in Question 6 allow
shareholders to decide the extent to which they want to participate in the Plan.
A shareholder may indicate during enrollment whether he or she wants to:
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o invest cash dividends paid on all of his or her shares of
FPL Group common stock or of FPL preferred stock;
o invest cash dividends paid on some of his or her shares of
FPL Group common stock or FPL preferred stock; and/or
o participate in the Plan by making optional cash payments
within the limits described in Question 17.
If a signed authorization form is returned to the Agent without any of
the options selected, the shareholder will be enrolled under the "Full Dividend
Reinvestment" option. If a signed authorization form is returned to the Agent
with the "Partial Dividend Reinvestment" option selected but without the number
of shares designated, the form will be returned to the shareholder for
completion.
If a participant elects the "Partial Dividend Reinvestment" option, the
participant must specify the number of shares on which dividends will be paid in
cash. Dividends on the participant's remaining shares will be reinvested to
purchase shares of FPL Group common stock.
If a participant elects the "Optional Cash Payments Only" option, the
participant will continue to receive cash dividends on his or her shares,
including those shares held by the participant outside the Plan and on shares
credited to the participant's Plan account. The Agent will apply any optional
cash payment to the purchase of shares of FPL Group common stock under the Plan.
If a shareholder does not enroll under the Plan, he or she will receive
cash dividends declared as usual, by check mailed to the participant's address
of record or, upon the participant's request, by electronic deposit into a
participant's account at a United States financial institution.
10. HOW MAY A PARTICIPANT CHANGE OPTIONS UNDER THE PLAN?
A participant may change his or her investment option by contacting the
Agent online beginning January 31, 2003, by telephone, or by completing and
returning a new authorization form as set forth in Question 6.
Any change of enrollment option made online, by telephone or by a new
authorization form must be received by the Agent on or before the record date
for an FPL Group common stock or FPL preferred stock dividend, as the case may
be, in order to be sure it is effective on the related dividend payment date.
EXPENSES
11. ARE THERE ANY EXPENSES TO PARTICIPANTS IN CONNECTION WITH PURCHASES,
SALES OR OTHER SERVICES UNDER THE PLAN?
The costs of administration of the Plan will be paid by FPL Group.
There will be no brokerage commissions or service fees to participants for the
purchase of FPL Group common stock through the Plan. However, in the event
shares of a participant are sold by the Agent, the participant will be charged a
service fee, beginning January 31, 2003 (currently $15.00, subject to change)
and a brokerage commission (currently $0.12 per share sold, subject to change)
on the sale, as well as any transfer tax, if applicable. See Question 25.
Participants will be charged a $25.00 returned funds fee for any
optional cash payment returned unpaid for any reason, whether the investment was
made by check or by attempted automatic deduction from a bank account. In
addition, if an optional cash payment is applied to purchase shares before a
check or attempted automatic deduction is rejected, the purchased shares will be
11
sold and the returned funds fee will be charged against the value of the shares
in the participant's account. See Question 17.
PURCHASES
12. WHAT IS THE SOURCE OF SHARES PURCHASED UNDER THE PLAN?
Shares purchased under the Plan may come from:
o FPL Group's authorized but unissued shares or treasury
shares of common stock;
o shares purchased through the Agent on the open market or
through negotiated transactions; or
o a combination of the foregoing.
The decision by FPL Group whether shares are purchased directly from
FPL Group, on the open market or through negotiated transactions will take into
account FPL Group's need for common equity, general market conditions, and any
other factors considered to be relevant. No participant shall have any authority
or power to direct the date or sale price at which the common stock may be
purchased.
13. WHAT WILL BE THE PRICE OF SHARES OF FPL GROUP COMMON STOCK PURCHASED
UNDER THE PLAN?
SHARES PURCHASED FROM FPL GROUP
The price of common stock purchased from FPL Group, where such shares
are authorized but unissued shares or treasury shares, will be the average of
the daily high and low sale prices of the common stock as reported on the
consolidated tape for New York Stock Exchange listed companies, administered by
the Consolidated Tape Association, for the period of the last three days on
which the common stock was traded immediately preceding the Investment Date.
SHARES PURCHASED ON THE OPEN MARKET OR THROUGH NEGOTIATED TRANSACTIONS
The price of shares purchased on the open market or through negotiated
transactions will be the weighted average price paid for all shares purchased
through the Agent for the Plan during the Investment Period.
14. HOW MANY SHARES OF FPL GROUP COMMON STOCK WILL BE PURCHASED FOR
PARTICIPANTS?
The number of shares to be purchased depends on the amount of the
participant's reinvested cash dividends, optional cash payments, or both, and on
the price of the shares of common stock. A participant may not designate the
exact number of shares to be purchased. Each participant's account will be
credited with a number of shares, including fractions (currently calculated to
three decimal places, subject to change) equal to the total amount invested
divided by the purchase price per share.
15. WHEN WILL PURCHASES OF SHARES OF FPL GROUP COMMON STOCK BE MADE?
SHARES PURCHASED FROM FPL GROUP
Purchases of shares of common stock from FPL Group will be made as of
the Investment Dates and will be credited to the participants' accounts on the
Investment Date. The Investment Dates are the common stock dividend payment
dates. Cash dividends on the shares of FPL Group common stock are normally
12
payable on the 15th day of March, June, September and December. If the common
stock dividend payment date should happen to fall on a weekend or holiday, the
Investment Date will be the following business day. See "FPL Group Common Stock
Dividends."
SHARES PURCHASED ON THE OPEN MARKET OR THROUGH NEGOTIATED TRANSACTIONS
In the event FPL Group instructs the Agent to purchase shares on the
open market or through negotiated transactions, shares of common stock will be
purchased as soon as possible within the Investment Period, subject to any
applicable requirements of federal or state securities laws affecting the timing
and manner of purchases of common stock for the Plan. An Investment Period is
the 30-day period beginning on the FPL Group common stock dividend payment date.
Shares purchased on the open market or through negotiated transactions will be
credited to participants' accounts as of the last day of the Investment Period
or as of the date on which all purchases for the Investment Period are
completed.
Purchases of shares through the Agent are subject to any limitations
imposed by federal or state securities laws. No participant will have any
discretion as to all matters relating to open market and negotiated purchases,
including determination of the number of shares, if any, to be purchased on any
day or at any time of day, the price to be paid for such shares, the markets on
which such shares are to be purchased (including on any securities exchange, in
the over-the-counter market or through negotiated transactions) and the persons
(including brokers and dealers) from or through whom purchases are made.
NO INTEREST WILL BE PAID BY FPL GROUP, FPL OR THE AGENT ON CASH
DIVIDENDS OR OPTIONAL CASH PAYMENTS HELD PENDING INVESTMENT.
OPTIONAL CASH PAYMENTS
16. HOW DO OPTIONAL CASH PAYMENTS WORK?
Optional cash payments can be made only in United States dollars.
Optional cash payments received from a participant at least five business days
prior to an Investment Date will be applied by the Agent to the purchase of
additional shares of common stock as of that Investment Date (with respect to
shares purchased from FPL Group) or during the Investment Period (with respect
to shares purchased on the open market or through negotiated transactions).
Optional cash payments received less than five business days prior to the
Investment Date and more than 30 days prior to the next Investment Date will be
returned to the participant. Since no interest will be paid by FPL Group, FPL or
the Agent on optional cash payments held pending their investment, participants
are strongly urged to make their optional cash payments shortly before an
Investment Date. However, participants should allow sufficient time to ensure
that their payment is received by the Agent at least five business days prior to
the Investment Date. A shareholder may participate in the Plan even if he or she
wishes to invest only optional cash payments without reinvesting dividends.
Shareholders will not receive dividends on shares purchased with an
optional cash payment until the dividend payment date following the purchase.
For example, if an optional cash payment is made between February 15 and March
10, 2003, it will be invested in shares of FPL Group common stock on March 15
(or the next business day) if the shares are purchased directly from FPL Group.
If the shares are purchased on the open market or through negotiated
transactions through the Agent, it will be invested in shares within 30 days
after March 15. Dividends will be paid on those shares commencing with the June
15 dividend payment.
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17. HOW MAY OPTIONAL CASH PAYMENTS BE MADE?
Optional cash payments may be made quarterly. It is not necessary to
send the same amount of money each quarter, and there is no obligation to make
an optional cash payment for each or any Investment Date. See Question 16 for
the timing of cash payments.
AUTOMATIC QUARTERLY DEDUCTIONS
Beginning January 31, 2003, participants can purchase additional common
stock through an automatic quarterly deduction from an account at a United
States financial institution that is a member of the National Automated Clearing
House Association. Participants can enroll in this feature by completing an
Automatic Investment Enrollment Form and returning it by mail to the Agent,
along with a voided blank check (if a checking account) or deposit slip (if a
savings account) for account number verification. Automatic Investment
Enrollment Forms may be obtained at any time by contacting the Agent.
Participants should allow approximately 30 days for the Agent to
establish an automatic quarterly deduction. Once established, the requested
dollar amount will be electronically deducted from the designated United States
bank account on the first business day of each month in which FPL Group will pay
a common stock dividend. Those funds will be commingled with all other optional
cash payments and invested in additional shares of common stock on the
Investment Date (with respect to shares purchased from FPL Group) or during the
Investment Period (with respect to shares purchased on the open market or
through negotiated transactions).
In order to terminate participation in the automatic deduction feature
or change the dollar amount to be withdrawn, participants should notify the
Agent in writing. See Question 4 for mailing information. Such requests will be
effective for a particular deduction provided the Agent receives the request at
least seven business days prior to the debit date. Requests received less than
seven business days prior to the debit date may not take effect until the
following quarter.
Requests to change bank specific information (i.e., bank routing number
or account number) may be made in writing to the Agent and must be received by
the Agent 30 days prior to the debit date. Such requests received less than 30
days prior to the debit date may not take effect until the following quarter.
CHECK PAYMENTS
Once a dividend reinvestment statement has been received, a cash
remittance slip, attached to the statement, may be used for making optional cash
payments. If a cash remittance slip is not available, participants, when mailing
a check, should notify the Agent that the funds are to be used to purchase
additional FPL Group common stock for their FPL Group dividend reinvestment
account. Checks should be drawn against United States banks, in United States
dollars and made payable to "EquiServe--FPL Group." The participant should
include his or her Plan account number on his or her check. Checks should be
mailed directly to the Agent at the address set forth in Question 4 and not to
FPL Group or FPL.
The Agent will not accept cash, traveler's checks, money orders or
third party checks.
MINIMUM AND MAXIMUM LIMITS AND REFUNDS
The minimum optional cash payment is $100 per quarter. FPL Group
reserves the right to refuse cumulative optional cash payments in excess of
$100,000 per participant for any calendar year. In the event it exercises this
right, the amount of the optional cash payment in excess of $100,000 will be
returned to the participant without interest. Optional cash payments will be
refunded prior to their investment if a request for refund, by telephone or in
writing, is received by the Agent from the participant at least five business
days prior to an Investment Date.
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UNCOLLECTED OPTIONAL CASH PAYMENTS
In the event that any check or any automatic deduction is returned
unpaid for any reason, the Agent will consider the request for investment of
such money null and void and shall immediately remove from the participant's
account shares, if any, purchased upon the prior credit of such money. The Agent
shall then be entitled to sell these shares to satisfy any uncollected amounts.
If the net proceeds of the sale of such shares are insufficient to satisfy the
balance of such uncollected amounts, the Agent shall be entitled to sell
additional shares from the participant's account to satisfy the uncollected
balance. The Agent will also charge a $25.00 returned funds fee for an optional
cash payment returned unpaid for any reason, whether the investment was made by
check or by attempted automatic deduction from a bank account. This fee will be
collected by the Agent through the sale of the number of shares from the
participant's Plan account as necessary to satisfy the fee.
ONLINE SERVICES
18. WHAT TRANSACTIONS CAN I CONDUCT THROUGH THE AGENT'S INTERNET SITE?
The Agent offers participants a convenient way to invest in FPL Group
common stock online. Beginning January 31, 2003, through the Agent's Internet
site, a holder of FPL Group common stock may:
o enroll in the Plan; and
o authorize the reinvestment of his or her FPL Group common
stock cash dividends;
and a participant may:
o review and manage his or her Plan account at his or her
convenience;
o arrange for sales of some or all of his or her shares of
common stock;
o request the issuance of a stock certificate for some or all
of his or her shares of common stock; and
o arrange to receive FPL Group proxy material and other
material sent to shareholders over the Internet.
Participation in the Plan through the Agent's online services is
voluntary. A holder of FPL preferred stock must enroll by mail or telephone. A
participant can access such services at the Agent's Internet site. See Question
4.
REPORTS TO PARTICIPANTS
19. WHAT KIND OF REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN?
A statement of account will be sent to each participant as soon as
practicable following any account activity. These statements are the
participants' continuing and permanent record of the cost of purchases and
should be retained for tax purposes. The statement will indicate the number of
shares purchased, the price per share paid and will include any applicable tax
information pertaining to the participant's Plan account. Participants should be
aware that it is important to retain all statements received as there could be a
fee incurred when requesting the Agent to supply historical statement
information.
15
In addition, participants will receive copies of all communications
sent to all holders of FPL Group common stock, including the annual report, the
notice of annual meeting and proxy statement, and any reports or informational
statements required by the Internal Revenue Service.
CREDITING OF CASH DIVIDENDS
20. HOW WILL CASH DIVIDENDS ON SHARES HELD IN PARTICIPANTS' PLAN ACCOUNTS
BE CREDITED?
FPL Group will pay cash dividends, as declared, on shares of its common
stock held in participants' Plan accounts. For participants other than those
making only optional cash payments, cash dividends, as specified by
participants, will be reinvested in additional shares. The Agent will credit the
shares purchased with those dividends to participants' accounts (currently
calculated to three decimal places, subject to change) on the basis of full and
fractional shares held in their accounts. Participants making only optional cash
payments will have all cash dividends paid to them. See "FPL Group Common Stock
Dividends."
SAFEKEEPING OF CERTIFICATES
21. MAY A SHAREHOLDER SEND CERTIFICATES FOR FPL GROUP COMMON STOCK HELD IN
HIS OR HER POSSESSION TO THE AGENT FOR SAFEKEEPING?
Yes. Participants may send certificates for shares of FPL Group common
stock held in their possession to the Agent for safekeeping at no cost.
Participants who want the Agent to hold certificates for safekeeping should send
unendorsed certificates to the Agent accompanied by a letter of instruction. All
certificates should be sent to the address stated in Question 4 by registered
mail, return receipt requested, and insured for possible mail loss of 2% of the
market value (minimum of $20.00). This insurance covers the cost to a
participant to have the certificates replaced if the Agent does not receive
them, but in no way protects against any loss resulting from fluctuations in the
value of such shares from the time the participant mails the certificates until
such time as replacement can be effected. These shares will be combined with
those full and fractional shares acquired under the Plan by a participant and
credited in electronic book-entry form to the participant's account with the
Agent. Shortly thereafter, the participant will receive a statement showing his
or her combined holdings. The Agent will treat these shares in the same manner
as shares purchased for the participant's account.
CERTIFICATES FOR SHARES AND RIGHTS
22. WILL CERTIFICATES BE ISSUED FOR SHARES OF FPL GROUP COMMON STOCK
PURCHASED BY PARTICIPANTS?
Certificates for shares of FPL Group common stock purchased under the
Plan normally will not be issued to participants. Shares purchased will be
registered in the name of the participant beginning January 31, 2003 and
credited in electronic book-entry form to the participant's account on the
Agent's records. Credit for shares purchased will be shown on each participant's
statement of account. This additional service protects against loss, theft or
destruction of stock certificates.
Certificates for any number of full shares credited to a participant's
account under the Plan will be issued upon the participant's online, telephonic,
or written request to the Agent. Any dividends on newly certificated shares will
continue to be either reinvested, or paid in cash, as previously specified by
the participant. Any remaining full shares and fractional share will continue to
be credited to the participant's account. If a participant requests a
certificate for all shares credited to his or her account, a certificate will be
issued for all the full shares and a cash payment will be made for the value of
any fractional share based upon the then-current market price (as described in
Question 26), less any brokerage commission. A certificate for a fractional
share will not be issued under any circumstances. See Question 28 for
information on withdrawal from the Plan, and Question 27 for information on
partial withdrawals.
16
Shares credited to the account of a participant may not be pledged. A
participant who wishes to pledge such shares must withdraw them from the Plan by
requesting that a certificate for such shares be issued in his or her name.
23. ARE SEPARATE CERTIFICATES ISSUED FOR THE RIGHTS?
Until the Distribution Date (as defined in "Description of Common
Stock--Preferred Share Purchase Rights" below), separate certificates for the
Rights will not be issued and the Rights will be evidenced by a notation in the
Agent's records for shares of common stock held in electronic book-entry form.
24. IN WHOSE NAME WILL CERTIFICATES FOR SHARES OF FPL GROUP COMMON STOCK BE
REGISTERED WHEN ISSUED?
Accounts under the Plan are maintained in the same name(s) in which
share certificates of participants are registered at the time the participants
entered the Plan. Certificates for full shares of FPL Group common stock will be
so registered when issued, except in instances such as death. Upon written
request of a participant to the Agent, certificates also can be registered and
issued in names other than the account name(s) subject to compliance with any
applicable laws and the payment by the participant of any applicable taxes,
provided that the request bears the signature of the participant with the
corresponding Medallion Guarantee and the applicable transfer documents are
provided. Medallion Guarantees are provided by banks, brokerage firms or other
financial institutions that are members of the Medallion Signature Guarantee
Program.
SALES AND TRANSFERS
25. HOW CAN A PARTICIPANT SELL OR TRANSFER SHARES CREDITED TO HIS OR HER
ACCOUNT UNDER THE PLAN?
A participant may request to sell or transfer (subject to pledge
restrictions set forth in Question 22) all or a portion of the shares credited
to his or her account under the Plan at any time by contacting the Agent. Only
full shares may be sold when making a partial sale.
If the market value of a sale is expected to be less than $100,000, a
participant may request the sale by logging on to the Agent's Internet site
stated in Question 4 beginning January 31, 2003, or calling the Agent at the
telephone number stated in Question 4. If the market value of a sale is expected
to exceed $100,000, the participant must submit a written request to the Agent
at the address stated in Question 4. This limitation is set to protect
participants' accounts against unauthorized sales. In addition, the Agent, for
any reason at its sole discretion and at any time, has the right to decline to
process a sale request by telephone or through the Internet and in its place
require written submission of the sale request. If a participant wishes to sell
shares within 30 days following a change of address, such request must be
submitted in writing. See Question 28.
No participant shall have any authority or power to direct the date or
sales price at which common stock may be sold or the selection of the broker(s)
or dealer(s) through which sales will be made. The Agent processes sales
requests daily. It is expected that the sale will be made within five trading
days after receipt by the Agent of the request. The participant will receive the
proceeds of the sale, less a service fee, beginning January 31, 2003 (currently
$15.00, subject to change) and a brokerage commission (currently $0.12 per share
sold, subject to change) as well as any transfer tax.
Selling participants should be aware that FPL Group common stock prices
may decline during the period between a request for sale, its receipt by the
Agent and the ultimate sale on the open market which is expected to be within
five trading days after receipt of the request. This risk should be evaluated by
the participant and is a risk borne solely by the participant.
No check will be mailed prior to settlement of funds from the brokerage
firm. Currently, settlement occurs three business days after the sale of shares.
17
26. WHAT HAPPENS WHEN A PARTICIPANT SELLS OR TRANSFERS SHARES NOT CREDITED
TO HIS OR HER ACCOUNT UNDER THE PLAN?
If a participant sells or transfers shares of FPL Group common stock
and/or FPL preferred stock held outside of his or her Plan account, the Agent
will continue to reinvest the cash dividends or pay dividends in cash, as
previously designated by the participant, on the participant's remaining shares,
including both shares held outside of his or her Plan account and shares
credited to the participant's account under the Plan until notified by the
participant that he or she wishes to completely withdraw from the Plan.
If a participant enrolled in the "Optional Cash Payments Only" option
disposes of shares of FPL Group common stock and/or FPL preferred stock held
outside of his or her Plan account, the Agent will continue to pay cash
dividends to the participant on any remaining shares held outside of his or her
Plan account and any shares credited to his or her Plan account until
notification is received by the Agent that the participant wishes to completely
withdraw from the Plan.
However, if a participant has only a fractional share of stock credited
to his or her account on the record date for any cash dividend on FPL Group
common stock, FPL Group reserves the right not to reinvest any additional
dividends on such fractional share. If FPL Group exercises this right, the
participant will receive a cash adjustment representing such fractional share,
plus the amount of the cash dividend on such fraction. The cash payment for the
fractional share will be based on the closing price of FPL Group common stock as
reported on the Consolidated Tape for New York Stock Exchange listed companies
on the applicable Investment Date or the first preceding date on which such a
closing price is so reported.
If a participant who is receiving a portion of dividends in cash
disposes of a number of shares held outside of his or her Plan account resulting
in a total of the remaining shares (both shares held outside of his or her Plan
account and/or shares credited to the participant's Plan account) which is less
than the number of shares on which the Agent has been instructed to pay
dividends in cash, the Agent shall then pay cash dividends to the participant on
the remaining shares.
PARTIAL WITHDRAWAL OF SHARES
27. HOW CAN A PARTICIPANT WITHDRAW A PART OF THE SHARES CREDITED TO HIS OR
HER ACCOUNT UNDER THE PLAN?
A participant may request to withdraw a portion of the shares credited
to his or her account under the Plan at any time by contacting the Agent and
requesting the shares to (i) be sold as set forth in Question 25, (ii) be
transferred as set forth in Questions 24 and 25, (iii) be issued in certificate
form as set forth in Question 22, or (iv) continue to be held in electronic
book-entry form but not under the Plan.
Withdrawing shares from a Plan account does not affect the dividend
reinvestment option (for example, dividends will continue to be invested or paid
in cash on the remaining shares in the Plan account as previously designated)
unless the participant withdraws all of the shares held in his or her Plan
account.
WITHDRAWAL FROM THE PLAN
28. HOW DOES A PARTICIPANT WITHDRAW FROM THE PLAN?
Since participation in the Plan is entirely voluntary, a participant
may withdraw from it at any time.
To withdraw from the Plan, a participant must notify the Agent online,
by telephone or in writing that he or she wishes to withdraw. When a participant
withdraws from the Plan or upon termination of the Plan by FPL Group, he or she
may instruct the Agent online (beginning January 31, 2003), by telephone or in
writing (subject to sale limitations set forth in Question 25) to:
18
o issue certificates for full shares credited to his or her
account under the Plan and remit to the participant a check
for any fractional share and for any optional cash payments
which have not been invested;
o continue to credit all full shares and any fractional share
in electronic book-entry form in the participant's Plan
account and remit to the participant a check for any
optional cash payments which have not been invested;
o sell all of the shares, both full and fractional, credited
to the participant's account under the Plan and remit to the
participant a check for the net proceeds of the sale plus
the value of any fractional share and a separate check for
any optional cash payments which have not been invested; or
o sell a portion of the shares credited to the participant's
account under the Plan, issue a certificate for any
remaining full shares, and remit to the participant a check
for any fractional share and a separate check for any
optional cash payments which have not been invested. Or,
sell a portion of the shares credited to the participant's
account, continue to credit any remaining full and
fractional shares in electronic book-entry form in the
participant's account and remit to the participant a check
for the net proceeds of the sale and a separate check for
any optional cash payments which have not been invested. If
the participant is requesting the sale of a portion of his
or her shares, the request must indicate the exact number of
shares and not the dollar amount. Any request that does not
clearly indicate the number of shares to be sold will be
denied by the Agent with no action taken.
The cash payment for any fractional share will be based on the
then-current market price of FPL Group common stock (as described in Question
26), less any brokerage commission. See Question 4 regarding online, telephone
and written instructions to the Agent, and Question 25 for additional
information on sales of shares.
29. WHEN MAY A PARTICIPANT WITHDRAW FROM THE PLAN?
A participant may cancel and shall be deemed to have canceled his or
her participation in the Plan as of an Investment Date if a notice of withdrawal
from the Plan online, by telephone or in writing is received by the Agent from
the participant at least five business days prior to the related dividend
payment date. All subsequent dividends will be paid in cash unless the
participant re-enrolls in the Plan. If the notice of withdrawal is received by
the Agent less than five business days prior to the related dividend payment
date, it may not be effective until the following Investment Date. Optional cash
payments which have not been invested will be refunded if a request by telephone
or in writing for refund or withdrawal from the Plan is received by the Agent
from the participant at least five business days prior to an Investment Date.
OTHER INFORMATION
30. IF FPL GROUP HAS A RIGHTS OFFERING, HOW WILL A PARTICIPANT'S
ENTITLEMENT BE COMPUTED?
A rights offering takes place when FPL Group issues to the existing
shareholders the right to purchase additional shares of common stock in
proportion to the shares they already own. A participant's entitlement in a
rights offering will be based upon the participant's total holdings. Rights will
be issued for the number of full shares only, unless rights for one or more full
shares in lieu of any fractional share interest are issued. Any rights based on
a fractional share not so provided for will be sold for a participant's account
by the Agent and a check for the net proceeds of the sale will be sent to the
participant.
A rights offering is not related to the Rights attached to the shares
of FPL Group common stock. See "Description of Common Stock--Preferred Share
Purchase Rights" below.
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31. WHAT HAPPENS IF FPL GROUP ISSUES A STOCK DIVIDEND OR DECLARES A STOCK
SPLIT?
All shares of common stock distributed as a result of a stock dividend
or a stock split on a participant's shares, whether held outside the Plan or
credited to the participant's Plan account, will be credited to the
participant's Plan account. Any Rights attached to common stock will be adjusted
in the event of a stock dividend or stock split. As soon as practicable after
the declaration of a stock dividend or stock split, a statement will be sent to
each participant which will indicate the number of shares of common stock and
Rights attached thereto credited to each participant's account, in electronic
book-entry form, under the Plan as a result of the stock dividend or stock
split.
32. HOW WILL A PARTICIPANT'S SHARES BE VOTED AT MEETINGS OF SHAREHOLDERS?
For each shareholders' meeting, a participant will receive a single
proxy covering the total number of full shares of FPL Group common stock
held--both the shares registered in the participant's name which are held
outside of his or her Plan account and those shares credited to the
participant's Plan account. If the proxy is returned properly signed and marked
for voting, all of the shares will be voted as marked. Also, the total number of
shares held may be voted in person at a shareholders' meeting.
If a proxy is returned properly signed but without indicating
instructions as to the manner in which shares are to be voted with respect to
any item, all of the participant's full shares--both the shares registered in
the participant's name which are held outside of his or her Plan account and
those shares credited to the participant's Plan account--will be voted in
accordance with the recommendations of FPL Group's Board of Directors. If the
proxy is not returned, or if it is returned unsigned or improperly signed, none
of the participant's shares covered by such proxy will be voted unless the
participant votes in person at the meeting.
33. MAY THE PLAN BE CHANGED OR DISCONTINUED?
FPL Group reserves the right to modify, amend, suspend, or terminate
the Plan, or to change the Agent administering the Plan, at any time. Notice of
any such modification, amendment, suspension, termination, or change of Agent
will be sent to all participants. In the event of termination, FPL Group may
instruct the Agent to either issue certificates for all full shares credited to
the participant's account or continue to credit such shares in book-entry form
to the participant's account. In the former case, a check for the then-current
market value of any fractional share will be delivered to the participant.
34. WHAT IS THE RESPONSIBILITY OF FPL GROUP, FPL AND THE AGENT UNDER THE
PLAN?
In administering the Plan, FPL Group, FPL and the Agent will not be
liable for any act done in good faith or for any good faith omission to act,
including, without limitation, any claim of liability arising out of the failure
to cease reinvestment of cash dividends for a participant's account upon an
occurrence such as the participant's death prior to the receipt of written
notice of the death, or with respect to the prices at which shares are purchased
or sold for the participant's account and the times when such purchases or sales
are made, or with respect to any fluctuation in the market value after purchase
or sale of shares.
FPL Group, FPL and the Agent cannot assure a participant of a profit or
protect the participant against a loss on the shares of common stock purchased
by a participant under the Plan. A PARTICIPANT PARTICIPATES IN THE PLAN AT HIS
OR HER SOLE DISCRETION, RISK AND RESPONSIBILITY.
The terms and conditions of the Plan and its operation shall be
governed by and construed in accordance with the laws of the State of Florida.
FPL Group reserves the right to interpret and regulate the Plan as may be
necessary or desirable in connection with the operation of the Plan.
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USE OF PROCEEDS
The net proceeds from the purchase of common stock directly from FPL
Group will be added to FPL Group's general funds. FPL Group uses its general
funds for corporate purposes, including to provide funds for its subsidiaries.
FPL Group will receive no proceeds from open market or negotiated purchases made
through the Agent for the Plan. FPL Group does not know either the number of
shares that will ultimately be sold under the Plan or the prices at which such
shares will be sold.
FEDERAL INCOME TAX CONSEQUENCES
The following description is only a summary and does not purport to be
a complete description of all tax consequences of participation in the Plan. The
description may be affected by future legislation, Internal Revenue Service
rulings and regulations, or court decisions. Accordingly, Plan participants
should consult with their own tax advisors with respect to the federal, state
and local tax consequences of participation in the Plan. Except as provided
below, the federal income tax consequences to a participant (including a
participating corporate shareholder) in the Plan, as of the date of this
prospectus, may be summarized as follows:
(1) With respect to reinvested cash dividends used to purchase
authorized but unissued shares or treasury shares of common
stock from FPL Group, a participant will be treated for
federal income tax purposes as having received a
distribution in an amount equal to the fair market value of
the number of shares (including fractional shares) of common
stock purchased with such reinvested cash dividends on the
common stock dividend payment date. This distribution will
be treated as dividend income to the participant to the
extent of the current and accumulated earnings and profits
of FPL Group, as determined for federal income tax purposes,
and as reported as such on Form 1099-DIV. The participant's
basis in the shares so purchased will be equal to the fair
market value of such shares on the dividend payment date.
(2) With respect to reinvested cash dividends used through the
Agent to purchase shares of common stock on the open market
or through negotiated transactions, a participant will be
treated for federal income tax purposes as having received a
distribution in an amount equal to the cash dividends
reinvested plus a proportionate share of any brokerage
commissions paid by FPL Group to obtain the shares. This
distribution will be treated as dividend income to the
participant to the extent of the current and accumulated
earnings and profits of FPL Group, as determined for federal
income tax purposes, and as reported as such on Form
1099-DIV. The participant's basis in the shares so purchased
will be equal to the amount treated as a dividend
distribution to such participant.
(3) A participant who purchases common stock with optional cash
payments will recognize no taxable income upon such purchase
except to the extent of the proportionate share of any
brokerage commissions paid by FPL Group to obtain such
shares, which amount will be treated as dividend income to
the participant to the extent of the current and accumulated
earnings and profits of FPL Group, as determined for federal
income tax purposes, and as reported as such on Form
1099-DIV. The basis of shares purchased in this manner will
be the amount of the optional cash payment plus any
brokerage commissions reported on Form 1099-DIV.
(4) The full amount of the dividend income is taxable to a
participant, except that in the case of a corporate
shareholder such participant is eligible for a dividends
received deduction equal to 70% of the dividends received,
and if the corporate shareholder owns 20% or more of the
voting power and value of FPL Group's common stock, the
dividends received deduction is equal to 80% of the
dividends received.
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(5) A participant's holding period for shares of common stock
acquired pursuant to the Plan will begin on the day
following the date the shares are credited to the
participant's account.
(6) A participant will not realize taxable income as a result of
receipt of certificates for full shares of common stock
credited to the participant's account, either upon the
participant's request for those shares or upon withdrawal
from participation in, or termination of, the Plan.
(7) A participant will realize gain or loss when the shares of
common stock held in his or her Plan account are sold or
exchanged and, in the case of a fractional share, when the
participant receives a cash payment for a fraction of a
share of common stock credited to the participant's account
upon termination of participation in, or termination of, the
Plan. The amount of such gain or loss will be the difference
between the amount which the participant receives for the
shares or fraction of a share and the tax basis thereof.
(8) For participants who are subject to "backup" withholding,
the Agent will invest in shares of common stock an amount
equal to the cash dividends less the amount of tax required
to be withheld. Backup withholding, generally, will apply if
a participant (a) fails to furnish his or her taxpayer
identification number (TIN), which for an individual is
either his or her social security number (SSN) or individual
taxpayer identification number (ITIN), (b) furnishes an
incorrect TIN, (c) has been notified previously by the
Internal Revenue Service that he or she has failed to report
properly payments of interest and dividends, or (d) has
failed to certify that he or she is not subject to backup
withholding.
Certain individual participants may have received during calendar years
1982 through 1985 "qualified reinvested dividends" of up to $750 per year
($1,500 in the case of a joint return) which they did not include in gross
income. No shares of FPL Group common stock purchased with reinvested dividends
after 1985 qualify for this exclusion. Shares of common stock treated as
"qualified reinvested dividends" during the years 1982 through 1985 have a zero
tax basis.
In general, when the shares are sold, the gain realized upon the sale
of the shares will be treated as long term capital gain if the shares were held
for more than one year from the date of acquisition. For sales after May 6,
1997, long term capital gains in the case of individual shareholders are subject
to a maximum tax rate of 20% (10% for individuals in the 10% or 15% tax
bracket). A special lower rate of 18% (8% for individuals in the 10% or 15% tax
bracket) applies to sales of shares of FPL Group common stock after December 31,
2000, if the shares are held for more than five years. However, the date the
five-year holding period starts is different for individuals in a 10% or 15% tax
bracket than for individuals in higher brackets. If the individual is in either
the 10% or 15% tax bracket, the holding period for this special five-year rule
begins on the day following the date the shares are credited to the
participant's account, but if the individual is in a bracket higher than 15%,
the five-year holding period only applies to shares of FPL Group common stock
credited to the participant's account after December 31, 2000.
The description of the federal income tax consequences of participation
in the Plan assumes that the Rights are not currently exercisable.
The taxation of foreign shareholders is complicated, and, except as
noted, is not discussed in this prospectus. Accordingly, Plan participants
should consult with their own tax advisors with respect to federal and foreign
tax consequences of participation in the Plan.
In the case of those foreign holders of shares of FPL Group common
stock and/or FPL preferred stock whose dividends are subject to United States
income tax withholding, the Agent will invest in shares of common stock an
amount equal to the dividends less the amount of tax required to be withheld.
The Plan account statements confirming purchases made for foreign participants
will indicate the amount of tax withheld.
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Foreign shareholders who enroll in the Plan under the "Optional Cash
Payments Only" option will continue to receive cash dividends, less amounts
withheld, on shares held outside their Plan accounts as well as on shares
credited to their Plan accounts in the same manner as if they were not
participating in the Plan. Optional cash payments received from them must be in
United States dollars and will be invested in the same manner as payments from
other participants.
DESCRIPTION OF COMMON STOCK
GENERAL. The following statements describing FPL Group's common stock
are not intended to be a complete description. They are qualified in their
entirety by reference to FPL Group's Restated Articles of Incorporation
(Charter) and its bylaws, and where applicable, to the Restated Articles of
Incorporation of Florida Power & Light Company, and to the Mortgage and Deed of
Trust, dated as of January 1, 1944, between Florida Power & Light Company and
Deutsche Bank Trust Company Americas, as Trustee, as amended and supplemented
(the Mortgage). Reference is also made to the laws of the State of Florida.
FPL Group's authorized capital stock consists of 300,000,000 shares of
common stock, $.01 par value, and 100,000,000 shares of serial preferred stock,
$.01 par value. As of December 20, 2002, 182,657,692 shares of common stock were
issued and outstanding and no shares of serial preferred stock were issued and
outstanding. See "Description of Common Stock--Preferred Share Purchase Rights"
below. FPL Group common stock has no preemptive, subscription or conversion
rights, and there are no redemption or sinking fund provisions applicable
thereto. The outstanding shares of common stock are, and when issued the shares
offered hereby will be, fully paid and nonassessable.
All outstanding FPL Group common stock is listed on the NYSE and trades
under the symbol "FPL." The registrar and transfer agent for the FPL Group
common stock is EquiServe Trust Company, N.A.
A number of provisions that are in FPL Group's Charter and bylaws will
make it difficult for another company to acquire FPL Group and for a holder of
FPL Group common stock to receive any related takeover premium for its shares.
See "--Voting Rights and Non-Cumulative Voting" and "--Preferred Share Purchase
Rights" below.
DIVIDEND RIGHTS. Each share of common stock is entitled to participate
equally with respect to dividends declared on the common stock out of funds
legally available for the payment thereof.
The Charter of FPL Group does not limit the dividends that can be paid
on the common stock. However, as a practical matter, the ability of FPL Group to
pay dividends on the common stock is dependent upon dividends paid to it by its
subsidiaries, primarily FPL. FPL's ability to pay dividends is limited by
restrictions contained in FPL's Restated Articles of Incorporation and in the
Mortgage. However, these restrictions do not currently limit FPL's ability to
pay dividends to FPL Group from its retained earnings.
VOTING RIGHTS AND NON-CUMULATIVE VOTING. In general, the holders of FPL
Group common stock are entitled to one vote per share for the election of
directors and for other corporate purposes. The Charter:
(1) permits the shareholders to remove a director only for cause
and only by the affirmative vote of 75% in voting power of
the outstanding shares of common stock and other outstanding
voting stock, voting as a class;
(2) provides that a vacancy on the Board of Directors may be
filled only by the remaining directors;
(3) permits shareholders to take action only at an annual
meeting, or a special meeting duly called by certain
officers, the Board of Directors or the holders of a
majority in voting power of the outstanding shares of voting
stock entitled to vote on the matter;
23
(4) requires the affirmative vote of 75% in voting power of the
outstanding shares of voting stock to approve certain
Business Combinations (as defined below) with an Interested
Shareholder (as defined below) or its affiliate, unless
approved by a majority of the Continuing Directors (as
defined below) or, in certain cases, unless certain minimum
price and procedural requirements are met; and
(5) requires the affirmative vote of 75% in voting power of the
outstanding shares of voting stock to amend the bylaws or to
amend certain provisions of the Charter including those
provisions discussed in (1) through (4) above.
Such provisions may have significant effects on the ability of the
shareholders to change the composition of an incumbent Board of Directors or to
benefit from certain transactions which are opposed by an incumbent Board of
Directors.
The term "Interested Shareholder" is defined in the Charter to include
a security holder who owns 10% or more in voting power of the outstanding shares
of voting stock, and the term "Continuing Director" is defined in the Charter to
include any director who is not an affiliate of an Interested Shareholder. The
above provisions dealing with Business Combinations involving FPL Group and an
Interested Shareholder may discriminate against a security holder who becomes an
Interested Shareholder by reason of the beneficial ownership of such amount of
common or other voting stock. The term "Business Combination" is defined in the
Charter to include:
(1) any merger or consolidation of FPL Group or any direct or
indirect majority-owned subsidiary with (a) an Interested
Shareholder or (b) any other corporation which is, or after
such merger or consolidation would be, an affiliate of an
Interested Shareholder;
(2) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition in one transaction or a series of
transactions to or with any Interested Shareholder or any
affiliate of an Interested Shareholder of assets of FPL
Group or any direct or indirect majority-owned subsidiary
having an aggregate fair market value of $10,000,000 or
more;
(3) the issuance or transfer by FPL Group or any direct or
indirect majority-owned subsidiary in one transaction or a
series of transactions of any securities of FPL Group or any
subsidiary to any Interested Shareholder or any affiliate of
any Interested Shareholder in exchange for cash, securities
or other property, or a combination thereof, having an
aggregate fair market value of $10,000,000 or more;
(4) the adoption of any plan or proposal for the liquidation or
dissolution of FPL Group proposed by or on behalf of an
Interested Shareholder or an affiliate of an Interested
Shareholder; or
(5) any reclassification of securities, including any reverse
stock split, or recapitalization, of FPL Group, or any
merger or consolidation of FPL Group with any of its direct
or indirect majority-owned subsidiaries or any other
transaction which has the direct or indirect effect of
increasing the proportionate share of the outstanding shares
of any class of equity or convertible securities of FPL
Group or any direct or indirect wholly-owned subsidiary
which is directly or indirectly owned by any Interested
Shareholder or any affiliate of any Interested Shareholder.
The holders of common stock do not have cumulative voting rights, and
therefore the holders of more than 50% of a quorum (majority) of the outstanding
shares of common stock can elect all of FPL Group's directors. Unless otherwise
provided in the Charter or the bylaws or in accordance with applicable law, the
affirmative vote of a majority of the total number of shares represented at a
meeting and entitled to vote is required for shareholder action on a matter.
Voting rights for the election of directors or otherwise, if any, for any series
24
of the serial preferred stock, will be established by the Board of Directors
when such series is issued.
LIQUIDATION RIGHTS. After satisfaction of creditors and payments due
the holders of serial preferred stock, if any, the holders of common stock are
entitled to share ratably in the distribution of all remaining assets.
PREFERRED SHARE PURCHASE RIGHTS. The following statements describing
FPL Group's preferred share purchase rights (each, a "Right") are not intended
to be a complete description. They are qualified in their entirety by reference
to the form of Rights Agreement, dated as of July 1, 1996, between FPL Group and
EquiServe Trust Company, N.A., as successor Rights Agent, as amended. The Rights
Agreement and amendments thereto are filed with the SEC.
On June 17, 1996, FPL Group's Board of Directors declared a dividend of
one Right for each outstanding share of common stock. Thereafter, until the
Distribution Date (as defined below), FPL Group will issue one Right with each
newly issued share of common stock. Each Right (prior to the expiration or
redemption of the Rights) will entitle the holder thereof to purchase from FPL
Group one-hundredth of a share of FPL Group's Series A Junior Participating
Preferred Stock, $.0l par value (Junior Preferred Shares), at an exercise price
of $120 per Right (Purchase Price), subject to adjustment. Until the
Distribution Date, the Rights are represented by the shares of common stock, and
are not exercisable or transferable apart from the common stock. The
Distribution Date is the earlier to occur of:
(1) the tenth day after the public announcement that a person or
group has acquired beneficial ownership of 10% or more of
the common stock, or
(2) the tenth business day after a person commences, or
announces an intention to commence, a tender or exchange
offer, the consummation of which would result in the
beneficial ownership by a person or group of 10% or more of
the common stock. At any time before a person or group
becomes a 10% holder, the Board of Directors may extend the
10-day period.
Separate certificates evidencing the Rights will be mailed to holders of the
common stock as of the close of business on the Distribution Date. The Rights
are exercisable at any time after the Distribution Date, unless earlier
redeemed, or exchanged, and could then begin trading separately from the common
stock. The Rights do not have any voting rights and are not entitled to
dividends.
If a person or group becomes a 10% holder, each Right not owned by the
10% holder would become exercisable for the number of shares of common stock
which, at that time, would have a market value of two times the exercise price
of the Right. In the event that FPL Group is acquired in a merger or other
business combination transaction, or 50% or more of FPL Group's assets or
earning power are sold or otherwise transferred, after a person or group has
become a 10% holder, each Right will entitle its holder to purchase, at the
exercise price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction would have a market
value of two times the exercise price of the Right.
The Rights are redeemable by FPL Group's Board of Directors in whole,
but not in part, at $.01 per Right at any time prior to the time that a person
or group acquires beneficial ownership of 10% or more of the outstanding common
stock. The Rights will expire on June 30, 2006 (unless the expiration date is
extended or the Rights are earlier redeemed or exchanged as described below).
The Purchase Price, and the number of Junior Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution
25
(1) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Junior Preferred
Shares,
(2) as a result of the grant to holders of Junior Preferred
Shares of certain rights or warrants to subscribe for or
purchase Junior Preferred Shares at a price, or securities
convertible into Junior Preferred Shares with a conversion
price, at less than the current market price of Junior
Preferred Shares, or
(3) as a result of the distribution to holders of Junior
Preferred Shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends
payable in Junior Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% in the
Purchase Price. The number of Rights and the number of Junior Preferred Shares
purchasable upon exercise of each Right are also subject to adjustment in the
event of a stock split, subdivision, consolidation, combination or common stock
dividend on the common stock prior to the Distribution Date.
The Board of Directors of FPL Group may exchange the Rights at an
exchange ratio of one share of common stock per Right at any time that is
(1) after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 10% or more of
the outstanding common stock; and
(2) before the acquisition by a person or group of 50% or more
of the outstanding common stock.
The Rights have anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire FPL Group
without conditioning the offer on the redemption of the Rights or on the
acquisition of a certain number of Rights. The Rights beneficially owned by that
person or group may become null and void. The Rights should not interfere with
any merger or other business combination approved by the Board of Directors of
FPL Group, since the Rights may be redeemed by FPL Group at $.01 per Right prior
to the time that a person or group has acquired beneficial ownership of 10% or
more of the common stock.
The Junior Preferred Shares purchasable upon exercise of the Rights
will be entitled to cumulative quarterly dividends in preference to the common
stock at a rate per share equal to the greater of $10 and 100 times the dividend
declared on the common stock for such quarter. In the event of any merger,
consolidation or other transaction in which the shares of common stock are
exchanged, each Junior Preferred Share will be entitled to receive 100 times the
amount and type of consideration received per share of common stock. In the
event of a liquidation of FPL Group, the holders of Junior Preferred Shares will
be entitled to receive in preference to the common stock the greater of $100 per
share and 100 times the payment made per share of common stock. FPL Group has
the right to issue other serial preferred stock ranking prior to the Junior
Preferred Shares with respect to dividend and liquidation preferences. The
Junior Preferred Shares will be redeemable after June 30, 2006, at FPL Group's
option, in whole or in part, at a redemption price per share equal to the
greater of
(1) the per share Purchase Price, and
(2) the then current market price of a Junior Preferred Share.
Each Junior Preferred Share will have 100 votes on all matters submitted to a
vote of the shareholders of FPL Group, voting together with the common stock.
The rights of the Junior Preferred Shares as to dividends, liquidation,
redemption and voting, and in the event of mergers and consolidations, are
protected by customary anti-dilution provisions. Because of the nature of the
dividend, liquidation, redemption and voting rights of the Junior Preferred
Shares, the value of the interest in a Junior Preferred Share purchasable upon
26
the exercise of each Right should approximate the value of one share of common
stock.
The Board of Directors of FPL Group may amend the Rights Agreement and
the Rights, without the consent of the holders of the Rights. However, any
amendment adopted after a person or group becomes a 10% holder may not adversely
affect the interests of holders of Rights. The 10% holder level discussed above
is subject to certain exceptions.
FPL GROUP COMMON STOCK DIVIDENDS
It is generally the practice of FPL Group to pay dividends quarterly on
the 15th day of March, June, September and December. The payment of dividends is
within the sole discretion of the Board of Directors. As a practical matter, the
ability of FPL Group to pay dividends on the common stock is dependent upon
dividends paid to it by its subsidiaries, primarily FPL.
EXPERTS
The consolidated financial statements incorporated by reference in this
prospectus from FPL Group's Annual Report on Form 10-K have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated by reference herein, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
LEGAL OPINIONS
Steel Hector & Davis LLP, Miami, Florida, counsel to FPL Group, will
pass upon the legality of the FPL Group common stock, including the Rights
attached thereto, to be issued pursuant to the Plan.
INDEMNIFICATION
Florida law generally provides that a Florida corporation, such as FPL
Group, may indemnify its directors, officers, employees and agents against
liabilities and expenses they may incur. Florida law also limits the liability
of directors to FPL Group and other persons. FPL Group's bylaws contain
provisions regarding the mandatory indemnification by FPL Group of its
directors, officers, employees and agents under specified conditions. In
addition, FPL Group carries insurance permitted by the laws of Florida on behalf
of its directors, officers, employees or agents which may cover, among other
things, liabilities under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of FPL
Group pursuant to the provisions described in the preceding paragraphs, or
otherwise, FPL Group has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
-----------------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY SUPPLEMENT TO THIS PROSPECTUS. FPL GROUP HAS
NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH ADDITIONAL OR DIFFERENT
INFORMATION. FPL GROUP IS NOT MAKING AN OFFER OF THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT TO THIS PROSPECTUS IS ACCURATE
AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS OR THAT THE
INFORMATION INCORPORATED BY REFERENCE IS ACCURATE AS OF ANY DATE OTHER THAN THE
DATE OF THE DOCUMENT INCORPORATED BY REFERENCE.
27