FPL GROUP, INC.
AMENDED AND RESTATED LONG TERM
INCENTIVE PLAN
1.01 Purpose. The purpose of this Amended and Restated Long
Term Incentive Plan (the “Plan”) of FPL Group, Inc.
(together with any successor thereto, the “Company”) is
(a) to promote the identity of interests between shareholders
and employees of the Company by encouraging and creating
significant ownership of common stock of the Company by officers
and other salaried employees of the Company and its subsidiaries;
(b) to enable the Company to attract and retain qualified
officers and employees who contribute to the Company’s
success by their ability, ingenuity and industry; and (c) to
provide meaningful long-term incentive opportunities for officers
and other employees who are responsible for the success of the
Company and who are in a position to make significant contributions
toward its objectives.
1.02 Effective Date. The Plan was originally effective on
February 14, 1994 having been approved by the affirmative vote
of the holders of a majority of the Shares present or represented
and entitled to vote (and the affirmative vote of a majority of the
Shares voting) at a meeting of the Company’s shareholders
held on May 9, 1994. The Plan was subsequently amended by the
Board at a meeting held on February 12, 1996, amended and
restated by the Board of Directors of the Company at a meeting held
on February 11, 2002 and further amended and restated by the
Board of Directors of the Company at a meeting held on
December 20, 2002. The Plan was further amended and restated
effective on May 21, 2004, having been approved by the
affirmative vote of the holders of a majority of the Shares present
or represented and entitled to vote (and the affirmative vote of a
majority of the Shares voting) at a meeting of the Company’s
shareholders held on May 21, 2004. The Plan was further
amended and restated by the Board (i) at a meeting held on
February 18, 2005, (ii) at a meeting held on
October 14, 2005, (iii) at a meeting held on
October 13, 2006, and (iv) at a meeting held on
December 12, 2008 (in order to comply with Section 409A
(“Code Section 409A”) of the Internal Revenue Code
of 1986 (the “Code”), as amended (to the extent
applicable). The Plan was further amended and restated effective on
May 22, 2009 (in order to establish new Performance Objectives
(as defined herein)) following submission of the Plan for
shareholder approval and receipt thereof.
1.03 Termination of the Plan.
The Plan will terminate on
May 21, 2014. Awards outstanding as of such termination date
shall not be affected or impaired by the termination of the
Plan.
1.04 Stock Split. In connection with the two-for-one division of
the Shares approved by the Board on February 18, 2005 and
effective March 15, 2005, and pursuant to the authority
granted in Section 10 of the Plan, the Committee, by consent
dated March 8, 2005 and effective March 15, 2005,
adjusted the total number of Shares reserved and available for
Awards under, and each maximum yearly award amount expressed as a
number of Shares set forth in, the Plan automatically by
multiplying the applicable number of Shares by two.
SECTION 2. Definitions . In addition to the terms defined elsewhere in
the Plan, the following shall be defined terms under the
Plan:
2.01 “Award” means any Performance Award, Option, Stock
Appreciation Right, Restricted Stock, Deferred Stock, Dividend
Equivalent, or Other Stock-Based Award, or any other right or
interest relating to Shares or cash, granted to a Participant under
the Plan.
2.02 “Award Agreement”
means any written agreement,
contract, or other instrument or document evidencing an
Award.
2.03 “Board” means the Board of Directors of the
Company.
2.04 “Cause” shall mean, unless otherwise defined in an Award
Agreement, (i) repeated violations by the Participant of the
Participant’s obligations to the Company (or the applicable
employer subsidiary or affiliate of the Company) (other than as a
result of incapacity due to physical or mental illness) which are
demonstrably willful and deliberate on the Participant’s
part, which are committed in bad faith or without reasonable belief
that such violations are in the best interests of the Company (or
the applicable employer subsidiary or affiliate of the Company) and
which are not remedied in a reasonable period of time after receipt
of written notice from the Company specifying such violations,
(ii) the conviction of the Participant of a felony involving
an act of dishonesty intended to result in substantial personal
enrichment at the expense of the Company or its subsidiaries or
affiliated companies, or (iii) prior to a Change in Control,
such other events as shall be determined by the Committee in its
sole discretion.
2.05 “Change of Control”
and related terms are defined in
Section 9.
2.06 “Change in Control
Event” means, with
respect to a Participant: (a) a change in ownership of the
Participant’s Service Recipient; (b) a change in
effective control of the Participant’s Service Recipient; or
(c) a change in the ownership of a substantial portion of the
assets of the Participant’s Service Recipient. The existence
of a Change in Control Event shall be determined by the Committee
in accordance with Code Section 409A and the regulations
thereunder.
2.07 “Code” means the Internal Revenue Code of 1986, as
amended from time to time. References to any provision of the Code
shall be deemed to include successor provisions thereto and
regulations thereunder.
2.08 “Committee”
means a committee composed of not
less than two directors designated by the Board to administer the
Plan; provided, however, that each member of the Committee shall be
a “Non-Employee Director” within the meaning of Rule
16b-3 under the Exchange Act, an “outside director”
within the meaning of Section 162(m)(4)(C)(i) of the Code and
the regulations thereunder, and an “independent
director” within the meaning of Section 303A of the New
York Stock Exchange Listed Company Manual (or, in each case, any
successor term or provision). The Committee may, without
limitation, be the Compensation Committee of the Board or a
subcommittee thereof, if such committee or subcommittee satisfies
the foregoing requirements.
2.09 “Company”
is defined in
Section 1.
2.10 “Covered Employee”
means a Participant designated as
such in connection with the grant of a Performance Award,
Performance-Based Restricted Stock Award, or Other Stock-Based
Award by the Committee who is or may be a “covered
employee” within the meaning of Section 162(m)(3) of the
Code in the year in which such Award is expected to be taxable to
such Participant.
2.11 “Deferred Stock”
means a right, granted to a
Participant under Section 6.05, to receive Shares at the end
of a specified deferral period.
2.12 “Delegated
Committee” means a
committee appointed by the Board to perform the functions set forth
in Section 3.04 as to Non-Reporting Participants, which
committee is composed of (i) one or more directors or
(ii) a senior executive officer (as contemplated by Florida
Statutes section 607.0825(1)(e) or any successor statute
thereto).
2.13 “Disability”
shall mean: (a) the inability
to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months; or (b), the receipt
of income replacement benefits for a period of not less than 3
months under an accident and health plan covering employees of the
Company or any Subsidiary by reason of any medically determinable
physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not
less than 12 months; or (c) any condition as a result of which
a Participant is determined to be totally disabled by the Social
Security Administration or Railroad Retirement Board.
2.14 “Dividend
Equivalent” means a
right, granted to a Participant under Section 6.03, to receive
cash, Shares, other Awards, or other property equal in value to
dividends paid with respect to a specified number of
Shares.
2.15 “Exchange Act”
means the Securities Exchange Act of
1934, as amended from time to time. References to any provision of
the Exchange Act shall be deemed to include successor provisions
thereto and regulations thereunder.
2.16 “Fair Market Value”
means, with respect to Shares,
Awards, or other property, the fair market value of such Shares,
Awards, or other property determined by such reasonable methods or
procedures using actual transactions in such stock as reported on
an established securities market as shall be established from time
to time by the Committee. Unless otherwise determined by the
Committee, the Fair Market Value of Shares as of any date shall be
the closing sales price on that date of a Share as reported in the
New York Stock Exchange Composite Transaction Report (or if the
Shares were not traded on the New York Stock Exchange on such date,
the closing sales price on the nearest date preceding such date on
which the Shares were so traded).
2.17 “Incentive Stock
Option” means any
Option designated as, and qualified as, an “incentive stock
option” within the meaning of Section 422 of the
Code.
2.18 “Non-Qualified Stock
Option” means an
Option that is not an Incentive Stock Option, whether or not
designated as such.
2.19 “Non-Reporting
Participant” means
a Participant who is not subject to either the reporting
requirements of Section 16(a) of the Exchange Act or the
short-swing trading provisions of Section 16(b) of the
Exchange Act and is not a Covered Employee.
2.20 “Option”
means a right, granted to a
Participant under Section 6.06, to purchase Shares, other
Awards, or other property at a specified price during specified
time periods. An Option may be either an Incentive Stock Option or
a Non-Qualified Stock Option.
2.21 “Other Stock-Based
Award” means a
right, granted to a Participant under Section 6.08, that
relates to or is valued by reference to Shares.
2.22 “Participant”
means a person who, as an officer or
salaried employee of the Company or any Subsidiary, has been
granted an Award under the Plan.
2.23 “Performance Award”
means a right, granted to a
Participant under Section 6.02, to receive cash, Shares, other
Awards, or other property the payment of which is contingent upon
achievement of performance goals specified by the
Committee.
2.24 “Performance-Based Restricted
Stock” means
Restricted Stock that is subject to a risk of forfeiture if
specified performance criteria are not met within the restriction
period.
2.25 “Plan” is defined in Section 1.
2.26 “Repricing
Restrictions” means
the second sentence of Section 6.06(i) and the second sentence
of Section 6.07(i).
2.27 “Restricted Stock”
means Shares, granted to a
Participant under Section 6.04, that are subject to certain
restrictions and to a risk of forfeiture.
2.28 “Rule 16b-3”
means Rule 16b-3, as from time to
time amended and applicable to Participants, promulgated by the
Securities and Exchange Commission under Section 16 of the
Exchange Act.
2.29 “Service Recipient”
means, with respect to a Participant
on any date: (a) the corporation for which the Participant is
performing services on such date; (b) all corporations that
are liable to the Participant for the benefits due to him under the
Plan; (c) a corporation that is a majority shareholder of a
corporation described in section 2.29(a) or (b); or (d) any
corporation in a chain of corporations each of which is a majority
shareholder of another corporation in the chain, ending in a
corporation described in section 2.29(a) or (b).
2.30 “Shares”
means the Common Stock, $.01 par
value, of the Company and such other securities of the Company as
may be substituted for Shares or such other securities pursuant to
Section 10.
2.31 “Stock Appreciation
Right” means a
right, granted to a Participant under Section 6.07, to be paid
an amount measured by the appreciation in the Fair Market Value of
Shares from the date of grant to the date of exercise of the right,
with payment to be made in cash, Shares, other Awards, or other
property as specified in the Award or determined by the
Committee.
2.32 “Subsidiary”
means any corporation (other than
the Company) or other non-corporate entity with respect to which
the Company owns, directly or indirectly, 50% or more of the total
combined voting power of all classes of stock or other ownership
interests. In addition, any other related entity may be designated
by the Board as a Subsidiary, provided such entity could be
considered as a subsidiary according to generally accepted
accounting principles and, in the case of Options and Stock
Appreciation Rights, provided the Award would be considered to be
granted in respect of “service recipient stock” under
Section 409A of the Code.
2.33 “Year” means a calendar year.
SECTION 3. Administration.
3.01 Authority of the Committee.
The Plan shall be administered by
the Committee. The Committee shall have full and final authority to
take the following actions, in each case subject to and consistent
with the provisions of the Plan:
(i) to select and designate
Participants;
(ii) to designate Subsidiaries;
(iii) to determine the type or types of Awards
to be granted to each Participant;
(iv) to determine the number of Awards to be
granted, the number of Shares to which an Award will relate, the
terms and conditions of any Award granted under the Plan including,
but not limited to, any exercise price, grant price, or purchase
price, any restriction or condition, any schedule for lapse of
restrictions or conditions relating to transferability or
forfeiture, exercisability, or settlement of an Award, and waivers
or accelerations thereof, and waiver of performance conditions
relating to an Award (based in each case on such considerations as
the Committee shall determine), and all other matters to be
determined in connection with an Award;
(v) to determine whether, to what extent, and
under what circumstances an Award may be settled, or the exercise
price of an Award may be paid, in cash, Shares, other Awards, or
other property, or an Award may be cancelled, forfeited, or
surrendered;
(vi) to determine whether, to what extent, and
under what circumstances cash, Shares, other Awards, or other
property payable with respect to an Award will be deferred either
automatically, at the election of the Committee, or, to the extent
permissible under Code Section 409A, at the election of the
Participant;
(vii) to prescribe the form of each Award
Agreement, which need not be identical for each
Participant;
(viii) to adopt, amend, suspend, waive, and
rescind such rules and regulations and appoint such agents as the
Committee may deem necessary or advisable to administer the
Plan;
(ix) to correct any defect or supply any
omission or reconcile any inconsistency in the Plan and to construe
and interpret the Plan and any Award, rules and regulations, Award
Agreement, or other instrument hereunder;
(x) to make all other decisions and
determinations as may be required under the terms of the Plan or as
the Committee may deem necessary or advisable for the
administration of the Plan;
(xi) to amend the provisions of any Award or
Award Agreement to maintain the qualified status of an Incentive
Stock Option; and
(xii) to amend the provisions of any Award or
Award Agreement in compliance with, or to obtain exemption from,
Code Section 409A.
3.02 Manner of Exercise of Committee
Authority. Unless
authority is specifically reserved to the Board under the terms of
the Plan, or applicable law, the Committee (or the Delegated
Committee, with respect to the authority specifically delegated to
it pursuant to Section 3.04 hereof) shall have sole discretion
in exercising such authority under the Plan. Any action of the
Committee (or the Delegated Committee, with respect to the
authority specifically delegated to it pursuant to
Section 3.04 hereof) with respect to the Plan shall be final,
conclusive, and binding on all persons, including the Company,
Subsidiaries, Participants, any person claiming any rights under
the Plan from or through any Participant, and shareholders. The
express grant of any specific power to the Committee, and the
taking of any action by the Committee, shall not be construed as
limiting any power or authority of the Committee. A memorandum
signed by all members of the Committee shall constitute the act of
the Committee without the necessity, in such event, to hold a
meeting. The Committee may delegate to officers or managers of the
Company or any Subsidiary the authority, subject to such terms as
the Committee shall determine, to perform administrative functions
under the Plan.
3.03 Limitation of Liability.
Each member of the Committee and the
Delegated Committee shall be entitled to, in good faith, rely or
act upon any report or other information furnished to him by any
officer or other employee of the Company or any Subsidiary, the
Company’s independent certified public accountants, or any
executive compensation consultant or other professional retained by
the Company to assist in the administration of the Plan. No member
of the Committee or the Delegated Committee, nor any officer or
employee of the Company acting on behalf of the Committee or the
Delegated Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with
respect to the Plan, and all members of the Committee and the
Delegated Committee and any officer or employee of the Company
acting on their behalf shall, to the extent permitted by law, be
fully indemnified and protected by the Company with respect to any
such action, determination, or interpretation.
3.04 Authority of the Delegated
Committee. The Delegated
Committee shall have the authority to take the actions, in each
case subject to and consistent with the provisions of the Plan, set
forth in Sections 3.01(i), (iii), (iv), (v), (vi) and (vii),
but only as to Non-Reporting Participants. References to the
Committee in the Plan shall be deemed to include the Delegated
Committee in connection with all actions taken by the Delegated
Committee in accordance with this Section 3.04. The Committee
shall have the authority to review the Delegated Committee’s
actions to ensure compliance with the Plan and consistency with the
actions of the Committee. This grant of authority to the Delegated
Committee does not replace, but is in addition to, the authority of
the Committee as set forth in this Section 3.
SECTION 4. Shares Subject to the
Plan. Subject to
adjustment as provided in Section 10, the total number of
Shares reserved and available for Awards under the Plan as of
December 31, 2003 shall be 13,000,000. Such Shares may be
authorized and unissued Shares or Shares purchased on the open
market. For purposes of this Section 4, the number of and time
at which Shares shall be deemed to be subject to Awards and
therefore counted against the number of Shares reserved and
available under the Plan shall be the earliest date at which the
Committee can reasonably estimate the number of Shares to be
distributed in settlement of an Award or with respect to which
payments will be made; provided, however, that, the Committee may
adopt procedures for the counting of Shares relating to any Award
for which the number of Shares to be distributed or with respect to
which payment will be made cannot be fixed at the date of grant to
ensure appropriate counting, avoid double counting (in the case of
tandem or substitute awards), and provide for adjustments in any
case in which the number of Shares actually distributed or with
respect to which payments are actually made differs from the number
of Shares previously counted in connection with such Award. If any
Shares to which an Award relates are forfeited or the Award is
settled or terminates without a distribution of Shares (whether or
not cash, other Awards, or other property is distributed with
respect to such Award), any Shares counted against the number of
Shares reserved and available under the Plan with respect to such
Award shall, to the extent of any such forfeiture, settlement or
termination, again be available for Awards under the
Plan.
SECTION 5. Eligibility. Awards may be granted only to individuals who
are officers or other salaried employees (including employees who
also are directors) of the Company or a Subsidiary; provided,
however, that no Award shall be granted to any member of the
Committee.
SECTION 6. Specific Terms of
Awards.
6.01 General. Awards may be granted on the terms and
conditions set forth in this Section 6. In addition, the
Committee may impose on any Award or the exercise thereof, at the
date of grant or thereafter (subject to Section 11.02), such
additional terms and conditions, not inconsistent with the
provisions of the Plan and applicable law, as the Committee shall
determine, including without limitation the acceleration of vesting
of any Awards or terms requiring forfeiture of Awards in the event
of termination of employment by the Participant. Except as provided
in Sections 7.03 or 7.04, only services may be required as
consideration for the grant of any Award.
6.02 Performance Awards. Subject to the provisions of Sections 7.01 and
7.02, the Committee is authorized to grant Performance Awards to
Participants on the following terms and conditions:
(i) Award and Conditions. A Performance Award
shall confer upon the Participant rights, valued as determined by
the Committee, and payable to, or exercisable by, the Participant
to whom the Performance Award is granted, in whole or in part, as
determined by the Committee, conditioned upon the achievement of
performance criteria determined by the Committee.
(ii) Other Terms. A Performance Award shall be
denominated in Shares and may be payable in cash, Shares, other
Awards, or other property, and have such other terms as shall be
determined by the Committee. Notwithstanding the foregoing, and
except with respect to adjustments pursuant to Section 10 of
this Plan and payments made, in the discretion of the Committee, in
connection with a Change of Control, a Performance Award
outstanding on or after May 21, 2004 which confers upon the
Participant rights to receive shares of Common Stock, $.01 par
value per share, of the Company in the form referred to as
“Performance Share Awards” shall be payable in Shares,
and the Company shall be authorized to withhold, from any
distribution of Shares relating to a Performance Share Award, in
order to meet the Company’s obligations for the payment of
withholding taxes, Shares with a Fair Market Value equal to the
minimum statutory withholding for taxes (including federal and
state income taxes and payroll taxes applicable to the supplemental
taxable income relating to such distribution) and any other tax
liabilities for which the Company has an obligation relating to
such distribution.
6.03 Dividend Equivalents.
The Committee is authorized to grant
Dividend Equivalents to Participants. A Dividend Equivalent is an
Award entitling the recipient to receive credits based on cash or
stock distributions that would have been paid on the Shares
specified in the Dividend Equivalent Award (or other Award to which
it relates) if such Shares had been issued to and held by the
recipient. The terms and conditions of Dividend Equivalents shall
be specified in the Award Agreement. Dividend Equivalents credited
to the holder of a Dividend Equivalent Award may be paid currently,
accumulated or may be deemed to be reinvested in additional Shares
which may thereafter accrue additional equivalents. Any such
reinvestment shall be at Fair Market Value on the date of
reinvestment. Dividend Equivalents may be settled in cash or Shares
or a combination thereof, in a single installment or in
installments, all determined in the sole discretion of the
Committee. A Dividend Equivalent granted as a component of another
Award may provide that such Dividend Equivalent shall be settled
upon exercise, settlement, or payment of, or lapse of restrictions
on, such other award (with, in the discretion of the Committee,
interest accruing on such Dividend Equivalent from the date of
crediting to the date of settlement), and that such Dividend
Equivalent shall expire or be forfeited or annulled under the same
conditions as such other Award. A Dividend Equivalent granted as a
component of another Award may also contain terms and conditions
different from such other Award. In no event, shall the payment or
distribution of Dividend Equivalents be contingent upon the
exercise of an Option, Stock Appreciation Right or any other stock
right. Shares distributed in connection with a stock split or stock
dividend, and other property distributed as a dividend will be
credited as Dividend Equivalents, and may be subject to
restrictions and a risk of forfeiture to the same extent as the
Award with respect to which such stock or other property has been
distributed.
6.04 Restricted Stock. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and
conditions:
(i) Issuance and Restrictions. Restricted Stock
shall be subject to such restrictions on transferability and other
restrictions as the Committee may impose (including, without
limitation, limitations on the right to vote Restricted Stock or
the right to receive dividends thereon), which restrictions may
lapse separately or in combination at such times, under such
circumstances, in such installments, or otherwise as the Committee
shall determine.
(ii) Forfeiture. Performance-Based Restricted
Stock shall be forfeited unless preestablished performance criteria
specified by the Committee are met during the applicable
restriction period. Except as otherwise determined by the
Committee, upon termination of employment (as determined under
criteria established by the Committee) during the applicable
restriction period, Restricted Stock that is at that time subject
to restrictions shall be forfeited and reacquired by the Company;
provided, however, that the Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions
relating to Restricted Stock will be waived in whole or in part in
the event of terminations resulting from specified
causes.
(iii) Possession of Restricted Shares.
Restricted Stock granted under the Plan may be evidenced in such
manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the
Participant, such certificates shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to
such Restricted Stock, the Company shall retain physical possession
of the certificates, and the Participant shall deliver a stock
power to the Company, endorsed in blank, relating to the Restricted
Stock. If non-certificated shares representing Restricted Stock are
registered in the name of the Participant, such shares shall be
maintained in a separate restricted share account subject to terms,
conditions, and restrictions of like effect.
(iv) Dividends. Cash dividends credited to the
holder of Restricted Stock may be paid currently, accumulated or
may be deemed to be reinvested in additional shares of Restricted
Stock. Any such reinvestment shall be at Fair Market Value on the
date of reinvestment. Accumulated dividends may be settled in cash
or Shares or a combination thereof, in a single installment or in
installments, all determined in the sole discretion of the
Committee. The Committee may provide that such accumulated
dividends shall be settled upon the lapse of restrictions on the
Shares of Restricted Stock (with, in the discretion of the
Committee, interest accruing on such dividend from the date of
crediting to the date of settlement), and that the accumulated
dividends shall be forfeited or annulled under the same conditions
as such Restricted Stock Award. Shares distributed in connection
with a stock split or stock dividend, and other property
distributed as a dividend, may be subject to restrictions and a
risk of forfeiture to the same extent as the Restricted Stock with
respect to which such stock or other property has been
distributed.
(v) Tax Withholding. Except as the Committee may
determine in its discretion in connection with a Change of Control
and except as may be provided pursuant to Section 10 of this
Plan, upon delivery of unrestricted Shares to a Participant in
connection with the lapse of forfeiture restrictions on all or a
portion of an Award of Restricted Stock, the Company shall be
authorized to withhold from any such distribution, in order to meet
the Company’s obligations for the payment of withholding
taxes, Shares with a Fair Market Value equal to the minimum
statutory withholding for taxes (including federal and state income
taxes and payroll taxes applicable to the supplemental taxable
income relating to such distribution) and any other tax liabilities
for which the Company has an obligation relating to such
distribution.
6.05 Deferred Stock. The Committee is authorized to grant Deferred
Stock to Participants, on the following terms and
conditions:
(i) Award and Restrictions. Delivery of Shares
will occur upon expiration of the deferral period specified for
Deferred Stock by the Committee (or, if permitted by the Committee,
as elected by the Participant). In addition, Deferred Stock shall
be subject to such restrictions as the Committee may
impose,
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