Exhibit 10(a)
FPL GROUP, INC.
EXECUTIVE ANNUAL INCENTIVE
PLAN
Plan Objectives
Section 1.1
Purpose . The purpose
of the Plan is to achieve the following objectives:
(i) recognize outstanding performers who have contributed
significantly to the Company's success and to the success of such
performers' respective business units, (ii) align corporate
goals and strategy to executive compensation strategy, and
(iii) provide a compensation environment which will attract,
retain and motivate key employees of the Company and its
subsidiaries and affiliates.
Plan Duration
Section 2.1
Term . The Plan shall
be effective for five (5) consecutive Plan Years beginning on
the Effective Date and ending on December 31, 2012.
Definitions
The following definitions shall
apply for purposes of this Plan unless a different meaning is
clearly indicated by the context:
Section 3.1
"Award" means an
award that is (a) described in section 5.1, and
(b) calculated under section 7.1.
Section 3.2 "Award
Agreement" means any
written agreement, contract, or other instrument or document
evidencing an Award.
Section 3.3 "Base
Salary" means, for
any Participant for a Plan Year, such Participant's annual rate of
base salary as of January 1 of the Plan Year (including any
base salary determined within the first ninety (90) days after
January 1 of the Plan Year), or, for Participant's whose
employment begins after January 1 of the Plan Year, the date
on which such Participant's employment begins.
Section 3.4
"Board" means the
Board of Directors of the Company.
Section 3.5 "Change of
Control" means the
first to occur of any of the following events:
(a) The
acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (x) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (y) the combined voting power of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however , that the following
acquisitions (collectively, the "Excluded Acquisitions") shall not
constitute a Change of Control (it being understood that shares
acquired in an Excluded Acquisition may nevertheless be considered
in determining whether any subsequent acquisition by such
individual, entity or group (other than an Excluded Acquisition)
constitutes a Change of Control): (i) any acquisition directly
from the Company or any subsidiary; (ii) any acquisition by
the Company or any subsidiary; (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any subsidiary; (iv) any acquisition by an
underwriter temporarily holding Company securities pursuant to an
offering of such securities; (v) any acquisition in connection
with which, pursuant to Rule 13d-1 promulgated pursuant to the
Exchange Act, the individual, entity or group is permitted to, and
actually does, report its beneficial ownership on Schedule 13G (or
any successor Schedule); provided that, if any such individual,
entity or group subsequently becomes required to or does report its
beneficial ownership on Schedule 13D (or any successor Schedule),
then, for purposes of this paragraph, such individual, entity or
group shall be deemed to have first acquired, on the first date on
which such individual, entity or group becomes required to or does
so report, beneficial ownership of all of the Outstanding Company
Common Stock and/or Outstanding Company Voting Securities
beneficially owned by it on such date; or (vi) any acquisition
in connection with a Business Combination (as hereinafter defined)
which, pursuant to subparagraph (3) below, does not constitute
a Change of Control; or
(b)
Individuals who, as of the Effective Date constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however , that any
individual becoming a director subsequent to the Effective Date
whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of an individual, entity or group other
than the Board; or
(c)
Consummation of a reorganization, merger, consolidation or other
business combination (any of the foregoing, a "Business
Combination") of the Company or any Subsidiary with any other
corporation, in any case with respect to which:
(1)
the Outstanding Company Voting Securities outstanding immediately
prior to such Business Combination do not, immediately following
such Business Combination, continue to represent (either by
remaining outstanding or being converted into voting securities of
the resulting or surviving entity or any ultimate parent thereof)
more than 55% of the outstanding common stock and of the then
outstanding voting securities entitled to vote generally in the
election of directors of the resulting or surviving entity (or any
ultimate parent thereof); or
(2)
less than a majority of the members of the board of directors of
the resulting or surviving entity (or any ultimate parent thereof)
in such Business Combination (the "New Board") consists of
individuals ("Continuing Directors") who were members of the
Incumbent Board (as defined in subparagraph (1) above)
immediately prior to consummation of such Business Combination
(excluding from Continuing Directors for this purpose, however, any
individual whose election or appointment to the Board was at the
request, directly or indirectly, of the entity which entered into
the definitive agreement with the Company or any Subsidiary
providing for such Business Combination); or
(d)
Consummation of a sale or other disposition of all or substantially
all of the assets of the Company, other than to a corporation with
respect to which, following such sale or other disposition, more
than 55% of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities as the case may be or
(ii) shareholder approval of a complete liquidation or
dissolution of the Company.
The term
"the sale or disposition by the Company of all or substantially all
of the assets of the Company" shall mean a sale or other
disposition transaction or series of related transactions involving
assets of the Company or of any Subsidiary (including the stock of
any Subsidiary) in which the value of the assets or stock being
sold or otherwise disposed of (as measured by the purchase price
being paid therefor or by such other method as the Board determines
is appropriate in a case where there is no readily ascertainable
purchase price) constitutes more than two-thirds of the fair market
value of the Company (as hereinafter defined). The "fair market
value of the Company" shall be the aggregate market value of the
then Outstanding Company Common Stock (on a fully diluted basis)
plus the aggregate market value of the Company's other outstanding
equity securities. The aggregate market value of the shares of
Outstanding Company Common Stock shall be determined by multiplying
the number of shares of Outstanding Company Common Stock (on a
fully diluted basis) outstanding on the date of the execution and
delivery of a definitive agreement with respect to the transaction
or series of related transactions (the "Transaction Date") by the
average closing price of the shares of Outstanding Company Common
Stock for the ten trading days immediately preceding the
Transaction Date. The aggregate market value of any other equity
securities of the Company shall be determined in a manner similar
to that prescribed in the immediately preceding sentence for
determining the aggregate market value of the shares of Outstanding
Company Common Stock or by such other method as the Board shall
determine is appropriate.
Section 3.6
"Code" means the
Internal Revenue Code of 1986, as amended, including the
corresponding provisions of any succeeding law.
Section 3.7
"Company" means FPL
Group, Inc., a corporation organized and existing under the laws of
the State of Florida, and any successor thereto. Where the context
requires, "Company" shall also include all direct and indirect
subsidiaries of FPL Group, Inc.
Section 3.8 "Corporate
Performance Objectives" means for any Plan Year one or more objective
performance objectives selected and established by the Committee in
accordance with the requirements of Article VI of the
Plan.
Section 3.9
"Committee" means a
committee consisting of those members of the Compensation Committee
of the Company who are outside directors as defined in section
162(m) of the Code or such other committee consisting of outside
directors as defined in section 162(m) of the Code as the Board may
appoint to serve as the Committee. The Committee shall at all times
consist of at least two members who are outside directors as
defined in section 162(m) of the Code. To the extent of the
delegation set forth in Section 8.3 hereof, references in this
Plan or any instrument issued in relation to this Plan to the
Committee shall be deemed to be references to the Committee's
delegate.
Section 3.10
"Disability" shall,
for purposes of determining the vesting of an Award, be considered
to exist at the Participant's termination of employment if, on such
date, the Participant is suffering from a medical condition which
qualifies him (or would, if he were a participant in such plan and
upon completion of any applicable waiting or elimination period,
qualify him) for benefits under the FPL Group Long Term Disability
Plan for Executives at the time the Award is made.
Section 3.11
"Discharge for Cause" means termination of employment (a) upon
the finding of the Committee of an intentional failure to perform
stated duties, breach of a fiduciary duty involving personal
dishonesty which results in material loss to the Company or one of
its affiliates, or willful violation of any law, rule or regulation
(other than traffic violations or similar offenses), or final
cease-and-desist order which results in material loss to the
Company or one of its affiliates or (b) pursuant to the
provisions of any written employment agreement between the
Participant and his employer governing discharge for
cause.
Section 3.12
"Effective Date" means January 1, 2008, subject to approval
by the Company's shareholders at the annual meeting of shareholders
held in 2008, or any adjournment or postponement
thereof.
Section 3.13
"Employee" means any
individual employed by the Company as an employee, but does not
mean an individual who renders service solely as a director or
independent contractor.
Section 3.14
"ERISA" means the
Employee Retirement Income Security Act of 1974, as
amended.
Section 3.15 "Exchange
Act" means the
Securities Exchange Act of 1934, as amended from time to time,
including the corresponding provisions of any succeeding
law.
Section 3.16
"GAAP" means
generally accepted accounting principles, as amended from time to
time and applied in preparing the financial statements of the
Company.
Section 3.17 "Good
Reason" means
(i) a material diminution in base salary, authority, duties or
responsibilities, or (ii) a material change (more than 100
miles) in the geographic location where the Participant is
employed, provided that the Participant has given notice to the
Company of the existence of these conditions within ninety
(90) days of the initial existence of the conditions and the
Company has been given at least thirty (30) days to cure the
conditions.
Section 3.18
"Participant" means
an Employee who is selected by the Committee as eligible to
participate in the Plan for a Plan Year.
Section 3.19
"Plan" means the FPL
Group, Inc. Executive Annual Incentive Plan.
Section 3.20 "Plan
Year" means the
calendar year.
Section 3.21
"Retirement" means,
with respect to any Employee, voluntary or involuntary termination
of employment (other than a Discharge for Cause) occurring at or
after the Employee's sixty-fifth (65th) birthday, or, with the
consent of the Committee, prior to such date.
Section 3.22 "Section
162(m) Employee" means at any date (i) any individual who,
with respect to the previous taxable year of the Company, was a
"covered employee" of the Company within the meaning of
section 162(m) of the Code, as hereinafter defined;
provided, however , that the term "Section 162(m) Employee"
shall not include any such individual who is designated by the
Committee, in its discretion, at the time of any Award or at any
subsequent time, as reasonably expected not to be such a "covered
employee" with respect to the current taxable year of the Company
and (ii) any individual who is designated by the Committee, in
its discretion, at the time of any Award or at any subsequent time,
as reasonably expected to be such a "covered employee" with respect
to the current taxable year of the Company or with respect to the
taxable year of the Company in which any applicable Award will be
paid.
Section 3.23 "Taxable
Year" means the
taxable year of the Company for federal income tax
purposes.
Eligibility and Participation; Termination of
Participation
Section 4.1
Eligibility . The
Committee shall annually select the individual Employees, if any,
eligible for participation in the Plan, who shall be key employees
of the Company and its subsidiaries and affiliates.
Section 4.2
Participation . An
Employee who holds or assumes an eligible position shall be a
Participant for a Plan Year only if selected by the Committee to
participate in the Plan for the Plan Year. An Employee who holds an
eligible position on the first day of a Plan Year, or who is hired,
transferred or promoted into an eligible position during the first
two (2) months of the Plan Year, may participate in the Plan
for that Plan Year only if selected for participation during the
first ninety (90) days of the Plan Year. An Employee who is
hired, transferred or promoted into an eligible position after the
first two (2) months of the Plan Year may participate for the
Plan Year only if selected to parti
