-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Cwi0KuuG8VfOK793BYtWuREOwxzYDYlS2mz8sOjB6h6xYIXbEEpc2riijm1NfuUB US0eV4ZGackuhX1ONBL0pg== 0000753308-94-000014.txt : 19940816 0000753308-94-000014.hdr.sgml : 19940816 ACCESSION NUMBER: 0000753308-94-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FPL GROUP INC CENTRAL INDEX KEY: 0000753308 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 592449419 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08841 FILM NUMBER: 94544407 BUSINESS ADDRESS: STREET 1: 700 UNIVERSE BLVD CITY: JUNO BEACH STATE: FL ZIP: 33408 BUSINESS PHONE: 4076944647 MAIL ADDRESS: STREET 1: P O BOX 14000 CITY: JUNO BEACH STATE: FL ZIP: 33408 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-8841 FPL GROUP, INC. (Exact name of registrant as specified in its charter) Florida 59-2449419 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 700 Universe Boulevard Juno Beach, Florida 33408 (Address of principal executive offices) (Zip Code) (407) 694-3509 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.01 Par Value, outstanding at July 31, 1994: 187,957,852 shares PART I - FINANCIAL INFORMATION Item 1. Financial Statements FPL GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, 1994 1993 1994 1993 (In thousands, except per share amounts) OPERATING REVENUES: Utility ........................................ $1,418,573 $1,321,504 $2,574,362 $2,425,040 Non-utility .................................... 24,474 28,362 47,586 57,202 Total operating revenues ..................... 1,443,047 1,349,866 2,621,948 2,482,242 OPERATING EXPENSES: Utility operations: Fuel, purchased power and interchange ........ 473,587 475,047 838,401 850,588 Other operations and maintenance ............. 354,394 340,264 624,146 602,650 Non-Utility operations ......................... 21,717 22,014 41,949 46,468 Depreciation and amortization .................. 170,196 147,269 337,191 290,000 Taxes other than income taxes .................. 134,275 129,666 256,138 251,005 Total operating expenses ..................... 1,154,169 1,114,260 2,097,825 2,040,711 OPERATING INCOME ................................. 288,878 235,606 524,123 441,531 OTHER (INCOME) DEDUCTIONS: Interest expense ............................... 79,679 95,822 161,642 190,081 Allowance for funds used during construction ... (4,874) (18,657) (15,724) (39,992) Preferred stock dividend requirements of Florida Power & Light Company ................ 9,879 10,643 19,808 21,919 Other - net .................................... 682 (15,947) 3,454 (28,064) Total other deductions - net ................. 85,366 71,861 169,180 143,944 INCOME BEFORE INCOME TAXES ....................... 203,512 163,745 354,943 297,587 INCOME TAXES ..................................... 77,669 53,199 134,661 95,091 NET INCOME ....................................... $ 125,843 $ 110,546 $ 220,282 $ 202,496 Average number of common shares outstanding ...... 179,170 185,480 179,248 184,634 Earnings per share of common stock ............... $ .70 $ .60 $ 1.23 $ 1.10 Dividends per share of common stock .............. $ .42 $ .62 $ 1.04 $ 1.23
This report should be read in conjunction with the Notes to Condensed Consolidated Financial Statements on Pages 5 through 7 herein and the Notes to Consolidated Financial Statements appearing in FPL Group, Inc.'s (FPL Group) 1993 Annual Report on Form 10-K (Form 10-K). FPL GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 1994 December 31, (Unaudited) 1993 (Thousands of Dollars) ASSETS PROPERTY, PLANT AND EQUIPMENT: Electric utility plant - at original cost, including nuclear fuel under capital lease ........................... $15,680,038 $ 14,838,160 Construction work in progress .......................................... 278,106 781,435 Other .................................................................. 242,156 261,125 Less accumulated depreciation and amortization ......................... 5,908,808 5,591,265 Total property, plant and equipment - net ............................ 10,291,492 10,289,455 INVESTMENTS .............................................................. 931,164 984,992 CURRENT ASSETS: Cash and cash equivalents .............................................. 66,138 152,014 Marketable securities - at market value (cost of $76,109 and $169,607, respectively) ............................... 73,138 171,988 Receivables - net ...................................................... 548,254 504,597 Materials, supplies and fossil fuel stock - at average cost ............ 309,072 329,599 Other .................................................................. 101,539 93,159 Total current assets ................................................. 1,098,141 1,251,357 OTHER ASSETS AND DEFERRED DEBITS: Unamortized debt reacquisition costs of FPL ............................ 296,946 302,561 Deferred litigation items of FPL ....................................... 110,859 110,859 Other .................................................................. 140,135 138,788 Total other assets and deferred debits ............................... 547,940 552,208 TOTAL ASSETS ............................................................... $12,868,737 $ 13,078,012 CAPITALIZATION AND LIABILITIES CAPITALIZATION: Common stock ........................................................... $ 1,884 $ 1,901 Other shareholders' equity ............................................. 4,099,345 4,098,706 Preferred stock of Florida Power & Light Company: Without sinking fund requirements .................................... 451,250 451,250 With sinking fund requirements ....................................... 94,000 97,000 Long-term debt ......................................................... 3,906,702 3,748,983 Total capitalization ................................................. 8,553,181 8,397,840 CURRENT LIABILITIES: Commercial paper ....................................................... 124,511 349,600 Current maturities of long-term debt and preferred stock ............... 169,564 279,680 Accounts payable ....................................................... 271,741 323,282 Customers' deposits .................................................... 218,284 216,140 Accrued interest and taxes ............................................. 318,561 204,086 Other .................................................................. 316,317 465,829 Total current liabilities ............................................ 1,418,978 1,838,617 OTHER LIABILITIES AND DEFERRED CREDITS Accumulated deferred income taxes ...................................... 1,568,681 1,512,067 Deferred regulatory credit - income taxes............................... 204,349 216,546 Unamortized investment tax credits ..................................... 313,396 323,791 Capital lease obligations .............................................. 237,422 271,498 Other .................................................................. 572,730 517,653 Total other liabilities and deferred credits ......................... 2,896,578 2,841,555 COMMITMENTS AND CONTINGENCIES TOTAL CAPITALIZATION AND LIABILITIES ....................................... $12,868,737 $ 13,078,012
This report should be read in conjunction with the Notes to Condensed Consolidated Financial Statements on Pages 5 through 7 herein and the Notes to Consolidated Financial Statements appearing in FPL Group's 1993 Form 10-K. FPL GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30, 1994 1993 (Thousands of Dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income ................................................................ $ 220,282 $ 202,496 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ......................................... 337,191 290,000 Increase in deferred income taxes and related regulatory credit ....... 44,417 32,171 Deferrals under cost recovery clauses (1) ............................. (61,823) (20,360) Other - net ........................................................... 96,486 (45,951) Net cash provided by operating activities ............................... 636,553 458,356 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (2) .................................................. (442,865) (788,059) Other - net ............................................................... 126,158 59,431 Net cash used in investing activities ................................... (316,707) (728,628) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of bonds and other long-term debt ................................ 86,350 1,405,600 Issuance of preferred stock of Florida Power & Light Company .............. - 125,000 Retirement of long-term debt and preferred stock .......................... (253,769) (1,349,544) Issuance of common stock .................................................. 16,685 144,946 Repurchase of common stock ................................................ (63,977) - (Decrease) increase in commercial paper ................................... (25,089) 350,100 Dividends on common stock ................................................. (186,289) (227,431) Other - net................................................................ 20,367 57,885 Net cash (used in) provided by financing activities ..................... (405,722) 506,556 Net (decrease) increase in cash and cash equivalents ........................ (85,876) 236,284 Cash and cash equivalents at beginning of period ............................ 152,014 78,156 Cash and cash equivalents at end of period .................................. $ 66,138 $ 314,440 Supplemental disclosures of cash flow information: Cash paid for interest (net of amount capitalized) ........................ $ 160,057 $ 172,638 Cash paid for income taxes ................................................ $ 66,250 $ 21,927 Supplemental schedule of noncash investing and financing activities: Additions to capital lease obligations .................................... $ 17,759 $ 33,153 (1) Represents the effect on cash flows from operating activities of the net amounts deferred or recovered under the fuel and purchased power, oil-backout, energy conservation, capacity and environmental cost recovery clauses. (2) Capital expenditures exclude allowance for equity funds used during construction.
This report should be read in conjunction with the Notes to Condensed Consolidated Financial Statements on Pages 5 through 7 herein and the Notes to Consolidated Financial Statements appearing in FPL Group's 1993 Form 10-K. FPL GROUP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The accompanying condensed consolidated financial statements should be read in conjunction with FPL Group's 1993 Form 10-K, also see Note 1 to FPL Group's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1994 for a discussion of the changes in accounting for Employee Stock Ownership Plans. In the opinion of FPL Group, all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position as of June 30, 1994, the results of operations for the three and six months ended June 30, 1994 and 1993 and the cash flows for the six months ended June 30, 1994 and 1993 have been made. Certain amounts included in the prior year's condensed consolidated financial statements have been reclassified to conform to the current year's presentation. The results of operations for an interim period may not give a true indication of results for the year. 1. Capitalization Preferred Stock - The 1994 sinking fund requirements for the 6.84% Preferred Stock, Series Q, $100 Par Value were met by redeeming and retiring 30,000 shares in April 1994. There are no sinking fund requirements for the remainder of 1994. Long-Term Debt - In January 1994, FPL Group Capital Inc (FPL Group Capital) redeemed $150 million of its 8 7/8% Debentures using proceeds from an advance from FPL Group and internally generated funds. In March 1994, Florida Power & Light Company (FPL) sold a total of $86.35 million principal amount of Pollution Control Revenue Refunding Bonds, maturing in September 2024, at variable interest rates that initially ranged from 2.10% to 2.75%. The proceeds were used to redeem and retire in March and May 1994 a total of approximately $86.35 million principal amount of Pollution Control Revenue Bonds, maturing in 2007 through 2019, at interest rates ranging from 5.90% to 11 3/8%. In July 1994, FPL sold a total of $86.5 million principal amount of Pollution Control Revenue Refunding Bonds, maturing in July 2029, at variable interest rates that initially ranged from 2.00% to 3.20%. The proceeds will be used to redeem and retire in October 1994 a total of $86.5 million of Pollution Control Revenue Bonds, maturing in 2019 at an interest rate of 11%. At June 30, 1994, $200 million of commercial paper has been included in long-term debt pursuant to financing agreements which allow FPL to refinance these amounts for periods extending beyond June 30, 1995. 2. Commitments and Contingencies Commitments - FPL has made commitments in connection with a portion of its projected capital expenditures. Capital expenditures for the construction or acquisition of additional facilities and equipment to meet customer demand are estimated to be $3.7 billion, including allowance for funds used during construction (AFUDC), for the years 1994 through 1998. Capital expenditures for 1994 are estimated to be $879 million, of which $424 million had been spent through June 30, 1994. FPL Group Capital has committed to invest approximately $5 million in, and lend approximately $3 million to, partnerships and joint ventures entered into through ESI Energy, Inc. (ESI), all of which are expected to be funded in the remainder of 1994. Additionally, FPL Group Capital and its subsidiaries, primarily ESI, have guaranteed up to approximately $99 million of lease obligations, debt service payments and other payments subject to certain contingencies. FPL Group, through a consolidated limited partnership, has entered into forward commitments at June 30, 1994 to sell short approximately $30 million of U.S. Treasury Notes on various dates in July 1994 at specified prices. At June 30, 1994, the amounts committed approximated the market value of the related securities. Insurance - Liability for accidents at nuclear power plants is governed by the Price-Anderson Act, which limits the liability of nuclear reactor owners to the amount of the insurance available from private sources and under an industry retrospective payment plan. In accordance with this Act, FPL maintains $200 million of private liability insurance, which is the maximum obtainable, and participates in a secondary financial protection system under which it is subject to retrospective assessments of up to $317 million per incident at any nuclear utility reactor in the United States, payable at a rate not to exceed $40 million per incident per year. FPL participates in insurance pools and other arrangements that provide $2.75 billion of limited insurance coverage for property damage, decontamination and premature decommissioning risks at its nuclear plants. The proceeds from such insurance, however, must first be used for reactor stabilization and site decontamination before they can be used for plant repair. FPL also participates in an insurance program that provides limited coverage for replacement power costs if a plant is out of service because of an accident. In the event of an accident at one of FPL's or another participating insured's nuclear plants, FPL could be assessed up to $58 million in retrospective premiums, and in the event of a subsequent accident at such nuclear plants during the policy period, the maximum aggregate assessment is $72 million under the programs in effect at June 30, 1994. This contingent liability would be partially offset by a portion of FPL's storm and property insurance reserve (storm fund), which totaled $88 million at that date. In the event of a catastrophic loss at one of FPL's nuclear plants, the amount of insurance available may not be adequate to cover property damage and other expenses incurred. Uninsured losses, to the extent not recovered through rates, would be borne by FPL and could have a material adverse effect on FPL Group's and FPL's financial condition. In 1993, FPL replaced its transmission and distribution (T&D) property insurance coverage with a self-insurance program due to the high cost and limited coverage available from third-party insurers. Costs incurred under the self-insurance program will be charged against FPL's storm fund. Recovery of any losses in excess of the storm fund from ratepayers will require the approval of the Florida Public Service Commission (FPSC). FPL's available lines of credit include $300 million to provide additional liquidity in the event of a T&D property loss. Contracts - FPL has take-or-pay contracts with the Jacksonville Electric Authority (JEA) for 374 megawatts (mw) of power through 2022 and with subsidiaries of the Southern Company to purchase 1,007 mw of power through May 1995, and declining amounts thereafter through mid-2010. FPL also has various firm pay-for-performance contracts to purchase approximately 1,000 mw from certain cogenerators and small power producers (qualifying facilities) with expiration dates ranging from 2002 through 2026. These contracts provide for capacity and energy payments. Energy payments are based on the actual power taken under these contracts. Capacity payments for the pay-for-performance contracts are subject to the qualifying facilities meeting certain contract obligations. The required capacity payments through 1998 under these contracts are estimated to be as follows:
1994 1995 1996 1997 1998 (Millions of Dollars) JEA .................................................... $ 80 $ 80 $ 80 $ 80 $ 80 Southern Companies ..................................... 200 150 140 140 140 Qualifying Facilities .................................. 140 160 310 340 350
FPL's capacity and energy charges under these contracts were as follows:
Three Months Ended June 30, Six Months Ended June 30, 1994 Charges 1993 Charges 1994 Charges 1993 Charges Capacity Energy(1) Capacity Energy(1) Capacity Energy(1) Capacity Energy(1) (Millions of Dollars) JEA .................... $21(2) $12 $22(2) $13 $ 42(2) $22 $ 43(2) $ 26 Southern Companies ..... 52(3) 36 73(3) 60 108(3) 69 150(3) 116 Qualifying Facilities... 37(3) 16 15(3) 10 65(3) 31 29(3) 20 (1) Recovered through the fuel and purchased power cost recovery clause. (2) Recovered through base rates and the capacity cost recovery clause (capacity clause). (3) Recovered through the capacity clause.
FPL has take-or-pay contracts for the supply and transportation of natural gas under which it is required to make payments estimated to be $270 million for 1994, $430 million for 1995, $460 million for 1996, $480 million for 1997 and $500 million for 1998. Total payments made under these contracts for the three and six months ended June 30, 1994 were $69 million and $115 million, respectively. Total payments made under these contracts for the three and six months ended June 30, 1993 were $59 million and $135 million, respectively. Litigation - Union Carbide Corporation sued FPL and Florida Power Corporation alleging that, through a territorial agreement approved by the FPSC, they conspired to eliminate competition in violation of federal antitrust laws. Praxair, Inc., an entity that was formerly a unit of Union Carbide, has been substituted as the plaintiff. The suit seeks treble damages of an unspecified amount based on alleged higher prices paid for electricity and product sales lost. Cross motions for summary judgment were denied. Both parties are appealing the denials. A suit brought by the partners in a cogeneration project located in Dade County, Florida, alleges that FPL Group, FPL and ESI have engaged in anti-competitive conduct intended to eliminate competition from cogenerators generally, and from their facility in particular, in violation of federal antitrust laws and have wrongfully interfered with the cogeneration project's contractual relationship with Metropolitan Dade County. The suit seeks damages in excess of $100 million, before trebling under antitrust law, plus other unspecified compensatory and punitive damages. A motion for summary judgment by FPL Group, FPL and ESI has been denied. FPL Group, FPL and ESI are appealing the denial. FPL Group believes that it and its subsidiaries have meritorious defenses to the litigation described above and is vigorously defending these suits. Accordingly, the liabilities, if any, arising from this litigation are not anticipated to have a material adverse effect on FPL Group's financial statements. A former cable installation contractor for Telesat Cablevision, Inc. (Telesat) sued FPL Group, FPL Group Capital and Telesat for breach of contract, fraud, violation of racketeering statutes and several other claims. The trial court entered a judgment in favor of FPL Group and Telesat on nine of twelve counts, including all of the racketeering and fraud claims, and in favor of FPL Group Capital on all counts. However, the jury in the case awarded the contractor damages totaling approximately $6 million against FPL Group and Telesat for breach of contract and tortious interference. FPL Group believes that the jury award is without merit, and FPL Group and Telesat have filed a motion for the entry of a judgment in their favor as a matter of law. The contractor has filed a motion for a new trial. A ruling by the trial court on both motions is pending. The resulting liability, if any, is not anticipated to have a material adverse effect on FPL Group's financial statements. 3. Summarized Financial Information Summarized financial information of FPL Group Capital, a consolidated wholly-owned subsidiary whose debentures are guaranteed by FPL Group, is provided below:
Three Months Ended Six Months Ended June 30, June 30, 1994 1993 1994 1993 (Thousands of Dollars) Operating revenues ............................... $24,556 $28,247 $47,757 $57,202 Operating expenses ............................... 24,707 25,197 46,922 52,868 Income (loss) before extraordinary item .......... (1,760) 3,616 (1,799) 3,407 Net loss ......................................... (1,760) (1,756) (1,799) (1,965)
June 30, December 31, 1994 1993 (Thousands of Dollars) Current assets .............................................................. $ 104,364 $ 96,387 Noncurrent assets ........................................................... 1,046,987 1,169,552 Current liabilities ......................................................... 186,735 313,605 Noncurrent liabilities ...................................................... 633,918 619,818 /TABLE Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This discussion should be read in conjunction with the Notes to Condensed Consolidated Financial Statements contained herein and Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in FPL Group's 1993 Form 10-K. The results of operations for an interim period may not give a true indication of results for the year. In the following discussion, all comparisons are with the corresponding items in the prior year. RESULTS OF OPERATIONS For the three and six months ended June 30, 1994, net income was favorably affected by higher energy sales, resulting from increased energy usage per retail customer and customer growth, and the benefits of ongoing cost reduction measures. Partially offsetting these factors, was higher depreciation expense and lower AFUDC. Revenues from base rates, which represented 62% of total utility operating revenues for the three and six months ended June 30, 1994 and 59% and 60% for the respective periods in 1993, are derived primarily from retail operations regulated by the FPSC. Such revenues increased for the three and six months ended June 30, 1994 mainly due to an 11.9% and 10.0% increase in energy sales primarily due to increased usage per retail customer resulting from warmer weather, as well as an improved economy and customer growth of 2.3%. Revenues derived from cost recovery clause rates and franchise fees comprise substantially all of the remaining portion of operating revenues. These revenues represent a pass-through of costs and do not significantly affect net income. Excluding amounts recovered through cost recovery clauses, utility other operations and maintenance expenses increased slightly mainly due to costs associated with consolidation of facilities and inventory reductions, costs relating to additional generating units placed in service after the first quarter in 1993 and customer growth. Partially offsetting these items were cost savings from ongoing cost reduction efforts. Higher electric utility plant balances, reflecting facilities added to meet customer growth, and new depreciation rates implemented on an interim basis in January 1994 resulted in increased depreciation expense for the three and six months ended June 30, 1994. The FPSC's pending decision to approve or modify interim depreciation rates, which is scheduled to occur in September 1994, could affect 1994 depreciation expense since any changes would be retroactive to January 1994. AFUDC decreased for the three and six months ended June 30, 1994 as a result of the placement in service of the repowered Lauderdale units in the second quarter of 1993 and Martin Unit Nos. 3 and 4 in the first and second quarter of 1994, respectively. Interest and preferred stock dividend requirements declined for the three and six months ended June 30, 1994 due to the refunding of higher cost debt and preferred stock during 1993 with lower rate instruments. Income taxes increased for the three and six months ended June 30, 1994 due to higher income, the increase in the federal income tax rate and an adjustment to prior year taxes in the first quarter of 1994. In the first quarter of 1994, FPL Group adopted AICPA Statement of Position (SOP) 93-6, "Employers' Accounting for Employee Stock Ownership Plans." Under the new accounting rules, the 10.5 million unallocated shares currently held by the Trust for the Employee Thrift Plans of FPL Group and FPL are no longer considered outstanding for earnings per share purposes. These shares will be included as outstanding when allocated to employee accounts over the next 15 years. The effect of adopting SOP 93-6, primarily reflected in Other - net, was to reduce net income for the three and six months ended June 30, 1994 by approximately $5 million and $11 million, respectively. FINANCIAL CONDITION On May 9, 1994, the board of directors of FPL Group announced a change in financial strategy. The key elements of the new strategy include a revised dividend payout ratio and a common stock repurchase program. The targeted dividend payout ratio will be 60-65% of prior year's earnings, equating to a current quarterly common stock dividend of 42 cents per share ($1.68 annually), a 32% reduction from the previous quarterly dividend of 62 cents per share. The FPL Group board of directors authorized the repurchase of 10 million shares of common stock over the next three years. An effort is being made to repurchase a total of four million shares by year-end. Through June 1994, 2.2 million shares have been repurchased. For information concerning commitments, see Note 2. For a discussion of changes in capitalization, see Note 1. PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders (a) The Annual Meeting of FPL Group's shareholders was held on May 9, 1994. Of the 190,065,570 shares of common stock outstanding on the record date of February 28, 1994, a total of 162,102,533 shares were represented in person or by proxy. (b) The following directors were elected effective May 9, 1994:
Votes Cast Against or For Withheld H. Jesse Arnelle ......................................................... 158,062,850 4,039,683 Robert M. Beall, II ...................................................... 158,318,498 3,784,035 David Blumberg ........................................................... 157,756,816 4,345,717 James L. Broadhead ....................................................... 155,636,956 6,465,577 J. Hyatt Brown ........................................................... 158,172,651 3,929,882 Marshall M. Criser ....................................................... 158,217,453 3,885,080 Jean McArthur Davis ...................................................... 157,968,817 4,133,716 B. F. Dolan .............................................................. 158,297,059 3,805,474 Willard D. Dover ......................................................... 158,327,908 3,774,625 Alfonso Fanjul ........................................................... 156,788,980 5,313,553 Stephen E. Frank ......................................................... 156,954,906 5,147,627 Drew Lewis ............................................................... 158,188,967 3,913,566 Frederic V. Malek ........................................................ 158,063,914 4,038,619 Paul R. Tregurtha ........................................................ 158,054,430 4,048,103
(c)(i) The vote to ratify the appointment of Deloitte & Touche as independent auditors for 1994 was 158,214,236 for, 2,561,628 against and 1,326,669 abstaining. (ii) A vote on approval of the Annual Incentive Plan was 143,681,948 for, 15,489,582 against and 2,931,003 abstaining. (iii) A vote on approval of the Long Term Incentive Plan was 137,683,010 for, 21,213,057 against and 3,206,466 abstaining. (iv) The vote on a shareholder proposal requesting that FPL Group adopt cumulative voting for the election of directors was 34,558,739 for, 96,744,608 against, 3,408,327 abstaining and 27,390,858 broker non-votes. (v) The vote on a shareholder proposal requesting that FPL Group adopt the Coalition for Environmentally Responsible Economies' Principles for corporate environmental accountability was 18,316,867 for, 108,863,023 against, 7,531,784 abstaining and 27,390,858 broker non-votes. Item 5. Other Information (1) Reference is made to Item 1. Business - Utility Operations - System Capability and Load in FPL Group's 1993 Form 10-K. In June 1994, under a 1991 agreement with Georgia Power Company, FPL purchased an additional 17% (140 mw) ownership interest in Scherer Unit No. 4 for approximately $129 million. (2) Reference is made to Item 1. Business - Utility Operations - Fuel in FPL Group's 1993 Form 10-K. In May 1994, FPL combined and restructured both of its existing take-or-pay natural gas supply contracts with affiliates of Florida Gas Transmission Company, the main interstate pipeline in Florida. The new contract, which expires in 2009, will provide a firm supply of natural gas under competitive pricing terms to meet FPL's future gas requirements. (3) Reference is made to Item 1. Business - Utility Operations - Competition in FPL Group's 1993 Form 10-K. In May 1994, the Federal Energy Regulatory Commission (FERC) ruled that FPL can recover its full cost of providing network transmission service to the Florida Municipal Power Agency (FMPA). The FMPA is seeking clarification of certain aspects of the FERC's ruling. In July 1994, hearings regarding FPL's comprehensive proposal to revise its wholesale services, rates and tariffs were deferred and are now scheduled to begin in January 1995. The hearings were deferred to permit testimony addressing a new comparability standard announced by the FERC which states that new open access transmission tariffs should provide third parties with access on the same basis as is available to the owner of the transmission system. A final decision by the FERC is expected in 1996. (4) Effective August 1994, FPL Group has guaranteed the payment of $275 million aggregate principal amount of FPL Group Capital's outstanding debentures (which are entitled to the benefit of a support agreement, dated December 18, 1985, between FPL Group and FPL Group Capital). These debentures are included in long-term debt. As long as the guarantee is in place, FPL Group Capital's reporting obligations under the Securities Exchange Act of 1934, as amended, will be suspended pursuant to the rules and regulations of the Securities and Exchange Commission. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Number Description *4(a) Restated Articles of Incorporation of FPL Group dated December 31, 1984, as amended through December 17, 1990 (filed as Exhibit 4(a) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *4(b) Bylaws of FPL Group, as amended November 15, 1993 (filed as Exhibit 3(ii) to Form 10-K for the year ended December 31, 1993) *4(c) Rights Agreement dated as of June 16, 1986 between FPL Group, Inc. and the First National Bank of Boston (filed as Exhibit 4(e) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *4(d) Mortgage and Deed of Trust dated as of January 1, 1944, and Ninety-five Supplements thereto between FPL and Bankers Trust Company and The Florida National Bank of Jacksonville (now First Union National Bank of Florida) Trustees (as of September 2, 1992, the sole trustee is Bankers Trust Company) (filed as Exhibit B-3, File No. 2-4845; Exhibit 7(a), File No. 2-7126; Exhibit 7(a), File No. 2-7523; Exhibit 7(a), File No. 2-7990; Exhibit 7(a), File No. 2-9217; Exhibit 4(a)-5, File No. 2-10093; Exhibit 4(c), File No. 2-11491; Exhibit 4(b)-1, File No. 2-12900; Exhibit 4(b)-1, File No. 2-13255; Exhibit 4(b)-1, File No. 2-13705; Exhibit 4(b)-1, File No. 2-13925; Exhibit 4(b)-1, File No. 2-15088; Exhibit 4(b)-1, File No. 2-15677; Exhibit 4(b)-1, File No. 2-20501; Exhibit 4(b)-1, File No. 2-22104; Exhibit 2(c), File No. 2-23142; Exhibit 2(c), File No. 2-24195; Exhibit 4(b)-1, File No. 2-25677; Exhibit 2(c), File No. 2-27612; Exhibit 2(c), File No. 2-29001; Exhibit 2(c), File No. 2-30542; Exhibit 2(c), File No. 2-33038; Exhibit 2(c), File No. 2-37679; Exhibit 2(c), File No. 2-39006; Exhibit 2(c), File No. 2-41312; Exhibit 2(c), File No. 2-44234; Exhibit 2(c), File No. 2-46502; Exhibit 2(c), File No. 2-48679; Exhibit 2(c), File No. 2-49726; Exhibit 2(c), File No. 2-50712; Exhibit 2(c), File No. 2-52826; Exhibit 2(c), File No. 2-53272; Exhibit 2(c), File No. 2-54242; Exhibit 2(c), File No. 2-56228; Exhibits 2(c) and 2(d), File No. 2-60413; Exhibits 2(c) and 2(d), File No. 2-65701; Exhibit 2(c), File No. 2-66524; Exhibit 2(c), File No. 2-67239; Exhibit 4(c), File No. 2-69716; Exhibit 4(c), File No. 2-70767; Exhibit 4(b), File No. 2-71542; Exhibit 4(b), File No. 2-73799; Exhibits 4(c), 4(d) and 4(e), File No. 2-75762; Exhibit 4(c), File No. 2-77629; Exhibit 4(c), File No. 2-79557; Exhibit 99(a) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669; Exhibit 99(a) to Post-Effective Amendment No. 1 to Form S-3, File No. 33-46076; Exhibit 4(b) to Form 10-K for the year ended December 31, 1993, File No. 1-3545; and Exhibit 4(i) to Form 10-Q for the quarter ended June 30, 1994, File No. 1-3545) *10(a) Supplemental Executive Retirement Plan, as amended and restated (filed as Exhibit 99(b) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(b) Benefit Restoration Plan of FPL Group and affiliates, as amended and restated (filed as Exhibit 99(c) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(c) FPL Group Amended and Restated Supplemental Executive Retirement Plan for J. L. Broadhead (filed as Exhibit 99(d) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(d) Employment Agreement between FPL Group and D. P. Coyle dated June 12, 1989 (filed as Exhibit 99(e) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(e) Employment Agreement between FPL and Stephen E. Frank dated July 31, 1990 (filed as Exhibit 99(f) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(f) Employment Agreement between FPL and Jerome H. Goldberg dated August 9, 1989 (filed as Exhibit 99(g) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(g) FPL Group Long-Term Incentive Plan of 1985, as amended (filed as Exhibit 99(h) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(h) Director and Executive Compensation Deferral Plan of FPL, as amended (filed as Exhibit 99(i) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(i) Employment Agreement between FPL Group and James L. Broadhead dated February 13, 1989 (filed as Exhibit 99(j) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(j) Employment Agreement between FPL Group and James L. Broadhead dated as of December 13, 1993 (filed as Exhibit 10(j) to Form 10-K for the year ended December 31, 1993) *10(k) Annual Incentive Plan dated as of March 31, 1994 (filed as Exhibit 10(k) to Form 10-Q for the quarter ended March 31, 1994) *10(l) Long-Term Incentive Plan dated as of February 14, 1994 (filed as Exhibit 10(l) to Form 10-Q for the quarter ended March 31, 1994) 10(m) Employment Agreement between FPL and Jerome H. Goldberg dated July 25, 1994 * Incorporated herein by reference (b) Reports on Form 8-K None The registrant agrees to furnish a copy of the guarantee referred to in Part II - Other Information, Item 5(4) to the Securities and Exchange Commission upon request. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FPL GROUP, INC. (Registrant) Date: August 15, 1994 PAUL J. EVANSON Paul J. Evanson Vice President, Finance and Chief Financial Officer (Principal Financial Officer) EX-10.(F) 2 EMPLOYMENT AGREEMENT BETWEEN FLORIDA POWER & LIGHT COMPANY AND JEROME H. GOLDBERG EXHIBIT 10(f) EMPLOYMENT AGREEMENT This Agreement (this "Agreement") made as of the 25th day of July, 1994, between FLORIDA POWER & LIGHT COMPANY, a Florida corporation (the "Company"), and JEROME H. GOLDBERG (the "Executive"). WHEREAS, pursuant to the terms of that certain Employment Agreement dated as of August 9, 1989 between the Company and the Executive (the "Old Agreement"), the Executive has served as the senior officer responsible for the operation of the Company's Nuclear Generating Facilities (the "Facilities"); and WHEREAS, the Company desires to retain the Executive's services in such capacity beyond the expiration of the Old Agreement on September 18, 1994; and WHEREAS, the Executive is willing to continue serving the Company on the terms herein provided. NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties herein contained, the parties hereto agree as follows: 1. EMPLOYMENT (a) The Company hereby agrees to continue the employment of the Executive, and the Executive hereby agrees to continue his service to the Company on the terms and conditions set forth herein. (b) The term of the Executive's continued employment by the Company hereunder shall be for the period commencing on September 19, 1994, and continuing until March 1, 1996 (the "Term") unless sooner terminated as provided in Section 7. 2. POSITION AND DUTIES The Executive shall serve as President of the Nuclear Division of the Company and shall, subject to the authority and direction of the Chief Executive Officer of the Company, have general supervision over, and responsibility for, the management, operation, organization, staffing, maintenance and regulation of the Facilities and shall have such other powers, duties and responsibilities related to the Facilities as may from time to time be prescribed by the Chief Executive Officer of the Company; provided that such other duties and responsibilities are consistent with the Executive's status and position. The Executive shall perform and discharge, faithfully, diligently and to the best of his ability, such duties and responsibilities. The Executive shall devote substantially all his working time and efforts to his duties hereunder; provided, however, that the Executive shall have the right to provide consulting services to other entities during his permitted vacation time as long as the Executive's performance of such services would not violate the provisions of Section 11 of this Agreement and would not otherwise result in a conflict of interest with the Company. 3. PLACE OF PERFORMANCE In connection with his employment by the Company, the Executive shall be initially based at the Company's office located at 700 Universe Boulevard, Juno Beach, Florida 33408. 4. COMPENSATION (a) Salary. During the Term, the Executive shall receive an annual salary of $462,500 ("Salary"), payable in bi-weekly installments. Salary shall be adjusted from time to time by the Board in keeping with the Company's normal practices but in any event may not be reduced to less than $462,500. Any increase in Salary or other compensation shall not, without the consent of the Executive, limit or reduce any other obligation of the Company hereunder. (b) Deferred Incentive. Pursuant to Section 9(b) of the Old Agreement, the Executive shall receive a lump-sum payment from the Company in the amount of $466,600 on September 19, 1994, representing full payment by the Company of all Deferred Incentive Awards (as defined in the Old Agreement), including interest thereon, due and owing to the Executive through the date of expiration of the Old Agreement. (c) Annual Incentive Compensation. In addition to Salary, during the Term the Executive shall be eligible to receive annual incentive compensation awards ("Annual Incentive Awards"). The parties agree that the target amount for such Annual Incentive Awards, if earned, shall be thirty-five percent of the Executive's Salary. The parties shall determine mutually acceptable Performance Targets reasonably related to the Executive's duties hereunder for purposes of determining Annual Incentive Awards for each calendar year during the Term. The Executive shall receive full payment of any such Annual Incentive Award promptly after the approval thereof under the Company's Annual Incentive Plan in effect for such year. (d) Long Term Incentive Compensation. In addition to Salary and Annual Incentive Compensation, the Executive shall be eligible to receive performance awards under the FPL Group, Inc. Long Term Incentive Plan-1994 (the "Long Term Plan"). The parties agree that the target amount, if earned, shall be sixty percent of the Executive's Salary, payable in accordance with the terms of the Long Term Plan. (e) Other Awards. In addition to Salary, Annual Incentive Compensation and Long Term Incentive Compensation, the Executive shall be entitled to receive such additional payments as the Board or a duly authorized committee thereof may determine pursuant to other incentive plans (the "Plans") as established from time to time by the Company, its subsidiaries or affiliates; provided, however, that nothing herein shall obligate the Company to include the Executive as an eligible participant in any of the Plans. The amount of any additional compensation payable to the Executive pursuant to this paragraph will be paid to the Executive in accordance with the terms of the Plans. (f) Prorations. Payment of Annual and Long Term Incentive Compensation Awards made to the Executive before or during the Term shall be prorated in amount (whether cash or securities) by multiplying the amount of the award by a fraction, the numerator of which is the number of full months the Executive serves during the award period (including the Executive's service under the Old Agreement) through the end of the Term on March 1, 1996, and the denominator of which is the total number of months in the award period. As a result, the Executive would be entitled to receive one-sixth of an annual award for two months of service and one-twenty-fourth of a four-year award for two months of service. (g) Expenses. During the Term, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by him (in accordance with the policies and procedures established from time to time by the Company for senior executive officers) in performing services hereunder, provided that the Executive properly accounts therefor in accordance with the Company's policy. (h) Fringe Benefits. During the Term, the Executive shall be entitled to participate in or receive benefits under the Company's employee benefit and welfare plans and arrangements set forth in Exhibit A attached hereto to the extent he shall be eligible pursuant to the terms of such plans and as in effect from time to time. The Executive shall be entitled to participate in or receive benefits under any benefit, welfare, retirement, life insurance, health, disability or accident plan or arrangement made available by the Company in the future to its executives and key management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements. Nothing paid to the Executive under any Company plan or arrangement presently in effect or made available by the Company in the future shall be deemed to be in lieu of compensation of the Executive hereunder. (i) Vacations. During the Term, the Executive shall be entitled to six weeks paid vacation during the period between September 19, 1994 and September 18, 1995 and three weeks paid vacation during the period between September 19, 1995 and the end of the Term, together with any accrued and unused vacation to which the Executive was otherwise entitled under the Old Agreement. (j) Perquisites. During the Term, the Executive shall be entitled to the use of an automobile pursuant to the Company's Executive Lease Car Program, country club membership and other perquisites generally available to executive officers of the Company. 5. OFFICES The Executive agrees to serve without additional compensation, if elected or appointed thereto, in one or more offices or as a director of any of the Company's subsidiaries. 6. UNAUTHORIZED DISCLOSURE: INVENTIONS (a) Unauthorized Disclosure. The Executive shall not, without the written consent of the Board or a person duly authorized thereby, disclose to any person, other than an employee or professional adviser of the Company or other person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Executive of his duties as an executive officer of the Company, any material information known by him to be confidential and obtained by him while employed by the Company or while in the employ of the Company with respect to any products, improvements, formulas, designs or styles, processes, customers, methods of distribution or methods of manufacture of the Company or any of its subsidiaries or affiliates the disclosure of which he knows or should know will be damaging to the Company or any of its subsidiaries or affiliates; provided, however, that confidential information shall not include any information known generally to the public (other than as a result of unauthorized disclosure by the Executive) or any information not otherwise considered by the Board to be confidential. The Executive shall not disclose any confidential information of the type described above except as may be required by law in connection with any judicial or administrative proceeding or inquiry. (b) Inventions. Any and all inventions made, developed or created by the Executive (whether at the request or suggestion of the Company or otherwise, whether alone or in conjunction with others, and whether during regular hours of work or otherwise) during the period of his employment by the Company, which may be directly or indirectly useful in, or relate to, the business of the Company or any of its subsidiaries or affiliates, shall be promptly and fully disclosed by the Executive to an appropriate executive officer of the Company and shall be the Company's exclusive property as against the Executive, and the Executive shall promptly deliver to an appropriate executive officer of the Company all papers, drawings, models, data and other material relating to any invention made, developed or created by him as aforesaid. The Executive shall, upon the Company's request and without any payment therefor, execute any documents necessary or advisable in the opinion of the Company's counsel to direct issuance of patents or copyrights to the Company with respect to such inventions as are to be the Company's exclusive property as against the Executive under this subsection (b) or to vest in the Company title to such inventions as against the Executive, the expense of securing any such patent or copyright, however, to be borne by the Company. 7. TERMINATION (a) Death. The Executive's employment hereunder shall terminate upon his death. (b) Cause. The Company may terminate the Executive's employment hereunder for Cause. For purposes of this Agreement, the Company shall have "Cause" to terminate the Executive's employment hereunder upon the Executive's (A) bad faith material failure to perform and discharge his duties and responsibilities hereunder (it being understood that the Executive's failure to perform and discharge his duties and responsibilities hereunder as a result of his incapacity due to physical or mental illness shall not be deemed a failure specified by this clause (A)), or (B) conviction of a felony which, due to its nature or notoriety, reflects adversely upon the Company or any of its subsidiaries (unless such conviction is reversed in any final appeal thereof) or (C) testing positive for the use of controlled substances as described in Title 10, Code of Federal Regulations. The Executive shall be deemed to have been terminated for Cause upon the adoption of a resolution of the Board, finding that in the good faith opinion of the Board, the Executive was guilty of conduct set forth above in clause (A), (B), or (C) above, and specifying the particulars thereof; and delivery of a Notice of Termination in the form specified in paragraph (d) below. (c) Termination by the Executive for Incapacity. The Company may terminate the Executive's employment hereunder by delivery of Notice of Termination if, as a result of the Executive's incapacity due to physical or mental illness, the Executive shall have been absent from his duties hereunder on a full-time basis for four consecutive months or 120 days in a 6-month period, and within 10 days after the Company notifies the Executive in writing that it intends to terminate him, the Executive shall not have returned to the performance of his duties hereunder on a full-time basis ("Incapacity"). (d) Notice of Termination. For purposes of this Agreement, a "Notice of Termination" shall mean a written notice of termination of this Agreement which, in the case of a termination pursuant to paragraph (b) or (c) above, shall indicate the specific termination provision in this Agreement relied upon and set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and the actual effective Termination Date. (e) Termination Date. "Termination Date" shall mean, if the Executive's employment is terminated (A) by his death, the date of his death, or (B) pursuant to subsection (b) or (c) above, the date specified in the Notice of Termination. 8. COMPENSATION UPON TERMINATION (a) Upon Death. If the Executive's employment hereunder shall be terminated during the Term by reason of his death, the Company shall pay to Margaret A. Goldberg as Co-Trustee of the Jerome H. Goldberg Trust under Declaration dated January 17, 1994 (referred to herein as the "Beneficiary"), in 12 substantially equal monthly installments commencing on the last day of the next month following the Termination Date the full amount of his Salary at the Termination Date, and, thereafter, the Company shall pay to the Beneficiary 450 percent of such Salary in 108 substantially equal monthly payments. (b) Incapacity. In the event of termination for Incapacity, the Executive shall apply to the Social Security Administration for a total and permanent disability award. During the pendency of such application, the Company shall pay to Jerome H. Goldberg and Margaret A. Goldberg as Co-Trustees of the Jerome H. Goldberg Trust under Declaration dated January 17, 1994 (referred to herein as the "Co-Trustees") the Executive's monthly Salary as in effect at the Termination Date until a determination has been made with respect to such application, up to a maximum of five months. Upon the approval of such application or, if no determination shall have been made at the completion of such five-month period, the Co-Trustees shall receive all benefits payable or available to the Executive (including, without limitation, the continued accrual of years of employment for purposes of Company pension plan benefits) ("Disability Benefits") pursuant to the Long Term Disability Plan for Employees of Florida Power and Light Company as then in effect (the "LTD Plan") until March 1, 1996, provided, however, that in the event that after the expiration of such five-month period, the Executive's application is denied, the Disability Benefits shall terminate unless an independent medical review pursuant to the LTD Plan determines that the Executive is totally and permanently disabled, it being understood that Disability Benefits shall continue during the pendency of such independent review. It is further understood that, notwithstanding the Executive's termination for Incapacity, the Executive shall be entitled to receive at the end of the Term the Normal Retirement Benefit described in Section 9(a), the amount, timing, duration and payment of which shall be determined in accordance with the terms of Section 9(a). (c) Death or Incapacity. In addition, in the event of termination for Incapacity, the Co-Trustees, or in the case of death, the Beneficiary, shall receive any other payments which the Executive or the Beneficiary may be entitled to receive hereunder or pursuant to any employee benefit plan or life insurance policy maintained by the Company at the Termination Date. (d) With Cause. If the Company shall terminate the Executive's employment hereunder for Cause pursuant to Section 7(b), the Company shall pay to the Co-Trustees on behalf of the Executive all benefits and payments accrued and owing at the Termination Date (specifically including the Normal Retirement Benefit described in Section 9(a), the amount of which shall be calculated as of the Termination Date instead of the end of the Term and the payment of which shall be made monthly commencing on the first day of the first month following the month in which the Termination Date occurs) and the Company shall have no further obligation to the Executive under this Agreement. 9. BENEFITS UPON EXPIRATION OF TERM. (a) Retirement Benefit. At the end of the Term on March 1, 1996, unless the Executive's employment by the Company is continued on terms acceptable to both parties or the Agreement has been previously terminated pursuant to Sections 7(a) or 7(b), the Co-Trustees on behalf of the Executive shall be entitled to be paid by the Company retirement benefits, which together with any amounts received by the Executive pursuant to Houston's Deferred Compensation Plan (as described in Houston's Proxy Statement in respect of its 1986 Annual Meeting of Shareholders) and Retirement Plan (as described in the Houston's Proxy Statement in respect of its 1989 Annual Meeting of Shareholders) shall equal the total post employment benefits the Executive would have received had he remained employed by Houston until age 65 (such benefits being referred to herein as his "Normal Retirement Benefit"). The Company's obligation to pay the Normal Retirement Benefit shall as to timing, duration and payment schedule be on the same basis as had the Executive remained employed by Houston until age 65. The Retirement Benefit will commence on the first day of the first month following the month in which the Term ends. Attached hereto as Exhibit B is the Company's calculation of the projected amount of the Normal Retirement Benefit. The Executive shall be further entitled to participate in or receive benefits under the Company's post retirement life insurance and health insurance plans for retired employees in effect at the date of execution of this Agreement to the extent he shall be eligible pursuant to the terms of such plans. (b) Post Retirement Death Benefit. If the Executive retires from the Company, then upon the Executive's subsequent death, the Company shall pay to the Beneficiary in 72 substantially equal monthly installments an aggregate amount equal to 300 percent of the Executive's Salary at the date of retirement. 10. SUCCESSORS; BINDING AGREEMENT (a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance reasonably satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "the Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (b) The Executive may not delegate any duties and responsibilities imposed nor, except as provided in Section 9(a) and subsection (c) below, assign any rights and benefits created by this Agreement. (c) This Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. Unless otherwise provided herein, if the Executive should die, any amounts which are due and owing at the time of his death, or which become payable thereafter under this Agreement, shall be paid in accordance with the terms of this Agreement to the Executive's devisee, legatee or other designee or, if there be no such designee, to the Executive's estate. 11. NON-COMPETITION The Executive agrees that, during the term of his employment hereunder and for a period of twenty-four (24) months following the Date of Termination, he will not, directly or indirectly, own, manage, operate, control or participate in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director or otherwise with, or have any financial interest in, or aid or assist anyone else in the conduct of, any entity or business (a "Competitive Operation") which competes with any business conducted by the Company or by any affiliated entity, group, division or subsidiary of the Company, in any area where such business is being conducted at the Date of Termination. It is understood and agreed that, for the purposes of the foregoing provisions of this Section, (i) no business shall be deemed to be a business conducted by the Company or any group, division or subsidiary of the Company, unless five percent (5%) or more of the Company's consolidated gross sales or operating revenues is derived from, or five percent (5%) or more of the Company's consolidated assets are devoted to, such business; (ii) no business conducted by any entity by which the Executive is employed or in which he is interested or with which he is connected or associated shall be deemed competitive with any business conducted by the Company or any group, division or subsidiary of the Company unless it is one from which two percent (2%) or more of its consolidated gross sales or operating revenues is derived, or to which two percent (2%) or more of its consolidated assets are devoted; and (iii) no business which is conducted by the Company at the Date of Termination and which subsequently is sold by the Company shall, after such sale, be deemed to be a Competitive Operation within the meaning of this Section. Ownership of not to exceed five percent (5%) of the voting stock of any publicly held corporation shall not constitute a violation of this Section. 12. NOTICE For the purpose of this Agreement, notices and all other communications to either party hereunder provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed, in the case of the Company, to Florida Power & Light Company, 700 Universe Boulevard, Juno Beach, Florida 33408, Attention: Dennis P. Coyle, General Counsel, or, in the case of the Executive, to the Executive at 122 Spyglass Lane, Jupiter, Florida 33477, or to such other address as either party shall designate by giving written notice of such change to the other party. 13. MISCELLANEOUS No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is approved by the Board (excluding the Executive) and agreed to in writing signed by the Executive and such officer as may be specifically authorized by the Board. No waiver by either party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Florida without regard to the conflicts of laws principles thereof. 14. VALIDITY The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 15. SURVIVAL The provisions of this Agreement shall not survive the termination of this Agreement or of the Executive's employment hereunder, except that the provisions of Sections 6, 8, 9, 10, 11 and 12 shall survive such termination and shall be binding upon the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 16. COUNTERPARTS This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 17. SOLE AGREEMENT Effective September 19, 1994 this Agreement shall constitute the sole agreement between the Company and the Executive as to the matters contemplated hereby and shall supersede any and all previously existing employment or consulting agreements (specifically including the Old Agreement) between the Executive and the Company or any of its subsidiaries or affiliates, all such agreements shall be void and shall have no force or effect whatsoever, and all rights, claims, duties and obligations under, pursuant to or in connection with any or all such agreements shall be deemed to have been waived by the Executive and in all respects cease and be extinguished forever. IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written. FLORIDA POWER & LIGHT COMPANY By: L. KELLEHER Its: Senior Vice President JEROME H. GOLDBERG JEROME H. GOLDBERG Executive 7/25/94 EXHIBIT A FPL EMPLOYEE BENEFIT PLANS (in effect 7/25/94): - - Medical Plan and Retired Medical Plan for Employees of Florida Power & Light Company - - Life Insurance Plan and Retired Life Plan for Employees of Florida Power & Light Company - - Long Term Disability Plan for Employees of Florida Power & Light Company - - Dental for Employees of Florida Power & Light Company - - Employee Thrift & Retirement Savings Plan for Employees of Florida Power & Light Company - - Pension Plan for Employees of Florida Power & Light Company - - FPL Flex Plan for Employees of Florida Power & Light Company FPL EXECUTIVE BENEFITS (in effect 7/25/94): - - Executive Medical Plan - - Executive 24-Hour Accident Insurance - - Personal Excess Liability Coverage - - Executive Car Program - - Executive Physical Program - - Financial and Legal Planning - - Luncheon and Club Membership Program EXHIBIT B J. H. GOLDBERG - RETIREMENT DATE: 03/01/96
FPL FPL DEFERRED YEAR AGE PENSION(1) SERP(2) COMP. TOTAL 1994 63 - - $466,600(3) $ 466,600 1995 64 - - - - 1996 65 $ 41,344 $ 394,492 - $ 435,836 1997 66 $ 55,125 $ 486,242 - $ 541,367 1998 67 $ 55,125 $ 486,242 - $ 541,367 1999 68 $ 55,125 $ 486,242 - $ 541,367 2000 69 $ 55,125 $ 486,242 - $ 541,367 2001 70 $ 55,125 $ 486,242 - $ 541,367 2002 71 $ 55,125 $ 486,242 - $ 541,367 2003 72 $ 55,125 $ 486,242 - $ 541,367 2004 73 $ 55,125 $ 486,242 - $ 541,367 2005 74 $ 55,125 $ 486,242 - $ 541,367 2006 75 $ 55,125 $ 486,242 - $ 541,367 2007 76 $ 55,125 $ 486,242 - $ 541,367 2008 77 $ 55,125 $ 486,242 - $ 541,367 2009 78 $ 55,125 $ 486,242 - $ 541,367 2010 79 $ 55,125 $ 486,242 - $ 541,367 2011 80 $ 55,125 $ 231,776 - $ 286,901 2012 81 $ 55,125 $ 140,026 - $ 195,151 2013 82 $ 55,125 $ 140,026 - $ 195,151 TOTAL $978,469 $7,713,708 $466,600 $9,158,777 (1) Estimated amount based on straight life annuity. Actual pension and duration will depend on future salary increases and pension option selected. Pension benefit continues until the death of the employee and, if survivor benefit elected, the death of the spouse. (2) Per employment agreement. (3) (Based on a September 19, 1994 Payout - Actual amount may change based on interest crediting rates.)
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