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SECTION 5 - Corporate Governance and Management |
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
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(e)
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The following actions were taken on December 12, 2008:
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A) The Compensation Committee of the Board of Directors of FPL Group, Inc. ("FPL Group" or the "Company") recommended, and the Company's Board of Directors approved, an amendment to the Company's Executive Annual Incentive Plan (the "Executive Annual Incentive Plan"). Pursuant to the amendment, at the discretion of the Committee (as defined in the Executive Annual Incentive Plan), awards under the Executive Annual Incentive Plan may be paid, in whole or in part, in cash and/or in shares of the Company's common stock, par value $.01 per share ("Common Stock"), provided that any shares of Common Stock must be issued in accordance with, and subject to the terms and conditions of, the LTIP (as hereinafter defined) or any successor plan. Prior to the amendment, awards under the Executive Annual Incentive Plan were payable solely in cash.
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The foregoing description of the amendment to the Executive Annual Incentive Plan is qualified in its entirety by reference to the full text of the FPL Group, Inc. Executive Annual Incentive Plan, as amended and restated, a copy of which is attached to this Current Report as Exhibit 10(a) and incorporated by reference in this Item 5.02(e).
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B) The Compensation Committee recommended, and the Company's Board of Directors approved, amendments to some of the Company's compensation and benefits plans and to some of its agreements with executive officers and employees, primarily to reflect changes necessary to comply with Section 409A of the Internal Revenue Code ("Section 409A"). Section 409A is the tax law enacted in 2004 governing "nonqualified" deferred compensation arrangements that imposes additional tax and penalties on service providers (including employees and directors) if a covered arrangement does not comply with Section 409A. The Section 409A actions taken on December 12, 2008, which primarily affect the timing, but not the amount, of compensation that may be received, the timing of deferral distribution elections and the definition of some payment triggers, included the following:
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1.
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Freezing and grandfathering the benefits under the FPL Group, Inc. Supplemental Executive Retirement Plan as of December 31, 2004 and adopting an amended and restated FPL Group, Inc. Supplemental Executive Retirement Plan effective January 1, 2005;
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2.
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Adopting an Amended and Restated Supplement to the FPL Group, Inc. Supplemental Executive Retirement Plan as it applies to Lewis Hay, III, the Company's Chairman and Chief Executive Officer;
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3.
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Adopting the FPL Group, Inc. Deferred Compensation Plan effective January 1, 2005, as a successor to the FPL Group, Inc. Deferred Compensation Plan effective as of January 1, 1995, as amended and restated effective January 1, 2003 (the benefits under which were frozen and grandfathered);
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4.
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Adopting the FPL Group, Inc. Amended and Restated Long Term Incentive Plan effective December 12, 2008 ("LTIP");
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5.
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Approving an Amended and Restated Employment Agreement with Lewis Hay, III (the " Employment Agreement"); and
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6.
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Approving an Amended and Restated Executive Retention Employment Agreement ("EREA") with each of Lewis Hay, III, James L. Robo, Armando Pimentel, Jr., Armando J. Olivera, John A. Stall and each of the Company's other executive officers.
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The EREAs include an additional amendment that provides for payment cutbacks under some circumstances where the payments otherwise due would result in excise tax payments under Section 280G of the Internal Revenue Code, and the EREAs and the Employment Agreement include additional amendments that specify the treatment of unused vacation days and the post-employment availability of certain health benefits on an employee-paid premium basis.
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The foregoing description is qualified in its entirety by reference to the full texts of the described plans and agreements, copies of which are attached to this Current Report as Exhibits 10(b) through 10(g) and incorporated by reference in this Item 5.02(e).
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