Filed
pursuant to Rule 424(b)(2)
Registration
Statement Nos. 333-102173, 333-102173-01,
333-102173-02
and 333-102173-03
and
Registration
Statement
Nos. 333-116209,
333-116209-01, 333-116209-02, 333-116209-03,
333-116209-04 and
333-116209-05
PROSPECTUS
SUPPLEMENT
(To
prospectus dated August 19, 2004)
$600,000,000
5
5/8%
Debentures,
Series due September 1, 2011
The
Debentures will be Absolutely, Irrevocably and
Unconditionally
Guaranteed by
FPL
GROUP, INC.
_________________
FPL
Group
Capital Inc will pay interest, in cash, on the securities on March 1 and
September 1 of each year, beginning March 1, 2007. FPL Group Capital may
redeem
some or all of the securities at any time before their maturity date upon
at
least 30 but not more than 60 days notice, at the redemption price discussed
under “Certain Terms of the Debentures—Optional Redemption” beginning on page
S-10 of this prospectus supplement.
FPL
Group
Capital’s corporate parent, FPL Group, Inc., has agreed to absolutely,
irrevocably and unconditionally guarantee the payment of principal, interest
and
premium, if any, on the securities. The securities are unsecured and
unsubordinated and rank equally with FPL Group Capital’s other unsecured and
unsubordinated indebtedness from time to time outstanding. FPL Group Capital
does not plan to list the securities on any securities exchange.
See
“Risk Factors” beginning on page S-3 to read about certain factors you should
consider before making an investment in the securities.
_____________________
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of the securities or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
_____________________
|
Per
Debenture
|
Total
|
|
|
Price
to Public
|
99.915%
|
$599,490,000
|
|
Underwriting
Discount
|
0.600%
|
$
3,600,000
|
|
Proceeds
to FPL Group Capital (before expenses)
|
99.315%
|
$595,890,000
|
In
addition to the Price to Public set forth above, each purchaser will pay
an
amount equal to the interest accrued, if any, on the securities from the
date
that the securities are originally issued to the date that they are delivered
to
that purchaser.
The
securities are expected to be delivered to the underwriters in book-entry
only
form through The Depository Trust Company, on or about August 18,
2006.
_________________
Joint
Book-Running Managers
Citigroup
Morgan
Stanley
RBS
Greenwich
Capital
Wachovia
Securities
Co-Managers
Calyon
Securities (USA)
KeyBanc Capital Markets
LaSalle
Capital
Markets
Lazard
Capital Markets
SunTrust
Robinson Humphrey
The
date
of this prospectus supplement is August 15, 2006.
The
accompanying prospectus is part of a registration statement filed with
the
Securities and Exchange Commission. You should rely only on the information
incorporated by reference or provided in this prospectus supplement and
in the
accompanying prospectus and in any written communication from us or the
underwriters specifying the final terms of the offering. Neither FPL Group
Capital, FPL Group nor the underwriters has authorized anyone else to provide
you with additional or different information. Neither FPL Group Capital,
FPL
Group nor the underwriters is making an offer of these securities in any
jurisdiction where the offer is not permitted. You should not assume that
the
information in this prospectus supplement or in the accompanying prospectus
is
accurate as of any date other than the date on the front of those documents
or
that the information incorporated by reference is accurate as of any date
other
than the date of the document incorporated by reference.
_________________________
TABLE
OF CONTENTS
Prospectus
Supplement
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S-9
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The
information in this section replaces the information in the “Risk Factors”
section beginning on page 3 of the accompanying prospectus.
Before
purchasing the securities, investors should carefully consider the following
risk factors together with the risk factors and other information incorporated
by reference or provided in this prospectus supplement or in the accompanying
prospectus in order to evaluate an investment in the
securities.
FPL
Group and FPL Group Capital are subject to complex laws and regulations
and to
changes in laws and regulations as well as changing governmental policies
and
regulatory actions, including initiatives regarding deregulation and
restructuring of the energy industry. Florida Power & Light Company holds
franchise agreements with local municipalities and counties, and must
renegotiate expiring agreements. These factors may have a negative impact
on the
business and results of operations of FPL Group and FPL Group
Capital.
FPL
Group
and FPL Group Capital are subject to complex laws and regulations, and
to
changes in laws or regulations, including the Public Utility Regulatory
Policies
Act of 1978, the Public Utility Holding Company Act of 2005, the Federal
Power
Act, the Atomic Energy Act of 1954, the Energy Policy Act of 2005 and certain
sections of the Florida statutes relating to public utilities, changing
governmental policies and regulatory actions, including those of the Federal
Energy Regulatory Commission, the Florida Public Service Commission and
the
legislatures and utility commissions of other states in which FPL Group
and FPL
Group Capital have operations, and the U.S. Nuclear Regulatory Commission,
with respect to, among other things, allowed rates of return, industry
and rate
structure, operation of nuclear power facilities, operation and construction
of
plant facilities, operation and construction of transmission facilities,
acquisition, disposal, depreciation and amortization of assets and facilities,
recovery of fuel and purchased power costs, decommissioning costs, return
on
common equity and equity ratio limits, and present or prospective wholesale
and
retail competition (including but not limited to retail wheeling and
transmission costs). The Florida Public Service Commission has the authority
to
disallow recovery by Florida Power & Light Company of any and all costs that
it considers excessive or imprudently incurred. The regulatory process
generally
restricts Florida Power & Light Company’s ability to grow earnings and does
not provide any assurance as to achievement of earnings levels.
FPL
Group
and FPL Group Capital are subject to extensive federal, state and local
environmental statutes as well as the effect of changes in or additions
to
applicable statutes, rules and regulations relating to air quality, water
quality, waste management, wildlife mortality, natural resources and health
and
safety that could, among other things, restrict or limit the output of
certain
facilities or the use of certain fuels required for the production of
electricity and/or require additional pollution control equipment and otherwise
increase costs. There are significant capital, operating and other costs
associated with compliance with these environmental statutes, rules and
regulations, and those costs could be even more significant in the
future.
FPL
Group
and FPL Group Capital operate in a changing market environment influenced
by
various legislative and regulatory initiatives regarding deregulation,
regulation or restructuring of the energy industry, including deregulation
or
restructuring of the production and sale of electricity. FPL Group and
its
subsidiaries will need to adapt to these changes and may face increasing
competitive pressure.
FPL
Group’s results of operations could be affected by Florida Power & Light
Company’s ability to renegotiate franchise agreements with municipalities and
counties in Florida.
The
operation of power generation facilities, including nuclear facilities,
involves
significant risks that could adversely affect the results of operations
and
financial condition of FPL Group and FPL Group Capital.
The
operation of power generation facilities involves many risks, including
start up
risks, breakdown or failure of equipment, transmission lines or pipelines,
use
of new technology, the dependence on a specific fuel source, including
the
supply and transportation of fuel, or the impact of unusual or adverse
weather
conditions (including natural disasters such as hurricanes), as well as
the risk
of performance below expected or contracted levels of output or efficiency.
This
could result in lost revenues and/or increased expenses, including
the
requirement
to purchase power in the market at potentially higher prices to meet their
contractual obligations. Insurance, warranties or performance guarantees
may not
cover any or all of the lost revenues or increased expenses, including
the cost
of replacement power. In addition to these risks, FPL Group’s and FPL Group
Capital’s nuclear units face certain risks that are unique to the nuclear
industry including the ability to store and/or dispose of spent nuclear
fuel,
the potential payment of significant retrospective insurance premiums,
as well
as additional regulatory actions up to and including shutdown of the units
stemming from public safety concerns, whether at FPL Group’s and FPL Group
Capital’s plants, or at the plants of other nuclear operators. Breakdown or
failure of an operating facility of FPL Energy, LLC, a subsidiary of FPL
Group
Capital, may prevent the facility from performing under applicable power
sales
agreements which, in certain situations, could result in termination of
the
agreement or incurring a liability for liquidated damages.
The
construction of, and capital improvements to, power generation facilities
involve substantial risks. Should construction or capital improvement efforts
be
unsuccessful, the results of operations and financial condition of FPL
Group and
FPL Group Capital could be adversely affected.
FPL
Group’s and FPL Group Capital’s ability to successfully and timely complete
their power generation facilities currently under construction, those projects
yet to begin construction or capital improvements to existing facilities
within
established budgets is contingent upon many variables and subject to substantial
risks. Should any such efforts be unsuccessful, FPL Group and FPL Group
Capital
could be subject to additional costs, termination payments under committed
contracts, and/or the write-off of their investment in the project or
improvement.
The
use of derivative contracts by FPL Group and FPL Group Capital in the normal
course of business could result in financial losses that negatively impact
the
results of operations of FPL Group and FPL Group Capital.
FPL
Group
and FPL Group Capital use derivative instruments, such as swaps, options
and
forwards to manage their commodity and financial market risks, and to a
lesser
extent, engage in limited trading activities. FPL Group and FPL Group Capital
could recognize financial losses as a result of volatility in the market
values
of these contracts, or if a counterparty fails to perform. In the absence
of
actively quoted market prices and pricing information from external sources,
the
valuation of these derivative instruments involves management’s judgment or use
of estimates. As a result, changes in the underlying assumptions or use
of
alternative valuation methods could affect the reported fair value of these
contracts. In addition, Florida Power & Light Company’s use of such
instruments could be subject to prudency challenges and if found imprudent,
cost
recovery could be disallowed by the Florida Public Service
Commission.
FPL
Group’s competitive energy business is subject to risks, many of which are
beyond the control of FPL Group and FPL Group Capital, that may reduce
the
revenues and adversely impact the results of operations and financial condition
of FPL Group and FPL Group Capital.
There
are
other risks associated with FPL Group’s and FPL Group Capital’s competitive
energy business. In addition to risks discussed elsewhere, risk factors
specifically affecting FPL Energy’s success in competitive wholesale markets
include the ability to efficiently develop and operate generating assets,
the
successful and timely completion of project restructuring activities,
maintenance of the qualifying facility status of certain projects, the
price and
supply of fuel (including transportation), transmission constraints, competition
from new sources of generation, excess generation capacity and demand for
power.
There can be significant volatility in market prices for fuel and electricity,
and there are other financial, counterparty and market risks that are beyond
the
control of FPL Energy. FPL Energy’s inability or failure to effectively hedge
its assets or positions against changes in commodity prices, interest rates,
counterparty credit risk or other risk measures could significantly impair
FPL
Group’s future financial results. In keeping with industry trends, a portion
of
FPL Energy’s power generation facilities operate wholly or partially without
long-term power purchase agreements. As a result, power from these facilities
is
sold on the spot market or on a short-term contractual basis, which may
affect
the volatility of FPL Group’s and FPL Group Capital’s financial results. In
addition, FPL Energy’s business depends upon transmission facilities owned and
operated by others; if transmission is disrupted or capacity is inadequate
or
unavailable, FPL Energy’s ability to sell and deliver its wholesale power may be
limited.
FPL
Group’s and FPL Group Capital’s ability to successfully identify, complete and
integrate acquisitions, including the proposed merger with Constellation
Energy
Group, Inc., is subject to significant risks, including the effect of increased
competition for acquisitions resulting from the consolidation of the power
industry.
FPL
Group
and FPL Group Capital are likely to encounter significant competition for
acquisition opportunities that may become available as a result of the
consolidation of the power industry, in general, as well as the passage
of the
Energy Policy Act of 2005. In addition, FPL Group and FPL Group Capital
may be
unable to identify attractive acquisition opportunities at favorable prices
and
to successfully and timely complete and integrate them.
FPL
Group’s ability to successfully complete and integrate the proposed merger
between FPL Group and Constellation Energy Group, Inc. (“Constellation Energy”)
is subject to certain risks and uncertainties including the ability to
obtain
governmental approvals of the transaction on the proposed terms, conditions
and
schedule; the failure of FPL Group or Constellation Energy’s shareholders to
approve the transaction; the risk that anticipated synergies will not be
achieved or will take longer to achieve than expected; disruption from
the
transaction making it more difficult to maintain relationships with customers,
employees, suppliers or governmental entities; unexpected transaction costs
or
liabilities; economic conditions; and other specific factors discussed
in
documents filed with the SEC by both FPL Group and Constellation
Energy.
FPL
Group’s proposed merger with Constellation Energy is subject to receipt of
consents or approvals from governmental entities that could delay or prevent
the
completion of the merger or impose conditions that could have a material
adverse
effect on the combined company or that could cause abandonment of the
merger.
Completion
of the merger is conditioned upon the receipt of consents, orders, approvals
or
clearances, as required, from the Federal Energy Regulatory Commission,
the
U.S. Nuclear Regulatory Commission and the public service commissions or
similar entities in several of the states in which Constellation Energy
and/or
FPL Group operate electric and/or gas businesses, including the state of
Maryland. Among other things, governmental entities could condition their
approval of the merger upon Constellation Energy and/or FPL Group entering
into
agreements to restrict the operations of the combined businesses in accordance
with specified business conduct rules or to take other actions which
governmental entities deem necessary or desirable in the public interest.
The
terms of any such conditions that may be imposed, if any, are not known
by FPL
Group as of the date hereof. If those approvals are not received, or they
are
not received on terms that satisfy the conditions set forth in the merger
agreement, then neither Constellation Energy nor FPL Group will be required
to
complete the merger. Recently adopted energy legislation in Maryland requires
the appointment of a new group of commissioners at the Maryland Public
Service
Commission (“MPSC”) and directs the MPSC to complete a prompt and comprehensive
review of the merger pursuant to new standards. These changes have created
additional uncertainty about the MPSC approval process and may result in
substantial delay in the timing of required MPSC approval of the merger
or the
imposition of terms and conditions that are unfavorable to the combined
company,
such as a requirement to forego an amount of expected merger savings. A
substantial delay in obtaining satisfactory approvals or the imposition
of
unfavorable terms or conditions in connection with such approvals could
have a
material adverse effect on the business, financial condition or results
of
operations of the combined company, could result in litigation with one
or more
governmental entities and/or may cause the abandonment of the
merger.
The
anticipated benefits of combining FPL Group and Constellation Energy may
not be
realized.
FPL
Group
entered into the merger agreement with the expectation that the merger
would
result in various benefits, including, among other things, synergies, cost
savings and operating efficiencies. Although FPL Group expects to achieve
the
anticipated benefits of the merger, including the synergies, achieving
them is
subject to a number of uncertainties, including:
|
·
|
the
ability of the two companies to combine certain of their operations
or
take advantage of expected growth
opportunities;
|
|
·
|
whether
the Federal Energy Regulatory Commission, the U.S. Nuclear Regulatory
Commission, state or any other regulatory authorities whose approval
is
required to complete the merger impose conditions on the merger
or require
the combined company to share a portion of the expected synergies
of the
merger relating to utility operations with customers, any of
which may
have an adverse effect on the combined company;
and
|
|
·
|
general
competitive factors in the
marketplace.
|
No
assurance can be given that these benefits will be achieved, or if achieved,
the
timing of their achievement. Failure to achieve these anticipated benefits
could
result in increased costs and decreases in the amount of expected revenues
of
the combined company.
In
addition, Constellation Energy’s business involves certain risks which are
different from the risks of FPL Group’s current business, and as a result the
combined company may be exposed to competitive, regulatory, operational
and
other challenges that do not affect FPL Group’s businesses to a similar
extent.
FPL
Group and its subsidiaries, including FPL Group Capital, will be subject
to
business uncertainties and contractual restrictions while the merger is
pending
that could adversely affect their businesses.
Uncertainty
about the effect of the merger on employees and customers may have an adverse
effect on FPL Group and its subsidiaries, including FPL Group Capital,
regardless of whether the merger is eventually completed. Although FPL
Group and
FPL Group Capital have taken steps designed to reduce any adverse effects,
these
uncertainties may impair FPL Group’s and FPL Group Capital’s ability to attract,
retain and motivate key personnel until the merger is completed, or the
merger
agreement is terminated, and for a period of time thereafter, and could
cause
customers, suppliers and others that deal with FPL Group and FPL Group
Capital
to seek to change existing business relationships with FPL Group and FPL
Group
Capital.
Employee
retention and recruitment may be particularly challenging during the pendency
of
the merger, as employees and prospective employees may experience uncertainty
about their future roles with the combined company. If, despite FPL Group’s and
FPL Group Capital’s retention and recruiting efforts, key employees depart or
fail to accept employment with either of the companies because of issues
relating to the uncertainty and difficulty of integration or a desire not
to
remain with the combined company, FPL Group’s, FPL Group Capital’s or the
combined company’s business could be seriously harmed.
The
pursuit of the merger and the preparation for the integration of Constellation
Energy and FPL Group may place a significant burden on management and internal
resources. The diversion of management attention away from day-to-day business
concerns and any difficulties encountered in the transition and integration
process could harm FPL Group’s and FPL Group Capital’s businesses, financial
condition and operating results, regardless of whether the merger is eventually
completed.
In
addition, the merger agreement restricts FPL Group and its subsidiaries,
including FPL Group Capital, without Constellation Energy’s consent, from making
certain acquisitions and taking other specified actions until the merger
occurs
or the merger agreement terminates. These restrictions may prevent FPL
Group and
FPL Group Capital from pursuing otherwise attractive business opportunities
and
making other changes to their businesses prior to completion of the merger
or
termination of the merger agreement.
Because
FPL Group and FPL Group Capital rely on access to capital markets, the
inability
to maintain current credit ratings and access capital markets on favorable
terms
may limit the ability of FPL Group and FPL Group Capital to grow their
businesses and would likely increase interest costs.
FPL
Group, FPL Group Capital and Florida Power & Light Company rely on access to
capital markets as a significant source of liquidity for capital requirements
not satisfied by operating cash flows. The inability of FPL Group, FPL
Group
Capital and Florida Power & Light Company to maintain their current credit
ratings could affect their ability to raise capital on favorable terms,
particularly during times of uncertainty in the capital markets,
which,
in
turn,
could impact FPL Group’s and FPL Group Capital’s ability to grow their
businesses and would likely increase their interest costs.
Customer
growth in Florida Power & Light Company’s service area affects FPL Group’s
results of operations.
FPL
Group’s results of operations are affected by the growth in customer accounts
in
Florida Power & Light Company’s service area. Customer growth can be
affected by population growth as well as economic factors in Florida, including
job and income growth, housing starts and new home prices. Customer growth
directly influences the demand for electricity and the need for additional
power
generation and power delivery facilities at Florida Power & Light
Company.
Weather
affects FPL Group’s and FPL Group Capital’s results of
operations.
FPL
Group’s and FPL Group Capital’s results of operations are affected by changes in
the weather. Weather conditions directly influence the demand for electricity
and natural gas and affect the price of energy commodities, and can affect
the
production of electricity at wind and hydro-powered facilities. FPL Group’s and
FPL Group Capital’s results of operations can be affected by the impact of
severe weather which can be destructive, causing outages and/or property
damage,
may affect fuel supply, and could require additional costs to be incurred.
At
Florida Power & Light Company, recovery of these costs is subject to Florida
Public Service Commission approval.
FPL
Group and FPL Group Capital are subject to costs and other effects of legal
proceedings as well as changes in or additions to applicable tax laws,
rates or
policies, rates of inflation, accounting standards, securities laws and
corporate governance requirements.
FPL
Group
and FPL Group Capital are subject to costs and other effects of legal and
administrative proceedings, settlements, investigations and claims, as
well as
the effect of new, or changes in, tax laws, rates or policies, rates of
inflation, accounting standards, securities laws and corporate governance
requirements.
Threats
of terrorism and catastrophic events that could result from terrorism may
impact
the operations of FPL Group and FPL Group Capital in unpredictable
ways.
FPL
Group
and FPL Group Capital are subject to direct and indirect effects of terrorist
threats and activities. Generation and transmission facilities, in general,
have
been identified as potential targets. The effects of terrorist threats
and
activities include, among other things, terrorist actions or responses
to such
actions or threats, the inability to generate, purchase or transmit power,
the
risk of a significant slowdown in growth or a decline in the U.S. economy,
delay
in economic recovery in the U.S., and the increased cost and adequacy of
security and insurance.
The
ability of FPL Group and FPL Group Capital to obtain insurance and the
terms of
any available insurance coverage could be affected by national, state or
local
events and company-specific events.
FPL
Group’s and FPL Group Capital’s ability to obtain insurance, and the cost of and
coverage provided by such insurance, could be affected by national, state
or
local events as well as company-specific events.
FPL
Group and FPL Group Capital are subject to employee workforce factors that
could
affect the businesses and financial condition of FPL Group and FPL Group
Capital.
FPL
Group
and FPL Group Capital are subject to employee workforce factors, including
loss
or retirement of key executives, availability of qualified personnel, collective
bargaining agreements with union employees and work stoppage that could
affect
the businesses and financial condition of FPL Group and FPL Group
Capital.
FPL
Group
Capital was incorporated in 1985 as a Florida corporation and is a wholly-owned
subsidiary of FPL Group. FPL Group Capital holds the capital stock of, and
provides funding for, FPL Group’s operating subsidiaries other than Florida
Power & Light Company. These operating subsidiaries’ business activities
primarily consist of FPL Energy, LLC’s competitive energy business.
FPL
Group
is a holding company incorporated in 1984 as a Florida corporation. FPL Group’s
principal subsidiary, Florida Power & Light Company, is a rate-regulated
utility engaged primarily in the generation, transmission, distribution and
sale
of electric energy. Other operations are conducted through FPL Group
Capital.
Both
FPL
Group Capital’s and FPL Group’s principal executive offices are located at 700
Universe Boulevard, Juno Beach, Florida 33408, telephone number (561) 694-4000,
and their mailing address is P.O. Box 14000, Juno Beach, Florida
33408-0420.
On
December 18, 2005, FPL Group entered into an Agreement and Plan of Merger
with
Constellation Energy Group, Inc. and its wholly owned subsidiary. Under the
terms of the merger agreement, a wholly-owned subsidiary of Constellation
Energy
formed for the purpose of the merger will merge with and into FPL Group.
As a
result, FPL Group will survive the merger and will become a wholly-owned
subsidiary of Constellation Energy upon completion of the merger. Following
the
merger, FPL Group Capital would be an indirect subsidiary of Constellation
Energy. Consummation of the merger is subject to customary closing conditions,
including FPL Group and Constellation Energy shareholder approvals, approvals
by
public service or utility commissions of specified states and approvals from
the
Federal Energy Regulatory Commission and the Nuclear Regulatory Commission.
On
December 19, 2005, FPL Group and Florida Power & Light Company filed with
the Securities and Exchange Commission a Current Report on Form 8-K that
provides additional information on the Agreement and Plan of Merger, as well
as
other matters, and included a copy of that agreement as an exhibit.
The
information in this section adds to the information in the “Use of Proceeds”
section beginning on page 6 of the accompanying prospectus. Please read
these two sections together.
The
$600,000,000 aggregate principal amount of 5 5/8% Debentures, Series due
September 1, 2011 offered by this prospectus supplement and the accompanying
prospectus are referred to in this prospectus supplement as the
“Debentures.”
FPL
Group
Capital will add the net proceeds from the sale of the Debentures to its
general
funds. FPL Group Capital expects to use its general funds to fund the maturity
of all $600,000,000 principal amount of FPL Group Capital's 7 5/8% Debentures,
Series due September 15, 2006. Pending such use, FPL Group Capital expects
to
use its general funds equal to the net proceeds to repay a portion of FPL
Group
Capital's outstanding commercial paper. As of June 30, 2006, FPL Group Capital
had $734.4 million of commercial paper outstanding, which had maturities
of up
to 42 days and which had annual interest rates ranging from 5.11% to 5.39%.
FPL
Group Capital will temporarily invest in short term instruments any proceeds
that are not immediately used for such repayment of commercial
paper.
The
information in this section adds to the information in the “Consolidated Ratio
of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges Plus
Preferred Dividends” section on page 7 of the accompanying prospectus. Please
read these two sections together.
For
the
fiscal years ended December 31, 2005 and December 31, 2004, and for the six
months ended June 30, 2006, FPL Group’s consolidated ratio of earnings to
fixed charges was 2.76, 2.96 and 2.76, respectively.
The
following table shows FPL Group’s consolidated capitalization as of June 30,
2006, and as adjusted. This table, which is presented in this prospectus
supplement solely to provide limited introductory information, is qualified
in
its entirety by, and should be considered in conjunction with, the more detailed
information incorporated by reference or provided in this prospectus supplement
or in the accompanying prospectus.
|
|
|
|
|
Adjusted(a)
|
||||||
|
June
30, 2006
|
Amount
|
Percent
|
||||||||
|
(Unaudited)
|
||||||||||
|
(In
Millions)
|
||||||||||
|
Common
Shareholders’ Equity
|
$
|
9,075
|
$
|
9,075
|
50.3
|
%
|
||||
|
Long-term
debt (excluding current
maturities)
|
8,360
|
8,960
|
49.7
|
%
|
||||||
|
Total
Capitalization
|
$
|
17,435
|
$
|
18,035
|
100.0
|
%
|
||||
|
(a)
|
To
give effect to the issuance of the Debentures offered by this
prospectus
supplement. Adjusted amounts do not reflect the deduction of
any
underwriting discounts in connection with the issuance of the
Debentures.
|
The
information in this section adds to the information in the “Description of
Offered Debt Securities” section beginning on page 8 of the accompanying
prospectus. Please read these two sections together.
General.
FPL
Group Capital will issue the Debentures under the Indenture, dated as of
June 1,
1999, between FPL Group Capital and The Bank of New York, as Indenture
Trustee.
An Officer’s Certificate will supplement the Indenture and establish the
specific terms of the Debentures. Under the Indenture, FPL Group Capital
may
issue an unlimited amount of additional debt securities.
FPL
Group
Capital may from time to time without notice to, or the consent of, the
holders
of the Debentures, create and issue additional Debentures of the same series
under the Indenture. Such additional Debentures will have the same terms
as the
Debentures offered hereby in all respects (except for the payment of interest
accruing prior to the issue date of the additional Debentures or except
for the
first payments of interest following the issue date of the additional
Debentures) so that the additional Debentures may be consolidated and form
a
single series with the Debentures.
The
Indenture Trustee will initially be the security registrar and the paying
agent
for the Debentures. All transactions with respect to the Debentures, including
registration, transfer and exchange of the Debentures, will be handled
by the
security registrar at an office in The City of New York designated by FPL
Group
Capital. FPL Group Capital has initially designated the Corporate Trust
Office
of the Indenture Trustee as that office. In addition, holders of the Debentures
should address any notices to FPL Group Capital regarding the Debentures
to that
office. FPL Group Capital will notify holders of the Debentures of any
change in
the location of that office.
Interest
and Payment.
FPL Group Capital will pay interest semi-annually in cash on the Debentures
at
the rate of 5 5/8% per year. The Debentures will mature on
September 1, 2011. FPL Group Capital will pay interest on the Debentures
on
March 1 and September 1 of each year, each an “interest payment date.” The first
interest payment date will be March 1, 2007. The record date for interest
payable on any interest payment date on the Debentures shall be the close
of
business (1) on the business day immediately preceding such interest payment
date so long as the Debentures remain in book-entry only form, or (2) on
the
15th calendar day immediately preceding each interest payment date if the
Debentures do not remain in book-entry only form. See “—Book-Entry Only
Issuance—The Depository Trust Company.” Interest on the Debentures will accrue
from and including the date of original issuance to but excluding the first
interest payment date. Starting on the first interest payment date, interest
on
each Debenture will accrue from and including the last interest payment date
to
which FPL Group Capital has paid, or duly provided for the payment of, interest
on that Debenture to but excluding the next succeeding interest payment date.
No
interest will accrue on a Debenture for the day that the Debenture matures.
The
amount of interest payable for any period will be computed on the basis of
a
360-day year consisting of twelve 30-day months. The amount of interest payable
for any period shorter than a full semi-annual period for which interest
is
computed will be computed on the basis of the number of days in the period
using
30-day calendar months. In the event that any date on which interest is payable
on the Debentures is not a business day, then payment of the interest payable
on
that date will be made on the next succeeding day which is a business day,
and
no interest or payment will be paid in respect of the delay.
Optional
Redemption.
FPL Group Capital may redeem any of the Debentures, at its option, at any
time
or from time to time, on any date prior to their maturity (each a “Redemption
Date”). FPL Group Capital will give notice of its intent to redeem Debentures
at
least 30 but not more than 60 days prior to a Redemption Date. If FPL Group
Capital redeems all or any part of the Debentures, it will pay a redemption
price (“Redemption Price”) equal to the sum of: (1) 100%
of the
principal amount of the Debentures being redeemed plus (2) accrued and unpaid
interest thereon, if any, to the Redemption Date plus (3) any applicable
“make-whole premium.” The Redemption Price for the Debentures will never be less
than 100%
of the
principal amount of those Debentures plus accrued and unpaid interest on
those
Debentures to the Redemption Date.
The
amount of the make-whole premium with respect to any Debentures to be redeemed
will be equal to the excess, if any, of:
|
(1)
|
the
sum of the present values, calculated as of the Redemption Date,
of:
|
|
(a)
|
each
interest payment that, but for such redemption, would have been
payable on
the Debentures being redeemed on each interest payment date occurring
after the Redemption Date (excluding any accrued interest for the
period
prior to the Redemption Date); and
|
|
(b)
|
the
principal amount that, but for such redemption, would have been
payable at
the final maturity of the Debentures being redeemed;
over
|
|
(2)
|
the
principal amount of the Debentures being
redeemed.
|
The
present values of interest and principal payments referred to in clause (1)
above will be determined in accordance with generally accepted principles
of
financial analysis. Such present values will be calculated by discounting
the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the Redemption
Date
at a discount rate equal to the Treasury Yield (as defined below) plus 15
basis points.
FPL
Group
Capital will appoint an independent investment banking institution of national
standing to calculate the make-whole premium; provided
that Citigroup Global Markets Inc., Morgan Stanley & Co. Incorporated,
Greenwich Capital Markets, Inc. or Wachovia Capital Markets, LLC will make
such
calculation if (1) FPL Group Capital fails to make such appointment at
least 30 days prior to the Redemption Date, or (2) the institution so appointed
is unwilling or unable to make such calculation. If Citigroup Global Markets
Inc., Morgan Stanley & Co. Incorporated, Greenwich Capital Markets, Inc. or
Wachovia Capital Markets, LLC is to make such
calculation
but is unwilling or unable to do so, then the Indenture Trustee will appoint
an
independent investment banking institution of national standing to make such
calculation. In any case, the institution making such calculation is referred
to
in this prospectus supplement as an “Independent Investment
Banker.”
For
purposes of determining the make-whole premium, “Treasury Yield” means a rate of
interest per year equal to the weekly average yield to maturity of United
States
Treasury Notes that have a constant maturity that corresponds to the remaining
term to maturity of the Debentures to be redeemed, calculated to the nearest
1/12th of a year (the “Remaining Term”). The Independent Investment Banker will
determine the Treasury Yield as of the third business day immediately preceding
the applicable Redemption Date.
The
Independent Investment Banker will determine the weekly average yields of
United
States Treasury Notes by reference to the most recent statistical release
published by the Federal Reserve Bank of New York and designated “H.15(519)
Selected Interest Rates” or any successor release (the “H.15 Statistical
Release”). If the H.15 Statistical Release sets forth a weekly average yield for
United States Treasury Notes having a constant maturity that is the same
as the
Remaining Term, then the Treasury Yield will be equal to such weekly average
yield. In all other cases, the Independent Investment Banker will calculate
the
Treasury Yield by interpolation, on a straight-line basis, between the weekly
average yields on the United States Treasury Notes that have a constant maturity
closest to and greater than the Remaining Term and the United States Treasury
Notes that have a constant maturity closest to and less than the Remaining
Term
(in each case as set forth in the H.15 Statistical Release). The Independent
Investment Banker will round any weekly average yields so calculated to the
nearest 1/100th of 1%,
and
will round upward for any figure of 1/200th of 1%
or
above. If weekly average yields for United States Treasury Notes are not
available in the H.15 Statistical Release or otherwise, then the Independent
Investment Banker will select comparable rates and calculate the Treasury
Yield
by reference to those rates.
If
FPL
Group Capital at any time elects to redeem only a part of the Debentures,
the
security registrar will select the particular Debentures to be redeemed using
any method that it deems fair and appropriate. However, if the Debentures
are
solely registered in the name of Cede & Co. and traded through DTC, then DTC
will select the Debentures to be redeemed in accordance with its practices
as
described below in “—Book Entry-Only Issuance—The Depository Trust
Company.”
If
at the
time notice of redemption is given, the redemption moneys are not on deposit
with the Indenture Trustee, then the redemption shall be subject to their
receipt on or before the Redemption Date and such notice shall be of no effect
unless such moneys are received.
Mandatory
Redemption.
The
following constitute “Guarantor Events” with respect to the
Debentures:
|
(1)
|
the
Guarantee Agreement, dated as of June 1, 1999, between FPL Group,
as
Guarantor, and The Bank of New York, as Guarantee Trustee, ceases to
be in full force and effect;
|
|
(2)
|
a
court issues a decree ordering or acknowledging the bankruptcy
or
insolvency of the Guarantor, or appointing a custodian, receiver
or other
similar official for the Guarantor, or ordering the winding up
or
liquidation of its affairs, and the decree remains in effect for
90 days;
or
|
|
(3)
|
the
Guarantor seeks or consents to relief under federal or state bankruptcy
or
insolvency laws, or to the appointment of a custodian, receiver
or other
similar official for the Guarantor, or makes an assignment for
the benefit
of its creditors, or admits in writing that it is bankrupt or
insolvent.
|
FPL
Group
Capital shall, if a Guarantor Event occurs and is continuing, redeem all
of the
outstanding Debentures within 60 days after the occurrence of the Guarantor
Event at a redemption price equal to the principal amount thereof plus accrued
interest to the date of redemption unless, within 30 days after the occurrence
of the Guarantor Event, Standard & Poor’s Ratings Services (a Division of
The McGraw Hill Companies, Inc.) and Moody’s Investors Service, Inc. (if the
Debentures are then rated by those rating agencies, or, if the Debentures
are
not then rated by those rating agencies but are then rated by one or more
other
nationally recognized rating agencies, then at least one of those other
nationally recognized rating agencies) shall have reaffirmed in writing that,
after
giving
effect to such Guarantor Event, the credit rating on the Debentures is
investment grade (i.e. in one of the four highest categories, without regard
to
subcategories within such rating categories, of such rating
agency).
If
a
Guarantor Event occurs and FPL Group Capital is not required to redeem the
Debentures as described above, FPL Group Capital will provide to the Indenture
Trustee and the holders of the Debentures annual and quarterly reports
containing the information that FPL Group Capital would be required to file
with
the SEC under Section 13 or Section 15(d) of the Securities Exchange Act
of 1934
if it were subject to the reporting requirements of those Sections. If FPL
Group
Capital is, at that time, subject to the reporting requirements of those
Sections, the filing of annual and quarterly reports with the SEC pursuant
to
those Sections will satisfy this requirement.
Events
of Default.
In
addition to the events of default relating to any series of debt securities
issued under the Indenture, as set forth under the “Description of Offered Debt
Securities — Events of Default” section beginning on page 14 of the accompanying
prospectus, each of the following events will be an event of default under
the
Indenture with respect to the Debentures:
|
(1)
|
the
Guarantor consolidates with or merges into any other entity or
conveys,
transfers or leases substantially all of its properties and assets
to any
entity, unless
|
|
(a)
|
the
entity formed by such consolidation or into which the Guarantor
is merged,
or the entity to which the Guarantor conveys, transfers or leases
substantially all of its properties and assets is an entity organized
and
existing under the laws of the United States of America, any State
thereof
or the District of Columbia, and expressly assumes the obligations
of the
Guarantor under the Guarantee Agreement;
and
|
|
(b)
|
immediately
after giving effect to such transaction, no event of default under
the
Indenture and no event that, after notice or lapse of time or both,
would
become an event of default under the Indenture, shall have occurred
and be
continuing; or
|
|
(2)
|
FPL
Group Capital fails to redeem any of the Debentures that it is
required to
redeem as described under “Certain Terms of the Debentures — Mandatory
Redemption” above.
|
Book-Entry
Only Issuance—The Depository Trust Company.
The
Debentures will trade through DTC. The Debentures will be represented by
one or
more global certificates and registered in the name of Cede & Co., DTC’s
nominee.
DTC
is a
New York clearing corporation and a clearing agency registered under Section
17A
of the Securities Exchange Act of 1934. DTC holds securities for its
participants. DTC also facilitates the post-trade settlement of securities
transactions among its participants through electronic computerized book-entry
transfers and pledges in the participants’ accounts. This eliminates the need
for physical movement of securities certificates. The participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is a wholly-owned subsidiary of The
Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by
a number of participants of DTC, members of other clearing corporations and
by
The New York Stock Exchange, Inc., the American Stock Exchange LLC, and the
National Association of Securities Dealers, Inc. Others who maintain a custodial
relationship with a participant can use the DTC system. The rules that apply
to
DTC and those using its systems are on file with the Securities and Exchange
Commission.
Purchases
of the Debentures within the DTC system must be made through participants,
which
will receive a credit for the Debentures on DTC’s records. The beneficial
ownership interest of each purchaser will be recorded on the appropriate
participant’s records. Beneficial owners will not receive written confirmation
from DTC of their purchases, but beneficial owners should receive written
confirmations of the transactions, as well as periodic statements of their
holdings, from the participants through which they purchased Debentures.
Transfers of ownership in the Debentures are to be accomplished by entries
made
on the books of the participants acting on behalf of beneficial owners.
Beneficial owners will not receive certificates for their Debentures, except
if
use of the book-entry system for the Debentures is discontinued.
To
facilitate subsequent transfers, all Debentures deposited by participants
with
DTC are registered in the name of DTC’s nominee, Cede & Co. The deposit of
the Debentures with DTC and their registration in the name of Cede & Co.
effects no change in beneficial ownership. DTC has no knowledge of the
actual
beneficial owners of the Debentures. DTC’s records reflect only the identity of
the participants to whose accounts such Debentures are credited. These
participants may or may not be the beneficial owners. Participants will
remain
responsible for keeping account of their holdings on behalf of their
customers.
Conveyance
of notices and other communications by DTC to participants, and by participants
to beneficial owners, will be governed by arrangements among them, subject
to
any statutory or regulatory requirements as may be in effect from time
to time.
Beneficial owners of Debentures may wish to take certain steps to augment
transmission to them of notices of significant events with respect to the
Debentures, such as redemptions, tenders, defaults and proposed amendments
to
the Indenture or the Guarantee Agreement. Beneficial owners of the Debentures
may wish to ascertain that the nominee holding the Debentures has agreed
to
obtain and transmit notices to the beneficial owners.
Redemption
notices will be sent to Cede & Co., as registered holder of the Debentures.
If less than all of the Debentures are being redeemed, DTC’s practice is to
determine by lot the amount of Debentures of each participant to be
redeemed.
Neither
DTC nor Cede & Co. will itself consent or vote with respect to Debentures,
unless authorized by a participant in accordance with DTC’s procedures. Under
its usual procedures, DTC would mail an omnibus proxy to FPL Group Capital
as
soon as possible after the record date. The omnibus proxy assigns the consenting
or voting rights of Cede & Co. to those participants to whose accounts the
Debentures are credited on the record date. FPL Group Capital and FPL Group
believe that these arrangements will enable the beneficial owners to exercise
rights equivalent in substance to the rights that can be directly exercised
by a
registered holder of the Debentures.
Payments
of redemption proceeds, principal of, and interest on the Debentures will
be
made to Cede & Co., or such other nominee as may be requested by DTC.
DTC’s practice is to credit participants’ accounts upon DTC’s receipt of funds
and corresponding detail information from FPL Group Capital or its agent,
on the
payable date in accordance with their respective holdings shown on DTC’s
records. Payments by participants to beneficial owners will be governed
by
standing instructions and customary practices. Payments will be the
responsibility of participants and not of DTC, The Bank of New York (the
Indenture Trustee), FPL Group Capital or FPL Group, subject to any statutory
or
regulatory requirements as may be in effect from time to time. Payment
of
redemption proceeds, principal and interest to Cede & Co. (or such
other nominee as may be requested by DTC) is the responsibility of FPL
Group
Capital. Disbursement of payments to participants is the responsibility
of DTC,
and disbursement of payments to the beneficial owners is the responsibility
of
participants.
Except
as
provided in this prospectus supplement, a beneficial owner will not be
entitled
to receive physical delivery of the Debentures. Accordingly, each beneficial
owner must rely on the procedures of DTC to exercise any rights under the
Debentures.
DTC
may
discontinue providing its services as securities depositary with respect
to the
Debentures at any time by giving reasonable notice to FPL Group Capital.
In the
event no successor securities depositary is obtained, certificates for
the
Debentures will be printed and delivered. FPL Group Capital and FPL Group
may
decide to replace DTC or any successor depositary. Additionally, subject
to the
procedures of DTC, FPL Group Capital and FPL Group may decide to discontinue
use
of the system of book-entry transfers through DTC (or a successor depositary)
with respect to the Debentures. In that event, certificates for the Debentures
will be printed and delivered.
The
information in this section concerning DTC and DTC’s book-entry system has been
obtained from sources that FPL Group Capital and FPL Group believe to be
reliable. Neither FPL Group Capital, FPL Group nor the underwriters take
any
responsibility for the accuracy of this information.
FPL
Group
Capital is selling the Debentures to the underwriters named in the table
below
pursuant to an underwriting agreement between FPL Group Capital, FPL Group
and
the underwriters named below, for whom Citigroup Global Markets Inc., Morgan
Stanley & Co. Incorporated, Greenwich Capital Markets, Inc. and Wachovia
Capital Markets, LLC are acting as representatives. Subject to certain
conditions, FPL Group Capital has agreed to sell to each of the underwriters,
and each of the underwriters has severally agreed to purchase, the principal
amount of Debentures set forth opposite that underwriter’s name in the table
below:
|
Underwriter
|
Principal
Amount of Debentures |
|||
|
Citigroup
Global Markets Inc.
|
$ | 120,000,000 | ||
|
Morgan
Stanley & Co. Incorporated
|
120,000,000 | |||
|
Greenwich
Capital Markets, Inc.
|
120,000,000 | |||
|
Wachovia
Capital Markets, LLC
|
120,000,000 | |||
|
Calyon
Securities (USA) Inc.
|
24,000,000 | |||
|
KeyBanc
Capital Markets, a Division of
McDonald
Investments Inc.
|
24,000,000
|
|||
|
LaSalle
Financial Services, Inc.
|
24,000,000
|
|||
|
Lazard
Capital Markets LLC
|
24,000,000
|
|||
|
SunTrust
Capital Markets, Inc.
|
24,000,000
|
|||
|
Total
|
$
|
600,000,000
|
||
Under
the
terms and conditions of the underwriting agreement, the underwriters must
buy
all of the Debentures if they buy any of them. The underwriting agreement
provides that the obligations of the underwriters pursuant thereto are
subject
to certain conditions. In the event of a default by an underwriter, the
underwriting agreement provides that, in certain circumstances, the purchase
commitment of the non-defaulting underwriters may be increased or the
underwriting agreement may be terminated. The underwriters will offer the
Debentures to the public if the underwriters buy the Debentures from FPL
Group
Capital.
FPL
Group
Capital will compensate the underwriters by selling the Debentures to them
at a
price that is less than the price to the public by the amount of the
“Underwriting Discount” set forth in the table below. The underwriters will sell
the Debentures to the public at the price to the public set forth on the
cover
page of this prospectus supplement and may sell the Debentures to certain
dealers at a price that is less than the price to the public by no more
than the
amount of the “Initial Dealers’ Concession” set forth in the table below. The
underwriters and such dealers may sell the Debentures to certain other
dealers
at a price that is less than the price to the public by no more than the
amounts
of the “Initial Dealers’ Concession” and the “Reallowed Dealers’ Concession” set
forth in the table below.
|
(expressed
as a percentage
of
principal amount)
|
|
|
Underwriting
Discount
|
0.600%
|
|
Initial
Dealers’ Concession
|
0.350%
|
|
Reallowed
Dealers’ Concession
|
0.250%
|
An
underwriter may reject offers for the Debentures. After the initial public
offering of the Debentures, the underwriters may change the offering price
and
other selling terms of the Debentures.
There
is
currently no established trading market for the Debentures. The underwriters
have advised FPL Group Capital that they intend to make a trading market
in the
Debentures but are not obligated to do so and may
discontinue
such market-making activities at any time without notice. FPL Group Capital
cannot give any assurance as to the maintenance of the trading market for,
or
the liquidity of, the Debentures.
In
connection with
the offering, Citigroup Global Markets Inc., Morgan Stanley & Co.
Incorporated, Greenwich Capital Markets, Inc. and Wachovia Capital Markets,
LLC
on behalf of the underwriters may purchase and sell the Debentures in the
open
market. These transactions may include over-allotment, syndicate covering
transactions and stabilizing transactions. Over-allotment includes syndicate
sales of Debentures in excess of the principal amount of Debentures to
be
purchased by the underwriters in the offering, which creates a syndicate
short
position. Syndicate covering transactions involve purchases of the Debentures
in
the open market after the distribution has been completed in order to cover
syndicate short positions. Stabilizing transactions consist of certain
bids or
purchases of Debentures made for the purpose of preventing or retarding
a
decline in the market price of the Debentures while the offering is in
progress.
The
underwriters may also impose a penalty bid. Penalty bids permit the underwriters
to reclaim an initial dealers’ concession from a syndicate member when Citigroup
Global Markets Inc., Morgan Stanley & Co. Incorporated, Greenwich Capital
Markets, Inc. or Wachovia Capital Markets, LLC, in covering syndicate short
positions or making stabilizing purchases, repurchases the Debentures originally
sold by that syndicate member.
Any
of
these activities may cause the price of the Debentures to be higher than
the
price that otherwise would exist in the open market in the absence of such
transactions. These transactions may be effected in the over-the-counter
market
or otherwise and, if commenced, may be discontinued at any time.
Certain
of the underwriters will make the Debentures available for distribution
on the
Internet through a proprietary Web site and/or a third-party system operated
by
Market Axess Inc., an Internet-based communications technology provider.
Market
Axess Inc. is providing the system as a conduit for communications between
those
underwriters and their customers and is not a party to any transactions.
Market
Axess Inc., a registered broker-dealer, will receive compensation from
those
underwriters based on transactions those underwriters conduct through the
system. Those underwriters will make the Debentures available to their
customers
through Internet distributions, whether made through a proprietary or
third-party system, on the same terms as distributions made through other
channels.
FPL
Group
Capital estimates that its expenses in connection with the sale of the
Debentures, other than underwriting discounts, will be $400,000. This estimate
includes expenses relating to printing, rating agency fees, trustee’s fees and
legal fees, among other expenses.
FPL
Group
Capital and FPL Group have agreed to indemnify the underwriters against,
or to
contribute to payments the underwriters may be required to make in respect
of,
certain liabilities, including liabilities under the Securities Act of
1933.
Lazard
Capital Markets LLC (“Lazard”) has entered into an agreement with Mitsubishi UFJ
Securities (USA), Inc. (“MUS (USA)”) pursuant to which MUS (USA) provides
certain advisory and/or other services to Lazard, including in respect
of this
offering. In return for this provision of such services by MUS (USA) to
Lazard,
Lazard will pay to MUS (USA) a mutually agreed upon fee.
The
underwriters and their affiliates engage in transactions with, and perform
services for, FPL Group, its subsidiaries (including FPL Group Capital)
and its
affiliates in the ordinary course of business and have engaged, and may
engage
in the future engage, in commercial banking and investment banking transactions
with FPL Group, its subsidiaries and its affiliates.
The
information in this section replaces the information in the “Experts” section on
page 57 of the accompanying prospectus.
The
consolidated financial statements and management’s report on the effectiveness
of internal control over financial reporting incorporated in this prospectus
supplement by reference from FPL Group’s Annual Report on Form 10-K
for the year ended December 31, 2005, have been audited by Deloitte & Touche
LLP, an independent
registered
public accounting firm, as stated in their reports, which are incorporated
herein by reference and have been so incorporated in reliance upon the
reports
of such firm given upon their authority as experts in accounting and
auditing.
The
information in this section supplements the information in the “Legal Opinions”
section on page 57 of the accompanying prospectus.
Squire,
Sanders & Dempsey L.L.P., Miami, Florida and Thelen Reid & Priest LLP,
New York, New York, co-counsel to FPL Group and FPL Group Capital, will
pass
upon the legality of the Debentures for FPL Group and FPL Group Capital.
Hunton
& Williams LLP, New York, New York, will pass upon the legality of the
Debentures for the underwriters. Thelen Reid & Priest LLP and Hunton &
Williams LLP may rely as to all matters of Florida law upon the opinion
of
Squire, Sanders & Dempsey L.L.P., and Squire, Sanders & Dempsey L.L.P.
may rely as to all matters of New York law upon the opinion of Thelen
Reid &
Priest LLP.
PROSPECTUS
FPL
GROUP, INC.
Common
Stock with attached Preferred Share Purchase Rights,
Preferred
Stock,
Junior
Subordinated Debentures,
Stock
Purchase Contracts
and
Stock
Purchase Units
__________________________
FPL
GROUP CAPITAL INC
Debt
Securities, Junior Subordinated Debentures and Preferred
Stock
Guaranteed
as described in this prospectus by
FPL
GROUP, INC.
__________________________
FPL
GROUP CAPITAL TRUST II
FPL
GROUP CAPITAL TRUST III
FPL
GROUP TRUST I
FPL
GROUP TRUST II
Preferred
Trust Securities
Guaranteed
as described in this prospectus by
FPL
GROUP, INC.
__________________________
Each
of
FPL Group, Inc., FPL Group Capital Inc, FPL Group Capital Trust II, FPL Group
Capital Trust III, FPL Group Trust I and FPL Group Trust II may offer from
time to time up to $1,400,000,000 of securities provided that the aggregate
amount of securities offered by all such issuers may not exceed $1,400,000,000.
In addition, each of FPL Group, Inc., FPL Group Capital Inc and FPL Group
Capital Trust II may offer from time to time up to $600,000,000 of additional
securities provided that the aggregate amount of such additional securities
offered by those three issuers may not exceed $600,000,000.
FPL
Group, FPL Group Capital, FPL Group Capital Trust II, FPL Group Capital Trust
III, FPL Group Trust I and FPL Group Trust II will provide specific terms of
the
securities, including the offering prices, in supplements to this prospectus.
The supplements may also add, update or change information contained in this
prospectus. You should read this prospectus and any supplements carefully before
you invest.
FPL
Group’s common stock is listed on the New York Stock Exchange and trades under
the symbol “FPL.”
FPL
Group, FPL Group Capital, FPL Group Capital Trust II, FPL Group Capital Trust
III, FPL Group Trust I and FPL Group Trust II may offer these securities
directly or through underwriters, agents or dealers. The supplements to this
prospectus will describe the terms of any particular plan of distribution,
including any underwriting arrangements. The “Plan of Distribution” section
beginning on page 56 of this prospectus also provides more information on this
topic.
See
“Risk Factors” beginning on page 3 of this prospectus to read about certain
factors you should consider before making an investment in these
securities.
FPL
Group’s, FPL Group Capital’s, FPL Group Capital Trust II’s, FPL Group Capital
Trust III’s, FPL Group Trust I’s and FPL Group Trust II’s principal executive
offices are located at 700 Universe Boulevard, Juno Beach, Florida 33408,
telephone number (561) 694-4000, and their mailing address is P.O. Box
14000, Juno Beach, Florida 33408-0420.
___________________________________________________
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
is
truthful or complete. Any representation to the contrary is a criminal
offense.
August 19,
2004
This
prospectus is a combined prospectus which relates to two different registration
statements filed at different times with the Securities and Exchange Commission
(“SEC”), each using a “shelf” registration process. The registration statements
to which this combined prospectus relates are the following:
|
(1)
|
Registration
Statement Nos. 333-102173, 333-102173-01, 333-102173-02 and 333-102173-03,
declared effective by the SEC on April 3, 2003, pursuant to
which
|
|
(a)
|
FPL
Group may offer from time to time, in one or more offerings, up to
a total
of $600,000,000 of common stock with attached preferred share purchase
rights, stock purchase contracts, stock purchase units, guarantees
of FPL
Group Capital’s debt securities and junior subordinated debentures and/or
guarantees of the preferred trust securities of FPL Group Capital
Trust
II,
|
|
(b)
|
FPL
Group Capital may offer from time to time, in one or more offerings,
up to
a total of $600,000,000 of debt securities and junior subordinated
debentures, and
|
|
(c)
|
FPL
Group Capital Trust II may offer from time to time, in one or more
offerings, up to a total of $600,000,000 of preferred trust
securities;
|
provided
that the aggregate amount of all such securities or combinations of such
securities offered by FPL Group, FPL Group Capital and FPL Group Capital Trust
II under that registration statement may not exceed $600,000,000.
|
(2)
|
Registration
Statement Nos. 333-116209, 333-116209-01, 333-116209-02, 333-116209-03,
333-116209-04 and 333-116209-05, declared effective by the SEC on
August 19, 2004, pursuant to
which
|
|
(a)
|
FPL
Group may offer from time to time, in one or more offerings, up to
a total
of $1,400,000,000 of common stock with attached preferred share purchase
rights, stock purchase contracts, stock purchase units, preferred
stock,
junior subordinated debentures, guarantees of FPL Group Capital’s debt
securities, junior subordinated debentures and preferred stock and/or
guarantees of the preferred trust securities of FPL Group Capital
Trust
II, FPL Group Capital Trust III, FPL Group Trust I and FPL Group
Trust
II,
|
|
(b)
|
FPL
Group Capital may offer from time to time, in one or more offerings,
up to
a total of $1,400,000,000 of debt securities, junior subordinated
debentures and preferred stock, and
|
|
(c)
|
FPL
Group Capital Trust II, FPL Group Capital Trust III, FPL Group Trust
I and
FPL Group Trust II may offer from time to time, in one or more offerings,
up to a total of $1,400,000,000 of preferred trust
securities;
|
provided
that the aggregate amount of all such securities or combinations of such
securities offered by FPL Group, FPL Group Capital, FPL Group Capital Trust
II,
FPL Group Capital Trust III, FPL Group Trust I and FPL Group Trust II under
that
registration statement may not exceed $1,400,000,000. FPL Group Capital Trust
II
and FPL Group Capital Trust III are each referred to in this prospectus as
“FPL
Group Capital Trust” and FPL Group Trust I and FPL Group Trust II are each
referred to in this prospectus as “FPL Group Trust.” In addition FPL Group
Capital Trust and FPL Group Trust are each referred to in this prospectus as
the
“Trust.”
This
prospectus provides you with a general description of the securities that FPL
Group, FPL Group Capital and/or the Trust may offer. Each time FPL Group, FPL
Group Capital and/or the Trust sells securities, FPL Group, FPL Group Capital
and/or the Trust will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may
also
add, update or change information contained in this prospectus. You should
read
both this prospectus and any prospectus supplement
together
with additional information described under the headings “Where You Can Find
More Information” and “Incorporation by Reference.”
For
more
detailed information about the securities, you can read the exhibits to the
registration statement. Those exhibits have been either filed with the
registration statement or incorporated by reference to earlier SEC filings
listed in the registration statement.
Before
purchasing the securities, investors should carefully consider the following
risk factors together with the other information incorporated by reference
or
provided in this prospectus or in a prospectus supplement in order to evaluate
an investment in the securities.
FPL
Group and FPL Group Capital are subject to complex laws and regulations and
to
changes in laws and regulations, including initiatives regarding restructuring
of the energy industry. Florida Power & Light Company holds franchise
agreements with local municipalities and counties, and must renegotiate expiring
agreements. These factors may have a negative impact on the business and results
of operations of FPL Group and FPL Group Capital.
FPL
Group
and FPL Group Capital are subject to changes in laws or regulations, including
the Public Utility Regulatory Policies Act of 1978 and the Public Utility
Holding Company Act of 1935, changing governmental policies and regulatory
actions, including those of the Federal Energy Regulatory Commission, the
Florida Public Service Commission and the utility commissions of other states
in
which FPL Group or FPL Group Capital have operations, and the U.S. Nuclear
Regulatory Commission, with respect to, among other things, allowed rates of
return, industry and rate structure, operation of nuclear power facilities,
operation and construction of plant facilities, operation and construction
of
transmission facilities, acquisition, disposal, depreciation and amortization
of
assets and facilities, recovery of fuel and purchased power costs,
decommissioning costs, return on common equity and equity ratio limits, and
present or prospective wholesale and retail competition (including but not
limited to retail wheeling and transmission costs). The Florida Public Service
Commission has the authority to disallow recovery by Florida Power & Light
Company of costs that it considers excessive or imprudently
incurred.
The
regulatory process generally restricts Florida Power & Light Company’s
ability to grow earnings and does not provide any assurance as to achievement
of
earnings levels.
FPL
Group
and FPL Group Capital are subject to extensive federal, state and local
environmental statutes, rules and regulations relating to air quality, water
quality, waste management, wildlife mortality, natural resources and health
and
safety that could, among other things, restrict or limit the output of certain
facilities or the use of certain fuels required for the production of
electricity and/or increase costs. There are significant capital, operating
and
other costs associated with compliance with these environmental statutes, rules
and regulations, and those costs could be even more significant in the
future.
FPL
Group
and FPL Group Capital operate in a changing market environment influenced by
various legislative and regulatory initiatives regarding deregulation,
regulation or restructuring of the energy industry, including deregulation
of
the production and sale of electricity. FPL Group and its subsidiaries will
need
to adapt to these changes and may face increasing competitive
pressure.
FPL
Group’s results of operations could be affected by Florida Power & Light
Company’s ability to renegotiate franchise agreements with municipalities and
counties in Florida.
The
operation of power generation facilities, including nuclear facilities, involves
significant risks that could adversely affect the results of operations and
financial condition of FPL Group and FPL Group Capital.
The
operation of power generation facilities involves many risks, including start
up
risks, breakdown or failure of equipment, transmission lines or pipelines,
use
of new technology, the dependence on a specific fuel source or the impact of
unusual or adverse weather conditions (including natural disasters such as
hurricanes), as
well
as
the risk of performance below expected or contracted levels of output or
efficiency. This could result in lost revenues and/or increased expenses.
Insurance, warranties or performance guarantees may not cover any or all of
the
lost revenues or increased expenses, including the cost of replacement power.
In
addition to these risks, FPL Group’s nuclear units face certain risks that are
unique to the nuclear industry including the ability to dispose of spent nuclear
fuel, as well as additional regulatory actions up to and including shutdown
of
the units stemming from public safety concerns, whether at FPL Group’s plants or
at the plants of other nuclear operators. Breakdown or failure of an operating
facility of FPL Energy, LLC, a subsidiary of FPL Group Capital, may prevent
the
facility from performing under applicable power sales agreements which, in
certain situations, could result in termination of the agreement or incurring
a
liability for liquidated damages.
The
construction of, and capital improvements to, power generation facilities
involve substantial risks. Should construction or capital improvement efforts
be
unsuccessful, the results of operations and financial condition of FPL Group
and
FPL Group Capital could be negatively affected.
FPL
Group’s and FPL Group Capital’s ability to successfully and timely complete
their power generation facilities currently under construction, those projects
yet to begin construction or capital improvements to existing facilities is
contingent upon many variables and subject to substantial risks. Should any
such
efforts be unsuccessful, FPL Group and FPL Group Capital could be subject to
additional costs, termination payments under committed contracts and/or the
write off of their investment in the project or improvement.
The
use of derivative contracts by FPL Group and FPL Group Capital in the normal
course of business could result in financial losses that negatively impact
the
results of operations of FPL Group and FPL Group Capital.
FPL
Group
and FPL Group Capital use derivative instruments, such as swaps, options,
futures and forwards to manage their commodity and financial market risks,
and
to a lesser extent, engage in limited trading activities. FPL Group and FPL
Group Capital could recognize financial losses as a result of volatility in
the
market values of these contracts, or if a counterparty fails to perform. In
the
absence of actively quoted market prices and pricing information from external
sources, the valuation of these derivative instruments involves management’s
judgment or use of estimates. As a result, changes in the underlying assumptions
or use of alternative valuation methods could affect the reported fair value
of
these contracts. In addition, Florida Power & Light Company’s use of such
instruments could be subject to prudency challenges and if found imprudent,
cost
recovery could be disallowed by the Florida Public Service
Commission.
FPL
Group’s unregulated businesses, particularly FPL Energy, are subject to risks,
many of which are beyond the control of FPL Group and FPL Group Capital, that
may reduce the revenues and adversely impact the results of operations and
financial condition of FPL Group and FPL Group Capital.
There
are
other risks associated with FPL Group’s and FPL Group Capital’s non-rate
regulated businesses, particularly FPL Energy. In addition to risks discussed
elsewhere, risk factors specifically affecting FPL Energy’s success in
competitive wholesale markets include the ability to efficiently develop and
operate generating assets, the successful and timely completion of project
restructuring activities, maintenance of the qualifying facility status of
certain projects, the price and supply of fuel, transmission constraints,
competition from new sources of generation, excess generation capacity and
demand for power. There can be significant volatility in market prices for
fuel
and electricity, and there are other financial, counterparty and market risks
that are beyond the control of FPL Energy. FPL Energy’s inability or failure to
effectively hedge its assets or positions against changes in commodity prices,
interest rates, counterparty credit risk or other risk measures could
significantly impair its future financial results. In keeping with industry
trends, a portion of FPL Energy’s power generation facilities operate wholly or
partially without long-term power purchase agreements. As a result, power from
these facilities is sold on the spot market or on a short-term contractual
basis, which may affect the volatility of FPL Group’s and FPL Group Capital’s
financial results. In addition, FPL Energy’s business depends upon transmission
facilities owned and operated by others; if transmission is disrupted or
capacity is inadequate or unavailable FPL Energy’s ability to sell and deliver
its wholesale power may be limited.
FPL
Group’s and FPL Group Capital’s ability to successfully identify and complete
acquisitions is subject to significant risks, including the effect of increased
competition resulting from the consolidation of the power
industry.
FPL
Group
and FPL Group Capital are likely to encounter significant competition for
acquisition opportunities that may become available as a result of the
consolidation of the power industry. In addition, FPL Group and FPL Group
Capital may be unable to identify attractive acquisition opportunities at
favorable prices and to successfully and timely complete and integrate
them.
Because
FPL Group and FPL Group Capital rely on access to capital markets, the inability
to access capital markets on favorable terms may limit the ability of FPL Group
and FPL Group Capital to grow their businesses and would likely increase
interest costs.
FPL
Group
and FPL Group Capital rely on access to capital markets as a significant source
of liquidity for capital requirements not satisfied by operating cash flows.
The
inability of FPL Group and FPL Group Capital to maintain their current credit
ratings could affect their ability to raise capital on favorable terms,
particularly during times of uncertainty in the capital markets which, in turn
could impact FPL Group’s and FPL Group Capital’s ability to grow their
businesses and would likely increase their interest costs.
Weather
conditions can affect FPL Group’s and FPL Group Capital’s results of
operations.
FPL
Group’s and FPL Group Capital’s results of operations can be affected by changes
in the weather. Weather conditions directly influence the demand for electricity
and natural gas and affect the price of energy commodities, and can affect
the
production of electricity at wind and hydro-powered facilities. In addition,
severe weather can be destructive, causing outages and/or property damage,
which
could require additional costs to be incurred.
FPL
Group and FPL Group Capital are subject to costs and other effects of legal
proceedings, changes in tax and inflation rates, and changes in or additions
to
applicable tax policies, rates of inflation, accounting standards, securities
laws and corporate governance requirements.
FPL
Group
and FPL Group Capital are subject to costs and other effects of legal and
administrative proceedings, settlements, investigations and claims; as well
as
the effect of new, or changes in, tax rates or policies, rates of inflation,
accounting standards, securities laws or corporate governance
requirements.
Threats
of terrorism and catastrophic events that could result from terrorism may impact
the operations of FPL Group and FPL Group Capital in unpredictable
ways.
FPL
Group
and FPL Group Capital are subject to direct and indirect effects of terrorist
threats and activities. Generation and transmission facilities, in general,
have
been identified as potential targets. The effects of terrorist threats and
activities include, among other things, terrorist actions or responses to such
actions or threats, the inability to generate, purchase or transmit power,
the
risk of a significant slowdown in growth or a decline in the U.S. economy,
delay
in economic recovery in the U.S., and the increased cost and adequacy of
security and insurance.
The
ability of FPL Group and FPL Group Capital to obtain insurance and the terms
of
any available insurance coverage could be affected by national and
company-specific events.
FPL
Group’s and FPL Group Capital’s ability to obtain insurance, and the cost of and
coverage provided by such insurance, could be affected by national events as
well as company-specific events.
FPL
Group and FPL Group Capital are subject to employee workforce factors that
could
affect the businesses and financial condition of FPL Group and FPL Group
Capital.
FPL
Group
and FPL Group Capital are subject to employee workforce factors, including
loss
or retirement of key executives, availability of qualified personnel, collective
bargaining agreements with union employees or work stoppage that could affect
the business and financial condition of FPL Group and FPL Group
Capital.
FPL
Group
Capital was incorporated in 1985 as a Florida corporation and is a wholly-owned
subsidiary of FPL Group. FPL Group Capital holds the capital stock of, and
provides funding for, FPL Group’s operating subsidiaries other than Florida
Power & Light Company. These operating subsidiaries’ business activities
primarily consist of non-rate regulated power projects.
FPL
Group
is a holding company incorporated in 1984 as a Florida corporation. FPL Group’s
principal subsidiary, Florida Power & Light Company, is a rate-regulated
utility engaged in the generation, transmission, distribution and sale of
electric energy. Other operations are conducted through FPL Group Capital.
FPL
Group is a public utility holding company, as defined in the Public Utility
Holding Company Act of 1935. FPL Group is exempt from substantially all of
the
provisions of the Public Utility Holding Company Act of 1935.
FPL
Group
Capital Trust II, FPL Group Capital Trust III, FPL Group Trust I and FPL Group
Trust II are Delaware statutory trusts created pursuant to separate trust
agreements among FPL Group as depositor of the Trust, The Bank of New York
as
the Property Trustee, The Bank of New York (Delaware) as the Delaware Trustee
and one or more Administrative Trustees appointed by FPL Group. The trust
agreements will be amended and restated substantially in the form filed as
an
exhibit to the registration statement. Each trust agreement, as so amended
and
restated, is referred to in this prospectus as the “Trust Agreement.” FPL Group
Capital Trust exists only to issue its preferred trust securities and common
trust securities and to hold the junior subordinated debentures of FPL Group
Capital as trust assets. FPL Group Trust exists only to issue its preferred
trust securities and common trust securities and to hold the junior subordinated
debentures of FPL Group as trust assets. All of the common trust securities
will
be owned by FPL Group. The common trust securities will represent at least
3% of
the total capital of the Trust. Payments on any distribution payment date or
redemption date will be made on the common trust securities pro
rata
with the
preferred trust securities, except that the common trust securities’ right to
payment will be subordinated to the rights of the preferred trust securities
if
there is a default under the trust agreement. The Trust has a term of
approximately 50 years, but may dissolve earlier as provided in the Trust
Agreement.
The
Trust’s business and affairs will be conducted by its Administrative Trustees.
The office of the Delaware Trustee in the State of Delaware is White Clay
Center, Route 273, Newark, Delaware 19711. The principal place of business
of
the Trust is 700 Universe Boulevard, Juno Beach, Florida 33408, and the
telephone number is (561) 694-4000.
Unless
otherwise stated in a prospectus supplement, FPL Group Capital and FPL Group
will each add the net proceeds from the sale of these securities to its
respective general funds. FPL Group uses its general funds for corporate
purposes, including to provide funds for its subsidiaries. FPL Group Capital
uses its general funds for corporate purposes, including to repay short-term
borrowings and to repay, redeem or repurchase outstanding long-term debt
obligations. FPL Group Capital and FPL Group will each temporarily invest any
proceeds that it does not need to use immediately in short-term
instruments.
FPL
Group
Capital Trust will use the proceeds from the sale of preferred trust securities
and common trust securities to invest in junior subordinated debentures issued
by FPL Group Capital. FPL Group Capital will add the net proceeds from the
sale
of such junior subordinated debentures to its general funds, which will be
used
as described above.
FPL
Group
Trust will use the proceeds from the sale of preferred trust securities and
common trust securities to invest in junior subordinated debentures issued
by
FPL Group. FPL Group will add the net proceeds from the sale of such junior
subordinated debentures to its general funds, which will be used as described
above.
The
following table shows FPL Group’s consolidated ratio of earnings to fixed
charges and consolidated ratio of earnings to combined fixed charges and
preferred stock dividends for each of its last five fiscal years:
|
Years
Ended December 31,
|
||||
|
2003
|
2002
|
2001
|
2000
|
1999
|
|
3.28
|
2.95
|
3.60
|
4.05
|
4.86
|
FPL
Group’s consolidated ratio of earnings to fixed charges and consolidated ratio
of earnings to combined fixed charges and preferred stock dividends for the
six
months ended June 30, 2004 was 2.75.
FPL
Group
files annual, quarterly and other reports and other information with the SEC.
You can read and copy any information filed by FPL Group with the SEC at the
SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
You can obtain additional information about the Public Reference Room by calling
the SEC at 1-800-SEC-0330.
In
addition, the SEC maintains an Internet site (http://www.sec.gov) that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC, including FPL Group. FPL Group
also maintains an Internet site (http://www.fplgroup.com).
FPL
Group
Capital does not file reports or other information with the SEC. FPL Group
includes summarized financial information relating to FPL Group Capital in
some
of its reports filed with the SEC. FPL Group does not intend to include any
separate financial information with respect to FPL Group Capital in its
consolidated financial statements because FPL Group and FPL Group Capital have
determined that this information is not material to the holders of FPL Group
Capital’s debt securities.
No
separate financial statements of the Trust are included in this prospectus.
FPL
Group and the Trust do not consider those financial statements to be material
to
holders of the preferred trust securities because (1) the Trust is a newly
formed special purpose entity and has no operating history or independent
operations, and (2) the Trust is not engaged in and does not propose to
engage in any activity other than holding as trust assets the junior
subordinated debentures of FPL Group Capital, in the case of FPL Group Capital
Trust, and the junior subordinated debentures of FPL Group in the case of FPL
Group Trust and issuing its preferred trust securities and common trust
securities. FPL Group and the Trust do not expect the Trust to file periodic
reports under Sections 13 or 15(d) of the Securities Exchange Act of
1934.
The
SEC
allows FPL Group Capital, FPL Group and the Trust to “incorporate by reference”
the information that FPL Group files with the SEC, which means that FPL Group
Capital, FPL Group and the Trust may, in this prospectus, disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus. Information
that FPL Group files in the future with the SEC will automatically update and
supersede this information. FPL Group Capital, FPL Group
and
the
Trust are incorporating by reference the documents listed below and any future
filings FPL Group makes with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of
the Securities Exchange Act of 1934 after the date of this prospectus until
FPL
Group, FPL Group Capital and/or the Trust sell all of these
securities:
|
(1)
|
FPL
Group’s Annual Report on Form 10-K for the year ended December 31,
2003;
|
|
(2)
|
FPL
Group’s Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2004 and June 30, 2004;
and
|
|
(3)
|
FPL
Group’s Current Reports on Form 8-K filed with the SEC on March 1,
2004, March 12, 2004, June 10, 2004, and August 16,
2004.
|
You
may
request a copy of these documents, at no cost to you, by writing or calling
Robert J. Reger, Jr., Esq., Thelen Reid & Priest LLP, 875 Third Avenue,
New York, New York, 10022, (212) 603-2000. FPL Group will provide to each
person, including any beneficial owner, to whom this prospectus is delivered,
a
copy of any or all of the information that has been incorporated by reference
in
this prospectus but not delivered with this prospectus.
In
connection with the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, FPL Group, FPL Group Capital and the Trust are hereby filing
cautionary statements identifying important factors that could cause FPL Group’s
and FPL Group Capital’s actual results to differ materially from those projected
in forward-looking statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995) made by or on behalf of FPL Group, FPL Group
Capital and the Trust in this prospectus or any supplement to this prospectus,
in presentations, in response to questions or otherwise. Any statements that
express, or involve discussions as to expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always, through
the
use of words or phrases such as “will likely result,” “are expected to,” “will
continue,” “is anticipated,” “believe,” “could,” “estimated,” “may,” “plan,”
“potential,” “projection,” “target,” “outlook”) are not statements of historical
facts and may be forward-looking. Forward-looking statements involve estimates,
assumptions and uncertainties. Accordingly, any such statements are qualified
in
their entirety by reference to, and are accompanied by, the specific factors
discussed in “Risk Factors” herein and in the reports that are incorporated
herein by reference (in addition to any assumptions and other factors referred
to specifically in connection with such forward-looking statements) that could
cause FPL Group’s or FPL Group Capital’s actual results to differ materially
from those contained in forward-looking statements made by or on behalf of
FPL
Group, FPL Group Capital or the Trust.
Any
forward-looking statement speaks only as of the date on which that statement
is
made, and neither FPL Group, FPL Group Capital nor the Trust undertakes any
obligation to update any forward-looking statement to reflect events or
circumstances after the date on which that statement is made or to reflect
the
occurrence of unanticipated events. New factors emerge from time to time and
it
is not possible for management to predict all of those factors, nor can it
assess the impact of each of those factors on the business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statement.
The
issues and associated risks and uncertainties discussed in “Risk Factors” herein
and in the reports that are incorporated by reference herein are not the only
ones FPL Group or FPL Group Capital may face. Additional issues may arise or
become material as the energy industry evolves. The risks and uncertainties
associated with those additional issues could impair FPL Group’s and FPL Group
Capital’s businesses in the future.
General.
FPL
Group Capital will issue its debt securities (other than the Junior Subordinated
Debentures (as defined herein)), in one or more series, under an Indenture,
dated as of June 1, 1999, between FPL Group Capital and The Bank of New
York, as trustee. This Indenture, as it may be amended and supplemented from
time to time, is referred to in this prospectus as the “Indenture.” The Bank of
New York, as trustee under the Indenture, is
referred
to in this prospectus as the “Indenture Trustee.” These debt securities are
referred to in this prospectus as the “Offered Debt Securities.”
The
Indenture provides for the issuance from time to time of debentures, notes
or
other debt by FPL Group Capital in an unlimited amount. The Offered Debt
Securities and all other debentures, notes or other debt of FPL Group Capital
issued under the Indenture are collectively referred to in this prospectus
as
the “Debt Securities.”
This
section briefly summarizes some of the terms of the Offered Debt Securities
and
some of the provisions of the Indenture. This summary does not contain a
complete description of the Offered Debt Securities. You should read this
summary together with the Indenture and the officer’s certificates or other
documents establishing the Offered Debt Securities for a complete understanding
of all the provisions and for the definitions of some terms used in this
summary. The Indenture, the form of officer’s certificate that may be used to
establish a series of Offered Debt Securities and a form of Offered Debt
Securities have been previously filed with the SEC, and are exhibits to the
registration statement filed with the SEC of which this prospectus is a part.
In
addition, the Indenture is qualified under the Trust Indenture Act of 1939
and
is therefore subject to the provisions of the Trust Indenture Act of 1939.
You
should read the Trust Indenture Act of 1939 for a complete understanding of
its
provisions.
Each
series of Offered Debt Securities may have different terms. FPL Group Capital
will include some or all of the following information about a specific series
of
Offered Debt Securities in the prospectus supplement(s) relating to those
Offered Debt Securities:
|
(1)
|
the
title of those Offered Debt
Securities,
|
|
(2)
|
any
limit upon the aggregate principal amount of those Offered Debt
Securities,
|
|
(3)
|
the
date(s) on which FPL Group Capital will pay the principal of those
Offered
Debt Securities,
|
|
(4)
|
the
rate(s) of interest on those Offered Debt Securities, or how the
rate(s)
of interest will be determined, the date(s) from which interest will
accrue, the dates on which FPL Group Capital will pay interest and
the
record date for any interest payable on any interest payment
date,
|
|
(5)
|
the
person to whom FPL Group Capital will pay interest on those Offered
Debt
Securities on any interest payment date, if other than the person
in whose
name those Offered Debt Securities are registered at the close of
business
on the record date for that interest
payment,
|
|
(6)
|
the
place(s) at which or methods by which FPL Group Capital will make
payments
on those Offered Debt Securities and the place(s) at which or methods
by
which the registered owners of those Offered Debt Securities may
transfer
or exchange those Offered Debt Securities and serve notices and demands
to
or upon FPL Group Capital,
|
|
(7)
|
the
security registrar and any paying agent or agents for those Offered
Debt
Securities,
|
|
(8)
|
any
date(s) on which, the price(s) at which and the terms and conditions
upon
which FPL Group Capital may, at its option, redeem those Offered
Debt
Securities, in whole or in part, and any restrictions on those
redemptions,
|
|
(9)
|
any
sinking fund or other provisions or options held by the registered
owners
of those Offered Debt Securities that would obligate FPL Group Capital
to
repurchase or redeem those Offered Debt
Securities,
|
|
(10)
|
the
denominations in which FPL Group Capital may issue those Offered
Debt
Securities, if other than denominations of $1,000 and any integral
multiple of $1,000,
|
|
(11)
|
the
currency or currencies in which FPL Group Capital may pay the principal
of
or premium, if any, or interest on those Offered Debt Securities
(if other
than in U.S. dollars),
|
|
(12)
|
if
FPL Group Capital or a registered owner may elect to pay, or receive,
principal of or premium, if any, or interest on those Offered Debt
Securities in a currency other than that in which those Offered Debt
Securities are stated to be payable, the terms and conditions upon
which
that election may be made,
|
|
(13)
|
if
FPL Group Capital will, or may, pay the principal of or premium,
if any,
or interest on those Offered Debt Securities in securities or other
property, the type and amount of those securities or other property
and
the terms and conditions upon which FPL Group Capital or a registered
owner may elect to pay or receive those
payments,
|
|
(14)
|
if
the amount payable in respect of principal of or premium, if any,
or
interest on those Offered Debt Securities may be determined by reference
to an index or other fact or event ascertainable outside of the Indenture,
the manner in which those amounts will be
determined,
|
|
(15)
|
the
portion of the principal amount of those Offered Debt Securities
that FPL
Group Capital will pay upon declaration of acceleration of the maturity
of
those Offered Debt Securities, if other than the entire principal
amount
of those Offered Debt Securities,
|
|
(16)
|
any
events of default with respect to those Offered Debt Securities and
any
covenants of FPL Group Capital for the benefit of the registered
owners of
those Offered Debt Securities, other than those specified in the
Indenture,
|
|
(17)
|
the
terms, if any, pursuant to which those Offered Debt Securities may
be
exchanged for shares of capital stock or other securities of any
other
entity,
|
|
(18)
|
a
definition of “Eligible Obligations” under the Indenture with respect to
those Offered Debt Securities denominated in a currency other than
U.S.
dollars, and any other provisions for the reinstatement of FPL Group
Capital’s indebtedness in respect of those Offered Debt Securities after
their satisfaction and discharge,
|
|
(19)
|
if
FPL Group Capital will issue those Offered Debt Securities in global
form,
necessary information relating to the issuance of those Offered Debt
Securities in global form,
|
|
(20)
|
if
FPL Group Capital will issue those Offered Debt Securities as bearer
securities, necessary information relating to the issuance of those
Offered Debt Securities as bearer
securities,
|
|
(21)
|
any
limits on the rights of the registered owners of those Offered Debt
Securities to transfer or exchange those Offered Debt Securities
or to
register their transfer, and any related service
charges,
|
|
(22)
|
any
exceptions to the provisions governing payments due on legal holidays
or
any variations in the definition of business day with respect to
those
Offered Debt Securities,
|
|
(23)
|
other
than the Guarantee described under “Description of the Debt Securities
Guarantee” below, any collateral security, assurance, or guarantee for
those Offered Debt Securities, and
|
|
(24)
|
any
other terms of those Offered Debt Securities that are not inconsistent
with the provisions of the Indenture. (Indenture, Section
301).
|
FPL
Group
Capital may sell Offered Debt Securities at a discount below their principal
amount. Some of the important United States federal income tax considerations
applicable to Offered Debt Securities sold at a discount below their principal
amount may be discussed in the related prospectus supplement. In addition,
some
of
the
important United States federal income tax or other considerations applicable
to
any Offered Debt Securities that are denominated in a currency other than U.S.
dollars may be discussed in the related prospectus supplement.
Except
as
otherwise stated in the related prospectus supplement, the covenants in the
Indenture would not give registered owners of Offered Debt Securities protection
in the event of a highly-leveraged transaction involving FPL Group Capital
or
FPL Group.
Security
and Ranking.
The
Offered Debt Securities will be unsecured obligations of FPL Group Capital.
The
Indenture does not limit FPL Group Capital’s ability to provide security with
respect to other Debt Securities. All Debt Securities issued under the Indenture
will rank equally and ratably with all other Debt Securities issued under the
Indenture, except to the extent that FPL Group Capital elects to provide
security with respect to any Debt Security without providing that security
to
all outstanding Debt Securities as allowed under the Indenture. The Offered
Debt
Securities will rank senior to FPL Group Capital’s Junior Subordinated
Debentures. The Indenture does not limit FPL Group Capital’s ability to issue
other unsecured debt.
FPL
Group
Capital is a holding company that derives substantially all of its income from
its operating subsidiaries. Therefore, the Debt Securities will be effectively
subordinated to all indebtedness and other liabilities, including trade
payables, debt and preferred stock, incurred or issued by FPL Group Capital’s
subsidiaries. The Indenture does not place any limit on the amounts of
liabilities, including debt or preferred stock, that FPL Group Capital’s
subsidiaries may issue, guarantee or otherwise incur.
Payment
and Paying Agents.
Except
as stated in the related prospectus supplement, on each interest payment date
FPL Group Capital will pay interest on each Offered Debt Security to the person
in whose name that Offered Debt Security is registered as of the close of
business on the record date relating to that interest payment date. However,
on
the date that the Offered Debt Securities mature, FPL Group Capital will pay
the
interest to the person to whom it pays the principal. Also, if FPL Group Capital
has defaulted in the payment of interest on any Offered Debt Security, it may
pay that defaulted interest to the registered owner of that Offered Debt
Security:
|
(1)
|
as
of the close of business on a date that the Indenture Trustee selects,
which may not be more than 15 days or less than 10 days before the
date that FPL Group Capital proposes to pay the defaulted interest,
or
|
|
(2)
|
in
any other lawful manner that does not violate the requirements of
any
securities exchange on which that Offered Debt Security is listed
and that
the Indenture Trustee believes is acceptable. (Indenture,
Section 307).
|
Unless
otherwise stated in the related prospectus supplement, the principal, premium,
if any, and interest on the Offered Debt Securities at maturity will be payable
when such Offered Debt Securities are presented at the main corporate trust
office of The Bank of New York, as paying agent, in The City of New York. FPL
Group Capital may change the place of payment on the Offered Debt Securities,
appoint one or more additional paying agents, including itself, and remove
any
paying agent. (Indenture, Section 602).
Transfer
and Exchange.
Unless
otherwise stated in the related prospectus supplement, Offered Debt Securities
may be transferred or exchanged at the main corporate trust office of The Bank
of New York, as security registrar, in The City of New York. FPL Group Capital
may change the place for transfer and exchange of the Offered Debt Securities
and may designate one or more additional places for that transfer and
exchange.
Except
as
otherwise stated in the related prospectus supplement, there will be no service
charge for any transfer or exchange of the Offered Debt Securities. However,
FPL
Group Capital may require payment of any tax or other governmental charge in
connection with any transfer or exchange of the Offered Debt
Securities.
FPL
Group
Capital will not be required to transfer or exchange any Offered Debt Security
selected for redemption. Also, FPL Group Capital will not be required to
transfer or exchange any Offered Debt Security during a period of 15 days before
selection of Offered Debt Securities to be redeemed. (Indenture, Section
305).
Defeasance.
FPL
Group Capital may, at any time, elect to have all of its obligations discharged
with respect to all or a portion of any Debt Securities. To do so, FPL Group
Capital must irrevocably deposit with the Indenture Trustee or any paying agent,
in trust:
|
(1)
|
money
in an amount that will be sufficient to pay all or that portion of
the
principal, premium, if any, and interest due and to become due on
those
Debt Securities, on or prior to their maturity,
or
|
|
(2)
|
in
the case of a deposit made prior to the maturity of that series of
Debt
Securities,
|
|
(a)
|
direct
obligations of, or obligations unconditionally guaranteed by, the
United
States and entitled to the benefit of its full faith and credit that
do
not contain provisions permitting their redemption or other prepayment
at
the option of their issuer, and
|
|
(b)
|
certificates,
depositary receipts or other instruments that evidence a direct ownership
interest in those obligations or in any specific interest or principal
payments due in respect of those obligations that do not contain
provisions permitting their redemption or other prepayment at the
option
of their issuer, the principal of and the interest on which, when
due,
without any regard to reinvestment of that principal or interest,
will
provide money that, together with any money deposited with or held
by the
Indenture Trustee, will be sufficient to pay all or that portion
of the
principal, premium, if any, and interest due and to become due on
those
Debt Securities, on or prior to their maturity,
or
|
|
(3)
|
a
combination of (1) and (2) that will be sufficient to pay all or
that
portion of the principal, premium, if any, and interest due and to
become
due on those Debt Securities, on or prior to their maturity. (Indenture,
Section 701).
|
Limitation
on Liens.
So long
as any Debt Securities remain outstanding, FPL Group Capital will not secure
any
indebtedness with a lien on any shares of the capital stock of any of its
majority-owned subsidiaries, which shares of capital stock FPL Group Capital
now
or hereafter directly owns, unless FPL Group Capital equally secures all Debt
Securities. However, this restriction does not apply to or prevent:
|
(1)
|
any
lien on capital stock created at the time FPL Group Capital acquires
that
capital stock, or within 270 days after that time, to secure all or a
portion of the purchase price for that capital
stock,
|
|
(2)
|
any
lien on capital stock existing at the time FPL Group Capital acquires
that
capital stock (whether or not FPL Group Capital assumes the obligations
secured by the lien and whether or not the lien was created in
contemplation of the acquisition),
|
|
(3)
|
any
extensions, renewals or replacements of the liens described in (1)
and (2)
above, or of any indebtedness secured by those liens; provided,
that,
|
|
(a)
|
the
principal amount of indebtedness secured by those liens immediately
after
the extension, renewal or replacement may not exceed the principal
amount
of indebtedness secured by those liens immediately before the extension,
renewal or replacement, and
|
|
(b)
|
the
extension, renewal or replacement lien is limited to no more than
the same
proportion of all shares of capital stock as were covered by the
lien that
was extended, renewed or replaced,
or
|
|
(4)
|
any
lien arising in connection with court proceedings; provided, that,
either
|
|
(a)
|
the
execution or enforcement of that lien is effectively stayed within
30 days
after entry of the corresponding judgment (or the corresponding judgment
has been discharged within that 30 day period) and the claims secured
by
that lien are being contested in good faith by appropriate
proceedings,
|
|
(b)
|
the
payment of that lien is covered in full by insurance and the insurance
company has not denied or contested coverage,
or
|
|
(c)
|
so
long as that lien is adequately bonded, any appropriate legal proceedings
that have been duly initiated for the review of the corresponding
judgment, decree or order have not been fully terminated or the periods
within which those proceedings may be initiated have not
expired.
|
Liens
on
any shares of the capital stock of any of FPL Group Capital’s majority-owned
subsidiaries, which shares of capital stock FPL Group Capital now or hereafter
directly owns, other than liens described in (1) through (4) above, are referred
to in this prospectus as “Restricted Liens.” The foregoing limitation does not
apply to the extent that FPL Group Capital creates any Restricted Liens to
secure indebtedness that, together with all other indebtedness of FPL Group
Capital secured by Restricted Liens, does not at the time exceed 5% of FPL
Group
Capital’s Consolidated Capitalization. (Indenture, Section 608).
For
this
purpose, “Consolidated Capitalization” means the sum of:
|
(1)
|
Consolidated
Shareholders’ Equity;
|
|
(2)
|
Consolidated
Indebtedness for borrowed money (exclusive of any amounts which are
due
and payable within one year); and, without
duplication
|
|
(3)
|
any
preference or preferred stock of FPL Group Capital or any Consolidated
Subsidiary which is subject to mandatory redemption or sinking fund
provisions.
|
The
term
“Consolidated Shareholders’ Equity” as used above means the total assets of FPL
Group Capital and its Consolidated Subsidiaries less all liabilities of FPL
Group Capital and its Consolidated Subsidiaries. As used in this definition,
the
term “liabilities” means all obligations which would, in accordance with
generally accepted accounting principles, be classified on a balance sheet
as
liabilities, including without limitation:
|
(1)
|
indebtedness
secured by property of FPL Group Capital or any of its Consolidated
Subsidiaries whether or not FPL Group Capital or such Consolidated
Subsidiary is liable for the payment thereof unless, in the case
that FPL
Group Capital or such Consolidated Subsidiary is not so liable, such
property has not been included among the assets of FPL Group Capital
or
such Consolidated Subsidiary on such balance
sheet,
|
|
(2)
|
deferred
liabilities, and
|
|
(3)
|
indebtedness
of FPL Group Capital or any of its Consolidated Subsidiaries that
is
expressly subordinated in right and priority of payment to other
liabilities of FPL Group Capital or such Consolidated
Subsidiary.
|
As
used
in this definition, “liabilities” includes preference or preferred stock of FPL
Group Capital or any Consolidated Subsidiary only to the extent of any such
preference or preferred stock that is subject to mandatory redemption or sinking
fund provisions.
The
term
“Consolidated Indebtedness” means total indebtedness as shown on the
consolidated balance sheet of FPL Group Capital and its Consolidated
Subsidiaries.
The
term
“Consolidated Subsidiary,” means at any date any direct or indirect
majority-owned subsidiary whose financial statements would be consolidated
with
those of FPL Group Capital in FPL Group Capital’s consolidated financial
statements as of such date in accordance with generally accepted accounting
principles. (Indenture, Section 608).
The
foregoing limitation does not limit in any manner the ability of:
|
(1)
|
FPL
Group Capital to place liens on any of its assets other than the
capital
stock of directly held, majority-owned
subsidiaries,
|
|
(2)
|
FPL
Group Capital or FPL Group to cause the transfer of its assets or
those of
its subsidiaries, including the capital stock covered by the foregoing
restrictions,
|
|
(3)
|
FPL
Group to place liens on any of its assets,
or
|
|
(4)
|
any
of the direct or indirect subsidiaries of FPL Group Capital or FPL
Group
(other than FPL Group Capital) to place liens on any of their
assets.
|
Consolidation,
Merger, and Sale of Assets.
Under
the Indenture, FPL Group Capital may not consolidate with or merge into any
other entity or convey, transfer or lease its properties and assets
substantially as an entirety to any entity, unless:
|
(1)
|
the
entity formed by that consolidation, or the entity into which FPL
Group
Capital is merged, or the entity that acquires or leases FPL Group
Capital’s property and assets, is an entity organized and existing under
the laws of the United States, any state or the District of Columbia
and
that entity expressly assumes FPL Group Capital’s obligations on all Debt
Securities and under the Indenture,
|
|
(2)
|
immediately
after giving effect to the transaction, no event of default under
the
Indenture and no event that, after notice or lapse of time or both,
would
become an event of default under the Indenture exists,
and
|
|
(3)
|
FPL
Group Capital delivers an officer’s certificate and an opinion of counsel
to the Indenture Trustee, as provided in the Indenture. (Indenture,
Section 1101).
|
The
Indenture does not restrict FPL Group Capital in a merger in which FPL Group
Capital is the surviving entity.
Events
of Default.
Each of
the following is an event of default under the Indenture with respect to the
Debt Securities of any series:
|
(1)
|
failure
to pay interest on the Debt Securities of that series within 30 days
after
it is due,
|
|
(2)
|
failure
to pay principal or premium, if any, on the Debt Securities of that
series
when it is due,
|
|
(3)
|
failure
to comply with any other covenant in the Indenture, other than a
covenant
that does not relate to that series of Debt Securities, that continues
for
90 days after FPL Group Capital receives written notice of such failure
to
comply from the Indenture Trustee, or FPL Group Capital and the Indenture
Trustee receive written notice of such failure to comply from the
registered owners of at least 33% in principal amount of the Debt
Securities of that series,
|
|
(4)
|
certain
events of bankruptcy, insolvency or reorganization of FPL Group Capital,
and
|
|
(5)
|
any
other event of default specified with respect to the Debt Securities
of
that series. (Indenture, Section
801).
|
In
the
case of the third event of default listed above, the Indenture Trustee may
extend the grace period. In addition, if registered owners of a particular
series have given a notice of default, then registered owners of at least the
same percentage of Debt Securities of that series, together with the Indenture
Trustee, may also extend the grace period. The grace period will be
automatically extended if FPL Group Capital has initiated and is diligently
pursuing corrective action. (Indenture, Section 801). An event of default with
respect to the Debt Securities of a
particular
series will not necessarily constitute an event of default with respect to
Debt
Securities of any other series issued under the Indenture.
Remedies.
If an
event of default applicable to the Debt Securities of one or more series, but
not applicable to all outstanding Debt Securities, exists, then either the
Indenture Trustee or the registered owners of at least 33% in aggregate
principal amount of the Debt Securities of each of the affected series may
declare the principal of and accrued but unpaid interest on all the Debt
Securities of that series to be due and payable immediately. However, under
the
Indenture, some Debt Securities may provide for a specified amount less than
their entire principal amount to be due and payable upon that declaration.
These
Debt Securities are defined as “Discount Securities” in the
Indenture.
If
the
event of default is applicable to all outstanding Debt Securities, then only
the
Indenture Trustee or the registered owners of at least 33% in aggregate
principal amount of all outstanding Debt Securities of all series, voting as
one
class, and not the registered owners of any one series, may make a declaration
of acceleration. However, the event of default giving rise to the declaration
relating to any series of Debt Securities will be automatically waived, and
that
declaration and its consequences will be automatically rescinded and annulled,
if, at any time after that declaration and before a judgment or decree for
payment of the money due has been obtained:
|
(1)
|
FPL
Group Capital deposits with the Indenture Trustee a sum sufficient
to
pay:
|
|
(a)
|
all
overdue interest on all Debt Securities of that
series,
|
|
(b)
|
the
principal of and any premium on any Debt Securities of that series
that
have become due for reasons other than that declaration, and interest
that
is then due,
|
|
(c)
|
interest
on overdue interest for that series,
and
|
|
(d)
|
all
amounts due to the Indenture Trustee under the Indenture,
and
|
|
(2)
|
any
other event of default with respect to the Debt Securities of that
series
has been cured or waived as provided in the Indenture. (Indenture,
Section
802).
|
Other
than its obligations and duties in case of an event of default under the
Indenture, the Indenture Trustee is not obligated to exercise any of its rights
or powers under the Indenture at the request or direction of any of the
registered owners, unless those registered owners offer reasonable indemnity
to
the Indenture Trustee. (Indenture, Section 903). If they provide this reasonable
indemnity, the registered owners of a majority in principal amount of any series
of Debt Securities will have the right to direct the time, method and place
of
conducting any proceeding for any remedy available to the Indenture Trustee,
or
exercising any trust or power conferred on the Indenture Trustee, with respect
to the Debt Securities of that series. However, if an event of default under
the
Indenture relates to more than one series of Debt Securities, only the
registered owners of a majority in aggregate principal amount of all affected
series of Debt Securities, considered as one class, will have the right to
make
that direction. Also, the direction must not violate any law or the Indenture,
and may not expose the Indenture Trustee to personal liability in circumstances
where its indemnity would not, in the Indenture Trustee’s sole discretion, be
adequate. (Indenture, Section 812).
No
registered owner of Debt Securities of any series will have any right to
institute any proceeding under the Indenture, or any remedy under the Indenture,
unless:
|
(1)
|
that
registered owner has previously given to the Indenture Trustee written
notice of a continuing event of default with respect to the Debt
Securities of that series,
|
|
(2)
|
the
registered owners of a majority in aggregate principal amount of
the
outstanding Debt Securities of all series in respect of which an
event of
default under the Indenture exists, considered as one class, have
made
written request to the Indenture Trustee, and have offered reasonable
indemnity to the Indenture Trustee to institute that proceeding in
its own
name as trustee, and
|
|
(3)
|
the
Indenture Trustee has failed to institute any proceeding, and has
not
received from the registered owners of a majority in aggregate principal
amount of the outstanding Debt Securities of all series in respect
of
which an event of default under the Indenture exists, considered
as one
class, a direction inconsistent with that request, within 60 days
after
that notice, request and offer. (Indenture,
Section 807).
|
However,
these limitations do not apply to a suit instituted by a registered owner of
a
Debt Security for the enforcement of payment of the principal of or premium,
if
any, or interest on that Debt Security on or after the applicable due date
specified in that Debt Security. (Indenture, Section 808).
FPL
Group
Capital is required to deliver to the Indenture Trustee an annual statement
as
to its compliance with all conditions and covenants under the Indenture.
(Indenture, Section 606).
Modification
and Waiver.
Without
the consent of any registered owner of Debt Securities, FPL Group Capital and
the Indenture Trustee may amend or supplement the Indenture for any of the
following purposes:
|
(1)
|
to
provide for the assumption by any permitted successor to FPL Group
Capital
of FPL Group Capital’s obligations under the Indenture and the Debt
Securities in the case of a merger or consolidation or a conveyance,
transfer or lease of its assets substantially as an
entirety,
|
|
(2)
|
to
add covenants of FPL Group Capital or to surrender any right or power
conferred upon FPL Group Capital by the
Indenture,
|
|
(3)
|
to
add any additional events of
default,
|
|
(4)
|
to
change, eliminate or add any provision of the Indenture, provided
that if
that change, elimination or addition will materially adversely affect
the
interests of the registered owners of Debt Securities of any series
or
tranche, that change, elimination or addition will become effective
with
respect to that series or tranche
only
|
|
(a)
|
when
the required consent of the registered owners of Debt Securities
of that
series or tranche has been obtained,
or
|
|
(b)
|
when
no Debt Securities of that series or tranche remain outstanding under
the
Indenture,
|
|
(5)
|
to
provide collateral security for all but not a part of the Debt
Securities,
|
|
(6)
|
to
establish the form or terms of Debt Securities of any other series
or
tranche,
|
|
(7)
|
to
provide for the authentication and delivery of bearer securities
and the
related coupons and for other matters relating to those bearer
securities,
|
|
(8)
|
to
accept the appointment of a successor Indenture Trustee with respect
to
the Debt Securities of one or more series and to change any of the
provisions of the Indenture as necessary to provide for the administration
of the trusts under the Indenture by more than one
trustee,
|
|
(9)
|
to
add procedures to permit the use of a non-certificated system of
registration for the Debt Securities of all or any series or
tranche,
|
|
(10)
|
to
change any place where
|
|
·
|
the
principal of and premium, if any, and interest on all or any series
or
tranche of Debt Securities are
payable,
|
|
·
|
all
or any series or tranche of Debt Securities may be transferred or
exchanged, and
|
|
·
|
notices
and demands to or upon FPL Group Capital in respect of Debt Securities
and
the Indenture may be served, or
|
|
(11)
|
to
cure any ambiguity or inconsistency or to add or change any other
provisions with respect to matters and questions arising under the
Indenture, provided those changes or additions may not materially
adversely affect the interests of the registered owners of Debt Securities
of any series or tranche. (Indenture, Section
1201).
|
The
registered owners of a majority in aggregate principal amount of the Debt
Securities of all series then outstanding may waive compliance by FPL Group
Capital with certain restrictive provisions of the Indenture. (Indenture,
Section 607). The registered owners of a majority in principal amount of the
outstanding Debt Securities of any series may waive any past default under
the
Indenture with respect to that series, except a default in the payment of
principal, premium, if any, or interest and a default with respect to certain
restrictive covenants or provisions of the Indenture that cannot be modified
or
amended without the consent of the registered owner of each outstanding Debt
Security of that series affected. (Indenture, Section 813).
In
addition to any amendments described above, if the Trust Indenture Act of 1939
is amended after the date of the Indenture in a way that requires changes to
the
Indenture or in a way that permits changes to, or the elimination of, provisions
that were previously required by the Trust Indenture Act of 1939, the Indenture
will be deemed to be amended to conform to that amendment of the Trust Indenture
Act of 1939 or to make those changes, additions or eliminations. FPL Group
Capital and the Indenture Trustee may, without the consent of any registered
owners, enter into supplemental indentures to make that amendment. (Indenture,
Section 1201).
Except
for any amendments described above, the consent of the registered owners of
a
majority in aggregate principal amount of the Debt Securities of all series
then
outstanding, considered as one class, is required for all other modifications
to
the Indenture. However, if less than all of the series of Debt Securities
outstanding are directly affected by a proposed supplemental indenture, then
the
consent only of the registered owners of a majority in aggregate principal
amount of outstanding Debt Securities of all directly affected series,
considered as one class, is required. But, if FPL Group Capital issues any
series of Debt Securities in more than one tranche and if the proposed
supplemental indenture directly affects the rights of the registered owners
of
Debt Securities of less than all of those tranches, then the consent only of
the
registered owners of a majority in aggregate principal amount of the outstanding
Debt Securities of all directly affected tranches, considered as one class,
will
be required. However, none of those amendments or modifications
may:
|
(1)
|
change
the dates on which the principal of or interest on a Debt Security
is due
without the consent of the registered owner of that Debt
Security,
|
|
(2)
|
reduce
any Debt Security’s principal amount or rate of interest (or the amount of
any installment of that interest) or change the method of calculating
that
rate without the consent of the registered owner of that Debt
Security,
|
|
(3)
|
reduce
any premium payable upon the redemption of a Debt Security without
the
consent of the registered owner of that Debt
Security,
|
|
(4)
|
change
the currency (or other property) in which a Debt Security is payable
without the consent of the registered owner of that Debt
Security,
|
|
(5)
|
impair
the right to sue to enforce payments on any Debt Security on or after
the
date that it states that the payment is due (or, in the case of
redemption, on or after the redemption date) without the consent
of the
registered owner of that Debt
Security,
|
|
(6)
|
reduce
the percentage in principal amount of the outstanding Debt Security
of any
series or tranche whose owners must consent to an amendment, supplement
or
waiver without the consent of the registered owner of each outstanding
Debt Security of that series or
tranche,
|
|
(7)
|
reduce
the requirements for quorum or voting of any series or tranche without
the
consent of the registered owner of each outstanding Debt Security
of that
series or tranche, or
|
|
(8)
|
modify
certain of the provisions of the Indenture relating to supplemental
indentures, waivers of certain covenants and waivers of past defaults
with
respect to the Debt Securities of any series or tranche, without
the
consent of the registered owner of each outstanding Debt Security
affected
by the modification.
|
A
supplemental indenture that changes or eliminates any provision of the Indenture
that has expressly been included only for the benefit of one or more particular
series or tranches of Debt Securities, or that modifies the rights of the
registered owners of Debt Securities of that series or tranche with respect
to
that provision, will not affect the rights under the Indenture of the registered
owners of the Debt Securities of any other series or tranche. (Indenture,
Section 1202).
The
Indenture provides that, in order to determine whether the registered owners
of
the required principal amount of the outstanding Debt Securities have given
any
request, demand, authorization, direction, notice, consent or waiver under
the
Indenture, or whether a quorum is present at the meeting of the registered
owners of Debt Securities, Debt Securities owned by FPL Group Capital or any
other obligor upon the Debt Securities or any affiliate of FPL Group Capital
or
of that other obligor (unless FPL Group Capital, that affiliate or that obligor
owns all Debt Securities outstanding under the Indenture, determined without
regard to this provision) will be disregarded and deemed not to be outstanding.
(Indenture, Section 101).
If
FPL
Group Capital solicits any action under the Indenture from registered owners
of
Debt Securities, FPL Group Capital may, at its option, by signing a written
request to the Indenture Trustee, fix in advance a record date for determining
the registered owners of Debt Securities entitled to take that action. However,
FPL Group Capital will not be obligated to do this. If FPL Group Capital fixes
such a record date, that action may be taken before or after that record date,
but only the registered owners of record at the close of business on that record
date will be deemed to be registered owners of Debt Securities for the purposes
of determining whether registered owners of the required proportion of the
outstanding Debt Securities have authorized that action. For these purposes,
the
outstanding Debt Securities will be computed as of the record date. Any action
of a registered owner of any Debt Security under the Indenture will bind every
future registered owner of that Debt Security, or any Debt Security replacing
that Debt Security, with respect to anything that the Indenture Trustee or
FPL
Group Capital do, fail to do, or allow to be done in reliance on that action,
whether or not that action is noted upon that Debt Security. (Indenture, Section
104).
Resignation
and Removal of Indenture Trustee.
The
Indenture Trustee may resign at any time with respect to any series of Debt
Securities by giving written notice of its resignation to FPL Group Capital.
Also, the registered owners of a majority in principal amount of the outstanding
Debt Securities of one or more series of Debt Securities may remove the
Indenture Trustee at any time with respect to the Debt Securities of that
series, by delivering an instrument evidencing this action to the Indenture
Trustee and FPL Group Capital. The resignation or removal of the Indenture
Trustee and the appointment of a successor trustee will not become effective
until a successor trustee accepts its appointment.
Except
with respect to an Indenture Trustee appointed by the registered owners of
Debt
Securities, the Indenture Trustee will be deemed to have resigned and the
successor will be deemed to have been appointed as trustee in accordance with
the Indenture if:
|
(1)
|
no
event of default under the Indenture or event that, after notice
or lapse
of time, or both, would become an event of default under the Indenture
exists, and
|
|
(2)
|
FPL
Group Capital has delivered to the Indenture Trustee a resolution
of its
Board of Directors appointing a successor trustee and that successor
trustee has accepted that appointment in accordance with the terms
of the
Indenture. (Indenture, Section
910).
|
Notices.
Notices
to registered owners of Debt Securities will be sent by mail to the addresses
of
those registered owners as they appear in the security register for those Debt
Securities. (Indenture, Section 106).
Title.
FPL
Group Capital, the Indenture Trustee, and any agent of FPL Group Capital or
the
Indenture Trustee, may treat the person in whose name a Debt Security is
registered as the absolute owner of that Debt Security, whether or not that
Debt
Security is overdue, for the purpose of making payments and for all other
purposes, regardless of any notice to the contrary. (Indenture, Section
308).
Governing
Law.
The
Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York, without regard to New York’s
conflict of law principles, except to the extent that the law of any other
jurisdiction is mandatorily applicable. (Indenture, Section 112).
General.
This
section briefly summarizes some of the provisions of the Guarantee Agreement,
dated as of June 1, 1999, between FPL Group and The Bank of New York, as
Guarantee Trustee. The Guarantee Agreement was executed for the benefit of
the
Indenture Trustee, which holds the Guarantee Agreement for the benefit of
registered owners of the Debt Securities covered by the Guarantee Agreement.
This summary does not contain a complete description of the Guarantee Agreement.
You should read this summary together with the Guarantee Agreement for a
complete understanding of all the provisions. The Guarantee Agreement has been
previously filed with the SEC and is an exhibit to the registration statement
filed with the SEC of which this prospectus is a part. In addition, the
Guarantee Agreement is qualified as an indenture under the Trust Indenture
Act
of 1939 and is therefore subject to the provisions of the Trust Indenture Act
of
1939. You should read the Trust Indenture Act of 1939 for a complete
understanding of its provisions.
Under
the
Guarantee Agreement, FPL Group absolutely, irrevocably and unconditionally
guarantees the prompt and full payment, when due and payable (including upon
acceleration or redemption), of the principal, interest and premium, if any,
on
the Debt Securities that are covered by the Guarantee Agreement to the
registered owners of those Debt Securities, according to the terms of those
Debt
Securities and the Indenture. Pursuant to the Guarantee Agreement, all of the
Debt Securities are covered by the Guarantee Agreement except Debt Securities
that by their terms are expressly not entitled to the benefit of the Guarantee
Agreement. All of the Offered Debt Securities will be covered by the Guarantee
Agreement. This guarantee is referred to in this prospectus as the “Guarantee.”
FPL Group is only required to make these payments if FPL Group Capital fails
to
pay or provide for punctual payment of any of those amounts on or before the
expiration of any applicable grace periods. (Guarantee Agreement, Section 5.01).
In the Guarantee Agreement, FPL Group has waived its right to require the
Guarantee Trustee, the Indenture Trustee or the registered owners of Debt
Securities covered by the Guarantee Agreement to exhaust their remedies against
FPL Group Capital prior to bringing suit against FPL Group. (Guarantee
Agreement, Section 5.06).
The
Guarantee is a guarantee of payment when due (i.e., the guaranteed party may
institute a legal proceeding directly against FPL Group to enforce its rights
under the Guarantee Agreement without first instituting a legal proceeding
against any other person or entity). The Guarantee is not a guarantee of
collection. (Guarantee Agreement, Section 5.01).
Except
as
otherwise stated in the related prospectus supplement, the covenants in the
Guarantee Agreement would not give registered owners of the Debt Securities
covered by the Guarantee Agreement protection in the event of a highly-leveraged
transaction involving FPL Group.
Security
and Ranking.
The
Guarantee is an unsecured obligation of FPL Group and will rank equally and
ratably with all other unsecured and unsubordinated indebtedness of FPL Group.
The Guarantee will rank senior to the Preferred Trust Securities Guarantee,
the
Subordinated Guarantee and FPL Group’s Junior Subordinated Debentures (each as
defined below) and FPL Group’s guarantee of FPL Group Capital’s preferred stock.
There is no limit on the amount of other indebtedness, including guarantees,
that FPL Group may incur or issue.
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. Therefore, the Guarantee is effectively subordinated
to
all indebtedness and other liabilities, including trade payables, debt and
preferred stock, incurred or issued by FPL Group’s subsidiaries. Neither the
Indenture nor the Guarantee Agreement places any limit on the amount of
liabilities, including debt or preferred stock, that FPL Group’s subsidiaries
may issue, guarantee or otherwise incur.
Events
of Default.
An event
of default under the Guarantee Agreement will occur upon the failure of FPL
Group to perform any of its payment obligations under the Guarantee Agreement.
(Guarantee Agreement, Section 1.01). The registered owners of a majority of
the aggregate principal amount of the outstanding Debt Securities covered by
the
Guarantee Agreement have the right to:
|
(1)
|
direct
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee under the Guarantee Agreement,
or
|
|
(2)
|
direct
the exercise of any trust or power conferred upon the Guarantee Trustee
under the Guarantee Agreement. (Guarantee Agreement,
Section 3.01).
|
The
Guarantee Trustee must give notice of any event of default under the Guarantee
Agreement known to the Guarantee Trustee to the registered owners of Debt
Securities covered by the Guarantee Agreement within 90 days after the
occurrence of that event of default, in the manner and to the extent provided
in
subsection (c) of Section 313 of the Trust Indenture Act of 1939, unless such
event of default has been cured or waived prior to the giving of such notice.
(Guarantee Agreement, Section 2.07). The registered owners of all outstanding
Debt Securities may waive any past event of default and its consequences.
(Guarantee Agreement, Section 2.06).
The
Guarantee Trustee, the Indenture Trustee and the registered owners of Debt
Securities covered by the Guarantee Agreement have all of the rights and
remedies available under applicable law and may sue to enforce the terms of
the
Guarantee Agreement and to recover damages for the breach of the Guarantee
Agreement. The remedies of each of the Guarantee Trustee, the Indenture Trustee
and the registered owners of Debt Securities covered by the Guarantee Agreement,
to the extent permitted by law, are cumulative and in addition to any other
remedy now or hereafter existing at law or in equity. At the option of any
of
the Guarantee Trustee, the Indenture Trustee or the registered owners of Debt
Securities covered by the Guarantee Agreement, that person or entity may join
FPL Group in any lawsuit commenced by that person or entity against FPL Group
Capital with respect to any obligations under the Guarantee Agreement. Also,
that person or entity may recover against FPL Group in that lawsuit, or in
any
independent lawsuit against FPL Group, without first asserting, prosecuting
or
exhausting any remedy or claim against FPL Group Capital. (Guarantee Agreement,
Section 5.06).
FPL
Group
is required to deliver to the Guarantee Trustee an annual statement as to its
compliance with all conditions under the Guarantee Agreement. (Guarantee
Agreement, Section 2.04).
Modification.
FPL
Group and the Guarantee Trustee may, without the consent of any registered
owner
of Debt Securities covered by the Guarantee Agreement, agree to any changes
to
the Guarantee Agreement that do not materially adversely affect the rights
of
registered owners. The Guarantee Agreement also may be amended with the prior
approval of the registered owners of a majority in aggregate principal amount
of
all outstanding Debt Securities covered by the Guarantee Agreement. However,
the
right of any registered owner of Debt Securities covered by the Guarantee
Agreement to receive payment under the Guarantee Agreement on the due date
of
the Debt Securities held by that registered owner, or to institute suit for
the
enforcement of that payment on or after that due date, may not be impaired
or
affected without the consent of that registered owner. (Guarantee Agreement,
Section 6.01).
Termination
of the Guarantee Agreement.
The
Guarantee Agreement will terminate and be of no further force and effect upon
full payment of all Debt Securities covered by the Guarantee Agreement.
(Guarantee Agreement, Section 5.05).
Governing
Law.
The
Guarantee Agreement will be governed by and construed in accordance with the
laws of the State of New York, without regard to conflict of laws principles
thereunder, except to the extent that the law of any other jurisdiction is
mandatorily applicable. (Guarantee Agreement, Section 5.07).
General.
The
following statements describing FPL Group’s common stock are not intended to be
a complete description. For additional information, please see FPL Group’s
Restated Articles of Incorporation (“Charter”) and its bylaws, which set forth
the terms of the common stock. Please also see the Restated Articles of
Incorporation of Florida Power & Light Company, and the Mortgage and Deed of
Trust, dated as of January 1, 1944, between Florida Power & Light
Company and Deutsche Bank Trust Company Americas, as trustee, as amended and
supplemented (the “Mortgage”), which contain restrictions which may limit the
ability of Florida Power & Light Company to pay dividends to FPL Group. Each
of these documents has been previously filed with the SEC and are exhibits
to
the registration statement filed with the SEC of which this prospectus is a
part. Reference is also made to the laws of the State of Florida.
FPL
Group’s authorized capital stock consists of 400,000,000 shares of common stock,
$.01 par value, and 100,000,000 shares of serial preferred stock, $.01 par
value. As of April 30, 2004,184,950,655 shares of common stock were issued
and outstanding and no shares of serial preferred stock were issued and
outstanding. See “Preferred Share Purchase Rights” below. The FPL Group common
stock has no preemptive, subscription or conversion rights, and there are no
redemption or sinking fund provisions applicable thereto. The outstanding shares
of common stock are, and when issued the shares offered hereby will be, fully
paid and nonassessable.
All
outstanding FPL Group common stock is listed on the NYSE and trades under the
symbol “FPL.” The registrar and transfer agent for the FPL Group common stock is
Computershare Investor Services, LLC.
A
number
of provisions that are in FPL Group’s Charter and bylaws will make it difficult
for another company to acquire FPL Group and for a holder of FPL Group common
stock to receive any related takeover premium for its shares. See “—Voting
Rights and Non-Cumulative Voting”, “—Preferred Share Purchase Rights” and
“Description of Preferred Stock—FPL Group Preferred Stock” below.
Dividend
Rights.
Each
share of common stock is entitled to participate equally with respect to
dividends declared on the common stock out of funds legally available for the
payment thereof.
The
Charter of FPL Group does not limit the dividends that can be paid on the common
stock. However, as a practical matter, the ability of FPL Group to pay dividends
on the common stock is dependent upon dividends paid to it by its subsidiaries,
primarily Florida Power & Light Company. Florida Power & Light Company’s
ability to pay dividends is limited by restrictions contained in Florida Power
& Light Company’s Restated Articles of Incorporation and in the Mortgage.
However, these restrictions do not currently limit Florida Power & Light
Company’s ability to pay dividends to FPL Group from its retained
earnings.
FPL
Group
Capital has issued junior subordinated debentures in connection with preferred
trust securities previously issued by FPL Group Capital Trust I, which junior
subordinated debentures are guaranteed by FPL Group. FPL Group Capital has
a
right, from time to time, to delay interest payments on its outstanding junior
subordinated debentures for an extension period of up to 20 consecutive
quarters. FPL Group and/or FPL Group Capital may issue, from time to time,
additional junior subordinated debentures in connection with the preferred
trust
securities described in this prospectus. FPL Group and/or FPL Group Capital
may
have a similar right to delay interest payments for those additional junior
subordinated debentures. If FPL Group Capital and/or FPL Group exercises any
right to delay an interest payment, FPL Group would not be able to pay dividends
on its common stock or preferred stock during the extension period with certain
limited exceptions. For a further description of FPL Group Capital’s and FPL
Group’s rights to delay interest payments, see “Description of Preferred Trust
Securities—Distributions” and “Description of the Junior Subordinated Debentures
and the Subordinated Guarantee—Option to Extend Interest Payment Period” in this
prospectus.
In
addition, FPL Group has issued stock purchase contracts, as a component of
stock
purchase units, which require FPL Group to make periodic contract adjustment
payments to the holders of the stock purchase units. FPL Group has a right
to
delay these payments during the term of the stock purchase contracts. FPL Group
may issue, from time to time, additional stock purchase contracts as a component
of stock purchase units. FPL Group may have a similar right to delay contract
adjustment payments on these additional stock purchase contracts. If FPL Group
exercises any right to delay a contract adjustment payment, it will not be
able
to pay dividends on its common stock or preferred stock during the period such
payments are delayed with certain limited exceptions.
Voting
Rights and Non-Cumulative Voting.
In
general, the holders of FPL Group common stock are entitled to one vote per
share for the election of directors and for other corporate purposes. The
Charter:
|
(1)
|
permits
the shareholders to remove a director only for cause and only by
the
affirmative vote of 75% in voting power of the outstanding shares
of
common stock and other outstanding voting stock, voting as a
class;
|
|
(2)
|
provides
that a vacancy on the Board of Directors may be filled only by the
remaining directors;
|
|
(3)
|
permits
shareholders to take action only at an annual meeting, or a special
meeting duly called by certain officers, the Board of Directors or
the
holders of a majority in voting power of the outstanding shares of
voting
stock entitled to vote on the matter;
|
|
(4)
|
requires
the affirmative vote of 75% in voting power of the outstanding shares
of
voting stock to approve certain Business Combinations (as defined
below)
with an Interested Shareholder (as defined below) or its affiliate,
unless
approved by a majority of the Continuing Directors (as defined below)
or,
in certain cases, unless certain minimum price and procedural requirements
are met; and
|
|
(5)
|
requires
the affirmative vote of 75% in voting power of the outstanding shares
of
voting stock to amend the bylaws or to amend certain provisions of
the
Charter including those provisions discussed in (1) through (4)
above.
|
Such
provisions may have significant effects on the ability of the shareholders
to
change the composition of an incumbent Board of Directors or to benefit from
certain transactions which are opposed by an incumbent Board of
Directors.
The
term
“Interested Shareholder” is defined in the Charter to include a security holder
who owns 10% or more in voting power of the outstanding shares of voting stock,
and the term “Continuing Director” is defined in the Charter to include any
director who is not an affiliate of an Interested Shareholder. The above
provisions dealing with Business Combinations involving FPL Group and an
Interested Shareholder may discriminate against a security holder who becomes
an
Interested Shareholder by reason of the beneficial ownership of such amount
of
common or other voting stock. The term “Business Combination” is defined in the
Charter to include:
|
(1)
|
any
merger or consolidation of FPL Group or any direct or indirect
majority-owned subsidiary with (a) an Interested Shareholder or (b)
any other corporation which is, or after such merger or consolidation
would be, an affiliate of an Interested
Shareholder;
|
|
(2)
|
any
sale, lease, exchange, mortgage, pledge, transfer or other disposition
in
one transaction or a series of transactions to or with any Interested
Shareholder or any affiliate of an Interested Shareholder of assets
of FPL
Group or any direct or indirect majority-owned subsidiary having
an
aggregate fair market value of $10,000,000 or
more;
|
|
(3)
|
the
issuance or transfer by FPL Group or any direct or indirect majority-owned
subsidiary in one transaction or a series of transactions of any
securities of FPL Group or any subsidiary to any Interested Shareholder
or
any affiliate of any Interested Shareholder in exchange for cash,
securities or other property, or a combination thereof, having an
aggregate fair market value of $10,000,000 or
more;
|
|
(4)
|
the
adoption of any plan or proposal for the liquidation or dissolution
of FPL
Group proposed by or on behalf of an Interested Shareholder or an
affiliate of an Interested Shareholder; or
|
|
(5)
|
any
reclassification of securities, including any reverse stock split,
or
recapitalization, of FPL Group, or any merger or consolidation of
FPL
Group with any of its direct or indirect majority-owned subsidiaries
or
any other transaction which has the direct or indirect effect of
increasing the proportionate share of the outstanding shares of any
class
of equity or convertible securities of FPL Group or any direct or
indirect
wholly-owned subsidiary which is directly or indirectly owned by
any
Interested Shareholder or any affiliate of any Interested
Shareholder.
|
The
holders of common stock do not have cumulative voting rights, and therefore
the
holders of more than 50% of a quorum (majority) of the outstanding shares of
common stock can elect all of FPL Group’s directors. Unless otherwise provided
in the Charter or the bylaws or in accordance with applicable law, the
affirmative vote of a majority of the total number of shares represented at
a
meeting and entitled to vote is required for shareholder action on a matter.
Voting rights for the election of directors or otherwise, if any, for any series
of the serial preferred stock, will be established by the Board of Directors
when such series is issued. See “Description of Preferred Stock—FPL Group
Preferred Stock.”
Liquidation
Rights.
After
satisfaction of creditors and payments due the holders of serial preferred
stock, if any, the holders of common stock are entitled to share ratably in
the
distribution of all remaining assets. See “Description of Preferred
Stock.”
Preferred
Share Purchase Rights.
The
following statements describing FPL Group’s preferred share purchase rights
(each, a “Right”) are not intended to be a complete description. For additional
information, please see the form of Rights Agreement, dated as of July 1,
1996, between FPL Group and Computershare Investor Services, LLC, as successor
Rights Agent, as amended, which sets forth the terms of the Rights. The Rights
Agreement and amendments thereto have been previously filed with the SEC and
are
exhibits to the registration statement filed with SEC of which this prospectus
is a part.
On
June 17, 1996, FPL Group’s Board of Directors declared a dividend of one
Right for each outstanding share of common stock. Thereafter, until the
Distribution Date (as defined below), FPL Group will issue one Right with each
newly issued share of common stock. Each Right (prior to the expiration or
redemption of the Rights) will entitle the holder thereof to purchase from
FPL
Group one-hundredth of a share of FPL Group’s Series A Junior Participating
Preferred Stock, $.01 par value (“Junior Preferred Shares”), at an exercise
price of $120 per Right (“Purchase Price”), subject to adjustment. Until the
Distribution Date, the Rights are represented by the shares of common stock,
and
are not exercisable or transferable apart from the common stock. The
“Distribution Date” is the earlier to occur of:
|
(1)
|
the
tenth day after the public announcement that a person or group has
acquired beneficial ownership of 10% or more of the common stock,
or
|
|
(2)
|
the
tenth business day after a person commences, or announces an intention
to
commence, a tender or exchange offer, the consummation of which would
result in the beneficial ownership by a person or group of 10% or
more of
the common stock. At any time before a person or group becomes a
10%
holder, the Board of Directors may extend the 10-day
period.
|
Separate
certificates evidencing the Rights will be mailed to holders of the common
stock
as of the close of business on the Distribution Date. The Rights are exercisable
at any time after the Distribution Date, unless earlier redeemed, or exchanged,
and could then begin trading separately from the common stock. The Rights do
not
have any voting rights and are not entitled to dividends.
If
a
person or group becomes a 10% holder, each Right not owned by the 10% holder
would become exercisable for the number of shares of common stock which, at
that
time, would have a market value of two times the exercise price of the Right.
In
the event that FPL Group is acquired in a merger or other business combination
transaction, or 50% or more of FPL Group’s assets or earning power are sold or
otherwise transferred, after a person
or
group has become a 10%
holder, each Right will entitle its holder to purchase, at the exercise price
of
the Right, that number of shares of common stock of the acquiring company which
at the time of such transaction would have a market value of two times the
exercise price of the Right.
The
Rights are redeemable by FPL Group’s Board of Directors in whole, but not in
part, at $.01 per Right at any time prior to the time that a person or group
acquires beneficial ownership of 10% or more of the outstanding common stock.
The Rights will expire on June 30, 2006 (unless the expiration date is
extended or the Rights are earlier redeemed or exchanged as described
below).
The
Purchase Price, and the number of Junior Preferred Shares or other securities
or
property issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution:
|
(1)
|
in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Junior Preferred Shares,
|
|
(2)
|
as
a result of the grant to holders of Junior Preferred Shares of certain
rights or warrants to subscribe for or purchase Junior Preferred
Shares at
a price, or securities convertible into Junior Preferred Shares with
a
conversion price, at less than the current market price of Junior
Preferred Shares, or
|
|
(3)
|
as
a result of the distribution to holders of Junior Preferred Shares
of
evidences of indebtedness or assets (excluding regular periodic cash
dividends or dividends payable in Junior Preferred Shares) or of
subscription rights or warrants (other than those referred to
above).
|
With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in the Purchase
Price. The number of Rights and the number of Junior Preferred Shares
purchasable upon exercise of each Right are also subject to adjustment in the
event of a stock split, subdivision, consolidation, combination or common stock
dividend on the common stock prior to the Distribution Date.
The
Board
of Directors of FPL Group may exchange the Rights at an exchange ratio of one
share of common stock per Right at any time that is:
|
(1)
|
after
the acquisition by a person or group of affiliated or associated
persons
of beneficial ownership of 10% or more of the outstanding common
stock;
and
|
|
(2)
|
before
the acquisition by a person or group of 50% or more of the outstanding
common stock.
|
The
Rights have anti-takeover effects. The Rights will cause substantial dilution
to
a person or group that attempts to acquire FPL Group without conditioning the
offer on the redemption of the Rights or on the acquisition of a certain number
of Rights. The Rights beneficially owned by that person or group may become
null
and void. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors of FPL Group, since the Rights
may be redeemed by FPL Group at $.01 per Right prior to the time that a person
or group has acquired beneficial ownership of 10% or more of the common
stock.
The
Junior Preferred Shares purchasable upon exercise of the Rights will be entitled
to cumulative quarterly dividends in preference to the common stock at a rate
per share equal to the greater of $10 and 100 times the dividend declared on
the
common stock for such quarter. In the event of any merger, consolidation or
other transaction in which the shares of common stock are exchanged, each Junior
Preferred Share will be entitled to receive 100 times the amount and type of
consideration received per share of common stock. In the event of a liquidation
of FPL Group, the holders of Junior Preferred Shares will be entitled to receive
in preference to the common stock the greater of $100 per share and 100 times
the payment made per share of common stock. FPL Group has the right to issue
other serial preferred stock ranking prior to the Junior Preferred Shares with
respect to dividend and liquidation preferences. The Junior Preferred Shares
will be redeemable after June 30, 2006, at FPL Group’s option, in whole or
in part, at a redemption price per share equal to the greater of
|
(1)
|
the
per share Purchase Price, and
|
|
(2)
|
the
then current market price of a Junior Preferred
Share.
|
Each
Junior Preferred Share will have 100 votes on all matters submitted to a vote
of
the shareholders of FPL Group, voting together with the common stock. The rights
of the Junior Preferred Shares as to dividends, liquidation, redemption and
voting, and in the event of mergers and consolidations, are protected by
customary anti-dilution provisions. Because of the nature of the dividend,
liquidation, redemption and voting rights of the Junior Preferred Shares, the
value of the interest in a Junior Preferred Share purchasable upon the exercise
of each Right should approximate the value of one share of common
stock.
The
Board
of Directors of FPL Group may amend the Rights Agreement and the Rights, without
the consent of the holders of the Rights. However, any amendment adopted after
a
person or group becomes a 10% holder may not adversely affect the interests of
holders of Rights. The 10% holder level discussed above is subject to certain
exceptions.
General.
The
following statements describing FPL Group’s preferred stock and FPL Group
Capital’s preferred stock are not intended to be a complete description. For
additional information, please see FPL Group’s Charter and its bylaws, and FPL
Group Capital’s Articles of Incorporation (“FPL Group Capital Charter”) and its
bylaws, respectively. You should read this summary together with the articles
of
amendment to FPL Group’s Charter or FPL Group Capital’s Charter, as applicable,
which will describe the terms of any preferred stock to be offered hereby,
for a
complete understanding of all the provisions. With respect to the FPL Group
preferred stock and the guarantee of the FPL Group Capital preferred stock,
please also see the Restated Articles of Incorporation of Florida Power &
Light Company, and the Mortgage, which contain restrictions which may limit
the
ability of Florida Power & Light Company to pay dividends to FPL Group. Each
of these documents has been previously filed with the SEC and each is an exhibit
to the registration statement filed with the SEC of which this prospectus is
a
part. Reference is also made to the laws of the State of Florida.
FPL
Group Preferred Stock.
FPL
Group may issue one or more series of its serial preferred stock, $.01 par
value, without the approval of its shareholders.
Some
terms of a series may differ from those of another series. A prospectus
supplement will describe the terms of any preferred stock being offered. These
terms will also be described in articles of amendment to FPL Group’s Charter.
These terms will include any of the following that apply to that
series:
|
(1)
|
the
title of that series of preferred
stock,
|
|
(2)
|
the
number of shares in the series,
|
|
(3)
|
the
dividend rate, or how such rate will be determined, and the dividend
payment dates for the series,
|
|
(4)
|
whether
the series will be listed on a securities
exchange,
|
|
(5)
|
the
date or dates on which the series of preferred stock may be redeemed
at
the option of FPL Group and any restrictions on such
redemptions,
|
|
(6)
|
any
sinking fund or other provisions that would obligate FPL Group to
repurchase, redeem or retire the series of preferred
stock,
|
|
(7)
|
the
amount payable on the series of preferred stock in case of the
liquidation, dissolution or winding up of FPL Group and any additional
amount, or method of determining such amount, payable in case any
such
event is voluntary,
|
|
(8)
|
any
rights to convert the shares of the series of preferred stock into
shares
of another series or into shares of any other class of capital
stock,
|
|
(9)
|
the
voting rights, if any; and
|
|
(10)
|
any
other terms that are not inconsistent with the provisions of the
Charter.
|
In
some
cases, the issuance of preferred stock could make it difficult for another
company to acquire FPL Group and make it harder to remove current
management. See also “Description of Common Stock.”
If
FPL
Group Capital or FPL Group exercise a right to delay interest payments on junior
subordinated debentures or if FPL Group delays making contract adjustment
payments with respect to stock purchase contracts, FPL Group will not be able
to
pay dividends on its common or preferred stock during the periods such payments
are delayed with certain limited exceptions. See “Description of Common
Stock—Dividend Rights” in this prospectus.
Shares
of
preferred stock offered hereby by FPL Group will, when issued, be fully paid
and
non-assessable.
FPL
Group Capital Preferred Stock.
FPL
Group Capital may issue one or more series of serial preferred stock without
the
approval of its shareholders. The preferred stock of FPL Group Capital will
be
fully and unconditionally guaranteed by FPL Group as described
below.
Some
terms of a series may differ from those of another series. A prospectus
supplement will describe the terms of any preferred stock being offered. These
terms will also be described in articles of amendment to FPL Group Capital’s
Charter. These terms will include any of the following that apply to that
series:
|
(1)
|
the
title of that series of preferred
stock,
|
|
(2)
|
the
number of shares in the series,
|
|
(3)
|
the
dividend rate, or how such rate will be determined, and the dividend
payment dates for the series,
|
|
(4)
|
whether
the series will be listed on a securities
exchange,
|
|
(5)
|
the
date or dates on which the series of preferred stock may be redeemed
at
the option of FPL Group Capital and any restrictions on such
redemptions,
|
|
(6)
|
any
sinking fund or other provisions that would obligate FPL Group Capital
to
repurchase, redeem or retire the series of preferred
stock,
|
|
(7)
|
the
amount payable on the series of preferred stock in case of the
liquidation, dissolution or winding up of FPL Group Capital and any
additional amount, or method of determining such amount, payable
in case
any such event is voluntary,
|
|
(8)
|
any
rights to convert the shares of the series of preferred stock into
shares
of another series or into shares of any other class of capital stock,
|
|
(9)
|
the
voting rights, if any, and
|
|
(10)
|
any
other terms that are not inconsistent with the provisions of the
FPL Group
Capital Charter.
|
If
FPL
Group Capital exercises a right to delay interest payments on junior
subordinated debentures, FPL Group Capital will not be able to pay dividends
on
its common or preferred stock during the periods such payments are delayed
with
certain limited exceptions. See “Description of Common Stock—Dividend Rights” in
this prospectus.
Shares
of
preferred stock offered hereby by FPL Group Capital will, when issued, be fully
paid and non-assessable.
FPL
Group Guarantee of FPL Group Capital Preferred Stock. FPL
Group
will fully, unconditionally and irrevocably guarantee the payment of accumulated
and unpaid dividends, and payments due on liquidation or redemption, as and
when
due, regardless of any defense, right of set-off or counterclaim that FPL Group
Capital may have or assert. FPL Group’s guarantee of FPL Group Capital’s
preferred stock will be an unsecured obligation of FPL Group and will rank
(1)
subordinate and junior in right of payment to all other liabilities of FPL
Group
(except those made pari passu or subordinate by their terms), (2) equal in
right
of payment with the most senior preferred or preference stock that may be issued
by FPL Group and with any other guarantee that may be entered into by FPL Group
in respect of any preferred or preference stock of any affiliate of FPL Group,
and (3) senior to FPL Group’s common stock. A prospectus supplement will
describe the terms of FPL Group’s guarantee of FPL Group Capital’s preferred
stock. The description will not necessarily be complete, and reference will
be
made to the preferred stock guarantee agreement.
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. Therefore, the FPL Group guarantee of FPL Group Capital
preferred stock will be effectively subordinated to all indebtedness and other
liabilities, including trade payables, debt and preferred stock, incurred or
issued by FPL Group’s subsidiaries. FPL Group’s guarantee of FPL Group Capital
preferred stock does not place any limit on the amount of liabilities, including
debt or preferred stock, that FPL Group’s subsidiaries may issue, guarantee or
otherwise incur.
AND
STOCK PURCHASE UNITS
FPL
Group
may issue stock purchase contracts, including contracts that obligate holders
to
purchase from FPL Group, and FPL Group to sell to these holders, a specified
number of shares of common stock at a future date or dates. The consideration
per share of common stock may be fixed at the time the stock purchase contracts
are issued or may be determined by reference to a specific formula set forth
in
the stock purchase contracts. The stock purchase contracts may be issued
separately or as a part of stock purchase units consisting of a stock purchase
contract and either debt securities of FPL Group Capital (including, but not
limited to, Debt Securities), preferred trust securities of one or more FPL
Group subsidiary trusts or other subsidiary entities (including, but not limited
to, Preferred Trust Securities (as defined herein)), or debt securities of
third
parties including, but not limited to, U.S. Treasury securities, that would
secure the holders’ obligations to purchase the common stock under the stock
purchase contracts. The stock purchase contracts may require FPL Group to make
periodic payments to the holders of some or all of the stock purchase units
or
vice versa, and such payments may be unsecured or prefunded on some basis.
The
stock purchase contracts may require holders to secure their obligations under
these stock purchase contracts in a specified manner.
A
prospectus supplement will describe the terms of any stock purchase contracts
or
stock purchase units being offered. The description in the prospectus supplement
will not necessarily be complete, and reference will be made to the stock
purchase contracts. Material United States federal income tax considerations
applicable to the stock purchase units and stock purchase contracts will be
discussed in the related prospectus supplement.
General.
The
Trust may issue preferred trust securities and common trust securities under
the
Trust Agreement. The terms of the agreements pursuant to which the Preferred
Trust Securities of FPL Group Capital Trust will be issued is herein referred
to
as the “FPL Group Capital Trust Agreement,” and the Trust Agreement pursuant to
which Preferred Trust Securities of FPL Group Trust will be issued is herein
referred to as the “FPL Group Trust Agreement;” each of these agreements is
referred to in this prospectus as the “Trust Agreement.” The terms of the FPL
Group Capital Trust Agreement and the FPL Group Trust Agreement are
substantially the same. The preferred trust securities and common trust
securities issued by the Trust are referred to in this prospectus as “Preferred
Trust Securities” and “Common Trust Securities,” respectively, and collectively
as “Trust Securities.” These Trust Securities will represent undivided
beneficial interests in the assets of the Trust. The junior subordinated
debentures issued by FPL Group Capital and held by FPL Group Capital Trust
are
referred to in this prospectus as the “FPL Group Capital Junior Subordinated
Debentures.” The junior subordinated debentures issued by FPL Group and held by
FPL Group Trust are referred to in this prospectus as the “FPL Group
Junior
Subordinated
Debentures,” and together with the FPL Group Capital Junior Subordinated
Debentures are referred to as the “Junior Subordinated Debentures.” This section
briefly summarizes some of the provisions of the Trust Agreement. This summary
does not contain a complete description of the Trust Agreement. You should
read
this summary together with the Trust Agreement for a complete understanding
of
all the provisions. The form of the Trust Agreement has been previously filed
with the SEC and is an exhibit to the registration statement filed with the
SEC
of which this prospectus is a part. In addition, each Trust Agreement will
be
qualified as an indenture under the Trust Indenture Act of 1939 and is therefore
subject to the provisions of the Trust Indenture Act of 1939. You should read
the Trust Indenture Act of 1939 for a complete understanding of its
provisions.
In
this
section, any discussion of FPL Group Capital Trust, FPL Group Trust, Preferred
Trust Securities and Common Trust Securities relate only to the applicable
Trust. Holders of Preferred Trust Securities of FPL Group Capital Trust II,
FPL Group Capital Trust III, FPL Group Trust I and FPL Group
Trust II will be entitled to any of the benefits and protections contained
in the Trust Agreement applicable to the particular Trust which issued the
relevant Trust Securities and not with respect to any other Trust.
The
Preferred Trust Securities and Common Trust Securities issued by the Trust
will
be substantially the same except that, if there is an event of default under
the
Trust Agreement, as described below, that results from an event of default
under
the Subordinated Indenture (as such term is defined below under “Description of
the Junior Subordinated Debentures and the Subordinated Guarantee—General”), the
right of FPL Group, as holder of the Common Trust Securities, to payment of
distributions and upon liquidation or redemption will be subordinated to the
rights of the holders of the Preferred Trust Securities. (Trust Agreement,
Section 4.03). All of the Common Trust Securities will be owned by FPL Group.
(Trust Agreement, Section 5.10).
FPL
Group
will fully and unconditionally guarantee payments due on the Preferred Trust
Securities issued by the Trust through a combination of the
following:
|
(1)
|
with
respect to the Preferred Trust Securities issued by FPL Group Capital
Trust only, FPL Group’s guarantee of FPL Group Capital’s payment
obligations under the FPL Group Capital Junior Subordinated Debentures
(referred to in this prospectus as the “Subordinated
Guarantee”);
|
|
(2)
|
with
respect to the Preferred Trust Securities issued by FPL Group Trust
only,
FPL Group’s obligations under the FPL Group Junior Subordinated
Debentures;
|
|
(3)
|
the
rights of holders of Preferred Trust Securities to enforce those
obligations in (1) and (2) above, as
applicable;
|
|
(4)
|
FPL
Group’s agreement to pay the expenses of the Trust;
and
|
|
(5)
|
FPL
Group’s guarantee of payments due on the Preferred Trust Securities to
the
extent of the Trust’s legally available assets (referred to in this
prospectus as the “Preferred Trust Securities
Guarantee”).
|
No
single
one of the applicable documents listed above standing alone or operating in
conjunction with fewer than all of the other applicable documents constitutes
the guarantee by FPL Group. It is only the combined operation of these documents
that has the effect of providing a full and unconditional, but subordinated,
guarantee as to payment by FPL Group of the Preferred Trust
Securities.
FPL
Group
Capital Trust will use the proceeds from the sale of the Trust Securities to
purchase FPL Group Capital Junior Subordinated Debentures, and FPL Group Trust
will use the proceeds from the sale of the Trust Securities to purchase FPL
Group Junior Subordinated Debentures. (Trust Agreement, Section 2.05). The
FPL
Group Capital Junior Subordinated Debentures will be guaranteed by FPL Group
pursuant to the Subordinated Guarantee described below and issued under an
Indenture, dated as of March 1, 2004, among FPL Group Capital, FPL Group
and The Bank of New York, as trustee. The FPL Group Junior Subordinated
Debentures will be issued under a Subordinated Indenture between FPL Group
and
The Bank of New York, as trustee. The Junior Subordinated Debentures will be
held in trust for the benefit of holders of the applicable Preferred Trust
Securities and Common Trust Securities. (Trust Agreement, Section
2.09).
A
prospectus supplement relating to the Preferred Trust Securities will include
specific terms of those securities and of the Junior Subordinated Debentures.
Material United States federal income tax considerations applicable to the
Preferred Trust Securities will also be discussed in the related prospectus
supplement. For a description of some specific terms that will affect both
the
Preferred Trust Securities and the Junior Subordinated Debentures, and holders’
rights under each, see “Description of the Junior Subordinated Debentures and
the Subordinated Guarantee” below.
Distributions.
The only
income of the Trust available for distribution to the holders of Preferred
Trust
Securities will be payments on the applicable Junior Subordinated Debentures.
(Trust Agreement, Section 8.01). If neither FPL Group Capital nor FPL Group
makes interest payments on the FPL Group Capital Junior Subordinated Debentures,
or if FPL Group does not make interest payments on the FPL Group Junior
Subordinated Debentures, as the case may be, the Trust will not have funds
available to pay distributions on Preferred Trust Securities. The payment of
distributions, if and to the extent the Trust has sufficient funds available
for
the payment of such distributions, is guaranteed on a limited basis by FPL
Group
as described under “Description of the Preferred Trust Securities
Guarantee.”
So
long
as no event of default under the Subordinated Indenture has occurred and is
continuing, the issuer of the Junior Subordinated Debentures may extend the
interest payment period from time to time on the Junior Subordinated Debentures
for one or more periods. (Subordinated Indenture, Section 312). As a
consequence, distributions on Preferred Trust Securities would be deferred
during any such period. Interest would, however, continue to accrue. (Trust
Agreement, Section 4.01). During any extended interest period, or for so
long as an “Event of Default” under the Subordinated Indenture resulting from a
payment default or any payment default under the Preferred Trust Securities
Guarantee has occurred and is continuing, neither FPL Group nor FPL Group
Capital, with respect to extension of the interest payment period on the FPL
Group Capital Junior Subordinated Debentures, nor FPL Group, with respect to
extension of the interest payment period on the FPL Group Junior Subordinated
Debentures, may:
|
(1)
|
declare
or pay any dividend or distribution on its capital
stock;
|
|
(2)
|
redeem,
purchase, acquire or make a liquidation payment with respect to any
of its
capital stock;
|
|
(3)
|
pay
any principal, interest or premium on, or repay, repurchase or redeem
any
debt securities that are equal or junior in right of payment with
the
Junior Subordinated Debentures or the Subordinated Guarantee (as
the case
may be); or
|
|
(4)
|
make
any payments with respect to any guarantee of debt securities if
such
guarantee is equal or junior in right of payment to the Junior
Subordinated Debentures or the Subordinated Guarantee (as the case
may
be),
|
other
than
|
(1)
|
purchases,
redemptions or other acquisitions of its capital stock in connection
with
any employment contract, benefit plan or other similar arrangement
with or
for the benefit of employees, officers, directors or agents or a
stock
purchase or dividend reinvestment plan, or the satisfaction of its
obligations pursuant to any contract or security outstanding on the
date
that the interest payment period is extended requiring it to purchase,
redeem or acquire its capital
stock;
|
|
(2)
|
any
payment, repayment, redemption, purchase, acquisition or declaration
of
dividend described in clauses (1) and (2) above as a result of a
reclassification of its capital stock or the exchange or conversion
of all
or a portion of one class or series of its capital stock for another
class
or series of its capital stock;
|
|
(3)
|
the
purchase of fractional interests in shares of its capital stock pursuant
to the conversion or exchange provisions of its capital stock or
the
security being converted or exchanged, or in connection with the
settlement of stock purchase
contracts;
|
|
(4)
|
dividends
or distributions paid or made in its capital stock (or rights to
acquire
its capital stock), or repurchases, redemptions or acquisitions of
capital
stock in connection with the issuance or exchange of capital stock
(or of
securities convertible into or exchangeable for shares of its capital
stock and distributions in connection with the settlement of stock
purchase contracts);
|
|
(5)
|
redemptions,
exchanges or repurchases of, or with respect to, any rights outstanding
under a shareholder rights plan or the declaration or payment thereunder
of a dividend or distribution of or with respect to rights in the
future;
|
|
(6)
|
payments
under any preferred trust securities guarantee or guarantee of junior
subordinated debentures executed and delivered by FPL Group concurrently
with the issuance by a trust of any preferred trust securities, so
long as
the amount of payments made on any preferred trust securities or
junior
subordinated debentures (as the case may be) is paid on all preferred
trust securities or junior subordinated debentures (as the case may
be)
then outstanding on a pro rata basis in proportion to the full
distributions to which each series of preferred trust securities
or junior
subordinated debentures (as the case may be) is then entitled if
paid in
full;
|
|
(7)
|
dividends
or distributions by FPL Group Capital on its capital stock to the
extent
owned by FPL Group; or
|
|
(8)
|
redemptions,
purchases, acquisitions or liquidation payments by FPL Group Capital
with
respect to its capital stock to the extent owned by FPL
Group.
|
The
exceptions in (7) and (8) above are not applicable to an extension of interest
payment period on the FPL Group Junior Subordinated Debentures.
Before
an
extension period ends, FPL Group Capital or FPL Group, as the case may be,
may
further extend the interest payment period. No extension period as further
extended may exceed 20 consecutive quarters. After any extension period and
the
payment of all amounts then due, FPL Group Capital or FPL Group, as the case
may
be, may select a new extended interest payment period. No interest period may
be
extended beyond the maturity of the Junior Subordinated Debentures.
Redemption.
Whenever
Junior Subordinated Debentures are repaid, whether at maturity or earlier
redemption, the Property Trustee will apply the proceeds to redeem a like amount
of Preferred Trust Securities and Common Trust Securities. (Trust Agreement,
Section 4.02(a)).
Preferred
Trust Securities will be redeemed at the redemption price plus accrued and
unpaid distributions with the proceeds from the contemporaneous redemption
or
repayment of Junior Subordinated Debentures. Redemptions of the Preferred Trust
Securities will be made on a redemption date only if the Trust has funds
available for the payment of the redemption price plus accrued and unpaid
distributions. (Trust Agreement, Section 4.02(c)).
Holders
of Preferred Trust Securities will be given not less than 30 nor more than
60
days’ notice of any redemption. (Trust Agreement, Section 4.02(b)). On or
before the redemption date, the Trust will irrevocably deposit with the paying
agent for Preferred Trust Securities sufficient funds and will give the paying
agent irrevocable instructions and authority to pay the redemption price plus
accrued and unpaid distributions to the holders upon surrender of their
Preferred Trust Securities. Distributions payable on or before a redemption
date
will be payable to the holders on the record date for the distribution payment.
If notice is given and funds are deposited as required, then on the redemption
date all rights of holders of the Preferred Trust Securities called for
redemption will cease, except the right of the holders to receive the redemption
price plus accrued and unpaid distributions, and the Preferred Trust Securities
will cease to be outstanding. No interest will accrue on amounts payable on
the
redemption date. In the event that any date fixed for redemption of Preferred
Trust Securities is not a business day, then payment will be made on the next
business day, except that, if such business day falls in the next calendar
year,
then payment will be made on the immediately preceding business day. No interest
will be payable because of any such delay. If payment of Preferred Trust
Securities called for redemption is improperly withheld or refused and
not
paid
either by the Trust or by FPL Group pursuant to the Preferred Trust Securities
Guarantee, distributions on such Preferred Trust Securities will continue to
accrue to the date of payment. In that event, the actual payment date will
be
considered the date fixed for redemption for purposes of calculating the
redemption price plus accrued and unpaid distributions. (Trust Agreement,
Section 4.02(d)).
Subject
to applicable law, including United States federal securities law, FPL Group
or
its affiliates may at any time and from time to time purchase outstanding
Preferred Trust Securities by tender, in the open market or by private
agreement.
If
Preferred Trust Securities are partially redeemed on a redemption date, a
corresponding percentage of the Common Trust Securities will be redeemed. The
particular Preferred Trust Securities to be redeemed will be selected not more
than 60 days prior to the redemption date by the Property Trustee by such method
as the Property Trustee shall deem fair, taking into account the denominations
in which they were issued. The Property Trustee will promptly notify the
Preferred Trust Security registrar in writing of the Preferred Trust Securities
selected for redemption and, where applicable, the partial amount to be
redeemed. (Trust Agreement, Section 4.02(f)).
Subordination
of Common Trust Securities.
Payment
of distributions on, and the redemption price, plus accrued and unpaid
distributions, of, the Preferred Trust Securities and Common Trust Securities
shall be made pro rata based on the liquidation preference amount of such
securities. However, if on any distribution payment date or redemption date
an
event of default under the Trust Agreement resulting from an event of default
under the Subordinated Indenture has occurred and is continuing, no payment
on
any Common Trust Security shall be made until all payments due on the Preferred
Trust Securities have been made. In that case, funds available to the Property
Trustee shall first be applied to the payment in full of all distributions
on,
or the redemption price plus accrued and unpaid distributions of, Preferred
Trust Securities then due and payable. (Trust Agreement,
Section 4.03(a)).
If
an
event of default under the Trust Agreement results from an event of default
under the Subordinated Indenture, the holder of Common Trust Securities cannot
take action with respect to the Trust Agreement default until the effect of
all
defaults with respect to the Preferred Trust Securities has been cured, waived
or otherwise eliminated. Until the event of default under the Trust Agreement
with respect to Preferred Trust Securities has been cured, waived or otherwise
eliminated, the Property Trustee shall, to the fullest extent permitted by
law,
act solely on behalf of the holders of Preferred Trust Securities and not the
holder of the Common Trust Securities, and only the holders of Preferred Trust
Securities will have the right to direct the Property Trustee to act on their
behalf. (Trust Agreement, Section 4.03(b)).
Liquidation
Distribution upon Dissolution.
The
Trust will be dissolved and liquidated by the Property Trustee on the first
to
occur of:
|
(1)
|
the
expiration of the term of the
Trust;
|
|
(2)
|
the
bankruptcy, dissolution or liquidation of FPL
Group;
|
|
(3)
|
the
redemption of all of the Preferred Trust Securities of the
Trust;
|
|
(4)
|
the
entry of an order for dissolution of the Trust by a court of competent
jurisdiction; or
|
|
(5)
|
at
any time, at the election of FPL Group. (Trust Agreement, Sections
9.01
and 9.02).
|
If
a
dissolution of the Trust occurs, the Trust will be liquidated by the Property
Trustee as expeditiously as the Property Trustee determines to be appropriate.
If a dissolution of the Trust occurs other than by redemption of all the
Preferred Trust Securities, the Property Trustee will provide for the
satisfaction of liabilities of creditors, if any, and distribute to each holder
of the Preferred Trust Securities and Common Trust Securities a proportionate
amount of Junior Subordinated Debentures. If a distribution of Junior
Subordinated Debentures is determined by the Property Trustee not to be
practical, holders of Preferred Trust Securities will be entitled to receive,
out of the assets of the Trust after adequate provision for the satisfaction
of
liabilities of creditors, if any, an amount equal to the
aggregate
liquidation preference of the Preferred Trust Securities plus accrued and unpaid
distributions thereon to the date of payment. If this liquidation distribution
can be paid only in part because the Trust has insufficient assets available
to
pay in full the aggregate liquidation distribution, then the amounts payable
by
the Trust on the Preferred Trust Securities shall be paid on a pro rata basis.
FPL Group, as holder of the Common Trust Securities, will be entitled to receive
distributions upon any dissolution pro rata with the holders of the Preferred
Trust Securities, except that if an event of default (or event that, with the
lapse of time or giving of notice, would become such an event of default) has
occurred and is continuing under the Subordinated Indenture, the Preferred
Trust
Securities will have a preference over the Common Trust Securities. (Trust
Agreement, Section 9.04).
Events
of Default; Notice.
Any one
of the following events will be an event of default under the Trust Agreement
whether it shall be voluntary or involuntary or be effected by operation of
law
or pursuant to any judgment, decree or order of any court or any order, rule
or
regulation of any administrative or governmental body:
|
(1)
|
the
occurrence of an event of default as described in the Subordinated
Indenture;
|
|
(2)
|
default
by the Trust in the payment of any distribution when it becomes due
and
payable, and continuation of that default for a period of 30
days;
|
|
(3)
|
default
by the Trust in the payment of any redemption price, plus accrued
and
unpaid distributions, of any Preferred Trust Security or Common Trust
Security when it becomes due and
payable;
|
|
(4)
|
default
in the performance, or breach, in any material respect, of any covenant
or
warranty of the trustees in the Trust Agreement which is not dealt
with
above, and continuation of that default or breach for a period of
90 days
after written notice to the Trust, the defaulting trustee under the
Trust
Agreement and FPL Group by the holders of Preferred Trust Securities
having at least 33% of the total liquidation preference amount of
the
outstanding Preferred Trust Securities. However, the holders of Preferred
Trust Securities will be deemed to have agreed to an extension of
the 90
day period if corrective action is initiated by any of the trustees
within
such period and is diligently pursued in good faith;
or
|
|
(5)
|
the
occurrence of certain events of bankruptcy or insolvency with respect
to
the Trust. (Trust Agreement, Section
1.01).
|
Within
90
days after the occurrence of any default known to the Property Trustee, the
Property Trustee shall transmit to the holders of Preferred Trust Securities,
FPL Group and the Administrative Trustees notice of any such default, unless
that default shall have been cured or waived. (Trust Agreement, Section
8.02).
A
holder
of Preferred Trust Securities may directly institute a proceeding to enforce
payment when due to the holder of the Preferred Trust Securities of the
principal of or interest on Junior Subordinated Debentures having a principal
amount equal to the aggregate liquidation preference amount of the holder’s
Preferred Trust Securities. The holders of Preferred Trust Securities have
no
other rights to exercise directly any other remedies available to the holder
of
the Junior Subordinated Debentures unless the trustees under the Trust Agreement
fail to do so. (Trust Agreement, Section 6.01(a)).
Removal
of Trustees.
Unless
an event of default under the Subordinated Indenture has occurred and is
continuing, the holder of the Common Trust Securities may remove any trustee
under the Trust Agreement at any time. If an event of default under the
Subordinated Indenture has occurred and is continuing, the holders of a majority
of the total liquidation preference amount of the outstanding Preferred Trust
Securities may remove the Property Trustee or the Delaware Trustee, or both
of
them. The holder of the Common Trust Securities may remove any Administrative
Trustee at any time. Any resignation or removal of a trustee under the Trust
Agreement will take effect only on the acceptance of appointment by the
successor trustee. (Trust Agreement, Section 8.10).
Holders
of Preferred Trust Securities will have no right to appoint or remove the
Administrative Trustees of the Trust, who may be appointed, removed or replaced
solely by FPL Group as the holder of the Common Trust Securities. (Trust
Agreement, Section 8.10).
Voting
Rights.
Except
as provided below and under “Description of the Preferred Trust Securities
Guarantee—Modification and Assignment,” and as otherwise required by law or the
Trust Agreement, the holders of Preferred Trust Securities will have no voting
rights.
While
Junior Subordinated Debentures are held by the Property Trustee, the Property
Trustee shall not:
|
(1)
|
direct
the time, method and place to conduct any proceeding for any remedy
available to the Subordinated Indenture Trustee (as such term is
defined
below under “Description of the Junior Subordinated Debentures and the
Subordinated Guarantee—General”), or execute any trust or power conferred
on the Subordinated Indenture Trustee with respect to the Junior
Subordinated Debentures;
|
|
(2)
|
waive
any past default under the Subordinated
Indenture;
|
|
(3)
|
exercise
any right to rescind or annul a declaration that the principal of
all the
Junior Subordinated Debentures will be due and payable;
or
|
|
(4)
|
consent
to any amendment, modification or termination of the Subordinated
Indenture or the Junior Subordinated Debentures, where that consent
will
be required,
|
without,
in each case, obtaining the prior approval of the holders of Preferred Trust
Securities having at least a majority of the aggregate liquidation preference
amount of all outstanding Preferred Trust Securities of the Trust. Where a
consent of each holder of Junior Subordinated Debentures affected is required,
no consent shall be given by the Property Trustee without the prior consent
of
each holder of the Preferred Trust Securities affected. The Property Trustee
shall not revoke any action previously authorized or approved by a vote of
the
holders of Preferred Trust Securities, except pursuant to the subsequent vote
of
the holders of Preferred Trust Securities. (Trust Agreement,
Section 6.01(b)). If the Property Trustee fails to enforce its rights, as
holder, under the Junior Subordinated Debentures or the Trust Agreement, a
holder of the Preferred Trust Securities may institute a legal proceeding
directly against FPL Group or FPL Group Capital, as the case may be, to enforce
the Property Trustee’s rights under the Junior Subordinated Debentures or the
Trust Agreement without first instituting any legal proceeding against the
Property Trustee or anyone else. (Trust Agreement, Section 6.01(a)). The
Property Trustee shall notify all holders of Preferred Trust Securities of
any
notice of default received from the Subordinated Indenture Trustee. The Property
Trustee shall not take any action approved by the consent of the holders of
Preferred Trust Securities without an opinion of counsel experienced in those
matters to the effect that the Trust will be classified as a grantor trust
and
not as an association taxable as a corporation for United States federal income
tax purposes on account of that action. (Trust Agreement,
Section 6.01(b)).
Holders
of Preferred Trust Securities may give any required approval at a meeting
convened for such purpose or by written consent without prior notice. (Trust
Agreement, Section 6.06). The Administrative Trustees will give notice of any
meeting at which holders of Preferred Trust Securities are entitled to vote.
(Trust Agreement, Section 6.02).
No
vote
or consent of the holders of Preferred Trust Securities will be required for
the
Trust to redeem and cancel Preferred Trust Securities in accordance with the
Trust Agreement.
Notwithstanding
that holders of Preferred Trust Securities are entitled to vote or consent
under
any of the circumstances described above, any Preferred Trust Securities that
are owned by FPL Group Capital, FPL Group, any Administrative Trustee or any
affiliate of any of them, shall be treated as if they were not outstanding
for
purposes of such vote or consent. (Trust Agreement, Section 1.01).
Amendments.
The
Trust Agreement may be amended from time to time by a majority of its
Administrative Trustees and FPL Group, without the consent of any holders of
Preferred Trust Securities or the other trustees under the Trust Agreement
in
order to:
|
(1)
|
cure
any ambiguity; correct or supplement any provision that may be
inconsistent with any other provision of the Trust Agreement or amendment
to the Trust Agreement; or make any other provisions with respect
to
matters or questions arising under the Trust
Agreement;
|
|
(2)
|
change
the name of the Trust; or
|
|
(3)
|
modify,
eliminate or add to any provisions of the Trust Agreement to the
extent
necessary to ensure that the Trust will not be classified for United
States federal income tax purposes other than as a grantor trust
(and not
an association taxable as a corporation) at any time that any Preferred
Trust Securities and Common Trust Securities are outstanding or to
ensure
the Trust’s exemption from the status of an “investment company” under the
Investment Company Act of 1940.
|
No
amendment described above may materially adversely affect the interests of
any
holder of Preferred Trust Securities or Common Trust Securities without the
applicable consents required pursuant to the following two paragraphs. Any
of
the amendments of the Trust Agreement described in paragraph (1) above
shall become effective when notice of the amendment is given to the holders
of
Preferred Trust Securities and Common Trust Securities in accordance with the
provisions of the Trust Agreement. (Trust Agreement, Section
10.03(a)).
Except
as
provided below, any provision of the Trust Agreement may be amended by the
Administrative Trustees and FPL Group with:
|
(1)
|
the
consent of holders of Preferred Trust Securities and Common Trust
Securities representing not less than a majority in aggregate liquidation
preference amount of the Preferred Trust Securities and Common Trust
Securities then outstanding; and
|
|
(2)
|
receipt
by the trustees of an opinion of counsel to the effect that such
amendment
or the exercise of any power granted to the trustees in accordance
with
the amendment will not affect the Trust’s status as a grantor trust for
federal income tax purposes (and not an association taxable as a
corporation) or affect the Trust’s exemption from the status of an
“investment company” under the Investment Company Act of 1940. (Trust
Agreement, Section 10.03(b)).
|
Each
affected holder of Preferred Trust Securities must consent to any amendment
to
the Trust Agreement that:
|
(1)
|
adversely
changes the amount or timing of any distribution with respect to
Preferred
Trust Securities or otherwise adversely affects the amount of any
distribution required to be made in respect of Preferred Trust Securities
as of a specified date;
|
|
(2)
|
restricts
the right of a holder of Preferred Trust Securities to institute
suit for
the enforcement of any such payment on or after that date;
or
|
|
(3)
|
modify
the provisions described in clauses (1) and (2) above. (Trust Agreement,
Section 10.03(c)).
|
Form,
Exchange and Transfer.
Preferred Trust Securities may be exchanged for other Preferred Trust Securities
in any authorized denomination and of like tenor and aggregate liquidation
preference. (Trust Agreement, Section 5.04).
Subject
to the terms of the Trust Agreement, Preferred Trust Securities may be presented
for exchange as provided above or for registration of transfer, duly endorsed
or
accompanied by a duly executed instrument of transfer, at the office of the
Preferred Trust Security registrar. The Administrative Trustees may designate
FPL Group or FPL Group Capital or any affiliate of either of them, as the
Preferred Trust Security registrar. The
Property
Trustee will initially act as the Preferred Trust Security registrar and
transfer agent. (Trust Agreement, Section 5.08). No service charge will be
made for any registration of transfer or exchange of Preferred Trust Securities,
but the Preferred Trust Security registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
with the transfer or exchange. A transfer or exchange will be made when the
Preferred Trust Security registrar and Administrative Trustees are satisfied
with the documents of title and identity of the person making the request.
(Trust Agreement, Section 5.04). The Administrative Trustees may at any
time designate another transfer agent and registrar or rescind the designation
of any transfer agent and registrar or approve a change in the office through
which any transfer agent and registrar acts, except that FPL Group will, or
will
cause the Preferred Trust Security registrar to, maintain an office or agency
in
The City of New York where Preferred Trust Securities may be transferred or
exchanged. (Trust Agreement, Sections 2.07(a) and 5.08).
The
Trust
will not be required to:
|
(1)
|
issue,
register the transfer of, or exchange any Preferred Trust Securities
during the period beginning at the opening of business 15
calendar days before the mailing of a notice of redemption of any
Preferred Trust Securities called for redemption and ending at the
close
of business on the day the notice is mailed;
or
|
|
(2)
|
register
the transfer of or exchange any Preferred Trust Securities so selected
for
redemption, in whole or in part, except the unredeemed portion of
any
Preferred Trust Securities being redeemed in part. (Trust Agreement,
Section 5.04).
|
Payment
on Preferred Trust Securities and Paying Agent.
Unless
otherwise stated in a prospectus supplement, payments in respect of the
Preferred Trust Securities will be made on the applicable distribution dates
by
check mailed to the address of the holder entitled thereto as such address
appears on the Preferred Trust Security register. (Trust Agreement, Section
4.04). The paying agent shall initially be the Property Trustee and any
co-paying agent chosen by the Property Trustee that is acceptable to the
Administrative Trustees, FPL Group and, in the case of Preferred Trust
Securities issued by FPL Group Capital Trust, FPL Group Capital. The paying
agent may resign upon 30 days’ written notice to the Administrative Trustees,
the Property Trustee, FPL Group and, in the case of Preferred Trust Securities
issued by FPL Group Capital Trust, FPL Group Capital. In the event that the
Property Trustee shall no longer be the paying agent, the Administrative
Trustees shall appoint a successor, which shall be a bank, trust company or
affiliate of FPL Group reasonably acceptable to the Property Trustee, FPL Group,
and, in the case of Preferred Trust Securities issued by FPL Group Capital
Trust, FPL Group Capital, to act as paying agent. (Trust Agreement, Section
5.09).
Duties
of the Trustees.
The
Delaware Trustee will act as the resident trustee in the State of Delaware
and
will have no other significant duties. The Property Trustee will hold the Junior
Subordinated Debentures on behalf of the Trust and will maintain a payment
account with respect to the Preferred Trust Securities and Common Trust
Securities, and will also act as trustee under the Trust Agreement for the
purposes of the Trust Indenture Act of 1939. (Trust Agreement, Sections 2.06
and
2.07(b)).
The
Administrative Trustees of the Trust are authorized and directed to conduct
the
affairs of the Trust and to operate the Trust so that
|
(1)
|
the
Trust will not be deemed to be an “investment company” required to be
registered under the Investment Company Act of
1940,
|
|
(2)
|
the
Trust will not be taxed as a corporation, and
|
|
(3)
|
in
the case of FPL Group Capital Trust, the FPL Group Capital Junior
Subordinated Debentures will be treated as indebtedness of FPL Group
Capital for United States federal income tax purposes and, in the
case of
FPL Group Trust, the FPL Group Junior Subordinated Debentures will
be
treated as indebtedness of FPL Group for United States federal income
tax
purposes.
|
In
this regard,
FPL Group and the Administrative Trustees are authorized to take any action,
not
inconsistent with applicable law, the certificate of trust or the Trust
Agreement, that FPL Group and the Administrative Trustees determine in their
discretion to be necessary or desirable for those purposes, as long as the
action does not materially adversely affect the interests of the holders of
the
Preferred Trust Securities. (Trust Agreement, Section 2.07(d)).
Miscellaneous.
Holders
of the Preferred Trust Securities have no preemptive or similar rights. (Trust
Agreement, Section 5.13).
Notices.
Notices
to holders of Preferred Trust Securities will be sent by mail to the addresses
of those holders as they appear in the security register for those Preferred
Trust Securities. (Trust Agreement, Section 6.02).
Title.
The
Property Trustee, the Delaware Trustee, the Administrative Trustees, and the
Preferred Trust Security registrar and transfer agent, and any agent of the
Property Trustee, the Delaware Trustee, the Administrative Trustees, or the
Preferred Trust Security registrar and transfer agent, may treat the person
in
whose name a Preferred Trust Security is registered as the absolute owner of
that Preferred Trust Security for the purpose of receiving distributions and
all
other purposes, regardless of any notice to the contrary. (Trust Agreement,
Section 5.06).
Governing
Law.
The
Trust Agreement, the Preferred Trust Securities and the Common Trust Securities
will be governed by and construed in accordance with the laws of the State
of
Delaware, without regard to conflict of laws principles thereunder, except
to
the extent that the law of any other jurisdiction is mandatorily applicable.
(Trust Agreement, Section 10.05).
General.
This
section briefly summarizes some of the provisions of the Preferred Trust
Securities Guarantee Agreement that FPL Group will execute and deliver for
the
benefit of the holders of the Preferred Trust Securities issued by FPL Group
Capital Trust and FPL Group Trust. The terms of these agreements are
substantially the same, and they are referred to in this prospectus as the
“Preferred Trust Securities Guarantee Agreement.” This summary does not contain
a complete description of the Preferred Trust Securities Guarantee Agreement.
You should read this summary together with the Preferred Trust Securities
Guarantee Agreement for a complete understanding of all the provisions. The
form
of the Preferred Trust Securities Guarantee Agreement has been previously filed
with the SEC and is an exhibit to the registration statement filed with the
SEC
of which this prospectus is a part. In addition, the Preferred Trust Securities
Guarantee Agreement will be qualified as an indenture under the Trust Indenture
Act of 1939 and is therefore subject to the provisions of the Trust Indenture
Act of 1939. You should read the Trust Indenture Act of 1939 for a complete
understanding of its provisions.
The
Bank
of New York will act as Preferred Trust Securities Guarantee Trustee under
the
Preferred Trust Securities Guarantee Agreement and will hold the Preferred
Trust
Securities Guarantee for the benefit of the holders of the Preferred Trust
Securities.
General
Terms of the Preferred Trust Securities Guarantee.
FPL
Group will absolutely, irrevocably and unconditionally agree to make the
guarantee payments listed below in full to the holders of the Preferred Trust
Securities if they are not made by the Trust, as and when due, regardless of
any
defense, right of set-off or counterclaim that the Trust may have or assert.
(Preferred Trust Securities Guarantee Agreement, Section 5.01). The
following payments will be subject to the Preferred Trust Securities Guarantee
(without duplication):
|
(1)
|
any
accrued and unpaid distributions required to be paid on Preferred
Trust
Securities, to the extent the Trust has funds in the payment account
maintained by the Property Trustee legally available for these payments
at
such time;
|
|
(2)
|
the
redemption price, plus all accrued and unpaid distributions to the
redemption date, for any Preferred Trust Securities called for redemption
by the Trust, to the extent the Trust has funds in
the
|
payment account maintained by the Property Trustee legally available for these
payments at such time; and
|
(3)
|
upon
a voluntary or involuntary dissolution, winding-up or termination
of the
Trust (except in connection with the distribution of Junior Subordinated
Debentures to the holders in exchange for Preferred Trust Securities
as
provided in the Trust Agreement or upon a redemption of all of the
Preferred Trust Securities upon maturity or redemption of the Junior
Subordinated Debentures as provided in the Trust Agreement), the
lesser
of:
|
|
(a)
|
the
aggregate of the liquidation preference amount and all accrued and
unpaid
distributions on Preferred Trust Securities to the date of payment,
to the
extent the Trust has funds in the payment account maintained by the
Property Trustee legally available for these payments at such time;
and
|
|
(b)
|
the
amount of assets of the Trust remaining available for distribution
to
holders of Preferred Trust Securities in liquidation of the Trust
after
satisfaction of liabilities to creditors of the Trust as required
by
applicable law.
|
(Preferred
Trust Securities Guarantee Agreement, Section 1.01). FPL Group’s obligation
to make a guarantee payment may be satisfied by either making a direct payment
of the required amounts by FPL Group to the holders of Preferred Trust
Securities or causing the Trust to pay such amounts to those holders. (Preferred
Trust Securities Guarantee Agreement, Section 5.01).
The
Preferred Trust Securities Guarantee will be a guarantee, subject to certain
subordination provisions, as to payment with respect to the Preferred Trust
Securities, but will not apply to any payment of distributions if and to the
extent that the Trust does not have funds legally available to make those
payments. (Preferred Trust Securities Guarantee Agreement, Sections 1.01 and
5.05). If neither FPL Group Capital nor FPL Group makes interest payments on
the
FPL Group Capital Junior Subordinated Debentures held by a Trust and if FPL
Group does not make interest payments on the FPL Group Junior Subordinated
Debentures held by a Trust, in each case the applicable Trust will not have
funds available to pay distributions on the Preferred Trust
Securities.
FPL
Group
will fully and unconditionally guarantee payments due on the Preferred Trust
Securities issued by the Trust through a combination of the
following:
|
(1)
|
with
respect to the Preferred Trust Securities issued by FPL Group Capital
Trust only, the Subordinated
Guarantee;
|
|
(2)
|
with
respect to the Preferred Trust Securities issued by FPL Group Trust
only,
FPL Group’s obligations under the FPL Group Junior Subordinated
Debentures;
|
|
(3)
|
the
rights of holders of Preferred Trust Securities to enforce those
obligations in (1) and (2) above, as
applicable;
|
|
(4)
|
FPL
Group’s agreement to pay the expenses of the Trust;
and
|
|
(5)
|
the
Preferred Trust Securities
Guarantee.
|
No
single
one of the applicable documents listed above standing alone or operating in
conjunction with fewer than all of the other applicable documents constitutes
the guarantee by FPL Group. It is only the combined operation of these documents
that has the effect of providing a full and unconditional, but subordinated,
guarantee as to payment by FPL Group of the Preferred Trust
Securities.
Except
as
otherwise stated in the related prospectus supplement, the covenants in the
Preferred Trust Securities Guarantee Agreement would not give holders of the
Preferred Trust Securities protection in the event of a highly-leveraged
transaction involving FPL Group.
Security
and Ranking.
The
Preferred Trust Securities Guarantee will be an unsecured obligation of FPL
Group and will rank:
|
(1)
|
subordinate
and junior in right of payment to all other liabilities of FPL Group,
including the Subordinated Guarantee and the Debt Securities Guarantee
(except those made pari passu or subordinate by their
terms);
|
|
(2)
|
equal
in right of payment with the most senior preferred or preference
stock
that may be issued by FPL Group and with any guarantee that may be
entered
into by FPL Group in respect of any preferred or preference stock
of any
affiliate of FPL Group; and
|
|
(3)
|
senior
to FPL Group common stock. (Preferred Trust Securities Guarantee
Agreement, Section 6.01).
|
The
Preferred Trust Securities Guarantee Agreement does not limit the amount of
other indebtedness, including guarantees, that FPL Group may issue or incur
or
the amount of preferred or preference stock it may issue.
The
Trust
Agreement provides that by accepting Preferred Trust Securities, a holder agrees
to the subordination provisions and other terms of the Preferred Trust
Securities Guarantee. (Trust Agreement, Section 5.02).
The
Preferred Trust Securities Guarantee will be a guarantee of payment and not
of
collection, that is, the guaranteed party may institute a legal proceeding
directly against FPL Group to enforce its rights under the Preferred Trust
Securities Guarantee without first instituting a legal proceeding against anyone
else. (Preferred Trust Securities Guarantee Agreement, Sections 5.04 and
5.05).
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. Therefore, the Preferred Trust Securities Guarantee
will
be effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock, incurred or issued by FPL Group’s
subsidiaries. Neither the Subordinated Indenture nor the Preferred Trust
Securities Guarantee Agreement places any limit on the amount of liabilities,
including debt or preferred stock, that FPL Group’s subsidiaries may issue,
guarantee or otherwise incur.
Events
of Default.
An event
of default under the Preferred Trust Securities Guarantee Agreement will occur
upon failure of FPL Group to perform any of its payment obligations under the
Preferred Trust Securities Guarantee Agreement, which failure has not been
cured
within 90 days of receipt of notice thereof. (Preferred Trust Securities
Guarantee Agreement, Section 1.01). Upon an event of default, the holders
of the Preferred Trust Securities having a majority of the aggregate liquidation
preference of the Preferred Trust Securities have the right to:
|
(1)
|
direct
the time, method and place of conducting any proceeding for any remedy
available to the Preferred Trust Securities Guarantee Trustee under
the
Preferred Trust Securities Guarantee Agreement,
or
|
|
(2)
|
direct
the exercise of any trust or power conferred upon the Preferred Trust
Securities Guarantee Trustee under the Preferred Trust Securities
Guarantee Agreement. (Preferred Trust Securities Guarantee Agreement,
Section 5.04).
|
Any
holder of the Preferred Trust Securities may enforce the Preferred Trust
Securities Guarantee, or institute a legal proceeding directly against FPL
Group
to enforce the Preferred Trust Securities Guarantee Trustee’s rights under the
Preferred Trust Securities Guarantee Agreement without first instituting a
legal
proceeding against the Trust, the Preferred Trust Securities Guarantee Trustee
or anyone else. (Preferred Trust Securities Guarantee Agreement, Section 5.04).
The holders of the Preferred Trust Securities having a majority of the aggregate
liquidation preference of the Preferred Trust Securities may waive any past
event of default and its consequences. (Preferred Trust Securities Guarantee
Agreement, Section 2.06).
FPL
Group
will be required to deliver to the Preferred Trust Securities Guarantee Trustee
an annual statement as to its compliance with all conditions under the Preferred
Trust Securities Guarantee Agreement. (Preferred Trust Securities Guarantee
Agreement, Section 2.04).
Modification
and Assignment.
No
consent of holders of Preferred Trust Securities is required for changes to
the
Preferred Trust Securities Guarantee Agreement that do not materially adversely
affect their rights. Except as provided below, changes to the Preferred Trust
Securities Guarantee Agreement that materially adversely affect the rights
of
Preferred Trust Securities require the prior approval of the holders of
Preferred Trust Securities having at least a majority of the aggregate
liquidation preference amount of the outstanding Preferred Trust Securities.
Each affected holder of Preferred Trust Securities must consent to any amendment
to the Preferred Trust Securities Guarantee Agreement that impairs the right
of
such holder to receive guarantee payments under the Preferred Trust Securities
Guarantee Agreement or to institute suit for enforcement of any such payment.
(Preferred Trust Securities Guarantee Agreement, Section 8.01).
All
guarantees and agreements contained in the Preferred Trust Securities Guarantee
Agreement will bind the successors, assigns, receivers, trustees and
representatives of FPL Group and will inure to the benefit of the holders of
the
Preferred Trust Securities then outstanding. (Preferred Trust Securities
Guarantee Agreement, Section 8.02).
Termination
of the Preferred Trust Securities Guarantee.
The
Preferred Trust Securities Guarantee Agreement will terminate and be of no
further force and effect upon:
|
(1)
|
full
payment of the redemption price, plus accrued and unpaid distributions
to
the redemption date, for all the Preferred Trust
Securities;
|
|
(2)
|
the
distribution of Junior Subordinated Debentures to holders of the
Preferred
Trust Securities in exchange for all of the Preferred Trust Securities;
or
|
|
(3)
|
full
payment of the amounts payable upon liquidation of the
Trust.
|
However,
the Preferred Trust Securities Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time, as result of the
subordination provisions or any mistake or any judicial proceeding or otherwise,
any holder of Preferred Trust Securities must return any sums paid under the
Preferred Trust Securities or the Preferred Trust Securities Guarantee.
(Preferred Trust Securities Guarantee Agreement, Section 7.01).
Governing
Law. The
Preferred Trust Securities Guarantee Agreement provides that it is to be
governed by and construed in accordance with the laws of the State of New York,
without regard to conflict of laws principles thereunder, except to the extent
that the law of any other jurisdiction is mandatorily applicable. (Preferred
Trust Securities Guarantee Agreement, Section 8.06).
AND
THE SUBORDINATED GUARANTEE
General.
The FPL
Group Capital Junior Subordinated Debentures, which the Property Trustee will
hold on behalf of FPL Group Capital Trust as trust assets, will be issued by
FPL
Group Capital in one or more series under an Indenture, dated as of
March 1, 2004, among FPL Group Capital, FPL Group and The Bank of New York,
as trustee. The Indenture pursuant to which FPL Group Capital Junior
Subordinated Debentures may be issued, as it may be amended from time to time,
is referred to in this prospectus as the “FPL Group Capital Subordinated
Indenture.” The Indenture pursuant to which FPL Group Junior Subordinated
Debentures may be issued, as it may be amended from time to time, is referred
to
in this prospectus as the “FPL Group Subordinated Indenture.” The FPL Group
Junior Subordinated Debentures, which the Property Trustee will hold on behalf
of FPL Group Trust as trust assets, will be issued by FPL Group in one or more
series under an Indenture between FPL Group and The Bank of New York, as
trustee. Each of the FPL Group Capital Subordinated Indenture and the FPL Group
Subordinated Indenture, as each may be amended and supplemented from time to
time, is referred to in this prospectus as the “Subordinated Indenture.” The
Bank of New York, as trustee under each Subordinated Indenture,
is
referred to in this prospectus as the “Subordinated Indenture Trustee.” The
Subordinated Indenture provides for the issuance from time to time of
subordinated debt in an unlimited amount. The Junior Subordinated Debentures
and
all other subordinated debt issued previously or hereafter under the
Subordinated Indenture are collectively referred to in this prospectus as the
“Subordinated Indenture Securities.”
This
section briefly summarizes some of the terms of the Junior Subordinated
Debentures, the Subordinated Guarantee applicable to the FPL Group Capital
Junior Subordinated Debentures, and some of the provisions of the Subordinated
Indenture. This summary does not contain a complete description of the Junior
Subordinated Debentures or the Subordinated Guarantee. You should read this
summary together with the Subordinated Indenture and the officer’s certificates
or other documents establishing the Junior Subordinated Debentures and the
Subordinated Guarantee for a complete understanding of all the provisions and
for the definitions of some terms used in this summary. The Subordinated
Indenture (which, in the case of the FPL Group Capital Subordinated Indenture,
contains the form of the Subordinated Guarantee), the forms of officer’s
certificate that may be used to establish a series of Junior Subordinated
Debentures and the forms of the Junior Subordinated Debentures have been
previously filed with the SEC, and are exhibits to the registration statement.
In addition, each Subordinated Indenture will be qualified under the Trust
Indenture Act of 1939 and is therefore subject to the provisions of the Trust
Indenture Act of 1939. You should read the Trust Indenture Act of 1939 for
a
complete understanding of its provisions.
Each
of
the FPL Group Capital Junior Subordinated Debentures issued by FPL Group Capital
to FPL Group Capital Trust and the FPL Group Junior Subordinated Debentures
issued by FPL Group to FPL Group Trust will constitute a separate series under
the respective Subordinated Indenture and will be limited in aggregate principal
amount to the sum of the aggregate liquidation preference amount of the related
Preferred Trust Securities and the consideration paid by FPL Group for the
related Common Trust Securities.
The
FPL
Group Capital Junior Subordinated Debentures will be unsecured, subordinated
obligations of FPL Group Capital which rank junior to all of FPL Group Capital’s
Senior Indebtedness (as defined herein). The FPL Group Junior Subordinated
Debentures will be unsecured, subordinated obligations of FPL Group which rank
junior to all of FPL Group’s Senior Indebtedness (as defined herein). All Junior
Subordinated Debentures issued under each Subordinated Indenture will rank
equally and ratably with all other Junior Subordinated Debentures issued under
such Subordinated Indenture, except to the extent that FPL Group Capital or
FPL
Group, as the case may be, elects to provide security with respect to any Junior
Subordinated Debenture without providing that security to all outstanding Junior
Subordinated Debentures as allowed under the respective Subordinated Indenture.
The FPL Group Capital Junior Subordinated Debentures will be unconditionally
guaranteed by FPL Group as to payment of principal, and any interest and
premium, pursuant to a Subordinated Guarantee of FPL Group, included in the
Subordinated Indenture for such FPL Group Capital Junior Subordinated
Debentures, which Subordinated Guarantee ranks junior to all of FPL Group’s
Senior Indebtedness (as defined herein). See “—Subordinated Guarantee”
below.
Although
the FPL Group Capital Junior Subordinated Debentures and the FPL Group Junior
Subordinated Debentures are discussed together in this section of the
prospectus, FPL Group will have no obligation with respect to the FPL Group
Capital Junior Subordinated Debentures except in connection with the
Subordinated Guarantee and FPL Group Capital will have no obligation with
respect to the FPL Group Junior Subordinated Debentures.
Each
series of Junior Subordinated Debentures that may be issued under each
Subordinated Indenture may have different terms. FPL Group Capital or FPL Group,
as the case may be, will include some or all of the following information about
a specific series of Junior Subordinated Debentures in the prospectus
supplement(s) relating to those Junior Subordinated Debentures:
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(1)
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the
title of those Junior Subordinated
Debentures,
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(2)
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any
limit upon the aggregate principal amount of those Junior Subordinated
Debentures,
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(3)
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the
date(s) on which the principal will be
paid,
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(4)
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the
rate(s) of interest on those Junior Subordinated Debentures, or how
the
rate(s) of interest will be determined, the date(s) from which interest
will accrue, the dates on which interest will be paid and the record
date
for any interest payable on any interest payment
date,
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(5)
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the
person to whom interest will be paid on any interest payment date,
if
other than the person in whose name those Junior Subordinated Debentures
are registered at the close of business on the record date for that
interest payment,
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(6)
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the
place(s) at which or methods by which payments will be made on those
Junior Subordinated Debentures and the place(s) at which or methods
by
which the registered owners of those Junior Subordinated Debentures
may
transfer or exchange those Junior Subordinated Debentures and serve
notices and demands to or upon FPL Group Capital or FPL Group, as
the case
may be,
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(7)
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the
security registrar and any paying agent or agents for those Junior
Subordinated Debentures,
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(8)
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any
date(s) on which, the price(s) at which and the terms and conditions
upon
which those Junior Subordinated Debentures may be redeemed at the
option
of the issuer, in whole or in part, and any restrictions on those
redemptions,
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(9)
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any
sinking fund or other provisions or options held by the registered
owners
of those Junior Subordinated Debentures that would obligate the issuer
to
repurchase or redeem those Junior Subordinated
Debentures,
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(10)
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the
denominations in which those Junior Subordinated Debentures may be
issued,
if other than denominations of $25 and any integral multiple of
$25,
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(11)
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the
currency or currencies in which the principal of or premium, if any,
or
interest on those Junior Subordinated Debentures may be paid (if
other
than in U.S. dollars),
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(12)
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if
FPL Group Capital, or FPL Group, as the case may be, or a registered
owner
may elect to pay, or receive, principal of or premium, if any, or
interest
on those Junior Subordinated Debentures in a currency other than
that in
which those Junior Subordinated Debentures are stated to be payable,
the
terms and conditions upon which that election may be
made,
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(13)
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if
the principal of or premium, if any, or interest on those Junior
Subordinated Debentures may be paid in securities or other property,
the
type and amount of those securities or other property and the terms
and
conditions upon which FPL Group Capital, or FPL Group, as the case
may be,
or a registered owner may elect to pay or receive those
payments,
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(14)
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if
the amount payable in respect of principal of or premium, if any,
or
interest on those Junior Subordinated Debentures may be determined
by
reference to an index or other fact or event ascertainable outside
of the
Subordinated Indenture, the manner in which those amounts will be
determined,
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(15)
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the
portion of the principal amount of the Junior Subordinated Debentures
that
will be paid by the issuer upon declaration of acceleration of the
maturity of those Junior Subordinated Debentures, if other than the
entire
principal amount of those Junior Subordinated
Debentures,
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(16)
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any
events of default with respect to those Junior Subordinated Debentures
and
any covenants of FPL Group Capital, or FPL Group, as the case may
be, for
the benefit of the registered owners of those Junior Subordinated
Debentures, other than those specified in the Subordinated
Indenture,
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(17)
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the
terms, if any, pursuant to which those Junior Subordinated Debentures
may
be exchanged for shares of capital stock or other securities of any
other
entity,
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(18)
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a
definition of “Eligible Obligations” under the Subordinated Indenture with
respect to the Junior Subordinated Debentures denominated in a currency
other than U.S. dollars, and any other provisions for the reinstatement
of
the issuer’s indebtedness in respect of those Junior Subordinated
Debentures after their satisfaction and
discharge,
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(19)
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if
those Junior Subordinated Debentures will be issued in global form,
necessary information relating to the issuance of those Junior
Subordinated Debentures in global
form,
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(20)
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if
those Junior Subordinated Debentures will be issued as bearer securities,
necessary information relating to the issuance of those Junior
Subordinated Debentures as bearer
securities,
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(21)
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any
limits on the rights of the registered owners of those Junior Subordinated
Debentures to transfer or exchange those Junior Subordinated Debentures
or
to register their transfer, and any related service
charges,
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(22)
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any
exceptions to the provisions governing payments due on legal holidays
or
any variations in the definition of business day with respect to
those
Junior Subordinated Debentures,
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(23)
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any
collateral security, assurance, or guarantee for those Junior Subordinated
Debentures (including, with respect to the FPL Group Capital Junior
Subordinated Debentures, any security, assurance of guarantee in
addition
to, or any exceptions to, the Subordinated Guarantee described under
“—Subordinated Guarantee” below),
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(24)
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the
designation of the trust to which the Junior Subordinated Debentures
are
to be issued,
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(25)
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the
terms relating to any additional interest that may be payable as
a result
of any tax, assessment or governmental charges,
and
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(26)
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any
other terms of those Junior Subordinated Debentures that are not
inconsistent with the provisions of the Subordinated Indenture.
(Subordinated Indenture, Section
301).
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Except
as
otherwise stated in the related prospectus supplement, the covenants in the
Subordinated Indenture would not give registered owners of Junior Subordinated
Debentures protection in the event of a highly-leveraged transaction involving
FPL Group Capital, in the case of the FPL Group Capital Junior Subordinated
Debentures, or FPL Group.
Subordination.
The
Junior Subordinated Debentures will be subordinate and junior in right of
payment to all Senior Indebtedness of FPL Group Capital, or FPL Group, as the
case may be. (FPL Group Capital Subordinated Indenture, Article Fifteen; FPL
Group Subordinated Indenture, Article Fourteen). No payment of the principal
(including redemption and sinking fund payments) of, or interest, or premium,
if
any, on the Junior Subordinated Debentures may be made by FPL Group Capital,
or
FPL Group, as the case may be, until all holders of Senior Indebtedness of
FPL
Group Capital, or FPL Group, as the case may be, have been paid in full (or
provision has been made for such payment), if any of the following
occurs:
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(1)
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certain
events of bankruptcy, insolvency or reorganization of FPL Group Capital
or
FPL Group, as the case may be;
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(2)
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any
Senior Indebtedness of FPL Group Capital, or of FPL Group, as the
case may
be, is not paid when due (after the expiration of any applicable
grace
period) and that default continues without waiver;
or
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(3)
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any
other default has occurred and continues without waiver (after the
expiration of any applicable grace period) pursuant to which the
holders
of Senior Indebtedness of FPL Group Capital, or FPL Group, as the
case may be, are permitted to accelerate the maturity of such Senior
Indebtedness. (FPL Group Capital Subordinated Indenture,
Section 1502; FPL Group Subordinated Indenture,
Section 1402).
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Upon
any
distribution of assets of FPL Group Capital, or of FPL Group, as the case may
be, to creditors in connection with any insolvency, bankruptcy or similar
proceeding, all principal of, and premium, if any, and interest due or to become
due on all Senior Indebtedness of FPL Group Capital, or of FPL Group, as the
case may be, must be paid in full before the holders of the Junior Subordinated
Debentures are entitled to receive or retain any payment from such distribution.
(FPL Group Capital Subordinated Indenture, Section 1502; FPL Group
Subordinated Indenture, Section 1402).
“Senior
Indebtedness,” when used with respect to FPL Group Capital or FPL Group, means
all of FPL Group Capital’s or FPL Group’s obligations, as the case may be,
whether presently existing or from time to time hereafter incurred, created,
assumed or existing, to pay principal, premium, interest, penalties, fees and
any other payment in respect of any of the following:
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(1)
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obligations
for borrowed money, including without limitation, such obligations
as are
evidenced by credit agreements, notes, debentures, bonds or other
securities or instruments;
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(2)
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capitalized
lease obligations;
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(3)
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all
obligations of the types referred to in clauses (1) and (2) of others
which FPL Group or FPL Group Capital, as the case may be, has assumed,
endorsed, guaranteed, contingently agreed to purchase or provide
funds for
the payment of, or otherwise becomes liable for, under any agreement;
or
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(4)
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all
renewals, extensions or refundings of obligations of the kinds described
in any of the preceding categories.
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Any
such
indebtedness, renewal, extension or refunding, however, will not be Senior
Indebtedness if the instrument creating or evidencing it or the assumption
or
guarantee of it provides that it is not superior in right of payment to or
is
equal in right of payment with the Junior Subordinated Debentures or the
Subordinated Guarantee, as the case may be. Furthermore trade accounts payable
or long-term purchase obligations will not be Senior Indebtedness. Senior
Indebtedness will be entitled to the benefits of the subordination provisions
in
the Subordinated Indenture irrespective of the amendment, modification or waiver
of any term of the Senior Indebtedness. (Subordinated Indenture, Section
101).
FPL
Group
Capital is a holding company that derives substantially all of its income from
its operating subsidiaries. Therefore, FPL Group Capital Subordinated Indenture
Securities will be effectively subordinated to all indebtedness and other
liabilities, including trade payables, debt and preferred stock, incurred or
issued by FPL Group Capital’s subsidiaries. The FPL Group Capital Subordinated
Indenture does not place any limit on the amount of liabilities including debt
or preferred stock, that FPL Group Capital’s subsidiaries may issue, guarantee
or otherwise incur.
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. Therefore, FPL Group Subordinated Indenture Securities
will be effectively subordinated to all indebtedness and other liabilities,
including trade payables, debt and preferred stock, incurred or issued by FPL
Group’s subsidiaries. The FPL Group Subordinated Indenture does not place any
limit on the amount of liabilities including debt or preferred stock, that
FPL
Group’s subsidiaries may issue, guarantee or otherwise incur.
Subordinated
Guarantee of FPL Group Capital Junior Subordinated
Debentures.
Pursuant
to the Subordinated Guarantee, FPL Group will unconditionally and irrevocably
guarantee the payment of principal of and any interest and premium, if any,
on
the FPL Group Capital Junior Subordinated Debentures, when due and payable,
whether at the stated maturity date, by declaration of acceleration, call for
redemption or otherwise, in accordance with the terms of such FPL Group Capital
Junior Subordinated Debentures and the FPL Group Capital Subordinated Indenture.
The Subordinated Guarantee will remain in effect until the entire principal
of
and any premium, if any, and interest on the FPL Group Capital Junior
Subordinated Debentures has been paid in full or otherwise discharged in
accordance with the provisions of the FPL Group Capital Subordinated Indenture.
(FPL Group Capital Subordinated Indenture, Article Fourteen).
The
Subordinated Guarantee will be subordinate and junior in right of payment to
all
Senior Indebtedness of FPL Group. (FPL Group Capital Subordinated Indenture,
Section 1402). No payment of the principal (including redemption and sinking
fund payments) of, or interest, or premium, if any, on, the FPL Group Capital
Junior Subordinated Debentures may be made by FPL Group under the Subordinated
Guarantee until all holders of Senior Indebtedness of FPL Group have been paid
in full (or provision has been made for such payment), if any of the following
occurs:
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(1)
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certain
events of bankruptcy, insolvency or reorganization of FPL
Group;
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(2)
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any
Senior Indebtedness of FPL Group is not paid when due (after the
expiration of any applicable grace period) and that default continues
without waiver; or
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(3)
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any
other default has occurred and continues without waiver (after the
expiration of any applicable grace period) pursuant to which the
holders
of Senior Indebtedness of FPL Group are permitted to accelerate the
maturity of such Senior Indebtedness. (FPL Group Capital Subordinated
Indenture, Section 1403).
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Upon
any
distribution of assets of FPL Group to creditors in connection with any
insolvency, bankruptcy or similar proceeding, all principal of, and premium,
if
any, and interest due or to become due on all Senior Indebtedness of FPL Group
must be paid in full before the holders of the FPL Group Capital Junior
Subordinated Debentures are entitled to receive or retain any payment from
such
distribution. (FPL Group Capital Subordinated Indenture, Section
1403).
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. Therefore, the Subordinated Guarantee is effectively
subordinated to all indebtedness and other liabilities, including trade
payables, debt and preferred stock, incurred or issued by FPL Group’s
subsidiaries. The FPL Group Capital Subordinated Indenture does not place any
limit on the amount of liabilities, including debt or preferred stock, that
FPL
Group’s subsidiaries may issue, guarantee or otherwise incur.
Payment
and Paying Agents.
Except
as stated in the related prospectus supplement, on each interest payment date
FPL Group Capital, or FPL Group, as the case may be, will pay interest on each
Junior Subordinated Debenture to the person in whose name that Junior
Subordinated Debenture is registered as of the close of business on the record
date relating to that interest payment date. However, on the date that the
Junior Subordinated Debentures mature, FPL Group Capital, or FPL Group, as
the
case may be, will pay the interest to the person to whom it pays the principal.
Also, if FPL Group Capital, or FPL Group, as the case may be, has defaulted
in
the payment of interest on any Junior Subordinated Debenture, it may pay that
defaulted interest to the registered owner of that Junior Subordinated
Debenture:
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(1)
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as
of the close of business on a date that the Subordinated Indenture
Trustee
selects, which may not be more than 15 days or less than 10 days
before
the date that FPL Group Capital, or FPL Group, as the case may be,
proposes to pay the defaulted interest,
or
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(2)
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in
any other lawful manner that does not violate the requirements of
any
securities exchange on which that Junior Subordinated Debenture is
listed
and that the Subordinated Indenture Trustee believes is acceptable.
(Subordinated Indenture, Section
307).
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Unless
otherwise stated in the related prospectus supplement, the principal, premium,
if any, and interest on the Junior Subordinated Debentures at maturity will
be
payable when such Junior Subordinated Debentures are presented at the main
corporate trust office of The Bank of New York, as paying agent, in The City
of
New York. FPL Group Capital and/or FPL Group with respect to the FPL Group
Capital Junior Subordinated Debentures and FPL Group with respect to the FPL
Group Junior Subordinated Debentures may change the place of payment on the
Junior Subordinated Debentures, appoint one or more additional paying agents,
including itself, and remove any paying agent. (Subordinated Indenture, Section
602).
Transfer
and Exchange.
Unless
otherwise stated in the related prospectus supplement, Junior Subordinated
Debentures may be transferred or exchanged at the main corporate trust office
of
The Bank of New York, as security registrar, in The City of New York. FPL Group
Capital, or FPL Group, as the case may be, may change the place for transfer
and
exchange of the Junior Subordinated Debentures and may designate one or more
additional places for that transfer and exchange.
Except
as
otherwise stated in the related prospectus supplement, there will be no service
charge for any transfer or exchange of the Junior Subordinated Debentures.
However, FPL Group Capital, or FPL Group, as the case may be, may require
payment of any tax or other governmental charge in connection with any transfer
or exchange of the Junior Subordinated Debentures.
FPL
Group
Capital, or FPL Group, as the case may be, will not be required to transfer
or
exchange any Junior Subordinated Debenture selected for redemption. Also, FPL
Group Capital, or FPL Group, as the case may be, will not be required to
transfer or exchange any Junior Subordinated Debenture during a period of 15
days before selection of Junior Subordinated Debentures to be redeemed.
(Subordinated Indenture, Section 305).
Unless
otherwise stated in the related prospectus supplement, if Junior Subordinated
Debentures are distributed to holders of Preferred Trust Securities in a
dissolution of the Trust, the Junior Subordinated Debentures will be issued
in
fully registered certificated form in the denominations and integral multiples
thereof in which the Preferred Trust Securities have been issued, and they
may
be transferred or exchanged as described above. (Trust Agreement, Section
9.04).
Defeasance.
FPL
Group Capital and FPL Group may, at any time, elect to have all of their
obligations discharged with respect to all or a portion of any Subordinated
Indenture Securities (including the FPL Group Capital Junior Subordinated
Debentures). FPL Group may, at any time, elect to have all of its obligations
discharged with respect to all or a portion of any Subordinated Indenture
Securities (including the FPL Group Junior Subordinated Debentures). To do
so,
FPL Group Capital or FPL Group, with respect to FPL Group Capital Junior
Subordinated Debentures, or FPL Group with respect to the FPL Group Junior
Subordinated Debentures, must irrevocably deposit with the Subordinated
Indenture Trustee or any paying agent, in trust:
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(1)
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money
in an amount that will be sufficient to pay all or that portion of
the
principal, premium, if any, and interest due and to become due on
those
Subordinated Indenture Securities, on or prior to their maturity,
or
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(2)
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in
the case of a deposit made prior to the maturity of that series of
Subordinated Indenture Securities,
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(a)
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direct
obligations of, or obligations unconditionally guaranteed by, the
United
States and entitled to the benefit of its full faith and credit that
do
not contain provisions permitting their redemption or other prepayment
at
the option of their issuer, and
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(b)
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certificates,
depositary receipts or other instruments that evidence a direct ownership
interest in those obligations or in any specific interest or principal
payments due in respect of those obligations that do not contain
provisions permitting their redemption or other prepayment at the
option
of their issuer, the principal of and the interest on which, when
due,
without any regard to reinvestment of that principal or interest,
will
provide money that, together with any money deposited with or held
by the
Subordinated Indenture Trustee, will be sufficient to pay all or
that
portion of the principal, premium, if any, and interest due and to
become
due on those Subordinated Indenture Securities, on or prior to their
maturity, or
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(3)
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a
combination of (1) and (2) that will be sufficient to pay all or
that
portion of the principal, premium, if any, and interest due and to
become
due on those Subordinated Indenture Securities, on or prior to their
maturity. (Subordinated Indenture, Section
701).
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Option
to Extend Interest Payment Period.
So long
as no event of default under the applicable Subordinated Indenture has occurred
and is continuing, FPL Group Capital, or FPL Group, as the case may be,
may
extend
the interest payment period from time to time on the Junior Subordinated
Debentures for one or more periods. (Subordinated Indenture, Section 312).
As a
consequence, distributions on the Preferred Trust Securities would be deferred
during any extension period. Interest would, however, continue to accrue on
the
Junior Subordinated Debentures. During any extended interest period, or for
so
long as an “Event of Default” under the Subordinated Indenture resulting from
any payment default or a payment default under the Preferred Trust Securities
Guarantee has occurred and is continuing, neither FPL Group nor FPL Group
Capital, with respect to FPL Group Capital Junior Subordinated Debentures,
or
FPL Group, with respect to FPL Group Junior Subordinated Debentures
may:
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(1)
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declare
or pay any dividend or distribution on its capital
stock;
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(2)
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redeem,
purchase, acquire or make a liquidation payment with respect to any
of its
capital stock;
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(3)
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pay
any principal, interest or premium on, or repay, repurchase or redeem
any
debt securities that are equal or junior in right of payment with
the
Junior Subordinated Debentures or, in the case of FPL Group Capital
Junior
Subordinated Debentures, the Subordinated Guarantee (as the case
may be);
or
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(4)
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make
any payments with respect to any guarantee of debt securities if
such
guarantee is equal or junior in right of payment to the Junior
Subordinated Debentures or the Subordinated Guarantee (as the case
may
be),
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other
than
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(1)
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purchases,
redemptions or other acquisitions of its capital stock in connection
with
any employment contract, benefit plan or other similar arrangement
with or
for the benefit of employees, officers, directors or agents or a
stock
purchase or dividend reinvestment plan, or the satisfaction of its
obligations pursuant to any contract or security outstanding on the
date
that the interest payment period is extended requiring it to purchase,
redeem or acquire its capital stock;
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(2)
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any
payment, repayment, redemption, purchase, acquisition or declaration
of
dividend described in clauses (1) and (2) above as a result of a
reclassification of its capital stock or the exchange or conversion
of all
or a portion of one class or series of its capital stock for another
class
or series of its capital stock;
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(3)
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the
purchase of fractional interests in shares of its capital stock pursuant
to the conversion or exchange provisions of its capital stock or
the
security being converted or exchanged, or in connection with the
settlement of stock purchase contracts;
|
|
(4)
|
dividends
or distributions paid or made in its capital stock (or rights to
acquire
its capital stock), or repurchases, redemptions or acquisitions of
capital
stock in connection with the issuance or exchange of capital stock
(or of
securities convertible into or exchangeable for shares of its capital
stock and distributions in connection with the settlement of stock
purchase contracts);
|
|
(5)
|
redemptions,
exchanges or repurchases of, or with respect to, any rights outstanding
under a shareholder rights plan or the declaration or payment thereunder
of a dividend or distribution of or with respect to rights in the
future;
|
|
(6)
|
payments
under any preferred trust securities guarantee or guarantee of junior
subordinated debentures executed and delivered by FPL Group concurrently
with the issuance by a trust of any preferred trust securities, so
long as
the amount of payments made on any preferred trust securities or
junior
subordinated debentures (as the case may be) is paid on all preferred
trust securities or junior subordinated debentures (as the case may
be)
then outstanding on a pro rata basis in proportion to the full
distributions to which each series of preferred trust securities
or junior
subordinated debentures (as the case may be) is then entitled if
paid in
full;
|
|
(7)
|
dividends
or distributions by FPL Group Capital on its capital stock to the
extent
owned by FPL Group; or
|
|
(8)
|
redemptions,
purchases, acquisitions or liquidation payments by FPL Group Capital
with
respect to its capital stock to the extent owned by FPL Group.
(Subordinated Indenture,
Section 608).
|
The
exceptions in (7) and (8) above are not applicable to an extension of interest
payment period on the FPL Group Junior Subordinated Debentures.
Any
extension period with respect to any securities of FPL Group Capital, or of
FPL
Group, as the case may be, similar to the Junior Subordinated Debentures or
any
other securities issued under the Subordinated Indenture will also apply to
payments of interest on the Junior Subordinated Debentures.
Any
extension period with respect to payment of interest on the Junior Subordinated
Debentures will, except as provided in (6) above, also apply to:
|
(1)
|
payments
of interest on all junior subordinated debt securities of FPL Group
Capital, or payments of interest on all junior subordinated debt
securities of FPL Group, as the case may be, including all other
securities issued under the Subordinated
Indenture;
|
|
(2)
|
distributions
on the related preferred trust securities; and
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|
(3)
|
distributions
on all other securities of the Trust or any other subsidiary trust
of FPL
Group with terms substantially the same as those of the Trust
Agreement.
|
Before
an
extension period ends, FPL Group Capital, or FPL Group, as the case may be,
may
further extend the interest payment period. No extension period as further
extended may exceed 20 consecutive quarters. After any extension period and
the
payment of all amounts then due, FPL Group Capital, or FPL Group, as the case
may be, may select a new extended interest payment period. No interest period
may be extended beyond the maturity of the Junior Subordinated Debentures.
FPL
Group Capital, or FPL Group, as the case may be, will give the Trust and the
Subordinated Indenture Trustee notice of its election of an extension period
prior to the earlier of (i) one business day before the record date for the
distribution on the Preferred Trust Securities which would occur if FPL Group
Capital, or FPL Group, as the case may be, did not make the election to extend
or (ii) the date the Administrative Trustees are required to give notice to
any
securities exchange or any other applicable self-regulatory organization of
the
record date for such a distribution. The Property Trustee shall send notice
of
that election to the holders of Preferred Trust Securities.
Additional
Interest.
So long
as any Preferred Trust Securities remain outstanding, if the Trust is required
to pay any taxes, duties, assessments or governmental charges imposed by the
United States or any other taxing authority on income derived from the interest
payments on the Junior Subordinated Debentures, then FPL Group Capital, or
FPL
Group, as the case may be, will pay as interest on the Junior Subordinated
Debentures any additional interest that may be necessary in order that the
net
amounts received and retained by the Trust after the payment of those taxes,
duties, assessments or governmental charges will be the same as the Trust would
have had in the absence of such payment. (Subordinated Indenture, Section
313).
Redemption.
For so
long as the Trust is the holder of all of the related Junior Subordinated
Debentures, the proceeds of any redemption of Junior Subordinated Debentures
will be used by the Trust to redeem Preferred Trust Securities and Common Trust
Securities in accordance with their terms. (Trust Agreement, Section
4.02(a)).
The
redemption terms of the Junior Subordinated Debentures, if any, will be set
forth in a prospectus supplement. Unless set forth differently in a prospectus
supplement, and except with respect to Junior Subordinated Debentures redeemable
at the option of the holder, Junior Subordinated Debentures will be redeemable
upon notice between 30 and 60 days prior to the redemption date. If less than
all of the Junior Subordinated Debentures of any series or any tranche thereof
are to be redeemed, the Subordinated Indenture Trustee will select the Junior
Subordinated Debentures to be redeemed. In the absence of any provision for
selection, the Subordinated Indenture
Trustee
will choose a method of random selection as it deems fair and appropriate.
(Subordinated Indenture, Sections 403 and 404).
Junior
Subordinated Debentures selected for redemption will cease to bear interest
on
the redemption date. The paying agent will pay the redemption price and any
accrued interest once the Junior Subordinated Debentures are surrendered for
redemption. (Subordinated Indenture, Section 405). If only part of a Junior
Subordinated Debenture is redeemed, the Subordinated Indenture Trustee will
deliver a new Junior Subordinated Debenture of the same series for the remaining
portion without charge. (Subordinated Indenture, Section 406).
Any
redemption at the option of FPL Group Capital, or FPL Group, as the case may
be,
may be conditional upon the receipt by the paying agent, on or prior to the
date
fixed for redemption, of money sufficient to pay the redemption price. If the
paying agent has not received such money by the date fixed for redemption,
neither FPL Group Capital nor FPL Group, in the case of FPL Group Capital Junior
Subordinated Debentures, nor FPL Group, in the case of FPL Group Junior
Subordinated Debentures, will be required to redeem such Junior Subordinated
Debentures. (Subordinated Indenture, Section 404).
Subject
to applicable law, including United States federal securities law, FPL Group
or
its affiliates, including FPL Group Capital, may at any time and from time
to
time purchase outstanding Junior Subordinated Debentures by tender, in the
open
market or by private agreement.
Consolidation,
Merger, and Sale of Assets.
Under
the FPL Group Capital Subordinated Indenture, neither FPL Group Capital nor
FPL
Group may, and under the FPL Group Subordinated Indenture, FPL Group may not,
consolidate with or merge into any other entity or convey, transfer or lease
its
properties and assets substantially as an entirety to any entity,
unless:
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(1)
|
the
entity formed by that consolidation, or the entity into which FPL
Group
Capital or FPL Group, as the case may be, in the case of the FPL
Group
Capital Subordinated Indenture, or FPL Group, in the case of the
FPL Group
Subordinated Indenture, is merged, or the entity that acquires or
leases
FPL Group Capital’s or FPL Group’s, as the case may be, in the case of the
FPL Group Capital Subordinated Indenture, or FPL Group’s, in the case of
the FPL Group Subordinated Indenture, property and assets, is an
entity
organized and existing under the laws of the United States, any state
or
the District of Columbia and that entity expressly assumes FPL Group
Capital’s or FPL Group’s, as the case may be, in the case of the FPL Group
Capital Subordinated Indenture, or FPL Group’s, in the case of the FPL
Group Subordinated Indenture, obligations on all Subordinated Indenture
Securities and under the Subordinated
Indenture,
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|
(2)
|
immediately
after giving effect to the transaction, no event of default under
the
Subordinated Indenture and no event that, after notice or lapse of
time or
both, would become an event of default under the Subordinated Indenture
exists, and
|
|
(3)
|
FPL
Group Capital or FPL Group, as the case may be, in the case of the
FPL
Group Capital Subordinated Indenture, or FPL Group, in the case of
the FPL
Group Subordinated Indenture, delivers an officer’s certificate and an
opinion of counsel to the Subordinated Indenture Trustee, as provided
in
the Subordinated Indenture. (Subordinated Indenture, Section
1101).
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The
Subordinated Indenture does not prevent or restrict:
|
(1)
|
any
consolidation or merger after the consummation of which FPL Group
Capital
or FPL Group, in the case of the FPL Group Capital Subordinated Indenture,
or FPL Group, in the case of the FPL Group Subordinated Indenture,
would
be the surviving or resulting
entity;
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|
(2)
|
in
the case of the FPL Group Capital Subordinated Indenture, any
consolidation of FPL Group Capital with FPL Group or any other entity
all
of the outstanding voting securities of which are owned, directly
or
indirectly, by FPL Group; or any merger of any such entity into any
other
of such entities;
|
or any conveyance or other transfer, or lease, of properties or assets by any thereof to any other thereof;
|
(3)
|
any
conveyance or other transfer, or lease, of any part of the properties
or
assets of FPL Group Capital or FPL Group, in the case of the FPL
Group
Capital Subordinated Indenture, or FPL Group, in the case of the
FPL Group
Subordinated Indenture, which does not constitute the entirety, or
substantially the entirety, thereof;
or
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|
(4)
|
the
approval by FPL Group Capital or FPL Group, in the case of the FPL
Group
Capital Subordinated Indenture, or FPL Group, in the case of the
FPL Group
Subordinated Indenture, of or the consent by FPL Group Capital or
FPL
Group, in the case of the FPL Group Capital Subordinated Indenture,
or FPL
Group, in the case of the FPL Group Subordinated Indenture, to any
consolidation or merger to which any direct or indirect subsidiary
or
affiliate of FPL Group may be a party, or any conveyance, transfer
or
lease by any such subsidiary or affiliate of any or all of its properties
or assets. (Subordinated Indenture, Section
1103).
|
Events
of Default.
Each of
the following is an event of default under the Subordinated Indenture with
respect to the Subordinated Indenture Securities of any series:
|
(1)
|
failure
to pay interest on the Subordinated Indenture Securities of that
series
within 30 days after it is due (provided, however, that a valid extension
of the interest period will not constitute an event of
default),
|
|
(2)
|
failure
to pay principal or premium, if any, on the Subordinated Indenture
Securities of that series when it is
due,
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|
(3)
|
failure
to comply with any other covenant in the Subordinated Indenture,
other
than a covenant that does not relate to that series of Subordinated
Indenture Securities, that continues for 90 days after FPL Group
Capital
and FPL Group, in the case of the FPL Group Capital Subordinated
Indenture, or FPL Group, in the case of the FPL Group Subordinated
Indenture, receive written notice of such failure to comply from
the
Subordinated Indenture Trustee, or FPL Group Capital, in the case
of the
FPL Group Capital Subordinated Indenture, FPL Group and the Subordinated
Indenture Trustee receive written notice of such failure to comply
from
the registered owners of at least 33% in principal amount of the
Subordinated Indenture Securities of that
series,
|
|
(4)
|
certain
events of bankruptcy, insolvency or reorganization of FPL Group Capital
or
FPL Group in the case of the FPL Group Capital Subordinated Indenture,
or
FPL Group in the case of the FPL Group Subordinated Indenture,
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|
(5)
|
with
certain exceptions, the Subordinated Guarantee ceases to be effective,
is
found by a judicial proceeding to be unenforceable or invalid or
is denied
or disaffirmed by FPL Group, and
|
|
(6)
|
any
other event of default specified with respect to the Subordinated
Indenture Securities of that series. (Subordinated Indenture, Section
801).
|
In
the
case of the third event of default listed above, the Subordinated Indenture
Trustee may extend the grace period. In addition, if holders of a particular
series have given a notice of default, then holders of at least the same
percentage of Junior Subordinated Debentures of that series, together with
the
Subordinated Indenture Trustee, may also extend the grace period. The grace
period will be automatically extended if FPL Group Capital or FPL Group, in
the
case of the FPL Group Capital Subordinated Indenture, or FPL Group, in the
case
of the FPL Group Subordinated Indenture, has initiated and is diligently
pursuing corrective action in good faith. (Subordinated Indenture, Section
801).
An event of default with respect to the Subordinated Indenture Securities of
a
particular series will not necessarily constitute an event of default with
respect to Subordinated Indenture Securities of any other series issued under
the Subordinated Indenture.
Remedies.
If an
event of default applicable to the Subordinated Indenture Securities of one
or
more series, but not applicable to all outstanding Subordinated Indenture
Securities, exists, then either the Subordinated Indenture Trustee or the
registered owners of at least 33% in aggregate principal amount of the
Subordinated Indenture Securities of each of the affected series may declare
the
principal of and accrued but unpaid interest on all the Subordinated Indenture
Securities of that series to be due and payable immediately. (Subordinated
Indenture, Section 802).
If
the
event of default is applicable to all outstanding Subordinated Indenture
Securities, then only the Subordinated Indenture Trustee or the registered
owners of at least 33% in aggregate principal amount of all outstanding
Subordinated Indenture Securities of all series, voting as one class, and not
the registered owners of any one series, may make a declaration of acceleration.
(Subordinated Indenture, Section 802). However, the event of default giving
rise
to the declaration relating to any series of Subordinated Indenture Securities
will be automatically waived, and that declaration and its consequences will
be
automatically rescinded and annulled, if, at any time after that declaration
and
before a judgment or decree for payment of the money due has been
obtained:
|
(1)
|
FPL
Group Capital or FPL Group in the case of the FPL Group Capital
Subordinated Indenture, or FPL Group in the case of the FPL Group
Subordinated Indenture, deposits with the Subordinated Indenture
Trustee a
sum sufficient to pay:
|
|
(a)
|
all
overdue interest on all Subordinated Indenture Securities of that
series,
|
|
(b)
|
the
principal of and any premium on any Subordinated Indenture Securities
of
that series that have become due for reasons other than that declaration,
and interest that is then due,
|
|
(c)
|
interest
on overdue interest for that series,
and
|
|
(d)
|
all
amounts due to the Subordinated Indenture Trustee under the Subordinated
Indenture, and
|
|
(2)
|
any
other event of default with respect to the Subordinated Indenture
Securities of that series has been cured or waived as provided in
the
Subordinated Indenture. (Subordinated Indenture, Section
802).
|
Other
than its obligations and duties in case of an event of default under the
Subordinated Indenture, the Subordinated Indenture Trustee is not obligated
to
exercise any of its rights or powers under the Subordinated Indenture at the
request or direction of any of the registered owners of the Subordinated
Indenture Securities, unless those registered owners offer reasonable indemnity
to the Subordinated Indenture Trustee. (Subordinated Indenture, Section 903).
If
they provide this reasonable indemnity, the registered owners of a majority
in
principal amount of any series of Subordinated Indenture Securities will have
the right to direct the time, method and place of conducting any proceeding
for
any remedy available to the Subordinated Indenture Trustee, or exercising any
trust or power conferred on the Subordinated Indenture Trustee, with respect
to
the Subordinated Indenture Securities of that series. However, if an event
of
default under the Subordinated Indenture relates to more than one series of
Subordinated Indenture Securities, only the registered owners of a majority
in
aggregate principal amount of all affected series of Subordinated Indenture
Securities, considered as one class, will have the right to make that direction.
Also, the direction must not violate any law or the Subordinated Indenture,
and
may not expose the Subordinated Indenture Trustee to personal liability in
circumstances where its indemnity would not, in the Subordinated Indenture
Trustee’s sole discretion, be adequate. (Subordinated Indenture, Section
812).
No
registered owner of Subordinated Indenture Securities of any series will have
any right to institute any proceeding under the Subordinated Indenture, or
exercise any remedy under the Subordinated Indenture, unless:
|
(1)
|
that
registered owner has previously given to the Subordinated Indenture
Trustee written notice of a continuing event of default with respect
to
the Subordinated Indenture Securities of that
series,
|
|
(2)
|
the
registered owners of a majority in aggregate principal amount of
the
outstanding Subordinated Indenture Securities of all series in respect
of
which an event of default under the Subordinated Indenture exists,
considered as one class, have made written request to the Subordinated
Indenture
|
|
|
Trustee,
and have offered reasonable indemnity to the Subordinated Indenture
Trustee to institute that proceeding in its own name as trustee,
and
|
|
(3)
|
the
Subordinated Indenture Trustee has failed to institute any proceeding,
and
has not received from the registered owners of a majority in aggregate
principal amount of the outstanding Subordinated Indenture Securities
of
all series in respect of which an event of default under the Subordinated
Indenture exists, considered as one class, a direction inconsistent
with
that request, within 60 days after that notice, request and offer.
(Subordinated Indenture, Section
807).
|
However,
these limitations do not apply to a suit instituted by a registered owner of
a
Subordinated Indenture Security for the enforcement of payment of the principal
of or any premium, if any, or interest on that Subordinated Indenture Security
on or after the applicable due date specified in that Subordinated Indenture
Security. (Subordinated Indenture, Section 808).
Each
of
FPL Group Capital and FPL Group in the case of the FPL Group Capital
Subordinated Indenture, and FPL Group in the case of the FPL Group Subordinated
Indenture, is required to deliver to the Subordinated Indenture Trustee an
annual statement as to its compliance with all conditions and covenants
applicable to it under the Subordinated Indenture. (Subordinated Indenture,
Section 606).
Enforcement
of Certain Rights by Holders of Preferred Trust Securities.
If there
is an event of default with respect to Junior Subordinated Debentures held
by
the Trust, then the holders of Preferred Trust Securities issued by the Trust
will rely on the Property Trustee or the Subordinated Indenture Trustee, acting
for the benefit of the Property Trustee, to enforce the Property Trustee’s
rights against FPL Group Capital and FPL Group in the case of the FPL Group
Capital Subordinated Indenture, or FPL Group in the case of the FPL Group
Subordinated Indenture, as a holder of the Junior Subordinated Debentures.
However, a holder of Preferred Trust Securities may enforce the Subordinated
Indenture directly against FPL Group Capital in the case of the FPL Group
Capital Subordinated Indenture, or FPL Group, in the case of the FPL Group
Subordinated Indenture, to the same extent, and upon the same conditions, as
if
the holder of Preferred Trust Securities held a principal amount of Junior
Subordinated Debentures equal to the aggregate liquidation amount of its
Preferred Trust Securities. (Subordinated Indenture, Section 610).
Subject
to their right to bring suit to enforce their right to payment, the holders
of
Preferred Trust Securities would not be able to institute any proceeding with
respect to the Subordinated Indenture unless the Subordinated Indenture Trustee
has failed to do so for 60 days after a request of the holders of at least
a
majority of the aggregate liquidation amount of outstanding Preferred Trust
Securities. Upon such failure, the holders of a majority of the aggregate
liquidation amount of the outstanding Preferred Trust Securities would have
the
right to directly institute proceedings for enforcement of all other rights
of
the Subordinated Indenture Trustee against FPL Group Capital in the case of
the
FPL Group Capital Subordinated Indenture, or FPL Group in the case of the FPL
Group Subordinated Indenture, to the fullest extent permitted by law.
(Subordinated Indenture, Sections 807, 808 and 812).
Modification
and Waiver.
Without
the consent of any registered owner of Subordinated Indenture Securities, FPL
Group, the Subordinated Indenture Trustee and, in the case of the FPL Group
Capital Subordinated Indenture, FPL Group Capital, may amend or supplement
the
Subordinated Indenture for any of the following purposes:
|
(1)
|
to
provide for the assumption by any permitted successor to FPL Group
Capital
or FPL Group of FPL Group Capital’s or FPL Group’s, in the case of the FPL
Group Capital Subordinated Indenture, or by any permitted successor
to FPL
Group of FPL Group’s, in the case of the FPL Group Subordinated Indenture,
obligations with respect to the Subordinated Indenture and the
Subordinated Indenture Securities in the case of a merger or consolidation
or a conveyance, transfer or lease of its properties and assets
substantially as an entirety,
|
|
(2)
|
to
add covenants of FPL Group Capital or FPL Group in the case of the
FPL
Group Capital Subordinated Indenture, or FPL Group in the case of
the FPL
Group Subordinated Indenture, or to surrender any right or power
conferred
upon FPL Group Capital, in the case of the FPL Group Capital Subordinated
Indenture, or FPL Group by the Subordinated
Indenture,
|
|
(3)
|
to
add any additional events of
default,
|
|
(4)
|
to
change, eliminate or add any provision of the Subordinated Indenture,
provided that if that change, elimination or addition will materially
adversely affect the interests of the registered owners of Subordinated
Indenture Securities of any series or tranche, that change, elimination
or
addition will become effective with respect to that series or tranche
only
|
|
(a)
|
when
the required consent of the registered owners of Subordinated Indenture
Securities of that series or tranche has been obtained,
or
|
|
(b)
|
when
no Subordinated Indenture Securities of that series or tranche remain
outstanding under the Subordinated
Indenture,
|
|
(5)
|
to
provide collateral security for all but not a part of the Subordinated
Indenture Securities,
|
|
(6)
|
to
establish the form or terms of Subordinated Indenture Securities
of any
other series or tranche,
|
|
(7)
|
to
provide for the authentication and delivery of bearer securities
and the
related coupons and for other matters relating to those bearer
securities,
|
|
(8)
|
to
accept the appointment of a successor Subordinated Indenture Trustee
or
co-trustee with respect to the Subordinated Indenture Securities
of one or
more series and to change any of the provisions of the Subordinated
Indenture as necessary to provide for the administration of the trusts
under the Subordinated Indenture by more than one
trustee,
|
|
(9)
|
to
add procedures to permit the use of a non-certificated system of
registration for the Subordinated Indenture Securities of all or
any
series or tranche,
|
|
(10)
|
to
change any place where
|
|
(a)
|
the
principal of and premium, if any, and interest on all or any series
or
tranche of Subordinated Indenture Securities are
payable,
|
|
(b)
|
all
or any series or tranche of Subordinated Indenture Securities may
be
transferred or exchanged, and
|
|
(c)
|
notices
and demands to or upon FPL Group Capital or FPL Group in the case
of the
FPL Group Capital Subordinated Indenture, or FPL Group in the case
of the
FPL Group Subordinated Indenture, in respect of Subordinated Indenture
Securities and the Subordinated Indenture may be served,
or
|
|
(11)
|
to
cure any ambiguity or inconsistency or to add or change any other
provisions with respect to matters and questions arising under the
Subordinated Indenture, provided those changes or additions may not
materially adversely affect the interests of the registered owners
of
Subordinated Indenture Securities of any series or tranche. (Subordinated
Indenture, Section 1201).
|
The
registered owners of a majority in aggregate principal amount of the
Subordinated Indenture Securities of all series then outstanding may waive
compliance by FPL Group Capital or FPL Group in the case of the FPL Group
Capital Subordinated Indenture, or by FPL Group in the case of the FPL Group
Subordinated Indenture, with certain restrictive provisions of the Subordinated
Indenture. (Subordinated Indenture, Section 607). The registered owners of
a
majority in principal amount of the outstanding Subordinated Indenture
Securities of any series may waive any past default under the Subordinated
Indenture with respect to that series, except a default in the payment of
principal, premium, if any, or interest and a default with respect to certain
restrictive covenants or provisions of the Subordinated Indenture that cannot
be
modified or amended without the consent of the registered owner of each
outstanding Subordinated Indenture Security of that series affected.
(Subordinated Indenture, Section 813). If the
Trust
holds Subordinated Indenture Securities of any series, the Trust may not waive
compliance, or any default in compliance, by FPL Group Capital or FPL Group
with
any covenant or term contained in, or any past default under, the Subordinated
Indenture or the Subordinated Indenture Securities of such series, without
the
approval of at least a majority (or such greater percentage required by the
Trust Agreement) in aggregate liquidation preference amount of the outstanding
Preferred Trust Securities. (Subordinated Indenture, Sections 607 and
813).
In
addition to any amendments described above, if the Trust Indenture Act of 1939
is amended after the date of either Subordinated Indenture in a way that
requires changes to the Subordinated Indenture or in a way that permits changes
to, or the elimination of, provisions that were previously required by the
Trust
Indenture Act of 1939, the Subordinated Indenture will be deemed to be amended
to conform to that amendment of the Trust Indenture Act of 1939 or to make
those
changes, additions or eliminations. FPL Group Capital and FPL Group in the
case
of the FPL Group Capital Subordinated Indenture, or FPL Group in the case of
the
FPL Group Subordinated Indenture, and the Subordinated Indenture Trustee may,
without the consent of any registered owners, enter into supplemental indentures
to make that amendment. (Subordinated Indenture, Section 1201).
Except
for any amendments described above, the consent of the registered owners of
a
majority in aggregate principal amount of the Subordinated Indenture Securities
of all series then outstanding, considered as one class, is required for all
other modifications to the Subordinated Indenture. However, if less than all
of
the series of Subordinated Indenture Securities outstanding are directly
affected by a proposed supplemental indenture, then the consent only of the
registered owners of a majority in aggregate principal amount of outstanding
Subordinated Indenture Securities of all directly affected series, considered
as
one class, is required. But, if FPL Group Capital or FPL Group, as the case
may
be, issues any series of Subordinated Indenture Securities in more than one
tranche and if the proposed supplemental indenture directly affects the rights
of the registered owners of Subordinated Indenture Securities of less than
all
of those tranches, then the consent only of the registered owners of a majority
in aggregate principal amount of the outstanding Subordinated Indenture
Securities of all directly affected tranches, considered as one class, will
be
required. However, none of those amendments or modifications may:
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(1)
|
change
the dates on which the principal of or interest (except as described
above
under “—Option to Extend Interest Payment Period”) on a Subordinated
Indenture Security is due without the consent of the registered owner
of
that Subordinated Indenture
Security,
|
|
(2)
|
reduce
any Subordinated Indenture Security’s principal amount or rate of interest
(or the amount of any installment of that interest) or change the
method
of calculating that rate without the consent of the registered owner
of
that Subordinated Indenture
Security,
|
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(3)
|
reduce
any premium payable upon the redemption of a Subordinated Indenture
Security without the consent of the registered owner of that Subordinated
Indenture Security,
|
|
(4)
|
change
the currency (or other property) in which a Subordinated Indenture
Security is payable without the consent of the registered owner of
that
Subordinated Indenture Security,
|
|
(5)
|
impair
the right to sue to enforce payments on any Subordinated Indenture
Security on or after the date that it states that the payment is
due (or,
in the case of redemption, on or after the redemption date) without
the
consent of the registered owner of that Subordinated Indenture
Security,
|
|
(6)
|
in
the case of FPL Group Capital Subordinated Indenture, impair the
right to
receive payments under the Subordinated Guarantee or to institute
suit for
enforcement of any such payment under the Subordinated
Guarantee,
|
|
(7)
|
reduce
the percentage in principal amount of the outstanding Subordinated
Indenture Securities of any series or tranche whose owners must consent
to
an amendment, supplement or waiver without the consent of the registered
owner of each outstanding Subordinated Indenture Security of that
series
or tranche,
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(8)
|
reduce
the requirements for quorum or voting of any series or tranche without
the
consent of the registered owner of each outstanding Subordinated
Indenture
Security of that series or tranche,
or
|
|
(9)
|
modify
certain of the provisions of the Subordinated Indenture relating
to
supplemental indentures, waivers of certain covenants and waivers
of past
defaults with respect to the Subordinated Indenture Securities of
any
series or tranche, without the consent of the registered owner of
each
outstanding Subordinated Indenture Security affected by the
modification.
|
A
supplemental indenture that changes or eliminates any provision of the
Subordinated Indenture that has expressly been included only for the benefit
of
one or more particular series or tranches of Subordinated Indenture Securities,
or that modifies the rights of the registered owners of Subordinated Indenture
Securities of that series or tranche with respect to that provision, will not
affect the rights under the Subordinated Indenture of the registered owners
of
the Subordinated Indenture Securities of any other series or tranche. So long
as
any Preferred Trust Securities are outstanding, the Subordinated Indenture
Trustee may not consent to any supplemental indenture without the prior consent
of the holders of a majority in aggregate liquidation preference of all
outstanding Preferred Trust Securities affected or, in the case of changes
described in clauses (1) through (9) immediately above, 100% in aggregate
liquidation preference of all such outstanding Preferred Trust Securities
affected. (Subordinated Indenture, Section 1202).
Each
Subordinated Indenture provides that, in order to determine whether the
registered owners of the required principal amount of the outstanding
Subordinated Indenture Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Subordinated Indenture, or
whether a quorum is present at the meeting of the registered owners of
Subordinated Indenture Securities, (a) in the case of the FPL Group Capital
Subordinated Indenture, Subordinated Indenture Securities owned by FPL Group
Capital, FPL Group or any other obligor upon the Subordinated Indenture
Securities or any affiliate of FPL Group Capital, FPL Group or of that other
obligor (unless FPL Group Capital, FPL Group, that affiliate or that obligor
owns all Subordinated Indenture Securities outstanding under the Subordinated
Indenture, determined without regard to this provision) and (b) in the case
of
the FPL Group Subordinated Indenture, Subordinated Indenture Securities owned
by
FPL Group or any other obligor upon the Subordinated Indenture Securities or
any
affiliate of FPL Group or of that other obligor (unless FPL Group, that
affiliate or that obligor owns all Subordinated Indenture Securities outstanding
under the Subordinated Indenture, determined without regard to this provision),
will be disregarded and deemed not to be outstanding. (Subordinated Indenture,
Section 101).
If
FPL
Group Capital, in the case of the FPL Group Capital Subordinated Indenture,
or
FPL Group solicits any action under the Subordinated Indenture from registered
owners of Subordinated Indenture Securities, each of FPL Group Capital or FPL
Group in the case of the FPL Group Capital Subordinated Indenture, or FPL Group
in the case of the FPL Group Subordinated Indenture, may, at its option, by
signing a written request to the Subordinated Indenture Trustee, fix in advance
a record date for determining the registered owners of Subordinated Indenture
Securities entitled to take that action. However, neither FPL Group Capital
nor
FPL Group will be obligated to do this. If FPL Group Capital or FPL Group in
the
case of the FPL Group Capital Subordinated Indenture, or FPL Group in the case
of the FPL Group Subordinated Indenture, as the case may be, fixes such a record
date, that action may be taken before or after that record date, but only the
registered owners of record at the close of business on that record date will
be
deemed to be registered owners of Subordinated Indenture Securities for the
purposes of determining whether registered owners of the required proportion
of
the outstanding Subordinated Indenture Securities have authorized that action.
For these purposes, the outstanding Subordinated Indenture Securities will
be
computed as of the record date. Any action of a registered owner of any
Subordinated Indenture Security under the Subordinated Indenture will bind
every
future registered owner of that Subordinated Indenture Security, or any
Subordinated Indenture Security replacing that Subordinated Indenture Security,
with respect to anything that the Subordinated Indenture Trustee, FPL Group
Capital or FPL Group in the case of the FPL Group Capital Subordinated
Indenture, or FPL Group in the case of the FPL Group Subordinated Indenture,
do,
fail to do, or allow to be done in reliance on that action, whether or not
that
action is noted upon that Subordinated Indenture Security. (Subordinated
Indenture, Section 104).
Resignation
and Removal of Subordinated Indenture Trustee. The
Subordinated Indenture Trustee may resign at any time with respect to any series
of Subordinated Indenture Securities by giving written notice of its resignation
to FPL Group Capital and FPL Group in the case of the FPL Group Capital
Subordinated Indenture, or
FPL
Group
in the case of the FPL Group Subordinated Indenture. Also, the registered owners
of a majority in principal amount of the outstanding Subordinated Indenture
Securities of one or more series of Subordinated Indenture Securities may remove
the Subordinated Indenture Trustee at any time with respect to the Subordinated
Indenture Securities of that series, by delivering an instrument evidencing
this
action to the Subordinated Indenture Trustee, FPL Group Capital and FPL Group
in
the case of the FPL Group Capital Subordinated Indenture, and to FPL Group
in
the case of the FPL Group Subordinated Indenture. However, so long as any
Preferred Trust Securities remain outstanding, the Trust cannot deliver an
instrument evidencing this action without the consent of the holders of a
majority in aggregate liquidation preference of Preferred Trust Securities
outstanding. (Subordinated Indenture, Section --910). The resignation or removal
of the Subordinated Indenture Trustee and the appointment of a successor trustee
will not become effective until a successor trustee accepts its
appointment.
Except
with respect to a Subordinated Indenture Trustee appointed by the registered
owners of Subordinated Indenture Securities, the Subordinated Indenture Trustee
will be deemed to have resigned and the successor will be deemed to have been
appointed as trustee in accordance with the Subordinated Indenture
if:
|
(1)
|
no
event of default under the Subordinated Indenture or event that,
after
notice or lapse of time, or both, would become an event of default
under
the Subordinated Indenture exists,
and
|
|
(2)
|
FPL
Group Capital and FPL Group in the case of the FPL Group Capital
Subordinated Indenture, or FPL Group in the case of the FPL Group
Subordinated Indenture, have delivered to the Subordinated Indenture
Trustee resolutions of their Boards of Directors appointing a successor
trustee and that successor trustee has accepted that appointment
in
accordance with the terms of the Subordinated Indenture. (Subordinated
Indenture, Section 910).
|
Notices.
Notices
to registered owners of Subordinated Indenture Securities will be sent by mail
to the addresses of those registered owners as they appear in the security
register for those Subordinated Indenture Securities. (Subordinated Indenture,
Section --106).
Title.
The
person in whose name a Subordinated Indenture Security is registered may be
treated as the absolute owner of that Subordinated Indenture Security, whether
or not that Subordinated Indenture Security is overdue, for the purpose of
making payments and for all other purposes, regardless of any notice to the
contrary. (Subordinated Indenture, Section 308).
Governing
Law.
The
Subordinated Indenture and the Subordinated Indenture Securities will be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to New York’s conflict of law principles, except to the
extent that the law of any other jurisdiction is mandatorily applicable.
(Subordinated Indenture, Section 112).
FPL
Group
and its subsidiaries, including FPL Group Capital, also maintain various banking
and trust relationships with The Bank of New York. In addition to acting as
Subordinated Indenture Trustee, security registrar and paying agent under the
FPL Group Capital Subordinated Indenture, The Bank of New York acts, or would
act, as (i) Indenture Trustee, security registrar and paying agent under
the Indenture described under “Description of Offered Debt Securities” above,
(ii) Guarantee Trustee under the Guarantee Agreement described under
“Description of the Debt Securities Guarantee” above, (iii) purchase contract
agent under a purchase contract agreement described under “Description of Stock
Purchase Contracts and Stock Purchase Units” above, (iv) Preferred Trust
Securities Guarantee Trustee under the Preferred Trust Securities Guarantee
Agreement described under “Description of the Preferred Trust Securities
Guarantee” above, (v) Property Trustee under the Trust Agreement and (vi)
Subordinated Indenture Trustee, security registrar and paying agent under the
FPL Group Subordinated Indenture. In addition, The Bank of New York acts as
purchase contract agent under purchase contract agreements previously entered
into by FPL Group and preferred trust securities trustee and property trustee
in
connection with the issuance by FPL Group Capital Trust I of its preferred
trust securities. The Bank of New York (Delaware) acts as the Delaware Trustee
under the Trust Agreement as well as acts as Delaware trustee under
the
Trust
Agreement entered into in connection with the issuance by FPL Group Capital
Trust I of its preferred trust securities.
FPL
Group, FPL Group Capital and the Trust may sell the securities offered pursuant
to this prospectus (“Offered Securities”):
|
(1)
|
through
underwriters or dealers,
|
|
(2)
|
through
agents, or
|
|
(3)
|
directly
to one or more purchasers.
|
Through
Underwriters or Dealers.
If FPL
Group, FPL Group Capital and/or the Trust uses underwriters in the sale of
the
Offered Securities, the underwriters will acquire the Offered Securities for
their own account. The underwriters may resell the Offered Securities in one
or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The underwriters
may
sell the Offered Securities directly or through underwriting syndicates
represented by managing underwriters. Unless otherwise stated in the prospectus
supplement relating to the Offered Securities, the obligations of the
underwriters to purchase those Offered Securities will be subject to certain
conditions, and the underwriters will be obligated to purchase all of those
Offered Securities if they purchase any of them. If FPL Group, FPL Group Capital
and/or the Trust uses a dealer in the sale, FPL Group, FPL Group Capital and/or
the Trust will sell the Offered Securities to the dealer as principal. The
dealer may then resell those Offered Securities at varying prices determined
at
the time of resale.
Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
Through
Agents.
FPL
Group, FPL Group Capital and/or the Trust may designate one or more agents
to
sell the Offered Securities. Unless otherwise stated in a prospectus supplement,
the agents will agree to use their best efforts to solicit purchases for the
period of their appointment.
Directly.
FPL
Group, FPL Group Capital and/or the Trust may sell the Offered Securities
directly to one or more purchasers. In this case, no underwriters, dealers
or
agents would be involved.
General
Information.
A
prospectus supplement will state the name of any underwriter, dealer or agent
and the amount of any compensation, underwriting discounts or concessions paid,
allowed or reallowed to them. A prospectus supplement will also state the
proceeds to FPL Group, FPL Group Capital and/or the Trust from the sale of
the
Offered Securities, any initial public offering price and other terms of the
offering of those Offered Securities.
FPL
Group, FPL Group Capital and/or the Trust may authorize underwriters, dealers
or
agents to solicit offers by certain institutions to purchase the Offered
Securities from FPL Group, FPL Group Capital and/or the Trust at the public
offering price and on the terms described in the related prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on
a
specified date in the future.
The
Offered Securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more firms, which are referred to herein as the
“remarketing firms,” acting as principals for their own accounts or as our agent
or the applicable trust’s agents, as applicable. Any remarketing firm will be
identified and the terms of its agreement, if any, with FPL Group, FPL Group
Capital and/or the Trust and its compensation will be described in the
applicable prospectus supplement. Remarketing firms may be deemed to be
underwriters, as that term is defined in the Securities Act of 1933, in
connection with the securities remarketed thereby.
FPL
Group, FPL Group Capital and/or the Trust may enter into derivative transactions
with third parties, or sell securities not covered by this prospectus to third
parties in privately negotiated transactions. If the applicable prospectus
supplement indicates, in connection with those derivatives, the third parties
may sell securities covered by this prospectus and the applicable prospectus
supplement, including in short sale transactions. If so, the third party may
use
securities pledged by FPL Group, FPL Group Capital and/or the Trust or borrowed
from any of them or others to settle those sales or to close out any related
open borrowings of securities, and may use securities received from FPL Group,
FPL Group Capital and/or the Trust in settlement of those derivatives to close
out any related open borrowings of securities. The third party in such sale
transactions will be an underwriter and, if not identified in this prospectus,
will be identified in the applicable prospectus supplement.
FPL
Group, FPL Group Capital and/or the Trust may have agreements to indemnify
underwriters, dealers and agents against, or to contribute to payments which
the
underwriters, dealers and agents may be required to make in respect of, certain
civil liabilities, including liabilities under the Securities Act of
1933.
The
consolidated financial statements incorporated by reference in this prospectus
from FPL Group’s Annual Report on Form 10-K have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated by reference herein (which expresses an unqualified opinion and
includes explanatory paragraphs relating to FPL Group, Inc.’s changes in 2003 in
its methods of accounting for special purpose entities and for asset retirement
obligations and change in 2002 in its method of accounting for goodwill), and
have been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
Steel
Hector & Davis LLP, Miami, Florida and Thelen Reid & Priest LLP, New
York, New York, co-counsel to FPL Group, FPL Group Capital and the Trust, will
pass upon the legality of the Offered Securities for FPL Group, FPL Group
Capital and the Trust. Hunton & Williams LLP, New York, New York, will pass
upon the legality of the Offered Securities for any underwriter, dealer or
agent. Certain matters of Delaware law relating to the validity of the Preferred
Trust Securities, the enforceability of the Trust Agreement and the creation
of
the Trust will be passed upon by Morris, James, Hitchens & Williams LLP,
special Delaware counsel to FPL Group, FPL Group Capital and the Trust. Thelen
Reid & Priest LLP and Hunton & Williams LLP may rely as to all matters
of Florida law upon the opinion of Steel Hector & Davis LLP, and on the
opinion of Morris, James, Hitchens & Williams LLP, as to matters involving
the law of the State of Delaware in connection with the Preferred Trust
Securities. Steel Hector & Davis LLP may rely as to all matters of New York
law upon the opinion of Thelen Reid & Priest LLP, and on the opinion of
Morris, James, Hitchens & Williams LLP, as to matters involving the law of
the State of Delaware in connection with the Preferred Trust
Securities.
___________________________________
You
should rely only on the information
incorporated by reference or provided in this prospectus or any prospectus
supplement. Neither FPL Group Capital, FPL Group nor the Trust has authorized
anyone else to provide you with additional or different information. Neither
FPL
Group Capital, FPL Group nor the Trust is making an offer of these securities
in
any jurisdiction where the offer is not permitted. You should not assume that
the information in this prospectus or any prospectus supplement is accurate
as
of any date other than the date on the front of those documents or that the
information incorporated by reference is accurate as of any date other than
the
date of the document incorporated by reference.
57
$600,000,000
5
5/8% Debentures,
Series due September 1, 2011
The
Debentures will be Absolutely, Irrevocably and
Unconditionally
Guaranteed by
FPL
Group, Inc.
___________
PROSPECTUS
SUPPLEMENT
August 15,
2006
___________
Citigroup
Morgan
Stanley
RBS
Greenwich
Capital
Wachovia
Securities
___________
Calyon
Securities (USA)
KeyBanc
Capital Markets
LaSalle
Capital
Markets
Lazard
Capital
Markets
SunTrust
Robinson Humphrey