Filed
pursuant to Rule 424(b)(5)
Registration
Statement Nos. 333-137120, 333-137120-01, 333-137120-02,
333-137120-03,
333-137120-04,
333-137120-05, 333-137120-06, 333-137120-07 and 333-137120-08
Subject
to Completion
Preliminary
Prospectus Supplement dated June 11, 2008
PROSPECTUS
SUPPLEMENT
(To
prospectus dated May 3, 2007)
$ % Debentures, Series due June 15,
2013
$
Floating Rate Debentures, Series due June ,
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
% Debentures, Series due June 15, 2013
on June 15 and December 15 of each year, beginning December 15,
2008. FPL Group Capital will pay interest, in cash, on the Floating
Rate Debentures, Series due June , 2011 on
March , June ,
September and December of each
year, beginning September , 2008. FPL Group
Capital, at its option, may redeem some or all of
the % Debentures, Series due June 15,
2013 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 for the %
Debentures” beginning on page S-11 of this prospectus supplement. FPL
Group Capital may not optionally redeem the Floating Rate Debentures, Series due
June , 2011, prior to their maturity.
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 and the guarantee
are unsecured and unsubordinated and rank equally with other unsecured and
unsubordinated indebtedness from time to time outstanding of FPL Group Capital
and FPL Group, respectively. 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.
_____________________
|
Price to
Public(1)
|
Underwriting
Discounts
|
Proceeds
to
FPL Group Capital (before expenses) |
|
|
Per
% Debenture
|
|||
|
Total
|
|||
|
Per
Floating Rate Debenture
|
|||
|
Total
|
(1) Plus
accrued interest, if any, from the date the securities are originally issued, if
settlement occurs after that date.
The
securities are expected to be delivered in book-entry only form through
The Depository Trust Company, on or about June ,
2008.
_________________
Joint
Book-Running Managers
| Barclays Capital | Credit Suisse | Lehman Brothers |
RBS Greenwich
Capital
|
Co-Managers
| Lazard Capital Markets |
Morgan
Keegan & Company,
Inc.
|
||
The date
of this prospectus supplement is June ,
2008.
The
information in this preliminary prospectus supplement is not complete and may be
changed. Neither this preliminary prospectus supplement nor the
accompanying prospectus is an offer to sell these securities and neither is
soliciting any offer to buy these securities in any jurisdiction where the
solicitation, offer or sale is not permitted.
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 FPL Group Capital, FPL Group or the underwriters specifying
the final terms of the offering. None of FPL Group Capital, FPL Group
or the underwriters has authorized anyone else to provide you with additional or
different information. None of FPL Group Capital, FPL Group or 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.
_________________________
Prospectus
Supplement
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The
information in this section replaces the information in the “Risk Factors”
section beginning on page 2 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 the accompanying prospectus or in this 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 as well as changing governmental policies and
regulatory actions, including, but not limited to, initiatives regarding
deregulation and restructuring of the energy industry and environmental matters,
including, but not limited to, matters related to the effects of climate
change. 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, but not limited to, 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, but
not limited to, 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, construction and operation of plant facilities, construction and
operation of transmission and distribution 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, rules and regulations, as well as the effect of changes
in or additions to applicable statutes, rules and regulations relating to air
quality, water quality, climate change, waste management, marine and 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, but not limited
to, deregulation or restructuring of the production and sale of electricity, as
well as increased focus on renewable energy sources. 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 and maintenance of transmission, distribution and power generation
facilities, including nuclear facilities, involve significant risks that could
adversely affect the results of operations and financial condition of FPL Group
and FPL Group Capital.
The
operation and maintenance of transmission, distribution and power generation
facilities involve many risks, including, but not limited to, start up risks,
breakdown or failure of equipment, transmission and distribution lines or
pipelines, the inability to properly manage or mitigate known equipment defects
throughout FPL Group’s and FPL Group Capital’s generation fleets and
transmission and distribution systems unless and until such defects are
remediated, 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, but not limited to, natural disasters
such as hurricanes and droughts), 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, but not limited
to, the requirement to purchase power in the market at potentially higher prices
to meet contractual obligations. Insurance, warranties or performance
guarantees may not cover any or all of the lost revenues or increased expenses,
including, but not limited to, 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, but not limited
to, the ability to store and/or dispose of spent nuclear fuel and 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,
including nuclear 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, including, but not
limited to, transmission interconnection issues and escalating costs for
materials, labor and environmental compliance, 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. FPL
Group and FPL Group Capital provide full energy and capacity requirements
services primarily to distribution utilities and engage in energy trading
activities. FPL Group and FPL Group Capital could recognize financial
losses as a result of volatility in the market values of these derivative
instruments, 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 derivative instruments. 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, but are not limited to, 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 and FPL Group Capital’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 is subject to significant risks, including, but not
limited to, 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 complete and integrate them successfully and in a timely
manner.
Because
FPL Group and FPL Group Capital rely on access to capital markets, the inability
to maintain current credit ratings and 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, 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, as well as significant volatility in the financial
markets, could affect their ability to raise capital on favorable terms, 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, but not limited to, 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, affect the price of energy commodities, and can
affect the production of electricity at power generating facilities, including,
but not limited to, wind, solar 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, cyber
attacks, or individuals and/or groups attempting to disrupt FPL Group’s and FPL
Group Capital’s business 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 as well as cyber attacks and disruptive activities of
individuals and/or groups. Infrastructure facilities and systems,
including, but not limited to, generation, transmission and distribution
facilities, physical assets and information systems, in general, have been
identified as potential targets. The effects of these threats and
activities include, but are not limited to, the inability to generate, purchase
or transmit power, the delay in development and construction of new generating
facilities, 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, but
not limited to, loss or retirement of key executives, availability of qualified
personnel, inflationary pressures on payroll and benefits costs, collective
bargaining agreements with union employees and work stoppage that could affect
the businesses and financial condition of FPL Group and FPL Group
Capital.
The
information in this section replaces the information in the “FPL Group Capital”
section beginning on page 5 of the accompanying prospectus.
FPL Group
Capital holds the capital stock of, or has equity interests in, FPL Group’s
operating subsidiaries, other than Florida Power & Light Company, and
provides funding for those subsidiaries, including FPL Energy. FPL
Group Capital was incorporated in 1985 as a Florida corporation and is a
wholly-owned subsidiary of FPL Group.
The
information in this section replaces the information in the “FPL Group” section
on page 5 of the accompanying prospectus.
FPL Group
has two principal subsidiaries, Florida Power & Light Company and,
indirectly through FPL Group Capital, FPL Energy, LLC. Florida Power
& Light Company is a rate-regulated utility engaged primarily in the
generation, transmission, distribution and sale of electric
energy. FPL Energy is FPL Group’s competitive energy
subsidiary. FPL Group is a holding company incorporated in 1984 as a
Florida corporation.
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.
The
information in this section adds to the information in the “Use of Proceeds”
section on page 6 of the accompanying prospectus. Please read
these two sections together.
The
$
aggregate principal amount of the
% Debentures, Series due June 15,
2013 offered by this prospectus supplement and the accompanying prospectus are
referred to in this prospectus supplement as the
“ % Debentures.” The
$
aggregate principal amount of Floating Rate Debentures, Series due
June , 2011 offered by this prospectus supplement and the
accompanying prospectus are referred to in this prospectus supplement as the
“Floating Rate Debentures.” The
% Debentures and the Floating Rate
Debentures are referred to in this prospectus supplement together as the
“Debentures.”
FPL Group
Capital will add the net proceeds from the sale of the Debentures, which are
expected to be approximately $ million
(after deducting the underwriting discount and other offering expenses) to its
general funds.
FPL Group
Capital expects to use its general funds to repay a portion of commercial paper
issued to fund investments by FPL Group Capital in independent power projects,
including renewable power projects. As of June 6, 2008, FPL
Group Capital had $919 million of commercial paper outstanding which had
maturities of up to 14 days and which had annual interest rates ranging from
2.08% to 2.40%. 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 replaces the information in the “Consolidated Ratio
of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends” section on page 6 of the accompanying
prospectus.
The
following table shows FPL Group’s consolidated ratio of earnings to fixed
charges for each of its last five fiscal years:
|
Years
Ended December 31,
|
||||
|
2007
|
2006
|
2005
|
2004
|
2003
|
|
3.10
|
3.13
|
2.82
|
3.00
|
3.32
|
FPL
Group’s consolidated ratio of earnings to fixed charges for the three months
ended March 31, 2008 was 2.16.
The
following table shows FPL Group’s consolidated capitalization as of March 31,
2008, and as adjusted to reflect the issuance of the Debentures. 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)
|
||||||||||
|
March
31, 2008
|
Amount
|
Percent
|
||||||||
|
(In
Millions)
|
||||||||||
|
Common
shareholders’
equity
|
$ | 10,714 | $ | % | ||||||
|
Long-term
debt (excluding current maturities)
|
12,304 |
|
|
% | ||||||
|
Total
capitalization
|
$ | 23,018 | $ | 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 discounts or commissions in connection with the issuance of the
Debentures. Adjusted amounts also do not reflect any possible
issuance and sale of additional securities by FPL Group and its
subsidiaries, including FPL Group Capital, from time to time after the
date of this prospectus supplement.
|
The
information in this section adds to the information in the “Description of FPL
Group Capital Senior 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, and
referred to in this prospectus supplement as the “Indenture
Trustee.” An officer’s certificate will supplement the Indenture and
establish the specific terms of the %
Debentures. Another officer’s certificate will supplement the
Indenture and establish the specific terms of the Floating Rate
Debentures. Under the Indenture, FPL Group Capital may issue an
unlimited amount of additional debt securities. The Indenture does
not limit the aggregate amount of indebtedness FPL Group Capital and its
subsidiaries may issue, guarantee or incur. The Guarantee Agreement
referred to below under “—Mandatory
Redemption” does not limit the aggregate amount of indebtedness FPL Group and
its subsidiaries may guarantee, issue or incur.
FPL Group
Capital’s corporate parent, FPL Group, has agreed to absolutely, irrevocably and
unconditionally guarantee the payment of principal, interest and premium, if
any, on the Debentures. The Debentures and the guarantee are
unsecured and unsubordinated and rank equally with other unsecured and
unsubordinated indebtedness from time to time outstanding of FPL Group Capital
and FPL Group, respectively. See “Description of the FPL Group
Guarantee of the FPL Group Capital Senior Debt Securities” in the accompanying
prospectus.
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 on the
% Debentures. FPL Group
Capital will pay interest semi-annually in cash on the
% Debentures at the rate of
% per year. The
% Debentures will mature on June 15,
2013. FPL Group Capital will pay interest on the
% Debentures on June 15 and
December 15 of each year, each an “interest payment date.” The
first interest payment date will be December 15, 2008. 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 all of the
% Debentures remain in book-entry only form,
or (2) on the 15th calendar day immediately preceding each interest payment date
if any of 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. If any date on which interest is
payable on the % Debentures falls on a day
that 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. A “business day” is
any day that is not a Saturday, a Sunday, or a day on which banking institutions
or trust companies in New York City are generally authorized or required by law
or executive order to remain closed.
Interest and Payment on the Floating
Rate Debentures. FPL Group Capital will pay interest quarterly
in cash on the Floating Rate Debentures at the Three-Month LIBOR Rate plus
basis points
( %), reset quarterly. The
interest rate for the initial interest period will be the Three-Month LIBOR Rate
plus basis points
( %) determined as described below, on June
, 2008. The Floating Rate Debentures will
mature on June , 2011. FPL Group Capital will
pay interest on the Floating Rate Debentures on March ,
June , September and
December of each year (each an “interest payment date,”
and also a “LIBOR Rate Reset Date”). The first interest payment date
and first LIBOR Rate Reset Date will be September ,
2008. The record date for interest payable on the Floating Rate
Debentures on any interest payment date shall be the close of business (1) on
the business day immediately preceding such interest payment date so long as all
of the Floating Rate Debentures remain in book-entry only form, or (2) on the
15th calendar day before each interest payment date if all of the Floating Rate
Debentures do not remain in book-entry only
form. See “—Book-Entry Only Issuance—The Depository Trust
Company.” Interest on the Floating Rate 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 Floating Rate 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 Floating Rate Debenture.
The
interest rate in effect on any LIBOR Rate Reset Date will be the applicable
interest rate as reset on that date and the interest rate applicable to any
other day will be the interest rate as reset on the immediately preceding LIBOR
Rate Reset Date. The amount of interest payable for any quarterly
interest period will be computed by multiplying the floating rate for that
quarterly interest period by a fraction, the numerator of which will be the
actual number of days elapsed during that quarterly interest period (determined
by including the first day of the interest period and excluding the last day),
and the denominator of which will be 360, and by multiplying the result by the
aggregate principal amount of the Floating Rate Debentures. The
interest rate for any quarterly interest period will at no time be higher than
the maximum rate then permitted by applicable law.
If an
interest payment date, other than a redemption date or the maturity date of the
Floating Rate Debentures, falls on a day that is not a business day, the
interest payment date will be postponed to the next day that is a business day,
except that if that business day is in the next succeeding calendar month, the
interest payment date will be the immediately preceding business
day. Also, if a redemption date or the maturity date of the Floating
Rate Debentures falls on a day that is not a business day, the payment of
interest and principal will be made on the next succeeding business day, and no
interest or payment will be paid in respect of the delay, and no interest on
such payment will accrue for the period from and after the redemption date or
the maturity date, as applicable.
If any
LIBOR Rate Reset Date falls on a day that is not a LIBOR Business Day (as
defined below), the LIBOR Rate Reset Date will be postponed to the next day that
is a LIBOR Business Day, except that if that LIBOR Business Day is in the next
succeeding calendar month, the LIBOR Rate Reset Date will be the immediately
preceding LIBOR Business Day.
Determining the Floating
Rate. The “Three-Month LIBOR Rate” for each interest period
commencing on a LIBOR Rate Reset Date, or June ,
2008 in the case of initial interest period, means the rate determined in
accordance with the following provisions:
|
|
·
|
On
the related LIBOR Interest Determination Date (as defined below), the
Calculation Agent (as defined below) or its affiliate will determine the
Three-Month LIBOR Rate which will be the rate for deposits in U.S. Dollars
having a three-month maturity which appears on the Reuters Page LIBOR01
(as defined below) as of 11:00 a.m., London time, on the LIBOR
Interest Determination Date.
|
|
|
·
|
If
no rate appears on the Reuters Page LIBOR01 on the LIBOR Interest
Determination Date, the Calculation Agent or its affiliate will request
the principal London offices of four major reference banks in the London
Inter-Bank Market to provide it with their offered quotations for deposits
in U.S. Dollars for the period of three months, commencing on the
applicable LIBOR Rate Reset Date, to prime banks in the London Inter-Bank
Market at approximately 11:00 a.m., London time, on that LIBOR Interest
Determination Date and in a principal amount that is representative for a
single transaction in U.S. Dollars in that market at that
time. If at least two quotations are provided, then the
Three-Month LIBOR Rate will be the average (rounded, if necessary, to the
nearest one hundredth (0.01) of a percent) of those
quotations. If fewer than two quotations are provided, then the
Three-Month LIBOR Rate will be the average (rounded, if necessary, to the
nearest one hundredth (0.01) of a percent) of the rates quoted at
approximately 11:00 a.m., New York City time, on the LIBOR Interest
Determination Date by three major banks in New York City selected by the
Calculation Agent or its affiliate for loans in U.S. Dollars to leading
European banks, having a three-month maturity and in a principal amount
that is representative for a single transaction in U.S. Dollars in that
market at that time. If the banks selected by the Calculation
Agent or its affiliate are not providing quotations in the manner
described by this paragraph, the rate for the quarterly interest period
following the LIBOR Interest Determination Date will be the rate in effect
on that LIBOR Interest Determination
Date.
|
All
percentages resulting from any of the above calculations will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or
..09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts used
in or resulting from such calculations will be rounded to the nearest cent (with
one-half cent being rounded upwards).
“Calculation
Agent” means a banking institution or trust company appointed by FPL Group
Capital to act as calculation agent, initially The Bank of New
York.
“LIBOR
Business Day” means any business day on which dealings in deposits in U.S.
Dollars are transacted in the London Inter-Bank Market.
“LIBOR
Interest Determination Date” means the second LIBOR Business Day preceding (i)
each LIBOR Rate Reset Date, or (ii) June , 2008 in the
case of initial interest period.
“Reuters
Page LIBOR01” means the display designated as “LIBOR01” on Reuters 3000 Xtra (or
such other page as may replace “LIBOR01” on such service or such other service
displaying the London Inter-Bank offered rates of major banks, as may replace
Reuters 3000 Xtra).
Absent
willful misconduct, bad faith or manifest error, the Calculation Agent’s or its
affiliate’s determination of the Three-Month LIBOR Rate and its calculation of
the applicable interest rate for each interest period will be final and binding
on FPL Group Capital, the Indenture Trustee, the Calculation Agent and holders
of the Floating Rate Debentures. The holders of Floating Rate
Debentures may obtain the interest rate for the current and preceding interest
period by writing the Calculation Agent at The Bank of New York, Attn: Corporate
Trust Administration, 101 Barclay Street, New York, New York 10286, or any
successor appointed by FPL Group Capital.
Optional Redemption for the
% Debentures. 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 any or all of the
% Debentures at least 30 but no more
than 60 days prior to a Redemption Date. If FPL Group Capital redeems
any or all 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 in accordance
with the foregoing paragraph 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 basis points.
FPL Group
Capital will appoint an independent investment banking institution of national
standing to calculate the make-whole premium; provided that Barclays
Capital Inc., Credit Suisse Securities (USA) LLC, Greenwich Capital Markets,
Inc. or Lehman Brothers Inc. 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 Barclays Capital Inc., Credit Suisse Securities (USA)
LLC, Greenwich Capital Markets, Inc. or Lehman Brothers Inc. 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 some but not all 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 The Depository Trust Company, or 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.
|
|
(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
outstanding Debentures are then rated by those rating agencies, or, if the
outstanding Debentures are then rated by only one of those rating agencies, then
such rating agency, or, if the outstanding Debentures are not then rated by
either one of 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
outstanding 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
outstanding Debentures as described above, FPL Group
Capital will provide to the Indenture Trustee and the holders of the outstanding
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 FPL Group Capital Senior Debt Securities—Events of Default”
section 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 of each series will be
represented by one or more global certificates and registered in the name of
Cede & Co., DTC’s nominee. Upon issuance of the global
securities, DTC or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amount of the Debentures represented
by such global securities to the accounts of institutions that have an account
with DTC or its participants. The accounts to be credited shall be
designated by the underwriters. Ownership of beneficial interests in
the global securities will be limited to participants or persons that may hold
interests through participants. The global certificates will be
deposited with the Indenture Trustee as custodian for DTC.
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 is the holding
company for DTC, National Securities Clearing Corporation and Fixed Income
Clearing Corporation, all of which are registered clearing
agencies. DTCC is owned by the users of its regulated
subsidiaries. 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, who
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 whom 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 of a series are being
redeemed, DTC’s practice is to determine by lot the amount of Debentures of that
series 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 applicable 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 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 some or all of
the Debentures. In that event, certificates for such Debentures will
be printed and delivered. If certificates for Debentures are printed and
delivered,
|
|
·
|
the
Debentures will be issued in fully registered form without
coupons;
|
|
|
·
|
a
holder of certificated Debentures would be able to exchange those
Debentures, without charge, for an equal aggregate principal amount of
Debentures of the same series, having the same issue date and with
identical terms and provisions; and
|
|
|
·
|
a
holder of certificated Debentures would be able to transfer those
Debentures without cost to another holder, other than for applicable stamp
taxes or other governmental
charges.
|
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. None of FPL Group Capital, FPL Group or the underwriters
take any responsibility for the accuracy of this information.
The
information in this section adds to the information in the “Plan of
Distribution” section beginning on page 53 of the accompanying
prospectus. Please read these two sections together.
FPL Group
Capital is selling the Debentures to the underwriters named in the table below
pursuant to an underwriting agreement among FPL Group Capital, FPL Group and the
underwriters named below, for whom Barclays Capital Inc., Credit Suisse
Securities (USA) LLC, Greenwich Capital Markets, Inc. and Lehman Brothers Inc.
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 |
Principal
Amount of
Floating Rate Debentures |
|
|
Barclays
Capital
Inc.
|
|||
|
Credit
Suisse Securities (USA)
LLC
|
|||
|
Greenwich
Capital Markets,
Inc.
|
|||
|
Lehman
Brothers
Inc.
|
|||
|
Lazard
Capital Markets
LLC
|
|||
|
Morgan
Keegan & Company,
Inc.
|
|
|
|
|
Total
|
$
|
$
|
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
sell 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 of each
series to them at a price that is less than the price to the public by the
respective amount of the “Underwriting Discount” set forth in the table
below. The underwriters will sell the Debentures of each series to
the public at the respective 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 corresponding “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 corresponding “Initial Dealers’ Concession” and the
corresponding “Reallowed Dealers’ Concession” set forth in the table
below.
|
Underwriting
Discount
|
Initial
Dealers’
Concession
|
Reallowed
Dealers’
Concession
|
|
|
(expressed as a
percentage of principal amount)
|
|||
|
% Debentures
|
%
|
%
|
%
|
|
Floating
Rate Debentures
|
%
|
%
|
%
|
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.
The
Debentures of each series are a new issue of securities with no established
trading market. The underwriters have advised FPL Group Capital that
they intend to make a 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, Barclays Capital Inc., Credit Suisse Securities
(USA) LLC, Greenwich Capital Markets, Inc. and Lehman Brothers Inc., 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 Barclays Capital Inc., Credit Suisse Securities (USA) LLC, Greenwich
Capital Markets, Inc. or Lehman Brothers Inc., 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 either or both series 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.
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.
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, in commercial banking and investment banking transactions with
FPL Group, its subsidiaries and its affiliates.
Lazard
Capital Markets LLC (“Lazard Capital Markets”) 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 Capital
Markets, including in respect of this offering. In return for the provision of
such services by MUS(USA) to Lazard Capital Markets, Lazard Capital Markets will
pay to MUS(USA) a mutually agreed upon fee.
The
information in this section replaces the information in the “Experts” section on
page 54 of the accompanying prospectus.
The
consolidated financial statements incorporated in this prospectus supplement by
reference from FPL Group’s Annual Report on Form 10-K for the year ended
December 31, 2007, and the effectiveness of FPL Group’s internal control
over financial reporting 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.
FPL GROUP, INC.
Common Stock, Preferred Stock, Senior
Debt Securities, Junior Subordinated Debentures,
Stock Purchase Contracts and Stock
Purchase Units
__________________________
FPL GROUP CAPITAL
INC
Senior 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 any combination of the securities described in this prospectus in one
or more offerings from time to time in amounts authorized from time to
time.
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 53
of this prospectus also provides more information on this topic.
See "Risk Factors" beginning on page
2 of this prospectus to read about certain factors you should consider before
purchasing any of the securities being offered.
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.
May 3,
2007
This
prospectus is part of a registration statement, as amended, that FPL Group, FPL
Group Capital, FPL Group Capital Trust II, FPL Group Capital
Trust III, FPL Group Trust I and FPL Group Trust II, among other
registrants, have filed with the Securities and Exchange Commission (SEC) using
a shelf registration process. 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.
Under
this shelf registration process, FPL Group, FPL Group Capital and/or the Trust
may issue and sell any combination of the securities described in this
prospectus in one or more offerings from time to time. As of the date
of this prospectus, FPL Group, FPL Group Capital and/or the Trust are each
authorized to issue securities up to a maximum aggregate offering price of
$2,000,000,000, provided that the aggregate amount of all such securities or
combinations of such securities offered by FPL Group, FPL Group Capital and the
Trust under the registration statement as of this date may not exceed
$2,000,000,000. The aggregate amount of securities which FPL Group,
FPL Group Capital and/or the Trust are authorized to issue pursuant to this
registration statement may be increased in the future. FPL Group may
offer any of the following securities: common stock, preferred stock, senior
debt securities or subordinated debt securities, each of which may be
convertible or exchangeable into FPL Group common stock, stock purchase
contracts, stock purchase units and guarantees related to the preferred trust
securities which the Trust may offer and guarantees related to the preferred
stock, senior debt securities and subordinated debt securities FPL Group Capital
may offer. FPL Group Capital may offer any of the following
securities: preferred stock, senior debt securities or subordinated debt
securities. The Trust may offer preferred trust
securities.
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. Material
United States federal income tax considerations applicable to the offered
securities will be discussed in the applicable prospectus supplement if
necessary. 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
risk factors and 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
as well as changing governmental policies and regulatory actions, including
initiatives regarding deregulation and restructuring of the energy industry and
environmental matters. 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 Companys 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, climate change, 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
Groups results of operations could be affected by Florida Power & Light
Companys ability to renegotiate franchise agreements with municipalities and
counties in Florida.
The operation and maintenance of
power generation facilities, including nuclear facilities, involve significant
risks that could adversely affect the results of operations and financial
condition of FPL Group and FPL Group Capital.
The
operation and maintenance of power generation facilities involve many risks,
including, but not limited to, start up risks, breakdown or failure of
equipment, transmission lines or pipelines, the inability to properly manage or
mitigate known equipment defects throughout our generation fleets unless and
until such defects are remediated, 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, but not limited to, the
requirement to purchase power in the market at potentially higher prices to meet
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 Groups and FPL Group Capitals nuclear units face certain risks that are
unique to the nuclear industry including, but not limited to, the ability to
store and/or dispose of spent nuclear fuel and 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 Groups and FPL Group Capitals 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
Groups and FPL Group Capitals 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. FPL
Group and FPL Group Capital provide full energy and capacity requirements
services and engage in 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
managements 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 Companys 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 Groups 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 Groups and FPL Group Capitals competitive energy
business. In addition to risks discussed elsewhere, risk factors
specifically affecting FPL Energys 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 Energys 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 Groups and FPL Group Capitals future
financial results. In keeping with industry trends, a portion of FPL
Energys 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 Groups and FPL Group Capitals financial
results. In addition, FPL Energys business depends upon transmission
facilities owned and operated by others; if transmission is disrupted or
capacity is inadequate or unavailable, FPL Energys ability to sell and deliver
its wholesale power may be limited.
FPL Groups and FPL Group Capitals
ability to successfully identify, complete and integrate acquisitions 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.
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 Groups and FPL Group Capitals ability to grow their
businesses and would likely increase their interest costs.
Customer growth in Florida Power
& Light Companys service area affects FPL Groups results of
operations.
FPL
Groups results of operations are affected by the growth in customer accounts in
Florida Power & Light Companys 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 Groups and FPL
Group Capitals results of operations.
FPL
Groups and FPL Group Capitals 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 Groups and FPL Group Capitals 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
Groups and FPL Group Capitals 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
is a holding company incorporated in 1984 as a Florida
corporation. FPL Groups 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.
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 or
other ownership interests of, and provides funding for,
FPL
Groups operating subsidiaries other than Florida Power & Light
Company. These operating subsidiaries business activities primarily
consist of FPL Energy, LLCs competitive energy business.
FPL GROUP TRUST I AND FPL GROUP
TRUST II
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. Unless otherwise
stated in a prospectus supplement, 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 will have a term as stated in the applicable
prospectus supplement, but may dissolve earlier as provided in the Trust
Agreement.
The
Trusts 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 and FPL Group Capital
will each add the net proceeds from the sale of their securities to its
respective general funds. FPL Group uses its general funds for
corporate purposes, including to provide funds for its subsidiaries and to
repurchase common stock. 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 and FPL Group Capital 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.
COMBINED FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS
The
following table shows FPL Groups 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,
|
||||
|
2006
|
2005
|
2004
|
2003
|
2002
|
|
3.11
|
2.80
|
2.98
|
3.32
|
2.97
|
FPL
Groups consolidated ratio of earnings to fixed charges and consolidated ratio of
earnings to combined fixed charges and preferred stock dividends for the three
months ended March 31, 2007 was 2.14.
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 SECs Public Reference Room at 100 F Street, N.E., 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 (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
(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 Capitals 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 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, FPL Group Capital and the Trust to incorporate by reference
the information that FPL Group files with the SEC, which means that FPL Group,
FPL Group Capital 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, FPL Group Capital 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
Groups Annual Report on Form 10-K for the year ended December 31,
2006;
|
|
|
(2)
|
FPL
Groups Quarterly Report on Form 10-Q for the quarter ended March 31, 2007;
and
|
|
|
(3)
|
FPL
Groups Current Reports on Form 8-K filed with the SEC on February 21,
2007, March 20, 2007 and April 5,
2007
|
You may
request a copy of these documents, at no cost to you, by writing or calling
Robert J. Reger, Jr., Esq., Thelen Reid Brown Raysman & Steiner 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 Groups
and FPL Group Capitals 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 FPL Groups
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 have a significant impact on FPL Groups
and FPL Group Capitals operations and financial results, and could cause FPL
Groups or FPL Group Capitals 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, including unanticipated events, after the date on which that
statement is made. 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 herein by reference 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
Groups and FPL Group Capitals businesses in the future.
General. FPL Group
Capital will issue its debt securities (other than the FPL Group Capital Junior
Subordinated Debentures (as defined below under Description of the FPL Group and
FPL Group Capital Junior Subordinated Debentures and the FPL Group Subordinated
Guarantee)), 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 Senior 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
Senior 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 Senior Debt Securities.
This
section briefly summarizes some of the terms of the Offered Senior Debt
Securities and some of the provisions of the Indenture. This summary
does not contain a complete description of the Offered Senior Debt Securities or
the Indenture. You should read this summary together with the
Indenture and the officers certificates or other documents establishing the
Offered Senior 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 officers certificate that may be
used to establish a series of Offered Senior Debt Securities and a form of
Offered Senior 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.
All
Offered Senior Debt Securities of one series need not be issued at the same
time, and a series may be re-opened for issuances of additional Offered Senior
Debt Securities of such series. This means that FPL Group Capital may
from time to time, without notice to, or the consent of the existing holders of
the Offered Senior Debt Securities of a particular series, create and issue
additional Offered Senior Debt Securities of such series. Such
additional Offered Senior Debt Securities will have the same terms as the
Offered Senior Debt Securities of such series in all respects (except for the
payment of interest accruing prior to the issue date of the additional
Offered
Senior
Debt Securities or except for the first payments of interest following the issue
date of the additional Offered Senior Debt Securities) so that the additional
Offered Senior Debt Securities may be consolidated and form a single series with
the Offered Senior Debt Securities of such series.
Each
series of Offered Senior Debt Securities may have different
terms. FPL Group Capital will include some or all of the following
information about a specific series of Offered Senior Debt Securities in the
prospectus supplement relating to those Offered Senior Debt
Securities:
|
|
(1)
|
the
title of those Offered Senior Debt
Securities,
|
|
|
(2)
|
any
limit upon the aggregate principal amount of those Offered Senior Debt
Securities,
|
|
|
(3)
|
the
date(s) on which FPL Group Capital will pay the principal of those Offered
Senior Debt Securities,
|
|
|
(4)
|
the
rate(s) of interest on those Offered Senior 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 Senior
Debt Securities on any interest payment date, if other than the person in
whose name those Offered Senior 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 Senior Debt Securities and the place(s) at which or
methods by which the registered owners of those Offered Senior Debt
Securities may transfer or exchange those Offered Senior 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 Senior
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 Senior
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 Senior Debt Securities that would obligate FPL Group
Capital to repurchase or redeem those Offered Senior Debt
Securities,
|
|
|
(10)
|
the
denominations in which FPL Group Capital may issue those Offered Senior
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 Senior 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 Senior Debt
Securities in a currency other than that in which those Offered Senior
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 Senior 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 Senior 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 Senior Debt Securities
that FPL Group Capital will pay upon declaration of acceleration of the
maturity of those Offered Senior Debt Securities, if other than the entire
principal amount of those Offered Senior Debt
Securities,
|
|
|
(16)
|
any
events of default with respect to those Offered Senior Debt Securities and
any covenants of FPL Group Capital for the benefit of the registered
owners of those Offered Senior Debt Securities, other than those specified
in the Indenture,
|
|
|
(17)
|
the
terms, if any, pursuant to which those Offered Senior 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 Senior Debt Securities denominated in a currency other than
U.S. dollars, and any other provisions for the reinstatement of FPL Group
Capitals indebtedness in respect of those Offered Senior Debt Securities
after their satisfaction and
discharge,
|
|
|
(19)
|
if
FPL Group Capital will issue those Offered Senior Debt Securities in
global form, necessary information relating to the issuance of those
Offered Senior Debt Securities in global
form,
|
|
|
(20)
|
if
FPL Group Capital will issue those Offered Senior Debt Securities as
bearer securities, necessary information relating to the issuance of those
Offered Senior Debt Securities as bearer
securities,
|
|
|
(21)
|
any
limits on the rights of the registered owners of those Offered Senior Debt
Securities to transfer or exchange those Offered Senior 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 Senior Debt Securities,
|
|
|
(23)
|
other
than the Guarantee described under Description of the FPL Group Capital
Senior Debt Securities Guarantee below, any collateral security,
assurance, or guarantee for those Offered Senior Debt Securities,
and
|
|
|
(24)
|
any
other terms of those Offered Senior Debt Securities that are not
inconsistent with the provisions of the Indenture. (Indenture,
Section 301).
|
FPL Group
Capital may sell Offered Senior Debt Securities at a discount below their
principal amount. Some of the important United States federal income
tax considerations applicable to Offered Senior 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 Senior 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 Senior Debt Securities
protection in the event of a highly-leveraged transaction involving FPL Group
Capital or FPL Group.
Security and
Ranking. The Offered Senior Debt Securities will be unsecured
obligations of FPL Group Capital. The Indenture does not limit FPL
Group Capitals ability to provide security with respect to other Senior Debt
Securities. All Senior Debt Securities issued under the Indenture
will rank equally and ratably with all other Senior Debt Securities issued under
the Indenture, except to the extent that FPL Group Capital elects to provide
security with respect to any Senior Debt Security without providing that
security to all outstanding Senior Debt Securities as allowed under the
Indenture. The Offered Senior Debt Securities will rank senior to FPL
Group Capitals Junior Subordinated Debentures. The Indenture does not
limit FPL Group Capitals 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 Senior 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 Capitals subsidiaries. The Indenture does not place any limit
on the amounts of liabilities, including debt or preferred stock, that FPL Group
Capitals 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 Senior Debt Security to the person in whose name that Offered Senior
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 Senior 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 Senior Debt
Security, it may pay that defaulted interest to the registered owner of that
Offered Senior 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 Senior 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 Senior Debt Securities at maturity will be
payable when such Offered Senior 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 Senior 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 Senior 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 Senior 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 Senior 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 Senior Debt Securities.
FPL Group
Capital will not be required to transfer or exchange any Offered Senior Debt
Security selected for redemption. Also, FPL Group Capital will not be
required to transfer or exchange any Offered Senior Debt Security during a
period of 15 days before selection of Offered Senior 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 Senior 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
Senior 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 Senior
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
Senior 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 Senior Debt Securities, on or prior to their
maturity. (Indenture, Section
701).
|
Limitation on
Liens. So long as any Senior 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 Senior 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 Capitals 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
Capitals 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 Capitals 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
Capitals 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 Capitals obligations on all Senior 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 officers 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 Senior Debt Securities of any
series:
|
|
(1)
|
failure
to pay interest on the Senior Debt Securities of that series within 30
days after it is due,
|
|
|
(2)
|
failure
to pay principal or premium, if any, on the Senior 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 Senior 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
Senior 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 Senior 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 Senior 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 Senior Debt Securities
of a particular series will not necessarily constitute an event of default with
respect to Senior Debt Securities of any other series issued under the
Indenture.
Remedies. If an
event of default applicable to the Senior Debt Securities of one or more series,
but not applicable to all outstanding Senior Debt Securities, exists, then
either the Indenture Trustee or the registered owners of at least 33% in
aggregate principal amount of the Senior Debt Securities of each of the affected
series may declare the principal of and accrued but unpaid interest on all the
Senior Debt Securities of that series to be due and payable
immediately. However, under the Indenture, some Senior Debt
Securities may provide for a specified amount less than their entire principal
amount to be due and payable upon that declaration. These Senior Debt
Securities are defined as Discount Securities in the Indenture.
If the
event of default is applicable to all outstanding Senior Debt Securities, then
only the Indenture Trustee or the registered owners of at least 33% in aggregate
principal amount of all outstanding Senior 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 Senior 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 Senior Debt Securities of that
series,
|
|
|
(b)
|
the
principal of and any premium on any Senior 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 Senior 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 Senior 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 Senior Debt Securities of that
series. However, if an event of default under the Indenture relates
to more than one series of Senior Debt Securities, only the registered owners of
a majority in aggregate principal amount of all affected series of Senior 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 Trustees sole
discretion, be adequate. (Indenture, Section 812).
No
registered owner of Senior 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 Senior Debt
Securities of that series,
|
|
|
(2)
|
the
registered owners of a majority in aggregate principal amount of the
outstanding Senior 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 Senior 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
Senior Debt Security for the enforcement of payment of the principal of or
premium, if any, or interest on that Senior Debt Security on or after the
applicable due date specified in that Senior 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 Senior
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 Capitals obligations under the Indenture and the Senior 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 Senior 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 Senior Debt Securities of
that series or tranche has been obtained,
or
|
|
|
(b)
|
when
no Senior 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 Senior Debt
Securities,
|
|
|
(6)
|
to
establish the form or terms of Senior 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 Senior 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 Senior Debt 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 Senior Debt Securities are
payable,
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(b)
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all
or any series or tranche of Senior Debt Securities may be transferred or
exchanged, and
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(c)
|
notices
and demands to or upon FPL Group Capital in respect of Senior Debt
Securities and the Indenture may be served,
or
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(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 Senior Debt
Securities of any series or tranche. (Indenture, Section
1201).
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The
registered owners of a majority in aggregate principal amount of the Senior 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 Senior 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 Senior 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 Senior 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 Senior 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 Senior Debt Securities of
all directly affected series, considered as one class, is
required. But, if FPL Group Capital issues any series of Senior Debt
Securities in more than one tranche and if the proposed supplemental indenture
directly affects the rights of the registered owners of Senior 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 Senior
Debt 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 on a Senior Debt Security
is due without the consent of the registered owner of that Senior Debt
Security,
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(2)
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reduce
any Senior Debt Securitys 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
Senior Debt Security,
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(3)
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reduce
any premium payable upon the redemption of a Senior Debt Security without
the consent of the registered owner of that Senior Debt
Security,
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(4)
|
change
the currency (or other property) in which a Senior Debt Security is
payable without the consent of the registered owner of that Senior Debt
Security,
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(5)
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impair
the right to sue to enforce payments on any Senior 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 Senior Debt
Security,
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(6)
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reduce
the percentage in principal amount of the outstanding Senior 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 Senior Debt Security of that series or
tranche,
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(7)
|
reduce
the requirements for quorum or voting of any series or tranche without the
consent of the registered owner of each outstanding Senior Debt Security
of that series or tranche, or
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(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 Senior Debt Securities of any series or tranche, without
the consent of the registered owner of each outstanding Senior Debt
Security affected by the
modification.
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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 Senior Debt Securities, or that modifies the rights of the
registered owners of Senior 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 Senior 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 Senior 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 Senior Debt Securities, Senior Debt Securities owned by FPL
Group Capital or any other obligor upon the Senior 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 Senior 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
Senior 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 Senior 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 Senior Debt Securities for the purposes of determining
whether registered owners of the required proportion of the outstanding Senior
Debt Securities have authorized that action. For these purposes, the
outstanding Senior Debt Securities will be computed as of the record
date. Any action of a registered owner of any Senior Debt Security
under the Indenture will bind every future registered owner of that Senior Debt
Security, or any Senior Debt Security replacing that Senior 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 Senior 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 Senior 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 Senior Debt Securities of one or
more series of Senior Debt Securities may remove the Indenture Trustee at any
time with respect to the Senior 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
Senior 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:
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(1)
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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
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(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).
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Notices. Notices to
registered owners of Senior Debt Securities will be sent by mail to the
addresses of those registered owners as they appear in the security register for
those Senior 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 Senior Debt Security is
registered as the absolute owner of that Senior Debt Security, whether or not
that Senior 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 Senior Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York, without regard to New Yorks
conflict of law principles, except to the extent that the law of any other
jurisdiction is mandatorily applicable. (Indenture, Section
112).
THE FPL GROUP CAPITAL SENIOR DEBT
SECURITIES
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 Senior 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 Senior Debt Securities that are covered by the Guarantee Agreement to the
registered owners of those Senior Debt Securities, according to the terms of
those Senior Debt Securities and the Indenture. Pursuant to the
Guarantee Agreement, all of the Senior Debt Securities are covered by the
Guarantee Agreement except Senior Debt Securities that by their terms are
expressly not entitled to the benefit of the Guarantee Agreement. All
of the Offered Senior 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 Senior 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 Senior 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 the FPL
Group Junior Subordinated Debentures (each as defined below) and FPL Groups
guarantee of FPL Group Capitals 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 Groups
subsidiaries. Neither the Indenture nor the Guarantee Agreement
places any limit on the amount of liabilities, including debt or preferred
stock, that FPL Groups 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 Senior Debt Securities covered by
the Guarantee Agreement have the right to:
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(1)
|
direct
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee under the Guarantee Agreement,
or
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(2)
|
direct
the exercise of any trust or power conferred upon the Guarantee Trustee
under the Guarantee Agreement. (Guarantee Agreement,
Section 3.01).
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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 Senior 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 Senior 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 Senior
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 Senior 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 Senior 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 Senior 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 Senior Debt Securities covered by
the Guarantee Agreement. However, the right of any registered owner
of Senior Debt Securities covered by the Guarantee Agreement to receive payment
under the Guarantee Agreement on the due date of the Senior 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 Senior 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).
FPL Group
will issue its debt securities (other than the FPL Group Junior Subordinated
Debentures (as defined below under Description of the FPL Group and FPL Group
Capital Junior Subordinated Debentures and the FPL Group Subordinated
Guarantee)), in one or more series, under an Indenture, between FPL Group and
The Bank of New York, as trustee. The terms of any offered debt
securities will be described in a supplement to this prospectus.
General. The
following statements describing FPL Groups common stock are not intended to be a
complete description. For additional information, please see FPL
Groups Restated Articles of Incorporation, as amended (Charter), and its bylaws,
which set forth the terms of the common stock. Please also see 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 contains 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 they 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
Groups authorized capital stock consists of 800,000,000 shares of common stock,
$.01 par value, and 100,000,000 shares of serial preferred stock, $.01 par
value. As of March 31, 2007, 406,415,900 shares of common stock were
issued and outstanding and no shares of serial preferred stock were issued and
outstanding. 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. 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
Description of Preferred Stock and FPL Group Guarantee of FPL Group Capital
Preferred StockFPL Group Preferred Stock below.
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 Groups 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 and Description of Preferred Stock and
FPL Group Guarantee of FPL Group Capital Preferred StockFPL 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.
FPL
Groups Charter 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, among other things,
dividends paid to it by its subsidiaries, including Florida Power & Light
Company. Florida Power & Light Companys ability to pay dividends
is limited by restrictions contained in the Mortgage. However, these
restrictions do not currently limit Florida Power & Light Companys 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 the right, from time to time, to defer the payment of interest on
its outstanding junior subordinated debentures for a deferral period of up to 20
consecutive quarters. FPL Group Capital has also issued two series of
junior subordinated debentures not in connection with preferred trust
securities, which junior subordinated debentures are guaranteed by FPL
Group. FPL Group Capital has the right, from time to time, to defer
the payment of interest on these outstanding junior subordinated debentures on
one or more occasions for up to 10 consecutive years. FPL Group,
Florida Power & Light Company and/or FPL Group Capital may issue, from time
to time, additional junior subordinated debentures. FPL Group,
Florida Power & Light Company and/or FPL Group Capital may have similar
rights to defer the payment of interest on those additional junior subordinated
debentures. If FPL Group Capital and/or FPL Group exercises any such
right to defer the payment of interest, FPL Group would not be able to pay
dividends on its common stock or preferred stock during the periods when such
payments are delayed with certain limited exceptions. If Florida
Power & Light Company exercises any such right to defer the payment of
interest , it would not be able to pay dividends to any holder of its common
stock or preferred stock, including FPL Group, during the periods when such
payments are delayed with certain limited exceptions. In addition,
FPL Group, FPL Group Capital and Florida Power & Light Company may issue
other securities in the future that have a similar right to delay interest or
distribution payments and similar dividend restrictions in the event of the
exercise of such rights.
In
addition, FPL Group may issue one or more series of its serial preferred stock,
$.01 par value, without the approval of its shareholders. Each series
may have terms that differ from those of any other series and may provide for
dividend, liquidation, voting and other rights that are superior or prior to
those of FPL Groups common stock.
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:
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(1)
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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;
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(2)
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provides
that a vacancy on the Board of Directors may be filled only by the
remaining directors;
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(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;
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(4)
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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
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(5)
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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.
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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:
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(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;
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(2)
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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;
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(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;
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(4)
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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
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(5)
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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.
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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 Groups 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 and FPL Group Guarantee of FPL Group Capital Preferred StockFPL
Group Preferred Stock below.
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 and FPL Group Guarantee of
FPL Group Capital Preferred Stock below.
General. The
following statements describing FPL Groups preferred stock and FPL Group
Capitals preferred stock are not intended to be a complete
description. For additional information, please see FPL Groups
Charter and its bylaws, and FPL Group Capitals Articles of Incorporation, as
amended (FPL Group Capitals Charter), and its bylaws,
respectively. You should read this summary together with the articles
of amendment to FPL Groups Charter or FPL Group Capitals 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 Mortgage, which contains 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 of preferred stock 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 Groups Charter, which will establish the terms of
the preferred stock being offered. These terms will include any of
the following that apply to that series:
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(1)
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the
title of that series of preferred
stock,
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(2)
|
the
number of shares in the series,
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(3)
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the
dividend rate, or how such rate will be determined, and the dividend
payment dates for the series,
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(4)
|
whether
the series will be listed on a securities
exchange,
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(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,
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(6)
|
any
sinking fund or other provisions that would obligate FPL Group to
repurchase, redeem or retire the series of preferred
stock,
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(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,
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(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,
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|
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(9)
|
the
voting rights, if any, and
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|
|
(10)
|
any
other terms that are not inconsistent with the provisions of FPL Groups
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 FPL Group Common
Stock.
If FPL
Group Capital or FPL Group exercises a right to defer the payment of interest on
junior subordinated debentures, including those junior subordinated debentures
issued in connection with preferred trust
securities,
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. If the trusts formed by Florida Power & Light Company
issue preferred trust securities and Florida Power & Light Company exercises
a right to defer the payment of interest on junior subordinated debentures
issued in connection with preferred trust securities, Florida Power & Light
Company will not be able to pay dividends on its common stock or preferred stock
during the periods when such payments are delayed with certain limited
exceptions. In addition, FPL Group, FPL Group Capital and Florida
Power & Light Company may issue other securities in the future that have a
similar right to delay interest or distribution payments and similar dividend
restrictions in the event of the exercise of such rights. See
Description of FPL Group Common StockDividend 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, $.01 par value, 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 of preferred stock 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 Capitals Charter, which will establish the
terms of the preferred stock being offered. These terms will include
any of the following that apply to that series:
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|
(1)
|
the
title of that series of preferred
stock,
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(2)
|
the
number of shares in the series,
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|
(3)
|
the
dividend rate, or how such rate will be determined, and the dividend
payment dates for the series,
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(4)
|
whether
the series will be listed on a securities
exchange,
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(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,
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(6)
|
any
sinking fund or other provisions that would obligate FPL Group Capital to
repurchase, redeem or retire the series of preferred
stock,
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|
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(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,
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(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,
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(9)
|
the
voting rights, if any, and
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|
(10)
|
any
other terms that are not inconsistent with the provisions of FPL Group
Capitals Charter.
|
If FPL
Group Capital exercises a right to defer the payment of interest on junior
subordinated debentures, including those junior subordinated debentures issued
in connection with preferred trust securities, 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. In addition,
FPL Group Capital may issue other securities in the future that have a similar
right to delay interest or distribution payments and similar dividend
restrictions in the event of the exercise of such rights. See
Description of FPL Group Common StockDividend 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 Groups guarantee of FPL Group Capitals 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 Groups common stock. A prospectus supplement will
describe the terms of FPL Groups guarantee of FPL Group Capitals 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 Groups subsidiaries. FPL Groups
guarantee of FPL Group Capital preferred stock does not place any limit on the
amount of liabilities, including debt or preferred stock, that FPL Groups
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 or preferred stock at a future date or
dates. The consideration per share of common stock or preferred 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, debt securities of FPL Group,
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 or preferred 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.
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. In connection with the issuance of Trust Securities by FPL
Group Capital Trust, the related FPL Group Capital Junior Subordinated
Debentures (as defined below under Description of the FPL Group and FPL Group
Capital Junior Subordinated Debentures and the FPL Group Subordinated Guarantee)
will be held by FPL Group Capital Trust, and in connection with the issuance of
Trust Securities by FPL Group Trust, the related FPL Group Junior Subordinated
Debentures (as defined below under Description of the FPL Group and FPL Group
Capital Junior Subordinated Debentures and the FPL Group Subordinated Guarantee)
will be held by FPL Group Trust. 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 FPL Group and FPL Group Capital Junior Subordinated Debentures and the FPL
Group Subordinated GuaranteeGeneral), 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:
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(1)
|
with
respect to the Preferred Trust Securities issued by FPL Group Capital
Trust only, FPL Groups guarantee of FPL Group Capitals payment obligations
under the FPL Group Capital Junior Subordinated Debentures (referred to in
this prospectus as the Subordinated
Guarantee);
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(2)
|
with
respect to the Preferred Trust Securities issued by FPL Group Trust only,
FPL Groups obligations under the FPL Group Junior Subordinated
Debentures;
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(3)
|
the
rights of holders of Preferred Trust Securities to enforce those
obligations in (1) and (2) above, as
applicable;
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(4)
|
FPL
Groups agreement to pay the expenses of the Trust;
and
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(5)
|
FPL
Groups guarantee of payments due on the Preferred Trust Securities to the
extent of the Trusts 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 its sale of the Trust Securities to
purchase FPL Group Capital Junior Subordinated Debentures, and FPL Group Trust
will use the proceeds from its 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, or another subordinated
indenture among FPL Group Capital, FPL Group and The Bank of New York as
specified in the related prospectus supplement. The FPL Group Junior
Subordinated Debentures will be issued under a subordinated indenture between
FPL Group and The Bank of New York, as trustee. In connection with
the issuance of Trust Securities, the Junior Subordinated Debentures (as defined
below under Description of the FPL Group and FPL Group Capital Junior
Subordinated Debentures and
the FPL
Group Subordinated Guarantee) 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
issued in connection therewith. 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
FPL Group and FPL Group Capital Junior Subordinated Debentures and the FPL Group
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.
Unless
otherwise provided in the related prospectus supplement, the issuer of the
Junior Subordinated Debentures may have the option to defer the payment of
interest from time to time on the Junior Subordinated Debentures for one or more
periods, in which case, if the Junior Subordinated Debentures were issued in
connection with Preferred Trust Securities, distributions on the Preferred Trust
Securities would be deferred during any such period. Unless otherwise
provided in the related prospectus supplement, distributions would, however,
continue to accumulate. (Trust Agreement,
Section 4.01). During any optional deferral period, or for so
long as an Event of Default under the Subordinated Indenture resulting from a
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 deferral of the payment of interest on the FPL Group
Capital Junior Subordinated Debentures, nor FPL Group, with respect to the
deferral of the payment of interest on the FPL Group Junior Subordinated
Debentures, may:
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|
(1)
|
declare
or pay any dividend or distribution on its capital
stock;
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|
(2)
|
redeem,
purchase, acquire or make a liquidation payment with respect to any of its
capital stock;
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|
(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
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|
(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 payment of interest is deferred requiring it to purchase, redeem
or acquire its capital stock;
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|
|
(2)
|
any
payment, repayment, redemption, purchase, acquisition or declaration of
dividend listed as restricted payments 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)
|
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;
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|
(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;
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|
|
(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;
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|
(6)
|
payments
under any preferred trust securities guarantee or guarantee of
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
subordinated debentures (as the case may be) is paid on all preferred
trust securities or 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 subordinated debentures
(as the case may be) is then entitled if paid in
full;
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(7)
|
payments
under any guarantee of junior subordinated debentures executed and
delivered by FPL Group (including a FPL Group Subordinated Guarantee), so
long as the amount of payments made on any junior subordinated debentures
is paid on all junior subordinated debentures then outstanding on a pro
rata basis in proportion to the full payment to which each series of
junior subordinated debentures is then entitled if paid in
full;
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|
|
(8)
|
dividends
or distributions by FPL Group Capital on its capital stock to the extent
owned by FPL Group; or
|
|
|
(9)
|
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 (8) and (9) above are not applicable to an optional deferral
period on the FPL Group Junior Subordinated Debentures.
Unless
otherwise provided in the related prospectus supplement, before an optional
deferral period ends, FPL Group Capital or FPL Group, as the case may be, may
further defer the payment of interest. Unless otherwise provided in
the related prospectus supplement, no optional deferral period may exceed the
period of time specified in that prospectus supplement. After any
optional deferral period and the payment of all amounts then due, FPL Group
Capital or FPL Group, as the case may be, may select a new optional deferral
period. No interest period may be deferred 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 laws, 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 related 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 related 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:
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(1)
|
the
expiration of the term of the
Trust;
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|
|
(2)
|
the
bankruptcy, dissolution or liquidation of FPL
Group;
|
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|
(3)
|
the
redemption of all of the Preferred Trust Securities of the
Trust;
|
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|
(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 related 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:
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|
(1)
|
the
occurrence of an event of default as described in the related 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 holders
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 related
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 GuaranteeModification 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:
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(1)
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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 FPL Group and FPL Group Capital Junior
Subordinated Debentures and the FPL Group Subordinated GuaranteeGeneral),
or execute any trust or power conferred on the Subordinated Indenture
Trustee with respect to the Junior Subordinated
Debentures;
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(2)
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waive
any past default under the related Subordinated
Indenture;
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(3)
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exercise
any right to rescind or annul a declaration that the principal of all the
Junior Subordinated Debentures will be due and payable;
or
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(4)
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consent
to any amendment, modification or termination of the related Subordinated
Indenture or the Junior Subordinated Debentures, where that consent will
be required,
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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 Trustees 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:
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(1)
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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;
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(2)
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change
the name of the Trust; or
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(3)
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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 Trusts exemption from the status of an investment company under the
Investment Company Act of 1940.
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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:
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(1)
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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
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(2)
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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 Trusts status as a grantor trust for
federal income tax purposes (and not an association taxable as a
corporation) or affect the Trusts exemption from the status of an
investment company under the Investment Company Act of
1940. (Trust Agreement, Section
10.03(b)).
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Each
affected holder of Preferred Trust Securities must consent to any amendment to
the Trust Agreement that:
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(1)
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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;
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(2)
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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
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(3)
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modify
the provisions described in clauses (1) and (2) above. (Trust
Agreement, Section 10.03(c)).
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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:
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(1)
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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
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(2)
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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).
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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
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(1)
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the
Trust will not be deemed to be an investment company required to be
registered under the Investment Company Act of
1940,
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(2)
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the
Trust will not be taxed as a corporation,
and
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(3)
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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.
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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 Agreements 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):
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(1)
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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;
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(2)
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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
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(3)
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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
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Preferred
Trust Securities upon maturity or redemption of the Junior Subordinated
Debentures as provided in the Trust Agreement), the lesser
of:
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(a)
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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
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(b)
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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.
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(Preferred
Trust Securities Guarantee Agreement, Section 1.01). FPL Groups
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:
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(1)
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with
respect to the Preferred Trust Securities issued by FPL Group Capital
Trust only, the Subordinated
Guarantee;
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(2)
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with
respect to the Preferred Trust Securities issued by FPL Group Trust only,
FPL Groups obligations under the FPL Group Junior Subordinated
Debentures;
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(3)
|
the
rights of holders of Preferred Trust Securities to enforce those
obligations in (1) and (2) above, as
applicable;
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(4)
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FPL
Groups agreement to pay the expenses of the Trust;
and
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(5)
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the
Preferred Trust Securities
Guarantee.
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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:
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(1)
|
subordinate
and junior in right of payment to all other liabilities of FPL Group,
including the Subordinated Guarantee and the Senior Debt Securities
Guarantee (except those made pari passu or subordinate by their
terms);
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(2)
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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
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(3)
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senior
to FPL Group common stock. (Preferred Trust Securities
Guarantee Agreement,
Section 6.01).
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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 Groups 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 Groups
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:
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(1)
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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
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(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).
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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 Trustees 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:
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(1)
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full
payment of the redemption price, plus accrued and unpaid distributions to
the redemption date, for all the Preferred Trust
Securities;
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(2)
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the
distribution of Junior Subordinated Debentures to holders of the Preferred
Trust Securities in exchange for all of the Preferred Trust Securities;
or
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(3)
|
full
payment of the amounts payable upon liquidation of the
Trust.
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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).
JUNIOR SUBORDINATED DEBENTURES AND
THE
FPL GROUP SUBORDINATED
GUARANTEE
General. The junior
subordinated debentures issued by FPL Group Capital are referred to in this
prospectus as the FPL Group Capital Junior Subordinated
Debentures. The junior subordinated debentures issued by FPL Group
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. The FPL Group Capital Junior Subordinated Debentures 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, an Indenture, dated as of September 1, 2006, among FPL
Group Capital, FPL Group and The Bank of New York, as trustee, or another
subordinated indenture among FPL Group Capital, FPL Group and The Bank of New
York as specified in the related prospectus supplement. The indenture
or indentures 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 or indentures 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 will be issued by FPL Group in one or more
series under an indenture or indentures between FPL Group and The Bank of New
York, as trustee. In connection with the issuance of Trust
Securities, the Property Trustee will hold the FPL Group Capital Junior
Subordinated Debentures on behalf of FPL Group Capital Trust, or the FPL Group
Junior Subordinated Debentures on behalf of FPL Group Trust, as the case may be,
as trust assets. 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, the Subordinated Guarantee or the
Subordinated Indenture. You should read this summary together with
the Subordinated Indenture and the officers 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
Subordinated Guarantee), the forms of officers 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
issue of the FPL Group Capital Junior Subordinated Debentures and the FPL Group
Junior Subordinated Debentures will constitute a separate series under the
respective Subordinated Indenture. In connection with the issuance of
Trust Securities, the aggregate principal amount of each series will be limited
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.
All FPL
Group Capital Junior Subordinated Debentures of one series need not be issued at
the same time, and a series may be re-opened for issuances of additional FPL
Group Capital Junior Subordinated Debentures of such series. This
means that FPL Group Capital may from time to time, without notice to, or the
consent of the existing holders of the FPL Group Capital Junior Subordinated
Debentures of a particular series, create and issue additional FPL Group Capital
Junior Subordinated Debentures of such series. Such additional FPL
Group Capital Junior Subordinated Debentures will have the same terms as the FPL
Group Capital Junior Subordinated Debentures of such series in all respects
(except for the payment of interest accruing prior to the issue date of the
additional FPL Group Capital Junior Subordinated Debentures or except for the
first payments of interest following the issue date of the additional FPL Group
Capital Junior Subordinated Debentures) so that the additional FPL Group Capital
Junior Subordinated Debentures may be consolidated and form a single series with
the FPL Group Capital Junior Subordinated Debentures of such
series.
Similarly,
all FPL Group Junior Subordinated Debentures of one series need not be issued at
the same time, and a series may be re-opened for issuances of additional FPL
Group Junior Subordinated Debentures of such series, in the manner described in
the paragraph above with respect to FPL Group Capital Junior Subordinated
Debentures.
The FPL
Group Capital Junior Subordinated Debentures will be unsecured, subordinated
obligations of FPL Group Capital which rank junior to all of FPL Group Capitals
Senior Indebtedness. The FPL Group Junior Subordinated Debentures
will be unsecured, subordinated obligations of FPL Group which rank junior to
all of FPL Groups Senior Indebtedness. The term Senior Indebtedness
with respect to FPL Group Capital or FPL Group, as the case may be, will be
defined in the related prospectus supplement. All Junior Subordinated
Debentures issued under a particular Subordinated Indenture will rank equally
and ratably with all other Junior Subordinated Debentures issued under that
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 series
of Junior Subordinated Debentures without providing that security to all
outstanding Junior Subordinated Debentures as allowed under the respective
Subordinated Indenture. Junior Subordinated Debentures issued under a
particular Subordinated Indenture may rank senior to, pari passu with, or junior
to, Junior Subordinated Debentures issued by the same issuer under another
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 Groups Senior Indebtedness, and may rank senior to, pari passu with, or
junior to, FPL Groups obligations under a separate Subordinated
Guarantee. 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 relating to those Junior Subordinated
Debentures:
|
|
(1)
|
the
title of those Junior Subordinated
Debentures,
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(2)
|
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)
|
the
security registrar and any paying agent or agents for those Junior
Subordinated Debentures,
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(8)
|
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
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ascertainable
outside of the Subordinated Indenture, the manner in which those amounts
will be determined,
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(15)
|
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)
|
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 issuers 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)
|
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)
|
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 of FPL Group Capital Junior Subordinated Debentures
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, if the Junior Subordinated Debentures are issued in
connection with the issuance of Trust
Securities,
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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)
|
certain
events of bankruptcy, insolvency or reorganization of FPL Group Capital or
FPL Group, as the case may be;
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(2)
|
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)
|
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).
|
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).
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 Capitals 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 Capitals 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 Groups subsidiaries. The FPL Group Subordinated
Indenture does not place any limit on the amount of liabilities including debt
or preferred stock, that FPL Groups 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)
|
certain
events of bankruptcy, insolvency or reorganization of FPL
Group;
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|
(2)
|
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)
|
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).
|
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 Groups
subsidiaries. The FPL Group Capital Subordinated Indenture does not
place any limit on the amount of liabilities, including debt or preferred stock,
that FPL Groups 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)
|
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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|
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(2)
|
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).
|
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 issued in connection with the issuance of Trust Securities and
are subsequently 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:
|
|
(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
Subordinated Indenture Securities, on or prior to their maturity,
or
|
|
|
(2)
|
in
the case of a deposit made prior to the maturity of that series of
Subordinated Indenture 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
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
|
|
|
(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 Subordinated Indenture Securities, on or prior to their
maturity. (Subordinated Indenture, Section
701).
|
Option to Defer Interest
Payments. Unless otherwise provided in a related prospectus
supplement, FPL Group Capital, or FPL Group, as the case may be, may have the
option to defer the payment of interest from time to time on the Junior
Subordinated Debentures for one or more periods. As a consequence, if
the Junior Subordinated Debentures are issued in connection with Preferred Trust
Securities, distributions on the Preferred Trust Securities would be deferred
during any optional deferral period. Interest would, however,
continue to accrue on the Junior Subordinated Debentures. Unless
otherwise provided in a related prospectus supplement, during any optional
deferral period, or for so long as an Event of Default under the Subordinated
Indenture resulting from a payment default (or a payment default under the
Preferred Trust Securities Guarantee if the Junior Subordinated Debentures are
issued in connection with Preferred Trust Securities) 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:
|
|
(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, in the case of FPL Group Capital Junior
Subordinated Debentures issued in connection with Preferred Trust
Securities, 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 if the Junior
Subordinated Debentures are issued in connection with Preferred Trust
Securities (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 payment of interest is deferred requiring it to purchase, redeem
or acquire its capital stock;
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|
|
(2)
|
any
payment, repayment, redemption, purchase, acquisition or declaration of
dividend listed as restricted payments 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
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
subordinated debentures (as the case may be) is paid on all preferred
trust securities or 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 subordinated debentures
(as the case may be) is then entitled if paid in
full;
|
|
|
(7)
|
payments
under any guarantee of junior subordinated debentures executed and
delivered by FPL Group (including a FPL Group Subordinated Guarantee), so
long as the amount of payments made on any junior subordinated debentures
is paid on all junior subordinated debentures then outstanding on a pro
rata basis in proportion to the full payment to which each series of
junior subordinated debentures is then entitled if paid in
full;
|
|
|
(8)
|
dividends
or distributions by FPL Group Capital on its capital stock to the extent
owned by FPL Group; or
|
|
|
(9)
|
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 (8) and (9) above are not applicable to an optional deferral
period on the FPL Group Junior Subordinated Debentures.
Unless
otherwise provided in a related prospectus supplement, before an optional
deferral period ends, FPL Group Capital, or FPL Group, as the case may be, may
further defer the payment of interest. Unless otherwise provided in
the related prospectus supplement, no optional deferral period may exceed the
period of time specified in that prospectus supplement. After any
optional deferral period and the payment of all amounts then due,
FPL
Group
Capital, or FPL Group, as the case may be, may select a new optional deferral
period. No interest period may be deferred beyond the maturity of the
Junior Subordinated Debentures. If the Junior Subordinated Debentures
are issued in connection with Preferred Trust Securities, 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 optional deferral 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 defer 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. If the Junior Subordinated Debentures are issued in
connection with the issuance of Trust Securities and 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, so long as any Preferred
Trust Securities remain outstanding, 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. 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).
If the
Junior Subordinated Debentures are issued in connection with the issuance of
Trust Securities, 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)).
Subject
to applicable law, including United States federal securities laws, 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)
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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
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case
of the FPL Group Subordinated Indenture, is merged, or the entity that
acquires or leases FPL Group Capitals or FPL Groups, as the case may be,
in the case of the FPL Group Capital Subordinated Indenture, or FPL
Groups, 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 Capitals or FPL Groups, as the case may be, in the case
of the FPL Group Capital Subordinated Indenture, or FPL Groups, 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)
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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
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(3)
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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 officers 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:
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(1)
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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)
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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;
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(3)
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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)
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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).
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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:
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(1)
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failure
to pay interest on the Subordinated Indenture Securities of that series
within 30 days after it is due (provided, however, that a failure to pay
interest during a valid optional deferral period will not constitute an
event of default),
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(2)
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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)
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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
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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,
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(4)
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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)
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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
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(6)
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any
other event of default specified with respect to the Subordinated
Indenture Securities of that series. (Subordinated Indenture,
Section 801).
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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:
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(1)
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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:
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(a)
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all
overdue interest on all Subordinated Indenture Securities of that
series,
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(b)
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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,
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(c)
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interest
on overdue interest for that series,
and
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(d)
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all
amounts due to the Subordinated Indenture Trustee under the Subordinated
Indenture, and
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(2)
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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).
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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 Trustees 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:
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(1)
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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,
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(2)
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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
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(3)
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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).
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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 the Junior
Subordinated Debentures were issued in connection with the issuance of Trust
Securities and 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 Trustees 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, in such a situation, 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:
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(1)
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to
provide for the assumption by any permitted successor to FPL Group Capital
or FPL Group of FPL Group Capitals or FPL Groups, in the case of the FPL
Group Capital Subordinated Indenture, or by any permitted successor to FPL
Group of FPL Groups, 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,
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(2)
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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,
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(3)
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to
add any additional events of
default,
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(4)
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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
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(a)
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when
the required consent of the registered owners of Subordinated Indenture
Securities of that series or tranche has been obtained,
or
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(b)
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when
no Subordinated Indenture Securities of that series or tranche remain
outstanding under the Subordinated
Indenture,
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(5)
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to
provide collateral security for all but not a part of the Subordinated
Indenture Securities,
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(6)
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to
establish the form or terms of Subordinated Indenture Securities of any
other series or tranche,
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(7)
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to
provide for the authentication and delivery of bearer securities and the
related coupons and for other matters relating to those bearer
securities,
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(8)
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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,
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(9)
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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,
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(10)
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to
change any place where
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(a)
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the
principal of and premium, if any, and interest on all or any series or
tranche of Subordinated Indenture Securities are
payable,
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(b)
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all
or any series or tranche of Subordinated Indenture Securities may be
transferred or exchanged, and
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(c)
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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
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(11)
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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).
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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)
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change
the dates on which the principal of or interest (except as described above
under Option to Defer Interest Payments) on a Subordinated Indenture
Security is due without the consent of the registered owner of that
Subordinated Indenture Security,
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(2)
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reduce
any Subordinated Indenture Securitys 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,
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(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,
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(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,
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(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,
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(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. If Junior Subordinated Debentures were issued in connection
with the issuance of Trust Securities, 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, if Junior Subordinated Debentures
were issued in connection with the issuance of Trust Securities, 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:
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(1)
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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
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(2)
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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).
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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 Yorks 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 FPL Group Capital Senior Debt
Securities above, (ii) Guarantee Trustee under the Guarantee Agreement described
under Description of the FPL Group Capital Senior Debt Securities Guarantee
above, (iii) purchase contract agent under a purchase contract agreement
described under Description of FPL Group 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 preferred trust
securities trustee and property trustee with respect to FPL Group Capital
Trust Is preferred trust securities. The Bank of New York
(Delaware) acts as the Delaware Trustee under the Trust Agreement and as
Delaware trustee under the Trust Agreement entered into in connection with FPL
Group Capital Trust Is preferred trust securities.
FPL
Group, FPL Group Capital and the Trust may sell the securities offered pursuant
to this prospectus (Offered Securities):
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(1)
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through
underwriters or dealers,
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(2)
|
through
agents, or
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(3)
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directly
to one or more purchasers.
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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 trusts 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 and managements report on the effectiveness of
internal control over financial reporting incorporated in this prospectus by
reference from FPL Groups Annual Report on Form 10-K for the year ended December
31, 2006, 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.
Squire,
Sanders & Dempsey L.L.P., Miami, Florida, and Thelen Reid Brown Raysman
& Steiner 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 Brown Raysman
& Steiner 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 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. Squire, Sanders & Dempsey L.L.P. may rely as to all
matters of New York law upon the opinion of Thelen Reid Brown Raysman &
Steiner 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 or in any written communication
from FPL Group, FPL Group Capital or the Trust specifying the final terms of a
particular offering of securities. Neither FPL Group, FPL Group
Capital nor the Trust has authorized anyone else to provide you with additional
or different information. Neither FPL Group, FPL Group Capital 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.
$
%
Debentures, Series due June 15, 2013
$
Floating
Rate Debentures, Series due June , 2011
The
Debentures will be Absolutely, Irrevocably and
Unconditionally
Guaranteed by
FPL
Group, Inc.
___________
PROSPECTUS
SUPPLEMENT
June
, 2008
___________
| Barclays Capital | |||
| Credit Suisse | |||
| Lehman Brothers | |||
|
RBS Greenwich
Capital
|
___________
| Lazard Capital Markets |
Morgan
Keegan & Company, Inc.
|