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Policy on Securities Trading by Company Personnel, Including AddendumThe applicability of this policy | The reason for and purpose of this policy | Statement of policy | Transactions under company plans | Addendum The applicability of this policyThis Policy applies to all of the directors, officers and other employees (collectively sometimes referred to as the “insiders”) of FPL Group, Inc. and its direct and indirect subsidiaries (all of which are collectively referred to herein as the “Company”). The reason for and purpose of this policyThe purchase or sale of securities while one is aware of material nonpublic information, or the disclosure of material nonpublic information to others who then trade in securities based on such a “tip”, is prohibited by the federal securities laws. If you know such information about the Company or any business with whom the Company has a business relationship and you trade our or their securities, such as stocks or bonds, while in possession of that information or tell others about it before it is made public, you may have committed an insider trading violation. Insider trading violations are pursued vigorously by the Securities and Exchange Commission (the “SEC”) and federal prosecutors and may be punished severely. While federal authorities concentrate their efforts on the individuals who trade, or who tip inside information to others who trade, the federal securities laws also impose potential liability on the Company and other "controlling persons" if they fail to take reasonable steps to prevent insider trading by Company personnel. We have adopted this Policy both to satisfy the Company's obligation
to prevent insider trading and to help Company insiders avoid the
severe consequences associated with violations of the insider trading
laws. This Policy also is intended to avoid even the appearance of
improper conduct on the part of any employee or director of the Company.
We have all worked hard over the years to establish a reputation
for integrity and ethical conduct, and that reputation is a valuable
business asset we must work to preserve. A failure to comply with this Policy may also subject an employee to Company-imposed sanctions, including dismissal for cause, whether or not the employee's failure to comply results in a violation of law. A violation of law, or even questionable conduct that leads to an SEC investigation that does not result in prosecution, can tarnish one's reputation and irreparably damage a career. This Policy is not meant to restrict the freedom of Company insiders to make appropriate personal investments, or the Company's right to legitimately use and disclose inside information in the ordinary conduct of its business. Statement of policyGeneral. It is the policy of the Company that no director, officer or other employee of the Company who is aware of material nonpublic information relating to the Company may, directly or through family members or other persons or entities: (a) buy or sell securities of the Company (other than pursuant to a pre-approved trading plan that complies with SEC Rule 10b5-1), or engage in any other action to take personal advantage of that information, or (b) pass that information on to others outside the Company, including family and friends. The Company is required under Regulation FD of the federal securities laws to avoid the selective disclosure of material nonpublic information. The Company has established procedures for releasing material information in a manner that is designed to achieve broad public dissemination of the information immediately upon its release. You may not, therefore, disclose information to anyone outside the Company, including family members and friends, other than in accordance with those procedures. You also may not discuss material nonpublic information relating to the Company or its business in an internet "chat room" or similar internet-based forum, whether or not your identity is disclosed. In addition, it is the policy of the Company that no director, officer or other employee of the Company who, in the course of working for the Company, learns of material nonpublic information about a company with which the Company does business, including a customer or supplier of the Company, may trade in that company's securities until the information becomes public or is no longer material. Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure) are not excepted from this Policy. The securities laws do not recognize such mitigating circumstances, and, in any event, even the appearance of an improper transaction must be avoided to preserve the Company's reputation for adhering to high standards of ethical conduct. Remember that anyone scrutinizing your transactions will be doing so after the fact, with the benefit of hindsight. As a practical matter, before engaging in any transaction, you should carefully consider how enforcement authorities and others might view the transaction in hindsight. Material Information. It is not possible to define all categories of material information. However, information should be regarded as material if there is a reasonable likelihood that it would be considered significant by an investor in making a decision to buy, hold or sell securities. While it may sometimes be difficult under this standard to determine whether particular information is material, any information that could be expected to affect the Company's stock price, whether it is positive or negative, should be considered material. In addition, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of such information may include:
When Information is "Public." Nonpublic information is information that has not been previously disclosed to the general public and is not otherwise available to the general public. If you are aware of material nonpublic information, you may not trade until the information has been disclosed broadly to the marketplace (such as by a Company press release or SEC filing) and the investing public has had time to absorb the information. To avoid the appearance of impropriety, as a general rule, information should not be considered absorbed by the marketplace until after the close of business on the first Trading Day following the date of public disclosure of the information, or at such time as such nonpublic information is no longer material. As used herein, the term “Trading Day” shall mean a day on which the New York Stock Exchange is open for trading. For example, if during a typical Monday through Friday five Trading Day week the Company were to make an announcement on a Monday, you should not trade in the Company's securities until Wednesday morning. Or if an announcement were made on a Friday, then the following Tuesday generally would be the first eligible trading day. Transactions by Family Members. The insider trading policy also applies to your family members who reside with you, anyone else who lives in your household, and any family members who do not live in your household but whose transactions in Company securities are directed by you or are subject to your influence or control (such as parents or children who consult with you before they trade in Company securities). You are responsible for the transactions of these other persons and therefore should make them aware of the need to confer with you before they trade in the Company's securities. Transactions under company plansStock Option Exercises. For purposes of this Policy, the Company considers the exercise of stock options for cash under the Company’s Long Term Incentive Plan, or the exercise of a tax withholding right pursuant to which you elect to have the Company withhold shares subject to an option to satisfy tax withholding requirements, when you possess material nonpublic information (but not the sale of any such shares), to each be exempt from this Policy. Such exemption is appropriate because the other party to the transaction is the Company itself and the price does not vary with the market but is fixed by the terms of the option agreement or the plan. In the event that the Company is in possession of material nonpublic information when you desire to exercise a stock option, the Company shall inform you that the Company is in possession of material nonpublic information and that any resale by you of shares acquired upon exercise of such options will be restricted until such information is disclosed. You may then elect to defer exercise of the stock option, assuming it is not expiring. This Policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option (where permissible) and to any other market sale for the purpose of generating the cash needed to pay the exercise price of an option or the related withholding taxes. Thrift Plans. The Company's insider trading policy does not apply to purchases of Company stock in our employee thrift plans resulting from your periodic contribution of money to the plan pursuant to your payroll deduction election or any Company matching contribution relating thereto. This Policy does apply, however, to certain elections you may make under the thrift plans, including: (a) an election to increase or decrease the percentage of your periodic contributions that will be allocated to the Company stock fund, (b) an election to make an intra-plan transfer of an existing account balance into or out of the Company stock fund, (c) an election to borrow money against your thrift plan account if the loan will result in a liquidation of some or all of your Company stock fund balance, and (d) your election to pre-pay a plan loan if the pre-payment will result in allocation of loan proceeds to the Company stock fund. Deferred Compensation Plan. The Company's insider trading policy does not apply to the share units or phantom shares credited under our deferred compensation plan in consideration of your periodic contribution of money or stock awards to the plan pursuant to the election you made at the time of your annual enrollment in the plan. This Policy also does not apply to share units or phantom shares credited in consideration of your lump sum contributions to the plan, provided that you elected to participate by lump-sum payment at the beginning of the applicable enrollment period. This Policy does apply to your election to participate in the share unit or phantom share deferral accounts under the plan for any enrollment period, and to any modification or revocation of that election or early distribution pursuant to the plan, as well as to any exchange in respect of share units or any early distribution in respect of share units or phantom shares (in each case, to the extent any such modification, election, revocation, exchange or distribution is permitted under the plan). Dividend Reinvestment Plan. The Company's insider trading policy does not apply to purchases of Company stock under the FPL Group Dividend Reinvestment and Common Share Purchase Plan resulting from your reinvestment of dividends paid on Company securities. This Policy does apply, however, to voluntary purchases of Company stock resulting from additional contributions you choose to make to the plan, and to your election to participate in the plan or increase your level of participation in the plan. This Policy also applies to your sale of any Company stock purchased pursuant to the plan. Additional Prohibited Transactions. The Company considers it improper and inappropriate for any Company insider to engage in short-term or speculative transactions in the Company's securities. It therefore is the Company's policy that directors, officers and other employees may not engage in any of the following transactions: Publicly Traded Options. A transaction in publicly-traded options is, in effect, a bet on the short-term movement of the Company's stock and therefore creates the appearance that the director or employee is trading based on inside information. Transactions in options also may focus the director's or employee's attention on short-term performance at the expense of the Company's long-term objectives. Accordingly, transactions in options, puts, calls or other derivative securities, on an exchange or in any other organized market, are prohibited by this Policy. Option positions arising from certain types of hedging transactions are governed by the section below captioned "Hedging Transactions." Short Sales. Short sales of the Company's securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller does not have confidence in the Company or its short-term prospects. In addition, short sales may reduce the seller's incentive to improve the Company's performance. For these reasons, short sales of the Company's securities are prohibited by this Policy. In addition, Section 16(c) of the Securities Exchange Act prohibits certain officers and directors of FPL Group and Florida Power & Light Company from engaging in short sales. Hedging Transactions. Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an investor to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the investor to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the investor may no longer have the same objectives as the Company's other shareholders. Therefore, the Company strongly discourages you from engaging in such transactions. Any person wishing to enter into such an arrangement must first pre-clear the proposed transaction with the General Counsel. Any request for pre-clearance of a hedging or similar arrangement must be submitted to the General Counsel at least two weeks prior to the proposed execution of documents evidencing the proposed transaction and must set forth a justification for the proposed transaction. Margin Accounts and Pledges. Securities held in a margin account may be sold by the broker without the customer's consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company securities, directors, officers and other employees are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan. An exception to this prohibition may be granted where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities. Any person who wishes to pledge Company securities as collateral for a loan must submit a request for approval to the General Counsel at least ten business days prior to the proposed execution of documents evidencing the proposed pledge. Post-Termination Transactions. This Policy continues to apply to your transactions in Company securities even after you have terminated employment, if you are in possession of material nonpublic information when your employment terminates. In that event you may not trade in Company securities until that information has become public or is no longer material. Reminder to Directors and Executive Officers. Persons subject to the reporting requirements and limitations on short-swing trading transactions of Section 16 of the Securities Exchange Act are reminded that they (together with their family members) are subject both to this Policy and to the Company’s mandatory pre-clearance requirements (which have been communicated to you separately). Also, directors and certain officers of FPL Group and Florida Power & Light Company, and certain of their relatives and certain related corporations, trusts, estates and other organizations, are subject to the requirements of SEC Rule 144 (including its volume limitation and manner of sale requirements) when selling Company securities. Company Assistance. Any person who has a question about this Policy or its application to any proposed transaction may obtain additional guidance from the General Counsel, whose telephone number is 561-694-4644. Ultimately, however, the responsibility for adhering to this Policy and avoiding unlawful transactions rests with the individual employee or director. March 19, 2004 Addendum to Policy on Securities Trading by Company Personnel — Pre-clearance and Blackout Procedures To help prevent inadvertent violations of the federal securities laws and to avoid even the appearance of trading on inside information, the Company’s Board of Directors has adopted this Addendum to Policy on Securities Trading by Company Personnel. This addendum applies to directors, executive officers subject to Section 16 of the Securities Exchange Act of 1934 (“executive officers”) and certain designated employees of the Company and its subsidiaries (“covered persons”) who have access to material nonpublic information about the Company. The positions of the covered persons subject to this addendum are listed on the attached Schedule I. The Company may from time to time designate other positions that are subject to this addendum and will amend Schedule I from time to time as necessary to reflect such changes or the resignation or change of status of any individual. This addendum is in addition to and supplements the Company’s Policy on Securities Trading by Company Personnel (the “Policy”). Pre-clearance Procedures The Company’s directors and executive officers are covered by the following pre-clearance procedures. Directors and executive officers, together with their family members and other members of their household, may not engage in any transaction involving the Company’s securities (including a stock plan transaction such as an option exercise, or a gift, loan, pledge or hedge, contribution to a trust or any other transfer) without first obtaining pre-clearance of the transaction from the Company’s General Counsel or Corporate Secretary (each, a “compliance officer”). A request for pre-clearance should be submitted to a compliance officer at least two business days in advance of the proposed transaction. The compliance officer is under no obligation to approve a trade submitted for pre-clearance, and may determine not to permit the trade. The compliance officer himself or herself may not trade in Company securities unless the other compliance officer has approved the trade(s) in accordance with the procedures set forth in this addendum. Blackout Procedures All directors, executive officers and covered persons are subject to the following blackout procedures. Quarterly Blackout Periods. The Company’s announcement of its quarterly financial results almost always has the potential to have a material effect on the market for the Company’s securities. Therefore, to avoid even the appearance of trading on the basis of material nonpublic information, you may not trade in the Company’s securities during the period beginning 15 days prior to the endof the quarter and ending after the first full business day following the release of the Company’s earnings for that quarter. Persons subject to these quarterly blackout periods include the persons currently listed on Schedule I attached to this addendum and all other persons who are informed by a compliance officer that they are subject to the quarterly blackout periods. Note that transactions in the Company’s plans which are exempt under the Policy or to which the Policy does not apply are similarly not subject to the quarterly blackout periods. Interim Earnings Guidance and Event-Specific Blackouts. The Company may on occasion issue interim earnings guidance or other potentially material information by means of a press release, SEC filing on Form 8-K or other means designed to achieve widespread dissemination of the information. You should anticipate that trading will be blacked out while the Company is in the process of assembling the information to be released and until the information has been released and fully absorbed by the market. From time to time, an event may occur that is material to the Company and is known by only a few directors or executives. So long as the event remains material and nonpublic, the persons who are aware of the event, as well as other persons covered by the pre-clearance procedures set forth above (i.e., directors and executive officers), may not trade in the Company’s securities. The existence of an event-specific blackout will not be announced, other than to those who are aware of the event giving rise to the blackout. If, however, a person whose trades are subject to pre-clearance requests permission to trade in the Company’s securities during an event-specific blackout, a compliance officer will inform the requesting person of the existence of a blackout period, without disclosing the reason for the blackout. Any person made aware of the existence of an event-specific blackout should not disclose the existence of the blackout to any other person. The failure of a compliance officer to designate a person as being subject to an event-specific blackout will not relieve that person of the obligation not to trade while aware of material nonpublic information (as described in the Policy) about the Company. Note that directors and executive officers may also be subject to event-specific blackouts pursuant to an SEC regulation which prohibits certain sales and other transfers by insiders during certain pension plan blackout periods. You will be notified if this blackout applies. Exception for Approved 10b5-1 Plans Trades by covered persons in the Company’s securities that are executed pursuant to an approved 10b5-1 plan are not subject to the prohibition on trading on the basis of material nonpublic information contained in the Policy or to the restrictions set forth above relating to pre-clearance procedures and blackout periods. Rule 10b5-1 provides an affirmative defense from insider trading liability under the federal securities laws for trading plans that meet certain requirements. In general, a 10b5-1 plan may not be adopted during a blackout period and must be entered into before you are aware of material nonpublic information. Once the plan is adopted, you must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded or the date of the trade. The plan must either specify (including by formula) the amount, pricing and timing of transactions in advance or delegate discretion on those matters to an independent third party. There should be an appropriate “cooling off” period between the date a 10b5-1 plan is adopted and the commencement of trading as contemplated in the plan. Please consult with a compliance officer to determine an appropriate “cooling off” period following adoption of a 10b5-1 plan. The Company requires that all 10b5-1 plans be approved in writing in advance by a compliance officer. Post-Termination Transactions If you are aware of material nonpublic information when you terminate employment or services, you may not trade in the Company’s securities until that information has become public or is no longer material. In all other respects, the procedures set forth in this addendum will cease to apply to your transactions in Company securities upon the expiration of any “blackout period” that is applicable to your transactions at the time of your termination of employment or services. Company Assistance Your compliance with this addendum and the Policy is of the utmost importance both for you and for the Company. If you have any questions about this addendum, the Policy or their application to any proposed transaction, you may obtain additional guidance from a compliance officer. This addendum is dated May 20, 2005. Directors All officers of FPL Group, Inc. (other than Assistant Secretaries, Assistant Treasurers and Assistant Controllers) All officers of Florida Power & Light (other than Assistant Secretaries, Assistant Treasurers and Assistant Controllers) All officers of FPL Energy, LLC (other than Assistant Secretaries, Assistant Treasurers and Assistant Controllers) All officers of FPL Fibernet, LLC Director of Investor Relations Senior Manager, Financial Reporting
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