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FPL Group announces settlement of shareholder litigation

JUNO BEACH, Fla. – FPL Group, Inc. (NYSE:FPL) today announced a settlement, subject to court approval, of derivative litigation filed by certain shareholders in the name of the company regarding change-of-control payments made in December 2000 in conjunction with the proposed Entergy merger that was approved by shareholders but not consummated. The settlement is the end result of a mediation process that began in June before retired Judge Nicholas H. Politan as the independent mediator. It does not contain any admission or finding of liability or wrongdoing by the company or by any individual.

In the proposed settlement, eight current and former senior executives of FPL Group and an insurance carrier will pay a total of $22.25 million, representing a portion of the compensation that the executives received in December 2000. The eight individuals received payments, as a result of shareholder approval of the proposed merger, under change-of-control provisions that accelerated the payments of previously granted awards under the company’s Long Term Incentive Plan. Under the terms of the Long Term Incentive Plan, which was originally adopted by shareholder vote in 1994 and was reauthorized by shareholder vote in 1999, the executives over time would have received a substantial portion of the amounts awarded regardless of whether the merger vote occurred.

Over the past three years, FPL Group has strengthened and enhanced its corporate governance procedures, and respected independent monitoring organizations currently rate it among the top companies for corporate governance. In furtherance of its desire for continuous improvement, FPL Group has undertaken in the settlement to implement several additional enhancements to its governance procedures.

FPL Group stated that it is pleased to have reached agreement on a settlement so that the company can focus all of its attention on providing service for customers and creating value for shareholders, without the distraction of this litigation.

The company said that, if the settlement is approved, the net amount of the payment it receives would be recorded as a gain.

FPL Group, with annual revenues of more than $9 billion, is nationally known as a high quality, efficient, and customer-driven organization focused on energy-related products and services. With a growing presence in 26 states, it is widely recognized as one of the country's premier power companies. Its principal subsidiary, Florida Power & Light Company, serves more than 4.2 million customer accounts in Florida. FPL Energy, LLC, an FPL Group wholesale energy-generating subsidiary, is a leader in producing electricity from clean and renewable fuels. Additional information is available on the Internet at www.FPLGroup.com,www.FPL.com and www.FPLEnergy.com.

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