UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 13, 2006
THE PROGRESSIVE CORPORATION
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
| Ohio
|
|
1-9518
|
|
34-0963169 |
| |
| (State or other
|
|
(Commission File
|
|
(IRS Employer |
| jurisdiction of
|
|
Number)
|
|
Identification |
| incorporation)
|
|
|
|
No.) |
6300 Wilson Mills Road, Mayfield Village, Ohio 44143
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code 440-461-5000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers
(e) Approval of Executive Separation Allowance Plan. On December 8, 2006, the Board of
Directors of The Progressive Corporation (the “Company”) approved The Progressive Corporation
Executive Separation Allowance Plan (2006 Amendment and Restatement) (the “Plan”), to be effective
for terminations of employment occurring on or after December 31, 2006. A copy of the Plan is
attached hereto as
Exhibit 10(A).
The Plan covers the Company’s Chief Executive Officer (CEO), other executive officers and
certain other senior level employees of the Company. Among other terms and conditions, the Plan
provides for the Company to pay a separation allowance (severance) payment to a covered employee if
(i) the employee’s employment terminates for reasons other than resignation (including retirement),
death, disability, leave of absence or discharge for Cause (as defined in the Plan), and (ii) the
employee signs a termination and release agreement as required by the Plan. For executive
officers, including the CEO, the separation allowance payment would equal 156 weeks (3 years) of
the executive’s base salary at the time of termination. The value of cash bonuses or equity-based
awards will not be taken into consideration in determining the executive’s separation allowance
payment. In addition, under the Plan, the executive will be entitled to continue health and
welfare benefits for a period not to exceed 18 months at the Company’s cost, except that the
terminated employee will be required to make contributions to the cost of those benefits to the
same extent as prior to termination.
In addition, the Plan provides that executives and other covered employees will have the right
to receive a severance payment for a 3-year period after a Change in Control of the Company, upon
either (i) a termination of employment for reasons other than resignation (including retirement),
death, disability, leave of absence or discharge for Cause, or (ii) the executive resigning due to
a Job Change. For purposes of the Plan, the definition for the term “Change in Control”
incorporates the definition of the same term from the Company’s equity compensation plan for
employees. The term “Job Change” includes a decrease in the individual’s total pay package,
whether in the same job or after a job transfer, and the imposition of significantly different job
duties, shift, work location or number of scheduled work hours. Upon the occurrence of such
events, an executive would be entitled to receive a separation allowance payment equal to 156 weeks
of base salary and the continuation of health and welfare benefits, on the same basis as described
above.
After each executive has executed and delivered a Termination Agreement (described further
below), this Plan will be the exclusive source of separation or severance payments and other
benefits for executives in the event of either a job termination, whether or not in connection with
a Change in Control, or a Job Change, but only after a Change in Control. The Company will make no
other payments and provide no other benefits, including, without limitation, any payments to defray
or reimburse taxes arising from such severance payments or benefits (i.e., no “tax gross up”
payments). However, executives who also hold outstanding restricted stock or stock option awards
under the Company’s equity compensation plans will continue to have the rights upon a Change in
Control provided under such plans with respect to those equity awards.
Replacement of Former Executive Separation Allowance Plan. The Plan supersedes and replaces
the Company’s former Executive Separation Allowance Plan, which was filed with the Securities and
Exchange Commission as Exhibit 10(I) to the Company’s Quarterly Report on Form 10-Q on November 5,
2001.
Termination of Employment (Change in Control) Agreements. On December 8, 2006, the Board of
Directors authorized the Company to terminate all employment agreements between the Company and its
executive officers, including the CEO. Those employment agreements previously controlled the
rights and obligations of the Company and executives in the event of a job termination or certain
other adverse job changes occurring after a change in control (as defined in such agreements).
Beginning on December 31, 2006, the Plan described above will supersede the employment agreements
and provide the exclusive severance rights for executives upon a Change in Control. A copy of the
approved Termination Agreement is attached hereto as Exhibit 10(B). Employment agreements for the
following executive officers will be terminated:
-2-
| |
|
|
| Name and Title |
|
Prior SEC Filing Information for Agreements |
Glenn M. Renwick, Chief
|
|
Exhibit 10(A) to Form 10-Q, August 13, 2001 |
Executive Officer
|
|
Exhibit 10(D) to Form 10-Q, November 5, 2001 |
|
|
Exhibit 10(D) to Form 10-Q, August 14, 2003 |
|
|
|
W. Thomas Forrester, Chief
|
|
Exhibit 10(A) to Form 10-Q, November 5, 2001 |
Financial Officer
|
|
Exhibit 10(A) to Form 10-Q, August 14, 2003 |
|
|
|
John A. Barbagallo, Drive
|
|
Exhibit 10(A) to Form 10-Q, August 3, 2006 |
Group President |
|
|
|
|
|
William M. Cody, Chief
|
|
Exhibit 10(J) to Form 10-Q, May 12, 2003 |
Investment Officer |
|
|
|
|
|
S. Patricia Griffith, Chief
|
|
Exhibit 10(I) to Form 10-Q, May 12, 2003 |
Human Resource Officer |
|
|
|
|
|
Charles E. Jarrett, Chief
|
|
Exhibit 10(C) to Form 10-Q, November 5, 2001 |
Legal Officer
|
|
Exhibit 10(C) to Form 10-Q, August 14, 2003 |
|
|
|
Brian J. Passell, Claims
|
|
Exhibit 10(B) to Form 10-Q, November 5, 2001 |
Group President
|
|
Exhibit 10(B) to Form 10-Q, August 14, 2003 |
|
|
|
John P. Sauerland, Direct
|
|
Exhibit 10(B) to Form 10-Q, August 3, 2006 |
Group President |
|
|
|
|
|
Brian A. Silva, Commercial
|
|
Exhibit 10(C) to Form 10-Q, August 3, 2006 |
Auto Group President |
|
|
|
|
|
Raymond M. Voelker,
|
|
Exhibit 10(F) to Form 10-Q, November 5, 2001 |
Chief Information Officer
|
|
Exhibit 10(F) to Form 10-Q, August 14, 2003 |
Item 7.01 Regulation FD Disclosure
On December 13, 2006, The Progressive Corporation issued a news release containing: (a) financial
results for the Company and its subsidiaries for the month of, and year-to-date period ended,
November 2006; and (b) certain determinations made by the Company’s Board of Directors on December
8, 2006, with respect to the Company’s previously announced variable dividend policy. A copy of
the news release is attached hereto as Exhibit 99.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
See exhibit index on page 5.
-3-