SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of earliest event reported): April 30, 1999
FRONTIER ADJUSTERS OF AMERICA, INC.
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(Exact name of registrant as specified in its charter)
ARIZONA 1-12902 86-0477573
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(State or other jurisdiction (Commission File No.) (IRS Employer ID No.)
of incorporation)
45 East Monterey Way, Phoenix, Arizona 85011
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (602) 264-1061
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(Former name or former address, if changed since last report)
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FRONTIER ADJUSTERS OF AMERICA, INC.
FORM 8-K
CURRENT REPORT
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On November 20, 1998, Frontier Adjusters of America, Inc. (the
"Company") entered into a Stock Purchase Agreement with United Financial
Adjusting Company ("UFAC"), a wholly-owned subsidiary of The Progressive
Corporation ("Progressive"), regarding the investment by UFAC of an aggregate of
$6,836,067 in the Company in exchange for 5,258,513 shares of the Company's
Series A Convertible Voting Preferred Stock, par value $.01 per share (the
"Preferred Shares") at a purchase price of $1.30 per share (the "Transaction").
The Preferred Shares have full voting rights and vote with the Company's Common
Stock, par value $.01 per share ("Common Stock"), as a single class, and are
convertible into shares of Common Stock, on a one for one basis, prior to June
30, 1999. In addition, the terms of the Transaction give UFAC the right to
nominate a majority of the members of the Company's Board of Directors as long
as UFAC holds at least a majority of the voting power of the Company.
Subsequent to the Transaction and in accordance with the Stock Purchase
Agreement, the Company will offer to repurchase up to 1,000,000 shares of its
Common Stock, at a price of $2.90 per share (the "Tender Offer"). Upon
completion of the Transaction, UFAC will own approximately 52% of the voting
securities of the Company on a fully diluted basis. After the Tender Offer,
assuming that all 1,000,000 shares are repurchased by the Company, UFAC will own
approximately 58% of the voting securities of the Company, on a fully diluted
basis.
UFAC has informed the Company that it is using funds provided by
Progressive from its working capital to purchase the Preferred Shares. The
Company will use part of these funds to repurchase the Company's shares in the
Tender Offer.
On April 29, 1999, the Company's shareholders approved the Transaction
and on April 30, 1999 the Transaction closed ("Closing"). Effective as of the
Closing, George M. Hill and William W. Strawther, Jr. resigned from the Board of
Directors of the Company. In accordance with the terms of the Transaction,
effective as of the Closing, the Company's Board of Directors appointed the
following nominees of UFAC as members of the Company's Board of Directors:
CHARLES B. CHOKEL
Mr. Chokel, age 45, graduated from Williams College and received his MBA from
the University of Chicago. He worked for three years as a commercial properly
underwriter for Chubb and Son before joining Progressive in 1978. He has held
many different positions at Progressive, including National Sales Manager, Auto
Product Manager, California Division President and Chief Financial Officer, and,
is currently Progressive's CEO of Investments and Capital Management.
JOHN M. DAVIES
Mr. Davies, age 43, has been employed by The Progressive Corporation since 1990
and currently manages Progressive's Diversified Business Group. Prior to joining
Progressive, he was employed at Coopers & Lybrand, an international accounting
and consulting firm. Mr. Davies has an MBA from the University of Pittsburgh and
has earned numerous professional designations, including being a Certified
Public Accountant, a Chartered Property and Casualty Underwriter and a Chartered
Life Underwriter.
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JEFF JORDAN
Mr. Jordan, age 43, has been employed by The Progressive Corporation from
1978-1980 and from 1984 through the present. He began his career with
Progressive as an adjuster trainee and has held numerous technical and
managerial positions within the Progressive claims organization. Mr. Jordan
holds a BA degree from Rutgers University and a JD from UCLA. Prior to his
return to Progressive in 1984, Mr. Jordan was an attorney in private practice in
Los Angeles.
JEFFREY R. HARCOURT
Mr. Harcourt, age 38, has been employed by The Progressive Corporation since
1990 and currently is the Controller for Progressive's Diversified Business
Group. Prior to joining Progressive, he was employed by KPMG Peat Marwick, an
international accounting and consulting firm. Mr. Harcourt holds a BS from Miami
University and has earned numerous designations, including being a Certified
Public Accountant, a Chartered Property and Casualty Underwriter, a Certified
Internal Auditor and a Certified Information systems Auditor.
TROY HUTH
Mr. Huth, age 38, has been employed by The Progressive Corporation since 1986
and currently manages Progressive's Diversified Technologies group, along with
the Progressive Vehicle Inspection Services entity. Prior to joining
Progressive, he held several information technology management positions in
manufacturing and service businesses and has been in the technology field since
1979. Mr. Huth has a BA from Baldwin Wallace College.
DANE A. SHRALLOW
Mr. Shrallow, age 52, has been practicing corporate and business law since 1971.
Mr. Shrallow joined the Progressive organization in 1988 and currently serves as
Associate General Counsel of Progressive and its subsidiaries. Prior to joining
Progressive, Mr. Shrallow served as Assistant General Counsel of Leaseway
Transportation Corp., a New York Stock Exchange listed company engaged in the
truck transportation, leasing and physical distribution industries. Mr. Shrallow
has a JD in Commerce from Washington and Lee University and a JD from Cornell
University.
WILLIAM A. WHITE
Mr.White, age 45, has been employed by The Progressive Corporation since 1985
and currently manages Progressive's Diversified Claims Services Business Group.
Prior to joining Progressive, Mr. White served as a commissioned officer in the
United States Army. Mr. White holds a master's degree from the University of
Southern California and undergraduate degree in Business Administration from
John Carroll University in Cleveland, Ohio.
MILO C. BOLENDER
Mr. Bolender, age 46, has been employed by The Progressive Corporation since
1987 and currently manages the Claims Services Business within Progressive's
Diversified Business Group. In previous positions within Progressive, Mr.
Bolender served as Product Manager for both private passenger auto and
commercial auto programs. Prior to joining Progressive, he was employed in the
commercial banking industry, including senior positions in the commercial
lending groups of Union Bank California and Lloyds Bank California. Mr. Bolender
has an MBA from Loyola Marymount University.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGES
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10(i) Stock Purchase Agreement between Frontier
Adjusters of America, Inc. and United Financial
Adjusting Company, dated as of November 20,
1998 including the following attachments*
Terms of the Preferred Shares
Registration Rights Agreement
Service Agreement
William Rocke Agreement
Jean Ryberg Agreement
Insider Support Agreement
*Incorporated by reference to the Exhibits to Frontier Adjusters of America,
Inc., Notice of Annual Meeting, and Proxy Statement on Form 14A as filed with
the SEC in definitive form on March 26, 1999.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
April 30, 1999 FRONTIER ADJUSTERS OF AMERICA, INC.
By: /s/ William J. Rocke
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William J. Rocke
Chairman of the Board
