<PAGE> 1
As filed with the Securities and Exchange Commission on December 29, 1994
Registration No. ________________
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
THE PROGRESSIVE CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 34-0963169
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
6300 Wilson Mills Road, Mayfield Village, Ohio 44143
(Address of Principal Executive Offices) (Zip Code)
THE PROGRESSIVE CORPORATION EXECUTIVE DEFERRED COMPENSATION PLAN
(Full title of the plan)
David M. Schneider, Secretary
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
(Name and address of agent for service)
(216) 461-5000
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
____________________________________________________________________________________________________________
Proposed maximum Proposed maximum
Title of Securities Amount to be offering price per aggregate offering Amount of
to be registered(1) registered(2) share(3) price(3) registration fee
____________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Common Shares, 300,000 $35.875 $10,762,500 $3,711.23
$1 par value
____________________________________________________________________________________________________________
<FN>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plan described herein.
(2) Also includes an indeterminable number of additional shares that may become
issuable pursuant to the anti-dilution provisions of the Plan.
(3) The registration fee has been calculated pursuant to Rules 457(c) and (h)
based on the average of the high and low prices of such Common Shares
reported on the New York Stock Exchange on December 27, 1994.
</TABLE>
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
- ------- ----------------------------------------
The following documents filed with the Securities and Exchange Commission
(the "Commission") by the Registrant and The Progressive Corporation Executive
Deferred Compensation Plan ("Plan") are incorporated into this Registration
Statement by reference:
(1) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, as filed with the Commission on March 29, 1994 (File
No. 1-9518);
(2) All other reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (the "1934 Act") since the
end of the fiscal year covered by the report referred to in (1) above;
and
(3) The description of the Common Shares contained in the Registrant's
Registration Statement filed on Form 10 under the 1934 Act on file with
the Commission and any amendment or report filed for the purpose of
updating such description.
All documents filed by the Registrant and the Plan pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereunder have been sold, or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
- ------- ------------------------------------------
Article VI of the Code of Regulations of the Registrant provides for
indemnification of any director, officer or employee in certain instances, as
permitted under Section 1701.13(E) of the Ohio Revised Code, against any
expenses, judgments, decrees, fines, penalties or amounts paid in settlement in
connection with the defense of any action, suit or proceeding, criminal or
civil, to which he was, is or may be a party by reason of his status as such
director, officer or employee.
A director, officer or employee is only entitled to indemnification if a
determination is made (i) by the directors of the Registrant acting at a
meeting at which a quorum consisting of directors who neither were nor are
parties to or threatened with any such action, suit or proceeding is present,
or (ii) by the shareholders of the Registrant at a meeting held for such
purpose by the affirmative vote of the holders of shares entitling them to
exercise a majority of the voting power of the Registrant on such proposal or
without a meeting by the written consent of the holders of shares entitling
them to exercise two-thirds of the voting power on such proposal, that such
director, officer or employee (a) was not and has not been adjudicated to have
been negligent or guilty of misconduct in the performance of his duty to the
Registrant, (b) acted in good faith and in a manner he reasonably believed to
be in the best interest of the Registrant and (c) in any matter the subject of
a criminal action, suit or proceeding, had no reasonable cause to believe that
his conduct was unlawful.
The expenses of each director, officer or employee incurred in defending any
such action, suit or proceeding may be paid by the Registrant as they are
incurred in advance of the final disposition of such action, suit or
proceeding, as authorized by the board of directors, upon receipt of an
undertaking by the director, officer or employee to repay such expenses unless
it shall ultimately be determined that he is entitled to be indemnified by the
Registrant.
Additionally, Section 1701.13(E)(5)(a) of the Ohio Revised Code provides
that, unless prohibited by specific reference in a corporation's Articles of
Incorporation or Code of Regulations, a
II-1
<PAGE> 3
corporation shall pay a director's expenses, including attorneys' fees,
incurred in defending an action, suit or proceeding brought against him in such
capacity, whether such action, suit or proceeding is brought by a third party
or by or in the right of the corporation; provided the director delivers to the
corporation an undertaking to (a) repay such amount if it is proved by clear
and convincing evidence in a court of competent jurisdiction that his action or
failure to act was undertaken with deliberate intent to injure the corporation
or with reckless disregard for the best interests of the corporation and (b)
reasonably cooperate with the corporation in such action, suit or proceeding.
Section 1701.13(E)(7) of the Ohio Revised Code provides that a corporation
may purchase insurance or furnish similar protection for any director, officer
or employee against any liability asserted against him in any such capacity,
whether or not the corporation would have power to indemnify him under Ohio
law. Such insurance may be purchased from or maintained with a person in which
the corporation has a financial interest.
The Registrant maintains directors and officers liability insurance in the
amount of $20,000,000 pursuant to a policy issued by a wholly-owned subsidiary
of the Registrant. The risks covered by such policy include certain
liabilities under the securities laws.
Item 8. EXHIBITS.
- ------- ---------
4(a) The Progressive Corporation Executive Deferred Compensation Plan
4(b) Trust Agreement dated December 28, 1994 between The Progressive
Corporation and NBD Bank, N.A., as Trustee
4(c) Form of Deferral Agreement to be executed by Plan participants
4(d) Amended Articles of Incorporation of the Registrant (incorporated by
reference to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1993, as filed with the Securities and Exchange
Commission on April 23, 1993; see Exhibit 3 therein)
4(e) Code of Regulations of the Registrant (incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended March
31, 1991, as filed with the Securities and Exchange Commission on May 6,
1991; see Exhibit 3(B) therein)
5 Opinion of Baker & Hostetler
23(a) Consent of Coopers & Lybrand, Independent Accountants
23(b) Consent of Baker & Hostetler (included in Exhibit 5)
24(a) Powers of Attorney
24(b) Resolutions of the Board of Directors of the Registrant as to Power of
Attorney, certified by Secretary of the Registrant
28 Schedule P to 1993 Annual Statements of Registrant's subsidiaries, as
furnished to State Insurance Regulatory Authorities (incorporated by
reference to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, as filed with the Securities and Exchange
Commission on March 29, 1994; see Exhibit 28 therein)
Item 9. UNDERTAKINGS.
- ------- -------------
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect in the prospectus any facts or events arising after the
II-2
<PAGE> 4
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; provided,
however, that paragraphs (i) and (ii) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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<PAGE> 5
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Mayfield Village, State of Ohio, on December 28, 1994.
THE PROGRESSIVE CORPORATION
By /s/ David M. Schneider
---------------------------------
David M. Schneider, Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated below.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
Peter B. Lewis* Chairman of the Board, President and Director (Principal
- -------------------------- Executive Officer of Registrant)
Peter B. Lewis
Charles B. Chokel* Principal Financial Officer
- --------------------------
Charles B. Chokel
Jeffrey W. Basch* Principal Accounting Officer
- --------------------------
Jeffrey W. Basch
Milton N. Allen* Director
- --------------------------
Milton N. Allen
B. Charles Ames* Director
- --------------------------
B. Charles Ames
Stephen R. Hardis* Director
- --------------------------
Stephen R. Hardis
Norman S. Matthews* Director
- --------------------------
Norman S. Matthews
Donald B. Shackelford* Director
- --------------------------
Donald B. Shackelford
Paul B. Sigler* Director
- --------------------------
Paul B. Sigler
</TABLE>
Dated: December 28, 1994
II-4
<PAGE> 6
* David M. Schneider, by signing his name hereto, does sign this document
on behalf of the persons indicated above pursuant to powers of attorney
duly executed by such persons and filed as exhibits to this Registration
Statement.
/s/ David M. Schneider
---------------------------
David M. Schneider
Attorney-in-fact
Dated: December 28, 1994
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
undersigned Plan administrator, has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
Mayfield Village, State of Ohio on December 28, 1994.
Executive Compensation Committee of
the Board of Directors of The Progressive
Corporation, as Administrator of
The Progressive Corporation
Executive Deferred Compensation Plan
By: /s/ Milton N. Allen
--------------------------------------
Milton N. Allen
By: /s/ Norman S. Matthews
--------------------------------------
Norman S. Matthews
By: /s/ Donald B. Shackelford
--------------------------------------
Donald B. Shackelford
II-5
<PAGE> 7
EXHIBIT INDEX
-------------
Page Number
-----------
4(a) The Progressive Corporation Executive
Deferred Compensation Plan
4(b) Trust Agreement dated December 28,
1994 between The Progressive Corporation
and NBD Bank, N.A., as Trustee
4(c) Form of Deferral Agreement to be executed
by Plan Participants
4(d) Amended Articles of Incorporation of the
Registrant (incorporated by reference to
the Registrant's Quarterly Report on Form
10-Q for the quarter ended March 31,
1993, as filed with the Securities and
Exchange Commission on April 23, 1993;
see Exhibit 3 therein)
4(e) Code of Regulations of the Registrant
(incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1991,
as filed with the Securities and Exchange
Commission on May 6, 1991; see Exhibit
3(B) therein)
5 Opinion of Baker & Hostetler
23(a) Consent of Coopers & Lybrand, Independent
Accountants
23(b) Consent of Baker & Hostetler (included in
Exhibit 5)
24(a) Powers of Attorney
24(b) Resolutions of Board of Directors of the
Registrant as to Power of Attorney,
certified by Secretary of the Registrant
28 Schedule P to 1993 Annual Statements of
the Registrant's Subsidiaries, as
Furnished to State Insurance Regulatory
Authorities (incorporated by reference to
the Registrant's Annual Report on Form
10-K for the fiscal year ended December
31, 1993, as filed with the Securities
and Exchange Commission on March 29,
1994; see Exhibit 28 therein)
============
<PAGE> 1
THE PROGRESSIVE CORPORATION EXECUTIVE
DEFERRED COMPENSATION PLAN
<PAGE> 2
Exhibit 4(a)
THE PROGRESSIVE CORPORATION EXECUTIVE
DEFERRED COMPENSATION PLAN
<PAGE> 3
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
PAGE NO.
--------
<S> <C>
ARTICLE 1
---------
DEFINITIONS
-----------
1.1 "AFFILIATED COMPANY" 1
1.2 "ANNUAL DEFERRAL ACCOUNT" or "ACCOUNT" 1
1.3 "BENEFICIARY" 1
1.4 "CHANGE IN CONTROL" 1
1.5 "CODE" 1
1.6 "COMMITTEE" 1
1.7 "COMPANY" 1
1.8 "COMPANY STOCK FUND" 1
1.9 "DEFERRAL AGREEMENT" 1
1.10 "DEFERRAL" 1
1.11 "DISABLED" AND "DISABILITY" 1
1.12 "DISTRIBUTION EVENT" 2
1.13 "ELIGIBLE EXECUTIVE" 2
1.14 "ERISA" 2
1.15 "FIXED DEFERRAL PERIOD" 2
1.16 "FIXED INCOME FUND" 2
1.17 "GAINSHARING AWARD" 2
1.18 "INVESTMENT FUND" 2
1.19 "PARTICIPANT" 2
1.20 "PLAN" 2
1.21 "PLAN YEAR" 2
1.22 "TERMINATION OF EMPLOYMENT" 2
1.23 "STOCK" 2
1.24 "TRUST" 2
1.25 "TRUST AGREEMENT" 2
1.26 "TRUSTEE" 3
1.27 "VALUATION DATE" 3
ARTICLE 2
---------
DEFERRAL OF GAINSHARING AWARDS
------------------------------
2.1 METHOD OF DEFERRAL 3
2.2 DEFERRAL AGREEMENT PROVISIONS 3
2.3 FIXED DEFERRAL PERIODS 3
ARTICLE 3
---------
DISTRIBUTIONS
-------------
3.1 DATE OF DISTRIBUTION 4
3.2 METHOD OF DISTRIBUTION 4
3.3 AMOUNT OF DISTRIBUTION 4
3.4 FORM OF DISTRIBUTION 4
4
ARTICLE 4
---------
ACCOUNTS
--------
4.1 ESTABLISHMENT OF ANNUAL DEFERRAL ACCOUNTS 4
4.2 INITIAL INVESTMENT OF ACCOUNTS 4
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
4.3 VALUATION OF INVESTMENT FUNDS 5
4.4 VALUATION OF ACCOUNTS 5
4.5 NATURE OF ACCOUNTS 5
4.6 ACCOUNT STATEMENTS 5
ARTICLE 5
---------
INVESTMENT FUNDS
----------------
5.1 INVESTMENT FUNDS 6
5.2 INVESTMENT ELECTIONS OF PARTICIPANTS 6
5.3 NATURE OF INVESTMENT FUNDS 6
5.4 LIQUIDATION OF INVESTMENT FUNDS 6
ARTICLE 6
---------
TRUST
-----
6.1 ESTABLISHMENT OF TRUST 6
ARTICLE 7
---------
PLAN OPERATION AND ADMINISTRATION
---------------------------------
7.1 POWERS OF COMMITTEE 7
7.2 NONDISCRIMINATORY EXERCISE OF AUTHORITY 7
7.3 RELIANCE ON TABLES, ETC 7
7.4 INDEMNIFICATION 8
7.5 NOTICES TO COMMITTEE 8
ARTICLE 8
---------
CLAIMS PROCEDURES
-----------------
8.1 ESTABLISHMENT OF CLAIMS PROCEDURES 8
8.2 CLAIMS DENIALS 8
8.3 APPEALS OF DENIED CLAIMS 8
8.4 REVIEW OF APPEALS 9
ARTICLE 9
---------
AMENDMENT AND TERMINATION OF THE PLAN
-------------------------------------
9.1 AMENDMENT 9
9.2 TERMINATION 9
9.3 LIQUIDATION OF THE TRUST 10
ARTICLE 10
----------
MISCELLANEOUS PROVISIONS
------------------------
10.1 HEADINGS 10
10.2 PLAN NOT CONTRACT OF EMPLOYMENT 10
10.3 SEVERABILITY 10
10.4 PROHIBITION ON ASSIGNMENT 10
10.5 NUMBER AND GENDER 10
10.6 GOVERNING LAW 10
10.7 SATISFACTION OF CLAIMS 11
10.8 NO WARRANTIES 11
10.9 TAX WITHHOLDING 11
10.10 FACILITY OF PAYMENT 11
10.11 REPAYMENT OF GAINSHARING AWARDS 11
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
10.12 STOCK SUBJECT TO THE PLAN 11
10.13 CONDITIONS TO EFFECTIVENESS OF PLAN 11
</TABLE>
iii
<PAGE> 6
THE PROGRESSIVE CORPORATION EXECUTIVE
DEFERRED COMPENSATION PLAN
The Progressive Corporation hereby establishes The Progressive Corporation
Executive Deferred Compensation Plan, effective as of January 1, 1995.
The Plan is established for the purposes of providing deferred compensation for
a select group of management and highly compensated employees within the
meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
The Plan is intended to be an unfunded plan for purposes of ERISA and the Code
and is not intended to satisfy the qualification requirements of Section 401 of
the Code.
ARTICLE 1
---------
DEFINITIONS
-----------
1.1 "AFFILIATED COMPANY" means any corporation included in the affiliated
group of corporations as defined in Section 1504 of the Code
(determined without regard to 1504(b)) of which the Company is the
common parent corporation.
1.2 "ANNUAL DEFERRAL ACCOUNT" or "ACCOUNT" shall have the meaning set
forth in Section 4.1.
1.3 "BENEFICIARY" means such person(s) as the Participant has designated.
A Participant may change his Beneficiary designation at any time. All
Beneficiary designations (including changes) shall be made in writing
on such forms as the Committee shall prescribe, and shall become
effective only when received and accepted by the Committee; provided,
however, that a Beneficiary designation (including a change) received
by the Committee after the designating Participant's death shall be
disregarded. In the absence of a Beneficiary designation, or if the
designated Beneficiary is no longer living or in existence at the time
of the Participant's death, all distributions payable from the Plan
upon the Participant's death shall be paid to the Participant's
estate.
1.4 "CHANGE IN CONTROL" means a "Change in Control" or "Potential Change
in Control" within the meaning of The Progressive Corporation 1989
Incentive Plan (amended and restated as of April 24, 1992 and as
further amended as of July 1, 1992 and February 5, 1993).
1.5 "CODE" means the Internal Revenue Code of 1986, as amended.
1.6 "COMMITTEE" means the Executive Compensation Committee of the Board of
Directors of the Company, or any successor committee.
1.7 "COMPANY" means The Progressive Corporation, an Ohio corporation, or
its successors.
1.8 "COMPANY STOCK FUND" means an Investment Fund consisting of Stock.
1.9 "DEFERRAL AGREEMENT" means a written agreement entered into by an
Eligible Executive pursuant to Article 2.
1.10 "DEFERRAL" means an amount credited to an Annual Deferral Account
pursuant to a Deferral Agreement.
1.11 "DISABLED" AND "DISABILITY" means that a Participant is expected to be
unable to perform the duties of his usual occupation for at least
twelve (12) consecutive months, as determined by the Committee.
1
<PAGE> 7
1.12 "DISTRIBUTION EVENT" means, as to each Participant, the earliest of
the following events:
(i) the Participant's death;
(ii) the date that the Participant is determined by the Committee
to be Disabled;
(iii) the Participant's Termination of Employment; or
(iv) Change in Control.
1.13 "ELIGIBLE EXECUTIVE" means the Company's Chief Executive Officer,
Chief Operating Officer, Chief Investment and Capital Officer, Chief
Legal Officer, Chief Financial Officer, Chief Information Officer,
Chief Human Resources Officer, Division Presidents and any other
executive of the Company or any Affiliated Company who is designated
in writing as an Eligible Executive by the Committee, excluding,
however, any of the foregoing individuals who are not residents of the
United States or are not working at a location in the United States.
1.14 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.15 "FIXED DEFERRAL PERIOD" shall have the meaning set forth in Section
2.3.
1.16 "FIXED INCOME FUND" means the Vanguard Investment Contract Trust or
such other Investment Fund as may be designated by the Committee as
the Fixed Income Fund within the meaning of the Plan.
1.17 "GAINSHARING AWARD" means any bonus or other incentive award payable
with respect to a Plan Year under The Progressive Corporation 1994
Executive Bonus Plan, The Progressive Corporation 1994 Gainsharing
Plan or any other plan or program as may be designated by the
Committee.
1.18 "INVESTMENT FUND" means a device established from time to time by the
Committee pursuant to Section 5.1 that is used to calculate gains and
losses in amounts deferred by Participants under the Plan.
1.19 "PARTICIPANT" means an Eligible Executive who has deferred receipt of
a portion of any Gainsharing Award pursuant to a Deferral Agreement.
Participation shall begin on the date that a Deferral Account is
established in the name of the Participant and shall end on the date
that the Participant dies or receives a distribution of the balance of
all his Deferral Accounts.
1.20 "PLAN" means The Progressive Corporation Executive Deferred
Compensation Plan, as set forth herein and as it may be amended from
time to time.
1.21 "PLAN YEAR" means 1995 and each subsequent calendar year.
1.22 "TERMINATION OF EMPLOYMENT" means the voluntary or involuntary
cessation of a Participant's active employment with the Company and
all Affiliated Companies as a result of any reason other than death,
Disability and approved leave of absence.
1.23 "STOCK" means the Common Shares, $1.00 par value, of the Company.
1.24 "TRUST" shall mean the trust maintained pursuant to the Trust
Agreement and known as The Progressive Corporation Executive Deferred
Compensation Trust.
1.25 "TRUST AGREEMENT" shall mean the agreement of trust between the
Company and the Trustee executed in furtherance of the Plan, as the
same may be amended from time to time.
2
<PAGE> 8
1.26 "TRUSTEE" shall mean the person selected from time to time by the
Company to serve as trustee under the Trust Agreement.
1.27 "VALUATION DATE" shall mean each day that the New York Stock Exchange
is open for trading.
ARTICLE 2
---------
DEFERRAL OF GAINSHARING AWARDS
------------------------------
2.1 Method of Deferral.
------------------
Each Eligible Executive may elect to defer receipt of all or a portion
of his/her Gainsharing Award in respect of any Plan Year in excess of
applicable tax withholding and other deductions required to be made in
respect of the Gainsharing Award by signing a Deferral Agreement and
delivering it to the Committee. If a Gainsharing Award is payable in
installments, each installment, whether or not payable in the same
Plan Year, shall be subject to the same Deferral Agreement.
2.2 Deferral Agreement Provisions.
-----------------------------
Each Deferral Agreement must satisfy all of the following requirements:
(a) it must be in writing and be in the form specified by the
Committee;
(b) it must be irrevocable;
(c) it must apply to only one Gainsharing Award;
(d) it must be signed by the Eligible Executive making the
Deferral and be delivered to the Committee prior to the Plan
Year in which the applicable Gainsharing Award will be earned;
(e) it must specify the percentage of the Eligible Executive's
Gainsharing Award to be deferred, which percentage shall not
be less than ten percent (10%). The same deferral percentage
shall apply to each installment of a Gainsharing Award covered
by the Deferral Agreement. However, a Deferral Agreement may
provide for the deferral of a percentage of that portion of a
Gainsharing Award that exceeds a specified gross dollar
amount, which percentage shall not be less than ten percent
(10%). Notwithstanding the preceding provisions of this
Section 2.2(e), no Deferral shall be less than such dollar
amount as the Committee may specify from time to time. All
Deferrals shall be reduced by applicable tax withholding and
other legally required deductions;
(f) it must specify whether the balance of the Annual Deferral
Account to be established pursuant to that Deferral Agreement
will be distributed in a lump sum or in three (3) annual
installments; and
(g) it must contain such other provisions, conditions and
limitations as may be required by the Company or the Committee.
2.3 Fixed Deferral Periods.
----------------------
If an Eligible Executive wishes to defer receipt of all or a portion
of any Gainsharing Award for a fixed period of time ("Fixed Deferral
Period"), then his/her Deferral Agreement relating to such Gainsharing
Award shall specify that Fixed Deferral Period, which shall not be
less than two (2) years following the end of the Plan Year in which
the Gainsharing Award will be earned.
3
<PAGE> 9
ARTICLE 3
---------
DISTRIBUTIONS
-------------
3.1 Date of Distribution.
--------------------
The balance of each Annual Deferral Account of a Participant shall be
distributed within thirty (30) days following the earlier of (i) the
date a Distribution Event occurs, (ii) the date on which the Fixed
Deferral Period, if any, applicable to such Account expires, or (iii)
the date, if any, selected by the Company, in its sole discretion,
pursuant to Section 9.2.
3.2 Method of Distribution.
----------------------
Each distribution of the balance of an Annual Deferral Account made on
account of the Participant's death shall be made to the Participant's
Beneficiary. Each distribution made on account of the Participant's
death or Disability, termination of the Plan or a Change in Control
shall be paid in a lump sum. Each distribution made on account of the
Participant's Termination of Employment or expiration of a Fixed
Deferral Period shall be paid in either a lump sum or installments, as
specified in the applicable Deferral Agreement. If a Participant
elects to receive payment in installments and dies prior to payment of
all installments, the balance remaining unpaid at his/her death shall
be paid to his/her Beneficiary in a lump sum. Installment payments
shall be paid annually for three years.
3.3 Amount of Distribution.
----------------------
The amount of each lump sum payment shall be equal to the balance of
the Annual Deferral Account, as of the Valuation Date immediately
preceding the date of distribution. The amount of each installment
payment shall be equal to the balance of the Annual Deferral Account
as of the Valuation Date immediately preceding the date of payment
multiplied by a fraction, the numerator of which is one and the
denominator of which is the number of years remaining in the period
over which installments are to be paid. Installment distributions to
be made in Stock shall be rounded to the nearest whole share.
3.4 Form of Distribution.
--------------------
All distributions shall be made in cash, except that a distribution
representing amounts invested in the Company Stock Fund shall be made
in Stock.
ARTICLE 4
---------
ACCOUNTS
--------
4.1 Establishment of Annual Deferral Accounts.
-----------------------------------------
The Committee shall establish an Annual Deferral Account in the name
of each Participant for each Gainsharing Award, or portion thereof,
that is the subject of a Deferral Agreement. Such Account shall be
established as of the first date that such Gainsharing Award or
portion otherwise would have been paid to the Participant. Each
Annual Deferral Account shall be credited with the deferred portion of
such Gainsharing Award. Thereafter, all Annual Deferral Accounts
shall be valued and administered as provided in this Article.
4.2 Initial Investment of Accounts.
------------------------------
All initial credits to an Annual Deferral Account of a Participant
shall be deemed to be invested in such Investment Funds as the
Participant shall elect in accordance with Article 5. The number of
shares of Stock to be credited to a Participant's Account by
virtue of a Participant's election to invest a portion of a Deferral
in the Company Stock Fund shall be determined on the date of
4
<PAGE> 10
the Deferral, based on the closing price of Stock on the
immediately preceding Valuation Date as quoted in the New York Stock
Exchange composite trading. However, the amount of a Deferral
otherwise elected by the Participant to be invested in the Company
Stock Fund shall be reduced to the extent necessary to insure that
only whole shares of Stock are credited and an amount corresponding to
any fractional shares shall be invested in the Fixed Income Fund.
4.3 Valuation of Investment Funds.
-----------------------------
As of each Valuation Date, the Trustee shall compute the value of each
Investment Fund from which shall be determined the net gain or loss of
such Investment Fund since the immediately preceding Valuation Date.
The net gain or loss shall include any unrealized and realized profits
and losses, and any dividends, interest or other income and any
expenses which are due or accrued, but shall not include distributions
from such Investment Fund or dividends transferred to the Fixed Income
Fund pursuant to the following sentence. Notwithstanding the
preceding provisions of this Section, any cash dividends paid in
respect of Stock shall not be considered part of the gain of the
Company Stock Fund; instead, those dividends shall be considered as
having been transferred to the Fixed Income Fund as of the date such
dividends are paid. In determining the value of each Investment Fund,
the Trustee shall use the following values: securities listed on any
nationally recognized securities exchange shall be valued at the
closing price reported on any such exchange on the Valuation Date, or,
if there were no sales on the Valuation Date, then at the quoted bid
price on the Valuation Date. Securities not listed on a recognized
securities exchange shall be valued at the quoted closing bid price on
the Valuation Date. A unit of participation in a common trust fund
maintained by the Trustee or a share in a mutual fund shall be valued
at the unit value, or share price respectively, in effect at the close
of business on the Valuation Date. Securities with respect to which
there were no available sale prices or bid prices on the Valuation
Date, and any other investments, shall be valued at prices deemed by
the Trustee to represent the fair market value thereof on the
Valuation Date.
4.4 Valuation of Accounts.
---------------------
As of each Valuation Date, the net gain or loss of each Investment
Fund shall be allocated among the appropriate Annual Deferral Accounts
in accordance with such procedures as the Committee shall establish,
which procedures shall apply uniformly to all Participants.
4.5 Nature of Accounts.
------------------
All credits to each Annual Deferral Account of each Participant shall
be recorded as a liability on the books of the Company. However, no
Participant or Beneficiary shall have any proprietary rights of any
nature with respect to any Account of any Participant or with respect
to any funds, securities or other property owned by the Company or any
Affiliated Company that is held in the Trust or that otherwise may be
represented from time to time by Investment Funds. All payments under
the Plan shall be made from the Trust or from the Company's general
funds and in no event shall any Participant or Beneficiary have any
claims or rights to any payment hereunder that are superior to any
claims or rights of any general creditor of the Company.
4.6 Account Statements.
------------------
The Committee will furnish each Participant with quarterly statements
of the value of each of his/her Annual Deferral Accounts.
5
<PAGE> 11
ARTICLE 5
---------
INVESTMENT FUNDS
----------------
5.1 Investment Funds.
----------------
The Committee shall establish and maintain the Company Stock Fund and
such other Investment Funds as are specified from time to time by the
Company. In this regard, the Company may choose to offer as
Investment Funds any investment vehicles, including without
limitation: (i) securities issued by investment companies advised by
affiliates of the Trustee, (ii) guaranteed investment contracts
recommended by the Trustee, and (iii) collective investment trusts
maintained by the Trustee.
5.2 Investment Elections of Participants.
------------------------------------
Each Participant shall make an investment election in the manner
prescribed by the Committee, directing the manner in which his/her
Deferrals shall be deemed to be invested. Each investment election
must be made at the time the applicable Deferral Agreement is signed
and may not be revoked or changed. Each Participant may make a
separate investment election for each of his/her Annual Deferral
Accounts. Each investment election shall specify that Deferrals shall
be deemed to be deposited in one or more of the Investment Funds in
percentages that are each an integral multiple of 1% and that in the
aggregate equal 100% of the Deferral. Except as expressly provided in
Section 4.3, amounts deemed to be invested in an Investment Fund
pursuant to this Section may not be transferred to another Investment
Fund.
5.3 Nature of Investment Funds.
--------------------------
Notwithstanding anything in the Plan, Trust or any Deferral Agreement
to the contrary, no Participant shall have any rights or interests in
any particular funds, securities or property of the Company, any
Affiliated Company or the Trust, or in any investment vehicle in which
Deferrals are deemed to be invested, by virtue of any investment
election made by the Participant under the Plan or any transactions
engaged in by the Trust. Each Annual Deferral Account, however, shall
be credited/charged in accordance with Article 4 with gains/losses as
if the Participant in fact had made a corresponding actual investment.
5.4 Liquidation of Investment Funds.
-------------------------------
If any Investment Fund is liquidated or otherwise ceases to exist
without a successor, then that portion of each Account balance that
previously has been deemed to have been invested in that Investment
Fund shall be deemed to have been transferred to an Investment Fund
consisting of guaranteed investment contracts issued by banks and/or
insurance companies or, if none, such other Investment Fund selected
by the Committee.
ARTICLE 6
---------
TRUST
-----
6.1 Establishment of Trust.
----------------------
The Company shall establish and maintain a Trust to provide a source
of funds to assist the Company in meeting its liabilities under the
Plan. Within thirty (30) days following the end of each Plan Year
ending after the Trust has become irrevocable pursuant to the Trust
Agreement, the Company shall be required to irrevocably deposit
additional cash or other property to the Trust in an amount sufficient
to pay each Participant or Beneficiary the benefits payable pursuant
to the terms of the Plan as of the close of that Plan year.
6
<PAGE> 12
The principal of the Trust, and any earnings thereon, shall be held
separate and apart from other funds of Company and shall be used
exclusively for the uses and purposes of Plan Participants and general
creditors of the Company as set forth herein and in the Trust
Agreement. Plan Participants and their Beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any
assets of the Trust. Any rights created under the Plan and the Trust
Agreement shall be mere unsecured contractual rights of Plan
Participants and their Beneficiaries against Company. Any assets held
by the Trust will be subject to the claims of the Company's general
creditors under federal and state law in the event of Insolvency, as
defined in the Trust Agreement. All assets deposited in the Trust
shall be held, administered and distributed by the Trustee in
accordance with the Trust Agreement. The Company shall pay directly,
or reimburse the Trustee for, all taxes due in respect of any income
or gains on Trust assets.
ARTICLE 7
---------
PLAN OPERATION AND ADMINISTRATION
---------------------------------
7.1 Powers of Committee.
-------------------
The Committee will have full power to administer the Plan. Such power
includes, but is not limited to, the following authority:
(a) to make and enforce such rules and regulations as it deems
necessary or proper for the efficient administration of the
Plan;
(b) to interpret the Plan and to decide all matters arising
thereunder, including the right to resolve or remedy any
ambiguities, inconsistencies or omissions. All such
interpretations shall be final and binding on all parties;
(c) to compute the amounts payable to any Participant or
Beneficiary or other person in accordance with the provisions
of the Plan;
(d) to authorize disbursements from the Trust or the Plan;
(e) to keep such records and submit such filings, elections,
applications, returns or other documents or forms as may be
required under ERISA, the Code or other applicable law;
(f) to appoint such agents, counsel, accountants and consultants
as may be desirable to assist in administering the Plan;
(g) To exercise the other powers that are expressly granted to it
herein, or that are impliedly necessary for it to carry out
any of its responsibilities hereunder; and
(h) by written instrument, to delegate any of the foregoing powers.
7.2 Nondiscriminatory Exercise of Authority.
---------------------------------------
The Committee shall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive
substantially the same treatment.
7.3 Reliance on Tables, etc.
-----------------------
The Committee will be entitled, to the extent permitted by law, to
rely conclusively on all tables, valuations, certificates, opinions
and reports which are furnished by any accountant, Trustee, counsel or
other expert retained by the Committee to assist it in administering
the Plan.
7.4 Indemnification.
---------------
7
<PAGE> 13
In addition to whatever rights of indemnification to which employees,
officers and directors of the Company and the Affiliated Companies may
be entitled under the articles of incorporation, regulations or bylaws
of the Company or the Affiliated Companies, under any provision of
law, or under any other agreement, the Company shall satisfy any
liabilities actually and reasonably incurred by any such employee,
officer or director, including expenses, attorneys' fees, judgments,
fines and amounts paid in settlement, in connection with any
threatened, pending, or completed action, suit, or proceeding which is
related to the exercise or failure to exercise by such person or
persons of any of the powers, authority, responsibilities, or
discretion of the Company, the Affiliated Companies or the Committee
provided under the Plan or the Trust Agreement, or reasonably believed
by such person or persons to be provided thereunder, and any action
taken by such person or persons in connection therewith.
7.5 Notices to Committee.
--------------------
The Committee shall designate one or more addresses to which notices
and other communications to the Committee shall be sent. No notice or
other communication shall be considered to have been given to or
received by the Committee until it has been delivered to the
Committee's attention at one of such designated addresses.
ARTICLE 8
---------
CLAIMS PROCEDURES
-----------------
8.1 Establishment of Claims Procedures.
----------------------------------
The Committee shall establish reasonable procedures under which a
claimant, who may be a Participant or Beneficiary, may present a claim
for benefits under this Plan.
8.2 Claims Denials.
--------------
Unless such claim is allowed in full by the Committee, written notice
of the denial shall be furnished to the claimant within ninety (90)
days (which may be extended by a period not to exceed an additional
ninety (90) days if special circumstances so require and proper
written notice to the claimant is given prior to the expiration of the
initial ninety (90) day period) setting forth the following in a
manner calculated to be understood by the claimant:
(a) The specific reason(s) for the denial;
(b) Specific reference(s) to any pertinent provision(s) of the
Plan or rules promulgated pursuant thereto on which the denial
is based;
(c) A description of any additional information or material as may
be necessary to perfect the claim, together with an
explanation of why it is necessary; and
(d) An explanation of the steps to be taken if the claimant wishes
to resubmit his/her claim for review.
8.3 Appeals of Denied Claims.
------------------------
Within a reasonable period of time after the denial of the claim, but
in any event not to be more than sixty (60) days, the claimant or
his/her duly authorized representative may make written application to
the Committee for a review of such denial. The claimant or his/her
representative may review documents held by the Committee and
pertinent to the denial of such claim, and may submit a written
statement of issues and comments together with such application for
review.
8
<PAGE> 14
8.4 Review of Appeals.
-----------------
If an appeal is timely filed, the Committee shall conduct a full and
fair review of the claim and mail or deliver to the claimant its
written decision within sixty (60) days after the claimant's request
for review (which may be extended by a period not to exceed an
additional sixty (60) days if special circumstances or a hearing so
require and proper written notice to the claimant is given prior to
the expiration of the initial sixty (60) day period). Such decision
shall:
(i) Be written in a manner calculated to be
understandable by the claimant;
(ii) State the specific reason(s) for the decision;
(iii) Make specific reference to pertinent provision(s) of
the Plan upon which such decision is based; and
(iv) Be final and binding on all parties.
ARTICLE 9
---------
AMENDMENT AND TERMINATION OF THE PLAN
-------------------------------------
9.1 Amendment.
---------
The Company may amend the Plan and Trust Agreement in any respect at
any time for any reason by action of the Committee without liability
to any Participant, Beneficiary or other person for any such amendment
or for any other action taken pursuant to this Section 9.1, provided
that any amendment required to be approved by the Company's
shareholders pursuant to Section 162(m) of the Code shall not be
effective until approved by the Company's shareholders in accordance
with the requirements of Section 162(m) and further provided that no
such amendment shall be made retroactively in a manner that would
deprive any Participant of any rights or benefits which have accrued
to his/her benefit under the Plan as of the date such amendment is
proposed to be effective, unless such amendment is necessary to comply
with applicable law.
9.2 Termination.
-----------
The Company may terminate the Plan at any time for any reason by
action of the Committee without any liability to any Participant,
Beneficiary or other person for any such termination or for any other
action taken pursuant to this Section 9.2. Following termination of
the Plan, and notwithstanding the provisions of any Deferral Agreement
entered into prior to such termination, no additional Deferrals may be
made hereunder, but all existing Accounts shall continue to be
administered in accordance with the Plan, as in effect immediately
prior to termination, and shall be distributed in accordance with such
terms of the Plan and the applicable Deferral Agreements, unless and
until the Company elects to accelerate distribution as provided below.
At any time on or after the effective date of termination of the Plan,
the Company, in its sole discretion, may elect to accelerate the
distribution of the entire balance of each Participant's Accounts.
Such accelerated distributions shall be made in accordance with
Article 3, except that all distributions shall be made in a lump sum
based on the value of the Accounts, determined as of the Valuation
Date immediately preceding the date of distribution. Upon the
completion of distributions to all Participants or Beneficiaries, as
the case may be, no Participant, Beneficiary or person claiming under
or through them, will have any claims in respect of the Plan.
9.3 Liquidation of the Trust.
------------------------
9
<PAGE> 15
The Trust shall continue in existence after the termination of the
Plan for such period of time as may be required to complete the
liquidation thereof in accordance with the terms of this Article 9.
ARTICLE 10
----------
MISCELLANEOUS PROVISIONS
------------------------
10.1 Headings.
--------
The headings of the Plan have been inserted for convenience of
reference only and are not to be deemed controlling in any
constructions of the provisions herein (other than with respect to
defined terms).
10.2 Plan Not Contract of Employment.
-------------------------------
The existence of the Plan shall not create, evidence or change any
contract of employment with any Participant. The right of the Company
and all Affiliated Companies to take corrective, disciplinary or other
action with respect to their employees, including terminating their
respective employment at any time for any reason, shall not be
affected by any provision of this Plan, and the Company and the
Affiliated Companies will not be deemed responsible to provide
continuing employment for any reason, at any time solely by reason of
this Plan.
10.3 Severability.
------------
If any provision of the Plan shall be invalid, such provision shall be
fully severable, and the remainder of the Plan and the application
thereof shall not be affected thereby.
10.4 Prohibition on Assignment.
-------------------------
No right or interest under the Plan of any Participant or Beneficiary
shall be subject at any time or in any manner to anticipation,
alienation, assignment (either at law or in equity), encumbrance (as
security or otherwise), garnishment, levy, execution, or other legal
or equitable process, and no Participant or Beneficiary shall have the
power at any time or in any manner to anticipate, transfer, assign
(either at law or in equity), alienate, or subject to attachment,
garnishment, levy, execution or other legal or equitable process, or
in any way encumber, such Participant's or Beneficiary's rights or
interests under the Plan, and any attempt to do so shall be void;
provided, however, that the Company shall have the unrestricted right
to set off against or recover out of any payments due a Participant or
Beneficiary at the time such payments would have otherwise been
payable hereunder, any amounts owed the Company or any Affiliated
Company by such Participant or Beneficiary.
10.5 Number and Gender.
-----------------
Any use of the singular shall be interpreted to include the plural and
the plural the singular. Any use of the masculine, feminine or neuter
shall be interpreted to include the masculine, feminine and neuter, as
the context shall require.
10.6 Governing Law.
-------------
To the extent not preempted by Federal law, the provisions of the Plan
shall be construed, regulated and administered under the laws of the
State of Ohio.
10
<PAGE> 16
10.7 Satisfaction of Claims.
----------------------
Any payment to any Participant or Beneficiary in accordance with the
terms of the Plan shall, to the extent thereof, be in full
satisfaction of all claims hereunder, whether they be against the
Company, the Committee, or the Trustee, any of whom may require the
Participant or Beneficiary (or legal representative), as a condition
precedent to such payment to execute a release and receipt therefor.
10.8 No Liability.
------------
Participation in the Plan is entirely at the risk of each Participant.
Neither the Company, any Affiliated Company, the Committee, the
Trustee nor any other person associated with the Plan shall have any
liability for any loss or diminution in the value of Accounts, or for
any failure of the Plan to effectively defer recognition of income or
to achieve any Participant's desired tax treatment or financial
results.
10.9 Tax Withholding.
---------------
All payments under the Plan shall be subject to federal, state and
local income tax withholding and other legally required deductions.
10.10 Facility of Payment.
-------------------
If the Committee determines that a Participant or Beneficiary entitled
to receive a payment under this Plan is (at the time such payment is
to be made) a minor or physically, mentally or legally incompetent to
receive such payment and that another person or an institution has
legal custody of such minor or incompetent individual, the Committee
may cause payment to be made to such person or institution having
custody of such Participant or Beneficiary. Such payment, to the
extent made, shall operate as a complete discharge of obligation by
the Committee, the Company, the Trustee and the Trust.
10.11 Repayment of Gainsharing Awards.
-------------------------------
If any amount credited to an Annual Deferral Account represents a
portion of a Gainsharing Award that is subsequently found to be
repayable by the Participant to the Company or any Affiliated Company
pursuant to the plan pursuant to which the Gainsharing Award was made,
the amount of that credit shall nevertheless remain unaffected by that
repayment obligation, and the Participant shall make the required
repayment out of his/her own funds.
10.12 Stock Subject to the Plan.
-------------------------
Subject to adjustment as provided below, the total number of shares of
Stock reserved and available for issuance in connection with the Plan
is Three Hundred Thousand (300,000). Any Stock issued hereunder may
consist, in whole or in part, of authorized and unissued shares or
treasury shares. If there is a merger, reorganization, consolidation,
recapitalization, share dividend, share split, combination of shares
or other change in corporate structure of the Company affecting the
Stock, such substitution or adjustment shall be made in the aggregate
number of shares of Stock reserved for issuance under the Plan as may
be approved by the Committee in its sole discretion; provided that the
number of shares of Stock to be issued in connection with the Plan
shall always be a whole number. Any fractional shares shall be
eliminated and the value of such fractional shares shall be deemed to
have been transferred to the Fixed Income Fund as of the effective
date of such substitution or adjustment.
11
<PAGE> 17
10.13 Conditions to Effectiveness of Plan.
-----------------------------------
Notwithstanding anything in this Plan, the Trust or any Deferral
Agreement to the contrary, the effectiveness of the Plan, the Trust
and all Deferral Agreements is conditioned on the Plan being approved
by the Company's shareholders at the 1995 Annual Meeting of
Shareholders in accordance with Section 162(m) of the Code, Rule 16b-3
under the Securities Exchange Act of 1934 and other applicable law.
If the Plan is not so approved, the Plan, the Trust and all Deferral
Agreements shall be considered void AB INITIO and all amounts
previously deferred pursuant to those Deferral Agreements shall be
paid forthwith to the appropriate Participants as if those Deferral
Agreements had never existed.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed by
its duly authorized officers as of this 28th day of December,
1994.
THE PROGRESSIVE CORPORATION
By:/s/ David M. Schneider
--------------------------------------------------------
Title: Secretary
-----------------------------------------------------
12
<PAGE> 1
EXHIBIT 4(b)
THE PROGRESSIVE CORPORATION
EXECUTIVE DEFERRED COMPENSATION TRUST
<PAGE> 2
Exhibit 4(b)
THE PROGRESSIVE CORPORATION
EXECUTIVE DEFERRED COMPENSATION TRUST
This Agreement made this 28th day of December, 1994, by and between The
Progressive Corporation (Company) and NBD Bank, N.A., Trustee;
WHEREAS, Company has adopted the nonqualified deferred compensation
plan known as The Progressive Corporation Executive Deferred Compensation Plan
("Plan");
WHEREAS, Company has incurred or expects to incur liability under the
terms of such Plan with respect to the individuals participating in such
Plan;
WHEREAS, Company wishes to establish a trust (hereinafter called the
"Trust") and to contribute to the Trust assets that shall be held
therein, subject to the claims of Company's creditors in the event of Company's
Insolvency, as herein defined, until paid to Plan participants and their
beneficiaries in such manner and at such times as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall constitute
an unfunded arrangement and shall not affect the status of the Plan as an
unfunded plan maintained for the purpose of providing deferred compensation for
a select group of management or highly compensated employees for purposes of
Title I of the Employee Retirement Income Security Act of 1974;
WHEREAS, it is the intention of Company to make contributions to the Trust
to provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plan;
NOW, therefore, the parties do hereby establish the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:
SECTION 1. Establishment of Trust
----------------------
(a) Company hereby deposits with Trustee in trust Ten Dollars ($10.00), which
shall become the principal of the Trust to be held, administered and
disposed of by Trustee as provided in this Trust Agreement.
(b) The Trust shall become irrevocable 30 days following the issuance of a
favorable private letter ruling from the Internal Revenue Service.
(c) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
1
<PAGE> 3
(d) The principal of the Trust, and any earnings thereon shall be held separate
and apart from other funds of Company and shall be used exclusively for the
uses and purposes of Plan participants and general creditors as herein set
forth. Plan participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust.
Any rights created under the Plan and this Trust Agreement shall be mere
unsecured contractual rights of Plan participants and their beneficiaries
against Company. Any assets held by the Trust will be subject to the
claims of Company's general creditors under federal and state law in the
event of Insolvency, as defined in Section 3(a) herein.
(e) Within 30 days following the end of the Plan year(s), ending after the
Trust has become irrevocable pursuant to Section 1(b) hereof, Company shall
be required to irrevocably deposit additional cash or other property to the
Trust in an amount sufficient to pay each Plan participant or beneficiary
the benefits payable pursuant to the terms of the Plan as of the close of
the Plan year(s).
SECTION 2. Payments to Plan Participants and Their Beneficiaries
-----------------------------------------------------
(a) Company shall deliver to Trustee a schedule (the "Payment Schedule") that
indicates the amounts payable in respect of each Plan participant (and his
or her beneficiaries), that provides a formula or other instructions
acceptable to Trustee for determining the amounts so payable, the form in
which such amount is to be paid (as provided for or available under the
Plan, and the time of commencement for payment of such amounts. Except as
otherwise provided herein, Trustee shall make payments to the Plan
participants and their beneficiaries in accordance with such Payment
Schedule. The Trustee shall make provision for the reporting and
withholding of any federal, state or local taxes that may be required to be
withheld with respect to the payment of benefits pursuant to the terms of
the Plan and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported, withheld and
paid by Company.
(b) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan shall be determined by Company or such party as it
shall designate under the Plan, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plan.
(c) Company may make payment of benefits directly to Plan participants or their
beneficiaries as they become due under the terms of the Plan. Company
shall notify Trustee of its decision to make payment of benefits directly
prior to the time amounts are payable to participants or their
beneficiaries. In addition, if the principal of the Trust, and any
earnings thereon, are not sufficient to make payments of benefits in
accordance with the terms of the Plan, Company shall make the balance of
each such payment as it falls due. Trustee shall notify Company where
principal and earnings are not sufficient.
2
<PAGE> 4
SECTION 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When
-------------------------------------------------------------------
Company is Insolvent.
---------------------
(a) Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if the Company is Insolvent. Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) Company is unable
to pay its debts as they become due, or (ii) Company is subject to a
pending proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in Section
1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer of Company shall
have the duty to inform Trustee in writing of Company's Insolvency.
If a person claiming to be a creditor of Company alleges in writing to
Trustee that Company has become Insolvent, Trustee shall determine
whether Company is Insolvent and, pending such determination, Trustee
shall discontinue payment of benefits to Plan participants or their
beneficiaries.
(2) Unless Trustee has actual knowledge of Company's Insolvency, or has
received notice from Company or a person claiming to be a creditor
alleging that Company is Insolvent, Trustee shall have no duty to
inquire whether Company is Insolvent. Trustee may in all events rely
on such evidence concerning Company's solvency as may be furnished to
Trustee and that provides Trustee with a reasonable basis for making a
determination concerning Company's solvency.
(3) If at any time Trustee has determined that Company is Insolvent,
Trustee shall discontinue payments to Plan participants or their
beneficiaries and shall hold the assets of the Trustee for the benefit
of Company's general creditors. Nothing in this Trust Agreement shall
in any way diminish any rights of Plan participants or their
beneficiaries to pursue their rights as general creditors of Company
with respect to benefits due under the Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Plan participants or
their beneficiaries in accordance with Section 2 of this Trust
Agreement only after Trustee has determined that Company is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to
Plan participants or their beneficiaries under the terms of the Plan for
the period of such discontinuance, less the aggregate amount of any
payments made to Plan participants or their
3
<PAGE> 5
beneficiaries by Company in lieu of the payments provided for hereunder
during any such period of discontinuance.
SECTION 4. Payments to Company.
--------------------
Except as provided in Section 3 hereof, after the Trust has become irrevocable,
Company shall have no right or power to direct Trustee to return to Company or
to divert to others any of the Trust assets before all payment of benefits have
been made to Plan participants and their beneficiaries pursuant to the terms of
the Plan.
SECTION 5. Investment Authority.
---------------------
(a) Trustee may invest in securities (including stock or rights to acquire
stock) or obligations issued by Company. All rights associated with assets
of the Trust shall be exercised by Trustee or the person designated by
Trustee, and shall in no event be exercisable by or rest with Plan
participants, except that voting rights with respect to Trust assets will
be exercised by Company. Company shall have the right at anytime, and from
time to time in its sole discretion, to substitute assets of equal fair
market value for any asset held by the Trust. This right is exercisable by
Company in a nonfiduciary capacity without the approval or consent of any
person in a fiduciary capacity.
SECTION 6. Disposition of Income.
----------------------
(a) During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 7. Accounting by Trustee.
----------------------
(a) Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee. Within 60 days following the close of each calendar
year and within 60 days after the removal or resignation of Trustee,
Trustee shall deliver to Company a written account of its administration of
the Trust during such year or during the period from the close of the last
preceding year to the date of such removal or resignation, setting forth
all investments, receipts, disbursements and other transactions effected by
it, including a description of all securities and investments purchased and
sold with the cost or net proceeds of such purchases or sales (accrued
interest paid or receivable being shown separately), and showing all cash,
securities and other property held in the Trust at the end of such year or
as of the date of such removal or resignation, as the case may be.
4
<PAGE> 6
SECTION 8. Responsibility of Trustee.
--------------------------
(a) Trustee shall act with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in like capacity
and familiar with such matters would use in the conduct of an enterprise of
a like character and with like aims, provided, however, that Trustee shall
incur no liability to any person for any action taken pursuant to a
direction, request, or approval given by Company which is contemplated by,
and in conformity with, the terms of the Plan or this Trust and is given in
writing by Company. In the event of a dispute between Company and a party,
Trustee may apply to a court of competent jurisdiction to resolve the
dispute.
(b) Trustee may consult with legal counsel (who may also be counsel for Company
generally) with respect to any of its duties or obligations hereunder.
(c) Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist it in performing any
of its duties or obligations hereunder.
(d) Trustee shall have, without exclusion, all powers conferred on trustees by
applicable law, unless expressly provided otherwise herein, provided,
however, that if an insurance policy is held as an asset of the Trust,
Trustee shall have no power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion of the policy
to a different form) other than to a successor Trustee, or to loan to any
person the proceeds of any borrowing against such policy.
(e) However, notwithstanding the provisions of Section 8(d) above, Trustee may
loan to Company the proceeds of any borrowing against an insurance policy
held as an asset of the Trust.
(f) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that could
give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure
and Administrative Regulations promulgated pursuant to the Internal Revenue
Code.
SECTION 9. Compensation and Expenses of Trustee.
-------------------------------------
Company shall pay all administrative and Trustee's fees and expenses. If not
so paid, the fees and expenses shall be paid from the Trust.
5
<PAGE> 7
SECTION 10. Resignation and Removal of Trustee.
----------------------------------
(a) Trustee may resign at any time by written notice to Company, which shall be
effective 60 days after receipt of such notice unless Company and Trustee
agree otherwise.
(b) Trustee may be removed by Company on 60 days notice or upon shorter notice
accepted by Trustee.
(c) If Trustee resigns or is removed within 2 year(s) of a Change of Control,
as defined herein, Trustee shall select a successor Trustee in accordance
with the provisions of Section 11(b) hereof prior to the effective date of
Trustee's resignation or removal.
(d) Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within 60 days after receipt of
notice of resignation, removal or transfer, unless Company extends the time
limit.
(e) If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraphs (a) or (b) of this section. If no such
appointment has been made, Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All
expenses of Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
SECTION 11. Appointment of Successor.
------------------------
(a) If Trustee resigns or is removed in accordance with Section 10(a) or (b)
hereof, Company may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers
under state law, as a successor to replace Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing by
the new Trustee, who shall have all of the rights and powers of the former
Trustee, including ownership rights in the Trust assets. The former
Trustee shall execute any instrument necessary or reasonably requested by
Company or the successor Trustee to evidence the transfer.
(b) If Trustee resigns or is removed pursuant to the provisions of Section
10(c) hereof and selects a successor Trustee, Trustee may appoint any third
party such as a bank trust department or other party that may be granted
corporate trustee powers under state law. The appointment of a successor
Trustee shall be effective when accepted in writing by the new Trustee.
The new Trustee shall have all the rights and powers of the former Trustee,
including ownership rights in Trust assets. The former Trustee shall
execute any instrument necessary or reasonably requested by the successor
Trustee to evidence the transfer.
6
<PAGE> 8
(c) The successor Trustee need not examine the records and acts of any prior
Trustee and may retain or dispose of existing Trust assets, subject to
Sections 7 and 8 hereof. The successor Trustee shall not be responsible
for and Company shall indemnify and defend the successor Trustee from any
claims or liability resulting from any action or inaction of any prior
Trustee or from any other past event, or any condition existing at the time
it becomes successor Trustee.
SECTION 12. Amendment or Termination.
------------------------
(a) This Trust Agreement may be amended by a written instrument executed by
Trustee and Company. Notwithstanding the foregoing, no such amendment
shall conflict with the terms of the Plan or shall make the Trust revocable
after it has become irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which Plan participants and
their beneficiaries are no longer entitled to benefits pursuant to the
terms of the Plan unless sooner revoked in accordance with Section 1(b)
hereof. Upon termination of the Trust any assets remaining in the Trust
shall be returned to Company.
(c) Upon written approval of participants or beneficiaries entitled to payment
of benefits pursuant to the terms of the Plan, Company may terminate this
Trust prior to the time all benefit payments under the Plan have been made.
All assets in the Trust at termination shall be returned to Company.
SECTION 13. Miscellaneous
-------------
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio.
(d) For purposes of this Trust, Change of Control shall mean a "Change in
Control" or "Potential Change in Control" within the meaning of The
Progressive Corporation 1989 Incentive Plan (amended and restated as of
April 24, 1992 and as further amended as of July 1, 1992 and February 5,
1993).
7
<PAGE> 9
IN WITNESS WHEREOF, Company and Trustee have hereunto caused this Trust
Agreement to be executed by their duly authorized representatives as of the
date set forth above.
THE PROGRESSIVE CORPORATION NBD BANK, N.A.
By: /s/ David M. Schneider By: /s/ John R. Mrzyglod
------------------------ -------------------------
Title: Secretary Title: Second Vice President
--------------------- ----------------------
8
<PAGE> 1
EXHIBIT 4(c)
DEFERRAL AGREEMENT
<PAGE> 2
Exhibit 4(c)
DEFERRAL AGREEMENT
THIS DEFERRAL AGREEMENT is entered into pursuant to the provisions of The
Progressive Corporation Executive Deferred Compensation Plan ("Plan"). All
capitalized terms in this Agreement shall have the meanings ascribed to them in
the Plan.
1. DEFERRAL ELECTION. I hereby elect to defer receipt of the following
portion of my Gainsharing Award earned in respect of the year ending
December 31, 1995 (check one and enter any desired percentage not less than
10%. The amount elected below will be reduced by FICA, Medicare and other
legally required deductions.)
[ ] I elect to defer _______% of my entire Gainsharing Award
OR
[ ] I elect to defer _______% of that portion, if any, of my Gainsharing
Award that exceeds $_______________.
2. FIXED DEFERRAL PERIOD. (The Plan gives you the option of electing a Fixed
Deferral Period. If you elect a Fixed Deferral Period, the balance of your
Annual Deferral Account established pursuant to this Agreement will be
distributed to you within 30 days after the end of the Fixed Deferral
Period, or, if earlier, the date you die, incur a Termination of Employment
or become Disabled or the date a Change in Control occurs. If you do not
elect a Fixed Deferral Period, your Account will be distributed upon the
earlier of the date you die, incur a Termination of Employment or become
Disabled or the date a Change in Control occurs. Please check one of the
following:)
[ ] I elect a Fixed Deferral Period ending on _______ (Must be a date at
least 2 years after the end of the calendar year in which the
Gainsharing Award is earned)
OR
[ ] I do NOT wish to elect a Fixed Deferral Period.
3. METHOD OF DISTRIBUTION. I hereby elect that any distribution of the
balance of the Annual Deferral Account established pursuant to this
Agreement made on account of Termination of Employment or expiration of a
Fixed Deferral Period be paid as follows: (check one)
[ ] in a single lump sum payment
OR
[ ] in three annual installments
I understand that Plan distributions made on account of reasons other than
Termination of Employment or expiration of a Fixed Deferral Period will be
made in a single lump sum payment.
4. INVESTMENT ELECTION. I direct that the amount I have deferred pursuant to
Section 1 of this Agreement shall be deemed to be invested in the following
Investment Funds in the percentages indicated: (must be increments of 1%)
Company Stock Fund _________%
Vanguard Explorer Fund _________%
Vanguard International Growth Portfolio _________%
U.S. Growth Portfolio _________%
1
<PAGE> 3
Vanguard Index Trust--500 Portfolio _________%
Vanguard STAR Fund _________%
Vanguard Total Bond Market Portfolio _________%
Vanguard Investment Contract Trust _________%
Vanguard Money Market Reserves-Prime Portfolio _________%
TOTAL 100%
I understand that this investment election cannot be changed and that
I cannot transfer amounts among Investment Funds. I also understand
that this investment election is merely a device used to determine the
amount payable to me under the Plan and does not provide me with any
actual rights or interests in any particular funds, securities or
property of the Company, any Affiliated Company or the Trust, in any
stock of The Progressive Corporation or in any Vanguard mutual fund.
I also understand that my right to receive distributions under the
Plan makes me a general creditor of the Company with no greater
priority than any other general creditor of the Company.
5. MISCELLANEOUS. I understand that all elections made in this Agreement
are irrevocable and that this Agreement is subject to the terms,
conditions and limitations of the Plan, as in effect from time to
time, in all respects. I acknowledge that I have received, read and
understand the Plan Description dated December 1994 relating to the
Plan. I agree to accept as final and binding all decisions and
interpretations of the Committee relating to the Plan, the Trust and
this Agreement. I also understand that if the Plan is not approved by
the Company's shareholders at the 1995 Annual Meeting of Shareholders,
then this Agreement shall be null and void.
____________________________________________
Signature of Eligible Executive
____________________________________________
Printed Name of Eligible Executive
____________________________________________
Social Security Number of Eligible Executive
December 30, 1994
--------------------------------------
Date
Received and accepted
on behalf of the Committee
this _____ day of ________________,
19_______.
2
<PAGE> 1
EXHIBIT 4(d)
------------
Amended Articles of Incorporation of the Registrant
(incorporated by reference to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1993, as filed
with the Securities and Exchange Commission
on April 23, 1993; see Exhibit 3 therein)
<PAGE> 1
EXHIBIT 4(e)
------------
Code of Regulations of the Registrant
(incorporated by reference to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1991, as filed
with the Securities and Exchange Commission
on May 6, 1991; see Exhibit 3(B) therein)
<PAGE> 1
EXHIBIT 5
BAKER & HOSTETLER CONSENT
<PAGE> 2
Exhibit 5
Baker & Hostetler
3200 National City Center
1900 East Ninth Street
Cleveland, Ohio 44114
December 28, 1994
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
Gentlemen:
We have acted as counsel to The Progressive Corporation, an Ohio corporation
(the "Company"), in connection with the Company's Registration Statement on
Form S-8 (the "Registration Statement") filed under the Securities Act of 1933,
as amended (the "Act"), relating to the offering of up to 300,000 Common
Shares, $1.00 par value (the "Common Shares"), of the Company pursuant to the
Company's Executive Deferred Compensation Plan (the "Plan").
In connection with the foregoing, we have examined: (a) the Amended
Articles of Incorporation, as amended, and Code of Regulations, as amended of
the Company, (b) the Plan, and (c) such records of the corporate proceedings of
the Company and such other documents as we deemed necessary to render this
opinion.
Based on such examination, we are of the opinion that:
1. The Company is a corporation validly existing under the laws of the
State of Ohio.
2. The Common Shares available for issuance under the Plan, when issued
pursuant to the Plan will have been legally issued, and will be fully paid and
nonassessable.
We hereby consent to the use of this Opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ Baker & Hostetler
<PAGE> 1
EXHIBIT 23(a)
-------------
Consent of Coopers & Lybrand, Independent Accountants
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our report dated January 26, 1994, on our audits of the
consolidated financial statements and financial statement schedules of The
Progressive Corporation and subsidiaries as of December 31, 1993 and 1992, and
for each of the three years in the period ended December 31, 1993, which report
is included in the Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
Cleveland, Ohio
December 28, 1994
<PAGE> 1
EXHIBIT 23(b)
-------------
Consent of Baker & Hostetler (included in Exhibit 5)
<PAGE> 1
EXHIBIT 24(a)
-------------
Powers of Attorney
<PAGE> 2
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and/or
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, David M.
Schneider, Dane A. Shrallow and Michael R. Uth, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-8 or other form in order to register under the Securities
Act of 1933, as amended, up to 300,000 of the Company's Common Shares, $1.00
par value, issuable under The Progressive Corporation Executive Deferred
Compensation Plan, and any plan interests related thereto, and to any and all
amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such
attorney-in-fact and agent, or any such substitute or substitutes, shall
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: December 19, 1994 /s/Peter B. Lewis
-----------------------------
Peter B. Lewis
Chairman, President, Principal
Executive Officer and Director
<PAGE> 3
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and/or
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, David M.
Schneider, Dane A. Shrallow and Michael R. Uth, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-8 or other form in order to register under the Securities
Act of 1933, as amended, up to 300,000 of the Company's Common Shares, $1.00
par value, issuable under The Progressive Corporation Executive Deferred
Compensation Plan, and any plan interests related thereto, and to any and all
amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such
attorney-in-fact and agent, or any such substitute or substitutes, shall
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: December 27, 1994 /s/Charles B. Chokel
---------------------------
Charles B. Chokel
Principal Financial Officer
<PAGE> 4
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and/or
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, David M.
Schneider, Dane A. Shrallow and Michael R. Uth, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-8 or other form in order to register under the Securities
Act of 1933, as amended, up to 300,000 of the Company's Common Shares, $1.00
par value, issuable under The Progressive Corporation Executive Deferred
Compensation Plan, and any plan interests related thereto, and to any and all
amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such
attorney-in-fact and agent, or any such substitute or substitutes, shall
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: December 27, 1994 /s/Jeffrey W. Basch
---------------------------
Jeffrey W. Basch
Principal Accounting Officer
<PAGE> 5
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and/or
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, David M.
Schneider, Dane A. Shrallow and Michael R. Uth, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-8 or other form in order to register under the Securities
Act of 1933, as amended, up to 300,000 of the Company's Common Shares, $1.00
par value, issuable under The Progressive Corporation Executive Deferred
Compensation Plan, and any plan interests related thereto, and to any and all
amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such
attorney-in-fact and agent, or any such substitute or substitutes, shall
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: December 16, 1994 /s/Milton N. Allen
------------------------
Milton N. Allen
Director
<PAGE> 6
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and/or
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, David M.
Schneider, Dane A. Shrallow and Michael R. Uth, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-8 or other form in order to register under the Securities
Act of 1933, as amended, up to 300,000 of the Company's Common Shares, $1.00
par value, issuable under The Progressive Corporation Executive Deferred
Compensation Plan, and any plan interests related thereto, and to any and all
amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such
attorney-in-fact and agent, or any such substitute or substitutes, shall
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: December 20, 1994 /s/B. Charles Ames
------------------------
B. Charles Ames
Director
<PAGE> 7
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and/or
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, David M.
Schneider, Dane A. Shrallow and Michael R. Uth, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-8 or other form in order to register under the Securities
Act of 1933, as amended, up to 300,000 of the Company's Common Shares, $1.00
par value, issuable under The Progressive Corporation Executive Deferred
Compensation Plan, and any plan interests related thereto, and to any and all
amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such
attorney-in-fact and agent, or any such substitute or substitutes, shall
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: December 20, 1994 /s/Stephen R. Hardis
------------------------
Stephen R. Hardis
Director
<PAGE> 8
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and/or
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, David M.
Schneider, Dane A. Shrallow and Michael R. Uth, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-8 or other form in order to register under the Securities
Act of 1933, as amended, up to 300,000 of the Company's Common Shares, $1.00
par value, issuable under the Progressive Corporation Executive Deferred
Compensation Plan, and any plan interests related thereto, and to any and all
amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such
attorney-in-fact and agent, or any such substitute or substitutes, shall
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: December 19, 1994 /s/Norman S. Matthews
-------------------------
Norman S. Matthews
Director
<PAGE> 9
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and/or
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, David M.
Schneider, Dane A. Shrallow and Michael R. Uth, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-8 or other form in order to register under the Securities
Act of 1933, as amended, up to 300,000 of the Company's Common Shares, $1.00
par value, issuable under the Company's Executive Deferred Compensation Plan,
and any plan interests related thereto, and to any and all amendments,
post-effective amendments and exhibits to such Registration Statement, and to
any and all applications, instruments and other documents pertaining thereto,
giving and granting unto each such attorney-in-fact and agent full power and
authority to do and perform any and all acts and things whatsoever necessary or
appropriate to be done in and about the premises, as fully for all intents and
purposes as he might or could do if personally present, and hereby ratifying
and confirming all that each such attorney-in- fact and agent, or any such
substitute or substitutes, shall lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: December 27, 1994 /s/Paul B. Sigler
-----------------------
Paul B. Sigler
Director
<PAGE> 10
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and/or
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, David M.
Schneider, Dane A. Shrallow and Michael R. Uth, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for him and in his name, place and stead, in any and
all capacities, as attorney-in-fact and agent, his signature to a Registration
Statement on Form S-8 or other form in order to register under the Securities
Act of 1933, as amended, up to 300,000 of the Company's Common Shares, $1.00
par value, issuable under The Progressive Corporation Executive Deferred
Compensation Plan, and any plan interests related thereto, and to any and all
amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such
attorney-in-fact and agent, or any such substitute or substitutes, shall
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: December 23, 1994 /s/Donald B. Shackelford
------------------------------
Donald B. Shackelford
Director
<PAGE> 1
EXHIBIT 24(b)
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Resolutions of the Board of Directors
of the Registrant as to Power of Attorney,
certified by Secretary of the Registrant
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THE PROGRESSIVE CORPORATION
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SECRETARY'S CERTIFICATE
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I, David M. Schneider, do hereby certify that I am the duly elected,
qualified and acting Secretary of THE PROGRESSIVE CORPORATION, an Ohio
corporation (the "Corporation"); that I have custody of the official records of
the Corporation; that there is attached hereto as Exhibit A, a true, correct
and complete copy of resolutions duly adopted on December 27, 1994 by written
action taken without a meeting of the Board of Directors of the Corporation;
and that said resolutions are valid and binding, have not been amended,
modified or rescinded, and are in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have hereunto subscribed my hand this 28th day
of December, 1994.
/s/ David M. Schneider
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David M. Schneider, Secretary
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EXHIBIT A
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RESOLVED, that subject to approval of the shareholders of the Company
at the 1995 Annual Meeting of Shareholders in accordance with Section 162(m) of
the Internal Revenue Code of 1986, as amended and Rule 16b-3 of The Securities
Exchange Act of 1934, as amended The Progressive Corporation Executive Deferred
Compensation Plan ("Plan"), in the form attached hereto as Exhibit A, be and
hereby is approved and adopted, together with such changes in such form or in
the terms of the Plan as may be deemed necessary or advisable by any of the
Company's officers; and
FURTHER RESOLVED, that The Progressive Corporation Executive Deferred
Compensation Trust ("Trust") in the form attached hereto as Exhibit B, be and
hereby is approved and adopted, together with such changes in such form or in
the terms of the Trust as may be deemed necessary or advisable by any of the
Company's officers; and
FURTHER RESOLVED, that NBD Bank, N.A., or such other bank or trust
company as may be selected by any of the officers of the Company, be and is
hereby, designated to serve as Trustee under and within the meaning of the
Trust; and
FURTHER RESOLVED, that the officers of the Company are, and each of
them with full power to act without the others is, hereby authorized and
empowered, in the name and on behalf of the Company, to execute the Plan and
Trust in the forms, together with any changes, authorized above, such execution
to be deemed conclusive evidence of all requisite approvals of the Plan and
Trust by the Company; and
FURTHER RESOLVED, that the officers of the Company are, and each of
them with full power to act without the others is, hereby authorized and
empowered, in the name and on behalf of the Company, to execute and file a
request for a private letter ruling with the Internal Revenue Service ("IRS"),
requesting a favorable ruling from the IRS as to the federal income tax status
of the Plan and Trust, and to take any and all other actions in conjunction
therewith as may in their opinion or the opinion of any of them, be necessary
or desirable in order to obtain such favorable ruling from the IRS, including
the execution of such additional amendment or amendments to the Plan or Trust
as may be required by the IRS; and
FURTHER RESOLVED, that the Company be and hereby is authorized and
empowered to direct the Trustee of the Trust to acquire, from time to time, all
Common Shares, $1.00 par value per share, of the Company ("Common Shares") to
be held by the Trust at fair market value on the open market or directly from
the Company through the issuance of authorized but previously unissued shares
or treasury shares; and
FURTHER RESOLVED, that the Common Shares of the Company to be issued
in accordance with the terms and provisions of the Plan shall be duly
authorized and issued, fully paid and non-assessable Common Shares of the
Company, free of any shareholder preemptive rights; and
FURTHER RESOLVED, that the Chairman of the Board, the President, the
Treasurer and the Secretary of the Company be, and each of them with full power
to act without the others is, hereby authorized and empowered to prepare or
cause to be prepared, and to execute and file or cause to be executed and filed
with the Securities and Exchange Commission (the "Commission"), under the
Securities Act of 1933, as amended (the "Act"), for and on behalf of the
Company, one or more Registration Statements on Form S-8, or such other
available form or forms as may be approved by any such officer, (including all
exhibits and other documents relating thereto) (individually and collectively,
the "Registration Statement") with respect to the registration of an additional
Three Hundred Thousand (300,000) Common Shares of the Company, and an unlimited
amount of plan
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interests ("Interests"), to be offered under the terms of the Plan (with such
changes, including, but not limited to, the number of Common Shares to be
registered and other changes of a substantive nature) as any such officer or
officers shall approve, which approval shall be shown conclusively by execution
of the Registration Statement; and
FURTHER RESOLVED, that the Chairman of the Board, the President, the
Treasurer and the Secretary of the Company be, and each of them with full power
to act without the others is, hereby authorized and empowered, for and on
behalf of the Company, to prepare or cause to be prepared and to execute or
cause to be executed such amendments (including post-effective amendments) and
supplements to the Registration Statement as they, or any of them, may deem
necessary or desirable, or as may be required by the Commission; to cause such
amendments and supplements, when duly executed (if required), to be filed with
the Commission; and to do all such other acts and things and to execute and
deliver all such other documents as they, or any of them, may deem necessary or
desirable in order to cause the Registration Statement to comply with the Act
and the rules and regulations promulgated by the Commission pursuant thereto
(the "Rules and Regulations") and to become effective under the Act and the
Rules and Regulations; and
FURTHER RESOLVED, that Messrs. R. Steven Kestner, David M. Schneider,
Dane A. Shrallow and Michael R. Uth be, and each of them with full power to act
without the others is, hereby authorized to sign the Registration Statement and
any and all amendments and supplements to the Registration Statement, on behalf
of and as attorneys-in-fact for the principal executive officer, principal
accounting officer, principal financial officer or any other officer of the
Company, including, without limitation, the Chairman of the Board, President,
Treasurer and Secretary, and on behalf of and as attorneys for each director of
the Company; and
FURTHER RESOLVED, that when the registration of the Common Shares and
the Interests with the Commission on the Registration Statement has become
effective, the Chairman of the Board, the President, the Treasurer and the
Secretary of the Company be, and each of them with full power to act without
the others is, hereby authorized and empowered, for and on behalf of the
Company, to execute any and all documents and to do any and all things
necessary and proper to carry out the offer and sale of the Common Shares and
the Interests under the Plan; and
FURTHER RESOLVED, that David M. Schneider, or such other individual as
may hereafter be named by the Executive Committee and designated to the
Commission in his stead, is hereby named as the person authorized to receive
service of all notices, orders, communications and other documents which may be
issued or sent by the Commission in connection with the Registration Statement
and any and all amendments and supplements thereto, with all the powers
consequent upon such designation under the Rules and Regulations; and
FURTHER RESOLVED, that any director or officer of the Company required
by law to affix his signature to the Registration Statement and any and all
amendments and supplements thereto may affix his signature personally, or by
any attorney-in-fact, duly constituted in writing by said director or officer
to sign his name thereto; and
FURTHER RESOLVED, that each of the officers of the Company and its
attorneys, Messrs. R. Steven Kestner, David M. Schneider, Dane A. Shrallow,
and Michael R. Uth be, and each of them with full power to act without the
others is, hereby authorized and empowered to appear on behalf of the Company
before the Commission in connection with any matters relating to the
Registration Statement and all amendments and supplements thereto; and
FURTHER RESOLVED, that the Chairman of the Board, the President, the
Treasurer and the Secretary of the Company be, and each of them with full power
to act without the others is, hereby authorized and empowered, in the name and
on behalf of the
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Company, to take any and all action which they, or any of them, deem necessary
or advisable in order to obtain a permit, register or qualify the Common Shares
and the Interests for issuance, or to request an exemption from registration of
the Common Shares and the Interests, or to register or obtain a license for the
Company as a dealer or broker, under the securities laws of such states of the
United States of America and of such foreign jurisdictions as such officers may
deem advisable, and in connection with such registrations, permits, licenses,
qualifications and exemptions to execute, acknowledge, verify, deliver, file
and publish or cause to be published all such applications, reports,
resolutions, surety bonds, consents to service of process, appointments of
attorneys to receive service of process, powers of attorney and other papers
and instruments, and to take any and all further action, which they, or any of
them, may deem necessary or advisable to order to maintain such registration or
qualification in effect for as long as they may deem to be in the best
interests of the Company or as required by law; and that the execution by any
such officer or officers of any such document or the taking of any such action
in connection with the foregoing matters shall be deemed to be conclusive
evidence that such officer or officers deem(s) the taking of any such action to
be necessary or proper and in the best interests of the Company and approves
such action; and
FURTHER RESOLVED, that Peter B. Lewis, Charles B. Chokel and David M.
Schneider be, and each of them hereby is, appointed as the attorney-in-fact and
agent of the Company, with full power of substitution and resubstitution, for
and in the name, place and stead of the Company, to sign, attest and file the
Registration Statement for registration of the Common Shares and the Interests
to be issued pursuant to the Plan, and any and all amendments and supplements
to such Registration Statement, and any and all applications or other documents
to be filed with the Commission and any and all applications or other documents
to be filed with any governmental or private agency or official relative to the
issuance of the Common Shares and the Interests, with full power and authority
to do and perform any and all acts and things whatsoever requisite and
necessary to be done in the premises, hereby ratifying and approving the acts
of such attorneys or any such substitute or substitutes and, without implied
limitation, including in the above the authority to do the foregoing things on
behalf of the Company in the name of the person so acting or on behalf and in
the name of any duly authorized officer of the Company; and the Chairman of the
Board, the President, the Treasurer and the Secretary be, and each of them with
full power to act without the others is, hereby authorized and empowered for
and on behalf of the Company to execute a Power of Attorney evidencing the
foregoing appointment; and
FURTHER RESOLVED, that the preparation, execution and delivery of a
Listing Application or a Supplemental Listing Application (including all
exhibits and supporting material) to the New York Stock Exchange to list Three
Hundred Thousand (300,000) additional Common Shares to be issued under the Plan
be, and it hereby is, authorized and approved; and
FURTHER RESOLVED, that the authority of National City Bank ("NCB"), as
transfer agent and registrar for the Company's outstanding Common Shares be,
and is hereby extended to include the original issue or the transfer and
registration from time to time of the Common Shares to be issued under the
Plan; and
FURTHER RESOLVED, that for the purpose of the original issue or transfer of
Common Shares by the Company under the Plan as aforesaid, or the transfer of
Common Shares by any trustee under the Plan, NCB, as transfer agent and
registrar for the Common Shares, be, and is hereby, authorized and directed to
(i) countersign as such transfer agent by manual or facsimile signature stock
certificates for such Common Shares when such certificates shall be delivered
to such transfer agent duly executed on behalf of the Company, (ii) procure as
registrar of the Common Shares the registration of such certificates, and (iii)
deliver such certificates, when so countersigned and registered, to the trustee
under the Plan or other person entitled thereto as set forth in the order or
orders of the Company for the issuance or transfer of such Common Shares; and
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FURTHER RESOLVED, that the Board of Directors of the Company hereby
adopts and incorporates by reference any form of specific resolution to carry
into effect the purpose and intent of the foregoing resolutions, or covering
authority included in matters authorized in the foregoing resolutions,
including forms of resolutions in connection therewith that may be required by
the Commission, the New York Stock Exchange, the National Association of
Securities Dealers, Inc., and any state, institution, person or agency, and the
Secretary of the Company is hereby directed to insert a copy thereof in the
minute book of the Company following this written action and to certify the
same as having been duly adopted thereby; and
FURTHER RESOLVED, that the above named officers of the Company be, and
each of them with full power to act without the others is, hereby authorized
and empowered to do or cause to be done all such acts or things, to pay or
cause to be paid all fees and expenses, and to make, execute and deliver or
cause to be made, executed and delivered, all such agreements, documents,
instruments and certificates, in the name of and on behalf of the Company or
otherwise, as they, or any of them, may deem necessary, advisable or
appropriate to implement the terms of the Plan and Trust or otherwise to
effectuate or carry out the purposes and intent of the foregoing resolutions;
and
FURTHER RESOLVED, that any and all actions heretofore or hereafter
taken by any officer or officers of the Company within the terms of the
foregoing resolutions be and are hereby ratified and confirmed as the
authorized acts and deeds of the Company; and
FURTHER RESOLVED, that the following investments shall be offered as
"Investment Funds" under and within the meaning of the Plan:
- the Company's Common Shares, $1.00 par value
- Vanguard Explorer Fund
- Vanguard International Growth Portfolio
- Vanguard U.S. Growth Portfolio
- Vanguard Index Trust--500 Portfolio
- Vanguard STAR Fund
- Vanguard Total Bond Market Portfolio
- Vanguard Investment Contract Trust
- Vanguard Money Market Reserves - Prime Portfolio
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EXHIBIT 28
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Schedule P to 1993 Annual Statements of the Registrant's Subsidiaries,
as Furnished to State Insurance Regulatory Authorities
(incorporated by reference to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1993,
as filed with the Securities and Exchange Commission
on March 29, 1994; see Exhibit 28 therein)
