<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 15, 1996
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE PROGRESSIVE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------------
<TABLE>
<S> <C>
OHIO 34-0963169
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>
6300 WILSON MILLS ROAD
MAYFIELD VILLAGE, OHIO 44143
(216) 461-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------------
DAVID M. SCHNEIDER, SECRETARY
THE PROGRESSIVE CORPORATION
6300 WILSON MILLS ROAD
MAYFIELD VILLAGE, OHIO 44143
(216) 446-7870
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
---------------------
COPIES TO:
<TABLE>
<S> <C>
R. STEVEN KESTNER KEITH L. KEARNEY
BAKER & HOSTETLER DAVIS POLK & WARDWELL
3200 NATIONAL CITY CENTER 450 LEXINGTON AVENUE
CLEVELAND, OHIO 44114 NEW YORK, NEW YORK 10017
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
---------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
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- --------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH PROPOSED MAXIMUM AGGREGATE AMOUNT OF
CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE OFFERING PRICE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT (1) (1) FEE
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Debt Securities................. $200,000,000(2) 100% $200,000,000 $68,966
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Plus such additional amount as may be necessary such that, if any Debt
Securities are issued with an original discount, the aggregate initial
offering price will equal $200,000,000.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
SUBJECT TO COMPLETION, DATED MARCH 15, 1996
PROSPECTUS
THE PROGRESSIVE CORPORATION
DEBT SECURITIES
---------------------
The Progressive Corporation (the "Company") may issue and offer from time
to time in one or more series up to $200,000,000 in aggregate initial public
offering price of its debt securities consisting of debentures, notes or other
unsecured evidences of indebtedness (the "Debt Securities"). The Debt Securities
will rank on a parity with all other current and future unsecured and
unsubordinated indebtedness of the Company and prior to subordinated
indebtedness, if any. The Debt Securities may be offered to the public on terms
determined by market conditions. The Debt Securities may be sold for U.S.
dollars or foreign denominated currency or currency units, and principal of and
any interest on the Debt Securities may likewise be payable in U.S. dollars or
foreign denominated currency or currency units. The currency or currency units
for which the Debt Securities may be purchased and the currency or currency
units in which principal of and interest on the Debt Securities will be payable
will be specifically designated in one or more supplements to this Prospectus
(each a "Prospectus Supplement").
The specific designation, aggregate principal amount, authorized
denominations, purchase price, maturity, any premium, any interest rate (which
may be fixed or variable) or manner of calculation thereof, any interest payment
dates, any optional or mandatory redemption terms, any sinking fund provisions,
listing on a securities exchange, and any other specific terms relating to any
series of Debt Securities, and the name of each dealer, underwriter or agent, if
any, involved in the sale of any series of Debt Securities and any compensation
to any such dealer, underwriter or agent, will be set forth in a Prospectus
Supplement.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR THE NORTH CAROLINA
INSURANCE COMMISSIONER NOR HAS THE SECURITIES AND EXCHANGE COMMISSION,
ANY STATE SECURITIES COMMISSION OR SUCH COMMISSIONER PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Debt Securities may be sold directly to purchasers or to dealers or
underwriters or through agents to be designated from time to time, subject to
the approval of certain legal matters by counsel for such purchasers, dealers,
underwriters or agents. Net proceeds to the Company will be the purchase price
in the case of a purchaser or dealer, the public offering price less
underwriting discount in the case of an underwriter or the purchase price less
commission in the case of an agent less, in each case, other attributable
issuance and distribution expenses. See "Plan of Distribution" for possible
indemnification arrangements for dealers, underwriters and agents.
The date of this Prospectus is , 1996
<PAGE> 3
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING MADE HEREBY, AND IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION MAY NOT BE LEGALLY MADE. THE DELIVERY OF THIS PROSPECTUS
AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street N.W., Room 1024, Washington, D.C. 20549, and at the following regional
offices of the Commission: 7 World Trade Center, Suite 1300, New York, New York
10048, and The Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can be obtained at prescribed rates
from the Public Reference Section of the Commission, 450 Fifth Street N.W.,
Washington, D.C. 20549. Reports, proxy statements and other information
concerning the Company may also be inspected at the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the information contained in
the Registration Statement, and reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Company and the securities offered hereby. Statements contained herein
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference. These
documents may be inspected without charge at the office of the Commission at
Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549, and copies may
be obtained at fees and charges prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995, filed with the Commission on March 15, 1996; and
(2) All other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the Company's fiscal year
referred to in (1) above.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of this offering are hereby incorporated by
reference into this Prospectus and shall be deemed a part hereof from the
respective dates of filing of such reports and documents. Any statement
contained in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference in this Prospectus modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
2
<PAGE> 4
The Company will furnish without charge to each person to whom a Prospectus
is delivered, upon written or oral request, a copy of any or all of the
foregoing documents incorporated herein by reference (other than certain
exhibits). Requests for such documents should be directed to Jeffrey W. Basch,
Chief Accounting Officer, The Progressive Corporation, at 6300 Wilson Mills
Road, Mayfield Village, Ohio 44143 or by telephone at (216) 446-2851.
3
<PAGE> 5
THE COMPANY
The Company is an insurance holding company which has 64 operating
subsidiaries and one mutual insurance company affiliate. Progressive Casualty
Insurance Company is the principal operating subsidiary. The insurance company
subsidiaries and affiliate provide personal automobile insurance and other
specialty property/casualty insurance and related services throughout the United
States and in Canada. Of the approximately 250 United States insurance company
groups writing private passenger auto insurance, the Progressive insurance group
ranked 7th in size based on 1994 direct premiums written, as reported by A.M.
Best Company Inc. in their 1994 A(2) report for all private passenger auto
writers.
The Company's core business, which accounted for 97% of the Company's total
net premiums written in 1995, writes insurance for private passenger
automobiles, recreational vehicles and small fleets of commercial vehicles. The
substantial portion of this business is written under nonstandard automobile
programs, which provide insurance for private passenger automobile risks that
have been rejected or cancelled by other insurers. The Progressive insurance
group is a major participant in the nonstandard automobile segment of the
property/casualty insurance industry. The Company also writes standard and
preferred auto risks, which represented between 5% and 10% of total core
business volume in 1995.
The Company's diversified businesses, which accounted for 3% of total net
premiums written in 1995, offer collateral protection coverage for automobile
lenders and loan tracking for financial institutions, directors and officers
liability and fidelity coverage for American Bankers Association member
community banks, and underwriting and claim servicing for state involuntary
residual market commercial and personal auto programs and other commercial
enterprises.
Prospective purchasers of Debt Securities should be aware that ownership of
Debt Securities may involve certain risks. For example, the Company encounters
vigorous competition in the automobile insurance and other property/casualty
markets in which it operates. See the "Competitive Factors" discussion contained
in Item 1 of the Company's 1995 Annual Report on Form 10-K. In addition, the
Company's business is subject to extensive state regulation. See the "Insurance
Regulation" discussion contained in Item 1 of the Company's 1995 Annual Report
on Form 10-K.
The Company's principal executive office is located at 6300 Wilson Mills
Road, Mayfield Village, Ohio 44143, and its telephone number is (216) 461-5000.
USE OF PROCEEDS
Except as otherwise provided in an applicable Prospectus Supplement, the
net proceeds will be used by the Company for general corporate purposes. Unless
and until otherwise applied, the net proceeds will be added to the investment
portfolios of the Company or its subsidiaries and may be used, in whole or in
part, to support premium growth. Such proceeds will be invested in securities of
approximately the same quality and maturities as those currently held in such
investment portfolios. A discussion of the nature of such securities, and the
risks relating thereto, is set forth in the "Investments" section of
Management's Discussion and Analysis of Financial Condition and Results of
Operations contained in the Company's 1995 Annual Report on Form 10-K.
4
<PAGE> 6
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial information concerning the
Company and its subsidiaries for the five years ended December 31, 1995, should
be read in conjunction with the more detailed information and financial
statements incorporated by reference herein and available as described under
"Available Information" and "Incorporation of Certain Documents by Reference."
All per share amounts have been adjusted to reflect the 3-for-1 stock split of
the Common Shares effected on December 8, 1992.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Direct premiums written:
Personal lines........................... $2,644.6 $2,181.7 $1,548.9 $1,214.6 $1,047.4
Commercial lines......................... 424.3 463.4 417.5 422.2 489.4
-------- -------- -------- -------- --------
Total direct premium written............... $3,068.9 $2,645.1 $1,966.4 $1,636.8 $1,536.8
======== ======== ======== ======== ========
Net premiums written(1)(2)................. $2,912.8 $2,457.2 $1,819.2 $1,451.2 $1,324.6
======== ======== ======== ======== ========
Revenues:
Premiums earned(2)....................... $2,727.2 $2,191.1 $1,668.7 $1,426.1 $1,286.9
Investment income(3)..................... 199.1 158.5 134.5 139.0 144.8
Net realized gains on security
sales(4).............................. 46.7 23.8 107.9 14.5 7.4
Service revenues......................... 38.9 41.9 43.7 53.3 54.0
Proposition 103 reserve reduction(5)..... -- -- -- 106.0 --
-------- -------- -------- -------- --------
Total revenues............................. 3,011.9 2,415.3 1,954.8 1,738.9 1,493.1
-------- -------- -------- -------- --------
Expenses:
Losses and loss adjustment expenses(6)... 1,943.8 1,397.3 1,028.0 930.9 858.0
Policy acquisition costs................. 459.6 391.5 311.6 304.1 313.7
Other underwriting expenses.............. 167.2 150.8 151.3 141.5 162.1
Investment expenses...................... 8.1 8.7 10.2 17.0 22.5
Service and other expenses............... 30.2 31.9 36.9 57.6 56.1
Interest expense......................... 57.1 55.3 39.7 44.5 47.8
Non-recurring items(7)................... -- -- 4.0 64.6 --
-------- -------- -------- -------- --------
Total expenses............................. 2,666.0 2,035.5 1,581.7 1,560.2 1,460.2
-------- -------- -------- -------- --------
Income before income taxes and cumulative
effect of accounting change.............. 345.9 379.8 373.1 178.7 32.9
Provision for income taxes................. 95.4 105.5 105.8 39.1 --
-------- -------- -------- -------- --------
Income before cumulative effect of
accounting change........................ 250.5 274.3 267.3 139.6 32.9
Cumulative effect of accounting
change(8)................................ -- -- -- 14.2 --
-------- -------- -------- -------- --------
Net income................................. $ 250.5 $ 274.3 $ 267.3 $ 153.8 $ 32.9
======== ======== ======== ======== ========
</TABLE>
5
<PAGE> 7
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Per Common Share(6)(9):
Income before cumulative effect of
accounting change:
Primary............................... $3.26 $3.59 $3.59 $2.09 $.41
Fully diluted......................... 3.24 3.59 3.58 1.85 .41
Net income:
Primary............................... 3.26 3.59 3.59 2.32 .41
Fully diluted......................... 3.24 3.59 3.58 2.05 .41
Ratio of earnings to fixed charges(10)..... 6.6x 7.3x 9.2x 4.6x 1.6x
Ratio of earnings to combined fixed charges
and preferred share dividend
requirements(10)......................... 5.6x 6.1x 7.1x 3.7x 1.5x
GAAP operating ratios:
Loss and loss adjustment expense
ratio(6).............................. 71.3% 63.8% 61.6% 65.3% 66.7%
Underwriting expense ratio............... 23.0% 24.7% 27.7% 31.2% 37.0%
-------- -------- -------- -------- --------
Combined ratio(6)........................ 94.3% 88.5% 89.3% 96.5% 103.7%
======== ======== ======== ======== ========
Statutory operating ratios:
Loss and loss adjustment expense
ratio(6).............................. 71.6% 64.2% 62.6% 68.3% 65.7%
Underwriting expense ratio............... 21.4% 22.4% 25.4% 29.8% 33.5%
-------- -------- -------- -------- --------
Combined ratio(6)(11).................... 93.0% 86.6% 88.0% 98.1% 99.2%
======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Total assets(12)......................... $5,352.5 $4,675.1 $4,011.3 $3,440.9 $3,317.2
Funded debt.............................. 675.9 675.6 477.1 568.5 644.0
Shareholders' equity(6)(12).............. 1,475.8 1,151.9 997.9 629.0 465.7
</TABLE>
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(1) Total direct premiums written net of reinsurance.
(2) From 1989 until the second quarter of 1992, the Company maintained a
reserve for potential premium refunds under rollback and refund provisions
of California's Proposition 103. For the twelve months ended December 31,
1992 and 1991, net premiums written and premiums earned were reduced $10.2
million and $49.7 million, respectively. As a result, net income for the
twelve months ended December 31, 1992 and 1991, were reduced $6.7 million,
or $.09 per share, and $32.8 million, or $.43 per share, respectively.
(3) Investment income includes dividends and interest.
(4) Increase in net realized gains on security sales for the twelve months
ended December 31, 1993, is primarily due to the sale of certain equity
securities held in the Company's investment portfolio, which accounted for
$74.3 million of the total gain.
(5) On June 12, 1992, the Company reached agreement with the California
Department of Insurance to refund approximately $50 million of premiums
(including interest) on business written between November 8, 1988 and
November 7, 1989 to approximately 260,000 policyholders, thereby settling
all rollback and refund exposure since Proposition 103 was adopted in
November 1988. As a result, the Company's Proposition 103 premium refund
and rollback reserve was reduced by $106.0 million and net income was
increased $70.0 million, or $.97 per share, for the year ended December 31,
1992.
(6) In 1994, the Company eliminated its "supplemental reserve," resulting in a
one-time decrease to loss and loss adjustment expenses of $71.0 million, or
$.62 per share, and increasing the combined ratio 3.2 points and
shareholders' equity $46.2 million. See paragraph 5 of the "Results of
Operations" section
6
<PAGE> 8
in Management's Discussion and Analysis of Financial Condition and Results
of Operations, incorporated by reference from the Company's Annual Report
on Form 10-K for the year ended December 31, 1995.
(7) Non-recurring items include (a) a $4.0 million charge resulting from the
redemption of the Company's 8 3/4% Debentures due 2017 in December 1993,
(b) a $10 million payment to Alfred Lerner made in December 1992, pursuant
to an agreement under which he agreed, among other matters, to convert $75
million in principal amount of the Company's Floating Rate Convertible
Subordinated Debentures due 2008 (the "Convertible Debentures") into
9,000,000 Common Shares and to terminate his employment agreement with the
Company, and (c) a one-time charge, including an additional incentive fee
for the period ended June 30, 1992, in the amount of $54.6 million paid by
the Company to Progressive Partners Limited Partnership ("Progressive
Partners") for terminating the Company's Investment Management Agreement
with Progressive Partners. In December 1992, Mr. Lerner sold in an
underwritten public offering 5,175,000 of the Common Shares received upon
the conversion of the Convertible Debentures and since that date has sold
the balance of such Common Shares.
(8) Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards (SFAS) 109, "Accounting for Income Taxes," which
changes the method of accounting for income taxes. Under SFAS 109, the
Company is able to demonstrate that the benefit of deferred tax assets is
fully realizable. The cumulative effect of adopting SFAS 109 increased net
income $14.2 million, or $.20 per share, for the year ended December 31,
1992; the deferred tax asset writedown was taken in 1991, as required under
SFAS 96.
(9) Net income is reduced by Preferred Share dividends earned during the period
and the excess of the fair value over the carrying amount of Preferred
Shares repurchased for both the primary and fully diluted earnings per
share calculations. Primary earnings per share are computed using the
weighted average number of Common Shares and equivalents, including stock
options, outstanding during the period. Prior to December 16, 1992 (the
date of conversion of the Convertible Debentures), fully diluted earnings
per share assumed the conversion of the Convertible Debentures and the
effects of related interest expense and income taxes. See Note 7 above.
(10) Earnings consist of income before Federal income taxes and cumulative
effect of accounting change ($14.2 million in 1992) and before fixed
charges. Fixed charges consist of interest and amortization on indebtedness
and the portion of rents representative of the interest factor. Combined
fixed charges and preferred share dividend requirements consist of fixed
charges and pretax earnings required to pay preferred share dividends.
(11) Industry combined ratios for the personal auto insurance market, presented
on a statutory basis and obtained from A.M. Best Company Inc.'s "Best's
Review -- P/C Insurance Edition" dated January 1996, are set forth below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995(EST.) 1994 1993 1992 1991
----------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
102.3% 101.3% 101.7% 102.0% 104.7%
</TABLE>
(12) As of December 31, 1993, the Company elected to early adopt SFAS 115,
"Accounting for Certain Investments in Debt and Equity Securities." In
November 1995, the Financial Accounting Standards Board issued a special
report entitled "A Guide to Implementation of Statement 115 on Accounting
for Certain Investments in Debt and Equity Securities." Concurrent with the
initial adoption of this implementation guidance, the Company was able to
reassess the appropriateness of the classifications of all securities held
at that time. As a result, on December 1, 1995, the Company reclassified
its entire held-to-maturity portfolio of $248.4 million to
available-for-sale, recognizing $10.4 million in gross unrealized gains.
7
<PAGE> 9
DESCRIPTION OF DEBT SECURITIES
The Company may offer under this Prospectus and one or more Prospectus
Supplements Debt Securities not exceeding $200,000,000 in aggregate initial
public offering price. The following description of the terms of the Debt
Securities sets forth certain general terms and provisions of the Debt
Securities which may be offered under a Prospectus Supplement. The particular
terms and provisions of the Debt Securities offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Debt Securities offered hereby will represent unsecured general
obligations of the Company and will rank on a parity with all other existing and
future unsecured and unsubordinated indebtedness of the Company and prior to
subordinated indebtedness, if any. The Debt Securities are to be issued under an
Indenture dated as of September 15, 1993 (which, as heretofore supplemented and
amended, is referred to herein as the "Indenture") between the Company and State
Street Bank and Trust Company, as Trustee (the "Trustee"). Debt Securities may
be issued in one or more series under the Indenture. The Indenture does not
limit the amount of Debt Securities or any other debt which may be incurred by
the Company. In addition, the provisions of the Indenture do not afford holders
of the Debt Securities protection in the event of a highly leveraged
transaction, reorganization, restructuring, merger or similar transaction
involving the Company that may adversely affect holders of the Debt Securities.
The following summaries of certain provisions of the Indenture do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the Indenture, which is an exhibit to the Registration
Statement of which this Prospectus is a part. Certain capitalized terms used
herein are defined in the Indenture. References are to sections or articles of
the Indenture.
GENERAL
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder and provides that Debt Securities may be issued in series
thereunder up to the aggregate principal amount which may be authorized from
time to time by the Company. The Debt Securities may be denominated and payable
in U.S. dollars, foreign currencies or units based on or relating to U.S. or
foreign currencies. Debt Securities may be offered to the public on terms
determined by market conditions at the time of sale.
Reference is made to the appropriate Prospectus Supplement for the
following terms of each series of Debt Securities in respect of which this
Prospectus is being delivered: (1) the designation, aggregate principal amount
and authorized denominations of such Debt Securities; (2) the purchase price of
such Debt Securities (expressed as a percentage of the principal amount
thereof); (3) the date on which such Debt Securities will mature; (4) the rate
or rates (which may be fixed or variable) per annum at which such Debt
Securities will bear interest, if any, or the method by which such rate or rates
will be determined; (5) the coin or currency or units based on or relating to
currencies in which Debt Securities may be purchased and in which payment of
principal and interest will be made; (6) the periods for which and the dates on
which such interest, if any, will be payable; (7) the place or places where the
principal of and interest, if any, on such Debt Securities will be payable; (8)
the terms of any mandatory or optional redemption (including any sinking fund);
(9) whether such Debt Securities will be issuable in registered form or bearer
form (with or without coupons) or both, and, if Debt Securities in bearer form
will be issued, restrictions applicable to the exchange of one form for another
and to the offer, sale and delivery of Debt Securities in bearer form; (10)
whether, and under what circumstances, the Company will pay additional amounts
on such Debt Securities held by a person who is not a U.S. person (as defined in
an appropriate Prospectus Supplement) in respect of any tax, assessment or
governmental charge withheld or deducted, and if so, whether the Company will
have the option to redeem such Debt Securities rather than pay such additional
amounts; and (11) any other specific terms of such series. If a Prospectus
Supplement specifies that Debt Securities are denominated in a currency other
than U.S. dollars or U.S. currency units, such Prospectus Supplement shall also
specify the denomination in which such Debt Securities will be issued and the
coin or currency or currency unit in which the principal of and premium, if any,
and interest on such Debt Securities will be payable, which may be U.S. dollars
based upon the exchange rate for such other currency or currency unit existing
on or about the time a payment is due.
8
<PAGE> 10
Debt Securities may be presented for exchange and registered Debt
Securities may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the Indenture. Such services will be
provided without charge, other than any tax or other governmental charge payable
in connection therewith, but subject to the limitations provided in the
Indenture. Debt Securities in bearer form and the coupons, if any, pertaining
thereto will be transferable by delivery.
The Debt Securities will be unsecured. The Debt Securities will rank on a
parity with all other existing and future unsecured and unsubordinated
indebtedness of the Company and prior to subordinated indebtedness, if any.
Because the Company is a holding company, however, its rights and the rights of
its creditors to participate in the assets of any subsidiary upon the latter's
liquidation or recapitalization (and thus the ability of holders of the Debt
Securities to benefit as creditors of the Company in such liquidation or
recapitalization) will be subject to the prior claims of the subsidiary's
creditors, except to the extent that the Company may itself be a creditor with
recognized claims (other than as a holder of the subsidiary's outstanding shares
of capital stock) against the subsidiary.
In addition, insurance statutes in many states limit the extent to which
regulated insurance companies may pay dividends and transfer assets to their
affiliates and either prohibit or require prior approval for the payment of
dividends and other distributions in excess of such limits. Since a source of
the Company's internally generated cash flow is dividends paid to it by its
subsidiaries, the Company's ability to meet its obligations (including the
obligation to pay principal of and premium, if any, and interest on the Debt
Securities) may be affected by any such limitations or prior approval
requirements.
GLOBAL SECURITIES
The Debt Securities may be issued in the form of one or more global
securities (a "Global Security") that will be deposited with a depositary (a
"Depositary") or with a nominee for a Depositary identified in an appropriate
Prospectus Supplement and registered in the name of the Depositary or a nominee
thereof. In such case, one or more Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding Debt Securities to be represented by such Global
Security or Securities. Unless and until it is exchanged in whole or in part for
Debt Securities in definitive registered form, a Global Security may not be
transferred, except as a whole by the Depositary for such Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor of such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any Debt
Securities to be represented by a Global Security will be described in a
Prospectus Supplement relating thereto.
EVENTS OF DEFAULT, WAIVER AND NOTICE
As to any series of Debt Securities, an Event of Default is defined in the
Indenture as (a) default for 30 days in payment of any interest on the Debt
Securities of such series; (b) default in payment of principal of or premium, if
any, on the Debt Securities of such series when due either at maturity, upon
redemption, by declaration or otherwise; (c) default in the payment of a sinking
fund installment, if any, on the Debt Securities of such series; (d) default by
the Company in the performance of any other covenant or warranty contained in
the Indenture for the benefit of such series which shall not have been remedied
for a period of 60 days after notice given as specified in the Indenture; and
(e) certain events of bankruptcy, insolvency and reorganization of the Company.
(Section 5.1 of the Indenture.) An Event of Default with respect to a particular
series of Debt Securities issued under the Indenture does not necessarily
constitute an Event of Default with respect to any other series of Debt
Securities issued thereunder. The Indenture provides that the Trustee may
withhold notice to the holders of Debt Securities of any series of any default
(except in payment of principal of, or premium, if any, or interest on such Debt
Securities) if the Trustee considers it in the interest of the holders of Debt
Securities of such series to do so; provided, however, that in the case of a
default of the character specified in clause (d) above, no such notice to
holders of Debt Securities of such series shall be given until at least 30 days
after the occurrence thereof. (Section 5.11 of the Indenture.)
9
<PAGE> 11
The Indenture provides that (1) if an Event of Default described in clause
(a), (b), (c) or (d) above with respect to a particular series of Debt
Securities shall have occurred and be continuing, either the Trustee or the
holders of at least 25% in principal amount of the Debt Securities of such
series then outstanding may declare the entire principal (or, in the case of
original issue discount Debt Securities, the portion thereof specified in the
terms thereof) of all outstanding Debt Securities of such series and the
interest accrued thereon, if any, to be due and payable immediately and (2) if
an Event of Default described in clause (e) above shall have occurred and be
continuing, either the Trustee or the holders of at least 25% in principal
amount of all Debt Securities then outstanding thereunder (voting as one class)
may declare the entire principal (or, in the case of original issue discount
Debt Securities, the portion thereof specified in the terms thereof) of all Debt
Securities then outstanding thereunder and the interest accrued thereon, if any,
to be due and payable immediately, but upon certain conditions such declarations
may be annulled and past defaults (except for defaults in the payment of
principal of or premium, if any, or interest on such Debt Securities) may be
waived by the holders of a majority in principal amount of the Debt Securities
of such series (or of all series thereunder, as the case may be) then
outstanding. (Sections 5.1 and 5.10 of the Indenture.)
The Indenture provides that holders of a majority in principal amount of
the outstanding Debt Securities of each series affected (with each series voting
as a separate class) shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee under the
Indenture with respect to Debt Securities of such series, subject to certain
limitations specified in the Indenture, provided that the holders of Debt
Securities shall have offered to the Trustee reasonable security or indemnity
against expenses and liabilities. (Sections 5.9 and 6.2(d) of the Indenture.)
The Indenture requires the annual delivery by the Company to the Trustee of a
written statement as to the absence of certain defaults under the Indenture.
(Section 3.5 of the Indenture.) Whenever the Indenture provides for an action
by, or the determination of any of the rights of, or any distribution to,
holders of Debt Securities denominated in U.S. dollars and in any other currency
or currency unit, in the absence of any provision to the contrary in the form of
Debt Security of any particular series, any amount in respect of any Debt
Security denominated in a currency or currency unit other than U.S. dollars
shall be treated for any such action or distribution as the amount of U.S.
dollars that could be obtained for such amount on such reasonable basis of
exchange and as of such date as the Company reasonably specifies to the Trustee
or in the absence of such specification, as the Trustee may determine. (Section
11.11 of the Indenture.) Under the terms of the Indenture, the holders of a
majority in aggregate principal amount of all series of the Debt Securities to
be affected thereby at the time outstanding may waive compliance with certain
covenants contained in the Indenture. (Section 5.10 of the Indenture.)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 66 2/3% in aggregate principal
amount of the Debt Securities of all series affected by such modification at the
time outstanding (voting as one class), to modify the Indenture or any
supplemental indenture or the rights of the holders of such Debt Securities;
provided that no such modification shall (i) extend the final maturity of any
Debt Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, or change the currency or
currency unit of payment thereof, or change the method by which amounts of
payments of principal or interest thereon are determined, or reduce the portion
of the principal amount of an original issue discount Debt Security due and
payable upon acceleration of the maturity thereof or the portion of the
principal amount thereof provable in bankruptcy, or reduce any amount payable
upon redemption of any Debt Security, or impair or affect the right of a holder
to institute suit for the payment thereof or, if the Debt Securities provide
therefor, any right of repayment at the option of the holder of a Debt Security,
without the consent of the holders of each Debt Security so affected or (ii)
reduce the aforesaid percentage of Debt Securities of any series, the consent of
the holders of which is required for any such modification, without the consent
of the holder of each Debt Security so affected. (Section 8.2 of the Indenture.)
The Indenture also provides that the Company and the Trustee may from time to
time execute supplemental indentures. (Section 8.1 of the Indenture.)
10
<PAGE> 12
CONSOLIDATIONS, MERGERS, AND SALES OF ASSETS
The Company may not merge or consolidate with any other corporation or sell
or convey all or substantially all of its assets to any Person, unless either
the Company shall be the continuing corporation or the successor corporation
shall be a corporation organized under the laws of the United States or any
state thereof and shall expressly assume the payment of the principal of and
interest on the Debt Securities and the performance and observance of all the
covenants and conditions of the Indenture binding upon the Company, and,
immediately after such merger or consolidation, or such sale or conveyance, the
Company or such successor corporation shall not be in default in the performance
of any such covenant or condition. (Article Nine of the Indenture.) No
quantitative or other established meaning has been given to the phrase "all or
substantially all" by courts which have interpreted this phrase in various
contexts. In interpreting this phrase, courts make a subjective determination as
to the portion of assets sold or conveyed, considering such factors as the value
of the assets sold or conveyed and the proportion of an entity's income derived
from the assets sold or conveyed. Accordingly, there may be uncertainty as to
whether holders of the Debt Securities can determine whether the Company has
sold or conveyed all or substantially all of its assets and exercise any
remedies such holders may have upon the occurrence of any such transaction.
DEFEASANCE
The Indenture provides that, unless the terms of any series of Debt
Securities provide otherwise, the Company will be discharged from obligations in
respect of the outstanding Debt Securities of any series and the provisions of
the Indenture with respect thereto (excluding certain obligations, such as
obligations to register the transfer or exchange of such outstanding Debt
Securities, to replace stolen, lost or mutilated certificates or coupons, and to
hold moneys for payment in trust), upon the irrevocable deposit, in trust, of
cash or U.S. Government obligations (as defined in the Indenture) which, through
the payment of interest and principal thereof in accordance with their terms,
will provide cash in an amount sufficient to pay the principal of and premium,
if any, and interest on and mandatory sinking fund payments, if any, in respect
of outstanding Debt Securities of such series on the stated dates such payments
are due in accordance with the terms of the Indenture and such outstanding Debt
Securities, provided that the Company has received an opinion of counsel to the
effect that such a discharge will not be deemed, or result in, a taxable event
with respect to holders of such outstanding Debt Securities and that certain
other conditions are met. (Section 10.1(B) of the Indenture.)
SATISFACTION AND DISCHARGE
The Indenture will cease to be of further effect and the Trustee, on demand
of and at the expense of the Company, shall execute appropriate instruments
acknowledging the satisfaction and discharge of the Indenture upon compliance
with certain enumerated conditions, including the Company having paid all sums
payable by the Company under the Indenture, when either (a) the Company shall
have delivered to the Trustee for cancellation all Debt Securities theretofore
authenticated or (b) all Debt Securities not theretofore delivered to the
Trustee for cancellation shall have become due and payable or are by their terms
to become due and payable within one year. (Section 10.1(A) of the Indenture.)
GOVERNING LAW
The Debt Securities and the Indenture will be governed by the laws of the
State of New York. (Section 11.8 of the Indenture.)
CONCERNING THE TRUSTEE
The Company entered into the Indenture with The First National Bank of
Boston, as Trustee ("FNBB"), pursuant to which the Company may issue one or more
series of its debt securities. Effective October 2, 1995, State Street Bank and
Trust Company acquired the trust business of FNBB, and, as a result, State
Street Bank and Trust Company became and is currently the Trustee under the
Indenture. State Street Bank and Trust Company may from time to time make loans
to the Company, and various subsidiaries of the
11
<PAGE> 13
Company may participate in loan syndications or other investments offered by
State Street Bank and Trust Company from time to time, in the normal course of
business. State Street Bank and Trust Company also serves as trustee for the
Company's outstanding 10% Notes due December 15, 2000, 10 1/8% Subordinated
Notes due December 15, 2000, 8 3/4% Notes due June 1, 1999, 7% Notes due October
1, 2013 and 6.60% Notes due January 15, 2004.
12
<PAGE> 14
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby (i) through
agents, (ii) through underwriters, (iii) through dealers or (iv) directly to one
or more purchasers. The Prospectus Supplement with respect to a particular
offering of Debt Securities will set forth the terms of the offering of such
Debt Securities, including the name or names of the specific agents, dealers or
underwriters (including managing underwriters, if any), the purchase price and
the proceeds to the Company from such sales, any underwriting discounts, agency
fees or commissions and other items constituting compensation to the
underwriters, agents or dealers, initial public offering price, any discounts or
concessions to be allowed or reallowed or paid to dealers, the securities
exchange, if any, on which such Debt Securities may be listed, and the place and
time of delivery of the Debt Securities offered.
Debt Securities may be offered and sold through agents designated by the
Company from time to time. Unless otherwise indicated in the applicable
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment. Any such agent may be deemed to be an
underwriter, as that term is defined in the Securities Act, of any Debt
Securities so offered and sold. Agents may be entitled under agreements which
may be entered into with the Company to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and may be
customers of, engage in transactions with, or perform services for, the Company
in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale of any Debt
Securities, the Company will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached.
Such underwriter or underwriters will acquire Debt Securities for their own
account and may resell such Debt Securities from time to time in one or more
transactions, including negotiated transactions, at fixed public offering prices
or at varying prices determined at the time of sale. Debt Securities may be
offered to the public either through underwriting syndicates represented by
managing underwriters, or by underwriters without a syndicate. The underwriters
may be entitled, under the relevant underwriting agreement, to indemnification
by the Company against certain liabilities, including liabilities under the
Securities Act. If any underwriter or underwriters are utilized in the sale of
any Debt Securities, unless otherwise set forth in the applicable Prospectus
Supplement, the underwriting agreement will provide that the obligations of the
underwriters will be subject to certain conditions precedent and that the
underwriters with respect to a sale of such Debt Securities will be obligated to
purchase all such Debt Securities if any are purchased.
If a dealer is utilized in the sale of any Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities to
the public at varying prices to be determined by such dealer at the time of
resale. Any such dealer may be deemed to be an underwriter, as such term is
defined in the Securities Act, of the Debt Securities so offered and sold.
Dealers may be entitled, under agreements which may be entered into with the
Company, to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act. The name of any such dealer and
the terms of the transaction will be set forth in a Prospectus Supplement
relating thereto.
Offers to purchase Debt Securities may be solicited directly by the Company
and sales thereof may be made by the Company directly to institutional investors
or others, who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any sale thereof. The terms of any such sales
will be described in a Prospectus Supplement relating thereto.
If so indicated in an appropriate Prospectus Supplement, the Company may
authorize agents and underwriters to solicit offers by certain institutions to
purchase Debt Securities from the Company at the public offering price set forth
in such Prospectus Supplement pursuant to delayed delivery contracts
("Contracts") providing for payment and delivery on the date stated in such
Prospectus Supplement. Each Contract will be for an amount not less than and,
unless the Company otherwise agrees, the aggregate principal amount of Debt
Securities sold pursuant to Contracts shall be not less nor more than the
respective amounts stated in such Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but shall in all cases be
subject to the approval of
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<PAGE> 15
the Company in its sole discretion. The obligations of a purchaser under any
Contract will not be subject to any conditions except that any related sale of
Debt Securities to underwriters shall have occurred and the purchase by an
institution of the Debt Securities covered by its Contract shall not at the time
of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject. A commission indicated in such
Prospectus Supplement will be paid to underwriters and agents soliciting
purchases of Debt Securities pursuant to Contracts accepted by the Company. The
underwriters or agents will not have any responsibility in respect of the
validity or performance of Contracts.
The place and time of delivery of the Debt Securities in respect of which
this Prospectus is delivered will be set forth in an accompanying Prospectus
Supplement.
LEGAL MATTERS
Unless otherwise indicated in a Prospectus Supplement relating to the Debt
Securities, certain legal matters in connection with the Debt Securities will be
passed upon for the Company by Baker & Hostetler, Cleveland, Ohio. Certain legal
matters in connection with the Debt Securities offered hereby will be passed
upon for any purchasers, dealers, underwriters or agents by Davis Polk &
Wardwell, New York, New York. Davis Polk & Wardwell may rely as to all matters
of Ohio law on the opinion of Baker & Hostetler, and Baker & Hostetler may rely
as to all matters of New York law on the opinion of Davis Polk & Wardwell. Davis
Polk & Wardwell may represent the Company from time to time in connection with
certain legal matters.
EXPERTS
The consolidated financial statements and financial statement schedules of
The Progressive Corporation and subsidiaries as of December 31, 1995, and for
each of the years in the three-year period then ended, all incorporated by
reference in the Registration Statement of which this Prospectus forms a part,
have been incorporated herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as experts
in accounting and auditing.
14
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Except for the Registration Fee, all fees and expenses are estimated:
<TABLE>
<S> <C>
Registration Fee -- Securities and Exchange Commission.................... $ 68,966
Trustee's Fees and Expenses............................................... 10,000
Accounting Fees and Expenses.............................................. 25,000
Legal Fees and Expenses................................................... 50,000
Blue Sky Fees and Expenses (including related fees and expenses of
counsel)................................................................ 20,000
Printing Expenses......................................................... 20,000
Rating Agency Fees........................................................ 125,000
Miscellaneous Expenses.................................................... 6,034
--------
Total........................................................... $325,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VI of the Code of Regulations of the Company 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 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 entitled to indemnification if he is
successful on the merits or otherwise in the defense of any such action, suit or
proceeding or if a determination is made pursuant to Article VI of the Code of
Regulations (i) by the directors of the Company 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 Company 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 Company 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 Company, (b) acted in good faith and in a manner
he reasonably believed to be in the best interest of the Company 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, whether threatened or actual, may be paid
by the Company as they are incurred in advance of the final disposition of such
action, suit or proceeding, as authorized by the Board of Directors in the
specific case, 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 Company.
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 (which prohibition is not contained in the
Company's Articles of Incorporation or Code of Regulations) a corporation shall
pay a director's expenses, including attorneys' fees, as such expenses are
incurred, in defending an action, suit or proceeding brought against a director
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.
II-1
<PAGE> 17
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 Company maintains directors and officers liability insurance in the
amount of $20,000,000 under a policy issued by a wholly owned subsidiary of the
Company. The risks covered by such policy include certain liabilities under the
securities laws.
See the proposed form of Underwriting Agreement, filed as Exhibit 1, for
certain provisions relating to indemnification of the Company and its directors
and officers.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -------------------------------------------------------------------------------
<C> <S> <C>
1 -- Proposed Form of Underwriting Agreement
4.1 -- Indenture between the Registrant and The First National Bank of Boston,
Trustee, dated as of September 15, 1993 (the "Indenture"), is incorporated by
reference to Exhibit 4(A) of the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1993 (filed with the Commission on November 5,
1993)
4.2 -- Supplemental Indenture dated March 15, 1996 between the Registrant and State
Street Bank and Trust Company, evidencing the designation of State Street Bank
and Trust Company as successor trustee under the Indenture
4.3 -- Proposed Form of Debt Security
5 -- Opinion of Baker & Hostetler
12.1 -- Computation of Ratio of Earnings to Fixed Charges
12.2 -- Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Share
Dividend Requirements
23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2 -- Consent of Baker & Hostetler (included in Exhibit 5)
24.1 -- Powers of Attorney
24.2 -- Certified resolution of the Company's Board of Directors authorizing the
signing on behalf of the Company pursuant to a power of attorney
25 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture
Act of 1939 of State Street Bank and Trust Company
28 -- Schedule P as filed with state regulatory authorities is incorporated by
reference to Exhibit 28 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1995 (filed with the Commission on March 15, 1996)
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, 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 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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
II-2
<PAGE> 18
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(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; and
(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.
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 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.
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 of the Registrant 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 of 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.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
II-3
<PAGE> 19
SIGNATURES
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-3 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 March 15, 1996.
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 by the following persons in the
capacities indicated on March 15, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------ -------------------------------------------------
<C> <S>
* Chairman, President and Director (Principal
- ------------------------------------------ Executive Officer)
Peter B. Lewis
/s/ CHARLES B. CHOKEL Treasurer (Principal Financial Officer)
- ------------------------------------------
Charles B. Chokel
/s/ JEFFREY W. BASCH Principal Accounting Officer
- ------------------------------------------
Jeffrey W. Basch
* Director
- ------------------------------------------
Milton N. Allen
* Director
- ------------------------------------------
B. Charles Ames
* Director
- ------------------------------------------
Stephen R. Hardis
* Director
- ------------------------------------------
Janet Hill
* Director
- ------------------------------------------
Norman S. Matthews
* Director
- ------------------------------------------
Donald B. Shackelford
* Director
- ------------------------------------------
Paul B. Sigler
</TABLE>
* David M. Schneider, by signing his name hereto, does sign this Registration
Statement on behalf of the persons indicated above pursuant to powers of
attorney duly executed by such persons filed as an Exhibit to the Registration
Statement.
By: /s/ DAVID M. SCHNEIDER
--------------------------------------------------------
David M. Schneider, Attorney-in-Fact
II-4
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------------------------------------------------------------------------------
<S> <C> <C>
1 -- Proposed Form of Underwriting Agreement
4.1 -- Indenture between the Registrant and The First National Bank of Boston, Trustee,
dated as of September 15, 1993 (the "Indenture"), is incorporated by reference to
Exhibit 4(A) of the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993 (filed with the Commission on November 5, 1993)
4.2 -- Supplemental Indenture dated March 15, 1996 between the Registrant and State Street
Bank and Trust Company, evidencing the designation of State Street Bank and Trust
Company as successor Trustee under the Indenture
4.3 -- Proposed Form of Debt Security
5 -- Opinion of Baker & Hostetler
12.1 -- Computation of Ratio of Earnings to Fixed Charges
12.2 -- Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Share
Dividend Requirements
23.1 -- Consent of Coopers & Lybrand L.L.P.
23.2 -- Consent of Baker & Hostetler (included in Exhibit 5)
24.1 -- Powers of Attorney
24.2 -- Certified resolution of the Company's Board of Directors authorizing the signing on
behalf of the Company pursuant to a power of attorney
25 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of State Street Bank and Trust Company
28 -- Schedule P as filed with state regulatory authorities is incorporated by reference
to Exhibit 28 of the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 (filed with the Commission on March 15, 1996)
</TABLE>
<PAGE> 1
Exhibit 1
UNDERWRITING AGREEMENT
___________ __, 199_
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
Ladies and Gentlemen:
___________________ as underwriter (hereinafter referred to as the
"Manager" or the "Underwriter") understands that The Progressive Corporation,
an Ohio corporation (the "Company"), proposes to issue and sell $___________
aggregate principal amount of its [Interest Rate]% [Type of Debt Security] due
[Maturity Date] (the "Offered Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell and the Underwriter agrees to
purchase a total of $___________ principal amount of the Offered Securities at
a purchase price equal to ______% of the principal amount of the Offered
Securities plus accrued interest on the Offered Securities from __________ __,
____ to the date of payment and delivery. The Offered Securities will be
offered to the public at ______% of the principal amount, the underwriting
discount will be ____%, the selling concession to dealers will be ___% and the
reallowance concession will be ___%. In addition, the Underwriter has agreed
to reimburse the Company for out-of-pocket expenses incurred directly in
connection with this offering in the amount of $_________.
The Underwriter will pay for such Offered Securities upon delivery thereof
at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New
York 10017 at 10:00 A.M. (New York time) on _______ __, ____, or at such other
time, not later than _______ __, ____, as shall be designated by the
Underwriter with the consent of the Company, which consent shall not
unreasonably be withheld. Payment for the Offered Securities shall be made in
U.S. dollars in immediately available funds.
The Offered Securities shall have the following terms:
<PAGE> 2
Maturity: _______ __, ____
Interest Rate: _____
Interest Payment Date: __________ and __________
Redemption Provisions,
if any:
Trustee: State Street Bank and
Trust Company
Except as otherwise set forth herein, all the provisions contained in the
document entitled "The Progressive Corporation Underwriting Agreement Standard
Provisions (Debt)" dated March 1996, a copy of which you have previously
received, are herein incorporated by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein.
Please confirm your agreement by having an authorized officer sign a copy of
this Agreement in the space set forth below and returning the signed copy to us
and, in addition, have an authorized officer send us no later than 11:00 A.M.
[business day following date] by wire, telex or other written means, the
following message:
"We have entered into the Underwriting Agreement dated _______, ____
relating to the Offered Securities referred to therein by signing a copy of the
Underwriting Agreement and returning the same or depositing the same in the
mail to you."
Very truly yours,
[Name of Manager]
By__________________________
Title:
Accepted:
THE PROGRESSIVE CORPORATION
By_________________________
Title:
<PAGE> 3
THE PROGRESSIVE CORPORATION
UNDERWRITING AGREEMENT
STANDARD PROVISIONS (DEBT)
March 1996
<PAGE> 4
From time to time, The Progressive Corporation, an Ohio corporation (the
"Company"), may enter into one or more underwriting agreements that provide for
the sale of designated securities to the several underwriters named therein.
The standard provisions set forth herein may be incorporated by reference in
any such underwriting agreement (an "Underwriting Agreement"). The
Underwriting Agreement, including the provisions incorporated therein by
reference, is sometimes herein referred to as "this Agreement." Unless
otherwise defined herein, terms defined in the Underwriting Agreement are used
herein as therein defined.
I.
The Company proposes to issue from time to time debt securities to
be issued pursuant to the provisions of one or more Indentures, including any
amendments or supplements thereto (individually, an "Indenture") between the
Company and a trustee named therein. Such debt securities will have varying
designations, maturities, rates and times of payment of interest, selling
prices, redemption terms and other terms. Any such debt securities are herein
sometimes referred to as the "Securities."
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement including one or more prospectuses
relating to the Securities and has filed with, or mailed for filing to, the
Commission, pursuant to Rule 424 under the Securities Act of 1933, as amended,
a prospectus supplement or supplements specifically relating to the Securities
to be sold ("Offered Securities"). The term "Registration Statement" means the
registration statement as amended to the date of the Underwriting Agreement.
The term "Basic Prospectus" means the prospectus included in the Registration
Statement. The term "Prospectus" means the Basic Prospectus, together with the
prospectus supplement (other than a preliminary prospectus supplement)
specifically relating to the Offered Securities as filed with, or mailed for
filing to, the Commission pursuant to Rule 424. The term "preliminary
prospectus" means a preliminary prospectus supplement specifically relating to
the Offered Securities, together with the Basic Prospectus. As used herein,
the terms "Registration Statement," "Basic Prospectus," "Prospectus" and
"preliminary prospectus" shall include in each case the material, if any,
incorporated by reference therein.
The term "Underwriters' Securities" means the Offered Securities
to be purchased by the Underwriters herein. The term "Contract Securities"
means the Offered
<PAGE> 5
Securities, if any, to be purchased pursuant to the delayed delivery contracts
referred to below.
II.
If the Prospectus provides for sales of Offered Securities
pursuant to delayed delivery contracts, the Company hereby authorizes the
Underwriters to solicit offers to purchase Contract Securities on the terms and
subject to the conditions set forth in the Prospectus pursuant to delayed
delivery contracts substantially in the form of Schedule I attached hereto
("Delayed Delivery Contracts") but with such changes therein as the Company may
authorize or approve. Delayed Delivery Contracts are to be with institutional
investors approved by the Company and of the types set forth in the Prospectus.
On the Closing Date (as hereinafter defined), the Company will pay the Manager
as compensation, for the accounts of the Underwriters, the fee set forth in the
Underwriting Agreement in respect of the Contract Securities. The Underwriters
will not have any responsibility in respect of the validity or the performance
of Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts
with institutional investors, the Offered Securities comprising the Contract
Securities shall be deducted from the Offered Securities comprising the
Underwriters' Securities to be purchased by the several Underwriters and the
aggregate principal amount of Offered Securities to be purchased by each
Underwriter shall be reduced pro rata in the same proportion as the principal
amount of Offered Securities set forth opposite such Underwriter's name in the
Underwriting Agreement bears to the total principal amount of all Offered
Securities in the Underwriting agreement, except to the extent that the Manager
determines that such reduction shall be otherwise and so advises the Company.
III.
The Company is advised by the Manager that the Underwriters
propose to make a public offering of their respective portions of the
Underwriters' Securities as soon after this Agreement is entered into as in the
Manager's judgment is advisable. The terms of the public offering of the
Underwriters' Securities are set forth in the Prospectus.
3
<PAGE> 6
IV.
Payment for the Underwriters' Securities shall be made by payment
in full of the requisite amount of funds determined in the Underwriting
Agreement and in accordance with the procedures set forth in the Underwriting
Agreement, upon delivery to the Manager for the respective accounts of the
several Underwriters of the Underwriters' Securities registered in such names
and in such denominations as the Manager shall request in writing not less than
two full business days prior to the date of delivery. The time and date of
such payment and delivery with respect to the Underwriters' Securities are
herein referred to as the "Closing Date."
V.
The several obligations of the Underwriters hereunder are subject
to the following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission and there shall have been no
material adverse change (not in the ordinary course of business) in the
condition of the Company and its subsidiaries, taken as a whole, from that set
forth in the Registration Statement and the Prospectus; and the Manager shall
have received, on the Closing Date, a certificate, dated the Closing Date and
signed by an executive officer of the Company, to the foregoing effect. The
officer making such certificate may rely upon the best of his knowledge as to
the proceedings pending or threatened.
(b) The Manager shall have received on the Closing Date an opinion of
Baker & Hostetler, counsel for the Company, dated the Closing Date, as to the
matters set forth in Schedule II attached hereto. In giving their opinion
required by this Section V(b), Baker & Hostetler may rely as to all matters of
New York law on the opinion of counsel for the Underwriters.
(c) The Manager shall have received on the Closing Date an opinion of
Davis Polk & Wardwell, counsel for the Underwriters, dated the Closing Date, in
form and substance satisfactory to the Manager.
(d) The Manager shall have received on the date of the Underwriting
Agreement a letter dated such date, and also on the Closing Date a letter dated
the Closing Date, in form and substance satisfactory to the Manager, from
Coopers &
4
<PAGE> 7
Lybrand L.L.P., independent public accounts, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
to underwriters with respect to the financial statements and certain financial
information contained or incorporated by reference in the Registration
Statement and the Prospectus.
VI.
In further consideration of the agreements of the Underwriters
contained in this Agreement, the Company covenants as follows:
(a) To furnish the Manager, without charge, a copy of the
Registration Statement including exhibits and materials, if any,
incorporated by reference therein and, during the period mentioned in
paragraph (c) below, as many copies of the Prospectus, and documents
incorporated by reference therein and any supplements and amendments
thereto as the Manager may reasonably request. The terms "supplement" and
"amendment" or "amend" as used in this Agreement with respect to the
Registration Statement, Prospectus or preliminary prospectus shall include
all documents filed by the Company with the Commission subsequent to the
date of the Basic Prospectus, pursuant to the Securities Exchange Act of
1934, as amended, which are deemed to be incorporated by reference in the
Prospectus.
(b) Before amending or supplementing the Registration Statement
or the Prospectus with respect to the Offered Securities, to furnish the
Manager a copy of each such proposed amendment or supplement.
(c) If, during such period after the commencement of the public
offering of the Offered Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered with respect
thereto, any event shall occur as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not misleading,
or if it is necessary to amend or supplement the Prospectus to comply with
law, forthwith at its own expense, to amend or to supplement the Prospectus
and to furnish such amendment or supplement to the Underwriters, so as to
correct such statement or omission or effect such compliance.
5
<PAGE> 8
(d) To qualify the Offered Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Manager shall
reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection with such qualification and in
connection with the determination of the eligibility of the Offered
Securities for investment under the laws of such jurisdictions as the
Manager may reasonably designate; provided that the Company shall not be
required to qualify to do business in any jurisdiction where it is not now
qualified or to take any action which would subject it to general or
unlimited service of process in any jurisdiction where it is not now so
subject.
(e) To make generally available to the Company's security holders
as soon as practicable an earnings statement covering a 12-month period
beginning after the date of the Underwriting Agreement, which shall satisfy
the provisions of Section 11(a) of the Securities Act of 1933, as amended,
and Rule 158 and other applicable rules and regulations of the Commission
thereunder.
VII.
The Company represents and warrants to each Underwriter that (i)
each document filed or to be filed pursuant to the Securities Exchange Act of
1934, as amended, and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with such Act and the
applicable rules and regulations thereunder, (ii) each part of the Registration
Statement (including the documents incorporated by reference therein), filed
with the Commission pursuant to the Securities Act of 1933, as amended,
relating to the Securities, when such part became effective, did not contain
any untrue statement of material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances then existing, not misleading, (iii) each preliminary
prospectus, if any, filed pursuant to Rule 424 under the Securities Act of
1933, as amended, complied when so filed in all material respects with such Act
and the applicable rules and regulations thereunder, (iv) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act of
1933, as amended, and the applicable rules and regulations thereunder and (v)
the Registration Statement and the Prospectus do not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit
6
<PAGE> 9
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
except that the above representations and warranties do not apply to statements
or omissions in the Registration Statement, any preliminary prospectus or the
Prospectus based upon information furnished to the Company in writing by any
Underwriter expressly for use therein. In addition to the representations and
warranties set forth in this Article VII, the Company also makes the
representations and warranties set forth in Schedule III attached hereto.
The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls such Underwriter within the meaning of
either Section 15 of the Securities Act of 1933, as amended, or Section 20 of
the Securities Exchange Act of 1934, as amended, from and against any and all
losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus or the Prospectus (if used within the
period set forth in paragraph (c) of Article VI hereof and as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except to the extent that such losses, claims, damages
or liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to the
Company by any Underwriter expressly for use therein; provided, however, that
the foregoing indemnity with respect to preliminary prospectuses or
Prospectuses shall not inure to the benefit of any Underwriter (or to the
benefit of any person controlling such Underwriter) from whom the person
asserting any such losses, claims, damages or liabilities purchased Offered
Securities if such untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus is eliminated or remedied in the
Prospectus or the Prospectus as amended or supplemented (copies of which were
delivered to such Underwriter) and a copy of the Prospectus or the Propsectus
as amended or supplemented (excluding documents incorporated by reference) has
not been furnished to such person at or prior to the written confirmation of
the sale of such Offered Securities to such person.
Each underwriter agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and
any person controlling the
7
<PAGE> 10
Company to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to information furnished by such
Underwriter in writing expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus.
If any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one proceeding in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm for all such indemnified parties. Such firm shall be designated
in writing by the Manager in the case of parties indemnified pursuant to the
immediately preceding paragraph and by the Company in the case of parties
indemnified pursuant to the second preceding paragraph. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent of if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
If the indemnification provided for in this Article VII is
unavailable to an indemnified party under the second or third paragraphs hereof
or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party, in lieu of
8
<PAGE> 11
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other in connection
with the offering of the Offered Securities shall be deemed to be in the same
proportion as the total net proceeds from the offering of such Offered
Securities (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters in
respect thereof. The relative fault of the Company on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relevant intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Article VII were determined by
pro rata allocation or by any method of allocation which does not take account
of the considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article VII, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities underwritten and distributed to the
public by such Underwriter were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
9
<PAGE> 12
No person guilty of such fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act of 1933, as amended) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Article VII are several, in proportion to the respective principal amounts
of Offered Securities purchased by each of such Underwriter, and not joint.
The indemnity and contribution agreements contained in this
Article VII and the representations and warranties of the Company in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by any
Underwriter or on behalf of any Underwriter or any person controlling any
Underwriter or by or on behalf of the Company, its directors or officers or any
person controlling the Company, and (iii) acceptance of and payment for any of
the Offered Securities.
VIII.
This Agreement shall be subject to termination in the absolute
discretion of the Manager, by notice given to the Company, if prior to the
Closing Date (i) any change in the condition, financial or otherwise, or in the
earnings, business or operations, of the Company and its subsidiaries, taken as
a whole, from that set forth in the Prospectuses, which is material and
adverse; (ii) any downgrading in, or notice of any proposal to downgrade, the
rating of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Securities Act of 1933, as amended) or any public announcement that any
such organization has under surveillance or review the rating of the Company's
debt securities with negative implications or without indicating the direction
of possible change; (iii) any suspension or limitation of trading in securities
generally on or by the New York Stock Exchange, the American Stock Exchange or
the National Association of Securities Dealers, Inc., or any setting of minimum
prices for trading on such exchange; (iv) any suspension of trading of any
securities of the Company on any exchange; (v) any banking moratorium declared
by Federal or New York authorities; or (vi) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event set forth in
(i) through (vi), in the judgment of the Manager, makes it impractical or
inadvisable to proceed with the public
10
<PAGE> 13
offering or the delivery of the Offered Securities on the terms and in the
manner contemplated by the Prospectus.
IX.
If any one or more of the Underwriters shall fail or refuse to
purchase Offered Securities which it or they have agreed to purchase hereunder,
and the aggregate principal amount of Offered Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of the Offered
Securities, the other Underwriters shall be obligated severally in the
proportions which the aggregate principal amounts of Offered Securities set
forth opposite their names in the Underwriting Agreement bear to the aggregate
principal amount of Offered Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase; provided
that in no event shall the principal amount of Offered Securities which any
Underwriter has agreed to purchase pursuant to the Underwriting Agreement be
increased pursuant to this paragraph by an amount in excess of one-ninth of
such principal amount of Offered Securities, without the written consent of
such Underwriter. In any such case either the Manager or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may
be effected. If any Underwriter or Underwriters shall fail or refuse to
purchase Offered Securities and the aggregate principal amount of Offered
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of the Offered Securities and arrangements
satisfactory to the Manager and the Company for the purchase of such Offered
Securities are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or of
the Company. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters or any
of them because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its
11
<PAGE> 14
obligations under this Agreement, the Company will reimburse the Underwriters
or such Underwriters as have so terminated this Agreement, with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with the Offered Securities.
This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
12
<PAGE> 15
SCHEDULE I
DELAYED DELIVERY CONTRACT
, 19
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
Dear Sirs:
The undersigned hereby agrees to purchase from The Progressive
Corporation, an Ohio corporation (the "Company"), and the Company agrees to
sell to the undersigned $ principal amount of the Company's __%
Notes due _____________, ____ (the "Offered Securities"), offered by the
Company's Prospectus dated , 19__ and Prospectus Supplement dated , 19__,
receipt of copies of which is hereby acknowledged, at a purchase price of %
of the principal amount of such Offered Securities plus accrued interest from
, 19__ to the delivery date or dates thereof [and] [amortization of the
original issue discount from ,19__ to the delivery date or dates
thereof] and on the further terms and conditions set forth in this contract.
The undersigned does not contemplate selling Offered Securities
prior to making payment therefor.
The undersigned will purchase from the Company the principal
amounts of Offered Securities on the delivery dates set forth below:
[Plus Accrued Interest From:
Delivery [and][Amortization of
Date Principal Amount Original Issue Discount From:]
- ---- ---------------- ------------------------------
________ ___________________ ______________________________
________ ___________________ ______________________________
________ ___________________ ______________________________
Each such date on which Offered Securities are to be purchased
hereunder is hereinafter referred to as a "Delivery Date."
Payment for the Offered Securities which the undersigned has
agreed to purchase on each Delivery Date shall be made in U.S. dollars or the
equivalent thereof in a
I-1
<PAGE> 16
foreign denominated coin or currency or units based on or relating to
currencies (including European Currency Units (ECU)) [by certified or official
bank check or checks payable to the Company or by bank wire transfer] [by bank
wire transfer] in immediately available funds at the office of New York, N.Y.,
at _____ A.M. (New York time) on the Delivery Date, upon delivery to the
undersigned of the Offered Securities to be purchased by the undersigned on the
Delivery Date, in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communicated addressed to
the Company not less than five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for the
Offered Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Offered Securities to be made by the undersigned shall not
at the time of delivery be prohibited under the laws of the jurisdiction to
which the undersigned is subject and (2) the Company shall have sold, and
delivery shall have taken place to the underwriters (the "Underwriters") named
in the Prospectus Supplement referred to above, of such part of the Offered
Securities as is to be sold to them. Promptly after completion of sale and
delivery to the Underwriters, the Company will mail or deliver to the
undersigned at its address set forth below notice to such effect, accompanied
by a copy of the opinion of counsel for the Company delivered to the
Underwriters in connection therewith.
Failure to take delivery of and make payment for Offered
Securities by any purchaser under any other Delayed Delivery Contract shall not
relieve the undersigned of its obligations under this contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
If this contract is acceptable to the Company, it is requested
that the Company sign the form of acceptance below and mail or deliver one of
the counterparts hereof to the undersigned at is address set forth below. This
will become a binding contract, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
I-2
<PAGE> 17
This contract shall be governed by and construed in accordance
with the laws of the State of New York.
Yours very truly,
____________________________
(Purchaser)
By:_________________________
____________________________
(Title)
____________________________
____________________________
(Address)
Accepted:
THE PROGRESSIVE CORPORATION
By:_______________________
Title:
I-3
<PAGE> 18
PURCHASER--PLEASE COMPLETE AT TIME OF SIGNING
The name, telephone number and department of the representatives
of the Purchaser with whom details of delivery on the Delivery Date may be
discussed are as follows: (Please print)
Telephone No.
(Including
Name Area Codes) Department
- ---- ----------- ----------
________________ __________________ ___________________
________________ __________________ ___________________
________________ __________________ ___________________
________________ __________________ ___________________
________________ __________________ ___________________
I-4
<PAGE> 19
SCHEDULE II
-----------
(i) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Ohio, with all requisite corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) the Indenture has been duly authorized, executed and delivered by
the Company and, assuming due execution and delivery thereof by
the Trustee, is a valid and binding agreement of the Company and
has been duly qualified under the Trust Indenture Act of 1939, as
amended;
(iii) the Debt Securities have been duly authorized and executed by the
Company and, assuming due authentication of the Debt Securities by
the Trustee in accordance with the terms of the Indenture, upon
delivery to the Underwriters against payment therefor in
accordance with the terms of the Underwriting Agreement, will be
valid and binding obligations of the Company;
(iv) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(v) the issuance and sale of the Debt Securities as provided in the
Underwriting Agreement, the execution and delivery of the
Underwriting Agreement, the consummation of the transactions
contemplated thereby and compliance with the terms and provisions
thereof will not conflict with or result in a breach of any of the
terms or provisions of the Amended Articles of Incorporation or
the Code of Regulations or of any material agreement or instrument
known to us to which the Company is a party or by which the
Company is bound and will not constitute a default thereunder or
result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the properties or
assets of the Company under any such agreement or instrument;
II-1
<PAGE> 20
(vi) no consent, approval, authorization or other order of or filing
with any regulatory authority or other governmental body in the
United States of America is required for execution and delivery
of the Underwriting Agreement by the Company, except such as have
been obtained and made under the Securities Act of 1933, as
amended (the "Act"), the Trust Indenture Act of 1939 and the
General Corporation Law of Ohio (except for consents, approvals,
authorizations, orders or filings under any securities or "blue
sky" laws or any insurance laws of any state, as to which we do
not express an opinion); and
(vii) (A) the Registration Statement has become effective under the
Act, and, to the best of our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are
pending or threatened under the Act, (B) the Registration
Statement and the Prospectus, as of their respective effective or
issue dates (except for financial statements and financial data
and related schedules and notes, as to which we do not express an
opinion), appeared on their face to be appropriately responsive in
all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and (C) the
descriptions in the Registration Statement and the Prospectus, as
of their respective effective or issue dates, of statues, legal
and governmental proceedings and contracts and other documents,
insofar as such descriptions constitute a summary of such
statutes, legal and governmental proceedings and contracts and
other documents, fairly presented in all material respects the
information required to be stated under the Act, the Securities
Exchange Act of 1934, as amended, and the respective rules and
regulations of the Commission thereunder, and we do not know of
any legal or governmental proceedings pending or threatened to
which the Company is a party or to which any property of the
Company is subject which are required to be described in the
Prospectus, as of its issue date, which were not described as
required, or of any
II-2
<PAGE> 21
contracts or other documents of a character required to be
described in the Registration Statement or the Prospectus, as of
their respective effective or issue dates, or to be filed as
exhibits to the Registration Statement, as of its effective date,
which were not described and filed as required (the opinion
expressed in this subparagraph being based solely on our review of
the Registration Statement and the Prospectus and discussion of
the same with certain officers of the Company, but without
independent check or verification, except as specified).
II-3
<PAGE> 22
SCHEDULE III
(i) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(ii) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(iii) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has the corporate power
and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure
to be so incorporated or qualified or be in good standing would
not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(iv) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(v) The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and has been
duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, assuming the due
authorization, execution and delivery by
III-1
<PAGE> 23
the Trustee, enforceable in accordance with its terms except as
(i) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of
general applicability.
(vi) The Delayed Delivery Contracts, if any, have been duly authorized,
executed and delivered by the Company and are valid and binding
agreements of the Company, assuming the due authorization,
execution and delivery by the other party, enforceable in
accordance with their respective terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally
and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.
(vii) The Offered Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, in the
case of the Underwriters' Securities, or by institutional
investors in accordance with the terms of the Delayed Delivery
Contracts, if any, in the case of the Contract Securities, will be
entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, in each case enforceable in
accordance with their respective terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally
and (ii) rights of acceleration, if any, and the availability of
equitable remedies may be limited by equitable principles of
general applicability.
III-2
<PAGE> 24
(viii) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the
Indenture, the Offered Securities, and the Delayed Delivery
Contracts, if any, will not contravene in any material respect any
provision of applicable law or the Articles of Incorporation or
Code of Regulations of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a
whole, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any
subsidiary that is material to the Company and its subsidiaries,
taken as a whole, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is
required for the performance by the Company of its obligations
under this Agreement, the Indenture, the Offered Securities or the
Delayed Delivery Contracts, except such as may be required by the
securities or Blue Sky laws or any insurance laws of the various
states in connection with the offer and sale of the Offered
Securities.
(ix) There has not occurred any material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus.
(x) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a
party or to which any of the properties of the Company or any of
its subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not
described, filed or incorporated as required.
III-3
<PAGE> 25
(xi) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended.
(xii) The Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a
whole.
(xiii) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of
Cuba or with any person or affiliate located in Cuba.
(xiv) The ratios and other financial and statistical data contained in
the Registration Statement and the Prospectus have been prepared
in conformity in all material respects with the requirements of
the insurance laws, rules and regulations of any jurisdiction to
which the Company's subsidiaries are subject or generally accepted
accounting principles, as applicable, and present fairly the
information purported to be shown.
(xv) The reserves reflected in the Company's most recent quarterly
or annual report filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934, as amended, for payment of all
outstanding benefits, losses, claims and
III-4
<PAGE> 26
expenses under insurance policies and programs issued or provided
by the Company's subsidiaries are adequate, based on generally
accepted actuarial techniques applied on a consistent basis, to
cover in all material respects the total amount of all outstanding
liabilities incurred as of the date of such report under all
such insurance policies and programs under which such subsidiaries
may have any liability as of such date.
III-5
<PAGE> 1
Exhibit 4.2
THE PROGRESSIVE CORPORATION
AND
STATE STREET BANK AND TRUST COMPANY, as
Successor Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of March 15, 1996
<PAGE> 2
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of March 15, 1996 (this
"Supplemental Indenture") by and between THE PROGRESSIVE CORPORATION, an Ohio
corporation (the "Issuer") and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company ("SSB"), in its capacity as Successor Trustee (in
such capacity, the "Successor Trustee").
WITNESSETH:
WHEREAS, the Issuer entered into an Indenture, dated as of September
15, 1993 (the "Indenture"), with The First National Bank of Boston ("FNBB"), in
its capacity as Trustee (in such capacity, the "Original Trustee"), pursuant to
which the Issuer may from time to time issue its unsecured debentures, notes
and other evidences of indebtedness in one or more series; and
WHEREAS, SSB has acquired substantially all of the corporate trust
business of FNBB; and
WHEREAS, the parties hereto wish to confirm the succession of SSB as
trustee under the Indenture.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto mutually covenant and agree as
follows:
1. Pursuant to Section 6.11 of the Indenture, SSB, by virtue of
its succession to the corporate trust business of FNBB, is the Successor
Trustee under the Indenture.
2. SSB represents and warrants that (a) to the best of its
knowledge, it is qualified under Section 310(b) of the Trust Indenture Act of
1939 and (b) it is eligible to serve as Successor Trustee under the provisions
of Section 6.8 of the Indenture. SSB hereby accepts its appointment as
Successor Trustee.
3. The Issuer hereby confirms the removal of the Original Trustee
and the appointment of SSB as the Successor Trustee, and further confirms that
all rights and powers of the trustee under the Indenture have vested in the
Successor Trustee.
4. The definition of "Corporate Trust Office" in Section 1.1 of
the Indenture shall be deleted and the following shall be added in its place:
<PAGE> 3
"Corporate Trust Office" means the office of the Trustee at
which the corporate trust business of the Trustee shall, at
any particular time, be principally administered, which office
is currently located at Two International Place, Boston,
Massachusetts 02110, Attn.: Corporate Trust Administration.
5. In all other ways the Indenture is hereby ratified and
confirmed.
THE PROGRESSIVE CORPORATION
By /s/ Charles B. Chokel
--------------------------------
Charles B. Chokel
Treasurer
[Corporate Seal]
Attest:
By /s/ David M. Schneider
-------------------------
David M. Schneider
Secretary
STATE STREET BANK AND TRUST
COMPANY
By /s/ Ruth A. Smith
-------------------------------
Ruth A. Smith
Assistant Vice President
[Corporate Seal]
Attest:
By /s/ Debra J. Gauthier
-------------------------
Debra J. Gauthier
Senior Account Administrator
<PAGE> 4
STATE OF OHIO )
) ss.:
COUNTY OF CUYAHOGA )
On this 14th day of March, 1996, before me personally came Charles B.
Chokel, to me personally known, who, being by me duly sworn, did depose and say
that he is a resident of Cuyahoga County, Ohio; that he is an officer of THE
PROGRESSIVE CORPORATION, one of the corporations described in and which
executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Cynthia E. Barth
---------------------------------
Notary Public
My commission expires:
[Notarial Seal]
STATE OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
On this 15th day of March, 1996, before me personally came Ruth A.
Smith, to me personally known, who, being by me duly sworn, did depose and say
that she is a resident of Norfolk County, Massachusetts; that she is an
authorized officer of STATE STREET BANK AND TRUST COMPANY, one of the
corporations described in and which executed the above instrument; that she
knows the corporate seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that she signed her name thereto by
like authority.
/s/ Cecil Gilbert
----------------------------------
Notary Public
My commission expires:
[Notarial Seal]
<PAGE> 1
Exhibit 4.3
(Face of Security)
REGISTERED REGISTERED
No. ________ $___________
CUSIP
SEE REVERSE FOR CERTAIN DEFINITIONS
THE PROGRESSIVE CORPORATION
% [NOTE][DEBENTURE] DUE
THE PROGRESSIVE CORPORATION, an Ohio corporation (the "Issuer"), for
value received, hereby promises to pay to
or registered assigns, at the office or agency of the Issuer at the office of
the Trustee in Boston, Massachusetts, the principal sum of
dollars on , , in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest semiannually on and
of each year, commencing on , , on said principal sum
at said office or agency, in like coin or currency, at the rate per annum
specified in the title of this , from the or
the , as the case may be, next preceding the date of
this to which interest has been paid, unless the date hereof
is a date to which interest has been paid, in which case from the date of
this , or unless no interest has been paid on
the , in which case from , , until payment of said
principal sum has been made or duly provided for; provided, that payment of
interest may be made at the option of the Issuer by check mailed to the
address of the person entitled thereto as such address shall appear on the
Security Register. Notwithstanding the foregoing, if the date hereof is after
the day of or , as the case may be, and before the
following or , this shall bear interest from
such or ; provided, that if the Issuer shall default
in the payment of interest due on such or , then
this shall bear interest from the next preceding or
to which interest has been paid or, if no interest has been paid on this ,
from , . The interest so payable on any or
will, subject to certain exceptions provided in the Indenture referred to on the
reverse hereof, be paid to the person in whose name this is
registered at the close of business on the or ,
as the case may be, next preceding such or .
Reference is made to the further provisions of this
set forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This shall not be valid or become obligatory for
any purpose until the certificate of authentication hereon shall have been
signed by the Trustee under the Indenture referred to on the reverse hereof.
<PAGE> 2
IN WITNESS WHEREOF, The Progressive Corporation has caused this
instrument to be signed by facsimile by its duly authorized officers and has
caused a facsimile of its corporate seal to be affixed hereto or imprinted
hereon.
THE PROGRESSIVE CORPORATION
[CORPORATE SEAL] By:
President and Chief Executive Officer
Attest:
Secretary
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities, of the series designated herein,
referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:
Authorized Signatory
<PAGE> 3
(Back of Security)
THE PROGRESSIVE CORPORATION
% DUE
This is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (hereinafter
called the "Securities") of the series hereinafter specified, all issued or to
be issued under and pursuant to an indenture dated as of September 15, 1993, as
heretofore supplemented and amended (herein called the "Indenture"), between
the Issuer and State Street Bank and Trust Company, as Trustee (herein called
the "Trustee"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Issuer and the Holders of the Securities. The Securities may be issued in one
or more series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear interest (if any) at
different rates, may be subject to different redemption provisions (if any),
may be subject to different sinking, purchase or analogous funds (if any) and
may otherwise vary as in the Indenture provided. This is one of
a series designated as the % Due of the Issuer,
limited in aggregate principal amount to $ .
In case an Event of Default, as defined in the Indenture, with respect
to the % Due shall have occurred and be continuing,
the principal hereof may be declared, and upon such declaration shall become,
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of not less than 66 2/3 % in aggregate
principal amount of the Securities at the time Outstanding (as defined in the
Indenture) of all series to be affected (voting as one class), evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the Holders of the Securities of each such series; provided, however, that no
such supplemental indenture shall (i) extend the final maturity of any Security,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of any interest thereon, or impair or affect the rights of any Holder to
institute suit for the payment thereof, without the consent of the Holder of
each Security so affected or (ii) reduce the aforesaid percentage of Securities,
the Holders of which are required to consent to any such supplemental indenture,
without the consent of the Holder of each Security so affected. It is also
provided in the Indenture that, with respect to certain defaults or Events of
Default regarding the Securities of any series, prior to any declaration
accelerating the maturity of such Securities, the Holders of a majority in
aggregate principal amount Outstanding of the Securities of such series may on
behalf of the Holders of all the Securities of such series waive any such past
default or Event of Default and its consequences. The preceding sentence shall
not, however, apply to a default in the payment of the principal of or premium,
if any, or interest on any of the Securities. Any such consent or waiver by the
Holder of this (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this and any which may be issued in exchange or
substitution herefor, irrespective of whether or not any notation thereof is
made upon this or such other .
No reference herein to the Indenture and no provision of this
or of the Indenture shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and interest on this
in the manner, at the respective times, at the rate and in the
<PAGE> 4
coin or currency herein prescribed.
The are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000 at the office or
agency of the Issuer at the office of the Trustee in Boston, Massachusetts, and
in the manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge. may be exchanged
for a like aggregate principal amount of of other authorized
denominations.
[The are not subject to redemption at the option of
the Issuer or through the operation of a sinking fund.]
Upon due presentment for registration of transfer of this
at the office or agency of the Issuer at the office of the Trustee in Boston,
Massachusetts, a new or of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange therefor, subject to the limitations provided in the
Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute owner
of this (whether or not this shall be overdue
and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and,
subject to the provisions on the face hereof, interest hereon, and for all
other purposes, and neither the Issuer nor the Trustee nor any authorized
agent of the Issuer or the Trustee shall be affected by notice to the
contrary.
No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any ,
or because of the creation of any indebtedness represented thereby, shall be
had against any incorporator, shareholder, officer or director, as such, of the
Issuer or of any successor corporation, either directly or through the Issuer
or any successor corporation, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance hereof and as part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
<PAGE> 5
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties CUST - Custodian
JT TEN - as joint tenants with right of
survivorship and not as
tenants UNIF GIFT MIN ACT - Uniform Gifts
in common to Minors Act
_______________
(State)
Additional abbreviations may also be used though not in the above list.
_____________________________________
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_____________________
_____|_____________________|__________________________________________
______________________________________________________________________
Please print or typewrite name and address including
postal zip code of assignee
______________________________________________________________________
the within and all rights thereunder, hereby irrevocably constituting and
appointing
______________________________________________________________________
___________________ attorney to transfer said on the books of the
Issuer, with full power of substitution in the premises.
Dated:___________________ __________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within instrument in
every particular, without alteration or
enlargement or any change whatever.
<PAGE> 1
Exhibit 5
BAKER & HOSTETLER
1900 E. NINTH STREET
CLEVELAND, OH 44114-3485
March 15, 1996
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
Re: Registration Statement on Form S-3 with respect to
$200,000,000 aggregate principal amount of Debt
Securities of The Progressive Corporation
Dear Sirs:
We have acted as counsel to The Progressive Corporation, an
Ohio corporation (the "Company"), in connection with its Registration Statement
on Form S-3 (the "Registration Statement") being filed under the Securities Act
of 1933, as amended (the "Act"), relating to the proposed public offering
of up to $200,000,000 aggregate principal amount of the Company's Debt
Securities (the "Securities") to be issued under an Indenture dated as of
September 15, 1993 (the "Indenture") between the Company and State Street Bank
and Trust Company, as trustee.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents as we have deemed necessary
for the purposes of rendering this opinion including, without limitation, copies
of resolutions adopted by the Board of Directors, the Articles of Incorporation,
as amended, and Code of Regulations, of the Company, the Indenture, and the
forms of Underwriting Agreement and Debt Security filed as exhibits to the
Registration Statement. In our examination, we have assumed that the Indenture
has been duly executed and delivered.
Based upon the foregoing, we are of the opinion that:
When (a) the Securities in substantially the form filed as
Exhibit 4.3 to the Registration Statement shall have been duly executed and
authenticated in accordance with the terms of the Indenture, (b) the Indenture
shall have been qualified under the Trust Indenture Act of 1939 and (c) the
Securities shall have been issued and sold as described in the Registration
Statement,
<PAGE> 2
The Progressive Corporation
March 15, 1996
Page 2
and if in an underwritten offering, in accordance with the terms and conditions
of an Underwriting Agreement substantially in the form of Exhibit 1 to the
Registration Statement with the blanks appropriately filled in, and in a manner
contemplated in the Registration Statement, including the Prospectus Supplement
relating to any Securities, the Securities will be duly authorized and valid and
binding obligations of the Company, except as may be limited by bankruptcy,
insolvency, reorganization or other laws relating to the enforcement of
creditors' rights generally or by general principles of equity.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement and to the reference to our firm under "Legal
Matters" in the prospectus included in the Registration Statement.
Very truly yours,
/s/ Baker & Hostetler
<PAGE> 1
Exhibit 12.1
THE PROGRESSIVE CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Income before
income taxes and
cumulative effect
of accounting
change (1) $345.9 $379.8 $373.1 $178.7 $32.9
------ ------ ------ ------ -----
Fixed charges:
Interest and
amortization
on indebtedness 57.1 56.9 42.4 44.8 47.8
Portion of rents
representative
of the
interest
factor 4.2 3.1 3.0 4.6 5.1
------ ------ ------ ------ -----
Total fixed charges 61.3 60.0 45.4 49.4 52.9
------ ------ ------ ------ -----
Total income
available for
fixed charges (2) $407.2 $438.2 $415.8 $227.8 $85.8
====== ====== ====== ====== =====
Ratio of earnings
to fixed charges 6.6 7.3 9.2 4.6 1.6
====== ====== ====== ====== =====
</TABLE>
(1) 1992 results include the cumulative effect of an accounting change due
to the adoption of Statement of Financial Accounting Standards 109,
"Accounting for Income Taxes."
(2) Excludes interest capitalized of $1.6 million, $2.7 million and $.3
million for the years ended December 31, 1994, 1993 and 1992,
respectively. No interest was capitalized in 1995 or 1991.
<PAGE> 1
Exhibit 12.2
THE PROGRESSIVE CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED SHARE DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Income before income
taxes and cumulative effect
of accounting change (1) $345.9 $379.8 $373.1 $178.7 $ 32.9
------ ------ ------ ------ ------
Fixed charges:
Interest and amortization
on indebtedness 57.1 56.9 42.4 44.8 47.8
Portion of rents representative
of the interest factor 4.2 3.1 3.0 4.6 5.1
------ ------ ------ ------ ------
Total fixed charges 61.3 60.0 45.4 49.4 52.9
------ ------ ------ ------ ------
Preferred share dividend
requirements 11.5 11.7 12.8 12.0 5.8
------ ------- ------- ------ ------
Total fixed charges and
preferred share dividend
requirements 72.8 71.7 58.2 61.4 58.7
------ ------ ------ ------ ------
Total income available for fixed
charges and preferred share
dividend requirements (2) $407.2 $438.2 $415.8 $227.8 $ 85.8
====== ====== ====== ====== ======
Ratio of earnings to combined
fixed charges and preferred
share dividend requirements 5.6 6.1 7.1 3.7 1.5
====== ====== ====== ====== ======
</TABLE>
(1) 1992 results include the cumulative effect of an accounting change due
to the adoption of Statement of Financial Accounting Standards 109,
"Accounting for Income Taxes."
(2) Excludes interest capitalized of $1.6 million, $2.7 million and $.3
million for the years ended December 31, 1994, 1993 and 1992,
respectively, as well as preferred share dividend requirements for all
periods presented. No interest was capitalized in 1995 or 1991.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders,
The Progressive Corporation:
We consent to the incorporation by reference in the Registration Statement of
The Progressive Corporation on Form S-3 of our reports dated January 24, 1996,
on our audits of the consolidated financial statements and financial statement
schedules of The Progressive Corporation and subsidiaries (the "Company") as of
December 31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995, which reports are included in the Company's Annual Report on
Form 10-K.
COOPERS & LYBRAND L.L.P.
Cleveland, Ohio
March 14, 1996
<PAGE> 1
Exhibit 24.1
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, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, 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-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $200 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to 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 executed
by the undersigned, in the capacities and on the date set forth below.
Date: February 27, 1996 /s/ Peter B. Lewis
-----------------------------------
Peter B. Lewis
Chairman, President, Chief Executive Officer
and Director
<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, R. Steven Kestner, David M.
Schneider and Dane A. Shrallow, 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-3 or other form in order to register under the Securities Act of 1933, as
amended, up to $200 million aggregate principal amount of notes, debentures or
other debt securities of the Company containing such terms and provisions as the
Board of Directors of the Company, or the Executive Committee thereof, may
specify, and to any and all amendments, post-effective amendments, supplements
and exhibits to such Registration Statement, and to any and all applications,
instruments and/or other documents pertaining thereto, giving and granting to
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 executed
by the undersigned, in the capacities and on the date set forth below.
Date: February 22, 1996 /s/ Charles B. Chokel
----------------------------------
Charles B. Chokel
Treasurer and Chief Financial Officer
<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, Charles B. Chokel, R. Steven Kestner, David M.
Schneider and Dane A. Shrallow, 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-3 or other form in order to register under the Securities Act of 1933, as
amended, up to $200 million aggregate principal amount of notes, debentures or
other debt securities of the Company containing such terms and provisions as the
Board of Directors of the Company, or the Executive Committee thereof, may
specify, and to any and all amendments, post-effective amendments, supplements
and exhibits to such Registration Statement, and to any and all applications,
instruments and/or other documents pertaining thereto, giving and granting to
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 executed
by the undersigned, in the capacities and on the date set forth below.
Date: February 27, 1996 /s/ Jeffrey W. Basch
--------------------------------
Jeffrey W. Basch
Chief Accounting 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, R. Steven
Kestner and Dane A. Shrallow, 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-3 or other form in order to register under the Securities Act of 1933, as
amended, up to $200 million aggregate principal amount of notes, debentures or
other debt securities of the Company containing such terms and provisions as the
Board of Directors of the Company, or the Executive Committee thereof, may
specify, and to any and all amendments, post-effective amendments, supplements
and exhibits to such Registration Statement, and to any and all applications,
instruments and/or other documents pertaining thereto, giving and granting to
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 executed
by the undersigned, in the capacities and on the date set forth below.
Date: February 22, 1996 /s/ David M. Schneider
--------------------------------
David M. Schneider
Secretary
<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, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, 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-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $200 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to 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 executed
by the undersigned, in the capacities and on the date set forth below.
Date: February 26, 1996 /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, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, 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-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $200 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to 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 executed
by the undersigned, in the capacities and on the date set forth below.
Date: February 28, 1996 /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, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, 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-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $200 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to 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 executed
by the undersigned, in the capacities and on the date set forth below.
Date: February 27, 1996 /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, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, and each of them, her true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to affix for her and in her name, place and stead, in any and
all capacities, as attorney-in-fact and agent, her signature to a Registration
Statement on Form S-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $200 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to 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 she
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 executed
by the undersigned, in the capacities and on the date set forth below.
Date: February 26, 1996 /s/ Janet Hill
---------------------------------
Janet Hill
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, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, 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-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $200 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to 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 executed
by the undersigned, in the capacities and on the date set forth below.
Date: February 26, 1996 /s/ Norman S. Matthews
------------------------------------
Norman S. Matthews
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, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, 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-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $200 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to 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 executed
by the undersigned, in the capacities and on the date set forth below.
Date: March 5, 1996 /s/ Paul B. Sigler
--------------------------------
Paul B. Sigler
Director
<PAGE> 11
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, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow, 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-3 or other form in order to register under the Securities
Act of 1933, as amended, up to $200 million aggregate principal amount of notes,
debentures or other debt securities of the Company containing such terms and
provisions as the Board of Directors of the Company, or the Executive Committee
thereof, may specify, and to any and all amendments, post-effective amendments,
supplements and exhibits to such Registration Statement, and to any and all
applications, instruments and/or other documents pertaining thereto, giving and
granting to 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 executed
by the undersigned, in the capacities and on the date set forth below.
Date: February 27, 1996 /s/ Donald B. Shackelford
---------------------------------
Donald B. Shackelford
Director
<PAGE> 1
Exhibit 24.2
THE PROGRESSIVE CORPORATION
CERTIFIED COPY OF RESOLUTIONS
I. Debt Securities
RESOLVED: that the Company is hereby authorized to create,
issue and sell in one or more underwritten public offerings or
otherwise one or more series of notes, debentures or other
form of debt securities, pursuant to one or more indentures as
described below (the "Debt Securities"), such Debt Securities
to be designated, to be issued and sold at such times, in such
forms and in such principal amounts, to be for such terms, to
be payable on such dates, to bear interest at such rates per
annum and be payable at such times, and to have such other
terms, provisions and conditions as may be determined and
approved by the Executive Committee of the Board of Directors
as provided below; provided, however, that the aggregate
principal amount of all Debt Securities issued pursuant to
these resolutions shall not exceed Two Hundred Million Dollars
($200,000,000);
RESOLVED: that, subject to the foregoing limitations and
notwithstanding anything to the contrary contained in the
succeeding resolutions, the Executive Committee shall have all
requisite authority, for and on behalf of the Company, to
establish the following terms, provisions and conditions with
respect to the Debt Securities of any series and the issuance
and sale thereof:
(i) the types of Debt Securities to be issued and the
titles and designations of the same;
(ii) the time or times as of which each series of Debt
Securities shall be issued;
(iii) the aggregate principal amount of each series of
Debt Securities to be issued, subject to the
aggregate limit set forth above;
(iv) the identity of the managing or lead underwriter
or underwriters, if any, in connection with any
such sale of Debt Securities and the identity of
the trustee(s) of one or more indentures as
described below;
(v) the prices at which the Debt Securities of each
series are to be sold, the amount of any
discounts to be given and/or commissions, fees or
other sums to be paid to underwriters, trustees
or others by the Company in conjunction therewith
and the amount of fees to be paid by the Company
in conjunction with any delayed delivery
contracts;
(vi) the maturity or maturities of each series of Debt
Securities;
(vii) the rate or rates of interest to be borne by each
series of Debt Securities to be issued, which
rate or rates may
<PAGE> 2
vary from time to time in accordance with a
method or formula approved by the Executive
Committee;
(viii) the date or dates on which such interest shall
begin to accrue, the period or periods for which
interest shall accrue, the date or dates on which
such interest shall be payable, and the record
date for the interest payable on any interest
payment date;
(ix) the period or periods within which, the prices at
which, and the terms and conditions upon which
each series of Debt Securities may be redeemed,
in whole or in part, at the option of the
Company;
(x) the obligation, if any, of the Company to redeem
or purchase any series of Debt Securities
pursuant to any sinking fund or analogous
provisions or at the option of a holder thereof,
and the period or periods within which, the price
or prices at which and terms and conditions upon
which any series of Debt Securities shall be
redeemed or purchased, in whole or in part,
pursuant to such obligation;
(xi) the denominations in which each series of Debt
Securities shall be issuable;
(xii) if other than the principal amount thereof, the
portion of the principal amount of each series of
Debt Securities which shall be payable upon a
declaration of acceleration of the maturity
thereof;
(xiii) the affirmative and negative covenants, if any,
to be observed by the Company in conjunction with
each series of Debt Securities;
(xiv) the form of each series of Debt Securities;
(xv) the authenticating or paying agents, transfer
agents or registrars with respect to any series
of Debt Securities; and
(xvi) such other terms, conditions and provisions
relating to any series of the Debt Securities as
the Executive Committee shall deem appropriate;
and
RESOLVED: that the terms, provisions and conditions
applicable to the Debt Securities of any series, and the sale
thereof, shall be established by the Executive Committee by
and set forth in resolutions of such Committee and, if the
Executive Committee in its sole discretion shall direct, may
be set forth in any indenture or supplemental indenture
authorized hereinbelow;
RESOLVED: that, in conjunction with the creation, issuance
and sale of any series of Debt Securities, the President and
Treasurer of the Company be, and each of them with full power
to act without the others is, hereby authorized and empowered
to execute the Debt Securities (and, in addition, Debt
Securities to replace lost,
<PAGE> 3
stolen, mutilated or destroyed Debt Securities and Debt
Securities, if any, required for exchange, all as provided in
the applicable Indenture), such execution to be in the name and
on behalf of the Company and under its corporate seal attested
by the Secretary or an Assistant Secretary of the Company, with
each series of such Debt Securities to be in such form and to
contain such terms, provisions and conditions as may be
approved by the Executive Committee, to deliver such Debt
Securities to the Trustee for authentication and delivery
pursuant to the applicable Indenture and to otherwise cause the
issuance, sale, authentication and delivery of the Debt
Securities;
RESOLVED: that the signatures of the officers of the Company
so authorized to execute the Debt Securities may, but need not
be, the facsimile signatures of such authorized officers
imprinted or otherwise reproduced thereon, the Company for
such purpose hereby adopting each such facsimile signature as
binding upon it, notwithstanding the fact that at the time any
Debt Security shall be authenticated and delivered or disposed
of the officer so signing shall have ceased to be such
authorized officer;
II. Registration Statements
RESOLVED: that the President, Treasurer and 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 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"), one or
more Registration Statements on Form S-3, or such other
available form or forms as may be approved by any of such
officers (including one or more prospectuses, prospectus
supplements, pricing supplements, all exhibits and other
documents relating thereto), (collectively, the "Registration
Statement") with respect to the Debt Securities to be sold in
one or more series by the Company to or through such
underwriter(s) or other purchasers as the Executive Committee
may select, on a delayed or continuous basis pursuant to Rule
415 under the Act or otherwise; and
RESOLVED: that the President, Treasurer and 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; to qualify the
Indentures, as hereinafter defined, including any and all
amendments and supplements thereto, under the Trust Indenture
Act of 1939, as amended; 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
3
<PAGE> 4
thereunder (the "Rules and Regulations"), and to become
effective under the Act and the Rules and Regulations; and
RESOLVED: that when the registration of the Debt Securities
pursuant to the Registration Statement has become effective
with the Commission, the President, Treasurer and Secretary of
the Company be, and each of them with full power to act
without the others is, hereby authorized and directed, for and
on behalf of the Company, to execute, deliver and file any and
all documents, and to do any and all acts and things, as may
be necessary or proper in connection with the issuance and/or
sale of the Debt Securities as hereinabove authorized; and
RESOLVED: that David M. Schneider, or such other individual
as shall 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
RESOLVED: that any director or officer of the Company
required by law or authorized herein 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
RESOLVED: that Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow 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,
and any and all amendments or supplements thereto and any and
all applications or other documents to be filed with the
Commission in connection therewith and any and all
applications or other documents to be filed with any
governmental or private agency or official relative to the
issuance and sale of Debt Securities, 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 President,
Treasurer and Secretary be, and each hereby is, authorized and
directed, for an on behalf of the Company, to execute and
deliver a Power of Attorney evidencing the foregoing
appointment; and
RESOLVED: that Jeffrey W. Basch, Charles B. Chokel, R. Steven
Kestner, David M. Schneider and Dane A. Shrallow 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
4
<PAGE> 5
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 President, Treasurer and Secretary,
and on behalf of and as attorneys-in-fact for each director of
the Company; and
RESOLVED: that each of the officers of the Company and its
attorneys-in-fact, Messrs. Jeffrey W. Basch, Charles B.
Chokel, R. Steven Kestner, David M. Schneider and Dane A.
Shrallow, be, and each of them with full power to act without
the others is, hereby authorized to appear on behalf of the
Company before the Commission in connection with any matters
relating to the Registration Statement and all amendments or
supplements thereto; and
III. Indentures
RESOLVED: that, the Debt Securities of any series issued
pursuant to the authority granted hereunder shall be issued
pursuant to, and shall in all respects be subject to all of
the terms, provisions and conditions of, that certain
indenture dated as of September 15, 1993 ("1993 Indenture")
between the Company and State Street Bank and Trust Company
("SSBT"), as successor to The First National Bank of Boston,
as trustee, or, if so authorized and directed by the Executive
Committee, another indenture as authorized below; and
RESOLVED: that, with respect to each series of Debt
Securities, the President, Treasurer and 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 prepare or cause to be prepared, and to execute
and deliver one or more supplemental indentures to the 1993
Indenture or any other indenture of the Company, or one or
more new or additional indentures, including any and all
supplements and amendments thereto, with SSBT or such other
trustee as may be designated by the Executive Committee (the
"Trustee"), such indentures, supplemental indentures or
amendments to be in such form or forms as any of the foregoing
officers shall approve and may set forth, among other things,
the terms and conditions upon which (i) the Debt Securities
are to be authenticated, issued and delivered; (ii) principal
of, premium, if any, and interest on the Debt Securities is to
be paid; and (iii) the Debt Securities may be called or
redeemed, and such other and further provisions as shall be
authorized or approved, as herein provided; and
RESOLVED: that the Executive Committee is hereby authorized
and empowered to (i) select and appoint the trustee under any
such new or additional indenture, and the person or persons
who will serve as paying agent and registrar or co-registrars
of the Debt Securities of any series under each indenture, and
(ii) select the offices or agencies of the Company where Debt
Securities of any series may be presented for payment and
where legal process, notices and demands to or upon the
Company with respect to any indenture or the Debt Securities
may be served, given or made, and select the offices or
agencies of the Company where the Debt
5
<PAGE> 6
Securities of any series may be presented for registration,
transfer and exchange; and that the execution and delivery of
any indenture or other instrument providing for the
appointment of, or appointing, any such trustee, paying agent,
registrar or co-registrar and/or specifying any such office or
agency, by any of such officer(s), shall be conclusive
evidence of all requisite approvals by the Company;
RESOLVED: that the officers of the Company be, and each of
them with full power to act without the others is, hereby
authorized and empowered to do and perform all such acts and
things and to execute and deliver, in the name of the Company
or otherwise and on behalf of the Company, any and all such
certificates, instruments, documents, reports and statements
as may be required by or otherwise provided for under the 1993
Indenture or any other indenture or the Debt Securities of any
series, or as shall otherwise be necessary or desirable in
order to ensure the Company's continued compliance with all
the provisions and requirements of each such indenture and the
Debt Securities, to effect the issuance and sale of the Debt
Securities and to carry out the terms and provisions of the
Debt Securities and each such indenture; and
IV. Selling Arrangements
RESOLVED: that the Company be, and it hereby is, authorized
to sell all or any portion of the Debt Securities to or
through one or more underwriters, as selected by the Executive
Committee, acting alone or together or as representatives of a
group of underwriters, and/or to sell all or a portion of the
Debt Securities directly to other purchasers or through agents
or dealers, with all such sales to be made pursuant to one or
more underwriting, purchase and/or delayed delivery agreements
(the "Selling Documents"); and
RESOLVED: that, in conjunction with each sale of Debt
Securities by the Company, the President, Treasurer and
Secretary of the Company be, and each of them with full power
to act without the others is, hereby authorized to execute, in
the name and on behalf of the Company, one or more Selling
Documents providing for the sale by the Company of all or a
portion of the Debt Securities, with each such Selling
Document to be executed at such time and in such number of
counterparts and to be in such form and contain such terms,
provisions and conditions as may be approved by the officer(s)
of the Company executing the same, the execution of any such
Selling Document by any such officer(s) to be conclusive
evidence of all requisite approvals, and to cause the delivery
of each Selling Document to be made at such time as may be
approved by the officer(s) executing the same; and
6
<PAGE> 7
V. New York Stock Exchange Listing; Securities
Exchange Act of 1934
RESOLVED: that the Company is hereby authorized to make one
or more applications to the New York Stock Exchange, Inc. for
the listing of one or more series of Debt Securities on said
Exchange, upon official notice of issuance and satisfactory
evidence of distribution, and that the officers of the Company
and its attorneys-in-fact, Messrs. Jeffrey W. Basch, Charles
B. Chokel, R. Steven Kestner, David M. Schneider and Dane A.
Shrallow be, and each of them with full power to act without
the others is, hereby authorized, at such times as the
Executive Committee may direct, to make application for such
listings and, in connection therewith, to execute, in the name
and on behalf of the Company, and under its corporate seal or
otherwise, and to file or deliver all such applications,
statements, certificates, agreements and other instruments and
documents as shall be necessary or desirable to accomplish
such listings, with authority to make such changes in any such
listing application or other documents and in any agreements
that may be made in connection therewith as, in their or his
discretion, may be necessary to comply with the requirements
for or to otherwise obtain such listing; and that such
officers and attorneys be, and each of them with full power to
act without the others is, hereby authorized to appear on
behalf of the Company before the appropriate committee or body
of the New York Stock Exchange, Inc., as such appearance may
be required; and
RESOLVED: that in consideration of the New York Stock
Exchange, Inc. not interposing any objection to the Company's
employing the facsimile signatures of any one or more of its
duly authorized officers in connection with the execution of
the Debt Securities in the name and on behalf of the Company,
the Company on behalf of itself, its successors and assigns,
covenants and agrees that every innocent purchaser for value
of any instrument which has been prepared by such printer or
engraver as shall be approved in writing by the President,
Treasurer or Secretary, in the form authorized by the Company
for the Debt Securities and which bears the facsimile
signatures of said duly authorized officers, or facsimile
signatures resembling or purporting to be such facsimile
signatures, and which has been manually authenticated by an
authorized officer of the Trustee, may rely upon such
facsimile signatures or any such facsimile signatures
resembling or purporting to be such facsimile signatures,
regardless of by whom or by what means the same may have been
imprinted on said instrument and that any such facsimile
signatures or any such facsimile signatures so relied on shall
be as valid, effectual, conclusive and binding for all
purposes upon the Company as if the same had in fact been
executed manually for and on behalf of the Company by its
proper officers thereunto duly authorized, and the Company
hereby covenants and agrees to indemnify and hold harmless the
New York Stock Exchange, Inc., its directors, officers,
employees and its subsidiary companies and every such innocent
purchaser for value from and against any and all loss,
liability, claim, damages or expense, including costs,
disbursements and counsel fees, arising out of any act done in
reliance upon the authenticity of any such facsimile
signatures when imprinted and
7
<PAGE> 8
authenticated as aforesaid; and that the President, Treasurer
and Secretary of the Company be, and each of them with full
power to act without the others hereby is, authorized and
directed to execute and deliver to the New York Stock Exchange,
Inc. an Indemnity Agreement to substantially the foregoing
effect;
RESOLVED: that the Company is hereby authorized to make one
or more applications to the Commission for the registration of
any series of Debt Securities under the Securities Exchange
Act of 1934; and that the President, Treasurer and Secretary
of the Company be, and each of them with full power to act
without the others is, hereby authorized and empowered, at
such times as to them shall seem advisable, to execute and
file or deliver any and all such applications and other
instruments and documents as shall be necessary to effect such
registration; and
RESOLVED: that the President, Treasurer and Secretary of the
Company and its attorneys-in-fact, Messrs. Jeffrey W. Basch,
Charles B. Chokel, R. Steven Kestner, David M. Schneider and
Dane A. Shrallow be, and each of them with full power to act
without the others is, hereby authorized to appear on behalf
of the Company before the Commission in connection with any
matter relating to the registration of any series of the Debt
Securities under the Securities Exchange Act of 1934;
VI. Blue Sky Qualification
RESOLVED: that the Debt Securities be qualified or registered
for sale in various jurisdictions; that the President,
Treasurer and Secretary of the Company be, and each of them
with full power to act without the others is, hereby
authorized to determine the jurisdictions in which appropriate
action shall be taken to qualify or register for sale all or
such part of the Debt Securities of the Company as said
officer(s) may deem advisable; that each of said officers,
with full power to act without the others, be and hereby is
authorized to perform on behalf of the Company any and all
such acts that he may deem necessary or advisable in order to
comply with the applicable laws, regulations and other
requirements of such jurisdictions in order to obtain a permit
to issue and sell such Debt Securities, or to register or
qualify such Debt Securities for issuance therein or to secure
an appropriate exemption from such registration or
qualification or to obtain a license for the Company as a
dealer or broker under the securities laws of such
jurisdictions as any such officer or officers may deem
advisable, and, in connection therewith, to execute,
acknowledge, verify, deliver, publish and file all requisite
papers and documents, including, but not limited to,
applications, reports, surety bonds, issuer's covenants,
irrevocable consents to appointments of attorneys for 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 in order
to maintain such permit, registration, qualification,
exemption or license in effect for as long as they may deem to
be in the best interests of the Company or as required by law;
and the execution by any such officer or officers of any such
papers or documents or the doing by any of them of any act in
connection with the foregoing matters shall
8
<PAGE> 9
conclusively establish their authority therefor from the
Company and the approval and ratification by the Company of
the papers and documents so executed and the action so taken;
and
RESOLVED: that any partners or officers of any of the
underwriters licensed in California as a broker-dealer be, and
each such partner or officer hereby is, authorized for and on
behalf of the Company to execute any necessary application for
the registration or qualification of any Debt Securities under
the securities laws of the State of California; and
RESOLVED: that the Company hereby adopts the form of any and
all resolutions required by any state authority in connection
with any such applications, reports, surety bonds, issuer's
covenants, irrevocable consents to and appointments of
attorneys for service of process, powers of attorney and other
papers and instruments, if (1) in the opinion of the officer
of the Company so acting the adoption of such resolutions is
necessary or advisable and (2) the Secretary of the Company
evidences such adoption by filing with the minutes of the
Company copies of such resolutions, which shall thereupon be
deemed to be adopted by the Company and incorporated into this
resolution with the same force and effect as if expressly
contained herein, and that the officer(s) of the Company take
any and all further action which they or any of them may deem
necessary or advisable in order to maintain such registration
or qualification for sale in various jurisdictions in effect
for as long as they may deem to be in the best interests of
the Company; and
VII. Miscellaneous
RESOLVED: that, in addition to the authority granted by these
resolutions to certain officers and other individuals to act
on behalf of the Company, the President, Treasurer and
Secretary of the Company be, and each of them with full power
to act without the others is, hereby authorized to fix, modify
and add to such terms, conditions and provisions of the Debt
Securities, the indentures (including any amendments and
supplemental indentures thereto), any underwriting, sales or
delayed delivery agreement and other documents, and to
authorize the execution and delivery of such other documents
and the taking of such other actions (including filings with
all necessary governmental or regulatory agencies), as any of
such officers may deem necessary or desirable to effectuate
the issuance and sale of the Debt Securities as contemplated
in the foregoing resolutions;
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 National Association of
Securities Dealers, Inc., the New York Stock Exchange, Inc.
and any state, institution, person or agency, if in the
opinion of the officer of the Company so acting the adoption
of such resolutions is necessary or advisable, and the
Secretary of the Company is hereby directed to
9
<PAGE> 10
insert a copy thereof in the minute book of the Company
following the minutes of this meeting and certify the same as
having been duly adopted thereby; and
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 acts and deeds of the Company; and
RESOLVED: that the officers of the Company be, and each of
them with full power to act without the others is, hereby
authorized and directed to pay such fees and expenses and to
execute and deliver such agreements, instruments and documents
and to do all such other acts and things as they, or any of
them, shall deem necessary or advisable to effectuate the
transactions provided for herein in accordance with the
purposes and intent of the foregoing resolutions.
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
"Company"); that I have custody of the official records of the Company; and
that the foregoing is a true, correct, and complete copy of the resolutions
duly adopted on the 26th day of February, 1996, by Written Action Taken Without
a Meeting of the Board of Directors of the Company and that said resolutions
are valid and binding, and have not been amended, modified or rescinded, and
are in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand as such Secretary and affixed
the seal of the Company on the 15th day of March, 1996.
/s/ David M. Schneider
-----------------------------------
SEAL David M. Schneider, Secretary
10
<PAGE> 1
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617)654-3253
(Name, address and telephone number of agent for service)
---------------------
THE PROGRESSIVE CORPORATION
(Exact name of obligor as specified in its charter)
OHIO 34-0963169
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6300 WILSON MILLS ROAD
MAYFIELD VILLAGE, OHIO 44143
(Address of principal executive offices) (Zip Code)
--------------------
DEBT SECURITIES
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN
EFFECT.
A copy of the Articles of Association of the trustee, as now
in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee
to commence business was necessary or issued is on file with
the Securities and Exchange Commission as Exhibit 2 to
Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940)
and is incorporated herein by reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE
TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS SPECIFIED
IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe, Inc.
(File No. 22-17940) and is incorporated herein by reference
thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4
to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Eastern
Edison Company (File No. 33-37823) and is incorporated herein
by reference thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS
IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of the
Act is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility and
Qualification which relates to matters peculiarly within the knowledge of the
obligor or any underwriter for the obligor, the trustee has relied upon
information furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Boston
and The Commonwealth of Massachusetts, on the 12th day of March, 1996.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Ruth A. Smith
----------------------------
RUTH A. SMITH
ASSISTANT VICE PRESIDENT
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by The
Progressive Corporation of its Debt Securities, we hereby consent that reports
of examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Ruth A. Smith
---------------------------------
Ruth A. Smith
ASSISTANT VICE PRESIDENT
DATED: MARCH 12, 1996
3
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business December
31, 1995, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
Dollars
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ....... 1,331,827
Interest-bearing balances ................................ 5,971,326
Securities ........................................................ 6,325,054
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ...................... 5,436,994
Loans and lease financing receivables:
Loans and leases, net of unearned income .... 4,308,339
Allowance for loan and lease losses ......... 63,491
Loans and leases, net of unearned income and allowances .. 4,244,848
Assets held in trading accounts ................................... 1,042,846
Premises and fixed assets ......................................... 374,362
Other real estate owned ........................................... 3,223
Investments in unconsolidated subsidiaries ........................ 31,624
Customers' liability to this bank on acceptances outstanding ...... 57,472
Intangible assets ................................................. 68,384
Other assets ...................................................... 670,058
----------
Total assets ...................................................... 25,558,018
==========
LIABILITIES
Deposits:
In domestic offices ...................................... 6,880,231
Noninterest-bearing ................ 4,728,115
Interest-bearing ................... 2,152,116
In foreign offices and Edge subsidiary ................... 9,607,427
Noninterest-bearing ................ 28,265
Interest-bearing ................... 9,579,162
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ...................... 5,913,969
Demand notes issued to the U.S. Treasury and Trading Liabilities .. 530,406
Other borrowed money .............................................. 493,191
Bank's liability on acceptances executed and outstanding .......... 57,387
Other liabilities ................................................. 620,287
----------
Total liabilities ................................................. 24,102,898
----------
EQUITY CAPITAL
Common stock ...................................................... 29,176
Surplus ........................................................... 228,448
Undivided profits ................................................. 1,197,496
----------
Total equity capital .............................................. 1,455,120
----------
Total liabilities and equity capital .............................. 25,558,018
==========
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
