<PAGE> 1
As filed with the Securities and Exchange Commission on May 1, 1998
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
THE PROGRESSIVE CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 34-0963169
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
6300 Wilson Mills Road, Mayfield Village, Ohio 44143
(Address of Principal Executive Offices) (Zip Code)
THE PROGRESSIVE CORPORATION 1998 DIRECTORS' STOCK OPTION PLAN
(Full title of the plan)
David M. Schneider, Secretary
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
(Name and address of agent for service)
(440) 461-5000
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
Title of Proposed maximum Proposed maximum
Securities to be Amount to be offering price per aggregate offering Amount of
registered registered(1) share(2) price(2) registration fee
- ---------------------------------------------------------------------------------------------------------------------
Common Shares, 200,000 $131.75 $26,350,000 $7,773.25
$1.00 par value
- -------------------- ---------------------- -------------------------- ------------------------ ---------------------
<FN>
- ---------------------------------
1 Pursuant to Rule 416(a), the amount of securities registered under this
Registration Statement shall include an indeterminate number of additional
Common Shares that may become issuable as a result of stock splits, stock
dividends or similar transactions pursuant to the anti-dilution provisions
of the Plan.
2 The registration fee has been calculated pursuant to Rules 457(c) and (h)
based on the average of the high and low prices of such Common Shares
reported in the consolidated reporting system on April 28, 1998.
</TABLE>
1
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PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
- -------------------------------------------------
The following documents filed with the Securities and Exchange
Commission (the "Commission") by the Registrant are incorporated by reference
into this Registration Statement:
(1) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, filed with the Commission on March 27, 1998, as
amended by the Registrant's Form 10-K/A-No.1 filed with the Commission
on March 30, 1998;
(2) All other reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (the "1934 Act") since the
end of the fiscal year covered by the report referred to in (1) above;
and
(3) The description of the Common Shares contained in the Registrant's
Registration Statement filed on Form 10 under the 1934 Act on file with
the Commission and any amendment or report filed for the purpose of
updating such description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the 1934 Act subsequent to the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered hereunder have been sold, or which de-registers all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
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Article VI of the Code of Regulations of the Registrant provides for
indemnification of any director, officer or employee in certain instances, as
permitted under Section 1701.13(E) of the Ohio Revised Code, against any
expenses, judgments, decrees, fines, penalties or amounts paid in settlement in
connection with the defense of any action, suit or proceeding, criminal or
civil, to which he was, is or may be a party by reason of his status as such
director, officer or employee.
A director, officer or employee is only entitled to indemnification if
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
Registrant's Code of Regulations (i) by the directors of the Registrant acting
at a meeting at which a quorum consisting of directors who neither were nor are
parties to or threatened with any such action, suit or proceeding is present, or
(ii) by the shareholders of the Registrant at a meeting held for such purpose by
the affirmative vote of the holders of shares entitling them to exercise a
majority of the voting power of the Registrant on such proposal or without a
meeting by the written consent of the holders of shares entitling them to
exercise two-thirds of the voting power on such proposal, that such director,
officer or employee (a) was not, and has not been adjudicated to have been,
negligent or guilty of misconduct in the performance of his duty to the
Registrant, (b) acted in good faith and in a manner he reasonably believed to be
in the best interest of the Registrant and (c) in any matter the subject of a
criminal action, suit or proceeding, had no reasonable cause to believe that his
conduct was unlawful.
The expenses of each director, officer or employee incurred in
defending any such action, suit or proceeding may be paid by the Registrant as
they are incurred in advance of the final disposition of such action, suit or
proceeding, as authorized by the Board of Directors 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 Registrant.
Additionally, Section 1701.13(E)(5)(a) of the Ohio Revised Code
provides that, unless prohibited by specific reference in a corporation's
articles of incorporation or code of regulations (which prohibition is not
contained in the Registrant's Articles of Incorporation or Code of Regulations),
a corporation shall pay a director's expenses, including attorney's fees, as
such expenses are incurred, in defending an action, suit or proceeding brought
against him in such capacity, whether such action, suit or proceeding is brought
by a third party or by or in the right of the corporation;
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<PAGE> 3
provided the director delivers to the corporation an undertaking to (a) repay
such amount if it is proved by clear and convincing evidence in a court of
competent jurisdiction that his action or failure to act was undertaken with
deliberate intent to injure the corporation or with reckless disregard for the
best interests of the corporation and (b) reasonably cooperate with the
corporation in such action, suit or proceeding.
Section 1701.13(E)(7) of the Ohio Revised Code provides that a
corporation may purchase insurance or furnish similar protection for any
director, officer or employee against any liability asserted against him in any
such capacity, whether or not the corporation would have power to indemnify him
under Ohio law. Such insurance may be purchased from or maintained with a person
in which the Registrant has a financial interest.
The Registrant maintains directors and officers liability insurance in
the amount of $20,000,000 under a policy issued by a wholly-owned subsidiary of
the Registrant. The risks covered by such policy include certain liabilities
under the securities laws.
Item 8. EXHIBITS.
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4(a) The Progressive Corporation 1998 Directors' Stock Option Plan
4(b) Form of Directors' Stock Option Agreement
4(c) Amended Articles of Incorporation, as amended, of the Registrant
4(d) Code of Regulations of the Registrant (incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997, as filed with the Commission on May 15, 1997; see Exhibit 3
therein)
5 Opinion of Baker & Hostetler LLP
23(a) Consent of Coopers & Lybrand L.L.P., Independent Accountants
23(b) Consent of Baker & Hostetler LLP (included in Exhibit 5)
24(a) Powers of Attorney
24(b) Resolutions of the Board of Directors of the Registrant as to Power of
Attorney, certified by Secretary of the Registrant
Item 9. UNDERTAKINGS.
- ----------------------
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the 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 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
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<PAGE> 4
(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) do not apply if the
information required to be included in a
post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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<PAGE> 5
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Mayfield Village, Ohio, on May 1, 1998.
THE PROGRESSIVE CORPORATION
By: /s/ David M. Schneider
-------------------------------
David M. Schneider, Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on May 1, 1998.
Signature Title
Peter B. Lewis* Chairman, President, Director and
- ----------------------- Principal Executive Officer
Peter B. Lewis
Charles B. Chokel* Treasurer and Principal Financial Officer
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Charles B. Chokel
Jeffrey W. Basch* Principal Accounting Officer
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Jeffrey W. Basch
Milton N. Allen* Director
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Milton N. Allen
B. Charles Ames* Director
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B. Charles Ames
Charles A. Davis* Director
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Charles A. Davis
Stephen R. Hardis* Director
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Stephen R. Hardis
Janet Hill* Director
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Janet Hill
Norman S. Matthews* Director
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Norman S. Matthews
Donald B. Shackelford* Director
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Donald B. Shackelford
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<PAGE> 6
Paul B. Sigler* Director
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Paul B. Sigler
* David M. Schneider, by signing his name hereto, does sign this document on
behalf of the persons indicated above pursuant to powers of attorney duly
executed by such persons and filed as an exhibit to this Registration
Statement.
/s/ David M. Schneider
- -----------------------
David M. Schneider
Attorney-in-fact
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EXHIBIT INDEX
-------------
EXHIBIT DESCRIPTION
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4(a) The Progressive Corporation 1998
Directors' Stock Option Plan
4(b) Form of Directors' Stock Option
Agreement
4(c) Amended Articles of Incorporation, as
amended, of the Registrant
4(d) Code of Regulations of the Registrant
(incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1997, as
filed with the Commission on May 15,
1997; see Exhibit 3 therein)
5 Opinion of Baker & Hostetler LLP
23(a) Consent of Coopers & Lybrand L.L.P.,
Independent Accountants
23(b) Consent of Baker & Hostetler LLP (included
in Exhibit 5)
24(a) Powers of Attorney
24(b) Resolutions of the Board of Directors of the
Registrant as to Power of Attorney, certified
by Secretary of the Registrant
<PAGE> 1
EXHIBIT 4(a)
------------
The Progressive Corporation 1998 Directors' Stock Option Plan
<PAGE> 2
THE PROGRESSIVE CORPORATION
1998 DIRECTORS' STOCK OPTION PLAN
SECTION 1. PURPOSE; DEFINITIONS.
The purposes of The Progressive Corporation 1998 Directors' Stock
Option Plan (the "Plan") are to enable The Progressive Corporation (the
"Company") to attract, retain and reward directors of the Company and to
strengthen the mutuality of interests between such directors and the Company's
shareholders by offering such directors options to purchase Common Shares of the
Company.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Award" means any award of Stock Options under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
(d) "Committee" means the Committee referred to in Section 2 hereof.
(e) "Company" means The Progressive Corporation, an Ohio
corporation, or any successor corporation.
(f) "Disability" means disability as determined under procedures
established by the Committee for purposes of the Plan, or in the absence of
the Committee, the Board.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(h) "Fair Market Value" means, as of any given date, the mean
between the highest and lowest quoted selling price, regular way, of the
Stock on such date on the New York Stock Exchange or, if no such sale of
the Stock occurs on the New York Stock Exchange on such date, then such
mean price on the next preceding day on which the Stock was traded. If the
Stock is no longer traded on the New York Stock Exchange, then the Fair
Market Value of the Stock shall be determined by the Committee in good
faith.
(i) "Non-Qualified Stock Option" means any Stock Option that is not
an incentive stock option, within the meaning of Section 422 of the Code or
any successor section thereto.
(j) "Option Term" has the meaning given to such term in Section
4(b)(2).
(k) "Plan" means The Progressive Corporation 1998 Directors' Stock
Option Plan, as amended from time to time.
(l) "Stock" means the Common Shares, $1.00 par value per share, of
the Company.
(m) "Stock Option" or "Option" means any option to purchase shares
of Stock granted pursuant to Section 4.
(n) "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns
stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
In addition, the terms "Change in Control," "Potential Change in
Control" and "Change in Control Price" shall have meanings set forth,
respectively, in Sections 5(b), (c) and (d) below.
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SECTION 2. ADMINISTRATION.
The Plan shall be administered by a Committee of not less than three
directors of the Company, all of whom shall be directors who are "Non-Employee
Directors", as defined in Section 16 of the Exchange Act or the rules and
regulations promulgated thereunder. Such directors shall be appointed by the
Board and shall serve as the Committee at the pleasure of the Board. The
functions of the Committee specified in the Plan shall be exercised by the Board
if and to the extent that no Committee exists which has the authority to so
administer the Plan.
The Committee shall have full power and authority to interpret and
administer the Plan and, subject to Section 4(a) below, full authority to select
the individuals to whom Awards will be granted, and to determine the number of
shares of Stock that may be purchased upon exercise of Awards granted under the
Plan, the consideration, if any, to be paid for such Awards, the timing of such
Awards, the terms and conditions of Awards granted under the Plan and the terms
and conditions of the related agreements which will be entered into with
participants.
The Committee shall have the authority to adopt, alter and repeal
such rules, guidelines and practices governing the Plan as it shall, from time
to time, deem advisable; to interpret the terms and provisions of the Plan and
any Award issued under the Plan (and any agreements relating thereto); to direct
employees of the Company or other advisors to prepare such materials or perform
such analyses as the Committee deems necessary or appropriate; and otherwise to
supervise the administration of the Plan.
Any interpretation and administration of the Plan by the Committee,
and all actions and determinations of the Committee in connection with the Plan,
shall be final, binding and conclusive on the Company, its shareholders, all
participants in the Plan, their respective legal representatives, successors and
assigns, and upon all persons claiming under or through any of them. No member
of the Board or of the Committee shall incur any liability for any action taken
or omitted, or any determination made, in good faith in connection with the
Plan.
SECTION 3. STOCK SUBJECT TO THE PLAN.
(a) AGGREGATE STOCK SUBJECT TO THE PLAN. Subject to adjustment as
provided in Section 3(c) below, the total number of shares of Stock
reserved and available for Awards under the Plan is 200,000. Any Stock
issued hereunder may consist, in whole or in part, of authorized and
unissued shares or treasury shares.
(b) FORFEITURE OR TERMINATION OF AWARDS OF STOCK. If any Award
granted hereunder is forfeited or an Award otherwise terminates or expires
without the issuance of Stock, the unissued Stock that is subject to such
Award shall again be available for distribution in connection with future
Awards under the Plan as set forth in Section 3(a).
(c) ADJUSTMENT.
(1) If the Company (i) pays a dividend or makes a
distribution in shares of Stock, (ii) subdivides or splits its
outstanding Stock into a greater number of shares, or (iii) combines
its outstanding Stock into a smaller number of shares, the aggregate
number of shares of Stock reserved for issuance pursuant to the Plan
and the number and option price of shares of Stock subject to
outstanding Options granted pursuant to the Plan immediately prior
thereto shall be adjusted so that, assuming that Options had been
previously granted for all of the shares of Stock so reserved, the
participants would be entitled to receive for the same aggregate
price that number of shares of Stock which they would have owned
after the happening of any of the events described above had they
exercised all of such Options prior to the happening of such event.
An adjustment made pursuant to this Section 3(c)(1) shall become
effective immediately after the record date
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<PAGE> 4
in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision or
combination.
(2) If the Company reclassifies or changes the Stock (except
for splitting or combining, or changing par value, or changing from
par value to no par value, or changing from no par value to par
value) or participates in a consolidation or merger (other than a
merger in which the Company is the surviving corporation and which
does not result in any reclassification of or change in the Stock
except as stated above), the aggregate number of shares of Stock
reserved for issuance pursuant to the Plan and the number and option
price of shares of Stock subject to outstanding Options granted
pursuant to the Plan immediately prior thereto shall be adjusted so
that, assuming that Options had been previously granted for all the
shares of Stock so reserved, the participants would be entitled to
receive for the same aggregate price that number and type of shares
of capital stock which they would have owned after the happening of
any of the events described above had they exercised all of such
Options prior to the happening of such event.
(3) No adjustment pursuant to this Section 3(c) shall be
required unless such adjustment would require an increase or
decrease of at least 1% in such number or price; PROVIDED, HOWEVER,
that any adjustments which by reason of this Section 3(c)(3) are not
required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section
3(c) shall be made to the nearest cent or to the nearest full share,
as the case may be. Anything in this Section 3(c) to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the option price, in addition to those required by
this Section 3(c), as it in its discretion shall determine to be
advisable in order that any stock dividends or distributions,
subdivisions or splits of shares, distribution of rights to purchase
stock or securities, or a distribution of securities convertible
into or exchangeable for stock hereafter made by the Company to its
stockholders shall not be taxable.
SECTION 4. STOCK OPTIONS.
(a) GRANT. All directors of the Company who are not full time
employees of the Company or any of its Subsidiaries are eligible to be
granted Stock Options under the Plan. The Committee shall determine the
individual directors to whom, and the time or times at which, grants of
Stock Options will be made, the number of shares purchasable under each
Stock Option granted hereunder and the other terms and conditions of the
Stock Options in addition to those set forth in Sections 4(b). Any Stock
Option granted under the Plan shall be in such form as the Committee may
from time to time approve. Stock Options granted under the Plan will be
NonQualified Stock Options.
(b) TERMS AND CONDITIONS. Options granted under the Plan shall be
evidenced by Option agreements substantially in the form of Exhibit A
hereto (or such other form as the Committee may approve), shall be subject
to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable:
(1) OPTION PRICE. The option price per share of Stock
purchasable under a Stock Option shall be equal to the Fair Market
Value of the Stock on the date the Option is granted.
(2) OPTION TERM. The term of each Stock Option shall be
determined by the Committee and may not exceed ten (10) years from
the date the Option is granted ("Option Term").
(3) EXERCISE. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be
determined by the Committee at or after
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<PAGE> 5
grant; provided, however, that, unless otherwise provided herein or
determined by the Committee at or after grant, no Stock Option shall
be exercisable prior to six months and one day following the date of
grant. If any Stock Option is exercisable only in installments or
only after a specified vesting date, the Committee may accelerate or
waive, in whole or in part, such installment exercise provisions or
vesting date at any time at or after grant based on such factors as
the Committee shall determine, in its sole discretion.
(4) METHOD OF EXERCISE. Subject to whatever installment
exercise provisions apply with respect to such Stock Option and, if
applicable, the six month and one day holding period set forth in
Section 4(b)(3), a Stock Option may be exercised, in whole or in
part, at any time during the related Option Term, by giving the
Company written notice of exercise specifying the number of shares
of Stock to be purchased.
Such notice shall be accompanied by payment in full of
the option price of the shares of Stock for which the Option is
being exercised, in cash or by check or such other instrument as the
Committee may accept. Unless otherwise determined by the Committee,
in its sole discretion, at or after grant, payment, in full or in
part, of the option price may be made in the form of unrestricted
Stock then owned by the participant or Stock that is part of the
Stock Option being exercised. The value of each share of such Stock
so surrendered or withheld shall be 100% of the Fair Market Value of
the Stock on the date the Option is exercised.
No Stock shall be issued pursuant to an exercise of an
Option until full payment has been made. A participant shall not
have rights to dividends or any other rights of a shareholder with
respect to any Stock subject to an Option unless and until the
participant has given written notice of exercise, has paid in full
for such shares, has given, if requested, the representation
described in Section 8(a) and such shares have been issued to such
participant.
(5) NON-TRANSFERABILITY OF OPTIONS. Stock Options shall not be
transferable by the participant, and all Stock Options shall be
exercisable during the participant's lifetime only by the
participant or, subject to Section 4(b)(7), by the participant's
authorized legal representative if the participant is unable to
exercise an Option as a result of the participant's Disability.
(6) TERMINATION BY DEATH. If any participant dies while
holding unexercised Stock Options, any Stock Option held by such
participant at the time of his or her death may thereafter be
exercised, to the extent such Option was exercisable at the time of
death or would have become exercisable within one year from the time
of death had the participant continued to fulfill all conditions of
the Option during such period, by the estate of the participant
(acting through its fiduciary) for a period of one year (or such
other period as the Committee may specify at or after grant) from
the date of such death, regardless of the term of the Stock Option
remaining at the date of the participant's death.
The balance of the Stock Option shall be forfeited.
(7) TERMINATION BY REASON OF DISABILITY. If a participant is
unable to serve as a director by reason of Disability, any Stock
Option then held by such participant may thereafter be exercised, to
the extent such Option was exercisable at the inception of such
Disability or would have become exercisable within one year
thereafter had the participant continued to fulfill all conditions
of the Option during such period, by the participant or by the
participant's duly authorized legal representative if the
participant is unable to exercise the Option as a result of his or
her Disability, for a period of one year (or such other period as
the Committee may specify at or after grant) from the date of the
inception of such Disability; provided, however, that in no event
may any such Option be exercised prior to six months and one day
from the date of grant; and provided, further, that if the
participant dies within such one-year period (or such other period
as the Committee shall specify at or after grant), any unexercised
Stock Option held by such
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<PAGE> 6
participant at the time of his or her death shall thereafter be
exercisable by the estate of the participant (acting through its
fiduciary) to the same extent to which it was exercisable
immediately prior to the time of death for a period of one year ( or
such other period as the Committee may specify at or after grant)
from the date of the inception of such Disability. The balance of
the Stock Option shall be forfeited.
(c) BUYOUT PROVISIONS. The Committee may at any time buy out, for a
payment in cash or Stock, an Option previously granted, based on such terms
and conditions as the Committee shall establish and agree upon with the
participant, provided that no such transaction shall be structured or
effected in a manner that would violate, or result in any liability on the
part of the participant under, Section 16 of the Exchange Act or the rules
and regulations promulgated thereunder.
SECTION 5. CHANGE IN CONTROL PROVISIONS.
(a) IMPACT OF EVENT. In the event of: (1) a "Change in Control" as
defined in Section 5(b), or (2) a "Potential Change in Control" as defined
in Section 5(c), the value of all outstanding Awards shall be cashed out on
the basis of the "Change in Control Price" as defined in Section 5(d) as of
the date such Change in Control or such Potential Change in Control is
determined to have occurred.
(b) DEFINITION OF CHANGE IN CONTROL. For purposes of this Section 5,
a "Change in Control" means the happening of any of the following:
(1) When any "person" as defined in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) of the Exchange Act,
but excluding the Company and any Subsidiary and any employee
benefit plan sponsored or maintained by the Company or any
Subsidiary (including any trustee of such plan acting as trustee),
directly or indirectly, becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act, as amended from time to time),
of securities of the Company representing twenty percent (20%) or
more of the combined voting power of the Company's then outstanding
securities; provided, however, that the terms "person" and "group"
shall not include any "Excluded Director"; and the term "Excluded
Director" means any director who, on the effective date of the Plan,
is the beneficial owner of or has the right to acquire an amount of
Stock equal to five percent (5%) or more of the number of shares of
Stock outstanding on such effective date; and further provided that,
unless otherwise determined by the Board or any committee thereof,
the terms "person" and "group" shall not include any entity or group
of entities that has acquired Stock of the Company in the ordinary
course of business for investment purposes only and not with the
purpose or effect of changing or influencing the control of the
Company, or in connection with or as a participant in any
transaction having such purpose or effect, ("Investment Intent"), as
demonstrated by the filing by such entity or group of a statement on
Schedule 13G (including amendments thereto) pursuant to Regulation
13D under the Exchange Act, as long as such entity or group
continues to hold such Stock with an Investment Intent;
(2) When, during any period of 24 consecutive months during
the existence of the Plan, the individuals who, at the beginning of
such period, constitute the Board (the "Incumbent Directors") cease
for any reason other than death to constitute at least a majority
thereof; provided, however, that a director who was not a director
at the beginning of such 24-month period shall be deemed to have
satisfied such 24-month requirement (and be an Incumbent Director)
if such director was elected by, or on the recommendation of or with
the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors either actually (because they were
directors at the beginning of such 24-month period) or by prior
operation of this Section 5(b)(2); or
5
<PAGE> 7
(3) The occurrence of a transaction requiring shareholder
approval for the acquisition of the Company by an entity other than
the Company or a Subsidiary through purchase of assets, by merger or
otherwise;
provided, however, a change in control shall not be deemed to be a Change
in Control for purposes of the Plan if the Board had approved such change
prior to either (i) the occurrence of any of the events described in
Section 5(b)(1), (2), (3) or 5(c)(1), or (ii) the commencement by any
person other than the Company or a Subsidiary of a tender offer for Stock.
(c) DEFINITION OF POTENTIAL CHANGE IN CONTROL. For purposes of this
Section 5, a "Potential Change in Control" means the happening of any one
of the following:
(1) The approval by shareholders of an agreement by the
Company, the consummation of which would result in a Change in
Control of the Company as defined in Section 5(b); or
(2) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than the Company
or a Subsidiary or any Company employee benefit plan (including any
trustee of such plan acting as such trustee)) of securities of the
Company representing five percent (5%) or more of the combined
voting power of the Company's outstanding securities and the
adoption by the Board of a resolution to the effect that a Potential
Change in Control of the Company has occurred for purposes of this
Plan.
(d) CHANGE IN CONTROL PRICE. For purposes of this Section 5, "Change
in Control Price" means the highest price per share paid in any transaction
reported on the New York Stock Exchange Composite Index, or paid or offered
in any bona fide transaction related to a Change in Control or Potential
Change in Control of the Company, at any time during the 60-day period
immediately preceding the occurrence of the Change in Control (or, where
applicable, the occurrence of the Potential Change in Control event).
SECTION 6. AMENDMENTS AND TERMINATION.
Subject to the following sentence, the Board may at any time, in its
sole discretion, amend, alter or discontinue the Plan, or amend the terms of any
outstanding Stock Option granted under the Plan, but no such amendment,
alteration or discontinuation shall be made which would impair the rights of a
participant under an Award theretofore granted, without the participant's
consent. Notwithstanding the foregoing, no such amendment or alteration shall be
made which would make the exemption from Section 16(b) of the Exchange Act
provided by Rule 16b-3 thereunder unavailable to any participant holding an
Award or which would result in any liability on the part of any participant
under Section 16(b) of the Exchange Act.
SECTION 7. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments not yet made to a participant by the
Company, nothing contained herein shall give any such participant any rights
that are greater than those of a general creditor of the Company.
SECTION 8. GENERAL PROVISIONS.
(a) The Company may require each participant acquiring Stock
pursuant to an Option under the Plan (i) to represent and warrant to and
agree with the Company in writing that the participant is acquiring the
Stock for investment and without a view to the distribution thereof, and
(ii) to make such additional representations, warranties and agreements
with respect to the investment intent of such participant as the Company
may request. The certificates for such
6
<PAGE> 8
shares may include any legend which the Company deems appropriate to
reflect any restrictions on transfer.
All shares of Stock or other securities delivered under the Plan
shall be subject to such stop-transfer orders and other restrictions as the
Company may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Stock is then listed, and any applicable federal or state
securities law, and the Company may cause a legend or legends to be put on
any certificates for such shares to make appropriate reference to such
restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements
may be either generally applicable or applicable only in specific cases.
(c) No later than the date as of which an amount first becomes
includable in the gross income of the participant for federal income tax
purposes with respect to any Award under the Plan, the participant shall
pay to the Company, or make arrangements satisfactory to the Company
regarding the payment of, any federal, state or local taxes or other items
of any kind required by law to be withheld with respect to such amount.
Subject to Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder, withholding obligations may be settled with
unrestricted Stock then owned by the participant or Stock that is issuable
upon the exercise of the Option which gives rise to the withholding
requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements and the Company shall, to the
extent permitted by law, have the right to deduct any such taxes or other
items from any payment of any kind otherwise due to the participant.
(d) The Plan, all Awards made and actions taken thereunder and any
agreements relating thereto shall be governed by and construed in
accordance with the laws of the State of Ohio.
(e) All agreements entered into with participants pursuant to the
Plan shall be subject to the Plan.
(f) The provision of Awards need not be the same with respect to
each participant.
SECTION 9. EFFECTIVE DATE OF PLAN.
The Plan was adopted by the Board on February 6, 1998, subject to
approval by shareholders of the Company in accordance with applicable law. The
Plan will become effective on the date of such shareholder approval.
SECTION 10. TERM OF PLAN.
No Award shall be granted pursuant to the Plan on or after April 24,
2008, but Awards granted prior to such date may extend beyond that date.
7
<PAGE> 1
EXHIBIT 4(b)
------------
Form of Directors' Stock Option Agreement
<PAGE> 2
DIRECTORS' STOCK OPTION AGREEMENT
---------------------------------
This Agreement (the "Agreement") is made as of the _____ day of
______________, ____ between The Progressive Corporation, an Ohio corporation
(the "Company"), and _____________ (the "Optionee"). The Company hereby grants
Optionee an option (the "Option") to purchase _____________ Common Shares, $1.00
par value (the "Common Shares"), of the Company for a purchase price of
____________ ($________) per share (the "Option Price"). The Option has been
granted pursuant to The Progressive Corporation 1998 Directors' Stock Option
Plan (the "Plan") and shall include and be subject to all provisions of the
Plan, which are hereby incorporated herein by reference, and shall be subject to
the following provisions of this Agreement:
1. TERM. The Option shall be exercisable, in whole or part, on and after
______________, _____ but not after 5:00 o'clock p.m., Cleveland time, on
_______________________, _______.
2. METHOD OF EXERCISE. The Option shall be exercisable from time to time by
written notice (in form acceptable to the Company) which shall:
(a) state that the Option is thereby being exercised, the number of Common
Shares with respect to which the Option is being exercised, each person in
whose name any certificates for the Common Shares should be registered and
his or her address and social security number;
(b) be signed by the person or persons entitled to exercise the Option and,
if the Option is being exercised by anyone other than the Optionee, be
accompanied by proof satisfactory to counsel for the Company of the right
of such person or persons to exercise the Option under the Plan and all
applicable laws and regulations; and
(c) be accompanied by such representations, warranties or agreements with
respect to the investment intent of such person or persons exercising the
Option as the Company may request, in form and substance satisfactory to
counsel for the Company.
3. PAYMENT OF PRICE. Upon exercise of the Option, the Company shall deliver
a certificate or certificates for such Common Shares to the specified person or
persons at the specified time upon receipt of the full purchase price for such
Common Shares: (i) by certified or bank cashier's check, or (ii) by delivery of
unrestricted Stock with a Fair Market Value equal to the Option Price, or (iii)
by any other method of payment or combination thereof authorized by the Plan.
4. TRANSFERABILITY. The Option shall not be transferable by the Optionee.
The Option shall be exercisable (subject to any other applicable restrictions on
exercise) only by the Optionee for his or her own account, except in the event
of the death or Disability of the Optionee, in either of which events the Option
shall be exercisable (subject to any other applicable restrictions on exercise)
only by the Optionee's estate (acting through its fiduciary) or, if the Optionee
is unable to exercise the Option as a result of such Disability, by the
Optionee's duly authorized legal representative, respectively.
5. RESTRICTIONS ON EXERCISE. The Option is subject to all restrictions set
forth in this Agreement or in the Plan. As a condition of any exercise of the
Option, the Company may require the Optionee or his successor to make any
representation and warranty to comply with any applicable law or regulation or
to confirm any factual matters reasonably requested by counsel for the Company.
6. TAXES. The Optionee hereby agrees to pay to the Company, in cash or
unrestricted Stock or by any other method authorized under the Plan, any
federal, state or local taxes or other items of any kind required by law to be
withheld with respect to the Option granted hereunder or its exercise. If the
Optionee does not make such payment to the Company, the Company shall have the
right to deduct from any payment of any kind otherwise due to the Optionee from
the Company, any federal, state or local taxes or other items of any kind
required by law to be withheld with respect to the Option, its exercise or the
Common Shares to be purchased by the Optionee under this Agreement.
1
<PAGE> 3
The Option shall not be treated as an incentive stock option under Section 422
or any successor Section thereto of the Internal Revenue Code of 1986, as
amended.
7. DEFINITIONS. Unless otherwise defined in this Agreement, capitalized
terms will have the same meanings given them in the Plan.
THE PROGRESSIVE CORPORATION
DATE OF GRANT: __________ By:___________________________________
ACCEPTANCE OF AGREEMENT
-----------------------
The Optionee hereby: (a) acknowledges receiving a copy of the Plan
Description relating to the Plan, and represents that he/she is familiar with
all provisions of the Plan; (b) accepts this Agreement and the Option granted to
him/her under this Agreement subject to all provisions of the Plan and this
Agreement; and (c) agrees to accept as binding, conclusive and final all
decisions or interpretations of the Company.
Date: ____________________ ________________________________
Optionee
2
<PAGE> 1
EXHIBIT 4(c)
------------
Amended Articles of Incorporation, as amended, of the Registrant
<PAGE> 2
CERTIFICATE
OF
AMENDED ARTICLES OF INCORPORATION
OF
THE PROGRESSIVE CORPORATION
PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER,
Secretary, of The Progressive Corporation, an Ohio corporation (the
"Corporation"), with its principal office at Mayfield Village, Cuyahoga County,
Ohio, do hereby certify that on April 20, 1984, in order to consolidate the
Corporation's existing Articles of Incorporation and all previously adopted
amendments thereto that were in force at that time, the directors of the
Corporation, at a meeting duly called and held, duly adopted, pursuant to the
authority of Ohio Code Section 1701.72(B), the Amended Articles of Incorporation
attached hereto as Exhibit I, to supersede and take the place of the existing
Articles of Incorporation and all amendments thereto. A true and correct copy of
the resolution as adopted by the directors of the Corporation is attached hereto
as Exhibit II.
IN WITNESS WHEREOF, said PETER B. LEWIS, Chairman of the Board, and
DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, acting for and in
behalf of said Corporation, have hereunto subscribed their names this 20th day
of April, 1984.
/s/ Peter B. Lewis
--------------------------------------
Peter B. Lewis, Chairman of the Board
/s/ David M. Schneider
--------------------------------------
David M. Schneider, Secretary
<PAGE> 3
EXHIBIT I
AMENDED ARTICLES OF INCORPORATION
OF
THE PROGRESSIVE CORPORATION
FIRST: The name of said corporation shall be THE PROGRESSIVE
CORPORATION.
SECOND: The place in the State of Ohio where its principal office is
to be located is Mayfield Village, Cuyahoga County.
THIRD: The purpose of the corporation is to engage in any lawful act
or activity for which corporations may be formed under Sections 1701.01 to
1701.98, inclusive, of the Ohio Revised Code.
FOURTH: SECTION 1. AUTHORIZED SHARES. The aggregate number of shares
which the corporation shall have authority to issue is 22,000,000 shares,
consisting of 2,000,000 Non-Voting Preferred Shares, without par value, and
20,000,000 Common Shares, $1.00 par value.
SECTION 2. ISSUANCE OF PREFERRED SHARES. The Board of Directors is
authorized at any time, and from time to time, to provide for the issuance of
Non-Voting Preferred Shares in one or more series, and to determine the
designations, preferences, limitations and relative or other rights of the
Non-Voting Preferred Shares or any series thereof. For each series, the Board of
Directors shall determine, by resolution or resolutions adopted prior to the
issuance of any shares thereof, the designations, preferences, limitations and
relative or other rights thereof, including but not limited to the following
relative rights and preferences, as to which there may be variations among
different series:
A. the division of such shares into series and the designation and
authorized number of shares of each series,
B. the dividend rate,
C. the dates of payment of dividends and the dates from which they
are cumulative,
D. liquidation price,
E. redemption rights and price,
F. sinking fund requirements,
<PAGE> 4
G. conversion rights, and
H. restrictions on the issuance of such shares.
Prior to the issuance of any shares of a series, but after adoption by
the Board of Directors of the resolution establishing such series, the
appropriate officers of the corporation shall file such documents with the State
of Ohio as may be required by law including, without limitation, an amendment to
these Articles of Incorporation.
SECTION 3. COMMON SHARES. Each Common Share shall entitle the holder
thereof to one vote, in person or by proxy, at any and all meetings of the
shareholders of the corporation, on all meetings of the shareholders of the
corporation, on all propositions before such meetings. Each Common Share shall
be entitled to participate equally in such dividends as may be declared by the
Board of Directors out of funds legally available therefor, and to participate
equally in all distributions of assets upon liquidation.
FIFTH: No holder of shares of the corporation of any class shall be
entitled as such, as a matter of right, to subscribe for or purchase shares of
any class, now or hereafter authorized, or to subscribe for or purchase
securities convertible into or exchangeable for shares of the corporation or to
which shall be attached or appertain any warrants or rights entitling the holder
thereof to subscribe for or purchase shares, except such rights of subscription
or purchase, if any, for such considerations and upon such terms and conditions
as its Board of Directors from time to time may determine.
SIXTH: Except as otherwise provided in these Articles of Incorporation
or the Code of Regulations of the corporation, notwithstanding any provisions in
Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code, now or
hereafter in effect, requiring for any purpose the vote, consent, waiver or
release of the holders of a designated proportion (but less than all) of the
share of the corporation or any of particular class or classes of shares, as the
case may be, the vote, consent, waiver or release of the holders of shares
entitling them to exercise a majority of the voting power of the shares of the
corporation or of any class or classes of shares, as the case may be, shall be
required and sufficient for any such purpose, except that the affirmative vote
of the holders of record of 75 percent of the shares having voting power with
respect to any such proposal shall be required to amend, alter, change or repeal
Article NINTH of these Articles or the provisions of this Article SIXTH dealing
with the amendment, alteration, change or repeal of Article NINTH.
SEVENTH: To the extent permitted by law, the corporation, by action of
its Board of Directors, may purchase or otherwise acquire shares of any class
issued by it at such times, for such considerations and upon such terms and
conditions as its Board of Directors may determine.
<PAGE> 5
EIGHTH: These Amended Articles of Incorporation shall supersede and
take the place of the heretofore existing Articles of Incorporation of the
corporation and all amendments thereto.
NINTH: The affirmative vote of the holders of record of 75 percent of
the shares having voting power with respect to any such proposal AND the
affirmative vote of a majority of such holders of record other than shares held
or beneficially owned by a "Related Person" (as hereinafter defined) shall be
required for the approval or authorization of any "Business Combination" (as
hereinafter defined) of the corporation with any Related Person; provided,
however, that the 75 percent voting requirement and the majority voting
requirement of holders of record of shares other than a Related Person shall not
be applicable if:
1. A majority of the "Continuing Directors" of the Corporation (as
hereinafter defined) have approved the Business Combination; or
2. The Business Combination is a merger or consolidation and the cash
or fair market value of the property, securities or other consideration to
be received per share by holders of Common Shares of the corporation in the
Business Combination is not less than the highest per share price (with
appropriate adjustments for recapitalization and for share splits, share
dividends and like distributions), paid by the Related Person in acquiring
any of its holdings of the corporation's Common Shares.
For the purposes of this Article NINTH:
(a) The term "Business Combination" shall mean (i) any
merger or consolidation of the corporation or a subsidiary with or
into a Related Person, (ii) any sale, lease, exchange, transfer or
other disposition, including without limitation, a mortgage or any
other security device, of all or any "Substantial Part" (as
hereinafter defined) of the assets either of the corporation
(including without limitation any voting securities of a subsidiary)
or of a subsidiary, to a Related Person, (iii) any merger or
consolidation of a Related Person with or into the corporation or a
subsidiary of the corporation, (iv) any sale, lease, exchange,
transfer or other disposition of all or any Substantial Part of the
assets of a Related Person to the corporation or a subsidiary of the
corporation, (v) the issuance of any securities of the corporation or
a subsidiary of the corporation to a Related Person, (vi) any
recapitalization that would have the effect of increasing the voting
power of a Related Person, and (vii) any agreement, contract or other
arrangement providing for any of the transactions described in this
definition of Business Combination.
(b) The term "Related Person" shall mean and include any
individual, corporation, partnership or other person or entity which,
together with its "Affiliates" and "Associates" (as defined on
<PAGE> 6
September 1, 1982 at Rule 12b-2 under the Securities Exchange Act of
1934), "Beneficially Owns" (as defined on September 1, 1982 at Rule
13d-3 under the Securities Exchange Act of 1934) in the aggregate 20
percent or more of the outstanding Common Shares of the corporation,
and any Affiliate or Associate of any such individual, corporation,
partnership or other person or entity.
(c) The term "Substantial Part" shall mean more than 30
percent of the fair market value of the total assets of the
corporation in question, as of the end of its most recent fiscal year
ending prior to the time the determination is being made.
(d) Without limitation, any Common Shares of the corporation
that any Related Person has the right to acquire pursuant to any
agreement, or upon exercise of conversion rights, warrants or options,
or otherwise, shall be deemed beneficially owned by the Related
Person.
(e) For the purposes of sub-paragraph (2) of this Article
NINTH, the term "other consideration to be received" shall include,
without limitation, Common Shares of the corporation retained by its
existing public shareholders in the event of a Business Combination in
which the corporation is the surviving corporation.
(f) The term "Continuing Director" shall mean a director who
was a member of the Board of Directors of the corporation immediately
prior to the time that the Related Person involved in a Business
Combination became a Related Person.
<PAGE> 7
EXHIBIT II
THE PROGRESSIVE CORPORATION
DIRECTORS RESOLUTION
RESOLVED, that to consolidate the Company's existing Articles
of Incorporation and all previously adopted amendments thereto, the Amended
Articles of Incorporation presented to this meeting are hereby adopted to
supersede and take the place of the existing Articles and all amendments
thereto.
<PAGE> 8
CERTIFICATE OF AMENDMENT
TO
THE AMENDED ARTICLES OF INCORPORATION
OF
THE PROGRESSIVE CORPORATION
PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER,
Secretary, of The Progressive Corporation, an Ohio corporation for profit with
its principal office at Mayfield Village, Cuyahoga County, Ohio (the "Company"),
do hereby certify that a meeting of the shareholders of the Company was duly
called and held on April 25, 1986, at which meeting a quorum of the shareholders
was present in person or by proxy, and by the affirmative vote of the holders of
shares entitling them to exercise a majority of the voting power of the Company
on proposals to amend the Company's Amended Articles of Incorporation, the
following resolution was adopted:
RESOLVED, that Article FOURTH of the Company's Amended Articles of
Incorporation be, and the same hereby is, amended to be and read in its
entirety as follows:
FOURTH: SECTION 1. AUTHORIZED SHARES. The aggregate number of
shares which the corporation shall have authority to issue is
52,000,000 shares, consisting of 2,000,000 Non-Voting Preferred
Shares, without par value, and 50,000,000 Common Shares, $1.00 par
value.
SECTION 2. ISSUANCE OF PREFERRED SHARES. The Board of Directors
is authorized at any time, and from time to time, to provide for the
issuance of Non-Voting Preferred Shares in one or more series, and to
determine the designations, preferences, limitations and relative or
other rights of the Non-Voting Preferred Shares or any series thereof.
For each series, the Board of Directors shall determine, by resolution
or resolutions adopted prior to the issuance of any shares thereof,
the designations, preferences, limitations and relative or other
rights thereof, including but not limited to the following relative
rights and preferences, as to which there may be variations among
different series:
A. the division of such shares into series and the designation and
authorized number of shares of each series,
B. the dividend rate,
C. the dates of payment of dividends and the dates from which they
are cumulative,
D. liquidation price,
<PAGE> 9
E. redemption rights and price,
F. sinking fund requirements,
G. conversion rights, and
H. restrictions on the issuance of such shares.
Prior to the issuance of any shares of a series, but after adoption by
the Board of Directors of the resolution establishing such series, the
appropriate officers of the corporation shall file such documents with
the State of Ohio as may be required by law including, without
limitation, an amendment to these Amended Articles of Incorporation.
SECTION 3. COMMON SHARES. Each Common Share shall entitle the
holder thereof to one vote, in person or by proxy, at any and all
meetings of the shareholders of the corporation, on all propositions
before such meetings. Each Common Share shall be entitled to
participate equally in such dividends as may be declared by the Board
of Directors out of funds legally available therefor, and to
participate equally in all distributions of assets upon liquidation.
IN WITNESS WHEREOF, said PETER B. LEWIS, Chairman of the Board, and
DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, acting for and in
behalf of said corporation, have hereunto subscribed their names this 25th day
of April, 1986.
/s/ Peter B. Lewis
--------------------------------
Peter B. Lewis, Chairman
/s/ David M. Schneider
--------------------------------
David M. Schneider, Secretary
<PAGE> 10
CERTIFICATE OF AMENDMENT
TO
THE AMENDED ARTICLES OF INCORPORATION
OF
THE PROGRESSIVE CORPORATION
PETER B. LEWIS, Chairman of the Board, and DAVID M. SCHNEIDER,
Secretary, of The Progressive Corporation, an Ohio corporation for profit with
its principal office at 6300 Wilson Mills Road, Mayfield Village, Cuyahoga
County, Ohio (the "Company"), do hereby certify that a meeting of the
shareholders of the Company was duly called and held on April 24, 1987, at which
meeting a quorum of the shareholders was present in person or by proxy, and by
the affirmative vote of the holders of shares entitling them to exercise a
majority of the voting power of the Company on proposals to amend the Company's
Amended Articles of Incorporation, the following resolution was adopted:
RESOLVED, that Article FOURTH of the Company's Amended Articles of
Incorporation be, and the same hereby is, amended to be and read in its
entirety as follows:
FOURTH: SECTION 1. AUTHORIZED SHARES. The aggregate number of
shares which the corporation shall have authority to issue is
110,000,000 shares, consisting of 10,000,000 Non-Voting Preferred
Shares, without par value, and 100,000,000 Common Shares, $1.00 par
value.
SECTION 2. ISSUANCE OF PREFERRED SHARES. The Board of Directors
is authorized at any time, and from time to time, to provide for the
issuance of Non-Voting Preferred Shares in one or more series, and to
determine the designations, preferences, limitations and relative or
other rights of the Non-Voting Preferred Shares or any series thereof.
For each series, the Board of Directors shall determine, by resolution
or resolutions adopted prior to the issuance of any shares thereof,
the designations, preferences, limitations and relative or other
rights thereof, including but not limited to the following relative
rights and preferences, as to which there may be variations among
different series:
A. the division of such shares into series and the designation and
authorized number of shares of each series,
B. the dividend rate,
C. the dates of payment of dividends and the dates from which they
are cumulative,
<PAGE> 11
D. liquidation price,
E. redemption rights and price,
F. sinking fund requirements,
G. conversion rights, and
H. restrictions on the issuance of such shares.
Prior to the issuance of any shares of a series, but after adoption by
the Board of Directors of the resolution establishing such series, the
appropriate officers of the corporation shall file such documents with
the State of Ohio as may be required by law including, without
limitation, an amendment to these Amended Articles of Incorporation.
SECTION 3. COMMON SHARES. Each Common Share shall entitle the
holder thereof to one vote, in person or by proxy, at any and all
meetings of the shareholders of the corporation, on all propositions
before such meetings. Each Common Share shall be entitled to
participate equally in such dividends as may be declared by the Board
of Directors out of funds legally available therefor, and to
participate equally in all distributions of assets upon liquidation.
IN WITNESS WHEREOF, said PETER B. LEWIS, Chairman of the Board, and
DAVID M. SCHNEIDER, Secretary, of The Progressive Corporation, acting for and in
behalf of said corporation, have hereunto subscribed their names this 24th day
of April, 1987.
/s/ Peter B. Lewis
--------------------------------
Peter B. Lewis, Chairman
/s/ David M. Schneider
--------------------------------
David M. Schneider, Secretary
<PAGE> 12
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
THE PROGRESSIVE CORPORATION
PETER B. LEWIS, President, and DAVID M. SCHNEIDER, Secretary, of The
Progressive Corporation, an Ohio corporation for profit with its principal
office at Mayfield Village, Cuyahoga County, Ohio (the "Company"), do hereby
certify that a meeting of the Shareholders of the Company was duly called and
held on April 19, 1991, at which meeting a quorum of the shareholders was
present in person or by proxy, and by the affirmative vote of the holders of
shares entitling them to exercise a majority of the voting power of the Company
on a proposal to amend the Company's Amended Articles of Incorporation, the
following resolution was adopted:
RESOLVED, that Article Fourth of the Company's Amended Articles of
Incorporation be, and the same hereby is, deleted in its entirety and there is
substituted therefor the following:
Article Fourth. The authorized number of shares of the
corporation is 125,000,000, consisting of 20,000,000 Serial
Preferred Shares, without par value (hereinafter called
"Serial Preferred Shares"), 5,000,000 Voting Preference
Shares, without par value (hereinafter called "Voting
Preference Shares"), and 100,000,000 Common Shares, $1.00 par
value (hereinafter called "Common Shares").
DIVISION A
The Serial Preferred Shares shall have the following express terms:
Section 1. Series. The Serial Preferred Shares may be issued
from time to time in one or more series. All shares of Serial Preferred
Shares shall be of equal rank and shall be identical, except in respect
of the matters that may be fixed by the Board of Directors as
hereinafter provided, and each share of a series shall be identical
with all other shares of such series, except as to the dates from which
dividends shall accrue and be cumulative. All Serial Preferred Shares
shall rank on a parity with and be identical to all Voting Preference
Shares except in respect of (i) the matters that may be fixed by the
Board of Directors as provided in clauses (a) through (i), both
inclusive, of this Section and (ii) the voting rights and provisions
for consents relating to Serial Preferred Shares as fixed and
determined by Section 5 of this Division. Subject to the provisions of
Sections 2 through 7, both inclusive, of this Division, which
provisions shall apply to all Serial Preferred Shares, the Board of
Directors hereby is authorized to cause such shares to be issued in one
or more series and with respect to each such series to determine and
fix prior to the issuance
<PAGE> 13
thereof (and thereafter, to the extent provided in clause (b) of this
Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series;
(d) The dates on which and the period or periods for
which dividends, if declared, shall be payable and the date or
dates from which dividends shall accrue and be cumulative;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(c) of this Division) on the issuance of shares of
the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended Articles of Incorporation fixing, with respect to each
such series, the matters described in clauses (a) through (i), both inclusive,
of this Section and is authorized to take such actions with respect thereto as
may be required by law in order to effect such amendments.
Section 2. Dividends.
(a) The holders of Serial Preferred Shares of each series, in
preference to the holders of Common Shares and of any other class of
shares ranking junior to the Serial Preferred Shares, shall be entitled
to receive out of any funds legally
<PAGE> 14
available for Serial Preferred Shares and Voting Preference Shares and
when and as declared by the Board of Directors, dividends in cash at
the rate or rates for such series fixed in accordance with the
provisions of Section 1 of this Division and no more, payable on the
dates fixed for such series. Such dividends shall accrue and be
cumulative, in the case of shares of each particular series, from and
after the date or dates fixed with respect to such series. No dividends
shall be paid upon or declared or set apart for any series of the
Serial Preferred Shares for any dividend period unless at the same time
(1) a like proportionate dividend for the dividend periods terminating
on the same or any earlier date, ratably in proportion to the
respective dividend rates fixed therefor, shall have been paid upon or
declared or set apart for all Serial Preferred Shares of all series
then issued and outstanding and entitled to receive such dividend and
(2) the dividends payable for the dividend periods terminating on the
same or any earlier date, ratably in proportion to the respective
dividend rates fixed therefor, shall have been paid upon or declared or
set apart for all Voting Preference Shares of all series then issued
and outstanding and entitled to receive such dividend.
(b) So long as any Serial Preferred Shares shall be
outstanding no dividend, except a dividend payable in Common Shares or
other shares ranking junior to the Serial Preferred Shares, shall be
paid or declared or any distribution be made, except as aforesaid, in
respect of the Common Shares or any other shares ranking junior to the
Serial Preferred Shares, nor shall any Common Shares or any other
shares ranking junior to the Serial Preferred Shares be purchased,
retired or otherwise acquired by the corporation, except out of the
proceeds of the sale of Common Shares or other shares of the
corporation ranking junior to the Serial Preferred Shares received by
the corporation subsequent to the date of first issuance of Serial
Preferred Shares of any series, unless:
(1) All accrued and unpaid dividends on Serial
Preferred Shares, including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart; and
(2) There shall be no arrearages with respect to the
redemption of Serial Preferred Shares of any series from any
sinking fund provided for shares of such series in accordance
with the provisions of Section 1 of this Division.
Section 3. Redemption.
(a) Subject to the express terms of each series and to the
provisions of Subsection 5(c)(3) of this Division, the corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Serial Preferred Shares at the time outstanding at the
applicable redemption price for such
<PAGE> 15
series fixed in accordance with the provisions of Section 1 of
this Division; and
(2) Shall, from time to time, make such redemptions
of each series of Serial Preferred Shares as may be required
to fulfill the requirements of any sinking fund provided for
shares of such series at the applicable sinking fund
redemption price fixed in accordance with the provisions of
Section 1 of this Division;
and shall in each case pay all accrued and unpaid dividends to the
redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Serial
Preferred Shares to be redeemed at their respective addresses
then appearing on the books of the corporation, not less than
30 days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Division prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
corporation may deposit the aggregate redemption price of
Serial Preferred Shares to be redeemed, together with accrued
and unpaid dividends thereon to the redemption date, with any
bank or trust company in Cleveland, Ohio or New York, New
York, having capital and surplus of not less than
$100,000,000, named in such notice and direct that there be
paid to the respective holders of the Serial Preferred Shares
so to be redeemed amounts equal to the redemption price of the
Serial Preferred Shares so to be redeemed, together with such
accrued and unpaid dividends thereon, on surrender of the
share certificate or certificates held by such holders; and
upon the deposit of such notice in the mail and the making of
such deposit of money with such bank or trust company, such
holders shall cease to be shareholders with respect to such
shares; and from and after the time such notice shall have
been so deposited and such deposit of money shall have been so
made, such holders shall have no rights or claim against the
corporation with respect to such shares, except only the right
to receive such money from such bank or trust company without
interest or to exercise before the redemption date any
unexpired privileges of conversion. In the event less than all
of the outstanding Serial Preferred Shares are to be redeemed,
the corporation shall select by lot the shares so to be
redeemed in such manner as shall be prescribed by the Board of
Directors.
(2) If the holders of Serial Preferred Shares which
have been called for redemption shall not within six years
after such deposit claim the amount deposited for the
redemption thereof, any such bank or trust company shall, upon
demand, pay over to the corporation such unclaimed amounts and
thereupon such bank or trust company and the corporation shall
be relieved of all responsibility in respect thereof and to
such holders.
<PAGE> 16
(c) Any Serial Preferred Shares which are (1) redeemed by the
corporation pursuant to the provisions of this Section, (2) purchased
and delivered in satisfaction of any sinking fund requirements provided
for shares of such series, (3) converted in accordance with the express
terms thereof, or (4) otherwise acquired by the corporation, shall
resume the status of authorized but unissued Serial Preferred Shares
without serial designation.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
corporation, the holders of Serial Preferred Shares of any
series shall be entitled to receive in full out of the assets
of the corporation, including its capital, before any amount
shall be paid or distributed among the holders of the Common
Shares or any other shares ranking junior to the Serial
Preferred Shares, the amounts fixed with respect to shares of
such series in accordance with Section 1 of this Division,
plus an amount equal to all dividends accrued and unpaid
thereon to the date of payment of the amount due pursuant to
such liquidation, dissolution or winding up of the affairs of
the corporation. In the event the net assets of the
corporation legally available therefor are insufficient to
permit the payment upon all outstanding Serial Preferred
Shares and Voting Preference Shares of the full preferential
amount to which they are respectively entitled, then such net
assets shall be distributed ratably upon all outstanding
Serial Preferred Shares and Voting Preference Shares in
proportion to the full preferential amount to which each such
share is entitled.
(2) After payment to the holders of Serial Preferred
Shares of the full preferential amounts as aforesaid, the
holders of Serial Preferred Shares, as such, shall have no
right or claim to any of the remaining assets of the
corporation.
(b) The merger or consolidation of the corporation into or
with any other corporation, the merger of any other corporation into
it, or the sale, lease or conveyance of all or substantially all the
assets of the corporation, shall not be deemed to be a dissolution,
liquidation or winding up for the purposes of this Section.
Section 5. Voting.
(a) The holders of Serial Preferred Shares shall have no
voting rights, except as provided in this Section or required by law.
(b) (1) If, and so often as, the corporation shall be in
default in the payment of the equivalent of the full dividends
on any series of Serial Preferred Shares at the time
outstanding, whether or not earned or declared, for a number
of dividend payment periods (whether or not
<PAGE> 17
consecutive) which in the aggregate contain at least 540 days,
the holders of Serial Preferred Shares of all series, voting
separately as a class, shall be entitled to elect, as herein
provided, two members of the Board of Directors of the
corporation; provided, however, that the holders of Serial
Preferred Shares shall not have or exercise such special class
voting rights except at meetings of such shareholders for the
election of directors at which the holders of not less than
50% of the outstanding Serial Preferred Shares of all series
then outstanding are present in person or by proxy; and
provided further that the special class voting rights provided
for in this paragraph when the same shall have become vested
shall remain so vested until all accrued and unpaid dividends
on the Serial Preferred Shares of all series then outstanding
shall have been paid, whereupon the holders of Serial
Preferred Shares shall be divested of their special class
voting rights in respect of subsequent elections of directors,
subject to the revesting of such special class voting rights
in the event above specified in this paragraph.
(2) In the event of default entitling the holders of
Serial Preferred Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Serial Preferred Shares of all series at the
time outstanding, and notice thereof shall be given in the
same manner as that required for the annual meeting of
shareholders; provided, however, that the corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 120
days after the date of receipt of the foregoing written
request from the holders of Serial Preferred Shares. At any
meeting at which the holders of Serial Preferred Shares shall
be entitled to elect directors, the holders of 50% of the
Serial Preferred Shares of all series at the time outstanding,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect the
members of the Board of Directors which the holders of Serial
Preferred Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended Articles of
Incorporation or the Code of Regulations of the corporation or
any action taken by the holders of any class of shares fixing
the number of directors of the corporation, the two directors
who may be elected by the holders of Serial Preferred Shares
pursuant to this Subsection shall serve in addition to any
other directors then in office or proposed to be elected
otherwise than pursuant to this Subsection. Nothing in this
Subsection shall prevent any change otherwise permitted in the
total number of directors of the corporation nor require the
resignation of any director elected otherwise than pursuant to
this Subsection. Notwithstanding any classification of the
other directors of the corporation, the two directors elected
by the holders of Serial
<PAGE> 18
Preferred Shares shall be elected annually for terms expiring
at the next succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Serial Preferred Shares in
respect of elections of directors as provided in this
Subsection, the terms of office of all directors then in
office elected by such holders shall terminate immediately
thereupon. If the office of any director elected by such
holders voting as a class becomes vacant by reason of death,
resignation, removal from office or otherwise, the remaining
director elected by such holders voting as a class may elect a
successor who shall hold office for the unexpired term in
respect of which such vacancy occurred.
(c) The affirmative vote or consent of the holders of at least
two-thirds of the Serial Preferred Shares at the time outstanding,
voting or consenting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose, shall be
necessary to effect any one or more of the following (but so far as the
holders of Serial Preferred Shares are concerned, such action may be
effected with such vote or consent):
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended Articles of Incorporation or of the Code of
Regulations of the corporation which affects adversely the
preferences or voting or other rights of the holders of Serial
Preferred Shares; provided, however, neither the amendment of
the Amended Articles of Incorporation so as to authorize,
create or change the authorized or outstanding number of
Serial Preferred Shares or of any shares ranking on a parity
with or junior to the Serial Preferred Shares nor the
amendment of the provisions of the Code of Regulations so as
to change the number of directors of the corporation shall be
deemed to affect adversely the preferences or voting or other
rights of the holders of Serial Preferred Shares; and provided
further, that if such amendment, alteration or repeal affects
adversely the preferences or voting or other rights of one or
more but not all series of Serial Preferred Shares at the time
outstanding, only the affirmative vote or consent of the
holders of at least two-thirds of the number of the shares at
the time outstanding of the series so affected shall be
required;
(2) The authorization, creation or the increase in
the authorized number of any shares, or any security
convertible into shares, in either case ranking prior to the
Serial Preferred Shares; or
(3) The purchase or redemption (for sinking fund
purposes or otherwise) of less than all of the Serial
Preferred Shares then outstanding except in accordance with a
stock purchase offer made to all holders of record of Serial
Preferred Shares, unless all dividends on all Serial Preferred
Shares then outstanding for all previous dividend periods
shall
<PAGE> 19
have been declared and paid or funds therefor set apart and
all accrued sinking fund obligations applicable thereto shall
have been complied with.
Section 6. Pre-emptive Rights. No holder of Serial Preferred Shares as
such, shall have any pre-emptive right to purchase, have offered to him for
purchase or subscribe for any of the corporation's shares or other securities of
any class, whether now or hereafter authorized.
Section 7. Definitions. For the purposes of this Division:
(a) Whenever reference is made to shares "ranking prior to the
Serial Preferred Shares," such reference shall mean and include all
shares of the corporation in respect of which the rights of the holders
thereof as to the payment of dividends or as to distributions in the
event of a voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the corporation are given preference over the
rights of the holders of Serial Preferred Shares;
(b) Whenever reference is made to shares "on a parity with the
Serial Preferred Shares," such reference shall mean and include all
Voting Preference Shares and all other shares of the corporation in
respect of which the rights of the holders thereof as to the payment of
dividends or as to distributions in the event of a voluntary or
involuntary liquidation, dissolution or winding up of the affairs of
the corporation rank equally (except as to the amounts fixed therefor)
with the rights of the holders of Serial Preferred Shares; and
(c) Whenever reference is made to shares "ranking junior to
the Serial Preferred Shares," such reference shall mean and include all
shares of the corporation other than those defined under Subsections
(a) and (b) of this Section as shares "ranking prior to" or "on a
parity with" the Serial Preferred Shares.
DIVISION B
The Voting Preference Shares shall have the following express terms:
Section 1. Series. The Voting Preference Shares may be issued from time
to time in one or more series. All shares of Voting Preference Shares shall be
of equal rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each share of a
series shall be identical with all other shares of such series, except as to the
dates from which dividends shall accrue and be cumulative. All Voting Preference
Shares shall rank on a parity with and be identical to all Serial Preferred
Shares except in respect of (i) the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), both inclusive, of this
Section and (ii) the voting rights and provisions for consents relating to
Voting Preference Shares as fixed and determined by Section 5 of this Division.
Subject to the provisions of Sections 2 through 7, both inclusive, of this
Division, which provisions shall apply to all Voting Preference Shares, the
Board of Directors hereby is authorized to cause such shares to be issued in one
or more series and with respect to each such
<PAGE> 20
series to determine and fix prior to the issuance thereof (and thereafter, to
the extent provided in clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series, which
number the Board of Directors may (except where otherwise provided in
the creation of the series) increase or decrease from time to time
before or after the issuance thereof (but not below the number of
shares thereof then outstanding);
(c) The dividend rate or rates of the series;
(d) The dates on which and the period or periods for which
dividends, if declared, shall be payable and the date or dates from
which dividends shall accrue and be cumulative;
(e) The redemption rights and price or prices, if any, for
shares of the series;
(f) The terms and amount of the sinking fund, if any, for the
purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in the event
of any voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the corporation;
(h) Whether the shares of the series shall be convertible into
Common Shares or shares of any other class and, if so, the conversion
rate or rates or price or prices, any adjustments thereof and all other
terms and conditions upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in Subsection
5(c) of this Division) on the issuance of shares of the same series or
of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended Articles of Incorporation fixing, with respect to each
such series, the matters described in clauses (a) through (i), both inclusive,
of this Section and is authorized to take such actions with respect thereto as
may be required by law in order to effect such amendments.
Section 2. Dividends.
(a) The holders of Voting Preference Shares of each series, in
preference to the holders of Common Shares and of any other class of
shares ranking junior to the Voting Preference Shares, shall be
entitled to receive out of any funds legally available for Voting
Preference Shares and Serial Preferred Shares and
<PAGE> 21
when and as declared by the Board of Directors, dividends in cash at
the rate or rates for such series fixed in accordance with the
provisions of Section 1 of this Division and no more, payable on the
dates fixed for such series. Such dividends shall accrue and be
cumulative, in the case of shares of each particular series, from and
after the date or dates fixed with respect to such series. No dividends
shall be paid upon or declared or set apart for any series of the
Voting Preference Shares for any dividend period unless at the same
time (1) a like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in proportion to
the respective annual dividend rates fixed therefor, shall have been
paid upon or declared or set apart for all Voting Preference Shares of
all series then issued and outstanding and entitled to receive such
dividend and (2) the dividends payable for the dividend periods
terminating on the same or any earlier date, ratably in proportion to
the respective dividend rates fixed therefor, shall have been paid upon
or declared or set apart for all Serial Preferred Shares of all series
then issued and outstanding and entitled to receive such dividend.
(b) So long as any Voting Preference Shares shall be
outstanding no dividend, except a dividend payable in Common Shares or
other shares ranking junior to the Voting Preference Shares, shall be
paid or declared or any distribution be made, except as aforesaid, in
respect of the Common Shares or any other shares ranking junior to the
Voting Preference Shares, nor shall any Common Shares or any other
shares ranking junior to the Voting Preference Shares be purchased,
retired or otherwise acquired by the corporation, except out of the
proceeds of the sale of Common Shares or other shares of the
corporation ranking junior to the Voting Preference Shares received by
the corporation subsequent to the date of first issuance of Voting
Preference Shares of any series, unless:
(1) All accrued and unpaid dividends on Voting
Preference Shares, including the full dividends for all
current dividend periods, shall have been declared and paid or
a sum sufficient for payment thereof set apart; and
(2) There shall be no arrearages with respect to the
redemption of Voting Preference Shares of any series from any
sinking fund provided for shares of such series in accordance
with the provisions of Section 1 of this Division.
Section 3. Redemption.
(a) Subject to the express terms of each series and the
provisions of Subsection 5(c)(6) of this Division, the corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Voting Preference Shares at the time outstanding at the
applicable redemption price for such
<PAGE> 22
series fixed in accordance with the provisions of Section 1 of
this Division; and
(2) Shall, from time to time, make such redemptions
of each series of Voting Preference Shares as may be required
to fulfill the requirements of any sinking fund provided for
shares of such series at the applicable sinking fund
redemption price fixed in accordance with the provisions of
Section 1 of this Division;
and shall in each case pay all accrued and unpaid dividends to the
redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Voting
Preference Shares to be redeemed at their respective addresses
then appearing on the books of the corporation, not less than
30 days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Division prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
corporation may deposit the aggregate redemption price of
Voting Preference Shares to be redeemed, together with accrued
and unpaid dividends thereon to the redemption date, with any
bank or trust company in Cleveland, Ohio or New York, New
York, having capital and surplus of not less than
$100,000,000, named in such notice and direct that there be
paid to the respective holders of the Voting Preference Shares
so to be redeemed amounts equal to the redemption price of the
Voting Preference Shares so to be redeemed, together with such
accrued and unpaid dividends thereon, on surrender of the
share certificate or certificates held by such holders; and
upon the deposit of such notice in the mail and the making of
such deposit of money with such bank or trust company, such
holders shall cease to be shareholders with respect to such
shares; and from and after the time such notice shall have
been so deposited and such deposit of money shall have been so
made, such holders shall have no rights or claim against the
corporation with respect to such shares, except only the right
to receive such money from such bank or trust company without
interest or to exercise before the redemption date any
unexpired privileges of conversion. In the event less than all
of the outstanding Voting Preference Shares are to be
redeemed, the corporation shall select by lot the shares so to
be redeemed in such manner as shall be prescribed by the Board
of Directors.
(2) If the holders of Voting Preference Shares which
have been called for redemption shall not within six years
after such deposit claim the amount deposited for the
redemption thereof, any such bank or trust company shall, upon
demand, pay over to the corporation such unclaimed amounts and
thereupon such bank or trust company and the corporation shall
be relieved of all responsibility in respect thereof and to
such holders.
<PAGE> 23
(c) Any Voting Preference Shares which are (1) redeemed by the
corporation pursuant to the provisions of this Section, (2) purchased
and delivered in satisfaction of any sinking fund requirements provided
for shares of such series, (3) converted in accordance with the express
terms thereof, or (4) otherwise acquired by the corporation, shall
resume the status of authorized but unissued Voting Preference Shares
without serial designation.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
corporation, the holders of Voting Preference Shares of any
series shall be entitled to receive in full out of the assets
of the corporation, including its capital, before any amount
shall be paid or distributed among the holders of the Common
Shares or any other shares ranking junior to the Voting
Preference Shares, the amounts fixed with respect to shares of
such series in accordance with Section 1 of this Division,
plus an amount equal to all dividends accrued and unpaid
thereon to the date of payment of the amount due pursuant to
such liquidation, dissolution or winding up of the affairs of
the corporation. In the event the net assets of the
corporation legally available therefor are insufficient to
permit the payment upon all outstanding Voting Preference
Shares and Serial Preferred Shares of the full preferential
amount to which they are respectively entitled, then such net
assets shall be distributed ratably upon all outstanding
Voting Preference Shares and Serial Preferred Shares in
proportion to the full preferential amount to which each such
share is entitled.
(2) After payment to the holders of Voting Preference
Shares of the full preferential amounts as aforesaid, the
holders of Voting Preference Shares, as such, shall have no
right or claim to any of the remaining assets of the
corporation.
(b) The merger or consolidation of the corporation into or
with any other corporation, the merger of any other corporation into
it, or the sale, lease or conveyance of all or substantially all the
assets of the corporation, shall not be deemed to be a dissolution,
liquidation or winding up for the purposes of this Section.
Section 5. Voting.
(a) The holders of Voting Preference Shares shall be entitled
at all times to one vote for each share and, except as otherwise
provided in this Section or required by law, the holders of Voting
Preference Shares and the holders of Common Shares shall vote together
as a class on all matters presented, subject, however, to the special
voting rights of the holders of Serial Preferred Shares as provided in
Section 5 of Division A hereof.
<PAGE> 24
(b) (1) If, and so often as, the corporation shall be in
default in the payment of the equivalent of the full dividends
on any series of Voting Preference Shares at the time
outstanding, whether or not earned or declared, for a number
of dividend payment periods (whether or not consecutive) which
in the aggregate contain at least 540 days, the holders of
Voting Preference Shares of all series, voting separately as a
class, shall be entitled to elect, as herein provided, two
members of the Board of Directors of the corporation;
provided, however, that the holders of Voting Preference
Shares shall not have or exercise such special class voting
rights except at meetings of such shareholders for the
election of directors at which the holders of not less than
50% of the outstanding Voting Preference Shares of all series
then outstanding are present in person or by proxy; and
provided further that the special class voting rights provided
for in this paragraph when the same shall have become vested
shall remain so vested until all accrued and unpaid dividends
on the Voting Preference Shares of all series then outstanding
shall have been paid, whereupon the holders of Voting
Preference Shares shall be divested of their special class
voting rights in respect of subsequent elections of directors,
subject to the revesting of such special class voting rights
in the event above specified in this paragraph.
(2) In the event of default entitling the holders of
Voting Preference Shares to elect two directors as specified
in paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Voting Preference Shares of all series at the
time outstanding, and notice thereof shall be given in the
same manner as that required for the annual meeting of
shareholders; provided, however, that the corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 120
days after the date of receipt of the foregoing written
request from the holders of Voting Preference Shares. At any
meeting at which the holders of Voting Preference Shares shall
be entitled to elect directors, the holders of 50% of the
Voting Preference Shares of all series at the time
outstanding, present in person or by proxy, shall be
sufficient to constitute a quorum, and the vote of the holders
of a majority of such shares so present at any such meeting at
which there shall be such a quorum shall be sufficient to
elect the members of the Board of Directors which the holders
of Voting Preference Shares are entitled to elect as herein
provided. Notwithstanding any provision of these Amended
Articles of Incorporation or the Code of Regulations of the
corporation or any action taken by the holders of any class of
shares fixing the number of directors of the corporation, the
two directors who may be elected by the holders of Voting
Preference Shares pursuant to this Subsection shall serve in
addition to any other directors then in office or proposed to
be elected otherwise than pursuant to this Subsection. Nothing
in this Subsection shall prevent any
<PAGE> 25
change otherwise permitted in the total number of directors of
the corporation or require the resignation of any director
elected otherwise than pursuant to this Subsection.
Notwithstanding any classification of the other directors of
the corporation, the two directors elected by the holders of
Voting Preference Shares shall be elected annually for terms
expiring at the next succeeding annual meeting of
shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Voting Preference Shares in
respect of elections of directors as provided in this
Subsection, the terms of office of all directors then in
office elected by such holders shall terminate immediately
thereupon. If the office of any director elected by such
holders voting as a class becomes vacant by reason of death,
resignation, removal from office or otherwise, the remaining
director elected by such holders voting as a class may elect a
successor who shall hold office for the unexpired term in
respect of which such vacancy occurred.
(c) The affirmative vote or consent of the holders of at least
two-thirds of the Voting Preference Shares at the time outstanding,
voting or consenting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose, shall be
necessary to effect any one or more of the following (but so far as the
holders of Voting Preference Shares are concerned, such action may be
effected with such vote or consent):
(1) The sale, lease or conveyance by the corporation
of all or substantially all of its assets;
(2) The merger or consolidation of the corporation
into or with any other corporation or the merger of any other
corporation into it;
(3) The voluntary liquidation, dissolution or winding
up of the affairs of the corporation;
(4) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended Articles of Incorporation or of the Code of
Regulations of the corporation which affects adversely the
preferences or voting or other rights of the holders of Voting
Preference Shares; provided, however, that for the purpose of
this paragraph only, neither the amendment of the Amended
Articles of Incorporation so as to authorize, create or change
the authorized or outstanding number of Voting Preference
Shares or of any shares ranking on a parity with or junior to
the Voting Preference Shares nor the amendment of the
provisions of the Code of Regulations so as to change the
number of directors of the corporation shall be deemed to
affect adversely the preferences or voting or other
<PAGE> 26
rights of the holders of Voting Preference Shares; and
provided further, that if such amendment, alteration or repeal
affects adversely the preferences or voting or other rights of
one or more but not all series of Voting Preference Shares at
the time outstanding, only the affirmative vote or consent of
the holders of at least two-thirds of the number of the shares
at the time outstanding of the series so affected shall be
required;
(5) The authorization, creation or the increase in
the authorized amount of any shares, or any security
convertible into shares, in either case ranking prior to the
Voting Preference Shares; or
(6) The purchase or redemption (for sinking fund
purposes or otherwise) of less than all of the Voting
Preference Shares then outstanding except in accordance with a
stock purchase offer made to all holders of record of Voting
Preference Shares, unless all dividends on all Voting
Preference Shares then outstanding for all previous dividend
periods shall have been declared and paid or funds therefor
set apart and all accrued sinking fund obligations applicable
thereto shall have been complied with.
Section 6. Pre-emptive Rights. No holder of Voting Preference Shares as
such shall have any pre-emptive right to purchase or subscribe for any of the
corporation's shares or other securities of any class, whether now or hereafter
authorized.
Section 7. Definitions. For the purposes of this Division:
(a) Whenever reference is made to shares "ranking prior to the
Voting Preference Shares," such reference shall mean and include all
shares of the corporation in respect of which the rights of the holders
thereof as to the payment of dividends or as to distributions in the
event of a voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the corporation are given preference over the
rights of the holders of Voting Preference Shares;
(b) Whenever reference is made to shares "on a parity with the
Voting Preference Shares," such reference shall mean and include all
Serial Preferred Shares and all other shares of the corporation in
respect of which the rights of the holders thereof as to the payment of
dividends or as to distributions in the event of a voluntary or
involuntary liquidation, dissolution or winding up of the affairs of
the corporation rank equally (except as to the amounts fixed therefor)
with the rights of the holders of Voting Preference Shares; and
(c) Whenever reference is made to shares "ranking junior to
the Voting Preference Shares," such reference shall mean and include
all shares of the corporation other than those defined under
Subsections (a) and (b) of this Section as shares "ranking prior to" or
"on a parity with" the Voting Preference Shares.
<PAGE> 27
DIVISION C
The Common Shares shall have the following express terms:
The Common Shares shall be subject to the express terms of the Serial
Preferred Shares and any series thereof and to the express terms of the Voting
Preference Shares and any series thereof. Each Common Share shall be equal to
every other Common Share and the holders thereof shall be entitled to one vote
for each Common Share on all matters presented. No holder of Common Shares shall
have any pre-emptive right to purchase or subscribe for any of the corporation's
shares or other securities of any class, whether now or hereafter authorized.
IN WITNESS WHEREOF, Peter B. Lewis, President, and David M. Schneider,
Secretary, of The Progressive Corporation, acting for and on its behalf do
hereunto subscribe their names this 19th day of April, 1991.
/s/ Peter B. Lewis
--------------------------------
Peter B. Lewis, President
/s/ David M. Schneider
--------------------------------
David M. Schneider, Secretary
<PAGE> 28
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
THE PROGRESSIVE CORPORATION
PETER B. LEWIS, President, and DAVID M. SCHNEIDER, Secretary, of The
Progressive Corporation, an Ohio corporation for profit with its principal
office in Mayfield Village, Cuyahoga County, Ohio (the "Company"), do hereby
certify that a Written Action Taken Without A Meeting of the Executive Committee
of the Board of Directors of the Company was duly executed by all members of the
Executive Committee of the Board of Directors and that the following resolution
to amend the Amended Articles of Incorporation of the Company was adopted
pursuant to said Written Action Taken Without A Meeting by the Executive
Committee of the Board of Directors of the Company pursuant to the authority of
Section 1701.70(B)(1) and 1701.73(A) of the Ohio Revised Code and Section 1 of
Division A of Article Fourth of said Amended Articles of Incorporation:
RESOLVED, that the Amended Articles of Incorporation of the Company be
and they hereby are amended by adding at the end of Division A of Article FOURTH
thereof a new Section 8 reading as follows:
Section 8. 9 3/8% Serial Preferred Shares, Series A. Of the 20,000,000
authorized Serial Preferred Shares, without par value, 4,600,000 shares are
designated as a series entitled "9 3/8% Serial Preferred Shares, Series A"
(hereinafter called "Series A Shares"). The Series A Shares shall have the
express terms set forth in this Division as being applicable to all Serial
Preferred Shares as a class and, in addition, the following express terms
applicable to all Series A Share as a series of Serial Preferred Shares:
(a) The annual dividend rate of the Series A Shares shall be 9 3/8%
of the liquidation preference of $25.00 per share.
(b) Dividends on Series A Shares shall be payable, if declared,
quarterly on March 31, June 30, September 30 and December 31 of
each year, the first quarterly dividend being payable, if
declared, on June 30, 1991. The dividends payable for each full
quarterly dividend period on each Series A Share shall be
$.5859375.
Dividends for the initial dividend period on the Series A Shares,
or for any period shorter or longer than a full dividend period
on the Series A Shares, shall be computed on the basis of 30-day
months and a 360-day year. The aggregate dividend payable
quarterly to
<PAGE> 29
each holder of Series A Shares shall be rounded to the nearest
one cent with $.005 being rounded upward. Each dividend shall be
payable to the holders of record on such record date, not less
than 15 nor more than 30 days preceding the payment date thereof,
as shall be fixed from time to time by the corporation's Board of
Directors.
(c) Dividends on Series A Shares shall be cumulative as follows:
(1) With respect to shares included in the initial issue of
Series A Shares and shares issued any time thereafter up to
and including the record date for the payment of the first
dividend on the initial issue of series A Shares, dividends
shall be cumulative from the date of the initial issue of
Series A Shares; and
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such
shares, except that if such shares are issued during the
period commencing the day after the record date for the
payment of a dividend on Series A Shares and ending on the
payment date of that dividend, dividends with respect to
such shares shall be cumulative from that dividend payment
date.
(d) Subject to the provisions of Subsection 5(c)(3) of this Division,
the Series A Shares shall be redeemable in the manner provided in
Subsections 3(b)(1) and (2) of this Division as follows:
(1) Except as provided in clause (2) of this Subsection (d), the
Series A Shares may not be redeemed prior to May 31, 1996.
At any time or from time to time on and after May 31, 1996,
the corporation, at its option, may redeem all or any part
of the Series A Shares at a redemption price of $25.00 per
share plus, in each case, an amount equal to all dividends
accrued and unpaid thereon to the redemption date.
(2) Prior to May 31, 1996, the corporation, at its option, may
redeem all, but not less than all, of the outstanding Series
A Shares if the holders of such shares shall be entitled to
vote upon or consent to any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any of the
provisions of the Amended Articles of Incorporation or of
the Code of Regulations of the corporation which affects
<PAGE> 30
adversely the preferences or voting or other rights of the
holders of Series A Shares, as specified under Subsection
5(c)(1) of this Division, and all of the following
conditions have been satisfied: (a) the corporation shall
have requested the vote or consent of the holders of the
Series A Shares to such amendment, alteration or repeal,
stating in such request that failing the requisite favorable
vote or consent the corporation will have the option to
redeem such shares, (b0 the corporation shall not have
received the requisite favorable vote or consent within 60
days after making such request (which shall be deemed to
have been made upon the mailing of the notice of any meeting
of holders of Series A Shares to vote upon such approval or
grant such consent) and (c) such amendment, alteration or
repeal, whether in connection with a merger, consolidation
or otherwise, shall be effected on the date fixed for such
redemption, which date shall be no more than one year after
such request is made. Any such redemption shall be on notice
as aforesaid at a redemption price of 425.00 per Series A
Share plus an amount equal to all dividends accrued and
unpaid thereon to the redemption date.
(e) The amount payable per Series A Share in the event of any
voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the corporation shall be $25.00, plus an amount
equal to all dividends accrued and unpaid thereon to the date of
payment.
IN WITNESS WHEREOF, Peter B. Lewis, President, and David M. Schneider,
Secretary, of The Progressive Corporation, acting for and on its behalf do
hereunto subscribe their names this fourteenth day of May, 1991.
/s/ Peter B. Lewis
--------------------------------
Peter B. Lewis, President
/s/ David M. Schneider
--------------------------------
David M. Schneider, Secretary
<PAGE> 31
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
THE PROGRESSIVE CORPORATION
PETER B. LEWIS, President, and DAVID M. SCHNEIDER, Secretary, of The Progressive
Corporation, an Ohio corporation for profit with its principal office at
Mayfield Village, Cuyahoga County, Ohio (the "Company"), do hereby certify that
a meeting of the Shareholders of the Company was duly called and held on April
23, 1993 at which meeting a quorum of the shareholders was present in person, or
by proxy, and by the affirmative vote of the holders of shares entitling them to
exercise a majority of the voting power of the Company on a proposal to amend
the Company's Amended Articles of Incorporation, the following resolution was
adopted:
RESOLVED, that the first paragraph of Article FOURTH of the Company's Amended
Articles of Incorporation, which precedes DIVISION A thereof be, and the same
is, hereby amended and restated in its entirety to provide as follows:
FOURTH. The authorized number of shares of the corporation is
225,000,000, consisting of 20,000,000 Serial Preferred Shares, without
par value (hereinafter called "Serial Preferred Shares"), 5,000,000
Voting Preference Shares, without par value (hereinafter called "Voting
Preference Shares"), and 200,000 Common Shares, $1.00 par value
(hereinafter called "Common Shares).
IN WITNESS WHEREOF, Peter B. Lewis, President, and David M. Schneider, Secretary
of The Progressive Corporation, acting for and on its behalf do hereunto
subscribe their names this 23rd day of April, 1993.
/s/ Peter B. Lewis
--------------------------------
Peter B. Lewis, President
/s/ David M. Schneider
--------------------------------
David M. Schneider, Secretary
<PAGE> 32
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
THE PROGRESSIVE CORPORATION
DAVID M. SCHNEIDER, Secretary of the Progressive Corporation, an Ohio
corporation for profit with its principal office at Mayfield Village, Cuyahoga
County, Ohio (the "Company"), does hereby certify that a meeting of the
Shareholders of the Company was duly called and held on April 24, 1998, at which
meeting a quorum of the Shareholders was present in person or by proxy, and by
the affirmative vote of the holders of shares entitling them to exercise a
majority of the voting power of the Company on a proposal to amend the Company's
Amended Articles of Incorporation, the following resolution was adopted:
RESOLVED, that the first paragraph of Article FOURTH of the Company's Amended
Articles of Incorporation, which precedes DIVISION A thereof be, and the same
is, hereby amended and restated in its entirety to provide as follows:
FOURTH. The authorized number of shares of the corporation is
325,000,000, consisting of 20,000,000 Serial Preferred Shares, without
par value (hereinafter called "Serial Preferred Shares"), 5,000,000
Voting Preference Shares, without par value (hereinafter called "Voting
Preference Shares"), and 300,000,000 Common Shares, $1.00 par value
(hereinafter called "Common Shares").
IN WITNESS WHEREOF, David M. Schneider, Secretary of The Progressive
Corporation, acting for and on behalf of said corporation, does hereunto
subscribe his name this 24th day of April, 1998.
/s/ David M. Schneider
--------------------------------
David M. Schneider, Secretary
<PAGE> 1
EXHIBIT 4(d)
------------
Code of Regulations of the Registrant
(incorporated by reference to the Registrant's
Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997, as filed with the
Commission on May 15, 1997;
see Exhibit 3 therein)
<PAGE> 1
EXHIBIT 5
---------
Opinion of Baker & Hostetler LLP
<PAGE> 2
BAKER & HOSTETLER LLP
3200 National City Center
1900 East 9th Street
Cleveland, OH 44114-3485
May 1, 1998
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
Re: The Progressive Corporation 1998 Directors' Stock Option Plan (the
------------------------------------------------------------------
"Plan")
-------
Gentlemen:
We have acted as counsel to The Progressive Corporation, an Ohio
corporation (the "Company"), in connection with the Company's Registration
Statement on Form S-8 (the "Registration Statement") being filed under the
Securities Act of 1933, as amended, relating to the offering of up to 200,000
Common Shares, without par value (the "Common Shares"), of the Company pursuant
to the Plan.
In connection with the foregoing, we have examined: (a) the Amended
Articles of Incorporation of the Company, as amended, (b) the Code of
Regulations of the Company, (c) the Plan, and (d) such records of the corporate
proceedings of the Company and such other documents as we deemed necessary to
render this opinion.
Based on such examination, we are of the opinion that the Common
Shares available for issuance under the Plan, when issued and sold pursuant to
the Plan, will be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this Opinion as Exhibit 5 to the
Registration Statement. In giving our consent, we do not hereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the rules and regulations of the Securities and
Exchange Commission.
Sincerely,
/s/ Baker & Hostetler LLP
Baker & Hostetler LLP
<PAGE> 1
EXHIBIT 23(a)
-------------
Consent of Coopers & Lybrand L.L.P., Independent Accountants
<PAGE> 2
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-8 of our reports dated January 27, 1998,
on our audits of the consolidated financial statements and financial statement
schedules of The Progressive Corporation and subsidiaries (the "Company") as of
December 31, 1997 and 1996, and for each of the three years in the period ended
December 31, 1997, which reports are included in the Company's Annual Report on
Form 10-K, as amended by Form 10K/A-No.1.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Cleveland, Ohio
May 1, 1998
<PAGE> 1
EXHIBIT 23(b)
-------------
Consent of Baker & Hostetler LLP (included in Exhibit 5)
<PAGE> 1
EXHIBIT 24(a)
-------------
Powers of Attorney
<PAGE> 2
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer and/or
director of The Progressive Corporation, an Ohio corporation (the "Company"),
has made, constituted and appointed, and by this instrument does make,
constitute and appoint, Jeffrey W. Basch, Charles B. Chokel, David M. Schneider,
Dane A. Shrallow and Michael R. Uth, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to affix for him and in his name, place and stead, in any and all capacities, as
attorney-in-fact and agent, his signature to a Registration Statement on Form
S-8 or other form in order to register under the Securities Act of 1933, as
amended, up to 200,000 of the Company's Common Shares, $1.00 par value, issuable
under The Progressive Corporation 1998 Directors' Stock Option Plan, and to any
and all amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such attorney-in-fact
and agent, or any such substitute or substitutes, shall lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ Peter B. Lewis
------------------------------
Peter B. Lewis
Chairman, President, Principal
Executive Officer and Director
<PAGE> 3
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer 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, David M. Schneider, Dane A. Shrallow and Michael R.
Uth, and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 200,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 1998 Directors' Stock Option Plan, and to any and all amendments,
post-effective amendments and exhibits to such Registration Statement, and to
any and all applications, instruments and other documents pertaining thereto,
giving and granting unto each such attorney-in-fact and agent full power and
authority to do and perform any and all acts and things whatsoever necessary or
appropriate to be done in and about the premises, as fully for all intents and
purposes as he might or could do if personally present, and hereby ratifying and
confirming all that each such attorney-in-fact and agent, or any such substitute
or substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ Charles B. Chokel
-------------------------------
Charles B. Chokel
Treasurer and Principal
Financial Officer
<PAGE> 4
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer 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, David M. Schneider, Dane A. Shrallow and Michael R.
Uth, and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 200,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 1998 Directors' Stock Option Plan, and to any and all amendments,
post-effective amendments and exhibits to such Registration Statement, and to
any and all applications, instruments and other documents pertaining thereto,
giving and granting unto each such attorney-in-fact and agent full power and
authority to do and perform any and all acts and things whatsoever necessary or
appropriate to be done in and about the premises, as fully for all intents and
purposes as he might or could do if personally present, and hereby ratifying and
confirming all that each such attorney-in-fact and agent, or any such substitute
or substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ Jeffrey W. Basch
---------------------
Jeffrey W. Basch
Principal Accounting Officer
<PAGE> 5
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned officer 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, Dane A. Shrallow and Michael R.
Uth, and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, to affix for him and in his name,
place and stead, in any and all capacities, as attorney-in-fact and agent, his
signature to a Registration Statement on Form S-8 or other form in order to
register under the Securities Act of 1933, as amended, up to 200,000 of the
Company's Common Shares, $1.00 par value, issuable under The Progressive
Corporation 1998 Directors' Stock Option Plan, and to any and all amendments,
post-effective amendments and exhibits to such Registration Statement, and to
any and all applications, instruments and other documents pertaining thereto,
giving and granting unto each such attorney-in-fact and agent full power and
authority to do and perform any and all acts and things whatsoever necessary or
appropriate to be done in and about the premises, as fully for all intents and
purposes as he might or could do if personally present, and hereby ratifying and
confirming all that each such attorney-in-fact and agent, or any such substitute
or substitutes, shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ David M. Schneider
-----------------------------------
David M. Schneider
Secretary and Chief
Legal Officer
<PAGE> 6
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Jeffrey W. Basch, Charles B. Chokel, David M. Schneider, Dane A.
Shrallow and Michael R. Uth, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to affix for him and in his name, place and stead, in any and all capacities, as
attorney-in-fact and agent, his signature to a Registration Statement on Form
S-8 or other form in order to register under the Securities Act of 1933, as
amended, up to 200,000 of the Company's Common Shares, $1.00 par value, issuable
under The Progressive Corporation 1998 Directors' Stock Option Plan, and to any
and all amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such attorney-in-fact
and agent, or any such substitute or substitutes, shall lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ Milton N. Allen
----------------------------
Milton N. Allen
Director
<PAGE> 7
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Jeffrey W. Basch, Charles B. Chokel, David M. Schneider, Dane A.
Shrallow and Michael R. Uth, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to affix for him and in his name, place and stead, in any and all capacities, as
attorney-in-fact and agent, his signature to a Registration Statement on Form
S-8 or other form in order to register under the Securities Act of 1933, as
amended, up to 200,000 of the Company's Common Shares, $1.00 par value, issuable
under The Progressive Corporation 1998 Directors' Stock Option Plan, and to any
and all amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such attorney-in-fact
and agent, or any such substitute or substitutes, shall lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ B. Charles Ames
--------------------
B. Charles Ames
Director
<PAGE> 8
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Jeffrey W. Basch, Charles B. Chokel, David M. Schneider, Dane A.
Shrallow and Michael R. Uth, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to affix for him and in his name, place and stead, in any and all capacities, as
attorney-in-fact and agent, his signature to a Registration Statement on Form
S-8 or other form in order to register under the Securities Act of 1933, as
amended, up to 200,000 of the Company's Common Shares, $1.00 par value, issuable
under The Progressive Corporation 1998 Directors' Stock Option Plan, and to any
and all amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such attorney-in-fact
and agent, or any such substitute or substitutes, shall lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ Charles A. Davis
---------------------
Charles A. Davis
Director
<PAGE> 9
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Jeffrey W. Basch, Charles B. Chokel, David M. Schneider, Dane A.
Shrallow and Michael R. Uth, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to affix for him and in his name, place and stead, in any and all capacities, as
attorney-in-fact and agent, his signature to a Registration Statement on Form
S-8 or other form in order to register under the Securities Act of 1933, as
amended, up to 200,000 of the Company's Common Shares, $1.00 par value, issuable
under The Progressive Corporation 1998 Directors' Stock Option Plan, and to any
and all amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such attorney-in-fact
and agent, or any such substitute or substitutes, shall lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ Stephen R. Hardis
----------------------
Stephen R. Hardis
Director
<PAGE> 10
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Jeffrey W. Basch, Charles B. Chokel, David M. Schneider, Dane A.
Shrallow and Michael R. Uth, and each of them, 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-8 or other form in order to register under the Securities Act of 1933, as
amended, up to 200,000 of the Company's Common Shares, $1.00 par value, issuable
under The Progressive Corporation 1998 Directors' Stock Option Plan, and to any
and all amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as 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 signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ Janet Hill
------------------------------
Janet Hill
Director
<PAGE> 11
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Jeffrey W. Basch, Charles B. Chokel, David M. Schneider, Dane A.
Shrallow and Michael R. Uth, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to affix for him and in his name, place and stead, in any and all capacities, as
attorney-in-fact and agent, his signature to a Registration Statement on Form
S-8 or other form in order to register under the Securities Act of 1933, as
amended, up to 200,000 of the Company's Common Shares, $1.00 par value, issuable
under The Progressive Corporation 1998 Directors' Stock Option Plan, and to any
and all amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such attorney-in-fact
and agent, or any such substitute or substitutes, shall lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ Norman S. Matthews
-----------------------
Norman S. Matthews
Director
<PAGE> 12
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Jeffrey W. Basch, Charles B. Chokel, David M. Schneider, Dane A.
Shrallow and Michael R. Uth, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to affix for him and in his name, place and stead, in any and all capacities, as
attorney-in-fact and agent, his signature to a Registration Statement on Form
S-8 or other form in order to register under the Securities Act of 1933, as
amended, up to 200,000 of the Company's Common Shares, $1.00 par value, issuable
under The Progressive Corporation 1998 Directors' Stock Option Plan, and to any
and all amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such attorney-in-fact
and agent, or any such substitute or substitutes, shall lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ Donald B. Shackelford
--------------------------
Donald B. Shackelford
Director
<PAGE> 13
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS THAT: The undersigned director of The
Progressive Corporation, an Ohio corporation (the "Company"), has made,
constituted and appointed, and by this instrument does make, constitute and
appoint, Jeffrey W. Basch, Charles B. Chokel, David M. Schneider, Dane A.
Shrallow and Michael R. Uth, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to affix for him and in his name, place and stead, in any and all capacities, as
attorney-in-fact and agent, his signature to a Registration Statement on Form
S-8 or other form in order to register under the Securities Act of 1933, as
amended, up to 200,000 of the Company's Common Shares, $1.00 par value, issuable
under The Progressive Corporation 1998 Directors' Stock Option Plan, and to any
and all amendments, post-effective amendments and exhibits to such Registration
Statement, and to any and all applications, instruments and other documents
pertaining thereto, giving and granting unto each such attorney-in-fact and
agent full power and authority to do and perform any and all acts and things
whatsoever necessary or appropriate to be done in and about the premises, as
fully for all intents and purposes as he might or could do if personally
present, and hereby ratifying and confirming all that each such attorney-in-fact
and agent, or any such substitute or substitutes, shall lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed in the
capacities and on the date indicated below.
Date: April 24, 1998 /s/ Paul B. Sigler
-------------------
Paul B. Sigler
Director
<PAGE> 1
EXHIBIT 24(b)
-------------
Resolutions of the Board of Directors
of the Registrant as to Power of Attorney,
certified by Secretary of the Registrant
<PAGE> 2
THE PROGRESSIVE CORPORATION
---------------------------
CERTIFIED COPY OF RESOLUTIONS
-----------------------------
RESOLVED, that The Progressive Corporation (the "Company") hereby approves
and adopts The Progressive Corporation 1998 Director's Stock Option Plan, in
form attached hereto as Exhibit A (the "Plan"), subject to approval by the
holders of the Company's Common Shares ("Shareholders"); and
FURTHER RESOLVED, that the Plan be submitted to the Shareholders for
approval at the 1998 Annual Meeting of Shareholders; and
FURTHER RESOLVED, that if the Plan is approved by Shareholders, the Plan
will replace and supersede The Progressive Corporation 1990 Directors' Stock
Option Plan, as amended and restated (the " 1990 Plan"), which will terminate
upon approval of the Plan, provided that all Stock Options granted under the
1990 Plan which are outstanding at the time of the termination of the 1990 Plan
shall be unaffected by such termination, but shall continue in full force and
effect in accordance with their respective terms, until the expiration or
exercise thereof, and
FURTHER RESOLVED, that the Company reserve 200,000 Common Shares for
issuance pursuant to stock options which may hereafter be granted under the
Plan, which amount may be further increased by the Board of Directors, from time
to time, in its sole discretion, subject to any necessary approval by
Shareholders; and
FURTHER RESOLVED, that the Chairman of the Board, President, the Treasurer
and the Secretary of the Company be, and each of them with full power to act
without the others is, hereby authorized and directed to prepare, or cause to be
prepared, and to execute and file or cause to be executed and filed with the
Securities and Exchange Commission (the "Commission"), under the Securities Act
of 1933, as amended (the "Act"), for and on behalf of the Company, a
Registration Statement on Form S-8 (which, together with the related Prospectus
and all exhibits and other documents relating thereto, is herein referred to as
the "Registration Statement") with respect to the registration of the additional
Common Shares of the Company hereinabove authorized for issuance under the Plan
(the "Plan Securities"), with such changes (including, but not limited to,
changes of a substantive nature) as any such officer or officers shall approve,
which approval shall be shown conclusively by the execution of the Registration
Statement by or on behalf of any such officer or officers; and
FURTHER RESOLVED, that the Chairman of the Board, the President, the
Treasurer and the Secretary of the Company be, and each of them with full power
to act without the others is, hereby authorized and empowered, for and on behalf
of the Company, to prepare or cause to be prepared and to execute such
amendments and supplements to the Registration Statement as they, or any of
them, may deem necessary or desirable, or as may be required by the Commission;
to cause such amendments and supplements, when duly executed (if required), to
be filed with the Commission; and to do all such other acts and things and to
execute all such other documents as they, or any of them, deem necessary or
desirable in order to cause the Statement to comply with the Act and the rules
and regulations promulgated by the Commission pursuant thereto (the "Rules and
Regulations"), and to become effective under the Act and the Rules and
Regulations; and
FURTHER RESOLVED, that when the Registration Statement has become
effective, the Chairman of the Board, the President, the Treasurer and the
Secretary of the Company be, and each of them with full power to act without the
others is, hereby authorized and empowered, for and on behalf of the Company, to
execute and deliver any and all instruments, certificates and/or other
documents, and to do any and all things, as may be necessary or appropriate in
connection with the issuance of Plan Securities under the Plan; and
FURTHER RESOLVED, that David M. Schneider, or such other individual as the
Executive Compensation Committee of the Board of Directors may designate in his
stead, is hereby named as the person authorized to receive service of all
notices, orders, communications and other documents
<PAGE> 3
which may be issued or sent by the Commission in connection with the
Registration Statement and any and all amendments and supplements thereto, with
all the powers consequent upon such designation under the Rules and Regulations;
and
FURTHER RESOLVED, that any director or officer of the Company required by
law to affix his signature to the Registration Statement and any and all
amendments and supplements thereto may affix his signature personally, or by any
attorney-in-fact, duly constituted in writing by said director or officer to
sign his name thereto; and
FURTHER RESOLVED, that Charles B. Chokel, Peter B. Lewis, David M.
Schneider, Dane A. Shrallow and Michael R. Uth 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 to the Registration Statement and any and all
applications or other documents to be filed with the Commission and any and all
applications or other documents to be filed with any governmental or private
agency or official relative to the issuance of the Plan 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-in-fact or any such substitute or
substitutes and, without implied limitation, including in the above the
authority to do the foregoing things on behalf of the Company in the name of the
person so acting or on behalf and in the name of any duly authorized officer of
the Company; and the Chairman of the Board, the President, the Treasurer and the
Secretary be, and each hereby is, authorized and empowered for and on behalf of
the Company to execute a Power of Attorney evidencing the foregoing appointment,
and
FURTHER RESOLVED, that Messrs. R. Steven Kestner, David M. Schneider, Dane
A. Shrallow and Michael R. Uth be, and each of them with full power to act
without the others is, hereby authorized and empowered to sign the Registration
Statement and any and all amendments and supplements to the Registration
Statement, on behalf of and as attorneys-in-fact for the principal executive
officer, principal accounting officer, principal financial officer or any other
officer of the Company, including, without limitation, the Chairman of the
Board, the President, the Treasurer and the Secretary, and on behalf of and as
attorneys for each director of the Company; and
FURTHER RESOLVED, that each of the officers of the Company and its
attorneys, Messrs. R. Steven Kestner, David M. Schneider, Dane A. Shrallow and
Michael R. Uth, be, and each of them with full power to act without the others
is, hereby authorized and empowered to appear on behalf of the Company before
the Commission in connection with any and all matters relating to the
Registration Statement and all amendments and supplements thereto; and
FURTHER RESOLVED, that the Chairman of the Board, the President, the
Treasurer and the Secretary of the Company be, and each of them with full power
to act without the others is, hereby authorized and empowered, in the name and
on behalf of the Company, to take any and all action which they, or any of them,
deem necessary or advisable in order to obtain a permit to issue Plan
Securities, or to register or qualify the Plan Securities for issuance, or to
request an exemption from registration of the Plan Securities, or to register or
obtain a license for the Company as a dealer or broker, under the securities
laws of such states of the United States of America and of such foreign
jurisdictions as any such officer or officers may deem advisable, and in
connection with such registrations, permits, licenses, qualifications and
exemptions to execute, acknowledge, verify, deliver, file and publish or cause
to be published all such applications, reports, resolutions, surety bonds,
consents to service of process, appointments of attorneys to receive service of
process, powers of attorney and other papers and instruments, and to take any
and all further action, which they may deem necessary or advisable in order to
maintain such registration or qualification in effect for as long as they may
deem to be in the best interests of this Company or as required by law; and that
the execution by such officer or officers of any such document or the taking of
any such action in connection with the foregoing matters shall be deemed to be
conclusive evidence that such officer or officers deem(s) the taking of any such
action to be necessary or proper and in the best interests of the Company and
approves such action; and
<PAGE> 4
FURTHER RESOLVED, that the Common Shares of the Company to be issued
pursuant to and in accordance with the terms and provisions of the Plan and the
Registration Statement shall be duly authorized and issued, fully paid and
non-assessable Common Shares of the Company, free of any shareholder preemptive
rights; and
RESOLVED, that the preparation, execution and filing with the New York
Stock Exchange of a Listing Application or a Supplemental Listing Application
(including all exhibits and supporting material) to list the 200,000 Common
Shares to be issued under the Plan be, and it hereby is, in all respects
authorized and approved; and that the officers of the Company and its attorneys,
Messrs. R. Steven Kestner, David M. Schneider, Dane A. Shrallow and Michael R.
Uth, be, and each of them is, hereby authorized and empowered, at such time as
to them shall seem advisable, to make application for such listing 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 listing; and
that such officers and attorneys be, and each of them hereby is, 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, with
authority to make such changes in any such Listing Application as shall be
presented thereto 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 such listing; and
FURTHER RESOLVED, that the authority of National City Bank ("NCB"), as
transfer agent and registrar for the Company's outstanding Common Shares, be,
and it hereby is, extended to include the original issue and the transfer and
registration from time to time of the additional Common Shares to be issued
under the Plan, as herein authorized; and
FURTHER RESOLVED, that for the purpose of the original issue of Common
Shares by the Company under the Plan as aforesaid, NCB, as transfer agent and
registrar for the Common Shares, be, and is hereby, authorized and directed to
(i) countersign as such transfer agent by manual or facsimile signature stock
certificates for the Common Shares to be so issued by the Company when such
certificates shall be delivered to such transfer agent duly executed on behalf
of the Company, (ii) procure as registrar of the Common Shares the registration
of such certificates, and (iii) deliver such certificates, when so countersigned
and registered, to or upon the order of the persons entitled thereto as set
forth in the order or orders of the Company for the issuance of the Common
Shares; and
FURTHER RESOLVED, that the Board of Directors of the Company hereby adopts
and incorporates by reference any form of specific resolution to carry into
effect the purpose and intent of the foregoing resolutions, or covering
authority included in matters authorized in the foregoing resolutions, including
forms of resolutions in connection therewith that may be required by the
Commission, the National Association of Securities Dealers, Inc., the New York
Stock Exchange and any state, institution, person or agency, and the Secretary
of the Company is hereby directed to insert a copy thereof in the minute book of
the Company Following the minutes of this meeting and certify the same as having
been duly adopted thereby; and
FURTHER RESOLVED, that the Executive Compensation Committee of the Board
be, and it hereby is, authorized and directed, for and on behalf of the Company,
to administer the Plan in accordance with its terms, to interpret the Plan and
make all determinations thereunder, to adopt, alter and repeal such rules,
guidelines and practices governing the Plan as it shall deem advisable from time
to time and to otherwise exercise all of the powers and authority granted to
such Committee under the Plan; and
FURTHER RESOLVED, that the Chairman of the Board, the President, the
Treasurer and the Secretary of the Company be, and each of them with full power
to act without the others is, hereby authorized and empowered to do or cause to
be done all such acts or things, to cause to be paid all necessary fees and
expenses, and to make, execute and deliver, or cause to be made, executed and
delivered, all such agreements, documents, instruments and certificates, in the
name of and on behalf of the Company or otherwise, as they or any of them may
deem necessary, advisable or appropriate to effectuate or carry out the purposes
and intent of the foregoing resolutions; and
<PAGE> 5
FURTHER RESOLVED, that any and all actions heretofore or hereafter taken by
any officer or officers of the Company within the terms of the foregoing
resolutions be and are hereby ratified and confirmed as the authorized acts and
deeds of the Company.
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 by the Board of Directors of the Company at a Meeting
held on February 6, 1998; 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 1st day of May, 1998.
/s/ David M. Schneider
---------------------------------
David M. Schneider
[SEAL]
