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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 26, 1999
THE PROGRESSIVE CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 1-9518 34-0963169
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
6300 Wilson Mills Road, Mayfield Village, Ohio 44143
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 440-461-5000
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On February 23, 1999, The Progressive Corporation (the "Company") began an
underwritten public offering of $300 million aggregate principal amount of the
Company's 6-5/8% Senior Notes due 2029, to be issued under the Company's
previously filed Registration Statement on Form S-3 (File No. 333-48935) (the
"Registration Statement").
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following Exhibits are filed as part of this report and as
an Exhibit to the Registration Statement:
Exhibit No. Description
4.4 Second Supplemental Indenture dated
February 26, 1999 between The
Progressive Corporation and State
Street Bank and Trust Company, as
Trustee
4.5 Form of 6-5/8% Senior Notes due 2029
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: February 26, 1999
THE PROGRESSIVE CORPORATION
By: /s/ David M. Schneider
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Name: David M. Schneider
Title: Secretary
3
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EXHIBIT INDEX
Exhibit No. Form 8-K
Under Reg. Exhibit
S-K Item 601 No. Description of Exhibit
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4 4.4 Second Supplemental Indenture dated February
26, 1999 between The Progressive Corporation
and State Street Bank and Trust Company, as
Trustee
4 4.5 Form of 6-5/8% Senior Notes due 2029
4
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Exhibit No. 4.4
Second Supplemental Indenture dated February 26, 1999
between The Progressive Corporation
and State Street Bank and Trust Company, as Trustee
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THE PROGRESSIVE CORPORATION
and
STATE STREET BANK AND TRUST COMPANY, as
Successor Trustee
SECOND SUPPLEMENTAL INDENTURE
6-5/8% Senior Notes due 2029
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of February 26, 1999,
between THE PROGRESSIVE CORPORATION, an Ohio corporation (the "ISSUER") and
STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company ("SSB"), in
its capacity as Successor Trustee.
W I T N E S S E T H:
WHEREAS, the Issuer entered into an Indenture, dated as of September
15, 1993 (as supplemented by the First Supplemental Indenture, dated as of March
15, 1996, the "INDENTURE"), with the First National Bank of Boston, in its
capacity as Trustee, pursuant to which the Issuer may from time to time issue
its unsecured debentures, notes and other evidences of indebtedness in one or
more series; and
WHEREAS, the Issuer entered into a Supplemental Indenture, dated as of
March 15, 1996, confirming the succession of SSB as trustee under the Indenture;
and
WHEREAS, Article Eight of the Indenture provides for various matters
with respect to any series of Securities issued under the Indenture to be
established in an indenture supplemental to the Indenture; and
WHEREAS, Section 8.1(c) of the Indenture provides that the Issuer, when
authorized by its Board of Directors, and the Trustee may from time to time and
at any time enter into an indenture supplemental to the Indenture to add on to
the covenants of the Issuer certain further covenants, restrictions, conditions
or provisions.
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NOW THEREFORE:
In consideration of the premises and other good and valuable
consideration, the parties hereto mutually covenant and agree as follows:
ARTICLE 1
RELATION TO INDENTURE; DEFINITIONS
SECTION 1.01. Integral Part. This Second Supplemental Indenture
constitutes an integral part of the Indenture.
SECTION 1.02. General Definitions. For all purposes of this Second
Supplemental Indenture:
(a) capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(b) all references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Second
Supplemental Indenture; and
(c) the terms "HEREIN", "HEREOF", "HEREUNDER" and other words of
similar import refer to this Second Supplemental Indenture.
SECTION 1.03. Definitions. The following definitions shall apply to
this Second Supplemental Indenture:
"CONSOLIDATED TANGIBLE NET WORTH" means, at any date, the total assets
appearing on the consolidated balance sheet of the Issuer and its consolidated
subsidiaries as of the end of the then most recent fiscal quarter of the Issuer,
prepared in accordance with generally accepted accounting principles, less the
sum of (a) the total liabilities appearing on such balance sheet and (b)
intangible assets. "INTANGIBLE ASSETS" means, for the purposes of this
definition, the value, as shown on or reflected in such balance sheet, of (i)
all trade names, trademarks, licenses, patents, copyrights and goodwill, (ii)
organizational costs and (iii) unamortized debt discount and expense, less
unamortized premium.
"DESIGNATED SECURITIES" means the series of Securities designated by
the Issuer as its "6-5/8% Senior Notes due 2029".
"DESIGNATED SUBSIDIARY" means (i) Progressive Casualty Insurance
Company, an Ohio
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corporation, so long as it remains a subsidiary of the Issuer, (ii) any other
consolidated subsidiary of the Issuer the assets of which constitute 10% or more
of the Total Assets, and (iii) any subsidiary which is a successor to all or
substantially all of the business or properties of any such subsidiary.
"TOTAL ASSETS" means, at any date, the total assets appearing on the
consolidated balance sheet of the Issuer and its consolidated subsidiaries as of
the end of the then most recent fiscal quarter of the Issuer, prepared in
accordance with generally accepted accounting principles.
ARTICLE 2
ADDITIONAL COVENANTS
SECTION 2.01. Limitation on Liens. The Issuer will not, nor will it
permit any Designated Subsidiary to, incur, issue, assume or guarantee any
indebtedness for money borrowed if (i) that indebtedness is secured by a pledge,
mortgage, deed of trust or other lien on any shares of stock or indebtedness of
any Designated Subsidiary (a "LIEN"), and (ii) the aggregate amount of the
indebtedness so secured exceeds an amount equal to 15% of the Issuer's
Consolidated Tangible Net Worth, unless the Designated Securities are also
secured equally and ratably with such other indebtedness. For purposes of this
restriction, a "LIEN" will not include the pledge to, or deposit with, any state
or provincial insurance regulatory authorities of any investment securities by
the Issuer or any of its subsidiaries.
The foregoing restriction shall not apply to indebtedness secured by:
(a) Liens on any shares of stock or indebtedness of or acquired from a
corporation merged or consolidated with or into, or otherwise acquired by, the
Issuer or a Designated Subsidiary;
(b) Liens to secure indebtedness of a Designated Subsidiary to the
Issuer or to another Designated Subsidiary, but only as long as such
indebtedness is owned or held by the Issuer or a Designated Subsidiary; and
(c) Any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any lien referred to in (a)
and (b).
SECTION 2.02. Consolidation, Merger, Sale, Conveyance and Lease. The
Issuer will not consolidate or merge with or into any other Person or Persons,
or sell, convey or lease all or substantially all of its property to any other
Person, unless:
(a) the Person formed by such consolidation, or into which the Issuer
is merged or which acquires or leases all or substantially all of the property
of the Issuer, is a corporation or
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other entity organized under the laws of the United States, any state thereof or
the District of Columbia, and such Person expressly assumes the Issuer's
obligations under the Designated Securities and the Indenture; and
(b) immediately after giving effect to the transaction, no Event of
Default exists.
This restriction shall not apply if the Issuer is the Person that
survives any such transaction.
In the event of a conflict between any provision in this Section and
any provision in Article 9 of the Indenture, Article 9 of the Indenture shall
govern.
ARTICLE 3
MISCELLANEOUS PROVISIONS
SECTION 3.01. Applicability of this Second Supplemental Indenture. The
provisions of this Second Supplemental Indenture will be applicable solely to
the Designated Securities.
SECTION 3.02. Adoption, Ratification and Confirmation. The Indenture,
as supplemented by this Second Supplemental Indenture, is in all respects hereby
adopted, ratified and confirmed.
SECTION 3.03. Counterparts. This Second Supplemental Indenture may be
executed in any number of counterparts, each of which when so executed shall be
deemed an original; and all such counterparts shall together constitute but one
and the same instrument.
SECTION 3.04. GOVERNING LAW. THIS SECOND SUPPLEMENTAL INDENTURE SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto fixed and attested as of the day and year first written above.
THE PROGRESSIVE CORPORATION
By:
--------------------------------
W. Thomas Forrester
Treasurer
Attest:
By:
--------------------------------
David M. Schneider
Secretary
STATE STREET BANK AND TRUST
COMPANY, as Successor Trustee
By:
--------------------------------
Name:
Title:
Attest:
By:
--------------------------------
Name:
Title:
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STATE OF OHIO )
) ss:
COUNTY OF CUYAHOGA )
On this __th day of February, 1999, before me personally came W. Thomas
Forrester, to me personally known, who, being by me duly sworn, did depose and
say that he is a resident of Cuyahoga County, Ohio; that he is an officer of THE
PROGRESSIVE CORPORATION, one of the corporations described in and which executed
the above instrument; that he knows the corporate seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
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Notary Public
My commission expires:
[Notarial Seal]
STATE OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
On this __th day of February, 1999, before me personally came
__________________, to me personally known, who, being by me duly sworn, did
depose and say that he is a resident of Bristol County, Massachusetts; that he
is an authorized officer of STATE STREET BANK AND TRUST COMPANY, one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to said
instruments is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed her name thereto by
like authority.
--------------------------------
Notary Public
My commission expires:
[Notary Seal]
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Exhibit No. 4.5
Form of 6-5/8% Senior Notes due 2029
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(FACE OF SECURITY)
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Issuer or
its agent for registration of transfer, exchange or payment, and such
certificate is registered in the name of Cede & Co., or in such other name as
requested by an authorized representative of DTC, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
REGISTERED REGISTERED
NO. R-___ $___________
CUSIP No. 743315 AJ 2
THE PROGRESSIVE CORPORATION
6-5/8% SENIOR NOTE DUE 2029
THE PROGRESSIVE CORPORATION, an Ohio corporation (the
"Issuer"), for value received, hereby promises to pay to CEDE & Co., c/o The
Depository Trust Company, 55 Water Street, New York, New York 10041 or
registered assigns, at the office or agency of the Issuer at the office of the
Trustee in Boston, Massachusetts, the principal sum of _________________________
($________________) on March 1, 2029, in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay interest semiannually on March 1
and September 1 of each year, commencing on September 1, 1999, on said principal
sum at said office or agency, in like coin or currency, at the rate per annum
specified in the title of this Note, from the March 1 or the September 1, as the
case may be, next preceding the date of this Note to which interest has been
paid, unless the date hereof is a date to which interest has been paid, in which
case from the date of this Note, or unless no interest has been paid on the
Notes, in which case from March 1, 1999, until payment of said principal sum has
been made or duly provided for; provided, that payment of interest may be made
at the option of the Issuer by check mailed to the address of the person
entitled thereto as such address shall appear on the Security Register.
Notwithstanding the foregoing, if the date hereof is after the fifteenth day of
March or September, as the case may be, and before the following March 1 or
September 1, this Note shall bear interest from such March 1 or September 1;
provided, that if the Issuer shall default in the payment of interest due on
such March 1 or September 1, then this Note shall bear interest from the next
preceding March 1 or September 1, to which interest has been paid or, if no
interest has been paid on this Note, from March 1, 1999. The interest so payable
on any March 1 or September 1 will, subject to certain exceptions provided in
the Indenture referred to on the reverse hereof, be paid to the person in whose
name this Note is registered at the close of business on February 15 or August
15, as the case may be, next preceding such March 1 or September 1.
Reference is made to the further provisions of this Note set
forth on the reverse hereof. Such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed by
the Trustee under the Indenture referred to on the reverse hereof.
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IN WITNESS WHEREOF, The Progressive Corporation has caused this
instrument to be signed by its duly authorized officers and has caused its
corporate seal to be affixed hereto or imprinted hereon.
THE PROGRESSIVE CORPORATION
[CORPORATE SEAL] By:_________________________________
W. Thomas Forrester
Treasurer
Attest:_____________________________
David M. Schneider
Secretary
Dated: _____________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities, of the series designated herein,
referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:_________________________________
Authorized Signatory
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(BACK OF SECURITY)
THE PROGRESSIVE CORPORATION
6-5/8% SENIOR NOTE DUE 2029
This Note is one of a duly authorized issue of debentures, notes, bonds
or other evidences of indebtedness of the Issuer (hereinafter called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an indenture dated as of September 15, 1993, as heretofore
supplemented and amended (herein called the "Indenture"), between the Issuer and
State Street Bank and Trust Company, as Trustee (herein called the "Trustee"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Issuer and the Holders of the
Securities. The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any) and may otherwise vary as in the
Indenture provided. This Note is one of a series designated as the 6-5/8% Senior
Notes Due 2029 of the Issuer, limited in aggregate principal amount to
$300,000,000.
In case an Event of Default, as defined in the Indenture, with respect
to the 6-5/8% Senior Notes Due 2029 shall have occurred and be continuing, the
principal hereof may be declared, and upon such declaration shall become, due
and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of not less than 66-2/3% in aggregate
principal amount of the Securities at the time Outstanding (as defined in the
Indenture) of all series to be affected (voting as one class), evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the Holders of the Securities of each such series; provided, however, that no
such supplemental indenture shall (i) extend the final maturity of any Security,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of any interest thereon, or impair or affect the rights of any Holder to
institute suit for the payment thereof, without the consent of the Holder of
each Security so affected or (ii) reduce the aforesaid percentage of Securities,
the Holders of which are required to consent to any such supplemental indenture,
without the consent of the Holder of each Security so affected. It is also
provided in the Indenture that, with respect to certain defaults or Events of
Default regarding the Securities of any series, prior to any declaration
accelerating the maturity of such Securities, the Holders of a majority in
aggregate principal amount Outstanding of the Securities of such series may on
behalf of the Holders of all the Securities of such series waive any such past
default or Event of Default and its consequences. The preceding sentence shall
not, however, apply to a default in the payment of the principal of or premium,
if any, or interest on any of the Securities. Any such consent or waiver by the
Holder of this Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Note and any Note which may be issued in exchange or substitution
herefor, irrespective of whether or not any notation thereof is made upon this
Note or such other Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note in
the manner, at the respective times, at the rate and in the coin or currency
herein prescribed.
The Notes are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000 at the office or
agency of the Issuer at the office of the Trustee in Boston, Massachusetts, and
in the manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge. Notes may be exchanged for a like
aggregate principal amount of Notes of other authorized denominations.
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The Notes of the series designated as the 6-5/8% Senior Notes due 2029
are subject to redemption upon not more than 60 or less than 30 days' notice by
mail, at any time or from time to time, in whole or in part, at the option of
the Issuer on any date (a "Redemption Date"), at a redemption price equal to the
greater of (i) 100% of the principal amount of the Notes to be redeemed or (ii)
a "Make Whole Amount," calculated as described below, plus, in either case,
accrued and unpaid interest on the principal amount being redeemed to such
Redemption Date; provided that installments of interest on Notes which are due
and payable on an interest payment date falling on or prior to the relevant
Redemption Date shall be payable to the Holders of such Notes, registered as
such at the close of business on the relevant record date, according to the
terms and the provisions of the Indenture.
The "Make Whole Amount" means an amount equal to the sum of the present
values of the Remaining Scheduled Payments discounted to such Redemption Date on
a semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at a rate equal to the Treasury Rate plus 25 basis points.
"Remaining Scheduled Payments" means the remaining scheduled payments
of the principal and interest that would be due on the Note being redeemed after
the relevant Redemption Date; provided, however, that if the redemption date is
not a scheduled interest payment date, the amount of the next succeeding
scheduled interest payment on such Note will be reduced by the amount of
interest accrued on such Note to such Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date for the
Notes, the rate per annum equal to the semiannual equivalent yield to maturity
of the Comparable Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be
calculated on the third Business Day immediately preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes.
"Independent Investment Banker" means Donaldson, Lufkin & Jenrette
Securities Corporation or, if such firm is unwilling or unable to select the
Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Trustee after consultation with the Issuer.
"Comparable Treasury Price" means with respect to any Redemption Date
for the Notes the average of three Reference Treasury Dealer Quotations obtained
by the Trustee for such Redemption Date.
"Reference Treasury Dealer" means: (i) Donaldson, Lufkin & Jenrette
Securities Corporation and its successor; provided, however, that if the
foregoing shall cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Issuer will substitute therefore
another nationally-recognized investment banking firm that is a Primary Treasury
Dealer, and (ii) any other two Primary Treasury Dealers selected by the Issuer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m. New York
City time, on the third Business Day preceding such Redemption Date.
In the event of redemption of this Note in part only, a new Note or
Notes of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Issuer at the office of the Trustee in Boston,
Massachusetts, a new Note or Notes of authorized denominations for an equal
aggregate principal
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amount will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Indenture, without charge except for any tax or
other governmental charge imposed in connection therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute owner of
this Note (whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon), for the purpose of receiving
payment of, or on account of, the principal hereof and, subject to the
provisions on the face hereof, interest hereon, and for all other purposes, and
neither the Issuer nor the Trustee nor any authorized agent of the Issuer or the
Trustee shall be affected by notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, shareholder, officer or director, as such, of the
Issuer or of any successor corporation, either directly or through the Issuer or
any successor corporation, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance hereof and as part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
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(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
- --------------------------------------------------------------------------------
attorney to transfer said Note on the books of the Issuer, with full power of
substitution in the premises.
Dated
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NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within instrument in
every particular, without alteration or
enlargement or any change whatever.
