UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) December 11, 2012 (December 7, 2012)
THE PROGRESSIVE CORPORATION
(Exact name of registrant as specified in its charter)
| Ohio | 1-9518 | 34-0963169 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 6300 Wilson Mills Road, Mayfield Village, Ohio | 44143 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code 440-461-5000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On December 7, 2012, the Board of Directors of The Progressive Corporation approved the Sixth Amendment (the “Amendment”) to The Progressive Corporation 2010 Equity Incentive Plan (together with all prior amendments, the “Plan”), a shareholder-approved Plan under which equity awards are made to certain senior employees of the company, including the named executive officers identified in the company’s proxy statement dated March 9, 2012.
Among other provisions in the Amendment, the following changes will be applicable to all restricted stock unit awards made under the Plan after February 2013 (outstanding awards issued on or before February 28, 2013, will continue to be governed by the Plan provisions applicable to those awards):
| • | For a participant who becomes or is “qualified retirement” eligible (which occurs when he or she is age 55 or above and has worked for the company for 15 years or more), 50% of unvested time-based awards will no longer vest at the time of retirement, as happens under the current Plan provisions. Instead, under the Amendment, 50% of each award will vest (i) as to outstanding awards, when the participant becomes eligible for a qualified retirement, and (ii) as to new awards, promptly after the grant of each new award received by the participant. The remaining half of each award would then vest only upon the occurrence of the contractual time-based vesting provisions controlling the award, and not upon the participant’s retirement or death. |
| • | For performance-based restricted stock unit awards, the Plan has been modified to provide that upon achieving eligibility for a qualified retirement, the Plan’s provisions relating to the death of a participant will no longer apply. As a result, upon the death of a participant who is qualified retirement eligible, the participant’s estate will be entitled to retain the then-unvested performance-based awards (subject to the satisfaction of the performance criteria that are a condition to the vesting of the awards) to the extent provided in the qualified retirement provisions in Section 10 of the Plan. |
| • | As to any participant who is not qualified retirement eligible, if such a participant’s employment terminates as a result of death, the participant’s estate will be entitled to the vesting of time-based awards that otherwise would vest during the ensuing one year period, and such vesting will occur within 60 days after the date of death (but not later than the contractual vesting date), instead of at the time of the contractual vesting date as required by the current Plan provisions. A participant’s outstanding performance awards (if any) would continue to vest only to the extent that the applicable performance criteria are satisfied during the year following the participant’s death. |
In addition, the Amendment provides that if the Compensation Committee determines that a qualified retirement eligible participant engages in a “disqualifying activity” (such as working for a material competitor of the company or disclosing confidential company information), the disqualification will be effective as of the date of the disqualifying activity (the “disqualification date”), instead of the date of the Committee’s determination as under the current Plan provisions. Accordingly, in the event such a determination is made, all outstanding awards will be deemed to be terminated and forfeited as of the disqualification date, and the company has the authority to recover any shares or proceeds that resulted from vesting events occurring after the disqualification date and prior to the date of the Committee’s determination.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits |
See exhibit index on page 4.
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 hereunto duly authorized.
Date: December 11, 2012
| THE PROGRESSIVE CORPORATION | ||
| By: | /s/ Jeffrey W. Basch | |
| Name: | Jeffrey W. Basch | |
| Title: | Vice President and Chief Accounting Officer | |
EXHIBIT INDEX
| Exhibit No. |
Form 8-K No. |
Description | ||
| 10 | 10.1 | Sixth Amendment to The Progressive Corporation 2010 Equity Incentive Plan | ||
Exhibit 10.1
SIXTH AMENDMENT
TO
THE PROGRESSIVE CORPORATION
2010 EQUITY INCENTIVE PLAN
WHEREAS, The Progressive Corporation 2010 Equity Incentive Plan, as previously amended (the “Plan”), is currently in effect; and
WHEREAS, it is deemed desirable to amend the Plan;
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Section 10(d) of the Plan is hereby deleted and the following is substituted in its place:
“(d) If the Committee determines that the Participant has engaged or is engaging in any Disqualifying Activity, then:
(i) if the Vesting Date of any Award Installment under an Award then held by the Participant is scheduled to occur after the date of Committee’s determination that the Participant has engaged in a Disqualifying Activity (or with respect to vested Stock Options and Stock Appreciation Rights, such Award Installment has not been exercised by the Participant), then each such Award Installment shall terminate immediately upon the date of the Committee’s determination, and all related shares of Stock, Units, Stock Options or Stock Appreciation Rights shall be forfeited automatically at that time; and
(ii) if the Vesting Date of any Award Installment occurred (or with respect to vested Stock Options and Stock Appreciation Rights, such Award Installment was exercised by the Participant) after the Disqualification Date but prior to the date of the Committee’s determination with respect thereto, such Award Installment shall be deemed to have automatically terminated and forfeited as of the Disqualification Date. Accordingly, promptly upon the Company’s demand, the Participant shall transfer or pay to the Company all shares of Stock (or, if such Stock has been sold or otherwise transferred by the Participant, an equivalent number of shares of Stock or, at the Company’s election, the value thereof as of the applicable Vesting Date or exercise date) or other proceeds received or deferred by the Participant in connection with such vesting (or exercise) event(s), and the Participant will be entitled to no consideration in connection therewith. If such shares of Stock or other proceeds are not transferred or paid to the Company promptly upon such demand, then the Company will have the right to recover from the Participant all such shares or other proceeds, plus the costs and expenses incurred by the Company in recovering such shares or other proceeds from the Participant and enforcing its rights hereunder, including, without limitation, reasonable attorneys fees and court costs, and plus interest at the rate of eight percent (8%) per annum or, if lower, the highest rate permitted by law, calculated from the applicable Vesting Date (or exercise date).
Any determination by the Committee hereunder, which may act upon the recommendation of the Chief Executive Officer or other senior officer of the Company, that the Participant has engaged or is engaging in any Disqualifying Activity, and as to the Disqualification Date, shall be final and conclusive.”
2. In Section 7(b)(iv), the phrase “at the time and to the extent such Award would have become vested” is hereby revised to delete the words “at the time and”; vesting events for Time-Based Awards that are required by that section will be processed on or before the earlier of sixty (60) days after the Participant’s death and the scheduled vesting date.
3. With respect to Awards of Restricted Stock Units to be made after February 2013, the following shall apply:
A. A new Section10A shall be inserted into the Plan, as follows:
“SECTION 10A. Special Provisions Relating to Awards of Restricted Stock Units Made after February 2013.
With respect to each Award of Restricted Stock Units made after February 2013, but subject to all other applicable provisions of this Plan and the Award Agreement relating to such Awards:
(a) In Section 1(b):
(i) The definition of “Qualified Retirement” is hereby modified to delete the words “death or” from the parenthetical preceding clause (a) therein; and
(ii) The following definition is hereby inserted:
“Qualified Retirement Eligibility Date” means the first day of the calendar month in which the Participant is scheduled to satisfy the age and years-of-service requirements for a Qualified Retirement.”
(b) In the first sentence of Section 5(b)(vi), the phrase “except as provided in Section 10” is hereby modified to read as follows: “except as provided in Sections 10 and 10A hereof”.
(c) Upon the occurrence of a Participant’s Qualified Retirement Eligibility Date, the provisions of Section 6(b)(v) (relating to the termination of a Participant’s employment by reason of death) shall not apply to such Award; and
(d) With respect to Awards of Time-Based Restricted Stock Units:
(i) If a Participant’s Qualified Retirement Eligibility Date occurs after the grant date for such an Award but prior to the Vesting Date for an Award Installment specified in the applicable Award Agreement, then upon the Participant’s Qualified Retirement Eligibility Date (or such date promptly thereafter as may be specified in the applicable Award Agreement), fifty percent (50%) of each such Award Installment shall vest and be free of applicable restrictions; the remaining fifty percent (50%) of each such Award Installment shall not vest at such time, but shall remain subject to the vesting schedule as set forth in the Award Agreement unless earlier forfeited in accordance with the Plan;
(ii) If the Participant’s Qualified Retirement Eligibility Date has occurred prior to the grant date for an Award, then fifty percent (50%) of each Award Installment under such Award shall vest and be free of applicable restrictions on the date promptly after the grant date that is specified in the applicable Award Agreement (the “Specified Date”); the remaining fifty percent (50%) of each such Award Installment shall not vest at such time, but shall remain subject to the vesting schedule as set forth in the Award Agreement unless earlier forfeited in accordance with the Plan; and
(iii) Section 10 (relating to Qualified Retirement) shall not apply to such Time-Based Awards, except as provided in this Subsection (d)(iii). Due to administrative reasons, the vesting event occurring upon the grant of a Time-Based Award under Subsection (d)(ii) above, or that would otherwise occur with respect to a Time-Based Award promptly after its grant under Subsection (d)(i) above, is expected to occur shortly thereafter on the Specified Date. If a Participant’s employment terminates in a Qualified Retirement after the grant date of a Time-Based Award but prior to the related Specified Date, the provisions of Section 10 hereof will apply to such Time-Based Award (but not to any other Awards of Restricted Stock Units made after February 2013 that are then outstanding).
(iv) Except as provided in the preceding Subsection (d)(iii), after a Participant’s Qualified Retirement Eligibility Date, all Awards of Time-Based Restricted Stock Units made after February 2013 (or portions thereof) that are unvested or subject to restriction at the time of the Participant’s termination of employment for any reason, including death, shall thereupon be forfeited automatically.”
B. Section 6(b)(v) is hereby amended as follows:
(a) The phrase “at the time and to the extent such Award would have become vested” is hereby revised to delete the words “at the time and”; vesting events for Time-Based Awards that are required under that section will be processed on or before the earlier of sixty (60) days after the Participant’s death and the scheduled vesting date; and
(b) The following new sentence is hereby inserted at the end of the existing provision:
“Notwithstanding the foregoing, as further provided in Section 10A hereof, with respect to Awards of Restricted Stock Units made after February 2013, this subsection shall no longer apply to any such Award upon the occurrence of a Participant’s Qualified Retirement Eligibility Date.”
This Amendment will be effective as of December 7, 2012.
| /s/ Charles E. Jarrett |
| Charles E. Jarrett |
| Secretary |