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) September 14, 2006
THE PROGRESSIVE CORPORATION
(Exact name of registrant as specified in its charter)
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| Ohio
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1-9518
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34-0963169 |
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.) |
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| 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) |
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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry Into a Material Definitive Agreement.
On September 14, 2006, Progressive Casualty Insurance Company (“PCIC”), a subsidiary of The
Progressive Corporation (the “Company”), entered into a sublease agreement (the “Sublease”) with
Acme Operating Corporation (“Acme”), a company owned by Peter B. Lewis, Chairman of the Board, for
space at an airplane hangar (the “Hangar”) that has been leased by PCIC. The Hangar was leased by
PCIC to house its aircraft and related flight operations, in order to enhance aircraft security,
improve operational controls and reduce certain operating expenses. The Sublease with Acme has
further enabled PCIC to defray the costs of the Hangar, making the Hangar a cost-effective
alternative to leasing commercial hangar space. The Sublease was unanimously approved by the
disinterested members of the Company’s Board of Directors prior to its execution.
Pursuant to the Sublease, Acme will sublease from PCIC approximately 1,000 square feet of office
and 13,750 feet of hangar/shop space, representing approximately one-half of the office space and
two-thirds of the hangar/shop areas in the Hangar. The term of the Sublease is five (5) years,
although Acme also has the option to extend the term for two (2) additional five (5) year periods,
provided that PCIC first extends the underlying prime lease. Rent under the Sublease for the
initial five (5) year term will be: (i) $43,234.00 per year, which is approximately sixty-three
percent (63%) of the total annual fixed rent to be paid by PCIC under the prime lease; plus (ii)
fifty percent (50%) of certain operating and maintenance expenses, real estate taxes and insurance
premiums. Rent for the two (2) available option periods, if applicable, will be determined as
specified in the Sublease. In addition, Acme will reimburse PCIC for fifty percent (50%) of the
costs incurred in constructing initial tenant improvements at the Hangar, which costs are currently
estimated to be approximately $500,000 in the aggregate. A copy of the Sublease is attached as an
Exhibit to this Report.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
See exhibit index on page 4.
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