Document:

EX-10B

 

Exhibit 10(B)

FIRST AMENDMENT

TO

THE PROGRESSIVE CORPORATION

2003 INCENTIVE PLAN

     WHEREAS, The Progressive Corporation 2003 Incentive Plan (the “Plan”) is currently in effect;
and

     WHEREAS, it is deemed desirable to amend the Plan;

     NOW, THEREFORE, the Plan is hereby amended in the respects, and as of the effective dates,
hereinafter set forth:

A. Amendment Subject to Shareholder Approval

     1. Subject to subparagraph A.2. below, the definition of the term “Performance Goals”, as set
forth in Section 1(c) of the Plan, is hereby amended and restated in its entirety to provide as
follows:

        ““Performance Goals” means the performance goals established by the Committee with
respect to any Award, which shall be based on one or more of the following measures:

	 	•	 	Profitability, which will be measured by one of the following, as
designated by the Committee:

	 	§	 	combined ratio
	 
	 	§	 	weighted combined ratio
	 
	 	§	 	variation in combined ratio from a targeted combined ratio
	 
	 	§	 	cohort combined ratio (the expected lifetime combined ratio for a group of
policies commencing during a specified time period)
	 
	 	§	 	return on equity, or
	 
	 	§	 	return on revenue; and

	 	•	 	Growth, which will be measured by changes from year to year or during a
Plan year in one of the following, as designated by the Committee:

	 	§	 	policies in force
	 
	 	§	 	vehicles insured
	 
	 	§	 	net earned premiums
	 
	 	§	 	earned premium per policy or per vehicle
	 
	 	§	 	earned car years, or
	 
	 	§	 	net written premiums.

Performance goals may be measured on a company-wide, subsidiary or business unit basis, or
any combination thereof. Performance goals may reflect absolute entity performance or a
relative comparison of entity performance to the performance of a peer group of entities or
other external measure.”

     2. The amendment included in Paragraph A.1. above is subject to approval by the holders of The
Progressive Corporation’s Common Shares, $1.00 par value (“shareholders”) in accordance with the
requirements of Section 162(m) of the Code. If shareholders do not approve such amendment at the

- 1 -

 

Annual Meeting of Shareholders in April 2007, Paragraph A.1 only of this First Amendment shall
automatically terminate and be of no further force or effect.

B. Amendments Not Requiring Shareholder Approval

     1. For all Awards (as defined in the Plan) to be made after February 2007, Section 5(b)(8) of
the Plan is hereby amended and restated in its entirety to provide as follows:

“Except as provided in this Section 5(b)(8), Section 5(b)(7) or Section 5(b)(9), the
Participant shall have, with respect to the shares of Restricted Stock awarded, all of the
rights of a shareholder of the Company, including the right to vote the Stock and the right
to receive any dividends. However, notwithstanding the preceding provisions of this Section
5(b)(8), each Participant’s rights to receive cash dividends on shares of Restricted Stock
awarded on or after March 1, 2007 (“Restricted Cash Dividends”) shall be subject to all the
terms and conditions regarding vesting and forfeitability that apply to the shares of
Restricted Stock to which such Restricted Cash Dividends relate, as set forth in this Plan
and the applicable Award Agreement, and each Participant will be paid such Restricted Cash
Dividends only if the Restricted Stock to which the Restricted Cash Dividends relate vests,
and all restrictions with respect thereto lapse. In addition, the following provisions
shall apply with respect to such Restricted Cash Dividends:

	 	(a)	 	All Restricted Cash Dividends shall accrue interest in accordance with Section
5(b)(8)(D) below for the period beginning on the date such Restricted Cash Dividends
otherwise would have been paid, but for the provisions of this Section 5(b)(8), and
ending on the payment date described below.
	 
	 	(b)	 	All Restricted Cash Dividends, together with interest calculated in accordance
with Section 5(b)(8)(D) below, shall be paid within sixty (60) days following the date
the shares of Restricted Stock to which the Restricted Cash Dividends relate vests, and
any restrictions with respect thereto lapse. The payment shall be made in cash and
will be subject to and reduced by any taxes required to be withheld. To the extent
required by Section 409A of the Code, each payment to a Participant who is a “specified
employee”, as defined in Section 409A of the Code, shall be delayed for six months
following the date such payment otherwise would have been made under the provisions of
this Section 5(b)(8).
	 
	 	(c)	 	All Restricted Cash Dividends and interest accrued thereon pursuant to Section
5(b)(8)(D) below, shall be recorded as a liability on the books of the Company. All
payments of Restricted Cash Dividends, and interest accrued thereon pursuant to Section
5(b)(8)(D) below, shall be made from the Company’s general funds and in no event shall
any Participant or other person have any proprietary rights of any nature with respect
to any funds, securities or other property owned by the Company or have any claims or
rights to any payment hereunder that are superior to any claims or rights of any
general creditor of the Company.
	 
	 	(d)	 	Interest shall accrue on all Restricted Cash Dividends at a rate equal to the
one month U.S. Dollar LIBOR, as in effect from time to time, compounded monthly. Under
no circumstances may the interest rate applied hereunder exceed a rate that is 120% of
the applicable federal long-term rate (monthly) (as determined by the Internal Revenue
Service pursuant to Section 1274(d) of the Code).
	 
	 	(e)	 	If any shares of Restricted Stock are forfeited in accordance with the terms of
this Plan and the related Restricted Stock Award Agreement, then any Restricted Cash
Dividends relating to such shares, and interest accrued thereon, shall also be
forfeited.

- 2 -

 

	 	 	Stock dividends issued with respect to Restricted Stock shall be treated as additional shares of Restricted Stock that are subject to the same restrictions and other terms and
conditions that apply to the shares with respect to which such dividends are issued.
	 
	 	 	To the extent any provision of this Section 5(b)(8) is subject to Section 409A of the Code,
the provision will be construed and interpreted to the maximum extent reasonably possible to
comply with Section 409A. Notwithstanding the foregoing, dividends on shares of Restricted
Stock awarded to Participants on or after March 1, 2007, shall not be subject to the vesting
and forfeitability conditions that apply to the shares of Restricted Stock to which such
dividends relate, and such dividends shall be paid in cash to the Participants at the time
that cash dividends are paid generally to shareholders of the Company, to the extent that
such dividends would otherwise be treated as deferred compensation in excess of the
applicable limitation under Section 409A of the Code or other applicable federal law
limitations on the amount of deferrals under non-qualified deferred compensation plans.”

     2. For all Awards to be made after February 2008, Section 5(b)(13)(D)(i) of the Plan is hereby
amended and restated in its entirety to provide as follows:

“(i) Qualified Retirement – any termination of a Participant’s employment with the
Company or its Subsidiaries or Affiliates for any reason (other than death, Disability or an
involuntary termination for Cause) if, at or immediately prior to the date of such
termination, the Participant satisfies both of the following conditions:

	 	(a)	 	the Participant is 55 year of age or older; and
	 
	 	(b)	 	the Participant has completed at least fifteen (15) years of service as an
employee of the Company or its Subsidiaries or Affiliates.”

     3. For all Awards to be made after February 2007, Section 7(c) of the Plan is hereby amended
and restated in its entirety to provide as follows:

“(c) Definition of Potential Change in Control. For purposes of Section 7(a), a “Potential
Change in Control” means 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 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.”

     4. For all Awards to be made after February 2007, a new Subsection (k) is hereby added to
Section 10, as follows:

“(k) (i) If (A) Performance-Based Restricted Stock vests hereunder on the basis of the
achievement of certain financial or operating results (which includes, for purposes hereof,
all of the Performance Goals that are available to the Committee under this Plan), (B) those
financial or operating results were incorrect and were subsequently the subject of a
restatement by Progressive within three (3) years after the date of vesting, and (C) the
vesting event would not have occurred if the actual financial or operating results had been
known at the time, then the Company shall have the right of recoupment from any executive
officer who received shares of Stock upon such vesting or who elected to defer such shares
at vesting; provided, however, that the Company will not have this right of recoupment if
the Committee determines that, notwithstanding such restatement, such Performance-Based
Restricted Stock would have nonetheless vested thereafter based on the Company’s actual
operating or financial results.. The

- 3 -

 

Company will have this right of recoupment whether or not the executive officer in question
was at fault or responsible in any way in causing such restatement In such circumstances,
the Company will have the right to recover from each executive officer, and each such
executive officer will refund to the Company, at the Company’s discretion, either (X) a
number of Shares equal to the number of Shares of Performance-Based Restricted Stock which
vested, or which such Participant elected to defer, upon the vesting thereof based on the
incorrect operating or financial results, or (Y) the dollar equivalent of such number of
Shares as of the date of such vesting, without interest. Such recovery, at the Committee’s
discretion, may be made by lump sum payment, installment payments, credits against unvested
Awards made hereunder, credits against future bonus or other incentive payments or awards,
or other appropriate mechanism.

     (ii) If any Participant engaged in fraud or other misconduct (as determined by the
Committee or the Board, in their respective sole discretion) resulting, in whole or in part,
in a restatement of the financial or operating results used to determine the vesting of
Performance-Based Restricted Stock hereunder, the Company will have the right to recoup from
such Participant, and the Participant will transfer or pay to the Company upon demand, in
the Company’s discretion, either (A) a number of shares of Stock equal to the number of
Shares of Performance-Based Restricted Stock which vested, or which such Participant elected
to defer, upon the vesting thereof based on the incorrect operating or financial results, or
(B) the dollar equivalent to such number of shares determined as of the date of such
vesting, plus interest at the rate of eight percent (8%) per annum or, if lower, the highest
rate permitted by law, calculated from such vesting date. The Company further shall have
the right to terminate and cancel any and all Awards previously made to such Participant at
any time hereunder that are then unvested, and to recover from such Participant the
Company’s costs and expenses incurred in connection with recovering such Shares or funds
from Participant and enforcing its rights under this subsection (ii), including, without
limitation, reasonable attorneys fees. There shall be no time limit on the Company’s right
to recover such amounts under this subsection (ii), except as otherwise provided by
applicable law.

     (iii) The rights contained in this subsection (k) shall be in addition to, and shall
not limit, any other rights or remedies that the Company may have under this Plan or under
any applicable law or regulation.

- 4 -EX-10.25

 

Exhibit 10.25

AGREEMENT TO TERMINATE CHANGE IN CONTROL BENEFITS

     THIS AGREEMENT TO TERMINATE CHANGE IN CONTROL BENEFITS, dated as of November 30, 2006 by and
between National City Corporation, a Delaware corporation (“National City”), and David A. Daberko
(“Executive”).

WITNESSETH:

     WHEREAS, the Executive and National City have previously entered into the agreements listed in
Exhibit A attached to this Agreement (the “Agreements”);

     WHEREAS, the Executive has been awarded benefits pursuant to various benefit plans maintained
by National City that are listed in Exhibit A (the “Benefit Plans” and together with the Agreements
the “Awarded Benefits”);

     WHEREAS, the Awarded Benefits provide for various benefits if a change in control of National
City occurs (as variously defined in the Award Benefits), including, but not limited to,
acceleration of vesting, acceleration of the payment of a benefit, the payment of an incentive
award at a higher level than would otherwise occur, an extension of time to exercise a benefit, and
the lapsing of restrictions that would otherwise continue (the “Change in Control Benefits”)

     WHEREAS, the Executive no longer desires the Change in Control Benefits and has requested that
the Change In Control Benefits be terminated; and

     WHEREAS, the Company is willing to terminate the Change In Control Benefits with respect to
the Executive;

     NOW, THEREFORE, in consideration of these premises and undertakings herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
National City and the Executive, each intending to be legally bound, agree as follows:

	1.	 	To terminate any and all Change In Control Benefits with respect to Executive.
	 
	2.	 	Executive releases and waives any and all claims, demands, rights and actions
he has or had against National City and any of its subsidiaries and their current and
former officers, directors and employees arising out of the termination of the Change
In Control Benefits.

     IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered
as of the date first above written.

	 	 	 	 	 
	EXECUTIVE	 	NATIONAL CITY CORPORATION
	 
	 	 	 	 
	/s/ David A. Daberko

	 	By:
	 	/s/ Paul A. Ormond
	 

	 	 	 	 
	David A. Daberko

	 	 	 	Paul A. Ormond
	 

	 	 	 	Chairman, Compensation and
	 

	 	 	 	Organization Committee

 

 

Exhibit A

Awarded Benefits

David A Daberko

Benefit Plans

	 	•	 	National City Corporation Management Incentive Plan for Senior Officers
	 
	 	•	 	National City Corporation Long-Term Cash and Equity Incentive Plan
	 
	 	•	 	National City Corporation 2002 Restricted Stock Plan
	 
	 	•	 	National City Corporation 1997 Restricted Stock Plan as Amended and Restated
	 
	 	•	 	National City Corporation Amended and Second Restated 1991 Restricted Stock Plan

Agreements

	 	 	 
	Stock Options
	1

	 	Stock Option Agreement — Incentive Stock Option dated July 28, 1997
	2

	 	Stock Option Agreement — Non-Incentive Stock Option dated July 28, 1997
	3

	 	Stock Option Agreement — Incentive Stock Option dated July 28, 1998
	4

	 	Stock Option Agreement — Non-Incentive Stock Option dated July 28, 1998
	5

	 	Stock Option Agreement — Non-Incentive Stock Option dated August 10, 1999
	6

	 	Stock Option Agreement — Non-Incentive Stock Option dated June 20, 2000
	7

	 	Stock Option Agreement — Incentive Stock Option dated July 24, 2001
	8

	 	Stock Option Agreement — Non-Incentive Stock Option dated July 24, 2001
	9

	 	Stock Option Agreement — Incentive Stock Option dated July 23, 2002
	10

	 	Stock Option Agreement — Non-Incentive Stock Option dated July 23, 2002
	11

	 	Stock Option Agreement — Incentive Stock Option dated July 29, 2003
	12

	 	Stock Option Agreement — Non-Incentive Stock Option dated July 29, 2003
	13

	 	Stock Option Agreement — Non-Incentive Stock Option dated November 4, 2003
	14

	 	Stock Option Agreement — Incentive Stock Option dated July 26, 2004
	15

	 	Stock Option Agreement — Non-Incentive Stock Option dated July 26, 2004
	16

	 	Stock Option Agreement — Non-Incentive Stock Option dated September 1, 2004
	17

	 	Stock Option Agreement — Non-Incentive Stock Option dated November 5, 2004
	18

	 	Stock Option Agreement — Incentive Stock Option dated August 31, 2005
	19

	 	Stock Option Agreement — Non-Incentive Stock Option dated August 31, 2005
	20

	 	Stock Option Agreement — Non-Incentive Stock Option dated December 12, 2005
	 
	 	 
	Restricted Stock/Restricted Stock Units
	1

	 	National City Corporation Restricted Stock Award Agreement dated June 27, 1991
	2

	 	National City Corporation Restricted Stock Award Agreement dated June 24, 1992
	3

	 	National City Corporation Restricted Stock Award Agreement dated June 23, 1993
	4

	 	National City Corporation Restricted Stock Award Agreement dated July 6, 1994
	5

	 	National City Corporation Restricted Stock Award Agreement dated June 14, 1995
	6

	 	National City Corporation Restricted Stock Award Agreement dated July 22, 1996
	7

	 	National City Corporation Restricted Stock Award Agreement dated July 28, 1997
	8

	 	National City Corporation Restricted Stock Award Agreement dated August 31, 2005
	9

	 	National City Corporation Restricted Stock Unit Award Agreement dated March 15,
2006

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]