-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DFw/oN6FkfY870fjowANTvBS34BuZa86KoON/3ldkFfVxIXrHbeHmawmlfktjWcH zpF8mokzQaUndxeRbKq/7g== 0000950152-99-005936.txt : 19990708 0000950152-99-005936.hdr.sgml : 19990708 ACCESSION NUMBER: 0000950152-99-005936 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19990707 GROUP MEMBERS: PROGRESSIVE CORP/OH/ GROUP MEMBERS: UNITED FINANCIAL ADJUSTING COMPANY SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FRONTIER ADJUSTERS OF AMERICA INC CENTRAL INDEX KEY: 0000735349 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 860477573 STATE OF INCORPORATION: AZ FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-54917 FILM NUMBER: 99659966 BUSINESS ADDRESS: STREET 1: 45 E MONTEREY WAY STREET 2: STE 202 CITY: PHOENIX STATE: AZ ZIP: 85012 BUSINESS PHONE: 6022641061 MAIL ADDRESS: STREET 1: P O BOX 7610 CITY: PHOENIX STATE: AZ ZIP: 85011 FORMER COMPANY: FORMER CONFORMED NAME: FRONTIER FINANCIAL CORP /AZ DATE OF NAME CHANGE: 19861114 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PROGRESSIVE CORP/OH/ CENTRAL INDEX KEY: 0000080661 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 340963169 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 6300 WILSON MILLS RD CITY: MAYFIELD VILLAGE STATE: OH ZIP: 44143 BUSINESS PHONE: 4404615000 MAIL ADDRESS: STREET 1: 6300 WILSON MILLS RD CITY: MAYFIELD VILLAGE STATE: OH ZIP: 44143 SC 13D/A 1 FRONTIER ADJUSTERS/PROGRESSIVE AMD.#2 SC 13D/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 2) Frontier Adjusters of America, Inc. ----------------------------------- (Name of Issuer) Common Stock, par value $.01 per share -------------------------------------- (Title of Class of Securities) 359050101 --------- (CUSIP Number) David M. Schneider Chief Legal Officer 6300 Wilson Mills Road Mayfield Village, Ohio 44143 (440) 461-5000 -------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) July 6, 1999 ------------ (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box / /. 2 CUSIP NO. 359050101 13D PAGE 2 OF 9 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) The Progressive Corporation 34-0963169 2 CHECK APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) /x/ 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) / / 6 CITIZENSHIP OR PLACE OF ORGANIZATION Ohio NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 5,258,513 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON WITH 10 SHARED DISPOSITIVE POWER 5,258,513 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,258,513 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES -0- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 58.7% 14 TYPE OF REPORTING PERSON HC, CO 3 CUSIP NO. 359050101 13D PAGE 3 OF 9 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) United Financial Adjusting Company 34-1750521 2 CHECK APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) /x/ 3 SEC USE ONLY 4 SOURCE OF FUNDS WC and AF (WC of The Progressive Corporation) 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) / / 6 CITIZENSHIP OR PLACE OF ORGANIZATION Ohio NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 5,258,513 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON WITH 10 SHARED DISPOSITIVE POWER 5,258,513 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,258,513 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES -0- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 58.7% 14 TYPE OF REPORTING PERSON CO 4 CUSIP NO. 359050101 13D PAGE 4 OF 9 ITEM 1. SECURITY AND ISSUER. This Amendment No. 2 to Schedule 13D relates to the shares of Common Stock, par value $.01 per share (the "Common Shares"), of Frontier Adjusters of America, Inc., an Arizona corporation (the "Issuer"). The principal executive offices of the Issuer are located at 45 East Monterey Way, Phoenix, Arizona 85012. ITEM 2. IDENTITY AND BACKGROUND. This statement is filed jointly by the following parties (collectively, the "Reporting Persons"): (i) United Financial Adjusting Company, an Ohio corporation ("UFAC"), and (ii) The Progressive Corporation, an Ohio corporation ("Progressive"), by virtue of its ownership of all of the outstanding capital stock of UFAC. The principal business and office address of Progressive is 6300 Wilson Mills Road, Mayfield Village, Ohio 44143. The principal business and office address of UFAC is 747 Alpha Drive, Highland Heights, Ohio 44143. Progressive is an insurance holding company whose insurance subsidiaries and affiliates provide personal automobile insurance and other specialty property-casualty insurance and related services throughout the United States. UFAC is a subsidiary of Progressive that provides claim and administrative services to insurance carriers, managing general agents and large self-insured companies. UFAC is also a majority shareholder of a vehicle inspection company and a claims software company. Set forth in Appendix A hereto are the names, residence or business addresses, present principal occupation or employment, and the name, principal business and address of any corporation or other organization in which such employment is conducted, of each executive officer and director of Progressive and UFAC. Each such person is a citizen of the United States. During the last five years, none of Progressive, UFAC or any of the persons named in Appendix A (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violations with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS. UFAC funded the $6,836,067 purchase price of the Convertible Shares (as defined herein) from its own working capital and from funds provided to it by Progressive. Progressive used its own working capital to provide the funds required by UFAC for such purpose. ITEM 4. PURPOSE OF TRANSACTION. Under a Stock Purchase Agreement dated as of November 20, 1998 (the "Purchase Agreement") between the Issuer and UFAC, UFAC agreed to purchase 5,258,513 shares (the "Convertible Shares") of the Issuer's Series A Convertible Voting Preferred Stock, par value $.01 per share, in exchange for $6,836,067. On April 29, 1999, the holders of the Common Shares approved the sale of the Convertible Shares to UFAC pursuant to the Purchase Agreement. On April 30, 1999, UFAC purchased the Convertible Shares at the closing (the "Closing"). On July 2, 1999, the Convertible Shares were converted into Common Shares on a one for one basis in accordance with their terms. In the Purchase Agreement, the Issuer agreed to make a tender offer for up to 1,000,000 outstanding Common Shares at a price of $2.90 per Common Share (the "Tender Offer") as soon as reasonably practicable after the Closing. The Tender Offer was commenced on May 12, 1999. Following the expiration of the Tender Offer on June 10, 1999, the Issuer purchased 971,464 Common Shares at a price of $2.90 per share. Pursuant to the Purchase Agreement, the Issuer declared a distribution of $1.60 per Common Share (the "Distribution") on all remaining outstanding Common Shares 5 CUSIP NO. 359050101 13D PAGE 5 OF 9 (excluding Common Shares held by UFAC). The Distribution is payable on July 12, 1999 to record holders of Common Shares on June 25, 1999. Pending the Distribution, the Issuer suspended payment of its quarterly dividends. There can be no assurance that the payment of regular quarterly dividends will be resumed after the Distribution. UFAC did not tender any Convertible Shares or Common Shares in the Tender Offer and will not receive the Distribution. In accordance with the Purchase Agreement, the Issuer took all actions that were necessary to cause the Board to consist of a majority of nominees named by UFAC at the Closing. George M. Hill and William W. Strawthers, Jr. resigned from the Board, and the Board was expanded to have 15 members. Charles B. Chokel, John M. Davies, Jeffrey Jordan, Jeffrey R. Harcourt, Troy M. Huth, Dane A. Shrallow, William A. White and Milo C. Bolender were appointed to the fill vacancies in the Board as representatives of UFAC. For so long as UFAC holds a number of Common Shares that is greater than a simple majority of the outstanding Common Shares, UFAC will be entitled to nominate at least a simple majority of the candidates to the Board. The Issuer has agreed to cause UFAC's nominees to be included in the slate of nominees recommended by the Board for election to the Board after the Closing, and the Issuer agreed to use its reasonable efforts to cause the election of such nominees. Under the Purchase Agreement, an experienced claims manager and attorney from UFAC began working with William J. Rocke, the Issuer's Chairman of the Board, and Jean E. Ryberg, the Issuer's President, to assume day-to-day responsibility for managing the Issuer's franchisee network and the field offices owned and operated by the Issuer in Phoenix and Tuscon, Arizona, and Las Vegas, Nevada. Mr. Rocke and Ms. Ryberg each resigned from their positions as officers of the Issuer on June 30, 1999. Because UFAC's representatives constitute a majority of the Board, they will have the ability to designate the replacements for Mr. Rocke and Ms. Ryberg and to control the management of the Issuer following the Closing. Troy M. Huth has been named by the Board as the Issuer's Chairman of the Board and President effective as of July 1, 1999. Except as described herein, none of the Reporting Persons has any current plans or proposals which relate to or would result in any of the following: (a) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer, (b) any extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries, (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries, (d) any change in the Board or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Board of the Issuer, (e) any material change in the present capitalization or dividend policy of the Issuer, (f) any other material change in the Issuer's business or corporate structure, (g) any changes in the Issuer's articles of incorporation or code of regulations (h) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in the inter-dealer quotation system of a registered national securities association, (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section12(g)(4) of the Securities Exchange Act of 1934, as amended, or (j) any action similar to those enumerated above. The foregoing response to this Item 4 is qualified in its entirety by reference to the Purchase Agreement, the full text of which is incorporated herein by reference. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) UFAC beneficially owns 5,258,513 Common Shares, representing approximately 58.7% of the outstanding Common Shares. Progressive, as the owner of all of the outstanding capital stock of UFAC, may be deemed to beneficially own all such Common Shares. 6 CUSIP NO. 359050101 13D PAGE 6 OF 9 (b) Together, the Reporting Persons share voting and dispositive power over the shares described in Item 5(a). (c) Except as described herein, none of the Reporting Persons or any of the persons identified in Appendix A has effected any transaction in the Common Shares in the past 60 days. (d) No person other than the Reporting Persons has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the shares described in Item 5(a). Progressive, as the owner of all of the outstanding capital stock of UFAC, has the ability to direct UFAC's receipt of dividends from, or the proceeds from the sale of all such shares. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. (a) PURCHASE AGREEMENT. The Issuer and UFAC are parties to the Purchase Agreement. The material terms of the Purchase Agreement are summarized in Item 4. (b) REGISTRATION RIGHTS AGREEMENT. The Issuer and UFAC are parties to a registration rights agreement (the "Registration Rights Agreement") relating to the Convertible Shares and the Common Shares that were issued upon conversion thereof. The Registration Rights Agreement provides that UFAC may make one demand to have the Convertible Shares or the Common Shares that were issued upon conversion of the Convertible Shares registered pursuant to the Securities Act of 1933, as amended (the "Securities Act"). These demand registration rights are subject to certain customary blackout rights and limitations. UFAC also has certain "piggy-back" registration rights. UFAC must be notified prior to the filing of any registration statement under the Securities Act by the Issuer. UFAC may include Convertible Shares or Common Shares that were issued upon conversion of the Convertible Shares in any such registration statement. The Issuer must use its best efforts to include any such shares in the registration statement. Except as stated in this Item 6, none of the Reporting Persons has any contracts, arrangements, understandings or relationships (legal or otherwise) with any other person with respect to the Common Shares, including without limitation, any agreements concerning (i) transfer or voting of any Common Shares, (ii) finder's fees, (iii) joint ventures, (iv) loan or option arrangement, (v) puts or calls, (vi) guarantees of profits, (vii) division of profits or losses, or (viii) the giving or withholding of proxies. The foregoing response to this Item 6 is qualified in its entirety by reference to the Purchase Agreement and the Form of the Registration Rights Agreement, the full texts of which are incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS A. Agreement among the Reporting Persons to file a joint statement on Schedule 13D* B. Stock Purchase Agreement** C. Form of Registration Rights Agreement** * Filed herewith ** Previously filed 7 CUSIP NO. 359050101 13D PAGE 7 OF 9 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. THE PROGRESSIVE CORPORATION By: /s/ W. Thomas Forrester, II W. Thomas Forrester, II, Treasurer UNITED FINANCIAL ADJUSTING COMPANY By:/s/ Janet A. Dolohanty Janet A. Dolohanty, Vice President Dated as of July 6, 1999 8 CUSIP NO. 359050101 13D PAGE 8 OF 9 APPENDIX A DIRECTORS AND EXECUTIVE OFFICERS OF THE REPORTING PERSONS The following table sets forth the name, business address, present principal occupation or employment, the name, principal business and address of the principal office of any corporation or other organization in which such employment is conducted of each director and executive officer of The Progressive Corporation ("Progressive") and United Financial Adjusting Company ("UFAC").
Principal Occupation or Employment and Name, Principal Business and Address of Organization Name and Business Address in which Employment is Conducted(1) - ------------------------- --------------------------------- A. DIRECTORS OF PROGRESSIVE Peter B. Lewis(2)...................................... Chairman of the Board, President, Chief Executive Officer--Insurance Operations and a director of Progressive; Chairman of the Board, President, Chief Executive Officer and a director of Progressive Casualty Insurance Company, the principal subsidiary of Progressive Milton N. Allen........................................ Director of various companies 12 Lieutenant River Lane Old Lyme, Connecticut 06371-2308 B. Charles Ames........................................ Principal, Clayton, Dubilier & Rice, Inc., New York, 25700 Science Park New York (investment banking) Landmark Center, Suite 180 Beachwood, Ohio 44122-7312 James E. Bennett III................................... Senior Executive Vice President, KeyCorp, Cleveland 127 Public Square, 55th Floor Ohio (banking) Cleveland, Ohio 44114 Charles B. Choke(l)(2)................................. Chief Executive Officer--Investments and Capital Management and a Director of Progressive Charles A. Davis....................................... President and Chief Executive Officer, Marsh & 20 Horse Neck Lane McLennan Capital, Inc. (global private equity firm) Greenwich, Connecticut 06830 Stephen R. Hardis...................................... Chairman of the Board and Chief Executive Officer of Eaton Center Eaton Corporation, Cleveland, Ohio (manufacturing) 1111 Superior Avenue Cleveland, Ohio 44114-2507 Janet Hill............................................. President, Staubach Alexander Hill, LLC, Washington, 400 C Street, NW D.C. (commercial real estate consulting) and Vice Washington, D.C. 20002 President, Alexander & Associates, Inc., Washington, D.C. (management consulting)
1 The business address of the organization in which each person's employment is conducted is the same as such person's business address. 2 The business address of each such person is 6300 Wilson Mills Road, Mayfield Village, Ohio 44143. 9 CUSIP NO. 359050101 13D PAGE 9 OF 9
Principal Occupation or Employment and Name, Principal Business and Address of Organization Name and Business Address in which Employment is Conducted(1) - ------------------------- --------------------------------- Norman S. Matthews..................................... Consultant, New York, New York 650 Madison Avenue 23rd Floor New York, New York 10022-1004 Donald B. Shackelford.................................. Chairman of the Board, Fifth Third Bank of Central 21 East Broad Street Ohio, Columbus, Ohio (commercial bank) Columbus, Ohio 43215-3403 Paul B. Sigler......................................... Henry Ford II Professor, Yale University and 260 Whitney Avenue/JWG 423 Investigator in the Howard Hughes Medical Institute, P.O. Box 208114 New Haven, Connecticut New Haven, Connecticut 06520-8114 B. EXECUTIVE OFFICERS OF PROGRESSIVE Peter B. Lewis(2)...................................... See Section A. above Alan R. Bauer(2)....................................... Internet Distribution Leader Charles B. Choke(l)(2)................................. See Section A. above W. Thomas Forrester, II(2)............................. Chief Financial Officer and Treasurer Moira G. Lardakis(2)................................... Chief Communications Officer Daniel R. Lewis(2)..................................... Independent Agent Distribution Leader Robert J. McMillan(2).................................. Direct Distribution Leader Brian J. Passell(2).................................... Chief Claim Officer Glenn M. Renwick(2).................................... Chief Information Officer David L. Roush(2)...................................... Strategic Alliance Distribution Leader E. DIRECTORS AND EXECUTIVE OFFICERS OF UFAC Troy M. Huth........................................... Director, Chairman of the Board and President 747 Alpha Drive Highland Heights, Ohio 44143 Janet A. Dolohanty(2).................................. Director and Vice President David M. Schneider(2).................................. Secretary Breck T. Platner(2).................................... Treasurer
1 The business address of the organization in which each person's employment is conducted is the same as such person's business address. 2 The business address of each such person is 6300 Wilson Mills Road, Mayfield Village, Ohio 44143. 10 EXHIBIT A This Exhibit A to Amendment No. 2 to Schedule 13D is filed pursuant to the requirements of Rule 13d(1)(f)(1)(iii). The undersigned, The Progressive Corporation and United Financial Adjusting Company, hereby agree that the Amendment No. 2 to Schedule 13D to which this Exhibit is attached is filed on behalf of each of the undersigned. THE PROGRESSIVE CORPORATION By: /s/ W. Thomas Forrester, II W. Thomas Forrester, II, Treasurer UNITED FINANCIAL ADJUSTING COMPANY By:/s/ Janet A. Dolohanty Janet A. Dolohanty, Vice President Dated as of July 6, 1999 -----END PRIVACY-ENHANCED MESSAGE-----