Progressive 2012 Annual Report Download - page 31

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The following table is a summary of all employee stock option activity during the years ended December 31, 2011 and 2010.
All non-qualified stock options vested on or before January 1, 2007 and expired on December 31, 2011. All options granted
had an exercise price equal to the market value of the common shares on the date of grant.
2011 2010
Options Outstanding
Number of
Shares
Weighted
Average
Exercise
Price
Number of
Shares
Weighted
Average
Exercise
Price
Beginning of year 1,916,416 $11.31 5,102,888 $ 9.31
Add:
Antidilution adjustment1NA NA 97,387 NA
Deduct:
Exercised (1,913,552) 11.31 (3,283,859) 7.87
Forfeited (2,864) 11.28 0 0
End of year 0 $ 0 1,916,416 $11.31
Exercisable, end of year 0 $ 0 1,916,416 $11.31
NA = Not Applicable
1During the fourth quarter 2010, we declared a $1.00 per common share special cash dividend to shareholders of record at the close of business on
December 20, 2010. Since the holders of the outstanding stock option awards were not entitled to receive the cash dividend, we were required to
increase the number of shares and reduce the exercise price of any of our then outstanding stock option awards in accordance with the antidilution
provisions of our incentive plans.
The total pretax intrinsic value of options exercised during the years ended December 31, 2011 and 2010, were $15.2
million and $40.8 million, respectively, based on the actual stock price at the time of exercise.
Incentive Compensation Plans – Directors Our 2003 Directors Equity Incentive Plan, which provides for the granting of
equity-based awards, including restricted stock awards, to non-employee directors of Progressive, had 1.4 million shares
authorized as of December 31, 2012, net of restricted stock awards cancelled; 0.6 million shares remain available for future
restricted stock grants.
We grant restricted stock awards to our non-employee directors as their sole compensation for serving as members of the
Board of Directors. We do not plan to change to restricted stock units as we have with our employees. The restricted stock
awards are issued as time-based awards. The vesting period (i.e., requisite service period) must be a minimum of six
months and one day. The time-based awards granted to date have typically included vesting periods of 11 months from the
date of each grant. To the extent a director is newly appointed during the year, or his or her committee assignments
change, the vesting period may be shorter but always greater than six months and one day per the plan’s specifications.
The restricted stock awards are expensed pro rata over their respective vesting periods based on the market value of the
awards at the time of grant.
App.-A-31