Exhibit 10(C)
EMPLOYMENT AGREEMENT
     This EMPLOYMENT AGREEMENT, dated as of the 17th day of July, 2006 (this
“Agreement”), by and between THE PROGRESSIVE CORPORATION, an Ohio corporation
(the “Company”), and Brian A. Silva (the “Executive”),
     WHEREAS, the Board of Directors of the Company (the “Board”) has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined herein). The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive’s full attention and dedication to the current Company and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
that ensure that the compensation and benefits expectations of the Executive
will be satisfied and that are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
     Section 1. Certain Definitions.
     (a) “Effective Date” means the first date during the Change of Control
Period (as defined herein) on which a Change of Control occurs. Notwithstanding
anything in this Agreement to the contrary, if a Change of Control occurs and if
the Executive’s employment with the Company is terminated prior to the date on
which the Change of Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (1) was at the request of a third
party that has taken steps reasonably calculated to effect a Change of Control
or (2) otherwise arose in connection with or in anticipation of a Change of
Control, then “Effective Date” means the date immediately prior to the date of
such termination of employment.
     (b) “Change of Control Period” means the period commencing on the date
hereof and ending on the third anniversary of the date hereof; provided,
however, that, commencing on the date one year after the date hereof, and on
each annual anniversary of such date (such date and each annual anniversary
thereof, the “Renewal Date”), unless previously terminated, the Change of
Control Period shall be automatically extended so as to terminate three years
from such Renewal Date, unless, at least 60 days prior to the Renewal Date, the
Company shall give notice to the Executive that the Change of Control Period
shall not be so extended.
     (c) “Company” means the Company as hereinbefore defined and any successor
to its business and/or assets as described below whether by merger,
consolidation, purchase or otherwise, that assumes and is bound to perform this
Agreement by operation of law or otherwise.
     (d) “Affiliated company” means any company controlled by, controlling or
under common control with the Company.
     (e) “Change of Control” means:

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     (1) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then-outstanding common shares of the Company (the “Outstanding
Company Common Shares”) or (B) the combined voting power of the then-outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however,
that, for purposes of this Agreement, the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
affiliated company, (iv) any acquisition by any corporation pursuant to a
transaction that complies with Sections l(d)(3)(A), l(d)(3)(B) and l(d)(3)(C),
or (v) any acquisition of 20% or more of the Outstanding Company Common Shares
or Outstanding Company Voting Securities by any Person who has acquired the
Outstanding Company Common Shares or Outstanding Company Voting Securities in
the ordinary course of business for investment purposes only and not with the
purpose or effect of changing or influencing the control of the Company, or in
connection with or as a participant in any transaction having such purpose or
effect (“Investment Intent”), as demonstrated by the filing by such Person of a
statement on Schedule 13G (including amendments thereto) pursuant to
Regulation 13D under the Exchange Act, as long as such Person continues to hold
the Outstanding Company Common Shares or Outstanding Company Voting Securities
with an Investment Intent, unless the Incumbent Board (as defined below)
determines, by a majority vote, that the acquisition or holding of Outstanding
Company Common Shares or Outstanding Company Voting Securities by such Person
constitutes a Change of Control.
     (2) Individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board.
     (3) Consummation of a reorganization, merger, consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case, unless, immediately following such
Business Combination, (A) all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding Company Common
Shares and the Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 60% of
the then-outstanding common shares and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that, as a result of
such transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Shares and the Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any corporation
resulting from such Business Combination

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or any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then-outstanding
common shares of the corporation resulting from such Business Combination or the
combined voting power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior to the
Business Combination, and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board providing for such Business Combination;
or
     (4) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
     Section 2. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the third anniversary of
the Effective Date (the “Employment Period”).
     Section 3. Terms of Employment.

     (a) Position and Duties.
     (1) During the Employment Period, (A) the Executive’s position (including
status, offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held or exercised by and assigned to the Executive
at any time during the 120-day period immediately preceding the Effective Date
and (B) the Executive’s services shall be performed at the office where the
Executive was employed immediately preceding the Effective Date or at any other
location less than 25 miles from such office.
     (2) During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the Executive’s
reasonable best efforts to perform faithfully and efficiently such
responsibilities to the best of his or her ability. During the Employment
Period, it shall not be a violation of this Agreement for the Executive to
(A) serve on corporate, civic or charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements or teach at educational institutions and
(C) manage personal investments, so long as such activities do not significantly
interfere with the performance of the Executive’s responsibilities as an officer
or employee of the Company in accordance with this Agreement. It is expressly
understood and agreed that, to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of the Executive’s responsibilities to the
Company.
     (b) Compensation.
     (1) Base Salary. During the Employment Period, the Executive shall receive
an annual

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base salary (the “Annual Base Salary”), which Annual Base Salary shall be at
least equal to 12 times the highest monthly base salary paid or payable,
including any base salary that has been earned but deferred, to the Executive by
the Company and the affiliated companies during the 12-month period immediately
preceding the month in which the Effective Date occurs. The Annual Base Salary
shall be paid one-twelfth (1/12th) each month. During the Employment Period, the
Annual Base Salary shall be reviewed at least annually, beginning no more than
12 months after the last salary increase awarded to the Executive prior to the
Effective Date. Any increase in the Annual Base Salary shall not serve to limit
or reduce any other obligation to the Executive under this Agreement. During the
Employment Period, the Annual Base Salary shall not be reduced after any such
increase and the term “Annual Base Salary” shall refer to the Annual Base Salary
as so increased.
     (2) Annual Bonus. In addition to the Annual Base Salary, the Executive
shall be awarded, for each fiscal year ending during the Employment Period, an
annual bonus (the “Annual Bonus”) in cash at least equal to the Executive’s
highest bonus under the Company’s Executive Bonus and/or Gainsharing Plans, or
any comparable bonus under any predecessor or successor plan, for the last three
full fiscal years prior to the Effective Date (annualized, in the event that the
Executive was not employed by the Company for the whole of such fiscal year)
(the “Recent Annual Bonus”). Each such Annual Bonus shall be paid no later than
the end of the third month of the fiscal year next following the fiscal year for
which the Annual Bonus is awarded, except to the extent that the Executive shall
elect to defer the receipt of such Annual Bonus pursuant to and in accordance
with the Company’s Executive Deferral Plan or any successor plan thereto then in
effect.
     (3) Company Equity Incentive Plans. During the Employment Period, the
Executive shall be entitled to participate in all restricted stock, stock option
and other equity incentive plans, practices, policies and programs (“Equity
Incentive Plans”) applicable generally to other peer executives of the Company
and the affiliated companies, but in no event shall such Equity Incentive Plans
provide the Executive with incentive opportunities (measured with respect to
both regular and special incentive opportunities, to the extent, if any, that
such distinction is applicable), in each case, less favorable, in the aggregate,
than the most favorable of those provided by the Company and the affiliated
companies for the Executive under such Equity Incentive Plans as in effect at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive, those provided generally at any time after
the Effective Date to other peer executives of the Company and the affiliated
companies. The basis for the valuation for such equity incentive awards for
Executive shall be the highest applicable percent of salary within the last
three fiscal years prior to the Effective Date, based upon Executive’s job
classification, and a target award value that is equal to or greater than the
highest target award value of any of the equity incentive awards granted to the
Executive during such 3-year period.
     (4) Savings, Retirement and Welfare Benefit Plans. During the Employment
Period, the Executive and as applicable the Executive’s family, as the case may
be, shall be eligible for participation in and shall receive all benefits under
any incentive, savings, retirement plans and welfare benefit plans, policies,
practices and programs provided by the Company and the affiliated companies
(including, without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident insurance plans
and programs) to the extent applicable generally to other peer executives of the
Company and the affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Executive and/or the Executive’s
family with benefits that are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company and
the affiliated companies. In the event that because of applicable law, or

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for other good and valid reasons, such applicable benefit plans cannot be
provided Executive by the Company following Change of Control, the Company by
agreement with Executive, which agreement shall not be unreasonably withheld,
may provide Executive with an amount having an overall equivalent tax adjusted
value for the applicable period to those employee benefits, programs and the
like, not otherwise being provided by the Company to Executive.
     (5) Expenses. During the Employment Period, the Executive shall be entitled
to receive prompt reimbursement for all reasonable expenses incurred by the
Executive in the furtherance of the business or affairs of the Company or any of
the Affiliated companies in accordance with the most favorable policies,
practices and procedures of the Company and the affiliated companies in effect
for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and the affiliated companies.
     (6) Office and Support Staff. During the Employment Period, the Executive
shall be entitled to an office or offices of a size and with furnishings and
other appointments, and to personal secretarial and other assistance, at least
equal to the most favorable of the foregoing provided to the Executive by the
Company and the affiliated companies at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the Executive,
as provided generally at any time thereafter with respect to other peer
executives of the Company and the affiliated companies.
     (7) Vacation. During the Employment Period, the Executive shall be entitled
to paid vacation in accordance with the most favorable plans, policies, programs
and practices of the Company and the affiliated companies as in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and the
affiliated companies.
     Section 4. Termination of Employment
     (a) Death or Disability. The Executive’s employment shall terminate
automatically if the Executive dies during the Employment Period. If the Company
determines in good faith that the Disability (as defined herein) of the
Executive has occurred during the Employment Period (pursuant to the definition
of “Disability”), it may give to the Executive written notice in accordance with
Section ll(b) of its intention to terminate the Executive’s employment. In such
event, the Executive’s employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Executive (the “Disability
Effective Date”), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the Executive’s
duties. “Disability” means the absence of the Executive from the Executive’s
duties with the Company on a full-time basis for 180 consecutive business days
as a result of incapacity due to mental or physical illness that is determined
to be total and permanent by a physician selected by the Company or its insurers
and acceptable to the Executive or the Executive’s legal representative.
     (b) Cause. The Company may terminate the Executive’s employment during the
Employment Period for Cause. Subject to the last paragraph of Section 4(b),
“Cause” means:
     (1) the willful failure of the Executive to perform, and the continuance of
such failure to perform for 60 days following the Executive’s receipt of notice
from the Company, substantially the Executive’s duties with the Company or any
affiliated company (other than any

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such failure resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to the Executive by
the Board or the Chief Executive Officer of the Company that specifically
identifies the manner in which the Board or the Chief Executive Officer of the
Company believes that the Executive has not substantially performed the
Executive’s duties; or
     (2) the willful engaging by the Executive in illegal conduct or gross
misconduct that is materially and demonstrably injurious to the Company; or
     (3) any violation of the Code of Conduct of the Company, as in effect
immediately prior to the Effective Date.
For purposes of this Section 4(b), no act, or failure to act, on the part of the
Executive shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer of
the Company or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of the
Company.
     Notwithstanding the foregoing, the cessation of employment of the Executive
shall not be deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel for the Executive, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in Sections 4(b)(l) or 4(b)(2), and specifying
the particulars thereof in detail.
     (c) Good Reason. The Executive’s employment may be terminated by the
Executive for Good Reason. “Good Reason” means:
     (1) the assignment to the Executive of any duties inconsistent in any
respect with the Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 3 (a), or any other action by the Company that results in a
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and that is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
     (2) any failure by the Company to comply with any of the provisions of
Section 3(b), other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and that is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
     (3) the Company’s requiring the Executive to be based at any office or
location other than as provided in Section 3(a)(l)(B) or the Company’s requiring
the Executive to travel on Company business to a substantially greater extent
than required immediately prior to the Effective Date;
     (4) any purported termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this Agreement; or
     (5) any failure by the Company to comply with and satisfy Section 10(c).

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For purposes of this Section 4(c), any good faith determination of Good Reason
made by the Executive shall be conclusive. Anything in this Agreement to the
contrary notwithstanding, a termination by the Executive for any reason during
the 30-day period immediately following the first anniversary of the Effective
Date shall be deemed to be a termination for Good Reason for all purposes of
this Agreement.
     (d) Notice of Termination. Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 11(b). “Notice of
Termination” means a written notice that (1) indicates the specific termination
provision in this Agreement relied upon, (2) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment under the provision so
indicated, and (3) if the Date of Termination (as defined herein) is other than
the date of receipt of such notice, specifies the Date of Termination (which
Date of Termination shall be not more than 30 days after the giving of such
notice). The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance that contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executive’s or the
Company’s respective rights hereunder.
     (e) Date of Termination. “Date of Termination” means (1) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified in the Notice of Termination, as the case may be, (2) if the
Executive’s employment is terminated by the Company other than for Cause or
Disability, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination, and (3) if the Executive’s
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
     Section 5. Obligations of the Company upon Termination, (a) Good Reason:
Other Than for Cause, Death or Disability. If, during the Employment Period, the
Company terminates the Executive’s employment other than for Cause or Disability
or the Executive terminates employment for Good Reason:
     (1) the Company shall pay to the Executive, in a lump sum in cash within
30 days after the Date of Termination the aggregate of the following amounts:
     (A) the sum of (i) that portion of the Executive’s Annual Base Salary that
has accrued prior to the Date of Termination to the extent not theretofore paid,
(ii) the product of (x) the higher of (I) the Recent Annual Bonus and (II) the
Annual Bonus paid or payable, including any bonus or portion thereof that has
been earned but deferred (and annualized for any fiscal year consisting of less
than 12 full months or during which the Executive was employed for less than 12
full months), for the most recently completed fiscal year during the Employment
Period, if any (such higher amount, the “Highest Annual Bonus”) and (y) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination and the denominator of which is 365, and
(iii) any compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each
case, to the extent not theretofore paid (the sum of the amounts described in
subclauses (i), (ii) and (iii), the “Accrued Obligations”); and

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     (B) the amount equal to the higher of (i) the product of (x) two and
(y) the sum of (l) the Executive’s Annual Base Salary and (2) the Highest Annual
Bonus or (ii) the product of (x) four and (y) the Executive’s Annual Base
Salary; less
     (C) the value of amounts paid or to be paid to the Executive under any
severance pay plans or programs of the Company then in effect.
     (2) for two years after the Executive’s Date of Termination, or such longer
period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to the Executive and/or
the Executive’s family at least equal to those that would have been provided to
them in accordance with the plans, programs, practices and policies described in
Section 3(b)(4) if the Executive’s employment had not been terminated or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and the affiliated
companies and their families, provided, however, that, if the Executive becomes
re-employed with another employer and is eligible to receive medical or other
welfare benefits under another employer provided plan, the medical and other
welfare benefits described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility. For purposes of
determining eligibility (but not the time of commencement of benefits) of the
Executive for retiree benefits pursuant to such plans, practices, programs and
policies, the Executive shall be considered to have remained employed until
three years after the Date of Termination and to have retired on the last day of
such period;
     (3) the Company shall, at its sole expense as incurred, provide the
Executive with outplacement services the scope and provider of which shall be
selected by the Executive in the Executive’s sole discretion; and
     (4) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required to
be paid or provided to the Executive or that the Executive is eligible to
receive under any plan, program, policy or practice or contract or agreement of
the Company and the affiliated companies (such other amounts and benefits, the
“Other Benefits”).
     (b) Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive’s estate, beneficiaries or legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of the Other Benefits. The
Accrued Obligations shall be paid to the Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
With respect to the provision of the Other Benefits, the term “Other Benefits”
as utilized in this Section 5(b) shall include, without limitation, and the
Executive’s estate and/or beneficiaries shall be entitled to receive, benefits
at least equal to the most favorable benefits provided by the Company and the
affiliated companies to the estates and beneficiaries of peer executives of the
Company and the affiliated companies under such plans, programs, practices and
policies relating to death benefits, if any, as in effect with respect to other
peer executives and their beneficiaries at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive’s estate and/or the Executive’s beneficiaries, as in effect on the
date of the Executive’s death with respect to other peer executives of the
Company and the affiliated companies and their beneficiaries.

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     (c) Disability. If the Executive’s employment is terminated by reason of
the Executive’s Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of the Other
Benefits. The Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination. With respect to the provision
of the Other Benefits, the term “Other Benefits” as utilized in this Section
5(c) shall include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least equal to the
most favorable of those generally provided by the Company and the affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive and/or the Executive’s family, as in effect at
any time thereafter generally with respect to other peer executives of the
Company and the affiliated companies and their families.
     (d) Cause; Other Than for Good Reason. If the Executive’s employment is
terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (1) that portion of the Executive’s Annual Base Salary
that has accrued prior to the Date of Termination, (2) the amount of any
compensation previously deferred by the Executive, and (3) the Other Benefits,
in each case, to the extent theretofore unpaid. If the Executive voluntarily
terminates employment during the Employment Period, excluding a termination for
Good Reason, this Agreement shall terminate without further obligations to the
Executive, other than for the Accrued Obligations and the timely payment or
provision of the Other Benefits. In such case, all the Accrued Obligations shall
be paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination.
     Section 6. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive’s continuing or future participation in any plan,
program, policy or practice provided by the Company or the affiliated companies
and for which the Executive may qualify, nor, subject to Section 11(f), shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or the affiliated companies.
Amounts that are vested benefits or that the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with the Company or the affiliated companies at or subsequent to the
Date of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement, except as explicitly modified by
this Agreement.
     Section 7. Full Settlement. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be subject to set-off or otherwise affected by any
counterclaim, recoupment, defense, or other claim, right or action that the
Company or any of the Affiliated companies may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement, and such amounts shall
not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses that the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus, in each case, interest on any delayed payment at the
applicable federal rate provided for in Section 7872(f)(2)(A) of the Internal
Revenue Code of 1986, as amended (the “Code”).

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     Section 8. Certain Additional Payments by the Company.
     (a) Anything in this Agreement to the contrary notwithstanding and except
as set forth below, in the event it shall be determined that any payment or
distribution by the Company or the affiliated companies to or for the benefit of
the Executive (whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise but determined without regard to any
additional payments required under this Section 8) (the “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code, as the same may
be hereafter modified or amended or any successor provision, or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, collectively, the
“Excise Tax”), then the Executive shall be entitled to receive an additional
payment (the “Gross-Up Payment”) in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
     (b) Subject to the provisions of Section 8(c), all determinations required
to be made under this Section 8, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by
PricewaterhouseCoopers LLP or such other nationally recognized independent
accounting firm as may be designated by the Executive (the “Accounting Firm”).
The Accounting Firm shall provide detailed supporting calculations both to the
Company and the Executive within 15 business days of the receipt of notice from
the Executive that there has been a Payment or such earlier time as is requested
by the Company. In the event that the Accounting Firm is serving as accountant
or auditor for the individual, entity or group effecting the Change of Control,
the Executive shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 8, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm’s
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments that will not
have been made by the Company should have been made (the “Underpayment”),
consistent with the calculations required to be made hereunder. In the event the
Company exhausts its remedies pursuant to Section 8(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
     (c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than 10 business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which the Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such

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claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that the Company desires to contest such claim, the
Executive shall:
     (1) give the Company any information reasonably requested by the Company
relating to such claim,
     (2) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
     (3) cooperate with the Company in good faith in order effectively to
contest such claim, and
     (4) permit the Company to participate in any proceedings relating to such
claim; provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest, and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 8(c), the Company shall control all
proceedings taken in connection with such contest, and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the applicable taxing authority in respect of such claim and
may, at its sole option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that, if
the Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis, and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and provided,
further, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues
with respect to which the Gross-Up Payment would be payable hereunder, and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

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     (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 8(c), the Executive becomes entitled to receive any
refund with respect to such claim, upon receipt of such refund, the Executive
shall (subject to the Company’s complying with the requirements of Section 8(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company pursuant to
Section 8(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
     Section 9. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or the affiliated
companies, and their respective businesses, which information, knowledge or data
shall have been obtained by the Executive during the Executive’s employment by
the Company or the affiliated companies and which information, knowledge or data
shall not be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). For two years
after termination of the Executive’s employment with the Company, the Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
persons designated by the Company. In no event shall an asserted violation of
the provisions of this Section 9 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.
     Section 10. Successors.
     (a) This Agreement is personal to the Executive, and, without the prior
written consent of the Company, shall not be assignable by the Executive other
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Executive’s legal representatives.
     (b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
     (c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.
     Section 11. Miscellaneous.
     (a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio, without reference to principles of conflict of
laws. The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect. This Agreement may not be amended or modified
other than by a written agreement executed by the parties hereto or their
respective successors, permitted assigns and legal representatives.
     (b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

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     if to the Executive:
Brian A. Silva
(at his home address)
     if to the Company:
The Progressive Corporation
6300 Wilson Mills Road N72
Mayfield Village, Ohio 44143
Attention: Chief Legal Officer
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
     (c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
     (d) This Agreement shall not be deemed to modify, amend or supplement the
terms of any existing benefit plan or program of the Company.
     (e) The Company may withhold from any amounts payable under this Agreement
such United States federal, state or local or foreign taxes or other items as
shall be required to be withheld pursuant to any applicable law or regulation.
     (f) The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Sections 4(c)(l) through 4(c)(5), shall not be deemed to be a waiver
of such provision or right or any other provision or right of this Agreement.
     (g) The Executive and the Company acknowledge that, except as may otherwise
be provided under any other written agreement between the Executive and the
Company, the employment of the Executive by the Company is “at will” and,
subject to Section l(a), prior to the Effective Date, the Executive’s employment
and/or this Agreement may be terminated by either the Executive or the Company
at any time prior to the Effective Date, in which case the Executive shall have
no further rights under this Agreement. From and after the Effective Date, this
Agreement shall supersede any other agreement between the parties with respect
to the subject matter hereof.

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     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand
and, pursuant to the authorization from the Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.

                  /s/ Brian A. Silva       Brian A. Silva              THE
PROGRESSIVE CORPORATION
      By:   /s/ Glenn M. Renwick         Name:   Glenn M. Renwick        Chief
Executive Officer     

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