Exhibit 10.1

RESTRICTED STOCK UNIT AWARD AGREEMENT

(<Year of Grant> Time-Based Award)

This Agreement (“Agreement”) is made this <Grant Date> by and between
<Participant Name> (“Participant”) and The Progressive Corporation (the
“Company”).

1. Definitions. Unless otherwise defined in this Agreement, each capitalized
term in this Agreement shall have the meaning given to it in The Progressive
Corporation 2003 Incentive Plan, as amended (collectively, the “Plan”).

2. Award of Restricted Stock Units. The Company grants to Participant an award
(the “Award”) consisting of <# of Units> restricted stock units (the “Restricted
Stock Units” or “Units”), pursuant and subject to the Plan.

3. Condition to Participant’s Rights under this Agreement. This Agreement shall
not become effective, and Participant shall have no rights with respect to the
Award or the Restricted Stock Units, unless and until Participant has fully
executed this Agreement and delivered it to the Company. In the Company’s
discretion, such execution and delivery may be accomplished through electronic
means.

4. Restrictions; Vesting. Subject to the terms and conditions of the Plan and
this Agreement, Participant’s rights in and to the Units shall vest according to
the following schedule:

 

  a. One-third of the Units shall vest on <Vesting Date>;

 

  b. One-third of the Units shall vest on <Vesting Date>; and

 

  c. One-third of the Units shall vest on <Vesting Date>.

The Restricted Stock Units awarded under this Agreement shall vest in accordance
with the schedule set forth above unless, prior to the vesting date set forth
above, the Award and the applicable Units are forfeited or have become subject
to accelerated vesting under the terms and conditions of the Plan.

5. Dividend Equivalents. Participant shall be credited with Dividend Equivalents
with respect to outstanding Restricted Stock Units prior to the applicable
vesting date, including any Units resulting from prior reinvestments of Dividend
Equivalents as provided in this Paragraph. Subject to the immediately following
sentence, all Dividend Equivalents so credited will be deemed to be reinvested
in Restricted Stock Units on the date that the applicable dividend or
distribution is made to the Company’s shareholders, in the number of Units
determined by dividing the value of the Dividend Equivalent by the Fair Market
Value of the Company’s Stock on such date (rounded to the nearest ten-thousandth
of a whole Unit). In the event that Dividend Equivalents cannot be reinvested in
Units due to the operation of Section 10(f) of the Plan, such Dividend
Equivalents will be credited to Participant as a cash value, which shall be held
by the Company (without interest) subject hereto. The Units and, if applicable,
cash value resulting from the reinvestment of such Dividend Equivalents shall be
subject to the same terms and conditions, and shall vest or be forfeited (if
applicable) at the same time, as the Restricted Stock Units to which they
relate.

 

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6. Units Non-Transferable. No Restricted Stock Units shall be transferable by
Participant other than by will or by the laws of descent and distribution. In
the event any Award is transferred or assigned pursuant to a court order, such
transfer or assignment shall be without liability to the Company, and the
Company shall have the right to offset against such Award any expenses
(including attorneys’ fees) incurred by the Company in connection with such
transfer or assignment.

7. Executive Deferred Compensation Plan. If Participant is eligible, and has
made the appropriate election, to defer the Award into The Progressive
Corporation Executive Deferred Compensation Plan (the “Deferral Plan”), upon
vesting, the Award shall be considered to be deferred pursuant to the Deferral
Plan, subject to and in accordance with the terms and conditions of the Deferral
Plan and any deferral agreement entered into by Participant under the Deferral
Plan.

8. Termination of Employment. Except as otherwise provided in the Plan or as
determined by the Committee, if Participant’s employment with the Company is
terminated for any reason other than death or RSU Qualified Retirement, all
Restricted Stock Units held by Participant which are unvested or subject to
restriction at the time of such termination shall be automatically forfeited.

9. Taxes. No later than the date as of which an amount relating to the Award
first becomes taxable, Participant shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
federal, state and local taxes and other items of any kind required by law to be
withheld with respect to such amount. The obligations of the Company under the
Plan shall be conditional on such payment or arrangements and the Company and
its Subsidiaries and Affiliates, to the extent permitted by law, shall have the
right to deduct any such taxes from any payment of any kind otherwise due to
Participant. At vesting, Restricted Stock Units awarded under this Agreement
will be valued at the Fair Market Value of the Company’s Stock on such date.

Participant must satisfy the minimum statutory tax withholding obligations
resulting from the vesting of Restricted Stock Units (“Minimum Withholding
Obligations”) either (a) by surrendering to the Company Restricted Stock Units
which are then vesting with a value sufficient to satisfy the Minimum
Withholding Obligations, or (b) by paying to the Company the appropriate amount
in cash or, if acceptable to the Company, by check or other instrument. Unless
Participant advises the Company of his or her election to use an alternative
payment method, Participant shall be deemed to have elected to surrender to the
Company Restricted Stock Units which are then vesting with a value sufficient to
satisfy the Minimum Withholding Obligations. If Participant requests that the
Company withhold taxes in addition to the Minimum Withholding Obligations, such
additional withholding must be satisfied by Participant either (x) by paying to
the Company the appropriate amount in cash or, if acceptable to the Company, by
check or other instrument, or (y) provided that Participant has obtained the
approval of either the Company or the Committee (as required under rules adopted
by the Committee) prior to the date of vesting, by surrendering unrestricted
shares of the Company’s Stock which are not being distributed to Participant as
a result of the vesting event and which have then been owned by Participant in
unrestricted form for more than six (6) months.

Under no circumstances will Participant be entitled to satisfy any such
additional withholding by surrendering Restricted Stock Units, shares of the
Company’s Stock that are being distributed to Participant as a result of the
vesting event, or other shares of Stock which have then been owned by
Participant in unrestricted form for six (6) months or less. In addition, under
no circumstances will Participant be entitled to satisfy any Minimum Withholding
Obligations or additional withholding by surrendering Restricted Stock Units
which are not then vesting or any Restricted Stock Units which Participant has
elected to defer under Paragraph 7 above. All payments, surrenders of Units or
shares, elections or requests for approval must be made by Participant in
accordance with such procedures as may

 

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be adopted by the Company in connection therewith, and subject to such rules as
have been or may be adopted by the Committee.

10. Distribution at Vesting. Subject to the provisions of the Plan and this
Agreement, upon vesting of all or part of the Award, the Company shall
distribute to the Participant one share of the Company’s Stock in exchange for
each such vested Restricted Stock Unit, and the applicable Restricted Stock
Units shall be cancelled. Unless determined otherwise by the Company at any time
prior to the applicable distribution, each fractional Restricted Stock Unit
shall vest and be settled in an equal fraction of a share of the Company’s
Stock.

11. Non-Solicitation. In consideration of the Award made to Participant under
this Agreement, for a period of twelve (12) months immediately following
Participant’s Separation Date, Participant shall not directly or indirectly
recruit or solicit for hire, or hire, or assist in any manner in the
recruitment, solicitation for hire or hiring of any employee or officer of the
Company or its subsidiaries, or in any way induce any such employee or officer
to terminate his or her employment with the Company or its subsidiaries. For
purposes of this Paragraph, “Separation Date” means the date on which
Participant’s employment with the Company or its subsidiaries is terminated for
any reason.

12. Entire Agreement. This Agreement constitutes the entire agreement between
the parties and supersedes and cancels any other agreement, representation or
communication, whether oral or in writing, between the parties relating to the
Award, provided that the Agreement shall be at all times subject to the Plan.

13. Amendment. The Committee, in its sole discretion, may amend the terms of
this Award, but no such amendment shall be made which would impair the rights of
Participant, without Participant’s consent.

14. Acknowledgments. Participant: (i) acknowledges receiving a copy of the Plan
Description relating to the Plan, and represents that he or she is familiar with
all of the material provisions of the Plan, as set forth in such Plan
Description; (ii) accepts this Agreement and the Award subject to all provisions
of the Plan and this Agreement; and (iii) agrees to accept as binding,
conclusive and final all decisions and interpretations of the Committee relating
to the Plan, this Agreement or the Award.

Participant evidences his or her agreement with the terms and conditions of this
Agreement, and his or her intention to be bound by this Agreement, by
electronically accepting the Award pursuant to the procedures adopted by the
Company. Upon such acceptance by Participant, this Agreement will be immediately
binding and enforceable against Participant and the Company.

 

THE PROGRESSIVE CORPORATION

By:

 

/s/ Charles E. Jarrett

  Vice President & Secretary

 

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