Exhibit 10.29

THE PROGRESSIVE CORPORATION EXECUTIVE

DEFERRED COMPENSATION PLAN

(2010 Amendment and Restatement)

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TABLE OF CONTENTS

 

          PAGE NO. ARTICLE 1 — DEFINITIONS    1

1.1

   ‘Affiliated Company’    1

1.2

   ‘Annual Deferral Account or Account’    1

1.3

   ‘Award’    1

1.4

   ‘Beneficiary’    2

1.5

   ‘Change in Control’    2

1.6

   ‘Code’    2

1.7

   ‘Committee’    2

1.8

   ‘Company’    2

1.9

   ‘Company Stock Fund’    2

1.10

   ‘Deduction Limitation’    2

1.11

   ‘Deferral Agreement’    3

1.12

   ‘Deferral’    3

1.13

   ‘Disabled and Disability’    3

1.14

   ‘Distribution Event’    3

1.15

   ‘Eligible Executive’    3

1.16

   ‘ERISA’    3

1.17

   ‘Fixed Deferral Period’    3

1.18

   ‘Gainsharing Award’    3

1.19

   ‘Incentive Plan’    3

1.20

   ‘Investment Fund’    3

1.21

   ‘Participant’    4

1.22

   ‘Performance-Based Stock Award’    4

1.23

   ‘Plan’    4

1.24

   ‘Plan Year’    4

1.25

   ‘Restricted Stock’    4

1.26

   ‘Restricted Stock Unit’    4

1.27

   ‘Separation from Service’    4

1.28

   ‘Stock’    4

1.29

   ‘Stock Awards’    4

1.30

   ‘Termination of Employment’    4

1.31

   ‘Time-Based Stock Award’    4

1.32

   ‘Trust’    4

1.33

   ‘Trust Agreement’    4

1.34

   ‘Trustee’    5

1.35

   ‘Unforeseeable Emergency’    5

1.36

   ‘Valuation Date’    5 ARTICLE 2 — DEFERRAL OF GAINSHARING AWARDS    5

2.1

   Method of Deferral    5

2.2

   Deferral Agreement Provisions    5

2.3

   Fixed Deferral Periods    6 ARTICLE 3 — DISTRIBUTIONS AND WITHDRAWALS    7

3.1

   Date of Distribution    7

3.2

   Method of Distribution    8

3.3

   Amount of Distribution    8

 

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3.4

   Form of Distribution    9

3.5

   Involuntary Cashouts    9

3.6

   Special Distributions    9 ARTICLE 4 — ACCOUNTS    10

4.1

   Establishment of Annual Deferral Accounts    10

4.2

   Investment of Accounts    10

4.3

   Valuation of Investment Funds    11

4.4

   Valuation of Accounts    11

4.5

   Nature of Accounts    11

4.6

   Account Statements    11 ARTICLE 5 — INVESTMENT FUNDS    12

5.1

   Investment Funds    12

5.2

   Investment Elections of Participants    12

5.3

   Transfers    12

5.4

   Special Rule for Stock Awards    12

5.5

   Nature of Investment Funds    13

5.6

   Liquidation of Investment Funds    13 ARTICLE 6 — TRUST    13

6.1

   Establishment of Trust    13 ARTICLE 7 — PLAN OPERATION AND ADMINISTRATION   
14

7.1

   Powers of Committee    14

7.2

   Reliance on Tables, etc.    14

7.3

   Indemnification    15

7.4

   Notices to Committee    15 ARTICLE 8 — CLAIMS PROCEDURES    15

8.1

   Establishment of Claims Procedure    15

8.2

   Claims Denials    15

8.3

   Appeals of Denied Claims    16

8.4

   Review of Appeals    16

8.5

   Extensions    17

8.6

   Claims Denials    17 ARTICLE 9 — AMENDMENT AND TERMINATION OF THE PLAN    17

9.1

   Amendment    17

9.2

   Termination    18

9.3

   Liquidation of the Trust    18 ARTICLE 10 — MISCELLANEOUS PROVISIONS    18

10.1

   Headings    18

10.2

   Plan Not Contract of Employment    18

10.3

   Severability    19

10.4

   Prohibition on Assignment    19

10.5

   Number and Gender    19

10.6

   Governing Law    19

10.7

   Satisfaction of Claims    19

10.8

   No Liability    19

10.9

   Tax Withholding    20

10.10

   Facility of Payment    20

10.11

   Repayment of Gainsharing Awards    20

10.12

   Stock Subject to the Plan    20

 

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THE PROGRESSIVE CORPORATION EXECUTIVE

DEFERRED COMPENSATION PLAN

(2010 Amendment and Restatement)

WHEREAS, The Progressive Corporation (“Company”) maintains The Progressive
Corporation Executive Deferred Compensation Plan pursuant to a 2008 Amendment
and Restatement and one amendment thereto; and

WHEREAS, it is desired to amend and restate the Plan;

NOW, THEREFORE, effective January 1, 2010, the Plan is hereby amended and
restated in its entirety to provide as follows:

GRANDFATHERED PROVISIONS

GOVERNING CERTAIN PRIOR DEFERRALS

The Plan, as in effect on December 31, 2007, shall remain unchanged and continue
in full force and effect, but only with respect to Awards that were earned and
became vested on or before December 31, 2004. For the period January 1, 2005
through December 31, 2007, the Plan was operated in compliance with Section 409A
of the Code, pursuant to a reasonable interpretation of that section, as it was
then in effect, with respect to Awards that were earned or become vested on or
after January 1, 2005.

AMENDED AND RESTATED PROVISIONS

Effective January 1, 2010, the Plan is hereby amended and restated in its
entirety to provide as follows:

ARTICLE 1

DEFINITIONS

1.1 “Affiliated Company” means any corporation included in the affiliated group
of corporations as defined in Section 1504 of the Code (determined without
regard to 1504(b)) of which the Company is the common parent corporation.

1.2 “Account” or “Deferral Account” shall have the meaning set forth in
Section 4.1.

1.3 “Award” means a Gainsharing Award or Stock Award.

 

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1.4 “Beneficiary” means such person(s) as the Participant has designated. A
Participant may change his/her Beneficiary designation at any time. All
Beneficiary designations (including changes) shall be made in writing on such
forms as the Committee shall prescribe, and shall become effective only when
received and accepted by the Committee; provided, however, that a Beneficiary
designation (including a change) received by the Committee after the designating
Participant’s death shall be disregarded. In the absence of a Beneficiary
designation, or if the designated Beneficiary is no longer living or in
existence at the time of the Participant’s death, all distributions payable from
the Plan upon the Participant’s death shall be paid to the Participant’s estate.

1.5 “Change in Control” means a change in the ownership of the Company, a change
in effective control of the Company, or a change in the ownership of a
substantial portion of the Company’s assets, each as determined in accordance
with Section 409A of the Code.

1.6 “Code” means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated pursuant thereto.

1.7 “Committee” means the Compensation Committee of the Board of Directors of
the Company, or any successor committee.

1.8 “Company” means The Progressive Corporation, an Ohio corporation, or its
successors.

1.9 “Company Stock Fund” means an Investment Fund consisting of Stock and cash,
and administered in accordance with such rules regarding reinvestment of
dividends and treatment of fractional shares as the Committee shall prescribe.

1.10 “Deduction Limitation” means the following described limitation on a
payment that may otherwise be distributable under the Plan. If the Committee
determines in good faith that there is a reasonable anticipation that any
compensation to a Participant for a taxable year of the Company would not be
deductible by the Company solely by reason of the limitation under Code
Section 162(m), the Committee may elect to defer all or any portion of a
distribution otherwise payable to the Participant under this Plan to the extent
necessary to preserve the Company’s deduction under Code Section 162(m) for such
taxable year; provided, however, that if the Committee elects to defer a portion
of a distribution in respect of a Participant pursuant to this Section 1.10,
then the Committee shall also defer all remaining portions of such distribution
to the extent permissible under this Section 1.10. Any amounts deferred pursuant
to this limitation shall continue to be deemed to be invested as provided in
Article 5. The amounts so deferred (subject to investment gains and losses)
shall be distributed to the Participant or his or her Beneficiary (if the
Participant dies) no later than the last day of the Plan Year in which the
Committee determines in good faith that the deductibility of compensation paid
or payable to the Participant for the taxable year of the Company during which
the distribution is made will not be limited by Code Section 162(m), or the last
day of the Plan Year in which the Participant experiences a Separation from
Service (or, if later, no later than six months and one day following the date
of such Separation from Service).

 

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1.11 “Deferral Agreement” means an agreement entered into by an Eligible
Executive pursuant to Article 2.

1.12 “Deferral” means an amount credited to a Deferral Account pursuant to a
Deferral Agreement.

1.13 “Disabled” and “Disability” means that a Participant is, by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve (12) months, receiving short-term and/or long-term disability
benefits for a period of not less than three (3) months under The Progressive
Health, Life and Disability Benefits Plan, or any similar successor plan.

1.14 “Distribution Event” means, as to each Participant, the earliest of the
following events:

 

  (i) the Participant’s death;

 

  (ii) the Participant’s Termination of Employment; or

 

  (iii) Change in Control.

1.15 “Eligible Executive” means any executive of the Company or any Affiliated
Company who has a target Gainsharing Award of 35% or more of salary or who is
designated in writing as an Eligible Executive by the Committee, excluding,
however, individuals who are not residents of the United States or are not
working at a location in the United States.

1.16 “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated pursuant thereto.

1.17 “Fixed Deferral Period” shall have the meaning set forth in Section 2.3.

1.18 “Gainsharing Award” means any bonus or other incentive award payable with
respect to a Plan Year under any plan that expressly allows deferrals under this
Plan, including The Progressive Corporation Gainsharing Plan, The Progressive
Capital Management Bonus Plan, The Progressive Corporation Executive Bonus Plan
and any other plan or program as may be designated by the Committee.

1.19 “Incentive Plan” means The Progressive Corporation 2003 Incentive Plan, as
amended from time to time or any similar plan that may be adopted by the Company
in the future and that provides for the issuance of restricted stock and/or
restricted stock units.

1.20 “Investment Fund” means a device established from time to time by the
Committee pursuant to Section 5.1 that is used to calculate gains and losses in
amounts deferred by Participants under the Plan.

 

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1.21 “Participant” means an Eligible Executive who has deferred receipt of a
portion of any Award pursuant to a Deferral Agreement. Participation shall begin
on the date that a Deferral Account is established in the name of the
Participant and shall end on the date that the Participant dies or receives a
distribution of the balance of all his/her Deferral Accounts.

1.22 “Performance-Based Stock Award” means an Award of “Performance-Based
Restricted Stock” or “Performance-Based Restricted Stock Units,” (or their
equivalents) as defined in an Incentive Plan.

1.23 “Plan” means The Progressive Corporation Executive Deferred Compensation
Plan (2010 Amendment and Restatement), as set forth herein and as it may be
amended from time to time.

1.24 “Plan Year” means 2010 and each subsequent calendar year.

1.25 “Restricted Stock” means an award of shares of Stock that is made pursuant
to an Incentive Plan and is subject to restrictions.

1.26 “Restricted Stock Unit” ” means an award, the value of which is determined
by reference to a quantity of Stock, that is granted under an Incentive Plan and
is subject to restrictions.

1.27 “Separation from Service” shall have the meaning set forth in Section 409A
of the Code.

1.28 “Stock” means the Common Shares, $1.00 par value, of the Company.

1.29 “Stock Awards” means an award of Restricted Stock or Restricted Stock
Units.

1.30 “Termination of Employment” means the voluntary or involuntary cessation of
a Participant’s employment with the Company and all Affiliated Companies as a
result of a Separation from Service for any reason other than death, Disability
or a military leave, sick leave or other leave of absence that is reasonably
expected to last for a period of less than six months, or any leave of absence
for which the Participant retains a right to reemployment either by statute or
by contract with the Company.

1.31 “Time-Based Stock Award” means an Award of “Time-Based Restricted Stock” or
“Time-Based Restricted Stock Units,” (or their equivalents) as defined in an
Incentive Plan.

1.32 “Trust” shall mean the trust maintained pursuant to the Trust Agreement and
known as The Progressive Corporation Executive Deferred Compensation Trust.

1.33 “Trust Agreement” shall mean the agreement of trust between the Company and
the Trustee executed in furtherance of the Plan, as the same may be amended from
time to time.

 

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1.34 “Trustee” shall mean the person selected from time to time by the Company
to serve as trustee under the Trust Agreement.

1.35 “Unforeseeable Emergency” shall have the meaning set forth in Section 409A
of the Code.

1.36 “Valuation Date” shall mean each day that the New York Stock Exchange is
open for trading.

ARTICLE 2

DEFERRAL OF AWARDS

2.1 Method of Deferral.

Each Eligible Executive may elect to defer receipt of all or a portion of
his/her Gainsharing Award and/or the entirety of any of his/her Stock Awards in
respect of any Plan Year by signing a Deferral Agreement and delivering it to
the Committee or by completing a Deferral Agreement and transmitting it to the
Committee via the Company’s electronic mail system. If a Gainsharing Award is
payable in installments, each installment, whether or not payable in the same
Plan Year, shall be subject to the same Deferral Agreement. Any taxes or other
amounts due with respect to any deferred Gainsharing Award or Stock Award shall
be paid by the Eligible Executive to the Company no later than the date
specified by the Company.

2.2 Deferral Agreement Provisions.

Each Deferral Agreement must satisfy all of the following requirements:

 

  (a) it must be in the form specified by the Committee;

 

  (b) it must be delivered in writing, or transmitted electronically, to the
Committee in accordance with such procedures as the Committee may establish from
time to time.

 

  (c) it must be irrevocable;

 

  (d) as to deferrals of Gainsharing Awards, it must apply to only one such
Gainsharing Award;

 

  (e) as to deferrals of Stock Awards, it must apply to all Time-Based Stock
Awards granted during the Plan Year, all Performance-Based Stock Awards granted
during the Plan Year, or both;

 

  (f) it must be delivered to the Committee in writing, or received by the
Committee via the Company’s electronic mail system, (i) as to each Gainsharing
Award, prior to the Plan Year in which the Gainsharing Award will be earned, and
(ii) as to each Restricted Stock Award, prior to the Plan Year the Stock Award
is granted;

 

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  (g) as to deferrals of Gainsharing Awards, it must specify the percentage of
the Eligible Executive’s Gainsharing Award to be deferred, which percentage
shall not be less than ten percent (10%). The same deferral percentage shall
apply to each installment of a Gainsharing Award covered by the Deferral
Agreement. However, a Deferral Agreement may provide for the deferral of a
percentage of that portion of a Gainsharing Award that exceeds a specified gross
dollar amount, which percentage shall not be less than ten percent (10%).
Notwithstanding the preceding provisions of this Section 2.2(g), no Deferral
shall be less than such dollar amount as the Committee may specify from time to
time;

 

  (h) as to deferral of a Stock Award, it must apply to the entirety of each
Time-Based Stock Award granted during the Plan Year, the entirety of each
Performance-Based Stock Award granted during the Plan Year, or both;

 

  (i) it must specify whether the balance of the Deferral Account to be
established pursuant to that Deferral Agreement will be distributed in a lump
sum, in three (3) annual installments, in five (5) annual installments, or in
ten (10) annual installments;

 

  (j) it must specify the Fixed Deferral Period, if any, elected by the Eligible
Executive pursuant to Section 2.3 of this Plan; and

 

  (k) it must contain such other provisions, conditions and limitations as may
be required by the Company or the Committee.

2.3 Fixed Deferral Periods.

If an Eligible Executive wishes to defer receipt of all or a portion of any
Award for a fixed period of time (“Fixed Deferral Period”), then his/her
Deferral Agreement relating to such Award shall specify that Fixed Deferral
Period. Such Fixed Deferral Period shall not be less than three (3) years
following (i) in the case of a deferral of all or a portion of a Gainsharing
Award, the end of the Plan Year in which the Gainsharing Award will be earned
and (ii) in the case of a deferral of a Stock Award, the end of the Plan Year in
which the last of the restrictions applicable to the Stock Award expires. In the
case of a Stock Award as to which restrictions expire in installments, the Fixed
Deferral Period must end on the same date for all installments. Notwithstanding
the preceding provisions of this Section 2.3, Eligible Executives may not elect
a Fixed Deferral Period with respect to the deferral of any Performance-Based
Stock Award.

 

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ARTICLE 3

DISTRIBUTIONS AND WITHDRAWALS

3.1 Date of Distribution.

Distribution of the balance of each Deferral Account of a Participant shall be
made or shall commence within thirty (30) days following the earlier of (i) the
date the Committee receives notice that a Distribution Event has occurred, or
(ii) the date on which the Fixed Deferral Period, if any, applicable to such
Account expires. Notwithstanding the preceding provisions, each distribution
made on account of a Participant’s Termination of Employment shall not be made
or commence until six (6) months after the date of such Termination of
Employment. If Distribution is to be made in installments, payment of
installments following the first installment shall be made within thirty
(30) days following each anniversary of (1) the date referred to in clause
(i) or (ii) of the first sentence of this Section 3.1 or (2) the date of a
Participant’s Termination of Employment, as applicable, until all installments
have been paid.

The Committee, in its sole discretion, may also permit distribution of the
entire balance of all of a Participant’s Deferral Accounts to be made within
thirty (30) days following the date the Participant is determined by the
Committee to be Disabled. If the Committee approves such a Disability
distribution, no further Deferrals shall be made with respect to the Disabled
Participant following the date of the Committee’s approval, and each Deferral
Agreement to which such Participant is then a party shall be of no further
effect.

The Committee in its sole discretion may also permit distribution of all or a
portion of the balance of a Participant’s Deferral Accounts to be made following
the Committee’s receipt of written notice that an Unforeseeable Emergency has
occurred with respect to such Participant. Such distribution shall be limited to
the amount reasonably necessary to satisfy the need created by such
Unforeseeable Emergency, plus any applicable taxes. If the Committee approves
such an Unforeseeable Emergency distribution, no further Deferrals shall be made
with respect to such Participant following the date of the Committee’s approval,
and each Deferral Agreement to which such Participant is then a party shall be
of no further effect. To the extent permitted under Section 409A of the Code, a
Participant who receives a distribution due to an Unforeseeable Emergency may
enter into a new Deferral Agreement in any Plan Year following the Plan Year in
which the Participant received such distribution.

Notwithstanding the preceding provisions of this Section 3.1, a Participant may
elect to change the date any distribution on account of expiration of a Fixed
Deferral Period is to be made or commence. Each such election change must be
made in writing and on such forms as the Committee shall specify. Each such
election change must be delivered to the Committee at least one (1) year prior
to the expiration of the Fixed Deferral Period and shall delay the payment or
commencement of distributions to the Participant for a period of at least five
(5) years following the date such distribution otherwise would have been made or
would have commenced. In the case of a distribution to be made in installments,
the provisions of this paragraph shall apply to each installment payment as if
each such installment payment were a separate distribution.

 

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Participants desiring to receive a distribution due to Disability or
Unforeseeable Emergency, shall submit a written request to the Committee in such
form as it shall specify.

3.2 Method of Distribution.

Each distribution of all or a portion of the balance of a Deferral Account shall
be made to the Participant, except that any such distribution made on account of
the Participant’s death shall be made to the Participant’s Beneficiary. Each
distribution made on account of the Participant’s death, Disability,
Unforeseeable Emergency or a Change in Control shall be paid in a lump sum. Each
distribution made on account of the Participant’s Termination of Employment or
expiration of a Fixed Deferral Period shall be paid in either a lump sum or
installments, as specified in the applicable Deferral Agreement.

If a Participant elects to receive payment in installments and dies prior to
payment of all installments, the balance remaining unpaid at his/her death shall
be paid to his/her Beneficiary in a lump sum.

Installment payments shall be paid in three (3) annual installments, in five
(5) annual installments or in ten (10) annual installments, as specified in the
applicable Deferral Agreement.

Notwithstanding the preceding provisions of this Section 3.2, a Participant may
elect to change the method of distribution elected in respect of any
distribution to be made on account of Termination of Employment or expiration of
a Fixed Deferral Period to any of the four permissible distribution options set
forth in Section 2.2(i). Such election change shall not take effect until the
first anniversary of the date it is delivered to the Committee. Each such
election change must be made in writing and on such forms as the Committee shall
specify. Any election change with respect to a Fixed Deferral Period must be
delivered to the Committee at least one (1) year prior to the expiration of the
Fixed Deferral Period. In addition, any election change with respect to a
Termination of Employment or Fixed Deferral Period shall delay the payment or
commencement of distributions to a Participant for a period of at least five
(5) years following the date such distribution otherwise would have been made or
would have commenced.

3.3 Amount of Distribution.

The amount of each lump sum payment shall be equal to the balance of the
Deferral Account, as of the Valuation Date immediately preceding the date of any
distribution from the Plan. In the case of a lump sum payment made upon the
occurrence of an Unforeseeable Emergency, the amount shall be such portion of
such balance as the Committee, in its sole discretion, shall determine, as being
reasonable necessary to meet the need created by such Unforeseeable Emergency,
plus any applicable taxes. The amount of each installment payment shall be equal
to the balance of the Deferral Account as of the Valuation Date immediately
preceding the date of payment multiplied by a fraction, the numerator of which
is one and the denominator of which is the number of years

 

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remaining in the period over which installments are to be paid. Installment
distributions to be made in Stock shall be rounded to the nearest whole share.
Notwithstanding anything in the Plan to the contrary, all distributions, except
those made on account of a Change in Control, are subject to the Deduction
Limitation.

3.4 Form of Distribution.

Distributions of Deferrals of Stock Awards granted in 2005 and later years shall
be made in Stock, with any fractional shares of Stock and any portion of such
distribution that is derived from cash dividends on deferred Restricted Stock
Awards to be made in cash. All other Plan distributions shall be made in cash.

3.5 Involuntary Cashouts.

If, at any time during a Plan Year, the aggregate balance of a Participant’s
Deferral Accounts under the Plan is less than the applicable dollar amount under
Section 402(g)(1)(B) of the Code for that Plan Year, the Committee, in its sole
discretion, may distribute such aggregate balance to such Participant in a lump
sum.

3.6 Special Distributions.

Notwithstanding anything in this Plan to the contrary,

 

  (i) The Committee, in its sole discretion, may make payment of all or a
portion of one or more Participant’s Deferral Accounts at any time that the Plan
fails to meet the requirements of Section 409A of the Code. Such payment may not
exceed the amount required to be included in income of such Participant(s) as a
result of such failure; and

 

  (ii) The Committee, in its sole discretion, may distribute all or any portion
of the Deferral Accounts of one or more Participants to reflect payment of
state, local or foreign tax obligations or obligations imposed by the Federal
Insurance Contributions Act (FICA), including the additional tax at source on
wages, arising from participation in the Plan that apply to an amount deferred
under the Plan before the amount is paid or made available to the Participant.
Such payment to a Participant may not exceed the amount of such taxes due as a
result of such Participant’s participation in the Plan. Such payment may be made
to the Participant in the form of withholding pursuant to provisions of
applicable state, local or foreign law, or by distribution directly to the
Participant.

 

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ARTICLE 4

ACCOUNTS

4.1 Establishment of Deferral Accounts.

The Committee shall establish a Deferral Account in the name of each Participant
for each Gainsharing Award, or portion thereof, and each Stock Award that is the
subject of a Deferral Agreement. As to Deferrals of Gainsharing Awards, each
such Account shall be established as of the first date that such Gainsharing
Award, or portion thereof, otherwise would have been paid to the Participant. As
to deferrals of Stock Awards, each such Account shall be established as of the
date that the restrictions applicable to such Stock Award expire. In the case of
a Stock Award as to which the restrictions expire at different times for
different portions of the Award, such Account shall be established as of the
date the first of such restrictions expires. Each Deferral Account shall be
credited with the deferred portion of such Award at the time the Account is
established, or, in the case of a Stock Award as to which the restrictions
expire at different times for different portions of the Award, from time-to-time
as such restrictions expire. Thereafter, all Deferral Accounts shall be valued
and administered as provided in this Article. Notwithstanding anything in the
Plan to the contrary, the Trustee may combine two (2) or more of any
Participant’s Deferral Accounts into a single Account, if the Deferral Accounts
to be combined (i) are subject to Fixed Deferral Periods ending on the same date
or (ii) are not subject to Fixed Deferral Periods at all.

4.2 Investment of Accounts.

All credits to a Deferral Account of a Participant shall be deemed to be
invested in such Investment Fund or Funds as the Participant shall elect from
time to time in accordance with Article 5. The number of shares of Stock to be
credited to a Participant’s Account by virtue of a Participant’s initial
election to invest a portion of a Deferral in the Company Stock Fund shall be
determined on the date of the Deferral in accordance with such procedures as the
Committee shall establish, based on the weighted average price paid for all
shares of Stock purchased by the Trustee and deposited in the Trust on that date
pursuant to Article 6. If a Participant has any portion of a Deferral in the
Company Stock Fund on the record date for a dividend to be paid on the Company’s
Stock, an amount determined at a per share rate equivalent to such dividend
shall be credited to the Participant’s Account as of the payment date for such
dividend, and such amount shall be deemed to be reinvested in the Company Stock
Fund. Notwithstanding the preceding provisions of this Section 4.2, (i) all
credits to a Deferral Account of a Participant relating to a deferred Stock
Award granted prior to March 17, 2005 (and dividends thereon), shall be deemed
to be invested in the Company Stock Fund until six (6) months and one (1) day
following the expiration of the restrictions applicable to such Award, unless
otherwise determined by the Committee at or after the deferral of such Award,
and, thereafter, the preceding provisions of this Section 4.2 shall apply, and
(ii) all credits to a Deferral Account of a Participant relating to a deferred
Stock Award granted on or after March 17, 2005 (including dividends thereon),
shall be deemed to be invested in the Company Stock Fund until the balance of
such Deferral Account has been distributed in accordance with Article 3.

 

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4.3 Valuation of Investment Funds.

As of each Valuation Date, the Trustee shall compute the value of each
Investment Fund from which shall be determined the net gain or loss of such
Investment Fund since the immediately preceding Valuation Date. The net gain or
loss shall include any unrealized and realized profits and losses, and any
dividends, interest or other income and any expenses which are due or accrued,
but shall not include distributions from such Investment Fund. In determining
the value of each Investment Fund, the Trustee shall use the following values:
securities listed on any nationally recognized securities exchange shall be
valued at the closing price reported on any such exchange on the Valuation Date,
or, if there were no sales on the Valuation Date, then at the last quoted bid
price on the Valuation Date. Securities not listed on a recognized securities
exchange shall be valued at the last quoted closing bid price on the Valuation
Date. A unit of participation in a common trust fund maintained by the Trustee
or a share in a mutual fund shall be valued at the unit value, or share price
respectively, in effect at the close of business on the Valuation Date.
Securities with respect to which there were no available sale prices or bid
prices on the Valuation Date, and any other investments, shall be valued at
prices deemed by the Trustee to represent the fair market value thereof on the
Valuation Date.

4.4 Valuation of Accounts.

As of each Valuation Date, the net gain or loss of each Investment Fund shall be
allocated among the appropriate Deferral Accounts in accordance with such
procedures as the Committee shall establish, which procedures shall apply
uniformly to all Participants.

4.5 Nature of Accounts.

All credits to each Deferral Account of each Participant shall be recorded as a
liability on the books of the Company. However, no Participant or Beneficiary
shall have any proprietary rights of any nature with respect to any Account of
any Participant or with respect to any funds, securities or other property owned
by the Company or any Affiliated Company that is held in the Trust or that
otherwise may be represented from time to time by Investment Funds. All payments
under the Plan shall be made from the Trust or from the Company’s general funds
and in no event shall any Participant or Beneficiary have any claims or rights
to any payment hereunder that are superior to any claims or rights of any
general creditor of the Company.

4.6 Account Statements.

The Committee will furnish each Participant, or make available to each
Participant on-line, periodic statements of the value of each of his/her
Deferral Accounts.

 

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ARTICLE 5

INVESTMENT FUNDS

5.1 Investment Funds.

The Committee shall establish and maintain the Company Stock Fund and such other
Investment Funds as are specified from time to time by the Company. In this
regard, the Company may choose to offer as Investment Funds any investment
vehicles, including without limitation: (i) securities issued by investment
companies advised by affiliates of the Trustee, (ii) guaranteed investment
contracts recommended by the Trustee, and (iii) collective investment trusts
maintained by the Trustee.

5.2 Investment Elections of Participants.

Each Participant shall make an investment election in the manner prescribed by
the Committee, directing the manner in which his/her Deferrals shall be deemed
to be invested. Each investment election must be made at the time the applicable
Deferral Agreement is signed and may be changed upon notice to the Committee at
any time prior to the deemed deposit of the applicable Deferral into one or more
Investment Funds. Such elections and notices to the Committee must be made in
writing or through the Company’s electronic mail system in accordance with such
procedures as the Committee may prescribe. Each Participant may make a separate
investment election for each of his/her Deferral Accounts. Each investment
election shall specify that Deferrals shall be deemed to be deposited in one or
more of the Investment Funds in percentages that are each an integral multiple
of 1% and that in the aggregate equal 100% of the Deferral.

5.3 Transfers.

Amounts deemed to be invested in an Investment Fund pursuant to this Section may
be transferred to another Investment Fund in accordance with such procedures and
limitations as the Committee shall prescribe. The procedures and limitations
prescribed by the Committee may include, without limitation, provisions which
(i) limit transfers to specified dollar amounts or percentages (ii) limit the
number of transfers that each Participant may make each Plan year (iii) limit
the dates as of which transfers may become effective and (iv) impose waiting
periods or other restrictions in connection with multiple transfers in and out
of the same Investment Fund. All such procedures and limitations shall apply
uniformly to similarly situated Participants.

5.4 Special Rule for Stock Awards.

Notwithstanding the preceding provisions of this Article 5, each Deferral of a
Stock Award shall be deemed to be invested in the Company Stock Fund until six
(6) months and one (1) day following the date the restrictions applicable to
such Stock Award expire, unless otherwise determined by the Committee at or
after the deferral of such Award. Thereafter, the Participant may transfer all
or a portion of such Deferral to another Investment Fund in accordance with the
preceding provisions of this Article 5. Notwithstanding

 

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the preceding provisions of this Section 5.4, each Deferral of a Stock Award
granted on or after March 17, 2005 shall be deemed to be invested in the Company
Stock Fund until the Deferral Account to which such Deferral has been credited
has been distributed in accordance with Article 3 of this Plan.

5.5 Nature of Investment Funds.

Notwithstanding anything in the Plan, Trust or any Deferral Agreement to the
contrary, no Participant shall have any rights or interests in any particular
funds, securities or property of the Company, any Affiliated Company or the
Trust, or in any investment vehicle in which Deferrals are deemed to be
invested, by virtue of any investment election made by the Participant under the
Plan, any deemed investment under the Plan or any transactions engaged in by the
Trust. Each Deferral Account, however, shall be credited/charged in accordance
with Article 4 with gains/losses as if the Participant in fact had made a
corresponding actual investment.

5.6 Liquidation of Investment Funds.

If any Investment Fund is liquidated or otherwise ceases to exist without a
successor, then that portion of each Account balance that previously has been
deemed to have been invested in that Investment Fund shall be deemed to have
been transferred to an Investment Fund consisting of money market instruments,
or, if none, such other Investment Fund selected by the Committee.

ARTICLE 6

TRUST

6.1 Establishment of Trust.

The Company shall establish and maintain a Trust to provide a source of funds to
assist the Company in meeting its liabilities under the Plan. Within thirty
(30) days following the end of each Plan Year ending after the Trust has become
irrevocable pursuant to the Trust Agreement, the Company shall be required to
irrevocably deposit additional cash or other property to the Trust in an amount
sufficient to pay each Participant or Beneficiary the benefits payable pursuant
to the terms of the Plan as of the close of that Plan year.

The principal of the Trust, and any earnings thereon, shall be held separate and
apart from other funds of Company and shall be used exclusively for the uses and
purposes of Plan Participants and general creditors of the Company as set forth
herein and in the Trust Agreement. Plan Participants and their Beneficiaries
shall have no preferred claim on, or any beneficial ownership interest in, any
assets of the Trust. Any rights created under the Plan and the Trust Agreement
shall be mere unsecured contractual rights of Plan Participants and their
Beneficiaries against Company. Any assets held by the Trust will be subject to
the claims of the Company’s general creditors under federal and state law in the
event of Insolvency, as defined in the Trust Agreement. All assets deposited in
the

 

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Trust shall be held, administered and distributed by the Trustee in accordance
with the Trust Agreement. The Company shall pay directly, or reimburse the
Trustee for, all taxes due in respect of any income or gains on Trust assets.

ARTICLE 7

PLAN OPERATION AND ADMINISTRATION

7.1 Powers of Committee.

The Committee will have full power to administer the Plan. Such power includes,
but is not limited to, the following authority:

 

  (a) to make and enforce such rules and regulations as it deems necessary or
proper for the efficient administration of the Plan;

 

  (b) to interpret the Plan and to decide all matters arising thereunder,
including the right to resolve or remedy any ambiguities, errors,
inconsistencies or omissions. All such interpretations shall be final and
binding on all parties;

 

  (c) to compute the amounts payable to any Participant or Beneficiary or other
person in accordance with the provisions of the Plan;

 

  (d) to authorize disbursements from the Trust or the Plan;

 

  (e) to keep such records and submit such filings, elections, applications,
returns or other documents or forms as may be required under ERISA, the Code or
other applicable law;

 

  (f) to appoint such agents, counsel, accountants and consultants as may be
desirable to assist in administering the Plan;

 

  (g) To exercise the other powers that are expressly granted to it herein, or
that are impliedly necessary for it to carry out any of its responsibilities
hereunder; and

 

  (h) by written instrument, to delegate any of the foregoing powers.

7.2 Reliance on Tables, etc.

The Committee will be entitled, to the extent permitted by law, to rely
conclusively on all tables, valuations, certificates, opinions and reports which
are furnished by any accountant, Trustee, counsel or other expert retained by
the Committee to assist it in administering the Plan.

 

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7.3 Indemnification.

In addition to whatever rights of indemnification to which employees, officers
and directors of the Company and the Affiliated Companies may be entitled under
the articles of incorporation, regulations or bylaws of the Company or the
Affiliated Companies, under any provision of law, or under any other agreement,
the Company shall satisfy any liabilities actually and reasonably incurred by
any such employee, officer or director, including expenses, attorneys’ fees,
judgments, fines and amounts paid in settlement, in connection with any
threatened, pending, or completed action, suit, or proceeding which is related
to the exercise or failure to exercise by such person or persons of any of the
powers, authority, responsibilities, or discretion of the Company, the
Affiliated Companies or the Committee provided under the Plan or the Trust
Agreement, or reasonably believed by such person or persons to be provided
thereunder, and any action taken by such person or persons in connection
therewith.

7.4 Notices to Committee.

The Committee shall designate one or more addresses to which notices and other
communications to the Committee shall be sent. No notice or other communication
shall be considered to have been given to or received by the Committee until it
has been delivered to the Committee’s attention at one of such designated
addresses.

ARTICLE 8

CLAIMS PROCEDURES

8.1 Establishment of Claims Procedure.

The Committee shall establish reasonable procedures under which a claimant, who
may be a Participant, or Beneficiary, or his/her duly authorized representative,
may present a claim for benefits under this Plan.

8.2 Claims Denials.

Unless such claim is allowed in full by the Committee, written notice of the
denial shall be furnished to the claimant within ninety (90) days (which may be
extended by a period not to exceed an additional ninety (90) days if special
circumstances so require and written notice to the claimant is given prior to
the expiration of the initial ninety (90) day period describing such
circumstances and indicating the date by which the Committee expects to render
its determination) setting forth the following in a manner calculated to be
understood by the claimant:

 

  (i) The specific reason(s) for the denial;

 

  (ii) Specific reference(s) to any pertinent provision(s) of the Plan or rules
promulgated pursuant thereto on which the denial is based;

 

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  (iii) A description of any additional information or material as may be
necessary to perfect the claim, together with an explanation of why it is
necessary;

 

  (iv) A description of the Plan’s claims review procedures and the time limits
applicable to such procedures, including a statement of the claimant’s right to
bring a civil action under Section 502(a) of ERISA following an adverse benefit
determination on review; and

 

  (v) An explanation of the steps to be taken if the claimant wishes to resubmit
his/her claim for review.

8.3 Appeals of Denied Claims.

Within a reasonable period of time after the denial of the claim, but in any
event, not to be more than sixty (60) days, the claimant or his/her duly
authorized representative may make written application to the Committee for a
review of such denial. The claimant or his/her representative, may, upon request
and free of charge, review or receive copies of documents, records and other
information relevant to the claimant’s claim for benefits, and may submit
written comments, documents, records and other information relating to the claim
for benefits.

8.4 Review of Appeals.

If an appeal is timely filed, the Committee shall conduct a full and fair review
of the claim and mail or deliver to the claimant its written decision within
sixty (60) days after the claimant’s request for review (which may be extended
by a period not to exceed an additional sixty (60) days if special circumstances
or a hearing so require and written notice to the claimant is given prior to the
expiration of the initial sixty (60) day period describing such special
circumstances and indicating the date by which the Committee expects to render
its determination). In conducting its review, the Committee shall take into
account all comments, documents, records and other information submitted by the
claimant relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination. The Committee’s
decision on review shall:

 

  (i) Be written in a manner calculated to be understood by the claimant;

 

  (ii) State the specific reason(s) for the decision;

 

  (iii) Make specific reference to pertinent provision(s) of the Plan;

 

  (iv) State that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to the claimant’s claim for benefits; and

 

  (v) Include a statement of the claimant’s right to bring a civil action under
Section 502(a) of ERISA.

 

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  8.5 Extensions.

If a period of time is extended, as permitted under Sections 8.2 and 8.4 above,
due to a claimant’s failure to submit information to decide a claim, the period
for making the benefit determination on review shall be tolled from the date on
which the notification of the extension is sent to the claimant until the date
on which the claimant responds to the request for additional information.

8.6 Disability Claims.

Claims involving a determination of Disability or payments related to Disability
shall comply with and follow the applicable Department of Labor regulations.
Upon the filing of an initial Disability-related claim, the Committee will make
a decision regarding a Participant’s claim within 45 days of such Participant’s
request, unless special circumstances would make rendering a decision within the
45-day period unfeasible. The Committee will notify the Participant of its need
to extend the decision deadline and may extend the deadline for up to two
additional 30-day periods, if necessary. The Participant will be permitted to
appeal any adverse initial determination up to 180 days after the determination
is issued. The Committee will make a decision within a reasonable period of time
after receiving any appeal but in no event later than 45 days after a
Participant’s appeal is received unless special circumstances would make
rendering a decision within the 45-day period unfeasible. The Committee will
notify a Participant of any need to extend the decision deadline and may extend
the deadline for no more than an additional 45 days. More details about the
Disability retirement procedure are available from the Committee.

ARTICLE 9

AMENDMENT AND TERMINATION OF THE PLAN

9.1 Amendment.

The Company may amend the Plan and Trust Agreement in any respect at any time
for any reason by action of the Committee without liability to any Participant,
Beneficiary or other person for any such amendment or for any other action taken
pursuant to this Section 9.1, provided that any amendment required to be
approved by the Company’s shareholders pursuant to Section 162(m) of the Code
shall not be effective until approved by the Company’s shareholders in
accordance with the requirements of Section 162(m) and further provided that no
such amendment shall be made retroactively in a manner that would deprive any
Participant of any rights or benefits which have accrued to his/her benefit
under the Plan as of the date such amendment is proposed to be effective, unless
such amendment is necessary to comply with applicable law.

 

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9.2 Termination.

The Company may terminate the Plan at any time for any reason by action of the
Committee without any liability to any Participant, Beneficiary or other person
for any such termination or for any other action taken pursuant to this
Section 9.2. Following termination of the Plan, and notwithstanding the
provisions of any Deferral Agreement entered into prior to such termination, no
additional Deferrals may be made hereunder, but all existing Accounts shall
continue to be administered in accordance with the Plan, as in effect
immediately prior to termination, and shall be distributed in accordance with
such terms of the Plan and the applicable Deferral Agreements, unless and until
the Company elects to accelerate distribution as provided below. At any time on
or after the effective date of termination of the Plan, the Company, in its sole
discretion, may elect to accelerate the distribution of the entire balance of
each Participant’s Accounts to the extent permitted under Section 409A of the
Code. Such accelerated distributions shall be made (i) at a time selected by the
Company in accordance with Section 409A of the Code and (ii) in a lump sum based
on the value of the Accounts, determined as of the Valuation Date immediately
preceding the date of distribution. Upon the completion of distributions to all
Participants or Beneficiaries, as the case may be, no Participant, Beneficiary
or person claiming under or through them, will have any claims in respect of the
Plan.

9.3 Liquidation of the Trust.

The Trust shall continue in existence after the termination of the Plan for such
period of time as may be required to complete the liquidation thereof in
accordance with the terms of this Article 9.

ARTICLE 10

MISCELLANEOUS PROVISIONS

10.1 Headings.

The headings of the Plan have been inserted for convenience of reference only
and are not to be deemed controlling in any constructions of the provisions
herein (other than with respect to defined terms).

10.2 Plan Not Contract of Employment.

The existence of the Plan shall not create, evidence or change any contract of
employment with any Participant. The right of the Company and all Affiliated
Companies to take corrective, disciplinary or other action with respect to their
employees, including terminating their respective employment at any time for any
reason, shall not be affected by any provision of this Plan, and the Company and
the Affiliated Companies will not be deemed responsible to provide continuing
employment for any reason, at any time solely by reason of this Plan.

 

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10.3 Severability.

If any provision of the Plan shall be invalid, such provision shall be fully
severable, and the remainder of the Plan and the application thereof shall not
be affected thereby.

10.4 Prohibition on Assignment.

No right or interest under the Plan of any Participant or Beneficiary shall be
subject at any time or in any manner to anticipation, alienation, assignment
(either at law or in equity), encumbrance (as security or otherwise),
garnishment, levy, execution, or other legal or equitable process, and no
Participant or Beneficiary shall have the power at any time or in any manner to
anticipate, transfer, assign (either at law or in equity), alienate, or subject
to attachment, garnishment, levy, execution or other legal or equitable process,
or in any way encumber, such Participant’s or Beneficiary’s rights or interests
under the Plan, and any attempt to do so shall be void; provided, however, that
the Company shall have the unrestricted right to set off against or recover out
of any payments due a Participant or Beneficiary at the time such payments would
have otherwise been payable hereunder, any amounts owed the Company or any
Affiliated Company by such Participant or Beneficiary.

10.5 Number and Gender.

Any use of the singular shall be interpreted to include the plural and the
plural the singular. Any use of the masculine, feminine or neuter shall be
interpreted to include the masculine, feminine and neuter, as the context shall
require.

10.6 Governing Law.

To the extent not preempted by Federal law, the provisions of the Plan shall be
construed, regulated and administered under the laws of the State of Ohio.

10.7 Satisfaction of Claims.

Any payment to any Participant or Beneficiary in accordance with the terms of
the Plan shall, to the extent thereof, be in full satisfaction of all claims
hereunder, whether they be against the Company, the Committee, or the Trustee,
any of whom may require the Participant or Beneficiary (or legal
representative), as a condition precedent to such payment to execute a release
and receipt therefor.

10.8 No Liability.

Participation in the Plan is entirely at the risk of each Participant. Neither
the Company, any Affiliated Company, the Committee, the Trustee nor any other
person associated with the Plan shall have any liability for any loss or
diminution in the value of Accounts, or for any failure of the Plan to
effectively defer recognition of income or to achieve any Participant’s desired
tax treatment or financial results.

 

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10.9 Tax Withholding.

All payments under the Plan shall be subject to federal, state and local income
tax withholding and other legally required deductions.

10.10 Facility of Payment.

If the Committee determines that a Participant or Beneficiary entitled to
receive a payment under this Plan is (at the time such payment is to be made) a
minor or physically, mentally or legally incompetent to receive such payment and
that another person or an institution has legal custody of such minor or
incompetent individual, the Committee may cause payment to be made to such
person or institution having custody of such Participant or Beneficiary. Such
payment, to the extent made, shall operate as a complete discharge of obligation
by the Committee, the Company, the Trustee and the Trust.

10.11 Repayment of Awards.

If any amount credited to a Deferral Account represents a portion of an Award
that is subsequently found to be repayable by the Participant to the Company or
any Affiliated Company pursuant to the plan pursuant to which the Award was
made, the amount of that credit shall nevertheless remain unaffected by that
repayment obligation, and the Participant shall make the required repayment out
of his/her own funds.

10.12 Stock Subject to the Plan.

Subject to adjustment as provided below, the total number of shares of Stock
reserved and available for issuance in connection with the Plan is Three Million
Three Hundred Sixteen Thousand Three Hundred Eighty-Two (3,316,382). Any Stock
issued hereunder may consist, in whole or in part, of authorized and unissued
shares or treasury shares. If there is a merger, reorganization, consolidation,
recapitalization, share dividend, share split, reverse split, combination of
shares or other change in corporate structure of the Company affecting the
Stock, such substitution or adjustment shall be made in the aggregate number of
shares of Stock reserved for issuance under the Plan, and in the number of
shares deemed to be held in any Account, as may be approved by the Committee in
its sole discretion.

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
duly authorized officers as of this 29th day of December, 2009.

 

THE PROGRESSIVE CORPORATION By:   Charles E. Jarrett Title:   Vice President,
Secretary, and Chief Legal Officer

 

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