Exhibit No. 10(A)
THE PROGRESSIVE CORPORATION
2006 GAINSHARING PLAN

1.   The Progressive Corporation and its subsidiaries (collectively
“Progressive” or the “Company”) have adopted The Progressive Corporation 2006
Gainsharing Plan (the “Plan”) as part of their overall compensation program. The
Plan is performance-based and is administered under the direction of the
Compensation Committee of the Board of Directors of The Progressive Corporation
(the “Committee”).

2.   Plan participants for each Plan year shall be selected by or under the
direction of the Committee from those officers and regular employees of
Progressive who are assigned primarily to the Core Business (as defined below),
another operating business unit or a corporate support function. The gainsharing
opportunity, if any, for those executive officers who participate in The
Progressive Corporation 2004 Executive Bonus Plan (“Executive Plan”) will be
provided by and be a component of that plan, although participants in the
Executive Plan may also participate in this Plan if and to the extent determined
by the Committee. Plan years will coincide with Progressive’s fiscal years.

3.   Annual Gainsharing Payments under the Plan will be determined by
application of the following formula:          Annual Gainsharing Payment = Paid
Earnings x Target Percentage x Performance Factor

4.   Paid Earnings for any Plan year shall mean and include: (a) regular, used
Earned Time Benefit, sick, holiday, funeral and overtime pay received by the
participant during the Plan year for work or services performed during the Plan
year as an officer or employee of Progressive, and (b) retroactive payments of
any of the foregoing items relating to the same Plan year.       For purposes of
the Plan, Paid Earnings shall not include any short-term or long-term disability
payments made to the participant, the earnings replacement component of any
workers’ compensation award, payments from the discretionary cash fund or any
other bonus or incentive compensation awards and unused Earned Time Benefit.    
  Notwithstanding the foregoing, if at the end of the 24th pay period of a Plan
year, any Plan participant’s then current annual salary exceeds his or her
salary range maximum plus $105, then for purposes of computing his or her Annual
Gainsharing Payment under the Plan, his or her Paid Earnings (including regular,
used Earned Time Benefit, sick, holiday and funeral pay) for any bi-weekly pay
period during the Plan year will not exceed 1/26th of his or her annual salary
range maximum (as in effect as of the end of the applicable pay period). Without
regard to that limitation, such participant’s Paid Earnings for the full Plan
year will include the full amount of the following items, if any, received by
such participant for that Plan year: (a) overtime pay, and (b) retroactive
payments of regular, used Earned Time Benefit, sick, holiday, overtime and
funeral pay.

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5.   Target Percentages vary by position. Target Percentages for Plan
participants typically are as follows:

          POSITION   TARGET %  
Senior Executives, Executive Level Managers and Business Leaders
    60-150 %
Directors of Large Functional Areas
    35-60 %
Senior Managers
    20-35 %
Middle Managers
    15-20 %
Senior Professionals and Entry Level Managers
    9 - 20 %
Administrative Support and Entry Level Professionals
    0 - 8 %

    Target Percentages will be established within the above ranges by, and may
be changed with the approval of, the following officers of The Progressive
Corporation (collectively, the “Designated Executives”): (a) the Chief Executive
Officer, and (b) either the Chief Human Resource Officer or the Chief Financial
Officer. Target Percentages also may be changed from year to year by the
Designated Executives.

6.   The Performance Factor

  A.   General

      The Performance Factor shall consist of one or more Profitability and
Growth Components, as described below (“Performance Components”). The
Performance Components may be weighted to reflect the nature of the individual
participant’s assigned responsibilities. The weighting factors may differ among
participants and will be determined, and may be changed from year to year, by or
under the direction of the Committee.

  B.   Profitability and Growth Components

      The Profitability and Growth Components measure the overall operating
performance of Progressive’s Core Business (including the Drive Business
Segment, the Direct Business Segment and the Commercial Auto Business Segment,
but excluding Midland Financial Group, Inc. and other businesses in

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      run-off), or a designated Business Segment, for the Plan year for which an
Annual Gainsharing Payment is to be made. For purposes of computing a
Performance Score for these Components, operating performance results are
measured by one or more Performance Matrices, as established by or under the
direction of the Committee for the Plan year, which assign a Performance Score
to various combinations of profitability and growth outcomes. Except as provided
below, under the Performance Matrices, profitability is measured by the GAAP
Combined Ratio and growth is based on the year-to-year change in Net Earned
Premiums.         For 2006, and for each Plan year thereafter until otherwise
determined by the Committee, separate Performance Scores will be determined, and
separate Gainsharing Matrices will be used, for the Drive Business Segment, the
Direct Business Segment and the Commercial Auto Business Segment. For purposes
hereof, the Drive Business Segment includes Drive Auto, including Strategic
Alliances Drive Auto and Drive Special Lines. The Direct Business Segment
includes Auto and Special Lines business produced by phone or over the Internet.
For purposes of this Plan, the results of the Midland Financial Group, Inc. and
other businesses in run-off are excluded from the Drive, Direct and Commercial
Auto Business Segments and, thus, from Core Business results. Net operating
gains/losses from other Core products, if any, will be apportioned among the
Drive, Direct and Commercial Auto Business Segments in accordance with the
respective amount(s) of Net Earned Premiums generated by such products in each
such Business Segment and the apportioned gains/losses will be included in the
calculation of the Combined Ratio.         The GAAP Combined Ratio will be
separately determined for each of the Drive Business Segment, the Direct
Business Segment and the Commercial Auto Business Segment. The GAAP Combined
Ratio of each such Business Segment will then be matched with growth in Net
Earned Premiums for such Business Segment using the applicable Gainsharing
Matrix, to determine a Performance Score (“Standard Performance Computation”).  
      For 2006 and for each Plan year thereafter until otherwise determined by
the Committee, the operating performance of the Direct Business Segment will be
measured in part by the Standard Performance Computation and in part by the
modified profitability and growth criteria described below (“Modified
Performance Computation”).         For purposes of the Modified Performance
Computation:

  (i)   Profitability is measured by the Lifetime Combined Ratio for new Auto
and Special Lines policies written by the Direct Business Segment during the
Plan year, as compared to a range of possible outcomes set forth in a
Performance Matrix approved by or under the direction of the

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      Committee. The Lifetime Combined Ratio, which projects the profitability
over time of new policies written by the Direct Business during the Plan Year,
will be calculated using the GAAP new and renewal Combined Ratios for the Plan
Year for all Direct Business Segment earned premium, weighted by the expected
new/renewal Lifetime Earned Premium mix, determined by formula approved by or
under the direction of the Committee.     (ii)   Growth is measured by the
year-to-year change in Lifetime Earned Premium (as defined below) for new
business written by the Direct Business Segment. Lifetime Earned Premium, which
incorporates a measure of customer retention into the growth computation, is the
amount of earned premium that the Company is projected to generate over time
with respect to new policies written by the Direct Business Segment during a
given Plan Year (including any subsequent renewals thereof), as determined by a
formula, to be approved by or under the direction of the Committee, that is
developed utilizing a combination of historical experience data and statistical
analysis.

  C.   Component Weighting

      For most participants, the Performance Factor will be determined solely by
the performance results for the Core Business, consisting of the Drive, Direct
and Commercial Auto Business Segments. The Performance Score for the Drive and
Commercial Auto Business Segments will be separately determined by application
of the Standard Performance Computation. The Performance Score for the Direct
Business Segment will be based 50% on the Standard Performance Computation and
50% on the Modified Performance Computation. The resulting Performance Scores
for each of the Drive, Direct and Commercial Auto Business Segments will then be
multiplied by a weighting factor (based on the percentage of Net Earned Premiums
generated by each such Business Segment during the Plan year), the weighted
Performance Scores will be combined and the sum of the weighted Performance
Scores will be the Performance Score for the Core Business.         As noted
above, for most participants, the Performance Factor will be the Performance
Score for the Core Business. For certain employees designated by or under the
direction of the Committee, however, the Performance Factor will be based on the
Performance Scores for both the Core Business, as a whole, and their assigned
Business Segment. Generally, for these employees, the Performance Factor will be
based 50% on the Core Business Performance Score and 50% on their assigned
Business Segment’s Performance Score. For example, for the members of the Direct
Business Leadership Group (as defined below), the Performance Factor will be
based 50% on the Core Business Performance Score and 50% on the Performance
Score for the Direct Business Segment.

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      The Direct Business Leadership Group includes the Direct Business Leader,
the IT Director for the Direct Business Segment and all other employees assigned
primarily to the Direct Business Segment who are eligible to participate in the
Company’s equity incentive plans and have been designated by the Direct Business
Leader.         With respect to each of the IT Business Leaders selected by the
Designated Executives, the Performance Factor will be based on both the Core
Business Performance Score and the Business Segment Performance Score of his or
her assigned Business Segment, in such ratio or otherwise weighted as shall be
determined by or under the direction of the Committee.         The Performance
Score for each Performance Component will be multiplied by the assigned
weighting factor to produce a Weighted Performance Score. The sum of the
Weighted Performance Scores equals the Performance Factor. The final Performance
Factor can vary from 0 to 2.0, based on actual performance versus the
pre-established objectives. The Performance Factor cannot exceed 2.0, regardless
of results.

7.   Subject to Paragraph 9 below, no later than December 31 of each Plan year,
each participant will receive an initial payment in respect of his or her Annual
Gainsharing Payment for that Plan year equal to 75% of an amount calculated on
the basis of Paid Earnings for the first 24 pay periods of the Plan year,
estimated earnings for the remainder of the Plan year, performance data through
the first 11 months of the Plan year (estimated, if necessary) and forecasted
operating results for the remainder of the Plan year. No later than February 15
of the following year, each participant will receive the balance of his or her
Annual Gainsharing Payment, if any, for such Plan year, based on his or her Paid
Earnings and performance data for the entire Plan year.       Any Plan
participant who is then eligible to participate in The Progressive Corporation
Executive Deferred Compensation Plan (“Deferral Plan”) may elect to defer all or
a portion of the Annual Gainsharing Payment otherwise payable to him/her under
this Plan, subject to and in accordance with the terms of the Deferral Plan.

8.   If, for any Plan year, an employee has been selected to participate in both
the Plan and another incentive plan offered by the Company, then with respect to
such employee, the Gainsharing formula set forth in Paragraph 3 hereof shall be
appropriately adjusted by applying a weighting factor to reflect the proportion
of the employee’s total annual incentive opportunity that is being provided by
the Plan. The Committee shall have full authority to determine the incentive
plan or plans in which any employee will participate during any plan year and,
if an employee is selected to participate in more than one plan, the weighting
factor that will apply to each such plan.   9.   Unless otherwise determined by
the Committee, and except as expressly provided herein, in order to be entitled
to receive an Annual Gainsharing Payment for any Plan

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    year, the participant must be assigned to the Core Business or a
participating business unit or support function, and be an active employee of
the Company, on November 30 of the Plan year (“Qualification Date”). Individuals
who are hired on or after December 1 of any Plan year are not entitled to an
Annual Gainsharing Payment for that Plan year.       Any participant who is on a
leave of absence covered by the Family and Medical Leave Act of 1993, personal
leave of absence with the approval of the Company, military leave or short or
long-term disability on the Qualification Date with respect to any Plan year
will be entitled to receive an Annual Gainsharing Payment for such Plan year,
calculated as provided in Paragraphs 3 through 6 above and based on the amount
of Paid Earnings received by such participant during the Plan year.       Annual
Gainsharing will be net of any legally required deductions for federal, state
and local taxes and other items.

10.   The right to any Annual Gainsharing Payment hereunder may not be sold,
transferred, assigned or encumbered by any participant. Nothing herein shall
prevent any participant’s interest hereunder from being subject to involuntary
attachment, levy or other legal process.

11.   The Plan shall be administered by or under the direction of the Committee.
The Committee shall have the authority to adopt, amend, revise and repeal such
rules, guidelines, procedures and practices governing the Plan as it shall, from
time to time, in its sole discretion, deem advisable.       The Committee shall
have full authority to determine the manner in which the Plan will operate, to
interpret the provisions of the Plan and to make all determinations hereunder.
All such interpretations and determinations shall be final and binding on
Progressive, all Plan participants and all other parties. No such interpretation
or determination shall be relied on as a precedent for any similar action or
decision.       Unless otherwise determined by the Committee, all of the
authority of the Committee hereunder (including, without limitation, the
authority to administer the Plan, select the persons entitled to participate
herein, interpret the provisions thereof, waive any of the requirements
specified herein and make determinations hereunder and to select, approve,
establish, change or modify Performance Components and their respective
formulae, weighting factors, performance targets and Target Percentages) may be
exercised by the Designated Executives. In the event of a dispute or conflict,
the determination of the Committee will govern.   12.   The Plan may be
terminated, amended or revised, in whole or in part, at any time and from time
to time by the Committee, in its sole discretion.   13.   The Plan will be
unfunded and all payments due under the Plan shall be made from Progressive’s
general assets.

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14.   Nothing in the Plan shall be construed as conferring upon any person the
right to remain a participant in the Plan or to remain employed by Progressive,
nor shall the Plan limit Progressive’s right to discipline or discharge any of
its officers or employees or change any of their job titles, duties or
compensation.   15.   Progressive shall have the unrestricted right to set off
against or recover out of any Annual Gainsharing Payment or other sums owed to
any participant under the Plan any amounts owed by such participant to
Progressive.   16.   This Plan supersedes all prior plans, agreements,
understandings and arrangements regarding bonuses or other cash incentive
compensation payable to participants by or due from Progressive. Without
limiting the generality of the foregoing, this Plan supersedes and replaces The
Progressive Corporation 2005 Gainsharing Plan (the “Prior Plan”), which is and
shall be deemed to be terminated as of December 31, 2005 (the “Termination
Date”); provided, that any bonuses or other sums earned and payable under the
Prior Plan with respect to any Plan year ended on or prior to the Termination
Date shall be unaffected by such termination and shall be paid to the
appropriate participants when and as provided thereunder.   17.   This Plan is
adopted, and is to be effective, as of January 1, 2006, which is the
commencement of Progressive’s 2006 fiscal year. This Plan shall be effective for
the 2006 Plan year (which coincides with Progressive’s 2006 fiscal year) and for
each Plan year thereafter unless and until terminated by the Committee.   18.  
This Plan shall be interpreted and construed in accordance with the laws of the
State of Ohio.

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