Exhibit 10.41

THE PROGRESSIVE CORPORATION

EXECUTIVE DEFERRED COMPENSATION TRUST

(NOVEMBER 8, 2002 AMENDMENT AND RESTATEMENT)

WHEREAS, The Progressive Corporation Executive Deferred Compensation Trust is
currently maintained pursuant to a December 1, 1998 Amendment and Restatement
between The Progressive Corporation (“Company”) and American Express Trust
Company (“American Express”) as trustee, and the First Amendment thereto; and

WHEREAS, American Express has been removed as trustee effective upon the close
of business on November 8, 2002; and

WHEREAS, Company has designated Fidelity Management Trust Company (“Trustee”) as
the new trustee of the Plan effective November 8, 2002; and

WHEREAS, Company and Trustee desire to amend and restate the Trust Agreement to
reflect the designation of Fidelity Management Trust Company as Trustee and to
make certain other changes in the Trust;

NOW, therefore, effective November 8, 2002, Company and Trustee hereby amend and
restate the Trust Agreement in its entirety to provide as follows:

SECTION 1. Establishment of Trust

(a) Company hereby deposits with Trustee in trust Ten Dollars ($10.00), which
shall become the principal of the Trust to be held, administered and disposed of
by Trustee as provided in this Trust Agreement.

(b) The Trust hereby established shall be irrevocable.

(c) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.

(d) 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 as herein set forth.
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 this 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 Company’s general
creditors under federal and state law in the event of Insolvency, as defined in
Section 3(a) herein. Any assets held by the Trust will also be subject to the
federal and state law claims of general creditors of each subsidiary of Company
that employs Plan participants (“Subsidiary”) in the event of Insolvency, as
defined in Section 3(a) herein, but only to the extent of the amounts due under
the Plan to participants attributable to the period that such participants were
employed by such Subsidiary.

(e) Within 30 days following the end of the Plan year(s), ending after the Trust
has become irrevocable pursuant to Section 1(b) hereof, Company shall be
required to irrevocably deposit additional cash or other property to the Trust
in an amount sufficient to pay each Plan participant or beneficiary the benefits
payable pursuant to the terms of the Plan as of the close of the Plan year(s).
Trustee shall have no duty to enforce any funding obligations of Company and the
duties of Trustee shall be governed solely by the terms of the Trust without
reference to the Plan.

SECTION 2. Payments to Plan Participants and Their Beneficiaries

(a) Company shall deliver to Trustee a schedule (the “Payment Schedule”) that
indicates the amounts payable in respect of each Plan participant (and his or
her beneficiaries), that provides a formula or other instructions acceptable to
Trustee for determining the amounts so payable, the form in which such amount is
to be paid (as provided for or available under the Plan), and the time of
commencement for payment of such amounts. Except as otherwise provided herein,
Trustee shall make payments to the Plan participants and their beneficiaries in
accordance with such Payment Schedule. Company shall have the sole
responsibility for all tax withholding, filings and reports. Trustee shall
withhold such amounts from distributions as Company may direct and shall follow
the instructions of Company with respect to remission of such withheld amounts
to appropriate governmental authorities.

 

1

--------------------------------------------------------------------------------

(b) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan shall be determined by Company or such party as it shall
designate under the Plan, and any claim for such benefits shall be considered
and reviewed under the procedures set out in the Plan.

(c) Company may make payment of benefits directly to Plan participants or their
beneficiaries as they become due under the terms of the Plan. Company shall
notify Trustee of its decision to make payment of benefits directly prior to the
time amounts are payable to participants or their beneficiaries. In addition, if
the principal of the Trust, and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan, Company shall
make the balance of each such payment as it falls due. Trustee shall notify
Company where principal and earnings are not sufficient to make a payment then
due under the Payment Schedule.

SECTION 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When
Company is Insolvent.

(a) Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if the Company, or any subsidiary that ever employed such
participants, is Insolvent, subject to the provisions of Section 3(b) below.
Company or a Subsidiary shall be considered “Insolvent” for purposes of this
Trust Agreement if (i) Company or such Subsidiary is unable to pay its debts as
they become due, or (ii) Company or such Subsidiary is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.

(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company and, to the extent provided in
Section 1(d), each Subsidiary, under federal and state law as set forth below.

(1) The Board of Directors and the Chief Executive Officer of Company shall have
the duty to inform Trustee in writing of Company’s or any Subsidiary’s
Insolvency. If a person claiming to be a creditor of Company or a Subsidiary
alleges in writing to Trustee that Company or such Subsidiary has become
Insolvent, Trustee shall determine whether Company or such Subsidiary is
Insolvent and, pending such determination, Trustee shall discontinue payment of
benefits to Plan participants or their beneficiaries.

(2) Unless Trustee has actual knowledge of Company’s or any Subsidiary’s
Insolvency, or has received notice from Company or a Subsidiary or a person
claiming to be a creditor alleging that Company or a Subsidiary is Insolvent,
Trustee shall have no duty to inquire whether Company or a Subsidiary is
Insolvent. Trustee may in all events rely on such evidence concerning Company’s
or any Subsidiary’s solvency as may be furnished to Trustee and that provides
Trustee with a reasonable basis for making a determination concerning Company’s
or any Subsidiary’s solvency. Trustee may appoint an independent accounting or
consulting firm to make any determination required by Trustee under this
Section 3, in which event Trustee may conclusively rely upon the determination
by such firm and shall be responsible only for the prudent selection of the
firm.

(3) If at any time Trustee has determined that Company or a Subsidiary is
Insolvent, Trustee shall discontinue payments to all Plan participants and their
beneficiaries (if Company is Insolvent) or Plan participants who were ever
employed by such Subsidiary (if such Subsidiary is Insolvent), and shall hold
the assets of the Trust for the benefit of Company’s or such Subsidiary’s
general creditors. Nothing in this Trust Agreement shall in any way diminish any
rights of Plan participants or their beneficiaries to pursue their rights as
general creditors of Company with respect to benefits due under the Plan or
otherwise. Company shall be responsible for furnishing Trustee with current
information regarding identities of Subsidiaries and participants who were ever
employed by each such Subsidiary.

(4) Trustee shall resume the payment of benefits to Plan participants or their
beneficiaries in accordance with Section 2 of this Trust Agreement only after
Trustee has determined that Company, or a Subsidiary as the case may be, is not
Insolvent (or is no longer Insolvent).

(c) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by Company in lieu of the payments provided
for hereunder during any such period of discontinuance, all in accordance with
the Payment Schedule, which shall be modified by Company as necessary to comply
with the provisions of this paragraph (c).

 

2

--------------------------------------------------------------------------------

SECTION 4. Payments to Company.

Except as provided in Section 3 hereof, after the Trust has become irrevocable,
Company shall have no right or power to direct Trustee to return to Company or
to divert to others any of the Trust assets before all payment of benefits have
been made to Plan participants and their beneficiaries pursuant to the terms of
the Plan.

SECTION 5. Investment Authority.

(a) Selection of Investment Options. The Trustee shall have no responsibility
for the selection of investment options under the Trust and shall not render
investment advice to any person in connection with the selection of such
options.

(b) Available Investment Options. The Company shall direct the Trustee as to
what investment options the Trust shall be invested in (i) during the period
beginning on the initial transfer of assets to the Trust and ending on the
completion of the reconciliation of Trust records (the “reconciliation period”),
and (ii) following the reconciliation period, subject to the following
limitations. The Company may determine to offer as investment options only
(i) publicly-traded common stock issued by the Company (“Company Stock”)”, and
(ii) securities issued by the investment companies advised by Fidelity
Management & Research Company and certain investment companies not advised by
Fidelity Management & Research Company identified collectively as Mutual Funds
on Schedule “A” attached hereto; provided, however, that the Trustee shall not
be considered a fiduciary with investment discretion. The Company may add or
remove investment options with the consent of the Trustee (which shall not be
unreasonably withheld) and upon mutual amendment of this Trust Agreement and the
Schedules thereto to reflect such additions.

(c) Investment Directions. The Company shall direct the Trustee as to the
investment of Trust assets. In order to provide for an accumulation of assets
comparable to the contractual liabilities accruing under the Plan, the Company
may direct the Trustee in writing to invest the assets held in the Trust to
correspond to the hypothetical investments made for Participants under the Plan.
Such directions may be made by Plan participants by use of the telephone
exchange system, the internet or such other electronic means as may be agreed
upon from time to time by the Company and the Trustee, maintained for such
purposes by the Trustee or its agents, in accordance with written Exchange
Guidelines attached hereto as Schedule “E”. In the event that the Trustee fails
to receive a proper direction from the Company or from Participants, the assets
in question shall be invested in Fidelity Retirement Money Market Portfolio
until the Trustee receives a proper direction.

The Company’s designation of available investment options under paragraphs
(a) and (b) above, the maintenance of accounts for each Plan participant and the
crediting of hypothetical shares of Company Stock or other investments to such
accounts, the giving of investment directions by participants under this
paragraph (c), and the exercise by participants of any other powers relating to
investments under this Section 4 are solely for the purpose of providing a
mechanism for measuring the obligation of the Company to any particular
participant under the applicable Plan. As provided in Section 1(d) above, no
participant or beneficiary will have any preferential claim to or beneficial
ownership interest in any asset or investment of the Trust, and the rights of
any participant and his or her beneficiaries under the applicable Plan and the
Trust are solely those of an unsecured general creditor of the Company with
respect to the benefits of the participant under the Plan.

(d) Mutual Funds. The Company hereby acknowledges that it has received from the
Trustee a copy of the prospectus for each Mutual Fund selected by the Company as
a Plan investment option. Trust investments in Mutual Funds shall be subject to
the following limitations:

(i) Execution of Purchases and Sales. Purchases and sales of Mutual Funds (other
than for Exchanges) shall be made on the date on which the Trustee receives from
the Company in good order all information and documentation necessary to
accurately effect such purchases and sales (or in the case of a purchase, the
subsequent date on which the Trustee has received a wire transfer of funds
necessary to make such purchase). Transactions involving Mutual Funds not
advised by Fidelity Management & Research Company shall be executed in
accordance with the operating procedures set forth in Schedule “D” attached
hereto. Exchanges of Fidelity Mutual Funds shall be made on the same business
day that the Trustee receives a proper direction if received before market close
(generally 4:00 p.m. eastern time); if the direction is received after market
close (generally 4:00 p.m. eastern time), the exchange shall be made the
following day.

(ii) Voting. At the time of mailing of notice of each annual or special
stockholders’ meeting of any Mutual Fund, the Trustee shall send a copy of the
notice and all proxy solicitation materials to the Company, together with a
voting direction form for return to the Trustee or its designee. The Trustee
shall vote the shares held in the Trust in the same manner as directed by the
Company. The Trustee shall not vote shares for which it has received no
corresponding directions from the Company. With respect to all rights other than
the right to vote, the Trustee shall follow the directions of the Company.

 

3

--------------------------------------------------------------------------------

(e) Company Stock. Trust investments in Company Stock shall be subject to the
following limitations:

(i) Acquisition Limit. The Trust may be invested in Company Stock to the extent
directed by the Company. The Company shall have the responsibility to determine
and monitor the suitability of Company Stock as an investment medium under the
Trust.

(ii) Acquisition of Company Stock. The Company shall continually monitor the
suitability of acquiring and holding Company Stock. The Trustee shall not be
liable for any loss, or expense, which arises from the directions of the Company
with respect to the acquisition and holding of Company Stock, unless it is clear
on their face that the actions to be taken under those directions would be
prohibited by any applicable law or would be contrary to the terms of this
Agreement.

(iii) Execution of Purchases and Sales.

(A) Purchases and sales of Company Stock (other than for exchanges) shall be
made on the open market on the date on which the Trustee receives from the
Company in good order all information, documentation, and wire transfer of funds
(if applicable), necessary to accurately effect such transactions. Exchanges of
Company Stock shall be made in accordance with the Exchange Guidelines attached
hereto as Schedule “E”. Such general rules shall not apply in the following
circumstances:

(1) If the Trustee is unable to purchase or sell the total number of shares
required to be purchased or sold on such day as a result of market conditions;
or

(2) If the Trustee is prohibited by the Securities and Exchange Commission, the
New York Stock Exchange, or any other regulatory body from purchasing or selling
any or all of the shares required to be purchased or sold on such day.

In the event of the occurrence of the circumstances described in (1) or
(2) above, the Trustee shall purchase or sell such shares as soon as possible
thereafter and shall determine the price of such purchases or sales to be the
average purchase or sales price of all such shares purchased or sold,
respectively. The Trustee may follow directions from the Company to deviate from
the above purchase and sale procedures provided that such direction is made in
writing by the Company.

(B) Purchases and Sales from or to Company. If directed by the Company in
writing prior to the trading date, the Trustee may purchase or sell Company
Stock from or to the Company if the purchase or sale is for adequate
consideration and no commission is charged.

(C) Use of an Affiliated Broker. The Company hereby directs the Trustee to use
Fidelity Capital Markets (“Capital Markets”) to provide brokerage services in
connection with any purchase or sale of Company Stock. Capital Markets shall
execute such directions directly or through its affiliate, National Financial
Services Company (“NFSC”). The provision of brokerage services shall be subject
to the following:

(1) As consideration for such brokerage services, the Company agrees that
Capital Markets shall be entitled to remuneration under this authorization
provision in the amount of five cents ($.05) commission on each share of Company
Stock up to 10,000 shares in a singular transaction, four cents ($.04)
commission on each share of Company Stock from 10,001 to 19,999 shares in a
singular transaction, and three and four-tenth cents ($.034) commission on each
share of Company Stock in excess of 19,999 shares in a singular transaction. Any
increase in such remuneration may be made only by a signed agreement between
Company and Trustee.

(2) The Trustee will provide the Company with the following: a description of
Capital Markets’ brokerage placement practices and a form by which the Company
may terminate this direction to use a broker affiliated with the Trustee. The
Trustee will provide the Company with this termination form annually, as well as
quarterly and annual reports which summarize all securities transaction-related
charges incurred by the Plan.

(3) Any successor organization of Capital Markets, through reorganization,
consolidation, merger or similar transactions, shall, upon consummation of such
transaction, become the successor broker in accordance with the terms of this
authorization provision.

 

4

--------------------------------------------------------------------------------

(4) The Trustee and Capital Markets shall continue to rely on this direction
provision until notified to the contrary. The Company reserves the right to
terminate this direction upon written notice to Capital Markets (or its
successor) and the Trustee.

(iv) Securities Law Reports. The Company shall be responsible for filing all
reports required under Federal or state securities laws with respect to the
Trust’s ownership of Company Stock, including, without limitation, any reports
required under section 13 or 16 of the Securities Exchange Act of 1934, and
shall immediately notify the Trustee in writing of any requirement to stop
purchases or sales of Company Stock pending the filing of any report. The
Company shall be responsible for the registration of any Plan interests to the
extent required under Federal or state securities law. The Trustee shall provide
to the Company such information on the Trust’s ownership of Company Stock as the
Company may reasonably request in order to comply with Federal or state
securities laws.

(v) Voting and Tender Offers. Notwithstanding any other provision of this
Agreement the provisions of this Section shall govern the voting and tendering
of Company Stock. The Company shall pay for all printing, mailing, tabulation
and other costs associated with the voting and tendering of Company Stock. The
Trustee, after consultation with the Company, shall prepare the necessary
documents associated with the voting and tendering of Company Stock.

(A) Voting. When the issuer of Company Stock prepares for any annual or special
meeting, the Company shall notify the Trustee at least thirty (30) days in
advance of the intended record date and shall cause a copy of all proxy
solicitation materials to be sent to the Trustee. The Trustee shall prepare a
voting instruction form and shall provide a copy to the Company, to be returned
to the Trustee or its designee. Upon its receipt of the directions, the Trustee
shall vote the shares of Company Stock as directed by the Company. Except as
otherwise required by law, the Trustee shall not vote shares of Company Stock
for which it has received no directions from the Company.

(B) Tender Offers. Upon commencement of a tender offer for any securities held
in the Trust that are Company Stock, the Company shall timely notify the Trustee
in advance of the intended tender date and shall cause a copy of all materials
to be sent to the Trustee. The Trustee shall prepare a tender instruction form
and shall provide a copy to the Company, to be returned to the Trustee or its
designee. Upon receipt of directions, the Trustee shall tender or not tender
shares of Company Stock as directed by the Company. Except as otherwise required
by law, the Trustee shall not tender shares of Company Stock for which it has
received no directions from the Company. Pending receipt of directions from the
Company as to which of the remaining investment options the proceeds should be
invested in, the Trustee shall invest the proceeds in Fidelity Retirement Money
Market Portfolio.

(vi) General. With respect to all rights other than the right to vote, the right
to tender, and the right to withdraw shares previously tendered, in the case of
Company Stock credited to a participant’s accounts, the Trustee shall follow the
directions of the Company.

(vii) Conversion. All provisions in this Section 5(e) shall also apply to any
securities received as a result of a conversion of Company Stock.

SECTION 6. Disposition of Income.

(a) During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.

SECTION 7. Accounting by Trustee.

(a) Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee. Within 30 days following the close of each calendar year
and within 60 days after the removal or resignation of Trustee, Trustee shall
deliver to Company a written account of its administration of the Trust during
such year or during the period from the close of the last preceding year to the
date of such removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a description of
all securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or receivable being shown
separately), and showing all cash, securities and other property held in the
Trust at the end of such year or as of the date of such removal or resignation,
as the case may be.

 

5

--------------------------------------------------------------------------------

SECTION 8. Responsibility of Trustee.

(a) Trustee shall act with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims, provided, however, that Trustee shall incur no
liability to any person for any action taken pursuant to a direction, request,
or approval given by Company which is contemplated by, and in conformity with,
the terms of this Trust and is given in writing by Company. In the event of a
dispute between Company and a party, Trustee may apply to a court of competent
jurisdiction to resolve the dispute.

(b) Trustee may consult with legal counsel (who may also be counsel for Company
generally) with respect to any of its duties or obligations hereunder.

(c) Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist it in performing any of
its duties or obligations hereunder.

(d) Trustee shall have, without exclusion, all powers conferred on trustees by
applicable law, unless expressly provided otherwise herein, provided, however,
that if an insurance policy is held as an asset of the Trust, Trustee shall have
no power to name a beneficiary of the policy other than the Trust, to assign the
policy (as distinct from conversion of the policy to a different form) other
than to a successor Trustee, or to loan to any person the proceeds of any
borrowing against such policy and shall act with respect to any such policy only
as directed by Company.

(e) However, notwithstanding the provisions of Section 8(d) above, Trustee may
loan to Company the proceeds of any borrowing against an insurance policy held
as an asset of the Trust.

(f) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that could give
this Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.

(g) The Trustee may rely without question on directions received from the
Company as set forth in Schedule “C”.

SECTION 9. Compensation and Expenses of Trustee.

Company shall pay all administrative and Trustee’s fees and expenses. If not so
paid, the fees and expenses shall be paid from the Trust. Fees payable to the
Trustee shall be set forth in Schedule “B”.

SECTION 10. Resignation and Removal of Trustee.

(a) Trustee may resign at any time by written notice to Company, which shall be
effective not less than 180 days after receipt of such notice unless Company and
Trustee agree otherwise.

(b) Trustee may be removed by Company on not less than 180 days notice or upon
shorter notice accepted by Trustee.

(c) If Trustee resigns or is removed within two years after a Change of Control,
as defined herein, Company shall apply to a court of competent jurisdiction for
the appointment of a successor trustee or for instructions.

(d) Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor Trustee.
The transfer shall be completed within 60 days after receipt of notice of
resignation, removal or transfer, unless Company extends the time limit.

(e) If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraphs (a) or (b) of this section. If no such appointment has
been made, Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.

Section 11. Appointment of Successor.

(a) If Trustee resigns or is removed in accordance with Section 10(a) or
(b) hereof, Company may appoint any third party, such as a bank trust department
or other party that may be granted corporate trustee powers under state law, as
a successor to replace Trustee upon resignation or removal. The appointment
shall be effective when accepted in writing by the new Trustee, who shall have
all of the rights and powers of the former Trustee, including ownership rights
in the Trust assets. The former Trustee shall execute any instrument necessary
or reasonably requested by Company or the successor Trustee to evidence the
transfer.

 

6

--------------------------------------------------------------------------------

(b) If Trustee resigns or is removed pursuant to the provisions of Section 10(c)
hereof and a court of competent jurisdiction appoints a successor Trustee, the
appointment shall be effective when accepted in writing by the new Trustee. The
new Trustee shall have all the rights and powers of the former Trustee,
including ownership rights in Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by the successor Trustee to
evidence the transfer.

(c) The successor Trustee need not examine the records and acts of any prior
Trustee and may retain or dispose of existing Trust assets, subject to Sections
7 and 8 hereof. The successor Trustee shall not be responsible for and Company
shall indemnify and defend the successor Trustee from any claims or liability
resulting from any action or inaction of any prior Trustee or from any other
past event, or any condition existing at the time it becomes successor Trustee.

SECTION 12. Amendment or Termination.

(a) This Trust Agreement may be amended by a written instrument executed by
Trustee and Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan or shall make the Trust revocable after it
has become irrevocable in accordance with Section 1(b) hereof. Company shall be
solely responsible for determining whether an amendment conflicts with the terms
of the Plan.

(b) The Trust shall not terminate until the date on which Plan participants and
their beneficiaries are no longer entitled to benefits pursuant to the terms of
the Plan. Upon termination of the Trust any assets remaining in the Trust shall
be returned to Company pursuant to certification of Company to Trustee that the
conditions for termination of the Trust have been met.

(c) Upon written approval of participants or beneficiaries entitled to payment
of benefits pursuant to the terms of the Plan, Company may terminate this Trust
prior to the time all benefit payments under the Plan have been made. All assets
in the Trust at termination shall be returned to Company.

SECTION 13. Miscellaneous.

(a) Any provision of this Trust Agreement prohibited by law shall be ineffective
to the extent of any such prohibition, without invalidating the remaining
provisions hereof.

(b) Benefits payable to Plan participants and their beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.

(c) This Trust Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.

(d) For purposes of this Trust, Change of Control shall mean a “Change in
Control” or “Potential Change in Control” within the meaning of The Progressive
Corporation 1995 Incentive Plan. Company shall notify Trustee promptly of any
Change of Control and Trustee shall have no responsibility to independently
determine whether a Change of Control has occurred.

(e) Company shall indemnify Trustee against, and hold Trustee harmless from, any
and all loss, damage, penalty, liability, cost, expense and reasonable
attorney’s fees and disbursements, that may be incurred by, imposed upon or
asserted against Trustee by reason of any claim, regulatory proceeding or
litigation arising from any act done or omitted to be done by any individual or
person with respect to the Plan or Trust, excepting only any and all loss,
damage, penalty, liability, cost, expense and reasonable attorney’s fees and
disbursements, to the extent arising from Trustee’s negligence in performing or
failing to perform any of the duties specifically allocated to the Trustee under
the terms of this Agreement or from the Trustee’s willful misconduct or bad
faith. Trustee agrees to indemnify and hold Company harmless from and against
any and all loss, damage, penalty, liability, cost, expense and reasonable
attorney’s fees and disbursements incurred by, imposed upon or asserted against
Company by reason of any claim, regulatory proceeding or litigation to the
extent arising from the Trustee’s negligence in performing or failing to perform
any of the duties specifically allocated to the Trustee under the terms of this
Agreement or from the Trustee’s willful misconduct or bad faith.

 

7

--------------------------------------------------------------------------------

SECTION 14. Transferred Assets; Administration of Transferred Assets; Powers and
Duties of Trustee.

(a) There will, from time to time, subsequent to December 1, 2000, be delivered
to the Trustee cash proceeds (“Midland Assets”) previously held pursuant to the
Midland Companies’ Amended and Restated Director and Executive Cash or Deferred
Compensation Plan (“Midland Plan”). All such Midland Assets shall be held,
administered and disbursed by the Trustee as part of the Trust, pursuant to the
provisions of this Agreement, as in effect from time to time subsequent to
December 1, 2000.

(b) The Trustee will have no duty to verify whether the amount of any such
Midland Assets delivered to it is correct, and shall have no duty of inquiry
into the prior administration of the Midland Plan or funding for the Midland
Plan.

(c) Such Midland Assets shall be invested in accordance with the provisions of
Section 5.

IN WITNESS WHEREOF, Company and Trustee have hereunto caused this Trust
Agreement to be executed by their duly authorized representatives as of the date
set forth above.

 

THE PROGRESSIVE CORPORATION     FIDELITY MANAGEMENT TRUST COMPANY By:   /s/
Stephen D. Peterson     By:   /s/ Carolyn Redden Title:   Treasurer     Title:  
Vice President Date:   November 7, 2002     Date:   November 8, 2002

 

8

--------------------------------------------------------------------------------

SCHEDULE “A”

RECORDKEEPING AND ADMINISTRATIVE SERVICES

 

* The Trustee will provide only the recordkeeping and administrative services
set forth on this Schedule “A” and no others.

Administration

 

  •  

Establishment and maintenance of participant account and election percentages.

 

  * Maintenance of the following money classifications:

1995 Gainshare

1996 Gainshare

1997 Gainshare

1998 Gainshare

1999 Gainshare

Midland

Deferred to Age 43

Deferred to Age 47

Deferred to Age 51

Deferred to Age 55

Deferred to Age 59

Deferred til term

 

  * Maintenance of the following plan investment options:

Fidelity Retirement Money Market Portfolio

Oakmark Equity & Income Fund

Vanguard Institutional Index Fund

Washington Mutual Investors Fund - Class A

Fidelity Dividend Growth Fund

Fidelity Mid-Cap Stock Fund

Wasatch Small Cap Growth Fund

Fidelity Diversified International Fund

FMA Small Company Portfolio - Institutional Class

Janus Worldwide Fund

PIMCO Total Return Fund (Admin)

The Progressive Corporation Stock Fund

Processing

 

* Processing of mutual fund trades and employer stock.

 

* Maintain and process changes to participants’ prospective investment mix
elections.

 

* Process exchanges between investment options on a daily basis.

 

* Provide as requested processing of payroll contribution data via plan Sponsor
Workstation.

 

* Provide as requested reconciliation and processing of participant withdrawal
requests as approved and directed by the Company. All withdrawal requests will
be based on the current market values of the participants’ accounts, not
advances or estimated values. The “current market value” of a participant’s
account shall be the account value on the business day that direction is
received from the Company in good order by the Trustee, if such direction is
received before 4:00 p.m. (E.T.). If direction from the Company is received by
the Trustee after 4:00 p.m. (E.T.) on a business day, then the current market
value of a participant’s account shall be the account value on the next business
day.

 

9

--------------------------------------------------------------------------------

Other

 

* Prepare, reconcile and deliver a monthly Trial Balance Report presenting all
money classes and investments. This report is based on the market value as of
the last business day of the month. The report will be delivered not later than
thirty (30) days after the end of each month in the absence of unusual
circumstances.

 

* Prepare, reconcile and deliver a Quarterly Administrative Report presenting
both on a participant and a total plan basis all money classes, investment
positions and a summary of all activity of the participant and plan as of the
last business day of the quarter. The report will be delivered not later than
thirty (30) days after the end of each quarter in the absence of unusual
circumstances.

 

* Prepare and distribute, either to the Company or to each plan participant
directly, a quarterly detailed participant statement reflecting all activity for
the period. Statements will be delivered not later than thirty (30) days after
each quarter in the absence of unusual circumstances.

 

* Provide monthly trial balance

 

* Prepare and mail to the participant, a confirmation of the transactions
exchanges and changes to investment mix elections within five (5) business days
of the participants instructions.

 

* Provide access to Plan Company Webstation (PSW). PSW is a graphical,
Windows-based application that provides current plan and participant-level
information, including indicative data, account balances, activity and history.

 

* Provide Mutual Fund tax reporting (Forms 1099 Div. And 1099-B) to the Company.

 

* Provide necessary account information to the Company for issuance of
participant checks and tax reporting.

 

* Prepare employee communications describing available investment options,
including multimedia informational materials and group presentations.

COMMUNICATION SERVICES.

 

* PROVIDE EMPLOYEE COMMUNICATIONS DESCRIBING AVAILABLE INVESTMENT OPTIONS,
INCLUDING MULTIMEDIA INFORMATIONAL MATERIALS AND GROUP PRESENTATIONS.

 

* FIDELITY PORTFOLIOPLANNER (SM), AN INTERNET-BASED EDUCATIONAL SERVICE FOR
PARTICIPANTS THAT GENERATES TARGET ASSET ALLOCATIONS AND RECOMMENDED MODEL
PORTFOLIOS CUSTOMIZED TO INVESTMENT OPTIONS IN THE PLAN(s) BASED UPON
METHODOLOGY PROVIDED BY STRATEGIC ADVISERS, INC., AN AFFILIATE OF THE TRUSTEE.
THE COMPANY ACKNOWLEDGES THAT IT HAS RECEIVED THE ADV PART II FOR STRATEGIC
ADVISERS, INC. MORE THAN 48 HOURS PRIOR TO EXECUTING THE TRUST.

 

ADMINISTRATOR     FIDELITY MANAGEMENT TRUST COMPANY By:   /s/ Stephen D.
Peterson     By:   /s/ Carolyn Redden Title:   Treasurer     Title:   Vice
President Date:   November 7, 2002     Date:   November 8, 2002

 

10

--------------------------------------------------------------------------------

SCHEDULE “B”

FEE SCHEDULE

 

* ANNUAL RECORDKEEPING FEE $10,000.00 PER YEAR BILLED AND PAYABLE ON A QUARTERLY
BASIS.

 

  •  

This fee will be imposed for each calendar quarter, or any part thereof, that it
remains necessary to maintain a participant’s account(s) as part of the Plan’s
records, e.g., vested, deferred, forfeiture, and terminated participants who
must remain on file through calendar year-end for reporting purposes.

 

* NON-FIDELITY MUTUAL FUNDS NON-FIDELITY MUTUAL FUND VENDORS SHALL PAY SERVICE
FEES DIRECTLY TO FIDELITY MANAGEMENT TRUST COMPANY EQUAL TO A PERCENTAGE
(GENERALLY 25 OR 35 BASIS POINTS) OF PLAN ASSETS INVESTED IN SUCH NON-FIDELITY
MUTUAL FUNDS.

PLAN COMPANY WEBSTATION (PSW): TWO USER I.D.’S PROVIDED FREE OF CHARGE.

 

* TRUSTEE FEES 0.10% PER YEAR OF TRUST ASSETS INVESTED IN COMPANY STOCK PAYABLE
PRO RATA QUARTERLY ON THE BASIS OF SUCH ASSETS AS OF THE CALENDAR QUARTER’S LAST
VALUATION DATE, BUT NO LESS THAN $5,000.00 NOR MORE THAN $35,000.00 PER YEAR.

Other Fees: Separate charges for extraordinary expenses resulting from large
numbers of simultaneous manual transactions, from errors not caused by Fidelity,
reports not contemplated in this Agreement, corporate actions, or the provision
of communications materials in hard copy which are also accessible to
participants via electronic services in the event that the provision of such
material in hard copy would result in an additional expense deemed to be
material.

 

ADMINISTRATOR     FIDELITY MANAGEMENT TRUST COMPANY By:   /s/ Stephen D.
Peterson     By:   /s/ Carolyn Redden Title:   Treasurer     Title:   Vice
President Date:   November 7, 2002     Date:   November 8, 2002

 

11

--------------------------------------------------------------------------------

SCHEDULE “C”

[Progressive Logo]

Ms. Carolyn Redden

Fidelity Investments Institutional Operations Company

82 Devonshire Street, MM3H

Boston, Massachusetts 02109

The Progressive Corporation Executive

Deferred Compensation Plan

*** NOTE: THIS SCHEDULE SHOULD CONTAIN NAMES AND SIGNATURES FOR ALL INDIVIDUALS
WHO WILL BE PROVIDING DIRECTIONS TO FIDELITY REPRESENTATIVES IN CONNECTION WITH
THE PLAN.

FIDELITY REPRESENTATIVES WILL BE UNABLE TO ACCEPT DIRECTIONS FROM ANY INDIVIDUAL
WHOSE NAME DOES NOT APPEAR ON THIS SCHEDULE.***

Dear Ms. Redden:

This letter is sent to you in accordance with Section 8(g) of the Trust
Agreement, dated as of November 8, 2002, between [name of Company] and Fidelity
Management Trust Company. [I or We] hereby designate [name of individual], [name
of individual], and [name of individual], as the individuals who may provide
directions upon which Fidelity Management Trust Company shall be fully protected
in relying. Only one such individual need provide any direction. The signature
of each designated individual is set forth below and certified to be such.

You may rely upon each designation and certification set forth in this letter
until [I or we] deliver to you written notice of the termination of authority of
a designated individual.

 

Very truly yours,

 

The Progressive Corporation

By:   /s/ Stephen D. Peterson Title:   Treasurer Date:   November 7, 2002

 

 

/s/ Diane Hanowitz /s/ Diane Morrissey /s/ Francesca Scafidi

 

12

--------------------------------------------------------------------------------

SCHEDULE “D”

OPERATIONAL GUIDELINES FOR NON-FIDELITY MUTUAL FUNDS

Pricing

By 7:00 p.m. Eastern Time (“ET) each Business Day, the Non-Fidelity Mutual Fund
Vendor (Fund Vendor) will input the following information (“Price Information”)
into the Fidelity Participant Recordkeeping System (“FPRS”) via the remote
access price screen that Fidelity Investment Institutional Operations Company,
Inc. (“FIIOC”), an affiliate of the Trustee, has provided to the Fund Vendor:
(1) the net asset value for each Fund at the Close of Trading, (2) the change in
each Fund’s net asset value from the Close of Trading on the prior Business Day,
and (3) in the case of an income fund or funds, the daily accrual for interest
rate factor (“mil rate”). FIIOC must receive Price Information each Business Day
(a “Business Day” is any day the New York Stock Exchange is open). If on any
Business Day the Fund Vendor does not provide such Price Information to FIIOC,
FIIOC shall pend all associated transaction activity in the Fidelity Participant
Recordkeeping System (“FPRS”) until the relevant Price Information is made
available by Fund Vendor.

Trade Activity and Wire Transfers

By 7:00 a.m. ET each Business Day following Trade Date (“Trade Date Plus One”),
FIIOC will provide, via facsimile, to the Fund Vendor a consolidated report of
net purchase or net redemption activity that occurred in each of the Funds up to
4:00 p.m. ET on the prior Business Day. The report will reflect the dollar
amount of assets and shares to be invested or withdrawn for each Fund. FIIOC
will transmit this report to the Fund Vendor each Business Day, regardless of
processing activity. In the event that data contained in the 7:00 a.m. ET
facsimile transmission represents estimated trade activity, FIIOC shall provide
a final facsimile to the Fund Vendor by no later than 9:00 a.m. ET. Any
resulting adjustments shall be processed by the Fund Vendor at the net asset
value for the prior Business Day.

The Fund Vendor shall send via regular mail to FIIOC transaction confirms for
all daily activity in each of the Funds. The Fund Vendor shall also send via
regular mail to FIIOC, but no later than the fifth Business Day following
calendar month close, a monthly statement for each Fund. FIIOC agrees to notify
the Fund Vendor of any balance discrepancies within twenty (20) Business Days of
receipt of the monthly statement.

For purposes of wire transfers, FIIOC shall transmit a daily wire for aggregate
purchase activity and the Fund Vendor shall transmit a daily wire for aggregate
redemption activity, in each case including all activity across all Funds
occurring on the same day.

Prospectus Delivery

FIIOC shall be responsible for the timely delivery of Fund prospectuses and
periodic Fund reports (“Required Materials”) to Plan participants, and shall
retain the services of a third-party vendor to handle such mailings. The Fund
Vendor shall be responsible for all materials and production costs, and hereby
agrees to provide the Required Materials to the third-party vendor selected by
FIIOC. The Fund Vendor shall bear the costs of mailing annual Fund reports to
Plan participants. FIIOC shall bear the costs of mailing prospectuses to Plan
participants.

Proxies

The Fund Vendor shall be responsible for all costs associated with the
production of proxy materials. FIIOC shall retain the services of a third-party
vendor to handle proxy solicitation mailings and vote tabulation. Expenses
associated with such services shall be billed directly to the Fund Vendor by the
third-party vendor.

Participant Communications

The Fund Vendor shall provide internally prepared fund descriptive information
approved by the Funds’ legal counsel for use by FIIOC in its written participant
communication materials. FIIOC shall utilize historical performance data
obtained from third-party vendors (currently Morningstar, Inc., FACTSET Research
Systems and Lipper Analytical Services) in telephone conversations with plan
participants and in quarterly participant statements, which shall be electronic
except for year-end paper reports. The Company hereby consents to FIIOC’s use of
such materials and acknowledges that FIIOC is not responsible for the accuracy
of third-party information. FIIOC shall seek the approval of the Fund Vendor
prior to retaining any other third-party vendor to render such data or materials
under this Agreement.

 

13

--------------------------------------------------------------------------------

Compensation

FIIOC shall be entitled to fees as set forth in a separate agreement with the
Fund Vendor.

Indemnification

The Fund Vendor shall be responsible for compensating participants and/or FIIOC
in the event that losses occur as a result of (1) the Fund Vendor’s failure to
provide FIIOC with Price Information or (2) providing FIIOC with incorrect Price
Information.

 

14

--------------------------------------------------------------------------------

SCHEDULE “E”

EXCHANGE GUIDELINES

The following exchange guidelines are currently employed by Fidelity Investments
Institutional Operations Company, Inc. (FIIOC).

Exchange hours, via a Fidelity Participant service representative, are 8:30 a.m.
(ET) to 8:00 p.m. in the Participant’s time zone in the continental United
States on each business day. A “business day” is any day on which the New York
Stock Exchange (NYSE) is open.

Exchanges via the internet (Netbenefits) may be made virtually 24 hours a day.

Exchanges via Voice Response System (“VRS”) may be made virtually 24 hours a
day.

FIIOC reserves the right to change these exchange guidelines at its discretion.

Note: The NYSE’s normal closing time is 4:00 p.m. (ET); in the event the NYSE
alters its closing time, all references below to 4:00 p.m. (ET) shall mean the
NYSE closing time as altered.

MUTUAL FUNDS

EXCHANGES BETWEEN MUTUAL FUNDS

In accordance with this Agreement, the Sponsor may direct that Participants
contact Fidelity on any day to exchange between mutual funds. If the request is
confirmed before the close of the market (generally, 4:00 p.m. ET) on a business
day, it will receive that day’s trade date. Requests confirmed after the close
of the market on a business day (or on any day other than a business day) will
be processed on a next day basis.

Participants who wish to exchange out of a mutual fund into another mutual fund
may call two times each quarter.

SPONSOR STOCK

 

I. EXCHANGES FROM MUTUAL FUNDS INTO SPONSOR STOCK

Sponsor Stock exchanges are processed on a weekly cycle - Monday through
Thursday. On the day the window closes or next valid trade date, the mutual fund
is sold. The day after the window closes or next valid trade date, the stock is
purchased. The stock purchase is seen in the account two days after the close of
the window (day after trade date). The purchase of the stock is settled
currently (trade date + 3 days).

Participants who wish to exchange out of a mutual fund into Sponsor Stock may
call two times each quarter.

 

II. EXCHANGES FROM SPONSOR STOCK INTO MUTUAL FUNDS

Sponsor Stock exchanges are processed on a weekly cycle - Monday through
Thursday. On the day after the close of the window or next valid trade date, the
stock is sold. During the settlement period (three days), the balance is reduced
by the amount of the trade. After the proceeds of the stock are available (trade
date plus three days), the “in” side of the exchange (mutual funds, in this
case) is purchased currently.

 

The Progressive Corporation     Fidelity Management Trust Company By:   /s/
Stephen D. Peterson     By:   /s/ Carolyn Redden Title:   Treasurer     Title:  
Vice President Date:   November 7, 2002     Date:   November 8, 2002

 

15

--------------------------------------------------------------------------------

[Progressive Logo]

John M. Kimpel, Esq.

Vice President and Pension Counsel

Fidelity Investments

82 Devonshire Street, F7A

Boston, MA 02109

 

  RE: INVESTMENT INSTRUCTIONS FOR RABBI TRUST ASSETS

Dear Mr. Kimpel:

The participants under The Progressive Corporation Executive Deferred
Compensation Plan (“Plan”) have the right to direct the investment of their Plan
account in hypothetical investment options, which are currently based on a
number of registered investment companies advised by Fidelity Management &
Research Company (“Fidelity Mutual Funds”) and certain investment companies not
advised by Fidelity Management & Research Company (“Non-Fidelity Mutual Funds”)
and Sponsor Stock. Fidelity Management Trust Company has agreed pursuant to a
Trust Agreement with The Progressive Corporation dated November 8, 2002 to
receive such participant directions.

The Company hereby directs the Trustee to invest funds contributed to the rabbi
trust in a manner which corresponds directly to elections made by participants
under the plan.

This procedure will remain in effect until a revised instruction letter is
provided by the Company and accepted by the Trustee.

 

Sincerely,

 

The Progressive Corporation

By:   /s/ Stephen D. Peterson Title:   Treasurer Date:   November 7, 2002

 

16