FIRST AMENDMENT TO THE PROGRESSIVE CORPORATION EXECUTIVE SEPARATION ALLOWANCE
PLAN
(2015 Amendment and Restatement)

WHEREAS, The Progressive Corporation (“Company”) currently maintains The
Progressive Corporation Executive Separation Allowance Plan (“Plan”) pursuant to
the 2015 Amendment and Restatement; and

WHEREAS, the Company desires to amend the Plan further;

NOW, THEREFORE, the Plan is hereby amended as follows, effective as
of_____________, 2016:

1.
Section 1.16 of the Plan is hereby amended and restated in its entirety to
provide as follows:

“1.16
“Separation Agreement and General Release” means an agreement and release
substantially in the form attached hereto as Exhibit A, or, in the case of
Eligible Employees residing and working in Australia, Exhibit B.”

2.
The following is hereby added to the Plan as Section 2.5:

“2.5 Each Eligible Employee who is entitled to a separation allowance under the
preceding provisions of this Section shall be entitled to participate in
outplacement benefits at the Company’s expense and in the form and manner made
available by the Company pursuant to the Company’s outplacement benefits program
then in effect, if any, or in any other such form and manner as the Company may
elect. An Eligible Employee’s participation in outplacement benefits shall be
subject to the following restrictions: (a) the receipt of outplacement benefits
during any calendar year shall not affect an Eligible Employee’s right to such
benefits during any other calendar year; and (b) the Company shall not make any
payment for outplacement services after the last day of the second calendar year
following the calendar year in which the Eligible Employee’s Separation Date
occurs. The provisions of this Section 2.5 shall not apply to any Eligible
Employee who resides and works in Australia.”

3.
The following is hereby added to the Plan as new Section 2.6:

“2.6
Notwithstanding anything in this Plan to the contrary, if Progressive sells or
transfers substantially all of a business unit, division, geographic operation,
product or product line, or any combination thereof (a “Disposed Operation”) to
a third party, and if an Eligible Employee who provides services to such
Disposed Operation is offered or accepts any type of employment with such third
party as of or following consummation of such sale or transfer, then such
Eligible Employee shall not be entitled to receive a separation allowance or any
other benefit under this Plan. The provisions of this Section 2.6 shall not
apply to any transaction that constitutes, or that occurs after, a Change in
Control."

4. Section 3.1 of the Plan is hereby amended and restated in its entirety to
provide as follows:

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“3.1
The separation allowance payable to each Eligible Employee who is entitled to
such allowance under Section 2 above shall be equal to the number of weeks of
Compensation set forth in the table below, based on the Eligible Employee’s
Grade Level, Years of Service and other factors specified below as of his/her
Separation Date:

Eligible Employees at Grade Levels 47 through 52

Eligible Employees who reside and work in Australia, who have no assigned Grade
Level and whose Compensation as of their Separation Date is $ AUD $250,000 or
less.
26 weeks of Compensation plus two additional weeks of Compensation for each full
Year of Service in excess of 13 Years of Service, not to exceed an aggregate of
52 weeks of Compensation
Eligible Employees at Grade Levels 53, 54 and 55

Eligible Employees who reside and work in Australia, who have no assigned Grade
Level and whose Compensation as of their Separation Date is more than $AUD
$250.000.
52 weeks of Compensation
(1) The Company’s Chief Executive Officer; (2) Eligible Employees who (i) report
directly to him/her, and (ii) have no assigned Grade Level; and (3) any other
Eligible Employee designated in writing by (i) the Compensation Committee of the
Company’s Board of Directors, if the Eligible Employee is an executive officer,
or (ii) the Company’s Chief Executive Officer and Chief Human Resources Officer,
if the Eligible Employee is not an executive officer.”
Less than one Year of Service: 52 weeks of Compensation

At least one, but less than two, Years of Service: 104 weeks of Compensation

At least two Years of Service: 156 weeks of Compensation

5. Section 3.4 of the Plan is amended and restated in its entirety to provide as
follows:

“3.4
Each Eligible Employee’s separation allowance payable under this Plan shall be
reduced by the amount of any state-mandated separation allowance or severance
payments payable by Progressive to such Eligible Employee (or, in the case of an
Eligible Employee residing and working in Australia, by the amount of any other
payments required by Australian law to be paid with respect to such Eligible
Employee’s termination of employment).”

6. The following is hereby added to the Plan as new Section 3.8:

“3.8
Each separation allowance payment payable under this Plan to an Eligible
Employee residing and working in Australia whose employment is to be terminated
by reason of the redundancy of their position shall be reduced by the amount of
salary or other wages paid by Progressive to such an Eligible Employee in the

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respect of the period of notice of termination provided by Progressive to the
Eligible Employee pursuant to Australian law and/or the Eligible Employee’s
contract of employment.”

7. The following is hereby added to the Plan as new Section 13:

“SECTION 13 - MISCELLANEOUS

“13.1
Payments under this Plan shall be made in the currency of the country where the
recipient of the payment resides at the time of payment based on currency
exchange rates in effect as of a date determined by the Company in its sole
discretion.”

8. The document attached to this Amendment as Exhibit B is hereby added to the
Plan as Exhibit B:

IN WITNESS WHEREOF, The Progressive Corporation has hereunto caused this
Amendment to be executed by its duly authorized representative on the _______
day of _______________, 201__.

                        

THE PROGRESSIVE CORPORATION

By: ___________________________________
Title: __________________________________    

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Exhibit B
 

Progressive Direct Insurance Company

[EMPLOYEE]
 
 
 
 
 
 
 
 
DEED OF RELEASE

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THIS DEED OF RELEASE is made on
    
BETWEEN
PROGRESSIVE DIRECT INSURANCE COMPANY, a company incorporated in the State of
Ohio in the United States of America of 6300 Wilson Mills Road, N72, Mayfield
Village, Ohio 44143, United States of America (Employer);

AND
[Insert] of [Insert] (Employee).

RECITALS
A
The Employee commenced employment with the Employer on [Insert] pursuant to a
Contract of Employment dated [Insert] (Contract).

B
On or around [Insert] the Employer informed the Employee that the Employee’s
position will be made redundant.

C
The Employer provided notice of termination on [Insert] (pursuant to the
Contract) to cover the period from this date to the End Date (Notice Period).
[During this period, the Employee will be on “garden leave” and will not be
required to attend the Employer’s office.]

D
Subject to clause 6 of this Deed, the Employer and the Employee have agreed that
the Employment will terminate at the end of the notice period on [Insert] (End
Date).

E
In addition to the Legal Entitlements, the Employer has agreed to make the
Ex-Gratia Payment in return for the Employee agreeing to provide the release in
clause 3.1.

F
This Deed sets out the terms and conditions relating to the payment of the
Ex-Gratia Payment by the Employer to the Employee in return for providing
releases in favour of the Employer.

IT IS AGREED
1.
Interpretation

      
1.1 Definitions

In this Deed:

Claim includes any action, proceeding, application, arbitration, cause of
action, complaint, cost, debt due, demand, determination, inquiry, judgment or
verdict:

(a)
at law;

(b)
in equity;

(c)
arising under any statute; or

(d)
arising under any award, enterprise agreement or other industrial instrument
made or approved under any law.

Confidential Information means:
(a)
all information marked as confidential or confidential by its nature relating to
the Employer, including information in any form relating to research, trade
secrets, business development and marketing strategy, sales, organisation,
arrangements, business plans, contracts with customers and suppliers, client
lists and financial data, employees and independent contractors; and

(b)
the negotiations of the Parties, the subject matter, terms and conditions and
existence of this Deed.

Contract has the meaning given in Recital A.

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Deed means this Deed and any documents expressly incorporated by reference.
Employment means the Employee’s employment with the Employer.
Employment Claims means any or all present and future Claims relating to or
arising out of the Employment, the Termination, employee entitlements (including
cash, equity and other forms of remuneration) and Employer liabilities arising
out of the Employment (including the Legal Entitlements), except for Claims for
workers’ compensation under applicable workers’ compensation legislation.
End Date has the meaning given in Recital D.
Ex-Gratia Payment means any payment provided under The Progressive Corporation
Executive Separation Allowance Plan [Insert].
Legal Entitlements means all salary, superannuation, expense reimbursements,
redundancy payment (if applicable) and accrued but untaken annual leave up to
the End Date payable pursuant to the Contract and the Fair Work Act 2009 (Cth)
as at the Termination.
Notice Period has the meaning given in Recital C.
Parties means the parties to this Deed and their respective successors and
assigns.
Related Bodies Corporate has the meaning given by section 50 of the Corporations
Act 2001 (Cth).
Termination means the termination of the Employment.
1.2 Construction

Unless expressed to the contrary, in this Deed:

(a)
words in the singular include the plural and vice versa;

(b)
any gender includes the other genders;

(c)
if a word or phrase is defined its other grammatical forms have corresponding
meanings;

(d)
“includes” means includes without limitation;

(e)
no rule of construction will apply to a clause to the disadvantage of a Party
merely because that Party put forward the clause or would otherwise benefit from
it;

(f)
a reference to:

i.a person includes a partnership, joint venture, unincorporated association,
corporation and a government or statutory body or authority;

ii.any legislation or subordinate legislation includes any corresponding later
legislation or subordinate legislation;

iii.a clause is a reference to a clause of this Deed; and

iv.an obligation includes a warranty or representation and a reference to a
failure to comply with an obligation includes a breach of warranty or
representation;

(g) “$” or “dollars” is a reference to Australian currency (AUD); and

(h) time is of the essence.

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2. Employer Obligations

2.1
Legal Entitlements

Subject to any deductions required under clause 0, on or as soon as reasonably
possible after the Termination (currently anticipated to be the End Date), the
Employer will pay the Employee the outstanding Legal Entitlements.

2.2
Ex-Gratia Payment

Subject to:
a)
Employee's execution of this Deed of Release;

b)
clause 0;

c)
the Employee’s ongoing compliance with the obligations clause 4; and

d)
any deductions required under clause 0,

                 
the Employer will pay the Employee the Ex-Gratia Payment within 7 days of the
End Date.

2.3
Tax

The Employee acknowledges and agrees that the Employer will deduct all necessary
taxation from the Legal Entitlements and the Ex-Gratia Payment in accordance
with applicable Australian taxation law.

3. Releases and no proceedings

3.1
Employee Release

In consideration for the Employer’s obligation to pay the Ex-Gratia Payment, the
Employee releases and discharges the Employer and its Related Bodies Corporate
and their respective officers and employees from any and all Employment Claims
to the fullest extent that the same may be released at law.
3.2
No proceedings against the Employer

The Employee will not, and will ensure that no person associated with the
Employee or directed or instructed by the Employee, at any time commences any
Employment Claim against the Employer or any of its Related Bodies Corporate.
4. Employee Obligations

4.1
Non-disparagement

The Employee will not at any time during the Notice Period or after the End Date
make any adverse statement, publicly or otherwise or induce anyone else to make
such a statement, about the Employer.
4.2
Return of company property

The Employee will return and deliver to the Employer, by the End Date, all
tangible and intangible property and documents belonging to the Employer within
their possession or control.
4.3
The Employee agrees to cooperate with the Employer in response to all reasonable
requests related to the Employee's former job duties.     

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5. Warranties
5.1
Employee warranties

The Employee represents and warrants to the Employer that:
(a)
they have read and understood the terms of this Deed;

(b)
the Employer has not made any promise, representation or inducement or been a
party to any conduct material to the Employee entering into this Deed other than
as set out in this Deed; and

(c)
they have not and do not intend to commence any Employment Claim against any
member of the Employer.

5.2
Employer reliance

The Employee acknowledges that the Employer has entered into this Deed in
reliance upon the warranties in clause 0.

6.
Acknowledgments

6.1
Full and final settlement on the End Date

If the Employment comes to an end on the End Date and the Employer pays the
Employee the Legal Entitlements and the Ex-Gratia Payment then the Employee
hereby acknowledges that the Legal Entitlements, Ex-Gratia Payment:
(a)
are paid in full and final satisfaction of the Employer’s obligations to the
Employee for the Employment, the Contract and the Termination, including but not
limited to all payments, benefits and entitlements including any payable to the
Employee under the Contract;

(b)
include all payments and benefits that the Employee is entitled to receive in
connection with the Employment and the Termination at law, in equity, arising
under any statute and arising under any award, enterprise agreement or other
industrial instrument made or approved under any law;

(c)
are paid in full and final settlement of any and all Employment Claims against
the Employer and its Related Bodies Corporate; and

(d)
are received by the Employee in discharge of all contractual, statutory, award,
enterprise agreement or other industrial instrument entitlements including any
entitlements to salary, annual leave, long service leave, notice entitlements,
or payments in lieu of notice, redundancy and severance payments.

6.2
Employee breach

The Employee acknowledges that if the Employee breaches the terms of this Deed
(including by bringing an Employment Claim against the Employer):
(a)
before the End Date, the Employer is not required by this Deed to make the
Ex-Gratia Payment to the Employee; or

(b)
after the End Date (and after the Ex-Gratia Payment has been made by the
Employer), the Employee agrees to repay to the Employer the Ex-Gratia Payment
which will be recoverable by the Employer as a debt.

6.3
Early termination

(a)
The Employee acknowledges that this Deed does not, in any way, limit either
Party’s ability to terminate the Employment before the End Date in accordance
with the Contract.

 

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(b)
For the avoidance of doubt, in such cases of early termination the Employer is
not required by this Deed to make the Ex-Gratia Payment.

7.
Bar to Proceedings

This Deed may be pleaded as a full and complete defence by the Employer and its
Related Bodies Corporate to any Employment Claims commenced by the Employee or
any person associated with or directed or instructed by the Employee.

8.
No admission of liability

The Parties acknowledge and agree that nothing in this Deed constitutes an
admission by the Employer or any of its Related Bodies Corporate of any
liability in respect of any Employment Claims.

9.
Independent legal advice

The Employee acknowledges that before signing this Deed the Employee obtained or
was given the opportunity to obtain independent legal advice as to the meaning
and effect of the Deed.

10.
Confidentiality

10.1
Confidential terms

Subject to clause 0, the Parties to this Deed will not disclose to any other
person or persons whether directly or indirectly:
(a)
the terms or substance of this Deed; or

(b)
any matter relating to the terms or substance of this Deed.

10.2
Non disclosure

Subject to clause 0, each Party will keep the Confidential Information
confidential and not disclose it to any third party.
10.3
Disclosure

It is not a breach of clause 0 for the Parties to disclose the Confidential
Information if that disclosure:
(a)
is required by law;

(b)
is of information publicly available otherwise than as a result of a failure to
observe obligations under this clause 0;

(c)
in the case of the Employee, is to the Employee’s accountant or legal adviser,
the Australian Taxation Office or his immediate family members;

(d)
in the case of the Employer, is to the Employer’s or Related Bodies Corporate's
respective employees or accountants, the Australian Taxation Office or any other
government authorities; or

(e)
is made with the prior written consent of the other Party,

but only to the extent necessary for such limited purpose.
11.
Survival

The Parties agree that the following provisions of the Deed shall continue to
apply to the Parties:

(a)
the release in clause 3;

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(b)
the non-disparagement obligation in clause 4;

(c)
the warranties in clause 0;

(d)
the liability provision in clause 0; and

(e)
the confidentiality provisions in clause 0.

12.
Survival of terms of Contract

The Parties agree and acknowledge that this Deed does not affect the ongoing
operation of the provisions of the Contract which are expressed to survive the
termination of the Employment (including, but not limited to, the provisions
dealing with confidentiality and intellectual property).

13.
General

13.1
Legal costs of this Deed

Each Party will pay its own legal and other costs and expenses of negotiating,
preparing, executing and performing its obligations under this Deed.
13.2
Amendment

This Deed may only be varied or replaced by a deed duly executed by the Parties.
13.3
Waiver and exercise of rights

(a)
A single or partial exercise or waiver by a Party of a right relating to this
Deed does not prevent any other exercise of that right or the exercise of any
other right.

(b)
A Party is not liable for any loss, cost or expense of any other Party caused or
contributed to by the waiver, exercise, attempted exercise, failure to exercise
or delay in the exercise of a right.

13.4
Rights cumulative

Except as expressly stated otherwise in this Deed, the rights of a Party under
this Deed are cumulative and are in addition to any other rights of that Party.
For the avoidance of doubt, the release provided by the Employee in clause 3 of
this Deed extinguishes the Employee’s rights contained within any previous
agreement between the Employee and the Employer (or its Related Bodies
Corporate).
13.5
Consents

Except as expressly stated otherwise in this Deed, a Party may conditionally or
unconditionally give or withhold any consent to be given under this Deed and is
not obliged to give its reasons for doing so.
13.6
Trust

To the extent that the releases contained in clause 3 are expressed to be for
the benefit of any person who has not executed this Deed, the Employer and the
person who has executed this Deed on behalf of the Employer holds such releases
on trust for such persons.
13.7
Further steps

Each Party will promptly do whatever any other Party reasonably requires of it
to give effect to this Deed and to perform its obligations under it.

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13.8
Governing law and jurisdiction

(a)
This Deed is governed by and is to be construed in accordance with the laws
applicable in New South Wales.

(b)
Each Party irrevocably and unconditionally submits to the non‑exclusive
jurisdiction of the courts of New South Wales and any courts which have
jurisdiction to hear appeals from any of those courts and waives any right to
object to any proceedings being brought in those courts.

13.9
Assignment

(a)
A Party will not assign or deal with any right under this Deed without the prior
written consent of the other Parties.

(b)
Any purported dealing in breach of this clause is of no effect.

13.10
Counterparts

This Deed may consist of a number of counterparts and, if so, the counterparts
taken together constitute one Deed.
13.11
Entire understanding

(a)
This Deed contains the entire understanding between the Parties as to its
subject matter.

(b)
All previous negotiations, understandings, representations, warranties,
memoranda or commitments concerning the subject matter of this Deed are merged
in and superseded by this Deed and are of no effect and no Party is liable to
any other Party in respect of those matters.

(c)
No oral explanation or information provided by any Party to another:

(i)
affects the meaning or interpretation of this Deed; or

(ii)
constitutes any collateral agreement, warranty or understanding between any of
the Parties.

EXECUTED in Melbourne, Victoria as a Deed.

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EXECUTED in accordance with section 127 of the Corporations Act 2001 (Cth) by
Progressive Direct Insurance Company:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

PROGRESSIVE DIRECT INSURANCE COMPANY

BY:_______________________________________

__________________________________________
PRINTED NAME

TITLE: ____________________________________

DATE: ____________________________________

EMPLOYEE

__________________________________________
SIGNATURE

__________________________________________
DATE