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                                                                    Exhibit 4(a)

                           THE PROGRESSIVE CORPORATION

                               2003 INCENTIVE PLAN



SECTION 1.  ESTABLISHMENT; PURPOSE; DEFINITIONS.

          (a) The Progressive Corporation, an Ohio corporation (the "Company"),
hereby establishes an incentive compensation plan for key employees, to be known
as "The Progressive Corporation 2003 Incentive Plan" (the "Plan"), as set forth
in this document. The Plan permits the grant of Restricted Stock and Stock
Options to key employees of the Company and its Subsidiaries and Affiliates.

          (b) The purpose of the Plan is to enable the Company to attract,
retain and reward key employees of the Company and its Subsidiaries and
Affiliates and strengthen the mutuality of interests between such key employees
and the Company's shareholders by offering such key employees equity or
equity-based incentives.

          (c) For purposes of the Plan, the following terms shall have the
meanings set forth below:

          "Affiliate" means any entity (other than the Company and its
     Subsidiaries) that is designated by the Board as a participating employer
     under the Plan.

          "Award" means any award of Restricted Stock or Stock Options under the
     Plan.

          "Award Agreement" means an agreement setting forth the terms and
     conditions applicable to an Award granted to a Participant under the Plan.

          "Board" means the Board of Directors of the Company.

          "Book Value" means, as of any given date, on a per share basis (1) the
     shareholders' equity in the Company as of the end of the immediately
     preceding fiscal year as reflected in the Company's audited consolidated
     balance sheet as of such year-end date, subject to such adjustments as the
     Committee shall specify at or after grant, divided by (2) the number of
     outstanding shares of Stock as of such year-end date, subject to such
     adjustments as the Committee shall specify for events subsequent to such
     year-end date.

          "Change in Control" has the meaning assigned to it in Section 7(b).

          "Change in Control Price" has the meaning assigned to it in Section
     7(d).

          "Code" means the Internal Revenue Code of 1986, as amended from time
     to time, and any successor thereto.

          "Committee" means the Compensation Committee of the Board.

          "Company" means The Progressive Corporation, an Ohio corporation, or
     any successor corporation.


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          "Disability" means a mental or physical condition which, in the
     opinion of the Committee, renders a Participant unable or incompetent to
     carry out the job responsibilities held by such Participant or the duties
     assigned to such Participant at the time such condition arose or was
     incurred, and which is expected to be permanent or for an indefinite
     duration.

          "Eligible Persons" has the meaning assigned to it in Section 4.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Expiration Date" means the date upon which an Award, or any portion
     thereof, is scheduled to expire or terminate if not exercised or vested
     prior thereto, as determined by the Committee.

          "Fair Market Value" means, as of any given date, the mean between the
     highest and lowest quoted selling price of the Stock on such date on the
     New York Stock Exchange or, if no such sale of the Stock occurs on the New
     York Stock Exchange on such date, then such mean price on the next
     preceding day on which the Stock was traded. If the Stock is no longer
     traded on the New York Stock Exchange, then the Fair Market Value of the
     Stock shall be determined by the Committee in good faith.

          "Family Member" means a Participant's child, stepchild, grandchild,
     parent, stepparent, grandparent, spouse, sibling, niece, nephew,
     mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law
     or sister-in-law, including adoptive relationships, a trust in which any of
     these persons (and/or the Participant) holds more than 50% of the
     beneficial interest, a foundation in which any of these persons (and/or the
     Participant) controls the management of assets and any other entity in
     which any of these persons (and/or the Participant) owns more than 50% of
     the voting interests.

          "Incentive Stock Option" means any Stock Option intended to be and
     designated as an "Incentive Stock Option", which satisfies the requirements
     of Section 422 of the Code or any successor section thereto.

          "Non-Employee Director" shall have the meaning set forth in Rule
     16b-3(b)(3)(i) promulgated by the Securities and Exchange Commission under
     the Exchange Act, or any successor definition adopted by the Commission.

          "Non-Qualified Stock Option" means any Stock Option that is not an
     Incentive Stock Option.

          "Option Exercise Price" means the price at which a share of Stock may
     be purchased by a Participant pursuant to the exercise of an Option, as
     determined by the Committee and set forth in the related Option Award
     Agreement.

          "Option Term" shall have the meaning assigned to it in Section
     6(b)(2).

          "Outside Director" shall have the meaning set forth in Section 162(m)
     of the Code and the regulations promulgated thereunder.


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          "Participant" means an Eligible Person who holds an outstanding Award
     granted under the Plan.

          "Performance-Based Restricted Stock" means an Award of Restricted
     Stock, which will vest upon the achievement of Performance Goals
     established by or under the direction of the Committee and set forth in the
     related Award Agreement and which is intended to qualify for the exemption
     from the limitation on deductibility imposed by Section 162(m) of the Code.

          "Performance Goals" means the performance goals established by the
     Committee with respect to any Award, which shall be based on one or more of
     the following measures: earned premiums, operating income, net income,
     combined ratio, underwriting income and/or operating ratios (including loss
     ratio, loss adjustment expense ratio and/or expense ratio). Performance
     goals may be measured on a corporate, subsidiary or business unit basis, or
     any combination thereof. Performance goals may reflect absolute entity
     performance or a relative comparison of entity performance to the
     performance of a peer group of entities or other external measure.

          "Plan" means The Progressive Corporation 2003 Incentive Plan, as
     amended from time to time.

          "Potential Change in Control" has the meaning assigned to it in
     Section 7(c).

          "Restricted Stock" means an Award of shares of Stock that is made
     pursuant to Section 5 and is subject to restrictions.

          "Restriction Period" and "Minimum Restriction Period" shall have the
     meanings assigned to them in Section 5(b)(6).

          "Section 16 Participant" means a Participant under the Plan who is
     then subject to Section 16 of the Exchange Act.

          "Stock" means the Common Shares, $1.00 par value per share, of the
     Company.

          "Stock Option" or "Option" means any option to purchase shares of
     Stock that is granted pursuant to Section 6.

          "Subsidiary" means any corporation (other than the Company) in an
     unbroken chain of corporations beginning with the Company if each of the
     corporations (other than the last corporation in the unbroken chain) owns
     stock possessing 50% or more of the total combined voting power of all
     classes of stock in one of the other corporations in such chain.

          "Time-based Restricted Stock" means an Award of Restricted Stock that
     will vest upon the lapse of a time period determined by or under the
     direction of the Committee and specified in the related Award Agreement.


SECTION 2.  ADMINISTRATION.

          The Plan shall be administered by the Committee. The Committee shall
consist of not less than three directors of the Company, all of whom shall be
Non-Employee Directors and Outside Directors. Committee members shall be
appointed by the Board and shall serve on the Committee at the


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pleasure of the Board. The functions of the Committee specified in the Plan
shall be exercised by the Board if and to the extent that no Committee exists
which has the authority to so administer the Plan.

          The Committee shall have full power to interpret and administer the
Plan and full authority to select the individuals to whom Awards will be granted
and to determine the type and amount of Awards to be granted to each
Participant, the consideration, if any, to be paid for such Awards, the timing
of such Awards, the terms and conditions of Awards granted under the Plan and
the terms and conditions of the related Award Agreements which will be entered
into with Participants. As to the selection of and grant of Awards to
Participants who are not Section 16 Participants, the Committee may delegate its
responsibilities to members of the Company's management consistent with
applicable law.

          The Committee shall have the authority to adopt, alter, change and
repeal such rules, regulations, guidelines and practices governing the Plan,
from time to time, as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award issued under the Plan (and any Award
Agreement relating thereto); to direct employees of the Company or other
advisors to prepare such materials or perform such analyses as the Committee
deems necessary or appropriate; and otherwise to supervise the administration of
the Plan.

          Any interpretation and administration of the Plan by the Committee,
and all actions and determinations of the Committee, shall be final, binding and
conclusive on the Company, its shareholders, Subsidiaries, Affiliates, all
Participants in the Plan, their respective legal representatives, successors and
assigns and all persons claiming under or through any of them. No member of the
Board or of the Committee shall incur any liability for any action taken or
omitted, or any determination made, in good faith in connection with the Plan.


SECTION 3.  STOCK SUBJECT TO THE PLAN.

          (a) Aggregate Stock Subject to the Plan. Subject to adjustment as
     provided in Section 3(c) below, the total number of shares of Stock
     reserved and available for Awards under the Plan is 5,000,000. Any Stock
     issued hereunder may consist, in whole or in part, of authorized and
     unissued shares or treasury shares.

          (b) Forfeiture or Termination of Awards or Stock. If any Stock subject
     to any Award granted hereunder is forfeited or an Award otherwise
     terminates or expires without the issuance of Stock, the Stock that is
     subject to such Award shall again be available for distribution in
     connection with future Awards under the Plan as set forth in Section 3(a),
     unless the Participant who had been awarded such forfeited Stock or the
     expired or terminated Award has theretofor received dividends or other
     benefits of ownership with respect to such Stock. For purposes hereof, a
     Participant shall not be deemed to have received a benefit of ownership
     with respect to such Stock by the exercise of voting rights or the
     accumulation of dividends which are not realized due to the forfeiture of
     such Stock or the expiration or termination of the related Award without
     issuance of such Stock.

          (c) Adjustment. In the event of any merger, reorganization,
     consolidation, recapitalization, share dividend, share split, reverse share
     split, combination of shares or other change in the corporate or capital
     structure of the Company affecting the Stock, such substitution or
     adjustment shall be made in the aggregate number of shares of Stock
     reserved for issuance under the Plan, in the maximum number of shares that
     may be subject to Awards granted to any Participant during any calendar
     year or other period, in the number and Option Exercise Price of


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     shares subject to outstanding Options granted under the Plan and in the
     number of shares subject to Restricted Stock Awards granted under the Plan
     as may be approved by the Committee, in its sole discretion, to prevent
     dilution or enlargement of rights; provided that the number of shares
     subject to any Award shall always be a whole number. Any fractional shares
     shall be eliminated.

          (d) Annual Award Limitation. No Participant may be granted Awards
     under the Plan with respect to an aggregate of more than 200,000 shares of
     Stock (subject to adjustment as provided in Section 3(c) hereof) during any
     calendar year.


SECTION 4.  ELIGIBILITY.

          Officers and other key employees of the Company and its Subsidiaries
and Affiliates (but excluding members of the Committee and any other person who
serves only as a director) who are responsible for or contribute to the
management, growth or profitability of the business of the Company or its
Subsidiaries or Affiliates ("Eligible Persons") are eligible to be granted
Awards under the Plan.


SECTION 5.  RESTRICTED STOCK.

          (a) Grant. Subject to the terms and conditions of the Plan, Restricted
     Stock may be awarded to Eligible Persons at any time and from time to time
     as shall be determined by the Committee. The Committee shall determine the
     individuals to whom, and the time or times at which, grants of Restricted
     Stock will be made; the number of shares of Restricted Stock to be awarded
     to each Participant; the price (if any) to be paid by the Participant
     (subject to Section 5(b)); whether the Awards will consist of
     Performance-Based Restricted Stock or Time-Based Restricted Stock or a
     combination thereof; the date or dates or conditions upon which Restricted
     Stock Awards will vest, whether through lapse of time or the achievement of
     specified Performance Goals; the Performance Goal or Goals, if any, that
     must be satisfied as a condition to the vesting of any Restricted Stock
     Award; the period or periods within which such Restricted Stock Awards may
     be subject to forfeiture; and the other terms and conditions of such Awards
     in addition to those set forth in Section 5(b).

          The Committee may condition the grant or vesting of Restricted Stock
     upon the lapse of time or the attainment of specified Performance Goals or
     such other factors as the Committee may determine in its sole discretion.

          (b) Terms and Conditions. Restricted Stock awarded under the Plan
     shall be subject to the following terms and conditions and shall contain
     such additional terms and conditions, not inconsistent with the provisions
     of the Plan, as the Committee shall deem desirable. A Participant who
     receives a Restricted Stock Award shall not have any rights with respect to
     such Award, unless and until such Participant has executed an Award
     Agreement evidencing the Award in the form approved from time to time by
     the Committee and has delivered a fully executed copy thereof to the
     Company, and has otherwise complied with the applicable terms and
     conditions of such Award.

          (1) The purchase price for shares of Restricted Stock shall be
          determined by the Committee at the time of grant and may be equal to
          their par value or zero.


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          (2) Awards of Restricted Stock must be accepted by executing the
          related Restricted Stock Award Agreement, delivering an executed copy
          of such Restricted Stock Award Agreement to the Company and paying
          whatever price (if any) is required under Section 5(b)(1).

          (3) Subject to Section 5(b)(5), each Participant receiving a
          Restricted Stock Award shall be issued a stock certificate in respect
          of such shares of Restricted Stock. Such certificate shall be
          registered in the name of such Participant, and shall bear an
          appropriate legend referring to the terms, conditions and restrictions
          applicable to such Award.

          (4) Subject to Section 5(b)(5), the stock certificates evidencing such
          shares of Restricted Stock shall be delivered to and held in custody
          by the Company, or its designee, until the restrictions thereon shall
          have lapsed or any conditions to the vesting of such Award have been
          satisfied. As a condition of any Restricted Stock Award, the
          Participant shall deliver to the Company a stock power, endorsed in
          blank, relating to the Stock covered by such Award.

          (5) In the discretion of the Company, any shares of Restricted Stock
          awarded to any Participant may be issued and held in book entry form.
          In such event, no stock certificates evidencing such shares will be
          issued and the applicable restrictions will be noted in the records of
          the Company's transfer agent and in the book entry system.

          (6) A Participant may be granted an Award of Time-Based Restricted
          Stock or Performance-Based Restricted Stock, or a combination thereof.
          Time-Based Restricted Stock Awards will vest and all restrictions
          thereon will terminate upon the lapse of a period of time specified by
          the Committee, provided all other conditions to vesting have been met.
          Performance-Based Restricted Stock Awards will vest and all
          restrictions thereon will terminate upon the certification by the
          Committee of the achievement of the specified Performance Goals,
          provided all other conditions to vesting have been met.

          (7) Subject to the provisions of this Plan and the related Restricted
          Stock Award Agreement, during the period set by the Committee
          commencing with the date of a Restricted Stock Award (the "Restriction
          Period"), the Participant who has received such Award shall not be
          permitted to sell, transfer, pledge, assign or otherwise encumber the
          shares of Restricted Stock which are subject to such Award. The
          Restriction Period shall not be less than six months and one day in
          duration ("Minimum Restriction Period") and may be a function of time
          or the achievement of Performance Goals, or both, as determined by the
          Committee at the time of grant. Subject to these limitations and the
          Minimum Restriction Period requirement, the Committee, in its sole
          discretion, may provide for the lapse of such restrictions in
          installments and may accelerate or waive such restrictions, in whole
          or in part, based on service, performance or such other factors and
          criteria as the Committee may determine, in its sole discretion;
          provided that any such action does not affect any Award held by any
          Participant who is subject to Section 162(m) of the Code.

          (8) Except as provided in this Section 5(b)(8), Section 5(b)(7) or
          Section 5(b)(9), the Participant shall have, with respect to the
          shares of Restricted Stock awarded, all of the rights of a shareholder
          of the Company, including the right to vote the Stock and the right to
          receive any dividends. The Committee, in its sole discretion, as
          determined at the time


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          of award, may permit or require the payment of cash dividends to be
          deferred and, if the Committee so determines, reinvested, subject to
          Section 10(f), in additional Restricted Stock to the extent shares are
          available under Section 3, or otherwise reinvested. Stock dividends
          issued with respect to Restricted Stock shall be treated as additional
          shares of Restricted Stock that are subject to the same restrictions
          and other terms and conditions that apply to the shares with respect
          to which such dividends are issued.

          (9) No Restricted Stock shall be transferable by any Participant other
          than by will or by the laws of descent and distribution, except that,
          if determined by the Committee at the time of grant and so provided in
          the applicable Award Agreement, a Participant may transfer Restricted
          Stock during his or her lifetime to one or more of his or her Family
          Members, provided that no consideration is paid for the transfer and
          that the transfer would not result in the loss of any exemption under
          Rule 16b-3 of the Exchange Act with respect to any Restricted Stock.
          The transferee of Restricted Stock will be subject to all
          restrictions, terms and conditions applicable to the Restricted Stock
          prior to its transfer, except that the Restricted Stock will not be
          further transferable by the transferee other than by will or by the
          laws of descent and distribution.

          (10) If a Participant's employment by the Company or any Subsidiary or
          Affiliate terminates by reason of death, any Restricted Stock held by
          such Participant at the time of death shall thereafter vest or any
          restrictions lapse, to the extent such Restricted Stock would have
          become vested or no longer subject to restriction within one year from
          the time of death had the Participant continued to fulfill all of the
          conditions of the Restricted Stock Award during such period; provided
          that, if the vesting of such Award is conditioned on or subject to the
          achievement of specified Performance Goals, such Performance Goals are
          achieved prior to the earlier of the expiration of such one year
          period or the Expiration Date of the Award, subject in all cases to
          the Minimum Restriction Period requirement. The balance of the
          Restricted Stock shall be forfeited.

          (11) If a Participant's employment by the Company or any Subsidiary or
          Affiliate terminates by reason of Disability, any Restricted Stock
          then held by such Participant shall thereafter vest or any restriction
          lapse, to the extent such Restricted Stock would have become vested or
          no longer subject to restrictions within one year from the time of
          such termination had the Participant continued to fulfill all of the
          conditions of the Restricted Stock Award during such period; provided
          that, if the vesting of such Award is conditioned on or subject to the
          achievement of specified Performance Goals, such Performance Goals are
          achieved prior to the earlier of the expiration of such one year
          period or the Expiration Date of the Award, subject in all cases to
          the Minimum Restriction Period requirement. The balance of the
          Restricted Stock shall be forfeited.

          (12) Unless otherwise determined by the Committee at or after the time
          of granting any Restricted Stock Award, and except as provided in
          Section 5(b)(13) hereof, if a Participant's employment by the Company
          or any Subsidiary or Affiliate terminates for any reason other than
          death or Disability, all Restricted Stock held by such Participant
          which is unvested or subject to restriction at the time of such
          termination shall thereupon be forfeited.

          (13) If a Participant's employment with the Company (or any of its
          Subsidiaries or Affiliates) terminates due to a Qualified Retirement
          (as defined below), the following provisions shall apply (subject in
          all cases to Section 5(b)(13)(C) hereof):


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          (A)  if and to the extent that any Award Installment (as defined
               below) is vested as of the Qualified Retirement Date (as defined
               below), all shares of Restricted Stock held by the Participant in
               connection with such Award Installment shall be free of
               applicable restrictions and delivered to the Participant (subject
               to Section 5(b)(5));

          (B)  (i) with respect to all Time-Based Restricted Stock Awards held
               by the Participant on his or her Qualified Retirement Date, if
               and to the extent that any Award Installment is not vested as of
               such Qualified Retirement Date, such Award Installment (a) shall
               remain in effect with respect to fifty percent (50%) of the
               shares of Stock covered thereby and, as to such shares, shall
               immediately vest on the Participant's Qualified Retirement Date,
               and shall thereafter be free of applicable restrictions and
               delivered to the Participant (subject to Section 5(b)(5)); and
               (b) shall terminate, effective as of the Qualified Retirement
               Date, with respect to the remaining fifty percent (50%) of the
               shares covered by such Award Installment.

               (ii) with respect to all Performance-Based Restricted Stock
               Awards held by the Participant on his or her Qualified Retirement
               Date, if and to the extent that any Award Installment is not
               vested as of the Qualified Retirement Date, such Award
               Installment (a) shall remain in effect with respect to fifty
               percent (50%) of the shares of Stock covered thereby and, as to
               such shares, shall vest upon the achievement of the related
               Performance Goals (unless such Performance Goals are not achieved
               prior to the Expiration Date applicable to such Award
               Installment, in which event the Award Installment will terminate,
               and all shares of Restricted Stock covered by such Award
               Installment will be forfeited, as of such Expiration Date), and
               (b) shall terminate, effective as of the Qualified Retirement
               Date, with respect to the remaining fifty percent (50%) of the
               shares covered by such Award Installment; provided that, with
               respect to any member of the Company's Senior Management Group
               (as defined below) who has given the Company at least one (1)
               full year's prior written notice of his or her retirement, upon
               any Qualified Retirement of such individual, no portion of any
               Performance-Based Restricted Stock Awards held by such
               Participant on his or her Qualified Retirement Date will
               terminate on such date, but such Awards will remain in effect and
               one hundred percent (100%) of the shares subject to each such
               Award held by such Participant on his or her Qualified Retirement
               Date shall vest as of the date on which the applicable
               Performance Goals have been achieved (unless such Performance
               Goals are not achieved prior to the Expiration Date applicable to
               such Award, in which event the Award will terminate, and all
               shares of Restricted Stock covered by such Award will be
               forfeited, as of such Expiration Date).

          (C)  if the Committee determines that the Participant is or has
               engaged in any Disqualifying Activity (as defined below), then
               (1) to the extent that any Restricted Stock Award held by such
               Participant has vested as of the


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               Disqualification Date (as defined below), the Participant shall
               have the right to receive all shares of Restricted Stock which
               are vested as of such date (subject to Section 5(b)(5)) and (2)
               to the extent that any Restricted Stock Award held by such
               Participant has not vested as of the Disqualification Date, the
               Award shall terminate, and all related shares shall be forfeited,
               as of such date. Any determination by the Committee, which may
               act upon the recommendation of the Chief Executive Officer or
               other senior officer of the Company, that the Participant is or
               has engaged in any Disqualifying Activity, and as to the
               Disqualification Date, shall be final and conclusive.

          (D)  For purposes of Section 5(b)13, the following terms are defined
               as follows:

               (i) QUALIFIED RETIREMENT - any termination of a Participant's
               employment with the Company or its Subsidiaries or Affiliates for
               any reason (other than death, Disability or an involuntary
               termination for Cause) if, at or immediately prior to the date of
               such termination, the Participant satisfies both of the following
               conditions:

                    (a)  the Participant is 55 year of age or older; and

                    (b)  the sum of the Participant's age and completed years of
                         service as an employee of the Company or its
                         Subsidiaries or Affiliates (disregarding fractions in
                         both cases) shall total 70 or more.

               (ii) QUALIFIED RETIREMENT DATE - the date as of which the
               Participant's employment with the Company or its Subsidiaries or
               Affiliates shall terminate pursuant to a Qualified Retirement.

               (iii) DISQUALIFYING ACTIVITY - means any of the following acts or
               activities:

                    (a) directly or indirectly serving as a principal,
                    shareholder, partner, director, officer, employee or agent
                    of, or as a consultant, advisor or in any other capacity to,
                    any business or entity which competes with the Company or
                    its Subsidiaries or Affiliates in any business or activity
                    then conducted by the Company or any of its Subsidiaries or
                    Affiliates to an extent deemed material by the Committee; or

                    (b) any disclosure by the Participant, or any use by the
                    Participant for his or her own benefit or for the benefit of
                    any other person or entity (other than the Company or its
                    Subsidiaries or Affiliates), of any confidential information
                    or trade secret of the Company or any of its Subsidiaries or
                    Affiliates without the consent of the Company; or


                                      -9-

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                    (c) any material violation of any of the provisions of the
                    Company's Code of Business Conduct and Ethics ("Code of
                    Conduct") or any agreement between the Participant and the
                    Company;

                    (d) making any other disclosure or taking any other action
                    which is determined by the Committee to be materially
                    detrimental to the business, prospects or reputation of the
                    Company or any of its Subsidiaries or Affiliates; or

                    (e) the Participant fails, in any material respect, to
                    perform his or her assigned responsibilities as an employee
                    of the Company or any of its Subsidiaries or Affiliates, as
                    determined by the Committee, in its sole judgment, after
                    consulting with the Chief Executive Officer.



          The ownership of less than 2% of the outstanding voting securities of
          a publicly traded corporation which competes with the Company or any
          of its Subsidiaries or Affiliates shall not constitute a Disqualifying
          Activity.

               (iv) CAUSE - means a felony conviction of a Participant or the
               failure of a Participant to contest prosecution for a felony, or
               a Participant's willful misconduct or dishonesty, any of which,
               in the judgment of the Committee, is harmful to the business or
               reputation of the Company or any Subsidiary or Affiliate; or any
               material violation of the Code of Conduct or any agreement
               between the Participant and the Company.

               (v) DISQUALIFICATION DATE - the earliest date as of which the
               Participant engaged in any Disqualifying Activity, as determined
               by the Committee.

               (vi) AWARD INSTALLMENT - if the Restricted Stock Award consists
               of multiple Awards, each with a separate Vesting Date and/or
               separate Expiration Date, any one of such Awards or, if the
               Restricted Stock Award consists of a single Award, with a single
               Vesting Date and a single Expiration Date, then the entire Award.

               (vii) VESTING DATE - the date on which any restrictions on a
               Restricted Stock Award terminate and such Award vests, whether by
               reason of lapse of time, the achievement of specified Performance
               Goals or both.

               (viii) SENIOR MANAGEMENT GROUP - means the Chief Executive
               Officer and other members of the executive management team, (i.e.
               the Chief Executive Officer's Direct Reporting Group) determined,
               with respect to any Participant, on the date of his or her
               retirement from the Company.


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          (14) Any Participant who is then eligible to participate in The
          Progressive Corporation Executive Deferred Compensation Plan or any
          other deferral plan hereafter adopted or maintained by the Company (a
          "Deferral Plan") may elect to defer all or any portion of any
          Restricted Stock Awards granted to him or her under this Plan, subject
          to and in accordance with the terms of the applicable Deferral Plan.


SECTION 6.        STOCK OPTIONS.

          (a) Grant. Subject to the terms and conditions of the Plan, Stock
     Options may be granted to Eligible Persons at any time and from time to
     time, as shall be determined by the Committee. The Committee shall
     determine the individuals to whom, and the time or times at which, grants
     of Stock Options will be made; the number of shares purchasable under each
     Stock Option; and the other terms and conditions of the Stock Options in
     addition to those set forth in Sections 6(b) and 6(c). Any Stock Option
     granted under the Plan shall be in such form as the Committee may from time
     to time approve.

          Stock Options granted under the Plan may be either of two types, which
     shall be indicated on their face: (i) Incentive Stock Options or (ii)
     Non-Qualified Stock Options. Subject to Section 6(c) hereof, the Committee
     shall have the authority to grant to any Participant Incentive Stock
     Options, Non-Qualified Stock Options or a combination thereof.

          (b) Terms and Conditions. Options granted under the Plan shall be
     evidenced by Option Award Agreements, shall be subject to the following
     terms and conditions and shall contain such additional terms and
     conditions, not inconsistent with the terms of the Plan, as the Committee
     shall deem desirable:

          (1) Option Exercise Price. The Option Exercise Price per share of
          Stock purchasable under a Non-Qualified Stock Option shall be
          determined by the Committee at the time of grant and shall not be less
          than 100% of the Fair Market Value of the Stock on the date of grant.
          The Option Exercise Price per share of Stock purchasable under an
          Incentive Stock Option shall be determined by the Committee at the
          time of grant and shall be not less than 100% of the Fair Market Value
          of the Stock at the date of grant (or 110% of the Fair Market Value of
          the Stock at the date of grant in the case of a Participant who at the
          date of grant owns shares possessing more than ten percent of the
          total combined voting power of all classes of stock of the Company or
          its parent or subsidiary corporations (as determined under Section
          424(d), (e) and (f) of the Code)(a "10% Participant")).

          (2) Option Term. The term of each Stock Option ("Option Term") shall
          be determined by the Committee at the time of grant and may not exceed
          ten years from the date the Option is granted (or, with respect to
          Incentive Stock Options, five years in the case of a 10% Participant).

          (3) Exercise. Stock Options shall be exercisable at such time or times
          and subject to such terms and conditions (which may include, without
          limitation, the achievement of one or more Performance Goals) as shall
          be determined by the Committee at or after grant; provided, however,
          that, except as provided in Section 7, unless otherwise determined by
          the Committee at or after grant, no Stock Option shall be exercisable
          prior


                                      -11-

<PAGE>

          to six months and one day following the date of grant. If any Stock
          Option is exercisable only in installments or only after a specified
          vesting date, the Committee may accelerate or waive, in whole or in
          part, such installment exercise provisions or vesting date, at any
          time at or after grant based on such factors as the Committee shall
          determine, in its sole discretion.

          (4) Method of Exercise. Subject to whatever installment exercise
          provisions apply with respect to such Stock Option, and the six month
          and one day holding period set forth in Section 6(b)(3) and any other
          conditions to vesting, Stock Options may be exercised in whole or in
          part, at any time during the Option Term, by giving to the Company
          written notice of exercise specifying the number of shares of Stock to
          be purchased.

               Such notice shall be accompanied by payment in full of the Option
          Exercise Price of the shares of Stock for which the Option is
          exercised, in cash or by check or such other instrument as the
          Committee may accept. Subject to the following sentence, unless
          otherwise determined by the Committee, in its sole discretion, at or
          after grant, payment, in full or in part, of the Option Exercise Price
          of (i) Incentive Stock Options may be made in the form of unrestricted
          Stock then owned by the Participant and (ii) Non-Qualified Stock
          Options may be made in the form of unrestricted Stock then owned by
          the Participant or Stock that is part of the Non-Qualified Stock
          Option being exercised. Notwithstanding the foregoing, any election by
          a Section 16 Participant to satisfy such payment obligation, in whole
          or in part, with unrestricted Stock then owned by such Participant or
          Stock that is part of the Non-Qualified Stock Option being exercised
          shall be subject to prior approval by the Committee, in its sole
          discretion. The value of each such share surrendered or withheld shall
          be equal to the Fair Market Value of the Stock on the date the Option
          is exercised.

               No Stock shall be issued pursuant to an exercise of an Option
          until full payment has been made therefor. A Participant shall not
          have rights to dividends or any other rights of a shareholder with
          respect to any Stock subject to an Option unless and until the
          Participant has given written notice of exercise, has paid in full for
          such shares, has given, if requested, the representation described in
          Section 10(a) and such shares have been issued to the Participant.

          (5) Non-Transferability of Options. Except as provided in the
          following sentence, no Stock Option shall be transferable by the
          Participant other than by will or by the laws of descent and
          distribution, and all Stock Options shall be exercisable, during the
          Participant's lifetime, only by the Participant or, subject to
          Sections 6(b)(3) and 6(c), by the Participant's authorized legal
          representative if the Participant is unable to exercise an Option as a
          result of the Participant's Disability. Notwithstanding the foregoing,
          if determined by the Committee at the time of grant and so provided in
          the applicable Award Agreement, a Participant may transfer a
          Non-Qualified Stock Option during his or her lifetime to one or more
          of his or her Family Members, provided that no consideration is paid
          for the transfer and that the transfer would not result in the loss of
          any exemption under Rule 16b-3 of the Exchange Act with respect to any
          Stock Option. The transferee of a Stock Option will be subject to all
          restrictions, terms and conditions applicable to the Stock Option
          prior to its transfer, except that the Stock Option will not be
          further transferable by the transferee other than by will or by the
          laws of descent and distribution.


                                      -12-


<PAGE>


          (6) Termination by Death. Subject to Section 6(c), if any
          Participant's employment by the Company or any Subsidiary or Affiliate
          terminates by reason of death, any Stock Option held by such
          Participant may thereafter be exercised, to the extent such Option was
          exercisable at the time of death or would have become exercisable
          within one year from the time of death had the Participant continued
          to fulfill all conditions of the Option during such period (or on such
          accelerated basis as the Committee may determine at or after grant),
          by the estate of the Participant (acting through its fiduciary) for a
          period of one year (or such other period as the Committee may specify
          at or after grant) from the date of such death; provided that, if the
          vesting of such Option is conditioned on or subject to the achievement
          of specified Performance Goals, such Performance Goals are achieved
          prior to the earlier of the expiration of such one year period or the
          Expiration Date of such Option. The balance of the Stock Option shall
          be forfeited.

          (7) Termination by Reason of Disability. Subject to Sections 6(b)(3)
          and 6(c), if a Participant's employment by the Company or any
          Subsidiary or Affiliate terminates by reason of Disability, any Stock
          Option held by such Participant may thereafter be exercised, to the
          extent such Option was exercisable at the time of termination or would
          have become exercisable within one year from the time of termination
          had the Participant continued to fulfill all conditions of the Option
          during such period (or on such accelerated basis as the Committee may
          determine at or after grant), by the Participant or by the
          Participant's duly authorized legal representative if the Participant
          is unable to exercise the Option as a result of the Participant's
          Disability, for a period of one year (or such other period as the
          Committee may specify at or after grant) from the date of such
          termination of employment; provided that, if the vesting of such
          Option is conditioned on or subject to the achievement of specified
          Performance Goals, such Performance Goals are achieved prior to the
          earlier of the expiration of such one year period or the Expiration
          Date of such Option; and provided, further, that if the Participant
          dies within such one-year period (or such other period as the
          Committee shall specify at or after grant), any unexercised Stock
          Option held by such Participant shall thereafter be exercisable by the
          estate of the Participant (acting through its fiduciary) to the same
          extent to which it was exercisable at the time of death for a period
          of one year from the date of such termination of employment. The
          balance of the Stock Option shall be forfeited.

          (8) Other Termination. Unless otherwise determined by the Committee at
          or after the time of granting any Stock Option, if a Participant's
          employment by the Company or any Subsidiary or Affiliate terminates
          for any reason other than death or Disability, all Stock Options held
          by such Participant shall thereupon immediately terminate, except that
          if the Participant is involuntarily terminated by the Company or any
          Subsidiary or Affiliate without Cause, any such Stock Option may be
          exercised, to the extent otherwise exercisable at the time of such
          termination, at any time during the lesser of two months from the date
          of such termination or the balance of such Stock Option's term. For
          purposes of this Section, "Cause" has the meaning set forth in Section
          5(b)(13)(D)(iv).

     (c) Incentive Stock Options. Notwithstanding Section 4, only employees of
     the Company or a Subsidiary shall be eligible to receive Incentive Stock
     Options. Notwithstanding Sections 6(b)(6) and (7), an Incentive Stock
     Option shall be exercisable by (i) a Participant's authorized legal
     representative (if the Participant is unable to exercise the Incentive
     Stock Option as a result of the Participant's Disability) only if, and to
     the extent, permitted by Section 422 of the Code and Section 16 of the
     Exchange Act and the rules and regulations promulgated thereunder and (ii)
     by


                                      -13-


<PAGE>


     the Participant's estate, in the case of death, or authorized legal
     representative, in the case of Disability, no later than 10 years from the
     date the Incentive Stock Option was granted (or 5 years in the case of a
     10% Participant) (in addition to any other restrictions or limitations
     which may apply). Anything in the Plan to the contrary notwithstanding, no
     term or provision of the Plan relating to Incentive Stock Options shall be
     interpreted, amended or altered, nor shall any discretion or authority
     granted under the Plan be exercised, so as to disqualify the Plan under
     Section 422 of the Code, or, without the consent of the Participant(s)
     affected, to disqualify any Incentive Stock Option under such Section 422
     or any successor Section thereto.

     (d) Buyout Provisions. The Committee may at any time buy out, for a payment
     in cash, Stock or Restricted Stock, any Option previously granted, based on
     such terms and conditions as the Committee shall establish and agree upon
     with the Participant, provided that no such transaction involving a Section
     16 Participant shall be structured or effected in a manner that would
     violate, or result in any liability on the part of the Participant under,
     Section 16 of the Exchange Act or the rules and regulations promulgated
     thereunder.


SECTION 7.  CHANGE IN CONTROL PROVISION.

          (a) Impact of Event. In the event of and upon: (1) a "Change in
     Control" as defined in Section 7(b) or (2) a "Potential Change in Control"
     as defined in Section 7(c), the following acceleration and valuation
     provisions shall apply:

               (1) Any Stock Options awarded under the Plan not previously
          exercisable and vested shall become fully exercisable and vested;

               (2) All restrictions, limitations and Performance Goals, if any,
          applicable to any Restricted Stock or Stock Options shall terminate
          and such Stock or Stock Options shall be deemed fully vested; and

               (3) The value of all outstanding Awards, in each case to the
          extent vested, shall, unless otherwise determined by the Committee in
          its sole discretion at or after grant but prior to any Change in
          Control or Potential Change in Control, be cashed out on the basis of
          the "Change in Control Price", as defined in Section 7(d), as of the
          date such Change in Control or such Potential Change in Control is
          determined to have occurred.

          (b) Definition of Change in Control. For purposes of Section 7(a), a
     "Change in Control" means the happening of any of the following:

               (1) When any "person" as defined in Section 3(a)(9) of the
          Exchange Act and as used in Sections 13(d) and 14(d) thereof,
          including a "group" as defined in Section 13(d) of the Exchange Act,
          but excluding the Company and any Subsidiary and any employee benefit
          plan sponsored or maintained by the Company or any Subsidiary
          (including any trustee of such plan acting as trustee), directly or
          indirectly, becomes the "beneficial owner" (as defined in Rule 13d-3
          under the Exchange Act, as amended from time to time), of securities
          of the Company representing 20 percent or more of the combined voting
          power of the Company's then outstanding securities; provided, however,
          that the terms "person" and "group" shall not include any "Excluded
          Director", and the term "Excluded Director" means any director who, on
          the effective date of the Plan, is


                                      -14-

<PAGE>


          the beneficial owner of or has the right to acquire an amount of Stock
          equal to or greater than five percent of the number of shares of Stock
          outstanding on such effective date; and further provided that, unless
          otherwise determined by the Board or any committee thereof, the terms
          "person" and "group" shall not include any entity or group of entities
          which has acquired Stock of the Company in the ordinary course of
          business for investment purposes only and not with the purpose or
          effect of changing or influencing the control of the Company, or in
          connection with or as a participant in any transaction having such
          purpose or effect, ("Investment Intent"), as demonstrated by the
          filing by such entity or group of a statement on Schedule 13G
          (including amendments thereto) pursuant to Regulation 13D under the
          Exchange Act, as long as such entity or group continues to hold such
          Stock with an Investment Intent;

               (2) When, during any period of 24 consecutive months during the
          existence of the Plan, the individuals who, at the beginning of such
          period, constitute the Board (the "Incumbent Directors") cease for any
          reason other than death to constitute at least a majority thereof;
          provided, however, that a director who was not a director at the
          beginning of such 24-month period shall be deemed to have satisfied
          such 24-month requirement (and be an Incumbent Director) if such
          director was elected by, or on the recommendation of or with the
          approval of, at least two-thirds of the directors who then qualified
          as Incumbent Directors either actually (because they were directors at
          the beginning of such 24-month period) or by prior operation of this
          Section 7(b)(2); or

               (3) The occurrence of a transaction requiring shareholder
          approval for the acquisition of the Company, or any portion of the
          outstanding equity securities or voting power of the Company, by an
          entity other than the Company or a Subsidiary through purchase of
          Stock or assets, by merger or otherwise;

     provided, however, a change in control shall not be deemed to be a Change
     in Control for purposes of the Plan if the Board approves such change prior
     to either (i) the commencement of any of the events described in Section
     7(b)(l), (2), or (3) or 7(c)(l) or (ii) the commencement by any person
     other than the Company of a tender offer for Stock.

          (c) Definition of Potential Change in Control. For purposes of Section
     7(a), a "Potential Change in Control" means the happening of any one of the
     following:

          (1) The approval by shareholders of an agreement by the Company, the
          consummation of which would result in a Change in Control of the
          Company as defined in Section 7(b); or

          (2) The acquisition of beneficial ownership, directly or indirectly,
          by any entity, person or group (other than the Company or a Subsidiary
          or any Company employee benefit plan (including any trustee of such
          plan acting as such trustee)) of securities of the Company
          representing five percent or more of the combined voting power of the
          Company's outstanding securities and the adoption by the Board of a
          resolution to the effect that a Potential Change in Control of the
          Company has occurred for purposes of this Plan.

          (d) Change in Control Price. For purposes of this Section 7, "Change
     in Control Price" means the highest price per share paid in any transaction
     reported on the New York Stock Exchange Composite Index, or paid or offered
     in any bona fide transaction related to a Change in


                                      -15-

<PAGE>


     Control or Potential Change in Control of the Company, at any time during
     the 60-day period immediately preceding the occurrence of the Change in
     Control (or, where applicable, the occurrence of the Potential Change in
     Control event), in each case as determined by the Committee.


SECTION 8.  AMENDMENTS AND TERMINATION.

          The Board may at any time, in its sole discretion, amend, supplement,
alter or discontinue the Plan, but no such amendment, alteration or
discontinuation shall be made which would impair the rights of a Participant
under an Award theretofore granted, without the Participant's consent. The
Company shall submit to the shareholders of the Company for their approval any
amendments to the Plan which are required to be approved by shareholder by law
or the rules and regulations of any governmental authority or any stock exchange
upon which the Stock is then traded.

          Subject to changes in law or other legal requirements that would
permit otherwise, the Plan may not be amended without the approval of the
shareholders, to (a) increase the total number of shares of Stock that may be
issued under the Plan or to any Participant during any calendar year (except for
adjustments pursuant to Section 3(c)), (b) permit the granting of Stock Options
with Option Exercise Prices lower than those specified in Section 6(b)(1), (c)
modify the Plan's eligibility requirements, or (d) change the Performance Goals
specified in Section 1(c). Further, no Performance-Based Award may be amended if
such amendment would adversely affect the Award's qualification as qualified
performance-based compensation under Section 162(m) of the Code.

          The Committee may at any time, in its sole discretion, amend the terms
of any outstanding Award, but no such amendment shall be made which would impair
the rights of a Participant under an Award theretofore granted, without the
Participant's consent; nor, in the case of any Award of a Stock Option, shall
any such amendment reduce the Option Exercise Price relating to such Stock
Option or, in any other case, reduce the purchase price (if any) of the Stock
which is subject to an outstanding Award; nor shall any such amendment be made
which would make the applicable exemptions provided by Rule 16b-3 under the
Exchange Act unavailable to any Section 16 Participant holding an Award without
the Participant's consent.

          Subject to the above provisions, the Board shall have all necessary
authority to amend the Plan to take into account changes in applicable
securities and tax laws and accounting rules, as well as other developments.


SECTION 9.  UNFUNDED STATUS OF PLAN.

          The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.


SECTION 10.  GENERAL PROVISIONS.

          (a) The Committee may require each Participant acquiring Stock
     pursuant to an Award under the Plan to represent to and agree with the
     Company in writing that the Participant is acquiring the Stock


                                      -16-

<PAGE>


     without a view to distribution thereof. Any certificates for such shares
     may include any legend which the Committee deems appropriate to reflect any
     restrictions on transfer.

               All shares of Stock or other securities issued under the Plan
     shall be subject to such stop-transfer orders and other restrictions as the
     Committee may deem advisable under the rules, regulations and other
     requirements of the Securities and Exchange Commission, any stock exchange
     upon which the Stock is then listed, and any applicable federal or state
     securities laws, and the Committee may cause a legend or legends to be
     placed on any certificates for such shares to make appropriate reference to
     such restrictions or to cause such restrictions to be noted in the records
     of the Company's stock transfer agent and any applicable book entry system.

          (b) Nothing contained in this Plan shall prevent the Board from
     adopting other or additional compensation arrangements, subject to
     shareholder approval if such approval is required; and such arrangements
     may be either generally applicable or applicable only in specific cases.

          (c) Neither the adoption of the Plan, nor its operation, nor any
     document describing, implementing or referring to the Plan, or any part
     thereof, shall confer upon any Participant under the Plan any right to
     continue in the employ, or as a director, of the Company or any Subsidiary
     or Affiliate, or shall in any way affect the right and power of the Company
     or any Subsidiary or Affiliate to terminate the employment, or service as a
     director, or change the job title, duties, authority, position or
     compensation of any Participant in the Plan at any time with or without
     assigning a reason therefor, to the same extent as the Company or any
     Subsidiary or Affiliate might have done if the Plan had not been adopted.

          (d) For purposes of this Plan, a transfer of a Participant between the
     Company and any of its Subsidiaries or Affiliates, or between such
     Subsidiaries or Affiliates, shall not be deemed a termination of employment
     or adversely affect or enlarge the rights of any Participant under this
     Plan or with respect to any Award.

          (e) No later than the date as of which an amount first becomes
     includable in the gross income of the Participant for federal income tax
     purposes with respect to any Award under the Plan, the Participant shall
     pay to the Company, or make arrangements satisfactory to the Committee
     regarding the payment of, any federal, state or local taxes or other items
     of any kind required by law to be withheld with respect to such amount.
     Subject to the following sentence, unless otherwise determined by the
     Committee, withholding obligations may be settled with Stock, including
     unrestricted Stock previously owned by the Participant or Stock that is
     part of the Award that gives rise to the withholding requirement.
     Notwithstanding the foregoing, any election by a Section 16 Participant to
     settle such tax withholding obligation with Stock that is previously owned
     by the Participant or part of such Award shall be subject to prior approval
     by the Committee, in its sole discretion. The obligations of the Company
     under the Plan shall be conditional on such payment or arrangements and the
     Company and its Subsidiaries and Affiliates to the extent permitted by law
     shall have the right to deduct any such taxes from any payment of any kind
     otherwise due to the Participant.

          (f) The actual or deemed reinvestment of dividends in additional Stock
     or Restricted Stock at the time of any dividend payment shall only be
     permissible if sufficient shares of Stock are available under Section 3 for
     such reinvestment (taking into account the then outstanding and previously
     granted Restricted Stock and Stock Options).


                                      -17-

<PAGE>


          (g) The Plan, all Awards made and all actions taken thereunder and any
     agreements relating thereto, shall be governed by and construed in
     accordance with the laws of the State of Ohio.

          (h) In the event any Award is transferred or assigned pursuant to a
     court order, such transfer or assignment shall be without liability to the
     Company and the Company shall have the right to offset against such Award
     any expenses (including attorneys' fees) incurred by the Company in
     connection with such transfer or assignment.

          (i) All Award Agreements entered into with Participants pursuant to
     the Plan shall be subject to the Plan. A Participant who receives an Award
     under the Plan shall not have any rights with the respect to such Award,
     unless and until such Participant has executed an Award Agreement
     evidencing the Award, in the form approved by the Committee; has delivered
     a fully-executed copy of such Award Agreement to the Company; and has
     otherwise complied with the applicable terms and conditions of such Award.

          (j) The provisions of Awards need not be the same with respect to each
     Participant.


SECTION 11.  SHAREHOLDER APPROVAL; EFFECTIVE DATE OF PLAN.

          The Plan was adopted by the Board on January 31, 2003 and is subject
to approval by the holders of the Company's outstanding Stock, in accordance
with applicable law. The Plan will become effective on the date of such
approval.


SECTION 12.  TERM OF PLAN.

          No Award shall be granted pursuant to the Plan on or after January 31,
2013, but Awards granted prior to such date may extend beyond that date.


                                      -18-