EX-4(H) THIRD SUPPLEMENTAL INDENTURE



 






Exhibit No. 4(H)




THE PROGRESSIVE CORPORATION




and




STATE STREET BANK AND TRUST COMPANY, as




Successor Trustee




THIRD SUPPLEMENTAL INDENTURE




6.375% Senior Notes due 2012




     THIS THIRD SUPPLEMENTAL INDENTURE, dated as of December 7, 2001, between THE PROGRESSIVE
CORPORATION, an Ohio corporation (the “ISSUER”) and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company (“SSB”), in its capacity as Successor Trustee.



W I T N E S S E T H:




     WHEREAS, the Issuer entered into an Indenture, dated as of September 15, 1993 (as supplemented
by the First Supplemental Indenture, dated as of March 15, 1996, the “INDENTURE”), with the First
National Bank of Boston, in its


capacity as Trustee, pursuant to which the Issuer may from time to time issue its unsecured
debentures, notes and other evidences of indebtedness in one or more series; and



     WHEREAS, the Issuer entered into a Supplemental Indenture, dated as of March 15, 1996,
confirming the succession of SSB as trustee under the Indenture;



and




     WHEREAS, the Issuer entered into a Second Supplemental Indenture, dated as of February 26,
1999;



     WHEREAS, Article Eight of the Indenture provides for various matters with respect to any
series of Securities issued under the Indenture to be established in an indenture supplemental to
the Indenture; and



     WHEREAS, Section 8.1(c) of the Indenture provides that the Issuer, when authorized by its
Board of Directors, and the Trustee may from time to time and at any time enter into an indenture
supplemental to the Indenture to add on to the covenants of the Issuer certain further covenants,
restrictions, conditions or provisions.



     NOW THEREFORE:



- 1 -









 





     In consideration of the premises and other good and valuable consideration, the parties hereto
mutually covenant and agree as follows:



ARTICLE 1




RELATION TO INDENTURE; DEFINITIONS




     SECTION 1.01. Integral Part. This Third Supplemental Indenture constitutes an integral part of
the Indenture.



     SECTION 1.02. General Definitions. For all purposes of this Third Supplemental Indenture:



     (a) capitalized terms used herein without definition shall have the meanings specified in the
Indenture;



     (b) all references herein to Articles and Sections, unless otherwise specified, refer to the
corresponding Articles and Sections of this Third Supplemental Indenture; and



     (c) the terms “HEREIN”, “HEREOF”, “HEREUNDER” and other words of similar import refer to this
Third Supplemental Indenture.



     SECTION 1.03. Definitions. The following definitions shall apply to this Third Supplemental
Indenture:



     “CONSOLIDATED TANGIBLE NET WORTH” means, at any date, the total assets appearing on the
consolidated balance sheet of the Issuer and its consolidated subsidiaries as of the end of the
then most recent fiscal quarter of the Issuer, prepared in accordance with generally accepted
accounting principles, less the
sum of (a) the total liabilities appearing on such balance sheet and (b) intangible assets.
“INTANGIBLE ASSETS” means, for the purposes of this definition, the value, as shown on or reflected
in such balance sheet, of (i)
all trade names, trademarks, licenses, patents, copyrights and goodwill, (ii) organizational costs
and (iii) unamortized debt discount and expense, less unamortized premium.



     “DESIGNATED SECURITIES” means the series of Securities designated by the Issuer as its “6.375%
Senior Notes due 2012”.



     “DESIGNATED SUBSIDIARY” means (i) Progressive Casualty Insurance Company, an Ohio corporation,
so long as it remains a subsidiary of the Issuer, (ii) any other consolidated subsidiary of the
Issuer the assets of which
constitute 10% or more of the Total Assets, and (iii) any subsidiary that is a successor to all or
substantially all of the business or properties of any such subsidiary.



- 2 -









 





     “TOTAL ASSETS” means, at any date, the total assets appearing on the consolidated balance
sheet of the Issuer and its consolidated subsidiaries as of the end of the then most recent fiscal
quarter of the Issuer, prepared in accordance with generally accepted accounting principles.



ARTICLE 2




ADDITIONAL COVENANTS




     SECTION 2.01. Limitation on Liens. The Issuer will not, nor will it permit any Designated
Subsidiary to, incur, issue, assume or guarantee any indebtedness for money borrowed if (i) that
indebtedness is secured by a pledge,


mortgage, deed of trust or other lien on any shares of stock or indebtedness of any Designated
Subsidiary (a “LIEN”), and (ii) the aggregate amount of the indebtedness so secured exceeds an
amount equal to 15% of the Issuer’s Consolidated Tangible Net Worth, unless the Designated
Securities are also secured equally and ratably with such other indebtedness. For purposes of this
restriction, a “LIEN” will not include the pledge to, or deposit with, any state or provincial
insurance regulatory authorities of any investment securities by the Issuer or any of its subsidiaries.



     The foregoing restriction shall not apply to indebtedness secured by:



     (a) Liens on any shares of stock or indebtedness of or acquired from a corporation merged or
consolidated with or into, or otherwise acquired by, the Issuer or a Designated Subsidiary;



     (b) Liens to secure indebtedness of a Designated Subsidiary to the Issuer or to another
Designated Subsidiary, but only as long as such indebtedness is owned or held by the Issuer or a
Designated Subsidiary; and



     (c) Any extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any lien referred to in (a) and (b).



     SECTION 2.02. Consolidation, Merger, Sale, Conveyance and Lease. The Issuer will not
consolidate or merge with or into any other Person or Persons, or sell, convey or lease all or
substantially all of its property to any other Person, unless:



     (a) the Person formed by such consolidation, or into which the Issuer is merged or which
acquires or leases all or substantially all of the property of the Issuer, is a corporation or
other entity organized under the laws of the

United States, any state thereof or the District of Columbia, and such Person expressly assumes the
Issuer’s obligations under the Designated Securities and the Indenture; and



     (b) immediately after giving effect to the transaction, no Event of Default exists.



- 3 -









 





     This restriction shall not apply if the Issuer is the Person that survives any such
transaction.



         In the event of a conflict between any provision in this Section and any provision in Article
9 of the Indenture, Article 9 of the Indenture shall govern.



ARTICLE 3




MISCELLANEOUS PROVISIONS




     SECTION 3.01. Applicability of this Third Supplemental Indenture. The provisions of this Third
Supplemental Indenture will be applicable solely to the Designated Securities.



     SECTION 3.02. Adoption, Ratification and Confirmation. The Indenture, as supplemented by this
Third Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed.



     SECTION 3.03. Counterparts. This Third Supplemental Indenture may be executed in any number of
counterparts, each of which when so executed shall be deemed an original; and all such counterparts
shall together constitute but one and the same instrument.



     SECTION 3.04. GOVERNING LAW. THIS THIRD SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.



- 4 -









 





     IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be
duly executed and their respective corporate seals to be hereunto fixed and attested as of the day
and year first written above.



	 	 	 	 	 	 	 
	 	 	THE PROGRESSIVE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Stephen D. Peterson	 	 
	 

	 	 	 	 

Stephen D. Peterson

Treasurer
	 	 






	 	 	 	 	 
	Attest:	 	 
	 
	By:

	 	/s/ Charles E. Jarrett	 	 
	 

	 	 

Charles E. Jarrett

Secretary
	 	 






	 	 	 	 	 	 	 
	 	 	STATE STREET BANK AND TRUST

      COMPANY, as Successor Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dori Ann Seakas	 	 
	 

	 	 	 	 

Name: Dori Ann Seakas

Title: Officer
	 	 






	 	 	 	 	 
	Attest:	 	 
	 
	By:

	 	/s/ Patrick E. Thebado	 	 
	 

	 	 

Name: Patrick E. Thebado

Title: Vice President
	 	 






- 5 -









 






STATE OF OHIO




                     ss:




COUNTY OF CUYAHOGA




     On this ___th day of December, 2001, before me personally came Stephen D. Peterson, to me
personally known, who, being by me duly sworn, did depose and say that he is a resident of Cuyahoga
County, Ohio; that he is an officer of THE PROGRESSIVE CORPORATION, one of the corporations
described in and which executed


the above instrument; that he knows the corporate seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he
signed his name thereto by like authority.



	 	 	 	 	 
	 

	 	 

Notary Public

My commission expires:
	 	 






[Notarial Seal]




STATE OF MASSACHUSETTS                       ss.:

COUNTY OF SUFFOLK




     On this ___th day of December, 2001, before me personally came, to me personally known, who,
being by me duly sworn, did depose and say that he is a resident of Bristol County, Massachusetts;
that he is an authorized officer of STATE STREET BANK AND TRUST COMPANY, one of the corporations
described in and which executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to said instruments is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he signed her name
thereto by like authority.



	 	 	 	 	 
	 

	 	 

Notary Public
	 	 
	 

	 	My commission expires:	 	 






[Notary Seal]





- 6 -