Document:

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Exhibit No. 10(T)

                           THE PROGRESSIVE CORPORATION
                        1990 DIRECTORS' STOCK OPTION PLAN
                   (AMENDED AND RESTATED AS OF APRIL 24, 1992,
                       AS FURTHER AMENDED ON JULY 1, 1992)

SECTION 1.  PURPOSE; DEFINITIONS.

      The purpose of The Progressive Corporation 1990 Directors' Stock Option
Plan (the "Plan") is to enable The Progressive Corporation (the "Company") to
attract, retain and reward directors of the Company and strengthen the mutuality
of interests between such directors and the Company's shareholders by offering
such directors options to purchase Common Shares of the Company.

      For purposes of the Plan, the following terms shall be defined as set
forth below:

      (a) "Award" means any award of Stock Options under the Plan.

      (b) "Board" means the Board of Directors of the Company.

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

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

      (e) "Disability" means disability as determined under procedures
established by the Committee of the Board administering The Progressive
Corporation 1989 Incentive Plan for purposes of that Plan, or in the absence of
such Committee, the Board.

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

      (g) "Fair Market Value" means, as of any given date, the mean between the
highest and lowest quoted selling price, regular way, 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 Company in good faith.

      (h) "Plan" means The Progressive Corporation 1990 Directors' Stock Option
Plan, as amended from time to time.

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

      (j) "Stock Option" or "Option" means any option to purchase shares of
Stock granted pursuant to Section 3, which options shall be non-qualified stock
options.

      (k) "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.

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      In addition, the terms "Change in Control," "Potential Change in Control"
and "Change in Control Price" shall have meanings set forth, respectively, in
Sections 4(b), (c) and (d) below.

SECTION 2. STOCK SUBJECT TO THE PLAN.

      (a) Aggregate Stock Subject to the Plan. Subject to adjustment as provided
below in Section 2(c), the total number of shares of Stock reserved and
available for Awards under the Plan is 150,000. 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 of 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 subject to such Award shall
again be available for distribution in connection with future Awards under the
Plan as set forth in Section 2(a).

      (c) Adjustment.

            (1) If the Company (i) pays a dividend or makes a distribution in
shares of Stock, (ii) subdivides or splits its outstanding Stock into a greater
number of shares, or (iii) combines its outstanding Stock into a smaller number
of shares, the aggregate number of shares of Stock reserved for issuance
pursuant to the Plan and the number and option price of shares of Stock subject
to outstanding Options granted pursuant to the Plan immediately prior thereto
shall be adjusted so that, assuming that Options had been previously granted for
all of the shares of Stock so reserved, the participants would be entitled to
receive for the same aggregate price that number of shares of Stock which they
would have owned after the happening of any of the events described above had
they exercised all of such Options prior to the happening of such event. An
adjustment made pursuant to this Section 2(c)(1) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision or combination.

            (2) If the Company reclassifies or changes the Stock (except for
splitting or combining, or changing par value, or changing from par value to no
par value, or changing from no par value to par value) or participates in a
consolidation or merger (other than a merger in which the Company is the
surviving corporation and which does not result in any reclassification or
change of theStock except as stated above), the aggregate number of shares of
Stock reserved for issuance pursuant to the Plan and the number and option price
of shares of Stock subject to outstanding Options granted pursuant to the Plan
immediately prior thereto shall be adjusted so that, assuming that Options had
been previously granted for all the shares of Stock so reserved, the
participants would be entitled to receive for the same aggregate price that
number and type of shares of capital stock which they would have owned after the
happening of any of the events described above had they exercised all of such
Options prior to the happening of such event.

      (3) No adjustment pursuant to this Section 2(c) shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
number or price; provided, however, that any adjustments which by reason of this
Section 2(c)(3) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
2(c) shall be made to the nearest cent or to the nearest full share, as the case
may be. Anything in this Section 2(c) to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the option price, in
addition to those required by this Section 2(c), as it in its discretion shall
determine to be advisable in order that any stock dividends or distributions,
subdivisions or splits of shares, distribution of rights to purchase stock or
securities, or a distribution of securities convertible into or exchangeable for
stock hereafter made by the Company to its stockholders shall not be taxable.

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      (4) Whenever an adjustment is made pursuant to this Section 2(c), the
Company shall promptly prepare a notice of such adjustment setting forth the
terms of such adjustment and the date on which such adjustment becomes effective
and shall mail such notice of such adjustment to the participants at their
respective addresses appearing on the records of the Company or at such other
address as any participant may from time to time designate in writing to the
Company.

SECTION 3. STOCK OPTIONS.

      (a) Grant and Eligibility. All directors of the Company who are not full
time employees of the Company are eligible to be granted Awards under the Plan.
Promptly following each annual meeting of the shareholders of the Company on or
after the effective date of the Plan, each person who is then a director of the
Company and not a full time employee of the Company shall receive an Option to
purchase 2,000 shares of Stock.

      (b) Terms and Conditions. Options granted under the Plan shall be
evidenced by option agreements, and shall be subject to the following terms and
conditions:

            (1) Option Price. The option price per share of Stock purchasable
under a Stock Option shall be the Fair Market Value of the Stock on the day of
the annual meeting of shareholders coinciding with the date of grant, or, if the
date of grant does not coincide with the day of an annual meeting of
shareholders, then the option price per share of Stock purchasable under the
Stock Option shall be the Fair Market Value of the Stock on the day of the
annual meeting of shareholders immediately preceding the date of grant.

            (2) Option Term. Subject to Section 3(b)(6), the term of each Stock
Option shall commence as of the date such Stock Option is granted and shall
terminate on the tenth anniversary thereof.

            (3) Exercise. Subject to Section 3(b)(6), each Stock Option shall
become exercisable on the date which is six months and one day after the date on
which such Stock Option is granted and shall thereafter be exercisable during
the remaining term of such Stock Option, as specified in Section 3(b)(2).

            (4) Method of Exercise. When exercisable in accordance with Section
3(b)(3), Stock Options may be exercised, in whole or in part, by giving written
notice of exercise to the Company specifying the number of shares of Stock to be
purchased.

                  Such notice shall be accompanied by payment in full of the
option price of the shares of Stock for which the Option is then being
exercised, in cash or by check or such other instrument as the Company may
accept. Subject to Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder, payment, in full or in part, of the option price may be
made in the form of unrestricted Stock then owned by the participant or Stock
that is issuable upon the exercise of such Option. The value of each such share
of Stock surrendered shall be 100% of 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. 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
representations described in Section 7(a) and such shares have been issued to
him.

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            (5) Non-Transferability of Options. No Stock Option shall be
transferable by the participant. All Stock Options shall be exercisable only by
the participant, by the Participant's estate (as provided in Section 3(b)(6)) or
by the participant's authorized legal representative if the participant is
unable to exercise an Option as a result of the participant's Disability.

            (6) Death of Participant. If any participant dies while holding
unexercised Stock Options, any Stock Option held by such participant at the time
of his or her death may thereafter be exercised, to the extent such Option was
exercisable at the time of death, by the estate of the participant (acting
through its fiduciary), for a period of one year from the date of such death
regardless of the term of the Stock Option remaining at the director's death.

      (c) Buyout Provisions. The Company may at any time buy out, for a payment
in cash or Stock, an Option previously granted, based on such terms and
conditions as the Company shall establish and agree upon with the participant,
provided that no such transaction shall be structured 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 4. CHANGE IN CONTROL PROVISIONS.

      (a) Impact of Event. In the event of: (1) a "Change in Control" as defined
in Section 4(b), or (2) a "Potential Change in Control" as defined in Section
4(c), the value of all outstanding Awards shall be cashed out on the basis of
the "Change in Control Price" as defined in Section 4(d) as of the date such
Change in Control or such Potential Change in Control is determined to have
occurred, provided, however, that the provisions of this Section 4 shall not
apply with respect to Awards granted to any participant which have been held by
such participant for less than six months and one day as of the date that such
Change in Control or Potential Change in Control is determined to have occurred.

      (b) Definition of Change in Control. For purposes of Section 4(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 the beneficial owner of or has the right to acquire an amount of Stock equal
to five percent or more 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 investmentpurposes 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-

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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 4(b)(2); or

            (3) The occurrence of a transaction requiring shareholder approval
for the acquisition of the Company by an entity other than the Company or a
Subsidiary through purchase of 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 had approved such change prior to
either (i) the commencement of any of the events described in Section 4(b)(1),
(2), (3) or 4(c)(1), 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
4(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 4(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 5% 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 4, "Change in
Control Price" means the highest price per share paid in any transaction
reported on the New York Stock Exchange CompositeIndex, or paid or offered in
any bona fide transaction related to a Change in 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).

SECTION 5. AMENDMENTS AND TERMINATION.

            Subject to the following sentence, the Board may at any time, in its
sole discretion, amend, 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. Notwithstanding the foregoing, (a) no such amendment or alteration
shall be made which would make the exemption from Section 16(b) of the Exchange
Act provided by Rule 16b-3 thereunder unavailable to any participant holding an
Award or which would result in any liability on the part of any participant
under Section 16(b) of the Exchange Act, and (b) the provisions of Sections 3(a)
and 3(b)(1) hereof, and any other provisions relating to the eligibility for or
the amount, price or timing of Awards under the Plan, shall not be amended more
than once every six (6) months other than to comport with changes in the Code,
the Employee Retirement Income Security Act of 1974 or the rules thereunder. The
Company shall submit to the shareholders of the Company for their approval any
amendments to the Plan which are required by Section 16 of the Exchange Act, or
the related rules and regulations, to be approved by the shareholders.

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SECTION 6. 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 7. GENERAL PROVISIONS.

      (a) The Company may require each participant acquiring Stock pursuant to
an Option under the Plan (i) to represent and warrant to and agree with the
Company in writing that the participant is acquiring the Stock without a view to
the distribution thereof, and (ii) to make such additional representations,
warranties and agreements with respect to the investment intent of such
participant as the Company may request. The certificates for such shares may
include any legend which the Company deems appropriate to reflect any
restrictions on transfer.

      All shares of Stock or other securities delivered under the Plan shall be
subject to such stop-transfer orders and other restrictions as the Company may
deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, anystock exchange upon which the Stock is
then listed, and any applicable federal or state securities law, and the Company
may cause a legend or legends to be put on any certificates for such shares to
make appropriate reference to such restrictions.

      (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) 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 Company regarding the payment of, any
federal, state or local taxes of any kind required by law to be withheld with
respect to such amount. Subject to Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder, withholding obligations may be settled
with unrestricted Stock then owned by the participant or Stock that is issuable
upon the exercise of the Option which gives rise to the withholding requirement.
The obligations of the Company under the Plan shall be conditional on such
payment or arrangements and the Company shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the participant.

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

      (e) All agreements entered into with participants pursuant to the Plan
shall be subject to the Plan.

SECTION 8. EFFECTIVE DATE OF PLAN.

            The Plan was adopted by the Board on April 27, 1990, and approved by
shareholders on April 19, 1991. This amendment and restatement of the Plan shall
be effective as of April 24, 1992.

SECTION 9. TERM OF PLAN.

            No Award shall be granted pursuant to the Plan on or after April 27,
2000, but Awards granted prior to such date may extend beyond that date.

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                        DIRECTORS' STOCK OPTION AGREEMENT

_________This Agreement (the "Agreement") is made as of the _____ day of
______________, ____ between The Progressive Corporation, an Ohio corporation
(the "Company"), and _____________ (the "Optionee"). The Company hereby grants
Optionee an option (the "Option") to purchase Two Thousand (2000) Common Shares,
$1.00 par value (the "Common Shares"), of the Company for a purchase price (the
"Option Price") of ________________ ($________) per share. The Option has been
granted pursuant to The Progressive Corporation 1990 Directors' Stock Option
Plan (the "Plan") and shall include and be subject to all provisions of the
Plan, which are hereby incorporated herein by reference, and shall be subject to
the following provisions of this Agreement:

      1. Term. The Option shall be exercisable, in whole or part, on and after
______________, _____ but not after 5:00 o'clock p.m., Cleveland time, on
_______________________, _______.

      2. Method of Exercise. The Option shall be exercisable from time to time
by written notice (in substantially the form attached as Exhibit A) to the
Company which shall:

(a) state that the Option is thereby being exercised, the number of Common
Shares with respect to which the Option is being exercised, each person in whose
name any certificates for the Common Shares should be registered and his or her
address and social security number;

(b) be signed by the person or persons entitled to exercise the Option and, if
the Option is being exercised by anyone other than the Optionee, be accompanied
by proof satisfactory to counsel for the Company of the right of such person or
persons to exercise the Option under the Plan and all applicable laws and
regulations; and

(c) be accompanied by such representations, warranties or agreements with
respect to the investment intent of such person or persons exercising the Option
as the Company may request in form and substance satisfactory to counsel for the
Company.

      3. Payment of Price. Upon exercise of the Option, the Company shall
deliver a certificate or certificates for such Common Shares to the specified
person or persons at the specified time upon receipt of the full purchase price
for such Common Shares: (i) by certified or bank cashier's check, or (ii) by
delivery of Common Shares with a Fair Market Value equal to the Option Price, or
(iii) by any other method of payment or combination thereof authorized by the
Plan.

      4. Transferability. The Option shall not be transferable by the Optionee.
The Option shall be exercisable (subject to any other applicable restrictions on
exercise) only by the Optionee for his own account, except in the event of the
death or disability of the Optionee, in either of which events the Option shall
be exercisable (subject to any other applicable restrictions on exercise) only
by the Optionee's estate(acting through its fiduciary) or by the Optionee's duly
authorized legal representative, respectively.

      5. Restrictions on Exercise. The Option is subject to all restrictions in
this Agreement or in the Plan. As a condition of any exercise of the Option, the
Company may require the Optionee or his successor to make any representation and
warranty to comply with any applicable law or regulation or to confirm any
factual matters reasonably requested by counsel for the Company.

      6. Taxes. The Optionee hereby agrees to pay to the Company, in cash or
unrestricted Stock or by any other method authorized under the Plan, any
federal, state or local taxes of any kind required by law to be withheld with
respect to the Option granted hereunder or its exercise. If the Optionee does
not make

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such payment to the Company, the Company shall have the right to deduct from any
payment of any kind otherwise due to the Optionee from the Company, any federal,
state or local taxes of any kind required by law to be withheld with respect to
the Option or the Common Shares to be purchased by the Optionee under this
Agreement. The Option shall not be treated as an incentive stock option under
Section 422 or any successor Section thereto of the Internal Revenue Code of
1986, as amended.

      7. Definitions. Unless otherwise defined in this Agreement, capitalized
terms will have the same meanings given them in the Plan.

                                                     THE PROGRESSIVE CORPORATION

DATE OF GRANT: __________                            By:_____________________

            ACCEPTANCE OF AGREEMENT

____________The Optionee hereby: (a) acknowledges receiving a copy of the Plan
Description relating to the Plan, and represents that he/she is familiar with
all provisions of the Plan; (b) accepts this Agreement and the Option granted to
him/her under this Agreement subject to all provisions of the Plan and this
Agreement; and (c) agrees to accept as binding, conclusive and final all
decisions or interpretations of the Company.

Date: ____________________                                  ____________________
                                                            Optionee

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                                    EXHIBIT A

                            Exercise of Stock Option

The Progressive Corporation
6000 Parkland Boulevard
Mayfield Heights, Ohio 44124

Gentlemen:

            The undersigned Optionee hereby exercises the Option granted to
him/her pursuant to the Directors' Stock Option Agreement dated ____________,
19__ between The Progressive Corporation and the Optionee with respect to _____
Common Shares, covered by said Option, and tenders herewith $____________ in
payment of the purchase price thereof by delivery of
_____________________________________________________.

            The name and registered address on such certificate should be:

            _________________________________

            _________________________________

            _________________________________

The Optionee's social security number is: ___________________

                                                     ________________________
                                                     Optionee

Dated: __________________<PAGE>
Exhibit No. 10(U)

                           THE PROGRESSIVE CORPORATION
                        1998 DIRECTORS' STOCK OPTION PLAN

SECTION 1. PURPOSE; DEFINITIONS.

      The purposes of The Progressive Corporation 1998 Directors' Stock Option
Plan (the "Plan") are to enable The Progressive Corporation (the "Company") to
attract, retain and reward directors of the Company and to strengthen the
mutuality of interests between such directors and the Company's shareholders by
offering such directors options to purchase Common Shares of the Company.

For purposes of the Plan, the following terms shall be defined as set forth
below:

      (a) "Award" means any award of Stock Options under the Plan.

      (b) "Board" means the Board of Directors of the Company.

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

      (d) "Committee" means the Committee referred to in Section 2 hereof.

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

      (f) "Disability" means disability as determined under procedures
  established by the Committee for purposes of the Plan, or in the absence of
  the Committee, the Board.

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

      (h) "Fair Market Value" means, as of any given date, the mean between the
  highest and lowest quoted selling price, regular way, 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.

      (i) "Non-Qualified Stock Option" means any Stock Option that is not an
  incentive stock option, within the meaning of Section 422 of the Code or any
  successor section thereto.
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      (j) "Option Term" has the meaning given to such term in Section 4(b)(2).

      (k) "Plan" means The Progressive Corporation 1998 Directors' Stock Option
  Plan, as amended from time to time.
      (l) "Stock" means the Common Shares, $1.00 par value per share, of the
  Company.
      (m) "Stock Option" or "Option" means any option to purchase shares of
  Stock granted pursuant to Section 4.

      (n) "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.

      In addition, the terms "Change in Control," "Potential Change in Control"
and "Change in Control Price" shall have meanings set forth, respectively, in
Sections 5(b), (c) and (d) below.

SECTION 2. ADMINISTRATION.

      The Plan shall be administered by a Committee of not less than three
directors of the Company, all of whom shall be directors who are "Non-Employee
Directors", as defined in Section 16 of the Exchange Act or the rules and
regulations promulgated thereunder. Such directors shall be appointed by the
Board and shall serve as the Committee at the 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 and authority to interpret and
administer the Plan and, subject to Section 4(a) below, full authority to select
the individuals to whom Awards will be granted, and to determine the number of
shares of Stock that may be purchased upon exercise of Awards granted under the
Plan, 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 agreements which will be entered into with
participants.

      The Committee shall have the authority to adopt, alter and repeal such
rules, guidelines and practices governing the Plan as it shall, from time to
time, deem advisable; to interpret the terms and provisions of the Plan and any
Award issued under the Plan (and any agreements 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.
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      Any interpretation and administration of the Plan by the Committee, and
all actions and determinations of the Committee in connection with the Plan,
shall be final, binding and conclusive on the Company, its shareholders, all
participants in the Plan, their respective legal representatives, successors and
assigns, and upon 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 200,000. 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 of Stock. If any Award
      granted hereunder is forfeited or an Award otherwise terminates or expires
      without the issuance of Stock, the unissued 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).

            (c) Adjustment.

                  (1) If the Company (i) pays a dividend or makes a distribution
            in shares of Stock, (ii) subdivides or splits its outstanding Stock
            into a greater number of shares, or (iii) combines its outstanding
            Stock into a smaller number of shares, the aggregate number of
            shares of Stock reserved for issuance pursuant to the Plan and the
            number and option price of shares of Stock subject to outstanding
            Options granted pursuant to the Plan immediately prior thereto shall
            be adjusted so that, assuming that Options had been previously
            granted for all of the shares of Stock so reserved, the participants
            would be entitled to receive for the same aggregate price that
            number of shares of Stock which they would have owned after the
            happening of any of the events described above had they exercised
            all of such Options prior to the happening of such event. An
            adjustment made pursuant to this Section 3(c)(1) shall become
            effective immediately after the record date in the case of a
            dividend or distribution and shall become effective immediately
            after the effective date in the case of a subdivision or
            combination.

                  (2) If the Company reclassifies or changes the Stock (except
            for splitting or combining, or changing par value, or changing from
            par value to no par value, or changing from no par value to par
            value) or participates in a consolidation or merger (other than a
            merger in which the Company is the surviving corporation and which
            does not result in any reclassification of or change in the Stock
            except as stated above), the aggregate number of shares of
<PAGE>
            Stock reserved for issuance pursuant to the Plan and the number and
            option price of shares of Stock subject to outstanding
            Options granted pursuant to the Plan immediately prior thereto shall
            be adjusted so that, assuming that Options had been previously
            granted for all the shares of Stock so reserved, the participants
            would be entitled to receive for the same aggregate price that
            number and type of shares of capital stock which they would have
            owned after the happening of any of the events described above had
            they exercised all of such Options prior to the happening of such
            event.

                  (3) No adjustment pursuant to this Section 3(c) shall be
            required unless such adjustment would require an increase or
            decrease of at least 1% in such number or price; provided, however,
            that any adjustments which by reason of this Section 3(c)(3) are not
            required to be made shall be carried forward and taken into account
            in any subsequent adjustment. All calculations under this Section
            3(c) shall be made to the nearest cent or to the nearest full share,
            as the case may be. Anything in this Section 3(c) to the contrary
            notwithstanding, the Company shall be entitled to make such
            reductions in the option price, in addition to those required by
            this Section 3(c), as it in its discretion shall determine to be
            advisable in order that any stock dividends or distributions,
            subdivisions or splits of shares, distribution of rights to purchase
            stock or securities, or a distribution of securities convertible
            into or exchangeable for stock hereafter made by the Company to its
            stockholders shall not be taxable.

SECTION 4. STOCK OPTIONS.

            (a) Grant. All directors of the Company who are not full time
      employees of the Company or any of its Subsidiaries are eligible to be
      granted Stock Options under the Plan. The Committee shall determine the
      individual directors 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 granted hereunder and the other terms and conditions of the
      Stock Options in addition to those set forth in Sections 4(b). 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 will be
      Non-Qualified Stock Options.

              (b) Terms and Conditions. Options granted under the Plan shall be
      evidenced by Option agreements substantially in the form of Exhibit A
      hereto (or such other form as the Committee may approve), 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 Price. The option price per share of Stock
            purchasable under a Stock Option shall be equal to the Fair Market
            Value of the Stock on the date the Option is granted.
<PAGE>
                  (2) Option Term. The term of each Stock Option shall be
            determined by the Committee and may not exceed ten (10) years from
            the date the Option is granted ("Option Term").

                  (3) Exercise. Stock Options shall be exercisable at such time
            or times and subject to such terms and conditions as shall be
            determined by the Committee at or after grant; provided, however,
            that, unless otherwise provided herein or determined by the
            Committee at or after grant, no Stock Option shall be exercisable
            prior 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, if
            applicable, the six month and one day holding period set forth in
            Section 4(b)(3), a Stock Option may be exercised, in whole or in
            part, at any time during the related Option Term, by giving 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 price of the shares of Stock for which the Option is being
            exercised, in cash or by check or such other instrument as the
            Committee may accept. Unless otherwise determined by the Committee,
            in its sole discretion, at or after grant, payment, in full or in
            part, of the option price may be made in the form of unrestricted
            Stock then owned by the participant or Stock that is part of the
            Stock Option being exercised. The value of each share of such Stock
            so surrendered or withheld shall be 100% of 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. 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 8(a) and such shares have been issued to such
            participant.

                  (5) Non-Transferability of Options. Stock Options shall not be
            transferable by the participant, and all Stock Options shall be
            exercisable during the participant's lifetime only by the
            participant or, subject to Section 4(b)(7), by the participant's
            authorized legal representative if the participant is unable to
            exercise an Option as a result of the participant's Disability.
<PAGE>
                  (6) Termination by Death. If any participant dies while
            holding unexercised Stock Options, any Stock Option held by such
            participant at the time of his or her death 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, 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, regardless of the term of the Stock Option
            remaining at the date of the participant's death. The balance of the
            Stock Option shall be forfeited.

                  (7) Termination by Reason of Disability. If a participant is
            unable to serve as a director by reason of Disability, any Stock
            Option then held by such participant may thereafter be exercised, to
            the extent such Option was exercisable at the inception of such
            Disability or would have become exercisable within one year
            thereafter had the participant continued to fulfill all conditions
            of the Option during such period, 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 his or
            her Disability, for a period of one year (or such other period as
            the Committee may specify at or after grant) from the date of the
            inception of such Disability; provided, however, that in no event
            may any such Option be exercised prior to six months and one day
            from the date of grant; 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 at the time of his or her
            death shall thereafter be exercisable by the estate of the
            participant (acting through its fiduciary) to the same extent to
            which it was exercisable immediately prior to the time of death for
            a period of one year ( or such other period as the Committee may
            specify at or after grant) from the date of the inception of such
            Disability. The balance of the Stock Option shall be forfeited.

            (c) Buyout Provisions. The Committee may at any time buy out, for a
      payment in cash or Stock, an 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 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 5. CHANGE IN CONTROL PROVISIONS.

            (a) Impact of Event. In the event of: (1) a "Change in Control" as
      defined in Section 5(b), or (2) a "Potential Change in Control" as defined
      in Section 5(c), the value of all outstanding Awards shall be cashed out
      on the basis of the "Change in
<PAGE>
      Control Price" as defined in Section 5(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 this Section 5,
      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 twenty percent (20%) 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 the beneficial owner of or has the right to acquire an amount of
            Stock equal to five percent (5%) or more 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 that 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 5(b)(2); or

                  (3) The occurrence of a transaction requiring shareholder
            approval for the acquisition of the Company by an entity other than
            the Company or a Subsidiary through purchase of assets, by merger or
            otherwise;
<PAGE>
      provided, however, a change in control shall not be deemed to be a Change
      in Control for purposes of the Plan if the Board had approved such change
      prior to either (i) the occurrence of any of the events described in
      Section 5(b)(1), (2), (3) or 5(c)(1), or (ii) the commencement by any
      person other than the Company or a Subsidiary of a tender offer for Stock.

            (c) Definition of Potential Change in Control. For purposes of this
      Section 5, 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 5(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 (5%) 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 5, "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
      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).

SECTION 6. AMENDMENTS AND TERMINATION.

      Subject to the following sentence, the Board may at any time, in its sole
discretion, amend, alter or discontinue the Plan, or amend the terms of any
outstanding Stock Option granted under 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. Notwithstanding the foregoing, no such amendment or alteration shall be
made which would make the exemption from Section 16(b) of the Exchange Act
provided by Rule 16b-3 thereunder unavailable to any participant holding an
Award or which would result in any liability on the part of any participant
under Section 16(b) of the Exchange Act.
<PAGE>
SECTION 7. 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 8.  GENERAL PROVISIONS.

            (a) The Company may require each participant acquiring Stock
      pursuant to an Option under the Plan (i) to represent and warrant to and
      agree with the Company in writing that the participant is acquiring the
      Stock for investment and without a view to the distribution thereof, and
      (ii) to make such additional representations, warranties and agreements
      with respect to the investment intent of such participant as the Company
      may request. The certificates for such shares may include any legend which
      the Company deems appropriate to reflect any restrictions on transfer.

            All shares of Stock or other securities delivered under the Plan
      shall be subject to such stop-transfer orders and other restrictions as
      the Company 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 law, and the Company may cause a legend or legends to be put on
      any certificates for such shares to make appropriate reference to such
      restrictions.

            (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) 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 Company
      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 Section 16 of the Exchange Act and the rules and regulations
      promulgated thereunder, withholding obligations may be settled with
      unrestricted Stock then owned by the participant or Stock that is issuable
      upon the exercise of the Option which gives rise to the withholding
      requirement. The obligations of the Company under the Plan shall be
      conditional on such payment or arrangements and the Company shall, to the
      extent permitted by law, have the right to deduct any such taxes or other
      items from any payment of any kind otherwise due to the participant.
<PAGE>
            (d) The Plan, all Awards made and actions taken thereunder and any
      agreements relating thereto shall be governed by and construed in
      accordance with the laws of the State of Ohio.

            (e) All agreements entered into with participants pursuant to the
      Plan shall be subject to the Plan.

            (f) The provision of Awards need not be the same with respect to
      each participant.

SECTION 9. EFFECTIVE DATE OF PLAN.

      The Plan was adopted by the Board on February 6, 1998, subject to approval
by shareholders of the Company in accordance with applicable law. The Plan will
become effective on the date of such shareholder approval.

SECTION 10. TERM OF PLAN.

      No Award shall be granted pursuant to the Plan on or after April 24, 2008,
but Awards granted prior to such date may extend beyond that date.
<PAGE>
                                                                       EXHIBIT A

                        DIRECTORS' STOCK OPTION AGREEMENT

This Agreement (the "Agreement") is made as of the _____ day of ______________,
____ between The Progressive Corporation, an Ohio corporation (the "Company"),
and _____________ (the "Optionee"). The Company hereby grants Optionee an option
(the "Option") to purchase _____________ Common Shares, $1.00 par value (the
"Common Shares"), of the Company for a purchase price of ____________
($________) per share (the "Option Price"). The Option has been granted pursuant
to The Progressive Corporation 1998 Directors' Stock Option Plan (the "Plan")
and shall include and be subject to all provisions of the Plan, which are hereby
incorporated herein by reference, and shall be subject to the following
provisions of this Agreement:

      1. Term. The Option shall be exercisable, in whole or part, on and after
______________, _____ but not after 5:00 o'clock p.m., Cleveland time, on
_______________________, _______.

      2. Method of Exercise. The Option shall be exercisable from time to time
by written notice (in form acceptable to the Company) which shall:

      (a) state that the Option is thereby being exercised, the number of Common
      Shares with respect to which the Option is being exercised, each person in
      whose name any certificates for the Common Shares should be registered and
      his or her address and social security number;

      (b) be signed by the person or persons entitled to exercise the Option
      and, if the Option is being exercised by anyone other than the Optionee,
      be accompanied by proof satisfactory to counsel for the Company of the
      right of such person or persons to exercise the Option under the Plan and
      all applicable laws and regulations; and

      (c) be accompanied by such representations, warranties or agreements with
      respect to the investment intent of such person or persons exercising the
      Option as the Company may request, in form and substance satisfactory to
      counsel for the Company.

      3. Payment of Price. Upon exercise of the Option, the Company shall
deliver a certificate or certificates for such Common Shares to the specified
person or persons at the specified time upon receipt of the full purchase price
for such Common Shares: (i) by certified or bank cashier's check, or (ii) by
delivery of unrestricted Stock with a Fair Market Value equal to the Option
Price, or (iii) by any other method of payment or combination thereof authorized
by the Plan.

      4. Transferability. The Option shall not be transferable by the Optionee.
The Option shall be exercisable (subject to any other applicable restrictions on
exercise) only
<PAGE>
by the Optionee for his or her own account, except in the event of the death or
Disability of the Optionee, in either of which events the Option shall be
exercisable (subject to any other applicable restrictions on exercise) only by
the Optionee's estate (acting through its fiduciary) or, if the Optionee is
unable to exercise the Option as a result of such Disability, by the Optionee's
duly authorized legal representative, respectively.

      5. Restrictions on Exercise. The Option is subject to all restrictions set
forth in this Agreement or in the Plan. As a condition of any exercise of the
Option, the Company may require the Optionee or his successor to make any
representation and warranty to comply with any applicable law or regulation or
to confirm any factual matters reasonably requested by counsel for the Company.

      6. Taxes. The Optionee hereby agrees to pay to the Company, in cash or
unrestricted Stock or by any other method authorized under the Plan, any
federal, state or local taxes or other items of any kind required by law to be
withheld with respect to the Option granted hereunder or its exercise. If the
Optionee does not make such payment to the Company, the Company shall have the
right to deduct from any payment of any kind otherwise due to the Optionee from
the Company, any federal, state or local taxes or other items of any kind
required by law to be withheld with respect to the Option, its exercise or the
Common Shares to be purchased by the Optionee under this Agreement. The Option
shall not be treated as an incentive stock option under Section 422 or any
successor Section thereto of the Internal Revenue Code of 1986, as amended.

      7. Definitions. Unless otherwise defined in this Agreement, capitalized
terms will have the same meanings given them in the Plan.

            THE PROGRESSIVE CORPORATION

DATE OF GRANT: __________
      By:_____________________________________________

                             ACCEPTANCE OF AGREEMENT

             The Optionee hereby: (a) acknowledges receiving a copy of the Plan
Description relating to the Plan, and represents that he/she is familiar with
all provisions of the Plan; (b) accepts this Agreement and the Option granted to
him/her under this Agreement subject to all provisions of the Plan and this
Agreement; and (c) agrees to accept as binding, conclusive and final all
decisions or interpretations of the Company.

Date: ____________________
      ________________________________________

                                    Optionee

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