Document:

Exhibit 10(A)

 

Exhibit No. 10(A)

THE PROGRESSIVE CORPORATION

2006 GAINSHARING PLAN

	1.	 	The Progressive Corporation and its subsidiaries (collectively “Progressive” or the
“Company”) have adopted The Progressive Corporation 2006 Gainsharing Plan (the “Plan”) as part
of their overall compensation program. The Plan is performance-based and is administered
under the direction of the Compensation Committee of the Board of Directors of The Progressive
Corporation (the “Committee”).

	2.	 	Plan participants for each Plan year shall be selected by or under the direction of the
Committee from those officers and regular employees of Progressive who are assigned primarily
to the Core Business (as defined below), another operating business unit or a corporate
support function. The gainsharing opportunity, if any, for those executive officers who
participate in The Progressive Corporation 2004 Executive Bonus Plan (“Executive Plan”) will
be provided by and be a component of that plan, although participants in the Executive Plan
may also participate in this Plan if and to the extent determined by the Committee. Plan
years will coincide with Progressive’s fiscal years.

	3.	 	Annual Gainsharing Payments under the Plan will be determined by application of the following
formula:
	 
	 	 	   Annual Gainsharing Payment = Paid Earnings x Target Percentage x Performance Factor

	4.	 	Paid Earnings for any Plan year shall mean and include: (a) regular, used Earned Time
Benefit, sick, holiday, funeral and overtime pay received by the participant during the Plan
year for work or services performed during the Plan year as an officer or employee of
Progressive, and (b) retroactive payments of any of the foregoing items relating to the same
Plan year.
	 
	 	 	For purposes of the Plan, Paid Earnings shall not include any short-term or long-term
disability payments made to the participant, the earnings replacement component of any
workers’ compensation award, payments from the discretionary cash fund or any other bonus or
incentive compensation awards and unused Earned Time Benefit.
	 
	 	 	Notwithstanding the foregoing, if at the end of the 24th pay period of a Plan year,
any Plan participant’s then current annual salary exceeds his or her salary range maximum plus
$105, then for purposes of computing his or her Annual Gainsharing Payment under the Plan, his
or her Paid Earnings (including regular, used Earned Time Benefit, sick, holiday and funeral
pay) for any bi-weekly pay period during the Plan year will not exceed 1/26th of
his or her annual salary range maximum (as in effect as of the end of the applicable pay
period). Without regard to that limitation, such participant’s Paid Earnings for the full
Plan year will include the full amount of the following items, if any, received by such
participant for that Plan year: (a) overtime pay, and (b) retroactive payments of regular,
used Earned Time Benefit, sick, holiday, overtime and funeral pay.

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	5.	 	Target Percentages vary by position. Target Percentages for Plan participants typically are
as follows:

	 	 	 	 	 
	POSITION 	 	TARGET %
	 
	Senior Executives, Executive Level Managers and Business Leaders
	 	 	60-150	%
	Directors of Large Functional Areas
	 	 	35-60	%
	Senior Managers
	 	 	20-35	%
	Middle Managers
	 	 	15-20	%
	Senior Professionals and Entry Level Managers
	 	 	9 - 20	%
	Administrative Support and Entry Level Professionals
	 	 	0 - 8	%

	 	 	Target Percentages will be established within the above ranges by, and may be changed with the
approval of, the following officers of The Progressive Corporation (collectively, the
“Designated Executives”): (a) the Chief Executive Officer, and (b) either the Chief Human
Resource Officer or the Chief Financial Officer. Target Percentages also may be changed from
year to year by the Designated Executives.

	6.	 	The Performance Factor

	 	A.	 	General

	 	 	 	The Performance Factor shall consist of one or more Profitability and Growth
Components, as described below (“Performance Components”). The Performance
Components may be weighted to reflect the nature of the individual participant’s
assigned responsibilities. The weighting factors may differ among participants and
will be determined, and may be changed from year to year, by or under the direction
of the Committee.

	 	B.	 	Profitability and Growth Components

	 	 	 	The Profitability and Growth Components measure the overall operating performance of
Progressive’s Core Business (including the Drive Business Segment, the Direct
Business Segment and the Commercial Auto Business Segment, but excluding Midland
Financial Group, Inc. and other businesses in

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	 	 	 	run-off), or a designated Business Segment, for the Plan year for which an Annual
Gainsharing Payment is to be made. For purposes of computing a Performance Score
for these Components, operating performance results are measured by one or more
Performance Matrices, as established by or under the direction of the Committee for
the Plan year, which assign a Performance Score to various combinations of
profitability and growth outcomes. Except as provided below, under the Performance
Matrices, profitability is measured by the GAAP Combined Ratio and growth is based
on the year-to-year change in Net Earned Premiums.
	 
	 	 	 	For 2006, and for each Plan year thereafter until otherwise determined by the
Committee, separate Performance Scores will be determined, and separate Gainsharing
Matrices will be used, for the Drive Business Segment, the Direct Business Segment
and the Commercial Auto Business Segment. For purposes hereof, the Drive Business
Segment includes Drive Auto, including Strategic Alliances Drive Auto and Drive
Special Lines. The Direct Business Segment includes Auto and Special Lines business
produced by phone or over the Internet. For purposes of this Plan, the results of
the Midland Financial Group, Inc. and other businesses in run-off are excluded from
the Drive, Direct and Commercial Auto Business Segments and, thus, from Core
Business results. Net operating gains/losses from other Core products, if any, will
be apportioned among the Drive, Direct and Commercial Auto Business Segments in
accordance with the respective amount(s) of Net Earned Premiums generated by such
products in each such Business Segment and the apportioned gains/losses will be
included in the calculation of the Combined Ratio.
	 
	 	 	 	The GAAP Combined Ratio will be separately determined for each of the Drive Business
Segment, the Direct Business Segment and the Commercial Auto Business Segment. The
GAAP Combined Ratio of each such Business Segment will then be matched with growth
in Net Earned Premiums for such Business Segment using the applicable Gainsharing
Matrix, to determine a Performance Score (“Standard Performance Computation”).
	 
	 	 	 	For 2006 and for each Plan year thereafter until otherwise determined by the
Committee, the operating performance of the Direct Business Segment will be measured
in part by the Standard Performance Computation and in part by the modified
profitability and growth criteria described below (“Modified Performance
Computation”).
	 
	 	 	 	For purposes of the Modified Performance Computation:

	 	(i)	 	Profitability is measured by the Lifetime Combined Ratio for
new Auto and Special Lines policies written by the Direct Business Segment
during the Plan year, as compared to a range of possible outcomes set forth in
a Performance Matrix approved by or under the direction of the

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	 	 	 	Committee. The Lifetime Combined Ratio, which projects the profitability over
time of new policies written by the Direct Business during the Plan Year, will
be calculated using the GAAP new and renewal Combined Ratios for the Plan Year
for all Direct Business Segment earned premium, weighted by the expected
new/renewal Lifetime Earned Premium mix, determined by formula approved by or
under the direction of the Committee.
	 
	 	(ii)	 	Growth is measured by the year-to-year change in Lifetime
Earned Premium (as defined below) for new business written by the Direct
Business Segment. Lifetime Earned Premium, which incorporates a measure of
customer retention into the growth computation, is the amount of earned premium
that the Company is projected to generate over time with respect to new
policies written by the Direct Business Segment during a given Plan Year
(including any subsequent renewals thereof), as determined by a formula, to be
approved by or under the direction of the Committee, that is developed
utilizing a combination of historical experience data and statistical analysis.

	 	C.	 	Component Weighting

	 	 	 	For most participants, the Performance Factor will be determined solely by the
performance results for the Core Business, consisting of the Drive, Direct and
Commercial Auto Business Segments. The Performance Score for the Drive and
Commercial Auto Business Segments will be separately determined by application of
the Standard Performance Computation. The Performance Score for the Direct Business
Segment will be based 50% on the Standard Performance Computation and 50% on the
Modified Performance Computation. The resulting Performance Scores for each of the
Drive, Direct and Commercial Auto Business Segments will then be multiplied by a
weighting factor (based on the percentage of Net Earned Premiums generated by each
such Business Segment during the Plan year), the weighted Performance Scores will be
combined and the sum of the weighted Performance Scores will be the Performance
Score for the Core Business.
	 
	 	 	 	As noted above, for most participants, the Performance Factor will be the
Performance Score for the Core Business. For certain employees designated by or
under the direction of the Committee, however, the Performance Factor will be based
on the Performance Scores for both the Core Business, as a whole, and their assigned
Business Segment. Generally, for these employees, the Performance Factor will be
based 50% on the Core Business Performance Score and 50% on their assigned Business
Segment’s Performance Score. For example, for the members of the Direct Business
Leadership Group (as defined below), the Performance Factor will be based 50% on the
Core Business Performance Score and 50% on the Performance Score for the Direct
Business Segment.

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	 	 	 	The Direct Business Leadership Group includes the Direct Business Leader, the IT
Director for the Direct Business Segment and all other employees assigned primarily
to the Direct Business Segment who are eligible to participate in the Company’s
equity incentive plans and have been designated by the Direct Business Leader.
	 
	 	 	 	With respect to each of the IT Business Leaders selected by the Designated
Executives, the Performance Factor will be based on both the Core Business
Performance Score and the Business Segment Performance Score of his or her assigned
Business Segment, in such ratio or otherwise weighted as shall be determined by or
under the direction of the Committee.
	 
	 	 	 	The Performance Score for each Performance Component will be multiplied by the
assigned weighting factor to produce a Weighted Performance Score. The sum of the
Weighted Performance Scores equals the Performance Factor. The final Performance
Factor can vary from 0 to 2.0, based on actual performance versus the
pre-established objectives. The Performance Factor cannot exceed 2.0, regardless
of results.

	7.	 	Subject to Paragraph 9 below, no later than December 31 of each Plan year, each participant
will receive an initial payment in respect of his or her Annual Gainsharing Payment for that
Plan year equal to 75% of an amount calculated on the basis of Paid Earnings for the first 24
pay periods of the Plan year, estimated earnings for the remainder of the Plan year,
performance data through the first 11 months of the Plan year (estimated, if necessary) and
forecasted operating results for the remainder of the Plan year. No later than February 15 of
the following year, each participant will receive the balance of his or her Annual Gainsharing
Payment, if any, for such Plan year, based on his or her Paid Earnings and performance data
for the entire Plan year.
	 
	 	 	Any Plan participant who is then eligible to participate in The Progressive Corporation
Executive Deferred Compensation Plan (“Deferral Plan”) may elect to defer all or a portion of
the Annual Gainsharing Payment otherwise payable to him/her under this Plan, subject to and in
accordance with the terms of the Deferral Plan.

	8.	 	If, for any Plan year, an employee has been selected to participate in both the Plan and
another incentive plan offered by the Company, then with respect to such employee, the
Gainsharing formula set forth in Paragraph 3 hereof shall be appropriately adjusted by
applying a weighting factor to reflect the proportion of the employee’s total annual incentive
opportunity that is being provided by the Plan. The Committee shall have full authority to
determine the incentive plan or plans in which any employee will participate during any plan
year and, if an employee is selected to participate in more than one plan, the weighting
factor that will apply to each such plan.
	 
	9.	 	Unless otherwise determined by the Committee, and except as expressly provided herein, in
order to be entitled to receive an Annual Gainsharing Payment for any Plan

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	 	 	year, the participant must be assigned to the Core Business or a participating business unit
or support function, and be an active employee of the Company, on November 30 of the Plan year (“Qualification Date”). Individuals who are hired on or after
December 1 of any Plan year are not entitled to an Annual Gainsharing Payment for that Plan
year.
	 
	 	 	Any participant who is on a leave of absence covered by the Family and Medical Leave Act of
1993, personal leave of absence with the approval of the Company, military leave or short or
long-term disability on the Qualification Date with respect to any Plan year will be entitled
to receive an Annual Gainsharing Payment for such Plan year, calculated as provided in
Paragraphs 3 through 6 above and based on the amount of Paid Earnings received by such
participant during the Plan year.
	 
	 	 	Annual Gainsharing will be net of any legally required deductions for federal, state and local
taxes and other items.

	10.	 	The right to any Annual Gainsharing Payment hereunder may not be sold, transferred, assigned
or encumbered by any participant. Nothing herein shall prevent any participant’s interest
hereunder from being subject to involuntary attachment, levy or other legal process.

	11.	 	The Plan shall be administered by or under the direction of the Committee. The Committee
shall have the authority to adopt, amend, revise and repeal such rules, guidelines, procedures
and practices governing the Plan as it shall, from time to time, in its sole discretion, deem
advisable.
	 
	 	 	The Committee shall have full authority to determine the manner in which the Plan will
operate, to interpret the provisions of the Plan and to make all determinations hereunder.
All such interpretations and determinations shall be final and binding on Progressive, all
Plan participants and all other parties. No such interpretation or determination shall be
relied on as a precedent for any similar action or decision.
	 
	 	 	Unless otherwise determined by the Committee, all of the authority of the Committee hereunder
(including, without limitation, the authority to administer the Plan, select the persons
entitled to participate herein, interpret the provisions thereof, waive any of the
requirements specified herein and make determinations hereunder and to select, approve,
establish, change or modify Performance Components and their respective formulae, weighting
factors, performance targets and Target Percentages) may be exercised by the Designated
Executives. In the event of a dispute or conflict, the determination of the Committee will
govern.
	 
	12.	 	The Plan may be terminated, amended or revised, in whole or in part, at any time and from
time to time by the Committee, in its sole discretion.
	 
	13.	 	The Plan will be unfunded and all payments due under the Plan shall be made from
Progressive’s general assets.

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	14.	 	Nothing in the Plan shall be construed as conferring upon any person the right to remain a
participant in the Plan or to remain employed by Progressive, nor shall the Plan limit
Progressive’s right to discipline or discharge any of its officers or employees or change any
of their job titles, duties or compensation.
	 
	15.	 	Progressive shall have the unrestricted right to set off against or recover out of any Annual
Gainsharing Payment or other sums owed to any participant under the Plan any amounts owed by
such participant to Progressive.
	 
	16.	 	This Plan supersedes all prior plans, agreements, understandings and arrangements regarding
bonuses or other cash incentive compensation payable to participants by or due from
Progressive. Without limiting the generality of the foregoing, this Plan supersedes and
replaces The Progressive Corporation 2005 Gainsharing Plan (the “Prior Plan”), which is and
shall be deemed to be terminated as of December 31, 2005 (the “Termination Date”); provided,
that any bonuses or other sums earned and payable under the Prior Plan with respect to any
Plan year ended on or prior to the Termination Date shall be unaffected by such termination
and shall be paid to the appropriate participants when and as provided thereunder.
	 
	17.	 	This Plan is adopted, and is to be effective, as of January 1, 2006, which is the
commencement of Progressive’s 2006 fiscal year. This Plan shall be effective for the 2006
Plan year (which coincides with Progressive’s 2006 fiscal year) and for each Plan year
thereafter unless and until terminated by the Committee.
	 
	18.	 	This Plan shall be interpreted and construed in accordance with the laws of the State of
Ohio.

7Exhibit 10(B)

 

Exhibit No. 10(B)

THE PROGRESSIVE CORPORATION

2006 INFORMATION TECHNOLOGY INCENTIVE PLAN

1. The Progressive Corporation and its subsidiaries (“Progressive” or the “Company”) have
adopted The Progressive Corporation 2006 Information Technology Incentive Plan (the “Plan”) as part
of their overall compensation program for employees assigned to the Company’s Information
Technology Organization (“IT Organization”).

2. There is a strong correlation between computer systems availability and the economic
performance of the Company. All 3 sales channels, customer service and claims handling are
dependent on electronic systems. When systems are down, Progressive incurs lost productivity costs
and, in some cases, may forfeit revenue opportunities. The Plan is designed to incent employees
within the IT Organization to find creative ways to eliminate scheduled and unscheduled system
downtime, and shift the risk associated with technology changes away from times when downtime is
most costly to the business.

3. A significant aspect of the Plan is that it encourages continuous improvement. Each
year, the complexity of the Progressive computing environment increases, as we introduce new
applications and increasingly target systems to the end consumer. The target payout for the Plan
will be set at the amount of “up time points” earned the previous year (adjusted proportionately
for any change in the duration of the current Plan year). In order to receive a payout above the
target, the performance achieved needs to exceed the previous year’s performance level (as so
adjusted) in a more complex environment. Plan years will coincide with Progressive’s fiscal years.

4. All regular employees of Progressive (including managers) who are assigned primarily to the IT
Organization are eligible to be selected for participation in the Plan. The Chief Executive
Officer, after consulting with the Chief Human Resource Officer, (collectively, the “Designated
Officers”) shall have the authority to select Plan participants for any given Plan year.

5. Annual payments under the Plan will be determined by application of the following
formula:

     Annual IT Incentive Payment = Paid Earnings x Target Percentage x IT Performance Factor.

     The Annual IT Incentive Payment payable to any participant with respect to any given Plan year
will not exceed $75,000.00.

6. Paid Earnings for any Plan year means and includes the following items: (a) regular, used
Earned Time Benefit, sick, holiday, funeral and overtime pay paid to a participant during the Plan
year for work or services performed as an officer or employee of Progressive during the Plan year,
and (b) retroactive payments of any of the foregoing items relating to the same Plan year.

     For purposes of the Plan, Paid Earnings shall not include any short-term or long-term
disability payments, the earnings replacement component of any worker’s compensation award, any
lump sum merit awards, payments from the discretionary cash fund or any other bonus or incentive
compensation awards or any unused Earned Time Benefit.

     Notwithstanding the foregoing, if at the end of the 24th pay period of a Plan year,
any Plan participant’s then current annual salary exceeds his or her salary range maximum plus
$105, then for purposes of computing his or her Annual IT Incentive Payment under the Plan, his or
her Paid Earnings (including regular, used Earned Time Benefit, sick, holiday and funeral pay) for
any bi-weekly pay period during the Plan year will not exceed 1/26th of his or her
annual salary range maximum (as in effect as of

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the end of the applicable pay period). Without regard to that limitation, such participant’s Paid
Earnings for the full Plan year will include the full amount of the following items, if any,
received by such participant for that Plan year: (a) overtime pay, and (b) retroactive payments of
regular, used Earned Time Benefit, sick, holiday, overtime and funeral pay.

7. Target Percentages vary by position and shall be determined on an annual basis by the Designated
Officers.

8. In the discretion of the Designated Officers, participants in this Plan may also participate in
The Progressive Corporation 2006 Gainsharing Plan, or any successors thereto.

9. The IT Performance Factor

     The IT Performance Factor is based on application availability and accuracy measured on a
point system, and may vary from 0 to 2.0. Points are awarded for every day that production
systems, both mainframe and client/server, are outage free. If there is an outage in any
production system, all of the points relating to that application are lost for that day. Measured
applications, measured hours, outage definitions, point values and administrative guidelines will
be defined on an annual basis by or under the direction of the Designated Officers. A Performance
Matrix approved by the Designated Officers will assign a Performance Score to various point levels
that may be achieved.

     For 2006, and for each Plan year thereafter until otherwise determined by the Designated
Officers, the applicable Plan rules shall be as set forth in Schedule I attached hereto.

     The best possible score in any given week is 10 points per application. Attached hereto as
Schedule II is the 2006 Performance Matrix with the breakdown of scores and related outcomes. For
2006, a target of 1.00 will be achieved by earning between 10,240 and 10,244 points out of a
possible 10,660 points. The Designated Officers will establish the applicable performance targets,
the performance scores that will be awarded for various point levels achieved and the maximum
potential points that may be earned and the resulting performance score for subsequent Plan years.

10. If, for any Plan year, an employee has been selected to participate in both the Plan and
another incentive plan offered by the Company, then with respect to such employee, the Annual IT
Incentive Payment formula set forth in Paragraph 5 hereof will be appropriately adjusted by
applying a weighting factor to reflect the proportion of the employee’s total annual incentive
opportunity that is being provided by the Plan. The Designated Officers shall have full authority
to determine the incentive plan or plans in which any employee shall participate during any plan
year and, if an employee is selected to participate in more than one plan, the weighting factor
that will apply to each such plan.

11. Subject to Paragraph 12 below, no later than December 31 of each Plan year, each participant
will receive an initial payment in respect of his or her Annual IT Incentive Payment for that Plan
year equal to 75% of an amount calculated on the basis of Paid Earnings for the first 24 pay
periods of the Plan year, estimated earnings for the remainder of the Plan year, performance data
through the first 24 pay periods of the Plan year and forecasted performance results for the
remainder of the Plan year. No later than February 15 of the following year, each participant
shall receive the balance of his or her Annual IT Incentive Payment, if any, for such Plan year,
based on his or her Paid Earnings and performance data for the entire Plan year.

12. Unless otherwise determined by the Committee (as defined below), and except as expressly
provided herein, in order to be entitled to receive an Annual IT Incentive Payment for any Plan
year, the participant must be assigned to the IT Organization and be an active employee of the
Company on November 30 of that Plan year (“Qualification Date”). Individuals who are hired on or
after December 1 of any Plan year are not entitled to receive an Annual IT Incentive Payment for
that Plan year.

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     Any participant who is on a leave of absence covered by the Family and Medical Leave Act of
1993, personal leave of absence approved by the Company, military leave or short or long-term
disability on the Qualification Date with respect to any Plan year will be entitled to receive an
Annual IT Incentive Payment for that Plan year, calculated as provided in Paragraphs 5 and 11 above
and based on the amount of Paid Earnings received by such participant for the Plan year.

     Annual IT Incentive Payments will be net of any legally required deductions for federal, state
and local taxes and other items.

13. The right to any Annual IT Incentive Payment hereunder may not be sold, transferred, assigned

or encumbered by any participant. Nothing herein shall prevent any participant’s interest
hereunder from being subject to involuntary attachment, levy or other legal process.

14. The Plan shall be administered by or under the direction of the Compensation Committee of the
Board of Directors of The Progressive Corporation (“Committee”). The Committee shall have the
authority to adopt, alter, modify, amend and repeal such rules, guidelines, procedures and
practices governing the Plan as it shall, from time to time, in its sole discretion, deem
advisable.

     The Committee shall have full authority to determine the manner in which the Plan will
operate, to interpret the provisions of the Plan and to make all determinations hereunder. All
such interpretations and determinations shall be final and binding on Progressive, all Plan
participants and all other parties. No such interpretation or determination shall be relied on as a
precedent for any similar action or decision.

     Unless otherwise determined by the Committee, all of the authority of the Committee hereunder
(including, without limitation, the authority to administer the Plan, select participants in the
Plan, interpret the provisions of the Plan, waive any of the requirements specified herein and make
determinations hereunder and to establish, change or modify performance targets and measures) may
be exercised by the Designated Officers. In the event of a dispute or conflict, the determination
of the Committee will govern.

15. The Plan may be terminated, amended or revised, in whole or in part, at any time and from time
to time by the Committee, in its sole discretion.

16. The Plan will be unfunded and all payments due under the Plan shall be made from Progressive’s
general assets.

17. Nothing in the Plan shall be construed as conferring upon any person the right to remain a
participant in the Plan or to remain employed by Progressive, nor shall the Plan limit
Progressive’s right to discipline or discharge any of its employees or change any of their job
titles, duties or compensation.

18. Progressive shall have the unrestricted right to set off against or recover out of any Annual
IT Incentive Payment or other sums owed to any participant under the Plan any amounts owed by such
participant to Progressive.

19. This Plan supersedes any and all prior plans, agreements, understandings and arrangements
regarding bonuses or other cash incentive compensation payable to participants by or due from
Progressive and relating to the availability of computer systems. Without limiting the generality
of the foregoing, this Plan supersedes and replaces The Progressive Corporation 2005 Information
Technology Incentive Plan (the “Prior Plan”), which is and shall be deemed to be terminated as of
December 31, 2005 (the “Termination Date”); provided, that any bonuses or other sums earned and
payable under the Prior Plan with respect to any Plan year ended on or prior to the Termination
Date shall be unaffected by such termination and shall be paid to the appropriate participants when
and as provided thereunder.

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20. This Plan is adopted, and is to be effective, as of January 1, 2006, which is the
commencement of Progressive’s 2006 fiscal year. This Plan shall be effective for the 2006 Plan
year (which coincides with Progressive’s 2006 fiscal year) and for each Plan year thereafter unless
and until terminated by the Committee.

21. This Plan shall be interpreted and construed in accordance with the laws of the State of
Ohio.

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Schedule I

Information Technology Incentive Plan

2006 Rules

1. System Measurements

The intent of this program is to ensure that incidents that have major business impact are
counted as an outage. An outage is defined as an event (excluding a telecommunication failure)
that prevents 100 or more customers from using an application for more than 15 minutes. We define a
customer as an agent, policyholder, claimant, quote requester, body shop personnel, or internal
user.

The measured hours are 24 hours a day, Monday through Saturday. All day Sunday is measured with
the exception of our weekly system maintenance window which is from 3:30am until 8:00am EST and,
also, one (1) Sunday a quarter from Midnight to 8:00am EST.

Individual application service level agreements (SLAs) will take precedent over these time frames.
See chart below:

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	System	 	Additional Outage Clarifications
	 	 	 
	Cash Disbursements (CDS)

	 	An outage is defined for Monday through
Friday as anytime the system is not
available by 7 am. An exception would be
any requested Saturday or Sunday access
requested by the system owner 24 hours in
advance.
	Claims Mycars
	 	 
	Claims Decision Point
	 	 
	Claims PACMan

	 	PACMan is scheduled for maintenance from
Midnight to 8:00am every Sunday.

In addition, they are scheduled for an
“as needed” maintenance window on the
second Thursday of the month from 3:30am
until 6:00am. An outage for start of
day, for the Thursday maintenance window,
would be anytime PACMan is not available
by 6:00am.
	Claims Web Tracker
	 	 
	ClaimStation
	 	 
	Commercial Auto (PRAT/WFC)
	 	 
	DirectPro
1/1/2006 — 6/30/2006

	 	An outage is defined as an event
(excluding call routing licensing issues)
preventing quoting and/or selling. An
exception would be one (1) Sunday a month
(Sunday before Month End) from 3:30am
until 5:30am EST.
	 
	 	 
	 

	 	We recognize at times, an individual
state or states may not be available for
quoting or selling. There is not a clear
cut method to measure the business
impact. In these cases, the business
will be consulted to determine the
impact.
	FAO

	 	An outage is defined as an agent’s
inability to process transactions,
exclusive of quoting. Transactions
included in the FAO outage calculation
are the highest volume transactions
performed by agents. These vital business
transactions include logging into the
website, making payments, making policy
changes, viewing/printing policy
documents, and viewing policy, claims and
financial reports. An exception would be
one (1) Sunday a month (Sunday before
Month End) from 3:30am until 5:30am EST.
	Internet Special Lines

	 	An outage is defined as an event
(excluding call routing licensing issues)
preventing quoting and/or selling. An
exception would be one (1) Sunday a month
(Sunday before Month End) from 3:30am
until 5:30am EST.
	Internet Auto

	 	An outage is defined as an event
(excluding call routing licensing issues)
preventing quoting and/or selling. An
exception would be one (1) Sunday a month
(Sunday before Month End) from 3:30am
until 5:30am EST.
	Internet Comparison

	 	An outage is defined as an event
preventing quoting of both the Comparison
and Progressive rates and/or the selling
of the Progressive rate, once the quote
has entered the Internet Comparison
application. This excludes intentional
DNQ (Do Not Quote) situations for
competitors driven by competitor
eligibility rules and call routing
licensing issues. An exception would be
one (1) Sunday a month (Sunday before
Month End) from 3:30am until 5:30am EST,
and quarterly scheduled extended
Maintenance times.
	Personal Progressive
	 	 
	Ownership Work Bench (OWB)
	 	 
	POLARIS Billing System / ProBill

	 	An outage for the start of day is defined
as anytime the POLARIS transactions are
not available by 6:00am Monday through
Saturday.

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	System	 	Additional Outage Clarifications
	Policy Services Work Flow (POWR)

	 	An outage is defined as anytime their
scanning system is totally unavailable
(both locations down) for more than 30
minutes excluding their daily batch
window between midnight and 4:00am EST.
	ProRater Uploads
	 	 
	PROTEUS (Atlantic, Gulf,

Midwest, Pacific)

	 	An outage for start of day is defined as
anytime the 30 minute back-up occurs
after 6:00am, or causes the application
to be unavailable over 30 minutes.
	Server Based Rating (SBR)

	 	An outage is defined as an event
(excluding call routing licensing issues)
preventing quoting and/or selling. An
exception would be one (1) Sunday a month
(Sunday before Month End) from 3:30am
until 5:30am EST.
	Call Flow

	 	A call routing outage is defined as
anytime 100 unique customers calls are
not successfully completed to Progressive
(i.e., fast busy, non-working number
recording) within a 15 minute period due
to a Progressive error.
	Speech Self Service

	 	An outage is defined as an application or
infrastructure event impacting 100 unique
callers in a 15 minute period that
prevents the application from responding
to calls, receiving menu transactions, or
successfully completing a requested
transaction.
	 
	 	 
	 

	 	Exceptions would include customer
disconnects, call recording failures, a
10 minute daily window between 2 a.m. — 4
a.m. for ProBill file switching, and
scheduled monthly and quarterly
maintenance windows (monthly from 3:30 –
8am EST and quarterly from midnight to
8:00am EST).

	 	•	 	Baseline Connect for 2007 inclusion

2. Customer Experience (Retention)

An incident impacting 100 or more customers is defined as any of the following:

	 	•	 	The business issues an ACC/Letter because of an IT related problem
	 
	 	•	 	E-mails are sent multiple times to the same person
	 
	 	•	 	EFT (electronic fund transfers) incorrectly occur multiple times
	 
	 	•	 	Bills are sent to the wrong person
	 
	 	•	 	Billing is incorrect by more than $1.00
	 
	 	•	 	Documents are retransmitted (post office, fax or email) for any of the conditions below:

	 	 	 	o Print was incorrect
	 
	 	 	 	o Forms were missing
	 
	 	 	 	o Forms were sent in error

	 	•	 	Policyholder personal information is compromised by sharing or sending forms to the
wrong person or agent.

3. Availability of an Application

There can be times when an application is available but a particular transaction could be out
of service or malfunctioning. For our measurement purposes, this would typically be counted as an
outage.

We recognize there could be an occasion where the unavailable transaction represents insignificant
lost functionality and may affect less than 100 customers. These transactions being unavailable
would not be counted as an outage.

4. Vendor Service Outages

Vendors are a critical component to our service delivery. We work with three types of
vendors, Transaction Service Vendors (Equifax, Choicepoint, Discover, State MVR Centers, etc.),
Infrastructure Vendors (IBM, Microsoft, Oracle, etc.), and Hosting Vendors (Convergys). It is the
responsibility of the appropriate I/T group to manage and evaluate the quality of service received
from these vendors.

-7-

 

For purposes of this program, service disruptions caused by a Transaction Service Vendor or a
Hosting Vendor site not being available, that is entirely a vendor issue, will not be counted as an
outage. However, we have several arrangements for conversion to an alternate vendor or alternate
vendor site during an outage. If we are unable to execute the conversion because of a Progressive
related issue, this would be counted as an outage.

For purposes of this program, service disruptions caused by an Infrastructure Vendor will be
counted as an outage.

5. Slow Response Time

Occasionally an application is available but the response time is poor. Slow response time
will not be counted as an outage.

6. Scheduled Maintenance

Occasionally, system or facility work needs to be performed that cannot be completed during
our normal maintenance hours (see rule #1 for maintenance hours). In spite of this downtime being
scheduled in advance with our customers, it will be counted as an outage.

7. IT Performance and Retention Point Values

IT Performance 

Any day without an outage will be awarded the maximum number of points for that day. Point values
per day are weighted to correspond with the value to the business based on the volume of
transactions. The maximum number of points earned per week is 10 points per application defined in
Rule#1. The point value maximum, by day, is outlined in the following table:

	 	 	 	 	 	 	 	 	 
	Day	 	Points per Application	 	# of Applications	 	Maximum Points Per Day
	 
	Monday

	 	 	2.0	 	 	21*
	 	42
	Tuesday

	 	 	2.0	 	 	21*
	 	42
	Wednesday

	 	 	1.5	 	 	21*
	 	31.5
	Thursday

	 	 	1.5	 	 	21*
	 	31.5
	Friday

	 	 	1.5	 	 	21*
	 	31.5
	Saturday

	 	 	1.0	 	 	21*
	 	21
	Sunday

	 	 	0.5	 	 	21*
	 	10.5
	Total

	 	 	10.0	 	 	21*
	 	220

 

	•	 	 	# of applications will be 21 until 7/1/2006 when Direct Pro is removed from the list.
At that time the # of applications will be reduced to 20 and the maximum points per day
will be reduced as well.

Point values will not be adjusted for holidays. In other words, if a holiday is celebrated on a
Monday it will be given a 2 point value.

IT Customer Experience (Retention)

Outages that negatively affect customers will be assessed a 1.0 point loss per incident defined in
Rule #2, regardless of the day it occurred.

8. Communications of Status

On a daily basis, we will communicate any outage in the Morning Status Report issued Monday
through Friday by ETG. The outage will be highlighted in red.

Each Monday, ETG will distribute to all IT staff, the “Weekly IT Performance Report”, indicating
the previous week’s results as well as the annualized point factor. In addition, a monthly report
with year-to-date information will be distributed to all IT staff by the first Friday of the fiscal
month.

-8-

 

9. Appeal Process

Anyone within the organization has the right to appeal an outage. All appeals should be made
by email to Ed Locker. Ed will ensure the appeal is presented in the Post Mortem review of the
incident. If the outage was misrepresented, a reversal will be carried in the Weekly IT
Performance Report and all associated status reports.

If the outage requires a judgment call, it will be reviewed by Jerry Winchell, Tom Cunningham,
Scott McPherson, and Molly Gessler who will act as the Ruling Committee. All judgments made by the
Ruling Committee are final.

10. Earned Points Chart for 2006

The attached 2006 Earned Points Chart correlates annual points earned to the IT Performance
Factor.

-9-

 

Schedule II

INFORMATION TECHNOLOGY INCENTIVE PLAN

2006 EARNED POINTS CHART

	 	 	 	 	 	 	 	 	 
	ANNUAL POINTS EARNED 	 	IT PERFORMANCE
	Minimum 	 	Maximum	 	FACTOR
	 
	0

	 	 	9,743	 	 	 	0.00	 
	9,744

	 	 	9,749	 	 	 	0.01	 
	9,750

	 	 	9,754	 	 	 	0.02	 
	9,755

	 	 	9,759	 	 	 	0.03	 
	9,760

	 	 	9,765	 	 	 	0.04	 
	9,766

	 	 	9,770	 	 	 	0.05	 
	9,771

	 	 	9,775	 	 	 	0.06	 
	9,776

	 	 	9,781	 	 	 	0.07	 
	9,782

	 	 	9,783	 	 	 	0.08	 
	9,784

	 	 	9,786	 	 	 	0.09	 
	9,787

	 	 	9,791	 	 	 	0.10	 
	9,792

	 	 	9,797	 	 	 	0.11	 
	9,798

	 	 	9,802	 	 	 	0.12	 
	9,803

	 	 	9,807	 	 	 	0.13	 
	9,808

	 	 	9,813	 	 	 	0.14	 
	9,814

	 	 	9,818	 	 	 	0.15	 
	9,819

	 	 	9,823	 	 	 	0.16	 
	9,824

	 	 	9,829	 	 	 	0.17	 
	9,830

	 	 	9,834	 	 	 	0.18	 
	9,835

	 	 	9,839	 	 	 	0.19	 
	9,840

	 	 	9,845	 	 	 	0.20	 
	9,846

	 	 	9,850	 	 	 	0.21	 
	9,851

	 	 	9,855	 	 	 	0.22	 
	9,856

	 	 	9,860	 	 	 	0.23	 
	9,861

	 	 	9,866	 	 	 	0.24	 
	9,867

	 	 	9,868	 	 	 	0.25	 
	9,869

	 	 	9,871	 	 	 	0.26	 
	9,872

	 	 	9,876	 	 	 	0.27	 
	9,877

	 	 	9,882	 	 	 	0.28	 
	9,883

	 	 	9,887	 	 	 	0.29	 
	9,888

	 	 	9,892	 	 	 	0.30	 
	9,893

	 	 	9,898	 	 	 	0.31	 
	9,899

	 	 	9,903	 	 	 	0.32	 
	9,904

	 	 	9,908	 	 	 	0.33	 
	9,909

	 	 	9,914	 	 	 	0.34	 
	9,915

	 	 	9,919	 	 	 	0.35	 
	9,920

	 	 	9,924	 	 	 	0.36	 
	9,925

	 	 	9,930	 	 	 	0.37	 
	9,931

	 	 	9,935	 	 	 	0.38	 

-10-

 

	 	 	 	 	 	 	 	 	 
	ANNUAL POINTS EARNED 	 	IT PERFORMANCE
	Minimum 	 	Maximum	 	FACTOR
	 
	9,936

	 	 	9,940	 	 	 	0.39	 
	9,941

	 	 	9,946	 	 	 	0.40	 
	9,947

	 	 	9,951	 	 	 	0.41	 
	9,952

	 	 	9,954	 	 	 	0.42	 
	9,955

	 	 	9,956	 	 	 	0.43	 
	9,957

	 	 	9,962	 	 	 	0.44	 
	9,963

	 	 	9,967	 	 	 	0.45	 
	9,968

	 	 	9,972	 	 	 	0.46	 
	9,973

	 	 	9,978	 	 	 	0.47	 
	9,979

	 	 	9,983	 	 	 	0.48	 
	9,984

	 	 	9,988	 	 	 	0.49	 
	9,989

	 	 	9,994	 	 	 	0.50	 
	9,995

	 	 	9,999	 	 	 	0.51	 
	10,000

	 	 	10,004	 	 	 	0.52	 
	10,005

	 	 	10,010	 	 	 	0.53	 
	10,011

	 	 	10,015	 	 	 	0.54	 
	10,016

	 	 	10,020	 	 	 	0.55	 
	10,021

	 	 	10,026	 	 	 	0.56	 
	10,027

	 	 	10,031	 	 	 	0.57	 
	10,032

	 	 	10,034	 	 	 	0.58	 
	10,035

	 	 	10,036	 	 	 	0.59	 
	10,037

	 	 	10,042	 	 	 	0.60	 
	10,043

	 	 	10,047	 	 	 	0.61	 
	10,048

	 	 	10,052	 	 	 	0.62	 
	10,053

	 	 	10,058	 	 	 	0.63	 
	10,059

	 	 	10,063	 	 	 	0.64	 
	10,064

	 	 	10,068	 	 	 	0.65	 
	10,069

	 	 	10,074	 	 	 	0.66	 
	10,075

	 	 	10,079	 	 	 	0.67	 
	10,080

	 	 	10,084	 	 	 	0.68	 
	10,085

	 	 	10,090	 	 	 	0.69	 
	10,091

	 	 	10,095	 	 	 	0.70	 
	10,096

	 	 	10,100	 	 	 	0.71	 
	10,101

	 	 	10,106	 	 	 	0.72	 
	10,107

	 	 	10,111	 	 	 	0.73	 
	10,112

	 	 	10,116	 	 	 	0.74	 
	10,117

	 	 	10,119	 	 	 	0.75	 
	10,120

	 	 	10,122	 	 	 	0.76	 
	10,123

	 	 	10,127	 	 	 	0.77	 
	10,128

	 	 	10,132	 	 	 	0.78	 
	10,133

	 	 	10,138	 	 	 	0.79	 
	10,139

	 	 	10,143	 	 	 	0.80	 
	10,144

	 	 	10,148	 	 	 	0.81	 
	10,149

	 	 	10,154	 	 	 	0.82	 
	10,155

	 	 	10,159	 	 	 	0.83	 
	10,160

	 	 	10,164	 	 	 	0.84	 
	10,165

	 	 	10,170	 	 	 	0.85	 
	10,171

	 	 	10,175	 	 	 	0.86	 
	10,176

	 	 	10,180	 	 	 	0.87	 

-11-

 

	 	 	 	 	 	 	 	 	 
	ANNUAL POINTS EARNED 	 	IT PERFORMANCE
	Minimum 	 	Maximum	 	FACTOR
	 
	10,181

	 	 	10,186	 	 	 	0.88	 
	10,187

	 	 	10,191	 	 	 	0.89	 
	10,192

	 	 	10,196	 	 	 	0.90	 
	10,197

	 	 	10,202	 	 	 	0.91	 
	10,203

	 	 	10,204	 	 	 	0.92	 
	10,205

	 	 	10,207	 	 	 	0.93	 
	10,208

	 	 	10,212	 	 	 	0.94	 
	10,213

	 	 	10,218	 	 	 	0.95	 
	10,219

	 	 	10,223	 	 	 	0.96	 
	10,224

	 	 	10,228	 	 	 	0.97	 
	10,229

	 	 	10,234	 	 	 	0.98	 
	10,235

	 	 	10,239	 	 	 	0.99	 
	10,240

	 	 	10,244	 	 	 	1.00	 
	10,245

	 	 	10,247	 	 	 	1.01	 
	10,248

	 	 	10,250	 	 	 	1.02	 
	10,251

	 	 	10,252	 	 	 	1.03	 
	10,253

	 	 	10,255	 	 	 	1.04	 
	10,256

	 	 	10,260	 	 	 	1.05	 
	10,261

	 	 	10,263	 	 	 	1.06	 
	10,264

	 	 	10,266	 	 	 	1.07	 
	10,267

	 	 	10,268	 	 	 	1.08	 
	10,269

	 	 	10,271	 	 	 	1.09	 
	10,272

	 	 	10,274	 	 	 	1.10	 
	10,275

	 	 	10,276	 	 	 	1.11	 
	10,277

	 	 	10,282	 	 	 	1.12	 
	10,283

	 	 	10,284	 	 	 	1.13	 
	10,285

	 	 	10,287	 	 	 	1.14	 
	10,288

	 	 	10,290	 	 	 	1.15	 
	10,291

	 	 	10,292	 	 	 	1.16	 
	10,293

	 	 	10,295	 	 	 	1.17	 
	10,296

	 	 	10,298	 	 	 	1.18	 
	10,299

	 	 	10,303	 	 	 	1.19	 
	10,304

	 	 	10,306	 	 	 	1.20	 
	10,307

	 	 	10,308	 	 	 	1.21	 
	10,309

	 	 	10,311	 	 	 	1.22	 
	10,312

	 	 	10,314	 	 	 	1.23	 
	10,315

	 	 	10,316	 	 	 	1.24	 
	10,317

	 	 	10,319	 	 	 	1.25	 
	10,320

	 	 	10,322	 	 	 	1.26	 
	10,323

	 	 	10,324	 	 	 	1.27	 
	10,325

	 	 	10,330	 	 	 	1.28	 
	10,331

	 	 	10,332	 	 	 	1.29	 
	10,333

	 	 	10,335	 	 	 	1.30	 
	10,336

	 	 	10,338	 	 	 	1.31	 
	10,339

	 	 	10,340	 	 	 	1.32	 
	10,341

	 	 	10,343	 	 	 	1.33	 
	10,344

	 	 	10,346	 	 	 	1.34	 
	10,347

	 	 	10,351	 	 	 	1.35	 
	10,352

	 	 	10,354	 	 	 	1.36	 

-12-

 

	 	 	 	 	 	 	 	 	 
	ANNUAL POINTS EARNED 	 	IT PERFORMANCE
	Minimum 	 	Maximum	 	FACTOR
	 
	10,355

	 	 	10,356	 	 	 	1.37	 
	10,357

	 	 	10,359	 	 	 	1.38	 
	10,360

	 	 	10,362	 	 	 	1.39	 
	10,363

	 	 	10,364	 	 	 	1.40	 
	10,365

	 	 	10,367	 	 	 	1.41	 
	10,368

	 	 	10,370	 	 	 	1.42	 
	10,371

	 	 	10,372	 	 	 	1.43	 
	10,373

	 	 	10,378	 	 	 	1.44	 
	10,379

	 	 	10,380	 	 	 	1.45	 
	10,381

	 	 	10,383	 	 	 	1.46	 
	10,384

	 	 	10,386	 	 	 	1.47	 
	10,387

	 	 	10,388	 	 	 	1.48	 
	10,389

	 	 	10,391	 	 	 	1.49	 
	10,392

	 	 	10,393	 	 	 	1.50	 
	10,394

	 	 	10,399	 	 	 	1.51	 
	10,400

	 	 	10,401	 	 	 	1.52	 
	10,402

	 	 	10,404	 	 	 	1.53	 
	10,405

	 	 	10,407	 	 	 	1.54	 
	10,408

	 	 	10,409	 	 	 	1.55	 
	10,410

	 	 	10,412	 	 	 	1.56	 
	10,413

	 	 	10,415	 	 	 	1.57	 
	10,416

	 	 	10,420	 	 	 	1.58	 
	10,421

	 	 	10,423	 	 	 	1.59	 
	10,424

	 	 	10,425	 	 	 	1.60	 
	10,426

	 	 	10,428	 	 	 	1.61	 
	10,429

	 	 	10,431	 	 	 	1.62	 
	10,432

	 	 	10,433	 	 	 	1.63	 
	10,434

	 	 	10,436	 	 	 	1.64	 
	10,437

	 	 	10,439	 	 	 	1.65	 
	10,440

	 	 	10,441	 	 	 	1.66	 
	10,442

	 	 	10,447	 	 	 	1.67	 
	10,448

	 	 	10,449	 	 	 	1.68	 
	10,450

	 	 	10,452	 	 	 	1.69	 
	10,453

	 	 	10,455	 	 	 	1.70	 
	10,456

	 	 	10,457	 	 	 	1.71	 
	10,458

	 	 	10,460	 	 	 	1.72	 
	10,461

	 	 	10,463	 	 	 	1.73	 
	10,464

	 	 	10,468	 	 	 	1.74	 
	10,469

	 	 	10,471	 	 	 	1.75	 
	10,472

	 	 	10,473	 	 	 	1.76	 
	10,474

	 	 	10,476	 	 	 	1.77	 
	10,477

	 	 	10,479	 	 	 	1.78	 
	10,480

	 	 	10,481	 	 	 	1.79	 
	10,482

	 	 	10,484	 	 	 	1.80	 
	10,485

	 	 	10,489	 	 	 	1.81	 
	10,490

	 	 	10,492	 	 	 	1.82	 
	10,493

	 	 	10,495	 	 	 	1.83	 
	10,496

	 	 	10,497	 	 	 	1.84	 
	10,498

	 	 	10,500	 	 	 	1.85	 

-13-

 

	 	 	 	 	 	 	 	 	 
	ANNUAL POINTS EARNED 	 	IT PERFORMANCE
	Minimum 	 	Maximum	 	FACTOR
	 
	10,501

	 	 	10,511	 	 	 	1.86	 
	10,512

	 	 	10,521	 	 	 	1.87	 
	10,522

	 	 	10,532	 	 	 	1.88	 
	10,533

	 	 	10,543	 	 	 	1.89	 
	10,544

	 	 	10,553	 	 	 	1.90	 
	10,554

	 	 	10,564	 	 	 	1.91	 
	10,565

	 	 	10,575	 	 	 	1.92	 
	10,576

	 	 	10,585	 	 	 	1.93	 
	10,586

	 	 	10,596	 	 	 	1.94	 
	10,597

	 	 	10,607	 	 	 	1.95	 
	10,608

	 	 	10,617	 	 	 	1.96	 
	10,618

	 	 	10,628	 	 	 	1.97	 
	10,629

	 	 	10,639	 	 	 	1.98	 
	10,640

	 	 	10,649	 	 	 	1.99	 
	10,650

	 	 	10,660	 	 	 	2.00	 

-14-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]