Document:

EX-4.5

 

Exhibit 4.5

(Face of Security)

Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”) to the Issuer or its agent for registration of transfer,
exchange or payment, and such certificate is registered in the name of Cede & Co., or in such other
name as requested by an authorized representative of DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as the registered owner hereof,
Cede & Co., has an interest herein.

	 	 	 	 	 
	REGISTERED NO. R-001

	 	$	400,000,000	 

CUSIP No. 743315 AL 7

THE PROGRESSIVE CORPORATION

6.25% SENIOR NOTE DUE 2032

          THE PROGRESSIVE CORPORATION, an Ohio corporation (the “Issuer”), for value received, hereby
promises to pay to CEDE & Co., c/o The Depository Trust Company, 55 Water Street, New York, New
York 10041 or registered assigns, at the office or agency of the Issuer at the office of the
Trustee in Boston, Massachusetts, the principal sum of FOUR HUNDRED MILLION DOLLARS ($400,000,000)
on December 1, 2032, in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts, and to pay interest
semiannually on June 1 and December 1 of each year, commencing on June 1, 2003, on said principal
sum at said office or agency, in like coin or currency, at the rate per annum specified in the
title of this Note, from the June 1 or the December 1, as the case may be, next preceding the date
of this Note to which interest has been paid, unless the date hereof is a date to which interest
has been paid, in which case from the date of this Note, or unless no interest has been paid on the
Notes, in which case from November 21, 2002, until payment of said principal sum has been made or
duly provided for; provided, that payment of interest may be made at the option of the Issuer by
check mailed to the address of the person entitled thereto as such address shall appear on the
Security Register. The interest so payable on any June 1 or December 1 will, subject to certain
exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in
whose name this Note is registered at the close of business on May 15 or November 15, as the case
may be, next preceding such June 1 or December 1.

          Reference is made to the further provisions of this Note set forth on the reverse hereof.
Such further provisions shall for all purposes have the same effect as though fully set forth at
this place.

          This Note shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the Indenture referred to on the
reverse hereof.

     IN WITNESS WHEREOF, The Progressive Corporation has caused this
instrument to be signed by its duly authorized officers and has caused
its corporate seal to be affixed hereto or imprinted hereon.

	 	 	 	 	 
	 	THE PROGRESSIVE CORPORATION

 	 
	[CORPORATE SEAL] 	By:  	 	 
	 	 	Stephen D. Peterson 	 
	 	 	Treasurer 	 
	 

	 	 	 	 	 
	 	 	 
	Attest:  	
 	 	 
	 	Charles E. Jarrett 	 	 
	 	Secretary 	 	 
	 

Dated: November 21, 2002

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

          This is one of the Securities, of the series designated herein, referred to in the within-mentioned Indenture.

	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	STATE STREET BANK AND TRUST

COMPANY, as Trustee

     Authorized Signatory	 	 
	 

	 	 

	 	 
	 	 	 	 

-1-

 

(Back of Security)

THE PROGRESSIVE CORPORATION

6.25% SENIOR NOTE DUE 2032

     This Note is one of a duly authorized issue of debentures, notes, bonds or other evidences of
indebtedness of the Issuer (hereinafter called the “Securities”) of the series hereinafter
specified, all issued or to be issued under and pursuant to an indenture dated as of September 15,
1993, as heretofore supplemented and amended (herein called the “Indenture”), between the Issuer
and State Street Bank and Trust Company, as Trustee (herein called the “Trustee”), to which
Indenture and all indentures supplemental thereto reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the
Issuer and the Holders of the Securities. The Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject to different
redemption provisions (if any), may be subject to different sinking, purchase or analogous funds
(if any) and may otherwise vary as in the Indenture provided. This Note is one of a series
designated as the 6.25% Senior Notes Due 2032 of the Issuer, limited in initial aggregate principal
amount to $400,000,000, subject to the right of the Issuer to reopen such series.

     In case an Event of Default, as defined in the Indenture, with respect to the 6.25% Senior
Notes Due 2032 shall have occurred and be continuing, the principal hereof may be declared, and
upon such declaration shall become, due and payable, in the manner, with the effect and subject to
the conditions provided in the Indenture.

     The Indenture contains provisions permitting the Issuer and the Trustee, with the consent of
the Holders of not less than 66-2/3% in aggregate principal amount of the Securities at the time
Outstanding (as defined in the Indenture) of all series to be affected (voting as one class),
evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders of the Securities of
each such series; provided, however, that no such supplemental indenture shall (i) extend the final
maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the
time of payment of any interest thereon, or impair or affect the rights of any Holder to institute
suit for the payment thereof, without the consent of the Holder of each Security so affected or
(ii) reduce the aforesaid percentage of Securities, the Holders of which are required to consent to
any such supplemental indenture, without the consent of the Holder of each Security so affected.
It is also provided in the Indenture that, with respect to certain defaults or Events of Default
regarding the Securities of any series, prior to any declaration accelerating the maturity of such
Securities, the Holders of a majority in aggregate principal amount Outstanding of the Securities
of such series may on behalf of the Holders of all the Securities of such series waive any such
past default or Event of Default and its consequences. The preceding sentence shall not, however,
apply to a default in the payment of the principal of or premium, if any, or interest on any of the
Securities. Any such consent or waiver by the Holder of this Note (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and
owners of this Note and any Note which may be issued in exchange or substitution herefor,
irrespective of whether or not any notation thereof is made upon this Note or such other Note.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note in the manner, at the respective times, at the rate and in
the coin or currency herein prescribed.

     The Notes are issuable in registered form without coupons in denominations of $1,000 and any
integral multiple of $1,000 at the office or agency of the Issuer at the office of the Trustee in
Boston, Massachusetts, and in the manner and subject to the limitations provided in the Indenture,
but without the payment of any service charge. Notes may be exchanged for a like aggregate
principal amount of Notes of other authorized denominations.

     The Notes of the series designated as the 6.25% Senior Notes due 2032 are subject to
redemption upon not more than 60 or less than 30 days’ notice by mail, in whole at any time or in
part from time to time at the option of the Issuer on any date (a “Redemption Date”), at a
redemption price equal to the accrued and unpaid interest on the principal amount being redeemed to
the redemption date plus the greater of (i) 100% of the principal amount of the Notes to be
redeemed and (ii) the sum of the present values of the Remaining Scheduled Payments (as defined
below) of the Notes to be redeemed, discounted to the redemption date, on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months), at rate equal to the Treasury Rate
(defined below), plus 20 basis points.

     “Remaining Scheduled Payments” means, with respect to any redemption, the remaining
scheduled payments of the principal and interest that would be due after the redemption date of a
Note if such Note were not redeemed and were held until maturity. However, if the redemption date
is not a scheduled interest payment date, the amount of the

-2-

 

next succeeding scheduled interest payment on such Note will be reduced by the amount of interest
accrued on such Note to such redemption date.

     “Treasury Rate” means, with respect to any redemption, an annual rate equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue (as defined below), assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for the redemption date. The semiannual equivalent yield to maturity
will be computed as of the third business day immediately preceding the redemption date.

     “Comparable Treasury Issue” means, with respect to any redemption, the United States Treasury
security selected by Credit Suisse First Boston or an affiliate as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of such Notes.

     “Comparable Treasury Price” means, with respect to any redemption, the average of three
Reference Treasury Dealer Quotations (as defined below) obtained by the Trustee for the redemption
date.

     “Reference Treasury Dealer” means, with respect to any redemption, Credit Suisse First Boston
(so long as it continues to be a primary U.S. Government securities dealer) and any two other
primary U.S. Government securities dealers chosen by the Issuer. If Credit Suisse First Boston
ceases to be a primary U.S. Government securities dealer, the Issuer will appoint in its place
another nationally recognized investment banking firm that is a primary U.S. Government securities
dealer.

     “Reference Treasury Dealer Quotation” means, with respect to any redemption, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted in writing to the Trustee by a
Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding the
redemption date.

     In the event of redemption of this Note in part only, a new Note or Notes of this series and
of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.

     Upon due presentment for registration of transfer of this Note at the office or agency of the
Issuer at the office of the Trustee in Boston, Massachusetts, a new Note or Notes of authorized
denominations for an equal aggregate principal amount will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.

     The Issuer, the Trustee and any authorized agent of the Issuer or the Trustee may deem and
treat the registered Holder hereof as the absolute owner of this Note (whether or not this Note
shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and, subject to the
provisions on the face hereof, interest hereon, and for all other purposes, and neither the Issuer
nor the Trustee nor any authorized agent of the Issuer or the Trustee shall be affected by notice
to the contrary.

     No recourse under or upon any obligation, covenant or agreement of the Issuer in the Indenture
or any indenture supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator, shareholder, officer or
director, as such, of the Issuer or of any successor corporation, either directly or through the
Issuer or any successor corporation, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as part of the
consideration for the issue hereof.

     Terms used herein which are defined in the Indenture shall have the respective meanings
assigned thereto in the Indenture.

-3-

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE)

the within Note and all rights thereunder, hereby irrevocably constituting and appointing

 

attorney to transfer said Note on the books of the Issuer, with full power of substitution in the
premises.

	 	 	 	 	 	 	 	 	 
	Dated
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	NOTICE: The signature to this assignment must
correspond with the name as written upon the face of
the within instrument in every particular, without
alteration or enlargement or any change whatever.	 	 

-4-EX-10.6

 

Exhibit 10.6

THE PROGRESSIVE CORPORATION

2008 GAINSHARING PLAN

     1. The Plan. The Progressive Corporation and its subsidiaries (collectively,
“Progressive” or the “Company”) have adopted The Progressive Corporation 2008 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”). Plan years will coincide with Progressive’s fiscal
years.

     2. Participants. Plan participants for each Plan year shall include all officers and
regular employees of Progressive, unless determined otherwise by the Committee. The Gainsharing
opportunity, if any, for those executive officers who participate in The Progressive Corporation
2007 Executive Bonus Plan (the “Executive Bonus Plan”) will be provided by the Executive Bonus
Plans, although participants in that plan may also participate in this Plan if and to the extent
determined by the Committee.

     3. Gainsharing Formula. 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. Paid Earnings for any Plan year shall mean and include the
following: regular, used Earned Time Benefit, sick, holiday (excluding, for all purposes hereunder,
premium holiday pay for exempt employees), funeral and overtime pay, military pay, and retroactive
payments of any of the foregoing items, received by the participant during the Plan year for work
or services performed as an officer or employee of Progressive.

For purposes of the Plan, Paid Earnings shall exclude all other types of compensation, including,
without limitation, any short-term or long-term disability payments made to the participant, the
earnings replacement component of any workers’ compensation award, any bonus, Gainsharing or other
incentive compensation awards, including, without limitation, payments from any discretionary cash
fund, any dividend payments 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 shall be equal to the sum of: (i) his or her regular, used Earned Time Benefit, sick,
holiday, military and funeral pay for each bi-weekly pay period during the Plan year, but not to
exceed 1/26th of his or her annual salary range maximum (as in effect as of the end of
the applicable pay period) for any such bi-weekly pay period; plus (ii) the full amount of the
following items, if any, received by such participant during that Plan year: (a) overtime pay, and
(b) retroactive payments of regular, used Earned Time Benefit, sick, holiday, overtime and funeral
pay.

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

	 	 	 	 	 
	POSITION	 	TARGET %
	Senior Executives and Executive Level Managers
	 	 	60 — 150	%
	Business Leaders
	 	 	35 — 60	%
	Directors and Senior Directors
	 	 	20 — 35	%
	Middle Managers and Senior Managers
	 	 	15 — 20	%
	Senior Professionals and Entry Level Managers
	 	 	9 — 20	%
	Administrative Support and Entry Level Professionals
	 	 	0 — 8	%

1

 

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; provided that the Chief Human Resource Officer may establish
appropriate procedures to evaluate the need for, and if appropriate, implement individual
exceptions to the foregoing ranges. Target Percentages may be changed from year to year by the
Designated Executives. Notwithstanding anything herein to the contrary, only the Committee may
establish or modify the Target Percentages for the Company’s executive officers.

If a participant’s position changes during a Plan year resulting in a change in Target Percentage,
the Target Percentages used to calculate such participant’s Annual Gainsharing Payment hereunder
shall be weighted appropriately.

     6. The Performance Factor.

     A. Core Business Defined

The Performance Factor shall be determined by the performance of the Core Business during
the Plan year, pursuant to the procedures and calculations described below. The “Core
Business” shall be comprised of the following:

	 	•	 	The Agency Auto business unit, consisting of the auto business produced by
independent agents or brokers, including Strategic Alliances Agency auto, but
excluding the Agency Special Lines business;
	 
	 	•	 	The Direct Auto business unit, consisting of the auto business produced by phone
or over the Internet, but excluding the Direct Special Lines business;
	 
	 	•	 	The Special Lines business unit, including Special Lines business generated by
agents and brokers and directly by phone or over the Internet; and
	 
	 	•	 	The Commercial Auto business unit.

Each of the Agency, Direct, Special Lines and Commercial Auto business units is referred to
herein as a “Business Unit.” For all purposes under this Plan, the results of the
Professional Liability Group, the Midland Financial Group, Inc. and other businesses in
run-off are excluded from the Core Business results.

     B . Matrices

For purposes of computing a performance score for the Core Business, operating performance
results for each Business Unit, or a portion of the business written by a Business Unit as
defined below or as hereafter defined by the Committee (referred to as a “Business Sub-unit”
or a “Sub-unit”), are evaluated using a performance matrix that is established by or under
the direction of the Committee for the Plan year. Each matrix assigns performance scores to
various combinations of profitability and growth outcomes for the applicable Business Unit
or Sub-unit.

For 2008, and for each Plan year thereafter until otherwise determined by the Committee,
each of the Agency, Direct, Commercial Auto and Special Lines Business Units will be
evaluated according to the performance of their respective “New” and “Renewal” Business
Sub-units, using the performance measures further described below. Therefore, separate
Gainsharing matrices will be established for the following:

	 	•	 	Agency Auto — New Sub-unit;
	 
	 	•	 	Agency Auto —  Renewal Sub-unit;
	 
	 	•	 	Direct Auto — New Sub-unit;
	 
	 	•	 	Direct Auto — Renewal Sub-unit;
	 
	 	•	 	Special Lines — New Sub-unit;
	 
	 	•	 	Special Lines — Renewal Sub-unit;
	 
	 	•	 	Commercial Auto — New Sub-unit; and

2

 

	 	•	 	Commercial Auto — Renewal Sub-unit.

     C. Performance Measures

Growth. The growth measure for the Plan year under all matrices will be based on policies
in force (“PIFs”). The following will apply to the matrix for the applicable Business
Sub-unit:

	 	(i)	 	For each “New” Business Sub-unit matrix, growth will be measured by the change
in (a) the number of new policies written by the Business Unit during the applicable
Plan year that remained in force (including, without limitation, as a result of renewal
thereof) as of the last day of the Plan year, as compared with (b) the number of new
policies written by such Business Unit during the immediately preceding Plan year that
remained in force as of the last day of such immediately preceding Plan year.
	 
	 	(ii)	 	For each “Renewal” Business Sub-unit matrix, growth will be measured by the PIF
retention rate of the applicable Business Unit for the Plan year — i.e., the
percentage of the policies that were in force in such Business Unit on the first day of
the Plan year that remained in force (including, without limitation, as a result of
renewal thereof) as of the last day of the Plan year.

Profitability. For all Business Sub-unit matrices, profitability will be measured by the
GAAP combined ratio for the Plan year for the applicable New or Renewal Sub-unit.

Miscellaneous. Net operating results from business that is not included in the descriptions
in Paragraph 6(A) above, if any, will be apportioned among the appropriate Business Units or
Sub-units in accordance with the respective amount(s) of net earned premiums generated by
such business in each such Business Unit or Sub-unit, and the apportioned net operating
results will be included in the calculation of the GAAP combined ratio for such Business
Unit(s) or Sub-unit(s). Assigned risk business is not included in determining the growth of
any Business Unit or Sub-unit, but the net operating gains/losses for such assigned risk
business will be included in the calculation of the GAAP combined ratio for the applicable
Business Unit or Sub-unit.

     D. Calculation of Performance Factor 

Using the Gainsharing matrix for each New or Renewal Sub-unit and the actual performance
results for the applicable Business Unit, the GAAP combined ratio for each such Sub-unit
will be matched with the growth levels achieved by such Sub-unit, to determine the
performance score for such Sub-unit.

The performance scores for each of the Agency, Direct, Commercial Auto and Special Lines
Business Units will be calculated by:

	 	(i)	 	Weighting the performance scores determined under the matrices for the
applicable New and Renewal Sub-units, using the following weighting factors:

	 	•	 	Two-thirds (2/3) from the score determined under the matrix for the
Renewal Sub-unit; and
	 
	 	•	 	One-third (1/3) from the score determined under the matrix for the New
Sub-unit; and

	 	(ii)	 	Adding the weighted performance scores for the applicable New and Renewal
Sub-units to produce the Business Unit performance score.

The resulting performance scores for each of the Agency, Direct, Commercial Auto and Special
Lines Business Units will then be multiplied by a weighting factor, which shall be a
fraction or decimal equivalent, determined by dividing the net earned premiums generated by
such Business Unit during the Plan year by the net earned premiums generated by all of the
Business Units comprising the Core

3

 

Business in the aggregate. The sum of these weighted performance scores will be the
Performance Factor for the Plan year.

     E. Limitations

The performance score under each matrix, as well as the final Performance Factor, can vary
from 0 to 2.0, determined under the procedures described above, based on actual performance.
The final Performance Factor cannot exceed 2.0, regardless of results.

     7. Payment Procedures; Deferral. 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, and performance data through the first 11 months of the Plan year (estimated, if
necessary). 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. Other Plans. If, for any Plan year, an employee has been selected to participate
in both this Plan and another cash 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 this 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. Qualification Date; Leave of Absence; Withholding . 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 year, the participant must be an active officer or regular
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.

All payments made hereunder will be net of any legally required deductions for federal, state and
local taxes and other items.

     10. Non-Transferability. 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. Administration. 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.

4

 

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 the
Business Units or Sub-units and the Gainsharing formulae, weighting factors, performance targets
and Target Percentages) may be exercised by the Designated Executives; provided, however, that only
the Committee may take such actions or make such determinations for the Company’s executive
officers. In the event of a dispute or conflict, the determination of the Committee will govern.

     12. Termination; Amendment. 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. Unfunded Obligations. The Plan will be unfunded and all payments due under the
Plan shall be made from Progressive’s general assets.

     14. No Employment Rights. 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. Set-Off Rights. 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. Prior Plans. 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 2007 Gainsharing Plan (the “Prior Plan”), which is and shall
be deemed to be terminated as of December 28, 2007 (the “Prior Plan Termination Date”); provided,
however, 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 Prior Plan Termination Date shall be unaffected by such
termination and shall be paid to the appropriate participants when and as provided thereunder.

     17. Effective Date. This Plan is adopted, and is to be effective, as of December 29,
2007, which is the commencement of Progressive’s 2008 fiscal year. This Plan shall be effective
for the 2008 Plan year (which coincides with Progressive’s 2008 fiscal year) and for each Plan year
thereafter unless and until terminated by the Committee.

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

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]