Document:

<PAGE>

Exhibit No. 10(O)
                           THE PROGRESSIVE CORPORATION

                               2003 INCENTIVE PLAN

SECTION 1.  ESTABLISHMENT; PURPOSE; DEFINITIONS.

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

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

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

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

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

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

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

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

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

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

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

                  "Committee" means the Compensation Committee of the Board.

                                      -1-
<PAGE>
                  "Company" means The Progressive Corporation, an Ohio
         corporation, or any successor corporation.

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

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

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

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

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

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

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

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

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

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

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

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

                                      -2-
<PAGE>
                  "Participant" means an Eligible Person who holds an
         outstanding Award granted under the Plan.

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

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

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

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

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

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

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

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

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

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

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

SECTION 2. ADMINISTRATION.

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

                                      -3-
<PAGE>
Directors. Committee members shall be appointed by the Board and shall serve on
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 to interpret and
administer the Plan and full authority to select the individuals to whom Awards
will be granted and to determine the type and amount of Awards to be granted to
each Participant, the consideration, if any, to be paid for such Awards, the
timing of such Awards, the terms and conditions of Awards granted under the Plan
and the terms and conditions of the related Award Agreements which will be
entered into with Participants. As to the selection of and grant of Awards to
Participants who are not Section 16 Participants, the Committee may delegate its
responsibilities to members of the Company's management consistent with
applicable law.

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

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

SECTION 3.  STOCK SUBJECT TO THE PLAN.

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

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

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

                                      -4-
<PAGE>
         Participant during any calendar year or other period, in the number and
         Option Exercise Price of shares subject to outstanding Options granted
         under the Plan and in the number of shares subject to Restricted Stock
         Awards granted under the Plan as may be approved by the Committee, in
         its sole discretion, to prevent dilution or enlargement of rights;
         provided that the number of shares subject to any Award shall always be
         a whole number. Any fractional shares shall be eliminated.

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

SECTION 4. ELIGIBILITY.

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

SECTION 5. RESTRICTED STOCK.

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

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

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

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

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

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

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

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

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

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

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

                                      -6-
<PAGE>
                  of award, may permit or require the payment of cash dividends
                  to be deferred and, if the Committee so determines,
                  reinvested, subject to Section 10(f), in additional Restricted
                  Stock to the extent shares are available under Section 3, or
                  otherwise reinvested. Stock dividends issued with respect to
                  Restricted Stock shall be treated as additional shares of
                  Restricted Stock that are subject to the same restrictions and
                  other terms and conditions that apply to the shares with
                  respect to which such dividends are issued.

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

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

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

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

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

                                      -7-
<PAGE>
                  (A)      if and to the extent that any Award Installment (as
                           defined below) is vested as of the Qualified
                           Retirement Date (as defined below), all shares of
                           Restricted Stock held by the Participant in
                           connection with such Award Installment shall be free
                           of applicable restrictions and delivered to the
                           Participant (subject to Section 5(b)(5));

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

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

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

                                      -8-
<PAGE>
                           Disqualification Date (as defined below), the
                           Participant shall have the right to receive all
                           shares of Restricted Stock which are vested as of
                           such date (subject to Section 5(b)(5)) and (2) to the
                           extent that any Restricted Stock Award held by such
                           Participant has not vested as of the Disqualification
                           Date, the Award shall terminate, and all related
                           shares shall be forfeited, as of such date. Any
                           determination by the Committee, which may act upon
                           the recommendation of the Chief Executive Officer or
                           other senior officer of the Company, that the
                           Participant is or has engaged in any Disqualifying
                           Activity, and as to the Disqualification Date, shall
                           be final and conclusive.

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

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

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

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

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

                           (iii) Disqualifying Activity - means any of the
                           following acts or activities:

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

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

                                      -9-
<PAGE>
                                    (c) any material violation of any of the
                                    provisions of the Company's Code of Business
                                    Conduct and Ethics ("Code of Conduct") or
                                    any agreement between the Participant and
                                    the Company;

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

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

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

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

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

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

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

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

                                      -10-
<PAGE>
                  (14) Any Participant who is then eligible to participate in
                  The Progressive Corporation Executive Deferred Compensation
                  Plan or any other deferral plan hereafter adopted or
                  maintained by the Company (a "Deferral Plan") may elect to
                  defer all or any portion of any Restricted Stock Awards
                  granted to him or her under this Plan, subject to and in
                  accordance with the terms of the applicable Deferral Plan.

SECTION 6. STOCK OPTIONS.

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

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

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

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

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

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

                                      -11-
<PAGE>
                  to six months and one day following the date of grant. If any
                  Stock Option is exercisable only in installments or only after
                  a specified vesting date, the Committee may accelerate or
                  waive, in whole or in part, such installment exercise
                  provisions or vesting date, at any time at or after grant
                  based on such factors as the Committee shall determine, in its
                  sole discretion.

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

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

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

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

                                      -12-
<PAGE>
                  (6) Termination by Death. Subject to Section 6(c), if any
                  Participant's employment by the Company or any Subsidiary or
                  Affiliate terminates by reason of death, any Stock Option held
                  by such Participant may thereafter be exercised, to the extent
                  such Option was exercisable at the time of death or would have
                  become exercisable within one year from the time of death had
                  the Participant continued to fulfill all conditions of the
                  Option during such period (or on such accelerated basis as the
                  Committee may determine at or after grant), by the estate of
                  the Participant (acting through its fiduciary) for a period of
                  one year (or such other period as the Committee may specify at
                  or after grant) from the date of such death; provided that, if
                  the vesting of such Option is conditioned on or subject to the
                  achievement of specified Performance Goals, such Performance
                  Goals are achieved prior to the earlier of the expiration of
                  such one year period or the Expiration Date of such Option.
                  The balance of the Stock Option shall be forfeited.

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

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

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

                                      -13-
<PAGE>
         the Participant's estate, in the case of death, or authorized legal
         representative, in the case of Disability, no later than 10 years from
         the date the Incentive Stock Option was granted (or 5 years in the case
         of a 10% Participant) (in addition to any other restrictions or
         limitations which may apply). Anything in the Plan to the contrary
         notwithstanding, no term or provision of the Plan relating to Incentive
         Stock Options shall be interpreted, amended or altered, nor shall any
         discretion or authority granted under the Plan be exercised, so as to
         disqualify the Plan under Section 422 of the Code, or, without the
         consent of the Participant(s) affected, to disqualify any Incentive
         Stock Option under such Section 422 or any successor Section thereto.

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

SECTION 7. CHANGE IN CONTROL PROVISION.

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

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

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

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

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

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

                                      -14-
<PAGE>
                  the beneficial owner of or has the right to acquire an amount
                  of Stock equal to or greater than five percent of the number
                  of shares of Stock outstanding on such effective date; and
                  further provided that, unless otherwise determined by the
                  Board or any committee thereof, the terms "person" and "group"
                  shall not include any entity or group of entities which has
                  acquired Stock of the Company in the ordinary course of
                  business for investment purposes only and not with the purpose
                  or effect of changing or influencing the control of the
                  Company, or in connection with or as a participant in any
                  transaction having such purpose or effect, ("Investment
                  Intent"), as demonstrated by the filing by such entity or
                  group of a statement on Schedule 13G (including amendments
                  thereto) pursuant to Regulation 13D under the Exchange Act, as
                  long as such entity or group continues to hold such Stock with
                  an Investment Intent;

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

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

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

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

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

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

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

                                      -15-
<PAGE>
         Control or Potential Change in Control of the Company, at any time
         during the 60-day period immediately preceding the occurrence of the
         Change in Control (or, where applicable, the occurrence of the
         Potential Change in Control event), in each case as determined by the
         Committee.

SECTION 8. AMENDMENTS AND TERMINATION.

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

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

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

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

SECTION 9. UNFUNDED STATUS OF PLAN.

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

SECTION 10. GENERAL PROVISIONS.

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

                                      -16-
<PAGE>
         without a view to distribution thereof. Any certificates for such
         shares may include any legend which the Committee deems appropriate to
         reflect any restrictions on transfer.

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

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

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

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

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

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

                                      -17-
<PAGE>
                  (g) The Plan, all Awards made and all actions taken thereunder
         and any agreements relating thereto, shall be governed by and construed
         in accordance with the laws of the State of Ohio.

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

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

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

SECTION 11. SHAREHOLDER APPROVAL; EFFECTIVE DATE OF PLAN.

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

SECTION 12. TERM OF PLAN.

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

                                      -18-<PAGE>
Exhibit No. 10(P)

                      THE PROGRESSIVE CORPORATION EXECUTIVE
                           DEFERRED COMPENSATION PLAN

                   (JANUARY 1, 1997 AMENDMENT AND RESTATEMENT)
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                  PAGE NO.
--------------------------------------------------------------------------
<S>                                                               <C>
                                     ARTICLE 14
                                     DEFINITIONS
     1.1  "Affiliated Company"                                       1
     1.2  "Annual Deferral Account" or "Account"                     1
     1.3  "Beneficiary"                                              1
     1.4  "Change in Control"                                        1
     1.5  "Code"                                                     1
     1.6  "Committee"                                                1
     1.7  "Company"                                                  1
     1.8  "Company Stock Fund"                                       1
     1.9  "Deduction Limitation"                                     1
     1.10 "Deferral Agreement"                                       2
     1.11 "Deferral"                                                 2
     1.12 "Disabled" and "Disability"                                2
     1.13 "Distribution Event"                                       2
     1.14 "Eligible Executive"                                       2
     1.15 "ERISA"                                                    2
     1.16 "Fixed Deferral Period"                                    2
     1.17 "Fixed Income Fund"                                        2
     1.18 "Gainsharing Award"                                        2
     1.19 "Investment Fund"                                          2
     1.20 "Participant"                                              2
     1.21 "Plan"                                                     2
     1.22 "Plan Year"                                                3
     1.23 "Termination of Employment"                                3
     1.24 "Stock"                                                    3
     1.25 "Trust"                                                    3
     1.26 "Trust Agreement"                                          3
     1.27 "Trustee"                                                  3
     1.28 "Valuation Date"                                           3
     1.29 "Withdrawal Amount"                                        3

                                     ARTICLE 2
                          DEFERRAL OF GAINSHARING AWARDS

     2.1   Method of Deferral                                        3
     2.2   Deferral Agreement Provisions                             3
     2.3   Fixed Deferral Periods                                    4

                                     ARTICLE 3
                            DISTRIBUTIONS AND WITHDRAWALS

     3.1   Date of Distribution                                      4
     3.2   Method of Distribution                                    4
     3.3   Amount of Distribution                                    5
     3.4   Form of Distribution                                      5
     3.5   Withdrawal Election                                       5
</TABLE>
<PAGE>
<TABLE>
                                     ARTICLE 4
                                     ACCOUNTS

<S>                                                                 <C>
     4.1   Establishment of Annual Deferral Accounts                 5
     4.2   Initial Investment of Accounts                            5
     4.3   Valuation of Investment Funds                             6
     4.4   Valuation of Accounts                                     6
     4.5   Nature of Accounts                                        6
     4.6   Account Statements                                        6

                                     ARTICLE 5
                                  INVESTMENT FUNDS

     5.1   Investment Funds                                          7
     5.2   Investment Elections of Participants                      7
     5.3   Transfers                                                 7
     5.4   Nature of Investment Funds                                7
     5.5   Liquidation of Investment Funds                           7

                                     ARTICLE 6
                                      TRUST

     6.1   Establishment of Trust                                    8

                                     ARTICLE 7
                          PLAN OPERATION AND ADMINISTRATION

     7.1   Powers of Committee                                       8
     7.2   Nondiscriminatory Exercise of Authority                   9
     7.3   Reliance on Tables, etc                                   9
     7.4   Indemnification                                           9
     7.5   Notices to Committee                                      9

                                     ARTICLE 8
                                CLAIMS PROCEDURES

     8.1   Establishment of Claims Procedures                        9
     8.2   Claims Denials                                            9
     8.3   Appeals of Denied Claims                                 10
     8.4   Review of Appeals                                        10

                                     ARTICLE 9
                       AMENDMENT AND TERMINATION OF THE PLAN

     9.1   Amendment                                                10
     9.2   Termination                                              10
     9.3   Liquidation of the Trust                                 11
</TABLE>
<PAGE>
<TABLE>
                                     ARTICLE 10
                               MISCELLANEOUS PROVISIONS

<S>                                                                 <C>
     10.1  Headings                                                 11
     10.2  Plan Not Contract of Employment                          11
     10.3  Severability                                             11
     10.4  Prohibition on Assignment                                11
     10.5  Number and Gender                                        12
     10.6  Governing Law                                            12
     10.7  Satisfaction of Claims                                   12
     10.8  No Warranties                                            12
     10.9  Tax Withholding                                          12
     10.10 Facility of Payment                                      12
     10.11 Repayment of Gainsharing Awards                          12
     10.12 Stock Subject to the Plan                                12
</TABLE>
<PAGE>
                      THE PROGRESSIVE CORPORATION EXECUTIVE
                           DEFERRED COMPENSATION PLAN
                   (JANUARY 1, 1997 AMENDMENT AND RESTATEMENT)

WHEREAS, The Progressive Corporation maintains The Progressive Corporation
Executive Deferred Compensation Plan pursuant to a plan document dated December
28, 1994; and,

WHEREAS, it is desired to amend and restate the Plan;

NOW, THEREFORE, effective January 1, 1997, the Plan is hereby amended and
restated in its entirety to provide as follows:

                                    ARTICLE 1
                                   DEFINITIONS

1.1      "Affiliated Company" means any corporation included in the affiliated
         group of corporations as defined in Section 1504 of the Code
         (determined without regard to 1504(b)) of which the Company is the
         common parent corporation.

1.2      "Annual Deferral Account" or "Account" shall have the meaning set forth
         in Section 4.1.

1.3      "Beneficiary" means such person(s) as the Participant has designated. A
         Participant may change his Beneficiary designation at any time. All
         Beneficiary designations (including changes) shall be made in writing
         on such forms as the Committee shall prescribe, and shall become
         effective only when received and accepted by the Committee; provided,
         however, that a Beneficiary designation (including a change) received
         by the Committee after the designating Participant's death shall be
         disregarded. In the absence of a Beneficiary designation, or if the
         designated Beneficiary is no longer living or in existence at the time
         of the Participant's death, all distributions payable from the Plan
         upon the Participant's death shall be paid to the Participant's estate.

1.4      "Change in Control" means a "Change in Control" or "Potential Change in
         Control" within the meaning of The Progressive Corporation 1989
         Incentive Plan (amended and restated as of April 24, 1992 and as
         further amended as of July 1, 1992 and February 5, 1993).

1.5      "Code" means the Internal Revenue Code of 1986, as amended.

1.6      "Committee" means the Executive Compensation Committee of the Board of
         Directors of the Company, or any successor committee.

1.7      "Company" means The Progressive Corporation, an Ohio corporation, or
         its successors.

1.8      "Company Stock Fund" means an Investment Fund consisting of Stock.
<PAGE>
1.9      "Deduction Limitation" means the following described limitation on a
         payment that may otherwise be distributable under the Plan. If the
         Committee determines in good faith prior to a Change in Control that
         there is a reasonable likelihood that any compensation paid to a
         Participant for a taxable year of the Company would not be deductible
         by the Company solely by reason of the limitation under Code Section
         162(m), then to the extent deemed necessary by the Committee to ensure
         that the entire amount of any distribution to the Participant pursuant
         to this Plan prior to a Change in Control is deductible, the Committee
         may elect to defer all or any portion of a distribution under this
         Plan. Any amounts deferred pursuant to this limitation shall continue
         to be deemed to be invested as provided in Article 5. The amounts so
         deferred (subject to investment gains and losses) shall be distributed
         to the Participant or his or her Beneficiary (if the Participant dies)
         at the earliest possible date, as determined by the Committee in good
         faith, on which the deductibility of compensation paid or payable to
         the Participant for the taxable year of the Company during which the
         distribution is made will not be limited by Code Section 162(m), or, if
         earlier, upon a Change in Control. Notwithstanding anything to the
         contrary in this Plan, the Deduction Limitation shall not apply to any
         distributions made after a Change in Control.

1.10     "Deferral Agreement" means a written agreement entered into by an
         Eligible Executive pursuant to Article 2.

1.11     "Deferral" means an amount credited to an Annual Deferral Account
         pursuant to a Deferral Agreement.

1.12     "Disabled" and "Disability" means that a Participant is expected to be
         unable to perform the duties of his usual occupation for at least
         twelve (12) consecutive months, as determined by the Committee.

1.13     "Distribution Event" means, as to each Participant, the earliest of the
         following events:

         (i)      the Participant's death;

         (ii)     the Participant's Termination of Employment; or

         (iii)    Change in Control.

1.14     "Eligible Executive" means any executive of the Company or any
         Affiliated Company who is designated in writing as an Eligible
         Executive by the Committee, excluding, however, individuals who are not
         residents of the United States or are not working at a location in the
         United States.

1.15     "ERISA" means the Employee Retirement Income Security Act of 1974, as
         amended.

1.16     "Fixed Deferral Period" shall have the meaning set forth in Section
         2.3.

1.17     "Fixed Income Fund" means the Vanguard Money Market Reserves - Prime
         Portfolio or such other Investment Fund as may be designated by the
         Committee as the Fixed Income Fund within the meaning of the Plan.

1.18     "Gainsharing Award" means any bonus or other incentive award payable
         with respect to a Plan Year under The Progressive Corporation 1997
         Executive Bonus Plan, The Progressive Corporation 1997 Gainsharing Plan
         or any other plan or program as may be designated by the Committee.
<PAGE>
1.19     "Investment Fund" means a device established from time to time by the
         Committee pursuant to Section 5.1 that is used to calculate gains and
         losses in amounts deferred by Participants under the Plan.

1.20     "Participant" means an Eligible Executive who has deferred receipt of a
         portion of any Gainsharing Award pursuant to a Deferral Agreement.
         Participation shall begin on the date that a Deferral Account is
         established in the name of the Participant and shall end on the date
         that the Participant dies or receives a distribution of the balance of
         all his Deferral Accounts.

1.21     "Plan" means The Progressive Corporation Executive Deferred
         Compensation Plan (January 1, 1997 Amendment and Restatement), as set
         forth herein and as it may be amended from time to time.

1.22     "Plan Year" means 1997 and each subsequent calendar year.

1.23     "Termination of Employment" means the voluntary or involuntary
         cessation of a Participant's active employment with the Company and all
         Affiliated Companies as a result of any reason other than death,
         Disability and approved leave of absence.

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

1.25     "Trust" shall mean the trust maintained pursuant to the Trust Agreement
         and known as The Progressive Corporation Executive Deferred
         Compensation Trust.

1.26     "Trust Agreement" shall mean the agreement of trust between the Company
         and the Trustee executed in furtherance of the Plan, as the same may be
         amended from time to time.

1.27     "Trustee" shall mean the person selected from time to time by the
         Company to serve as trustee under the Trust Agreement.

1.28     "Valuation Date" shall mean each day that the New York Stock Exchange
         is open for trading.

1.29     "Withdrawal Amount" shall have the meaning provided in Article 3.

                                    ARTICLE 2
                         DEFERRAL OF GAINSHARING AWARDS

2.1      Method of Deferral.

         Each Eligible Executive may elect to defer receipt of all or a portion
         of his/her Gainsharing Award in respect of any Plan Year in excess of
         applicable tax withholding and other deductions required to be made in
         respect of the Gainsharing Award by signing a Deferral Agreement and
         delivering it to the Committee. If a Gainsharing Award is payable in
         installments, each installment, whether or not payable in the same Plan
         Year, shall be subject to the same Deferral Agreement.

2.2      Deferral Agreement Provisions.

         Each Deferral Agreement must satisfy all of the following requirements:

         (a)      it must be in writing and be in the form specified by the
                  Committee;
<PAGE>
         (b)      it must be irrevocable;

         (c)      it must apply to only one Gainsharing Award;

         (d)      it must be signed by the Eligible Executive making the
                  Deferral and be delivered to the Committee prior to the Plan
                  Year in which the applicable Gainsharing Award will be earned;

         (e)      it must specify the percentage of the Eligible Executive's
                  Gainsharing Award to be deferred, which percentage shall not
                  be less than ten percent (10%). The same deferral percentage
                  shall apply to each installment of a Gainsharing Award covered
                  by the Deferral Agreement. However, a Deferral Agreement may
                  provide for the deferral of a percentage of that portion of a
                  Gainsharing Award that exceeds a specified gross dollar
                  amount, which percentage shall not be less than ten percent
                  (10%). Notwithstanding the preceding provisions of this
                  Section 2.2(e), no Deferral shall be less than such dollar
                  amount as the Committee may specify from time to time. All
                  Deferrals shall be reduced by applicable tax withholding and
                  other legally required deductions;

         (f)      it must specify whether the balance of the Annual Deferral
                  Account to be established pursuant to that Deferral Agreement
                  will be distributed in a lump sum, in three (3) annual
                  installments or in five (5) annual installments; and

         (g)      it must contain such other provisions, conditions and
                  limitations as may be required by the Company or the
                  Committee.

2.3      Fixed Deferral Periods.

         If an Eligible Executive wishes to defer receipt of all or a portion of
         any Gainsharing Award for a fixed period of time ("Fixed Deferral
         Period"), then his/her Deferral Agreement relating to such Gainsharing
         Award shall specify that Fixed Deferral Period, which shall not be less
         than three (3) years following the end of the Plan Year in which the
         Gainsharing Award will be earned.

                                    ARTICLE 3
                          DISTRIBUTIONS AND WITHDRAWALS

3.1      Date of Distribution.

         The balance of each Annual Deferral Account of a Participant shall be
         distributed within thirty (30) days following the earlier of (i) the
         date a Distribution Event occurs, (ii) the date on which the Fixed
         Deferral Period, if any, applicable to such Account expires, or (iii)
         the date, if any, selected by the Company, in its sole discretion,
         pursuant to Section 9.2. The Committee, in its sole discretion, may
         also permit the balance of all of a Participant's Annual Deferral
         Accounts to be distributed at any time following the date the
         Participant is determined by the Committee to be Disabled. If the
         Committee approves such a Disability distribution, no further Deferrals
         shall be made with respect to the Disabled Participant following the
         date of the Committee's approval, and each Deferral Agreement to which
         such Participant is a party shall be of no further effect.

3.2      Method of Distribution.

         Each distribution of the balance of an Annual Deferral Account made on
         account of the Participant's death shall be made to the Participant's
         Beneficiary. Each distribution made on account of the Participant's
         death, termination of the Plan or a Change in Control shall be paid in
         a
<PAGE>
         lump sum. Each distribution made on account of the Participant's
         Termination of Employment or expiration of a Fixed Deferral Period
         shall be paid in either a lump sum or installments, as specified in the
         applicable Deferral Agreement. Each distribution made on account of the
         Participant's Disability shall be paid in either a lump sum or
         installments, as determined by the Committee in its sole discretion. If
         a Participant elects to receive (or, in the case of Disability, begins
         receiving) payment in installments and dies prior to payment of all
         installments, the balance remaining unpaid at his/her death shall be
         paid to his/her Beneficiary in a lump sum. Installment payments shall
         be paid annually for three (3) years or five (5) years, as specified in
         the applicable Deferral Agreement. Notwithstanding the preceding
         provisions of this Section 3.2, a Participant may elect to change the
         method of distribution elected in respect of any distribution to be
         made on account of Termination of Employment or expiration of a Fixed
         Deferral Period to any of the three permissible options (lump sum,
         installments over three (3) years, installments over five (5) years).
         Each such change must be made in writing on such forms as the Committee
         shall specify and must be delivered to the Committee at least one (1)
         year prior to Termination of Employment or expiration of the Fixed
         Deferral Period.

3.3      Amount of Distribution.

         The amount of each lump sum payment shall be equal to the balance of
         the Annual Deferral Account, as of the Valuation Date immediately
         preceding the date of distribution. The amount of each installment
         payment shall be equal to the balance of the Annual Deferral Account as
         of the Valuation Date immediately preceding the date of payment
         multiplied by a fraction, the numerator of which is one and the
         denominator of which is the number of years remaining in the period
         over which installments are to be paid. Installment distributions to be
         made in Stock shall be rounded to the nearest whole share.
         Notwithstanding anything in the Plan to the contrary, all
         distributions, except those made on account of a Change in Control, are
         subject to the Deduction Limitation.

3.4      Form of Distribution.

         All distributions shall be made in cash, except that a distribution
         representing amounts invested in the Company Stock Fund shall be made
         in Stock.

3.5      Withdrawal Election.

         A Participant may elect at any time to withdraw all of his/her Annual
         Deferral Account balances, less a withdrawal penalty equal to 10% of
         such amount (the net amount shall be referred to as the "Withdrawal
         Amount"). This election can be made at any time before or after
         Disability, death or Termination of Employment, and whether or not the
         Participant is in the process of being paid pursuant to an installment
         payment schedule. No partial withdrawals of the Withdrawal Amount shall
         be allowed. The Withdrawal Amount shall be paid in a lump sum, except
         to the extent the Deduction Limitation requires otherwise. The
         Participant shall make a withdrawal election by giving the Committee
         advance written notice of the election in a form specified by the
         Committee. The election shall be irrevocable. The Participant shall be
         paid (or, if the Deduction Limitation applies, commence to be paid) the
         Withdrawal Amount within 30 days after the Committee's receipt of
         his/her election. Once the Withdrawal Amount is paid, or commences to
         be paid, the Participant's participation in the Plan shall terminate
         and the Participant shall not be eligible to participate in the Plan
         thereafter. If the Deduction Limitation applies, the entire balance of
         all of the Participant's Annual Deferral Accounts shall be reduced by
         the 10% withdrawal penalty effective on the date that payment of the
         Withdrawal Amount is to commence, even though final payment of the last
         portion of the Withdrawal Amount will not be made until permitted by
         the Deduction Limitation provisions. Any portion of the Withdrawal
         Amount not paid immediately shall continue to be deemed to be invested
         as provided in Article 5. If a Participant dies prior to payment of any
         portion of a Withdrawal Amount, the remaining portion shall be paid to
         his/her Beneficiary in a lump sum, subject to the Deduction Limitation.
         The provisions of Section 3.4 shall apply to all withdrawals under this
         Section 3.5.
<PAGE>
                                    ARTICLE 4
                                    ACCOUNTS

4.1      Establishment of Annual Deferral Accounts.

         The Committee shall establish an Annual Deferral Account in the name of
         each Participant for each Gainsharing Award, or portion thereof, that
         is the subject of a Deferral Agreement. Such Account shall be
         established as of the first date that such Gainsharing Award or portion
         otherwise would have been paid to the Participant. Each Annual Deferral
         Account shall be credited with the deferred portion of such Gainsharing
         Award. Thereafter, all Annual Deferral Accounts shall be valued and
         administered as provided in this Article.

4.2      Investment of Accounts.

         All credits to an Annual Deferral Account of a Participant shall be
         deemed to be invested in such Investment Funds as the Participant shall
         elect from time to time in accordance with Article 5. The number of
         shares of Stock to be credited to a Participant's Account by virtue of
         a Participant's election to invest a portion of a Deferral in the
         Company Stock Fund shall be determined on the date of the Deferral,
         based on the closing price of Stock on the immediately preceding
         Valuation Date as quoted in the New York Stock Exchange composite
         trading. However, the amount of a Deferral otherwise elected by the
         Participant to be invested in the Company Stock Fund shall be reduced
         to the extent necessary to insure that only whole shares of Stock are
         credited and an amount corresponding to any fractional shares shall be
         invested in the Fixed Income Fund.

4.3      Valuation of Investment Funds.

         As of each Valuation Date, the Trustee shall compute the value of each
         Investment Fund from which shall be determined the net gain or loss of
         such Investment Fund since the immediately preceding Valuation Date.
         The net gain or loss shall include any unrealized and realized profits
         and losses, and any dividends, interest or other income and any
         expenses which are due or accrued, but shall not include distributions
         from such Investment Fund or dividends transferred to the Fixed Income
         Fund pursuant to the following sentence. Notwithstanding the preceding
         provisions of this Section, any cash dividends paid in respect of Stock
         shall not be considered part of the gain of the Company Stock Fund;
         instead, those dividends shall be considered as having been transferred
         to the Fixed Income Fund as of the date such dividends are paid. In
         determining the value of each Investment Fund, the Trustee shall use
         the following values: securities listed on any nationally recognized
         securities exchange shall be valued at the closing price reported on
         any such exchange on the Valuation Date, or, if there were no sales on
         the Valuation Date, then at the quoted bid price on the Valuation Date.
         Securities not listed on a recognized securities exchange shall be
         valued at the quoted closing bid price on the Valuation Date. A unit of
         participation in a common trust fund maintained by the Trustee or a
         share in a mutual fund shall be valued at the unit value, or share
         price respectively, in effect at the close of business on the Valuation
         Date. Securities with respect to which there were no available sale
         prices or bid prices on the Valuation Date, and any other investments,
         shall be valued at prices deemed by the Trustee to represent the fair
         market value thereof on the Valuation Date.

4.4      Valuation of Accounts.

         As of each Valuation Date, the net gain or loss of each Investment Fund
         shall be allocated among the appropriate Annual Deferral Accounts in
         accordance with such procedures as the Committee shall establish, which
         procedures shall apply uniformly to all Participants.
<PAGE>
4.5      Nature of Accounts.

         All credits to each Annual Deferral Account of each Participant shall
         be recorded as a liability on the books of the Company. However, no
         Participant or Beneficiary shall have any proprietary rights of any
         nature with respect to any Account of any Participant or with respect
         to any funds, securities or other property owned by the Company or any
         Affiliated Company that is held in the Trust or that otherwise may be
         represented from time to time by Investment Funds. All payments under
         the Plan shall be made from the Trust or from the Company's general
         funds and in no event shall any Participant or Beneficiary have any
         claims or rights to any payment hereunder that are superior to any
         claims or rights of any general creditor of the Company.

4.6      Account Statements.

         The Committee will furnish each Participant with quarterly statements
         of the value of each of his/her Annual Deferral Accounts.

                                    ARTICLE 5
                                INVESTMENT FUNDS

5.1      Investment Funds.

         The Committee shall establish and maintain the Company Stock Fund and
         such other Investment Funds as are specified from time to time by the
         Company. In this regard, the Company may choose to offer as Investment
         Funds any investment vehicles, including without limitation: (i)
         securities issued by investment companies advised by affiliates of the
         Trustee, (ii) guaranteed investment contracts recommended by the
         Trustee, and (iii) collective investment trusts maintained by the
         Trustee.

5.2      Investment Elections of Participants.

         Each Participant shall make an investment election in the manner
         prescribed by the Committee, directing the manner in which his/her
         Deferrals shall be deemed to be invested. Each investment election must
         be made in writing at the time the applicable Deferral Agreement is
         signed and may be changed upon written notice to the Committee at least
         five (5) business days prior to the deemed deposit of the applicable
         Deferral into one or more Investment Funds. Each Participant may make a
         separate investment election for each of his/her Annual Deferral
         Accounts. Each investment election shall specify that Deferrals shall
         be deemed to be deposited in one or more of the Investment Funds in
         percentages that are each an integral multiple of 1% and that in the
         aggregate equal 100% of the Deferral.

5.3      Transfers. Amounts deemed to be invested in an Investment Fund pursuant
         to this Section may be transferred to another Investment Fund in
         accordance with such procedures and limitations as the Committee shall
         prescribe. The procedures and limitations prescribed by the Committee
         may include, without limitation, provisions which (i) limit transfers
         to specified dollar amounts or percentages (ii) limit the number of
         transfers that each Participant may make each Plan year (iii) limit the
         dates as of which transfers may become effective and (iv) impose
         waiting periods or other restrictions in connection with multiple
         transfers in and out of the same Investment Fund. All such procedures
         and limitations shall apply uniformly to similarly situated
         Participants.
<PAGE>
5.4      Nature of Investment Funds.

         Notwithstanding anything in the Plan, Trust or any Deferral Agreement
         to the contrary, no Participant shall have any rights or interests in
         any particular funds, securities or property of the Company, any
         Affiliated Company or the Trust, or in any investment vehicle in which
         Deferrals are deemed to be invested, by virtue of any investment
         election made by the Participant under the Plan or any transactions
         engaged in by the Trust. Each Annual Deferral Account, however, shall
         be credited/charged in accordance with Article 4 with gains/losses as
         if the Participant in fact had made a corresponding actual investment.

5.5      Liquidation of Investment Funds.

         If any Investment Fund is liquidated or otherwise ceases to exist
         without a successor, then that portion of each Account balance that
         previously has been deemed to have been invested in that Investment
         Fund shall be deemed to have been transferred to an Investment Fund
         consisting of money market instruments, or, if none, such other
         Investment Fund selected by the Committee.

                                    ARTICLE 6
                                      TRUST

6.1      Establishment of Trust.

         The Company shall establish and maintain a Trust to provide a source of
         funds to assist the Company in meeting its liabilities under the Plan.
         Within thirty (30) days following the end of each Plan Year ending
         after the Trust has become irrevocable pursuant to the Trust Agreement,
         the Company shall be required to irrevocably deposit additional cash or
         other property to the Trust in an amount sufficient to pay each
         Participant or Beneficiary the benefits payable pursuant to the terms
         of the Plan as of the close of that Plan year.

         The principal of the Trust, and any earnings thereon, shall be held
         separate and apart from other funds of Company and shall be used
         exclusively for the uses and purposes of Plan Participants and general
         creditors of the Company as set forth herein and in the Trust
         Agreement. Plan Participants and their Beneficiaries shall have no
         preferred claim on, or any beneficial ownership interest in, any assets
         of the Trust. Any rights created under the Plan and the Trust Agreement
         shall be mere unsecured contractual rights of Plan Participants and
         their Beneficiaries against Company. Any assets held by the Trust will
         be subject to the claims of the Company's general creditors under
         federal and state law in the event of Insolvency, as defined in the
         Trust Agreement. All assets deposited in the Trust shall be held,
         administered and distributed by the Trustee in accordance with the
         Trust Agreement. The Company shall pay directly, or reimburse the
         Trustee for, all taxes due in respect of any income or gains on Trust
         assets.

                                    ARTICLE 7
                        PLAN OPERATION AND ADMINISTRATION

7.1      Powers of Committee.

         The Committee will have full power to administer the Plan. Such power
         includes, but is not limited to, the following authority:

         (a)      to make and enforce such rules and regulations as it deems
                  necessary or proper for the efficient administration of the
                  Plan;
<PAGE>
         (b)      to interpret the Plan and to decide all matters arising
                  thereunder, including the right to resolve or remedy any
                  ambiguities, inconsistencies or omissions. All such
                  interpretations shall be final and binding on all parties;

         (c)      to compute the amounts payable to any Participant or
                  Beneficiary or other person in accordance with the provisions
                  of the Plan;

         (d)      to authorize disbursements from the Trust or the Plan;

         (e)      to keep such records and submit such filings, elections,
                  applications, returns or other documents or forms as may be
                  required under ERISA, the Code or other applicable law;

         (f)      to appoint such agents, counsel, accountants and consultants
                  as may be desirable to assist in administering the Plan;

         (g)      To exercise the other powers that are expressly granted to it
                  herein, or that are impliedly necessary for it to carry out
                  any of its responsibilities hereunder; and

         (h)      by written instrument, to delegate any of the foregoing
                  powers.

7.2      Nondiscriminatory Exercise of Authority.

         The Committee shall exercise its authority in a nondiscriminatory
         manner so that all persons similarly situated will receive
         substantially the same treatment.

7.3      Reliance on Tables, etc.

         The Committee will be entitled, to the extent permitted by law, to rely
         conclusively on all tables, valuations, certificates, opinions and
         reports which are furnished by any accountant, Trustee, counsel or
         other expert retained by the Committee to assist it in administering
         the Plan.

7.4      Indemnification.

         In addition to whatever rights of indemnification to which employees,
         officers and directors of the Company and the Affiliated Companies may
         be entitled under the articles of incorporation, regulations or bylaws
         of the Company or the Affiliated Companies, under any provision of law,
         or under any other agreement, the Company shall satisfy any liabilities
         actually and reasonably incurred by any such employee, officer or
         director, including expenses, attorneys' fees, judgments, fines and
         amounts paid in settlement, in connection with any threatened, pending,
         or completed action, suit, or proceeding which is related to the
         exercise or failure to exercise by such person or persons of any of the
         powers, authority, responsibilities, or discretion of the Company, the
         Affiliated Companies or the Committee provided under the Plan or the
         Trust Agreement, or reasonably believed by such person or persons to be
         provided thereunder, and any action taken by such person or persons in
         connection therewith.

7.5      Notices to Committee.

         The Committee shall designate one or more addresses to which notices
         and other communications to the Committee shall be sent. No notice or
         other communication shall be considered to have been given to or
         received by the Committee until it has been delivered to the
         Committee's attention at one of such designated addresses.
<PAGE>
                                    ARTICLE 8
                                CLAIMS PROCEDURES

8.1      Establishment of Claims Procedures.

         The Committee shall establish reasonable procedures under which a
         claimant, who may be a Participant or Beneficiary, may present a claim
         for benefits under this Plan.

8.2      Claims Denials.

         Unless such claim is allowed in full by the Committee, written notice
         of the denial shall be furnished to the claimant within ninety (90)
         days (which may be extended by a period not to exceed an additional
         ninety (90) days if special circumstances so require and proper written
         notice to the claimant is given prior to the expiration of the initial
         ninety (90) day period) setting forth the following in a manner
         calculated to be understood by the claimant:

         (a)      The specific reason(s) for the denial;

         (b)      Specific reference(s) to any pertinent provision(s) of the
                  Plan or rules promulgated pursuant thereto on which the denial
                  is based;

         (c)      A description of any additional information or material as may
                  be necessary to perfect the claim, together with an
                  explanation of why it is necessary; and

         (d)      An explanation of the steps to be taken if the claimant wishes
                  to resubmit his/her claim for review.

8.3      Appeals of Denied Claims.

         Within a reasonable period of time after the denial of the claim, but
         in any event not to be more than sixty (60) days, the claimant or
         his/her duly authorized representative may make written application to
         the Committee for a review of such denial. The claimant or his/her
         representative may review documents held by the Committee and pertinent
         to the denial of such claim, and may submit a written statement of
         issues and comments together with such application for review.

8.4      Review of Appeals.

         If an appeal is timely filed, the Committee shall conduct a full and
         fair review of the claim and mail or deliver to the claimant its
         written decision within sixty (60) days after the claimant's request
         for review (which may be extended by a period not to exceed an
         additional sixty (60) days if special circumstances or a hearing so
         require and proper written notice to the claimant is given prior to the
         expiration of the initial sixty (60) day period). Such decision shall:

                  (i)      Be written in a manner calculated to be
                           understandable by the claimant;

                  (ii)     State the specific reason(s) for the decision;

                  (iii)    Make specific reference to pertinent provision(s) of
                           the Plan upon which such decision is based; and

                  (iv)     Be final and binding on all parties.
<PAGE>
                                    ARTICLE 9
                      AMENDMENT AND TERMINATION OF THE PLAN

9.1      Amendment.

         The Company may amend the Plan and Trust Agreement in any respect at
         any time for any reason by action of the Committee without liability to
         any Participant, Beneficiary or other person for any such amendment or
         for any other action taken pursuant to this Section 9.1, provided that
         any amendment required to be approved by the Company's shareholders
         pursuant to Section 162(m) of the Code shall not be effective until
         approved by the Company's shareholders in accordance with the
         requirements of Section 162(m) and further provided that no such
         amendment shall be made retroactively in a manner that would deprive
         any Participant of any rights or benefits which have accrued to his/her
         benefit under the Plan as of the date such amendment is proposed to be
         effective, unless such amendment is necessary to comply with applicable
         law.

9.2      Termination.

         The Company may terminate the Plan at any time for any reason by action
         of the Committee without any liability to any Participant, Beneficiary
         or other person for any such termination or for any other action taken
         pursuant to this Section 9.2. Following termination of the Plan, and
         notwithstanding the provisions of any Deferral Agreement entered into
         prior to such termination, no additional Deferrals may be made
         hereunder, but all existing Accounts shall continue to be administered
         in accordance with the Plan, as in effect immediately prior to
         termination, and shall be distributed in accordance with such terms of
         the Plan and the applicable Deferral Agreements, unless and until the
         Company elects to accelerate distribution as provided below. At any
         time on or after the effective date of termination of the Plan, the
         Company, in its sole discretion, may elect to accelerate the
         distribution of the entire balance of each Participant's Accounts. Such
         accelerated distributions shall be made in accordance with Article 3,
         except that all distributions shall be made in a lump sum based on the
         value of the Accounts, determined as of the Valuation Date immediately
         preceding the date of distribution. Upon the completion of
         distributions to all Participants or Beneficiaries, as the case may be,
         no Participant, Beneficiary or person claiming under or through them,
         will have any claims in respect of the Plan.

9.3      Liquidation of the Trust.

         The Trust shall continue in existence after the termination of the Plan
         for such period of time as may be required to complete the liquidation
         thereof in accordance with the terms of this Article 9.

                                   ARTICLE 10
                            MISCELLANEOUS PROVISIONS

10.1     Headings.

         The headings of the Plan have been inserted for convenience of
         reference only and are not to be deemed controlling in any
         constructions of the provisions herein (other than with respect to
         defined terms).

10.2     Plan Not Contract of Employment.

         The existence of the Plan shall not create, evidence or change any
         contract of employment with any Participant. The right of the Company
         and all Affiliated Companies to take corrective,
<PAGE>
         disciplinary or other action with respect to their employees, including
         terminating their respective employment at any time for any reason,
         shall not be affected by any provision of this Plan, and the Company
         and the Affiliated Companies will not be deemed responsible to provide
         continuing employment for any reason, at any time solely by reason of
         this Plan.

10.3     Severability.

         If any provision of the Plan shall be invalid, such provision shall be
         fully severable, and the remainder of the Plan and the application
         thereof shall not be affected thereby.

10.4     Prohibition on Assignment.

         No right or interest under the Plan of any Participant or Beneficiary
         shall be subject at any time or in any manner to anticipation,
         alienation, assignment (either at law or in equity), encumbrance (as
         security or otherwise), garnishment, levy, execution, or other legal or
         equitable process, and no Participant or Beneficiary shall have the
         power at any time or in any manner to anticipate, transfer, assign
         (either at law or in equity), alienate, or subject to attachment,
         garnishment, levy, execution or other legal or equitable process, or in
         any way encumber, such Participant's or Beneficiary's rights or
         interests under the Plan, and any attempt to do so shall be void;
         provided, however, that the Company shall have the unrestricted right
         to set off against or recover out of any payments due a Participant or
         Beneficiary at the time such payments would have otherwise been payable
         hereunder, any amounts owed the Company or any Affiliated Company by
         such Participant or Beneficiary.

10.5     Number and Gender.

         Any use of the singular shall be interpreted to include the plural and
         the plural the singular. Any use of the masculine, feminine or neuter
         shall be interpreted to include the masculine, feminine and neuter, as
         the context shall require.

10.6     Governing Law.

         To the extent not preempted by Federal law, the provisions of the Plan
         shall be construed, regulated and administered under the laws of the
         State of Ohio.

10.7     Satisfaction of Claims.

         Any payment to any Participant or Beneficiary in accordance with the
         terms of the Plan shall, to the extent thereof, be in full satisfaction
         of all claims hereunder, whether they be against the Company, the
         Committee, or the Trustee, any of whom may require the Participant or
         Beneficiary (or legal representative), as a condition precedent to such
         payment to execute a release and receipt therefor.

10.8     No Liability.

         Participation in the Plan is entirely at the risk of each Participant.
         Neither the Company, any Affiliated Company, the Committee, the Trustee
         nor any other person associated with the Plan shall have any liability
         for any loss or diminution in the value of Accounts, or for any failure
         of the Plan to effectively defer recognition of income or to achieve
         any Participant's desired tax treatment or financial results.
<PAGE>
10.9     Tax Withholding.

         All payments under the Plan shall be subject to federal, state and
         local income tax withholding and other legally required deductions.

10.10    Facility of Payment.

         If the Committee determines that a Participant or Beneficiary entitled
         to receive a payment under this Plan is (at the time such payment is to
         be made) a minor or physically, mentally or legally incompetent to
         receive such payment and that another person or an institution has
         legal custody of such minor or incompetent individual, the Committee
         may cause payment to be made to such person or institution having
         custody of such Participant or Beneficiary. Such payment, to the extent
         made, shall operate as a complete discharge of obligation by the
         Committee, the Company, the Trustee and the Trust.

10.11    Repayment of Gainsharing Awards.

         If any amount credited to an Annual Deferral Account represents a
         portion of a Gainsharing Award that is subsequently found to be
         repayable by the Participant to the Company or any Affiliated Company
         pursuant to the plan pursuant to which the Gainsharing Award was made,
         the amount of that credit shall nevertheless remain unaffected by that
         repayment obligation, and the Participant shall make the required
         repayment out of his/her own funds.

10.12    Stock Subject to the Plan.

         Subject to adjustment as provided below, the total number of shares of
         Stock reserved and available for issuance in connection with the Plan
         is Three Hundred Thousand (300,000). Any Stock issued hereunder may
         consist, in whole or in part, of authorized and unissued shares or
         treasury shares. If there is a merger, reorganization, consolidation,
         recapitalization, share dividend, share split, combination of shares or
         other change in corporate structure of the Company affecting the Stock,
         such substitution or adjustment shall be made in the aggregate number
         of shares of Stock reserved for issuance under the Plan as may be
         approved by the Committee in its sole discretion; provided that the
         number of shares of Stock to be issued in connection with the Plan
         shall always be a whole number. Any fractional shares shall be
         eliminated and the value of such fractional shares shall be deemed to
         have been transferred to the Fixed Income Fund as of the effective date
         of such substitution or adjustment.

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
duly authorized officers as of this 16th day of December , 1996.

                                    THE PROGRESSIVE CORPORATION

                                    By:     /s/ David M. Schneider
                                            -------------------------
                                    Title:  Secretary
<PAGE>
                 SECOND AMENDMENT TO THE PROGRESSIVE CORPORATION
                      EXECUTIVE DEFERRED COMPENSATION PLAN
                   (JANUARY 1, 1997 AMENDMENT AND RESTATEMENT)

         WHEREAS, The Progressive Corporation Executive Deferred Compensation
Plan is currently maintained pursuant to a January 1, 1997 Amendment and
Restatement and the First Amendment thereto ("Plan"); and

         WHEREAS, it is deemed desirable to amend the Plan further;

         NOW, THEREFORE, the Plan is hereby amended in the respects hereinafter
set forth, effective December 1, 1997.

         1.       Section 2.2(f) of the Plan is hereby amended and restated in
                  its entirety to provide as follows:

                           "it must specify whether the balance of the Annual
                           Deferral Account to be established pursuant to that
                           Deferral Agreement will be distributed in a lump sum,
                           in three (3) annual installments, in five (5) annual
                           installments or in ten (10) annual installments; and"

         2.       Section 3.2 of the Plan is hereby amended and restated in its
                  entirety to provided as follows:

                  "Each distribution of the balance of an Annual Deferral
         Account made on account of the Participant's death shall be made to the
         Participant's Beneficiary. Each distribution made on account of the
         Participant's death, termination of the Plan or a Change in Control
         shall be paid in a lump sum. Each distribution made on Each
         distribution made on account of the Participant's death, termination of
         the Plan or a Change in Control shall be paid in a lump sum. Each
         distribution made on account of the Participant's Termination of
         Employment or expiration of a Fixed Deferral Period shall be paid in
         either a lump sum or installments, as specified in the applicable
         Deferral Agreement. Each distribution made on account of the
         Participant's Disability shall be paid in either a lump sum or
         installments, as determined by the Committee in its sole discretion. If
         a Participant elects to receive (or, in the case of Disability, begins
         receiving) payment in installments and dies prior to payment of all
         installments, the balance remaining unpaid at his/her death shall be
         paid to his/her Beneficiary in a lump sum. Installment payments shall
         be paid in three (3) annual installments, in five (5) annual
         installments or in ten (10) annual installments, as specified in the
         applicable Deferral Agreement. Notwithstanding the preceding provisions
         of this Section 3.2, a Participant may elect to change the method of
         distribution elected
<PAGE>
         in respect of any distribution to be made on account of Termination of
         Employment or expiration of a Fixed Deferral Period to any of the four
         permissible options (lump sum, in three (3) annual installments, in
         five (5) annual installments or in ten (10) annual installments). Each
         such change must be made in writing on such forms as the Committee
         shall specify and must be delivered to the Committee at least one (1)
         year prior to Termination of Employment or expiration of the Fixed
         Deferral Period."

         3.   Except as expressly provided in this Amendment, the terms and
              provisions of the Plan shall remain entirely unchanged and
              continue in full force and effect.

         IN WITNESS WHEREOF, the undersigned has hereunto caused this Amendment
to be executed by its duly authorized representative effective as of the date
set forth above.

                                    THE PROGRESSIVE CORPORATION

                                                    By: /s/ David M. Schneider
                                                        -----------------------
                                                    Title: Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}]]