Document:

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                                                                    Exhibit 4(a)

                           THE PROGRESSIVE CORPORATION

                      2003 DIRECTORS EQUITY INCENTIVE PLAN

SECTION 1.  ESTABLISHMENT; PURPOSE; DEFINITIONS.

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

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

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

          "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.

          "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 responsibilities held by such Participant as a Board member
     and which is expected to be permanent or for an indefinite duration.

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          "Eligible Directors" 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" has the meaning assigned to it in Section 6(b)(2).

          "Participant" means an Eligible Director who holds an outstanding
     Award granted under the Plan.

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

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

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          "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)(7).

          "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.

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. 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.

          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, 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 350,000. 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

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     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 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 6,000 shares of
     Stock (subject to adjustment as provided in Section 3(c) hereof) during any
     calendar year.

SECTION 4.  ELIGIBILITY.

          All directors of the Company who are not full time employees of the
Company or any of its subsidiaries ("Eligible Directors") 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 Directors 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)); the date or dates or conditions upon
     which Restricted Stock Awards will vest; the period or periods within which
     such Restricted Stock Awards may be subject to restrictions and 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 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

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     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.

          (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) At 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 to the Participant and the applicable restrictions may be noted
          in the records of the Company's stock transfer agent and in the book
          entry system.

          (6) Awards of Restricted Stock will vest and all restrictions thereon
          will terminate upon the lapse of a period of time specified by the
          Committee at the time of grant, 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"). 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.

          (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

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          to receive any dividends. The Committee, in its sole discretion, as
          determined at the time 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(c), 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) Subject to Section 5(b)(5), if a Participant dies while serving
          as a member of the Board, his or her estate shall be entitled to
          receive any shares of Restricted Stock held by such Participant at the
          time of death and such Restricted Stock shall thereafter vest, or any
          restrictions lapse, on the vesting date or dates specified in the
          related Award Agreements.

          (11) If a Participant resigns or is removed from the Board by reason
          of a Disability, he or she shall be entitled to retain any Restricted
          Stock held by him or her at the time of such resignation or removal
          and such Restricted Stock shall thereafter vest, or any restrictions
          lapse, on the vesting date or dates specified in the related Award
          Agreements.

          (12) Unless otherwise determined by the Committee at or after the time
          of granting any Restricted Stock Award, if a Director resigns or is
          removed from the Board for any reason other than death or Disability
          or does not stand for re-election, all Restricted Stock held by such
          Participant which is unvested or subject to restriction at the time of
          such resignation or removal, or at the time such Director leaves the
          Board, shall thereupon be forfeited.

SECTION 6.        STOCK OPTIONS.

          (a) Grant. Subject to the terms and conditions of the Plan, Stock
     Options may be granted to Eligible Directors 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; the time or times at which Stock Options will vest and become
     exercisable; and the other terms and conditions of the Stock Options (and
     the related Option Award Agreements) in addition to those set forth in
     Sections 6(b) and 6(c). All Stock Options granted under the Plan shall be
     Non-Qualified Stock Options.

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          (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 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.

          (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.

          (3) Exercise. Stock Options shall be exercisable at such time or times
          and subject to such terms and conditions as shall be determined by the
          Committee at or after grant; provided, however, that, except as
          provided in Section 6(b)(6) and unless otherwise determined by the
          Committee at or after grant, no Stock Option shall be exercisable
          prior to six months and one day following the date of grant. If any
          Stock Option is exercisable only in installments or only after a
          specified vesting date, the Committee may accelerate or waive, in
          whole or in part, such installment exercise provisions or vesting
          date, at any time at or after grant based on such factors as the
          Committee shall determine, in its sole discretion.

          (4) Method of Exercise. Subject to whatever installment exercise
          provisions apply with respect to such Stock Option, and 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 prior approval of the Committee,
          in its sole discretion, at or after grant, payment, in full or in
          part, of the Option Exercise Price 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. 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. Subject to 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 Section 6(b)(3), by the Participant's

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          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.

          (6) Termination by Death. If any Participant dies, any Stock Option
          held by such Participant at the time of his or her death may
          thereafter be exercised, to the extent such Option was exercisable at
          the time of death or would have become exercisable within one year
          from the time of death had the Participant continued to fulfill all
          conditions of the Option during such period (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. The balance of the Stock Option
          shall be forfeited.

          (7) Termination by Reason of Disability. Subject to Section 6(b)(3),
          if a Participant resigns or is removed from the Board by reason of a
          Disability, any Stock Option then held by such Participant may
          thereafter be exercised, to the extent such Option is exercisable at
          the time of such resignation or removal or would have become
          exercisable within one year from the time of such resignation or
          removal 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 resignation or removal; provided 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
          resigns or is removed from the Board for any reason other than death
          or Disability, all Stock Options held by such Participant shall
          thereupon immediately terminate.

     (c) 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
     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.

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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 and limitations, 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 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

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          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 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, 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 shareholders, either 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

                                      -10-

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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 exercise prices lower than those specified in
Section 6(b)(1) or (c) modify the Plan's eligibility requirements.

          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 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
and deferred 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 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) 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).

                                      -11-

<PAGE>

          (d) 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.

          (e) 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.

          (f) 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 respect to such Award, unless
     and until such Participant has executed an Award Agreement evidencing the
     Award, in 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.

          (g) 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.

                                      -12-<PAGE>

                                                                    Exhibit 4(b)

                           THE PROGRESSIVE CORPORATION
                      2003 DIRECTORS EQUITY INCENTIVE PLAN
                        RESTRICTED STOCK AWARD AGREEMENT

     This Agreement ("Agreement") is made this <Grant Date> by and between
<Participant Name> ("Participant") and The Progressive Corporation (the
"Company").

     1.   AWARD OF RESTRICTED STOCK. The Company hereby grants to Participant an
award (the "Award") of restricted stock (the "Restricted Stock") consisting of
<# of Shares> shares of the Company's Common Shares, $1 Par Value ("Common
Shares"), pursuant and subject to The Progressive Corporation 2003 Directors
Equity Incentive Plan (the "Plan").

     2.   CONDITIONS TO PARTICIPANT'S RIGHTS UNDER THIS AGREEMENT. This
Agreement shall not become effective, and Participant shall have no rights with
respect to the Award or the Restricted Stock, unless and until both of the
following have occurred to the Company's satisfaction:

     a.   Participant has fully executed this Agreement and delivered it to the
          Company (in the Company's discretion, such execution and delivery may
          be accomplished through electronic means); and

     b.   Participant has fully executed a stock power in the form attached as
          Appendix A and delivered it to the Company, including a "Medallion
          Guarantee" by a qualified bank, securities broker or other financial
          institution as further described on Appendix A.

     3.   RESTRICTIONS; VESTING. The Restricted Stock shall be subject to the
restrictions and other terms and conditions set forth in the Plan, which are
hereby incorporated herein by reference, and in this Agreement. Subject to the
terms and conditions of the Plan and this Agreement, Participant's rights in and
to the shares of Restricted Stock shall vest on <Vesting Date>.

     The shares of Restricted Stock awarded under this Agreement shall vest as
set forth above unless, prior to such vesting date, the Award and the applicable
shares of Restricted Stock are forfeited or become subject to accelerated
vesting under the terms and conditions of the Plan. Until shares of Restricted
Stock vest, Participant shall not sell, transfer, pledge, assign or otherwise
encumber such shares of Restricted Stock.

     4.   MANNER IN WHICH SHARES WILL BE HELD. Stock certificates evidencing the
shares of Restricted Stock awarded under this Agreement shall be registered in
the name of Participant and 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. Such
certificates shall bear an appropriate legend referring to the terms, conditions
and restrictions applicable to such Award.

     In the discretion of the Company, any or all shares of Restricted Stock
awarded to Participant hereunder may be issued in, or after issuance may be
transferred to, book-entry form and held by the Company in such form. In such
event, no stock certificates evidencing such shares will be held, the applicable
restrictions will be noted in the records of the Company's transfer agent and in
the book entry system, and upon vesting, Participant may request that the
Company issue a stock certificate for the applicable number of Common Shares.

     5.   RIGHTS OF SHAREHOLDER. Except as otherwise provided in this Agreement
or the Plan, Participant shall have, with respect to the shares of Restricted
Stock awarded hereunder, all of the rights

                                      -1-

<PAGE>

of a shareholder of the Company, including the right to vote the shares and the
right to receive any dividends as declared by the Company's Board of Directors.

     6.   SHARES NON-TRANSFERABLE. No shares of Restricted Stock shall be
transferable by Participant other than by will or by the laws of descent and
distribution. 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.

     7.   TERMINATION OF SERVICE. Except as otherwise provided in the Plan or as
determined by the Compensation Committee of the Company's Board of Directors, if
Participant resigns or is removed from the Board of Directors for any reason
other than death or Disability or does not stand for re-election, all Restricted
Stock held by Participant which is unvested or subject to restriction at the
time of such resignation or removal, or at the time Participant leaves the
Board, shall be automatically forfeited.

     8.   ENTIRE AGREEMENT: This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any other agreement,
representation or communication, whether oral or in writing, between the parties
hereto relating to subject matter hereof, provided that the Agreement shall be
at all times subject to the Plan as provided above.

     9.   AMENDMENT. The Committee, in its sole discretion, may hereafter amend
the terms of this Award, but no such amendment shall be made which would impair
the rights of Participant, without Participant's consent.

     10.  DEFINITIONS: Unless otherwise defined in this Agreement, each
capitalized term in this Agreement shall have the meaning given to it in the
Plan.

     Participant hereby: (i) acknowledges receiving a copy of the Plan
Description relating to the Plan, and represents that he or she is familiar with
all of the material provisions of the Plan, as set forth in such Plan
Description; (ii) accepts this Agreement and the Restricted Stock awarded
pursuant hereto subject to all provisions of the Plan and this Agreement; and
(iii) agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee relating to the Plan, this Agreement or the
Restricted Stock awarded hereunder.

                                      -2-

<PAGE>

                     APPENDIX A --- IRREVOCABLE STOCK POWER

For Value Received, the undersigned does hereby assign and transfer to
                                                                       ---------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
              shares of Common Shares, $1.00 par value per share, of The
--------------

Progressive Corporation ("Company") represented by certificate(s)

no(s).
      --------------------------------------------------------------------------

-------------------------------------------------------------------------------,

--------------------------------------------------------------------------------
inclusive, standing in the name of the undersigned on the books of the Company.

The undersigned does hereby irrevocably constitute and appoint
                                                               -----------------

Attorney to transfer the said stock on the books of the Company, with full power
of substitution in the premises.

------------------------------
Printed Name

------------------------------
Signature

Date:
     -------------------------

         IMPORTANT: The signature of the assignor (Participant) must be
         guaranteed by an eligible guarantor institution (bank, stock broker,
         savings and loan association, or credit union) with membership in an
         approved signature guarantee medallion program pursuant to Securities
         and Exchange Commission Rule 17Ad-15.

                                     -------------------------------
                                     Name of Guarantor Institution

                                     -------------------------------
                                     Signature Medallion Guaranteed

                                      -3-

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